1
[TYPE] EX-10
[DESCRIPTION] Exhibit 10.125 -
LEASE
This Lease is made and entered into as of the 3rd day of April, 1998, by
and between ALPINE INSURANCE COMPANY, an Illinois corporation, hereinafter
referred to as "Landlord," and ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, hereinafter referred to as
"Tenant." For and in consideration of the rental and of the covenants and
agreements hereinafter set forth to be kept and performed by the Tenant,
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the
premises herein described for the term, at the rental and subject to and upon
all of the terms, covenants and agreements hereinafter set forth.
1. DESCRIPTION OF PREMISES:
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord,
upon the terms and conditions herein set forth, 3,507 square feet of office
space and 532 square feet of designated hallway and restroom areas of the
commercial building known as ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ of Santa
▇▇▇▇▇▇▇, State of California (hereinafter "the Premises"). Tenant's Premises of
Landlord's building is outlined on a floor plan of the building which is
attached hereto as Exhibit "A" and incorporated herein. The Premises are
comprised of both the office space and the hallway and restroom areas leased to
Tenant. Notwithstanding that fact, Tenant shall not have exclusive use of the
portion of the Premises comprised of hallway and restroom areas.
2. TERM:
The term of this Lease shall be for five (5) years and four (4) weeks
commencing on April 3, 1998 and ending on May 1, 2003. As used in this Lease,
the "Lease Term" shall mean the term of this Lease as specified in this
paragraph and any extensions thereof agreed to by Landlord and Tenant. Tenant
shall have access to the Premises, without charge of rent, to install equipment
and complete modifications approved by Landlord, commencing on April 3, 1998.
3. RENT:
Tenant agrees to pay to Landlord as rent in lawful money of the United
States without deduction or offset at such place or places as may be designated
from time to time by the Landlord the following:
A. Rent. Tenant agrees to pay Landlord as rent without abatement,
offset or deduction, the sum of Three Thousand Seven Hundred Seventy-Three
Dollars ($3,773.00) in advance, beginning on May 1, 1998, and Three Thousand
Seven Hundred Seventy-Three Dollars ($3,773.00) on the first day of each and
every succeeding calendar month through the first year of the Lease Term.
B. Annual Rent Adjustment. The rent shall be adjusted each year on May
1, 1999, May 1, 2000, May 1, 2001, and May 1, 2002 by increasing the rent in the
amount of the lesser of (a) five percent (5%) of the rent applicable for the
previous year or (b) the change, if any, from the Base Month specified below in
the Consumer Price Index of the Bureau of Labor Statistics of the U.S.
Department of Labor for All Urban Consumers, Los Angeles-Long Beach-Anaheim
2
Area, all items (1982-1984=100), hereinafter referred to as the "CPI." The rent
based on the CPI shall be calculated as follows: the rent for the twelve (12)
months immediately preceding the adjustment date shall be multiplied by a
fraction, the numerator of which is the CPI of the calender months two months
prior to the adjustment date and the denominator of which is the CPI of the
first month of the least year immediately preceding the adjustment date. In no
event shall any such new monthly rent be less than the rent payable for the
month immediately preceding the rent adjustment.
C. Additional Rent. All sums required to be paid by Tenant under
this Lease other than or in addition to the Base Rent provided for above shall
be considered additional rent under this Lease and shall be paid on or before
the day on which it is due.
D. Late Charge. Payment of rent shall be in lawful money of the United
States, without offset or deduction. Rent 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 said month. Payment of rent shall be made to
Landlord at its address stated herein or to such other persons or place as
Landlord may from time to time designate in writing. Acceptance of a payment
which is less than the amount then due shall not be a waiver of Landlord's
rights to the balance of such rent, regardless of the Landlord's endorsement of
any checks so stated. Acceptance of any late charge by Landlord shall in no
event constitute a waiver of Tenant's default with respect to such overdue
amount, nor prevent the exercise of any of the other rights and remedies granted
to Landlord under this Lease or under the laws of the State of California.
(i) A service charge equal to ten percent (10%) of the total
outstanding balance will be added to all amounts which Tenant is required to
pay under this Lease which have not been received in Landlord's accounting
office on or before the tenth (10th) day after the due date.
4. INTENTIONALLY OMITTED.
5. SECURITY DEPOSIT:
Concurrently with Tenant's execution of this Lease, Tenant shall deposit
with Landlord as a security deposit the sum of One Thousand Dollars ($1,000.00).
Said sum shall be held by Landlord as a security deposit for the faithful
performance by Tenant of all the terms, covenants, and conditions of this Lease.
If Tenant defaults with respect to any provisions of this Lease, including but
not limited to this provision relating to the payment of rent, Landlord may (but
shall not be required to) use, apply or retain all or any part of the security
deposit for the payment of any amount due and payable under this Lease, for the
payment of any other amount which Landlord may spend by reason of Tenant's
default or to compensate Landlord for any other loss or damage which Landlord
may suffer by reason of Tenant's default. If any portion of the security deposit
is so used or applied, Tenant shall, within ten (10) days after written demand
therefor, deposit cash with Landlord in an amount sufficient to restore the
security deposit to its original amount, and Tenant's failure to restore the
security deposit shall be a material breach of this Lease. Landlord shall not be
required to keep the security deposit separate from its general funds, and
Tenant shall not be entitled to interest on such deposit. Provided that Tenant
is not in default hereunder, upon the expiration of the Lease term and after
Tenant has vacated the Premises, Landlord shall return the security deposit,
less any sums Landlord is entitled to keep, to Tenant (or at Landlord's option,
to the last assignee of Tenant's interest hereunder). In the event of
termination of Landlord's interest in this Lease, Landlord shall transfer said
deposit to Landlord's successor in interest whereupon Tenant agrees to release
Landlord from liability for the return of such deposit or the accounting
3
therefor.
6. TAXES:
A. Personal Property Taxes. Tenant shall pay, prior to delinquency,
all taxes assessed against and levied upon fixtures, furnishings, equipment and
all other personal property of Tenant contained in the Premises, and when
possible, Tenant shall cause said fixtures, furnishings, equipment and other
personal property to be assessed and billed separately from the real property
of Landlord. In the event any or all of Tenant's fixtures, furnishings,
equipment and other personal property are assessed and taxed with Landlord's
real property, then Tenant shall pay to Landlord its share of such taxes, as
additional rent, in accordance with the provisions of Paragraph 3. For the
purpose of determining said amount, figures supplied by the County Assessor as
to the amount so assessed shall be conclusive. Tenant shall comply with the
provisions of any law, ordinance or rule of taxing authorities which requires
Tenant to file a report of Tenant's property located in the Premises.
B. Real Property Taxes. Tenant shall pay all (100%) of the real
property taxes (as hereinafter defined) levied or assessed against the office
space (3,507 sq. ft.) portion of the Premises and fifty percent (50%) of real
property taxes levied or assessed against the hallway and restroom area portion
of the Premises during the term of this Lease. Tenant's allocated portion of
such real property taxes shall be fifteen percent (15%) of the total real
estate taxes required to be paid with respect to the ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
commercial property (which has a total square footage of 25,769).
For the purpose of this Lease, "real property taxes" means and
includes without limitation all taxes, assessments (including, but not limited
to, assessments for public improvements or benefits), taxes based on vehicles
utilizing parking areas, taxes based or measured by the rent paid, payable or
received under this Lease, taxes on the value of the Premises, environmental
surcharges, and all other governmental impositions and charges of every kind and
nature whatsoever, whether or not customary or within the contemplation of the
parties hereto and regardless of whether the same shall be extraordinary or
ordinary, general or special, unforeseen or foreseen, or similar or dissimilar
to any of the foregoing which, at any time during the Lease term, shall be
applicable to, assessed, levied or imposed upon the Premises or become due and
payable and a lien or charge upon the Premises or any part thereof, under or by
virtue of any present or future laws, statutes, ordinances, regulations, or
other requirements of any governmental authority whatsoever. The term
"environmental surcharges" shall mean and include any and all expenses, taxes,
charges or penalties imposed by the Federal Department of Energy, the Federal
Environmental Protection Agency, the Federal Clean Air Act, or any regulations
promulgated thereunder or any other local, state of federal governmental agency
or entity now or hereafter vested with the power to impose taxes, assessments or
other types of surcharges as a means of controlling or abating environmental
pollution or the use of energy. The term "real property taxes" shall not include
any federal, state or local income, estate or inheritance tax imposed on Tenant.
7. USE OF PREMISES:
A. Use. The Premises shall be used and occupied by Tenant solely for
Tenant's physical therapy business and related uses, and for no other purpose
without the prior written consent of Landlord. Tenant covenants and agrees that
it will continuously and uninterruptedly, from and after taking possession of
the Premises, operate and conduct on the Premises only those uses which it is
permitted to operate under the provisions of this Lease.
B. Suitability. Tenant acknowledges that neither Landlord nor
4
Landlord's agents have made any representation or warranty with respect to the
Premises or the building or the real property or with respect to the
suitability of the same for Tenant's uses, including without limitation and
except as provided in Paragraph 24 below, any representation concerning the
number or identity of other tenants or prospective tenants in the building, nor
has Landlord agreed to undertake any modification, alteration or improvement to
the Premises except as provided in this Lease. The taking of possession of the
Premises by Tenant shall conclusively establish that the Premises and building
were at such time in good order, condition and repair and that Landlord's work
with respect to the Premises has been completed.
C. Prohibited Uses; Compliance with Laws.
(i) Tenant shall not do or permit anything to be done in or about
the Premises nor bring or keep anything which will in any way increase the
existing rate of or otherwise affect any fire or other insurance covering the
Premises or the building, or any of its contents, whether the insurance is
maintained by Landlord, Tenant or other tenants, or cause a cancellation of any
such insurance policy. Tenant shall not sell or permit to be kept, used or sold
in or about the Premises any articles which may be prohibited by a standard form
of fire insurance policy. In the event any costs of any such insurance are
increased as a result of Tenant's failure to comply with the provisions of this
Lease, Tenant shall pay to Landlord, as additional rent, said increased costs,
plus interest from the date of expenditure, at the highest rate then permitted
under California law, within ten (10) days after Landlord gives Tenant written
notice of said increase.
(ii) Tenant shall not (a) 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 tenants or occupants of this building; (b) use or allow the use of the
Premises for any unlawful or objectionable purpose; (c) cause, maintain or
permit any nuisance in, or about the Premises or the building; (d) commit or
suffer to be committed any waste in or upon the Premises; (e) place or operate,
or permit to be placed or operated, electronic games or amusement devices on the
Premises or (f) perform or carry on any practice which may cause damage or
deface the Premises or any part of the building.
(iii) Tenant shall not use the Premises or permit anything to be
done in or about the Premises which will in any way conflict with any law,
statute, ordinance or governmental rule or regulation or requirement of duly
constituted public authorities now in force or which may hereafter be enacted or
promulgated. Tenant shall, at its sole cost and expense, promptly comply with
all permit and licensing ordinances and regulations applicable to Tenant's use
of the Premises and with all other laws, statutes, ordinances and governmental
rules, regulations or requirements now in force or which may hereafter be in
force and with the requirements of any fire rating bureau or other similar body
relating to or affecting the condition, use or occupancy of the Premises. The
judgment of any court of competent jurisdiction or the admission of Tenant in
any action against Tenant, whether Landlord be a party thereto or not, that
Tenant has violated any law, statute, ordinance or governmental rule, regulation
or requirement, shall be conclusive of that fact as between Landlord and Tenant.
(iv) In the event that prior to the commencement of the Lease
Term Tenant is unable to obtain the appropriate licenses, permits, zoning
variances, or any other governmental approvals to utilize the property for its
intended uses under this Lease, Tenant, at its option, may immediately
terminate this Lease without penalty.
8. UTILITIES:
5
A. Monthly Charge. If utilities to the Premises are separately
metered, all charges therefor will be paid directly by Tenant, as additional
rent, on or before their due date. Tenant shall bear the cost of installation
of any meters necessary for the separate metering of the Premises. If not
separately metered, Tenant agrees to pay Landlord, as additional rent for all
gas, electricity, water, and normal trash removal supplied to the Premises by
Landlord, an amount to be agreed upon once it is determined that any of these
utilities cannot be separately metered. Tenant shall pay, prior to delinquency,
all charges (including all taxes thereon) for telephone and janitorial services
and any other utilities not specifically otherwise provided for herein,
materials, and services supplied to the Premises during the Lease Term and
shall hold Landlord harmless from any liability therefrom. Landlord shall not be
liable for any damages which may result from any failure or interruption of any
utility service being furnished to the Premises unless such failure is caused
by Landlord, and no such failure or interruption shall entitle Tenant to
terminate this Lease or to any abatement of rent unless such failure or
interruption extends for more than 4[initialed SB] (four) consecutive days in
which case the rent shall be abated during the period of the interruption.
B. Provision for Cost of Living Utility Increase. The monthly charge
for utilities that cannot be separately metered, if any, in an amount to be
agreed upon as provided for by Subparagraph A of this Paragraph 8 shall be
adjusted annually commencing the first month of the second year of the Lease
Term hereof, and annually thereafter each year Tenant occupies the Premises in
the same manner as the rent is to be adjusted based on the CPI under Paragraph
3.B. above. In no event will the adjusted charge be less than the charge prior
to the adjustment date.
If the Index shall no longer be published, then appropriate reference
figures shall be derived from any successor or comparable index mutually agreed
by the parties to be authoritative, and if the parties are unable to agree,
then the substituted Index shall be selected by the then presiding Judge of the
Superior Court for the County of Santa Barbara, California, upon the
application of either party. In any event, the base used by any new Index or as
revised on the existing Index base shall be reconciled to the 1982-84 Index.
9. COMMON AREA OPERATION:
A. Common Area Definition and Use. The term "common area" as used
herein shall mean all areas and facilities in the building and on the real
property, including, without limitation, driveways, sidewalks, landscaped
areas, and service areas. Landlord hereby grants to Tenant, its subtenants,
licensees, invitees, customers and employees, the nonexclusive right to use the
common area in common with Landlord, other tenants and their respective
subtenants, licensees, invitees, customers, and employees, subject to the
provisions of this Lease and to such rules and regulations pertaining to the
use of the common area as Landlord shall make from time to time. Landlord
expressly reserves the right to alter any part of the common area at its sole
discretion
B. Maintenance. Landlord shall operate, manage and maintain the
common area in a reasonably commercial condition. The manner in which the
common area shall be maintained and the expenditures thereof shall be at the
sole discretion of Landlord.
C. Parking Areas. Tenant shall have twenty-one (21) parking spaces
located on Landlord's real property as set forth in Exhibit "B" attached hereto
and made a part hereof. Such designated parking spaces shall be the sole
parking spaces on Landlord's real property to be used by Tenant, his employees,
patients, clients, invitees, and guests. Landlord reserves the right to
6
promulgate such reasonable rules and regulations relating to the use of the
parking areas as Landlord may deem appropriate for the best interest of the
tenants of the building. Landlord shall have the right to temporarily close all
or any portion of the parking area for purposes of normal maintenance and
repairs. The parking area shall not be used for any purpose other than the
parking of motor vehicles during business hours and the ingress and egress of
pedestrians and motor vehicles. No overnight parking use of vehicles shall be
made by Tenant.
10. MAINTENANCE AND REPAIRS:
A. Landlord's Obligations. Subject to the provisions of Paragraph 16,
Landlord, at its sole cost and expense, shall maintain, in a good state of
repair, the surface and structural parts of the roof, exterior walls (excluding
the interior of all walls and the exterior and interior of all windows, doors,
plate glass and show cases), all sewer, water, electric, gas lines and other
utility lines of any nature which lie under, within the walls, in the ceiling,
or on the roof of the Premises (excluding any such lines which have been
installed by Tenant), and foundations of the Premises and building; provided
however that in the event any maintenance and repairs are made necessary by the
wrongful act or omission of Tenant or his employees, agents, clients or
invitees, or in the event maintenance and/or repair costs are incurred or
increased principally as a result of any extraordinary or unusual use to which
Tenant puts the Premises, including Tenant's installation and maintenance of a
swimming pool, Tenant shall pay to Landlord within ten (10) days after written
demand, as additional rent, the actual cost of such maintenance and repairs
plus interest from the date of expenditure at the highest rate then permitted
under California law. Landlord shall have no obligation to make repairs under
this Paragraph until a reasonable time after Tenant has notified Landlord in
writing of the need for such repairs and/or maintenance.
B. Tenant's Obligations. Except as otherwise provided in this Lease,
Tenant, at Tenant's sole cost and expense, shall maintain the Premises and
appurtenances and every part thereof (excepting only those items which Landlord
is specifically obligated to maintain or repair pursuant to Paragraphs 9.A. and
10.A.) in good order, condition and repair including without limitation, all
interior walls, partitions and floors, floor coverings, interior surfaces of
the ceilings, doors, windows, plate glass, show cases, all electrical,
plumbing and lighting systems and equipment, including all heating,
refrigeration and evaporative cooling equipment, and any fixtures, signs and
equipment installed by or at the expense of Tenant, including specifically any
swimming pool installed by Tenant.
Tenant shall maintain and repair the heating, ventilation and air
conditioning systems and equipment that service the Premises, but shall
coordinate any such maintenance and repair with Landlord (with ultimate control
thereof being within Landlord's sole discretion).
Should Tenant fail to make repairs required by Tenant hereunder within
five (5) days after notice is given by Landlord (but within one (1) day with
respect to the swimming pool), Landlord, in addition to all other remedies
available hereunder or by law and without waiving any alternative remedies, may
make the repairs, and in that event, Tenant shall reimburse Landlord, as
additional rent, for the cost of such maintenance or repairs, plus interest at
the highest rate then permitted by California law, within ten (10) days after
written demand by Landlord.
11. ALTERATIONS:
A. Alterations by Tenant. Tenant shall not make, or suffer to be made,
7
any alterations, improvements or additions (collectively "alterations"), in, on,
about or to the Premises or any part thereof, without the prior written consent
of Landlord and without a valid building permit issued by the appropriate
governmental authority. As a condition to giving such consent, Landlord may
impose such requirements as Landlord in its sole discretion deems necessary,
including without limitation requirements that (i) Tenant agree to remove any
such alterations at the termination of this Lease, and to restore the Premises
to their prior condition; (ii) Tenant secure a completion and lien indemnity
bond satisfactory to Landlord for said work; (iii) Tenant secure and maintain in
place throughout the Lease Term a performance bond satisfactory to Landlord for
the removal of the swimming pool and the restoration of the Premises at the end
of the Lease Term or earlier termination of the Lease; and (iv) Landlord may
approve the contractor for such alterations and limit the times during which the
alteration work may be done. Unless Landlord requires that Tenant remove any
such alteration, the alteration, except movable furniture and trade fixtures not
affixed to the Premises, shall become the property of Landlord upon installation
and shall remain upon and be surrendered with the Premises at the termination of
this Lease.
The bond required by clause (iii) of this Paragraph A will provide
that (a) in no event shall the aggregate liability of the surety for any and all
claims exceed Twelve Thousand Dollars ($12,000.00); and (b) the bond may be
cancelled by the surety as to subsequent liability at any time by giving sixty
(60) days written notice to Landlord during which sixty (60) day period Landlord
may make a demand under the bond, and upon expiration of such sixty (60) day
period shall receive the proceeds of the bond, if Tenant fails to remove the
swimming pool and restore the Premises prior to the expiration of such sixty
(60) day period.
Tenant shall not permit any mechanic's or materialmen's liens to be
placed on the Premises and shall indemnify, defend and hold Landlord harmless
against any liens, claims, demands, encumbrances or judgments relating to any
labor or services performed or materials furnished for such alternations to the
Premises.
Tenant shall also give Landlord written notice five (5) days prior to
commencement of services or receipt of material for such alterations and shall
permit Landlord to post a notice of nonresponsibility in accordance with the
statutory requirement of California Civil Code Section 3095 or any amendment
thereof.
B. Tenant's Personal Property. Subject to the requirements of
Paragraph 21 hereof, Tenant may install in the Premises such trade fixtures,
signs and equipment as Tenant deems desirable. All articles of personal property
and all business and trade fixtures, machinery and equipment, furniture and
movable partitions owned or installed by Tenant in or on the Premises shall be
and remain the property of Tenant, and may be removed by Tenant at any time
during the Lease term provided Tenant is not in default hereunder, and provided
further that Tenant shall repair damage caused by such installation, use or
removal. If Tenant fails to remove all of its effects from the Premises upon
termination of this Lease, Landlord may, at its option, remove the same in any
manner that Landlord shall choose, and store said effects without liability to
Tenant for loss thereof. Tenant agrees to pay Landlord within ten (10) days
after written demand, as additional rent, any and all expenses incurred in such
removal, including court costs and attorney's fees and storage charges on such
effects for any length of time that the same shall be in Landlord's possession,
plus interest from the date of expenditure at the highest rate then permitted by
California law. Landlord may, at its option and without notice, sell any or all
of said effects, at private sale and without legal process, for such price as
Landlord may obtain and apply the proceeds of such sale to (i) any amount due
8
under this Lease from Tenant to Landlord and (ii) the expense incident to the
removal and sale of said effects.
12. LANDLORD'S ENTRY:
Tenant shall allow Landlord or Landlord's agents, representatives,
employees or contractors, to enter upon the Premises at reasonable times to
inspect the Premises, to perform required maintenance and repair, to make such
additions or alterations to the Premises as Landlord deems necessary or
desirable, and to show the Premises to prospective purchasers or tenants and
post "for sale" and "for lease" signs. Landlord may, in connection with any such
alterations, additions, or repairs, erect scaffolding, post relevant notices,
and place movable equipment without any obligation to reduce Tenant's rent for
the Premises during such period, provided that Tenant's entrance to the Premises
shall not be blocked thereby and that the authorized uses of the Premises by
Tenant shall not be interfered with unreasonably. Tenant hereby waives any claim
for damages for any injury or inconvenience to or interference with Tenant's
authorized uses of the Premises by, any loss of occupancy or quiet enjoyment of
the Premises, and any other loss occasioned thereby. For each of the aforesaid
purposes, Landlord shall have the right to use any and all means which Landlord
may deem proper to open said doors in any emergency in order to obtain entry to
the Premises, and any entry to the Premises by Landlord shall not under any
circumstances to construed or deemed to be a forcible or unlawful entry into, or
detainer of, the Premises, or an eviction of Tenant from the Premises or any
portion thereof.
13. LIENS:
Tenant shall keep the Premises and the building free from any liens
arising out of work performed, materials furnished, or obligations incurred by
Tenant and shall indemnify, hold harmless and defend Landlord from any claims,
liens, attachments, encumbrances and litigation arising out of any work
performed or materials furnished by or at the direction of Tenant relating to
the Premises. In the event that Tenant shall not, within twenty (20) days
following the imposition of any such lien, cause such lien to be released of
record by payment or posting of a proper bond, Landlord shall have, in addition
to all other remedies provided herein and by law, the right but not the
obligation 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 or filing of a
bond in favor of any lien claimant. All such claims paid by Landlord and all
expenses incurred by it in connection therewith, including attorney's fees and
costs, shall be payable to Landlord by Tenant as additional rent, with ten (10)
days after written demand, with interest from the date of expenditures at the
highest rate then permitted by California law. Landlord shall have the right at
all times to post and keep posted on the Premises any notices of
nonresponsibility or other notices permitted or required by law, or which
Landlord shall deem proper, for the protection of Landlord and the Premises from
mechanics' and materialmen's liens.
14. INDEMNITY:
Tenant shall indemnify, defend and hold Landlord harmless from and against
any and all claims (i) arising out of Tenant's use of the Premises or the
common area or the conduct of his business; (ii) arising out of any activity,
work, or thing done, permitted or suffered to be done by Tenant or any of
his patients, clients, invitees, agents, contractors or employees in or about
the Premises or the common area; (iii) arising from any breach or default in the
performance of any obligation on Tenant's part to be performed under the terms
of this Lease; (iv) arising from any act or negligence of Tenant, or any of his
patients, clients, invitees, agents, contractors, or employees; or (v) arising
out of Tenant's sharing the Premises with any other tenants, sublessee or
partners.
9
Tenant shall further indemnify and hold Landlord harmless from and against
any and all costs, attorneys' fees, expenses and liabilities incurred in
connection with such claim or any action or proceeding brought thereon. In case
any action or proceeding is brought against Landlord by reason of any such
claim, Tenant upon notice from Landlord shall defend the same at Tenant's
expense by counsel reasonably satisfactory to Landlord. Tenant shall not be
liable for damage or injury occasioned by the sole negligence or willful
misconduct of Landlord and its designated agents or employees, unless the same
are covered by insurance Tenant is required to provide.
15. INSURANCE:
A. Liability Insurance. Tenant shall, at Tenant's sole cost and
expense, but for the mutual benefit of Landlord and Tenant, maintain throughout
the Lease term comprehensive public liability insurance against claims for
personal injury, death or property damage occurring in or about the Premises,
including, without limitation, sidewalks directly adjacent to the Premises and
such other areas as Tenant, his patients, clients, agents, employees,
contractors, and invitees shall have the right to use pursuant to this Lease.
Such insurance shall have a combined single limit of not less than $1,000,000
for liability coverage and $50,000 for property damage coverage and shall name
Landlord (and such other persons or entities as Landlord may designate) as an
additional insured. Such insurance shall also insure performance of the
indemnity agreement contained in Paragraph 14. of this Lease. Such liability
insurance shall be primary and not contributing to any insurance available to
Landlord, and Landlord's insurance (if any) shall be in excess thereto. Tenant
shall deliver to Landlord prior to commencement of the Lease Term a copy of
Tenant's insurance policy and a Certificate of Insurance designating Landlord as
an additional insured.
B. Fire and Extended Coverage: Landlord shall maintain during the
Lease term, fire, extended coverage, special extended insurance, including
vandalism and malicious mischief coverage, earthquake and "difference in
conditions" insurance, in an amount equal to the full replacement cost of the
building, exclusive of Tenant's fixtures, furnishings, equipment and other
personal property. Tenant shall have no interest in or any right to the
proceeds of any insurance procured by Landlord on the building, the Premises or
the real property.
C. Form of the Policies. The policies required by Paragraph 15.A.
shall be in a form reasonably satisfactory to Landlord, with an A.M. Best "A"
rated or better insurer and a certificate as to such insurance shall be
delivered to Landlord. Tenant shall have the right to provide the insurance
coverage that it is obligated to provide in a blanket policy; provided such
blanket policy expressly affords coverage to the Premises and to Tenant and
Landlord as required by this Lease. Tenant shall obtain a written obligation on
the part of any insurance company providing such insurance to notify Landlord
in writing of any delinquency in premium payments and, at least ten (10) days
prior thereto, of any cancellation of any such policy. Tenant agrees that if
Tenant does not take out such insurance or keep the same in full force and
effect, Landlord may take out the necessary insurance and pay the premiums
therefor, and Tenant shall repay to Landlord, as additional rent and within
ten (10) days after written demand, the amount so paid plus interest from the
date of expenditure at the highest rate then permitted by California law.
D. Waiver of Subrogation. Landlord and Tenant each hereby waive any
and all rights of recovery against the other or against the officers,
employees, agents and representatives of the other, on account of loss or damage
occasioned to such waiving party or its property or the property of others
under its control to the extent that such loss or damage is insured against
under any fire
10
and extended coverage insurance policy which either may have in force at the
time of such loss or damage.
E. Plate Glass Insurance. Tenant, at his sole cost, shall be
responsible for the maintenance, repair, and replacement of all plate glass in
or enclosing the Premises and shall procure insurance on such plate glass.
16. EMINENT DOMAIN:
In the event the leased Premises or any part thereof be appropriated or
taken under the power of eminent domain, this Lease shall terminate as to the
part taken as of the date of taking actual possession thereof. Any award shall
be paid and belong to Landlord except any award for the taking of or damage to
the fixtures and equipment of Tenant. Landlord shall be entitled to the entire
award for the real property, including Tenant's leasehold interest therein.
Tenant shall be entitled to any award to which it is otherwise entitled which
shall not reduce the award to Landlord.
In the event the portion of the leased Premises remaining after such
taking is not reasonably adequate for the operation of the business of Tenant,
Tenant may, at his option, terminate this Lease as of the date of the taking of
actual possession by the condemning authority by giving written notice thereof
to Landlord with ten (10) days after such taking of possession. In the event
Tenant may not or does not terminate this Lease as hereinbefore provided, then
the minimum rent payable under the terms of this Lease shall be reduced from and
after the date of taking of possession in the proportion that the floor area
taken bears to the floor area of the leased Premises immediately prior to such
taking.
17. ASSIGNMENT AND SUBLETTING:
Landlord's Consent Required. Tenant shall not assign all or any part
of its interest in this Lease, sublet all or any part of the Premises, transfer
any interest of Tenant therein or permit any use of the Premises by another
party (any and all such acts being collectively referred to herein as a
"transfer") without the prior written consent of Landlord, and any attempt to do
so without such consent being first had and obtained shall be wholly void and
shall constitute a breach of this Lease. Landlord shall not unreasonably
withhold its consent to a transfer provided that the provisions of this
Paragraph 17 are met.
18. DEFAULT, REMEDIES:
A. Tenant's Default. The occurrence of any one or more of the
following events shall constitute a material default and breach of this Lease
by Tenant:
(1) The abandonment or vacation of the Premises by Tenant;
(2) The failure by Tenant to make any payment of Rent or
additional rent, or of any other sum required to be paid by Tenant hereunder,
as and when due;
(3) The failure by Tenant to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed or performed
by Tenant other than the payment of money, if such failure is not cured within
ten(10) days after written notice thereof from Landlord to Tenant; provided,
however, that if the nature of Tenant's default is such that more than ten (10)
days are reasonably required for its cure, then Tenant shall not be deemed to
be in default if Tenant commences such cure within the ten (10) day period and
11
thereafter diligently prosecutes such cure to completion;
(4) The failure of Tenant to remove the swimming pool on or
before the end of the Lease Term or earlier termination of the Lease or during
the sixty (60) day period following Landlord's receipt of the notice from the
issuer of the performance bond required under Paragraph 11.A(iii) hereof that
such bond will be cancelled, without further notice from Landlord; and
(5) The making by Tenant of any general assignment for the
benefit of creditors, the filing by or against Tenant of a petition to have
Tenant adjudged a bankrupt or of a petition for reorganization or arrangement
under any law relating to bankruptcy (unless, in the case of a petition filed
against Tenant, the same is dismissed within sixty (60) days; the appointment
of a trustee or receiver to take possession of substantially all of
Tenant's assets located at the Premises or of Tenant's interest in this Lease,
where possession is not restored to Tenant within thirty (30) days; or the
attachment, execution or other judicial seizure of substantially all of
Tenant's assets located at the Premises or of Tenant's interest in this Lease,
where such seizure is not discharged within thirty (30) days.
B. Remedies. In the event of any material default or breach of this
Lease by Tenant, Landlord's obligations under this Lease shall be suspended and
Landlord may at any time thereafter, without limiting Landlord in the exercise
of any other right or remedy at law or equity which Landlord may have (all
remedies provided herein being non-exclusive and cumulative), do any one or
more of the following:
(1) Maintain this Lease in full force and effect and recover the
rent, additional rent and/or other monetary charges as they become due, without
terminating Tenant's right to possession irrespective of whether Tenant shall
have abandoned the Premises. If Landlord elects not to terminate the Lease,
Landlord shall have the right to attempt to relet the Premises at such rent and
upon such conditions, and for such a term, as Landlord deems appropriate in its
sole discretion and to do all acts necessary with regard thereto, without being
deemed to have elected to terminate the Lease, re-entering the Premises to make
repairs or to maintain or modify the Premises, and removing all persons and
property from the Premises; such property may be removed and stored in a public
warehouse or elsewhere at the cost of and for the account of Tenant. Reletting
may be for a period shorter or longer than the remaining term of this Lease,
and for more or less rent, but Landlord shall have no obligation to relet at
less than prevailing market rental rates. If reletting occurs, this Lease shall
terminate automatically when the new tenant takes possession of the Premises and
commences rent payment. Notwithstanding that Landlord fails to elect to
terminate the Lease initially, Landlord at any time thereafter may elect to
terminate the Lease by virtue of any previous uncured default by Tenant. In the
event of any such termination, Landlord shall be entitled to recover from Tenant
all damage incurred by Landlord by reason of Tenant's default, as well as all
costs of reletting including commissions, attorneys' fees, restoration or
remodeling costs, and all other consequential damages.
(2) Terminate Tenant's right to possession by any lawful means,
in which case this Lease shall terminate and Tenant shall immediately surrender
possession of the Premises to Landlord. In such event Landlord shall be entitled
to recover from Tenant all damages incurred by Landlord by reason of Tenant's
default including, without limitation, the following: (a) the worth, at the time
of award, of any unpaid rent which had been earned at the time of such
termination; (b) 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 Tenant proves could have been
reasonably avoided; plus (c) the worth, at the time of award, of the amount by
12
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus (d) any other amount, and court costs, necessary to
compensate Landlord for all the detriment proximately caused by Tenant's default
or which in the ordinary course of things would be likely to result therefrom
(including, without limiting the generality of the foregoing, the amount of any
commissions and/or finder's fee for a replacement tenant). The term "rent" as
used in this Paragraph shall be deemed to be and to mean all rent, additional
rent and other monetary sums required to be paid by Tenant pursuant to this
Lease.
(3) Proceed to cure the default at Tenant's sole cost and
expense, without waiving or releasing Tenant from any obligation of Tenant. If
at any time Landlord pays any sum or incurs any expense as a result of or in
connection with curing any default of Tenant, all sums so paid by Landlord and
all costs incurred by Landlord in performing such act (including any
administrative fees provided for herein and attorneys' fees), together with
interest thereon at the legal rate from the date of such payment by Landlord,
shall be paid by Tenant to Landlord immediately upon demand.
C. Landlord's Default. Landlord shall not be deemed to be in default
in the performance of any obligation under this Lease unless and until it has
failed to perform such obligation within thirty (30) days after receipt of
written notice by Tenant to Landlord specifying such failure; provided, however,
that if the nature of Landlord's default is such that more than thirty (30)
days are required for its cure, then Landlord shall not be deemed to be in
default if it commences such cure within the thirty (30) day period and
thereafter diligently prosecutes such cure to completion. Tenant agrees to give
any Mortgagee a copy, by registered mail, of any notice of default served upon
Landlord, provided that prior to such notice Tenant has been notified in writing
(by way of Notice of Assignment of Rents and Leases, or otherwise), of the
address of such Mortgagee.
Tenant further agrees that if Landlord shall have failed to cure such default
within the time provided for in this Lease, then any such Mortgagee shall
have an additional forty-five (45) days within which to cure such default on the
part of the Landlord or if such default cannot be cured within that time, then
such additional time as may be necessary if within that forty-five (45) days the
Mortgagee has commenced and is pursuing the remedies necessary to cure such
default (including but not limited to commencement of foreclosure proceedings,
if necessary to effect such cure).
19. ATTORNEY'S FEES; COSTS OF SUIT:
If either Tenant or Landlord brings any action for any relief against the
other, declaratory or otherwise, arising out of this Lease, including any suit
by Landlord for the recovery of rent or possession of the Premises, the losing
party shall pay to the successful party a reasonable sum for attorney's fees
which shall be deemed to have accrued on the commencement of such action and
shall be paid whether or not such action is prosecuted to judgment.
20. SURRENDER OF PREMISES:
On expiration of the Lease Term, or on sooner termination of the Lease,
Tenant shall surrender the Premises to Landlord in the same condition as
received, ordinary wear and tear excepted, and shall remove from the Premises
all of tenant's personal property and trade fixtures and such alterations,
additions and improvements as Landlord has indicated to Tenant must be removed
or restored, as the case may be. If the Premises are not so surrendered, Tenant
shall indemnify, defend and hold Landlord harmless from and against loss or
13
liability resulting from Tenant's delay, including without limitation any
claims made by any succeeding Tenant or losses to Landlord for lost rental
opportunities. Termination of this Lease shall not release Tenant from the
payment of any obligation or sum that accrued prior to said termination. The
voluntary or other surrender of this Lease by Tenant, or a mutual cancellation
thereof, shall not work a merger, and shall, at the option of the Landlord,
terminate all or any existing subleases or subtenancies, or may, at the option
of Landlord, operate as an assignment to it of any or all such subleases or
subtenancies.
21. SIGNS; USE OF BUILDING NAME:
Tenant shall not inscribe, paint, affix, place or permit to be placed any
new projecting sign, marquee, awning, advertisement, sign, notice of placard on
the exterior or roof of the Premises or upon or about the entrance doors,
windows, sidewalks or areas adjacent to the Premises without Landlord's prior
written consent, except that Tenant shall be allowed to place on the exterior of
the Premises a new sign which has been approved by the City of Solvang or
allowed by the sign ordinance of the City of Solvang, provided, however, the
location of such sign shall be mutually agreed upon between Landlord and Tenant.
Landlord reserves the right, in Landlord's sole discretion, to place and locate
on the roof, exterior sidewalls and rear wall of the Premises or any portion of
the building which is not leased to Tenant, such notices, signs, marquees and
advertisements as Landlord may deem appropriate in the operation of Landlord's
affairs. Landlord shall fully cooperate with Tenant and/or any appropriate
governmental authorities in securing necessary and reasonable signage for
Tenant's use of the Premises and Landlord shall not arbitrarily, unreasonably or
untimely withhold consent to signage consistent with Tenant's needs and
Landlord's development of the land.
22. RIGHTS RESERVED BY LANDLORD:
In addition and without limiting all other rights granted hereunder,
Landlord specifically reserves the right from time to time except as otherwise
expressly set forth in this Lease, (i) to make changes to, eliminate or add to
the building, the common area and other improvements located in or about the
Premises, and (ii) to effect any other tenancies in the building and grant
anyone the exclusive right to conduct any particular business or enterprise,
other than Tenant's business as of the commencement date, in the building or on
the real property, except that no removal of Tenant's designated parking
spaces, if any, shall be allowed. Landlord reserves the right however to
relocate Tenant's designated parking spaces in its discretion.
23. RIGHT OF FIRST REFUSAL:
Tenant shall have the right of first refusal to lease the remaining office
space in the vicinity of the Premises (approximately 1,100 sq. ft. of
additional space). The space subject to the first right of refusal is shown on
Exhibit A hereto as the cross-hatched area. In the event that Landlord
determines, in its sole discretion, to offer the adjacent office space for
rent or lease, Landlord will so advise Tenant in writing. Tenant will thereafter
have twenty (20) days in which to notify Landlord of its election to exercise
its right of first refusal, in which event the adjacent space will be included
in the Premises for all purposes under this Lease at the market rate then
prevailing as determined by Landlord in good faith.
24. RESTRICTIVE COVENANT:
Landlord covenants that it will not rent office space in the building of
which the Premises is a part to a person, entity or group for use for physical
14
therapy or occupational therapy. Landlord retains the right to lease such space
to any other type of medical or commercial business in its sole discretion.
25. DAMAGE OR DESTRUCTION:
If the Premises are damaged or destroyed by a risk covered under any fire
and extended coverage insurance policy issued in favor of Landlord, this Lease
shall continue in full force and effect, except that Tenant shall be entitled to
an equitable reduction of rent, commencing with the date of damage and
continuing through completion of repairs by Landlord, such reduction to be based
upon the extent to which the damage and/or restoration efforts materially
interfere with the Tenant's business in the Premises.
If the Premises or the Building are damaged by a risk not covered by such
insurance, then Landlord shall have the option either to repair or restore such
damage, this Lease continuing in full force and effect, but the rent to be
equitably reduced as hereinabove provided, or to give notice to Tenant at any
time within ninety (90) days after such damage terminating this Lease as of a
date to be specified in such notice, which date shall not be less then sixty
(60) days after giving such notice. If such notice is given, this Lease shall
expire and any interest of Tenant in the Premises shall terminate on the date
specified in such notice and the rent, reduced by an equitable reduction based
upon the extent, if any, to which such damage materially interfered with
Tenant's business in the Premises, shall be paid to the date of such
termination, provided that if such uninsured damage is due to the act or
omission of Tenant or Tenant's agents, employees, contractors, licensees or
invitees, Tenant shall not be entitled to any reduction in rent.
If in Landlord's judgment, Landlord determines not to repair or restore
the Premises, notwithstanding the availability of insurance proceeds for that
purpose, Landlord shall so notify Tenant and this Lease shall be terminated
effective as of the date of the damage.
26. GENERAL PROVISIONS:
A. Captions; Exhibits, Defined Terms.
(i) The captions of the sections and paragraphs of this Lease are
for convenience only and shall not be deemed to be relevant in resolving any
questions of interpretation or construction of any section of this Lease.
(ii) Exhibits attached hereto, and addendums and schedules
initialed by the parties, are deemed by attachment to constitute part of this
Lease and are incorporated herein.
(iii) The words "Landlord" and "Tenant" as used herein shall
include the plural as well as the singular. Words used in neuter gender include
the masculine and feminine and words in the masculine and feminine gender
include the neuter. The term "Landlord" shall mean only the owner or owners at
the time in question of the fee title or of the tenant's interest in a ground
lease covering the Premises.
B. Entire Agreement. This instrument, along with any exhibits and
attachments hereto, constitutes the entire agreement between Landlord and
Tenant relative to the Premises and their agreement to lease the Premises, and
this Lease, the exhibits and attachments may be altered, amended or revoked only
by
15
an instrument in writing signed by both Landlord and Tenant. Landlord and
Tenant agree hereby that all prior or contemporaneous oral agreements between
and among themselves and their agents or representatives relative to the leasing
of the Premises are merged in or revoked by this Lease.
C. Severability. If any term or provision of this Lease is, to any
extent, determined by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of this Lease shall not be affected thereby, and
each term and provision of this Lease shall be valid and be enforceable to the
fullest extent permitted by law; provided, however, that if Tenant's obligation
to pay the rent (or other sums required to be paid by Tenant hereunder) is
determined to be invalid or unenforceable, then this Lease at the option of
Landlord shall terminate.
D. Time; Joint and Several Liability. Time is of the essence of this
Lease and each and every provision hereof, except as to the conditions relating
to the delivery of possession of the Premises to Tenant. All the terms,
covenants and conditions contained in this Lease to be performed by either
party shall be deemed to be material, and all rights and remedies of the parties
shall be cumulative and nonexclusive of any other remedy at law or in equity.
E. Binding Effect; Choice of Law. The parties hereto agree that all
provisions hereof are to be construed as both covenants and conditions as
though the words importing such covenants and conditions were used in each
separate paragraph hereof. Subject to any provisions hereof restricting
assignment or subletting by Tenant and subject to Paragraph 16, all of the
provisions hereof shall bind and inure to the benefit of the parties hereto and
their respective heirs, legal representatives, successors and assigns; provided,
however, that the obligations contained in this Lease to be performed by
Landlord shall be binding on Landlord's successors and assigns only during their
respective periods of ownership. This Lease shall be governed by the laws of the
State of California.
F. Waiver. No covenant, term or condition or the breach thereof shall
be deemed waived, except by written consent of the party against whom the
waiver is claimed, and any waiver of the breach of any covenant, term or
condition shall not be deemed to be a waiver of any preceding or succeeding
breach of the same or any other covenant, term or condition. Acceptance by
Landlord of any performance by Tenant after the time the same shall have become
due shall not constitute a waiver by Landlord of the breach or default or any
covenant, term or condition unless otherwise expressly agreed to in writing by
Landlord.
G. Interest on Past Due Obligations. Except as expressly herein
provided, any amount due to Landlord not paid when due shall bear interest from
the date due at the highest rate then permitted under California law. Payment
on such interest shall not excuse or cure any default by Tenant under this
Lease.
H. Notices. All notices or demands of any kind required or desired
to be given by Landlord or Tenant hereunder shall be in writing and shall be
deemed delivered upon personal delivery or forty-eight (48) hours after
depositing the notice or demand in the United States mail, certified, or
registered postage prepaid, addressed to Landlord or Tenant at the respective
addresses set forth as follows:
To LANDLORD:
ALPINE INSURANCE COMPANY
an Illinois corporation
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
16
To TENANT:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
I. Corporate Authority - Warranty. If Tenant is a corporation, each
individual executing this Lease on behalf of said corporation represents or
warrants that he is duly authorized to execute and deliver this Lease on behalf
of said corporation in accordance with a duly adopted resolution of the board
of directors of said corporation or in accordance with the bylaws of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms. If Tenant is a corporation, Tenant shall, within thirty (30)
days after execution of this Lease, deliver to Landlord a certified copy of a
resolution of the board of directors of said corporation authorizing or
ratifying the execution of this Lease. Tenant shall execute any warranty of
lease that is requested/required by Landlord.
J. Contaminants. Tenant warrants that it shall not make any use of the
Premises which may cause contamination of the soil, sub-soil or ground water.
Tenant shall not keep, or cause to be kept in, on or around the Premises any
substance controlled by any government or quasi-governmental regulatory agency
unless Tenant stores and handles said substance in strict compliance with any
and all applicable laws, rules and regulations. Tenant will remove said
substances in the legally prescribed manner when Tenant's occupancy is
terminated. Tenant shall not do, bring or keep anything in, on or around the
Premises which will cause a cancellation of any insurance covering the
Premises.
K. Execution and Delivery of Lease. Tenant's signature on this
Lease constitutes an offer which shall not be deemed accepted by Landlord until
Landlord has executed this Lease and delivered an executed copy to Tenant.
L. General Interpretation. The terms of this Lease have been
negotiated by the parties hereto and the language used in this Lease shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent. This Lease shall be construed without regard to any presumption or rule
requiring construction against the party causing such instrument of any portion
thereof to be drafted, or in favor of the party receiving a particular benefit
under the Lease. No rule of strict construction will be applied against any
person.
M. Quiet Enjoyment. Landlord covenants and agrees with Tenant that
upon Tenant's payment of rent and other monetary sums due under this Lease and
performance of its covenants and conditions under this Lease, Tenant shall and
may peacefully and quietly have, hold and enjoy the Premises for the Lease
Term, subject however to the terms of this Lease.
17
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease with the
respective dates shown below:
LANDLORD: TENANT:
ALPINE INSURANCE COMPANY,
an Illinois corporation /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------------
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-----------------------
Title: AVP Admin Services Dated: 4/3, 1998.
-----------------------
Dated: 4/3, 1998.
18
EXHIBIT "A"
Diagram for ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
labeled "GROUND FLOOR PLAN" showing Tenant's Premises of Landlord's building
outlined.
19
EXHIBIT "B"
Unlabeled diagram of parking structure at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ indicating designated parking spaces to be used by
Tenant, his employees, patients, clients, invitees and guests.