EXHIBIT 10.9
LEASE
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Between
RONALD G. ROTH
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as Lessor
and
SCHEIN PHARMACEUTICAL, INC.
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as Lessee
SCHEIN PHARMACEUTICAL INC.
TABLE OF CONTENTS
Paragraph No. Heading Page No.
1 PARTIES 1
2 PREMISES 1
3 RENT 1,2
4 TERM AND OPTION 2,3,4,5
5 SECURITY DEPOSIT 5
6 USE OF PREMISES 5,6
7 MAINTENANCE, REPAIRS AND ALTERATIONS 7,8,9
8 INSURANCE AND INDEMNITY 9,10,11
9 DAMAGE OR DESTRUCTION 12,13,14
10 REAL PROPERTY TAXES 15,16
11 UTILITIES 16
12 ASSIGNMENT AND SUBLETTING 16,17
13 DEFAULTS; REMEDIES 18,19,20
14 CONDEMNATION 20,21
15 BROKER'S FEE 21
16 ESTOPPEL CERTIFICATE 21
17 LESSOR'S LIABILITY 21,22
18 SEVERABILITY 22
19 INTEREST ON PAST DUE OBLIGATIONS 22
20 TIME IS OF THE ESSENCE 22
21 ADDITIONAL RENT 22
22 INCORPORATION OF PRIOR AGREEMENTS;
AMENDMENTS 22
23 NOTICES 22,23
Paragraph No. Heading Page No.
24 WAIVERS 23
25 RECORDING 23
26 HOLDING OVER 23
27 CUMULATIVE REMEDIES 23
28 COVENANTS AND CONDITIONS 23
29 BINDING EFFECT; CHOICE OF LAW 23
30 SUBORDINATION 23,24
31 ATTORNEY'S FEES 24
32 LESSOR'S ACCESS 24
33 AUCTIONS 24
34 SIGNS 24
35 CONSENTS 25
36 GUARANTOR 25
37 QUIET POSSESSION 25
38 OPTIONS 25,26
39 MULTIPLE TENANT BUILDING 26
40 SECURITY MEASURES 26
41 EASEMENTS 26
42 PERFORMANCE UNDER PROTEST 27
43 AUTHORITY 27
44 INSURING PARTY 27
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LEASE
1. PARTIES. This LEASE, dated, for reference purposes only, this 16th day
of February, 1990, is made by and between RONALD G. ROTH, an unmarried man whose
address is 4515 S. McClintock Dr., Suite 220, Tempe, Arizona 85282 (hereafter
called "LESSOR") and SCHEIN PHARMACEUTICAL, INC., a Delaware Corporation whose
present address is 26 Harbor Park Drive, Port Washington, New York 11050
(hereafter called "LESSEE").
2. PREMISES. Lessor hereby leases to Lessee, and Lessee leases from
Lessor, for the term, at the rental and upon all the conditions set forth
herein, that certain real property situated in the County of Maricopa, State of
Arizona, commonly known as ABCO/43RD AVE. DISTRIBUTION BLDG, PH II, Phoenix,
Arizona, and described as an approximate 171,187 square feet of to be
constructed multi-tenant industrial space, together with certain improvements to
be constructed therein at Lessor's sole cost and expense, (see Exhibits
"A" through "E" attached hereto). Office improvements are to be constructed by
Lessor at its sole cost and expense, as shown on Exhibit "B" attached hereto.
The building tenant improvements and the parking lot improvements are
hereinafter collectively referred to as "Tenant Improvements." Lessor hereby
agrees to use its best efforts to complete the premises for Tenant fixturization
by July 15, 1990.
The building is located at 1825 S. 43rd Avenue, Phoenix, Arizona (see
Exhibit "C" for legal description), hereinafter referred to as the "Real
Property".
The building shall be in conformity with plans and specifications that have
been, or will be, approved jointly by Lessor and by Lessee.
Lessee shall have designated and/or defined exclusive use of specific
parking facilities on the Real Property, as reflected on Exhibit "D".
The square footage of the building space being leased under the terms
hereof, is approximately 81,514 square feet.
Any improvements to the Premises, in addition to the Tenant Improvements
described above, which may be desired by Lessee from time to time during the
Term of this Lease, as may be extended, shall be constructed or installed by
Lessor if requested by Lessee, and provided that Lessor agrees to do so. In the
event Lessor agrees to construct or install such improvements, all costs of such
construction and/or installation shall be paid by Lessee to Lessor at such
times, and in such amounts as may be reasonably agreed to by Lessor and Lessee.
Such real property, including land and improvements, and the parking
facilities, as above described, are hereafter called "the Premises".
3. RENT
3.1 Lessee shall pay to Lessor as Rent for the Premises during the
Initial Term of 120 months, the following amounts:
(a) For the 1st through the 36th months of the Initial Term of
the Lease, the Rent shall be $22,354.21 per month, plus taxes, if any, imposed
upon such rent by any taxing authority, excluding Federal and State Income Tax.
(b) For the 37th through the 60th months of the Initial Term
of the Lease, the Rent shall be $24,356.91 per month, plus taxes, if any,
imposed upon such rent by any taxing authority, excluding Federal and State
Income Tax.
(c) During the 61st through the 96th months of the Initial Term
of the Lease, the rent shall be $25,812.52 per month, plus taxes, if any,
imposed upon such rent by any taxing authority, excluding Federal and State
Income Tax.
(d) For the 97th through the 120th months of the Initial Term of
the Lease, the rent shall be the sum of $28,086.12 per month, plus taxes, if
any, imposed upon such rent by any taxing authority, excluding Federal and State
Income Tax.
All rent due shall be paid on or before the first day of the month for
which such rent is due during the term of this Lease, and during any extended
term of this Lease if the Option to Extend (Par. 4.5) is exercised.
3.2 The Monthly Rental, during the First Extended Option Term,
(defined as Years 11 through 15) shall be as follows:
(a) During the 60 months of the First Extended Option Term, the
monthly rent shall be $29,566.25 per month, plus taxes, if any, imposed upon
such rent by any taxing authority, excluding Federal and State Income Tax.
3.3 The Monthly Rental during the Second Extended Option Term,
(defined as Years 16 through 20) shall be as follows:
(a) During the 60 months of the Second Extended Term of the
Lease, the monthly rental shall be the sum of $31,079.26 per month, plus taxes,
if any, imposed upon such rent by any taxing authority, excluding Federal and
State Income Tax.
3.4 The Monthly Rental during the Third Extended Option Term,
(defined as Years 21 through 25) shall be as follows:
(a) During the 60 months of the Third Extended Term of the
Lease, the monthly rental shall be the sum of $33,941.15 per month, plus taxes,
if any imposed upon such rent by any taxing authority, excluding Federal and
State Income Tax.
4. TERM AND OPTION.
4.1 The TERM of the INITIAL LEASE PERIOD shall be for One Hundred
Twenty (120) months, commencing on the thirtieth day after the Lessee has use of
the Premises, the "Lease Commencement Date".
4.2 If the Lease Commencement Date occurs on other than on the first
day of the month, the Lessee will pay a pro rata rental for the portion of the
month that the Premises are occupied by Lessee, based upon a full month's
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rental for a month containing 30 days.
4.3 It is anticipated that Lease Commencement date shall be
approximately August 15, 1990. The Occupancy Date (approximately July 15, 1990)
shall be established when a Certificate of Occupancy (temporary or final) is
issued; or upon initial occupancy of premises by Tenant for Tenant
fixturization, whichever occurs first. The representatives of Lessor and Lessee
shall mutually agree to a date that occupancy will commence (or had commenced)
and a letter executed by representatives of both Lessor and Lessee shall be
appended to the Lease.
4.4 In the event Lessor has not completed the premises for Tenant
fixturization by August 30, 1990, then Lessee shall have the right to (i)
complete the Tenant Improvements pursuant to the plans and specifications
therefor, in which event all costs incurred by Lessee in connection with such
work shall be paid to Lessee by Lessor immediately upon demand therefor, (ii)
terminate this Lease, which termination shall be effective thirty (30) days
after notice of termination is delivered to Lessor by Lessee. Notwithstanding
the foregoing, if the Lessor has diligently expended efforts to deliver
possession of the premises, but was precluded by delays outside of his control,
the above dates shall be reasonably extended.
4.5 Lessor does hereby grant to Lessee the Option to Extend the Term
of this Lease for three (3) additional 60 month periods, commencing upon the
expiration of the Initial 120 month Term, upon the following terms and
conditions:
(a) Lessee shall give Lessor written notice at least 240 days
prior to the expiration of the Initial Term, or any extended Term of this Lease,
as applicable. Failure to give such written notice shall extinguish and make
null and void the Option to Extend.
(b) The Option(s) are expressly conditioned upon Lessee's not
being in default at the time notice of election to exercise the option(s) is
given. Such default refers to any requirement under this entire Lease, which
remains uncured by Lessee at the time notice is given, and for which the time in
which to cure such default has expired on the date notice is given.
(c) During the First, Second, and Third Extended Option Term(s),
all the terms and conditions of this Lease shall control the occupancy of the
Premises by Lessee.
(d) Notwithstanding the above, it is understood by Lessor and
Lessee that the 121st through 300th month period is an Option Period and said
rents shall be required only if Option is exercised by Lessee, as required and
set forth herein.
4.6 During the Initial Term of this Lease, and during any Extended
Term, Lessor shall not enter into any Lease affecting any additional space
within the PHASE II (contemplated as PH.IIA & IIB) building which is contiguous
to the Premises, which may from time to time be vacant, without first offering
Lessee an opportunity to lease such space on the terms and conditions Lessor is
willing to lease such space to a third party, except that the Monthly Rental
shall be as set forth below; and the Tenant improvements to be
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installed by Lessor shall include only: demising walls, lighting, evaporative
cooling and ventilating facilities (the "Standard Warehouse Improvements").
Lessor shall offer such opportunity to lease to Lessee by notifying Lessee in
writing of the proposed terms and conditions thereof, or at Lessor's option, by
submitting to Lessee a copy of such offer to lease. If, within ten (10) business
days of the date of receipt of such notice, Lessor has received written notice
from Lessee of its election to lease such space on the same terms and conditions
of such proposed lease, except for Monthly Rental and the Standard Warehouse
Improvements, then Lessor shall not enter into a lease with the Third Party and
Lessor and Lessee shall promptly enter into a separate lease, or addendum
hereto, on the same terms and conditions as set forth in proposed Lease. The
term of such lease or addendum shall correspond with the Term of the Third Party
Proposal, and the Monthly Rental shall be as set forth below. If Lessor has not
received Lessee's written election to lease such space within the 10 business
day period, Lessor shall be free to execute a proposed lease with the Third
Party.
Lease Months 0l - 36 (Initial Term) - $.192/SF/MO - NNN
Lease Months 37 - 60 (Initial Term) - $.210/SF/MO - NNN
Lease Months 61 - 96 (Initial Term) - $.222/SF/MO - NNN
Lease Months 97 - 120 (Initial Term) - $.242/SF/MO - NNN
Lease Months 0l - 60 (First Extended Term) - $.255/SF/MO - NNN
Lease Months 0l - 60 (Second Extended Term) - $.287/SF/MO - NNN
Lease Months 0l - 60 (Third Extended Term) - $.323/SF/MO - NNN
Note: Lease Month 0l (Initial term), corresponds to Initial Lease
Commencement Date.
4.7 Notwithstanding Lessee's right of first refusal as set forth in
Section 4.6 above, Lessee shall have the right at any time during the Initial
Term of this Lease, or any Extended Term, to lease from Lessor any available
contiguous space in the Phase II building, at the rental rate set forth in Par.
4.6; provided, however, that unless otherwise agreed by Lessor and Lessee, (i)
the improvements to be installed by Lessor in such additional space shall
include only the Standard Warehouse Improvements, and (ii) if Lessee notifies
Lessor in the last twenty-four months of the Initial Term, or any Extended Term,
as applicable, that it desires to lease any such additional space, Lessee must
also elect to extend the term of this Lease for at least one Extended Term, as
provided in Section 4.5. For all such additional space, the Monthly Rental shall
be as set forth in Par. 4.6, unless the type and development of the space
differs from same, the proposal, or supplemental proposals, will provide the
basis to establish the Rent.
4.8 In the event that a Lessee's requirements for additional/expansion
space cannot be provided by the Lessor in the subject facility, or the adjacent
facility, within a time frame of nine (9) months, the Lessor shall be obligated
to accomodate Lessee in any other available existing facility, or facilities,
owned by the Lessor. The Lessor may elect to develop and build a new facility to
accomodate the additional growth expansion, or a facility for a total
consolidated facility, at Lessor's option. If the Lessee and Lessor enter into a
Lease for a consolidated facility, this Lease shall terminate upon the
Commencement of the Lease in the new facility.
Notwithstanding the foregoing, the Lessor shall not be obliged to
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provide a consolidated expansion facility, if the Lessee has within a fifteen
(15) month period prior to the request, rejected additional space (of near
equivalent area to the requirement contemplated herein), as set forth in Par.
4.6.
The Rate for any expansion area space shall be as set forth in Par.
4.6. The Rate for a consolidated facility shall be as established within this
Lease for the primary space, and as established in Par. 4.6 expansion space
portion.
4.9 The Lessor shall not for a period of four (4) months after the date
of this lease, proceed with development and/or construction of the Phase IIB
building improvements, which constitutes the space set forth in Par. 4.6 and
4.7, without notice to Lessee.
5. SECURITY DEPOSIT. In lieu of security deposit, first month's rent
payment shall be made at signing of this Lease Agreement.
6. USE OF PREMISES.
6.1 USE. The Premises shall be used and occupied for warehousing
and distribution of pharmaceutical compounds (including controlled substances),
materials required for manufacture of pharmaceuticals, and medical related
products, and any lawful purpose which does not violate any applicable zoning
ordinance, restrictive covenant, or other restriction upon the use of the
Premises.
6.2 COMPLIANCE WITH LAW.
(a) Lessor warrants to Lessee that the Premises, in its state
existing on the date that the Lease occupancy commences, does not violate any
covenant or restrictions of record or any applicable building code, regulation
or ordinance in effect on such Occupancy Date. If it is determined that this
warranty has been violated, then it shall be the obligation of the Lessor, after
written notice from Lessee, to promptly and with due diligence, at Lessor's sole
cost and expense, rectify any such violation.
If, during the terms of the Lease, it is determined that there
has been a violation of the warranty of Lessor, Lessee, upon learning of such
breach of warranty, shall give notice of such breach of warranty to Lessor
within 10 days after learning of same, by written notice of such breach, and
thereafter Lessor, at Lessor's sole cost and expense, shall cure such breach. If
such breach cannot be cured by Lessor after notice, and by reason thereof Lessee
is unable to continue its ordinary business upon the Premises, Lessee may
thereupon terminate this lease and be entitled to recover any rent paid and
unearned as of the date of such termination, or Lessee may elect to cure
Lessor's breach, in which event all costs incurred by Lessee in effecting such
cure shall be paid by Lessor to Lessee immediately upon Lessor's receipt of
demand therefor;
(b) Except as provided in paragraph 6.2 (a), Lessee shall, at
Lessee's expense, comply promptly with all applicable statutes, ordinances,
rules, regulations, orders, covenants, and restrictions of record if any, and
requirements in effect during the term, or any part of the term hereof,
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regulating the use by Lessee of the Premises. Lessee shall not use, nor permit
the use of, the Premises in any manner that will tend to create trash or waste
at the exterior portions of the Premises, or a nuisance, or if there shall be
more than one tenant in the building containing the Premises, the use by Lessee
shall not unreasonably disturb the use of other portions of the building by
other tenants.
(c) If a statute, ordinance, rule or regulation or order is
promulgated by a governmental subdivision having jurisdiction over the Premises
which renders it impractical for Lessee to continue the occupancy of the
Premises, then thereupon Lessee shall have the right to terminate this Lease
upon 90 days written notice of its election to so terminate. Such notice shall
cite to Lessor the statute, ordinance, rule, regulation, or order that makes
occupancy impractical, and shall further state the reason for the impracticality
of continued occupancy. Lessor represents and warrants that there are no
covenants and restrictions of record, as of the date of this Lease, that will
require Lessee to incur an expense other than as is herein specifically provided
for in this Lease Agreement.
6.3 CONDITION OF PREMISES.
(a) Lessor shall deliver the Premises to Lessee clean and free
of debris and in a safe condition on the Lease Commencement Date, and Lessor
further warrants to Lessee that the plumbing, lighting, mechanical systems, and
loading doors, in and on the Premises, shall be in new, or operating condition
on the Lease Occupancy Date. If it is determined that the warranty has been
violated, then it shall be the obligation of Lessor, after receipt of written
notice from Lessee, setting forth with specificity the nature of the violation,
to promptly, at Lessor's sole cost, rectify such violation. Lessee's failure to
give such written notice to Lessor within 60 days after the Lease Commencement
Date, or within thirty (30) days after occupancy by Tenant of an expansion
phase(s), shall create the conclusive presumption that Lessor has complied with
all of Lessor's obligations under this Subparagraph 6.3(a). By reason of the
Premises being a newly constructed building, or as applicable to expansion
phase(s), Lessee shall have the benefit of any continuing warranties with
respect to equipment, and a one year warranty with respect to all new
construction. The Lessor shall provide Lessee, within 30 days of commencement
date, a list of subcontractors, suppliers, and related warranties thereto in
effect.
(b) Except as otherwise provided in this Lease, and subject to
Lessor's Warranties set forth in 6.2(a), 6.3(a), and 7.1, Lessee accepts the
Premises in their condition existing as of the Lease Commencement Date, or the
date that Lessee takes possession of the Premises, whichever is earlier, subject
to all applicable zoning, municipal, county and State Laws, ordinances and
regulations governing and regulating the use of the Premises and any covenants
or restrictions of record, and accepts this Lease subject thereto and to all
matters disclosed thereby and by any exhibits attached hereto, provided,
however, that Lessor does hereby expressly warrant that there will be no
violations of any such matters on such Lease Commencement Date. If, subsequent
to occupancy, Lessee discovers that a violation of any such matter has occurred,
and that such violation was in existence at the date of the commencement of the
occupancy of the Premises, then such violation shall be cured at the sole cost
and expense of Lessor. Written notice of any such
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violation shall be given by Lessee to Lessor within 10 days after obtaining
knowledge of such violation.
7. MAINTENANCE, REPAIRS AND ALTERATIONS.
7.1 LESSEE'S OBLIGATION. Lessee shall keep in good order, condition
and repair, the nonstructural portion of the Premises, and the mechanical
systems utilized for the Premises occupied by Lessee. Any structural repairs,
including, but not limited to, the roof framing (beams and plywood sheeting),
foundation, exterior walls, the floor structural section, as pertains to
settling (not including surface), and portions of the Premises not accessible to
Lessee, shall be maintained at the sole cost and expense of Lessor throughout
the term, and any extended term of the Lease, provided, however, that if there
is damage to the Premises by any act of omission or commission on the part of
the Lessee which causes a structural defect that requires repairs, then in that
event the cost of such repairs shall be paid by Lessee. Lessee shall maintain
plumbing, mechanical, and ventilating systems, electrical, and lighting
facilities, and any other equipment located within the Premises occupied by
Lessee, at Lessee's sole cost and expense. Lessee shall maintain the non-
warehouse area ceilings, floors (except structural defect), windows, doors,
plate glass and skylights located within the leased Premises. Notwithstanding
the foregoing, Lessor shall fully warrant the total Premises, including all
Tenant Improvements installed by Lessor, for a period of twelve (12) months from
the Lease Commencement Date, and for any items covered for extended periods by
manufacturers warranties for the time period of such extended warranties.
Landscaping, driveways, parking lots and fences located adjacent to
the Premises, and the roofing of the building, in which the Premises are
located, shall be maintained by Lessor, the reasonable cost of such maintenance
to be paid by Lessee, on pro rata basis of space leased by Lessee, as compared
to total leasable space in the building, except for maintenance costs
attributable to Lessee's exclusive parking area which shall be the sole
responsibility of Lessee, subject to allocation as may be applicable.
7.2 REPAIR OR SURRENDER. On the last day of the term hereof, or on
any sooner termination, Lessee shall surrender the Premises to Lessor in the
same condition as when received, ordinary wear and tear and construction defects
excepted, and the Premises shall be clean and free of debris. Lessee shall
repair any damage to the Premises occasioned by the installation or removal of
Lessee's trade fixtures, furnishings and equipment.
7.3 LESSOR'S RIGHTS. If Lessee fails to perform Lessee's obligations
under this Paragraph 7, or under any other paragraph of this Lease, Lessor may
at its option (but shall not be required to) enter upon the Premises after ten
(10) days prior written notice to Lessee (except in the case of an emergency, in
which case no notice shall be required), perform such obligations on Lessee's
behalf and put the same in good order, condition and repair, and the cost
thereof shall become due and payable as additional rental to Lessor together
with Lessee's next rental installment.
7.4 LESSOR'S OBLIGATIONS. Except for the obligations of Lessor under
Paragraph 6.2 (a) and 6.3 (a) (relating to Lessor's warranty), Paragraph 9
(relating to destruction of the Premises) Paragraph 14 relating to
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condemnation of the Premises), and Paragraph 7.1 (relating to structural
repairs), it is intended by the parties hereto that Lessor have no obligation in
any manner whatsoever, to repair and maintain the Premises, nor the building
located thereon, nor the equipment therein, whether structural or nonstructural,
except as expressly provided in this Lease, and particularly as set forth in
Paragraph 7.1 above.
If Lessor, for any reason, fails to perform its obligations under this
Paragraph 7, as it relates to other provisions of this Lease in respect to
Lessor's obligations regarding repairs of the Premises, (i) after 10 days
written notice, or in an emergency, immediately then in that event, Lessee may
make such repairs and deduct the cost thereof from the next monthly rental due
under the terms of this Lease, or due under the terms of the extended term of
this Lease, or (ii) after 30 days written notice Lessee may terminate this Lease
immediately upon written notice to Lessor.
7.5 ALTERATIONS AND ADDITIONS.
(a) Lessee shall not, without Lessor's prior written consent,
which shall not be unreasonably withheld, make any alterations, improvements,
additions or Utility Installations in, on, or about the Premises, except for
nonstructural alterations not exceeding $5,000 in cumulative costs during any
six month period, during the term of this Lease. In any event, whether or not in
excess of $5,000 in cumulative costs, Lessee shall make no change or alteration
to the exterior of the Premises, nor the exterior of the building on the
Premises, without Lessor's written consent. As used in Paragraph 7.5, the term
"Utility Installations" shall mean airlines, power panels, electrical
distribution systems, mechanical systems, plumbing, and fencing. Lessor may
require that Lessee remove any or all of said alterations, improvements,
additions or Utility Installations at the expiration of the term and restore the
Premises to their prior condition.
(b) Any alterations, improvements, additions or Utility
Installations in, or about the premises that Lessee shall desire to make, which
require the consent of the Lessor, shall be presented to Lessor in written form,
with proposed preliminary or detailed plans. Lessor shall either approve, or
disapprove with reasonable cause, Lessee's request within ten (10) business days
after receipt of Lessee's request. If Lessor has not responded within said
10-day period, Lessor shall be deemed to have approved Lessee's request. If
Lessor shall give its consent, the consent shall be deemed conditioned upon
Lessee acquiring a permit to do so from appropriate governmental agencies, the
furnishing of a copy thereof to Lessor prior to the commencement of the work and
the compliance by Lessee of all conditions of said permit in a prompt and
expeditious manner.
(c) 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 in 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 on the Premises, and Lessor shall have the right to post notices of
nonresponsibility 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 itself and Lessor against the same
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and shall pay and satisfy any such adverse judgement that may be rendered
thereon before the enforcement thereof against the Lessor or the Premises, upon
the condition that if Lessor shall require, Lessee shall furnish to lessor a
surety bond satisfactory to Lessor in an amount equal to such contested lien
claim or demand, indemnifying Lessor against liability for the same and holding
the Premises free from the effect of such lien or claim. In addition, Lessor may
require Lessee to pay Lessor's attorneys' fees and costs in participating in
such action if Lessor shall decide it is to its best interest to do so.
(d) Unless Lessor requires their removal, as set forth in
Paragraph 7.5 (a), all alterations, improvements, additions and Utility
Installations which may be made on the Premises, shall become the property of
Lessor and remain upon and be surrendered with the Premises at the expiration of
the term. Notwithstanding the provisions of this Paragraph 7.5 (d), Lessee's
machinery, trade fixtures, and equipment, other than that which is affixed to
the Premises so that it cannot be removed without material damage to the
Premises, which damage is incapable of being repaired within ten (10) days after
removal of Lessee's equipment, shall remain the property of Lessee and may be
removed by Lessee, subject to the provisions of Paragraph 7.2.
8. INSURANCE AND INDEMNITY.
8.1 INSURING PARTY. As used in this Paragraph 8, the term "insuring
party" shall mean the party to this Lease who has the obligation to obtain the
particular insurance described in each of the subsections of this Paragraph 8,
with respect to Property Damage to the Premises, Public Liability, and property
damage to property of another, by reason of conduct involving the Premises,
which are the subject of this Lease.
All insurance, as hereafter provided, and any that is required to be
procured by Lessor, shall be at the cost and expense of Lessee, on a pro rata
basis as hereafter provided. The Lessor shall maintain a comprehensive general
liability policy to insure against loss by reason of the ownership of the
property, involving personal injury or property damage to another, however, the
Lessee shall be responsible only for a policy up to a maximum coveage of one
million dollars ($1,000,000) per occurrence. If the Lessor determines to procure
insurance for liability in excess of one million dollars per occurrence, the
cost of such additional coverage shall be paid solely by Lessor. Any such
liability insurance procured by Lessor shall not reflect the Lessee as an
additional insured under such policy.
All insurance that is procured by Lessor, except as to liability
insurance in excess of $1,000,000, shall be at the expense of Lessee and any
other tenants of the building within which the Premises are located, and the
land upon which such building is located. The cost shall be prorated among all
Lessees of any portion of the Real Property, or the building, and the proration
shall be on the basis of the square footage of space occupied by Lessee, as that
bears to the total number of square feet of building occupied by all tenants, or
available for occupancy of tenants, of the real property and building.
8.2 LIABILITY INSURANCE.
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Lessee shall, at Lessee's expense, obtain, pay for directly, and keep
in force during the term of this Lease, a policy of Combined Single Limit,
Bodily Injury and Property Damage Insurance, insuring Lessor and Lessee against
any liability arising out of the ownership, use occupancy or maintenance of the
Premises and all areas appurtenant thereto. Such insurance shall be a combined
single limit policy in an amount not less than $1,000,000 per occurrence. Lessee
shall have the right to provide such insurance coverage, pursuant to blanket
policies obtained by Lessee.
The policy shall insure performance by Lessee of the indemnity pro-
visions of Paragraph 8. The limits of said insurance shall not, however, limit
the liability of Lessee hereunder.
8.3 PROPERTY INSURANCE.
(a) The Lessor shall procure and obtain, and keep in force during the
term of this Lease, at Lessee's expense, a policy or policies of insurance
covering loss or damage to the Premises, in the amount of the full replacement
value thereof, as the same may exist from time to time. The replacement value is
$2,100,000, but in no event less than the total amount required by lenders
having liens on the Premises, against all perils included within the
classification of fire, extended coverage, vandalism, malicious mischief, flood,
(in the event same is required by a lender having a lien on the Premises), and
special extended perils ("All Risk" as such term is used in the insurance
industry). Said insurance shall provide for payment of loss thereunder to Lessor
or to the holders of mortgages or deeds of trust on the Premises. A stipulated
value or agreed amount endorsement deleting the coinsurance provision of the
policy shall be procured with said insurance as well as an automatic increase in
insurance endorsement, causing the increase in annual property insurance
coverage by 1% per quarter, or as may be determined from time to time as based
on the cumulative change in CPI, from Lease Commencement. If Lessor shall fail
to procure and maintain said insurance, the Lessee may, but shall not be
required to, procure and maintain the same, but at the expense of Lessee. If
such insurance coverage has a deductible clause, the deductible. amount shall
not exceed $5,000 per occurrence, and Lessee shall be liable for such deductible
amount, in the same proportion as Lessee is liable for the cost of insurance
under the formula set forth above.
(b) The Lessor shall, in addition, obtain and keep in force at
Lessee's expense during the term of this Lease, a policy of rental value
insurance (Loss of Rents) covering a period of one year, with loss payable to
Lessor which insurance shall also cover all real estate taxes and insurance
costs for said period.
(c) 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, then Lessee shall pay for any increase in the property insurance of
such other building or buildings if said increase is caused by Lessee's acts,
omissions, or use of occupancy of the Premises.
(d) If the Lessor is the insuring party, the Lessor will not insure
Lessee's fixtures, equipment, or tenant improvements unless the tenant
improvements have become a part of the Premises under Paragraph 7 hereof.
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Lessee shall insure its fixtures, equipment, and tenant improvements which have
not become a part of the Premises.
8.4 INSURANCE POLICIES. The insuring party shall deliver to the other
party, copies of policies or such insurance certificates evidencing the
existence and amounts of such insurance, with loss payable clauses as required
by this Paragraph 8. No such policy shall be cancellable or subject to reduction
of coverage, or other modification, except after thirty (30) days prior written
notice to Lessor. If Lessee is the insuring party, Lessee shall at least (30)
days prior to the expiration of such policies, furnish Lessor with renewals or
"binders" thereof, or Lessor may order such insurance and charge the cost
thereof to Lessee, which amount shall be payable by Lessee upon demand. Lessee
shall not do, or permit to be done, anything which shall invalidate the
insurance policies referred to in Paragraph 8.3. If Lessee does or permits to be
done, anything which shall increase the cost of the insurance policies referred
to in Paragraph 8.3, then Lessee shall forthwith upon Lessor's demand, reimburse
Lessor for any additional premiums attributable to any act or omission of
operation of Lessee causing such increase in the cost of insurance. If Lessor is
the insuring party, and if the insurance policies maintained hereunder cover
other improvements, in addition to the Premises, Lessor shall deliver to Lessee
a written statement setting forth the amount of any such insurance cost increase
and showing in reasonable detail the manner in which it has been computed.
Insurance required hereunder shall be with companies holding a "General
Policyholders Rating" of at least B plus, 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".
8.5 WAIVER OF SUBROGATION. Lessee and Lessor each hereby release and
relieve the other, and waive their entire right of recovery against the other
for loss or damage arising out of or incident to the perils required to be
insured against hereunder, which perils occur in, on, or about the Premises,
whether due to the negligence of Lessor or Lessee or their agents, employees,
contractors and/or invitees. Lessee and Lessor shall, upon obtaining the
policies of insurance required hereunder, give notice to the insurance carrier
or carriers that the foregoing mutual waiver of subrogation is contained in this
Lease.
8.6 INDEMNITY. Lessee shall indemnify and hold harmless Lessor from
and against any and all claims arising from Lessee's use of the Premises, or
from the conduct of Lessee's business, or from activity, work or other things
done, permitted or suffered by Lessee in or about the Premises, or upon the real
property where such Premises are located and shall further indemnify and hold
harmless Lessor from and against any and all claims arising from any breach or
default in the performance of any obligation on Lessee's part to be performed
under the terms of this Lease, or arising from any negligence of the Lessee or
any of Lessee's agents, contractors or employees, and from and against all
costs, attorneys' fees, expenses and liabilities incurred thereon; and in case
any action or proceeding be brought against Lessor by reason of any such claim.
Lessee, upon notice from Lessor, shall defend the same at Lessee's expense.
Lessee, as a material part of the consideration of Lessor, hereby assumes all
risks of damage to property or injury to persons in, upon or about Premises,
arising from any cause, except for any loss, or claim attributable to a breach
of this Lease on the part of the Lessor, or an
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intentional act of coumission or an intentional act of omission or a negligent
act of omission or commission on the part of Lessor, Lessor's employees, agents
or contractors, from which Lessor shall defend, indemnify and hold harmless
Lessee.
8.7 EXEMPTION OF LESSOR FROM LIABILITY. Lessee hereby agrees that
Lessor shall not be liable for injury to Lessee's business or any loss of
income therefrom, or for damages to the goods, wares, merchandise or other
property of Lessee, Lessee's employees, invitees, customers, or any other person
in or about the Premises, nor shall Lessor be liable for injury to the person of
Lessee, Lessee's employees, agents or contractors (except as may be caused by
negligence by engineering design), and 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, sprinklers, wires,
appliances, plumbing, mechanical systems, or lighting fixtures, or from any
other cause, whether the said damage or injury 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 unless the cause of such damage or
injury or the means of repairing the same is inaccessible to Lessee. In
connection with Lessor's repairs, alterations, replacements or improvements to
the Premises, Lessor shall not suspend any utility services to the Premises
during Lessee's normal business hours, except as may be necessary in an
emergency. Lessor shall not be liable for any damages arising from any act or
neglect of any other tenant, if any, of the building in which the Premises are
located.
9. DAMAGE OR DESTRUCTION.
9.1 Definitions.
(a) "Premises Partial Damage" shall herein mean damage or
destruction to the Premises to the extent that the cost of repair is less than
50% of the then replacement cost of the Premises. "Premises Building Partial
Damage" shall herein mean damage or destruction to the building of which the
Premises are a part to the extent that the cost of repair is less than 50% of
the then replacement cost of such building as a whole.
(b) "Premises Total Destruction" shall herein mean damage or
destruction to the Premises to the extent that the cost of repair is 50% or more
of the then replacement cost of the Premises. "Premises Building Total
Destruction" shall herein mean damage or destruction to the building of which
the Premises are a part to the extent that the cost of repair is 50% or more of
the then replacement cost of such building as a whole.
(c) "Insured Loss" shall herein mean damage or destruction which
was caused by an event required to be covered by the insurance described in
Paragraph 8.
9.2 INSURED LOSS. Subject to the provisions of Paragraphs 9.4, 9.5
and 9.6, if at any time during the term of this Lease there is damage which is
an insured loss and which falls into the classification of Premises Partial
Damage or Premises Building Partial damage, then Lessor shall, at Lessor's
expense, repair such damage, but not Lessee's fixtures, equipment or tenant
improvements unless the same have become a part of the Premises pursuant to
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Paragraph 7.5 hereof, within ninety (90) days after the occurence of such
damage, and this Lease shall continue in full force and effect. In the event
such damage is not capable of being repaired by Lessor, working with due
diligence, within said 90 day period, Lessor shall notify Lessee of such fact in
writing within 15 business days after the occurrence of the damage, and Lessee
shall have the right to terminate this Lease by providing written notice of such
termination to Lessor within 10 days after receipt of Lessor's notice. In the
event Lessee elects not to terminate this Lease as provided herein, Lessor shall
repair the Premises with diligence and best efforts. Should Lessor have a
problem acquiring material for repairs, a reasonable extension shall be granted
upon Lessee's receipt of notice of the delay.
9.3 PARTIAL DAMAGE - UNINSURED LOSS.
(a) Subject to the provisions of Paragraphs 9.4, 9.5, and 9.6,
if at any time during the term of this Lease there is damage which is not an
insured loss and which falls within the classification of Premises Partial
Damage or Premises Building Partial Damage, unless caused by a negligent or
willful act of Lessee (in which event Lessee shall make the repairs at Lessee's
expense), 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 the date of the occurrence of such damage, of Lessor's
intention to cancel and terminate this Lease, as of the date of the occurrence
of such damage.
(b) Provided, however, that Lessor shall only have the right to
terminate this Lease if the damage is greater than 5% of the then-replacement
cost of the building or Premises, as applicable. In the event Lessor elects to
give such notice of Lessor's intention to cancel and 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 intention to repair such
damage at Lessee's expense, without reimbursement from Lessor, in which event
this Lease shall continue in full force an effect, and Lessee shall proceed to
make such repairs as soon as reasonably possible. If Lessee does not give such
notice within such 10-day period, this Lease shall be cancelled and terminated
as of the date of the occurrence of such damage, and the rental shall abate.
9.4 TOTAL DESTRUCTION. Subject to the provisions of Paragraph 9.5, if
at any time during the term of this Lease (including any extensions and
renewals) there is damage, which is an Insured Loss (including destruction
required by any authorized public authority) falling into the classification of
Premises Total Destruction or Premises Building Total Destruction, the Lease
shall continue in full force and effect. Lessor shall proceed to make such
repairs as soon as reasonably possible and shall use its best efforts to
complete such repairs within 120 days after date of destruction. If Lessor
shall fail to complete such repairs within 120 days after the date of
destruction, Lessee may terminate this Lease. If at any time during the term of
this Lease there is damage which is not an Insured Loss and falls into the
classification of Premises Total Destruction or Premises Building Total
Destruction, this Lease shall automatically terminate as of the date of such
total destruction.
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9.5 DAMAGE NEAR END OF TERM.
(a) If at any time during the last eight months of the term of
this Lease, or an extended term of this Lease, there is damage, whether or not
an insured loss, which falls within the classification of Premises Partial
damage, Lessor or Lessee may at Lessor's or lessee's option, cancel and
terminate this lease as of the date of occurrence of such damage by giving
written notice to the other of their election to do so within 30 days after the
date of occurrence of such damage.
(b) Notwithstanding Paragraph 9.5(a), in the event that Lessee
has an option to extend or renew this Lease, and the time within which said
option may be exercised has not yet expired, Lessee shall exercise such option,
if it is to be exercised at all, no later than 30 days after occurrence of an
insured loss falling within the classification of Premises Partial damage during
the last eight months of the term of this Lease. If Lessee duly exercises such
option during said 30 day period, 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 during 30 day period,
then Lessor may at Lessor's option terminate and cancel this Lease as of the
expiration of said 30 day period by giving written notice to Lessee of Lessor's
election to do so within 10 days after the expiration of said 30 day 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 Paragraphs 9.2 or 9.3,
and Lessor or Lessee repairs or restores the Premises, pursuant to the
provisions of this Paragraph 9, the rent payable hereunder for the period during
which such damage, repair or restoration continues shall be abated in proportion
to the degree to which Lessee's use of the Premises is impaired. Except for
abatement of rent, if any, Lessee shall have no claim against Lessor for any
damage suffered by reason of any such damage, destruction, repair or
restoration.
(b) If Lessor shall be obligated to repair or restore the
Premises under the provisions of this Paragraph 9, and shall not commence such
repair or restoration within 60 days after such obligations shall accrue, Lessee
may at Lessee's option cancel and terminate this Lease by giving Lessor written
notice of Lessee's election to do so at any time prior to the commencement of
such repair or restoration. In such event, this Lease shall terminate as of the
date of such notice.
9.7 TERMINATION - Advance Payments. Upon termination of this Lease
pursuant to this Paragraph 9, an equitable adjustment shall be made concerning
advance Rent payments made by Lessee to Lessor.
9.8 WAIVER. Lessor and Lessee waive the provisions of any statutes
which relate to termination of leases when leased property is destroyed and
agree that such event shall be governed by the terms of this Lease.
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10. REAL PROPERTY TAXES.
10.1 PAYMENT OF TAXES. Beginning upon the date of Commencement of the
Lease, Lessee shall pay the real property tax, as defined in Paragraph 10.2,
applicable to the square footage leased by Tenant as a portion of the total
Premises during the term of this Lease. All such payments shall be made at least
ten (10) days prior to the delinquency date of such payment. Lessee shall
promptly furnish Lessor with satisfactory evidence that such taxes have been
paid. If any such taxes paid by Lessee shall cover any period of time prior to
or after the expiration of the term hereof, Lessee's share of such taxes shall
be equitably prorated to cover only the period of time within the tax fiscal
year during which this Lease shall be in effect, and Lessor shall reimburse
Lessee to the extent required. If Lessee shall fail to pay any such taxes,
Lessor shall have the right to pay the same, in which case Lessee shall repay
such amount to Lessor with Lessee's next rent installment, together with any
penalties and interest imposed by the taxing authority, plus default interest
pursuant to Section 19.
The real property tax that Lessee will be required to pay under this
provision will be that portion of the real property taxes on the real property
and the building located thereon, as set forth in Exhibits "A" and "B", which is
occupied by Lessee, and the ratio shall be determined by the number of square
feet leased by Lessee that bears to the total number of square feet of leasable
space in the entire building. If any additional improvements are made to a
portion of the building not occupied by the Lessee, any increase in taxes
attributable to such addition will be the liability of someone other than Lessee
under this Lease. If Lessor installs additional improvements upon the real
property in addition to the building in which Lessee is located, then the amount
of taxes that will be required to be paid by Lessee shall be in a ratio that is
determined by the number of square feet occupied by Lessee, as that bears to the
total number of square feet of revised building area and improvements on the
real property.
If Lessor is required to pay impounds for taxes to any lending
institution holding a lien on the real property, Lessee will pay his
proportionate share of such impounds, based upon the ratio as above described,
as and when required to be paid by Lessor, under the Deed of Trust or mortgage
securing the Lessee.
The Lessee reserves the right to appeal directly or assist in the
appeal process of the assessment of Property Taxes, by the governing authority.
10.2 DEFINITION of Real Property Tax. As used herein, the term
"real property tax" 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 on 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, as against any legal or equitable interest
of Lessor in the Premises or in the real property of which the Premises are a
part, as against Lessor's right to rent or derive other income therefrom, and as
against Lessor's business of leasing the Premises;
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provided, however, that with respect to any special assessments which may be
paid in a lump sum or in periodic installments, Lessee shall only be required to
pay such assessments in periodic installments and only for the remainder of the
Term, as may be extended. The term "real property tax" shall also include any
tax, fee, levy, assessment or charge (i) in substitution of, partially or
totally, any tax, fee, levy, assessment, or charge hereabove included within the
definition of "real property tax", or (ii) the nature of which was hereinbefore
included within the definition of "real property tax", or (iii) which is imposed
for a service or right not charged prior to August, 1990, or, if previously
charged, has been increased since August, 1990, or (iv) which is imposed as a
result of a transfer, either partial or total, of Lessor's interest in the
Premises or which is added to a tax or charge hereinbefore included within the
definition of real property by reason of such transfer (except for any sales tax
on a transfer of the property), or (v) which is imposed by reason of this
transaction, any modifications or changes hereto, or any transfers hereof.
10.3 JOINT ASSESSMENT. If the Premises are not separately Lessee's
liability shall be a portion of the real property taxes for land and
improvements included within the tax parcel assessed.
The amount of taxes to be paid by Lessee shall be an amount based upon
the ratio of the number of square feet of the building included in the Premises
occupied by the Lessee as that bears to the total amount of area within the
building that is available for use by Lessor or another tenant. If additional
improvements are placed upon the land whereon the building is located from which
the Premises are delineated, any increase in taxes by reason of such
improvements shall not be a liability of Lessee unless such improvement is
placed specifically upon that portion of the building constituting a part of the
Premises which is occupied by the Lessee, in which event Lessee will pay for all
such additional taxes.
10.4 PERSONAL PROPERTY TAXES.
(a) Lessee shall pay, prior to delinquency, all taxes assessed
against and levied upon trade fixtures, furnishings, equipment and all other
personal property of Lessee contained in the Premises or elsewhere. When
possible, Lessee shall cause said trade fixtures, furnishings, equipment and all
other personal property to be assessed and billed separately from the real
property of Lessor.
(b) 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 10 days after receipt of a written statement setting forth the
taxes applicable to Lessee's property.
11. UTILITIES. Lessee shall pay directly to the appropriate agency, for
all water, gas, heat, light, power, telephone and other utilities and services
supplied to the Premises, together with any taxes thereon. If any such services
are not separately metered to Lessee, Lessee shall pay a reasonable proportion,
as determined by Lessor, of all charges jointly metered with other premises.
12. ASSIGNMENT AND SUBLETTING.
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12.1 LESSOR' S CONSENT REQUIRED. Lessee shall not voluntarily or by
operation of law, assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all or any part of Lessee's interest in this Lease or in the Premises,
without Lessor's prior written consent, which Lessor shall not unreasonably
withhold. Lessor shall respond to Lessee's request for consent hereunder within
fifteen (15) days after Lessor's receipt of Lessee's request therefor, and in
the event Lessor fails to respond within said 15-day period, Lessor shall be
deemed to have consented to such assignment or sublease. Any attempted
assignment, transfer, mortgage, encumbrance or subletting without such consent
shall be void, and shall constitute a breach of this Lease.
12.2 LESSEE AFFILIATE. Notwithstanding the provisions of Paragraph
12.1 hereof, Lessee may assign or sublet the Premises, or any portion
thereof, without Lessor's consent, to any corporation, partnership, or other
entity, which controls, is controlled by or is under common control with Lessee,
or to any corporation, partnership, or other entity, resulting from merger or
consolidation with Lessee, or to any person or entity which acquires all the
assets of Lessee as a going concern of the business that is being conducted on
the Premises, provided that said assignee assumes, in full, the obligations of
Lessee under this Lease. Any such assignment shall not, in any way, affect or
limit the liability of Lessee under the terms of this Lease even if after such
assignment or subletting, the terms of this Lease are materially changed or
altered with the consent of Lessee, the consent of whom shall not be necessary.
12.3 NO RELEASE OF LESSEE. Regardless of Lessor's consent, no
subletting or assignment shall release Lessee of Lessee's obligation or alter
the primary liability of Lessee to pay the rent and to perform all other
obligations to be performed by Lessee hereunder. The acceptance of rent by
Lessor from any other person shall not be deemed to be waiver by Lessor or any
provision hereof. Consent to assignment or subletting shall not be deemed
consent to any subsequent assignment or subletting. In the event of default by
any assignee of Lessee or any successor of Lessee, in the performance of the
terms hereof, Lessor may proceed directly against Lessee without the necessity
of exhausting remedies against said assignee. Lessor may consent to subsequent
assignments or subletting of this Lease or amendments or modifications to this
Lease with assignees of Lessee, and without obtaining its or their consent
thereto and such action shall not relieve Lessee of liability under this Lease;
provided that Lessor delivers written notice of such subsequent assignment,
sublease, amendment or modification to Lessee.
If there is an assignment or subletting of the rights under this Lease
with the consent of Lessor, and thereafter a default occurs on the part of such
assignee, Lessor shall give Lessee notice of such default, and Lessee shall have
ten days within which to cure or commence to cure such default before this Lease
shall be terminated.
12.4 ATTORNEYS' FEES. In the event Lessee shall assign or sublet the
Premises or request the consent of Lessor to any assignment or subletting, or if
Lessee shall request the consent of Lessor for any act Lessee proposes to do,
then Lessee shall pay Lessor's reasonable attorneys' fees incurred in connection
therewith, such attorneys' fees not to exceed $1,000 for each such request.
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13. DEFAULTS; REMEDIES.
13.1 DEFAULTS. The occurrence of any one or more of the following
events shall constitute a material default and breach of this Lease by Lessee.
(a) The vacating or abandonment of the Premises by the Lessee,
provided however, that if Lessee continues to pay the rent and other amounts
required under this Lease, such abandonment or vacating will not constitute a
default.
(b) The failure by Lessee to make any payment of rent or any
other payment required to be made by Lessee hereunder, as and when due, where
such failure shall continue for a period of ten (10) days after receipt of
written notice thereof from Lessor to Lessee. In the event that Lessor serves
with a Notice to Pay Rent or Quit pursuant to applicable unlawful detainer
statutes, such Notice to Pay Rent or Quit shall also constitute the notice
required by this subparagraph.
(c) The failure by Lessee to observe or perform any of the
covenants, conditions or provisions of this lease to be observed or performed by
Lessee, other than described in Paragraph (b) above, where such failure shall
continue for a period of 30 days after written notice thereof from Lessor to
Lessee; provided, however, that if the nature of Lessee's default is such that
more than 30 days are reasonably required for its cure, then Lessee shall not be
deemed to be in default if Lessee commenced such cure within said 30 day period
and thereafter diligently prosecutes such cure to completion.
(d) (i) The making by Lessee of any general arrangement or
assignment for the benefit of creditors; (ii) Lessee becomes a "debtor" as
defined in U.S.C. 101, or any successor statute thereto (unless, in the case of
a petition filed against Lessee, the same is dismissed within 60 days) (iii) the
appointment of a trustee or receiver to take possession of substantially all of
Lessee's assets located at the Premises or of Lessee's interest in this Lease,
where possession is not by 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 30 days. Provided, however,
in the event that any provision of this Paragraph 13.1 (d) is contrary to any
applicable law, such provision shall be of no force or effect.
(e) The discovery by Lessor that any financial statement given
to Lessor by Lessee was materially false at the time given to Lessor; provided
however, that Lessee had actual knowledge of the existence of such falsity and
that such materially false financial statement shall not constitute a default so
long as Lessee remains liable under the terms of this Lease and continues to pay
all amounts required to be paid by Lessee under the terms of this Lease.
13.2 REMEDIES. In the event of any such material default or breach by
Lessee, Lessor may at any time thereafter, without notice or demand and without
limiting Lessor in the exercise of any right or remedy which Lessor may have by
reason of such default or breach, choose any or all of the following:
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(a) Terminate Lessee's right to possession of the Premises by
any lawful means, in which case this Lease shall terminate, and Lessee shall
immediately surrender possession of the Premises to Lessor. In such event,
Lessor shall be entitled to recover from Lessee all damages incurred by Lessor
by reason of Lessee's default 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,
that portion of the leasing commission paid by Lessor pursuant to Paragraph 15,
applicable to the unexpired term of this Lease.
(b) Maintain Lessee's right to possession in which case this
Lease shall continue in effect whether or not Lessee shall have abandoned the
Premises. In such event, Lessor shall be entitled to enforce all of Lessor's
rights and remedies under this Lease, including the right to recover the rent as
it becomes due hereunder.
(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. Unpaid installments of rent and other monetary obligations of Lessee
under the terms of this Lease shall bear interest from the date due at the
maximum rate than allowable by law.
13.3 DEFAULT BY LESSOR. Lessor shall not be in default unless Lessor
fails to perform obligations required of Lessor within a reasonable time, but in
no event later than ten (10) days after receipt of written notice by Lessee to
Lessor, and to the holder of any first mortgage or deed of trust covering the
Premises whose name and address shall have theretofore been furnished to Lessee
in writing, specifying wherein Lessor has failed to perform such obligation;
provided, however, that if the nature of Lessor's obligation is such that more
than thirty (30) days are required for performance, then Lessor shall not be in
default if Lessor commences action within such 30 day period and thereafter
diligently prosecutes the same to completion.
Notwithstanding any other provision in this Lease to the contrary or
which provides separate and/or additional remedies for Lessee, in the event
Lessor fails to perform its obligations or fails to initiate performance of its
obligations within said 30-day period, Lessee shall have the right, but not the
obligation, to perform Lessor's obligations, the cost of which shall either be
paid to Lessee by Lessor immediately upon demand therefor, or an offset against
future rentals. In the event Lessee elects not to cure Lessor's failure to
perform and Lessor's failure continues for thirty (30) days after Lessor's
receipt of Lessee's notice, Lessee shall have the right to terminate this Lease
effective immediately upon delivery of written notice of such termination to
Lessor. In the event of such termination by Lessee, each party shall be relieved
of all respective duties and obligations hereunder.
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 incur
costs not contemplated by this Lease, the exact amount of which will be
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed on Lessor by the
terms of any mortgage or trust deed covering the Premises. Accordingly, if any
installment of rent or any other sum due from Lessee shall
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not be received by Lessor or Lessor's designee within ten (10) 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 the late charge imposed by any
lender of Lessor in connection with the Premises, or 5%, whichever is less, 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 late
payment by Lessee. Acceptance of such late charge by Lessor shall in no event
constitute a waiver of Lessee's default with respect to such overdue amount,
nor prevent Lessor from exercising any of the other rights and remedies granted
hereunder.
13.5 IMPOUNDS. If a late charge is payable hereunder, whether or not
collected, for three (3) consecutive installments of rent, within any Lease
Term, or any other monetary obligations of Lessee under the terms of this Lease,
Lessee shall pay to Lessor, in addition to any other payments required under
this Lease, a monthly advance installment, payable at the same time as the
monthly rent, for real property taxes and insurance expenses on the Premises,
which are payable by Lessee to Lessor under the terms of this Lease. Such
monthly impound shall be an amount equal to 1/12 of the real property tax for
the last taxable year, and 1/12 of the insurance premium for the preceding
insurance year during which insurance premiums were paid for the insurance
required to be paid for by Lessee under the terms of this Lease. Such funds
shall be established to insure payment when due before delinquency of any and
all such real property taxes and insurance premiums. If the amounts paid to
Lessor by Lessee under the provisions of this Paragraph 13.5 are insufficient to
discharge the obligations of Lessee to pay such real property taxes and
insurance premiums as the same become due, Lessee shall pay to Lessor, upon
Lessor's demand, such additional sums necessary to pay such obligations. All
monies paid to Lessor under this Paragraph 13.5 may be intermingled with other
monies of Lessor and shall not bear interest. In the event of a default in the
obligation of Lessee to perform under this Lease, then any balance remaining
from the funds paid to Lessor under the provisions of this Paragraph 13.5, may
at the option of Lessor be applied to payment of any monetary default of Lessee
in lieu of being applied to the payment of real property tax and insurance
premiums.
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"), and such
condemnation renders the Premises unsuitable for Lessee's use, as reasonably
determined by Lessee, this Lease shall terminate as to the part so taken as of
the date of condemning authority takes title or possession, whichever first
occurs. If more than 10% of the floor area of the building on the Premises, or
more than 25% of the land area of the Premises, or a majority of the parking
area designated for Lessee's use, which is not occupied by any building, is
taken by condemnation, or if such condemnation renders the Premises unsuitable
for Lessee's use or adversely affects Lessee's use of the Premises, as
reasonably determined by Lessee, Lessee may at Lessee's option, to be exercised
in writing only within ten (10) days after Lessee's receipt of written notice of
such taking (or in the absence of such notice, within (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
- 20 -
remaining, except that the rent shall be reduced in the proportion that the
floor area of the building taken bears to the total floor area of the building
constituting the Premises. Any award for the taking of all or any part of the
Premises under which 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 award for loss of or damage to
Lessee's trade fixtures and removable personal property. In the event that this
Lease is not terminated by reason of such condemnation, Lessor shall, in the
exercise of due diligence, repair any damage to the Premises caused by such
condemnation except to the extent that Lessee has been reimbursed therefor by
the condemning authority.
15. BROKER'S FEE.
(a) Upon the execution of this Lease by both parties, Lessor
shall be responsible for all Broker's Fees connected with this Lease, and in
accord with separate agreement(s) for same. This paragraph is set forth for
information purposes only, and has no binding obligation on the part of Lessee.
16. ESTOPPEL CERTIFICATE.
(a) Lessee shall at any time, within fifteen (15) days after
written notice from Lessor, execute, acknowledge and deliver to lessor a
statement in writing (i) certifying that this Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and effect) and the
date to which the rent and other charges are paid in advance if any, and (ii)
acknowledging that there are not, to Lessee's knowledge, any uncured defaults
if any are claimed. Any such statement may be conclusively relied upon by any
prospective purchaser or encumbrancer of the Premises.
(b) At Lessor's option, Lessee's failure to deliver such
statement within such time shall be conclusive upon Lessee (i) that this Lease
is in full force and effect, without modification except as may be represented
by Lessor, (ii) that there are no uncured defaults in Lessor's performance, and
(iii) that not more than one month's rent has been paid in advance.
(c) If Lessor desires to finance, refinance, or sell the
Premises, or any part thereof, Lessee hereby agrees to deliver to any lender or
purchaser designated by Lessor, such financial statements of Lessee as may be
reasonably required by such lender or purchaser. Such statements shall include
the past three years' financial statements of Lessee. All such financial
statements shall be received by Lessor, 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 only the owner or
owners at the time in question of the fee title or a Lessee's interest in a
ground Lease of the Premises, and except as expressly provided in Paragraph 15,
in the event of any transfer of such title or interest, Lessor herein
- 21 -
named (and in case of any subsequent transfers then the grantor) shall be
relieved from and after the obligations thereafter to be performed, provided
that any funds in the hands of Lessor or the then grantor at the time of such
transfer, in which Lessee has an interest, shall be delivered to the grantee.
The obligations contained in this Lease to be performed by Lessor shall, subject
as aforesaid, be binding on Lessor's successors and assigns, only during their
respective periods of ownership.
18. SEVERABILITY. The invalidity of any provision of this Lease is
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. Except as expressly herein
provided, any amount due to Lessor not paid when due shall bear interest at the
rate equal to First Interstate Bank of Arizona's "Prime Rate" as announced from
time to time, plus 2%, from the due date. Payment of such interest shall not
excuse or cure any default by Lessee under this Lease, provided however, that
interest shall not be payable on late charges incurred by Lessee nor on any
amounts upon which late charges are paid by Lessee.
20. TIME IS OF THE ESSENCE. Time is of the essence.
21. ADDITIONAL RENT. Any monetary obligations of Lessee to Lessor
under the terms of this Lease shall be deemed to be rent.
22. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS.
This Lease, including the Exhibits attached hereto, contains all
agreements of the parties with respect to any matter mentioned herein. No prior
agreement or understanding pertaining to any such matter shall be effective,
except for Lease Proposal Documents and letters, which are incorporated herein
by reference. This Lease may be modified in writing only, signed by the parties
in interest at the time of the modification. Except as otherwise stated in this
Lease, Lessee hereby ackknowledges that neither the real estate broker listed in
Paragraph 15 hereof, nor any cooperating broker on this transaction, nor the
Lessor or any employees or agents of any of said person has made any oral or
written warranties or representations to Lessee relative to the condition or use
by Lessee of said Premises, and Lessee acknowledges that Lessee assumes all
responsibility regarding the Occupational Safety Health Act, the legal use and
adaptability of the Premises and the compliance thereof with all applicable laws
and regulations in effect during the term of this Lease except as otherwise
specifically stated in this Lease.
23. NOTICES. Any notice required or permitted to be given hereunder
shall be in writing and may be given by personal delivery, certified mail, or
overnight delivery, and if given personally or by mail, shall be deemed
sufficiently given if addressed to Lessee or to Lessor at the address noted
below the signature of the respective parties, as the case may be. Either party
may by notice to the other specify a different address for notice purposes. 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 notice to Lessee.
The notices herein provided for shall be deemed given upon the date
- 22 -
the personal delivery is made, and a receipt for such notice is signed by an
authorized agent of Lessor or Lessee. If notice is given by certified mail, it
shall be return receipt requested, and shall be deemed given upon the date
indicated as having been delivered by the United States Postal Department on the
return receipt.
Notices to LESSEE shall be sent to:
26 Harbor Park Drive
Port Washington, New York 11050
Notices to LESSOR shall be sent to:
4515 S. McClintock Drive,
Suite 220 Tempe, Arizona 85282
24. WAIVERS. No waiver by Lessor of any provision hereof shall be
deemed a waiver of any other provision hereof or of any subsequent breach by
Lessee of the same or any other provision. 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 act by Lessee. The acceptance of rent
hereunder by Lessor shall not be a waiver of any preceding breach by Lessee of
any provision hereof, other than the failure of Lessee to pay the particular
rent so accepted, regardless of Lessor's knowledge of such preceding breach at
the time of acceptance of such rent.
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.
26. HOLDING OVER. If Lessee, with Lessor's consent, remains in
possession of the Premises or any part thereof after the expiration of the term
hereof, or the extended term, such occupancy shall be a tenancy from month to
month upon all the provisions of this Lease pertaining to the obligations of
Lessee, but all options and rights of first refusal, if any, granted under the
terms of this Lease shall be deemed terminated and be of no further effect
during said month to month tenancy.
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. Each provision of this Lease per-
formable by Lessee and Lessor shall be deemed both a covenant and a condition.
29. BINDING EFFECT; CHOICE OF LAW. Subject to any provisions hereof
restricting assignment or subletting by Lessee and subject to the provisions of
Paragraph 17, this Lease shall bind the parties, their personal representatives,
successors and assigns. This Lease shall be governed by the laws of the State
wherein the Premises are located.
30. SUBORDINATION.
(a) This Lease, at Lessor's option, shall be subordinate to any
- 23 -
ground lease, mortgage, deed of trust, or any other hypothecation or security
now or hereafter placed upon the real property of which the Premises are a part
and to any and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof.
Notwithstanding such subordination, Lessee's right to quiet possession of the
Premises shall not be disturbed if Lessee is not in default and so long as
Lessee shall pay the rent and observe and perform all of the provisions of this
Lease, unless this Lease is otherwise terminated pursuant to its terms. If any
mortgagee, trustee or ground lessor shall elect to have this lease assigned, the
Lessor shall give written notice thereof to Lessee, this Lease shall be deemed
prior to such mortgage, deed of trust or ground lease, whether this Lease is
dated prior or subsequent to the date of said mortgage, deed of trust or ground
lease or the date of recording thereof. Upon any subordination, the Lessee
hereunder shall continue to be entitled to peaceable possession of the Premises
so long as Lessee is not in default under any of the terms of this Lease.
(b) Lessee agrees to execute any documents reasonably required to
effectuate an attornment, a subordination or to make this Lease prior to the
lien of any mortgage, deed of trust or ground lease, as the case may be.
Lessee's failure to execute such documents within 10 days after receipt of
written demand shall constitute a material default by Lessee hereunder, unless
the subordination agreement or document does not provide for the continued
peaceable possession of Lessee when not in default under the terms of this
Lease.
31. ATTORNEY'S FEES. If either party named herein brings an action
to enforce the terms hereof or declare rights hereunder, the prevailing party in
any such action, on trial or appeal, shall be entitled to his reasonable
attorney's fees to be paid by the losing party as fixed by the court.
32. LESSOR 'S ACCESS. Lessor and Lessor's agents shall have the
right to enter the Premises at reasonable times and for upon twenty-four (24)
hours' prior notice to Lessee, or as otherwise agreed to from time to time
between the parties, for the purpose of inspecting of the same, showing the same
to lenders, prospective purchasers, or prospective lessees, and making such
alterations, repairs, improvements or additions to the Premises as Lessor may
deem necessary or desirable. Lessor may not at any time place on or about the
Premises any ordinary "For Sale" signs; without receiving prior written
permission from Lessee, Lessor may at any time during the last 180 days of the
term or extended term hereof place on or about the Premises any ordinary "For
Lease" signs, without receiving prior written permission from 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 the 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
without Lessor's prior written consent, which shall not unreasonably be
withheld, if in conformity with sign ordinances applicable thereto, and
commensurate with the tenant's signs located on the property and in the
neighborhood,
- 24 -
except that Lessee shall have the right without the prior permission of Lessor,
to place ordinary and usual For Rent or Sublet signs thereon.
35. CONSENTS. Wherever in this Lease the consent of one party is
required to an act of the other party, such consent shall not be unreasonably
withheld or delayed.
36. GUARANTOR. In the event that there is a guarantor of this Lease,
an addendum or modification to the Lease, defining the scope and/or limitations
of the guarantor, shall be set forth.
37. QUIET SESSION. Upon Lessee paying the rent for the Premises and
observing and performing all of the covenants, conditions and provisions on
Lessee's part to be observed and performed hereunder, Lessee shall have quiet
possession of the Premises for the entire term hereof, and extended term,
subject to all of the provisions of this Lease. The individual(s) executing this
Lease on behalf of Lessor, represent and warrant to Lessee that they are fully
authorized and legally capable of executing this Lease on behalf of Lessor and
that such execution is binding upon all parties holding an ownership interest in
the Premises.
38. OPTIONS.
38.1 DEFINITION. As used in this paragraph the word "OPTIONS" has
the following meaning: (1) the right or option to extend the term of this Lease
or to renew this Lease or to extend or renew any lease that Lessee has on other
property of Lessor; (2) the option or right of first refusal to lease, or right
of first refusal to lease the Premises, or the right of first offer to lease the
Premises, or the right of first refusal to lease other property of Lessor or
the right of first offer to lease other property of Lessor.
38.2 OPTIONS ASSIGNABLE ONLY WITH ASSIGNMENT OF LEASE. Each
Option granted to Lessee in this Lease are personal to Lessee and may not be
exercised or be assigned, voluntarily or involuntarily, by or to any person or
entity other than Lessee, provided however, the Option may be exercised by or
assigned to any assignee of Lessee approved by Lessor, pursuant to Paragraph
12.1 of this Lease, or by any Lessee Affiliate as defined in Paragraph 12.2 of
this Lease. The Options herein granted to Lessee are not assignable separate and
apart from this Lease.
38.3 MULTIPLE OPTIONS. In the event that Lessee has any multiple
options to extend or renew this Lease, a later option cannot be exercised unless
the prior option to extend or renew this Lease has been so exercised.
38. EFFECT OF DEFAULT ON OPTIONS.
(a) Lessee shall have no right to exercise an Option,
notwithstanding any provision in the grant of Option to the contrary, (i) during
the time commencing from the date Lessor gives to Lessee a notice of default
pursuant to Paragraph 13.1 (b) or 13.1 (c) and continuing until the default
alleged in said notice of default is cured, or (ii) during the period of time
commencing on the day after a monetary obligation to Lessor is due
- 25 -
from Lessee and unpaid and continuing until the obligation is paid, or (iii) at
any time after an event of default described in Paragraphs 13.1 (a), 13.1 (d),
or 13.1 (e) (without any necessity of Lessor to give notice of such default to
Lessee).
(b) The period of time within which an Option may be exercised
shall not be extended or enlarged by reason of Lessee's inability to exercise
an Option because of the provisions of Paragraph 39.4 (a).
(c) All rights of Lessee under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee's due and
timely exercise of the Option, if, after such exercise and during the term of
this Lease, (i) Lessee fails to pay to Lessor a monetary obligation of Lessee
for a period of 30 days after such obligation becomes due, or (ii) Lessee fails
to commence to cure a default specified in Paragraph 13.1 (c) within 30 days
after the date that Lessor gives notice to Lessee of such default and/or Lessee
fails thereafter to diligently prosecute said cure to completion, or (iii)
Lessee commits a default described in Paragraph 13.1 (a), 13.1 (d), or 13.1 (e)
(without the necessity of Lessor to give notice of such default to Lessee), or
(iv) Lessor gives to Lessee three or more notices of default under Paragraph
13.1 (b), where a late charge becomes payable under Paragraph 13.4 for each
such default, or Paragraph 13.1 (c), except where the defaults are cured.
39. MULTIPLE TENANT BUILDING. In the event that the Premises are part
of a larger building or group of buildings, then 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
building and grounds, the parking of vehicles and the preservation of good order
therein as well as for the convenience of other occupants and tenants of the
building; provided, however, that any such Rules and Regulations must apply
uniformly to all tenants in the building and, provided further, that such Rules
and Regulations do not abrogate in any way Lessee's rights under this Lease. The
material violation of any such rules and regulations shall be deemed a material
breach of this Lease by Lessee. If Lessor deems Lessee in breach of this
Paragraph 40, notice of such breach shall be given and a reasonable time to
correct the same on the part of Lessee shall be granted not to exceed 30 days
unless correction cannot reasonably be made within such period of time.
40. 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 overall protection of
Lessee, its agents, and invitees from acts of third parties.
41. EASEMENTS. Lessor reserves to itself the right, from time to
time, to grant such easements, rights and dedications that Lessor deems
necessary or desirable, and to cause the recordation of Parcel Maps and
restrictions, so long as such easements, rights, dedications, maps and
restrictions do not in any way affect Lessee's access to the Premises, or
unreasonably interfere or otherwise adversely affect Lessee's use of and
enjoyment of the Premises. Provided such easements, rights, dedications, maps
and restrictions comply with the foregoing, Lessee shall sign any of the
- 26 -
aforementioned documents upon request of Lessor.
42. 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 part thereof, as it was not legally required to pay under the provisions
of this Lease, together with such party's attorneys' fees and court costs to be
fixed by the Court.
43. AUTHORITY. If Lessee is a corporation, trust, or a 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 behalf of said entity. If Lessee is a corporation, trust,
or partnership, Lessee shall, within thirty (30) days after execution of this
Lease, deliver to Lessor evidence of such authority satisfactory to Lessor.
44. INSURING PARTY. The Insuring Party under this Lease shall be the
Lessor. Lessee shall be responsible to insure its own property, and the contents
of the Premises to the extent Lessee desires to insure same and to carry such
liability insurance as Lessee may determine is appropriate, and as subject only
to the requirements of Paragraph 8 above.
- 27 -
The parties hereto have executed this Lease at the place on the dates specified
in the acknowledgments hereto.
LESSEE LESSOR
SCHEIN PHARMACEUTICAL, INC. RONALD G. ROTH
26 Harbor Park Drive 4515 S. McClintock Drive, Suite 220
Port Washington, New York 11050 Tempe, Arizona 85282
By /s/ Martin Sperber By /s/ Ronald G. Roth
------------------------------- ----------------------------
Chairman
------------------------------- ----------------------------
Title Title
Date: 3/29/90 Dated: Mar. 28, 1990
---------------------------- ------------------------
By /s/ Paul Kleutghen
-------------------------------
VP - Operations
-------------------------------
Title
Dated: 3/26/90
---------------------------
STATE OF NEW YORK, COUNTY OF NASSAU:
On the 27th day of March, 1990, before me personally came Paul Kleutghen to me
known, who, being by me duly sworn, did depose and say that he resides in
Suffolk County, New York, that he is the Vice President-Materials Operations of
Schein Pharmaceutical, Inc. the corporation described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the board of directors of said corporation, and that he signed his name
thereto by like order.
/s/ David S. Weinstock
DAVID S. WEINSTOCK
Notary Public, State of New York
No. 4690529
Qualified in Nassau County
Commission Expires April 30, 1991
STATE OF NEW YORK, COUNTY OF NASSAU:
On the 27th day of March, 1990, before me personally came Martin Sperber to me
known, who, being by me duly sworn, did depose and say that he resides in Nassau
County, New York, that he is the Chairman of Schein Pharmaceutical, Inc. the
corporation described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the board of directors
of said corporation, and that he signed his name thereto by like order.
/s/ David S. Weinstock
DAVID S. WEINSTOCK
Notary Public, State of New York
No. 4690529
Qualified in Nassau County
Commission Expires April 30, 1991
- 28 -
STATE OF ARIZONA )
) ss.
County of Maricopa )
The foregoing instrument was acknowledged before me this 28th day of
March, 1990, by Ronald G. Roth.
/s/ Lynette M. Campagna
------------------------------
Notary Public
[NOTARY SEAL APPEARS HERE]
My Commission Expires:
December 8, 1990
------------------------------
- 29 -
[WAREHOUSE FLOOR PLAN APPEARS HERE]
EXHIBIT "A"
Attached to that certain Lease dated February 16, 1990
[EAST AND WEST WING OFFICE FLOOR PLAN APPEARS HERE]
EXHIBIT "B"
Attached to that certain Lease dated February 16, 1990
EXHIBIT "C"
Attached to that certain Lease dated
February 16, 1990
LEGAL DESCRIPTION
PHASE ONE AND TWO A
A portion of the Northwest quarter, Section 15, Township 1 North, Range 2 East,
Gila and Salt River Base and Meridian, Maricopa County, Arizona; more
particularly described as follows:
Commencing at the West quarter corner of said Section 15. Thence North (assumed)
along the West line of the Northwest quarter of said Section 15 a distance of
648.46 Ft. to the South line of a parcel of land as recorded in Docket 9581,
page 180, Maricopa County Recorders Office. Thence S-89(degrees)50'00" E along
said South line a distance of 388.29 Ft. to the point of beginning.
Thence continuing S-89(degrees)50'00" E along said South line a distance of
918.99 Ft. to the Southeast corner of said parcel; said corner also being on the
centerline of the Southern Pacific Transportation Company drill track. Thence
S-00(degrees)01'00" E along said centerline of drill track a distance of 251.80
Ft. to a point of curve. Thence Southeasterly along said curve, being concave
Northeasterly having a radius of 294.18 Ft., a central angle of 89(degrees)
37'00", a distance of 459.57 Ft. Thence S-00(degrees)01'00" E along a non-
tangent line, leaving said centerline a distance of 10.00 Ft. to the North right
of way line of the Roosevelt Irrigation District canal; said North right of way
line being 99.00 Ft. North as measured at right angles from the East-West mid
section line of Section 15. Thence N-89(degrees)38'00" W along said North right
of way line a distance of 1214.91 Ft. Thence N-00(degrees)22'00" W leaving said
right of way line a distance of 550.80 Ft. to the point of beginning.
529,882 Sq. Ft.
12.1644 Acres +/- Gross
Includes 15 Ft. for railroad purposes
[REGISTERED LAND
SURVEYOR SEAL
APPEARS HERE]
[SITE PLAN APPEARS HERE]
EXHIBIT "D"
Attached to that certain Lease dated February 16, 1990
[EAST WING FLOOR PLAN APPEARS HERE]
EXHIBIT "E"
Attached to that certain Lease dated February 16, 1990
SECOND ADDENDUM TO LEASE
------------------------
SECOND ADDENDUM TO LEASE made and entered into this 20th day of August 1990
by and between RGR DEVELOPMENT CORPORATION "Lessor", and SCHEIN PHARMACEUTICAL,
INC. "Lessee".
WHEREAS, SCHEIN PHARMACEUTICAL, INC., entered into a Lease dated February
16, 1990, with RONALD G. ROTH, subsequently assigned to RGR DEVELOPMENT
CORPORATION as of May 15, 1990.
WHEREAS, SCHEIN PHARMACEUTICAL, INC. has requested certain additional
Tenant Improvements, and the Parties have amended the size and scope of
improvements connected therewith, hereby agree to the following revisions:
NOW, therefore the Lease is modified as follows:
PAR 2. PREMISES. - fifth paragraph - The square footage of the building
space being leased under the terms hereof, is approximately 81,775 square
feet.
PAR. 3. RENT - revise the RENT amount(s) as follows:
Par. 3.1(a) $24,732.34
Par. 3.1(b) $26,922.97
Par. 3.1(c) $28,514.49
Par. 3.1(d) $30,953.44
Par. 3.2(a) $28,983.65
Par. 3.3(a) $30,738.17
Par. 3.4(a) $33,531.86
All other terms and conditions of the Lease, except as specifically
modified herein, or by Addendum, shall remain in full force and effect.
LESSEE LESSOR
SCHEIN PHARMACEUTICAL, INC. RGR DEVELOPMENT CORPORATION
26 Harbor Park Drive 4515 S. McClintock Drive, Suite 220
Port Washington, New York 11050 Tempe, Arizona 85282
By /s/ Martin Sperber By /s/ Ronald G. Roth
------------------------------- ----------------------------
Chairman President
------------------------------- ----------------------------
Title Title
Date: August 27th, 1990 Dated: Aug. 21, 1990
---------------------------- ------------------------
By /s/ Paul Kleutghen
-------------------------------
VP - Operations
-------------------------------
Title
STATE OF NEW YORK, COUNTY OF NASSAU:
On the 27th day of August, 1990, before me personally came Martin Sperber to me
known, who, being by me duly sworn, did depose and say that he resides in Nassau
County, New York, that he is the Chairman of Schein Pharmaceutical, Inc., the
corporation described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the board of directors
of said corporation, and that he signed his name thereto by like order.
/s/ Norma Olszewski
----------------------
Notary Public
NORMA OLSZEWSKI
NOTARY PUBLIC, State of New York
No. 41-4914787
Qualified in Queens County
Certificate Filed in Nassau County
Commission Expires Dec. 14, 1991
STATE OF NEW YORK, COUNTY OF NASSAU:
On the 27th day of August, 1990, before me personally came Paul P. Kleutghen to
me known, who, being by me duly sworn, did depose and say that he resides in
Nassau County, New York, that he is the VP - Operations of Schein
Pharmaceutical, Inc., the corporation described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the board of directors of said corporation, and that he signed his name
thereto by like order.
/s/ Norma Olszewski
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Notary Public
NORMA OLSZEWSKI
NOTARY PUBLIC, State of New York
No. 41-4914787
Qualified in Queens County
Certificate Filed in Nassau County
Commission Expires Dec. 14, 1991
STATE OF ARIZONA )
)ss.
County of Maricopa )
The foregoing instrument was acknowledged before me the 21st day of August, 1990
by Ronald G. Roth.
[NOTARY SEAL APPEARS HERE]
/s/ Tina M. Koester
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Notary Public
My Commission Expires:
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THIRD ADDENDUM TO LEASE
-----------------------
THIRD ADDENDUM TO LEASE made and entered into this 25th day of September
1990 by and between RGR DEVELOPMENT CORPORATION "Lessor", and SCHEIN
PHARMACEUTICAL, INC. "Lessee".
WHEREAS, SCHEIN PHARMACEUTICAL, INC., entered into a Lease dated February
16, 1990, with RONALD G. ROTH, subsequently assigned to RGR DEVELOPMENT
CORPORATION as of May 15, 1990.
WHEREAS, the parties to the Lease mutually agree to formally establish the
Lease Commencement Date.
NOW, therefore the Lease is modified as follows:
PAR. 4.3 - Revise to: The Lease Commencement Date is herewith established
as being November 1, 1990. The Occupancy Date of the premises is herewith
established as being September 1, 1990.
Early Move-In - The parties herewith agree that the month of October, 1990,
shall be considered as an Early Move-In/additional month for tenant
fixturization, and a monthly rental (Rent) consideration shall be paid
Lessor, as established in Par. 3.1(a)- Second Addendum.
All other terms and conditions of the Lease, except as specifically
modified herein, or by Addendum, shall remain in full force and effect.
LESSEE LESSOR
SCHEIN PHARMACEUTICAL, INC. RGR DEVELOPMENT CORPORATION
26 Harbor Park Drive 4515 S. McClintock Drive, Suite 220
Port Washington, New York 11050 Tempe, Arizona 85282
By /s/ Martin Sperber By /s/ Ronald G. Roth
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Chairman President
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Title Title
Date: October 11, 1990 Dated: 10-3-90
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By /s/ Paul Kleutghen
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Vice President, Operations
-------------------------------
Title
Dated: October 11, 1990
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STATE OF NEW YORK, COUNT OF NASSAU:
On the 11th day of October, 1990, before me personally came Martin Sperber to me
known, who, being by me duly sworn, did depose and say that he resides in Nassau
County, New York, that he is the Chairman of Schein Pharmaceutical, Inc., the
corporation described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the board of directors
of said corporation, and that he signed his name thereto by like order.
/s/ Christina Shevchenko
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Notary Public
CHRISTINA SHEVCHENKO
Notary Public, State of New York
No. 30-4810282
Qualified in Nassau County
Commission Expires June 30, 1991
STATE OF NEW YORK, COUNTY OF NASSAU:
On the 11th day of October, 1990, before me personally came Paul Kleutghen to me
known, who, being by me duly sworn, did depose and say that he resides in Nassau
County, New York, that he is the Vice President-Materials Operations of Schein
Pharmaceutical, Inc., the corporation described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the board of directors of said corporation, and that he signed his name
thereto by like order.
/s/ Christina Shevchenko
----------------------------------
Notary Public
CHRISTINA SHEVCHENKO
Notary Public, State of New York
No. 30-4810282
Qualified in Nassau County
Commission Expires June 30, 1991
STATE OF ARIZONA )
)ss.
County of Maricopa )
The foregoing instrument was acknowledged before me the 3rd day of October, 1990
by Ronald G. Roth.
/s/ Patty A. Chasey
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Notary Public
My Commission Expires:
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[NOTARY SEAL APPEARS HERE]