EXHIBIT 10.7
COMMERCIAL LEASE
1. PARTIES. This Lease is made this 1st day of October, 1999, by and
between DYNAMIC HEALTH PRODUCTS, INC., a Florida corporation (herein called
"Landlord") and INNOVATIVE HEALTH PRODUCTS, INC., a Florida corporation (herein
called "Tenant").
2. PREMISES. Landlord hereby leases to Tenant and Tenant leases from
Landlord, upon all of the conditions set forth herein, that certain real
property situated at 0000 Xxxxx Xxxxx Xxxx, Xxxxx, Xxxxxxx, in Pinellas County,
Florida, and described as a 33,222 square foot building (mol) as described in
Exhibit "A" attached hereto and made a part hereof. Said real property,
including the land and all improvements thereon, is herein called the
"Property."
3. TERM AND POSSESSION.
3.1 INITIAL TERM. The initial term hereof shall be for ten (10) years
following the Commencement Date, as hereinafter defined, unless sooner
terminated pursuant to any provision hereof. The Tenant occupied the Property on
the 14th day of September, 1999 and rent was prorated for the month of
September. Notwithstanding the date of possession by the Tenant the initial term
of the Lease shall run from the Commencement Date.
4. RENT.
4.1 RENT PAYMENT, PRORATION AND SALES TAXES. All rental payments due
hereunder shall be paid without notice or demand, and without abatement,
deduction or setoff for any reason unless specifically provided herein. Rent for
any period during the term hereof which is for less than one (1) month shall be
a pro rata portion of the monthly rent installment based on the number of days
in such period and the number of days in the month in question. Rent shall be
payable in lawful money of the United States to Landlord at the address stated
herein or to such other persons or at such other places as Landlord may
designate in writing. In addition, Tenant shall pay to Landlord all sales and
use taxes imposed by the State of Florida or any other governmental authority
from time to time, upon said rent and any other charges hereunder upon which
sales and use taxes are imposed.
4.2 NO WAIVER. The acceptance by the Landlord of monies from the
Tenant as rent or other sums due shall not be an admission of the accuracy or
the sufficiency of the amount of such rent or other sums due nor shall it be
deemed a waiver by Landlord of any right or claim to additional or further rent
or other sums due.
4.3 INITIAL RENT. Tenant shall pay to Landlord as minimum rent for the
Property for the first lease year, monthly payments in the amount of SIXTEEN
THOUSAND AND NO/100 DOLLARS ($16,000.00), in advance, on or before the 1st day
of each month throughout the first lease year.
4.4 ADVANCE RENT. Tenant shall pay Landlord upon execution hereof the
prorated rents for the month of September, 1999, and SIXTEEN THOUSAND AND NO/100
DOLLARS ($16,000.00) as rent for the month of October, 1999.
4.5 RENT ADJUSTMENTS. Commencing on October 1, 2000, and continuing on
the 1st day of October of each year thereafter, the monthly minimum rent payable
under Section 4.1 above shall be adjusted annually by the increase from the
Commencement Date, if any, in the Consumer Price Index published by the Bureau
of Labor Statistics of the U.S. Department of Labor Statistics for All Urban
Consumers, U.S. City Average (1982-84 = 100), All Items, herein referred to as
"C.P.I." The adjusted monthly minimum rent shall be calculated as follows: the
minimum rent payable for the first month of the term hereof, as set forth in
Section 4.1 above, shall be multiplied by a fraction, the numerator of which
shall be the C.P.I. for the month immediately preceding the effective date of
the subject rent adjustment, and the denominator of which shall be the C.P.I.
for the first month of the lease term. The sum so calculated shall constitute
the new monthly minimum rent hereunder until the subsequent adjustment, but in
no event shall any adjustment reduce the minimum rent to an amount lower than
the minimum rent payable for the month immediately preceding the date of
adjustment. No delay in establishing the rent adjustment shall be a waiver of
Landlord's right to later collect the difference between the rental at the rate
prior to adjustment, which shall continue to be paid until the adjustment is
established, and the rental rate after adjustment. In the event the compilation
and/or publication of the C.P.I. shall be transferred to any other governmental
department or bureau or agency or shall be discontinued, then the index most
nearly the same as the C.P.I. shall be used to make such calculation. In the
event that Landlord and Tenant cannot agree on an alternative index, then the
matter shall be submitted for decision to the American Arbitration Association
in accordance with the then rules of said association and the decision of the
arbitrators shall be binding upon the parties. The cost of said arbitration will
be paid equally by Landlord and Tenant.
5. SECURITY DEPOSIT. Tenant shall deposit with Landlord, upon demand of the
Landlord, SIXTEEN THOUSAND AND NO/100 DOLLARS ($16,000.00) as security for
Tenant's faithful performance of Tenant's obligations hereunder. If Tenant fails
to pay rent or other charges due hereunder, or otherwise defaults with respect
to any provision hereof, Landlord may (but shall not be required to do so before
enforcing other rights and remedies) use, apply or retain all or any portion of
said deposit for the payment of any rent or other charge in default or for the
payment of any other sum to which Landlord may become obligated by reason of
Tenant's default, or to compensate Landlord for any loss or damage which
Landlord may suffer thereby, but Tenant's liability under this Lease shall only
be discharged pro tanto, and Tenant shall remain liable for any amounts not
actually paid from said deposit. If Landlord so uses or applies all or any
portion of said deposit, Tenant shall, within ten (10) days after written demand
therefor, deposit cash with Landlord in an amount sufficient to restore said
deposit to the full amount hereinabove stated, and Tenant's failure to do so
shall be a material breach hereof. Landlord shall not be required to keep said
deposit separate from its general accounts and such deposit shall not bear
interest. If Tenant performs all of Tenant's obligations hereunder, said
deposit, or so much thereof as has not theretofore been applied by Landlord,
shall be returned, without payment of interest or other increment for its use,
to Tenant (or, at Landlord's option, to the last assignee, if
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any, of Tenant's interest hereunder) within thirty (30) days after the
expiration of the term hereof, and after Tenant has vacated the Property. No
trust relationship is created herein between Landlord and Tenant with respect to
said security deposit. If the monthly rent shall, from time to time, increase
during the term hereof, Tenant shall thereupon deposit with Landlord additional
security deposit so that the amount of security deposit held by Landlord shall
at all times bear the same proportion to then current rent as the original
security deposit bears to the original monthly rent set forth in Section 4.3
hereof.
6. USE.
6.1 USE. The Property shall be used and occupied only for
manufacturing and office uses and for no other purpose. Without limiting the
foregoing, Tenant shall not use nor permit the use of the Property in any manner
that will tend to create waste or a nuisance or, if there shall be more than one
tenant in the building containing the Property, shall tend to disturb or
interfere with the rights of such other tenants.
6.2 COMPLIANCE WITH LAW AND RESTRICTIONS. Tenant shall, at Tenant's
expense, execute and comply with all statutes, ordinances, rules, orders,
regulations and requirements of the federal, state, county and city government,
and of any and all of their departments and bureaus, applicable to the Property,
as well as all covenants and restrictions of record, and other requirements in
effect during the term or any part thereof, which regulate the use by Tenant of
the Property.
6.3 CONDITION OF PROPERTY; LETTER OF ACCEPTANCE. By taking possession
of the Property, Tenant shall be deemed to have accepted the Property, subject
to all applicable zoning, municipal, county and state laws, ordinances and
regulations governing and regulating the use of the Property, and any covenants
or restrictions of record, as suitable for Tenant's intended purposes, and in
compliance with all terms and provisions hereof. Tenant acknowledges that
neither Landlord nor Landlord's agent has made any representation or warranty as
to the present or future suitability of the Property for the conduct of Tenant's
business. The Tenant hereby accepts delivery of the Property and the condition
of the Property complies with Landlord's covenants and obligations hereunder.
7. MAINTENANCE, REPAIRS AND ALTERATIONS.
7.1 CASUALTY AND CONDEMNATION. The specific provisions hereof relating
to repairs after casualty or condemnation shall take precedence over the terms
of this Section 7, but only to the extent in conflict herewith.
7.2 MAINTENANCE. Tenant shall, at Tenant's sole cost and expense,
maintain the Property, the building and improvements and all components thereof
throughout the lease term, in good, safe and clean order, condition and repair,
including without limitation all plumbing, heating, air conditioning,
ventilating, and electrical facilities and all components thereof serving the
Property, the building, its painting, maintenance and repair. If Tenant fails to
perform Tenant's obligations under this Section 7 or under any other section
hereof, Landlord may at
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Landlord's option enter upon the Property after ten (10) days' prior written
notice to Tenant (except in the case of emergency, in which case no notice shall
be required), perform such obligations on Tenant's behalf, and put the Property
in good, safe and clean order, condition and repair, and the cost thereof
together with interest thereon at the Default Rate, shall be due and payable as
additional rent to Landlord together with Tenant's next rental installment.
Tenant expressly waives the benefits of any statute now or hereafter in effect
which would otherwise afford Tenant the right to make repairs at Landlord's
expense or to terminate this Lease because of Landlord's failure to keep the
Property in good order, condition and repair. It is agreed that the only
obligation for maintainence or repair to the Property is limited to the roof and
the structue of the building.
7.3 PLATE GLASS. Tenant shall maintain all plate glass, within or on
the perimeter of the Property, if any.
7.5 GROUNDS; PARKING AREAS. Tenant, at Tenant's expense, shall maintain
all landscaping, driveways, parking areas and sidewalks serving the Property.
Landlord shall be responsible for any necessary repaving and/or repairs to
parking lot.
7.6 TERMINATION OF LEASE. On the last day of the term hereof, or on any
sooner termination, Tenant shall surrender the Property to Landlord in the same
condition as received, ordinary wear and tear excepted, clean and free of
debris. Tenant's moveable machinery, furniture, fixtures and equipment, other
than that which is affixed to the Property so that it cannot be removed without
damage to the Property and which Landlord does not require Tenant to remove, may
be removed by Tenant upon expiration of the lease term. Tenant shall repair any
damage to the Property occasioned by the installation or removal of its trade
fixtures, furnishings and equipment. Upon termination of this Lease for any
cause whatsoever, if Tenant fails to remove its effects, they shall be deemed
abandoned and Landlord may, at its option, remove the same in any manner that
the Landlord shall choose, store them without liability to the Tenant for loss
thereof, and the Tenant agrees to pay the Landlord on demand any and all
expenses incurred in such removal, including court costs, attorney's fees and
storage charges for any length of time the same shall be in the Landlord's
possession, or the Landlord may, at its option, without notice, sell said
effects, or any part of the same, at a private sale and without legal process
for such price as the Landlord may obtain and apply the proceeds of such sale
upon the amounts due under this Lease from the Tenant to Landlord and upon the
expenses incident to the removal and sale of said effects. Tenant shall deliver
all keys and combinations to locks within the Property to Landlord upon
termination of this Lease for any reason. Tenant's obligations to perform under
this provision shall survive the end of the lease term.
7.7 ALTERATIONS AND ADDITIONS.
(a) Tenant shall not, without Landlord's prior written consent,
make any alterations, improvements, additions, or Utility Installations (as
defined below) in, on, or to the Property. Further, any contractor or person
making any alterations, improvements, additions or Utility Installations in, on,
or to the Property must first be approved in writing by Landlord. Landlord may
require Tenant to provide Landlord, at Tenant's sole cost and expense, a
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lien and completion bond in an amount equal to one and one-half (1 1/2) times
the estimated cost of such improvements, to insure Landlord against any
liability for construction liens and to insure completion of the work. Landlord
may require that Tenant remove any or all of said alterations, improvements,
additions or Utility Installations at the expiration of the term, and restore
the Property to its prior condition. Should Tenant make any alterations,
improvements, additions or Utility Installations without the prior approval of
Landlord, in addition to all other remedies of Landlord for Tenant's breach,
Landlord may require that Tenant remove any or all of the same. As used in this
Section 7.7, the term "Utility Installation" shall mean carpeting, window
coverings, air lines, power panels, electrical distribution systems, lighting
fixtures, space heaters, heating, air conditioning and ventilation systems, and
plumbing, and penetrations to any exterior wall or roof, if any.
(b) Any alteration, improvement, addition or Utility Installation
in or to the Property that Tenant shall desire to make shall be presented to
Landlord for approval in written form, with proposed detailed plans. If Landlord
shall give its consent, the consent shall be deemed conditioned upon Tenant
acquiring all necessary permits to do the work from appropriate governmental
agencies, the furnishing of a copy thereof to Landlord prior to the commencement
of the work, the compliance by Tenant with all conditions of said permits in a
prompt and expeditious manner, and, if applicable, Tenant's conducting its work
so as not to interfere with any other tenants of the building in which the
Property is located.
(c) Tenant shall pay, when due, and hereby agrees to indemnify
and hold harmless Landlord for and from, all claims for labor or materials
furnished or alleged to have been furnished to or for Tenant, at or for use in
the Property, which claims are or may be secured by any construction lien
against the Property or any interest therein. Tenant shall give Landlord not
less than ten (10) days' notice prior to the commencement of any work on the
Property which might give rise to any such lien or claim of lien and Landlord
shall have the right to post notices of non-responsibility in or on the Property
as provided by law. If Tenant shall, in good faith, contest the validity of any
such lien, claim or demand, then Tenant shall, at its sole expense, defend
itself and Landlord against the same and shall pay and satisfy any adverse
judgment that may be rendered thereon before the enforcement thereof against the
Landlord or the Property, upon the condition that, if Landlord shall require,
Tenant shall furnish to Landlord a surety bond satisfactory to Landlord in an
amount equal to such contested lien, claim or demand indemnifying Landlord
against liability for the same and holding the Property free from the effect of
such lien, claim or demand. In addition, Landlord may require Tenant to pay
Landlord's attorney's fees and costs in participating in such action if Landlord
shall decide it is in its best interests to do so.
(d) Unless Landlord requires their removal, all alterations,
improvements, additions and Utility Installations made on the Property shall
become the property of Landlord and remain upon and be surrendered with the
Property at the expiration of the lease term without compensation to Tenant.
7.8 LANDLORD'S INTEREST NOT SUBJECT TO LIENS. As provided in
ss.713.10, Florida Statutes, the interest of Landlord shall not be subject to
liens for improvements made by
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Tenant and Tenant shall notify any contractor making such improvements of this
provision. An appropriate notice of this provision may be recorded by Landlord
in the Public Records of Pinellas County, Florida, in accordance with said
statute, without Tenant's joinder or consent.
8. INSURANCE; INDEMNITY.
8.1 PROPERTY INSURANCE - TENANT. Tenant shall at all times during the
term hereof, at its expense, maintain a policy or policies insuring the Property
against loss or damage by fire, explosion, and other hazards and contingencies
("all risk," as such term is used in the insurance industry), and plate glass
insurance as required in the reasonable discretion of Landlord, in an amount of
not less than full insurable value.
8.2 LIABILITY INSURANCE - TENANT. Tenant shall, at Tenant's sole
expense, obtain and keep in force during the term hereof a policy of bodily
injury and property damage insurance, insuring Tenant and Landlord against any
liability arising out of the use, occupancy or maintenance of the Property and
the parking areas, walkways, driveways, landscaped areas and other areas
exterior to the Property and appurtenant thereto. Such insurance shall be in an
amount not less than THREE MILLION DOLLARS ($3,000,000.00) combined single
limit, THREE MILLION DOLLARS ($3,000,000.00) per person, THREE MILLION DOLLARS
($3,000,000.00) per accident for bodily injury, and THREE MILLION DOLLARS
($3,000,000.00) property damage. The policy shall insure performance by Tenant
of the indemnity provisions of this Section 8. The limits of said insurance
shall not, however, limit the liability of Tenant hereunder. Upon demand, Tenant
shall provide Landlord, at Landlord's expense, with such increased amounts of
insurance as Landlord may reasonably require to afford Landlord adequate
protection for risks insured under this Section 8. Tenant, as a material part of
the consideration to Landlord, hereby assumes all risk of damage to property or
injury to persons, in, upon or about the Property arising from any cause and
Tenant hereby waives all claims in respect thereof against Landlord.
8.3 EMPLOYEES COMPENSATION - TENANT. Tenant shall maintain and keep in
force all employees' compensation insurance required under the laws of the State
of Florida and such other insurance as may be necessary to protect Landlord
against any other liability to person or property arising hereunder by operation
of law, whether such law is now in force or is adopted subsequent to the
execution hereof.
8.4 TENANT'S DEFAULT. Should Tenant fail to keep in effect and pay for
such insurance as it is in this section required to maintain, Landlord may do
so, in which event the insurance premiums paid by Landlord, together with
interest thereon at the Default Rate from the date paid by Landlord, shall
become due and payable forthwith and failure of Tenant to pay same on demand
shall constitute a breach hereof.
8.5 TENANT'S COMPLIANCE. Tenant shall properly and promptly comply
with and execute all rules, orders and regulations of the Southeastern
Underwriter's Association for fire and other casualties, at Tenant's own cost
and expense. Tenant shall not do or permit to be done anything which shall
invalidate the insurance policies referred to in this Section 8.
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Tenant agrees to pay any increase in the amount of insurance premiums over and
above the rate now in force that may be caused by Tenant's use or occupancy of
the Property. In the event any increase in premiums is caused by the act or
omission of Tenant in violation of the terms hereof, payment by Tenant of such
increase shall not release Tenant from liability for such violation.
8.6 INSURANCE POLICIES. Insurance required hereunder shall be with
good and solvent insurance companies satisfactory to Landlord; in the absence of
other specific directions, such companies shall hold 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 Property, as set forth in the most current issue of "Best's
Insurance Guide". Tenant shall deliver to Landlord copies of policies of
insurance required to be provided by Tenant under this Section 8 or certificates
evidencing the existence and amounts of such insurance and its compliance with
the conditions set forth in this Section 8. No such policy shall be cancelable
or subject to reduction of coverage or other modification except after thirty
(30) days' prior written notice to Landlord, and the interest of Landlord under
such policies shall not be affected by any default by Tenant under the
provisions of such policies. Tenant shall, at least thirty (30) days prior to
the expiration of such policies, furnish Landlord with renewals or "binders"
thereof, or Landlord may order such insurance and charge the cost thereof to
Tenant, which amount shall be payable by Tenant upon demand. If required by any
mortgage encumbering the Property, the mortgagee shall also be a named or
additional insured and the terms of all insurance policies shall comply with all
other requirements of such mortgage.
8.7 WAIVER OF SUBROGATION. Tenant and Landlord 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 actually insured
against under this Section 8, which perils occur in, on, or about the Property,
whether due to the negligence of Landlord or Tenant or their agents, employees,
contractors and/or invitees. Tenant and Landlord 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.
8.8 INDEMNITY. Tenant shall indemnify and hold harmless Landlord from
and against any and all injury, expense, damages and claims arising from
Tenant's use of the Property, whether due to damage to the Property, claims for
injury to the person or property of any other tenant of the building (if
applicable) or any other person rightfully in or about the Property, from the
conduct of Tenant's business or from any activity, work or things done,
permitted or suffered by Tenant or its agents, servants, employees, licensees,
customers, or invitees in or about the Property or elsewhere or consequent upon
or arising from Tenant's failure to comply with applicable laws, statutes,
ordinances or regulations, and Tenant shall further indemnify and hold harmless
Landlord from and against any and all such claims and from and against all
costs, attorney's fees, expenses and liabilities incurred in the investigation,
handling or defense of any such claim or any action or proceeding brought in
connection therewith by a third person or any governmental authority; and in
case any action or proceeding is brought against Landlord by reason of any such
claim, Tenant upon notice from Landlord shall defend the same at Tenant's
expense by counsel satisfactory to Landlord. This indemnity shall not require
payment as a condition precedent to recovery.
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8.9 EXEMPTION OF LANDLORD FROM LIABILITY. Tenant hereby agrees that
Landlord shall not be liable for injury to Tenant's business or any loss of
income therefrom or for damage to the goods, wares, merchandise or other
property of Tenant, Tenant's employees, invitees, customers, or any other person
in or about the Property, 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, air conditioning or lighting fixtures, or from any other cause,
whether the said damage or injury results from latent defects or other
conditions arising upon the Property or upon other portions of the building(s)
of which the Property is a part, or from other sources or places and regardless
of whether the cause of such damage or injury or the means of repairing the same
is inaccessible to Tenant. Landlord shall not be liable for any damages arising
from any act or neglect of any other tenant of the building in which the
Property is located.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
(a) "Property Partial Damage" shall herein mean damage or
destruction to the Property to the extent that the cost of repair is less than
fifty percent (50%) of the fair market value of the Property immediately prior
to such damage or destruction, or if applicable, damage or destruction to the
building of which the Property is a part to the extent that the cost of repair
is less than fifty percent (50%) of the fair market value of such building as a
whole immediately prior to such damage or destruction.
(b) "Property Total Destruction" shall herein mean damage or
destruction to the Property to the extent that the cost of repair is fifty
percent (50%) or more of the fair market value of the Property immediately prior
to such damage or destruction, or if applicable, damage or destruction to the
building of which the Property is a part to the extent that the cost of repair
is fifty percent (50%) or more of the fair market value of such building as a
whole immediately prior to such damage or destruction.
(c) "Insured Loss" shall herein mean damage or destruction which
was caused by an event required to be covered by the insurance described in
Section 9.
9.2 PARTIAL DAMAGE - INSURED LOSS. Subject to the provisions of
Section 9.5, if, at any time during the term hereof, there is damage which is an
Insured Loss and which falls into the classification of Property Partial Damage,
then Landlord shall, at Landlord's sole cost, repair such damage as soon as
reasonably possible and this Lease shall continue in full force and effect. In
no event shall Landlord be obligated to make any repairs or replacements of any
items other than those installed by or at the expense of Landlord or to repair
any damage except to the extent proceeds of insurance are available for such
purpose.
9.3 PARTIAL DAMAGE - UNINSURED LOSS. Subject to the provisions of
Section 9.5, if at any time during the term hereof there is damage which is not
an Insured Loss
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and which falls within the classification of Property Partial Damage, unless
caused by a negligent or willful act of Tenant (in which event Tenant shall make
the repairs at Tenant's expense), Landlord may at Landlord's option either (i)
repair such damage as soon as reasonably possible at Landlord's expense, in
which event this Lease shall continue in full force and effect, or (ii) give
written notice to Tenant within thirty (30) days after the date of the
occurrence of such damage of Landlord's intention to cancel and terminate this
Lease, as of the date of the occurrence of such damage. In the event Landlord
elects to give such notice of Landlord's intention to cancel and terminate this
Lease, Tenant shall have the right within ten (10) days after the receipt of
such notice to give written notice to Landlord of Tenant's intention to repair
such damage at Tenant's expense, without reimbursement from Landlord, in which
event this Lease shall continue in full force and effect, and Tenant shall
proceed to make such repairs as soon as reasonably possible. If Tenant does not
give such notice within such ten (10) day period, this Lease shall be cancelled
and terminated as of the date of the occurrence of such damage. In no event
shall Landlord be obligated to make any repairs or replacements of any items
other than those installed by or at the expense of Landlord.
9.4 TOTAL DESTRUCTION. If at any time during the term hereof there is
damage, whether or not an Insured Loss (including destruction required by any
authorized public authority), which falls into the classification of Property
Total Destruction or Property Building Total Destruction, this Lease shall
automatically terminate as of the date of such damage, unless within ten (10)
days after such damage occurs Landlord shall notify Tenant that Landlord shall
repair such damage and shall thereafter repair the damage within a reasonable
time.
9.5 DAMAGE NEAR END OF TERM.
(a) If at any time during the last six (6) months of the term
hereof there is damage, whether or not an Insured Loss, which falls within the
classification of Property Partial Damage, Landlord may at Landlord's option
cancel and terminate this Lease as of the date of occurrence of such damage by
giving written notice to Tenant of Landlord's election to do so within thirty
(30) days after the date of occurrence of such damage.
(b) Notwithstanding Subsection 9.5(a), in the event that Tenant
has an option to extend or renew this Lease and the time within which said
option may be exercised has not yet expired, Tenant shall exercise such option,
if it is to be exercised at all, no later than twenty (20) days after the
occurrence of an Insured Loss falling within the classification of Property
Partial Damage during the last six (6) months of the term hereof. If Tenant duly
exercises such option during said twenty (20) day period, Landlord shall, at
Landlord's expense, repair such damage as soon as reasonably possible to the
extent required under Section 9.2 above and this Lease shall continue in full
force and effect. If Tenant fails to exercise such option during said twenty
(20) day period, then Landlord may at Landlord's option terminate and cancel
this Lease as of the expiration of said twenty (20) day period by giving written
notice to Tenant of Landlord's election to do so within ten (10) days after the
expiration of said twenty (20) day period, notwithstanding any term or provision
to the contrary in the grant of option to extend or renew.
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9.6 ABATEMENT OF RENT; TENANT'S REMEDIES.
(a) In the event of damage described in this Section 9 which
Landlord or Tenant repairs or restores, 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 Tenant's use of the Property is impaired.
Except for abatement of rent, if any, Tenant shall have no claim against
Landlord for any damage suffered by reason of any such damage, destruction,
repair or restoration.
(b) If Landlord shall be obligated to repair or restore the
Property under the provisions of this Section 9 and shall not commence such
repair or restoration within ninety (90) days after such obligation shall
accrue, Tenant may at Tenant's option cancel and terminate this Lease by giving
Landlord written notice of Tenant'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 and Tenant shall have no other rights
against Landlord.
9.7 TERMINATION; ADVANCE PAYMENTS. Upon termination hereof pursuant to
this Section 9, an equitable adjustment shall be made concerning advance rent
and any advance payments made by Tenant to Landlord. Landlord shall, in
addition, return to Tenant so much of Tenant's security deposit as has not
theretofore been applied by Landlord.
9.8 WAIVER. Landlord and Tenant waive the provisions of any statutes
which relate to termination of leases when leased property is destroyed and
agree that any such event shall be governed by the terms hereof.
10. PROPERTY TAXES.
10.1 DEFINITION OF "REAL PROPERTY TAXES". As used herein, the term
"real property taxes" shall include any form of 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 Property 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, against any legal or equitable interest of Landlord in the
Property or in the real property of which the Property is a part, or against
Landlord's right to rent or other income therefrom, or against Landlord's
business of leasing the Property. 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 hereinabove
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) that is imposed as a result of a transfer, either partial or total, of
Landlord's possessory interest in the Property, or which is added to a tax or
charge hereinbefore included within the definition of real property tax by
reason of such transfer, or (iv) that is imposed by reason of this transaction,
any modifications or changes hereto, or any transfers hereof. The term "real
property tax" shall not include any income, estate or inheritance tax assessed
against Landlord, documentary stamp tax
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imposed as a result of Landlord's transfer of the fee interest in the Property,
or any sales tax on rent or other payments due from Tenant hereunder.
10.2 PAYMENT OF TAXES. Tenant shall pay the real property taxes, as
defined in Section 10.1, applicable to the Property throughout the lease term.
If the term hereof shall not expire concurrently with the expiration of the tax
year, Tenant's liability for real property taxes for the last partial lease year
shall be prorated on an annual basis.
10.3 PERSONAL PROPERTY TAXES. Tenant shall pay, prior to delinquency,
all taxes assessed against and levied upon trade fixtures, furnishings,
equipment and all other personal property of Tenant contained on the Property or
elsewhere or on any leasehold improvements made to the Property by Tenant,
regardless of the validity thereof or whether title to such improvements shall
be in the name of Tenant or Landlord. When possible, Tenant shall cause said
trade fixtures, furnishings, equipment and all other personal property to be
assessed and billed separately from the real property of Landlord. If any of
Tenant's personal property shall be assessed with Landlord's real property,
Tenant shall pay Landlord the taxes attributable to Tenant's personal property
within ten (10) days after receipt of a written statement from Landlord setting
forth the taxes applicable to Tenant's property.
11. UTILITIES.
(a) Tenant shall punctually pay for all water and sewer charges,
and for all gas, heat, electricity, telephone, garbage collection and all other
utilities and services consumed in connection with the Property, together with
any taxes thereon. If any such services are not separately metered as to the
Property, Tenant shall pay a reasonable proportion to be determined by Landlord
of all charges jointly metered with other premises.
(b) If charges to be paid by Tenant hereunder are not paid when
due and Landlord elects to pay same, interest shall accrue thereon from the date
paid by Landlord at the Default Rate, and such charges and interest shall be
added to the subsequent month's rent and shall be collectible from Tenant in the
same manner as rent. Landlord shall not be liable for damage to Tenant's
business and/or inventory or for any other claim by Tenant resulting from an
interruption in utility services.
12. ASSIGNMENT AND SUBLETTING.
12.1 LANDLORD'S CONSENT REQUIRED. Tenant shall not voluntarily or by
operation of law assign, mortgage, sublet, or otherwise transfer or encumber all
or any part of Tenant's interest in this Lease or in the Property or Tenant's
possession thereof without Landlord's prior written consent. Any attempted
assignment, transfer, mortgage, encumbrance or subletting without Landlord's
consent shall be void and shall constitute a breach hereof. No term or provision
contained below in this Section 12 shall be deemed to limit Landlord's absolute
right to withhold consent to any proposed transfer or encumbrance of Tenant's
interest in Landlord's absolute discretion and for any reason whatsoever. If
Tenant desires to assign this Lease or to sublet the Property or any portion
thereof, it shall first notify Landlord of its desire to do so and
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shall submit in writing to Landlord; (i) the name of the proposed assignee or
subtenant; (ii) the nature of the proposed assignee's or subtenant's business to
be conducted on the Property; (iii) the terms of the proposed assignment or
sublease; and (iv) such financial information as Landlord may reasonably request
concerning the proposed assignee or subtenant.
12.2 NO RELEASE OR WAIVER. Regardless of Landlord's consent, no
subletting or assignment shall release Tenant from Tenant's obligation or alter
the primary liability of Tenant to pay the rent and to perform all other
obligations to be performed by Tenant hereunder. The acceptance of rent by
Landlord from any other person shall not be deemed to be a waiver by Landlord of
any provision hereof. Consent to one assignment or subletting shall not be
deemed consent to any subsequent assignment or subletting. In the event of
default by any assignee of Tenant or any successor of Tenant in the performance
of any of the terms hereof, Landlord may proceed directly against Tenant without
the necessity of exhausting remedies against said assignee. Landlord may consent
to subsequent assignments or subletting hereof or amendments or modifications to
this Lease with assignees of Tenant, without notifying Tenant, or any successor
of Tenant, and without obtaining its or their consent thereto and such action
shall not relieve Tenant of liability hereunder.
12.3 EFFECT OF TRANSFER. The voluntary or other surrender hereof by
Tenant or a mutual cancellation hereof shall not work a merger of the interests
of the parties hereunder and shall, at the option of Landlord, terminate any or
all subleases or subtenancies or shall operate as an assignment to Landlord of
such subleases or subtenancies. If Tenant is a corporation, unincorporated
association or partnership, the transfer, assignment or hypothecation of any
stock or interest in such corporation, association or partnership in the
aggregate in excess of twenty-five percent (25%) or resulting in a change in
management control shall be deemed an assignment within the meaning and
provisions of this Section 12.
12.4 ATTORNEY'S FEES. In the event Tenant shall assign or sublet the
Property or request the consent of Landlord to any assignment or subletting or
if Tenant shall request the consent of Landlord for any act Tenant proposes to
do, then Tenant shall pay Landlord's reasonable attorney's fees and costs
incurred in connection with each such request.
12.5 RIGHT OF RECAPTURE. At any time within thirty (30) days after
Landlord's receipt of the information specified in Section 12.1 above, Landlord
may, by written notice to Tenant, elect (i) to sublease the Property or the
portion thereof proposed to be subleased by Tenant, or to take an assignment of
Tenant's estate hereunder or such part thereof as shall be specified in said
notice, on the same terms and conditions as those contained in said notice; or
(ii) to participate with Tenant in any payments (including, but not limited to,
rent, security deposit and operating expenses) received by Tenant from any
assignee or subtenant in excess of the payments made by Tenant to Landlord
hereunder, which election shall entitle Landlord to fifty percent (50%) of such
excess, which shall be paid to Landlord within five (5) days after receipt by
Tenant. If Landlord does not exercise either of the options set forth in this
Section 12.5 within said thirty (30) day period, Tenant may within ninety (90)
days after the expiration of said thirty (30) day period enter into a valid
assignment or sublease of the Property or portion thereof upon the terms and
conditions set forth in the notice furnished by Tenant to
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Landlord pursuant to Section 12.1 above, subject, however, in each instance, to
Landlord's consent as set forth in Section 12.1 above.
13. DEFAULTS; REMEDIES.
13.1 DEFAULTS. The occurrence of any one or more of the following
events shall constitute a material default and breach hereof by Tenant:
(a) The vacating or abandonment of the Property by Tenant;
(b) The failure by Tenant to make any payment of rent or any
other payment required to be made by Tenant hereunder, as and when due, where
such failure shall continue for a period of three (3) days after written notice
thereof from Landlord to Tenant. In the event that Landlord serves Tenant with a
notice to pay rent or vacate pursuant to applicable unlawful detainer or other
statutes, such notice shall also constitute the notice required by this
subsection;
(c) The failure by Tenant to observe or perform any of the
covenants, conditions or provisions hereof to be observed or performed by
Tenant, other than described in Subsection (b) above, where such failure shall
continue for a period of thirty (30) days after written notice thereof from
Landlord to Tenant; provided, however, that if the nature of Tenant's default is
such that more than thirty (30) days are reasonably required for its cure, then
Tenant shall not be deemed to be in default if Tenant commences such cure within
said thirty (30) day period and thereafter diligently prosecutes such cure to
completion;
(d) (i) The making by Tenant of any general arrangement or
assignment for the benefit of creditors; (ii) Tenant becomes a "debtor" as
defined under the Federal Bankruptcy Code or any successor statute thereto or
any other statute affording debtor relief, whether state or federal, (unless, in
the case of a petition filed against Tenant, the same is dismissed within thirty
(30) days), or admits in writing its present or prospective insolvency or
inability to pay its debts as they mature, or is unable to or does not pay a
material portion (in numbers or dollar amount) of its debts as they mature;
(iii) the appointment of a trustee or receiver to take possession of all or a
substantial portion of Tenant's assets located at the Property or of Tenant's
interest in this Lease; (iv) the attachment, execution or other judicial seizure
of all or a substantial portion of Tenant's assets located at the Property or of
Tenant's interest in this Lease; or (v) the entry of a judgment against Tenant
which affects Tenant's ability to conduct its business in the ordinary course;
provided, however, to the extent that any provision of this Subsection 13.1(d)
is contrary to any applicable law, such provision shall be of no force or effect
to such extent only; and/or
(e) The discovery by Landlord that any financial statement,
warranty, representation or other information given to Landlord by Tenant, any
assignee of Tenant, any subtenant of Tenant, any successor in interest of Tenant
or any guarantor of Tenant's obligation hereunder, in connection with this
Lease, was materially false or misleading when made or furnished.
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13.2 REMEDIES. In the event of any default or breach hereof by Tenant,
Landlord may (but shall not be obligated) at any time thereafter, with or
without notice or demand and without limiting Landlord in the exercise of any
right or remedy which Landlord may have by reason of such default or breach:
(a) Terminate Tenant's right to possession of the Property by any
lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Property to Landlord. In such event,
Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant's default, including accrued rent, the cost of
recovering possession of the Property, expenses of reletting, including
necessary renovation and alteration of the Property, reasonable attorney's fees,
and any real estate commission actually paid;
(b) Reenter and take possession of the Property and relet or
attempt to relet same for Tenant's account, holding Tenant liable in damages for
all expenses incurred by Landlord in any such reletting and for any difference
between the amount of rents received from such reletting and those due and
payable under the terms hereof. In the event Landlord relets the Property,
Landlord shall have the right to lease the Property or portions thereof for such
periods of time and such rentals and for such use and upon such covenants and
conditions as Landlord, in its sole discretion, may elect, and Landlord may make
such repairs and improvements to the Property as Landlord may deem necessary.
Landlord shall be entitled to bring such actions or proceedings for the recovery
of any deficits due to Landlord as it may deem advisable, without being obliged
to wait until the end of the term and commencement or maintenance of any one or
more actions shall not bar Landlord from bringing other or subsequent actions
for further accruals, nor shall anything done by Landlord pursuant to this
Subsection 13.2(b) limit or prohibit Landlord's right at any time to pursue
other remedies of Landlord hereunder;
(c) Declare all rents and charges due hereunder immediately due
and payable and thereupon all such rents and fixed charges to the end of the
term shall thereupon be accelerated, and Landlord may, at once, take action to
collect the same by distress or otherwise. In the event of acceleration of rents
and other charges due hereunder which cannot be exactly determined as of the
date of acceleration and/or judgment, the amount of said rent and charges shall
be as determined by Landlord in a reasonable manner based on information such as
previous fluctuations in the C.P.I. and the like;
(d) Perform any of Tenant's obligations on behalf of Tenant in
such manner as Landlord shall deem reasonable, including payment of any moneys
necessary to perform such obligation or obtain legal advice, and all expenses
incurred by Landlord in connection with the foregoing, as well as any other
amounts necessary to compensate Landlord for all detriment caused by Tenant's
failure to perform which in the ordinary course would be likely to result
therefrom, shall be immediately due and payable from Tenant to Landlord, with
interest at the Default Rate; such performance by Landlord shall not cure the
default of Tenant hereunder and Landlord may proceed to pursue any or all
remedies available to Landlord on
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account of Tenant's default; if necessary, Landlord may enter upon the Property
after ten (10) days' prior written notice to Tenant (except in the case of
emergency, in which case no notice shall be required), perform any of Tenant's
obligations of which Tenant is in default; and/or
(e) Pursue any other remedy now or hereafter available to
Landlord under state or federal laws or judicial decisions. Unpaid installments
of rent and other unpaid monetary obligations of Tenant under the terms hereof
shall bear interest from the date due at the Default Rate.
13.3 NO WAIVER. No reentry or taking possession of the Property by
Landlord shall be construed as an election on its part to terminate this Lease,
accept a surrender of the Property or release Tenant from any obligations
hereunder, unless a written notice of such intention be given to Tenant.
Notwithstanding any such reletting or reentry or taking possession, Landlord may
at any time thereafter elect to terminate this Lease for a previous default.
Pursuit of any of the foregoing remedies shall not preclude pursuit of any of
the other remedies herein provided or any other remedies provided by law, nor
shall pursuit of any remedy herein provided constitute a forfeiture or waiver of
any rent due to Landlord hereunder or of any damages accruing to Landlord by
reason of the violation of any of the terms, provisions and covenants herein
contained. Landlord's acceptance of rent or additional rent following any event
of default hereunder shall not be construed as Landlord's waiver of such event
of default. No waiver by Landlord of any violation or breach of any of the
terms, provisions, and covenants herein contained shall be deemed or construed
to constitute a waiver of any other or subsequent violation or breach of any of
the terms, provisions, and covenants herein contained. Forbearance by Landlord
to enforce one or more of the remedies herein provided upon an event of default
shall not be deemed or construed to constitute a waiver of any other or
subsequent violation or default. The loss or damage that Landlord may suffer by
reason of termination of this Lease or the deficiency from any reletting as
provided for above shall include the expense of repossession and any repairs or
remodeling undertaken by Landlord following possession. Should Landlord at any
time terminate this Lease for any default, in addition to any other remedy
Landlord may have, Landlord may recover from Tenant all damages Landlord may
incur by reason of such default, including the cost of recovering the Property
and the loss of rent for the remainder of the Lease term. Landlord's consent to
or approval of any act shall not be deemed to render unnecessary the obtaining
of Landlord's consent to or approval of any subsequent act by Tenant. The
delivery of keys to any employee or agent of Landlord shall not operate as a
termination hereof or a surrender of the Property.
13.4 LATE CHARGES. Tenant hereby acknowledges that late payment by
Tenant to Landlord of rent and other sums due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges and late charges which may be imposed on
Landlord by the terms of any mortgage or trust deed covering the Property.
Accordingly, if any installment of rent or any other sum due from Tenant shall
not be received by Landlord or Landlord's designee within ten (10) days after
such amount shall be due, then, without any requirement for notice to Tenant,
Tenant shall pay to Landlord a late charge equal to six percent (6%) of such
overdue amount. The parties hereby agree that such late charge
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represents a fair and reasonable estimate of the costs Landlord will incur by
reason of late payment by Tenant. Acceptance of such late charge by Landlord
shall in no event constitute a waiver of Tenant's default with respect to such
overdue amount nor prevent Landlord from exercising any of the other rights and
remedies granted hereunder. In the event that a late charge is payable
hereunder, whether or not collected, for three (3) consecutive installments of
rent, then rent shall automatically become due and payable quarterly in advance,
rather than monthly, notwithstanding any other provision hereof to the contrary.
The parties agree that the payment of late charges and the payment of interest
as provided elsewhere herein are distinct and separate from one another in that
the payment of interest is to compensate Landlord for the use of Landlord's
money by Tenant and the payment of late charges is to compensate Landlord for
administrative and other expenses incurred by Landlord.
13.5 INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein
provided, any amount due to Landlord not paid when due shall bear interest at
the maximum rate then allowed by law (the "Default Rate") from the date due.
Payment of such interest shall not excuse or cure any default by Tenant under
this Lease, provided, however, that interest shall not be payable on late
charges incurred by Tenant. Notwithstanding any other term or provision hereof,
in no event shall the total of all amounts paid hereunder by Tenant and deemed
to be interest exceed the amount permitted by applicable usury laws and, in the
event of payment by Tenant of interest in excess of such permitted amount, the
excess shall be applied towards damages incurred by Landlord or returned to
Tenant, at Landlord's option.
13.6 IMPOUNDS. In the event that a late charge is payable hereunder,
whether or not collected, for three (3) installments of rent or other monetary
obligation which Tenant is late in paying, Tenant shall pay to Landlord, if
Landlord shall so request, in addition to any other payments required under this
Lease, monthly advance installments, payable at the same time as the rent is
paid for the month to which it applies, in amounts required as estimated by
Landlord to establish a fund for real property tax and insurance expenses on the
Property which are payable by Tenant under the terms hereof. Such fund shall be
established to insure payment when due, before delinquency, of any or all such
real property taxes and insurance premiums. If the amounts paid to Landlord by
Tenant under the provisions of this Section 13.6 are insufficient to discharge
the obligations of Tenant to pay such real property taxes and insurance premiums
as the same become due, Tenant shall pay to Landlord, upon Landlord's demand,
additional sums necessary to pay such obligations. All moneys paid to Landlord
under this Section 13.6 may be intermingled with other monies of Landlord and
shall not bear interest. In the event of a default in the obligations of Tenant
to perform under this Lease, then any balance remaining from funds paid to
Landlord under the provisions of this Section 13.6 may, at the option of
Landlord, be applied to the payment of any monetary default of Tenant, in lieu
of being applied to the payment of real property tax and insurance premiums.
13.7 DEFAULT BY LANDLORD. Landlord shall not be in default unless
Landlord fails to perform obligations required of Landlord within a reasonable
time, but in no event later than thirty (30) days after written notice by Tenant
to Landlord and to the holder of any first mortgage or deed of trust covering
the Property, whose name and address shall have theretofore been furnished to
Tenant in writing, specifying the obligation that Landlord has failed
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to perform; provided, however, that if the nature of Landlord's obligation is
such that more than thirty (30) days are required for performance, then Landlord
shall not be in default if Landlord commences performance within such thirty
(30) day period and thereafter diligently prosecutes the same to completion.
Notwithstanding any other provision hereof, Landlord shall not be in default
hereunder for failure to perform any act required of Landlord where such failure
is due to inability to perform on account of strike, laws, regulations or
requirements of any governmental authority, or any other cause whatsoever beyond
Landlord's control, nor shall Tenant's rent be abated by reason of such
inability to perform.
14. CONDEMNATION. If the Property or any portion thereof is taken under the
power of eminent domain, or sold under the threat of the exercise of said power
(either of which is herein called "condemnation"), this Lease shall terminate as
to the part so taken as of the date the condemning authority takes title or
possession, whichever first occurs. If more than twenty percent (20%) of the
Property or such portion thereof as will make the Property unusable for the
purposes herein leased is taken by condemnation, either party may terminate this
Lease by notice to the other, in writing, only within ten (10) days after
Landlord shall have given Tenant written notice of such condemnation or pending
condemnation (or in the absence of such notice, within ten (10) days after the
condemning authority shall have taken possession), such termination to take
effect as of the date the condemning authority takes possession. If neither
party terminates this Lease in accordance with the foregoing, this Lease shall
remain in full force and effect as to the portion of the Property remaining,
except that the rent shall be reduced in the proportion that the floor area
taken bears to the total floor area of the Property and Tenant shall have no
other rights or remedies as a result of such condemnation. Any award or payment
made in connection with a condemnation shall be the property of Landlord,
whether such award shall be made in settlement of contemplated condemnation
proceedings or as compensation for diminution in value of the leasehold or for
the taking of the fee, or as severance or other damages; provided, however, that
Tenant shall be entitled to any separate award made to Tenant which does not
diminish Landlord's award, such as for loss of or damage to Tenant's trade
fixtures and removable personal property and Tenant's moving expenses. In the
event that this Lease is not terminated by reason of such condemnation, Landlord
shall, to the extent of severance damages received by Landlord in connection
with such condemnation, repair any damage to the Property caused by such
condemnation except to the extent that Tenant has been reimbursed therefor by
the condemning authority. Tenant shall pay any amount in excess of such
severance damages required to complete such repair. Landlord shall in no event
be obligated to repair or replace any items other than those installed by or at
the expense of Landlord.
15. ESTOPPEL CERTIFICATE.
15.1 CERTIFICATE. Tenant shall at any time, upon not less than ten
(10) days' prior written notice from Landlord, execute, acknowledge and deliver
to Landlord and/or any lender or purchaser designated by Landlord 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 applicable, and (ii)
acknowledging that there are not, to Tenant's knowledge, any uncured defaults on
the part of Landlord hereunder, or specifying
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such defaults if any are claimed. Any such statement may be conclusively relied
upon by any purchaser or encumbrancer of the Property.
15.2 FAILURE TO DELIVER CERTIFICATE. At Landlord's option, Tenant's
failure to deliver such statement within such time shall be a material breach by
Tenant under this Lease or shall be conclusive upon Tenant (i) that this Lease
is in full force and effect, without modification except as may be represented
by Landlord, (ii) that there are no uncured defaults in Landlord's performance,
and (iii) that no rent has been paid in advance.
15.3 FINANCIAL STATEMENTS. If Landlord desires to finance, refinance
or sell the Property, or any part thereof, Tenant hereby agrees to deliver to
any lender or purchaser designated by Landlord the past three (3) years'
financial statements of Tenant, in such detail as may be reasonably required by
such lender or purchaser. All such financial statements shall be received by
Landlord and such lender or purchaser in confidence and shall be used only for
the purposes of assessing the status of Tenant's tenancy and the value of the
Property.
16. SUBORDINATION.
(a) Tenant accepts this Lease subject to any deeds of trust,
master leases, security interests or mortgages which might now or hereafter
constitute a lien upon the Property and all renewals, extensions, modifications
and replacements thereof, and to recorded covenants and zoning ordinances and
other building and fire ordinances and governmental regulations relating to the
use of the Property. Tenant, shall at any time hereafter, on demand, execute any
instrument, releases or other documents that may be required by any mortgagee
for the purpose of subjecting and subordinating this Lease to the lien of any
such deed of trust, master lease, security interest or mortgage hereafter
constituting a lien on the Property. Tenant's failure to execute such documents
within ten (10) days after written demand shall constitute material default by
Tenant hereunder, or, at Landlord's option, Landlord shall execute such
documents on behalf of Tenant as Tenant's attorney-in-fact. Tenant does hereby
make, constitute and irrevocably appoint Landlord as Tenant's attorney-in-fact
and in Tenant's name, place and stead to execute such documents in accordance
with this Section 17. Landlord, at its sole option, shall have the right to
waive the applicability of this Section 17 so that this Lease will not be
subject and subordinate to any specific deed of trust, master lease, security
interest or mortgage.
(b) This Lease and any modification thereof is subject to the
approval of any mortgagee of the Property from time to time. Any mortgagee which
did not have a mortgage affecting the Property at the time this Lease or any
modification hereof is made will be limited as to approval rights to the extent
that such mortgagee reserves the right to disclaim responsibility for any
capital improvements to the mortgaged premises which the Landlord has agreed to
make, or covenants, contractual obligations or services which do not run with
the land. In order to further secure the indebtedness secured by any such
mortgage, Landlord and Tenant hereby covenant for themselves and for the benefit
of any such mortgagee that this Lease shall be subject and subordinate to any
mortgage now or hereafter affecting the Property and all advances made or to be
made thereunder and all renewals, extensions, modifications, consolidations or
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replacements thereof, including future advances thereunder or supplements
thereto, provided, however, that without limiting any of the foregoing, in the
event that by reason of any default on the part of Landlord the mortgagee
succeeds to the interest of the Landlord, then, at the sole option of the
mortgagee, this Lease may nevertheless continue in full force and effect and
Tenant shall and does hereby agree to attorn to such mortgagee and to recognize
such mortgagee as the Landlord in such event. Tenant hereby constitutes and
appoints Landlord and/or the mortgagee as Tenant's attorney-in-fact to execute
and deliver any such agreement of attornment for and on behalf of Tenant, and it
is further covenanted that (i) the provisions of said mortgage shall govern with
respect to the disposition of proceeds of insurance or condemnation or eminent
domain awards, and (ii) in the absence of the prior written consent of the
mortgagee, Tenant shall not prepay rent more than one (1) month in advance, or
enter into any agreement with Landlord to amend or modify this Lease, or
voluntarily surrender the Property or terminate the Lease without cause, or
surrender the Lease, or allow the release of the approved Tenant from the
obligations hereunder on assigning or subletting of the Property or any part
thereof. In the event of any act or omission by Landlord which would give Tenant
the right to terminate this Lease, Tenant shall not exercise any such right
until it shall have given thirty (30) days' written notice thereof to the
mortgagee at the address previously furnished to Tenant.
17. LANDLORD'S LIEN. In addition to the statutory landlord's lien,
Landlord shall have, at all times, a valid security interest to secure payments
of all rent, additional rent and other sums of money becoming due hereunder from
Tenant and to secure payment of any damages or loss which Landlord may suffer by
reason of the breach by Tenant of any covenant, agreement or condition contained
herein, upon all goods, wares, equipment, fixtures, furniture, improvements and
other personal property of Tenant presently or which may hereafter be situated
in the Property and all proceeds therefrom, and such property shall not be
removed therefrom without the consent of Landlord until all arrearages in rent,
as well as any and all other sums of money then due to Landlord hereunder, shall
first have been paid and discharged and all the covenants, agreements and
conditions hereof have been fully complied with and performed by Tenant. Upon
the occurrence of an event of default by Tenant, Landlord may, in addition to
any other remedies provided herein, enter upon the Property and take possession
of any and all goods, wares, equipment, fixtures, furniture, improvements, and
other personal property of Tenant situated in the Property, without liability
for trespass or conversion, and sell the same at public or private sale, with or
without having such property at the sale, after giving Tenant reasonable notice
of the time and place of any public sale or of the time after which any private
sale is to be made, at which sale the Landlord or its assigns may purchase
unless otherwise prohibited by law. Unless otherwise provided by law, and
without intending to exclude any other manner of giving Tenant reasonable
notice, the requirement of reasonable notice shall be met if such notice is
given in the manner prescribed in this Lease at least five (5) days before the
time of sale. The proceeds from any such disposition, less any and all expenses
connected with the taking of possession, holding and selling of the Property
(including reasonable attorney's fees and other expenses), shall be applied as a
credit against the indebtedness secured by the security interest granted in this
Section 17. Any surplus shall be paid to Tenant or as otherwise required by law;
and Tenant shall pay any deficiencies forthwith. Upon request of the Landlord,
Tenant agrees to execute and deliver to Tenant a financing statement in form
sufficient to perfect the security interest of Landlord in the aforementioned
property and proceeds thereof under the provisions of the Uniform Commercial
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Code in force in the State of Florida. The statutory lien for rent is not hereby
waived, the security interest herein granted being in addition and supplementary
thereto.
18. SIGNS. Tenant shall not place any sign on or about the Property without
Landlord's prior written consent.
19. NOTICES.
(a) Except as provided in subsection (b) below, any notice,
demand, request or other communication ("Notice") required or permitted to be
given hereunder shall be in writing and shall be deemed given when mailed by
certified or registered mail, postage prepaid, return receipt requested,
addressed to Tenant or to Landlord at the address noted below the signature of
such party. Notice given by any other means shall be deemed given when actually
received in writing. Either party may by notice to the other specify a different
address for Notice purposes, which shall only be effective upon receipt, except
that upon Tenant's taking possession of the Property, the Property shall
constitute Tenant's address for Notice purposes. A copy of all Notices required
or permitted to be given to Landlord hereunder shall be concurrently transmitted
to such party or parties at such addresses as Landlord may from time to time
hereafter designate by notice to Tenant.
(b) The Tenant hereby appoints as its agent to receive the
service of all dispossessory or distraint proceedings and legal notices the
person in charge of the Property at the time or occupying the Property, and if
there is no person in charge or occupying the Property, than such service or
notice may be made by attaching the same on the main entrance of the Property.
20. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS. This Lease 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.
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, Tenant
hereby acknowledges that neither the Landlord nor any of its employees or agents
has made any oral or written warranties or representations to Tenant relative to
the condition or use by Tenant of said Property, and Tenant acknowledges that
Tenant assumes all responsibility regarding the Occupational Safety Health Act,
the legal use and adaptability of the Property, and the compliance thereof with
all applicable laws and regulations in effect during the term hereof, except as
otherwise specifically stated in this Lease.
21. ATTORNEY'S FEES. If either party brings an action to enforce the terms
hereof or declare rights hereunder, the prevailing party in any such action
shall be entitled to recover reasonable attorney's and legal assistant's fees
and costs incurred in connection therewith, on appeal or otherwise, including
those incurred in arbitration, mediation, administrative or bankruptcy
proceedings and in enforcing any right to indemnity herein.
22. EASEMENTS. Landlord reserves to itself the right, from time to time, to
grant such easements, rights and dedications as Landlord deems necessary or
desirable and to cause the
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recordation of plats and restrictions, so long as such easements, rights,
dedications, plats and restrictions do not unreasonably interfere with the use
of the Property by Tenant. Tenant shall promptly sign any of the aforementioned
documents upon request of Landlord and failure to do so shall constitute a
material breach hereof.
23. FORCE MAJEURE. Whenever a period of time is herein prescribed for
action to be taken by Landlord, Landlord shall not be liable or responsible for,
and there shall be excluded from the computation for any such period of time,
any delays due to strikes, riots, acts of God, shortages of labor or materials,
war, governmental laws, regulations or restrictions or any other causes of any
kind whatsoever which are beyond the control of Landlord.
24. HOLDING OVER. If Tenant, with Landlord's consent, remains in possession
of the Property or any part thereof after the expiration of the term hereof,
such occupancy shall be a tenancy from month to month upon all the provisions
hereof pertaining to the obligations of Tenant, but all options and rights of
first refusal, if any, granted under the terms hereof, shall be deemed
terminated and be of no further effect during said month to month tenancy. If
Tenant shall hold over without Landlord's express written consent, Tenant shall
become a tenant at sufferance and rental shall be due at the higher of (1) the
then prevailing market rate as determined by Landlord in its absolute
discretion, or (2) twice the rent payable immediately prior to the expiration of
the term. The foregoing provisions shall not limit Landlord's rights hereunder
or provided by law in the event of Tenant's default.
25. LANDLORD'S ACCESS. Landlord and Landlord's agents shall have the right
to enter the Property at reasonable times for the purpose of inspecting the
same, posting notices of non-responsibility, showing the same to prospective
purchasers, lenders, or tenants, performing any obligation of Tenant hereunder
of which Tenant is in default, and making such alterations, repairs,
improvements or additions to the Property or to the building of which it is a
part as Landlord may deem necessary or desirable, all without being deemed
guilty of an eviction of Tenant and without abatement of rent, and Landlord may
erect scaffolding and other necessary structures where reasonably required by
the character of any work performed, provided that the business of Tenant shall
be interfered with as little as reasonably practicable. Tenant hereby waives any
claims for damages for any injury to or interference with Tenant's business, any
loss of occupancy or quiet enjoyment of the Property, and any other loss
occasioned thereby. For each of the aforesaid purposes, Landlord shall at all
times have and retain a key with which to unlock all of the doors in, upon and
about the Property, excluding Tenant's vaults and safes, if any, and Landlord
shall have the right to use any and all means which Landlord may deem proper to
open said doors in an emergency in order to obtain entry to the Property, and
any entry to the Property obtained by Landlord by any of said means shall not
under any circumstances be construed or deemed to be a forceable or unlawful
entry into, or a detainer of, the Property, or an eviction of Tenant from the
Property or any portion thereof. No provision hereof shall be construed as
obligating Landlord to perform any repairs, alterations or to take any action
not otherwise expressly agreed to be performed or taken by Landlord. Landlord
may at any time place on or about the Property any ordinary "For Sale" signs and
Landlord may at any time during the last one hundred twent (120) days of the
term hereof place on or about the Property any ordinary "For Lease" signs, all
without rebate of rent or liability to Tenant.
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26. QUIET ENJOYMENT. Upon Tenant paying the rent for the Property and
observing and performing all of the covenants, conditions and provisions on
Tenant's part to be observed and performed hereunder, Tenant shall have quiet
possession of the Property for the entire term hereof subject to all of the
provisions hereof.
27. LANDLORD'S LIABILITY. The term "Landlord" as used herein shall mean
only the owner or owners at the time in question of the fee title or a tenant's
interest in a ground lease of the Property, and in the event of any transfer of
such title or interest, Landlord herein named (and in case of any subsequent
transfers then the grantor) shall be relieved from and after the date of such
transfer of all liability as respects Landlord's obligations thereafter to be
performed, provided that any funds in the hands of Landlord or the then grantor
at the time of such transfer, in which Tenant has an interest, shall be
delivered to the grantee. The obligations contained in this Lease to be
performed by Landlord shall, subject to transfer of funds as aforesaid, be
binding on Landlord's successors and assigns only during their respective
periods of ownership. Tenant shall look solely to the equity of the then owner
of the Property in the Property for the satisfaction of any remedies of Tenant
in the event of a breach by the Landlord of any of its obligations. Such
exculpation of liability shall be absolute and without any exception whatsoever.
28. BINDING EFFECT: CHOICE OF LAW. Subject to any provisions hereof
restricting assignment or subletting by Tenant and subject to the provisions of
the foregoing Section 27, 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 Property is located.
29. SEVERABILITY. The invalidity of any provision hereof under applicable
law shall in no way affect the validity of any other provision hereof.
30. TIME OF ESSENCE. Time is of the essence hereof.
31. ADDITIONAL RENT; SURVIVAL. Any and all monetary obligations of Tenant
under the terms hereof shall be deemed to be rent, shall be secured by any
available lien for rent, and to the extent accrued shall survive expiration or
termination of the term hereof.
32. COVENANTS AND CONDITIONS. Each provision hereof performable by Tenant
shall be deemed both a covenant and a condition.
33. MERGER. The voluntary or other surrender hereof by Tenant, or a mutual
cancellation thereof, or a termination by Landlord, shall not work a merger, and
shall, at the option of Landlord, terminate all or any existing subtenancies or
may, at the option of Landlord, operate as an assignment to Landlord of any or
all of such subtenancies.
34. GUARANTOR. In the event that there is a guarantor hereof, said
guarantor shall have the same obligations as Tenant under this Lease.
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35. SECURITY MEASURES. Tenant hereby acknowledges that the rental payable
to Landlord hereunder does not include the cost of guard service or other
security measures, and that Landlord shall have no obligation whatsoever to
provide same. Tenant assumes all responsibility for the protection of Tenant,
its agents and invitees from acts of third parties.
36. AUTHORITY. If Tenant is a corporation, trust, or general or limited
partnership, each individual executing this Lease on behalf of such entity
represents and warrants that he or she is duly authorized to execute and deliver
this Lease on behalf of said entity, and Tenant shall, within fifteen (15) days
after execution hereof, deliver to Landlord evidence of such authority
satisfactory to Landlord.
37. CONSTRUCTION. Any conflict between the printed provisions hereof and
the typewritten or handwritten provisions shall be controlled by the typewritten
or handwritten provisions. Headings used herein shall not affect the
interpretation hereof, being merely for convenience. The terms "Landlord" and
"Tenant" shall include the plural and the singular and all grammar shall be
deemed to conform thereto. If more than one person executes this Lease, their
obligations shall be joint and several. The use of the words "include,"
"includes" and "including" shall be without limitation to the items which may
follow.
38. AUCTIONS. Tenant shall not conduct, nor permit to be conducted, either
voluntarily orinvoluntarily, any auction upon the Property without first having
obtained Landlord's prior written consent.
39. CAPTIONS. The parties mutually agree that the headings and captions
contained in this Lease are inserted for convenience or reference only, and are
not to be deemed part of or used in construing this Lease.
40. ARBITRATION. In the event of any dispute between the Landlord and
Tenant with respect to any issue specifically mentioned in this Lease as a
matter to be decided by arbitration, such dispute shall be determined by
arbitration in accordance with the laws of the State of Florida dealing with
arbitration, or in the absence of such laws, the rules of the American
Arbitration Association. The decision resulting from the arbitration shall be
binding, final and conclusive on the parties and a decision thereon may be
entered by a court having jurisdiction.
41. RADON GAS DISCLOSURE. The following language is required by law in any
contract involving the sale or lease of any building within the State of
Florida:
"RADON GAS: Radon is a naturally occurring radioactive gas that, when
it has accumulated in a building in sufficient quantities, may present
health risks to persons who are exposed to it over time. Levels of
radon that exceed federal and state guidelines have been found in
buildings in Florida. Additional information regarding radon and radon
testing may be obtained from your county public health unit."
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42. ENVIRONMENTAL COMPLIANCE.
(a) Tenant shall not use, generate, manufacture, produce, store,
release, discharge or dispose of, on, under or about the Property, or transport
to or from the Property, any Hazardous Substance (as defined below), or allow
any other person or entity to do so. Tenant shall keep and maintain the Property
in compliance with, and shall not cause or permit the Property to be in
violation of, any Environmental Laws (as defined below).
(b) Tenant shall give prompt notice to Landlord of (i) any
proceeding or inquiry by any governmental authority (including without
limitation the Florida Environmental Protection Agency or Florida Department of
Health and Rehabilitative Services) with respect to the presence of any
Hazardous Substance on the Property or the migration thereof from or to other
property; (ii) all claims made or threatened by any third party against Tenant,
Landlord or the Property relating to any loss or injury resulting from any
Hazardous Substance; and (iii) Tenant's discovery of any occurrence or condition
on any real property adjoining or in the vicinity of the Property that could
cause the Property or any part thereof to be subject to any restrictions on the
ownership, occupancy, transferability or use of the Property under any
Environmental Law or any regulation adopted in accordance therewith.
(c) Tenant shall protect, indemnify and hold harmless Landlord,
its directors, officers, employees, agents, successors and assigns from and
against any and all loss, damage, cost, expense or liability (including
attorneys' fees and costs) directly or indirectly arising out of or attributable
to the use, generation, manufacture, production, storage, release, threatened
release, discharge, disposal, transport or presence of a Hazardous Substance on,
under, about, to or from the Property, including without limitation all
foreseeable consequential damages and the costs of any necessary repair, cleanup
or detoxification of the Property, in any way arising from the acts of Tenant.
(d) "Environmental Laws" shall mean any federal, state or local
law, statute, ordinance or regulation pertaining to health, industrial hygiene,
or the environmental conditions on, under or about the Property, including
without limitation the Comprehensive Environmental Response Compensation and
Liability Act of 1980, as amended from time to time ("CERCLA"), 42 U.S.C.
Sections 9601 et seq., and the Resource Conservation and Recovery Act of 1976,
as amended from time to time ("RCRA"), 42 U.S.C. Sections 6901 et seq. The term
"Hazardous Substance" shall include without limitation: (i) those substances
included within the definition of "hazardous substances," "hazardous materials,"
"toxic substances," or "solid waste" in CERCLA, RCRA, and the Hazardous
Materials Transportation Act, 49 U.S.C. Sections 1801 et seq., and in the
regulations promulgated pursuant to said laws; (ii) those substances defined as
"hazardous wastes" in any Florida Statute and in the regulations promulgated
pursuant to any Florida Statute; (iii) those substances listed in the United
States Department of Transportation Table (49 CFR 172.101 and amendments
thereto) or by the Environmental Protection Agency (or any successor agency) as
hazardous substances (40 CFR Part 302 and amendments thereto); (iv) such other
substances, materials and wastes which are or become regulated under applicable
local, state or federal law, or which are classified as hazardous or toxic under
federal, state or local laws or regulations; and (v) any material, waste or
substance which is (1) petroleum, (2) asbestos, (3)
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polychlorinated biphenyls, (4) designated as a "hazardous substance" pursuant to
Section 311 of the Clean Water Act, 33 U.S.C. Sections 1251 et seq., or listed
pursuant to Section 307 of the Clean Water Act, (5) flammable explosive, or (6)
radioactive materials.
(e) Landlord shall have the right to inspect the Property and
audit Tenant's operations thereon to ascertain Tenant's compliance with the
provisions of this Lease at any reasonable time, and Tenant shall provide
periodic certifications to Landlord, upon request, that Tenant is in compliance
with the environmental restrictions contained herein. Landlord shall have the
right, but not the obligation, to enter upon the Property and perform any
obligation of Tenant hereunder of which Tenant is in default, including, without
limitation, any remediation necessary due to environmental impact of Tenant's
operations on the Property, without waiving or reducing Tenant's liability for
Tenant's default hereunder.
(f) All of the terms and provisions of this Section 42 shall
survive expiration or termination of this Lease for any reason whatsoever.
LANDLORD AND TENANT HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM
AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND TENANT WITH RESPECT TO THE
PROPERTY.
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DYNAMIC HEALTH PRODUCTS, INC.
By: /s/ KOTHA X. XXXXXXXX
--------------------
Print name: KOTHA X. XXXXXXXX Its : President
Date: OCTOBER 1, 1999
Address:
0000 Xxxxx Xxxxx Xxxx
Xxxxx, Xxxxxxx 00000
TENANT:
INNOVATIVE HEALTH PRODUCTS, INC.
By: /s/ XXXXX X. XXXXXX
------------------
Print name: XXXXX X. XXXXXX Its : Chief Executive Officer
Date: OCTOBER 1, 1999
Address:
0000 Xxxxx Xxxxx Xxxx
Xxxxx, Xxxxxxx 00000
