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EXHIBIT 10(b)(ii)
ADDENDUM TO LEASE
This Addendum to Lease ("Addendum") is made and entered into as of the 1st day
of February, 1996, by and among Xxxx X. Xxxxxxxx, as Ancillary Trustee for the
First National Bank of Chicago as Trustee, (hereinafter called "Lessor"),
Medical High Technology International, Inc., a Florida corporation,
(hereinafter called "Lessee"), Universal Medical Systems, Inc., a Nevada
corporation, (hereinafter called "Guarantor").
Recitals:
WHEREAS: Lessee entered into a Lease dated May 7, 1987, with R. F.
Properties, Limited, as Lessor, for the lease of that certain parcel of real
property and improvements located thereon described as "A 40,000 square foot
building on Lot 7 (4.33 acres) in the Xxxxx ICOT Center" (hereinafter sometimes
referred to as the "premises");
WHEREAS: On or about April 21, 1988, the interest of Lessor in the
leased property or premises was sold, transferred and conveyed to First
National Bank of Chicago, As Trustee, and
WHEREAS: Lessor and Lessee now desire to amend, modify and change
certain terms and provisions of the Lease by entering into this Addendum to
Lease.
NOW, THEREFORE, in consideration of the mutual covenants of the
respective parties, as herein provided, Lessor, Lessee and Guarantor agree as
follow:
1. Amendment of Lease. The Lease dated the 7th day of May,
1987, is hereby amended, changed and modified as set forth herein:
A. Rental Period. The term of the lease shall be for a
period of five (5) years which term will commence on the 1st day of February,
1996, and shall continue until midnight on the 31st day of January, 2001.
B. Rental. During the first year, commencing on February
1, 1996, Lessee shall pay as rent to the Lessor the sum of Two Hundred
Forty-Four Thousand Four Hundred Dollars ($244,400). Said rental shall be
payable in regular monthly payments of Twenty Thousand Three Hundred Sixty-Six
and 66/100 Dollars ($20,366.66) per month, payable the first day of each month
in advance, commencing February 1, 1996.
In addition to the monthly rent, Lessee agrees to pay all sales or use
taxes required on the rental payments, if any. It is hereby agreed that if any
installment of rent or any other sum due from Lessee is not received by Lessor
within ten (10) days after such amount shall be due, Lessee shall pay to Lessor
a late charge equal to six percent (6%) of such overdue amount. Rental
payments shall be delinquent if not paid within ten (10) days
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of the date due. Rental for the years beginning February 1, 1997, shall be
increased each year by three percent (3%).
C. Waiver of Landlord's Lien. In the event that Lessee
finances its business in any manner during the term of the Lease, including but
not limited to any line of credit, term loan, letter of credit, or financing of
the purchase of equipment, furniture, or fixtures to be located and used on the
leased property, and a lender requests the Lessor to subordinate its statutory
landlord's lien, or security or pledge as described in paragraph "Lessor's
Property" on page 10 of the Lease, to such financing, the Lessor shall comply
with such request and shall execute and deliver, without undue delay, any
requested documents related to such subordination.
D. Release of Guaranties. The Guaranties of Xxxxxx X.
Xxxxxxx, Xxxxxx X. Xxxxxx and Xxxxx Xxxxxx Xxxxx are hereby released, revoked
and cancelled.
E. Reaffirmation of Terms of Lease. Except as amended,
changed or modified as set forth herein, the terms and provisions of the Lease
originally dated the 7th day of May, 1987, are hereby reaffirmed.
2. Cancellation, Termination and Release of Promissory Note,
Security Agreement, UCC-1 Financing Statements and Stipulated Judgment.
Lessor hereby cancels, terminates and releases: (a) the Promissory Note
executed by Lessee, as "Borrower", dated June 1, 1994, in the original
principal amount of $339,696.88, (b) the Security Agreement executed by Lessee,
as "Debtor", dated June 1, 1994, which secures the aforementioned promissory
note, (c) the UCC-1 Financing Statement filed in the Office of the Clerk of
Pinellas County, Florida on July 11, 1994 in OFF. REC. BK. 8723, XX 0000, (x)
the UCC-1 Financing Statement filed in the Office of the Florida Secretary of
State on July 20, 1994, as document number 940000146450, and (e) any stipulated
judgement executed by Lessee for the benefit of Lessor. Lessor hereby agrees to
promptly deliver to Lessee the original Promissory Note marked cancelled or
terminated, copies of executed terminations of the UCC-1 Financing Statements
filed in the Office of the Clerk of Pinellas County, Florida and Office of the
Florida Secretary of State, and any stipulated judgment marked cancelled,
terminated or released.
3. Additional Rent or Penalty Rent. Lessee agrees to timely pay
all rental payments on the due date for each payment but, in any event, not
later than within the ten (10) day grace period as described in paragraph 1B
above. Lessor and Lessee agree that in the event Lessee defaults in the timely
payment of rental payments and Lessee fails, after appropriate notice, to cure
the default by paying Lessor the rental payment or payments and applicable late
charge or charges, Lessee will be liable to Lessor for Additional Rent or
Penalty Rent in the amount of $275,000, which amount shall be reduced (or
reverse amortize) each and every month for a period of twenty-four (24) months
by the amount of $11,458.33 for each month that Lessee makes payment of the
applicable monthly amount. At the end of twenty-four (24) months the entire
$275,000 Additional Rent or Penalty Rent shall be fully reverse amortized and
be reduced to zero.
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4. Issuance and Delivery of Shares of Preferred Stock of
Universal Medical Systems, Inc. to Lessor. Universal Medical Systems, Inc., a
Nevada corporation, ("UMSI") agrees to cause to have issued and delivered to
Lessor, on or before February 29, 1996, one hundred thousand (100,000) shares
of preferred stock of UMSI. These shares of preferred stock shall have the
following rights and privileges:
A. Each share of preferred stock shall have a stated
value of $3.00, but shall have no guaranteed dividend or interest.
B. The holders of preferred stock shall have the same
voting rights at all meetings of shareholders of UMSI as the holders of common
shares of stock of UMSI.
C. The preferred shares of stock may be converted to
shares of common stock of UMSI when any one of the following events occurs:
(i) At any time after the common shares of stock
of UMSI are trading at $6.00 per share over ten (10) consecutive trading days.
(ii) At any time UMSI authorizes the conversion of
the preferred shares of stock to common shares of stock.
(iii) One year following the date of issuance, all
remaining shares of preferred stock, not already converted to shares of common
stock of UMSI, automatically shall be converted to shares of common stock of
UMSI.
(iv) In all cases, the number of shares of UMSI
common stock to be issued pursuant to the above described conversion options
shall be determined based upon the average bid price for shares of common stock
of UMSI over the fifteen (15) trading days prior to the conversion date. For
example if the average bid price over the fifteen (15) trading days prior to
the conversion date is $1.00 per share, then each share of preferred stock
would be converted into three (3) shares of common stock; if the average bid
price is $3.00 per share, then each share of preferred stock would be converted
into one (1) share of common stock.
(v) UMSI shall have the right to repurchase, or
redeem, all of the 100,000 shares of preferred stock, or any common shares to
which they may be converted, at a price of $300,000 at any time for a period of
twenty-four (24) months from the date of issuance. In the event UMSI exercises
this right to repurchase or redeem upon payment of $300,00, then the Additional
Rent or Penalty Rent provision described in paragraph 3, shall be terminated
and the amount of $275,000 shall be deemed fully reverse amortized.
5. Guaranty by Universal Medical Systems, Inc. Lessor agrees and
acknowledges that the guaranties of Xxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxx and
Xxxxx
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Xxxxxx Xxxxx as set forth on page 21 of the Lease dated the 7th day of May,
1987, are released, revoked and cancelled. Universal Medical Systems, Inc.
("Guarantor") hereby unconditionally guarantees the payment and performance of
all obligations of Lessee pursuant to the Lease dated May 7, 1987, as amended
herein. The liability of the Guarantor under this Guaranty shall be primary,
direct and immediate and not conditional or contingent upon pursuit by Lessor
of any remedies it may have against the Lessee, its successors and assigns,
with respect to said lease, whether pursuant to the terms thereof or by law.
The Guarantor agrees that in the event this Guaranty shall be enforced by suit
or otherwise, the Guarantor will reimburse Lessor, upon demand, for all
expenses incurred in connection therewith, including without limitation,
attorney's fees incurred by Lessor.
6. Entire Agreement. This Addendum to Lease comprises the entire
understanding or agreement among the parties, and supersedes all previous
arrangements, agreements, understandings and representations, written or oral,
among the parties with respect to the Lease dated the 7th of May, 1987, and the
amendment or modification thereof. None of the terms of this Addendum to Lease
shall be amended or modified except in writing signed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Addendum to
Lease to be executed by their duly authorized officers or representatives all
as of the day and year first above written.
LESSOR:
/s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx, as Ancillary Trustee
for The First National Bank of Chicago, as Trustee
LESSEE:
MEDICAL HIGH TECHNOLOGY INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, President
GUARANTOR:
UNIVERSAL MEDICAL SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, Chairman & CEO
