LEASE AGREEMENT
THIS LEASE AGREEMENT made and entered into this 19th day of
December, 1997, by and between Eden Roc, a California
corporation, hereinafter referred to as the "Landlord", and
Paradigm Medical Industries, a Delaware corporation, hereinafter
referred to as the "Tenant":
WITNESSETH
ARTICLE 1. PREMISES AND TERM. Landlord hereby leases and
by these presents does lease and demise to the Tenant, and the
Tenant does lease and take from the Landlord, the premises
described on Exhibit "B" attached hereto, consisting of
approximately 4,397 square feet of office/warehouse space, the
"Demised Premises", situated in the building erected on the
property described on Exhibit "A" attached hereto, together with
all the easements, rights, privileges and appurtenances thereunto
belonging or in any way appertaining to the Demised Premises.
TO HAVE AND TO HOLD the said Demised Premises, together
with all and singular the improvements, appurtenances, rights,
privileges and easements thereunto belonging to or in anywise
appertaining, unto Tenant for a three (3) year term commencing as
of January 1, 1998, and continuing thereafter to and including
the date December 31, 2000, subject, however, to extension and
renewal as hereafter provided.
ARTICLE 2. CONSTRUCTION OF IMPROVEMENTS. Landlord agrees,
at Landlord's sole cost and expense, to construct a building and
other improvements, containing the Demised Premises, in
accordance with the preliminary plans and specifications prepared
by Tenant, copies of which have been attached hereto and
incorporated herein as Exhibit "B", and initialed by the parties,
which plans and specifications the parties have carefully
reviewed and specifically approved.
ARTICLE 3. OBLIGATIONS OF TENANT AND LANDLORD.
3.1 Real Property Taxes. Tenant shall pay, within ten (1O)
days front the date Landlord submits to Tenant a statement
setting forth the amount due Landlord under the provisions of
this paragraph, Tenant's proportionate share of the real property
taxes and assessments on the Demised Premises as additional rent
hereunder. Tenant's proportionate share of such taxes and
assessments shall be determined by multiplying the total amount
of such taxes and assessments by a fraction, the numerator of
which is the floor area of the Demised Premises and the
denominator of which is the total floor area of the building or
buildings being assessed. Tenant shall pay one-twelfth (1/12) of
Tenant's proportionate share of the estimated annual taxes in
advance each month in addition to the minimum rental payment due
hereunder Landlord shall pay all taxes, and assessments lawfully
levied or assessed against the building or buildings or any part
thereof, provided, however, that Landlord may, dispute and
contest the same Tenant may, at its sole cost and expense, after
it has paid in full its proportionate share of any taxes or
assessments due hereunder, upon fifteen (15) days prior written
notice to Landlord, contest with the appropriate governmental
authority such tax or assessment. Tenant shall be entitled to
any refund of any tax or penalty paid by Tenant, or paid by
Landlord and reimbursed by Tenant to Landlord. (See Lease Rider
"A" Building Expenses attached hereto and incorporated herein.)
3.2 Personal Property Taxes. Tenant shall additionally
pay, when due, all personal property taxes and license fees
levied and assessed against the Demised Premises during the term
of this Lease. Nothing contained in this Lease shall require or
be construed to obligate the Tenant to pay any franchise, excise,
corporate, estate, inheritance, succession, capital levy or
transfer tax of the Landlord, or any income, profits or revenue
tax upon the income of the Landlord; provided, however, that in
any case where a tax may be levied, assessed or imposed upon
Landlord for the privilege of renting or leasing the Demised
Premises or which is based upon the rental revenue derived
therefrom, Tenant shall pay to Landlord as additional rent
hereunder the amount of said tax, but in no event shall the
Tenant be obligated to pay an amount greater than that which
would be payable if the Demised Premises were the only asset of
the Landlord.
3.3 Tenant's Insurance. The Tenant shall, during the entire
term of this Lease, at the Tenant's sole cost and expense, but
for the mutual benefit of the Landlord and Tenant, maintain
general public liability insurance against claims for personal
injury, death or property damage occurring upon, in or about the
entire property described on Exhibit "B" attached hereto and on,
in or about the adjoining streets and passageways, such insurance
to afford protection to the limit of not less than $1,000,000 in
respect to injury or death to a single person, and to the limit
of not less than $2,000,000 in respect to any one accident, and
to the limit of not less than $250,000 in respect to property
damage or a combined single limit policy not less than $1,000,000
per occurrence. All policies shall name Landlord and the
mortgages of the property as an additional named insured, as
their interest may appear.
Tenant shall also provide insurance coverage to the extent
of the full replacement value covering all of Tenant's property,
fixtures, equipment, tools, improvements, stock, goods, wares or
merchandise, that it may have in or on or about the Demised
Premises.
Other forms of insurance may be reasonably required to
cover future risks against which a prudent Tenant would protect
itself.
All policies of insurance provided for herein shall be
issued by insurance companies with a general policy holder's
rating of not less than A and a financial rating of AAA, as rated
in the most current available "Best's Guide" Insurance Reports,
and qualified to do business in the state of Utah.
The policies for the foregoing insurance shall provide that
the proceeds thereof shall be payable to the Tenant and to the
Landlord, as their respective interests may appear. Said
required Tenant insurance coverage shall be verified to the
Landlord by an insurance carrier in the form of either a
certified copy of the policy or other written verification of
insurance coverage acceptable to Landlord and the lending
institution for the Demised Premises Such insurance policies
shall provide that Landlord be given thirty (30)days written
notice prior to any cancellation or alteration of any policy.
To the extent that Tenant fails to provide the foregoing
insurance, either hazard or liability, Tenant shall be
responsible to Landlord, as his interest appears, for such damage
that would have been insured by said policies but for Tenant's
failure to obtain such insurance.
3.4 Landlord's Insurance, Subject to Tenant's
reimbursement, Landlord shall provide fire, lightning, and
extended coverage ("all risk") insurance and such additional
insurance coverage as may be required by Landlord's mortgagee
(including "loss of rents" insurance) on the building, of which
the Demised Premises is a part, for the full replacement value
thereof or such value as is required by Landlord's mortgagee,
whichever is greater, against such loss. Tenant shall reimburse
Landlord, as additional rental hereunder, for Tenant's
proportionate share (determined in the same manner as Tenant's
proportionate share of taxes and assessments herein above) of the
costs of the insurance premium therefor within ten (10) days from
the date Landlord submits to Tenant a statement setting forth the
amount due Landlord under the provisions of this paragraph,
Tenant agrees that it will not at any time, during the term of
this Lease, carry any stock of goods or do anything in or about
the demised Premises which will in any way tend to increase the
insurance rates upon the building of which the Demised Premises
are a pari. In addition to Tenant's proportionate share of the
costs of insurance premiums as described herein, Tenant agrees to
pay to Landlord forthwith upon demand the amount of any increase
in premiums for insurance against loss by the that may be charged
during the term of this Lease on the amount of insurance to be
carried by Landlord on the building of which the Demised Premises
are a part resulting from the foregoing or from Tenant doing any
act in or about said Demised Premises which does so increase the
insurance rates, whether or not the Landlord shall have consented
to such act on the part of Tenant. If Tenant installs upon the
Demised Premises any electrical equipment which constitutes an
overload on the electrical lines of the Demised Premises, Tenant
shall at its own expense make whatever changes are necessary to
comply with the requirements of the insurance underwriters,
nothing herein contained shall be deemed to constitute Landlord's
consent to such overloading. Tenant shall pay 1/1 2 of Tenant's
proportionate share of the estimated annual building insurance
premium in advance each month along with the minimum rental
payment. (See Lease Rider "A" Building Expenses attached hereto
and incorporated herein.)
3.5 Subrogation. Landlord and any other tenants of the
building shall not be liable to Tenant or anyone claiming by,
through or under Tenant, including an insurance carrier or
carriers, for any insurable loss or damage, and no such carriers
shall have the right to subrogate against Landlord, or any other
Tenant. All of the insurance policies required hereunder
pertaining to the Demised Premises shall contain an endorsement
by the respective insurance carriers waiving any and all rights
of subrogation against Landlord, and any other tenant of the
building, a copy of which endorsement or endorsements, or
evidence thereof by way of certificate shall be furnished to the
Landlord.
3.6 Assumption of Risk, Anything herein to the contrary
notwithstanding, after the commencement of the term as provided
in Article 1, the Tenant assumes full risk of damage to its
property, fixtures, equipment, tools, improvements, stock, goods,
wares or merchandise, that it may have in or on or about the
Demised Premises, resulting from fire, lightning, extended
coverage perils, flood and any catastrophe, regardless of cause
or origin. The Landlord shall not be liable to Tenant or anyone
claiming by, through or under Tenant, including Tenant's
insurance carrier or carriers, for any loss or damage resulting
from fire, lightning or extended coverage perils or from an act
of God, Landlord shall not be liable to the insurance carrier for
damages insured against, either directly or by way of
subrogation.
ARTICLE 4. TENANT'S USE. The Tenant may use the Demised
Premises for conducting its medical products/general office
business. Tenant shall use the Demised Premises only for lawful
and proper purposes, which are permissible under applicable law
(including under applicable zoning laws). Tenant shall not make
any use of the Demised Premises which will cause cancellation of
any insurance policy covering the same and shall not keep or use
on the Demised Premises any article, item, or thing which is
prohibited by the terms of the hazard insurance policy covering
the improvements. Tenant shall not commit any waste upon the
Demised Premises and shall not conduct or allow any business,
activity or thing on the Demised Premises which is or becomes
unlawful, prohibited, or a nuisance or which may cause damage to
Landlord, to occupants or other tenants in the vicinity, or to
other third parties. Tenant shall comply with and abide by all
laws, ordinances, and regulations of all municipal, county, state
and federal authorities which are now in force or which may
hereafter become effective with respect to use and occupancy of
the Demised Premises. Tenant shall make no alteration or
addition to the Premises without the prior written consent of
Landlord.
Tenant represents to Landlord that neither Tenant or any
affiliates of Tenant will generate, store or dispose of any
Hazardous Substances (as defined below) at or in the area of the
Demised Premises and Property.
Tenant covenants with Landlord: a) to prohibit any
generation, storage or disposal of Hazardous Substances at the
Premises, b) to deliver promptly to Landlord true and complete
copies of all notices received by Tenant from any governmental
authority with respect to the generation, storage or disposal by
Tenant of Hazardous Substances (whether or not at the Premises);
and c) to permit entry onto the Premises by Landlord or
Landlord's representative(s) at any reasonable time to verify
Tenant's compliance with the foregoing.
Tenant agrees to indemnify and defend Landlord (with legal
counsel reasonably acceptable to Landlord) from and against any
costs, fees or expenses (including, without limitation, cleanup
expenses, third party claims and environmental impairment
expenses and reasonable attorneys' fees and expenses) incurred by
Landlord in connection with Tenant's generation, storage, or
disposal of Hazardous Substances at or near the Demised Premises
in accordance with the foregoing and with Tenant's compliance
with the foregoing representations and covenants. This
indemnification by Tenant shall survive termination or expiration
of this Lease.
"Hazardous Substances" shall mean (i) hazardous substances
as defined in the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, (ii) "PCBs", as
defined in 40 C.F.R. 761 et seq. and "TCDD" as defined in 40
C.F.R. 755 et seq. (or in either case analogous regulations
promulgated under the Toxic Substances Control Act, as amended),
(iii) "asbestos" as defined in 29 C.F.R. 1910. 1001 et seq, (or
analogous regulations promulgated under the Occupational Safety
and Health Act of 1970, as amended), and (iv) waste oils and
other petroleum hydrocarbon compounds.
In the event Tenant's business, or use of the demised
premises, should require the legal storing of barrels, drums and
other storage containers, Tenant covenants with Landlord to
provide Landlord no less often than every three (3) months with
a complete and accurate list of all storage containers, chemical
inventories and quantities. Such inventory list shall be updated
by Tenant to Landlord every quarter and certified as a true and
correct inventory.
Additionally, Tenant shall supply Landlord with a container
and contents disposal plan acceptable to Landlord or in the
alternative, a bond payable to Landlord to fund the disposal and
discardment of all chemicals and/or storage containers located on
or about the demised premises, Said bond shall be used by
Landlord in the event Tenant fails to properly dispose of such
containers and chemicals
Tenant covenants with Landlord to Store all chemical
containers in a safe and secure manner either inside the Demised
Premises or within a secured fenced area, so as not to cause a
nuisance to Landlord and other tenants in the proximity of the
Demised Premises, and to prevent tile unlawful infiltration of
chemicals and container discardment by others.
ARTICLE 5. POSSESSION. Possession of the Demised Premises
shall be delivered to the Tenant as herein provided, free and
clear of all Tenants and occupants and the rights of either .
The Demised Premises shall also be free of liens, encumbrances
and violations of laws, ordinances and regulations adversely
affecting the use and occupancy of the Demised Premises, except
those presently of record including mortgages and trust deeds and
those that may be specified herein. Tenant agrees to deliver to
the Landlord physical possession of the Demised Premises
including all keys to the Demised Premises, upon the termination
or expiration of this Lease, or any extension thereof, in as good
order, condition and state of repair as when received by Tenant,
reasonable wear and tear thereof and damage by fire, acts of God
or the elements excepted.
ARTICLE 6. RENT.
6.1 Minimum Rent. The Tenant agrees to pay the Landlord,
at such address as shall from time to time be designated by
Landlord, as minimum rental during the initial term of this Lease
without right of offset or deduction, the sum of:
01/01/98 - 01/31/98 -0-/month
02/01/98 - 12/31/98 $3,3 15.66/month - $36,472.26/11
months
01/01/99 - 12/3 1/99 $3,415.13/month - $40,981.56/year
01/01/00 - 12/31/00 $3,517.58/month - $42,210,96/year
Minimum rental shall be payable monthly, in advance,
without demand on the first day of each calendar month throughout
the Lease term. Should Tenant's occupancy of the Demised
Premises commence on any day other than on the first (1st) day of
the calendar month, the first rental shall be prorated
accordingly.
6.2 Late Penalty. Tenant shall be charged a five percent
(5%) late fee on all rental payments which are received by
Landlord more than ten (10) days after their due date. Such late
fee shall compensate Landlord for I) the costs attributable to
giving notice of delinquency, ii) the expense of servicing the
mortgage loan on landlord's Building from alternative funds; and
iii) Landlord's loss of interest. Any rental payments which are
not paid within twenty (20) days of their due date shall bear
interest thereafter at the rate of one and one-half percent
(1-1/2%) per month, or the highest rate permitted by law,
whichever is lower, until paid.
ARTICLE 7.SIGNS. With the prior written approval of
Landlord, which approval shall not be unreasonably withheld,
Tenant shall have the right and privilege to place on the
building or Demised Premises signage necessary for the operation
of Tenant's business. Such sign installation shall not adversely
affect or damage the physical structure of the building, nor
detract from the overall harmony of the building and the Metro
Business Park development. All such signs must conform with the
codes and regulations of West Valley City and adhere to the
signage criteria for the development. Tenant shall have the use
of the existing monument sign currently used by WHN and Maxim
Technologies,
Upon the expiration or termination of the lease, the Tenant
shall remove all signage installed by Tenant and repair any
damaged areas on the building or Demised Premises caused thereby,
to a condition acceptable to the Landlord,
ARTICLE 8. ALTERATIONS AND IMPROVEMENTS. Tenant shall have
the right, subject to Landlord's prior written approval, to make
non-structural alterations, additions, or improvements
(hereinafter collectively referred to as "improvements") to the
interior of the Demised Premises. Said improvements and
additions shall be accomplished at Tenant's sole cost and expense
and shall be made in compliance with all building codes and
ordinances, laws, and regulations applicable to the Demised
Premises. Tenant shall cause all improvements to be accomplished
in a good workmanlike manner using the same quality and finish to
match existing, Landlord shall have the right, but not the
obligation, to require Tenant's removal of said improvements at
the expiration or termination of the Lease, including restoration
of the Demised Premises, to its original state of improvement,
configuration, etc.
Tenant shall keep the Premises free from any liens arising
out of any work performed, material furnished or obligation
incurred by or for Tenant or any person or entity claiming
through or under Tenant. In the event that Tenant shall not,
within sixty (60) days following the imposition of any such lien,
cause the same to be released by payment or posting of a bond,
Landlord shall have the right, but not the obligation, to cause
such lien to be released by such means as Landlord deems proper,
including payment of the claim giving rise to such lien, All such
sums paid and all expenses incurred by Landlord in connection
therewith shall be due and payable to Landlord by Tenant as
additional rent within fifteen (15) days of Tenant's receipt of
Landlord's invoice.
ARTICLE 9. FIXTURES AND PERSONAL PROPERTY. All fixtures
(not including trade fixtures) installed or attached to the
Demised Premises by and/or at the expense of Tenant shall become
the property of Landlord. Any trade fixtures installed in the
Demised Premises by and at the expense of the Tenant shall remain
the property of the Tenant or Tenant's trade fixture Lessors, and
the Landlord agrees that so long as Tenant is not in default
hereunder, Tenant or its Lessors shall have the right at any time
to remove any and all of its trade fixtures which it may have
stored or installed in the Demised Premises. Landlord expressly
agrees to waive or subordinate any claim which Landlord may or
might have against the trade fixtures and personal property of
Tenant in favor of a Lessor who intends to Lease any of the same
to Tenant. Tenant shall be required, at the expiration or
termination of this Lease Agreement or any extension or renewal
thereof, to remove any and all of its trade fixtures which it may
have stored or installed in the Demised Premises. Tenant will
repair all damage to the Demised Premises occasioned by such
trade fixture removal. If Tenant shall holdover beyond lease
expiration or lease termination, with Landlord's approval of such
holdover, for removal of fixtures and equipment (not to exceed
ten (10) days), Tenant shall pay to the Landlord as rental
therefore, a sum equal to the prorata portion of the previous
monthly rental thereof. In the event Tenant has not completed the
removal of its fixtures and equipment and restoration of the
Premises caused thereby, within the ten (10) day period following
the expiration or termination of the lease, Landlord shall, in
Tenant's behalf and at Tenant's sole and exclusive expense, cause
such fixtures and equipment to be removed and the Premises to be
restored. Upon completion, the cost of said removal and
restoration, plus twenty percent (20%) for overhead and profit,
including prorated rental for the period of time required to
accomplish such, shall be passed on to Tenant for Tenant's
payment to Landlord,
ARTICLE 10. UTILITIES. The Tenant shall pay for all
water, heat, gas, electricity, and other costs of utilities
connected with, consumed, or used by it in connection with its
occupancy of the Demised Premises. In the event that one or more
of such utilities or related services shall be supplied to the
Demised Premises and to one or more other Tenants within the
development without being individually metered or measured to the
Demised Premises, Tenant's appropriate proportionate share
thereof shall be paid as additional rent based upon Landlord's
estimate of Tenant's anticipated usage. In the event any utility
service to the Demised Premises is interrupted or temporarily
discontinued for any reason whatsoever, Landlord shall not be
liable therefor to Tenant and the rent required to be paid
hereunder shall not be abated as a result thereof, and Tenant
waives any claims it might otherwise have against Landlord as a
result of any such interruption or discontinuation.
ARTICLE 11. MAINTENANCE AND REPAIRS. It is understood and
agreed that the Landlord shall, at its sole cost and expense,
keep and maintain, during the term of the Lease Agreement or any
extension or renewal thereof, the foundations, and structural
support portion of the improvements, including the structural
portions of the roof, in proper condition and in a good state of
repair. Landlord shall not be responsible for any maintenance or
repair caused by the fault or neglect of the Tenant, or due to
hazards and risks covered or required to be covered by insurance
hereunder except as insurance proceeds are available therefor.
All other maintenance and repair of said structure, including,
but not limited to, painting of walls, and maintenance, repair
and replacement of equipment, shall be the responsibility of the
Tenant. Any repairs or maintenance required to the roof
membrane, or any repainting of the exterior walls, shall be
accomplished by the Landlord and reimbursed by the Tenant as a
common area maintenance expense as further defined herein.
It is understood and agreed that should either party to
this Agreement fail or refuse to start and to proceed thereafter
with due diligence to make any repairs or maintenance as may be
reasonably necessary for the purpose of fulfilling the terms and
conditions of the agreements herein set forth within a reasonable
length of time (not to exceed seven (7) days) after being
notified in writing of the need thereof, that the other party
hereto may make such repairs at the cost and expense of the party
so failing or refusing. In the event of an emergency situation,
Tenant may, in its discretion, make emergency repairs without
giving written notification to Landlord, and Landlord shall
reimburse Tenant in the event that such repairs were the
responsibility of the Landlord hereunder and were not due to the
fault of Tenant or Tenant's agents. The rights of Tenant
hereunder specifically do not include the right to offset or
deduct any amounts claimed hereunder from rentals due.
Landlord reserves the right to enter upon the Demised
Premises (in a manner that will not unnecessarily interfere with
the business of Tenant) during business hours at any time to
inspect the same and to make necessary repairs to fulfill
Landlord's obligation hereunder.
ARTICLE 12. RESTORATION OF DAMAGE. If the Demised
Premises are partially damaged by fire, the elements or other
casualty covered by the "all risk" insurance policy referred to
herein above, Landlord shall promptly repair all damage and
restore the Demised Premises to their condition immediately prior
to the occurrence of such damage. During the period of
reconstruction referred to above, rent payable by Tenant shall
ratably xxxxx, based upon the percentage of the Demised Premises
usable during reconstruction. The term of the Lease shall extend
one additional day for each day the entire Demised Premises are
not usable due to the reconstruction process.
If the Demised Premises shall be totally destroyed and/or
shall it be determined that more than one hundred eighty (180)
days will be required to repair or rebuild the Demised Premises,
both Landlord and Tenant shall have the right to terminate this
Lease Agreement upon written notice to the other within thirty
(30) days of the occurrence at which time this Lease Agreement
shall become null and void.
ARTICLE 13. EMINENT DOMAIN. If, during the term hereof,
or any renewal term, the entire Demised Premises shall be taken
for any public or quasi-public use under any governmental law,
ordinance or regulation, or by right of eminent domain, this
Lease and all right, title and interest of Tenant hereunder shall
cease and come to an end on the date of vesting of title pursuant
to such proceeding, or upon the date Tenant is dispossessed under
an order of immediate occupancy, whichever first occurs. If less
than all of the Demised Premises shall be taken for any public or
quasi-public use under any governmental law, ordinance or
regulation, or by right of eminent domain, this Lease shall not
terminate, but the rent payable hereunder during the unexpired
portion of this Lease shall be reduced to such extent as may be
fair and reasonable under all of the circumstances. In any
taking of the Demised Premises or any part thereof, whether or
not this Lease is terminated as provided in this Paragraph, the
parties hereto may claim and shall be entitled to receive an
award or compensation therefor in accordance with their
respective legal rights and interests.
ARTICLE 14. DEFAULT IN PAYMENT OR RENT OF ABANDONMENT. In
the event of default by Tenant in the performance of its
obligation to pay rent hereunder, or in the event Tenant shall
vacate or abandon the Demised Premises, or in the event Tenant,
or any guarantor hereunder, shall be adjudicated as bankrupt for
the benefit of creditors, or enter into an arrangement or
participate voluntarily or involuntarily in any bankruptcy or
related proceeding under Federal or State Law, Landlord shall
have the right to terminate this Lease and to re-enter the
Demised Premises or any part thereof with or without process of
law@ or Landlord, at his option, without terminating this Lease,
shall have the right to re-enter the Demised Premises and sublet
the whole or any part thereof, for the account of the Tenant,
upon as favorable terms and conditions as the market will allow.
In the latter event, the Landlord shall have the right to collect
any rent which may thereafter become payable under such sublease
and to apply the same first to the payment of any expenses
incurred by the Landlord in the dispossessing the Tenant and in
subletting the Demised Premises, and Landlord may charge interest
at the rate equal to one percentage point higher than the prime
bank rate of Key Bank of Utah in Salt Lake City, which rate shall
vary front time to time as the prime bank rate varies, per annum
on such expenses; and, second, to the payment of the rental
herein reserved and the fulfillment of Tenant's covenants
hereunder, and the Tenant shall be liable for amounts equal to
the installments of rent as they become due, less any amounts
actually received by the Landlord and applied on account of
rental as aforesaid. The Landlord shall not be deemed to have
terminated this Lease by reason of taking possession of the
Demised Premises unless written notice of such termination has
been served on the Tenant.
ARTICLE 15. OTHER DEFAULTS BY TENANT. It is mutually
agreed that if the Tenant shall default in performing any of the
terms or provisions of this Lease Agreement other than as
provided in the preceding Article, and if the Landlord shall give
to the Tenant notice in writing of such default, and if the
Tenant shall fail to cure such default within fifteen (15) days
after the date of receipt of such notice, or if the default is of
such a character as to require more than fifteen (15) days to
cure, and if Tenant shall fail to use reasonable diligence in
curing such default, then in such applicable event the Landlord
may cure such default for the account of and at the cost and
expense of Tenant, plus interest at the rate equal to one
percentage point higher than the prime bank rate of Key Bank of
Utah, in Salt Lake City, which rate shall vary from time to time
as the prime bank rate varies, per annum, and the sum so expended
by the Landlord and interest shall be deemed to be additional
rent and on demand shall be paid by the Tenant on the day when
rent shall next become due and payable. Failure to pay any
additional rent as provided in this Article shall be deemed a
failure to pay rent within the meaning of Article 14.
ARTICLE 16. QUIET ENJOYMENT. Landlord represents and
warrants that it has full right and authority to enter into this
Lease, Tenant, upon paying all rentals and performing all the
Tenant's covenants, terms and conditions in this Lease Agreement,
shall and may peaceably and quietly hold and enjoy the Demised
Premises for the term of this Lease Agreement. Tenant
understands that other persons and entities conduct businesses or
reside near the Demised Premises. Tenant covenants and agrees to
conduct its business in such a manner as to not unreasonably
interfere with the occupants of surrounding properties.
ARTICLE 17. WAIVER. No delay or omission by either party
hereto to exercise any right or power accruing upon any
non-compliance or default by the other party with respect to any
of the terms hereof shall impair any such right or power to be
construed to be a waiver thereof Subject to the provisions of
this Article, every such right and power may be exercised at
anytime during the continuance of such default. It is further
agreed that a waiver by either of the parties hereto of any of
the covenants and agreements hereof to be performed by the other
shall not be construed to be a waiver of any succeeding breach
thereof or of any other covenants or agreements herein contained.
ARTICLE 18. ATTORNEY'S FEES. In the event of any action
at law or in equity between Landlord and Tenant to enforce any of
the provisions and/or rights hereunder or to recover damages for
breach hereof, the unsuccessful party to such litigation
covenants and agrees to pay to the successful party all costs and
expenses, including reasonable attorney's fees, incurred therein
by such successful party, and if such successful party shall
recover judgment in any such action or proceeding, such costs and
expenses and attorney's fees shall be included in and as a part
of such judgment.
ARTICLE 19. NOTICES. Any notices or demand required or
permitted to be given under this Lease Agreement shall be deemed
to have been properly given when, and only when, the same is in
writing and has been deposited in the United States Mail, with
postage prepaid, to be forwarded by certified mail and addressed
as follows:
TO THE LANDLORD AT: Xxxx Xxx
c/o Xxxxx Xxxx Investments LLC
Property Management Company
X.X. Xxx 000000
Xxxx Xxxx, Xxxx 00000-0000
000-000-0000
TO THE TENANT AT: Xxxxxxx Xxxxxxx
1127 West 0000 Xxxxx, Xxxxx X
Xxxx Xxxxxx Xxxx, Xxxx 00000
000-000-0000
Such addresses may be changed from time to time by either party
by serving notices as above provided.
ARTICLE 20. SUBORDINATION. This Lease shall be subject and
subordinate to all mortgages or trust deeds which may now or
hereafter affect the real property comprising the Demised
Premises, and also to all renewals, modifications, consolidations
and replacements of said mortgages and Trust Deeds. Although no
instrument or act on the part of Tenant shall be necessary to
effectuate such subordination; Tenant will, nevertheless, execute
and deliver in a prompt and diligent manner such further
instruments confirming such subordination of this Lease as may be
desired by the holders of said mortgages or Trust Deeds.
ARTICLE 21. ASSIGNMENT AND SUBLEASING. With the specific
prior written consent of Landlord first obtained, Tenant can, at
any time, assign this Lease or sublet all or any portion of tile
Demised Premises. Landlord's consent shall not be unreasonably
withheld, Any purported assignment or sublease without Landlord's
prior written approval shall be null and void and of no force and
effect whatsoever.
ARTICLE 22. SCOPE OF THE AGREEMENT. This Lease Agreement
shall be considered to be the only agreement between the parties
hereto. All negotiations and oral agreements acceptable to both
parties are included therein.
ARTICLE 23. OBLIGATIONS OF SUCCESSORS. Landlord and
Tenant agree that all of the provisions hereof are to be
construed as covenants and agreements as though the words
importing such covenants and agreements were used in each
separate paragraph hereof, and that all of the provisions hereof
shall bind and inure to the benefit of the parties hereto, and
their respective heirs, legal representatives, successors and
assigns.
ARTICLE 24. HOLD OVER. If, at the expiration or termination
of this Lease or any extension thereof, Tenant shall hold over
for any reason, if Landlord consents to the holding over, the
tenancy of Tenant thereafter shall be from month to month only
and shall, in the absence of a written agreement to the contrary,
be subject to all the other terms and conditions of this Lease
with the monthly rental adjusted to One Hundred Fifty Percent
(150%) of the monthly rental for the last month of the primary
Lease term or subsequent Lease renewal term.
ARTICLE 25. PARKING. The plans and specifications for the
construction of the Demised Premises, as approved by the parties,
depict adjacent parking for the non-exclusive use of Tenant.
Such parking and maintenance thereof shall remain under the
control of Landlord (subject to reimbursement of common area
maintenance as hereinafter set forth) and Landlord shall have the
right from time to time to publish reasonable nondiscriminatory
regulations for Tenant's use of the parking, with which
regulations Tenant covenants to comply.
ARTICLE 26. METRO BUSINESS PARK DEVELOPMENT. The parties
acknowledge that Exhibit "A" hereto contains a proposed site plan
for Landlord's entire construction project to be known as
(hereinafter referred to as the "Development"). Tenant
acknowledges that the site plan for the Metro Business Park
Development is subject to change and that Landlord may construct
the Development in a totally different configuration or may not
develop certain portions. During or after construction of the
Development, Landlord reserves the right to sell the Development
or portions thereof as developed with buildings or as undeveloped
property. The parties understand that in the event of Landlord's
sale of portions of the property developed as an integral part of
the Development, prior to such sale, Landlord shall place cross
easement, access and parking easements, suitable to Landlord upon
released and unreleased portions of the Development to facilitate
its continued integral use. Common Area Maintenance provisions
contained in the next immediate paragraphs of this Lease shall be
unaffected by any such partial sale and the Landlord shall
exercise his best efforts to ensure the parking and common areas
of the entire Development, as built, will be under common
management.
ARTICLE 27. COMMON AREAS. Areas within the outer property
lines of the Development as delineated on the plat attached
hereto marked Exhibit "A", exclusive of areas therein specified
or as built for leasing to Tenants shall be known as Common
Areas, as shall all other areas from time to little designated by
Landlord for use as part of the Development. Landlord covenants
and agrees at its sole cost and expense to improve said Common
Areas by installing and constructing tilereon parking lots,
access roads, pedestrian walkways, sidewalks, exterior canopies,
delivery and landscaped areas and lighting facilities to the
extent to which Landlord shall determine to be necessary. Said
Common Areas shall be available for the common use of all
Landlord's Tenants in the Development, their employees, customers
and invitees. Notwithstanding anything elsewhere herein
contained, Landlord reserves the right from time to time to make
reasonable changes in, additions to and deletions from the Common
Areas and the purposes to which the same may be devoted, and the
use of Common Areas shall at all times be subject to such
reasonable rules and regulations as may be promulgated by
Landlord.
ARTICLE 28. Landlord will maintain or cause to be
maintained the Common Areas and Tenant will reimburse Landlord
for Tenant's prorata share of the cost of such maintenance as
hereinafter provided,(a)Common area maintenance costs and
expenses shall be determined in accordance with generally
accepted accounting principles consistently applied and allocated
to any particular calendar year on the accrual method of
accounting. Such costs and expenses shall include, but shall not
be limited to upkeep, exterior painting, repairs, replacements
and improvements in the Common Areas, snow removal, sweeping and
cleanup, depreciation allowance on any machinery and equipment
owned by Landlord and used in connection therewith, payroll and
payroll costs, utility services including fire line water service
charges, police protection, night watchmen, premiums for public
liability, property damage and fire insurance including the
Common Areas, any real estate tax and/or tax consultant expense
incurred for the purpose of maintaining equitable tax assessments
on the Development, all property taxes or assessments levied or
assessed against all Common Areas, which, if not separately
assessed, shall be determined, far land, by the ratio of land
area designated for Common Area use to the total land area in the
Development and, for improvements, on a fair and equitable
allocation among the various improvements ill the Development,
giving weight to the factors which determine the amount of the
real property tax or assessment in question. In addition, such
costs shall include administrative costs equal to ten percent
(10%) of the total cost paid or incurred by Landlord under this
paragraph.
(b)Tenant shall pay as additional rent to Landlord, Tenant's
prorata share of such Common Area expenses in the following
manner:
(1)From and after the date the Minimum rental provided for
herein has commenced, but subject to adjustment as hereinafter in
this subparagraph (1) provided, Tenant shall pay Landlord in
advance on the first day of each calendar month during the term
of this Lease an estimated and adjustable amount covering
Tenant's proportionate share of common area services and
expenses, which amount may be adjusted by Landlord by notice to
Tenant at the end of any calendar month on the basis of
Landlord's experience and reasonably anticipated costs. (See
Lease Rider "A" attached hereto and incorporated herein.)
(2)Within thirty (30) days following the end of each
calendar year, Landlord shall furnish Tenant a statement covering
the calendar year just expired, showing the total operating
costs, the amount of Tenant's prorata share of such Common Area
expenses for such calendar year and the payments made by Tenant
with respect to such calendar year as set forth in subparagraph
(b) 1. If Tenant's prorata share of such Common Area expenses
exceeds Tenant's payments so made, Tenant shall pay Landlord the
deficiency within ten (10) days after receipt of such statement.
If said payments exceed Tenant's prorata share of such Common
Area expenses, Tenant shall be entitled to offset the excess
against payments next thereafter to become due Landlord as set
forth in said subparagraph (b) 1. Tenant's pro-rata share of the
total Common Area expenses for the previous calendar year shall
be that portion of all such expenses which is equal to the
proportion which the number of square feet of gross leasable area
in the Demised Premises bears to the total number of square feet
of gross leasable area of buildings in the entire Development
which are from time to time completed and occupied as of the
commencement of each calendar year.
There shall be appropriate adjustment of Tenant's share of
the Common Area expenses as of the commencement and expiration of
the term of this Lease. The term "Gross Leasable Area", as used
herein, shall be deemed to mean and include all fully enclosed
areas for the exclusive use and occupancy by occupant, measured
front the exterior surface of exterior walls (and from the
extensions thereof, in the case of openings), including
warehousing or storage areas, clerical or office areas,
mezzanines or the second levels of any spaces and employee areas.
"Gross Leasable Area" shall not include docks, areas for truck
loading and unloading nor any utility and/or mechanical equipment
vaults or rooms (to the extent such facilities lie outside
exterior building lines).
Anything to the contrary notwithstanding, in the event
Landlord or his designated agent do not maintain the entire
common area in the Development, then and in that event, for the
length of time such condition may exist, Landlord's
responsibility shall only be towards the maintenance and repair
of those portions of the Common Area not maintained by others,
and the "expense in connection with said common areas" shall only
refer to such areas maintained by Landlord, In this event,
Tenant's proportionate share of the expenses shall be determined
on the basis of the proportion of such expenses which the number
of square feet of gross leasable area in the Demised Premises
bears to the total number of square feet of gross leasable area
of buildings in the entire Development which are from time to
time completed and occupied as of the commencement of each
calendar year, exclusive of the area occupied and maintained by
others.
ARTICLE 29. SECURITY DEPOSIT. Tenant shall pay an amount
equal to last months rent at the time of signing of this Lease.
The amount equal to last months rent shall be held by Landlord as
security for the faithful performance of Tenant throughout the
Lease term, The security deposit shall be refundable to Tenant at
the end of the Lease term upon Tenant's satisfactory performance
throughout the Lease term.
ARTICLE 30. FORCE MAJEURE. In the event that either party
hereto shall be delayed or hindered in or prevented from the
performance of any act required hereunder by reason of strikes,
lockouts, labor troubles, inability to procure materials, failure
of power, restrictive governmental laws or regulations, riots,
insurrection, war or other reason of a like nature not the fault
of the party delayed in performing work or doing acts required
under the terms of this Lease, then performance of such act shall
be excused for the period of the delay and the period for the
performance of any such act shall be extended for a period
equivalent to the period of such delay. The provisions of this
Section shall not operate to excuse Tenant from prompt payment of
rent or any other payments required by the terms of this Lease.
ARTICLE 31. ESTOPPEL CERTIFICATE. Within ten (10) days
after request therefor by Landlord, or in the event that upon any
sale, assignment or hypothecation of the demised premises and/or
the land thereunder by Landlord, an estoppel statement shall be
required from Tenant. Tenant agrees to deliver to any proposed
mortgagee or purchaser, or to Landlord, in recordable form a
certificate certifying (if such be the case) that this Lease is
in full force and effect and that there are not defenses or
offsets thereto, or stating those claimed by Tenant
LEASE ARTICLE 32. LEASE RENEWAL OPTION. Landlord hereby
grants Tenant the right and option to renew this Lease Agreement
for one (1) successive three (3) year Lease renewal term under
the same Lease covenants and conditions as stated herein,
including the rental adjustment, as stated below. Should Tenant
desire to renew this Lease, Tenant must notify Landlord in
writing stating Tenant's intent to renew this Lease at least one
hundred twenty (120) days prior to the expiration of the base
Lease term. Tenant must also be current under all Lease
covenants and conditions for any Lease renewal right to be
effective and valid.
Year 1 $3,623.11 /month - $43,477.32/year
Year 2 $3,731.80/month - $44,781,60/year
Year 3 $3,843.75/month - $46,125.00/year
ARTICLE 33. The submission of this Lease for examination
does not constitute a reservation of or option for the Lease
Premises and this Lease becomes effective as a Lease only upon
execution and delivery thereof by Landlord to Tenant.
IN WITNESS WHEREOF, the Landlord and Tenant have duly
executed and affixed their respective seals to this Lease
Agreement on the day and year first above written.
LANDLORD: Eden Roc,
a California partnership
Xxxx Xxxxxxx
V.P. of S-PM, Inc.
Landlord's agent
TENANT: Paradigm Medial Industries, Inc.
a Delaware corporation
Xxxxxxx Xxxxxxx
President & CEO
Attached hereto and incorporated herein:
Lease Rider "A" - Building Expenses
Lease Rider "B" - Lease Guarantee
Exhibit "A" - Site Plan
Exhibit "B1" - Floor Plan
Exhibit "B2" - New Construction Plan
Exhibit "B3" - Floor Covering Plan
LEASE RIDER "A"
"BUILDING EXPENSES"
With reference to Tenant's appropriate proportionate share
of property tax, insurance expenses and common area service
expenses as defined in the Lease Agreement, Tenant hereby agrees
to pay, as additional monthly rental, Five Hundred Twenty Five
Dollars and No Cents ($525.00) to be paid monthly, in advance,
along with the monthly rental previously stated in Lease ARTICLE
6. Minimum Rent. The above stated fee is an estimated and
adjustable fee for such expenses and services. At the end of
each calendar year, Landlord shall furnish a statement to Tenant
defining what the actual tax, insurance and common area expenses
are for the calendar year just expired, stating what Tenant's
appropriate proportionate share of such expenses are and compare
such to that amount which has been prepaid by Tenant. If
Tenant's proportionate share of such expenses exceeds Tenant's
payments so made, Tenant shall pay Landlord the deficiency within
ten (10) days after receipt of said statement. If Tenant's
prepaid payments exceed Tenant's proportionate share of such
expenses, the excess shall be applied against future payments for
such expenses.
Landlord's Initials Tenant's Initials
