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EXHIBIT 10.31
LEASE AGREEMENT
THIS LEASE made this 1st day of November,1997, by and between Doctors
Practice Management, Inc., "Lessor" and Kirkwood Medical Associates, "Lessee."
WITNESSETH:
Lessor leases to Lessee, and Lessee leases from Lessor, approximately
9200 square feet, at 0000 X Xxxxx Xxxx, Xxxxxxxx, Xxxxx, as further outlined on
the floor plan attached hereto as Schedule I (the "premises") which are located
in the Vista building (the "building"), on the following terms and conditions:
1. TERM AND RENTAL. The term of this Lease shall
commence on November 1, 1997, and continue until the date one (1) year
thereafter ( such period called the "Initial Term") Thereafter, this Lease
shall automatically renew for four (4) successive one (1) year periods (each
period being called a "Renewal Term"), unless earlier terminated in accordance
with Section 18. Rent shall be payable in monthly installments of Eleven
Thousand Five Hundred Dollars ($11,500.00) during the initial term and any
renewal term of this lease. The monthly installments are payable in advance on
the first of each month to Lessor at 0000X Xxxxx Xxxx, Xxxxxxxx, Xxxxx 00000 or
at such other address as Lessor shall designate in writing.
Lessee shall pay a late fee $100 if any monthly installment of rent is
not received by Lessor within ten (10) days after its due date. Lessee shall
pay $50.00 for each returned check in addition to any late fees. Late fees and
returned check charges are strictly enforced and constitute a default if not
paid.
2. UTILITIES. Lessor shall pay for water, electricity
and sewer. Lessee agrees not to hold the Lessor responsible for any
interruption in service or loss or inconvenience due to equipment or utilities
failure.
3. USE OF PREMISES. Lessee shall use the premises
exclusively for medical practice and no other purposes. The use of the
premises is a major condition of this lease no other use may be made of the
premises without prior written consent of the lessor which consent will not be
unreasonably withheld. The Premises (and/or the land upon which, or the
Building in which, the Leased Premises are contained) are not subject to any
form of ground lease.
4. INSURANCE AND LIABILITIES. Lessor and its employees
and agents shall not be liable to Lessee or to Lessee's employees, agents
customers and invitees, or to any other persons for any injury to such persons
or for any damage to personal property caused by an act, omission, or neglect
of Lessee is a part. Lessee agrees to indemnify and hold Lessor and its
employees and its agents harmless from any and all claims for such injury and
damages, whether the injury occurs on or off premises.
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Lessee agrees during the term hereof to carry a broad form
comprehensive policy of public liability insurance covering the Demised
Premises in an amount of not less than $500,000 combined single limit personal
injury and property damage insurance with companies satisfactory to Lessor in
the name of Lessee (with Lessor and manager, and, if requested by Lessor, any
mortgagee, trust deed holder, ground lessor or secured party with a substantial
interest in this Lease and/or the building named as additional insurers in the
policy or by endorsement). Lessee also agrees to pay the premiums therefore
and to deliver copies of said policies and/or endorsements thereto to Lessor,
and the failure of Lessee to either obtain said insurance or deliver copies of
said policies or certificates thereof to Lessor shall permit Lessor to procure
said insurance and pay the requisite premiums therefor, which premiums shall be
repayable to Lessor with the next monthly rental payment. Each insurer under
the policies required hereunder shall agree by endorsement on the policy issued
by it or by independent instrument furnished to Lessor that will give Lessor no
less than ten (10) days written notice before the policy or policies in
question shall be altered or canceled. All such insurance policies shall be
primary, noncontributing and shall contain cross-liability coverage or an
endorsement. The amounts of such insurance required hereunder shall be subject
to adjustment from time to time as requested by Lessor based upon Lessor's
determination as to the amounts of such insurance generally required at such
time for comparable tenants, premises and buildings in the general geographical
location of the Property or as requested by any ground lessor or lender with an
interest in the Property or property on which the Property is situated. Lessor
shall, during the term of this Lease, procure and keep in force the following
insurance: (i) "all risk" property insurance, including, without limitation,
boiler and machinery (if applicable); (ii) sprinkler damage; (iii) vandalism,
malicious mischief; and (iv) demolition. Such insurance shall be in the full
amount of the replacement cost of the Land and/or the Building in which the
Leased Premises are situated, and Lessee's improvements and alterations with
reasonable deductible amounts. Such insurance shall also include rental income
insurance as may be required by any mortgagee or any mortgage covering the
Leased Premises, including that one hundred percent (100%) of the rent (as the
same may be adjusted hereunder) will be paid to Lessor for a period of up to
twelve (12) months if the Leased Premises are destroyed or damaged. Further,
Lessor shall procure comprehensive general liability (Lessors Risk) insurance
against any and all claims for bodily injury, death or property damage
occurring in or about the Leased Premises, the Land or the Building. Such
insurance shall have a combined single limit of not less than five hundred
thousand dollars ($500,000) and such other insurance as Lessor reasonably deems
necessary and prudent. It is understood that such insurance shall not cover
Lessee's equipment, trade fixtures, inventory fixtures or personal property
located in the Leased Premises. All such policies shall contain an express
waiver, in favor of Lessee, of any right of subrogation by the insurer.
5. KEYS. Lessor shall provide Lessee with two keys to
each lock. All copies of keys are to be made through Lessor who shall provide
keys at cost. In the event keys are lost, Lessee shall pay the cost of
re-keying the lock and replacing all existing keys. Lessee shall promptly
report any lost keys to Lessor. At the end of the lease all keys shall be
returned to Lessor.
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6. POLICE SECURITY. Lessee has examined the locks on
the premises and knows of no defects. Lessee agrees that protection against
criminal action is not within the power of the Lessor. If Lessor provides
security service, it cannot be relied on by Lessee and such service shall not
constitute a basis for liability in any manner for wrongful actions by others
against Lessee, its employees, agents, customers, and invitees.
LESSEE HEREBY AGREES AND ACKNOWLEDGES THAT LESSOR SHALL HAVE NO DUTY TO PROVIDE
ANY SECURITY SERVICES TO LESSEE. LESSEE SHALL LOOK SOLELY TO THE PUBLIC POLICE
FORCE FOR PROTECTION.
7. MAINTENANCE AND REPAIRS. Lessor shall maintain the
building including the walls, roof, common areas, lighting, and HVAC in good
repair. However, Lessor shall not be required to do any maintenance occasioned
by the acts or negligence of Lessees, its employees, agents, customers, and
invitees, and whenever such damage occurs, the repairs shall be paid by Lessee.
Lessee agrees to give Lessor written notice of any needed repairs and Lessor
agrees to make repairs within a reasonable time. Lessee acknowledges receipt of
the premises in good repair and clean condition. Any exceptions must be
recorded in writing and delivered to Lessor upon execution of this Lease.
8. ALTERATIONS, EQUIPMENT AND FURNISHINGS. Lessee shall
make no alterations without written consent of the Lessor, such consent not to
be unreasonably withheld. Any alterations shall become the property of the
Lessor at the end of the lease. All equipment or other items installed by
Lessee shall remain property of the Lessee. Lessee has the right to remove
same, provided Lessee is not in default. Any damages caused by the removal
shall be paid by Lessee.
9. WAIVER OF BREACH. No assent, expressed or implied,
by the Lessor to any breach of any lease term or condition, shall be deemed to
be a waiver of any succeeding breach.
10. DAMAGE BY FIRE OR OTHER CASUALTIES. If the premises
are made untenantable by fire or casualty not caused by Lessee, its employees,
agents, customers or invitees, the rent shall xxxxx for the affected area(s)
during repairs. The provision shall not extend the term of the lease or render
the Lessor liable for repair. If Lessor decides not to repair, the lease shall
end as of the date of the casualty. If Lessor decides to repair, Lessee may end
this lease if repairs will take longer than 90 days.
11. QUIET ENJOYMENT. Upon performing the terms and
conditions of this lease, Lessee shall peaceably and quietly have and enjoy the
premises during the term hereof.
12. RE-DELIVERY OF PREMISES. At the end of the lease,
Lessee shall peaceably return the premises to the Lessor in broom clean
condition and in good repair, reasonable wear and tear excepted, and in all
respects the same as they were upon delivery by the Lessor to the Lessee,
except for reasonable use. Property which remains in the premises thirty (30)
days after Lessee vacates shall be considered abandoned and at Lessor's option
shall become Lessor's property or removed at
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Lessee's expense. If Lessee has removed all or a substantial portion of
Lessee's property from the premises after a default by Lessee or notification
to Lessor that Lessee is vacating the premises, Lessor may enter the premises
to prepare the premises for re-renting without any allowance to Lessee and such
acts not change or end this lease.
13. INSPECTION OF PREMISES. Lessor, its employees and
agents may enter the premises upon reasonable notice to Lessee at reasonable
times to inspect, make repairs, show the premises or for other reasonable
purposes as long as lessor does not interrupt or interfere with the normal
operation of Lessee's business.
14. SUBORDINATION. Lessor is hereby irrevocably vested
with full power and authority to subordinate this lease to any mortgage, deed
of trust, or other lien hereafter placed on the premises and Lessee agrees on
demand to execute such further instruments subordinating this lease as Lessor
may request, provided any subordination shall be on the condition that this
lease and the rights of Lessee shall remain in full force and effect during the
term of this lease so long as Lessee shall be in compliance with the terms of
this lease. In the event of a subordination of this Lease, Lessor shall obtain
from the holder of any such mortgage, a written agreement with Lessee to the
effect that in the event of a foreclosure or other action taken under the
mortgage by the holder thereof, this Lease and the rights of the Lessee
hereunder shall not be disturbed but shall continue in full force and effect so
long as Lessee shall not be in default hereunder.
15. SIGNS. Lessee shall erect and maintain its signs at
its expense. Signs must be removed by Lessee at the end of this lease. Damage
caused by erection, maintenance, or removal of signs shall be repaired by
Lessee. Lessee agrees that control of signs is essential to maintain aesthetic
consistency. Signs shall be subject to the prior written approval of Lessor as
to design, size, and location. Lessor shall have the option to require uniform
signs in all or a portion of the building. Lessor has the right to remove
improper signs.
16. PARKING AREA. All Lessee employees shall park in
designated employee parking spaces so as to leave the parking spaces closest to
the building available for customers.
17. SUBLEASE OR ASSIGNMENT. This lease may not be sublet
or assigned except to affiliates of Lessee, without the prior written consent
of Lessor, which consent shall not be unreasonably withheld. It is understood
that Lessor has first right of refusal in the event of any sublet.
18. TERMINATION OF LEASE. Lessor shall have the option
to end this lease if Lessee shall become insolvent, makes an assignment for the
benefit of creditors, files a petition in bankruptcy, or fails to use the
premises for a period of more than 30 days. Lessee shall have the option to
terminate this Lease effective upon any anniversary date during the Initial
Term or any Renewal Term upon sixty (60) days advance written notice to Lessor.
Lessor shall have the option to terminate this Lease effective upon any
anniversary date during the Initial Term or any Renewal Term upon sixty (60)
days advance written notice to Lessee.
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19. NOTICES. All notices shall be given by certified
mail, return receipt requested, to Lessee addressed to the Premises:
and to Lessor:
Ms. Xxxxxx Xxxxxxxx
Vice President
Doctors Practice Management, Inc.
0000X Xxxxx Xxxx
Xxxxxxxx, Xxxxx 00000
or at such other address as Lessor shall designate in writing.
20. TAXES. Lessor shall pay the real property taxes on
the building. Lessee shall pay all the taxes on its personal property, fixtures
and any building improvements made by Lessee.
21. DEFAULT. If any amount is not paid when due, or in
the case of any other default by Lessee continuing for more than 30 days after
notice, Lessor may resume possession and all or part of the premises for a term
longer or shorter than Lessee's obligation at a rent higher than stated in
Lessee's lease and recover from Lessee, the difference between the rent in the
lease and the rent received or to be received on the releasing plus any cost of
releasing. Lessor shall also have any other remedy allowed by law for
enforcing performance or for collecting damages. Lessor shall also recover all
expenses incurred by reason of default, including reasonable attorneys' fees
whether suit be brought or not. Upon default by Lessee, the monthly rent
through the end of the lease term shall become due and payable in full.
22. CONDITION OF UNIT. Lessee shall keep the premises
neat and broom clean at all times.
23. COMPLIANCE WITH LAWS AND RULES. Lessee shall, at
it's own expense, comply with all laws, ordered, and requirements of all
government entities with references to the use and occupancy of the premises.
Lessee shall comply with any rules governing the use of the building and the
premises as required by Lessor. Lessor may make reasonable changes in such
rules from time to time as deemed advisable for the safety, care and
cleanliness of the building and premises, provided same are in writing and are
not in conflict with this lease. Lessor agrees to strictly comply with all
pertinent laws, ordinances, statutes and regulations whatsoever, of any
governmental body or subdivision, incident to the Land and the Building,
including, but not limited to, the Americans With Disabilities Act. Lessor
shall indemnify Lessee with regard to violations of the foregoing caused by
Lessor.
24. LIMITATION OF LIABILITY. Any and all covenants,
undertakings, and agreements herein made on the part of Lessor are not personal
covenants, undertakings, or agreements and will not bind Lessor personally or
any assets or Lessor except Lessor's interest in the property in which the
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Demised Premises are located. All covenants, undertakings, and agreements are
made and intended for the purpose of binding only Lessor's interest in such
property. No personal liability or personal responsibility is assumed by, nor
shall at any time be asserted or enforceable against, Lessor or its agents,
beneficiaries, partners, constituent partners, shareholders, officers,
directors, or their respective heirs, administrators, legal representatives,
successors, or assigns on account of this lease or on account of any covenant,
undertaking, or agreement of Lessor in this lease, all such liability being
irrevocable and unconditionally waived by Lessee. Except as may be the result
of the negligence or willful misconduct of Lessee or Lessee's agents, Lessor
shall indemnify, hold harmless, and defend Lessee against all claims, losses or
liabilities for injury or death to any person or for damage to or loss of
property arising out of any occurrence in, on or about the Building. Such
indemnification shall include and apply to reasonable attorneys fees,
investigation costs, and other costs actually incurred by Lessee. Except for
the negligence or willful misconduct of Lessee or Lessee's agents, Lessor shall
further indemnify, defend and hold harmless Lessee from and against any and all
claims arising from any breach or default in the performance of any obligation
on the Lessor's part to be performed under the terms of this Lease. The
provisions of this paragraph shall survive any termination of this Lease with
respect to any damage, injury, death, breach or default occurring prior to such
termination.
25. DISCLAIMER OF IMPLIED WARRANTIES. IT IS EXPRESSLY
AGREED BY LESSEE, AS A MATERIAL CONSIDERATION FOR THE EXECUTION OF THIS LEASE
BY LESSOR, THAT THERE ARE, AND WERE, NO VERBAL REPRESENTATIONS, WARRANTIES,
UNDERSTANDINGS, STIPULATIONS, AGREEMENTS OR PROMISES PERTAINING TO THIS LEASE
OR THE EXPRESSLY MENTIONED WRITTEN EXTRINSIC DOCUMENTS NOT INCORPORATED IN
WRITING IN THIS LEASE AGREEMENT. LESSEE'S AGREEMENT AND COVENANT TO PAY RENT
HEREUNDER SHALL BE AND REMAIN AT ALL TIMES AN INDEPENDENT COVENANT, FULLY
ENFORCEABLE IN ACCORDANCE WITH THE TERMS OF THIS LEASE AGREEMENT. THERE ARE NO
WARRANTIES WHICH EXTEND BEYOND THOSE EXPRESSLY SET FORTH IN THIS LEASE. LESSOR
AND LESSEE HEREBY ACKNOWLEDGE THAT THEY ARE NOT RELYING UPON ANY BROCHURE,
RENDERING, INFORMATION, REPRESENTATION OR PROMISE OF THE OTHER, OR AN AGENT OR
BROKER, IF ANY, EXCEPT AS MAY BE EXPRESSLY SET FORTH IN THIS LEASE AGREEMENT.
26. LIEN. Lessor is granted an express contractual lien,
in addition to any lien provided by law, and a security interest in all
property of Lessee found on the premises to secure the compliance by Lessee
with all terms of this lease. In the event of default, upon thirty (30) days
notice, Lessor or its agents may peaceably enter the premises and remove all
property and dispose of same as Lessor shall see fit.
27. AGREEMENT. This lease constitutes the full agreement
of the parties and supersedes any prior written or verbal understandings. No
amendment or dates subsequent to the date hereof. In case any one or more of
the terms of this lease are held invalid or unenforceable, such invalidity
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or unenforceability shall not affect any other terms and this lease shall be
constructed as if such unenforceable or invalid terms had never been contained
herein.
28. DISPUTE RESOLUTION. In the event of a dispute
between Lessor and Lessee and Lessee as to any provisions of this lease other
than the failure of Lessee to pay rent as provided herein, Lessor and Lessee
agree to resolve such disputes through binding Mediation or alternative Dispute
Resolution procedures. Each party shall be responsible for its own legal fees
and cost.
29. BROKERS. Lessee warrants that it has had no dealings
with any real estate broker or agent in connection with the negotiation of this
lease, excepting only Lessor and that he knows of no other real estate broker
or agent who is or might be entitled to a commission in connection with this
lease.
30. SPECIAL PROVISIONS. The following Exhibits are
attached hereto and incorporated herein by reference:
See Attachments: EXHIBIT A : Equipment, Furniture and Fixtures
EXHIBIT B : Telephone Equipment
EXECUTED as of the date hereinabove first set forth.
LESSOR: LESSEE:
DOCTORS PRACTICE MANAGEMENT, INC. KIRKWOOD MEDICAL ASSOCIATES
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxx Xxxxxxxx, D.O.
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Printed Name: Xxxxxx Xxxxxxxx Printed Name: Xxx Xxxxxxxx, D.O.
Title: Vice President
By: /s/ Xxxxxx Xxxxxxxx, D.O.
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Printed Name: Xxxxxx X. Xxxxxxxx, D.O.
By: /s/ Xxxx Xxxxxxxx, D.O.
---------------------------------
Printed Name: Xxxx Xxxxxxxx, D.O.
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EXHIBIT A
EQUIPMENT, FURNITURE AND FIXTURES. In addition to the space defined in this
agreement, Lessor agrees to rent to Lessee and Lessee agrees to rent from
Lessor, the Equipment, Furniture and Fixtures owned by Lessor for the period of
this agreement and subject to the terms contained in this agreement. Lessee
will maintain Equipment, Furniture and fixtures in good condition and upon
termination, return the equipment in good condition and repair less normal wear
and tear. The fee for the rental of Equipment, Furniture and Fixtures will be
One Thousand Four Hundred Dollars ($1,400.00) per month, due along with the
lease payment and subject to the same conditions as the lease payment.
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EXHIBIT B
TELEPHONE EQUIPMENT. In addition to the space defined in this agreement,
Lessor agrees to rent to Lessee and Lessee agrees to rent from Lessor,
Telephone Equipment which is currently installed in the "Building" for the
period of this agreement and subject to the terms contained in this agreement.
Lessee will maintain the equipment in good repair and condition and, upon
termination, return the equipment in good condition and repair less normal wear
and tear. The fee for the rental of the existing telephone equipment shall be
Five Hundred Dollars ($500.00) per month due with the lease payment and subject
to the same conditions contained in this agreement.
Lessor will continue to allow lessee reasonable and unmolested use of the
existing telephone service and its number during the term of this agreement.
It shall be understood that the service is not exclusive to the Lessee and that
the main telephone number and branches of it remain the property of the Lessor.
Lessee shall provide the necessary personnel to maintain normal service and
operation of the switchboard (operator service) during Lessees normal business
hours.
Lessee shall be responsible for its own long distance service and be
responsible for the cost of that service. Lessee shall reimburse lessor an
amount equivalent to 25% of the cost of basic telephone service (plus required
fees and taxes) as it currently exists. Changes in the level of telephone
service currently provided may be made with the concurrence of the Lessor and
Lessee.
