Exhibit 10.3
EXTENSION OF LEASE
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XXXXX X. XXXXX, being the Landlord under a certain Indenture of Lease dated
August 16, 1989, and XXXXXX X. XXXXX, having acquired an undivided 1/2 fee
interest in the premises demised under said Indenture of Lease by deed dated
February 11, 2000, (hereinafter collectively "Landlord"), and XXXXX MEDICAL
CORPORATION, Tenant under said Indenture of Lease (hereinafter "Tenant"); said
Lease having been extended by an Extension of Lease dated September 24, 1998,
the extended term of which will expire on August 31, 2001, in consideration of
the promises and covenants hereinafter set forth, hereby agree to further extend
the term of said Indenture of Lease and to create options to renew said
Indenture of Lease in accordance with the following terms and conditions:
1. The term of the Indenture of Lease shall be extended for an additional
two (2) year period commencing June 1, 2001 and expiring May 31, 2003. Upon full
execution of this Extension of Lease, the current extended term of the Indenture
of Lease shall merge into this extended term.
2. The net annual rent during said extended term shall be Three Hundred
Forty-five Thousand Seven Hundred Fifty Dollars ($345,750), payable in monthly
installments of Twenty-eight Thousand Eight Hundred Twelve Dollars and 50/100
($28,812.50) on the first day of each calendar month in advance.
3. Provided it is not then under default under the terms of the Indenture
of Lease, Tenant shall have the following options to extend the terms of the
Indenture of Lease:
a. Tenant shall have the option to extend the term of the Indenture
of Lease for an additional terms of one (1) year, commencing June 1, 2003 and
terminating May 31, 2004, upon the same terms and conditions set forth in the
original Indenture of Lease. The option is to be exercised in writing by the
Tenant giving notice to the Landlord not later than ninety (90) days prior to
the expiration of the renewal term. The net annual rental during said renewal
term shall be Three Hundred Forty-five Thousand Seven Hundred Fifty Dollars
($345,750), payable in monthly installments
of Twenty-eight Thousand Eight Hundred Twelve Dollars and 50/100 ($28,812.50) on
the first day of each calendar month in advance.
b. If Tenant shall have exercised its option set forth in subparagraph
(a), Tenant shall have an additional option to extend the term of the Indenture
of Lease for an additional term of one (1) year, commencing June 1, 2004 and
terminating May 31, 2005, upon the same terms and conditions set forth in the
original Indenture of Lease. The option is to be exercised in writing by the
Tenant giving notice to the Landlord not later than ninety (90) days prior to
the expiration of the first renewal term. The net annual rental during said
second renewal term shall be Three Hundred Forty-five Thousand Seven Hundred
Fifty Dollars ($345,750), payable in monthly installments of Twenty-eight
Thousand Eight Hundred Twelve Dollars and 50/100 ($28,812.50) on the first day
of each calendar month in advance.
c. If Tenant shall have exercised its option set forth in
subparagraph (b), Tenant shall have an additional option to extend the term of
the Indenture of Lease for an additional term of one (1) year commencing June 1,
2005 and terminating May 31, 2006 upon the same terms and conditions set forth
in the original Indenture of Lease, except that the rent shall be determined as
set forth below. The option is to be exercised in writing by the Tenant giving
notice to the Landlord not later than ninety (90) days prior to the expiration
of the renewal term.
(i) Promptly as practicable after January 1, 2005, Landlord shall
compute the increase if any in the cost of living by using the Index as defined
in Article III of the Indenture of Lease for the preceding twelve (12) month
period.
(ii) The average index number indicated for calendar year 2003 shall
be the "base index number", and the corresponding index number for calendar year
2004 shall be the "current index number".
(iii) The current index number shall be divided by the base index
number. The quotient thereof shall be multiplied by the annual net rent in
effect for the term ending May 31, 2005, and the
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product thereof shall be the net annual rent for the additional one (1) year
term commencing June 1, 2005; provided, however, that in no event shall the net
annual rent for said term be less than the net annual rent for the term ending
May 31, 2005.
(iv) The Landlord shall, within reasonable time after obtaining the
appropriate data necessary for computing such increase, give the Tenant notice
of any increase so determined, and the Landlord's computation shall be
conclusive and binding but shall not preclude any adjustment which may be
required in the event of a published amendment of the Index figures upon which
the computation was based unless the Tenant shall, within sixty (60) days after
the giving of such notice, notify the Landlord of any claimed error therein. Any
dispute between the parties as to such computation shall be determined by
arbitration as provided in subparagraph (b) (iv) of Article III of the Indenture
of Lease.
d. If Tenant shall have exercised its option set forth in
subparagraph (c), Tenant shall have an additional option to extend the term of
the Indenture of Lease for an additional term of one (1) year commencing June 1,
2006 and terminating May 31, 2007 upon the same terms and conditions set forth
in the original Indenture of Lease, except that the rent shall be determined as
set forth below. The option is to be exercised in writing by the Tenant giving
notice to the Landlord not later than ninety (90) days prior to the expiration
of the renewal term.
(i) Promptly as practicable after January 1, 2006, Landlord shall
compute the increase if any in the cost of living by using the Index as defined
in Article III of the Indenture of Lease for the preceding twelve (12) month
period.
(ii) The average index number indicated for calendar year 2004 shall
be the "base index number", and the corresponding index number for calendar year
2005 shall be the "current index number".
(iii) The current index number shall be divided by the base index
number. The quotient thereof shall be multiplied by the annual net rent in
effect for the term ending May 31, 2006, and the
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product thereof shall be the net annual rent for the additional one (1) year
term commencing June 1, 2006; provided, however, that in no event shall the net
annual rent for said term be less than the net annual rent for the term ending
May 31, 2006.
(iv) The Landlord shall, within reasonable time after obtaining the
appropriate data necessary for computing such increase, give the Tenant notice
of any increase so determined, and the Landlord's computation shall be
conclusive and binding but shall not preclude any adjustment which may be
required in the event of a published amendment of the Index figures upon which
the computation was based unless the Tenant shall, within sixty (60) days after
the giving of such notice, notify the Landlord of any claimed error therein. Any
dispute between the parties as to such computation shall be determined by
arbitration as provided in subparagraph (b) (iv) of Article III of the Indenture
of Lease.
e. If publication of the Index shall be discontinued, the parties
shall accept comparable statistics on the cost of living as they shall be
computed and published by an agency of the United States or by a responsible
financial periodical of recognized authority then to be selected by the parties,
or if the parties cannot agree upon a selection, the selection shall be
determined by arbitration as provided in subparagraph (b) (iv) of the Indenture
of Lease. In the event of (i) use of comparable statistics in place of the
Index, or (ii) publication of the Index figure at other than monthly intervals,
there shall be made in the method of computation such revisions as the
circumstances may require to carry out the intent of this paragraph, and any
dispute between the parties as to the making of such adjustment shall be
determined by arbitration as provided in subparagraph (b) (iv) of the Indenture
of Lease.
4. It is the intention of the parties that Landlord shall receive any and
all the net annual rent payable under this Extension of Lease free of all taxes,
expenses, charges, damages, and deductions of any nature whatsoever, and the
Tenant covenants and agrees to pay all sums which, except for this Lease, would
have
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been chargeable against the Premises and payable by the Landlord (other than
non-building maintenance, casualty and condemnation restoration, and any other
expense obligations of the Landlord as set forth in the Lease). The Tenant
shall, however, be under no obligations to pay principal and/or interest on any
mortgage on the fee of the leased property or any franchise or income tax
payable by the Landlord or any gift, inheritance, transfer, estate or succession
tax by reason of any present or future law which may be enacted during the term
of this Lease. All such taxes, expenses, charges, damages, and deductions which
the Tenant shall be required to pay shall be deemed additional rent and in the
event of nonpayment of the same by the Tenant, the Landlord shall have all the
rights and remedies with respect thereto as the Landlord has for the nonpayment
of rent.
5. All notices to be given hereunder shall be effective upon delivery and
shall be in writing and delivered by hand or by registered or certified mail, or
by courier, addressed to the parties at their respective addresses as
hereinafter set forth, or at such other address or addresses as a party shall
from time to time designate by notice:
As to Landlord: As to Tenant:
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Xxxxx X. Xxxxx and Xxxxx Medical Corporation
Xxxxxx X. Xxxxx 000 Xxxx Xxxxxx Xxxxx
0 Xxxxxx Xxxxx Xxx Xxxxxxx, XX 00000
Xxxx, XX 00000 Attention: Vice President, Logistics
Copy to: Copy to:
Xxxxxxx X. Xxxxx Xxxxx X. Xxx, Esq.
00 Xxxx Xxxx Xxxxxx Pepe & Hazard
X.X. Xxx 0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000 Xxxxxxxx, XX 00000
6. Except as amended herein or otherwise required to give effect to this
Extension of Lease, the terms and conditions of the Lease between the parties
dated April 16, 1989, as extended, shall remain in full force and effect.
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IN WITNESS WHEREOF, Landlord and Tenant have hereunto set their hands and
seals this 15th date of June, 2001.
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Tenant
XXXXX MEDICAL CORPORATION
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
its EVP & CFO
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