Texas-Farmers Branch-11420 Mathis Drive Sublease - Advanced Materials Inc. and Wilshire Technologies Inc.
INDUSTRIAL SUBLEASE AGREEMENT
Between
ADVANCED MATERIALS, INC.,
As Landlord,
And
WILSHIRE TECHNOLOGIES, INC.,
As Tenant
PROJECT:
11420 MATHIS DRIVE
FARMERS BRANCH, TEXAS 75234
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INDUSTRIAL SUBLEASE AGREEMENT
1. BASIC SUBLEASE INFORMATION AND CERTAIN DEFINED TERMS.
Lease Date: December 1, 1995
Tenant: WILSHIRE TECHNOLOGIES, INC., a California corporation
Tenant's Address: 5441 Avenida Encinas, Suite A
Carlsbad, California 92008
Contact: Jim Klingler Telephone: (619) 929-7200
Landlord: ADVANCED MATERIALS, INC., a California corporation
Landlord's Address: 20211 S. Susana Road
Rancho Dominguez, California 90221
Guarantor(s): N/A
Project: 11420 Mathis Drive
more specifically defined in Paragraph 2.
Description: Approximately 33,002 square feet.
Premises: As indicated by the cross-hatched area designated
"Reduction Area" on Exhibit "A1" attached to this
lease, situated in the building constituting a part
of the Project and shown on Exhibit "A2" (the
"Building") located on the land described on
Exhibit "B" attached to this lease (the "Land").
Permitted Use: Manufacturing, fabrication, assembly, warehousing and
distribution (other than retail) of foam and related
products and wound care products.
Term: 12 months, commencing on the Commencement Date
(December 1, 1995) and ending at 5:00 p.m. Pacific
time November 30, 1996, subject to adjustment and
earlier termination as provided in this Lease.
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Base Rent:
Rate Per Square Foot of
Net Rentable Area in the
Months Monthly Annual Premises Per Annum
__________________________________________________________________________
1-12 $9075.55 $108,907 $3.30
Security Deposit: $9,000
Tenant's Proportionate
Share: 33%, which is the percentage obtained by dividing
(i) 33,002 square feet, which is the net rentable
area rented by Tenant hereunder by (ii) 100,000
square feet, which is the net rentable area in the
Building rented by Landlord.
Base Year: Calendar Year 1995
Broker or Agent: N/A
Sublease: It is understood and agreed that this Lease is in
fact a sublease, and that Tenant accepts this Lease
subject to all of the terms and conditions of the
underlying lease dated as of December 1, 1995,
between New York Life and Annuity Corporation, as
landlord, and Advanced Materials Group, Inc., as
tenant (the "Underlying Lease"), a copy of which is
attached hereto and made a part hereof, under which
Landlord hereunder holds the leased premises as
tenant. Tenant herein covenants that it will do no
act or thing which would constitute a violation by
Landlord herein of its obligation under such
Underlying Lease.
Underlying Lease: The terms and conditions of Sections 2 through 36 of
the Underlying Lease are incorporated herein by this
reference, with references to any defined terms
therein being deemed in all cases to refer to such
terms as defined herein, PROVIDED, HOWEVER, that
Sections 4.C, 5, 6, 7, 8.B, 12, 13.A., 15, 16, 18, 22
and 36 are amended and restated in their entirety
herein.
Renewal Option: Landlord hereby grants to Tenant the right and option
to renew the lease on the same terms and conditions
as at each of the first two (2) anniversaries of the
Commencement
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Date (the "Renewal Option"), provided Tenant is not
then in material breach of any term of this Lease. If
exercised, the Lease will be renewed for an
additional twelve (12) month term as a result of each
such exercise, with no further renewal options unless
expressly granted by Landlord in writing. To exercise
the Renewal Option, Tenant must give Landlord written
notice of its exercise at least ninety (90) days
prior to the respective anniversary date.
4. RENT, SECURITY DEPOSIT, REIMBURSABLE EXPENSES AND ESCROW PAYMENTS.
C. In addition to Base Rent and Tenant's other obligations hereunder,
Tenant agrees to pay Tenant's proportionate share (as defined in PARAGRAPH 1)
of the following costs and expenses (collectively, the "REIMBURSABLE
EXPENSE") payable by Landlord as tenant under the Underlying Lease: (i) Excess
Common Area Charges (hereinafter defined) payable by Tenant in accordance
with PARAGRAPH 5, (ii) Excess Taxes (hereinafter defined) payable by Tenant
pursuant to PARAGRAPH 6, (iii) Excess Insurance Expenses (hereinafter
defined) payable by Tenant pursuant to PARAGRAPH 13, (iv) the cost of any
repair, replacement, or capital expenditures required under any governmental
law or regulation that was not applicable to the Building at time of original
construction, such costs to be amortized over such reasonable period as
Landlord shall determine, (v) the cost of any capital improvements made to
common areas of the Building after the date of this Lease that is required
under interpretations or regulations issued from time to time under
provisions of the Tex. Rev. Civ. Stat. Ann. Art. 9102 and/or the provisions
of the Americans With Disabilities Act of 1990, 42 U.S.C. Sections
12101-12213 (collectively, the "DISABILITY ACTS"), amortized over such period
as Landlord shall reasonably determine, together with interest at the Prime
Rate on the unamortized balance thereof, (vi) replacement reserves for
capital items and other operating expenses required by this Lease, and
(vii) Utility Payments (as such term is defined in Section 12. During each
month of the Term of this Lease, on the same day that Base Rent is due
hereunder, Tenant shall escrow with Landlord an amount equal to 1/12th of
Tenant's proportionate share of such Reimbursable Expenses, as estimated by
Landlord. Tenant authorizes Landlord to use the funds deposited with Landlord
under this PARAGRAPH 4C to pay such Reimbursable Expenses. On or before
December 31 of each calendar year during the Lease Term, or as soon
thereafter as reasonable practical, Landlord shall give Tenant written notice
of its estimate of Reimbursable Expenses for the ensuing calendar year
(provided Landlord's failure to do so shall not waive Tenant's obligations,
and until such estimate is provided the estimate of Reimbursable Expenses for
the prior year shall be used). Landlord shall be entitled to revise its
projection of such Reimbursable Expenses at any time and if Landlord so
revises such projection, Tenant shall pay to Landlord, on the same day as
Base Rent is due hereunder, an amount equal to 1/12th
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of Tenant's proportionate share of such Reimbursable Expenses pursuant to
Landlord's revised estimate thereof. By April 30 of each calendar year (or as
soon thereafter as may be reasonably practicable) during the Term hereof
Landlord shall determine the actual Reimbursable Expenses for the preceding
calendar year and shall notify Tenant thereof. If the Tenant's total escrow
payments are less than Tenant's actual proportionate share of all such
Reimbursable Expenses, Tenant shall pay the difference to Landlord within ten
(10) days after demand. If the total escrow payments of Tenant are more than
Tenant's actual proportionate share of all such Reimburseable Expenses,
Landlord shall retain such excess and credit it against Tenant's next annual
escrow payments
5. EXCESS COMMON AREA CHARGES. In addition to other amounts required
to be paid by Tenant hereunder, each calendar year (other than the Base Year)
Tenant shall pay to Landlord Tenant's proportionate share of the amount by
which the following costs and expenses (collectively, the "COMMON AREA
CHARGES") for such calendar year exceed the Common Area Charge for the Base
Year (such excess being referred to herein as the "EXCESS COMMON AREA
CHARGES") and are payable by Landlord as tenant under the Underlying Lease:
A. The cost of repair, maintenance, and replacement of: (i) exterior of
the Building (including painting), other than structural repairs and
replacements for which landlord under the Underlying Lease is responsible
pursuant to PARAGRAPH 7 of the Underlying Lease; (ii) all mechanical,
electrical, plumbing, sewer, sprinkler and other life-safety equipment and
systems forming a part of the Project (including the cost of repair,
replacement and maintenance of the items which are tenant's responsibility
pursuant to PARAGRAPH 8 of the Underlying Lease which shall be paid entirely
by tenant under the Underlying Lease as provided in PARAGRAPH 8 of the
Underlying Lease; (iii) any spur or other track servicing the Project,
including any amounts payable by Landlord in any agreement relating to such
tracks; and (iv) all other common areas and facilities constituting a part of
the Project (including, but not limited to, all paved areas surrounding the
Building).
B. The cost of maintenance and replacement of the grass, shrubbery and
other landscaping in and about the Project.
C. The cost of maintaining in a good, neat, clean and sanitary
condition all parking areas, driveways, alleys and grounds in and about the
Project (including trash removal).
D. The cost of maintaining and landscaping any property or facility that
is operated, maintained or landscaped by any property owner or community
owner association to which any of the Project is subject (including the cost
of any dues or other charges assessed by any such association).
E. The cost of operating and maintaining any property, facilities or
services provided for the common use of Tenant and other tenants of the
Project, which costs shall include, without limitation
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management fees and security (if furnished by Landlord or the landlord under
the Underlying Lease), wages and employee benefits payable to employees of
Landlord or the landlord under the Underlying Lease whose duties are
connected with the operation and maintenance of the Project, amounts paid to
contractors or subcontractors for work or services performed in connection
with the operation and maintenance of the Project, all services, supplies,
repairs, replacements and other expenses for maintaining and operating the
Project, and any other facilities or services provided for the common use of
Tenant and other tenants of the Project. "COMMON AREA CHARGES CAP. SEE
EXHIBIT "J".
6. TAXES.
A. Landlord agrees to be responsible for all taxes, assessments and
governmental charges of any kind and nature that accrue against any of the
Project (collectively referred to herein as "TAXES"). If at any time during
the Term of this Lease, there shall be levied, assessed or imposed on
Landlord or the landlord under the Underlying Lease a capital levy or other
tax directly on the rents received herefrom and/or a franchise tax,
assessment, levy or charge measured by or based, in whole or in part, upon
such rents from the Project, then all such taxes, assessments, levies or
charges, or the part thereof so measured or based, shall be deemed to be
included within the term "Taxes" for the purposes hereof, or the landlord
under the Underlying Lease. The landlord under the Underlying Lease has the
right pursuant to the Underlying Lease to employ a tax consulting firm to
attempt to assure a fair tax burden on the Project within the applicable
taxing jurisdiction. Tenant agrees to pay its proportionate share of the
cost of any such consultant incurred by Landlord in any year following the
Base Year.
B. In addition to other amounts required to be paid by Tenant
hereunder, each calendar year Tenant shall pay to Landlord Tenant's
proportionate share of the amount by which Taxes for such calendar year
exceed Taxes for the Base Year (such excess being referred to herein as the
"EXCESS TAXES").
C. Tenant shall be liable for all taxes levied or assessed against any
personal property or fixtures placed in the Premises. If any such taxes are
levied or assessed against Landlord or the landlord under the Underlying
Lease their respective property and (i) Landlord pays the same or (ii) the
assessed value of their respective property is increased by inclusion of such
personal property and fixtures and Landlord or the landlord under the
Underlying Lease pays the increased taxes, then, upon demand Tenant shall pay
to Landlord the amount of such increase in taxes. In addition, if the
Building is a multiple occupancy building and the cost of any improvements
constructed to the Tenant's Premises is disproportionately higher than the
cost of improvements constructed to the premises of other tenants of the
Building, then upon demand Tenant shall pay the amount of Taxes attributable
to such disproportionately more expensive improvements, in addition to
Tenant's proportionate share of Taxes.
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7. LANDLORD'S REPAIRS.
Landlord's maintenance, repair and replacement obligations are
limited to those set forth in this PARAGRAPH 7. The landlord under the
Underlying Lease, at its own cost and expense, is responsible for roof
replacement and for repair and replacement of the foundation and the
structural members of the exterior walls of the Building, reasonable wear and
tear excluded. The terms "roof" and "walls" as used herein shall not include
skylights, windows, glass or plate glass, doors, special store fronts or
office entries. Tenant shall immediately give Landlord written notice of
defect or need for repairs after which Landlord shall have reasonable
opportunity to demand the landlord under the Underlying Lease repair same or
cure such defect. Landlord shall cause landlord under the Underlying Lease to
maintain and repair the common area in and about the Building in a reasonable
and prudent manner including any spur track, with the cost thereof being a
part of the Common Area Charges.
8. TENANT'S REPAIRS AND MAINTENANCE.
B. In addition to Tenant's other obligations hereunder, Tenant, at its
own cost and expense, shall enter, or pay its proportionate share for
Landlord to enter, into a regularly scheduled preventive maintenance/service
contract with a maintenance contractor approved by Landlord for servicing all
hot water, heating and air conditioning systems and equipment within or
serving the Premises. The service contract must include all services suggested
by the equipment manufacturer in its operations/maintenance manual and an
executed copy of such contract must be provided to Landlord prior to the date
Tenant takes possession of the Premises.
12. UTILITIES. The landlord under the Underlying Lease has agreed to
provide normal water, sewer, gas and electricity service as same may be
available to the Premises. Tenant shall timely pay for all water, gas, heat,
light, power, telephone, sewer, sprinkler charges and other utilities and
services used on or at the Premises, together with any taxes, penalties,
deposits, surcharges or the like pertaining to the Tenant's use of the
Premises, and any maintenance charges for utilities. Tenant shall pay all
impact fees associated with utility hook-ups, meter installations or services
to the Premises. If the Tenant has given Landlord prior written consent,
Landlord shall have the right to cause any of said services to be separately
metered to Tenant, with the expense of additional metering to be equally
shared between the Landlord and the Tenant. Tenant shall pay its
proportionate share, as reasonably determined by Landlord, of all charges for
jointly metered utilities (including those utilities jointly metered between
Landlord hereunder and landlord under the Underlying Lease, and including,
but not limited to the cost of utilities consumed in connection with
providing electrical power for the Building's canopy lighting, the lighting
of the parking facilities and other common areas and facilities associated
with the Building, the Building's fire pump room and irrigation system, as
well as other electricity gauged by the "house meter"). Landlord shall not be
liable for any interruption or failure of utility service on the
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Premises. Tenant acknowledges that it is aware of the type and quantity of
utilities currently available to the Premises and agrees that same is adequate
for Tenant's purposes. Tenant shall comply with its obligations under this
Section 12 by paying its proportionate share of any payments properly payable
by Landlord as tenant under the Underlying Lease, pursuant to Section 12
hereof ("Utility Payments"), with a dollar-for-dollar credit for payments
made directly by Tenant for separately metered services.
13. LANDLORD AND TENANT INSURANCE.
A. The landlord under the Underlying Lease must maintain insurance
covering the Building in an amount not less than eight percent (80%) of the
"replacement cost" thereof insuring against the perils and costs of Fire,
Lightning, Extended Coverage, Vandalism and Malicious Mischief and such other
insurance as Landlord shall deem necessary. In addition to other amounts
required to be paid by Tenant hereunder, each calendar year (other than the
Base Year) Tenant shall pay to Landlord Tenant's proportionate share of the
amount payable by Landlord as tenant under the Underlying Lease, pursuant to
paragraph 13A thereof, being the amount by which the cost of procuring
insurance under such PARAGRAPH 13A for such calendar year exceeds the cost of
procuring such insurance for the Base Year (such excess being referred to
herein as the "EXCESS INSURANCE EXPENSES").
15. FIRE AND CASUALTY DAMAGE.
A. If the Premises or the Building should be damaged or destroyed by
fire or other peril, Tenant immediately shall give written notice to
Landlord. If the Building of which the Premises are a part should be totally
destroyed by any peril covered by the insurance to be provided by the landlord
under the Underlying Lease, or if they should be so damaged thereby that, in
the landlord's estimation, rebuilding or repairs cannot be completed within
one hundred eighty (180) days after the date of the landlord's actual
knowledge of such damage, this Lease shall terminate and the rent shall be
abated during the unexpired portion of this Lease, effective upon the date of
the occurrence of such damage.
B. If the Building of which the Premises are a part, should be damaged
by any peril covered by the insurance to be provided by the landlord under
the Underlying Lease, and in the landlord's estimation, rebuilding or repairs
can be substantially completed within one hundred eighty (180) days after the
date of the landlord's actual knowledge of such damage, this Lease shall not
terminate, and the landlord has agreed to restore the Premises to
substantially its previous condition, except that the landlord shall not be
required to rebuild, repair or replace any part of the partitions, fixtures,
additions and other improvements that may have been constructed, erected or
installed in, or about the Premises for the benefit of, or by or for Tenant.
Effective upon the date of the occurrence of such damage and ending upon
substantial completion, if the Premises are untenantable in whole or part
during such period, the rent shall be reduced to such extent as may be fair
and reasonable under all of the
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circumstances. If such repairs and rebuilding have not been substantially
completed within one hundred eighty (180) days after the date of the
landlord's actual knowledge of such damage (subject to Force Majeure Delays
[hereinafter defined], either Landlord or Tenant may terminate this Lease by
delivering written notice of termination to the other party in which event the
rights and obligations hereunder shall cease and terminate (except as
expressly provided to the contrary herein).
C. Notwithstanding anything herein to the contrary, in the event the
holder of any indebtedness secured by a mortgage or deed of trust covering
the Premises requires that the insurance proceeds be applied to such
indebtedness, then Landlord shall have the right to terminate this Lease by
delivering written notice of termination to Tenant within fifteen (15) days
after such requirement is made known to Landlord, whereupon all rights and
obligations hereunder shall cease and terminate (except as expressly provided
to the contrary herein).
16. LIABILITY AND INDEMNIFICATION. Except for any claims, rights of
recovery and causes of action that Tenant has released, Landlord shall hold
Tenant harmless and defend Tenant against any and all claims or liability for
any injury or damage to any person in, on or about the Premises, when such
injury or damage shall be caused by an affirmative act of negligence by such
landlord, its agents, servants and employees (unless the indemnified loss is
causes wholly or in part by Tenant's or any other party's negligence, in
which event this indemnity shall not apply to the allocable share of such loss
resulting from Tenant's or such other party's negligence). Except for any
claims, rights of recovery and causes of action that Landlord has released,
Tenant shall indemnify, protect, hold harmless and defend Landlord, its
agents, employees, contractors, partners, directors, officers and any
affiliates of the above-mentioned parties (collectively the "LANDLORD
AFFILIATES") from and against any and all obligations, suits, losses,
judgments, actions, damages, claims or liability (including, without
limitation, all costs, attorneys' fees, and expenses incurred in connection
therewith) in connection with any loss, injury or damage (i) to any person or
property whatsoever occurring in, on or about the Project, when such injury
or damage shall be caused by the act, neglect, fault of, or omission of any
duty with respect to the same by Tenant, its agents, servants, employees, or
invitees (ii) arising from the conduct of management of any work done by or
for Tenant in or about the Project, (iii) arising from transactions of the
Tenant, or (iv) arising from a breach, violation or non-performance of any
term, provision, covenant or agreement of Tenant hereunder, or a breach or
violation by Tenant of any court order or any law, regulation, or ordinance
of any federal, state or local authority (collectively, the "LOSSES"). If any
claim is made against Landlord or Landlord Affiliates, Tenant, at its sole
cost and expense, shall defend any such claim, suit or proceeding by or
through attorneys satisfactory to Landlord. The provisions of this PARAGRAPH
16 shall survive the expiration or termination of this Lease with respect to
any claims or liability occurring prior to such expiration or termination.
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18. INSPECTION. Landlord and Landlord's agents and representatives
(including Landlord and its agents and affiliates under the Underlying Lease)
shall have the right to enter the Premises during business hours, upon prior
reasonable notice except in the event of an emergency, to (i) inspect the
Premises, (ii) make such repairs as may be required or permitted pursuant to
this Lease, and (iii) show the Premises to prospective purchasers of, or
parties who are anticipated to provide financing with respect to, the
Building. Notwithstanding the foregoing, Landlord and landlord under the
Underlying Lease shall have the right to enter the Premises at any time,
without notice to Tenant, in case of an emergency posing a threat to persons
or property. During the period that is six (6) months prior to the end of the
Term, upon telephonic notice to Tenant, Landlord and Landlord's
representatives may enter the Premises stating the Premises are available.
Tenant shall notify Landlord in writing at least thirty (30) days prior to
vacating the Premises and shall arrange to meet with Landlord for a joint
inspection of the Premises prior to vacating. If Tenant fails to give such
notice or to arrange for such inspection, then Landlord's inspection of the
Premises shall be deemed correct for the purpose of determining Tenant's
responsibility for repairs and restoration of the Premises.
22. QUIET ENJOYMENT. This Lease is a sublease, and Tenant agrees to take
the Premises subject to the provisions of the prior leases. Landlord
represents that it has the authority to enter into this Lease and that so
long as Tenant pays all amounts due hereunder and performs all other
covenants and agreements herein set forth, Tenant shall peaceably and quietly
have, hold and enjoy the Premises for the Term hereof without hindrance or
molestation from Landlord subject to the terms and provisions of this Lease.
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36. ADDITIONAL PROVISIONS. EXHIBITS A-1, A-2, B, C, D, E, F AND J (THERE
BEING NO EXHIBITS G, H OR I) attached hereto are incorporated by reference
herein.
LANDLORD:
ADVANCED MATERIALS, INC.
a California corporation
By: /s/
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Date of Execution: 8/31/95
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TENANT:
WILSHIRE TECHNOLOGIES, INC.
a California corporation
By: /s/ Stephen P. Scibelli, Jr.
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Name: Stephen P. Scibelli, Jr.
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Its: President & Chief Executive Officer
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Date of Execution: August 31, 1995
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