<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
-----
Exchange Act of 1934 for the quarterly period ended March 31, 1999.
______ Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ______ to ______.
Commission File Number O-8092
OXIS INTERNATIONAL, INC.
A Delaware corporation
I.R.S. Employer Identification No. 94-1620407
6040 N. Cutter Circle, Suite 317
Portland, OR 97217
Telephone: (503) 283-3911
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
-------
At March 31, 1999, the issuer had outstanding the indicated number of shares of
common stock: 7,871,196
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31
------------------------
1999 1998
<S> <C> <C>
Revenues:
Product sales $ 1,406,000 $ 1,296,000
Royalties and license fees 50,000 51,000
----------- -----------
Total revenues 1,456,000 1,347,000
Costs and expenses:
Cost of sales 1,007,000 1,259,000
Research and development 770,000 931,000
Selling, general and administrative 858,000 981,000
----------- -----------
Total costs and expenses 2,635,000 3,171,000
----------- -----------
Operating loss (1,179,000) (1,824,000)
Interest income 18,000 11,000
Interest expense (30,000) (27,000)
----------- -----------
Net loss (1,191,000) (1,840,000)
Other comprehensive income (loss) -
Foreign currency translation adjustments 12,000 (59,000)
----------- -----------
Comprehensive loss $(1,179,000) $(1,899,000)
=========== ===========
Net loss per share - basic and diluted $ (.15) $ (.32)
=========== ===========
Weighted average number of
shares used in computation - basic and
diluted 7,845,926 5,734,778
=========== ===========
</TABLE>
1
<PAGE>
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $1,483,000 $ 2,575,000
Accounts receivable 1,117,000 992,000
Inventories 1,565,000 1,576,000
Prepaid and other 490,000 258,000
---------- -----------
Total current assets 4,655,000 5,401,000
Property and equipment, net 858,000 2,817,000
Technology for developed products
and custom assays, net 2,382,000 2,570,000
Other assets 324,000 380,000
---------- -----------
Total assets $8,219,000 $11,168,000
========== ===========
</TABLE>
2
<PAGE>
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Notes payable $ 724,000 $ 724,000
Accounts payable 563,000 716,000
Accrued payroll, payroll taxes and other 705,000 820,000
Current portion of long-term debt 48,000 111,000
------------ ------------
Total current liabilities 2,040,000 2,371,000
Long-term debt due after one year 174,000 1,613,000
Shareholders' equity:
Preferred stock - $.01 par value; 15,000,000 shares
authorized:
Series B - 428,389 shares issued and outstanding
at March 1999 (liquidation
preference of $1,000,000) 4,000 4,000
Series C - 807,878 shares issued and outstanding
at March 31, 1999 8,000 8,000
Common stock - $.001 par value; 95,000,000 shares
authorized; 7,871,196 shares issued and outstanding
at March 31, 1999 8,000 8,000
Additional paid in capital 52,754,000 52,754,000
Accumulated deficit (46,494,000) (45,303,000)
Accumulated translation adjustments (275,000) (287,000)
------------ ------------
Total shareholders' equity 6,005,000 7,184,000
------------ ------------
Total liabilities and shareholders' equity $ 8,219,000 $ 11,168,000
============ ============
</TABLE>
3
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------
1999 1998
<S> <C> <C>
Cash flows from operating activities:
Net loss $(1,191,000) $(1,840,000)
Adjustments to reconcile net loss to cash
used for operating activities:
Depreciation and amortization 289,000 362,000
Gain on sale of land and building (16,000) --
Changes in assets and liabilities:
Accounts receivable (130,000) 784,000
Inventories -- (47,000)
Prepaid and other current assets (233,000) 31,000
Accounts payable (145,000) (262,000)
Accrued payroll, payroll taxes and other (96,000) 136,000
----------- -----------
Net cash used for operating activities (1,522,000) (836,000)
Cash flows from investing activities:
Proceeds from sale of land and building 1,959,000 --
Purchases of equipment (25,000) (10,000)
Additions to other assets (24,000) (58,000)
Other, net (1,000) (13,000)
----------- -----------
Net cash provided by (used for) investing activities 1,909,000 (81,000)
Cash flows from financing activities:
Proceeds from issuance of notes -- 546,000
Stock issuance costs -- (28,000)
Repayment of short-term borrowings -- (424,000)
Repayment of long-term debt (1,502,000) (20,000)
----------- -----------
Net cash provided by (used for) financing activities (1,502,000) 74,000
Effect of exchange rate changes on cash 23,000 (37,000)
----------- -----------
Net decrease in cash and cash equivalents (1,092,000) (880,000)
Cash and cash equivalents - beginning of period 2,575,000 1,290,000
----------- -----------
Cash and cash equivalents - end of period $ 1,483,000 $ 410,000
=========== ===========
</TABLE>
4
<PAGE>
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. FINANCIAL STATEMENTS AND CONDENSED NOTES
The unaudited consolidated financial statements, which have been prepared
in accordance with the instructions to Form 10-Q, do not include all of the
information and notes required by generally accepted accounting principles
for complete financial statements. All adjustments considered necessary by
management for a fair presentation have been included. Operating results
for interim periods are not necessarily indicative of the results that may
be expected for the full year.
An annual report (Form 10-K/A) has been filed with the Securities and
Exchange Commission ("Commission") for the year ended December 31, 1998.
That report contains, among other information, a description of the
Company's business, audited financial statements, notes to the financial
statements, the report of the independent auditors and management's
discussion and analysis of results of operations and financial condition.
Readers of this report are presumed to be familiar with that annual report.
2. INVENTORIES
Inventories are stated at the lower of cost or market. Cost has been
determined by using the first-in, first-out method. Inventories at March
31, 1999 and December 31, 1998, consisted of the following:
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
<S> <C> <C>
Raw materials $ 867,000 $ 817,000
Work in process 325,000 406,000
Finished goods 373,000 353,000
---------- ----------
Total $1,565,000 $1,576,000
========== ==========
</TABLE>
3. OPERATING SEGMENTS
The following table presents information about the Company's two operating
segments:
5
<PAGE>
<TABLE>
<CAPTION>
Health Therapeutic
Products Development Total
-------- ----------- -----
<S> <C> <C> <C>
Quarter ended March 31, 1999:
Revenues from external
customers $1,428,000 $ 28,000 $ 1,456,000
Intersegment revenues -- 24,000 24,000
Segment loss (409,000) (782,000) (1,191,000)
As of March 31, 1999 -
Segment assets 5,885,000 2,334,000 8,219,000
Quarter ended March 31, 1998:
Revenues from external
customers $1,347,000 $ -- $ 1,347,000
Intersegment revenues -- 29,000 29,000
Segment loss (962,000) (878,000) (1,840,000)
As of March 31, 1998 -
Segment assets 8,211,000 2,239,000 10,450,000
</TABLE>
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital decreased during the first quarter of 1999 by
$415,000, from $3,030,000 at December 31, 1998 to $2,615,000 at March 31,
1999. The reduction in working capital resulted primarily from the effect
of the net loss for the quarter ($1,191,000 less non-cash charges of
$289,000), offset by a $543,000 net increase in working capital from the
sale of land and buildings and payment of related debt.
Cash and cash equivalents decreased from $2,575,000 at December 31, 1998 to
$1,483,000 at March 31, 1999.
While the Company believes that its new therapeutic products and
technologies show considerable promise, its ability to realize significant
revenues therefrom is dependent upon the Company's success in developing
business alliances with biotechnology and/or pharmaceutical companies that
have the required resources to develop and market certain of these
products. There is no assurance that the Company's effort to develop such
business alliances will be successful.
The Company expects to continue to report losses in 1999 as the level of
expenses is expected to continue to exceed revenues. The Company can give
no assurances as to when and if its revenues will exceed its expenses. New
revenue sources or additional capital will be required during 1999 for the
Company to continue operating in accordance with its current plans. Failure
to either generate new revenue sources or to raise additional capital would
cause the Company to severely curtail or cease operations.
INFORMATION SYSTEMS AND THE YEAR 2000
As is the case with most other companies using computers in their
operations, the Company is in the process of addressing the Year 2000
problem. The Company has reviewed most of its computer hardware and
software to determine whether they will consistently and properly recognize
the Year 2000. Certain of the Company's systems include hardware and
packaged software recently purchased from vendors who have represented that
these systems are already Year 2000 compliant.
Other hardware and software currently being used by the Company has been
identified by the Company as not being Year 2000 compliant, particularly
certain packaged software used in the Company's accounting systems. The
Company is in the process of upgrading that software to year 2000 compliant
versions. If the Company were unable to replace software and hardware to
make its accounting and manufacturing systems Year 2000 compliant, the
Company believes that it could implement manual systems to carry out its
business without significant interruption.
7
<PAGE>
The Company expects to complete its review of all of its systems, including
embedded technology in non-information technology systems, which might be
affected by the Year 2000 issue by the second quarter of 1999. The Company
has reviewed or is reviewing communications, security, and environmental
monitoring and control systems as well as certain laboratory and
manufacturing equipment and equipment manufactured for customers. The
Company believes that, in the worst likely case, such systems or components
thereof can be replaced to make such systems Year 2000 compliant.
The Company expects that the total cost for upgrades and replacements of
software, older computer hardware and other systems or components including
embedded technology that might be affected by the Year 2000 issue will not
exceed $100,000.
The Company relies on a number of vendors and suppliers including banks,
telecommunications providers, transportation companies and other providers
of goods and services. The inability of certain of these third parties to
conduct their business for a significant period of time due to the Year
2000 issue could have a material impact on the Company's operations. The
Company does not have the resources to determine whether all such vendors
and suppliers are Year 2000 compliant. However, the Company expects that it
could find other vendors and suppliers if any of its current vendors or
suppliers are unable to continue to provide goods or services to the
Company, but no assurances can be given as to how long it will take to find
substitute vendors and suppliers.
RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 1999
COMPARED WITH THREE MONTHS ENDED MARCH 31, 1998
REVENUES
The Company's revenues for the quarters ended March 31, 1999 and 1998 were
as follows:
1999 1998
Diagnostic and research assays $ 848,000 $ 416,000
Instrument sales and development 487,000 810,000
Other 121,000 121,000
---------- ----------
$1,456,000 $1,347,000
========== ==========
Sales of the Company's diagnostic and research assays increased from
$416,000 in the first quarter of 1998 to $848,000 in the first quarter of
1999. This increase of $432,000 was primarily due to increased sales
volumes to the Company's distributors in the first quarter of 1999,
following below normal sales volumes in the first quarter of 1998.
8
<PAGE>
Revenue from instrument sales and development declined by $323,000, from
$810,000 in the first quarter of 1998 to $487,000 in the first quarter of
1999. This decrease resulted from reduced orders from certain customers for
whom the Company acts as an original equipment manufacturer.
COSTS AND EXPENSES
Including amortization of purchase adjustments, cost of sales was 97% of
product sales for the first quarter 1998 and decreased to 72% of product
sales for the first quarter of 1999. This decrease in the cost of sales as
a percentage of sales is due primarily to the effect of the fixed
manufacturing costs for the Company's research and diagnostic assays being
spread over manufacturing and sales volume for the first quarter of 1999
which was approximately double that of the first quarter of 1998. Cost of
sales of research and diagnostic assays in the first quarter of 1999 were
$40,000 less than in the first quarter of 1998, despite an increase in
volume. Cost of sales for the Company's instrument sales and development
business also declined, by $260,000 due primarily to lower sales volumes.
Costs of sales in the first quarter of both 1998 and 1999 includes
approximately $210,000 in amortization of purchase adjustments relating to
1994 and 1997 business acquisitions. Excluding such amortization the cost
of product sales for the first quarter of 1998 was approximately 81% of
product sales and the cost of sales for the first quarter of 1999 was
approximately 57% of product sales.
Research and development expenses decreased from $931,000 in the first
quarter of 1998 to $770,000 in the first quarter of 1999. The decrease in
research and development expenses resulted from cost reductions in the
first quarter of 1999 compared to the first quarter of 1998 of (1) $30,000
for outside development contracts primarily relating to the development of
the Company's lead molecule, BXT-51072, which is currently in Phase II
clinical trials for ulcerative colitis, (2) $33,000 in research and
development costs of the Company's French subsidiary and (3) $98,000 in
research and development costs in the United States other than the costs of
clinical trials. Research and development expenses in the first quarter of
1998 included severance costs relating to a staff reduction in the United
States.
During the first quarter of 1999 the Company decided to reduce its research
and development costs by closing its French research laboratory.
Substantially all research and development activities carried on by the
Company's French subsidiary were ceased in early 1999. The lease of the
French subsidiary's facility was not renewed when it terminated at the end
of April 1999. Research and development costs of the French subsidiary
decreased from $422,000 in the first quarter of 1998 to $389,000 in the
first quarter of 1999. Costs in the first quarter of 1999 include severance
costs for approximately half of the French employees. The remainder of the
employees, who are involved in the final closure of the operations, are
expected to be terminated during the second quarter of 1999.
9
<PAGE>
Selling, general and administrative expenses decreased from $981,000 in the
first quarter of 1998 to $858,000 in the first quarter of 1999. The
decrease is primarily the result of reductions in selling, general and
administrative expenses of OXIS' instrument business in the first quarter
of 1999 as compared to 1998. The cost reductions resulted from the
consolidation of certain sales and administrative functions of OXIS'
instrument business with those of its assay and other health products
business.
NET LOSS
The Company continued to experience losses in the first quarter of 1999.
The first quarter 1999 loss of $1,191,000 ($.15 per share-basic and
diluted) was $649,000 less than the $1,840,000 ($.32 per share-basic and
diluted) loss for the first quarter of 1998. The decrease in the net loss
is primarily due to the increase in gross margin from product sales and
decreases in research and development and selling, general and
administrative costs.
The Company expects to incur a substantial net loss for 1999. If the
Company develops substantial new revenue sources or if substantial
additional capital is raised through further sales of securities (See
Financial Condition, Liquidity and Capital Resources), the Company plans to
continue to invest in research and development activities and incur sales,
general and administrative expenses in amounts greater than its anticipated
near-term product margins. If the Company is unable to raise sufficient
additional capital or to develop new revenue sources, it will have to
cease, or severely curtail, its operations. In this event, while expenses
will be reduced, expense levels, and the potential write down of various
assets, would still be in amounts greater than anticipated revenues.
__________________________
Certain of the matters discussed in this Report such as management's plans
regarding research and development activities and the continuation of its
current business plans are forward-looking statements that involve risks
and uncertainties, including the Company's ability to raise additional
financing, its ability to enter into alliances, the timely development and
market acceptance of new products, the impact of competitive products and
pricing, economic conditions, and other risks. These factors could cause
actual results to differ materially from those described in any forward-
looking statements.
10
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits - See Exhibit Index on page 12.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OXIS International, Inc.
May 13, 1999 By /s/ Ray R. Rogers
-----------------------------
Ray R. Rogers
Chairman and Chief Executive Officer
May 13, 1999 By /s/ Jon S. Pitcher
-----------------------------
Jon S. Pitcher
Chief Financial Officer
11
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Document
10(a) Agreement of Sale dated December 2, 1998
10(b) Sublease Agreement dated February 19, 1999
10(c) Rider to Sublease Agreement dated February 19, 1999
27(a) Financial data schedule
12
<PAGE>
EXHIBIT 10(A)
AGREEMENT OF SALE
-----------------
THIS AGREEMENT is made as of this 2nd day of December, 1998, by and between
OXIS INSTRUMENTS, INC., a Pennsylvania corporation with its registered office
located at 55 Steam Whistle Drive, Ivyland, Bucks County, Pennsylvania,
(hereinafter referred to as "SELLER" ), of the one part, and GIULIANO FAMILY
LIMITED PARTNERSHIP, a Pennsylvania limited partnership, with its registered
address c/o deGrouchy, Sifer & Company, 892 Second Street Pike, Richboro,
Pennsylvania 18954 (hereinafter referred to as `BUYER"), of the other part.
W I T N E S S E T H:
WHEREAS, INNOVATIVE MEDICAL SYSTEMS CORP., (hereinafter referred to as
"IMS"), is the fee simple, record title owner, of all that certain lot or piece
of ground and the building thereon erected, situate 55 Steam Whistle Drive,
Ivyland, Township of, County of Bucks, Pennsylvania, being County Tax Map Parcel
No. 31-1-8-15 as more fully described in Exhibit "A" attached hereto and made a
part hereof, (hereinafter referred to as the "Premises"); and
WHEREAS, IMS filed Articles of Amendment to its Articles of Incorporation
with the Commonwealth of Pennsylvania, Department of State, on September 29,
1998, changing its name to "Oxis Instruments, Inc.", the SELLER herein; and
WHEREAS, BUYER desires to purchase and acquire the Premises upon certain
terms and conditions more fully set forth herein; and
WHEREAS, the parties hereto have agreed upon a purchase price together with
the terms of payment of the price and a date for settlement and consummation of
this Agreement
NOW THEREFORE, the parties hereto, intending to be legally bound hereby
under and pursuant to the Uniform Written Obligations Act, 33 P.S. (S)(S)6-8,
and in consideration of the mutual promises and undertakings herein set forth,
the parties do agree as follows:
ARTICLE 1. SALE AND PURCHASE PRICE
Amount of Purchase Price
1.01. On and subject to the terms and conditions set forth in this
Agreement, Seller hereby agrees to sell, convey, transfer, assign and deliver to
Buyer, and Buyer hereby agrees to purchase from Seller, the following properties
and assets:
(1) The Premises;
(2) All of Seller's right, title and interest in and to any
furniture, fixtures, equipment and other tangible personal
property located in or on the Premises used or useful in
connection with the operation of the Premises (the
"Personalty"), such items to be more particularly set forth
on the inventory annexed hereto as Exhibit "B"; and
(3) All of Seller's right, title and interest in, to and under
all contracts and agreements relating to the leasing, use,
occupancy and operation of the
1
<PAGE>
Premises (collectively, the "Service Contracts"), a schedule
of which Service Contracts is attached hereto as Exhibit
"C", to the extent that BUYER elects to assume or continue
any or all of the contracts or agreements.
The purchase price which BUYER agrees to pay to SELLER and SELLER agrees to
accept from BUYER ("Purchase Price") for the purchase and sale of the Premises
shall be Two Million Sixty Two Thousand Five Hundred and No/100 ($2,062,500.00)
Dollars.
PAYMENT OF PURCHASE PRICE
1.02. The Purchase Price for the Premises shall be paid by BUYER to SELLER
in the following manner:
(1) Within Five (5) days of the execution of this Agreement by
SELLER and
BUYER, BUYER shall deposit the sum of Fifty Thousand and No/l00
($50,000.00) Dollars with Robert Chalpin Associates, Inc.,
agent for First
American Title Insurance Company, a duly licensed title company
in the
Commonwealth of Pennsylvania as escrowee ("Escrow Agent").
Escrow
Agent shall hold said fund in accordance with the requirements
of Subparagraph 1.03 and 1.04 infra.
(2) The balance of the Purchase Price, subject to the adjustments
set forth herein, shall be paid by BUYER to SELLER by wire
transfer of immediately available federal funds at the time of
Closing.
1.03 Escrow Agent shall deposit said sum in an interest-bearing account at
FDJC insured bank, until consummation or termination of this Agreement under
BUYER's tax identification number. All interest on said funds shall be credited
to BUYER, except in the event of s default. Said monies, together with all
interest earned thereon, shall be referred to herein as "Deposit Monies"). At
the time of consummation of the transaction evidenced by this Agreement
(hereinafter referred to as "Closing"), the Deposit Monies shall be paid by
Escrow Agent to SELLER and credited against the Purchase Price or paid to the
party entitled thereto upon cancellation pursuant to the provisions of this
Agreement. This Agreement shall constitute instructions to the Escrow Agent
1.04 SELLER and BUYER agree to release and hold harmless Escrow Agent upon
faithful tender of the Deposit Monies in accordance with Subparagraph 1.03
supra, or in the event of a dispute between SELLER and BUYER as to the
entitlement of the Deposit Monies, upon the payment of the Deposit Monies into
the Court of Common Pleas, Bucks County, Pennsylvania.
2
<PAGE>
ARTICLE 2. BUYER'S INSPECTIONS
------------------------------
BUYER'S INSPECTIONS
2.01 Subject to the provisions of Paragraph 2.03, hereinafter, BUYER at
BUYER's sole cost and expense shall have the right to conduct all inspections of
the Premises as BUYER deems necessary and prudent, or as may be required by s
Lender, and, in addition, BUYER shall be permitted to conduct any and all
necessary tests provided that such tests do not damage, impair or alter any item
or component inspected. BUYER shall indemnify and hold SELLER harmless from any
damage for repair or replacement sustained by any component or item inspected
and any loss, damage or liability of the activities of BUYER or any of BUYER's
agents in connection with the performance of any inspection(s) or test(s).
2.02 SELLER authorizes and permits BUYER and/or BUYER's agents to enter
upon the Premise to conduct any inspection or test after reasonable notice to
SELLER and at reasonable times. BUYER agrees to use its best efforts not to
disrupt SELLER's operations in the conduct of any inspection(s) and/or test(s).
2.03 Within Fifteen (15) days of execution of this Agreement by SELLER and
BUYER, BUYER shall have the Premises, the improvements, and all components or
systems, including but not limited to the structural, mechanical, electrical,
plumbing, HVAC, water supply, septic disposal and/or environmental systems
inspected by a contractor, engineer and/or entity at BUYER's choice and sole
expense. (collectively, the "Inspections") BUYER shall obtain the results no
latter than Thirty (30) days following the Inspections. If the results of the
Inspections are unacceptable to BUYER, BUYER shall, within Five (5) days of
BUYER's receipt of the results: (a) Provide SELLER with a copy of the results
and request SELLER at SELLER's expense to remedy all or such items as BUYER may
request. SELLER shall notify BUYER within Five (5) days of the receipt of
BUYER's notice whether SELLER will undertake to remedy all of the items
identified by BUYER. In the event SELLER refuses to remedy all items or BUYER is
not satisfied with SELLER's response, BUYER at its option may elect to terminate
this Agreement and at that time receive all Deposit Monies, or, (b) Accept the
Premises without adjustment or abatement of the Purchase Price
2.04 Notwithstanding anything contained in this Agreement to the contrary
Seller makes no representation, either prior to or to Closing, with respect to
the condition or character of the Premises or the use or uses to which the
Premises may be put, except as herein provided.
BUYER HEREBY ACKNOWLEDGES and AGREES AN]) REPRESENTS THAT BUYER HAS HAD THE
OPPORTUNITY TO FULLY INSPECT THE PREMISES ANT) THAT BUYER IS PURCHASING THE
PREMISES "AS IS", "WHERE IS" ANT) "WITH ALL FAULTS" AND IN ITS PRESENT CONDITION
ANT) SUBJECT TO ALL USE, REASONABLE WEAR AND TEAR BETWEEN THE DATE HEREOF AND
THE DATE OF CLOSING. In making and executing this Agreement. Buyer has not
relied upon or been induced by any statements or representations of any person
(other than those, if any, set forth expressly in this Agreement or any Exhibit
hereto) in respect of the title to, or the physical or environmental condition
of, the Premises (including, without limitation, the zoning classification or
permitted use of the Premises) or income, expense, operation or other matter
3
<PAGE>
or thing affecting or relating to the Premises, or this transaction is general,
which might be pertinent or considered in the making or the execution of this
Agreement. Buyer has, on the contrary, relied solely on such representations, if
any, as are expressly made herein and on such investigations, examinations and
inspections as Buyer has chosen to make or have made and this Agreement shall
continue in full force and effect in accordance with its terms.
ARTICLE 3. WARRANTIES AND AGREEMENTS BY SELLER
SELLER'S WARRANTY AS TO LEASES
3.01 SELLER hereby warrants that no person, firm or corporation has any
title, interest, or right to possession of said property or any portion thereof
as a lessee, tenant, or concessionaire of SELLER.
WARRANTY AS TO INSURANCE
3.02. SELLER hereby warrants that the Premises are covered by policies of
property, casualty, and liability insurance maintained by the Seller and that
such policies will be maintained in full force and effect until Closing or
termination of this Agreement, for any covered claims, loss, cost or expense for
personal injury, and/or property damage arising during the period of Seller's
ownership of the Premises. SELLER shall, following Closing, indemnify and hold
BUYER harmless for any of the liability, loss, costs or expenses arising out of
SELLER's negligence or tortuous misconduct during the period of its ownership
and operation of the Premises, which obligation shall survive Closing.
WARRANTY AS TO SERVICE CONTRACTS
3.03. SELLER hereby warrants that attached hereto marked Exhibit "C" and
incorporated herein by reference is a true and complete list of the Service
Contracts. Upon execution of this Agreement, Seller will deliver true and
correct copies of the Service Contracts to Buyer which Buyer will return to
Seller in the event of any termination of this Agreement.
AGREEMENT AS TO SERVICE CONTRACTS
3.04. SELLER agrees that until Closing and delivery of possession of said
Premises to BUYER as herein provided, SELLER shall:
(1) Perform all obligations arising under the Service Contracts
through to Closing.
(2) Maintain the Premises in good repair and in the same condition,
reasonable wear and tear excepted, as it was at the time it was
inspected by BUYER.
(3) Continue to operate and manage the Premises in a reasonable,
diligent, and prudent manner; provided, however, SELLER shall not
enter into any additional leases or agreements or extensions of
any existing leases or agreements pertaining to the Premises.
SELLER shall not make or enter into any contract which cannot be
terminated without charge, cost, penalty or premium on or before
Closing and which would bind or be a charge against the Premises
or Buyer after Closing without
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BUYER's prior written consent which shall not be unreasonably
withheld, delayed or conditioned. SELLER shall not make or enter
into any contract for any improvement, alteration, addition,
demolition, or removal of or to the Premises or any portion
thereof without Buyer's prior written consent which shall not be
unreasonably withheld, delayed or conditioned.
INDEMNITY AGREEMENT
3.05. SELLER agrees to indemnify and hold BUYER, and the Premises free and
harmless for any liability arising because of a breach of lease, breach of
contract, or other matter related to the Premises which occurred or is alleged
to have occurred during SELLER's ownership, maintenance and control of the
Premises and prior to Closing as herein provided.
FIXTURES
3.06. SELLER agrees that the Personalty shall be free and clear of all
liens, security interests and encumbrances. Seller's interest in the Personalty
shall be conveyed to Buyer at Closing by Seller's duly executed Bill of Sale,
substantially in the form attached hereto as Exhibit "D" (the "Bill of Sale").
REPRESENTATIONS
3.07. SELLER represents and warrants to BUYER that:
(1) SELLER is not a "foreign person" within the meaning and for
purposes (S)897 and (S)1445 of the Internal Revenue Code;
(2) To the best of SELLER's knowledge and information, without the
benefit of any independent investigation by SELLER the facts
set forth in the Findings and Summary of the Phase I
Environmental Site Assessment performed by MAK Environmental,
Inc., dated September 19, 1996, Project No. 1346.86, are true
and correct as of that date and to the present, and SELLER
possesses no information, actual or constructive, to the
contrary.
(3) To the best of SELLER's knowledge and information, without the
benefit of any independent investigation by SELLER the facts
set forth in the Conclusions and Recommendations of the Phase
II Underground Storage Tank Removal and Potable Well Water
Sampling Report performed by MAK Environmental, Inc. for AT&T
Small Business Lending Corporation, dated October 17, 1996, MAK
Assessment No. 1396.96, are true and correct as of that date
and to present, and SELLER possesses no information, actual or
constructive, to the contrary.
(4) SELLER is in sole possession of the Premises, and no other
person or entity has any title, interest, right of possession,
lien or claim in or to the Premises, and/or fixtures.
(5) SELLER has no written or oral notice of any uncorrected
violations of any building, housing, fire, safety or similar
ordinance or regulation
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from any municipal, state and/or federal government or agency.
(6) SELLER is a corporation in good standing under the laws of the
Commonwealth of Pennsylvania.
(7) SELLER has full corporate power and authority to enter into
this Agreement and to consummate the contemplated transaction,
and has been duly authorized by all necessary corporate action
to execute and deliver this Agreement.
(8) To the actual knowledge of Seller, the execution and delivery
by SELLER of this Agreement and the consummation of this
contemplated transaction will not violate any law or conflict
with or result in any breach or violation of, or constitute a
default under, any agreement, instrument or obligation to which
SELLER is a party, or constitute an event or condition that
would permit termination or acceleration of the maturity of the
Articles of Incorporation or By-Laws,
(9) No approval, authorization, consent or order of court is
required for the execution, delivery and consummation of this
Agreement.
(10) The execution and delivery of this Agreement by SELLER will not
conflict with any order, judgment or decree of any court,
government, government agency or instrumentality by which
SELLER is bound or affected.
(11) To Seller's actual knowledge, no litigation or condemnation
proceedings are pending or threatened against SELLER with
respect to the Property.
(12) To the actual knowledge of SELLER, during s ownership and
operation of the Premises, no "hazardous materials" excluding
those used, handled and disposed in accordance with applicable
environmental laws and regulations in connection with Seller's
operation of its activities on the Premises, have been placed
on or under the Premises, which term shall mean any hazardous
or toxic substance, material or waster which is or becomes
regulated by any local, state or federal government; that would
result in the contamination of the Premises.
ARTICLE 4. WARRANTIES AND AGREEMENTS BY BUYER
ASSUMPTION OF SERVICE CONTRACTS
4.01. At Closing, if elected by BUYER, BUYER agrees to accept, assume, and
perform all the terms and conditions of the Service Contracts that were to be
kept or performed by SELLER. Seller's interest in the Service Contracts shall be
conveyed to Buyer at Closing by assignment and assumption agreement duly
executed by Buyer and Seller, substantially in the form attached hereto as
Exhibit "E" (the "Assignment").
INDEMNITY AGREEMENT
4.02. BUYER agrees that after the performance of the conditions specified
in Article 5 of this Agreement and the Closing as therein contemplated, he will
indemnify and hold
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SELLER and the property of SELLER free and harmless from any liability arising
because of a breach of lease, breach of contract, or other matter related to the
Premises which occurred or is alleged to have occurred after Closing.
4.03 Buyer hereby represents, warrants and covenants that as of the date of
this Agreement and as of Closing:
(1) Buyer is a limited partnership duly organized, validly existing
and in good standing under the laws of the Commonwealth of
Pennsylvania. It has full right, power and authority to enter
into and perform the terms and conditions of this Agreement.
(2) The persons executing and delivering this Agreement on behalf
of the Buyer have complete power and authority to so execute
and deliver this Agreement and to consummate the transactions
contemplated herein; all necessary consents of any other party
or parties to the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereunder by
Buyer have been duly obtained; and this Agreement is binding
and enforceable against the Buyer and the partners thereof in
accordance with its terms.
(3) To Buyer's actual knowledge, there is no litigation or
adjudicatory proceeding pending or threatened against or
relating to the Buyer or the contemplated transaction which
would adversely affect the ability of Buyer to perform its
obligations under this Agreement.
(4) Seller's obligation to sell the Premises in connection with
this Agreement shall be conditioned upon receipt of the
Purchase Price at Closing, compliance of Buyer's obligations
hereunder and execution and delivery of the Lease (as
hereinafter defined) by Buyer as landlord.
ARTICLE 5. CLOSING
------------------
ESTABLISHMENT OF CLOSING
5.01. Closing shall be made to consummate the sale of the Premises pursuant
to this Agreement at the law offices of Liederbach, Hahn, Foy & Petri, P.C. at
892 Second Street Pike, Suite C, Richboro, Pennsylvania, 18954-1005 or such
other place and time as BUYER shall designate upon fifteen (15) days written
notice to Seller; provided, however, in no event shall Closing occur on or after
January 31, 1999.
CONDITIONS OF SETTLEMENT
5.02. The settlement and BUYER's obligations under this Agreement to
purchase said property are expressly conditioned on:
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(1) The conveyance to BUYER of good and marketable title to the
Premises, as evidenced by a standard form title insurance policy
issued by First American Title Insurance Company through its
representative Robert Chalpin Associates, Inc., Southampton,
Pennsylvania 18966 in the full amount of the purchase price
herein agreed to be paid by BUYER for said property subject only
to the following:
(a) Any unknown, unrecorded easements, discrepancies or
conflicts in boundary lines, shortages in area and
encroachments which an
accurate and complete survey would disclose;
(b) Rights granted to utility companies for the provisions of
utilities, including but not limited to electric, water,
gas, telephone and/or cable;
(c) Easement over portion of the Premises for highway purposes;
(d) Building setback lines, easements for use of utility
companies for construction, operating and maintaining
facilities on the Premises;
(e) Terms and conditions set forth on the Plan for Northampton
Industrial Park II.
(f) Real estate taxes and assessments and sewer and water
charges not yet due and payable (subject to proration as
provided in this Agreement).
(g) Such other rights, restrictions and matters of record which
do not materially adversely effect Buyer's intended use of
the Premises.
(2) Delivery of the Bill of Sale and the Assignment together with the
Service Contracts at Closing.
(3) Delivery of possession of the Premises and all keys to BUYER
immediately at Closing free and clear of all uses and occupancies
except those which BUYER in this Agreement expressly agrees to
assume.
(4) BUYER' s receipt of a Building Permit, Occupancy Permit and such
other permits, certificates and licenses from Northampton
Township necessary to operate and occupy the Premises for the
dual occupancy of the Premises by BUYER and SELLER as a tenant of
SELLER. The cost of the preparation and submission of all
applications and plans, and payment of all costs, fees or
expenses shall be born solely by BUYER.
(5) Execution by SELLER of a Lease from BUYER for the rental of
approximately 14,760 square feet at the Premises (the "Lease") at
an initial annual rental of $6.00 per square foot, triple net,
for a term of
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One (1) year with Two (2) one-year renewals, with the renewal
terms rental to be annually adjusted according to the Consumer
Price Index, All Urban Consumers (CPI-U), Philadelphia Region,
published by the U.S. Department of Labor, Bureau of Labor
Statistics. In addition, the terms of the Lease shall include
BUYER's right to cancel the Lease with at least six (6) months
notice after the end of the first one year term; SELLER's right
to sublease to a sublessee that is as credit worthy as SELLER,
and BUYER to guarantee a lease term of at least one (1) year for
any sublessee. The Lease shall include such additional terms and
conditions as may be acceptable to SELLER and BUYER and shall be
in form and content acceptable to SELLER and BUYER.
(6) Delivery to BUYER prior to Closing of a Phase I Environmental
Assessment satisfactory to BUYER.
(7) Delivery to BUYER at Closing of a fully executed special warranty
deed by SELLER, in recordable form, sufficient to convey to BUYER
title to the Premises, substantially in the form attached hereto
as Exhibit "F".
(8) Delivery to BUYER during Due Diligence period of a
certification(s) from a licensed contractor(s) or engineer(s),
stating that the plumbing, HVAC, mechanical, roofing, structural,
septic and electrical systems are in satisfactory operating
condition.
(9) Delivery to BUYER prior to Closing a copy of any and all
blueprints, diagrams or schematics of the Premises and mechanical
systems in the Premises in Seller's possession, along with any
and all maintenance logs of the mechanical systems in Seller's
possession.
(10) Permit the BUYER, their representative or agent, not more than
five (5) days prior to Closing, to enter the premises to conduct
an inspection to verify and determine that the Premises and all
component systems have been maintained in the same operating
condition, wear and tear excepted, as at the time BUYER or its
agents originally inspected the Premises pursuant to Article 2
herein. In the event any component is not in such similar
condition at the time of the inspection. Buyer shall notify
Seller of the cost of such repair or restoration and SELLER shall
credit BUYER at Closing an amount equal to the cost to repair or
restore that item or component to good working order.
Notwithstanding any provision of this paragraph to the contrary,
in the event such cost to repair and restore the components of
the premises exceeds $50,000.00, Seller shall not be responsible
to pay for such excess cost over $50,000.00. In the event such
costs exceed $50,000.00, Buyer must notify Seller of its intent
either to: (i) pay for such excess cost above $50,000.00 and
agree to close or (ii)
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agree to terminate this Agreement whereupon the deposit monies
shall be returned to Buyer and neither party hereunder shall have
any right or remedy against the other.
(11) BUYER's receipt within Sixty (60) days of the execution of this
Agreement (the "Mortgage Contingency Period") of a written
mortgage commitment in an amount not less than $1,650,000.00 at
an interest rate no greater than 10% per annum and on such terms
and conditions acceptable to BUYER, who shall be the sole judge
of acceptability. Buyer agrees to make immediate application for,
and proceed with due diligence to obtain such mortgage
commitment. After proceeding with due diligence, if Buyer has not
been able to obtain financing pursuant to this paragraph, Buyer
shall have the right to terminate this Agreement by written
notice (the "Mortgage Notice") to Seller on or before the
expiration of the Mortgage, Contingency Period, in which event,
notwithstanding anything contained in this agreement to the
contrary, $25,000.00 of the Deposit Monies shall be returned to
Buyer and $25,000.00 shall be retained by Seller as liquidated
damages and neither party hereunder shall any right or remedy
against the other except as expressly set forth herein. In the
event Buyer does not deliver the Mortgage Notice, this Agreement
shall continue in full force and effect and the contingency set
forth in this subparagraph 5.03 (ii) shall be deemed waived by
Buyer.
(12) BUYER's satisfaction or fulfillment of any and all conditions,
terms and provisions contained in any financing commitment issued
by any Lender in conjunction with the mortgage financing under
Subparagraph (11) supra.
-----
FAILURE OF CONDITIONS
5.03 Should any of the conditions specified in Paragraph 5.02 of this
Agreement fail to occur, BUYER shall have the power exercisable by the giving
of written notice to the Escrow Agent and to SELLER, to cancel such Closing,
-------------------
terminate this Agreement, and recover all Deposit Monies (except as provided to
the contrary in 5.02 (11) above) paid by BUYER to SELLER or to the Escrow Agent
on account of the Purchase Price of the Premises, and upon such notice, the
parties obligations hereunder shall terminate without any further liability on
the part of either party. The Escrow Agent shall be and is hereby irrevocably
instructed by SELLER on any such failure of condition and receipt of such notice
from BUYER by it to immediately refund to BUYER all moneys and instruments
deposited by BUYER in the settlement account pursuant to this Agreement.
DEFAULT
5.04 (1) Should SELLER default in the performance of any duty or
obligation under this Agreement, which precludes or prevents Closing under this
Agreement. Buyer shall have the right, at Buyer's option, to (a) terminate this
Agreement, in which event the
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Deposit Monies shall be retained by Buyer as in for Buyer's liquidated and
agreed upon damages without any further loss, damage, right or remedy in favor
of either party against the other except as set froth in Paragraph 2.01 of this
Agreement and except as may be otherwise expressly provided herein; or (b) seek
to prosecute an action for specific performance hereunder and recover of all
fees, costs, and expenses incurred including attorney fees.
(2) Should BUYER default in the performance of any duty or
obligation under this Agreement and which results in BUYER's failure to proceed
to Closing under this Agreement, SELLER's sole remedy shall be the entitlement
to and retention of the Deposit Monies as liquidated damages. SELLER shall not
be entitled to pursue any other claim, right or remedy against BUYER, either at
law or in equity.
PRORATIONS
5.05. There shall be prorated between SELLER and BUYER as of Closing on
the basis of thirty (30) -day months:
(1) Real and personal property taxes for the current tax year levied
or assessed against said property (including any water tax or
water rate levied against said property for the furnishing of
water thereto) based on the latest available tax bills whether
for that year or the preceding tax year.
(2) Premiums on all insurance policies insuring said property against
damage or destruction that have been approved by and are being
transferred to BUYER.
(3) Charges accruing for the period in which Closing occurs on the
Service Contracts.
BONDS AND ASSESSMENTS
5.06. Any bonds or improvement assessments which are a lien on said
property shall, at Closing, be paid by SELLER.
BROKER'S COMMISSION
5.07. Except for CB Richard Ellis, ("Broker") each party hereto represents
and warrants to the other that it has not employed or retained any broker or
finder in connection with the transaction contemplated by this Agreement which
would entitle such person to a fee or commission in connection with this
transaction. Seller agrees that if, as and when Closing takes place under this
Agreement Seller will pay to Broker a commission for services rendered pursuant
to a separate agreement entered into by and between Seller and Broker in full
satisfaction of all obligations to Broker for the services rendered by Broker in
connection with the transaction provided for by this Agreement and Buyer shall
have no liability therefor. Each party hereby agrees to indemnify and hold the
other harmless from and against any loss, cost, claim, demand or expense
(including attorney's fees) which may be incurred or sustained by such other
party by virtue of any claim for fee or commission made against it by any broker
or other person claiming through the other party to this Agreement, which
indemnification and hold harmless agreement shall survive Closing.
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EXPENSES OF SETTLEMENT
5.08. The expenses of settlement described in this Article shall be paid in
the following manner:
(1) BUYER shall pay:
(a) The full cost of securing the title insurance policy.
(b) The full cost of preparing, executing, and acknowledging
any deeds or other instruments required to convey to BUYER
good and marketable title to the Premises.
(c) Cost of Survey
(2) The SELLER shall pay:
(a) The full cost of preparing, executing and acknowledging
any mortgage satisfactions or other instruments required
to convey to BUYER good and marketable tile to the
Premises.
(3) Any transfer taxes imposed by any governmental body shall be
paid by BUYER and SELLER in equal proportions.
ARTICLE 6. MISCELLANEOUS
RISK OF LOSS
6.01. (1) Fire or Other Casualty. Except as herein provided, damage to
----------------------
the Premises by fire or other casualty between the date hereof and the date of
Closing shall not impair the obligations of either party under this Agreement.
In the event that the Premises is damaged by fire or other casualty the net
proceeds of any insurance collected prior to Closing together with the amount of
any deductible will be paid or credited to Buyer at Closing and all unpaid
claims and rights in connection therewith will be assigned to Buyer at Closing
and, as between Seller and Buyer, Buyer shall be responsible for the making of
any repairs which Buyer elects to have made. The amount of any unpaid claims
will not, however, be credited on account of the Purchase Price. Notwithstanding
the foregoing, in the event of a loss valued at more than $30,000.00, either
Seller or Buyer may within 10 days following such loss, terminate this Agreement
by notice to the other party, in which event the Deposit Monies shall be
returned to Buyer without any further right or remedy in favor of either party
against the other.
(2) Condemnation. Seller agrees to give Buyer written notice of any
------------
action or proceeding instituted or pending in eminent domain or
for condemnation affecting any part of the Premises promptly
after Seller's receipt thereof If prior to Closing all or a
substantial portion of the Premises (and, for the purposes of
this Agreement, a "substantial portion" shall be deemed to
include any portion of the Premises which includes a portion of
the building or which materially and adversely affects access
to the building, the parking or which otherwise
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materially and adversely affects the use and enjoyment of the
Premises) is taken by condemnation or eminent domain proceeding
or other transfer in lieu thereof (or in the event any notice
of any of the foregoing shall be delivered), Buyer shall have
the right to terminate this Agreement by notice to the other
party within 10 days after the receipt of notice of such
proceedings, in which event the Deposit Monies shall be
returned to Buyer and neither party shall have any further
liability or obligation hereunder. In the event of a partial
taking of less than a substantial portion of the Premises this
Agreement shall continue in full force and effect and Seller
shall, at Closing, credit or assign to Buyer all of Seller's
right, title and interest in the condemnation award and all
other rights or claims arising out of or in connection with any
such eminent domain or condemnation action or proceeding.
Venue & Jurisdiction
6.02 (1) SELLER and BUYER agree that in the event of any dispute,
disagreement or claim, legal and/or equitable venue shall lie with the Court of
Common Pleas of Bucks County and the parties by this Agreement submit to the
jurisdiction of the Court.
(2) Notwithstanding Subparagraph (I) supra, SELLER and BUYER may
-----
agree to submit any claim, controversy or dispute to arbitration pursuant to the
Commercial Arbitration Rules of the American Arbitration Association amended and
effective July 1996. Any decision or award of arbitration shall be final and
binding upon the parties, excepted as provided by law under the provisions of
the Uniform Arbitration Act, 42 Pa. C.S.A. Section 7301 et seq.
------
Notices
6.03. Whenever in this Agreement it shall be required or permitted that
notice or demand be given or served by either party hereto on the other, such
notice or demand shall be given or served and shall not have been deemed to have
been duly given or served, unless in writing, and forwarded by certified mail,
return receipt requested, addressed as follows, or to such other address as
changed hereunder, or by nationally-recognized private delivery service issuing
return receipts, such as Federal Express or via facsimile, addressed as follows,
or to such other address as changed by notice hereunder:
IF TO SELLER: Notices by nationally-recognized United State Mail and/or private
delivery service issuing return receipts shall be sent to:
Oxis Instruments, Inc
c/o Jon Pitcher
6040 N. CutterCircle, Suite 317
Portland, Oregon 972 17-3935
Facsimile -- 503-283-4058
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COPY TO: Robert P. Krauss, Esquire
Mesirov, Gelman, Jaffe, Cramer & Jamieson, LLP
1735 Market Street
Philadelphia, PA 19103
Facsimile -- 215-994-1111
IF TO BUYER Giuliano Family Limited Partnership
Attention: Jerome Giuliano, General Partner
% deGrouchy, Sifer & Company
892 Second Street Pike
Richboro, PA 18954-1005
Facsimile 215-322-0205
COPY TO: Dennis P. Denard, Esquire
Liederbach, Hahn, Foy & Petri, P.C.
892 Second Street Pike, Suite C
Richboro, PA 18954-1005
Facsimile -- 215-322-7646
If any such notice or demand required under this Agreement shall be
given in accordance with the foregoing requirements, said notice or demand shall
be deemed to have been given as of the date said notice was actually received by
the party to whom it is directed.
SELLER COOPERATION
6.04. SELLER agrees to cooperate with BUYER in order for BUYER to
fulfill all conditions or obligations under this Agreement, including but not
limited to executing all documents, applications, instruments or other
writings required before or subsequent to Closing.
ENTIRE AGREEMENT
6.05. This instrument contains the entire agreement between BUYER and
SELLER respecting said property, and any agreement or representation
respecting said property or the duties of either BUYER or SELLER in relation
thereto not expressly set forth in this instrument is null and void.
CAPTIONS
6.06. The captions contained herein are inserted only for the purposes
of convenient reference and in no way define, limit or describe the scope or
intent of this Agreement or any part thereof
NO RECORDING
6.07. This Agreement may not be recorded in any office of public record.
CONSTRUCTION OF AGREEMENT
6.08. This Agreement shall be construed and enforcement in accordance
with the laws of this Commonwealth of Pennsylvania.
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IN WITNESS WHEREOF BUYER has executed this Agreement the day and year
first above written.
SELLER:
Attest: OXIS INSTRUMENTS, INC.
/s/ Terryl Dank /s/ Jon S. Pitcher
-------------------------- ----------------------------------
Controller Secretary
BUYER:
GIULIANO FAMILY LIMITED PARTNERSHIP
Witness: A Pennsylvania Limited Partnership
/s/ Dennis Denard /s/ Jerry Giuliano
-------------------------- ----------------------------------
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EXHIBIT 10(B)
SUBLEASE AGREEMENT
------------------
1. PARTIES:
This Agreement, made this 19/th/ day of February, one thousand nine hundred and
ninety-nine (1999), by and between CAL-CHIP ELECTRONICS, INC., a Pennsylvania
corporation, (hereinafter called "Landlord") and OXIS INSTRUMENTS, INC., a
Pennsylvania corporation, (hereinafter called "Tenant").
2. PREMISES:
WITNESSETH THAT: Landlord does hereby demised and let unto Tenant a portion of
all that certain real property and improvements known as 55 Steam Whistle Drive,
Ivyland, Northampton Township, county of Bucks, State of Pennsylvania, to be
used and occupied for office and warehouse and for no other purpose.
3. TERM:
For the term beginning the 19/th/ day of February, one thousand nine hundred and
ninety-nine (1999, and ending the 29/th/ day of February, two thousand (2000).
4. RENT:
For the annual rent of eight-eight thousand five hundred thirty-six ($88,536.00)
dollars, lawful money of the United States of America, payable in monthly
installments in advance during the said term of this lease, or any renewal
hereof, in sums of seven thousand three hundred seventy-eight ($7,378.00)
dollars on the 1/st/ day of each month, rent to begin from the 19/th/ day of
February, 1999, the first installment to be paid at the time of signing this
lease.
5. INABILITY TO GIVE POSSESSION:
If Landlord is unable to give Tenant possession of the demised premises, as
herein provided, by reason of the holding over of a previous occupant, or by
reason of any cause beyond the control of the Landlord, the Landlord shall not
be liable in damages to the Tenant therefor, and during the period that the
Landlord is unable to give possession, all rights and remedies of both parties
hereunder shall be suspended.
6. ADDITIONAL RENT:
(A) Damages for Default
(This paragraph intentionally omitted.)
(B) Taxes
Tenant further agrees to pay as rent in addition to the minimum rental herein
reserved all taxes assessed or imposed upon the demised premises during the term
of this lease covered by the term hereof. The same shall be paid by Tenant to
Landlord within fifteen (15) days following the receipt by Tenant of any bill.
(C) Fire Insurance Premiums
(This paragraph intentionally omitted.)
(D) Water Rent
(This paragraph intentionally omitted.)
(E) Sewer Rent
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(This paragraph intentionally omitted.)
7. PLACE OF PAYMENT:
All rents shall be payable without prior notice or demand at the office of
Landlord at 55 Steam Whistle Drive, Ivyland, PA 18974, or at such other place
as Landlord may from time to time designate by notice in writing.
8. AFFIRMATIVE COVENANTS OF TENANT:
Tenant covenants and agrees that he will without demand
(A) Payment of Rent
Pay the rent and all other charges herein reserved as rent on the days
and times and at the place that the same are made payable, without
fail, and if Landlord shall at any time or times accept said rent
charges after the same shall have become due and payable, such
acceptance shall not excuse delay upon subsequent occasions, or
constitute or be construed as a waiver of any of Landlord's rights.
Tenant agrees that any charge, or payment herein reserved, included or
agreed to be treated or collected as rent and/or any other charges or
taxes, expenses, or costs herein agreed to be paid by the Tenant may
be proceeded for and recovered by the Landlord by distraint or other
process in the same manner as rent due and in arrears.
(B) Cleaning, Repairing, etc.
Keep the demised premises clean and free from all ashes, dirt and
other refuse matter: replace all glass windows, doors, etc., broken:
keep all waste and drain pipes open: repair all damage to plumbing and
to the premises in general: keep the same in good order and repair as
they now are, reasonable wear and tear and damage by fire or other
insured casualty excepted. The Tenant agrees to surrender the demised
premises in the same condition in which Tenant has herein agreed to
keep the same during the continuance of this Lease.
(C) Requirements of Public Authorities
Comply with any requirements of any of the constitutes public
authorities, and with the terms of any State or Federal statute or
local ordinance or regulation applicable to Tenant or his use of the
demised premises, and save landlord harmless form penalties, fines,
costs or damages resulting from failure to do so.
(D) Fire
Use every reasonable caution against fire.
(E) Rules and Regulations
Comply with reasonable rules and regulations of Landlord promulgated
as hereinafter provided.
(F) Surrender of Possession
Peaceably deliver up and surrender possession of the demised premises
to the Landlord at the expiration or sooner termination of this lease,
promptly delivering to Landlord at this office all keys for the
demised premises.
(G) Notice of Fire, etc.
Give to Landlord prompt written notice of any accident, fire, or
damage occurring on or to the demised premises.
(H) Condition of Pavement
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Tenant shall be responsible for the condition of the pavement, curb,
cellar doors, awnings and other erections in the pavement during the
term of this lease: shall keep the pavement free from snow and ice,
and shall be and hereby agrees that the Tenant is solely liable for
any accidents, due or alleged to be due to their defective condition,
or to any accumulations of snow or ice.
(I) Agency on Removal
The Tenant agrees that if, with the permission in writing of Landlord,
Tenant shall vacate or decide at any time during the term of this
lease, or any renewal thereof, to vacate the herein demised premises
prior to the expiration of this lease, or any renewal hereof, Tenant
will not cause or allow any other agent to represent Tenant in any
subletting or reletting of the demised premises other than agent
approved by the Landlord and that should Tenant do so or attempt to do
so, the Landlord may remove any signs that may be placed on or about
the demised premises by such other agent without any liability to
Landlord or to said agent, the Tenant assuming all responsibility for
such action.
9. NEGATIVE COVENANTS OF TENANT:
Tenant covenants and agrees that he will do none of the following things without
the consent in writing of Landlord first had and obtained.
(A) Use of Premises
Occupy the demised premises in any other manner or for any other
purpose than as above set forth.
(B) Assignment and Subletting
Assign, mortgage or pledge this lease or under-let or sub-lease the
demised premises, or any part thereof, or permit any other person,
firm or corporation to occupy the demised premises or any part
thereof: nor shall any assignee or sub-Tenant assign, mortgage or
pledge this lease or such sub-lease, without an additional written
consent by the Landlord, and without such consent no such assignment,
mortgage or pledge shall be valid. If the Tenant becomes insolvent, or
makes assignment for the benefit of creditors, or if a petition in
bankruptcy is filed by or against the Tenant or a bill in equity or
other proceeding for the appointment of a receiver for the Tenant is
filed, or if the real or personal property of the Tenant shall be sold
by any Sheriff, Marshall or Constable, the same shall be a violation
of this covenant.
(C) Signs
Place or allow to be placed any stand, booth, sign or show case upon
the doorsteps, vestibules or outside walls or pavements of said
premises, or paint, place, erect or cause to be painted, placed or
erected any sign, projection or devise on or in any part of the
premises. Tenant shall remove any sign, projection or device painted,
placed or erected, if permission has been granted and restore the
walls, etc. to their former conditions, at or prior to the expiration
of this lease. In case of the breach of this covenant (in addition to
all other remedies give to Landlord in case of breach of any
conditions or covenants of this lease), Landlord shall have the
privilege of removing said stand, booth, sign, show case, projection
or device, and restoring said walls, etc. to their former condition,
and Tenant, at Landlord's option, shall be liable to Landlord
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for any and all expenses so incurred by Landlord.
(D) Alterations, Improvements
Make any alterations, improvements, or additions to the demised
premises. All alterations, improvements, additions or fixtures,
whether installed before or after the execution of this lease, shall
remain upon the premises at the expiration or sooner determination of
this lease and become the property of Landlord, unless Landlord shall,
prior to the determination of this lease, have given written notice to
Tenant to remove the same, in which event Tenant will remove such
alteration, improvements and additions and restore the premises to the
same good order and condition in which there now are. Should Tenant
fail so to do, Landlord may do so, collecting, at Landlord's option,
the cost and expense thereof from Tenant as additional rent.
(E) Machinery
Use or operate any machinery that, in Landlord's opinion, will damage
any structural component of the building or disturbing to other
tenants occupying other parts thereof.
(F) Weights
Place any weights in any portion of the demised premises beyond the
safe carrying capacity of the structure.
(G) Fire Insurance
Do or suffer to be done, any act, matter or thing objectionable to the
fire insurance companies whereby the fire insurance or any other
insurance now in force or hereafter to be placed on the demised
premises, or any part thereof, or on the building of which the demised
premises may be a part, shall come void or suspended, or whereby the
same shall be rated as a more hazardous risk than at the date of
execution of this lease, or employ any person or persons objectionable
to the fire insurance companies or carry or have any benzine or
explosive matter of any kind in and about the demised premises. In
case of a breach of this covenant (in addition to all other remedies
give to Landlord in case of the breach of any of the conditions or
covenants of this lease), Tenant agrees to pay to Landlord as
additional rent any and all increase or increases of premiums on
insurance carried by Landlord on the demised premises, or any part
thereof, or on the building of which the demised premises may be a
part, caused in any way by the occupancy of Tenant.
(H) Removal of Goods
Remove, attempt to remove or manifest an intention to remove Tenant's
goods or property from or out of the demised premises otherwise than
in the ordinary and usual course of business, without having first
paid and satisfied Landlord for all rent which may become due during
the entire term of this lease.
(I) Vacate Premises
Vacate or desert said premises during the term of this lease, or
permit the same to be empty and unoccupied without the payment of
rent.
10. LANDLORD'S RIGHTS:
Tenant covenants and agrees that Landlord shall have the right to do the
following things and matters in and about the demised premises.
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(A) Inspection of Premises
At all reasonable time by himself or his duly authorized agents to go
upon and inspect the demised premises and every part thereof, and/or
at his option to make repairs, alternations and additions to the
demised premises or the building of which the demised premised is a
part.
(B) Rules and Regulations
At any time and from time to time to make such rules and regulations
as in his judgement may from time to time be necessary for the safety,
care and cleanliness of the premises, and for the preservation of good
order therein. Such rules and regulations shall, when notice thereof
is given to Tenant, form a part of this lease.
(C) Sale or Rent Sign - Prospective Purchasers or Tenants
To display a "For Sale" sign at any time, and also after notice from
either party of intention to determine this lease, or at any time
within three (3) months prior to the expiration of this lease, a "For
Rent" sign, or both "For Rent" and "For Sale" signs: and all of said
signs shall be placed upon such party of the premises as Landlord may
elect and may contain such matter as Landlord shall require.
Prospective purchasers or tenants authorized by Landlord may inspect
the premises at reasonable hours at any time.
(D) Discontinue Facilities and Service
The Landlord may discontinue all facilities furnished and services
rendered, or any of them, by Landlord, not expressly convenanted for
herein, it being understood that they constitute no part of the
consideration for this lease.
11. RESPONSIBILITY OF TENANT:
(A) Tenant agrees to be responsible for and to relieve and hereby relieves
the Landlord from all liability of any injury or damage to any person
or property in the demised premises, whether belonging to the Tenant
or any other person, caused by any fire, breakage or leakage in any
part or portion of the demised premises, or any part or portion of the
building of which the demised premises is a part, or from water, rain
or snow that may leak into, issue or flow from any part of the said
premises, or of the building of which the demised premises is a part,
or from the drains, pipes or plumbing work of the same, or from any
place or quarter, whether such breakage, leakage, injury or damage be
caused by or result from the negligence of Landlord or his servants or
agents or any person or persons whatsoever.
(B) Tenant also agrees to be responsible for and to relieve and hereby
relieves Landlord from all liability by reason of any damage or injury
to any person or thing which may arise from or be due to the use,
misuse or abuse of all or any of the elevators, hatches, openings,
stairways, hallways, of any kind whatsoever, which may exist or
hereafter be erected or constructed on the said premises, or from any
kind of injury which may arise from any other cause whatsoever on the
said premises or the building of which the demised premises is a part,
whether such damage, injury, use, misuse or abuse be caused by or
result from the negligence of Landlord, his servants or agents or any
other person or persons whatsoever.
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12. RESPONSIBILITY OF LANDLORD:
(A) Total Destruction of Premises
In the event that the demised premises is totally destroyed or so
damaged by fire or other casualty not occurring through fault or
negligence of the Tenant or those employed by or acting for him, that
the same cannot be repaired or restored within a reasonable time, this
lease shall absolutely cease and determine and the rent shall abate
for the balance of the term.
(B) Partial Destruction of Premises
If the damage caused as above be only partial and such that the
premises can be restored to their then condition within a reasonable
time, the Landlord may, at his option, restore the same with
reasonable promptness: reserving the right to enter upon the demised
premises for that purpose. The Landlord also reserves the right to
enter upon the demised premises whenever necessary to repair damage
caused by fire or other casualty to the building of which the demised
premises is a part, even though the effect of such entry be to render
the demised premises or a part thereof untenantable. In either event
the rent shall be apportioned and suspended during the time the
Landlord is in possession, taking into account the proposition of the
demised premises rendered untenantable and the duration of the
Landlord's possession. If a dispute arises as to the amount of rent
due under this clause, Tenant agrees to pay the full amount claimed by
Landlord. Tenant shall, however, have the right to proceed by law to
recover the excess payment, if any.
(C) Repairs by Landlord
Landlord shall make such election to repair the premises or terminate
this lease by giving notice thereof to Tenant at the leased premises
within thirty (30) days from the day Landlord received notice that the
demised premises had been destroyed or damaged by fire or other
casualty.
(D) Damage for Interruption of use
Landlord shall not be liable for any damage, compensation or claim by
reason of inconvenience or annoyance arising from the necessity of
repairing any portion of the building, the interruption in the use of
the premises, or the termination of this lease by reason of the
destruction of the premises.
(E) Representation of Condition of Premises
The Landlord has let the demised premises in their present condition
and without any representations on the part of the Landlord, his
officers, employees, servants and/or agents. It is understood and
agreed that Landlord is under no duty to make repairs or alternations
at the time of letting or at any time thereafter, except as otherwise
provided herein.
(F) Zoning
It is understood and agreed that the Landlord hereof does not warrant
or undertake that the Tenant shall be able to obtain a permit under
any Zoning Ordinance or regulation for such use as Tenant intends to
make of the said premises, and nothing in this lease contained shall
obligate the Landlord to assist Tenant in obtaining said permits: the
Tenant further agrees that in the event a permit cannot be obtained by
Tenant under any Zoning Ordinance or
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Regulation, this lease shall not terminate without Landlord's consent,
and the Tenant shall use the premises only in a manner permitted under
such Zoning Ordinance or Regulation.
13. MISCELLANEOUS AGREEMENT AND CONDITIONS:
(A) Effect of Repairs on Rental
No contract entered into or that may be subsequently entered into by
Landlord with Tenant, relative to any alterations, additions,
improvements or repairs, nor the failure of Landlord to make such
alterations, additions, improvements or repairs as required by any
such contract, nor the making by Landlord or his agents or contractors
of such alterations, additions, improvements or repairs shall in any
way affect the payment of the rent or said other charges at the time
specified in this lease, except as provided herein, and provided that
Tenant is not otherwise denied the use of the demised premises.
(B) Agency
It is hereby expressly agreed and understood that the said
___________________ _______________________ is acting as agent only
and shall not in any event be held liable to the owner or to Tenant
for the fulfillment or non-fulfillment of any of the terms or
conditions this lease, or for any actions or proceedings that may be
taken by the owner against Tenant, or by Tenant against the owner.
(C) Waiver of Custom
It is hereby covenanted and agreed, any law, usage or custom to the
contrary notwithstanding, that the Landlord shall have the right at
all times to enforce the covenants and provisions of this lease in
strict accordance with the terms hereof, notwithstanding any conduct
or custom on the part of the Landlord in refraining from so doing at
any time or times: and, further, that the failure of Landlord at any
time or times to enforce his rights under said covenants and
provisions strictly in accordance with the same shall not be construed
as having created a custom in any way or manner contrary to the
specific terms, provisions and covenants of this lease or as having in
any way or manner modified the same.
(D) Conduct of Tenant
This lease is granted upon the express condition that Tenant and/or
the occupants of the premises herein leased, shall not conduct
themselves in a manner which the Landlord in his sole opinion may deem
improper or objectionable, and that if at any time during the term of
this lease or any extension or continuation thereof, Tenant or any
occupier of the said premises shall have conducted himself, herself,
or themselves in a manner which Landlord in his sole opinion deems
improper or objectionable, Tenant shall be taken to have broken the
covenants and conditions of this lease, and Landlord will be entitled
to all of the rights and remedies granted and reserved herein for the
Tenant's failure to observe any of the covenants and conditions of
this lease.
(E) Failure of Tenant to Repair
In the event of the failure of Tenant promptly to perform the
covenants of Section 8 (B) hereof, Landlord may go upon the demised
premises and perform such covenants, the cost thereof, at the sole
opinion of Landlord, to be charged
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to Tenant as additional and delinquent rent.
14. REMEDIES OF LANDLORD:
If the Tenant
(A) Does not pay in full when due any and all installments of rent and/or
any other charge or payment herein reserved, included, or agreed to be
treated or collected as rent and/or any other charge, expense, or cost
herein agreed to be paid by the Tenant: or
(B) Violates or fails to perform or otherwise breaks any covenant or
agreement herein contained: or
(C) Vacates the demised premises or removes or attempts to remove or
manifests an intention to remove any goods or property therefrom
otherwise than in the ordinary and usual course of business without
having first paid and satisfied the Landlord in full of all rent and
other charges then due or that may thereafter become due until the
expiration of the then current term above mentioned: or
(D) Becomes insolvent, or makes an assignment for the benefit of
creditors, or if a petition in bankruptcy is filed by or against the
Tenant, or a bill in equity or other proceeding for the appointment of
a receiver for the Tenant is filed, or if proceedings for
reorganization or for composition with creditors under any State or
Federal law be instituted by or against Tenant or if the real or
personal property of the Tenant shall be sold by any Sheriff, Marshal
or constable: then in any or either of said events, there shall be
deemed to be a breach of this lease, and thereupon ipso facto and
without entry or other action by Landlord.
1. The rent for the entire unexpired balance of the term of this
lease, as well as all other charges, payments, costs and expenses
herein to be paid by the Tenant, and all sums which may become
due by reason of the failure of Tenant to comply with all
covenants of this lease and pay any and all damages, costs and
expenses which the Landlord may suffer or incur by reason of any
default of the Tenant or failure on his part to comply with the
covenants of this lease, and each of them, and also any and all
damages of the demised premises caused by any act or neglect of
the Tenant, or at the option of Landlord any part thereof, and
also all costs and officers' commissions including watchmen's
wages and further including the five (5%) percent chargeable by
Act of Assembly to the Landlord, shall, in addition to any and
all installments of rent already due and payable and in arrears
and/or any other charge or payment herein reserved, included or
agreed to be treated or collected as rent, and/or any other
charge, expense or cost herein agreed to be paid by the Tenant
which may be due and payable and in arrears, be taken to be due
and payable and in arrears, as if by the terms and provisions of
this lease, the whole balance of unpaid rent and other charges,
payments, taxes, costs and expenses were on that date payable in
advance: and if this lease or any part thereof is assigned, or
if the premises or any part hereof is sub-let, Tenant hereby
irrevocably constitutes and appoints Landlord Tenant's agent to
collect the rents due by such assignee or sub-Tenant and apply
the same to the rent due hereunder without in any way
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affecting Tenant's obligation to pay any unpaid balance of rent
due hereunder.
2. This lease and the term hereby created shall determine and become
absolutely void without any right on the part of the Lessee to
save the forfeiture by payment of an sum due or by other
performance of any condition, term or covenant broken: whereupon,
Lessor shall be entitled to recover damages for such breach in
any amount equal to the amount of rent reserved for the balance
of the terms of this lease, less the fair rental value of the
said demised premises, for the residue of said term.
15. FURTHER REMEDIES OF LANDLORD:
In the event of any default as above set forth in Section 14, the Landlord, or
anyone acting on Landlord's behalf, at Landlord's option:
(A) may without notice or demand enter the demised premises, breaking open
locked doors if necessary to effect entrance, without liability to
action for prosecution or damages for such entry or for the manner
thereof, for the purpose of distraining or levying and for any other
purposes, and take possession of and sell all goods and chattels at
auction, on three (3) days notice served in person on the Lessee or
left on the premises, and pay the said Landlord out of the proceeds,
and even if the rent be not due and unpaid, should the Lessee at any
time remove or attempt to remove goods and chattels from the premises
without leaving enough thereon to meet the next periodical payment,
Lessee authorizes the Landlord to follow for a period of ninety (90)
days after such removal, take possession of and sell at auction, upon
like notice, sufficient of such goods to meet the proportion of rent
accrued at the time of such removal: and the Lessee hereby releases
and discharges the Landlord, and his agents, from all claims, actions,
suits, damages, and penalties, for or on account of any entry,
distraint, levy, appraisement or sale: and/or
(B) may enter the premises and without demand proceed by distress and sale
of the goods there found to levy the rent and/or other charges herein
payable as rent and all costs and officers' commissions, including
watchmen's wages and sums chargeable to Landlord and further including
a sum equal to five (5%) percent of the amount of the levy as
commissions to the constable or other person making the levy, shall be
paid by the Lessee and in such case all costs, officers' commission
and other charges shall immediately attach and become part of the
claim of Landlord for rent, and any tender of rent without said costs,
commission and charges made after the issue of a warrant of distress
shall not be sufficient to satisfy the claim of the Landlord. Lessee
hereby expressly waives in favor of Landlord the benefit of all laws
now made or which may hereafter be made regarding any limitation as to
the goods upon which, or the time within which distress is to be made
after removal of goods and further relieves the Landlord of the
obligations of proving or identifying such goods, it being the purpose
and intent of this provision that all goods of Lessee, whether upon
the demised premises or not, shall be liable to distress for rent.
Lessee waives in favor of Landlord all rights under the Act of
Assembly of April 5, 1951 P.L. 69 and all supplements and amendments
thereto that have been or
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may hereafter be passed and authorizes the sale of any goods
distrained for rent at any time after five (5) days from said
distraint without any appraisement and/or condemnation thereof.
(C) The Lessee further waives the right to issue a Writ of Replevin under
the Pennsylvania Rules of Civil Procedure, No. 1071 &c. and Laws of
the Commonwealth of Pennsylvania, or under any other law previously
enacted and now in force, or which may be hereafter enacted, for the
recovery of any articles, household goods, furniture, etc., seized
under a distress for rent or levy upon an execution for rent, damages
or otherwise: all waivers hereinbefore mentioned are hereby extended
to apply to any such action: and/or
(D) may lease said premises or any part or parts thereof to such person or
persons as may in Landlord's discretion seem best and the Lessee shall
be liable for any loss of rent for the balance of the then current
term.
16. CONFESSION OF JUDGEMENT:
If rent and/or any charges hereby reserved as rent shall remain unpaid on any
day when the same ought to be paid, Lessee hereby empowers any Prothonotary
Clerk of Court or attorney of any Court of Record to appear for Lessee in any
and all actions which may be brought for rent and/or the charges, payments,
costs and expenses reserved as rent, or agreed to be paid by the Lessee and/or
sign for Lessee an agreement for entering in any competent Court an amicable
action or actions, for the recovery of rent or other charges, payments, costs
and expenses and in said suits or in said amicable action or actions to confess
judgement against Lessee for all or any part of the rent specified in this lease
and then unpaid including, at Landlord's option, the rent for the entire expired
balance for the term of this lease and/or other charges, payments, costs, and
expenses reserved as rent or agreed to be paid by the Lessee and for interest
and costs together with an attorney's commission of five (5%) percent. Such
authority shall not be exhausted by one exercise thereof, but judgement may be
confessed as aforesaid from time to time as often as any of said rent and/or
other charges, payments, costs and expenses, reserved as rent shall fall due or
be in arrears and such powers may be exercised as well after the expiration of
the original term and/or during any extension or renewal of this lease.
17. EJECTMENT:
When this lease shall be determined by condition broken, either during the
original terms of this lease or any renewal or extension thereof and also when
and as soon as the term hereby created or any extension thereof shall have
expired, it shall be lawful for any attorney as attorney for Tenant to file an
agreement for entering in any competent Court an amicable action and judgement
in ejectment against Tenant and all persons claiming under Tenant for the
recovery by Landlord of possession of the herein demised premises, for which
this lease shall be his sufficient warrant, whereupon, if Landlord so desires, a
writ of Execution or of Possession may issue forthwith, without any prior writ
or proceedings whatsoever and provided that if for any reason after such action
shall have been commenced the same shall be determined and the possession of the
premises hereby demised remain in or be restored to Tenant, Landlord shall have
the right upon any subsequent default or defaults, or upon the termination of
this lease as hereinbefore set forth, to bring one or more amicable action or
actions as hereinbefore set forth to recover possession of the said premises.
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18. AFFIDAVIT OF DEFAULT:
In any amicable action of ejectment, Landlord shall first cause to be filed in
such action an affidavit made by him or someone acting for him setting forth the
facts necessary to authorize the entry of judgement, of which facts such
affidavit shall be conclusive evidence and if a true copy of this lease (and of
the truth of the copy such affidavit shall be sufficient evidence) be filed in
such action, it shall not be necessary to file the original as a warrant of
attorney, any rule of Court, custom or practice to the contrary notwithstanding.
19. WAIVERS BY TENANT OF ERRORS, RIGHT OF APPEAL, STAY EXEMPTION, INQUISITION:
Tenant expressly agrees that any judgement, order or decree entered against him
by or in any Court or Magistrate by virtue of the powers of attorney contained
in this lease, or otherwise shall be final and that he will not take an appeal,
certiorari, writ of error, exception or objection to the same, or file a motion
or rule to strike off or open or to stay execution of the same and releases to
Landlord and to any and all attorneys who may appear for Tenant all errors in
the said proceedings and all liability therefor. Tenant expressly waives the
benefits of all laws, now or hereafter in force, exempting any goods on the
demised premises, or elsewhere from distraint, levy or sale in any legal
proceedings taken by the Landlord to enforce any rights under this lease.
Tenant further waives the right of inquisition on any real estate that may be
levied upon to collect any amount which may become due under the terms and
conditions of this lease and does hereby voluntarily condemn and authorizes the
Prothonotary or Clerk of Court to issue a Writ of Execution or other process
upon Tenant's voluntary condemnation and further agrees that the said real
estate may be sold on a Writ of Execution or other process. If proceedings
shall be commenced by Landlord to recover possession under the Acts of Assembly,
either at the end of the term or sooner termination of this lease. Tenant
specifically waives the right to the three (3) months: notice and/or the
fifteen (15) or thirty (30) days' notice required by the Act of April 5, 1951,
P.L. 69, and agrees the five (5) days' notice shall be sufficient in either or
any other case.
20. RIGHT OF ASSIGNEE OF LANDLORD:
The right to enter judgement against Tenant and to enforce all of the other
provisions of this else hereinabove provided for may, at the option of any
assignee of this lease, be exercised by any assignee of the Landlord's right,
title and interest in this lease in his, her or their own name, notwithstanding
the fact that any or all assignments of the said right, title and interest may
not be executed and/or witnessed in accordance with the Act of Assembly of May
28, 1715, 1 Sm. L. 90, and all supplements and amendments thereto that have been
or may hereafter be passed and Tenant hereby expressly waives the requirements
of said Act of Assembly and any and all laws regulating the manner and/or form
in which such assignments shall be executed and witnessed.
21. REMEDIES CUMULATIVE:
All of the remedies hereinbefore given to Landlord and all rights and remedies
given to him by law and equity shall be cumulative and concurrent. No
determination of this lease or the taking or recovering of the premises shall
deprive Landlord of any of his remedies or action against the Tenant for rent
due at the time or which, under the terms hereof, would in the future become due
if there had been no determination, or for any and all sums due at the time or
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which, under the terms hereof , would in the future become due as if there had
been no determination, nor shall the bringing of any action for rent or breach
of covenant, or the resort to any other remedy herein provided for the recovery
of rent be construed as a waiver of the right to obtain possession of the
premises.
22. CONDEMNATION:
In the event that the premises demised or any part thereof is taken or condemned
for a public or quasi-public use, this lease shall, as to the part so taken,
terminate as of the date title shall vest in the condemnor and rent shall abate
in proportion to the square feet of leased space taken or condemned or shall
cease if the entire premises be so taken. In either event, the Tenant waives
all claims against the Landlord by reason of the complete or partial taking of
the demised premises and it is agreed that the Tenant shall not be entitled to
any notice whatsoever of the partial or complete termination of this lease by
reason of the aforesaid.
23. SUBORDINATION:
This Agreement of Lease and all its terms, covenants and provisions are and each
of them is subject and subordinate to any lease or other arrangement or right to
possession, under which the Landlord is in control of the demised premises, to
the rights of the owner or owners of the demised premises and of the land or
buildings of which the demises premises are a part, to all rights of the
Landlord's landlord and to any and all mortgages and other encumbrances now or
hereafter placed upon the demised premises or upon the land and/or the buildings
containing the same: and Tenant expressly agrees that if Landlord's tenancy,
control, or right of possession shall terminate either by expiration, forfeiture
or otherwise, then this lease shall thereupon immediately terminate and the
Tenant shall, thereupon, give immediate possession: and Tenant hereby waives
any and all claims for damages or otherwise by reason of such termination as
aforesaid.
24. TERMINATION OF LEASE:
It is hereby mutually agreed that either part hereto may determine this lease at
the end of said term by giving to the other party written notice thereof at
least _____________________ prior thereto, but in default of such notice, this
lease shall continue upon the same terms and conditions in force immediately
prior to the expiration of the term hereof as are herein contained for a further
period of _______________________ and so on from ______________________ to
_______________________ unless or until terminated by either party hereto,
giving the other ________________________ written notice for removal previous to
expiration of the then current term: PROVIDED, however, that should this lease
be continued for a further period under the terms hereinabove mentioned, any
allowance given Tenant on the rent during the original term shall not extend
beyond such original term and further provided, however, that if Landlord shall
have given such written notice prior to the expiration of any term hereby
created, of his intention to change the terms and conditions of this lease and
Tenant shall not within ______ days from such notice notify Landlord of Tenant's
intention to vacate the demised premises at the end of the then current term,
Tenant shall be considered as Tenant under the terms and conditions mentioned in
such notice for a further term as above provided, or for such further term as
may be stated in such notice. In the event that Tenant shall give notice, as
stipulated in this lease, of intention to vacate the demised premises at the end
of the present term, or any renewal or extension thereof, and shall fail or
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refuse so to vacate the same on the date designated by such notice, then it is
expressly agreed that Landlord shall have the option either (a) to disregard the
notice so given as having no effect, in which case all the terms and of this
lease shall continue thereafter with full force precisely as if such notice had
not been give, or (b) Landlord may, at any time within thirty (30) days after
the present term or any renewal or extension thereof, as aforesaid, give the
said Tenant ten (10) days' written notice of this intention to terminate the
said lease: whereupon the Tenant expressly agrees to vacate said premises at
the expiration said period of ten (10) days specified in said notice. All
powers granted to Landlord by this lease may be exercised and all obligations
imposed upon Tenant by this lease shall be performed by Tenant as well during
any extension of the original term of this lease as during the original term
itself.
25. NOTICES:
All notices required to be given by Landlord to Tenant shall be sufficiently
given by leaving the same upon the demised premises, by notices given by Tenant
to Landlord must be given by registered mail and as against Landlord, the only
admissible evidence that notice has been given by Tenant shall be a registry
return receipt signed by Landlord or his agent.
26. LEASE CONTAINS ALL AGREEMENTS:
It is expressly understood and agreed by and between the parties hereto that
this lease and the riders attached hereto and forming a part hereof set forth
all the promises, agreements, conditions and understandings between Landlord or
his Agents and Tenant relative to the demised premises and that there are no
promises, agreements, conditions or understandings, either oral or written,
between them or other than are herein set forth. It is understood and agreed
that except as herein otherwise provided, no subsequent alternation, amendments,
change or addition to this lease shall be binding upon Landlord or Tenant unless
reduced to writing and signed by them.
27. HEIRS AND ASSIGNS:
All rights and liabilities herein given to, or imposed upon, the respective
parties hereto shall extend to and bind the several and respective heirs,
executors, administrators, successors and assigns of said parties: and if there
shall be more than one Tenant, they shall be bound jointly and severally by the
terms, covenants and agreements herein and the word "Tenant" shall be deemed and
taken to mean each and every person or party mentioned as a Tenant herein, be
the same one or more: and if there shall be more than one Tenant, any notice
required or permitted by the terms of this lease may be given by or to any one
thereof and shall have the same force and effect as if given by or to all
thereof. The word `his" and "him" wherever stated herein shall be deemed to
refer to the "Landlord" and "Tenant" whether such Landlord or Tenant be singular
or plural and irrespective of gender. No rights, however, shall inure to the
benefit of any assignee of Tenant unless the assignment to such assignee has
been approved by Landlord in writing as aforesaid.
28. SECURITY DEPOSIT:
Tenant shall, upon execution hereof, deposit with Landlord as security for the
performance of all the terms, covenants and conditions of this lease, the sum of
eleven thousand sixty-seven ($11,067.00) dollars. This deposit is to be
retained by Landlord until the expiration of this lease and shall be returnable
to Tenant provided that (1) premises have been vacated: (2)
13
<PAGE>
Landlord shall have inspected the premised after such vacation: (3) Tenant shall
have complied with all the terms, covenants and conditions of this lease, in
which event the deposit so paid hereunder shall be returned to Tenant:
otherwise, said sum deposited hereunder or any part hereof may be retained by
Landlord at this option, as liquidated damages, or may be applied by landlord
against any actual loss, damage or injury chargeable to Tenant hereinunder or
otherwise by reason of any breach of any term of this Lease. Landlord's
determination of the amount, if any, to be returned to Tenant shall be final. It
is understood that the said deposit is not to be considered as the last rental
due under the lease.
29. HEADINGS NO PART OF LEASE:
Any headings preceding the text of the several paragraphs and sub-paragraphs
hereof are inserted solely for convenience of reference and shall not constitute
a part of this lease, nor shall they affect its meaning, construction or effect.
30. ADDITIONAL PROVISIONS:
Tenant agrees to the following additional terms and conditions:
A. Tenant, at Tenant's sole cost and expense, shall comply with all
regulations, rules orders and statures of any federal, state or
municipal governmental body or agency that oversees or regulates the
Property as part of the Tenant's use of the Property.
B. Tenant shall indemnify and hold Landlord harmless of and from any and
all fines, penalties, costs and/or interest assessed by any federal,
state or municipal governmental body or agency identified in paragraph
30.A above in connection with the violation and/or failure to remedy
or comply with any statute, rule, regulation, order and/or notice,
including attorney's fee.
IN WITNESS WHEREOF, the parties hereto have executed these presents the day and
year first above written and intent to be legally bound thereby.
SEALED AND DELIVERED IN THE PRESENCE OF:
LANDLORD:
CAL-CHIP ELECTRONICS, INC.
Attest:
/s/ Diane Guiliano /s/ Jerry Guiliano
- ------------------ ------------------------------
Secretary President
TENANT:
OXIS INSTRUMENTS, INC.
Attest:
/s/ Jon Pitcher
__________________________ --------------------------------
Secretary By: Jon Pitcher
Title: Secretary
14
<PAGE>
FOR VALUE RECEIVED _______________________ hereby assign, transfer and set over
unto
____________________________________________________________________________
____________________________________________________________________________
Executors, Administrators, Successors and Assigns, all _______________ right,
title and interest within ___________________________ and all benefit and
advantages to be derived therefrom.
WITNESS __________ hand and seal this ________ day of A.D. 19___.
SEALED AND DELIVERED IN THE PRESENCE OF:
15
<PAGE>
EXHIBIT 10(C)
RIDER TO SUBLEASE AGREEMENT
---------------------------
Rider to SUBLEASE AGREEMENT (the "Lease") dated February 19, 1999 by
and between CAL-CHIP ELECTRONICS, INC., a Pennsylvania corporation ("Landlord")
and OXIS INSTRUMENTS, INC., a Pennsylvania corporation ("Tenant").
In the event of a conflict between the terms of this Rider and the
Lease, this Rider shall govern. The Lease is amended as follows:
1. Paragraph 2 is deleted and the following is substituted: Landlord
leases to Tenant and Tenant rents from Landlord the premises ("the
demised premises") being the interior only of the space designated
on the plan attached hereto as Exhibit "A" containing
approximately fourteen thousand seven hundred fifty-six (14,756)
rentable square feet in the building (hereinafter called the
"Entire Premises") located at 55 Steam Whistle Drive, Ivyland,
Pennsylvania. As an appurtenance to the demised premises, Landlord
grants to Tenant the nonexclusive license to use, in common with
others entitled thereto, all portions of Entire Premises
designated by Landlord from time to time as common facilities.
2. The following is added at the end of Paragraph 4:
The first rental payment shall be pro-rated for the partial month
of occupancy.
3. The following is added at the end of Paragraph 5:
If the time for giving possession is extended beyond March 19,
1999, Tenant shall have the right to terminate this Lease by
notice in writing to Landlord and Landlord shall pay to Tenant all
sums of money paid by Tenant to Landlord pursuant to this Lease.
4. Paragraphs 6(C)(D) and (E) are deleted and the following is
substituted:
Tenant shall pay to Landlord within fifteen (15) days following
receipt of any bill in connection therewith, Tenant's
proportionate share of costs of operation of the Entire Premises.
For the purposes of this Lease, the costs of operation of the
Entire Premises shall include, without limitation, all reasonable
and necessary expenses, costs and charges incurred in the
operation and maintenance of the Entire Premises and all other
reasonable and necessary costs, expenses or charges which Landlord
shall pay or become obligated to pay because of or in connection
with the ownership and operation of the Entire Premises, including
the following :
(1) all supplies and materials used in the normal and ordinary
operation and maintenance of the Entire Premises;
(2) all utilities (excluding tenant electric and billable
overtime) used in the operation of the Entire Premises
excluding only utilities separately billed to individual
tenants;
(3) the cost of energy used in heating, ventilating and air
conditioning the Entire Premises and the cost of
maintenance, repair and operation of all equipment and
systems installed or owned by Landlord to provide such
services;
(4) the cost of all maintenance and service agreements;
1
<PAGE>
(5) the cost of all insurance applicable to Entire Premises,
including without limitation, all risk coverage, rent
insurance, workmen's compensation, etc.; and
(6) cost of repairs, replacements and general maintenance and
building services except for capital improvements.
Notwithstanding the foregoing the following shall not be included in the
computation of the costs of operation of the Entire Premises:
(1) amounts charged for services rendered solely for the
benefit of Landlord or any other tenant;
(2) any charge for Landlord's overhead or service charge of any
nature by Landlord;
(3) legal fees incurred by Landlord; and
(4) broker's fees or leasing commissions in connection with the
leasing of portions of the Entire Premises.
5. Paragraph 8(H) is deleted.
6. The following is added at the end of Paragraph 9(B):
Notwithstanding anything contained herein to the contrary,
Landlord's consent hereafter shall not be required in the event
Tenant assigns or sublease this Lease to an assignee or subtenant
that is as creditworthy as Tenant, as determined solely by
Landlord in its reasonable judgement and notwithstanding the
provisions of this Lease to the contrary, in the event of any
assignment or sublease by Tenant, Landlord agrees to extend the
term of this Lease such that the term under such assignment or
sublease shall be no less than one (1) year.
7. Notwithstanding the provisions of paragraphs 9(C) through (G) to
the contrary, Tenant may make all interior, non-structural alterations and
improvements necessary to permit Tenant to operate its business within the
demised premises, and Tenant may erect such lawful signs upon the exterior of
the demised premises as Tenant deems reasonably necessary for the operation of
its business, subject to compliance by Tenant with all applicable ordinances and
regulations of Northampton Township. If Tenant desires to make structural
additions, alterations or improvements to the demised premises, Tenant shall
first deliver detailed plans therefor to Landlord and shall obtain Landlord's
prior written consent as otherwise provided for under the terms of this Lease.
Notwithstanding the provisions contained in this paragraph to the contrary, in
the event Northampton Township provides that only one sign shall be permitted on
the building front of the Entire Premises, Landlord and Tenant agree to equally
divide the area permitted for such sign.
8. The following is added to the end of Paragraph 9(D):
Notwithstanding any provision of this Lease to be contrary,
Landlord and Tenant acknowledge and agree that all trade fixtures,
equipment, machinery and appliances shall be the property of
Tenant and shall remain the property of Tenant upon termination or
expiration of this Lease, and any security interests, lien or
other rights in favor of Landlord therein shall be subject to
prior prime security interests granted in favor of lenders, or
equipment vendors of Tenant. Landlord agrees to execute and
deliver a Landlord's waiver with respect to such fixtures,
equipment, appliances and other items of Tenant's property, in
form and content reasonably acceptable to Landlord.
2
<PAGE>
9. Paragraph 9(H) is deleted.
10. Paragraph 10(A) is deleted and the following substituted: Landlord
shall have the right at all reasonable times itself or by its duly
authorized agents to go upon and inspect the demised premises and
every part thereof, and at all reasonable times at its option to
make repairs, alterations and additions to the demised premises or
the building of which the demised premises is a part. In
connection with such entry, Landlord shall respect the security of
Tenant's operations and shall not interrupt, disturb or interfere
with Tenant's operations, provided, however, that rent shall abate
hereunder during such period Tenant is denied use of the demised
premises by the making of any such repairs, alterations or
additions unless they have been made necessary by the fault or
negligence of Tenant, its agents or employees.
11. Paragraph 10(D) is deleted.
12. Paragraph 11(A) and (B) are deleted and the following is
substituted: 11(A) Landlord shall defend, indemnify and
save harmless Tenant and its agents and employees
against all costs, damages or claims, whether for
personal injury or property damage, (i) occurring on the
Entire Premises during the term hereof if caused by any
act or omission by Landlord or its agents, contractors
or employees; or (ii) occurring in the common areas of
the Entire Premises (except if caused by act or omission
of Tenant, its agents, contractors or employees in such
common areas). Landlord shall, at its own expense,
defend all actions brought against Tenant, its agents or
employees for which Landlord is responsible for
indemnification hereunder, and if Landlord fails to do
so, Tenant (at its option, but without being obligated
to do so) may, at the cost and expense of Landlord and
upon notice to Landlord, defend such actions, and
Landlord shall pay and discharge any and all judgments
that arise therefrom. 11(B) Tenant shall defend,
indemnify and save harmless Landlord and its agents and
employees against all costs, damages or claims, whether
for personal injury or property damage occurring on the
demised premises during the term hereof (except if
caused by any act or omissions of Landlord, its agents,
contractors, invitees or employees). Tenant shall, at
its own expense, defend all actions brought against
Landlord, its agents or employees for which Tenant is
responsible for indemnification hereunder, and if Tenant
fails to do so, Landlord (at its option, but without
being obligated to do so) may, at the cost and expense
of Tenant and upon notice to Tenant, defend such
actions, and Tenant shall pay and discharge any and all
judgments that arise therefrom.
13. Paragraphs 12(A), (B), and (C) are deleted and the following
substituted:
(A) Landlord shall keep all buildings and improvements
erected on the demised premises insured against loss or
damage by fire and
3
<PAGE>
other perils from time to time, hereafter commonly
insured against and now referred to as extended coverage
perils (including without limitation, vandalism and
malicious mischief, if such coverage is then generally
available) in the minimum amount required by any
mortgagee of the demised premises or in the minimum
amount necessary to avoid the effect of co-insurance,
contribution or similar provisions of the applicable
policies. All proceeds of such insurance shall be
payable to Landlord or any mortgagee of the demised
premises as their interests may appear.
(B) If the demised premises are at any time during the term
of this Lease partially or totally destroyed or damaged
by fire, flood or other casualty, Tenant shall give
prompt notice thereof to Landlord, which shall at
Landlord's sole expense, repair and restore the demised
premises to their original condition. Landlord will
within ten (10) days after the occurrence of such damage
commence and thereafter with all due diligence to
proceed with the making of such repairs. In no event
shall Landlord be obligated to expend more than the
proceeds of insurance maintained by Landlord on the
demised premises in restoration thereof, and in no event
shall Tenant charge Landlord for any amount in excess of
such proceeds. If such damage is so extensive that such
repairs cannot, with due diligence, be completed within
one hundred twenty (120) days, then either party may
terminate this Lease on written notice delivered to the
other within ten (10) days after the occurrence of such
damage. Tenant shall be entitled to an abatement of rent
for the period during which the demised premises are
rendered untenantable or incapable of use during the
period of such condition.
14. The following is added at the end of the last sentence of
Paragraph 12(D): by reason of insured casualty; provided, however,
that if any such repair or interruption prevents Tenant's use of
the demised premises for its intended purpose, then all rent
hereunder shall abate during the period of such prevention and if
Tenant is prevented from using the demised premises for its
intended purpose for more than thirty (30) days, Tenant shall have
the right to terminate this Lease.
15. Paragraph 13(B) is deleted and the following is substituted:
Landlord and Tenant represent and warrant each to the other that
each has not dealt with any real estate agent or broker in
connection with this transaction and agree to indemnify and save
each other harmless from and against all loss, cost and expense
incurred by reason of any claim of any real estate agent or broker
claiming by, through or under the indemnifying party, regardless
of whether such claim is meritorious.
4
<PAGE>
16. Paragraph 13(D) is deleted.
17. Paragraph 14(C) is deleted.
18. Paragraphs 15, 16, and 20 are deleted.
19. The following is added as Paragraph 15:
Anything contained in this Lease to the contrary notwithstanding,
any thing or act which would otherwise be a default hereunder by
Tenant or would entitle Landlord to the remedies set forth in this
Lease or at law, shall not be a default and Landlord shall not be
entitled to such remedies unless, if it is one that can be cured
by the payment of money, Tenant fails to cure the default within
ten (10) days after notice thereof given by Landlord to Tenant,
or, if the default cannot be cured by the payment of money,
Landlord has given Tenant notice of such default and Tenant fails
to cure the default within thirty (30) days thereafter or, if it
cannot with due diligence be cured within thirty (30) days, Tenant
fails to commence curing such default within such thirty (30) day
period and to proceed with due diligence and in good faith to
complete the curing thereof.
20. Paragraph 22 is deleted and the following substituted: If the
entire demised premises is taken by or pursuant to governmental
authority or by the exercise of the right of eminent domain, (a)
Tenant shall have no obligations under this Lease subsequent to
such taking and Tenant shall surrender possession of the demised
premises to Landlord as of the date of such taking, or (b) at
Tenant's option if permitted by applicable law, this Lease shall
continue until Tenant by reason of an official order or direction
of the condemning authority vacates the demised premises. In the
event of any taking, whether total or partial and whether or not
this Lease continues, Tenant shall be entitled to claim against
the condemnor any special damages. If this Lease continues after a
partial taking, there shall be an abatement of rent proportionate
to any portion of the space taken and rendered untenantable or
incapable of use during the period of such condition and, after
the remainder of the demised premises are repaired and restored,
proportionate to the portion of space taken. Landlord, if
necessary, shall promptly after such partial taking, repair and
restore the remainder of the demised premises to a finished
condition satisfactory for the use made by Tenant hereunder.
21. That portion of Paragraph 23 beginning with the word "and"
following the semicolon in the sixth line thereof is deleted and the following
substituted:
The subordination of this Lease as provided in this Paragraph 23
is subject to the reservation that so long as Tenant has not
defaulted in the performance of this Lease beyond the applicable
grace period following notice of default, Tenant shall not be
evicted from the demised premises nor shall Tenant's leasehold
estate and other rights under this Lease be terminated or
disturbed.
22. Paragraph 24 is deleted.
23. Paragraph 25 is deleted and the following substituted:
All notices, demands, requests, consents and any other
communication hereunder from either party to the other shall be
sufficient only if conveyed
5
<PAGE>
in writing by United States registered or certified mail, return
receipt requested, or by nationally recognized over night delivery
service, and, in either case, postage prepaid, addressed to the
recipient at the address set forth in the heading of this Lease or
to such other address or addresses as the party to receive the
notice, demand, request, consent or communication may hereafter
designate by due notice to the other.
24. The following is added as Paragraph 30:
As to any loss or damage that may occur upon the property of a
party hereto, such party hereby releases the other, to the extent
of such damaged party's insurance indemnities, from any and all
liability for such loss or damage even if such loss or damage is
caused by the fault or negligence of such other party, or the
agents or employees of such other party; provided, however, that
this release shall be effective only with respect to loss or
damage occurring during such time as the applicable policies of
insurance shall contain a clause to the effect that this release
shall not affect said policies or the right of the insured to
recover thereunder. If any policy does not contain such a clause,
the insured party shall, at the request of the other party to this
lease, have such a clause added to said policy if an endorsement
so providing is obtainable. If an additional premium is charged
for such endorsement, the party requesting it shall pay to the
insured party the amount of such additional premium promptly upon
being billed therefor.
25. The following is added as Paragraph 31:
Wherever the consent or approval of Landlord is required
hereunder, such consent or approval shall not be unreasonably
withheld. Wherever, any matter is to be determined "in the
Landlord's opinion" such matter shall be determined reasonably by
Landlord.
26. The following is added as Paragraph 32:
Landlord shall maintain, repair and replace the exterior walls,
structure and roof of demised premises.
27. The following is added as Paragraph 33:
(A) Landlord grants to Tenant two (2) option(s) to renew and
extend this Lease for two (2) separate, successive renewal
periods of one (1) year each. Such options may be exercised
only by written notice delivered to Landlord a minimum of
sixty (60) days prior to the expiration of the original
term hereof or renewal period then in effect. The exercise
of such options shall be effective only if Tenant (i) has
exercised all prior options, and (ii) is not in default
under this Lease on the date of exercise of such option and
on the date of expiration of the original term hereof or of
the renewal period then in effect. If such options are
exercised, this Lease shall continue during such renewal
period upon all the terms, covenants and conditions herein
set forth except as set forth in Paragraph 30(B) below.
(B) The minimum annual rent set forth in Paragraph 4 of this
Lease shall be subject to adjustment (but not below the
amount set forth
6
<PAGE>
in Paragraph 4) for any net decline of the purchasing power
of the dollar as reflected in the Cost of Living Index as
hereafter defined. For the purposes hereof the Cost of
Living Index shall be the "Consumer Price Index for All
Urban Consumers, (CPI-U) (1982-84 = 100), Philadelphia
Region," published by the United States Department of
Labor, Bureau of Labor Statistics. Such adjustment shall be
based on the Cost of Living Index as published for the
month of February, 2000 ("Base Index"), and shall be made
by multiplying the minimum rent set forth in Paragraph 4 by
a fraction, the numerator of which shall be the Cost of
Living Index for the month of February of each respective
calendar year of the term of this Lease or any renewal
thereof (commencing February, 2000) and the denominator of
which shall be the Base Index. If the Cost of Living Index
or successor or substitute index is not available, the
parties shall use any reliable governmental or other
impartial index or publication reasonably designated by
Landlord which reasonably reflects the change in cost of
living between the periods otherwise above set forth for
determination of the cost of living adjustment.
IN WITNESS WHEREOF, and with the intention to be legally bound hereby, the
parties have executed this Rider this 19/th/ day of February, 1999.
LANDLORD:
CAL-CHIP ELECTRONICS, INC.
By: /s/ Jerome Giuliano
-------------------
Jerome Giuliano
President
TENANT:
OXIS INSTRUMENTS, INC.
By: /s/ Jon S. Pitcher
------------------
Jon S. Pitcher
Secretary
7
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<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 1,483,000
<SECURITIES> 0
<RECEIVABLES> 1,117,000
<ALLOWANCES> 0
<INVENTORY> 1,565,000
<CURRENT-ASSETS> 4,655,000
<PP&E> 858,000
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12,000
<COMMON> 8,000
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<CGS> 1,007,000
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