Office Building Lease
Exhibit 10.1
This Lease between Xxxxx Investments, LTD, a Utah Limited Partnership (“Landlord”) and
TechniScan, INC, a Utah Corporation (“Tenant”), is dated April 11, 2008.
1. LEASE OF PREMISES.
In consideration of the Rent (as defined at Section 5.4) and the provisions of this Lease, Landlord
leases to Tenant and Tenant leases from Landlord the Premises shown by diagonal lines on the floor
plan attached hereto as Exhibit “A,” and further described
at Section 2l. The Premises are located
within the Building and Project described in Section 2m. Tenant shall have the non-exclusive right
(unless otherwise provided herein) in common with Landlord, other tenants, subtenants and invitees,
to use of the Common Areas (as defined at Section 2e).
2. DEFINITIONS
As used in this Lease, the following terms shall have the following meanings:
a.
Base Rent (initial): $ 168,199.50 per year as a full service rate, but not including
janitorial services to the Premises.
b. Base Year. July 1st 2008 to June 30, 2009.
c. Broker(s)
Landlord’s: Xxxxx Xxxx and Xxxxxxx Xxxxx of Coldwell Banker Commercial NRT.
Tenant’s: Xxxxx Xxxxx Commerce CRG and Xxxxxx Xxxxx of Prudential Utah Real
Estate.
d. Commencement Date: June 1, 2008 with early occupancy of May 23, 0000
x. Xxxxxx Xxxxx: 1st floor building lobby, common corridors and hallways leading
to break room, 1st floor restrooms
and parking areas, stairways, elevators and other generally understood public or common
areas. Landlord shall have
the right to regulate or restrict the use of the Common Areas.
f. Expense Stop: (fill in if applicable) $ N/A.
g. Expiration Date: May 31, 2018, unless otherwise sooner terminated in accordance
with the provisions of this
Lease.
h. Annual rent increase: The monthly rent shall increase to $18/RSF beginning on the
13th month of the lease term. At the expiration of the first twenty-four (24)
calendar month the rent shall increase by two percent (2%) and shall continue to increase
at 2% on the expiration of each 12 month period.
i. Landlord’s Mailing Address: 0000 Xxxxx 000 Xxxx
Xxxx Xxxx Xxxx, XX 00000
Tenant’s Mailing Address:
j.
Monthly Installments of Base Rent (initial): $ 18,688.83 per month.
k. Parking: Tenant shall be granted four(4) parking stalls per 1,000 RSF of leased space, on
a non-exclusive basis in the area(s) designated by Landlord for parking. Tenant shall abide
by any and all parking regulations and rules established from time to time by Landlord.
l. Premises: that portion of the Building containing approximately 16,019 square
feet of Rentable Area, shown by diagonal lines on Exhibit “A,” located on the
1st and 2nd floors of the Building.
m. Project: the building of which the Premises are a part (the“Building”) and any other
buildings or improvements on the real property (the “Property”) located at 0000 X Xxxxxxxx
Xxxxx, Xxxx Xxxx Xxxx, XX.
n. Rentable Area: as to both the Premises and the Project, the respective measurements of
floor area as may from time to time be subject to lease by Tenants and all tenants of the
Project, respectively, as determined by Landlord and applied on a consistent basis
throughout the Project.
o.
Security Deposit (Section 7): $ 28,153.21.
p. State: the State of Utah.
q. Tenant’s First Adjustment Date (Section 2h): the first day of the calendar month following
the Commencement Date.
r. Tenant’s Proportionate Share: 64 1/3%. Such share is a fraction, the numerator
of which is the Rentable Area of the Premises, and the denominator of which is the Rentable
Area of the Project, as determined by Landlord from time to time. The
Project consists of 1
building(s) containing a total Rentable Area of 24,900 square feet.
s. Tenant’s Use Clause (Article 8): General office and light manufacturing of medical
devices and related uses.
t. Term: the period commencing on the Commencement Date and
expiring at midnight on the Expiration Date.
u. Rent Abatement: Tenant shall receive
three (3) months free rent at the beginning of the Lease term.
3. EXHIBITS AND ADDENDA.
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The
exhibits and addenda listed below (unless lined out) are incorporated by reference in this
Lease:
a. Exhibit “A” — Floor Plan showing the Premises.
b. Exhibit “B” — Rent Payment Schedule.
c. Exhibit “C” — Tenant Improvement drawings.
d. Exhibit “D” — Rules and Regulations.
e. Exhibit “E” — Options and Tenant Improvement Allowances
f. Exhibit “F” — ADA Compliance
4. DELIVERY OF POSSESSION.
If for any reason Landlord does not deliver possession of the Premises to Tenant on the
Commencement Date, Landlord shall not be subject to any liability for such failure, the Expiration
Date shall not change and the validity of this Lease shall not be impaired, but Rent shall be
abated until delivery of possession. “Delivery of possession” shall be deemed to occur on the date
Landlord completes Landlord’s Work as defined in Exhibit “C.” Landlord and Tenant agree that tenant
may take possession if the remaining tenant improvements that need to be completed will not affect
the ability to move in or the ability for employees to work.
5. RENT.
5.1. Payment of Base Rent. Tenant agrees to pay the Base Rent for the Premises. Monthly
Installments of Base Rent shall be
payable in advance on the first day of each calendar month of the Term. If the Term begins (or
ends) on other than the first (or
last) day of a calendar month, the Base Rent for the partial month shall be prorated on a per diem
basis. Tenant shall pay Landlord the first Monthly Installment of Base Rent ($18,688.83) when Tenant executes the Lease.
5.2. Adjusted Base Rent. (see exhibit B)
a. The Base Rent (and the corresponding Monthly Installments of Base Rent) set forth at
Section 2a shall be adjusted annually (the “Adjustment Date”), commencing on Tenant’s First
Adjustment Date. The first adjustment shall increase to $18/RSF. Beginning on the
2nd adjustment date and all future annual adjustments will be at a rate of two
percent (2%).
5.3. Project Operating Costs.
a. In order that the Rent payable during the Term reflect any increases in Project Operating
Costs, Tenant agrees to
pay to Landlord as Rent, Tenant’s Proportionate Share of all increases in costs, expenses and
obligations attributable
to the Project and its operation, all as provided below.
b. If, during any calendar year during the Term, Project Operating Costs exceed the Project
Operating Costs for the
Base Year, Tenant shall pay to Landlord, in addition to the Base Rent and all other payments
due under this Lease, an
amount equal to Tenant’s Proportionate Share of such excess Project Operating Costs in
accordance with the
provisions of this Section 5.3b.
(1) The term “Project Operating Costs” shall include all those items described in the
following subparagraphs (a) and (b).
(a) All taxes, assessments, water and sewer charges and other similar governmental
charges levied on or
attributable to the Building or Project or their operation, including without
limitation, (i) real property taxes or
assessments levied or assessed against the Building or Project, (ii) assessments or
charges levied or
assessed against the Building or Project by an redevelopment agency, (iii) any tax
measured by gross rentals
received from the leasing of the premises, Building or Project, excluding any net
income, franchise, capital
stock, estate or inheritance taxes imposed by the State or federal government or their
agencies, branches or
departments; provided that if at any time during the Term any governmental entity
levies, assesses or imposes
on Landlord any (1) general or special, ad valorem or specific, excise, capital levy or
other tax, assessment,
levy or charge directly on the Rent received under this Lease or on the rent received
under any other leases of
space in the Building or Project, or (2) any license fee, excise or franchise tax,
assessment, levy or charge
measured by or based, in whole or in part, upon such rent, or (3) any transfer,
transaction, or similar tax,
assessment, levy or charge based directly or indirectly upon the transaction
represented by this Lease or such
other leases, or (4) any occupancy, use, per capita or other tax, assessment, levy or
charge based directly or
indirectly upon the use or occupancy of the Premises or other premises within the
Building or Project, then any
such taxes, assessments, levies and charges shall be deemed to be included in the term
Project Operating
Costs. If at any time during the Term the assessed valuation of, or taxes on, the
Project are not based on a
completed Project having at least ninety-five percent (95%) of the Rentable Area
occupied, then the “taxes”
component of Project Operating Costs shall be adjusted by Landlord to reasonably
approximate the taxes
which would have been payable if the Project were completed and at least ninety-five
percent (95%) occupied.
(b) Operating costs incurred by Landlord in maintaining and operating the Building and
Project, including
without limitation the following: costs of (1) utilities; (2) supplies; (3) insurance
(including public liability,
property damage, earthquake, and fire and extended coverage insurance for the full
replacement cost of the
Building and Project as required by Landlord or its lenders for the Project); (4)
services of independent
contractors; (5) compensation (including employment taxes and fringe benefits) of all
persons who perform
duties connected with the operation, maintenance, repair or overhaul of the Building or
Project, and
equipment, improvements and facilities located within the Project, and gardeners (but
excluding persons
performing services not uniformly available to or performed for substantially all
Building or Project tenants); (6)
operation and maintenance of a room for delivery and distribution of mail to tenants of
the Building or Project
as required by the U.S. Postal Service (including, without limitation, an amount equal
to the fair market rental
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value of the Mail room premises); (7) management of the Building or Project, whether
managed by Landlord or an independent contractor (including, without limitation, an
amount equal to the fair market value of an yon-site manager’s office); (8) rental
expenses for (or a reasonable depreciation allowance on) persona property used in the
maintenance, operation or repair of the Building or Project; (9) costs, expenditures
or charges (whether capitalized or not) required by any governmental or
quasi-governmental authority; (10) amortization of capital expenses (including
financing costs) (i) required by a governmental entity for energy conservation or
life safety purposes, or (ii) made by Landlord to reduce Project Operating Costs; and
(11) any other costs or expenses incurred by Landlord under this lease and not
otherwise reimbursed by tenants of the Project. If at any time during the Term, less
than ninety-five percent (95%) of the Rentable Area of the Project is occupied, the
“operating costs” component of Project Operating Costs shall be adjusted by Landlord
to reasonably approximate the operating costs which would have been incurred if the
Project had been at least ninety-five percent (95%) occupied.
(2) Tenant’s Proportionate Share of Project Operating Costs shall be payable by Tenant to
Landlord as follows:
(a) Beginning with the calendar year following the Base Year and for each calendar
year thereafter
(“Comparison Year”), Tenant shall pay Landlord an amount equal to Tenant’s
Proportionate Share of the
Project Operating costs incurred by Landlord in the Comparison Year which exceeds the
total amount of
Project Operating Costs payable by Landlord for the Base Year. This excess is referred
to as the “Excess
Expenses”.
(b) To provide for current payments of Excess Expenses, Tenant shall, at Landlord’s
request, pay as
additional rent during each Comparison Year, an amount equal to Tenant’s Proportionate
Share of the Excess
Expenses payable during Comparison Year, as estimated by Landlord from time to time.
Such payments shall
be made in monthly installments, commencing on the first day of the month following
the month in which
Landlord notifies Tenant of the amount it is to pay hereunder and continuing until the
first day of the month
following the month in which Landlord gives Tenant a new notice of estimated Excess
Expenses. It is the
intention hereunder to estimate from time to time the amount of the Excess Expenses
for each comparison
year and Tenant’s Proportionate Share thereof, and then to make an adjustment in the
following year based
on the actual Excess Expenses incurred for that Comparison Year.
(c) On or before April 1 of each Comparison Year after the first comparison Year (or
as soon thereafter as is
practical), Landlord shall deliver to Tenant a statement setting forth Tenant’s
Proportionate Share of the
Excess Expenses for the preceding Comparison Year. If Tenant’s Proportionate Share of
the actual Excess
Expenses for the previous Comparison Year exceeds the total of the estimated monthly
payments made by
Tenant for such year, Tenant shall pay Landlord the amount of the deficiency within
ten (10) days of the
receipt of the statement. If such total exceeds Tenant’s Proportionate Share of the
actual Excess Expenses
for such comparison Year, then Landlord shall credit against Tenant’s next ensuing
monthly installment(s) of
additional rent an amount equal to the difference until the credit is exhausted. If a
credit is due from Landlord
on the Expiration Date, Landlord shall pay Tenant the amount of the credit. The
obligations of Tenant and
Landlord to make payments required under this Section 5.3 shall survive the Expiration
Date.
(d) Tenant’s Proportionate Share of Excess Expenses in any Comparison Year having less
than 365 days
shall be appropriately prorated.
(e) If any dispute arises as to the amount of any additional rent due hereunder,
Tenant shall have the right
after reasonable notice and at reasonable times to inspect Landlord’s accounting
records at Landlord’s
accounting office and, if after such inspection Tenant still disputes the amount of
additional rent owed, a
certification as to the proper amount shall be made by Landlord’s certified public
accountant, which
certification shall be final and conclusive. Tenant agrees to pay the cost of such
certification unless it is
determined that Landlord’s original statement overstated Project Operating Costs by
more than five percent
(5%).
(f) If this Lease sets forth an Expenses Stop at Section 2f, then during the Term
Tenant shall be liable for
Tenant’s Proportionate Share of any actual Project Operating Costs which exceed the
amount of the Expense
Stop. Tenant shall make current payments of such excess costs during the Term in the
same manner as is
provided for payment of Excess Expenses under the applicable provisions of SECTION
5.3b(2)(b) and (c)
above.
5.4 Definition of Rent. All costs and expenses which Tenant assumes or agrees to pay to Landlord
under this Lease shall be
deemed additional rent (which, together with the Base Rent is sometimes referred to as the
“Rent”). The Rent shall be paid to
the Building manager (or other person) and at such place, as Landlord may from time to time
designate in writing, without any
prior demand therefor and without deduction or offset, in lawful money of the United States of
America.
5.5 Rent Control. If the amount of Rent or any other payment due under this Lease violates the
terms of any governmental
restrictions on such Rent or payment, then the Rent or payment due during the period of such
restrictions shall be the
maximum amount allowable under those restrictions. Upon termination of the restrictions, Landlord
shall, to the extent it is
legally permitted, recover from Tenant the difference between the amounts received during the
period of the restrictions and the
amounts Landlord would have received had there been no restrictions.
5.6 Taxes Payable by Tenant. In addition to the Rent and any other Charges to be paid by Tenant
hereunder, Tenant shall
reimburse Landlord upon demand for any and all taxes payable by Landlord (other than net income
taxes) which are not
otherwise reimbursable under this Lease, whether or not now customary or within the contemplation of
the parties, where such
taxes are upon, measured by or reasonably attributable to (a) the cost or value of Tenant’s
equipment, furniture, fixtures and
other personal property located in the Premises, or the cost or value of any leasehold improvements
made in or to the
Premises by or for Tenant, other than Building Standard Work made by Landlord, regardless of
whether title to such
improvements is held by Tenant or Landlord; (b) the gross or net Rent payable under this Lease,
including, without limitation,
any rental or gross receipts tax levied by any taxing authority with respect to the receipt of the
Rent hereunder; (c) the
possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy by
Tenant of the Premises or
any portion thereof; or (d) this transaction or any document to which Tenant is a party creating or
transferring an interest or an
estate in the Premises. If it becomes unlawful for Tenant to reimburse Landlord for any costs as
required under this Lease, the
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Base Rent shall be revised to net Landlord the same net Rent after imposition of any tax or other
charge upon Landlord as would have been payable to Landlord but for the reimbursement being
unlawful.
6. INTEREST AND LATE CHARGES.
If Tenant fails to pay when due any Rent or other amounts or charges which Tenant is obligated to
pay under the terms of this Lease, the unpaid amounts hall bear interest at the maximum rate then
allowed by law. Tenant acknowledges that the late payment of any Monthly Installment of Base Rent
will cause Landlord to lose the use of that money and incur costs and expenses not contemplated
under this Lease, including without limitation, administrative and collection costs and processing
and accounting expense, the exact amount of which is extremely difficult to ascertain. Therefore,
in addition to interest, if any such installment is not received by Landlord within ten (10) days
from the date it is due, Tenant shall pay Landlord a late charge equal to five percent (5%) of
such installment. Landlord and Tenant agree that this late charge represents a reasonable estimate
of such costs and expenses and is fair compensation to Landlord for the loss suffered from such
nonpayment by Tenant. Acceptance of any interest or late charge shall not constitute a waiver of
Tenant’s default with respect to such nonpayment by Tenant nor prevent Landlord from exercising
any other right or remedies available to Landlord under this Lease.
7. SECURITY DEPOSIT.
Tenant agrees to deposit with Landlord the Security Deposit set forth at Section 2.0 upon
execution of this Lease, as security for Tenant’s faithful performance of its obligations under
this Lease. Landlord and Tenant agree that the Security Deposit may be commingled with funds of
Landlord and Landlord shall have no obligation or liability for payment of interest on such
deposit.
Tenant shall not mortgage, assign, transfer or encumber the Security Deposit without the prior
written consent of Landlord and any attempt by Tenant to do so shall be void, without force or
effect and shall not be binding upon Landlord.
If Tenant fails to pay any Rent or other amount when due and payable under this Lease, or fails to
perform any of the terms hereof, Landlord may appropriate and apply or use all or any portion of
the Security Deposit for Rent payments or any other amount then due and unpaid, for payment of any
amount for which Landlord has become obligated as a result of Tenant’s default or breach, and for
any loss or damage sustained by Landlord as a result of Tenant’s default or breach, and Landlord
may so apply or use this deposit without prejudice to any other remedy Landlord may have by reason
of Tenant’s default or breach. If Landlord so uses any of the Security Deposit, Tenant shall,
within ten (10) days after written demand therefor, restore the Security Deposit to the full
amount originally deposited; Tenant’s failure to do so shall constitute an act of default
hereunder and Landlord shall have the right to exercise any remedy provided for at Article 27
hereof. Within fifteen (15) days after the Term (or any extension thereof) has expired or Tenant
has vacated the Premises, whichever shall last occur, and provided Tenant is not then in default
on any of its obligations hereunder, Landlord shall return the Security Deposit to Tenant, or, if
Tenant has assigned its interest under this Lease, to the last assignee of Tenant. If Landlord
sells its interest in the Premises, Landlord may deliver this deposit to the purchaser of
Landlord’s interest and thereupon be relieved of any further liability or obligation with respect
to the Security Deposit.
8. TENANT’S USE OF THE PREMISES.
Tenant shall use the Premises solely for the purposes set forth in Tenant’s Use Clause. Tenant
shall not use or occupy the Premises in violation of law or any covenant, condition or restriction
affecting the Building or Project or the certificate of occupancy issued for the Building or
Project, and shall, upon notice form Landlord, immediately discontinue any use of the Premises
which is declared by any governmental authority having jurisdiction to be a violation of law or
the certificate of occupancy. Tenant, at Tenant’s own cost and expense, shall comply with all
laws, ordinances, regulations, rules and/or any directions of any governmental agencies or
authorities having jurisdiction which shall, by reason of the nature of Tenant’s use or occupancy
of the Premises, impose any duty upon TENANT or Landlord with respect to the Premises or its use
or occupation. A judgment of any court of competent jurisdiction or the admission by Tenant in any
action or proceeding against Tenant that Tenant has violated any such laws, ordinances,
regulations, rules and/or directions in the use of the Premises shall be deemed to be a conclusive
determination of that fact as between Landlord and Tenant. Tenant shall not do or permit to be
done anything which will invalidate or increase the cost of any fire, extended coverage or other
insurance policy covering the Building or Project and/or property located therein, and shall
comply with all rules, orders, regulation, requirements and recommendations of the Insurance
Services Office or any other organization performing a similar function. Tenant shall promptly
upon demand reimburse Landlord for any additional premium charged for such policy by reason of
Tenant’s failure to comply with the provisions of this Article. Tenant shall not do or permit
anything to be done in or about the Premises which will in any way obstruct or interfere with the
rights of other tenants or occupants of the Building or Project, or injure or annoy them, or use
or allow the Premises to be used for any improper, immoral, unlawful or objectionable purpose, nor
shall Tenant cause, maintain or permit any nuisance in, on or about the Premises. Tenant shall not
commit or suffer to be committed any waste in or upon the Premises.
9. SERVICES AND UTILITIES.
Provided that Tenant is not in default hereunder, Landlord agrees to furnish to the Premises
during generally recognized business days, and during the hours of 7:00 am to 6:00 pm Monday
through Friday and 8:00 am to 1:00 pm on Saturdays and subject to the Rules and Regulations of the
Building or Project, electricity for light manufacturing and production assembly of medical
devices, normal desk top office equipment and normal copying equipment, and heating, ventilation
and air conditioning (“HVAC”) as required for the comfortable use and occupancy of the Premises.
If Tenant desires HVAC at any other time for light manufacturing and production assembly of
medical devices, Landlord shall use reasonable efforts to furnish such service upon reasonable
notice from Tenant and Tenant shall pay Landlord’s charges therefor on demand. Landlord shall also
maintain and keep lighted the common stairs, common entries and restrooms in the Building.
Landlord shall not be in default hereunder or be liable for any damages directly or indirectly
resulting from, nor shall the Rent be abated by reason of (i) the installation, use or
interruption of use of any equipment in connection with the furnishing of any of the foregoing
services, (ii) failure to furnish or delay in furnishing any such services where such failure or
delay is caused by accident or any condition or event beyond the reasonable control of Landlord,
or by the making of necessary repairs or improvements to the Premises, Building or Project, or
(iii) the limitation, curtailment or rationing of, or restrictions on, use of water, electricity,
gas or any other form of energy serving the Premises, Building or Project. Landlord shall not be
liable under any circumstances for a loss of or injury to property or business, however occurring,
through or in connection with or incidental to failure to furnish any such services. If Tenant
uses heat generating machines or equipment in the Premises which affect the temperature otherwise
maintained by the HVAC system, Landlord reserves the right to install supplementary air
conditioning units in the Premises and
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the cost
thereof, including the cost or installation, operation and
maintenance thereof, shall be
paid by Tenant to Landlord upon demand by Landlord.
Tenant shall not, without the written consent of Landlord, use any apparatus or device in the
Premises, including without limitation, electronic data processing machines, punch card machines or
machines using in excess of 120 volts, which consumes more electricity than is usually furnished or
supplied for the use of premises as general office space, as determined by Landlord. Tenant shall
not connect any apparatus with electric current except through existing electrical outlets in the
Premises. Tenant shall not consume water or electric current in excess of that usually furnished or
supplied for the use of premises as general office space and light manufacturing and production
assembly of medical devices, without first procuring the written consent of Landlord, which
Landlord may refuse, and in the event of consent, Landlord may have installed a water meter or
electrical outlets in the Premises to measure the amount of water or electric current consumed. The
cost of any such meter and of its installation, maintenance and repair shall be paid for by the
Tenant and Tenant agrees to pay to Landlord promptly upon demand for all such water and electric
current consumed to as shown by said meters, at the rates charged for such services by the local
public utility plus any additional expense incurred in keeping account of the water and electric
current so consumed. If a separate meter is not installed, the excess cost for such water and
electric current shall be established by an estimate made by a utility company or electrical
engineer hired by Landlord at Tenant’s expense.
Nothing contained in this Article shall restrict Landlord’s right to require at any time separate
metering of utilities furnished to the Premises. In the event utilities are separately metered,
Tenant shall pay promptly upon demand for all utilities consumed at utility rates charged by the
local public utility plus any additional expense incurred by Landlord in keeping account of the
utilities so consumed. Tenant shall be responsible for the maintenance and repair of any such
meters at its sole cost.
Landlord shall furnish elevator service, lighting replacement for building standard lights,
restroom supplies, exterior window washing and janitorial services to the common areas in a manner
that such services are customarily furnished to comparable office buildings in the area. Tenant IS
responsible for janitorial services to their Premises.
10. CONDITION OF THE PREMISES.
Tenant’s taking possession of the Premises shall be deemed conclusive evidence that as of the date
of taking possession the Premises are in good order and satisfactory condition, except for such
matters as to which Tenant gave Landlord notice on or before the Commencement Date and unless
Tenant improvement work as defined in exhibit “C” is not completed by commencement date. No
promise of Landlord to alter, remodel, repair or improve the Premises, the Building or the Project
and no representation, express or implied, respecting any matter or thing relating to the
Premises, Building, Project or this Lease (including, without limitation, the condition of the
Premises, the Building or the Project) have been made to Tenant by Landlord or its Broker or Sales
Agent, other than as may be contained herein or in a separate exhibit or addendum signed by
Landlord and Tenant.
11. CONSTRUCTION, REPAIRS AND MAINTENANCE.
a. Landlord’s Obligations. Landlord shall perform Landlord’s Work to the Premises as
described in Exhibit “C” Landlord shall maintain in good order, condition and repair the Building and all other
portions of the Premises not the
obligation of TENANT or of any other Tenant in the Building.
b. TENANT’S Obligations.
(1) Tenant shall perform Tenant’s Work to the Premises as described in Exhibit “C”.
(2) Tenant at Tenant’s sole expense shall, except for services furnished by Landlord
pursuant to Article 9 hereof,
maintain the Premises in good order, condition and repair, including surfaces of the
ceilings, walls and floors, all
doors, all interior windows, all plumbing, pipes and fixtures, electrical wiring, switches
and fixtures, Building
Standard furnishings and special items and equipment installed by or at the expense of
Tenant.
(3) Tenant shall be responsible for all repairs and alterations in and to the Premises,
Building and Project and the
facilities and systems thereof, the need for which arises out of (i) Tenant’s use or
occupancy of the Premises, (ii)
the installation, removal, use or operation of Tenant’s Property (as defined in Article
13) in the Premises, (iii) the
moving of Tenant’s Property into or out of the Building, or (iv) the act, omission, misuse
or negligence of Tenant,
its agents, contractors, employees or invitees.
(4) If Tenant fails to maintain the Premises in good order, condition and repair, Landlord
shall give Tenant notice
to do such acts as are reasonably required to so maintain the Premises. If Tenant fails to
promptly commence
such work and diligently prosecute it to completion, then Landlord shall have the right to
do such acts and expend
such funds a the expense of Tenant as are reasonably required to perform such work. Any
amount so expended
by landlord shall be paid by Tenant promptly after demand with interest at the prime
commercial rate then being
charged by Bank of America NT & SA plus two percent (2%) per annum, from the date of such
work, but not to
exceed the maximum rate then allowed by law. Landlord shall have no liability to Tenant
for any damage,
inconvenience, or interference with the use of the Premises by Tenant as a result of
performing any such work.
c. Compliance with Law. Landlord and Tenant shall each do all acts required to comply with
all applicable laws,
ordinances, and rules of any public authority relating to their respective maintenance
obligations as set forth herein.
d. Waiver by Tenant. Tenant expressly waives the benefits of any statute now or hereafter in
effect which would
otherwise afford the Tenant the right to make repairs at Landlord’s expense or to terminate
this Lease because of
Landlord’s failure to keep the Premises in good order, condition and repair.
e. Load and Equipment Limits. Tenant shall not place a load upon any floor of the Premises
which exceeds the load
per square foot which such floor was deigned to carry, as determined by Landlord or
Landlord’s structural engineer.
The cost of any such determination made by Landlord’s structural engineer shall be paid for
by Tenant upon demand.
Tenant shall not install business machines or mechanical equipment which causes noise or
vibration to such a degree
as to be objectionable to Landlord or other Building tenants.
f. Except as otherwise expressly provided in this Lease, Landlord shall have no liability to
Tenant nor shall Tenant’s
obligations under this Lease be reduced or abated in any manner whatsoever by reason of any
inconvenience,
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annoyance, interruption or injury to business arising from Landlord’s making any repairs or
changes which Landlord is required or permitted by this Lease or by any other tenant’s lease
or required by law to make in or to any portion of the Project, Building or the Premises.
Landlord shall nevertheless use reasonable efforts to minimize any interference with
Tenant’s business in the Premises.
g. TENANT shall give Landlord prompt notice of any damage to or defective condition in any
part of appurtenance of the Building’s mechanical, electrical, plumbing, HVAC or other
systems serving, located in, or passing through the Premises.
h. Upon the expiration or earlier termination of this Lease, Tenant shall return the
Premises to Landlord clean and in the same condition as on the date Tenant took possession,
except for normal wear and tear. Any damage to the Premises, including any structural
damage, resulting from Tenant’s use or from the removal of Tenant’s fixtures, furnishings
and equipment pursuant to Section 13b shall be repaired by Tenant at Tenant’s expense.
12. ALTERATIONS AND ADDITIONS.
a. Tenant shall not make any additions, alterations or improvements to the Premises without
obtaining the prior written
consent of Landlord which consent may not be unreasonably withheld. Landlord’s consent may be
conditioned on
Tenant’s removing any such additions, alterations or improvements upon the expiration of the
Term and restoring the
Premises to the same condition as on the date Tenant took possession. All work with respect
to any addition,
alteration or improvement shall be done in a good and workmanlike manner by properly
qualified and licensed
personnel approved by Landlord, and such work shall be diligently prosecuted to completion.
Landlord may, at
Landlord’s option, require that any such work be performed by Landlord’s contractor, in which
case the cost of such
work shall be paid for before commencement of the work.
b. Tenant shall pay the costs of any work done on the Premises pursuant to Section 12a, and
shall keep the
Premises, Building and Project free and clear of liens of any kind. Tenant shall indemnify,
defend against and keep
Landlord free and harmless from all liability, loss, damage, costs, attorneys’ fees and any
other expense incurred on
account of claims by any person performing work or furnishing materials or supplies for
Tenant or any person claiming
under Tenant.
Tenant shall keep Tenant’s leasehold interest, and any additions or improvements which are
or become the property of Landlord under this Lease, free and clear of all attachment or
judgment liens. Before the actual commencement of any work for which a claim or lien may be
filed, Tenant shall give Landlord notice of the intended commencement date a sufficient time
before that date to enable Landlord to post notices of non-responsibility or any other
notices which Landlord deems necessary for the proper protection of Landlord’s interest in
the Premises, Building or the Project, and Landlord shall have the right to enter the
Premises and post such notices at any reasonable time.
c. Landlord may require, at Landlord’s sole option, that Tenant provide to Landlord, at
Tenant’s expense, a lien and
completion bond in an amount equal to at least one and one-half (1 2) times the total
estimated cost of any additions,
alterations or improvements to be made in or to the Premises, to protect Landlord against any
liability for mechanic’s
and materialmen’s liens and to insure timely completion of the work. Nothing contained in
this Section 12c shall relieve
Tenant of its obligation under Section 12b to keep the Premises, Building and Project free of
all liens.
d. Unless their removal is required by Landlord as provided in Section 12a, all additions,
alterations and improvements
made to the Premises shall become the property of Landlord and be surrendered with the
Premises upon the
expiration of the Term; provided, however, Tenant’s equipment, machinery and trade fixtures
which can be removed
without damage to the Premises shall remain the property of Tenant and may be removed,
subject to the provisions of
Section 13b.
13. LEASEHOLD IMPROVEMENTS; TENANT’S PROPERTY.
a. All fixtures, equipment, improvements and appurtenances attached to or built into the
Premises at the
commencement of or during the Term, whether or not by or at the expense of Tenant (“Leasehold
Improvements”),
shall be and remain a part of the Premises, shall be the property of Landlord and shall not
be removed by Tenant,
except as expressly provided in Section 13b.
b. All movable partitions, business and trade fixtures, machinery and equipment,
communications equipment and
office equipment located in the Premises and acquired by or for the account of Tenant,
without expense to landlord,
which can be removed without structural damage to the Building, and all furniture,
furnishings and other articles of
movable personal property owned by Tenant and located in the Premises
(collectively “Tenant’s
Property”) shall be and
shall remain the property of Tenant and may be removed by Tenant at any time during the Term;
provided that if any of
Tenant’s Property is removed, Tenant shall promptly repair any damage to the Premises or to
the Building resulting
from such removal.
14. RULES AND REGULATIONS.
Tenant agrees to comply with (and cause its agents, contractors, employees and invitees to comply
with) the rules and regulations attached hereto as Exhibit “D” and with such reasonable
modifications thereof and additions thereto as Landlord may from time to time make. Landlord shall
not be responsible for any violation of said rules and regulations by other tenants or occupants
of the Building or Project.
15. CERTAIN RIGHTS RESERVED BY LANDLORD.
Landlord reserves the following rights, exercisable without liability to Tenant for (a) damage or
injury to property, person or business, (b) causing an actual or constructive eviction from the
Premises, or (c) disturbing Tenant’s use or possession of the Premises.
a. To name the Building and Project and to change the name or street address of the Building
or Project;
b. To install and maintain all signs on the exterior of the Building and Project;
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c. To have pass keys to the Premises and all doors within the Premises, excluding Tenant’s
vaults and safes;
d. At any time during the Term, and on reasonable prior notice to Tenant, to inspect the
Premises, and to show the
Premises to any prospective purchaser or mortgagee of the Project, or to any assignee of any
mortgage on the
Project, or to others having an interest in the Project or Landlord, and during the last six
months of the Term, to show
the Premises to prospective tenants thereof; and
e. To enter the Premises for the purpose of making inspections, repairs, alterations,
additions or improvements to the
Premises or the Building (including, without limitation, checking, calibrating, adjusting or
balancing controls and other
parts of the HVAC system), and to take all steps as may be necessary or desirable for the
safety, protection,
maintenance or preservation of the Premises or the Building or Landlord’s interest therein,
or as may be necessary or
desirable for the operation or improvement of the Building or in order to comply with laws,
orders or requirements of
governmental or other authority. Landlord agrees to use its best efforts (except in an
emergency) to minimize
interference with Tenant’s business in the Premises in the course of any such entry.
16. ASSIGNMENT AND SUBLETTING.
No assignment of this Lease or sublease of all or any part of the Premises shall be permitted,
except as provided in this Article 16.
a. Tenant shall not, without the prior written consent of Landlord, assign or hypothecate
this Lease or any interest
herein or sublet the Premises or any part thereof, or permit the use of the Premises by any
party other than Tenant.
Any of the foregoing acts without such consent shall be void and shall, at the option of
Landlord, terminate this Lease.
This Lease shall not, nor shall any interest of Tenant herein, be assignable by operation of
law without the written
consent of Landlord.
b. If at any time or from time to time during the Term Tenant desires to assign this Lease or
sublet all or any part of
the Premises, Tenant shall give notice to Landlord setting forth the terms and provisions of
the proposed assignment
or sublease, and the identity of the proposed assignee or subtenant. Tenant shall promptly
supply Landlord with such
information concerning the business background and financial condition of assignee or
subtenant
(1) Landlord shall have the right to approve such proposed assignee or subtenant, which
approval shall not be
unreasonable withheld;
(2) The assignment or sublease shall be on the same terms set forth in the notice given
to landlord;
(3) No assignment or sublease shall be valid and no assignee or sublessee shall take
possession of the Premises until an executed counterpart of such assignment or sublease
has been delivered to Landlord;
(4) No assignee or sublessee shall have a further right to assign or sublet except on the
terms herein contained;
and
(5) Any sums or other economic consideration received by Tenant as a result of such
assignment or subletting,
however denominated under the assignment or sublease, which exceed, in the aggregate, (i)
the total sums which
Tenant is obligated to pay Landlord under this Lease (prorated to reflect obligations
allocable to any portion of the
Premises subleased). Tenant and Landlord to share profits, if any, shall be split 50/50.
c. Notwithstanding the provisions of paragraphs a and b above, Tenant may assign this Lease
or sublet the Premises
or any portion thereof, without Landlord’s consent and without extending any recapture or
termination option to
Landlord, to any corporation which controls, is controlled by or is under common control with
Tenant, or to any
corporation resulting from a merger or consolidation with Tenant, or to any person or entity
which acquires all the
assets of Tenant’s business as a going concern, provided that (i) the assignee or sublessee
assumes, in full, the
obligations of Tenant under this Lease, (ii) Tenant remains fully liable under this Lease,
and (iii) the use of the
Premises under Article 9 remains unchanged.
d. No subletting or assignment shall release Tenant of Tenant’s obligations under this Lease
or alter the primary
liability of Tenant to pay the Rent and to perform all other obligations to be performed by
Tenant hereunder. The
acceptance of Rent by Landlord from any other person shall not be deemed to be a waiver by
Landlord of any
provision hereof. Consent to one assignment or subletting shall not be deemed consent to
any subsequent
assignment or subletting. In the event of default by an assignee or subtenant of Tenant or
any successor of Tenant in
the performance of any of the terms hereof, Landlord may proceed directly against Tenant
without the necessity of
exhausting remedies against such assignee, subtenant or successor. Landlord may consent to
subsequent
assignments of the Lese or subletting or amendments or modifications to the Lease with
assignees of Tenant, without
notifying Tenant, or any successor of Tenant, and without obtaining its or their consent
thereto and any such actions
shall not relieve Tenant of liability under this Lease.
e. If Tenant assigns the Lease or sublets the Premises or requests the consent of Landlord to
any assignment or
subletting or if Tenant requests the consent of Landlord for any act that Tenant proposes to
do, then Tenant shall,
upon demand, pay Landlord an administrative fee of One Hundred and No/100ths Dollars
($100.00) plus any attorneys’
fees reasonable incurred by Landlord in connection with such act or request.
17. HOLDING OVER.
In the event Tenant holds over following the expiration or termination of this Lease, Tenant shall
be deemed to be occupying the Premises as a month to month tenant, and shall pay as rent a sum
equal to (i) one hundred twenty five percent (125%) of the Monthly Rent. Such monthly rent shall
be payable in advance on or before the first day of each month. If either party desires to
terminate such month to month tenancy, it shall give the other party not less than thirty (30)
days advance written notice of the date of termination.
18. SURRENDER OF PREMISES.
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a.
Tenant shall peaceably surrender the Premises to Landlord on the Expiration Date, in
broom-clean condition as in
as good condition as when Tenant took possession, except for (i) reasonable wear and tear,
(ii) loss by fire or other
casualty, and (iii) loss by condemnation. Tenant shall, on Landlord’s request, remove
Tenant’s Property on or before
the Expiration Date and promptly repair all damage to the Premises or Building caused by
such removal.
b. If Tenant abandons or surrenders the Premises, or is dispossessed by process of law or
otherwise, any of Tenant’s
Property left on the Premises shall be deemed to be abandoned, and, at Landlord’s option,
title shall pass to Landlord
under this Lease as by a xxxx of sale, if Landlord elects to remove all or any part of such
Tenant’s Property, the cost of
removal, including repairing any damage to the Premises or Building caused by such removal,
shall be paid by Tenant.
On the Expiration Date Tenant shall surrender all keys to Premises.
19. DESTRUCTION OR DAMAGE.
a. If the Premises or the portion of the Building necessary for Tenant’s occupancy is damaged
by fire, earthquake, act
of God, the elements of other casualty, Landlord shall, subject to the provisions of this
Article, promptly repair the
damage, if such repairs can, in Landlord’s opinion, be completed within (90) ninety days. If
Landlord determines that
repairs can be completed within ninety (90) days, this Lease shall remain in full force and
effect, except that if such
damage is not the result of the negligence or willful misconduct of Tenant’s or Tenant’s
agents, employees,
contractors, licensees or invitees, the Base Rent shall be abated to the extent Tenant’s use
of the Premises is
impaired, commencing with the date of damage and continuing until completion of the repairs
required of Landlord
under Section 19d.
b. If in Landlord’s opinion, such repairs to the Premises or portion of the Building
necessary for Tenant’s occupancy
cannot be completed within ninety (90) days, Landlord may elect, upon notice to Tenant given
within thirty (30) days
after the date of such fire or other casualty, to repair such damage, in which event this
Lease shall continue in full force
and effect, but the Base Rent shall be partially abated as provided in Section 19a. If
Landlord does not elect to make
such repairs, this Lease shall terminate as of the date of such fire or other casualty.
c. If the Premises are to be repaired under this Article, Landlord shall repair at its cost
any injury or damage to the
Building and Building Standard Work in the Premises. Tenant shall be responsible at its sole
cost and expense for the
repair, restoration and replacement of any other Leasehold Improvements and Tenant’s
Property. Landlord shall not
be liable for any loss of business, inconvenience or annoyance arising from any repair or
restoration of any portion of
the Premises, Building or Project as a result of any damage from fire or other casualty.
d. This Lease shall be considered an express agreement governing any case of damage to or
destruction of the
Premises, Building or Project by fire or other casualty, and any present or future law which
purports to govern the rights
of Landlord and Tenant in such circumstances in the absence of express agreement, shall have
no application.
20. EMINENT DOMAIN.
a. If the whole of the Building or Premises is lawfully taken by condemnation or in any other
manner for any public or
quasi-public purpose, this Lease shall terminate as of the date of such taking, and Rent
shall be prorated to such date.
If less than the whole of the Building or Premises is so taken, this Lease shall be
unaffected by such taking, provided that (i) Tenant shall have the right to terminate this
Lease by notice to Landlord given within ninety (90) days after the date of such taking if
twenty percent (20%) or more of the Premises is taken and the remaining area of the Premises
is not reasonably sufficient for Tenant to continue operation of its business, and (ii)
Landlord shall have the right to terminate this Lease by notice to Tenant given within
ninety (90) days after the date of such taking. If either Landlord or Tenant so elects to
terminate this Lease, the Lease shall terminate on the thirtieth (30th) day after either
such notice. The Rent shall be prorated to the date of termination. If this Lease continues
in force upon such partial taking, the Base Rent and Tenant’s Proportionate Share shall be
equitably adjusted according to the remaining Rentable Area of the Premises and Project.
b. In the event of any taking, partial or whole, all of the proceeds of any award, judgment
or settlement payable by the
condemning authority shall be the exclusive property of Landlord, and Tenant hereby assigns
to Landlord all of its right,
title and interest in any award, judgment or settlement from the condemning authority.
Tenant, however, shall have the
right, to the extent that Landlord’s award is not reduced or prejudiced, to claim from the
condemning authority (but not
from Landlord) such compensation as may be recoverable by Tenant in its own right for
relocation expenses and
damage to Tenant’s personal property.
c. In the event of a partial taking of the Premises which does not result in a termination of
this Lease, Landlord shall
restore the remaining portion of the Premises as nearly as practicable to its condition prior
to the condemnation or
taking, but only to the extent of Building Standard Work. Tenant shall be responsible at its
sole cost and expense for
the repair, restoration and replacement of any other Leasehold Improvements and Tenant’s
Property.
21. INDEMNIFICATION.
a. Tenant shall indemnify and hold Landlord harmless against and from liability and claims of
any kind for loss or
damage to property of Tenant or any other person, or for any injury to or death of any
person, arising out of: (1)
Tenant’s use and occupancy of the Premises, or any work, activity or other things allowed or
suffered by Tenant to be
done in, on or about the Premises; (2) any breach or default by Tenant of any of Tenant’s
obligation under this Lease;
or (3) any negligent or otherwise tortious act or omission of Tenant, its agents, employees,
invitees or contractors.
Tenant shall at Tenant’s expense, and by counsel satisfactory to Landlord, defend Landlord in
any action or proceeding
arising from any such claim and shall indemnify Landlord against all costs, reasonable
attorneys’ fees, reasonable
expert witness fees and any other expenses incurred in such action or proceeding. As a
material part of the
consideration for Landlord’s execution of this Lease, Tenant hereby assumes all risk of
damage or injury to any person
or property in, on or about the Premises from any cause.
b. Landlord shall not be liable for injury or damage which may be sustained by the person or
property of Tenant, its
employees, invitees or customers, or any other person in or about the Premises, caused by or
resulting from fire,
steam, electricity, gas, water or rain which may leak or flow from or into any part of the
premises, or from the breakage,
8
leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air
conditioning or lighting fixtures, whether such damage or injury results from conditions
arising upon the Premises or upon other portions of the Building or Project or from other
sources. Landlord shall not be liable for any damages arising from any act or omission of
any other tenant of the Building or Project.
c. Landlord shall indemnify and hold Tenant harmless against and from liability and claims
of any kind for loss or damage to property of Landlord or any other person, or for any
injury to or death of any person, arising out of: (1) Landlord’s use and occupancy of the
Premises, or any work, activity or other things allowed or suffered by Landlord to be done
in, on or about the Premises; (2) any breach or default by Landlord of any of Landlord’s
obligation under this Lease; or (3) any negligent or otherwise tortious act or omission of
Landlord, its agents, employees, invitees or contractors. Landlord shall at Landlord’s
expense, and by counsel satisfactory to Tenant, defend Tenant in any action or proceeding
arising from any such claim and shall indemnify Tenant against all costs, reasonable
attorneys’ fees, reasonable expert witness fees and any other expenses incurred in such
action or proceeding. As a material part of the consideration for Tenant’s execution of this
Lease, Tenant hereby assumes all risk of damage or injury to any person or property in, on
or about the Premises from any cause.
22. TENANT’S INSURANCE.
a. All insurance required to be carried by Tenant hereunder shall be issued by responsible
insurance companies
acceptable to Landlord and landlord’s lender and qualified to do business in the State.
Each policy shall name
Landlord, and at Landlord’s request any mortgagee of Landlord, as an additional insured, as
their respective interests
may appear. Each policy shall contain (i) a cross-liability endorsement, (ii) a provision
that such policy and the
coverage evidenced thereby shall be primary and non-contributing with respect to any policies
carried by Landlord and
that any coverage carried by Landlord shall be excess insurance, and (iii) a waiver by the
insurer of any right of
subrogation against Landlord, its agents, employees and representatives, which arises or
might arise by reason of any
payment under such policy or by reason of any act or omission of Landlord, its agents,
employees or representatives.
A copy of each paid up policy (authenticated by the insurer) or certificate of the insurer
evidencing the existence and
amount of each insurance policy required hereunder shall be delivered to Landlord before the
date Tenant is first given
the right of possession of the Premises, and thereafter within thirty (30) days after any
demand by Landlord therefor.
Landlord may, at any time and from time to time, inspect and/or copy any insurance policies
required to be maintained
by Tenant hereunder. No such policy shall be cancelable except after twenty (20) clays
written notice to landlord and
Landlord’s lender. Tenant shall furnish Landlord with renewals or “binders” of any such
policy at least ten (10) days
prior to the expiration thereof. Tenant agrees that if Tenant does not take out and maintain
such insurance, Landlord
may (but shall not be required to) procure said insurance on Tenant’s behalf and charge the
Tenant the premiums
together with a twenty-five percent (25%) handling charge, payable upon demand. Tenant shall
have the right to
provide such insurance coverage to the Premises, Landlord, Landlord’s mortgagee and Tenant as
required by this
Lease.
b. Beginning on the date Tenant is given access to the Premises for any purpose and
continuing until expiration of the
Term, Tenant shall procure, pay for and maintain in effect policies of casualty insurance
covering (i) all Leasehold
Improvements (including any alterations, additions or improvements as may be made by Tenant
pursuant to the
provisions of Article 12 hereof), and (ii) trade fixtures, merchandise and other personal
property from time to time in, on
or about the Premises, in an amount not less than on hundred percent (100%) of their actual
replacement cost from
time to time, providing protection against any peril included within the classification “Fire
and Extended Coverage”
together with insurance against sprinkler damage, vandalism and malicious mischief. The
proceeds of such insurance
shall be used for the repair or replacement of the property so insured. Upon termination of
this Lease following a
casualty as set forth herein, the proceeds under (i) shall be paid to Landlord, and the
proceeds under (ii) above shall
be paid to Tenant.
c. Beginning on the date Tenant is given access to the Premises for any purpose and
continuing until expiration of the
Term, Tenant shall procure, pay for and maintain in effect workers’ compensation insurance as
required by law and
comprehensive public liability and property damage insurance with respect to the construction
of improvements on the
Premises, the use, operation or condition of the Premises and the operations of Tenant in, on
or about the Premises,
providing personal injury and broad form property damage coverage for not less than One
Million Dollars
($1,000,000.00) combined single limit for bodily injury, death and property damage liability.
d. Not less than every three (3) years during the Term, Landlord and Tenant shall mutually
agree to increases in all of
Tenant’s insurance policy limits for all insurance to be carried by Tenant as set forth in
this Article. In the event
Landlord and Tenant cannot mutually agree upon the amounts of said increases, then Tenant
agrees that all insurance
policy limits as set forth in this Article shall be adjusted for increases in the cost of
living in the same manner as is set
forth in Section 5.2 hereof for the adjustment of the Base Rent.
23. WAIVER OF SUBROGATION.
Landlord
and Tenant each hereby waive all rights of recovery against the other and against the
officers, employees, agents and representatives of the other, on account of loss by or damage to
the waiving party of its property or the property of others under its control, to the extent that
such loss or damage is insured against under any fire and extended coverage insurance policy which
either may have in force at the time of the loss or damage. Tenant shall, upon obtaining the
policies of insurance required under this Lease, give notice to its insurance carrier or carriers
that the foregoing mutual waiver of subrogation is contained in this Lease.
24. SUBORDINATION AND ATTORNMENT.
Upon written request of Landlord, or any first mortgagee or first deed of trust beneficiary of
Landlord, or ground lessor of Landlord, Tenant shall, in writing, subordinate its rights under
this Lease to the lien of any first mortgage or first deed of trust, or to the interest of any
lease in which Landlord is lessee, and to all advances made or hereafter to be made thereunder.
However, before signing any subordination agreement, Tenant shall have the right to obtain from
any lender or lessor or Landlord requesting such subordination, an agreement in writing providing
that, as long as Tenant is not in default hereunder, this Lease shall remain in effect for the
full Term. The holder of any security interest may, upon written notice to Tenant, elect to have
this Lease prior to its security interest regardless of the time of the granting or recording of
such security interest.
9
In the event of any foreclosure sale, transfer in lieu of foreclosure or termination of the lease
in which Landlord is lessee, Tenant shall attorn to the purchaser, transferee or lessor as the case
may be, and recognize that party as Landlord under this Lease, provided such party acquires and
accepts the Premises subject to this Lease.
25. TENANT ESTOPPEL CERTIFICATES.
Within ten (10) days after written request from Landlord, Tenant shall execute and deliver to
Landlord or Landlord’s designee, a written statement certifying (a) that this Lease is unmodified
and in full force and effect, or is in full force and effect as modified and stating the
modifications; (b) the amount of Base Rent and the date to which Base Rent and additional rent
have been paid in advance; 8 the amount of any security deposited with Landlord; and (d) that
Landlord is not in default hereunder or, if Landlord is claimed to be in default, stating the
nature of any claimed default. Any such statement may be relied upon by a purchaser, assignee or
lender. Tenant’s failure to execute and deliver such statement within the time required shall at
Landlord’s election be a default under this Lease and shall also be conclusive upon Tenant that:
(1) this Lease is in full force and effect and has not been modified except as represented by
Landlord; (2) there are no uncured defaults in Landlord’s performance and that Tenant has no right
of offset, counter-claim or deduction against Rent; and (3) not more than one month’s Rent has
been paid in advance.
26. TRANSFER OF LANDLORD’S INTEREST.
In the event of any sale or transfer by Landlord of the Premises, Building or Project, and
assignment of this Lease by Landlord, Landlord shall be and is hereby entirely freed and relieved
of any and all liability and obligations contained in or derived from this Lease arising out of
any act, occurrence or omission relating to the Premises, Building, Project or Lease occurring
after the consummation of such sale or transfer, providing the purchaser shall expressly assume
all of the covenants and obligations of Landlord under this Lease. If any security deposit or
prepaid Rent has been paid by Tenant, Landlord may transfer the security deposit or prepaid Rent
to Landlord’s successor and upon such transfer, Landlord shall be relieved of any and all further
liability with respect thereto.
27. DEFAULT.
27.1
Tenant’s Default. The occurrence of any one or more of the following events shall constitute a
default and breach of this
Lease by Tenant:
a. If Tenant abandons or vacates the Premises; or
b. If Tenant fails to pay any Rent or any other charges required to be paid by Tenant under
this Lease and such failure
continues for five (5) days after such payment is due and payable; or
c. If Tenant fails to promptly and fully perform any other covenant, condition or agreement
contained in this Lease and
such failure continues for thirty (30) days after written notice thereof from Landlord to
Tenant; or
d. If a writ of attachment or execution is levied on this Lease or on any of Tenant’s
Property; or
e. If Tenant makes a general assignment for the benefit of creditors, or provides for an
arrangement, composition,
extension or adjustment with its creditors; or
f. If Tenant files a voluntary petition for relief or if a petition against Tenant in a
proceeding under the federal
bankruptcy laws or other insolvency laws is filed and not withdrawn or dismissed within
forty-five (45) days; or
g. If any proceeding or action in which Tenant is a party, a trustee, receiver, agent or
custodian is appointed to take
charge of the Premises or Tenant’s Property (or has the authority to do so) for the purpose
of enforcing a lien against
the Premises or Tenant’s Property; or
h. If Tenant is a partnership or consists of more than one (1) person or entity, if any
partner of the partnership or other person or entity is involved in any of the acts or
events described in subparagraphs d through g above.
27.2 Remedies. In the event of Tenant’s default hereunder, then in addition to any other rights or
remedies Landlord may have
under any law, Landlord shall have the right, at Landlord’s option, without further notice or
demand of any kind to do the
following:
a. Terminate this Lease and Tenant’s right to possession of the Premises and reenter the
Premises and take
possession thereof, and Tenant shall have no further claim to the Premises or under this
Lease; or
b. Continue this Lease in effect, reenter and occupy the premises for the account of Tenant,
and collect any unpaid
Rent or other charges which have or thereafter become due and payable; or
c. Reenter the Premises under the provisions of subparagraph b, and thereafter elect to
terminate this Lease and
Tenant’s right to possession of the Premises.
If Landlord reenters the Premises under the provisions of subparagraphs b or c above,
Landlord shall not be deemed to have terminated this Lease or the obligation of Tenant to
pay any Rent or other charges thereafter accruing, unless Landlord notifies Tenant in
writing of Landlord’s election to terminate this Lease. In the event of any reentry or
retaking of possession by Landlord, Landlord shall have the right, but not the obligation,
to remove all or any part of Tenant’s Property in the Premises and to place such property in
storage at a public warehouse at the expense and risk of Tenant. If Landlord elects to relet
the Premises for the account of Tenant, the rent received by Landlord from such reletting
shall be applied as follows: first, to the payment of any indebtedness other than Rent due
hereunder from Tenant to Landlord; second, to the payment of any costs of such reletting;
third, to the payment of the cost of any alterations or repairs to the Premises; fourth to
the payment of Rent due and unpaid hereunder; and the balance, if
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any, shall be held by Landlord and applied in payment of future Rent as it becomes due. If
that portion of rent received from the reletting which is applied against the Rent due
hereunder is less than the amount of the Rent due, Tenant shall pay the deficiency to
Landlord promptly upon demand by Landlord. Such deficiency shall be calculated and paid
monthly. Tenant shall also pay to Landlord, as soon as determined, any costs and expenses
incurred by Landlord in connection with such reletting or in making alterations and repairs
to the Premises, which are not covered by the rent received from the reletting.
Should Landlord elect to terminate this Lease under the provisions of subparagraph a or c
above, Landlord may recover as damages from Tenant the following:
1.
Past Rent. The worth at the time of the award of any unpaid Rent which had been earned
at the time of
termination; plus
2. Rent Prior to Award. The worth at the time of the award of the amount by which the
unpaid Rent which would
have been earned after termination until the time of award exceeds the amount of such
rental loss that Tenant
proves could have been reasonably avoided; plus
3. Rent After Award. The worth at the time of the award of the amount by which the
unpaid Rent for the balance of
the Term after the time of award exceeds the amount of the rental loss that Tenant proves
could be reasonably
avoided; plus
4. Proximately caused damages. Any other amount necessary to compensate Landlord for all
detriment
proximately caused by Tenant’s failure to perform its obligations under this Lease or
which in the ordinary course
of things would be likely to result therefrom, including, but not limited to, any costs
or expenses (including
attorneys’ fees), incurred by Landlord in (a) retaking possession of the Premises, (b)
maintaining the Premises
after Tenant’s default, 8 preparing the Premises for reletting to a new tenant, including
any repairs or alterations,
and (d) reletting the Premises, including broker’s commissions.
“The worth at the time of the award” as used in subparagraphs 1 and 2 above, is to be
computed by allowing interest at the rate of ten percent (10%) per annum. “The worth at
the time of the award” as used in subparagraph 3 above, is to be computed by discounting
the amount at the discount rate of the Federal Reserve Bank situated nearest to the
Premises at the time of the award plus one percent (1%)
The waiver by Landlord of any breach of any term, covenant or condition of this Lease
shall not be deemed a waiver of such term, covenant or condition or of any subsequent
breach of the same or any other term, covenant or condition. Acceptance of Rent by
Landlord subsequent to any breach hereof shall not be deemed a waiver of any preceding
breach other than the failure to pay the particular Rent so accepted, regardless of
Landlord’s knowledge of any breach at the time of such acceptance of Rent. Landlord
shall not be deemed to have waived any term, covenant or condition unless Landlord gives
Tenant written notice of such waiver.
27.3 Landlord’s Default. If Landlord fails to perform any covenant, condition or agreement
contained in this lease within thirty (30) days after receipt of written notice from Tenant
specifying such default, or if such default cannot reasonably be cured within thirty (30) days, if
Landlord fails to commence to cure within that thirty (30) day period, then Landlord shall be
liable to Tenant for any damages sustained by Tenant as a result of Landlord’s breach; provided,
however, it is expressly understood and agreed that if Tenant obtains a money judgement against
Landlord resulting from any default or other claim arising under this Lease, that judgement shall
be satisfied only out of the rents, issues, profits, and other income actually received on account
of Landlord’s right, title and interest in the Premises, Building or Project, and no other real,
personal or mixed property of Landlord (or of any of the partners which comprise Landlord, if any)
wherever situated, shall be subject to levy to satisfy such judgment. If, after notice to Landlord
of default, Landlord (or any first mortgagee or first deed of trust beneficiary of Landlord) fails
to cure the default as provided herein, then Tenant shall have the right to cure that default at
Landlord’s expense. Tenant shall not have the right to terminate this Lease or to withhold, reduce
or offset any amount against any payments of Rent or any other charges due and payable under this
Lease except as otherwise specifically provided herein.
28. BROKERAGE FEES.
Tenant warrants and represents that it has not dealt with any real estate broker or agent in
connection with this Lease or its negotiation except those noted in Section 2.c. Tenant shall
indemnify and hold Landlord harmless from any cost, expense or liability (including costs of suit
and reasonable attorneys’ fees) for any compensation, commission or fees claimed by any other real
estate broker or agent in connection with this Lease or its negotiation by reason of any act of
Tenant. Landlord has an executed listing agreement with Coldwell Banker Commercial NRT and is
responsible for payment of fees as outlined in that listing agreement.
29. NOTICES.
All notices, approvals and demands permitted or required to be given under this Lease shall be in
writing and deemed duly served or given if personally delivered or sent by certified or registered
U.S. mail, postage prepaid, and addressed as follows: (a) if to Landlord, to Landlord’s Mailing
Address and to the Building manager, and (b) if to Tenant, to Tenant’s Mailing Address; provided,
however, notices to Tenant shall be deemed duly served or given if delivered or mailed to Tenant
at the premises. Landlord and Tenant may from time to time by notice to the other designate
another place for receipt of future notices.
30. GOVERNMENT ENERGY OR UTILITY CONTROLS.
In the event of imposition of federal, state or local government controls, rules, regulations, or
restrictions on the use or consumption of energy or other utilities during the Term, both Landlord
and Tenant shall be bound thereby. In the event of a difference in interpretation by Landlord and
Tenant of any such controls, the interpretation of Landlord shall prevail, and Landlord shall have
the right to enforce compliance therewith, including the right of entry into the Premises to
effect compliance.
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32. QUIET ENJOYMENT.
Tenant, upon paying the Rent and performing all of its obligations under this Lease, shall
peaceably and quietly enjoy the Premises, subject to the terms of this Lease and to any mortgage,
lease, or other agreement to which this Lease may be subordinate.
33. OBSERVANCE OF LAW.
Tenant shall not use the Premises or permit anything to be done in or about the Premises which
will in any way conflict with any law, statute, ordinance or governmental rule or regulation now
in force or which may hereafter be enacted or promulgated. Tenant shall, at its sole cost and
expense, promptly comply with all laws, statutes, ordinances and governmental rules, regulations
or requirements now in force or which may hereafter be in force, and with the requirements of any
board of fire insurance underwriters or other similar bodies now or hereafter constituted,
relating to, or affecting the condition, use or occupancy of the Premises, excluding structural
charges not related to or affected by Tenant’s improvements or acts. The judgment of any court of
competent jurisdiction or the admission of Tenant in any action against Tenant, whether Landlord
is a party thereto or not, that Tenant has violated any law, ordinance or governmental rule,
regulation or requirement, shall be conclusive of that act as between Landlord and Tenant.
34. FORCE MAJEURE.
Any prevention, delay or stoppage of work to be performed by Landlord or Tenant which is due to
strikes, labor disputes, inability to obtain labor, materials, equipment or reasonable substitutes
thereof, acts of God, governmental restrictions or regulations or controls, judicial orders, enemy
or hostile government actions, civil commotion, fire or other casualty, or other causes beyond the
reasonable control of the party obligated to perform hereunder, shall excuse performance of the
work by that party for a period equal to the duration of that prevention, delay or stoppage.
Nothing in this Article 34 shall excuse or delay Tenant’s obligation to pay Rent or other charges
under this Lease.
35. CURING TENANT’S DEFAULTS.
If Tenant defaults in the performance of any of its obligations under this Lease, Landlord may
(but shall not be obligated to) without waiving such default, perform the same for the account at
the expense of Tenant. Tenant shall pay Landlord all costs of such performance promptly upon
receipt of a xxxx therefor.
36. SIGN CONTROL.
Landlord shall furnish and install Tenant identification signage on the monument sign, Tenants
entry door and on the Building directory. Additionally, Tenant shall have the right to furnish and
install crown signage on the Building of its name and logo at its sole cost and expense. The
location and design of the crown signage shall be approved by Landlord, which shall not be
unreasonably withheld and must comply with all city or other municipalities’ ordinances. Tenant is
responsible to repair any damage caused by the installation of crown signage.
37. MISCELLANEOUS.
a. Accord and Satisfaction; Allocation of Payments. No payment by Tenant or receipt by
Landlord of a lesser amount than the Rent provided for in this Lease shall be deemed to be
other than on account of the earliest due Rent, nor shall any endorsement or statement on
any check or letter accompanying any check or payment as Rent be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s
right to recover the balance of the Rent or pursue any other remedy provided for in this
Lease. In connection with the foregoing, Landlord shall have the absolute right in its sole
discretion to apply any payment received from Tenant to any account or other payment of
Tenant then not current and due or delinquent.
b. Addenda. If any provision contained in an addendum to this Lease is inconsistent with any
other provision herein, the provision contained in the addendum shall control, unless
otherwise provided in the addendum.
c. Attorneys’ Fees. If any action or proceeding is brought by either party against the other
pertaining to or arising out of this Lease, the finally prevailing party shall be entitled
to recover all costs and expenses, including reasonable attorneys’ fees, incurred on account
of such action or proceeding.
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d.
Captions, Articles and Section Numbers. The captions
appearing within the body of this Lease have
been inserted
as a matter of convenience and for reference only and in no way define, limit or enlarge the scope
or meaning of this
Lease. All references to Article and Section numbers refer to Articles and Sections in this Lease.
e. Changes Requested by Lender. Neither Landlord or Tenant shall unreasonably withhold its consent
to changes or
amendments to this Lease requested by the lender on Landlord’s interest, so long as these changes
do not alter the
basic business terms of this Lease or otherwise materially diminish any rights or materially
increase any obligations of
the party from whom consent to such charge or amendment is requested.
f. Choice of Law. This Lease shall be construed and enforced in accordance with the laws of the
State of Utah.
g. Consent. Notwithstanding anything contained in this Lease to the contrary, Tenant shall have no
claim, and hereby
waives the right to any claim against Landlord for money damages by reason of any refusal,
withholding or delaying by
Landlord of any consent, approval or statement of satisfaction, and in such event, Tenant’s only
remedies therefor shall
be an action for specific performance, injunction or declaratory judgment to enforce any right to
such consent, etc.
h. Corporate Authority. If Tenant is a corporation, each individual signing this Lease on behalf
of Tenant represents and warrants that he is duly authorized to execute and deliver this Lease on
behalf of the corporation, and that this Lease is binding on Tenant in accordance with its terms.
Tenant shall, at Landlord’s request, deliver a certified copy of a resolution of its board of
directors authorizing such execution.
i. Counterparts. This Lease may be executed in multiple counterparts, all of which shall
constitute one and the same Lease.
j. Execution of Lease; No Option. The submission of this Lease to Tenant shall be for examination
purposed only, and does not and shall not constitute a reservation of or option for Tenant to
lease, or otherwise create any interest of Tenant in the Premises or any other premises within the
Building or Project. Execution of this Lease by Tenant and its return to Landlord shall not be
binding on Landlord notwithstanding any time interval, until Landlord has in fact signed and
delivered this Lease to Tenant.
k. Furnishing of Financial Statements; Tenant’s Representations. In order to induce Landlord to
enter into this Lease Tenant agrees that it shall promptly furnish Landlord, from time to time,
upon Landlord’s written request, with financial statements reflecting Tenant’s current financial
condition. Tenant represents and warrants that all financial statements, records and information
furnished by Tenant to Landlord in connection with this Lease are true, correct and complete in
all respects.
l. Further Assurances. The parties agree to promptly sign all documents reasonably requested to
give effect to the provisions of this Lease.
m. Mortgagee Protection. Tenant agrees to send by certified or registered mail to any first
mortgagee or first deed of trust beneficiary of Landlord whose address has been furnished to
Tenant, a copy of any notice of default served by Tenant on Landlord. If Landlord fails to cure
such default within the time provided for in this Lease, such mortgagee or beneficiary shall have
an additional thirty (30) days to cure such default; provided that if such default cannot
reasonably be cured within that thirty (30) day period, then such mortgagee or beneficiary shall
have such additional time to cure the default as is reasonably necessary under the circumstances.
n. Prior Agreements; Amendments. This Lease contains all of the agreements of the properties with
respect to any matter covered or mentioned in this Lease, and no prior agreement or understanding
pertaining to any such matter shall be effective for any purpose. No provisions of this Lease may
be amended or added to except by an agreement in writing signed by the parties or their respective
successors in interest.
o. Recording. Tenant shall not record this Lease without the prior written consent of Landlord.
Tenant, upon request of Landlord, shall execute and acknowledge a “short form” memorandum of this
Lease for recording purposes.
p. Severability. A final determination by a court of competent jurisdiction that any provision of
this Lease is invalid shall not affect the validity of any other provision, and any provision so
determined to be invalid shall, to the extent possible, be construed to accomplish its intended
effect.
q. Successors and Assigns. This Lease shall apply to and bind the heirs, personal
representatives, and permitted successors and assigns of the parties.
r. Time of the Essence. Time is of the essence of this Lease.
s. Waiver. No delay or omission in the exercise of any right or remedy of Landlord upon any
default by Tenant shall impair such right or remedy or be construed
as a waiver of such default.
The receipt and acceptance by Landlord of delinquent Rent shall not constitute a waiver of any
other default; it shall constitute only a waiver of timely payment for the particular Rent
payment involved.
No act or conduct of Landlord, including, without limitation, the acceptance of keys to the
Premises, shall constitute an acceptance of the surrender of the Premises by Tenant before the
expiration of the Term. Only a written notice from Landlord to Tenant shall constitute acceptance
of the surrender of the Premises and accomplish a termination of the Lease.
Landlord’s consent to or approval of any act by Tenant requiring Landlord’s consent or approval
shall not be deemed to waive or render unnecessary Landlord’s consent to or approval of any
subsequent act by Tenant.
Any waiver by Landlord of any default must be in writing and shall not be a waiver of any other
default concerning the same or any other provision of the Lease.
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The
parties hereto have executed this Lease as of the dates set forth below.
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CONSULT YOUR ADVISORS — This document has been prepared for approval by your attorney. No
representation or recommendation
is made as to the legal sufficiency or tax consequences of this document or the transaction to
which it relates. These are questions or
your attorney.
In any real estate transaction, it is recommended that you consult with a professional, such as a
civil engineer, industrial hygienist or other
person, with experience in evaluating the condition of the property, including the possible
presence of asbestos, hazardous materials and
underground storage tanks.
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