SUBLEASE AGREEMENT
EXHIBIT
10.1
THIS
SUBLEASE AGREEMENT (this "Sublease") dated as of
November 13, 2009 is entered into by and between WASATCH RESEARCH PARK 1, LLC, a
Utah limited liability company, as master tenant (“Landlord”), and XXXXX &
XXXXXXXXXX COMPUTER CORPORATION, a Utah corporation ("Tenant").
1. MASTER
LEASE. Landlord is the tenant under that certain University of Utah Research
Park Master Form Lease - Lease Agreement dated April, 1 1988, as Amended
(collectively, the “Master
Lease”). A copy of the Master Lease is attached hereto and
incorporated herein as Exhibit
C. Landlord as Lessee under the Master Lease is leasing the
Premises to Tenant as sublessee.
2. PREMISES.
(a) Premises. The
premises (the “Premises”) is located in three
(3) structures situated on approximately 5.9 acres of land (the “Property”) in Xxxx Xxxx
Xxxxxx, Xxxx Xxxx Xxxx, Xxxx commonly known as 770 & 000 Xxxxx Xxxxx, Xxxx
Xxxx Xxxx, Xxxx 00000 shown on Exhibit A – Site Plan, attached hereto and
incorporated herein. The Property includes (i) the 770
Office/Warehouse Building located at 000 Xxxxx Xxxxx (the “Office/Warehouse Building”),
(ii) the 790 Shop Building located at 000 Xxxxx Xxxxx (the “Shop”), (iii) the Electrical
Substation located on Komas Drive (the “Substation”), and (iv) the
surface parking stalls located on the Property (the “Parking Lot”). The
Office/Warehouse Building, the Shop and the Substation are collectively referred
to herein as the “Buildings.” A legal
description of the Property is attached hereto as Exhibit B and
incorporated herein.
(b) Sublease. Landlord
hereby subleases to Tenant, and Tenant hereby subleases from Landlord, for the
Term of this Sublease (defined in Section 3 below), and
subject to the terms and conditions hereinafter set forth, to each and all of
which Landlord and Tenant hereby mutually agree, the Premises which include a
total of approximately 60,021 rentable square feet (“RSF”), as
follows:
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(i)
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Approximately
49,853 RSF located in the Office / Warehouse Building consisting of 29,320
RSF of office space (the “Office Space”) and
20,533 RSF of warehouse space (the “Warehouse Space”);
and
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(ii)
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Approximately
6,808 RSF located in the Shop; and
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(iii)
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Approximately
3,360 RSF located in the
Substation.
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(c) Common Area. In
addition, the Premises shall include the appurtenant right to use the site, the
Parking Lot and the landscaped areas appurtenant to or associated with the
Office/Warehouse Building, the Shop, and the Substation (collectively, the
“Common
Area”).
(d) Acceptance of
Premises. Tenant, by taking possession of the Premises
shall be deemed to accept the Premises as being in the condition in which
Landlord is obligated to deliver the Premises. Tenant shall at the
end of the Term and any extension herein surrender to Landlord the Premises and
all alterations, additions and improvements thereto in the same condition as
when received, ordinary wear and tear, damage by fire, earthquake, or act of God
excepted. Landlord has no liability and has made no representation
that it will alter, improve, repair, or paint the Premises or any part
thereof.
3. TERM.
(a) Sublease
Term. The term of this Sublease (the “Term”) initially shall be five
(5) years and shall commence on the date in which possession of the Premises is
delivered to Tenant (the "Commencement
Date"). In the event possession is delivered on a date other
than the first day of a calendar month, the first month of the Term shall begin
on the first day of the next calendar month.
(b) Option to
Renew. As long as Tenant is not in default of any provisions
of this Sublease at the time of exercise, Tenant shall have two (2) options to
extend the Term of this Sublease each for an additional period of five (5) years
(each an “Extended
Term”) provided that Tenant is leasing the same or greater square footage
during the option period(s). The option must be exercised by written
notice to Landlord given at least six (6) months prior to the expiration of the
Term then in effect. Should Tenant fail to provide such notice timely, this
option to renew shall expire and be null and void for all time
thereafter. Each Extended Term shall be upon the same covenants,
agreements, provisions and conditions that are contained in the Agreement,
except as expressly provided herein to the contrary. The Base Rent
shall be adjusted to equal the then fair market rental for the Premises as
exists upon commencement of each of the Extended Terms. In these
circumstances, the fair market rental for the Premises shall be determined by a
reputable, MAI appraiser licensed in the State of Utah mutually approved by
Landlord and Tenant. If Landlord and Tenant cannot agree on the
selection of an appraiser, then they each shall select reputable, MAI appraisers
licensed in the State of Utah and if these appraisers cannot agree on the fair
market rental for the Premises for the Base Rent, then they shall select a third
MAI appraiser and the decision of a majority of the appraisers shall establish
the fair market rental for the Premises for the Base Rent. The costs
for the appraiser(s) shall be equally split between Landlord and
Tenant.
4. RENT.
(a) Base
Rent. The triple net, base rent shall be FIVE HUNDRED ONE
THOUSAND ONE HUNDRED FORTY-ONE AND 60/100 DOLLARS ($501,141.60) per annum (the
“Base
Rent”). The Base Rent consists of the following and/or shall
be paid in this manner:
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(i)
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FORTY
ONE THOUSAND SEVEN HUNDRED SIXTY-ONE AND 80/100 DOLLARS ($41,761.80) per
month from November 13, 2010 to October 31, 2015 (with the Base Rent
prorated for any partial months).
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(ii)
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The
amount of the Base Rent consists of the following
components:
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Space:
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Monthly Rent
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Annual Rent
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Office
Space Rent:
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$ | 29,320.00 | $ | 351,840.00 | ||||
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Warehouse
Space Rent:
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$ | 10,263.80 | $ | 123,165.60 | ||||
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Shop
Rent:
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$ | 1,702.00 | $ | 20,424.00 | ||||
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Substation
Rent:
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$ | 476.00 | $ | 5,712.00 | ||||
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TOTAL
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$ | 41,761.80 | $ | 501,141.60 | ||||
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(iii)
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One
twelfth (1/12) of the Base Rent shall be payable in advance each
month on or before the 1st day of each month during the duration of this
Sublease, with the first such monthly rental payment plus the security
deposit referenced in Section 32
below in the amount of ONE HUNDRED AND TWENTY FIVE THOUSAND AND NO/100
DOLLARS ($125,000.00) being due upon the execution of this
Sublease. Any partial months shall be prorated
accordingly. Similarly, if the Substation is sold during the
Term of this Sublease, the Rents (described hereafter) shall be reduced by
the amount of allocated to the Substation set forth above. All
Base Rent and Additional Rent defined below (collectively, the "Rents") shall be paid to
the following address, unless otherwise directed in writing: Wasatch
Research Park I, LLC, 000 Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxx, Xxxx
00000.
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(b) Additional
Rent. All obligations payable by Tenant under this Sublease
other than the Base Rent are called "Additional
Rent." Unless otherwise provided, Additional Rent shall be
paid with the monthly installment of Base Rent.
(c) Master Lease
Escalations. Tenant shall pay as Additional Rent the amount of
any increase in the rental to be paid by Landlord after the Commencement Date of
the Sublease as determined under Section 1.4 “Escalation Clause” of the Master
Lease.
(d) Interest, Late Charges,
Costs and Attorneys' Fees. If Tenant fails to pay within ten
(10) days of the date due any Rents which Tenant is obligated to pay under this
Sublease, the unpaid amount shall bear interest at twelve percent (12%) per
annum. Tenant acknowledges that any late payments of Rents shall
cause Landlord to lose the use of that money and incur costs and expenses not
contemplated under this Sublease, including without limitation administrative,
collection and accounting costs, the exact amount of which is difficult to
ascertain. Therefore, in addition to interest, if any payment is not
received by Landlord within ten (10) days from the date it is due, Tenant shall
also pay Landlord a late charge equal to five percent (5%) of the amount of each
such late Rents. Further, as Additional Rent, Tenant shall be liable
to Landlord for costs and attorneys' fees incurred as a result of late payments
or non-payments. Acceptance of any interest, late charge, costs or
attorneys' fees shall not constitute a waiver of any default by Tenant nor
prevent Landlord from exercising any other rights or remedies under this
Sublease or at law.
5. USE.
(a) The
Premises shall be used for general office, research and light manufacturing uses
and any other lawful purpose incidental to Tenant's business, and no other,
unless consented to in writing by Landlord. Tenant shall not do or
permit to be done in or about the Premises, Buildings, or Common Area, anything
which is prohibited by or in any way in conflict with any and all laws,
statutes, ordinances, rules and regulations now in force or which may hereafter
be enacted or promulgated or which is prohibited by the standard form of fire
insurance policy, or which will increase the existing rate of or affect any fire
or other insurance upon the Premises, Buildings or any of its contents, or
Common Area or cause a cancellation of any insurance policy covering the
Premises or Buildings or any part thereof or any of its contents, or the Common
Area (in the case of hazardous material, Tenant shall notify Landlord of any
such materials and shall ensure that any such hazardous material is properly
controlled, safeguarded, and disposed). Tenant shall not do or permit
anything to be done in or about the Premises, Buildings, or the Common Area
which will in any way violate Rules or Regulations attached hereto as Exhibit D
and those hereafter reasonably promulgated by Landlord and provided to Tenant,
or use or allow the Premises, Buildings or the Common Area to be used for any
improper, immoral, or unlawful purpose, nor shall Tenant cause, maintain or
permit any nuisance, in, on or about the Premises, Buildings, or the Common Area
or commit or suffer to be committed any waste in, on or about the Premises,
Buildings or the Common Area.
(b) Tenant
shall not manufacture, assemble or store materials in the Common
Area.
6. MAINTAINANCE
AND REPAIR.
Tenant,
at its sole cost and expense, shall insure and keep and maintain the entire
exterior and interior of the Premises, and all facilities and systems
appurtenant thereto, in good condition and repair, and in full compliance with
all governmental health and police regulations now or hereafter in
force. Tenant shall further keep and maintain the improvements at any
time situated upon the Premises and the Parking Lot and the Common Area in good
repair, safe, secure and clean, including, without limitation, snow and ice
clearance and shrubbery removal, in conformity with the lawful and valid
requirements of any governmental authority having jurisdiction over the
Property. Notwithstanding the forgoing, Landlord shall not require
any capital replacements that are not approved by Landlord and
Tenant.
7. ALTERATIONS.
(a) Tenant
will not make or suffer to be made any alterations, additions or improvements in
excess of $30,000 (collectively, the "Alterations") to or upon the
Premises, Buildings, or any part thereof, or attach any fixtures or equipment
thereto, without first obtaining Landlord's written approval, which shall not be
unreasonably withheld or delayed. Any contractor selected by Tenant
to make the Alterations in excess of $30,000 shall be subject to Landlord's
reasonable prior written approval. Any Alterations to or upon the
Premises shall be made by Tenant at Tenant's sole cost and
expense. All such Alterations permanent in character, made in or upon
the Premises either by Tenant or Landlord, may at the option of Landlord, become
Landlord's property and, at the end of the term or any extension hereof, shall
remain on the Premises without compensation to Tenant unless Landlord requests
that Tenant remove any such Alterations. Notwithstanding the above,
Tenant's trade equipment, fixtures, work stations and other items of personal
property shall remain Tenant's property.
(b) Any
Alterations shall, when completed, be of such a character as not to lessen the
value of the Premises or such improvements as may be located
thereon. Any Alterations shall be made promptly and in a good
workmanlike manner, and in compliance with all applicable permits, building and
zoning laws, and with all other laws, ordinances, orders, rules, regulations and
requirements of all federal, state and municipal governments, departments,
commissions, boards and offices. The costs of any such Alterations
shall be paid by Tenant, so that the Premises are free of liens, for services
performed, labor and material supplied or claimed to have been
supplied. Before any Alterations shall be commenced, Tenant shall pay
any increase in premiums on insurance policies (provided for herein) or ensure
adequate coverage is in place for all risks related to the construction of such
Alterations and the increased value of the Premises.
8. SIGNAGE.
Any
signage must be removed, at Tenant’s sole cost, at the end of the Term of this
Sublease or upon Tenant’s failing to have possession of the
Premises. The cost of installation, maintenance and removal of
signage shall be paid by Tenant. Tenant may place any signage upon
the Property permitted under the Master Lease and applicable law .
9. 9. LIENS.
Tenant
shall keep the Premises and the Buildings free from any mechanics' and/or
materialmen's liens or other liens arising out of any work performed, materials
furnished or obligations incurred by Tenant. Tenant shall notify
Landlord in writing at least seventy-two (72) hours before any work or activity
is to commence on the Premises costing in excess of $30,000 which may give rise
to such liens to allow Landlord to post and keep posted on the Premises any
notices which Landlord may deem to be proper for the protection of Landlord and
the Premises from such liens.
10. DESTRUCTION
OR DAMAGE.
(a)
If the Premises are partially damaged by fire or other
insured casualty:
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(i)
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Tenant
shall repair the same at Tenant’s expense (but also with the use of the
insurance proceeds from the insurance policies purchased by Tenant as
described in Section 14
below), subject to the provisions of this Section and
provided such repairs can, in Landlord's reasonable opinion, be made
within ninety (90) days after the fire or casualty. During such
repairs, this Sublease shall remain in full force and effect but Rents
shall be proportionately abated for such damaged part of the
Premises.
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(ii)
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If
in Landlord's reasonable opinion the partially damaged Premises can be
repaired, but not within ninety (90) days, the Landlord may elect, upon
written notice to Tenant within thirty (30) days (the “Notice Date”) of such
damages, to have Tenant repair such damages within one hundred eighty
(180) days after commencement of repair and continue this Sublease in full
force and effect, but with Rents partially abated from the notice date
until the completion of repair to the extent of the value of that portion
of the Premises of whose use the Tenant is deprived during the period of
such repair. In the event such repairs cannot be made within
one hundred eighty (180) days, Landlord may cancel this Sublease as of the
date of damage by notice to Tenant on or before the Notice
Date. If Landlord fails to elect to have the Premises repaired
or to cancel, Tenant will repair the Premises and rent will xxxxx in the
same manner as provided above as though Landlord had elected to have the
Premises repaired.
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(iii)
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If
the partially damaged Premises are to be repaired under this Section, Tenant
shall repair such damages to the Premises itself. Except in the
event of damage resulting from Landlord's gross negligence or willful
misconduct, Tenant shall be responsible for Tenant's equipment, furniture
and fixtures, and other alterations, additions and improvements made by
Tenant to the Premises and
Buildings.
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(b) If
in Landlord's or Tenant’s reasonable opinion, the Premises is totally or
substantially destroyed by fire or other casualty and cannot be repaired or
replaced within one hundred eighty (180) days, this Sublease shall terminate
upon notice by either Landlord or Tenant.
11. This
Section
purposely omitted.
12. INDEMNIFICATION.
Tenant
agrees to indemnify, defend and hold harmless Landlord and its officers,
directors, partners and employees from and against all loss liabilities,
judgments, demands, actions, expenses or claims, including reasonable attorney's
fees and court costs, for injury to or death of any person, the release of any
hazardous materials, or for damages to any property to the extent arising out of
or connected with (i) the use, occupancy or enjoyment of this Subleased
Premises, Buildings, or Common Area by Tenant or Tenant's agents, employees,
invitees, licensees, or contractors (collectively, the "Tenant's Agents"), or any work
or activity performed by Tenant or by Tenant's Agents in, or about the Premises,
the Buildings, or the Common Area, including any Tenant improvements (but
specifically excluding work performed by Landlord or its agents), (ii) any
breach or default in the performance of any obligation of Tenant under this
Sublease, or (iii) any negligent act of Tenant or Tenant's Agents (excluding
Tenant's licensees) on or about the Premises, Buildings, or Common Area or any
negligent act of Tenant's licensees on or about the Premises, Buildings or
Common Area. Notwithstanding the foregoing, Tenant shall not be
liable to the extent that damage or injury is determined ultimately to be caused
by the negligent act of Landlord, or of Landlord's employees, agents, invitees,
licensees, or contractors (collectively, "Landlord's
Agents"). All property of Tenant kept or stored on this
Subleased Premises or in the Buildings shall be so kept or stored at the risk of
Tenant only, and Tenant shall hold Landlord free and harmless from any claims
arising out of damage to the same, unless such damage shall be caused by the
negligent act of Landlord or Landlord's Agents. The indemnification
contained herein shall survive the expiration or earlier termination of this
Sublease as to acts occurring prior to such expiration or
termination. If any action or proceeding is brought against Landlord,
its employees or agents by reason of any such claim, Tenant, upon notice from
Landlord, will defend the claim at Tenant’s expense.
Landlord
agrees to indemnify, defend and hold harmless Tenant and its officers,
directors, partners and employees from and against all liabilities, judgments,
demands, actions, expenses or claims, including reasonable attorneys' fees and
court costs, for injury to or death of any person, the release of any hazardous
materials or for damages to any property to the extent arising out of or
connected with (i) the use, management or operation of the Premises, the
Buildings, the Parking Lot or the Common Area by Landlord or by Landlord's
Agents, or any work or activity performed by Landlord or by Landlord's Agents
in, on or about the same, (ii) any breach or default in the performance of any
obligation of Landlord under this Sublease, or (iii) any negligent act of
Landlord or Landlord's Agents on or about the Premises, the Buildings, the
Parking Lot or the Common Area. Notwithstanding the foregoing,
Landlord shall not be liable to the extent that damage or injury is determined
ultimately to be caused by the negligent act of Tenant or Tenant's
Agents. The indemnification contained herein shall survive the
expiration or earlier termination of this Sublease as to acts occurring prior to
such expiration or termination. If any action or proceeding is
brought against Tenant, its employees or agents by reason of any such claim,
Landlord, upon notice from Tenant, will defend the claim at Landlord’s expense
with counsel reasonably satisfactory to Tenant.
13. COMPLIANCE
WITH LEGAL REQUIREMENTS.
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, the requirements of any board of fire
underwriters or other similar body now or hereafter constituted, any direction
or occupancy certificate issued pursuant to any law by any public officer or
officers, as well as the provisions of all recorded documents affecting the
Premises, (collectively the "Applicable Laws"), insofar as
any thereof relate to or affect the use or occupancy of the Premises, Buildings,
or Common Area, excluding requirements of structural changes now related to or
affected by improvements made by or for Tenant.
14. INSURANCE.
(a)
Coverage. Tenant shall, at all times during the term of this
Lease, and at its own cost and expense, procure and continue in force the
following insurance coverage:
(i)
All Risk of Physical Loss Policy with full replacement cost. Business
interruption insurance in the event of loss of earnings resulting from physical
loss. Earthquake coverage. Landlord named on all policies with a loss payable
endorsement.
(ii)
Commercial General Liability including all coverage normally provided therein to
cover the Premises with a limit of $5,000,000.00 per occurrence.
(iii)
Business Auto with limit of $1,000,000.00 per occurrence for owned and non-owned
vehicles.
(iv)
Workers compensation insurance with statutory limits.
(v)
Tenant's Additional Insurance. Tenant shall, at its sole cost
and expense, cause all equipment, machinery, furniture and fixtures, personal
property, and Tenant Improvements supplied by Tenant from time to time used or
intended to be used in connection with the operation and maintenance of the
Premises, to be insured by Tenant against loss or damage. Except for
losses caused by Landlord's gross negligence or willful misconduct, Landlord is
in no way liable for any property of the Tenant's.
(b) Insurance
Policies. The aforementioned minimum limits of policies shall
in no event limit the liability of Tenant hereunder. The aforesaid
insurance shall name Landlord as an additional insured. Said
insurance shall be with companies having a rating of not less than AX in “Best's
Insurance Guide” or as agreed by Landlord. Tenant shall furnish from
the insurance companies or cause the insurance companies to furnish to Landlord
certificates of coverage on the Commencement Date and thereafter upon renewal of
each policy. Insurer shall endeavor to provide thirty (30) days prior
written notice to Landlord of , reduction of coverage, other
modification or cancellation, except ten (10) days for non-payment of
premium. All such policies shall be written as primary policies, not
contributing with and not in excess of the coverage which Landlord may
carry. Tenant shall, at expiration of such policies, furnish Landlord
with current certificates of insurance. Tenant agrees that
if Tenant does not take out and maintain such insurance, Landlord may (but shall
not be required to), after ten (10) days written notice to Tenant and an
opportunity to cure by Tenant, procure said insurance on Tenant's behalf and
charge Tenant the premiums together with a fifteen percent (15%) handling
charge, payable upon demand. Tenant shall have the right to provide
such insurance coverage pursuant to policies obtained by Tenant, provided such
policies expressly afford coverage to the Premises, Parking Lot and to Tenant as
required by this Lease.
15. ASSIGNMENT
AND SUBLETTING.
In the
event Tenant should desire to assign this Sublease or sub-sublet the Premises,
Tenant shall give Landlord written notice of such desire at least thirty (30)
days in advance of the date on which Tenant desires to make such assignment or
sub-sublease. Landlord shall then have a period of thirty (30) days
following receipt of such notice within which to notify Tenant in writing that
Landlord elects either (i) to terminate this Sublease as of the date so
specified by Tenant, in which event Tenant may either rescind its request to
assign or sub-sublease this Sublease or else Tenant will be relieved of all
further obligations hereunder, or (ii) to permit Tenant to assign or sub-sublet
such space, subject to prior written approval of the proposed assignee by
Landlord, such consent not to be unreasonably withheld or delayed, so long as
the use of the Premises by the proposed assignee would be a permitted use and
the proposed assignee is of sound financial condition as determined by
Landlord. If Landlord should fail to notify Tenant in writing of such
election within said thirty (30) day period, Landlord shall have deemed to have
waived option (i) above, but written approval by Landlord of the proposed
assignee shall still be required. Failure by Landlord to approve a
proposed assignee shall not cause a termination of this Sublease. Any
rents or other consideration realized by Tenant under any such sub-sublease and
assignment in excess of the Rents hereunder, after amortization of the
reasonable costs of extra tenant improvements for which Tenant has paid and
reasonable sub-subletting and assignment costs, shall be divided and paid fifty
(50%) percent to Landlord and (50%) percent to Tenant.
Notwithstanding
the above, Tenant shall have the right to sub-sublease or assign all or any
portion of the Premises during the Term or any Option period to any related
entity, subsidiary, or affiliate of Tenant, having at least fifty-one (51%)
percent direct common ownership, without having to receive Landlord's consent,
but still requiring written notice to Landlord on or before such sub-sublease or
assignment has occurred.
No
assignment or subletting by Tenant shall relieve Tenant of any obligation under
this Sublease. Any assignment or subletting which conflicts with the
provisions hereof shall be void.
16. RULES.
Tenant
shall faithfully observe and comply with all Rules and Regulations attached as
Exhibit D and
those hereafter reasonably promulgated by Landlord, in writing and after
reasonable notice, during the Term or any Option period herein.
17. ENTRY
BY LANDLORD.
Landlord
may enter the Premises or Buildings at reasonable hours and upon at least 72
hours reasonable written notice to Tenant to (a) inspect the same, (b) show the
same to prospective purchasers, lenders or tenants, (c) determine whether Tenant
is complying with all of Tenant's obligations hereunder, (d) post notices of
non-responsibility or (e) make repairs required of Landlord under this Sublease,
repairs to adjoining space or utility service, or make repairs, alterations or
improvements to the Buildings, provided that all such work shall be done as
promptly as possible and with as little interference to Tenant as reasonably
possible. Tenant hereby waives any claim for damages for any
inconvenience to or interference with Tenant's business, any loss of occupancy
or quiet enjoyment of the Premises occasioned by such entry. Landlord
shall at all times have and retain a key to unlock all doors in, on or about the
Premises (excluding Tenant's vaults, safes and similar areas designated in
writing by Tenant). In the event of an emergency, Landlord shall have
the right to use any and all means which Landlord may deem proper to enter the
Premises, without notice, for the limited purpose of abating as quickly as
possible said emergency. Such emergency entrance shall not be
construed or deemed to be a forcible or unlawful entry into or a detainer of the
Premises or an eviction, actual or constructive, of Tenant from the Premises, or
any portion thereof.
18. EVENTS
OF DEFAULT.
The
occurrence of any one or more of the following events ("Events of Default") shall
constitute a breach of this Sublease by Tenant: (a) if Tenant fails to pay Rents
when and as the same becomes due and payable and such failure continues for more
than ten (10) days after written notice thereof, or (b) if Tenant fails to pay
any other sum when and as the same becomes due and payable and such failure
continues for more than ten (10) days after written notice thereof; or (c) if
Tenant fails to perform or observe any material term or condition of this
Sublease, such failure continues for more than thirty (30) days after written
notice from Landlord, and Tenant does not within such period begin with due
diligence and dispatch the curing of such default, or, having so begun,
thereafter fails or neglects to complete with due diligence and dispatch the
curing of such default; or (d) if Tenant shall make a general assignment for the
benefit of creditors, or shall admit in writing its inability to pay its debts
as they become due or shall file a petition in bankruptcy, or shall be
adjudicated as bankrupt or insolvent, or shall file a petition seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future statute, law or regulation, or
shall file any answer admitting or shall fail timely to contest the material
allegations of a petition filed against it in any such proceeding, or shall seek
or consent to or acquiesce in the appointment of any trustee, receiver or
liquidator of Tenant or any material part of its properties; or (e) if within
thirty (30) days after the commencement of any proceeding against Tenant seeking
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, such proceeding shall not have been dismissed, or if, within thirty
(30) days after the appointment without the consent or acquiescence of Tenant,
of any trustee, receiver or liquidator of Tenant or of any material part of its
properties, such appointment shall not have been vacated; or (f) vacation or
abandonment of the Premises for a continuous period in excess of fifteen (15)
days, or (g) if this Sublease shall be levied upon under any attachment or
execution due to Tenant’s actions and such attachment or execution is not
vacated within ten (10) days of receipt thereof by Tenant.
19. TERMINATION
UPON TENANT'S DEFAULT.
If an
Event of Default shall occur and not be cured in the time frame
referenced herein, Landlord at any time thereafter may give a written
termination notice to Tenant, and on the date specified in such notice (which
shall not be less than fifteen (15) days after service) Tenant's right to
possession shall terminate and this Sublease shall terminate, unless on or
before such date all Rents, arrearages and other sums due by Tenant under this
Sublease, including reasonable costs and attorneys' fees incurred by or on
behalf of Landlord, shall have been paid by Tenant and all other Events of
Default by Tenant shall have been fully cured to the satisfaction of
Landlord. Upon such termination, Landlord may recover from
Tenant:
(a) the
worth at the time of award of the unpaid Rents which had been earned at the time
of termination; plus
(b) the
worth at the time of award of the amount by which the unpaid Rents which would
have been earned after termination until the time of award exceeds the amount of
such Rents loss that Landlord proves could have been reasonably avoided;
plus
(c) the
worth at the time of award of the amount by which the unpaid Rents for the
balance of the term of this Sublease after the time of award exceeds the amount
of such Rents loss that Landlord proves could not be reasonably avoided; and
plus
(d) any
other amount reasonably necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under this
Sublease or which in the ordinary course of things would be likely to result
therefrom; and/or
(e) At
Landlord's elections, such other amounts in addition or in lieu of the foregoing
as may be permitted from time to time herein or by applicable law.
The
"worth at the time of award" of the amounts referred to in clauses (a) and (b)
above is computed by allowing interest at the rate of 7% per
annum. The "worth at the time of award" of the amount referred to in
clause (c) above means the monthly sum of the Rents under this
Sublease. Failure of Landlord to declare any default immediately upon
occurrence thereof, or delay in taking any action in connection therewith, shall
not waive such default, but Landlord shall have the right to declare any such
default at any time thereafter.
20. CONTINUATION
AFTER DEFAULT.
Even
though Tenant has breached this Sublease and abandoned the Premises, this
Sublease shall continue in effect as long as Landlord does not terminate
Tenant's right to possession, and Landlord may enforce all of its rights and
remedies under this Sublease, including the right to recover the Rents as they
become due under this Sublease. Acts of maintenance or preservation
or efforts to relet the Premises or the appointment of a receiver upon
initiative of Landlord to protect Landlord's interest under this Sublease shall
not constitute a termination of Tenant's right to possession. If any
fixture, equipment, improvement, installation or appurtenance shall be required
to be removed from the Premises and/or Buildings by Tenant, then Landlord (in
addition to all other rights and remedies) may, at its election by 10-day prior
written notice to Tenant, deem that the same has been abandoned by Tenant to
Landlord, or Landlord may remove and store the same and restore the Premises to
its original condition at the reasonable expense of Tenant, as Additional Rent
to be paid within ten (10) days after written notice to Tenant of such
expense.
21. LANDLORD'S
DEFAULT.
If
Landlord fails to perform or observe any of its material Sublease obligations
herein and such failure continues for thirty (30) days after written notice from
Tenant, or such additional time, if any, that is reasonably necessary to
promptly and diligently cure such failure after receiving written notice,
Landlord shall be in breach of this Sublease (a "Default"). If
Landlord commits a Default, Tenant’s Rents may be abated and Tenant may pursue
any remedies given in this Sublease or under law.
22. RIGHT
TO CURE TENANT’S DEFAULTS.
All terms
and provisions to be performed by Tenant under this Sublease shall be at
Tenant's sole cost and expense and without any abatement of Rents (except for
Landlord’s Default and failure to cure). If Tenant fails to pay any
sum of money, other than Rents, required hereunder or fails to perform any other
act required hereunder and such failure continues for thirty (30) days after
notice by Landlord, Landlord may, but shall not be obligated, and without
waiving or releasing Tenant from any obligations of Tenant, make any such
payment or perform any such act on Tenant's part to be made or performed as
provided in this Sublease. All sums paid by Landlord and all
incidental costs incurred by Landlord or the value of work performed by Landlord
shall be deemed Additional Rent hereunder and shall be payable within ten (10)
days of written notice of such sums paid.
23. ATTORNEYS'
FEES.
In the
event either party places at issue the enforcement or interpretation of this
Sublease, or any part thereof, or the collection of any Rents, or recovery of
the possession of the Premises, or files suit upon the same, then the prevailing
party shall be awarded its reasonable attorneys' fees and costs from the other
party.
24. EMINENT
DOMAIN.
If all or
any part of the Premises shall be taken or conveyed as a result of the exercise
of the power of eminent domain, this Sublease shall terminate as to the part so
taken as of the date of taking, and, in the case of a partial taking, either
Landlord or Tenant shall have the right to terminate this Sublease as to the
balance of the Premises by written notice to the other within thirty (30) days
after such date; provided, however, that a condition to the exercise by Tenant
of such right to terminate shall be that the portion of the Premises taken or
conveyed shall be of such extent and nature as to substantially handicap, impede
or impair Tenant's use of the balance of the Premises. In the event
of any taking, Landlord shall be entitled to any and all compensation, damages,
income, rent awards or any interest therein whatsoever which may be paid or made
in connection therewith, and Tenant shall have no claim against Landlord for the
value of any unexpired term of this Sublease or otherwise, provided that Tenant
shall be entitled to any and all compensation, damages, income, rent or awards
paid for or on account of Tenant's moving expenses, trade fixtures, equipment
and any leasehold improvements in the Premises, the cost of which was borne by
Tenant, to the extent of the then unamortized value of such improvements for the
remaining term of this Sublease. In the event of a taking of the
Premises which does not result in a termination of this Sublease, the monthly
rental herein shall be apportioned as of the date of such taking so that
thereafter the rent to be paid by Tenant shall be in the ratio that the area of
the Premises not so taken bears to the total area of the Premises prior to such
taking.
25. SUBORDINATION,
ATTORNMENT & NONDISTURBANCE; AND ESTOPPLE CERTIFICATE.
(a) This
Sublease and Tenant’s rights under this Sublease are subject and subordinate to
any first mortgage, first deed of trust or other first lien encumbrance or
indenture, together with any renewals, extensions, modifications,
consolidations, and replacements of them, which now or at any subsequent time
affect the Premises or any interest of Landlord in the Premises or Landlord’s
interest in this Sublease and the estate created by this Sublease (except to the
extent that (i) any such instrument expressly provides that this Sublease is
superior to it or (ii) the mortgagee under a mortgage or beneficiary or trustee
under a deed of trust subordinates the mortgage or deed of trust to this
Sublease by filing a notice of subordination with the Salt Lake County Recorder
at any time before a foreclosure sale is held pursuant to or in connection with
the mortgage or deed of trust, in which case the Tenant agrees to attorn to the
holder (herein the "Holder" of the first mortgage,
first deed of trust or first lien encumbrance)). This provision will be
self-operative and no further instrument of subordination will be required in
order to effect it. Nevertheless, Tenant will execute, acknowledge
and deliver to Landlord, at any time and from time to time, upon demand by
Landlord, such documents as may be requested by Landlord or any mortgagee, or
any holder of a deed of trust or other instrument described in this paragraph,
to confirm or effect any such subordination. Tenant shall be
authorized and hereby agrees to pay Rent and any and all other amounts due under
this Sublease to the Holder upon notice from the Holder that the Landlord’s
license or other authority to collect the Rents has been revoked.
(b) If
the interest of Landlord shall be acquired by Mortgagee (the term "Mortgagee" as used in this
Section 25
shall include any purchaser at a foreclosure sale occurring as a result of the
first mortgage, first deed of trust or other first lien encumbrance or
indenture), Tenant will pay to it all Rents and other sums subsequently payable
under this Sublease. Tenant will, upon request of any one so
succeeding to the interest of Landlord, automatically become the Tenant of, and
attorn to, such Mortgagee without change in this Sublease. Such
Mortgagee will not be:
26. Bound
by any payment of rent for more than one month in advance, or
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(i)
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Bound
by any amendment or modification of this Sublease made without its written
consent, or
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(ii)
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Obligated
to cure existing defaults, other than defaults of a continuing nature of
which Mortgagee received notice, and in response to which Tenant afforded
Mortgagee a reasonable cure period following such
notice;
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(iii)
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Obligated
to Tenant under any provision of this Sublease unless and until Tenant
shall provide Mortgagee with notice of Mortgagee's default and a
reasonable opportunity to cure the default before exercising any right to
terminate this Sublease.
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Any
notice delivered to the Tenant by Mortgagee shall be valid if delivered to the
premises demised by this Sublease.
Upon
request by Mortgagee and without cost to Landlord or Mortgagee, Tenant will
execute, acknowledge, and deliver an instrument or instruments confirming the
attornment. The instrument of attornment will also provide that
Mortgagee will not disturb Tenant in its quiet enjoyment of the Premises, the
Parking Lot and the Common Areas in accordance with this Sublease. If
Tenant fails or refuses to execute, acknowledge, and deliver any such instrument
within ten (10) days after written demand, Mortgagee will be entitled to
execute, acknowledge, and deliver any such document in behalf of Tenant as
Tenant’s attorney-in-fact. Tenant constitutes and irrevocably
appoints Mortgagee as Tenant’s attorney-in-fact to execute, acknowledge and
deliver on behalf of Tenant any document described in this paragraph of Section
26.
27. NO
MERGER.
The
voluntary or other surrender of this Sublease by Tenant, or a mutual
cancellation thereof, shall not work a merger, and shall, at the option of
Landlord terminate all or any existing sub-subleases or sub-subtenancies, or
may, at the option of Landlord, operate as an assignment to it of any or all
such sub-subleases or sub-subtenancies.
28. SALE.
In the
event the original Landlord hereunder, or any successor owner of the Premises,
Buildings, and Common Area shall sell or convey the Premises, Buildings, and
Common Areas, and the purchaser assumes the obligations of Landlord under this
Sublease, all liabilities and obligation on the part of the original Landlord,
or such successor owner, under this Sublease accruing after such Sale shall
terminate, and thereupon all such liabilities and obligations shall be binding
upon the new owner; provided Landlord’s successor expressly acknowledges to
Tenant its receipt of Tenant’s Security Deposit in full. Tenant
agrees to attorn to such new owner.
29. NO
LIGHT OR VIEW EASEMENT.
Any
diminution or shutting off of light or view by any structure erected on lands
adjacent to the Buildings shall in no way affect this Sublease or impose any
liability on Landlord.
30. HOLDING
OVER.
If,
without objection by Landlord, Tenant holds possession of the Premises after
expiration of the Term or any Option period of this Sublease, Tenant shall
become a tenant from month to month upon the terms herein specified, but at a
monthly Base Rent equivalent to 150% of the Base Rent at the end of the term or
extension period pursuant to Section 4, payable in
advance on or before the first day of each month. All Additional Rent
shall also apply. Each party shall give the other notice at least one
month prior to the date of termination of such monthly tenancy of its intention
to terminate such tenancy.
31. ABANDONMENT.
If Tenant
shall abandon or surrender the Premises, or be dispossessed by process of law or
otherwise, any personal property belonging to Tenant and left on the Premises
shall be deemed to be abandoned, at the option of Landlord, except such property
as may be mortgaged to Landlord.
32. SECURITY
DEPOSIT.
(a) Deposit. Tenant
has deposited with Landlord the Security Deposit in the amount set as security
for the faithful performance by Tenant of all of the terms, covenants and
conditions required to be performed by Tenant hereunder. The Security
Deposit shall be returned to Tenant (or, at Landlord's option, to the last
assignee of Tenant's interest hereunder) after the expiration of this Agreement
and delivery of possession of the Premises to Landlord if, at such time, Tenant
has performed fully and faithfully all of the terms, covenants and conditions
hereof. In the event of termination of Landlord's interest in this
Agreement, Landlord shall transfer or credit the Security Deposit to Landlord's
successor in interest, and Landlord shall thereupon be released from any
liability for the return of the Security Deposit or the accounting therefore,
provided the successor in interest expressly acknowledges receipt of the
Security Deposit in full less any reductions made due to Tenant’s uncured
defaults. Prior to the time when Tenant is entitled to any return of
the Security Deposit, Landlord may intermingle the Security Deposit with its own
funds and use the Security Deposit for such purposes as Landlord may
determine. Tenant shall not be entitled to any interest on the
Security Deposit.
(b) Default. If
an Event of Default shall occur and not be cured in the time frame referenced
herein, Landlord may use, apply or retain all or any part of the Security
Deposit for the payment of any monetary obligation due hereunder or to
compensate Landlord for any other reasonable expense or cost which Landlord may
expend, or any loss or damage which Landlord may suffer, by reason of Tenant's
default under the terms hereof, including any damages or deficiency in the
reletting of the Premises. If any portion of the Security Deposit is
so used or applied, regardless of whether such use or application is before or
after Tenant has ceased to occupy the Premises, Tenant shall, within five (5)
days after written demand therefor, deposit with Landlord cash in an amount
sufficient to restore the Security Deposit to its original amount.
33. WAIVER.
All
waivers by either party herein must be in writing and signed by such
party. The waiver of any term or conditions herein shall not be
deemed to be a waiver of any subsequent breach of the same or any other
agreement, condition or provision herein contained, nor shall any custom,
practice or course of conduct between the parties be construed to waive or to
lessen the right of either party to insist upon the performance by the other
party in strict accordance with said terms. The subsequent acceptance
of Rents hereunder by Landlord shall not be deemed to be a waiver of any breach
by Tenant of any term or condition of this Sublease, regardless of Landlord's
knowledge of such breach at the time of acceptance of such Rents.
34. NOTICES.
All
notices and demands which may or are required to be given by either party to the
other under this Sublease shall be in writing and shall be deemed to have been
fully given upon the earlier of (a) receipt, or (b) three (3) days after being
deposited in the U.S. Mail or delivered to a reputable, nationally recognized
overnight courier/delivery service, for overnight delivery, addressed as
follows:
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To
Tenant:
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Xxxxx
& Xxxxxxxxxx Computer Corporation
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000
Xxxxx Xxxxx
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Xxxx
Xxxx Xxxx, Xxxx 00000
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To
Landlord:
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Wasatch
Research Park I, LLC
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000
Xxxxxxxxx Xxxxxxx, Xxx 000
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Xxxxx,
XX 00000
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With
a copy to:
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Wasatch
Commercial Property Mgmt.
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000
X. 000 X., Xxx 000
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Xxxx
Xxxx Xxxx, XX 00000
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A party
may designate another place for notice, in place of those listed above, upon
notice to the other party in the manner set forth in this Section.
35.
END OF TERM.
At the
end of this Sublease, Tenant will promptly quit and surrender the Premises
broom-clean, in good order and repair, ordinary wear and tear
excepted. If Tenant is not then in default, Tenant may remove from
the Premises any trade fixtures, equipment and movable furniture placed in the
premises by Tenant, whether or not such trade fixtures or equipment are fastened
to the Buildings; Tenant will not remove any trade fixtures or equipment without
Landlord’s written consent if such fixtures or equipment are used in the
operation of the Buildings or improvements or the removal of such fixtures or
equipment will result in impairing the structural strength of the Buildings or
improvements. Whether or not Tenant is in default, Tenant will remove
such alterations, additions, improvements, trade fixtures, equipment and
furniture as Landlord has requested in accordance with Section
7. Tenant will fully repair any damage occasioned by the
removal of any trade fixtures, equipment, furniture, alterations, additions and
improvements. All trade fixtures, equipment, furniture, inventory,
effects, alterations, additions and improvements not so removed will be deemed
conclusively to have been abandoned and may be appropriated, sold, stored,
destroyed or otherwise disposed of by Landlord without notice to Tenant or any
other person and without obligation to account for them; and Tenant will pay
Landlord for all expenses incurred in connection with such property, including,
but not limited to, the cost of repairing any damage to the Buildings or
premises caused by the removal of such property. Tenant’s obligation
to observe and perform this covenant will survive the expiration or other
termination of this Sublease.
36. COMPLETE
AGREEMENT.
There are
no oral agreements between Landlord and Tenant affecting this Sublease, and this
Sublease supersedes and cancels any and all previous negotiations, arrangements,
brochures, agreements and understandings, if any, between Landlord and Tenant
with respect to the subject matter of this Sublease. This Sublease
may not be altered, changed or amended, except by an instrument in writing
signed by both parties hereto.
37. AUTHORITY.
The
person(s) executing this Sublease on behalf of the parties herein hereby
covenants and warrants that (a) such party is a duly authorized and validly
existing entity under the laws of the State in which it was formed, (b) such
party has and is qualified to do business in Utah, (c) such entity has full
right and authority to enter into this Sublease, and (d) each person executing
this Sublease on behalf of such entity is authorized to do so.
38. FAILURE
TO OCCUPY.
Any
failure to occupy the Premises does not release the Tenant from the obligation
of paying Rents or any other terms set forth herein.
39. MISCELLANEOUS.
(a) The
words "Landlord" and "Tenant" as used herein shall include the plural as well as
the singular. If there be more than one Tenant, the obligations
hereunder imposed upon Tenant shall be joint and several.
(b) Time
is of the essence in this Sublease and each and all of its terms and
conditions.
(c) The
terms and conditions, benefits and burdens of this Sublease shall inure to the
benefit of and be binding upon the heirs, executors, administrators, successors
and assigns of the parties hereto.
(d) The
captions of this Sublease are solely to assist the parties and are not a part of
the terms or conditions of this Sublease.
(e) This
Sublease shall be governed by and construed in accordance with the laws of the
State of Utah, and is deemed to be executed within the State of
Utah.
(f) In
the event that Landlord shall be delayed or hindered in or prevented from the
performance of any act required hereunder by reason of strikes, lockouts, labor
troubles, inability to procure materials, failure of power, restrictive
governmental laws or regulations, riots, insurrection, war, or other reason of a
like nature not the fault of the Landlord, then performance of such act shall be
excused for the period of the delay and the period for the performance of any
such act shall be extended for a reasonable period related to the duration of
such delay.
(g) This
Sublease is the result of negotiations between Landlord and Tenant and their
attorneys. Consequently, Landlord or its attorney is the preparer of
some provisions, while Tenant or its attorney is the preparer of other
provisions. The parties agree that this Sublease is not to be
construed against either party as the preparer.
40. SEVERABILITY.
If any
term or provision of this Sublease, or the application thereof to any person or
circumstance, shall to any extent be invalid or unenforceable, the remainder of
this Sublease, or the application of such provision to persons or circumstances
other than those as to which it is invalid or unenforceable, shall not be
affected thereby, and each provision of this Sublease shall be valid and shall
be enforceable to the extent permitted by law.
41.
BROKERS.
Landlord
and Tenant represent and warrant that there are no claims for brokerage
commissions or finder's fees in connection with this Sublease and agree to
indemnify each other against and hold each other harmless from all liabilities
arising from such claim, including any attorney's fees connected
therewith.
[SIGNATURES
APPEAR ON THE FOLLOWING PAGE]
IN
WITNESS WHEREOF, the parties have executed this Sublease dated the day and year
first above written.
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STATE
OF UTAH
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)
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:
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COUNTY
OF Salt Lake
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)
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The
foregoing Sublease Agreement was acknowledged before me this 13th day of
November, 2009, by Xxxx Xxxxxxxxxxxx, the Manager of Wasatch Research Park I,
LLC, for and on behalf of Wasatch Research Park I, LLC.
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/s/ Xxxxx X. Xxxxx
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STATE
OF Utah
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)
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NOTARY
PUBLIC
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:
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COUNTY
of Salt Lake
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)
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The
foregoing Sublease Agreement was acknowledged before me this 13th day of
November, 2009, by Xxxxx X. Xxxxxxx, the President of Xxxxx & Xxxxxxxxxx
Computer Corporation, for and on behalf of Xxxxx & Xxxxxxxxxx Computer
Corporation.
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/s/ Xxxxx X. Xxxxx
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NOTARY
PUBLIC
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