Exhibit 10.6
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LEASE EXTENSION AGREEMENT
AND CONTRACT TO PURCHASE
THIS AGREEMENT, made and entered into on this 1st day of November ,
2002, by and between Alcoh Development, Inc., a Utah corporation, Xxxx X. Xxxxx,
Xxxxxx X. Xxxxx and Reelman Investments, L.C., a Utah limited liability company
(all hereinafter referred to as "Lessor") and BSD Medical, Inc., a Delaware
corporation (hereinafter referred to as "Lessee").
RECITALS:
A. The parties have entered into a Lease Agreement with respect to the
property located at 0000 Xxxx 0000 Xxxxx, Xxxx Xxxxxx Xxxx, Xxxx (the
"Lease").
B. The Lease expires on December 1, 2002.
C. The parties wish to extend the Lease for a term of five years
("Extension Period") in accordance with the terms and conditions set
forth herein.
NOW, THEREFORE, the parties agree and contract as follows:
1. The rent for each month of the Extension Period shall be as follows:
Year 1 of Extension Period: December 1, 2002 to November 30,
2003, the monthly rent shall be
$6,859.65.
Year 2 of Extension Period: December 1, 2003 to November 30,
2004, the monthly rent for the
first year of the Extension Period
plus the Cost of Living Increase.
Year 3 of Extension Period: December 1, 2004 to November 30,
2005, the monthly rent for the
second year of the Extension Period
plus the Cost of Living Increase.
Year 4 of Extension Period: December 1, 2005 to November 30,
2006, the monthly rent for the
third year of the Extension Period
plus the Cost of Living Increase.
Year 5 of Extension Period: December 1, 2006 to November 30,
2007, the monthly rent for the
fourth year of the Extension Period
plus the Cost of Living Increase.
2. The terms of the Lease shall remain the same, other than paragraph 43,
"Option to Purchase" which is as follows: The option to purchase the
subject property may be exercised only in the event that the Lease is
in full force and effect on the date of exercise and Lessee is in
occupancy of the building, and Lessee is not in default (including any
applicable cure or grace period).
a. The option shall be exercised by giving 60 days prior written
notice to the month in which the sale shall close.
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b. (1) If the option is exercised to be closed on the first day of
the 72nd month of this Lease, the option price shall be
$1,000,000.00.
(2) If the option is exercised to be closed on the first day of
the 84th month of this Lease, the option price shall be
$1,050,000.00.
(3) If the option is exercised to be closed on the first day of
the 96th month of this Lease, the option price shall be
$1,100,000.00.
(4) If the option is exercised to be closed on the first day of
the 108th month of this Lease, the option price shall be
$1,150,000.00.
(5) If the option is exercised to be closed on the first day of
the 120th month of this Lease, the option price shall be
$1,200,000.00.
If the option is exercised with the sale of the property to be closed
in between any of the dates set forth above the option price shall be a
prorated price between the amount stated for any dates in between. For
example, if the closing is to take place on the first day of the 78th
month, the price would be $1,025,000.00.
c. The option shall be paid in cash. The option expires at the end of
the 120th month.
d. At the time of the exercise of the option, Lessor will provide a
standard owners policy of title insurance to Lessee. All other
closing costs shall be split equally between Lessor and Lessee.
Conveyance shall be by Special Warranty Deed.
e. The sale shall be without warranty of any sort. Lessee to accept
the premises "As Is."
3. The Cost of Living Increase calculation is set forth on Exhibit B.
In witness whereof, the parties hereto have signed their names on the
day and year first written above.
LESSEE BSD Medical, Inc.
By: /s/ Yourdkfdjkkj Its: President
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LESSOR
Alcoh Development, Inc., a Utah corp.
By: Its: Pres.
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Xxxxxx X. Xxxxx:
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Xxxx X. Xxxxx:
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Reelman Investments, L.C., a Utah limited liability company
By: Its: Manager
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EXHIBIT B
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COST OF LIVING INCREASE
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a. The rent for the period from December 1, 2003 to November 30, 2004
year shall be based upon a formula to reflect increases in the cost of living
from the first year of the Extension Period of the lease, i.e. December 1, 2002
to November 30, 2002. In computing the increase in rent, the index used shall be
the Consumer Price Index for Urban Consumers - U.S. City Average - All Items -
CPI-U - A (1982-1984 = 100), hereinafter called the Index, published by the
Bureau of Labor Statistics of the United States Department of Labor. There shall
be no reduction in rent in the event that the cost of living index decreases.
b. The Index number indicated in the column "Avg." (average) or, if
that column is not published, the average of the months from December 2001
through November 2002, shall be the Base Index Number and the corresponding
Index number for the months for December 2002 through November 2003, shall be
the Current Index Number.
c. The Current Index Number shall be divided by the Base Index Number.
From the quotient thereof, there shall be subtracted the integer 1, and any
resulting positive number shall be deemed to be the percentage of increase in
the cost of living.
d. The rent increase for each month of Year 2 of the Extension Period
shall be computed by multiplying the rent for Year 1 ($5,914.65) by the
percentage increase. The rent for each month of Year 3 of the Extension period
shall be computed by multiplying the rent for Year 2 by the Cost of Living
Increase, using Year 1 as the Base Index Number and Year 2 as the Current Index
Number. The subsequent years shall be computed accordingly. In calculating the
Cost of Living Increase for Year 4, the Index number for Year 2 shall be the
Base Index Number and that for Year 3 the Current Index Number. In calculating
the Cost of Living Increase for Year 5, the Index number for Year 3 shall be the
Base Index Number and that for Year 4 shall be the Current Index Number.
e. The Lessor shall, within a reasonable time after obtaining the
appropriate date necessary for computing such increase, give the Lessee notice
of any increase so determined. Payment of the increase shall be made monthly as
indicated above. Payment of the increase in rent for the period prior to
Lessor's computations of the increase shall be paid within thirty (30) days
after Lessor notifies Lessee of the amount of the cost of living increase.
f. If publication of the Consumer Price Index shall be discontinued,
the parties hereto shall thereafter accept comparable statistics on the cost of
living as they shall be computed and published by an agency of the United States
Government or by a responsible financial periodical of recognized authority then
to be selected by the parties hereto, or if the parties cannot agree upon a
selection, by arbitration. In the event of either (a) use of comparable
statistics in place of the Consumer Price Index as above mentioned. Or (b)
publication of the Index figure at other than monthly intervals, there shall be
made in the method of computation herein provided such revisions as the
circumstances may require to carry out the intent of this paragraph.
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