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INDEX TO LEASE AGREEMENT: PARADIGM RESOURCES, L.C. INDEX TO LEASE AGREEMENT: PARADIGM RESOURCES, L.C. SALT LAKE CITY, UTAH

Lease Agreement

INDEX TO LEASE AGREEMENT: PARADIGM RESOURCES, L.C. INDEX TO LEASE AGREEMENT: PARADIGM RESOURCES, L.C. SALT LAKE CITY, UTAH | Document Parties: AMEDICA CORPORATION | PARADIGM RESOURCES, LC You are currently viewing:
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AMEDICA CORPORATION | PARADIGM RESOURCES, LC

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Title: INDEX TO LEASE AGREEMENT: PARADIGM RESOURCES, L.C. INDEX TO LEASE AGREEMENT: PARADIGM RESOURCES, L.C. SALT LAKE CITY, UTAH
Date: 5/22/2007

INDEX TO LEASE AGREEMENT: PARADIGM RESOURCES, L.C. INDEX TO LEASE AGREEMENT: PARADIGM RESOURCES, L.C. SALT LAKE CITY, UTAH, Parties: amedica corporation , paradigm resources  lc
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Exhibit 10.21

LEASE

by and between

PARADIGM RESOURCES, L.C.

a Utah limited liability company

as Landlord

and

AMEDICA CORPORATION

as Tenant

615 ARAPEEN DRIVE

SALT LAKE CITY, UTAH

 


INDEX TO LEASE AGREEMENT: PARADIGM RESOURCES, L.C.

SALT LAKE CITY, UTAH

 

ARTICLE I. BASIC LEASE PROVISIONS; ENUMERATION OF EXHIBITS

   5
   SECTION 1.01   BASIC LEASE PROVISIONS    5
   SECTION 1.02   SIGNIFICANCE OF BASIC LEASE PROVISIONS    8
   SECTION 1.03   ENUMERATION OF EXHIBITS    8

ARTICLE II. GRANT AND PREMISES

   8
   SECTION 2.01   PREMISES    8

ARTICLE III. RENT

   9
   SECTION 3.01   BASE MONTHLY RENT    9
   SECTION 3.02   ESCALATION    9
   SECTION 3.03   TENANT’S SHARE OF LANDLORD’S EXPENSES.    9
   SECTION 3.04   REPORT OF COSTS AND STATEMENT OF ESTIMATED COSTS.    10
   SECTION 3.05   PAYMENT OF ADDITIONAL RENT    11
   SECTION 3.06   TAXES.    11
   SECTION 3.07   PAYMENTS    11

ARTICLE IV. RENTAL TERM, COMMENCEMENT DATE & PRELIMINARY TERM

   12
   SECTION 4.01   RENTAL TERM    12
   SECTION 4.02   RENTAL COMMENCEMENT DATE    12
   SECTION 4.03   PRELIMINARY TERM    12

ARTICLE V. CONSTRUCTION OF PREMISES

   12
   SECTION 5.01   CONSTRUCTION BY LANDLORD    12
   SECTION 5.02   CHANGES AND ADDITIONS BY LANDLORD    12
   SECTION 5.03   DELIVERY OF POSSESSION    13

ARTICLE VI. TENANT’S WORK & LANDLORD’S CONTRIBUTION

   13
   SECTION 6.01   TENANT’S WORK    13
   SECTION 6.02   LANDLORD CONTRIBUTION TO TENANT’S WORK    13

ARTICLE VII. USE

   13
   SECTION 7.01   USE OF PREMISES    13
   SECTION 7.02   HAZARDOUS SUBSTANCES    14

ARTICLE VIII. OPERATION AND MAINTENANCE OF COMMON AREAS

   15
   SECTION 8.01   CONSTRUCTION AND CONTROL OF COMMON AREAS    15
   SECTION 8.02   LICENSE    15

ARTICLE IX. ALTERATIONS, SIGNS, LOCKS & KEYS

   16
   SECTION 9.01   ALTERATIONS    16
   SECTION 9.02   SIGNS    16
   SECTION 9.03   LOCKS AND KEYS    16

 

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ARTICLE X. MAINTENANCE AND REPAIRS; ALTERATIONS; ACCESS

   16
   SECTION 10.01   LANDLORD’S OBLIGATION FOR MAINTENANCE    16
   SECTION 10.02   TENANT’S OBLIGATION FOR MAINTENANCE    17
   SECTION 10.03   SURRENDER AND RIGHTS UPON TERMINATION    17

ARTICLE XI. INSURANCE AND INDEMNITY

   17
   SECTION 11.01   LIABILITY INSURANCE AND INDEMNITY    17
   SECTION 11.02   FIRE AND CASUALTY INSURANCE    18
   SECTION 11.03   WAIVER OF SUBROGATION    19
ARTICLE XII. UTILITY CHARGES    19
   SECTION 12.01   OBLIGATION OF LANDLORD    19
   SECTION 12.02   OBLIGATIONS OF TENANT    19
   SECTION 12.03   LIMITATIONS ON LANDLORDS LIABILITY    20

ARTICLE XIII. OFF-SET STATEMENT, ATTORNMENT AND SUBORDINATION

   21
   SECTION 13.01   OFF-SET STATEMENT    21
   SECTION 13.02   ATTORNMENT    21
   SECTION 13.03   SUBORDINATION    21
   SECTION 13.04   MORTGAGEE SUBORDINATION    21
   SECTION 13.05   REMEDIES    21

ARTICLE XIV. ASSIGNMENT

   21
   SECTION 14.01   ASSIGNMENT    21
ARTICLE XV. WASTE OR NUISANCE    21
   SECTION 15.01   WASTE OR NUISANCE    21
ARTICLE XVI. NOTICES    22
   SECTION 16.01   NOTICES    22

ARTICLE XVII. DESTRUCTION OF THE PREMISES

   22
   SECTION 17.01   DESTRUCTION    22
ARTICLE XVIII. CONDEMNATION    23
   SECTION 18.01   CONDEMNATION    23

ARTICLE XIX. DEFAULT OF TENANT

   23
   SECTION 19.01   DEFAULT - RIGHT TO RE-ENTER    23
   SECTION 19.02   DEFAULT - RIGHT TO RE-LET    24
   SECTION 19.03   LEGAL EXPENSES    24

ARTICLE XX. BANKRUPTCY, INSOLVENCY, OR RECEIVERSHIP

   24
   SECTION 20.01   ACT OF INSOLVENCY, GUARDIANSHIP, ETC    24
ARTICLE XXI. LANDLORD ACCESS    25
   SECTION 21.01   LANDLORD ACCESS    25

 

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ARTICLE XXII. LANDLORD’S LIEN

   25
   SECTION 22.01    LANDLORD’S LIEN    25
ARTICLE XXIII. HOLDING OVER    25
   SECTION 23.01    HOLDING OVER    25
   SECTION 23.02    SUCCESSORS    25

ARTICLE XXIV. RULES AND REGULATIONS

   26
   SECTION 24.01    RULES AND REGULATIONS    26
ARTICLE XXV. QUIET ENJOYMENT    26
   SECTION 25.01    QUIET ENJOYMENT    26

ARTICLE XXVI. SECURITY DEPOSIT

   26
   SECTION 26.01    SECURITY DEPOSIT    26

ARTICLE XXVII. MISCELLANEOUS PROVISIONS

   26
   SECTION 27.01    WAIVER    26
   SECTION 27.02    ENTIRE AGREEMENT    27
   SECTION 27.03    FORCE MAJEURE    27
   SECTION 27.04    LOSS AND DAMAGE    27
   SECTION 27.05    ACCORD AND SATISFACTION    27
   SECTION 27.06    NO OPTION    27
   SECTION 27.07    ANTI-DISCRIMINATION    27
   SECTION 27.08    SEVERABILITY    27
   SECTION 27.09    OTHER MISCELLANEOUS PROVISIONS    28
   SECTION 27.10    REPRESENTATION REGARDING AUTHORITY    28
   SECTION 28.01    RIGHT OF FIRST REFUSAL    28

SIGNATURES

   29

LANDLORD ACKNOWLEDGEMENT

   29

TENANT ACKNOWLEDGEMENT

   30

 

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LEASE AGREEMENT

ARTICLE I. BASIC LEASE PROVISIONS; ENUMERATION OF EXHIBITS

SECTION 1.01 BASIC LEASE PROVISIONS

 

(A) DATE: March      , 2004

 

(B) LANDLORD; PARADIGM RESOURCES, L.C., a Utah limited liability company

 

(C) ADDRESS OF LANDLORD FOR NOTICES (Section 16.01): 2733 East Parleys Way, Suite 300, Salt Lake City, UT 84109.

 

(D) TENANT: Amedica Corporation, a Delaware “C” corporation (EIN: 841375299)

 

(E) ADDRESS OF TENANT FOR NOTICES (Section 16.01); 2116 South Lakeline Drive, Salt Lake City, Utah 84109

 

(F) PERMITTED USES (Section 7.01): Amedica is a development stage company of medical implants, focused in orthopedics with patented technologies for materials and processes that will set the standard for the industry.

 

(G) TENANT’S TRADE NAME (Exhibit “D” - Sign Criteria): Amedica Corp.

 

(H) BUILDING (Section 2.01): Situated at 615 Arapeen Drive, in the City of Salt Lake, County of Salt Lake, State of Utah.

 

(I) PREMISES (Section 2.01): That portion of the building at the approximate location outlined on Exhibit “A” known as Suite 302 consisting of approximately 5,197 square feet of gross rentable area. Approximately 16.5288% of such area is Tenant’s proportionate share of common area hallways, restrooms, etc. in the building.

 

(J) DELIVERY OF POSSESSION (Section 5.03): On or about April 1, 2004. Preliminary Term begins on Delivery of Possession (Section 4.03). Tenant may choose to occupy portions of the Leased Premises during remodeling.

 

(K) RENTAL TERM, COMMENCEMENT AND EXPIRATION DATE (Sections 4.01 & 4.02): The Rental Term shall commence on the earlier of (a)  May 1, 2004 or (b) opening of Tenant for business at the Premises, and shall be for a period of five (5)  full Lease Years ending April 30, 2009 .

 

(L) BASE MONTHLY RENT (Section 3.01): Eight Thousand Five Hundred Fifty-Three and 40/100 Dollars ( $8,553.40 ).

 

(M) ESCALATIONS IN BASE MONTHLY RENT (Section 3.02): $8,810.00 monthly, commencing May 1, 2005 ; $9,074.00 monthly, commencing May 1, 2006 ; $ 9,347.00 monthly, commencing May 1, 2007 ; $ 9,626.93 monthly, commencing May 1, 2008 .

 

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(N) LANDLORD’S SHARE OF OPERATING EXPENSES (Section 3.03): The Base Monthly Rent shall be absolutely net to the Landlord as provided in Section 3.03.

 

(O) TENANT’S PRO RATA SHARE OF OPERATING EXPENSES (Section 3.03): Tenant shall be responsible for all operating expenses as defined in Section 3.03. Tenant’s proportionate of Basic Costs shall be 5.70% . Said operating expenses include Basic Costs, Direct Costs, and Metered Costs as defined in Section 3.03 and are currently estimated to be $ 5.50 per square foot or $ 2,381.95 monthly.

 

(P) UTILITIES AND SERVICES. Subject to the provisions of Section 3.03, 12.01 and 12.02, this Lease provides that the utilities and services shall be paid or reimbursed by Tenant

 

(Q) LANDLORD’S CONTRIBUTION TO TENANT’S WORK (Section 6.02): $8.00 per square foot or $41,576.00 .

 

(R) PREPAID RENT: Eight Thousand Five Hundred Fifty-Three and 40/100 Dollars ($ 8,553.40 ) paid upon execution of this Lease to be applied to the first installment(s) of Base Monthly Rent due hereunder.

 

(S) EXCESS HOUR UTILITY CHARGES AND HOURS OF OPERATION (Section 12.02): Standard operating hours for the Building shall be 7:00 a.m. to 6:00 p.m. Monday through Friday and 8:00 .a.m. to 1:00 p.m. on Saturday, excluding holidays. To the extent Tenant operates during any time in excess of those specified above, Tenant shall pay an extra hourly utility charge of $0.20 per hour per 1,000 square feet for lighting and electricity and $3.00 per hour per 1,000 square feet for mechanical/HVAC system for each full or partial hour during which Tenant operates.

 

(T) ADJUSTMENTS BASED ON FINAL AREA DETERMINATION: Upon final completion, the Building shall be measured and the actual rentable area of the Premises determined in accordance with standards of Section 2.01. The sums set forth in Sections 1.01(L), (M), (O), (P) and (U) shall then be proportionately adjusted to reflect the actual area of the Premises.

 

(U) SECURITY DEPOSIT (Section 26.01): Fifty-Four Thousand and 00/100 Dollars ($ 54,000.00 )

 

(V) GUARANTOR’S: Not Applicable.

 

(W) GUARANTOR’S ADDRESS: Not Applicable.

 

(X) LEASE OF PERSONAL PROPERTY AND EQUIPMENT: Landlord is leasing to Tenant certain items of personal property and equipment (hereinafter “Equipment”), more particularly described on Exhibit “E” attached hereto and by

 

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this reference incorporated herein. The lease of the personal property and equipment by Landlord to Tenant shall be coterminous with that of this Lease as a whole, and Tenant shall return the Equipment when this Lease expires or terminates to Landlord in the condition that equipment is in on the Possession Date, reasonable wear and tear accepted.

 

(Y) FIRST RIGHT TO LEASE (Section 28.01): Tenant shall have the first right to lease any additional contiguous space on the third floor of the building in accordance with the terms and conditions set forth in Section 28.01 herein. Landlord shall give Tenant written notice of its intent to lease other contiguous space on said third floor, together with the lease terms therefor, and thereafter Tenant shall have five (5) business days after receipt of such notice to elect in writing whether or not to lease the additional space on the terms stated in Landlord’s notice. Failure of Tenant to give written notice accepting or rejecting Landlord’s proposal as set forth above shall be deemed a waiver by Tenant of its first right to lease.

If Tenant does not elect to lease the additional space and Landlord fails to enter into a lease with another tenant within one hundred twenty (120) days from the date of said Landlord notice, then Tenant shall have a reinstated first right to lease the subject space in accordance with the above process.

 

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SECTION 1.02 SIGNIFICANCE OF A BASIC LEASE PROVISION . The foregoing provisions of Section 1.01 summarize for convenience only certain fundamental terms of the Lease delineated more fully in the Articles and Sections referenced therein. In the event of a conflict between the provisions of Section 1.01 and the balance of the Lease, the latter shall control.

SECTION 1.03 ENUMERATION OF EXHIBITS . The exhibits enumerated in this Section and attached to this Lease are incorporated in the Lease by this reference and are to be construed as a part of the Lease.

EXHIBIT “A” - LEASING PLAN SHOWING THE PREMISES

EXHIBIT “B” - LEGAL DESCRIPTION(S)

EXHIBIT “C” - LANDLORD’S WORK

EXHIBIT “D” - TENANT’S WORK

EXHIBIT “E” - PERSONAL PROPERTY AND EQUIPMENT

ARTICLE II. GRANT AND PREMISES

SECTION 2.01 PREMISES . Landlord has heretofore obtained a long-term ground lease covering that certain tract of real property situated in the University of Utah Research Park in Salt Lake City, State of Utah, more particularly described in Exhibit “B” attached hereto, together with certain easement for access rights. (Said tract is hereinafter referred to as the “Property”).

Landlord owns a building on the Property referred to in Section 1.01 (H) (hereinafter the “Building”) suitable for use as office/research and development space, together with related parking facilities and other improvements necessary to enable to the Building to be so used (the Building and related facilities and improvements are hereinafter collectively referred to as the “Improvements).

In consideration for the rent to be paid and covenants to be performed by Tenant, Landlord hereby leases to Tenant, and Tenant leases from Landlord for the Term and upon the terms and conditions herein set forth premises described in Section 1.01(1) (hereinafter referred to as the “Premises” or “Leased Premises”), located in the Building. Gross rentable area measurements herein specified are from the exterior of the perimeter walls of the building to the center of the interior walls. In addition, the factor set forth in Section 1.01(1) has been added to the area as measured above to adjust for Tenant’s proportionate share of common hallways, restrooms, elevators, stairways, etc. in the building.

The exterior walls and roof of the Premises and the areas beneath said Premises are not demised hereunder, and the use thereof together with the right to install, maintain, use, repair, and replace pipes, ducts, conduits, and wires leading through the Premises in locations which will not materially interfere with Tenant’s use thereof and serving other parts of the building or buildings are hereby reserved to Landlord. Landlord reserves (a) such access rights through the Premises as may be reasonably necessary to enable access by Landlord to the balance of the building and reserved areas and elements as set forth above; and (b) the right to install or maintain meters on the Premises to monitor use of utilities. In exercising such rights, Landlord

 

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will use reasonable efforts so as to not commit waste upon the Premises and as far as practicable to minimize annoyance, interference or damage to Tenant when making modifications, additions or repairs.

Subject to the provisions of Article VIII and Section 27.11, Tenant and its customers, agents and invitees have the right to the non-exclusive use, in common with others of such unreserved automobile parking spaces, driveways, footways, and other facilities designated for common use within the Building, except that with respect to non-exclusive areas, Tenant shall cause its employees to park their cars only in areas specifically designated from time to time by Landlord for that purpose. Landlord shall have the right to designate, in its sole business judgment, certain spaces as “customer” parking spaces and Tenant shall use its best efforts to cause its employees not to park in said customer parking.

ARTICLE III. RENT

SECTION 3.01 BASE MONTHLY RENT . Tenant agrees to pay to Landlord the Base Monthly Rent set forth in Section 1.01(L) at such place as Landlord may designate, without prior demand therefor, without offset or deduction and in advance on or before the first day of each calendar month during the Rental Term, commencing on the Rental Commencement Date. In the event the Rental Commencement Date occurs on a day other than the first day of a calendar month, then the Base Monthly Rent to be paid on the Rental. Commencement Date shall include both the Base Monthly Rent for the first full calendar month occurring after the Rental Commencement Date, plus the Base Monthly Rent for the initial fractional calendar month prorated on a per-diem basis (based upon a thirty (30) day month).

SECTION 3.02 ESCALATION . As set forth in Section 1.01(M).

SECTION 3.03 TENANT’S SHARE OF LANDLORD’S EXPENSES .

(a) “Basic Costs” shall mean all reasonable actual costs and expense incurred by Landlord in connection with the ownership, operation, management and maintenance of the Building and Property and related improvements located thereon (the “Improvements”, including, but not limited to, all reasonable expenses incurred by Landlord as a result of Landlord’s compliance with any and all of its obligations under this Lease (or under similar leases with other tenants). In explanation of the foregoing, and not in limitation thereof, Basic Costs shall include: all real and personal property taxes and assessments (whether general or special, known or unknown, foreseen or unforeseen) and any tax or assessment levied or charged in lieu thereof, whether assessed against Landlord and/or Tenant and whether collected from Landlord and/or Tenant; snow removal, trash removal; common area utilities, cost of equipment or devices used to conserve or monitor energy consumption, supplies, insurance, license, permit and inspection fees, cost of services of independent contractors, cost or compensation (including employment taxes and fringe benefits) of all persons who perform regular and recurring duties connected with day-to-day operation, maintenance, repair, and replacement of the Building, its equipment and the adjacent walk, and landscaped area (including, but not limited to janitorial, scavenger, gardening, security, parking, elevator, painting, plumbing, electrical, mechanical, carpentry, window washing, structural and roof repairs and reserves, signing and advertising), but excluding persons performing services not uniformly available to or performed for

 

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substantially all Building tenants; and rental expense or a reasonable allowance for depreciation of personal property used in the maintenance, operation and repair of the Building. The foregoing notwithstanding, Basic Costs shall not include depreciation on the Building and . Improvements; amounts paid toward principal or interest of loans of Landlord; nor “Direct Costs” as defined in Section 3.03 (b). Tenant shall pay its Proportionate Share of Basic Costs. “Tenant’s Proportionate Share of Basic Costs” shall mean the percentage derived from a fraction, the numerator of which is the gross rentable area of the Premises as set forth in Section 1.01(1) and the denominator of which is the gross rentable square footage of the Building (90,159 s.f.). Tenant’s Proportionate Share of Basic Costs initially is set forth in Section 1.01 (O), subject to increase or decrease due to increases or decreases in the gross rentable square footage of the Premises and/or the Building.

(b) “Direct Costs” shall mean all actual costs and expenses incurred by Landlord in connection with the operation, management, maintenance, replacement, and repair of the Premises, including but not limited to janitorial services, maintenance, repairs, supplies, utilities, heating, ventilation, air conditioning, and property management fees, which property management fees shall not exceed standard fees for agency management of similar buildings. If any category of Directs Costs can only be determined on a Building wide basis, Tenant’s proportionate share of any such category of Direct Costs will be based on the same percentage established for Tenant’s Proportionate Share of Basic Costs.

(c) Landlord may cause meters or monitors to be installed to measure actual electrical and ventilation/air conditioning usage in the Premises by Tenant. “Metered Costs” shall mean the actual cost of such usage. If such meters are installed, Tenant shall pay Landlord monthly, as Additional Rent, the estimated costs of such metered electrical and ventilation/air conditioning usage. If the costs of ventilation/air conditioning usage are not separately metered for tenants in the Building said costs shall be considered Direct Costs and shall be calculated as set forth in 3.03(a).

(d) “Estimated Costs” shall mean the projected amount of Direct Costs, Metered Costs and Proportionate Share of Basic Costs. The Estimated Costs for the calendar year in which the Lease commences are set forth in Section 1.01(O), and are not included in the Base Monthly Rent. If the Estimated Costs as of the date Tenant takes occupancy are greater than the Estimated Costs at the time this Lease is executed, the Estimated Costs shall be increased to equal the Estimated Costs as of the date of Tenant’s, occupancy.

SECTION 3.04 REPORT OF COSTS AND STATEMENT OF ESTIMATED COSTS.

(a) After the expiration of each calendar year occurring during the term of this Lease, Landlord shall furnish Tenant a written statement (“Annual Report of Costs”) of the Tenant’s actual Direct Costs, Metered Costs and Proportionate Share of Basic Costs occurring during the previous calendar year. The Annual Report of Costs shall specify the amount by which said actual costs for the previous year exceeds or is less than the amounts paid by Tenant as Estimated Costs during the previous calendar year.

 

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(b) At the same time specified in Section 3.04 (a), Landlord shall furnish Tenant a written statement of the Estimated Costs for the then current calendar year (“Annual Statement of Estimated Costs.”)

SECTION 3.05 PAYMENT OF ADDITIONAL RENT . Tenant shall pay additional rent (“Additional Rent”) as follows:

(a) With each monthly payment of Base Monthly Rent pursuant to Section 3.01 above, Tenant shall pay to Landlord, without offset or deduction, one-twelfth (1/12th) of the Annual Statement of Estimated Costs. If at any time Landlord obtains information that indicates that any of the categories of cost comprising Estimated Costs are significantly different than as calculated in the Annual Statement of Estimated Costs then in effect, Landlord may amend said Statement in order to reflect a more accurate prediction of the actual costs that will be incurred during the calendar year, and Tenant will pay amended Additional Rent consistent with said amended Statement.

(b) Within thirty (30) days after delivery of the Annual Report of Costs, Tenant shall pay to Landlord the amount by which Direct Costs, Metered Costs and Proportionate Share of Basic Costs, as specified in the Report, exceed the aggregate of Estimated Costs actually paid by Tenant as Additional Rent for the year at issue.

(c) If the Annual Report of Costs indicates that the Estimated Costs paid by Tenant exceeded the actual Direct Costs, Metered Costs and Proportionate Share of Basic Costs for the same year, Landlord, at its sole election, shall either (i) pay the amount of such excess to Tenant, or (ii) apply such excess against the next installment(s) of Base Monthly Rent and/or Additional Rent due hereunder and so notify Tenant.

SECTION 3.06 TAXES .

(a) Landlord shall advance all real property taxes and assessments (all of which are hereinafter collectively referred to as “Taxes”) which are levied against or which apply with respect to the Premises to be reimbursed by Tenant as a part of Basic Costs.

(b) Tenant shall prior to delinquency pay all taxes, assessments, charges, and fees which during the Rental Term hereof may be imposed, assessed, or levied by any governmental or public authority against or upon Tenant’s use of the Premises or any inventory, personal property, fixtures or equipment kept or installed, or permitted to be located therein by Tenant.

SECTION 3.07 PAYMENTS . All payments of Base Monthly Rent, Additional Rent and other payments to be made to Landlord shall be made on a timely basis and shall be payable to Landlord or as Landlord may otherwise designate. All such payments shall be mailed or delivered to Landlord’s principal office set forth in Section 1.01(C), or at such other place as Landlord may designate from time to time in writing. If mailed, all payments shall be mailed in sufficient time and with adequate postage thereon to be received in Landlord’s account by no later than the due date for such payment. If Tenant shall fail to pay any Base Monthly Rent or any additional rent or any other amounts or charges when due, Tenant shall pay interest from the due date of such past due amounts to the date of payment, both before and after judgment at a rate equal to the greater of fourteen (14%) percent per annum or two (2%) percent over the

 

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“prime” or “base” rate charged by Zions First National Bank of Utah at the due date of such payment; provided. however, that in any case the maximum amount or rate of interest to be charged shall not exceed the maximum non-usurious rate in accordance with applicable law. Notwithstanding the foregoing, and not more than twice per calendar year, Landlord shall give Tenant a ten (10) day written notice of its failure to pay any sums due hereunder prior to exercising its rights pursuant to this Section.

ARTICLE IV. RENTAL TERM, COMMENCEMENT DATE & PRELIMINARY TERM

SECTION 4.01 RENTAL TERM . The initial term of this Lease shall be for the period defined as the Rental Term in Section 1.01(K), plus the partial calendar month, if any, occurring after the Rental Commencement Date (as hereinafter defined) if the Rental Commencement Date occurs other than on the first day of a calendar month. “Lease Year” shall include twelve (12) calendar months, except that first Lease Year will also include any partial calendar month beginning on the Rental Commencement Date.

SECTION 4.02 RENTAL COMMENCEMENT DATE . The Rental Term of this Lease and Tenant’s obligation to pay rent hereunder shall commence as set forth in Section 1.01(K) (the “Rental Commencement Date”). Within five (5) days after Landlord’s request to do so, Landlord and Tenant shall execute a written affidavit, in recordable form, expressing the Rental Commencement Date and the termination date, which. affidavit shall be deemed to be part of this Lease.

SECTION 4.03 PRELIMINARY TERM . The period between the date Tenant enters upon the Premises and the commencement of the Rental Term will be designated as the “preliminary term” during which no Base Monthly Rent shall accrue; however, other covenants and obligations of Tenant shall be in full force and effect. Delivery of possession of the Premises to Tenant as provided in Section 5.03 shall be considered “entry” by Tenant and commencement of “preliminary term”.

ARTICLE V. CONSTRUCTION OF PREMISES

SECTION 5.01 CONSTRUCTION BY LANDLORD . Landlord has constructed the Building in which the Premises are located. The Premises are constructed substantially in accordance with Outline Specifications entitled “Landlord’s Work” marked Exhibit “C attached hereto and made a part hereof. It is understood and agreed by Tenant that no minor changes from any plans or from said Outline Specifications made necessary during construction of the Premises or the Building shall affect or change this Lease or invalidate same.

SECTION 5.02 CHANGES AND ADDITIONS BY LANDLORD . Landlord hereby reserves the right at any time, and from time to time, to make alterations or additions to, and to build additional stories on the Building in which the Premises are contained and to build adjoining the same and to modify the existing parking or other common areas to accommodate additional buildings. Landlord also reserves the right to construct other buildings or improvements in the Building area from time to time, on condition that if the Building area is expanded so as to include any additional buildings, Landlord agrees to create or maintain a parking ratio adequate to meet local laws and ordinances, including the right to add land to the Building or to erect parking structures thereon.

 

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SECTION 5.03 DELIVERY OF POSSESSION . Except as hereinafter provided, Landlord shall deliver the Premises to Tenant ready for Tenant’s Work on or before the date set forth in Section 1.01(J). The Premises shall be deemed as ready for delivery when Landlord shall have substantially completed construction of the portion of the said Premises to be occupied exclusively by Tenant, in accordance with Landlord’s obligations set forth in Exhibit “C”. Landlord shall, from time to time during the course of construction, provide information to Tenant concerning the progress of construction of said Premises, and will give written notice to Tenant when said Premises are in fact ready for Tenant’s Work. Notwithstanding the foregoing, Landlord shall have the right to extend the date for delivery of possession of the Premises for a period of three one (1) month periods by notice in writing given to Tenant any time prior to said delivery date. If any disputes shall arise as to the Premises being ready for delivery of possession, a certificate furnished by Landlord’s architect in charge so certifying shall be conclusive and binding of that fact and date upon the parties. It is agreed that by occupying the Premises as a tenant, Tenant formally accepts the same and acknowledges that the Premises are in the condition called for hereunder, except for items specifically excepted in writing at date of occupancy as “incomplete”.

ARTICLE VI. TENANT’S WORK & LANDLORD’S CONTRIBUTION

SECTION 6.01 TENANT’S WORK . Tenant agrees to provide all work of whatsoever nature in accordance with its obligations set forth in Exhibit “D”. Tenant agrees to furnish Landlord, within the time periods required in Exhibit “D”, with a complete and detailed set of plans and specifications drawn by some qualified person acceptable to Landlord setting forth and describing Tenant’s Work in such detail as Landlord may require and in compliance with Exhibit “D”, unless this requirement be waived in writing by Landlord. If said plans and specifications are not so furnished by Tenant within the required time periods, then Landlord may, at its option, in addition to other remedies Landlord may enjoy, cancel this Lease at any time thereafter while such plans and specifications have not been so furnished. No deviation from the final set of plans and specifications once submitted to and approved by Landlord, shall be made by Tenant without Landlord’s prior written consent. Landlord shall have the right to approve Tenant’s architect and contractor to be used in performing Tenant’s Work, and the right to require and approve insurance or bonds provided by Tenant or such contractors. In due course after completion of Tenant’s Work, Tenant shall certify to Landlord the itemized cost of Tenant improvements and fixtures located upon the Premises.

SECTION 6.02 LANDLORD CONTRIBUTION TO TENANT’S WORK . In addition to Landlord Work to be completed pursuant to Exhibit “C”, Landlord shall contribute the amount set forth in Section 1.01(Q) toward Tenant’s Work set forth in Exhibit “D”.

ARTICLE VII. USE

SECTION 7.01 USE OF PREMISES . Tenant shall use the Premises solely for the purpose of conducting the business indicated in Section 1.01(F) and for purposes ordinarily incidental to such use and only for such purposes and in such manner as are permitted both by

 

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the Protective Covenants relating to the University of Utah Research Park and by any existing legislation concerning the Research Park. Tenant shall not make any use of the Premises which might cause cancellation or an increase in the cost of any insurance policy covering the same. Tenant shall not make any use of the Leased Premises any article, item, or thing which is prohibited by the standard form of fire insurance policy. Tenant shall not commit any waste upon the Leased Premises and shall not conduct or allow any business activity, or thing on the Leased Premises which is an annoyance or causes damage to Landlord, to other sub-tenants, occupants, or users of the Improvements, or to occupants of the vicinity. Tenant shall comply with and abide by all laws, ordinances, and regulations of all municipal, county, state, and federal authorities which are now in force or which may hereafter become effective with respect to use and occupancy of the Premises. Landlord represents that to the best of its knowledge and understanding, that upon delivery of possession as set forth in Section 5.03, the Building will comply with all currently applicable laws, ordinances and regulations of municipal, county, state and federal authorities.

SECTION 7.02 HAZARDOUS SUBSTANCES .

(a) Landlord shall be responsible for removal of any Hazardous Substances that existed at the Project prior to construction or any that Landlord has or does install at the Premises or Building. After reasonable inquiry, Landlord is not aware of any existing Hazardous Substances within the Project areas.

(b) Tenant shall not use, produce, store, release, dispose or handle in or about the Leased Premises or transfer to or from the Leased Premises (or permit any other party to do such acts) any Hazardous Substance except in compliance with all applicable Environmental Laws. Tenant shall not construct or use any improvements, fixtures or equipment or engage in any act on or about the Leased Premises that would require the procurement of any license or permit pursuant to any Environmental Law. Tenant shall immediately notify Landlord of (i) the existence of any Hazardous Substance on or about the Leased Premises that may be in violation of any Environmental Law (regardless of whether Tenant is responsible for the existence of such Hazardous Substance), (ii) any proceeding or investigation by any governmental authority regarding the presence of any Hazardous Substance on the Leased Premises or the migration thereof to or from any other property, (iii) all claims made or threatened by any third party against Tenant relating to any loss or injury resulting from any Hazardous Substance, or (iv) Tenant’s notification of the National Response Center of any release of a reportable quantity of a Hazardous Substance in or about the Leased Premises. “Environmental Laws” shall mean any federal, state or local statute, ordinance, rule, regulation or guideline pertaining to health, industrial hygiene, or the environment, including without limitation, the federal Comprehensive Environmental Response, Compensation, and Liability Act; “Hazardous Substance” shall mean all substances, materials and wastes that are or become regulated, or classified as hazardous or toxic, under any Environmental Law. If it is determined that any Hazardous Substance exists on the Leased Premises resulting from any act of Tenant or its employees, agents, contractors, licensees, subtenants or customers, then Tenant shall immediately take necessary action to cause the removal of said substance and shall remove such within ten (10) days after discovery. Notwithstanding the above, if the Hazardous Substance is of a nature that can not be reasonably removed within ten (10) days Tenant shall not be in default if Tenant has commenced to cause such removal and proceeds diligently thereafter to complete removal, except that in all cases, any

 

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Hazardous Substance must be removed within sixty (60) days after discovery thereof. Furthermore, notwithstanding the above, if in the good faith judgment of Landlord, the existence of such Hazardous Substance creates an emergency or is of a nature which may result in immediate physical danger to persons at the Property, Landlord may enter upon the Leased. Premises and remove such Hazardous Substances and charge the cost thereof to Tenant as Additional Rent.

ARTICLE VIII. OPERATION AND MAINTENANCE OF COMMON AREAS

SECTION 8.01 CONSTRUCTION AND CONTROL OF COMMON AREAS . All automobile parking areas, driveways, entrances and exits thereto, and other facilities furnished by Landlord in or near the buildings or Building, including if any, employee parking areas, truck ways, loading docks, mail rooms or mail pickup areas, pedestrian sidewalks and hallways, landscaped areas, retaining walls, stairways, elevators, utility rooms, restrooms and other areas and improvements provided by Landlord for the general use in common tenants, their officers, agents, employees and customers, shall at all times be subject to the exclusive control and management of Landlord which shall have the right from time to time to establish, modify and enforce reasonable Rules and Regulations with respect to all facilities and areas mentioned in this Section. Landlord shall have the right to construct, maintain and operate lighting and drainage facilities on or in all said areas and improvements; to police the same, from time to time to change the area, level, location and arrangement of parking areas and other facilities hereinabove referred to; to restrict parking by tenants, their officers, agents and employees to employee parking areas; to close temporarily all or any portion of said areas or facilities to such extent as may, in the opinion of counsel, be legally sufficient to prevent a dedication thereof or the accrual of any rights to any person or the public therein; to assign “reserved” parking spaces for exclusive use of certain tenants or for customer parking, to discourage non-employee and non-customer parking; and to do and perform such other acts in and to said areas and improvements as, in the exercise of good business judgment, the Landlord shall determine to be advisable with a view toward maintaining of appropriate convenience uses, amenities, and for permitted uses by tenants, their officers, agents, employees and customers. Landlord will operate and maintain the common facilities referred to above in such a manner as it, in its sole discretion, shall determine from time to time. Without limiting the scope of such discretion, Landlord shall have the full right and authority to employ all personnel and to make all Rules and Regulations pertaining to and necessary for the proper operation, security and maintenance of the common areas and facilities. Building and/or project signs, traffic control signs and other signs determined by Landlord to be in best interest of the Building, will be considered part of common area and common facilities.

SECTION 8.02 LICENSE . All common areas and facilities not within the Premises, which Tenant may be permitted to use and occupy, are to be used and occupied under a revocable license, and if the amount of such areas be diminished, Landlord shall not be subject to any liabilities nor shall Tenant be entitled to any compensation or diminution or abatement of rent, nor shall such diminution of such areas be deemed constructive or actual eviction, so long as such revocations or diminutions are deemed by Landlord to serve the best interests of the Building.

 

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ARTICLE IX. ALTERATIONS, SIGNS, LOCKS & KEYS

SECTION 9.01 ALTERATIONS . Tenant shall not make or suffer to be made any alterations or additions to the Premises or any part thereof without the prior written consent of Landlord. Any additions to, or alterations of the Premises except movable furniture, equipment and trade fixtures shall become a part of the realty and belong to Landlord upon the termination of Tenant’s lease or renewal term or other termination or surrender of the Premises to Landlord.

SECTION 9.02 SIGNS . Tenant shall not place or suffer to be placed or maintained on any exterior door, wall or window of the Premises, or elsewhere in the Building, any sign, awning, marquee, decoration, lettering, attachment, canopy, advertising matter or other thing of any kind, and will not place or maintain any decoration, lettering or advertising matter on the glass of any window or door of the Premise without first obtaining Landlord’s written approval. Tenant shall maintain such sign, awning, canopy, decoration, lettering, advertising matter or other things as may be approved in good condition and repair at all times. Landlord may, at Tenant’s cost, and without liability to Tenant, enter the Premises and remove any item erected in violation of the Section 9.02. Landlord may establish rules and regulations governing the size, type and design of all signs, decorations, etc., and Tenant agrees to abide by same.

SECTION 9.03 LOCKS AND KEYS .

(a) The building shall be equipped with an electronic card access system at entrance to building as well as primary doors of the Leased Premises. Landlord shall issue, monitor, and program key cards for Tenant and Tenant’s employees, as reasonably needed. When employment relationships change, Tenant shall cooperate to attempt to retrieve said key cards from employees leaving Tenant.

(b) Where key access exists, Tenant may change locks or install other locks on doors, but if Tenant does, Tenant must provide Landlord with duplicate keys within twenty four hours after said change or installation.

(c) Upon termination of this Lease Tenant shall deliver to Landlord all cards and keys to the Premises including any interior offices, toilet rooms, combinations to built-in safes, etc. which shall have been furnished to or by the Tenant or are in the possession of the Tenant.

ARTICLE X. MAINTENANCE AND REPAIRS; ALTERATIONS; ACCESS

SECTION 10.01 LANDLORD’S OBLIGATION FOR MAINTENANCE . Landlord shall maintain and repair: (1) the areas outside the Premises including hallways, stairways, elevators, public restrooms, if any, general landscaping, parking areas, driveway


 
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