|
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 |
2
|
|
|
|
|
|
|
|
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 |
3
|
|
|
|
|
|
|
|
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 |
4
LEASE
AGREEMENT
ARTICLE I. BASIC LEASE
PROVISIONS; ENUMERATION OF EXHIBITS
SECTION 1.01 BASIC
LEASE PROVISIONS
| (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
. |
5
| (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 |
6
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.
7
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
8
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
9
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.
10
(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
11
“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.
12
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
13
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
14
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.
15
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
|