1011 Murray-Holladay
Rd.
THIS LEASE
AGREEMENT (the “Lease”) is made and entered into as of
this 1st day of September, 2003, by and between 1011 L.L.C.,
a Utah Limited Liability Company (the “Landlord”), and
SafeScan Medical Systems, LLC., a Utah Limited Liability
Company (the “Tenant”).
For
and in consideration of the rental to be paid by Tenant and of the
covenants and agreements herein set forth to be kept and performed
by Tenant, Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord, the Leased Premises (as hereinafter defined)
and certain other areas, rights and privileges for the term, at the
rental and subject to and upon all of the terms, covenants and
agreements hereinafter set forth.
1.1.
Description of Premises. Landlord does hereby demise, lease and let
unto Tenant, and Tenant does hereby take and receive from Landlord
the following:
(a).
That certain floor area containing approximately 14,100 rentable
square feet (the “Leased Premises”) comprised of the
entire
1 st
floor of the office building (the
“Building”) located at approximately 1011 East
Murray-Holladay Rd., Salt Lake City, Utah as shown crosshatched on
Exhibit “A” attached hereto.
(b).
The non-exclusive right to use Tenant’s Proportionate Share
of the Common Areas (as defined in Section 18.1
below).
(c).
Such non-exclusive use of rights-of-way, easements and similar
rights with respect to the Building and Property as may be
reasonably necessary for ingress to, and egress from, the Leased
Premises and the Common Areas.
(d).
The non-exclusive right to use those areas designated for vehicular
parking, including the non-exclusive right to the use of fifty-five
(55) parking stalls on an unreserved basis.
1.2.
Changes to Building. Landlord hereby reserves the right at any time
and from time to time to make changes, alterations or additions to
the Building or to the Property. Tenant shall not in such event
claim or be allowed any damages for injury or inconvenience
occasioned thereby and shall not be entitled to terminate this
Lease, provided that rent payable hereunder shall abate on a
pro-rata basis if all or a portion of the leased premises described
in paragraph 1.1(a) herein are rendered unusable during said
construction.
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2.1.
Length of Term. The term of this Lease shall be for a period of
three (3) years, commencing on September 1st, 2003, and terminating
at 11:59 P.M. on September 8, 2006. Except for the return of
any money deposited with Landlord by Tenant, Landlord shall not
have any liability to Tenant arising out of Landlords failure to
deliver the Premises to Tenant on the Commencement Date.
III. BASIC RENTAL PAYMENT
3.1.
Basic Annual Rent. Tenant agrees to pay to Landlord as basic annual
rent (the “Basic Rent”) the amounts shown in the
schedule below:
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See
Schedule Below
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See
Schedule Below
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See
Schedule Below
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3.2
Offset in Basic Rent for Landlord’s Contribution to Tenant
Improvements. As outlined in paragraph 3.3 below, Landlord shall
provide a Tenant with an improvement allowance in the form of a
reduction in rents already included as stated below in the total
amount of $30,000.00 (“Tenant Improvement Allowance”)
to be offset against Tenant’s monthly installment payments of
Basic Rent in the first four months of the first year of the lease
terms.
3.3
Payment of Annual Basic Rent. Annual Basic Rent shall be payable
without prior demand in monthly installments detail below in
advance on the 1st day of each calendar month during the
Term.
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MONTHS
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MONTHLY INSTALLMENT
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$
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12,500.00
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$
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0.00
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$
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10,000.00
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$
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10,000.00
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$
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10,000.00
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$
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17,250.00
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$
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17,767.50
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$
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18,300.53
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$
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1,060.90
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3.4
Basic Rent includes the following services:
3.5
Janitorial services for the Premises described in paragraph 1.1(a)
and the first floor bathrooms are not included in Basic Rent.
Telephone, network and cable/satellite television services are not
included in Basic Rent.
3.6.
Late Fees. If any payment is not made by the tenth -(10
th ) day following the due date of the payment,
then there shall be added to the payment an amount equal to seven
percent (7%) of the payment as an agreed late charge on the
twentieth day of each and every month in which a payment is
delinquent.
4.1
In addition to the Basic Rent, in each applicable year the Tenant
shall pay the Landlord as Additional Rent its proportional share of
the building operating costs of any increases in building operating
expense over and above $5.00 per rentable square foot per
12 month period of the lease agreement. To calculate the
Tenant’s share of costs over $5.00, see Building Operating
Costs as defined below in 4.2, a, b, and c.
4.2.
Building Operating Costs are all those costs not directly paid by
the Tenant and fall in the following categories:
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(a)
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All
real and personal property taxes and assessments of every kind and
nature relating to the Building and its operation and actually paid
by Landlord. Such costs shall be divided by the total square
footage of the building to determine the amount per square
foot.
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(b)
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All
utilities, including, but not limited to, sewer & water, gas
and electric. These utility costs shall be divided by the occupied
rentable square footage to determine the amount per square foot. If
the occupied rentable square footage changes during the
12 month period, the costs will be pro-rated based on the time
and square footage that is occupied.
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(c)
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Insurance, management, and
maintenance, including, but not limited to, landscaping
maintenance, asphalting, snow removal, window cleaning,
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roof
maintenance and all other maintenance obligations of Landlord
provide in this Lease. Such costs shall be divided by the total
square footage of the building to determine the amount per square
foot.
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4.3.
Additional Rent shall be computed as follows:
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(a)
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Within 60 days after the end of
each 12 month lease period, Landlord will furnish Tenant an
itemized statement indicating the Tenant’s portion of the
Building Operating Cost for the 12 month lease
period.
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(b)
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If
Tenant’s share of the Building Operating Costs exceeds $5.00
per square foot, Landlord will provide Tenant with an invoice for
the amount of the Additional Rent due to Landlord for the first
12 month lease period. Tenant shall have 60 days after
the invoice date to pay the Additional Rent due. In addition, the
Tenant’s monthly rent for the next 12 month lease period
shall be adjusted to reflect Landlord’s estimate of
Additional Rent for the following year. Thereafter, Landlord shall
furnish Tenant with a statement at the end of each 12-month lease
period detailing the Building Operating Cost for the previous
12-month period. The amount of Addition Rent shall thereafter be
increased or decreased on an annual basis to reflect any change in
Operating Cost.
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(c)
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When Tenant’s share of the
increase in actual Building Operating Costs is less than the
estimated Additional Rent paid by Tenant, Landlord shall refund
such excess in a lump sum within 120 days after the end of the
12 month period.
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4.4.
Additional Monetary Obligations. Tenant shall also pay as
Additional Rent all other sums of money as shall become due and
payable by Tenant to Landlord under any other section of this Lease
in the manner described in said section. Landlord shall have the
same remedies in the case of a default in the payment of Additional
Rent as are available to Landlord in the case of a default in the
payment of one or more installments of Basic Rent.
5.1.
Deposit. Prior to occupying the Premises, Tenant shall deposit with
Landlord the sum of Two thousand Five hundred and No/100 Dollars ($
2,500.00 ) as security for performance of all terms, covenants, and
conditions required to be performed herein. Such sum shall be
returned to Tenant after the expiration of the term of this Lease
and delivery of possession of the Leased Premises to Landlord if at
such time Tenant has performed all terms, covenants and conditions
of this Lease. Landlord may commingle said sum with its own
funds
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and use said
sum for any purposes as Landlord may determine. Tenant is not
entitled to any accrued interest on the Security
Deposit.
5.2.
Default. In the event of default by Tenant in respect to any of its
obligations under this Lease, including, but not limited to, the
payment of rent or additional rent, Landlord may use, apply, or
retain all or any part of the security deposit for the payment of
any unpaid Basic Rent or for any other amount which Landlord may be
required to expend by reason of the default of the Tenant,
including any damages or deficiency in the reletting of the
Premises, regardless of whether or not the accrual of such damages
or deficiency occurs before or after an eviction or a portion of
the security deposit is so used or applied. Tenant shall, upon
thirty (30) days written demand, deposit cash with Landlord in
an amount sufficient to restore the security deposit to its
original amount.
6.1.
Use of Leased Premises. The Leased Premises shall be used and
occupied by Tenant for general office purposes only and for no
other purpose whatsoever without the prior written consent of
Landlord. Landlord may withhold consent for any or no reason. Any
variation or deviation from the specific use expressly set forth
herein shall be deemed a default of this Lease.
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(a)
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Landlord authorizes Tenant to use
the Leased Premises for light manufacture, operation, storage,
testing and all other aspects of designing, manufacturing,
assembling, building, packaging, shipping, and operating medical
equipment. Such authorization includes but is not limited to the
assembly and testing of electronic components, manufacture of
mechanical components including machining, fabrication, assembly,
and testing, as well as the operation of such equipment including
patient testing. Prior to installing any machinery or equipment,
Tenant shall first provide Landlord with a list of the equipment to
be installed, the equipment specifications, including noise,
vibration and waste information. Landlord may object to the
installation of any item of machinery which would not be considered
“light manufacturing” due to noise, vibration, or waste
accumulation.
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6.2.
Prohibition of Certain Activities or Uses. Notwithstanding the
approval of Landlord of the uses described in paragraph 6.1(a)
above, the Tenant shall not do or permit anything to be done in or
about, or bring or keep anything in the Leased Premises which is
prohibited by this Lease or which will in any way:
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(a)
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Adversely affect any fire, liability
or other insurance policy carried with respect to the Building, the
Improvements or any of the contents of the Building (except with
Landlord’s express written permission, which will
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not be
unreasonably withheld, but which may be contingent upon
Tenant’s agreement to bear any additional costs, expenses or
liability for risks that may be involved).
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(b)
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Obstruct or interfere with any right
of any other tenant or occupant of the Building or injure or annoy
such persons.
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(c)
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Conflict with or violate any law,
statute, ordinance, rule, regulation or requirement of any
governmental unit, agency or authority (whether existing now or
enacted in the future, known or unknown, foreseen or
unforeseen).
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(d)
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Overload the floors or otherwise
damage the structural soundness of the Leased Premises, or
Building, or any part thereof.
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6.3.
Affirmative Obligations With Respect to Use. Tenant will at its
sole cost and expense comply with all governmental laws,
ordinances, regulations, and requirements, of any lawful
governmental body of authorities having jurisdiction over the
Leased Premises which are now in force or which hereafter may be in
force; keep the Leased Premises in a clean, neat and orderly
condition, free of objectionable noise, odors, or nuisance; in all
respects and at all times fully comply with all health and policy
regulations; and not suffer, permit, or commit any
waste.
6.4.
Suitability. Tenant acknowledges that except as expressly set forth
in this Lease, neither Landlord nor any other person has made any
representation or warranty with respect to the Leased Premises or
any other portion of the Building or Improvements. Specifically,
but not in limitation of the foregoing, no representation has been
made or relied on with respect to the suitability of the Leased
Premises or any other portion of the Building or Improvements for
the conduct of Tenant’s business. By executing this lease the
Tenant waives any claim that the Leased Premises, Building and
Improvements are in unsatisfactory condition.
6.5.
Taxes. Tenant shall pay all taxes, assessments, charges, and fees
which during the term hereof may be imposed, assessed or levied by
any governmental or public authority against or upon Tenant’s
use of the Leased Premises or any personal property or fixture kept
or installed therein by Tenant.
6.6
Hazardous Waste. Tenant agrees to seek written approval of Landlord
prior to keeping or using or permitting to be kept or used on the
Leased Premises any flammable fluids, explosives or any
“hazardous substance,” “solid waste,” or
“hazardous waste” as said terms are defined in 42
U.S.C. 9601(14) and 40 C.F.R. 261.1 et seq.
6.7.
Rules and Regulations. Tenant shall comply with all the rules and
regulations attached to this Lease as Exhibit
“B” and any other such rules as the Landlord may
implement to insure the rights of building tenants.
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VII. UTILITIES AND SERVICE
7.1.
Obligations of Landlord. During the term of this Lease the Landlord
agrees to cause to be furnished to the Leased Premises during
customary business hours and during generally recognized business
days the following utilities and services:
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(a)
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Electricity, water, gas and sewer
service.
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(b)
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Access to demarcation point of local
telephone company within the building. Landlord shall not provide
telephone lines, stations, switching equipment, networking
facilities or distribution cabling that is currently located at the
facility.
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(c)
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Heat and air-conditioning to such
extent and to such levels as, is reasonably required for the
comfortable use and occupancy of the Leased Premises subject
however to any limitations imposed by any government agency. Heat
and air conditioning will be provided Monday through Saturday from
9:00 a.m to 9:00 p.m.
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(d)
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Fluorescent bulbs and other lighting
currently used in fixtures originally installed in the
Premises.
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(e)
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Security (including lighting for
common halls, stairways, entries and restrooms) to such extent as
is usual and customary in similar buildings in Salt Lake County,
Utah.
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(f)
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Snow removal service.
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(g)
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Landscaping and grounds keeping
service.
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7.2.
Additional Limitations.
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(a)
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Tenant will not, without the written
consent of Landlord: (1) use any machinery on the Leased
Premises using current in excess of 110 volts which will in any way
to any extent increase the amount of electricity or water
designated above; or (2) connect with electric current or
water pipes, except through those now existing in the Leased
Premises, any apparatus or device for the purpose of using electric
current or water.
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(b)
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If
Tenant shall require water, electric current or natural gas in
excess of that commonly furnished or supplied for use in similar
Leased Premises, Tenant shall first procure the consent of Landlord
for the use. The Landlord may cause a
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water meter,
electric current meter or natural gas meter to be installed in the
Leased Premises to measure the amount of water, electric current,
or natural gas consumed for any such other use. The cost of such
meters and of installation, maintenance, and repair thereof shall
be paid for by Tenant; and Tenant agrees to pay Landlord promptly
upon demand for all such water, electric current, or natural gas
consumed as shown by said meters at the rates charged for such
services plus any additional expense incurred in keeping account of
the water, electricity or natural gas so consumed.
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(c)
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If
heat generating machines or devises are used in the Leased Premises
which affect the temperature otherwise maintained by the air
conditioning system, Landlord reserves the right to install
additional or supplementary air conditioning units for the Leased
Premises. The entire cost of installing, operating, maintaining and
repairing the same shall be paid by Tenant to Landlord promptly
upon demand by Landlord.
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7.3
Obligations of Tenant. During the term of this Lease the Tenant
agrees to pay and furnish the following:
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(a)
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Assumption of ADT Security
Contract;
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(b)
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Janitorial Service;
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(c)
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Telephone, network or cable
service.
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7.4
Limitation of Landlord’s Liability. Landlord shall not be
liable for, and Tenant shall not be entitled to terminate this
Lease or effectuate any abatement or reduction of rent by reason
of, Landlord’s failure to provide or furnish any of the
foregoing utilities or services if such failure was reasonably
beyond the control of Landlord.
VIII. MAINTENANCE AND REPAIRS; ALTERATIONS,
ACCESS
8.1
Maintenance and Repairs by Landlord. Landlord shall maintain in
good order, condition and repair the Building and Improvements
including exterior landscaping except the Leased Premises and those
other portions of the Building leased, rented or otherwise occupied
by persons not affiliated with the Landlord. Landlord, at its
expense, will make, or cause to be made structural repairs to
exterior walls, structural columns and structural floor which
collectively enclose the Premises (excluding, however, all doors,
door frames, storefronts); provided Tenant shall give Landlord
notice of the necessity for such repairs, and shall immediately
notify Landlord of any hazardous, unsafe or dangerous conditions on
or around the Leased Premises. Notwithstanding the foregoing, if
the necessity for such repairs shall have arisen from or shall have
been caused by the negligence or willful acts of Tenant, its
agents,
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concessionaires, officers, employees, licensees,
invitees or contractors, Landlord may make or cause the same to be
made, but shall not be obligated to do so, and Tenant agrees to pay
to Landlord promptly upon Landlord’s demand, as Additional
Rental, the cost of such repairs, if made, with interest until
paid. In the event Landlord elects not to make such repairs caused
by Tenant’s negligence, Landlord may require Tenant to make
such repairs at Tenant’s sole cost and expense Landlord shall
supply Building and Improvements including exterior landscaping
other than the Leased Premises and first-floor bathrooms in a
clean, sanitary and orderly condition, the cost and expense of
which shall be included in Basic Rent.
8.2
Maintenance and Repairs by Tenant. Tenant, at Tenant’s sole
cost and expense and without prior demand being made, shall
maintain the Leased Premises in good order, condition and repair,
reasonable wear and tear expected. In addition, Tenant shall pay
for all janitorial service for the Leased Premises and the
first-floor bathrooms of the Building.
8.3
Alterations. Tenant shall not make or cause to be made any
alterations, additions or improvements or install or cause to be
installed any fixtures, signs, floor coverings, interior or
exterior lighting, plumbing fixtures, or shades or awnings, or make
any other changes to the Leased Premises without first obtaining
Landlord’s written approval. Tenant shall present to the
Landlord plans and specifications for such work at the time
approval is sought. In the event Landlord consents to the making of
any alterations, additions, or improvements to the Leased Premises
by Tenant, the same shall be made by Tenant at Tenant’s sole
cost and expense. All such work with respect to any alterations,
additions, and changes shall be done in a first-class and
workmanlike manner and diligently completed so that, except as
absolutely necessary during the course of such work, the Leased
Premises shall at all times be a complete operating unit. Any such
alterations, additions, or changes shall be performed and done
strictly in accordance with all laws and ordinances relating
thereto. In performing the work or any such alterations, additions,
or changes, Tenant shall have the same performed in such a manner
as not to obstruct access to any portion of the Building. Any
alterations, additions, or improvements to or of the Leased
Premises, including, but not limited to, wall covering, paneling,
and built-in cabinet work shall at once become a part of the realty
and shall be surrendered with the Leased Premises unless Landlord
otherwise elects at the end of the term hereof.
8.4.
Landlord’s Access to Leased Premises. Landlord shall have the
right to place, maintain, and repair all utility equipment of any
kind in, upon, and under the Leased Premises as may be necessary
for the servicing of the Leased Premises and other portion of the
Building. Landlord shall also have the right to enter the Leased
Premises at all times to inspect it; to show it to prospective
purchasers, mortgagees, tenants, and lessees; and to make such
repairs, additions, alterations, or improvements as Landlord may
deem desirable. Landlord shall be allowed to take all material upon
said Leased Premises that may be required therefor without the same
constituting an actual or constructive eviction of Tenant in whole
or in part. The rents reserved herein shall in no way abate while
said work is in progress by reason of loss or interruption of
Tenant’s business or otherwise, and Tenant shall have no
claim for damages.
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During the
three (3) months prior to expiration of this Lease or of any
renewal term, Landlord may place upon the Leased Premises “To
Let” signs which Tenant shall permit to remain
thereon.
IX. ASSIGNMENT AND SUBLETTING
9.1.
Condition for Assignment and Subletting. Tenant shall not transfer,
assign, mortgage or hypothecate this Lease, in whole or in part, or
permit the use of the Leased Premises by any person or persons
other than Tenant, or sublet the Leased Premises, or any part
thereof, without the prior written consent of Landlord in each
instance. Such prohibition against assigning or subletting shall
include any assignment or subletting by operation of law. Any
transfer of this Lease from the Tenant by merger, consolidation,
transfer of assets, or liquidation shall constitute an assignment
for purposes of this Lease. Notwithstanding the foregoing, Landlord
shall not unreasonably withhold its approval of an assignment or
sublease.
9.2.
Consent Required. Any assignment or subletting without
Landlord’s consent shall be void, and shall constitute a
default hereunder which, at the option of Landlord, shall result in
the termination of this Lease or exercise of Landlord’s other
remedies hereunder. Consent to any assignment or subletting shall
not operate as a waiver of the necessity for consent to any
subsequent assignment or subletting, and the terms of such consent
shall be binding upon any person holding by, under, or through
Tenant.
9.3.
Landlord’s Right in Event of Assignment. If this Lease is
assigned or if the Leased Premises or any portion thereof are
sublet or occupied by any person other than the Tenant, Landlord
may collect rent and other charges from such assignee or other
party and apply the amount collected to the rent and other charges
reserved hereunder. However, such collection shall not constitute
consent or waiver of the necessity of consent to such assignment,
subleasing, or other transfer; and it shall not constitute the
recognition of such assignee, sublessee, or other party as the
Tenant hereunder or a released of Tenant from the further
performances of all the covenants and obligations of Tenant herein
contained. In the event that Landlord shall consent to a sublease
or assignment hereunder, Tenant shall pay to Landlord reasonable
fees, not to exceed $300.00 incurred in connection with processing
of documents necessary to the giving of such consent.
9.4.
Landlord’s Right to Assign. Landlord may assign its interest
in this Lease without condition or restriction.
10.1.
Indemnification By Tenant. Tenant shall indemnify Landlord and save
it harmless from and against any and all suits, actions, damages,
claims, liability and expense in connection with loss of life,
bodily or personal injury, or property damage arising from or out
of any
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occurrence in,
upon, at or from the Leased Premises, or the occupancy or use by
Tenant of Leased Premises or any part thereof or occasioned wholly
or in part by any act or omission of Tenant, its agents,
contractors, employees, servants, invitees, licensees, or
concessionaires.
10.2.
Release of Landlord. Except for Landlord’s negligence,
Landlord shall not be responsible or liable at any time for any
loss or damage to Tenant’s personal property or to
Tenant’s business. Tenant shall store its property in and
shall use and enjoy the Leased Premises and all other portions of
the Building and Improvements at its own risk, and hereby releases
Landlord, to the full extent permitted by law, from all claims of
every kind resulting in loss of life, personal or bodily injury,
property damage or loss of business income.
10.3.
Litigation. In case either party, without fault on its part, shall
be made a party to any litigation commenced by or against the
other, then – the litigant shall protect and hold harmless
the other party and shall pay all of the other party’s costs,
expenses, and reasonable attorney’s fees.
11.1
Tenant will maintain insurance as follows:
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a)
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Liability insurance naming Landlord
as co-insured with limits of not less than $1 million per
person or accident.
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b)
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Insurance protecting it from
interruption from business by reason of casualty, fire, legal,
sprinkler damage, or interruption of business.
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c)
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Property and casualty insurance
sufficient to cover Tenant’s contents, furnishings, and
equipment and damage to Leased Premise.
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All
items required to be covered by Tenant’s insurance shall
relieve Landlord of all responsibility for the items so covered,
the release of liability being one of the conditions of this
Lease.
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