Exhibit 10.40
Medical
Office Building Lease
1.
BASIC TERMS. This
Section 1 contains the Basic Terms of this lease between
Landlord and Tenant, named below. Other Sections of the Lease
referred to in this Section 1 explain and define the Basic
Terms and are to be read in conjunction with the Basic Terms.
1.1.
Effective Date of Lease: August 31, 2006
1.2.
Landlord: Image Properties, LLC, a South Carolina limited liability
company.
1.3.
Tenant: [MedQuest Entity].,
a
corporation.
1.4.
Premises: Approximately rentable
square feet in the building commonly known as
,
,
(the “
Building ”).
1.5.
Property: See Exhibit A.
1.6.
Lease Term:
( ) months (the “ Term ”), commencing
September 1, 2006 (the “ Commencement Date ”)
and ending, subject to Section 2.3 and Exhibit B
below,
(the “ Expiration Date” ).
1.7.
Permitted Uses (See Section 4.1 ): Medical office
building, including, but not limited to, the operation of a
diagnostic imaging business or medical records storage, and subject
to Landlord’s written consent, not to be unreasonably
conditioned, delayed or withheld, any other lawful use.
1.8.
Tenant’s Guarantor: MQ Associates, Inc., a Delaware
corporation (form of Guaranty attached hereto as Addendum 2
).
1.9.
Initial Estimated Additional Rent Payable by Tenant:
$ per month.
1.10.
Exhibits to Lease: The following exhibits are attached to and made
a part of this Lease: A (legal description); B (Confirmation of
Commencement Date); C (Insurance Certificates); D (Termination
Option Schedules); Addendum 1 (Renewal Option); and Addendum 2
(Form of Guaranty).
1.11.
Tenant’s proportionate share of Operating Expenses is
%.
2.
LEASE OF PREMISES;
RENT .
2.1.
Lease of Premises for Lease
Term . Landlord hereby leases the Premises to Tenant,
and Tenant hereby rents the Premises from Landlord, for the Term
and subject to the conditions of this Lease.
2.2.
Types of Rental Payments
. Tenant shall pay net base rent to Landlord in monthly
installments, in advance, on the first day of each and every
calendar month during the Term of this Lease (the “ Base
Rent ”) in the amount of
Thousand
Hundred
and
No/100ths Dollars ($ , .00); provided,
however, beginning January 1, 2009, and occurring again each
January 1 st
thereafter for the remainder of the Lease Term (January 1,
2009 and each January 1 st
thereafter during the Lease Term, collectively and
individually, the “ Adjustment Date ”), the Base
Rent shall be increased annually in the following manner:
subject to the limitations set forth herein, the Base Rent provided
for in this Section 2.2 shall be subject to being increased
by the percentage of increase, if any, in the United States
Department of Labor, Bureau of Labor Statistics, Consumer Price
Index for Urban Wage Earners and Clerical Workers — U.S. City
Average, All Items (base year 1982-84=100) (“ Index
”). If the Index has changed so that the base year
differs from that used in this Section, the Index shall be
converted in accordance with the conversion factor published by the
United States Department of Labor, Bureau of Labor Statistics, to
the 1982-84 base. If the Index is discontinued or revised
during the Term, such other government index or computation with
which it is replaced shall be used in order to obtain substantially
the same result as would be obtained if the Index had not been
discontinued or revised. If the Index is discontinued and no
government index or computation replaces it, Landlord and Tenant
shall in good faith agree upon a suitable substitute.
On each Adjustment
Date, the Index published nearest to the then current Adjustment
Date shall be the “Adjustment Index” . The
Index published nearest to the immediately preceding Adjustment
Date (or the Index published nearest to January 1, 2008 for the
first Adjustment Date) shall be the “Base Index”
. On each Adjustment Date, the Base Rent shall be
adjusted by multiplying the Base Rent payable under this Lease
immediately prior to such Adjustment Date by a fraction, the
numerator of which fraction is the applicable Adjustment Index and
the denominator of which fraction is the Base Index. The
amount so determined shall be the Base Rent payable under
Section 2.2 for the Lease year beginning on the applicable
Adjustment Date and continuing until the following December
31st.
Tenant shall also pay
(a) Operating Expenses (as hereinafter defined), and (b) any other
amounts owed by Tenant hereunder (collectively, “
Additional Rent ”). In the event any monthly
installment of Base Rent or Additional Rent, or both, is not paid
within five (5) days of the date when due, three (3) business days
after written notice from Landlord of such failure to pay, a one
time late charge in an amount equal to five percent (5%) of the
then delinquent installment of Base Rent and or Additional Rent
(the “ Late Charge ”) shall be imposed with
respect to such delinquent payment. For purposes of this
Lease, the Late Charge, Default Interest, as defined in Section
22.3 below, Base Rent and Additional Rent shall collectively be
referred to as “ Rent ”; provided, however,
without notice to Tenant, Default Interest shall begin to accrue on
any unpaid Rent on the date which is three (3) days following the
assessment of the Late Charge. Where Default Interest is assessed
on unpaid principal sums constituting delinquent Base Rent and/or
Additional Rent, Tenant shall receive an offset against such
assessed Default Interest in an amount equal to the total Late
Charge assessed against Tenant and specifically arising from
Tenant’s failure to pay the delinquent Base Rent and/or
Additional Rent constituting such unpaid principal sums. All
Rent shall be paid by Tenant to Landlord, c/o Thomas Gentry, 4300
North Point Parkway, Suite 350, Alpharetta, Georgia 30022 (or such
other entity designated as Landlord’s management agent, if
any, and if Landlord so appoints such a management agent,
the
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“ Agent
”), or pursuant to such other directions as Landlord shall
designate in this Lease or otherwise in writing.
2.3.
Covenants Concerning Rental
Payments . Tenant shall pay the Rent promptly when
due, without notice or demand, and without any abatement, deduction
or setoff. No payment by Tenant, or receipt or acceptance by
Agent or Landlord, of a lesser amount than the correct Rent shall
be deemed to be other than a payment on account, nor shall any
endorsement or statement on any check or letter accompanying any
payment be deemed an accord or satisfaction, and Agent or Landlord
may accept such payment without prejudice to its right to recover
the balance due or to pursue any other remedy available to
Landlord. If the Commencement Date occurs on a day other than
the first day of a calendar month, the Rent due for the first
calendar month of the Term shall be prorated on a per diem basis
(based on a 360 day, 12 month year) and paid to Landlord on the
Commencement Date, and the Term will be extended to terminate on
the last day of the calendar month in which the Expiration Date
stated in Section 1.6 occurs.
3.
OPERATING EXPENSES
.
3.1.
Definitional Terms Relating to
Additional Rent . For purposes of this Section and
other relevant provisions of the Lease:
3.1.1
Operating Expenses .
The term “ Operating Expenses ” shall mean all
costs and expenses paid or incurred by Landlord with respect to, or
in connection with, the ownership, repair, maintenance and
operation of the Property. Operating Expenses may include,
but are not limited to, any or all of the following: (i) services
provided directly by employees of Landlord or Agent in connection
with the operation, maintenance or rendition of other services to
or for the Property (including, but not limited to, those areas of
the Building in which multiple tenants, if any, have access to for
use (“ Common Areas ”)); (ii) to the extent not
separately metered, billed, or furnished, all charges for utilities
and services furnished to either or both of the Property and the
Premises, including, without limitation, the Common Areas (as
hereinafter defined), together with any taxes on such utilities;
(iii) all market-based premiums for commercial property, casualty,
general liability, boiler, flood, earthquake, terrorism and all
other types of insurance provided by Landlord and relating to the
Property; (iv) any capital improvements made by, or on behalf of,
Landlord to the Property that are either or both (a) designed to
reduce Operating Expenses and actually do reduce Operating Expenses
and (b) required to keep the Property in compliance with all
governmental laws, rules and regulations applicable thereto, from
time to time, the cost of which capital improvements shall be
reasonably amortized by Landlord over the useful life of the
improvement, in accordance with generally accepted accounting
principles; (v) Taxes, as hereinafter defined in Section
3.1.2 ; (vi) dues, fees or other costs and expenses, of any
nature, due and payable to any association or comparable entity to
which Landlord, as owner of the Property, is a member or otherwise
belongs and that governs or controls any aspect of the ownership
and operation of the Property; (vii) any real estate taxes and
common area maintenance expenses levied against, or attributable
to, the Property under any declaration of covenants, conditions and
restrictions, reciprocal easement agreement or comparable
arrangement that encumbers and benefits the Property and other real
property (e.g., a business park); (viii) all costs and expenses
incurred to maintain, repair and replace all or any of the Common
Areas and (ix) any commercially reasonable professional fees
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incurred by Landlord for the purpose of
reducing Tenant’s monetary obligations under this Lease,
including, but not limited to, the costs of commercially reasonable
property tax valuation appeals. Notwithstanding any provision
to the contrary, Operating Expenses shall exclude the following:
(1) wages, salaries, fees and fringe benefits paid to executive
personnel or officers of Landlord or Agent or officers or personnel
of partners of Landlord or Agent above the position of property
manager; (2) any charge for depreciation of the Building or
equipment and any interest or other financing charge; (3) all costs
relating to activities for the solicitation, execution and/or
enforcement of other leases of space, if any, in the Building or
Property; (4) all costs for which Tenant or any other tenant in the
Building is being or would be charged separately; (5) the cost of
any repair made by Landlord because of the total or partial
destruction of the Property or Building or the condemnation of a
portion of the Property or Building; (6) the cost of any items for
which Landlord is reimbursed by insurance or otherwise compensated
by parties other than tenants of the property or Building pursuant
to clauses similar to this provision; (7) the costs of any repairs,
alterations, additions, changes, replacements and other items which
under generally accepted real estate practice are properly
classified as capital expenditures, except as permitted pursuant to
Section 3.1.1(iv) above; (8) any operating expenses representing an
amount paid to a related corporation, entity or person of Landlord
that is in excess of the amount that would be paid to a third-party
vendor or service provider, but only to the extent of such excess
amount; (9) the costs of overtime or any other expense to Landlord
in curing its own defaults; (10) the cost of alterations of tenant
space in the Building, if any, leased or in preparation for leasing
to other tenants; (11) ground rent or similar payments to a ground
lessor; (12) all rebates, volume discounts and recoveries from
other tenants, if any, shall be netted against total Operating
Expenses attributable to the Property or Building; (13) repairs
necessitated by the negligence of Landlord or Agent; (14)
administrative costs incurred in connection with the procurement
and implementation of insurance policies; (15) any professional
fees incurred by Landlord other than those expressly permitted in
the previous sentence; and (16) any and all management
fees.
3.1.2
Taxes . The term
“ Taxes ,” as referred to in Section
3.1.1(v) above shall mean (i) all governmental taxes,
assessments, fees and charges of every kind or nature (other than
Landlord’s income taxes), whether general, special, ordinary
or extraordinary, due at any time or from time to time, during the
Term and any extensions thereof, in connection with the ownership,
leasing, or operation of the Property, or of the personal property
and equipment located therein or used in connection therewith,
including, without limitation, any sales or use taxes assessed by
governing municipal or state authority against Tenant’s
personal property; and (ii) any reasonable expenses incurred by
Landlord in contesting such taxes or assessments and/or the
assessed value of the Property. For purposes hereof, Tenant
shall be responsible for any Taxes that are due and payable at any
time or from time to time during the Term and for any Taxes that
are assessed, become a lien, or accrue during any Operating Year,
which obligation shall survive the termination or expiration of
this Lease. Taxes shall not include any corporate franchise,
or estate, inheritance, income tax, gift tax, excess profit tax,
late payment charges and penalties (to the extent assessed due
solely to Landlord’s actions or inactions), special
assessments levied against property other than real estate (but
only to the extent that such special assessments do not relate
directly to Tenant and may be paid in installments, and only any
installments payable after the Term of this Lease shall be excluded
pursuant to this provision), excise taxes, gross receipts taxes,
capital levies or tax imposed upon any transfer by Landlord of any
portion of its interest in this Lease or the Property or Building
(or the Property or Building itself) or any taxes to be paid
directly by Tenant.
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3.1.3
Operating Year . The
term “ Operating Year ” shall mean the calendar
year commencing January 1st of each year (including the calendar
year within which the Commencement Date occurs) during the
Term.
3.2.
Payment of Operating Expenses
. Tenant shall pay, as Additional Rent and in accordance
with the requirements of Section 3.3 , the full amount of
Operating Expenses as set forth in Section 3.3 ; provided,
however, in the case of multiple-tenant properties, Tenant shall
pay a percentage of Operating Expenses based on the square footage
of the applicable premises compared to the square footage of the
entire building as specified in Section 1.11 .
Additional Rent commences to accrue upon the Commencement
Date. Operating Expenses payable hereunder for the Operating
Years in which the Term begins and ends shall be prorated to
correspond to that portion of said Operating Years occurring within
the Term. Operating Expenses and any other sums due and
payable under this Lease shall be adjusted (as set forth in
Section 3.3 ) upon receipt of the actual bills therefor, and
the obligations of this Section 3 shall survive the
termination or expiration of the Lease.
3.3.
Payment of Additional Rent
. Landlord shall have the right to reasonably estimate
the Operating Expenses for each Operating Year. Upon
Landlord’s or Agent’s notice to Tenant of such
estimated amount, Tenant shall pay, on the first day of each month
during that Operating Year, an amount (the “ Estimated
Additional Rent ”) equal to the estimate of the Operating
Expenses divided by 12 (or the fractional portion of the Operating
Year remaining at the time Landlord delivers its notice of the
estimated amounts due from Tenant for that Operating Year).
Landlord shall reconcile the Estimated Additional Rent and
Tenant’s actual liability for Operating Expenses for each
Operating Year within sixty (60) days of the conclusion of such
Operating Year. If the aggregate amount of Estimated
Additional Rent actually paid by Tenant during any Operating Year
is less than Tenant’s actual liability for Operating Expenses
for that particular Operating Year, Tenant shall pay the deficiency
within thirty (30) days of Landlord’s written demand
therefor. If the aggregate amount of Estimated Additional
Rent actually paid by Tenant during a given Operating Year exceeds
Tenant’s actual liability for such Operating Year, the excess
shall be credited against the Estimated Additional Rent next due
from Tenant during the immediately subsequent Operating Year,
except that in the event that such excess is paid by Tenant during
the final Lease Year, then upon the expiration of the Term,
Landlord or Agent shall pay Tenant the then-applicable excess
within thirty (30) days of the determination thereof, which
determination shall be made no later than sixty (60) days after
such expiration. Notwithstanding anything contained herein to
the contrary, Landlord shall have no obligation to hire, manage or
arrange for the provision of goods and services in support of
operations at the Premises. Tenant shall be responsible for
negotiating with third parties to provide maintenance or operating
services to the Premises. Notwithstanding anything to the contrary,
in the event that the Property has multiple tenants, Landlord shall
be solely responsible for maintenance and support of the Common
Areas, with costs arising therefrom being included in Operating
Expenses on a pro-rata basis.
4.
USE OF PREMISES AND COMMON
AREA .
4.1.
Use of Premises and Property
. The Premises shall be used by the Tenant for the
purpose set forth in Section 1.7 above and for no other
purpose without the written consent of Landlord, which consent
shall not be unreasonably conditioned, delayed or
withheld.
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Tenant shall have access to the Premises,
Building and Property twenty-four (24) hours a day, seven (7) days
a week and may set its own business hours in its sole
discretion. Tenant shall not, at any time, use or occupy, or
suffer or permit anyone to use or occupy, the Premises, or do or
permit anything to be done in the Premises or the Property, in any
manner that may (a) violate any Certificate of Occupancy for the
Premises or the Property; (b) cause injury to, or in any way impair
the value or proper utilization of, all or any portion of the
Property (including, but not limited to, the structural elements of
the Property) or any equipment, facilities or systems therein; (c)
constitute a violation of the laws and requirements of any
public authority or the rules and regulations of the Property,
including any covenant, condition or restriction affecting the
Property; (d) exceed the load bearing capacity of the floor of the
Premises; (e) impair or tend to impair the character, reputation or
appearance of the Property; or (f) unreasonably and knowingly
annoy, inconvenience or disrupt the operations or tenancies of
other tenants or users of the Property. Landlord hereby
stipulates that as of the Commencement Date, Tenant is in full
compliance with all of the provisions of this Section 4.1
.
4.2.
Signage . Tenant
shall not affix any sign of any size or character to any portion of
the Property, without prior written approval of Landlord, which
approval shall not be unreasonably withheld, conditioned or
delayed. Tenant shall remove all signs of Tenant upon the
expiration or earlier termination of this Lease and immediately
repair any damage to either or both of the Property and the
Premises caused by, or resulting from, such removal. Landlord
hereby stipulates that as of the Commencement Date, Tenant is in
full compliance with all of the provisions of this Section
4.2 .
5.
CONDITION OF
PREMISES .
5.1.
Condition of Premises .
Tenant agrees that Tenant is familiar with the condition of
both the Premises and the Property, and Tenant hereby accepts the
foregoing on an “AS-IS,” “WHERE-IS”
basis. Tenant acknowledges that neither Landlord nor Agent,
nor any representative of Landlord, has made any representation as
to the condition of the foregoing or the suitability of the
foregoing for Tenant’s intended use. Tenant represents
and warrants that Tenant has made its own inspection of the
foregoing. Neither Landlord nor Agent shall be obligated to
make any repairs, replacements or improvements (whether structural
or otherwise) of any kind or nature to the foregoing in connection
with, or in consideration of, this Lease, except as expressly and
specifically set forth in this Lease.
6.
SUBORDINATION;
ATTORNMENT .
6.1.
Subordination and Attornment
. This Lease is and shall be subject and subordinate at
all times to (a) all ground leases or underlying leases that may
now exist or hereafter be executed affecting either or both of the
Premises and the Property and (b) any mortgage or deed of trust
that may now exist or hereafter be placed upon, and encumber, any
or all of (x) the Property; (y) any ground leases or underlying
leases for the benefit of the Property; and (z) all or any portion
of Landlord’s interest or estate in any of said items.
Tenant shall execute and deliver, within ten (10) days of
Landlord’s request, and in the form reasonably requested by
Landlord (or its lender), any documents evidencing the
subordination of this Lease. Tenant hereby covenants and
agrees that Tenant shall attorn to any successor to Landlord;
provided that any Successor Landlord (as defined below) stipulates
and upholds Tenant’s right to
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quiet enjoyment of the Premises, Building and
Property under this Lease and all of such Successor
Landlord’s obligations under the Lease by executing a
Subordination and Non-Disturbance Agreement in a form reasonably
satisfactory to Tenant.
6.2.
Transfer by Landlord .
In the event of a sale or conveyance by Landlord of the
Property, the same shall operate to release Landlord from any
future liability for any of the covenants or conditions, express or
implied, herein contained in favor of Tenant, and in such event
Tenant agrees to look solely to Landlord’s successor in
interest (“ Successor Landlord ”) with respect
thereto and agrees to attorn to such successor; provided that any
Successor Landlord stipulates and upholds Tenant’s right to
quiet enjoyment of the Premises and Property under this Lease and
all of such Successor Landlord’s obligations under the Lease
by executing a Subordination and Non-Disturbance Agreement in a
form reasonably satisfactory to Tenant.
7.
QUIET
ENJOYMENT . Subject to the provisions of this
Lease, including, without limitation, Landlord’s rights under
Section 16 of this Lease, so long as Tenant pays all of the Rent
and performs all of its other obligations hereunder, Tenant shall
not be disturbed in its possession and/or use of the Premises by
Landlord, Agent, Successor Landlord or any other person lawfully
claiming through or under Landlord. This covenant shall be
construed as a covenant running with the Property and is not a
personal covenant of Landlord.
8.
ASSIGNMENT AND SUBLETTING
. Tenant shall not (a) assign (whether directly or
indirectly), in whole or in part, this Lease, or (b) allow this
Lease to be assigned, in whole or in part, by operation of law or
otherwise, including, without limitation, by transfer of a
controlling interest (i.e. greater than a fifty percent (50%)
interest) of stock, membership interests or partnership interests,
or by merger or dissolution, which transfer of a controlling
interest, merger or dissolution shall be deemed an assignment for
purposes of this Lease, or (c) mortgage or pledge the Lease, or (d)
sublet the Premises, in whole or in part, without (in the case of
any or all of (a) through (d) above) the prior written consent of
Landlord, which consent shall not be unreasonably withheld,
conditioned or delayed. Notwithstanding any provision to the
contrary, provided Tenant is not in default under this Lease,
Tenant may assign this Lease or sublet the Premises without
Landlord’s consent: (i) to any corporation or other entity
that controls, is controlled by or is under common control with
Tenant; (ii) to any corporation or other entity resulting from a
merger, acquisition, consolidation or reorganization of or with
Tenant; or (iii) in connection with the sale of all or
substantially all of the assets or the stock of Tenant. In no
event shall any sublease ever release Tenant or any guarantor from
any obligation or liability hereunder. Except as otherwise
provided for herein, any purported assignment, mortgage, transfer,
pledge or sublease made without the prior written consent of
Landlord shall be absolutely null and void. No assignment of
this Lease shall be effective and valid unless and until the
assignee executes and delivers to Landlord any and all
documentation reasonably required by Landlord in order to evidence
assignee’s assumption of all obligations of Tenant
hereunder. Regardless of whether or not an assignee or
sublessee executes and delivers any documentation to Landlord
pursuant to the preceding sentence, any assignee or sublessee shall
be deemed to have automatically attorned to Landlord in the event
of any termination of this Lease. If this Lease is assigned,
or if the Premises (or any part thereof) are sublet or used or
occupied by anyone other than Tenant, whether or not in violation
of this Lease, Landlord or Agent may (without prejudice to, or
waiver of its rights), collect Rent from the assignee, subtenant or
occupant. With respect to the allocable portion of the
Premises sublet, in the event that the total
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rent and any other considerations received
under any sublease by Tenant is greater than (on a pro rata and
proportionate basis) the total Rent required to be paid, from time
to time, under this Lease, Tenant shall pay to Landlord fifty
percent (50%) of such excess as received from any subtenant and
such amount shall be deemed a component of the Additional
Rent.
9.
COMPLIANCE WITH LAWS
.
9.1.
Compliance with Laws .
Tenant shall, at its sole expense (regardless of the cost
thereof), comply with all local, state and federal laws, rules,
regulations and requirements now or hereafter in force and all
judicial and administrative decisions in connection with the
enforcement thereof (collectively, “ Laws ”),
pertaining to either or both of the Premises and Tenant’s use
and occupancy thereof, and including, but not limited to, all Laws
concerning or addressing matters of an environmental nature.
If any license or permit is required for the conduct of
Tenant’s business in the Premises, Tenant, at its expense,
shall procure such license prior to the Commencement Date, and
shall maintain such license or permit in good standing throughout
the Term. Tenant shall give prompt notice to Landlord of any
written notice it receives of the alleged violation of any Law or
requirement of any governmental or administrative authority with
respect to either or both of the Premises and the use or occupation
thereof, except for any alleged violation related solely to
Tenant’s business.
9.2.
Hazardous Materials .
If, at any time or from time to time during the Term (or any
extension thereof), any Hazardous Material (defined below) is
stored, used, treated or disposed of on or in either or both of the
Premises and the Property by, or as a result of any act or omission
of, any or all of Tenant and any or all of Tenant’s Parties
(defined below): (i) Tenant shall, at its own cost, at all times
comply (and cause all others to comply) with all Laws relating to
Hazardous Materials, and Tenant shall further, at its own cost,
obtain and maintain in full force and effect at all times all
permits and other approvals required in connection therewith; (ii)
Tenant shall promptly provide Landlord or Agent with complete
copies of all material communications, permits or agreements with,
from or issued by any governmental authority or agency (federal,
state or local) or any private entity relating in any way to the
presence, release, threat of release, or placement of Hazardous
Materials on or in the Premises or any portion of the Property, or
the generation, transportation, storage, use, treatment, or
disposal on or in the Premises, of any Hazardous Materials; (iii)
Landlord, Agent and their respective agents and employees shall
have the right to either or both (x) enter the Premises and (y)
conduct appropriate tests, at Landlord’s expense, following
twenty-four (24) hours prior written notice and during normal
business hours for the purposes of ascertaining Tenant’s
compliance with all applicable Laws or permits relating in any way
to the storage, use, treatment, disposal or presence of Hazardous
Materials on or in any portion of either or both of the Premises
and the Property; and (iv) upon written request by Landlord or
Agent, no more than once during the Term, or at any time if
Landlord notifies Tenant that Landlord has a reasonable, good faith
belief that Hazardous Materials (other than those customarily used
in diagnostic imaging) have been introduced on the Premises or
Property, Tenant shall cause to be performed, and shall provide
Landlord with the results of, reasonably appropriate tests of air,
water or soil to demonstrate that Tenant has not disposed of
Hazardous Materials thereon. Tenant covenants to investigate,
clean up and otherwise remediate, at Tenant’s sole expense,
any release of Hazardous Materials caused, contributed to, or
created by any or all of (A) Tenant and (B) any or all of
Tenant’s officers, directors, members, managers, partners,
invitees, agents, employees, contractors or
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representatives (“ Tenant
Parties ”) during the Term. All remediation shall
be performed in strict compliance with Laws. As used herein,
the term, “ Hazardous Materials ,” shall mean
any waste, material or substance (whether in the form of liquids,
solids or gases, and whether or not airborne) that is or may be
deemed to be or include a pesticide, petroleum, asbestos,
polychlorinated biphenyl, radioactive material, urea formaldehyde
or any other pollutant or contaminant that is or may be deemed to
be hazardous, toxic, ignitable, reactive, corrosive, dangerous,
harmful or injurious, or that presents a risk to public health or
to the environment, and that is or becomes regulated by any
Law. The undertakings, covenants and obligations imposed on
Tenant under this Section 9.2 shall survive the termination
or expiration of this Lease. Tenant may use, and Landlord
acknowledges and approves of Tenant’s use of, any and all
substances and products customarily used in diagnostic imaging,
which substances and products shall be stored and disposed of in
accordance with all applicable laws and regulations.
10.
INSURANCE .
10.1.
Insurance to be Maintained by
Landlord . Landlord shall maintain: (a) a commercial
property insurance policy covering the Property (at its full
replacement cost), but excluding Tenant’s personal property;
(b) commercial general public liability insurance covering Landlord
for claims arising out of liability for bodily injury, death,
personal injury and property damage occurring in and about the
Property and otherwise resulting from any acts, operations or
omissions of Landlord, its agents and employees; (c) rent loss
insurance; and (d) any other insurance coverage reasonably deemed
appropriate by Landlord or required by Landlord’s
lender. All of the coverages described in (a) through (d)
shall be determined from time to time by Landlord, in its sole
discretion. All insurance maintained by Landlord shall be in
addition to and not in lieu of the insurance required to be
maintained by the Tenant.
10.2.
Insurance to be Maintained by
Tenant . Tenant shall purchase, at its own expense,
and keep in force at all times during this Lease the policies of
insurance, or substantially similar policies of insurance as those,
Tenant currently maintains as of the Commencement Date with respect
to the Premises and Property (collectively, “
Tenant’s Policies ”). Certificates
reflecting such Tenant’s Policies are set forth on Exhibit C
attached hereto.
10.3.
Waiver of Subrogation .
Notwithstanding anything to the contrary in this Lease,
Landlord and Tenant mutually waive their respective rights of
recovery against each other and each other’s officers,
directors, constituent partners, members, agents and employees, and
Tenant further waives such rights against (a) each lessor under any
ground or underlying lease encumbering the Property and (b) each
lender under any mortgage or deed of trust or other lien
encumbering the Property (or any portion thereof or interest
therein), to the extent any loss is insured against or required to
be insured against under this Lease, including, but not limited to,
losses, deductibles or self-insured retentions covered by
Landlord’s or Tenant’s commercial property, general
liability, automobile liability or workers’ compensation
policies described above. This provision is intended to
waive, fully and for the benefit of each party to this Lease, any
and all rights and claims that might give rise to a right of
subrogation by any insurance carrier. Each party shall cause
its respective insurance policy(ies) to be endorsed to evidence
compliance with such waiver.
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11.
ALTERATIONS .
Tenant may, from time to time, at its expense, make alterations or
improvements in and to the Premises (hereinafter collectively
referred to as “ Alterations ”), provided that
Tenant first obtains the written consent of Landlord, which consent
shall not be unreasonably withheld, conditioned or delayed.
Landlord’s consent shall not be required for Alterations that
(i) are not structural in nature, (ii) are not visible from the
exterior of the Building, (iii) do not affect or require
modification of the Building’s electrical, mechanical,
plumbing, HVAC or other systems, and (iv) do not cost more than
$10,000, collectively, during any twelve (12) month period.
All of the following shall apply with respect to all Alterations:
(a) the Alterations are non-structural and the structural integrity
of the Property shall not be affected; (b) the Alterations are to
the interior of the Premises; (c) the proper functioning of the
mechanical, electrical, heating, ventilating, air-conditioning
(“HVAC”), sanitary and other service systems of the
Property shall not be affected; and (d) Tenant shall have
appropriate insurance coverage, reasonably satisfactory to
Landlord, regarding the performance and installation of the
Alterations. Additionally, before proceeding with any
Alterations, Tenant shall (i) at Tenant’s expense, obtain all
necessary governmental permits and certificates for the
commencement and prosecution of Alterations; (ii) if
Landlord’s consent is required for the planned Alteration,
submit to Landlord, for its written approval, working drawings,
plans and specifications and all permits for the work to be done
and Tenant shall not proceed with such Alterations until it has
received Landlord’s approval (if required); (iii) cause those
contractors, materialmen and suppliers engaged to perform the
Alterations to deliver to Landlord certificates of insurance (in a
form reasonably acceptable to Landlord) evidencing policies of
commercial general liability insurance with commercially reasonable
coverages and workers’ compensation insurance; and (iv) cause
those contractors, materialmen and suppliers engaged to perform the
Alterations to execute lien waivers in form and substance
reasonably satisfactory to Landlord, whereby the same shall waive
any and all rights to attach liens against the Premises to collect
payment for services and materials provided therein. Such
insurance policies shall satisfy the obligations imposed under
Section 10.2 . Tenant shall cause the Alterations to be
performed in compliance with all applicable permits, Laws and
requirements of public authorities, and with Landlord’s
reasonable rules and regulations or any other restrictions that
Landlord may reasonably impose on the Alterations. Tenant
shall cause the Alterations to be diligently performed in a good
and workmanlike manner, using new materials and equipment at least
equal in quality and class to the standards for the Property
established by Landlord. With respect to any and all
Alterations for which Landlord’s consent is required, Tenant
shall provide Landlord with “as-built” plans, copies of
all construction contracts, governmental permits and certificates
and proof of payment for all labor and materials, including,
without limitation, copies of paid invoices and final lien
waivers. If Landlord’s consent to any Alterations is
required, and Landlord provides that consent, then at the time
Landlord so consents, Landlord shall also advise Tenant whether or
not Landlord shall require that Tenant remove such Alterations at
the expiration or termination of this Lease. If Landlord
requires Tenant to remove the Alterations, then, during the
remainder of the Term, Tenant shall be responsible for the
maintenance of appropriate commercial property insurance (pursuant
to Section 10.2) therefor; however, if Landlord shall not
require that Tenant remove the Alterations, such Alterations shall
constitute Landlord’s Property and Landlord shall be
responsible for the insurance thereof, pursuant to Section
10.1 . Landlord hereby stipulates that as of the
Commencement Date, Tenant is in full compliance with all of the
provisions of this Section 11 , and none of the Alterations
(or any replacement thereof) previously completed within the
Premises or Property are required to be
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removed upon the expiration or termination of
this Lease. In no event and under no circumstance
shall any of Tenant’s diagnostic imaging equipment be
considered or deemed to be an Alteration.
12.
LANDLORD’S AND
TENANT’S PROPERTY . All improvements and
appurtenances attached to, or built into, the Premises at the
commencement of, or during the Term, whether or not placed there by
or at the expense of Tenant, shall become and remain a part of the
Premises; shall be deemed the property of Landlord (the “
Landlord’s Property ”), without compensation or
credit to Tenant; and shall not be removed by Tenant at the
Expiration Date unless Landlord, as permitted by this Lease,
requires their removal (including, but not limited to, Alterations
pursuant to Section 11 ); provided, that, Tenant’s
diagnostic imaging equipment shall at all times remain
Tenant’s personal property and at no time under any
circumstances (even if built into or attached to the Premises)
shall such equipment be deemed, or become, Landlord’s
Property. In no event shall Tenant remove any of the
following materials or equipment without Landlord’s prior
written consent (which consent may be given or withheld in
Landlord’s sole discretion): any power wiring or power
panels, lighting or lighting fixtures, wall or window coverings,
carpets or other floor coverings, heaters, air conditioners or any
other HVAC equipment, fencing or security gates, or other similar
building operating equipment and decorations. At or before
the Expiration Date, or the date of any earlier termination,
Tenant, at its expense, shall remove from the Premises all of
Tenant’s personal property and any Alterations that Landlord
requires be removed pursuant to Section 11 ; Tenant shall
repair (to Landlord’s reasonable satisfaction) any damage to
the Premises or the Property resulting from either or both such
installation and removal; and Tenant shall restore the Premises to
a “broom clean” condition. Any other items of
Tenant’s personal property (other than diagnostic imaging
equipment) that remain in the Premises after the Expiration Date,
or following an earlier termination date, may, after Landlord
provides Tenant with thirty (30) days prior written notice, at the
option of Landlord, be deemed to have been abandoned, and in such
case, such items may be retained by Landlord as its property or be
disposed of by Landlord, in Landlord’s sole and absolute
discretion and without accountability, at Tenant’s
expense.
13.
REPAIRS AND
MAINTENANCE.
13.1.
Tenant Repairs and
Maintenance .
13.1.1
Tenant Responsibilities
. Except for events of damage, destruction or casualty to the
Premises or Property (which are addressed in Section 18 ),
throughout the Term, Tenant shall, at its sole cost and expense:
(i) both (x) maintain and preserve, in the same condition as exists
on the Commencement Date, subject to normal and customary wear and
tear (the “ Same Condition ”), and (y) perform
any and all repairs required in order to so maintain and preserve,
in the Same Condition, the Premises and the fixtures and
appurtenances therein (including, but not limited to, the
Premises’ plumbing and HVAC systems (only in the event that
Tenant is the sole tenant in the Property), all doors, overhead or
otherwise, glass and levelers located in the Premises or otherwise
available in the Property for Tenant’s sole use; and
excluding, however, only those specific components of the Premises
for which Landlord is expressly responsible under Section
13.2 or another tenant is responsible for); and (ii) maintain,
in full force and effect, a preventative maintenance and service
contract with a reputable service provider for maintenance of the
HVAC systems of the Premises (the “ HVAC
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Maintenance
Contract ”). In addition to Tenant’s
obligations under (i) and (ii) above, Tenant shall also be
responsible for all costs and expenses incurred to perform any and
all repairs and replacements (whether structural or non-structural;
interior or exterior; and ordinary or extraordinary), in and to the
Premises and the Property and the facilities and systems thereof,
if and to the extent that the need for such repairs or replacements
arises directly from any act, omission, misuse, or neglect of any
or all of Tenant, any of its subtenants or Tenant’s Parties
utilizing all or any portion of the Premises for any reason or
purpose whatsoever, including, but not limited to (a) the
performance or existence of any Alterations, (b) the installation,
use or operation of Tenant’s personal property in the
Premises; and (c) the moving of Tenant’s personal property in
or out of the Property (collectively, “ Tenant-Related
Repairs ”). All such repairs or replacements
required under this Section 13.1.1 shall be subject to the
reasonable supervision and control of Landlord, and all repairs and
replacements shall be made with materials of equal or better
quality than the items being repaired or replaced.
13.2.
Landlord Repairs .
Notwithstanding anything to the contrary stated herein, Landlord
shall repair, replace and restore the foundation, exterior and
interior load-bearing walls, roof structure and roof covering of
the Property and any Common Areas in multi-tenant properties;
provided, however, that: (i) all costs and expenses so incurred by
Landlord to repair and replace the above items shall constitute
Operating Expenses; provided, however, that with respect to any
costs incurred in the replacement context, those costs shall not
constitute an Operating Expense except to the extent that such
costs so qualify under Section 3.1.1(iv) ; and (ii)
notwithstanding (i) above, in the event that any such repair and
replacement is a Tenant-Related Repair, then Tenant shall be
required to reimburse Landlord for all costs and expenses that
Landlord reasonably incurs in order to perform such Tenant-Related
Repair, and such reimbursement shall be paid, in full, within ten
(10) days after Landlord’s delivery of demand therefor.
14.
UTILITIES
. Tenant shall purchase all utility services and shall
provide for scavenger, cleaning and extermination services.
As provided in Section 3.1.1. above, utility charges may be
included within Operating Expenses; nevertheless, at
Landlord’s election or with Landlord’s consent, (a)
Tenant may pay the utility charges for its Premises directly to the
utility or municipality providing such service, and in that event
all charges shall be paid by Tenant before they become delinquent;
and (b) Landlord may directly bill Tenant for its utility expenses
when and as such expenses are incurred, and in such event, such
utilities shall not be included in Operating Expense
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