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EXHIBIT 10.3
LEASE AGREEMENT
THIS LEASE AGREEMENT (Lease) is entered into this 22nd day of January, 1999, by
and between 000XX XXXXX XXXXXXXX XXXX L.P., a Utah Limited Partnership,
hereinafter referred to as LANDLORD, and XXXXXXXXXX.XXX, INC., A Delaware
Corporation, hereinafter referred to as TENANT.
W I T N E S S E T H:
WHEREAS, this Lease relates to a six story office building located at
00000 Xxxxx Xxxxxx Xxxxxxx (000 Xxxx), Xxxxx Xxxxxx Xxxx, Xxxx Xxxx Xxxxxx, Xxxx
00000; and
WHEREAS, LANDLORD and TENANT are desirous of entering into this
Lease.
NOW, THEREFORE, for and in consideration of the mutual promises and
provisions herein contained and for other good and valuable consideration the
receipt and sufficiency whereof are hereby acknowledged, the parties mutually
certify and agree to the following terms and conditions:
1. OPERATIVE FACTS. This Agreement (hereafter referred to as the
"Lease") is made with respect to the following salient facts and definitions:
1.1 Premises & Preparation.
1.1.1 LANDLORD does hereby lease to TENANT and TENANT hereby leases
from LANDLORD, that certain office space commonly known as Suite 550, as
indicated on Exhibit "A" attached and by this reference made a part hereof
(herein called "Premises"), said Premises being agreed, for the purpose of this
Lease, to have a net useable area of 2,993 square feet and a net rentable area
of 3,521 square feet and being situated on the 5th floor of that certain
building known as Towers Phase II 6 story office building at 00000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx Xxxxxx, Xxxx (hereinafter referred to as the "Building.") Net
rentable area is defined as the net useable area plus a 15% building load factor
for common areas and is calculated by dividing the net useable area by .85. Said
Lease is subject to the terms, covenants and conditions herein set forth and the
TENANT covenants, as a material part of the consideration for this Lease, to
keep and perform each and all of said terms, covenants and conditions by it to
be kept and performed and that this Lease is made upon the condition of said
performance.
1.1.2 The respective obligations, if any, of LANDLORD and TENANT to
perform the work and supply the necessary materials and labor to prepare the
Premises for occupancy by TENANT are described in detail on Exhibit "B" attached
hereto and by this reference made a part hereof. LANDLORD and TENANT shall
expend all funds and do all acts required of them
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as described on Exhibit "B" and shall perform or have such work promptly and
diligently completed in a first-class and workmanlike manner.
1.1.3 LANDLORD and TENANT shall complete the work required of each
party, as specified in Exhibit "B" as soon as reasonably possible.
Notwithstanding anything to the contrary contained in this Lease, upon occupancy
of the Premises by Tenant, all of the obligations of LANDLORD set forth in
Exhibit "B" shall be deemed to be satisfactory completed, "Punch List" items
excepted. "Punch List" items are defined as being minor construction defects or
incomplete work, the non-completion of which will not materially interfere with
the use of the Premises.
1.2 Term. Five (5) Lease years.
1.3 Projected Commencement Date. April 15, 1999.
1.4 Basic Monthly Rent. Five Thousand, Five Hundred Seventy-Four
Dollars and 92 Cents ($5,574.92). Basic monthly rent is calculated at the Lease
rate of $19.00 per square foot (annual) times the net rentable square foot of
the Premises adjusted to the monthly payment. Net rentable size of the Premises
includes a 15% common area load factor.
1.4.1 LANDLORD has agreed to alter the monthly Lease payment
referenced in 1.4 above by reducing the monthly payment amount to
$4,574.92 for the first 24 months of the Lease Term and increasing
the monthly payment amount to $6,241.59 for the remaining 36 months
of the Lease Term. Notwithstanding the alternation of the payment
schedule provided in this Section 1.4.1 Consumer Price Index
adjustments, if any, as provided in Section 4.3 shall be based on the
basic monthly rent as provided for in Section 1.4.
1.5 LANDLORD's Operating Expenses. LANDLORD'S share of Operating
Expenses is computed by multiplying the number of net rentable square feet
applicable to the Premises by $5.00 per square foot.
1.6 TENANT'S Operating Expenses. TENANT'S share of Operating Expenses
shall be computed pursuant to Subsection 5.1.4.
1.7 Security Deposit. Security Deposit means an amount equal to Four
Thousand, Five Hundred Seventy-Two Dollars and Ninety-Two Cents ($4,572.92).
2. PARKING. The Building shall have uncovered parking spaces.
Approximately five percent (5%) of these spaces will be reserved for visitor
parking with thirty (30) minute time limits, a minimum of four (4) spaces shall
be reserved for handicap parking and up to sixty (60) spaces shall be available
as reserve parking at a reasonable monthly fee. The remaining parking spaces
shall be available to all TENANTS on a "first-come-first-serve" basis and shall
be at no cost to TENANT or other TENANTS.
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2.1 LANDLORD, or its agents (if LANDLORD has delegated such
privileges) shall have the right to cause to be removed any cars of TENANT, its
employees or agents that are parked in violation hereof or in violation of the
rules and regulations of the Building, without liability of any kind to TENANT,
its agents or employees, and TENANT agrees to hold LANDLORD harmless from and
defend it against any and all claims, losses, or damages and demands asserted or
arising in respect to or in connection with the removal of any such automobiles
as aforesaid. TENANT shall from time to time, upon request of LANDLORD, supply
LANDLORD with a list of license plate numbers of all automobiles owned by its
employees or agents who are to have parking privileges hereunder. LANDLORD may,
as part of the regulations promulgated by it for use of the parking areas
require than TENANT cause an identification sticker issued by LANDLORD to be
affixed to the bumpers or other designated location of all automobiles of TENANT
and its employees or agents who are authorized to park in the parking areas.
2.2 Parking Privileges. In addition to the parking on the building
site TENANT shall have parking privileges on the following adjacent properties:
Country Inn & Suites Hotel, Francesco's Restaurant, and Reel Theaters. Parking
privileges for the Building and for the adjacent properties provide for parking
on a first come first serve basis and are further regulated as provided for in
Section 22.4 of the Lease.
3. TERM.
3.1 Length of Term. The initial term of this Lease shall be for the
period defined as the Term, plus the partial calendar month, if any, occurring
after the Actual Commencement Date (as hereinafter defined) if the Actual
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 after the Actual
Commencement Date.
3.2 Actual Commencement Date. The actual commencement date (Actual
Commencement Date) of the Term shall be the earliest of the following dates:
3.2.1 The date on which the Premises are ready for Occupancy
as outlined in Exhibit "B" hereto;
3.2.2 The date on which the Premises would have been Ready for
Occupancy had there been no delay due to changes in the Final Plans
requested by TENANT, if any; or
3.2.3 The date TENANT, with prior written consent of LANDLORD,
actually commences to do business on the Premises.
3.3 Acknowledgment of Actual Commencement Date. Within five
(5) days after LANDLORD'S or TENANT'S request to do so, LANDLORD and
TENANT shall execute a written acknowledgment of the Actual
Commencement Date, which acknowledgment shall be deemed to be part of
this Lease.
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4. MONTHLY RENT.
4.1 Basic Monthly Rent. TENANT agrees to pay LANDLORD, at 00000 Xxxxx
Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxx Xxxxxx, Xxxx 00000 or at such other address
designated by LANDLORD, the Basic Monthly Rent, without prior demand therefor,
without offset or deduction and in advance before the end of first day of each
calendar month during the Term, commencing on the Actual Commencement Date.
TENANT shall thereafter, subject to any C.P.I. or any other adjustment contained
in the Lease, pay the amount of $5,574.92 in monthly lease payments until the
expiration of the Lease term. In the event the Actual Commencement Date occurs
on a day other than the first day of a calendar month, then the Basic Monthly
Rent to be paid on the first day rent is due shall include both the Basic
Monthly Rent for the first full calendar month occurring after the first day
rent is due, plus the Basic Monthly Rent for the initial fractional calendar
month prorated on a per-diem basis (based upon a thirty (30) day month).
4.2 Additional Rent. All charges required to be paid by TENANT
hereunder, including, without limitation, payments for Operating Expenses, and
any other amounts payable hereunder, shall be considered additional rent for the
purposes of this lease (Additional Rent), and TENANT shall pay Additional Rent
upon written demand by LANDLORD with reasonable justification or otherwise as
provided in this lease.
4.3 Consumer Price Index Escalation.
4.3.1 TENANT'S Basic Monthly Rent shall be increased on the
first year anniversary of the first day of the first full calendar
month of the lease Term and on each anniversary thereafter, to the
product obtained by multiplying the Initial Basic Monthly Rent in the
amount of $5,574.92 by a fraction, the numerator of which is the
Consumer Price Index as of the first anniversary of the first day of
the first full calendar month of the Term, (or each subsequent
anniversary for each subsequent year) and the denominator of which is
the Consumer Price Index as of the second anniversary of the first
day of the first full calendar month of this Lease. Rent increases in
any one Lease year as a result of an adjustment as provided for in
this Section 4.3 shall not exceed 3% of the previous years annual
rent amount. In no event shall TENANT'S Basic Monthly Rent ever be
decreased as a result of this subsection 4.3.
4.3.2 Consumer Price Index shall mean Consumer Price Index -
Adjusted U.S. City Average for All Items For All Urban Consumers
(1982-84=100) published monthly in the Monthly Labor Review by the
Bureau of Labor Statistics of the United States Department of Labor.
5. TENANT'S RESPONSIBILITY FOR OPERATING EXPENSES.
5.1 Definitions. The following words and phrases shall have the meanings
set forth below:
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5.1.1 Operating Year means each calendar year ending during the
Term and the calendar year ending immediately following the last day of
the Term.
5.1.2 Operating Expenses means all actual costs and expenses
incurred by LANDLORD in connection with the ownership, operation,
management and maintenance of the Building and the Property and the
related improvements located thereon (the Improvements), including, but
not limited to, all 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) other than the
performance by LANDLORD of its construction obligations under Section 1
hereof or similar provisions of leases within other TENANT spaces. In
explanation of the foregoing, and not in limitation thereof Operating
Expenses shall include (except as set forth in Subsection 8.6 hereof)
all fees, costs and expenses incurred by LANDLORD relating to the
following: all real and personal property taxes and assessments whether
general or special 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 and trash removal,
utilities, supplies, public liability and fire insurance with extended
coverage, licenses, permits and inspection, legal fees incurred with
respect to enforcing rules and regulations of the building and
evictions, accounting fees relating to operations of the Building,
services of independent contractors, reasonable fees and expenses
incurred in property management, including, without limitation,
compensation, employment taxes and fringe benefits of all persons who
perform regular and recurring duties connected with day-to-day
operation, maintenance and repair of the Building, its equipment and the
adjacent parking area, driveways, walks and landscaped areas, including
without limitation janitorial, scavenger, gardening, security, parking
(whether underground, on the surface or in an elevated ramp), elevator,
painting, plumbing, electrical, carpentry, heating, ventilation,
air-conditioning, window washing, signing, but excluding persons
performing services not uniformly available to or performed for
substantially all TENANTS of the Building; rental or a reasonable
allowance for depreciation of personal property used in the maintenance,
operation and repair of the Building. All Operating Expenses shall be
computed on an annual basis. Operating Expenses shall not include
depreciation on the Building and the Improvements, income taxes of
LANDLORD, costs specifically charged to and recovered from other
TENANTS, insurance and condemnation proceeds, costs for corrections of
defects in the original construction of the Building, lease commissions
pertaining to the initial rental of office space in the Building,
capital additions to the Building or amounts paid toward principal or
interest on loans to LANDLORD. The foregoing sentence notwithstanding,
if LANDLORD incurs any cost in making capital improvements or structural
repairs to the Building or Property to effect labor savings, reduce
Operating Expenses or comply with any law, ordinance, rule or regulation
of a governmental or quasi-governmental authority, after the Actual
Commencement Date, such costs shall be amortized over the useful life of
the capital improvement or structural repair as an Operating Expense.
5.1.3 Estimated Operating Expenses means the projected amount of
Operating Expenses for any given Operating Year as estimated by
LANDLORD, in its sole discretion.
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5.1.4 During the term of this lease, TENANT'S share of Operating
Expenses for a calendar year shall be the amount in excess of $5.00 per
net rentable square foot applicable to the Premises.
5.1.5 TENANT'S Share of Operating Expenses for any fractional
calendar year shall be calculated by determining TENANT'S share of
Operating Expenses for the relevant calendar year and then prorating
such amount over the fractional period of such calendar year.
5.1.6 TENANT'S Share of Estimated Operating Expenses for a
calendar year means Operating Expenses reasonably estimated by LANDLORD
to be in excess of $5.00 per net rentable square foot applicable to the
Premises, subject to the limitation set forth in paragraph 5.1.4.
5.1.7 TENANT'S share of Estimated Operating Expenses for any
fractional calendar year shall be calculated by determining TENANT'S
Share of Estimated Operating Expenses for the relevant calendar year and
then prorating amount over the fractional period of such calendar year.
5.1.8. TENANT'S share of operating expenses for the first full
calendar year and any fraction thereof shall be determined as provided
for herein. Thereafter, TENANT'S operating expenses shall be limited to
a maximum increase each calendar year of .50 per net rentable square
feet of Premises.
5.2 Statement of Operating Expenses and Estimated Operating Expenses.
5.2.1 Within One Hundred Twenty (120) days after the expiration
of any Operating Year, LANDLORD shall furnish TENANT with a written
statement showing in reasonable detail the computation of TENANT'S Share
of Operating Expenses if any, for such year and the amount by which such
amount exceeds or is less than the amounts paid by TENANT during such
year pursuant to Subsection 5.1.2.
5.2.2 LANDLORD, in its sole discretion, may also furnish TENANT
from time to time, written statements showing in reasonable detail the
computation of TENANT'S Share of Estimated Operating Expenses.
5.3 Payment of Additional Rent. TENANT shall pay as additional rent
(Additional Rent) the following amounts at the times indicated:
5.3.1 Within thirty (30) days after delivery of the written
statement referred to in Subsection 5.2.1 hereof, TENANT shall pay to
LANDLORD, without offset or deduction, the amount by which TENANT'S
Share of Operating Expenses, as specified in such written statement,
exceeds the amount of Estimated Operating Expenses actually paid by
TENANT for the year at issue. Payments by TENANT shall be made pursuant
to this Subsection 5.3.1 notwithstanding that a statement pursuant to
subsection 5.2.1 is furnished to TENANT after the expiration of the
Term.
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5.3.2 With each payment of Basic Monthly Rent made pursuant to
Section 4 hereof, TENANT shall pay to LANDLORD, without offset or
deduction, one-twelfth (1/12th) of TENANT'S Share of Estimated Operating
Expenses as specified in the last written statement delivered to TENANT
pursuant to Subsection 5.2.2.
5.3.3 If the written statement delivered pursuant to Subsection
5.2.1 indicates that the amount actually paid by TENANT pursuant to
subsection 5.3.1 for any year exceeds TENANT'S Share of Operating
Expenses for the same year, LANDLORD, at its election, may either (i)
pay the amount of such excess to TENANT or (ii) apply such excess
against any amount payable by TENANT.
5.3.4 No failure by LANDLORD to require the payment of Additional
Rent by TENANT for any period shall constitute a waiver of LANDLORD'S
right to collect such Additional Rent for such period or for any
subsequent period.
5.4 Resolution of Disagreement. Every statement given by LANDLORD
pursuant to Subsection 5.2 hereof shall be conclusive and binding upon TENANT
unless within thirty (30) days after the receipt of such statement TENANT
notifies LANDLORD in writing that it disputes the correctness thereof,
specifying the particular respects in which the statement is claimed to be
incorrect. Pending the determination of such dispute by agreement between
LANDLORD and TENANT, TENANT shall, within thirty (30) days after receipt of such
statement, pay Additional Rent in accordance with LANDLORD'S statement, and such
payment shall be without prejudice to TENANT'S position. If the dispute shall be
determined in TENANT'S favor, LANDLORD shall forthwith apply the amount of
TENANT'S overpayment of rents resulting from compliance with LANDLORD'S
statement, without interest being due thereon, in accordance with Subsection
5.3.3 hereof. LANDLORD agrees to grant to an independent certified public
accountant retained by TENANT reasonable access to LANDLORD'S books and records
for the purpose of verifying Operating Expenses incurred by LANDLORD, at
TENANT'S sole expense.
5.5 Limitation. Nothing contained in this Section 5 shall be construed
so as to reduce the installments of Basic Monthly Rent payable hereunder below
the amount set forth in Section 1.
6. SECURITY DEPOSIT. Upon execution of this lease, TENANT will deposit
the security deposit with LANDLORD as security for the full, faithful, and
timely performance of every provision of this lease to be performed by TENANT.
If TENANT defaults with respect to any provision of this lease, including but
not limited to the provisions relating to the payment of rent, LANDLORD may use,
apply, or retain all or any part of the security deposit for the payment of any
rent, or any other sum in default, or for the payment of any other amount
LANDLORD may spend or become obligated to spend by reason of TENANT'S default,
or to compensate LANDLORD for any other loss or damage LANDLORD may suffer by
reason of TENANT'S default. If any portion of the security deposit is so used,
applied, or retained, TENANT will within 5 days after written demand deposit
cash with LANDLORD in an amount sufficient to restore the security deposit to
its original amount. LANDLORD will not be required to keep the security deposit
separate from its general funds, and TENANT will not be entitled to interest on
the security deposit. The security deposit will not be deemed a limitation on
LANDLORD'S damages or a payment of liquidated damages or a payment of the
monthly rent due for the last month of the term. If TENANT fully, faithfully,
and timely performs every provision of this
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lease to be performed by it, the security deposit or any balance of the security
deposit will be returned to TENANT within 30 days after the expiration of the
term. LANDLORD may deliver the funds deposited under this lease by TENANT to the
purchaser of the building in the event the building is sold, and after such time
LANDLORD will have no further liability to TENANT with respect to the security
deposit.
7. USE.
7.1 Use of Premises. TENANT shall not use or permit the Premises or any
part thereof to be used for any purpose other than for general office purposes.
7.2 Prohibition of Certain Activities or Uses.
7.2.1 TENANT shall not do or permit anything to be done in the
Building or on the Land which may:
7.2.1.1 Increase the existing rate or violate the
provisions of any insurance carried with respect to the Building
or any contents of such Building.
7.2.1.2 Create any public or private nuisance, commit
waste, or disturb the quiet enjoyment of any other occupant of
the Building.
7.2.1.3 Violate any present or future law, ordinance,
regulation or requirement of any governmental authority or any
restriction or covenant existing with respect to the Premises or
Building or Land whereon it is located.
7.2.1.4 Overload the floors or otherwise damage the
structure of the Building.
7.2.1.5 Constitute an immoral or illegal purpose.
7.2.1.6 Increase the cost of electricity, natural gas or
other utility service beyond that level permitted below by
Section 8.
7.2.1.7 Subject LANDLORD or any other TENANT to any
liability to any third party.
7.2.2 TENANT shall not bring into or permit the placing
within the Premises of any machine, personal property or fixture
heavier than customarily used in connection with general office
purposes.
7.2.3 Subject to the provisions of Paragraph 23, Exhibit B
or Exhibit F, TENANT shall not place any holes in any part of the
Premises or place any exterior signs or interior drapes, blinds
or similar items visible from outside the Premises or the
Building without prior written consent of LANDLORD.
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7.3 Affirmative Obligations with Respect to Use. TENANT shall, at its
sole cost and expense:
7.3.1 Comply with all present and future governmental laws,
ordinances, regulations and requirements in its occupancy of the
Premises.
7.3.2 Comply with the requirements of any board of fire
underwriters or other similar body relating to the Premises, excluding
structural changes not caused by the Improvements or the nature of
TENANT'S occupancy of the Premises.
7.3.3 Keep the Premises in a clean and orderly condition, free of
objectional noises, odors or nuisances subject to LANDLORD'S janitorial
service requirements.
7.4 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 Premises or any other portion of the Building or
Improvements, nor has LANDLORD agreed to undertake any modification, alteration
or improvement thereof. Specifically, but not in limitation of the foregoing, no
representation has been made or relied upon concerning the suitability of the
Premises or any other portion of the Building or Improvements for the conduct of
TENANT'S business. As to matters that are identifiable by visual inspection, the
Premises, Building and Improvements (and each and every part thereof) shall be
deemed to be in satisfactory condition unless, on or before the Actual
Commencement Date, TENANT shall give LANDLORD written notice specifying, in
reasonable detail, the respects in which the Premises, Building or Improvements
are not in satisfactory condition.
7.5 Taxes. Notwithstanding Subsection 5.1.2 or any other Lease
provision, TENANT shall have sole responsibility for and shall pay all taxes,
assessments, charges and fees which during the Term may be imposed, assessed or
levied by any governmental or public authority against or upon TENANT, TENANT'S
use of the Premises or any personal property or fixture kept or installed
therein by TENANT.
8. UTILITIES AND SERVICE.
8.1 Obligations of LANDLORD. During the Term of this lease, subject to
the limitation in Subsection 8.6, and so long as TENANT is not in material
default under this lease, LANDLORD agrees to cause to be furnished to the
Premises during customary business hours and during generally recognized
business days, in such manner as is customary in similar buildings in the same
geographical areas, as determined by LANDLORD, the following utilities and
services (the cost of which shall be included within Operating Expenses):
8.1.1 Electricity, water, gas and sewer service shall be provided
to TENANT'S Premises 24 hours per day.
8.1.2 Telephone connection to the core space on the ground floor
of the building but not including wiring from the core or telephone
stations and equipment (it being expressly understood and agreed that
TENANT shall be responsible for the ordering,
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installation, and cost of telephone lines and equipment from the ground
floor telephone room.
8.1.3 Snow and trash removal service.
8.1.4 Landscaping and grounds-keeping service.
8.1.5 Elevator service 24 hours per day.
8.1.6 Reasonable daily janitorial service, weekends and holidays
excluded; provided, that if TENANT'S floor covering or other
improvements are other than standard for the Building, TENANT shall pay
the additional cleaning costs, if any, attributable thereto as
Additional Rent upon presentation of a written statement relating
thereto by LANDLORD.
8.1.7 Heating, overheat lighting, ventilation and air
conditioning reasonably necessary for the comfortable use and occupancy
of the Premises during customary business hours. For purposes of this
Subsection, customary business hours shall be from 7:00 a.m. to 6:00 pm,
Monday through Friday, and from 7:30 a.m. to 12:00 noon on Saturday,
excluding legal holidays.
8.1.8 Window washing of the exterior windows; not more than three
times or less than 1 time per annum.
8.2 Additional Services. LANDLORD shall have no obligation to provide
utilities, overhead lighting, heating, air conditioning and/or cleaning services
to TENANT beyond the standard services set forth in Subsection 8.1 above, or at
times other than during the Business Hours, as defined in the Rules and
Regulations, but if LANDLORD elects to provide such additional services at
TENANT'S request, TENANT shall pay LANDLORD's reasonable charge for such special
services as Additional rent.
8.3 Utilities Consumption. TENANT shall not, without the prior written
consent of LANDLORD, use any apparatus or device in the Premises which will in
any way increase the amount of gas, electricity or water usually furnished or
supplied for use of the Premises as general office space; nor connect with
electric current, except through existing electrical outlets in the Premises, or
water pipes or gas outlets, any apparatus or device for the purposes of using
gas, electrical current or water. If TENANT shall require water or electric
current or any other service in excess of that usually furnished or supplied for
use on the Premises as general office space, TENANT shall first obtain the prior
written consent of LANDLORD, which LANDLORD will not unreasonably withhold, for
the use thereof, and LANDLORD may cause a special meter to be installed in the
Premises so as to measure the amount of water, electric current or other service
consumed. The cost of any such meters and of installation, maintenance, and
repair thereof shall be paid for by TENANT, and TENANT agrees to pay LANDLORD
promptly upon demand by LANDLORD for all such water, electric current or other
service consumed, as shown by said meters, at rates charged by the local public
utility furnishing the same, plus any additional expense incurred in keeping
account of the water, electric current or other service so consumed. In each
such case, the costs for administering such methods shall be borne by TENANT.
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8.3.1. Computer Room Utilities. Computer room utilities including
air conditioning shall be maintained on a 24 hour basis, and will be
separately metered for after hours usage. TENANT shall pay as
"Additional Rent" the actual cost of after hours utility consumption for
the computer room. All other after hours utility consumption shall be
monitored and paid for as referenced in Section 8.5 below.
8.4 TENANT'S Obligations. TENANT shall arrange and pay for, prior to
delinquency, the entire cost and expense of all telephone wiring from the first
floor telephone closet to Premises. Telephone stations, and phone equipment,
wiring inside the Premises, use charges, and all other communication materials
and services shall be provided and paid for by TENANT.
8.5 Non Business Hour HVAC and Overhead Lighting. LANDLORD shall provide
TENANT, at TENANT'S request, with heat and air conditioning and overhead
lighting outside the customary Business hours, as defined in the Rules and
Regulations, at the rate of Twenty Dollars ($20.00) per hour. LANDLORD shall
determine the amount of such usage during Non Business Hours by the installation
of a separate time meter or other measuring device. LANDLORD shall deliver to
TENANT a statement (Statement), on a monthly basis, of TENANT'S Non Business
Hours use of heat and air conditioning and overhead lighting for the previous
month. TENANT shall pay the amount owing to LANDLORD as set forth in the
Statement, as Additional Rent, within five (5) days after TENANT'S receipt of
the Statement. If the HVAC or lighting System of the Building is modified or
LANDLORD'S operating costs change and as a result of such modification or change
LANDLORD offers a rate for after hours usage lower or higher than Twenty Dollars
($20.00) per hour to the Building in general, LANDLORD shall accept, and TENANT
shall pay, such lower or higher amount. Notwithstanding the foregoing, LANDLORD
shall have no obligation to provide TENANT with heat and air conditioning and
overhead lighting during Non Business Hours if a material Event of Default
exists under this Lease.
8.6 Limitation on LANDLORD'S Liability. LANDLORD shall not be liable for
and TENANT shall not be entitled to terminate this Lease, to effectuate any
abatement or reduction of rent or to collect any damages by reason of LANDLORD'S
failure to provide or furnish any of the utilities or services set forth in
Subsection 8 hereof if such failure was occasioned by any strike or labor
controversy, any act or default of TENANT, the inability of LANDLORD to obtain
services from the company supplying the same or any cause beyond the reasonable
control of LANDLORD; provided, however, that if such delay or service
interruption continues for a period in excess of ten (10) consecutive days or
for ten (10) days in a twenty (20) day period, and such delay or interruption
renders the Premises or any portion thereof untenantable for TENANT'S normal
business operations, the rent shall thereafter be abated in proportion to the
unusable portion of the Premises for the period of such non-usability. In no
event shall LANDLORD be liable for loss or injury to persons or property,
however arising, occurring in connection with or attributable to any failure to
furnish such utilities or services even if within the control of LANDLORD.
9. MAINTENANCE AND REPAIRS; ALTERATIONS; ACCESS.
9.1 Maintenance and Repairs by LANDLORD. LANDLORD as part of operating
expense shall maintain in good order, condition and repair the Building, the
Common Areas and
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the Improvements, excluding the Premises and those other portions of the
Building leased, rented or otherwise occupied by persons not affiliated with
LANDLORD. LANDLORD shall supply and pay for regular janitorial and cleaning
services reasonably required, exclusive of weekends and holidays, to keep the
Building and Improvements in a clean, sanitary and orderly condition, the cost
and expense of which shall be included in Operating Expenses.
9.2 Maintenance and Repairs by TENANT. Subject to LANDLORD'S obligation
to provide janitorial service, TENANT shall maintain the Premises in good order,
condition and repair, reasonable wear and tear excepted, including without
limitation, the following: electric light bulbs (but not including fluorescent
lights and ballasts used in overhead fixtures originally installed in the
Premises, which LANDLORD shall maintain and replace as necessary); the interior
surfaces of the ceilings, walls, interior windows; and all equipment and
fixtures installed by TENANT. In the event that TENANT fails to maintain the
Premises in good order, condition and repair, LANDLORD shall give TENANT notice
to do such acts as are reasonably required to so maintain the Premises. In the
event that TENANT fails to promptly commence such work and diligently prosecute
it to completion, LANDLORD shall have the right to do such acts and expend such
funds at the expense of TENANT as are reasonably required to perform such work.
Any amount so expended by LANDLORD shall be paid by TENANT promptly upon demand
therefor with interest thereon from the date of such expenditure at the greater
of the prime or base rate then charged by Zions First National Bank of Utah,
N.A. plus two percent (2%) or eighteen percent (18%) per annum (the Interest
Rate). LANDLORD shall have no liability to TENANT for any damage, inconvenience
or interference with the use of the Premises by TENANT as a result of performing
any such work.
9.3 Alterations.
9.3.1 General.
9.3.1.1 During the term, TENANT will not make or allow to
be made any alterations, additions, or improvements to or of the
premises or any part of the premises, or attach any fixtures or
equipment to the premises, without first obtaining LANDLORD'S
written consent. All such alterations, additions, and
improvements consented to by LANDLORD, and capital improvements
that are required to be made to the project as a result of the
nature of TENANT'S use of the premise shall:
9.3.1.1.1 Be performed by contractors approved by LANDLORD
and subject to conditions specified by LANDLORD (which may
include requiring the posting of a mechanic's or materialmen's
xxxx xxxx,) certificates issued by applicable insurance companies
evidencing that workmen's compensation, personal injury liability
and property damage insurance are in force and effect and are
maintained by all contractors and subcontractors); and,
9.3.1.1.2 Conform to the applicable building codes, A.D.A.
and any applicable fire codes; and,
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9.3.1.1.3 At LANDLORD'S option, will be made by LANDLORD
for TENANT'S account, and TENANT will reimburse LANDLORD for
their cost (including 15% for LANDLORD'S overhead) within 10 days
after receipt of a statement of such cost.
9.3.1.2 Alterations, additions, fixtures, and
improvements, including but not limited to built in cabinetry and
work stations, whether temporary or permanent in character, made
in or upon the premises either by TENANT or LANDLORD, will
immediately become LANDLORD'S property and at the end of the term
will remain on the premises without compensation to TENANT,
unless when consenting to such alterations, additions, fixtures,
or improvements, LANDLORD has advised TENANT in writing that such
alterations, additions, fixtures, or improvements must be removed
at the expiration or other termination of this Lease.
9.3.1.3 Notwithstanding the provisions of paragraph
9.3.1.1 above, LANDLORD consents to TENANT making alterations to
the Premises so long as the cost does not exceed Five Hundred
Dollars ($500.00) per alteration and so long as such alterations
do not unreasonably increase power usage. LANDLORD will not
require approval of the contractor or the posting of a
performance bond, nor will LANDLORD charge TENANT an overhead
charge for said alterations performed by TENANT.
9.3.2 Free-Standing Partitions. TENANT will have the right to
install free-standing work station partitions, without LANDLORD'S prior
written consent, so long as no building or other governmental permit is
required for their installation or relocation; however, if a permit is
required, LANDLORD will not unreasonably withhold its consent to such
relocation or installation. The free-standing work station partitions
for which TENANT pays will be part of TENANT'S trade fixtures for all
purposes under this Lease. All other partitions installed in the
Premises are and will be LANDLORD'S property for all purposes under this
Lease.
9.3.3 Removal. If LANDLORD has required TENANT to remove any or
all alterations, additions, fixtures, and improvements that are made in
or upon the Premises pursuant to this Section 9 prior to the expiration
date, TENANT will remove such alterations, additions, fixtures, and
improvements at TENANT'S sole cost and will restore the Premises to the
condition in which they were before such alterations, additions,
fixtures, improvements, and additions were made, reasonable wear and
tear excepted.
9.4 LANDLORD'S Access to Leased Premises. LANDLORD shall have the right
to place, maintain and repair all utility equipment of any kind in, over, upon
and under the Premises as may be necessary for the servicing of the Premises and
any other portion of the Building. LANDLORD also shall have the right to enter
the Premises at all reasonable times in order to inspect the same, to supply
janitorial service and any other service to be provided by LANDLORD to TENANT
hereunder, to exhibit the Premises 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
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material upon the Premises that may be required therefor without the same
constituting an actual or constructive eviction of TENANT in whole or in part
and the rents and other monetary obligations reserved herein shall in no wise
xxxxx, except as expressly provided in Subsection 8.6, while such work is in
progress by reason of loss or interruption of TENANT'S business or otherwise.
TENANT hereby expressly waives any claim for damages for any injury or
inconvenience to or interference with TENANT'S business, any loss of occupancy
or quiet enjoyment of the Premises, and any other loss occasioned thereby.
LANDLORD shall at all times have and retain a key with which to unlock all the
doors in, upon and about the Premises, excluding TENANT'S vaults and safes.
LANDLORD shall have the right to use any and all means which LANDLORD may deem
proper to open such doors in an emergency in order to obtain entry to the
Premises. Any entry to the Premises obtained by LANDLORD shall not under any
circumstances be construed or deemed to be a forcible or unlawful entry into or
detainer of the Premises or an eviction of TENANT from any portion of the
Premises. LANDLORD shall be permitted to show the premises to prospective
lessees during the last 12 months of the Lease. Any such showings shall be
during reasonable hours, with reasonable notice to TENANT and shall not
materially interfere with TENANT'S business.
10. LIENS. TENANT shall keep the building and the property free from any
liens arising out of work performed on or materials furnished to the Premises or
obligations incurred by TENANT and shall indemnify, hold harmless and defend
LANDLORD from any liens and encumbrances arising out of any work performed or
any materials furnished by or at the direction of TENANT. In the event that
within ten (10) days following the imposition of any such lien or encumbrance
TENANT shall not cause such lien or encumbrance to be released of record by
payment or posting of a proper bond, LANDLORD shall have, in addition to all
other remedies provided herein and by law the right, but not the obligation, to
cause the same to be released by such means as it shall deem proper, including
payment of the claim giving rise to such lien or encumbrance. All such sums paid
by LANDLORD and all expenses incurred by LANDLORD in connection therewith
including attorney's fees and costs shall be payable to LANDLORD by TENANT upon
demand with interest thereon at the Interest Rate. LANDLORD shall have the right
at all times to post and keep posted on the Premises any notices permitted or
required by law, or which LANDLORD shall deem proper, for the protection of
LANDLORD and the Premises and any other party having an interest therein from
mechanics' and materialmen's liens, and TENANT shall give to LANDLORD at least
ten (10) business days prior written notice of the expected date of commencement
of any work relating to alterations or additions to the Premises.
11. ASSIGNMENT.
11.1 General. TENANT, for itself, its heirs, distributees, executors,
administrators, legal representatives, successors, and assigns, covenants that
it will not assign, mortgage, or encumber this Lease, nor sublease, nor permit
the premises or any part of the premises to be used or occupied by others,
without the prior written consent of LANDLORD in each instance, which consent
will not be unreasonably withheld or delayed. Any assignment or sublease in
violation of this Lease will be void. If this Lease is assigned, or if the
premises or any part of the premises are subleased or occupied by anyone other
than TENANT, LANDLORD may, after default by TENANT, collect rent from the
assignee, subtenant, or occupant, and apply the net amount collected to rent. No
assignment, sublease, occupancy, or collection will be deemed (a) a waiver
15
of the provisions of this Lease; (b) the acceptance of the assignee, subtenant,
or occupant as TENANT; or (c) a release of TENANT from the further performance
by TENANT of covenants on the part of TENANT contained in this Lease. The
consent by LANDLORD to an assignment or sublease will not be construed to
relieve TENANT from obtaining LANDLORD'S prior written consent in writing to any
further assignment or sublease. No permitted subtenant may assign or encumber
its sublease or further sublease all or any portion of its subleased space, or
otherwise permit the subleased space or any part of its subleased space to be
used or occupied by others, without LANDLORD'S prior written consent in each
instance.
11.2 Submission of Information. If TENANT requests LANDLORD'S consent to
a specific assignment or subletting, TENANT will submit in writing to LANDLORD
(a) the name and address of the proposed assignee or subtenant; (b) the business
terms of the proposed assignment or sublease; (c) reasonably satisfactory
information as to the nature and character of the business of the proposed
assignee or subtenant, and as to the nature of its proposed use of the space;
(d) banking, financial, or other credit information reasonably sufficient to
enable LANDLORD to determine the financial responsibility and character of the
proposed assignee or subtenant; and (e) the proposed form of assignment or
sublease for LANDLORD'S approval.
11.3 Payments to LANDLORD. If LANDLORD consents to a proposed assignment
or sublease, then LANDLORD will have the right to require TENANT to pay to
LANDLORD a sum equal to (a) 1/2 of any rent or other consideration paid to
TENANT by any proposed transferee that (after first deducting the costs of
TENANT, if any, in effecting the assignment or sublease, including reasonable
alterations costs, commissions, legal fees, TENANT'S relocation costs and the
unamortized portion of TENANT Improvements installed by TENANT) is in excess of
the rent allocable to the transferred space then being paid by TENANT to
LANDLORD pursuant to this Lease; (b) 1/2 of any other profit or gain (after
first deducting any necessary expenses incurred) realized by TENANT from any
such sublease or assignment; and (c) LANDLORD'S reasonable attorneys' fees and
costs incurred in connection with negotiation, review, and processing of the
transfer. All such sums payable will be payable to LANDLORD at the time the next
payment of monthly rent is due.
11.4 Prohibited Transfers. The transfer of a majority of the issued and
outstanding capital stock of any corporate TENANT or subtenant of this Lease, or
a majority of the total interest in any partnership TENANT or subtenant in a
single transaction, will be deemed an assignment of this Lease or of such
sublease requiring LANDLORD'S consent in each instance. For purposes of this
Lease, the transfer of outstanding capital stock of any corporate TENANT will
not include any sale of such stock by persons other than those deemed "insiders"
within the meaning of the Securities Exchange Act of 1934, as amended, effected
through the "over-the-counter market" or through any recognized stock exchange.
12. INDEMNITY.
12.1 Indemnification. Each party hereto shall indemnify, defend and hold
the other harmless from and against (i) any and all liability, penalties,
losses, damages, costs and expenses, demands, causes of action, claims or
judgements arising from or growing out of any injury to any person or persons or
any damage to any property as a result of any accident or other occurrence
during the Term occasioned in any way as a result of the indemnifying parties
officers',
16
employees', agents', servants', subtenants', concessionaires', licensees',
contractors', or invites' use, maintenance, alteration, occupation, or operation
of the Premises, Building or Improvements during the Term, and (ii) from and
against all costs and charges, including attorneys' fees and investigation
costs, incurred in and about any of such matters and the defense of any action
arising out of the same or in discharging the parcel or any part thereof from
any and all liens, charges or judgements which may accrue or be placed thereon
by reason of any act or omission of the indemnifying party. The indemnifying
party's obligations pursuant to the foregoing indemnity shall survive the
termination of this Lease. In case any proceeding is brought against the
indemnified party by reason of any such claim, the indemnifying party, upon
notice from the indemnified party, shall defend the same at the indemnifying
party's expense by counsel reasonably satisfactory to the indemnified party.
12.2 Release. LANDLORD and TENANT each hereby release and relieve the
other, and each waives its entire right of recovery against the other, or
against any other TENANT or occupant of the Building, or against the officers,
directors, shareholders, partners, joint venturers, employees, agents,
customers, invitees, or business visitors of such other party or of such other
TENANT or occupant of the Building, for loss or damage arising out of or
incident to the perils which the releasing party is required to insure against
under provisions of Paragraph 13, which perils occur in, on, or about the
premises or the building of which the premises are a part, whether due to the
negligence of LANDLORD or TENANT or their respective agents, employees,
contractors, or invites, if and to the extent that such loss or damage (i) is
actually compensated by insurance or (ii) would have been compensated by
insurance except for the fact that the insuring company availed itself of a
defense arising from the action or failure to act of the releasing party, its
employees or agents. Each party shall, upon obtaining the policies of insurance
which it is required to maintain under this Lease, give notice to its insurance
company or companies that the foregoing mutual waiver of subrogation is
contained in this lease. Each party shall cause each such insurance policy
obtained by it to provide that the insurance company waive all rights of
recovery by way of subrogation against either party in connection with any
damage or liability covered by such policy. If any insurance policy cannot be
obtained with a waiver of subrogation, or is obtainable only by the payment of
an additional premium charge above that charged by insurance companies issuing
policies with out waiver of subrogation, the party undertaking to obtain the
insurance shall notify the other party of such fact. The other party shall have
a period of ten (10) days after receiving the notice either to place the
insurance with a company that is reasonably satisfactory to the other party and
that will carry the insurance with a waiver of subrogation, or to agree to pay
the additional premium if such a policy is obtainable at additional cost. If the
insurance cannot be obtained with a waiver of subrogation or the party in whose
favor a waiver of subrogation is desired refuses to pay the additional premium
charge, the other party shall be relieved of the obligation to obtain a waiver
of subrogation rights with respect to that particular insurance policy.
12.3 Notice. TENANT shall give notice to LANDLORD in case of fire or
material accidents in the Premises or of material defects therein or in any
fixtures or equipment thereon located.
12.4 Litigation. In case LANDLORD, without fault on its part, shall be
made a party to any litigation commenced by or against TENANT, TENANT shall
protect and hold LANDLORD harmless and shall pay all costs, expenses, and
reasonable attorneys' fees incurred
17
therein. In case TENANT, without fault on its part, shall be made a party to any
litigation commenced by or against LANDLORD, LANDLORD shall protect and hold
TENANT harmless and shall pay all costs, expenses, and reasonable attorneys'
fees incurred therein.
13. INSURANCE.
13.1 LANDLORD'S Insurance. At all times during the term, LANDLORD will
carry and maintain:
13.1.1 Fire and extended coverage insurance covering the
Building, its equipment, common area furnishings, and leasehold
improvements in the Premises to the extent of the TENANT finish
allowance;
13.1.2 Bodily injury and property damage insurance with a
combined single occurrence limit of not less than $2,000,000; and
13.1.3 Such other insurance as LANDLORD reasonably determines
from time to time.
The insurance coverages and amounts in this Section 13.1 will be
reasonably determined by LANDLORD, based on coverages carried by
prudent owners of comparable buildings in the vicinity of the
project, and such insurance as may reasonably be required by
mortgage lenders.
13.2 TENANT'S Insurance. At all times during the term, TENANT will carry
and maintain, at TENANT'S expense, the following insurance, in the amounts
specified below or such other amounts as LANDLORD may from time to time
reasonably request, with insurance companies and on forms satisfactory to
LANDLORD:
13.2.1 Bodily injury and property damage liability insurance,
with a combined single occurrence limit of not less than $3,000,000. All
such insurance will be equivalent to coverage offered by a commercial
general liability form, including without limitation personal injury and
contractual liability coverage for the performance by TENANT of the
indemnity agreements set forth in this Lease;
13.2.2 Insurance covering all of TENANT'S furniture and fixtures,
machinery, equipment, stock, and any other personal property owned and
used in TENANT'S business and found in, on, or about the project, and
any leasehold improvements to the premises in excess of the allowance,
if any, in an amount not less than the full replacement cost. Property
forms will provide coverage on a broad form basis insuring against "all
risks of direct physical loss." All policy proceeds will be used for the
repair or replacement of the property damaged or destroyed; however, if
this Lease ceases under the provisions of section 14, TENANT will be
entitled to any proceeds resulting from damage to TENANT'S furniture and
fixtures, machinery, equipment, stock, and any other personal property;
18
13.2.3 Worker's compensation insurance insuring against and
satisfying TENANT'S obligations and liabilities under the worker's
compensation laws of the state in which the premises are located,
including employer's liability insurance in the limits required by the
laws of the state in which the project is located; and
13.2.4 If TENANT operates owned, hired, or nonowner vehicles on
the Property, comprehensive automobile liability at a limit of liability
not less than $500,000 combined bodily injury and property damage.
13.3 Forms of Policies. Certificates of insurance, together with copies
of the endorsements, when applicable, naming LANDLORD and any others specified
by LANDLORD as additional insures, at the sole discretion of LANDLORD, will be
delivered to LANDLORD prior to TENANT'S occupancy of the premises and from time
to time at least 10 days prior to the expiration of the term of each such
policy. All general liability and property policies maintained by TENANT will be
written as primary policies, not contributing with and not supplemental to the
coverage that LANDLORD may carry.
14. DAMAGE OR DESTRUCTION.
14.1 LANDLORD'S Obligations. If the Premises shall be partially damaged
by any casualty insured against under any insurance policy maintained by
LANDLORD, LANDLORD shall, upon receipt of the insurance proceeds, repair the
Premises within 180 days of the date of damage. Until such repair is complete,
the Basic Monthly Rent and Additional Rent shall be abated from the date of
damage proportionately as to that portion of the Premises rendered untenantable,
if any. Notwithstanding the foregoing, if (a) by reason of such occurrence the
Premises are rendered wholly untenantable; or (b) the Premises are damaged as a
result of a risk which is not covered by insurance; or (c) the Premises are
damaged in whole or in part during the last six (6) months of the term hereof or
of any renewal hereof; or (d) the Premises or the Building (whether the Premises
are damaged or not) is damaged to the extent of fifty percent (50%) or more of
then-monetary value thereof, LANDLORD may either elect to repair the damage or
may cancel this Lease by notice of cancellation within sixty (60) days after
such event and there upon this Lease shall expire, and TENANT shall vacate and
surrender the Premises to LANDLORD. TENANT's liability for rent upon the
termination of this Lease shall cease as of the effective date of such
termination. In the event LANDLORD elects to repair any such damage, any
abatement of rent shall end five (5) days after notice by LANDLORD to TENANT
that the Premises have been repaired and TENANT has accepted said repairs, which
acceptance TENANT shall not unreasonably withhold. If the damage is caused by
the negligence of TENANT or its employees, agents, invites or concessionaires,
there shall be no abatement of rent. Except for abatement of rent, if any,
TENANT shall have no claim against LANDLORD for any damage suffered by reason of
such damage, destruction, repair or restoration, nor shall TENANT have the right
to terminate this Lease as a result of any statutory provision now or hereafter
in effect pertaining to the damage and destruction of the Premises or the
Building, except as expressly herein provided. The proceeds of all insurance
carried by TENANT on its property and fixtures shall be held in trust by TENANT
for the purpose of said repair and replacement. TENANT shall have the right to
terminate this Lease if (a) the repairs to the Premises are not completed within
180 days of the date of damage; or (b) by reason of such occurrence the Premises
are rendered wholly untenantable; or (c) the Premises are damaged in
19
whole or in part during the last six (6) months of the term hereof and the
Premises or the Building (whether the Premises are damaged or not) is damaged to
the extent of fifty percent (50%) or more of then-monetary value thereof.
14.2 TENANT'S Obligation. LANDLORD shall not be required to repair any
injury or damage caused by fire or any other cause, or to make any restoration
or replacement of any paneling, decoration, partition, railing, floor covering,
office fixture or any other improvement or property installed in the Premises by
TENANT or at the direct or indirect expense of TENANT. Unless this Lease is
terminated by LANDLORD pursuant to Subsection 15.1 hereof, TENANT shall be
required to restore or replace such improvements and property in the event of
injury or damage in at least a condition equal to that existing prior to the
destruction or casualty.
15. CONDEMNATION.
15.1 Total Condemnation. If the whole of the Premises shall be acquired
or taken by condemnation proceeding, this Lease shall cease and terminate as of
the date of title vesting in such condemnor.
15.2 Partial Condemnation. If any part of the Premises shall be acquired
or taken by condemnation proceeding, and such partial taking shall render that
portion not so taken unsuitable for the business of TENANT, then this Lease
shall cease and terminate as of the date of title vesting in such condemnor. If
such partial taking does not render the Premises unsuitable for the business of
TENANT, this Lease shall continue in effect except that the Basic Monthly Rent
and Additional Rent shall be reduced from the time of taking in the same
proportion that the portion of the Premises taken bears to the total rented area
of the Premises immediately prior to the taking. LANDLORD shall, upon receipt of
the award in condemnation, make all necessary repairs or alterations to the
Building in which the Premises are located; provided, however, that LANDLORD
shall not be required to expend for such work an amount in excess of the amount
received by LANDLORD as damages for the part of the Premises so taken. Amount
received by LANDLORD shall mean that part of the award in condemnation which is
free and clear to LANDLORD of any collection by mortgage lenders for the value
of the diminished fee.
15.3 LANDLORD'S Option to Terminate. If more than twenty percent (20%)
of the Building shall be acquired or taken by condemnation proceeding, LANDLORD
may, by written notice to TENANT, terminate this Lease. If this Lease is
terminated as provided in this Subsection 15.3, rent shall be paid up to the day
that possession is so taken by public authority and LANDLORD shall make an
equitable refund of any rent paid by TENANT in advance.
15.4 Award. TENANT shall not be entitled to any condemnation award for
any taking, whether whole or partial and whether for diminution in value of the
leasehold or the fee, and assigns to LANDLORD all rights of TENANT, if any, to
receive such award, although TENANT shall have the right, to the extent that the
same shall not reduce LANDLORD'S award, to claim from the condemnor, but not
from LANDLORD, such compensation as may be recoverable by TENANT in its own
right for TENANT'S relocation costs and for damages to TENANT'S business and
fixtures.
20
15.5 Definitions. As used in this Section 15 the term condemnation
proceeding means any action or proceeding in which any interest in the Premises
is taken for any public or quasi-public purpose by any lawful authority through
exercise of the power of eminent domain or right of condemnation or by purchase
or otherwise in lieu of and under threat of condemnation. The definition of
Premises shall be expanded to include elevators, parking and common areas.
16. LANDLORD'S RIGHT TO CURE. In the event of any noncompliance
hereunder by LANDLORD, TENANT shall, before exercising any right or remedy
available to it, give LANDLORD written notice of such noncompliance. If prior to
its giving such notice TENANT has been notified in writing (by way of Notice of
Assignment of Rents and Leases, or otherwise) of the address of a Lender which
has furnished any of the financing referred to in Section 17 hereof,
concurrently with giving the aforesaid notice to LANDLORD, TENANT shall, by
registered or certified mail postage prepaid, transmit a copy thereof to such
Lender. For the thirty (30) days following the giving of the notice(s) required
by the foregoing portion of this Section 16 (or such longer period of time as
may be reasonably required to cure a matter which, due to its nature, cannot
reasonably be rectified within thirty (30) days), LANDLORD shall have the right
to cure the noncompliance involved. If LANDLORD has failed to effect such cure
within such period, any such Lender shall have an additional thirty (30) days
within which to cure the same or, if such default cannot be cured within that
period, such additional time as may be necessary, if within such thirty (30) day
period said Lender has commenced and is diligently pursuing the actions or
remedies necessary to cure the noncompliance involved (including, but not
limited to, commencement and prosecution of proceedings to foreclose or
otherwise exercise its rights under its mortgage or other security instrument,
if necessary to effect such cure), in which event this Lease shall not be
terminated by TENANT so long as such actions or remedies are being diligently
pursued by said Lender. LANDLORD shall not be liable to TENANT for any default
under this Lease which occurs after the sale of the Building by LANDLORD, and
TENANT agrees that its rights with respect to any such default, if asserted,
shall be asserted against LANDLORD'S successor in interest, and not against
LANDLORD.
17. SUBORDINATION; AMENDMENT; ATTORNMENT.
17.1 Subordination. This Lease, at LANDLORD'S option, shall be
subordinate to any existing or future mortgage, deed of trust, ground lease or
declaration of covenants (regarding maintenance and use of any areas contained
in any portion of the Building), declaration of planned unit development,
including, without limitation, the Declaration of Covenants, Conditions and
Restrictions of South Towne, any and all advances made under any mortgage or
deed of trust and all renewals, modifications, amendments, consolidations,
replacements and extensions thereof. TENANT agrees that with respect to any of
the foregoing documents, no documentation, other than this Lease, shall be
required to evidence such subordination. If any holder of a mortgage or deed of
trust shall elect to have this Lease superior to the lien of its mortgage or
deed of trust and shall give written notice thereof to TENANT, this Lease shall
be deemed prior to such mortgage or deed of trust or to the date of recording
thereof. TENANT agrees to execute such documents which may be required by
LANDLORD to confirm such subordination or priority within ten (10) days of
request therefor from LANDLORD. Notwithstanding anything to the contrary
contained in this Subsection 17.1, so long as TENANT fulfills all its
obligations under this Lease, TENANT'S rights under this Lease shall not be
disturbed or impaired by any holder of a mortgage or a deed of trust, or by any
person claiming
21
through or under LANDLORD. TENANT shall not subordinate its interests hereunder
or in the Premises to any lien or encumbrance other than those encumbrances
described in this Subsection 17.1 without the prior consent of LANDLORD. Any
attempted unauthorized subordination by TENANT shall be void and of no force or
effect.
17.2 Amendment. TENANT agrees that from time to time it shall, if so
requested by LANDLORD and if doing so will not materially and adversely affect
TENANT'S economic interests hereunder, join with LANDLORD in amending this Lease
so as to meet the needs or requirements of any Lender which is considering
making or which has made a loan secured by the Building and/or related Land. Any
change in the Basic Monthly Rent or Additional Rent shall be deemed adverse or
material.
17.3 Attornment. Any sale, assignment or transfer of LANDLORD'S interest
under this Lease or in the Premises, including any such disposition resulting
from LANDLORD'S default under a debt obligation, shall be subject to this Lease
and TENANT shall attorn to LANDLORD'S successors and assigns and shall recognize
such successors or assigns as LANDLORD under this Lease, regardless of any rule
of law to the contrary or absence of privity of contract.
18. DEFAULT; REMEDIES; ABANDONMENT; PAST SUMS DUE; PENALTY.
18.1 Default by TENANT. Upon the occurrence of any of the following
events, LANDLORD shall have the remedies set forth in Subsection 18.2:
18.1.1 TENANT fails to pay any installment of Basic Monthly Rent
or Additional Rent or any other sum due hereunder within five (5)
calendar days of when the same shall be due.
18.1.2 TENANT fails to perform any other term, condition, or
covenant to be performed by it pursuant to this Lease within thirty (30)
days after written notice of such default shall have been given to
TENANT by LANDLORD or if cure would reasonably require more than thirty
(30) days to complete if TENANT fails to commence performance within the
thirty (30) day period or fails to diligently pursue such cure to
completion.
18.1.3 TENANT or any guarantor of this Lease shall become
bankrupt or insolvent or file any debtor proceedings or have taken
against such party in any court pursuant to state or federal statute, a
petition in bankruptcy or insolvency, reorganization, or appointment of
a receiver of trustee; or TENANT petitions for or enters into an
arrangement; or suffers this Lease to be taken under a writ of
execution.
18.1.4 If an abandonment of the Premises by TENANT has occurred,
as defined in Section 78-36-12.3 of the Utah Code Xxx. (or similar
replacement provision).
18.2 LANDLORD'S Remedies. If any one or more of the events of default
set forth in Section 18.1 occurs and is not cured, then LANDLORD shall have,
besides other rights and remedies it may have at law or equity, the following
remedies:
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18.2.1 To give TENANT written notice of LANDLORD'S intention to
terminate this Lease on the earliest date permitted by law or on any
later date specified in such notice, in which case TENANT'S right to
possession of the premises will cease and this Lease will be terminated,
except as to TENANT'S liability, as if the expiration of the term fixed
in such notice were the end of the term;
18.2.2 Without further demand or notice, to reenter and take
possession of the premises or any part of the premises, repossess the
same, expel TENANT and those claiming through or under TENANT, and
remove the effects of both or either, using such force for such purposes
as may be necessary, without being liable for prosecution, without being
deemed guilty of any manner of trespass, and without prejudice to any
remedies for arrears of monthly rent or other amounts payable under this
Lease or as a result of any preceding breach of covenants or conditions;
or
18.2.3 Without further demand or notice to cure any event of
default and to charge TENANT for the cost of effecting such cure,
including without limitation reasonable attorneys' fees and interest on
the amount so advanced at the Interest Rate set forth in Section 9.2,
provided that LANDLORD will have no obligation to cure any such event of
default of TENANT.
18.2.4 Should LANDLORD elect to reenter as provided in subsection
(b), or should LANDLORD take possession pursuant to legal proceedings or
pursuant to any notice provided by law, LANDLORD may, from time to time,
without terminating this Lease, relet the premises or any part of the
premises in LANDLORD'S or TENANT'S name, but for the account of TENANT,
for such term or terms (which may be greater or less than the period
which would otherwise have constituted the balance of the term) and on
such conditions and upon such other terms (which may include concessions
of free rent and alteration and repair of the premises) as LANDLORD, in
its reasonable discretion, may determine, and LANDLORD may collect and
receive the rent. No such reentry or taking possession of the premises
by LANDLORD will be construed as an election on LANDLORD'S part to
terminate this Lease unless a written notice of such intention is given
to TENANT. No written notice from LANDLORD under this Section or under a
forcible or unlawful entry and detainer statute or similar law will
constitute an election by LANDLORD to terminate this Lease unless such
notice specifically so states. LANDLORD reserves the right following any
such reentry or reletting to exercise its right to terminate this Lease
by giving TENANT such written notice, in which event this Lease will
terminate as specified in such notice.
18.3 Certain Damages. In the event that LANDLORD does not elect to
terminate this Lease as permitted in Section 18.2.1, but on the contrary elects
to take possession as provided in Section 18.2.2, TENANT will pay to LANDLORD
monthly rent and other sums as provided in this Lease that would be payable
under this Lease if such repossession had not occurred, less the net proceeds,
if any, of any reletting of the premises after deducting all of LANDLORD'S
reasonable expenses in connection with such reletting, including without
limitation all repossession costs, brokerage commissions, attorneys' fees,
expenses of employees, alteration and repair costs, and expenses of preparation
for such reletting. If, in connection with any reletting, the new Lease term
extends beyond the existing term, or the premises covered by such
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new Lease include other premises not part of the premises, a fair apportionment
of the rent received from such reletting and the expenses incurred in connection
with such reletting as provided in this Section will be made in determining the
net proceeds from such reletting, and any rent concessions will be equally
apportioned over the term of the new Lease. TENANT will pay such rent and other
sums to LANDLORD monthly on the day on which the monthly rent would have been
payable under this Lease if possession had not been retaken, and LANDLORD will
be entitled to receive such rent and other sums from TENANT on each such day.
18.4 Continuing Liability After Termination. If this Lease is terminated
on account of the occurrence of an event of default, TENANT will remain liable
to LANDLORD for damages in an amount equal to monthly rent and other amounts
that would have been owing by TENANT for the balance of the term, had this Lease
not been terminated, less the net proceeds, if any, of any reletting of the
premises by LANDLORD subsequent to such termination, after deducting all of
LANDLORD'S expenses in connection with such reletting, including without
limitation the expenses enumerated in Section 18.3. LANDLORD will be entitled to
collect such damages from TENANT monthly on the day on which monthly rent and
other amounts would have been payable under this Lease if this Lease had not
been terminated, and LANDLORD will be entitled to receive such monthly rent and
other amounts from TENANT on each such day.
18.5 Cumulative Remedies. Any suit or suits for the recovery of the
amounts and damages set forth in Sections 18.3 and 18.4 may be brought by
LANDLORD, from time to time, at LANDLORD'S election, and nothing in this Lease
will be deemed to require LANDLORD to await the date upon which this Lease or
the term would have expired had there occurred no event of default. Each right
and remedy provided for in this Lease is cumulative and is in addition to every
other right or remedy provided for in this Lease or now or after the Lease date
existing at law or in equity or by statute or otherwise, and the exercise or
beginning of the exercise by LANDLORD of any one or more of the rights or
remedies provided for in this Lease or now or after the Lease date existing at
law or in equity or by statute or otherwise will not preclude the simultaneous
or later exercise by LANDLORD of any or all other rights or remedies provided
for in this Lease or now or after the Lease date existing at law or in equity or
by statute or otherwise. All costs incurred by LANDLORD in collecting any
amounts and damages owing by TENANT pursuant to the provisions of this Lease or
to enforce any provision of this Lease, including reasonable attorneys' fees
from the date any such matter is turned over to an attorney, whether or not one
or more actions are commenced by LANDLORD, will also be recoverable by LANDLORD
from TENANT.
18.6 Waiver of Redemption. TENANT waives any right of redemption arising
as a result of LANDLORD'S exercise of its remedies under this Section 18.
18.7 Past Due Sums; Penalty. Except as otherwise expressly provided for
in this Lease, if TENANT fails to pay, when the same is due and payable, or
within five (5) calendar days thereafter, any sum required to be paid by it
hereunder, such unpaid amount shall bear interest from the due date thereof to
the date of payment at a fluctuating rate equal to five percent (5%) per annum
above the prime rate of interest charged by Zions First National Bank, Salt Lake
City, Utah. In addition thereto, LANDLORD may charge a sum of five percent (5%)
of such unpaid amounts as a service fee. Notwithstanding the foregoing,
LANDLORD'S right concerning such
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interest and service fee shall be limited by the maximum amount which legally
may be charged by LANDLORD for such purposes under applicable law.
19. NOT USED.
20. END OF TERM. At the end of this Lease, TENANT will promptly quit and
surrender the premises broom-clean, in good order and repair, ordinary wear and
tear excepted. If TENANT is not then in material default, TENANT may remove from
the premises any trade fixtures, equipment, and movable furniture placed in the
premises by TENANT, whether or not such trade fixtures or equipment are fastened
to the building; TENANT will not remove any trade fixtures or equipment without
LANDLORD'S prior written consent if such fixtures or equipment are used in the
operation of the building, or if the removal of such fixtures or equipment will
result in impairing the structural strength of the building. Whether or not
TENANT is in default, TENANT will remove such alterations, additions,
improvements, trade fixtures, equipment, and furniture as LANDLORD has requested
in accordance with Section 9.3: TENANT will fully repair any damage occasioned
by the removal of any trade fixtures, equipment, furniture, alterations,
additions, and improvements. All trade fixtures, equipment, furniture,
inventory, effects, alterations, additions, and improvements on the Premises 10
days after the end of the term will be deemed conclusively to have been
abandoned and may be appropriated, sold, stored, destroyed, or otherwise
disposed of by LANDLORD without written notice to TENANT or any other person and
without obligation to account for them. TENANT will pay LANDLORD for all
expenses incurred in connection with the removal of such property, including but
not limited to the cost of repairing any damage to the building or premises
caused by the removal of such property. TENANT'S obligation to observe and
perform this covenant will survive the expiration or other termination of this
Lease.
21. ESTOPPEL CERTIFICATE.
21.1 LANDLORD'S Right to Estoppel Certificate. TENANT shall, within five
(5) days after LANDLORD'S request therefor, execute and deliver to LANDLORD an
Estoppel Certificate in recordable form setting forth the following: (a) a
ratification of this Lease; (b) the Actual Commencement Date and termination
date hereof; (c) a certification that this Lease is in full force and effect and
has not been assigned, modified, supplemented or amended (except by such writing
as shall be stated); (d) that all conditions under this Lease to be performed by
LANDLORD have been satisfied or a statement of any conditions not satisfied; (e)
that there are no defenses or offsets against the enforcement of this Lease by
LANDLORD, or, in the alternative, those claimed by TENANT; (f) the amount of
advance rent, if any, (or none if such is the case) paid by TENANT; (g) the date
to which rent has been paid; (h) the amount of security deposited with LANDLORD;
and (i) such other information as LANDLORD (or its mortgagees or potential
purchasers of the Premises) may reasonably request. In the event TENANT fails
within five (5) days after LANDLORD has delivered to TENANT an Estoppel
Certificate pursuant to this Subsection 21.1 to properly execute and deliver the
same to LANDLORD, TENANT shall be deemed to have consented to such Estoppel
Certificate as written. LANDLORD'S mortgage lenders and/or purchasers shall be
entitled to rely upon such declaration.
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21.2 Effect of Failure to Provide Estoppel Certificate. TENANT'S failure
to furnish any Estoppel Certificate pursuant to Subsection 21.1 hereof within
fifteen (15) days after request is made by LANDLORD therefor shall be deemed a
default hereunder and, moreover, it shall be conclusively presumed that (a) this
Lease is in full force and effect without modification in accordance with the
terms set forth in the request; (b) there are no breaches or defaults on the
part of LANDLORD; and (c) no more than one month's rent has been paid in
advance.
22. COMMON AREAS.
22.1 Definition of Common Areas. Common Areas means all areas, space,
equipment and special services provided for the joint or common use and benefit
of the TENANTS or occupants of the Building and related Land or portions
thereof, and their employees, agents, licensees and other invites (collectively
referred to herein as Occupants), including without limitation, the following:
parking areas, access roads, driveways, plaza retaining walls, landscaped areas,
service ways, loading docks, pedestrian walks, courts, stairs, ramps and
sidewalks, common corridors, monuments, water features, lobby elevators, rooms
and rest rooms, air conditioning, fan, janitorial, electrical and telephone
rooms or closets, and all other areas within the Building which are not
specified for exclusive use or occupancy by LANDLORD or any TENANT (whether or
not they are Leased or occupied).
22.2 License to Use Common Areas. The Common Areas shall be available
for the common use of all Occupants and to the extent such access to the Common
Areas has been or shall be granted, also shall be used by the general public. If
the amount of such areas shall be changed or diminished, LANDLORD shall not be
subject to any liability to TENANT in any respect, provided LANDLORD will take
no action permitted under this section 22 in such a manner as to materially
impair or adversely affect TENANT'S substantial benefit and enjoyment of the
premises. All common Areas shall be subject to the exclusive control and
management of LANDLORD.
22.3 Deliveries. All deliveries to and from the Premises shall be made
using those areas of the Building designated for deliveries by LANDLORD, during
the time periods reasonably specified by LANDLORD, and so as to cause the
minimum amount of interference with the business of other TENANTS of the
Building or impedance of traffic corridors or blockage of stairwells or fire
exits from the Building.
22.4 Parking. Subject to TENANT'S rights under Section 2 hereof,
automobiles of TENANT and all Occupants associated with TENANT shall be parked
only within parking areas not otherwise reserved by LANDLORD or specifically
designated to use by any other tenant and/or occupants associated with any other
tenant, and shall observe visitor parking time limitations. LANDLORD or its
agents, shall, without any liability to TENANT or its occupants have the right
(but not the obligation) to cause to be removed any automobile that may be
wrongfully parked in a prohibited or reserved parking area, and TENANT agrees to
indemnify, defend and hold harmless LANDLORD from and against any and all claims
asserted or arising with respect to or in connection with any such removal of an
automobile of TENANT. TENANT shall from time to time, upon request of LANDLORD,
supply LANDLORD with a list of license plate numbers of all automobiles owned by
TENANT or its day-to-day Occupants. TENANT shall not allow its employees or
agents to park in uncovered parking spaces overnight without
26
prior written consent of LANDLORD. Upon 24 hours notice, TENANT shall
temporarily relocate all TENANT owned vehicles to a location designated by
LANDLORD for the duration of any parking lot maintenance activities. TENANTS of
the Building may exercise and will be subject to, the parking rights as
contained herein on any portion of the adjacent Towers Phase III subdivision
properties which are asphalted and improved for parking.
23. SIGNS, AWNINGS AND CANOPIES. LANDLORD, at LANDLORD's expense shall
install identification signs for TENANT, in accordance with LANDLORD's signage
standards. TENANT shall not place or suffer to be placed or maintained on any
exterior door, exterior wall or window of the Premises, or in the Premises
visible to the Common Areas of the Building, or elsewhere in the Building, any
sign, awning, marquee, decoration, lettering, attachment, canopy, advertising
matter or other thing of any kind, without first obtaining LANDLORD'S written
approval. Signs inside the Premises not visible from the Common Areas of the
Building are not prohibited by this paragraph. LANDLORD may, at TENANT'S cost,
and without liability to TENANT, enter the Premises and remove any item erected
in violation of this Section 23. All signage shall further be subject to
approval by the City of South Jordan.
24. REQUIREMENTS OF LAW; FIRE INSURANCE.
24.1 General. At its sole cost and expense, TENANT will promptly comply
with all laws, statutes, ordinances, and governmental rules, regulations, or
requirements now in force or in force after the Lease date, with the
requirements of any board of fire underwriters or other similar body constituted
now or after the date, with any direction or occupancy certificate issued
pursuant to any law by any public officer or officers, as well as with the
provisions of all recorded documents affecting the premises, insofar as they
relate to the condition, use, or occupancy of the premises, excluding
requirements of structural changes to the premises or the building, unless
required by the unique nature of TENANT'S use or occupancy of the premises.
24.2 Hazardous Materials.
24.2.1 For purposes of this Lease, "hazardous materials" means
any explosives, radioactive materials, hazardous wastes, or hazardous
substances, including without limitation substances defined as
"hazardous substances" in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. ##
9601-9657; the Hazardous Materials Transportation Act of 1975, 49 U.S.C.
## 1801-1812; the Resource Conservation and Recovery Act of 1976, 42
U.S.C. ## 6901-6987; or any other federal, state, or local statute, law,
ordinance, code, rule, regulation, order, or decree regulating, relating
to, or imposing liability or standards of conduct concerning hazardous
materials, waste, or substances now or at any time hereafter in effect
(collectively, "hazardous materials laws").
24.2.2 Except in compliance with hazardous waste laws, TENANT
will not cause or permit the storage, use, generation, or disposition of
any hazardous materials in, on, or about the premises or the project by
TENANT, its agents, employees, or contractors. TENANT will not permit
the premises to be used or operated in a manner that may cause the
premises or the project to be contaminated by any hazardous materials in
violation of any hazardous materials laws. TENANT will immediately
advise LANDLORD in writing
27
of (1) any and all enforcement, cleanup, remedial, removal, or other
governmental or regulatory actions instituted, completed, or threatened
pursuant to any hazardous materials laws relating to any hazardous
materials affecting the premises; and (2) all claims made or threatened
by any third party against TENANT, LANDLORD, or the premises relating to
damage, contribution, cost recovery, compensation, loss, or injury
resulting from any hazardous materials on or about the premises. Without
LANDLORD'S prior written consent, TENANT will not take any remedial
action or enter into any agreements or settlements in response to the
presence of any hazardous materials in, on, or about the premises.
24.2.3 TENANT will be solely responsible for and will defend,
indemnify and hold LANDLORD, its agents, and employees harmless from and
against all claims, costs, and liabilities, including attorneys' fees
and costs, arising out of or in connection with TENANT'S breach of its
obligations in this Section 24. TENANT will be solely responsible for
and will defend, indemnify, and hold LANDLORD, its agents, and employees
harmless from and against any and all claims, costs, and liabilities,
including attorneys' fees and costs, arising out of or in connection
with the removal, cleanup, and restoration work and materials necessary
to return the premises and any other property of whatever nature located
on the project to their condition existing prior to the appearance of
TENANT'S hazardous materials on the premises. TENANT'S obligations under
this Section 24 will survive the expiration or other termination of this
Lease.
24.3 Certain Insurance Risks. TENANT will not do or permit to be done
any act or thing upon the premises or the project which would (a) jeopardize or
be in conflict with fire insurance policies covering the project and fixtures
and property in the project; (b) increase the rate of fire insurance applicable
to the project to an amount higher than it otherwise would be for general office
use of the project; or (c) subject LANDLORD to any liability or responsibility
for injury to any person or persons or to property by reason of any business or
operation being carried on upon the premises.
25. LANDLORD'S RESERVED RIGHTS. Without liability to TENANT (except for
damages caused by the reckless or willful misconduct of LANDLORD or its agents),
LANDLORD shall have the right at any time or from time to time (a) upon at least
twenty (20) days' prior notice to TENANT, change the name or street address of
the Building; (b) without notice, install and maintain signs on the exterior of
the Building; (c) upon notice to TENANT, enter the Premises and perform any
obligation of TENANT hereunder which TENANT has failed to perform
satisfactorily; (d) without notice, make changes, alterations and additions to
the Building or the Property; (e) exhibit the Premises to prospective tenants,
mortgagees and purchasers upon reasonable notice; and (f) without notice, enter
into the Premises to take such measures as LANDLORD may deem advisable for the
safety, security and welfare of the Building and its Occupants and for such
purposes, to bring into and through the Premises or any part of the Building,
all required tools, equipment and materials and to temporarily suspend the use
of doors, corridors or other facilities of the Building.
26. RULES AND REGULATIONS. The Rules and Regulations set forth on
Exhibit Fare hereby made a part of this Lease. LANDLORD may from time to time
amend, modify, delete or add rules and regulations for the use and care of the
Building and the Land, provided
28
that changes in the Rules and Regulations shall not unreasonably affect TENANT.
Such amendment, modification, deletion or addition shall be effective upon
notice thereof to TENANT from LANDLORD. TENANT will cause its employees, agents
or any other persons permitted by TENANT to occupy or enter the Premises to at
all times abide by all of such Rules and Regulations. In the event of any breach
of any of such Rules or Regulations, LANDLORD may exercise any or all of the
remedies in this Lease which are provided for in the event of default by TENANT
and may, in addition, exercise any remedies available at law or in equity
including the right to enjoin any breach of such Rules and Regulations. No act
performed by LANDLORD or its agents during the term of the Lease to enforce such
Rules and Regulations shall constitute an eviction of TENANT by LANDLORD, nor
shall it be deemed an acceptance or surrender of the Premises. LANDLORD shall
not be responsible to TENANT for the failure by any other tenant or person to
observe any such Rules and Regulations.
27. MISCELLANEOUS PROVISIONS.
27.1 No Partnership. LANDLORD does not by this Lease, in any way or for
any purpose, become a partner or joint venturer of TENANT in the conduct of its
business or otherwise.
27.2 Force Majeure. LANDLORD shall be excused for the period of any
delay in the performance of any obligations hereunder when prevented from so
doing by cause or causes beyond LANDLORD'S control, including labor disputes,
civil commotion, war, governmental regulations or controls, fire or other
casualty, inability to obtain any material or service or acts of God.
27.3 Modification for Lender. If, in connection with obtaining
construction, interim, or permanent financing for the Building or the Property,
the lender shall request reasonable modifications in this Lease as a condition
to such financing, TENANT will not unreasonably withhold, delay, or defer its
consent thereto, provided that such modifications do not increase the
obligations of TENANT hereunder or materially adversely affect the Leasehold
interest hereby created or TENANT'S rights hereunder. TENANT shall execute any
documentation that LANDLORD or the lender deems reasonably necessary within five
(5) days after written request by LANDLORD.
27.4 No Light, Air or View Easement. Any diminution or shutting off of
light, air or view by any structure which may be erected on lands adjacent to or
in the vicinity of the Building shall in no way affect this Lease or impose any
liability on LANDLORD.
27.5 Holding Over. Because unauthorized holding over after the
expiration of the term hereof or of any renewal term will cause substantial
damage to LANDLORD which cannot be estimated at the time of execution of the
Lease, any such holding over shall be construed to be a tenancy from
month-to-month at two (2) times the Basic Monthly Rent plus all other sums,
rents and charges herein specified (pro-rated on a monthly basis) and shall, so
far as possible, otherwise be on the terms herein specified. The preceding
sentence shall not be construed as LANDLORD's permission for TENANT to hold
over.
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27.6 Notices. Any notice, request, demand, consent, approval, or other
communication required or permitted under this lease must be in writing and will
be deemed to have been given when personally delivered, sent by facsimile with
receipt acknowledged, deposited with any nationally recognized overnight carrier
that routinely issues receipts, or deposited in any depository regularly
maintained by the United States Postal Service, postage prepaid, certified mail,
return receipt requested, addressed to the party for whom it is intended. Notice
for LANDLORD shall be addressed and sent to 106TH SOUTH BUSINESS PARK, L.P.,
Attention: Xxx Xxxxxxxxxxx, 00000 Xxxxx Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxx Xxxxxx,
Xxxx 00000; The address for TENANT set forth in Section 1, Subsection 1.1 of
this Lease shall be the effective location for notices to TENANT. Either party
may designate such other address as shall be given by written notice.
27.7 Captions; Attachments.
27.7.1 The captions to the Sections and Subsections of this Lease
are for convenience of reference only and shall not be deemed relevant
in resolving questions of construction or interpretation under this
Lease.
27.7.2 Exhibits referred to in this Lease and any addendum,
riders and schedules attached to this Lease shall be deemed to be
incorporated in this Lease as though a part of Lease.
27.8 Recording. TENANT shall not record this Lease or a memorandum
hereof without the written consent of LANDLORD. LANDLORD, at its option and at
any time, may file this Lease or a memorandum hereof for record with the
Recorder of the County in which the Property is located, and LANDLORD shall
notify TENANT of the same.
27.9 Partial Invalidity. If any provision of this Lease or the
application thereof to any person or circumstance shall to any extent be
invalid, the remainder of this Lease or the application of such provision to
persons or circumstances other than those as to which it is held invalid shall
not be affected thereby and each provision of this Lease shall be valid and
enforced to the fullest extent permitted by law. In lieu of each provision of
this lease that is illegal, invalid, or unenforceable a provision will be added
as a part of this lease as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and be legal, valid, and enforceable.
27.10 Brokers Commission. Hunter X. Xxxxxxxxx acting as an agent of
Prime Commercial, Inc., as the representative of TENANT, shall be entitled to a
Lease commission equal to 3% of the Lease amount calculated as follows: initial
annual Lease payment times 5 (lease years) times 3% = commission $10,034.86.
This amount will be paid by LANDLORD, 1/2 upon execution by LANDLORD and TENANT
to Lease agreement and 1/2 within ten (10) days of TENANT occupying the
Premises.
27.11 TENANT Defined; Use of Pronouns. The word TENANT shall be deemed
to mean each and every person or party executing this document as a TENANT
hereunder. If there is more than one person or organization set forth on the
signature line as TENANT, their liability hereunder shall be joint and several.
If there is more than one TENANT, any notice required or
30
permitted by the terms of this Lease may be given by or to any one TENANT, and
shall have the same force and effect as if given by or to all TENANTS. The use
of the neuter singular pronoun to refer to LANDLORD or TENANT shall be deemed a
proper reference even though LANDLORD or TENANT may be an individual,
partnership, corporation or a group of two or more individuals, partnerships or
corporations. The necessary grammatical changes required to make the provisions
of this Lease apply in the plural sense where there is more than one LANDLORD or
TENANT and to corporations, associations, partnerships, individuals, males or
females, shall in all instances be assumed as though in each case fully
expressed.
27.12 Provisions Binding, etc. Except as otherwise provided, all
provisions herein shall be binding upon and shall inure to the benefit of the
parties, their legal representatives, heirs, successors and assigns. Each
provision to be performed by TENANT shall be constructed to be both a covenant
and a condition, and if there shall be more than one TENANT, they shall all be
bound, jointly and severally, by such provisions. In the event of any sale or
assignment (except for purposes of security or collateral) by LANDLORD of the
Building, the Premises or this Lease, LANDLORD shall, from and after the Actual
Commencement Date (irrespective of when such sale or assignment occurs), be
entirely relieved of all of its obligations hereunder and such obligations
shall, as of the time of such sale or assignment or on the Actual Commencement
Date, whichever is later, automatically pass to LANDLORD'S successor in
interest.
27.13 Entire Agreement, etc. This Lease and the Exhibits, Riders and/or
addenda, if any, attached hereto, constitute the entire agreement between the
parties. Any guaranty attached hereto is an integral part of this Lease and
constitutes consideration given to LANDLORD to enter into this Lease. Any prior
conversations or writings are merged herein and extinguished. No subsequent
amendment of this Lease shall be binding upon LANDLORD or TENANT unless reduced
to writing and signed. Submission of this Lease for examination does not
constitute an option for the Premises and this Lease becomes effective as a
Lease only upon execution and delivery thereof by LANDLORD to TENANT. It is
hereby agreed that this Lease contains no restrictive covenants or exclusions in
favor of TENANT.
27.14 Recourse by TENANT. Anything in this Lease to the contrary
notwithstanding, TENANT agrees that it shall look solely to the equity of
LANDLORD in the Building in which the Premises are located and the Land upon
which the Building is situated, subject to prior rights of any mortgagee
(including mortgagees, advancing monies after the date of this Lease), for the
collection of any judgment (or other judicial process) requiring the payment of
money by LANDLORD in the event of any default or breach by LANDLORD with respect
to any of the terms, covenants and conditions of this Lease to be observed
and/or performed by LANDLORD, and no other assets of LANDLORD shall be subject
to levy, execution or other procedures for the satisfaction of TENANT'S
remedies. Nothing herein shall preclude TENANT from seeking injunctive relief or
specific performance or insurance proceeds to which they are entitled. The
amount of any judgement obtained by TENANT against LANDLORD can be used by
TENANT as an offset against unpaid rent.
27.15 Choice of Law. This Lease shall be governed by and construed in
accordance with the laws of the State of Utah.
27.16 Time of Essence. Time is of the essence of this Lease.
31
27.17 No Waiver. The waiver by LANDLORD of any agreement, condition, or
provision contained in this Lease will not be deemed to be a waiver of any
subsequent breach of the same or any other agreement, condition, or provision
contained in this Lease, nor will any custom or practice that may grow up
between the parties in the administration of the terms of this Lease be
construed to waive or to lessen the right of LANDLORD to insist upon the
performance by TENANT in strict accordance with the terms of this Lease. The
subsequent acceptance of rent by LANDLORD will not be deemed to be a waiver of
any preceding breach by TENANT of any agreement, condition, or provision of this
Lease, other than the failure of TENANT to pay the particular rent so accepted,
regardless of LANDLORD'S knowledge of such preceding breach at the time of
acceptance of such rent.
27.18 Rights and Remedies. The rights and remedies of LANDLORD shall not
be mutually exclusive and the exercise of one or more of the provisions of this
Lease shall not preclude the exercise of any other provisions. TENANT confirms
that damages at law may be an inadequate remedy for a breach or threatened
breach by TENANT of any of the provisions hereof. LANDLORD'S rights and TENANT'S
obligations hereunder shall be enforceable by specific performance, injunction
or any other equitable remedy, but nothing herein contained is intended or shall
limit or affect any rights at law or by statute or otherwise of LANDLORD against
TENANT for a breach or a threatened breach of any provision hereof, it being the
intention by this Section to make clear the agreement of the parties hereto and
the right of LANDLORD and obligations of TENANT hereunder shall be enforceable
in equity as well as at law or otherwise.
27.19 Authorization. Each individual executing this Lease does thereby
represent and warrant to each other so signing (and each other entity for which
another person may be signing) that he has been duly authorized to deliver this
Lease in the capacity and for the entity set forth where he signs.
27.20 No Construction Against Drafting Party. LANDLORD and TENANT
acknowledge that each of them and their counsel have had an opportunity to
review this Lease and that this Lease will not be construed against LANDLORD
merely because LANDLORD has prepared it.
27.21 Waiver of Jury Trial. LANDLORD and TENANT by this Section 27.21
waive trial by jury in any action, proceeding, or counterclaim brought by either
of the parties to this Lease against the other on any matters whatsoever arising
out of or in any way connected with this Lease, the relationship of LANDLORD and
TENANT, TENANT'S use or occupancy of the premises, or any other claims (except
claims for personal injury or property damage), and any emergency statutory or
any other statutory remedy.
27.22 No Merger. The voluntary or other surrender of this Lease by
TENANT or the cancellation of this Lease by mutual agreement of TENANT and
LANDLORD or the termination of this Lease on account of TENANT'S default will
not work a merger, and will, at LANDLORD'S option, (a) terminate all or any
subleases and subtenancies or (b) operate as an assignment to LANDLORD of all or
any subleases or subtenancies. LANDLORD'S option under this Section 27.22 will
be exercised by written notice to TENANT and all known sublessees or subtenants
in the premises or any part of the premises.
32
27.23 Financial Reports. Within 15 days after LANDLORD'S request, TENANT
will furnish TENANT'S most recent audited financial statements (including any
notes to them) to LANDLORD, or, if no such audited statements have been
prepared, such other financial statements (and notes to them) as may have been
prepared by an independent certified public accountant or, failing those,
TENANT'S internally prepared financial statements. TENANT will discuss its
financial statements with LANDLORD and will give LANDLORD access to TENANT'S
books and records in order to enable LANDLORD to verify the financial
statements. LANDLORD will not disclose any aspect of TENANT'S financial
statements that TENANT designates to LANDLORD as confidential except (a) to
LANDLORD'S lenders or prospective purchasers of the property, (b) in litigation
between LANDLORD and TENANT, and (c) if required by court order.
27.24 LANDLORD'S Fees. Whenever TENANT requests LANDLORD to take any
action or give any consent required or permitted under this Lease, TENANT will
reimburse LANDLORD for all of LANDLORD'S reasonable costs incurred in reviewing
the proposed action or consent, including without limitation reasonable
attorneys', engineers' or architects' fees, within 10 days after LANDLORD'S
delivery to TENANT of a statement of such costs. TENANT will be obligated to
make such reimbursement without regard to whether LANDLORD consents to any such
proposed action.
27.25 Attorney's Fees. In the event that at any time during the term of
this Lease either LANDLORD or TENANT institutes any action or proceeding against
the other relating to the provisions of this Lease or any default hereunder, the
unsuccessful party in such action or proceeding shall reimburse the successful
party for the reasonable expenses of such action including reasonable attorneys'
fees incurred therein by the successful party.
27.26 Successors. LANDLORD shall not be liable to TENANT for any default
or breach under this Lease which occurs after the sale of the Building or
Premises by LANDLORD.
IN WITNESS WHEREOF, LANDLORD and TENANT have executed this Lease on the
day first set forth above.
LANDLORD:
106TH SOUTH BUSINESS PARK, A Utah Limited Partnership
By: /s/Xxxxx X. Xxxxx, Xx.
Its General Partner
TENANT:
XXXXXXXXXX.XXX, INC., a Delaware Corporation
By: /s/Xxxxxxx Xxxxx
----------------------------------------
Its: Executive Vice President
----------------------------------------
33
EXHIBIT A
LEGAL DESCRIPTION
Lots 3 and 4 of, Xxx Xxxxxx xx Xxxxx Xxxxx Xxxxx 0 subdivision, located in the
Xxxxxxxxx Xxxxxxx xx Xxxxxxx 00, Xxxxxxxx 0, Xxxxx, Xxxxx 1 West, Salt Lake Base
and Meridian, South Jordan City, Utah, at 00000 Xxxxx Xxxxxx Xxxxxxx, Xxxxx
Xxxxxx, Xxxx 00000.
34
EXHIBIT B
PRELIMINARY PLANS
1. Preliminary Plans. LANDLORD and TENANT have approved the preliminary
plans and outline specifications (Preliminary Plans) for the construction of the
TENANT Improvements to the Premises, said Preliminary Plans are attached to this
Lease as Exhibit E1 and by this reference incorporated herein.
2. Final Plans. At LANDLORD'S cost, LANDLORD shall prepare final plans
and specifications (Final Plans) substantially in conformity with the
Preliminary Plans. LANDLORD shall complete preparation of the Final Plans within
4 weeks or sooner from the date TENANT approves the Preliminary Plans. Both
parties shall initial the Final Plans and attach a copy of the Final Plans to
this Lease as Exhibit E2. TENANT shall not object to any logical development or
refinement of the Preliminary Plans or any changes necessitated by applicable
law. Final Plans shall be subject to approval by LANDLORD and TENANT, which
approval shall not be unreasonably withheld.
3. Construction of Premises. LANDLORD shall construct the TENANT
Improvements to the Premises substantially in accordance with the Final Plans.
All construction work shall be performed by LANDLORD's contractor. LANDLORD
shall use its diligent best efforts to complete the TENANT Improvements and the
Premises shall be Ready for Occupancy, as defined in Subsection 4.1 below, by
the Projected Commencement Date, provided, however, that the Projected
Commencement Date shall be extended for a period equal to the period of any
delay encountered by LANDLORD affecting the work of construction because of
fire, earthquake, inclement weather, acts of God, acts of the public enemy,
riot, insurrection, governmental regulation of the sales of materials or
supplies or the transportation thereof, strikes or boycotts, shortages of
material or labor, TENANT'S early entry to the Premises or, changes in the Final
Plans as provided for in the Lease, or any causes beyond the control of
LANDLORD. Construction shall be in compliance with building safety and fire
codes and the Americans With Disabilities Act at the time building permits are
issued.
4. Failure to Complete Construction.
4.1 LANDLORD Remedies. If, despite LANDLORD'S diligent best
efforts to complete the TENANT Improvements, the Premises are not Ready
for Occupancy within 45 days following the Projected Commencement Date,
the sole remedy of LANDLORD shall be to terminate this Lease by
delivering to TENANT written notice within ten (10) days after the 45
day period following the Projected Commencement Date. Upon termination
of this Lease pursuant to this Subsection 4.1, LANDLORD shall have no
further liability for any damage, costs or claims which arise in
connection with the Premises and this Lease, other than daily liquidated
damages which may arise pursuant to paragraph 4.2.
35
4.2. TENANT Remedies. If the Premises are not Ready for
Occupancy within 45 days following the Projected Commencement Date,
TENANT shall have the option to terminate this Lease by delivering to
LANDLORD written notice within two (2) business days after the
expiration of the 45 day period following the Projected Commencement
Date, or TENANT may elect to continue the Lease in effect and LANDLORD
shall pay to TENANT daily liquidated damages for every day the Premises
are not Ready for Occupancy after said 45 day period has expired, up to
a maximum of thirty (30) days. Daily liquidated damages shall be
calculated by dividing the Basic Monthly Rent by 30. If the Premises are
not Ready for Occupancy within 75 days from the Projected Commencement
Date, the sole remaining remedy of TENANT shall be to terminate this
Lease by delivering to LANDLORD written notice within ten (10) days
after the 75 day period following the Projected Commencement Date. Upon
termination of this Lease pursuant to this Subsection 4.2, LANDLORD
shall refund to TENANT any construction deposits made by TENANT and the
Security Deposit and TENANT shall have no further liability for any
damage, costs or claims which arise in connection with the Premises and
this Lease.
5. Completion and Delivery. The Premises shall be ready for occupancy
(Ready for Occupancy) when construction is substantially completed in accordance
with the Final Plans, as reasonably determined by LANDLORD and as accepted by
TENANT, which acceptance shall not be unreasonably withheld. LANDLORD shall
prepare, certify by LANDLORD's signature and deliver in duplicate to TENANT a
written statement certifying (i) that the Premises are substantially completed
in accordance with the Final Plans and any properly authorized changes or
amendments thereof; and (ii) the date of such completion. LANDLORD shall
diligently complete any items of work not completed when the Premises are Ready
for Occupancy.
6. Early Entry. With the prior written consent of LANDLORD, TENANT may,
prior to the Actual Commencement Date as defined below, at TENANT'S sole risk,
enter the Premises and install trade fixtures and equipment in the Premises;
provided, however, that (i) TENANT'S early entry shall not interfere with
construction of the Premises or cause labor difficulties, (ii) TENANT shall by
reason of entry therein indemnify and hold harmless LANDLORD from any accident
or injury or any liability therefore that should befall TENANT or any agent or
subcontractor of TENANT. TENANT shall not use the Premises for storage of
inventory or otherwise do business on the Premises prior to the Actual
Commencement Date without the express prior written consent of LANDLORD.
36
EXHIBIT C
BUILDING FLOOR PLANS
[Attach Building Floor Plans]
37
EXHIBIT D
TENANT PREMISES
[Attach Tenant Premises]
38
EXHIBIT E
TENANT IMPROVEMENTS
A. Common Areas.
1. Definition. Common areas are defined to include entry ways,
general access hallways, stairways, elevators, rest rooms,
parking areas, landscaping areas and sidewalks.
a. Restricted common areas. (See rules & regulations)
2. Construction.
a. Entry ways, hallways, elevators and bathrooms will be
finished by LANDLORD with materials and colors
substantially similar to those depicted in the material
and color board which TENANT has previously reviewed.
b. Stairways, parking, landscaping and sidewalks will be
completed by LANDLORD but not according to the material
and color board.
B. Net Usable Areas - TENANT Premises.
1. Standard Improvement - TENANT Matrix.
a. Definition. Standard improvement are defined to include
the following items which will include all related
materials, labor, supervision and overhead to construct
the improvements.
(1) TENANT Standard Improvement - Typical Suite
Walls - metal studs and drywall
Paint - prime and finish coat (per color board)
Lighting Fixture - parabolic 2 x 4
Carpet - 30 oz (per color board)
Ceiling - 2/2 grid
Base - rubber (per color board)
Entry Doors - 3' x 8' oak (stained per color board)
Interior Doors - 3' x 6'8" oak veneer (stained per
color board)
Hardware - bright brass
HVAC service stubbed out to each TENANT'S space
Suspension system for ceiling grid
(2) TENANT Finish Improvements (per 1,000 sf).
39
Partitions - interior 73 lf/1,000 sf
Doors - Entry 1/3,000 sf
Lighting Fixture 10/1,000 sf
Electrical Outlets 8/1,000 sf
Electrical Light Switches 6/1,000 sf
Telephone Outlets 6/1,000 sf
HVAC Xxxx 00 xxxxx per floor
b. Construction. LANDLORD shall construct TENANT
Improvements per the Final Plans attached hereto as
Exhibit E2. LANDLORDS cost shall include all items as
referenced in the TENANT Matrix allowance. TENANTS cost
shall be for any improvements in excess of the TENANT
Matrix and shall be paid for by TENANT as provided for in
Optional Improvements below.
2. Optional Improvements.
a. Definition. Optional improvements are defined to be
improvements in excess of common area improvements plus
standard improvements to the net usable area.
b. Request. Optional improvements shall be requested by
TENANT in writing.
c. Construction. LANDLORD may, at LANDLORD'S option,
construct all optional improvements on the Premises.
d. Costs. The cost and expense for optional improvements
installed by LANDLORD shall be paid for by TENANT prior to
commencement of construction of said improvements unless
otherwise agreed to in writing by the parties. LANDLORD
has provided and TENANT has accepted the price of $7,300
as the cost for improvements to TENANT'S Premises in
excess of the TENANT Matrix. Payment of this amount by
TENANT has been deferred by LANDLORD to 90 days after
TENANT'S actual commencement date as defined in the Lease.
Section 18.7 of the Lease shall apply to any amounts not
paid to LANDLORD in the time period provided for herein.
40
EXHIBIT E1
PRELIMINARY TENANT SPACE PLAN
[Attach Preliminary Space Plan When Complete]
41
EXHIBIT F
SITE PLAN
[Attach Site Plan]
42
EXHIBIT F
RULES AND REGULATIONS
43
EXHIBIT G
CORPORATE GUARANTEE
In consideration of the execution of said Lease by LANDLORD, for the premises
located at 00000 Xxxxx Xxxxxx Xxxxxxx, the undersigned hereby unconditionally
and irrevocably guarantees the full performance of each and all of the terms,
covenants and conditions of said Lease to be kept and performed by said
XXXXXXXXXX.XXX, INC. (TENANT), including the payment of all rentals and other
charges to accrue. The undersigned further agrees as follows:
1. That this covenant and agreement on its part shall continue in
favor of the LANDLORD notwithstanding any extension, modification or
alteration of said Lease entered into by and between LANDLORD and TENANT,
or their successors and assigns, or notwithstanding any assignment of said
Lease, with or without the consent of LANDLORD, and no extension,
modification, alteration or assignment of the above referred to Lease shall
in any manner release or discharge the undersigned and the undersigned
hereby consents to same.
2. This Guarantee will continue unchanged by any bankruptcy,
reorganization or insolvency of the TENANT or any successor or assignee
thereof or by any disaffirmance or abandonment by a trustee of TENANT.
3. LANDLORD, may, without notice, assign this Guaranty in whole
or in part and no assignment or transfer of the Lease shall operate to
extinguish or diminish the liability of the undersigned.
4. The liability of the undersigned under this Guaranty shall be
primary, and in any right of action which shall accrue to LANDLORD under
the Lease, the LANDLORD may at its option, proceed against the undersigned
without having commenced any action, or having obtained any judgment
against the TENANT.
5. To pay LANDLORD'S reasonably attorneys` fees and all costs and
other expenses incurred in any collection or attempted collection or in any
negotiations relative to the obligations hereby guaranteed or enforcing
this Guarantee against the undersigned, individually and jointly.
6. The undersigned hereby waives notice of any demand by the
LANDLORD, as well as any notice of default in the payment of rent or any
other amount contained or reserved in the Lease.
If Guarantor shall be a Corporation, the authorized officers must sign on
behalf of the corporation and indicate the capacity in which they are signing.
This Guaranty must be executed by the president or vice-president and the
secretary or assistant secretary unless the bylaws or a resolution of the board
of directors shall otherwise provide, in which event the bylaws or a certified
copy of the resolution, as the case may be must be attached to this Lease.
44
The use of the singular herein shall include the plural. The obligation of
two (2) or more parties shall be joint and several. The terms and provisions of
this Guaranty shall be binding upon and inure to the benefit of the respective
successors and assigns of the parties herein named.
XXXXXXXXXX.XXX, INC.
By:______________________________________
By:_______________________________________
