EXHIBIT 10.23
COMMERCIAL AND INDUSTRIAL LEASE
J&J INVESTMENTS; LANDLORD AND CONTRACT SERVICE, INC; TENANT
COMMERCIAL AND INDUSTRIAL LEASE
THIS LEASE made and entered into this 1ST day of March, 1997, by and between J&J
INVESTMENTS hereinafter called "Landlord," and CONTRACT SERVICE, INC.
hereinafter called "Tenant."
WITNESSETH:
In consideration of the covenants and promises contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is agreed by the parties hereto as follows:
I. DEFINITIONS:
1. DEMISED PREMISES:
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
all those certain premises consisting of a two-story masonry block building
containing approximately 21,000 square feet, situated on a parcel of land in a
complex known as 3210 and 0000 Xxxxxxxxxx Xxxxxx (240 West 3222 South) in the
City of South Salt Lake, State of Utah (the Demised Premises') for the term and
upon the rental herein set forth. The complex commonly known as 3210 and 0000
Xxxxxxxxxx Xxxxxx, Xxxxx Xxxx Xxxx Xxxx, Xxxx, is shown on Exhibit A attached
hereto ( the 'Complex').
Tenant shall also have the right to the exclusive use of the fenced yard and
parking areas located on the property of the Complex fronting on Washington
Street and the joint use of the fenced yard located at the rear of the property
of the Complex fronting on 000 Xxxx Xxxxxx with any other tenants of the
property of the Complex. However, this right shall be subject to the exclusive
control and management of Landlord. Landlord shall have the right, from time to
time, to establish and modify and enforce reasonable rules and regulations with
respect to parking."
2. PROPORTIONATE SHARE:
As used in Section III, paragraphs 1 (a), 3, 5 and 6 and elsewhere
herein, "proportionate share" or "tenant's share" means that fraction, the
numerator of which is the number of square
feet leased by the Tenant in the Demised Premises and the denominator which is
the number of square feet in the Complex.
II. TERM:
TO HAVE AND TO HOLD said premises unto Tenant for a term of five years
beginning on 1st day of March, l997, and ending on the 28th day of February,
2002.
III. TERMS AND CONDITIONS OF LEASE:
This Lease is made on the following terms and conditions, which are
expressly agreed to by Landlord and Tenant:
1. BASE RENT: The Tenant agrees to pay as base rental to Landlord, at the
address specified in this Lease or at such other place Landlord may from
time to time designate in writing, the sum of: SIX HUNDRED SIXTY SEVEN
THOUSAND FIFTY SIX AND 00/100 DOLLARS ($667,056). Said sum to be lawful
money of the United States payable as follows: $ 17,560 less $2,620 (a
previous deposit received) shall be paid upon the execution of this
Lease of which $10,060.00 represents the first month's rent and of which
$7500.00 represents the security deposit. Then beginning on April 1,
1997 and until February 28, 1998 Tenant shall pay Landlord the sum of
$10,060.00. Then beginning March 1, 1998 and on the first day of the
month of each month thereafter until February 28, 1999 the Tenant shall
pay $10,563.00 to the Landlord. Then beginning on March 1, 1999 and on
the first day of each month thereafter until February 28, 2000 the
Tenant shall pay $11,091.00 to the Landlord. Then beginning March 1,
2000 and on the first day of each month thereafter until February 28,
2001 the Tenant shall pay $11,646.00 to the Landlord. Then beginning
March 1, 2001 and on the first day of each month thereafter until
February 28, 2002 the Tenant shall pay $12,228.00 to the Landlord.
(a) ADDITIONAL RENT: In addition to Tenant's monthly base rent, Landlord
will collect from Tenant its proportionate share of the operating
expenses attributable to the Demised Premises on a monthly basis. The
following items are included as operating expenses:
1. Real estate taxes
2. Fire and liability insurance
3. Common utilities and water and sewer charges
The estimated cost for 1997 is 3.55 cents per square foot or $745 per
month. At year
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end the actual operating costs shall be determined by Landlord and any
adjustment in such estimate shall be made with appropriate additional
payments by or refunds to Tenant, as appropriate.
(b) SECURITY DEPOSIT: Tenant contemporaneously with the execution of
this lease, has deposited with Landlord the sum of $7500.00
receipt of which is hereby acknowledged by Landlord, said
deposit being given to secure the faithful performance by the
Tenant of all of the terms, covenants and conditions of this
lease by the Tenant to be kept and performed during the term
hereof. Tenant agrees that if the Tenant shall fail to pay the
rent herein reserved promptly when due, said deposit may, at the
option of the Landlord (but Landlord shall not be required to)
be applied to any rent due and unpaid, and if the Tenant
violates any of the other terms, covenants and conditions of
this Lease, said deposit shall be applied to any damages
suffered.
Nothing contained in this paragraph shall in any way diminish or
be construed as waiving any of the Landlord's other remedies as
provided herein, or by law. If the security deposit is applied
by Landlord for the payment of overdue rent or other sums due
and payable to Landlord by Tenant hereunder, then Tenant shall,
on the written demand of Landlord, forthwith remit to Landlord a
sufficient amount in cash to restore said security deposit to
its original amount, and Tenant's failure to do so within
fifteen (15) days after receipt of such demand, shall constitute
a breach of this lease. Should Tenant comply with all of the
terms, covenants and conditions of this lease and promptly pay
all of the rental herein provided for as it falls due, and all
other sums payable by Tenant to Landlord hereunder, said
security deposit shall be returned in full to Tenant at the end
of the term of this lease, or upon the earlier termination of
this lease pursuant to the provisions hereof, except in the
event the demised premises are sold as a result of the exercise
of any power of sale under any mortgage or deed of trust, in
which event this lease shall be automatically amended to delete
any reference to this paragraph and Tenant shall be entitled to
immediate reimbursement of its security deposit from the party
then holding said deposit.
(c) LATE CHARGES: In the event Tenant fails to pay said rental
(including any additional rental due hereunder) within ten (10)
days of the due date, a late charge of ten percent (10%) shall
be due and payable to Landlord.
2. RENEWAL OPTIONS: Provided that the Tenant is not in default under this
Lease, Tenant shall have the option to renew the Term of this Lease as
to the entire Demised Premises for a period of (60) months (the "First
Renewal Term" ) to commence at the expiration of the initial Term of
this lease, and to renew the First Renewal Term of this Lease as to the
entire Demised Premises for an additional period of sixty (60) months
(the "Second Renewal
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Term") to commence at the expiration of the First Renewal Term. Tenant
must exercise its option to renew by delivering written notice of such
election to Landlord not less than six (6) months nor more than twelve
(12) months prior to the expiration of the Term or the First Renewal
Term, as applicable. Any such renewal of this Lease shall be upon the
same terms and condition of this Lease, except:
(a) The Leasehold improvements will be provided to Tenant in their
then-existing condition (on an "as is basis") at the time each
Renewal Term commences; and
(b) At the time the First Renewal Term and the Second Renewal Term
commence Landlord may adjust the Base Rent under the initial
term (i) during the first Renewal Term, up to the Prevailing
Market Rate, as hereinafter defined, and (ii) during the Second
Renewal Term, up to the Prevailing Market Rate. The term
"Prevailing Market Rate" shall mean the base rent per square
foot of rentable area being charged for similar space in
comparable premises in comparable location in Salt Lake City,
Utah at the time the Renewal Terms commence; notwithstanding
paragraph (b) above.
(c) During each Renewal Term, the Base Rate shall escalate by at
least five percent (5%) over the prior year's rental rate.
3. AUTHORIZED USE: Tenant shall use the Demised Premises for the following
purpose, and for no other purpose whatsoever, without the written
consent of Landlord first had and obtained: officing, sales, workshop,
sheet metal fabrication, warehousing distribution.
Tenant shall not commit or knowingly permit any waste of the Demised
Premises or use the same for any unlawful purpose. The Tenant will comply with
all applicable federal, state and local laws, ordinances and regulations
relating to the Demised Premises and its use and operation by the Tenant.
(a) Hazardous Material:
1. Tenant agrees not to keep, use or permit to be kept or
used on the Demised Premises any flammable fluids,
explosives or any "hazardous substance," "solid waste,"
or "hazardous waste" as said terms are defined in 42
U.S.C. 9601(14), and 40 C.F.R. 261.1 et seq. in
violation of applicable law without the prior written
permission of Landlord.
2. Tenant shall comply with all obligations imposed by
environmental laws and all other restrictions and
regulations upon the use, generation, storage or
disposal of Hazardous Materials by tenant, its agents or
employees at, to or from the Demised
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Premises.
3. Tenant shall deliver promptly to Landlord true and
correct copies of all notices received by Tenant from
any governmental authority with respect to the use,
generation, storage or disposal by Tenant of Hazardous
Materials at, to or from the Demised Premises and shall
immediately notify Landlord both by telephone and in
writing of any unauthorized discharge of Hazardous
Materials by Tenant that Tenant reasonably believes
imposes and imminent hazard to the Demised Premises, the
public or the environment.
4. Tenant shall complete fully, truthfully and promptly any
questionnaires sent by Landlord with respect to Tenant's
generation, storage and disposal of Hazardous Materials
at, to or from the Demised Premises, which
questionnaires are required by governmental authorities.
5. If Landlord conducts any environmental inspections as a
result of its reasonable belief that Tenant's activities
have or are likely to result in a violation of
environmental laws or a release of Hazardous Materials
on the Demised Premises and such violation by Tenant has
actually occurred, then Tenant shall pay to Landlord as
additional rent, the costs incurred by Landlord for such
inspections.
6. Tenant shall cease immediately upon notice form Landlord
any activity which violates any environmental laws.
7. After notice to and approval by Landlord, which approval
shall not be unreasonably withheld, Tenant shall
promptly remove, cleanup, dispose of or otherwise
remediate, in accordance with environmental laws and
good commercial practice, any Hazardous Materials on,
under or about the Demised Premises caused by Tenant's
acts on the Demised Premises.
8. Tenant agrees to indemnify, defend and hold Landlord and
its officers, partners, directors, shareholders,
employees and agents harmless from any claims,
judgments, damages, fines, penalties, costs, liabilities
( including sums paid in settlement of claims) or loss,
including attorneys' fees, consultants' fees, and expert
fees which arise during or after the term of this lease
or renewals thereof in connection with the presence of
Hazardous Materials in the soil, ground water or soil
vapor on or under the Demised Premises or the Complex
caused by the acts or negligent omissions of Tenant, its
officers, employees or agents. Without limiting the
generality of the foregoing, this indemnification
obligation of Tenant shall survive the expiration of
this Lease and specifically covers costs incurred in
connection with any investigation of site conditions or
any clean up,
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remedial, removal or restoration work required by any
federal, state or local governmental agency or political
subdivision because of the presence or suspected
presence of Hazard Materials in the soil, ground water
or soil vapor on or under the Demised Premises and the
Complex caused by the acts or negligent omissions of
Tenant, its officers, employees or agents.
(b) ADA. Tenant shall comply with the Americans with Disabilities
Act of 1990 (ADA) and the regulations promulgated thereunder
relating to any alterations, additions or improvements which
Tenant makes to the Demised Premises. Tenant hereby expressly
assumes all responsibility for compliance with the ADA relating
to the interior, non-structural portions of the Demised Premises
and Tenant's specific use of the Demised Premises. Any
alterations to the interior, non-structural portions of the
Demised Premises made by Tenant for the purpose of complying
with the ADA or which otherwise require compliance with the ADA,
shall be done in accordance with the provisions of this Lease;
provided, that Landlord's consent to such alterations shall not
constitute either Landlord's assumption, in whole or in part, of
Tenant's responsibility for compliance with the ADA, or a
representation or confirmation by Landlord that such alterations
comply with the provisions of the ADA."
4. PAYMENT OF TAXES AND OTHER ASSESSMENTS: Tenant shall pay its
proportionate share when they are due of all property taxes, license
fees and assessments levied or imposed which are attributable to the
Demised Premises or measured by the rent payable hereunder during the
term of this Lease or any extension thereof, by Federal, state,
municipal or other governmental authority excluding federal income tax
or gift tax; provided, however, that no law or practice postponing the
payment of such taxes, assessments or charges until after the
termination of this Lease shall relieve Tenant of the obligation to make
such payments. Payment of such taxes shall be made by Tenant to Landlord
not later than thirty (30) days following the date on which Landlord
provides Tenant with written evidence of such taxes in the form of a
copy of the tax return or notice. If Tenant fails to pay any of such
taxes, charges or other impositions when due, Landlord may pay the same
under the provisions of paragraph 20, hereinafter set forth. Anything
herein to the contrary notwithstanding, if Tenant deems excessive or
illegal any such tax or assessment, Tenant may defer payment thereof so
long as the validity or the amount thereof is contested by Tenant in
good faith, in which case Tenant shall furnish to Landlord a bond, in
form reasonably satisfactory to Landlord, in an amount equal to the
amount of taxes or assessments so contested, w bond shall guarantee the
payment thereof with interest and penalties thereon.
5. CONDITION OF THE PREMISES: Tenant accepts the Demised Premises in the
condition they are in at the time of its taking thereof. Tenant agrees,
if, during the term of this Lease, Tenant shall change the usual method
of conducting Tenant's business on the Demised Premises, or should
Tenant install thereon or therein any new facilities, Tenant will, at
the sole cost and expense of Tenant, make alterations or improvements in
or to the
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Demised Premises which may be required by reason of any Federal or state
law, or by any municipal ordinance, oprr regulation applicable thereto.
Landlord warrants that the building, on date of occupancy, meets all
currently applicable Federal, state and municipal laws and ordinances.
6. TENANT'S PAYMENT FOR PROPERTY INSURANCE: Tenant shall pay its
proportionate share of insurance maintained by the Landlord which are
attributable to the Demised Premises against the perils of fire, the
"extended coverages", vandalism and mischief, and all risks to the
building as well as coverage for six months rent loss due to business
interruption from the covered risks. The amount of insurance coverage
shall be in an amount equal to ninety percent (90%) of the replacement
value of the Demised Premises. Tenant shall be responsible for any
damage to premises as a result of forced entry into the Demised Premises
or burglary thereof. Also, Tenant shall maintain insurance coverage for
Tenant's personal property improvements, and alterations to the
premises. This insurance shall cover the same risks and shall be for the
same percentage of replacement value as the insurance maintained by the
Landlord. The proceeds from such insurance shall be used to replace
Tenant's personal property and to restore its improvements and
alterations. Both Landlord and Tenant shall be named as coinsureds for
this coverage maintained by the Tenant. Landlord shall be given thirty
(30) days notice prior to cancellation or termination of this insurance
policy.
7. REPAIR AND CARE OF BUILDING AND PAYMENT OF UTILITIES BY TENANT: Tenant
shall pay all charges, when due, including but not limited to charges
for water, heat, gas, electricity and other public utilities used on the
Demised Premises, including all replacements of light bulbs, tubes,
ballasts and starters within a reasonable time after they burn out.
Tenant agrees, at its sole cost and expense, to keep the interior of the
Demised Premises and the grounds outside the Demised Premises in good
condition, and to keep the sidewalks, driveways and parking lots of the
Demised Premises free from snow and ice, and agrees to pay for all
labor, materials and other repairs to, and replacement of, the
electrical wiring, plumbing, air-conditioning and heating systems.
Tenant shall also be responsible to clean and paint the interior of the
Demised Premises such that it is returned to Landlord in the same
condition as received by Tenant, normal wear and tear excepted.
Tenant also agrees to pay its proportionate share for:
1. Mowing of grass, care of shrubs, and general
landscaping, if any;
2. The cleaning and painting of the exterior of the
premises as reasonably deemed desirable by the Landlord
for maintaining the Demised Premises in a clean,
attractive and sanitary condition; and
3. The removal of snow and ice, as may be reasonably
possible, from driveways and
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parking lots.
8. REPAIR OF BUILDING BY LANDLORD: Landlord agrees for the term of this
Lease, at Landlord's sole cost and expense to maintain the roof in good
condition and repair, and to repair any latent defects in the exterior
walls, floor joists, and foundations, and to repair any defects or any
damage that might result from acts of Landlord or Landlord's
representatives. Landlord shall not, however, be obligated to repair any
such damage until written notice of the need of repair shall have been
given to Landlord by Tenant and, after such notice is so given, Landlord
shall have a reasonable time in which to make such repairs.
9. ALTERATIONS OF BUILDING AND INSTALLATION OF FIXTURES AND OTHER
APPURTENANCES: Tenant may, with written consent of Landlord, which
consent shall not be unreasonably withheld or delayed, but at Tenant's
sole cost and expense in a good and workmanlike manner, make such
alterations and repairs to the Demised Premises as Tenant may require
for the conduct of its business without, however, materially altering
the basic character of the building or improvements, or weakening any
structure on the Demised Premises. Tenant shall have the right, with the
written permission of Landlord, to erect, at Tenant's sole cost and
expense, such temporary partitions, including office partitions, as may
be necessary to facilitate the handling of Tenant's business and to
install telephone and telephone equipment and wiring, and electrical
fixtures, additional lights and wiring and other trade appliances. Any
alterations or improvements to the Demised Premises, including
partitions, all electrical fixtures, lights and wiring shall, at the
option of Landlord, become the property of Landlord, at the expiration
or sooner termination of this Lease. Should Landlord request Tenant to
remove all or any part of the above mentioned items, Tenant shall do so
prior to the expiration of this Lease and repair the Demised Premises as
described below. Temporary moveable shelves, bins, and machinery
installed by Tenant shall remain the property of Tenant and may be
removed by Tenant at any time; provided, however, that all covenants,
including rent due hereunder to Landlord shall have been complied with
and paid. At the expiration or sooner termination of this Lease, or any
extension thereof, Tenant shall remove said shelves, bins and machinery
and repair, in a good workmanlike manner, all damage done to the Demised
Premises by such removal.
10. ERECTION AND REMOVAL OF SIGNS: Tenant may, if building policy and city
ordinances permit, place suitable signs on the Demised Premises for the
purpose of indicating the nature of the business carried on by Tenant in
said premises; provided, however that such signs shall be in keeping
with other signs in the district where the Demised Premises are located;
and provided, further, that the location and size of such signs shall be
approved by Landlord prior to their erection. Signs shall be removed
prior to the expiration of this lease and any damage to the Demised
Premises caused by installation or removal of signs shall be repaired at
expenses of the Tenant. All work shall be completed in a good
workmanlike manner.
11. GLASS: Tenant agrees to immediately replace, at its sole cost and
expense, all glass into
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the Demised Premises if broken or damaged during the term of this Lease
with glass of the same quality as that broken or damaged.
12. RIGHT OF ENTRY BY LANDLORD: Tenant, shall permit inspection of the
Demised Premises during reasonable business hours by Landlord or
Landlord's agents or representatives for the purpose of ascertaining the
condition of the Demised Premises and in order that Landlord may make
such repairs as may be required to be made by Landlord under the terms
of this Lease. Sixty (60) days prior to the expiration of this Lease,
Landlord may post suitable notice on the Demised Premises that the same
are "For Rent" an may show the Demised Premises to prospective tenants
at reasonable times. Landlord may not, however, thereby unnecessarily
interfere with the use of Demised Premises by Tenant.
13. ASSIGNMENT AND SUBLETTING: Neither this Lease nor any interest herein
may be assigned by Tenant voluntarily or involuntarily, or by operation
of law, and neither all nor any part of the Demised Premises shall be
sublet by Tenant without the written consent of Landlord first had or
otherwise obtained; however, Landlord agrees not to withhold its consent
unreasonably for Tenant to assign or sublet the Demised Premises. In the
event the Demised Premises should be sublet, as herein provided, at an
increased rental, fifty (50%) percent of said increase shall be paid to
Landlord by Tenant as additional rental. Any assignment or subletting
shall not release Tenant from its obligations under this lease.
Notwithstanding the preceding paragraph, Tenant may transfer, assign or
sublet this Lease to an "Affiliate," as hereinafter defined, without
Landlord's consent. An Affiliate shall mean (i) a person or entity that
controls or is controlled by or under common control with Tenant, (ii) a
person or entity that survives a merger or consolidation with or into
Tenant and (iii) a person or entity to which all or substantially all of
the assets of Tenant may be sold, transferred or conveyed, whether by
operation of law, by contract or otherwise. The term "control" means,
with respect to an entity, the ownership, directly or indirectly, of
more than fifty percent (50%) of the voting securities of such entity,
or the power to direct the management or policies of such entity,
whether by operation of law, by contract or otherwise. With respect to
either party's assignment or subletting permitted hereunder without the
other party's consent, the assigning party shall provide written notice
of such assignment or subletting to the other party within thirty (30)
days of the effective date of such assignment or sublet.
14. DAMAGE OR DESTRUCTION: If the Demised Premises or any part thereof shall
be damaged or destroyed by fire or other casualty, Landlord shall
promptly repair all such damage and restore the Demised Premises without
expense to Tenant, subject to delays due to adjustment of insurance
claims, strikes and other causes beyond Landlord's control. If such
damage or destruction shall render the Demised Premises untenable in
whole or in part, the rent shall be abated wholly or proportionately as
the case may be until the damage shall be repaired and the Demised
Premises restored. If the damage or destruction shall be so extensive as
to require the substantial rebuilding, i.e., expenditure of fifty (50%)
percent
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or more of replacement cost of the building or buildings on the demised
premises, Landlord or Tenant may elect to terminate this Lease by
written notice to the other given within thirty (30) days after the
occurrence of such damage or destruction. Landlord and Tenant hereby
release each other from responsibility for loss or damage occurring on
or to the Demised Premises or the premises of which they are a part or
to the contents of either thereof, caused by fire or other hazards
ordinarily covered by fire and extended coverage insurance policies and
each waives all rights of recovery against the other for such loss or
damage. Willful misconduct lawfully attributable to either party,
whether in whole or in part a contributing cause of the casualty giving
rise to the loss or damage, shall not be excused under the foregoing
release and waiver.
15. INJURIES AND PROPERTY DAMAGE: Tenant agrees to indemnify and hold
harmless Landlord of and from any and all claims of any kind or nature
arising from Tenant's use of the Demised Premises during the term
hereof, and Tenant hereby waives all claims against Landlord for damage
to goods, xxxx, merchandise or for injury to persons in and upon the
Demised Premises from any cause whatsoever, except such as might result
from the negligence of Landlord or Landlord's representatives or from
failure of Landlord to perform its obligation hereunder within a
reasonable time after notice in writing by Tenant requiring such
performance by Landlord. Tenant shall at all times during the term
hereof keep in effect in responsible companies, acceptable to Landlord,
liability insurance in the names of and for the benefit of Tenant and
Landlord with limits as follows:
Bodily Injury, $2,000,000.00 each occurrence; Property Damage,
$100,000.00; or in lieu thereof, a combined limit of bodily
injury and property damage liability of not less than
$2,000,000.00.
Such insurance may, at Tenant's election, be carried under any general
blanket coverage of Tenant. A renewal policy shall be procured not less than ten
(10) days prior to the expiration of any policy. Each original policy or a
certified copy thereof, or a satisfactory certificate of the insurer evidencing
insurance carried with proof of payment of the premium shall be provided by
Tenant upon the request of Landlord. Tenant shall have the right to settle and
adjust all liability claims and all other claims against the insuring companies,
but without subjecting Landlord to any liability or obligation.
16. SURRENDER OF PREMISES: Tenant agrees to surrender the Demised Premises
at the expiration, or sooner termination, of the term of this Lease, or
any extension thereof, in the same condition as when said premises were
delivered to Tenant, or as altered, pursuant to the provisions of this
Lease, ordinary wear, tear and damage by the elements excepted, and
Tenant shall remove all of its personal property. Tenant agrees to pay a
reasonable cleaning charge should it be necessary for Landlord to
restore or cause to be restored the premises to the same condition as
when said premises were delivered to Tenant.
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17. HOLDOVER: Should the Landlord permit Tenant to holdover the Demised
Premises or any part thereof, after the expiration of the term of this
Lease, then and unless otherwise agreed in writing, such holding over
shall constitute a tenancy from month-to-month only, and shall in no
event be construed as a renewal of this Lease and all provisions of this
Lease not inconsistent with a tenancy from month-to-month shall remain
in full force and effect. During the month-to-month tenancy, Tenant
agrees to give Landlord thirty (30) days prior written notice of its
intent to vacate premises. Tenant agrees to vacate the premises upon
thirty (30) days prior written notice from Landlord. The rental for the
month-to-month tenancy shall be equal to 150% of the rental payable for
the last month of the previous term of this Lease.
18. QUIET ENJOYMENT: If and so long as Tenant pays the rents reserved by
this Lease and performs and observes all the covenants and provisions
hereof, Tenant shall quietly enjoy the demised premises, subject,
however, to the terms of this Lease, and Landlord will warrant and
defend Tenant in the enjoyment and peaceful possession of the demised
premises throughout the terms of this Lease.
19. WAIVER OF COVENANTS: The failure of any party to enforce the provisions
of this Lease shall not constitute a waiver unless specifically stated
in writing, signed by the party whose rights are deemed waived,
regardless of a party's knowledge of a breach hereunder.
20. DEFAULT: If Tenant shall make default in the fulfillment of any of the
covenants and conditions hereof except default in payment of rent,
Landlord may, at its option, after fifteen (15) days prior notice to
Tenant, make performance for Tenant and for the purpose advance such
amounts as may be necessary. Any amounts so advanced, or any expense
incurred, or sum of money paid by Landlord by reason of the failure of
Tenant to comply with any covenant agreement, obligation or provision of
this Lease, or in defending any action to which Landlord may be
subjected by reason of any such failure for any reason of this Lease,
shall be deemed to be additional rent for the Demised Premises and shall
be due and payable to Landlord on demand. The acceptance by Landlord of
any installment of fixed rent, or of any additional rent due under this
or any other paragraph of this lease, shall not be a waiver of any other
rent then due nor of the right to demand the performance of any other
obligation of the Tenant under this Lease. Interest shall be paid to
Landlord on all sums advanced by Landlord at an annual interest rate of
2% over the prime rate charged by FIRST SECURITY BANK.
If Tenant shall make default in fulfillment of any of the covenants or
conditions of this Lease (other than the covenants for the payment of
rent or other amounts) and any such default shall continue for a period
of thirty (30) days after notice, then Landlord may, at its option,
terminate this Lease by giving Tenant written notice of such termination
and, thereupon, this Lease shall expire as fully and completely as if
that day were the date definitely fixed for the expiration of the term
of this Lease and Tenant shall quit and surrender the Demised Premises.
21. DEFAULT IN RENT, INSOLVENCY OF TENANT: If Tenant shall make default in
the payment of the rent reserved hereunder, or any part thereof, or in
making any other payment
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herein provided for, and any such default shall continue for a period of
ten (10) days, after written notice to Tenant, or if the Demised
Premises or any part thereof shall be abandoned or vacated or if Tenant
shall be legally dismissed therefrom by or under any authority other
than Landlord, or if Tenant shall file a voluntary petition in
bankruptcy or if Tenant shall file any petition or institute any
proceedings under any insolvency or United States Bankruptcy Code or any
amendment thereto hereafter made, seeking to effect its reorganization
or a composition with its creditors, or if any proceedings based on the
insolvency of Tenant or relating to bankruptcy proceedings are commenced
and remain unstayed for forty-five (45) days, a receiver or trustee
shall be appointed for Tenant or the Demised Premises or if any
proceedings shall be commenced for the reorganization of Tenant or if
the leasehold estate created hereby shall be taken on execution or by
any process of law or if Tenant shall admit in writing its inability to
pay its obligations generally as they become due, then Landlord, in
addition to any other rights or remedies it may have, shall have the
immediate right of re-entry and may remove all persons and property from
the Demised Premises. Such property may be removed and stored in a
public warehouse or elsewhere at the cost of and for the account of
Tenant. Landlord may elect to reenter, as herein provided, or Landlord
may take possession pursuant to this Lease and relet the Demised
Premises or any part thereof for such term or terms (which may be for a
term extending beyond the term of this Lease) and at such rental or
rentals and upon such other terms and conditions as Landlord in the
exercise of Landlord's sole discretion may deem advisable with the right
to make alterations and repairs to said premises. Upon each subletting,
Tenant shall be immediately liable for and shall pay to Landlord, in
addition to any indebtedness due hereunder, the costs and expenses of
such reletting including advertising costs, brokerages fees, any
reasonable attorney's fees incurred and the cost of such alterations and
repairs incurred by Landlord, and the amount, if any, by which the rent
reserved in this Lease for the period of such reletting (up to but not
beyond the term of this Lease) exceeds the amount agreed to be paid as
rent for the Demised Premises for said period by such reletting. If
Tenant has been credited with any rent to be received by such reletting
and such rents shall not be promptly paid to Landlord by the new Tenant,
such deficiency shall be calculated and paid monthly by Tenant. No such
re-entry or taking possession of the Demised Premises by Landlord shall
be construed as an election by Landlord to terminate this Lease unless
the termination thereof be decreed by a court of competent jurisdiction
or stated specifically by the Landlord in writing addressed to Tenant.
Notwithstanding any such reletting without termination, Landlord may at
any time thereafter elect to terminate this Lease for such previous
breach. Should Landlord at any time terminate this Lease for any breach,
in addition to any other remedy Landlord may have, Landlord may recover
from Tenant all damages Landlord may incur by reason of such breach,
including the cost of recovering the Demised Premises including
attorney's fees, court costs, and storage charges and including the
worth at the time of such termination of the excess, if any, of the
amount of rent and charges equivalent to rent reserved in this Lease for
the remainder of the stated term over the then chargeable rent on the
premises for the remainder of the stated term, all of which amounts
shall be immediately due and payable from Tenant to Landlord. In no
event, shall this Lease or any rights or privileges hereunder be an
asset of Tenant under any bankruptcy, insolvency or reorganization
proceedings.
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22. ENFORCEMENT: In the event either party shall enforce the terms of this
Lease by suit or otherwise, the party at fault shall pay the costs and
expenses incident thereto, including reasonable attorney's fees.
23. FAILURE TO PERFORM COVENANT: Any failure on the part of either party to
this Lease to perform any obligations hereunder, other than Tenant's
obligation to pay rent, and any delay in doing any act required hereby
shall be excused if such failure or delay is caused by any strike,
lockout, governmental restriction or any similar cause beyond the
control of the party so failing to perform, to the extent and for the
period that such continues.
24. RIGHTS OF SUCCESSORS AND ASSIGNS: The covenants and agreements contained
in this Lease will apply to, inure to the benefit of, and be binding
upon the parties hereto, their heirs, distributees, executors,
administrators, legal representatives, permitted assigns, and upon their
respective successors in interest except as expressly otherwise
hereinabove provided.
25. TIME: Time is of the essence of this Lease and every term, covenant and
condition herein contained.
26. LIENS: Tenant agrees not to permit any lien for monies owing by Tenant
to remain against the Demised Premises for a period of more than thirty
(30) days following discovery of the same by Tenant; provided, however,
that if tenant posts a bond in the amount of the lein nothing herein
contained shall prevent Tenant, in good faith and for good cause from
contesting the claim or claims of any person, firm or corporation
growing out of Tenant's operation of the Demised Premises or costs of
improvements by Tenant on the said premises, and the postponement of
payment of such claim or claims, until such contest shall finally be
decided not to be a violation of this Lease or any covenant thereof.
Should any such lien be filed and not released or discharged or action
not commenced to declare the same invalid within thirty (30) days after
discovery of the same by Tenant, Landlord may at Landlord's option (but
without any obligation so to do) pay and discharge such lien and may
likewise pay and discharge any taxes, assessments or other charges
against the Demised Premise which Tenant is obligated hereunder to pay
and which may or might become a lien on said premises. Tenant agrees to
repay any sum so paid by Landlord upon demand therefor, as provided for
in paragraph 20 herein.
27. SUBORDINATION: This Lease shall be subject and subordinate to all
mortgages, deeds of trust and related security instruments which may now
or hereafter encumber the Demised Premises and to all renewals,
modifications, consolidations, replacements and extensions thereof and
to each advance made thereunder, provided that Tenant has received from
the holder thereof an agreement that Tenant will not be disturbed in its
possession of the Demised Premises, or have its rights under this Lease
modified or terminated other than pursuant to the terms of this Lease.
In the event of the enforcement by the trustee or the beneficiary under
any such mortgage or deed of trust of the remedies provided for by law
or by such mortgage or deed of trust, Tenant will, upon the request of
any person or party succeeding to the interest of said trustee or
beneficiary as a result of such enforcement (and
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subject to the aforesaid recognition of Tenant's rights under the
Lease), automatically become the tenant of, and attorn to, such
successor in interest without change in the terms or provisions of this
Lease.
28. DEFAULT BY LANDLORD: Except where the provisions of this Lease grant
Tenant an express, exclusive remedy, or expressly deny Tenant a remedy,
if:
(a) Landlord fails to pay amount payable by Landlord hereunder and
such failure to pay continues and remains unremedied for a
period of fifteen (15) days after written notice thereof given
by Tenant to Landlord; or
(b) Landlord fails to perform or observe any covenant, term,
provision or condition of this Lease that interferes in any
material respect with Tenant's use and enjoyment of the Demised
Premises, and such failure continues for a period of thirty (30)
days after written notice thereof given by Tenant to Landlord;
provided, however, if the nature of the default is such that it
cannot be cured with the exercise of Landlord's reasonable and
good faith efforts within the thirty (30) day period, Landlord
shall have up to ninety (90) days from the date of Tenant's
notice to cure such default, provided Landlord undertakes such
curative action within the thirty (30) day period and diligently
and continuously proceeds with such curative action using
Landlord's reasonable and good faith efforts;
then, Tenant may deliver a second notice to Landlord, and if such default shall
continue uncured by Landlord and/or its mortgagee for an additional thirty (30)
days after the delivery of such second notice, Tenant shall have the right to
exercise one or more of the following options, but not (i) and (ii)
simultaneously: (i) Tenant may cure the default which, in the case of a monetary
default, may be effected by the withholding of or offsetting against rent, and
Landlord shall reimburse Tenant (which reimbursement may be effected through the
withholding of or offsetting against rent) for all reasonable sums expended in
so curing said default, (ii) Tenant may terminate this Lease and (iii) Tenant
may pursue all other remedies at law or in equity to which Tenant may be
entitled. Tenant may not terminate this Lease because of Landlord's default
unless specifically permitted pursuant to this paragraph or unless otherwise
specifically provided in this Lease. Tenant specifically agrees that the cure of
any default by and Landlord mortgagee shall be deemed a cure by Landlord under
this Lease.
29. CONSTRUCTION OF LEASE: Words of any gender used in this Lease shall be
held to include any other gender, and words in the singular number shall
be held to include the plural when the sense requires.
30. SIGNING OF DOCUMENTS: Tenant shall sign and deliver any instrument or
documents necessary or appropriate to evidence any such attornment or
subordination or agreement to do so. Such subordination and attornment
documents may contain such provisions as are customarily required by any
ground Landlord, beneficiary under a deed of trust or mortgagee. If
Tenant fails to do so within ten (10) days after written request, Tenant
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hereby makes, constitutes and irrevocably appoints Landlord, or any
transferee successor of Landlord, the attorney-in-fact of Tenant to
execute and deliver any such instrument or document.
31. ESTOPPEL CERTIFICATES:
(a) Upon Landlord's written request, Tenant shall execute,
acknowledge and deliver to Landlord a written statement
certifying: (i) that none of the terms or provisions of this
Lease have been changed (or if they have been changed, stating
how they have been changed); (ii) that this Lease has not been
canceled or terminated; (iii) the last date of payment of the
Base Rent and other charges and the time period covered by such
payment; (iv) that Landlord is not in default under this Lease
(or, if Landlord is claimed to be in default, stating why); and
(v) such other matters as may be reasonably required by Landlord
or the holder of a mortgage, deed of trust or lien to which the
Property is or becomes subject. Tenant shall deliver such
statement to Landlord within ten (10) days after Landlord's
request. Any such statement by Tenant may be given by Landlord
to any prospective purchaser or encumbrancer of the Property.
Such purchaser or encumbrancer may rely conclusively upon such
statement as true and correct.
32. TENANT'S FINANCIAL CONDITION: Within ten (10) days after written request
from Landlord, Tenant shall deliver to Landlord most recent financial
statements made as are reasonably required by Landlord to verify the net
worth of Tenant, or any assignee, subtenant, or guarantor of Tenant. In
addition, Tenant shall deliver to any lender designated by Landlord any
financial statements required by such lender to facilitate the financing
or refinancing of the Property. Tenant represents and warrants to
Landlord that each such financial statement is a true and accurate
statement as of the date of such statement. All financial statements
shall be confidential and shall be used only for the purposes set forth
herein.
33. PARAGRAPH HEADINGS: The paragraph headings as to the contents of
particular paragraphs herein, are inserted only for convenience and are
in no way to be construed as part of such paragraph or as a limitation
on the scope of the particular paragraph to which they refer.
34. NOTICES: It is agreed that all notices required or permitted to be given
hereunder, or for purposes of billing, process, correspondence, and any
other legal purposes whatsoever, shall be deemed sufficient if given by
a communication in writing by United States mail, postage prepaid and
certified and addressed as follows:
If to Landlord, at the following address:
J&J investments
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0000 XxxxxXxxxxx Xxx
Xxxxxxxxx, Xxxx 00000
(000) 000-0000
If to Tenant, at the following address:
Contract Service Inc.
XX Xxx 00000
Xxxx Xxxx Xxxx, Xxxx 00000-0000
35. GOVERNING LAW: The terms of this Agreement shall be governed by and
construed in accordance with Utah law.
36. DOCUMENTATION: The parties hereto agree to execute such additional
documentation as may be necessary or desirable to carry out the intent
of this Agreement.
37. CONTINGENCY REGARDING USE: This Lease is contingent upon there being no
restrictions, covenants, agreements, laws, ordinances, rules or
regulations, which would prohibit Tenant from using the above described
premises for the purposes described herein.
38. INDEMNIFICATION OF LANDLORD: Tenant, as a material part of the
consideration to be rendered to Landlord under this Lease, shall hold
Landlord exempt and harmless from any damage or injury to any person, or
the goods, wares and merchandise of any person, arising from the use of
the Demised Premises by Tenant, or from the failure of the Tenant to
keep the premises in good condition and repair, as herein provided.
39. EMINENT DOMAIN: If at any time during the term of this Lease the entire
Demised Premises or any part thereof shall be taken as a result of the
exercise of the power of eminent domain or by an agreement in lieu
thereof, this Lease shall terminate as to the part so taken as of the
date possession is taken by the condemning authority. If all or any
substantial portion of the Demised Premises shall be taken, Landlord may
terminate this Lease at its option, by giving Tenant written notice of
such termination within thirty (30) days of such taking. If all or a
portion of the premises taken are so substantial that Tenant's use of
the Demised Premises is substantially impaired, Tenant may terminate
this Lease pursuant to this Article. Unless terminated as herein
provided for, this Lease shall remain in full force and effect, except
that the rent payable by Tenant hereunder shall be reduced in the
proportion that the area of the premises so taken bears to the total
premises. Landlord shall be entitled to and Tenant hereby assigns to
Landlord the entire amount of any award in connection with such taking.
Nothing in this Article shall give Landlord any interest in or preclude
Tenant from seeking, on its own account, any award attributable to the
taking of personal property or trade fixtures belonging to Tenant, or
for the interruption of Tenant's business.
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41. ENTIRE AGREEMENT: This Lease constitutes the entire agreement and
understanding between the parties with respect to the subject matter
hereof and supersedes all prior discussions, understandings and
agreements.
42. REPRESENTATION REGARDING AUTHORITY: The persons who have executed this
Lease represent and warrant that they are duly authorized to execute
this Lease in their individual or representative capacity as indicated.
Amendment of this Lease may not be altered or amended except by a
subsequent written agreement executed by all of the parties hereto.
43. REVIEW OF DOCUMENTS: The parties hereto represent that they have read
and understand the terms of this Lease, and that they have sought legal
counsel to the extent deemed necessary in order to protect their
respective interests.
44. KEYS & LOCKS: Tenant, upon the termination of the Tenancy, shall deliver
to the Landlord all the keys to the offices, rooms and restrooms which
have been furnished to the Tenant.
45. AUCTION, FIRE OR BANKRUPTCY SALE: Tenant shall not conduct any auction
nor permit any fire or bankruptcy sale to be held on the Demised
Premises.
46. CARPETING DAMAGE AND CHAIRMATS: Tenant agrees to be responsible for the
replacement of carpeting in the Demised Premises.
47. MEDIATION AND ARBITRATION. If any dispute or claim in law or equity
arises out of this Lease, Tenant and Landlord agree in good faith to
attempt to settle such dispute or claim by mediation under the
Commercial Mediation rules of the American Arbitration Association. If
such mediation is not successful in resolving such dispute or claim,
then such dispute or claim shall be decided by neutral binding
arbitration before a single arbitrator in accordance with the Commercial
Arbitration rules of the American Arbitration Association in Salt Lake
City, Utah. Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. However, this
paragraph does not apply to disputes or claims arising under Section 78,
Chapter 36, of the Utah Code.
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IN WITNESS WHEREOF, the parties hereto have caused these presents to be
executed as of the day and year first above written.
LANDLORD: TENANT:
J&J INVESTMENTS CONTRACT SERVICE, INC.
BY: ____________________________ BY: ____________________________
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