Exhibit 10(aa)
COMMERCIAL LEASE
THIS LEASE (the "Lease") dated this 11th day of September, 1996, is entered
into by and between DRAPER LAND PARTNERSHIP II, a Utah Limited Partnership
("Landlord"), and I-LINK, INC., a Corporation ("Tenant").
1. PREMISES.
(a) Description. Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, for the term and subject to the terms and conditions hereinafter
set forth, to each and all of which Landlord and Tenant hereby mutually agree,
those certain premises (the "Premises"), highlighted on Exhibit A attached
hereto, which include approximately 13,984 Rentable square feet of office space
as per space plan to be approved by Landlord and Tenant (the exact Rentable
square footage and location on the second floor to be determined by final space
plan). The location of the Premises is commonly known as: Building "D" at 00000
Xxxxx Xxxxxxxxx Xxxx Xxxxx, Xxxxxx, XX, 00000 (the "Building").
(b) Additional Use. In addition, the Premises shall include the appurtenant
right to use, in common with others, the site, parking and landscaped areas.
Landlord shall provide Tenant, at no additional charge, the use of 56 non-
reserved parking stalls in the adjacent parking lot.
(c) Acceptance of Premises. Unless otherwise notified by Tenant within
thirty (30) days of taking possession, by entry hereunder Tenant accepts the
Premises as being in the condition in which Landlord is obligated to deliver the
Premises. Tenant shall at the end of the term and any extension herein surrender
to Landlord the Premises and all alterations, additions and improvements thereto
in the same condition as when received; ordinary wear and tear, damage by fire,
earthquake, or act of God excepted. Landlord has no liability and has made no
representation to alter, improve, repair, or paint the Premises or any part
thereof, except as specified in Article 2(c), 2(d) & 6 herein.
2. TERM, OPTION, TENANT IMPROVEMENTS.
(a) Lease Term. The initial Lease Term shall be seven (7) years and shall
commence November 5, 1996 ("Commencement Date"), which Commencement Date is
subject to substantial completion of Tenant Improvements. If Landlord is solely
responsible for not delivering possession of the Premises to Tenant within
forty-five (45) days of the Commencement Date, Tenant may upon ten (10) days
written notice terminate the Lease. In the event of Tenant's termination due to
late delivery, Landlord shall not be liable to Tenant for any damage of any kind
resulting from such late delivery or failure to deliver possession of the
Premises.
(b) Option. Provided that Tenant is not in default under the Lease, Tenant
may by written notice to Landlord, not later than one hundred eighty (180) days
prior to the expiration of the Lease, extend the Lease by exercising a (one-
time) 5-year option on a timely basis. Tenant shall possess the Premises during
the Option period upon the same terms and conditions of the Lease, except that
Base Rent under Article 4(a) herein will be adjusted
for the Option period to the then fair market rate for similar space in similar
condition in the surrounding area, whichever is less.
(c) Base Building Improvements. At Landlord's sole cost and expense,
Landlord shall design, construct and install the Building's roof and structural
elements ("Shell"), shall provide basis utility access to and an initial HVAC
unit for the Premises, and shall design and construct the common areas of the
Premises and Building, as more specifically outlined in Exhibit B -Base Building
Improvements (collectively "Base Building Improvements").
(d) Tenant Improvements. At execution of the Lease, Landlord shall commence
the building design, construction and installation of agreed-upon Tenant
Improvements requested by Tenant. Tenant is responsible for any costs of Tenant
Improvements above $ 16.00 per Useable square feet. Tenant Improvements' shall
include all improvements to the Premises, but exclude the Base Building
Improvements.
(e) Substantial Completion of Tenant Improvements. The Premises shall be
deemed complete when Landlord has substantially completed Tenant improvements.
"Substantial Completion" shall mean when (i) installation of Tenant Improvements
has occurred, (ii) Basic utility services are available to the Premises, (iii)
Landlord's Architect/Contractor shall have issued a Certificate of Substantial
Completion with respect to Premises or that portion of the Building within which
they are contained, whether or not Substantial Completion of the entire Building
itself shall have occurred, and (iv) issuance of a temporary Certificate of
Occupancy. Substantial Completion shall be deemed to have occurred
notwithstanding a requirement to complete "punch-list" work, which shall be
completed within a reasonable time by Landlord. Landlord shall use its best
efforts to advise Tenant of Substantial Completion at least thirty (30) days
prior to such date, but the failure to give such notice shall not constitute a
default hereunder by Landlord.
3. NON-OCCUPANCY OF IMPROVED SPACE.
In the event Tenant does not occupy the Premises and fails to pay Rents as
required in Article 4 of the Lease, all costs for Tenant Improvements become due
and payable upon invoicing by Landlord, subject to reasonable mitigation by
Landlord for use with next tenant. Further, such invoicing by Landlord does not
waive any other rights or remedies Landlord may have against Tenant for failure
to occupy.
4. RENT.
(a) Base Rent. Total Base Rent shall be $9.75 per Rentable square foot X
13,984( square feet X 7 years ($954,408(, subject to an annual increase as
provided below), payable as follows: $11,362( per month payable in advance on or
before the 1st day of each month during the duration of the Lease, with the
first such monthly rental payments being due upon the execution of the Lease.
This Base Rent is estimated herein since the square footage is approximated. The
exact Base Rent will be determined according to the square footage stated in the
final space plan. Any partial months shall be prorated accordingly. Base Rent
under this Article shall be increased four (4%) percent per year during the
Lease Term and during any Option period (after adjustment to fair market value
at beginning of any Option period). Base Rent during the Term of the Lease shall
never decrease. All Base Rent and Additional Rent (collectively "Rents") shall
be paid as follows, unless
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otherwise directed in writing: Draper Land Partnership II; Attn: Xxx Xxxxxxxxx;
00 Xxxx Xxxxxxxxx Xxxx Xx., Xxxxxx, XX 00000.
(b) Additional Rent. All obligations payable by Tenant under the Lease
other than Base Rent are called "Additional Rent". Additional Rent shall be paid
monthly with Base Rent pursuant to the Lease, unless otherwise invoiced by
Landlord.
(c) Interest, Late Charges, Costs and Attorneys' Fees. If Tenant fails to
pay within fifteen (15) days of the date due any Rents which Tenant is obligated
to pay under the Lease, the unpaid amount shall bear interest at fifteen (15%)
percent per annum. Tenant acknowledges that any late payments of Rents shall
cause Landlord to lose the use of that money and incur costs and expenses not
contemplated under the Lease, including without limitation administrative,
collection and accounting costs, the exact amount of which is difficult to
ascertain. Further, as Additional Rent, Tenant shall be liable to Landlord for
costs and attorneys' fees incurred as a result of late payments or non-payments.
Acceptance of any interest, late charge, costs or attorneys' fees shall not
constitute a waiver of any default by Tenant nor prevent Landlord from
exercising any other rights or remedies under the Lease or at law.
5. USE.
(a) The Premises shall be used for general office use, and any other lawful
purpose incidental to Tenant's business, and no other, unless consented to in
writing by Landlord. Tenant shall not do or permit to be done in or about the
Premises or Building anything which is prohibited by or in any way in conflict
with any and all laws, statutes, ordinances, rules and regulations now in force
or which may hereafter be enacted or promulgated or which is prohibited by the
standard form of fire insurance policy, or which will increase the existing rate
of or affect any fire or other insurance upon the Premises or Building or any of
its contents, or cause a cancellation of any insurance policy covering the
Premises or Building or any part thereof or any of its contents. Tenant shall
not handle, use, store or otherwise put any hazardous material on the Premises,
without first notifying Landlord of its intention to do so and identifying the
hazardous material and safety plan which shall ensure that any such hazardous
material is properly controlled, safeguarded, and disposed of, and obtaining
Landlord's prior written consent, which consent may be reasonably withheld and
may be conditioned upon absolute indemnification by Tenant and accompanying
bond. Tenant shall not do or permit anything to be done in or about the Premises
or Building which will in any way violate Rules or Regulations reasonably
promulgated by Landlord throughout the Lease, obstruct or interfere with the
rights of other tenants, or injure them, or use or allow the Premises or
Building to be used for any improper, immoral, or unlawful purpose, nor shall
Tenant cause, maintain or permit any nuisance, in, on or about the Premises or
Building or commit or suffer to be committed any waste in, on or about the
Premises or Building.
(b) Tenant shall not use the name of the Building in which the Premises are
located, in connection with any business carried on in said Premises (except as
Tenant's address) without written consent of Landlord.
(c) Tenant shall not manufacture, assemble or store materials inside the
common areas outside of Building.
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6. LANDLORD'S SERVICES.
Landlord, at its sole cost and expense, is responsible to maintain only the
roof and structural elements ("Shell") of the Premises and Building. All
Operating Expenses, including but not limited to repairs, maintenance, common
area utilities, common area janitorial, sewer and garbage, insurance, taxes, and
property management on the Premises, Building, and common areas shall be
coordinated by Landlord, but are the financial responsibility of the Tenant
through prorated xxxxxxxx as more fully outlined in Article 7 herein.
7. OPERATING EXPENSES - REPAIRS, MAINTENANCE, INSURANCE, TAXES AND
PROPERTY MANAGEMENT (Excludes Electric, Gas and Office Janitorial).
Since the Premises is part of a Building or group of buildings, Tenant is
responsible for a prorated share of Operating Expenses, including but not
limited to repairs, maintenance, common area utilities, common area janitorial
(not specific tenant janitorial), water, sewer and garbage, insurance, taxes,
and property management incurred in the operation and management of the
Premises, Building, and common areas as shall be reasonably determined by the
Landlord. For purposes of the Lease, Operating Expenses specifically exclude
electric, gas, and janitorial expenses for the office space portion (excludes
common areas) of Tenant's Premises which are separately billed to Tenant and
which are the sole responsibility of Tenant. Proration shall be on a square
footage basis with all other tenants and Tenant's proration shall be calculated
by multiplying the Operating Expenses by an equation, the numerator being the
Rentable square feet of the Premises and the denominator being the total
Rentable square feet of the Building. The Operating Expenses shall be prorated
to Tenant and be payable by Tenant as Additional Rent on a monthly basis, and
subject to the following terms and conditions:
(a) Prorated Share. Tenant's prorated share of the Operating Expenses shall
be computed and paid in twelve (12) equal monthly estimated payments as
determined in the Landlord's reasonable discretion. Such Additional Rent shall
be paid by Tenant on or before the 1st day of each month with the Base Rent. As
soon as is reasonably possible, but in any event within ninety (90) days
following the end of each calendar year, Landlord shall furnish to Tenant a
statement showing the Premises' and Building's actual Operating Expenses for the
preceding calendar year. In the case of a deficiency, Tenant shall promptly
remit its prorated share of such deficiency to Landlord. In the case of a
surplus, Landlord shall apply said surplus to the next Additional Rent due from
Tenant.
(b) Right to Review. Tenant may review at his sole cost and expense any
Operating Expenses prorated to Tenant by Landlord, including assessed Real
Estate Taxes as may be statutorily allowed. Landlord shall make available the
applicable Operating Expenses' invoices and statements. However, any such review
must be requested and completed within sixty (60) days of receipt of the annual
statement. On any expenses for alterations, additions or improvements for which
Tenant's pro rata share exceeds One Thousand Dollars ($1,000), Landlord shall
consult with Tenant and use its best efforts to meet the reasonable needs of
Tenant.
8. ALTERATIONS.
(a) Tenant will not make or suffer to be made any alterations, additions or
improvements in excess of $1,000, excluding the initial Tenant
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Improvements, (collectively "Alterations") to or upon the Premises, Building, or
any part thereof, or attach any fixtures or equipment thereto, without first
obtaining Landlord's written approval, which shall not be unreasonably withheld
or delayed. Any Alterations to or upon the Premises shall be made by Tenant at
Tenant's sole cost and expense and any contractor selected by Tenant to make the
same shall be subject to Landlord's reasonable prior written approval. All such
Alterations permanent in character, made in or upon the Premises either by
Tenant or Landlord, may at the option of Landlord, become Landlord's property
and, at the end of the term or any extension hereof, shall remain on the
Premises without compensation to Tenant unless Landlord requests that Tenant
remove any such Alterations. Notwithstanding the above, Tenant's work stations
and other items of personal property shall remain Tenant's property.
(b) Any Alterations shall, when completed, be of such a character as not to
lessen the value of the Premises or such improvements as may be then located
thereon. Any Alterations shall be made promptly and in a good workmanlike manner
and in compliance with all applicable permits and authorizations and building
and zoning laws and with all other laws, ordinances, orders, rules, regulations
and requirements of all federal, state and municipal governments, departments,
commissions, boards and offices. The costs of any such Alterations shall be paid
by Tenant, so that the Premises be free of liens for services performed, labor
and material supplied or claimed to have been supplied. Before any Alterations
shall be commenced, Tenant shall pay any increase in premiums on insurance
policies (provided for herein) or ensure adequate coverage is in place for all
risks related to the construction of such Alterations and the increased value of
the Premises.
9. PERSONAL PROPERTY & SIGNAGE.
Placement of signs on a monument, if any, including the type, size and
lighting of the signs, must be approved in writing by Landlord prior to their
installation. Such personal property must be removed at the end of the Lease
Term, any Option period herein, if applicable, or upon Tenant's failing to have
possession of the Premises. It is understood that Tenant shall have signage
rights on the west and/or south sides of the building, subject to Landlord's
approval prior to installation. Such signs shall conform to all applicable
Draper City and Salt Lake County ordinances.
10. LIENS.
Tenant shall keep the Premises and the Building free from any mechanics'
and/or materialmen's liens or other liens arising out of any work performed,
materials furnished or obligations incurred by Tenant. Tenant shall notify
Landlord in writing at least seventy-two (72) hours before any work or activity
is to commence on the Premises which may give rise to such liens to allow
Landlord to post and keep posted on the Premises any notices which Landlord may
deem to be proper for the protection of Landlord and the Premises from such
liens.
11. DESTRUCTION OR DAMAGE.
(a) If the Premises is partially damaged by fire, earthquake, or other Act
of God, Landlord shall repair the same at Landlord's expense, subject to the
provisions of this Article and provided such repairs can, in Landlord's
reasonable opinion, be made within sixty (60) days. During such repairs, the
Lease shall remain in full force and effect, except that if
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there shall be damage to the Premises and such damage is not the result of the
negligence or willful misconduct of Tenant, Tenant's employees, agents, or
invitees, an abatement of Rents shall be allowed Tenant for such portion of
Premises and period of time as the Premises was unusable by Tenant.
(b) If in Landlord's reasonable opinion the partially damaged Premises can
be repaired, but not within sixty (60) days, the Landlord may elect, upon
written notice to Tenant within thirty (30) days of such damages, to repair such
damages over a longer time period and continue the Lease in full force and
effect, but with Rents partially abated as provided in Article 11(a). In the
event such repairs cannot be made within sixty (60) days, Tenant shall have the
option to terminate the Lease provided that written notice is given to Landlord
within thirty (30) days of receipt of Landlord's notice stated in this
paragraph.
(c) If the partially damaged Premises is to be repaired under this Article,
Landlord shall repair such damages to the Premises itself, and to the Tenant
Improvements supplied by Landlord herein. Except in the event of Landlord's
gross negligence or willful misconduct, Tenant shall be responsible for Tenant's
equipment, furniture and fixtures, and other alterations, additions and
improvements made by Tenant to the Premises and Building.
(d) If in Landlord's reasonable opinion, the Premises is totally or
substantially destroyed by fire or other casualty, the Lease shall terminate
upon notice by Landlord.
12. SUBROGATION.
Landlord and Tenant shall each, prior to Tenant's taking possession or
immediately after the execution of the Lease, procure from each of the insurers
under all policies of fire, theft, public liability, workmen's compensation and
other insurance now or hereafter existing during the term and any extension
hereof and purchased by either of them insuring or covering the Premises and/or
Building or any portion thereof or operations therein, a waiver of all rights of
subrogation which the insurer might otherwise, if at all, have against the
other.
13. INDEMNIFICATION.
Tenant and Landlord hereby agree to indemnify and hold the other party
harmless from any damage to any property, including the release of any hazardous
materials, or injury to or death of any person arising from the use of the
Premises, Building, or common areas by Tenant or the ownership, management or
maintenance of the Premises, Building, or common areas by Landlord, except such
as is caused by reason of the negligent or willful act of the other party, its
agents, employees or contractors. The foregoing indemnity obligation of Tenant
and Landlord shall include reasonable fees, investigation costs and all other
reasonable costs and expenses incurred by Landlord or Tenant from the first
notice that any claim or demand is made, except in the event of the other
party's negligence or willful misconduct. The provisions of this Article shall
survive the Lease's termination with respect to any damage, injury or death
occurring prior to such termination.
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14. COMPLIANCE WITH LEGAL REQUIREMENTS
Tenant shall, at its sole cost and expense, promptly comply with all laws,
statutes, ordinances and governmental rules, regulations or requirements now in
force or which may hereafter by in force, the requirements of any board of fire
underwriters or other similar body now or hereafter constituted, any direction
or occupancy certificate issued pursuant to any law by any public officer or
officers, as well as the provisions of all recorded documents affecting the
Premises, (collectively the "Applicable Laws"), insofar as any thereof relate to
or affect the use or occupancy of the Premises, Building, or common areas,
excluding requirements of structural changes now related to or affected by
improvements made by or for Tenant.
Landlord shall, at its sole cost and expense, promptly comply with all
Applicable Laws, including the American with Disabilities Act ("ADA"), insofar
as any thereof relate to or affect Landlord's obligations under the Lease, or
its ownership of the Premises, Building, or common areas, except for Tenant's
requirements in the immediately preceding paragraph herein.
15. INSURANCE.
(a) Commercial General Liability. Tenant shall maintain a Commercial
General Liability policy including all coverages normally provided therein. Such
policies shall specifically name Landlord as an additional insured, with a
cancellation period of thirty (30) days prior written notice of an cancellation.
A Certificate of Insurance shall be provided to Landlord. All polices of
insurance shall be issued by responsible insurance companies licensed to do
business in the State of Utah.
The minimum limits of coverage acceptable are:
(i) $1,000,000 Each Occurrence Combined Single Limit for Bodily
Injury and Property Damage and
(ii) $2,000,000 Annual Aggregate.
(b) Premises and Building Insurance. Landlord shall insure the Premises and
Building, including Landlord supplied Core and Shell and Tenant Improvements as
deemed necessary in Landlord's reasonable discretion. Tenant shall pay its
prorata share for such insurance as outlined in Article 7 herein, involving
Tenant's prorated share of Operating Expenses. All policies of insurance shall
be issued by responsible insurance companies licensed to do business in the
State of Utah.
(c) Tenant's Additional Insurance. Tenant may, at its sole cost and
expense, cause all equipment, machinery, furniture and fixtures, personal
property, and Tenant Improvements supplied by Tenant from time to time used or
intended to be used in connection with the operation and maintenance of the
Premises, to be insured by Tenant against loss or damage. Except for losses
caused by Landlord's gross negligence or willful misconduct, Landlord is in no
way liable for any uninsured Tenant's property.
16. ASSIGNMENT AND SUBLETTING.
In the event Tenant should desire to assign the Lease or sublet the
Premises, Tenant shall give Landlord written notice of such desire at least
ninety (90) days in advance of the date on which Tenant desires to make such
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assignment or sublease. Landlord shall then have a period of thirty (30) days
following receipt of such notice within which to notify Tenant in writing that
Landlord elects either (i) to terminate the Lease as of the date so specified by
Tenant, in which event Tenant will be relieved of all further obligations
hereunder, or (ii) to permit Tenant to assign or sublet such space, subject to
prior written approval of the proposed assignee by Landlord, such consent not to
be unreasonably withheld or delayed, so long as the use of the Premises by the
proposed assignee would be a permitted use and the proposed assignee is of sound
financial condition as determined in Landlord's reasonable discretion. If
Landlord should fail to notify Tenant in writing of such election within said
thirty (30) day period, Landlord shall have deemed to have waived option (i)
above, but written approval by Landlord of the proposed assignee shall still be
required. Failure by Landlord to approve a proposed assignee shall not cause a
termination of the Lease. Any rents or other consideration realized by Tenant
under any such sublease and assignment in excess of the Rents hereunder, after
amortization of the reasonable costs of extra tenant improvements for which
Tenant has paid and reasonable subletting and assignment costs, shall be divided
and paid fifty (50%) percent to Landlord and fifty (50%) percent to Tenant.
Notwithstanding the above, Tenant shall have the right to sublease or assign all
or any portion of the Premises during the Term or any Option period to any
related entity, subsidiary, or affiliate of Tenant, having at least fifty-one
(51%) percent direct common ownership, without having to receive Landlord's
consent, but still requiring written notice to Landlord on or before such
sublease or assignment. No assignment or subletting by Tenant shall relieve
Tenant of any obligation under the Lease. Any assignment or subletting which
conflicts with the provisions hereof shall be void.
17. RULES.
Tenant shall faithfully observe and comply with all Rules and Regulations
reasonably promulgated by Landlord, in writing and after reasonable notice,
during the Term or any Option period herein. Landlord must apply rules
equitably against all Tenants, but shall not be responsible to Tenant for the
non-performance by other Building tenants, or adjacent buildings' tenants, of
any of said Rules and Regulations.
18. ENTRY BY LANDLORD.
The Landlord may enter the Premises or Building at reasonable hours and
upon reasonable written notice to Tenant to (a) inspect the same, (b) show the
same to prospective purchasers, lenders or tenants, (c) determine whether Tenant
is complying with all of Tenant's obligations hereunder, (d) post notices of
non-responsibility or (e) make repairs required of Landlord under the Lease,
repairs to adjoining space or utility service, or make repairs, alterations or
improvements to the Building, provided that all such work shall be done as
promptly as possible and with as little interference to Tenant as reasonably
possible. Tenant hereby waives any claim for damages for any inconvenience to or
interference with Tenant's business, any loss of occupancy or quiet enjoyment of
the Premises occasioned by such entry. Landlord shall at all times have and
retain a key to unlock all doors in, on or about the Premises (excluding
Tenant's vaults, safes and similar areas designated in writing by Tenant). In
the event of an emergency, Landlord shall have the right to use any and all
means which Landlord may deem proper to enter the Premises, without notice, for
the limited purpose of abating as possible said emergency. Such emergency
entrance shall not be construed or deemed to be a forcible or unlawful entry
into or a detainer of the Premises
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or an eviction, actual or constructive, of Tenant from the Premises, or any
portion thereof.
19. EVENTS OF DEFAULT.
The occurrence of any one or more of the following events ("Events of
Default") shall constitute a breach of the Lease by Tenant: (a) if Tenant fails
to pay Rents when and as the same becomes due and payable and such failure
continues for more than fifteen (15) days after written notice thereof, or (b)
if Tenant fails to pay any other sum when and as the same becomes due and
payable and such failure continues for more than fifteen (15) days after written
notice thereof; or (c) if Tenant fails to perform or observe any material term
or condition of the Lease, such failure continues for more than thirty (30) days
after written notice from Landlord, and Tenant does not within such period begin
with due diligence and dispatch the curing of such default, or, having so began,
thereafter fails or neglects to complete with due diligence and dispatch the
curing of such default; or (d) if Tenant shall make a general assignment for the
benefit of creditors, or shall admit in writing its inability to pay its debts
as they become due or shall file a petition in bankruptcy, or shall be
adjudicated as bankrupt or insolvent, or shall file a petition seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future statute, law or regulation, or
shall file any answer admitting or shall fail timely to contest the material
allegations of a petition filed against it in any such proceeding, or shall seek
or consent to or acquiesce in the appointment of any trustee, receiver or
liquidator of Tenant or any material part of its properties; or (e) if within
sixty (60) days after the commencement of any proceeding against Tenant seeking
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, such proceeding shall not have been dismissed, or if, within sixty
(60) days after the appointment without the consent or acquiescence of Tenant,
of any trustee, receiver or liquidator of Tenant or of any material part of its
properties, such appointment shall not have been vacated; or (f) vacation or
abandonment of the Premises for a continuous period in excess of fifteen (15)
days after initial occupancy, or (g) if the Lease or any estate of Tenant
hereunder shall be levied upon under any attachment or execution and such
attachment or execution is not vacated within thirty (30) days of receipt
thereof by Tenant.
20. TERMINATION UPON TENANT'S DEFAULT.
If an Event of Default shall occur, Landlord at any time thereafter may
give a written termination notice to Tenant, and on the date specified in such
notice (which shall not be less than three (3) days after service) Tenant's
right to possession shall terminate and the Lease shall terminate, unless on or
before such date all Rents, arrearages and other sums due by Tenant under the
Lease, including reasonable costs and attorneys' fees incurred by or on behalf
of Landlord, shall have been paid by Tenant and all other Events of Default by
Tenant shall have been fully cured to the satisfaction of Landlord. Upon such
termination, Landlord may recover from Tenant:
(a) the worth at the time of award of the unpaid Rents which had been
earned at the time of termination; plus
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(b) the worth at the time of award of the amount by which the unpaid Rents
which would have been earned after termination until the time of award exceeds
the amount of such Rents loss that Tenant proves could have been reasonably
avoided; plus
(c) the worth at the time of award of the amount by which the unpaid Rents
for the balance of the term of the Lease after the time of award exceeds the
amount of such Rents loss that Tenant proves could be reasonably avoided; and
plus
(d) any other amount reasonably necessary to compensate Landlord for all
the detriment proximately caused by Tenant's failure to perform its obligations
under the Lease or which in the ordinary course of things would be likely to
result therefrom; and/or
(e) At Landlord's elections, such other amounts in addition or in lieu of
the foregoing as may be permitted from time to time herein or by applicable law.
The "worth at the time of award" of the amounts referred to in clauses (a)
and (b) above is computed by allowing interest at the rate of 10% per annum. The
"worth at the time of award" of the amount referred to in clause (c) above means
the monthly sum of the Rents under the Lease. Failure of Landlord to declare any
default immediately upon occurrence thereof, or delay in taking any action in
connection therewith, shall not waive such default, but Landlord shall have the
right to declare any such default at any time thereafter.
21. CONTINUATION AFTER DEFAULT.
Even though Tenant has defaulted the Lease and abandoned the Premises, the
Lease shall continue in effect as long as Landlord does not terminate Tenant's
right to possession, and Landlord may enforce all of its rights and remedies
under the Lease, including the right to recover the Rents as they become due
under the Lease. Acts of maintenance or preservation or efforts to relet the
Premises or the appointment of a receiver upon initiative of Landlord to protect
Landlord's interest under the Lease shall not constitute a termination of
Tenant's right to possession. If any fixture, equipment, improvement,
installation or appurtenance shall be required to be removed from the Premises
and/or Building by Tenant, then Landlord (in addition to all other rights and
remedies) may, at its election by written notice to Tenant, deem that the same
has been abandoned by Tenant to Landlord, or Landlord may remove and store the
same and restore the Premises to its original condition at the reasonable
expense of Tenant, as Additional Rent to be paid within fifteen (15) days after
written notice to Tenant of such expense.
22. LANDLORD'S DEFAULT.
If Landlord fails to perform or observe any of its material Lease
obligations herein and such failure continues for thirty (30) days after written
notice from Tenant, or such additional time, if any, that is reasonably
necessary to promptly and diligently cure such failure after receiving written
notice, Landlord shall be in breach of the Lease (a "Default"). If Landlord
commits a Default, Tenant may pursue any remedies given in the Lease or under
law.
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23. LANDLORD'S RIGHT TO CURE DEFAULTS.
All terms and provisions to be performed by Tenant under the Lease shall be
at Tenant's sole cost and expense and without any abatement of Rents. If Tenant
fails to pay any sum of money, other than Rents, required hereunder or fails to
perform any other act required hereunder and such failure continues for thirty
(30) days after notice by Landlord, Landlord may, but shall not be obligated,
and without waiving or releasing Tenant from any obligations of Tenant, make any
such payment or perform any such act on Tenant's part to be made or performed as
provided in the Lease. All sums paid by Landlord and all incidental costs shall
be deemed Additional Rent hereunder and shall be payable within ten (10) days of
written notice of such sums paid.
24. OTHER RELIEF.
The remedies provided for in the Lease are in addition to any other
remedies available to Landlord at law or in equity by statute or otherwise.
25. ATTORNEYS' FEES.
In the event either party places the enforcement of the Lease, or any part
thereof, or the collection of any Rents, or recovery of the possession of the
Premises, or files suit upon the same, then the prevailing party shall recover
its reasonable attorneys' fees and costs.
26. EMINENT DOMAIN.
If all or any part of the Premises shall be taken or conveyed as a result
of the exercise of the power of eminent domain, the Lease shall terminate as to
the part so taken as of the date of taking, and, in the case of a partial
taking, either Landlord or Tenant shall have the right to terminate the Lease as
to the balance of the Premises by written notice to the other within thirty (30)
days after such date; provided, however, that a condition to the exercise by
Tenant of such right to terminate shall be that the portion of the Premises
taken or conveyed shall be of such extent and nature as substantially to
handicap, impede or impair Tenant's use of the balance of the Premises. In the
event of any taking, Landlord shall be entitled to any and all compensation,
damages, income, rent awards or any interest therein whatsoever which may be
paid or made in connection therewith, and Tenant shall have no claim against
Landlord for the value of any unexpired term of the Lease or otherwise, provided
that Tenant shall be entitled to any and all compensation, damages, income, rent
or awards paid for or on account of Tenant's moving expenses, trade fixtures,
equipment and any leasehold improvements in the Premises, the cost of which was
borne by Tenant, to the extent of the then unamortized value of such
improvements for the remaining term of the Lease. In the event of a taking of
the Premises which does not result in a termination of the Lease, the monthly
rental herein shall be apportioned as of the date of such taking so that
thereafter the rent to be paid by Tenant shall be in the ratio that the area of
the Premises not so taken bears to the total area of the Premises prior to such
taking.
27. SUBORDINATION, ATTORNMENT & NONDISTURBANCE; AND ESTOPPEL CERTIFICATE.
At Landlord's request, Tenant agrees to execute, acknowledge, and deliver
within ten (10) days to Landlord a Subordination, Attornment &
11
Nondisturbance Agreement ("Subordination Agreement"), subject to Landlord's
reasonably proposed form(s). Such Subordination Agreement shall subordinate the
Lease to any ground lease, mortgage, deed of trust, or any other hypothecation
for security now or hereafter placed upon the Premises, Building or common
areas, or any part thereof, to any and all advances made on the security, and to
all renewals, modification, consolidations, replacements and extensions thereof,
whether the Lease is dated prior or subsequent to the date of said ground lease,
mortgage, deed of trust or other hypothecation or the date of recording thereof.
Further, at Landlord's request, Tenant agrees to execute, acknowledge, and
deliver within ten (10) days to Landlord an Estoppel Certificate, subject to
Landlord's reasonably proposed form(s). Such Subordination Agreement and
Estoppel Certificate may be relied upon by any prospective purchaser, mortgagee,
or beneficiary under any ground lease, mortgage, deed of trust, or any other
hypothecation of the Premises, Building, or common areas, or any part thereof.
Notwithstanding such Subordination Agreement, Tenant's right to quiet possession
of the Premises shall not be disturbed so long as Tenant is not in default under
the Lease, unless the Lease is otherwise terminated pursuant to its terms.
In the event that Tenant fails to execute, acknowledge, and deliver to
Landlord such Subordination Agreement and Estoppel Certificate within ten (10)
days of Landlord's request, the parties herein expressly agree that Tenant shall
be deemed in default of the Lease without further notice. In such event, the
parties herein further expressly agree that the Subordination Agreement and
Estoppel Certificate are deemed to have been executed by Tenant.
28. NO MERGER.
The voluntary or other surrender of the Lease by Tenant, or a mutual
cancellation thereof, shall not work a merger, and shall, at the option of
Landlord terminate all or any existing subleases or subtenancies, or may, at the
option of Landlord, operate as an assignment to it of any or all such subleases
or subtenancies.
29. SALE.
In the event the original Landlord hereunder, or any successor owner of the
Premises, Building, and common areas shall sell or convey the Premises,
Building, and common areas, and the purchaser assumes the obligations of
Landlord under the Lease, all liabilities and obligation on the part of the
original Landlord, or such successor owner, under the Lease accruing after such
Sale shall terminate, and thereupon all such liabilities and obligations shall
be binding upon the new owner. Tenant agrees to attorn to such new owner.
30. NO LIGHT OR VIEW EASEMENT.
Any diminution or shutting off of light or view by any structure erected on
lands adjacent to the Building shall in no way affect the Lease or impose any
liability on Landlord.
31. HOLDING OVER.
If, without objection by Landlord, Tenant holds possession of the Premises
after expiration of the Term or any Option period of the Lease, Tenant shall
become a tenant from month to month upon the terms herein
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specified, but at a monthly Base Rent equivalent to 125% of the Base Rent at the
end of the term or extension period pursuant to Article 4, payable in advance on
or before the 1st day of each month. All Additional Rent shall also apply. Each
party shall give the other notice at least one month prior to the date of
termination of such monthly tenancy of its intention to terminate such tenancy.
32. ABANDONMENT.
If Tenant shall abandon or surrender the Premises, or be dispossessed by
process of law or otherwise, any personal property belonging to Tenant and left
on the Premises shall be deemed to be abandoned, at the option of Landlord,
except such property as may be mortgaged to Landlord.
33. SECURITY DEPOSIT.
Tenant shall deposit with Landlord upon execution of the Lease as a
security deposit in the form of a Certificate of Deposit in an amount and under
the terms and conditions more specifically set out in Exhibit C the Agreement
Regarding Certificate of Deposit ("Security Deposit"). The Security Deposit
shall be held by Landlord as security for the faithful performance by Tenant of
all of the provisions of the Lease to be performed or observed by Tenant. In the
event Tenant fails to perform or observe any of the provisions of the Lease to
be performed or observed by it, then, at the option of the Landlord, Landlord
may (but shall not be obligated to do so) apply the Security Deposit, or so much
thereof as may be necessary to remedy such default or to repair damages to the
Premises caused by Tenant. In the event Landlord applies any portion of the
Security Deposit to remedy any such default or to repair damages to the Premises
caused by Tenant, Tenant shall pay to Landlord, within thirty (30) days after
written demand for such payment by Landlord, all monies necessary to restore the
Security Deposit up to the original amount. Any portions of the Security Deposit
remaining upon termination of the Lease shall be returned.
34. WAIVER.
All waivers by either party herein must be in writing and signed by such
party. The waiver of any term or conditions herein shall not be deemed to be a
waiver of any subsequent breach of the same or any other agreement, condition or
provision herein contained, nor shall any custom or practice which may grow upon
between the parties in the administration of the terms hereof be construed to
waive or to lessen the right of either party to insist upon the performance by
the other party in strict accordance with said terms. The subsequent acceptance
of Rents hereunder by Landlord shall not be deemed to be a waiver of any breach
by Tenant of any term or condition of the Lease, regardless of Landlord's
knowledge of such breach at the time of acceptance of such Rents.
35. NOTICES.
All notices and demands which may or are required to be given by either
party to the other under the Lease shall be in writing and shall be deemed to
have been fully given when deposited in the United States mail, certified or
registered, postage prepaid, and addressed as follows: to Tenant at 00 Xxxx
Xxxxxxxxx Xxxx Xxxxx, Xxxxx 000, Xxxxxx, XX 00000, Attn: Xxxx Xxxxxx, or to such
other place as Tenant may from time to time designate in a notice to Landlord;
to Landlord at Draper Land Partnership II; Attn: Xxx Xxxxxxxxx;
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00 Xxxx Xxxxxxxxx Xxxx Xx., Xxxxxx, XX 00000 or to such other place as Landlord
may from time to time designate in a notice to Tenant, or in the case of Tenant,
delivered to Tenant at the Premises. Tenant hereby appoints as its agent to
receive the service of all dispossessory or distraint proceedings and notices
hereunder the person in charge of or occupying the Premises at the time, and if
no person shall be in charge of or occupying the same, then service may be made
by attaching same on the main entrance of the Premises.
36. COMPLETE AGREEMENT.
There are no oral agreements between Landlord and Tenant affecting the
Lease, and the Lease supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings, if any, between Landlord
and Tenant with respect to the subject matter of the Lease. The Lease may not be
altered, changed or amended, except by an instrument in writing signed by both
parties hereto.
37. CORPORATE AUTHORITY.
The person(s) executing the Lease on behalf of the parties herein hereby
covenants and warrants that (a) such party is a duly authorized and validly
existing entity under the laws in which it was formed, (b) such party has and is
qualified to do business in Utah, (c) such entity has full right and authority
to enter into the Lease, and (d) each person executing the Lease on behalf of
such entity is authorized to do so.
38. GUARANTEE OF LEASE.
Tenant guarantees, upon execution of the Lease, to occupy the Premises. Any
failure to occupy the Premises does not release the Tenant from the obligation
of paying Rents or any other terms set forth herein.
39. MISCELLANEOUS.
(a) The words "Landlord" and "Tenant" as used herein shall include the
plural as well as the singular. If there be more than one Tenant, the
obligations hereunder imposed upon Tenant shall be joint and several.
(b) Time is of the essence on the Lease and each and all of its terms and
conditions.
(c) The terms and conditions herein shall apply to and bind the heirs,
executors, administrators, successors and assigns of the parties hereto.
(d) The captions of the Lease are solely to assist the parties and are not
a part of the terms or conditions of the Lease.
(e) The Lease shall be governed by and construed in accordance with the
laws of the State of Utah, and is deemed to be executed within the State of
Utah.
40. SEVERABILITY.
If any term provision of the Lease, or the application thereof to any
person or circumstance, shall to any extent be invalid or unenforceable, the
remainder of the Lease, or the application of such provision to persons or
14
circumstances other than those as to which it is invalid or unenforceable, shall
not be affected thereby, and each provision of the Lease shall be valid and
shall be enforceable to the extent permitted by law.
41. BROKERS.
Landlord is represented by Prime Commercial, Inc.; Tenant is represented by
Coldwell Banker West Realty. Agreed-upon commissions shall be due and payable by
Landlord upon execution.
42. PERFORMANCE DELIVERY
In the event the Landlord does not deliver the premises substantially
complete on or before November 5, 1996, the Landlord will provide the Tenant two
(2) days free base rent for each day of delayed delivery. The Tenant agrees to
cooperate completely with the Landlord and agrees to make all necessary
decisions relating to the space completion promptly.
43. FIRST RIGHT OF OPPORTUNITY
The entering into this agreement is not an exercise of the opportunity in
paragraph 42 of the Lease dated this 21st day of May, 1996, and entered into by
and between DRAPER LAND PARTNERSHIP II, a Utah Limited Partnership, and I-LINK
WORLDWIDE, INC., a Corporation.
IN WITNESS WHEREOF, the parties have executed the Lease dated the day and
year first above written.
TENANT, LANDLORD,
I-LINK WORLDWIDE, INC. DRAPER LAND PARTNERSHIP II
By: /s/ Xxxx Xxxxxxx By: /s/
---------------- ----------------------
Its: CEO Its: Partner
---------------- ----------------------
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EXHIBIT A
FINAL SPACE PLAN
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EXHIBIT B
BASE BUILDING IMPROVEMENTS
The Base Building Improvements and systems as described below shall be
furnished by Landlord at Landlord's sole cost and expense. These include:
1. The Building structure will be designed for a minimum floor load of 50 lb.
Live load plus a 20 lb. partition dead load.
2. The Building shell will include a core consisting of: 1 elevator with
equipment room, 2 stairwell enclosures, 1 men's and 1 women's rest-room on
each floor, finished lobbies and exterior perimeter walls and windows and
all building columns.
3. A Concrete floor will be installed with a smoothed trowel finish for
installation of glued-down carpet. The Floor will be poured level and
finished in accordance with current ACI Standard Specifications 117.
4. A Life Safety system will be installed in accordance with the more
stringent of applicable national, state and local codes or the Americans
with Disabilities Act, throughout the Building, including all corridors,
stairwells and rest-rooms (strobes).
5. Electrical distribution will be provided to the main panel boxes in the
electrical closet on each floor. The electrical system shall be sized for
seven (7) xxxxx per usable square foot (000-000-0 Phase) for Tenant's
consumption, over and above base building electrical requirements.
6. The Building will be equipped with a packaged-unit heating, ventilation and
air conditioning system sufficient for Tenant's anticipated occupancy
requirements. The system will be designed to maintain a space temperature
between 70-78 degrees F on a year-round basis, based on a maximum average
occupancy of one (1) person for each 150 square feet of usable area. The
requirements for ventilation shall comply with present ASHRAE (American
Society of Heating, Refrigeration and Air-Conditioning Engineers) standard
62-1989 as a minimum requirement. Tenant shall be furnished with a price
per ton for package unit if additional air conditioning is required. All
distribution and controls of HVAC, within tenant space, shall be subject to
Tenant Improvement allowance.
7. Telephone service, as provided by the local utility, will be brought to
Tenant's or Building's main telephone room.
8. Common corridor walls and walls between tenant suites will be provided with
the side finished only to the common areas.
9. All roadways necessary for Tenant's access to and egress from the Building
will be completed, along with parking, landscaping and sprinklers for
irrigation.
10. Fiber optics are essential to I-Link's business. Landlord agrees to give
Tenants access to a "clean sweep" conduit for fiber between all buildings
in the park.
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EXHIBIT C
AGREEMENT REGARDING CERTIFICATE OF DEPOSIT
This Agreement Regarding Certificate of Deposit ("Agreement") is entered
into by and between Draper Land Partnership II, a Utah limited partnership
("Landlord"), and I-Link Worldwide, Inc., a Utah corporation ("Tenant").
I. RECITALS.
A. Tenant and Landlord are parties to a Commercial Lease dated the 11 day
of September, 1996 (the "Lease"), pursuant to which Tenant will lease certain
real property located in Draper, Utah (the "Property") from Landlord for office
use.
B. The Lease requires Tenant to make a Security Deposit to ensure the
faithful performance by Tenant of all of the provisions of the Lease.
C. In view of the fact that Tenant is a newly formed business enterprise
with no performance history, Landlord and Landlord's lender ("Lender") desire a
substantial Security Deposit with provision for future reduction in amount
consistent with the terms and conditions hereof.
II. AGREEMENT.
1. Tenant will obtain and deliver to Landlord as the Security Deposit
required under the Lease four separate Certificates of Deposit each in the same
amount and totaling in the aggregate Two Hundred Fifteen Thousand Dollars
($215,000.00) (the "CDs"), which Landlord shall be entitled to redeem for cash
pursuant to the terms of the Lease and this Agreement.
2. Notwithstanding anything to the contrary Tenant shall be entitled to all
interest earned on the CDs.
3. The CDs are held by Landlord as the Security Deposit securing the
faithful performance by Tenant of all of the provisions of the Lease to be
performed or observed by Tenant, including, without limitation, the payment of
any and all payments owing of any kind by Tenant under the Lease. In the event
Tenant fails to perform or observe any of the provisions of the Lease to be
performed or observed by it, then, at the option of the Landlord, Landlord may
(but shall not be obligated to do so) apply the Security Deposit, or so much
thereof as may be necessary to remedy such default or to repair damages to the
Premises caused by Tenant. In the event Landlord applies any portion of the
Security Deposit to remedy any such default or to repair damages to the Premises
caused by Tenant, Tenant shall pay to Landlord, within thirty (30) days after
written demand for such payment by Landlord, all monies necessary to restore the
Security Deposit up to the original amount. Any portions of the Security Deposit
remaining upon termination of the Lease shall be returned.
4. After the second anniversary of this Agreement, and provided that Tenant
is in good standing and not in default under the terms and conditions of the
Lease, and provided further that Tenant has achieved a level of performance that
satisfies Lender, the CDs may be returned to the Tenant at the rate of one per
year over the next four years, provided further that at the beginning of the
sixth year Tenant then deposits with Landlord the final month's base rent
($11,362 plus the applicable 4% annual increases calculated
18
in accordance with paragraph 4 of the Lease) to be held by Landlord as the
Security Deposit for the remainder of the Lease Term.
5. Landlord may without the further permission of Tenant deliver the CDs
over to Lender who shall hold the same for the benefit of Landlord hereunder
such that Landlord's security interest therein shall be deemed perfected by
possession under (S)70A-9-304 of the Utah Code Annotated (1953), as amended,
provided only that Lender shall hold the CDs under the terms and conditions of
this Agreement.
6. Should Landlord or Lender request that Tenant execute a UCC-1 form for
filing consistent with the terms and conditions of this Agreement, or any other
document necessary to carry out the intent of the parties hereunder, Tenant
agrees to execute the same.
7. This Agreement contains the entire agreement between the parties
relating to the transactions contemplated hereby, and all prior or
contemporaneous agreements, understandings, representations and statements, oral
or written, are merged herein. Notwithstanding the foregoing, the Lease shall
remain in full force and effect except to the extent it is inconsistent with
this Agreement, which shall govern in the event of a conflict between the two
instruments.
8. No modification, waiver, amendment, discharge or change of this
Agreement shall be valid unless the same is in writing and signed by the party
against which the enforcement or such modification, waiver, amendment, discharge
or change is or may be sought.
9. This Agreement may be executed in counterparts, all of which when taken
together shall be deemed fully executed originals.
10. In the event either party commences litigation for the judicial
interpretation, enforcement, termination, cancellation or rescission hereof, or
for damages for the breach hereof, then, in addition to any or all other relief
awarded in such litigation, the prevailing party therein shall be entitled to a
judgment against the other for an amount equal to reasonable attorneys' fees and
court and other costs incurred.
11. Tenant or Landlord shall not, by virtue of this Agreement, in any way
or for any reason be deemed to have become a partner of the other in the conduct
of business or otherwise, or a joint venturer.
12. This Agreement shall be construed and enforced in accordance with the
laws of the State of Utah.
13. In the event any term, covenant, condition, provision or agreement
herein contained is held to be invalid, void or otherwise unenforceable by any
court of competent jurisdiction, the fact that such term, covenant, condition,
provision or agreement is invalid, void or otherwise unenforceable shall in no
way affect the validity or enforceability of any other term, covenant,
condition, provision or agreement herein contained.
14. All terms of the Agreement shall be binding upon, inure to the benefit
of, and be enforceable by the parties hereto and their respective legal
representatives, successors and assigns.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date and year first written above.
TENANT, LANDLORD,
I-Link Worldwide, Inc. Draper Land Partnership II
By: /s/ Xxxx Xxxxxxx By:
---------------- ---------------------
Its: Its:
---------------- ---------------------
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