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EXHIBIT 10.10
LEASE AGREEMENT
LANDLORD: XXXXX CORPORATE CAMPUS ONE, L.L.C.
TENANT: XXXXX LEADERSHIP CENTER, INC.
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TABLE OF CONTENTS
DESCRIPTION PAGE
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I. PREMISES 1
1.1 Description of Premises 1
1.2 Work of Improvement 2
1.3 Construction of Shell Building 2
II. TERM 2
2.1 Length of Term 2
2.2 Commencement Date; Obligation to Pay Rent 2
2.3 Construction of Leased Premises 3
2.4 Renewal Option 3
2.5 Acknowledgment of Commencement Date 3
III. BASIC RENTAL PAYMENTS 3
3.1 Basic Annual Rent 3
3.2 Additional Monetary Obligations 4
IV. ADDITIONAL RENT 4
4.1 Basic Annual Rent. 4
4.2 Report of Direct Costs and Statement of Estimated Costs 5
4.3 Payment of Costs 5
4.4 Resolution of Disagreement 6
4.5 Limitations 6
V. SECURITY DEPOSIT 6
VI. USE 7
6.1 Use of Leased Premises 7
6.2 Prohibition of Certain Activities or Uses 7
6.3 Affirmative Obligations with Respect to Use 7
6.4 Suitability 8
6.5 Personal Property Taxes 8
VII. UTILITIES AND SERVICE 8
7.1 Obligations of Property Manager 8
7.2 Tenant's Election 9
7.3 Tenant's Obligations 9
7.4 Additional Limitations 9
7.5 Limitation on Landlord's Liability 9
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DESCRIPTION PAGE
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VIII. MAINTENANCE AND REPAIRS; ALTERATIONS; ACCESS 9
8.1 Maintenance and Repairs by Property Manager 9
8.2 Maintenance and Repairs by Tenant 10
8.3 Alterations 10
8.4 Landlord's Access to Leased Premises 10
IX. ASSIGNMENT 11
9.1 Assignment Prohibited 11
9.2 Consent Required 11
9.3 Landlord's Right in Event of Assignment 11
X. INDEMNITY 12
10.1 Indemnification 12
10.2 Release of Landlord 12
10.3 Notice 12
10.4 Litigation 12
XI. INSURANCE 12
11.1 Fire and "All Risk" Insurance on Tenant's Personal Property and Fixtures 13
11.2 Liability Insurance 13
11.3 Subrogation 13
11.4 Lender 13
XII. DESTRUCTION 13
XIII. CONDEMNATION 14
13.1 Total Condemnation 14
13.2 Partial Condemnation 14
13.3 Landlord's Option to Terminate 14
13.4 Award 14
13.5 Definition 14
XIV. LANDLORD'S RIGHTS TO CURE 15
14.1 General Right 15
14.2 Mechanic's Lien 15
XV. FINANCING; SUBORDINATION 15
15.1 Subordination 15
15.2 Attornment 16
15.3 Financial Information 16
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DESCRIPTION PAGE
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XVI. EVENTS OF DEFAULT; REMEDIES OF LANDLORD 16
16.1 Default by Tenant 16
16.2 Remedies 16
16.3 Past Due Sums; Penalty 17
XVII. PROVISIONS APPLICABLE AT TERMINATION OF LEASE 17
17.1 Surrender of Premises 17
17.2 Holding Over 17
XVIII. ATTORNEYS' FEES 17
XIX. ESTOPPEL CERTIFICATE 18
19.1 Landlord's Right to Estoppel Certificate 18
19.2 Effect of Failure to Provide Estoppel Certificate 18
XX. PARKING 18
XXI. SIGNS, AWNINGS, AND CANOPIES 18
XXII. MISCELLANEOUS PROVISIONS 18
22.1 No Partnership 19
22.2 Force Majeure 19
22.3 No Waiver 19
22.4 Notice 19
22.5 Captions; Attachments; Defined Terms 20
22.6 Recording 20
22.7 Partial Invalidity 20
22.8 Broker's Commissions 20
22.9 Tenant Defined: Use of Pronouns 20
22.10 Provisions Binding, Etc. 20
22.11 Entire Agreement, Etc. 21
22.12 Governing Law 21
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DESCRIPTION PAGE
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SIGNATURES 22
NOTARIES 23 & 24
RIDER Yes [X] No [ ]
GUARANTY Yes [ ] No [ ]
EXHIBIT "A" DESCRIPTION OF REAL PROPERTY
EXHIBIT "B" FLOORPLAN OF LEASED PREMISES
EXHIBIT "C" WORK LETTER-CONSTRUCTION AND/OR FINISH OF
IMPROVEMENTS TO LEASED PREMISES
EXHIBIT "D" ACKNOWLEDGMENT OF COMMENCEMENT DATE &
ESTOPPEL CERTIFICATE
EXHIBIT "E" COST TO CONSTRUCT LEASED PREMISES
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LEASE AGREEMENT
XXXXX LEADERSHIP OFFICE BUILDING
THIS LEASE AGREEMENT (the "Lease") is made and entered into as of this
____ day of January, 1996 by and between XXXXX CORPORATE CAMPUS ONE, L.L.C.
(the "Landlord"), and XXXXX LEADERSHIP CENTER, INC. (the "Tenant"). THE XXXXX
COMPANY, L. C. (the "Property Manager") is also a party to this Lease for the
limited purpose of providing the property management services described herein.
This Lease is made and entered into by Landlord and Tenant for the purpose of
fulfilling the terms of Section 1.06(b) of Landlord's First Amended Operating
Agreement dated July 7, 1995. This Lease is the "new lease" described therein;
it replaces and supersedes in its entirety the terms and provisions of that
certain Industrial lease Agreement the ("old lease") dated April 7, 1995; and
upon the execution and delivery of this Lease, the old lease shall have no
efficacy, validity, or enforceability whatsoever.
For and in consideration of the rental to be paid by tenant and of the
covenants and agreements herein set forth to be kept and performed by Tenant,
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord, the
Leased Premises (as hereafter defined), at the rental and subject to and upon
all of the terms, covenants and agreements hereinafter set forth.
I. PREMISES
1.1 Description of Premises. Landlord does hereby
demise, lease and let unto Tenant, and Tenant does hereby take and
receive from Landlord the following:
(a) That certain floor area containing approximately
54,257 gross rentable square feet (the "Leased Premises"), on Floors
One, Two and Three (includes 4,270 square feet in the basement) of the
three- story office building (the "Building") being constructed at
approximately 000 Xxxx 0000 Xxxxx, Xxxxx, Xxxx, xx the real property
(the "Property") described on Exhibit "A" attached hereto and by this
reference incorporated herein. The space occupied by Tenant consists
of the entire Building, as set forth on Exhibit "B" which is attached
hereto and by this reference incorporated herein.
(b) Such non-exclusive rights-of-way, easements and
similar rights with respect to the Building and Property as may be
reasonably necessary for access to and egress from, the Leased
Premises.
(c) The exclusive right to use those areas designated and
suitable for vehicular parking, including the exclusive right to the
use of Two Hundred Five (205) parking stalls.
1.2 Work of Improvement. The obligation of Landlord and
Tenant to perform the work and supply the necessary materials and
labor to prepare the Leased Premises for
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occupancy are described in detail on Exhibit "C". Landlord and Tenant
shall expend all funds and do all acts required of them as described
on Exhibit "C" and shall perform or have the work performed promptly
and diligently in a first class and workmanlike manner.
1.3 Construction of Shell Building. Landlord shall, at
its own cost and expense, construct and complete a three story 54,257
gross rentable square foot building and cause all of the construction
which is to be performed by it in completing the Building and
performing its work as set forth on Exhibit "C", to be substantially
completed as evidenced by a Certificate of Occupancy, and the Leased
Premises ready for Tenant to install its fixtures and equipment and to
perform its other work as described on Exhibit "C" as soon as
reasonably possible, but in no event later than January 1, 1997
("Target Date"). In the event that Landlord's construction of
obligation has not been fulfilled upon the expiration of the"Target
Date", Tenant shall have the right to exercise any right or remedy
available to it under this Lease, including the right to terminate
this Lease and the right to charge Landlord and cause Landlord to pay
any increased costs associated with Tenant's current leases due to
holding over in such space or moving to temporary space; provided that
under no circumstances shall Landlord be liable to Tenant resulting
from delay in construction covered by circumstances beyond Landlord's
direct control.
II. TERM
2.1 Length of Term. The term of this Lease shall be for
a period of twenty (20) years plus the partial calendar month, if any,
occurring after the Commencement Date (as hereinafter defined) if the
Commencement Date occurs other than on the first day of a calendar
month.
2.2 Commencement Date; Obligation to Pay Rent. The term
of this Lease and Tenant's obligation to pay rent hereunder shall
commence on the first to occur of the following dates ("Commencement
Date"):
(a) The date Tenant occupies the Premises and conducts
business.
(b) The date fifteen (15) days after the Landlord, or
Landlord's supervising contractor, notified Tenant in writing that
Landlord's construction obligations respecting the Leased Premises
have been fulfilled and/or that the Leased Premises are ready for
occupancy and/or performance of Tenant's work. Such notice shall be
accompanied by an occupancy permit and a certificate from the Building
Architect stating that remaining punchlist items can be completed
within fifteen (15) days and will not materially interfere with
Tenant's business. Prior to Commencement Date, it is contemplated
that Tenant shall be able to perform its construction obligation as
per Exhibit C II(H).
2.3 Construction of Leased Premises. Landlord shall
provide a budget prior to the commencement of construction of the
Leased Premises (see Exhibit "E"). Landlord shall
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itemize each part of the construction and its associated estimated
cost. Landlord shall pay an amount equal to $954,712.00 or $22.00 per
usable square foot (on 47,666 usable square feet excluding the
basement space of 4,270 square feet) of the cost listed (excluding
cost to construct Shell Building) and Tenant shall be obligated for
the remaining costs shown on Exhibit "E". Landlord shall not be
obligated to pay for any increase in the actual cost of construction
over and above the construction costs shown on Exhibit "E". Any
special decorator items, equipment, furniture or furnishings not
designated on Exhibit "E", as well as changes initiated by the Tenant
to the Leased Premises, shall be the sole cost of Tenant and shall
include the defined extras on Exhibit "E."
2.4 Renewal Option. If this Lease then remains in full
force and effect, Tenant shall have the option to renew this Lease for
two five year options commencing on the expiration date. Each option
must be exercised by written notice to Landlord one hundred and eighty
(180) days before the expiration of the previous term and once
exercised is irrevocable. Base rent during each renewal term shall be
determined pursuant to Section 3.1 below.
2.5 Acknowledgment of Commencement Date. Landlord and
Tenant shall execute a written acknowledgment of the commencement Date
in the form attached hereto as Exhibit "D".
III. BASIC RENTAL PAYMENTS
3.1 Basic Annual Rent. Tenant agrees to pay to Landlord
as basic annual rent (the "Basic Annual Rent") at such place as
Landlord may designate, without prior demand therefore and without any
deduction or set off whatsoever, the sum of Seven Hundred Ninety Five
Thousand Nine Hundred Two and no/100 Dollars ($795,902.00) which
includes the basement storage space. Said Basic Annual Rent shall be
due and payable in twelve (12) equal monthly installments to be paid
in advance on or before the first day of each calendar month during
the term of the Lease. Basic Annual Rent shall escalate at the
beginning of the 4th year and every three (3) years thereafter using a
3% annually compounded rate or the change in the All Urban Index,
whichever is higher. For purposes of this Lease the term "All Urban
Index" shall mean the Consumer Price Index for All Urban
Consumers-U.S. City Average-all Items (1982-1984 equals 100 base) as
published by the United States Bureau of Labor Statistics or any
successor agency or any other index hereinafter employed by the Bureau
of Labor Statistics in lieu of said index. The price index for the
3rd month preceding the month in which the Lease commences shall be
considered the Basic Price Index. Therefore, the beginning of the 4th
year and every three years thereafter, the Basic Annual Rental set
forth in Section 3.1 shall be adjusted by multiplying such rental by a
fraction, the numerator of which is the Price Index for the 3rd month
preceding the beginning of the 4th year and the denominator of which
is the Basic Price Index. The above not withstanding, the maximum
increase at the beginning of the 4th year shall be no more than 15.76%
which is 5% per year compounded, and likewise on every adjustment date
hereafter, the maximum increase shall be limited as described herein.
In no event shall Basic Annual Rent be reduced. In the event
the Commencement Date occurs on a day other than the first day of a
calendar month, then rent shall be paid on the Commencement
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Date for the initial fractional calendar month prorated on a per-diem
basis (based upon a thirty (30) day month).
3.2 Additional Monetary Obligations. Tenant shall also
pay as rental (in addition to the Basic Annual Rent) all other sums of
money as shall become due and payable by Tenant to Landlord under this
Lease. Landlord shall have the same remedies in the case of a default
in the payment of said other sums of money as are available to
Landlord in the case of a default in the payment of one or more
installments of Basic Annual Rent.
IV. ADDITIONAL RENT
4.1 Basic Annual Rent. It is the intent of both parties
that the Basic Annual Rent herein specified shall be absolutely net to
the Landlord throughout the term of this Lease, and that all costs,
expenses and obligations relating to Tenant's pro rata share of the
Building, Property and/or Building, Property and/or Leased Premises
which may arise or become due during the term shall be paid by Tenant
in the manner hereafter provided.
For purposes of this Part IV and the Lease in general, the
following words and phrases shall have the meanings set forth below:
(a) "Direct Costs" shall mean all actual costs and
expenses incurred by the Property Manager or Landlord in connection
with Landlord's ownership, operation, management and maintenance of
the Building and Property and related improvements located thereon
(the "Improvements"), including, but not limited to, all expenses
incurred by Landlord or the Property Manager as a result of their
compliance with any and all of their obligations under this Lease
other than the performance by Landlord of its work under Sections 1.2,
1.3 and 2.3 of this Lease. In explanation of the foregoing, and not
in limitation thereof, Direct Costs shall include: all real property
taxes and assessments (whether general or special, known or unknown,
foreseen or unforeseen) and any tax or assessment levied or charged in
lieu thereof, whether assessed against Landlord and/or Tenant and
whether collected from Landlord and/or Tenant; snow removal, dumpster
service, insurance, license, permit and inspection fees, cost of
services of independent contractors, cost of compensation (including
employment taxes and fringe benefits) of all persons who perform
regular and recurring duties connected with day-to-day operation,
maintenance, repair, and replacement of the Building, its equipment
and the adjacent walk, and landscaped area (including, but not limited
to gardening, security, parking, elevator, painting, plumbing,
electrical, mechanical, carpentry, structural and roof repairs and
reserves (the Property Manager may collect in advance up to one
percent (1%) of Direct Costs as a reserve), signing and advertising,
and rental expense or a reasonable allowance for depreciation of
personal property used in the maintenance, operation and repair of the
Building. Direct costs shall also include property management fees,
which property management fees shall be equal to a percentage of
Tenant's Basic Annual Rent and Estimated Costs, which percentage shall
not exceed two and one half percent (2 1/2%) of the sum of Basic
Annual Rent and Direct Costs and shall be paid to the Property
Manager. However, Tenant shall pay the actual costs of water, sewer,
gas and
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electrical power directly to the municipal supplier of same. Direct
Costs shall not include expenses incurred in connection with leasing,
renovating, or improving space for tenants or other occupants or
prospective tenants or occupants of the Building, expenses incurred
for repairs resulting from damage by fire, windstorm or other
casualty, to the extent such repairs are paid for by insurance
proceeds, expenses paid by any tenant directly to third parties, or as
to which Landlord is otherwise reimbursed by any third party or
Tenant; expenses which, by generally accepted accounting principles,
are treated as capital items except that if, as a result of
governmental requirements, laws or regulations, Landlord shall expend
monies directly or indirectly for improvements, additions or
alterations to the Building which, by generally accepted accounting
principles, are treated as a capital expenditures, the amortization of
such capital expenditures based on a life acceptable to the
appropriate taxing authority together with interest at the rate of 9%
per annum shall be considered Direct Costs. The foregoing
notwithstanding, Direct Costs shall not include depreciation on the
Building and Tenant Finish, and amounts paid toward principal or
interest of loans of Landlord.
(b) "Estimated Costs" shall mean the projected amount of
Tenant's Direct Costs, excluding the costs of electricity provided to
Tenant's Leased Premises. The Estimated Costs for the calendar year
in which the Lease commences are $172,700.00, and are not included in
the Basic Annual Rent. If the Estimated Costs as of the date Tenant
takes occupancy are greater than Tenant's Estimated Costs at the time
this Lease is executed, the Estimated Costs shall be increased to
equal the Estimated Costs as of the date of Tenant's occupancy.
4.2 Report of Direct Costs and Statement of Estimated
Costs.
(a) After the expiration of each calendar year occurring
during the term of this Lease, the Property Manager shall furnish
Tenant a written statement of Tenant's Direct Costs occurring during
the previous calendar year. The written statement shall specify the
amount by which Tenant's Direct Costs exceed or are less than the
amounts paid by Tenant during the previous calendar year pursuant to
Section 4.3(b) below.
(b) At the same time specified in Section 4.2(a) above,
Landlord shall furnish Tenant a written statement of the Estimated
Costs for the then current calendar year.
4.3 Payment of Costs. Tenant shall pay the Direct Costs
as follows:
(a) Each month Tenant shall pay to the Property Manager,
without offset or deduction, one-twelfth (l/12th) of the Estimated
Costs as defined in Sections 4.1(b) and 4.2(b) above.
(b) Within thirty (30) days after delivery of the written
statement referred to in section 4.2(a) above, Tenant shall pay to the
Property Manager the amount by which Tenant's Direct Costs, as
specified in such written statements, exceed and aggregate of such
costs actually paid by Tenant for the year at issue. Tenant shall
have the right to audit the Property Manager's books upon reasonable
notice. Tenant shall pay costs associated with the audit unless
Tenant finds that the Property Manager has inflated expenses by more
than ten percent
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(10%), in which case, the Property Manager will pay audit charges.
Payments by Tenant shall be made pursuant to this Section 4.3(b)
notwithstanding that a statement pursuant to Section 4.2(a) is
furnished to Tenant after the expiration of the term of this Lease.
(c) If the annual statement of costs indicates that the
Estimated Costs paid by Tenant pursuant to subsection (b) above for
any year exceeded Tenant's actual Direct Costs for the same year, the
Property Manager shall promptly pay the amount of such excess to
Tenant.
4.4 Resolution of Disagreement. Every statement given by
the Property Manager pursuant to Section 4.2 shall be conclusive and
binding upon Tenant unless within sixty (60) days after the receipt of
such statement Tenant shall notify the Property Manager that it
disputes the correctness thereof, specifying the particular respects
in which the statement is claimed to be incorrect. If such dispute
shall not have been settled by agreement, the parties hereto shall
submit the dispute to arbitration within ninety (90) days after
Tenant's receipt of statement. Pending the determination of such
dispute by agreement or arbitration as aforesaid, Tenant shall, within
thirty (30) days after receipt of such statement, pay in accordance
with the Property Manager's statement, and such payment shall be
without prejudice to Tenant's position. If the dispute shall be
determined in Tenant's favor, the Property Manager shall forthwith pay
Tenant the amount of Tenant's overpayment resulting from compliance
with the Property Manager's statement, including interest on disputed
amounts at prime plus two percent (2%). Landlord agrees to grant
Tenant reasonable access to the Property Manager's books and records
for the purpose of verifying Direct Costs for operating expenses
incurred by the Property Manager.
4.5 Limitations. Nothing contained in this Part IV shall
be construed at any time so as to reduce the monthly installments of
Basic Annual Rent payable hereunder below the amount set forth in
Section 3.1 of this Lease.
V. SECURITY DEPOSIT: NONE
VI. USE
6.1 Use of Leased Premises. The Leased Premises shall be
used and occupied by Tenant for general office purposes only and for
no other purpose whatsoever without the prior written consent of
Landlord.
6.2 Prohibition of Certain Activities or Uses. The
Tenant shall not do or permit anything to be done in or about, or
bring or keep anything in the Leased Premises which is prohibited by
this Lease or will, in any way or to any extent:
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(a) Adversely affect any fire, liability or other
insurance policy carried with respect to the Building, the Leased
Premises or any of the contents of the Building (except with
Landlord's express written permission, which will not be unreasonably
withheld, but which may be contingent upon Tenant's agreement to bear
any additional costs, expenses or liability for risk that may be
involved).
(b) Conflict with or violate any law, statute, ordinance,
rule, regulation or requirement of any governmental unit, agency or
authority (whether existing or enacted as promulgated in the future,
known or unknown, foreseen or unforeseen).
(c) Adversely overload the floors or otherwise damage the
structural soundness of the Leased Premises or Building, or any part
thereof (except with Landlord's express written permission, which will
not be unreasonably withheld, but which may be contingent upon
Tenant's agreement to bear any additional costs, expenses or liability
for risk that may be involved).
6.3 Affirmative Obligations with Respect to Use.
(a) Tenant will comply with all governmental laws,
ordinances, regulations, and requirements, now in force or which
hereafter may be in force, of any lawful governmental body or
authorities having jurisdiction over the Leased Premises, will keep
the Leased Premises and every part thereof in a clean, neat, and
orderly condition, free of objectionable noise, odors, or nuisances,
will in all respects and at all times fully comply with all applicable
health and policy regulations, and will not suffer, permit, or commit
any waste.
(b) At all times during the term hereof, Tenant shall, at
Tenant's sole cost and expense, comply with all statutes, ordinances,
laws, orders, rules, regulations and requirements of all applicable
federal, state, county, municipal and other agencies or authorities,
now in effect or which may hereafter become effective, which shall
impose any duty upon Landlord or Tenant with respect to the use,
occupation or alterations of the Leased Premises (including, without
limitation, all applicable requirements of the Americans with
Disabilities Act of 1990 and all other applicable laws relating to
people with disabilities, and all rules and regulations which may be
promulgated thereunder from time to time and whether relating to
barrier removal, providing auxiliary aids and services or otherwise)
and upon request of Landlord shall deliver evidence thereof to
Landlord.
6.4 Suitability. The Leased Premises, Building and
Improvements (and each and every part thereof) shall be deemed to be
in satisfactory condition unless, within sixty (60) days after the
Commencement Date, Tenant shall give Landlord written notice
specifying, in reasonable detail, the respects in which the Leased
Premises, Building or Improvements are not in satisfactory condition.
Landlord further provides warranties as provided in Exhibit C II
paragraphs C and E.
6.5 Personal Property Taxes. Tenant shall pay all taxes,
assessments, charges, and fees which during the term hereof may be
imposed, assessed or levied by any governmental or public
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authority against or upon Tenant's use of the Leased Premises or any
personal property or fixture kept or installed therein by Tenant.
VII. UTILITIES AND SERVICE
7.1 Obligations of Property Manager. Except for the
specific services and costs described herein, the parties intend that
the Property Manager (as the Landlord's agent) shall provide all
services and pay for all costs associated with the normal operation
and maintenance of the Leased Premises at a level consistent with
services and maintenance provided by the Property Manager with respect
to similar buildings located in Provo, Utah. Therefore, during the
term of this Lease the Property Manager agrees to cause to be
furnished to the Lease Premises during normal operating hours the
general services described in Section 4.1(a) above, the cost and
expense of which shall be included in Direct Costs. For the purposes
of this Lease, normal operating hours for the Leased Premises are from
7:00 a.m. to 6:00 p.m., Monday through Friday. These services include
without limitation the following:
(a) Telephone connection to the building, but not
including telephone stations and equipment (it being expressly
understood and agreed that Tenant shall be responsible for the
ordering and installation of telephone lines and equipment which
pertain to the Leased Premises).
(b) Heating and air-conditioning during normal operating
hours to such extent and to such levels as is reasonably required for
the comfortable use and occupancy of the Leased Premises subject
however to any limitations imposed by any government agency.
(c) Security (including the lighting of common halls,
stairways, entries and restrooms) to such extent as is usual and
customary in similar buildings in Provo, Utah.
(d) Snow removal service.
(e) Landscaping and groundskeeping service.
(f) Elevator service.
(g) Dumpster service.
(h) Parking lot maintenance.
7.2 Tenant's Election. Tenant may at any time after the
first year of the lease term elect to reduce or to terminate
Landlord's and the Property Manager's obligation to provide the
services described in Section 7.1, by giving written notice of such
election to Landlord and to the Property Manager not less than sixty
(60) days before the date upon which such change is to be effective.
From and after the effective date of any election of termination,
Landlord and the Property Manager shall have no further obligation to
provide any service described in the first sentence of this Section
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7.1. Further, should Tenant elect to terminate Landlord's
and the Property Manager's obligation, the management fee as described
in Section 4.1(b) shall be reduced to 1% of Basic Annual Rent and shall
be paid to the Property Manager.
7.3 Tenant's Obligations. Tenant shall arrange for and
shall pay the entire cost and expense of (a) all telephone stations,
equipment and use charges, electric light bulbs (but not fluorescent
bulbs used in fixtures originally installed in the Leased Premises);
(b) janitorial services for the Leased Premises; water, sewer, gas and
electrical power for the Leased Premises; and (c) personal property
taxes (as provided in Section 6.5 above).
7.4 Additional Limitations. If and where heat generating
machines devices are used in the Leased Premises which affect the
temperature otherwise maintained by the air conditioning system,
Landlord reserves the right with Tenant's concurrence to install
additional or supplementary air conditioning units for the Leased
premises, and the entire cost of installing, operating, maintaining
and repairing the same shall be paid by Tenant to Landlord promptly
after demand by Landlord.
7.5 Limitation on Landlord's Liability. Landlord shall
not be liable for and Tenant shall not be entitled to terminate this
Lease or to effectuate any abatement or reduction of rent by reason of
Landlord's or the Property Manager's failure to provide or furnish any
of the foregoing utilities or services if such failure was reasonably
beyond the control of Landlord or the Property Manager. In no event
shall Landlord or the Property Manager be liable for loss or injury to
persons or property, however, arising or occurring in connection with
or attributable to any failure to furnish such utilities or services
even if within their control except in the event of their negligence.
VIII. MAINTENANCE AND REPAIRS; ALTERATIONS; ACCESS
8.1 Maintenance and Repairs by Property Manager. The
Property Manager at its sole cost shall maintain in good order,
condition and repair the structural components of the Leased Premises,
including without limitation roof, exterior walls and foundations, as
well as all repairs covered under construction warranties provided if
the Property Manager is required to make structural repairs by reason
of Tenant's negligent acts or omissions, Tenant shall pay the costs
for making such repairs.
8.2 Maintenance and Repairs by Tenant. Tenant, at
Tenant's sole cost and expense and without prior demand being made,
shall maintain the Leased Premises in good order, condition and
repair, and will be responsible for the painting, carpeting or other
interior design work of the Leased Premises beyond the initial
construction phase as specified in Section 2.3 and Exhibit "C" and "E"
of the Lease and shall maintain all equipment and fixtures installed
by Tenant. If repainting or recarpeting is required and authorized
by Tenant, the cost for such are the sole obligation of Tenant and
shall be paid for by Tenant immediately following the performance of
said work and a presentation of an invoice for payment.
8.3 Alterations. Tenant shall not make or cause to be
made any alterations, additions or improvements or install or cause to
be installed any fixtures, signs, floor coverings, interior or
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exterior lighting, plumbing fixtures, or shades or awnings, or make
any other changes to the Leased Premises without first obtaining
Landlord's written approval, which approval shall not be unreasonably
withheld. Tenant shall present to the Landlord plans and
specifications for such work at the time approval is sought. In the
event Landlord consents to the making of any alterations, additions,
or improvements to the Leased Premises by Tenant, the same shall be
made by Tenant at Tenant's sole cost and expense. All such work with
respect to any alterations, additions, and changes shall be done in a
good and workmanlike manner and diligently prosecuted to completion
such that, except as absolutely necessary during the course of such
work, the Leased Premises shall at all times be a complete operating
unit. Any such alterations, additions, or changes shall be performed
and done strictly in accordance with all laws and ordinances relating
thereto. In performing the work or any such alterations, additions,
or changes, Tenant shall have the same performed in such a manner as
not to obstruct access to any portion of the Building. Any
alterations, additions, or improvements to or of the Leased Premises,
including, but not limited to, wallcovering, paneling, and built-in
cabinet work, but excepting movable furniture and equipment, shall at
once become a part of the realty and shall be surrendered with the
Premises, unless Landlord and Tenant agree at any time that the
specific improvement may be removed by Tenant at the end of the Term
provided Tenant restores the premises to its original condition, wear
and tear excepted.
8.4 Landlord's Access to Leased Premises. Landlord shall
have the right to place, maintain, and repair all utility equipment of
any kind in, upon, and under the Leased Premises as may be necessary
for the servicing of the Leased Premises and other portion of the
Building. Landlord shall upon providing adequate notice to Tenant,
also have the right to enter the Leased Premises at all times to
inspect or to exhibit the same to prospective purchasers, mortgagees,
tenants, and lessees, and to make such repairs, additions,
alterations, or improvements as Landlord may deem desirable. Landlord
shall be allowed to take all material upon said Leased Premises that
may be required therefor without the same constituting an actual or
constructive eviction of Tenant in whole or in part and the rents
reserved herein shall in no wise xxxxx while said work is in progress
by reason of loss or interruption of Tenant's business or otherwise,
and Tenant shall have no claim for damages unless due to Landlord
negligence. During the three (3) months prior to expiration of this
Lease or of any renewal term, Landlord may place upon the Leased
Premises "For Lease" or "For Sale" signs which Tenant shall permit to
remain thereon.
IX. ASSIGNMENT
9.1 Assignment Prohibited. Tenant shall not transfer,
assign, mortgage, or hypothecate this Lease, in whole or in part, or
permit the use of the Leased Premises by any person or persons other
than Tenant, or sublet the Leased Premises, or any part thereof,
without the prior written consent of Landlord in each instance, which
consent shall not be unreasonably withheld, provided sufficient
information is provided to Landlord to accurately represent the
financial condition of those to whom this Lease will be transferred,
assigned, mortgaged, or hypothecated. Such prohibition against
assigning or subletting shall include any assignment or subletting by
operation of law. Any transfer of this Lease from the Tenant by
merger, consolidation, transfer of assets, or liquidation shall
constitute an assignment for purposes of this Lease. In the event
that Tenant hereunder is a corporation, an unincorporated association,
or a partnership, the transfer, assignment, or
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hypothecation of any stock or interest in such corporation,
association, or partnership in the aggregate in excess of forty-nine
percent (49%) in any one-year period shall be deemed an assignment
within the meaning of this Section. The above prohibition of
assignment will not apply in the case of a registered offering of
shares by Tenant or the public trading of registered shares subsequent
to an initial offering.
9.2 Consent Required.
(a) Any assignment or subletting without Landlord's
consent shall be void, and shall constitute a default hereunder which,
at the option of Landlord, shall result in the termination of this
Lease or exercise of Landlord's other remedies hereunder. Consent to
any assignment or subletting shall not operate as a waiver of the
necessity for consent to any subsequent assignment or subletting, and
the terms of such consent shall be binding upon any person holding by,
under, or through Tenant.
(b) Landlord shall have no obligation to consent to the
proposed sublease or assignment if the proposed sublessee or assignee
or its business is or may be subject to compliance with additional
requirements of the law, including any related rules or regulations,
commonly known as the "Americans with Disabilities Act of l990" or
similar state or local laws relating to persons with disabilities
beyond those requirements which are applicable to the tenant desiring
to so sublease or assign".
9.3 Landlord's Right in Event of Assignment. If this
Lease is assigned or if the Leased Premises or any portion thereof are
sublet or occupied by any person other than the Tenant, Landlord may
collect rent and other charges from such assignee or other party, and
apply the amount collected to the rent and other charges reserved
hereunder, but such collection shall not constitute consent or waiver
of the necessity of consent to such assignment, subleasing, or other
transfer, nor shall such collection constitute the recognition of such
assignee, sublessee, or other party as the Tenant hereunder or a
release of Tenant from the further performance of all of the covenants
and obligations, including obligation to pay rent, of Tenant herein
contained. In the event that Landlord shall consent to a sublease or
assignment hereunder, Tenant shall pay to Landlord reasonable fees,
not to exceed $100.00, incurred in connection with processing of
documents necessary to the giving of such consent. In the event
Landlord consents to the assignment as provided by paragraph 9.1, then
Tenant shall be released from further performance of any covenant and
obligation under this Lease.
X. INDEMNITY
10.1 Indemnification. Tenant and Landlord shall indemnify
each other and save each other harmless from and against any and all
suits, actions, damage and claims, liability and expense in connection
with loss of life, bodily or personal injury, or property damage
arising from or out of any occurrence in, upon, at or from the Leased
Premises, or occasioned wholly or in part by any act or omission of
Tenant or Landlord, their agents, contractors, employees, servants,
invitees, licensees or concessionaires. For the purposes of this
Lease, the Property Manager is an agent of the Landlord. All
insurance policies carried by Tenant and/or Landlord shall include a
waiver of
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subrogation endorsement which specifies that the insurance carrier(s)
will waive any right of subrogation against Tenant and/or Landlord
arising out of any insurance claim.
10.2 Release of Landlord. Landlord shall not be
responsible or liable at any time for any loss or damage to Tenant's
personal property or to Tenant's business. Tenant shall store its
property in and shall use and enjoy the Leased Premises and all other
portions of the Building and Improvements at its own risk, and hereby
releases Landlord, to the full extent permitted by law, from all
claims of every kind resulting in loss of life, personal or bodily
injury, or property damage to or arising in connection with Tenant's
ownership of its personal property or the operation of Tenant's
business.
10.3 Notice. Tenant shall give prompt notice to Landlord
in case of fire or accidents in the Leased Premises or in the Building
of which the Leased Premises are a part or of defects therein or in
any fixtures or equipment.
10.4 Litigation. If any party to this Lease, without
fault on its part, shall be made a party to any litigation that names
either of the other two parties to this lease, those other parties
shall protect and hold harmless the party without fault and shall pay
all costs, expenses, and reasonable attorneys' fees, provided that the
party to be protected must first notify the other parties promptly in
writing of any such claim and further provided that the party or
parties to be charged shall be entitled to direct the defense or
settlement of such claim. No party to this Lease shall be responsible
for any settlement of compromise of any such claim without its prior
written consent.
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XI. INSURANCE
11.1 Fire and "All Risk" Insurance on Tenant's Personal
Property and Fixtures. At all times during the term of this Lease,
Tenant shall keep in force at its sole cost and expense, fire
insurance and "All Risk" (including vandalism and malicious mischief)
in companies acceptable to Landlord, equal to the replacement cost of
Tenant's fixtures, furnishings, equipment, and contents upon the
Leased Premises and all improvements or additions made by Tenant to
the Leased Premises. The Landlord shall be named as an additional
insured on all such policies.
11.2 Liability Insurance. Tenant shall, during the entire
term hereof, keep in full force and effect a policy of public
liability and property damage insurance to include contractual
coverage with respect to the Leased Premises and the business operated
by Tenant in the Leased Premises, with a combined single limit for
personal or bodily injury and property damage of not less than
$500,000.00. The policy shall name Landlord, any person, firms, or
corporations designated by Landlord, and Tenant as insureds, and shall
contain a clause that the insurer will not cancel or materially change
the insurance pertaining to the Leased Premises without first giving
Landlord ten (10) days written notice. Tenant shall at all times
during the term hereof provide Landlord with evidence of current
insurance coverage. All public liability, property damage, and other
liability policies shall be written as primary policies, not
contributing with coverage which Landlord may carry.
11.3 Subrogation. Tenant and Landlord each waive its
right of subrogation against each other for any reason whatsoever.
11.4 Lender. Any mortgage lender interest in any part of
the Building or Improvements may, at Landlord's option, be afforded
coverage under any policy required to be secured by Tenant hereunder,
by use of a mortgagee's endorsement to the policy concerned.
XII. DESTRUCTION
If the Leased Premises shall be partially damaged by any casualty
insured against under any insurance policy maintained by Landlord, Landlord
shall, upon receipt of the insurance proceeds, repair the Leased Premises and
until repair is complete the Basic Annual Rent and Additional Rent shall be
abated proportionately as to that portion of the Leased Premises rendered
untenantable. Notwithstanding the foregoing, if: (a) the Leased Premises by
reason of such occurrence are rendered wholly untenantable, or (b) the Leased
Premises should be damaged as a result of a risk which is not covered by
insurance, or (c) the Leased Premises should be damaged in whole or in part
during the last six (6) months of the term or of any renewal hereof, or (d) the
Leased Premises or the Building (whether the Leased Premises are damaged or
not) should be damaged to the extent of fifty percent (50%) or more of the
then-monetary value thereof, then and in any such events, Landlord may either
elect to repair the damage or may cancel this Lease by notice of cancellation
within Ninety (90) days after such event and thereupon this Lease shall expire,
and Tenant shall vacate and surrender the Leased Premises to Landlord.
Tenant's liability for rent upon the termination of this Lease shall cease as
of the day following Landlord's giving notice of cancellation. In the event
Landlord elects to repair any damage, any abatement of rent shall end five (5)
days after notice by Landlord to Tenant that the Leased Premises have been
repaired. If the damage is caused by the negligence of Tenant
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or its employees, agents, invitees, or concessionaires, there shall be no
abatement of rent. Unless this Lease is terminated by Landlord, Tenant shall
repair and refixture the interior of the Leased Premises to the extent of the
Tenant Finish in a manner and in at least a condition equal to that existing
prior to the destruction or casualty and the proceeds of all insurance carried
by Tenant on its property and fixtures shall be held in trust by Tenant for the
purpose of said repair and replacement.
XIII. CONDEMNATION
13.1 Total Condemnation. If the whole of the Leased
Premises shall be acquired or taken by condemnation proceeding, then
this Lease shall cease and terminate as of the date of title vesting
in such proceeding.
13.2 Partial Condemnation. If any part of the Leased
Premises shall be taken as aforesaid, and such partial taking shall
render that portion not so taken unsuitable for the business of
Tenant, then this Lease shall cease and terminate as aforesaid. If
such partial taking is not extensive enough to render the Leased
Premises unsuitable for the business of Tenant, then this Lease shall
continue in effect except that the Basic Annual Rent and Additional
Rent shall be reduced in the same proportion that the portion of the
Leased Premises (including basement, if any) taken bears to the total
area initially demised and Landlord shall, upon receipt of the award
in condemnation, make all necessary repairs or alterations to the
Building in which the Leased Premises are located, provided that
Landlord shall not be required to expend for such work an amount in
excess of the amount received by Landlord as damages for the part of
the Leased Premises to taken. "Amount received by Landlord" shall
mean that part of the award in condemnation which is free and clear to
Landlord of any collection by mortgage lenders for the value of the
diminished fee.
13.3 Landlord's Option to Terminate. If more than twenty
percent (20%) of the Building shall be taken as aforesaid, Landlord
may, by written notice to Tenant, terminate this Lease. If this Lease
is terminated as provided in this Section, rent shall be paid up to
the day that possession is so taken by public authority and Landlord
shall make an equitable refund of any rent paid by Tenant in advance.
13.4 Award. Tenant shall not be entitled to and expressly
waives all claim to any condemnation award for any taking, whether
whole or partial and whether for diminution in value of the leasehold
or to the fee, although Tenant shall have the right, to the extent
that the same shall not reduce Landlord's award, to claim from the
condemnor, but not from the Landlord, such compensation as may be
recoverable by Tenant in its own right for damages to Tenant's
business and fixtures.
13.5 Definition. As used in this Part XIII the term
"condemnation proceeding" means any action or proceeding in which any
interest in the Leased Premises is taken for any public or
quasi-public purpose by any lawful authority through exercise of
eminent domain or right of condemnation or by purchase or otherwise in
lieu thereof.
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XIV. LANDLORD'S RIGHTS TO CURE
14.1 General Right. In the event of breach, default, or
noncompliance hereunder by Landlord, Tenant shall, before exercising
any right or remedy available to it, give Landlord written notice of
the claimed breach, default, or noncompliance. If prior to its giving
such notice Tenant has been notified in writing (by way of Notice of
Assignment of Rents and Leases, or otherwise) of the address of a
lender which has furnished any of the financing referred to in Part XV
hereof, concurrently with giving the aforesaid notice to Landlord,
Tenant shall, by registered mail, transmit a copy thereof to such
lender. For the fifteen (15) days following the giving of the
notice(s) required by the foregoing portion of this section (or such
longer period of time as may be reasonably required to cure a matter
which, due to its nature, cannot reasonably be rectified within
fifteen (15) days), Landlord shall have the right to cure the breach,
default, or noncompliance involved. If Landlord has failed to cure a
default within said period, any such lender shall have an additional
fifteen (15) days within which to cure the same or, if such default
cannot be cured within that period, such additional time as may be
necessary if within such fifteen (15) day period said lender has
commenced and is diligently pursuing the actions or remedies necessary
to cure the breach default, or noncompliance involved (including, but
not limited to, commencement and prosecution of proceedings to
foreclose or otherwise exercise its rights under its mortgage or other
security instrument, if necessary to effect such cure), in which event
this Lease shall not be terminated by Tenant so long as such actions
or remedies are being diligently pursued by said lender.
14.2 Mechanic's Lien. Should any mechanic's or other lien
be filed against the Leased Premises or any part thereof by reason of
Tenant's acts or omissions or because of a claim against Tenant,
Tenant shall cause the effect of the same to be cancelled and
discharged or bonded over or otherwise within ten (10) days after
written notice by Landlord.
XV. FINANCING; SUBORDINATION
15.1 Subordination. Tenant acknowledges that it might be
necessary for Landlord or its successors or assigns to secure mortgage
loan financing or refinancing affecting the Leased Premises. Tenant
also acknowledges that the lender interested in any given loan may
desire that Tenant's interest under this Lease be either superior or
subordinate to the mortgage then held or to be taken by said Lender.
Accordingly, Tenant agrees that at the request of Landlord at any time
and from time to time Tenant shall execute and deliver to Landlord an
instrument, in form reasonably acceptable to Landlord, whereby Tenant
subordinates its interest under this Lease and in the Leased Premises
to such of the following encumbrances as may be specified by Landlord:
Any mortgage or trust deed and customary related instruments are
herein collectively referred to merely as a "Mortgage" and securing a
loan obtained by Landlord or its successors or assigns for the purpose
of enabling acquisition of the Building and/or construction of
additional improvements to provide permanent financing for the
Building, or for the purpose of refinancing any such construction,
acquisition, standing or permanent loan. Provided, however, that any
such instrument or subordination executed by Tenant shall provide that
so long as Tenant continues to perform all of its obligations under
this Lease its tenancy shall remain in full force and effect
notwithstanding Landlord's default in connection with the Mortgage
concerned or any resulting foreclosure or sale
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or transfer in lieu of such proceedings. Tenant shall not subordinate
its interests hereunder or in the Leased Premises to any lien or
encumbrance other than the Mortgages described in and specified
pursuant to this Section 15.1 without the prior written consent of
Landlord and of the lender interested under each mortgage then
affecting the Leased Premises. Any such unauthorized subordination by
Tenant shall be void and of no force or effect whatsoever.
15.2 Attornment. Any sale, assignment, or transfer of
Landlord's interest under this Lease or in the Leased Premises
including any such disposition resulting from Landlord's default under
a mortgage, shall be subject to this Lease and also Tenant shall
attorn to Landlord's successor and assigns and shall recognize such
successor or assigns as Landlord under this Lease, regardless of any
rule of law to the contrary or absence of privity of contract.
15.3 Financial Information. As a condition to Landlord's
acceptance of this Lease, Tenant shall provide financial information
sufficient to verify to Landlord the financial condition of Tenant.
Tenant hereby represents and warrants that none of such information
contains or will contain any untrue statement of material fact, nor
will such information omit any material fact necessary to make the
statements contained therein misleading or unreliable. Any financial
information provided by Tenant shall beheld in confidence and
distributed only to Landlord's investors or lenders for the Leased
Premises.
XVI. EVENTS OF DEFAULT; REMEDIES OF LANDLORD
16.1 Default by Tenant. Upon the occurrence of any of the
following events, Landlord shall have the remedies set forth in
Section 16.2:
(a) Tenant fails to pay any installment of Basic Annual
Rent or Estimated Costs or any other sum due hereunder within ten (10)
days after Tenant receives written notice of rent due.
(b) Tenant fails to perform any other term, condition, or
covenant to be performed by it pursuant to this Lease within ten (10)
days after written notice of such default shall have been given to
Tenant by Landlord or, if cure would reasonably require more than ten
(10) days to complete, if Tenant fails to commence performance within
the ten (10) day period or fails diligently to pursue such cure to
completion.
(c) Tenant shall become bankrupt or insolvent or file any
debtor proceedings or have taken against such party in any court
pursuant to state or federal statute, a petition in bankruptcy or
insolvency, reorganization, or appointment of a receiver or trustee;
or Tenant petitions for or enters into an arrangement; or suffers this
Lease to be taken under a writ of execution.
16.2 Remedies. In the event of any default by Tenant
hereunder, Landlord may at any time, without waiving or limiting any
other right or remedy available to it, terminate Tenant's rights under
this Lease by written notice, reenter and take possession of the
Premises by any lawful means
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(with or without terminating this Lease), or pursue any other remedy
allowed by law. Tenant agrees to pay to Landlord the cost of
recovering possession of the Premises, all costs of reletting, and
arising out of Tenant's default, including attorneys' fees.
Notwithstanding any reentry, the liability of Tenant for the rent
reserved herein shall not be extinguished for the balance of the Term,
and Tenant agrees to compensate Landlord upon demand for any
deficiency arising from reletting the Premises at a lesser rent than
applies under this Lease.
16.3 Past Due Sums; Penalty. If Tenant fails to pay, when
the same is due and payable, any Basic Annual Rent, Estimated Costs
and electrical charges within ten (10) days after the same is due and
payable, or other sum required to be paid by it hereunder, such unpaid
amounts shall bear interest from the due date thereof to the date of
payment at a fluctuating rate equal to two percent (2%) per annum
above the prime rate of interest charged by First Security Bank of
Utah, Salt Lake City, Utah. In addition thereto, Tenant shall pay a
sum of five percent (5%) of such unpaid amounts as a service fee.
Notwithstanding the foregoing, however, Landlord's right concerning
such interest and service fee shall be limited by the maximum amount
which may properly be charged by Landlord for such purposes under
applicable law.
XVII. PROVISIONS APPLICABLE AT TERMINATION OF LEASE
17.1 Surrender of Premises. At the expiration of this
Lease, except for changes made by Tenant that were approved by
Landlord, Tenant shall surrender the Leased Premises in the same
condition, less reasonable wear and tear, as they were in upon
delivery of possession thereto under this Lease and shall deliver all
keys to Landlord. Before surrendering the Leased Premises, Tenant
shall remove all of its personal property and trade fixtures and such
property or the removal thereof shall in no way damage the Leased
Premises, and Tenant shall be responsible for all costs, expenses and
damages incurred in the removal thereof. If Tenant fails to remove
its personal property and fixtures upon the expiration of this Lease,
the same shall be deemed abandoned and shall become the property of
Landlord.
17.2 Holding Over. Any holding over after the expiration
of the term hereof or of any renewal term shall be construed to be a
tenancy from month to month at such rates as Landlord may designate
and on the terms herein specified so far as possible. Landlord may not
in any event raise the rent above 110% of the last month's rent.
XVIII. ATTORNEYS' FEES
In the event that at any time during the term of this Lease any party
institutes any action or proceeding against any other party relating to the
provisions of this Lease or any default hereunder, then the unsuccessful party
in such action or proceeding agrees to reimburse the successful party for the
reasonable expenses of such action including reasonable attorneys' fees,
incurred therein by the successful party.
XIX. ESTOPPEL CERTIFICATE
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19.1 Landlord's Right to Estoppel Certificate. Tenant
shall, within fifteen (15) days after Landlord's request, execute and
deliver to Landlord a written declaration, in form and substance
similar to Exhibit "D", in recordable form: (1) ratifying this
Lease; (2) expressing the Commencement Date and termination date
hereof; (3) certifying that this Lease is in full force and effect
and has not been assigned, modified, supplemented or amended (except
by such writing as shall be stated); (4) that, if true, all
conditions under this Lease to be performed by Landlord have been
satisfied; (5) that there are no defenses or offsets against the
enforcement of this Lease by the Landlord, or stating those claimed by
Tenant; (6) the amount of advance rental, if any, (or none if such
is the case) paid by Tenant; (7) the date to which rental has been
paid; (8) the amount of security deposited with Landlord; and (9)
such other information as Landlord may reasonably request. Landlord's
mortgage lenders and/or purchasers shall be entitled to rely upon such
declaration.
19.2 Effect of Failure to Provide Estoppel Certificate.
Tenant's failure to furnish any Estoppel Certificate within fifteen
(15) days after request therefor shall be deemed a default hereunder
and moreover, it shall be conclusively presumed that: (a) this Lease
is in full force and effect without modification in accordance with
the terms set forth in the request; (b) that there are no unusual
breaches or defaults on the part of the Landlord; and (c) no more
than one (1) month's rent has been paid in advance.
XX. PARKING
Automobiles of Tenant and all visitors associated with Tenant shall be
parked only within parking areas designated by Landlord for parking. Landlord
or its agents shall, without any liability to Tenant or its occupants, have the
right to cause to be removed any automobile that may be wrongfully parked in a
prohibited or reserved parking area, and Tenant agrees to indemnify, defend and
hold Landlord harmless from and against any and all claims, losses, demands,
damages and liabilities asserted or arising with respect to or in connection
with any such removal of an automobile except due to Landlord's negligence.
Tenant shall from time to time, upon request of Landlord, supply Landlord with
a list of license plate numbers of all automobiles owned by Tenant or its
day-to-day occupant.
XXI. SIGNS, AWNINGS, AND CANOPIES
Tenant shall not place or suffer to be placed or maintained on any
exterior door, wall, or window of the Leased Premises, or elsewhere in the
Building, any sign, awning, marquee, decoration, lettering, attachment, or
canopy, or advertising matter or other thing of any kind, and will not place or
maintain any decoration, lettering, or advertising matter on the glass of any
window or door of the Leased Premises without obtaining the proper
authorization from Utah County prior to installing. Tenant will otherwise be
free to install signage of its choice.
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XXII. MISCELLANEOUS PROVISIONS
22.1 No Partnership. Neither Landlord nor the Property
Manager by this Lease, in any way or for any purpose, becomes a
partner or joint venturer of Tenant in the conduct of its business or
otherwise.
22.2 Force Majeure. Landlord and the Property Manager
shall be excused for the period of any delay in the performance of any
obligations hereunder when prevented from so doing by cause or causes
beyond their control, including labor disputes, civil commotion, war,
governmental regulations or controls, fire or other casualty,
inability to obtain any material or service, or acts of God.
22.3 No Waiver. Failure of any party to insist upon the
strict performance of any provision or to exercise any option
hereunder shall not be deemed a waiver of such breach. No provision
of this Lease shall be deemed to have been waived unless such waiver
be in writing signed by Landlord or the Property Manager or Tenant, as
the case may be.
22.4 Notice. Any notice, demand, request, or other
instrument which may be or is required to be given under this Lease
shall be (i) given by facsimile, (ii) delivered in person or (iii)
sent by United States certified or registered mail, postage prepaid
and shall be addressed (a) if to Landlord, at the place specified
for payment of rent, and (b) if to Tenant, either at the Leased
Premises or at any other current address for Tenant which is known to
Landlord. Either party may designate such other address as shall be
given by written notice or by facsimile transmission.
Landlord: XXXXX CORPORATE CAMPUS ONE, L.L.C.
C/O THE XXXXX COMPANY, L.C.
000 XXXXX 000 XXXX, XXXXX 000
XXXX XXXX XXXX, XXXX 00000
(000) 000-0000/FAX (000) 000-0000
ATTENTION: B. XXXX XXXXXXX
Tenant: XXXXX LEADERSHIP CENTER, INC.
000 XXXX 0000 XXXXX
XXXXX, XXXX
AND
XXXXXXX X. XXXX, ESQ.
JAMESTOWN SQUARE
0000 XXXXX XXXXXXXXXX XXXXXX
XXXXX 000
XXXXX, XXXX 00000
(000) 000-0000/FAX (000) 000-0000
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Property
Manager: THE XXXXX COMPANY, L.C.
000 XXXXX 000 XXXX, XXXXX 000
XXXX XXXX XXXX, XXXX 00000
(000) 000-0000/FAX (000) 000-0000
22.5 Captions; Attachments; Defined Terms.
(a) The captions to the section of this Lease are for
convenience of reference only and shall not be deemed relevant in
resolving questions of construction or interpretation under this
Lease.
(b) Exhibits referred to in this Lease, and any addendums
and schedules attached to this Lease shall be deemed to be
incorporated in this Lease as though part thereof.
22.6 Recording. Tenant may record this Lease or a
memorandum thereof with the written consent of Landlord, which consent
shall not be unreasonably withheld. Landlord, at its option and at any
time, may file this Lease for record with the Recorder of the County
in which the Building is located.
22.7 Partial Invalidity. If any provision of this Lease
or the application thereof to any person or circumstance shall to any
extent be invalid, the remainder of this Lease or the application of
such provision to persons or circumstances other than those as to
which it is held invalid shall not be affected thereby and each
provision of this Lease shall be valid and enforced to the fullest
extent permitted by law.
22.8 Broker's Commissions. Tenant represents and warrants
that there are no claims for brokerage commissions or finder's fees in
connection with this Lease and agrees to indemnify Landlord against
and hold it harmless from all liabilities arising from such claim,
including any attorneys' fees connected therewith.
22.9 Tenant Defined: Use of Pronouns. The word "Tenant"
shall be deemed and taken to mean each and every person or party
executing this document as a Tenant herein. If there is more than one
person or organization set forth on the signature line as the Tenant,
their liability hereunder shall be joint and several. If there is
more than one Tenant, any notice required or permitted by the terms of
this Lease may be given by or to any one thereof, and shall have the
same force and effect as if given by or to all thereof. The use of
the neuter singular pronoun to refer to Landlord or Tenant shall be
deemed a proper reference even though Landlord or Tenant may be an
individual, a partnership, a corporation, or a group of two or more
individuals or corporation. The necessary grammatical changes
required to make the provisions of this Lease apply in the plural
sense where there is more than one Landlord or Tenant and to
corporations, associations, partnerships, or individuals, males or
females, shall in all instances be assumed as though in each case
fully expressed.
22.10 Provisions Binding, Etc. Except as otherwise
provided, all provisions herein shall be binding upon and shall inure
to the benefit of the parties, their legal representatives, heirs,
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26
successors, and assigns. Each provision to be performed by Tenant
shall be construed to be both a covenant and a condition, and if there
shall be more than one Tenant, they shall all be bound, jointly and
severally, by such provisions. In the event of any sale or assignment
(except for purposes of security or collateral) by Landlord of the
Building, the Leased Premises, or this Lease, Landlord shall, from and
after the Commencement Date (irrespective of when such sale or
assignment occurs), be entirely relieved of all of its obligations
hereunder.
22.11 Entire Agreement, Etc. This Lease and the Exhibits,
Riders, and/or Addenda, if any, attached hereto, constitute the entire
agreement between the parties. All Exhibits, riders, or addenda
mentioned in this Lease are incorporated herein by reference. Any
prior conversations or writings are merged herein and extinguished.
No subsequent amendment to this Lease shall be binding upon each party
unless reduced to writing and signed. Submission of this Lease for
examination does not constitute an option for the Leased Premises and
becomes effective as a lease only upon execution and delivery thereof
by Landlord to Tenant. If any provision contained in the rider or
addenda is inconsistent with a provision in the body of this Lease,
the provision contained in said rider or addenda shall control. The
captions and Section numbers appearing herein are inserted only as a
matter of convenience and are not intended to define, limit, construe,
or describe the scope or intent of any section or paragraph.
22.12 Governing Law. The interpretation of this Lease
shall be governed by the laws of the State of Utah. The parties
hereto expressly and irrevocably agree that either party may bring any
action or claim to enforce the provisions of this Lease in the State
of Utah, County of Utah, and each party irrevocably consents to
personal jurisdiction in the State of Utah for the purposes of any
such action or claim. Each party further irrevocably consents to
service of process in accordance with the provisions of the laws of
the State of Utah. Nothing herein shall be deemed to preclude or
prevent the parties hereto from bringing any action or claim to
enforce the provisions of this Lease in any other appropriate place or
forum.
21
27
IN WITNESS WHEREOF, the Landlord and Tenant have executed this Lease
on the day first set forth above.
LANDLORD: XXXXX CORPORATE CAMPUS ONE, L.L.C.
By ________________________________________
XXX X. XXXXXXX
MANAGER
By ________________________________________
XXXXXXX X.X. XXXXX
MANAGER
TENANT: XXXXX LEADERSHIP CENTER, INC.
By ________________________________________
XXXXXXX
X.X. XXXXX
PRESIDENT AND CEO
PROPERTY MANAGER: THE XXXXX COMPANY, L.C.
By ________________________________________
XXX X. XXXXXXX
PRESIDENT AND MANAGER
22
28
NOTARY
STATE OF UTAH )
) ss
COUNTY OF SALT LAKE )
On this______ day of _____________________ , 1996, personally appeared
before me XXX X. XXXXXXX, who duly acknowledged to me that he executed the
foregoing Lease as the Manager of XXXXX CORPORATE CAMPUS ONE, L.L.C.
My commission Expires: ___________________________________
Notary Public
4/28/97 Residing at SALT LAKE COUNTY
STATE OF )
) ss
COUNTY OF )
On this______ day of _____________________ , 1996, personally appeared
before me XXXXXXX X.X. XXXXX, who duly acknowledged to me that he executed the
foregoing Lease as the Manager of XXXXX CORPORATE CAMPUS ONE, L.L.C.
___________________________________________
Notary Public
23
29
STATE OF )
) ss
COUNTY OF )
The foregoing instrument was acknowledged before me on this ___ day of
January, 1996, by XXXXXXX X.X. XXXXX, the President and CEO of XXXXX LEADERSHIP
CENTER, INC. XXXXXXX X.X. XXXXX stated that the foregoing instrument was
signed on behalf of said Corporation by authority (of its by-laws or pursuant
to a resolution of its board of directors) for the purposes and covenants
contained therein.
___________________________________________
Notary Public
STATE OF UTAH )
) ss
COUNTY OF SALT LAKE )
On this______ day of _____________________ , 19 , personally appeared
before me XXX X. XXXXXXX, who duly acknowledged to me that he executed the
foregoing Lease as the President and Manager of THE XXXXX COMPANY, L. C., A
UTAH LIMITED LIABILITY COMPANY.
My commission Expires: ___________________________________________
Notary Public
4/28/97 Residing at SALT LAKE COUNTY
24
30
THIS RIDER IS INCORPORATED INTO THE LEASE AGREEMENT AND MADE A PART THEREOF
A. TENANT'S RIGHT OF FIRST REFUSAL TO PURCHASE BUILDING
Landlord grants to Tenant the right of first refusal exercisable after
the Commencement Date during the term of the Lease to purchase the Building
(the "Right of First Refusal"). If at any time after the Commencement Date
during the term of this Lease Landlord shall desire to accept an offer from a
third person to purchase the Building, it shall provide written notice of such
intent to Tenant together with a copy of the offer. Tenant shall have twenty
(20) days to elect to purchase the Building strictly upon the terms and
conditions, including price, as set forth in the offer. If Tenant does not
timely exercise the Right of First Refusal, this Right of First Refusal shall
expire and Landlord may thereafter sell the Building upon terms and conditions,
including price, which are not more favorable to the buyer that is set forth in
the offer. This Right of First Refusal shall not apply to a foreclosure sale,
trustee's sale or deed in lieu of foreclosure by or to a mortgage lender in
respect of the Building.
B. TENANT'S OPTION TO PURCHASE BUILDING
1. Commencing as of the Commencement Date and continuing
throughout the term of the Lease, Tenant shall have the right
and option to purchase all of Landlord's right, title and
interest in the Building upon the terms and conditions set
forth in this portion of the Rider (the "Purchase Option").
To exercise this Purchase Option, tenant shall give written
notice of exercise to Landlord in the manner provided in the
Lease. Tenant may exercise the Purchase Option only if no
default, or circumstance which with the giving of notice
and/or the passage of time would constitute a default, is then
existing.
2. The Purchase Price which Tenant shall pay to Landlord for its
entire right, title and interest in the Building (the
"Purchase Price") shall be the sum of the following:
(a) The amount of any prepayment fee, premium or similar
charge incurred by Landlord in discharging any lien
or encumbrance which secures any monetary obligation
on the Building.
(b) the Fair Market Value (as defined below)
3. For purposes of this Purchase Option, the following terms
shall have the meanings set forth:
(a) "Fair Market Value" means the value of the Building
as agreed upon in writing by Landlord and Tenant or,
if the Landlord and Tenant cannot agree upon such
value within thirty (30) days after the Tenant
exercises
R-1
31
the Purchase Option, then either Landlord or Tenant
may nominate three (3) qualified, independent
appraisers to appraise the Building, each of whom
shall:
(i) be a member in good standing of the Utah
Chapter of the Appraisal Institute;
(ii) be state certified under the Utah Real Estate
Appraiser Registration and Certification Act;
and
(iii) shall have not less than five (5) years of
experience valuing office buildings in Utah
County, Utah.
The other party shall then select one (1) of the
nominated appraisers to perform an appraisal to
determine the Fair Market Value of the Building. The
costs and fees of the appraiser shall be paid in
equal shares by Landlord and Tenant. In determining
the Fair Market Value it shall be assumed that all
liens and encumbrances securing obligations to pay
loans or other fixed or determinable sums have been
discharged.
4. The closing, pursuant to the Purchase Option, shall occur
thirty (30) days after the Purchase Price is determined. At
the closing:
(a) Tenant shall pay the Purchase Price in cash.
(b) Landlord shall convey title to the Building to Tenant
by special warranty deed and shall be obligated to
provide at Landlord's cost a standard owner's policy
of title insurance.
(c) Landlord shall discharge all liens and encumbrances
securing obligations to pay loans or other fixed or
determinable sums or obligations owing to mechanics
or materialmen. Tenant shall take the Building
subject to all other encumbrances and exceptions of
record.
(d) Landlord shall represent and warrant to the best of
its knowledge as to customary matters involving the
condition of the Building.
(e) Each of the parties shall bear its costs and
attorneys' fees in connection with the exercise and
closing under the Purchase Option; provided, Landlord
shall pay the premium on the policy of title
insurance delivered to Tenant, and Landlord and
Tenant shall each pay one-half ( 1/2) of the fees of
the escrow agent.
R-2
32
5. If the Tenant exercises the Purchase Option but timely fails
to close for any reason other than the fault of Landlord, the
Purchase Option shall thereafter expire and shall no longer be
enforceable.
R-3
33
AMENDMENT TO LEASE AGREEMENT
_________THIS LEASE AMENDMENT is made and entered into this 1st day of May 24,
1996 by and between XXXXX CORPORATE CAMPUS ONE, L.L.C., hereinafter referred to
as the "Landlord" and XXXXX LEADERSHIP CENTER, INC., hereinafter referred to as
the "Tenant."
RECITALS:
WHEREAS, on the 1st day of January 1996 Landlord and Tenant entered
into a certain Lease Agreement providing for the lease by Landlord to Tenant of
office space located in a three-story office building (the "Building"), being
constructed at approximately 000 Xxxx 0000 Xxxxx, Xxxxx, Xxxx, for the rental
and on terms and conditions more particularly set forth in said Lease; and
WHEREAS, the parties hereto desire to amend the Lease in certain
respects.
NOW THEREFORE, for and in consideration of the mutual promises herein
contained, the parties hereto agree that the said Lease Agreement shall be and
is hereby amended as follows:
1. ARTICLE 1.1(a): The first sentence of Article 1.1(a) of the
Lease is hereby amended and restated in its entirety to read
as follows:
(a) That certain floor area consisting of approximately
56,245 gross rentable square feet (the "Leased Premises"),
consisting of 17,567 gross rentable square feet on floor one,
17,350 gross rentable square feet on floor two, 17,058 gross
rentable square feet on floor three and 4,270 gross rentable
square feet in the basement, in the three-story office
building (the "Building") being constructed at approximately
000 Xxxx 0000 Xxxxx, Xxxxx, Xxxx, xx the real property (the
"Property") described on Exhibit "A" attached hereto and by
this reference incorporated herein.
2. ARTICLE 1.3, CONSTRUCTION OF SHELL BUILDING: The first
sentence of Article 1.3 is hereby amended and restated in its
entirety to read as follows:
Landlord shall at its own cost and expense construct and
complete a three-story, 56,245 gross rentable square foot
building and cause all of the construction which is to be
performed by it in completing the building and performing its
work as set forth on Exhibit "C" to be substantially completed
as evidenced by a Certificate of Occupancy, and the Lease
Premises ready for Tenant to install its fixtures and
equipment and perform its other work as described on Exhibit
"C" as soon as reasonably possible but in no event later than
January 1, 1997 (the "Target Date").
34
3. ARTICLE 2.3, CONSTRUCTION OF LEASE PREMISES: The third
sentence of Article 2.3 is hereby amended and restated in its
entirety to read as follows:
Landlord shall pay $973,896.00 ($22.00 per usable square feet
multiplied by 44,268 usable square feet as determined by
architect) of the cost listed (excluding cost to construct
shell building) and tenant shall be obligated for the
remaining costs shown on Exhibit "E".
4. ARTICLE 3.1, BASIC ANNUAL RENT: The first sentence of Article
3.1 is hereby amended and restated in its entirety to read as
follows:
Tenant agrees to pay the Landlord as Basic Annual Rent (the
"Basic Annual Rent") at such place as Landlord may designate
the sum of Eight Hundred Ninety Nine Thousand Nine Hundred
Twenty and no/100 Dollars ($899,920.00), which includes the
basement storage space.
5. ARTICLE 4.1(c): The second sentence of Article 4.1(c) is
hereby amended and restated in its entirety to read as
follows:
The estimated costs for the calendar year in which the Lease
Commencement commences is $179,028.00, and are not included in
the Basic Annual Rent.
6. EXHIBIT "C", WORK LETTERS, SECTION I, PARAGRAPH 8: The fourth
sentence of Paragraph IA of Exhibit "C" is hereby amended and
restated in its entirety to read as follows:
Without limiting the generality of the foregoing, preliminary
plans shall provide for a three-story building containing
56,245 rentable square feet of space and shall be generally
consistent with the Conceptual Plans and Drawings attached
hereto as Exhibit "B" and incorporated herein (the "Conceptual
Drawings")
7. EXHIBIT "C", WORK LETTERS, SECTION II, PARAGRAPH F: The first
sentence of Paragraph IIF of Exhibit "C" is hereby amended and
restated in its entirety to read as follows:
Landlord shall pay a tenant finish allowance of $973,896.00 or
$22.00 per usable square foot which shall be applied toward
the total construction cost of the tenant finish.
8. EXHIBIT "E": Exhibit "E" is hereby modified by changing the
square footage on the third line of Exhibit "E" from 43,396 to
44,268 and the Landlord Allowance shall be changed from
$954,712.00 to $973,896.00.
35
The Lease shall remain in full force and effect as therein stated
except as herein modified or amended by this Amendment to Lease Agreement.
IN WITNESS WHEREOF, this Amendment Lease Agreement has been executed
the day and year first hereinabove written.
LANDLORD: XXXXX CORPORATE CAMPUS ONE, L.L.C.
By_____________________________________
Xxx X. Xxxxxxx
Manager
By_____________________________________
Xxxxxxx X.X. Xxxxx
Manager
TENANT: XXXXX LEADERSHIP CENTER, INC.
By_____________________________________
Xxxxxxx X.X. Xxxxx
President and CEO
36
SECOND AMENDMENT TO LEASE AGREEMENT
(BUILDING NO. 1)
THIS SECOND AMENDMENT TO LEASE AGREEMENT (the "Second Amendment") is
made effective the 21st day of March, 1997, by and between XXXXX CORPORATE
CAMPUS ONE, L.L.C., a Utah limited liability company (the "Landlord"), XXXXXXXX
XXXXX CO., a Utah corporation (the "Tenant") and THE XXXXX COMPANY, L.C., a Utah
limited liability company (the "Property Manager").
RECITALS:
On the 1st day of January, 1996, Landlord and Xxxxx Leadership Center,
Inc., a Utah corporation ("CLC") as tenant, entered into a certain Lease
Agreement providing for the lease by Landlord to Tenant of office space located
in a three-story office building, at approximately 000 Xxxx 0000 Xxxxx, Xxxxx,
Xxxx, for the rental and on terms and conditions more particulary set forth in
said Lease. The original Lease Agreement was modified and amended by a written
instrument dated May 24, 1996. (The Lease Agreement as modified by the Amendment
is collectively referred to in this Second Amendment as the "Existing Lease
Agreement".) Effective June 2, 1997, Xxxxxxxx Xxxxx Co. became the successor in
interest to CLC by merger. The parties desire to amend the Existing Lease
Agreement as follows:
AGREEMENT:
For and in consideration of the mutual promises herein contained, the
receipt and sufficiency of which are hereby acknowledged, the parties agree that
the Existing Lease Agreement shall be and is hereby amended as follows:
1. Amendment of Recitals. Delete the third sentence of introductory
paragraph of the Existing Lease Agreement (i.e., the sentence that commences
with the words "This Lease is made" and ends with the words "July 7, 1995").
2. Amendment to Section 1.1(c). Section 1.1(c) of the Existing Lease
Agreement is hereby amended and restated as follows:
(c) The non-exclusive right to use those areas on the Property
and on the Adjacent Property (as defined in Section 16 of this Second
Amendment) which are designated and suitable for vehicular parking.
Landlord represents that One Hundred and Ninety Eight (198) parking
stalls are located on the Property and Two Hundred Sixty (260) parking
stalls are located on the Adjacent Property. Landlord covenants that Two
Hundred and Five (205) parking stalls shall always be available on
either the Property or the Adjacent Property for use in connection with
the Building by Tenant, its guests, employees and visitors, and that the
total number of parking stalls on the Property and the Adjacent Property
shall not be less than Four Hundred and Fifty-Six (456) parking stalls.
37
3. Amendment to Section 2.1. The text of Article 2.1 of the Existing
Lease Agreement is hereby amended and restated in its entirety as follows:
2.1 Length of Term. The term of this Lease shall be for a period which
commences as of the Commencement Date and shall continue until November
30, 2009 (the "Expiration Date").
4. Amendment to Section 4.1. Section 4.1(a) of the Existing Lease
Agreement is amended as follows:
(a) In line 17 of Section 4.1(a), insert a closing parentheses
between "gardening" and before the next comma.
(b) In Line 19, insert the words "per annum" after the words "one
percent (1%)" and before the words "of Direct Costs."
(c) In line 33, insert the words "described in Section 8.1"
between the words "expenses" and "which."
5. Amendment of Section 6.2(c). Section 6.2(c) of the Existing Lease
Agreement is amended in its entirety to read as follows:
(c) Adversely overload the floors or otherwise damage the
structural soundness of the Leased Premises or Building or any
part thereof.
6. Amendment of Section 7.1 of Existing Lease Agreement. The first
paragraph of Section 7.1 of the Existing Lease Agreement is hereby amended in
its entirety to read as follows:
7.1 Obligations of Landlord. Except for the specific services and
costs described herein, Landlord shall provide all services and pay for
all costs associated with the normal operation and maintenance of the
Leased Premises at a level consistent with services and maintenance
provided by lessors with respect to similar buildings located in Provo,
Utah. Therefore, during the term of this Lease the Landlord shall cause
to be furnished to the Leased Premises during normal operating hours the
general services described in Section 4.1(a) above, the cost and expense
of which shall be included in Direct Costs. For the purposes of this
Lease, normal operating hours for the Leased Premises are from 7:00 a.m.
to 6:00 p.m., Monday through Friday. These services include without
limitation the following:
The balance of Section 7.1, consisting of subsections (a) through (h), is not
altered.
7. Amendment of Section 7.2 of Existing Lease Agreement. Section 7.2 of
the Existing Lease Agreement is hereby amended in its entirety to read as
follows:
2
38
7.2 Tenant's Election. Tenant may at any time after the first
year of the lease term elect to reduce or to terminate Landlord's
obligation to provide the services described in Section 7.1 by giving
written notice of such election to Landlord not less than sixty (60)
days before the date upon which such change is to be effective. From and
after the effective date of any election of termination, Tenant shall
provide all services described in Section 7.1 in a good and workmanlike
manner, consistent with property management practices for similar
buildings in the same geographic area, and Landlord shall have no
further obligation to provide any service described in the first
sentence of this Section 7.1. Further, should Tenant elect to terminate
Landlord's obligation to provide the services described in Section 7.1,
the management fee as described in Section 4.1(a) shall be reduced to
one percent (1%) per annum of Basic Annual Rent and shall be paid to the
Property Manager; provided, if upon exercise of remedies by a Mortgagee,
The Xxxxx Company, L.C. is no longer the Property Manager, the fee shall
be equal to a reasonable management fee for services then provided by
Landlord not to exceed two percent (2%) per annum.
8. Amendment of Section 8.1 of Existing Lease Agreement. Section 8.1 of
the Existing Lease Agreement is hereby amended in its entirety to read as
follows:
8.1 Maintenance and Repairs by Landlord. The Landlord shall
maintain in good order, condition and repair the structural components
of the Leased Premises including, without limitation, roof, exterior
walls and foundations, as well as all repairs covered under construction
warranties; provided if the Landlord is required to make structural
repairs by reason of Tenant's negligent acts or omissions, Tenant shall
pay the costs for making such repairs.
9. Amendment of Section 10.1 of Existing Lease Agreement. Section 10.1
of the Existing Lease Agreement is hereby amended in its entirety as follows:
10.1 Indemnification. Tenant shall indemnify, defend and hold
harmless Landlord from and against any and all suits, actions, damages,
claims, liabilities and expenses (the "Claims") in connection with loss
of life, bodily or personal injury or property damage occurring in, on
or about the Leased Premises except for Claims arising from the acts or
omissions of Landlord or the agents, representatives or employees of
Landlord. Landlord shall indemnify, defend and hold harmless Tenant from
and against any Claims arising from the acts or omissions of Landlord or
the agents, representatives or employees of Landlord. Notwithstanding
the provisions of this Section, neither party shall be liable to the
other to the extent Claims are paid by insurance proceeds. All insurance
policies maintained by Landlord and Tenant shall include a waiver of
subrogation endorsement which specifies that the insurance carried shall
waive any right of subrogation against Tenant or Landlord, as the case
may be.
3
39
10. Amendment of Section 11.2 of the Existing Lease Agreement. Section
11.2 of the Existing Lease Agreement is amended to provide that the limit of
coverage of the insurance policy provided by Tenant shall be not less than
$2,000,000.00.
11. New Section 11.5 of Existing Lease Agreement. A new Section 11.5 is
added to the Existing Lease Agreement which shall read as follows:
11.5 Insurance. Landlord shall obtain and maintain all insurance
Landlord deems appropriate for the Building and the premiums for such
insurance shall constitute a Direct Cost.
12. Amendment of Section 13.2 of Existing Lease Agreement. The third
line of Section 13.2 of the Existing Lease Agreement is amended to insert the
words "as reasonably determined by Tenant" after the words "business of Tenant"
and before the next comma.
13. Amendment of Section 15.3 of Existing Lease Agreement. Section 15.3
of the Existing Lease Agreement is amended to provide that Tenant shall furnish
to Landlord and Mortgagee such information as Landlord or any Mortgagee may
reasonably request to verify the financial condition of Tenant including balance
sheets, income and cash flows. Such statements shall be provided to Landlord and
any Mortgagee on a quarterly and annual basis. Annual statements shall be
audited by an independent certified public accountant. Notwithstanding the
foregoing, during such periods as Tenant is a reporting company under the
Securities Exchange Act of 1934, the Tenant shall be exempt from the foregoing
requirements but in lieu thereof shall provide its most current annual report to
Landlord and any Mortgagee promptly after the same is released.
14. Amendment of Section 17.1 of Existing Lease Agreement. Section 17.1
of the Existing Lease Agreement is amended in its entirety to read as follows:
17.1 Surrender of Premises. At the expiration of this Lease,
except for changes made by Tenant that were approved by Landlord, Tenant
shall surrender the Leased Premises in the same condition, less
reasonable wear and tear, as they were in upon delivery of possession
thereto under this Lease and shall deliver all keys to Landlord. Before
surrendering the Leased Premises, Tenant shall remove all of its
personal property and trade fixtures and such property or the removal
thereof shall in no way damage the Leased Premises, and Tenant shall be
responsible for all costs, expenses and damages incurred in the removal
thereof. If Tenant fails to remove its personal property and fixtures
upon the expiration of this Lease, then, at Landlord's election:
(a) the same shall be deemed abandoned and shall become
the property of Landlord; or
4
40
(b) Landlord may remove for the account and benefit of
Tenant such personal property and fixtures at the cost and
expense of Tenant and store the same at Tenant's cost and
expense.
15. Amendment of Right of First Refusal Rider. The right of first
refusal set forth as Part A of the Rider to the Existing Lease Agreement shall
not be exercisable with respect to any of the following proposed conveyances or
transfers:
(a) A judicial foreclosure sale or trustee's sale with respect
to a Mortgage; or
(b) A deed-in-lieu of judicial foreclosure or trustee's sale with
respect to a Mortgagee.
16. Amendment of Option. The option set forth as Part B of the Rider to
the Existing Lease Agreement shall be exercised only if Tenant simultaneously
exercises the similar option granted Tenant under that certain Lease Agreement
dated October 29, 1996 between Landlord and Tenant providing for the lease by
Landlord to Tenant of office space located in a three-story office building
adjacent to the Building at approximately 000 Xxxx 0000 Xxxxx, Xxxxx, Xxxx (the
"Adjacent Property"). In addition, such option shall be exercised only if Tenant
is not in default under the Existing Lease Agreement.
17. Assumption by Xxxxxxxx Xxxxx Co. Xxxxxxxx Xxxxx Co. assumes the
obligations of "Tenant" under the Existing Lease Agreement as amended by this
Second Amendment.
18. Master Declaration. The following new Section 6.3(c) is added to the
Existing Lease Agreement:
The terms of the Original Lease Agreement shall be subject in all
respects to, and the Tenant shall comply with, the provisions of that
certain Master Declaration of Protective Covenants and Restrictions for
Riverwoods Research and Business Park recorded October 24, 1991, as
Entry No. 42273, in Book 2847, at Page 618 of the official records of
Utah County (the "Master Declaration") any applicable Supplementary
Declaration, the Articles, the Bylaws and the Association Rules (as all
of those terms are defined in the Master Declaration). Any failure of
Tenant to so comply shall constitute a default hereunder.
19. Substitution of Exhibit "A". The "Legal Description of Property" set
forth on Exhibit "A" attached to the Existing Lease Agreement is amended and
replaced in its entirety as follows:
Beginning at a point which is South 2546.19 feet, and West 1534.50 feet,
from the Northeast Corner of Section 13, Township 6 South, Range 2 East,
Salt Lake Base and Meridian; thence South 72(degree)15'49" West 265.89
feet; thence South 72(degree)27'59" West 175.99 feet; thence due North
425.36 feet; thence North 72(degree)15'49" East 450.77 feet; thence
South 10(degree)19'19" West 126.40 feet; thence on a 428.00 foot
5
41
radius curve to the left 121.29 feet, having a central angle of
16(degree)14'15" and whose long chord bears South 02(degree)12'12" West
120.89 feet; thence South 05(degree)54'56" East 184.49 feet to the point
of beginning.
20. Ratification. In the event of any inconsistency between this Second
Amendment and the Existing Lease Agreement, the provisions of this Second
Amendment shall control. Except as amended by this Second Amendment, the
Existing Lease Agreement is ratified and affirmed.
6
42
IN WITNESS WHEREOF, this Second Amendment to the Existing Lease
Agreement has been executed the day and year first hereinabove written.
"LANDLORD"
XXXXX CORPORATE CAMPUS ONE, L.L.C.,
a Utah limited liability company
By
---------------------------------------
Xxx X. Xxxxxxx
Manager
By
---------------------------------------
Xxxxxxx X.X. Xxxxx
Manager
"TENANT"
XXXXXXXX XXXXX CO., a Utah corporation
By
---------------------------------------
Val Xxxx Xxxxxxxxxxx
Executive Vice President
"PROPERTY MANAGER"
THE XXXXX COMPANY, L.C., a Utah limited
liability company
By
---------------------------------------
Xxx X. Xxxxxxx
Its President and Manager
7
43
LEASE AGREEMENT
LANDLORD: XXXXX CORPORATE CAMPUS TWO, L.L.C.
TENANT: XXXXX LEADERSHIP CENTER, INC.
44
TABLE OF CONTENTS
DESCRIPTION PAGE
----------- ----
I. PREMISES 1
1.1 Description of Premises 1
1.2 Work of Improvement 1
1.3 Construction of Shell Building 2
II. TERM 2
2.1 Length of Term 2
2.2 Commencement Date; Obligation to Pay Rent 2
2.3 Construction of Leased Premises 2
2.4 Renewal Option 3
2.5 Acknowledgment of Commencement Date 3
III. BASIC RENTAL PAYMENTS 3
3.1 Basic Annual Rent 3
3.2 Additional Monetary Obligations 4
IV. ADDITIONAL RENT 4
4.1 Basic Annual Rent. 4
4.2 Report of Direct Costs and Statement of Estimated Costs 5
4.3 Payment of Costs 5
4.4 Resolution of Disagreement 6
4.5 Limitations 6
V. SECURITY DEPOSIT 6
VI. USE 6
6.1 Use of Leased Premises 6
6.2 Prohibition of Certain Activities or Uses 6
6.3 Affirmative Obligations with Respect to Use 7
6.4 Suitability 7
6.5 Personal Property Taxes 8
VII. UTILITIES AND SERVICE 8
7.1 Obligations of Property Manager 8
7.2 Tenant's Election 8
7.3 Tenant's Obligations 9
7.4 Additional Limitations 9
7.5 Limitation on Landlord's Liability 9
i
45
DESCRIPTION PAGE
----------- ----
VIII. MAINTENANCE AND REPAIRS; ALTERATIONS; ACCESS 9
8.1 Maintenance and Repairs by Property Manager 9
8.2 Maintenance and Repairs by Tenant 9
8.3 Alterations 10
8.4 Landlord's Access to Leased Premises 10
IX. ASSIGNMENT 10
9.1 Assignment Prohibited 10
9.2 Consent Required 11
9.3 Landlord's Right in Event of Assignment 11
X. INDEMNITY 11
10.1 Indemnification 11
10.2 Release of Landlord 12
10.3 Notice 12
10.4 Litigation 12
XI. INSURANCE 13
11.1 Fire and "All Risk" Insurance on Tenant's Personal Property and Fixtures 13
11.2 Liability Insurance 13
11.3 Subrogation 13
11.4 Lender 13
XII. DESTRUCTION 13
XIII. CONDEMNATION 14
13.1 Total Condemnation 14
13.2 Partial Condemnation 14
13.3 Landlord's Option to Terminate 14
13.4 Award 14
13.5 Definition 14
XIV. LANDLORD'S RIGHTS TO CURE 15
14.1 General Right 15
14.2 Mechanic's Lien 15
XV. FINANCING; SUBORDINATION 15
15.1 Subordination 15
15.2 Attornment 16
15.3 Financial Information 16
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DESCRIPTION PAGE
----------- ----
XVI. EVENTS OF DEFAULT; REMEDIES OF LANDLORD 16
16.1 Default by Tenant 16
16.2 Remedies 16
16.3 Past Due Sums; Penalty 17
XVII. PROVISIONS APPLICABLE AT TERMINATION OF LEASE 17
17.1 Surrender of Premises 17
17.2 Holding Over 17
XVIII. ATTORNEYS' FEES 17
XIX. ESTOPPEL CERTIFICATE 18
19.1 Landlord's Right to Estoppel Certificate 18
19.2 Effect of Failure to Provide Estoppel Certificate 18
XX. PARKING 18
XXI. SIGNS, AWNINGS, AND CANOPIES 18
XXII. MISCELLANEOUS PROVISIONS 18
22.1 No Partnership 19
22.2 Force Majeure 19
22.3 No Waiver 19
22.4 Notice 19
22.5 Captions; Attachments; Defined Terms 20
22.6 Recording 20
22.7 Partial Invalidity 20
22.8 Broker's Commissions 20
22.9 Tenant Defined: Use of Pronouns 20
22.10 Provisions Binding, Etc. 20
22.11 Entire Agreement, Etc. 21
22.12 Governing Law 21
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DESCRIPTION PAGE
----------- ----
SIGNATURES 22
NOTARIES 23 & 24
RIDER Yes [X] No [ ]
GUARANTY Yes [ ] No [ ]
EXHIBIT "A" DESCRIPTION OF REAL PROPERTY
EXHIBIT "B" FLOORPLAN OF LEASED PREMISES
EXHIBIT "C" WORK LETTER-CONSTRUCTION AND/OR FINISH OF
IMPROVEMENTS TO LEASED PREMISES
EXHIBIT "D" ACKNOWLEDGMENT OF COMMENCEMENT DATE &
ESTOPPEL CERTIFICATE
EXHIBIT "E" COST TO CONSTRUCT LEASED PREMISES
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LEASE AGREEMENT
XXXXX LEADERSHIP OFFICE BUILDING II
THIS LEASE AGREEMENT (the "Lease") is made and entered into as of this
______ day of October, 1996 by and between XXXXX CORPORATE CAMPUS TWO, L.L.C.
(the "Landlord"), and XXXXX LEADERSHIP CENTER, INC. (the "Tenant"). THE XXXXX
COMPANY, L. C. (the "Property Manager") is also a party to this Lease for the
limited purpose of providing the property management services described herein.
For and in consideration of the rental to be paid by tenant and of the
covenants and agreements herein set forth to be kept and performed by Tenant,
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord, the
Leased Premises (as hereafter defined), at the rental and subject to and upon
all of the terms, covenants and agreements hereinafter set forth.
I. PREMISES
1.1 Description of Premises. Landlord does hereby
demise, lease and let unto Tenant, and Tenant does hereby take and
receive from Landlord the following:
(a) That certain floor area containing approximately
62,916 gross rentable square feet (the "Leased Premises"), on Floors
One, Two and Three (includes 4,719 square feet in the basement) of the
three-story office building (the "Building") being constructed at
approximately 000 Xxxx 0000 Xxxxx, Xxxxx, Xxxx, xx the real property
(the "Property") described on Exhibit "A" attached hereto and by this
reference incorporated herein. The space occupied by Tenant consists
of the entire Building, as set forth on Exhibit "B" which is attached
hereto and by this reference incorporated herein.
(b) Such non-exclusive rights-of-way, easements and
similar rights with respect to the Building and Property as may be
reasonably necessary for access to and egress from, the Leased
Premises.
(c) The exclusive right to use those areas designated and
suitable for vehicular parking, including the exclusive right to the
use of Two Hundred Fifty-one (251) parking stalls.
1.2 Work of Improvement. The obligation of Landlord and
Tenant to perform the work and supply the necessary materials and
labor to prepare the Leased Premises for occupancy are described in
detail on Exhibit "C". Landlord and Tenant shall expend all funds and
do all acts required of them as described on Exhibit "C" and shall
perform or have the work performed promptly and diligently in a first
class and workmanlike manner.
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1.3 Construction of Shell Building. Landlord shall, at
its own cost and expense, construct and complete a three story 62,916
gross rentable square foot building and cause all of the construction
which is to be performed by it in completing the Building and
performing its work as set forth on Exhibit "C", to be substantially
completed as evidenced by a Certificate of Occupancy, and the Leased
Premises ready for Tenant to install its fixtures and equipment and to
perform its other work as described on Exhibit "C" as soon as
reasonably possible, but in no event later than July 1, 1997 ("Target
Date"). In the event that Landlord's construction of obligation has
not been fulfilled upon the expiration of the"Target Date", Tenant
shall have the right to exercise any right or remedy available to it
under this Lease, including the right to terminate this Lease and the
right to charge Landlord and cause Landlord to pay any increased costs
associated with Tenant's current leases due to holding over in such
space or moving to temporary space; provided that under no
circumstances shall Landlord be liable to Tenant resulting from delay
in construction covered by circumstances beyond Landlord's direct
control.
II. TERM
2.1 Length of Term. The term of this Lease shall be for
a period of twenty (20) years plus the partial calendar month, if any,
occurring after the Commencement Date (as hereinafter defined) if the
Commencement Date occurs other than on the first day of a calendar
month.
2.2 Commencement Date; Obligation to Pay Rent. The term
of this Lease and Tenant's obligation to pay rent hereunder shall
commence on the first to occur of the following dates ("Commencement
Date"): (Projected to be July 1, 1997)
(a) The date Tenant occupies the Premises and conducts
business.
(b) The date fifteen (15) days after the Landlord, or
Landlord's supervising contractor, notified Tenant in writing that
Landlord's construction obligations respecting the Leased Premises
have been fulfilled and/or that the Leased Premises are ready for
occupancy and/or performance of Tenant's work. Such notice shall be
accompanied by an occupancy permit and a certificate from the Building
Architect stating that remaining punchlist items can be completed
within fifteen (15) days and will not materially interfere with
Tenant's business. Prior to Commencement Date, it is contemplated
that Tenant shall be able to perform its construction obligation as
per Exhibit C II(H).
2.3 Construction of Leased Premises. Landlord shall
provide a budget prior to the commencement of construction of the
Leased Premises (see Exhibit "E"). Landlord shall itemize each part
of the construction and its associated estimated cost. Landlord shall
pay an amount equal to $1,099,010 or $22.00 per usable square foot (on
49,955 usable square feet excluding the basement space of 4,719 square
feet) of the cost listed (excluding cost to construct Shell Building)
and Tenant shall be obligated for the remaining costs shown on
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Exhibit "E". Landlord shall not be obligated to pay for any increase
in the actual cost of construction over and above the construction
costs shown on Exhibit "E". Any special decorator items, equipment,
furniture or furnishings not designated on Exhibit "E", as well as
changes initiated by the Tenant to the Leased Premises, shall be the
sole cost of Tenant and shall include the defined extras on Exhibit
"E."
2.4 Renewal Option. If this Lease then remains in full
force and effect, Tenant shall have the option to renew this Lease for
two five year options commencing on the expiration date. Each option
must be exercised by written notice to Landlord one hundred and eighty
(180) days before the expiration of the previous term and once
exercised is irrevocable. Base rent during each renewal term shall be
determined pursuant to Section 3.1 below.
2.5 Acknowledgment of Commencement Date. Landlord and
Tenant shall execute a written acknowledgment of the commencement Date
in the form attached hereto as Exhibit "D".
III. BASIC RENTAL PAYMENTS
3.1 Basic Annual Rent. Tenant agrees to pay to Landlord
as basic annual rent (the "Basic Annual Rent") at such place as
Landlord may designate, without prior demand therefore and without any
deduction or set off whatsoever, the sum of One Million Six Thousand
Six Hundred Fifty-Six and no/100 Dollars ($1,006,656.00) which
includes the basement storage space. Said Basic Annual Rent shall be
due and payable in twelve (12) equal monthly installments to be paid
in advance on or before the first day of each calendar month during
the term of the Lease. Basic Annual Rent shall escalate at the
beginning of the 4th year and every three (3) years thereafter using a
3% annually compounded rate or the change in the All Urban Index,
whichever is higher. For purposes of this Lease the term "All Urban
Index" shall mean the Consumer Price Index for All Urban
Consumers-U.S. City Average-all Items (1982-1984 equals 100 base) as
published by the United States Bureau of Labor Statistics or any
successor agency or any other index hereinafter employed by the Bureau
of Labor Statistics in lieu of said index. The price index for the
3rd month preceding the month in which the Lease commences shall be
considered the Basic Price Index. Therefore, the beginning of the 4th
year and every three years thereafter, the Basic Annual Rental set
forth in Section 3.1 shall be adjusted by multiplying such rental by a
fraction, the numerator of which is the Price Index for the 3rd month
preceding the beginning of the 4th year and the denominator of which
is the Basic Price Index. The above not withstanding, the maximum
increase at the beginning of the 4th year shall be no more than 15.76%
which is 5% per year compounded, and likewise on every adjustment date
hereafter, the maximum increase shall be limited as described herein.
In no event shall Basic Annual Rent be reduced. In the event
the Commencement Date occurs on a day other than the first day of a
calendar month, then rent shall be paid on the Commencement Date for
the initial fractional calendar month prorated on a per-diem basis
(based upon a thirty (30) day month).
3.2 Additional Monetary Obligations. Tenant shall also
pay as rental (in addition to the Basic Annual Rent) all other sums of
money as shall become due and payable by Tenant to Landlord
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under this Lease. Landlord shall have the same remedies in the case
of a default in the payment of said other sums of money as are
available to Landlord in the case of a default in the payment of one
or more installments of Basic Annual Rent.
IV. ADDITIONAL RENT
4.1 Basic Annual Rent. It is the intent of both parties
that the Basic Annual Rent herein specified shall be absolutely net to
the Landlord throughout the term of this Lease, and that all costs,
expenses and obligations relating to Tenant's pro rata share of the
Building, Property and/or Building, Property and/or Leased Premises
which may arise or become due during the term shall be paid by Tenant
in the manner hereafter provided.
For purposes of this Part IV and the Lease in general, the
following words and phrases shall have the meanings set forth below:
(a) "Direct Costs" shall mean all actual costs and
expenses incurred by the Property Manager or Landlord in connection
with Landlord's ownership, operation, management and maintenance of
the Building and Property and related improvements located thereon
(the "Improvements"), including, but not limited to, all expenses
incurred by Landlord or the Property Manager as a result of their
compliance with any and all of their obligations under this Lease
other than the performance by Landlord of its work under Sections 1.2,
1.3 and 2.3 of this Lease. In explanation of the foregoing, and not
in limitation thereof, Direct Costs shall include: all real property
taxes and assessments (whether general or special, known or unknown,
foreseen or unforeseen) and any tax or assessment levied or charged in
lieu thereof, whether assessed against Landlord and/or Tenant and
whether collected from Landlord and/or Tenant; snow removal, dumpster
service, insurance, license, permit and inspection fees, cost of
services of independent contractors, cost of compensation (including
employment taxes and fringe benefits) of all persons who perform
regular and recurring duties connected with day-to-day operation,
maintenance, repair, and replacement of the Building, its equipment
and the adjacent walk, and landscaped area (including, but not limited
to gardening, security, parking, elevator, painting, plumbing,
electrical, mechanical, carpentry, structural and roof repairs and
reserves (the Property Manager may collect in advance up to one
percent (1%) of Direct Costs as a reserve), signing and advertising,
and rental expense or a reasonable allowance for depreciation of
personal property used in the maintenance, operation and repair of the
Building. Direct costs shall also include property management fees,
which property management fees shall be equal to a percentage of
Tenant's Basic Annual Rent and Estimated Costs, which percentage shall
not exceed two and one half percent (2 1/2%) of the sum of Basic
Annual Rent and Direct Costs and shall be paid to the Property
Manager. However, Tenant shall pay the actual costs of water, sewer,
gas and electrical power directly to the municipal supplier of same.
Direct Costs shall not include expenses incurred in connection with
leasing, renovating, or improving space for tenants or other occupants
or prospective tenants or occupants of the Building, expenses incurred
for repairs resulting from damage by fire, windstorm or other
casualty, to the extent such repairs are paid for by insurance
proceeds, expenses paid by any tenant directly to third parties, or
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52
as to which Landlord is otherwise reimbursed by any third party or
Tenant; expenses which, by generally accepted accounting principles,
are treated as capital items except that if, as a result of
governmental requirements, laws or regulations, Landlord shall expend
monies directly or indirectly for improvements, additions or
alterations to the Building which, by generally accepted accounting
principles, are treated as a capital expenditures, the amortization of
such capital expenditures based on a life acceptable to the
appropriate taxing authority together with interest at the rate of 9%
per annum shall be considered Direct Costs. The foregoing
notwithstanding, Direct Costs shall not include depreciation on the
Building and Tenant Finish, and amounts paid toward principal or
interest of loans of Landlord.
(b) "Estimated Costs" shall mean the projected amount of
Tenant's Direct Costs, excluding the costs of electricity provided to
Tenant's Leased Premises. The Estimated Costs for the calendar year
in which the Lease commences are $200,072.00, and are not included in
the Basic Annual Rent. If the Estimated Costs as of the date Tenant
takes occupancy are greater than Tenant's Estimated Costs at the time
this Lease is executed, the Estimated Costs shall be increased to
equal the Estimated Costs as of the date of Tenant's occupancy.
4.2 Report of Direct Costs and Statement of Estimated
Costs.
(a) After the expiration of each calendar year occurring
during the term of this Lease, the Property Manager shall furnish
Tenant a written statement of Tenant's Direct Costs occurring during
the previous calendar year. The written statement shall specify the
amount by which Tenant's Direct Costs exceed or are less than the
amounts paid by Tenant during the previous calendar year pursuant to
Section 4.3(b) below.
(b) At the same time specified in Section 4.2(a) above,
Landlord shall furnish Tenant a written statement of the Estimated
Costs for the then current calendar year.
4.3 Payment of Costs. Tenant shall pay the Direct Costs
as follows:
(a) Each month Tenant shall pay to the Property Manager,
without offset or deduction, one-twelfth (1/12th) of the Estimated
Costs as defined in Sections 4.1(b) and 4.2(b) above.
(b) Within thirty (30) days after delivery of the written
statement referred to in section 4.2(a) above, Tenant shall pay to the
Property Manager the amount by which Tenant's Direct Costs, as
specified in such written statements, exceed and aggregate of such
costs actually paid by Tenant for the year at issue. Tenant shall
have the right to audit the Property Manager's books upon reasonable
notice. Tenant shall pay costs associated with the audit unless
Tenant finds that the Property Manager has inflated expenses by more
than ten percent (10%), in which case, the Property Manager will pay
audit charges. Payments by Tenant shall be made pursuant to this
Section 4.3(b) notwithstanding that a statement pursuant to Section
4.2(a) is furnished to Tenant after the expiration of the term of this
Lease.
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(c) If the annual statement of costs indicates that the
Estimated Costs paid by Tenant pursuant to subsection (b) above for
any year exceeded Tenant's actual Direct Costs for the same year, the
Property Manager shall promptly pay the amount of such excess to
Tenant.
4.4 Resolution of Disagreement. Every statement given by
the Property Manager pursuant to Section 4.2 shall be conclusive and
binding upon Tenant unless within sixty (60) days after the receipt of
such statement Tenant shall notify the Property Manager that it
disputes the correctness thereof, specifying the particular respects
in which the statement is claimed to be incorrect. If such dispute
shall not have been settled by agreement, the parties hereto shall
submit the dispute to arbitration within ninety (90) days after
Tenant's receipt of statement. Pending the determination of such
dispute by agreement or arbitration as aforesaid, Tenant shall, within
thirty (30) days after receipt of such statement, pay in accordance
with the Property Manager's statement, and such payment shall be
without prejudice to Tenant's position. If the dispute shall be
determined in Tenant's favor, the Property Manager shall forthwith pay
Tenant the amount of Tenant's overpayment resulting from compliance
with the Property Manager's statement, including interest on disputed
amounts at prime plus two percent (2%). Landlord agrees to grant
Tenant reasonable access to the Property Manager's books and records
for the purpose of verifying Direct Costs for operating expenses
incurred by the Property Manager.
4.5 Limitations. Nothing contained in this Part IV shall
be construed at any time so as to reduce the monthly installments of
Basic Annual Rent payable hereunder below the amount set forth in
Section 3.1 of this Lease.
V. SECURITY DEPOSIT: NONE
VI. USE
6.1 Use of Leased Premises. The Leased Premises shall be
used and occupied by Tenant for general office purposes only and for
no other purpose whatsoever without the prior written consent of
Landlord.
6.2 Prohibition of Certain Activities or Uses. The
Tenant shall not do or permit anything to be done in or about, or
bring or keep anything in the Leased Premises which is prohibited by
this Lease or will, in any way or to any extent:
(a) Adversely affect any fire, liability or other
insurance policy carried with respect to the Building, the Leased
Premises or any of the contents of the Building (except with
Landlord's express written permission, which will not be unreasonably
withheld, but which may be contingent upon Tenant's agreement to bear
any additional costs, expenses or liability for risk that may be
involved).
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(b) Conflict with or violate any law, statute, ordinance,
rule, regulation or requirement of any governmental unit, agency or
authority (whether existing or enacted as promulgated in the future,
known or unknown, foreseen or unforeseen).
(c) Adversely overload the floors or otherwise damage the
structural soundness of the Leased Premises or Building, or any part
thereof (except with Landlord's express written permission, which will
not be unreasonably withheld, but which may be contingent upon
Tenant's agreement to bear any additional costs, expenses or liability
for risk that may be involved).
6.3 Affirmative Obligations with Respect to Use.
(a) Tenant will comply with all governmental laws,
ordinances, regulations, and requirements, now in force or which
hereafter may be in force, of any lawful governmental body or
authorities having jurisdiction over the Leased Premises, will keep
the Leased Premises and every part thereof in a clean, neat, and
orderly condition, free of objectionable noise, odors, or nuisances,
will in all respects and at all times fully comply with all applicable
health and policy regulations, and will not suffer, permit, or commit
any waste.
(b) At all times during the term hereof, Tenant shall, at
Tenant's sole cost and expense, comply with all statutes, ordinances,
laws, orders, rules, regulations and requirements of all applicable
federal, state, county, municipal and other agencies or authorities,
now in effect or which may hereafter become effective, which shall
impose any duty upon Landlord or Tenant with respect to the use,
occupation or alterations of the Leased Premises (including, without
limitation, all applicable requirements of the Americans with
Disabilities Act of 1990 and all other applicable laws relating to
people with disabilities, and all rules and regulations which may be
promulgated thereunder from time to time and whether relating to
barrier removal, providing auxiliary aids and services or otherwise)
and upon request of Landlord shall deliver evidence thereof to
Landlord.
6.4 Suitability. The Leased Premises, Building and
Improvements (and each and every part thereof) shall be deemed to be
in satisfactory condition unless, within sixty (60) days after the
Commencement Date, Tenant shall give Landlord written notice
specifying, in reasonable detail, the respects in which the Leased
Premises, Building or Improvements are not in satisfactory condition.
Landlord further provides warranties as provided in Exhibit C II
paragraphs C and E.
6.5 Personal Property Taxes. Tenant shall pay all taxes,
assessments, charges, and fees which during the term hereof may be
imposed, assessed or levied by any governmental or public authority
against or upon Tenant's use of the Leased Premises or any personal
property or fixture kept or installed therein by Tenant.
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VII. UTILITIES AND SERVICE
7.1 Obligations of Property Manager. Except for the
specific services and costs described herein, the parties intend that
the Property Manager (as the Landlord's agent) shall provide all
services and pay for all costs associated with the normal operation
and maintenance of the Leased Premises at a level consistent with
services and maintenance provided by the Property Manager with respect
to similar buildings located in Provo, Utah. Therefore, during the
term of this Lease the Property Manager agrees to cause to be
furnished to the Lease Premises during normal operating hours the
general services described in Section 4.1(a) above, the cost and
expense of which shall be included in Direct Costs. For the purposes
of this Lease, normal operating hours for the Leased Premises are from
7:00 a.m. to 6:00 p.m., Monday through Friday. These services include
without limitation the following:
(a) Telephone connection to the building, but not
including telephone stations and equipment (it being expressly
understood and agreed that Tenant shall be responsible for the
ordering and installation of telephone lines and equipment which
pertain to the Leased Premises).
(b) Heating and air-conditioning during normal operating
hours to such extent and to such levels as is reasonably required for
the comfortable use and occupancy of the Leased Premises subject
however to any limitations imposed by any government agency.
(c) Security (including the lighting of common halls,
stairways, entries and restrooms) to such extent as is usual and
customary in similar buildings in Provo, Utah.
(d) Snow removal service.
(e) Landscaping and groundskeeping service.
(f) Elevator service.
(g) Dumpster service.
(h) Parking lot maintenance.
7.2 Tenant's Election. Tenant may at any time after the
first year of the lease term elect to reduce or to terminate
Landlord's and the Property Manager's obligation to provide the
services described in Section 7.1, by giving written notice of such
election to Landlord and to the Property Manager not less than sixty
(60) days before the date upon which such change is to be effective.
From and after the effective date of any election of termination,
Landlord and the Property Manager shall have no further obligation to
provide any service described in the first sentence of this Section
7.1. Further, should Tenant elect to terminate Landlord's and the
Property Manager's obligation, the management fee as described in
Section 4.1(b) shall be reduced to 1% of Basic Annual Rent and shall
be paid to the Property Manager.
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7.3 Tenant's Obligations. Tenant shall arrange for and
shall pay the entire cost and expense of (a) all telephone stations,
equipment and use charges, electric light bulbs (but not fluorescent
bulbs used in fixtures originally installed in the Leased Premises);
(b) janitorial services for the Leased Premises; water, sewer, gas and
electrical power for the Leased Premises; and (c) personal property
taxes (as provided in Section 6.5 above).
7.4 Additional Limitations. If and where heat generating
machines devices are used in the Leased Premises which affect the
temperature otherwise maintained by the air conditioning system,
Landlord reserves the right with Tenant's concurrence to install
additional or supplementary air conditioning units for the Leased
premises, and the entire cost of installing, operating, maintaining
and repairing the same shall be paid by Tenant to Landlord promptly
after demand by Landlord.
7.5 Limitation on Landlord's Liability. Landlord shall
not be liable for and Tenant shall not be entitled to terminate this
Lease or to effectuate any abatement or reduction of rent by reason of
Landlord's or the Property Manager's failure to provide or furnish any
of the foregoing utilities or services if such failure was reasonably
beyond the control of Landlord or the Property Manager. In no event
shall Landlord or the Property Manager be liable for loss or injury to
persons or property, however, arising or occurring in connection with
or attributable to any failure to furnish such utilities or services
even if within their control except in the event of their negligence.
VIII. MAINTENANCE AND REPAIRS; ALTERATIONS; ACCESS
8.1 Maintenance and Repairs by Property Manager. The
Property Manager at its sole cost shall maintain in good order,
condition and repair the structural components of the Leased Premises,
including without limitation roof, exterior walls and foundations, as
well as all repairs covered under construction warranties provided if
the Property Manager is required to make structural repairs by reason
of Tenant's negligent acts or omissions, Tenant shall pay the costs
for making such repairs.
8.2 Maintenance and Repairs by Tenant. Tenant, at
Tenant's sole cost and expense and without prior demand being made,
shall maintain the Leased Premises in good order, condition and
repair, and will be responsible for the painting, carpeting or other
interior design work of the Leased Premises beyond the initial
construction phase as specified in Section 2.3 and Exhibit "C" and "E"
of the Lease and shall maintain all equipment and fixtures installed
by Tenant. If repainting or recarpeting is required and authorized
by Tenant, the cost for such are the sole obligation of Tenant and
shall be paid for by Tenant immediately following the performance of
said work and a presentation of an invoice for payment.
8.3 Alterations. Tenant shall not make or cause to be
made any alterations, additions or improvements or install or cause to
be installed any fixtures, signs, floor coverings, interior or
exterior lighting, plumbing fixtures, or shades or awnings, or make
any other changes to the Leased Premises without first obtaining
Landlord's written approval, which approval shall not be unreasonably
withheld. Tenant shall present to the Landlord plans and
specifications for such work at the time approval is sought. In the
event Landlord consents to the making of any alterations,
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additions, or improvements to the Leased Premises by Tenant, the same
shall be made by Tenant at Tenant's sole cost and expense. All such
work with respect to any alterations, additions, and changes shall be
done in a good and workmanlike manner and diligently prosecuted to
completion such that, except as absolutely necessary during the course
of such work, the Leased Premises shall at all times be a complete
operating unit. Any such alterations, additions, or changes shall be
performed and done strictly in accordance with all laws and ordinances
relating thereto. In performing the work or any such alterations,
additions, or changes, Tenant shall have the same performed in such a
manner as not to obstruct access to any portion of the Building. Any
alterations, additions, or improvements to or of the Leased Premises,
including, but not limited to, wallcovering, paneling, and built-in
cabinet work, but excepting movable furniture and equipment, shall at
once become a part of the realty and shall be surrendered with the
Premises, unless Landlord and Tenant agree at any time that the
specific improvement may be removed by Tenant at the end of the Term
provided Tenant restores the premises to its original condition, wear
and tear excepted.
8.4 Landlord's Access to Leased Premises. Landlord shall
have the right to place, maintain, and repair all utility equipment of
any kind in, upon, and under the Leased Premises as may be necessary
for the servicing of the Leased Premises and other portion of the
Building. Landlord shall upon providing adequate notice to Tenant,
also have the right to enter the Leased Premises at all times to
inspect or to exhibit the same to prospective purchasers, mortgagees,
tenants, and lessees, and to make such repairs, additions,
alterations, or improvements as Landlord may deem desirable. Landlord
shall be allowed to take all material upon said Leased Premises that
may be required therefor without the same constituting an actual or
constructive eviction of Tenant in whole or in part and the rents
reserved herein shall in no wise xxxxx while said work is in progress
by reason of loss or interruption of Tenant's business or otherwise,
and Tenant shall have no claim for damages unless due to Landlord
negligence. During the three (3) months prior to expiration of this
Lease or of any renewal term, Landlord may place upon the Leased
Premises "For Lease" or "For Sale" signs which Tenant shall permit to
remain thereon.
IX. ASSIGNMENT
9.1 Assignment Prohibited. Tenant shall not transfer,
assign, mortgage, or hypothecate this Lease, in whole or in part, or
permit the use of the Leased Premises by any person or persons other
than Tenant, or sublet the Leased Premises, or any part thereof,
without the prior written consent of Landlord in each instance, which
consent shall not be unreasonably withheld, provided sufficient
information is provided to Landlord to accurately represent the
financial condition of those to whom this Lease will be transferred,
assigned, mortgaged, or hypothecated. Such prohibition against
assigning or subletting shall include any assignment or subletting by
operation of law. Any transfer of this Lease from the Tenant by
merger, consolidation, transfer of assets, or liquidation shall
constitute an assignment for purposes of this Lease. In the event
that Tenant hereunder is a corporation, an unincorporated association,
or a partnership, the transfer, assignment, or hypothecation of any
stock or interest in such corporation, association, or partnership in
the aggregate in excess of forty-nine percent (49%) in any one-year
period shall be deemed an assignment within the meaning of this
Section. The above prohibition of assignment will not apply in the
case of a
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registered offering of shares by Tenant or the public trading of
registered shares subsequent to an initial offering.
9.2 Consent Required.
(a) Any assignment or subletting without Landlord's
consent shall be void, and shall constitute a default hereunder which,
at the option of Landlord, shall result in the termination of this
Lease or exercise of Landlord's other remedies hereunder. Consent to
any assignment or subletting shall not operate as a waiver of the
necessity for consent to any subsequent assignment or subletting, and
the terms of such consent shall be binding upon any person holding by,
under, or through Tenant.
(b) Landlord shall have no obligation to consent to the
proposed sublease or assignment if the proposed sublessee or assignee
or its business is or may be subject to compliance with additional
requirements of the law, including any related rules or regulations,
commonly known as the "Americans with Disabilities Act of l990" or
similar state or local laws relating to persons with disabilities
beyond those requirements which are applicable to the tenant desiring
to so sublease or assign".
9.3 Landlord's Right in Event of Assignment. If this
Lease is assigned or if the Leased Premises or any portion thereof are
sublet or occupied by any person other than the Tenant, Landlord may
collect rent and other charges from such assignee or other party, and
apply the amount collected to the rent and other charges reserved
hereunder, but such collection shall not constitute consent or waiver
of the necessity of consent to such assignment, subleasing, or other
transfer, nor shall such collection constitute the recognition of such
assignee, sublessee, or other party as the Tenant hereunder or a
release of Tenant from the further performance of all of the covenants
and obligations, including obligation to pay rent, of Tenant herein
contained. In the event that Landlord shall consent to a sublease or
assignment hereunder, Tenant shall pay to Landlord reasonable fees,
not to exceed $100.00, incurred in connection with processing of
documents necessary to the giving of such consent. In the event
Landlord consents to the assignment as provided by paragraph 9.1, then
Tenant shall be released from further performance of any covenant and
obligation under this Lease.
X. INDEMNITY
10.1 Indemnification. Tenant and Landlord shall indemnify
each other and save each other harmless from and against any and all
suits, actions, damage and claims, liability and expense in connection
with loss of life, bodily or personal injury, or property damage
arising from or out of any occurrence in, upon, at or from the Leased
Premises, or occasioned wholly or in part by any act or omission of
Tenant or Landlord, their agents, contractors, employees, servants,
invitees, licensees or concessionaires. For the purposes of this
Lease, the Property Manager is an agent of the Landlord. All
insurance policies carried by Tenant and/or Landlord shall include a
waiver of subrogation endorsement which specifies that the insurance
carrier(s) will waive any right of subrogation against Tenant and/or
Landlord arising out of any insurance claim.
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10.2 Release of Landlord. Landlord shall not be
responsible or liable at any time for any loss or damage to Tenant's
personal property or to Tenant's business. Tenant shall store its
property in and shall use and enjoy the Leased Premises and all other
portions of the Building and Improvements at its own risk, and hereby
releases Landlord, to the full extent permitted by law, from all
claims of every kind resulting in loss of life, personal or bodily
injury, or property damage to or arising in connection with Tenant's
ownership of its personal property or the operation of Tenant's
business.
10.3 Notice. Tenant shall give prompt notice to Landlord
in case of fire or accidents in the Leased Premises or in the Building
of which the Leased Premises are a part or of defects therein or in
any fixtures or equipment.
10.4 Litigation. If any party to this Lease, without
fault on its part, shall be made a party to any litigation that names
either of the other two parties to this lease, those other parties
shall protect and hold harmless the party without fault and shall pay
all costs, expenses, and reasonable attorneys' fees, provided that the
party to be protected must first notify the other parties promptly in
writing of any such claim and further provided that the party or
parties to be charged shall be entitled to direct the defense or
settlement of such claim. No party to this Lease shall be responsible
for any settlement of compromise of any such claim without its prior
written consent.
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