LEASE AGREEMENT
EXHIBIT
10.3
This
Lease made and entered into this ___ Day of SEPTEMBER,
2006 by
and between ALDER CONSTRUCTION COMPANY, hereinafter referred to as Lessor,
and
CLEAR
ONE INC
hereinafter referred to as Lessee.
WITNESSETH:
Whereas
Lessor desires to let and the Lessee desired to take and occupy those certain
premises in Salt Lake County; State of Utah known as:
0000
X Xxxxxxxxxx Xxx Xxxxx#0
XXX
XX 00000
Consisting
of:
15,635
Sq. Ft. of Warehouse plus 1,420 Sq. Ft. of Office w/mezzanine
above.
Lessor
grants to Lessee an option to extend the lease for 2 years at
$7,500.00/month.
Lessor
agrees to warrant that all functions of the facility (i.e. power, light
fixtures, HVAC system, unit heaters, etc.) are in proper working condition
for
one (1) year.
Lessor
will sweep clean the warehouse and clean the office windows inside and
outside.
Rent
commences on December 1, 2006. September thru November Rent will be free to
offset move in costs.
Security
Deposit of $7,000.00 is due upon signing of lease agreement and is never to
be
considered as last months rent.
TERMS:
The
parties hereby covenant and agree that this lease will become effective:
September
15, 2006 and continue for a period of 37 months through October 15, 2009. Tenant
may cancel this lease after 18 months if Lessor receives a prior 6 months
written notice. Lessor will keep the security deposit if this clause is
exercised.
RENTAL:
Lessee
shall pay to Lessor, or its order, in Salt Lake City, Utah $7,000.00*
per
month, in Advance for each month. Payments received after the fifteenth day
of
the month shall include a 5% late charge. *Year
2 is $7150.00/month & year 3 is $7300.00/month
1
USE
OF PREMISES:
It
is
understood and agreed that the premises herein let shall be used by the Lessee
for the operation and conduct of warehouse and office use and any other lawful
related respective interests are concerned, that business shall be conducted
in
accordance with all laws, rules, regulations, requirements and ordinances
enacted or imposed by any governmental unit having jurisdiction over Tenant
or
Tenants’ business and only for the Permitted Use. Tenant shall not use or occupy
the Lease premises nor permit the use or occupancy for any unlawful use or
purpose.
a) During
the term of this Lease including all renewals or extensions thereto, both
Landlord and Tenant agree to comply with all federal, state and local statutes,
regulations, executive orders and ordinances concerned with the emission, spill,
release, discharge or disposal of any hazardous or solid waste treatment,
storage or disposal system servicing the Lease Premises (collectively
Environmental Law”) respectively applicable to each.
b) Landlord
represents and warrants to Tenant that (1) it has not received any notice of
any
alleged violation of the Leased Premises of any Environmental Laws; and (2)
to
the best of Landlords’ knowledge, information and belief with respect to the
Leased Premises and the Building, there are no violation of any Environmental
Laws, Landlord and Tenant shall promptly notify the other of any discussions
between it or its agents, employees or attorneys and any federal, state or
local
officials concerning any alleged violation at the Leased Premises or the
Building of any Environmental Laws.
c) In
event
either Landlord or Tenant fails to comply with any Environmental Laws applicable
to it, or with any order or judgment issued against it for failure to comply
with such right, but not the obligation, to enter the Leased Premises and take
such actions as deemed reasonably necessary to comply with any statute,
regulation, executive order, ordinance, order or judgment or protect the Leased
Premises; provided, however, neither Landlord nor Tenant shall have the right
to
take any actions specified in this Section while the alleged violator is
involved in good faith negotiations with any federal, state or local officials
concerning any environmental obligation it may have at the Lease
Premise.
d) Nothing
in this Section shall be used to prevent Tenant from storing on or about, and
transporting from the Lease Premises any Hazardous Substance utilized by Tenant
in the conduct of its normal business activity. As used in this Section,
“hazardous substance” shall be defined as any Environmental Response,
Compensation and Liability Act, as amended, 42 W.S.C. Section 9601,et. Seq.;
the
Resource Conservation and Recovery Act, as amended 42U.S.C. Section 9601,et.
Seq.; The Federal Water Pollution Control Act, as amended 33 U.S.C. Section
1251, et. Seq.; The Federal Air Pollution Prevention and Control Act (the “Clean
Air Act”), as amended 42 U.S.C. Section 7410 et. Seq.; any rules or regulations
promulgated thereunder; or any other applicable federal, state or local statute,
regulation or commercial product which through its use becomes a hazardous
substance.
e) Landlord
and Tenant each agree to indemnify and hold harmless the other from and against
any all liabilities, damages, judgments, causes of action, claims and expenses
which may be incurred by Landlord or Tenant, as the case may be, relating to
or
arising out of any breach of the covenants set forth in the subsections (a)
through (e) hereof.
2
UTILITIES:
Lessor
shall
not
(shall,
shall not) pay for Electric Power and Natural Gas Service. Lessor shall
(shall,
shall not) pay for Building Water and Sewer Charges.
TAXES:
Lessor
shall
(shall,
shall not) be responsible for and pay all real property taxes presently levied
upon said building. Lessee shall be responsible for any increases in property
taxes assessed after 2006
Pro-Rated Basis.
Lessee
shall be responsible for taxes levied upon the business and for any taxes levied
upon personal property in or upon said premises belonging to
Lessee.
MAINTENANCE:
Lessee
shall promptly make all repairs necessary to maintain the premises and building
in as good order and repair as when delivered to it. Allowing for reasonable
use; provided that exterior and structural repairs and repairs to the roof,
and
skylights, repairs to asphalt parking and drives, repairs to all mechanical,
electrical, and plumbing distribution components of the building, damage by
fire, the elements, casualty or other cause or happening not due to the
negligence of the Lessee shall be made by the Lessor. Lessee is responsible
for
and agrees to pay for any damage caused by the acts of its agents, customers,
or
employees.
Lessee (Lessor,
Lessee) shall be responsible for janitorial and cleaning services, interior
maintenance, and waste removal. Lessee agrees to promptly replace all broken
window glass in the premises with like grade and quality, and shall remove
snow
and ice from the sidewalk in front of the premises. Lessor shall
(shall,
shall not) clear snow from parking lot area. Lessee or its agents will remove
litter from parking lot and landscaped area. Routine maintenance and repair
of
heating and air conditioning, including bi-annual service checks and normal
change of furnace filters, shall be the responsibility and be done at the cost
of the Lessee
(Lessor,
Lessee). Lessee shall maintain a preventive maintenance contract to service
the
HVAC system including all evaporative cooling units, if any, on a bi-annual
basis. Lessor will pay and assume all costs of major repairs in excess of Five
Hundred Dollars ($500.00) per repair, and costs of replacement for HVAC
equipment only.
Lessee
agrees to leave the premises in “as delivered” condition upon vacating the
facility at the conclusion of the lease; normal wear and tear excepted.
“Reasonable use” does not included nail holes in walls, or damage to sheetrock
walls or doors. Lessee agrees to clean the premises upon vacating and remove
all
accumulated dirt and debris from the Leased premises and site, and remove and
or
repair any racking fasteners and damage caused to the warehouse floor and
walls.
Lessor
does not agree to repair damage caused by Lessee in excess of its reasonable
use
of the premises.
3
ALTERATIONS
AND IMPROVEMENTS:
No
alterations, changes in, or improvements shall be made to the premises by Lessee
without the prior consent of the Lessor thereto, which consent shall not be
unreasonably withheld, conditioned or delayed.
The
Lessor shall be responsible for improvements to the building or premises to
comply with future building codes or legislation imposed against said facility.
Lessee shall be responsible for their specific use of the facility and for
accommodations required for their specific use of the facility and
accommodations required for their customers or employees.
KEY:
Any
changes of keys for their suite must be made only after notice and approval
of
Lessor. Changes made without Lessor approval will be re-keyed at Lessees
expense. Lessee agrees to provide Lessor with two (2) copies of key for any
lock
re-keyed.
INSURANCE:
Lessor
will carry fire insurance on the building, including insurance for glass damage
caused by fire at Lessors’ expense. Lessee is required to carry fire insurance
on contents and also third party liability insurance to protect and save
harmless Lessor from any and all liability arising from conduct of Lessees’
business. Lessor is not responsible for fire rules, regulations and requirements
of the Board of Fire Underwriters.
The
Lessor and Lessee hereby waive any rights each may have against the other on
account of any loss or damage covered by fire and extended coverage insurance
and the Lessor and Lessee each, on behalf of their insurance companies, waive
any right of subrogation that they may have against the Lessor or the Lessee.
Lessee shall be responsible for any increase in the Lessors insurance cost
incurred after 2006 and for the total cost of any additional insurance requested
by the Lessee.
Increase
in risk. The Tenant shall not do or permit to be done any act or thing as a
result of which (1) Any policy of insurance of any kind covering either any
or
all of the Property or covering the Landlord may become void or suspended,
or
(2) the insurance risk under any such policy would (in the opinion of the
insurer thereunder) be made greater. The Tenant shall pay as Additional Rent
the
amount of any increase in any premium for such insurance resulting from any
breach of such covenant, within fifteen (15) days after the Landlord notifies
the Tenant in writing of such increase.
The
Tenant shall maintain at its expense, throughout the term, insurance against
loss or liability in connection with bodily injury, death, property damage
or
destruction, occurring within the premises or arising out of the use thereof
by
the Tenant or its agents, employees, officers, subtenants, invitees, visitors
and guests, under one or more policies of Commercial General Liability insurance
having a combined single limit of not less than One Million Dollars ($1,000,000)
per occurrence; Two Million Dollars ($2,000,000) aggregate, (which limit if
such
policy is carried on a “blanket” basis, shall be written on a per location
basis).
4
Each
such
policy shall (a) name as additional insured with respect to this Lease only
thereunder the Landlord and the Landlords’ directors, officers, agents, and
employees (b) by its terms, be considered primary and non-contributory with
respect to any other insurance carried by the Landlord or its successors and
assigns, (c) by its terms, be cancelable only on at least thirty (30) days
prior
written notice to the Landlord (and, at the Landlords request, any such Senior
Holder), and (d) be issued by an insurer of recognized responsibility licensed
to issue such policy in the state which the property is located.
The
Tenant, at its sole cost and expense, shall also maintain throughout the Term
a
policy insuring against damage to or destruction of the Tenant’s leasehold
improvements, furniture, fixtures, equipment and other personal property
installed in or otherwise located on the premises.
At
least
five (5) days before the Commencement Date, the Tenant shall deliver to the
Landlord an original or a signed duplicate copy of each policy of insurance
required to be maintained by the Tenant hereunder (certificate evidencing such
insurance), and at least ten (10) days before any such policy expires, the
Tenant shall deliver to the Landlord an original or a signed duplicate copy
of a
replacement policy therefore (or a certificate evidencing such replacement).
Pursuant to the above, if a certificate only is presented, the Landlord retains
the right to request and obtain copy of such policy.
Insurance
to be maintained by Landlord. The Landlord shall maintain throughout the term,
All-Risk or Fire and Extended Coverage Insurance upon the building in such
amounts and with such insurers as the Landlord may elect in its reasonable
judgment.
Waiver
of
subrogation. If either party hereto is entitled to be paid any proceeds under
any policy or insurance naming such party as an insured, on account of any
loss
or damage, (or would be so entitled if such party had maintained the insurance
coverage it agrees to maintain under this Lease, whether or not so maintained)
then such party hereby releases the other party hereto, to and only to the
extent of the amount of such proceeds, from any and all liability for such
loss
or damage, notwithstanding that such loss, damage or liability may arise out
of
the negligent or intentionally tortuous act or omission of the other party,
its
agents or employees/
Liability
of parties. Except if and to the extent that such party is released from
liability to the other party hereto pursuant to the provisions of the previous
paragraph.
The
Landlord (a) shall be responsible for, and shall defend, indemnify and hold
harmless the Tenant against and from any and all liability or claim of liability
arising out of, any injury to or death of any person or damage to any property,
occurring anywhere upon the property, if, and only if and to the extent that
such injury to or death of any person or damage is caused solely by the grossly
negligent or intentionally tortuous act or omission of the Landlord or its
agents, officers or employees, but (b) shall not be responsible for or be
obligated to defend, indemnify or hold harmless the Tenant against or from
any
liability for any such injury, death or damage occurring anywhere upon the
property (including the Premises), (1) by reason of the Tenants occupancy or
use
of the Premises or any other portion of the property, or (2) because of fire,
windstorm, act of God or other cause unless caused by such grossly negligent
or
intentionally tortuous act or omission of the Landlord; and excluding those
situations in which the Landlord is obligated to indemnify and hold harmless
the
Tenant under the provisions previously stated in this paragraph, the Tenant
shall be responsible for, and shall defend, indemnify and hold
5
harmless
the Landlord against and from any and all liability, or claim of liability
arising out of (a) the use or occupancy of, or the conduct, operation or
management of the Tenants business in, the Premises during the Term, or (b)
any
breach or default by the Tenant in performing any of its obligations under
the
provisions of this Lease or applicable law, or (c) any negligent, intentionally
tortuous or other act of omission of the Tenant or any of its agents,
contractors, servants, employees, subtenants, licensees or invitees during
the
Term, or (d) any injury to or death of any person or damage to any property
occurring on the Premises during the Term.
ABATEMENT
OF RENT:
If
said
building, or any portion thereof, shall be damaged or destroyed by fire,
rendering said leased portion reasonably unfit for use by Lessee, or if same
is
damaged to such extent by other elements or acts of God so that same cannot
be
repaired within ninety (90) days from the date of damage or destruction, then
either party may cancel this agreement by giving written notice of cancellation,
said cancellation to be effective from date of such damage or destruction.
In
the event any such damage or destruction can be repaired or replaced within
the
ninety-day period, Lessor shall promptly proceed to repair or replace same.
Lessee’s rental and other herein specified charges to be paid to Lessor should
permanently be abated during the period of replacement or repair. However,
in
the event Lessee deems a part of its premises to be reasonably usable for the
conduct of its business, such abatement shall be proportional to the usable
portion of the premises. It is understood that if any of said repair or
replacement can be made within a ninety (90) day period and Lessor shall fail
to
commence said repair or replacement by thirty (30) days after such damage or
destruction, the Lessee may commence and finish such replacement or repair
and
pay for same and apply such reasonable sum so paid as advance rental hereunder.
DEFAULT
AND ABANDONMENT:
In
the
event of failure of payment of monthly rental herein reserved within the time
specified, or failure to keep or perform any other covenants or agreements,
after 15 days written notice to Lessee from Lessor, Lessor may re-inter and
proceed with such legal remedies as it may desire, given it under the terms
of
this agreement Lessor may at its option make every reasonable effort to re-let
the same for the best rent obtainable. If the total amount received by Lessor
from such re-letting, after deducting the expenses of re-letting and necessary
repairs does not equal or exceed the unpaid balance of the rent herein provided
for, Lessee shall pay as damages all such deficiency, or Lessor may at its
option, declare this agreement void and terminated. Lessor reserves and is
accorded same rights in the event of abandonment by Lessee.
It
is
agreed however, that prior to the exercise by Lessor of any of its rights or
remedies given for breach of this agreement, except failure to pay rental sums
when due or within the provided grace period, the Lessor will, in writing,
specify the breach complained of and accord to Lessee fifteen (15) days from
date of notice to cure or rectified this agreement shall not be deemed in
default.
6
OPTION
TO RENEW:
Lessor
hereby grants unto Lessee the first right and option to renew this agreement
at
the end of the term herein specified, subject to renegotiating of rent. Lessee
shall notify Lessor in writing of its intention to renew or not to renew; said
notice to be mailed ninety (90) days prior to expiration date, and a renewal
lease shall be negotiated to become effective upon the expiration of this
lease.
HOLDING
OVER:
Unless
Lessor and Lessee otherwise agree in writing, any holdover by Lessee after
the
expiration of this lease, or any written extension, shall constitute a tenancy
from month to month. The lease rate during the hold over period will be at
the
then current rate, as determined by Lessor with sufficient information from
commercial real estate agency, and in accordance with the terms and conditions
of this lease.
SUB-LEASE:
Lessee
shall not sub-lease or transfer any interest under this lease, or sub-let the
premises or any part thereof, without prior written consent of Lessor, which
consent will not be reasonably withheld.
ENFORCEMENT:
The
acceptance by Lessor of partial payments of rent due shall not, under any
circumstance, constitute a waiver of any rights of Lessor at law under this
lease, nor affect any notice or legal proceedings, theretofore given or
commenced.
INDEMNITY:
Landlord
agrees to indemnify and hold tenant, its successors and assigns, harmless from
any claim, obligation, liability, loss, damage, or expense including attorneys
fees of whatever kind of nature, contingent or otherwise, known or unknown,
incurred or imposed based upon any provision of federal, state or local law
or
regulations, or common law or pertaining to health, safety or environmental
protection and arising out of the environmental condition of the premises
existing as of the commencement of the Lease.
Tenant
agrees to indemnify and hold Landlord, its successors and assigns, harmless
from
any claim, obligation, liability, loss, damage or expense, including attorneys
fees of whatever kind or nature, contingent or otherwise, known or unknown,
incurred or imposed based upon safety or environmental protection and arising
out of environmental condition of the Premises arising subsequent to the
commencement of this Lease and as the operation of Tenant on the lease Premises.
The phrase “environmental condition” includes the surface or groundwater,
drinking water supply, land, surface or sub-surface strata and the ambient
air.
PROPERTY
OF LEASE: TITLE
At
all
times during the term of this lease, Lessee shall retain title to all property
stored or located in or on the Leased Premises.
7
ENTIRE
AGREEMENT MODIFICATION AND SEVERABILITY:
This
lease contains the entire agreement between the parties and shall not be
modified in any manner except by an instrument in writing executed by the
parties if any provision of this lease shall be declared invalid or
unenforceable, the remainder of the lease shall continue in full force and
effect.
SUCCESSORS
IN INTEREST:
The
covenants, terms, conditions, provisions and undertakings in this lease or
any
renewals thereof shall extend to and be binding upon the heirs, executors,
administrators, successors, and assigns of the respective parties hereto, as
if
they were in every case named and expressed, and should be construed as
covenants running with the land; wherever reference is made to either of the
parties hereto, it shall be held to include and apply also to the heirs,
executors, administrators, successors and assigns of such part, as if in each
and every case so expressed.
NOTICE:
The
addresses given below shall be the addresses designated to receive any notice
required under this lease. Any notice delivered to this address via U.S. Mail
or
a commercial delivery service or by facsimile shall be considered delivered
under the terms of this lease. These addresses can be changed by written
notification.
|
Lessor:
|
Alder
Construction Company
|
Lessee:
|
ClearOne
Communications, Inc.
|
|
0000
Xxxxx 000 Xxxx
|
0000
Xxxxx Xxxx Xxx, Xxxxx 000
|
||
|
Xxxx
Xxxx Xxxx, XX 00000
|
Xxxx
Xxxx Xxxx, XX 00000
|
||
|
Fax
(000) 000-0000
|
Fax
(000) 000-0000
|
ADDENDUM:
The
following Addendums are incorporated into this lease: NONE
|
ACCEPTED
FOR LESSEE
|
CLEAR
ONE INC.
By:
Marthes Solamuthu
Title:
Vice President of Operations
|
|
ACCEPTED
FOR LESSOR
|
ALDER
CONSTRUCTION COMPANY
By:
Xxxx Xxxxx
Title:
Property Management
|
8
