Exhibit 10.5
VALLEY AMERICAN INVESTMENT
VALLEY BUSINESS CENTER AT
XXXXXX LAKE
WEST VALLEY CITY, UTAH
This Lease is made and entered into this 26 day of February, 1996, by and
between VALLEY AMERICAN INVESTMENT COMPANY of X.X. Xxx 000, Xxxxxxx, Xxxx
00000, as Landlord and XXXXXXX COMMUNICATIONS CORPORATION of 0000 X. Xxxxxxxx
Xxx, Xxxx Xxxxxx Xxxx, Xxxx 00000, as Tenant.
WHEREAS, this Lease is made and entered into with regard to certain real
property located in Xxxx Xxxxxx Xxxx, Xxxxxx xx Xxxx Xxxx, Xxxxx of Utah, more
particularly described on the attached site plan labeled as Exhibit "A" and
Exhibit "F" which is incorporated herein by reference (Hereinafter referred to
as the Real Property).
WHEREAS, there is attached hereto and marked Exhibit "A" a site plan for
the Real Property. The site plan discloses the location of and the certain
specifications for the building and other improvements which are presently
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existing and which are to be constructed by Landlord pursuant to the terms of
this Lease. Said site plan is incorporated herein by reference.
WHEREAS, Landlord is desirous of leasing said building and improvements to
Tenant and Tenant is desirous of leasing the same from Landlord upon the terms
and conditions hereafter set forth.
THEREFORE, in consideration of the foregoing promises and each and all of
the mutual and reciprocal covenants, terms, provisions, conditions and
agreements hereinafter set forth, Landlord does hereby lease, let and demise
unto Tenant and Tenant does hereby accept, take and hire from Landlord, upon
the terms and conditions set forth herein the Real Property, together with the
improvements to be constructed thereon by Landlord as described on the
attached Exhibit "A".
1. BUILDING
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1.1 Building:
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Landlord hereby agrees that, subject to the terms and conditions
hereinafter provided, it will cause to be constructed upon the Real Property a
65,902 square foot building addition from which Tenant will lease a total of
40,250 square feet of space consisting of 23,202 square feet of office space
and 17,048 square feet of warehouse space and other improvements as described
on the site plan, specifications and a floor plan attached hereto as Exhibit
"B" which were prepared by Xxxxx Xxxxxxx of A.S.W.N. and bear the date
February 1, 1996.
1.2 Architect:
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Upon the parties execution of this Lease, Landlord shall direct Allred,
Soffe, Xxxxxxxxx and Xxxxxxx to prepare construction drawings and
specifications for the improvements. The construction drawings and
specifications shall be submitted to the Lessee for approval prior to their
submission to West Valley City. Lessee agrees that it will promptly, but not
later than fourteen (14) days from receipt, make any necessary or appropriate
corrections to the construction drawings and specifications and make the same
available to the Landlord for its approval. The plans and specifications for
the improvements to be constructed are subject to the approval of both the
Landlord and the Tenant. The construction drawings and specifications in
final form and as approved by the parties shall be incorporated herein and
attached hereto as Exhibit "C" as though they were fully set forth at length
herein and shall constitute the plans and specifications in accordance with
which Landlord shall construct the improvements.
1.3 Costs:
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The total cost of construction, subject to the limitations described in
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Section 1.5 and 1.7, of the improvements, including, but not limited to,
architectural, engineering and supervision fees, including all plans,
specifications, etc., all permits of whatever nature, cost of construction,
cost of clearing the premises, cost of preparing the site for construction,
materials, supervision, contractor's fees, or profit, labor, sub-contracting
prices, all fees such as sewer hook-up, bonded sewer charges, landscape costs,
performance and xxxx xxxxx, construction interest, insurance and financing
charges and any and all other charges incurred in the course of and during
construction and all other necessary or incidental expenses connected with the
development of the improvements, shall be borne by the Landlord. It shall be
the duty of the Landlord to file any and all applications and obtain any
consents or authorizations as may be required of Landlords, owners, builders
by any governmental agency or authority upon a fun and fair disclosure of the
facts to it; the liability of the Tenant shall not accrue until the Landlord
has fully complied with all terms and conditions of such consents and
authorizations.
1.4 Occupancy:
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Occupancy by the Tenant shall be deemed to be that of a Tenant under all
of the terms, covenants and conditions of this Lease and Tenant's liability
for rent, taxes, insurance and common area maintenance obligations shall
commence and become payable on the date Tenant takes possession of the
premises. As used herein, the phrase "the day Tenant takes possession" shall
mean the day that Landlord has provided the Tenant with written notice that
the improvements have been substantially completed in accordance with the
plans and specifications, which notice shall have attached a certificate of
occupancy or a photocopy thereof issued by the proper governmental authority
or project architect. Should the occupancy date occur on any day other than
the first day of the month, rent, taxes, insurance and maintenance charges for
the month shall be prorated and the initial ten (10) year term of this Lease
shall commence on the first day of the month following the occupancy date.
1.4(a) It is the intent of both Landlord and Tenant to have the new space
ready for occupancy within seven (7) months after receipt of building permit.
If the Leased Premises are not substantially completed (as hereinafter
defined) within ten (10) months after receipt of building permit, then
Landlord agrees to reimburse Tenant all reasonable costs of securing, moving
to and from, and renting temporary alternative facilities. If the Leased
Premises are not substantially completed (as hereinafter defined) within
sixteen (16) months after receipt of building permit, then Tenant shall have
the option to terminate this Lease as well as the lease dated January 15,
1988. Provided the cause of the delay was not due to the actions or
negligence of Tenant, or through acts of "Force Majeure" as described in
Article 36. Tenant's right to terminate said Leases for failure of Landlord
to "Substantially Complete" the leased premises within said time period will
be Tenant's sole remedy. Promptly after the Lease Commencement Date is
ascertained, Landlord and Tenant shall execute an amendment affirming the
Lease Commencement Date and the Lease Expiration Date.
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1.5 Change Orders:
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Tenant, without invalidating this Lease, may order changes in the work as
contemplated by the construction drawings and specifications attached hereto
as Exhibit "C", provided that any such changes shall be subject to the
approval of the Landlord which approval shall not be unreasonably withheld,
and that any additional cost to Landlord from a change in the work shall be
paid for by Tenant to Landlord in cash or in equal monthly installments over
the first ten years of the initial Lease term which shall be payable at the
same times and in the same manner as the monthly installments of rent. The
amount of the monthly installments shall be determined by amortizing the
additional costs over a period of one hundred twenty (120) months utilizing an
interest rate equal to eleven percent (11%) per annum. All such changes in
the work shall be authorized by a written change order signed by Landlord and
Tenant. The cost to Tenant for a change in the work shall be determined by
mutual agreement between Landlord and Tenant in writing, before the Landlord
shall be responsible for executing such change.
1.6 Existing Lease:
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Tenant's current lease expires on August 30, 1998. Landlord and Tenant
mutually agree to terminate the existing lease and amendments by and between
Dell X. Xxxxxxx as Landlord (which was assumed by Valley American Investment
as Landlord) and Tenant dated January 15, 1988. Landlord and Tenant will have
no further obligations to each other at the termination of the existing lease
with the exception of real property taxes and real property tax refunds which
will be pro rated and charged or credited to the new Lease. The termination
date of the existing lease will be the commencement date of the new lease as
described above in Section 1.4.
1.7 Tenant Improvement Allowance:
-----------------------------
Tenant shall receive a Tenant Improvement Allowance equal to $19.00 per
rentable square feet of newly constructed interior office space, plus a
remodel allowance of thirty thousand ($30,000) dollars. (For example, if
Tenant lease 5,000 square feet of office space then the Tenant Improvement
Allowance win be 5,000 square feet @ $19.00 per square foot which is equal to
$95,000 plus the $30,000 remodel allowance for a total allowance of $125,000).
The Tenant Improvement Allowance shall be used for all necessary interior
office improvements desired by Tenant, including but not limited to painting,
plumbing, electrical, heating, ventilating and cooling, drywall, carpet,
architectural and space planning fees, wiring, cabling, security system,
consulting engineers, etc. Any expenses over and above the allowance or any
additional improvement desired by Tenant shall be paid for by the Tenant. Any
actual expense under and below the amount allowed for Tenant Improvements
shall be used at Tenant's discretion.
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1.8 Substantial Completion:
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The term "Substantially Completed" shall mean the completion of
Landlord's Work in accordance with Exhibits A, B and C, except for minor
details of construction, mechanical adjustments or decorations or other punch
list items which do not adversely affect Tenant's use or occupancy of the
Leased Premises. Landlord agrees to complete such punch fist items within
thirty (30) days of Landlord's receipt of such punch list items from Tenant.
The Leased Premises shall not be deemed Substantially Completed if certain
portions of the Building or Project are not completed, and said lack of
completion interferes with the efficient conduct of Tenant's business in the
Leased Premises.
2. TERM
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2. Term:
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The term of this Lease shall be for a period of ten (10) years to
commence as provided for in Section 1.4 herein. It is understood and agreed
that the date for the commencement of the Lease term may be modified as herein
provided. However, the term of this Lease shall at all times be for a period
of ten (10) years from and after the date of commencement of said term.
2.1 Termination Option:
-------------------
Tenant shall have a one time option to terminate this Lease at the end of
the 84th month of the original ten (10) year Lease term. Said option to
terminate must be exercised by Tenant on or before the end of the 78th month
of the original ten (10) year Lease term by providing Landlord with written
notice of its intention to so terminate.
2.2 Termination Penalty:
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Should Tenant exercise its right to terminate the Lease as described in
Section 2.1 above, then Tenant shall pay Landlord a termination fee equal to
six (6) months of rental payments plus a applicable common area expenses,
property taxes and insurance. In addition to the termination penalty, Tenant
agrees to pay Landlord the unamortized portion of Tenant's Improvement
Allowance as defined in Section 1.7 above. The straight line amortization
shall be based on ten years at 12% with a tenant improvement allowance of
$300,750.00. The Lease termination shall not become effective until Landlord
receives the termination penalties described above and Landlord and Tenant
mutually execute a Lease termination document. Landlord agrees to waive all
such penalties in the event that Tenant secures a new tenant financially
acceptable to Landlord, with no additional out of pocket expenses to Landlord.
Should any out of pocket expenses to Landlord be nonetheless necessary to
secure the next tenant, Tenant shall reimburse Landlord up to the amount of
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the Termination penalty.
2.3 Options:
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Providing that Tenant is not in default under the terms of this Lease,
Tenant shall have the option to extend the Lease term for two additional
periods of five (5) years each beyond the original ten (10) year Lease term.
The first option must be exercised by Tenant no later than the end of the 14th
month of the original ten (10) year Lease term by providing Landlord with
written notice of its election. During the first option period Tenant shall
give Landlord written notice of Tenant's desire to exercise their second
option no later than the 54th month of the option period. During the option
periods, all terms, conditions and provisions of this Lease shall remain in
full force and effect with all time periods extended accordingly with the
exception of Section three (3) and six (6) dealing with the amount of rent,
periodic rent adjustments and the availability of incentive monies payable by
the West Valley City Redevelopment Agency. The amount of rent due Landlord
during the option period shall be:
Monthly Rent: Annual Rent:
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Option #1: $30,282.00 $363,382.00
Option #2: $32,704.00 $392,453.00
3. RENT
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3. Minimum Base Rent:
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Tenant shall pay Landlord an annual base rent of $247,312 in equal monthly
installments of $20,609.00 each due on the first day of each month during the
term hereof, said rent being payable without notice or demand. The minimum
base rent for the first twenty four (24) months of the original ten (10) year
Lease term shall be based upon the following rent schedule:
Existing Space: 20,000 s.f. @ $6.00 per s.f. per year, triple net
New Office Space: 14,250 s.f. @ $7.25 per s.f. per year, triple net
New Warehouse Space: 6,000 s.f. @ $4.00 per s.f. per year, triple net
3.1 Adjustment to Minimum Base Rent:
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The annual minimum base rent of ($247,312) provided for herein shall be
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paid as follows during the initial ten (10) year term hereof.
Monthly Rent: Annual Rent:
------------ ------------
Months 1 - 24 $20,609.00 $247,312.00
Months 25 - 48 $22,258.00 $267,097.00
Months 49 - 72 $24,039.00 $288,465.00
Months 73 - 96 $25,962.00 $311,542.00
Months 97 - 120 $28,039.00 $336,465.00
3.1.a If any installment of rent, additional rent or any other sum due
from Tenant shall not be received by Landlord within fifteen (15) days after
said amount is due, then Tenant shall also pay to Landlord a late charge equal
to five (5%) per cent of any such overdue amount.
3.2 Security Deposit:
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Tenant has paid a security deposit on behalf of Landlord in the amount of
$8,236.00 which shall be held by Landlord as security for the faithful
performance by Tenant of all terms, covenants and conditions of the Lease to
be kept and performed by Tenant during the term hereof. If Tenant defaults
with respect to any provision of this Lease, including, but not limited to the
provisions relating to the payment of rent, Landlord may (but shall not be
required to) use, apply or retain all or any part of this security deposit for
the payment of any rent or any other sum in default, or for the payment of any
amount which Landlord may spend or become obligated to spend by reason of
Tenant's default, or to compensate Landlord for any other loss or damage which
Landlord suffers by reason of Tenant's default. If any portion of said
deposit is so used or applied Tenant shall, within five (5) days after written
demand therefore, deposit cash with Landlord in an amount sufficient to
restore the security deposit to its original amount and Tenant's failure to do
so shall be a default under this Lease. Landlord shall not be required to
keep this security deposit separate from its general funds, and Tenant shall
not be entitled to interest on such deposit. If Tenant shall fully and
faithfully perform every provision of this Lease to be performed by it, the
security deposit or any balance thereof shall be returned to Tenant (or at
Landlord's option, to the last assignee of Tenant's interest hereunder) within
ten (10) days following expiration of Lease term. In the event of termination
of Landlord's interest in this Lease, Landlord shall transfer said deposit to
Landlord's successor in interest.
4. COMMON AREA MAINTENANCE EXPENSE
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4. It is the intent of both parties that the minimum rentals herein
specified shall be absolutely net to Landlord throughout the term of this
Lease, and that Tenant shall pay its proportionate share of all costs,
expenses, and obligations of every kind relating to the maintenance,
management and general up-keep of the Common Areas and the exterior premises
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(more fully described below) which may arise or become due during the term
hereof. Landlord shall be indemnified by Tenant against such proportionate
costs, expenses, and obligations. In furtherance thereof, Tenant shall pay as
additional rent, without demand therefore and without set off or deduction, it
proportionate share of expenses and charges as set forth in Section 4.1 below.
4.1 Tenant shall pay to Landlord its Proportionate Share of the
Project's operating cost. The "Project's Operating Cost" means the total cost
and expense incurred in operating and maintaining the common areas,
hereinafter defined, actually used or available for use by Tenant and the
employees, agents, servants, customers, and other invitees of Tenant excluding
only items of expense commonly known and designated as carrying charges, but
specifically including without limitation, utility expenses for lighting and
or watering the landscaping, personal property taxes and assessments on the
common area improvements and equipment, premiums on fire and extended
insurance coverage, vandalism, insurance and plate-glass insurance for the
common areas; maintenance, repair and cleaning of common area pavement and
mechanical equipment repair, maintenance, and cleaning of the common area
structure including floors, ceiling, roof, sky lights, gardening and
landscaping repairs, traffic and parking line painting, fighting, sanitary
control, removal of snow, common area trash, rubbish, garbage, and other
refuse, depreciation on machinery and equipment used in such maintenance, the
cost of personnel to implement such services, to direct parking, and to police
the common areas, and ten percent (10%) of all the foregoing costs to cover
administrative and overhead costs.
As part of the Common Area Expenses described in Section 4.1 above,
Landlord agrees to keep all buildings and improvements and equipment on, in or
appurtenant to the property including all alterations and additions insured
against loss or damage by fire and all extended coverage casualties in such
companies as the Landlord may select, for the full, fair insurable value
thereof The policies for such insurance shall be made and taken in the name of
the Landlord as an additional insured party with loss thereunder payable to
the Landlord and/or Mortgagee. Such policy or policies shall be deemed to be
and remain in the possession of the Landlord or Mortgagee.
4.2 Tenant's Proportionate Share:
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Tenant's Proportionate Share of the Project's operating cost, based on
Tenant's proportionate square footage of rentable space within the project,
shall be computed on the basis of a period of twelve consecutive calendar
months as designated by Landlord and estimated payments toward the same shall
be made by Tenant in twelve equal installments in advance on the first day of
each calendar month in an amount to be established by the Landlord. Within
sixty (60) days after the end of each twelve (12) month period, Landlord shall
furnish to Tenant a C.P.A. prepared statement showing the Project's operating
cost for the preceding period and any adjustments to be made as a result
thereof. In the case of a deficiency, Tenant shall promptly remit the amount
of such deficiency to Landlord. In the case of a surplus, Landlord shall apply
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said surplus to payments next falling due from Tenant under this Section 4.2.
4.3 Annual Common Area Maintenance (C.A.M.) Budget:
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The annual C.A.M. budget for the leased premises is $22,942.50. Tenant
agrees to pay to Landlord monthly installments of $1,911.88 towards the C.A.M.
budget. Tenant further agrees to pay any C.A.M. shortages as described in
Section 4.2 above.
"Common Areas" means all areas, space, equipment, and special services
provided for the common or joint use and benefit of the tenants or occupants
of the Project, or portions thereof, their employees, agents, servants,
customers, and other invitees, including without limitation, parking areas,
access roads, driveways, retaining walls, landscaped areas, truck service bays
or tunnels, loading docks, pedestrian malls, courts, stairs, ramps and
sidewalks, comfort and first-aid stations, washrooms and parcel pick-up
stations.
5. USE
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5. Use:
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The premises shall be used only for the purposes of light manufacturing,
assembly, warehousing, receiving, storing, shipping and selling products,
materials and merchandise made and/or distributed by Tenant and for such other
lawful purposes as may be incidental thereto. Tenant shall, at its own cost
and expense, obtain any and all license and permits necessary for such use.
Notwithstanding the foregoing, the premises shall not be used for any purpose
which would violate local zoning restrictions or declarations or covenants
affecting the premises.
5.1 Restrictive Covenants:
----------------------
Landlord will prepare restrictive covenants for filing against the real
property prior to commencement of construction. Prior to recording, the
restrictive covenants will be submitted to the Tenant for its review and
approval which shall not be unreasonably withheld. Tenant agrees that the
real property, the improvements and its interest in this Lease shall be
subject to the restrictive covenants upon their recordation and further agrees
to execute whatever documents are reasonably necessary to effectuate the
subordination of this Lease to the restrictive covenants.
6. TAXES
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6. Taxes:
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Tenant agrees to pay, as additional rent and before they become
delinquent, all real and personal taxes (both general and special), water and
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sewage rents, assessments or governmental charges (hereinafter collectively
referred to as "taxes") lawfully levied or assessed against the premises or
any part thereof, provided, however, Tenant may, at its sole cost and expense,
dispute and contest the same, and in such case, such disputed items need not
be paid until finally adjudged to be valid so long as the validity or the
amount thereof is contested by Tenant in good faith and in accordance with
Utah State law. At the conclusion of such contest, Tenant shall pay the items
contested to the extent that they are held valid, together with all liens,
court costs, interest and penalties relating thereto. Proration of said
payments by Tenant shall be made when necessary for the first and last years
of the lease term or any extensions thereof This covenant shall survive the
expiration of this Lease, for a period not greater than one year.
6.1 Tax Notices:
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Landlord shall provide Tenant copies of the "property valuation and tax
notice" covering the premises each year as they are issued by the Salt Lake
County Treasurer and of any other tax notices immediately upon their receipt
by Landlord. Tenant shall notify Landlord of any proposed contest by Tenant
of the valuation, amount of the tax or legality thereof prior to the deadline
for filing the necessary protest, appeal or petition. Any such contest by
Tenant must be timely made and may be made in the name of Landlord or Tenant,
or both, but if the name of the Landlord is used therein, Landlord shall be
notified thereof at least five (5) days prior to the commencement of the
proceeding. If requested by Tenant, Landlord shall actively participate in
any such contest, but Tenant shall be entitled to any refund of any tax,
penalty, or interest thereon which may have been paid by Tenant or by
Landlord, and reimbursed by Tenant to Landlord. Landlord is to be notified in
advance in writing of the intention of Tenant to make such contest.
6.2 Personal Property Tax:
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Tenant shall be liable for all taxes levied against Tenant's personal
property and trade fixtures on or about the premises, including, but without
prejudice to the generality of the foregoing, shelves, counters, vaults, vault
doors, partitions, fixtures, machinery, plant equipment, and if any such taxes
on Tenant's property or trade fixtures are levied against Landlord, and if
Landlord pays the same, Tenant, upon demand, shall repay to Landlord the taxes
so levied against Landlord.
6.3 Other Taxes:
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Nothing herein contained shall be construed as requiring Tenant to pay any
franchise, excise, corporate, estate, inheritance, successorship, capitol levy
or transfer tax of Landlord growing out of, or connected with, this Lease, or
Landlord's right in the building, or any income, excess profits, or revenue
tax upon the income of the Landlord. Provided, however, that in any case where
a tax (other than an income tax) may be levied, assessed or imposed upon
Landlord for the privilege of renting or leasing the demised premises or which
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is based upon the rental revenue derived therefrom, Tenant shall pay to
Landlord as additional rent hereunder the amount of said tax, but in no event
shall the Tenant be obligated to pay an amount greater than that which would
be payable if the demised premises were the only asset of the Landlord.
6.4 The Redevelopment Agency of West Valley City has agreed to make
certain incentives available to the Landlord and Tenant in order to induce the
Landlord to construct the improvements within the West Valley City
redevelopment area and to induce the Tenant to locate its business within said
improvements. The inducements will likely be in the form of rebates on
personal and real property taxes assessed against the premises and the
personal property of Tenant as set forth in the letter of the Redevelopment
Agency dated January 14, 1988 which is attached hereto as Exhibit "D" and
which is by reference incorporated herein (hereinafter referred to as the
"Letter").
6.4.a As between Landlord and Tenant it is understood and agreed that
the total amount of the incentives provided by the Redevelopment Agency shall
be the property of Tenant and shall be assigned to Tenant as long as Tenant is
in possession of the premises under the terms of this Lease and is not in
default of any of the terms, conditions or agreements contained herein. Both
parties agree to use their best efforts to pursue the Redevelopment Agency of
West Valley City for the incentives. This Lease and the obligations of
Landlord and Tenant hereunder shall in no way be subject to or conditioned
upon the performance of the Redevelopment Agency in delivering the inducements
agreed upon in the Agreement for Disposition of Land nor upon the amount of
the inducements actually delivered by the Redevelopment Agency.
7. MAINTENANCE AND REPAIR
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7. Tenant's Responsibilities:
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Any and all improvements which may be erected or placed on the Real
Property at any time during the term of this Lease shall be kept and
maintained in good order and repair and replaced where necessary by Tenant at
its sole cost and expense. The Tenant's maintenance obligation shall include,
but not be limited to, HVAC systems, interior plumbing and interior electrical
systems, windows, glass, doors, interior walls, finish work, floors, floor
coverings, fixtures and appliances. Tenant shall also comply at its sole cost
and expense with all laws, ordinances, orders, regulations, rules and
requirements of every kind and nature whether they relate to ordinary or
extra-ordinary, structural or nonstructural additions, changes, repairs or
alterations to the premises made necessary by Tenant's use. Notwithstanding
the items described above, Landlord will maintain the common areas of the
property as described in Section 4 and will xxxx Tenant for its proportionate
share.
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7.1 Landlord's Responsibilities:
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Notwithstanding the provisions of the immediately preceding paragraph,
Landlord shall be responsible for the maintenance of the building's structural
integrity and structural components including brickwork, exterior sewage
systems and drains, exterior plumbing and exterior electrical at its sole cost
and expense. In addition, Landlord shall be responsible for replacement of
the roof, asphalt parking surfaces, concrete pavements and driveways in the
event that repairs and maintenance can no longer reasonably maintain their
integrity and their utility. However, "Tenant's Proportionate Share" of those
items of routine maintenance required by the roof, the exterior walls, the
asphalt parking surfaces and the driveways (i.e. re-striping, sealing,
patching, snow removal, sweeping) shall continue to be the responsibility of
the Tenant as described in Section 4. 1.
7.2 Rights to Enter:
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Upon prior notice the Landlord and its agents shall have the right to
enter into and upon the Real Property or any part thereof at all reasonable
hours for the purpose of examining the same or making such repairs or
alterations therein as may be necessary for the safety and preservation
thereof. In case of the neglect or default of the Tenant in making the same,
the Landlord may do so after written notice to the Tenant (except that no
notice shall be required in case of emergencies) during said term or after its
expiration and all the costs and expenses incurred thereon, together with
interest shall be repaid by the Tenant to the Landlord according to the
provisions of Section 19.
7.3 Warranties:
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Landlord shall assign a new construction warranties to Tenant upon
Tenant's occupancy of the premises. Said assignment shall include the general
contractor's one year guarantee and the roof warranty and/or guaranty.
7.4 Preventative Maintenance:
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Tenant shall enter into a regularly scheduled preventative
maintenance/service contract with a maintenance contractor for servicing all
heating and air conditioning systems and equipment within the premises. The
service contract must include a services suggested by the equipment
manufacturers within the operation/maintenance manual and must become
effective within thirty (30) days of the date Tenant takes possession of the
premises. All guarantees/warranties provided with the heating and air
conditioning systems will be recognized by Landlord within this program.
8. NET LEASE; NO ABATEMENT
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8. This Lease is intended, and is hereby declared, to be a "net" lease,
it being the intention of the parties hereto that the Landlord shall have and
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enjoy the rent herein reserved to it without deduction therefrom. Nothing
herein contained shall be construed so as to require the Tenant to pay or be
liable for any gift, inheritance, estate, franchise, income, profit, capital,
or similar tax, or any other tax in lieu of any of the foregoing, imposed upon
the Landlord, or the successor or assigns of the Landlord, unless such tax
shall be imposed or levied upon or with respect to rents payable to the
Landlord hereunder in lieu of real estate taxes upon the premises.
8.1 No abatement, diminution, or reduction of the fixed rental or
other charges payable by the Tenant under this Lease shall be claimed by or
allowed to the Tenant for any inconvenience, interruption, cessation, or loss
of business, or otherwise caused directly or indirectly by any present or
future laws, rules, requirements, orders, directions, ordinances, or
regulations of the United States of American or of the State, County, or City
government or any other municipal, government, or lawful authority whatsoever
or by priorities, rationing, or curtailment of labor or materials or by war or
any matter or things resulting therefrom or by any other cause or causes;
except if otherwise specifically provided in this Lease. It is understood
that the Landlord is not entitled to retain rent by the Tenant and also to
retain the proceeds of any rent insurance that it might receive where both
cover the same periods of time.
9. UTILITIES
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9. Not including its proportionate share of the Project's operating costs
as described in Section 4.1, Tenant shall also pay for its own water, gas,
heat, light, power, telephone and other utilities and services supplied to the
property together with taxes thereon. Throughout the term of this Lease, the
Tenant shall, at its own cost and expense hire and provide for its own trash
removal. The arrangements made shall comply with local ordinances for refuse
pick-up as to frequency and time, and shall not, to the best of Tenant's
knowledge, result in any violation of environmental standards.
10. INDEMNIFICATION
---------------
10. Landlord shall not be liable to Tenant or Tenant's employees, agents,
patrons or visitors, or to any other person whomsoever, for any injury to
person or damage to property on or about the premises, caused by the
negligence or affirmative acts of Tenant, its agents, servants or employees,
or of any other persons entering upon the premises under express or implied
invitation of Tenant, or caused by the building and improvements becoming out
of repair; or caused by leakage of gas, oil, water or steam or by electricity
emanating from the building, or due to any cause whatsoever, and Tenant agrees
to indemnify Landlord and hold it harmless from any loss, expense or claims,
including attorney's fees arising out of such damage or injury; except that
any injury to person or damage to property caused by the negligence or
affirmative acts including required repairs of Landlord shall be the liability
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of Landlord and not of Tenant, and Landlord agrees to indemnify Tenant and
hold it harmless from any and all loss, expense or claims, including
attorney's fees, arising out of such damage or injury.
10.1 Landlord's Indemnification of Hazardous Waste:
---------------------------------------------
Landlord, as of the date of this Lease, agrees to hold Tenant harmless for
any current or present environmentally hazardous materials (EHM). Landlord
further represents that as of the date of this Lease, there are no known EHM.
However if during the term of this lease or any time after the expiration of
this Lease, if Landlord determines that Tenant has violated the hazardous
waste covenants described in Section 10.2, then Landlord has the right to have
Tenant remedy any damage caused by Tenant's negligence.
10.2 Hazardous Waste:
---------------
In addition to the provisions of Section 10 Landlord and Tenant agree not
to cause or permit any hazardous material to be brought upon, kept or used in
or about the Project including the Leased Premises. As used herein, the term
"hazardous material" is defined as any hazardous or toxic substance, material
or waste which now is or becomes regulated or restricted by any governmental
authority, the State of Utah, or the United States Government. The term
hazardous material includes, without limitation, any petroleum products or by
products, asbestos, (in any form), chemicals, gases or any other material or
substance which upon exposure or ingestion may reasonably be anticipated to
cause a hazard to the health or safety of the anticipated occupation of, or
visitor to the premises or adjacent property. In the event Tenant, in the
normal course of the operation of its business at the premises, as stated
herein, is required to use certain substances which may be considered
hazardous material, Tenant may in such event and notwithstanding the foregoing
provision, use such substances in its business operations. Provided, however,
Tenant shall be solely responsible for the proper use and disposal of such in
compliance with all applicable laws and regulations and Tenant hereby agrees
to indemnify, defend and hold harmless Landlord and the premises with respect
to the use and disposal of such substances (both during and after the term of
the Lease).
11. INSURANCE
---------
11. During the term of this Lease, Tenant, at its sole cost and expense,
and as additional rent shall provide:
a. Public Liability Insurance:
---------------------------
Provide and keep in force in such form as the Landlord shall direct,
public liability insurance policies protecting the Landlord and Tenant against
all insurable risks in the amounts of not less than One Million
($1,000,000.00) Dollars in respect to any one accident or disaster and in the
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amount of not less than Five Hundred Thousand ($500,000.00) Dollars, in
respect to injuries to any one person.
b. Premiums to be Paid by Lessee:
------------------------------
All premiums and charges for all of said policies shall be paid by the
Tenant and if the Tenant shall fail to make any such payment when due, or
carry any such policy, the Landlord may, but shall not be obligated to, make
such payment or carry such policy, and the amount paid by the Landlord, with
interest thereon, shall be repaid to the Landlord by the Tenant on demand, and
all such amounts so repayable together with such interest, shall be considered
as additional rent payable hereunder, for the collection of which the Landlord
shall have all of the remedies in Section 26 herein or by law provided for the
collection of rent. Payment by the Landlord of any such premium or carrying
by the Landlord of any such policy shall not be deemed to waive or release the
default of the Tenant with respect thereto.
c. Renewal of Insurance:
---------------------
Thirty (30) days prior to the expiration of such policy, the Tenant she
deliver a binder renewing such policy which binder shall provide that at least
thirty (30) days written notice of any change in or cancellation thereof shall
be given by the insurance company to the Landlord and Mortgagee. The Tenant
shall promptly pay the premiums for renewal and deliver to the Landlord upon
request, a copy of the original policy, and if requested, a photo copy of a
canceled check evidencing payment thereof.
d. Compliance with Insurance Company Requirements:
-----------------------------------------------
The Tenant shall not violate or permit to be violated any of the
conditions or provisions of any such policy, and the Tenant shall so perform
and satisfy the requirements of the companies writing such policies that at
all times companies of good standing satisfactory to the Landlord within
reason shall be willing to write and/or continue such insurance.
e. Collection of Insurance Monies:
------------------------------
The Tenant and the Landlord shall cooperate with each other in connection
with any insurance monies that may be due in the event of loss and the Tenant
shall execute and deliver to the Landlord such proofs of loss and other
instruments which may be required for the purpose of obtaining the recovery of
any such insurance monies.
f. Liability Policies - Coverage:
------------------------------
Liability policies specified in subsection "a." of this Section shall
cover that portion of the building and premises occupied by Tenant as well as
the sidewalks in front of or adjacent thereto. A liability policy or policies
covering the Landlord and the Tenant as their interest may appear, but
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otherwise in the form hereinbefore provided, shall be deemed a compliance with
this covenant.
g. Waiver of Subrogation:
---------------------
Tenant shall at all times during the term hereof and at its cost and
expense, maintain in effect policies of insurance covering its trade fixtures,
merchandise and other personal property from, in, on, or upon the premises, in
an amount equal to their full replacement value, providing protection against
any peril included within the classification "Fire and Extended Coverage".
Landlord shall not be liable to Tenant for any damage to any such property
from any cause, unless (1) such damage is due to Landlord's negligence or
wilful misconduct, and (2) such damage is caused by an occurrence which is not
an insurable hazard under the standard fire and broad form coverage insurance
which is required to be maintained by Tenant under the terms of this Section;
it being understood that it is not the intention of the parties that Landlord
be relieved from liability to Tenant for negligence contrary to any stature of
public policy of the State of Utah, but rather that Tenant avail itself of
available insurance coverage without subjecting Landlord to liability for
losses that are insurable by policies required under the terms of this
Section, and without subjecting Landlord to subrogation claims of any insurer.
12. ALTERATIONS
-----------
12. Tenant shall have the right, within the premises, at its own cost and
expense and in a good and workmanlike manner, to make alterations, additions
or improvements or erect, remove or alter partitions, or erect shelves, bins,
machinery and trade fixtures as it may deem advisable and to xxxx, paint,
drill into any surface, bore, cut, string wires, lay floor coverings and
install locks or bolts, provided (1) such acts do not adversely affect the
structure of the building, (2) Tenant restores the premises to their prior
condition (reasonable wear and tear excepted), (3) Tenant complies with all
applicable laws and governmental rules and regulations and (4) Tenant obtains
prior written approval of Landlord to any proposed alterations or additions
which approval shall not be unreasonably withheld.
12.1 Notwithstanding anything to the contrary in this Lease (1) Tenant
is not required to remove any fixtures or other items installed by Landlord on
Tenant's behalf, and (2) Tenant shall have the right, unless in default under
the provisions of the Lease to remove any fixtures or other items installed by
Tenant (including any flat wire cable and carpet tile), provided Tenant
restores the premises to their condition prior to such installation,
reasonable wear and tear excepted.
13. INSPECTION
----------
13. Landlord shall have the right to enter and inspect the premises at
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any time, on reasonable notice to Tenant, during normal business hours.
During the period that is six (6) months prior to the end of the term hereof,
Landlord and Landlord's agents and representatives shall have the right to
enter the premises at any time during reasonable business hours on reasonable
notice to Tenant and at reasonable intervals for the purpose of showing the
premises to prospective purchasers or Tenants and shall have the right to
erect on the premises a suitable sign indicating the premises are available.
14. ASSIGNMENT AND SUBLETTING
-------------------------
14. Tenant shall not have the right to assign this Lease or to sublet the
whole or any part of the premises without the prior written consent of
Landlord which consent shall not be unreasonably withheld. Notwithstanding
the aforesaid, Tenant may assign this Lease or sublet the whole or any part of
the premises to any of its affiliates or subsidiaries (as defined in the
Internal Revenue Code of 1954, as amended) during the term hereof or any
extension hereof without the consent of the Landlord, provided Tenant notifies
Landlord of such assignment or subletting. Notwithstanding any permitted
assignment or subletting, Tenant shall at all times remain fully responsible
and liable for the payment of the rent and additional rent specified herein
and for compliance with all of its other obligations under the terms,
provisions and covenants of the Lease unless otherwise agreed to in writing.
Upon the occurrence of an "event of default" as hereinafter defined, if the
premises or any part hereof are then assigned or sublet, Landlord, in addition
to any other remedies herein provided, or provided by law, may, at its option,
collect directly from such assignee or subtenant all rents becoming due to
Tenant under such assignment or sublease and apply such rent against any sums
due to it by Tenant hereunder, and no such collection shall be construed to
constitute a novation or a release of Tenant from the further performance of
its obligations hereunder.
15. FIRE AND CASUALTY DAMAGE
------------------------
15. If the premises should be destroyed or damaged by fire, tornado or
other casualty, Tenant shall give immediate written notice thereof to
Landlord.
15.1 If the premises should be totally destroyed by fire, tornado or
other casualty, or if they should be so damaged that rebuilding or repairs
cannot be completed within one hundred eighty (180) days after the date upon
which Landlord is notified by Tenant of such damage, this Lease shall
terminate and the rent shall be abated during the unexpired portion of this
Lease, effective upon the date of the occurrence of such damage. The
determination as to whether or not the premises can be reconstructed within
one hundred eighty (180) days of the date of the notice of the casualty to
Landlord shall be made by an architect selected by Landlord who shall certify
to the parties within fifteen (15) days of the casualty whether or not the
Page 88
premises can be repaired within one hundred eighty (180) days of the date of
notice of such casualty to Landlord.
15.2 If the premises should be damaged by fire, tornado or other
casualty, but only to such extent that rebuilding or repairs can be completed
within one hundred eighty (180) days after the date upon which Landlord is
notified by Tenant of such damage, this Lease shall not terminate, but
Landlord shall, at its sole cost and expense, proceed with reasonable
diligence to rebuild and repair the building and improvements to substantially
the same condition in which they existed prior to such damage, except that
Landlord shall not be required to rebuild, repair or replace any part of the
partitions, fixtures and other improvement which may have been placed in the
building by Tenant. During the reconstruction period, there shall be an
abatement of rent and additional rent due Landlord. Additional time for
completion of said repairs shall be added equal to any delays in the repairs
caused by acts of God, inclement weather, strikes, boycotts or any other
causes beyond the control of Landlord and not due to any act or omission on
its part. In the event that Landlord should fail to complete such repairs and
rebuilding within one hundred eighty (180) days after the date upon which
Landlord is notified by Tenant of such damage (plus any additional time due to
delays caused by acts of God, etc.) Tenant may, at its option, terminate this
Lease by giving Landlord no less than thirty (30) days written notice of
termination.
16. CONDEMNATION
------------
16. If the whole or any substantial part of the budding or the land
should be taken for any public or quasi-public use under governmental law,
ordinance or regulation, or by right of eminent domain, or by private purchase
in lieu thereof, this Lease shall terminate and the rent shall be abated
during the unexpired portion of this Lease, calculated as of the date when the
Tenant must surrender possession of the premises. Tenant waives all rights to
exercise any and all options to extend the lease term and specifically agrees
to make no claims against condemnation or purchase proceeds payable to
Landlord
16.1 If less than a substantial part of the building or the land shall
be taken for any public or quasi-public use under any governmental law,
ordinance or regulation, or by right of eminent domain, or by private purchase
in lieu thereof, this Lease shall not terminate, but the rent payable
hereunder during the unexpired portion of the Lease shall be reduced to such
extent as may be fair and reasonable under all of the circumstances.
16.2 In the event of any such taking or private purchase in lieu
thereof, Tenant shall be entitled to recover only with respect to its trade
fixtures, personal property and moving expenses. Tenant waives all rights to
exercise any and all options to extend the lease term and specifically agrees
to make no claim against condemnation or purchase proceeds payable to
Landlord.
Page 89
16.3 Tenant shall have the right to make a separate claim to the
condemning authority for any and all damages Tenant incurred as a result of
such taking.
17. HOLDING OVER
------------
17. Should Tenant, or any of its successors in interest, hold over the
premises or any part thereof, after the expiration of the term of the Lease,
unless otherwise agreed in writing, such holding over shall constitute and be
construed as tenancy from month to month only, at a rental rate equal to the
last month's rent of the term for the first thirty (30) days of holdover,
thereafter the holdover rent shall be 150% of the rental payable for the last
month of the term of this Lease. The inclusion of the preceding sentence
shall not be construed as Landlord's permission for Tenant to hold over.
18. QUIET ENJOYMENT
---------------
18. Landlord covenants that it now has, or will acquire before Tenant
takes possession of the premises, good title to the land. Landlord represents
and warrants that it has full right and authority to enter into this Lease and
that Tenant, upon paying the rental herein set forth and performing its other
covenants and agreements herein set forth, shall reasonably and quietly have,
hold and enjoy the premises for the term hereof without hindrance or
molestation.
19. PERFORMANCE OF OBLIGATIONS BY TENANT AND LANDLORD
-------------------------------------------------
19. In any case where either party shall pay or be compelled to pay any
sum of money or do any act which shall require the expenditure or payment of
any sum by reason of the failure of the other party to perform any one or more
of the terms, covenants, conditions or agreements herein contained, the
failing party shall immediately repay the same to the other party upon demand,
provided the failing party is notified in writing prior to making such
payment, and in default thereof then the sums so paid, together with all
interest, reasonable costs and damages, shall or may be added or deducted as
additional or decreased rent on the next installment of rent becoming due on
the next rent day, or on any subsequent rent day fixed by this Lease, and
shall for all purposes whatsoever be deemed to be rent due and payable or
deductible on such rent day, or on any subsequent rent day, and shall be
payable or deductible as such, but it is expressly covenanted and agreed
hereby that payment by the Landlord of any such sums of money or the doing of
any such acts shall not be deemed to waive or release the default in the
payment or doing thereof by Tenant of the right of the Landlord to recover
possession, at Landlord's election, of the premises by reason of Tenant's
default with respect to any such payment or act, in accordance with Section
Page 90
26.
20. LANDLORD'S LIEN
---------------
20. In the event of a default under this Lease, Landlord shall have, in
addition to any other remedies herein or by law, all rights and remedies
available under applicable Utah law. Any statutory lien for rent is not hereby
waived.
21. MORTGAGES
---------
21. If the land is subject to any mortgage prior to the commencement
date, then Landlord shall procure a non-disturbance agreement from the
Mortgagee in standard form which provides that so long as Tenant is not in
default hereunder, its possession shall not be disturbed by mortgagee and the
mortgagee shall not name Tenant as a defendant in a foreclosure suit. Tenant
shall at any time after the commencement date execute an instrument required
by any mortgagee for the purpose of subordinating this Lease to the lien of a
mortgage in consideration for a non-disturbance agreement from the mortgagee
in standard form which provides that so long as Tenant is not in default
hereunder, its possession will not be disturbed by the mortgagee and the
mortgagee will not name Tenant as a defendant in a foreclosure suit. For the
purposes of this paragraph the word mortgage and/or mortgagee shall include
any other equivalent designations including, but not limited to, Deed of
Trust, Trustee, etc. Upon request, Tenant will execute an estoppel
certificate and subordination agreement in a form suitable to Landlord's
lender.
22. MECHANIC'S LIENS
----------------
22. Landlord shall have no authority, express or implied, to create or
place any lien or encumbrance of any kind or nature whatsoever upon, or in any
manner to bind, the interest of Landlord in the premises or to charge the
rental payable hereunder for any claim in favor of any person dealing with
Tenant, including those who may furnish materials or perform labor for any
construction or repairs, and each such claim shall affect and each such Hen
shall attach, if at all, only to the leasehold interest granted to Tenant by
this instrument. Tenant covenants and agrees that it will pay or cause to be
paid all sums legally due and payable by it on account of any labor performed
or materials furnished in connection with any work performed on the premises,
on which any lien is or can be validly and legally asserted against its
leasehold interest in the premises or the improvements thereon and that it
will save and hold Landlord harmless from any and all loss, cost or expense
based on or arising out of asserted claims or liens against the leasehold
estate or against the rights, titles and interest of the Landlord in the
premises or under the terms of this Lease based upon Tenant's failure to pay
Page 91
such sums. If Tenant disputes an amount charged by such a lienor but admits
that it authorized the work to be done, Tenant may dispute the claim provided
that it posts the requisite bond necessary to remove the lien.
23. NOTICES
-------
23. Each provision of this instrument or of any applicable governmental
law, ordinance, regulation and other requirements with reference to the
sending, mailing or delivery of any notice or the making of any payment by
Landlord to Tenant or with reference to the sending, mailing or delivery of
any notice or the making of any payments by Tenant to Landlord shall be deemed
to be complied with when and if the following steps are taken:
a. All rent and other payments required to be made by Tenant to Landlord
hereunder shall be payable to Landlord at the address hereinbelow set forth or
at such other address as Landlord may specify from time to time by written
notice delivered in accordance herewith.
b. Any notice or document required or permitted to be delivered hereunder
shall be deemed to be delivered whether actually received or not when
deposited in the United States Mail, postage prepaid, Certified or Registered
Mail, Return Receipt Requested, addressed to the parties hereto at the
respective addresses set out opposite their names below, or at such other
address as they have theretofore specified by written notice delivered in
accordance herewith:
Landlord: Valley American Investment Company
Attn: Xxxxxxx X. Xxxxxxxx
X.X. Xxx 000 Xxxxxxx, XX 00000
Tenant: Xxxxxxx Communications Corporation
Attn: Xxxxxxx X. Xxxxxxx
0000 Xxxxxxxx Xxx
Xxxx Xxxxxx Xxxx, XX 00000
With Copies To: Xx. Xxxx Xxxxxxxx, Esq.
Parsons, Behle, & Xxxxxxx
000 Xxxxx Xxxx Xxxxxx # 0000
Xxxx Xxxx Xxxx, XX 00000
23.1 If and when included within the term "Landlord", as used in this
instrument, there are more than one person, firm or corporation, all shall
jointly arrange among themselves for their joint execution of such a notice
specifying some individual at some specific address for the receipt of notices
and payments to Landlord. All parties included within the term "Landlord"
shall be bound by notices given in accordance with the provisions of this
paragraph to the same effect as if each had received such notice.
Page 92
24. SURRENDER OF PREMISES
---------------------
24. The Tenant shall, on or before the last day of the lease term hereof
or upon the sooner termination of such term, peaceably and quietly leave,
surrender and yield up unto the Landlord the land and the improvements in good
order, condition and state of repair, reasonable wear and tear excepted,
together with all alterations, additions and improvements, including air
conditioning equipment, machinery and ducts which may have been made upon the
premises, except movable furniture, movable personal property or movable trade
fixtures at the expense of the Tenant. All property removable pursuant to the
provisions of this Section shall be removed by the Tenant on or before the
date hereinabove in this Section indicated and all property not so removed
shall be deemed abandoned by the Tenant to the Landlord. Where any personal
property is removed, any damage to the premises will be repaired by the
Tenant.
24.1 All buildings, additions, improvements, equipment and
appurtenances on or in the premises at the date hereof and which may be
erected on or in the premises during the term hereof including all
alterations, changes, additions, and improvement at any time placed upon the
premises by the Tenant, as well as all fixtures and articles of personal
property attached to or used in connection with the premises, are and shall be
deemed to be and become part of the realty and the sole and absolute property
of the Landlord at the end or other termination of this Lease and shall be
surrendered to the Landlord; provided, however, that movable furniture,
movable personal property and movable trade fixtures put in at the expense of
the Tenant or any subtenant, which pursuant to the provisions of this Section
may be removed by the Tenant, shall not be deemed to be attached to the
leasehold nor the property of, nor surrendered to, the Landlord.
25. EVENTS OF DEFAULT
-----------------
25. The following events shall be deemed to be events of default by
Tenant under this Lease:
a. Tenant shall fail to pay any installment of rent or additional rent
when due.
b. Tenant shall become insolvent, or shall make a transfer in fraud of
creditors, or shall make an assignment for the benefit of creditors.
c. Tenant shall file a petition under any section or chapter of the
Federal Bankruptcy Code, as amended, or under any similar law or statute of
the United States or any State thereof, or Tenant shall be adjudged bankrupt
or insolvent in proceedings filed against Tenant thereunder.
d. A receiver or trustee shall be appointed for all or substantially all
Page 93
of the assets of Tenant.
e. Tenant shall desert or vacate the premises; provided, however,
desertion or vacation of the premises shall not be deemed to be an event of
default if Tenant is not in arrears in the payment of rent and Landlord can
obtain fire and liability insurance covering the premises.
f. Tenant shall fail to comply with any term, provision or covenant of
this Lease, and shall not cure such failure within thirty (30) days after
written notice thereof to Tenant or in the case of non-payment of rent or
additional rent, 15 days after written notice to Tenant.
25.1 With respect to curing any default listed in this Section or
elsewhere herein, it is understood that if a cure cannot be completed with the
time period for cure referred to herein, despite best efforts of the Tenant,
using all possible speed, then it will be deemed sufficient if Tenant has
begun to cure within said time period; provided, however, that Tenant shall
continue to use its best efforts and all possible speed to cure such default
and does, in fact, effect a cure within a reasonable period of time.
26. REMEDIES
--------
26. Upon the occurrence of any such events of default described in
Section 25 hereof and following the written notice to Tenant to cure said
events of default, Landlord shall have the option to pursue any one or more of
the following remedies without any notice or demand whatsoever:
a. Terminate this Lease, in which event Tenant shall immediately
surrender the premises to Landlord, and if Tenant fails so to do, Landlord
may, without prejudice to any other remedy which it may have for possession or
arrearages in rent, enter upon and take possession of the premises and expel
or remove Tenant and any other person who may be occupying such premises or
any part thereof, and Tenant agrees to pay to Landlord on demand the amount of
all loss and damage which Landlord may suffer by reason of such termination,
whether through inability to relet the premises on satisfactory terms or
otherwise.
b. Enter upon and take possession of the premises and expel or remove
Tenant and any other who may be occupying such premises or any part thereof,
and relet the premises and receive the rents therefor; and Tenant agrees to
pay to Landlord on demand any deficiency and reasonable expenses that may
arise by reason of such reletting.
c. Enter upon the premises and do whatever Tenant is obligated to do
under the terms of this Lease, and Tenant agrees to reimburse Landlord on
demand for any reasonable expenses which Landlord may incur in effecting
compliance with Tenant's obligations under the Lease, and Tenant further
agrees that Landlord shall not be liable for any damages resulting to the
Page 94
Tenant from such action, unless caused by the gross negligence of Landlord.
d. In case suit shall be brought for recovery of possession of the
premises, for the recovery of rent or any other amount due under the
provisions of this Lease, or because of the breach of any other covenant
herein contained on the part of Tenant to be kept or performed, and a breach
shall be established, Tenant shall pay to the Landlord all other reasonable
expenses incurred therefor, including attorney fees and costs of Court.
Pursuit of any of the foregoing remedies shall not preclude pursuit of any of
the other remedies herein provided or any other remedies provided by law, nor
shall pursuit of any remedy herein provided constitute a forfeiture or waiver
of any rent due to Landlord or of any damages accruing to Landlord by reason
of the violation of any of the terms, provisions and covenants herein
contained. No waiver by Landlord of any violation or breach of any of the
terms, provisions and covenants herein contained shall be deemed or construed
to constitute a waiver of any other violation or breach of any of the terms,
provisions and covenants herein contained. Landlord's acceptance of the
payment of rental or other payments hereunder after the occurrence of an event
of default shall not be construed as a waiver of such default. Forbearance by
Landlord to enforce one or more of the remedies herein provided upon an event
of default shall not be deemed or construed to constitute a waiver of such
default.
27. GOVERNING LAW
-------------
27. This Lease and Building shall be governed by and construed in
accordance with the laws of the State of Utah, and the building shall be
constructed to meet all applicable laws, codes and regulations whether local
or national in origin.
28. BROKERAGE
---------
28. Each party hereto represents that no agent or finder, other than
Consolidated Realty Group, who represents Tenant and Xxxxxxxx Realty Services
who represents Landlord (hereinafter referred to as Agents) negotiated or
arranged this Lease, and that, apart from those due to agents no fees or
commissions are due anyone for the procurement hereof, and each party agrees
to indemnify and hold the other harmless from and against any other expenses
which the party so indemnified may incur by reason of claims of any other
person, firm or corporation claiming any brokerage commission, finder's fee or
similar compensation based upon any alleged negotiations or dealing with such
indemnifying party, contrary to the foregoing representation.
Landlord and Tenant agrees to pay Consolidated Realty Group a real estate
advisory fee of $10,000 payable 50% upon lease execution and 50% upon Tenant's
occupancy of the building. The fee is be split $5,000 payable by Landlord and
Page 95
$5,000 payable by Tenant as previously agreed.
29. RECORDING
---------
29. The parties undertake, at the request of either of them, to execute a
memorandum of this Lease in recordable form. If either party shall record
this Lease or a memorandum of this Lease, the party so recording shall be
liable for the entire cost thereof.
30. PRE-OCCUPANCY EXPANSION/CONTRACTION
-----------------------------------
30.1 Pre-Occupancy Expansion/Contraction:
-----------------------------------
Provided that Tenant is not in default on their current Lease and only if
space is available in the new addition, Tenant shall have the one time option
to expand or reduce their initial space requirement by up to 3,000 square
feet.
31. EXPANSION SPACE
---------------
31. Expansion Space Options:
-----------------------
Landlord hereby grants Tenant a right of first refusal on the 5,760
square feet immediately contiguous to Tenant's current and added location, as
highlighted as Space "A" on Exhibit "E". Landlord may lease such space to
other tenants for any time increment, provided that such increment be no more
than four (4) years. Landlord also grants Tenant a right of first refusal on
all other second generation space in the project as it becomes available, and
during the term of this Lease agrees to lease all other building space in
increments of no more than seven (7) years. (Second Generation Space is
defined as any vacant space that becomes available after the initial newly
constructed space.)
31.1 Expansion Space Terms:
----------------------
All rights of first refusal shall be offered to Tenant no earlier than six
and no later than four months prior to the date the expansion space is
available for Tenant's occupancy. Tenant may, at its sole option, waive this
timing requirement. Tenant shall have ten (10) calendar days to exercise
their rights of first refusal on any such space. All notices between the
parties shall be in writing. The rental rates for all expansion space shall
be offered at prevailing fair market values and shall be negotiated between
the parties.
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31.2 Expansion Space Tenant Improvement Allowance:
---------------------------------------------
Tenant shall receive an improvement allowance of $19.00 per rentable
square foot of newly constructed office space on any expansion space accepted
by Tenant, provided that Tenant extends the lease term on such expansion space
to cover a period totaling ten years from the date of occupancy. If Tenant
extends the term for a period covering less than ten years, this improvement
allowance shall be reduced accordingly. For example, if Tenant leases
expansion space of 5,000 square feet for a period of five years, then the
tenant improvement allowance will be 5,000 s.f. x (5/10 x $19.00) = $47,500.
This $19.00 rate will be adjusted up or down in the same proportion that the
rental rate for such expansion space bears to the original base rate specified
in Section 3.
32. PARKING:
--------
32. Parking:
-------
Landlord will provide free surface parking (other than Common Area Fees)
to Tenant based on the following:
Up to 40,000 s.f. 5 stalls per 1,000 s.f. or 200 stalls
Above 41,000 s.f. Tenant shall receive 2.45 stalls per 1,000
rentable square feet
33. HEATING, VENTILATING AND AIR CONDITIONING (HVAC)
------------------------------------------------
33. HVAC:
----
Landlord shall design and provide an HVAC system capable of complying with
the following:
a. Heating. Ventilation and Air Conditioning:
1. Heating systems shall be capable of maintaining 72 degrees
Fahrenheit in all spaces at ASHRAE design winter conditions.
2. Cooling systems shall be capable of maintaining 75 degrees
Fahrenheit in a spaces at ASHRAE design summer conditions.
Conditioned air shall be delivered through an overhead sheet
metal duct system with a series of control boxes. These boxes
shall be arranged to provide separate zones for interior and
exterior spaces.
3. Ventilation systems shall be designed to provide a minimum of 20
CFM fresh outside air per person in accordance with the latest
ASHRAE Performance Guide standards for office occupancies. System
Page 97
noise levels shall not exceed an N.C. of 38 - 40.
b. Cost Allocation:
---------------
As part of Landlord's build out specification Landlord shall be
responsible to provide and install the following:
1. 2 individual 7.5 ton roof top units.
2. Space heaters as required in the new warehouse area.
3. H.V.A.C. Engineering and design costs.
Tenant shall be responsible for all other H.V.A.C. costs as part of the
Tenant Improvement Allowance described in Section 1.7.
34. BUILDING SIGNAGE
----------------
34. Building Signage:
----------------
Landlord will provide a monument sign base for a Tenant supplied sign.
Landlord has reviewed Tenant sign graphics and approves of such. Any
additional signage desired by Tenant must be approved by Landlord.
34.1 Project Signage:
---------------
Landlord agrees that it will not name the building or the project after
any of Tenant's competitors.
34.2 Tenant shall not place or suffer to be placed or maintained on any
exterior door, wall, or window of the Premises, or elsewhere in the Project,
any sign, awning, 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 or window or door of the Premise; without first obtaining
Landlord's written approval. Tenant further agrees to maintain such sign,
awning, canopy, decoration, lettering, advertising matter, or other things as
may be approved in good condition and repair at all times. Landlord, may, at
Tenant's cost, remove any item erected in violation of this Section.
35. MISCELLANEOUS
-------------
35. Words of any gender used in this Lease shall be held and construed to
include any other gender, and words in the singular number shall be held to
include the plural, unless the context otherwise requires.
35.1 The terms, provisions, covenants and conditions contained in this
Lease shall apply to, inure to the benefit of, and be binding upon, the
parties hereto and upon their respective heirs, legal representatives,
successors and permitted assigns, except as otherwise herein expressly
Page 98
provided.
35.2 The captions are inserted in this Lease for convenience only and in
no way to define, limit, or describe the scope or intent of this Lease, or any
provision hereof, nor in any way affect the interpretation of this Lease.
35.3 Whenever this Lease refers to the prior consent or approval (written
or oral) by Landlord or Tenant, Landlord and Tenant, respectively, agree that
such consent or approval shall not be unreasonably withheld or delayed.
35.4 This Lease may not be altered, changed or amended except by an
instrument in writing signed by Landlord and Tenant.
35.5 If this Lease is terminated for any reason other than default of the
Tenant, all liabilities of the parties shall be adjusted as of the effective
date of the termination. Any termination hereof by reason of a default of
Tenant shall not affect any obligation or liability of Tenant under this Lease
which accrued prior or subsequent to the effective date of termination, and
all such obligations and liabilities of Tenant shall survive such termination.
35.6 The terms and conditions contained herein are not independent
covenants, but are mutually dependent upon each other.
35.7 If any of the terms of this Lease, or the application thereof to any
person or circumstances shall, to any extent, be invalid or unenforceable, the
remainder of this Lease, or the application of such term to persons or
circumstances other than those as to which it is invalid or unenforceable,
shall not be affected thereby and each term of this Lease shall be valid and
enforceable to the fullest extent permitted by law.
35.8 The parties signing this lease have obtained corporate, partnership
or individual authority to execute the lease on behalf of the entity.
Furthermore, the individuals are deemed to be officers of the appropriate
entities with proper authority.
35.9 Landlord hereby reserves the right at any time to make changes,
alterations or additions, including the building and leasing of additional
commercial space, in or on the building in which the Premises are contained,
anywhere in the Project, except in the space occupied by the Tenant, unless
prior approval is obtained by Tenant. Tenant shall not, in such event, be
allowed the right to terminate this Lease for injury or inconvenience
occasioned thereby. However, Tenant shall be allowed to claim damages for
injury or unreasonable inconvenience occasioned by Landlord's negligence in
connection therewith.
35.10 All common areas in the Project which Tenant may be permitted to
use and occupy are to be used and occupied under a revocable license, and if
any such license be reasonably revoked or if the amount of such areas be
reasonably changed or diminished, Landlord shall not be subject to any
Page 99
liability nor shall Tenant be entitled to any compensation or diminution or
abatement of rent nor shall reasonable revocation or diminution of such areas
be deemed constructive or actual eviction. All common areas and other
facilities in or about the Project shall be subject to the exclusive control
and management of Landlord. Landlord shall have the right to construct,
maintain, and operate fighting and other facilities on all said areas and
improvements; to police the same; to change the arc, level, location, and
arrangement of parking areas and other facilities; to restrict parking by
Tenants, their officers, agents, and employees; to close all or any portion of
said areas or facilities to such extent as may be legally sufficient to
prevent a dedication thereof or the accrual of any right to any person or the
public therein; and to close temporarily all or any portion of the parking
areas or facilities to discourage non-customer parking. However, in no event
will Landlord restrict the number of parking spaces to a number less than
provided for in Section 32, nor will any parking space ever be located on a
site non-contiguous to the building described in Section I.O. Landlord shall
operate and maintain the common areas in such a manner as Landlord in its
discretion shall determine, shall have full right and authority to employ and
discharge all personnel with respect thereto, and shall have the right,
through reasonable rules, regulations, and/or restrictive covenant promulgated
by it from time to time, to control use and operation of the common areas in
order that the same may occur in a proper and orderly fashion.
36. FORCE MAJEURE
-------------
36. If either party hereto shall be delayed or hindered in or prevented
from the performance of any act required hereunder by reason of strikes,
lockouts, labor troubles, inability to procure materials, failure of power,
restrictive governmental laws or regulations, riots, insurrection, war or
other reason of a like nature beyond the reasonable control of the party
delayed in performing work or doing acts required under the terms of this
Lease, then performance of such act shall be excused for the period of the
delay and the period for the performance of such act shall be extended for a
period equivalent to the period of such delay.
IN WITNESS WHEREOF, Landlord and Tenant have respectively signed and
sealed this Lease on the dates set forth below.
LANDLORD: VALLEY AMERICAN
BY: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
ITS: Vice President
DATE: March 18, 1996
Page 100
TENANT: XXXXXXX COMMUNICATIONS CORPORATION
BY: /s/ Xxxxx X. Xxxxxx
----------------------------------
ITS: Chief Financial Officer
DATE: February 26, 1996
STATE OF UTAH )
County of Salt Lake )
On the 18 day of March, 199[6], personally appeared before me
XXXXXXX X. XXXXXXXX, the signer of the foregoing lease who duly
acknowledged to me that he executed the same.
/s/ Notary Public
----------------------------
[ S E A L ]
STATE OF UTAH )
County of Salt Lake )
On the 26th day of February, 199[6], personally appeared before me
Xxxxx X. Xxxxxx, the signer of the foregoing lease who duly acknowledged
to me that he executed the same.
/s/ Notary Public
----------------------------
[ S E A L ]
EXHIBIT A
SITE PLAN
[Graphic Entitled
"Overall Development & Landscape Plan"
Depicting Site Plan]
EXHIBIT B
Page 101
FLOOR PLAN - 1
[Graphic Entitled
"Phase One Floor Plan"
Depicting Floor Plan]
EXHIBIT B
FLOOR PLAN - 2
[Untitled Graphic
Depicting Floor Plan]
EXHIBIT C
CONSTRUCTION DRAWINGS AND SPECIFICATIONS
TO BE ATTACHED AT A LATER DATE
EXHIBIT D
REDEVELOPMENT LETTER
JANUARY 14, 1988
[West Valley City Letterhead] [REDEVELOPMENT AGENCY]
HAND-DELIVERED
January 14, 1988
Dell X. Xxxxxxx
0000 X. Xxxxxxxx Xxxxx
Xxxx Xxxxxx Xxxx, Xxxx 00000
Dear Dell,
Pursuant to your request, the following is the understanding we have
reached with regard to the financial assistance provided by the Redevelopment
Agency of West Valley City for the project called "Xxxxxxx Electronics".
The agreement for the disposal of land (ADL), as yet unsigned by the
parties, provides that the Agency will allocate to Dell X. Xxxxxxx 75% of the
tax increment accruing to the Agency from the "Xxxxxxx Electronics" project.
Page 102
The term of that allocation from the Agency to dell X. Xxxxxxx shall be 10
years. In years one through five, the Agency is entitled to 100% of the tax
increment for the aforementioned project. Dell X. Xxxxxxx will receive 75% of
that 100% allocation. In years six through ten, the Agency is entitled to 80%
of the tax increment. In those years Dell X. Xxxxxxx will receive 75% of that
80% figure.
It is the further understanding of the Agency that Dell Xxxxxxx will assign
the tax increment amount to Xxxxxxx Electronics Corp. pursuant to a lease
agreement between the parties.
If you have any questions with regard to this understanding, I am anxious
to be advised. Thank you for your assistance in making the Redwood
Neighborhood Development Project area a viable and vital industrial park
project in West Valley City.
Sincerely,
/s/ Xxxxx Xxxxxx
Redevelopment Agency Administrator
LC:jm
cc: Xxxxxx X. Xxxxx, Deputy Executive Director
0000 Xxxxx Xxxxxxx Xxxx Xxxx Xxxxxx Xxxx, Xxxx 00000
Phone: (000) 000-0000
EXHIBIT E
EXPANSION SPACE, R.O.F.R.
[Graphic Entitled
"Overall Development & Landscape Plan"
Depicting Site Plan]
EXHIBIT F
LEGAL DESCRIPTION
TO BE SUPPLIED AT A LATER DATE
Page 103
FIRST ADDENDUM TO LEASE
This addendum is entered into this, 31st day of January, 1997, by and
between VALLEY AMERICAN INVESTMENT COMPANY, X.X. Xxx 000, Xxxxxxx, Xxxx 00000,
as Landlord; and XXXXXXX COMMUNICATIONS CORPORATION, of 0000 Xxxx Xxxxxxxx
Xxx, Xxxx Xxxxxx Xxxx, XX 00000, as Tenant.
Whereas, both Tenant and Landlord have executed a uniform lease agreement
dated the 26th day of February, 1996.
In accordance with Section 2 of the uniform lease agreement, the term of
the lease shall be ten years. This Addendum shall ratify the commencement
date of the original lease term as November 1, 1996. The lease shall expire
on October 31, 2006.
Whereas this addendum shall also verify that during the course of
construction Landlord incurred expenses over and above the tenant improvement
allowance in the amount of $35,470. In accordance to Section 1.7 of the lease
agreement, Tenant shall pay for any improvements above the allowance.
Whereas, Landlord and Tenant have agreed to amortize the tenant
improvement cost over-runs over the term of the lease. Tenant agrees to pay
to Landlord $35,470.00 at 11% over ten years, which equates to a monthly
payment of $488.60.
The monthly rent payment for November 1, 1996 through October 31, 1998
shall be as follows:
Base Rent per Lease: $20,609.00
Amortized Cost Over-runs: $ 488.60
C.A.M. Budget: $ 1,912.00
----------
Total Monthly Payment: $23,009.60
==========
In accordance with Section 3 of the lease, the Base Rent shall be
adjusted on November 1, 1998, November 1, 2000, November 1, 2002, and
November 1, 2004.
Except as modified by the provisions of this Addendum, all terms,
conditions and provisions of the Lease shall remain unchanged and in full
force and effect.
SECOND ADDENDUM TO LEASE
This addendum is entered into this, 30 day of April, 1997, by and between
VALLEY AMERICAN INVESTMENT COMPANY, X.X. Xxx 000, Xxxxxxx, Xxxx 00000, as
Landlord; and XXXXXXX COMMUNICATIONS CORPORATION, of 0000 Xxxx Xxxxxxxx Xxx,
Page 000
Xxxx Xxxxxx Xxxx, XX 00000, as Tenant.
Whereas, both Tenant and Landlord have executed a uniform lease agreement
dated the 26th day of February, 1996, and a First Addendum to Lease dated the
31st day of January, 1997.
Whereas, this addendum shall also verify that during the course of
construction Landlord incurred expenses over and above the tenant; improvement
allowance in the amount of $74,357.
In accordance with Section 2 of the uniform lease agreement, the term of
the lease shall be ten years. This Addendum shall ratify the commencement
date of the original lease term as November 1, 1996. The lease shall expire
on October 31, 2006.
Whereas this addendum shall also verify that during the course of
construction Landlord incurred expenses over and above the tenant improvement
allowance in the amount of $35,470. In accordance to Section 1.7 of the lease
agreement, Tenant shall pay for any improvements above the allowance.
Whereas, Landlord and Tenant have agreed to amortize the tenant
improvement cost over-runs over the term of the lease. Tenant agrees to pay
to Landlord $35,470.00 at 11% over ten years, which equates to a monthly
payment of $488.60.
Whereas, Landlord and Tenant have agreed to amortize the tenant
improvement cost over-runs over the term of the lease. Tenant agrees to pay
to Landlord $74,357.00 at 11% over 115 months, which equates to a monthly
payment of $1,049.00.
The monthly rent payment for April 1, 1997 through October 31, 1998 shall
be as follows:
Base Rent per Lease: $20,609.00
Amortized Cost Over-runs per First Addendum: $ 488.60
Amortized Cost Over-runs per Second Addendum: $ 1,049.00
C.A.M. Budget: $ 1,912.40
----------
Total Monthly Payment: $24,059.00
In accordance with Section 3 of the lease, the Base Rent shall be
adjusted on November 1, 1998, November 1, 2000, November 1, 2002, and
November 1, 2004.
Except as modified by the provisions of this Addendum, all terms,
conditions and provisions of the Lease shall remain unchanged and in full
force and effect.
Page 105
Executed by the parties on the day and year first written above in Salt
Lake City, Utah.
