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Exhibit 10.6
COMMERCIAL LEASE
THIS LEASE (the "Lease") dated this 4th day of September, 1996, is entered
into by and between DRAPER LAND PARTNERSHIP II, a Utah limited partnership
("Landlord"), and 1-800-LENS NOW, INC., d.b.a. 1-800-CONTACTS (it is the
present intention of 1-800-LENS NOW, INC., to formally change its name to
1-800-CONTACTS, INC., and this Lease shall apply to full force and extent to
1-800 CONTACTS, INC., in such event), a Utah corporation, ("Tenant").
1. PREMISES.
(a) Description. Landlord hereby leases to Tenant, and Tenant
hereby leases from Landlord, for the term and subject to the terms and
conditions hereinafter set forth, to each and all of which Landlord and Tenant
hereby mutually agree, those certain premises (the "Premises"), highlighted on
Exhibit A attached hereto, which include approximately 6,500 Rentable square
feet of office space (approximately 5,652 Useable square feet) (the exact
Rentable square footage and location to be determined by final space plan).
The location of the Premises is commonly known as: Building "D" at 00000 Xxxxx
Xxxxxxxxx Xxxx Xxxxx, Xxxxxx, XX, 00000 (the "Building").
(b) Additional Use. In addition, the Premises shall include the
appurtenant right to use, in common with others, the site, parking and
landscaped areas. Landlord shall provide Tenant, at no additional charge, the
use of 33 non-reserved parking stalls in the adjacent parking lot.
(c) Acceptance of Premises. Unless otherwise notified by Tenant
within thirty (30) days of taking possession, by entry hereunder Tenant accepts
the Premises as being in the condition in which Landlord is obligated to
deliver the Premises. Tenant shall at the end of the term and any extension
herein, surrender to Landlord the Premises and all alterations, additions and
improvements thereto in and same condition as when received; ordinary wear and
tear, damage by fire, earthquake, or act of God excepted. Landlord has no
liability and has made no representation to alter, improve, repair or paint the
Premises or any part thereof, except as specified in Article 2(c), 2(d) and 6
herein.
2. TERM, OPTION, TENANT IMPROVEMENTS.
(a) Lease Term. The initial Lease Term shall be six (6) years and
shall commence November 5, 1996 ("Commencement Date"), which Commencement Date
is subject to the substantial completion of Tenant Improvements. If Landlord
is solely responsible for not delivering possession of the Premises to Tenant
within forty-five (45) days of the Commencement Date, Tenant may upon ten (10)
days written notice terminate the Lease. In the event of Tenant's termination
due to late delivery, Landlord shall not be liable to tenant for any damage of
any kind resulting from such late delivery or failure to deliver possession of
the Premises.
(b) Option. Provided that Tenant is not in default under the
Lease, Tenant may by written notice to Landlord, not later than one hundred
fifty (150) days prior to the expiration of the Lease, extend the Lease by
exercising a (one-time) 5-year option on a timely basis. Tenant shall possess
the Premises during the Option period upon the same terms and conditions of the
Lease,
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except that Base Rent under Article 4(a) herein will be adjusted for the Option
period to the then fair market rate for similar space in similar condition in
the surrounding area.
(c) Base Building Improvements. At Landlord's sole cost and
expense, Landlord shall design, construct and install the Building's roof and
structural elements ("Shell"), shall provide basis utility access to and an
initial HVAC unit for the Premises, and shall design and construct the common
areas of the Premises and Building, as more specifically outlined in Exhibit B
- Base Building Improvements (collectively "Base Building Improvements").
(d) Tenant Improvements. At execution of the Lease, Landlord shall
commence the building design, construction and installation of agreed-upon
Tenant Improvements requested by Tenant, as more specifically outlined in
Exhibit C - Tenant Improvements (collectively "Tenant Improvements"). Tenant
Improvements shall include all improvements to the Premises, but exclude the
Base Building Improvements.
(e) Substantial Completion of Tenant Improvements. The Premises
shall be deemed complete when Landlord has substantially completed the Tenant
Improvements. "Substantial Completion" shall mean when (i) installation of
Tenant Improvements has occurred, (ii) Basic utility services are available to
the Premises, (iii) Landlord's Architect/Contractor shall have issued a
Certificate of Substantial Completion with respect to Premises or that portion
of the Building within which they are contained, whether or not Substantial
Completion of the entire Building itself shall have occurred, and (iv) issuance
of a temporary Certificate of Occupancy. Substantial Completion shall be
deemed to have occurred notwithstanding a requirement to complete "punch-list"
work, which shall be completed within a reasonable time by Landlord. Landlord
shall use its best efforts to advise Tenant of Substantial Completion at least
thirty (30) days prior to such date, but the failure to give such notice shall
not constitute a default hereunder by Landlord.
3. NON-OCCUPANCY OF IMPROVED SPACE.
In the event Tenant does not occupy the Premises and fails to pay Rents
as required in Article 4 of the Lease, all costs for Tenant Improvements become
due and payable upon invoicing by Landlord, subject to reasonable mitigation by
Landlord for use with next tenant. Further, such invoicing by Landlord does
not waive any other rights or remedies Landlord may have against Tenant for
failure to occupy.
4. RENT.
(a) Base Rent. Total Base Rent shall be $9.75 per Rentable square
foot X 6,500+- square feet X 6 years ($380,250+-, subject to an annual increase
as provided below), payable as follows: $5,281+- per month payable in advance
on or before the 1st day of each month during the duration of the Lease, with
the first and last such monthly rental payments being due upon the execution of
the Lease. This Base Rent is estimated herein since the square footage is
approximated. The exact Base Rent will be determined according to the square
footage stated in the final space plan. Any partial months shall be prorated
accordingly. Base Rent under this Article shall be increased four (4%) percent
per year during the Lease Term and during any Option period (after adjustment
to fair market value at beginning of any Option period). Base Rent during the
Term of the Lease shall never decrease. All Base Rent and Additional Rent
(collectively "Rents") shall be paid as follows,
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unless otherwise directed in writing: Draper Land Partnership II, 00 Xxxx
Xxxxxxxxx Xxxx Xx., Xxxxxx, XX 00000, Attn:: Xxx Xxxxxxxxx.
(b) Additional Rent. All obligations payable by Tenant under the
Lease other than Base Rent are called "Additional Rent." Additional Rent shall
be paid monthly with Base Rent pursuant to the Lease, unless otherwise invoiced
by Landlord.
(c) Interest, Late Charges, Costs and Attorneys' Fees. If Tenant
fails to pay within ten (10) days of the date due any Rents which Tenant is
obligated to pay under the Lease, the unpaid amount shall bear interest at ten
(10%) percent per annum. Tenant acknowledges that any late payments of Rents
shall cause Landlord to lose the use of that money and incur costs and expenses
not contemplated under the Lease, including without limitation administrative,
collection and accounting costs, the exact amount of which is difficult to
ascertain. Therefore, in addition to interest, any late payments shall be
accompanied by a payment of a late charge equal to five (5%) percent of the
late Rents. Further, as Additional Rent, Tenant shall be liable to Landlord
for reasonable costs and attorneys' fees incurred as a result of late payments
or non-payments. Acceptance of any interest, late charge, costs or attorneys'
fees shall not constitute a waiver of any default by Tenant nor prevent
Landlord from exercising any other rights or remedies under the Lease or at
law.
5. USE.
(a) The Premises shall be used for general office use, storage and
any other lawful purpose incidental to Tenant's business, and no other, unless
consented to in writing by Landlord. Tenant shall not do or permit to be done
in or about the Premises or Building anything which is prohibited by or in any
way in conflict with any and all laws, statutes, ordinances, rules and
regulations now in force or which may hereafter be enacted or promulgated or
which is prohibited by the standard form of fire insurance policy, or which
will increase the existing rate of or affect any fire or other insurance upon
the Presides or Building or any of its contents, or cause a cancellation of any
insurance policy covering the Premises or Building or any part thereof or any
of its contents. Tenant shall not handle, use, store or otherwise put any
hazardous material on the Premises, without first notifying Landlord of its
intention to do so and identifying the hazardous material and safety plan which
shall ensure that nay such hazardous material is properly controlled,
safeguarded, and disposed of, and obtaining Landlord's prior written consent,
which consent may be reasonably withheld and may be conditioned upon absolute
indemnification by Tenant and accompanying bond. Tenant shall not do or permit
anything to be done in or about the Premises or Building which will in any way
violate rules or Regulations reasonably promulgated by Landlord throughout the
Lease, obstruct or interfere with the right of other tenants, or injure them,
or use or allow the Premises or building to be used for any improper, immoral,
or unlawful purpose, nor shall Tenant cause, maintain or permit any nuisance,
in, on or about the Premises or Building or commit or suffer to be committed
any waste in, on or about the Premises or Building.
(b) Tenant shall not use the name of the Building in which the
Premises are located, in connection with any business carried on in said
Premises (except as Tenant's address) without written consent of Landlord.
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(c) Tenant shall not manufacture, assemble or store materials
inside the common areas outside of Building.
6. LANDLORD'S SERVICES.
Landlord, at its sole cost and expense, is responsible to maintain only
the roof and structural elements ("Shell") of the Premises and Building. All
Operating Expenses, including but not limited to repairs, maintenance, common
area utilities, common area janitorial, sewer and garbage, insurance, taxes,
and property management on the Premises, Building, and common areas shall be
coordinated by Landlord, but are the financial responsibility of the Tenant
through prorated xxxxxxxx as more fully outlined in Article 7 herein.
7. OPERATING EXPENSES - REPAIRS, MAINTENANCE, INSURANCE, TAXES AND PROPERTY
MANAGEMENT (EXCLUDES ELECTRIC, GAS AND OFFICE JANITORIAL).
Since the Premises is part of a Building or group of buildings, Tenant is
responsible for a prorated share of Operating Expenses, including but not
limited to repairs, maintenance, common area utilities, common area janitorial
(not specific tenant janitorial), water, sewer and garbage, insurance, taxes,
and property management incurred in the operation and management of the
Premises, Building, and common areas as shall be reasonably determined by the
Landlord. For purposes of the Lease, Operating Expenses specifically exclude
electric, gas, and janitorial expenses for the office space portion (excluding
common areas) of Tenant's Premises which are separately billed to Tenant and
which are the sole responsibility of Tenant. Proration shall be on a square
footage basis with all other tenants and Tenant's proration shall be calculated
by multiplying the Operating Expenses by an equation, the numerator being the
Rentable square feet of the Premises and the denominator being the total
Rentable square feet of the Building. The Operating Expenses shall be prorated
to Tenant and be payable by Tenant as Additional Rent on a monthly basis, and
subject to the following terms and conditions:
(a) Prorated Share. Tenant's prorated share of the Operating
Expenses shall be computed and paid in twelve (12) equal monthly estimated
payments as determined in the Landlord's reasonable discretion. Such
Additional Rent shall be paid by Tenant on or before the 1st day of each month
with the Base Rent. As soon as is reasonably possible, but in any event within
ninety (90) days following the end of each calendar year, Landlord shall
furnish to Tenant a statement showing the Premises' and Building's actual
Operating Expenses for the preceding calendar year. In the case of a
deficiency, Tenant shall promptly remit its prorated share of such deficiency
to Landlord. In the case of a surplus, Landlord shall apply said surplus to
the next Additional Rent due from Tenant.
(b) Right to Review. Tenant may review at his sole cost and
expense any Operating Expenses prorated to Tenant by Landlord, including
assessed Real Estate Taxes as may be statutorily allowed. Landlord shall make
available the applicable Operating Expenses' invoices and statements. However,
any such review must be requested and completed within sixty (60) days of
receipt of the annual statement.
8. ALTERATIONS.
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(a) Tenant will not make or suffer to be made any alterations,
additions or improvements in excess of $1,000, excluding the initial Tenant
Improvements, (collectively "Alterations") to or upon the Premises, Building,
or any part thereof, or attach any fixtures or equipment thereto, without first
obtaining Landlord's written approval, which shall not be unreasonably withheld
or delayed. Any Alterations to or upon the Premises shall be made by Tenant at
Tenant's sole cost and expense and any contractor selected by Tenant to make
the same shall be subject to Landlord's reasonable prior written approval. All
such Alterations permanent in character, made in or upon the Premises either by
Tenant or Landlord, may at the option of Landlord, become Landlord's property
and, at the end of the term or any extension hereof, shall remain on the
Premises without compensation to Tenant unless Landlord requests that Tenant
remove any such Alterations. Notwithstanding the above, Tenant's work stations
and other items of personal property shall remain Tenant's property.
(b) Any Alternations shall, when completed, be of such a character
as not to lessen the value of the Premises or such improvements as may be then
located thereon. Any Alterations shall be made promptly and in a good
workmanlike manner and in compliance with all applicable permits and
authorizations and building and zoning laws and with all other laws,
ordinances, orders, rules, regulations and requirements of all federal, state
and municipal governments, departments, commissions, boards and offices. The
costs of any such Alterations shall be paid by Tenant, so that the Premises be
free of liens, for services performed, labor and material supplied or claimed
to have been supplied. Before any Alternations shall be commenced, Tenant
shall pay any increase in premiums on insurance policies (provided for herein)
or ensure adequate coverage is in place for all risks related to the
construction of such Alterations and the increased value of the Premises.
9. PERSONAL PROPERTY & SIGNAGE.
Placement of signs on a monument, if any, including the type, size and
lighting of the signs, must be approved in writing by Landlord prior to their
installation. Such personal property must be removed at the end of the Lease
Term, any Option period herein if applicable, or upon Tenant's failing to have
possession of the Premises.
10. LIENS.
Tenant shall keep the Premises and the Building free from any mechanics'
and/or materialmen's liens or other liens arising out of any work performed,
materials furnished or obligations incurred by Tenant. Tenant shall notify
Landlord in writing at least seventy-two (72) hours before any work or activity
is to commence on the Premises which may give rise to such liens to allow
Landlord to post and keep posted on the Premises any notices which Landlord may
deem to be proper for the protection of Landlord and the Premises from such
liens.
11. DESTRUCTION OR DAMAGE.
(a) If the Premises is partially damaged by fire, earthquake, or other
Act of God, Landlord shall repair the same at Landlord's expense, subject to
the provisions of this Article and provided such repairs can, in Landlord's
reasonable opinion, be made within sixty (60) days. During such repairs, the
Lease shall remain in full force and effect, except that if there shall be
damage to the Premises and such damage is not the result of the negligence or
willful misconduct of Tenant,
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Tenant's employees, agents, or invitees, an abatement of Rents shall be allowed
Tenant for such portion of Premises and period of time as the Premises was
unusable by Tenant.
(b) If in Landlord's reasonable opinion the partially damaged Premises
can be repaired, but not within sixty (60) days, the Landlord may elect, upon
written notice to Tenant within thirty (30) days of such damages, to repair
such damages over a longer time period and continue the Lease in full force and
effect, but with Rents partially abated as provided in Article 11(a). In the
event such repairs cannot be made within sixty (60) days, Tenant shall have the
option to terminate the Lease provided that written notice is given to Landlord
within thirty (30) days of receipt of Landlord's notice stated in this
paragraph.
(c) If the partially damaged Premises is to be repaired under this
Article, Landlord shall repair such damages to the Premises itself, and to the
Tenant Improvements supplied by Landlord herein. Except in the event of
Landlord's gross negligence or willful misconduct, Tenant shall be responsible
for Tenant's equipment, furniture and fixtures, and other alterations,
additions and improvements made by Tenant to the Premises and Building.
(d) If in Landlord's reasonable opinion, the Premises is totally or
substantially destroyed by fire or other casualty, the Lease shall terminate
upon notice by Landlord.
12. SUBROGATION.
Landlord and Tenant shall each, prior to Tenant's taking possession or
immediately after the execution of the Lease, procure from each of the insurers
under all policies of fire, theft, public liability, workmen's compensation and
other insurance now or hereafter existing during the term and any extension
hereof and purchased by either of them insuring or covering the Premises and/or
Building or any portion thereof or operations therein, a waiver of all rights
of subrogation which the insurer might otherwise, if at all, have against the
other.
13. INDEMNIFICATION.
Tenant and Landlord hereby agree to indemnify and hold the other party
harmless from any damage to any property, including the release of any
hazardous materials, or injury to or death of any person arising from the use
of the Premises, Building, or common areas by Tenant or the ownership,
management or maintenance of the Premises, Building, or common areas by
Landlord, except such as is caused by reason of the negligent or willful act of
the other party, its agents, employees or contractors. The foregoing indemnity
obligation of Tenant and Landlord shall include reasonable fees, investigation
costs and all other reasonable costs and expenses incurred by Landlord or
Tenant from the first notice that any claim or demand is made, except in the
event of the other party's negligence or willful misconduct. The provisions of
this Article shall survive the Lease's termination with respect to any damage,
injury or death occurring prior to such termination.
14. COMPLIANCE WITH LEGAL REQUIREMENT.
Tenant shall, at its sole cost and expense, promptly comply with all laws,
statutes, ordinances and governmental rules, regulations or requirements now in
force or which may hereafter be in force, the requirements of any board of fire
underwriters or other similar body now or hereafter
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constituted, any direction or occupancy certificate issued pursuant to any law
by any public officer or officers, as well as the provisions of all recorded
documents affecting the Premises, (collectively the "Applicable Laws"), insofar
as any thereof relate to or affect the use or occupancy of the Premises,
Building, or common areas, excluding requirements of structural changes now
related to or affected by improvements made by or for Tenant.
Landlord shall, at its sole cost and expense, promptly comply with all
Applicable Laws, including the American with Disabilities Act ("ADA"), insofar
as any thereof relate to or affect Landlord's obligations under the Lease, or
its ownership of the Premises, Building, or common areas, except for Tenant's
requirements in the immediately preceding paragraph herein.
15. INSURANCE.
(a) Commercial General Liability. Tenant shall, maintain a Commercial
General Liability policy including all coverages normally provided therein.
Such policies shall specifically name Landlord as an additional insured, with a
cancellation period of thirty (30) days prior written notice of any
cancellation. A Certificate of Insurance shall be provided to Landlord. All
policies of insurance shall be issued by responsible insurance companies
licensed to do business in the State of Utah.
The minimum limits of coverage acceptable area:
(i) $1,000,000 Each Occurrence Combined Single
Limit for Bodily Injury and Property Damage
and
(ii) $2,000,000 Annual Aggregate
(b) Premises and Building Insurance. Landlord shall insure the
Premises and Building, including Landlord supplied Core and Shell and Tenant
Improvements as deemed necessary in Landlord's reasonable discretion. Tenant
shall pay its prorate share for such insurance as outlined in Article 7 herein,
involving Tenant's prorated share of Operating Expenses. All policies of
insurance shall be issued by responsible insurance companies licensed to be
business in the State of Utah.
(c) Tenant's Additional Insurance. Tenant may, at its sole cost and
expense, cause all equipment, machinery, furniture and fixtures, personal
property, and Tenant Improvements supplied by Tenant from time to time used or
intended to be used in connection with the operation and maintenance of the
Premises, to be insured by Tenant against loss or damage. Except for losses
caused by Landlord's gross negligence or willful misconduct, Landlord is in no
way liable for any uninsured Tenant's property.
16. ASSIGNMENT AND SUBLETTING.
In the event Tenant should desire to assign the Lease or sublet the
Premises, Tenant shall give Landlord written notice of such desire at least
ninety (90) days in advance of the date on which Tenant desires to make such
assignment or sublease. Landlord shall then have a period of thirty (30) days
following receipt of such notice within which to notify Tenant in writing that
Landlord elects
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either (i) to terminate the Lease as of the date so specified by Tenant, in
which event Tenant will be relieved of all further obligations hereunder, or
(ii) to permit Tenant to assign or sublet such space, subject to prior written
approval of the proposed assignee by Landlord, such consent not to be
unreasonably withheld or delayed, so long as the use of the Premises by the
proposed assignee would be a permitted use and the proposed assignee is of
sound financial condition as determined in Landlord's reasonable discretion. If
Landlord should fail to notify Tenant in writing of such election within said
thirty (30) day period, Landlord shall have deemed to have waived option (i)
above, but written approval by Landlord of the proposed assignee shall still be
required. Failure by Landlord to approve a proposed assignee shall not cause a
termination of the Lease. Any rents or other consideration realized by Tenant
under any such sublease and assignment in excess of the Rents hereunder, after
amortization of the reasonable costs of extra tenant improvements for which
Tenant has paid and reasonable subletting and assignment costs, shall be
divided and paid ten percent (10%) to Landlord and ninety percent (90%) to
Tenant.
Notwithstanding the above, Tenant shall have the right to sublease or
assign all or any portion of the Premises during the Term or any Option period
to any related entity, subsidiary, or affiliate of Tenant, having at least
fifty-one (51%) percent direct common ownership, without having to receive
Landlord's consent, but still requiring written notice to Landlord on or before
such sublease or assignment. No assignment or subletting by Tenant without the
express written consent of Landlord shall relieve Tenant of any obligation
under the Lease. Any assignment or subletting which conflicts with the
provisions hereof shall be void.
17. RULES.
Tenant shall faithfully observe and comply with all Rules and Regulations
reasonably promulgated by Landlord, in writing and after reasonable notice,
during the Term or any Option period herein. Landlord must apply rules
equitably against all Tenants, but shall not be responsible to Tenant for the
non-performance by other Building tenants, or adjacent buildings' tenants, of
any of said Rules and Regulations.
18. ENTRY BY LANDLORD.
The Landlord may enter the Premises or Building at reasonable hours and
upon 24 hours reasonable written notice to Tenant to (a) inspect the same, (b)
show the same to prospective purchasers, lenders or tenants, (c) determine
whether Tenant is complying with all of Tenant's obligations hereunder, (d)
post notices of non-responsibility or (e) make repairs required of Landlord
under the Lease, repairs to adjoining space or utility service, or make
repairs, alterations or improvements to the Building, provided that all such
work shall be done as promptly as possible and with as little interference to
Tenant as reasonably possible. Tenant hereby waives any claim for damages for
any inconvenience to or interference with Tenant's business, any loss of
occupancy or quiet enjoyment of the Premises occasioned by such entry.
Landlord shall at all times have and retain a key to unlock all doors in, on or
about the Premises (excluding Tenant's vaults, safes and similar areas
designated in writing by Tenant). In the event of an emergency, Landlord shall
have the right to use any and all means which Landlord may deem proper to enter
the Premises, without notice, for the limited purpose of abating as possible
said emergency. Such emergency entrance shall not be construed or deemed to be
a forcible or unlawful entry into or a detainer of the Premises or an eviction,
actual or constructive, of Tenant from the Premises, or any portion thereof.
Entry
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by Landlord for non-emergencies shall be limited to regular business hours and
only with an officer of Tenant present.
19. EVENTS OF DEFAULT.
The occurrence of any one or more of the following events ("Events of
Default") shall constitute a breach of the Lease by Tenant: (a) if Tenant
fails to pay Rents when and as the same becomes due and payable and such
failure continues for more than ten (10) days after written notice thereof, or
(b) if Tenant fails to pay any other sum when and as the same becomes due and
payable and such failure continues for more than ten (10) days after receipt of
written notice thereof; or (c) if Tenant fails to perform or observe any
material term or condition of the Lease, such failure continues for more than
thirty (30) days after written notice from Landlord, and Tenant does not within
such period begin with due diligence and dispatch the curing of such default,
or, having so began, thereafter fails or neglects to complete with due
diligence and dispatch the curing of such default; or (d) if Tenant shall make
a general assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts as they become due or shall file a petition in
bankruptcy, or shall be adjudicated as bankrupt or insolvent, or shall file a
petition seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, or shall file any answer admitting or shall fail timely to
contest the material allegations of a petition filed against it in any such
proceeding, or shall seek or consent to or acquiescence in the appointment of
any trustee, receiver or liquidator of Tenant or any material part of its
properties; or (e) if within sixty (60) days after the commencement of any
proceeding against Tenant seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future statute, law or regulation, such proceeding shall not have been
dismissed, or if, within sixty (60) days after the appointment without the
consent or acquiescence of Tenant, of any trustee, receiver or liquidator of
Tenant or of any material part of its properties, such appointment shall not
have been vacated; or (f) vacation or abandonment of the Premises for a
continuous period in excess of fifteen (15) days after initial occupancy, or
(g) if the Lease or any estate of Tenant hereunder shall be levied upon under
any attachment or execution and such attachment or execution is not vacated
within thirty (30) days of receipt thereof by Tenant.
20. TERMINATION UPON TENANT'S DEFAULT.
If an Event of Default shall occur, Landlord at any time thereafter may
give a written termination notice to Tenant, and on the date specified in such
notice (which shall not be less than three 93) days after service) Tenant's
right to possession shall terminate and the Lease shall terminate, unless on or
before such date all Rents, arrearages and other sums due by Tenant under the
Lease, including reasonable costs and attorneys' fees incurred by or on behalf
of Landlord, shall have been paid by Tenant and all other Events of Default by
Tenant shall have been fully cured to the satisfaction of Landlord. Upon such
termination, Landlord may recover from Tenant:
(a) the worth at the time of award of the unpaid Rents which had been
earned at the time of termination; plus
(b) the worth at the time of award of the amount by which the unpaid
Rents which would have been earned after termination until the time of award
exceeds the amount of such Rents loss that Tenant proves could have been
reasonably avoided; plus
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(c) the worth at the time of award of the amount by which the
unpaid Rents for the balance of the term of the Lease after the time of award
exceeds the amount of such Rents loss that Tenant proves could be reasonably
avoided; and plus
(d) any other amount reasonably necessary to compensate Landlord
for all the detriment proximately caused by Tenant's failure to perform its
obligations under the Lease or which in the ordinary course of things would be
likely to result therefrom; and/or
(e) At Landlord's elections, such other amounts in addition or in
lieu of the foregoing as may be permitted from time to time herein or by
applicable law.
The "worth at the time of award" of the amounts referred to in clauses
(a) and (b) above is computed by allowing interest at the rate of 10% per
annum. The "worth at the time of award: of the amount referred to in clause (c)
above means the monthly sum of the Rents under the Lease. Failure of Landlord
to declare any default immediately upon occurrence thereof, or delay in taking
any action in connection therewith, shall not waive such default, but Landlord
shall have the right to declare any such default at any time thereafter.
21. CONTINUATION AFTER DEFAULT.
Even though Tenant has defaulted the Lease and abandoned the Premises,
the Lease shall continue in effect as long as Landlord does not terminate
Tenant's right to possession, and Landlord may enforce all of its rights and
remedies under the Lease, including the right to recover the Rents as they
become due under the Lease. Act of maintenance or preservation or efforts to
relet the Premises or the appointment of a receiver upon initiative of Landlord
to protect Landlord's interest under the Lease shall not constitute a
termination of Tenant's right to possession. If any fixture, equipment,
improvement, installation or appurtenance shall be required to be removed from
the Premises and/or Building by Tenant, then Landlord (in addition to all other
rights and remedies) may, at its election by written notice to Tenant, deem
that the same has been abandoned by Tenant to Landlord, or Landlord may remove
and store the same and restore the Premises to its original condition at the
reasonable expense of Tenant, as Additional Rent to be paid within ten (10)
days after written notice to Tenant of such expense.
22. LANDLORD'S DEFAULT.
If Landlord fails to perform or observe any of its material Lease
obligations herein and such failure continues for thirty (30) days after
written notice from Tenant, or such additional time, if any, that is reasonable
necessary to promptly and diligently cure such failure after receiving written
notice, Landlord shall be in breach of the Lease (a "Default"). If Landlord
commits a Default, Tenant may pursue any remedies given in the Lease or under
law, including without limitation a termination of the Lease and return of all
deposits.
23. LANDLORD'S RIGHT TO CURE DEFAULTS.
All terms and provisions to be performed by Tenant under the Lease
shall be at Tenant's sole cost and expense and without any abatement of Rents.
If Tenant fails to pay any sum of money, other than Rents, required hereunder
or fails to perform any other act required hereunder and such
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failure continues for thirty (30) days after notice by Landlord, Landlord may,
but shall not be obligated, and without waiving or releasing Tenant from any
obligations of Tenant, make any such payment or perform any such act on
Tenant's part to be made or performed as provided in the Lease. All sums paid
by Landlord and all incidental costs shall be deemed Additional Rent hereunder
and shall be payable within ten (10) days after written notice of such sums
paid.
24. OTHER RELIEF.
The remedies provided for in the Lease are in addition to any other
remedies available to Landlord at law or in equity by statute or otherwise.
25. ATTORNEYS' FEES.
In the event either party places the enforcement of Lease, or any part
thereof, or the collection of any Rents, or recovery of the possession of the
Premises, or files suit upon the same, then the prevailing party shall recover
its reasonable attorneys' fees and costs.
26. EMINENT DOMAIN.
If all or any part of the Premises shall be taken or conveyed as a
result of the exercise of the power of eminent domain, the Lease shall
terminate as to the part so taken as of the date of taking, and, in the case of
a partial taking, either Landlord or Tenant shall have the right to terminate
the Lease as to the balance of the Premises by written notice to the other
within thirty (30) days after such date; provided, however, that a condition to
the exercise by Tenant of such right to terminate shall be that the portion of
the Premises taken or conveyed shall be of such extent and nature as
substantially to handicap, impede or impair Tenant's use of the balance of the
Premises. In the event of any taking, Landlord shall be entitled to any and
all compensation, damages, income, rent awards or any interest therein
whatsoever which may be paid or made in connection therewith, and Tenant shall
have no claim against Landlord for the value of any unexpired term of the Lease
or otherwise, provided that Tenant shall be entitled to any and all
compensation, damages, income, rent or awards paid for or on account of
Tenant's moving expenses, trade fixtures, equipment and any leasehold
improvements in the Premises, the cost of which was borne by Tenant, to the
extent of the then unamortized value of such improvements for the remaining
term of the Lease. In the event of a taking of the Premises which does not
result in a termination of Lease, the monthly rental herein shall be
apportioned as of the date of such taking so that thereafter the rent to be
paid by Tenant shall be in the ratio that the area of the Premises not so taken
bears to the total areas of the Premises prior to such taking.
27. SUBORDINATION, ATTORNMENT & NONDISTURBANCE; AND ESTOPPEL CERTIFICATE.
At Landlord's request, Tenant agrees to execute, acknowledge, and
deliver within ten (10) days to Landlord a Subordination, Attornment &
Nondisturbance Agreement ("Subordination Agreement"), subject to Landlord's
reasonably proposed form(s). Such Subordination agreement shall subordinate
the Lease to any ground lease, mortgage, deed of trust, or any other
hypothecation for security now or hereafter placed upon the Premises, Building
or common areas, or any part thereof, to any and all advances made on the
security, and to all renewals, modification,
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consolidations, replacements and extensions thereof, whether the Lease is dated
prior or subsequent to the date of said ground lease, mortgage, deed of trust
or other hypothecation or the date of recording thereof. Further, at
Landlord's request, Tenant agrees to execute, acknowledge, and deliver within
ten (10) days to Landlord an Estoppel Certificate, subject to Landlord's
reasonably proposed form(s). Such Subordination Agreement and Estoppel
Certificate may be relied upon by any prospective purchaser, mortgagee, or
beneficiary under any ground lease, mortgage, deed of trust, or any other
hypothecation of the Premises, Building, or common areas, or any part thereof.
Notwithstanding such Subordination Agreement, Tenant's right to quiet
possession of the Premises shall not be disturbed so long as Tenant is not in
default under the Lease, unless the Lease is otherwise terminated pursuant to
its terms.
In the event that Tenant fails to execute, acknowledge, and deliver to
Landlord such Subordination Agreement and Estoppel Certificate within ten (10)
days of Landlord's request, the parties herein expressly agree that Tenant
shall be deemed in default of the Lease without further notice. In such event,
the parties herein further expressly agree that the Subordination Agreement and
Estoppel Certificate are deemed to have been executed by Tenant.
28. NO MERGER.
The voluntary or other surrender of the Lease by Tenant, or a mutual
cancellation thereof, shall not work a merger, and shall, at the option of
Landlord terminate all or any existing subleases or subtenancies, or may, at
the option of Landlord, operate as an assignment to it of any or all such
subleases or subtenancies.
29. SALE.
In the event the original Landlord hereunder, or any successor owner of
the Premises, Building, and common areas shall sell or convey the Premises,
Building, and common areas, and the purchaser assumes the obligations of
Landlord under the Lease, all liabilities and obligation on the part of the
original Landlord, or such successor owner, under the Lease accruing after such
Sale shall terminate, and thereupon all such liabilities and obligations shall
be binding upon the new owner. Tenant agrees to attorn to such new owner.
30. NO LIGHT OR VIEW EASEMENT.
Any diminution or shutting off of light or view by any, structure
erected on lands adjacent to the Building shall in no way affect the Lease or
impose any liability on Landlord.
31. HOLDING OVER.
If, without objection by Landlord, Tenant holds possession of the
Premises after expiration of the Term or any Option period of the Lease, Tenant
shall become a tenant from month to month upon the terms herein specified, but
at a monthly Base Rent equivalent to 125% of the Base Rent at the end of the
term or extension period pursuant to Article 4, payable in advance on or before
the 1st day of each month. All Additional Rent shall also apply. Each party
shall give the other notice at least one month prior to the date of termination
of such monthly tenancy of its intention to terminate such tenancy.
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32. ABANDONMENT.
If Tenant shall abandon (as set forth in paragraph 19(f) of this
agreement) or surrender the Premises, or be dispossessed by process of law or
otherwise, any personal property belonging to Tenant and left on the Premises
shall be deemed to be abandoned, at the option of Landlord, except such
property as may be mortgaged to Landlord.
33. SECURITY DEPOSIT.
Tenant shall deposit with Landlord upon execution of the Lease a
security deposit in the amount of the last month's rent ($6,425+-) ("Security
Deposit"). The Security Deposit shall be held by Landlord as security for the
faithful performance by Tenant of all of the provisions of the Lease to be
performed or observed by Tenant. In the event Tenant fails to perform or
observe any of the provisions of the Lease to be performed or observed by it,
then, at the option of the Landlord, Landlord may (but shall not be obligated
to do so) apply the Security Deposit, or so much thereof as may be necessary to
remedy such default or to repair damages to the Premises caused by Tenant. In
the event Landlord applies any portion of the Security Deport to remedy any
such default or to repair damages to the Premises caused by Tenant, Tenant
shall pay to Landlord, within thirty (30) days after written demand for such
payment by Landlord, all monies necessary to restore the Security Deposit up to
the original amount. Any portions of the Security Deposit remaining upon
termination of the Lease shall be returned.
34. WAIVER.
All waivers by either party herein must be in writing and signed by
such party. The waiver of any term or conditions herein shall not be deemed to
be a waiver of any subsequent breach of the same or any other agreement,
condition or provision herein contained, not shall any custom or practice which
may grow upon between the parties in the administration of the terms hereof be
construed to waive or to lessen the right of either party to insist upon the
performance by the other party in strict accordance with said terms. The
subsequent acceptance of Rents hereunder by Landlord shall not be deemed to be
a waiver of any breach by Tenant of any term or condition of the Lease,
regardless of Landlord's knowledge of such breach at the time of acceptance of
such Rents.
35. NOTICES.
All notices and demands which may or are required to be given by either
party to the other under the Lease shall be in writing and shall be deemed to
have been fully given when deposited in the United States mail, certified or
registered, postage prepaid, and addressed as follows: to Tenant at 00000
Xxxxx Xxxxxxxxx Xxxx Xxxxx, Xxxxxx, XX 00000, Attn: Xxxxxxxx Xxxx, or to such
other place as Tenant may from time to time designate in a notice to Landlord
at Draper Land Partnership II, 00 Xxxx Xxxxxxxxx Xxxx Xxxxx, Xxxxxx, XX
00000, Attn: Xxx Xxxxxxxxx, or to such other place as Landlord may from time
to time designate in a notice to Tenant, or in the case of Tenant, delivered to
Tenant at the Premises. Tenant hereby appoints as its agent to receive the
service of all dispossessory or distraint proceedings and notices hereunder the
person in charge of or occupying
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the Premises at the time, and if no person shall be in charge of or occupying
the same, then service may be made by attaching same on the main entrance of
the Premises.
36. COMPLETE AGREEMENT.
There are no oral agreements between Landlord and Tenant affecting the
Lease, and the Lease supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings, if any, between
Landlord and Tenant with respect to the subject matter of the Lease. The Lease
may not be altered, changed or amended, except by an instrument in writing
signed by both parties hereto.
37. CORPORATE AUTHORITY.
The person(s) executing the Lease on behalf of the parties herein
hereby covenants and warrants that (a) such party is a duly authorized and
validly existing entity under the laws in which it was formed, (b) such party
has and is qualified to do business in Utah, (c) such entity has full right and
authority to enter into the Lease, and (d) each person executing the Lease on
behalf of such entity is authorized to do so.
38. GUARANTEE OF LEASE.
Tenant guarantees, upon execution of the Lease, to occupy the Premises.
Any failure to occupy the Premises does not release the Tenant from the
obligation of paying Rents or any other terms set forth herein.
39. MISCELLANEOUS.
(a) The words "Landlord" and "Tenant" as used herein shall include
the plural as well as the singular. If there be more than one Tenant, the
obligations hereunder imposed upon Tenant shall be joint and several.
(b) Time is of the essence on the Lease and each and all of its
terms and conditions.
(c) The terms and conditions herein shall apply to and bind the
heirs, executors, administrators, successors and assigns of the parties hereto.
(d) The captions of the Lease are solely to assist the parties and
are not a part of the terms or conditions of the Lease.
(e) The Lease shall be governed by and construed in accordance with
the laws of the State of Utah, and is deemed to be executed within the State of
Utah.
40. SEVERABILITY.
If any term provision of the Lease, or the application thereof to any
person or circumstance, shall to any extent be invalid or unenforceable, the
remainder of the Lease, or the application of such provision to persons or
circumstances other than those as to which it is invalid or unenforceable,
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shall not be affected thereby, and each provision of the Lease shall be valid
and shall be enforceable to the extent permitted by law.
41. BROKERS.
Landlord is represented by Prime Commercial, Inc. Agreed-upon
commissions shall be due and payable by Landlord upon execution.
42. PERFORMANCE DELIVERY.
In the event the Landlord does not deliver the premises substantially
complete on or before November 5, 1996, the Landlord will provide the Tenant
two (2) days free base rent for each day of delayed delivery. The Tenant
agrees to cooperate completely with the Landlord and agrees to make all
necessary decisions relating to the space completion promptly.
IN WITNESS WHEREOF, the parties have executed the Lease dated the day
and year first above written.
TENANT, LANDLORD,
1-800-LENS NOW, INC., DRAPER LAND PARTNERSHIP II
dba 1-800-CONTACTS
By: /s/ Xxxxxxxx Xxxx By: /s/ Xxx Xxxxxxxxx
---------------------------- --------------------------
Its: President Its: Partner
---------------------------- --------------------------
By: /s/ Xxxx X. Xxxxxxx
----------------------------
Its: Vice President
----------------------------
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FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE ("Amendment") dated this 24th day of
October, 1996, is entered into by and between DRAPER LAND PARTNERSHIP II,
L.C., a Utah Limited Liability Company ("Landlord"), and 1-800-LENS NOW, INC.,
dba 1-800 CONTACTS, a Utah corporation ("Tenant").
W I T N E S S E T H:
WHEREAS, the Landlord and Tenant entered into a Lease dated September 4,
1996, ("Lease") which is incorporated herein by reference:
WHEREAS, the parties hereto desire to amend certain terms and conditions
of the Lease as specifically indicated in this Amendment. However, unless
specifically amended herein, all terms and conditions of the Lease and 1st
Amendment remain in full force and effect:
NOW THEREFORE, in consideration of the mutual promises, representation
and covenants contained herein, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. The recitals contained herein are hereby incorporated by reference.
2. Article 1(a) shall be replaced in its entirety by the following:
1(a) Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, for the term and subject to the terms and conditions hereinafter set
forth, to each and all of which Landlord and Tenant hereby mutually agree,
those certain premises ("Premises"), highlighted on Exhibit A attached hereto,
which include approximately 6,319 Rentable square feet (approximately 5,582
Useable), as determined by final space plan. The location of the Premises and
related Building is commonly known as: 00000 Xxxxx Xxxxxxxxx Xxxx Xxxxx,
Xxxxxxxx #X, Xxxxx #000, Xxxxxx, XX 00000 (the "Building").
3. Article 4(a) shall be replaced in its entirety by the following:
4(a) Base Rent. Total Annual Base Rent (triple net - NNN) shall begin at
$61,061.28, (9.75 per Rentable sq. ft. X 6,319 sq. ft.), payable as follows:
$5,134.19 per month, payable in advance each month on or before the 1st day of
each month during the duration of the Lease, with the first and last such
monthly rental payments being due upon the execution of the Lease. Any partial
months shall be prorated accordingly. Base Rent under this Article will be
increased four (4%) percent annually during the Lease Term, and during any
Option Period (after adjustment to fair market value at beginning of any Option
period). Base Rent during the Term of the Lease or any option period shall
never decrease. All Base Rent and Additional Rent (collectively "Rents") shall
be paid as follows, unless otherwise directed in writing: Draper Land
Partnership II, L.C.; Attn: Xxx Xxxxxxxxx; 00 Xxxx Xxxxxxxxx Xx., Xxxxxx, XX
00000.
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IN WITNESS WHEREOF, the parties have executed this Lease dated the day and
year first above written.
TENANT, LANDLORD,
1-800-LENS NOW, INC., DRAPER LAND PARTNERSHIP II
dba 1-800-CONTACTS
By: /s/ Xxxxxxxx Xxxx By: /s/ Xxx Xxxxxxxxx
-------------------------- --------------------------
Xxx Xxxxxxxxx
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