Exhibit 10.3
LEASE AGREEMENT
---------------
THIS LEASE, made and entered into by and between Icon Health & Fitness,
Inc., a Delaware Corporation, hereinafter referred to as "Landlord", and
Teltrust, Inc., hereinafter referred to as "Tenant".
WITNESSETH:
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ARTICLE I
FUNDAMENTAL LEASE PROVISIONS
----------------------------
Commencement Date: March 24th, 1997
Landlord: Icon Health & Fitness, Inc.
Tenant: Teltrust, Inc.
Location of Premises: Section 2E and 2C and certain Xxxxx Xxxxx Xxxxx
0000 Xxxxx 0000 Xxxx
Xxxx Xxxx Xxxx, Xxxx
See Exhibit "A"
Initial Lease Term: 5 years See Article IV
Option to Renew Lease: (one) 5 year term See Article IV
Minimum Annual Rental: $565,546.44 (32,484 square feet
x $17.41/sq. foot)
See Article V
Tenant's Share of Basic
and Direct Expenses: 26.05% See Article VI
Tenant's Share of Common Insurance
Coverage: 26.05% See Article VI
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Address for Notices:
LANDLORD: TENANT:
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Icon Health & Fitness, Inc. Teltrust, Inc.
0000 Xxxxx 0000 Xxxx XXXX: Corporate Counsel
Xxxxx, Xxxx 00000 000 Xxxxx Xxxxxxx Xxxxxxxxx Xxxxx
ATTN: Xxxx X. Xxxxxxxx Xxxx Xxxx Xxxx, Xxxx 00000
References in this Article I to other articles and paragraphs thereof are
for convenience and designate some of the other articles, sections and
paragraphs thereof where references to the particular lease provisions appear.
Each reference in this Lease to any of the lease provisions contained in this
Article I shall be construed to incorporate all of the terms provided under each
such lease provision and the balance of the Lease.
ARTICLE II
EXHIBITS
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2.01 Exhibits. The following drawings and special provisions are attached
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hereto as exhibits and are made a part of this Lease:
Exhibit "A" - Site Plan and Legal Description
Exhibit "B" - Floor Plans
Exhibit "C" - Tenant's Certificate of Acceptance and Estoppel Certificate
ARTICLE III
PREMISES
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3.01 Premises. In consideration of the rents, covenants and agreements
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contained herein, Landlord leases to Tenant, and Tenant leases from Landlord a
space in a Building located at 0000 Xxxxx 0000 Xxxx, Xxxx Xxxx Xxxx, Xxxx,
together with 200 parking spaces in the adjacent parking lot. The space in the
Building which is the leased portion of the property is referred to herein as
the "Premises" and shall contain approximately 32,484 square feet, located on
floor level 2, Sections 2E and 2C and the 1st floor show room of the building as
cross hatched on EXHIBIT "B". The location, dimensions and approximate area
thereof are delineated in red on Exhibit "B", which is a Floor Plan of the
property. The foregoing notwithstanding, the Landlord expressly reserves any and
all easements across the Premises for access and utility lines which may be
necessary to the operation, maintenance or construction on the portions of the
property other than the Premises; provided such easement shall not unreasonably
disturb the Tenant's use of the Premises. The Landlord has also reserved certain
rights of access to the Premises as set forth in
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Section 11.05 which are not limited by the foregoing language. The term
"Building" shall refer to the entire building known as the HealthRider Building
located at 0000 Xxxxx 0000 Xxxx, Xxxx Xxxx Xxxx, Xxxx 00000. The term "Real
Property" or "Property" or "Land" shall refer to the Building and real property
described on Exhibit "A", the entire site, together with any and all
appurtenances, rights, privileges and easements pertaining thereto including but
not limited to the elevators, stairways, corridors, entranceways, rest rooms,
walkways, roadways, driveways, loading docks, cafeteria, fitness area, parking
facilities and other similar or related facilities as may exist in and about the
Building and Land (collectively "Common Areas").
ARTICLE IV
TERM & OPTION
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4.01 Commencement and Ending Date of Term. The initial term of this Lease
------------------------------------
shall be for five (5) years ("Term"). The commencement of the initial Term of
this Lease shall begin upon the first to occur of the following dates:
A. The date on which Tenant occupies the Premises and commences to install
Tenant's fixtures and improvements; or
B. The 24th of March, 1997.
The date which is applicable under the foregoing part of this Section 4.01
is hereinafter referred to as the "Commencement Date". The Term of this Lease
shall end at 6:00 p.m. on the last day of the 5th year following the Term
Commencement Date, subject to paragraph 4.02.
4.02 Option. Tenant shall have the option, exercised by no less than one
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hundred eighty (180) days prior written notice delivered to Landlord prior to
the expiration of the Term of this Lease, to renew this Lease for one additional
five (5) year period ("Renewal Term"), under the same terms and conditions
excepting the length of term and subject to rent adjustment as negotiated and
mutually agreed upon by Landlord and Tenant, prior to the date of notice
provided above, i.e., one hundred eighty (180) days prior to the expiration of
the term.
4.03 Tenant's Certificate. Tenant shall at Landlord's request made not
--------------------
more frequently than once each year and at Landlord's lender's request, execute
and deliver to Landlord a written declaration that shall be known hereafter as
Exhibit "C", which shall: (1) ratify this Lease; (2) express the Commencement
Date and termination date hereof; (3) certify that this Lease is in full force
and effect and has not been assigned, modified, supplemented or amended (except
by such writings as shall be stated); (4) state that all conditions under this
Lease to be performed by Landlord have been satisfied; (5) state that there are
no defenses or offsets against the enforcement of this Lease by the Landlord, or
stating those claimed by Tenant; (6) state the amount of advance rental if any,
(or none if such is the case) paid by Tenant; (7) state the date to which rental
has been paid;
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(8) state the amount of security deposited with Landlord; and (9) state such
other information as Landlord may reasonably request. Landlord's mortgage
lenders and/or purchasers shall be entitled to rely upon such declaration, and
Tenant will provide updated executed Certificates of Acceptance and Estoppel
Certificates as reasonably requested by Landlord throughout the Term and Renewal
Term, if exercised, of the Lease.
4.04 Effect of Failure to Provide Certificate. Tenant's failure to
----------------------------------------
furnish any Estoppel Certificate within twenty (20) days after request therefor
shall be deemed a default hereunder and moreover, it shall be conclusively
presumed that: (a) this Lease is in full force and effect without modification
in accordance with the terms set forth in the request; (b) that there are no
breaches or defaults on the part of the Landlord; and (c) no more than one (1)
month's rent has been paid in advance. Tenant shall be entitled to a ten (10)
day cure period, after written notice by Landlord, prior to being considered in
default under Section 4.04.
4.05 Option For Additional Space. Provided this Lease is in full force
---------------------------
and effect with no delinquencies or defalcations of any kind hereon, by the
Tenant, Tenant shall have and is hereby granted the first right to lease any
space which becomes available in the Building. Landlord shall endeavor to have
all future leases have no less than a 6-month notice of intent to vacate. Upon
Landlord's receipt of notice of intent to vacate or other notice that a lease
will terminate, Landlord shall within 15 days give written notice of the same to
Tenant. In the event Tenant elects to lease the additional space, it shall be on
the same square footage price as provided herein on the Premises plus any
percentage adjustment for Additional Rent. Notice exercising such option or
options shall be given to Landlord in writing not later than fifteen (15) days
after receipt of Landlord's notice of the availability of additional space.
ARTICLE V
RENT
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5.01 Monthly Rent. Tenant agrees to pay to Landlord at such place as
------------
Landlord may designate, without prior demand therefor and without any deduction
or setoff whatsoever, and as fixed minimum monthly rent, the sum of Forty-seven
Thousand One Hundred Twenty-eight and 87/100 Dollars ($47,128.87) in advance on
the 1st day of each calendar month during the Term and Renewal Term of the
Lease. The Landlord hereby waives rent for a period of forty-five (45) calendar
days after the Term Commencement Date. In the event the Commencement Date occurs
on a day other than the first day of the month, then rent shall be paid on the
Commencement Date for the initial fractional month prorated on a per diem basis
and the lease Term shall begin on the 1st day of the month following. Possession
will not be granted until the first fractional month or full month rent,
whichever the case may be, has been paid to and received by Landlord. Rent
during the Term shall be adjusted as follows:
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MONTHLY COMPUTATION OF
YEAR DATE BASE RENT MONTHLY BASE RENT
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1 Months 1-12 $47,128.87 $14.75 sq. ft. 118% for Common Area
=$17.41 Total
2 Months 13-24 $47,128.87 $14.75 sq. ft x 118% for Common Area
=$17.41 Total
3 Months 25-36 $47,128.87 $14.75 sq. ft 118% for Common Area
=$17.41 Total
4 Months 37-48 $48,999.95 $14.75 sq. ft 1.04%= $15.34 x 118%
for Common Area = $18.10 Total
5 Months 49-60 $50,469.95 $15.34 sq. ft x 1.03% = $15.80 x 118%
for Common Area = $18.644 Total
If the option for the Renewal Term is exercised, rent each year for the
renewal term will be as negotiated between the parties in paragraph 4.02.
5.02 Rent Adjustments. The monthly rent described in Section 5.01 shall be
----------------
increased for each year (during the Term hereof, including the Renewal Term),
effective the 1st day of the month following the completion of the third year
hereunder, as provided in Section 5.01.
5.03 Build Out Allowance. Landlord hereby grants Tenant a $2.00 per
-------------------
square foot "build out" allowance, useable by Tenant at any time during the
Lease Term and provided Landlord's prior written approval is obtained as
provided in Article XI, which approval cannot be unreasonably withheld. Any
unused portion of this allowance may at Tenant's discretion, be credited to the
Tenant in the form of rental abatement.
5.04 Security Deposit.
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A. Amount. The Tenant will either (i) deposit the sum of $188,515.48
------
(four months' rent) with Zions First National Bank in an interest bearing
account in the name of Xxxxx & Xxxxxx Trust Account or (ii) cause to be issued
an irrevocable, demand letter of credit in such amount and in form and substance
acceptable to Landlord for the benefit, use and payment to, if required, the
Landlord as a security deposit for the Subject Property which will be held by
Xxxxx & Xxxxxx at Zions First National Bank according to this Section 5.04. The
security deposit provided for in the preceding sentence will be increased, in
the event Tenant leases additional space within the Building, to equal the sum
of four (4) month's rents for all space leased by Tenant within the Building.
B. Non-Payment. The above deposit shall be held as above provided as
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security for the faithful performance by the Tenant, of all of the terms,
conditions and covenants of this Agreement, which are to be kept and performed
by the Tenant during the Term and Renewal Term hereof. If at
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any time during the term of this Agreement, any of the lease payments herein
reserved shall be overdue and unpaid, or any other sum payable by Tenant to
Landlord hereunder shall be overdue and unpaid, then Landlord may, at its
option (but Landlord shall not be required to), appropriate and apply any
portion of said deposit, or in the case of a letter of credit draw upon that
letter of credit. to the payment of any such overdue lease payments or other
sums.
C. Other Default. In the event of the failure by Tenant to keep and
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perform any of the terms, covenants and conditions of this Agreement to be kept
and performed by Tenant, then Landlord, at its option, may appropriate and apply
the entire deposit, or so much thereof as may be necessary, to compensate
Landlord for loss or damage sustained or suffered by Landlord, due to such
breach on the part of Tenant. Should the entire deposit, or any portion thereof,
be appropriated and applied by Landlord for the payment of overdue lease
payments or other sums due and payable to Landlord, by Tenant hereunder, then
Tenant shall, upon the written demand of Landlord, forthwith remit to Landlord a
sufficient amount, in cash, to restore said security to the original sum
deposited, and Tenant's failure to do so within ten (10) days after receipt of
such demand shall constitute a breach of this Agreement. Should Tenant properly
comply with all of said terms, covenants and conditions, and properly comply
with all of the lease payments herein provided for, as they fall due, and all
other sums payable by Tenant to Landlord hereunder, the said deposit or the
remaining portion thereof shall be returned in full to Tenant at the end of this
Agreement, or upon the earlier termination of this Agreement.
D. Disposition Upon Sale. Landlord may deliver the funds deposited
---------------------
hereunder by Tenant to the purchaser of Landlord's interest in the Subject
Property, in the event that such interest be sold, and thereupon Landlord shall
be discharged from any further liability with respect to such deposit.
E. Reduction of Security Deposit. In the event Tenant completes two (2)
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consecutive quarters in which Tenant verifies to Landlord, through the delivery
of Tenant's quarterly financial statements, prepared in accordance with
generally accepted accounting principles, along with Tenant's certification
thereof, that Tenant has earnings reflecting an annualized income of not less
than $600,000 (before taxes), the security deposit reflected in subparagraph
5.04.A., above, shall be reduced to an amount equal to one (1) month's rent.
Thereafter and in the event Tenant's annualized income, based upon two (2)
consecutive fiscal quarters' performance, appears that Tenant's annualized
income (before taxes) is less than $600,000, the security deposit provided for
under this Section 5.04 shall be again increased to the amount specified in
subsection 5.04.A., above. Tenant shall deliver to Landlord quarterly financial
statements, accompanied by Tenant's certification thereof to the effect that
said financial statements are true, correct and complete, for each of Tenant's
fiscal quarters during the term hereof, beginning with the reduction of the
security deposit as provided in the first sentence of this subsection 5.04.E.
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ARTICLE VI
ADDITIONAL RENT
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6.01 Additional Rent. Subject to paragraph 6.04, the rent specified
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shall be absolutely net to Landlord throughout the Term and Renewal Term of this
Lease, and all costs, expenses and obligations of every kind relating to the
Premises, the Building, and Property, on a pro rata or percentage basis and as
more particularly defined hereafter, including all common areas and parking
which may arise or become due during the Term and Renewal Term shall be paid by
Tenant, and that Landlord shall be indemnified by Tenant against such costs,
expenses and obligations. Tenant shall pay as additional rent, without demand
therefore and without setoff or deduction, the expenses and charges set out in
Sections 6.02 through 6.04 below. When used in this Lease, the term
"Proportionate Share" of Tenant shall mean and shall be 26.05%, (which is also
the percentage the Tenant agrees to pay on all common area and insurance charges
and expenses and taxes as well) of the total expense or charge in question.
6.02 Definitions. For purposes of this Article VI and the Lease in
-----------
general, the following words and phrases shall have the meanings set forth
below:
A. "Basic Costs" shall mean all actual costs and expenses incurred by
Landlord in connection with the ownership, operation, management and maintenance
of the Building and Property and related improvements located thereon (the
"Improvements"), including, but not limited to, all expenses incurred by
Landlord as a result of Landlord's compliance with any and all of its
obligations under this Lease. In explanation of the foregoing, and not in
limitation thereof, Basic Costs shall include: all utilities (calculated based
upon Tenant's twenty-four (24) hours per day/seven (7) days per week occupancy,
as agreed by Landlord and Tenant, or if no agreement, as determined by an
independent expert selected by Landlord), heating, air conditioning,
ventilation, water, gas, sewer, electricity, real and personal property taxes
and assessments (whether general or special, known or unknown, foreseen or
unforeseen) and any tax or assessment levied or charged in lieu thereof, whether
assessed against Landlord and/or Tenant and whether collected from Landlord
and/or Tenant; snow removal, trash removal, cost of equipment or devices used to
conserve or monitor energy consumption, supplies, insurance, license, repair and
replacement of the building's on-site back up generator, regular maintenance of
HVAC equipment and systems, permit and inspection fees, cost of services of
independent contractors, costs of compensation (including employment taxes and
fringe benefits) of all persons who perform regular and recurring duties
connected with day-to-day operation, maintenance, repair, and replacement of the
Building, its equipment and the adjacent walk, and landscaped area (including,
but not limited to janitorial. gardening, security, parking, elevator, painting,
plumbing, electrical, mechanical, carpentry, window washing, structural and roof
repairs and reserves, signing and advertising), and rental expense or a
reasonable allowance for depreciation of personal property used in the
maintenance, operation and repair of the Building and Common areas. Basic Costs
shall not include those costs identified in Article 6.04, nor "Direct Costs" as
defined in Article 6.02(B).
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B. "Direct Costs" shall mean all actual costs and expense incurred by
Landlord in connection with the operation, management, maintenance, replacement,
and repair of tenants' Premises, including but not limited to janitorial
services, maintenance, repairs, supplies, capital improvements (except as
provided in paragraphs 6.03B(j) and 6.03B(k)).
C. "Estimated Costs" shall mean the estimated amount of Tenant's Direct
Costs and Basic Costs, excluding the costs of electricity provided to Tenant's
Premises, if separately metered.
6.03 Report of Basic Costs and Statement of Estimated Cost.
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A. After the expiration of each calendar year occurring during the term
of this Lease, Landlord shall furnish Tenant a written statement of Tenant's
Share of Basic Costs and Tenant's Direct Costs occurring during the previous
calendar year. The written statement shall specify the amount by which Tenant's
Direct Costs and Basic Costs exceed or are less than the amounts paid by Tenant
during the previous calendar year pursuant to Section 6.04(A) below.
B. At the same time specified in paragraph 6.03(A) above, Landlord shall
furnish Tenant a written statement of the Costs. Direct Costs and Basic Costs
chargeable to Tenant shall exclude the following costs and expenses:
(a) Leasing commissions, lease takeover obligations, and other
inducements, costs, disbursements and expenses incurred in connection with
leasing or subleasing space in the Building;
(b) Payments of principal, interest and other costs relating to mortgages
or deeds of trust or any other debt for borrowed money;
(c) Advertising and marketing costs and expenses.
(d) Rent and other payments pursuant to any ground or underlying leases;
(e) Depreciation, except as expressly provided herein, and amortization;
(f) Legal fees, costs and disbursements based upon, or resulting from
Landlord's negligence or other tortious conduct, or relating to the defense of
Landlord's title to or interest in the Property or Building;
(g) Costs incurred to test, survey, cleanup, contain, xxxxx, remove or
otherwise remedy Hazardous Substances (as hereinafter defined) or asbestos
containing materials, provided Tenant has not permitted or caused the same to be
placed on or released in the Property;
(h) Costs incurred by Landlord to the extent that Landlord is reimbursed
by governmental agencies or entities;
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(i) Landlord's general corporate overhead and administrative expenses,
wages, salaries and fees of officers, including accounting fees;
(j) Capital improvements solely for the benefit of other Tenants;
(k) The cost of capital improvements for the period (useful life)
exceeding the Term and Renewal Term; and
(1) Services related to the management of the Property (Tenant's portion
is not to exceed the product of .03 multiplied by the .2605 multiplied by annual
gross rents).
6.04 Payment of Additional Rent. Tenant shall pay as additional rent
--------------------------
("Additional Rent") Tenant's Direct Costs and Tenant's Basic Costs. The
Additional Rent shall be paid as follows:
A. With each monthly payment of Basic Annual Rent due pursuant to
Section 3.1 above, Tenant shall pay to Landlord, without offset or deduction,
one-twelth (1/12th) of the Estimated Costs as defined in Section 6.02 C.
B. Within thirty (30) days after delivery of the written statement
referred to in Section 6.03 A above, Tenant shall pay to Landlord the amount by
which Tenant's Direct Costs and Basic Costs, as specified in such written
statements, exceed the aggregate of Estimated Costs actually paid by Tenant for
the year at issue. Tenant shall have the right to audit Landlord's books upon
sixty (60) days notice. Tenant shall pay costs associated with the audit unless
Tenant finds that Landlord has inflated expenses by more than three percent
(3%), in which case, Landlord will pay audit charges. Payments by Tenant shall
be made pursuant to this Section 6.04B notwithstanding that a statement pursuant
to Section 6.03 A is furnished to Tenant after the expiration of the Term or
Renewal Term of this Lease. Any overpayment by Tenant shall be promptly refunded
to Tenant.
C. If the annual statement of costs indicates that the Estimated Costs
paid by Tenant pursuant to subparagraph (B) above for any year exceed Tenant's
actual Direct Costs and Basic Costs for the same year, Landlord, at its
election, shall either (i) promptly pay the amount of such excess to Tenant, or
(ii) apply such excess against the next installment of Basic Annual Rental or
Additional Rent due hereunder. Notice of such intent shall be delivered to
Tenant not less than 15 days prior to the next installment of basic annual or
Additional Rent.
6.05 Resolution of Disagreement. Every statement given by Landlord
--------------------------
pursuant to Section 6.03 shall be conclusive and binding upon Tenant unless
within forty-five (45) days after the receipt of such statement Tenant shall
notify Landlord that it disputes the correctness thereof, specifying the
particular respects in which the statement is claimed to be incorrect. If such
dispute shall not have been settled by agreement, the parties hereto shall
submit the dispute to mediation within one hundred twenty (120) days after
Tenant's receipt of statement. Pending the determination of such dispute by
agreement or mediation as aforesaid, Tenant shall, within one hundred twenty
10
(120) days after receipt statement, and such payment shall be without prejudice
to Tenant's position. Mediation shall be conducted in Salt Lake City in
accordance with the Commercial Mediation Rules of the American Arbitration
Association. If the dispute shall be determined in Tenant's favor, Landlord
shall forthwith pay Tenant the amount of Tenant's overpayment of rents resulting
from compliance with Landlord's statement, including interest on disputed
amounts at eighteen percent (18%) per annum. Landlord agrees to grant Tenant
reasonable access to Landlord's books and records for the purpose of verifying
operating expenses, and costs incurred by Landlord.
6.06 Limitations. Nothing contained in this Part VI shall be construed at
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any time so as to reduce the monthly installments of Basic Annual Rent payable
hereunder below the amount set forth in Section 5.01 of this Lease.
ARTICLE VII
7.01 Past Due Sums: Penalty. If Tenant fails to pay, when the same is due
----------------------
and payable, or within ten (10) days thereafter, any Basic Rent, Additional
Rent, or other sum required to be paid by it hereunder, such unpaid amounts
shall bear interest from the due date thereof to the date of payment at eighteen
percent (18%) per annum. In addition thereto, Tenant shall pay a sum of five
percent (5%) of such unpaid amounts as a service fee. Notwithstanding the
foregoing, however, Landlord's right concerning such interest and service fee
shall be limited by the maximum amount which may properly be charged by Landlord
for such purposes under applicable law.
ARTICLE VIII
USE
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8.01 Use of Premises. The Premises shall be used and occupied by Tenant
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for general office, telecommunication or call center purposes only and for no
other purpose whatsoever without the prior written consent of Landlord, which
consent cannot be unreasonably withheld.
8.02 Quiet Enjoyment. Landlord covenants and agrees that Tenant, so long
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as it shall not be in default hereunder beyond any applicable grace period,
shall and may, at all times during the term, peaceably and quietly have, hold,
occupy and enjoy the Premises pursuant to the terms of this Lease.
8.03 Prohibition of Certain Activities or Uses. The Tenant shall not do or
-----------------------------------------
permit anything to be done in or about, or bring or keep anything in the
Premises which is prohibited by this Lease or will, in any way or to any extent:
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A. Adversely affect any fire, liability or other insurance policy
carried with respect to the Building, the Improvements or any of the contents of
the Building (except with Landlord's express written permission, which will not
be unreasonably withheld, but which may be contingent upon Tenant's agreement to
bear any additional costs, expenses or liability for risk that may be involved).
B. Conflict with or violate any law, statute, ordinance, rule,
regulation or requirement of any governmental unit, agency or authority (whether
existing or enacted as promulgated in the future, known or unknown, foreseen or
unforeseen).
C. Adversely overload the floors or otherwise damage the structural
soundness of the Premises or Building, or any part thereof (except with
Landlord's express written permission, which will not be unreasonably withheld,
but which may be contingent upon Tenant's agreement to bear any additional
costs, expense or liability for risk that may be involved).
8.04 Affirmative Obligations with Respect to Use.
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A. Tenant will keep the Premises and every part thereof in a clean,
neat, and orderly condition, free of objectionable noise, odors, or nuisances,
will in all respects and at all times fully comply with all health and policy
regulations, and will not suffer, permit, or commit any waste.
B. As to the Premises only, at all times during the Term or Renewal Term
hereof, Tenant shall, at Tenant's sole cost and expense, provided the premises
are currently in compliance with all ADA rules and regulations, comply with all
statutes, ordinances, laws, orders, rules, regulations and requirements of all
applicable federal, state, county, municipal and other agencies or authorities,
now in effect or which may hereafter become effective, which shall impose any
duty upon Landlord or Tenant with respect to the use, occupation or alterations
of the Premises (including, without limitation, all applicable requirements of
the Americans with Disabilities Act of 1990 and all other applicable laws
relating to people with disabilities, and all rules and regulations which may be
promulgated thereunder from time to time and whether relating to barrier
removal, providing auxiliary aids and services or otherwise) and upon request of
Landlord shall deliver evidence thereof to Landlord.
8.05 Suitability. Tenant acknowledges that except as expressly set forth
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in this Lease, neither Landlord nor any other person has made any representation
or warranty with respect to the Premises or any other portion of the Building,
and that no representation has been made or relied on with respect to the
suitability of the Premises or any other portion of the Building or Improvements
for the conduct of Tenant's business. The Premises, Building and Improvements
(and each and every part thereof) shall be deemed to be in satisfactory
condition by Tenant's taking possession thereof.
8.06 Taxes. Tenant shall pay all taxes, assessments, charges, and fees
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which during the Term and Renewal Term, if any, hereof may be imposed, assessed
or levied by any governmental
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or public authority against or upon Tenant's use of the Premises or any personal
property or fixtures kept or installed therein by Tenant.
ARTICLE IX
UTILITIES AND SERVICES
----------------------
9.01 Tenant's Obligations. Tenant shall arrange for and shall pay the
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entire cost and expense, for installation and operation, of all telephone
stations, equipment and use charges, light bulbs in the Premises and all other
materials and services not expressly required to be provided and paid for by
Landlord hereunder.
9.02 Additional Limitations. If and where heat generating machines or
----------------------
devices are used (other than equipment/devices used in areas as and where
originally intended and designed) in the Premises which affect the temperature
otherwise maintained by the air conditioning system, Landlord reserves the right
with Tenant's concurrence to install additional or supplementary air
conditioning units for the Premises, and the entire costs of installing,
operating, maintaining and repairing the same shall be paid by Tenant to
Landlord promptly after demand by Landlord.
9.03 Limitation on Landlord's Liability. Landlord shall not be liable for
----------------------------------
and Tenant shall not be entitled to terminate this Lease or to effectuate any
abatement or reduction of rent by reason of (i) Landlord's failure to provide or
furnish or (ii) the interruption of any utilities or services if such failure
was not the direct result of Landlord's negligent acts or omissions. In no event
shall Landlord be liable for loss or injury to persons or property, however,
arising or occurring in connection with or attributable to any failure to
furnish such utilities or services even if within the control of Landlord,
provided such loss or injury to persons or property is not due to the fault or
negligence of Landlord.
9.04 "As Is" Regarding Certain Utilities. Landlord has advised Tenant that
----------------------------------
certain telephone switching equipment, computer equipment and systems and
utilities require joint use and access and cannot in some cases be separately
metered. Landlord reserves those easements reasonably necessary to provide the
services and facilities as provided in this Lease and in leases to other
Tenants. Such areas containing telephone switching equipment, computer equipment
and systems and utilities (with the exception of telephone switch equipment,
computer equipment and systems and utilities installed and maintained by Tenant
at its own expense) are considered common areas for purposes of computing
proportionate expenses, and may be reasonably adjusted based upon estimated use
by each Tenant.
9.05 Services. Landlord shall provide the following services: (i) hot and
--------
cold water and lavatory supplies; (ii) automatically operated elevator service;
(iii) janitorial services Monday through Friday of each week, except on
Holidays; and (iv) heat and air-conditioning in season, 24 hours per day, 365
days per year, subject to reasonable maintenance and repair as needed. All of
the
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foregoing are to be provided so as to provide a reasonably habitable and
suitable working environment for Tenant. Tenant shall have the option of
securing its own janitorial services, at its sole expense, so long as such
services are performed in accordance with the same care and diligence otherwise
required by Landlord.
ARTICLE X
SIGNS
-----
10.01 Signs. Any exterior signage and interior signage to be visible from
-----
tile exterior installed by Tenant shall first be approved by Landlord, which
approval shall not be unreasonably withheld. Tenant shall submit to the Landlord
drawings of all proposed signs indicating the size, type (electric, neon,
painted, etc.), coloring and location, and shall not install any sign unless and
until the sign is approved by the Landlord and, where necessary, by any
governmental entity having jurisdiction. Approval of the design, function or
location of any sign which is required to be obtained from a governmental agency
shall be obtained at the sole cost and expense of Tenant. Any and all signs
shall be installed by Tenant in a manner which is in keeping with tile
architectural, aesthetic design and layout of the Building. Tenant may install
monument signage at tile front of the Property in compliance with this
paragraphs and with Landlord's approval. All installation work and cost of signs
shall be paid for by the Tenant. For all purposes under this Agreement, the
terms "sign" or "signs" include any lettering, symbol, logo, trademark, poster,
decoration, advertising matter, awning, marquee, canopy, or similar item used to
attract attention placed upon tile outside of the building in which the Premises
are located, on the glass of windows, tile outside of doors, awnings, canopies,
or any similar item which may otherwise be visible from tile outside of tile
Building in which the Premises are located.
ARTICLE XI
MAINTENANCE AND REPAIRS: ALTERATIONS: ACCESS.
--------------------------------------------
11.01 Maintenance and Repairs by Landlord. Landlord shall maintain in good
-----------------------------------
order, condition and repair the structural components of the Premises, including
without limitation roof, exterior walls and foundations, as well as all repairs
covered under construction warranties provided, if any. Except for the generator
and IWAC such maintenance and repairs shall be chargeable to Tenant's
proportionate share as Basic Costs and Additional Rent. If Landlord is required
to make structural repairs by reason of Tenant's negligent act or omissions,
Tenant shall pay Landlord's costs for making such repairs.
11.02 Maintenance and Repairs by Tenant. Tenant, at Tenant's sole cost and
---------------------------------
expense and without prior demand being made, shall maintain the Premises in good
order, condition and repair. Tenant shall maintain all equipment and fixtures
installed by Tenant. If repainting or
14
recarpeting is required and authorized by Landlord, the cost for such are the
sole obligation of Tenant and shall be paid for by Tenant following the
performance of said work and a presentation of an invoice for payment which
invoices shall be paid by Tenant as and when due.
11.03 Alterations. Tenant shall not make or cause to be made any
-----------
alterations, additions or improvements or install or cause to be installed any
fixtures, signs, floor coverings, interior or exterior lighting, plumbing
fixtures, or shades or awnings, or make any other changes to the Premises
without first obtaining Landlord's written approval, which approval shall not be
unreasonably withheld. Tenant shall present to the Landlord plans and
specifications for such work at the time approval is sought. In the event
Landlord consents to the making of any alterations, additions, or improvements
to the Premises by Tenant, the same shall be made by Tenant at Tenant's sole
cost and expense. All such work with respect to any alterations, additions, and
changes shall be done in a good and workmanlike manner and diligently prosecuted
to completion. Any such alternations, additions, or changes shall be performed
and done strictly in accordance with all laws and ordinances relating thereto.
In performing the work or any such alterations, additions, or changes, Tenant
shall have the same performed in such a manner as not to obstruct access to any
portion of the Building. Any alterations, additions, or improvements to or of
the Premises, including, but not limited to, wallcovering, paneling, and built-
in cabinet work, but excepting movable furniture and equipment, shall at once
become a part of the realty and shall be surrendered with the Premises unless
Landlord otherwise elects at the end of the term hereof. No change or alteration
shall weaken, either temporarily or permanently, the structure of the Building
nor when completed, shall be of such character as to (1) affect adversely the
value of the Premises or Land; (2) reduce the cubic content of the Building; or
(3) diminish the general utility of the Premises.
11.04 Changes to Property. Landlord hereby reserves the right at any time
-------------------
to make changes, alterations or additions, including the building and leasing of
additional space, in or on the Building or anywhere on the Land shown on Exhibit
"A" except in the actual space constituting the Premises. Tenant shall not, in
such event, claim or be allowed any damages or right to terminate this Lease for
injury or inconvenience occasioned thereby, provided Tenant's use of the
Premises and Common Areas is not interfered with in an unreasonable manner.
11.05 Landlord's Access to Premises. Landlord shall have the right to
-----------------------------
place, maintain, and repair all utility equipment of any kind in, upon, and
under the Premises as may be necessary for the servicing of the Premises and
other portions of the Building. 'Landlord shall upon providing reasonable and
adequate notice to Tenant, also have the right to enter the Premises at all
times to inspect or to exhibit the same to prospective purchasers, mortgagees,
tenants, and lessees, and to make necessary repairs, additions, alterations or
improvements. During the six (6) months prior to expiration of this Lease or of
any Renewal Term, Landlord may place upon the Premises "For Lease" or "For Sale"
signs which Tenant shall permit to remain thereon.
11.06 No Maintenance by Landlord. Landlord shall have no maintenance
--------------------------
obligation and shall incur no costs, whatsoever, with respect to the Premises
and areas designated for maintenance by Tenant.
15
11.07 Landlord's Right to Cure. If Tenant refuses or neglects to repair or
------------------------
maintain property as required hereunder to the reasonable satisfaction of
Landlord as soon as reasonably possible after written demand, Landlord may make
such repairs without liability on its part to Tenant for any loss or damage that
may accrue to Tenant's business by reason thereof, and upon completion thereof,
Tenant shall pay Landlord's costs for making such repairs plus fifteen percent
(15%) for overhead, immediately upon presentation of a xxxx therefor. Failure of
Tenant to pay such amount immediately shall constitute a default by Tenant
hereunder.
ARTICLE XII
MECHANIC'S LIEN
---------------
12.01 Mechanic's Lien. Tenant shall not allow any mechanic's or other lien
---------------
to be filed against the Premises. Should any mechanic's or other lien be filed
against the Premises or any part thereof by reason of Tenant's acts or omissions
or because of a claim against Tenant, Tenant shall cause the same to be canceled
and discharged of record by bond or otherwise within thirty (30) days after
notice by Landlord.
ARTICLE XIII
ASSIGNMENT AND SUBLETTING
-------------------------
13.01 No Assignment or Subletting by Tenant. Tenant may not assign or in
-------------------------------------
any manner transfer this Lease or any interest, nor sublet nor re-let the
Premises or any part or parts, nor permit occupancy by anyone with, through or
under it, without the prior written consent of Landlord, which consent shall not
be unreasonably withheld. Consent by Landlord to one or more assignments or to
one or more subletting or re-lettings shall not operate as a waiver of
Landlord's right to refuse its consent to any subsequent assignment or
subletting or re-letting, nor release Tenant from any of its obligations nor be
construed as a waiver of any of the Landlord's rights or remedies hereunder. Any
assignment or subletting which in the Landlord's reasonable discretion shall
limit or reduce the price of space or hinder in any way the ability to lease
other space in the Building shall be adequate cause to refuse consent to the
assignment or subletting. Such prohibition against assigning or subletting shall
include any assignment or subletting by operation of law, any corporate
restructuring or reorganization. Any transfer of this Lease from the Tenant by
merger, consolidation, transfer of assets, or liquidation of this Lease from the
Tenant by merger, consolidation, transfer of assets, or liquidation shall
constitute an assignment for purposes of this Lease. In the event that Tenant
hereunder is a corporation, the transfer, assignment, or hypothecation of any
stock or interest in such corporation, in the aggregate in excess of forty-nine
percent (49%) shall be deemed an assignment within the meaning of this Section.
It is contemplated that Landlord will consent to an assignment by Tenant to
wholly owned or controlled subsidiaries or affiliates. Any assignment will also
be subject to approval of Landlord's lenders, if and when required. It is
contemplated that transfers of
16
ownership of stock in Tenant that do not affect Tenant's credit or otherwise
negatively impact Tenant's ability to comply with Lease, will be approved by
Landlord. The above prohibition of assignment will not apply in the case of a
registered offering of shares by Tenant or the public trading of registered
shares subsequent to an initial offering.
13.02 Consent Required. Any assignment or subletting without Landlord's
----------------
consent shall be void, and shall constitute a default hereunder which, at the
option of Landlord, shall result in the termination of this Lease or exercise of
Landlord's other remedies hereunder. Landlord's consent cannot be unreasonably
withheld.
13.03 Landlord's Right in Event of Assignment. If this Lease is assigned
---------------------------------------
or if the Premises or any portion thereof are sublet or occupied by any person
other than the Tenant, Landlord may collect rent and other charges from such
assignee or other party, and apply the amount collected to the rent and other
charges reserved hereunder, but such collection shall not constitute consent or
waiver of the necessity of consent to such assignment, subleasing, or other
transfer, nor shall such collection constitute the recognition of such assignee,
sublessee, or other party as the Tenant hereunder or a release of Tenant from
the further performance of all of the covenants and obligations, including
obligation to pay rent, of Tenant herein contained. In the event that Landlord
shall consent to a sublease or assignment hereunder, Tenant shall pay to
Landlord reasonable fees, not to exceed $1,000.00, incurred in connection with
processing of documents necessary to the giving of such consent.
13.04 Assignment by Landlord. Landlord may assign or pledge its interest
----------------------
in this Lease without limitation, provided any such assignment or pledge shall
not release Landlord from any of its duties, responsibilities or obligations
herein.
ARTICLE XIV
COMMON AREAS
------------
14.01 Common Areas. Landlord reserves the right to change the entrances,
------------
exits, traffic lanes, and the boundaries and locations of such parking area or
areas within the Property so long as such changes do not unreasonably interfere
with Tenant's use of the Premises.
A. The Landlord shall keep automobile parking and Common Areas for which it
is responsible in a neat, clean and orderly condition, properly lighted and
landscaped, and shall repair any damage to the facilities, but all expenses in
connection with said automobile parking and common areas for which it is
responsible shall be charged and pro-rated in the manner set forth. The "Common
Area operating cost" means the total cost and expense incurred in operating and
maintaining the Common Areas for which it is responsible (whether or not such
cost or expense is considered a capital charge), specifically including, without
limitation, the costs and expenses for: supplies, utilities for lighting and
cleaning the Common Areas, and enclosed Common Areas of the
17
Building, providing a fire protection water loop and watering vegetation;
personal property taxes and assessments on the Common Area and equipment; real
property taxes and assessments on the Land and Improvements comprising the
Common Areas (to the extent not included in Article VI); premiums for fire and
extended coverage, vandalism and malicious mischief, boiler and plate-glass
insurance on Common Area improvements and for Landlord's public liability
insurance covering Landlord's activities on the Common Areas; maintenance,
repair and replacement of Common Area pavement, asphalt, sidewalks, walls,
fences, curbs and bumpers, Building and directional signs, fire protection
systems and alarms and electrical, mechanical and communication equipment;
repair, maintenance, and cleaning of Common Areas of Building structural
components or related facilities, including without limitation, drainage
systems, building exteriors, permanent art objects, light poles, fountains, and
benches; periodic painting, cleaning and repair of skylights and roofing; rental
payments for any supplemental parking areas; gardening and the maintenance and
replacement of landscaping and irrigation systems; striping and line painting,
sweeping, sanitary and flood control; removal of snow, ice, trash, rubbish,
garbage, and other refuse; cleaning, repair and replacement of lighting fixtures
including bulbs and ballasts, depreciation on, or rentals for, machinery and
equipment used in such maintenance; the cost of security guards, if such are
provided; the cost of personnel (including salaries, uniforms, workmen's
compensation insurance, group insurance, fidelity bonds and other fringe
benefits) to implement such services, to direct parking, and to police the
Common Areas and Building; repair of all utility lines; fees for required
licenses and permits relating to the operation of parking areas. Landlord may
cause any or all of the Common Area maintenance to be provided by a janitorial
or landscaping service or other independent contractor(s). Landlord shall incur
no expense in connection with areas for which Tenant is responsible for
operation and maintenance and this paragraph refers to all other common areas,
but in the event Landlord should incur any expense in connection with any area
for which Tenant is responsible to operate and maintain, such expense shall be
solely charged to Tenant. Expenses incurred for the benefit of all common areas
shall be charged and paid as provided in paragraph 6.02 C. Repairs, maintenance
and replacement of heating, ventilating and cooling (HVAC) are not Direct Costs
to be apportioned as Additional Rent payable by Tenant.
B. Tenant's proportionate share of all common area expenses shall be
26.05%.
C. Tenant, for the use and benefit of Tenant, its agents, employees,
customers, licensees and subtenants, shall have the non-exclusive right in
common with Landlord, and other present and future owners, tenants and their
agents, employees, customers, licensees and subtenants, to use said common and
parking areas at no additional charge during the entire Term and Renewal Term of
this Lease, or any extension, for ingress and egress, roadway, sidewalk and
automobile parking.
D. The Tenant, in the use of said common and parking areas, agrees to
comply with such reasonable rules and regulations as the Landlord may adopt from
time to time for the orderly and proper operation of said common and parking
areas. Such rules will be administered equitably among all tenants within the
Premises and may include but not be limited to the following:
18
(1) The restricting of employee parking to a reasonably limited,
designated area or areas, provided not less than 200 spaces are available
to Tenant; or
(2) The regulation of the removal, storage and disposal of Tenant's
refuse and other rubbish at the sole cost and expense of Tenant.
ARTICLE XV
INDEMNITY
---------
15.01 Except if and to the extent that such party is released from
liability to the other party hereto pursuant to the provisions of subparagraph
(C) below:
A. Landlord does hereby assume liability for, and does hereby agree to
indemnify, protect, defend, save and hold harmless Tenant, its officers,
directors, agents and employees, from and against any and all liabilities,
obligations, claims, actions, demands, fines, suits, judgments, penalties,
damages and losses (including all of the costs, fees and expenses connected
therewith or incident thereto) for death of or injury to any person whomsoever
(including loss of use thereof) arising out of the breach of any of the terms,
conditions or provisions of this Lease by, and /or the negligent or willful act
or omission of Landlord, its officers, partners, employees, agents or
contractors; and
B. Tenant does hereby assume liability for, and does hereby agree to
indemnify, protect, defend, save and hold harmless Landlord, its officers,
directors, agents and employees, from and against any and all liabilities,
obligations, claims, actions, demands, fines, suits, judgments, penalties,
damages and losses (including all of the costs, fees and expenses connected
therewith or incident thereto) for death of or injury to any person whomsoever
and for loss of, damage to, or destruction of any property whatsoever (including
loss of use thereof) arising out of the breach of any of the terms, conditions
or provisions of this Lease by, and/or the negligent or willful act or omission
of Tenant, its officers, employees, agents or contractors as they relate to
Tenant's use and/or occupancy of the Premises.
C. Neither Landlord nor Tenant shall be liable to the other or to any
insurance company insuring the other party (by way of subrogation or otherwise)
for any loss or damage to any structure, building, or other tangible property,
or any resulting loss of income, even though such damage or loss might have been
occasioned by the negligence of Landlord or Tenant or any of their agents or
employees, if any such loss or damage is covered by insurance benefiting the
party suffering such loss or damage or was required of such party to be covered
by insurance pursuant to this Lease.
19
ARTICLE XVI
INSURANCE
---------
16.01 Common Area Fire. Casualty and General Liability Insurance. Landlord
----------------------------------------------------------
shall procure and Tenant shall pay its Proportionate Share of the cost of
insurance insuring the Landlord against loss or damage to the Building and
Property by reason of fire and other casualties with a qualified insurance
company or companies qualified in an amount and of such coverage as are
satisfactory to and approved by Landlord but in no event shall the amount of
such insurance be less than the cost of totally replacing the Building and other
Improvements (exclusive of the cost of excavations, footings below floor level
and foundations) against: (a) a loss or damage by fire; (b) all peril
customarily covered under extended coverage endorsements; (c) vandalism and
malicious mischief; (d) all risk coverage for physical damage to the Building;
and (e) insurance coverage for the Building against damage shall be obtained by
the Landlord and included in the Tenant's proportional share of the insurance
coverage requirement. Landlord (and, at Landlord's option, the lender interested
under any mortgage or similar instrument then encumbering the Land) shall be
named as an insured on each such policy. The proceeds of such insurance in case
of loss or damage shall be paid to Landlord to be applied on account of the
obligation of Landlord to repair and/or rebuild the Building and/or Premises
pursuant to Article XVII. Any proceeds not required for such purpose shall be
the sole property of Landlord.
Landlord shall procure and Tenant shall pay its Proportionate Share of the
cost of insurance for all Common Areas insuring the Landlord against General
Liability in such sums and coverages as Landlord deems reasonable.
16.02 Liability Insurance on Tenant's Premises. Tenant agrees to secure
----------------------------------------
and keep in force from and after the date Landlord shall deliver possession of
the Premises to Tenant and throughout the Term and Renewal Term, if any, at
Tenant's own cost and expense, Comprehensive General Liability Insurance on an
occurrence basis with a minimum limit of liability in an amount of One million
and 00/100 Dollars ($1,000,000.00). [This insurance coverage shall include water
damage and sprinkler leakage legal liability; contractual liability endorsement
covering the matters set forth in Section 16.04; Broad Form insurance on all
HVAC equipment, boilers and other pressure vessels or systems, whether fired, or
unfired, installed by or primarily for the benefit of Tenant in. adjoining,
above or beneath the Premises. This insurance shall also include plate glass
insurance covering all plate glass in the Premises, but Tenant shall have the
option either to insure the risk or self-insure.
16.03 Insurance. In addition to the insurance required to be carried
---------
pursuant to Article XVI of the Lease, Landlord and Tenant shall each, at its
sole cost, obtain and maintain in effect as long as this Lease remains in
effect, insurance policies providing at least the following coverage:
A. Worker's compensation and similar insurance offering statutory
coverage and containing statutory limits and employer's liability insurance in
form and amount deemed reasonable
20
by Landlord (with respect to Landlord's insurance) and Tenant (with respect to
Tenant's insurance) in the exercise of prudent business judgment.
B. Such policies referenced in this Article XVI above will be
maintained in companies having a "General Policy holders Rating" of at least "A"
as set forth in the most current issue of "Best's Insurance Guide", and will be
written as primary policy coverage and not contributing with, or in excess of,
any coverage which the other party shall carry. Each party shall have the right
to provide the coverage required herein under blanket policies provided that the
coverage afforded shall not be diminished by reason thereof.
C. Each party shall supply to the other on an annual basis or more
frequently if reasonably requested, a copy of each insurance policy required to
be obtained pursuant to the terms of this Lease.
16.04 Provisions to be Contained in Policies. All insurance provided for
--------------------------------------
in this Lease shall be effected under enforceable policies issued by insurers
approved by Landlord and a copy of the policy or a certificate of insurance
shall be delivered to the Landlord within fifteen (15) days after the date of
commencement of the Term of this Lease. The policy or policies shall provide by
its terms that it is noncancellable except on thirty (30) days prior written
notice to Landlord. At least thirty (30) days prior to the expiration date of
any policy, the original renewal policy for such insurance shall be delivered by
the Tenant to the Landlord. Within thirty (30) days after the premium on any
policy shall fall due and payable, the Landlord shall be furnished with
satisfactory evidence of its payment. All policies shall name Landlord, any
person, firms, or corporation designated by Landlord, and Tenant as insured. All
such policies shall contain a provision that Landlord, although named as an
insured, shall nevertheless be entitled to recover under said policies for any
loss occasioned to it, its servants, agents, and employees by reason of the
negligence of Tenant. All such insurance shall specifically insure the
performance by Tenant of the indemnity agreement as to liability contained in
Article XV. All such insurance shall provide that the coverage afforded shall
not be affected by the performance of any work in or about the Premises.
16.05 Subrogation. Tenant and Landlord each waive its right of subrogation
-----------
against each other for any reason whatsoever, and any insurance policies herein
required to be procured by Tenant or Landlord shall contain an express waiver of
any right of subrogation by the insurer against Landlord or Tenant, whichever
the case may be.
16.06 Lenders. Any mortgage lender interested in any part of the Land and
-------
Building may, at Landlord's option, be afforded coverage under any policy
required to be secured by Landlord or Tenant hereunder, by use of a mortgagee's
endorsement to the policy concerned.
16.07 Blanket Policy. If the Tenant provides any insurance required by
------- ------
this Lease in the form of a blanket policy, the Tenant shall furnish
satisfactory proof that such blanket policy complies in all respects with the
provisions of this Lease, and that the coverage thereunder is at least equal to
the coverage which would be provided under a separate policy covering only the
Premises.
21
ARTICLE XVII
DESTRUCTION
-----------
17.01 Destruction.
-----------
A. Landlord's Options. If the Premises shall be partially damaged by
------------------
fire or any other casualty insured under Landlord's insurance policy, Landlord
shall, upon receipt of the insurance proceeds, repair the Premises and until
repair is complete the minimum rent shall be abated proportionately as to that
portion of the Premises rendered untenantable. Notwithstanding the foregoing,
if: (a) the Premises by reason of such occurrence are rendered wholly
untenantable, or (b) the Premises should be damaged as a result of a risk which
is not covered by Landlord's insurance, or (c) the Premises should be damaged in
whole or in part during the last two (2) years of the Term or of any Renewal
Term, or (d) the Premises or the Building of which it is a part, whether the
Premises are damaged or not, should be damaged to the extent of fifty percent
(50%) or more of the then-monetary value, then and in any such events, Landlord
may either elect to repair the damage or may cancel this Lease by notice of
cancellation within sixty (60) days after such event and thereupon this Lease
shall expire, and Tenant shall vacate and surrender the Premises to Landlord.
Tenant's liability for rent upon the termination of this Lease shall cease as of
the day following Landlord's giving notice of cancellation. In the event
Landlord elects to repair any damage, any abatement of rent shall end five (5)
days after notice by Landlord to Tenant that the Premises have been repaired.
Unless this Lease is terminated by Landlord or by Tenant, as permitted herein,
Tenant shall repair and re-fixture the interior of the Premises in a manner and
in at least a condition equal to that existing prior to the destruction or
casualty and the proceeds of all insurance carried by Tenant on its property and
fixtures shall be held in trust by Tenant for the purpose of said repair and
replacement.
B. Tenant's Options. In the event that the Premises are damaged for any
----------------
reason whatsoever, other than Tenant's fault or negligence, and Tenant is
substantially unable to carry on its normal business operations for a period of
thirty (30) days or more, Tenant shall have the right to terminate this Lease by
giving written notice of such termination to Landlord no later than forty-five
(45) days after the occurrence of such damage. Upon such termination, Tenant's
obligations hereunder and each of them, including the obligation to pay rent of
any kind or nature, shall cease as of the day the Premises were so damaged.
During any period that Tenant is substantially unable to conduct its normal
business operations because of such casualty damage, rent of any kind or nature
due hereunder shall be abated for such portion of the Premises which Tenant
cannot reasonably occupy and use.
In the event the Premises are partially damaged by fire or other casualty
and Tenant is able to carry on its normal business operations, Tenant shall pay
rent for only such portion of the Premises which Tenant may reasonably occupy or
use during the time required to make repairs. All repairs necessary to restore
the Premises to its original condition shall be commenced within sixty
22
(60) days after the occurrence of such damage. If Tenant cancels the Lease
pursuant to this paragraph B, Tenant shall vacate and surrender the Premises to
Landlord.
ARTICLE XVIII
CONDEMNATION
------------
18.01 Partial Condemnation or Eminent Domain. If a part of the Premises or
--------------------------------------
the Building is condemned or acquired in lieu of condemnation for any public or
quasi-public use or purpose, by right of eminent domain or otherwise, and Tenant
is substantially unable to carry on its normal business operations for a period
of thirty (30) days or more, Tenant shall have the right to terminate this Lease
by giving written notice of such termination to Landlord no later than forty-
five (45) days after the occurrence of such condemnation. Upon such termination,
Tenant's obligations hereunder and each of them, including the obligation to pay
rent of any nature, shall cease as of the day Tenant vacates the Premises.
During any period that Tenant is unable to conduct its normal business
operations because of such condemnation, rent of any kind or nature due
hereunder shall be abated for such portion of the Premises which Tenant cannot
reasonably occupy and use. Tenant may make a separate claim against the
condemning authority for an award for the value of any of Tenant's tangible
personal property and trade fixtures, for moving and relocation expenses and for
such business damages and/or consequential damages as may be allowed by law.
In the event the Premises are partially condemned and Tenant shall
determine that it is able to carry on its normal business operations, Tenant
shall pay rent for only such portion of the Premises which Tenant may reasonably
occupy and use during the time after such partial condemnation. Any repairs
necessary to restore the Premises to a tenantable condition after a partial
condemnation shall be undertaken by Landlord in a reasonable and prompt manner.
18.02 Total Condemnation. In the event the entire Building be acquired
------------------
under the power of eminent domain proceedings during the Term or Renewal Term
including any renewal period or in the event of a partial acquisition whereby
the portion of said Building remaining after such acquisition shall not be
suitable or adequate for the uses and purposes for which the Premises then are
being utilized by Tenant, then and in any such event, this Lease Agreement shall
be terminated upon the date the entire Building or portion is acquired, and no
further rent shall be due the Landlord from the Tenant. Upon such termination
each party shall be entitled to any award of condemnation depending upon their
proportionate interest in the entire Property as their interests appear in this
Lease. The Landlord shall be entitled to the distributive part of the award that
represents its ownership of the Building and the Land and the Tenant, providing
Tenant is not in default of any of the terms of this lease, shall be entitled to
its share of any award representing the value of its leasehold interest in the
Premises to be taken or condemned (and the value of any fixtures or equipment
owned by the Tenant and which have not become the properly of Landlord by virtue
of this Lease and located on the Premises, or the part taken or condemned, to
the extent that any such fixtures are taken or condemned).
23
18.03 Landlord's Option to Terminate. Notwithstanding anything to the
------------------------------
contrary, if more than fifty percent (50%) of the total floor area of the
building in which the Premises are located shall be taken as aforesaid, Landlord
may, by written notice to Tenant, terminate this Lease. If this Lease is
terminated as provided in this Section, rent shall be paid up to the day that
possession is so taken by public authority and Landlord shall make an equitable
refund of any rent paid by Tenant for periods subsequent to such termination
date.
ARTICLE XIX
EVENTS OF DEFAULT: REMEDIES
---------------------------
19.01 Default by Tenant. Upon the occurrence of any of the following
-----------------
events Landlord shall have the remedies set forth in Section 19.02.
A. Tenant fails to pay any rental or any other sum due hereunder within
ten (10) days after Tenant receives written notice of an amount due for rental
or otherwise.
B. Tenant fails to perform any other term, condition, or covenant to be
performed by it pursuant to this Lease within thirty (30) days after the written
notice of such default shall have been given to Tenant by Landlord. The thirty
(30) and ten (10) day rights to cure provided in Section 23.01 shall not be in
addition to but the same (concurrent) period as provided in this paragraph.
C. Tenant or its agent shall falsify any information required to be
furnished to Landlord.
D. Tenant shall become bankrupt or insolvent or file any debtor
proceedings or have taken against such party in any court pursuant to state or
federal statute, a petition in bankruptcy or insolvency, reorganization, or
appointment of a receiver or trustee; and such proceeding shall not be
dismissed, discontinued or vacated within thirty (30) days from the filing or
appointment.
E. The doing, or permitting to be done, by Tenant of any act which creates
a mechanic's lien or claim against the Land or Building of which the Premises
are a part if not released or otherwise provided for by indemnification
satisfactory to Landlord within thirty (30) days thereafter.
19.02 Remedies. Upon the occurrence of the events set forth in Section
--------
19.01, Landlord shall have the option to take any or all of the following
actions, without further notice of demand of any kind to Tenant or any other
person:
A. Immediately re-enter and remove all persons and property from the
Premises, storing said property in a public place, warehouse, or elsewhere at
the cost of, and for the account of, Tenant, all without service of notice or
resort to legal process and without being deemed guilty of or liable in
trespass. No such re-entry or taking possession of the Premises by Landlord
shall be construed as an election on its part to terminate this Lease unless a
written notice of such intention is given by
24
Landlord to Tenant. No such action by Landlord shall be considered or construed
to be a forcible entry.
B. Collect by suit or otherwise each installment of rent or other sum as
it becomes due hereunder, or enforce, by suit or otherwise, any other term or
provision on the part of Tenant required to be kept or performed.
C. Terminate this Lease by written notice to Tenant. In the event of such
termination, Tenant agrees to immediately surrender possession of the Premises.
Should Landlord terminate this Lease, it may recover from Tenant all reasonable
damages it may incur by reason of Tenant's breach, including the reasonable cost
of recovering the Premises, reasonable attorney's fees, and the worth at the
time of such termination of the excess, if any, of the amount of rent and
charges equivalent to rent reserved in this Lease for the remainder of the
stated term over the then-reasonable rental value of the Premises for the
remainder of the stated term, all of which amounts shall be immediately due and
payable from Tenant to Landlord, excluding any unexercised Renewal Term. In
determining the rent which would be payable by Tenant subsequent to default, the
rent for each year of the unexpired Term shall be equal to the average minimum
rent and additional rents paid by Tenant from the Commencement Date to the time
of default, or during the preceding full calendar year, whichever period is
shorter.
D. Should Landlord re-enter, as provided above, or should it take
possession pursuant to legal proceedings or pursuant to any notice provided for
by law, and whether or not it terminates this Lease, it may make such reasonable
alterations and repairs as may be necessary in order to relet the Premises, and
relet the same or any part for such term or terms (which may be for a term
extending beyond the term of this Lease) and at such reasonable rental or
rentals and upon such other terms and conditions as Landlord in its sole
discretion may deem advisable. Upon each such reletting all rentals received by
the Landlord from such reletting shall be applied, first, to the payment of any
indebtedness other than rent due hereunder from Tenant to Landlord; second, to
the payment of any costs and expenses of such reletting, including reasonable
brokerage fees and reasonable attorney's fees and reasonable costs of any
alterations and repairs; third, to the payment of rent due and unpaid, and the
residue, if any, shall be held by Landlord and applied in payment of future rent
as the same may become due and payable. If such rentals received from such
reletting during any month be less than that to be paid during such month by
Tenant, Tenant shall pay any such deficiency to Landlord. Such deficiency shall
be calculated and paid monthly. No such reentry and reletting of the Premises by
Landlord shall be construed as an election on its part to terminate this Lease
unless a written notice of such intention be given to Tenant pursuant to
subparagraph C. above. Notwithstanding any such reletting without termination,
Landlord may at any time thereafter elect to terminate this Lease for such
previous breach. The remedies given to Landlord in this Section 19.02 shall be
in addition and supplemental to all other rights or remedies which Landlord may
have under laws then in force.
25
ARTICLE XX
BANKRUPTCY OR INSOLVENCY
------------------------
20.01 Liquidation. In the event that Tenant shall become a debtor under
-----------
Chapter 7 of the Federal Bankruptcy Code, 11 U.C.S. (S)(S)101 et seq. (the
-- ---
"Bankruptcy Code"), and Tenant's trustee or Tenant shall elect to assume this
Lease for the purpose of assigning the same or otherwise, such election and
assignment may be made only if the provisions of this Article XX are satisfied.
If Tenant or Tenant's trustee shall fail to elect to assume this Lease within 60
days after the filing of such petition or such additional time as provided by
the court within such 60-day period, this Lease shall be deemed to have been
rejected. Immediately thereupon Landlord shall be entitled to possession of the
Premises without further obligation to Tenants or Tenant's trustee and this
Lease shall terminate, but Landlord's right to be compensated for damages in any
such proceeding shall survive.
20.02 Reorganization. In the event that a petition for reorganization or
--------------
adjustment of debts is filed concerning Tenant under Chapter 11 of the
Bankruptcy Code, or a proceeding is filed under Chapter 7 of the Bankruptcy Code
and is transferred to Chapter 11, Tenant's trustee or Tenant, as debtor-in-
possession, must elect to assume this Lease within 120 days from the date of the
filing of the petition under Chapter 11 or Tenant's trustee or the debtor-in-
possession shall be deemed to have rejected this Lease. In the event that
Tenant, Tenant's trustee or the debtor-in-possession has failed to perform all
of Tenant's obligations under this Lease within the time periods (excluding
grace periods) required for such performance, no election by Tenant's trustee or
the debtor-in-possession to assume this Lease, whether under Chapter 7 or
Chapter 11, shall be effective unless each of the following conditions has been
satisfied:
A. Tenant's trustee or the debtor-in-possession has cured all defaults
under the Lease, or has provided Landlord with Assurance (as defined below) that
it will cure, (1) all defaults susceptible of being cured by the payment of
money within ten (10) days from the date of such assumption and (2) all other
defaults under this Lease which are susceptible of being cured by the
performance of any act promptly after the date of such assumption.
B. Tenant's trustee or the debtor-in-possession has compensated, or has
provided Landlord with Assurance that within ten (10) days from the date of such
assumption it will compensate Landlord for any actual pecuniary loss incurred by
Landlord arising from the default of Tenant, Tenant's trustee, or the debtor-in-
possession indicated in any statement of actual pecuniary loss sent by Landlord
to Tenant's trustee or the debtor-in-possession.
C. Tenant's trustee or the debtor-in-possession has provided Landlord with
Assurance of the future performance of such of the obligations under this Lease
of Tenant, Tenant's trustee or the debtor-in-possession, and if Tenant's trustee
or the debtor-in-possession has provided such Assurance. Tenant's trustee or the
debtor-in-possession shall also (1) deposit with Landlord, as security for the
timely payment of rent hereunder, an amount equal to three (3) months' Rent as
26
contained herein and (2) pay in advance to Landlord on the date any rent is due
and payable, one-twelfth (1/12th) of Tenant's annual obligations for Additional
Rent pursuant to this Lease. The obligations imposed upon Tenant's trustee or
the debtor-in-possession shall continue with respect to Tenant or any assignee
of this Lease after the completion of bankruptcy proceedings.
D. Such assumption will not breach or cause a default under any provision
of any other lease, mortgage, financing agreement or other agreement by which
Landlord is bound relating to the Building.
For purposes of this Article XX, Landlord and Tenant acknowledge that
"Assurance" shall mean no less than Tenant's trustee or the debtor-in-possession
has and will continue to have sufficient unencumbered assets after the payment
of all secured obligations and administrative expenses to assure Landlord that
sufficient funds will be available to fulfill the obligations of Tenant under
this Lease and there shall have been deposited with Landlord, or the sufficient
cash payable to Landlord, and/or Tenant's trustee or the debtor-in-possession,
acceptable as to the value and kind to Landlord, to secure to Landlord the
obligation of Tenant, Tenant's trustee or the debtor-in-possession to cure the
defaults under this Lease, monetary and/or non-monetary, within the time periods
set forth above.
20.03 Subsequent Liquidation or Petition. In the event that this Lease is
----------------------------------
assumed in accordance with Section 20.02 and thereafter Tenant is liquidated or
files a subsequent petition for reorganization or adjustment of debts under
Chapter 11 of the Bankruptcy Code, Landlord may, at its option, terminate this
Lease and all rights of Tenant hereunder, by giving Tenant notice of its
election so to terminate within thirty (30) days after the occurrence of either
of such events.
20.04 Assignment.
----------
A. If Tenant's trustee or the debtor-in-possession has assumed the Lease
pursuant to the terms and provisions of Section 20.01 or 20.02 for the purpose
of assigning (or elects to assign) this Lease to an assignee, this Lease may be
so assigned only if the proposed assignee has provided adequate assurance of
future performance of all of the terms, covenants and conditions of this Lease
to be performed by Tenant. As used herein, "adequate assurance of future
performance" shall mean that no less than each of the following conditions shall
have been satisfied.
(1) The proposed assignee has furnished Landlord with either (a) a
current financial statement audited by a certified public accountant
indicating a net worth and working capital in amounts which Landlord
reasonably determines to be sufficient to assure the future performance by
such assignee of Tenant's obligations under this Lease or (b) a guaranty,
or guaranties, in form and substance satisfactory to Landlord from one or
more persons with a net worth and working capital in amounts which
Landlord reasonably determines to be sufficient to assure the future
performance of Tenant's obligations under this Lease.
27
(2) Landlord has obtained from others required under any lease,
mortgage, financing arrangement or other agreement by which Landlord is
bound all consents or waivers necessary to permit Landlord to consent to
such assignment.
(3) The proposed assignment will not release or impair any guaranty
of the obligations of Tenant (including the proposed assignee) under this
Lease.
B. Any and all monies or other considerations payable or otherwise to be
delivered in connection with the assignment referred to in subparagraph A., next
above, shall be paid or delivered to Landlord, shall be and remain the exclusive
property of Landlord and shall not constitute property of Tenant or of the
estate of Tenant within the meaning of the Bankruptcy Code. Any and all monies
or other considerations constituting Landlord's property under the preceding
sentence not paid or delivered to Landlord shall be held in trust for the
benefit of Landlord and be promptly paid to or turned over to Landlord.
C. Any person or entity to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code shall be deemed without further act or deed to
have assumed all of the obligations arising under this Lease on and after the
date of such assignment. Any such assignee shall upon demand execute and deliver
to Landlord an instrument confirming such assumption.
20.05 Reasonable Charges. When, pursuant to the Bankruptcy Code, Tenant's
------------------
trustee or the debtor-in-possession shall be obliged to pay reasonable use and
occupancy charges for the use of the Premises, such charges shall not be less
than the Rent, Additional Rent, and other sums payable by Tenant under this
Lease.
20.06 Consent. Neither in whole nor any portion of Tenant's interest in
-------
this Lease or its estate in the Premises shall pass to any trustee, receiver,
assignee for the benefit of creditors, or any other person or entity, or
otherwise by operation of law under the laws of any state having jurisdiction of
the person or property of the Tenant unless Landlord shall have consented to
such transfer in writing. No acceptance by Landlord of Rent or any other
payments from any such trustee, receiver, assignee, person or other entity shall
be deemed to constitute such consent by Landlord, nor shall it be deemed a
waiver of Landlord's right to terminate this Lease for any transfer of Tenant's
interest under this Lease without such consent.
ARTICLE XXI
FINANCING
---------
21.01 Subordination. Upon request of Landlord, Tenant will subordinate its
-------------
rights to the lien of any mortgage or mortgages, or lien or other security
interest resulting from any other method of financing or refinancing, now or
hereafter in force against the Land and/or Building of which the Premises are a
part or against any building hereafter placed upon the land of which the
Premises are
28
a part and to all advances made or thereafter to be made upon the security. The
provisions of this Section notwithstanding, so long as Tenant is not in default,
this Lease shall remain in full force and effect for the full Term and Renewal
Term and shall not be terminated as a result of any foreclosure or sale or
transfer in lieu of such proceedings pursuant to a mortgage or other instrument
to which Tenant has subordinated its right.
21.02 Amendment. Tenant agrees that from time to time it shall, if so
---------
requested by Landlord and if doing so will not substantially and adversely
affect Tenant's economic interests under this Lease, join with Landlord in
amending the terms of this Lease so as to meet the reasonable needs or
requirements of any lender which is considering furnishing or which has
furnished any of the financing for the Land and/or Building.
ARTICLE XXII
ATTORNMENT
----------
22.01 Attornment. In the event of the sale or assignment of Landlord's
----------
interest in the Building of which the Premises are a part, or in the event of
any proceedings brought for the foreclosure of; or in the event of exercise of
the power of sale under, any mortgage or other security instrument made by
Landlord covering the Premises, Tenant shall attorn to the assignee or purchaser
and recognize such purchaser as Landlord under this Lease.
ARTICLE XXIII
RIGHT TO CURE
-------------
23.01 Tenant's Right to Cure. No default on the part of Tenant shall exist
----------------------
under this Lease unless and until (i) Tenant shall fail to cure the same within
ten (10) days after written notice to do so from Landlord in the event the
default relates to the non-payment of rentals, or (ii) Tenant shall fail to
commence to cure a nonpayment default in good faith' within thirty (30) days
after a written notice from Landlord to do so and to promptly prosecute the same
to completion in the event the default relates to matters other than the non-
payment of rentals. If Tenant should breach this Lease or be in non-compliance
and not cure this Lease within the time limits subscribed, then Landlord shall
have the rights as described herein.
23.02 Landlord's Right to Cure. In the event of breach, default, or
------------------------
noncompliance hereunder by Landlord, Tenant shall, before exercising any right
or remedy available to it, give Landlord written notice of the claimed breach,
default, or noncompliance. If prior to its giving such notice Tenant has been
notified in writing (by way of Notice of Assignment of Rents and Leases,
29
or otherwise) of the address of a lender which has furnished any of the
financing referred to in Article XXI hereof, concurrently with giving the
aforesaid notice to Landlord, Tenant shall, by registered mail, transmit a copy
thereof to such lender. For the thirty (30) days following the giving of the
notice(s) required by the foregoing portion of this paragraph (or such longer
period of time as may be reasonably required to cure a matter which, due to its
nature, cannot reasonably be rectified within thirty (30) days, Landlord shall
have the right to cure the breach, default, or noncompliance involved. If
Landlord has failed to cure a default within said period, any such lender shall
have an additional thirty (30) days within which to cure the same or, if such
default cannot be cured within that period, such additional time as may be
necessary if within such thirty (30) day period lender has commenced and is
diligently pursing the actions or remedies necessary to cure the breach,
default, or noncompliance involved (including, but not omitted to, commencement
and prosecution of proceedings to foreclose or otherwise exercise its rights
under its mortgage or other security instrument, if necessary to effect such
cure), in which event this Lease shall not be terminated by Tenant so long as
such actions or remedies are being diligently pursued by said lender and
provided the breach, default or noncompliance does not unreasonably interfere
with Tenant's use of the Premises.
ARTICLE XXIV
SURRENDER OF PREMISES
---------------------
24.01 Surrender of Premises. At the expiration of this Lease, Tenant shall
---------------------
surrender the Premises in the same condition as they were in upon delivery of
possession under this Lease, reasonable wear and tear excepted, and shall
deliver all keys to Landlord. Before surrendering the Premises, Tenant shall
remove all of its personal property and trade fixtures and such alterations or
additions to the Premises made by Tenant as may be specified for removal by
Landlord, and shall repair any damage caused by such property or the removal.
Unless Landlord has expressly reserved its rights to require removal of any
alteration or addition made by Tenant when the alteration or addition was
approved by Landlord, then Tenant need not remove the alteration or addition
upon surrender of the Premises. If Tenant fails to remove its personal property
and fixtures within ten (10) days from the expiration of this Lease, the same
shall be deemed abandoned and shall become the property of Landlord, or at
Landlord's option, the same may be removed and disposed of at Tenant's expense.
ARTICLE XXV
HOLDING OVER
------------
25.01 Holding Over. If (without execution of a new lease or written
------------
extension) Tenant should remain in possession of the Premises after the
expiration of the Term or Renewal Term, it shall be deemed to be occupying the
Premises as a Tenant from month to month. It shall pay as
30
monthly rental, therefore, the amounts provided in Sections V and VI and
otherwise hereof on a monthly basis and be subject to all the other conditions
and obligations of this Lease insofar as they be applicable to a month to month
tenancy.
ARTICLE XXVI
ATTORNEY'S FEES
---------------
26.01 Attorney's Fees. In the event that at any time during the term of
---------------
this Lease either Landlord or the Tenant institutes any action or proceeding
against the other relating to the provisions of this Lease or any default, then
the unsuccessful party in such action or proceeding agrees to reimburse the
successful party for the reasonable expenses of such action, including
reasonable attorney's fees, incurred by the successful party.
ARTICLE XXVII
27.01 Hazardous Substances.
--------------------
A. Landlord represents that to the best of its knowledge, any use,
storage, treatment or transportation of "Hazardous Substances" (as hereinafter
defined) which has occurred in, on or about the Land, Building or Premises prior
to the date of this Lease has been in compliance with all "Environmental Laws"
(as hereinafter defined). Landlord additionally represents that to the best of
its knowledge the Land, Building and Premises are free of Hazardous Substances
as of the date of this Lease.
B. Landlord shall indemnify and hold harmless Tenant from any and all
claims, damages, fines, judgments, penalties, costs, expenses or liabilities
(including, without limitation, any and all sums paid for settlement of claims,
attorneys' fees, consultant and expert fees) arising during or after the Term or
Renewal Term from or in connection with the use, storage, generation or disposal
of Hazardous Substances in, on or about the Land, Building of Premises by
Landlord, Landlord's agents, employees, contractors or invitees.
C. Tenant shall not cause or permit any Hazardous' Substances to be used,
stored, generated or disposed of in, on or about the Land, Building or Premises
by Tenant, its agents, employees, contractors or invitees, except for such
Hazardous Substances as are normally utilized in an office setting, such as
office and janitorial supplies. Any such Hazardous Substances permitted on the
Premises as hereinabove provided, and all containers therefor, shall be used,
kept, stored and disposed of in a manner that complies with all Environmental
Laws. Tenant shall indemnify and hold harmless Landlord from any and all claims,
damage, fines, judgments, penalties, costs, expenses or liabilities (including,
without limitation, any and all sums paid for settlement of claims, attorneys'
fees, consultant and expert fees) arising during or after the Term or Renewal
Term, if any, from or in connection with the use, storage, generation or
disposal of hazardous substances in, on
31
or about the land, building and Premises by Tenant, Tenant's agents, employees,
contractors or invitees.
D. Notwithstanding anything to the contrary stated hereinabove, the
indemnifications contained in subparagraphs (B) and (C) above shall not include
any consequential damages (e.g. loss of rent, use and profits) incurred by
either Landlord or Tenant, but shall expressly include, without limitation, any
and all costs incurred due to any investigation of the site or any cleanup,
removal or restoration mandated by or pursuant to any Environmental Laws. The
indemnifications contained herein shall survive any expiration or termination of
the Term or Renewal Term, if any.
E. As used herein, "Hazardous Substances" means any substance which is
toxic, ignitable, reactive, or corrosive or which is regulated by "Environmental
Laws". The term "Environmental Laws" means federal, state and local laws and
regulations, judgments, orders and permits governing safety and health and the
protection of the environment, including without limitation the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq.,
as amended (CERCLA), the Resource Conservation and Recovery Act, as amended 42
U.S.C. 6901 et seq., the Clean Water Act, 33 U.,S.C. 1251 et seq., the Clean Air
-- ----
Act, 42 U.S.C. 7401 et seq., the Toxic Substance Control Act, 15 U.S.C. 2601 et
-- ---- --
seq., and the Safe Drinking Water Act, 42 U.S.C. 300f through 300j. "Hazardous
----
Substances" includes any and all materials or substances which are defined as
"hazardous waste", "extremely hazardous waste" or a "hazardous substance"
pursuant to state, federal or local governmental law. "Hazardous Substances"
also includes asbestos, polychlorinated biphenyl ("PCBs") and petroleum
products.
ARTICLE XXVIII
NET LEASE
---------
28.01 Net Lease. This Lease shall be deemed and construed to be an
---------
absolutely net Lease, and in no circumstances and under no conditions, whether
now existing or hereafter arising, or whether within or beyond the present
contemplation of the parties, shall the Landlord be required to make any payment
of any kind whatsoever or be under any obligation or liability hereunder, except
as herein expressly set forth.
ARTICLE XIX
MISCELLANEOUS PROVISIONS
------------------------
29.01 No Partnership. Neither party by this Lease, in any way or for any
--------------
purpose, becomes a partner or joint venturer of the other in the conduct of its
business or otherwise.
29.02 Force Majeure. A party shall be excused for the period of any delay
-------------
in the performance of any obligations hereunder when prevented from so doing by
cause or causes beyond
32
the party's control, including labor disputes, civil commotion, war,
governmental regulations or controls, fire or other casualty, weather, inability
to obtain any material or services, or acts of God.
29.03 No Waiver. Failure of Landlord to insist upon the strict performance
---------
of any provision or to exercise any option hereunder shall not be construed as a
waiver for the future of any such provision or option. The receipt by Landlord
of rent with knowledge of the breach of any provision of this Lease shall not be
deemed a waiver of such breach. No provision of this Lease shall be deemed to
have been waived unless such waiver be in writing signed by Landlord.
29.04 Notices. Any notice, demand, request, or other instrument which may
-------
be or is required to be given under this Lease shall be delivered in person or
sent by United States certified mail, postage prepaid, and shall be addressed
to:
LANDLORD: TENANT:
--------- -------
Icon Health & Fitness Teltrust, Inc.
Xxxx X. Xxxxxxxx ATTN: Corporate Counsel
1500 South 1000 West 000 Xxxxx Xxxxxxx Xxxxxxxxx Xxxxx
Xxxxx, Xxxx 00000 Xxxx Xxxx xxxx, Xxxx 00000
(Either party may designate such other address as shall be given by written
notice.)
29.05 Recording. Tenant shall not record this Lease; however, Tenant may
---------
record a memorandum of this Lease. Landlord, at its option and at any time, may
file this Lease or "short form" Lease for record with the Recorder of the County
in which the Building is located.
29.06 Partial Invalidity. If any provision of this Lease or the
------------------
application to any person or circumstances shall to any extent be invalid, the
remainder of this Lease or the application of such provision to persons or
circumstances other than those as to which it is held invalid shall not be
affected and each provision of this Lease shall be valid and enforced to the
fullest extent permitted by law.
29.07 Brokers. Except for Xxxx Partners, Inc. which has served exclusively
-------
as the Tenant's agent and shall be paid a consulting fee as described below,
each party represents and warrants to the other party that it has incurred no
other claims for brokerage consulting fees or finder's fees in connection with
this Lease and agrees to indemnify the other party against and to hold the other
party harmless from all liabilities arising from any such claims, including
reasonable attorney's fees.
With regards to this Lease and any expansions of additional space for the
original Term, the Landlord shall pay to Xxxx Partners, Inc. a consulting fee
equal to three percent (3%) of the net rentals (based upon $14.75 per square
foot rental for months 1-36, a four percent (4%) increase thereon for months 37-
48 and an additional three percent (3%) increase for months 49-60) to be
received by the Landlord. One-half of said consulting fee shall be paid upon the
Landlord's receipt of rent with the remaining half to be paid within thirty (30)
days of the Landlord's receipt of rent.
33
With regards to option period provided in this Lease, the Landlord shall pay a
consulting fee equal to one-half (1/2) of the above stated amount, payable
within thirty (30) days of the beginning of such option period.
29.08 Provisions Binding. Etc. Except as otherwise provided, all
-----------------------
provisions herein shall be binding upon and shall inure to the benefit of the
parties, their legal representatives, heirs, successors, and assigns. Each
provision to be performed by Tenant shall be construed to be both a covenant and
a condition. In the event of any sale or assignment (except for purposes of
security or collateral) by Landlord of the Building or Land, the Premises, or
this Lease, Landlord shall, from and after the Commencement Date (irrespective
of when such sale or assignment occurs), be entirely relieved of all of its
obligations, and all of such obligations shall, as of the time of such sale or
assignment or on the Commencement Date, whichever is later, automatically pass
to Landlord's successor in interest.
29.09 Entire Agreement. Etc. This Lease and the Exhibits attached, set
---------------------
forth the entire agreement between the parties. All Exhibits mentioned in this
Lease are incorporated by reference. Any prior conversations or writings are
merged herein and extinguished. No subsequent amendment to this Lease shall be
binding upon Landlord or Tenant unless reduced to writing and signed. Submission
of this Lease for examination does not constitute an option for the Premises and
becomes effective as a lease only upon execution and delivery thereof by
Landlord to Tenant.
29.10 Captions. The captions, as used in this 'Lease, are used for
--------
convenience and reference purposes only and in no way define, limit or describe
the scope or intent of this Lease or in no way affect this Lease.
29.11 Time. Time is and shall be of the essence of each term, provision,
----
covenant and condition of this Lease.
29.12 Governing Law. The interpretation of this Lease shall be governed by
-------------
the laws of the State of Utah. Tenant hereby expressly and irrevocably agrees
that Landlord may bring any action or claim to enforce the provisions of this
Lease in the State of Utah, County of Salt Lake, and the Tenant irrevocably
consents to personal jurisdiction in the State of Utah for the purposes of any
such action or claim. Tenant further irrevocably consents to service of process
in accordance with the provisions of the laws of the State of Utah. Nothing
herein shall be deemed to preclude or prevent Landlord from bringing any action
or claim to enforce the provisions of this Lease in any other jurisdiction.
ARTICLE XXX
AUTHORITY OF SIGNATORIES
------------------------
30.01 Authority of Signatories. Each person executing this Lease
------------------------
individually and personally represents and warrants that he or she is duly
authorized to execute and deliver the same
34
on behalf of the entity for which he or she is signing (whether it be a
corporation, general or limited partnership, or otherwise), and that this Lease
is binding upon said entity in accordance with its terms.
DATED this __ day of _______, 1997.
ICON HEALTH & FITNESS, INC.
By /s/ Xxxx Xxxxxxxxx
-------------------------------------------
Its Vice President
----------------------------------------
(LANDLORD)
DATED this 20th day of March, 1997.
TELTRUST, INC.
By /s/ Xxxx X. Xxxx
-------------------------------------------
Its Chairman
----------------------------------------
(TENANT)
SUMMARY OF COMMON AREA RATIOS
----------------------------
1. COMMON AREA MAINTENANCE PERCENTAGE
a. Number of leased feet / TelTrust: 32,484
b. Number of total leasable feet /
HealthRider building: 104,565
c. Ratio of C.A.M. / TelTrust: 31%
As per existing agreement: 26.05%
2. COMMON AREA BURDEN
a. HealthRider building total: 24,775
b. Total leasable feet /
HealthRider building: 104,565
c. Ratio of Common Area Burden: 24%
As per lease: 18%
[FLOOR PLAN APPEARS HERE]
[FLOOR PLAN APPEARS HERE]
[FLOOR PLAN APPEARS HERE]
[FLOOR PLAN APPEARS HERE]
[FLOOR PLAN APPEARS HERE]
FIRST AMENDMENT TO LEASE
THIS AMENDMENT TO LEASE (the "Amendment") is made and entered into this 7th
day of November, 1997, by and between ICON HEALTH & FITNESS, INC., a Delaware
corporation ("ICON") and TELTRUST, INC., ("Teltrust").
WITNESSETH:
WHEREAS, under date of March 24, 1997, Teltrust entered into a Lease
Agreement, covering the real property described therein (hereinafter the
"Property"); and
WHEREAS, Teltrust has requested ICON to sign certain lending documents in
favor of Fleet National Bank ("Bank") in connection with a loan from Bank to
Teltrust.
NOW THEREFORE, in consideration of the mutual promises and covenants set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, ICON and Teltrust hereby agree as
follows:
1. Paragraphs 5.04A. and 5.04B. of said Lease are stricken and amended
to read as follows:
A. Amount. Within five (5) days of Tenant's execution of this
------
Amendment the Tenant will (i) pay the sum of $50,000.00 to ICON; and
(ii) cause to be issued an irrevocable, demand letter of credit in the
sum of $150,000.00 in form and substance acceptable to Landlord for
the benefit, use and payment to, if required, the Landlord as a
security deposit for the Subject Property which will be held by Xxxxx
& Xxxxxx, P.C. according to this Section 5.04. The security deposit
provided for in the preceding sentence will be increased in the event
Tenant leases additional space within the Building, to equal the sum
of four (4) month's rents for all space leased by Tenant within the
Building.
B. Non-Payment. The above deposit shall be held as above provided as
-----------
security for the faithful performance by the Tenant, of all of the
terms, conditions and covenants of this Agreement, and of that
Sublease Agreement for office, business equipment and furnishings
between ICON and Teltrust which are to be kept and performed by the
Tenant during the Term and Renewal Term hereof and pursuant to the
Sublease Agreement.
3. In the event of any inconsistency between the term of this Amendment
and the terms of the Lease, the terms of this Amendment shall control. Except as
modified by this Amendment, the Lease shall continue in full force and effect.
2
4. Teltrust acknowledges that the Lease, as amended hereby is in full
force and effect and that there are no defaults of ICON pursuant to the Lease.
IN WITNESS WHEREOF, the parties have signed this Amendment as of the date
first set forth above.
"ICON"
ICON HEALTH & FITNESS, INC., a
Delaware corporation
By /s/ Xxxx Xxxxxxxxx Vice President
--------------------------------------
Authorized Agent
"TELTRUST"
Teltrust, Inc.
By [SIGNATURE ILLEGIBLE]
--------------------------------------
Authorized Agent
HOLLADAY BUILDING L.L.C.
FIRST AMENDMENT TO LEASE AGREEMENT
THIS AMENDMENT TO LEASE AGREEMENT is made and entered into as of the _____
day of March, 1998, by and between HOLLADAY BUILDING L.L.C. ("Lessor") and
TELTRUST, INC. ("Lessee").
R E C I T A L S:
A. Icon Health & Fitness, Inc. ("Icon"), as lessor, and Lessee previously
entered into a Lease Agreement dated March 24, 1997 ("the Lease") for premises
in the building presently known as the HealthRider Building, which is located at
0000 Xxxxx 0000 Xxxx, Xxxx Xxxx Xxxxxx, Xxxx ("the Building").
X. Xxxxxx purchased the Building from Icon, and Icon assigned all of its
rights, title and interest under the Lease to Lessor.
C. Lessee desires to terminate its possession of certain space on the
first floor of the Building and to acquire additional space in the Building.
D. The parties have agreed to modify other portions of the Lease as set
forth hereinafter.
NOW, THEREFORE, in consideration of their mutual promises and covenants set
forth hereinafter, the parties agree as follows:
1. TERMINATION OF OCCUPANCY OF FIRST FLOOR SPACE. On or before Xxxxx 00,
0000 Xxxxxx shall terminate its occupancy of all space that it occupies on the
first floor of the Building, which consists of 1,093 rentable square feet.
Lessee's monthly lease payments under the Lease shall be reduced by $1,343.48
per month as of the date Lessee terminates its possession of the first floor
space. Lessor shall give Lessee a credit against the next month's rent for the
reduced rent on the vacated space.
2. LEASE OF NEW PREMISES. Lessor hereby leases to Lessee and Lessee rents
from Lessor certain space designated as suites L1E, L3C, BIW and L1C, consisting
of approximately 32,654 rentable square feet, as specified on Schedule A
attached hereto and included herein by this reference ("the New Premises").
3. COMMISSIONS AND FEES. Lessee shall be solely responsible for paying any
brokerage commissions or consulting fees with respect to the lease of the New
Premises, including any consulting fees owed to Xxxx Partners, Inc..
4. TERM OF LEASE FOR NEW PREMISES. The term of the Lease for the New
Premises shall commence on March 15, 1998 and shall terminate on March 31, 2004.
5. RENT FOR NEW PREMISES. Lessee shall pay Lessor as rent for the use of
the New Premises $14.75 per rentable square foot per annum. Such rent shall be
payable monthly in advance on or before the first day of each month. As it
applies to the New Premises, the Lease shall be a triple net lease; and Lessee
shall be obligated to pay its share of operating expenses for the Building,
which Lessor estimates will be $5.00 per square foot of rentable space. (See
Schedule B attached hereto and included herein by this reference). The estimated
monthly payment for operating expenses shall be $13,605.83 per month. Should
Lessee occupy a portion but less than all of the New Premises prior to May 1,
1998, rent and Lessee's share of operating expenses for the New Premises shall
be prorated. Should Lessee occupy any portion of the New Premises on any day
other than the first day of the month, rent and Lessee's share of operating
expenses shall be prorated. Commencing May 1, 1998 and continuing through April
30, 1999, the rent for the New Premises shall be $40,137.21 per month. On May 1,
1999 and on the corresponding date of each year thereafter through March 31,
2004, rent for the New Premises shall increase by 2.5% over the monthly rent
paid during the preceding year.
6. RENT FOR KITCHEN/DINING AREA. Lessee shall pay rent for its
proportionate share of the Kitchen/Dining Area. The parties acknowledge that as
of the date of this Amendment, Lessee's proportionate share of the
Kitchen/Dining Area is 1,914 square feet and that such number is included in the
net rentable square footage specified in paragraph 2 above. Lessee's
proportionate share of such Area is determined by multiplying the total area of
the Kitchen/Dining Area by a fraction, the numerator of which is the gross
rentable square footage of the New Premises and the denominator of which is the
gross rentable square footage of the Building. Lessee's share of the
Kitchen/Dining Area shall be subject to adjustment due to increases or decreases
in the gross rentable square footage of the Building. In the event there is a
change in the gross rentable square footage of the Building at any time,
Lessee's share of the rent shall be prorated as of the date of such change.
7. RENEWAL OPTIONS. Lessee shall have the option to extend the lease on
the New Premises for two (2) terms of five (5) years each, provided Lessee is
not in default of any provision of the Lease or this Amendment at the time such
option is exercised. The rent at the commencement of each extension term shall
be five percent (5%) below the then current market rate; provided, however, on
May 1st of the second, third, fourth and fifth years of each option term the
rent shall increase by 2.5% over the monthly rate paid during the preceding
year. In the event Lessee desires to exercise its option to extend the term of
the Lease on the New Premises, Lessee shall give Lessor written notice not less
than 180 days prior to the expiration of the current term of the Lease. Lessee
shall be solely responsible for the payment of any brokerage commissions or
consulting fees with respect to such extensions, including but not limited to
any consulting fees owed to Xxxx Partners, Inc.
8. SIGNING BONUS. Upon execution of this Amendment, Lessor shall credit
Lessee with the sum of Three Hundred Twenty-Five Thousand Dollars ($325,000.00).
Lessee may use such
2
credit against rent, tenant improvements and/or brokerage commissions or
consulting fees owed by Lessee.
9. PLANS AND SPECIFICATIONS. Lessee shall be solely responsible for paying
for plans and specifications with respect to the New Premises.
10. SECURITY DEPOSIT. lessee shall not be required to pay a security
deposit with respect to its lease of the New Premises. Lessor shall cooperate
with Lessee to obtain the return of the security deposit in the amount of
$188,515.48 currently being held in escrow at Zions First National Bank ("the
Bank"). The parties acknowledge that Lessee shall be responsible for preparing
the necessary documents to obtain the release of the security deposit from the
Bank; and upon completion of such documents, Lessor agrees to sign the same.
11. ADDITIONAL PARKING. Lessor shall provide Lessee with 140 parking spaces
in addition to those provided under the Lease. Lessee may rent on a month to
month basis up to four (4) additional underground parking stalls at a cost of
$40 per stall per month (the monthly charge being subject to increase from time
to time).
12. LESSOR'S AGENT. Lessor hereby represents to Lessee that Lessor's agent
with respect to any and all matters regarding the Lease, this Amendment, the
Building and the New Premises is Xxxxxxxxxx & Associates L.L.C. Lessee shall
direct any and all notices or other correspondence under the Lease or this
Amendment to Xxxxxxxxxx & Associates L.L.C. at the address to which Lessee makes
its rent payments.
13. LEASE PROVISIONS. The terms and conditions of the Lease are
incorporated herein and made a part hereof. Except as expressly amended herein,
the terms and conditions of the Lease shall remain in full force and effect. In
the event of any inconsistency between the provisions of this Amendment and the
Lease, the provisions of this Amendment shall control.
14. OPTION FOR ADDITIONAL SPACE. Provided this Lease is in full force and
effect with no delinquencies or defalcations of any kind by Lessee hereunder,
Lessee shall have and is hereby granted an option to lease all or any portion of
the space in any addition to the Building. Rent for the space shall be the
current market rate for similar space in similar buildings. Prior to listing
space in an addition to the Building with a broker, Lessor shall give Lessee
written notice that such space will be available and the rate or rates for such
space. Lessee shall have a period of thirty (30) days after receiving written
notice from Lessor within which to exercise its option to rent the space in the
addition to the Building. If Lessee exercises its option to rent all or any
portion of the space in the addition, Lessee shall give Lessor written notice of
its exercise, specifying the amount of space that Lessee desires to lease.
Thereafter, the parties shall enter into a lease for such space for a term of
not less than ten (10) years on the same general covenants and conditions as set
forth in the Lease and this Amendment. If Lessee does not exercise its option to
lease any of the space in the addition, Lessee's option shall terminate, and
Lessor may lease the space in the addition to one or more tenants on such terms
and conditions as Lessor determines.
3
15. LEASEHOLD DEED OF TRUST. Lessor hereby acknowledges that Lessee
previously conveyed to Fleet National Bank ("Fleet"), a secured lender of
Lessee, in trust, with power of sale, its entire right, title and interest now
owned or hereafter acquired in and to the Lease and the leasehold estate
pursuant to that certain Leasehold Deed of Trust dated November 7, 1997 ("the
Leasehold Deed of Trust") to secure certain indebtedness of Lessee to Fleet.
Landlord hereby consents to the Leasehold Deed of Trust and consents to and
approves of the execution and delivery by Lessee of any amendments of or
modifications to such Leasehold Deed of Trust to reflect the modification to the
Lease made by this Agreement, including the change in the premises to be
occupied by Lessee. Lessor agrees to execute a Landlord Consent in substantially
the form attached hereto as Exhibit C and consents to the filing of an amended
Memorandum of Lease and an amendment to the Leasehold Deed of Trust to reflect
the modified terms of the Lease. Lender also agrees to execute, and to use its
good faith efforts to cause any mortgagee to execute, a Subordination, Non-
disturbance and Attornment Agreement in substantially the form attached hereto
as Exhibit D and to use its good faith efforts to obtain the consent of any
mortgagee of the premises to the Leasehold Deed of Trust.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the day
and year first above written.
LESSOR:
HOLLADAY BUILDING L.L.C.
By /s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxxxxxx, Manager
LESSEE:
TELTRUST, INC.
By /s/ Xxxx X. Xxxx, Chairman
--------------------------------------
4
SCHEDULE A
TELTRUST, INC.
SQUARE FOOTAGE SUMMARY
(All square footage amounts are subject to remeasurement.)
--------------------------------------------------------
SPACE RENTABLE
LEVEL DESCRIPTION SQ. FT.
--------------------------------------------------------
BIW Facilities Offices 1,466
LIE Icon Health & Fitness 23,129
L1C Dining Area Build Out 1,863
L3C Executive Offices 5,375
------
TOTAL OFFICE SQ. FT.: 31,833
LESS FIRST FLOOR AREA: (1,093)
------
TOTAL FOR THE NEW PREMISES: 30,740
Proportionate Share of the Following:
L1C Kitchen & Dining Area (42%) 1,914
TOTAL RENTABLE SQUARE FEET: 32,654
* Percentage of Total Building Calculation
Current Rentable Sq. Ft. 32,484
Additional Office Rentable Sq. Ft. 30,740
-------
63,224
Total Building Sq. Ft. 150,233
TELTRUST, Inc. Prop. Share: 42%
SCHEDULE B
HEALTHRIDER BUILDING EXPENSE SUMMARY
1998 ESTIMATE
----------------------
HealthRider
Annual Xxx.Cost
cost Per Sq.Ft.
----------------------
OPERATING EXPENSES
------------------
REPAIRS
Electrical Repairs 9,500.00 0.06
Elevator Contracts 7,500.00 0.05
Elevator Phones 2,500.00 0.02
Floors 5,000.00 0.03
HVAC 9,000.00 0.06
Inspections 5,000.00 0.03
Miscellaneous 15,000.00 0.10
Painting 2,000.00 0.01
Parking Lot Maintenance 1,500.00 0.01
Plumbing Repairs 1,500.00 0.01
Roof Repairs 1,000.00 0.01
---------------------
$ 59,500.00 $ 0.40
MAINTENANCE
Janitorial Services 100,000.00 0.67
Janitorial Supplies 17,000.00 0.11
Landscape 10,000.00 0.07
Snow Removal 4,500.00 0.03
Window Cleaning 7,000.00 0.05
---------------------
$138,500.00 $ 0.92
UTILITIES
Sewer & Water 25,000.00 0.17
Natural Gas 20,000.00 0.13
Electricity 160,000.00 1.07
---------------------
$205,000.00 $ 1.37
OTHER SERVICES
Garbage Removal 5,000.00 0.03
Keys 1,000.00 0.01
Other Services 8,500.00 0.06
Signs 1,000.00 0.01
---------------------
$ 15,500.00 $ 0.10
TOTAL OPERATING EXPENSES: $418,500.00 $ 2.79
ADMINISTRATIVE EXPENSES
-----------------------
INSURANCE 24,000.00 0.16
MISC. & ADMIN. (3%) 90,000.00 0.60
PROPERTY TAXES 215,000.00 1.43
---------------------
$329,000.00 $ 2.19
TOTAL EXPENSES: $747,500.00 $ 4.98
---------------------
Exhibit C
FLEET NATIONAL BANK
One Federal Street
Mail Drop MA OF DO3D
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Gentlemen:
Reference is hereby made to the following:
A. Teltrust, Inc., as tenant (the "Tenant") and the undersigned, as
landlord (the "landlord") entered into a lease dated March 24,1997) (as it
may be hereafter amended, modified or supplemented, the "Lease", for
premises situated at 6350 South 3000 East, Salt Lake City, State of Utah,
as more particularly described in the Lease (the "Premises"); and
B. We are informed that Tenant, and certain related corporations,
are the Borrower or one of the Guarantors under the terms of a Credit
Agreement, dated on or about the date hereof (as amended from time to time,
the "Credit Agreement") pursuant to which Fleet National Bank (the
"Lender") and the lenders listed in Schedule 2. 1 to the Credit Agreement
agreed to make certain Revolving Credit Loans and other extensions of
credit to the Borrower, as defined in the Credit Agreement (the "Loan").
We are also informed that it is a condition precedent to the Lender's
obligation to make the Loan that Landlord execute and deliver this letter to
Lender.
Accordingly, in order to induce Lender to make the Loan and in
consideration therefore, and in consideration of the mutual covenants set forth
herein. Lender and Land1ord agree as follows;
November 7, 1997
Page 2
1. Landlord hereby consents to and approves of the execution and delivery
by Tenant of a Mortgage (the "Mortgage") to Lender, pursuant to which Tenant
will grant a mortgage lien on all of its right, title and interest in and to the
Lease and the leasehold estate in the Premises, assign all leases, subleases,
rents and profits and grant other security interests in the Premises, in favor
of Lender as security for the payment or performance of all or the indebtedness,
liabilities and obligations, whether now existing or hereafter arising, of
Tenant to Lender.
2. The Landlord agrees that upon the occurrence of a default under the
Lease, Landlord will send to Lender a copy or any written notice of such default
at the same time such notice ("Default Notice") is sent to Tenant. Landlord
shall give such Default Notice to Lender at the address set forth above, or to
such other address as Lender shall designate to Landlord in writing. Notices
given Lender shall be deemed received by Lender on the same terms and conditions
as deemed to be received by Tenant as provided in the Lease.
3. The Landlord agrees that Landlord will accept the cure of a default
whether provided by Lender or by Tenant as specified in a Default Notice.
4. The Landlord acknowledges that this letter serves as a notification of
the Lender's interest in the Premises as prescribed by the Lease.
Notwithstanding any prohibition or condition on such assignments in the Lease,
and provided that Lender obtains Landlord's prior written consent, which consent
shall not be unreasonably withheld, Landlord agrees that the Lease may be
assigned in connection with the foreclosure of the Mortgage, or any action in
lieu of foreclosure of the Mortgage, and may be assigned by Lender following
such foreclosure of the Mortgage of the Lease or by assignment in lieu of
foreclosure.
5. Landlord agrees that at Lender's request Landlord will, if necessary,
and provided Landlord determines in its sole discretion that it is in Landlord's
best interest to do so, at the sole cost and expense of Lender, cooperate in the
prosecution of the proceedings to evict Tenant if Tenant is in default. Landlord
shall be paid by Lender, in advance, for any reasonable costs and fees Landlord
reasonably anticipates incurring in such proceedings and providing such
cooperation.
6. The Landlord represents to Lender that:
(a) As of the date of this Agreement, Tenant has paid all rent,
additional rent, and other charges and amounts due to Landlord under the Lease
or with respect to the Premises;
(b) Except for the rents due for the month of November 1997 which are
now due and owing, no default has occurred under the terms of the Lease of which
Landlord has
November 7, 1997
Page 3
knowledge and no event has occurred or failed to occur of which Landlord has
knowledge which, with the giving of notice, the passage to time, or both, would
constitute a default or event of default with respect to the Lease; and
(c) Except for the First Amendment to Lease of even date hereof (of
which a copy is attached) the Lease has not been amended, modified, terminated
or revoked, is in full force and effect, and is binding and enforceable against
Landlord, and against Tenant in accordance with its terms.
7. This Agreement may not be modified, waived or amended in any respect,
except in writing, signed by Landlord and Lender, shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
legal representatives, estates, successors and assigns, and shall be governed by
and construed in accordance with the laws of the State of Utah.
8. Landlord acknowledges and agrees that the lien and security interest of
the Lender on any equipment owned by Tenant located on the Premises shall be
superior to any lien, right, title, claim or interest that Landlords may now or
hereafter have therein. Landlord further covenants and agrees that in the event
the Lender exercises its right to take possession of or remove said equipment
from the Premises, Landlord will not hinder or interfere therewith, and Landlord
consents to the taking of possession and removal of such equipment. Should any
of the collateral constitute "fixtures," as defined in Utah Code Xxx. (S)(S)
70A-9-313. Lender agrees that it shall repair, or reimburse Landlords for the
cost of repair of, any damage to the Premises caused by the removal of any
fixtures (but Lender shall not be liable for any diminution in value of the real
estate caused by the absence of the fixtures removed or by any necessity of
replacing them).
9. Landlord hereby consents to the filing of a notice or memorandum of
lease with respect to the Lease and the Mortgage with the Salt Lake County
Recorders Office.
Very truly yours,
By [SIGNATURE APPEARS HERE]
----------------------------------
Its [ILLEGIBLE]
---------------------------------
Date 11-7-97
--------------------------------
Exhibit D
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
-------------------------------------------------------
THIS AGREEMENT, is made this_____day of _________________, 1997 by and
among ________________________________, With an address of
__________________________________________________________ (the "Tenant"),
______________________________, with an address of
_______________________________________________________ (the "Landlord") and
______________________________________, a ______________________ bank, with a
principal office at_________________________________________________________
(the "Mortgagee").
PRELIMINARY STATEMENT
---------------------
A. Tenant has entered into a lease with Landlord dated ___________ (the
"Lease") of premises described therein (the "Premises") consisting of an
approximately _________ square foot portion of the building located at
______________________________________________. The premises are located on a
parcel of land which is more fully described in Exhibit A attached hereto
---------
(together with the buildings and improvements thereon, called the "Property").
--------
B. Mortgagee is the holder of a certain mortgage dated ________________
from the Landlord to Mortgagee encumbering the Property (the "Mortgage"). The
term "Mortgage" includes any renewal, modification, consolidation or extension
of the same, including increases thereof and supplements thereto. The Mortgage
and all documents executed in connection therewith or secured thereby are
called the "Loan Documents."
C. The parties desire to establish certain rights of quiet and peaceful
possession for the benefit of Tenant under the Lease and to define the terms,
covenants and conditions precedent for such additional rights.
NOW, THEREFORE, in consideration of the foregoing arid other valuable
consideration, the receipt and sufficiency of which is acknowledged, the parties
covenant and agree as follows:
1. The Lease is and shall remain subject and subordinate to the lien of
the Mortgage.
2. In the event of foreclosure of the Mortgage or a deed in lieu of
foreclosure or exercise of Mortgagee's rights or remedies under the Mortgage, or
the Loan Documents, Tenant shall not be made a party in any action or proceeding
to remove or evict Tenant and Mortgagee shall not disturb Tenant's possession
under the Lease during the term provided therein, including any extensions and
renewals of the Lease now provided therein, and the Lease and the rights of
Tenant thereunder shall continue as a direct Lease between
Mortgagee, as landlord, and Tenant, as tenant and shall not be terminated or
disturbed if and so long as Tenant is not in default under the Lease of such a
nature as would permit the Landlord to terminate the Lease after the expiration
of any applicable grace period, provided that:
(a) Mortgagee shall not be bound by any payment made by Tenant to
Landlord more than thirty (30) clays prior to the due date thereof unless such
prepayment was required pursuant to the terms of the Lease;
(b) Mortgagee shall not be bound by any amendment or modification of
the Lease affecting the term or the rent made without the written consent of
Mortgagee, which consent shall not be unreasonably withheld or delayed; and
(c) Tenant shall not have any right to recover from Mortgagee or set
off against payments otherwise owed under the Lease (1) any damage then accrued
as the result of any past act, omission or default of Landlord or any prior
landlord under the Lease, except to the extent such right of offset or defense
is specifically set forth in the Lease or unless Mortgagee was previously
notified of the act or event giving rise to such offset or defense, or (2) any
security deposit unless actually received by Mortgagee.
3. In the event of foreclosure of the Mortgage or a deed in lieu of
foreclosure, Tenant shall attorn to Mortgagee and accept Mortgagee as the
landlord under the Lease, and Mortgagee shall have all of the rights and
remedies of the Landlord under the Lease, and Mortgagee or any person
claiming thereunder shall be bound to Tenant under all of the terms, covenants
and conditions of the Lease for the balance of the term thereof remaining and
any extensions or renewals thereof.
4. The foregoing provisions shall be self-operative. Nevertheless,
Mortgagee and Tenant agree, upon request, in the event of foreclosure of the
Mortgage or a deed in lieu thereof, to execute an instrument mutually
satisfactory to Mortgagee and Tenant in recordable form confirming the foregoing
provisions.
5. Tenant acknowledges and agrees that this Agreement satisfies any
condition or requirement in the Lease relating to the granting of a non-
disturbance agreement with respect to this particular holder of the Mortgage on
the Property.
6. Upon notice from Mortgagee in form reasonably satisfactory to Tenant
that (a) the Mortgagee has exercised its rights under the Loan Documents, which
may include but not necessarily be limited to (i) declaring a default under the
Loan Documents that has not been cured within the applicable grace or cure
periods, (ii) foreclosure of the Mortgage, (iii) acceptance of a deed from the
Landlord in lieu of foreclosure, or (iv) any one or more of the foregoing or
other rights exercised under the Loan Documents which may or may not involve
-2-
the Mortgagee's actual possession of the Property, and (b) the Mortgagee demands
that Tenant pay its rent to Mortgagee, then Tenant shall thereafter pay all rent
and other moneys payable to Landlord under the Lease or at the direction of
Mortgagee until otherwise notified in writing by Mortgagee. Landlord
unconditionally authorizes and directs Tenant to make rental payments directly
to Mortgagee following receipt of such notice and further agrees that Tenant may
rely upon such notice without any obligation to further inquire as to whether or
not any default exists under the Mortgage or Loan Documents and that Landlord
shall have no right or claim against Tenant for or by reason of any payments of
rent or other charges made by Tenant to Mortgagee following receipt of such
notice. Landlord, its successors and assigns hereby agree to indemnify and
hold harmless Tenant against any expense, claims, losses or damages incurred
by Tenant resulting from or arising out of claims by Landlord, its successors or
assigns that such rental payments should not have been, or cannot be, made to
Mortgagee.
7. Tenant agrees to give Mortgagee prompt notice of any notice of default
sent to Landlord with respect to the Lease. Tenant agrees that in the event of
any act or omission by Landlord which would give Tenant the right, either
immediately or after any lapse of time, to terminate the Lease or to set off
against or reduce the rent payable thereunder or to claim a partial or total
eviction, Mortgagee shall have the same opportunity to cure such default
available to Landlord under the Lease except Tenant shall have the right to
terminate the Lease without giving Mortgagee notice or the opportunity to cure.
8. Any notice under this Agreement shall be in writing and shall be sent
by certified or registered mail, return receipt requested or by Federal Express
or similar overnight courier to the following address:
If to Mortgagee: ______________________________
______________________________
______________________________
If to Tenant: ______________________________
______________________________
______________________________
If to Landlord: ______________________________
______________________________
______________________________
Or, in any case, to such substitute address or addresses (up to a maximum
of two for any party) as any party may specify by notice to the other parties.
-3-
9. The terms "Mortgagee," "Landlord" and "Tenant" shall be construed to
include the heirs, executors, administrators, successors and assigns of the
respective parties hereto, including, in the case of Mortgagee anyone who
succeeds to title to the Property after foreclosure or a deed in lieu thereof,
and this Agreement shall inure to their benefit and be binding on them.
10. No modification, amendment, waiver or release of any provision of this
Agreement or of any right, obligation, claim or cause of action arising
hereunder shall be valid or effective unless in writing and signed by the party
against whom the same is sought to be asserted.
11. In the event that any provision or provisions of this Agreement shall
for any reason be invalid, illegal or unenforceable by the final ruling of a
court of competent jurisdiction, the remaining provisions of this Agreement
shall not be affected thereby, and in the place of such invalid, illegal or
unenforceable provision there shall be substituted a like, but valid legal and
enforceable provision which most nearly accomplishes the original intention of
the parties, as evidenced by this Agreement.
-4-
EXECUTED as a sealed instrument as of the day and year first above written.
TENANT: ________________________________
By:_____________________________
its____________, hereunto duly authorized
MORTGAGEE: ________________________________
By:_____________________________
its____________, hereunto duly authorized
LANDLORD: ________________________________
By:_____________________________
its____________, hereunto duly authorized
-5-
STATE OF _________________
County of __________________ _____________ 1997
Then personally appeared the above named ______________________, the
____________________ of ____________________________ and acknowledged the
foregoing instrument to be the free act and deed of _________________________
before me.
_____________________________
Notary Public
My Commission Expires:
STATE OF _________________
County of __________________ _____________ 1997
Then personally appeared the above named ______________________, a
___________________ of ___________________________________ and acknowledged the
foregoing instrument to be the free act and deed of ___________________________,
before me
_____________________________
Notary Public
My Commission Expires:
STATE OF _________________
County of __________________ _____________ 1997
Then personally appeared the above named ______________________, the
___________________ of ___________________________________ and acknowledged the
foregoing instrument to be the free act and deed of ___________________________,
before me
_____________________________
Notary Public
My Commission Expires:
-6-
EXHIBIT A
---------
Property Description
--------------------
-7-
[FLOOR PLAN APPEARS HERE]
[FLOOR PLAN APPEARS HERE]
[FLOOR PLAN APPEARS HERE]
[FLOOR PLAN APPEARS HERE]
