EXHIBIT 10.39
LEASE AGREEMENT
BETWEEN
▇▇▇▇▇▇▇-RIVERWOODS COMPANY, L.L.C.
AS LANDLORD
AND
NACT TELECOMMUNICATIONS, INC.,
AS TENANT
DECEMBER 30, 1999
TABLE OF CONTENTS
PAGE NO.
1. Demise of Leased Premises................................................................................1
2. Certain Definitions......................................................................................1
3. Title and Quiet Enjoyment................................................................................3
4. Use of Leased Premises...................................................................................4
5. Term; Option Rights......................................................................................4
6. Rent.....................................................................................................5
7. Net Lease................................................................................................6
8. Payments of Taxes; Compliance with Law...................................................................6
9. Liens; Recording and Title...............................................................................7
10. Indemnification..........................................................................................7
11. Maintenance, Repair and Replacement......................................................................8
12. Signs....................................................................................................9
13. Alterations..............................................................................................9
14. Alteration and Restoration Requirements..................................................................9
15. Condemnation............................................................................................10
16. Insurance...............................................................................................12
17. Restoration.............................................................................................14
18. Subordination to Financing..............................................................................15
19. Assignment, Subleasing and Abandonment..................................................................16
20. Permitted Contents......................................................................................17
21. Default; Remedies.......................................................................................17
22. Additional Rights of Landlord and Tenant................................................................19
23. Notices.................................................................................................20
24. Estoppel Certificate....................................................................................20
25. Surrender and Holding Over..............................................................................20
26. Risk of Loss............................................................................................21
27. No Merger of Title......................................................................................21
28. Force Majeure...........................................................................................21
29. Limitation on Right of Recovery Against Landlord........................................................21
30. Attornment..............................................................................................21
31. Environmental Provisions................................................................................22
32. Miscellaneous...........................................................................................23
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LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease") is made as of this 30th day of
December, 1999, by and between ▇▇▇▇▇▇▇-RIVERWOODS COMPANY, L.L.C. ("Landlord"),
with an address of ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and
NACT TELECOMMUNICATIONS, INC., a Delaware corporation ("Tenant"), with an
address of 191 West ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇.
FOR AND IN CONSIDERATION of the rents to be paid by Tenant and the
covenants and agreements herein set forth, Landlord hereby leases to Tenant and
Tenant hereby leases from landlord, the Leased Premises (as described below)
subject to the terms, covenants and agreements hereinafter set forth.
1. Demise of Leased Premises. Landlord hereby demises and lets to Tenant and
Tenant hereby takes and leases from Landlord for the term or terms and upon the
provisions hereinafter specified the following described property (collectively,
the "Leased Premises"): (i) the premises described and shown on Exhibit "A"
attached hereto and made a part hereof together with the easements, rights and
appurtenances thereunto belonging or appertaining (collectively the "Land");
(ii) that certain building containing approximately 39,577 rentable square feet
located on the Land (the "Building") and any other buildings, structures and
other improvements now existing or hereafter constructed on the Land
(collectively, the "Improvements"); and (iii) the HVAC, plumbing, electrical and
other building systems incorporated into the Improvements, with all additions
and accessions thereto, substitutions therefore and replacements thereof
(collectively, the "Equipment").
2. Certain Definitions.
a. "Alterations" shall mean all changes, additions, improvements or
repairs to, reconstructions, renewals or removals of and all substitutions or
replacements for any of the Improvements, both interior and exterior, structural
and non-structural, and ordinary and extraordinary.
b. "Assignment" shall mean any Assignment of Rents and Landlord's
Interest in Leases hereafter executed from Landlord to Lender.
c. "Base Rent" shall mean Base Rent as defined in Paragraph 6 hereof.
d. "Base Rent Payment Dates" shall mean the Base Rent Payment Dates as
defined Paragraph 6 hereof.
e. "Casualty Termination Date" shall mean the Casualty Termination Date
as defined in Paragraph 16(h) hereof.
f. "Commencement Date" shall mean the date on which this Lease is fully
executed and delivered by both Landlord and Tenant.
g. "Condemnation" shall mean a Taking and/or a Requisition.
h. "Event of Default" shall mean an Event of Default as defined in
Paragraph 21(a)
i. "Final Payment" shall mean the final payment to Landlord or Tenant,
as applicable, of Net Proceeds, Net Award, or a Remaining Sum, as applicable.
j. "Guarantor" shall mean World Access Inc.
k. "Guaranty" shall mean a guarantee of payment and performance of all
of Tenant's obligations under this Lease to be provided by Guarantor To Landlord
contemporaneously with execution of this Lease.
l. "Law" shall mean any constitution, statute or rule of law.
m. "Lease Year" shall mean a period of twelve (12) full months
commencing as hereinafter described, and each subsequent sequential twelve (12)
full calendar month period measured from the anniversary date of the
commencement of the first Lease fear. The first Lease Year shall commence on the
first (1st) day of the month following the Commencement Date (unless the
Commencement Date is the first day of the month, in which case the Commencement
Date shall be the first (1st) day of the Lease Year), and shall include any
period of time for which Base Rent is due hereunder prior to the Commencement
Date.
n. "Legal Requirements" shall mean all present and future laws, codes,
ordinances, orders, judgments, decrees, injunctions, rules, regulations and
requirements even if unforeseen or extraordinary, of every duly constituted
governmental authority or agency, (but excluding those by their terms not
applicable to Tenant or the Leased Premises as a result of a grandfather clause
or similar provision) and all covenants, restrictions and conditions now or
hereafter of record which may be applicable to Tenant or to any part of the
Leased Premises, or to the use, manner of use, occupancy, possession, operation,
maintenance, alteration, repair or reconstruction of any part of the Leased
Premises, even if compliance therewith necessitates structural changes or
improvements or results in interference with the use or enjoyment of any of the
Leased Premises.
o. "Lender" shall mean an entity which makes a Loan, to Landlord,
secured by a Mortgage and evidenced by a Note.
p. "Loan" shall mean a loan made by a Lender to Landlord secured by a
Mortgage and evidenced by a Note.
q. "Mortgage" shall mean a deed of trust or similar security instrument
heretofore or hereafter executed covering the Leased Premises from Landlord to
Lender.
r. "Net Award" shall mean the entire award payable to Landlord or
Tenant by reason of a Condemnation, less any reasonable expenses incurred by
Landlord or Tenant in collecting such award.
s. "Net Proceeds" shall mean the entire proceeds of any insurance
required under clause (i) of Paragraph 16(a) hereof, less any reasonable
expenses incurred by Landlord or Tenant in collecting such proceeds.
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t. "Remaining Sum" shall mean the Remaining Sum as defined in Paragraph
17(b) hereof.
u. "Requisition" shall mean any temporary requisition or confiscation
of the use or occupancy of any part of the Leased Premises by any governmental
authority, civil or military, whether pursuant to an agreement with such
governmental authority in settlement of or under threat of any such requisition
or confiscation, or otherwise.
v. "Restrictive Covenants" shall mean any recorded covenants,
conditions and restrictions affecting the Leased Premises.
w. "State" shall mean the State of Utah.
x. "Taking" shall mean any taking of any part of the Leased Premises in
or by condemnation or other eminent domain proceedings pursuant to any Law,
general or special, or by reason of any agreement with any condemnor in
settlement of or under threat of any such condemnation or other eminent domain
proceeding or by any other means, or any de facto condemnation.
y. "Term" shall mean the Term as defined in Paragraph 5 hereof.
3. Title and Quiet Enjoyment.
a. Condition of Premises. The Leased Premises is demised and let
subject to (i) the existing state of title of the Leased Premises, as of the
commencement of the Term, (ii) any state of facts which an accurate survey or
physical inspection of the Leased Premises might show, (iii) all Legal
Requirements and Restrictive Covenants, including any existing violation of any
thereof, and (iv) the condition of the Leased Premises as of the commencement of
the Term.
b. Tenant's Acceptance of Condition of Title. Tenant represents to
Landlord that Tenant has examined the title to the Leased Premises prior to the
execution and delivery of this Lease and, as the immediately preceding owner,
has found the same to be satisfactory for the purposes contemplated hereby and
acknowledges that, upon conveyance of the Leased Premises to Landlord, fee title
shall be vested in Landlord and that Tenant has only the right of possession and
use of the Leased Premises as provided in this Lease.
c. Quiet Enjoyment. Landlord warrants that it has the full right and
authority to enter into and perform this Lease and to grant the estate herein
demised. Landlord covenants that at all times during the term of this Lease,
including any extension thereof, when Tenant is not in default beyond any period
provided herein for the curing of such default, Tenant's quiet and peaceful
enjoyment of the Leased Premises shall not be materially disturbed or materially
interfered with by Landlord or any other person claiming by, through or under
Landlord, subject to the applicability of any Restrictive Covenants or Legal
Requirements.
d. No Conflict. Landlord warrants that neither the execution of this
Lease nor Landlord's performance of its obligations hereunder will violate or
breach any term or provision of any agreement, written or oral, between Landlord
and any other person.
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4. Use of Leased Premises.
a. Use. The Leased Premises may be used for manufacturing, assembly,
processing, packaging, distribution and general office purposes and any use
ancillary thereto and for any other activity that Tenant is authorized to
conduct under its Articles of Incorporation, subject to compliance with the
Legal Requirements and any Restrictive Covenants.
b. Certain Prohibitions on Use. Tenant shall not permit any unlawful
occupation, business or trade to be conducted on any of the Leased Premises or
any use to be made thereof contrary to any applicable Legal Requirements or the
Restrictive Covenants. Tenant shall not use, occupy or permit any of the Leased
Premises to be used or occupied, not do or permit anything to be done in or on
any of the Leased Premises, in a manner which would (i) violate any certificate
of occupancy affecting any of the Leased Premises, (ii) make it difficult or
impossible to obtain fire or other insurance which Tenant is required to furnish
hereunder, (iii) cause injury to any of the Improvements, (iv) violate any
applicable Restrictive Covenants or (v) constitute a public or private nuisance
or waste. Tenant acknowledges that the use of Leased Premises are subject to the
terms of the Master Declaration of Protective Covenants, Conditions and
Restrictions for Riverwoods Research and Business Park, any Supplementary
Declaration of the Articles of Incorporation Bylaws and Rules of the Riverwoods
Research and Business Park Owners Association (collectively, the Declaration").
5. Term; Option Rights.
a. Term. Subject to the provisions hereof, Tenant shall have and hold
the Leased Premises for an initial term (the "Term") of Ten (10) years from the
Commencement Date.
b. Option Right. Tenant shall have two (2) consecutive options (the
"Options") to extend the Term of the Lease for five (5) years each (each
referred co as an "Option Term"), which Options may be exercisable only by
written notice if Tenant is not in default under the Lease at the time of
exercise. Such notice shall be delivered by Tenant to Landlord as provided
below. Upon the proper exercise of each Option, the Term shall be extended for
the Option Term exercised by Tenant.
c. Option Rent. The Base Rent payable by Tenant during the first Lease
Year of each Option Term shall equal the greater of: (i) the Base Rent for the
immediately preceding Lease Year increased by two percent (2%); or, (ii) nine
and one-half percent (9 1/2%) of the fair market value of the Leased Premises as
determined by an independent appraiser mutually agreed upon by Landlord and
Tenant. The parties shall have the duty to reasonably cooperate in the selection
of the appraiser. Thereafter the Base Rent shall be subject to a two percent
(2%) increase for each Lease Year during the Option Term over the Base Rent for
the immediately preceding Lease Year.
d. Exercise of Options. The Options shall be exercised by Tenant, if at
all, only by providing written notice to Landlord that it is exercising the
Option or Options, which notice shall be delivered to Landlord on or before the
date which is four (4) months prior to the expiration of the initial Term, or
the expiration of the first Option Term, as applicable. If Tenant
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fails to timely exercise any Option then Tenant's right to exercise the Option
and all subsequent Options shall expire and be null and void.
e. Advertisements by Landlord. During the last four months of the
applicable Term of the Lease, assuming Tenant has not exercise its Options to
extend, Landlord shall have the right to (i) advertise the availability of the
Leased Premises for reletting and to erect upon the Leased Premises signs
indicating such availability (provided that such signs do not unreasonably
interfere with the use or appearance of the Leased Premises), and (ii) show the
Leased Premises to prospective tenants at such reasonable times during normal
business hours as Landlord may select. Throughout the Term of the Lease,
Landlord may advertise the sale of the Leased Premises and shall have the same
rights of signage and access to prospective purchasers as allotted to
prospective tenants.
6. Rent.
a. Base Rent. Tenant shall pay to Landlord, as annual rent for the
Leased Premises during the Term, without demand, deduction or offset, the
amounts set forth below ("Base Rent"), commencing on the first day of the first
month next following the Commencement Date and continuing on the first day of
each month thereafter during the Term (the "Base Rent Payment Dates"). Tenant
shall pay the Base Rent at such location as designated by Landlord from time to
time, in writing. Pro rata Base Rent shall be due for the period from the
Commencement Date through the last day of the month in which the Commencement
Date falls and shall be paid in advance on the Commencement Date.
Lease Year Base Rent Monthly Payment
---------- --------- ---------------
1 $528,749.00 $44,062.00
2 $539,324.00 $44,944.00
3 $550,110.00 $45,843.00
4 $561,112.00 $46,759.00
5 $572,334.00 $47,695.00
6 $583,781.00 $48,648.00
7 $595,457.00 $49,621.00
8 $607,366.00 $50,614.00
9 $619,513.00 $51,626.00
10 $631,903.00 $52,659.00
b. Additional Rent; Late Charge. Tenant shall pay and discharge when
the same shall become due, as additional rental, all other amounts and
obligations which Tenant assumes or agrees to pay or discharge pursuant to this
Lease. In the event of any failure by Tenant to pay or discharge any of the
foregoing, Landlord shall have all rights, powers and remedies provided herein,
by Law or otherwise. If any amount of Base Rent is not paid within ten (10) days
of its due date, Tenant shall pay a late fee equal to three percent (3%) of such
amount for the first occurrence during any Lease Year, and a late fee equal to
five percent (5%) of any amount not paid when due if Tenant has already incurred
a late fee during that Lease Year. Payment of Base Rent and any other amounts
due from Tenant hereunder is an independent covenant under this Lease and is
payable without offset or deduction except as expressly permitted herein.
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7. Net Lease.
a. Net Lease. This is a triple net lease and, except as otherwise
expressly provided to the contrary herein, Base Rent and all other sums payable
hereunder by Tenant shall be paid without notice or demand, and without set off,
counterclaim, recoupment, abatement, suspension, deferment, diminution,
deduction, reduction or defense, except as specifically provided for herein. It
is the express intent of Landlord and Tenant that all costs and expense of
operating, maintaining, repairing and restoring the Leased Premises incurred
during the Term of the Lease or any exercised Option Term shall be borne by
Tenant, including, without limitation, all expenses in connection with
maintaining, repairing and replacing the Building, the Improvements, the
Equipment, Taxes (as defined in Paragraph 8) and insurance premiums as required
pursuant to Paragraph 16. Notwithstanding the foregoing, Landlord shall be
solely responsible and shall be required to promptly maintain the roof and
structural components of the Building and the Improvements.
b. Independent Covenants. It is the intention of the parties hereto
that the obligations of Tenant and Landlord hereunder shall be separate and
independent covenants and agreements.
8. Payments of Taxes; Compliance with Law.
a. Payment of Taxes. Subject to the provisions of Paragraph 20 hereof
relating to contests, Tenant shall, before interest or penalties are due
thereon, pay and discharge all taxes of every kind and nature (including real
and personal property, franchise, withholding, profits and gross receipts
taxes), all general and special assessments, levies, permits, inspection and
license fees, all water and sewer rents and other utility charges, all ground
rents, and all other public charges whether of a like or different nature, even
if unforeseen or extraordinary, imposed upon or assessed against Landlord.
Tenant or any of the Leased Premises as a result of, or arising in respect of,
the acquisition, occupancy, leasing, use or possession thereof, or any activity
conducted on the Leased Premises. As part of the foregoing, Tenant shall also be
solely responsible for the payment and performance of any impositions,
assessments and other charges levied from time to time on Landlord, Tenant or
the Leased Premises, arising out of the development, use, ownership or operation
of the Leased Premises or any Improvements thereon under the terms of any
applicable Restrictive Covenants (all of the foregoing are collectively, the
"Taxes"). Landlord shall promptly provide to Tenant copies of any tax bills and
assessments relating to the Leased Premises received by Landlord. Tenant shall
forward all required funds for payment of any such assessments at least ten (10)
days prior to the due date to Landlord, who shall forward payment of such
assessments to the appropriate authority.
b. Installment Payments. Nothing herein shall obligate Tenant to pay
Federal, State or local (i) franchise, capital stock or similar taxes, if any,
of Landlord, (ii) income, excess profits, ad valorem taxes or other taxes, if
any, of Landlord, determined on the basis of its net income, or (iii) any
estate, inheritance, succession, gift, capital levy or similar tax unless the
taxes referred to in clauses (i) and (ii) above are in lieu of or a substitute
for any other tax or assessment upon or with respect to any of the Leased
Premises which, if such other tax or assessment were is effect at the
commencement of the Term, would be payable by Tenant. In the event that any
assessment against any of the Leased Premises may be paid in installments,
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Tenant shall have the option to pay such assessment in installments. In such
event, Tenant shall be liable only for those installments which become due and
payable during the Term. Any payments made in installments shall be paid in the
same manner as set forth in the last sentence of Paragraph 8(a) above. Upon
request, Tenant shall deliver evidence of payments of all Taxes other than those
paid as set forth in the last sentence of Paragraph 8(a) above, if any, within
twenty (20) days after the due date thereof.
c. Compliance with Legal Requirements. Tenant unconditionally agrees
that it shall, without contribution by Landlord, promptly comply with, perform
and conform to all Legal Requirements, subject to the provisions of Paragraph 20
hereof, and the terms, covenants and restrictions contained in any applicable
Restrictive Covenants.
9. Liens; Recording and Title.
a. Liens. Tenant shall not, directly or indirectly, create or permit to
be created or to remain, and shall promptly discharge, any lien on any of the
Leased Premises or Base Rent or any other sums payable by Tenant under this
Lease, other than any mortgage, lien, encumbrance or other charge existing as of
the Commencement Date or created by or resulting from any act or omission by
Landlord.
b. Memorandum of Lease. Tenant shall execute. deliver and record, file
or register from time to time all such instruments as may be required in writing
by Landlord to evidence the respective interest of Landlord and Tenant in any of
the Leased Premises. Tenant may cause a memorandum of this Lease ("Memorandum of
Lease") in form reasonably acceptable to Landlord, and any supplement hereto or
to such other instrument, if any, as may be appropriate, to be recorded, in such
manner and in such places as may be required by any present or future Law in
order to give public notice and protect the validity of this Lease. The party
recording the Memorandum of Lease shall be solely responsible for the expense of
recording. Each party agrees to execute and deliver to the other upon the
expiration of the Term or any exercised Option Term an instrument in recordable
form terminating the Memorandum of Lease.
c. No Right to Encumber. Nothing in this Lease and no action or
inaction by Landlord shall be deemed or construed to mean that Landlord has
granted to Tenant any right, power or permission to do any act or to make any
agreement which may create, give rise to, or be the foundation for, any right,
title, interest or lien in or upon the estate of Landlord in any part of the
Leased Premises.
10. Indemnification. Tenant agrees to pay, protect, indemnify, save and hold
harmless Landlord from and against any and all liabilities, losses. damages,
penalties, costs, expenses (including reasonable attorneys' fees and expenses),
causes of action, suits, claims, demands or judgments of any nature whatsoever,
howsoever caused, arising from (i) any use, occupancy, condition, design,
construction, maintenance, repair or rebuilding of any portion of the Leased
Premises during the Term or Option Term as applicable, and any injury to or
death of any person or any loss of or damage to any property in any manner
arising therefrom connected therewith or occurring thereon, or (ii) any
violation by Tenant of any provision of this Lease, or any contract or agreement
to which Tenant is a party, or of any violation, breach or non-performance of a
Legal Requirement by Tenant. Notwithstanding the foregoing, Tenant shall not he
obligated to
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indemnify Landlord with respect to any matter arising by reason of any negligent
or willful act, omission or breach of Landlord. In case any action or proceeding
is brought against Landlord by reason of any such claim, Tenant Covenants upon
notice from Landlord To defend Landlord in such action, with the expenses of
such defense paid by Tenant, and Landlord will cooperate and assist in the
defense of such action or proceeding if reasonably requested so to do by Tenant.
This Section shall survive the termination of the Lease.
11. Maintenance, Repair and Replacement
a. Tenant's Obligations. Tenant shall at all times during the Term
hereof, properly maintain, repair and replace the Leased Premises as necessary
in order to keep all of the same in first class operating condition and repair
and in compliance with all Legal Requirements and Restrictive Covenants. This
obligation shall include the Improvements on the Leased Premises, and all
features, components and aspects thereof including, without limitation, the
Building, the doors, windows, utilities, signs, exterior facade, landscaping,
except for the roof and structural components of the Improvements and Building.
Tenant shall also maintain the Equipment in first class mechanical condition,
and shall promptly make all repairs and replacements as necessary in order to
keep and maintain the Equipment in such condition, ordinary wear and tear
excepted. Landlord shall not be required to maintain or to make any repair or
replacement of the Improvements or any component or aspect of, or otherwise
serving, the Leased Premises except for the roof and structural components of
the Building (except as otherwise provided above with respect to the accuracy
and truthfulness of the Roof and Structural Component Warranty) and shall have
no liability or responsibility for failure to do so. Tenant shall make all
repairs and replacements for which it is responsible hereunder as and when
necessary and also promptly upon written notice from Landlord, and all such work
shall be performed in a good, proper and workmanlike manner.
Tenant's obligation to maintain, repair and operate the Building and
Improvements shall be subject to provisions for ordinary wear and tear.
b. Site Maintenance. Tenant shall also properly maintain, repair and
replace, as necessary in order to keep all of the same in good operating
condition and repair, and in compliance with all Legal Requirements, Restrictive
Covenants, all automobile parking areas, sidewalks, landscaped areas and
underground plumbing, telephone and electrical lines (to the extent not the
responsibility of a utility company) driveways, entrances and exits thereto, and
lighting, within the Leased Premises.
c. Landlord's Right of Entry. Landlord shall have the right, upon two
days (2) notice to Tenant (or without notice in case of emergency), to enter
upon any put of the Leased Premises for the purpose of inspecting the Leased
Premises and performing any maintenance, repairs or replacements which may be
necessary by reason of Tenant's failure to comply with the provisions of
subparagraphs (a) and (b) of this Paragraph 11. Except in case of emergency, the
right of entry shall be exercised at reasonable tunes and at reasonable hours.
Tenant shall pay the cost of all such maintenance, repairs and replacements to
Landlord plus a 5% administrative fee within twenty (20) days from the time of
demand for payment by Landlord to Tenant and upon submission of evidence of
Landlord's payment of such costs.
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d. Maintenance Agreements. Tenant may enter into any contract or
contracts it desires to provide for third party maintenance of the Building, the
Improvements and the Equipment and any other part of the Leased Premises,
provided that copies of any such contracts shall be provided to Landlord, and
all such contracts shall contain a provision permitting Landlord, at its sole
option, without cause, to terminate such contract, without liability for any
sums unpaid by Tenant, upon the expiration or earlier termination of the Term or
any exercised Option Term of this Lease.
12. Signs. Subject to compliance with all Legal Requirements and the Restrictive
Covenants, Tenant may at its sole cost and expense, place, erect and install any
signs which advertise its business on the roof, walls, and any other places on,
the Leased Premises, which signs shall remain the property of Tenant and may be
removed at any time during the Term of this Lease, or any extension thereof,
provided Tenant shall repair or reimburse Landlord for the cost of any damage to
the Leased Premises resulting from any future installation or removal of such
signs. Notwithstanding the foregoing, any free standing permanent sign erected
by Tenant on the Leased Premises shall not be removed by Tenant without
Landlord's written consent, and shall become the property of Landlord, provided,
however, Tenant shall have the right to remove its name and other identifying
marks from such sign. Tenant shall be solely responsible for obtaining all
permits and approvals required under any Legal Requirements and the Restrictive
Covenants and shall maintain all such signs in good order and repair.
13. Alterations. Except as provided herein, Tenant shall not make any
Alterations, construct upon the Land any additional Improvements or alter the
exterior appearance of the Improvements without the prior written consent of the
Landlord, which shall not be unreasonably withheld. Interior non-structural
Alterations that do not exceed a cost of $100,000 per Lease Year and do not
adversely affect the structural integrity or function of the Building or
Improvements may be made without the consent of the Landlord. Tenant agrees that
(i) all such Alterations, construction and installations shall be performed in a
good and workmanlike manner, (ii) all such Alterations, construction and
installations shall be expeditiously completed in compliance with all Legal
Requirements and the Restrictive Covenants, and the requirements set forth in
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, (▇▇▇) all work done in connection with any such Alteration,
construction or installation shall comply with the requirements of any insurance
policy required to be maintained by Tenant hereunder, (iv) Tenant shall promptly
pay all costs and expenses of any such Alteration, construction or installation
and shall discharge all liens filed against any of the Leased Premises arising
out of the same, (v) Tenant shall procure and pay for all permits and licenses
required in connection with any such Alteration, construction or installation,
and (vi) all such Alterations, construction and installations shall become the
property of Landlord and shall be subject to this Lease.
14. Alteration and Restoration Requirements.
a. Compliance with Legal Requirements. Any Alteration or restoration
made to the Leased Premises shall be made in a good and workmanlike manner and
in compliance with all Laws and Legal Requirements, including all governmental
orders, building ordinances and regulations, applicable Restrictive Covenants
and architectural controls pertaining thereto. Landlord is not, and shall not
be, responsible for obtaining any permits, licenses or approvals or for
performing any of Tenant's work on or improvements to the Building, the
Improvements or
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the Land or for providing any off-site improvements, roads, or facilities
whatsoever and Tenant hereby accepts the Leased Premises "AS-IS, WHERE-IS."
b. Mechanics' Liens. It is expressly acknowledged and understood that
Landlord does not consent, and has not by the execution and delivery of this
Lease consented, to the imposition of any liens upon the Landlord's interest in
the Leased Premises by any party whomsoever. Tenant covenants and agrees to
protect, indemnify, defend and hold harmless Landlord and the Leased Premises
from and against all mechanics' liens and claims, including bills and claims,
liens and rights to liens for labor and materials and architects', contractors'
and subcontractors' claims, and all fees, claims and expenses incident to the
construction and completion of any Improvements by or for Tenant, including,
without limitation, reasonable attorneys' fees and court costs which may be
incurred by Landlord in connection therewith. In the event a notice of
mechanic's lien is filed, Tenant may, within twenty (20) days after receipt of
such notice, bond off or make other suitable arrangements reasonably acceptable
to Landlord relative to such lien in order to contest the same, so long as such
bond fully protects Landlord and the Leased Premises from such claim.
15. Condemnation.
a. Definitions. Wherever used in this Paragraph, the following word
shall have the definitions and meaning hereinafter set forth;
i. "Condemnation proceedings" means any action or proceeding
brought for the purpose of any taking of the fee, material right of way
or other interest in the Leased Premises or any part thereof (or direct
access thereto) by competent authority as a result of the exercise of
the power of eminent domain, including a voluntary sale to such
authority either under threat of condemnation or while such action or
proceeding is pending.
ii. "Taking" or "taken" means the event and date of vesting of
title to the fee of the Leased Premises or any part thereof pursuant to
the condemnation proceedings.
b. Complete Taking. If all or substantially all of the Leased Premises
shall be taken in condemnation proceedings, either Tenant or Landlord shall have
the right to terminate this Lease as of the date of such taking and the transfer
of possession. As of the date of such termination, Landlord shall give Tenant a
proportionate refund and of any rent paid in advance, and this Lease shall
terminate. "Substantially all" of the Leased Premises shall be deemed taken (i)
if all of the Building is taken, or (ii) if direct access to the Leased Premises
is taken by the elimination of direct access to the adjacent public highway,
that is not replaced by alternate access.
c. Award for Complete Taking. All compensation awarded for any taking
of the Lease Premises (including, without limitation the Improvements) or any
interest in either shall belong to and be the property of the Landlord and
Tenant hereby assigns to Landlord all its right, title and interest in any such
award, except to the extent that this Lease is terminated and Tenant files a
claim, at its sole cost and expense, as delineated below and the condemning
authorities specifically award to Tenant or specifically allocate a portion of
the award to Tenant as of the effective date of the taking, including Tenant's
relocation expenses and lost good will, provided,
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however, the filing of such claim by Tenant or allocation by the condemning
authorities to Tenant does not adversely affect or diminish the award which
would otherwise have been received by Landlord had Tenant not filed such a claim
and received such award. Subject to the foregoing, in the event all or any part
of the Premises is condemned or sought to be condemned, Tenant shall be
entitled, in its sole discretion to assert a claim to or for one or more of the
following: (a) for compensation for the value of Tenant's leasehold interest
which may include a claim for Tenant's costs of removal and relocation,
unreimbursed expenses incurred by Tenant to install tenant improvements at its
new location and the economic loss incurred by Tenant due to higher rental
rates, shorter term, CAM fees, etc. incurred under the replacement lease; and
(b) for recovery from the condemner to the maximum extent otherwise allowable by
law. "Condemned" and "condemnation" shall be construed to include any transfer
of possession, title or right relating to the Premises in favor of or for the
benefit of any entity having the power of eminent domain, including, but not
limited to, sale or lease. No right of termination set forth anywhere in this
Lease may be exercised by or for the benefit of any entity having the payer of
eminent domain.
d. Less than Complete Taking. If less than substantially all of the
Leased Premises is taken but more than 15% of the gross rentable square feet
thereof or more than 15% of the parking space comprising a portion of the Leased
Premises, then (1) Tenant, at its election shall have the right to terminated
this Lease and will notify Landlord of its election within thirty (30) days of
its election; (ii) if Tenant elects to continue the Lease. Tenant shall commence
and proceed with reasonable diligence to repair and reconstruct the remaining
Improvements on the Leased Premises to a complete architectural unit, to the
extent the condemnation award is available therefore, and (iii) the Base Rent
and related charges payable by Tenant hereunder shall continue with an equitable
reduction and modification, to reflect the loss of any part or functionality of
the Building or the parking area. The award in condemnation proceedings for any
partial taking where repair or reconnection is undertaken shall be apportioned
and paid in the following order of priority:
First - There shall be paid any and all reasonable expenses, charges
and fees, including reasonable counsel fees, in collecting the awards.
Second - The proceeds of the awards shall next be used as a fund for
the restoration and repair of the Building to a complete architectural unit.
Said proceeds shall be held by Landlord, and shall be paid out from time to time
to persons furnishing labor or materials, or both, including architects' fees
and contractors' compensation in such restoration work on vouchers approved by a
licensed architect or engineer approved by Landlord and employed by Tenant to
supervise the work.
Third - The balance of the award shall be equitably allocated between
Landlord and Tenant . If the proceeds are not sufficient far the repair and
restoration of the Improvements, then Landlord and Tenant shall attempt in good
faith to agree on a reduced scope of restoration which can be funded through the
balance of the award. If the parties are unable to so agree, then either Tenant
or Landlord shall have the right, upon notice to the other within twenty (20)
days following receipt of confirmation of such deficiency, to cancel and
terminate this Lease and the rights and obligations of Tenant hereunder. Upon
receipt of such notice, Tenant shall have a reasonable time to surrender and
deliver possession of the Leased premises to Landlord in
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accordance with the terms hereof. In such event, Tenant shall only be entitled
to a condemnation award as provided in paragraph 15(c) hereof. Notwithstanding
the foregoing, the party receiving the notice shall have the right to void such
notice of cancellation by (i) forwarding notice to such party within five (5)
days of receipt of the notice, of such party's intent to provide such deficiency
in funds, and (ii), in the case of Tenant, paying such amount to Landlord for
use solely for the restoration of the Improvements in accordance with this
Paragraph 15.
e. Responsible Party. Both Landlord and Tenant shall have
responsibility for dealing with the condemning authority in any condemnation
proceedings relative to their respective interests in the Leased Premises.
16. Insurance
a. Tenant's Obligations. Tenant shall maintain at its sole cost and
expense the following insurance on the Leased Premises:
i. Insurance against loss or damage to the Improvements and
Equipment by fire and other risks from time to time included under
standard extended "all risk" casualty policies, in amounts not less
than one hundred percent (100%) of the actual replacement value of the
Improvements and Equipment, excluding footings and foundations and
other parts of the Improvements which are not insurable.
ii. Broad form general public liability insurance against
claims for bodily injury. death or property damage occurring on, in or
about any of the Leased Premises in an amount not less than $1,000,000
for bodily injury or death to any one person, not less than $2,000,000
for any one accident, and not less than $1,000,000 for property damage.
Policies for such insurance shall be for the mutual benefit of
Landlord, Tenant and any Lender.
iii. Tenant shall not be required to obtain business
interruption insurance but shall be required to reimburse Landlord in
an amount not to exceed $750 per year for the cost to Landlord of
maintaining insurance covering loss of income its the event of casualty
to the Property.
iv. Worker's compensation insurance covering all persons
employed in connection with any work done on or about any of the Leased
Premises for which claim for death or bodily injury could be asserted
against Landlord, Tenant or any of the Leased premises.
v. Broad form boiler and machinery insurance, to be obtained
within 60 days of the effective date of this Lease on all air
conditioning equipment, boilers and other pressure vessels or systems,
covering the replacement value of such items and any damage or injury
which may be caused by them.
b. Policy Requirements. The insurance required by Paragraph 16(a) shall
be written as primary coverage, not contributing with and not in excess of
coverage which Landlord may carry, and shall be written by companies of
recognized financial standing which are approved by Landlord and are authorized
to do an insurance business in the State of Utah. The insurance policies (i)
shall be for a term of not less than twelve months, (ii) shall be in amounts
sufficient at all times to satisfy any coinsurance requirements thereof, and
(iii) shall (except for the worker's
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compensation insurance referred to in Paragraph 16(a)(iii) hereof) name
Landlord, Tenant and any Lender as additional insured parties, as their
respective interests may appear. If said insurance or any part thereof shall
expire, be withdrawn, become void by breach of any condition thereof by Tenant
or become void or unsafe by reason of the failure or impairment of the capital
of any insurer, or if for any other reasonable cause said insurance shall become
unsatisfactory to Landlord, Tenant shall immediately obtain new or additional
insurance satisfactory to Landlord.
c. Notice of Cancellation. Each insurance policy referred to in clauses
(i) and (ii) of Paragraph 16(a) shall provide that it may not be canceled except
after thirty (30) days prior notice to Landlord and any Lender. Each such policy
shall also provide that any loss otherwise payable thereunder shall be payable
notwithstanding (1) any act or omission of Tenant which might, absent such
provision, result in a forfeiture of all or a part of such insurance payment, or
(ii) any change in title or ownership of any of the Leased Premises.
d. Payment of Premiums. Tenant shall pay as they become due all
premiums for the insurance required by this Paragraph 16, shall renew or replace
each policy, and shall deliver to Landlord such renewal or replacement policy
and evidence of the payment of the full premium therefor at least ten (10) days
prior to the expiration date of each policy. In the event of Tenant's failure to
comply with any of the foregoing requirements, Landlord shall be entitled to
procure such insurance, at Tenant's sole cost and expense. Any sums expended by
Landlord in procuring such insurance shall be repaid by Tenant within thirty
(30) days after written demand therefor by Landlord.
e. Blanket Policies. Anything in this Paragraph 16 to the contrary
notwithstanding, any insurance which Tenant is required to obtain pursuant to
Paragraph 16(a) may be carried under a "blanket" policy or policies covering
other properties or liabilities of Tenant, provided that such "blanket" policy
or policies otherwise comply with the provisions of this Paragraph 16,
f. Collection of Net Proceeds. In the event of any casualty loss,
Tenant shall give Landlord immediate notice thereof. Tenant and Landlord shall
mutually agree regarding the adjustment collection and compromise of all claims
under any of the insurance policies required by this Paragraph 16 and, subject
to the foregoing limitations, shall mutually execute and deliver all necessary
proofs of loss, receipts and vouchers required by the insurers. Both Landlord
and Tenant agree to sign, upon request of the other, all such proofs of loss,
receipts and vouchers. Any adjustment, settlement or compromise of any such
claim shall be subject to the prior written approval of Landlord, Tenant and any
Lender, and Landlord, Tenant and any Lender shall have the right to prosecute or
contest, or to require the other to prosecute or contest, any such claim,
adjustment, settlement or compromise. All proceeds of any insurance required
under clause (i) of Paragraph 16(a), plus the amount of any deductible, in no
event to exceed $100,000, shall be payable to Landlord and Tenant and shall be
deposited into a joint account for the benefit of both Tenant and Landlord.
g. Application of Net Proceeds for Restoration. Except as provided in
Paragraph 16(h) to the contrary, in the event of any casualty required to be
insured against by Tenant pursuant to Paragraph 16(a)(i) above resulting in
damage to any of the Leased Premises, the Term shall nevertheless continue [and
there shall be an] equitable abatement of the Base Rent but in no event for a
period in excess of one year from the date of the last payment of Base Rent
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prior to the date of such casualty. The Net Proceeds from such casualty, so long
as Tenant is not in default hereunder, shall be made available to Tenant in such
commercially reasonable manner as Landlord, Tenant and Lender may agree, and
Tenant, as required in Paragraph 12(a), shall commence and diligently continue
to restore the Land and Improvements as nearly as possible to their value,
condition and character immediately prior to such damage, in accordance with the
provisions of clauses (i) through (iv) of Paragraph 17(a), except as provided in
paragraph 16(h) to the contrary. Tenant, to the extent of Net Proceeds, shall
promptly repair or replace such Improvements and Equipment, in accordance with
the provisions of Paragraph 11(a).
h. Termination Right. If the Leased Premises are at any time damaged to
the extent of fifty percent (50%) or more of the value thereof or the nature and
extent of the damage makes it impractical for Tenant to conduct its prior
business activity at the Leased Premises, or if damaged to the extent of 50
percent (50%) or more of the value thereof within such time as less than one (1)
year remains in the Term or any exercised Option Term, Tenant shall have no
obligation to restore the Leased Premises if it shall give notice to Landlord of
its intent not to so restore not later than sixty (60) days after such casualty,
but all Net Proceeds due in connection with such casualty, plus any deductible,
in an amount sufficient to restore the Leased Premises to a complete operational
architectural unit shall be delivered to Landlord by the insurance company
and/or Tenant, at which time the Term of this Lease shall terminate upon such
payment and payment of all sums otherwise due and payable by Tenant hereunder
through the Base Rent Payment Date stated in Tenant's notice (the "Casualty
Termination Date). If the Leased Premises suffers damage to any extent less than
fifty percent (50%) of the value thereof or if Tenant does not elect to
terminate this Lease, the Base Rent payable by Tenant hereunder shall be
proportionately abated but in no event for a period in excess of one year from
the date of the last payment of Base Rent prior to the date of such casualty.
i. Extension of Casualty Termination Date. Notwithstanding
anything to the contrary hereinabove contained, if, prior to the
Casualty Termination Date, Landlord shall not have received the full
amount of the Net Proceeds payable by reason of the Casualty, plus any
deductible, the Casualty Termination Date shall automatically be
extended to the date of receipt by Landlord of the full amount of the
Net Proceeds.
ii. Waiver of Subrogation. Landlord and Tenant hereby agree
that to the extent that a loss at the Leased Premises is covered by
insurance, including any deductible, they each hereby waive any and all
rights of subrogation against the other for any loss or damage; and
each party's aforesaid policies of insurance shall contain appropriate
provisions recognizing this mutual release and waiving all rights of
subrogation by the respective insurance carriers.
17. Restoration.
a. Regiment for Disbursement of Net Proceeds. In the event that Net
Proceeds are made available to Tenant for the restoration of any of the Land or
Improvements, Tenant shall commence and complete such restoration as soon as
reasonably practicable, except as may be otherwise elected by Tenant under
16(h). The Net Proceeds shall disburse such proceeds or award only in accordance
with the following conditions.
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i. Prior to commencement of restoration, the architects,
contracts, contractors, and plans and specifications for the
restoration shall have been approved by Landlord. which approval shall
not be unreasonably withheld;
ii. disbursements shall be made from time to time in as mount
not exceeding the cost of the work completed since the last
disbursement upon receipt of (1) an architect's certificate of the
performance of the work to date in a good and workmanlike manner in
accordance with the contracts, plans and specifications, (2) waivers of
liens, (3) contractors' and subcontractors' sworn statements (as to the
final disbursement only), (4) a satisfactory bring down of title
insurance (as to the final disbursement only), and (5) at the time of
the final disbursement, evidence of issuance of a certificate of
occupancy (or availability of the same subject to completion of
"punchlist" and minor items) and compliance with Legal Requirements;
iii. each request for disbursement shall be accompanied by a
certificate of Tenant, signed by the President or any Vice President of
tenant, describing the work for which payment is requested, stating the
cost incurred in connection therewith and stating that Tenant has not
previously received payment for such work and the certificate to be
delivered by Tenant upon completion of the work shall, in addition,
state that the work has been completed and complies with the applicable
requirements of this Lease;
iv. the restoration fund shall be kept in a separate
interest-bearing account by Tenant; and
In addition, prior to commencement of casualty restoration and at any
time during casualty restoration, if the estimated cost of restoration, as
reasonably determined by Landlord, exceeds the amount of the Net Proceeds
available for such restoration, the amount of such excess shall be paid by
Landlord to be added to the restoration fund. Any sum in the restoration fund
added by Landlord which remains in the restoration fund upon the completion of
restoration shall be returned to Landlord. For purposes of determining the
source of funds with respect to the disposition of funds retraining after the
completion of restoration, the Net Proceeds shall be deemed to be disbursed
prior to any amount added by Landlord.
b. Excess Net Proceeds. In the event that there are funds not added by
Landlord remaining undisbursed upon completion of restoration and full payment
therefor (the "Remaining Sum") then such sum shall be credited to Base Rent
subsequently accruing hereunder.
18. Subordination to Financing. Tenant agrees that this Lease shall at all times
be subject and subordinate to the lien of any Mortgage, and Tenant agrees, upon
demand, without cost, to execute instruments as may be reasonably required to
further effectuate or confirm such subordination, including the Subordination,
Non-Disturbance and Attornment Agreement and Estoppel Certificate attached as
Exhibit "B," provided, however, as a condition to this subordination, so long as
Tenant shall faithfully discharge the obligations on its part to be kept and
performed under the terms of this Lease, Tenant's tenancy shall not be
disturbed, nor shall this Lease be affected by any default under such Mortgage,
and in the event of a foreclosure or other enforcement of any such Mortgage, or
sale in lieu thereof, the purchaser at such foreclosure sale shall be bound to
Tenant for the term of this Lease and any extensions thereof, the rights of
15
Tenant hereunder shall expressly survive, and this Lease shall in all respects
continue in full force and effect so long as Tenant fully performs all of its
obligations hereunder. Tenant shall not be named as a Party defendant in any
such foreclosure suit, except as may be required by law. Landlord covenants to
use reasonable efforts to obtain a non-disturbance agreement, as described
above, from each mortgagee of Landlord.
Tenant agrees that, simultaneously with the giving of notice to
Landlord, it will give notice to any holder of a mortgage encumbering the Leased
Premises, provided that Tenant has been notified in writing of the frame and
address of such mortgage holder, of any defaults of the Landlord or other
circumstances which would entitle Tenant to terminate this Lease specifying the
nature of the default by Landlord, and thereupon the holder of the Mortgage
shall have the right, but not the obligation, to cure any such default by
Landlord, and Tenant will not terminate this of Lease by reason of such default
unless and until it has afforded the mortgage holder the time to cure such
default afforded to Landlord hereunder. No such Lender shall, upon assuming
title to the Leased Premises, be liable for any act or omission of any prior
landlord (including Landlord), be subject to any offsets or defenses which
Tenant may have against any prior landlord, be bound by any rent or additional
rent paid for more than the then current period to any prior landlord, or be
bound by any agreement or modification of this Lease made without such Lender's
consent after Tenant has been given written notice of such Lender's assumption
of title to the Leased Premises. Nothing herein shall be conspired to be in
conflict with the provisions of Paragraph 7 hereof.
19. Assignment, Subleasing and Abandonment.
a. Tenant shall not assign this Lease or sublet all or any portion of
the Leased Premises without the prior written consent of Landlord, which consent
shall not be unreasonably withheld.
b. The consent by Landlord to any assignment or subletting, shall not
constitute a waiver of the necessity for such consent to any subsequent
attempted assignment or subletting, nor shall it relieve Tenant from its
covenants and obligations under the Lease. Receipt by Landlord of rental due
hereunder from any party other than Tenant shall not be deemed to be a consent
to any such assignment or subletting, nor relieve Tenant of its obligation to
pay rental or other charges for the full term of this Lease.
c. Each transfer, assignment, subletting, license or concession
agreement and hypothecation to which there has been consent shall be by
instrument in writing, in form satisfactory to Landlord, and shall be executed
by the transferor, assignor, sublessor, licensor, concessionaire, hypothecator
or mortgagor, and the transferee, assignee, sublessee, concessionaire, or
mortgagee shall agree in writing for the benefit of the Landlord to assume, be
bound by, and perform the terms, covenants and conditions of this Lease to be
done, kept and performed by Tenant and to retain all accounting records which
Tenant is obligated to retain hereunder. One executed copy of such written
instrument shall be delivered to Landlord. Each transfer, assignment,
subletting, license or concession agreement between Tenant and the transferee,
assignee, sublessee, licensee or concessionaire, shall specifically obligate
such third party to observe and perform all of the obligations of this Lease and
indicate that Landlord has the right to audit such other parties in accordance
with the terms of this Lease.
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d. Unless expressly consented to in writing which consent shall not be
unreasonably withheld, no assignment or subletting shall operate to relieve the
Tenant from its obligation for the performance of all terms and conditions of
this Lease, including the obligation to pay rent and all of the other terms,
covenants and conditions of this Lease shall continue in full force and effect
and unamended.
20. Permitted Contents. Tenant shall not be required to (i) pay any Imposition,
(ii) comply with any Legal Requirement, (iii) discharge or remove any lien
referred to in Paragraphs 9 or 14, or (iv) take any action with respect to any
encroachment, violation, hindrance, obstruction or impairment so long as Tenant
shall contest, in good faith and at its expense, the existence, the amount or
the validity thereof, the amount of the damages caused thereby, or the intent of
its or Landlord's liability therefor, by appropriate proceedings which shall
operate during the pendency thereof to prevent (i) the collection of, or other
realization upon, the Taxes or lien so contested, (ii) the sale, forfeiture or
loss of any of the Leased Premises, any Base Rent to satisfy the same or to pay
any damages caused by the violation of any such Legal Requirement or by any such
encroachment, violation, hindrance, obstruction or impairment, (iii) any
interference with the use or occupancy of any of the Leased Premises, (iv) any
interference with the payment of any Base Rent, and (v) the cancellation of any
fire or other insurance policy. Tenant shall provide Landlord security
satisfactory in the reasonable opinion of Landlord assuring the payment,
compliance, discharge, removal or other action, including all costs, attorneys'
fees, interest and penalties, in the event that the contest is unsuccessful.
While any such proceedings are pending and the required security is held by
Landlord, Landlord shall not have the right to pay, remove or cause to be
discharged the Taxes or lien thereby being contested. Tenant further agrees that
each such contest shall be promptly and diligently prosecuted to a final
conclusion, except that Tenant shall, so long as the conditions of the first
sentence of this Paragraph are at all times complied with, have the right to
attempt to settle or compromise such contest through negotiations. Tenant shall
pay and save Landlord harmless against any and all losses, judgments, decrees
and costs (including all attorneys' fees and expenses) in connection with any
such contest and shall, promptly after the final determination of such contest,
fully pay and discharge the amounts which shall be levied, assessed, charged or
imposed or be determined to be payable therein or in connection therewith,
together with all penalties, fines, interest, costs and expenses thereof or in
connection therewith, and perform all acts the performance of which shall be
ordered or decreed as a result thereof. No such contest shall subject Landlord
to the rink of any civil or criminal liability.
21. Remedies.
a. Events of Default. The occurrence of any one or more of the f
allowing shall constitute an Event of Default under this Lease:
i. a failure by Tenant to make (regardless of the pendency of
any bankruptcy, reorganization, receivership, insolvency or other
proceedings, in law, in equity or before any administrative tribunal,
which had or might have the effect of preventing Tenant from complying
with the provisions of this Lease) any payment of Base Rent or other
sum herein required to be paid by Tenant when due, following ten (10)
day written notice thereof, without cure;
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ii. a failure by Tenant to duly perform and observe, or a
violation or breach of any other provision hereof, following thirty
(30) day written notice thereof, without cure. If the nature of such
default is such that it cannot be fully resolved within the stated
curative period, Tenant shall be deemed to have cured such default if
it commences curative measures within the stated period and diligently
pursues remedial action until the default is cured in full;
iii. Tenant shall (1) voluntarily be adjudicated a bankrupt or
insolvent, (2) seek or consent to the appointment of a receiver or
trustee for itself or for any of the Leased Premises, (3) file a
petition seeking relief under the bankruptcy or other similar laws of
the United States, any state or any jurisdiction, (4) make a general
assignment for the benefit of creditors, or (5) be unable to pay its
debts as they mature;
iv. a court shall cater an order, judgment or decree
appointing, with the consent of Tenant, a receiver or trustee for it or
for any of the Leased Premises or approving a petition filed against
Tenant which seeks relief under the bankruptcy or other similar laws of
the United States, any state or any jurisdiction, and such order,
judgment or decree shall remain in force, undischarged or unstayed,
sixty (60) days after it is entered;
v. the Leased Premises shall have been abandoned;
vi. Tenant shall be liquidated or dissolved or shall begin
proceedings towards its liquidation or dissolution; or
vii. the estate or interest of Tenant in any of the Leased
Premises shall be levied upon or attached in any proceeding and such
estate or interest is about to be sold or transferred or such process
shall not be vacated or discharged within sixty (60) days after such
levy or attachment.
b. Remedies. If an Event of Default shall have occurred, Landlord hall
have the right at its option, then or at any time thereafter, to do any one or
more of the following:
i. Landlord may give Tenant notice of Landlord's intention to
terminate this Lease on a date specified in such notice. Upon the date
therein specified, the Term and the estate hereby granted and all
rights of Tenant hereunder shall expire and terminate as if such date
were the date hereinbefore fixed for the expiration of the Term, but
Tenant shall remain liable for all its obligations hereunder through
such date, including its liability for Base Rent and any additional
amounts due from Tenant hereunder as hereinafter provided.
ii. Landlord may, whether or not the Term of this Lease stall
have been terminated pursuant to clause (1) above, (i) give Tenant
notice to surrender any of the Leased Premises to Landlord immediately
or on a date specified in such notice, at which time Tenant shall
surrender and deliver possession of the Leased Premises to Landlord, or
(ii) re-enter and repossess any of the Leased Premises as allowed by
law. Upon or at any time after taking possession of any of the Leased
Premises, Landlord may remove any persons or property therefrom.
Landlord shall be under no liability for or by reason of any such
entry, repossession or removal, except as a result of Landlord's
negligence or willful misconduct. No such entry or repossession shall
be construed as an election by Landlord to terminate this Lease unless
Landlord gives a written notice of such intention to Tenant pursuant to
clause (1) above.
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iii. After repossession of any of the Leased Premises or in
the event of termination of Tenant's right of possession pursuant to
clause (2) above, whether or not this Lease shall have been terminated
pursuant to clause (1) above, Landlord shall have the right to relet
the Leased Premises or any part thereof to such tenant or tenants for
such term or terms (which may be greater or less than the period which
would otherwise have constituted the balance of the Term) for such
rent, on such conditions and for such uses as Landlord, in its absolute
discretion, may determine; and Landlord may collect and receive any
rents payable by reason of such reletting. Landlord shall use
reasonable efforts to mitigate damages.
iv. Landlord may exercise any other right or remedy now or
hereafter existing by Law or in equity.
c. Tenant Not Relieved. No expiration or termination of this Lease
pursuant to Paragraph 21(b)(1) or any other provision of this Lease, by
operation of law, repossession of the Leased Premises pursuant to Paragraph
21(b)(2) or otherwise, or reletting of any of the Leased Premises pursuant to
Paragraph 21(6)(3), shall relieve Tenant of any of its liabilities and
obligations hereunder, including the liability for Base Rent, all of which shall
survive such expiration, termination, repossession or reletting.
d. Damages. In the event of any expiration or termination of this Lease
or repossession of any of the Leased Premises by reason of the occurrence of an
Event of Default, Tenant shall pay to Landlord any and all damages to which
Landlord is entitled by Law including court costs and attorney's fees, less the
net proceeds, if any, of any reletting pursuant to paragraph 21(b)(3), after
deducting from such proceeds all of Landlord's reasonable expenses in connection
with such reletting (including repossession costs, brokerage commissions,
attorneys' fees, and expenses of preparation for reletting). Tenant hereby
agrees to be and remain liable for all sums aforesaid, and Landlord may recover
such damages from Tenant and institute and maintain successive actions or legal
proceedings against Tenant for the recovery of such changes. Nothing herein
contained shall be deemed to require Landlord to wait to begin such action or
other legal proceedings until the date when the Term would have expired by
limitation had there been no such Event of Default.
e. Notice Cure. Before an Event of Default shall exist under this
Paragraph 21 or any other Paragraph hereof by reason of an Event of Default
under subparagraph (a) of this ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ shall have given Tenant
notice thereof and Tenant shall have failed to cure the Default within the
applicable grace period stated as stated in paragraph 21 above.
f. Attorney's Fees. if any action is commenced to enforce any provision
of this Lease, Landlord shall be entitled to recover from Tenant such reasonable
attorneys' fees and costs incurred by Landlord in the action.
22. Additional Rights of Landlord and Tenant. No right or remedy herein
conferred upon or reserved to Landlord is intended to be exclusive of any other
right or remedy and each and every right and remedy shall be cumulative and to
addition to any other right or remedy contained in this Lease. No delay or
failure by Landlord to enforce its rights hereunder shall be construed as a
waiver, modification or relinquishment thereof. In addition to the other
remedies provided in this Lease, Landlord shall be entitled, to the extent
permitted by applicable law, to injunctive
19
relief in case of the violation or attempted or threatened violation of any of
the provisions of this Lease, or to specific performance of any of the
provisions of this Lease.
23. Notices. All notices, demands, requests, consents, approvals, offers,
statements and other instruments or communications required or permitted to be
given pursuant to the provisions of this Lease shall be in writing and shall be
deemed to have been given for all purposes when delivered in person or when
received from overnight courier service or United States mail, by registered or
certified mail, return receipt requested, postage prepaid, addressed to the
other party at its address stated above; provided, however, if delivery is
refused, the notice date shall be deemed to be the first date delivery is
refused. For the purposes of this Paragraph, any party may substitute its
address by giving fifteen days' notice to the other party in the manner provided
above. Any notice alleging default by Landlord shall also be sent to any holder
of a mortgage as required by Paragraph 18 hereof.
24. Estoppel Certificate. Landlord and Tenant shall, at any time and from time
to time upon not less than thirty (30) days' prior written request by the other,
execute, acknowledge and deliver to the other a statement in writing, executed
by a President, Vice President or authorized general partner certifying (i) that
this Lease is unmodified and in full effect (or, if there have been
modifications, that this Lease is in full effect as modified, setting forth such
modifications), (ii) the dates to which Base Rent and all other sums payable
hereunder have been paid, (iii) that to the knowledge of Landlord or Tenant, as
the case may be, of such certificate no default by either Landlord or Tenant
exists hereunder or specifying each such default of which the signer may have
knowledge. It is intended that any such statements may be relied upon by
Landlord, the recipient of such statements or their assignees or by any
prospective purchaser of or Lender on the Leased Premises.
25. Surrender and Holding Over. Upon the expiration or earlier termination of
this Lease, Tenant shall peaceably leave and surrender the Leased Premises
(except for any portion thereof with respect to which this Lease has previously
terminated) to Landlord in the same condition in which the Leased Premises were
originally received from Landlord at the commencement of this Lease, except as
repaired, rebuilt, restored, altered, replaced or added to as permitted or
required by any provision of this Lease, Tenant may remove from the Land and
Improvements on or prior to such expiration or earlier termination all personal
property, trade fixtures, machinery and equipment owned by Tenant situated
thereon which is owned by Tenant or third parties other than Landlord, and
Tenant at its expense shall, on or prior to such expiration or earlier
termination repair any damage caused by such removal. Property not so removed at
the end of the Term or within thirty (30) days after the earlier termination of
the Term for any reason whatsoever shall become the property of Landlord, and
Landlord may thereafter cause such property to be removed from the Leased
Premises. The cost of removing and disposing of such property and repairing any
damage to any of the Leased Premises caused by such removal shall be borne by
Tenant. Landlord shall not in any manner or to any extent be obligated to
reimburse Tenant for any property which becomes the property of Landlord as a
result of such expiration or earlier termination. Tenant shall not commit waste
of the Leased Premises.
Any holding over by Tenant of the Leased Premises after the expiration
or earlier termination of the Term of this Lease or any extensions thereof shall
operate and be construed as a tenancy from month to month only, at one hundred
fifty percent (150%) of the Base Rent
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reserved herein and upon the same terms and conditions as contained in this
Lease. Notwithstanding the foregoing, any holding over shall entitle Landlord,
in addition to collecting rentals, to exercise all rights and remedies provided
by law or in equity, including the remedies of Paragraph 21(b).
26. Risk of Loss. The risk of loss or of decrease in the enjoyment and
beneficial use of any of the Leased Premises in consequence of the damage or
destruction thereof by fire, the elements, casualties, thefts, riots, wars or
otherwise, or in consequence of foreclosure, attachments, levies or executions
(other than by Tenant and those claiming from, through or under Tenant) is
assumed by Landlord, and Tenant shall in no event be answerable or accountable
therefor except for Tenant's obligations to obtain insurance as provided herein
and except where Tenant has acted negligently or engaged in other tortious or
criminal conduct.
27. No Merger of Title. "There shall be no merger of this Lease nor of the
leasehold estate created by this Lease with the fee estate in or ownership of
any of the Leased Premises by reason of the fact that the same person,
corporation, firm or other entity may acquire of hold or own, directly or
indirectly, (a) this Lease or the leasehold estate created by this Lease or any
interest in this Lease or in such leasehold estate, and (b) the fee estate or
ownership of any of the Leased Premises or any interest in such fee estate or
ownership. No such merger shall occur unless and until all persons,
corporations, firms and other entities having any interest in (i) this Lease or
the leasehold estate created by this Lease, and (ii) the fee estate in or
ownership of the Leased Premises or any part thereof sought to be merged shall
join in a written instrument effecting such merger and shall duly record the
same.
28. Force Majeure. In the event either party shall be delayed or hindered in, or
prevented from, the performance of any act required under this Lease by reason
of strikes, lock-outs, labor troubles, inability to procure materials, fire or
other catastrophe, failure of power, an act of the other party, riots,
insurrection, war or other reason of like nature beyond the reasonable control
of the party delayed in performing work or doing acts required hereunder, then
to performance of such act shall be excused for the period of the delay and the
period for the performance of such act shall be extended for a period equivalent
to the period of such delay. However, except as otherwise provided in this
Lease, thus paragraph shall not operate to excuse Tenant, nor shall Tenant in
any event be excused, from prompt payment of any Base Rent or additional rent or
other charges due Landlord from Tenant or to excuse either party from their
respective obligations to carry insurance as required under this Lease.
29. Limitation on Right of Recovery Against Landlord. It is specifically agreed
that Landlord shall not be personally liable for any of the covenants,
conditions or provisions of this Lease. In the event of a breach or default by
Landlord under any of its obligations under this Lease, Tenant shall look solely
to the equity of the Landlord in the Leased Premises for the satisfaction of
Tenant's remedies. The limitations on Tenant's right of recovery against the
Landlord set forth in this Section 29 shall survive the expiration of the Term
of this Lease (whether by lapse of time or otherwise).
30. Attornment. If any person shall succeed to all or part of Landlord's
interest in the Leased Premises, whether by purchase foreclosure, deed in lieu
of foreclosure, power of sate, termination of Lease or otherwise, and if and as
so requested or required by such successor and
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interests, Tenant shall, without charge, attorn to such successor in interest;
provided said successor accepts the Property subject to this Lease and agrees to
abide by all terms and conditions of the Lease, although such successor shall
not be liable for defaults under the Lease occurring or accruing prior to the
time such successor succeeds to the interest of Landlord under the Lease.
31. Environmental Provisions.
a. Definitions. The following definitions shall apply to this Paragraph
29:
i. "Hazardous Material" means any substance:
(a) the presence of which requires investigation or
remediation under any applicable federal, state or local
statute, regulation, ordinance, order, action, policy or
common law; or
(b) which is or becomes defined as a "hazardous
waste", "hazardous substance", pollutant or contaminant under
any federal, state or local statute, regulation, rule or
ordinance now or hereafter in effect, including without
limitation the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. ss. 9601 et seq.)
and/or the Resource Conservation and Recovery Act (42 U.S.C.
ss. 9601 et seq.); or
(c) which is or contains gasoline, diesel fuel or
other petroleum hydrocarbons; polychlorinated biphenyls
(PCB's), asbestos, urea formaldehyde foam insulation or radon
gas.
ii. "Environmental Requirements" means all applicable
statutes, regulations, rules, ordinances, codes, licenses, permits,
orders, approvals, plans, authorizations and similar items of all
governmental agencies, departments, commissions, boards, bureaus or
instrumentalities of the United States, states and political
subdivisions thereof and all applicable judicial, administrative and
regulatory decrees, judgments and orders relating to the protection of
human health or the environment, both as of the date hereof and during
the Term hereof.
iii. "Environmental Damages" means all remediation costs,
penalties, fines, liens, costs and expenses of investigation and
defense of any claims which are incurred at any time as a result of the
existence of Hazardous Materials upon, about or beneath the Leased
Premises or the existence of a violation of Environmental Requirements
pertaining to the Leased Premises.
b. Environmental Covenants of Tenant. Tenant covenants, represents
and/or warrants to Landlord, which covenants, representations and warranties
shall survive the Term and are material and are being relied upon by Landlord,
that:
i. Tenant shall comply with all Environmental Requirements
relating to the Leased Premises excluding, however, any such Hazardous
Materials present as the result of the acts of Landlord or its
employees, agents or contractors and Tenant shall not cause or permit
any Hazardous Materials to be brought upon, kept or used in, on, under
or about, the Leased Premises by persons within its control in
violation of Environmental Requirements. Without
22
limiting the foregoing, if the presence of any Hazardous Materials is
discovered on the Leased Premises, except as attributed to the acts of
Landlord, its employees, agents or contractors, Tenant shall promptly
take all actions at its sole expense as are necessary to comply with
applicable Environmental Requirements. Tenant shall promptly notify
Landlord of Tenant's receipt of any report, citation, notice or other
writing (and deliver a copy thereof to Landlord on the written request
of Landlord) by, to or from any governmental or quasi-governmental
authority in any way related to the unlawful presence or suspected
unlawful presence of Hazardous Materials at, on or under the Leased
premises.
ii. Tenant represents that, to its current actual knowledge,
there does not now exist in, on, under, about, emanate from, or
originate at the Leased Premises any Hazardous Materials in violation
of the Environmental Requirements, and Tenant is not aware of the
transportation to or from the Leased Premises of any Hazardous
Materials in violation of the Environmental Requirements.
c. Tenant Obligation to Indemnify. If Tenant breaches its covenants,
representations or warranties under subsection (b) above, or if Hazardous
Materials are brought upon, kept or used on the Leased Premises by Tenant or its
employees, agents or contractors resulting in contamination of the Leased
Premises, then Tenant shall indemnity, defend and hold harmless Landlord from
and against Environmental Damages which arise as a result of Tenant's breach of
subsection (b) above or such contamination unless and to the extent such
Environmental Damages arc caused by any act of Landlord, its agents, employees
or contractors. This Section shall survive the termination of the Lease.
32. Miscellaneous.
a. Headings. The paragraph headings in this Lease are used only for
convenience in finding the subject matters and are not part of this Lease or to
be used in determining the intent of the parties or otherwise interpreting this
Lease.
b. Gender; Meanings. As used in this Lease the singular shall include
cite plural as the context requires, and the following words and phrases shall
have the following meanings: (a) "including" shall mean "including but not
limited to"; (b) "provisions" shall mean "provisions, terms, agreements,
covenants and/or conditions"; (c) "lien" shall mean "lien, charge. encumbrance,
title retention agreement, pledge, security interest, mortgage and/or deed of
trust"; (d) "obligation" shall mean "obligation, duty, agreement, liability,
covenant or condition"; (e) any of the Leased Premises" shall mean "the Leased
Premises or any part thereof or interest therein"; (f) "any of the land" shall
mean "the Land or any part thereof or interest therein"; and (g) "any of the
Improvements" shall mean "the Improvements or any part thereof or interest
therein".
c. Agency. Any act which Landlord is permitted to perform under this
Lease may be performed by Landlord or any person or entity designated by
Landlord. Unless otherwise provided in this Lease, any act which Tenant is
required to perform under this Lease shall be performed at Tenant's sole cost
and expense.
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d. Landlord's Consent. Landlord has the right to refuse to grant its
consent whenever such consent is required under this Lease.
e. Modifications. This Lease may be modified, amended, discharged or
waived only by an agreement in writing signed by the party against whom
enforcement of any such modification, amendment, discharge or waiver is sought.
f. Covenants Running with Land; Binding Effect. The covenant of this
Lease shall run with the Land and bind Tenant, its successors and assigns, and
all present and subsequent encumbrances and subtenants of any of the Leased
Premises, and shall inure to the benefit of and bind Landlord, its successors
and assigns. In the event there is more than one Tenant, the obligation of each
shall be joint and several.
g. Invalidity. In the even any one or more of the provisions contained
in this Lease shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegally or unenforceability
shall not affect any other provision of this Lease but this Lease shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.
h. Counterparts. This Lease will be simultaneously executed in several
counterparts, and may be executed by facsimile, each of which when so executed
and delivered shall constitute an original, fully enforceable counterpart for
all purposes.
i. Governing Law. This Lease shall be governed by and construed
according to the Laws of the State of Utah.
j. Severability. If any term or provision of this Lease or the
application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Lease, or the application of
such term or provision to persons or circumstances, other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Lease shall be valid and be enforced to the fullest
extent permitted by law.
k. Continuing Obligation. Notwithstanding anything to the contrary in
this Lease, Tenant agrees that should it be unable to use the Leased Premises
for the uses intended hereunder on account of the failure to obtain or possess a
conditional use permit allowing such uses, its obligations hereunder, including,
but not limited to, the obligation to pay Base Rent, shall nonetheless continue
in full force and effect.
IN WITNESS WHEREOF, Landlord and Tenant have caused this instrument to
be executed as of the day and year first above written.
LANDLORD ▇▇▇▇▇▇▇-RIVERWOODS COMPANY, L.L.C.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Its: Manager
-------------------------------------
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TENANT NACT TELECOMMUNICATIONS,
INC. A DELAWARE CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Its: President
-------------------------------------
25
EXHIBIT "A"
Description of Leased Premises
A portion of ▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇-▇, ▇▇▇▇▇▇▇▇▇▇ Research and Business Park, a
planned unit development, described as follows:
Beginning at a point on the 50 foot setback line of Provo River High Bank and
the Southerly right of way line of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, which point is South
00(degree)45'09" East along the Section Line 635.65 feet and West 527.71 feet
from the Northeast corner of Section 13, Township 6 South, Range 2 East, Salt
Lake Base and Meridian; thence South 06(degree)56'37" West along said setback
line 124.07 feet; thence South 13(degree)25'37" West along said setback line
126.91 feet; thence South 12(degree)00'49" West along said setback line 113.16
feet; thence South 06(degree)03'23" West along said setback line 124.23 feet;
thence North 75(degree)36'24" West 391.78 feet; thence North 14(degree)49'05"
East 240.54 feet; thence South 75(degree)28'32" East 23.90 feet; thence North
10(degree)46'21" East 265.66 feet to the Southerly right of way line of said
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇; thence along said right of way and along the arc of a 335.09
foot radius curve to the right 8.60 feet; through a central angle of
01(degree)28'14" the chord of which bears South 44"24'50" East 8.60 feet; thence
along said right of way and along the arc of 280.61 foot radius curve to the
left 202.79 feet, through a central angle of 41(degree)24'23" the chord of which
bears South 64(degree)22'55" East 198.41 feet; thence South 85(degree)05'05"
East along said right of way 141.10 feet to the Point of Beginning.