Exhibit 10.2
COMMERCIAL/INDUSTRIAL LEASE
LEASE OF SPACE AT 0000 XXXXX 000 XXXX, XXXXXXX, XXXX 00000.
DATED AS OF September 16, 1996.
1. TERMS DEFINED
Each reference in this Lease to any of the following terms shall mean:
1.1 Lessor. Seventy Second South Partnership, a Utah Limited Partnership.
1.2 Lessor's Address. 000 Xxxx 0000 Xxxxx, Xxxxx, Xxxx 00000
1.3 Lessee. Flexpoint, Incorporated, a Utah corporation
1.4 Lessee's Address. 0000 Xxxxx 000 Xxxx, Xxxxxxx, Xxxx 00000
1.5 Building Address. 0000 Xxxxx 000 Xxxx, Xxxxxxx, Xxxx 00000
1.6 Lessee's Floor Space ("Premises"). 100% percent of building.
1.7 Total Rentable Floor Space. 10,500 square feet.
1.8 Lease Term. Commencing on the Scheduled Term Commencement Date and
ending on October 31, 1999.
a. Scheduled Term Commencement Date. October 15, 1996.
1.9. Rent.
1.9.1 Prepaid Rent. $2,723.00 (See Exhibit "D")
1.9.2 Monthly Rent. $4,965.00 (includes Imposition Base
and Operating Expense
Base)
1.9.3 Lessee's Share of Imposition. 100%
1.9.4 Imposition Base. $356.00 Per month
1.9.5 Lessee's Share of Operating Expense. 100%
1.9.6 Operating Expense Base. $127.00 Per month
(Operating Expense Base does not include
trash removal costs and does not include
snow removal costs).
1.9.7 Security Deposit. $6,000.00
1.10 Permitted Uses. General officing, warehousing, distribution,
research, development, and manufacturing.
1.11 Acknowledgment of Ground Lease. Parties hereto acknowledge the
existence of a ground lease executed between Joffs, Inc. and Seventy Second
South Partnership on March 21, 1979.
1.12 Limits of Comprehensive Liability Insurance: For injury or death to a
single person and property damage - $1,000,000 combined coverage.
1.13 Exhibits: The following are attached hereto and incorporated herein
by reference:
EXHIBIT A - Building/Lot Plan (as highlighted)
EXHIBIT B - Improvements to be made by Lessor
EXHIBIT C - Services to be performed by Lessor
EXHIBIT D - Rider to Lease
.2 PREMISES AND TERMS
2.1 Premises. Lessor hereby leases to Lessee, subject to and with the
benefit of the provisions of this lease, Lessee's Floor Space ("Premises") in
the Building.
2.2 Common Area. Lessee shall have, as appurtenant to the Premises,
rights to use in common, subject to reasonable rules from time to time made by
Lessor of which Lessee is given notice:
2.3 Land Common Area: Common walkways, sidewalks, and driveways necessary
for access to the Building, landscaping and parking spaces or area, from time
to time maintained on the real property upon which the building is situated
("Lot"), and to the extent from time to time arranged by Lessor, on adjacent
property at Lessor's own discretion.
2.4 Lessor's Reserved Rights in Common Area. Lessor reserves the right
from time to time, without unreasonable interference with Lessee's use, to
alter and relocate any common facility; provided however, that the
substitutions are substantially equivalent or better in quality.
2.5 Term. The Lease Term shall commence on the Scheduled Term
Commencement Date and shall continue until the end of the Lease Term, unless
extended pursuant to Section 4.1 or unless sooner terminated as herein
provided.
3. RENT
3.1 Rent, Monthly Payment. Lessee shall pay Lessor Monthly Rent, in
advance on the first day of each calendar month, for each full calendar month
of the Lease Term and for the appropriate fraction of a calendar month at the
beginning and end of the Lease Term.
3.2 Rent Escalation. See Exhibit "D"
3.3. Rental Tax; Cost and Expenses. Lessee shall pay when due, taxes
levied or assessed against Lessor by reason of this Lease on the rent or any
other payment required to be made hereunder whether said taxes are assessed
solely on the rental payment hereunder or jointly with other rentals collected
pursuant to law or ordinance existing or hereafter enacted (other than taxes
levied on the net income to Lessor derived therefrom as part of a state or
federal income tax law applicable to Lessor's income generally).
3.4 Operating Expense Escalation. Lessee shall pay Lessor, as additional
rent, Lessee's Share of Operating Expense, multiplied by the amount, if any,
by which the Operating Expenses increase over the Operating Expense Base. The
amount due Lessor hereunder if any shall be estimated by Lessor annually and
such estimate shall be payable to Lessor in monthly installments over such
year. At year end, the actual Operating Expenses incurred during that year
shall be determined by Lessor, and any adjustment in such estimate shall be
made, with additional payments by or refunds to Lessee, as appropriate.
"Operating Expense" shall include reasonable and necessary expenses incurred
by Lessor for the insurance of the Building and the , maintenance and
insurance of the Land Common Area.
3.5 Imposition Escalation; Personal Property Taxes. Lessee shall pay to
Lessor, as additional rent, Lessee's Share of Imposition multiplied by the
amount, if any, by which the Imposition increases over the Imposition Base.
The amount due Lessor hereunder, if any, shall be estimated by Lessor
annually, and such estimate shall be payable to Lessor in monthly installments
over such year. At year end the actual imposition shall be determined by
Lessor, and any adjustment in such estimate shall be made, with appropriate
additional payments by or refunds to Lessee, as appropriate. "Imposition"
shall mean any form of real estate tax, assessment, license fee, levy penalty
or tax (other than inheritance, rental, income, or estate taxes) imposed by
any authority or agency having the direct or indirect power to tax. Lessee
shall also pay all personal property taxes in full for its personal property
on the Premises or used in connection therewith.
3.6 Proration First and Last Year. If the first or the final Lease years
shall contain less than twelve months, the additional rent payable under
Section 3.3, 3.4 and 3.5 for such lease years shall be prorated. Lessee's
obligation to pay additional rent for the final lease year shall survive the
expiration of the term of this Lease.
3.7 Late Charges. Lessee hereby acknowledges that late payment by Lessee
to Lessor of rent or other sums due hereunder will cause Lessor to incur costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed upon
Lessor by terms of any mortgage or trust deed covering the premises.
Accordingly, if any monthly rent, additional rent or any other sum due from
Lessee shall not be received by Lessor or Lessor's designee within ten (10)
days after that said amount is due, then Lessee shall pay to Lessor a late
charge equal to ten (10) percent of such overdue amount, plus any attorney's
fees incurred by Lessor by reason of Lessee's failure to pay rent and/or other
charges when due hereunder. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the cost that Lessor will incur
by reason the late payment by Lessee. Acceptance of such late charge by the
Lessor shall in no event constitute a waiver of Lessee's default with respect
to such overdue amount, nor prevent Lessor from exercising any of the other
rights and remedies granted hereunder.
3.8 Security Deposit. The Security Deposit deposited by Lessee with
Lessor shall be held by Lessor as security for the faithful performance by
Lessee of all the terms, covenants and conditions of this Lease to be kept and
performed by Lessee during the term hereof. If Lessee defaults with respect to
any provision of this Lease, including, but not limited to the provisions
relating to the payment of rent, Lessor may (but shall not be required to )
use, apply or retain all or any part of this security deposit for the payment
of any rent or any other sum in default, or for the payment of any amount
which Lessor may spend or become obligated to spend by reason of Lessee's
default, or to compensate Lessor for any other loss or damage which Lessor may
incur by reason of Lessee's default. If any portion of said deposit is so
used or applied, Lessee shall, within five (5) days after written demand
therefore, deposit cash with Lessor in an amount sufficient to restore the
security deposit to its original amount and Lessee's failure to do so shall be
a default under this Lease. Lessor shall not be required to keep this
security deposit separate from its general funds and Lessee shall not be
entitled to interest on such deposit. If Lessee shall fully and faithfully
perform every provision of this Lease to be performed by it, the security
deposit, or any balance thereof shall be returned to Lessee, or at Lessor's
option, to the last assignee of Lessee's interest hereunder) within ten (10)
days following expiration of the Lease Term. In the event of assignment of
Lessor's interest in this Lease, Lessor shall transfer said deposit to
Lessor's successor in interest.
4. ALTERATIONS/CONSTRUCTION
4.1 Lessor's Improvements. The Lessor shall not be required to make any
alterations, improvements or additions in or about the Premises, unless, and
only to the extent specifically listed on Exhibit "B" hereto.
4.2 Completion. In the event Lessor is so required to improve the
Premises as listed on Exhibit "B" , Lessor agrees to use due diligence to have
the Premises ready for occupancy on or before the Scheduled Term Commencement
Date. In case of delays due to inclement weather, governmental regulation,
inability to obtain labor or materials, labor difficulties, casualty, acts of
God or other causes beyond Lessor's reasonable control, the Scheduled Term
Commencement Date and the Lease Term shall be extended by a period equal to
such delays without liability on the part of Lessor. If the Premises are not
ready for occupancy at the end of said extension, Lessee's sole right shall be
to terminate this Lease and Lessor shall in no case be liable for failure to
have the Premises ready for occupancy.
4.3 Lessee's Alterations; Trade Fixtures.
a. The Lessee shall not make any alterations, improvements, additions or
utility installations (including power panels) in or about the Premises
without the prior consent of the Lessor in writing, which shall not be
unreasonably withheld. If consented to by the Lessor, those alterations,
improvements, additions or utility installations shall be performed at the
sole cost and expense of the Lessee in compliance with all applicable
statutes, ordinances and regulations. Upon expiration of the term of the
Lease, they shall be considered a part of the Building and remain therein
unless the Lessor shall request their removal, in which event they shall be
promptly removed by the Lessee and the Premises replaced in the condition
existing on the date of the commencement of the term of this Lease.
b. Trade fixtures, equipment or other personal property which are installed
in the Premises by the Lessee and are not permanently affixed to the walls,
ceilings, floors or other part thereof shall remain the property of the Lessee
and, providing that the Lessee is not in default in performance of this Lease,
they may be removed by the Lessee at any time during the term of this Lease.
(Lessee shall have the right to install swamp coolers on the roof at Lessee's
own expense, which swamp coolers shall become a permanent part of the premises
and not be removed by Lessee. However, in order to not void the Lessor's
responsibility to maintain the roof throughout the term of the Lease, the
Lessee shall contract with Lessor's roofer, at Lessee's expense, to oversee
Lessee's installation. The Lessee shall also have the right to upgrade the
existing electrical panels, provided that such upgrade shall comply with all
existing building codes and shall be at the sole cost and expense of the
Lessee.)
4.4 No Liens. Lessee shall within five (5) days after the attachment of
any lien or claim, pay and discharge or secure the release from the Building
and/or the Lot or any lien or claim of lien arising out of or in connection
with construction work by or for the account of Lessee; and Lessee shall
promptly indemnify Lessor from and against all loss, cost, damage, injury, or
expense in connection with any such lien or claim of lien, including, without
limitation, reasonable attorneys' fees.
5. SERVICE AND REPAIRS
5.1 Basic Services and Repairs. Lessor shall furnish the services
described in Exhibit "C" hereto.
5.2 Interruption. There shall be no rental abatement. Lessor shall not be
liable for interruption of any service due to accident, making of repairs,
alterations or improvements, unusually severe weather, unusual difficulty or
inability in obtaining services or supplies from sources usually used for the
Building, labor difficulties, governmental regulations, or other cases beyond
Lessor's reasonable control.
5.3 Trash Service, Rubbish and Snow Removal. Lessor shall designate a
contractor or agent for the removal of trash, rubbish and snow from the
Premises. Such contractor or agent shall not be under the direction or
control of Lessee. Lessee shall deposit all rubbish in the manner and
location designated by Lessor. Lessee shall pay Lessor, as additional rent,
upon demand, for said removal pursuant to Exhibit "C" hereto.
5.4 Maintenance and Repair. Except for those services to be performed by
Lessor as listed on Exhibit "C" hereto, Lessee shall keep the Premises in
good order and repair, including (without limitation) replacement of broken
window glass and door glass, irrespective of cause, including all replacement
of light bulbs, tubes, ballasts and starters within a reasonable time after
they burn out.
5.5 Service Contracts. Lessee shall keep all mechanical systems, (heating,
air conditioning, etc.) which exclusively serve the Premises in good order
and repair, and in order to meet such obligation, Lessee agrees to obtain, and
maintain in effect throughout the Lease Term, service contracts acceptable to
Lessor providing for periodic inspection, repair and maintenance of such
mechanical systems. Lessee shall notify Lessor of the name and address of the
Service contractor(s) and of the terms and conditions of such contract(s). If
Lessee shall fail to so obtain service contractor(s) and so notify Lessor, or
if the contracts are not being reasonably performed, Lessor shall have the
right to cure such default and obtain such service contracts, at the expense
of Lessee as provided in Section 8.3 hereof.
6. LESSEE'S COVENANTS
6.1 Utilities. Lessee shall pay for all water, gas, heat, light, power,
telephone service and other service metered to the Premises. Lessee shall pay
its pro rata share (as determined by the percentage of the Building used by
Lessee) of all water, gas, heat, light, power, telephone service and other
services not separately metered to the Premises, but generally metered to the
Building. Lessor further reserves the right to install separate meters for
any public utility servicing the Premises for which a meter is not presently
installed, in which event Lessee shall make payments when due directly to the
public utility involved. If separate meters are installed by Lessee, the
cost, deposit and installation shall be at Lessee's expense. If Lessee uses
water service which is not separately metered to Lessee for other than
restroom purposes, the resulting increased monthly water charge may, at the
option of the Lessor, be charged to Lessee. Lessor shall have no liability
and this lease shall not be terminated for failure of such utility services
for any reason beyond Lessor's reasonable control.
6.2 No Sublease or Assignment. Without on each occasion obtaining a prior
written consent of Lessor, not to be unreasonably withheld, Lessee shall not
assign this Lease, or make any sublease (any purported assignment or sublease
without such consent shall be void). Lessee shall reimburse Lessor promptly
for reasonable legal and other expenses incurred by Lessor in connection with
any request for such a consent. Consent to any such assignment or subletting
shall not relieve or release Lessee of Lessee's responsibilities under this
lease unless specifically agreed to in writing by Lessor.
6.3 Indemnity. Lessee shall indemnify Lessor from and against any liability
for injury, loss, accident, or damage to any person or property and from any
claims, actions, proceedings and costs in connection therewith, including
reasonable attorney's fees arising from omission, fault, negligence or other
misconduct of Lessee, or arising from any use made or things done or occurring
in the Premises, and to keep all Lessee's employees working in the Premises
covered by xxxxxxx'x compensation insurance, furnishing Lessor with
certificates thereof.
6.4 Comprehensive Liability Insurance. Lessee shall keep and maintain with
insurance carriers acceptable to Lessor, comprehensive liability insurance
applying to the activities of Lessee in and in connection with the Premises,
with limits of liability of not less than the amount set forth in Section
1.12. hereof, for injury to or death of a single person, per occurrence, and
for property damage. Said insurance shall cover the alterations and
improvements to the premises by the Lessee both prior to the scheduled term
commencement date and thereafter and shall cover claims under Worker's
Compensation Laws. Lessee shall furnish Lessor with a certificate of such
insurance which shall name Lessor and any mortgagee of the Lot and/or
Building, as an additional insured and shall provide for non-cancellation
without thirty (30) days prior written notice to Lessor and said mortgagee.
Failure on the part of the Lessee to renew such insurance at least thirty days
prior to the expiration date thereof, from time to time, shall constitute an
event of default equivalent to failure to pay an installment of Monthly Rent
due hereunder.
6.5 Insurance. Lessor shall maintain insurance on the Building (excluding
any fixtures and items installed or paid for by Lessee which Lessee is
entitled to or required to remove, which insurance Lessee shall provide)
against damage by fire and the perils now specified in the current standard
extended coverage endorsement in an amount equal to at least one hundred
percent (100%) of replacement cost of the Building as determined by Lessor,
and shall include six month rent loss coverage.
6.6 Insurance Subrogation. Any insurance carried by either party with
respect to the Premises and property therein or occurrence thereon shall
include a clause or endorsement denying to the insurer right of subrogation
against the other party to the extent rights have been waived by the insured
prior to the occurrence of injury or loss. Each party, not withstanding any
provisions of this Lease to the contrary, hereby waives any rights of recovery
against the other for injury or loss due to hazards covered by insurance
containing such clause or endorsement to the extent of the injury or loss
covered thereby.
6.7 Signs. Lessee shall not, without the prior written consent of Lessor
which shall not be unreasonably withheld (a) paint or place any signs on the
Premises or anywhere on or in the Building or (b) place any curtains, blinds,
shades, awnings, aerials or flagpoles, or the like, in the Premises or
anywhere on or in the Building visible from outside the Premises. Lessor
reserves the right to disapprove of signs, curtains, blinds, shades, and
awnings on wholly aesthetic grounds. Lessee shall pay the expenses involved
in the erection of any sign and obtaining of a permit therefor. Lessee
warrants that it shall obtain all necessary permits prior to erecting any such
sign and the Lessee shall remove said sign on the termination of this lease.
6.8 Entry and Inspection. Lessee shall permit Lessor and Lessor's agents to
examine the Premises at reasonable times, and if Lessor shall so elect, to
make any repairs or replacements Lessor may deem necessary. Lessor may show
the Premises to prospective purchasers and tenants during the ninety 90) days
preceding expiration of the Lease term and Lessor may place a sign in front of
the building during the forty-five (45) days preceding the expiration of the
Lease Term.
6.9 Permitted Uses and Hazardous Substances. Lessee shall use the Premises,
Lot and/or Building for the Permitted Use only. Lessee agrees not to commit,
or allow to be committed, waste on the Premises, not to injure, overload or
deface the Premises, the Lot or the Building, nor to permit any auction sale,
storage of flammable fluids or chemicals, nuisances, or the emission of any
objectional noise or odor in the Premises, nor to permit any use of the
Premises which is offensive or liable to invalidate or increase the premiums
for any insurance on the Building or its contents or liable to render
necessary any alteration or additions to the Building.
Notwithstanding anything herein to the contrary, the Lessee may store and use
chemicals and flammable fluids as required for the manufacturing and
development of the Lessee's process provided that such use and disposal of
said chemicals and flammable fluids shall be within the guidelines of the EPA.
The Lessor represents that to the best information, belief and present
knowledge of the Lessor's representatives, there are no violations of state
and federal environmental laws on the premises.
Lessee shall comply with all laws, ordinances, orders or regulations of any
public authority for any use made by Lessee, and Lessee shall procure all
licenses and permits so required for such use. Lessee shall not interfere
with the quiet enjoyment of other lessees in the Building or in other
buildings on the adjacent lots nor shall Lessee undertake any activity nor
pursue any practice likely to result in picketing of the Building or any part
thereof.
Without limiting the foregoing, Lessee shall comply with all governmental
rules and regulations pertaining to hazardous or toxic substances and the sale
or storage thereof, and further agrees as follows:
(1) Lessee shall not violate any Federal, State (including, but not limited to
Utah Code Annotated Section 26-14e-101 et seq (1953 as amended) relating to
Underground Storage Tanks), or local law, ordinance, or regulation relating to
industrial hygiene or to the environmental conditions on, under, or about the
Premises including, but not limited to, soil and groundwater or dispose of on,
under or about the Premises or transport to or from the Premises any flammable
explosives, radioactive materials, hazardous wastes, toxic substances, or
related materials, ("Hazardous Materials"). Hazardous Materials shall
include, but shall not be limited to, substances defined as "hazardous
substances" in the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. Sec 9601-9657, the Hazardous
Materials Transportation Act of 1975, 49 U.S.C. Sec 1801-1812, and the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. Sec 6901-6987.
(2) Lessee shall not release or threaten release of hazardous wastes on,
from, or under the Premises, except as may have previously been disclosed
to and consented by Lessor in writing.
(3) Lessee shall immediately advise Lessor in writing of (i) any and all
enforcement, cleanup, remedial, removal, or other governmental or
regulatory actions instituted, completed, or threatened pursuant to any
applicable federal, state or local laws, ordinances, or regulations relating
to any Hazardous Materials affecting the Premises, and (ii) all claims made or
threatened by any third party against Lessee in regard to the Premises
relating to damage, contribution, cost recovery compensation, loss or injury
resulting from any Hazardous Materials.
(4) Lessee indemnifies and holds Lessor harmless from any cost, loss or
damage arising from any Hazardous Waste brought onto the Premises by or for
Lessee or under Lessee's control, including attorney's fees and court costs
incurred in defense of any action for such cost, loss or damage.
(5) Lessee's agreement under this subparagraph shall survive any foreclosure
of Lessee's interests in the Premises.
7. CASUALTY AND TAKING
7.1 Termination or Reconstruction. If during the Lease Term, the Premises,
Building or Lot, or any substantial part thereof are damaged materially by
fire or other casualty thereof, or receive compensable damage by reason of
anything lawfully done under color of public or other authority, this Lease
shall terminate at Lessor's election by written notice given thirty (30) days
after the casualty or taking has occurred. In case of damage to or taking
part of the Premises, (a) if the remainder is insufficient for use of Lessee's
purposes, or (b) in case of such damage or taking if the time needed to do the
construction work necessary to put the Premises or such remainder in proper
condition for use and occupation is reasonably estimated by Lessor to exceed
six (6) months, or (c) Lessor does not commence within sixty (60) days after
the damage or the surrender of the part taken and proceed with reasonable
diligence, to do such work, Lessee's sole right shall be the option to
terminate this Lease, without penalty, by notice given to Lessor within thirty
(30) days after the right to terminate arises.
In the event of a termination by Lessor or Lessee hereunder, monthly rent and
additional rent shall be apportioned as of the date of the right to terminate
arises.
If in any such case the Lease is not so terminated, a just proportion of the
rent according to the nature and extent of the injury shall be abated until
the Premises (or in case of taking what may remain thereof), excluding any
fixtures or items installed or paid for by Lessee which Lessee is entitled or
required to remove pursuant hereto, shall have been put by Lessor into proper
condition. In case of a taking which permanently reduces the area of Lessee's
Floor Space, a just proportion of the Monthly Rent shall be abated for the
remainder of the Lease Term and Lessee's Share of Operating Expenses and
Lessee's Share of Imposition shall be adjusted as determined by Lessor.
7.2 Lessor Reserves Compensation. Lessor reserves all rights to compensation
for damage to the Premises, the Building, the Lot and the leasehold hereby
created, accruing by reason of exercise of eminent domain or by reason of
anything lawfully done by public authority; provided, however, nothing herein
shall be deemed to give Lessor any interest in or require Lessee to assign to
Lessor any award made to Lessee for the taking of personal property or
fixtures belonging to Lessee and removable by Lessee on termination of this
Lease, for interruption of damage to Lessee's business, or for Lessee's moving
expense.
8. DEFAULT
8.1 Events of Default. The occurrence of any of the following events shall
constitute an event of default on the part of the Lessee:
a. Vacation or abandonment of the Premises unless the Lessee continues
to pay rent and perform all of its other obligations under the Lease.
b. Failure to pay any installment of Monthly Rent or other monies due
and payable hereunder, said failure continuing for a period of three (3) days
after receipt of written notice of such default.
c. Default in the performance of any of Lessee's covenants, agreements
or obligations hereunder, said default (except default in the payment of any
installment of Monthly Rent, or other monies) continuing for thirty (30) days
after written notice thereof from Lessor to Lessee.
d. A general assignment by Lessee for the benefit of creditors.
c. The filing of a voluntary petition in bankruptcy by Lessee, the
filing of a voluntary petition for an arrangement, the filing of a petition
voluntary or involuntary, for reorganization, or the filing of an involuntary
petition by Lessee's creditor, said involuntary petition remaining
undischarged for a period of sixty(60) days.
e. Receivership, attachment or other judicial seizure of substantially
all of Lessee's assets or the Premises, such attachments or other seizure
remaining undismissed or undischarged for a period of sixty (60) days after
the levy thereof.
8.2 Lessor's Remedies.
a. Damages: In the event of any such default by Lessee, then in
addition to any other remedies available to Lessor at law or in equity, Lessor
shall have the immediate option to terminate this Lease and all rights of
Lessee hereunder. In the event that Lessor terminates this lease then Lessor
may recover from Lessee:
b. The worth at the time of award of any unpaid Rent which had been
earned at the time of such termination; plus
c. The worth at the time of award of the amount by which the unpaid Rent
which would have been earned after termination until the time of award exceeds
the amount of such rental loss Lessee proves could have been reasonably
avoided, plus
d. The worth at the time of award of the amount by which the unpaid Rent
for the balance of the term after the time of award exceeds the amount of such
rental loss that Lessee proves could be reasonably avoided; plus
e. any other amount necessary to compensate Lessor for all the damage
caused by Lessee's failure to perform it's obligations under this Lease or
which in the ordinary course of things would be likely to result therefrom;
plus
f. such reasonable attorney's fees and court costs incurred by Lessor
prior to suit, after suit, on appeal, or in protection of Lessor's rights in
any bankruptcy proceeding; and
g. interest on such sums at ten percent (10% per annum).
The term "Rent", as used herein, shall be deemed to be and to mean the monthly
rent, additional rent and all other sums required to be paid by Lessee
pursuant to the terms of this Lease.
h. Re-entry. In the event of any such default by Lessee, Lessor shall
also have the right, with or without terminating this Lease to re-enter the
Premises and remove all persons and property from the Premises; such property
may be removed and stored in a public warehouse or elsewhere at the cost of
and for the account of the Lessee.
i. Election. In the event of the vacation or abandonment of the
Premises by Lessee or in the event that Lessor shall elect to re-enter as
provided in paragraph 8.2.2 above or shall take possession of the Premises
pursuant to legal proceeding or pursuant to any notice provided by law, then
Lessor may from time to time, without terminating this Lease, either recover
all rental as it becomes due or relet the Premises or any part thereof for
such term or terms and at such rental or rentals and upon such other terms and
conditions as Lessor in its sole discretion may deem advisable with the right
to make alterations and repairs to the Premises.
In the event that Lessor shall elect to so relet, then rentals received by
Lessor from such reletting shall be applied; first, to reasonable attorney's
fees and court costs incurred by Lessor as a result of such default, and costs
in the event suit is filed by Lessor to enforce such remedies, second to the
payment of any indebtedness other than rent due hereunder from Lessee to
Lessor; third to the payment of any cost of such reletting, fourth to the
payment of the cost of any alterations and repairs to the Premises; fifth to
the payment of Rent; and the residue, if any, shall be held by Lessor and
applied in payment of future Rent as the same may become due and payable
hereunder. Should that portion of such rentals received from such reletting
during any month, which is applied by the payment of Rent hereunder, be less
than the Rent payable during the month by Lessee hereunder, then Lessee shall
pay such deficiency to Lessor. Such deficiency shall be calculated and paid
monthly. Lessee shall also pay to Lessor, as soon as ascertained, any costs
and expenses incurred by Lessor in such reletting or in making such
alterations and repairs not covered by the rentals received from such
reletting.
j. Termination. No re-entry or taking possession of the Premises by
Lessor pursuant to this Article shall be construed as an election to terminate
this Lease unless a written notice of such intention be given to Lessee or
unless the termination thereof be decreed by a court of competent
jurisdiction. Notwithstanding any reletting without termination by Lessor
because of any default by Lessee, Lessor may at any time after such reletting
elect to terminate this Lease for any such default.
8.3 Right to Cure. In addition to the foregoing remedies and so long as
this Lease is not terminated, Lessor shall have the right but not the
obligation to remedy any default of Lessee and to add to the Monthly Rent
payable hereunder all of Lessor's reasonable costs in so doing, with interest
at the rate of eighteen percent (18%) per annum from the date of such
expenditure until the same is repaid.
8.4 Remedies Cumulative. The rights, privileges, elections and remedies
of Lessor in this Article 8 are cumulative and not alternative.
9. MISCELLANEOUS
9.1 Holding Over. Should Lessee, or any of its successors in interest,
hold over the Premises, or any part thereof, after the expiration of the term
of this Lease, unless otherwise agreed in writing, such holding over shall
constitute and be construed as tenancy from month to month only, at a rent
equal to the Monthly Rent, plus fifty percent (50%) of said Monthly Rent.
This inclusion of the preceding sentence shall not be construed as Lessor's
permission for Lessee to hold over.
9.2 Surrender. Upon the expiration of the Term or early termination
thereof, Lessee shall promptly surrender the Premises in good and clean
condition, and remove any signs, fixtures, or equipment and improvements as
provided in Section 4.2 hereof.
9.3 Notices. Whenever any notice, approval, consent, request or election
is given or made pursuant to this Lease it shall be in writing sent by
certified mail, return receipt requested, or it shall be delivered personally.
Notices and payments shall be addressed to Lessor's Address and Lessee's
Address or at such other source as may have been specified by prior notice.
9.4 Successors and Assigns. The obligations of this Lease shall run with
the land, and this Lease shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, except that only
the Lessor named herein shall be liable for obligations accruing before the
beginning of the Lease Term, and thereafter each successive owner of the
Premises shall be liable only for obligations accruing during the period of
its ownership, said liability terminating upon termination of such ownership
and passing to the successor in ownership.
9.5 Limitation of Lessor's Liability. The obligations of Lessor under
this Lease do not constitute personal obligations of the individual parties,
directors, officers, shareholders or partners of Lessor, or its successors or
assigns, and Lessee shall look solely to the real estate that is the subject
of this Lease and to no other assets of the Lessor, or its successors or
assigns, for satisfaction of any liability in respect to this Lease and will
not seek recourse against the individual parties, directors, officers, or
shareholders of Lessor, or its successors of assigns, or any of their personal
assets for such satisfaction.
9.6 No Waiver. The failure of Lessor or of Lessee to seek redress for
violation, or to insist upon the strict performance of any covenant or
condition of this Lease, shall not be deemed a waiver of such violation nor
prevent a subsequent act which would have originally constituted a violation,
from having all the force and effect of an original violation. The receipt by
Lessor of Monthly Rent, additional rent or other monies due hereunder with
knowledge of the breach of any covenant of this Lease shall not be deemed a
waiver of such breach.
9.7 Severability. If any term of this Lease, or the application thereof,
to any person or circumstances shall, to any extent be invalid or
unenforceable, the remainder of this Lease, or the application of such term to
persons or circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby, and each term of this Lease
shall be valid and enforceable to the fullest extent permitted by law.
9.8 Offset Statements. Lessee agrees from time to time that within
fifteen (15) days of receipt of written request by Lessor, to execute,
acknowledge and deliver to Lessor a statement in writing certifying that (a)
this Lease is unmodified and in full force and effect, (b) Lessee has no
defenses, offsets or counterclaims against its obligations to pay the Monthly
Rent and other monies hereunder and to perform its other covenants under this
Lease, or (c) if there have been any modifications that the Lease is in full
force and effect as modified and stating the modifications, and if, there are
any defenses, offsets, counterclaims, or defaults, setting them forth in
reasonable detail, and (d) the dates to which the rent has been paid and the
amount of any Prepaid Rent. Any such statement delivered pursuant to this
Section 9.8 may be relied upon by any prospective purchaser, or mortgagee or
encumbrancer of the Premises or any prospective assignee of any mortgage or
encumbrance upon the premises.
9.9 Attornment. Lessee shall, in the event any proceedings are brought
for the foreclosure of, or in the event of exercise of the power of sale
under, any mortgage or deed of trust made by the Lessor, its successors or
assigns, encumbering the Premises, Building or Lot, or any part thereof, or in
the event of termination of the Ground Lease, attorn to the purchaser upon
such foreclosure or sale and recognize such purchaser as the Lessor under this
Lease.
9.10 Subordination. The rights of Lessee hereunder are and shall be
subject and subordinate to the lien of any mortgage or mortgages, or the lien
resulting from any other method of financing or refinancing, now or hereafter
in force against the Premises, Building or Lot, and to all advances made, or
hereafter to be made upon the security thereof, provided, however, that
notwithstanding such subordination, as long as the Lessee herein is not in
default under any of the terms, covenants and conditions of this Lease,
neither this Lease nor any of the rights of Lessee shall be terminated or
subject to termination by any trustee's sale or by any proceeding or action in
foreclosure. If requested, Lessee agrees to execute whatever documentation
may be required to further effect the provisions of this Section.
9.11. Agency Disclosure. At the signing of this Agreement, the listing
agent, Xxxxxx X. Xxxxx, represents the Lessor, and the selling agent, Xxxxxx
X. Xxxxx represents the Lessee. Both Lessor and Lessee confirm that prior to
signing this Agreement, written disclosure of the agency relationship(s) was
provided to him/her.
( WO ) Lessor's initials ( DMO ) Lessee's initials
IN WITNESS WHEREOF, the parties hereto have executed one or more copies
of this Lease on the day and year first above written.
LESSOR:
SEVENTY SECOND SOUTH
PARTNERSHIP, a Utah Limited Partnership
BY: /s/ Xxxxxxx Ohvan
------------------
TITLE: Gen. Part.
---------------
LESSEE:
FLEXPOINT, INCORPORATED, A UTAH CORPORATION
BY: /s/ Xxxxxxx Xxxx
----------------------------
XXXXXXX XXXX, PRESIDENT
EXHIBIT B
IMPROVEMENTS TO BE PROVIDED BY LESSOR
No improvements to be made by Lessor except for the following:
The Lessor shall repair, at Lessor's own expense, the cracked and sunken
concrete floor in the northwest corner of the building. The Lessor shall also
repair the overhead door and replace the broken kick panels near the front
door.
( WO ) Lessor's initials
( DMO ) Lessee's initials
EXHIBIT C
SERVICES PROVIDED BY LESSOR
Lessor is to arrange for contract services for trash and snow removal and
landscape maintenance as needed. If snow and trash removal are not included
in the Operating Expense Base (by appropriate designation in Section 1.9.6
hereof) Lessee shall pay Lessor, as additional rent, upon demand, its prorata
portion (as determined by the percentage of the Building used by Lessee) of
the cost of such removal and maintenance.
At its own expense, and not as part of the Operating Expense, Lessor agrees
for the term of this Lease to maintain the roof in good condition and repair
and to repair any latent defects in the exterior walls, floor, and
foundations, and to repair any damage that might result from acts of Lessor or
Lessor's representatives.
The Lessor shall be responsible for all mechanical, lighting, electrical and
plumbing equipment to be in good working order for the first year of this
Lease, at its own expense.
Lessor shall not, however, be obligated to repair any such damage until
written notice of the need of repair shall have been given to Lessor and after
such notice is so given, Lessor shall have a reasonable time in which to make
such repair.
( WO ) Lessor's initials
( DMO ) Lessee's initials
EXHIBIT "D"
RIDER TO LEASE
Base Rent: $8,723.00 shall be paid upon the execution of this Lease, of
which $2,723.00 represents the rent for the balance of the month of October,
1996 and of which $6,000.00 represents the security deposit. Then
beginning November 1, 1996 the Lessee shall pay $4,965.00 to the Lessor on the
first day of each and every month until this Lease has expired.
Option to Renew: The Lessee shall have the option to renew this Lease for
two (2) additional one-year terms under the same terms and conditions as the
original lease except for the monthly base rent which shall be $5,710.00 for
year 4, and $5,995.00 for year 5. The Lessee shall exercise this option by
giving the Lessor 90 days prior written notice of the Lessee's intent to
renew. The Lessee's right to renew this Lease is contingent upon the Lessee
having complied with all previous terms and conditions of the Lease.
Early Occupancy: The Lessee herein shall have the right to enter the premises
and begin setting up, improving etc. as soon as the following has occurred.
1. The Lease is fully executed and a check for $10,965.00 has been
deposited with the Lessor.
2. The Lessee has placed the utilities in Lessee's own name.
3. The Lessee has complied with the insurance provisions of this Lease.
It is the intention of the parties that the Lessee may take immediate
occupancy to accomplish setting up and improving the facility. At the same
time, the Lessor will be repairing the cracked and sunken floor and roof, if
necessary; however, if the Lessor is unable to complete these improvements on
or before October 15, 1996, all rent shall xxxxx until the earlier of November
15, 1996 or the date the Lessor completes these improvements. If the Lessor
does not complete these improvements by November 15, 1996, the Lessee may
cancel this Lease without further liability. If the improvements are
completed by November 15, 1996, the Lease shall be in full force and effect.
( WO ) Lessor's initials
( DMO ) Lessee's initials
