Set ___ of ___ originals
LEASE AGREEMENT
This is a legal and binding contract. Before signing, read the entire
document, including the general printed provisions and attachments. If you
have any questions before signing, consult your attorney and/or accountant.
THIS LEASE AGREEMENT (hereinafter the "Lease") is made and entered into as
of the 6th, day of September, 2002, by and between Dare Associates, LLC whose
address is 0000 Xxxxx 0000 Xxxx, Xxxxx, Xxxx 00000 (801) 655-0655
("hereinafter "Landlord") and Whole Living, Inc, dba Brain Garden whose
address is 000 Xxxx 000 X. Xxxxx 000 Xxxxxxxx Xxxx, Xxxx 00000 (801) 772-3300
hereinafter "Tenant").
WI T N E S S E T H:
In consideration of the rents, covenants and agreement hereinafter set
forth, Landlord and Tenant mutually agree as follows:
ARTICLE I: PREMISES
Landlord hereby leases and demises to Tenant and Tenant hereby leases from
Landlord that certain real property located in Utah County, State of Utah and
more particularly described 000 Xxxx Xxx Xxxx, Xxxxx, Xxxx 00000 (hereinafter
the "property"), together with all buildings and other improvements now or
hereafter located thereon and affixed thereto (hereinafter collectively
"Improvements"), and any and all privileges, easements, and appurtenances
belonging thereto or granted therein. The Property and the Improvements are
hereinafter collectively referred to as the "Premises". The use of these
Premises shall also include chairs, desks, chair mats, grease boards, and the
voice and phone system in the lease-able location as well as racking in the
lease-able portion of the warehouse. In the event of a purchase of Premises by
Tenant within the option period, the above items shall be included in the
sales price, except for the phone and voice mail system, which shall be sold
for a price not more than $25,000. Furniture, racking, or any items located in
the current System Connection space are not included as part of any purchase.
ARTICLE II: TERM COMMENCEMENT
2.1 Term of Lease. This Lease shall be for a term of 40 months
commencing on September 9, 2002, (hereinafter the "Commencement Date") and
ending at 12:00 p.m. on December 31, 2005, unless sooner terminated pursuant
to the terms, covenants and conditions of this Lease or pursuant to law.
Tenant shall have the right to renew this Lease for an additional three (3)
year period, as long as Tenant has fulfilled the terms and conditions of this
Lease and has notified Landlord with in ninety (90) days prior to the
termination of the Lease period, and new lease rates shall be negotiated at
time of renewal.
2.2 Delivery of Possession. In the event that Landlord is not able to
deliver possession of the Premises to Tenant on the Commencement Date,
Landlord shall not be liable to Tenant and Tenant may not terminate this lease
or any of Tenant's rights or obligations hereunder; provided, however, that in
the event Landlord is unable to deliver possession of the Premises to Tenant
on or before the date which is one (1) day after the Commencement Date,
Tenant's sole remedy shall be to terminate this Lease and all of Landlord's
and Tenant's respective rights and obligations hereunder by written notice
from Tenant to Landlord. Such notice must be given, if at all, on or before
the date which is ten (10) day(s) after the Commencement Date. Notwithstanding
anything to the contrary in this Lease, Tenant shall not be obligated to pay
rent to Landlord for any fractional months or months during which Landlord is
unable to deliver possession of the Premises to Tenant pursuant to the
provisions of this Section 2.2.
2.3 Lease Year. The term "Lease Year" as used in this Lease shall mean
a period of twelve (12) consecutive calendar months during the term of this
Lease. The first Lease Year shall begin on the Commencement Date if the
Commencement Date occurs on the first day of a calendar month; if not, the
first Lease Year shall begin on the first day of the calendar month next
following the Commencement Date. Each succeeding Lease Year shall begin at the
expiration of the immediately preceding Lease year.
ARTICLE III: RENT
3.1 Payment of Monthly Base Rent. As Monthly Base Rent for the
Premises, Tenant shall pay to Landlord, in advance on or before the first day
of each calendar month during the term of this Lease, an amount equal to the
"Monthly Base Rent" as defined in Section 3.2.
3.2 Monthly Base Rent. The "Monthly Base Rent" payable during each
Lease Year shall be determined in accordance with the following:
(a.) Tenant shall be given free Base Rent only beginning at the
commencement of this Lease until December 31, 2002, however, Tenant shall pay
all Taxes, Assessments and other Charges beginning at the commencement of this
Lease (See Article VII for all applicable charges). Please Refer To The Base
Rental Schedule in Exhibit B.
ARTICLE VI: LATE CHARGES AND INTEREST
If Tenant fails to pay any Monthly Base Rent when such Monthly Base Rent
is due and payable in accordance with Article III of this Lease or if Tenant
fails to pay any additional amounts or charges of any character which are
payable under this Lease, Landlord, at Landlord's election, may assess and
collect a late fee charge equal to five percent (5%) of each payment of rent
not received with in five (5) days from the date of such rent payment is due.
Furthermore, and in addition to any late charges payable pursuant to the
provisions of this Article, to the extent that nay payment of Monthly Base
Rent or any other amount payable to Landlord by Tenant pursuant to any
provision of this Lease is more than thirty (30) days past due, Tenant shall
pay Landlord interest at the rate of eighteen percent (18%) per annum on all
such past due amounts.
ARTICLE V: SECURITY DEPOSIT
Currently with Tenant's execution of this Lease, Tenant shall deposit with
Landlord the sum of Fifteen Thousand Nine Hundred Thirty Nine Dollars and
67/100 ($15,939.67) (hereinafter the "Security Deposit"). The Security Deposit
shall be held by Landlord for the faithful performance by Tenant of all of the
terms, covenants, and conditions of this Lease to be kept and performed by
Tenant during the term of this Lease. If Tenant defaults with respect to any
provision of this Lease, including but not limited to the provisions relating
to the payment of Monthly Base Rent, and any costs, expenses, and charges
payable under the provisions of this Lease, Landlord may, bot shall not be
obligated to use, apply or retain all or a party of the Security Deposit for
the payment of any amount which Landlord may spend by reason of Tenant's
default or to compensate Landlord for any other loss or damage which Landlord
may suffer by reason of Tenant's default. If any portion of the Security
Deposit is so used or applied, Tenant shall, within ten (10) days after
written demand, deposit with Landlord an amount sufficient to restore the
Security Deposit to its original amount; and Tenant's failure to do so shall
be a material breach of this Lease. Landlord shall not be required to keep the
Security Deposit separate from Landlord's general funds, and Tenant shall not
be entitled to interest on the Security Deposit. If Tenant shall fully and
faithfully perform every provision of this Lease to be performed by Tenant,
the Security Deposit or any balance thereof shall be returned to Tenant or, at
Landlord's option, to the last permitted assignee of Tenant's interest under
this Lease within thirty (30) days of the expiration of the term of this Lease
and after Tenant or Tenant's permitted assignee has vacated the Premises or
within fifteen (15) days of receipt of Tenant's new mailing address, whichever
is later. In the event of termination of Landlord's interest in this Lease,
Landlord shall transfer the Security Deposit to Landlord's successor in
interest whereupon Tenant agrees to release Landlord from liability for the
return of the security Deposit or any accounting therefore.
ARTICLE VI: QUIET ENJOYMENT
Landlord hereby covenants to Tenant that, subject to Tenant's compliance
with the terms and provisions of this Lease, Tenant shall peaceably and
quietly hold and enjoy the full possession and use of the Premises during the
term of this Lease.
ARTICLE VII: TAXES, ASSESSMENTS AND OTHER CHARGES
7.1 Taxes and Assessments. Tenant shall pay to Landlord all real estate
taxes, assessments (general and special), and other charges which may be
levied, assessed or charged against the Premises, accruing or becoming due and
payable during the term of this Lease and any extension thereof at least ten
(10) days before such taxes, assessments, or other charges become delinquent.
The charges shall be as follows (these are estimates only and are subject to
manual increases): $1866.67 for Real Estate Taxes, $150.00 for Building
Insurance, and $440.00 for Common Area Charges (CAM) due at the first of every
month. The above amounts reflect Tenant's proportionate share of Taxes and
Assessments or 80% of the total Taxes and Assessments for the entire Premises.
7.2 Right to Contest Taxes. Tenant, at its sole cost, shall have the
right to contest, in accordance with the provisions of the laws relating to
such contests, any real estate taxes, assessments, or other charges against
the premises and the failure of Tenant to pay such taxes, assessments, or
charges shall not constitute a default by Tenant so long as Tenant complies
with the provisions of this Section 7.2. Prior to initiating any contest or
proceeding. Tenant shall give Landlord written notice of such contest, or
proceeding and shall either deposit with Landlord, or furnish good and
sufficient undertaking and securities designating Landlord as the beneficiary
thereof, in such amount as Landlord deems to be sufficient, considering the
amount of such taxes, charges, assessments, any potential penalties and
interest thereon, and any potential expenses that might be incurred by
Landlord with respect thereto. Landlord shall not be required to join in any
proceeding or contest brought by Tenant unless the provisions of any law
require that the proceeding or contest or permit such proceeding or contest to
be brought in its name as long as Landlord is not required to bear any cost.
Tenant, on final determination of the proceeding or contest or permit such
proceeding or contest to be brought in its name as long as Landlord is not
required to bear any cost. Tenant, on final determination of the proceeding or
contest, shall immediately pay or discharge any decision or judgment rendered,
together with all costs, charges, interest and penalties incidental to the
decision or judgment.
7.3 Right to Contest Taxes. Tenant, at its sole cost, shall have the
right to contest, in accordance with the provisions of the laws relating to
such contests, any real estate taxes, assessments, or other charges against
the premises and the failure of Tenant to pay such taxes, assessments, or
charters shall not constitute a default by Tenant so long as Tenant complies
with the provisions of this Section 7.2. Prior to initiating any contest or
proceeding. Tenant shall give Landlord written notice of such contest, or
proceeding and shall either deposit with Landlord, or furnish good and
sufficient undertaking and sureties designating Landlord as the beneficiary
thereof, in such amount as Landlord deems to be sufficient, considering the
amount of such taxes, charges, assessments, any potential penalties and
interest thereon, and any potential expenses that might be incurred by
Landlord with respect thereto. Landlord shall not be required to join in any
proceeding or contest brought by Tenant unless the provisions of any law
require that the proceeding or contest be brought by or in the name of
Landlord or any owner of the Premises. In that case, Landlord shall join in
the proceeding or contest or permit such proceeding or contest to be brought
in its name as long as Landlord is not required to bear any cost. Tenant, on
final determination of the proceeding or contest, shall immediately pay or
discharge any decision or judgment rendered, together with all costs, charges,
interest and penalties to the decision or judgment.
ARTICLE VIII: UTILITIES
Tenant shall put all utilities under Tenant's name and shall be
responsible for, and pay when due, all charges for water, gas, heat, light,
power, telephone, and other utilities or services used by or applied to Tenant
or to the Premises, together with any taxes thereon, during the term of this
Lease, System Connection, as long as they remain a tenant of the Premises,
shall pay Tenant twenty percent (20%) of the monthly gas, electric, water, and
sewer bills, which shall be paid to Tenant within ten 10 days of Bills'
receipt by System Connection.
ARTICLE IX: INSURANCE
9.1 Tenant's Insurance Coverage. Tenant shall, at all times during the
term of this Lease, and at Tenant's own cost and expense, procure and continue
in full force the following insurance coverage:
(a) Comprehensive liability insurance with limits of not less than
$1,000,000.00 per person and $1,000,000.00 per occurrence insuring against any
and all liability of the insured with respect to the Premises or arising out
of the maintenance, use or occupancy thereof, and property damage liability
insurance with a limit of not less than $1,000,000.00 per accident or
occurrence.
(b) Insurance covering any buildings and all improvements on the
Premises, including Tenant's leasehold improvements and personal property in
or upon the Premises in an amount not less than one hundred percent (100%) of
full replacement cost, providing protection against any peril generally
included within the classification "Fire and Extended Coverage", together with
insurance against sprinkler damage, vandalism and malicious mischief and a
standard inflation guard endorsement. Tenant hereby assigns Landlord any and
all proceeds payable with respect to such policies except to the extent such
proceeds are payable with respect to any property that would remain the
property of the Tenant upon the termination of this Lease; provided, however,
that to the extent required pursuant to the provisions of Article XIV, such
proceeds shall be applied to the repair and restoration of the Premises.
9.2 Insurance Policies. The minimum limits of insurance policies as set
forth in Section 9.1 shall name Landlord as an additional insured and shall be
with companies having a rate o not less tan an "A" company rating and a
Financial Rating of Class VI in "Best's Insurance Reports." Tenant shall
furnish from the insurance companies or cause the insurance companies to
furnish to Landlord certificate of coverage. No such policy shall be
cancelable or subject to reduction of coverage or other modification or
cancellation except after thirty (30) days prior written notice to Landlord by
the insurer. All such policies shall be written as primary policies, not
contributing with and not in excess of any coverage which Landlord may carry.
Tenant shall at least twenty (20) days prior to the expiration of such
policies furnish Landlord with renewals or binders. If Tenant does not procure
and maintain such insurance, Landlord may, but is not obligated to, procure
such insurance on Tenant's behalf and all sums paid by Landlord shall bear
interest at the rate of eighteen percent (18%) and shall be immediately due
and payable. Tenant shall have the right to provide such insurance coverage
pursuant to blanket policies obtained by Tenant provided such blanked policies
expressly afford coverage to the premises and to Landlord as required by this
Lease.
9.3 Waiver of Subrogation. To the extent permitted under the insurance
policies obtained by Landlord, if any, and Tenant, Landlord and Tenant each
hereby waive any and all right of recovery against the other or against the
officers, employees, agents and representatives of the other, on account of
loss or damage occasioned to such waiving party or its property or the
property of others under its control to the extent that such loss or damage is
insured against under any fire and extended coverage insurance policy which
either may have in force at the time of such loss or damage.
ARTICLE X: USE OF PREMISES
10.1 Use. The Premises shall be used and occupied by Tenant solely for
Professional Office use. Manufacturing, and other fulfillment, and for no
other purpose without the prior written consent of Landlord, which consent may
be withheld by Landlord in Landlord's sole discretion.
10.2 Suitability. Tenant acknowledges that neither Landlord nor any
agent of Landlord has made any representation or warranty with respect to the
Premises or the Improvements or with respect to the suitability of either for
the conduct of Tenant's business, nor has Landlord agreed to undertake any
modification, alteration or improvement to the Premises except as specifically
provided in this Lease. The continued possession of the Premises by Tenant
shall conclusively establish that the Premises and the Improvements are at the
date of possession in satisfactory condition. Landlord shall not be
responsible for any latent deficiencies in the construction of the Premises or
the Improvements or any improvements or fixtures therein.
10.3 Prohibited Uses.
(a) Tenant shall not do or permit anything to be done in or about
the Premises, nor bring or keep anything therein which will cause a
cancellation of any insurance policy covering the Premises, nor shall Tenant
sell or permit to be kept, used or sold in or about the Premises any articles
which may be prohibited by a standard form policy of fire insurance unless
Tenant provides additional insurance coverage extending protection to cover
all risks associated with these articles.
(b) Tenant shall not use the Premises or permit anything to be done
in or about the Premises which will in any way conflict with any law, statute,
ordinance or governmental rule or regulation or requirement of duly construed
public authorities now in force or which may hereafter be enacted, promulgated
or created. Tenant shall, at Tenant's sole cost and expense, promptly comply
with all laws, statutes, ordinances and governmental rules, regulations or
requirements now in force or which may hereafter be in force and with the
requirements of any board of five underwriters or other similar body now or
hereafter constituted relating to or affecting the use or occupancy of the
Premises, including structural changes that relate to or affect the use
(c) Tenant shall comply with all requirements of any recorded
restrictive covenants or bylaws of any association affecting the Premises.
Tenant acknowledges receipt of a copy of the Declaration of Covenants,
Conditions and restrictions and a copy of the Bylaws of the Condominium
Owners' Association affecting the Premises.
(d) Tenant shall not permit smoking on the Premises at any time.
ARTICLE XI: MAINTENANCE AND REPAIRS
11.1 Tenant Maintenance and Repairs. During the Term of the Lease,
Tenant, at Tenant's expense, shall keep the Premises in good order and
condition and shall maintain and shall make any and all repairs and
replacements to the interior surfaces of the Premises (including, but not
limited to, elevator, plumbing, floor coverings, window coverings, and wall
coverings, desks, racking, furniture, file cabinets, phone and voice mail
system), all windows and glass which are part of the Premises, all light
fixtures, and all doors to the Premises. Tenant is required to have plastic
chair mats underneath the desks in order to protect floor coverings. Tenant
shall be liable for floor covering replacement if the mats are not used.
Tenant shall, at all times, and at Tenant's expense, keep the Premises in a
neat, clean, and sanitary condition and shall comply with all valid federal,
state, county and city laws, and ordinances and all rules and regulations of
any duly constituted authority, present or future, affecting or respecting the
use or occupancy of the Premises by Tenant. Tenant, at Tenant's expense, shall
also repair any structural damage to the Premises caused by Tenant, or
Tenant's Term of this Lease, maintain and make necessary structural repairs to
the Premises. Tenant shall be responsible for maintenance and repairs to
heating, ventilation or air conditioning equipment servicing the Premises.
Tenant shall promptly notify Landlord in writing of any condition requiring
maintenance or repair and Tenant shall also immediately notify Landlord by
telephone in the case of an emergency. Nothing in this section shall be
construed to excuse Tenant from any obligation under this Lease, including
without limitation, the payment of any rent.
11.2 Elevator. Tenant shall pay all costs associated with the
operation, maintenance, and inspection of the elevator, if elevator is used by
Tenant.
ARTICLE XII: HAZARDOUS SUBSTANCES
12.1 Environmental Compliance. Tenant (a) shall at all times comply
with, or cause to be complied with, any "Environmental Law" (hereinafter
defined) governing the Premises or the use thereof by Tenant or any of
Tenant's employees, agents, contractors, invitees, licensees, customers, or
clients, (b) shall not use, store, generate, treat, transport, or dispose of,
or permit any of Tenant's employees, agents, contractors, invitees, licensees,
customers or clients to use, store, generate, treat, transport, or dispose of,
any"Hazardous Substance" (hereinafter defined) on the Premises without first
obtaining Lessor's written approval, (c) shall promptly and completely respond
to, and clean up, in accordance with applicable laws and regulations, any
Release (as hereinafter defined) occurring on the Premises as a direct result
of actions of Tenant or Tenant's employees or authorized agents; and (d) shall
pay all costs incurred as a result of any failure by Tenant to comply with any
Environmental Law, which failure results in a Release or other change in the
environmental state, condition, and quality of the Premises necessitating
action under applicable Environmental Laws, including without limitation the
costs of any Environmental Cleanup Work (hereinafter defined) and the
preparation of any closure or other required plans (all of the foregoing
obligations of Tenant under this Section 12.1 are hereinafter collectively
"Tenant's Environmental Obligations"). Landlord hereby releases and
indemnifies Tenant from and against any and all claims, damages, or
liabilities (including, without limitation, attorney's fees and reasonable
investigative and discovery costs) resulting from the environmental condition
or quality of the Premises prior to the Commencement date or from actions of
Landlord or its agents or employees. The provisions of this Article XII shall
survive the expiration or other termination of this Lease.
12.2 Definitions. As used in this Lease (a) "Hazardous Substance" shall
mean (1) any "hazardous waste", "hazardous substance", and any other
hazardous, radioactive, reactive, flammable, infectious, solid wastes, toxic
or dangerous substances or materials, or related materials, as defined in,
regulated by, or which form the basis of liability now or hereafter under any
Environmental Law; (2) asbestos, () polychlorinated bithenyls (PCB's); (4)
petroleum products or materials: (5) underground storage tanks, whether empty
or filled or partially filled with any substance; (c6) flammable explosives,
(7) any substance the presence of which on the Premises is or becomes
prohibited by Environmental Law; (8) urea formaldehyde foam insulation; and
(9) any substance which under Environmental Law requires special handling or
notification in its use, collection, storage, treatment or disposal; (b)
"Environmental Cleanup Work" shall mean an obligation to perform work,
cleanup, removal, repair, remediation, construction, alteration, demolition,
renovation or installation in or in connection with the Premises in order to
comply with any Environmental Law; (c) "Environmental Law" shall mean any
federal, state or local law, regulation, ordinance or order, whether currently
existing or hereafter enacted, concerning the environmental state, condition
or quality of the Premises or use, generation, transport, treatment, removal,
or recovery of Hazardous Substances, including building materials, and
including, but not limited to, the following: (1) the Solid Waste Disposal Act
as amended by the Resource Conservation and Recovery Act of 1976 (42U.S.C.
Section 6901, et seq.), as amended, and all regulations promulgated
thereunder; (2) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (42 U.S.C. Section 9601, et seq.), as amended, and all
regulations promulgated thereunder (3) the Hazardous Materials Transportation
Act (49 U.S.C. Section 1801, et seq.), as amended, and all regulations
promulgated thereunder; (4) the Toxic Substances Control Act (15 U.S.C.
Section 2601, et seq.), as amended, and all regulations promulgated
thereunder; (5) the Clean Air Act (42 U.S.C. Section 7401, et seq.), as
amended, and all regulations promulgated thereunder; (6) the Federal Water
Pollution Control Act (33 U.S.C.. Section 1251, et seq.), as amended, and all
regulations promulgated thereunder; and (7) the Occupational Safety and Health
Act (29 U.S.C. Section 651, et seq.), as amended, and all regulations
promulgated thereunder; and (d) "Release" means any actual or threatened
spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, presence, dumping, migration on or from the
Premises or adjacent property, or disposing of Hazardous Substances into the
environment.
ARTICLE XIII: FIXTURES AND ALTERATIONS
13.1 Alterations. Tenant shall not make any physical alteration in the
Premises or any of the fixtures located therein or install or cause to be
installed any trade fixtures, exterior signs, floor coverings, interior or
exterior lighting, plumbing fixtures, shades or awnings, or make any changes
to the improvements front without first obtaining the written consent of
Landlord, which consent shall not be unreasonably withheld. Tenant shall
present to Landlord plans and specifications for the installation of any
improvements or fixtures at the time approval is sought from Landlord. Any
physical change and all rearrangements which are made by Tenant with the
approval of Landlord shall be made at Tenant's expense. Such alterations,
decorations, additions and improvements shall not be removed from the Premises
during the term of this Lease without the prior written consent of Landlord.
Upon expiration of this Lease such alterations, decorations, additions and
improvements shall at once become the property of Landlord.
13.2 Conditions and Limitations. Landlord may impose as a condition to
granting any consent required by Section 13.1, such requirements, restrictions
and limitations as Landlord may deem necessary by mutual agreement between
Landlord and Tenant, including without limitation, the manner in which the
work is done, the contractors by whom it is performed, and the time during
which the work is accomplished.
13.3 Contractors and Materialmen. If any fixtures, alterations or
improvements are allowed by Landlord, Tenant shall promptly pay all contracts
and materialmen, so as to eliminate the possibility of a lien attaching to the
Improvements or the Land, and should any such lien be made or filed by reason
of any fault of Tenant, Tenant shall bond against or discharge the same within
ten (10) days after written request by Landlord. Landlord shall have the
right, but not the obligation, to pay and discharge any such lien that
attaches to the Premises and Tenant shall reimburse Landlord for any such sums
paid together with interest at the rate of eighteen percent (18%) within
thirty (30) days after written demand by Landlord.
ARTICLE XIV: DAMAGE OR DESTRUCTION
14.1 Landlord to Repair Improvements. Subject to the provisions of
Section 11.1; 14.2 and 14.3, if during the term of this Lease any of the
improvements are damaged or destroyed by fire or other casualty, Landlord
shall repair or restore the Improvements. The work of repair or restoration,
which shall be completed with due diligence, shall be commenced within a
reasonable time after the damage or loss occurs. To the extent that such
damage or destruction interferes with Tenant's ability to use the Premises, as
determined by landlord, rent shall be abated after the damage or destruction
of the Improvements until the repair or restoration of the Improvements has
been completed.
14.2 Landlord's Option to Terminate Lease. Notwithstanding anything to
the contrary in this Article XIV, in the event that any of the Improvements
are damaged or destroyed by fire or other casualty, Landlord shall have the
right to terminate this Lease, which termination shall be deemed to be
effective as of the date of such casualty, upon the occurrence of any of the
following events:
(a) Insurance proceeds payable with respect to such damage or
destruction are not sufficient to pay for the repair and/or restoration of the
Improvements;
(b) Repair and restoration of the Improvements cannot be completed
within sixty (60) says after the occurrence of the casualty causing such
damage or destruction;
(c) More than thirty percent (30%) of the Improvements have been
damaged or destroyed by such casualty.
Landlord's option to terminate the Lease pursuant to the provisions of this
Section 14.2 must be exercised within thirty (30) days of the date of the
casualty causing such damage or destruction by written notice from Landlord to
Tenant. In the event that Landlord elects to terminate the Lease pursuant to
this Section 14.2, Tenant shall immediately surrender possession of the
Premises to Landlord and shall assign to Landlord (or if the same has already
been received by Tenant, pay to Landlord) all of Tenant's right, title, and
interest in and to the insurance proceeds payable with respect to the
Premises.
14.3 Tenant's Option to Terminate Lease. If no default by Tenant under
this Lease has occurred and is then continuing and is then continuing which,
with the giving of notice or lapse of time, or both, would become such a
default, Tenant shall, if the Improvements are damaged or destroyed by fire or
other casualty and repair or restoration of the Improvements cannot be
completed within sixty (60) days following the occurrence of the casualty
causing such damage or destruction, have the option of terminating this Lease
by written notice to Landlord, which termination shall be deemed to be
effective as of the date of the casualty. Tenant's option to terminate the
Lease pursuant to the provisions of this Section 14.3 must be exercised within
thirty (30) days of the date of the casualty causing such damage or
destruction. In the event that Tenant elects to terminate this Lease pursuant
to this Section 14.3, Tenant shall immediately surrender possession of the
Premises to Landlord and shall assign to Landlord (or if the same has already
been received by Tenant, pay to Landlord) all of Tenant's right, title, and
interest in and to the insurance proceeds payable with respect to the
Premises.
ARTICLE XV: CONDEMNATION
If all or any part of the Premises is taken or appropriated for public or
quasi-public use by right of eminent domain with or without litigation or
transferred by agreement in connection with such public or quasi-public use,
Landlord and Tenant shall each have the right within thirty (30) days of
receipt of notice of taking, to terminate this Lease as of the date possession
is taken by the condemning authority; provided, however, that before Tenant
may terminate this Lease by reason of taking or appropriation, such taking or
appropriation shall be of such an extent and nature as to substantially
handicap, impede or impair Tenant's use of the Premises. No award for any
partial or entire taking shall be apportioned, and Tenant hereby assigns to
Landlord any award to which may be made in such taking or condemnation,
together with any and all rights of Tenant now or hereafter arising in or to
the award or any portion thereof; provided, however, that nothing contained
herein shall be deemed to give Landlord any interest in or to require Tenant
to assign to Landlord any award made to Tenant for the taking of personal
property and fixtures belonging to Tenant, for the interruption of or damage
to Tenant's business and for Tenant's unamortized cost of leasehold
improvements. In the event of a partial taking which does not result in a
termination of this Lease, rent shall be abated in the proportion which the
part of the Premises so made unusable bears to the rented area of the Premises
immediately prior to the taking. No temporary taking of the Premises or
Tenant's right therein or under this Lease shall terminate this Lease or give
Tenant any right to any abatement of rent thereunder; and any aware made to
Tenant by reason of any such temporary taking shall belong entirely to Tenant,
and Landlord shall not be entitled to any portion thereof.
ARTICLE XVI: ASSIGNMENT AND SUBLETTING
16.1 Landlord's Consent Required. Tenant shall not assign, transfer,
mortgage, pledge, hypothecate or encumber this Lease or any interest therein,
either voluntarily or involuntarily by operation of law or otherwise, and
Tenant shall not sublet the Premises or any part thereof, without the prior
written consent of Landlord any attempt to do so without such consent being
first had and obtained shall be void and shall constitute a breach of this
Lease, such consent shall not be unreasonably withheld.
16.2 No Release of Tenant. No consent by Landlord to any assignment or
subletting by Tenant shall relieve Tenant of any obligation be performed by
Tenant under this Lease, whether occurring before or after such consent,
assignment or subletting. The consent by Landlord to any assignment or
subletting shall not relieve Tenant from the obligation to obtain Landlord's
express written consent to any other assignment or subletting. The acceptance
of rent by Landlord from any other person or legal entity shall not be deemed
to be a waiver by Landlord of any provision of this Lease or to be a consent
to any assignment, subletting or other transfer. Consent to one assignment,
subletting or other transfer shall not be deemed to constitute consent t any
subsequent assignment, subletting or other transfer.
16.3 Increased Expenses. Tenant shall pay Landlord the amounts of any
increase in costs or expenses incident to the occupancy of the Premises by
such assignee or subtenant, including but not limited to, reasonable
attorney's fees incurred in connection with giving such consent.
ARTICLE XVI: SUBORDINATION, ATTORNMENT AND ESTOPPEL CERTIFICATES
17.1 Subordination. This Lease at Landlord's option shall be subject
and subordinate to the lien of any mortgages or deeds of trust in any amount
or amounts whatsoever now or hereafter placed on or against the Premises, the
Improvements, or on or against Landlord's interest to estate therein, without
the necessity of the execution and delivery of any further instruments on the
part of Tenant to effectuate such subordination. Notwithstanding anything to
the contrary in this Article XVII, this Lease shall remain in full force and
effect for the full term hereof, including any extensions, so long as Tenant
is not in default hereunder.
17.2 Subordination Agreements. Tenant shall execute and deliver upon
demand without charge, therefore, such further instruments evidencing such
subordination of this Lease to the lien of any such mortgages or deeds of
trust as may be required by Landlord.
17.3 Attornment. In the event of any foreclosure or the exercise of the
power of sale under any mortgage or deed of trust made by Landlord covering
the Premises or the Building, Tenant shall attorn to the purchaser upon any
such foreclosure or sale and recognize such purchaser as the Landlord under
this Lease, provided said purchaser expressly agrees in writing to be bound by
the terms of this Lease.
17.4 Estoppel Certificates. Tenant shall, from time to time and within
ten (10) days from the receipt of prior written notice from Landlord, execute,
acknowledge and deliver to Landlord a statement in writing (a) certifying that
this Lease is unmodified and in full force and effect, or if modified, stating
the nature of such modification and certifying that this Lease, as so
modified, is in full force and effect and the date to which the rent and other
charges are paid in advance, if any, (b) certifying that the Lease and any
modifications of this Lease constitute the entire agreement between Landlord
and tenant with respect to the Premises and, except as set forth in this Lease
and any modification of this Lease, Tenant does not claim any right, title, or
interest in or to the Premises or any part thereof, (c) acknowledging that
there are not, to Tenant's knowledge, nay uncured defaults on the part of
Landlord hereunder, or specifying such defaults, if any are claimed, and (d)
certifying such other matters with respect to the Lease and/or the Premises as
Landlord may reasonably request.
17.5 Failure to Deliver Certificate. If Tenant fails to deliver such
statement within the time period referred to in Section 17.4 above, it shall
be deemed conclusive upon Tenant that the (a) this Lease is unmodified and in
full force and effect, (b) this Lease constitutes the entire agreement between
Landlord and Tenant with respect to the Premises and, except as set forth in
this Lease, Tenant does not claim any right, title, or interest in or to the
Premises, or any party thereof, (c) there are no uncured defaults in
Landlord's performance of Landlord's obligations under this Lease, and (d) not
more than one month's Monthly Base Rent has been paid in advance.
17.6 Transfer of Landlord's Interest. In the event of a sale or
conveyance by Landlord of Landlord's interest in the Premises other than a
transfer for security purposes only, Landlord shall be relieved from and after
the date specified in any such notice of transfer of all obligations and
liabilities to Tenant which accrue after such sale or conveyance on the part
of Landlord, provided that nay funds in the possession of landlord at the time
of transfer in which Tenant has an interest shall be delivered to the
successor Landlord. This Lease shall not be affected by any such sale or
transfer and Tenant shall attorn to the purchaser or other transferee provided
that all of Landlord's obligations accruing hereunder from and after such sale
or transfer are assumed in writing by such purchaser or transferee.
ARTICLE XVIII: DEFAULT AND REMEDIES
18.1 Default. The occurrence of any of the following shall constitute a
material default and breach of this Lease by Tenant:
(a) Any failure by tenant to pay the Monthly Base Rent, or any
other monetary sums required to be paid under this Lease, where such failure
continues for five (5) days after written notice thereof by Landlord to
Tenant;
(b) Any material false statement made by Tenant to Landlord or its
agents in any document delivered to Landlord in connection with the
negotiation of this Lease.
ARTICLE XIX: ENTRY BY LANDLORD
Landlord shall, during the term of this Lease, have the right to enter the
Premises at reasonable times and upon reasonable notice to Tenant, to inspect
or to show to prospective tenants or purchasers, or to make necessary repairs.
For purposes of this section twenty-four (24) hours is deemed to be reasonable
notice. In the event of an emergency, however, Landlord shall not be required
to give Tenant such notice, provided that Landlord furnishes Tenant with the
reason for the emergency entry within three days of such entry.
ARTICLE XX: INDEMNITY
Tenant shall indemnify and hold Landlord harmless from any and all claims
of liability for any injury or damage to any person or property whatsoever
occurring, in on or about the Premises or any part thereof during the term of
this Lease. Tenant shall further indemnify and hold Landlord harmless from and
against any and all claims arising from any breach or default in the
performance of any obligation on Tenant's part to be performed under the terms
of this Lease, or arising from any act or negligence of Tenant, or any of
Tenant's agents, contractors, employees, licensees or invitees and from and
against all costs, reasonable attorney's fees, expenses and liabilities
incurred in the defense of any such claim or any action or proceeding brought
thereon. Tenant shall not, however, be liable for damage or injury occasioned
by the negligence or intentional acts of Landlord and Landlord's designated
agents or employees. Tenant's obligations under this Article XX shall survive
the expiration or other termination of this Lease.
ARTICLE XXI: SURRENDER
21.1 Surrender. Upon the expiration or other termination of this Lease,
Tenant shall quit and surrender to Landlord the Premises, together with the
Improvements and all other property affixed to the Premises, excluding
Tenant's fixtures, in good order and condition, ordinary wear and tear
excepted. Tenant shall, prior to the expiration or other termination of this
Lease remove all personal property belonging to Tenant and failing to do so,
Landlord may cause all of said personal property to be removed at the cost and
expense of Tenant. Tenant's obligation to observe and perform this covenant
shall survive the expiration or other termination of this Lese. In the
alternative, landlord may, at Landlord's option, treat any and all items not
removed by Tenant on or before the date of expiration or of the termination of
this Lease as having been relinquished by Tenant and such items shall become
the property of Landlord with the same force and effect as if Tenant had never
owned or otherwise had any interest in such items.
21.2 Hazardous Substances. No spill, deposit, emission, leakage or
other release of Hazardous Substances in the soils, ground waters or waters
shall be deemed to result in either (a) wear and tear that would be normal for
the term of the Lease; or (b) a casualty to the Premises. Tenant shall be
responsible to promptly and completely cleans up any Release occurring on the
Premises during the term of the Lease which directly results from the actions
of Tenant or its employees or authorized agents. Tenant shall surrender the
Premises free of any contamination or other damage caused by such a Release
during the term of the Lease. Tenant's obligation to cleanup the Premises
pursuant to the provisions of this Article XXI shall survive the expiration or
other termination of this Lease.
ARTICLE XXII: OPTION TO PURCHASE
22.1 Grant of Option. Landlord hereby grants to Tenant, during the
Option Term (hereinafter defined), and subject to the terms, covenants and
conditions contained in this Lease, the option to purchase the Premises from
the Landlord (hereinafter the "Option"). For the first 9 months of this lease,
the option to lease/purchase shall be exclusive to the Tenant.
22.2 Option Term. The Option Term shall begin on the Commencement Date
and shall expire on may 31, 2002. The period during which the Option is
exercisable pursuant to the provisions of this Article shall be referred to
from time to time in this Lease as the "Option Term". The Option shall
terminate automatically (without any notice from Landlord to Tenant) unless
exercised by Tenant prior to the termination of the Option Term.
22.3 Purchase Price for Option Property: The purchase price payable by
the Tenant for the Premises shall be $2,500,000.00 (hereinafter the "Purchase
Price"). In the event of a purchase of Premises by Tenant within the option
period, the furniture items referred to in Article I shall be included in the
shales price, except for the phone and voice mail system, which shall be sold
for a price not more than $25,000. Furniture, racking, or any items located in
the current System Connection space are not included as part of any purchase.
Landlord acknowledges that System Connection, Inc. currently leases the south
end of the Premises until December 31, 2004.
22.4 Exercise of Option: Tenant may exercise the Option at any time
during the Option Term of the Lease by giving written notice of the Tenant's
intent to exercise the Option. However, if the Landlord receives a bone fide
offer to purchase the Premises from a third party during the Option Term,
which the Landlord desires to accept (hereinafter a "Third Party Offer"),
Landlord shall give Tenant written notice of such Third Party Offer, and
Tenant shall then have the right to exercise the Option to purchase at the
Third Party Offer price or at the $2,5100,000.00 Purchase Price, whichever is
greater. If Tenant fails to exercise the Option and close within Thirty (30)
days of written notification, the Option and the Option Term shall terminate
without further notice from or act by Landlord. If Tenant exercises Option,
Tenant shall pay Landlord the Purchase Price in cash or certified funds within
thirty (30) days after the date on which Tenant was given written notification
by Landlord.
22.5 Special Warranty Deed: Simultaneous to Tenant's payment of the
Purchase Price to landlord, Landlord shall deliver to Tenant a special
warranty deed with respect to the Premises, duly executed in recordable form.
22.6 Title Insurance: If Tenant exercises the Option, Landlord shall
provide Tenant with ALTA standard coverage owner's policy of title insurance
in the amount of the Purchase Price subject to all exceptions appearing of
record in the Office of the Utah County Recorder as of the Commencement Date
and any other exceptions to which Tenant consents.
ARTICLE XXIII: MISCELLANEOUS
23.1 Signs. Tenant, at its own cost, may place and maintain a sign
advertising Tenant's business on the Premises so long as the sign complies
with local city laws and ordinances.
23.2 Parking Spaces. Tenant shall be entitled to the use of 83
unreserved parking spaces appurtenant to the Premises for the benefit of
Tenant, its employees, agents, and invitees for the Term of the Lease. Tenant
shall have access to all parking spaces except for the seven spaces
immediately in front of the System Connection, Inc., offices at the south east
end of the parking lot.
23.3 Entire Agreement. This instrument along with any exhibits and
attachments hereto constitutes the entire agreement between Landlord and
Tenant relative to the Premises and this Lease and the exhibits and
attachments may be altered, amended or revoked only by an instrument in
writing signed by both Landlord and Tenant. All prior or contemporaneous oral
agreements between and among Landlord and Tenant and their agents or
representatives relative to the leasing of the Premises are merged in or
revoked by this Lease.
23.4 Severability. If any term or provision of this Lease shall, to any
extent, be determined by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of this Lease shall not be affected thereby, and
each term and provision of this Lease shall be valid and be enforceable to the
fullest extent permitted by law.
23.5 Cost of Suit. If Tenant or Landlord shall bring any action for any
relief against the other, declaratory or otherwise, arising out of this Lease,
including any suit by Landlord for the recovery of rent or possession of the
Premises, the losing party shall pay the successful party a reasonable sum for
attorney's fees whether or not such action is prosecuted to judgment.
23.6 Time and Remedies. Time is of the essence of this Lease and every
provision hereof. All rights and remedies of the parties shall be cumulative
and nonexclusive of any other remedy at law or in equity.
23.7 Binding Effect, Successors and Choice of Law. All time provisions
of this Lease are to be construed as both covenants and conditions as though
the words importing such covenants and conditions were used in each separate
Section of this Lease. Subject to any provisions restricting assignment or
subletting by Tenant as set forth in Article XVI, all of the terms hereof
shall bind and inure to the benefit of the parties hereto and their respective
heirs, legal representatives, successors and assigns. This Lease shall be
governed by the laws of the State of Utah.
23.8 Waiver. No term, covenant or condition of this Lease shall be
deemed waived, except by written consent of the party against whom the waiver
is claimed, and any waiver of the breach of any term, covenant or condition
shall not be deemed to be a waiver of any preceding or succeeding breach of
the same or any other term, covenant or condition. Acceptance by Landlord of
any performance by Tenant after the time the same shall have become due shall
not constitute a waiver by Landlord of the breach or default of any term,
covenant or condition unless otherwise expressly agreed to by Landlord in
writing.
23.9 Holding Over. If Tenant remains in possession of all or any part
of the Premises after the expiration of the term of this Lease, with or
without the express or implied consent of Landlord, such tenancy shall be from
month to month only, and not a renewal hereof or an extension for any further
term, and in such case, rent and other sums due hereunder shall be payable at
one hundred fifty percent (150%) of the Monthly Base Rent in effect
immediately prior to such holdover period.
23.10 Recording. No copy of this Lease will be recorded on behalf of
either party, but in lieu thereof, Landlord and Tenant agree that each will,
upon request of the other, execute, in recordable form, a "short form" of the
Lease, which "short form" shall contain a description of the Premises, the
term of the Lease, the parties to the Lease. The "short form" of the Lease
shall not modify the terms of the Lease or be used in interpreting the Lease
and in the event of any inconsistency between this Lease and the "short form"
of the Lease, the terms and conditions of this Lease shall control.
23.11 Reasonable Consent. Except as limited elsewhere in this Lease,
whenever in this Lease Landlord or Tenant is required to give consent or
approval to any action on the part of the other, such consent or approval
shall not be unreasonably withheld. In the event of failure to give any such
consent, the other party shall be entitled to specific performance at law and
shall have such other remedies as are reserved to such party under this Lease.
23.12 Notice. Any notice required to be given under this Lease shall be
given in writing and shall be delivered in person or by registered or
certified mail, postage prepaid, and addressed to the addresses for Landlord
and Tenant set forth above. Such notice shall be deemed delivered when
personally delivered or upon the notice in the United States mail in the
manner provided above.
23.13 No Partnership. Landlord does not as a result of entering into
this Lease, in any way or for any purpose become a partner of Tenant in the
conduct of Tenant's business, or otherwise, or joint venturer or a member of a
joint enterprise with Tenant.
Exhibits: This lease agreement has four exhibits attached and made a
part thereof.
Exhibit A - Floor Plan
Exhibit B - Base Rental Schedule
Exhibit C - Landlord Work Letter
Exhibit D - Guaranty of Lease
IN WITNESS WHEREOF, the parties hereto have executed this Lease the day
and year first above written.
LANDLORD: Dane Associates, LLC
BY: /s/
ITS: Managing Member
TENANT: Whole Living, Inc., dba Brain Garden
BY: /s/ Xxxxxxx X. Xxxxxx
ITS: Chief Financial Officer