EXHIBIT 10.3
DEFENSE DISTRIBUTION DEPOT OGDEN UTAH
[TENANT'S TRADENAME] - LEASE OF BUILDING 365 (16-A)
ICON HEALTH AND FITNESS, INCORPORATED
DATED: 6/29/98
BETWEEN
LANDLORD: OGDEN CITY, a Utah Municipal Corporation,
acting as a Local Redevelopment Authority
2484 Washington Blvd., Suite 320
Ogden, UT 84401-2319
Attention: Michael D. Pavich, Director
801/629-8915
801/629-8917 - Fax
TENANT: ICON HEALTH AND FITNESS, INCORPORATED
1500 South 1000 West
Logan, Utah 84321
801/750-5000
801/753-0209 - Fax
GUARANTORS: _________________________________________
_________________________________________
TABLE OF CONTENTS
ARTICLE I - SUMMARY OF CERTAIN LEASE PROVISIONS ...................................................... 2
ARTICLE 2 - DEMISE AND PREMISES ...................................................................... 4
2.1 Demise and Premises ............................................................................ 4
2.2 Use of Common Areas ............................................................................ 4
2.3 Improvements ................................................................................... 5
ARTICLE 3 - TERM AND COMMENCEMENT OF RENT AND OPTIONS ................................................ 5
ARTICLE 4 - RENT ..................................................................................... 5
4.1 Minimum Rent ................................................................................... 5
4.2 Triple Net Lease ............................................................................... 6
ARTICLE 5 - SECURITY DEPOSIT ......................................................................... 6
5.1 Security Deposit ............................................................................... 6
5.2 Transfer of Landlord's Interest ................................................................ 7
ARTICLE 6 - TAXES .................................................................................... 7
6.1 Real Property Taxes ............................................................................ 7
6.2 Personal Property Taxes ........................................................................ 7
6.3 New Taxes ...................................................................................... 7
ARTICLE 7 - USE ...................................................................................... 8
7.1 Use ............................................................................................ 8
7.2 Suitability .................................................................................... 8
7.3 Uses Prohibited ................................................................................ 9
7.4 Covenants to Operate ........................................................................... 10
7.5 Access to DDOU ................................................................................. 11
ARTICLE 8 - UTILITIES, SERVICES ...................................................................... 11
8.1 Landlord's Obligations ......................................................................... 11
8.2 Payment of Utility Services .................................................................... 11
8.3 Maintenance of Utility Services ................................................................ 11
8.4 Electrical Overload ............................................................................ 11
ARTICLE 9 - MAINTENANCE AND REPAIRS; ALTERATIONS AND ADDITIONS; FIXTURES ............................. 11
9.1 Landlord's Obligations for Maintenance ......................................................... 11
9.2 Tenant's Obligations for Maintenance ........................................................... 13
9.3 Alterations .................................................................................... 14
ARTICLE 10 - ENTRY BY LANDLORD ....................................................................... 14
ARTICLE 11 - LIENS ................................................................................... 15
ARTICLE 12 - INDEMNITY ............................................................................... 16
TABLE OF CONTENTS - i
12.1 Assumption of Risks Release ........................................................................... 16
12.2 Tenant -Indemnification and Hold Harmless ............................................................. 16
12.3 Landlord - Indemnification and Hold Harmless .......................................................... 17
12.4 Time of Commencement .................................................................................. 17
ARTICLE 13 -INSURANCE ......................................................................................... 17
13.1 General Liability and Property Damage.................................................................. 17
13.2 Fire and Extended Coverage............................................................................. 17
13.2.1 Premises...................................................................................... 17
13.2.2 Fixtures...................................................................................... 18
13.2.3 Rent Loss Endorsement......................................................................... 18
13.3 Form of Policies....................................................................................... 18
13.4 Waiver of Subordination................................................................................ 19
ARTICLE 14 - DAMAGE OR DESTRUCTION ............................................................................ 19
14.1 Reconstruction of Damaged Premises .................................................................... 19
14.2 Partial Destruction of Building ....................................................................... 19
ARTICLE 15 - CONDEMNATION ..................................................................................... 20
ARTICLE 16 -ASSIGNMENT AND SUBLEASE ........................................................................... 21
16.1 By Tenant ............................................................................................. 21
16.2 Excess Rents .......................................................................................... 21
16.3 Sale of Interest in Tenant ............................................................................ 21
16.4 No Release ............................................................................................ 21
16.5 By Landlord ........................................................................................... 22
ARTICLE 17 - SUBORDINATION, QUIET ENJOYMENT, ATTORNMENT ....................................................... 22
17.1 Subordination ......................................................................................... 22
17.2 Subordination Agreements .............................................................................. 22
17.3 Quiet Enjoyment ....................................................................................... 23
17.4 Attornment ............................................................................................ 23
ARTICLE 18 - DEFAULT AND REMEDIES.............................................................................. 23
18.1 Default ............................................................................................... 23
18.2 Notice ................................................................................................ 24
18.3 Remedies .............................................................................................. 24
18.4 Special Damages ....................................................................................... 26
18.5 Late Charges .......................................................................................... 26
18.6 Default by Landlord ................................................................................... 26
18.7 Bankruptcy ............................................................................................ 26
18.7.1 Chapter 7 .................................................................................... 26
18.7.2 Chapter 11 ................................................................................... 27
18.7.3 Subsequent Petitions ......................................................................... 28
18.7.4 Adequate Assurances .......................................................................... 28
18.7.5 Use and Occupancy Charges .................................................................... 29
18.7.6 No Transfer Without Consent .................................................................. 29
ARTICLE 19 - NOTICES .......................................................................................... 29
TABLE OF CONTENTS - ii
ARTICLE 20 - COMMON AREAS ................................................................................... 29
20.1 Availability ........................................................................................ 29
20.2 Definition .......................................................................................... 30
20.3 Landlord's Management and Control ................................................................... 30
20.4 Employee Parking .................................................................................... 31
ARTICLE 21 -SIGNS ........................................................................................... 31
ARTICLE 22 - GENERAL ........................................................................................ 31
22.1 Exclusives........................................................................................... 31
22.2 Tenant Offset and Estoppel Certificate............................................................... 32
22.3 Transfer of Landlord's Interest...................................................................... 32
22.4 Captions, Attachments: Defined Terms................................................................. 32
22.5 Entire Agreement..................................................................................... 33
22.6 Severability......................................................................................... 33
22.7 Costs of Suit........................................................................................ 34
22.8 Times; Joint and Several Liability; Guarantors....................................................... 34
22.9 Binding Effect: Choice of Law........................................................................ 34
22.10 Waive................................................................................................ 34
22.11 Surrender of Premises................................................................................ 34
22.12 Holding Over......................................................................................... 35
22.13 Force Majeure........................................................................................ 35
22.14 Interest on Past Due Obligations..................................................................... 35
22.15 Corporate Authority.................................................................................. 35
22.16 Provisions Re: Landlord's Lease...................................................................... 35
22.17 Warranties of Tenant................................................................................. 36
22.18 Commission Agreements................................................................................ 36
ARTICLE 23 - SPECIAL CONDITIONS AND AGREEMENTS............................................................... 36
TABLE OF CONTENTS - iii
DEFENSE DISTRIBUTION DEPOT OGDEN UTAH
LEASE AGREEMENT
For and in consideration of the rental and of the covenants and
agreements hereinafter set forth to be kept and performed by the Tenant,
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the
Premises herein described for the term, at the rental, and subject to and upon
all of the terms, covenants and agreements hereinafter set forth, which shall be
a binding agreement as of the effective date.
ARTICLE I - SUMMARY OF CERTAIN LEASE PROVISIONS
1.1 EFFECTIVE DATE: 6/29/98
1.2 LANDLORD: Ogden City, a Utah Municipal Corporation, acting as a Local
Redevelopment Agency
1.3 TENANT: ICON Health and Fitness, Incorporated
1.4 GUARANTOR(s): ______________________________________
1.5 TENANT'S TRADE NAME: ICON Health and Fitness, Incorporated
1.6 LEASE TERM: 1 years; 0 months, 4 extension options of 1 years each
RENT/TERM COMMENCEMENT DATE: 6/29/98
1.7 RENEWAL OPTIONS: Four (4) - One (1) Year Options
1.8 MINIMUM RENT:
year(s) 1 $469,608 annually; $39,134 monthly(l.80/sq.ft./year)
2 $469,608 annually; $39,134 monthly(l.80/sq.ft./year)
3 $469,608 annually; $39,134 monthly(1.80/sq.ft./year)
4 $469,608 annually; $39,134 monthly(1.80/sq.ft./year)
1.9 SECURITY DEPOSIT: $10,000
PREPAID RENT: $ 39,134 First month's rent due on 6/29, 1998, the Rent
Commencement Date.
1.10 DESCRIPTION OF PREMISES: See Exhibit A.
1.11 TENANT'S EXPENSES: Among other provisions, refer to Article 6 - Taxes;
Article 8 - Utilities; and Article 9 - Maintenance and Repairs.
LEASE AGREEMENT - 2
1.12 USE OF PREMISES: Warehouse and distribution of fitness equipment.
1.13 ADDRESS FOR NOTICES:
To Landlord: To Tenant
Ogden City, a Utah Municipal Corporation, ICON Health and Fitness, Incorporated
acting as a Local Redevelopment Authority 1500 South 1000 West
2484 Washington Blvd., Suite 320 Logan, Utah 84321
Ogden, UT 84401-2319
Attention: Michael D. Pavich, Director Attention: Kent S. Lundgreen,
Materials Manager
To Landlord's Counsel: To Guarantors:
Andrea W. Lockwood ________________________________
Assistant City Attorney ________________________________
2484 Washington Blvd., Suite 320 ________________________________
Ogden, LIT 84401-2319
ADDENDUM - SPECIAL PROVISIONS: See Addendum attached at end of Lease
EXHIBITS: The following exhibits are an integral part of this lease.
Exhibit A - Description of the Leased Premises
Exhibit B - Construction Provisions
Exhibit C - Sign Standards
Exhibit D - Estoppel Certificate
Exhibit E - Guarantor's Obligations
Exhibit F - Basic Rules and Regulations
The foregoing is a summary only and reference should always be made to
the full lease provisions. Each reference in this Lease to any of the summarized
lease provisions contained in Article I shall be construed to incorporate all of
the terms provided under each summarized lease provision and in case of any
conflict with the balance of the Lease, the latter shall control.
LEASE AGREEMENT - 3
ARTICLE 2 - DEMISE AND PREMISES
2.1 Demise and Premises.
2.1.1 Landlord hereby leases and lets to Tenant, and Tenant hereby
rents from Landlord, upon and subject to the terms, conditions, covenants and
provisions hereof, that certain parcel of land and the building or buildings
located thereon (hereinafter the "Building") (hereinafter the land and Building
may be collectively referred to as the "Leased Premises" or "Premises") within
the Federal installation now known as Defense Distribution Depot Ogden, Utah
("DDOU") in Weber County, Utah, together with and subject to all conditions,
restrictions, obligations, rights, privileges, easements and appurtenances
thereto, including without limitation those created pursuant to the Department
of the Army Interim Lease Under Base Realignment and Closure between the United
States (hereinafter the "Government") and Landlord (the "Landlord's Lease"). A
description of the Premises, along with a general site plan showing, among other
things, the Premises and some of the principal improvements which comprise DDOU,
is attached as Exhibit A.
2.1.2 Tenant acknowledges that the site plan shown on Exhibit A is
tentative and that Landlord may change the shape, size, location, number and
extent of the improvements shown thereon and eliminate or add any improvements
to any portion of DDOU. Landlord reserves the absolute right to effect such
other tenancies in DDOU as Landlord in the exercise of its sole business
judgment shall determine to best promote the interest of DDOU. Tenant does not
rely on the fact nor does Landlord represent that any specific tenant or number
of tenants shall during the term of this Lease occupy any space in DDOU.
2.1.3 Tenant acknowledges that Landlord is negotiating with the
Government to obtain fee title to DDOU. If Landlord becomes the owner of DDOU,
Landlord shall have the absolute right to subdivide the property comprising
DDOU, including the right to subdivide such property in such a manner that
affects the description of Tenant's Premises; provided that no change will be
made without consent of Tenant which:
a. Affects the footprint of the Building (or any material
part thereof) located on the Premises; or
b. Eliminates or significantly affects approved access to
the Premises or approved parking on the Premises; or
c. Affects any improvements installed or constructed by
Tenant.
2.2 Use of Common Areas. As more fully set forth in Article 20, the
use and occupancy by the Tenant of the Leased Premises shall include the use in
common, with others entitled thereto, of the common areas, as may be designated
from time to time by the Landlord, subject, however, to the terms and conditions
of this Agreement and to reasonable rules and regulations for the use thereof as
prescribed from time to time by the Landlord. Tenant and its
LEASE AGREEMENT - 4
employees shall park their cars only in areas specifically designated from time
to time by Landlord for that purpose.
2.3 Improvements. The obligations of Landlord, if any, and Tenant to
perform the work and supply material and labor to prepare the Premises for
occupancy are set forth in detail on Exhibit B. Landlord and Tenant shall expend
all funds, and do all acts required of them in Exhibit B and shall have the work
performed promptly and diligently in a first-class workmanlike manner.
ARTICLE 3 - TERM AND COMMENCEMENT OF RENT AND OPTIONS
3.1 This Lease shall be effective and shall be a binding and
enforceable agreement upon the date of its execution and each of the parties
shall have all rights and remedies at law for any breach or anticipatory breach
hereof. The initial term of this Lease shall be for One (1) years as specified
in Article 1.6 (the "Term"). The initial One (1) year term and each extension
term shall terminate one (1) day prior to the day of the year which is the day
of the year of termination and expiration of the Landlord's ground lease. The
day of the year when Landlord's Lease terminates is August 27. The Term, and
Tenant's obligation to pay rent, shall commence on the date specified in Article
1.6 (the "Commencement of Rent").
3.2 In the event that the Commencement of Rent does not occur on the
first day of the month, then Tenant shall pay rent for the fractional month on a
per diem basis (calculated on the basis of a thirty (30) day month) until the
first day of the following month; and thereafter the Minimum Rent shall be paid
in advance in equal monthly installments on the first day of each and every
month.
3.3 If a right to renew is granted in 1.8 above and providing Tenant is
not in default, Tenant may extend the term of this Lease for up to Four (4)
consecutive option terms of One (1) years each on the same terms and conditions,
except length of term and the rental terms, as the initial term as provided in
1.8 above. Such right of extension may be exercised by Tenant giving written
notice to Landlord to extend such term at least six (6) months prior to the
August 27 termination date; provided that if the year of termination is in the
year 2002, 2007, 2012 or 2017, as applicable, Tenant shall provide at least two
hundred (200) days prior written notice of such election to renew.
3.4 Unless Tenant has timely notified Landlord of its election to renew
the Lease, Landlord may choose not to extend its Landlord's Lease for a
corresponding option term. Tenant acknowledges that Landlord must exercise its
option to extend its Landlord's Lease at least six (6) months prior to the
expiration (August 27) of the Landlord's Lease Term or Option Term then in
effect.
ARTICLE 4 - RENT
4.1 Minimum Rent. Tenant shall pay without deduction or offset of any
kind, except such specific offsets, if any, as may be expressly agreed to in the
Addendum to this Lease, to
LEASE AGREEMENT - 5
Landlord as Minimum Rent for the Premises during the Term the amount specified
in Article 1.8. Such Minimum Rent shall be payable in equal monthly installments
during the Term with such amounts to be paid in advance on the first day of each
calendar month from the Commencement of Rent and thereafter throughout the term
of the Lease including any renewal periods, if any. All rent to be paid by
Tenant to Landlord shall be in lawful money of the United States of America and
shall be paid without prior notice or demand, and at such place or places as may
be designated from time to time by Landlord.
4.2 Triple Net Lease. This Lease is a triple net lease and in addition
to the rent, due hereunder, Tenant shall be responsible for all insurance,
taxes, and maintenance expenses (except for maintenance expenses specifically
excluded pursuant to Section 9.1) as hereinafter in this Lease more particularly
described, it being generally understood and agreed that Landlord shall not be
responsible for any costs or expenses in connection with the Premises during the
term of this Lease and shall be entitled to a net return of the rental herein
specified undiminished by the cost of insurance, taxes and assessments described
in Article 6 or water, electrical, gas, sewer or other utility charges or levies
or any kind or nature whatsoever, and operation, repair, upkeep, renewal,
improvement, alteration or reconstruction of the building and/or appurtenances
thereto, now or at any time hereafter, during the term of this Lease or any
renewal or extension hereof, except where otherwise specifically provided to the
contrary herein.
ARTICLE 5 - SECURITY DEPOSIT
5.1 Security Deposit. The Landlord acknowledges receipt of the amount
set forth in Article 1.9 which it is to retain as security for the faithful
performance of all the covenants, conditions and agreements of this Lease, but
in no event shall the Landlord be obliged to apply the same upon rents or other
charges in arrears or upon damages for the Tenant's failure to perform the said
covenants, conditions and agreements; the Landlord may so apply the Security
Deposit, at its option; and the Landlord's right to the possession of the
Premises for non-payment of rents or for other reasons shall not in any event be
affected by reason of the fact that the Landlord holds this Security Deposit.
The Security Deposit, if not applied toward the payment of rents in arrears or
toward the payment of damages suffered by the Landlord by reason of the Tenants
breach of the covenants, conditions and agreements of this Lease, is to be
returned to Tenant without interest when this Lease is terminated, according to
these terms, and in no event is the Security Deposit to be returned until Tenant
has vacate the Premises and delivered possession to the Landlord.
In the event that the Landlord repossesses the Premises because of the
Tenant's default or because of the Tenant's failure to carry out the covenants,
conditions and agreements of this Lease, Landlord may apply the Security Deposit
toward damages as may be suffered or shall accrue thereafter by reason of the
Tenant's default or breach. In the event of bankruptcy or other debtor-creditor
proceedings against Tenant, the Security Deposit shall be deemed to be applied
first to the payment of Rents and other charges due Landlord for the earliest
possible periods prior to the filing of such proceedings. The Landlord shall not
be obliged to keep the Security Deposit as a separate fund, but may mix the same
with its own funds.
LEASE AGREEMENT - 6
5.2 Transfer of Landlord's Interest. Landlord may deliver the Security
Deposit, subject to the terms of this Lease, to the purchaser or assignee of
Landlord's interest in the Premises and thereupon Landlord shall be discharged
from any further liability with respect to the Security Deposit. This Section
5.2 shall also apply to any subsequent transfers of Landlord's interest in the
Premises.
ARTICLE 6 - TAXES
6.1 Real Property Taxes. In addition to the rents provided for in Article
4 above, and commencing with the term of this Lease, Tenant agrees to pay all
taxes (including any privilege tax imposed under (S)59-4-101, Utah Code Ann.,
and other fees or charges hereinafter defined as New Taxes) and assessments,
whether general or special, levied and assessed for any year within the Lease
Term upon the Premises and the underlying realty. With respect to any
assessments which may be levied against or upon the Premises or which under the
laws then in force may be evidenced by improvement or other bonds, or may be
paid in annual installments, only the amount of such annual installment (with
appropriate proration for any partial year) and statutory interest shall be
included within the computation of the annual estimate of taxes and assessments
levied against the Premises. Taxes for the first and last year of the term
hereof shall be prorated between the Landlord and Tenant as of the commencement
and expiration of the term.
6.2 Personal Property Taxes. Tenant shall pay, before delinquency, all
taxes, assessments, license fees and public charges levied, assessed or imposed
upon or measured by the value of its business operation, including but not
limited to the furniture, fixtures, leasehold improvements, equipment and other
property of Tenant at any time situated on or installed in the Premises by
Tenant. If any time during the term of this Lease any of the foregoing are
assessed as a part of the real property of which the Premises are a part, Tenant
shall pay to Landlord upon demand the amount of such additional taxes as may be
levied against said real property of which the Premises are a part. Upon such
payment, Landlord shall pay such amounts to the entity responsible for
collection of such taxes. For the purpose of determining said amount, figures
supplied by the County Assessor as to the amount so assessed shall be
conclusive.
6.3 New Taxes. In addition to rent and other charges to be paid by Tenant
hereunder, Tenant shall reimburse to Landlord, within thirty (30) days of the
mailing of notice of a demand therefor, any and all new taxes and assessments
payable by Landlord (other than net income, estate and inheritance taxes)
whether or not now customary or within the contemplation of the parties hereto:
6.3.1 upon, allocable to, or measured by the area of the Premises or
on the rent payable hereunder, including without limitation, any gross rental
income tax or excise tax levied by the State, any political subdivision thereof,
City or Federal Government with respect to the receipt of such rent, or
LEASE AGREEMENT - 7
6.3.2 upon or with respect to the possession, leasing, operations,
management, maintenance, alteration, repair, use or occupancy by Tenant of the
Premises or any portion thereof, or
6.3.3 upon this transaction or any documents to which Tenant is a
party creating or transferring an interest or an estate in the Premises; or
6.3.4 any fees or charges levied against Landlord or the Premises
by or on behalf of any governmental (either public or quasi-public) entity for
services rendered by or on behalf of any governmental (public or quasi-public)
entity, including those established in place of property taxes, whether called
"fees" or otherwise, including but not limited to, the Premises' prorated share
of any Municipal Improvement District assessments.
ARTICLE 7 - USE
7.1 Use. Tenant shall use the Premises solely for the purposes outlined
under Article 1.12 and under the trade name, if any, as specified in Article
1.5. The Tenant shall not use or permit the Premises to be used for any other
purpose or under any other trade name whatsoever without the prior written
consent of the Landlord. Without limiting the generality of the foregoing,
Landlord may withhold its consent if the intended use:
7.1.1 would violate or conflict with the DDOU Reuse Plan, as
adopted by the Ogden City Council; or
7.1.2 would be inconsistent with the existing or desired tenant mix
within DCOU; or
7.1.3 would place an unreasonable burden upon the common areas,
such as increased parking and traffic, and/or would be unreasonably burdensome
on other properties located within DDOU; or
7.1.4 would be in violation of the use restrictions set forth in
this Lease or in the Landlord's Lease; or
7.1.5 would interfere with or adversely affect the Government in or
about the property.
The foregoing is not intended as an exclusive list of reasons
authorizing the Landlord to withhold its consent in the exercise of its
reasonable business judgment.
7.2 Suitability. Tenant acknowledges that neither Landlord nor any
agent of Landlord has made any representation or warranty with respect to the
Premises or with respect to the suitability of the Premises or DDOU 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. Tenant shall inspect the Premises prior to taking
possession
LEASE AGREEMENT - 8
and shall give Landlord written notice specifying in reasonable detail the
respects in which the Premises are not in satisfactory condition. The taking by
Tenant of possession of the Promises shall conclusively establish that the
Premises were at such time in satisfactory condition.
7.3 Uses Prohibited.
7.3.1 Tenant further covenants and agrees that it will not use
or suffer or permit any person or persons to use the Premises or any part
thereof for any use prohibited by the Landlord's Lease, or restrictions
contained in leases of other existing tenants of DDOU, including without
limitation, restrictions upon the sale of drugs, sexual paraphernalia, alcoholic
beverages, pornographic literature and tapes; or for conducting therein a
theater, bowling alley, skating rink, bawdy house, nightclub, bar, tavern, adult
bookstore, automotive repair, dance hall, pool hall, game parlor, massage
parlor, car wash, renting, leasing or sale of motor vehicles or trailers,
gambling, liquor store, second-hand store, auction, distress or fire sale or
bankruptcy or going-out-of business sale, or for any use or purpose in violation
of the laws of the United States of America or the City, County, and/or State in
which the Premises is located, or the ordinances, regulations and requirements
of such governmental (public or quasi-public entities) or other lawful
authorities, and that during said term the Premises, and every part thereof,
shall be kept by the Tenant in a clean and wholesome condition, free of any
objectionable noises, odors or nuisances, and that all health, safety, and
policy regulations shall, in all respects and at all times, be fully complied
with by the Tenant. Notwithstanding the restriction on second-hand stores, or
distress sales, Tenant may conduct incidental sales of seconds or refurbished
warehouse inventories of exercise equipment, in conjunction with the main
warehousing function.
7.3.2 Tenant may not display or sell merchandise or allow
carts, portable signs, devices or any other objects to be stored or to remain
outside the defined exterior walls and permanent doorways of the building
constructed on the Premises. Tenant further agrees not to install any exterior
lighting, shades or awnings, amplifiers or similar devices or use in or about
the Premises any advertising medium or promotional materials or facilities which
may be distributed, heard or seen outside the Premises, such as flyers, flashing
lights, searchlights, loudspeakers, phonographs or radio broadcasts or make any
changes to the front and/or facade of the Building without Landlord's prior
written consent. Tenant shall not conduct or permit to be conducted any sale by
auction in, upon or from the Premises, whether said auction be voluntary,
involuntary, pursuant to any assignment for the payment of creditors or pursuant
to any bankruptcy or other insolvency proceeding.
7.3.3 Tenant shall not do or permit anything to be done in or
about the Premises nor bring or keep anything therein which will in any way
increase the existing rate or affect any fire or other insurance upon the
Premises or any building of which the Premises may be a part, or DDOU, or any of
its contents (unless Landlord has consented in writing to such use and Tenant
pays any increased premium as a result of such use or acts), or cause a
cancellation of any insurance policy covering the Premises or any building of
which the Premises may be a part, or DDOU, or any of its contents, nor shall
Tenant sell or permit to be kept, used or sold in or about said Premises any
articles which may be prohibited by an extended coverage policy of fire and
other casualty insurance.
LEASE AGREEMENT - 9
7.3.4 Tenant shall not do or permit anything to be done in or
about the Premises which will in any way obstruct or interfere with the rights
of the Government or of other tenants or occupants in DDOU, create undue noise
and disruption, or injure or annoy them or use or allow the Premises to be used
for unlawful or objectionable purpose, nor shall Tenant cause, maintain or
permit any nuisance in, or about the Premises. Tenant shall not commit or suffer
to be committed any waste in or upon the Premises.
7.3.5 Tenant shall not use the Premises or permit anything to
be done in or about the Premises which will in anyway conflict with any law,
statute, ordinance or governmental rule or regulation or requirement of duly
constituted public authorities now in force or which may hereafter be enacted or
promulgated. Tenant shall at its sole cost and expense promptly comply with all
laws, statutes, ordinances and governmental rules, regulations or requirements
now in force or which may hereafter be in force and with the requirements of any
board of fire underwriters or other similar body now or hereafter constituted
relating to or affecting the condition, use or occupancy of the Premises,
excluding structural changes not relating to or affecting the condition, use or
occupancy of the Premises, or not related or afforded by Tenant's improvements
or acts. The judgment of any court of competent jurisdiction or the admission of
Tenant in any action against Tenant, whether Landlord be a party thereto or not,
that Tenant has violated any law, statute, ordinance or governmental rule,
regulation or requirement, shall be conclusive of the fact as between Landlord
and Tenant.
7.3.6 Any provision in the foregoing notwithstanding Tenant
shall have no right to rely upon the restrictions provided herein and Landlord,
at its sole discretion except as limited in the Landlord's Lease, may modify,
and approve any uses and activities of DDOU set forth in Section 7.3. Any such
consent given with respect to another tenant or use shall not be deemed to be a
waiver of such requirement with regard to Tenant hereunder except with
Landlord's express written approval.
7.3.7 Landlord represents and warrants to Tenant that the
Landlord's Lease and current zoning of the Premises allow the operation of a
warehousing, distributing, and manufacturing of fitness and related equipment on
the Premises.
7.4 Covenants to Operate.
7.4.1 Tenant covenants and agrees that, continuously and
uninterruptedly from and after the commencement of the term of this Lease, it
will operate and conduct within the Premises, during customary operating hours
as established from time to time, the business which it is permitted to operate
and conduct under the provisions hereof, except while the Premises are
untenantable by reason of fire or other casualty.
7.4.2 Tenant shall refrain from dumping, disposal, reduction,
incineration or other burning of trash, refuse or garbage of any kind in or
about the Premises. Tenant shall store all trash and garbage within the Premises
or at a location designated by Landlord in covered metal containers so located
as not to be visible to customers or business invitees in DDOU.
LEASE AGREEMENT - 10
Tenant shall also arrange for and bear the expense of the prompt and regular
removal of such trash and garbage from the Premises.
7.4.3 Tenant shall complete, or cause to be completed, all
deliveries, loading, unloading and services at locations approved by Landlord,
during times designated by Landlord, and in a manner that will not interfere
with Landlord, other tenants, or employees or customers of Landlord or other
tenants, or activities for damages resulting from roof leakage unless Landlord
after written notice from Tenant fails to use reasonable diligence in attempting
to identify sources of such leakage and to reasonably implement repairs.
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9.2 Tenant's Obligations for Maintenance.
9.2.1 Except as provided in Section 9.1, Tenant agrees at all
times, from and after delivery of possession of the Premises to the Tenant, and
at its own cost and expense, to maintain, repair and/or replace in good and
tenantable condition the Premises and the Building including, but without
limitation, the exterior and interior portion of all doors, door checks,
windows, plate glass, all plumbing and sewage facilities within the Building,
including free flow to the main sewer line, fixtures, heating and air
conditioning system and equipment, and electrical wiring and equipment and
interior walls, floors, ceilings and insulation. Tenant shall keep and maintain
the Premises in a clean, sanitary and safe condition in accordance with
applicable laws and in accordance with all directions, rules and regulations of
the health officer, fire marshall, insurance underwriter or rating bureau
designated by Landlord, building inspector, or other proper officials of the
governmental agencies having jurisdiction, at the sole cost and expense of
Tenant; and Tenant shall comply with all requirements of law, ordinance and
otherwise, affecting the Premises. Tenant shall decorate and paint, in a manner
satisfactory to Landlord, as necessary to maintain at all times a clean and
sightly appearance.
9.2.2 The Tenant further covenants and agrees that if Tenant
refuses or neglects to make repairs and/or maintain the Premises, or any part or
component thereof, in a manner reasonably satisfactory to Landlord then Landlord
may (but is not obligated to) go upon the Premises and make any necessary
repairs or maintenance to the Premises or any part or component thereof and
perform any work therein including that which may be necessary to comply with
any laws, ordinances, rules or regulations of any public authority or of the
City Planning Commission or of any similar body, or that the Landlord may deem
necessary to prevent waste or deterioration in connection with the Premises if
the Tenant does not make or cause such repairs to be made or performed or cause
such work to be performed promptly after receipt of written demand from the
Landlord. Nothing herein contained shall imply any duty on the part of the
Landlord to do any such work which under any provision of this Lease the Tenant
may be required to do, nor shall it constitute a waiver of Tenant's default in
failing to do the same. No exercise by the Landlord of any rights herein
reserved shall entitle the Tenant to any damage for an injury or inconvenience
occasioned thereby nor to any abatement of rent. In the event Landlord makes or
causes any such repairs to be made or performed, as provided herein, Tenant
shall pay the cost thereof to Landlord, forthwith, as additional rent upon
receipt of a bill therefor, and such cost shall include interest at the rate
provided for on Past Due Obligations as provided in Section 22.14 from the date
of completion of the repairs or earlier payment by Landlord for services or
costs associated therewith.
9.2.3 Upon the expiration or earlier termination of this
Lease, Tenant shall surrender the Premises in broom clean condition and
otherwise in good condition, ordinary wear and tear and damage by fire,
earthquake, act of God or the elements alone excepted, and shall promptly remove
or cause to be removed at Tenant's expense from the Premises and the Building
any signs, notices and displays placed by Tenant. Tenant agrees to repair any
damage to the Premises or DDOU caused by or in connection with the removal of
any articles of personal
LEASE AGREEMENT - 13
property, business or trade fixtures, machinery, equipment, cabinetwork, signs,
furniture, moveable partitions or permanent improvements or additions, including
without limitation thereto, repairing the floor and patching and painting the
walls where required by Landlord to Landlord's reasonable satisfaction, all at
Tenants sole cost and expense. In repairing such damage, Tenant shall only be
obligated to restore the Premises to its state of condition existing at the
commencement of this Lease, normal wear and tear excepted. Tenant shall
indemnify the Landlord against any loss or liability resulting from the delay by
Tenant in so surrendering the Premises, including without limitation, any claims
made by any succeeding tenant founded on such delay.
9.3 Alterations.
9.3.1 Tenant shall not make any substantial or structural
alterations or additions to the Premises nor make any contract therefor without
first procuring the written consent of both the Landlord and, if applicable, the
District Engineer and the said officer (Commander, DDOU, and/or its successor
entity or the officer having immediate jurisdiction over the Leased Premises)
pursuant to the provisions of the Landlord's Lease.
9.3.2 All work with respect to any alterations, additions and
changes must be done in a good and workmanlike manner and diligently prosecuted
to completion to the end that the Premises shall at all times be a complete unit
except during the period of work.
9.3.3 Any such changes, alterations and improvements shall be
performed and done strictly in accordance with the laws and ordinances relating
thereto. In performing the work of any such alterations, additions or changes or
of any construction, Tenant shall have the work performed in such a manner as
not to be a nuisance to Landlord or any other tenant or the Government and shall
not obstruct the access to DDOU or the premises of any other tenant in DDOU.
9.3.4 Before commencing any such construction in or about the
Premises, Tenant shall notify Landlord in writing of the expected date of
commencement thereof. Landlord shall have the right at any time and from time to
time to post and maintain on the Premises such notices as Landlord deems
necessary to protect the Premises and Landlord from mechanics' liens,
materialmen's liens, or any other liens.
ARTICLE 10 - ENTRY BY LANDLORD
10.1 Landlord and the authorized representatives of Landlord may
enter the Premises during normal business hours and upon twenty-four (24) hours
prior notice for the purposes of exhibiting the same to prospective purchasers
or other interested parties.
10.2 Tenant acknowledges that under Section 17 of the Landlord's
Lease the right is reserved to the Government, its officers, agents and
employees to enter upon the Premises at any time and for any purpose necessary
or convenient in connection with Government purposes; to make inspections, to
make any other use of the lands (DDOU) as may be necessary in connection
LEASE AGREEMENT - 14
with Government purposes, and Tenant shall have no claim for damages against
either Landlord or the Government or any officer, agent or employee of Landlord
or the Government on account thereof.
10.3 Landlord and its agents shall have reasonable access to the
Premises during normal business hours for the purpose of examining the same to
ascertain if they are in good repair, and at its option to make reasonable
repairs, but only after notice and failure to cure by Tenant, which Landlord may
be authorized to make hereunder and Tenant hereby grants to Landlord such
licenses and easements as necessary or expedient to effectuate the foregoing.
Tenant hereby further grants to Landlord such licenses or easements in and over
the Premises or any portion thereof as shall be reasonably required for the
installation or maintenance of mains, conduits, pipes or other facilities to
serve DDOU or any part thereof, provided, however, that Landlord shall pay for
any alteration required on the Premises as a result of any such exercise,
occupancy under or enjoyment of any such license or easement and shall not
unduly disrupt Tenant's business.
ARTICLE 11 - LIENS
11.1 Tenant agrees it will pay or cause to be paid all costs for work
done by it on the Premises, and Tenant will keep the Premises free and clear of
all mechanics' liens on account of work done by Tenant or persons claiming under
Tenant. Tenant agrees to and shall indemnify and save Landlord and the
Government free and harmless against claims, liability, loss, damage, costs,
attorneys' fees, and all other expenses on account of claims of lien or
materialmen or others for work performed or materials or supplies furnished to
Tenant or persons claiming under Tenant. It is hereby acknowledged and
understood that no lien may be placed against property owned by the Government
or against property or property interests owned by the Ogden City, so long as
Ogden City, acting as a Local Redevelopment Authority, is the Landlord. If there
is such a lien, and it arises due to the acts, omissions or neglect of the
Tenant, the Tenant has responsibility to clear the title.
11.2 If Tenant shall desire to contest any claim of lien, it shall
furnish Landlord adequate security for the value or in the amount of one hundred
fifty percent (150%) the claim, plus estimated costs and interests, or a bond or
responsible corporate surety in such amount conditioned on the discharge of the
lien. If a final judgment establishing the validity or existence of lien for any
amount is entered, Tenant shall pay and satisfy the same at once.
11.3 If Tenant shall be in default in paying any charge for which a
mechanics' lien claim and suit to foreclose the lien have been filed, and shall
not have given Landlord security to protect the property and Landlord against
such claim of lien, Landlord may (but shall not be so required to) pay the claim
and any costs. The amount so paid, together with reasonable attorneys' fees
incurred in connection therewith, shall be immediately due and owing from Tenant
to Landlord, and Tenant agrees to and shall pay the same with interest at the
rate provided for on Past Due Obligations as provided in Section 22.14 from the
dates of Landlord's payments.
LEASE AGREEMENT - 15
11.4 Should any claims of lien be filed against the Premises or any
action affecting the title to the Premises be commenced, the party receiving
notice of such lien or action shall forthwith give the other party written
notice thereof.
11.5 Landlord and its representative shall have the right to go upon
and inspect the Premises, including the Building, at all reasonable times, and
shall have the right to post and keep posted thereon notice which Landlord may
deem to be proper for the protection of Landlord's interest in the Premises.
Tenant shall, before the commencement of any work which might result in any such
lien, give to Landlord written notice of its intention to do so in sufficient
time to enable Landlord to file and record such notices.
ARTICLE 12 - INDEMNITY
12.1 Assumption of Risks Release. Tenant and all those claiming through
or under Tenant shall store their property in and shall occupy and use the
Premises and the common areas solely at their own risk. Tenant and all those
claiming through or under Tenant hereby release Landlord, and as respective
officers, employees and agents, from all claims of every kind, including loss of
life, personal or bodily injury, damage to merchandise, equipment, fixture or
other property, or damage to business (including business interruption) arising,
directly or indirectly, out of or from or on account of such occupancy and use
or resulting from any present or future conditions or state of repair thereof,
except to the extent such claims are directly caused by the negligence of
Landlord (or its respective officers, employees or agents). Landlord, and its
respective officers, employees and agents, shall not be responsible or liable
for damages to Tenant, or to those claiming through or under Tenant for any loss
of life, bodily or personal injury, or damage to property or business that may
be occasioned by or through the acts, omissions or negligence of any other
person including, without limitation, other tenants, occupants or customers of
any portion of DDOU. Moreover, except to the extent directly caused by the
negligence of Landlord (or its respective officers, employees or agents),
Landlord shall not be responsible or liable for damages at any fine for loss of
life, or injury or damage to any person or to any property or to the business of
Tenant, or those claiming through or under Tenant, caused by or resulting from
(i) the bursting, release, breaking, leaking, overflowing or backing up of
utility lines or any sprinkler system; (ii) water, steam, gas, sewage, snow or
ice in any part of DDOU; (iii) acts of God or the elements; or (iv) any defect
or negligence in the construction, operation or use of any buildings or
improvements in DDOU, including the Premises, or any of the pipes, sprinklers,
wires, plumbing, air conditioning, lighting, or any other equipment, fixtures,
machinery, appliances or apparatus therein.
12.2 Tenant -Indemnification and Hold Harmless. Except to the extent
directly caused by the negligence of Landlord (and its respective officers,
employees and agents), Tenant hereby agrees to defend, pay, indemnify and hold
Landlord (and its respective officers, employees and agents) and the Government
harmless from and against any and all claims, demands, fines, suits, actions,
proceedings, orders, decrees, judgments and liabilities of every kind, and all
reasonable expenses incurred in investigating and resisting the same (including
reasonable attorneys' fees), resulting from or in connection with loss of life,
bodily or personal injury or property damage (i) arising out of or on account of
any occurrence in or on the
LEASE AGREEMENT - 16
Premises, including, specifically without limitation, arising out of the
bursting, release, breaking, leaking, overflowing or backing up of utility lines
or any sprinkler system within the Premises, or (ii) occasioned wholly or in
part through the use and occupancy of the Premises or any improvements therein
or appurtenances thereto, or (iii) occasioned wholly or in part by any act or
omission or negligence of Tenant or any assignee, subtenant, concessionaire,
licensee, invitee, or customer of Tenant, or their respective employees, agents
or contractors in the Premises or in the doorways thereof or on the sidewalks
adjacent thereto or in other areas of DDOU, including the common areas and those
portions thereof owned, leased, subleased or controlled by others.
12.3 Landlord - Indemnification and Hold Harmless. To the extent
directly caused by the negligence of Landlord (and its respective officers,
employees and agents), Landlord hereby agrees to defend, pay, indemnify and hold
Tenant (and its respective officers, employees and agents) harmless from and
against any and all claims, demands, fines, suits, actions, proceedings, orders,
decrees, judgments and liabilities of every kind, and all reasonable expenses
incurred in investigating and resisting the same (including reasonable
attorneys' fees), resulting from or in connection with loss of life, bodily or
personal injury or property damage (i) occasioned wholly or in part through the
use and occupancy of the Premises or any improvements therein or appurtenances
thereto by Landlord (and its respective officers, employees or agents), or (ii)
occasioned by any act or omission or negligence of Landlord, or its respective
employees, agents or contractors in the Premises or in the doorways thereof or
on the sidewalks adjacent thereto or in other areas of DDOU, including the
common areas and those portions thereof owned, leased, subleased or controlled
by Landlord.
12.4 Time of Commencement. The parties expressly acknowledge that all
of the foregoing provisions of this Article 12 shall apply and become effective
from and after the date Tenant first enters upon DDOU for any purpose related to
this Lease.
ARTICLE 13 -INSURANCE
13.1 General Liability and Property Damage. Tenant shall at all times
during the term of this Lease and at its own cost and expense procure and
continue in force workmen's compensation insurance, and comprehensive general
liability insurance adequate to protect Landlord and naming Landlord as an
additional insured in the liability contract against liability for injury or
death of any person in connection with the construction of the improvements,
use, operation or condition of the Premises (and related sidewalks, loading
docks and other appurtenances). Such insurance at all times shall be in an
amount of not less than Two Million Dollars ($2,000,000.00) combined single
limit for bodily injury and property damage. The limits of such insurance shall
not limit the liability of Tenant.
13.2 Fire and Extended Coverage.
13.2.1 Premises. Tenant shall procure and maintain at its cost and
expense during the term of this Lease, Fire, Windstorm and Extended Coverage
Insurance together with an endorsement for Difference In Conditions (with
additional perils to be covered at Landlord's option) on the Premises in amounts
not less than one hundred percent (100%) of the insurable
LEASE AGREEMENT - 17
value of the Building and related improvements above foundations, naming the
Landlord and, at Landlord's election, its Lender as additional insured therein.
If Tenant's operation is the type that could lead to environmental cleanup as
established by the Landlord and the Government, Tenant will procure and maintain
hazardous waste insurance in an amount judged by the Landlord to be sufficient
according to the risk of the operation. Landlord's reasonable estimate of the
insurable value shall be binding on Tenant for the purposes of establishing the
amount of insurance coverage due hereunder.
13.2.2 Fixtures. Tenant shall at all times during the term
hereof, and at its cost and expense, (i) maintain in effect policies of
insurance covering its fixtures and equipment, and leasehold improvements
located on the Premises, in an amount not less than one hundred percent (100%)
of their full replacement cost from time to time during the term of this Lease,
providing protection against any peril included within the classification Fire
and Extended Coverage, together with insurance against sprinkler damage,
vandalism and malicious mischief and (ii) be responsible for the maintenance,
repair, and replacement of the plate glass on the Premises but shall have the
option either to insure the risk or to self insure and (iii) procure and
maintain in full force and effect boiler and machinery insurance on all air
conditioning equipment, boilers, and other pressure vessels and systems, whether
fired or unfired, located in or serving the Premises; and if the said objects
and the damage that may be caused by them or result from them are not covered by
Tenant's Extended Coverage Insurance, then such insurance shall be in amount not
less than One Hundred Thousand Dollars ($100,000.00). The proceeds of such
insurance shall be used to repair or replace the fixtures, equipment and glass
so covered.
13.2.3 Rent Loss Endorsement. Landlord may require that the
above described policies of insurance shall be written with rent loss
endorsements in favor of Landlord and business interruption endorsements in
favor of Tenant to cover a period not less than twelve (12) months in amounts
sufficient to pay Tenant's obligations hereunder including, without limitation,
the Minimum Rent, real property taxes on the Premises, insurance premiums and
utility costs excluding only Tenant's and/or Landlord's avoided costs.
13.3 Form of Policies. All insurance required to be carried by
Tenant hereunder shall be with companies rated A+ IX or better in "Best's
Insurance Guide" or accepted by the U.S. Department of Housing and Urban
Development, and shall be on forms and with loss payable clauses satisfactory to
Landlord naming Landlord, Landlord's mortgagee or other specified lender, and
any other persons, firms or corporations designated by Landlord as additional
insureds as their interests may appear, and copies of policies of such insurance
or certificates issued by the insurance company evidencing the existence and
amounts of such insurance shall be delivered to Landlord by Tenant at least
fifteen (15) days prior to Tenant occupying the Premises. If the Premises are
part of a larger property, said insurance shall have a Landlord's Protective
Liability endorsement attached thereto. All such policies shall be written as
primary policies, not contributing with and not in excess of coverage which
Landlord may carry. No such policies shall be cancelable (or coverage reduced),
except after thirty (30) days written notice to Landlord. Tenant shall, at least
thirty (30) days prior to the expiration of such policies, furnish Landlord with
renewals or "binders" thereof or, if after written notice and demand Tenant
shall fail to provide such insurance, then Landlord may order such insurance and
charge the cost
LEASE AGREEMENT - 18
thereof to Tenant, which amount shall be payable by Tenant upon demand and shall
bear interest at the rate provided for Past Due Obligations as provided in
Section 22.14, from the date of payment by Landlord. Tenant shall have the right
to provide such insurance coverage pursuant to blanket policies obtained by
Tenant provided such blanket policies expressly afford coverage to the Premises
and to the Landlord as required by this Lease and contains the other
requirements set forth herein.
13.4 Waiver of Subordination. Landlord and Tenant each hereby waive any
and all rights of recovery against such other party and the officers, employees,
agents and representatives of such other party for loss of or damage to such
waiving party of its property or the property of others covered under the form
of fire insurance policy with all permissible extensions and endorsements
covering additional perils or under any other policy of insurance carded by such
waiving party in lieu thereof. Tenant shall obtain and furnish evidence to
Landlord of the waiver by Tenant's workmen's compensation carrier and other
carriers of any right of subrogation against Landlord.
ARTICLE 14 - DAMAGE OR DESTRUCTION
14.1 Reconstruction of Damaged Premises. In the event the Premises
shall be partially or totally destroyed by fire or other casualty insurable
under full standard extended coverage insurance, so as to become partially or
totally untenantable, the same shall be repaired as speedily as possible at the
expense of Landlord, unless Landlord shall not elect to rebuild as hereinafter
provided, and a just and proportionate part of the Minimum Rent shall be abated
until ten (10) days after notice from the Landlord to Tenant that the Premises
have been substantially so repaired. The obligation of the Landlord hereunder
shall be limited to the Building and in addition, the Tenant's permanent
improvements as certified by Tenant at commencement of the rental term, but
excluding Tenants trade fixtures, inventory and personal property. In no case
will Landlord's reconstruction obligation include murals, works of art, or
abnormal decorative treatments of Tenants Premises. In case Tenant has failed to
pay to Landlord Tenant's share of fire or other casualty insurance premiums,
Landlord's obligations will be limited to reconstruction of such "Landlord's
Work". Similarly, if Landlord is not responsible to maintain fire or casualty
insurance as to Tenant's "permanent improvements", Landlord shall have no
reconstruction obligation thereunto relating; in which case, Tenant shall be
responsible to "reconstruct" as aforementioned.
14.2 Partial Destruction of Building. If more than fifty percent (50%)
of the gross leasable areas on the ground floor of the Building shall be
destroyed by fire, or other casualty, then Landlord may, if it so elects,
rebuild or put Building in good condition and fit for occupancy within a
reasonable time after such destruction or damage, or may give notice in writing
terminating this Lease. If Landlord elects to repair or rebuild the Building, it
shall within ninety (90) days after the occurrence of such damage or
destruction, give Tenant thereof notice of its intention to repair, as herein
provided, then proceed with reasonable speed to repair. In case Landlord elects
to rebuild or repair as herein provided, then the obligation of Landlord
hereunder shall be limited to the basic Building and in addition the Tenant's
permanent improvements as certified by Tenant at commencement of rental term,
but excluding Tenant's trade fixtures,
LEASE AGREEMENT - 19
inventory and personal property. In no case will Landlord's reconstruction
obligation include murals, works of art, or abnormal decorative treatments of
Tenant's premises. In case Tenant has failed to pay to Landlord Tenant's share
of fire or other casualty insurance premiums, Landlord's obligation will be
limited to reconstruction of such "Landlord's Work". Similarly, if Landlord is
not responsible to maintain fire or casualty insurance as to Tenants "permanent
improvements", Landlord shall have no reconstruction obligation thereunto
relating; in which case Tenant shall be responsible to "reconstruct" as
aforementioned.
Notwithstanding the foregoing, if less then fifty percent (50%) but
more than twenty-five percent (25%) of such gross leasable areas of the Building
shall be damaged or destroyed by fire or other casualty during the last three
(3) years of the Lease Term hereof, then Landlord, at its option, shall have the
right to terminate this Lease by giving written notice to Tenant of its election
to so terminate, such notice to be given within ninety (90) days of the
occurrence of such damage or destruction.
ARTICLE 15 - CONDEMNATION
15.1 In the event that part of the Premises shall be taken or
condemned pursuant to applicable law such that:
(a) The part so taken includes the Building (or any material
part thereof located on the Premises, or
(b) The part so taken eliminates or significantly affects
access to any public street or highway and other alternative access to the
Premises is not available in DDOU, or
(c) The total Promises are taken.
Then and in any of these events, the Tenant shall have the option to
terminate this Lease by written notice to Landlord as herein provided within
thirty (30) days from the date of the physical taking.
15.2 In the event of a taking where the Tenant elects not to
terminate or where the Tenant has no right of termination, the Minimum Rent
shall be thereafter reduced based upon the value of the land of the Premises
immediately before the taking compared to the value of said land after the
taking and thereafter each respective party shall promptly restore the Premises,
parking area or access thereto, to the extent and as the case may be.
15.3 In any event both parties shall have the right to pursue a
condemnation award and shall cooperate with each other to do so with the Tenant
being entitled to any award for lost business, moving expenses and the taking of
the improvements on the Premises and the value of its leasehold estate and the
Landlord being entitled to all other amounts awarded, including, but not limited
to loss of rent and the amounts awarded for residual land value after the
Tenant's leasehold estate value.
LEASE AGREEMENT - 20
ARTICLE 16 -ASSIGNMENT AND SUBLEASE
16.1 By Tenant. Tenant shall not voluntarily or by operation of any
law, assign, license, transfer, mortgage or otherwise encumber all or any part
of Tenant's interest in this Lease (except that Landlord will not unreasonably
withhold its consent to Tenant financing with a first leasehold mortgage which
encumbers only Tenant's merchandise, personal property, equipment and removable
trade fixtures) or in the Premises, and shall not sublet or license all or any
part of the Premises without the prior written consent of both Landlord and the
Government in each instance, and any such transfer, mortgage, encumbrance or
subletting without such consent shall be wholly void. Without in any way
limiting Landlord's right to refuse to give reasonable consent, Landlord
reserves the right to refuse to give such consent for any of the reasons set
forth in Section 7.1 hereof or if in Landlord's sole discretion and opinion the
quality of DDOU or the business conducted an the Premises is or maybe in anyway
adversely affected during the term of the Lease or if the financial worth of the
proposed new tenant is less than that of the Tenant executing this Lease.
Without limiting the generality of the foregoing, the Landlord may also withhold
its consent if any proposed assignee or transferee is not able to demonstrate
credit worthiness satisfactory to Landlord, whose proposed use is different than
specified herein, is not compatible with Landlord's desired tenant mix, who
lacks comparable management ability, expertise, and experience, or whose
inventory or business operation is not otherwise of comparable quality.
16.2 Excess Rents. In the event that Landlord and the Government
consent to the assignment or sublet of the Premises, Landlord shall be entitled
to forty percent (40%) of the payment (as additional rent hereunder) of the
excess rental payable by the assignee or subtenant over the rent payable by
Tenant under the Lease; or, if the entire premises area to be assigned or
sublet, at the election of Landlord the Lease may be terminated in which event
the assignee or subtenant will attorn to Landlord.
16.3 Sale of Interest in Tenant. Tenant may, without Landlord's
consent, transfer the ownership among the existing shareholders or owners of
Tenant. Any sale by Tenant of an interest in excess of 50% of Tenant's capital
stock or assets to any third party who is not an existing shareholder or owner
of Tenant, shall be regarded as an assignment hereunder, requiring the prior
written consent of Landlord and the Government, which consent of the Landlord
shall not be unreasonably withheld, conditioned, or delayed. Notwithstanding the
foregoing, any issuance of tenant capital stock in connection with a public
offering or other recapitalization shall be deemed preapproved and shall not
require the prior written consent of Landlord and the Government.
16.4 No Release. No subletting or assignment, even with the consent of
Landlord, shall relieve Tenant of its obligations hereunder, including those to
pay the rents and monetary charges hereunder, and perform all of the other
obligations to be performed by Tenant hereunder, unless the lease is terminated
by Landlord as provided in 16.2 above, or unless a novation is expressly
approved in writing by Landlord. Any sublet of the Premises shall be subordinate
to the terms of this Lease and any sublease of the Premises, or any portion
thereof, shall specify that such sublease shall terminate upon the termination
of this Lease for whatever reason or at the
LEASE AGREEMENT - 21
sole election of Landlord, shall remain in full force and effect and Landlord,
after the termination of this Lease shall be entitled to receive all rents
payable pursuant to such sublease. The acceptance of rent by Landlord from any
other person 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 to any subsequent assignment, subletting or other transfer.
In the event that Landlord shall consent to a sublease or assignment hereunder,
Tenant shall pay Landlord's reasonable fees and costs incurred in connection
with the processing of documents necessary to the giving of such consent and/or
affecting such assignment or sublease, and shall provide Landlord with sixty
(60) days prior written notice of any request for consent.
16.5 By Landlord. Landlord shall have the right to sell, assign,
transfer, convey or mortgage its interest in this Lease and in and to the
Premises, provided, however, that any such sale, assignment, transfer,
conveyance or mortgage shall not result in the disruption of Tenants quiet
enjoyment of the Premises and any such sale, assignment, transfer, conveyance or
mortgage shall be subject to the terms of this Lease.
ARTICLE 17 - SUBORDINATION, QUIET ENJOYMENT, ATTORNMENT
17.1 Subordination. This Lease, at Landlord's option, shall be subject
and subordinate to all ground or underlying leases or subleases which now exist
or may hereafter be executed affecting the Building or the land or both (the
Premises) and to the lien of any mortgages or deeds of trust in any amount or
amounts whatsoever now or hereafter placed on or against the land or
improvements or either thereof by Landlord, or on or against Landlord's interest
or estate therein, or on or against any ground or underlying lease or sublease
without the necessity of the execution and delivery of any further instruments
on the part of Tenant to effectuate such subordination; provided however, that
so long as Tenant complies with the obligations imposed upon Tenant in this
Lease, neither Tenant nor its successors and assigns (if approved by Landlord
and, if applicable, the Government) shall be disturbed or molested in its
possession of the Premises. If any mortgagee, trustee or ground lessor shall
elect to have this Lease be prior to the lien of its mortgage, deed or trust or
ground lease, and shall give written notice thereof to Tenant, this Lease shall
be deemed prior to such mortgage, deed of trust or ground lease, whether this
Lease is dated prior to, or subsequent to the date of said mortgage, deed of
trust, or ground lease or the date of the recording thereof.
17.2 Subordination Agreements. Tenant hereby acknowledges that this
Lease is subject to the approval of the Government pursuant to the provisions of
the Landlord' Lease. Tenant further covenants and agrees to execute and deliver
upon demand without charge therefor, such further instruments evidencing the
subordination of this Lease to ground or underlying leases and to the lien of
any such mortgage or deeds of trust as may be required by Landlord or
prospective purchasers or mortgagees of the Premises, provided such instruments
contain customary non-disturbance provisions so long as Tenant is performing all
obligations of Tenant under this Lease. Landlord agrees that any trust deed or
any indebtedness or mortgage of Landlord, shall contain apt provisions under the
terms of which the existence of this Lease shall be recognized, and wherein it
shall be provided that so long as Tenant complies with the
LEASE AGREEMENT - 22
obligations imposed upon Tenant in this Lease, neither Tenant nor its approved
successors and assigns shall be disturbed or molested in its possession of the
property covered by this Lease and the full enjoyment of this Lease for the term
and renewals or extensions hereof. This provision shall be binding upon trustees
in deeds of trust, mortgagees in mortgages and receivers thereunder and
purchasers at any sale pursuant thereto.
17.3 Quiet Enjoyment. Landlord covenants that there are no liens upon
its estate other than (a) the effect of covenants, conditions, restrictions,
easements, rights and rights-of-way of record or unrecorded easements and
rights-of-way established by the Government which are attached as an addendum to
this Lease if applicable to Tenant's property or use thereof.) (b) the effect of
any local or state zoning laws; (c) general and special taxes no delinquent; and
(d) other liens, claims and encumbrances which will not affect the Tenant's
quiet enjoyment of the Premises. Landlord agrees that Tenant, upon paying the
rent and other monetary sums due under this Lease and performing the covenants
and conditions of this Lease, may quietly have, hold and enjoy the Premises
during the term hereof or any extension thereof; subject, however, to the
provisions of the hereinbefore referred to, Landlord's Lease, and the mortgages,
or deeds of trust, if any, and subject to provisions of this Lease requiring
Landlord's prior approval to any assignment, sublease, or other use or occupancy
of the Premises. Tenant agrees that as to its leasehold estate it, and all
persons in possession or holding under it, will conform to and will not violate
the terms of the Landlord's Lease.
17.4 Attornment. In the event any proceedings are brought for default
under ground or any underlying lease or in the event of foreclosure,
receivership or in the exercise of the power of sale under any mortgage or deed
of trust made by Landlord covering the Premises, Tenant shall attorn to the
receiver or any purchaser upon any such foreclosure or rate and recognize such
receiver or purchaser as the Landlord under this Lease, provided said purchaser
expressly agrees in writing to accept Tenant and to be bound by the terms of
this Lease.
ARTICLE 18 - 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:
18.1.1 Any failure by Tenant to pay Rent or any other monetary
sums required to be paid hereunder, where such failure continues for ten (10)
days after written notice by Landlord to Tenant;
18.1.2 The failure to occupy or the abandonment or vacation of the
Premises by Tenant;
18.1.3 The repudiation of this Lease by Tenant, any action by
Tenant which renders performance by Tenant of its obligations under this Lease
impossible, or any action by Tenant which demonstrates an intent by Tenant not
to perform an obligation under this Lease or not to continue with the
performance of obligations under this Lease.
LEASE AGREEMENT - 23
18.1.4 A failure by Tenant to observe and perform any other
provision of this Lease to be observed or performed by Tenant, where such
failure continues for thirty (30) days after written notice thereof by Landlord
to Tenant; provided, however, that if the nature of the default is such that the
same cannot reasonably be cured within said thirty (30) day period, Tenant shall
not be deemed to be in default if Tenant shall within such period commence such
cure and thereafter diligently prosecute the same to completion;
18.1.5 The making by Tenant of any general assignment or general
arrangement for the benefit of creditors, the filing by or against Tenant of a
petition for relief under, including a petition for reorganization or
arrangement under, any law relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed within sixty (60) days),
the appointment of a trustee or receiver to take possession of substantially all
of Tenant's assets or of Tenant's interest in this Lease where possession is not
restored to Tenant within thirty (30) days thereof, the attachment, execution or
other judicial seizure of substantially all of Tenants assets located at the
Premises or of Tenant's interest in this Lease where such seizure is not
discharged within thirty (30) days thereof, or an admission by Tenant in writing
of a failure, or an inability to pay its debts generally as they become due.
18.2 Notice. If Landlord shall send more than one (1) notice of default
for any event of default, then Tenant shall pay Landlord the sum of One Hundred
Fifty Dollars ($150.00) in addition to any other obligations hereunder for the
cost of sending each Notice of Default.
18.3 Remedies. In the event of any such material default or breach by
Tenant and after the notice and applicable grace period, if any, provided above,
Landlord may at any time thereafter, without limiting Landlord in the exercise
of any right of remedy at law or in equity which Landlord may have be reason of
such default or breach:
18.3.1 Maintain this Lease in full force and effect and recover
the Rent and other monetary charges as they become due without terminating
Tenant's right to possession irrespective of whether Tenant shall have abandoned
the Premises. In the event Landlord elects not to terminate this Lease by
judicial process, Landlord shall nevertheless have the right to attempt to
re-let the Premises at such rent and upon such conditions and for such a term,
and to do all acts necessary to maintain or preserve the Premises as Landlord
deems reasonable and necessary without being deemed to have elected to terminate
the Lease, including removal of all persons and property from the Premises.
Tenant's property may be removed and stored in a public warehouse or elsewhere
at the cost of an for the account of Tenant, and if Tenant does not pay for
storage, then sold at public action and the proceeds of such sale shall first be
applied to payment of the expenses of such sale, second to amounts due Landlord
and the balance, if any, to Tenant. In the event any re-letting occurs, Tenant's
right to possession of the Premises under this Lease shall terminate
automatically upon the new Tenant taking possession of the Premises, but Tenant
shall nevertheless be responsible for damages, more particularly described in
Sections 18.3.2 through 18.3.5. Notwithstanding that Landlord fails to elect to
terminate the Lease initially, Landlord may, at any time during the term of this
Lease, elect to terminate this Lease by judicial process by virtue of such
previous, unpaid default of Tenant.
LEASE AGREEMENT - 24
18.3.2 Terminate the Lease and Tenant's right to possession through
applicable judicial process and upon issuance of an order of eviction Tenant
shall immediately surrender possession of the Premises to Landlord. In such
event, Landlord shall be entitled to recover from Tenant in any such judicial
process all damages as determined by the court to be incurred by Landlord by
reasons of Tenants default including, without limitation thereto, the following:
18.3.2.1 the worth at the time of award of any unpaid Rent which
had been earned at the time of such termination; plus
18.3.2.2 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 that could have been reasonably
avoided; plus
18.3.2.3 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
could be reasonably avoided; plus
18.3.2.4 any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenants failure to perform his
obligation under this Lease or which in the ordinary course of events would be
likely to result therefrom including costs and expense incurred by Landlord in
making the Premises ready for a new tenant; plus
18.3.2.5 at Landlord's election, such other amounts in addition
to or in lieu of the foregoing as may be permitted from time to time by
applicable law of the State of Utah. Upon any such re-entry, Landlord shall have
the right to make any reasonable repairs, alterations or modifications to the
Premises, which Landlord, in its sole discretion, deems reasonable and
necessary. As used in 18.3.2.1 above, the "worth at the time of award" is
computed by allowing interest at the rate provided for on Past Due Obligations
as provided in Section 22.14 from the date of default The term "Rent," as used
in this section, shall be deemed to be and to mean the rent to be paid pursuant
to Article 4 and all other monetary sums required to be paid by Tenant pursuant
to the terms of this Lease. Without limiting Landlord's discretion as to
re-letting the Premises, the parties understand and agree that Landlord shall
not be obligated to mitigate rental loss by re-letting the Premises following a
default by Tenant so long as Landlord has other similar vacant space in DDOU or
to a new tenant whose use of the Premises would not be consistent with existing
or desired tenant mix within DDOU, would violate the terms of the Landlord's
Lease, or would place an undue burden on the common areas and facilities within
DDOU. Notwithstanding that Landlord fails to elect to terminate the Lease
initially, Landlord may terminate this Lease at any time during the term of this
Lease by virtue of such previous uncured default by Tenant.
18.3.3 Tenant's lender has previously placed liens upon certain
personal property belonging to the Tenant that will be stored on the Leased
Premises. Tenant's lender has required landlord lien waivers from all landlords
from whom Tenant leases facilities. A copy of this landlord's lien waiver is
attached as Exhibit G. Landlord agrees to execute a landlord's lien waiver in
substantially the same form as that contained on Exhibit G.
LEASE AGREEMENT - 25
18.4 Special Damages. In addition to the damages for breach of this
Lease described in Section 18.3, Tenant agrees that Landlord shall be entitled
to receive from Tenant any and all costs in connection with Tenant's default
hereunder, including without limitation, administrative costs of Landlord
associated with Tenants default, costs of repairing and/or remodeling the
Premises for new tenants and leasing commissions for any leasing agent engaged
to re-let the Premises.
18.5 Late Charges. Tenant hereby acknowledges that late payment by
Tenant to Landlord of Rent and other sums due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which are now
and will be extremely difficult to ascertain other than such charges and late
charges which may be imposed on Landlord by the terms of any mortgage or trust
deed covering the Premises. Accordingly, if any installment of Rent or any other
sums due from Tenant shall not be received by Landlord or Landlord's designee
within ten (10) days after such amount shall be due, Tenant shall pay to
Landlord a late charge equal to ten percent (10%) of the amount(s) past due and
additionally all such installments of Rent or other sums due shall bear interest
at the rate provided for on Past Due Obligations as provided in Section 22.14
from the date the same became due and payable. The parties hereby agree that
such late charge represents a fair and reasonable estimate of the costs Landlord
will incur by reason of late payment by Tenant. Acceptance of such late charge
by Landlord shall in no event constitute a waiver of Tenant's default with
respect to such overdue amount, except to the amounts so paid, nor prevent
Landlord from exercising any of the other rights and remedies granted hereunder.
18.6 Default by Landlord. Landlord shall not be in default unless
Landlord fails to perform obligations required of Landlord within a reasonable
time, but in no event later than thirty (30) days after written notice by Tenant
to Landlord and to the holder of any mortgage or deed of trust covering the
Premises furnished to Tenant in writing, specifying wherein Landlord has failed
to perform such obligations; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for performance,
then Landlord shall not be in default if Landlord commences performance within
such thirty-day period and thereafter diligently prosecutes the same to
completion; provided further, that in the event that Landlord has defaulted in
the payment(s) of a monetary obligation and Tenant has advanced monies to pay
such obligation, Landlord shall pay Tenant interest on such monies advanced at a
rate provided for on Past Due Obligations as provided in Section 22.14 from the
date the money was advanced by Tenant.
18.7 Bankruptcy
18.7.1 Chapter 7. In the event that Tenant shall become a debtor in a
case filed under Chapter 7 of the Bankruptcy Code, and Tenants trustee or Tenant
shall elect to assume this Lease for the purpose of assigning the same or
otherwise, such election and assignment may be made only if the provisions of
Sections 18.7.2,18.7.4 and 18.7.5 are satisfied. If Tenant or Tenants trustee
shall fail to elect to assume this Lease within sixty (60) days after the filing
of such petition or such additional time as provided by the court within such
60-day period, this
LEASE AGREEMENT - 26
Lease shall be deemed to have been rejected. Immediately thereupon Landlord
shall be entitled to possession of the Premises without further obligation to
Tenant or Tenant's trustee and this Lease, upon the election of Landlord, shall
terminate, but Landlord's right to be compensated for damages (including,
without limitation, damages pursuant to this Article 18) in any such proceeding
shall survive whether or not the Lease is terminated.
18.7.2 Chapter 11. In the event that Tenant shall become a debtor in a
case filed under Chapter 11 of the Bankruptcy Code, or in a case filed under
Chapter 7 of this Bankruptcy Code which is converted to Chapter 11, Tenants
trustee or Tenant, as debtor-in-possession, must elect to assume this Lease
within sixty (60) days from the date of the filing of the petition under Chapter
11 or conversion thereto, or Tenant's trustee or the debtor-in-possession shall
be deemed to have rejected the Lease. Immediately thereupon Landlord shall be
entitled to possession of the Premises without further obligation to Tenant or
Tenant's trustee and this Lease, upon the election of Landlord, shall terminate
but Landlord's right to be compensated for damages (including, without
limitation, damages pursuant to this Article 18) in any such proceeding shall
survive whether or not the Lease is terminated.
18.7.2.1 In the event that Tenant, Tenant's trustee or the
debtor-in-possession has failed to perform all of Tenant's obligations under
this Lease within the time periods (excluding grace periods) required for such
performance, no election by Tenant's trustee or the debtor-in-possession to
assume this Lease, whether under Chapter 7 or Chapter 11, shall be permitted or
effective unless each of the following conditions has been satisfied:
18.7.2.2 Tenants trustee or the debtor-in-possession has cured
all defaults under the Lease, or has provided Landlord with Assurance (as
defined below) that it will cure all defaults susceptible of being cured by the
payment of money within ten (10) days from the date of such assumption and that
it will cure all other defaults under this Lease which are susceptible of being
cured by the performance of any act promptly after the date of such assumption.
18.7.2.3 Tenant's trustee or the debtor-in-possession has
compensated, or has provided Landlord with Assurance that within ten (10) days
from the date of such assumption that it will compensate Landlord for any actual
pecuniary loss incurred by Landlord arising from the default of Tenant, Tenants
trustee, or the debtor-in-possession indicated in any statement of actual
pecuniary loss sent by Landlord to Tenant's trustee or the debtor-in-possession.
18.7.2.4 Tenant's trustee or the debtor-in-possession has
provided Landlord with Assurance of the future performance of each of the
obligations under this Lease by Tenant, Tenant's trustee or the
debtor-in-possession, and if Tenant's trustee or the debtor-in-possession has
provided such Assurance, Tenant's trustee or the debtor-in-possession shall also
deposit with Landlord, as security for the timely payment of Rent hereunder, an
amount equal to six (6) monthly installment payments of the Minimum Rent, which
shall be applied to the last installments of Minimum Rent that shall become due
under this Lease, provided all the terms and provisions of this Lease shall have
been complied with. The obligations imposed upon Tenant's
LEASE AGREEMENT - 27
trustee or the debtor-in-possession by this paragraph shall continue with
respect to such parties, Tenant or to any assignee of this Lease during or after
the completion of bankruptcy proceedings.
18.7.2.5 Such assumption will not breach or cause a default
under any provision of any other lease, mortgage, financing arrangement or other
agreement by which Landlord is bound relating to the Premises.
18.7.2.6 For purposes of this Section 18.7, Landlord and Tenant
acknowledge that "Assurance" shall mean no less than: (i) Tenants trustee or the
debtor-in-possession has and will continue to have sufficient unencumbered
assets after the payment of all secured obligations and administrative expenses
to assure Landlord that sufficient funds will be available to fulfill the
obligations of Tenant under this Lease; (ii) there shall have been deposited
with Landlord, or the Bankruptcy Court shall have entered an order segregating
sufficient cash payable to Landlord, and/or Tenants trustee or
debtor-in-possession shall have to Landlord granted a valid and perfected first
lien and security interest and/or mortgage in property of Tenant, Tenants
trustee or the debtor-in-possession, acceptable as to value and kind to
Landlord, sufficient to secure to Landlord the obligations of Tenant; and (iii)
Tenants trustee or the debtor-in-possession has sufficient funds available to
cure the defaults under this Lease, monetary and/or non-monetary, as provided
and within the time periods set forth above.
18.7.3 Subsequent Petitions. In the event that this Lease is assumed in
accordance with Section 18.7.2, and thereafter Tenant is liquidated or files or
has filed against it a subsequent petition under Chapter 7 or Chapter 11 of the
Bankruptcy Code, Landlord may, at its option, terminate this Lease and all
rights of Tenant hereunder, by giving Tenant notice of its election to so
terminate within thirty (30) days after the occurrence of either of such events.
18.7.4 Adequate Assurances. If Tenants trustee or the
debtor-in-possession has assumed the Lease pursuant to the terms and provisions
of Sections 18.7.1, 18,7.2, and 18.7.3 for the purposes of assigning (or elects
thereafter to assign) this Lease, this Lease may be so assigned only if the
proposed assignee has provided adequate assurance of future performance of all
of the terms, covenants and conditions of this Lease to be performed by Tenant.
Landlord shall be entitled to receive all cash proceeds of such assignment. As
used herein, "adequate assurance of future performance" shall mean that all such
requirements as set forth in Section 365 of the Title 11, U.S. Code (as may be
amended) are met, and further mean that no less than each of the following
conditions has been satisfied:
18.7.4.1 The proposed assignee has furnished Landlord with
either (i) a current financial statement audited by a certified public
accountant indicating a net worth and working capital in amounts which Landlord
reasonably determines to be sufficient to assure the future performance by such
assignee of Tenant's obligations under this Lease, or (ii) a guarantee or
guarantees, in form and substance satisfactory to Landlord, from one or more
persons with a net worth which Landlord reasonably determines to be sufficient
to secure the Tenant's obligations hereunder, and information with respect to
the proposed assignee's management ability, expertise and experience in Tenant's
business and Landlord has reasonably determined
LEASE AGREEMENT - 28
that the proposed Assignee has the management expertise and experience to
operate the business conducted on the Premises.
18.7.4.2 Landlord has obtained all consents or waivers from
others required under any lease, mortgage financing arrangements or other
agreement by which Landlord is bound to permit Landlord to consent to such
assignment without violating the terms of any such agreement.
18.7.4.3 The proposed assignment will not release or impair any
guaranty of the obligations of Tenant (including the proposed assignee) under
this Lease.
18.7.5 Use and Occupancy Charges. When, pursuant to the Bankruptcy
Code, Tenant's trustee or the debtor-in-possession shall be obliged to pay
reasonable use and occupancy charges for the use of the Premises, such charges
shall not be less than the Minimum Rent and other charges due hereunder. No
acceptance by Landlord of said use and occupancy charges, or of rent hereunder
shall constitute a waiver of any of the provisions of this Section 18.7 or any
of the Landlord's rights thereunder.
18.7.6 No Transfer Without Consent. Neither the whole nor any portion
of Tenant's interest in this Lease or its estate in the Premises shall pass to
any trustee, receiver, assignee for the benefit of creditors, or any other
person or entity, or otherwise by operation of law under the laws of any state
having jurisdiction of the person or property of Tenant unless the requirement
and conditions of this Section 18.7 are fully met or unless Landlord and the
Government shall have otherwise consented to such transfer in writing. No
acceptance by Landlord of installment payments of Rent or any other payments
from any such trustee, receiver, assignee, person or other entity shall be
deemed to constitute such consent by Landlord nor shall it be deemed a waiver of
Landlord's rights under this Section 18.7 including the right to terminate this
Lease for any transfer of Tenants interest under this Lease without such
consent.
ARTICLE 19 - NOTICES
All notices or demands of any kind required or desired to be given by
or to Landlord, Tenant or Guarantors hereunder shall be in writing and shall be
deemed delivered forty-eight (48) hours after depositing the notice or demand in
the United States mail, certified or registered, postage prepaid, addressed to
the Landlord, Tenant, or the Guarantors respectively at the address set forth in
Article 1.13 of this Lease.
ARTICLE 20 - COMMON AREAS
20.1 Availability. Landlord may make available during the term of
this Lease, on such portion of DDOU as Landlord shall from time to time
designate or relocate such automobile parking and common areas, if any (jointly
referred to as "common areas," as that term is hereinafter defined), as Landlord
may from time to time deem appropriate. If so designated, Tenant shall have the
non-exclusive right during the term of this Lease to use the common areas for
itself, its employees, agents, customers, invitees and licensees.
LEASE AGREEMENT - 29
20.2 Definition. The term "common areas" generally means the portions
of DDOU which have at the time in question been designated and improved for
common use by or for the benefit of more than one tenant of DDOU, including and
if applicable, the land and facilities utilized for or as parking areas and
access and perimeter roads, but excluding any portion of DDOU so included within
the common areas when designated by Landlord for a non-common use.
20.3 Landlord's Management and Control. All common areas, including
those located on the Premises, shall be subject to the exclusive control and
management of Landlord or such other persons or nominees as Landlord may have
delegated or assigned to exercise such management or control, in whole or in
part, in Landlord's place and stead, and Landlord and Landlord's nominees and
assignees shall have the right to establish, modify, amend and enforce
reasonable rules and regulations with respect to the common areas. Tenant agrees
to abide by and conform with such rules and regulations, to cause its employees
and agents so to abide and conform, and to use its best efforts to cause its
customers, invitees and licensees to so abide and conform. It shall be the duty
of the Tenant to keep all of said areas free and clear of any obstructions
created or permitted by Tenant or resulting from Tenants operation and in no
event shall Tenant have the right to sell or solicit in any manner in any of the
common areas.
20.3.1 Landlord shall have the right to close, if necessary, all
or any portion of the common areas to such extent as may, in the opinion of
Landlord's counsel, be legally necessary to prevent a dedication thereof or the
accrual of any rights of any person or of the public therein; to use portions of
the common areas while engaged in making additional improvements or repairs or
alterations to DDOU, and to do and perform such other acts in, to, and with
respect to, the common areas as in the use of good business judgment Landlord
shall determine to be appropriate for DDOU.
20.3.2 Landlord shall have the right to increase or reduce the
common areas, to rearrange the parking spaces and improvements on the common
areas, and to make such changes therein and thereto from time to time which, in
its opinion, are deemed to be desirable and for the best interests of all
persons using said common area, provided, however, access to the Premises are
not materially and adversely affected and the improvements on the specific
parcel on which the Premises are located are not materially changed.
20.3.3 The Landlord shall have the right to establish, and from
time to time change, alter and amend, and to enforce against the Tenant and the
other users of said common areas such reasonable rules and regulations as may be
deemed necessary or advisable for the proper and efficient operation and
maintenance of said common areas. The rules and regulations may include, without
limitation, the hours during which the common areas shall be open for use.
Landlord may, if, in its opinion, the same be advisable, establish a system or
systems of validation or other type operation, including a system of charges
against non-validated parking checks of users, and the Tenant agrees to conform
to and abide by all such rules and regulations in its use and the use of its
customers and patrons with respect to said common areas; provided, however, that
all such rules and regulations and such types of operation or validation of
parking
LEASE AGREEMENT - 30
checks and other matters affecting the customers and patrons of the Tenant shall
apply equally and without discrimination to all persons entitled to the use of
said common areas.
20.3.4 Any reference in this Section 20.3 to Landlord shall be
deemed to include the Government.
20.4 Employee Parking. Tenant shall cause its employees to park in
areas that do not interfere with parking for customers and/or suppliers to other
property owners or tenants in DDOU. Tenant and its employees shall park their
cars only on the Premises, or in those portions of the parking areas, if any,
designated for the purpose by Landlord. If Tenant or its employees fail to park
their cars in designated parking areas, then Landlord may charge Tenant
Twenty-Five Dollars ($25.00) per day for each day or partial day per car parked
in any areas other than those designated, plus any costs involved in towing such
cars away, unless arrangements approved by Landlord have been made to tow such
cars away at the employee's expense.
ARTICLE 21 -SIGNS
21.1 Tenant may provide a suitable exterior signboard, sign or signs
of such size, design and character, and in such location as Landlord shall
approve in writing, such Landlord approval not to be unreasonably withheld.
Tenant hereby expressly covenants and agrees that such signage shall, unless
otherwise expressly permitted in writing by Landlord, also comply with all laws,
rules, regulations and zoning ordinances and requirements. Attached as Exhibit C
are Landlord's standard sign criteria which Tenant shall generally follow as to
sign types, color, materials and type of construction. Tenant agrees to
indemnify and hold Landlord harmless from any liability or damage arising or
resulting from the use of or erection of any such sign(s). In the event of
violation of any ordinance applicable to any signs so erected or constructed,
Tenant agrees to forthwith correct such violation and comply with any such
ordinances.
21.2 If Tenant shall erect, install or maintain any signs, lights, or
other forms of inscription of advertising, display, or illuminating device
outside, in or upon the Premises in violation of this Article, or the standards
set forth on Exhibit C and shall not immediately upon notice from Landlord cause
the same to be removed or discontinued, Landlord, in addition to any other
rights or remedies to which it may be entitled hereunder or as a matter of law
or in equity, may enter upon the Premises, without thereby causing an eviction
of Tenant from said Premises or interference with Tenants right of quiet use and
enjoyment thereof, and cause said sign, lights, or other form of inscription or
advertising or display device to be removed or discontinued, and the costs of
such removal or discontinuance shall be paid by Tenant, as additional Rent, on
the first day of the month following said removal or discontinuance and if not
so paid, such sums shall bear interest at the rate provided for on Past Due
Obligations as provided in section 22.14 from the due date.
ARTICLE 22 - GENERAL
22.1 Exclusives. It is herewith agreed that this Lease contains no
restrictive covenants or exclusives in favor of Tenant.
LEASE AGREEMENT - 31
22.2 Tenant Offset and Estoppel Certificate.
22.2.1 Tenant shall, at any time within ten (10) days after
written notice from Landlord, execute, acknowledge and deliver to Landlord a
statement in writing in the form attached as Exhibit E or such similar or
modified form as Landlord shall reasonably request (i) 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, and (ii) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder, or specifying
such defaults if they are claimed. Any such statement may be conclusively relied
upon by any prospective purchaser, lender or other encumbrancer of the Premises.
Landlord shall, at any time within ten (10) days after written notice from
Tenant, provide a certificate containing such similar information as Tenant may
reasonably request.
22.2.2 Tenant's failure to deliver such statement within such
time shall be conclusive upon Tenant (i) that this Lease is in full force and
effect, without modification except as may be represented by Landlord, (ii) that
there are no uncured defaults in Landlord's performance, and (iii) that not more
than an amount equal to one month's rent has been paid in advance.
22.2.3 If Landlord, after acquiring said property from the
Government, desires to sell, finance, or refinance the Premises, DDOU or any
part thereof, Tenant hereby agrees to deliver to any purchaser or lender
designated by Landlord such financial statements of Tenant as may be reasonably
required by such purchaser or lender. All such financial statements shall be
received by Landlord in confidence and shall be used only for the purpose herein
set forth.
22.3 Transfer of Landlord's Interest. In the event of a sale or
conveyance by Landlord or Landlord's interest in DDOU and/or 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 accruing thereafter on the part of the Landlord, provided that any
funds in the hands of Landlord at the time of transfer in which Tenant has an
interest, shall be delivered to the successor of Landlord. This Lease shall not
be affected by any such sale and Tenant agrees to attorn to the purchaser or
assignee provided all Landlord's obligations hereunder are assumed in writing by
the transferee. Upon the sale of the Premises, Tenant, upon notice of any such
transfer, shall change the name insured under the insurance policies described
in Article 13 to the new Landlord.
22.4 Captions, Attachments: Defined Terms.
22.4.1 The captions of the sections of this Lease are for
convenience only and shall not be deemed to be relevant in resolving any
question of interpretation or construction of any section of this Lease.
LEASE AGREEMENT - 32
22.4.2 Exhibits attached hereto and addenda and schedules are deemed
by attachment and/or reference to constitute part of this Lease and are
incorporated herein as an integral part of this Lease.
22.4.3 The words "Landlord," "Tenant" and "Guarantor," as used herein,
shall include the plural as well as the singular. Words used in neuter gender
include the masculine and the feminine. Words used in the masculine or feminine
gender include the neuter. If there be more than one Landlord, Tenant or
Guarantor, the obligations hereunder imposed upon Landlord, Tenant or Guarantor
shall be joint and several; as to a Tenant or Guarantor which consists of
husband and wife, the obligations shall extend individually to their sole and
separate property as well as community property. The term "Landlord" shall mean
only the owner or owners at the time in question of the fee title or a lessee's
interest in a superior lease of the Premises. The obligations contained in this
Lease to be performed by Landlord shall be binding on Landlord's successors and
assigns only during their respective periods of ownership.
22.5 Entire Agreement. This instrument, along with any exhibits and
attachments hereto, constitutes the entire agreement between Landlord and Tenant
relative to the Premises and there are no oral agreements or representations
between the parties hereto affecting this Lease, and this Lease supersedes and
cancels any and all previous negotiations, arrangements, brochures, agreements
or representations and understandings, if any, between the parties hereto or
displayed by Landlord to Tenant with respect to the subject matter thereof, and
none thereof shall be used to interpret or construe this Lease. There are no
other representations or warranties between the parties or the parties and their
agents or representatives and all reliance with respect to representations is
solely upon the representations and agreements contained in this document. This
agreement and the exhibits and attachments may be altered, amended or revoked
only by an instrument in writing signed by both Landlord and Tenant.
22.6 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 low; and it is the intention of the parties hereto
that if any provision of this Lease is capable of two constructions, one of
which would render the provision void and the other of which would render the
provision valid, then the provision shall have the meaning which renders it
valid.
LEASE AGREEMENT - 33
22.7 Costs of Suit
22.7.1 If Tenant or Landlord shall bring any action for 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
attorneys' fees which shall be deemed to have accrued on the commencement of
such action and shall be paid whether or not such action is prosecuted to
judgment.
22.7.2 Should Landlord, without fault on Landlord's part, be made a
party to any litigation instituted by Tenant or by any third party against
Tenant, or by or against any person holding under or using the Premises, by
license of Tenant, or for the foreclosure of any lien for labor or materials
furnished to or for Tenant or any such other person or otherwise arising out of
or resulting from any act or transaction of Tenant or of any such other person,
Tenant covenants to save and hold Landlord harmless from any judgment rendered
against Landlord or the Premises or any part hereof, and all costs and expenses,
including reasonable attorneys' fees incurred by Landlord in or in connection
with such litigation.
22.8 Times; Joint and Several Liability; Guarantors. Time is of the
essence of this Lease and each and every provision hereof. All the terms,
covenants and conditions contained in this Lease to be performed by either
party, if such party shall consist of more than one person or organization,
shall be deemed to be joint and several, and all rights and remedies of the
parties shall be cumulative and non-exclusive of any other remedy at law or in
equity. Any Guarantors, if any, executing this Lease covenant and agree that
they bind themselves by their signatures hereon as principals with joint and
several liability and not as sureties all as more particularly provided on
Exhibit E.
22.9 Binding Effect: Choice of Law. The parties hereto agree that all the
provisions hereof are to be construed as both covenants and conditions as though
the words importing such covenants and conditions were used in each separate
paragraph hereof. Subject to any provisions hereof restricting assignment or
subletting by Tenant and subject to section 22.3, all of the provisions 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 as an agreement to be performed in
Utah and as an agreement between domiciliaries of said state.
22.10 Waiver. No covenant, term or condition or the breach thereof 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 covenant term or condition shall
not be deemed to be a waiver of any other covenant, term or condition herein.
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 such covenant, term or condition unless otherwise expressly
agreed to by Landlord in writing.
22.11 Surrender of Premises. The voluntary or other surrender of this Lease
by Tenant, or a mutual cancellation thereof, shall not work a merger and shall,
at the option of
LEASE AGREEMENT - 34
Landlord terminate all or any existing subleases or subtenancies, or may, at the
option of Landlord, operate as an assignment to it of any or all such subleases
or subtenancies.
22.12 Holding Over. This Lease shall terminate and shall become null and
void without further notice upon the expiration of the term herein specified,
and any holding over by Tenant after such expiration shall not constitute a
renewal hereof or give Tenant any rights under this Lease. If Tenant shall hold
over for any period after the expiration of said term, Landlord may, at its
option, exercised by written notice to Tenant, treat Tenant as a Tenant from
month to month commencing on the first day following the expiration of this
Lease, subject to the terms and conditions herein contained except that the
Minimum Rent, which shall be payable in advance monthly, shall be one hundred
fifty percent (150%) of the Minimum Rent applicable at the date of expiration.
If Tenant fails to surrender the Leased Premises upon the expiration of this
Lease, Tenant shall indemnify and hold Landlord harmless from all loss or
liability, including without limitation, any claims made by any succeeding
tenant founded on or resulting from such failure to surrender.
22.13 Force Majeure. Any prevention, delay or stoppage due to strikes,
lockouts, labor disputes, acts of God, inability to obtain labor or materials or
reasonable substitutes therefor, governmental restrictions, governmental
regulations, governmental controls, enemy or hostile governmental action, civil
commotion, fire or other casualty, and other causes beyond the reasonable
control of the party obligated to perform, shall excuse the performance by such
party for a period equal to any such prevention, delay or stoppage except the
obligations imposed with regard to Rent and other charges to be paid to Tenant
pursuant to this Lease.
22.14 Interest on Past Due Obligations. Except as otherwise expressly
herein provided, any amounts due to Landlord not paid when due shall bear
interest at the rate which is greater of (a) three (3) points over the prime
rate of interest at First Security Bank, (or such other state or federal
chartered bank doing business in Utah as may be specified in a written notice to
Tenant hereafter) or (b) eighteen percent (18%) an a per annum basis from the
due date; provided, however, that notwithstanding the foregoing, such interest
shall not, in any event, exceed the highest rate permitted by applicable law.
Payment of interest shall not excuse or cure any default by Tenant under this
Lease, except to the extent of amounts paid by Tenant and accepted by Landlord.
22.15 Corporate Authority. If Tenant and/or Guarantor is a corporation,
each individual executing this Lease and/or the guaranty attached as Exhibit E
on behalf of said corporation represents and warrant that he is duly authorized
to execute and deliver this Lease and/or guaranty on behalf of said corporation
in accordance with a duly adopted resolution of the Board of Directors of said
corporation or in accordance with the Bylaws of said corporation, and that this
Lease and/or guaranty is binding upon said corporation in accordance with its
terms.
22.16 Provisions Re: Landlord's Lease. Tenant acknowledges and agrees that
this Lease is subject to the conditions and term of the Department of the Army
Interim Lease Under Base Realignment and Closure between the Secretary of the
Army and Landlord (the "Landlord's Lease") and that, in case of any conflict
between the instruments, the Landlord's Lease will
LEASE AGREEMENT - 35
control. Upon request of the Landlord herein, Tenant will cause the fee owner of
the real property (the "United States") to be designated as an additional
insured under the policies of insurance carded by Tenant pursuant to the
provisions hereof. In each instance wherein Tenant under the provisions of this
lease holds Landlord harmless, or waives claims or rights of subrogation against
Landlord such provisions shall also be deemed applicable to and in favor of the
Government in like manner as applicable to Landlord herein. Tenant agrees not to
knowingly violate, cause to be violated or cause Landlord to be in violation of
Landlord's obligations to the Government and consistent with quiet enjoyment of
the Premises under this lease, should such ground lease be prematurely
terminated Tenant will acknowledge and accept the Government as Landlord under
this Lease. In the event Landlord shall acquire fee title to the real property
upon which the Premises are located, this Lease shall continue in effect as a
sublease and the leasehold estate of Landlord under such ground lease shall not
merge with fee title, but shall continue in effect unless Landlord by recorded
document elects to terminate said ground lease. Should Landlord acquire fee
title to the real property upon which the Premises are located and elect by
instrument recorded to terminate such ground lease, this Lease shall then
continue in full force and effect as a direct Lease (as distinguished from a
sublease) between Landlord and Tenant.
22.17 Warranties of Tenant. Tenant warrants and represents to Landlord, for
the express benefit of Landlord, that (a) Tenant has undertaken, to the extent
it deems necessary for its purposes, an independent evaluation of the risks
inherent in the execution of this Lease and the operation of the Leased Premises
for the use permitted hereby, and that, based upon said independent evaluation,
Tenant has elected to enter into this Lease and accept the Premises.
22.18 Commission Agreements. Each party represents to the other that no
brokers have been involved in this transaction. If any claims for brokerage or
leasing commissions are ever made against Landlord or Tenant in connection with
this transaction, each such claim shall be handled and paid by the parties whose
actions or commitments form the basis of such claim.
ARTICLE 23 - SPECIAL CONDITIONS AND AGREEMENTS
The special conditions and/or agreements, if any, with respect to this
Lease shall be as set forth in the Addendum.
22.18 Commission Agreements. Each party represents to the other that no
brokers have been involved in this transaction. If any claims for brokerage or
leasing commissions are ever made against Landlord or Tenant in connection with
this transaction, each such claim shall be handled and paid by the parties whose
actions or commitments form the basis of such claim.
ARTICLE 23 - SPECIAL CONDITIONS AND AGREEMENTS
The special conditions and/or agreements, if any, with respect to this
Lease shall be set forth in the Addendum.
LEASE AGREEMENT - 36
IN WITNESS WHEREOF, Landlord, Tenant and Guarantors, if any, have executed
this Lease to be effective the date and year first above written.
LANDLORD: OGDEN CITY, a Utah Municipal Corporation,
acting as a Local Redevelopment Authority
By: /s/ Glann J. Mecham
------------------------------
Glenn J. Mecham, Mayor
ATTEST:
/s/ ILLEGIBLE
- ----------------------------
CITY RECORDER
APPROVED AS TO FORM:
/s/ ILLEGIBLE
- ----------------------------
CITY ATTORNEY
ICON Health and Fitness, Incorporated
By: /s/ Fred Beck
---------------------------------------
Fred Beck, Chief Financial Officer
GUARANTORS:
__________________________________________
__________________________________________
STATE OF UTAH )
) SS.
COUNTY OF WEBER )
LEASE AGREEMENT - 37
The foregoing instrument was acknowledged before me this 9th day of July ,
1998, by GLENN J. MECHAM, the Major of Ogden City, a Utah Municipal Corporation.
/s/ DeAnn Wallwork
------------------------------------------
NOTARY PUBLIC
STATE OF UTAH )
------
) SS
COUNTY OF CACHE )
-------
The foregoing instrument was acknowledged before me this 29 day of June,
1998, by Fred Beck, the Chief Financial Officer of the ICON Health and Fitness
Corporation.
/s/ Denise Lott
------------------------------------------
NOTARY PUBLIC
LEASE AGREEMENT - 38
ADDENDUM
Special Provisions Per Article 23
23.1 Environmental Protection.
23.1.1 Incorporation of Environmental Provisions of Landlord's Lease.
Tenant and Landlord each acknowledge and agree to abide by and comply with the
environmental provisions set forth in Sections 26 through 30 of the Landlord's
Lease, as follows:
26. ENVIRONMENTAL PROTECTION
a. The Lessee will use all reasonable means available to
protect the environment and natural resources, and where damage
nonetheless occurs from activities of the Lessee, the Lessee shall be
liable to restore the damaged resources. The Lessee shall not
discharge waste or effluent from the Leased Premises in such a manner
that the discharge will contaminate streams or other bodies of water
or otherwise become a public nuisance.
b. The Lessee shall be responsible for obtaining and paying for
any environmental or other permits required for its operations under
the Lease, independent of any existing permits.
c. The Governments rights under this Lease specifically include
the right for Government officials to inspect, upon reasonable notice,
the Leased Premises for compliance, with environmental, safety, and
occupational health laws and regulations, whether or not the
Government is responsible for enforcing them. Such inspections are
without prejudice to the right of duly constituted enforcement
officials to make such inspections. The Government normally will give
the Lessee twenty-four (24) hours prior notice of its intention to
enter the Leased Premises unless it determines the entry is required
for safety, environmental, operations, or security purposes. The
Lessee shall have no claim on account of any entries against the
United States or any officer, agent, employee, or contractor thereof.
d. The Government acknowledges that DDOU has been identified as
a National Priorities List Site under the Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA) of 1980, as
amended. The Lessee acknowledges that the Government has provided it
with a copy of the DDOU Federal Facility Agreement Under CERCLA
Section 120 (FFA) entered into by the United States Environmental
Protection Agency Region VIII, the Utah Department of Health, and the
Defense Logistics Agency, and effective on November 30, 1989, and will
provide the Lessee with a copy of any amendments thereto. The Lessee
agrees that should any conflict arise between the terms of the FFA, as
it presently exists or may be amended, and the provisions of this
Lease,
LEASE AGREEMENT - 39
the terms of the FFA will take precedence. The Lessee further agrees
that notwithstanding any other provision of the Lease, the Government
assumes no liability to the Lessee should implementation of the FFA
interfere with the Lessee's use of the Leased Premises. The Lessee
shall have no claim on account of any such interference against the
United States or any officer, agent, employee or contractor thereof,
other than for abatement of rent.
e. The Secretary, Defense Logistics Agency, EPA, and UDEQ,
their officers, agents, employees, contractors and subcontractors have
the right, upon reasonable notice to the Lessee, and to parties in
possession, to enter upon the Leased Premises for purposes consistent
with the applicable provisions of the FFA, and for the following
purposes:
(1) to conduct investigations and surveys, including,
where necessary, drilling, soil and water sampling, test pitting, soil
boring tests and other activities related to the DDOU Installation
Restoration Program (IRP), FFA or Interagency Agreement (IAG):
(2) to inspect field activities of the Army and its
employees, agents, contractors and subcontractors in implementing that
DDOU IRP, FFA or IAG;
(3) to conduct any test or survey required by EPA or
UDEQ relating to the implementation of the FFA or environmental
conditions at the Leased Premises, or to verify any data submitted to
the EPA or the UDEQ by the Army relating to such conditions;
(4) to construct, operate, maintain or undertake any
other response or remedial action as required or necessary under the
IRP, FFA, or IAG, including, but not limited to, monitoring wells,
soil removal, pumping wells and treatment facilities; and
(5) to conduct Environmental Compliance Assessment
System Surveys (ECAS).
f. The Lessee shall comply with the provisions of any health or
safety plan in effect under the IRP or the FFA during the course of
the above described response or remedial actions. Any inspection,
survey, investigation, or other response or remedial action will, to
the extent practicable, be coordinated with representatives designated
by the Lessee. The Lessee shall have no claim on account of such
entries against the United States or any officer, agent, employee,
contractor, or subcontractor thereof. In addition, the Lessee shall
comply with all applicable Federal, state and local occupational
safety and health regulations.
LEASE AGREEMENT - 40
g. The Lessee shall strictly comply with the hazardous waste
permit requirements under the Resource Conservation and Recovery Act
(RCRA), or its Utah equivalent and any other applicable laws, rules or
regulations. Except as specifically authorized by the Government in
writing, the Lessee must provide, at its own expense, hazardous waste
management facilities, including storage, treatment or disposal
facilities, complying with all applicable laws and regulations.
Government hazardous waste management facilities will not be available
to the Lessee. Any violation of the requirements of this Condition
shall be deemed a material breach of this Lease.
h. Department of Defense (DOD) Component accumulation points
for hazardous and other wastes will not be used by the Lessee. The
Lessee will not permit its hazardous waste to be commingled with
hazardous waste of the DOD Component.
i. The Lessee shall prepare and maintain a Government-approved
plan for responding to hazardous waste, fuel and other chemical spills
prior to commencement of operations on the Leased Premises. Such plan
shall be independent of DDOU and shall not rely an use of installation
personnel or equipment should the Government provide any personnel or
equipment, whether for initial fire response and/or spill containment,
or otherwise on the request of the Lessee or because the Lessee was
not, in the opinion of the Said Officer, conducting timely cleanup
actions, the Lessee agrees to reimburse the Government for its costs.
The plan may be developed in phases as sublease activities are
identified. Sublessees shall provide to the Lessee a plan to cover
their activities and portion of the Leased Premises prior to
commencement of operations on the subleased portion, which will be
incorporated by the Lessee into the overall plan.
j. The Lessee shall not construct or make or permit its
sublessees or assigns to construct or make any alterations, additions,
or improvements to, or installations upon or otherwise modify or alter
the Leased Premises in anyway which may adversely affect the
environment program, environmental cleanup, human health, the
environment, cultural and historic resources, or endangered or
threatened species without the prior written consent of the
Government. Such consent may include a requirement to provide the
Government with a performance and payment bond satisfactory to it in
all respects and other requirements deemed necessary to protect the
interests of the Government for construction or alterations,
additions, modifications, improvements, or installations in the
proximity of operable units that are part of a National Priorities
List (NPL) site, such consent may include a requirement for written
approval by the Secretary's Remedial Project Manager. Except as such
written approval shall expressly provide otherwise, all such approved
alterations, additions, modifications, improvements, and installations
shall become Government property when annexed to the Leased Premises.
LEASE AGREEMENT - 41
k. The Lessee shall not conduct or permit its sublessees to
conduct any subsurface excavation, digging, drilling, or other
disturbance of the surface without the prior written approval of the
Government.
l. The Lessee shall not use the Leased Premises for the storage
or disposal of non-Department of Defense owned hazardous or toxic
materials, as defined in 10 U.S.C. (S) 2692, unless authorized under
10 U.S.C. (S) 2692 and approved by the Government.
m. Access to the polychlorinated Biphenyls (PCB) vaults and
transformers are restricted except to authorized and qualified utility
purveyors.
n. The Government may impose any additional environmental
protection conditions and restrictions during the term of this Lease
that it deems necessary by providing written notice of such
restrictions to the Lessee.
27. HAZARDOUS SUBSTANCES NOTICE
To the extent such information is available on the basis of a
complete search of Army files, notice regarding hazardous substances
stored for one year or more, known to have been released, or disposed
of on the Leased Premises is provided in Exhibit G, attached hereto.
The Lessee should consult the Condition Survey and the EBB for more
detailed information.
28. LEAD-BASED PAINT WARNING
a. The Leased Premises do not contain residential dwellings and
are not being leased for residential purposes. The Lessee is notified
that the Leased Premises contains buildings built prior to 1978 that
contain lead-based paint. Such property may present exposure to lead
from lead-based paint that may place young children at risk of
developing lead poisoning. Lead poisoning in young children may
produce permanent neurological damage, including learning
disabilities, reduced intelligence quotient, behavioral problems and
impair memory. A risk assessment is recommended prior to execution of
this Lease.
b. Available information concerning known lead-based paint
and/or lead-based paint hazards, the location of lead-based paint
and/or lead-based paint hazards, and the condition of painted surfaces
is contained in the EBS, which has been provided to the Lessee.
Additionally, the Lessee has been provided with a copy of the
federally-approved pamphlet on lead poisoning prevention. The Lessee
hereby acknowledges receipt of all the information described in this
subparagraph.
LEASE AGREEMENT - 42
c. The Lessee acknowledges that it has been provided an
opportunity to conduct a risk assessment or inspection for the
presence of lead-based paint and/or lead-based paint hazards prior to
execution of this Lease.
d. The Lessee shall not permit use of any buildings or
structures on the Leased Premises for residential habitation without
first obtaining the written consent of the Army. As a condition of its
consent, the Army may require the Lessee to (i) inspect for the
presence of lead-based paint and/or lead-based paint hazards; (ii)
abate and eliminate lead-based paint hazards by treating any defective
lead-based paint surface in accordance with all applicable laws and
regulations; and (iii) comply with the notice and disclosure
requirements under applicable Federal and state law. The Lessee agrees
to be responsible for any future remediation of lead-based paint found
to be necessary on the Leased Premises.
29. ASBESTOS
a. The Lessee is hereby informed and does acknowledge that
friable and non-friable asbestos or asbestos-containing materials
(ACM) has been found on the Leased Premises, as described in the Final
Environmental Baseline Survey and CERFA Letter Report. The ACM on the
Leased Premises does not currently pose a threat to human health or
the environment. All friable asbestos that posed a risk to human
health has either been removed or encapsulated.
b. Unprotected or unregulated exposures to asbestos have been
associated with asbestos-related diseases. Both the Occupational
Safety and Health Administration (OSHA) and the Environmental
Protection Agency (EPA) regulate asbestos because of the potential
hazards associated with exposure to airborne asbestos fibers. Both
OSHA and EPA have determined that such exposure increases the risk of
asbestos -related diseases, which include certain cancers and which
can result in disability or death.
c. The Lessee acknowledges that it has inspected the Leased
Premises as to its asbestos content and condition and any hazardous or
environmental conditions relating thereto, as part of the Condition
Survey, described in the Condition on CONDITION OF THE PREMISES. The
Lessee shall be deemed to have relied solely on its own judgment in
assessing the overall condition of all or any portion of the property,
including, without limitation, any asbestos hazards or concerns.
d. As stated in the Condition on CONDITION OF THE LEASED
PREMISES, and specifically with regard to ACM, no warranties, either
express or implied, are given with regard to the condition of the
property, including, without limitation, whether the Leased Premises
does or does not contain asbestos or is or is not safe for a
particular purpose. The failure of the Lessee to Inspect, or to be
fully informed as to the condition of all or any portion of the
property
LEASE AGREEMENT - 43
offered, will not constitute grounds for any claim or demand against
the United States.
e. In addition to the general indemnity contained in the
Condition on HOLD HARMLESS AND INDEMNITY, with regard specifically to
ACM, the United States assumes no responsibility for remediation of
asbestos and no liability for damages for personal injury, illness,
disability, or death to the Lessee's successors, assigns, employees,
invitees, or any other person subject to Lessee's control or direction
or to any other person, including members of the general public,
arising from or incident the purchase, transportation, removal,
handling, use, disposition, or other activity causing or leading to
contact of any kind whatsoever with asbestos on the Leased Premises,
whether the Lessee has properly warned or failed to properly warn the
individual(s) injured.
f. The Lessee further agrees that in its use and occupancy of
the Leased Premises it will comply with all federal, state, and local
laws relating to asbestos. The Lessee agrees to be responsible for any
future remediation of asbestos found to be necessary on the Leased
Premises.
30. OTHER ENVIRONMENTAL RESTRICTIONS
a. The Lessee must obtain approval in writing from the DDOU
pest management coordinator or Said Officer before any pesticides or
herbicides are applied to the Leased Premises. Only U.S. Environmental
Protection Agency approval pesticides or herbicides will be
authorized, and application must be in accordance with the
manufacturer's instructions. Empty containers or unused pesticides or
herbicides must be disposed of off the installation in accordance with
EPA disposal standards.
b. The Lessee and/or authorized sublessees shall not use the
facilities for residential uses and/or non-residential uses commonly
used by children under seven years of age.
23.1.2 Landlord's Representation. Landlord, to the best of
Landlord's knowledge, and other than as disclosed to Tenant in the form of the
Condition Survey prepared by the Government, which Condition Survey the Tenant
acknowledges receiving, represents that no toxic or hazardous substances as
defined by any applicable federal or state law has been discharged, stored,
disposed of or allowed to escape on the Premises, that no underground storage
tanks are located on or in the Premises, or were located on the Premises and
subsequently removed or filled and that the Premises are in compliance with all
applicable federal, state and local statutes, laws and regulations regarding
toxic or hazardous substances.
LEASE AGREEMENT - 44
23.2 Lease-Offsets.
23.2.1 During the first term of the Lease, the actual cost of work
done by Tenant that is determined by the Landlord to be necessary to establish
Tenant's business on the Leased Premises may be allowed as an offset to rent,
subject to the approval of the Landlord and the Government.
23.2.2 In order to receive such rental offset, Tenant shall submit to
Landlord a request for lease offset, including a complete description of work to
be accomplished, design drawings if construction is involved, a detailed cost
estimate of the work to be completed or the actual cost if already completed,
and any other data as may be requested by the Landlord or the Government, acting
through the District Engineer. In no event shall an offset be approved which
does not qualify under Landlord's lease for use of rental payments.
23.2.3 An approved offset shall be prorated in equal monthly
installments over the remainder of the first term. If the actual cost for the
work is less than the approved estimates, adjustment will be made to the
prorated amount. If approval is based on estimated costs, the actual amount of
the offset shall not exceed the estimated cost without prior approval of the
Landlord and the Government.
23.2.4 Within thirty (30) days after completion of any work approved
for rental offset, Tenant shall provide Landlord with substantiation of the
actual costs incurred in completing the work. Any approved offset may be
terminated by Landlord for failure to provide such substantiation or for failure
to complete such improvements within the time frames as indicated in Exhibit B.
23.3 Right of First Refusal. The Landlord is not the present owner and has
applied to acquire the property from the United States through an economic
development conveyance. If Landlord gains fee title, Landlord covenants and
agrees that in the event Landlord shall at any time during the term of the
Lease, as the same is extended from time to time, and so long as Tenant is not
in default of this Lease, intend to or desire to sell Landlord's leasehold
estate in the Premises, or if Landlord shall receive a bona fide offer to
purchase the Premises, then Landlord shall first notify Tenant of its desire and
intent to sell or of the receipt of notice from Landlord, to elect to purchase
the estate in the Premises and all of Landlord's fight, title and interest
therein for such price and upon such stated terms and conditions. Tenant's right
of first refusal as herein contained shall remain in force and be binding upon
any subsequent owner or owners of the demised Premises to the same extent as if
said subsequent owner or owners were the Tenant named herein. Notwithstanding
the foregoing, Tenant's right of first refusal shall not apply to any sale of
the Premises as part of the sale of some or all of the entire DDOU, even though
such sale includes the Premises, and it shall only apply to a sale solely of
Landlord's interest in the demised Premises. In the event that Landlord shall
provide notice to Tenant of its desire and intent to sell and/or of the receipt
of an offer which it is willing to accept and if Tenant shall decline such
offer, then this right of first refusal shall be extinguished and shall be of no
further force or effect. This Right of First Refusal does not obligate the
Government.
LEASE AGREEMENT - 45
23.4 Lease Renewal. Notwithstanding the provisions of 3.3, the right of
extension for the second term may be exercised by Tenant giving written notice
to Landlord to extend such term at least thirty (30) days prior to the August
27, 1998, termination date.
23.5 Termination Provision. The Tenant shall have the right to
terminate this Lease upon providing to Landlord a written notice of termination
sixty (60) days in advance.
23.6 Miscellaneous Clarifications.
23.6.1 Where the term "Building" is used in this Lease, it shall
refer to the warehouse building located on the Premises.
23.6.2 It is understood that Tenant may operate its business on a
24 hours per day, 7 days a week basis.
23.6.3 Notwithstanding anything herein to the contrary, Lessee
agrees to be responsible for any future remediation required as a result of
Lessee's bringing hazardous materials onto the Premises, or as a result of any
Lessee-initiated disturbance of previously encapsulated or protected hazardous
materials on the Premises. Lessee shall not be responsible for future
remediation of hazardous materials that existed on the Premises prior to
Lessee's possession thereof.
LEASE AGREEMENT - 46
EXHIBIT A
DDOU LEASE AGREEMENT
DESCRIPTION OF LEASED PREMISES
1. Building 365 (16-A) and all property associated with it (see attached map).
238 South Clark Ave.
Ogden, UT 84407
together with the yard areas between the Building and the adjacent streets,
including all sidewalks, landscaped areas, open space areas and designated
parking lots to be used by Tenant
LEASE AGREEMENT - 47
[GRAPHIC OMITTED]
LEASE AGREEMENT - 48
EXHIBIT B
DDOU LEASE AGREEMENT
CONSTRUCTION PROVISIONS
1. Improvements.
1.1 Construction and Construction Costs. Tenant covenants and agrees
to construct (with a contractor accepted by Landlord in writing, which
acceptance shall not be unreasonably withheld) and in a good and workmanlike
manner, certain agreed upon improvements to the Building on the Premises
according to the Plans and Specifications referred to subsequently herein (which
certain agreed improvements to be constructed on and to become a part of the
Premises shall be referred to herein as the "Improvements"). Tenant's
construction activities will not interfere unreasonably with the use of DDOU by
other tenants, employees, customers or invitees thereof or with other
construction activities with DDOU. The staging area for Tenants construction
shall be only on the Premises unless Landlord shall designate in writing other
areas as additional staging areas. Personnel working on the construction of any
improvements on the Premises shall park only on the Premises or in those
locations designated by Landlord when a particular phase of construction makes
padding on the Premises impractical or dangerous.
The cost of the Improvements, which shall be paid by Tenant, shall
include all costs and expenses associated with the construction of the
Improvements within the Premises including, without limitation, materials, labor
and other hard construction costs, site preparation, pad compaction, utility
charges, meter fees, connection fees, fire service fees, building permit fees,
all other fees, permits, licenses and approvals associated with the construction
within the Premises, architectural and engineering fees, power from transformer
to Building, professional fees, and all other costs and expenses incurred by
Tenant in connection with the construction within the Premises.
Tenant accepts the Premises "as is" based on its own inspections.
2. Construction Timetable/Procedures.
2.1 Plans and Specifications. Tenant shall provide to Landlord, for
Landlord's approval, a complete set of plans and specifications for the
Improvements to be constructed within the Premises by Tenant, including site and
landscape plans and building elevations. The plans and specifications shall be
consistent with the schematic site plans and architectural elevations of
Tenant's building as submitted to the appropriate approval authorities for
required consents and permits ("Approvals"). Government approval of construction
is required by Landlord's Lease. Landlord shall approve or request modifications
to the Plans and Specifications within ten (10) days of receipt of approval from
the Government's District Engineer of same. If Landlord is requesting
modification, such notice shall include a detailed explanation of the requested
reasonable changes. After all of the plans and specifications are approved, such
final plans and specifications (the "Plans and Specifications") shall be
incorporated by reference as a part of this Lease without attachment. The
approved Plans and
LEASE AGREEMENT - 49
Specifications shall be initiated by both Landlord and Tenant. The Plans and
Specifications shall not be modified, by change order or otherwise, without
Landlord's written consent. Construction of the Improvements by Tenant or
Tenant's contractor shall start within sixty (60) days after Landlord approves
Tenant's Plans and Specifications.
2.2 Government Approvals. Tenant shall obtain all necessary
governmental approvals, including building permits, for the construction of the
improvements. Landlord shall have the right to review and approve all such
governmental approvals. Tenant shall pay all permits and approval fees
associated with the Building.
LEASE AGREEMENT - 50
EXHIBIT C
DDOU LEASE AGREEMENT
GENERAL SIGN STANDARDS
These criteria have been established for the mutual benefit of all tenants.
Conformance will be strictly enforced and any installed nonconforming or
unapproved signs must be removed or brought into conformance at the expense of
Tenant. This criteria may be modified only with Landlord's written approval in
Landlord's sole discretion. Pursuant to the Landlord's Lease Tenant shall not
construct or place any structure, improvement or advertising sign on the
Premises without prior written approval of the District Engineer.
A. GENERAL REQUIREMENTS:
1. Tenant shall submit or cause to be submitted to the Landlord for
approval before fabrication at least three copies (at least one to contain color
copy) of detailed drawings indicating the location on the Tenants space and the
layout design and color of the proposed signs, including all lettering and/or
graphics.
2. All permits for Tenants signs and their installation shall be obtained
by the Tenant or the Tenants' representative and shall conform to all local
building and electrical codes.
3. All signs shall be constructed and installed at Tenant's expense.
4. No billboards or outdoor advertising is permitted.
B. LOCATION OF SIGNS:
Only one exterior sign per Tenant space shall be permitted, unless
otherwise approved with the prior written consent of Landlord. Such sign shall
1. Be place only on or along one facade of the main building on the
Premises;
2. Be parallel to the applicable building facade; and
3. Be in such location only as Landlord shall approve in writing at its
sole discretion.
C. DESIGN REQUIREMENTS:
The design of all signs, including style, placement and height of
letterings, size, color, and materials, method and amount of illumination shall
be subject to the approval of Landlord. General design guidelines are as follows
(and may be supplemented in the future by further guidelines):
1. Signs should be either free-standing or wall-mounted. All free-standing
signs should be monument style with concealed support (no poles), and should
have associated
LEASE AGREEMENT - 51
landscaping. All-mounted and free-standing identification signs should be an
extension of the architectural style of buildings.
2. Wall-mounted signs should extend no more than 16' beyond the face of the
building or above the parapet or eaves of the buildings.
3. Total size of the sign used for business identification shall be limited
to 25 square feet or one square foot for each lineal foot of the street frontage
of the building, whichever is larger. A company logo (not to exceed 16 square
feet in area) may be allowed in addition to the business identification signage.
4. The amount of sign-face covered with letters should not exceed 30%.
5. If illumination is provided, it should be constant rather than animated
or flashing.
6. No exposed lamps, tubing, animated, flashing, audible signs, exposed
raceways, crossovers, conduit or brackets will be permitted. All cabinets,
conductor, transformers and other equipment shall be concealed.
D. CONSTRUCTION REQUIREMENTS:
1. Exterior facade signs, bolts, fastenings, and clips shall be enameled
iron with enamel finish, stainless steel, aluminum, brass or bronze or other
rust-free metal. No black iron materials of any type will be permitted.
2. Exterior facade signs, which are exposed to the weather, shall be spaced
off the wall a minimum of one-quarter inch (1/4") to permit proper dirt and
water drainage away from the building unless otherwise directed by Landlord.
3. Location of all openings for conduit in sign panels on building walls
shall be indicated by the sign contractor on drawings submitted to Landlord. All
penetrations of the building structure required for sign installation shall be
neatly sealed in a watertight conditions. No labels will be permitted on the
exposed surface of signs except those required by local ordinance which shall be
applied in an inconspicuous location.
LEASE AGREEMENT - 52
EXHIBIT D
DDOU LEASE AGREEMENT
ESTOPPEL CERTIFICATES
TENANT OFFSET AND ESTOPPEL CERTIFICATE
TO: __________________
__________________
__________________
RE: Lease dated _________ 199_, by and between Ogden City, a Utah Municipal
Corporation, acting as a Local Redevelopment Authority, as Landlord and
___________, as Tenant, on Premises located in the Defense Distribution
Depot, Ogden, Utah.
Gentlemen:
The undersigned tenant (the `Tenant") and landlord (the "Landlord") certify
and represent unto the addressee hereof (hereinafter referred to as the
"Purchaser" or "Lender"), its attorneys and representatives, with respect to the
above-described lease, a true and correct copy of which is attached as Exhibit A
hereto, (the "Lease") as follows:
1. All space covered by the Lease has been furnished to the satisfaction of
Tenant, all conditions required under the Lease have been met, and there is no
default by Landlord or Tenant and Tenant has accepted and taken possession of
the premises covered by the Lease.
2. The Lease is for a total term of ___________ (_) years, __________(_)
months commencing , 199_, has not been modified, altered or amended on any
respect and contains the entire agreement between Landlord and Tenant except as
follows:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(list amendments and modifications other than those, if any, attached to and
forming a part of the attached Lease as well as any verbal agreements; or write
"None").
3. As of the date hereof, the Minimum Rent under the Lease is $ ________
monthly.
4. No rent has been paid by Tenant in advance under the Lease except for $
__________, which amount represents rent for the period beginning __________,
19_ and ending ____________, 19 and Tenant has no charge or claim of offset
under said Lease or otherwise, against rents or other amounts due or to become
due thereunder. No "discounts", "free rent" or "discounted rent" have been
agreed to or are in effect except for
LEASE AGREEMENT - 53
5. A Security Deposit of $____________ has been made and is currently
being held by Landlord.
6. Tenant has no claim against Landlord for any deposit or prepaid rent
except as provided in Paragraphs 4 and 5 above.
7. The Landlord has satisfied all commitments, arrangements or
understandings made to induce Tenant to enter into the Lease, and Landlord is
not in any respect in default in the performance of the terms and provisions of
the Lease, nor is there now any fact or condition which, with notice or lapse of
time or both, would become such a default.
8. Tenant is not in any respect in default under the terms and provisions
of the Lease (nor is there now any fact or condition which, with notice or lapse
of time or both, would become such a default) and has not assigned, transferred
or hypothecated its interest under the Lease, except as follows:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
9. Except as expressly provided in the Lease or in any amendment or
supplement to the Lease, Tenant:
(i) does not have any right to renew or extend the term of the Lease,
(ii) does not have any option or preferential right to purchase all or
any part of the Premises or all or any part of the building or premises of which
the Premises are a part, and
(iii) does not have any right, title, or interest with respect to the
Premises other than as Tenant under the Lease.
There are no understandings, contracts, agreements, subleases, assignments, or
commitments of any kind whatsoever with respect to the Lease of the Premises
covered thereby except as expressly provided in the Lease or in any amendment of
supplement to the Lease set forth in Paragraph 2 above, copies of which are
attached hereto.
10. The Lease is in full force and effect and Tenant has no defenses,
setoffs, or counterclaims against Landlord arising out of the Lease or in any
way relating thereto or arising out of any other transaction between Tenant and
Landlord.
11. The Tenant has not received any notice, directly or indirectly, of a
prior assignment hypothecation or pledge by Landlord of the rents or the Lease
to a person or entity.
12. The current address to which all notices to Tenant as required under
the Lease should be sent is:
LEASE AGREEMENT - 54
13. Addressee's rights hereunder shall inure to its successors and assigns.
14. Tenant acknowledges that Addressee is acquiring ownership of the
Premises. Tenant agrees that upon Addressee acquiring ownership, Tenant will
attorn and does attorn and agrees to recognize and does recognize Addressee as
Landlord on the condition that Addressee agrees to recognize the Lease referred
to in this document as long as Tenant is not in default thereunder, provided,
however, that Addressee shall have no liability or responsibility under or
pursuant to the terms of the Lease for any cause of action or matter not
disclosed herein or that accrues after Addressee ceases to own a fee interest in
the property covered by the Lease.
15. The Tenant agrees to execute reasonable modifications to the Lease and
such documents as Addressee may request for the purpose of subordinating the
Lease to any mortgage or deed of trust to be placed upon the property by
Addressee from time to time and any estoppel certificates requested by Addressee
from time to time in connection with the sale or encumbrance of the Premises.
16. Tenant makes this certificate with the understanding that the Addressee
is contemplating acquiring the Premises, and that if Addressee acquires the
Premises, it will do so in material reliance on this certificate and Tenant
agrees that the certifications and representations made herein shall survive
such acquisition.
Executed on the ________ day of ____________________, 199_.
TENANT: LANDLORD:
________________________________ OGDEN CITY, a Utah Municipal Corporation,
acting as a Local Redevelopment Authority
By:_____________________________ By:______________________________
Its:____________________________ Its:_____________________________
LEASE AGREEMENT - 55
EXHIBIT E
DDOU LEASE AGREEMENT
GUARANTOR'S OBLIGATIONS
LEASE AGREEMENT - 56
GUARANTY
To induce Ogden City, a Utah Municipal Corporation, acting as a Local
Redevelopment Authority, to enter into that certain Lease Agreement dated the _
day of ________, 1998 by and between Ogden City, as Landlord, and ___________ as
Tenant (the "Lease"), ____________ (whether individually or collectively
"Guarantor") agrees with Landlord as follows:
1 . Guaranty of Payment. The Guarantor hereby absolutely and
unconditionally guarantees to Landlord the due and punctual payment of all rent
and all other sums when and as the same shall become due and payable under the
Lease. This guaranty is an absolute, unconditional, continuing guaranty of
payment and not of collectibility, and is in no way conditioned or contingent
upon any matter or occurrence whatsoever, including any attempt to collect the
obligations from Tenant, from any other person, firm or corporation obligated
with respect thereto, or of any other guarantor thereof. If Tenant fails to pay
punctually any rent or other sum due under the Lease when and as the same
becomes due and payable, the Guarantor shall, upon notice of such failure,
immediately pay the same to Landlord.
2. Guaranty of Performance. The Guarantor hereby absolutely and
unconditionally guarantees to Landlord that Tenant will duly and punctually
perform and comply with all terms or obligations to be performed or complied
with by Tenant under the Lease and any other agreements entered into subsequent
thereto relating to Tenant's obligations under the Lease. If Tenant fails to
perform or comply with any such term or obligation, the Guarantor shall, upon
notes of such failure, forthwith perform or comply with such term or obligation
or cause the same forthwith to be performed or complied with.
3. Costs and Expenses. The Guarantor shall pay all costs and expenses
incurred by or on behalf of Landlord (including without limitation attorneys'
fees and expenses) in enforcing either the obligations of the Guarantor under
this agreement or the obligations of Tenant with respect to the Lease.
4. Subsequent Occurrences. The obligation of the Guarantor under this
agreement shall remain in full force and effect without regard to and shall not
be affected or impaired in any respect by any amendment, modification, or
termination of the Lease; any exercise, nonexercise, waiver, release or
cancellation by Landlord of any right, remedy, power or privilege under or
related to the Lease; any consent, extension, indulgence or other action,
inaction or omission under or related to the Lease; any insolvency, bankruptcy,
liquidation, reorganization, arrangement dissolution or other proceeding
involving or affecting Tenant or any other Guarantor, any consent to assignment
or subletting of the Tenant's interest under the Lease; or any other cause or
circumstance whatsoever which would or might in any manner or to any extent vary
the risk of the Guarantor or which would or might otherwise operate as a
discharge of the Guarantor as a matter of law, whether or not the Guarantor has
notice or knowledge of any of the foregoing.
5. Waive. The Guarantor unconditionally waives; (a) notice of any of
the matters referred to in paragraph 4 hereof, (b) all notices that may be
required by statute, rule or law, or
LEASE AGREEMENT - 57
otherwise to preserve any rights of Landlord against Tenant, the Guarantor or
any other party obligated in connection with the Lease, including without
limitation presentment to, demand of payment from, and protest to, Tenant the
Guarantor or any such other party; (c) any right to the enforcement, assertion,
exercise or nonexercise by Tenant of any right, power or remedy conferred in the
Lease or any other instrument whatsoever, (d) any right of subrogation by virtue
of payment made hereunder, and (e) notice of acceptance of this guaranty.
6. Miscellaneous. This writing is intended by Guarantor and Landlord as
the final expression of their agreement of guaranty and is intended as a
complete and exclusive statement of the terms of their agreement. Neither this
agreement nor any term hereof may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought. This
agreement is delivered in the State of Utah and shall be governed by and
construed with the laws of the State of Utah. The Guarantor hereby consents to
the jurisdiction of Utah courts over all matters relating to this agreement. The
obligations and liabilities of the Guarantor hereunder shall be joint and
several.
DATED this _ day of ____________________, 1998.
GUARANTOR:
STATE OF UTAH )
)
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this ____ day of
______________ , 1998 by ______________.
(Name)
_______________________________
NOTARY PUBLIC
LEASE AGREEMENT - 58
EXHIBIT F
BASIC RULES AND REGULATIONS
At all times during the lease term, Tenant will comply with the
following rules and regulations at its sole cost and expense:
1. Tenant will maintain the Premises in clean, neat sanitary and
orderly condition.
2. Tenant will comply with all of the rules and regulations of the
American Insurance Association, the state Insurance Bureau and any similar
bodies. Tenant will not commit any action or permit any condition to be
continued on the Premises which might increase the existing rate of any
insurance policy held by Landlord. Tenant will not do or keep anything that will
cause cancellation of (or be prohibited by) Landlord's insurance policies.
3. Tenant will refrain from burning waste materials of any kind or
otherwise creating noxious odors. All odor and moisture producing areas must be
adequately exhausted, so that odors and moisture do not travel beyond the
Premises. Exhaust and make-up air systems will be subject to Landlord's
inspection. Tenant will be responsible for the utilities and other costs of all
exhaust air and special cooling and heating systems (such as refrigeration,
walk-in coolers, make-up air and other equipment serving Tenants special needs).
4. Tenant will maintain adequately-sized grease interceptors on sinks,
dishwashers, drains or plumbing units as required by applicable building codes.
Tenant will be responsible for disposing of all waste products and other matter
so as to avoid any clogging or interference with DDOU utility systems.
5. Tenant will store all trash and garbage within the Premises in
containers acceptable to Landlord so located as not to be visible to customers
and business Invitees in the Building and to avoid any health or fire hazard,
and arrange for their prompt and regular removal during hours to be specified by
Landlord.
6. Tenant will refrain from doing anything on or about the Premises
that will cause an overload. If Landlord believes there is an overload, Landlord
may select a qualified electrician whose opinion will control regarding any
overload of electrical circuits or a qualified engineer or architect whose
opinion will control regarding floor overloads or other stresses. Tenant will
promptly comply with any actions recommended by the electrician, engineer or
architect.
7. Tenant shall not place any sign, awning, canopy, marquee,
advertising matter, decoration, lettering or other thing of any kind on any
window or exterior door or wall, without the prior written consent of Landlord
and the District Engineer.
8. Tenant shall have the right, at its expense, to maintain advertising
matter appropriate to the conduct of Tenant's business within the boundaries of
the Premises subject to
LEASE AGREEMENT - 59
the approval of the District Engineer. However, Tenant shall immediately remove
any sign, advertisement, decoration, lettering or notice placed on or viewed
within the Premises which Landlord deems objectionable or offensive, and if
Tenant fails or refuses to do so, Landlord will enter the Premises and remove
the same at Tenant's expense. In this connection, Tenant acknowledges that the
premises is a part of DDOU and maintenance of uniformity, propriety and the
aesthetic values are essential to the successful operation of both Landlord's
and Tenant's businesses.
9. Tenant shall not use any advertising or promotional medium which
can be heard or experienced outside the Premises, including (without limitation)
flashing lights, loud speakers, phonographs, radios and/or televisions. No
leaflets, handbills or other advertising material will be placed on cars in the
parking area or distributed outside the Premises.
10. Without the written consent of Landlord, Tenant shall not permit
any sale by auction to be conducted on or about the Premises, whether voluntary,
involuntary or pursuant to any assignment for the benefit of creditors, or
pursuant to any bankruptcy or other insolvency proceeding. No fire, bankruptcy,
lost lease and/or going-out-of-business sale shall be conducted.
11. Any Building employee to whom premises is entrusted by or on behalf
of Tenant shall be deemed to be acting as Tenant's agent. Landlord shall not be
liable for any damage to any property entrusted by employees of the Building,
for the loss or damage to any premises of Tenant by theft or otherwise.
12. Tenant will refrain from keeping, displaying, advertising or
selling any merchandise outside the boundaries of the Premises, or on any
portion of any sidewalks, walkways or other portion of the Building and adjacent
premises, except as specifically approved in writing by Landlord.
LEASE AGREEMENT - 60
EXHIBIT "G"
LANDLORD'S WAIVER
NAME OF OWNER OF REAL PROPERTY: Ogden City, a Utah Municipal
("Landlord") Corporation, acting as a Local
Redevelopment Authority
ADDRESS OF REAL PROPERTY: Defense Distribution Depot
Building #365 (16-A)
Ogden, Utah
(the "Premises")
This Landlord's Waiver is made as of the date on the signature page
hereof. Landlord is the owner of the Premises and has entered into that certain
Lease, dated January 1, 1998 by and between Landlord and ICON HEALTH & FITNESS,
INC., a Delaware corporation as Tenant (together with its successors and
assigns, whether by operation of law or otherwise the "Company") (the "Lease"),
under which the Company has acquired a leasehold interest in all or a portion of
the Premises.
General Electrical Capital Corporation, individually and as agent
("Agent") for other lenders ("Lenders"), has entered into certain financing
transactions with the Company. Pursuant to that certain Security Agreement
entered into in connection therewith (as amended or modified, the "Security
Agreement") by and among the Company, Guarantors, and Agent, on behalf of itself
and Lenders, the Company has granted to Agent, for the benefit of itself and
Lenders, a security interest in the personal property of the Company, consisting
of, all accounts, chattel paper, contracts, deposit accounts, documents, general
intangibles, instruments, inventory, equipment, machinery, other personal
property of any kind, money, cash or cash equivalent and proceeds and products,
which are now or in the future may become located at the Premises (the
"Collateral").
As an inducement for Agent and Lenders to enter into such financing
transactions, in consideration of the Company's entering into its leases,
agreements and arrangements with Landlord and for other good and valuable
consideration, the receipt and sufficiency of which Landlord hereby
acknowledges, Landlord hereby agrees as follows:
1. The Lease is valid and is in full force and effect and has not
been assigned, modified, supplemented or amended in any way.
2. To the best of Landlord's knowledge, neither Landlord nor the
Company is in default under the terms of the Lease and the Lease expires on
December 31, 1998.
3. The Collateral may be stored, placed, kept, utilized and/or
installed at the Premises and shall not be deemed a fixture or part of the real
estate but shall at all times be
considered personal property, whether or not any of the Collateral becomes so
related to the real estate that an interest therein arises under real estate
law.
4. Until such time as all of the obligations of the Company to Agent
and Lenders are indefeasibly paid in full, Landlord disclaims any interest in
the Collateral, confirms that it has no lien or security interest therein, and
agrees not to levy upon any of the Collateral or to assert any claim against the
Collateral for any reason.
5. Agent, on behalf of itself and Lenders, shall have access to and may
enter upon the Premises at any time from time to time to inspect, liquidate or
remove the Collateral. Neither Agent nor Lenders shall be liable for any
diminution in value of the Premises caused by the absence of the Collateral
actually removed or by any necessity of replacing the Collateral.
6. Landlord agrees to provide Agent with written notice of any
termination of the Lease. Landlord will permit Agent to remain on the Premises
for a period of up to sixty (60) days following receipt by Agent of written
notice from Landlord that Landlord has terminated the Lease, subject, however,
to the payment to Landlord by Agent, on behalf of itself and Lenders, of the
rent and other monetary amounts due under the Lease for the actual period of
occupancy by Agent, prorated on a per diem basis determined on a thirty (30) day
month. Agent's right to occupy the Premises under the preceding sentence shall
be extended for any time period Agent is prohibited from selling the Collateral
due to the imposition of the automatic stay by the filing of bankruptcy
proceedings by or against the Company, so long as Agent remits to Landlord the
rents and other monetary amounts due under the Lease for such additional period
of time as provided in the previous sentence (without giving effect to any rent
acceleration clause, if any, contained in the Lease). Notwithstanding any of the
provisions of this Landlord's Waiver, neither Agent nor any Lender shall be
under any obligation to make any payment or cure any default by the Company
under the Lease.
7. This Landlord's Waiver shall inure to the benefit of Agent and
Lenders, their respective successors and assigns, and shall be binding upon
Landlord, mortgagees of the Premises and the successors and assigns of Landlord
and such mortgagees.
8. Landlord agrees to disclose this Landlord's Waiver to any purchaser
or successor to Landlord's interest in the Premises.
9. All notices to Agent hereunder shall be in writing, sent by
certified mail, and shall be addressed to Agent at the following address:
GENERAL ELECTRIC CAPITAL CORPORATION
105 West Madison, Suite 1600
Chicago, Illinois 60602
Attention: ICON Account Manager
Telecopier No. (312) 419-5977
Telephone No. (312) 419-0985
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Landlord's Waiver as of this __ day __________, 1998.
LANDLORD:
---------
OGDEN CITY, a Utah Municipal
Corporation, acting as a Local
Redevelopment Authority
By:_______________________________
Name:_____________________________
Title:____________________________
TENANT:
ICON HEALTH & FITNESS, INC.,
a Delaware Corporation
By: /s/ Fred Beck
-------------------------------
Name:_____________________________
Title:____________________________
cc: General Electric Capital Corporation
105 West Madison, Suite 1600
Chicago, Illinois 60602
Attn: ICON Account Manager
AMENDMENT TO LEASE AGREEMENT
THIS AMENDMENT TO LEASE AGREEMENT (this "Addendum") is entered into
effective as of this 25 day September, 1998, by and between OGDEN CITY, a
Municipal Corporation, acting as a Local Redevelopment Authority ("Landlord")
and ICON HEALTH AND FINESS, INCORPORATED, a Delaware Corporation ("Tenant").
WHEREAS, the parties have entered into a Sublease Agreement dated June
29, 1998, (the "Sublease") pertaining to Building 365 (16B) and associated real
property located at the site known as the "Defense Distribution Depot" in Ogden,
Utah, such buildings and real property being more particularly described in the
Sublease;
WHEREAS, the parties wish to amend the Sublease in certain respects, on
the terms and conditions described herein.
IT IS THEREFORE agreed as follows:
1. The term "Building" and "Leased Premises" are hereby amended to refer
to and include Bay 3 of Building 357 (Building 15A) (the "Additional Space")
during the Lease Term set forth in Section 2 below.
2. Notwithstanding the provisions of the Sublease, the initial Lease Term
for the Additional Space shall commence on 25 September, 1998 and end on
December 31, 1998, with 2 renewal options of 6 months each, subject to
termination of the Landlord's Lease. Renewal notices must be given in writing by
Tenant at least 60 days prior to the expiration of each Lease Term.
3. The Minimum Rent applicable to the Additional Space shall be $6,522
monthly (43,482 sq. ft. @ .15/sq.ft/month). First months rent and rent for any
days in September 1998 ($217.40 per day) will be due upon signing. Rent
inflation rate shall be two per cent (2%) exercised at the second renewal
option.
4. Tenant shall not be entitled to offset against Minimum Rent for
improvements to the Additional Space absent a separate written agreement
authorizing such offset.
5. Except where such terms or conditions are clearly inapplicable, all
other terms and conditions of the Sublease remain unmodified, and all such terms
and conditions shall apply to the lease of the Additional Space hereunder.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Addendum to
be effective the date and year first above written.
Dated this 24th day of November ,1998
---- ----------
LANDLORD:
OGDEN CITY, a Utah Municipal
Corporation, acting as a Local
Redevelopment Authority
By: /s/ Glenn J. Mecham
------------------------
Glenn J. Mecham, Mayor
ATTEST:
/s/ ILLEGIBLE
- ------------------------
CITY RECORDER
APPROVED AS TO FORM:
CITY ATTORNEY
TENANT:
ICON HEALTH AND FITNESS INCORPORATED
By: /s/ Fred Beck
------------------------------------
Fred Beck, Chief Financial Officer
STATE OF UTAH )
) SS
COUNTY OF WEBER )
The foregoing instrument was acknowledged before me this 24th day of November,
1998, by GLENN J. MECHAM, the Mayor of Ogden City, a Utah Municipal Corporation.
/s/ DeAnn Wallwork
---------------------------
NOTARY PUBLIC
My Commission Expires: 3/14/02
---------
in: Ogden, Utah
-------------------
STATE OF Utah )
--------------
) SS
COUNTY OF Cache )
-------------
The foregoing instrument was acknowledged before me 13th day November, 1998 by
Fred Beck, the Chief Financial Officer of the ICON Health and Fitness
Incorporated.
/s/ Denise Lott
---------------------------
NOTARY PUBLIC
My Commission Expires: 1/26/99
-------------
in: Logan, Ut
-----------------------
AMENDMENT TO LEASE AGREEMENT
THIS AMENDMENT TO LEASE AGREEMENT (this "Addendum") is entered into
effective as of 9th day July, 1998, by and between OGDEN CITY, a Municipal
Corporation, acting as a Local Redevelopment Authority ("Landlord") and ICON
HEALTH AND FINESS, INCORPORATED, a Delaware Corporation ("Tenant").
WHEREAS, the parties have entered into a Sublease Agreement dated June 29,
1998, (the "Sublease") pertaining to Building 365 (16B) and associated real
property located at the site known as the "Defense Distribution Depot" in Ogden,
Utah, such buildings and real property being more particularly described in the
Sublease;
WHEREAS, the parties wish to amend the Sublease in certain respects, on the
terms and conditions described herein.
IT IS THEREFORE agreed as follows:
1. The term "Building" and "Leased Premises" are hereby amended to refer to
and include Bay 3 of Building 357 (Building 15A) (the "Additional Space") during
the Lease Term set forth in Section 2 below.
2. Notwithstanding the provisions of the Sublease, the initial Lease Term for
the Additional Space shall commence on 30 June, 1998 and end on December 31,
1999, with month-to-month thereafter, subject to termination of the Landlord's
Lease. Renewal notices must be given in writing by Tenant at least 60 days prior
to the expiration of each Lease Term.
3. The Minimum Rent applicable to the Additional Space shall be $6,522 monthly
(43,482 sq. ft. @ .15/sq.ft/month). First months rent and rent for any days in
June 1999 ($217.40 per day) will be due upon signing. Rent inflation rate shall
be two per cent (2%) exercised at the second renewal option.
4. Tenant shall not be entitled to offset against Minimum Rent for
improvements to the Additional Space absent a separate written agreement
authorizing such offset.
5. Except where such terms or conditions are clearly inapplicable, all other
terms and conditions of the Sublease remain unmodified, and all such terms and
conditions shall apply to the lease of the Additional Space hereunder.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Addendum to
be effective the date and year first above written.
Dated this 9th day July, 1998
----- ------
LANDLORD:
OGDEN CITY, a Utah Municipal Corporation,
acting as a Local Redevelopment Authority
By: /s/ Glann J. Mecham
-------------------------------------
Glenn J. Mecham, Mayor
ATTEST:
/s/ ILLEGIBLE
- ----------------------------
CITY RECORDER
APPROVED AS TO FORM:
/s/ ILLEGIBLE
- ----------------------------
CITY ATTORNEY
TENANT:
ICON HEALTH AND FITNESS INCORPORATED
By: /s/ Fred Beck
-------------------------------------
Fred Beck, Chief Financial Officer
STATE OF UTAH )
) SS
COUNTY OF WEBER )
The foregoing instrument was acknowledged before me 9th day July 1998, by GLENN
J. MECHAM, the Mayor of Ogden City, a Utah Municipal Corporation.
/s/ DeAnn Wallwork
---------------------------
NOTARY PUBLIC
My Commission Expires: 3/14/02
----------
in: Ogden, Ut
---------------
STATE OF __________ )
) SS
COUNTY OF _________ )
The foregoing instrument was acknowledged before me 30th day of June, 1998 by
Fred Beck, the Chief Financial Officer of the ICON Health and Fitness
Incorporated.
/s/ Mary Lynn Hathaway
---------------------------
NOTARY PUBLIC
My Commission Expires: ____________
in: _______________
AMENDMENT TO LEASE AGREEMENT
THIS AMENDMENT TO LEASE AGREEMENT (this "Addendum") is entered into
effective as of this 1 day August, 1998, by and between OGDEN CITY, a Municipal
Corporation, acting as a Local Redevelopment Authority ("Landlord") and ICON
HEALTH AND FINESS, INCORPORATED, a Delaware Corporation ("Tenant").
WHEREAS, the parties have entered into a Sublease Agreement dated November
19, 1998, (the "Sublease") pertaining to Building 365 (16A) and associated real
property located at the site known as the "Defense Distribution Depot" in Ogden,
Utah, such buildings and real property being more particularly described in the
Sublease;
WHEREAS, the parties wish to amend the Sublease in certain respects, on the
terms and conditions described herein.
IT IS THEREFORE agreed as follows:
1. The agreement is amended to replace Exhibit "A" with the Exhibit "A"
attached to this amendment and by this reference incorporated herein.
2. Notwithstanding the provisions of the Sublease, the initial Lease Term for
the Additional Space shall commence on 1 August, 1999 and end on December 31,
1999. This Lease Amendment is a month to month lease for the Additional Space,
whereby Icon Health and Fitness, at its option, may provide thirty (30) days
written notification of intent to cancel this Lease Amendment anytime during the
term. Upon expiration of the initial term, renewal options shall be governed as
per Sections 1.7 and 3.3 of the Sublease.
3. The Minimum Rent applicable to the Additional Space shall be $6,522 monthly
(43,482 sq. ft. @ .15/sq.ft/month). First months rent will be due upon signing.
The daily rate for the Additional Space is $217.40 per day.
4. Tenant shall not be entitled to offset against Minimum Rent for
improvements to the Additional Space absent a separate written agreement
authorizing such offset.
5. Except where such terms or conditions are clearly inapplicable, all other
terms and conditions of the Sublease remain unmodified, and all such terms and
conditions shall apply to the lease of the Additional Space hereunder.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Addendum to
be effective the date and year first above written.
Dated this 18th day of October ,1999
------ -----------
LANDLORD:
OGDEN CITY, a Utah Municipal Corporation,
acting as a Local Redevelopment Authority
By: /s/ Glenn J. Mecham
--------------------------------
Glenn J. Mecham, Mayor
ATTEST:
/s/ ILLEGIBLE
- ------------------------------------
CITY RECORDER
APPROVED AS TO FORM:
/s/ ILLEGIBLE
- ------------------------------------
CITY ATTORNEY
TENANT:
ICON HEALTH AND FITNESS
INCORPORATED
By: /s/ ILLEGIBLE
---------------------------
STATE OF UTAH )
) SS
COUNTY OF WEBER )
The foregoing instrument was acknowledged before me 18th day October ,1998, by
GLENN J. MECHAM, the Mayor of Ogden City, a Utah Municipal Corporation.
/s/ DeAnn Wallwork
---------------------------
NOTARY PUBLIC
My Commission Expires: 3/14/02
-------------
in: Ogden, Ut
--------------
STATE OF UTAH )
--------- ) SS
COUNTY OF CACHE )
------
The foregoing instrument was acknowledged before me 22nd day of September, 1998
by KENT LUNDGREEN , the MATERIALS MANAGER , of the Icon Health and Fitness. ICON
Health and Fitness Incorporated.
/s/ Kimberly Langley
---------------------------
NOTARY PUBLIC
My Commission Expires:______________ Residing at Newton, Utah
in:________________
EXHIBIT A
DDOU LEASE AMENDMENT
DESCRIPTION OF LEASED PREMISES
1. Building 365 (16A), and all associated property (see attached map) and
Bay 6 of Building 357 (Building 15A) (the "Additional Space") during
the Lease Term set forth in Section 2 of the amendment.
- --------------------------------------------------------------------------------
together with the yard areas between the Building and the adjacent streets,
including all sidewalks, landscaped areas, open space and designated parking
lots to be used by Tenant.
EXHIBIT A TO LEASE AMENDMENT - PAGE 1
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EXHIBIT A TO LEASE AMENDMENT - PAGE 1