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EXHIBIT 10.9
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LEASE AGREEMENT
between
TRINET ESSENTIAL FACILITIES X, INC.
as Landlord
and
FIRST HEALTH STRATEGIES, INC.
as Tenant
dated as of November 1, 1994
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TABLE OF CONTENTS
Page
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1. DEMISE OF PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
4. RENTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
5. NET LEASE; NON-TERMINABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
6. QUIET ENJOYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
7. UTILITY BILLS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
8. REPAIRS AND MAINTENANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
9. IMPOSITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1O. DESTRUCTION OF OR DAMAGE TO PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
11. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
12. GOVERNMENTAL ORDERS; COVENANTS: LANDLORD CURE; PERMITTED CONTEST . . . . . . . . . . . . . . . 16
13. EMINENT DOMAIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
14. DEFAULT: Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
15. REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
16. SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
17. LANDLORD'S RIGHT OF ENTRY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
18. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
19. STATUS OF LEASE; FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
20. MECHANICS' LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
21. END OF TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
22. ALTERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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23. MEMORANDUM OF LEASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
24. SUBLETTING/ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
25. HAZARDOUS MATERIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
26. MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Exhibit A-1 Description of Land
Exhibit A-2 Description of Personal Property
Exhibit A-3 Site Plan
Exhibit B Rent Payments
Exhibit C Repurchase Schedule
Exhibit D Form of Estoppel Certificate
Exhibit E Permitted Exceptions
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THIS LEASE, made and entered into as of November 1, 1994 (together
with all amendments and supplements hereto, this "Lease"), by and between
TRINET ESSENTIAL FACILITIES X, INC., a Maryland corporation (together, with any
successor or assigns, hereinafter called the "Landlord") and FIRST HEALTH
STRATEGIES, INC., a Delaware corporation (together with any permitted successor
or assigns, hereinafter called the "Tenant"). Capitalized terms used herein
not otherwise defined shall have the meanings specified in Annex I hereto.
WITNESSETH
In consideration of the covenants and agreements herein contained, the
parties hereto mutually agree as follows:
1. DEMISE OF PREMISES: Landlord hereby demises and leases to
Tenant and Tenant hereby leases and rents from Landlord the Premises, in its
"as is" condition, subject to the existing state of title (without express or
implied warranty of Landlord with respect to the condition or fitness of the
Premises for a particular use or title thereto, except that Landlord warrants
that it did not convey or encumber the Premises prior to entering into this
Lease except by a mortgage to which Tenant has subordinated its interest
hereunder), consisting of the land parcel more particularly described in
Exhibit A-1 attached hereto and incorporated herein by reference and located at
2569, 2575, 2602, 2614, 2650 and 2686 South Decker Lake Lane and 2601 South
Redwood Road, Salt Lake City, Utah, and the buildings, structures, improvements
now or hereafter located on said land and the personal property used in
connection with the buildings and listed on Exhibit A-2 hereto and incorporated
herein by reference (but excluding Tenant's trade fixtures), parking areas and
driveways, together with any easements, rights, and appurtenances in connection
therewith or belonging thereto all being collectively hereinafter referred to
as "the Premises". No easement for light, air or view included with or
appurtenant to the Premises. Exhibit A-3 is a lot map identifying the four
buildings (each, a "Building") which comprise the Premises, and the land
allocated to each (each, together with the related Building, a "Property
Unit"). For certain purposes hereinafter set forth, Fixed Rent and Landlord's
Investment in each Property Unit are allocated as follows:
Property Unit Fixed Rent % Landlord's Investment
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Building 1 14.73% $1,900,170
Building 2 12.52% $1,615,080
Building 3 45.31% $5,844,990
Building 4 27.44% $3,539,760
2. USE: Tenant shall use and occupy the Premises for general
office purposes, including computer operations and related functions or for
such other purposes as are consistent
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with all applicable laws and restrictions. Tenant shall not use or occupy the
same, or knowingly permit them to be used or occupied, contrary to any statute,
rule, order, ordinance, requirement or regulation applicable thereto, or in any
manner which would violate any certificate of occupancy affecting the same or
which would make void or voidable any insurance then in force with respect
thereto or which would make it impossible to obtain fire or other insurance
thereon required to be furnished hereunder by Tenant, or which would cause
structural injury to the Premises or cause the value or usefulness of the
Premises, or any portion thereof, to materially diminish, or which would
constitute a public or private nuisance or waste, and Tenant agrees that it
will promptly, upon discovery of any such use, take all necessary steps to
compel the discontinuance of such use. Tenant shall not use, suffer or permit
the Premises, or any portion thereof, to be used by Tenant third party or the
public, as such, without restriction or in such manner as might reasonably tend
to impair Landlord's title to the Premises, or in such manner as might
reasonably make possible a claim or claims of adverse usage or adverse
possession by the public, as such, or third persons, or of implied dedication
of the Premises, or any portion thereof. Nothing contained in this Lease and
no action or inaction by Landlord shall be deemed or construed to mean that
Landlord has granted to Tenant any right, power or permission to do any act or
make any agreement that may create, or give rise to or be the foundation for
any such right, title, interest, lien, charge or other encumbrance upon the
estate of the Landlord in the Premises.
3. TERM:
A. The initial term of this Lease (the "Initial Term")
shall be for a period of approximately fifteen (15) years, which term shall
begin on the Commencement Date (as that term is hereinafter defined) and shall
end on November 30, 2009 (the "Lease Expiration Date").
B. The term "Commencement Date" shall mean December 9,
1994 (the "Closing").
C. Unless Tenant elects, at its option, to terminate
this Lease, this Lease will be automatically renewed for three (3) renewal
terms (each, a "Renewal Term") of five (5) years each (individually, the First,
Second and Third Renewal Terms). The First Renewal Term shall commence on the
day after the Lease Expiration Date and shall terminate on the fifth (5th)
anniversary of the Lease Expiration Date. Each of the Second and Third Renewal
Terms shall commence on the day after the date of expiration of the immediately
preceding Renewal Term and shall
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terminate on the fifth (5th) anniversary of the termination of the immediately
preceding Renewal Term. (Each such Renewal Term commencement date shall be
referred to herein as the "Renewal Term Commencement Date" with respect to the
related Renewal Term and each such Renewal Term expiration date shall be
referred to herein as the "Renewal Term Expiration Date" with respect to the
related Renewal Term.) The option to renew the Term of this Lease as described
above shall be by written notice to Landlord at least 12 months prior to the
Lease Expiration Date or 12 months prior to the Renewal Term Expiration Date of
the then current term, as the case may be. If Landlord has not received notice
of termination by the twelfth month prior to the Lease Expiration Date or
Renewal Term Expiration Date, as the case may be, this Lease shall be
automatically extended for the next succeeding Renewal Term, provided that if
Tenant gives a notice of termination prior to the scheduled expiration of the
Initial Term or the then existing Renewal Term, as the case may be but less
than twelve months prior to such scheduled expiration date, this Lease shall
terminate on such scheduled expiration date upon payment by Tenant to Landlord
of an amount equal to the excess of one year's Fixed Rent (measured from the
date such notice of termination is received by Landlord) over the amount of
Fixed Rent paid to Landlord subsequent to the delivery of such notice. All of
the terms, covenants and conditions of this Lease shall continue in full force
and effect during the Renewal Term, except that the minimum rent shall be as
provided for in Paragraph 4. The Initial Term, together with any Renewal
Terms, shall constitute the "Term" of this Lease.
4. RENTAL:
Tenant agrees to pay Landlord without notice, by payments to be sent
to Landlord at its address set forth above, or to such other person or address
as Landlord shall specify by notice during the Term of this Lease, fixed rent
("Fixed Rent") in advance on or before the first day of each month in the
amounts specified on Exhibit B hereto and hereby incorporated herein. If Fixed
Rent is not paid when due, interest shall accrue thereon at the Overdue Rate
from the third day after its due date until payment is made. Under the
circumstances specified in Paragraph 15E, an additional late charge may also be
payable. Whenever in this Lease a payment is due on a date which is not a
business day, such payment shall be due, without penalty for the delay, on the
next succeeding business day.
5. NET LEASE; NON-TERMINABILITY: (a) This is an absolutely net
lease and the Fixed Rent, Additional Rent and all other sums payable hereunder
by Tenant, whether as the purchase price for the Premises or otherwise, shall
be paid without notice
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(except as expressly provided herein), demand, setoff, counterclaim, abatement,
suspension, deduction or defense.
(b) This Lease shall not terminate, nor shall Tenant have any
right to terminate this Lease (except as provided in Paragraphs 10 and 13), nor
shall Tenant be entitled to any abatement or reduction of rent hereunder
(except as otherwise expressly provided herein), nor shall the obligations of
Tenant under this Lease be affected, by reason of (i) any damage to or
destruction of all or any part of the Premises from whatever cause, (ii) the
taking of the Premises or any portion thereof by condemnation, requisition or
otherwise, (iii) the prohibition, limitation or restriction of Tenant's use of
all or any part of the Premises, or any interference with such use, (iv) any
eviction by paramount title or otherwise, (v) Tenant's acquisition or ownership
of all or any part of the Premises otherwise than as expressly provided herein,
(vi) any default on the part of Landlord under this Lease, or under any other
agreement to which Landlord and Tenant may be parties, (vii) the failure of
Landlord to deliver possession of the Premises on the commencement of the term
hereof or (viii) any other cause whether similar or dissimilar to the
foregoing, any present or future law to the contrary notwithstanding. It is
the intention of the parties hereto that the obligations of Tenant hereunder
shall be separate and independent covenants and agreements, that the Fixed
Rent, the Additional Rent and all other sums payable by Tenant hereunder shall
continue to be payable in all events and that the obligations of Tenant
hereunder shall continue unaffected unless the requirement to pay or perform
the same shall have been terminated pursuant to any express provision of this
Lease.
(c) Tenant agrees that it will remain obligated under this Lease
in accordance with its terms, and that it will not take any action to
terminate, rescind or avoid this Lease, notwithstanding (i) the bankruptcy,
insolvency, reorganization, composition, readjustment, liquidation, dissolution
or winding-up or other proceeding affecting Landlord or its successor in
interest, or (ii) any action with respect to this Lease which may be taken by
any trustee or receiver of Landlord or its successor in interest or by any
court in any such proceeding.
(d) Except as otherwise expressly provided herein, Tenant waives
all rights which may now or hereafter be conferred by law (i) to quit,
terminate or surrender this Lease or the Premises or any part thereof, or (ii)
to any abatement, suspension, deferment or reduction of the Fixed Rent,
Additional Rent or any other sums payable under this Lease.
6. QUIET ENJOYMENT: Landlord covenants with Tenant, that
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upon the payment of the Fixed Rent and Additional Rent and the performance of
all the terms of this Lease, Tenant shall at all times during the Term,
peaceably and quietly enjoy the Premises without any disturbance from Landlord
or from any person claiming by, through, or under Landlord, except as provided
in Paragraph 17 of this Lease.
7. UTILITY BILLS:
Tenant shall pay before delinquency water, sewer, gas, fuel,
electricity, light, heat power and all other utility bills for the Premises and
the business conducted thereon.
8. REPAIRS AND MAINTENANCE:
(a) Tenant shall, at its own sole cost and expense, keep the
Premises in good order and condition, normal wear and tear and damage covered
by insurance excepted, at all times on and after commencement of the Term to
and including the date of the termination of the Term, by lapse of time or
otherwise. Tenant shall promptly and adequately repair and replace all damage
to the Premises and all its component parts, and replace or repair all
landscaping and all damaged or broken fixtures, equipment and appurtenances.
In addition, Tenant shall timely and properly maintain all of the
Premises including, but not necessarily limited to mechanical systems,
electrical systems, plumbing and sewage systems, foundations and floor slabs,
glazing systems, structural steel, masonry walls and wall enclosures, and water
tightness of all curtain walls by a qualified stationary engineer or otherwise,
so as to preserve and protect the useful life, utility and value of such
component.
In addition, Tenant shall maintain and repair, or cause others to maintain and
repair the roof, and repair any material defect in materials or workmanship
relating to the foundation, columns, and structural steel which comprise a part
of the Premises. The time permitted by Tenant to effectuate such repairs shall
be extended for such period as may be necessary provided Tenant is
continuously, diligently and in good faith prosecuting the same. Landlord, not
more frequently than annually during the Term upon prior notice to Tenant
(except in the event of an emergency or extraordinary condition), may cause, at
Landlord's expense, independent private inspectors, qualified in the specific
discipline and reasonably insured (in Tenant's reasonable judgment), to make
inspections of the Buildings and building systems or segments thereof (during
business hours and in a manner so as to minimize the disturbance of Tenant's
business) to
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determine Tenant's compliance under this Paragraph.
If the Tenant does not timely or properly perform repairs as above
provided, Landlord may, but need not, after ten (10) days' notice to Tenant,
make such repairs, replacements or maintenance in a reasonably diligent
fashion, and Tenant shall pay Landlord forthwith upon being billed for same by
Landlord.
Landlord may, but shall not be required to, enter the Premises personally or
through independent inspectors, at all reasonable times upon reasonable notice
(except in the case of an emergency) to inspect the Premises, and to make such
repairs, alterations, improvements and additions to the Premises or to any
equipment or fixtures located on the Premises as Landlord deems reasonably
necessary and which Tenant failed to do as required in this Lease.
(b) It is intended by Tenant and Landlord that Landlord
shall have no obligation, in any manner whatsoever, to repair or maintain the
Premises (or the equipment therein), whether structural or nonstructural, all
of which obligations are intended, as between Landlord and Tenant, to be those
of Tenant. Tenant expressly waives the benefit of any statute now or in the
future in effect which would otherwise afford Tenant the right to make repairs
at Landlord's expense or to terminate this Lease because of Landlord's failure
to keep the Premises in good order, condition and repair.
9. IMPOSITIONS: (a) Tenant covenants and agrees to pay,
during the Term, as Additional Rent, before any fine, penalty, interest or cost
may be added thereto for the nonpayment thereof, all real estate taxes, special
assessments, utility bills referred to in Paragraph 7, street lighting, excise
levies, personal property taxes, licenses, permits, inspection fees, other
governmental charges, and all other charges or burdens of whatsoever kind and
nature (including costs, fees, and expenses of complying with any restrictive
covenants or similar agreements to which the Premises are subject incurred in
the use, occupancy, operation, leasing or possession of the Premises (excluding
any income taxes on the Fixed Rent imposed on Landlord, it being the intent of
the parties hereto that any tax on the net income derived from the Fixed Rent
payable in respect to the Premises imposed by any governmental authority shall
be paid by Landlord), without particularizing by any known name or by whatever
name hereafter called, and whether any of the foregoing be general or special,
ordinary or extraordinary, foreseen or unforseen, which at any time during the
Term may be payable. Tenant shall pay all special (or similar) assessments or
installments thereof (including interest thereon) for public improvements or
benefits
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which, during the Term shall be laid, assessed, levied or imposed upon or
become a lien upon the Premises and which are payable during the Term, or any
portion thereof; provided, however, that if by law any special assessment is
payable or, at the option of the party obligated to make such payment, may be
paid in installments (whether or not interest shall accrue on the unpaid
balance of such special assessment), Tenant may pay the same, together with any
interest accrued on the unpaid balance of such special assessment in
installments as the same respectively become payable and before any fine,
penalty, interest or cost may be added thereto for the nonpayment of any such
installment and the interest thereon. Tenant shall pay all real estate taxes,
whether heretofore or hereafter levied or assessed upon the Premises, or any
portion thereof, which are due and payable during the Term. At the end of the
Term of the Lease, Tenant's obligation to pay such taxes shall be prorated in
the event the tax period and the Term are not coextensive. If Landlord
receives any bill for taxes for which Tenant is responsible hereunder, Landlord
shall deliver such bill to Tenant within 30 days of its receipt. Within 30
days after payment thereof, Tenant shall deliver to Landlord evidence of
payment of all taxes payable by Tenant hereunder.
(b) Except for any tax on the net income derived from the Fixed Rent,
if at any time during the Term, any method of taxation shall be such that there
shall be levied, assessed or imposed on the Landlord, or on the Fixed Rent or
Additional Rent, or on the Premises, or any portion thereof, a capital levy,
gross receipts tax or other tax on the rents received therefrom, or a franchise
tax, or an assessment, gross levy or charge measured by or based in whole or in
part upon such gross Rents, Tenant, to the extent permitted by law, covenants
to pay and discharge the same, it being the intention of the parties hereto
that the Fixed Rent to be paid hereunder shall be paid to Landlord absolutely
net without deduction or charge of any nature whatsoever, foreseeable or
unforeseeable, ordinary or extraordinary, or of any nature, kind, or
description, except as otherwise expressly provided in this Lease.
(c) Tenant covenants to furnish Landlord, within thirty (30) days
after the date upon which any Imposition or other tax, assessment, levy or
charge is payable by Tenant, official receipts of the appropriate taxing
authority, or other appropriate proof satisfactory to Landlord, evidencing the
payment of the same. The certificate, advice or bill of the appropriate
official designated by law to make or issue the same or to receive payment of
any Imposition may be relied upon by Landlord as sufficient evidence that such
Imposition, is due and unpaid at the time of making or issuance of such
certificate,
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advice or bill.
(d) At Landlord's written demand, upon the occurrence of an Event of
Default hereunder and until there shall have elapsed 18 consecutive months
within which no Event of Default has occurred or continued hereunder, Tenant
shall pay into an interest- bearing escrow account controlled by Landlord the
known or estimated yearly real estate taxes and assessments, payable with
respect to the Premises in monthly payments equal to one-twelfth (1/12) of the
known or estimated yearly real estate taxes and assessments, next payable with
respect to the Premises. Interest on such escrow account shall belong to
Tenant. From time to time, after a default hereunder, Landlord may re-estimate
the amount of real estate taxes and assessments, and in such event Landlord
shall notify Tenant, in writing, of such re-estimate and fix future monthly
installments for the remaining period prior to the next tax and assessment due
date in an amount sufficient to pay the re-estimated amount over the balance of
such period after giving credit for payments made by Tenant on the previous
estimate.
If the total monthly payments made by Tenant pursuant to this Paragraph
shall exceed the amount of payments necessary for said taxes and assessments,
such excess over $1,000.00 shall be promptly paid to the Tenant and the balance
shall be credited on subsequent monthly payments of the same nature. However,
if the total of such monthly payments so made under this Paragraph shall be
insufficient to pay such taxes and assessments when due, then Tenant shall pay
to Landlord such amount as may be necessary to make up the deficiency. All such
deposits made by Tenant pursuant to this Paragraph 9(d) shall be deposited in a
federally insured institution reasonably satisfactory to Landlord and Tenant,
and all interest earned thereon shall accrue to the benefit of Tenant. Payment
by Tenant of real estate taxes, assessments, under this Paragraph shall be
considered as performance of such obligation under the provisions of Paragraph
9(a) hereof.
1O. DESTRUCTION OF OR DAMAGE TO PREMISES:
(a) Tenant covenants that in case of damage to or
destruction of any or all of the improvements upon the Premises by fire or any
other cause, insured or uninsured, Tenant will promptly, at its sole cost and
expense, restore, repair, replace or rebuild the improvements so damaged or
destroyed as nearly as practicable to substantially the same condition as
existed immediately prior to such damage or destruction, or with such changes
or alterations as Tenant shall elect to make in conformity with Paragraph 23 of
this Lease. In performing its obligations under this Paragraph 10, Tenant
shall be entitled to
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insurance proceeds under the terms and conditions set forth in Paragraph 11
hereof. Landlord shall have the right to approve the plans and specifications
for the work of repair, replacement or rebuilding, such approval not to be
unreasonably withheld or delayed. Tenant shall diligently obtain all necessary
permits for such work or repair and shall maintain builder risk insurance in
amounts reasonably satisfactory to Landlord until completion of such work.
Such restoration, repairs, replacement or rebuilding shall be commenced
promptly and prosecuted with diligence, subject to unavoidable delays and force
majeure.
(b) Notwithstanding Paragraph 10(a), during the last two
years of the Initial Term and of each Renewal Term, in the case of damage
expected to cost more than $1 million to repair, Tenant shall have the option
of either (x) restoring, repairing, replacing or rebuilding as provided above,
or (y) delivering to Landlord within 60 days of such casualty a notice of
termination of this Lease, which notice shall be accompanied by an irrevocable
offer by Tenant to purchase on the next due date for the Fixed Rent payment,
(the "Termination Date") which occurs not less than 45 days after the delivery
of such notice, any remaining portion of the Premises at a price determined in
accordance with Exhibit C hereto, plus all costs of transferring title to the
Premises to Tenant, including without limitation all transfer taxes, recording
fees and any unwind costs resulting from a prepayment of debt secured in part
by the Premises (but not including prepayment premiums or yield maintenance
premiums). Landlord shall accept or reject such offer by notice given to
Tenant not later than thirty (30) days after receipt of Tenant's notice, and if
Landlord fails to act, it shall be presumed to have accepted the offer. If
Landlord shall have accepted such offer, on the Termination Date, Landlord
shall convey by special warranty deed to Tenant any remaining portion of the
Premises free of liens and encumbrances (except those existing on the
Commencement Date or thereafter created with the written consent of the
Tenant), along with the right to receive any insurance proceeds to which
Landlord is entitled. If Landlord rejects such offer, this Lease shall
terminate on the Termination Date except for liabilities which accrued prior
thereto insurance proceeds shall be allocated as follows: the first dollars up
to the then applicable amount determined in accordance with Exhibit C shall be
paid to Landlord, Tenant shall be entitled to receive the next dollars up to an
amount equal to the present value (discounted at 9% per annum) of the excess,
if any, of the fair market net rental value of the Premises for the remainder
of the then existing Term over the Fixed Rent for the remainder of such Term,
similarly discounted and any remaining proceeds shall be shared equally by
Landlord and Tenant.
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11. INSURANCE:
(a) Tenant at its own cost and expense shall obtain and
continuously maintain in full force and effect during the Term policies of
insurance covering the improvements constructed, installed or located on the
Premises which insurance shall be for the benefit of Tenant and/or Tenant's
parent company as named insured and loss payee, and Landlord and Landlord's
designated mortgagee or trust deed holder, as the additional insureds and loss
payees, against
(i) loss or damage by fire and from such other risks or
hazards now or hereafter covered by an "Extended
Coverage Endorsement", including, but not limited to,
windstorm, hail, explosion, vandalism, riot and civil
commotion, damage from vehicles, smoke damage, water
damage and debris removal;
(ii) loss from flood if the Premises are in a designated
flood or flood hazard area; and
(iii) loss from so-called explosion, collapse, earth
movement and underground hazards; and
(iv) loss or damage from such other risks or hazards of
a similar or dissimilar nature which are now or may
hereafter be customarily insured against with respect
to improvements similar in construction, design,
general location, use and occupancy to the
improvements or the Premises (hereinafter referred to
as "Casualty Insurance").
Such Casualty Insurance shall:
(a) be written with companies licensed to do business in
the State of Utah, having an [A.M. Best's "General
Policy Holding Rating" of [B+] or better and a
financial rating class of XII] or better and
reasonably acceptable to Landlord;
(b) insure the interest of Landlord's mortgagee(s) or
trust deed holder(s) under standard mortgagee clauses
effective as of the Commencement Date;
(c) be maintained continuously through the Term hereof;
and
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(d) provide for a deductible no greater than $100,000.
At all times, the Casualty Insurance coverage shall be in an amount
equal to one hundred percent (100%) of the then "Full Replacement Cost" of the
Improvements and shall include a so-called "Agreed Amount Endorsement". Full
Replacement Cost shall be interpreted to mean the cost of replacing the
improvements on the Premises without deduction for depreciation or wear and
tear, and it shall include a reasonable sum for architectural, engineering,
legal, interest charges, administrative and supervisory fees connected with the
restoration or replacement of Landlord's Improvements in the event of damage
thereto or destruction thereof. Full Replacement Cost shall be determined from
time to time (but not more frequently than once in any two (2) year period), by
the insurer without cost to Landlord. If the insurer is unable or unwilling to
make such determination, the determination shall be made by the mutual
agreement of Landlord and Tenant, and if they shall fail to agree within thirty
days, then Landlord and Tenant shall each appoint a disinterested appraiser,
each of whom shall provide their opinion of Full Replacement Cost. If the
lower of the two appraiser's numbers is at least 90% of the higher, then the
average of such numbers shall be Full Replacement Value. If the lower number
is less than 90% of the higher number, the two appraisers shall select a third
appraiser whose determination shall be final. The cost of the appraisers shall
be paid by Tenant.
If a sprinkler system shall be located in the improvements on the
Premises, sprinkler leakage coverage, shall be procured by Tenant as part of
the Casualty Insurance, and be in form and amount reasonably satisfactory to
Landlord and shall be continuously maintained during the Term, at Tenant's sole
cost and expense.
(b) During the Term, Tenant, at its sole cost and expense, but for
the benefit of Landlord, Landlord's beneficiary, designated agent and mortgagee
or trust deed holder, and for the benefit of Tenant, shall obtain and
continuously maintain, in full force and effect, the following insurance
coverage written by a reputable and financially sound insurance company
authorized to insure and such risks in the State of Utah:
(i) Comprehensive general liability insurance with broad
form liability endorsement for personal injury or property
damage for any loss, liability or damage on, about or relating
to the Premises, or any portion thereof, with limits of not
less than Five Million Dollars ($5,000,000.00) single
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limit coverage on an occurrence basis. Such insurance shall
specifically insure (by contractual liability endorsement)
Tenant's obligations under Paragraph 11 of this Lease.
(ii) Rental interruption insurance for a period of not
less than one (1) full calendar year for the full and complete
obligation of Tenant, during said period, to pay Rent
hereunder.
(iii) Boiler and pressure vessel (including, but not
limited to, pressure pipes, steam pipes and condensation
return pipes) insurance, provided the Building contains a
boiler or other pressure vessel or pressure pipes, in an
amount reasonably satisfactory to Landlord.
(iv) Such other insurance, and in such amounts as may from
time to time be reasonably required by Landlord, against other
insurable hazards which at the time are commonly insured
against in the case of premises and/or buildings or
improvements similar in construction, design, general
location, use and occupancy to those on or appurtenant to the
Premises.
The insurance set forth in this Paragraph 11(b) shall be maintained by
Tenant at not less than the limits set forth herein until reasonably required
to be changed from time to time by Landlord, in writing, whereupon Tenant
covenants to obtain and maintain thereafter such protection in the amount or
amounts so required by Landlord.
Tenant shall maintain a policy or policies of workers' compensation
insurance in amounts required by applicable state law or, to the extent
permitted by state law, self insure the workers compensation liability.
Each policy of insurance required under this Article 11 shall have attached
thereto
(i) an endorsement that such policy shall not be
cancelled or coverage reduced without at least thirty (30)
days prior written notice to Landlord except that only ten
(10) days notice of cancellation will be given in
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the case of cancellation for nonpayment of premium, and
(ii) an endorsement to the effect that the insurance as to
the interest of Landlord, and Landlord's beneficiary,
designated agent, mortgagee or trust deed holder shall not be
invalidated by any act or neglect of any person, the use of
the Premises for a more hazardous purpose than contemplated by
the insurer or a change in ownership of the Premises (by
foreclosure or otherwise).
To the extent the foregoing endorsements are not obtainable in
precisely the form prescribed, Tenant shall obtain reasonably similar
endorsements. All policies of insurance shall be written in such form and
shall be distributed in such companies as shall be reasonably satisfactory to
Landlord. Certificates of insurance acceptable to Landlord shall be delivered
to Landlord by the company or agent issuing the same or accompanied by other
evidence satisfactory to Landlord that the premiums thereon have been paid.
Certificates of insurance acceptable to Landlord shall be delivered to Landlord
on or before the Commencement Date. Prior to the expiration of such policy, a
new certificate of insurance acceptable to Landlord shall be delivered to
Landlord not less than five (5) days prior to the expiration of the then
current policy term.
All insurance coverage required hereunder shall have a so-called "waiver
of subrogation clause" as to Tenant and Landlord.
Nothing in this Paragraph 11 shall prevent Tenant from taking out insurance
of the kind and in the amount provided for under the preceding paragraphs of
this Article under a blanket insurance policy or policies (copies of which or
certificates thereof satisfactory to Landlord shall be delivered to Landlord)
which may cover other properties owned, operated, leased or occupied by Tenant
as well as the Premises; provided, however, that any such policy of blanket
insurance of the kind provided for shall:
(i) contain an "Agreed Amount" endorsement which provides
for settlement on a replacement cost basis for all real and
personal property; and
(ii) not contain any clause which would result in the
insured thereunder being required to carry any insurance with
respect
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to the property covered thereby in an amount not less than any
specific percentage of the Full Replacement Cost of such
property in order to prevent the insureds named from becoming
a co-insurer of any loss with the insurer under such policy.
Further, such policies of blanket insurance shall, as respects the Premises,
contain the various provisions required of such an insurance policy by the
foregoing provisions of this Paragraph 11.
(c) In the event of loss or damage to the Premises or in the event
of a claim in connection with the injury or death of any person at the Premises
or by reason of operations at the Premises, Tenant shall promptly notify
Landlord thereof in writing, shall prepare and present timely claims to the
appropriate insurers on behalf of Tenant, Landlord and any assignee or
mortgagee of Landlord and shall adjust and, in the case of claims involving net
proceeds of not more than $100,000, settle such claim. In the case of property
damage claims involving net proceeds of more than $100,000, Tenant shall have
control of the settlement process so long as no Event of Default is continuing
hereunder.
(d) In the event the net proceeds of any property claim are not in
excess of $100,000, such proceeds shall be payable to Tenant. In the event the
net proceeds are in excess of $100,000 but equal to or less than the
apportioned value of the damaged Building as allocated in Paragraph 1 hereof,
such sum shall be paid to or deposited with either a bank or trust company
having an office in the State of Utah and designated by Tenant, subject to the
reasonable approval of Landlord (herein called the "Proceeds Trustee") in the
name of the Proceeds Trustee as trustee for Landlord and Tenant and disbursed
in the manner hereinafter provided. In the event Landlord mortgages the
Premises with a First Mortgage, the mortgagee thereunder (regardless of its
location) may, at its option, be appointed Proceeds Trustee for so long as such
First Mortgage remains outstanding and such Mortgagee does not control Landlord
or is not controlled by or under common control with Landlord. Insurance
proceeds shall be deposited in an interest bearing account (if available) and
interest shall be distributed to Tenant upon completion of said installation,
repair, replacement or rebuilding, provided no default has occurred and is
continuing hereunder. All checks drawn on said account shall be co-signed by
the Proceeds Trustee and Tenant. Insurance proceeds shall be disbursed to
Tenant by the Proceeds Trustee under the following procedure:
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(i) No more frequently than once per calendar month, Tenant may
request reimbursement for costs incurred by Tenant for work in place to repair
and restore the Premises during the immediately preceding calendar month.
Tenant's request shall certify that all work for which reimbursement is
requested was performed in compliance with the plans and specifications
approved by Landlord pursuant to Paragraph 32 and all applicable laws, and
shall include reasonably satisfactory evidence of the costs incurred by Tenant
and unconditional lien releases in form and substance executed by all
mechanics, materialmen, laborers, suppliers and contractors who performed any
portion of the repair work or applied materials as required to enable the title
insurance company issuing endorsements to Landlord and Mortgagee to issue
current endorsements without exception for mechanic's, materialmen's,
laborer's, supplier's or contractor's liens.
(ii) Within ten (10) days after receiving Tenant's request,
Landlord shall approve or disapprove Tenant's request, which approval shall not
be unreasonably withheld, by written notice to Tenant and the Proceeds Trustee.
If Landlord approves all or any portion of a request and Landlord has received
(and not previously disbursed) insurance proceeds, then Proceeds Trustee shall
pay to or upon the order of Tenant the amount approved by Landlord. If
Landlord disapproves all or any portion of a request, then Landlord's notice
shall state the reasons for that disapproval. In addition, Landlord shall have
the right to impose other conditions upon disbursement so long as they are
consistent with customary construction loan disbursement practices.
(iii) Upon completion of the repair and restoration of the Premises
in a manner reasonably satisfactory to Landlord, any remaining proceeds
received on account of such casualty shall be paid to Tenant.
(e) Tenant shall protect, defend, indemnify and hold
Landlord, its direct or indirect partners, the Mortgagee and their respective
successors and assigns (collectively, the Landlord Group) harmless from and
against any and all claims, losses, costs and judgments (including reasonable
costs of investigation and defense) arising from Tenant's use of the Premises,
or from the conduct of Tenant's business or from any activity, work or things
done, permitted or suffered by Tenant in or about the Premises or elsewhere and
shall further protect, defend, indemnify and hold Landlord Group harmless from
and against any and all claims arising from any breach or default in the
performance of any obligation on Tenant's part to be performed under the terms
of this Lease, or arising from any negligence of Tenant, or any of Tenant's
agents, contractors or
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employees, and from and against all costs, reasonable attorney's fees actually
incurred, expenses and liability incurred in the defense of any such claim or
any action or proceeding brought thereon; and in case any action or proceeding
be brought against a member of Landlord Group by reason of any such claim,
Tenant upon notice from a member of Landlord Group shall defend the same at
Tenant's expense by counsel reasonably satisfactory to Landlord Group or
selected by the insurance carrier. Tenant, as a material part of the
consideration to Landlord, assumes all risk of damage to property or injury to
or death of persons, in, upon or about the Premises arising from any cause and
Tenant waives all claims in respect thereof against Landlord unless caused by
the willful or negligent act of Landlord or its agents.
12. GOVERNMENTAL ORDERS; COVENANTS: LANDLORD CURE; PERMITTED CONTEST:
A. Tenant shall throughout the Term promptly comply or cause compliance
with or remove or cure any violation of any and all present and future laws,
ordinances (zoning or otherwise), orders, rules, regulations and requirements
of all Federal, State, Municipal and other governmental bodies having
jurisdiction over the Premises and the appropriate departments, commissions,
boards and officers thereof, and the orders, rules and regulations of the Board
of Fire Underwriters where the Premises are situated, or any other body now or
hereafter constituted exercising lawful or valid authority over the Premises,
or any portion thereof, or the sidewalks, curbs, roadways, alleys or entrances
adjacent or appurtenant thereto, or exercising authority with respect to the
use or manner of use of the Premises, or such adjacent or appurtenant
facilities, and whether the compliance, curing or removal of any such violation
and the costs and expenses necessitated thereby shall have been foreseen or
unforeseen, ordinary or extraordinary, and whether or not the same shall be
presently within the contemplation of Landlord or Tenant or shall involve any
change in governmental policy, or require structural or extraordinary repairs,
alterations or additions by Tenant and irrespective of the amount of the costs
thereof. Tenant, at its sole cost and expense, shall comply with all
agreements, contracts, easements, restrictions, reservations or covenants, if
any, running with the Land, now existing or hereafter created by Tenant or
consented to in writing by Tenant or requested in writing by Tenant including
without limitation the Restrictive Covenants recorded as Entry No. 2955455 in
Book 4532, Page 768 and as Entry No. 3506515 in Book 5182, Page 528 and the
obligations under the Easement Agreement recorded as Entry No. 5623353 in Book
6771, page 1056 and Easement Relocation Agreement recorded as Entry No. 5841345
in Book 6955, page 291, in each case of Official Records of Salt
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Lake City, Utah. Tenant shall also comply with, observe and perform all
provisions and request of all policies of insurance at any time in force with
respect to the Premises and required to be obtained and maintained under the
terms of Paragraph 11 hereof and shall comply with all development permits
issued by governmental authorities issued in connection with development of the
Premises.
B. If Tenant shall at any time fail to pay any Imposition in accordance
with the provisions of Paragraph 9, or to take out, pay for, maintain and
deliver any of the insurance policies or certificates of insurance provided for
in Paragraph 11, or shall fail to make any other payment or perform any other
act on its part to be made or performed, then Landlord, after ten (10) days
prior written notice to Tenant (or without notice in case of emergency), and
without waiving or releasing Tenant from any obligation of Tenant contained in
this Lease, may, but shall be under no obligation to do so,
(i) pay after said ten (10) days' written notice to
Tenant, any Imposition payable by Tenant pursuant to
the provisions of Paragraph 9;
(ii) take out, pay for and maintain any of the insurance
policies provided for in this Lease; or
(iii) make any other payment or perform any other act on
Tenant's part to be paid or performed hereunder,
except that any time permitted to Tenant to perform
any act required to be performed by Tenant hereunder
shall be extended for such period as may be
necessary to effectuate such performance provided
Tenant is continuously, diligently and in good faith
prosecuting such performance.
Landlord may enter upon the Premises for any such purpose and take all such
action therein or thereon as may be necessary therefor and all such action
taken by Landlord shall be in a reasonably diligent fashion. All sums so paid
by Landlord and all costs and expenses, including a reasonable
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attorney's fees, reasonably incurred by Landlord in connection with the
performance of any such act, together with interest thereon at the Overdue Rate
from the respective dates of Landlord's making of each payment of such cost and
expense, including reasonable attorney's fees, shall be paid by Tenant to
Landlord on demand. Landlord shall not be limited in the proof of any damages
which Landlord may claim against Tenant arising out of or by reason of Tenant's
failure to provide and keep in force insurance as aforesaid, to the amount of
the insurance premium or premiums not paid or incurred by Tenant, and which
would have been payable upon such insurance, but Landlord shall also be
entitled to recover, as damages for such breech, the uninsured amount of any
loss (to the extent of any deficiency between the dollar limits of insurance
required by the provisions of this Lease and the dollar limits of the insurance
actually carried by Tenant), damages, costs and expenses of suit,including
reasonable attorney's fees, suffered or incurred by reason of damage to or
destruction of the Premises, or any portion thereof or other damage or loss
which Tenant is required to insure against hereunder, occurring during any
period when Tenant shall have failed or neglected to provide insurance as
aforesaid.
C. If Tenant desires to contest the validity, amount, propriety, or
accuracy of any Imposition, Tenant shall notify Landlord of same which notice
shall state the nature of the Imposition being contested and the grounds for
such contest. Tenant shall thereupon have the right, at its own expense, to
contest the amount, propriety, accuracy, or validity, in whole or in part, of
any Imposition by appropriate proceedings diligently conducted in good faith,
but only after payment of such Imposition, unless non- payment would not cause
a lien to be filed against title to the Premises or would not otherwise
jeopardize title to the Premises in which event, notwithstanding the provisions
of Paragraph 9(a) hereof, Tenant may postpone or defer payment of such
Imposition. Until the last two years of the then existing Term hereof, Tenant
shall have the sole right to contest Impositions; thereafter, either Landlord
or Tenant may contest the same, subject in the case of Tenant to the terms of
this Paragraph. If nonpayment of such Imposition would result in a lien being
filed (or continued) against the Premises, Tenant shall deposit with Landlord
cash or letter of credit issued by an investment grade bank in the amount of
the Impositions so contested and unpaid, together with all interest and
penalties which may accrue, in landlord's reasonable judgment, in connection
therewith, and all charges that may or might be assessed against or become a
charge on the Premises, or any portion thereof, during the pendency of such
proceedings. If, during the continuance of such proceedings, Landlord shall,
from time to time, reasonably deem the amount deposited, as aforesaid,
insufficient, Tenant shall, upon demand of Landlord, make additional deposits
of such additional sums of money or such additional letter of credit as
Landlord may reasonably request. Upon failure of Tenant to make such
additional deposits, the
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amount theretofore deposited may be applied by Landlord to the payment, removal
and discharge of such Imposition, and the interest, fines and penalties in
connection therewith, and any costs, fees (including reasonable attorney's
fees) and other liability (including reasonable costs incurred by Landlord)
accruing in any such proceedings.
Upon the termination of any such proceedings, Tenant shall pay the amount of
such Imposition or part thereof, if any, as finally determined in such
proceedings, the payment of which may have been deferred during the prosecution
of such proceedings, together with any costs, fees, including attorney's fees,
interest, penalties, fines and other liability in connection therewith. Upon
such payment, Landlord shall return all cash or letter of credit of deposited
with it in respect to the contest of such Imposition, as aforesaid along with
any interest earned thereon as a result of an investment thereof, at Tenant's
request and expense, in a Federally insured security or account. However, at
the written direction of Tenant, Landlord shall make such payment out of the
funds on deposit with Landlord and the balance, if any, shall be returned to
Tenant. Tenant shall be entitled to the refund of any Imposition, penalty,
fine and interest thereon received by Landlord which have been paid by Tenant
or which have been paid by Landlord but for which Landlord has been previously
reimbursed in full by Tenant.
At Tenant's request and sole expense, Landlord shall join in such proceedings
or permit the same to be brought in Landlord's name upon compliance with such
conditions as Landlord may reasonably require. Landlord shall not ultimately
be subject to any liability for the payment of any fees, including attorney's
fees, costs and expenses in connection with such proceedings. Tenant agrees to
pay all such fees (including reasonable attorney's fees), costs and expenses
or, on demand, to make reimbursement to Landlord for such payment. During the
time when any such cash or letter of credit is on deposit with Landlord, and
prior to the time when the same is returned to Tenant or applied against the
payment, removal or discharge of Impositions, as above provided, Tenant shall
be entitled to receive all interest paid thereon. Cash deposits shall bear
interest as above provided if the investment thereof is so requested by Tenant.
13. EMINENT DOMAIN:
A. If all or substantially all of the Premises shall be taken for
public or quasi-public purposes, or if Tenant, after any taking, determines
that such event has rendered the Premises unavailable for use or unsuitable for
restoration for continued use and occupancy in Tenant's business, then Tenant,
in lieu of
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rebuilding as contemplated by Paragraph 13C, shall, not later than 90 days
after such occurrence, deliver to Landlord (i) notice of its intention to
terminate this Lease on a date occurring not more than 95 days nor less than 60
days after such notice (the Termination Date), and (ii) a certificate by the
president or a vice president of Tenant describing the event giving rise to
such termination and stating that such event has rendered the Premises
unavailable for use or unsuitable for restoration for continued use and
occupancy in Tenant's business. Upon payment of all Fixed Rent and Additional
Rent payable through the Termination Date, this Lease shall terminate on the
Termination Date, except with respect to liabilities which arose on or prior to
the Termination Date. Landlord and Tenant may both participate in the
condemnation proceedings and no settlement thereof for an amount less than the
amount of the then applicable purchase price set forth on Exhibit C shall be
entered into without Landlord's consent. Nothing herein contained shall
prevent Tenant from pursuing its own remedies with respect to business
interruption, moving expenses, and Tenant's trade fixtures, provided that such
remedies do not result in a decrease in any award to Landlord. In the case of
termination of this Lease, condemnation proceeds shall be shared as follows:
(1) the first dollars up to the then applicable purchase price set forth on
Exhibit C thereof shall belong to Landlord, (2) the next dollars, up to an
amount equal to the present value (discounted at 9% per annum) of the excess,
if any, of fair market net rental value of the Premises immediately prior to
such condemnation for the balance of the then existing Term over the Fixed Rent
for the balance of such Term similarly discounted shall belong to Tenant, and
(3) the excess, if any, shall be shared equally by Landlord and Tenant. If the
amount of the proceeds, after deducting the cost of obtaining the same, shall
be less than the then applicable amount determined in accordance with Exhibit
C, then in lieu of the foregoing allocation, Tenant shall make and is hereby
deemed to make an irrevocable offer to purchase the Premises on the next date
for the payment of Fixed Rent (the "Termination Date") which occurs not less
than 45 days after the delivery of such notice, at a price determined in
accordance with Exhibit C hereto, plus all costs of transferring title to the
Premises to Tenant, including without limitation all transfer taxes, recording
fees and any unwind costs resulting from a prepayment of debt secured in part
by the Premises (but not including prepayment premiums or make whole amounts).
Landlord shall accept or reject such offer by notice given to Tenant not later
than thirty (30) days after receipt of Tenant's notice, and if Landlord fails
to act, it shall be presumed to have accepted the offer. If Landlord shall
have accepted such offer or is deemed to have accepted such offer, on the
Termination Date, Landlord shall convey by special warranty deed to Tenant any
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remaining portion of the Premises free of liens and encumbrances (except those
existing on the Commencement Date or thereafter created with the written
consent of the Tenant), along with the right to receive any condemnation award
to which Landlord is entitled. If Landlord rejects such offer, this Lease
shall terminate on the Termination Date except for liabilities which accrued
prior thereto.
B. If one or more Buildings are condemned or so substantially
taken as to make their continued use in Tenant's business uneconomic, but other
Buildings constituting part of the Premises will continue to be used by Tenant,
then in lieu of terminating this Lease in its entirety, Tenant may elect to
terminate this Lease only with respect to the condemned Property Units. In
that event, Tenant shall reduce the condemned Property Unit(s) to grade and be
reimbursed for the cost thereof out of the condemnation award, and Fixed Rent
allocated by Paragraph 1 hereof to the condemned Property Units shall cease to
accrue, but shall continue unabated with respect to the rest of the Premises.
The condemnation award will be shared as follows: (1) the first dollars up to
Landlord's Investment allocated by Paragraph 1 hereof to Property Units as to
which this Lease is to be terminated shall belong to Landlord, (2) the next
dollars up to the present value (discounted at 9% per annum) of the excess, if
any, of the fair market net rental value for the remainder of the then existing
Term of the condemned Property Units immediately before the condemnation, over
the Fixed Rent of such Property Units for the same Term similarly discounted
shall belong to Tenant, and (3) any excess shall be shared equally by Landlord
and Tenant. Notwithstanding the foregoing, if the amount of the condemnation
award available for distribution is less than Landlord's Investment allocation
by Paragraph 1 hereof to the Property Units as to which this Lease is to be
terminated, then this Lease shall not terminate as to such Property, but Lessee
may make an offer to purchase the affected Property Units at a price equal to
Landlord's Investment therein under the procedures and with the consequences
set forth in Paragraph 10A.
C. If this Lease shall not be terminated as provided above, then
it shall continue with no abatement or other reduction of Fixed Rent or
Additional Rent, and Tenant shall restore the Premises with all reasonable
dispatch to a complete architectural and mechanical unit as nearly as
practicable to the condition and value of the Premises immediately prior to
said taking but in any event not later than six (6) months from the date of
such taking.
D. In the event the net proceeds from such taking are not in
excess of $100,000, such taking proceeds shall be payable or
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turned over to Tenant. In the event the net proceeds are in excess of $100,000
and this Lease is not terminated pursuant to Paragraph 13A, such sum shall be
paid to or deposited with the Proceeds Trustee, in the name of the Proceeds
Trustee as trustee for Landlord and Tenant and disbursed in the manner provided
in Paragraph 11(d), except that any amount remaining after restoration of the
Premises shall be paid to Landlord.
14. DEFAULT: Events of Default.
The following events, following the expiration of the applicable cure
periods, in this Article are sometimes referred to as an "Event of Default":
(a) If default shall be made in the payment of Fixed Rent and such default
shall continue for ten (10) days after notice, provided that after
notice has been given twice in any eighteen month period, such default
in payment shall constitute an Event of Default after ten (10) days
without the giving of notice;
(b) If default shall be made in the payment of Additional Rent or in the
payment of any other sum required to be paid by Tenant under this
Lease and such default shall continue for ten (10) days after written
notice to Tenant;
(c) If default shall be made by Tenant under the provisions of Article 24
hereof relating to assignment, sublease, mortgage or other transfer of
Tenant's interest in this Lease or in the Premises or in the income
arising therefrom;
(d) If default shall be made in the observance or performance of any of
the other covenants or conditions in this Lease which Tenant is
required to observe and perform and such default shall continue for
thirty (30) days after written notice to Tenant, provided that the
time within which Tenant is permitted to cure the same shall be
extended for such period as may be necessary for the curing provided
Tenant is continuously, diligently and in good faith prosecuting such
cure;
(e) If any representation or warranty made by Tenant herein or in any
certificate, demand or request made pursuant hereto proves to be
incorrect in any material respect when made and the representation or
warranty continues to be incorrect for a period of thirty (30) days
after written notice from Landlord, or if the facts cannot be changed
so as to make the representation or warranty correct within
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such thirty day period, Tenant fails to provide Landlord with
protection (including, by way of example, additional collateral or
letters of credit) against loss arising from breach of such
representation or warranty, such protection to be satisfactory to
Landlord in its sole discretion; or
(f) If the interests of Tenant in this Lease shall be levied on under
execution or other legal process and same is not removed or stayed
within ninety (90) days;
(g) If any voluntary petition of bankruptcy or for corporate
reorganization or any similar relief shall be filed by Tenant;
(h) If any involuntary petition of bankruptcy shall be filed against
Tenant under any Federal or sTate bankruptcy or insolvency act and
shall not have been dismissed within ninety (90) days of the filing
thereof;
(i) If a receiver shall be appointed for Tenant or any of the property of
Tenant by any court and any such receiver shall not have been
discharged within ninety (90) days from the date of his appointment;
(j) If Tenant shall make an assignment for the benefit of creditors;
(k) If Tenant vacates two or more Buildings for twelve consecutive months
and fails to make a rejectable offer to purchase the Premises for the
amount determined in accordance with Exhibit C (subject to the terms
and procedures set forth in Paragraph 10(b)) by the end of such twelve
month period, or having made such offer, fails to make payment if
Landlord accepts the offer and tenders a deed;
(l) If Tenant shall admit, in writing, Tenant's inability to meet Tenant's
debts as they mature; or
(m) If a default shall occur under the Guaranty of Lease, dated as of the
date hereof, from First Financial Management Corporation to Landlord.
Landlord may treat the occurrence of any one or more of the foregoing
Events of Default as a breach of this Lease. For so long as such event of
Default continues the Landlord, at its option and with or without notice or
demand of any kind to Tenant or any other person, may have any one or more of
the remedies provided in this Article 14 or elsewhere in this lease, in
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addition to all other remedies and rights provided at law or in equity.
15. REMEDIES: In the event of any such Event of Default, Landlord may, in
addition to, and not in derogation of any remedies for any preceding breach or
covenant, with or without notice of demand (except as otherwise expressly
provided herein) and without limiting Landlord in the exercise of any right or
remedy which Landlord may have by reason of such default or breach:
A. Immediately or at any time thereafter while such Event of
Default continues, mail a notice of termination addressed to Tenant and proceed
pursuant to and with due process of law, to repossess the same as of Landlord's
former estate without prejudice to any remedies which might otherwise be used
for arrears of rent or prior to breach of covenant, and upon such notice as
aforesaid this Lease shall terminate, but Tenant shall remain liable for its
default hereunder as hereinafter provided. Tenant shall have the right to cure
any default until the expiration of the applicable cure period, if any,
following notice by Landlord, as specified above. Where Landlord has given
notice as provided for above, no further notice shall be required to effectuate
a termination of the Lease, which termination shall occur automatically unless
the default is cured within the time periods provided.
B. Terminate Tenant's right to possession of the Premises by
court order or any lawful means, in which case Tenant's right to possession
under this Lease shall terminate, and Tenant shall immediately surrender
possession of the Premises to Landlord. In such event Landlord shall be
entitled to recover from Tenant all damages incurred by Landlord by reason of
Tenant's default, the cost of recovering possession of the Premises; reasonable
expenses of reletting, including renovation and alteration of the Premises
necessary to put them in the condition required by Paragraph 8 hereof;
reasonable attorney's fees and any real estate commissions actually paid; the
worth at the time of award by the court having jurisdiction thereof of the
amount, if any but not less than zero, by which the unpaid rent for the balance
of the term after the time of such award exceeds the amount of such rental loss
for the same period that Tenant proves could be reasonably avoided; and that
portion of any leasing commissions paid by Landlord applicable to the unexpired
Term of this Lease.
C. Maintain Tenant's right to possession, in which case this
Lease shall continue in effect whether or not Tenant shall have abandoned the
Premises. In such event, Landlord shall be entitled to enforce all of
Landlord's rights and remedies under
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this Lease, including the right to recover the Rent as it becomes due
hereunder.
D. Pursue any other remedy now or hereafter available to Landlord
under the laws or judicial decisions of the State of Illinois. Unpaid
installments of Rent and other unpaid monetary obligations of Tenant under the
terms of this Lease shall bear interest from the date due until paid at the
Overdue Rate.
E. Tenant hereby acknowledges that late payment by Tenant to
Landlord of Fixed Rent, Additional Rent and other sums due under this Lease
will cause Landlord to incur costs not contemplated by this Lease, the exact
amount of which will be extremely difficult to ascertain. Such costs include,
but are not limited to, processing and accounting charges and late charges
which may be imposed on Landlord by the terms of any mortgage or trust deed
covering the Premises. Accordingly, if any installment of Fixed Rent or any
other sum due to Landlord from Tenant shall not have been received by Landlord
or Landlord's designee within fifteen (15) days after such amount shall be due,
then, without any requirement for notice to Tenant, Tenant shall pay to
Landlord a late charge equal to four percent (4%) of such overdue amount,
together with interest on such overdue amount at the Overdue Rate. The parties
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, nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder; provided
that nothing contained herein shall relieve Landlord of a duty to mitigate
damages under applicable law.
16. SUBORDINATION:
(a) SUBORDINATION, NON-DISTURBANCE. Tenant agrees at any time hereafter,
and from time to time on demand of Landlord, to promptly execute and deliver to
Landlord any instruments, releases or other documents that may be reasonably
required for the purpose of subjecting and subordinating this Lease to the lien
of any mortgage, deed of trust, security instrument, ground or underlying lease
or other document of like nature (hereinafter collectively referred to as
"Mortgage") which at any time may be placed upon the Premises, or any portion
thereof, by Landlord, and to any replacements, renewals, amendments,
modifications, extensions or refinancing thereof, and to each and every advance
made under any Mortgage. It is agreed, nevertheless, that so long as there
exists no Default, such subordination agreement or other instrument, release or
document (herein "Subordination
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Agreement") shall not interfere with, hinder or reduce Tenant's right to quiet
enjoyment under this Lease, nor the right of Tenant to continue to occupy the
Premises, and all portions thereof, and to conduct its business thereon in
accordance with the covenants, conditions, provisions, terms and agreements of
this Lease. Such Subordination Agreement shall provide for a nondisturbance of
Tenant's rights hereunder provided Tenant attorns to the holder of such
Mortgage. The lien of any such Mortgage shall not cover Tenant's Trade
Fixtures or other personal property located in or on the Demised Premises.
(b) MORTGAGEE PROTECTION CLAUSE. In the event of any act or omission of
Landlord constituting a default by Landlord, Tenant shall not exercise any
remedy until Tenant has given Landlord and any mortgagee of the Premises a
thirty (30) day prior written notice of such act or omission, and until a
reasonable period of time (e.g., 30 days) to allow Landlord or the mortgagee to
remedy such act or omission shall have elapsed following the giving of such
notice. However, if act or omission cannot, with due diligence and in good
faith, be remedied within such thirty (30) day period, the Landlord and the
mortgagee shall be allowed such further period of time as may be reasonably
necessary provided that it commence remedying the same with due diligence and
in good faith within said thirty (30) day period. Nothing herein contained
shall be construed or interpreted as requiring any mortgagee to remedy such act
or omission.
(c) ATTORNMENT. If any mortgagee shall succeed to the rights of Landlord
under this Lease or to ownership of the Premises, whether through possession or
foreclosure or the delivery of a deed to the Premises in lieu of foreclosure,
then, upon the written request of such mortgagee so succeeding to landlord's
rights hereunder, provided such mortgagee assumes, in writing, the obligations
of Landlord hereunder accruing on and after the date such mortgagee acquired
title to the Premises, Tenant shall attorn to and recognize such mortgagee as
Tenant's landlord under this Lease, and shall promptly execute and deliver any
instrument that such mortgagee may reasonably request to evidence such
attornment (whether before or after making of the Mortgage). In the event of
any other transfer of Landlord's interest hereunder, upon the written request
of the transferee and Landlord, provided such transferee assumes, in writing,
the obligations of Landlord hereunder accruing on and after the date of such
transfer, Tenant shall attorn to and recognize such transferee as Tenant's
landlord under this lease and shall promptly execute and deliver any instrument
that such transferee and Landlord may reasonably request to evidence such
attornment.
(d) Upon ten business days advance written notice, Tenant
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agrees to execute, acknowledge and deliver a document substantially in the form
of the Assignment of Lease dated as of the date hereof from Landlord to a
Mortgagee and consented to by Tenant, with such changes therein as may be
reasonably requested by an institutional lender, provided no such change alters
the rights of Tenant hereunder.
17. LANDLORD'S RIGHT OF ENTRY: In addition to rights set forth in
Paragraph 25D hereof, upon reasonable notice, from time to time during normal
business hours, such persons as Landlord or any assignee of Landlord shall
designate shall have the right to enter upon the Premises and to inspect same,
exhibit the Premises to prospective purchasers and mortgagees, and examine
Tenant's books and records pertaining to the Premises, insurance policies,
certificates of occupancy and other documents, records and permits in Tenant's
possession with respect to the Premises, all of which shall be customary and
adequate and reasonably satisfactory to Landlord, provided, however, that such
activities by Landlord shall be conducted in such a manner as not to interfere
with the conduct of business by Tenant at the Premises. If no Event of Default
exists hereunder, any such inspections shall be at the expense of Landlord. If
an Event of Default exists hereunder, such inspections shall be at the
reasonable expense of Tenant. During the final one (1) year of the Term,
Landlord shall be entitled to place customary "For Rent" or "For Sale" signs on
the Premises. Such persons as Landlord or any assignee of Landlord shall
designate shall also have the right to enter upon the Premises for the purpose
of making repairs which Landlord is authorized to make under the provisions of
this Lease, provided.
18. NOTICES: Notices, statements, demands, or other communications
required or permitted to be given, rendered or made by either party to the
other pursuant to this Lease or pursuant to any applicable law or requirement
of public authority, shall be in writing (whether or not so stated elsewhere in
this Lease) and shall be deemed to have been properly given, rendered or made,
when received by overnight delivery or overnight courier delivery or facsimile
transmission with a confirmation copy sent by overnight delivery or by
overnight courier delivery addressed to the other parties as follows:
To Landlord: TriNet Essential Facilities X, Inc.
Four Embarcadero Center, Suite 3150
San Francisco, California 94111
Attention: Mark Whiting, President
Fax: (415)391-6259
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With a copy (which shall not constitute notice) to:
TriNet Corporate Realty Trust, Inc.
Four Embarcadero Center, Suite 3150
San Francisco, California 94111
Attention: Charles S. Swanson
Fax: (415)391-6259
With a copy (which shall not constitute notice) to:
Day, Berry & Howard
260 Franklin Street
Boston, Massachusetts
Attention: Lewis A. Burleigh, Esq.
Fax: (617) 345-4745
To Tenant:
FIRST HEALTH Strategies, Inc.
c/o First Financial Management Corporation
3 Corporate Square, Suite 700
Atlanta, Georgia 30319
Attention: Legal Department
Fax: (404)636-7632
With a copy (which shall not constitute notice) to:
Sutherland, Asbill & Brennan
999 Peachtree Street, N.E.
Atlanta, Georgia 30309
Attention: H. Edward Hales, Jr., Esq.
Fax: (404)853-8806
Either party may, by notices as aforesaid, designate a different address for
addresses for notice, statements, demands or other communications intended for
it.
19. STATUS OF LEASE; FINANCIAL DATA:
Upon written request of either party, the other party agrees, within twenty
(20) days, to deliver a written status report of this Lease, in the form
provided on attached Exhibit D, provided that neither party shall be obligated
to provide more than four (4) such status reports per year.
20. MECHANICS' LIENS:
LIENS AND RIGHT OF CONTEST . (a) Tenant shall not suffer or permit
any mechanic's lien or other lien to be filed against the Premises, equipment or
materials supplied or claimed to have
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been supplied to the premises at the request of Tenant, or anyone holding the
Premises, or any portion thereof, through or under Tenant. If any such
mechanic's lien or other lien shall at any time be filed against the Premises,
or any portion thereof, Tenant shall cause the same to be discharged of record
within thirty (30) days after the date of filing the same. However, in the
event Tenant desires to contest the validity of any lien it shall (i) on or
before thirty (30) days prior to the due date thereof, notify Landlord, in
writing, that Tenant intends to so contest same; (ii) on or before the due date
thereof, if the amount in controversy exceeds $100,000 or if any mortgagee or
Trust Deed holder of Landlord so requires, deposit with Landlord security (in
form and content reasonably satisfactory to Landlord or Landlord's mortgagee or
trust deed holder) for the payment of the full amount of such lien and, from
time to time, deposit additional security or indemnity so that, at all times,
adequate security or indemnity will be available for the payment of the full
amount of the lien together with all interest, penalties, costs and charges
accrued or accumulated thereon.
If Tenant complies with the foregoing, and Tenant continues, in good faith, to
contest the validity of such lien by appropriate legal proceedings which shall
operate to prevent the collection thereof and the sale or forfeiture of the
Premises, or any part thereof, to satisfy the same, Tenant shall be under no
obligation to pay such lien until such time as the same has been decreed, by
court order, to be a valid lien on the Premises. Any surplus deposit retained
by Landlord, after the payment of the lien shall be repaid to Tenant. Provided
that nonpayment of such lien does not cause Landlord to be in violation of any
of its contractual undertakings, Landlord agrees not to pay such lien during
the period of Tenant's contest. However, if Landlord pays for the discharge of
a lien or any part thereof from funds of Landlord, any amount paid by Landlord,
together with all costs, fees and expenses in connection therewith (including
reasonable attorney's fees of Landlord) together with interest thereon at the
Overdue Rate, shall be repaid by Tenant to Landlord on demand by Landlord.
Tenant shall indemnify and defend Landlord against and save Landlord and the
Premises, and any portion thereof, harmless from and against all losses, costs,
damages, expenses, liabilities, suits, penalties, claims, demands and
obligations, including, without limitation, reasonable attorney's fees,
resulting from the assertion, filing, foreclosure or other legal proceedings
with respect to any such mechanic's lien or other lien or the attempt by Tenant
to discharge same as above provided.
(b) All materialmen, contractors, artisans, mechanics, laborers and any
other person now or hereafter furnishing any labor,
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services, materials, supplies or equipment to Tenant with respect to the
Premises, or any portion thereof, are hereby charged with notice that they must
look exclusively to Tenant to obtain payment for the same. Notice is hereby
given that Landlord shall not be liable for any labor, services, materials,
supplies, skill, machinery, fixtures or equipment furnished or to be furnished
to Tenant upon credit, and that no mechanic's lien or other lien for any such
labor, services, materials, supplies, machinery, fixtures or equipment shall
attach to or affect the estate or interest of Landlord in and to the Premises,
or any portion thereof.
(c) Tenant shall not create, permit or suffer, and, subject to the
provisions of Paragraph 21(a) hereof, shall promptly discharge and satisfy of
record, any other lien, encumbrance, charge, security interest, or other right
or interest which, as a result of Tenant's action or inaction contrary to the
provisions hereof, shall be or become a lien, encumbrance, charge or security
interest upon the Premises, or any portion thereof, or the income therefrom.
21. END OF TERM: (a) Upon the expiration or earlier termination of the
Term of this Lease, Tenant shall surrender the Premises to Landlord in the same
condition and suitable for the same use in which the Premises was originally
received from Landlord except as repaired, rebuilt or altered as required or
permitted by this Lease (and/or except for such casualty damage as Tenant shall
not be required to repair or restore hereunder), and except for normal wear and
tear, and shall surrender all keys to the Premises to Landlord at the place
then fixed for the payment of Fixed Rent and shall inform Landlord of all
combinations on locks, safes and vaults, if any. Except as otherwise provided
herein, Tenant shall at such time remove all of its property (including
Tenant's trade fixtures) therefrom and all alterations and improvements placed
thereon by Tenant if so requested by Landlord. Tenant shall repair any damage
to the Premises caused by such removal, and any and all such property not so
removed when required shall, at Landlord's option, become the exclusive
property of Landlord or be disposed of by Landlord, at Tenant's cost and
expense, without further notice to or demand upon Tenant.
(b) If the Premises are not surrendered as above set forth, Tenant
shall indemnify, defend and hold Landlord harmless from and against loss or
liability resulting from the delay by Tenant in so surrendering Premises,
including, without limitation any claim made by any succeeding occupant founded
on such delay. Tenant's obligation to observe or perform this covenant shall
survive the expiration or other termination of this Lease. In
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addition to the foregoing, and in addition to the Additional Rent, Tenant shall
pay to Landlord a sum equal to 150% of the Fixed Rent herein provided during
each month or portion thereof for which Tenant shall remain in possession of
the Premises or any part thereof after the termination of the Term or of
Tenant's rights of possession, whether by lapse of time or otherwise. The
provisions of this Paragraph 22(b) shall not be deemed to limit or constitute a
waiver of any other rights or remedies of Landlord provided herein at law or at
equity.
(c) All property of Tenant not removed on or before the last day of
the term of this Lease shall be deemed abandoned. Tenant hereby appoints
Landlord its agent to remove all property of Tenant from the Premises upon
termination of this Lease and to cause its transportation and storage for
Tenant's benefit, all at the sole cost and risk of Tenant and Landlord shall
not be liable for damage, theft, misappropriation or loss thereof and Landlord
shall not be liable in any manner in respect thereto. Tenant shall pay all
costs and expenses of such removal, transportation and storage. Tenant shall
reimburse Landlord upon demand for any expenses incurred by Landlord with
respect to removal or storage of abandoned property and with respect to
restoring said Premises to good order, condition and repair.
(d) Except for surrender upon the expiration or earlier
termination of the term hereof, no surrender to Landlord of this Lease or of
the Leased Property shall be valid or effective unless agreed to and accepted
in writing by Landlord.
22. ALTERATIONS:
(a) At any time during the Term of this Lease, Tenant shall have
the right without Landlord's consent to make alterations in and to the
Premises, provided such alterations do not adversely affect the value of the
Premises and are not estimated to cost more than $200,000.
(b) In the case of alterations exceeding the limits of clause (a),
Tenant shall submit to Landlord plans and specifications showing the nature and
extent of such alterations. Landlord shall have a period of thirty (30) days,
time being of the essence, to approve such plans and specifications, such
approval not to be unreasonably withheld.
If Landlord has not responded in said 30 day period, Tenant may deliver to
Landlord a duplicate notice, prominently marked to indicate that failure to
respond within ten (10) days shall constitute approval of the plans, and if
Landlord shall fail to respond within ten (10) days of its receipt of such
duplicate
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notice, the plan shall be deemed approved by Landlord.
If Landlord approves or is deemed to have approved such plans and
specifications, Tenant shall have the right to have such work performed as
approved. If Landlord disapproves such alterations, Tenant shall not perform
the work, but may resubmit plans and specifications designed to meet the
objections raised by Landlord. Prior to commencing work, Tenant shall obtain
at its expense all necessary permits and builder's risk insurance in an amount
reasonably satisfactory to Landlord. Paragraph 21 hereof is applicable in
connection with Alterations. Upon completion of any alteration, Tenant shall
deliver to Landlord updated plans and specifications reflecting such
alterations and a final certificate of occupancy issued subsequent to the
completion of the Alteration. Landlord shall have title to and ownership of
all alterations, and all alterations shall be subject to the provisions of this
Lease. All such alterations shall be at Tenant's expense. All such
alterations referred to in this Paragraph shall be referred to herein as
"Alterations." In any event, the making of Alterations shall be expeditiously
completed in a god and workmanlike manner and in compliance with all applicable
laws, rules, regulations, ordinances and restrictions then in effect.
23. MEMORANDUM OF LEASE: The parties agree to promptly execute a
Memorandum of Lease in recordable form and either of the parties shall have the
right, without notice to the other party, to record such Memorandum of Lease.
24. SUBLETTING/ASSIGNMENT: (a) Tenant shall not assign its interest in
this Lease, but shall have the right, without Landlord's consent, to sublet all
or any portion of the Premises. Prior to an Event of Default, Tenant shall be
entitled to retain all sublease rents. Effective upon the occurrence and
during the continuance of an Event of Default, all rents payable under such
subleases are hereby assigned to Landlord. A copy of any sublease fully
executed and acknowledged by Tenant and sublessee shall be delivered to
Landlord at the time of its execution. No such sublease shall be deemed to
relieve Tenant of any liability for the due and faithful performance of the
terms of this Lease and Tenant shall continue to be directly and primarily
liable hereunder, and not as a guarantor or surety. Tenant shall not assign,
mortgage, pledge, transfer or otherwise encumber of dispose of this Lease, or
any interest therein, or in any manner assign, mortgage, pledge, transfer or
otherwise encumber or dispose of its interest or estate in the Premises, or any
portion thereof, without obtaining Landlord's prior written consent.
Notwithstanding the foregoing, provided Tenant gives
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written notice (hereinafter referred to as "Merger Notice") to Landlord,
Landlord's consent shall not be required for the transfer of all, or
substantially all, of Tenant's rights under the terms of this Lease to (i) an
entity which holds the controlling ownership interest of Tenant; (ii) to an
entity which Tenant holds (and continues to hold during the Term) the
controlling ownership interest; (iii) to an entity which is wholly owned by an
entity which holds the controlling ownership interest of Tenant; or (iv) to the
resultant entity of a merger or consolidation with Tenant.
(b) Notwithstanding anything contained in this Lease to the contrary and
notwithstanding any consent by Landlord to any sublease of the Premises, or any
portion thereof, or to any assignment of this Lease or of Tenant's interest or
estate in the Premises, no sublessee shall assign its sublease nor further
sublease the Premises, or any portion thereof, and no assignee shall further
assign its interest in this lease or its interest or estate in the Premises, or
any portion thereof, nor sublease the Premises, or any portion thereof, without
Landlord's prior written consent in each and every instance which consent shall
not be unreasonably withheld. No such assignment or subleasing shall relieve
Tenant from any of Tenant's obligations in this Lease contained.
(c) Tenant's failure to comply with all of the foregoing provisions shall
(whether or not Landlord's consent is required under this Article), at
Landlord's option, render any purported assignment or subletting null and void
and of no force and effect.
25. HAZARDOUS MATERIAL:
A. Tenant (i) shall comply, and cause the Premises to comply,
with all Environmental Laws (as hereinafter defined) applicable to the Premises
(including the making of all submissions to governmental authorities required
by Environmental Law and the carrying out of any remediation program specified
by such authority) (ii) shall prohibit the use of the Premises for the
generation, manufacture, refinement, production, or processing of any Hazardous
Material (as hereinafter defined) or for the storage, handling, transfer or
transportation of any Hazardous Material (other than in connection with the
operation, business and maintenance of the Premises and in commercially
reasonable quantities as a consumer thereof and supplier of consumer products
and in compliance with Environmental Laws), (iii) shall not permit to remain,
install or permit the installation on the Premises of any surface impoundments,
underground storage tanks, or friable asbestos-containing
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materials and (iv) shall cause any alterations of the Premises to be done in a
way so as to not expose in an unsafe manner the persons working on or visiting
the Premises to Hazardous Materials and in connection with any such alterations
shall remove any Hazardous Materials present upon the Premises which are not in
compliance with Environmental Laws or which present a danger to persons working
on or visiting the Premises.
B. "Environmental Laws" means the Resource Conservation and
Recovery Act of 1976, as amended, 42 U.S.C. Section 6901, et seq. (RCRA), the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended by the Superfund Amendments and Reauthorization Act of 1986, 42.
U.S.C. Section 9601 et seq. (CERCLA), the Toxic Substance Control Act, as
amended, 15 U.S.C. Section 2601 et seq., the Federal Insecticide, Fungicide,
Rodenticide Act, as amended, 7 U.S. Section 136 et seq., Utah Indoor Clean Air
Act, 28381 Utah Code, et seq., and all applicable federal, state and local
environmental laws, ordinances, rules and regulations, as any of the foregoing
may have been or may be from time to time amended, supplemented or supplanted,
and any other federal, state or local laws, ordinances, rules and regulations,
now or hereafter existing relating to regulations or control of Hazardous
Material or materials. The term "Hazardous Materials" as used in this Lease
shall mean substances defined as "hazardous substances", "hazardous materials",
"hazardous wastes" or "toxic substances" in any applicable federal, state or
local statute, rule, regulation or determination, including but not limited to
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 USC Section 9601, et seq.; the Hazardous Materials
Transportation Act, 49 USC, Section 1801, et seq.; the Resource, Conservation
and Recovery Act, 42 USC Section 6901, et seq.; and, asbestos, pcb's,
radioactive substances, methane, volatile hydrocarbons, petroleum or
petroleum-derived substances or wastes, radon, industrial solvents or any other
material as may be specified in applicable law or regulations.
C. Except for liability resulting from or arising out of the
negligent or willful act of Landlord or its Mortgagee or their agents on or
about the Premises or their successors and assigns, Tenant agrees to protect,
defend, indemnify and hold harmless Landlord, its directors, officers,
employees and agents, and any successors to Landlord's interest in the chain of
title to the Premises, their direct or indirect partners, directors, officers,
employees, and agents, from and against any and all liability, including all
foreseeable and all unforeseeable damages including but not limited to
attorney's and consultant's fees, fines, penalties and civil or criminal
damages, directly or indirectly arising out of the use, generation, storage,
treatment, release, threatened release, presence or disposal of
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Hazardous Materials from, on, at, to or under the Premises prior to or during
the Term of this Lease, and including, without limitation, the cost of any
required or necessary repair, response action, remediation, investigation,
cleanup or detoxification and the preparation of any closure or other required
plans, whether such action is required or necessary prior to or following
transfer of title to the Premises. This agreement to indemnify and hold
harmless shall be in addition to any other obligations or liabilities Tenant
may have to Landlord at common law under all statutes and ordinances or
otherwise, and shall survive following the date of expiration or earlier
termination of this Lease. Tenant expressly agrees that the representations,
warranties and covenants made and the indemnities stated in this Lease are not
personal to Landlord, and the benefits under this Lease may be assigned to
subsequent parties in interest to the chain of title to the Premises, which
subsequent parties in interest may proceed directly against Tenant to recover
pursuant to this Lease. Tenant, at its expense, may institute appropriate
legal proceedings with respect to environmental matters of the type specified
in this Paragraph C or lien for such environmental matters, not involving
Landlord or its Mortgagee as a defendant (unless Landlord or its Mortgagee is
the alleged cause of the damage), conducted in good faith and with due
diligence, provided that such proceedings shall not in any way impair the
interests of Landlord or its Mortgagee under this Lease or contravene the
provisions of any First Mortgage. Counsel to Tenant in such proceedings shall
be reasonably approved by Landlord if Landlord is a defendant in the same
proceeding. Landlord shall have the right to appoint co-counsel, which
co-counsel will cooperate with Tenant's counsel in such proceedings. The fees
and expenses of such co-counsel shall be paid by Landlord, unless such
co-counsel are appointed because the interests of Landlord and Tenant in such
proceedings, in Landlord's reasonable judgment, are or have become adverse.
D. Tenant, promptly upon the written request of Landlord from
time to time, but not more than once in any calendar year unless an Event of
Default has occurred and is continuing, shall permit such persons as Landlord
or any assignee of Landlord may designate and (unless an Event of Default has
occurred and is continuing) approved by Tenant (including their liability
insurance coverage), which approval shall not be unreasonably withheld or
delayed ("Site Reviewers") to visit the Premises from time to time and perform
Environmental site investigations and assessments ("Site Assessments") on the
Premises for the purpose of determining whether there exists on the Premises
any environmental condition which may result in any liability, cost or expense
to Landlord or any other owner or occupier of the Premises relating to
Hazardous Material; provided, however, that
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any such Site Reviewer in performing any Site Assessment shall not unreasonably
interfere with the operations or business of Tenant on the Premises. Landlord
will cause any such Site Reviewer to repair any damage to the Premises
resulting from such Site Reviewer's activities. Such Site Assessments may
include both above and below the ground testing for environmental damage or the
presence of Hazardous Material on the Premises and such other tests on the
Premises as may be necessary to conduct the Site Assessments in the opinion of
the Site Reviewers. Tenant shall supply to the Site Reviewers such historical
and operational information regarding the Premises as may be reasonably
requested by the Site Reviewers to facilitate the Site Assessments (other than
information previously supplied in writing to Landlord by Tenant) and shall
make available for meetings with the Site Reviewers appropriate personnel
having knowledge of such matters. The cost of performing and reporting all
Site Assessments shall be paid by Landlord unless an Event of Default has
occurred and is continuing or unless the Site Reviewers discover an
environmental condition caused by Tenant causing the Premises to be in material
noncompliance with applicable Environmental Laws, in either of which events
such cost will be paid by Tenant within thirty (30) days after demand by
Landlord with interest to accrue at the Overdue Rate. Landlord, promptly after
written request by Tenant and payment by Tenant as aforesaid, shall deliver to
Tenant copies of reports, summaries or other compilations of the results of
such Site Assessments. Tenant's sole remedy for Landlord's breach of the
preceding sentence shall be a mandatory injunction, and not a termination of
this Lease or a withholding or reduction of rent.
E. Tenant shall notify Landlord in writing, promptly upon
Tenant's learning thereof, of any:
(a) notice or claim to the effect that Tenant is or may be liable
to any person as a result of the release or threatened release of any Hazardous
Material into the environment on or about the Premises;
(b) notice that Tenant is subject to investigation by any
governmental authority evaluating whether any remedial action is needed to
respond to the release or threatened release of any Hazardous Material into the
environment on or about the Premises;
(c) notice that the Premises is subject to an environmental lien;
and
(d) notice of violation to Tenant or awareness by Tenant of a
condition which might reasonably result in a notice of violation of any
applicable Environmental Law that could have a
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material adverse effect upon the Premises.
26. MISCELLANEOUS PROVISIONS:
A. This Lease and all of the covenants and provisions hereof
shall inure to the benefit of, and be binding upon, the parties hereto and the
heirs, personal representatives, successors and assigns of the parties.
B. The capitalized and underlined titles appearing in this Lease
are for reference only and shall not be considered a part of this lease or in
any way to modify, amend or affect the provisions thereof.
C. This Lease contains the complete agreement of the parties with
reference to the leasing of the Premises.
D. Any provision or provisions of this Lease which shall prove to
be invalid, void or illegal shall in no way affect, impair or invalidate any
other provision hereof, and the remaining provisions hereof shall nevertheless
remain in full force and effect.
E. Whenever Tenant is required to make payments to Landlord other
than Fixed Rent, such payments shall constitute Additional Rent. Whenever
Tenant is required to make payment for insurance or taxes, Landlord shall have
the right after fifteen (15) days notice to Tenant, to make the payment for
Tenant and to recover such sums from Tenant as Additional Rent plus interest on
such sums at the Overdue Rate.
F. This Lease may be executed in one or more counterparts, each
of which shall be an original, and all of which shall constitute one and same
instrument.
G. The term "Landlord" as used in this Lease shall mean only the
owner or owners at the time in question of the fee title, and in the event of
any transfer of such title or interest, Landlord named in this Lease (and in
case of any subsequent transfers then the grantor) shall be relieved from and
after the date of such transfer of all liability as respects Landlord's
obligations thereafter to be performed, provided that any funds in the hands of
Landlord or the then grantor at the time of such transfer, in which Tenant has
an interest, shall be delivered to the grantee. The obligations contained in
this Lease to be performed by Landlord shall, subject as aforesaid, be binding
on Landlord's successors and assigns, only during their respective periods of
ownership.
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H. This Lease shall be governed by and construed and enforced in
accordance with and subject to the laws of the State of Utah.
I. Anything contained herein to the contrary notwithstanding, any
claim based on or in respect of any liability of Landlord under this Lease
shall be enforced only against the Premises and not against any other assets,
properties or funds of (a) Landlord or any director, officer, shareholder,
general partner, limited partner, or direct or indirect partners, employee or
agent of Landlord or its general partners (or any legal representative, heir,
estate, successor or assign of any thereof), (b) any predecessor or successor
partnership or corporation (or other entity) of Landlord or its general
partners, either directly or through Landlord or its predecessor or successor
partnership or corporation (or other entity) of Landlord or its general
partners, and (c) any other person or entity. The foregoing provision is not
intended to deprive Tenant of any injunctive relief to which it may be
entitled.
J. Without the written approval of Landlord and Tenant, no person
other than Landlord (including its direct and indirect partners), Mortgagee,
Tenant and their respective successors and assigns shall have any rights under
this Lease.
K. Where the character or amount of any asset or liability or
item of income or expense is required to be determined or any consolidation or
other accounting computation is required to be made for the purposes of this
Lease, it shall be done in accordance with generally accepted accounting
principles at the time in effect, to the extent applicable, except where such
principles are inconsistent with the express provisions of this Lease.
L. There shall be no merger of this Lease or the leasehold estate
created hereby by reason of the fact that the same Person may acquire, own or
hold, directly or indirectly, in whole or in part, (a) this Lease or the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate, and (b) the fee estate in the Premises.
M. Notwithstanding anything contained herein to the contrary, the
interests of Tenant and Landlord under this Lease are expressly intended by the
parties hereto to be construed as a leasehold estate held by Tenant and a fee
simple estate held by Landlord, and not as an estate for years held by Tenant
or a remainder interest held by Landlord.
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IN WITNESS WHEREOF, the parties have hereunto set their hands under
seal on the day and year first above written.
TRINET ESSENTIAL FACILITIES X, INC.
Landlord
By: Charles S. Swanson
--------------------------------
Senior Vice President
FIRST HEALTH STRATEGIES, INC.
By: Barry W. Burt
--------------------------------
Name: Barry W. Burt
Title: Vice President
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ANNEX I
DEFINITIONS
The following terms shall have the following meanings for all purposes
of this Lease and shall be equally applicable to both the singular and plural
forms of the terms herein defined.
"Additional Rent" means all amounts, liabilities and obligations other than
Fixed Rent which Tenant assumes or agrees to pay under this Lease to Landlord
or others.
"Closing" is defined in Paragraph 3B of this Lease.
"Commencement Date" is defined in Paragraph 3B of this Lease.
"Event of Default" is defined in Paragraph 14 of this Lease.
"First Mortgage" or "Mortgage" shall mean a first mortgage on the Premises
given by Landlord to the Mortgagee to secure a loan financing or refinancing
the acquisition of the Premises.
"First Mortgage Note" shall mean a promissory note evidencing a loan secured by
a First Mortgage.
"First Renewal Term" is defined in Paragraph 3C of this Lease.
"Fixed Rent" is defined in Paragraph 4 of this Lease.
"Imposition" means the various tax and other charges referred to in Paragraph
9.
"Initial Term" is defined in Paragraph 3A of this Lease.
"Landlord" is defined in the first paragraph of this Lease.
"Lease" is defined in the first sentence of this Lease.
"Lease Expiration Date" is defined in Paragraph 3A of this Lease.
"Lease Year" means each twelve-month period beginning on each December 1 during
the Term.
"Mortgagee" shall mean any first mortgagee with respect to the Premises.
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"Overdue Rate" means a rate equal to fifteen percent (15) per annum (or the
maximum rate allowed by law if such rate is less than fifteen percent (15%) per
annum).
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, trustee(s) of a trust, unincorporated
organization, or government or governmental authority, agency or political
subdivision thereof.
"Permitted Encumbrances" means:
(a) Any liens for taxes, assessments and other governmental charges and
any liens of mechanics, materialmen and laborers for work or services
performed or materials furnished in connection with the Premises,
which are not due and payable;
(b) The easements, rights-of-way, encroachments, encumbrances, restrictive
covenants or other matters in the title set forth in Schedule B to the
policy of owners title insurance (or commitments therefore) delivered
to and accepted by Landlord with respect to the Premises in connection
with the delivery of this Lease as shown on Exhibit E attached hereto;
(c) The Lease and the rights of Tenant under this Lease;
(d) The lien of the Deed of Trust dated as of December 9, 1994, from
Landlord to Bankers Trust Company, as trustee, and any rights granted
thereby; and
"Premises" is defined in Paragraph 1 of this Lease.
"Proceeds Trustee" is defined in Paragraph lID.
"Rent" means Fixed Rent and Additional Rent.
"Renewal Term" is defined in Paragraph 3C of this Lease.
"Renewal Term Commencement Date" is defined in Paragraph 3C of this Lease.
"Renewal Term Expiration Date" is defined in Paragraph 3C of this Lease.
"Second Renewal Term" is defined in Paragraph 3C of this Lease.
"Site Reviewers" is defined in Paragraph 25E of this Lease.
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"Site Assessments" is defined in Paragraph 25E of this Lease.
"Term" means the Initial Term, together with any Renewal Terms.
"Third Renewal Term" is defined in Paragraph 3C of this Lease.
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Exhibit B
Rent Payments
1. [Intentionally omitted.]
2. Each installment of Fixed rent payable for the Premises during
that portion of the Initial Term commencing on December 1, 1994 and ending on
and including November 30, 1999 is $103,753.83 and said installments are
payable on December 1, 1994 and thereafter on the first day of each month to
and including November 1, 1999.
3. Each installment of Fixed Rent payable for the Premises during
that portion of the Initial Term commencing on December 1, 1999 and ending on
and including November 30, 2004 is $108,426.58 and said installments are
payable on December 1, 1999 and thereafter on the first day of each month to
and including November 1, 2004.
4. Each installment of Fixed rent payable for the Premises during
that portion of the Initial Term commencing on December 1, 2004 and ending on
and including November 30, 2009, is $122,674.75 and said installments are
payable on December 1, 2004 and thereafter on the first day of each month to
and including November 1, 2009.
5. Each installment of Fixed Rent payable for the Premises during
the First Renewal Term is $132,488.75 and said installments are payable on
December 1, 2009 and thereafter on the first day of the month to and including
November 1, 2014.
6. Each installment of Fixed Rent payable for the Premises during
the Second Renewal Term is $143,087.83 and said installments are payable on
December 1, 2014 and on the first day of each month thereafter to and including
November 1, 2019.
7. Each installment of Fixed Rent payable for the Premises during
the Third Renewal Term is $154,534.92 and said installments are payable on
December 1, 2019 and on the first day of each month thereafter to and including
November 1, 2024.
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Exhibit C
The applicable amount determined in accordance with Schedule C shall be the
amount set forth opposite the date on which such determination is made, or if
such date is not listed below, then on the next preceding date.
December 1, 1994 $12,900,000
January 1, 1995 $12,894,413
February 1, 1995 $12,888,793
March 1, 1995 $12,883,141
April 1, 1995 $12,877,455
May 1, 1995 $12,871,736
June 1, 1995 $12,865,984
July 1, 1995 $12,860,199
August 1, 1995 $12,854,380
September 1, 1995 $12,848,526
October 1, 1995 $12,842,639
November 1, 1995 $12,836,717
December 1, 1995 $12,830,761
January 1, 1996 $12,824,770
February 1, 1996 $12,818,744
March 1, 1996 $12,812,683
April 1, 1996 $12,806,586
May 1, 1996 $12,800,454
June 1, 1996 $12,794,286
July 1, 1996 $12,788,082
August 1, 1996 $12,781,842
September 1, 1996 $12,775,566
October 1, 1996 $12,769,253
November 1, 1996 $12,762,903
December 1, 1996 $12,756,516
January 1, 1997 $12,750,092
February 1, 1997 $12,743,631
March 1, 1997 $12,737,131
April 1, 1997 $12,730,594
May 1, 1997 $12,724,019
June 1, 1997 $12,717,405
July 1, 1997 $12,710,753
August 1, 1997 $12,704,062
September 1, 1997 $12,697,332
October 1, 1997 $12,690,562
November 1, 1997 $12,683,753
December 1, 1997 $12,676,905
January 1, 1998 $12,670,016
February 1, 1998 $12,663,087
March 1, 1998 $12,656,118
April 1, 1998 $12,649,108
May 1, 1998 $12,642,058
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June 1, 1998 $12,634,966
July 1, 1998 $12,627,833
August 1, 1998 $12,620,658
September 1, 1998 $12,613,441
October 1, 1998 $12,606,183
November 1, 1998 $12,598,882
December 1, 1998 $12,591,538
January 1, 1999 $12,584,151
February 1, 1999 $12,576,722
March 1, 1999 $12,569,249
April 1, 1999 $12,561,732
May 1, 1999 $12,554,172
June 1, 1999 $12,546,567
July 1, 1999 $12,538,919
August 1, 1999 $12,531,225
September 1, 1999 $12,523,487
October 1, 1999 $12,515,703
November 1, 1999 $12,507,874
December 1, 1999 and thereafter $12,500,000
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