Exhibit 10.1
SUBLEASE
BETWEEN
TRAEGER PELLET GRILLS LLC
AND
VERKADA, INC.
WILMINGTON GARDENS
SALT LAKE CITY, UTAH
SUBLEASE
THIS SUBLEASE (“Sublease”) is entered into as of October 29, 2021 (the “Effective Date”), by and between TRAEGER PELLET GRILLS LLC, a Delaware limited liability company (“Sublandlord”) and VERKADA, INC., a Delaware corporation (“Subtenant”), with reference to the following facts:
A. Pursuant to that certain Lease Agreement dated January 23, 2015 (the “Original Lease”), as amended by that certain First Amendment to Lease executed on or about April 1, 2015 (the “First Amendment”), that certain Second Amendment to Lease Agreement dated February 8, 2016 (the “Second Amendment”), that certain Third Amendment to Lease dated November 22, 2016 (the “Third Amendment”) that certain Fourth Amendment to Lease dated December 4, 2017 (the “Fourth Amendment”), that certain Fifth Amendment to Lease dated August 28, 2018 (the “Fifth Amendment”), and that certain Covered Parking Agreement dated September 8, 2017 (the “Parking Agreement”, and together with the Original Lease, the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment and the Fifth Amendment, the “Master Lease”), WILMINGTON GARDENS GROUP L.L.C., a Utah limited liability company (“Landlord”), as landlord, leased to Sublandlord, as tenant, certain space (the “Master Lease Premises”) consisting of approximately 51,151 gross square feet (“GSF”) on the first (1st) and second (2nd) floors of the building located 1215 East Wilmington Avenue in Salt Lake City, Utah (the “Building”).
B. Subtenant wishes to sublease from Sublandlord, and Sublandlord wishes to sublease to Subtenant, the Master Lease Premises comprised of (i) approximately 51,151 GSF consisting of: (a) a portion of the first (1st) floor containing approximately 5,647 GSF (the “Phase I Subleased Premises”); (b) a portion of the first (1st) floor containing approximately 4,565 GSF (the “Phase II Subleased Premises”) and (c) the entire second (2nd) floor which includes the outdoor patio and green space as well as the shop space on the first (1st) floor containing approximately 1,255 GSF (the “Phase III Subleased Premises”), said space being more particularly identified and described in Exhibit A and incorporated herein by reference; and (ii) a fenced area approximately 400 square feet in size (the “Underground Storage Area”, together with the Phase I Subleased Premises, Phase III Subleased Premises and the Phase III Subleased Premises hereinafter referred to as the “Subleased Premises”).
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by the parties, Sublandlord and Subtenant hereby agree as follows:
1.Sublease.
(a)Generally. Sublandlord hereby subleases to Subtenant and Subtenant hereby subleases from Sublandlord for the term, at the rental, and upon all of the conditions set forth herein, the Subleased Premises.
2.Sublease Term and Delivery of Subleased Premises.
(a)Generally. The term of this Sublease (the “Term”) shall commence on the date (the “Commencement Date”) that is the later to occur of (x) the date that Sublandlord delivers possession of the Phase I Subleased Premises to Subtenant in the Sublease Premises Delivery Condition (defined below), and (y) the date that Landlord’s consent to this Sublease (the “Consent”) is fully executed and delivered to all parties (such date being referred to herein as the “Consent Date”).
(b)Delivery of the Subleased Premises.
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(i)Phase I Subleased Premises Delivery. Sublandlord shall deliver possession of the Phase I Subleased Premises in the Sublease Premises Delivery Condition on the Commencement Date. On the Commencement Date, Subtenant’s Share shall mean 11.03% (representing the portion of the Phase I Subleased Premises has to the entirety of the Master Lease Premises).
(ii)Phase II Subleased Premises Delivery. Sublandlord will not deliver possession of the Phase II Subleased Premises to Subtenant until Subtenant (i) shall have taken occupancy of the Phase I Subleased Premises, and (ii) shall not then be in monetary default or material nonmonetary default under this Sublease. The date Sublandlord shall have delivered possession of the Phase II Subleased Premises to Subtenant in the Sublease Premises Delivery Condition shall be referred to as the “Phase II Delivery Date”. The parties acknowledge that the anticipated Phase II Delivery Date is February 1, 2022. Sublandlord agrees to use commercially reasonable efforts to provide Subtenant sixty (60) days’ prior written notice of the date Sublandlord anticipates that the delivery of the Phase II Subleased Premises will occur. In no event shall Sublandlord incur any liability to Subtenant for any delay in the occurrence of the Phase II Delivery Date; provided, that in the event that the Phase II Delivery Date does not occur on or before March 1, 2022, then Subtenant shall have the right to an abatement of Base Rent equal to one (1) day of Base Rent (for the Phase II Subleased Premises only) for each day after March 1, 2022 until the Phase II Subleased Premises are delivered to Subtenant in Subleased Premises Delivery Condition, and if the Phase II Delivery Date does not occur on or before June 1, 2022, then Subtenant shall have the right to an abatement of Base Rent equal to two (2) days of Base Rent (for the Phase II Subleased Premises only) for each day after June 1, 2022 until the Phase II Subleased Premises are delivered to Subtenant in Subleased Premises Delivery Condition. So long as Subtenant is not then in Default under this Sublease, Subtenant shall immediately apply any accrued abatements against payments of Base Rent as they become due. As of the Phase II Delivery Date, Subtenant’s Share shall increase to 19.96% (representing the portion of the Phase I Subleased Premises and Phase II Subleased Premises has to the entirety of the Master Lease Premises).
(iii) Phase III Subleased Premises Delivery. Sublandlord will not deliver possession of the Phase III Subleased Premises to Subtenant until Subtenant (i) shall have taken occupancy of the Phase I Subleased Premises and Phase II Subleased Premises, and (ii) shall not then be in monetary default or material nonmonetary default under this Sublease. Sublandlord agrees to use commercially reasonable efforts to provide Subtenant sixty (60) days’ prior written notice of the date Sublandlord anticipates that the delivery of the Phase III Subleased Premises will occur). The date Sublandlord shall have delivered possession of the Phase III Subleased Premises to Subtenant in the Sublease Premises Delivery Condition shall be referred to as the “Phase III Delivery Date”. The parties acknowledge that the anticipated Phase III Delivery Date is January 1, 2023. In no event shall Sublandlord incur any liability to Subtenant for any delay in the occurrence of the Phase III Delivery Date; provided, that in the event that the Phase III Delivery Date does not occur on or before February 1, 2023, then Subtenant shall have the right to an abatement of Base Rent equal to one (1) day of Base Rent (for the Phase III Subleased Premises only) for each day after February 1, 2023 until the Phase III Subleased Premises are delivered to Subtenant in Subleased Premises Delivery Condition, and if the Phase III Delivery Date does not occur on or before April 1, 2023, then Subtenant shall have the right to an abatement of Base Rent equal to two (2) days of Base Rent (for the Phase III Subleased Premises only) for each day after April 1, 2023 until the Phase III Subleased Premises are delivered to Subtenant in Subleased Premises Delivery Condition. So long as Subtenant is not then in Default under this Sublease, Subtenant shall immediately apply any accrued abatements against payments of Base Rent as they become due. If the Phase III Subleased Premises are not delivered by April 15, 2023 (the “Termination Date”), Subtenant shall have the right to provide written notice at any time after to the Termination Date to cancel this Sublease and vacate the Phase I Subleased Premises and Phase II Subleased Premises in accordance with the terms of this Sublease
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effective as of the date which is sixty (60) days after the date such notice. As of the Phase III Delivery Date, Subtenant’s Share shall increase to 100%.
(c)Term. The Term will end on June 30, 2026, which the parties acknowledge is the date of expiration of the Master Lease Term (the “Expiration Date”), unless sooner terminated pursuant to any provision hereof. Upon the determination of the Commencement Date, Sublandlord and Subtenant will enter into a letter agreement in the form of Exhibit B attached hereto (the “Commencement Date Letter Agreement”).
(d)Adjustments. Notwithstanding the provisions of Section 2(a) above:
(i)Subtenant Delivery Conditions. If, as of the date that Sublandlord would otherwise deliver possession of the Phase I Subleased Premises to Subtenant as described in Section 2(a) above, Subtenant has not delivered to Sublandlord (x) the pre-paid Base Rent pursuant to the provisions of Section 3(a)(iii) below, (y) the Security Deposit pursuant to the provisions of Section 4 below and (y) evidence of Subtenant’s procurement of all insurance coverage required hereunder (the “Subtenant Delivery Conditions”), then Sublandlord will have no obligation to deliver possession of the Subleased Premises to Subtenant until such conditions are satisfied, but the failure on the part of Sublandlord to so deliver possession of the Subleased Premises to Subtenant until such conditions are satisfied in such event will not serve to delay the occurrence of the Commencement Date hereunder.
(ii)Sublease Premises Delivery Condition. Sublandlord shall deliver the Subleased Premises to Subtenant (the “Sublease Premises Delivery Condition”) (a) vacant in a broom clean condition, and (b) subject to Landlord’s responsibilities under the Master Lease with respect to the maintenance and operation of Building systems, with all Building systems serving the Subleased Premises to be in good working order and repair (and shall warrant such condition with respect to each of the Phase I Subleased Premise for the first twelve (12) months of the Term after the delivery of the Phase I Subleased Premises, for the Phase II Subleased Premises for the next twelve (12) months of the Term after the delivery of the Phase II Subleased Premises, and for the Phase III Subleased Premises for the next twelve (12) months of the Term after the delivery of the Phase III Subleased Premises), but (c) otherwise in its “as-is” condition upon the date of delivery. For clarification purposes, Sublandlord’s warranty of the Building systems serving the Subleased Premises means that Sublandlord (as between Sublandlord and Subtenant) shall be solely responsible for any costs associated with maintenance, repair and replacement of the Building systems with respect to the Phase I Subleased Premises, the Phase II Subleased Premises or the Phase III Subleased Premises, as applicable, during the applicable twelve (12) month period, and shall not pass through any such cost to Subtenant. Subtenant’s taking possession of the Subleased Premises (including with respect to taking possession of the Phase I Subleased Premises, Phase II Subleased Premises or Phase III Subleased Premises) will be deemed Subtenant’s acknowledgment that, that portion of the Subleased Premises was delivered to Subtenant in the Sublease Premises Delivery Condition.
(e)No Option to Renew. Subtenant shall have no option to renew or extend the Term. Sublandlord acknowledges that it shall not exercise its option to renew the term pursuant to Section 28.01 of the Master Lease.
(f)Existing Furniture. Prior to the delivery of any portion (e.g., Phase I, Phase II or Phase III) of the Subleased Premises by Sublandlord to Subtenant, Sublandlord and Subtenant shall mutually agree in writing as to what, if any, Sublandlord furniture, fixtures or equipment will be left in the Subleased Premises by Sublandlord (the “Existing Furniture”). If any Existing Furniture shall remain in any portion of the Subleased Premises, Subtenant shall be allowed to use such Existing Furniture at no charge to Subtenant during the Term. Subtenant shall insure such Existing Furniture for the full replacement cost thereof and maintain the Existing Furniture
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in good condition and repair at all times, reasonable wear and tear excepted; provided, however, Subtenant may remove any Existing Furniture from the Subleased Premises to the extent the same is obsolete with no obligation to replace such item of Existing Furniture. Upon the expiration or any earlier termination of this Sublease, provided Subtenant is not in default hereunder, Subtenant shall have the option to (i) acquire such Existing Furniture from Sublandlord for the amount of One Dollar ($1.00), in which case, Subtenant shall remove such Existing Furniture from the Sublease Premises in accordance with the terms of the Master Lease at Subtenant's sole cost and expense, or (ii) remove such Existing Furniture from the Subleased Premises at the expiration of the Term as reasonably directed by Sublandlord. In the event Subtenant elects to acquire such Existing Furniture, Sublandlord shall transfer its interest in such Existing Furniture to Subtenant on an “as-is” basis, without any representations or warranties other than a representation that Sublandlord is the fee owner of such Existing Furniture and is able to convey title free and clear of any liens or encumbrances, and such transfer shall be memorialized in a commercially reasonable form of bill of sale. Subtenant shall be responsible for any tax assessed upon the transfer of ownership of the Existing Furniture from Sublandlord to Subtenant. In the event that Subtenant does not acquire such Existing Furniture (because Subtenant has committed a default hereunder), then Subtenant shall either surrender the Existing Furniture to Sublandlord in good condition and repair, normal wear and tear excepted, upon the expiration or earlier termination of this Sublease, or remove the Existing Furniture from the Subleased Premises as reasonably directed by Sublandlord. Subtenant hereby accepts the Existing Furniture in its “as-is, where-is and with all faults” condition and Subtenant acknowledges that Sublandlord has made no representations or warranties whatsoever with respect to the Existing Furniture except as expressly provided herein, including, without limitation, working order of the Existing Furniture or fitness of the Existing Furniture for a particular purpose.
3.Rent.
(a)Base Rent Payments.
(i)Generally. Subtenant shall pay to Sublandlord as base rent for the Subleased Premises during the Term (“Base Rent”) the following:
Base Rent Schedule – Phase I Subleased Premises only:
|
Months
of Term |
Rentable
Square Feet |
Rate Per GSF
Per Annum |
Monthly
Base Rent |
||||||||
| 1 - 12 | 5,647 | $36.50 | $17,176.29 | ||||||||
| 13 - 24 | 5,647 | $37.60 | $17,693.93 | ||||||||
| 25 - 36 | 5,647 | $38.53 | $18,131.58 | ||||||||
| 37 - 48 | 5,647 | $39.50 | $18,588.04 | ||||||||
| 49 – end of Term | 5,647 | $40.49 | $19,053.92 | ||||||||
Base Rent Schedule – Phase II Subleased Premises only:
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|
Months
of Term* |
Rentable
Square Feet |
Rate Per GSF
Per Annum |
Monthly
Base Rent |
||||||||
| 1 - 12 | 4,565 | $36.50 | $13,885.20 | ||||||||
| 13 - 24 | 4,565 | $37.60 | $14,303.66 | ||||||||
| 25 - 36 | 4,565 | $38.53 | $14,657.45 | ||||||||
| 37 - 48 | 4,565 | $39.50 | $15,026.45 | ||||||||
| 49 – end of Term | 4,565 | $40.49 | $15,403.07 | ||||||||
Base Rent Schedule – Entire Subleased Premises (Phase I Subleased Premises, Phase II Subleased Premises and Phase III Subleased Premises):
|
Months
of Term** |
Rentable
Square Feet |
Rate Per GSF
Per Annum |
Monthly
Base Rent |
||||||||
| 1-12 | 51,151 | $36.50 | $155,584.29 | ||||||||
| 13 - 24 | 51,151 | $37.60 | $160,273.13 | ||||||||
| 25 - 36 | 51,151 | $38.53 | $164,237.34 | ||||||||
| 37 - 48 | 51,151 | $39.50 | $168,372.04 | ||||||||
| 49 – end of Term | 51,151 | $40.49 | $172,592.00 | ||||||||
*The parties acknowledge that this Base Rent Schedule is provided for information purposes only, Subtenant shall not be required to pay Base Rent for the Phase II Subleased Premises until the Phase II Delivery Date occurs.
**The parties acknowledge that this Base Rent Schedule is provided for information purposes only, Subtenant shall not be required to pay Base Rent for the Phase III Subleased Premises until the Phase III Delivery Date occurs.
Base Rent Schedule – Underground Storage Facility - $200 per month.
(i)Delivery of Phase II Subleased Premises. Commencing on the Phase II Delivery Date, Base Rent shall increase to reflect the Base Rent Schedule for the Phase II Subleased Premises, such that Subtenant will be responsible for Base Rent at the Rate Per GSF Per Annum being charged at that time for the Phase I Subleased Premises.
(ii)Delivery of Phase III Subleased Premises. Commencing on the Phase III Delivery Date, Base Rent shall increase to reflect the Base Rent Schedule for the entire Subleased Premises, such that Subtenant will be responsible for Base Rent at the Rate Per GSF Per Annum being charged at that time for the Phase I Subleased Premises and Phase II Subleased Premises.
(iii)Payment. Base Rent shall be paid in advance on the first day of each month of the Term, except that Subtenant shall pay the first month’s Base Rent for the Phase I Subleased Premises (i.e., $17,176.29) to Sublandlord upon execution of this Sublease and delivery of this Sublease to Sublandlord, said pre-paid Base Rent will be applied to the first (1st) month’s Base Rent due and payable hereunder. Subtenant shall deliver the first month’s Base Rent for the Phase II Subleased Premises on the Phase II Delivery Date, which shall be applied to the first (1st) month’s Base
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Rent due and payable for the Phase II Subleased Space. Subtenant shall deliver the first month’s Base Rent for the Phase III Subleased Premises on the Phase III Delivery Date, which shall be applied to the first (1st) month’s Base Rent due and payable for the Phase III Subleased Space following the Abatement Period (as defined below). If the Term does not begin on the first day of a calendar month or end on the last day of a month, the Base Rent and Additional Rent (hereinafter defined) for any partial month shall be prorated by multiplying the monthly Base Rent and Additional Rent by a fraction, the numerator of which is the number of days of the partial month included in the Term and the denominator of which is the total number of days in the full calendar month. All Rent shall be payable in lawful money of the United States, by regular bank check of Subtenant, to Sublandlord at the following address:
Traeger Pellet Grills, LLC
Attn: Accounts Receivable
1215 E Wilmington Ave
Salt Lake City, UT 84106
Email: ar@traegergrills.com
or to such other persons or at such other places as Sublandlord may designate in writing.
(iv)Abatement. Notwithstanding anything in Section 3(a)(i) above to the contrary, Subtenant shall be entitled to an abatement of Base Rent for the entirety of the Subleased Premises for the first (1st) four (4) full calendar months (the “Abatement Period”) commencing from and after the first day of the month next succeeding the month in which Phase III Delivery Date occurs. The total amount of Base Rent abated during the Abatement Period is referred to herein as the “Abated Rent”. If Subtenant is in Default at any time during the Term, then (i) if such Default occurs prior to the expiration of the Abatement Period, there will be no further Abatement of Base Rent pursuant to this Section 3(a)(iv), and (ii) in the event the Sublease terminates as a result of such Default, then all then-unamortized Abated Rent (assuming amortization of all Abated Rent on a straight-line basis over the Term) shall immediately become due and payable. The payment by Subtenant of the Abated Rent in the event of a Default shall not limit or affect any of Sublandlord’s other rights, pursuant to this Sublease or at law or in equity. During the Abatement Period, only Base Rent shall be abated, and all other costs and charges specified in this Sublease shall remain as due and payable pursuant to the provisions of this Sublease.
(b)Operating Costs; Additional Rent. Subtenant shall pay Subtenant’s Share of Tenant’s Share of Project Area Operating Expenses, Specified Building Area Operating Expenses and Specified Office Area Operating Expenses (as all such terms are defined in the Master Lease) (collectively, “Direct Expenses”) as “Additional Rent” (as defined in the Master Lease), and all other Additional Rent payable pursuant to the terms of the Master Lease to the extent attributable to the Subleased Premises (Base Rent and Additional Rent are herein defined as “Rent”). To the extent Direct Expenses are payable on a monthly estimated basis under the Master Lease, the Additional Rent in respect thereto shall be paid as and when Base Rent is due based upon Landlord’s estimates; and upon any reconciliation of estimated and actual Direct Expenses (including without limitation any credits against Sublandlord’s rental obligations under the Master Lease), the corresponding Additional Rent shall be adjusted between Sublandlord and Subtenant (with appropriate reimbursements or additional payments) within thirty (30) days after delivery to Subtenant of any reconciliation statement under the Master Lease. The parties acknowledge that as used here in, “Subtenant’s Share” shall refer to the portion of the Master Lease Premises Subtenant is then currently subleasing, expressed as a percentage of the total Master Lease Premises. Upon written request from Subtenant, Sublandlord shall exercise the right to audit Landlord’s books and records with respect to Project Area Operating Expenses,
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Specified Building Area Operating Expenses and Specified Office Area Operating Expenses for Subtenant’s benefit, provided Subtenant shall be solely responsible for the costs of such audit.
4.Security Deposit.
(a)Concurrently with Subtenant’s execution of this Sublease, Subtenant shall deposit with Sublandlord the sum of $690,368.00 (the “Security Deposit”). Provided that Subtenant is not then in Default under this Sublease, then the Security Deposit shall be reduced to Three Hundred Forty-Five Thousand One Hundred Eighty-Four and 00/100 Dollars ($345,184.00) (the “Reduced Security Deposit Amount”) as of the first day of the twenty fifth (25th) month of the Term, and Landlord shall promptly return to Tenant the balance of the Security Deposit which exceeds the Reduced Security Deposit Amount. In the event Subtenant elects to deliver a Letter of Credit (as defined below) instead of a cash Security Deposit, then in order to effect any such reduction, Subtenant shall either deliver an amendment to the existing Letter of Credit or a replacement letter of credit in the Reduced Security Deposit Amount that otherwise complies with all other applicable requirements specified in Section 4(b) below. The Security Deposit shall be held by Sublandlord as security for the faithful performance by Subtenant of all the provisions of this Sublease to be performed or observed by Subtenant. If Subtenant fails to pay Base Rent, Additional Rent or other sums due hereunder, or otherwise is in Default under this Sublease, Sublandlord may use, apply or retain all or any portion of the Security Deposit for the payment of any Base Rent, Additional Rent or other past due sum or for the payment of any other sum to which Sublandlord may become obligated by reason of Subtenant’s breach, or to compensate Sublandlord for any loss or damage which Sublandlord may suffer thereby. If Sublandlord so uses or applies all or any portion of the Security Deposit, Subtenant shall within ten (10) days after demand therefor deposit cash with Sublandlord in an amount sufficient to restore the Security Deposit to the full amount thereof and Subtenant’s failure to do so shall be a material Default. If Subtenant performs all of Subtenant’s obligations hereunder, the Security Deposit, or so much thereof as has not theretofore been applied by Sublandlord, shall be returned, without interest, to Subtenant (or, at Sublandlord’s option, to the last assignee, if any, of Subtenant’s interest hereunder) following the expiration of the Term, and after Subtenant has vacated the Subleased Premises. No trust relationship is created herein between Sublandlord and Subtenant with respect to the Security Deposit. Sublandlord shall not be required to keep the Security Deposit separate from its other accounts.
(b)In lieu of the cash Security Deposit described in Section 4(a) above, Subtenant may elect to deliver to Sublandlord, as collateral for the full performance by Subtenant of all of its obligations under this Sublease, a standby, unconditional, irrevocable, transferable (with Subtenant responsible for the payment of any transfer fee or charge imposed by the Issuing Bank, as defined below) letter of credit (the “Letter of Credit”) substantially in the form approved in writing in advance by Sublandlord and containing the terms required herein, in the amount specified in Section 4(a) above (the “Letter of Credit Amount”), naming Sublandlord as beneficiary, issued (or confirmed) by a financial institution acceptable to Sublandlord (the “Issuing Bank”), permitting multiple and partial draws thereon from a location in Salt Lake City (or, alternatively, permitting draws via overnight courier or facsimile in a manner acceptable to Sublandlord), with an expiration date no sooner than ninety (90) days after the Term (the “Required Period”), and otherwise in form acceptable to Sublandlord in its reasonable discretion. In addition, in the event that the Letter of Credit has an auto-renewal feature, and the Issuing Bank for any reason provides notice of non-renewal prior to the end of the Required Period, then in such event, failure of Subtenant to provide Sublandlord with a replacement Letter of Credit reasonably satisfactory to Sublandlord at least 30 days prior to the expiration of such the Letter of Credit shall be deemed a Default which shall not require the giving of notice or the allowance of any grace or cure period, whereupon Sublandlord shall have the right to immediately draw funds under the Letter of Credit in addition to any other rights and remedies it has under this Sublease. In the event Sublandlord receives funds in the amount of the Security
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Deposit under the Letter of Credit from the Issuing Bank in accordance with the terms of the foregoing sentence: (A) such Default shall be deemed to be cured and Sublandlord shall hold and apply the funds so drawn, without interest, and only in accordance with the provisions of this Section as if cash in such amount had been posted by Subtenant in lieu of the Letter of Credit; and (B) Subtenant shall have the right to substitute a new Letter of Credit meeting the foregoing requirements, in which event Sublandlord will return the funds received from the Issuing Bank to Subtenant within thirty (30) days after receipt of such new Letter of Credit. Notwithstanding the foregoing, in the event Sublandlord does not immediately draw funds under the Letter of Credit or receive such funds from the Issuing Bank, in accordance with the terms of the foregoing two sentences, same shall constitute a Default under this Sublease unless within three (3) days after notice from Sublandlord, Subtenant either replaces the Letter of Credit or delivers to Sublandlord a cash deposit in the same amount. If Subtenant breaches any provision hereof, Sublandlord may, at its option, without limiting its remedies and without notice to Subtenant, draw all sums which are necessary to cure such breach and compensate Sublandlord for any loss or damage caused by such breach; provided, however, if Sublandlord has accelerated amounts due to Sublandlord through the end of the Term, Sublandlord may draw and retain the entire amount of the Letter of Credit on account of Subtenant’s obligations under this Sublease and Subtenant shall remain liable for any remaining balance of sums due under this Sublease. Sublandlord hereby pre-approves Silicon Valley Bank as the Issuing Bank.
5.Use and Occupancy.
(a)Use.
(i)Generally. The Subleased Premises, subject to the terms and conditions of the Master Lease, shall be used and occupied only for general, executive and administrative offices, training, research and development, and for any lawful use ancillary thereto, including the operation of a cafeteria and laboratory, and for no other use or purpose. Sublandlord covenants and agrees that Subtenant, on paying the Base Rent and Additional Rent herein, and on timely keeping, observing and performing all of the other terms, covenants, conditions, provisions and agreements herein contained on the part of Subtenant, to be kept, observed and performed, shall peaceably and quietly have, hold and enjoy the Subleased Premises subject to the terms, covenants, conditions, provisions and agreements hereof, during the Term.
(a)Compliance with Master Lease. Subtenant will occupy the Subleased Premises in accordance with the terms of the Master Lease and will not suffer to be done, or omit to do, any act which may result in a violation of or a default under the Master Lease, or render Sublandlord liable for any damage, charge or expense thereunder that is not contemplated pursuant to the terms of this Sublease. Sublandlord will occupy the Master Lease Premises in accordance with the terms of the Master Lease and will not suffer to be done, or omit to do, any act which may result in a violation of or a default under the Master Lease, or render Subtenant liable for any damage, charge or expense thereunder that is not contemplated pursuant to the terms of this Sublease. Subtenant will indemnify, defend protect and hold Sublandlord harmless from and against any loss, cost, damage or liability (including attorneys’ fees) of any kind or nature arising out of, by reason of, or resulting from, Subtenant’s failure to perform or observe any of the terms and conditions of the Master Lease applicable to its occupancy of the Subleased Premises or this Sublease. Sublandlord will indemnify, defend protect and hold Subtenant harmless from and against any loss, cost, damage or liability (including attorneys’ fees) of any kind or nature arising out of, by reason of, or resulting from, Sublandlord’s failure to perform or observe any of the terms and conditions of the Master Lease (except to the extent such performance has been assumed by Subtenant pursuant to the terms of this Sublease). Any other provision in this Sublease to the contrary notwithstanding, Subtenant shall pay to Sublandlord as Rent hereunder any and all sums which Sublandlord may be required to pay the Landlord arising out of a request by Subtenant for, or the use by Subtenant of, additional or over-
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standard Building services from Landlord (for example, but not by way of limitation, charges associated with after-hour HVAC usage and overstandard electrical charges). Any other provision in this Sublease to the contrary notwithstanding, Sublandlord shall pay to Landlord any and all sums which Sublandlord may be required to pay Landlord arising out of a request by Sublandlord for, or the use by Sublandlord of, additional or over-standard Building services from Landlord (for example, but not by way of limitation, charges associated with after-hour HVAC usage and overstandard electrical charges).
(b)Landlord’s Obligations. Subtenant agrees that Sublandlord shall not be required to perform any of the covenants, agreements and/or obligations of Landlord under the Master Lease and, insofar as any of the covenants, agreements and obligations of Sublandlord hereunder are required to be performed under the Master Lease by Landlord thereunder, Subtenant acknowledges and agrees that Sublandlord shall be entitled to look to Landlord for such performance. In addition, Sublandlord shall have no obligation to perform any repairs or any other obligation of Landlord under the Master Lease, nor shall any representations or warranties made by Landlord under the Master Lease be deemed to have been made by Sublandlord. Sublandlord shall not be responsible for any failure or interruption, for any reason whatsoever, of the services or facilities that may be appurtenant to or supplied at the Building by Landlord or otherwise, including, without limitation, heat, air conditioning, ventilation, life-safety, water, electricity, elevator service and cleaning service, if any; and no failure to furnish, or interruption of, any such services or facilities shall give rise to any (i) abatement, diminution or reduction of Subtenant’s obligations under this Sublease, or (ii) liability on the part of Sublandlord; provided, however, that if and to the extent that any circumstance occurs which Sublandlord receives an abatement of rent payable under the Master Lease, Subtenant will similarly have a parallel right to receive an abatement of rent hereunder (proportionate to the portion of the Subleased Premises then occupied by Subtenant), and, further, in the event of any circumstance (for example, but without limitation, casualty damage) which would entitle Sublandlord to terminate the Master Lease, Subtenant may request in writing that Sublandlord exercise such termination right (which written request shall be provided to Sublandlord not later than ten (10) days prior to the deadline for Sublandlord to provide such termination notice pursuant to the terms of the Master Lease), and upon Sublandlord being granted such termination right, or if Sublandlord fails to exercise such termination right within the ten (10) day period specified above and Sublandlord should have been granted such termination right had it exercised its termination right timely, Subtenant will have a similar and parallel right to terminate this Sublease. Notwithstanding the foregoing, Sublandlord shall use good faith efforts, under the circumstances, to secure such performance upon Subtenant’s request to Sublandlord to do so and shall thereafter diligently prosecute such performance on the part of Landlord; provided, that if such request is made prior to the Phase III Delivery Date, such request does not prejudice any rights Sublandlord may have under the Master Lease with respect to the Phase III Premises. Such good faith efforts shall include, without limitation: (a) upon Subtenant's request, immediately notify Master Landlord of its non-performance under the Master Lease and request Master Landlord to perform its obligations; and (b) upon Subtenant's request, take appropriate legal action to enforce the terms of the Master Lease, using attorneys reasonably acceptable to Subtenant, provided that Subtenant agrees to pay all costs and expenses of Sublandlord reasonably incurred in connection therewith and to indemnify, defend and hold Sublandlord harmless from and against all liabilities, claims, expenses, losses and damages arising from such action.
6.Master Lease and Sublease Terms.
(a)Subject to Master Lease. This Sublease is and shall be at all times subject and subordinate to the Master Lease. Subtenant acknowledges that Subtenant has reviewed and is familiar with all of the terms, agreements, covenants and conditions of the Master Lease. During the Term and for all periods subsequent thereto with respect to obligations which have arisen
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prior to the termination of this Sublease, Subtenant agrees to perform and comply with, for the benefit of Sublandlord and Landlord, the obligations of Sublandlord under the Master Lease which pertain to the Subleased Premises and/or this Sublease, except for those provisions of the Master Lease which are directly contradicted by this Sublease, in which event the terms of this Sublease document shall control over the Master Lease. Notwithstanding anything to the contrary contained in this Sublease (including any provisions of the Master Lease to the contrary), Subtenant shall not be required to pay any additional rent or other amounts, or to perform any obligation that is (1) allocable to any period of time prior to the Commencement Date, or following the expiration or sooner termination of this Sublease, or (2) payable solely as a result of a default or breach by Sublandlord of any of its obligations under the Master Lease (unless due to Subtenant’s default of this Sublease or default under any of Sublandlord’s obligations under the Master Lease assumed by Subtenant pursuant to this Sublease).
(b)Incorporation of Terms of Master Lease. The terms, conditions and respective obligations of Sublandlord and Subtenant to each other under this Sublease shall be the terms and conditions of the Master Lease, except for those provisions of the Master Lease which are directly contradicted by this Sublease, in which event the terms of this Sublease shall control over the Master Lease. Therefore, for the purposes of this Sublease, wherever in the Master Lease the word “Landlord” is used it shall be deemed to mean Sublandlord and wherever in the Master Lease the word “Tenant” is used it shall be deemed to mean Subtenant. Additionally, wherever in the Master Lease the word “Leased Premises” is used it shall be deemed to mean the Subleased Premises. Any non-liability, release, indemnity or hold harmless provision in the Master Lease for the benefit of Landlord that is incorporated herein by reference shall be deemed to inure to the benefit of Sublandlord, Landlord, and any other person intended to be benefited by said provision, for the purpose of incorporation by reference in this Sublease. Any right of Landlord under the Master Lease (a) of access or inspection, (b) to do work in the Master Lease Premises or in the Building, (c) in respect of rules and regulations, which is incorporated herein by reference, shall be deemed to inure to the benefit of Sublandlord, Landlord, and any other person intended to be benefited by said provision, for the purpose of incorporation by reference in this Sublease.
(c)Modifications. For the purposes of incorporation herein, the terms of the Master Lease are subject to the following additional modifications:
(i)Approvals. In all provisions of the Master Lease (under the terms thereof and without regard to modifications thereof for purposes of incorporation into this Sublease) requiring the approval or consent of Landlord, Subtenant shall also be required to obtain the approval or consent of both Sublandlord and Landlord. Sublandlord agrees, at no expense to Sublandlord, to reasonably cooperate with Subtenant in requesting the consent of the Landlord where any such consent is required by this Sublease or the Master Lease, and except as otherwise specifically provided in this Sublease, will act reasonably with respect to any consent requested by Subtenant in connection with this Sublease. Without limiting the generality of the foregoing, if Subtenant shall submit to Sublandlord a request for Landlord’s consent or approval with respect to any given matter required by this Sublease or the Master Lease, then Sublandlord shall promptly forward such request on to Landlord for its consent or approval.
(ii)Deliveries. In all provisions of the Master Lease requiring Tenant to submit, exhibit to, supply or provide Landlord with evidence, certificates, or any other matter or thing, Subtenant shall be required to submit, exhibit to, supply or provide, as the case may be, the same to both Landlord and Sublandlord.
(iii)Damage; Condemnation. Sublandlord shall have no obligation to restore or rebuild any portion of the Subleased Premises after any destruction or taking by eminent domain; and Subtenant will assume, for such purposes, any obligation of the “tenant” under the Master Lease
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to reconstruct portions of the improvements within the Subleased Premises. Any rights of Subtenant to abatement of Rent in the event of casualty or condemnation shall be conditioned upon Sublandlord’s ability to abate rent for the Subleased Premises under the terms of the Master Lease.
(iv)Insurance. Subtenant will comply with the insurance requirements applicable to the “Tenant” under the Master Lease. In all provisions of the Master Lease requiring Tenant to designate Landlord as an additional or named insured on its insurance policy, Subtenant shall be required to so designate Landlord and Sublandlord on its insurance policy. For avoidance of doubt, Sublandlord shall have no obligation to maintain the insurance to be maintained by Landlord under the Master Lease. With respect to the waiver of subrogation contained in Section 11.03 of the Master Lease, such waiver shall be deemed to be modified to constitute an agreement by and among and apply to Landlord, Sublandlord, and Subtenant (and Landlord's consent to this Sublease shall be deemed to constitute its approval of this modification).
(v)Termination. Sublandlord shall have no right to exercise its early termination right as provided in Section 28.02 of the Master Lease, without the prior written consent of Subtenant, in its sole discretion.
(vi)Exclusions. In addition to the obligations of Subtenant under the terms of this Sublease as set forth in this Sublease (and except as otherwise expressly provided to the contrary in this Sublease), Subtenant shall also have and perform for the benefit of Sublandlord all obligations of the “Tenant” as are set forth in the Master Lease, which are hereby incorporated into this Sublease as though set forth herein in full, substituting “Subtenant” wherever the term “Tenant” appears, “Sublandlord” wherever the term “Landlord” appears, and “Subleased Premises” wherever the term “Premises” appears. Notwithstanding the foregoing, the following provisions of the Master Lease are hereby expressly excluded from this Sublease and not incorporated herein, except as expressly set forth or referenced elsewhere in this Sublease, and then only to the extent to set forth or referenced: Section 1.01(E), (G), (J), (K), (X), (Y), (Z), (CC), (DD), Sections, 3.05, 4.02, 4.03, 5.01, 5.02; Article VI; Section 13.01; Article 16; Section 19.03; Articles 26, 28; and Exhibits C, C-1, D, and F of the Original Lease; Sections 4, 5, 9, and 10 of the First Amendment; Sections 4, 5, and 8 of the Second Amendment; Sections 1, 2 and 4 of the Third Amendment; Sections 4, 5, 7 (as it relates to Traeger Shop Classes), and 11 of the Fourth Amendment; and Section 2 of the Fifth Amendment.
(d) Sublandlord represents and warrants to Subtenant that: (i) Exhibit D to this Sublease is a true, correct and complete copy of the Master Lease, as may be redacted; (ii) the Master Lease is in full force and effect; (iii) Sublandlord is not now, and as of the Commencement Date will not be, in default or breach of any of the provisions of the Master Lease and Sublandlord has no knowledge of any claim by Landlord that Sublandlord is in default or breach of any of the provisions of the Master Lease; and (iv) Sublandlord has no knowledge that Landlord is in default or breach of any provisions of the Master Lease.
(e) Sublandlord covenants and agrees not to cause the Master Lease or the rights of Sublandlord as tenant thereunder to be terminated, cancelled or forfeited. Sublandlord further covenants and agrees that it will not terminate, modify or amend the Master Lease during the Term of the Sublease. Sublandlord further covenants and agrees that so long as Subtenant has timely paid all Rent and Additional Rent owing from Subtenant pursuant to the terms of this Sublease, to pay Landlord all Rent and other charges that may become due and payable by Sublandlord pursuant to the Master Lease (excepting any amounts that Subtenant is required to pay directly to Landlord pursuant to the terms of this Sublease), as and when such amounts become due and payable thereunder.
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If, at any time during the Sublease Term, Sublandlord receives any notice or demand from Landlord under the Master Lease with respect to the Subleased Premises, Sublandlord shall promptly deliver a complete copy of same to Subtenant. In the event that Sublandlord delivers or receives a notice of default under the Master Lease, Sublandlord agrees to deliver to Subtenant a copy of any such notice of default.
7.Assignment and Subletting.
(a)Assignment Prohibited. Subtenant shall not assign this Sublease or further sublet all or any part of the Subleased Premises except subject to and in compliance with all of the terms and conditions of the Master Lease, and Sublandlord (in addition to Landlord) shall have the same rights of consent with respect to assignment and subleasing as Landlord has under the Master Lease. Subtenant shall pay all fees and costs payable to Landlord pursuant to the Master Lease in connection with any proposed assignment, sublease or transfer of the Subleased Premises. Subtenant shall also be responsible for Sublandlord’s reasonable out-of-pocket costs relating to Subtenant’s request for such consent in an amount not to exceed $2,000.00, regardless of whether such consent is granted, and the effectiveness of any such consent shall be conditioned upon Landlord’s and Sublandlord’s receipt of all such fees and costs; provided Sublandlord shall be responsible for Landlord’s fees and costs associated with the Landlord’s consent to the execution of this Sublease. Notwithstanding the foregoing, Subtenant, upon providing the twenty (20) days prior written notice required in Section 14.01 of the Master Lease to both Sublandlord and Landlord, shall have the ability to conduct Permitted Transfers (as defined in the Master Lease) in accordance with the provisions of Section 14.01 of the Master Lease, without the prior consent of Sublandlord or Landlord.
(b)Assignment Consideration. If an assignment or sublease is consented to by Landlord and Sublandlord and the rental due and payable by an assignee or subtenant (or a combination of rent payable thereunder plus any other consideration directly or indirectly incident to the assignment or sublease) exceeds the Base Rent payable under this Sublease, then Subtenant shall pay to Sublandlord, as Additional Rent, 50% of such excess rental after first deducting Subtenant’s reasonable expenses incurred in connection with such assignment or sublease, including without limitation, marketing expenses, brokerage commissions, reasonable attorneys’ fees, rent concessions, tenant improvement allowances, costs of alterations or improvements, and costs paid to Landlord and/or Sublandlord in obtaining Landlord’s and Sublandlord’s consent to the assignment or sublease, within thirty (30) days following receipt thereof by Subtenant from the assignee or subtenant, as the case may be.
8.Default. Except as expressly set forth herein, Subtenant shall perform all obligations in respect of the Subleased Premises that Sublandlord would be required to perform pursuant to the Master Lease. It shall constitute a “Default” hereunder if Subtenant fails to perform any obligation hereunder (including, without limitation, the obligation to pay Rent), or any obligation under the Master Lease which has been incorporated herein by reference, and, in each instance, Subtenant has not remedied such failure (i) in the case of any monetary Default, three (3) business days after delivery of written notice and (ii) in the case of any other Default, twenty (20) days after delivery of written notice.
9.Remedies. In the event of any Default hereunder by Subtenant, Sublandlord shall have all remedies provided to the “Landlord” in the Master Lease as if a Default had occurred thereunder and all other rights and remedies otherwise available at law and in equity. Sublandlord may resort to its remedies cumulatively or in the alternative.
10.Right to Cure Defaults. If Subtenant fails to perform any of its obligations under this Sublease after expiration of applicable grace or cure periods, then Sublandlord may, but shall not be obligated to, perform any such obligations for Subtenant’s account. All costs and expenses
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incurred by Sublandlord in performing any such act for the account of Subtenant shall be deemed Rent payable by Subtenant to Sublandlord upon demand, together with interest thereon at the lesser of (i) at the rate equal to the prime rate published from time to time by Wells Fargo Bank, plus two percent (2%), or (ii) the maximum rate allowable under law from the date of the expenditure until repaid. If Sublandlord undertakes to perform any of Subtenant’s obligations for the account of Subtenant pursuant hereto, the taking of such action shall not constitute a waiver of any of Sublandlord’s remedies.
11.Consents and Approvals. In any instance when Sublandlord’s consent or approval is expressly required under this Sublease, Sublandlord’s refusal to consent to or approve any matter or thing shall be deemed reasonable if, among other matters, such consent or approval is required under the provisions of the Master Lease incorporated herein by reference but has not been obtained from Landlord. In such event where such consent or approval is required under the provisions of the Master Lease and Landlord has consented to or approved of such matter Sublandlord’s approval shall upon such consent or approval by Landlord also be deemed given.
12.Sublandlord’s Liability.
(a)Limitation of Liability. Notwithstanding any other term or provision of this Sublease, the liability of Sublandlord to Subtenant for any default in Sublandlord’s obligations under this Sublease shall be limited to actual, direct damages, and under no circumstances shall Subtenant, its partners, members, shareholders, directors, agents, officers, employees, contractors, sublessees, successors and/or assigns be entitled to recover from Sublandlord (or otherwise be indemnified by Sublandlord) for (i) any losses, costs, claims, causes of action, damages or other liability incurred in connection with a failure of Landlord, its partners, members, shareholders, directors, agents, officers, employees, contractors, successors and /or assigns to perform or cause to be performed Landlord’s obligations under the Master Lease, (ii) lost revenues, lost profit or other consequential, special or punitive damages arising in connection with this Sublease for any reason, or (iii) any damages or other liability arising from or incurred in connection with the condition of the Subleased Premises or suitability of the Subleased Premises for Subtenant’s intended uses. Subtenant shall, however, have the right to seek any injunctive or other equitable remedies as may be available to Subtenant under applicable law. Notwithstanding any other term or provision of this Sublease, no personal liability shall at any time be asserted or enforceable against Sublandlord’s shareholders, directors, officers, or partners on account of any of Sublandlord’s obligations or actions under this Sublease. Notwithstanding any other term or provision of this Sublease, the liability of Subtenant to Sublandlord for any default in Subtenant’s obligations under this Sublease shall be limited to actual, direct damages, and under no circumstances shall Sublandlord, its partners, members, shareholders, directors, agents, officers, employees, contractors, sublessees, successors and/or assigns be entitled to recover from Subtenant (or otherwise be indemnified by Subtenant) for (x) any losses, costs, claims, causes of action, damages or other liability incurred in connection with a failure of Landlord, its partners, members, shareholders, directors, agents, officers, employees, contractors, successors and /or assigns to perform or cause to be performed Landlord’s obligations under the Master Lease, or (y) lost revenues, lost profit or other consequential, special or punitive damages arising in connection with this Sublease for any reason.
(b)Sublandlord Default. Sublandlord shall be in default hereunder only if Sublandlord has not commenced and pursued with reasonable diligence the cure of any failure of Sublandlord to meet its obligations hereunder within thirty (30) days after the receipt by Sublandlord of written notice from Subtenant of the alleged failure to perform; provided, however, that if the nature of such default is that it cannot reasonably be cured within thirty (30) days, then the cure period applicable for Sublandlord with respect to such potential default shall be extended as reasonably necessary to allow Sublandlord time to complete such cure so long as Sublandlord has commenced within such initial thirty (30) days to cure such default and thereafter diligently
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prosecute such cure to completion. In no event shall Subtenant have the right to terminate or rescind this Sublease as a result of Sublandlord’s default as to any covenant or agreement contained in this Sublease. Subtenant hereby waives such remedies of termination and rescission and hereby agrees that Subtenant’s remedies for default hereunder and for breach of any promise or inducement shall be limited to a suit for damages and/or injunction. Notwithstanding the foregoing, if Sublandlord fails to pay any sum of money to Landlord, or fails to perform any other act on its part to be performed under the Lease or this Sublease, in each circumstance where the foregoing obligations are not assumed by Subtenant pursuant to this Sublease, then Subtenant may, but shall not be obligated to, after first providing Sublandlord not less than ten (10) days’ prior written notice of such failure, make such payment or perform such act. All such sums paid shall be payable by Sublandlord to Subtenant within ten (10) days after written demand.
13.Attorneys’ Fees. If Sublandlord or Subtenant brings an action to enforce the terms hereof or to declare rights hereunder, the prevailing party who recovers substantially all of the damages, equitable relief or other remedy sought in any such action on trial and appeal shall be entitled to receive from the other party its costs associated therewith, including, without limitation, reasonable attorney’s fees and costs from the other party. Without limiting the generality of the foregoing, if Sublandlord utilizes the services of an attorney for the purpose of collecting any Rent due and unpaid by Subtenant, Subtenant agrees to pay Sublandlord reasonable actual attorneys’ fees as determined by Sublandlord for such services, irrespective of whether any legal action may be commenced or filed by Sublandlord. If any such work is performed by in-house counsel for Sublandlord, the value of such work shall be determined at a reasonable hourly rate for comparable outside counsel.
14.Delivery of Possession.
(a)Generally. Except as specifically set forth in this Sublease, Sublandlord shall deliver, and Subtenant shall accept, possession of the Subleased Premises in their “AS IS” condition as the Subleased Premises exists on the Commencement Date. Except as specifically set forth in this Sublease, Sublandlord shall have no obligation to furnish, render or supply any work, labor, services, materials, furniture, fixtures, equipment, decorations or other items to the Subleased Premises ready or suitable for Subtenant’s occupancy. In entering into this Sublease, Subtenant has relied solely on such investigations, examinations and inspections as Subtenant has chosen to make or has made and has not relied on any representation or warranty concerning the Subleased Premises or the Building, except as expressly set forth in this Sublease. Subtenant acknowledges that Sublandlord has afforded Subtenant the opportunity for full and complete investigations, examinations and inspections of the Subleased Premises and the common areas of the Building. Subtenant acknowledges that it is not authorized to make or do any alterations or improvements in or to the Subleased Premises except as permitted by the provisions of this Sublease and the Master Lease and that upon termination of this Sublease, Subtenant shall deliver the Subleased Premises to Landlord Sublandlord in the same condition as the Subleased Premises were at the applicable delivery date for each phase of the Subleased Premises and as required pursuant to the terms of the Master Lease, reasonable wear and tear and casualty damage excepted.
(b)Subtenant Improvements.
(i)Generally. If Subtenant desires to construct improvements within the Subleased Premises (“Subtenant Improvements”), all Subtenant Improvements shall be carried out in accordance with the applicable provisions of the Master Lease. Sublandlord and Landlord will have the right to approve the plans and specifications for any proposed Subtenant Improvements and Landlord will have the right to approve any contractors whom Subtenant proposes to retain to perform such work pursuant to the terms of the Master Lease. Promptly following the completion of any Subtenant Improvements or subsequent alterations or additions by or on behalf of Subtenant,
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Subtenant will deliver to Landlord and Sublandlord a reproducible copy of “as built” drawings of such work together with a CAD file of the “as-built” drawings in the then-current version of AutoCad. Subtenant shall pay directly and in full the cost of constructing the Subtenant Improvements, including the costs of labor and materials supplied by the general contractor or subcontractors, and shall be responsible for removing any mechanics’ liens and obtaining mechanics’ lien waivers from the general contractor and any subcontractor or supplier of any tier.
(ii)Code-Required Work. If the performance of any Subtenant Improvements or other work by Subtenant within the Subleased Premises “triggers” a requirement for code-related upgrades to or improvements of any portion of the Building, Subtenant shall be responsible for the cost of such code-required upgrade or improvements.
(c)Prior to Delivery. Notwithstanding anything herein to the contrary, Subtenant shall have no obligation to perform any of the obligations of Sublandlord as "tenant" under the Lease that accrue prior to the Commencement Date, the Phase II Delivery Date or the Phase III Delivery Date, as applicable, but that have not been performed by Sublandlord, or to indemnify, defend or hold harmless Landlord or Sublandlord with respect to matters occurring prior to the Commencement Date the Phase II Delivery Date or the Phase III Delivery Date, as applicable.
15.Holding Over. If Subtenant fails to surrender the Subleased Premises at the expiration or earlier termination of this Sublease, occupancy of the Subleased Premises after the termination or expiration shall be that of a tenancy at sufferance. Subtenant’s occupancy of the Subleased Premises during the holdover shall be subject to all the terms and provisions of this Sublease and Subtenant shall pay an amount (on a per month basis without reduction for partial months during the holdover) equal to 150% of the sum of the Base Rent and 100% of the Additional Rent due for the period immediately preceding the holdover. No holdover by Subtenant or payment by Subtenant after the expiration or early termination of this Sublease shall be construed to extend the Term or prevent Sublandlord from immediate recovery of possession of the Subleased Premises by summary proceedings or otherwise. In addition to the payment of the amounts provided above, if Sublandlord is unable to deliver possession of the Subleased Premises to a new subtenant or to Landlord, as the case may be, or to perform improvements for a new subtenant, as a result of Subtenant’s holdover, Subtenant shall be liable to Sublandlord for all damages, including, without limitation, consequential damages, that Sublandlord suffers from the holdover.
16.Parking. During the Term, Subtenant shall be permitted to use the following non-exclusive parking spaces in the parking garage across the street from the Building provided to Sublandlord pursuant to the terms of the Master Lease (including the Parking Agreement): (i) a total of twenty-two (22) non-exclusive parking spaces while the Subleased Premises only comprises the Phase I Subleased Premises; (ii) commencing on the Phase II Delivery Date, a total of forty-five (45) non-exclusive parking spaces; and (iii) commencing on the Phase III Delivery Date, shall be permitted to use all two hundred four (204) non-exclusive parking spaces. Subtenant’s use of such parking spaces shall be at no cost to Subtenant, but shall otherwise at all times be subject to and in accordance with the Master Lease (including the Parking Agreement) and any payments to Landlord required thereunder.
17.Signage. Subject to Landlord’s consent, Subtenant will be entitled, at no cost to Sublandlord, to replace Sublandlord’s existing signage with Building-standard identification, directory and directional signage in accordance with the Master Lease (i) on directories and suite identification signs for the Phase I and Phase II Premises, and (ii) on all signage from and after the Phase III Delivery Date.
18.SNDA; Recognition Agreement.
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(a)This Sublease is contingent upon Sublandlord obtaining for Subtenant a subordination, non-disturbance and attornment agreement (“SNDA”) in a form reasonably satisfactory to Subtenant, from any current mortgage holders with respect to the Building within thirty (30) days following mutual execution of this Sublease. In connection with the permitted sub-sublease of one floor or greater, at Subtenant’s request, Sublandlord will also use commercially reasonable efforts to provide to Subtenant’s subtenant an SNDA from Sublandlord in a form reasonably satisfactory to Subtenant.
(b)This Sublease is contingent upon Sublandlord obtaining for Subtenant a recognition agreement from Landlord in a form reasonably satisfactory to Subtenant, which shall include the following provisions for so long as Subtenant is not in Default under this Sublease: (i) the Landlord will not, in the exercise of any of the rights arising or which may arise out of such Sublease, disturb or deprive Subtenant in or of its possession or its rights to possession of the Subleased Premises or of any right or privilege granted to or inuring to the benefit of Subtenant under this Sublease; and (ii) in the event of the termination of the Master Lease, Subtenant shall not be made a party in any removal or eviction action or proceeding, nor shall Subtenant be evicted or removed of its possession or its right of possession of the Subleased Premises, and this Sublease shall continue in full force and effect as a direct lease between the Landlord and Subtenant for the remainder of the Term and on the same terms and conditions as contained herein, without the necessity of executing a new lease (the “Recognition Agreement”). The Recognition Agreement shall be delivered concurrently with the Consent.
19.Landlord’s Consent.
(a)This Sublease and the obligations of the parties hereunder are expressly conditioned upon (i) Sublandlord's obtaining the Consent of Landlord to this Sublease and (ii) the mutual execution of that certain lease agreement between Landlord and Subtenant for Suite 150 at the Building (the “Adjacent Lease”). The Consent must contain Landlord’s consent to Subtenant’s ability to install the Subtenant’s Security System, in accordance with Section 21 below, or it will not be effective to waive Sublandlord’s and Subtenant’s termination right under this Section 19(b). Subtenant shall promptly deliver to Sublandlord any information reasonably requested by Landlord in connection with the Consent with respect to the nature and operation of Subtenant's business, the financial condition of Subtenant, and any other information reasonably requested by Landlord.
(b)If Landlord fails to provide the Consent or the Adjacent Lease within (30) days after the date the parties execute this Sublease, either party shall have the right to terminate this Sublease by giving written notice thereof to the other at any time thereafter, but before, Landlord grants such consent provided, however, neither party shall have a right to terminate pursuant to the foregoing if Landlord’s refusal to grant consent is attributable to such party’s failure to comply with the terms of this Sublease with respect to requesting such Consent.
20.Pets. Subject to Landlord’s consent to be included in Landlord’s Consent, Subtenant shall be permitted to have domesticated dogs and cats (“Pets”) in the Subleased Premises. Subtenant shall comply with all applicable laws associated with or governing the presence of a Pets within the Subleased Premises and/or the Building. All Pets shall be under the physical control and supervision of Subtenant’s employees at all times and must be on leashes or in carriers while in any area of the Building outside of the Subleased Premises, including, but not limited to, the common areas. All Pets brought into the Building shall have been properly vaccinated (including vaccines for rabies, distemper, hepatitis, para-influenza, parvovirus and Bordetella), and Subtenant shall provide Sublandlord or Landlord with satisfactory evidence of such vaccinations within three (3) business days after request, or Subtenant will not be permitted to bring the applicable Pet for which Subtenant cannot provide such evidence into the Building. Pets shall not be brought to the Building if such Pet has fleas or ticks, is ill or contracts a disease
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that could potentially threaten the health or wellbeing of any other Pet, or any tenant, occupant and/or invitee of the Building (which diseases may include, but shall not be limited to, rabies, leptospirosis and Lyme disease). Subtenant shall prevent any objectionable Pet-related noises or odors to emanate from the Premises and in no event shall Pets be at the Premises overnight. Subtenant shall prevent Pets from relieving themselves of bodily waste inside the Building. Subtenant shall indemnify, defend and hold Sublandlord harmless from and against any and all loss, cost, damage, fines or liability (including attorneys’ fees) of any kind or nature arising out of, by reason of, or resulting from, the presence of Pets in the Building or Subleased Premises.
21.Subtenant Security System. During the Term, Subtenant shall be entitled to install a separate security system within the Subleased Premises then occupied by Subtenant as Subtenant deems necessary in its sole discretion, and may include, without limitation, exterior and/or interior security systems, key-card systems, access gates, access control systems, security lighting and video monitoring equipment (“Subtenant’s Security System”); provided, however (a) the plans and specifications for Subtenant’s Security System shall be subject to Sublandlord and Landlord’s reasonable approval, which approval shall not be unreasonably withheld, conditioned or delayed, and (b) notwithstanding anything contained herein to the contrary, upon the expiration or earlier termination of this Sublease, Subtenant shall remove all of Subtenant’s Security Systems from the Subleased Premises and repair any damage caused by such removal. At Subtenant’s sole cost, and subject to obtaining the prior written consent of Landlord, Subtenant shall be permitted to tie Subtenant’s Security System into the Building systems if requested by Subtenant provided that Subtenant’s Security System does not materially and adversely interfere with the Building systems.
22.Notices: Any notice by either party to the other required, permitted or provided for herein shall be valid only if in writing and shall be deemed to be duly given only if (a) delivered personally, or (b) sent by means of Federal Express, UPS Next Day Air or another reputable express mail delivery service guaranteeing next day delivery, (c) sent by United States certified or registered mail, return receipt requested, addressed; or (d) to the extent permitted by law, by email, confirmed; provided however that any such notice shall be deemed given immediately upon being sent and received, if the notice is sent on a business day within the hours of 9:00 A.M. through 5:00 P.M. Mountain of the time in effect at the place of receipt, or at 9:00 A.M. Mountain on the next business day thereafter if the notice is sent later than 5:00 P.M. Mountain: (i) if to Sublandlord, at the following addresses:
|
Traeger Pellet Grills, LLC
Attn: General Counsel
1215 E Wilmington Ave
Salt Lake City, UT 84106
Email: legal@traegergrills.com
|
||
with a copy to:
|
Jones Waldo
170 S. Main Street, Suite 1500
Salt Lake City, Utah 84101
Attn: Keven Rowe
Email: krowe@joneswaldo.com
|
||
17
and (ii) if to Subtenant, at the following address:
Verkada Inc.
405 E 4th Ave
San Mateo, CA 94401
Attn: Director of Real Estate
Email: matt.mohamed@verkada.com
with a copy to:
|
Valence Law Group, PC
Attn: Krista Kim
Email: krista@valencelaw.com
|
||
or at such other address for either party as that party may designate by notice to the other. A notice shall be deemed given and effective, if delivered personally, upon hand delivery or refusal thereof (unless such delivery takes place after hours or on a holiday or weekend, in which event the notice shall be deemed given on the next succeeding business day), if sent via overnight courier, on the business day next succeeding delivery to the courier, and if mailed by United States certified or registered mail, three (3) business days following such mailing in accordance with this Section.
23.Brokers. Subtenant represents that it has dealt directly with and only with Jones Lang LaSalle Americas, Inc. (“Subtenant’s Broker”), as a broker in connection with this Sublease. Sublandlord represents that it has dealt directly with and only with Newmark (“Sublandlord’s Broker”), as a broker in connection with this Sublease. Sublandlord and Subtenant shall indemnify and hold each other harmless from all claims of any brokers other than Sublandlord’s Broker claiming to have represented Sublandlord and Subtenant’s Broker claiming to have represented Subtenant in connection with this Sublease. Sublandlord’s Broker and Subtenant’s Broker shall be paid any fees or commissions in connection with this Sublease pursuant to separate agreements.
24.Complete Agreement. There are no representations, warranties, agreements, arrangements or understandings, oral or written, between the parties or their representatives relating to the subject matter of this Sublease which are not fully expressed in this Sublease. This Sublease cannot be changed or terminated nor may any of its provisions be waived orally or in any manner other than by a written agreement executed by both parties.
25.Interpretation. Irrespective of the place of execution or performance, this Sublease shall be governed by and construed in accordance with the laws of the State of Utah. If any provision of this Sublease or the application thereof to any person or circumstance shall, for any reason and to any extent, be invalid or unenforceable, the remainder of this Sublease and the application of that provision to other persons or circumstances shall not be affected but rather shall be enforced to the extent permitted by law. The table of contents, captions, headings and titles, if any, in this Sublease are solely for convenience of reference and shall not affect its interpretation. This Sublease shall be construed without regard to any presumption or other rule requiring construction against the party causing this Sublease or any part thereof to be drafted. If any words or phrases in this Sublease shall have been stricken out or otherwise eliminated, whether or not any other words or phrases have been added, this Sublease shall be construed as if the words or phrases so stricken out or otherwise eliminated were never included in this Sublease and no implication or inference shall be drawn from the fact that said words or phrases were so stricken out or otherwise eliminated. Each covenant, agreement, obligation or other provision of this Sublease shall be deemed and construed as a separate and independent covenant of the party
18
bound by, undertaking or making same, not dependent on any other provision of this Sublease unless otherwise expressly provided. All terms and words used in this Sublease, regardless of the number or gender in which they are used, shall be deemed to include any other number and any other gender as the context may require. The word “person” as used in this Sublease shall mean a natural person or persons, a partnership, a corporation or any other form of business or legal association or entity.
26.USA Patriot Act Disclosures. Subtenant is currently in compliance with and shall at all times during the Term remain in compliance with the regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury (including those named on OFAC’s Specially Designated and Blocked Persons List) and any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action relating thereto.
27.Counterparts. This Sublease may be executed in multiple counterparts, each of which is deemed an original but which together constitute one and the same instrument. This Sublease shall be fully executed when each party whose signature is required has signed and delivered to each of the parties at least one counterpart, even though no single counterpart contains the signatures of all of the parties hereto. This Sublease may be executed in so-called “pdf” format and each party has the right to rely upon a pdf counterpart of this Sublease signed by the other party to the same extent as if such party had received an original counterpart.
[Signatures appear on the following page]
19
IN WITNESS WHEREOF, the parties hereto hereby execute this Sublease as of the Effective Date.
SUBLANDLORD:
TRAEGER PELLET GRILLS, LLC,
a Delaware limited liability company
By: /s/ Jeremy Andrus
Name: Jeremy Andrus
Title: CEO
By: /s/ Dominic Blosil
Name: Dominic Blosil
Title: CFO
SUBTENANT:
VERKADA, INC.,
a Delaware limited liability company
By: /s/ Kameron Rezai
Name: Kameron Rezai
Title: CFO
S-1
EXHIBIT A
Phase I and Phase II Subleased Premises
Phase III Subleased Premises
A-1
First Floor Shop – 1,255 SF
This plan represents a depiction of the location of the subject space but not a representation of the size or location of specific improvements or features of such space (such as, by way of example, furniture, doors and interior walls).
A-2
EXHIBIT B
INTENTIONALLY DELETED
B-1
EXHIBIT C
Commencement Date Letter Agreement
Date ______________________
Subtenant Verkada, Inc.
Address ______________________
______________________
______________________
Re: Commencement Date Letter Agreement with respect to that certain Sublease dated as of __________, 2021, by and between TRAEGER PELLET GRILLS, LLC, a Delaware limited liability, as Sublandlord, and VERKADA, INC., a Delaware corporation, as Subtenant, for 51,151 rentable square feet comprising the entire Subleased Premises within the Building located at1215 East Wilmington Avenue in Salt Lake City, Utah.
Dear __________________:
In accordance with the terms and conditions of the above referenced Sublease, Subtenant accepts possession of the Subleased Premises and agrees:
1. The Commencement Date is __________. The Phase II Delivery Date is ________________ and the Phase III Delivery Date is _______________, 2022; and
2. The Expiration Date of the Term is June 30, 2026.
Please acknowledge your acceptance of possession and agreement to the terms set forth above by signing this Commencement Letter in the space provided and returning a fully executed counterpart (a scanned signature sent in PDF or similar format will suffice) to my attention.
Sincerely,
___________________________________
Sublandlord Authorized Signatory
Agreed and Accepted:
Subtenant: ______________________
By: [EXHIBIT - - DO NOT SIGN]
Name: __________________________
Title: __________________________
Date: __________________________
C-1
EXHIBIT D
LEASE
by and between
WILMINGTON GARDENS GROUP L.L.C.,
a Utah limited liability company
as Landlord
and
TRAEGER PELLET GRILLS LLC,
a Delaware limited liability company
as Tenant
for
SUITE 200
1215 EAST WILMINGTON AVENUE
SALT LAKE CITY, UTAH
WILMINGTON GARDENS – 1215 EAST WILMINGTON AVENUE– SALT LAKE CITY, UTAH
TABLE OF CONTENTS
|
ARTICLE I. BASIC LEASE PROVISIONS; ENUMERATION OF EXHIBITS
|
3 | ||||
|
SECTION 1.01 BASIC LEASE PROVISIONS
|
3 | ||||
|
SECTION 1.02 SIGNIFICANCE OF A BASIC LEASE PROVISION
|
8 | ||||
|
SECTION 1.03 ENUMERATION OF EXHIBITS
|
8 | ||||
|
ARTICLE II. GRANT AND LEASED PREMISES
|
8 | ||||
|
SECTION 2.01 LEASED PREMISES
|
8 | ||||
|
SECTION 2.02 DEFINITION OF LEASE YEAR
|
8 | ||||
|
SECTION 2.03 NOTICES
|
8 | ||||
|
SECTION 2.04 EXCUSE OF LANDLORD’S PERFORMANCE
|
8 | ||||
|
ARTICLE III. RENT
|
8 | ||||
|
SECTION 3.01 BASE MONTHLY RENT
|
8 | ||||
D-1
|
SECTION 3.02 ESCALATION
|
9 | ||||
|
SECTION 3.03 TENANT’S PRO-RATA SHARE OF SPECIFIED PROJECT AREA BASE YEAR OPERATING EXPENSES, SPECIFIED BUILDING AREA BASE YEAR OPERATING EXPENSES AND SPECIFIED OFFICE AREA BASE YEAR OPERATING EXPENSES
|
9 | ||||
|
SECTION 3.04 TAXES
|
10 | ||||
|
SECTION 3.05 PAYMENTS
|
11 | ||||
|
ARTICLE IV. RENTAL TERM, COMMENCEMENT DATE & PRELIMINARY TERM
|
11 | ||||
|
SECTION 4.01 RENTAL TERM
|
11 | ||||
|
SECTION 4.02 RENTAL TERM COMMENCEMENT DATE
|
11 | ||||
|
SECTION 4.03 PRELIMINARY TERM
|
11 | ||||
|
ARTICLE V. LANDLORD’S WORK, FINANCING OF IMPROVEMENTS, TENANT’S POSSESSION DATE AND CANCELLATION
|
11 | ||||
|
SECTION 5.01. CONSTRUCTION OF LEASED PREMISES BY LANDLORD
|
11 | ||||
|
SECTION 5.02. DELIVERY OF POSSESSION FOR TENANT’S WORK
|
11 | ||||
|
SECTION 5.04. ALTERATIONS AND ADDITIONS
|
11 | ||||
|
ARTICLE V. CONSTRUCTION OF LEASED PREMISES
|
11 | ||||
|
ARTICLE VI. TENANT’S WORK & LANDLORD’S CONTRIBUTION
|
11 | ||||
|
SECTION 6.01 CONSTRUCTION OF LEASED PREMISES BY TENANT
|
11 | ||||
|
SECTION 6.02 SETTLEMENT OF DISPUTES
|
12 | ||||
|
ARTICLE VII. USE
|
12 | ||||
|
SECTION 7.01 PERMITTED USE OF LEASED PREMISES
|
12 | ||||
|
SECTION 7.02 HAZARDOUS SUBSTANCES
|
12 | ||||
|
ARTICLE VIII. OPERATION AND MAINTENANCE OF COMMON AREAS
|
13 | ||||
|
SECTION 8.01 CONSTRUCTION AND CONTROL OF COMMON AREAS
|
13 | ||||
|
SECTION 8.02 LICENSE
|
13 | ||||
|
SECTION 8.03 AUDIT
|
13 | ||||
|
ARTICLE IX. ALTERATIONS, SIGNS, LOCKS & KEYS
|
14 | ||||
|
SECTION 9.01 ALTERATIONS
|
14 | ||||
|
SECTION 9.02 SIGNS
|
14 | ||||
D-2
|
SECTION 9.03 LOCKS AND KEYS
|
14 | ||||
|
ARTICLE X. MAINTENANCE AND REPAIRS; ALTERATIONS; ACCESS
|
14 | ||||
|
SECTION 10.01 LANDLORD’ S OBLIGATION FOR MAINTENANCE
|
14 | ||||
|
SECTION 10.02 TENANT’S OBLIGATION FOR MAINTENANCE
|
14 | ||||
|
SECTION 10.03 SURRENDER AND RIGHTS UPON TERMINATION
|
14 | ||||
|
ARTICLE XI. INSURANCE AND INDEMNITY
|
15 | ||||
|
SECTION 11.01 LIABILITY INSURANCE AND INDEMNITY
|
15 | ||||
|
SECTION 11.02 FIRE AND CASUALTY INSURANCE
|
15 | ||||
|
SECTION 11.03 WAIVER OF SUBROGATION
|
15 | ||||
|
SECTION 11.04
|
15 | ||||
|
ARTICLE XII UTILITY CHARGES
|
16 | ||||
|
SECTION 12.01 OBLIGATION OF LANDLORD
|
16 | ||||
|
SECTION 12.02 OBLIGATIONS OF TENANT
|
16 | ||||
|
SECTION 12.03. EXTRA HOURS CHARGES
|
17 | ||||
|
SECTION 12.04. LIMITATIONS ON LANDLORDS LIABILITY
|
17 | ||||
|
ARTICLE XIII. OFF-SET STATEMENT, ATTORNMENT AND SUBORDINATION
|
17 | ||||
|
SECTION 13.01 OFF-SET STATEMENT
|
17 | ||||
|
SECTION 13.02 ATTORNMENT
|
17 | ||||
|
SECTION 13.03 SUBORDINATION
|
17 | ||||
|
SECTION 13.04 MORTGAGEE SUBORDINATION
|
17 | ||||
|
SECTION 13.05 REMEDIES
|
17 | ||||
|
ARTICLE XIV. ASSIGNMENT
|
17 | ||||
|
SECTION 14.01 ASSIGNMENT
|
17 | ||||
|
ARTICLE XV. WASTE OR NUISANCE
|
18 | ||||
|
SECTION 15.01 WASTE OR NUISANCE
|
18 | ||||
|
ARTICLE XVI. NOTICES
|
18 | ||||
|
SECTION 16.01 NOTICES
|
18 | ||||
D-3
|
ARTICLE XVII. DESTRUCTION OF THE LEASED PREMISES
|
18 | ||||
|
SECTION 17.01 DESTRUCTION
|
18 | ||||
|
ARTICLE XVIII. CONDEMNATION
|
18 | ||||
|
SECTION 18.01 CONDEMNATION
|
18 | ||||
WILMINGTON GARDENS – 1215 EAST WILMINGTON AVENUE – SALT LAKE CITY, UTAH
TABLE OF CONTENTS
|
ARTICLE XIX. DEFAULT OF TENANT
|
19 | ||||
|
SECTION 19.01 DEFAULT - RIGHT TO RE-ENTER
|
19 | ||||
|
SECTION 19.02 DEFAULT - RIGHT TO RE-LET
|
19 | ||||
|
SECTION 19.03 LEGAL EXPENSES
|
19 | ||||
|
ARTICLE XX. BANKRUPTCY, INSOLVENCY OR RECEIVERSHIP
|
19 | ||||
|
SECTION 20.01 ACT OF INSOLVENCY, GUARDIANSHIP, ETC.
|
19 | ||||
|
ARTICLE XXI. LANDLORD ACCESS
|
20 | ||||
|
SECTION 21.01 LANDLORD ACCESS
|
20 | ||||
|
ARTICLE XXII. TENANT’S PROPERTY AND LANDLORD’S LIEN
|
20 | ||||
|
SECTION 22.01. TAXES ON LEASEHOLD
|
20 | ||||
|
SECTION 22.02. LOSS AND DAMAGE
|
20 | ||||
|
SECTION 22.03. NOTICE BY TENANT
|
20 | ||||
|
SECTION 22.04 LANDLORD’S LIEN
|
20 | ||||
|
SECTION 22.05. LANDLORD’S SUBORDINATION
|
20 | ||||
|
ARTICLE XXIII. HOLDING OVER
|
20 | ||||
|
SECTION 23.01 HOLDING OVER
|
20 | ||||
|
SECTION 23.02 SUCCESSORS
|
20 | ||||
|
ARTICLE XXIV. RULES AND REGULATIONS
|
20 | ||||
|
SECTION 24.01 RULES AND REGULATIONS
|
20 | ||||
D-4
|
ARTICLE XXV. QUIET ENJOYMENT
|
21 | ||||
|
SECTION 25.01 QUIET ENJOYMENT
|
21 | ||||
|
ARTICLE XXVI. SECURITY DEPOSIT
|
21 | ||||
|
SECTION 26.01 SECURITY DEPOSIT
|
21 | ||||
|
ARTICLE XXVII. MISCELLANEOUS PROVISIONS
|
21 | ||||
|
SECTION 27.01 WAIVER
|
21 | ||||
|
SECTION 27.02 ENTIRE LEASE AGREEMENT
|
21 | ||||
|
SECTION 27.03 FORCE MAJEURE
|
21 | ||||
|
SECTION 27.04 LOSS AND DAMAGE
|
21 | ||||
|
SECTION 27.05 ACCORD AND SATISFACTION
|
21 | ||||
|
SECTION 27.06 NO OPTION
|
21 | ||||
|
SECTION 27.07 ANTI-DISCRIMINATION
|
22 | ||||
|
SECTION 27.08 SEVERABILITY
|
22 | ||||
|
SECTION 27.09 OTHER MISCELLANEOUS PROVISIONS
|
22 | ||||
|
SECTION 27.10 REPRESENTATION REGARDING AUTHORITY
|
22 | ||||
|
SECTION 27.11. TENANT CERTIFICATION
|
22 | ||||
|
ARTICLE XXVIII. ADDITIONAL PROVISIONS
|
22 | ||||
|
SECTION 28.01. OPTION TO RENEW
|
22 | ||||
|
SIGNATURES
|
24 | ||||
|
ACKNOWLEDGMENT OF LANDLORD
|
24 | ||||
|
ACKNOWLEDGMENT OF TENANT
|
25 | ||||
LEASE AGREEMENT
(hereinafter “Lease”)
ARTICLE I. BASIC LEASE PROVISIONS; ENUMERATION OF EXHIBITS
SECTION 1.01 BASIC LEASE PROVISIONS.
| (A) |
EFFECTIVE DATE: January 23, 2015 (“Effective Date”)
|
||||
D-5
| (B) |
LANDLORD: Wilmington Gardens Group L.L.C., a Utah limited liability company (“Landlord”).
|
||||
| (C) |
ADDRESS OF LANDLORD FOR NOTICES (Section 16.01): 2733 East Parleys Way, Suite 300, Salt Lake City, UT 84109.
|
||||
| (D) |
TENANT: Traeger Pellet Grills LLC, a Delaware limited liability company (Tax ID: 20-4005368)
|
||||
| (E) | ADDRESS OF TENANT FOR NOTICES (Section 16.01): | ||||
From the period commencing on the Effective Date until the date on which Tenant has opened for business from the Leased Premises:
Traeger Grills
Attention: Jeremy Andrus
1845 Yalecrest Avenue
Salt Lake City, Utah 84108
With a Copy To:
Jones Waldo Holbrook & McDonough, PC
Attention: Keven M. Rowe
170 S. Main Street, Suite 1500
Salt Lake City, Utah 84101
Following the date on which Tenant has opened for business from the Leased Premises:
Traeger Grills
Attention: Jeremy Andrus
1215 East Wilmington Avenue
Suite 200
Salt Lake City, Utah 84106
With a Copy To:
Jones Waldo Holbrook & McDonough, PC
Attention: Keven M. Rowe
170 S. Main Street, Suite 1500
Salt Lake City, Utah 84101
| (F) |
PERMITTED USE (Section 7.01): General office use including product research and design (“Permitted Use”). Notwithstanding any term or provision of this Lease to the contrary, the Permitted Use shall include the right to operate wood pellet burning stoves, smokers, barbeques and other associated equipment within the outdoor patio during Tenant’s business hours, Monday through Friday, and at any time during weekends and holidays (the “BBQ Use”).
|
||||
| (G) |
TENANT’S TRADE NAME (Exhibit “E” - Sign Criteria): Traeger Grills
|
||||
D-6
| (H) |
BUILDING (Section 2.01): Wilmington Gardens, consisting of one (1) building situated at 1215 East Wilmington Avenue in Salt Lake City, County of Salt Lake, State of Utah (“Building”). The gross rentable area of the Building (as defined in Section 2.01) is approximately 80,298 square feet. The Building is part of a larger mixed use development which is specifically described in Exhibit “B” and depicted in Exhibit “A” both of which are attached hereto and by this reference incorporated herein (the “Project”).
|
||||
| (I) |
LEASED PREMISES (Section 2.01): That portion of the Building (as defined in Section 2.01) at the approximate location outlined on Exhibit “A-l” known as Suite 200, consisting of approximately 28,740 square feet of gross rentable area plus an adjacent outdoor patio depicted on Exhibit “A-l” attached hereto and by this reference incorporated herein and further described in Section 1.01 (AA) below. (“Leased Premises”). App.roximately eight and one hundred and forty-eight thousandths percent (8.148%) of such area is Tenant’s proportionate share of Common Area (as defined in Section 8.01) hallways, restrooms, etc. in the Building and Project. Outdoor patio area has been excluded from the calculation of Tenant’s pro-rata share.
|
||||
| (J) |
DELIVERY OF POSSESSION (Section 5.02): The Leased Premises shall be delivered to Tenant on or within five (5) days of the Effective Date of this Lease (“Delivery of Possession”). Preliminary Term (as defined in Section 4.03) begins on Delivery of Possession.
|
||||
| (K) |
RENTAL TERM, COMMENCEMENT AND EXPIRATION DATE (Sections 4.01 & 4.02): The term of this Lease shall commence on the earlier to occur of (a) July 1, 2015 or (b) the date Tenant opens for business at the Leased Premises (“Rental Term Commencement Date”), and shall be for a period of ten (10) full Lease Years (as defined in Section 2.02) and at least nine (9) months (“Rental Term”).
|
||||
| (L) |
BASE MONTHLY RENT (Section 3.01): Sixty-Five Thousand Eight Hundred Sixty-Two and 50/100 Dollars ($65,862.50) (“Base Monthly Rent”).
|
||||
| (M) | ESCALATIONS IN BASE MONTHLY RENT (Section 3.02): | ||||
D-7
| Escalation Timeline | Base Monthly Rent | |||||||
|
Commencing as of the 1st day of the Rental Term Commencement Date and continuing through the last day of the 9th month Base Monthly Rent shall be $0.00.
|
||||||||
|
Commencing the 1st day of the 10th month after the Rental Term Commencement Date
|
||||||||
| $65,862.50 | ||||||||
|
Commencing the 1st day of the 14th month after the Rental Term Commencement Date
|
||||||||
| $67,838.38 | ||||||||
|
Commencing the 1st day of the 26th month after the Rental Term Commencement Date
|
||||||||
| $69,873.53 | ||||||||
|
Commencing the 1st day of the 38th month after the Rental Term Commencement Date
|
||||||||
| $71,969.73 | ||||||||
|
Commencing the 1st day of the 50th month after the Rental Term Commencement Date
|
||||||||
| $74,128.82 | ||||||||
|
Commencing the 1st day of the 62nd month after the Rental Term Commencement Date
|
||||||||
| $75,611.40 | ||||||||
|
Commencing the 1st day of the 74th month after the Rental Term Commencement Date
|
||||||||
| $77,123.63 | ||||||||
|
Commencing the 1st day of the 86th month after the Rental Term Commencement Date
|
||||||||
| $78,666.10 | ||||||||
|
Commencing the 1st day of the 98th month after the Rental Term Commencement Date
|
||||||||
| $80,239.42 | ||||||||
|
Commencing the 1st day of the 110th month after the Rental Term Commencement Date
|
||||||||
| $81,844.21 | ||||||||
|
Commencing the 1st day of the 122nd month after the Rental Term Commencement Date
|
||||||||
| $83,481.10 | ||||||||
| (N) |
LANDLORD’S SHARE OF BASE YEAR OPERATING EXPENSES (Section 3.03): Landlord shall pay all Operating Expenses (as defined in Section 3.03) for the first twelve (12) months of the Rental Term for: (i) the Specified Project Area Base Year Operating Expenses (hereafter defined); (ii) the Specified Building Area Base Year Operating Expenses (hereafter defined); and (iii) the Specified Office Area Base Year Operating Expenses (hereafter defined) (the Specified Project Area Base Year Operating Expenses, the Specified Building Area Base Year Operating Expenses and the Specified Office Area Base Year Area Expenses are collectively referred to as the “Base Year Operating Expenses”).
|
||||
| (i) | The term “Specified Project Area Base Year Operating Expenses” shall mean the Operating Expenses for the first twelve (12) months of the Rental Term associated with the area depicted on Exhibit “G”, labeled as the “Specified Project Area” and containing approximately 216,906 square feet of gross rentable area. | |||||||
D-8
| (ii) | The term “Specified Project Area Operating Expenses” shall mean the Operating Expenses for any Lease Year following the first twelve (12) months of the Rental Term which are associated with the Specified Project Area. | |||||||
| (iii) | The term “Specified Building Area Base Year Operating Expenses” shall mean the Operating Expenses for the first twelve (12) months of the Rental Term associated with the area depicted on Exhibit “G”, labeled as the “Specified Building Area” and containing approximately 80,298 square feet of gross rentable area. | |||||||
| (iv) | The term “Specified Building Area Operating Expenses” shall mean the Operating Expenses for any Lease Year following the first twelve (12) months of the Rental Term which are associated with the Specified Building Area. | |||||||
| (v) | The term “Specified Office Area Base Year Operating Expenses” shall mean the Operating Expenses for the first twelve (12) months of the Rental Term associated with the area depicted on Exhibit “G”, labeled as the “Specified Office Area” and containing approximately 60,485 square feet of gross rentable area. | |||||||
| (vi) | The term “Specified Office Area Operating Expenses” shall mean the Operating Expenses for any Lease Year following the first twelve (12) months of the Rental Term which are associated with the Specified Office Area. | |||||||
| (O) | TENANT’S PRO-RATA SHARE OF SPECIFIED PROJECT AREA BASE YEAR OPERATING EXPENSES, SPECIFIED BUILDING AREA BASE YEAR OPERATING EXPENSES AND SPECIFIED OFFICE AREA BASE YEAR OPERATING EXPENSES (Section 3.03): | ||||
| (i) | As more particularly set forth in Section 3.03 of this Lease, to the extent the amount of the Specified Project Area Operating Expenses for any Lease Year during the Rental Term exceed the amount of the Specified Project Area Base Year Operating Expenses, Tenant’s pro-rata share of the amount of such excess (if any) shall be thirteen and two hundred fifty thousandths percent (13.250%) (“Tenant’s Share of Project Area Operating Expenses”). | |||||||
| (ii) | As more particularly set forth in Section 3.03 of this Lease, to the extent the amount of the Specified Building Area Operating Expenses for any Lease Year during the Rental Term exceed the amount of the Specified Building Area Base Year Operating Expenses, Tenant’s pro-rata share of the amount of such excess (if any) shall be thirty-five and seven hundred ninety-two thousandths percent (35.792%) (“Tenant’s Share of Building Area Operating Expenses”). | |||||||
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| (iii) | As more particularly set forth in Section 3.03 of this Lease, to the extent the amount of the Specified Office Area Operating Expenses for any Lease Year during the Rental Term exceed the amount of the Specified Office Area Base Year Operating Expenses, Tenant’s pro-rata share of the amount of such excess (if any) shall be forty-seven and five hundred and sixteen thousandths percent (47.516%) (“Tenant’s Share of Office Area Operating Expenses”). | |||||||
| (iv) | If it at any time(s) during the Rental Term the gross rentable area of any of the following shall change, the percentages set forth in this Section 1.01(O)(i)-(iii) and any other corresponding sections of this Lease shall be adjusted on a pro-rata basis to reflect such gross rentable area: (a) the Leased Premises, (b) the Specified Project Area, (c) the Specified Building Area, or (d) the Specified Office Area. | |||||||
| (P) |
RESPONSIBILITY FOR UTILITIES AND SERVICES: Subject to the provisions of Section 3.03, this Lease provides that the utilities and services shall be paid by the party shown below:
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Heat:
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Landlord
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Real Property Taxes:
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Landlord
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Water:
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Landlord
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Personal Property Taxes:
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Tenant
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Telephone:
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Tenant
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Janitorial:
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Tenant
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Electricity:
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Landlord
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Building Casualty Insurance:
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Landlord
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Common Area Maintenance:
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Landlord
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Personal Property Insurance:
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Tenant
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Liability Ins.-Leased Premises:
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Tenant
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Liability Ins.-Common Area:
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Landlord
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Maintenance and Operations of Outdoor
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Patio Snow Melt System:
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Tenant
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Landlord shall arrange for utility services for the Leased Premises except that telephone services shall be contracted for directly by Tenant. Landlord may separately sub-meter or monitor utilities to the extent Landlord may determine.
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| (Q) |
EXCESS HOUR UTILITY CHARGES AND HOURS OF OPERATION (Section 12.03): Standard operating hours for the Building shall be 7:00 a.m. to 7:00 p.m. Monday through Friday and 8:00 a.m. to 12:00 p.m. on Saturday, excluding holidays. To the extent Tenant operates up to twenty (20) hours in excess of the standard operating hours (as specified above) during any calendar week, calculated from Monday through Sunday, Tenant shall pay an extra hourly utility charge of Twelve and 50/100 Dollars ($12.50) per hour for mechanical/HVAC system use during which Tenant operates, with a two (2) hour minimum charge. To the extent Tenant operates in excess of twenty (20) hours of the standard operating hours (as specified above) during any calendar week, calculated from Monday through Sunday, Tenant shall pay an extra hourly utility charge of Twenty-Five and 00/100 Dollars ($25.00) per hour for mechanical/HVAC system use during which Tenant operates. For purposes of determining the amount of the charge for excess operating hours, the excess operating hours shall be reset and recalculated each calendar week and any excess operating hours will not carry over to the following week. By way of illustration only, in the event Tenant operates for twenty-five (25) hours in excess of the standard operating hours during a given calendar week, Tenant’s excess operating utility charge would be $375.00 for such calendar week (20 hours charged at $12.50, and 5 hours charged at $25.00). Tenant shall have access to the Building twenty-four (24) hours a day, seven (7) days per week via card access key.
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| (R) | Intentionally Omitted. | ||||
| (S) |
PARKING (Section 2.01): Upon completion of the parking garage located across Wilmington Avenue, Tenant shall be granted a parking ratio of four (4) parking stalls per 1,000 rentable square feet leased in the parking garage south of the Building. Within that parking allocation, Tenant may lease up to an additional five (5) reserved parking stalls located in the underground parking beneath the Building, at a cost of Forty-Five Dollars ($45.00) per parking stall month. Such charge shall be increased by three percent (3%) per year. Such reserved spaces shall be at locations to be designated by Landlord.
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Prior to the completion of the Project’s parking garage, a majority of Tenant’s parking stalls shall be located in the underground parking beneath the Building with the remainder to be located in the parking garage for Westminster On The Draw (located slightly to the east) and in the surface lot southeast of the Building.
| (T) |
PREPAID RENT: Sixty-Five Thousand Eight Hundred Sixty-Two and 50/100 Dollars ($65,862.50), paid upon execution of this Lease to be applied to the first installment of Base Monthly Rent due hereunder.
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| (U) |
SECURITY DEPOSIT (Section 26.01): Eighty-Five Thousand and 00/100 Dollars ($85,000.00) (“Security Deposit”).
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| (V) | Intentionally Omitted. | ||||
| (W) | Intentionally Omitted. | ||||
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| (X) |
OPTION TO RENEW (Section 28.01): Provided Tenant is not, and has not been (more than two (2) times), in default under any of the terms and conditions contained herein, Tenant shall have two (2) additional consecutive five (5) year options to renew and extend the Rental Term as provided herein (“Option”). The Option shall only be exercised by Tenant delivering written notice thereof to Landlord no earlier than the date which is twelve (12) months prior to the expiration of the Rental Term and no later than the date which is nine (9) months prior to the expiration of the Rental Term (the “Option Notice”). The Base Monthly Rent during the first year of each extension periods shall be the lesser of: (i) the then current Fair Market Rate (as defined) for comparable space within the Project, and (ii) the Base Monthly Rent then in effect for the Leased Premises during the last month of the initial Rental Term (increasing each year thereafter by three percent (3%) compounded). “Fair Market Rate” means the market rate for rent chargeable for the Leased Premises based upon the following factors applicable to the Leased Premises or any comparable premises: rent, escalation, term, size, expense stop, tenant allowance, existing tenant finishes, parking availability, and location and proximity to services.
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Within thirty (30) days of Option Notice, Tenant shall notify Landlord of Tenant’s option of Fair Market Rate for the applicable renewal period. If Landlord disagrees with Tenant’s opinion of the Fair Market Rate, Landlord shall notify Tenant of Landlord’s opinion of Fair Market Rate within fifteen (15) days after receipt of Tenant’s opinion of Fair Market Rate (“Landlord’s Value Notice”). If the parties are unable to resolve their differences within thirty (30) days thereafter, Landlord or Tenant, at its sole option, may terminate this Lease, effective as of the last day of the then-current Rental Term. Alternatively, Tenant and Landlord may mutually agree to submit the determination of Fair Market Rate to a “Market Assessment Process,” as provided in Exhibit “F” — Market Assessment Process.
| (Y) |
RIGHT TO TERMINATE: (Section 28.02): Provided Tenant is not, and has not been (more than two (2) times), in default beyond any applicable cure period under any of the terms and provisions contained herein, Tenant shall have the right to terminate this Lease on or after the last day of the seventy-eighth (78th) full calendar month of the Rental Term. Tenant shall provide Landlord with three hundred sixty-five (365) days prior written notice of its intent to exercise this right to terminate. At the time Tenant gives it’s notice of its exercise of this right, Tenant shall pay a termination fee equal to the unamortized total of the following: TI Allowance, leasing commissions and Base Monthly Rent abatement, calculated at an eight percent (8%) per annum interest rate.
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| (Z) |
RIGHT OF FIRST OFFER TO LEASE CONTIGUOUS SPACE: From the Effective Date of this Lease until the expiration of the Rental Term, and any Rental Term extension thereto, Tenant shall have an one-time right of first offer to lease space adjacent and contiguous to the Leased Premises when such applicable space becomes available for lease as provided herein (hereinafter “First Offer Space”). For purposes hereof, the First Offer Space (or any applicable portion thereof) shall become available for lease by Tenant immediately prior to the first time after the date hereof that Landlord intends to market the First Offer Space (or such applicable portion thereof). Landlord shall give Tenant written notice that the First Offer Space (or portion thereof) shall or has become available for lease by Tenant. Tenant shall have ten (10) business days to exercise its option to lease the First Offer Space by delivering to Landlord written notice of its intent to do so. Failure of Tenant to timely deliver written notice shall be deemed a refusal by Tenant. Thereafter, Landlord shall be entitled to lease the first offer space to other tenants without restriction.
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Any additional office space leased by Tenant within the Building during the first twenty-four (24) months of the initial Rental Term shall be at the same terms and
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conditions, including Tenant improvement allowance and rent concessions, if any, adjusted to correspond with the Rental Term. Additional terms and conditions shall be addressed in the lease document.
In the event Tenant exercises its option to lease the First Officer Space, Landlord and Tenant shall endeavor to execute, within thirty (30) days thereafter, an amendment to this Lease for such First Offer Space upon the terms and conditions as set forth by Landlord in its offer to Tenant to lease such First Offer Space.
| (AA) |
OUTDOOR PATIO: Tenant shall be permitted the exclusive use of the outdoor patio depicted in Exhibit “A-l”. Tenant shall be responsible for policing, maintaining and insuring the outdoor patio as part of the Leased Premises. Tenant shall be responsible for the operation and maintenance of the patio heating/snow melting system including the utilities to operate the system (the “Snow Melt System”), which shall be separately metered and passed through to Tenant on a direct basis. The Snow Melt System shall be provided as part of Landlord’s Work, at Landlord’s sole cost and expense. In addition, Tenant shall have the right to build a storage area on the Outdoor Patio at Tenant’s sole cost. This storage space will not be an additional charge to the Tenant.
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| (BB) | Intentionally Omitted. | ||||
| (CC) |
TENANT IMPROVEMENT ALLOWANCE (Exhibit “C-1”): Landlord shall provide Tenant an improvement allowance of an amount not to exceed One Million Five Hundred Twenty-Three Thousand Two Hundred Twenty and 00/100 dollars ($1,523,220.00) in accordance with Exhibit “C-l” attached hereto (the “TI Allowance”). The TI Allowance shall be used exclusively towards architectural, engineering, CDs and overall construction of the Leased Premises. In addition to the TI Allowance, Landlord shall install the Snow Melt System, as outlined on Exhibit “C”, on approximately 3,600 SF of the outdoor patio area (total outdoor patio area is approximately 6,160-sf). The west portion of the outdoor patio shall be heated and fifty percent (50%) of the balance of the unheated portion of the outdoor patio shall be green scape.
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| (DD) |
TEST FIT ALLOWANCE: Landlord shall provide Tenant with an initial test fit allowance not to exceed $0.10 per rentable square foot (totaling $2,874.00), which shall be part of (and not in addition to) the TI Allowance.
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| (EE) |
UNDERGROUND STORAGE PLAN (Exhibit “A-2”): Landlord shall provide to Tenant for storage a four hundred (400) square foot fenced area within the underground parking garage, as depicted on Exhibit “A-2”. Tenant shall lease the storage area at a cost of Two Thousand Four Hundred and No/100 ($2,400.00) annually. Such charge shall be increased by three percent (3%) per Lease Year. Landlord reserves the right to relocate Tenant’s fenced storage area elsewhere within the underground parking garage. Tenant shall have the right to terminate the lease for the storage area at any time following the first year of the Rental Term by delivering written notice of such election to Landlord. In addition, Tenant shall have the right to build a storage area on the Outdoor Patio at Tenant’s cost. This space will not be an additional charge to the Tenant.
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[Remainder of Page Intentionally Left Blank]
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SECTION 1.02 SIGNIFICANCE OF A BASIC LEASE PROVISION. The foregoing provisions of Section 1.01 summarize for convenience only certain fundamental terms of this Lease delineated more fully in the articles and sections referenced therein. In the event of a conflict between the provisions of Section 1.01 and the balance of this Lease, the latter shall control. Additionally, in the event of a conflict between this Lease and the Exhibits, this Lease shall control.
SECTION 1.03 ENUMERATION OF EXHIBITS. The exhibits enumerated in this Section 1.03 and attached to this Lease are incorporated in this Lease by this reference and are to be construed as a part of this Lease.
| EXHIBIT “A” | - | SITE PLAN | ||||||
| EXHIBIT “A-1 | - | LEASE PLAN | ||||||
| EXHIBIT “A-2” | - | UNDERGROUND STORAGE AREA | ||||||
| EXHIBIT “B” | - | LEGAL DESCRIPTION | ||||||
| EXHIBIT “C” | - | LANDLORD’S WORK | ||||||
| EXHIBIT “C-l” | - | LANDLORD’S CONTRIBUTION TO TENANT’S WORK | ||||||
| EXHIBIT “D” | - | TENANT’S WORK | ||||||
| EXHIBIT “E” | - | SIGN CRITERIA | ||||||
| EXHIBIT “E-l” | - | SIGNAGE LOCATION DEPICTION | ||||||
| EXHIBIT “F” | - | MARKET ASSESSMENT PROCESS | ||||||
| EXHIBIT “G” | - | COMMON AREA MAINTENANCE PLAN | ||||||
ARTICLE II. GRANT AND LEASED PREMISES
SECTION 2.01 LEASED PREMISES. In consideration for the rent to be paid and covenants to be performed by Tenant, Landlord hereby leases to Tenant, and Tenant leases from Landlord for the Rental Term and upon the terms and conditions herein set forth, the Leased Premises described in Section 1.01 (I), located in the office building referred to in Section 1.01(H) (“Building”). The legal description for the property on which the Building is located is attached hereto as Exhibit “B”. Gross rentable area measurements herein specified are from the exterior of the perimeter walls of the Building to the center of the interior walls. In addition, the percentage set forth in Section 1.01(I) is the portion of the gross rentable area attributable to Tenant’s proportionate share of common hallways, restrooms, etc. in the Building.
The exterior walls and roof of the Leased Premises and the areas beneath the Leased Premises are not demised hereunder and the use thereof together with the right to install, maintain, use, repair, and replace pipes, ducts, conduits, and wires leading through the Leased Premises in locations which shall not materially interfere with Tenant’s use thereof and serving other parts of the Building or buildings are hereby reserved to Landlord. Landlord reserves (a) such access rights through the Leased Premises as may be reasonably necessary to enable access by Landlord to the balance of the Building and reserved areas and elements as set forth above; and (b) the right to install or maintain meters on the Leased Premises to monitor use of utilities. In exercising such rights, Landlord shall use reasonable efforts so as to not commit waste upon the Leased Premises and as far as practicable to minimize annoyance, interference or damage to Tenant when making modifications, additions or repairs.
Subject to the provisions of Article VIII, Tenant and its customers, agents and invitees have the right to the non-exclusive use, in common with others of such unreserved automobile
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parking spaces, driveways, footways, and other facilities designated for common use within the Building and the Project, except that with respect to non-exclusive areas, Tenant shall cause its employees to park their cars only in areas specifically designated from time to time by Landlord for that purpose and shall actively police employees to keep them from parking in “visitor” or other restricted parking areas. Tenant shall have the option to utilize the adjacent parking structure in accordance with the provisions of Section 1.01(S).
SECTION 2.02 DEFINITION OF LEASE YEAR. “Lease Year” shall include twelve (12) full calendar months of Rental Term.
SECTION 2.03 NOTICES. This Lease, and the tenancy hereby created, shall terminate at the end of the Rental Term, or any Rental Term extension or renewal thereof, without the necessity of any notice from either Landlord or Tenant to terminate the same, and Tenant hereby waives notice to vacate the Leased Premises and agrees that Landlord shall be entitled to the benefit of all provisions of law respecting the summary recovery of possession of the Leased Premises from a tenant holding over to the same extent as if statutory notice has been given.
SECTION 2.04 EXCUSE OF LANDLORD’S PERFORMANCE. Anything in this Lease to the contrary notwithstanding, providing such cause is not due to the willful act or neglect of Landlord, Landlord shall not be deemed in default with respect to the performance of any of the terms, covenants and conditions of this Lease, if same shall be due to any strike, lockout, civil commotion, war-like operation, invasion, rebellion, hostilities, military or usurped power, sabotage, governmental regulations or controls, inability to obtain any material, service or financing, act of God or other cause beyond the control of Landlord.
ARTICLE III. RENT
SECTION 3.01 BASE MONTHLY RENT. Tenant agrees to pay to Landlord the Base Monthly Rent set forth in Section 1.01 (L) at such place as Landlord may designate, without prior demand therefor, without offset or deduction and in advance on or before the first day of each calendar month during the Rental Term, commencing on the Rental Term Commencement Date. In the event the Rental Term Commencement Date occurs on a day other than the first day of a calendar month, then the Base Monthly Rent to be paid on the Rental Term Commencement Date shall include both the Base Monthly Rent for the first full calendar month occurring after the Rental Term Commencement Date, plus the Base Monthly Rent for the initial fractional calendar month pro-rated on a per-diem basis (based upon a thirty (30) day month).
SECTION 3.02 ESCALATION. As set forth in Section 1.01(M).
SECTION 3.03 TENANT’S PRO-RATA SHARE OF SPECIFIED PROJECT AREA BASE YEAR OPERATING EXPENSES, SPECIFIED BUILDING AREA BASE YEAR OPERATING EXPENSES AND SPECIFIED OFFICE AREA BASE YEAR OPERATING EXPENSES.
(a) If the amount of the Specified Project Area Operating Expenses for any Lease Year during the Rental Term exceed the amount of the Specified Project Area Base Year Operating Expenses, Tenant shall pay to Landlord as “Additional Rent” an amount equal to thirteen and two hundred fifty thousandths percent (13.250%) of the amount of such excess (“Tenant’s Share of Project Area Operating Expenses”). If the amount of the Specified Building Area Operating Expenses for any Lease Year during the Rental Term exceed the amount of the Specified Building Area Base Year Operating Expenses, Tenant shall pay to Landlord as “Additional Rent” an amount equal to thirty-five and seven hundred ninety-two thousandths percent (35.792%) of the amount of
D-15
such excess (“Tenant’s Share of Building Area Operating Expenses”). If the amount of the Specified Office Area Operating Expenses for any Lease Year during the Rental Term exceed the amount of the Specified Office Area Base Year Operating Expenses, Tenant shall pay to Landlord as “Additional Rent” an amount equal to forty-seven and five hundred and sixteen thousandths percent (47.516%) of the amount of such excess (“Tenant’s Share of Office Area Operating Expenses”). In addition, beginning as of commencement of the Lease, Tenant shall pay the entire amount of the operating expense for the outdoor heated patio. Such operating expense shall include cost of repairs, replacement, maintenance, power and gas required to operate. Gas supply to be separately metered. Power supply to be separately metered or sub-metered at Landlord’s option. Where sub-metered, Tenant’s pro-rata share shall be equal to the ratio of its measured consumption to the total consumption of the master meter. Landlord, at Landlord’s sole cost and expense, shall be solely responsible for any repairs or replacements for the structural portions of the outdoor patio.
(b) Landlord shall bill Tenant for Tenant’s Share of Project Area Operating Expenses, Tenant’s Share of Building Area Operating Expenses and/or Tenant’s Share of Office Area Operating Expenses, if any, at the end of the second Lease Year of the Rental Term. Beginning with the third Lease Year and continuing thereafter, Landlord shall reasonably estimate Tenant’s Share of Project Area Operating Expenses, Tenant’s Share of Building Area Operating Expenses and/or Tenant’s Share of Office Area Operating Expenses for the next twelve (12) months and one-twelfth (1/12th) of the estimated Tenant’s Share of Project Area Operating Expenses, Tenant’s Share of Building Area Operating Expenses and/or Tenant’s Share of Office Area Operating Expenses, if any, shall be added to the Base Monthly Rent as determined in Sections 3.01 and 3.02 for the next full twelve (12) calendar months of the Rental Term and shall be paid as set forth in Section 3.05. With respect to the Snow Melt System, Landlord shall bill Tenant monthly, and payment shall be due within ten (10) days of Tenant’s receipt of Landlord’s invoice therefor.
(c) To the extent that Tenant’s Share of Project Area Operating Expenses, Tenant’s Share of Building Area Operating Expenses and/or Tenant’s Share of Office Area Operating Expenses is less or greater than the estimated amount paid by Tenant during the Lease Year, Tenant shall be entitled to a reimbursement or shall pay the deficiency as the case may be. Landlord shall determine the actual Tenant’s Share of Project Area Operating Expenses, Tenant’s Share of Building Area Operating Expenses and/or Tenant’s Share of Office Area Operating Expenses within forty-five (45) days after the end of the Lease Year and shall deliver a computation of such Tenant’s Share of Project Area Operating Expenses, Tenant’s Share of Building Area Operating Expenses and/or Tenant’s Share of Office Area Operating Expenses in reasonable detail and reasonable evidence of such costs to Tenant together with an invoice for Tenant’s share or notice of credit for reimbursement thereof. Tenant agrees to pay the amount of such invoice within ten (10) days after Tenant’s receipt of Landlord’s invoice therefor.
(d) “Operating Expense(s)” shall mean, as applicable all reasonable, actual costs and expense incurred by Landlord in connection with the ownership, operation, management and maintenance of the Specified Building Area, the Specified Project Area or the Specified Office Area, and related improvements located thereon (the “Improvements”, including, but not limited to, all commercially reasonable expenses incurred by Landlord as a result of Landlord’s compliance with any and all of its obligations under this Lease (or under similar leases with other tenants). In explanation of the foregoing, and not in limitation thereof, Operating Expenses shall include, as applicable: utilities, repair and maintenance of the Leased Premises, including HVAC, electrical, plumbing, sprinkler and other building system maintenance, (excluding roof
D-16
and structural repair or replacement), all real and personal property taxes and assessments (whether general or special, known or unknown, foreseen or unforeseen) and any tax or assessment levied or charged in lieu thereof, whether assessed against Landlord and/or Tenant and whether collected from Landlord and/or Tenant; snow removal, trash removal, Common Area (as defined in Section 8.01) utilities, cost of equipment or devices used to conserve or monitor energy consumption, supplies, insurance, license, permit and inspection fees, management fee equal to five percent (5%) of the Base Monthly Rent (the “Management Fee”), cost of services of independent contractors, cost of services of independent contractors, reasonable cost of compensation (including employment taxes and fringe benefits) of all persons who perform regular and recurring duties connected with day-to-day operation, maintenance, repair, and replacement of the Building, its equipment and the adjacent Common Areas (including, but not limited to janitorial, gardening, landscaping, security, parking, elevator, painting, plumbing, electrical, mechanical, carpentry, window washing, performing services not uniformly available to or performed for substantially all the Building tenants; and rental expense or a reasonable allowance for depreciation of personal property used in the maintenance, operation and repair of the Building. In addition to the foregoing to cover Landlord’s supervisory, an administrative fee shall be paid to Landlord equal to fifteen percent (15%) of the Specified Project Area Operating Expenses, the Specified Building Area Operating Expenses and the Specified Office Area Operating Expenses. The Specified Project Area Operating Expenses, the Specified Building Area Operating Expenses and the Specified Office Area Operating Expenses for any calendar year during which actual occupancy of the Project is less than ninety-five percent (95%) of the gross rentable area of the Project shall be appropriately grossed up and adjusted to reflect ninety-five percent (95%) occupancy of the existing Rentable Area of the Project during such period. There shall be no duplication of charges among the Specified Project Area Operating Expenses, the Specified Building Area Operating Expenses or the Specified Office Area Operating Expenses.
Notwithstanding the above, the Specified Project Area Operating Expenses, the Specified Building Area Operating Expenses and the Specified Office Area Operating Expenses shall not include any of the following (all of which shall be at Landlord’s sole cost and expense):
(A) leasing commissions, attorneys’ fees, costs and disbursements and other expenses incurred in connection with leasing, renovating or improving vacant space in the Project for tenants or prospective tenants of the Building or Project;
(B) costs (including permit, license and inspection fees) incurred in renovating or otherwise improving or decorating, painting or redecorating space for tenants or vacant space;
(C) Landlord’s costs of any services sold to tenants for which Landlord is entitled to be reimbursed by such tenants as an additional charge or rental over and above the Base Monthly Rent and Operating Expenses payable under the lease with such tenant or other occupant;
(D) any depreciation or amortization of the Building or Project except as expressly permitted herein;
(E) costs incurred due to a violation of Law by Landlord relating to the Building or Project;
D-17
(F) interest on debt or amortization payments on any mortgages or deeds of trust or any other debt for borrowed money;
(G) all items and services for which Tenant or other tenants reimburse Landlord outside of Operating Expenses;
(H) repairs or other work occasioned by fire, windstorm or other work paid for through insurance or condemnation proceeds (excluding any deductible);
(I) repairs resulting from any defect in the original design or construction of the Building or Project;
(J) Costs attributable to original development, such as architectural and engineering;
(K) Costs attributable to seeking and obtaining new tenants or lease extensions, such as advertising, brokerage commissions, or to enforcing leases against tenants in the Building or Project such as attorney’s fees, court costs, adverse judgments and similar expenses;
(L) Reserves for bad debts or future expenditures which would be incurred subsequent to the then current accounting year;
(M) Costs attributable to repairing items that are covered by warranties to the extent that Landlord recovers such costs under the warranties;
(N) Maintenance, repair or replacement of the roof or roof systems, structural items (including but not limited to exterior walls, load bearing columns, foundation and floor slabs) of the Building or Project; or
(O) the Management Fee.
SECTION 3.04 TAXES.
(a) Landlord shall pay all real property taxes and assessments, which are levied against or which apply with respect to the Leased Premises.
(b) Tenant shall pay prior to delinquency all taxes, assessments, charges, and fees which during the Rental Term may be imposed, assessed, or levied by any governmental or public authority against or upon Tenant’s use of the Leased Premises or any inventory, personal property, fixtures or equipment kept or installed, or permitted to be located therein by Tenant.
SECTION 3.05 PAYMENTS. All payments of Base Monthly Rent, Additional Rent and other payments to be made to Landlord shall be made on a timely basis and shall be payable to Landlord or as Landlord may otherwise designate. All such payments shall be mailed or delivered to Landlord’s principal office set forth in Section 1.01(C), or at such other place as Landlord may designate from time to time in writing. If mailed, all payments shall be mailed in sufficient time and with adequate postage thereon to be received in Landlord’s account by no later than the due date for such payment. If Tenant shall fail to pay any Base Monthly Rent or any Additional Rent or any other amounts or charges within five (5) days of the date when due, Tenant shall pay interest from the due date of such past due amounts to the date of payment, both before and after judgment at a rate equal to the greater of twelve percent (12%) per annum;
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provided however, that in any case the maximum amount or rate of interest to be charged shall not exceed the maximum non-usurious rate in accordance with applicable law.
ARTICLE IV. RENTAL TERM, COMMENCEMENT DATE & PRELIMINARY TERM
SECTION 4.01 RENTAL TERM. The initial term of this Lease shall be for the period defined as the Rental Term in Section 1.01(K), plus the partial calendar month, if any, occurring after Delivery of Possession if the Rental Term Commencement Date occurs other than on the first day of a calendar month.
SECTION 4.02 RENTAL TERM COMMENCEMENT DATE. The Rental Term of this Lease and Tenant’s obligation to pay rent hereunder shall commence on the Rental Term Commencement Date as set forth in Section 1.01(K). Within five (5) days after Landlord’s request to do so, Landlord and Tenant shall execute a written affidavit, in recordable form, expressing the Rental Term Commencement Date and the termination date, which affidavit shall be deemed to be part of this Lease.
SECTION 4.03 PRELIMINARY TERM. The period between the date Tenant enters upon the Leased Premises and the Rental Term Commencement Date shall be designated as the “Preliminary Term” during which no Base Monthly Rent shall accrue; however, other covenants and obligations of Tenant shall be in full force and effect. Delivery of Possession of the Leased Premises to Tenant as provided in Section 5.02 shall be considered “entry” by Tenant and commencement of the Preliminary Term.
ARTICLE V. LANDLORD’S WORK, FINANCING OF IMPROVEMENTS,
TENANT’S POSSESSION DATE AND CANCELLATION
SECTION 5.01. CONSTRUCTION OF LEASED PREMISES BY LANDLORD. Landlord shall construct the Building in which the Leased Premises is located substantially in accordance with outline specifications as set forth in Exhibit “C” (“Landlord’s Work”). It is understood and agreed by Tenant that no minor changes from any plans or from such outline specifications made necessary during construction of the building or the Leased Premises shall affect or change this Lease or invalidate same.
SECTION 5.02. DELIVERY OF POSSESSION FOR TENANT’S WORK. Except as hereinafter provided, Landlord covenants that actual possession of the Leased Premises shall be delivered to Tenant, ready for Tenant’s Work, with the exception of the Snow Melt System, (see Article VI), on the date set forth in Section 1.01 (J). It is agreed that by taking possession of the Leased Premises as a tenant, Tenant formally accepts the same and acknowledges that the Leased Premises are in the condition called for hereunder, except for items specifically excepted in writing at the date of occupancy as “incomplete”.
SECTION 5.03. Intentionally Omitted.
SECTION 5.04. ALTERATIONS AND ADDITIONS. Provided such alteration or additions do not materially or adversely interfere with Tenant’s access to or use of the Leased Premises, and provided Landlord takes commercially reasonable efforts to avoid or minimize, to the greatest extent possible, interference with Tenant’s access to or use of the Leased Premises, the parties agree as follows: Notwithstanding anything else in this Lease contained, Landlord hereby reserves the right at any time, and from time to time, to make alterations or additions to the Building in which the Leased Premises are contained. Landlord also reserves the right to construct improvements in the Building area from time to time and to make alterations therein or
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additions thereto, to expand the Building area. The purpose of the site plan attached hereto as Exhibit “A” is to show the approximate location of the Leased Premises within the Building and Landlord reserves the right at any time to reconfigure the Common Areas shown on such site plan. Tenant shall have no right to object to such alteration by Landlord, nor to claim any damages or reduction in rent as a result of such work or the exercise of Landlord’s rights under Section 8.01, nor damages for any related nuisance, inconvenience, temporary interruption of utility systems, Common Facilities (as defined in Section 8.03(b)), nor except as hereinafter mentioned for interruption of Tenant’s use of the gross rentable area of the Leased Premises.
ARTICLE VI. TENANT’S WORK & LANDLORD’S CONTRIBUTION
SECTION 6.01 CONSTRUCTION OF LEASED PREMISES BY TENANT. Subject to Landlord’s obligation to pay to Tenant the TI Allowance, pursuant to the terms and conditions set forth in this Lease, Tenant agrees, at Tenant’s sole cost and expense, to provide all work of whatsoever nature in accordance with its obligations set forth in Exhibit “D” (“Tenant’s Work”). Tenant agrees to furnish Landlord, prior to commencement of construction, with a complete and detailed set of plans and specifications drawn by a registered architect (or by some other qualified person acceptable to Landlord) setting forth and describing Tenant’s Work in such detail as Landlord may reasonably require and in compliance with Exhibit “D”, unless this requirement be waived in writing by Landlord. If such plans and specifications are not so furnished by Tenant prior to commencement of construction then Landlord may, at its option, in addition to other remedies, enjoin Tenant from continuing construction while such plans and specifications have not been so furnished. No material deviation from the final set of plans and specifications once submitted to and approved by Landlord, shall be made by Tenant without Landlord’s prior written consent. Landlord shall have the right to approve or disapprove Tenant’s architect and contractor to be used in performing Tenant’s Work, and the right to require and approve insurance or bonds to be provided by Tenant or such contractors. In due course, after completion of Tenant’s Work, Tenant shall certify to Landlord the itemized cost of Tenant improvements and fixtures located upon the Leased Premises. To the extent that Landlord elects to perform certain Tenant’s Work as provided in Exhibit “D”, Tenant shall pay Landlord for such work within ten (10) business days of invoice by Landlord. The following architect is approved by Landlord: Method Studios. The following contractors are hereby approved by Landlord: Layton Construction, Dutson, and United Contractors.
SECTION 6.02 SETTLEMENT OF DISPUTES. It is understood and agreed that any disagreement or dispute which may arise between Landlord and Tenant with reference to the work to be performed pursuant to Exhibits “C” and “D” shall be resolved by Landlord’s architect, whose good faith decision shall be final and binding on both Landlord and Tenant.
ARTICLE VII. PERMITTED USE
SECTION 7.01 PERMITTED USE OF LEASED PREMISES. Tenant shall use and occupy the Leased Premises solely for the purpose of conducting the business as indicated in Section 1.01(F). Tenant shall promptly comply with all present or future laws, ordinances, lawful orders and regulations affecting the Leased Premises and the cleanliness, safety, occupancy and use of same. Tenant shall not make any use of the Leased Premises which shall cause cancellation or an increase in the cost of any insurance policy covering the same (this restriction shall not apply to the BBQ Use). Tenant shall not keep or use on the Leased Premises any article, item, or thing which is prohibited by the standard form of fire insurance policy (this restriction shall not apply to the BBQ Use). Tenant shall not commit any waste upon the Leased Premises and shall not conduct or allow any business, activity, or thing on the Leased Premises which is an
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annoyance or causes damage to Landlord, to other subtenants, occupants, or users of the improvements, or to occupants of the vicinity (this restriction shall not apply to the BBQ Use).
SECTION 7.02 HAZARDOUS SUBSTANCES.
(a) Tenant shall not use, produce, store, release, dispose or handle in or about the Leased Premises or transfer to or from the Leased Premises (or permit any other party to do such acts) any Hazardous Substance (as defined herein) except in compliance with all applicable Environmental Laws (as defined herein). Tenant shall not construct or use any improvements, fixtures or equipment or engage in any act on or about the Leased Premises that would require the procurement of any license or permit pursuant to any Environmental Law. Tenant shall immediately notify Landlord of (i) the existence of any Hazardous Substance on or about the Leased Premises that may be in violation of any Environmental Law (regardless of whether Tenant is responsible for the existence of such Hazardous Substance), (ii) any proceeding or investigation by any governmental authority regarding the presence of any Hazardous Substance on the Leased Premises or the migration thereof to or from any other property, (iii) all claims made or threatened by any third party against Tenant relating to any loss or injury resulting from any Hazardous Substance, or (iv) Tenant’s notification of the National Response Center of any release of a reportable quantity of a Hazardous Substance in or about the Leased Premises. “Environmental Law(s)” shall mean any federal, state or local statute, ordinance, rule, regulation or guideline pertaining to health, industrial hygiene, or the environment, including without limitation, the federal Comprehensive Environmental Response, Compensation, and Liability Act; “Hazardous Substance” shall mean all substances, materials and wastes that are or become regulated, or classified as hazardous or toxic, under any Environmental Law. If it is determined that any Hazardous Substance exists on the Leased Premises resulting from any act of Tenant or its employees, agents, contractors, licensees, subtenants or customers, then Tenant shall immediately take necessary action to cause the removal of such substance and shall remove such within ten (10) days after discovery. Notwithstanding the above, if the Hazardous Substance is of a nature that cannot be reasonably removed within ten (10) days, then Tenant shall not be in default if Tenant has commenced to cause such removal and proceeds diligently thereafter to complete removal, except that in all cases, any Hazardous Substance must be removed within sixty (60) days after discovery thereof. Furthermore, notwithstanding the above, if in the good faith judgment of Landlord, the existence of such Hazardous Substance creates an emergency or is of a nature which may result in immediate physical danger to persons at the Building, Landlord may enter upon the Leased Premises and remove such Hazardous Substances and charge the cost thereof to Tenant as Additional Rent.
(b) The party herein responsible for removal of Hazardous Substances shall upon learning of such condition proceed within five (5) days thereafter to commence removal of such Hazardous Substance and shall diligently continue to effect such removal until completion. Removal shall be accomplished in accordance with any applicable safety standards.
(c) To the best knowledge of Landlord, the Building and Project are free of asbestos and any other Hazardous Materials and comply with all applicable Environmental Laws.
(d) Landlord shall indemnify, defend, and hold Tenant harmless from and against any and all losses, claims, demands, actions, suits, damages, expenses (including, without limitation, remediation, removal, repair, corrective action, or cleanup expenses, or restoration of the Leased Premises or any part or component
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thereof following remediation), and costs (including, without limitation, reasonable attorneys’ fees, consultant fees or expert fees) which are brought or recoverable against, or suffered or incurred by Tenant as a result of any release or presence of Hazardous Materials in, on, at, under or to the Leased Premises not caused or permitted by Lessee, its agents, employees, contractors, sublessees or invitees.
ARTICLE VIII. OPERATION AND MAINTENANCE OF COMMON AREAS.
SECTION 8.01 CONSTRUCTION AND CONTROL OF COMMON AREAS. All automobile parking areas, driveways, entrances and exits thereto, and other facilities furnished by Landlord in or near the Building and/or Project, including if any, employee parking areas, parking garage, truck ways, loading docks, trash rooms, elevators, mail rooms or mail pickup areas, pedestrian sidewalks and hallways, landscaped areas, retaining walls, stairways, restrooms and other areas and improvements provided by Landlord (“Common Area(s)”) for the general use in common with all tenants, their officers, agents, employees and customers, shall at all times be subject to the exclusive control and management of Landlord which shall have the right from time to time to establish, modify and enforce reasonable rules and regulations with respect to all facilities and areas mentioned in this Section 8.01. Landlord shall have the right to construct, maintain and operate lighting and drainage facilities on or in all such areas and improvements; to the same, from time to time, to change the area, level, location and arrangement of parking areas and other facilities hereinabove referred to; to restrict parking by tenants, their officers, agents and employees to employee parking areas; to close temporarily all or any portion of such areas or facilities to such extent as may, in the opinion of counsel, be legally sufficient to prevent a dedication thereof or the accrual of any rights to any person or the public therein; to assign reserved parking spaces for exclusive use of certain tenants or for customer parking, to discourage non-employee and non-customer parking; and to do and perform such other acts in and to such areas and improvements as, in the exercise of good business judgment, Landlord shall determine to be advisable with a view toward maintaining of appropriate convenience uses, amenities, and for permitted use by tenants, their officers, agents, employees and customers. Landlord shall at all times operate and maintain the Common Facilities (as defined herein) referred to above in a manner commensurate with Class A office buildings located in Salt Lake City, Utah. Without limiting the scope of such discretion, Landlord shall have the full right and authority to employ all personnel and to make all rules and regulations pertaining to and necessary for the proper operation, security and maintenance of the Common Areas and Common Facilities. Building project signs, traffic control signs and other signs determined by Landlord to be in best interest of the Building shall be considered part of Common Area and Common Facilities.
“Common Facilities” means all areas, space, equipment and special services available for the common or joint use and/or benefit of any of the occupants of the Building their employees, agents, servants, customers and other invitees, including without limitation, parking areas, access roads, driveways, retaining walls, landscaped areas, truck serviceways or tunnels, loading docks, pedestrian lanes, courts, stairs, ramps and sidewalks, comfort and first-aid stations, washrooms, restrooms, janitorial rooms, transformer vaults, electrical rooms, sprinkler riser rooms, common equipment storage rooms, information booths, canopies, utility systems, energy management systems, roof drains, sumps and gutters, walls and fences, if any.
SECTION 8.02 LICENSE. All Common Areas and Common Facilities not within the Leased Premises, which Tenant may be permitted to use and occupy, are to be used and occupied under a revocable license, and if the amount of such areas be diminished, Landlord shall not be subject to any liabilities nor shall Tenant be entitled to any compensation or diminution or abatement of rent, nor shall such diminution of such areas be deemed constructive or actual eviction, so long as such revocations or diminutions are deemed by Landlord to serve the best
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interests of the Building. The term of such revocable license shall be coterminous with this Lease and shall not be revoked or terminated during the Rental Term of this Lease.
SECTION 8.03 AUDIT. Tenant shall have the right, not more frequently than once every two (2) calendar years, to audit Landlord’s or Landlord’s balance sheet pertaining to Operating Cost Expenses for the prior two (2) Lease Years (the “CAM Audit”). Tenant shall not be permitted to utilize a so-called “contingent fee” Operating Cost Expenses auditor. Accordingly, any representative of Tenant conducting, assisting, or having any involvement with the CAM Audit shall not be permitted to have a financial stake in the outcome of the CAM Audit and Landlord shall be entitled to receive credible evidence of the same and Landlord may refuse to allow such CAM Audit in the absence of such evidence. Additionally, any representative of Tenant conducting a CAM Audit shall first sign a confidentiality agreement that provides that it shall not disclose the CAM Audit, its conclusions or any information obtained in the course of conducting the CAM Audit to anyone other than Tenant and Landlord.
Landlord shall retain its records regarding Operating Expenses for a period of at least two (2) years following the final billing for each calendar year during the Rental Term. At any time during such two (2) year period, upon thirty (30) days’ advance written notice to Landlord, Tenant may conduct a CAM Audit. The CAM Audit shall commence on a date of which Tenant has notified Landlord not less than thirty (30) days in advance. Tenant shall in all cases share with Landlord the conclusions of the CAM Audit and any CAM Audit report. If the CAM Audit discloses an overbilling, Landlord may, by written notice to Tenant within forty-five (45) days of Landlord’s receipt of a copy of the CAM Audit, object to the conclusions or process of the CAM Audit, stating its conclusions as to whether or not there was any overbilling (and if so, the amount thereof). If Tenant disputes Landlord’s conclusions, Tenant shall notify Landlord and the parties shall use good faith efforts to resolve the dispute. If Landlord agrees with the CAM Audit, Landlord shall pay to Tenant the amount of the overbilling within forty-five (45) days of Landlord’s receipt of a copy of the CAM Audit. If the CAM Audit discloses an underbilling, Tenant shall pay to Landlord the amount of the underbilling within forty-five (45) days of Tenant’s receipt of a copy of the CAM Audit or its conclusions.
ARTICLE IX. ALTERATIONS, SIGNS, LOCKS & KEYS
SECTION 9.01 ALTERATIONS. Tenant shall not make or suffer to be made any alterations or additions to the Leased Premises or any part thereof without the prior written consent of Landlord; provided however, such consent of Landlord shall not be unreasonably withheld for any non-structural alterations or additions to the Leased Premises proposed by Tenant. Any additions to, or alterations of the Leased Premises except movable furniture, equipment and trade fixtures shall become a part of the realty and belong to Landlord upon the termination of this Lease or Rental Term renewal or other termination or surrender of the Leased Premises to Landlord.
SECTION 9.02 SIGNS. Tenant shall not place or suffer to be placed or maintained on any exterior door, wall or window of the Leased Premises, or elsewhere in the Building, any sign, awning, marquee, decoration, lettering, attachment, canopy, advertising matter or other thing of any kind, and shall not place or maintain any decoration, lettering or advertising matter on the glass of any window or door of the Leased Premises without first obtaining Landlord’s written approval, which shall not be unreasonably withheld or delayed. Tenant shall maintain any such sign, decoration, lettering, advertising matter or other things as may be approved in good condition and repair at all times. Landlord may, at Tenant’s cost, and without liability to Tenant, enter the Leased Premises and remove any item erected in violation of this Section 9.02. Landlord has established rules and regulations governing the size, type and design of all signs,
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decorations, etc., which is specifically set forth in Exhibit “E” and Exhibit “E-1”. Tenant’s signage on the Building and/or the Project is subject to Landlord and Salt Lake City approval.
SECTION 9.03 LOCKS AND KEYS. Landlord shall install a card key system for access to the Building and covered parking area and shall issue appropriate card keys to Tenant and Tenant’s authorized employees. Landlord shall initially provide keys for entry doors to the Leased Premises. From time to time, Tenant may change locks or install other locks on such doors, but if Tenant does, Tenant must provide Landlord with duplicate keys within twenty-four (24) hours after such change or installation. Tenant, upon termination of this Lease, shall deliver to Landlord all the keys to the Building and the Leased Premises including any interior offices, toilet rooms, combinations to built-in safes, etc. which shall have been furnished to or by Tenant or are in the possession of Tenant.
ARTICLE X. MAINTENANCE AND REPAIRS; ALTERATIONS; ACCESS
SECTION 10.01 LANDLORD’S OBLIGATION FOR MAINTENANCE. Landlord shall at all times maintain and repair, in a manner commensurate with Class A office buildings located in Salt Lake City, Utah: (1) the areas outside the Leased Premises including hallways, public restrooms, if any, general landscaping, parking areas, driveways and walkways within the project; (2) the roof or roof systems, structural items (including but not limited to exterior walls, load bearing columns, foundation and floor slabs) of the Building or Project; and (3) all plumbing, electrical, heating, and air conditioning systems. However, if the need for such repairs or maintenance results from any careless, wrongful or negligent act or omission of Tenant, Tenant shall pay the entire cost of any such repair or maintenance including a reasonable charge to cover Landlord’s supervisory overhead. Landlord shall not be obligated to repair any damage or defect until receipt of written notice from Tenant of the need of such repair and Landlord shall have a reasonable time after receipt of such notice in which to make such repairs. Tenant shall give immediate notice to Landlord in case of fire or accidents in the Leased Premises or in the Building of which the Leased Premises are a part or of defects therein or in any fixtures or equipment provided by Landlord. Costs of Landlord provided maintenance for Item 2 herein shall be included as Operating Expenses as defined in Section 3.03(d) and (e) herein.
SECTION 10.02 TENANT’S OBLIGATION FOR MAINTENANCE.
(a) Tenant shall provide its own janitorial service and keep and maintain the Leased Premises including the interior wall surfaces and windows, floors, floor coverings and ceilings in a clean, sanitary and safe condition in accordance with the laws of the State and in accordance with all directions, rules and regulations of the health officer, fire marshal, building inspector, or other proper officials of the governmental agencies having jurisdiction, at the sole cost and expense of Tenant, and Tenant shall comply with all requirements of law, ordinance and otherwise, affecting the Leased Premises.
(b) Tenant shall pay, when due, all claims for labor or material furnished, for work under Sections 9.01, 9.02 and 10.02 hereof, to or for Tenant at or for use in the Leased Premises, and shall bond such work if reasonably required by Landlord to prevent assertion of claims against Landlord.
(c) Tenant agrees to be responsible for all furnishings, fixtures and equipment located upon the Leased Premises from time to time and shall replace carpeting within the Leased Premises if same shall be damaged by tearing, burning, or stains resulting from spilling anything on such carpet, reasonable wear and tear
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accepted. Tenant further agrees to use chair mats or floor protectors wherever it uses chairs with wheels or casters on carpeted areas.
SECTION 10.03 SURRENDER AND RIGHTS UPON TERMINATION.
(a) This Lease and the tenancy hereby created shall cease and terminate at the end of the Rental Term, or any Rental Term extension or renewal, without the necessity of any notice form either Landlord or Tenant to terminate the same, and Tenant hereby waives notice to vacate the Leased Premises and agrees that Landlord shall be entitled to the benefit of all provisions of law respecting summary recovery of possession of the Leased Premises from a Tenant holding over to the same extent as if statutory notice has been given.
(b) Upon termination of this Lease at any time and for any reason whatsoever, Tenant shall surrender and deliver up the Leased Premises, including the items constituting Tenant’s Work, to Landlord in the same condition as when the Leased Premises were delivered to Tenant or as altered as provided in Section 9.01, ordinary wear and tear accepted. Upon request of Landlord, Tenant shall promptly remove all personal property from the Leased Premises and repair any damage caused by such removal. Obligations under this Lease relating to events occurring or circumstances existing prior to the date of termination shall survive the expiration or other termination of the Rental Term of this Lease. Liabilities accruing after date of termination are defined in Sections 19.01 and 19.02.
ARTICLE XI. INSURANCE AND INDEMNITY
SECTION 11.01 LIABILITY INSURANCE AND INDEMNITY. Tenant shall, during all terms hereof, keep in full force and effect a policy of commercial general liability insurance with respect to the Leased Premises, with a combined single limit of not less than Two Million Dollars ($2,000,000.00) per occurrence. The policy shall name Landlord, property manager (i.e., Woodbury Corporation) and any other persons, firms or corporations designated by Landlord and Tenant as additional insureds, and shall contain a clause that the insurer shall not cancel or change the insurance without first giving Landlord ten (10) days prior written notice. Such insurance shall include an endorsement permitting Landlord and property manager to recover damage suffered due to act or omission of Tenant, notwithstanding being named as an additional “insured party” in such policies. Such insurance may be furnished by Tenant under any blanket policy carried by it or under a separate policy therefor. The insurance shall be with an insurance company approved by Landlord and a copy of the paid-up policy evidencing such insurance or a certificate of insurer certifying to the issuance of such policy shall be delivered to Landlord. If Tenant fails to provide such insurance, Landlord may do so and charge same to Tenant.
SECTION 11.02 FIRE AND CASUALTY INSURANCE.
(a) Subject to the provisions of this Section 11.02, Landlord shall secure, pay for, and at all times during the Rental Term hereof maintain fire and casualty, insurance providing coverage upon the building improvements in an amount equal to the full insurable replacement value thereof (as determined by Landlord). Such insurance shall include twelve (12) months rental income coverage as well as such additional endorsements as may be required by Landlord’s lender or Landlord. All insurance required hereunder shall be written by reputable, responsible companies licensed in the State of Utah. Tenant shall have the right, at its request at any reasonable time, to be
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furnished with copies of the insurance policies then in force pursuant to this Section 11.02, together with evidence that the premiums therefor have been paid.
(b) Tenant agrees to maintain at its own expense such fire and casualty insurance coverage as Tenant may desire or require in respect to Tenant’s personal property, equipment, furniture, fixtures or inventory and Landlord shall have no obligation in respect to such insurance or losses. All property kept or stored on the Leased Premises by Tenant or with Tenant’s permission shall be so done at Tenant’s sole risk and Tenant shall indemnify Landlord against and hold it harmless from any claims arising out of loss or damage to same.
(c) Tenant shall not permit the Leased Premises to be used for any purpose which would render the insurance thereon void or cause cancellation thereof or increase the insurance risk or increase the insurance premiums in effect just prior to the Rental Term Commencement Date of this Lease (this restriction shall not apply to the BBQ Use). Tenant agrees to pay as Additional Rent the total amount of any increase in the insurance premium of Landlord over that in effect prior to the Rental Term Commencement Date of this Lease to the extent solely resulting from Tenant’s unique and particular use of the Leased Premises. If Tenant installs any electrical or other equipment which overloads the lines in the Leased Premises, Tenant shall, at its own expense, make whatever changes are necessary to comply with the requirements of Landlord’s insurance.
(d) Tenant shall be responsible for all glass breakage from any cause whatsoever and agrees to immediately replace all glass broken or damaged during the Rental Term with glass of the same quality as that broken or damaged. Landlord may replace, at Tenant’s expense, any broken or damaged glass if not replaced by Tenant within five (5) days after such damage.
SECTION 11.03 WAIVER OF SUBROGATION. Each party hereto does hereby release and discharge the other party hereto and any officer, agent, employee or representative of such party, of and from any liability whatsoever hereafter arising from loss, damage or injury caused by fire or other casualty for which insurance (permitting waiver of liability and containing a waiver of subrogation) is carried by the injured party at the time of such loss, damage or injury to the extent of any recovery by the injured party under such insurance.
SECTION 11.04 INDEMNIFICATION.
(a) Subject to the terms and conditions set forth in Section 11.03, Tenant shall indemnify Landlord and save it harmless from and against any and all claims, actions, damages, liability and expense in connection with loss of life, personal injury and/or damage to property arising from or out of any occurrence in, upon or at the Leased Premises or from the occupancy or use by Tenant of the Leased Premises or any part thereof, or occasioned wholly or in part by any act or omission of Tenant, its agents, contractors, employees, servants, sublessees, concessionaires or business invitees to extent not covered by insurance required by Article XI. For the purpose hereof, the Leased Premises shall include the outdoor patio and green space allocated to the use of Tenant. In case Landlord is, without fault on its part, made a party to any litigation commenced by or against Tenant, then Tenant shall protect and hold Landlord harmless and shall pay all costs, expenses and reasonable attorneys’ fees incurred or paid by Landlord in defending itself or enforcing the covenants and agreements of this Lease.
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(b) Subject to the terms and conditions set forth in Section 11.03, To the extent not covered by the insurance required to be maintained by Tenant, or that would not have been covered by insurance had Tenant maintained such insurance, Landlord agrees to indemnify and save harmless Tenant in regard to third parties for damages occurring on the Common Area proximately caused by the wrongful acts or negligence of Landlord, its contractors, agents or employees in scope of their employment, including costs of defense and reasonable attorneys’ fees incurred in such defense. In case Tenant is, without fault on its part, made a party to litigation against Landlord as a result of such acts or negligence which Tenant’s insurer is not required to defend, then Landlord shall indemnify Tenant against costs of such defense including reasonable attorneys’ fees.
ARTICLE XII UTILITY CHARGES
SECTION 12.01 OBLIGATION OF LANDLORD. Unless otherwise agreed in writing by the parties, during the Rental Term of this Lease Landlord shall cause to be furnished to the Leased Premises during “standard operating hours” which shall be 7:00 a.m. to 7:00 p.m. Monday through Friday and 8:00 a.m. to 12:00 p.m. on Saturday, excluding holidays, the following utilities and services, the cost and expense of which shall be included in Operating Expenses:
(a) Electricity, water, gas and sewer service.
(b) Telephone connection, but not including telephone stations and equipment (it being expressly understood and agreed that Tenant shall be responsible for the ordering and installation of telephone lines and equipment which pertain to the Leased Premises).
(c) Heat and air-conditioning to such extent and to such levels as, in Landlord’s reasonable judgment (but commensurate with Class A office buildings located in Salt Lake City, Utah), is reasonably required for the comfortable use and occupancy of the Leased Premises subject however to any limitations imposed by any government agency.
(d) Snow removal and parking lot sweeping services.
(e) Elevator service.
(f) Building systems maintenance services.
SECTION 12.02 OBLIGATIONS OF TENANT. Tenant shall arrange for and shall pay the entire cost and expense of all telephone stations, equipment and use charges, electric light bulbs (but not fluorescent bulbs used in fixtures originally installed in the Leased Premises) and all other materials and services not expressly required to be provided and paid for pursuant to the provisions of Section 12.01 above. Tenant shall be responsible for the operation and maintenance of the heating system on the patio for snow and ice removal, and the utilities to operate such system, which shall be separately metered and passed through to Tenant on a direct basis. Tenant covenants to use good faith efforts to reasonably conserve utilities by turning off lights and equipment when not in use and taking such other reasonable actions in accordance with sound standards for energy conservation. Landlord reserves the right to separately meter or otherwise monitor any utility usage and to separately charge tenants for its own utilities, in which case an equitable adjustment shall be made to Base Monthly Rent and Tenant’s Share of Project Area Operating Expenses, Tenant’s Share of Building Area Operating Expenses and/or Tenant’s
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Share of Office Area Operating Expenses as set forth in this Lease. Additional limitations of Tenant are as follows:
(a) Tenant shall not, without the written consent of Landlord, which consent shall not be unreasonably withheld, use any apparatus or device on the Leased Premises using current in excess of 208 volts which shall in any way or to any extent increase the amount of electricity or water usually furnished or supplied for use on the Leased Premises for the Permitted Use, nor connect with electrical current, except through existing electrical outlets in the Leased Premises, or water pipes, any apparatus or device, for the purposes of using electric current or water.
(b) If Tenant shall require water or electric current in excess of that usually furnished or supplied for use of the Leased Premises, or for purposes other than those designated in Section 7.01, then Tenant shall first procure the written consent of Landlord for the use thereof, which consent Landlord may refuse and/or Landlord may cause a water meter or electric current meter to be installed in the Leased Premises, so as to measure the amount of water and/or electric current consumed for any such use. The cost of such meters and of installation maintenance, and repair thereof shall be paid for by Tenant and Tenant agrees to pay Landlord promptly upon demand by Landlord for all such water and electric current consumed as shown by such meters, at the rates charged for such service by the city in which the Building is located or the local public utility, as the case may be, furnishing the same, plus any additional expense incurred in keeping account of the water and electric current so consumed.
(c) If and where heat generating machines devices are used in the Leased Premises which affect the temperature otherwise maintained by the air conditioning system, Landlord reserves the right to install additional or supplementary air conditioning units for the Leased Premises, and the entire cost of installing, operating, maintaining and repairing the same shall be paid by Tenant to Landlord promptly after demand by Landlord.
To the extent that Tenant operates hours in excess of the stated standard business hours, Tenant may cause Landlord to provide services set forth in Section 12.01 (a), (b), and (c); however, Tenant shall pay extra hourly utility charges as set forth in Section 1.01(Q) and Section 12.03 herein.
SECTION 12.03. EXTRA HOURS CHARGES. To the extent Tenant operates hours other than “standard operating hours”) as set forth in Section 1.01 (Q) and Section 12.01, Tenant shall pay an extra hourly utility charge pursuant to Section 1.01 (Q) for lighting and electricity and for mechanical/HVAC system use. Tenant shall pay such charges within ten (10) days after invoice therefor. Costs incurred by Landlord for operating “extra-hours” shall not be included in Operating Expenses pursuant to Section 3.03.
SECTION 12.04. LIMITATIONS ON LANDLORDS LIABILITY. Landlord shall not be liable for and Tenant shall not be entitled to terminate this Lease or to effectuate any abatement or reduction of rent by reason of Landlord’s failure to provide or furnish any of the foregoing utilities or services if such failure was reasonably beyond the control of Landlord. In no event shall Landlord be liable for loss or injury to persons or property, however, arising or occurring in connection with or attributable to any failure to furnish such utilities or services even if within the control of Landlord.
ARTICLE XIII. OFF-SET STATEMENT, ATTORNMENT AND SUBORDINATION
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SECTION 13.01 OFF-SET STATEMENT. Tenant agrees within twenty (20) days after request therefor by Landlord to execute in recordable form and deliver to Landlord a statement in writing, certifying
| (a) | that this Lease is in full force and effect; | |||||||
| (b) | the Rental Term Commencement Date of this Lease; | |||||||
| (c) | that rent is paid currently without any off-set or defense thereto; | |||||||
| (d) | the amount of rent, if any paid in advance; and | |||||||
| (e) | that there are no uncured defaults by Landlord or stating those claimed by Tenant. | |||||||
SECTION 13.02 ATTORNMENT. Tenant shall, in the event any proceedings are brought for the foreclosure of, or in the event of exercise of the power of sale under any mortgage or deed of trust made by Landlord covering the Leased Premises, attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as Landlord under this Lease.
SECTION 13.03 SUBORDINATION. Tenant agrees that this Lease shall, at the request of Landlord, be subordinate to any first mortgages or deeds of trust that may hereafter be placed upon the Leased Premises and to any and all advances to be made thereunder, and to the interest thereon, and all Rental Term renewals, replacements and extensions thereof, provided the mortgagees or trustees named in such mortgages or deeds of trust shall agree to recognize this Lease of Tenant in the event of foreclosure, if Tenant is not in default beyond any applicable notice and cure period.
SECTION 13.04 MORTGAGEE SUBORDINATION. Tenant hereby agrees that this Lease shall, if at any time requested by Landlord or any lender in respect to Landlord’s financing of the Building or the Project in which the Leased Premises are located or any portion hereof, be made superior to any mortgage or deed of trust that may have preceded this Lease.
SECTION 13.05 REMEDIES. Tenant hereby irrevocably appoints Landlord as attorney-in-fact for Tenant with full power and authority to execute and deliver in the name of Tenant any such instruments described in this Article XIII upon failure of Tenant to execute and deliver any of the above instruments within fifteen (15) days after written request to do so by Landlord; and such failure shall constitute a breach of this Lease entitling Landlord, at its option, to cancel this Lease and terminate Tenant’s interest therein.
ARTICLE XIV. ASSIGNMENT
SECTION 14.01 ASSIGNMENT. Except as set forth below in this Section 14.01, Tenant shall not assign this Lease or sublet the Leased Premises, or any part thereof, without first obtaining the written consent of the Landlord, which consent shall not be unreasonably withheld. The consent of Landlord shall not relieve Tenant from continuing liability for all obligations under this Lease. Any Assignment by operation of law or if Tenant is a corporation, unincorporated association or partnership, the transfer, assignment or hypothecation of any stock or interest in such corporation, association or partnership in the aggregate in excess of fifty percent (50%) shall be deemed an “Assignment” within the meaning of this Section 14.01.
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Notwithstanding anything to the contrary contained herein, provided that Tenant is not then in default under this Lease beyond any applicable notice and cure period, upon not less than twenty (20) days prior written notice to Landlord, Tenant may assign or sublet the Leased Premises or any part thereof to a corporation, person or other entity which: (i) is Tenant’s parent or affiliate; (ii) is a wholly-owned subsidiary of Tenant; (iii) is a corporation, person or other entity of which Tenant, Tenant’s parent or an affiliate of Tenant owns a majority of the capital stock or a controlling ownership interest; (iv) as a result of a consolidation, merger, reorganization or other transaction with Tenant or Tenant’s parent shall own all the capital stock of Tenant or Tenant’s parent; (v) as a result of a change of the domicile of Tenant or the reincorporation of Tenant in another jurisdiction; or (vi) acquires or is acquiring all or substantially all of the assets of Tenant or Tenant’s parent(each of the transactions referenced in the above subparagraphs (i) - (vi) are hereinafter referred to as a “Permitted Transfer,” and each surviving entity shall hereinafter be referred to as a “Permitted Transferee”) without the prior written consent of Landlord.
ARTICLE XV. WASTE OR NUISANCE
SECTION 15.01 WASTE OR NUISANCE. Tenant shall not commit or suffer to be committed any waste upon the Leased Premises, or any nuisance or other act or thing which may disturb the quiet enjoyment of any other tenant in the Building in which the Leased Premises may be located, or elsewhere within the Building.
ARTICLE XVI. NOTICES
SECTION 16.01 NOTICES. Except as provided in Section 19.01, any notice required or permitted hereunder to be given or transmitted between the parties shall be either 1) personally delivered, or 2) mailed postage prepaid by registered mail, return receipt requested, or mailed by express carrier addressed if to Tenant at the address set forth in Section 1.01(E), and if to Landlord at the address set forth in Section 1.01(C). Either party may, by notice to the other given as prescribed in this Section 16.01, change its above address for any future notices which are mailed under this Lease.
ARTICLE XVII. DESTRUCTION OF THE LEASED PREMISES
SECTION 17.01 DESTRUCTION.
(a) If the Leased Premises are partially or totally destroyed by fire or other casualty insurable under standard fire insurance policies with extended coverage endorsement so as to become partially or totally untenantable, the same shall be repaired or rebuilt as speedily as practical under the circumstances at the expense of Landlord, unless Landlord elects not to repair or rebuild as provided in Section 17.01(b). During the period required for restoration, a just and proportionate part of Base Monthly Rent, Additional Rent and other charges payable by Tenant hereunder shall be abated until the Leased Premises are repaired or rebuilt.
(b) If the Leased Premises are (I) rendered totally untenantable by reason of an occurrence described in Section 17.01(a), or (II) damaged or destroyed as a result of a risk which is not insured under Landlord’s fire insurance policies, or (III) at least twenty percent (20%) damaged or destroyed during the last year of the Rental Term, or (IV) if the Building is damaged in whole or in part (whether or not the Leased Premises are damaged), to such an extent that Tenant cannot practically use the Leased Premises for its intended purpose, then and in any such events Landlord may at its option terminate this Lease by notice in writing to Tenant within sixty (60) days after the date
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of such occurrence. Unless Landlord gives such notice, this Lease shall remain in full force and effect and Landlord shall repair such damage at its expense as expeditiously as possible under the circumstances.
(c) If Landlord should elect or be obligated pursuant to Section 17.01(a) above to repair or rebuild because of any damage or destruction, Landlord’s obligation shall be limited to the original Building and any other work or improvements which may have been originally performed or installed at Landlord’s expense. If the cost of performing Landlord’s obligation exceeds the actual proceeds of insurance paid or payable to Landlord on account of such casualty, Landlord may terminate this Lease unless Tenant, within fifteen (15) days after demand therefor, deposits with Landlord a sum of money sufficient to pay the difference between the cost of repair and the proceeds of the insurance available for such purpose. Tenant shall replace all work and improvements not originally installed or performed by Landlord at its expense.
(d) Except as stated in this Article XVII, Landlord shall not be liable for any loss or damage sustained by Tenant by reason of casualties mentioned hereinabove or any other accidental casualty.
ARTICLE XVIII. CONDEMNATION
SECTION 18.01 CONDEMNATION. As used in this Section 18.01 the term “Condemnation Proceeding” means any action or proceeding in which any interest in the Leased Premises or Building is taken for any public or quasi-public purpose by any lawful authority through exercise of the power of eminent domain or right of condemnation or by purchase or otherwise in lieu thereof. If the whole of the Leased Premises is taken through Condemnation Proceedings, this Lease shall automatically terminate as of the date possession is taken by the condemning authority. If in excess of twenty-five (25%) percent of the Leased Premises is taken, then either party hereto shall have the option to terminate this Lease by giving the other written notice of such election at any time within thirty (30) days after the date of taking. If less than twenty-five (25%) percent of the space is taken and Landlord determines, in Landlord’s sole discretion, that a reasonable amount of reconstruction thereof shall not result in the Leased Premises or the Building becoming a practical improvement reasonably suitable for use for the purpose for which it is designed, then Landlord may elect to terminate this Lease by giving thirty (30) days written notice as provided hereinabove. In all other cases, or if neither party exercises its option to terminate, this Lease shall remain in effect and the rent payable hereunder from and after the date of taking shall be proportionately reduced in proportion to the ratio of: (1) the area contained in the Leased Premises which is capable of occupancy after the taking; to (2) the total area contained in the Leased Premises which was capable of occupancy prior to the taking. In the event of any termination or rental reduction provided for in this Section 18.01, there shall be a pro-ration of the rent payable under this Lease and Landlord shall refund any excess theretofore paid by Tenant. Whether or not this Lease is terminated as a consequence of Condemnation Proceedings, all damages or compensation awarded for a partial or total taking, including any sums compensating Tenant for diminution in the value of or deprivation of its leasehold estate, shall be the sole and exclusive property of Landlord, except that Tenant shall be entitled to any awards intended to compensate Tenant for expenses of locating and moving Tenant’s operations to a new space.
ARTICLE XIX. DEFAULT OF TENANT
SECTION 19.01 DEFAULT - RIGHT TO RE-ENTER. In the event of any failure of Tenant to pay any Base Monthly Rent and/or Additional Rent due hereunder within ten (10) days after written notice that the same is past due shall have been mailed to Tenant, or any failure by Tenant to perform any other of the terms, conditions or covenants required of Tenant
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by this Lease within thirty (30) days after written notice of such default shall have been mailed to Tenant, or if Tenant shall abandon the Leased Premises, or permit this Lease to be taken under any writ of execution, then Landlord, besides other rights or remedies it may have, shall have the right to declare this Lease terminated and shall have the immediate right of re-entry and may remove all persons and property from the Leased Premises. Such property may be removed and stored in a public warehouse or elsewhere at the cost of and for the account of Tenant, without evidence of notice or resort to legal process and without being deemed guilty of trespass, or becoming liable for any loss or damage which may be occasioned thereby. Tenant hereby waives all compensation for the forfeiture of the Rental Term or its loss of possession of the Leased Premises in the event of the forfeiture of this Lease as provided for above.
SECTION 19.02 DEFAULT - RIGHT TO RE-LET. Should Landlord elect to re-enter, as herein provided, or should it take possession pursuant to legal proceedings or pursuant to any notice provided for by law, it may either terminate this Lease or it may from time to time, without terminating this Lease, make such alterations and repairs as may be necessary in order to re-let the Leased Premises and may re-let the Leased Premises, or any part thereof, for such term or terms (which may be for a term extending beyond the Rental Term of this Lease) and at such rental or rental income and upon such other terms and conditions as Landlord in its sole discretion may deem advisable. Upon each such re-letting, all rental income received by Landlord from such re-letting shall be applied first to the payment of any costs and expenses of such re-letting, including brokerage fees and attorneys’ fees and costs of such alterations and repairs; second, to the payment of rent or other unpaid obligations due hereunder; and the residue, if any, shall be held by Landlord and applied in payment of future rent as the same may become due and payable hereunder. If such rental income received from such re-letting during any month be less than that to be paid during that month by Tenant hereunder, Tenant shall pay any such deficiency to Landlord. Such deficiency shall be calculated and paid monthly. No such re-entry or taking possession of the Leased Premises by Landlord shall be construed as an election on its part to terminate this Lease unless a written notice of such intention is given to Tenant or unless the termination thereof is decreed by a court or competent jurisdiction. Notwithstanding any such re-letting without termination, Landlord may at any time elect to terminate this Lease for such previous default. Should Landlord at any time terminate this Lease for any default, in addition to any other remedies it may have, it may recover from Tenant all damages it may incur by reason of such default, including the cost of recovering the Leased Premises, reasonable attorneys’ fees, and including the worth at the time of such termination of the excess, if any, of the amount of rent and charges equivalent to rent reserved in this Lease for the remainder of the stated Rental Term over the then reasonable rental value of the Leased Premises for the remainder of the stated Rental Term, all of which amounts shall be immediately due and payable.
SECTION 19.03 LEGAL EXPENSES. In case of default by either party in the performance and obligations under this Lease, the defaulting party shall pay all costs incurred in enforcing this Lease, or any right arising out of such default, whether by suit or otherwise, including reasonable attorneys’ fees.
ARTICLE XX. BANKRUPTCY, INSOLVENCY OR RECEIVERSHIP
SECTION 20.01 ACT OF INSOLVENCY, GUARDIANSHIP, ETC. The following shall constitute a default of this Lease by Tenant for which Landlord, at Landlord’s option, may immediately terminate this Lease.
(a) The appointment of a receiver to take possession of all or substantially all of the assets of Tenant;
(b) A general assignment by Tenant of its assets for the benefit of creditors;
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(c) Any action taken or suffered by or against Tenant under any federal or state insolvency or bankruptcy act;
(d) The appointment of a guardian, conservator, trustee, or other similar officer to take charge of all or any substantial part of Tenant’s property.
Neither this Lease, nor any interest therein nor any estate thereby created shall pass to any trustee, guardian, receiver or assignee for the benefit of creditors or otherwise by operation of law.
ARTICLE XXI. LANDLORD ACCESS
SECTION 21.01 LANDLORD ACCESS. Subject to Landlord’s obligation to take all commercially reasonable steps to avoid or minimize (to the greatest extent possible) interfere with Tenant’s use of the Leased Premises, Landlord or Landlord’s agent shall have the right to enter the Leased Premises at all reasonable times to examine the same, or to show them to prospective purchasers or lessees of the Building, or to make all repairs, alterations, improvements or additions as Landlord may deem necessary or desirable, and Landlord shall be allowed to take all material into and upon the Leased Premises that may be required therefor without the same constituting an eviction of Tenant in whole or in part, and rent shall not abate while such repairs, alterations, improvements, or additions are being made, by reason of loss or interruption of business of Tenant, or otherwise. During the ninety (90) days prior to the expiration of the Rental Term of this Lease or any Rental Term renewal, Landlord may exhibit the Leased Premises to prospective tenants and place upon the Leased Premises the usual notices “To Let” or “For Rent” which notices Tenant shall permit to remain thereon with molestation.
ARTICLE XXII. TENANT’S PROPERTY AND LANDLORD’S LIEN
SECTION 22.01. TAXES ON LEASEHOLD. Tenant shall be responsible for and shall pay before delinquency all municipal, county and state taxes assessed during the Rental Term of this Lease against any leasehold interest, improvements, trade fixtures or personal property of any kind, owned by or placed in, upon or about the Leased Premises by Tenant, and taxes, levies or fees assessed on the basis of Tenant’s occupancy thereof, including, but not limited to, taxes measured by rents due from Tenant hereunder.
SECTION 22.02. LOSS AND DAMAGE. Landlord shall not be responsible or liable to Tenant for any loss or damage that may be occasioned by or through the acts or omissions of persons occupying adjoining spaces or any part of the spaces adjacent to or connected with the Leased Premises hereby or any part of the building of which the Leased Premises is a part, or for any loss or damage resulting to Tenant or its property from bursting, stoppage or leaking of water, gas, sewer or steam pipes or for any damage or loss of property within the Leased Premises from any cause whatsoever.
SECTION 22.03. NOTICE BY TENANT. Tenant shall give immediate telephone or electronic mail notice to Landlord in case of fire, casualty or accidents in the Leased Premises or in the building of which the Leased Premises are a part or of defects therein or in any fixtures or equipment, and Tenant shall promptly thereafter confirm such notice in writing.
SECTION 22.04. LANDLORD’S LIEN. Tenant is advised that Utah Code Section 38-3-1 and following grants Landlord (Lessor) a lien in regard to unpaid rent.
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SECTION 22.05. LANDLORD’S SUBORDINATION. Provided that Tenant is not in default hereunder, Landlord agrees to subordinate its lien on Tenant’s personal property to that of any bona fide third party lender providing financing which directly benefits Tenant’s operations in the Leased Premises. However, Landlord shall refuse and shall otherwise not be required to subordinate its lien or priority as to Tenant’s equipment or trade fixtures, and Landlord shall be entitled to refuse subordination if loans are not directly related to the Project.
ARTICLE XXIII. HOLDING OVER
SECTION 23.01 HOLDING OVER. Any holding over after the expiration of the Rental Term, or any Rental Term extension thereto, shall be construed to be a tenancy at sufferance and all provisions of this Lease shall be and remain in effect except that the Base Monthly Rent shall be one hundred and twenty-five percent (125%) of the amount of Base Monthly Rent and Additional Rent (including any adjustments as provided herein) payable for the last full calendar month of the Rental Term including Rental Term renewals or extensions.
SECTION 23.02 SUCCESSORS. All rights and liabilities herein given to, or imposed upon, the respective parties hereto shall extend to and bind the several respective heirs, executors, administrators, successors and assigns of such parties; and if there shall be more than one (1) tenant, they shall all be bound jointly and severally by the terms, covenants and agreements herein. No rights, however, shall inure to the benefit of any assignee of Tenant unless the assignment to such assignee has been approved by Landlord in writing.
ARTICLE XXIV. RULES AND REGULATIONS
SECTION 24.01 RULES AND REGULATIONS. Tenant shall comply with all reasonable rules and regulations which are now or which may be hereafter prescribed by Landlord and posted in or about the Leased Premises or otherwise brought to the notice of Tenant, both with regard to the Building and/or Project as a whole and to the Leased Premises including Common Area and Common Facilities.
ARTICLE XXV. QUIET ENJOYMENT
SECTION 25.01 QUIET ENJOYMENT. Upon payment by Tenant of the rents herein provided, and upon the observance and performance of all the covenants, terms and conditions on Tenant’s part to be observed and performed, Tenant shall peaceably and quietly hold and enjoy the Leased Premises for the Rental Term hereby demised without hindrance or interruption by Landlord or any other person or persons lawfully or equitably claiming by, through or under Landlord, subject, nevertheless, to the terms and conditions of this Lease and actions resulting from future eminent domain proceedings and casualty losses.
ARTICLE XXVI. SECURITY DEPOSIT
SECTION 26.01 SECURITY DEPOSIT. Landlord herewith acknowledges receipt of the amount set forth in Section 1.01 (U) which it is to retain as security for the faithful performance of all the covenants, conditions and agreements of this Lease, but in no event shall Landlord be obliged to apply the same upon rents or other charges in arrears or upon damages for Tenant’s failure to perform the such covenants, conditions and agreements; Landlord may so apply the Security Deposit, at its option; and Landlord’s right to the possession of the Leased Premises for non-payment of rents or for other reasons shall not in any event be affected by reason of the fact that Landlord holds the Security Deposit. Such sum, if not applied toward the
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payment of rents in arrears or toward the payment of damages suffered by Landlord by reason of Tenant’s breach of the covenants, conditions and agreements of this Lease, is to be returned to Tenant without interest when this Lease is terminated or expired, according to these terms, and in no event is the Security Deposit to be returned until Tenant has vacated the Leased Premises and delivered possession to Landlord.
In the event that Landlord repossesses the Leased Premises because of Tenant’s default or because of Tenant’s failure to carry out the covenants, conditions and agreements of this Lease, Landlord may apply the Security Deposit toward damages as may be suffered or shall accrue thereafter by reason of Tenant’s default or breach. In the event of bankruptcy or other debtor-creditor proceedings against Tenant as specified in Article XX, the Security Deposit shall be deemed to be applied first to the payment of Base Monthly Rent, Additional Rent and other charges due Landlord for the earliest possible periods prior to the filing of such proceedings. Landlord shall not be obliged to keep the Security Deposit as a separate fund, but may mix the same with its own funds.
ARTICLE XXVII. MISCELLANEOUS PROVISIONS
SECTION 27.01 WAIVER. No failure on the part of Landlord to enforce any covenant or provision of this Lease shall discharge or invalidate such covenant or provision or affect the right of Landlord to enforce the same in the event of any subsequent breach. One (1) or more waivers of any covenant or condition by Landlord shall not be construed as a waiver of a subsequent breach of the same covenant or condition and the consent to or approval of any subsequent similar act by Tenant. No breach of a covenant or condition of this Lease shall be deemed to have been waived by Landlord, unless such waiver is in writing signed by Landlord.
SECTION 27.02 ENTIRE LEASE AGREEMENT. This Lease constitutes the entire Lease and understanding between the parties hereto and supersedes all prior discussions, understandings and agreements. This Lease may not be altered or amended except by a subsequent written agreement executed by all parties.
SECTION 27.03 FORCE MAJEURE. Any failure to perform or delay in performance by either party of any obligation under this Lease, other than Tenant’s obligation to pay rent, shall be excused if such failure or delay is caused by any strike, lockout, governmental restriction or any similar cause beyond the control of the party so falling to perform, to the extent and for the period that such continues.
SECTION 27.04 LOSS AND DAMAGE. Landlord shall not be responsible or liable to Tenant for any loss or damage that may be occasioned by or through the acts or omissions of persons occupying all or any part of the Leased Premises adjacent to or connected with the Leased Premises or any part of the Building of which the Leased Premises are a part, or for any loss or damage resulting to Tenant or his property from bursting, stoppage or leaking of water, gas sewer or steam pipes or for any damage or loss of property within the Leased Premises from any cause whatsoever.
SECTION 27.05 ACCORD AND SATISFACTION. No payment by Tenant or receipt by Landlord of a lesser amount than the amount owing hereunder shall be deemed to be other than on account of the earliest stipulated amount receivable from Tenant, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such rent or receivable or pursue any other remedy available under this Lease or the law of the state where the Leased Premises are located.
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SECTION 27.06 NO OPTION. The submission of this Lease for examination does not constitute a reservation of or option for the Leased Premises and this Lease becomes effective as a lease only upon full execution and delivery thereof by Landlord and Tenant.
SECTION 27.07 ANTI-DISCRIMINATION. Tenant herein covenants by and for itself, its heirs, executors, administrators and assigns and all persons claiming under or through it, and this Lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons on account of race, sex, marital status, color, creed, national origin or ancestry, in the leasing, subleasing, assigning, use, occupancy, tenure or enjoyment of the Leased Premises, nor shall Tenant itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, or subtenants in the Leased Premises.
SECTION 27.08 SEVERABILITY. If any term, covenant or condition of this Lease or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Lease, or the application of such term, covenant or condition to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Lease shall be valid and be enforced to the fullest extent permitted by law.
SECTION 27.09 OTHER MISCELLANEOUS PROVISIONS. This instrument shall not be recorded without the prior written consent of Landlord; however, upon the request of either party hereto, the other party shall join in the execution of a memorandum or “short form” lease for recording purposes which memorandum shall describe the parties, the Leased Premises, the Rental Term and shall incorporate this Lease by reference, and may include other special provisions. The captions which precede the Sections of this Lease are for convenience only and shall in no way affect the manner in which any provisions hereof is construed. In the event there is more than one (1) Tenant hereunder, the liability of each shall be joint and several. This instrument shall be governed by and construed in accordance with the laws of the State wherein the Leased Premises are located. Words of any gender used in this Lease shall be held to include any other gender, and words in the singular number shall be held to include the plural when the sense requires. Time is of the essence of this Lease and every term, covenant and condition herein contained.
SECTION 27.10 REPRESENTATION REGARDING AUTHORITY. The persons who have executed this Lease represent and warrant that they are duly authorized to execute this Lease in their individual or representative capacity as indicated.
SECTION 27.11. TENANT CERTIFICATION. For purposes of compliance with Executive Order 13224 and related regulations, Landlord and Tenant hereby state, represent and warrant to each other that:
(a) Certification. Landlord and Tenant certify that:
(i) They are not acting, directly or indirectly, for or on behalf of any person, group, entity, or nation named by any Executive Order or the United States Treasury Department as a terrorist, “Specially Designated National and Blocked Person,” or other banned or blocked person, entity, nation, or transaction pursuant to any law, order, rule, or regulation that is enforced or administered by the Office of Foreign Assets Control; and
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(ii) They have not executed this Lease, directly or indirectly on behalf of, or instigating or facilitating this Lease, directly or indirectly on behalf of, any such person, group, entity, or nation.
(b) Indemnification. Tenant and Landlord hereby agree to defend, indemnify, and hold harmless the other party from and against any and all claims, damages, losses, risks, liabilities, and expenses (including attorneys’ fees and costs) arising from or related to any breach of the foregoing certification.
ARTICLE XXVIII. ADDITIONAL PROVISIONS
SECTION 28.01. OPTION TO RENEW. Provided Tenant is not, and has not been (more than two (2) times), in default under any of the terms and conditions contained herein, Tenant shall have two (2) additional consecutive five (5) year options to renew and extend the Rental Term as provided herein (“Option”). The Option shall only be exercised by Tenant delivering written notice thereof to Landlord no earlier than the date which is twelve (12) months prior to the expiration of the Rental Term and no later than the date which is nine (9) months prior to the expiration of the Rental Term (the “Option Notice”). The Base Monthly Rent during the first year of each extension periods shall be the lesser of: (i) the then current Fair Market Rate (as defined) for comparable space within the Project, and (ii) the Base Monthly Rent then in effect for the Leased Premises during the last month of the initial Rental Term (increasing each year thereafter by 3%, compounded). “Fair Market Rate” means the market rate for rent chargeable for the Leased Premises based upon the following factors applicable to the Leased Premises or any comparable premises: rent, escalation, term, size, expense stop, tenant allowance, existing tenant finishes, parking availability, and location and proximity to services.
Within thirty (30) days of Option Notice, Tenant shall notify Landlord of Tenant’s option of Fair Market Rate for the applicable renewal period. If Landlord disagrees with Tenant’s opinion of the Fair Market Rate, Landlord shall notify Tenant of Landlord’s opinion of Fair Market Rate within fifteen (15) days after receipt of Tenant’s opinion of Fair Market Rate (“Landlord’s Value Notice”). If the parties are unable to resolve their differences within thirty (30) days thereafter, Landlord or Tenant, at its sole option, may terminate this Lease, effective as of the last day of the then-current Rental Term. Alternatively, Tenant and Landlord may mutually agree to submit the determination of Fair Market Rate to a “Market Assessment Process,” as provided in Exhibit “F” – Market Assessment Process.
SECTION 28.02. RIGHT TO RERMINATE. Provided Tenant is not, and has not been (more than two (2) times), in default beyond any applicable cure period under any of the terms and provisions contained herein, Tenant shall have the right to terminate this Lease on or after the last day of the seventy-eighth (78th) full calendar month of the Rental Term. Tenant shall provide Landlord with three hundred sixty-five (365) days prior written notice of its intent to exercise this right to terminate. At the time Tenant gives it’s notice of its exercise of this right, Tenant shall pay a termination fee equal to the unamortized total of the following: TI Allowance, leasing commissions and Base Monthly Rent abatement, calculated at an eight percent (8%) per annum interest rate.
[Signature Pages to Follow]
IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this Lease as of the day and year first above written.
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SIGNATURES:
ACKNOWLEDGMENT OF LANDLORD
| STATE OF UTAH | ) | |||||||
| : ss. | ||||||||
| COUNTY OF SALT LAKE | ) | |||||||
On the 23rd day of January 2015, before me personally appeared O. RANDALL WOODBURY and W. RICHARDS WOODBURY, to me personally known, who being by me duly sworn did say that they are the President and Vice Chairman of WOODBURY CORPORATION, known to be the Manager of WILMINGTON GARDENS GROUP L.L.C., a
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Utah limited liability company, the company that executed the within instrument, known to me to be the persons who executed the within instrument on behalf of said company therein named, and acknowledged to me that such company executed the within instrument pursuant to its Operating Agreement.
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| Notary Public | ||||||||
ACKNOWLEDGMENT OF TENANT
| STATE OF Utah | ) | |||||||
| : ss. | ||||||||
| COUNTY OF Salt Lake | ) | |||||||
On the 23rd day of January 2015, before me personally appeared Jeremy Andrus and , to me personally known to be the CEO and of TRAEGER GRILLS LLC., a Delaware limited liability company, the company that executed the within instrument, known to me to be the persons who executed the within instrument on behalf of said corporation therein named, and acknowledged to me that such corporation executed the within instrument pursuant to its by-laws or a resolution of its board of directors.
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| Notary Public | ||||||||
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FIRST AMENDMENT TO LEASE
This First Amendment to Lease (hereinafter “First Amendment”) is entered into as of the 1st day of April 2015 (hereinafter “Effective Date”), by and between WILMINGTON GARDENS GROUP L.L.C., a Utah limited liability company (hereinafter “Landlord”), and TRAEGER PELLET GRILLS LLC, a Delaware limited liability company (hereinafter “Tenant”).
RECITALS
WHEREAS, Landlord and Tenant entered into that certain Lease dated January 23, 2015 (hereinafter “Lease”), pursuant to which Landlord leased to Tenant that certain premises designated as Suite 200, consisting of approximately 28,740 gross rentable area, located in Wilmington Gardens at 1215 East Wilmington Avenue in Salt Lake City, Utah (hereinafter “Leased Premises”); and
WHEREAS, Landlord and Tenant desire to amend certain provisions of the Lease as follows:
AGREEMENT
NOW, THEREFORE, in consideration and furtherance of the foregoing, the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Landlord and Tenant agree to the following terms and conditions:
| 1. | From and after the Effective Date of this First Amendment, Section 1.01(H), BUILDING, of the Lease shall be amended and modified as follows: | ||||
BUILDING (Section 2.01): Wilmington Gardens, consisting of one (1) building situated at 1215 East Wilmington Avenue in Salt Lake City, County of Salt Lake, State of Utah (“Building”). The gross rentable area of the Building (as defined in Section 2.01) is approximately 84,033 square feet. The Building is part of a larger mixed use development which is specifically described in Exhibit “B” and depicted in Exhibit “A” (the “Project”).
| 2. | From and after the Effective Date of this First Amendment, Section 1.01(l), LEASED PREMISES, of the Lease shall be amended and modified as follows: | ||||
| LEASED PREMISES (Section 2.01): That portion of the Building (as defined in Section 2.01) at the approximate location outlined on Exhibit “A-1” known as Suites 200 & 214, consisting of approximately 31,668 square feet of gross rentable area plus an adjacent outdoor patio depicted on Exhibit “A-1”, attached hereto and by this reference incorporated herein, and further described in Section 1.01(AA) below. (“Leased Premises”). Approximately seven and five hundred thousandths percent (7.500%) of such area is Tenant’s proportionate share of Common Area (as defined in Section 8.01) hallways, restrooms, etc. in the Building and Project. Outdoor patio area has been excluded from the calculation of Tenant’s pro-rata share. | |||||
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| 3. | From and after the Effective Date of this First Amendment, Exhibit “A-1” of the Lease shall be stricken in its entirety and replaced with Exhibit “A-1” attached hereto and incorporated herein. | ||||
| 4. | From and after the Effective Date of this First Amendment, Section 1.01(L), BASE MONTHLY RENT, of the Lease shall be amended and modified as follows: | ||||
BASE MONTHLY RENT (Section 3.01): Commencing as of the 1st day of the Rental Term Commencement Date and continuing through the last day of the 9th month, Base Monthly Rent shall be Zero and 00/100 Dollars ($0.00) (“Base Monthly Rent”).
| 5. | From and after the Effective Date of this First Amendment, Section 1.01(M), ESCALATIONS IN BASE MONTHLY RENT, of the Lease shall be amended and modified as follows: | ||||
ESCALATIONS IN BASE MONTHLY RENT (Section 3.02):
| Escalation Timeline | Base Monthly Rent | |||||||
|
Commencing the 1st day of the 10th month after the Rental Term Commencement Date
|
$72,572.50 | |||||||
|
Commencing the 1st day of the 13th month after the Rental Term Commencement Date
|
$74,749.68 | |||||||
|
Commencing the 1st day of the 25th month after the Rental Term Commencement Date
|
$76,992.17 | |||||||
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Commencing the 1st day of the 37th month after the Rental Term Commencement Date
|
$79,301.93 | |||||||
|
Commencing the 1st day of the 49th month after the Rental Term Commencement Date
|
$81,680.99 | |||||||
D-41
|
Commencing the 1st day of the 61nd month after the Rental Term Commencement Date
|
$83,314.61 | |||||||
|
Commencing the 1st day of the 73th month after the Rental Term Commencement Date
|
$84,980.90 | |||||||
|
Commencing the 1st day of the 85th month after the Rental Term Commencement Date
|
$86,680.52 | |||||||
|
Commencing the 1st day of the 97th month after the Rental Term Commencement Date
|
$88,414.13 | |||||||
|
Commencing the 1st day of the 109th month after the Rental Term Commencement Date
|
$90,182.41 | |||||||
|
Commencing the 1st day of the 121nd month after the Rental Term Commencement Date
|
$91,986.06 | |||||||
| 6. | From and after the Effective Date of this First Amendment, Section 1.01(N), LANDLORD’S SHARE OF BASE YEAR OPERATING EXPENSES, of the Lease shall be amended and modified as follows: | ||||
LANDLORD’S SHARE OF BASE YEAR OPERATING EXPENSES (Section 3.03): Landlord shall pay all Operating Expenses (as defined in Section 3.03) for the first twelve (12) months of the Rental Term for: (i) the Specified Project Area Base Year Operating Expenses (hereafter defined); (ii) the Specified Building Area Base Year Operating Expenses (hereafter defined); and (iii) the Specified Office Area Base Year Operating Expenses (hereafter defined) (the Specified Project Area Base Year Operating Expenses, the Specified Building Area Base Year Operating Expenses and the Specified Office Area Base Year Area Expenses are collectively referred to as the “Base Year Operating Expenses”).
| (i) | The term “Specified Project Area Base Year Operating Expenses” shall mean the Operating Expenses for the first twelve (12) months of the Rental Term associated with the area depicted on Exhibit “G”, labeled as the “Specified Project Area” and containing approximately 220,642 square feet of gross rentable area. | |||||||
| (ii) | The term “Specified Project Area Operating Expenses” shall mean the Operating Expenses for any Lease Year following the first twelve (12) months of the Rental Term which are associated with the Specified Project Area. | |||||||
| (iii) | The term “Specified Building Area Base Year Operating Expenses” shall mean the Operating Expenses for the first twelve (12) months of the Rental Term associated with the area depicted on Exhibit “G”, labeled as the “Specified Building Area” and containing approximately 84,033 square feet of gross rentable area. | |||||||
| (iv) | The term “Specified Building Area Operating Expenses” shall mean the Operating Expenses for any Lease Year following the first twelve (12) months of the Rental Term which are associated with the Specified Building Area. | |||||||
D-42
| (v) | The term “Specified Office Area Base Year Operating Expenses” shall mean the Operating Expenses for the first twelve (12) months of the Rental Term associated with the area depicted on Exhibit “G”, labeled as the “Specified Office Area” and containing approximately 71,558 square feet of gross rentable area. | |||||||
| (vi) | The term “Specified Office Area Operating Expenses” shall mean the Operating Expenses for any Lease Year following the first twelve (12) months of the Rental Term which are associated with the Specified Office Area. | |||||||
| 7. | From and after the Effective Date of this First Amendment, Exhibit “G” of the Lease shall be stricken in its entirety and replaced with Exhibit “G” attached herto and incorporated herein. | ||||
| 8. | From and after the Effective Date of this First Amendment, Section 1.01(o), TENANT’S PRO-RATA SHARE OF SPECIFIED PROJECT AREA BASE YEAR OPERATING EXPENSES, SPECIFIED BUILDING AREA BASE YEAR OPERATING EXPENSES AND SPECIFIED OFFICE AREA BASE YEAR OPERATING EXPENSES, of the Lease shall be amended and modified as follows: | ||||
TENANT’S PRO-RATA SHARE OF SPECIFIED PROJECT AREA BASE YEAR OPERATING EXPENSES, SPECIFIED BUILDING AREA BASE YEAR OPERATING EXPENSES AND SPECIFIED OFFICE AREA BASE YEAR OPERATING EXPENSES (Section 3.03):
| (i) | As more particularly set forth in Section 3.03 of this Lease, to the extent the amount of the Specified Project Area Operating Expenses for any Lease Year during the Rental Term exceed the amount of the Specified Project Area Base Year Operating Expenses, Tenant’s pro-rata share of the amount of such excess (if any) shall be fourteen and five hundred thirty-seven thousandths percent (14.537%) (“Tenant’s Share of Project Area Operating Expenses”). | |||||||
| (ii) | As more particularly set forth in Section 3.03 of this Lease, to the extent the amount of the Specified Building Area Operating Expenses for any Lease Year during the Rental Term exceed the amount of the Specified Building Area Base | |||||||
| Year Operating Expenses, Tenant’s pro-rata share of the amount of such excess (if any) shall be thirty-seven and two hundred one thousandths percent (37.201%) (“Tenant’s Share of Building Area Operating Expenses”). | |||||
| (iii) | As more particularly set forth in Section 3.03 of this Lease, to the extent the amount of the Specified Office Area Operating Expenses for any Lease Year during the Rental Term exceed the amount of the Specified Office Area Base Year Operating Expenses, Tenant’s pro-rata share of the amount of such excess (if any) shall be forty-four and two hundred fifty-five thousandths percent (44.255%) (“Tenant’s Share of Office Area Operating Expenses”). | |||||||
| (iv) | If it at any time(s) during the Rental Term the gross rentable area of any of the following shall change, the percentages set forth in this Section 1.01(O)(i)-(iii) and any other corresponding sections of this Lease shall be adjusted on a pro-rata basis to reflect such gross rentable area: (a) the Leased Premises, (b) the Specified Project Area, (c) the Specified Building Area, or (d) the Specified Office Area. | |||||||
D-43
| 9. | From and after the Effective Date of this First Amendment, Section 1.01(T), PREPAID RENT, of the Lease shall be amended and modified as follows: | ||||
PREPAID RENT: Seventy-Two Thousand Five Hundred Seventy-Two and 50/100 Dollars ($72,572.50), paid upon execution of this Lease to be applied to the first installment of Base Monthly Rent due hereunder.
| 10. | From and after the Effective Date of this First Amendment, Section 1.01(CC), TENANT IMPROVEMENT ALLOWANCE, of the Lease shall be amended and modified as follows: | ||||
TENANT IMPROVEMENT ALLOWANCE: Landlord shall provide Tenant an improvement allowance of an amount not to exceed One Million Six Hundred Seventy-Eight Thousand Four Hundred and Four and 00/100 Dollars ($1,678,404.00) in accordance with Exhibit “C-1” (the “Tl Allowance”). The Tl Allowance shall be used exclusively towards architectural, engineering, CDs and overall construction of the Leased Premises. In addition to the Tl Allowance, Landlord shall install the Snow Melt System, as outlined on Exhibit “C”, on approximately 3,600 sf of the outdoor patio area (total outdoor patio area is approximately 6,160 sf). The west portion of the outdoor patio shall be heated and fifty percent (50%) of the balance of the unheated portion of the outdoor patio shall be green scape.
| 11. | Except as specifically modified, altered, or changed by this First Amendment; the Lease and any amendments or extensions shall remain unchanged and in full force and effect throughout the Rental Term. Capitalized terms used in this First Amendment that are not defined herein shall have the meanings ascribed to them in the Lease. | ||||
[Signature Pages to Follow]
IN WITNESS THEREOF, the parties hereto have executed this First Amendment as of the date and year first above written.
D-44
| LANDLORD: | WILMINGTON GARDENS GROUP L.L.C., a Utah limited liability company | ||||||||||||||||
| By: |
WOODBURY CORPORATION, a Utah corporation,
Its Manager
|
||||||||||||||||
| By: | /s/ O. Randall Woodbury | ||||||||||||||||
| O. Randall Woodbury, President | |||||||||||||||||
| By: | /s/ Jeffrey K. Woodbury | ||||||||||||||||
| Jeffrey K. Woodbury, Vice President | |||||||||||||||||
| TENANT: | TRAEGER PELLET GRILLS LLC, a Delaware limited liability company | ||||||||||||||||
| By: | /s/ Jeremy Andrus | ||||||||||||||||
| Jeremy Andrus, CEO | |||||||||||||||||
ACKNOWLEDGMENT OF LANDLORD
|
STATE OF UTAH
|
) | |||||||
|
: ss.
|
||||||||
|
COUNTY OF SALT LAKE
|
) | |||||||
On the 28th day of May 2015, before me personally appeared O. RANDALL WOODBURY and JEFFREY K. WOODBURY, to me personally known, who being by me duly sworn did say that they are the President and Vice President of WOODBURY CORPORATION, known to be the Manager of WILMINGTON GARDENS GROUP L.L.C., a Utah limited liability company, the company that executed the within instrument, known to me to be the persons who executed the within instrument on behalf of said company therein named, and acknowledged to me that such company executed the within instrument pursuant to its Operating Agreement.
|
|
|||||||
| Notary Public | ||||||||
ACKNOWLEDGMENT OF TENANT
STATE OF UTAH )
: ss.
COUNTY OF UTAH )
D-45
On the 8th day of May 2015, before me personally appeared JEREMY ANDRUS, to me personally known to be the CEO of TRAEGER PELLET GRILLS LLC, a Delaware limited liability company, the company that executed the within instrument, known to me to be the persons who executed the within instrument on behalf of said company therein named, and acknowledged to me that such company executed the within instrument pursuant to its articles of organization.
|
|
|||||||
| Notary Public | ||||||||
D-46
EXHIBIT A-1 LEASE PLAN
D-47
EXHIBIT “G’ - COMMON AREA MAINTENANCE PLAN
D-48
SECOND AMENDMENT TO LEASE
This Second Amendment to Lease (hereinafter “Second Amendment”) is entered into as of the 8 day of February 2016 (hereinafter “Effective Date”), by and between WILMINGTON GARDENS GROUP L.L.C., a Utah limited liability company (hereinafter “Landlord”), and TRAEGER PELLET GRILLS LLC, a Delaware limited liability company, d/b/a TRAEGER GRILLS (hereinafter “Tenant”).
RECITALS
WHEREAS, Landlord and Tenant entered into that certain Lease dated January 23, 2015 (hereinafter “Lease”), pursuant to which Landlord leased to Tenant that certain premises designated as Suite 200, consisting of approximately 28,740 square feet of gross rentable area, located in the Wilmington Gardens in Salt Lake City, Utah (hereinafter “Original Leased Premises”);
WHEREAS, on or about April 1, 2015, Landlord and Tenant entered into that First Amendment to Lease whereby the Original Leased Premises were amended to include Suite 214, consisting of approximately 2,928 square feet of gross rentable area, for an amended total of approximately 31,668 square feet of gross rentable area plus an adjacent outdoor patio;
WHEREAS, the Rental Term is set to expire of its own terms on August 31, 2026; and
WHEREAS, Landlord and Tenant desire to amend certain provisions of the Lease as follows:
AGREEMENT
NOW, THEREFORE, in consideration and furtherance of the foregoing, the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Landlord and Tenant hereby agree to the following terms and conditions:
| 1. |
From and after the Effective Date of this Second Amendment, the Original Leased Premises shall be expanded by approximately 6,678 square feet of gross rentable area (the “Expansion Premises”).
|
|||||||
| 2. | From and after the Effective Date of this Second Amendment, Section 1.01(I), LEASED PREMISES, of the Lease shall be amended and modified as follows: | |||||||
| That portion of the Building (as defined in Section 2.01 of the Lease) known as Suites 200, 210 & 214, consisting of approximately 39,684 square feet of gross rentable area plus an adjacent outdoor patio, (hereafter “Leased Premises”). | ||||||||
| 3. | From and after the Effective Date of this Second Amendment, Tenant’s proportionate share of Common Area (as defined in Section 8.01 of the Lease) hallways, restrooms, etc. in the Building and Project shall be adjusted to reflect the increase in of gross rentable area | |||||||
D-49
| 4. | From and after the Effective Date of this Second Amendment, Section 1.01(K), RENTAL TERM, COMMENCEMENT AND EXPIRATION DATE, of the Lease shall be amended and modified as follows: | |||||||
|
The term of the Lease shall commence on the earlier to occur of (a) July 1, 2015 or (b) the date Tenant opens for business at the Original Leased Premises (“Rental Term Commencement Date”) and shall be for a period of ten (10) full Lease Years (as defined in Section 2.02 of the Lease), ending March 31, 2026 (“Rental Term”).
|
||||||||
| 5. | Base Monthly Rent during the Rental Term shall be amended as follows: | |||||||
| Escalation Date | Base Monthly Rent | |||||||||||||
|
April 1, 2016
|
$ 75,638.75 | |||||||||||||
|
July 1, 2016
|
$ 77,907.91 | |||||||||||||
|
May 1, 2017
|
$ 93,211.66 | |||||||||||||
|
July 1, 2017
|
$ 96,008.01 | |||||||||||||
|
July 1, 2018
|
$ 98,888.25 | |||||||||||||
|
July 1, 2019
|
$ 101,854.90 | |||||||||||||
|
July 1, 2020
|
$ 103,892.00 | |||||||||||||
|
July 1, 2021
|
$ 105,969.84 | |||||||||||||
|
July 1, 2022
|
$ 108,089.24 | |||||||||||||
|
July 1, 2023
|
$ 110,251.02 | |||||||||||||
|
July 1, 2024
|
$ 112,456.04 | |||||||||||||
|
July 1, 2025
|
$ 114,705.16 | |||||||||||||
| 6. | From and after the Effective Date of this Second Amendment, Section 1.01(N), LANDLORD’S SHARE OF BASE YEAR OPERATING EXPENSES, of the Lease shall be amended and modified as follows: | |||||||
Landlord shall pay all Operating Expenses (as defined in Section 3.03 of the Lease) for the first twelve (12) months of the Rental Term for: (i) the Specified Project Area Base Year Operating Expenses (hereafter defined); (ii) the Specified Building Area Base Year Operating Expenses (hereafter defined); and (iii) the Specified Office Area Base Year Operating Expenses (hereafter defined) (the Specified Project Area Base Year Operating Expenses, the Specified Building Area Base Year Operating Expenses and the Specified Office Area Base Year Operating Expenses are collectively referred to as the “Base Year Operating Expenses”).
| (i) |
The term “Specified Project Area Base Year Operating Expenses” shall mean the Operating Expenses for the first twelve (12) months of the Rental Term associated with the area depicted on Exhibit “G”, labeled as the “Specified Project Area” and containing approximately 220,544 square feet of gross rentable area.
|
|||||||
| (ii) |
The term “Specified Project Area Operating Expenses” shall mean the Operating Expenses for any Lease Year following the first twelve (12) months of the Rental Term which are associated with the Specified Project Area.
|
|||||||
D-50
| (iii) |
The term “Specified Building Area Base Year Operating Expenses” shall mean the Operating Expenses for the first twelve (12) months of the Rental Term associated with the area depicted on Exhibit “G”, labeled as the “Specified Building Area” and containing approximately 83,908 square feet of gross rentable area.
|
|||||||
| (iv) |
The term “Specified Building Area Operating Expenses” shall mean the Operating Expenses for any Lease Year following the first twelve (12) months of the Rental Term which are associated with the Specified Building Area.
|
|||||||
| (v) |
The term “Specified Office Area Base Year Operating Expenses” shall mean the Operating Expenses for the first twelve (12) months of the Rental Term associated with the area depicted on Exhibit “G” (of the Lease), labeled as the “Specified Office Area” and containing approximately 58,665 square feet of gross rentable area.
|
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| (vi) |
The term “Specified Office Area Operating Expenses” shall mean the Operating Expenses for any Lease Year following the first twelve (12) months of the Rental Term which are associated with the Specified Office Area.
|
|||||||
| 7. | From and after the Effective Date of this First Amendment, Section 1.01(O), TENANT’S PRO-RATA SHARE OF SPECIFIED PROJECT AREA BASE YEAR OPERATING EXPENSES, SPECIFIED BUILDING AREA BASE YEAR OPERATING EXPENSES AND SPECIFIED OFFICE AREA BASE YEAR OPERATING EXPENSES, of the Lease shall be amended and modified as follows: | |||||||
| (i) |
As more particularly set forth in Section 3.03 of this Lease, to the extent the amount of the Specified Project Area Operating Expenses for any Lease Year during the Rental Term exceed the amount of the Specified Project Area Base Year Operating Expenses, Tenant’s pro-rata share of the amount of such excess (if any) shall be seventeen and nine hundred ninety-four thousandths percent (17.994%) (“Tenant’s Share of Project Area Operating Expenses”).
|
|||||||
| (ii) |
As more particularly set forth in Section 3.03 of this Lease, to the extent the amount of the Specified Building Area Operating Expenses for any Lease Year during the Rental Term exceed the amount of the Specified Building Area Base Year Operating Expenses, Tenant’s pro-rata share of the amount of such excess (if any) shall be forty-six and six hundred forty thousandths percent (46.640%) (“Tenant’s Share of Building Area Operating Expenses”).
|
|||||||
| (iii) |
As more particularly set forth in Section 3.03 of this Lease, to the extent the amount of the Specified Office Area Operating Expenses for any Lease Year during the Rental Term exceed the amount of the Specified Office Area Base Year Operating Expenses, Tenant’s pro-rata share of the amount of such excess (if any) shall be sixty-seven and six hundred forty-five thousandths percent (67.645%) (“Tenant’s Share of Office Area Operating Expenses”).
|
|||||||
| (iv) | If it at any time(s) during the Rental Term the gross rentable area of any of the following shall change, the percentages set forth in this Section 1.01 (O)(i)-(iii) and any other corresponding sections of this Lease shall be adjusted on a pro-rata basis to reflect such gross rentable area: (a) the Leased Premises, (b) the Specified Project Area, (c) the Specified Building Area, or (d) the Specified Office Area. | |||||||
D-51
| 8. |
As consideration for entering into this Second Amendment, Landlord shall provide Tenant an additional allowance for improvements within Suite 210, the second floor entry area, and the outdoor patio in an amount not to exceed Three Hundred Twenty-Seven Thousand Two Hundred Twenty-Two and 00/100 Dollars ($327,222.00) (“Additional Tl Allowance”). Such Additional
|
|||||||
| Tl Allowance shall be paid in accordance with Landlord’s reimbursement procedure and shall be used exclusively towards architectural, engineering, CDs and overall construction within the Leased Premises. Tenant shall have the right to install additional restrooms in the Leased Premises, and deduct the cost of such restrooms from the Additional Tl Allowance. | |||||
| 9. | From and after the Effective Date of this Second Amendment, Tenant shall have the right, at the Landlord’s sole cost and expense, to relocate its signage from the west-facing patio to the west facing corrugated metal panel on the k second floor under the window in Suite 210. The specific location of the relocated sign shall be coordinated with and subject to the prior written approval of Landlord. | |||||||
| 10. | From and after the Effective Date of this Second Amendment, Tenant shall have the right, at its sole cost and expense, to expand the concrete area of their outdoor patio subject to Landlord’s prior written approval. | |||||||
| 11. |
From and after the Effective Date of this Second Amendment, Exhibit “G” of the Lease shall be amended and replaced with Exhibit “G” attached hereto and incorporated herein. Any reference to Exhibit “G” in the Lease and any amendment thereto shall hereafter refer to the Exhibit “G” attached hereto.
|
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| 12. | Except as specifically modified, altered, or changed by this Second Amendment; the Lease and any amendments or extensions shall remain unchanged and in full force and effect throughout the Rental Term. Capitalized terms used in this Second Amendment that are not defined herein shall have the meanings ascribed to them in the Lease. | |||||||
[Signature Pages to Follow]
IN WITNESS THEREOF, the parties hereto have executed this Second Amendment as of the date and year first above written.
D-52
| LANDLORD: |
WILMINGTON GARDENS GROUP L.L.C., a Utah limited
liability company
|
||||||||||||||||||||||||||||
| By: |
WGG PARENT L.L.C., a Utah limited liability company,
Its Member
|
||||||||||||||||||||||||||||
| By: |
CASA DE AZUCAR L.L.C., a Utah limited
liability company, Its Member
|
||||||||||||||||||||||||||||
| By: |
WOODBURY CORPORATION, a Utah
corporation, its Manager
|
||||||||||||||||||||||||||||
| By: | /s/ O. Randall Woodbury | ||||||||||||||||||||||||||||
| O. Randall Woodbury, President | |||||||||||||||||||||||||||||
| By: | /s/ Jeffery K. Woodbury | ||||||||||||||||||||||||||||
|
Jeffery K. Woodbury, President
|
|||||||||||||||||||||||||||||
| By: |
DEE’S WILMINGTON, LLC, a Utah limited
liability company, Its Member
|
||||||||||||||||||||||||||||
|
By:
|
/s/ Todd Olsen | ||||||||||||||||||||||||||||
| Todd Olsen, Manager | |||||||||||||||||||||||||||||
|
TENANT:
|
TRAEGER PELLET GRILLS LLC, a Delaware limited liability company
|
||||||||||||||||||||||||||||||||||
|
By:
|
/s/ Jeremy Andrus | ||||||||||||||||||||||||||||||||||
|
Jeremy Andrus, Chief Executive Officer
|
|||||||||||||||||||||||||||||||||||
ACKNOWLEDGMENT OF LANDLORD
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
D-53
On the 2nd day of February 20 , before me personally appeared O. RANDALL WOODBURY and JEFFREY K. WOODBURY, to me personally known, who being by me duly sworn did say that they are the President and Vice President of WOODBURY CORPORATION, known to be the Manager of CASA DE AZUCAR L.L.C., a Utah limited liability, the company that executed the within instrument, known to me to be the persons who executed the within instrument on behalf of such company therein named, and acknowledged to me that such company executed the within instrument pursuant to its Operating Agreement.
|
|
|||||||
| Notary Public | ||||||||
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
On the 8th day of February 2016, before me personally appeared TODD OLSEN, to me personally known, who being by me duly sworn did say that he is the Manager of DEE’S WILMINGTON, LLC, a Utah limited liability company, known to be the Manager of CASA DE AZUCAR L.L.C., a Utah limited liability, the company that executed the within instrument, known to me to be the persons who executed the within instrument on behalf of such company therein named, and acknowledged to me that such company executed the within instrument pursuant to its Operating Agreement.
|
||||||||
| Notary Public | ||||||||
ACKNOWLEDGMENT OF TENANT
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
On the 27th day of January 2016, before me personally appeared JEREMY ANDRUS, to me personally known to be the CHIEF EXECUTIVE OFFICER of TRAEGER PELLET
D-54
GRILLS LLC, a Delaware limited liability company, the company that executed the within instrument, known to me to be the persons who executed the within instrument on behalf of said company therein named, and acknowledged to me that such company executed the within instrument pursuant to its articles of organization.
|
||||||||
| Notary Public | ||||||||
|
||||||||
EXHIBIT “G”
COMMON AREA MAINTENANCE PLAN
D-55
COMMON AREA MAINTENANCE PI.AN
D-56
THIRD AMENDMENT TO LEASE
This Third Amendment to Lease (hereinafter “Third Amendment”) is entered into as of the 22 day of November 2016 (hereinafter “Effective Date”), by and between WILMINGTON GARDENS GROUP L.L.C., a Utah limited liability company (hereinafter “Landlord”), and TRAEGER PELLET GRILLS LLC, a Delaware limited liability company (hereinafter “Tenant”).
RECITALS
WHEREAS, Landlord and Tenant entered into that certain Lease dated January 23, 2015 (hereinafter “Lease”), pursuant to which Landlord leased to Tenant that certain premises designated as 1215 East Wilmington Avenue, Suite 200, Salt Lake City, Utah, 84106 consisting of approximately 28,740 square feet of gross rentable area (hereinafter “Old Leased Premises”);
WHEREAS, on or about April 1, 2015, Landlord and Tenant entered into that certain First Amendment to Lease, whereby the Leased Premises were amended to include Suite 214, consisting of approximately 2,928 square feet of gross rentable area, for an amended total square footage of approximately 31,668 square feet of gross rentable area, plus an adjacent outdoor patio;
WHEREAS, Landlord and Tenant agree that the approximate square footage of Suite 214 shall hereby be corrected to consist of approximately 4,266 square feet of gross rentable area, for an amended total of approximately 33,006 square feet of gross rentable area;
WHEREAS, on or about February 8, 2016, Landlord and Tenant entered into that certain Second Amendment to Lease, whereby the Leased Premises were amended to include Suite 210, consisting of approximately 6,678 square feet of gross rentable area, for an amended total of approximately 39,684 square feet of gross rentable area, plus an adjacent outdoor patio “(Leased Premises”); and
WHEREAS, the Rental Term is set to expire of its own terms on March 31, 2026;
WHEREAS, Landlord and Tenant desire to amend the Rental Term and Base Monthly Rent; and
WHEREAS, Landlord and Tenant desire to modify the Lease as follows:
AGREEMENT
NOW, THEREFORE, in consideration and furtherance of the foregoing, the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Landlord and Tenant hereby agree to the following terms and conditions:
| 1. | Base Monthly Rent during the Rental Term shall be amended as follows: | |||||||
Commencing April 1, 2017 and continuing through June 30, 2017, Base Monthly Rent shall be Ninety-Three Thousand Six Hundred Seventy and 78/100 Dollars ($93,670.78) payable in equal consecutive monthly installments.
D-57
| 2. | Escalations in Base Monthly Rent during the Rental Term shall occur as follows: | |||||||
| Escalation Date | Annual Rent |
Base
Monthly Rent
|
||||||||||||||||||||||||
|
July 1, 2017
|
$1,157,770.80 | $ 96,480.90 | ||||||||||||||||||||||||
|
July 1, 2018
|
$1,192,503.96 | $ 99,375.33 | ||||||||||||||||||||||||
|
July 1, 2019
|
$1,228,278.96 | $102,356.58 | ||||||||||||||||||||||||
|
July 1, 2020
|
$1,252,844.64 | $104,403.72 | ||||||||||||||||||||||||
|
July 1, 2021
|
$1,277,901.48 | $106,491.79 | ||||||||||||||||||||||||
|
July 1, 2022
|
$1,303,459.56 | $108,621.63 | ||||||||||||||||||||||||
|
July 1, 2023
|
$1,329,528.72 | $110,794.06 | ||||||||||||||||||||||||
|
July 1, 2024
|
$1,356,119.28 | $113,009.94 | ||||||||||||||||||||||||
|
July 1, 2025
|
$1,383,241.68 | $115,270.14 | ||||||||||||||||||||||||
| 3. | Tenant shall continue to make its monthly payment toward Tenant’s Share of Operating Expenses. | |||||||
| 4. |
Landlord shall provide Tenant an additional allowance for improvements within the Leased Premises in an amount not to exceed Seventy Thousand Nine Hundred Fourteen and 00/100 Dollars ($70,914.00) (“Additional TI Allowance”). Such Additional TI Allowance shall be paid in accordance with Landlord’s reimbursement procedure and shall be used exclusively towards architectural, engineering, CDs and overall construction within the Leased Premises.
|
|||||||
| 5. | Except as specifically modified, altered, or changed by this Third Amendment; the Lease and any amendments or extensions shall remain unchanged and in full force and effect throughout the Rental Term. Capitalized terms used in this Third Amendment that are not defined herein shall have the meanings ascribed to them in the Lease. | |||||||
[Signature Pages to Follow]
IN WITNESS THEREOF, the parties hereto have executed this Third Amendment as of the date and year first above written.
D-58
| LANDLORD: | WILMINGTON GARDENS GROUP L.L.C., a Utah limited liability company | ||||||||||||||||||||||
|
By:
|
WGG PARENT L.L.C., a Utah limited liability company, Its Member
|
||||||||||||||||||||||
|
WITH WGG MEMBER APPROVAL:
|
|||||||||||||||||||||||
|
By:
|
WOODBURY CORPORATION, a Utah Corporation, Its Manager | ||||||||||||||||||||||
| By: | /s/ O. Randall Woodbury | ||||||||||||||||||||||
| Its: O. Randall Woodbury, President | |||||||||||||||||||||||
| By: | /s/ W. Riohards Woodbury | ||||||||||||||||||||||
| Its: W. Riohards Woodbury, Vice Chairman | |||||||||||||||||||||||
| TENANT: | TRAEGER PELLET GRILLS LLC, a Delaware limited liability company | ||||||||||||||||||||||
|
By:
|
/s/Jeremy Andrus | ||||||||||||||||||||||
| Jeremy Andrus, Chief Executive Officer | |||||||||||||||||||||||
ACKNOWLEDGMENT OF TENANT
|
STATE OF UTAH
|
)
|
|||||||||||||
|
: ss.
|
||||||||||||||
|
COUNTY OF SALT LAKE
|
)
|
|||||||||||||
On the 22nd day of NOVEMBER 2016, before me personally appeared JEREMY ANDRUS, to me personally known to be the CHIEF EXECUTIVE OFFICER of TRAEGER PELLET GRILLS LLC, a Delaware limited liability company, the company that executed the within instrument, known to me to be the persons who executed the within instrument on behalf of such company therein named, and acknowledged to me that such company executed the within instrument pursuant to its articles of organization.
D-59
|
||||||||
| Notary Public | ||||||||
|
||||||||
ACKNOWLEDGMENT OF LANDLORD
|
STATE OF UTAH
|
) | |||||||
|
: ss.
|
||||||||
|
COUNTY OF SALT LAKE
|
) | |||||||
On the 5 day of December 2016, before me personally appeared O. Randall Woodbury and W. Richards Woodbury, to me personally known, who being by me duly sworn did say that they are the President and Vice Chairman of WOODBURY CORPORATION, known to be the Manager of WGG PARENT L.L.C., a Utah limited liability company, known to be a member of WILMINGTON GARDENS GROUP L.L.C., a Utah limited liability company, the company that executed the within instrument, known to me to be the persons who executed the within instrument on behalf of such company therein named, and acknowledged to me that such company executed the within instrument pursuant to its Operating Agreement.
|
Notary Public
|
|||||||||||||||||||
D-60
FOURTH AMENDMENT TO LEASE
This Fourth Amendment to Lease (hereinafter “Fourth Amendment”) is entered into as of the 4 day of December 2017 (hereinafter “Effective Date”), by and between WILMINGTON GARDENS GROUP L.L.C., a Utah limited liability company (hereinafter “Landlord”), and TRAEGER PELLET GRILLS LLC, a Delaware limited liability company (hereinafter “Tenant”).
RECITALS
WHEREAS, Landlord and Tenant entered into that certain Lease dated January 23, 2015 (hereinafter “Lease”), pursuant to which Landlord leased to Tenant that certain premises located at 1215 East Wilmington Avenue, Suite 200, Salt Lake City, Utah (“Leased Premises”), located in Wilmington Gardens;
WHEREAS, on or about April 1, 2015, Landlord and Tenant entered into that certain First Amendment to Lease;
WHEREAS, on or about February 8, 2016, Landlord and Tenant entered into that certain Second Amendment to Lease;
WHEREAS, on or about November 22, 2016, Landlord and Tenant entered into that certain Third Amendment to Lease;
WHEREAS, the Rental Term is set to expire of its own terms on March 31, 2026;
WHEREAS, Landlord and Tenant desire to expand the Leased Premises; and
WHEREAS, Landlord and Tenant desire to modify the Lease as follows:
AGREEMENT
NOW, THEREFORE, in consideration and furtherance of the foregoing, the mutual covenants and agreement herein contained and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Landlord and Tenant hereby agree to the following terms and conditions:
| 1. | From and after the Effective Date of this Fourth Amendment, the Leased Premises shall be expanded to include Suite 170, consisting of approximately 11,467 square feet of gross rentable area, as depicted on Exhibit “A-1”. Tenant shall accept Suite 170 in “as is” condition. | |||||||
| 2. | From and after the Effective Date of this Fourth Amendment, Section 1.01 (I), LEASED PREMISES, of the Lease shall be amended and restated as follows: | |||||||
“That portion of the Building (as defined in Section 2.01 of the Lease) known as Suites 170 and 200, consisting of approximately 51,151 square feet of gross rentable area plus an adjacent outdoor patio (“Leased Premises”), as substantially depicted on Exhibit “A-1”.
D-61
| 3. | From and after the Effective Date of this Fourth Amendment, all references to Exhibit “A-1” in the Lease, and any amendments or extensions thereto, shall refer to the Exhibit “A-1” attached hereto and by this reference incorporated herein. | |||||||
| 4. | Base Monthly Rent during the Rental Term shall be amended to occur as follows: | |||||||
Commencing January 1, 2018 and continuing through June 30, 2018, annual Base Monthly Rent shall be One Million Four Hundred Ninety-Two Thousand Three Hundred Seventeen and 60/100 Dollars ($1,492,317.60), payable in equal consecutive monthly installments of One Hundred Twenty-Four Thousand Three Hundred Fifty-Nine and 80/100 Dollars ($124,359.80).
| 5. | Escalations in Base Monthly Rent during the Rental Term shall occur as follows: | |||||||
| Escalation Date |
Annual Base
Monthly Rent |
Base
Monthly Rent |
||||||||||||||||||||||||
|
July 1, 2018
|
$1,537,087.2 | $128,090.6 | ||||||||||||||||||||||||
|
July 1, 2019
|
$1,583,199.84 | $131,933.32 | ||||||||||||||||||||||||
|
July 1, 2020
|
$1,614,863.76 | $134,571.98 | ||||||||||||||||||||||||
|
July 1, 2021
|
$1,647,161.04 | $137,263.42 | ||||||||||||||||||||||||
|
July 1, 2022
|
$1,680,104.28 | $140,008.69 | ||||||||||||||||||||||||
|
July 1, 2023
|
$1,713,706.32 | $142,808.86 | ||||||||||||||||||||||||
|
July 1, 2024
|
$1,747,980.48 | $145,665.04 | ||||||||||||||||||||||||
|
July 1, 2025
|
$1,782,940.08 | $148,578.34 | ||||||||||||||||||||||||
| 6. | From and after the Effective Date of this Fourth Amendment, Tenant’s proportionate share of Operating Expenses (as defined in Section 3.03 of the Lease) hallways, restrooms, etc. in the Building and Project shall be adjusted to reflect the increase of gross rentable area. | |||||||
| 7. | Tenant shall be permitted to use Suite 170 for the operation of a retail show room, demonstration kitchen, hosting “Traeger Shop Classes”, general office use, and for no other use without Landlord’s consent. “Traeger Shop Classes” shall be defined as a regularly scheduled class open to the public demonstrating food preparation and cooking techniques. | |||||||
| 8. | As consideration for entering into this Fourth Amendment, Tenant shall, upon execution of this Fourth Amendment pay to Landlord Thirty Thousand and 00/100 Dollars ($30,000.00) as additional Security Deposit for a combined total of One | |||||||
D-62
| Hundred Fifteen Thousand and 00/100 Dollars ($115,000.00) as Security Deposit under the Lease. | |||||
| 9. | At the end of the Rental Term, or any Rental Term extension or renewal thereof, or in the event Landlord or Tenant terminates the Lease, Tenant shall remove all signage on or within the Leased Premises prior to vacating the Leased Premises. In the event Tenant fails to remove its signage within ten (10) days of the expiration or earlier termination of the Lease, Tenant shall pay to Landlord a fee of Fifty and 00/100 Dollars ($50.00) per day for each day Tenant fails to remove its signage from the Leased Premises. Tenant shall, at Tenant’s sole cost and expense, repair any and all damage from the removal of any Tenant signage. | |||||||
| 10. | Tenant may, at its sole cost and expense, add signage to the signage band in front of Suite 170. Tenant may also, at its sole cost and expense, move existing signage that faces the plaza to a location over the main entrance of the building in a location designated by Landlord. In addition, at its sole cost and expense, Tenant may replace prior tenant’s sign on the signage tower located at the southwest end of the plaza. All signage must be approved by Landlord in writing pursuant to Section 9.02 of the Lease. | |||||||
| 11. | All notices to be given under this Fourth Amendment and the Lease shall be in writing and sent by United States certified mail, return receipt requested with postage prepaid, or by a nationally recognized overnight courier or expedited mail service, and addressed as follow: | |||||||
D-63
| If to Tenant at: | Traeger Grills | |||||||
| Attn: Jeremy Andrus | ||||||||
| 1215 East Wilmington Avenue, Suite 200 | ||||||||
| Salt Lake City, Utah 84106 | ||||||||
| With a copy to: | Jones Waldo Holbrook & McDonough, PC | |||||||
| Attn: Keven M. Rowe | ||||||||
| 170 South Main Street, Suite 1500 | ||||||||
| Salt Lake City, Utah 84101 | ||||||||
| If to Landlord at: | Wilmington Gardens Group L.L.C. | |||||||
| c/o Woodbury Corporation | ||||||||
|
Attn: Lease Administration
2733 East Parleys Way, Suite 300
|
||||||||
| Salt Lake City, Utah 84109 | ||||||||
| Ref: 2250 – Traeger Pellet Grills, Space 170 | ||||||||
| With a copy to: |
Wilmington Gardens Group L.L.C,
c/o Woodbury Corporation
Attn: Legal Department
2733 East Parleys Way, Suite 300
Salt Lake City, Utah 84109
Ref: 2250 – Traeger Pellet Grills, Space 170
|
|||||||
In order for notices to be deemed received by Landlord, Tenant must include the reference details as outlined above.
| 12. | Except as specifically modified, altered, or changed by this Fourth Amendment; the Lease and any amendments or extensions shall remain unchanged and in full force and effect throughout the Rental Term. Capitalized terms used in this Fourth Amendment that are not defined herein shall have the meanings ascribed to them in the Lease. | |||||||
[Signature Pages to Follow]
IN WITNESS THEREOF, the parties hereto have executed this Fourth Amendment as of the date and year first above written.
D-64
ACKNOWLEDGMENTS OF LANDLORD
| STATE OF UTAH | ) | |||||||
| : ss. | ||||||||
| COUNTY OF SALT LAKE | ) | |||||||
On the 1st day of Dec. 2017, before me personally appeared O. RANDALL WOODBURY, to me personally known, who being by me duly sworn did say that he is the President of WOODBURY CORPORATION, a Utah corporation, known to be the Manager of WGG PARENT L.L.C., a Utah limited liability company, known to be a Member of WILMINGTON GARDENS GROUP L.L.C., a Utah limited liability company, the company that executed the within instrument, known to me to be the person who executed the within instrument on behalf of such company therein named, and acknowledged to me that such company executed the within instrument pursuant to its Operating Agreement.
D-65
|
|
|||||||
| Notary Public | ||||||||
| STATE OF UTAH | ) | |||||||
| : ss. | ||||||||
| COUNTY OF SALT LAKE | ) | |||||||
On the 4th day of Dec. 2017, before me personally appeared W. RICHARDS WOODBURY, to me personally known, who being by me duly sworn did say that he is the Chairman of WOODBURY CORPORATION, a Utah corporation, known to be the Manager of WGG PARENT L.L.C., a Utah limited liability company, known to be a Member of WILMINGTON GARDENS GROUP L.L.C., a Utah limited liability company, the company that executed the within instrument, know to me to be the person who executed the within instrument on behalf of such company therein named, and acknowledged to me that such company executed the within instrument pursuant to its Operating Agreement.
|
|
|||||||
| Notary Public | ||||||||
ACKNOWLEDGMENT OF TENANT
|
STATE OF UTAH
|
) | |||||||
|
: ss.
|
||||||||
|
COUNTY OF SALT LAKE
|
) | |||||||
On the 17TH day of NOVEMBER 2017, before me personally appeared JEREMY ANDRUS, to me personally known to be the Chief Executive Officer of TRAEGER PELLET GRILLS, LLC, a Delaware limited liability company, the company that executed the within instrument, known to me to be the persons who executed the within instrument on behalf of such company therein named, and acknowledged to me that such company executed the within instrument pursuant to its articles of organization.
D-66
|
||||||||
| Notary Public | ||||||||
|
||||||||
EXHIBIT “A-1”
LEASED PREMISES
D-67
D-68
D-69
FIFTH AMENDMENT TO LEASE
This Fifth Amendment to Lease (“Fifth Amendment”) is entered into as of the 28th day of August 2018 (“Effective Date”), by and between WILMINGTON GARDENS GROUP L.L.C., a Utah limited liability company (“Landlord”), and TRAEGER PELLET GRILLS LLC, a Delaware limited liability company (“Tenant”).
RECITALS
WHEREAS, Landlord and Tenant entered into that certain Lease dated January 23, 2015 (“Lease”), pursuant to which Landlord leased to Tenant that certain premises located at 1215 East Wilmington Avenue, known as Suite 200 which includes an adjacent outdoor patio, Salt Lake City, County of Salt Lake, State of Utah 84106 (“Leased Premises”), currently consisting of approximately 51,151 square feet of gross rentable area, located in Wilmington Gardens;
WHEREAS, on or about April 1 ,2015, Landlord and Tenant entered into that certain First Amendment to Lease;
WHEREAS, on or about February 8,2016, Landlord and Tenant entered into that certain Second Amendment to Lease;
WHEREAS, on or about November 22,2016, Landlord and Tenant entered into that certain Third Amendment to Lease;
WHEREAS, on or about December 4,2017, Landlord and Tenant entered into that certain Fourth Amendment to Lease;
WHEREAS, the Rental Term is set to expire of its own terms on June 30, 2O26; and
WHEREAS, Landlord and Tenant desire to modify the Lease as follows:
AGREEMENT
NOW, THEREFORE, in consideration and furtherance of the foregoing, the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Landlord and Tenant hereby agree to the following terms and conditions:
| 1. | From and after the Effective Date of this Fifth Amendment, Exhibit “B” of the Lease shall be stricken in its entirety and replaced with Exhibit “B” attached hereto. All references to Exhibit “B” in the Lease, and any amendments or extensions thereto, shall refer to Exhibit “B” attached hereto and by this reference incorporated herein. | |||||||
| 2. |
In lieu of any other provisions in the Lease and this Fifth Amendment, all notices, demands, requests, consents, approval and other communications required or permitted to be given pursuant to the Lease and this Fifth Amendment (collectively “Notices”) shall be in writing and shall be sent by certified mail with return receipt requested, or by nationally known courier service with verification of receipt or refusal (including date of delivery or refusal), in each case with postage or delivery fees prepaid and addressed to a party at the addresses set forth below:
|
|||||||
D-70
| If to Tenant at: |
Traeger Pellet Grills LLC
Attn: Jeremy Andrus
1215 East Wilmington Avenue, Suite 200
Salt Lake City, UT 84106
|
|||||||
| With a copy to: |
Jones Waldo Holbrook & McDonough, PC
Attn: Keven M. Rowe
170 South Main Street, Suite 1500
Salt Lake City, UT 84101
|
|||||||
| If to Landlord at: |
Wilmington Gardens Group L.L.C.
c/o Woodbury Corporation
Attn: Lease Administration
2733 East Parleys Way, Suite 300
Salt Lake City, UT 84109
Ref: #2250 – Traeger Pellet Grills, Space 200
|
|||||||
| With a copy to: |
Wilmington Gardens Group L.L.C.
c/o Woodbury Corporation
Attn: Legal Department
2733 East Parleys Way, Suite 300
Salt Lake City, UT 84109
Ref: #2250 – Traeger Pellet Grills, Space 200
|
|||||||
Notices are deemed given upon receipt or refusal of delivery. From time to time a party may specify any other address in the United States of America upon twenty (20) days’ advance notice thereof, similarly given, to the other party hereto. Notices sent by facsimile transmission, electronic mail or any other method not specifically mentioned herein shall not satisfy the requirements of this Section 2. No party may have more than three (3) addresses for Notices at any time.
| 3. | Except as specifically modified, altered, or changed by this Fifth Amendment; the Lease and any amendments or extensions shall remain unchanged and in full force and effect throughout the Rental Term. Capitalized terms used in this Fifth Amendment that are not defined herein shall have the meanings ascribed to them in the Lease. | |||||||
IN WITNESS THEREOF, the parties hereto have executed this Fifth Amendment as of the date and year first above written.
D-71
| LANDLORD: | WILMINGTON GARDENS GROUP L.L.C., a Utah limited liability company | |||||||||||||||||||||||||
| By: | WGG PARENT L.L.C., a Utah limited liability company, Its Member | |||||||||||||||||||||||||
| By: | WOODBURY CORPORATION, a Utah corporation, Its Manager | |||||||||||||||||||||||||
| By: | /s/ O. Randall Woodbury | |||||||||||||||||||||||||
| O. Randall Woodbury, President | ||||||||||||||||||||||||||
| By: | /s/ W. Richards Woodbury | |||||||||||||||||||||||||
| W. Richards Woodbury, Chairman | ||||||||||||||||||||||||||
| TENANT: | TRAEGER PELLET GRILLS LLC, a Delaware limited liability company | |||||||||||||||||||||||||
| By: | /s/ Jeremy Andrus | |||||||||||||||||||||||||
| Jeremy Andrus, Chief Executive Officer | ||||||||||||||||||||||||||
ACKNOWLEDGMENTS OF LANDLORD
| STATE OF UTAH | ) | |||||||
| : ss. | ||||||||
| COUNTY OF SALT LAKE | ) | |||||||
On the 27th day of August 2018, before me personally appeared O. RANDALL WOODBURY to me Personally known, who being by me duly sworn did say that they are the President of WOODBURY CORPORATION, a Utah corporation, known to be the Manager of WGG PARENT L.L.C., a Utah limited liability company, known to be a Member of WILMINGTON GARDENS GROUP L.L.C., a Utah limited liability company, the company that executed the within instrument, known to me to be the person who executed the within instrument on behalf of such company therein named, and acknowledged to me that such company executed the within instrument pursuant to its Operating Agreement.
D-72
|
|
|||||||
| Notary Public | ||||||||
| STATE OF UTAH | ) | |||||||
| : ss. | ||||||||
| COUNTY OF SALT LAKE | ) | |||||||
On the 28th day of August 2018, before me personally appeared W. RICHARDS WOODBURY, to me personally known, who being by me duly sworn did say that they are the Chairman of WOODBURY CORPORATION, a Utah corporation, known to be the Manager of WGG PARENT L.L.C., a Utah limited liability company, known to be a Member of WILMINGTON GARDENS GROUP L.L.C., a Utah limited liability company, the company that executed the within instrument, known to me to be the person who executed the within instrument on behalf of such company therein named, and acknowledged to me that such company executed the within instrument pursuant to its Operating Agreement.
|
|
|||||||
| Notary Public | ||||||||
ACKNOWLEDGMENT OF TENANT
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
On the 21ST day of AUGUST 2018, before me personally appeared JEREMY ANDRUS, to me personally known to be the Chief Executive Officer of TRAEGER PELLET GRILL, LLC, a Delaware limited liability company, the company that executed the within instrument, known to me to be the persons who executed the within instrument on behalf of such company therein named, and acknowledged to me that such company executed the within instrument pursuant to its articles of organization.
D-73
|
||
| Notary Public | ||
|
||
EXHIBIT “B”
LEGAL DESCRIPTION
II
Unit 1C contained within Wilmington Gardens Condominium, a Utah mixed use condominium project, as the same is identified in the Declaration of Condominium and Bylaws recorded September 18, 2015 as Entry No. 12134565 in Book 10362 at Page 6416 of the official records of the Salt Lake County, Utah Recorder (as said Declaration may heretofore have been amended or supplemented), and in the Condominium Plat recorded September 18 2015 as Entry No. 12134564, in Book 2015P of Plats at Page 220 of the official records of the Salt Lake County, Utah Recorder (as said Condominium Plat may heretofore have been amended or supplemented).
D-74