Exhibit 10.1

 

FULL SERVICE OFFICE BUILDING LEASE AGREEMENT

THIS AGREEMENT OF LEASE, herein after called “Lease”, made as of the 10th day of
November, 2016 (the “Lease Date”), by and between VALLEY GROVE, LLC, a Maryland
limited liability company (hereinafter called "Landlord"), and INSTRUCTURE,
INC., a Delaware corporation (hereinafter called "Tenant").

 

WITNESSETH, that Tenant covenants and agrees with Landlord as follows:

 

LEASED PREMISES

1.Landlord is the owner of Grove Tower, a future office building to be located
at the intersection of Pleasant Grove Boulevard and Granite Way, (hereinafter
referred to as the "Building") and the land upon which the Building is situated,
and any additional facilities in subsequent years as may be determined by
Landlord to be reasonably necessary or desirable for the management, maintenance
or operation of the Building located in Pleasant Grove, Utah 84062, (hereinafter
referred to as the “Property”).

Building shall be a Class A office building with Class A finishes comparable to,
or better then, other Class A office buildings in Utah County.  Building and
associated site plan shall be substantially similar to the renderings and site
plan attached as Exhibit B (colors and materials subject to change and Landlord
welcomes the input of Tenant’s Design Representative in those decisions).
 Building shall be no less than six (6) floors with floor-to-ceiling glass on
all floors.  Building shall measure floor-to-floor no less than 13’-6” and
accommodate a 10’ drop ceiling.”  Building shall have mechanical, electrical and
plumbing systems comparable to other Class A office buildings in Utah County.  

Tenant shall be allowed one person to act on behalf of Tenant (“Tenant’s Design
Representative”) to provide design recommendations and input to Landlord.
 Landlord shall be responsible for all Building design and construction
decisions to assure deliverance of the Building per the above requirements.

Landlord does hereby lease unto Tenant, and Tenant does hereby lease from
Landlord, that portion of the Building on the fifth (5th) and sixth (6th) floors
containing an agreed upon 65,172 rentable square feet, to be known as Suite 600,
(hereinafter referred to as the "Leased Premises").  All measurements shall be
in accordance with BOMA ANSI Z 65.1 1980 (reaffirmed 1996).

 

TERM

2.The term of this Lease, (hereinafter referred to as the "Term"), shall
commence six (6) months from completion of Warm Shell Condition and Substantial
Completion of the 6th Floor Improvements (hereinafter called “Lease Commencement
Date”) and Terminate ten (10) years from 5th Floor Rent Commencement, as defined
in Section 3 below (hereinafter called “Lease Termination

TENANT INITIALS: ________

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Date”), unless the Lease is earlier terminated or extended pursuant to any other
provision of this Lease or to law.

 

PHASED OCCUPANCY & RENT COMMENCEMENT DATES

3. 6th Floor:  Upon Lease Commencement Date, Tenant shall pay to Landlord a base
annual rental equal to $802,500.00 (hereinafter called “Annual Rent”).  Annual
Rent is payable in advance on the first day of each and every month in equal
monthly installments of $66,875.00.  The Annual Rent shall increase by 2.5% on
the Anniversary Date of the Lease Commencement Date and every Anniversary Date
thereafter.

5th Floor:  5th Floor Occupancy will be the latter of January 1, 2019 or
Substantial Completion of the Tenant Improvements on the 5th Floor, provided
Landlord performs the Tenant Improvements on the 5th Floor and Tenant has
approved construction documents and the associated budget prior to September 1,
2018.  If Tenant is to perform the Tenant Improvements, 5th Floor Rent
Commencement shall be the earlier of January 1, 2019 or Completion of 5th Floor
Tenant Improvements.  Upon 5th Floor Occupancy, Tenant’s Annual Rent shall
increase by a multiple of two (2) (hereinafter called “5th Floor Rent
Commencement Date”).  Tenant shall be provided with possession of the Premises
on that date which is one hundred and twenty (120) days prior to January 1, 2019
to allow for Tenant to perform the Tenant Improvements.

5,172 RSF:Three (3) years and six (6) months from the Lease Commencement Date,
Tenant shall occupy per the terms of this Lease the remaining 5,172 rentable
square feet of the Premises and the Annual Rent shall increase to an amount
equal to the then per square foot rental rate multiplied by 5,172.  Tenant shall
not be responsible for any Operating Costs above the Base Year for 5,172
rentable square feet until Three (3) years and six (6) months from the Lease
Commencement Date.

Provided (i) the Lease Date is no later than November 10, 2016 (ii) prior to
July 1, 2017 Tenant selects Landlord to perform the 6th Floor Tenant
Improvements (iii) Tenant has approved construction drawings and the associated
budget for said improvements (iv) there are no delays caused by Tenant and (v)
excluding force majeure, in the event Substantial Completion of the 6th Floor
Improvements does not occur by February 1, 2018 (the “Outside Date”), then
Tenant shall be entitled to two (2) days of abatement of Annual Rent for each
and every day from and after the Outside Date until the actual date .   Provided
(i) the Lease Date is no later than November 10, 2016 (ii) prior to July 1, 2017
Tenant selects Landlord to perform the 6th Floor Tenant Improvements (iii)
Tenant has approved construction drawings and the associated budget for said
improvements (iv) there are no delays caused by Tenant and (v) excluding force
majeure, in the event Substantial Completion of the 6th Floor Improvements does
not occur within eighteen (18) months of the Lease Date, Tenant shall have the
option in Tenant’s sole discretion, to elect to terminate this Lease by
delivering written notice to Landlord within ten (10) days following the
expiration of such eighteen (18) month period.

 

 

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Tenant agrees to pay each installment of the Annual Rent promptly as and when
due without any setoff or deduction whatsoever.  Said installments of Annual
Rent shall be paid to: Valley Grove, LLC, c/o St. John Properties 2560 Lord
Baltimore Drive, Baltimore, Maryland 21244 or at such other place or to such
appointee of Landlord, as Landlord may from time to time designate in writing.

 

ADDITIONAL RENT

4.All sums of money other than Annual Rent required to be paid by Tenant to
Landlord pursuant to the terms of this Lease, unless otherwise specified herein,
shall be considered additional rent, (hereinafter referred to as “Additional
Rent”), and shall be collectible by Landlord as Additional Rent, in accordance
with the terms of this Lease.

 

RENTAL - ESCALATION

5.Beginning on the first Anniversary Date of the Lease Commencement Date and on
each Anniversary Date thereafter throughout the remainder of the Term, the then
Annual Rent shall increase by an amount equal to two and one-half percent (2.5%)
of the previous year’s Annual Rent, which sum shall be payable in equal monthly
installments in advance as hereinafter set forth.

 

ANNUAL OPERATING COST ADJUSTMENT

6.Tenant shall pay, as Additional Rent, Tenant’s Pro Rata Share of Landlord’s
annual operating costs in excess of those operating costs incurred by Landlord
in 2018 (the “Base Year”).  The real estate taxes shall be $1.80 per Rentable
Square Foot in the Base Year.  In the event the real estate taxes are greater
than $1.98 per Rentable Square Foot in calendar year 2019, the per Rentable
Square Foot real estate tax in 2019 shall become the Base Year real estate
tax.  If during any calendar year, including the Base Year, falling wholly or
partially within the Term, the Building is not at least ninety-five percent
(95%) occupied (calculated on a monthly basis), Landlord shall make an
appropriate adjustment of variable Operating Costs (including by way of example,
but without limitation, any property management fees) for such year to determine
the Operating Costs that would have been paid or incurred by Landlord had the
Building been at least ninety-five percent (95%) occupied for the entire
calendar year, and the amount so determined  shall be deemed to have been the
variable Operating Costs for such calendar year.

“Tenant’s Pro Rata Share” is thirty-four and thirty-six hundredths percent
(34.36%) based on the Leased Premises measuring 65,172 rentable square feet as
the numerator and 189,666. Tenant’s Pro Rate Share is subject to change due to a
subsequent increase or decrease of the rentable area of the Building or the
rentable area of the Premises.  Operating costs (hereinafter referred to as the
“Operating Costs”) are defined as follows:  all expenses paid or incurred by
Landlord in connection with the ownership, management, insurance, maintenance,
operation, and repair of the Building and

 

 

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the Property, the parking facilities, or if applicable any parking structure
provided by Landlord for tenants of the Building.  Landlord agrees to cap all
controllable Operating Costs at 5% per annum.

Operating Costs include but are not limited to:

a.all expenses paid or incurred by Landlord for heating, cooling, electricity,
water, gas, sewers, refuse collection, exterminating, telephone charges not
chargeable to tenants and similar utilities services; the cost of supplies,
janitorial and cleaning services; window washing; landscaping, snow removal;
management fees; accounting fees; insurance; security services;

b.the cost of compliance with any governmental rules, regulations, requirements
or orders;

c.real estate taxes, assessments and appeals;

d.cost of services of independent contractors; the cost of compensation
(including employment taxes and fringe benefits) of all persons who perform
duties in connection with such Operating Costs and any other expenses or charges
which, in accordance with generally accepted accounting and management
principles, would be considered an expense of owning, managing, insuring,
maintaining, operating, and repairing the Building and Property.

e.all costs of maintaining the certification of the Building to conform to the
U.S. Green Building Council’s Leadership in Energy and Environmental Design
(“LEED”) rating system.

 

Operating Costs shall not include any of the following (all of the following are
referred to as “Operating Cost Exclusions”):  (a) the cost of capital
improvements, (b) the cost of management office equipment and furnishings, (c)
depreciation on Landlord's original investment, (d) the cost of tenant
improvements, (e) real estate brokers' fees, commissions or other costs incurred
to procure tenants, (f) advertising of space for lease, (g) interest or
depreciation on capital investments, (h) the initial costs of constructing the
Building; (i) expenses for which Landlord is or will be reimbursed by another
source (excluding Tenant’s reimbursement for Operating Expenses and local, state
or federal reimbursements), including but not limited to repair or replacement
of any item covered by warranty; (j) costs incurred to benefit (or as a result
of) a specific tenant or items and services selectively supplied to any specific
tenant; (k) expenses for the defense of Landlord's title to the real property on
which the Premises are located; (l) depreciation and amortization of the
Building or financing costs, including interest and principal amortization of
debts; (m) charitable, lobbying, special interest or political contributions;
(n) costs of improving or renovating space for a tenant, or space vacated by a
tenant; (o) any amounts expended by Landlord to comply with any Environmental
Laws; (p) costs to correct original or latent defects in the design,
construction or equipment of the Building or other improvements; (q)  any
repair, rebuilding or other work necessitated by condemnation, fire, windstorm
or other insured casualty or hazard; (r) any expenses incurred: (i) to comply
with any governmental laws, regulations and rules or any court order, decree or
judgment including, without limitation, the Americans with Disabilities Act; or
(ii) as a result of Landlord's alleged violation of or failure to comply with
any

 

 

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governmental laws, regulations and rules or any court order, decree or judgment;
(s) rental on ground leases or other underlying leases; (t) attorneys' fees,
accounting fees and expenditures incurred in connection with disputes and claims
of other tenants or occupants of the Building or with other third parties except
as specifically provided in this Lease (excluding reasonable costs related to
contesting real property tax assessments for the Property); (u) cost of the
initial stock of tools and equipment for operation, repair and maintenance of
the Building; (v) any duplicate expenses or costs; (w) amounts billed (directly
or indirectly) for salaries (excluding property managers and building
engineers), overhead and expenses for office rent and office supplies, (x)
administrative or management fees (in the aggregate) which exceed  5% of the
gross rents for the Building; or (y) any benefit of any grant, tax credit, or
the like, relating to the initial capital investment by Landlord for the
Building to achieve LEED certification.  Landlord may, in a reasonable manner,
allocate insurance premiums for so-called “blanket” insurance policies, which
insure other properties as well as the Building, and said allocated amounts
shall be deemed to be Operating Costs.

Within one hundred twenty (120) days after the end of the calendar year Landlord
shall submit a Statement (hereinafter referred to as the “Operating Costs
Statement”) to Tenant setting forth the actual Operating Costs for the preceding
calendar year and any adjustments for overpayment or underpayment shall be made
between the parties within thirty (30) days thereafter.  

Each Operating Costs Statement provided by Landlord shall be conclusive and
binding upon Tenant unless within ninety (90) days after receipt thereof, Tenant
notifies Landlord that it disputes the correctness thereof, specifying those
respects in which it claims the Operating Costs Statement to be
incorrect.  Unless resolved by the parties (acting in good faith), such dispute
shall be determined by arbitration in accordance with the then prevailing rules
of the American Arbitration Association.  If the arbitration proceedings result
in a determination that the Operating Costs Statement contained an aggregate
discrepancy of less than five percent (5%), Tenant shall bear all costs in
connection with such arbitration.  If the arbitration proceedings result in a
determination that the Operating Costs Statement contained an aggregate
discrepancy of more than five percent (5%), Landlord shall bear all costs in
connection with such arbitration.  Pending determination of the dispute, Tenant
shall pay any costs due from Tenant in accordance with the Operating Costs
Statement, but such payment shall be without prejudice to Tenant’s claims.  

Tenant, for a period of ninety (90) days after delivery of the Operating Costs
Statement for each calendar year and upon at least ten (10) days written notice
to Landlord, shall have reasonable access during normal business hours to the
books and records of Landlord relating to Operating Costs, including the Base
Year, for the purpose of verifying the Operating Costs Statement, Tenant to bear
all of Tenant’s costs relating to such inspection.  In the event that there is
an overpayment by Tenant to the extent of five percent (5%) or more Landlord
shall pay for the reasonable cost of an audit, which

 

 

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cost shall not exceed the cost of the overcharge.  If an overpayment has been
made by Tenant, same shall be credited against future Rent or refunded within
thirty (30) days, to Tenant at its choice.

During the Lease Term, Tenant’s Pro Rata Share of Controllable Operating Costs
(defined below) shall not increase by more than five percent (5%) per calendar
year on a cumulative basis.  “Controllable Operating Expenses” are defined as
any and all expenses that Landlord has the ability to control, including but not
limited to wages, salaries and other benefits paid to Landlord’s employees
engaged in the operation, management or security of the Building, the management
fee, and any rental paid for any management office in the Building, but
specifically excluding the following expenses: Taxes, utilities, insurance, and
snow removal.

 

USE

7.Tenant shall use and occupy the Leased Premises solely for the following
purpose: general office for a software company and uses incidental
thereto.  Landlord shall provide Tenant with not less than 5.5 parking spaces
per 1,000 square feet of rentable area in the Premises

 

MUNICIPAL REGULATIONS

8.Tenant shall observe and comply with and execute at its expense (except as
otherwise specifically set forth in this Lease), all laws, orders, rules,
requirements, and regulations of the United States, State, City or County of the
said State, in which the Leased Premises are located, and of any and all
governmental authorities or agencies and of any board of the fire underwriters
or other similar organization, respecting the Leased Premises and the manner in
which said Leased Premises are or should be used by Tenant.

Construction and interpretation of this Lease shall be governed by the laws of
the State of Utah, excluding any principles of conflicts of laws.  Tenant hereby
consents to the jurisdiction and venue of the Courts of the State of Utah and to
the jurisdiction and venue of any United States District Court in the State of
Utah.

 

ASSIGNMENT AND SUBLET

9.Tenant shall not assign this Lease, in whole or in part, or sublet the Leased
Premises, or any part or portion thereof, without the prior written consent of
Landlord, and said consent shall not be unreasonably withheld, conditioned or
delayed.  If Landlord consents to such assignment or subletting, Tenant shall
not be relieved from any liability whatsoever under this Lease.  Landlord shall
be entitled to fifty percent (50%) of any additional considerations over and
above those stated in this Lease, which are obtained in or for the sublease
and/or assignment.  Landlord may assess processing fees that shall be paid by
Tenant as Additional Rent.  Such fees shall not exceed $1,000.00.

 

 

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Notwithstanding any other provisions of this section 9, Tenant may assign or
sublet the Leased Premises without Landlord’s consent, after written notice to
Landlord, to any entity which controls, is controlled by or is under common
control with Tenant, or the successor (including the surviving company of any
consolidation or merger with Tenant) or assignee of all or substantially all the
assets of the Tenant; provided, that Tenant remains liable for all Lease
obligations (the “Permitted Assignments”).

No Renewal Options, Signage Rights, Rights of First Offer, Termination Options
and/or Generator Rights can be assigned or transferred by Tenant to an assignee
or subtenant, except in connection with Permitted Assignments.

 

INSURANCE

10. a.  TENANT’S INSURANCE

Throughout the term of this Lease, Tenant shall obtain and maintain:

 

1.Business Personal Property, including Tenant’s Improvements and Betterments,
insurance covering Special Causes of Loss.  Such Business Personal Property
insurance shall not be in an amount less than that required to replace all
alterations (whether made by Landlord, Tenant or any previous tenant and
irrespective of who paid for such alterations), Tenant’s trade fixtures,
decorations, furnishings, equipment and personal property and in an amount
required to avoid the application of any coinsurance provision.  Such Business
Personal Property insurance shall contain a Replacement Cost valuation
provision.

2.Business Income insurance covering Special Causes of Loss.  Such Business
Income insurance shall be in minimum amounts typically carried by prudent
businesses engaged in similar operations.

3.Commercial General Liability insurance (written on an occurrence basis)
including Contractual Liability coverage, Premises and Operations coverage,
Personal Injury Liability coverage, Independent Contractor’s Liability coverage.
Such Commercial General Liability insurance shall be in minimum amounts
typically carried by prudent businesses engaged in similar operations, but in no
event shall be in an amount less than Two Million Dollars ($2,000,000) per
occurrence with a Three Million Dollar ($3,000,000) annual aggregate.  Such
limits may be achieved through a combination of primary General Liability policy
and excess liability policy limits.  If Tenant conducts operations at locations
and/or projects other than the Premises, such annual aggregate limit will be
expressed on a “per location” and/or “per project” basis, as the case may
be.  Such Commercial General Liability insurance shall be primary to – and
non-contributory with – any similar insurance carried by Landlord.

4.Workers’ Compensation insurance including Employer’s Liability insurance. Such
Workers’ Compensation insurance shall be for the statutory benefits which may,
from time to time

 

 

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throughout the term of this Lease, become payable in the jurisdiction in which
the Premises are located.  Such Workers’ Compensation insurance will include a
Waiver of Subrogation in favor of Landlord.  

All such insurance shall: (1) be issued by a company that has a rating equal to
or exceeding A: XI from A.M. Best Company; (2) (except for Workers’ Compensation
and Employer’s Liability) name Valley Grove, LLC its respective officers,
partners, employees, agents, representatives and the holder of any Mortgage as
Additional Insureds with regard to the General Liability, and as Loss Payee
relative Business Income and Tenants Improvements & Betterments coverage; (3)
contain an endorsement to provide Landlord thirty (30) days’ prior written
notice (pursuant to Section 24) of cancellation to the Named Insured (except no
less than ten [10] days’ notice of cancellation for non-payment of premium).  

No such Commercial General Liability, Workers’ Compensation or Employer’s
Liability insurance shall contain a self-insured retention provision except as
otherwise approved in writing by Landlord, which approval shall not be
unreasonably withheld.  Landlord reserves the right from time to time to require
Tenant to obtain higher minimum amounts or different types of insurance if it
becomes customary and reasonable for other landlords of similar buildings as
that which contains the Premises to require similar-sized tenants in similar
industries to carry insurance of such higher minimum amounts or of different
types so long as such higher amounts are available and reasonable cost to the
Tenant.  At the commencement of this Lease, Tenant shall deliver a certificate
of all required insurance and will continue throughout the term of this Lease to
do so in a timely manner upon renewal of any required policy insurance.  Neither
the issuance of any insurance policy required under this Lease nor the minimum
limits specified herein shall be deemed to limit or restrict in any way Tenant’s
liability arising under or out of this Lease.

 

b.  LANDLORD’S INSURANCE

Throughout the term of this Lease, Landlord shall obtain and maintain:

1.Real Property insurance against Special Causes of Loss and subject to
Replacement Cost valuation covering the Building and all of Landlord’s property
therein in an amount required by its insurance company to avoid the application
of any coinsurance provision.  

2.Commercial General Liability insurance (written on an occurrence basis)
including Contractual Liability coverage insuring the obligations assumed by
Landlord under this Lease, Premises and Operations coverage, Personal Injury
Liability coverage, Independent Contractor’s Liability coverage.  Such
Commercial General Liability insurance shall be in amounts not less than Two
Million Dollars ($2,000,000) combined single limit per occurrence with a Four
Million Dollar ($4,000,000) annual aggregate.  

Notwithstanding any other provision contained in this Lease, each of the parties
hereby waives any rights it may have against the other party on account of any
injury to persons or loss

 

 

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or damage to its property (including the Premises and its contents and property
on other portions of the Property or Building) which arises from any risk
generally covered by the insurance required to be carried hereunder, whether or
not such other party may have been negligent or at fault in causing such loss or
damage.  Each of the parties shall obtain a clause or endorsement in the
policies of such insurance which each party obtains in connection with the
Premises, Building or Property to the effect that the insurer waives, or shall
otherwise be denied, the right of subrogation against the other party for loss
covered by such insurance.  

 

ALTERATIONS

11.a.       Tenant shall make no alterations, installations, additions or
improvements (herein collectively referred to as “Alterations”) in or to the
Leased Premises without the Landlord’s prior written consent, which consent
shall not be unreasonably withheld, conditioned or delayed and then only by
contractors or mechanics reasonably approved by Landlord, and at such times and
in such manner as Landlord may from time to time reasonably designate.  

b.If Tenant shall desire to make any Alterations, plans for the same shall first
be issued to Landlord, and the Alterations shall be constructed by Landlord’s
contractors or mechanics or by Tenant’s contractor or mechanic if reasonably
approved by Landlord, at Tenant’s expense. If Alternations are performed by
Landlord’s contractor or mechanic the cost of said Alterations shall be due and
payable to Landlord as Additional Rent.  In the event that a building permit is
required, Landlord shall have the first option to submit the permit application
on behalf of the Tenant.  Any permit cost shall be at Tenant’s expense.  Such
Alterations shall become the property of Landlord as soon as they are affixed to
the Leased Premises and all rights, title and interest therein of Tenant shall
immediately cease, unless otherwise agreed to in writing.  

 

REPAIRS AND MAINTENANCE

12. a.       Tenant shall maintain the interior of the Leased Premises in good
order and condition, ordinary wear and tear excepted.  Landlord shall maintain,
in a manner commensurate with other Class A office buildings located in the
area, the interior common areas of the Building, the roof and the exterior of
the Building, as well as the structure thereof, common areas, parking areas,
landscaping and the Property, in good order and repair, reasonable wear and tear
excepted.

b.Tenant shall, at the expiration of the Term or at the sooner termination
thereof by forfeiture or otherwise, deliver-up the Leased Premises in good order
and condition with reasonable wear and tear expected.  Tenant has no obligation
to restore the same to the original condition.

 

 

 

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SERVICES

13.  a.       Landlord shall furnish the Leased Premises with electricity
suitable for Tenant’s intended use as general office space, heating and air
conditioning for the comfortable use and occupancy of the Leased Premises
between 7:00 A.M. and 6:00 P.M., Monday through Friday and on Saturdays, 9:00
A.M. through 1:00 P.M. (hereinafter called "Normal Business Hours") of each week
during the Term (legal holidays excepted), janitorial service and trash removal,
Monday through Friday of each week during the Term (legal holidays excepted),
all at Landlord's expense.

If Tenant shall require electrical current or install electrical equipment
including but not limited to, electrical heating, additional or supplemental air
conditioning equipment, or machines or equipment using current in excess of 110
volts, which will in any way increase the amount of the electricity usually
furnished for use as general office space, Tenant shall be required to obtain
Landlord’s written approval, and Tenant agrees to pay periodically for the
additional direct expense to Landlord resulting from the same including expenses
resulting from any such installation of equipment as Additional Rent.  Providing
Heating, Ventilating and Air Conditioning (“HVAC”) service beyond the Normal
Business Hours will be billed directly to Tenant as Additional Rent, on a per
HVAC unit, per hour basis.  To contract for additional HVAC service, Tenant must
contact Landlord at least twenty-four (24) hours prior to the time period Tenant
requires additional HVAC services and in the event Tenant requires HVAC service
on Sunday, Tenant must contact Landlord prior to Noon on the Friday previous to
the Sunday requirement.   Tenant shall pay Landlord as Additional Rent
$50/hour/floor for additional HVAC services, subject to change, however never to
exceed Landlord’s actual costs.

b.Landlord shall furnish, supply and maintain any Building common area hallways,
stairways, lobbies, elevators, restroom facilities and maintain the grounds,
parking facilities and other common areas of the Property in a good condition
commensurate with other first-class office buildings located in the general
area, all at Landlord's expense except as may be otherwise provided in this
Lease.

c.  Landlord shall provide necessary passenger elevator service 24 hours per
day, 7 days per week, however, for the security of Tenant and other building
occupants, elevator service will only be functional after Normal Business Hours
by using secure key faub/card access.  Tenant shall obtain Landlord’s written
consent prior to using the elevators for any use other than passenger
service.  Landlord reserves the right to exclude any other use of the elevators
during Normal Business Hours of the Building.

d.Landlord shall have no liability or responsibility to supply heat, air
conditioning, elevator, plumbing, cleaning, and/or electric service, when
prevented from so doing by laws, orders or regulations of any Federal, State,
County or Municipal authority or by strikes, accidents, or by any other cause
whatsoever, beyond Landlord's control.

 

 

 

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DEFAULT

14.  In the event Tenant shall fail to pay any installment of Annual Rent,
Additional Rent or any other sum required by the terms of this Lease to be paid
by Tenant, and such failure shall continue for five (5) days after Landlord has
given written notice thereof to Tenant or, in the event Tenant shall fail to
comply with any provisions, covenants or conditions of this Lease, on its part
to be kept and performed, and such default shall continue for a period of ten
(10) days after Landlord has given written notice thereof to Tenant, or, if such
failure cannot reasonably be cured within such ten (10) days, if Tenant fails to
commence the cure within ten (10) days or thereafter fails to diligently
prosecute such cure to completion, then, upon the happening of any such event,
and in addition to any and all other remedies that may thereby accrue to
Landlord, Landlord may exercise the rights set forth in Subsections A and B,
below.  Notwithstanding any provision to the contrary contained herein: (i)
Landlord shall not be required to provide written notice to Tenant of Tenant’s
failure to comply with the terms and conditions of this Lease, monetary or
otherwise, more than twice in any twelve (12) month period, and (ii) with
respect to the first monetary or non-monetary default in any five (5) year
period, Tenant shall have thirty (30) days to cure any monetary or non-monetary
default after Tenant’s receipt of Landlord’s written notice of default, rather
than the 5 and 10 day periods referenced above, and with respect to the second
monetary default in any five (5) year period, Tenant shall have ten (10) days to
cure, rather than the 5 day period referenced above.

 

A.

Landlord’s Election to Retake Possession Without Termination of Lease

Landlord may retake possession of the Premises and shall have the right, but not
the obligation, without being deemed to have accepted a surrender thereof, and
without terminating this Lease, to relet the same for the remainder of the Term
upon terms and conditions satisfactory to Landlord; and if the rent received
from such reletting does not at least equal the Annual Rent and other sums
payable by Tenant hereunder, Tenant shall pay and satisfy the deficiency between
the amount of Annual Rent and other sums so provided in this Lease and the
Annual Rent received through reletting the Premises; and, in addition, Tenant
shall pay any and all expenses reasonably incurred by Landlord in connection
with any such reletting, including, but not limited to, the cost of renovating,
altering, and decorating for any occupant, leasing commissions paid to any real
estate broker or agent, and reasonable attorneys’ fees.

 

B.

Landlord’s Election to Terminate Lease

Landlord may terminate this Lease and forthwith repossess the Premises and be
entitled to recover as damages a sum of money equal to the total of the
following amounts:

 

1)

any then-due but unpaid rent or any other then-due but unpaid monetary
obligation of Tenant to Landlord under this Lease, Landlord shall use best
efforts to mitigate Landlord’s damages and to re-let the Premises;

 

 

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A.

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 Base Rent, Additional Rent or
other amounts then due under this Lease. Tenant shall pay any such deficiency to
Landlord.  

 

2)

any unamortized tenant improvement costs and broker commissions incurred by
Landlord as of the date of Landlord’s re-entry;

 

3)

damages for the wrongful withholding of the Premises by Tenant, in the event
Tenant wrongfully withholds the Premises;

 

4)

all legal expenses, including reasonable attorneys’ fees, expert and witness
fees, court costs and other costs incurred by Landlord in properly exercising
its rights under this Lease;

 

5)

all reasonable costs incurred in recovering the Premises, restoring the Premises
to good order and condition, and all commissions incurred by Landlord in
reletting the Premises; and

 

6)

any other reasonable amount necessary to compensate Landlord for all detriment
caused by Tenant’s default.

 

Payment of the proceeding sums of monies shall be due and payable upon ruling of
a court of competent jurisdiction in the state of Utah.

 

DAMAGE

15.  In the case of the total destruction of said Leased Premises by fire, other
casualties, the elements, or other cause, or of such damage thereto as shall
render the same totally unfit for occupancy by Tenant for more than six (6)
months, this Lease, upon surrender and delivery to Landlord of the said Leased
Premises, together with the payment of the Annual Rent to the date of such
occurrence and a proportionate part thereof to the date of surrender, shall
terminate and be at an end.  If the Leased Premises are rendered partly
untenantable by any cause mentioned in the preceding sentence, Landlord shall,
at its own expense, restore said Leased Premises with reasonable diligence, and
the rent shall be abated proportionately for the period of said partial
untenantability and until the Leased Premises shall have been fully restored by
Landlord.

 

BANKRUPTCY

16.  In the event of the appointment of a receiver or trustee for Tenant by any
Federal or State court, in any legal proceedings under any provision of the
Bankruptcy Act; if the appointment of such

 

 

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receiver or such trustee is not vacated within sixty (60) days, or if said
Tenant be adjudicated bankrupt or insolvent, or shall make an assignment for the
benefit of its creditors, then and in any of said events, Landlord may, at its
option, terminate this tenancy by ten (10) days written notice, and re-enter
upon said Leased Premises.

 

POSSESSION

17.  Landlord covenants and agrees that possession of said Leased Premises shall
be given to Tenant as soon as said Leased Premises are ready for possession.  In
case possession, in whole or in part, cannot be given to Tenant on or before the
Lease Commencement Date, Landlord agrees to abate the Annual Rent
proportionately until possession is given to said Tenant, and Tenant agrees to
accept such pro rata abatement as liquidated damages for the failure to obtain
possession, in addition to the abatement set forth in Section 3.

 

SIGNS

18. Signage criteria for the Building has been established by Landlord and all
such information for Tenant’s suite sign (if applicable) and directory
information shall be submitted to Landlord for Landlord’s approval.  

Provided Tenant is leasing two (2) full floors in the Building (or equivalent
square footage on multiple floors), Tenant shall have non-exclusive Building
crown signage rights to one (1) sign on the Building’s parapet facing Interstate
15.  Tenant shall have rights to monument signage and signage for the lobby
directory, and “Coming Soon” signage.  All signage will be at Tenant’s cost and
subject to Landlord’s prior reasonable approval regarding plans and
specifications.    

 

LIABILITY

19.  Landlord shall not be liable to Tenant for any loss, damage or injury to
Tenant or to any other person, or for any loss or damage to the property of
Tenant or of any other person, unless such loss, damage or injury shall be
caused by or result from a negligent act or omission solely on the part of
Landlord or any of its agents, servants, or employees.  Tenant shall, and does
hereby indemnify and hold harmless Landlord and any other parties in interest
from and against any and all liabilities, fines, claims, damages and actions,
costs and expenses of any kind or nature (including attorneys’ fees) and of
anyone whatsoever (i) relating to or arising from the use and occupancy of the
Leased Premises; (ii) due to or arising out of any mechanic’s lien filed against
the Building, or any part thereof, for labor performed or for materials
furnished or claimed to be furnished to Tenant, or (iii) due to or arising out
of any breach, violation or nonperformance of any covenant, condition or
agreement in this Lease set forth and contained on the part of Tenant to be
fulfilled, kept, observed or performed.

 

 

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Tenant shall not be liable to Landlord for any loss, damage or injury to
Landlord or to any other person, or for any loss or damage to the property of
Landlord or of any other person, unless such loss, damage or injury shall be
caused by or result from a negligent act or omission solely on the part of
Tenant or any of its agents, servants, or employees.  Landlord shall, and does
hereby indemnify and hold harmless Tenant and any other parties in interest from
and against any and all liabilities, fines, claims, damages and actions, costs
and expenses of any kind or nature (including attorneys’ fees) and of anyone
whatsoever due to or arising out of any breach, violation or nonperformance of
any covenant, condition or agreement in this Lease set forth and contained on
the part of Landlord to be fulfilled, kept, observed or performed.

In the event Landlord provides any security services as described in Section 6a,
Landlord is hereby released from any responsibility for any damages either to
person or property sustained by Tenant incurred in connection with or arising
from acts or omissions of any security services provided by Landlord.

Notwithstanding any term or provision of this Section 19 or any other provisions
of this Lease to the contrary, in no event shall Tenant have any liability or
obligations of any kind or type whatsoever until Warm Shell Condition has been
met.  

 

RIGHT OF ENTRY

20. Upon not less than twenty-four (24) hours prior written notice to Tenant
(except in the event of an emergency, in which case notice shall be provided as
soon as possible under the circumstances) Landlord, and its agents, servants,
and employees, including any builder or contractor employed by Landlord, shall
have, and Tenant hereby gives them the absolute, and unconditional right,
license and permission, at any and all reasonable times, and for any reasonable
purpose whatsoever, to enter through, across or upon the Leased Premises or any
part thereof, and, at the option of Landlord, to make such reasonable repairs to
or changes in said Leased Premises as Landlord may deem necessary or proper.
Tenant agrees Landlord and its agents and assigns have the unconditional right
to show the Premises for lease at any time, without notice once Tenant notifies
Landlord of its intention to vacate the Premises.

 

EXPIRATION

21.  It is agreed that the Term expires on the Lease Termination Date without
the necessity of any notice by or to any of the parties hereto.  If Tenant shall
occupy said Leased Premises after such expiration, it is understood that, in the
absence of any written agreement to the contrary, said Tenant shall hold the
Leased Premises as a "Tenant from month to month", subject to all the other
terms and conditions of this Lease, by paying an escalated payment equal to two
(2) months rent and thereafter a monthly rent equal to one hundred and fifty
percent (150%) of the monthly rent owed in the last month

 

 

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of the Term; provided that Landlord shall, upon such expiration, be entitled to
the benefit of all public general or public local laws relating to the speedy
recovery of the possession of land and tenements held over by Tenant that may be
now in force or may hereafter be enacted including but not limited to the
recovery of consequential damages (provided that consequential damages shall not
be recoverable unless Tenant fails to vacate within thirty (30) days following
Tenant’s receipt of written notice from Landlord instructing Tenant to vacate
the Premises.

Prior to expiration, Tenant agrees to schedule an inspection with Landlord to
confirm that the Leased Premises will be in proper order at expiration.

 

CONDEMNATION

22.  It is agreed in the event that condemnation proceedings are instituted
against the Leased Premises and title taken by any Federal, State, Municipal or
other body, then this Lease shall become null and void at the date of settlement
of condemnation proceedings and Tenant shall not be entitled to recover any part
of the award which may be received by Landlord.

 

SUBORDINATION

23.  It is agreed that Landlord shall have the right to place a mortgage or any
form of mortgages on the Leased Premises and this Lease shall be subordinate to
any such mortgage or mortgages, whether presently existing or hereafter placed
on the Leased Premises, and Tenant agrees to execute any and all documents
assisting the effectuating of said subordination.  Furthermore, if any person or
entity shall succeed to all or part of Landlord's interest in the Leased
Premises, whether by purchase, foreclosure, deed in lieu of foreclosure, power
of sale, termination of Lease, or otherwise, Tenant shall automatically attorn
to such successor in interest, which attornment shall be self-operative and
effective upon the signing of this Lease, and shall execute such other agreement
in confirmation of such attornment as such successor in interest shall
reasonably request.

Landlord shall obtain a non-disturbance agreement from its current lender and
from future lenders that require subordination, which shall not allow for the
early termination or any modification of the Lease and its various extensions
and options.

 

NOTICES

24.  Any written notice required by this Lease shall be deemed sufficiently
given, if hand delivered, or sent via first class mail, certified mail or by
overnight courier service.

 

Any notice required by this Lease is to be sent to Landlord at:

Valley Grove, LLC, c/o

St. John Properties Utah

Daniel Thomas

 

 

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Regional Partner  

299 South Main Street, Suite 1300

Salt Lake City, Utah 84062

 

Any notice required by this Lease is to be sent to Tenant at:

Instructure, Inc.

6330 South, 3000 East, Suite 700

Salt Lake City, Utah 84121

Attn:  Legal Department

 

In the event of an emergency only, Tenant’s notice address shall be:

Jeff Weber

Senior Vice President, Human Resources

6330 South, 3000 East, Suite 700

Salt Lake City, Utah 84121

801-869-5299

jeff.w@instructure.com

 

REMEDIES NOT EXCLUSIVE

25.  No remedy conferred upon Landlord shall be considered exclusive of any
other remedy, but shall be in addition to every other remedy available to
Landlord under this Lease or as a matter of law.  Every remedy available to
Landlord may be exercised concurrently or from time to time, as often as the
occasion may arise.  Tenant hereby waives any and all rights which it may have
to request a jury trial in any proceeding at law or in equity in any court of
competent jurisdiction.

 

WAIVERS

26.  It is understood and agreed that nothing shall be construed to be a waiver
of any of the terms, covenants and conditions herein contained, unless the same
be in writing, signed by the party to be charged with such waiver, and no waiver
of the breach of any covenant shall be construed as the waiver or the covenant
of any subsequent breach thereof.

 

PERFORMANCE

27.  It is agreed that the failure of Landlord to insist in any one or more
instances upon a strict performance of any covenant of this Lease or to exercise
any right herein contained shall not be construed as a waiver or relinquishment
for the future of such covenant or right, but the same shall remain in full
force and effect, unless contrary is expressed in writing by Landlord.

 

SECURITY DEPOSIT AND FINANCIAL STATEMENTS

28.  A security deposit has been received, attached as Exhibit C, in the amount
of $290,558.00 and will subject to all the conditions of the Security Deposit
Agreement attached.  Landlord and Tenant agree Landlord shall not be required to
incur any cost associated with their obligations under this Lease

 

 

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until said Security Deposit is received.  The Security Deposit may only be
applied to cure defaults by Tenant, or used to repair property damage to the
Building caused by Tenant beyond reasonable wear and tear. Additional terms and
conditions associated with the security deposit are set forth in the Security
Deposit Agreement.

Landlord shall have the right to require annual financial statements of Tenant.
Tenant shall provide written answers to any questions from Landlord which are
related to Tenant’s financial statements or provide written projections on
Tenant’s business, if the financials are unacceptable to Landlord; provided,
however, Landlord shall first execute and deliver Tenant’s standard form
non-disclosure agreement.

 

AGREEMENT CONTENTS

29. This Lease contains the final and entire agreement between the parties
hereto, and neither they nor their agents shall be bound by any terms,
conditions or representations not herein written.

 

LEGAL EXPENSE

30.  In the event, to enforce the terms of this Lease, either party files legal
action against the other, and is successful in said action, the losing party
agrees to pay all reasonable expenses to the prevailing party, including the
reasonable attorneys’ fee incident to said legal action.  In the event that
Landlord is successful in any legal action filed against Tenant, Landlord’s
expenses incident to said legal action shall be due as Additional Rent within
thirty (30) days of invoice.

 

RELOCATION

31.  INTENTIONAL DELETED

 

LATE CHARGE

32.  If Tenant shall fail to pay within ten (10) days of the date when due, the
Annual Rent, Additional Rent or any other sum required by the terms of this
Lease to be paid by Tenant, then, upon the happening of any such event, and in
addition to any and all other remedies that may thereby accrue to Landlord,
Tenant agrees to pay to Landlord a late charge of five percent (5%) of the past
due amount.  The late charge on the Annual Rent accrues after ten (10) days of
the due date and said late charge shall become part of and in addition to the
then due monthly rental.  In the event Tenant's rent is received fifteen (15)
days after due date, Landlord shall have the option to require the rental
payment be made with a certified or cashier’s check.

 

 

 

 

 

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DOCUMENT EXECUTION

33. Tenant agrees to execute any and all reasonable documents required of Tenant
by the mortgage holder of the Leased Premises during the Term of this Lease.

 

LEASEHOLD IMPROVEMENTS

34. Tenant shall be granted a “not to exceed” Improvement Allowance of $50.00
per usable square foot, estimated to be $3,018,400.00 (hereinafter called
“Improvement Allowance”.  All improvements, other than installation of Tenant’s
telephone and computer wiring and equipment installation will be performed by
the Landlord or the Landlord’s contractor, and will be subject to a prior
written approval by the Tenant for the cost estimate of the agreed upon
improvements.  Any costs over $50.00 per square foot shall be borne by the
Tenant and payable to the Landlord prior to occupancy as additional rent.  The
Improvement Allowance can be used for Tenant’s hard and soft non-structural
project costs including, but not limited to, construction, telephone and data
cabling, permits and approvals, engineering, architectural and design, exterior
building sign and Tenant’s backup generator.  In the event Tenant does not
utilize the entire Improvements Allowance, any unused portion shall be credited
to Tenant in the form of free rent at the beginning of the Term.  Tenant shall
have the right to contract with its own vendors to prepare Tenant’s designs and
also contract for moving services.  

There shall be no Building construction management fee or supervision fee
charged to Tenant or deducted from the Improvement Allowance.  Additionally,
there shall be no charges for the use of any freight elevator service either
during construction, move in, or move out or any requirement the Building may
have to have a Building engineer present during any construction
activities.  There are no limitations on use of the freight elevator.

All the following shall be provided by Landlord at Landlord’s sole cost
(hereinafter called “Warm Shell Condition”) (the cost of such items are not to
be included in the Improvement Allowance, with the exception of the cost of the
test fit if Tenant’s architect performs the test fit, as more particularly set
forth below).

 

•

All common areas in the Building including men’s and women’s restrooms,
elevators (including call buttons), first floor lobby, electrical room,
telephone room, mechanical rooms, janitorial closets, building fire stairwell,
etc.  Said improvements shall comply with all applicable codes, ordinances, and
laws including ADA and Title 24 for standard office occupancy.

 

•

Building fire protection alarm & communication system shall be installed to
building code.

 

•

Any Building related life safety, life support systems and security systems as
may be required by building code.

 

•

Landlord warrants that all Building systems, including but not limited to the
HVAC and electrical serving the Premises are in good working order as of the
Lease Commencement Date, free of all hazardous materials.

 

 

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•

Fire sprinkler risers and mains.

 

•

A smooth and level floor finish suitable for the install of a finished floor
material on top of such as carpet, stone, vinyl flooring, etc.

 

•

Landlord shall provide a test fit.  In the event Tenant desires to use Tenant’s
architect for a test fit, Landlord agrees to pay Tenant’s architect $0.12/USF
for the test fit (which amount shall be included in the Improvement Allowance).

 

•

Tenant may select the data/telecommunication provider of Tenant’s
choice.  Landlord shall provide conduit from the public utility easement to the
Building and Tenant’s data/telecommunication provider will have free access to
such conduit.

 

•

Landlord shall provide a fitness facility and mens’ and womens’ shower/locker
facilities on the first floor of the Building as part of the common area for
Tenants’ use and enjoyment which associated improvement and capital improvement
costs shall not be included in Operating Costs.

 

•

Upon the Lease Commencement Date, the Premises, shall, at Landlord’s sole cost
and expense (not to be passed through to Tenant as an Operating Cost), comply
with all Code Requirements, including, but not limited to: Building Codes, Fire
Codes and the American’s with Disabilities Act.

 

•

The Building, including, but not limited to: the structure, land, parking lot,
common areas, washrooms (including washrooms within the Premises), and walkways,
shall, at Landlord’s sole cost and expense (not to be passed through to Tenant
as an Operating Cost), comply with all Code Requirements throughout the Lease
Term and any Renewal Options.

 

QUIET ENJOYMENT

35. Tenant, upon paying the Annual Rent on a monthly basis, Additional Rent and
other charges herein provided and observing and keeping all of its covenants,
agreements, and conditions in this Lease, shall quietly have and enjoy the
Leased Premises during the Term without hindrance or molestation by anyone
claiming by or through Landlord: subject, however, to all exceptions,
reservations and conditions of this Lease.

 

ESTOPPEL CERTIFICATE

36. Tenant shall, at any time during the Term, within ten (10) business days
following request of Landlord, execute, acknowledge, and deliver to Landlord or
its designee, a statement in writing, certifying that this Lease is unmodified
and in full force and effect if such is the fact that the same is in full force.

 

 

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ENVIRONMENTAL REQUIREMENTS

37. From and after Tenant takes occupancy of the Premises, unless the same are
placed by Landlord or Landlord’s contractors, employees or agents, Tenant hereby
covenants and agrees that if at any time it is determined that there are
materials placed on the Leased Premises which, under any environmental
requirements require special handling in collection, storage, treatment, or
disposal, Tenant shall, within thirty (30) days after written notice thereof,
take or cause to be taken, at its sole expense, such actions as may be necessary
to comply with all environmental requirements.   If Tenant shall fail to take
such action, Landlord may make advances or payments towards performance or
satisfaction of the same but shall be under no obligation to do so; and all sums
so advanced or paid, including all sums advanced or paid in connection with any
judicial or administrative investigation or proceeding relating thereto,
including, without limitation, reasonable attorney’s fees, fines, or other
penalty payments, shall be at once repayable by Tenant as Additional Rent and
shall bear interest at the rate of four percent (4%) per annum above the Prime
Rate from time to time as published by the  Wall Street Journal, from the date
the same shall become due and payable until the date paid.  Failure of Tenant to
comply with all environmental requirements shall constitute and be a default
under this Lease; provided, however, Landlord represents and warrants that on
the Lease Commencement Date, the Property, Building and Premises shall be free
of all hazardous materials and shall comply with all environmental laws and
shall defend, indemnify and hold Tenant harmless for any costs or damages
associated with a breach of such warranty and representation.

 

 

 

GREEN BUILDING

38.  The core and shell of the building is intended to be a “green building” and
may become in the future certified as such under the U.S. Green Building
Council’s LEED for Core and Shell standard.  Landlord represents that the
Building will be LEED designed and that Landlord will use their best efforts to
obtain a LEED Certification.

In connection with Landlord’s seeking of certification of the building under the
LEED for Existing Building: Operations and Management (“LEED EB: O&M”) standard,
or an equivalent third party certification, Tenant will cooperate, join in
developing a plan for, and modify its operations such that the Building can
achieve and maintain a LEED EB: O&M Gold level certification; which plan will be
appended to and become part of the Rules and Regulations.

 

 

 

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EXCULPATION CLAUSE

39. Neither Landlord nor any principal, partner, member, officer, director,
trustee or affiliate of Landlord (collectively, “Landlord Affiliates”) shall
have any personal liability under any provision of this Lease.

 

CORPORATE TENANTS

40. In the event Tenant is a corporation, the persons executing this Lease on
behalf of Tenant hereby covenant and warrant that: i) Tenant is a duly
constituted corporation qualified to do business in Maryland; ii) all Tenants
franchises and corporate taxes have been paid to date; and such person(s) that
is (are) executing this Lease are duly authorized by the Board of Directors of
such corporation to execute and deliver this Lease on behalf of the corporation.

 

RULES AND REGULATIONS

41. Tenant agrees to be bound by the Rules and Regulations as set forth on the
schedule attached hereto and labeled Exhibit "A" and made a part
hereof.  Landlord shall have the right, from time to time, to issue additional
or amended Rules and Regulations regarding the use of the Building and
Property.  Tenant covenants that said additional or amended Rules and
Regulations shall likewise be faithfully observed by Tenant, the employees of
Tenant and all persons invited by Tenant into the Building.

 

WINDOW COVERINGS

42.  Tenant shall not install any window covering other than those installed
with Tenant’s initial improvements unless approved in writing by
Landlord.  Tenant’s Design Representative will coordinate with Landlord to
select a building standard window covering.

 

GENERATOR

43.  Subject to Landlord’s approval, and at Tenant’s sole cost and expense,
Tenant shall be permitted to install a back-up generator in a location provided
by Landlord.  At Landlord’s cost, Landlord shall provide a location for a
generator.  Landlord shall also provide conduit from that location to
demarcation location within the building and conduit from that demarcation
location to all floors of the Building.  Tenant will indemnify and hold Landlord
harmless for any damages that are caused by the installation and operation of
the generator, including costs of repair, loss of rental income and any other
consequential damage that may arise, and for any damages that Landlord is
required to pay or for which it may be deemed liable to any other tenants as a
result of any damages or losses suffered by those tenants that are caused
directly or indirectly by the installation and operation of the generator.

 

 

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The installation of a generator shall be considered and Alteration and be
subject to Section 11 of this Lease.  Landlord reserves the right to have Tenant
remove the generator at the end of the Lease Term, at Tenant’s sole cost and
expense.

 

RIGHT OF FIRST OFFER

44.Tenant shall have the Right of First Offer on all available space in the
Building when it becomes available.  Once notified by Landlord, Tenant shall
have ten (10) business days in which to notify Landlord of its intentions to
lease the available space. If the Tenant does not exercise its Right of First
Offer as herein prescribed, it shall be extinguished and of no further force or
effect.  

 

EXPANSION OPTION

45.  Provided Tenant is not in default under this Lease, and in the event Tenant
requires to increase its leased square footage by more than fifty percent (50%),
Tenant may lease a larger space in any available space in a planned building of
comparable location and class controlled by Landlord.

Landlord and Tenant shall then execute a new lease for a new term of ten (10)
years for the larger space and this Lease will terminate in conjunction with the
commencement of the new lease.  The terms of the new lease will be at the then
market conditions (including but not limited to base rental rate, escalations
and tenant concession packages).

 

RENEWAL OPTION

46.  Provided Tenant is not then in default hereunder beyond any applicable
notice and cure period provided herein, Tenant shall have the option to renew
(the “Renewal Option”) the initial Term of this Lease for one (1) further
successive period of five (5) years (hereinafter called “Renewal Term”), by
notifying Landlord in writing of its intention to do so (the “Option Notice”) at
least twelve (12) months prior to the expiration of the initial Term of this
Lease. The Annual Rent for the Renewal Term shall be adjusted to the then fair
market rent for the Premises.  

The Renewal Option shall be for either fifty percent (50%) or one hundred (100%)
of the Leased Premises, however any portion of the Leased Premises not renewed
shall be returned to Landlord in full floor increments.

Within fifteen (15) days after Landlord’s receipt of the Option Notice, Landlord
shall advise Tenant in writing of Landlord’s determination of fair market rent
for the Premises for the Renewal Term (hereinafter called “Rent Determination
Notice”).  In the event Tenant does not agree with Landlord’s determination of
the rent to be paid during the Renewal Term, then Tenant shall notify Landlord
of Tenant’s objection within fifteen (15) days of Tenant’s receipt of Landlord’s
Rent Determination Notice.  Tenant and Landlord shall negotiate in good faith
for a period of ten (10) days thereafter to address and resolve Tenant’s
objections to Landlord’s determination.  If Tenant and Landlord are not able to
agree

 

 

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on the fair market rent within such ten (10) day period, Tenant may elect, upon
written notice to Landlord, to rescind Tenant’s Option Notice and not renew the
Term of this Lease, in which event the Term of this Lease shall expire at the
conclusion of the initial Term.  If Tenant does not respond to the Rent
Determination Notice in writing within such fifteen (15) day period, then Tenant
shall be deemed to have rejected the terms of the Rent Determination Notice, and
the Renewal Term shall not apply.

If the Renewal Option is not exercised in accordance with this Section 46, the
Renewal Option shall automatically become null and void.

The Renewal Option may be exercised only by the undersigned Tenant for its
continued use and occupancy of the Premises and only if it is in possession of
the Premises and operating a permitted use when it exercises the Renewal
Option.  

The Renewal Option shall not be assignable even though Landlord may have
approved an assignment of this Lease.  However, if Tenant assigns this Lease,
with Landlord’s consent, to any entity into which or with which Tenant merges or
consolidates and/or to any parent, subsidiary, or affiliated entity, the
assignee may exercise the Renewal Option.

If Tenant shall default under this Lease beyond any applicable notice and cure
period, the Renewal Option shall automatically be extinguished and become null
and void.

If the Term of this Lease is extended or renewed in a manner other than as set
forth in this Section 46, the Renewal Option, if unexercised at the time of such
extension or renewal, shall automatically be extinguished and shall become null
and void.

 

EARLY TERMINATION

47.  Tenant shall have the one (1) time right to terminate this Lease eight (8)
years from the 5th Floor Rent Commencement Date (hereinafter called “Early
Termination Date”), by providing Landlord with written notice no later than nine
(9) months before the Early Termination Date (hereinafter called “Termination
Notice Date”) and paying Landlord a cancellation fee in the amount of the
unamortized Improvement Allowance and leasing commissions in addition to all
rent, additional rent and other charges due through the Early Termination Date
(hereinafter called “Termination Penalty”).  In the event that Tenant does not
provide Landlord with said notice and Termination Penalty, on or before the
Termination Notice Date, this Lease shall remain in effect for the entire Lease
Term.  At any time during the Lease Term, if Tenant consolidates its Salt Lake
Headquarters with Landlord, pursuant to the terms of Section 45, no termination
penalty shall be due.

 

ADDITIONAL PROVISIONS

 

48. Landlord Ownership and Limitation on Tenant’s Liability. Landlord and Tenant
hereby agree that Landlord is the owner of the Building (upon the Lease Date,
and ownership is subject to

 

 

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change) for all purposes, including, without limitation, accounting purposes,
and the parties agree to cooperate in good faith to ensure that Tenant is not
deemed to be the owner of the Building for accounting purposes. Accordingly,
notwithstanding any other term or condition of this Lease to the contrary, with
respect to any claim accruing prior to the completion date of the initial
construction of the Building and initial leasehold improvements, Tenant’s
liability under the Lease (inclusive of any indemnification liability under the
Lease) shall not exceed the Construction Period Maximum Liability. “Construction
Period Maximum Liability” shall mean the sum of (a) 89.95% of the then incurred
project costs for the Building that are properly capitalizable under US GAAP
incurred as of such date, including, without limitation, brokerage commissions
(after having adjusted such costs for any Force Majeure Costs) minus the sum of
(i) any payments previously paid by the Tenant in connection with the Building
to such point in time and (ii) the present value of any future payments made by
Tenant in connection with the Building, discounted at Tenant’s incremental
borrowing rate used to classify the lease under ASC 840 (FAS 13), that the
Tenant is obligated to make but in each case excluding payments that are not
required to be included in the calculation of the Tenant’s maximum guaranty
amount under ASC 840-40-55 (EITF 97-10). “Force Majeure Costs” shall mean the
sum of (a) all costs and expenses incurred by Landlord to restore the Building
in connection with a Force Majeure Event (including (i) all capitalized interest
and other collateral costs and carrying costs accruing on such cost necessary to
repair and restore damage caused by such Force Majeure Event following such
Force Majeure Event and (ii) all capitalized interest and other collateral costs
and carrying costs accruing as a result of time delays necessary to repair and
restore damage caused by such Force Majeure Event following such Force Majeure
Event) less the amount of all insurance proceeds applied to the restoration of
the Building and (b) to the extent the Building is not restored following such
Force Majeure Event, the reduction, if any, in fair market value of the Building
as a result of such Force Majeure Event, as set forth in an appraisal in form
and substance reasonably satisfactory to Landlord conducted by an independent
appraiser selected by Landlord; provided, however, in no event shall the amount
determined in the foregoing clause (b) be less than the remaining estimated cost
to restore the Building to substantially the same condition as immediately prior
to the Force Majeure Event.

 

 

 

 

 

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AS WITNESS THE HAND AND SEALS OF THE PARTIES HERETO THE DAY AND YEAR FIRST ABOVE
WRITTEN:

 

 

WITNESS:

 

TENANT:  Instructure, Inc. , a Delaware corporation

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Evelyn Guerra

 

By:

/s/ Josh Coates

 

 

 

 

 

Printed Name:

Josh Coates

 

 

 

 

 

Title:

CEO

 

 

 

 

 

 

WITNESS:

 

LANDLORD: Valley Grove, LLC, a Maryland limited liability company

 

 

 

 

 

 

 

 

 

/s/ Janessa Young

 

By:

/s/ Daniel Thomas

 

 

 

 

 

Printed Name:

Daniel Thomas

 

 

 

 

 

Title:

Regional Partner

 

 

 

 

 

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SECURITY DEPOSIT AGREEMENT

 

This is NOT a rent receipt.

 

Date November 10, 2016

 

Received from Instructure, Inc. (“Tenant”) the amount of Two Hundred Ninety
Thousand Five Hundred and Fifty-Eight and 00/100 Dollars ($290,558.00), in the
form of a letter of credit, attached as Exhibit C, as security deposit for the
lease associated with the leased premises located at 1915 West Grove Parkway
Suites A-F (the “Temporary Lease) and the Permanent Lease (such $290,558.00
amount is hereafter referred to as the “Initial Security Deposit”).  

 

For reference purposes, that certain Full Service Office Building Lease
Agreement between Tenant, as tenant, and Valley Grove, LLC, a Maryland limited
liability company, as landlord, for premises to be located in a building to be
constructed and known as Grove Tower is hereafter referred to as the “Permanent
Lease”.

 

In the event Tenant’s Financial Threshold Requirements (hereafter defined) have
not been attained  on or before the date on which Landlord’s contractor
commences construction of Tenant’s leasehold improvements to the 6th Floor
described in the Permanent Lease which are to be constructed by Landlord under
the Permanent Lease (the “Commencement of Construction”), then  within ten (10)
business days following the Commencement of Construction (written notice of the
date of the Commencement of Construction shall be delivered by Landlord to
Tenant within one (1) business day following the Commencement of Construction),
then Tenant shall cause a letter of credit to be issued in favor of the landlord
of the Permanent Lease (herein after “Letter of Credit”), in the amount of the
lesser of the following: (i) One Million Three Hundred Thousand and 00/100
Dollars ($1,300,000.00), or (ii) the amount of the improvement allowance
requested by Tenant under the Permanent Lease, as an additional security deposit
(such amount of the letter of credit is hereafter referred to as the “Additional
Security Deposit”), as security for the Permanent Lease.  Notwithstanding the
above, In the event the Additional Security Deposit is required, Landlord shall
not be required to actually commence construction of the leasehold improvements
until the Additional Security Deposit is received.

 

“Tenant’s Financial Threshold Requirements” shall mean Tenant’s satisfaction of
the following as evidenced in any year’s publicly-filed 10K/Annual
Report:  Tenant attaining a positive net income of at least Two Million and
00/100 Dollars ($2,000,000.00) for two consecutive years.

 

In the event Tenant is required to obtain and deliver the Letter of Credit, such
Letter of Credit shall be permanently terminated and released on the first day
on which Tenant satisfies Tenant’s Financial Threshold Requirements and no
letter of credit shall thereafter be required.  

 

Within ten (10) business days following Landlord’s receipt of Tenant’s invoice
(which invoice shall include reasonable evidence of such charges) Landlord shall
reimburse to Tenant fifty percent (50%) of Tenant’s reasonable transaction costs
associated with the issuance of the Letter of Credit, including by way of
example but without limitation, the fees and charges assessed by the bank or
lender issuing the Letter of Credit.

 

On each anniversary of the issuance of the Letter of Credit, the then-existing
amount of the Letter of Credit shall be reduced by ten percent (10%).

 

 

 

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Landlord agrees that, subject to the conditions listed below, the Initial
Security Deposit will be released from the Temporary Lease and applied to the
Permanent Lease within forty-five (45) days of vacancy of the Temporary Lease.

 

Tenant agrees that the Initial Security Deposit and the Additional Security
Deposit may not be applied by Tenant as rent and that the full monthly rent will
be paid on or before the first day of every month, including the last month of
occupancy.

 

Landlord agrees that, subject to the conditions listed below, the Initial
Security Deposit will be returned in full within forty-five (45) days of
vacancy.

 

The Initial Security Deposit may only be applied to cure defaults by Tenant, or
used by Landlord to repair property damage caused by Tenant beyond reasonable
wear and tear; provided, however, it is understood and agreed that the
Additional Security Deposit may only be used to cure financial defaults by
Tenant and applied by the Landlord in the event Landlord properly terminates the
Permanent Lease as a result of Tenant’s defaults of said lease (to the extent
the Letter of Credit has not already been terminated and released as a result of
Tenant’s satisfaction of Tenant’s Financial Threshold Requirements). Tenant
further agrees that a mortgagee of the property demised by the Lease to which
this Security Deposit Agreement is appended and/or a mortgagee thereof in
possession of said property and/or a purchaser of said property at a foreclosure
sale shall not have any liability to Tenant for a security deposit, except to
the extent such party actually receives the Security Deposit.

 

RELEASE/TERMINATION PREREQUISITES FOR THE INITIAL SECURITY DEPOSIT (such
prerequisites do not apply to the Additional Security Deposit):

1.   Full term of Lease has expired, unless earlier terminated pursuant to the
lease.

2.   Premises in condition required under the lease.

3.   No unpaid late charges or delinquent rents.

4.   All keys returned to Landlord.

5.   All debris and rubbish and discards placed in proper rubbish containers.

6.   Forwarding address left with Landlord.

 

 

 

[SIGNATURES ON THE FOLLOWING PAGE]

 

 

--------------------------------------------------------------------------------

 

 

AS WITNESS THE HANDS AND SEALS OF THE PARTIES HERETO THE DAY AND YEAR FIRST
ABOVE WRITTEN:

 

 

WITNESS:

 

TENANT:  Instructure, Inc. , a Delaware corporation

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Evelyn Guerra

 

By:

/s/ Josh Coates

 

 

 

 

 

Printed Name:

Josh Coates

 

 

 

 

 

Title:

CEO

 

 

 

 

 

 

 

 

 

WITNESS:

 

LANDLORD: Valley Grove, LLC, a Maryland limited liability company

 

 

 

 

 

 

 

 

 

/s/ Janessa Young

 

By:

/s/ Daniel Thomas

 

 

 

 

 

Printed Name:

Daniel Thomas

 

 

 

 

 

Title:

Regional Partner

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

Grove Tower

Exhibit “A”

RULES AND REGULATIONS

 

1.The common facilities, and the sidewalks, driveways, and other public portion
of the Property (herein "Public Areas") shall not be obstructed or encumbered by
any tenant or used for any purpose other than ingress or egress to and from its
Leased Premises, and no tenant shall permit any of its employees, agents,
licensees or invitees to congregate or loiter in any of the Public Areas.  No
tenant shall invite to, or permit to visit its Leased Premises, persons in such
numbers or under such conditions as may interfere with the use and enjoyment by
others of the Public Areas.  Landlord reserves the right to control and operate,
and to restrict and regulate the use of, the Public Areas and the public
facilities, as  well as facilities furnished for the common use of the tenants,
in such manner as it deems best for the benefit of the tenants generally,
including the right to allocate certain elevators and times of use of elevators
for delivery service or moving of Tenant’s property, and the right to designate
which Building entrances shall be used by persons making deliveries in the
Building.  The employees, agents, licensees and invitees of any Tenant shall not
loiter around the Public Areas or the front, roof or any part of the Building
used in common by other occupants of the Building.  All bicycles shall be stored
either on outside bike racks or in the bike storage room on the 1st floor of the
Building.  No bicycles, vehicles, animals (except service animals) fish or birds
of any kind shall be brought into, or kept in or about any Leased Premises
within the Building.  Tenant shall be permitted to use non-gas-powered-skooters
in the Leased Premises but shall not be permitted to ride them in any public
areas in the Building or on the Property.

 

2.   No doormat of any kind whatsoever shall be placed or left in any public
hall or outside any entry door of the Leased Premises.  Tenant does hereby
further irrevocably constitute and appoint Landlord as its attorney-in-fact only
to remove any object placed in violation of said Rules and Regulations, and to
store the same at the expense of Tenant in such place or places as Landlord, as
its sole discretion, may deem proper.

 

3.  There shall not be used in any space, or in the Public Areas, either by any
tenant or by others, in the moving or delivery of receipt of safes, freight,
furniture, packages, boxes, crates, paper, office material or any other matter
or thing, only hand trucks equipped with rubber tires, side guards and such
other safeguards as Landlord shall require.

 

4.   All removals, or the carrying in or out of any safes, freight, furniture,
large packages, boxes, crates or any other object or matter of any description
shall take place after Normal Building Hours or such hours and in such elevators
as Landlord may determine, and which may involve overtime work for Landlord's
employees.  Tenant shall reimburse Landlord for extra costs incurred by Landlord
as Additional Rent.  Landlord reserves the right to inspect all objects and
matter to be brought into the Building and to exclude from the Building all
objects and matter which violate any of these Rules and Regulations or the Lease
of which these Rules and Regulations are a part. Landlord shall in no way be
liable to any tenant for damages or loss arising from the admission, exclusion
or ejection of any person to or from the Leased Premises or the Building under
the provisions of this Rule or of Rule 3 thereof.

 

5.  Nothing shall be done or permitted in Tenant's Leased Premises, and nothing
shall be brought into, or kept in or about the Leased Premises, which would
impair or interfere with any of the HVAC, plumbing, electrical, structural
components of the Building or the services of the Building or the proper and
economic heating or cooling, cleaning or other services of the Building or the
Leased Premises, nor shall there be installed by any tenant any ventilating,
air-conditioning, electrical or other equipment of any kind which, in the
judgment of Landlord, might cause any such impairment or interference.  No
tenant, or the employees, agents, licensees or invitees of any tenant, shall at
any

 

 

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time bring or keep upon the Leased Premises Building or Property any flammable,
combustible or explosive fluid, chemical or substance. When electric wiring of
any kind is introduced, it must be connected as directed by Landlord, and shall
be done only by contractors approved by Landlord.  Plumbing facilities shall not
be used for any purpose other than those for which they were constructed; and no
sweepings, rubbish, ashes, newspapers or other substances of any kind shall be
thrown into them.  Waste and excessive or unusual use of electricity or water is
prohibited.

 

6. Tenant shall not employ any person or persons other than Landlord's janitors
for the purpose of cleaning its Leased Premises, without prior written consent
of Landlord.  Landlord shall not be responsible to any tenant for any loss of
property from its Leased Premises however occurring, or for any damage done to
the effects of any tenant by such janitors or any of its employees, or by any
other person or any other cause.  The janitorial service furnished by Landlord
does not include the beating or cleaning of carpets or rugs.  Tenant agrees to
keep the Leased Premises in a neat, good and sanitary condition and to place
garbage, trash, rubbish and all other disposables only where Landlord directs.

 

7.No awnings or other projections shall be attached to the outside walls of the
Building.  No curtains, blinds, shades or screens shall be attached to or hung
in, or used in connection with, any window or door of a tenant's Leased
Premises, without the consent of Landlord. Nothing shall be placed on the
Building’s window sills or projections. Such curtains, blinds shades or screens
must be of a quality, type, design and color, and attached in the manner,
approved by Landlord.  If Landlord installs or allows Tenant to install any
shades, blinds, curtains in the Leased Premises, Tenant shall not remove them
without the prior written consent of Landlord.  In order that the Building can
be and will maintain a uniform appearance to those persons outside of the
Building, each tenant occupying the perimeter areas of the Building shall (a)
use only building standard lighting in areas where lighting is visible from the
outside of the building and (b) use only building standard blinds in window
areas which are visible from the outside of the building.

 

8.  No sign, insignia, advertisement, lettering, notice or other object shall be
exhibited, inscribed, painted or affixed by any tenant on any part of the
exterior of the Building or Property or on doors, corridor walls, the Building
directory or in the elevator cabs or any portion of the Leased Premises which
may be seen from outside of the Building or on any windows or window spaces
without the prior written approval of Landlord.  If approved by Landlord, Tenant
shall obtain all necessary approvals and permits from all governmental or
quasi-governmental authorities in connection with such signs.  Such signs shall,
at the expense of each Tenant, be inscribed, painted or affixed by sign-maker as
approved by Landlord.  In the event of the violation of the foregoing by any
tenant, Landlord may remove such signs without any liability, and may charge the
expense incurred in such removal to the Tenant or tenants violating this Rule.

 

9.  Landlord shall have the right to prohibit in the public areas, on the
Building or anywhere on the Property any advertising or identifying sign or by
any tenant which, in the judgment of Landlord, tends to impair the appearance or
reputation of the Building or the desirability of the Building as a building for
offices, and upon written notice from Landlord such tenant shall refrain from
the discontinue such advertising or identifying sign.

 

10.No additional locks or bolts of any kind shall be placed upon any of the
doors or windows by any tenant, nor shall any changes be made in locks or the
mechanism thereof.  Each tenant shall upon the expiration or sooner termination
of the Lease of which these Rules and Regulations are a part, turn over to
Landlord all keys to stores, offices and toilet rooms, either furnished to, or
otherwise procured by, such tenant, and in the event of the loss of any keys
furnished by Landlord, such tenant shall pay to Landlord the cost of replacement
locks.  Notwithstanding the forgoing,

 

 

--------------------------------------------------------------------------------

 

 

Tenant may, with Landlord's prior written consent, which shall not be
unreasonably withheld, conditioned or delayed, install a security system on its
Leased Premises which uses master codes or cards instead of keys, provided that
Tenant shall provide Landlord with the master code or card, for such system.

 

11.   Landlord shall furnish to Tenant at the time of occupancy of the Leased
Premises, two (2) keys to the entrance door(s) to the Leased Premises, and two
(2) access cards to the Building.  Any additional keys or access cards Tenant
requires shall be purchased from Landlord and is payable as Additional
Rent.  The cost for each additional key is $5.00 per key.  The cost for each
additional access card is $15.00 per card.  It is the Tenant’s responsibility to
record the serial number of each access card it assigns to its employees.

 

12.Tenant, before closing and leaving its Leased Premises at any time, shall see
that all lights, computers, copying machines and all other non-essential
electrical equipment are turned off. All entrance doors to Tenant’s in its
Leased Premises shall be kept locked by Tenant when its Leased Premises are not
in use.  Entrance doors shall not be left open at any time.

 

13.  The use of the Building Property and any Leased Premises for sleeping
quarters or for any immoral or illegal purpose is strictly prohibited at all
times.

 

14.  Canvassing, soliciting and peddling in the Building or on the Property are
prohibited and each tenant shall cooperate to prevent the same.

 

15.  No tenant shall cause or permit any odors of cooking or other processes, or
any unusual or objectionable odors, to emanate from its Leased Premises which
would annoy other tenants or create a public or private nuisance.  No cooking
shall be done in a tenant's Leased Premises except as is expressly permitted in
the Lease unless consented to in writing by the Landlord.

 

16.  No noise, including, but not limited to, music, the playing of musical
instruments, recordings, radio or television, which, in the judgment of
Landlord, might disturb other tenants in the Building, shall be made or
permitted by any tenant.  

 

17.  Tenant shall not install a vending machine of any kind in the Building or
on or about the Property.

  

18.  Landlord hereby reserves to itself any and all rights not granted to Tenant
hereunder, including, but not limited to, the following rights which are
reserved to Landlord for its purposes in operating the Office Building:

 

(a)  the exclusive right to the use of the name of the Building for all
purposes, except that a tenant may use the name as its business address and for
no other purpose;

 

(b)  the right to change the name or address of the Building, without incurring
any liability to any tenant for so doing;

 

(c)  the right to install and maintain a sign or signs on the interior of the
Building:

 

(d)  the right to limit the space on the directory of the Building to be
allotted to a tenant; and

 

(e)  the right to grant anyone the right to conduct any particular business or
undertaking in the Building.

 

 

--------------------------------------------------------------------------------

 

 

 

19.  Landlord reserves the right to rescind, alter, waive or add, any Rule or
Regulation at any time prescribed for the Building when, in the reasonable
judgment of Landlord, Landlord deems it necessary or desirable for the
reputation, safety, character, security, care, appearance or interests of the
Building, or the preservation of good order therein, or the operation or
maintenance of the Building, or the equipment thereof, or the comfort of tenants
or others in the Building.  No rescission, alteration, waiver or addition of any
Rule or Regulation in respect of one tenant shall operate as a rescission,
alteration or waiver in respect of any other tenant.