OPERATING LEASE AGREEMENT
BETWEEN
JEA PROPERTY, LLC
AND
DYNAMIC MATERIALS CORPORATION
PROPERTY LOCATION: FORT XXXXXXX, COLORADO
DATED: DECEMBER 1, 1998
TABLE OF CONTENTS
PAGE
I. PREMISES AND COMMON AREAS...................................................1
II. TERM.......................................................................2
2.1. INITIAL TERM...........................................................2
2.2. OPTION TO RENEW........................................................2
2.3. EFFECT OF DEFAULT ON OPTION............................................2
III. RENT......................................................................2
3.1. RENT...................................................................2
3.2. RENEWAL TERM...........................................................3
3.3. REAL PROPERTY TAXES....................................................3
3.4. UTILITIES..............................................................4
3.5. FEES AND OTHER TAXES...................................................4
3.6. INSURANCE..............................................................4
3.7. WAIVER OF SUBROGATION..................................................5
3.8. INDEMNITY..............................................................5
3.9 EXEMPTION OF LANDLORD FROM LIABILITY...................................5
3.10. MAINTENANCE AND REPAIR................................................5
IV. USE OF PREMISES............................................................6
4.1. USE....................................................................6
4.2. TENANT'S COMPLIANCE WITH LAW...........................................6
4.3. INSPECTION; COMPLIANCE.................................................6
V. HAZARDOUS WASTES AND MATERIALS.............................................7
5.1. HAZARDOUS WASTE AND MATERIAL-INDEMNITY.................................7
5.2. DUTY TO INFORM LANDLORD................................................7
5.3. HAZARDOUS SUBSTANCE CONDITIONS.........................................7
VI. [RESERVED].................................................................7
VII. ALTERATIONS...............................................................8
7.1. ALTERATIONS............................................................8
7.2. TRADE FIXTURES.........................................................8
7.3. LIENS PROHIBITED.......................................................8
7.4 MECHANICS' LIENS.......................................................8
VIII. DESTRUCTION AND EMINENT DOMAIN...........................................9
8.1. DESTRUCTION............................................................9
8.2. DAMAGE NEAR END OF TERM................................................9
8.3. EMINENT DOMAIN........................................................10
IX. ASSIGNMENT AND SUBLETTING.................................................10
9.1. ASSIGNMENT AND SUBLETTING.............................................10
9.2. ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING..............11
9.3. TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING..........11
X. DEFAULT....................................................................11
10.1. EVENTS OF DEFAULT....................................................11
10.2. REMEDIES.............................................................12
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XI. SURRENDER OF PREMISES.....................................................13
11.1. SURRENDER OF POSSESSION..............................................13
XII. MISCELLANEOUS............................................................14
12.1. TITLE AND QUIET ENJOYMENT............................................14
12.2. NO WAIVER............................................................14
12.3. NOTICES..............................................................14
12.4. HOLDING OVER.........................................................14
12.5. ATTORNEYS' FEES AND COSTS............................................14
12.6. CONSTRUCTION.........................................................14
12.7. SUCCESSION...........................................................15
12.8. SEVERABILITY.........................................................15
12.9. FORCE MAJEURE........................................................15
12.10. RECORDING...........................................................15
12.11. ARTICLE HEADING.....................................................15
12.12. ENTIRE AGREEMENT....................................................15
12.13. NO BROKERS..........................................................15
12.14. RENT DEFINED........................................................15
12.15. CUMULATIVE REMEDIES.................................................15
12.16. CHOICE OF LAW.......................................................15
12.17. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE..........................15
12.18. SECURITY MEASURES...................................................16
12.19. RESERVATIONS........................................................16
12.20. LANDLORD'S LIABILITY................................................16
12.21. AMENDMENTS..........................................................16
12.22. LIMITATION ON LANDLORD LIABILITY....................................17
12.23 AUTHORIZATION OF LANDLORD...........................................17
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OPERATING LEASE AGREEMENT
THIS OPERATING LEASE AGREEMENT made this 1st day of December, 1998 (this
"Lease"), between JEA PROPERTY, LLC, A COLORADO LIMITED LIABILITY COMPANY
("Landlord"), and DYNAMIC MATERIALS CORPORATION, A DELAWARE CORPORATION
("Tenant").
BACKGROUND
This Lease is being entered into in connection with the transaction
contemplated by that certain Asset Purchase Agreement by and among Tenant, as
purchaser, and Precision Machined Products, Inc., a Colorado corporation, as
Seller, and Xxxxxxx X. Xxxxxxx and Xxxxxxxx X. Xxxxxxx. The Tenant has been
granted certain options to acquire the Premises (hereafter defined) pursuant to
that certain Option and Right of First Offer Agreement of even date herewith by
and between Landlord and Tenant.
LEASE OF PREMISES
Landlord hereby leases to Tenant and Tenant hereby rents from Landlord,
subject to the terms and provisions of this Lease, including the General
Provisions hereafter set forth and the Exhibits hereafter identified and
attached hereto, those certain premises (hereafter "Premises") described on
"Exhibit A" attached hereto and made a part hereof. As used in this Lease,
reference to the "Premises" shall mean the whole of the building structures,
parking areas, landscaping and other improvements, together with all of the
land.
BASIC LEASE PROVISIONS
1. Premises Address: 0000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxxxx, Xxxxxxxx 00000
2. Premises Rentable Area: 19,502 square feet
3. Basic Annual Rent: $97,510.00
4. Monthly Rental Installments: $8,125.83
5. Initial Term: Five (5) years.
6. Commencement Date: December 1, 1998
7. Options to Renew: One (1), five (5) year renewal term
8. Tenant's Address for Delivery of Notices: 000 Xxxxx Xxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxx 00000, Attention: President
9. Landlord's Address for Payment of Rent and Delivery of Notices:
0000 Xxxxxxxxx Xxxxx, Xxxx Xxxxxxx, Xxxxxxxx 00000, Attention:
Xxxxxxxx Xxxxxxx
GENERAL PROVISIONS
I. PREMISES AND COMMON AREAS
PREMISES. The Premises subject to this Lease is Xxx 00,
Xxxxxxxxxx Xxxxxxxx, Xxxxxxx Xxxxxx, Xxxxxxxx, and all improvements thereon.
Landlord represents and warrants that the Premises are in compliance with all
applicable federal, state and local laws, rules, regulations and ordinances,
including, but not limited to, the
Americans with Disabilities Act of 1990, where the consequences of any failure
to be in such compliance could result in any liability for Tenant in excess of
$1,000 in any given calendar year. Tenant accepts the Premises as of the
Commencement Date and "WITH-ALL-FAULTS" and Tenant's occupancy of the Premises
as of the Commencement Date shall be deemed to constitute acceptance of the
Premises and acknowledgment by Tenant that Landlord shall not be required to
make any improvements to the Premises, unless such improvements (a) are required
as a result of failure of the Premises to be in compliance with any applicable
laws, rules, regulations or ordinances and (b) cost, in the aggregate, more than
$1,000 in any given calendar year (and Landlord acknowledges that,
notwithstanding anything to the contrary in this Lease, Tenant shall have no
obligation to correct any such event or circumstance of noncompliance which
existed or occurred on or prior to the Commencement Date).
II. TERM
2.1. INITIAL TERM. The initial term (hereafter "Initial Term") of this
Lease as set forth in the Basic Lease Provisions shall commence on the
Commencement Date specified in the Basic Lease Provisions.
2.2. OPTION TO RENEW. Tenant shall have the option to renew the term
of the Lease for one (1) renewal period for a term of five (5) years commencing
immediately following the expiration of the then current term, such renewal term
to be upon all of the terms, conditions, covenants and provisions of the Lease
except as provided below. The failure of Tenant to exercise the option for any
renewal period in the manner and within the time herein provided shall terminate
the rights of Tenant with respect to that renewal period and all subsequent
renewal periods, if any.
Tenant's right to exercise the option to renew the term of the
Lease shall be subject to the following conditions:
(a) Tenant shall be in possession of the Premises and there shall
not be an uncured Event of Default (as defined herein) at the time Tenant
delivers to Landlord a notice of Tenant's election to renew the term or on the
last day of the then current term.
(b) Tenant shall deliver to Landlord a written notice irrevocably
exercising the option to renew the term at least one hundred twenty (120) days
before the last day of the Initial Term.
2.3. EFFECT OF DEFAULT ON OPTION.
(a) Tenant shall have no right to exercise the option to renew in
Section 2.2, notwithstanding any provision in Section 2.2 to the contrary: (i)
during the time there is an uncured Event of Default.
(b) The period of time within which an option may be exercised
shall not be extended or enlarged by reason of Tenant's inability to exercise an
option because of the provisions of Paragraph 2.3(a).
(c) After a permitted assignment of the entire Premises, this
Lease pursuant to Article IX hereof if Tenant is released of liability
hereunder, all rights of Tenant under the provisions of an option shall
terminate and be of no further force or effect.
III. RENT
3.1. RENT. Tenant shall pay to Landlord the Basic Annual Rent for the
Premises specified in the Basic Lease Provisions, in equal monthly installments
on the first (1st) day of each calendar month, in advance, without notice,
demand, abatement, deduction or set-off. Rent for any period less than a full
calendar month shall be pro-rated on a per diem basis. Upon execution of this
Lease, Tenant shall pay to Landlord the pro rata portion of the Rent between
such date and the end of the current month.
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3.2. RENEWAL TERM. At the beginning of the renewal term of this Lease,
the Basic Annual Rent shall be adjusted, and Tenant shall pay to Landlord during
the entire renewal term, as Annual Rent, an amount which shall be equal to the
then Market Rent (as defined herein) for the Premises; provided, however, such
Basic Annual Rent shall not be less than the Basic Annual Rent in effect
immediately prior to the commencement of the renewal term. The Market Rent for
the Premises shall be determined by agreement of Landlord and Tenant in writing
attached as a supplement to this Lease arrived at no later than one hundred
fifty (150) days prior to the expiration of the current term. If Landlord and
Tenant cannot so agree on the Market Rent within twenty (20) days thereafter and
if Tenant has timely exercised its option to renew, Landlord and Tenant shall
each appoint and compensate an industrial real estate broker with at least five
(5) years experience and familiarity with the Larimer County, Colorado
commercial and industrial real estate values and rents. The two brokers if
appointed shall attempt within thirty (30) days thereafter to determine the fair
market rent ("Market Rent") and advise both Landlord and Tenant of such
determination. If either Landlord or Tenant is dissatisfied with the rent as
determined by the said brokers or if the brokers fail to determine a Market Rent
within the specified thirty (30) day period, the Market Rent shall be determined
by an M.A.I. appraiser selected by said brokers, or if said brokers cannot agree
on the identity of the M.A.I. appraiser within ten (10) days after notice from
Landlord and Tenant, Landlord and Tenant shall within ten (10) days thereafter
appoint an M.A.I. appraiser, which appraiser shall determine the Market Rent of
the Premises. The determination of Market Rent shall be based upon the five-year
rental rate paid for comparable buildings and improvements located within the
commercial rental market in which the Premises are located and shall take into
account the improvements to the buildings installed and owned by Landlord. If
the parties cannot agree upon the identity of the appraiser within ten (10) days
after the date on which the Landlord and Tenant were to have agreed upon the
identity of the appraiser, the appraiser shall be selected by Tenant from a list
of three (3) Colorado M.A.I. appraisers provided by Landlord within thirty (30)
days thereafter, or selected unilaterally by Tenant if Landlord fails to provide
such list in a timely manner. The appraiser's opinion of Market Rent shall be
binding as to the Market Rent of the Premises. All appraisers hereunder shall
have been an M.A.I. appraiser in Colorado for at least five (5) years. Each
party shall pay one-half of the fee of the appraiser. The appraisal shall be
completed within thirty days of request of the appraisal.
3.3. REAL PROPERTY TAXES. Tenant shall reimburse Landlord for all Real
Property Taxes assessed against the Premises, and payable with respect to any
period, during the term of the Lease paid by Landlord; provided that Tenant's
share of Real Property Taxes which first become due during the term hereof shall
be prorated on a per diem basis such that Tenant shall only be responsible for
the proportionate share of such Real Property Taxes attributable to the period
Tenant had occupancy rights hereunder. Tenant shall pay such amounts to Landlord
within thirty (30) days following written demand from Landlord, which demand
must include to be deemed valid hereunder true and accurate bills for all Real
Property Taxes for which reimbursement is sought. As used herein, the term "Real
Property Taxes" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, and any license fee, commercial
rental tax, improvement bond or bonds, levy, or tax (other than inheritance,
personal income or estate taxes) imposed upon the Premises by any authority
having the direct or indirect power to tax, including, any city, state or
federal government, or any school, agricultural, sanitary, fire, street,
drainage or other improvement district thereof, levied against any legal
interest of Landlord in the Premises or in the real property of which the
Premises are a part. Landlord represents that it has provided Tenant with true
and accurate copies of all bills for Real Property Taxes for the past twelve
(12) months and that there are no pending special assessments or increased
assessments or other pending new or increased costs of which are defined as Real
Property Taxes hereunder of which notice has been sent to the Premises or to
Landlord or of which Landlord has otherwise become aware. Notwithstanding
anything contained herein to the contrary, Tenant shall not be obligated to pay
any portion of any special assessment, bond or other tax-related obligation that
is payable with respect to any period after the term of this Lease has expired.
If Tenant desires to contest the validity of any taxes or assessments for which
Tenant is ultimately responsible, Tenant may do so without being in default
under its obligation to pay taxes and assessments, provided Tenant institutes
appropriate legal proceedings to contest the validity of the tax or assessment.
Tenant shall prevent the sale of any tax certificate or the Premises or any
property subject to the tax lien by reason of nonpayment of the tax or
assessment being contested in such legal proceedings. If Tenant fails to prevent
any such sale, Tenant shall deposit with Landlord at least thirty (30) days
before the contested tax or assessment would become delinquent for nonpayment
(or within ten (10) days of
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dissolution of the injunction), an amount which is sufficient to pay in full the
contested tax or assessment, including, without limitation, all penalties and
court costs if the adjudication in such proceedings should be adverse to Tenant.
Landlord shall have the right to make any such payment; provided, however,
Landlord shall refund to Tenant any portion of the deposit retained by Landlord
which shall be determined by the court not to be due to the taxing authorities
on account of such taxes, penalties or costs. Landlord shall not be obligated to
incur any expense in connection therewith unless Tenant agrees to reimburse
Landlord for such expenses.
3.4. UTILITIES. Tenant shall be solely responsible for and shall
timely pay all fees and charges for heat, water, gas, electricity, janitorial,
telephone, trash, sewer and any other utilities whatsoever and any taxes thereon
charged to, used or consumed on or in connection with the Premises by Tenant
during the Lease Term. Landlord represents and warrants that water, gas,
electrical and sewer are available and serving the Premises and Landlord is not
aware of any fact or condition which exists which might now or in the future
make such utilities unavailable.
3.5 FEES AND OTHER TAXES. Tenant shall pay, when due, any and all
licenses fees and all other taxes imposed against Tenant in connection with the
business conducted by Tenant on the Premises. Tenant shall further pay, any and
all taxes upon personal property owned by Tenant and located upon or appurtenant
to the Premises.
3.6. INSURANCE. Tenant shall procure and maintain in force at all
times during the term of this Lease:
(a) fire, windstorm, flood (if the Premises is in a 500-year
flood zone as designated by FEMA or flood insurance is available) and extended
coverage in the minimum amount of the full replacement value of all buildings
and improvements (other than foundation) constructed or installed on the
Premises (insuring Landlord, Landlord's mortgagee, if any, and Tenant, as their
interests may appear), for protection against loss or damage by fire, windstorm,
and other hazards ordinarily included in the definition of "extended coverage"
and "all risks" as such terms are used in the insurance trade.
(b) comprehensive general liability, property damage and bodily
injury insurance, naming Landlord (and Landlord's mortgagee, if any as
additional insureds) against liability occasioned by any accident, injury or
damage offered or occurring on or about the Premises or any appurtenance
thereto. Each liability policy shall be for the minimum amount of $2,000,000.00
combined single limit coverage per accident.
(c) workers' compensation insurance in the amounts required by
law.
(d) all insurance required under this Lease shall be written with
insurance companies having a Best Rating of no less than A-1, which are
authorized to do business in the State of Colorado. The cost of all premiums on
the policies shall be paid by Tenant. The policies shall contain a clause that
the insurer will not cancel or change the insurance coverage without first
giving Landlord thirty (30) days' prior written notice. Tenant shall furnish
Landlord a certificate of insurance for each such policy prior to the Initial
Term and at least ten (10) days prior to the expiration date of each such
policy.
(e) any insurance provided for in this section may be
accomplished by a policy or policies of so called "blanket" insurance; provided,
however, that the amount of the total insurance allocated to the Premises shall
be such as to furnish in protection the equivalent of separate policies in the
amounts herein required, and provided, further, that in all other respects, any
such policy or policies shall comply with this Lease. In any such case, it shall
not be necessary to deliver the original of any such blanket policy to Landlord,
but Landlord shall be furnished with a certificate of insurance.
3.7. WAIVER OF SUBROGATION. Each party to this Lease hereby waives,
releases and discharges each other from all liability or right of recovery
against the other by subrogation or otherwise of any loss or damage due to the
act or neglect of the other party concerning the Premises, to the extent such
damage was covered by any policy of insurance maintained by the injured party or
which would have been covered by any policy of insurance which the injured party
is required to maintain under this Lease even though such liability or damage
may have
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been occasioned by the negligence of either of the parties. Each party to this
Lease hereby expressly agrees to notify its insurance carrier of the mutual
waivers contained in this paragraph and to have its policies endorsed as
necessary to prevent invalidation of coverage due to such waivers. This Section
3.7 shall not apply to claims made by either party against the other under
Sections 4.1 or 5.1.
3.8. INDEMNITY. Tenant shall indemnify, protect, defend and hold
harmless the Premises, Landlord and its agents, servants, employees, partners
and lenders, from and against any and all claims, loss of rents and/or damages,
costs, liens, judgments, penalties, permits, reasonable attorney's and
reasonable consultant's fees, expenses and/or liabilities to the extent such
item arises out of or involves the occupancy of the Premises by Tenant, the
conduct of Tenant's business, any act, omission or neglect of Tenant, its
agents, contractors, employees or invitees, and out of any default or breach by
Tenant in the performance in a timely manner of any obligation on Tenant's part
to be performed under this Lease, or arises out of or results from the
negligence or willful misconduct of Tenant, unless any such liability is caused
by reason of the affirmative negligence or willful misconduct of Landlord.
Landlord will indemnify and hold harmless Tenant and its agents, servants,
employees, partners and lenders from and against all claims, demands and/or
damages, costs, liens, judgments, penalties, permits, reasonable attorney's and
reasonable consultant's fees, expenses and/or liabilities to the extent such
items arise out of or involve the affirmative negligence or willful misconduct
of Landlord or breach of this Lease. The foregoing shall include, but not be
limited to, the defense or pursuit of any claim or any action or proceeding
involved therein, and whether or not litigated and/or reduced to judgment
whether or not at trial or on appeal, whether or not in bankruptcy, arbitration,
mediation or other adversarial procedure, and whether well founded or not. In
case any action or proceeding be brought by reason of any of the foregoing
matters for which Landlord is entitled to be indemnified by Tenant, Tenant, upon
notice from Landlord, shall defend the same at Tenant's expense by counsel
reasonably satisfactory to Landlord and Landlord shall cooperate with Tenant in
such defense. Landlord need not have first paid any such claim in order to be so
indemnified. In case any action or proceeding be brought by reasons of any of
the foregoing matters for which Tenant is entitled to be indemnified by
Landlord, Landlord upon notice from Tenant shall defend the same at Landlord's
expense by counsel reasonably satisfactory to Tenant and Tenant shall cooperate
with Landlord in such defense. Tenant need not have first paid any such claims
in order to be so indemnified.
3.9 EXEMPTION OF LANDLORD FROM LIABILITY. Except as otherwise
provided in Section 3.8 above, Landlord shall not be liable for injury or damage
to the person or goods, wares, merchandise or other property, of Tenant,
Tenant's employees, contractors, invitees, customers, or any other person in or
about the Premises, whether such damage or injury caused by or results from
fire, steam, electricity, gas, water or rain, or from the breakage, leakage,
obstruction or other defects of pipes, fire sprinklers, wires, appliances,
plumbing, air conditioning or lighting fixtures, or from any other cause,
whether the said injury or damage results from conditions arising upon the
Premises or upon other portions of the building of which the Premises are a
part, or from other sources or places, and regardless of whether the cause of
such damage or injury or the means of repairing the same is accessible or not.
3.10. MAINTENANCE AND REPAIR. As its sole responsibility with respect
to the maintenance and repair of the Premises, Landlord shall, at its sole cost,
repair and maintain in good order and condition, the foundation, roof, the
structural components of the Premises, including structural aspects of subfloors
and any replacement of structural improvements. Other than Landlord's
obligations set forth in the preceding sentence, Tenant shall pay ordinary
repair and maintenance expenses related to and shall maintain in good operating
condition the Premises and the equipment of Landlord situated upon or
appurtenant to the Premises (including without limitation, all air conditioning,
ventilating, heating, plumbing, sprinkler and alarm systems and electrical
equipment). Although Landlord shall be solely responsible for the replacement of
the roof hereunder, Tenant agrees to conduct routine inspections of the roof and
perform routine, normal maintenance of the roof. All other ordinary maintenance
and repairs of the Premises including, without limitation, parking lots,
sidewalks, landscaping, interior and exterior painting, glass, carpeting, floor
tiles, carpet and lighting fixtures shall be completed and paid for by Tenant.
"Ordinary maintenance and repair" shall not be considered to include replacement
of any structural or capital improvement to the Premises; provided, however,
Tenant shall pay that prorata portion of the cost of replacement of any capital
equipment or parts thereof that is attributable to the life of such asset during
the remaining current
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term of this Lease. If the Tenant renews the term of the Lease as provided
herein, Tenant shall then reimburse Landlord for the cost of such capital
equipment expenditures attributable to the life of such capital equipment
expenditure during such renewal term. "Structural or capital improvements" shall
mean those capital improvements that have a useful life - in excess of 5 years
for federal income tax purposes.
IV. USE OF PREMISES
4.1. USE. The Premises may only be used for the uses for which the
building is currently used, or such other uses that do not place a greater
burden on the building than do such current use. Any other use must be approved
in writing by Landlord, which approval shall not be unreasonably withheld or
delayed. Tenant's use of the Premises shall be in full compliance with all
federal, state and local statutes, ordinances, rules, regulations and laws
applicable to the Premises, except where the consequences of failure to be in
such compliance would not result in any material liability for Tenant or
Landlord. Tenant shall not maintain any item or do anything or permit anything
to be done in or about the Premises which would invalidate or make insurance
unobtainable.
4.2. TENANT'S COMPLIANCE WITH LAW. Tenant shall, at Tenant's sole cost
and expense, fully, diligently and in a timely manner, comply with all
applicable laws, which term is used in this Lease to include all federal, state
and local laws, rules, regulations, ordinances, directives, covenants, easements
and restrictions of record, permits, and the requirements of any applicable fire
insurance underwriter or rating bureau, relating in any manner to the Premises
(including but not limited to matters pertaining to (i) industrial hygiene, (ii)
environmental conditions on, in, under or about the Premises, including soil and
groundwater conditions, and (iii) the use, generation, manufacture, production,
installation, maintenance, removal, transportation, storage, spill or release of
any hazardous substance or storage tank), now in effect or which may hereafter
come into effect, and whether or not reflecting a change in policy from any
previously existing policy. Tenant shall, within fifteen (15) days after receipt
of Landlord's written request, at Landlord's cost (which amount Landlord shall
pay on demand) provide Landlord with copies of all documents and information,
including, but not limited to, permits, registrations, manifests, applications,
reports and certificates in Tenant's possession, evidencing Tenant's compliance
with any applicable law specified by Landlord, and shall immediately upon
receipt, notify Landlord in writing (with copies of any documents involved) of
any threatened or actual claim, notice, citation, warning, complaint or report
pertaining to or involving default or failure by Tenant or the Premises to
comply with any applicable law.
4.3. INSPECTION; COMPLIANCE. Landlord and Landlord's lender shall have
the right following twenty-four (24) hours prior written notice to enter the
Premises at any time, in the case of an emergency, and otherwise at reasonable
times, for the purpose of inspecting the condition of the Premises and for
verifying compliance by Tenant with this Lease and all applicable laws, and to
employ experts and/or consultants in connection therewith and/or to advise
Landlord with respect to Tenant's activities, including but not limited to the
installation, operation, use, monitoring, maintenance or removal of any
hazardous substance or storage tank on or from the Premises. The costs and
expenses of any such inspections shall be paid by the Landlord. Landlord agrees
that any such entries and all such inspections shall be conducted at a time and
in a manner which minimizes to the extent possible disruption of Tenant's
operations.
V. HAZARDOUS WASTES AND MATERIALS
5.1. HAZARDOUS WASTE AND MATERIAL-INDEMNITY. Tenant shall not cause or
permit any Hazardous Waste or Material (hereafter defined) to be brought upon,
kept or used in or about the Premises by Tenant, or employees, agents,
contractors, licensees or invitees of Tenant except in compliance in all
material respects with applicable law. Without limiting the foregoing, if the
presence of any Hazardous Waste or Material on the Premises is caused by Tenant
and results in any contamination of the Premises, Tenant shall promptly take all
actions at Tenant's sole cost and expense as are necessary, to return the
Premises to the condition existing prior to the introduction of any Hazardous
Waste Material to the Premises by Tenant subsequent to the commencement of the
Lease.
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As used herein, the term "Hazardous Waste or Material" means any
hazardous or toxic substance, material or waste which is or becomes regulated by
any local governmental authority, the State of Colorado or the United States
Government. The term "Hazardous Waste or Material" includes, without limitation,
any material, waste or substance that is (i) defined as "hazardous substance"
under any federal, state or local law, ordinance or regulation, (ii) petroleum,
(iii) asbestos, (iv) designated as a "hazardous substance" pursuant to Section
311 of the Federal Water Pollution Control Act (33 U.S.C. ss.l 321), (v) defined
as a "hazardous waste" pursuant to ss.l 004 of the Federal Resource Conservation
and Recovery Act, 42 U.S.C. ss.6901, et seq. (42 U.S.C. ss.6903), (vi) defined
as a "hazardous substance" pursuant to ss.l 01 of the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. ss.9601, et
seq., the Toxic Substances Control Act, 15 U.S.C. ss.2601, et seq.; the Clean
Air Act, 42 U.S.C. ss.7401, et seq.; the Clean Water Act, 33 U.S.C. ss.1251, et
seq.; or (vii) defined as a "regulated substance" pursuant to subchapter IX,
Solid Waste Disposal Act (regulation of underground storage tanks), 42 U.S.C.
ss.6991, et seq.
5.2. DUTY TO INFORM LANDLORD. Tenant shall immediately give written
notice to Landlord that a hazardous substance, or a condition involving or
resulting from same, has come to be located in, on, under or about the Premises,
other than as previously consented to by Landlord or as used by Tenant in the
operation of its business in the Premises in compliance with applicable laws.
Tenant shall also immediately give Landlord a copy of any statement, report,
notice, registration, application, permit, business plan, license, claim, action
or proceeding given to, or received from, any governmental authority or private
party, or persons entering or occupying the Premises, concerning the presence,
spill, release, discharge of, or exposure to, any hazardous substance or
contamination in, on, or about the Premises, including but not limited to, all
such documents as may be involved in any installation or use of any above or
below ground storage tank or the general possession, storage, use,
transportation or disposal of a Hazardous Waste or material that requires a
permit from, or with respect to which a report, notice, registration or business
plan is required to be filed with any governmental authority, involving the
Premises.
5.3. HAZARDOUS SUBSTANCE CONDITIONS. Tenant shall indemnify and hold
harmless Landlord, its partners, affiliates and agents from and against any
damages, claims, judgments, fines, penalties, costs, liabilities (including sums
paid in settlement of claims) or loss including reasonable attorneys' and
paralegals' fees, reasonable consultants' fees, reasonable expert fees incurred
as a direct result of Tenant's use, handling, generation, treatment, storage,
disposal, other management or release of any hazardous substance at or from the
Premises during the term of the Lease, whether or not Tenant has acted
negligently with respect to such hazardous substance. This indemnity shall
survive the expiration or earlier termination of this Lease.
VI. [RESERVED]
VII. ALTERATIONS
7.1. ALTERATIONS. Tenant shall in no event make or permit to be made
any alteration, modification, substitution or other change of any nature to the
mechanical, electrical, plumbing, HVAC and sprinkler systems within or serving
the Premises other than ordinary repairs in accordance with Section 3.10. Tenant
shall not make or permit any other improvements, alterations, fixed decorations,
substitutions or modifications, structural or otherwise, to the Premises or the
Building, which have a cost of $20,000 or more in any case ("Alterations")
without the prior written approval of Landlord which approval will not be
unreasonably withheld. Landlord's approval shall include the conditions under
which acceptable Alterations may be made. Alterations shall include, but not be
limited to, the installation or modification of carpeting, walls, partitions,
counters, doors, shelves, lighting fixtures, hardware, locks, ceiling, window
and wall coverings. All Alterations shall be based on complete plans and
specifications prepared and submitted by Tenant to Landlord for approval, except
in the instance of cosmetic changes, such as painting and carpeting, in which
case Tenant shall provide Landlord with samples showing colors, styles, etc. All
Alterations shall be made at Tenant's sole cost. Tenant shall be responsible for
the cost of any additional improvements within the Premises required by the
Americans with Disabilities Act of 1990 as a result of Tenant's Alterations.
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If Tenant makes any Alterations without the prior consent of
Landlord, then, in addition to Landlord's other remedies, Landlord may correct
or remove such Alterations and Tenant shall pay the cost thereof, as additional
rent, on demand.
All Alterations, (a) shall immediately become the property of
Landlord and (b) shall remain upon and be surrendered to Landlord with the
Premises as a part thereof at the end of the term of the Lease. Notwithstanding
the foregoing, Landlord may, upon notice to Tenant at the time approval of any
Alternations is made, elect that any Alternations be removed at the end of the
Term, and thereupon, Tenant shall, at Tenant's sole expense, cause such
Alterations to be removed and restore the Premises to its condition prior to the
making of such Alterations, reasonable wear and tear excepted. In the event
Tenant fails to cause such Alterations to be removed, Landlord may do so at
Tenant's sole expense. Tenant shall promptly reimburse Landlord, as additional
rent, for the cost of such work, which reimbursement obligation shall survive
termination of the Lease.
7.2. TRADE FIXTURES. Trade fixtures, equipment and other personal
property which are installed in the Premises by Tenant shall remain the property
of Tenant, and, providing Tenant is not in default under this Lease, they may be
removed by Tenant at any time during the term of this Lease provided that Tenant
promptly repairs all damages resulting from the installation or removal and
fully restores the Premises.
7.3. LIENS PROHIBITED. Tenant shall pay all costs for the work done by
or for Tenant on the Premises and Tenant shall keep the Premises free and clear
of all liens of whatever kind or nature on account of work done by or for
Tenant. Tenant shall indemnify, save and hold Landlord and the Premises harmless
against any liability, loss, damage, cost, attorneys' fees and all other
expenses on account of any such lien.
7.4 MECHANICS' LIENS. Tenant shall indemnify Landlord against any
loss or expenses incurred as a result of the assertion of any lien by
materialmen, contractors, artisans, mechanics and laborers and other persons
contracting with Tenant with respect to the Premises or any part thereof. In the
event Tenant fails to have any such lien released as an encumbrance on the
Premises within ninety (90) days of assertion of any such lien or claim of lien,
then, in addition to its other remedies specified in this Lease, Landlord shall
have the right to discharge the lien claimed to bond or other security permitted
by law and in any such event, Tenant shall pay all costs so incurred by Landlord
immediately upon demand therefor. Tenant shall advise all persons furnishing
designs, labor, materials or services to the Premises in connection with
Tenant's improvements thereof, of the provisions of this Article.
VIII. DESTRUCTION AND EMINENT DOMAIN
8.1. DESTRUCTION.
(a) NOTICE. If the Premises, or any material part thereof, should
be destroyed or damaged by fire or other casualty, Tenant shall immediately
deliver written notice thereof to Landlord.
(b) TERMINATION. If the Premises should be destroyed by fire or
other casualty, and it should be so damaged that rebuilding or repairs cannot be
completed within one hundred twenty (120) days after the date of such damage,
Tenant, by written notice to Landlord within ten (10) days of Tenant's receipt
of a written estimate of repair/rebuilding that states the Premises are totally
destroyed and that rebuilding or repair cannot be completed in one hundred
twenty (120) days after the date of damage or loss, may terminate this Lease
effective as of the date of such damage or loss. If the Premises are destroyed
or damaged to the extent of 10% or more of the full replacement cost from a
cause not insured against or required to be insured against, or if insurance
proceeds are otherwise unavailable for reconstruction due to the action of
Landlord, or Landlord's lender, Tenant shall have the right to terminate this
Lease by written notice to Landlord within 10 days of notice to Tenant of the
unavailability of insurance proceeds.
(c) REBUILDING. If the Premises should be damaged by fire or
other casualty, but not to such an extent that rebuilding or repairs cannot be
completed within one hundred twenty (120) days after the date of
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such damage, or if Tenant shall not have elected to terminate this Lease
pursuant to subparagraph 8.1(b) hereof, this Lease shall not terminate, but
Tenant shall proceed with all reasonable diligence to rebuild and repair the
Premises to substantially the condition in which they existed prior to such
damage to the extent insurance proceeds are available therefor. All sums
required in excess of insurance proceeds shall be contributed by Landlord. If
the Premises are untenantable in whole or in part following such damage, the
rent payable hereunder during the period in which they are untenantable shall be
reduced by the percentage of untenantable space.
(d) APPLICATION OF PROCEEDS. In the event of a casualty pursuant
to Article 8 herein for which proceeds are payable to Landlord or Tenant for the
loss of or damage to the Premises, the proceeds shall be paid to Landlord and,
if Tenant is required to repair or restore the Premises as a result of the
casualty, Landlord shall administer the casualty proceeds in accordance with the
terms and provisions of this subsection.
So long as Tenant is rebuilding or repairing the Premises, the
insurance proceeds paid as a result of the casualty shall be held by Landlord,
and shall be disbursed by the Landlord to Tenant to pay for restoration of the
Premises when and in such phases as such restoration and repair has been
completed in accordance with the standard of the construction industry for
comparable buildings; provided, however, until final payment, Landlord shall
always maintain a balance equal to the lesser of (a) the full contracted or
estimated cost of repair and restoration or (b) 110% of the higher of the then
remaining estimated or contracted cost of completion of the repairs and
restoration of the Premises.
As long as Tenant is working to restore and repair the damage,
any interest accruing on such funds shall inure to the benefit of Tenant to be
applied to restoring the Premises.
In addition, in the event of casualty damage during the term of
this Lease, if the Premises is not restored, then, all proceeds shall be paid to
Landlord and Tenant shall not have any claim thereto. The provisions of this
section shall survive termination or expiration of this Lease.
8.2. DAMAGE NEAR END OF TERM. If at any time during the last one
hundred eighty (180) days of the term of this Lease there is damage to the
Premises, either party may terminate this Lease effective sixty (60) days
following the date of occurrence of such damage by giving written notice to the
other party of such party's election to do so.
8.3. EMINENT DOMAIN. If, during the term hereof, there is any taking
of all or any part of the Premises or other improvements on the Premises, or any
interest in this Lease, by condemnation or by private purchase in lieu of
condemnation, the rights and obligations of the parties shall be determined as
set forth below:
(a) TOTAL TAKING. If any legally constituted authority condemns
the entire Premises or such portion thereof which makes the Premises unsuitable
for the purposes for which it was leased, this Lease shall cease when the public
authority takes possession and rentals shall be adjusted as of that date. Except
as provided herein, the entire compensation award shall belong to Landlord;
provided, however, that Tenant may make a separate claim with the condemning
authority for the value of its property, for moving and relocation expenses, and
for other damage suffered by Tenant, if such claim does not reduce or adversely
affect the amount of Landlord's award. Tenant shall have no claim against
Landlord arising out of the taking or condemnation or arising out of any
cancellation of this Lease as a result thereof.
(b) PARTIAL TAKING. In the event of a partial taking of the
Premises or other improvements on the Premises, and this Lease is not canceled
pursuant to the terms hereof, then this Lease shall terminate only as to the
part so taken as of the date of the taking. If the Tenant's use of the Premises
is materially affected by the condemnation, the rents payable hereunder by the
Tenant shall be reduced in proportion as the square footage of the leased area
so taken bears to the total square footage existing before such taking. In the
event of such partial taking, Landlord shall be entitled to any and all awards
and payments, except Tenant may assert a separate claim with the condemning
authority for the value of its property, for moving and relocation expenses, and
for other damage suffered by Tenant, if such claim does not reduce or adversely
affect the amount of Landlord's award.
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Landlord, to the extent possible, and to the extent of proceeds of any award,
shall promptly restore to a condition compared to its condition immediately
prior to such taking.
IX. ASSIGNMENT AND SUBLETTING
9.1. ASSIGNMENT AND SUBLETTING. Tenant shall not voluntarily or by
operation of law assign, transfer, mortgage or otherwise transfer or encumber or
sublet all or any part of Tenant's interest in this Lease or in the Premises
without Landlord's prior written consent, which consent shall not be
unreasonably withheld and shall be delivered not less than ten (10) days
following Tenant's written request. Failure of Landlord to respond within ten
(10) days shall be deemed Landlord's consent. Landlord reserves the right to
refuse to give such consent unless Tenant remains fully liable during the
unexpired term of this Lease. The consent by Landlord to any assignment or
subletting shall not constitute a waiver of the requirement to obtain Landlord's
consent to subsequent assignments or sublettings. Each assignee shall, by taking
possession of the Premises, be deemed to have expressly assumed all obligations
of Tenant under this Lease and shall remain jointly and severally liable with
Tenant for the fully and timely performance of this Lease. Notwithstanding the
foregoing, Tenant shall have the right, without attaining Landlord's consent,
but with at least twenty (20) days prior notice to Landlord, to assign this
Lease to any entity which controls, is controlled by or is under common control
with Tenant, or to any entity which acquires all or substantially all of the
assets of Tenant. Upon any such assignment Tenant shall no longer be liable
under this Lease if the assignee has a net worth at least equal to the greater
of (i) the net worth of the Tenant as of the date of this Lease, or the net
worth of the Tenant on the date of such assignment. Tenant shall provide
evidence of the net worth of the Tenant and the proposed assignee as of the time
of proposed assignment in the notice to Landlord required hereunder.
In the event Tenant assigns this Lease or sublets the Premises,
such that Tenant receives rent in excess of the amount required to be paid by
Tenant to Landlord pursuant to the terms of this Lease, 50% of the net excess
rent received by Tenant during the initial five year term of this Lease shall be
paid to Landlord within ten (10) days of receipt by Tenant, and thereafter, 100%
of the net excess rent shall be paid to Landlord within ten (10) days of receipt
by Tenant.
9.2. ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. In the
event of any permitted assignment or sublease, Landlord shall not be liable for
any prepaid rents or security deposit paid by such sublessee to such sublessor
or for any other prior defaults or breaches of such sublessor under such
sublease. No sublessee shall further assign or sublet all or any part of the
Premises without Landlord's prior written consent.
9.3. TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.
(a) Regardless of Landlord's consent, any assignment or
subletting shall not be effective without the express written assumption by such
assignee or sublessee of the obligations of Tenant under this Lease, or releases
Tenant of any obligations hereunder.
(b) Except as otherwise set forth herein, neither a delay in the
approval or disapproval of such assignment nor the acceptance of any rent or
performance shall constitute a waiver or estoppel of Landlord's right to
exercise its remedies for the default or breach by Tenant of any of the terms,
covenants or conditions of this Lease.
(c) The consent of Landlord to any assignment or subletting shall
not constitute a consent to an, subsequent assignment or subletting by Tenant or
to any subsequent or successive assignment or subletting by the sublessee.
(d) In the event of any default or breach of Tenant's obligations
under this Lease, Landlord may proceed directly against Tenant any guarantors or
anyone else responsible for the performance of the Tenant's obligations under
this Lease, including the sublessee, without first exhausting Landlord's
remedies against any other person or entity responsible therefor to Landlord, or
any security held by Landlord or Tenant.
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(e) Each request for consent to an assignment or subletting shall
be in writing, accompanied by information relevant to Landlord's determination
as to the financial and operational responsibility and appropriateness of the
proposed assignee or sublessee, including but not limited to the intended use
and/or required modification of the Premises, if any. Tenant agrees to provide
Landlord with such other or additional information and/or documentation as may
be reasonably requested by Landlord.
(f) Any assignee of, or sublessee under, this Lease shall, by
reason of accepting such assignment or entering into such sublease, be deemed,
for the benefit of Landlord, to have assumed and agreed to conform and comply
with each and every term, covenant, condition and obligation herein to be
observed or performed by Tenant during the term of said assignment or sublease,
other than such obligations as are contrary to or inconsistent with provisions
of an assignment or sublease to which Landlord has specifically consented in
writing.
X. DEFAULT
10.1. EVENTS OF DEFAULT. Time is of the essence of this Lease. The
occurrence of any of the following events shall constitute an Event of Default
of this Lease by Tenant:
(a) Tenant fails to pay any installment of rent within five (5)
days of receipt by Tenant of a written demand therefor from Landlord, together
with a late payment fee equal to 5% of the rent due with respect to any rent due
concerning which Landlord gave the requisite 5-day notice of nonpayment after
the third such notice of non-payment in any calendar year;
(b) Tenant fails to pay any other sum payable under this Lease
within five (5) days after written demand therefor is delivered to Tenant;
(c) The default by Tenant in the performance of any of Tenant's
covenants, agreements or obligations hereunder (excluding a default in the
payment of rent or other monies due) which continues for (30) days after written
notice thereof is delivered to Tenant by Landlord unless the cure will take
longer than thirty (30) days and Tenant has begun the cure within said thirty
(30) days and Tenant pursues said cure with due diligence and said cure is
accomplished within a reasonable time from such notification;
(d) A general assignment by Tenant for the benefit of creditors;
(e) The filing of a voluntary petition in bankruptcy by Tenant,
the filing of a voluntary petition for an arrangement, the filing of a voluntary
or involuntary petition for reorganization or the filing of an involuntary
petition by Tenant's creditors which remains undischarged for a period of sixty
(60) days;
(f) Tenant is the subject of a receivership, attachment or other
judicial seizure of substantially all of Tenant's assets on the Premises, such
attachment or other seizure remaining undismissed or undischarged for a period
of sixty (60) days after the levy thereon; or
(g) Tenant has not occupied the Premises during at least thirty
(30) continuous days during the prior twelve (12) months, or Landlord is unable
to reasonably procure fire and extended coverage insurance on the Premises due
to the vacancy of the Premises.
10.2. REMEDIES.
(a) During the continuation of an Event of Default, Landlord
shall have the right, at its election, to cancel and terminate this Lease and
remove all persons and property therefrom by summary proceedings; provided,
however, that any such termination of this Lease shall be at the option or
election of the
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Landlord only, and such termination and cancellation shall not take effect
unless the Landlord elects in writing that it shall.
(b) During the continuation of an Event of Default, in the event
the Tenant abandons the Premises, then without waiving its right to accelerate,
Landlord shall have the right to re-lease the Premises, or portions thereof, for
the Tenant's account, for such periods of time and at such rentals, for such use
and upon such covenants and conditions as Landlord may reasonably elect,
applying the net rentals or avails of such letting first to the payment of
Landlord's expenses in dispossessing the Tenant and the costs or expenses of
making such reasonable repairs in the Premises as may be necessary in order to
enable the Landlord to release the same, and to the payment of any brokerage
commissions or other necessary expenses of the Landlord in connection with such
releasing, and the balance, shall be applied by the Landlord from time to time,
but in any event no less than once a month, on account of the payment due or
payable, the Tenant hereunder, if any, with the right reserved to the Landlord
to bring such action or proceedings for the recovery of any deficits remaining
unpaid as it may deem advisable from time to time, without being obliged to
await the end of the term hereof for a final determination of the Tenant's
account.
The commencement or maintenance of any one or more actions shall
not bar the Landlord from bringing other or subsequent actions for further
accruals pursuant to the provisions of this paragraph. Any balance remaining,
however, after full payment and liquidation of the Landlord's accounts as
aforesaid, shall be paid to the Tenant from time to time with the right reserved
to the Landlord at any time to give notice in writing to the Tenant of
Landlord's election to cancel and terminate this Lease and all of the Tenant's
obligations hereunder, and upon the giving of such notice and the simultaneous
payment by Landlord to Tenant of any credit balance in Tenant's favor that may
at the time be owing, it shall constitute a final and effective cancellation and
termination of this Lease and the obligations hereof on the part of either party
to the other.
(c) In the event of the termination of this Lease by Landlord
because of Tenant's default, Landlord shall, notwithstanding any other
provisions of this Lease, be entitled to recover from Tenant as damages and not
as a penalty, an amount equal to all amounts reasonably incurred by Landlord in
recovering possession and leasing the Premises (and reasonable renovations or
repairs to same in order to lease the Premises), including, without limitation,
all broker's fees and commissions.
(d) Landlord may also pursue such other remedies as may be
allowed by law or equity, and all such rights and remedies, whether expressly
stated above or whether available at law or in equity, shall be deemed separate
and cumulative and no one remedy shall be deemed to be exclusive of any such
other remedy.
(e) Notwithstanding anything to the contrary herein, it is agreed
that wherever it is provided in this Section that this Lease shall terminate,
the same shall be deemed and construed to mean that such termination shall be at
the option or election of Landlord only, and that such termination and
cancellation shall not take effect unless Landlord elects in writing that it
shall.
(f) Tenant covenants and agrees that Tenant will pay in addition
to the rents and other sums agreed to be paid hereunder, all reasonable sums and
expenses incurred by Landlord in enforcing, defending or interpreting its rights
hereunder, including without limitation, all reasonable advertising and leasing
fees, all court costs, all reasonable attorneys' and paralegals' fees (whether
incurred out of court, at trial, on appeal, or in bankruptcy or administrative
proceedings), all reasonable collection costs and fees charged by third parties
in connection with Landlord's enforcement, defense or interpretation of its
rights hereunder.
(g) Tenant acknowledges and agrees that if Tenant defaults in the
payment of any money due to Landlord under the terms of this Lease, then from
and after the date of such default until such amount has been paid, all sums due
to Landlord hereunder shall bear interest at 15% per annum. In addition, if
Tenant fails to pay any taxes, assessments, or any other payments required to be
paid by Tenant hereunder (other than amounts payable as rents), Landlord may, on
behalf of Tenant, make any such payment or payments, and Tenant covenants
thereupon to reimburse and pay Landlord as additional rent within ten (10) days
of Landlord's demand therefor,
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any amount so paid and expended, with interest thereon at 15% per annum from the
date of the payment made by Landlord until such amount is paid by Tenant to
Landlord.
(h) Nothing contained in this Lease shall limit or prejudice the
right of Landlord to prove for and obtain, in proceedings for the termination of
this Lease by reason of bankruptcy or insolvency, an amount equal to the maximum
allowed by any statute or rule of law in effect at the time when, and governing
the proceedings in which, the damages are to be proved, whether or not the
amount be greater, equal to, or less than the amount of the loss or damages
referred to above.
(i) If Tenant fails to pay any taxes, assessments, insurance
premiums or any other payments required to be made hereunder or to any third
party holder of a secured interest in Tenant's leasehold or leasehold
improvements or to perform any of its obligations herein, then, in addition to
any other remedies available to Landlord, Landlord may, on behalf of Tenant
(without any obligation to do so), make any such payment or payments, or perform
such acts on Tenant's behalf, and Tenant covenants thereupon to reimburse and
pay Landlord any amount so paid and expended (together with interest thereon at
15% per annum), within ten (10) days of Landlord's demand therefore.
XI. SURRENDER OF PREMISES
11.1. SURRENDER OF POSSESSION. Upon the expiration or earlier
termination of this Lease and subject to the terms and conditions hereof, Tenant
shall surrender the Premises to Landlord in as good order and condition as the
same are at the Commencement Date of this Lease or hereafter improved by
Landlord or Tenant, reasonable wear and tear excepted. Tenant shall, without
expense to Landlord, remove from the Premises all debris, rubbish and property
which Tenant has the right to remove from the Premises under the terms of this
Lease. Tenant shall leave the Premises in "broom clean" condition.
XII. MISCELLANEOUS
12.1. TITLE AND QUIET ENJOYMENT. Landlord warrants and represents to
Tenant that as of the Commencement Date it has good title to the Premises, free
and clear of all other possessory claims or interests and the Premises. Landlord
agrees that Tenant, upon paying the rent and other sums payable by Tenant under
this Lease and performing the other obligations of Tenant as set forth in this
Lease, shall quietly have, hold and enjoy the Premises during the term hereof.
12.2. NO WAIVER. The failure of Landlord or Tenant to seek redress for
a breach of this Lease or to insist upon the strict performance of any covenant
or condition of this Lease shall not be deemed a waiver of such breach or of any
future similar breach, and the waiver by Landlord or Tenant of any breach shall
not be deemed a waiver of any past, present or future breach of the same or any
other term, covenant or condition of this Lease.
12.3. NOTICES. Whenever any notice, approval, consent, request or
election is given or made pursuant to this Lease, it shall be deemed delivered
when it is in writing and delivered personally, via facsimile or overnight
courier, or deposited in the United States mail, postage prepaid, certified or
registered mail, return receipt requested, and addressed to the party at the
address set forth in the Basic Lease Provisions or such other address as stated
in any duly given notice hereunder. Any such notice if properly addressed and
sent shall be deemed given upon the earliest to occur of: i) receipt; (ii) one
day after confirmed facsimile transmission (where such notice is also sent by
ordinary mail the same day) or delivery to an overnight courier; or (iii) three
(3) days after deposit in certified or registered United States Mail in
accordance with this Section.
12.4. HOLDING OVER. Should Tenant continue to occupy the Premises or
any part thereof after the expiration or earlier termination of this Lease,
whether with or against the consent of Landlord, such tenancy shall be
month-to-month at a rent equal to 110% of the Basic Annual Rent in force and
effect for the last month of the term expired or terminated.
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12.5. ATTORNEYS' FEES AND COSTS. In the event it shall become necessary
for Landlord or Tenant at any time to institute or defend any legal action or
proceedings of any nature for the enforcement of, or as regards this Lease, or
any of the provisions hereof, or any of Landlord's or Tenant's statutory or
common law rights, or to employ an attorney therefor, the non-prevailing party
agrees to pay all court costs and Attorneys' Fees (as defined herein) of the
prevailing party.
The term "Attorneys' Fees" as used herein shall mean and include
all costs, fees and charges of any attorney, legal assistant and paralegal, and
shall include both outside counsel retained by Landlord or Tenant and in-house
counsel for Landlord or Tenant or their respective affiliates and shall include,
without limitation, expert witness payments and other court costs whether or not
incurred in any judicial, bankruptcy or administrative proceeding or any appeal
therefrom.
12.6. CONSTRUCTION. All parties hereto have been represented by
separate legal counsel. Thus, in all cases, the language herein shall be
construed simply and in accordance with its fair meaning and not strictly for or
against a party, regardless of which party prepared or caused the preparation of
this Lease.
12.7. SUCCESSION. This Lease shall be binding upon and shall inure to
the benefit of the respective heirs, personal representatives, successors and
permitted assigns of the parties.
12.8. SEVERABILITY. If any term or provision of this Lease shall be
determined by a Court of competent jurisdiction to be invalid or unenforceable,
the remainder of this Lease shall not be affected thereby and each term and
provision of this Lease shall be valid and enforceable to the fullest extent
permitted by law. It is the intention of the parties that if any provision in
this Lease is capable of two constructions, then the provision shall be
interpreted to have the meaning which renders it valid.
12.9. FORCE MAJEURE. Any prevention, delay or stoppage due to strikes,
lockouts, labor disputes, court orders, acts of God, inability to obtain labor
or materials or reasonable substitutes thereof, government restrictions,
regulations or controls, hostile government action, civil commotion, fire or
other casualty and other causes beyond the reasonable control of the party
obligated to perform shall excuse the performance by such party for a period
equal to any such prevention, delay or stoppage.
12.10. RECORDING. Neither party may record this Lease or a memorandum of
this Lease without the prior written consent of the other party.
12.11. ARTICLE HEADING. The article headings, title and captions used in
this Lease are for convenience only and are not part of this Lease.
12.12. ENTIRE AGREEMENT. This Lease, the exhibits attached hereto and
the documents referred to herein, which are hereby incorporated herein, contains
the entire agreement between the parties as of the date of this Lease with
respect to the lease of the Premises, and the execution hereof has not been
induced by either party or any agent of either party, or by representations,
promises, and undertakings not expressed herein. There are no collateral
agreements, stipulations, covenants, promises, inducements or undertakings
whatsoever between the parties concerning the subject matter of this Lease which
are not expressly contained herein.
12.13. NO BROKERS. Each party represents and warrants to the other party
that no brokers, investment bankers or finders have been involved in the
negotiation or execution of this Lease and no fees or other obligations are due
and owing to any such person or firm.
12.14. RENT DEFINED. All monetary obligations of Tenant to Landlord
under the terms of this Lease are deemed to be rent.
12.15. CUMULATIVE REMEDIES. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
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12.16. CHOICE OF LAW. This Lease shall be governed by the laws of the
State in which the Premises are located. Any litigation between the parties
hereto concerning this Lease shall be initiated in the district court in the
county in which the Premises are located.
12.17. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.
(a) SUBORDINATION. Subject to the mortgagee, lender or other
benefitted party agreeing in writing that as long as Tenant performs its
obligations under the Lease, Tenant's rights hereunder shall be unaffected and
its possession and use of the Premises undisturbed and no foreclosure, deed
given in lieu of foreclosure, or sale under the Security Device and no steps or
procedures taken under the Security Device shall affect Tenant's rights under
the Lease, this Lease and any option granted hereby shall be automatically
subject and subordinate to any mortgage, deed of trust, or other hypothecation
or security device (collectively, "Security Device"), now or hereafter placed by
Landlord upon the real property of which the Premises are a part, to any and all
advances made on the security thereof, and to all renewals, modifications,
consolidations, replacements and extensions thereof.
(b) ATTORNMENT. Tenant agrees to attorn to a lender or any other
party who acquires ownership of the Premises by reason of a foreclosure of a
Security Device, and that in the event of such foreclosure, such new owner shall
not: (i) be liable for any act or omission of any prior landlord or with respect
to events occurring prior to acquisition of ownership; (ii) be subject to any
offsets or defenses which Tenant might have against any prior landlord; or (iii)
be bound by prepayment of more than one (1) month's rent.
(c) SELF-EXECUTING. The agreements contained in this Paragraph
12.17 shall be effective without the execution of any further documents;
provided, however, that, upon written request from Landlord or a lender in
connection with a sale, financing or refinancing of the Premises, Tenant and
Landlord shall execute such further writings as may be reasonably required to
separately document any such subordination or attornment as is provided for
herein.
(d) TENANT'S FINANCIAL STATEMENTS. If Landlord desires to
finance, refinance, or sell the Premises, Tenant and all Guarantors of Tenant's
performance hereunder, shall, to the extent not publicly available, deliver to
any potential lender or potential purchaser designated by Landlord such
financial statements of Tenant and such Guarantors (not to exceed the last three
years) as may be reasonably required by such lender or purchaser provided that
each such lender or purchaser execute a written agreement to hold such
information in confidence and to use such information only for the purposes
herein set forth.
12.18. SECURITY MEASURES. Tenant hereby acknowledges that the rental
payable to Landlord hereunder does not include the cost of guard or alarm
service or other security measures, and that Landlord shall have no obligation
whatsoever to provide same, Tenant assumes all responsibility for the security
of the Premises, Tenant, its agents and invitees and their property from the
acts of third parties.
12.19. RESERVATIONS. Landlord reserves to itself the right, from time to
time, to grant, without the consent or joinder of Tenant, such easements, rights
and dedications that Landlord deems necessary, and to cause the recordation of
parcel maps and restrictions, so long as such easements, rights, dedications,
maps and restrictions do not interfere with the use of the Premises by Tenant.
Tenant agrees to sign any documents reasonably requested by Landlord to
effectuate any such easements, rights, dedications, maps or restrictions.
12.20. LANDLORD'S LIABILITY. The term "Landlord" shall mean the owner or
owners at the time in question of the fee title to the Premises. In the event of
a transfer of Landlord's title or interest in the Premises of this Lease, the
prior Landlord shall be relieved of all liability with respect to the
obligations and/or covenant under this Lease thereafter to be performed by
Landlord; provided, however, nothing contained herein shall be construed to
relieve Landlord of any obligation, covenant or liability that existed as of the
time of any such transfer.
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12.21. AMENDMENTS. This Lease may be modified only in writing, signed by
the parties in interest at the time of the modification. The parties shall amend
this Lease from time to time to reflect any adjustments that are made in
accordance with this Lease to the base rent or other rent payable under this
Lease. As long as they do not change Tenant's rights or obligations hereunder,
Tenant agrees to make such reasonable non-monetary modifications to this Lease
as may be reasonably required by an institutional, insurance company, or pension
plan lender in connection with the obtaining of normal financing or refinancing
of the property of which the Premises are a part.
12.22. LIMITATION ON LANDLORD LIABILITY. The term "Landlord" as used in
this Lease shall mean only the owner or the Mortgagee or its trustees, as the
case may be, then in possession of the Premises so that in the event of any
transfer by Landlord of its interest in the Premises, the Landlord in possession
immediately prior to such transfer shall be, and hereby is, entirely released
and discharged from all covenants, obligations and liabilities of Landlord under
this Lease accruing after such transfer. In consideration of the benefits
accruing hereunder, Tenant, for itself, its successors and assigns, covenants an
agrees that, in the event of any actual or alleged failure, breach or default
hereunder by the Landlord, and notwithstanding anything to the contrary
contained elsewhere in this Lease, the remedies of Tenant under this Lease shall
be solely and exclusively limited to Landlord's interest in the Premises, and
the rents, issues and profits thereof.
12.23 AUTHORIZATION OF LANDLORD. Landlord has full authority to enter
into and carry out the terms of this Lease. Without limiting the foregoing, the
Landlord represents that Landlord's entering into this Lease and performing its
obligations has been duly approved in accordance with Landlord's Operating
Agreement and all other necessary procedures. The undersigned member of the
Landlord has been duly authorized by the Landlord to execute this Lease.
IN WITNESS WHEREOF, Landlord and Tenant have signed this Lease as of the
day and year first above written.
LANDLORD: TENANT:
JEA PROPERTY, LLC, DYNAMIC MATERIALS CORPORATION,
a Colorado limited liability company a Delaware corporation
By: /S/ XXXXXXX X. XXXXXXX By: /S/ XXXXXX XXXXXXX
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Xxxxxxx X. Xxxxxxx, Managing Member Xxxxxx Xxxxxxx, President
