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EXHIBIT 10.18
LEASE BETWEEN
BTC DEVELOPMENT, LLC
AND
CHAPARRAL NETWORK STORAGE, INC.
Current as of September 1, 1999
2
TABLE OF CONTENTS
Page
SECTION 1 PURPOSE....................................................1
SECTION 2 TERM.......................................................1
SECTION 3 COMPLETION OF THE PREMISES.................................2
SECTION 4 RENT.......................................................2
SECTION 5 TAXES AND OPERATING COST ADJUSTMENT FORMULA................4
SECTION 6 HOLDING OVER...............................................7
SECTION 7 BUILDING SERVICES..........................................7
SECTION 8 CONDITION OF PREMISES......................................8
SECTION 9 USE OF LEASED PREMISES.....................................9
SECTION 10 COMPLIANCE WITH LAW.......................................10
SECTION 11 ALTERATIONS AND REPAIRS...................................10
SECTION 12 ABANDONMENT...............................................11
SECTION 13 ASSIGNMENT AND SUBLETTING.................................11
SECTION 14 SIGNS AND ADVERTISING.....................................12
SECTION 15 DAMAGE TO PROPERTY, INJURY TO PERSONS.....................12
SECTION 16 TENANT'S INSURANCE........................................13
SECTION 17 DAMAGE OR DESTRUCTION.....................................14
SECTION 18 ENTRY BY LANDLORD.........................................15
SECTION 19 DEFAULT BY TENANT.........................................15
SECTION 20 TAXES.....................................................18
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Page
SECTION 21 EMINENT DOMAIN..............................................19
SECTION 22 SUBORDINATION TO MORTGAGES AND DEEDS OF TRUST...............19
SECTION 23 WAIVER......................................................20
SECTION 24 SUBROGATION.................................................20
SECTION 25 PLATS AND RIDERS............................................21
SECTION 26 SALE BY LANDLORD............................................21
SECTION 27 RIGHT OF LANDLORD TO PERFORM................................21
SECTION 28 ATTORNEY'S FEES.............................................21
SECTION 29 ESTOPPEL CERTIFICATE........................................22
SECTION 30 NOTICE......................................................22
SECTION 31 RIGHTS RESERVED.............................................22
SECTION 32 REAL ESTATE BROKER..........................................23
SECTION 33 MISCELLANEOUS PROVISIONS....................................23
SECTION 34 SUCCESSORS AND ASSIGNS......................................24
SECTION 35 QUIET ENJOYMENT.............................................24
SECTION 36 RECORDING...................................................24
SECTION 37 RELIANCE BY LANDLORD........................................25
SECTION 38 OPTION TO EXTEND............................................25
SECTION 39 SECURITY DEPOSIT............................................25
SECTION 40 WORK LETTERS................................................25
SECTION 41 FIRST RIGHT OF REFUSAL ON ADDITIONAL SPACE..................26
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LEASE
THIS LEASE made this 1st day of September, 1999, between Chaparral Network
Storage, Inc., a Delaware Corporation ("Tenant"), and BTC Development, LLC
"Landlord").
WITNESSETH:
DEMISE
Landlord does hereby lease to Tenant and Tenant hereby leases from
Landlord an approximate 20,000 rentable square feet (the "Premises," or,
alternatively, the "Leased Premises") Dry Creek Corporate Center (the
"Building"), which Building is situated on land described as 0000 Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx, Xxxxxxxx 00000 (the "Property"), together with a
non-exclusive right, subject to the provisions of this Lease, to use all
appurtenances thereto, including, but not limited to, any plazas, common areas,
parking lots, walks, ways or other areas in the Building or on the Property
designated by Landlord for the exclusive or non-exclusive use of the tenants of
the Building.
The Lease is upon and subject to the terms, conditions, and covenants
set forth below and Tenant covenants as a material part of the consideration for
this Lease to keep and perform each and all of the terms, conditions, and
covenants by it to be kept and performed and that this Lease is made upon the
condition of such performance.
SECTION 1
PURPOSE
1.1 Use of Premises. The Premises are to be used for office,
engineering labs, product development, shipping, receiving, warehousing and
manufacturing and related office functions, provided that such uses comply with
all zoning and use restrictions, and for no other purpose without the prior
written consent of Landlord.
SECTION 2
TERM
2.1 Primary Term. The Term of this Lease shall be for a period of sixty
(60) months. Lease commencement, (Commencement Date) will then take place on
March 15, 2000, and on March 31, 2005 ("The Primary Lease Term"). The Primary
Lease Term will commence upon receipt of a Certificate of Occupancy for the
Premises.
(a) Should Tenant, through the actions of Tenant, it's
employees, agents, contractors, subcontractors, guests, licensees, or invitees,
impede, delay or in some manner alter the aforementioned schedule for buildout,
thus causing the estimated occupancy date to move to a future date, then the
Primary Lease Term will commence on the estimated date specified in Section 2 of
herein lease, even though a Certificate of Occupancy has not been received from
the Building Department of the Boulder County.
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SECTION 3
COMPLETION OF THE PREMISES
(See Space Plan. Addendum "A") Tenant shall have a Build Out Allowance
of $440,000.00 or $22.00 per useable square foot. The Build Out Allowance
includes all costs incurred in designing, permitting, construction, and
installation of Tenant Improvements. All costs in excess of allowance are to be
paid by Tenant. Golden Triangle Construction (GTC) will be the General
Contractor for any initial Tenant Improvement work done to the Premises. GTC
will generally request 3 competitive bids for all subcontract work to be
performed, and will provide to Tenant a breakdown of all costs prior to the
commencement of any work. All costs in excess of Build Out Allowance will be
added to Lease Rate and amortized at ten percent (10%) over the term of the
Lease.
SECTION 4
RENT
4.1 Base Rent. Tenant agrees to pay Landlord during the full Primary
Lease Term the sum of $1,144,458.33, payable in advance in equal monthly
installments of $18,916.66 for the Premises: The first full monthly installment
of Base Rent shall be payable on the Commencement Date and each succeeding
monthly installment shall be due and payable on or before the first day of each
and every successive calendar month thereafter during the Primary Lease Term.
The exact square footage of the Premises will be measured "as-built" and Rent
adjusted accordingly.
4.2 No Offsets. The Base Rent and all other sums or changes required by
this Lease to be paid by Tenant to Landlord, (all of which are sometimes
collectively referred to as "Rent") shall be paid to Landlord without deduction
or offset, in lawful money of the United States of America, at the office of
X'Xxxxxx Development, LLC, 000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx
00000 or to such other person or at such other place as Landlord may from time
to time designate in writing.
4.3 Interest on Late Payments. Any Rent or other amount due from Tenant
to Landlord under this Lease not paid within seven (7) days of when due shall
bear interest from the date due, computed on a daily basis, until the date paid,
at the rate of four percent (4%) over the "Prime Rate" per month, as announced
by Norwest Bank of Colorado, NA from time to time, but the payment of the
interest shall not excuse nor cure any default by Tenant under this Lease.
4.4 Late Payment Charge. Further, and notwithstanding the interest
charges provided for in the preceding Subsection 4.3, if any Rent or other
amounts owing hereunder are not paid within seven (7) days of when due, Landlord
and Tenant agree that Landlord will incur additional administrative and
financial expenses and inconveniences, the amount of which will be difficult if
not impossible to determine. Accordingly, Tenant shall pay to Landlord an
additional one-time late charge for any late monthly payment in the amount of
$500.00.
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4.5 Inflation Index. The Base Rent shall be further increased annually
on each March 15 commencing on March 15, 2001, by an amount determined as
follows:
(a) As promptly as practical after January of every year
beginning January 2001, Landlord shall compute the increase, if any, in the cost
of living for the preceding calendar year, based upon the "All Items and Major
Group Figures for Urban Wage Earners and Clerical Workers, Denver, Colorado" all
items, as published by the Bureau of Labor Statistics United States Department
of Labor, based on all items for the period (1982-84 = 100). This Consumer Price
Index shall hereinafter be referred to as the "Index Figure."
(b) The Index Figure indicated in the column for All Cities
entitled "all items," for the month of January shall be the "Base Index Figure,"
and the corresponding Index Figure for the month of January for every year
thereafter shall be the "Current Index Figure."
(c) The Current Index Figure shall be divided by the Base
Index Figure and the resulting product, if greater than one, shall be multiplied
times the previous year's Base Rent to obtain the new increased Base Rent. If
the resulting product is equal to one or less than one, the new year's Base Rent
shall be the previous year's Base Rent.
(d) Landlord shall, within a reasonable time after obtaining
appropriate data necessary for computing the increase, give Tenant notice of the
increase so determined, which notification shall include computation of the
amount due to Landlord by Tenant.
(e) If publication of the Consumer Price Index for All Urban
Consumers shall be discontinued, the parties shall accept a comparable index
published by a reliable government agency which measures the purchasing power of
the consumer dollar.
4.6 Payment of Rent Increase. All determinations by Landlord pursuant
to Section 4.5 shall be conclusive, unless in error. Until Tenant is advised of
the adjustments in the Base Rent, if any, pursuant to the provisions of this
paragraph 4.6, Tenant's monthly Base Rent shall continue to be paid at the then
current rate (including all prior rental adjustments). Tenant shall commence
payment to Landlord of the monthly installment of Base Rent on the basis of the
adjustments so determined beginning on the first day of the month following the
month in which Landlord advises Tenant of the increased Base Rent. In addition,
Tenant shall pay to Landlord on the date required for the first payment of Base
Rent as adjusted, the difference, if any, between the monthly installment of
Base Rent so adjusted and the monthly installments of Base Rent actually paid
during the Base Rent period to make up for the increased Base Rent between the
first month that a rental Increase is due and the first payment after notice of
the increase, provided that Landlord notifies Tenant of Rental Rate Adjustment
within forty-five (45) days of effective date of said rental rate adjustment.
Notwithstanding any other provisions of the Lease, if this Lease is terminated
prior to the end of the calendar year, for any reason, Tenant's obligations to
pay rental adjustments for that portion of any calendar year which has elapsed
prior to termination shall survive the termination of the Lease, whether by
expiration or otherwise.
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SECTION 5
TAXES AND OPERATING COST ADJUSTMENT FORMULA
5.1 Additional Rent. In addition to Base Rent, Tenant shall reimburse
Landlord for the Taxes and Operating Costs of the Building in the manner, at the
times, and in the amounts set forth in this Section 5.
5.2 (a) Taxes. The Rent payable by Tenant shall be increased by the
amount of "Tenant's Proportional Share" of the Taxes on the Property. Tenant's
Proportional Share shall be 34% based upon Tenant's initial occupancy of 20,000
square feet out of a total building rental space of 60,000 square feet. Tenant's
Proportional Share shall be subject to confirmation and/or adjustment based on
"as-built" measurements of the Premises and Building. In determining the amount
of Taxes for any calendar year, the amount of special assessments to be included
shall be limited to the amount of the installment (plus any interest payable
thereon) of such special assessment which would have been required to have been
paid during such calendar year if Landlord had elected to have the special
assessment paid over the maximum period of time permitted by law, if the
election is available to Landlord. All reference to Taxes "for" and "billed for"
a particular calendar year shall be deemed to refer to Taxes levied, assessed,
billed or otherwise imposed for such calendar year, without regard to the dates
when any such Taxes are due and payable.
(b) Definition. As used in this Lease, the term "Taxes" means any
and all general and special taxes and impositions of every kind and nature
whatsoever levied, assessed, or imposed upon, or with respect to, the Premises,
any leasehold improvements, fixtures, installations, additions and equipment,
whether owned by Landlord or Tenant, or either because of or in connection with
Landlord's ownership, leasing and operation of the Building and the Property,
including, without limitation, real estate taxes, personal property taxes,
general or special assessments, and duties or levies charged or levied upon or
assessed against the Building and the Property and personal property, or any
other tax (however described) on account of rental received for use and
occupancy of any or all of the Building and the Property, whether any such taxes
are imposed by the United States, the State of Colorado, the County of Boulder,
or any local governmental municipality, authority, or agency or any political
subdivision. Taxes shall not include any net income, capital stock, succession,
transfer, franchise, gift, estate or inheritance taxes.
(c) Payment. Commencing with the first calendar month of this
Lease, Tenant shall pay to Landlord on the first day of each calendar month
until the next upward adjustment date (which period between adjustment dates is
herein called a "Tax Deposit Year") one-twelfth of Tenant's Proportional Share
of the estimated amount of the Taxes. Amounts paid under this Subsection 5.2(c)
in any Tax Deposit Year shall be reconciled with amounts actually billed to
Landlord for the same Tax Deposit Year, and provided there is any surplus
remaining after the credit to Tenant and provided Tenant shall not then be in
default under any of the provisions of this Lease, Landlord shall, at Landlord's
option, either refund the amount of the surplus to Tenant within thirty (30)
days following the end of the Tax Deposit Year or apply the surplus amount
against any other amounts then due from Tenant to Landlord, including Rent. If
upon the
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reconciliation there is any deficiency in the amount of Taxes paid by Tenant,
Landlord shall xxxx Tenant and Tenant shall pay the additional amount within
thirty (30) days following Tenant's receipt of Landlord's reconciliation report.
5.3 (a) Inclusion in Operating Costs. Tenant shall pay its Proportional
Share of the Operating Costs for the Property. As used in this Lease, the term
"Operating Costs" means any and all expenses, costs and disbursements (other
than Taxes and other than the exclusion described in Section (b) below) of every
kind and nature whatsoever, which are paid or accrued by Landlord in connection
with the management, maintenance, operation or repair of the Building,
including, without limitation, not to exceed $2.40 per square foot in the first
full year of operation:
(i) Costs of supplies;
(ii) Costs incurred in connection with obtaining and
providing energy for the Building, including, but not limited to, costs of
propane, butane, natural gas, steam, electricity, fuel oils, coal or any other
energy sources, except if separately metered to the Leased Premises, in which
case Tenant shall pay 100% of its metered amount and it's portion of any common
metered utility;
(iii) Costs of water and sanitary sewer and storm
drainage services;
(iv) Costs of general maintenance and repairs,
including costs of heating, ventilation and air conditioning systems and the
cost of exterior building and roof maintenance and repairs;
(v) Cost of insurance;
(vi) Costs of maintenance and replacement of
landscaping;
(vii) Labor costs associated with operation,
maintenance, and management of the Building; and management fees.
(b) Exclusion from Operating Costs. "Operating Costs" shall not
include:
(i) Insurance deductibles and the costs of repairs or
other work occasioned by fire, windstorm or other insured casualty to the extent
of insurance proceeds received;
(ii) Leasing commissions, advertising, advertising
expenses, Tenant finish allowances and other costs incurred in leasing space in
the Building;
(iii) Costs of repairs or building necessitated by
condemnation or necessitated by faulty or substandard initial construction;
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(iv) Any interest on borrowed money or debt
amortization, except as specifically set forth above;
(v) Depreciation on the Building;
(vi) Any settlement, payment or judgment incurred by
Landlord or the Building manager due to their willful misconduct or gross
negligence;
(vii) Cost of any damage to the Building caused
directly by Landlord's willful misconduct or gross negligence, as established by
a court of law, whether or not covered by insurance;
(viii) Cost of capital improvements (as defined under
the Internal Revenue Code) and structural repairs or reconstruction of any
portion of the Building;
(ix) Costs of providing utility lines to the Building
or repairing such lines if they break (but not if they are plugged by Tenant's
usage).
(c) Warranties. Tenant shall be entitled to reimbursement for
any amounts collected by Landlord under any manufacturer's warranty on any
systems or machinery used in the Building; provided that Tenant has previously
paid to Landlord the repair expense relating to Landlord's warranty claim.
(d) Payment. Beginning on the Commencement Date, Landlord
shall supply Tenant with written notice of Landlord's estimate of the Operating
Expenses that will be incurred or accrued during the current calendar year (the
"Deposit Year"). On or before the first day of each month during such Deposit
Year, Tenant shall pay to Landlord one-twelfth of Tenant's Proportional Share of
the estimated amount. If the monthly deposit amount is not determined in time
for Tenant to make the first payment on January 1 of the Deposit Year, then the
first monthly payment shall be due on the first day of the month immediately
following the date Landlord supplies Tenant with notice of the amount and the
first monthly payment(s) shall also include a payment equal to one-twelfth of
such additional sum multiplied by the number of calendar months which have
elapsed during the Deposit Year prior to the date Tenant makes its first
payment. If the total of the estimated payments made by Tenant during the
Deposit Year are less than Tenant's obligation under this Lease for Operating
Costs for the Deposit Year, then Tenant, within thirty (30) days of the billing
therefor, shall pay the deficiency to Landlord. If the total of the Tenant's
estimated payments for the Deposit Year exceed Tenant's obligation for excess
Operating Costs for such year, then the surplus shall be handled in the manner
provided in the second to last sentence of Section 5.2(c).
5.4 Audit and Adjustment Procedures.
(a) The annual determination and statement of Taxes and
Operating Costs shall be prepared in accordance with generally accepted
accounting principles. In the event of any dispute as to any Rent due under this
Lease, Tenant shall have the right to inspect Landlord's
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accounting records relative to Taxes and Operating Costs at the office in which
Landlord maintains its records during normal business hours at any time
following the furnishing by Landlord to Tenant of the statement. Any errors
shall be adjusted accordingly.
(b) If the Term of this Lease commences on any day other than
the first day of the month, or if the Term of this Lease ends on any day other
than the last day of the month, any payment due to Landlord by reason of an
increase in Taxes or Operating Costs shall be prorated on the basis by which the
number of days in such partial year bears to 365.
(c) All sums which Tenant is required to pay or discharge
pursuant to Section 5 of this Lease in addition to Base Rent, together with any
interest or other sums which may be added for late payment, shall constitute
"Rent".
SECTION 6
HOLDING OVER
6.1 Rent Increase. Should Tenant hold over after the termination of
this Lease, on account of a Tenant Event of Default which is not timely cured,
or if Tenant holds over at the expiration of this Lease for more than
one-hundred twenty (120) days after receipt of Landlord's written notice to
vacate, Tenant shall become a tenant from day-to-day upon each and all of the
terms herein provided as may be applicable to such a tenancy, and any such
tenancy shall not constitute an extension of this Lease; provided, however,
during the period as a tenant from day-to-day, Tenant shall pay Base Rent at
125% the rate payable for the month immediately preceding the date of
termination of this Lease and, in addition, Tenant shall reimburse Landlord for
all damages (consequential, as well as direct) sustained by it by reason of
Tenant's occupying the Premises past the termination date. Alternatively, unless
Landlord has provided Tenant with a notice to vacate not less than one-hundred
twenty (120) days prior to the expiration of this Lease, the retention of
possession past the termination date shall constitute a month-to-month tenancy
upon each and all of the terms of this lease as may be applicable to a
month-to-month tenancy except that Tenant shall be entitled to a one-hundred
twenty (120) day notice period prior to being required to vacate the Premises.
SECTION 7
BUILDING SERVICES
7.1 Interruption of Standard Services. Tenant agrees that Landlord
shall not be liable for failure to supply any heating, air conditioning,
janitorial services, electric current, or any other utility during any period
when Landlord uses reasonable diligence to restore or to supply such services or
utility. Landlord reserves the right to temporarily discontinue such services at
times as may be necessary by reason of accident, repairs, alterations, or
improvements, or whatever by reason of strikes, lockouts, riots, acts of God, or
any other happening or occurrence beyond the reasonable control of Landlord,
provided such discontinuance does not substantially interfere with Tenant's
business operations.
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7.2 Telephone. Tenant shall separately arrange with the applicable
local public authorities or utilities, as the case may be, for the furnishing of
and payment for all telephone services as may be required by Tenant in the use
of the Premises. Tenant shall directly pay for such telephone services,
including the establishment and connection thereof, at the rates charged for the
services by the authority or utility, and the failure of Tenant to obtain or to
continue to receive the services for any reason whatsoever shall not relieve
Tenant of any of its obligations under this Lease. Landlord shall supply
sufficient telephone lines into the Building for Tenant's connection.
7.3 Above-Standard Service Requirements. Landlord's original design
shall include HVAC equipment adequately sized for Tenant's needs. If Tenant
thereafter adds heat-generating machines or any equipment which cause the
temperature in the Premises, or any part, to exceed the temperatures that the
Building's air conditioning and other cooling systems would be able to maintain
in the Premises were it not for the heat-generating equipment then Landlord
reserves the right to install supplementary air conditioning units in the
Premises, and the cost, including the cost of installation and the cost of
operation and maintenance thereof, shall be paid by Tenant to Landlord upon
demand by Landlord. If Tenant requires electric current, water, or any other
energy in excess of that which is reasonably obtainable from existing electrical
outlets or water pipes, and which is, in Landlord's opinion, above normal for
use of the Premises, Tenant shall first procure the consent of Landlord, which
Landlord may not unreasonably refuse. If Landlord consents to such excess
electric, water, or other energy requirements, Tenant shall, on demand, pay all
costs of meter service and installation of facilities necessary to measure
and/or furnish such excess capacity. Tenant shall also pay the entire cost of
such additional electricity, water, or other energy used.
SECTION 8
CONDITION OF PREMISES
8.1 Acceptance Upon Possession. Tenant, by taking possession of the
Premises, shall be deemed to have agreed that the Premises were, as of the date
of taking possession, in good order, repair, and condition and satisfactorily
completed in accordance with Landlord's obligations under this Lease. No promise
of Landlord to alter, remodel, decorate, clean or improve the Premises, the
Building, or the Property and no representation or warranty, express or implied,
respecting the condition of the Premises, the Building, or the Property has been
made by Landlord to Tenant, unless the same is contained in this Lease, the Work
Agreement, the Plans or some other written agreement. This Lease does not grant
any rights to light or air over the Premises or the Property. Landlord warrants
that the Premises will be delivered to Tenant in good and workmanlike condition,
free from defects for a period of one (1) year at Landlord's sole cost and
expense (and not as an operating cost past through).
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SECTION 9
USE OF LEASED PREMISES
9.1 Use. The Leased Premises shall not be used other than for the
purpose set forth in Section 1 of this Lease. Tenant's use shall at all times
comply with all applicable laws, ordinances, regulations, or other governmental
ordinances in existence.
9.2 Hazardous Use. Tenant agrees that it will not keep, use, sell or
offer for sale in or upon the Leased Premises any article which may be
prohibited by any insurance policy in force from time to time covering the
Building. In the event Tenant's occupancy or conduct of business in or on the
Leased Premises, whether or not Landlord has consented to the same, results in
any increase in premiums for the insurance carried from time to time by Landlord
with respect to the Building, Tenant shall pay any such increase in premiums as
Rent within ten (10) days after bills for such additional premiums shall be
rendered by Landlord. Tenant shall promptly comply with all reasonable
requirements of the insurance authority or of any insurer now or hereafter in
effect relating to the Leased Premises.
9.3 No Waste. Tenant shall not commit, suffer, nor permit any waste,
damage, disfiguration, or injury to the Leased Premises or the Building's common
areas or the fixtures and equipment located in or on the Building, or permit or
suffer any overloading of the floors and shall not place any safes, heavy
business machinery, or other heavy things in the Premises other than as
specifically provided for in the Work Agreement and Plans, without first
obtaining the written consent of Landlord and, if required by Landlord, of
Landlord's architect, and shall not use or permit to be used by any part of the
Leased Premises for any dangerous, noxious, or offensive trade or business, and
shall not cause or permit any nuisance, noise, or action in, at, or on the
Leased Premises. Landlord shall not withhold its consent to Tenant's
installation of additional machinery and equipment as long as Tenant agrees to
make any modifications to the Premises which are necessary for the safe
installation and operation of said equipment or machinery.
9.4 Protection Against Insurance Cancellation. If any insurance policy
on the Building or any part thereof shall be canceled or if cancellation shall
be threatened, or if the coverage shall be reduced or be threatened to be
reduced, in any way by reason of the use of occupation of the Leased Premises or
any part thereof by Tenant, any assignee or subtenant of Tenant, or by anyone
permitted by Tenant to be upon the Leased Premises, and if Tenant fails to take
reasonable efforts to remedy the condition giving rise to the cancellation,
threatened cancellation, reduction, or threatened reduction of coverage within
forty-eight (48) hours after written notice or to complete the remedy within ten
(10) days after notice, Landlord may, at its option, enter upon the Leased
Premises and attempt to remedy the condition, and Tenant shall forthwith pay the
cost to Landlord as additional Rent. Landlord shall not be liable for any damage
or injury caused to any property of Tenant or of others located on the Leased
Premises as a result of such entry unless such damage or injury is a result of
Landlord's gross negligence.
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SECTION 10
COMPLIANCE WITH LAW
10.1 Compliance. Tenant shall not use the Premises or permit anything
to be done in or about the Premises which will in any way conflict with any law,
statute, ordinance, or governmental rule or regulation now in force or which may
hereafter be enacted or promulgated. Tenant shall, at its sole cost and expense,
promptly comply with all laws, statutes, ordinances, and governmental rules,
regulations, or requirements now in force or which may hereafter be in force,
and with the requirements of any board of fire underwriters or other similar
body now or hereafter constituted relating to or affecting the condition, use,
or occupancy of the Premises, excluding structural changes not related to or
affected by Tenant's improvements or acts.
SECTION 11
ALTERATIONS AND REPAIRS
11.1 Tenant to Maintain. Tenant shall, at its sole expense, keep the
Premises in good repair and tenantable condition during the Term of this Lease,
provided, however, that the Landlord warrants that the Premises shall be
delivered to Tenant in good and workmanlike condition, free from defects for the
first year of the Lease Term, at Landlord's sole cost and expense. Tenant shall
not, without the prior written consent of the Landlord, whose consent shall not
be unreasonably withheld so long as Tenant demonstrates financial assurance of
its ability to restore the Premises to original condition, make any alterations,
improvements, or additions to the Premises in excess of $25,000.00 per project,
including, but not limited to, partitions, wall coverings, floor coverings, and
special lighting or equipment installations. Prior to commencement of any
alterations, improvements, or additions, Tenant shall submit to Landlord a set
of fully detailed working drawings and specifications for the proposed
alteration, prepared by a licensed architect, or engineer, approved by the
Landlord. In particular, but not as a limitation, the working drawings must
fully detail changes to mechanical, wiring, electrical, lighting, plumbing, and
HVAC systems to landlord's satisfaction. Landlord may refuse to consent to the
alterations because of the inadequacy of the drawings and specifications. All
alterations, improvements, or additions, whether temporary or permanent in
character, made by Landlord or Tenant in or upon the Premises shall become
Landlord's property and shall remain upon the Premises at the termination of
this Lease by lapse of time or otherwise, without compensation to Tenant
(excepting only Tenant's movable office furniture, trade fixtures, manufacturing
equipment and machinery and office and professional equipment or other personal
property). Tenant shall promptly pay to Tenant's contractors, when due, the cost
of all work and of all decorating, and upon completion, deliver to Landlord, if
payment is made directly to Tenant's contractors, evidence of payment and
waivers of all liens for labor, services, or materials. Tenant shall defend and
hold Landlord, the Premises, the Building, and the Property harmless from all
costs, damages, liens for labor, services, or materials relating to the work,
and shall defend and hold Landlord harmless from all costs, damages, liens, and
expenses related to the work. If Landlord incurs any expenses in the removal of
trash or cleaning as a result of Tenant's contractor's work, then Tenant agrees
it shall reimburse Landlord within seven (7) days of billing.
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11.2 Protection Against Liens. At least five (5) days prior to the
commencement of any work on the Leased Premises in excess of $25,000.00, Tenant
shall notify Landlord of the names and addresses of the persons supplying labor
and materials for the proposed work so that Landlord may avail itself of the
provisions of statutes such as Section 38-22-105(2) of the Colorado Revised
Statutes (1973), or any successor statutory provision. During the progress of
any work on the Leased Premises, Landlord or its representatives shall have the
right to post and keep posted thereon notices such as those provided for by
Sections 38-22-105(2) (C.R.S. 1973) or to take any further action which Landlord
may deem to be proper for the protection of Landlord's interest in the Leased
Premises.
11.3 Condition on Surrender. Tenant shall, at the termination of this
Lease, surrender the Premises to Landlord in as good condition and repair as
reasonable and proper use will permit, loss by ordinary wear and tear, fire, and
other insured against casualty excepted.
11.4 Damage by Tenant. If any part of the Building or other
improvements become damaged or are destroyed through the negligence,
carelessness, or misuse of Tenant, its servants, agents, employees, or anyone
permitted by Tenant to be in the Building, or through Tenant or such parties,
which damage is not covered by applicable policies of insurance, then the cost
of necessary repairs, replacements, or alterations shall be borne by Tenant, who
shall, on demand, forthwith pay the same to Landlord as Rent.
SECTION 12
ABANDONMENT
12.1 Disposition of Personal Property. Tenant shall not vacate or
abandon the Premises at any time during the Lease Term, and if Tenant shall
abandon, vacate, or surrender (whether at the end of the stated Term or
otherwise) the Premises, or shall be dispossessed by process of law or otherwise
and Tenant shall thereafter cease paying its Rent, then any personal property
belonging to Tenant left on the Premises shall be deemed abandoned and may be
sold or otherwise disposed of by Landlord without any liability to Tenant
whatsoever. Tenant shall not at any time remove Landlord's property or any
fixtures constituting property of Landlord from the Premises. Any removal of
Landlord's property from the Premises by Tenant shall constitute a material
breach of this Lease and Landlord shall have the right to take all reasonable
steps to stop or prevent such breach without such actions constituting a
constructive eviction of Tenant.
SECTION 13
ASSIGNMENT AND SUBLETTING
13.1 Limitation on Assignment or Subletting. Tenant shall not assign
this Lease, or any interest therein, and shall not sublet the Premises, or any
part thereof, or any right or privilege appurtenant thereto, or shall not suffer
any other person to occupy or use the Premises, or any portion thereof, without
the written consent of Landlord, which consent may not be unreasonably withheld.
Neither this Lease nor any interest therein shall be assignable as to the
interest of Tenant by operation of law without the written consent of Landlord,
which consent may not be unreasonably withheld.
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13.2 Acceptance of Performance; No Waiver. If this Lease is assigned,
or if the Premises or any part are sublet or occupied by anybody other than
Tenant, Landlord may, upon default by Tenant, collect the rent from the
assignee, subtenant, or occupant and apply the net amount collected to the Rent.
Upon assignment pursuant to the terms of this section, Tenant shall be relieved
of further liability under this Lease as to the assigned premises. Consent by
Landlord to any one assignment or subletting shall not in any way be construed
as relieving Tenant from obtaining the Landlord's expressed written consent to
any further assignment or subletting.
13.3 Landlord to Approve Documents. All documents utilized by Tenant to
evidence any subletting or assignment to which Landlord has consented shall be
subject to prior approval by Landlord or its attorney. Tenant shall pay on
demand all Landlord's costs and expenses, including reasonable attorneys' fees,
incurred in determining whether or not to consent to any requested subletting or
assignment and in reviewing and approving such documentation which shall not
exceed $500.
SECTION 14
SIGNS AND ADVERTISING
Tenant shall not install, paint, display, inscribe, place, or affix any
sign, picture, advertisement, notice, lettering, or direction in the interior of
the Leased Premises which is visible from the outside of the Building, or on the
exterior of the Building without the prior written consent of Landlord unless
provided for in the Plans.
SECTION 15
DAMAGE TO PROPERTY, INJURY TO PERSONS
15.1 Damage by Tenant. Tenant agrees to pay for all damage to the
Building or the Premises, as well as all damage to tenants or occupants thereof
caused by Tenant's misuse or neglect of the Premises, its apparatus or
appurtenances, or caused by any licensee, contractor, agent, or employee of
Tenant. Notwithstanding the foregoing provisions, neither Landlord nor Tenant
shall be liable to one another for any loss, damage, or injury caused by its act
or neglect to the extent that the other party has recovered the amount of such
loss, damage, or injury from an insurer and the insurance company is bound by
this waiver of liability.
15.2 Tenant's Property. Particularly, but not in limitation of the
foregoing paragraph, all property belonging to Tenant, or any occupant of the
Premises, that is in the Building or the Premises, shall be there at the risk of
Tenant or other person only, and Landlord or its agents or employees (except in
the case of gross negligence of Landlord or its agents or employees) shall not
be liable for: (i) damage to or theft or misappropriation of such property; (ii)
any damage to property entrusted to Landlord, its agents, or employees, if any;
(iii) loss of or damage to any property by theft or otherwise, by any means
whatsoever; (iv) any injury or damage to persons or property resulting from
fire, explosion, falling plaster, steam, gas, electricity, snow, hail, water, or
rain which may leak from any part of the Building or from the pipes, appliances,
or plumbing works therein or from the roof, street, subsurface, or from any
other place, or resulting from
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dampness or any other cause whatsoever; or (v) interference with the light, air,
or other incorporeal hereditament. Tenant shall give prompt notice to Landlord
in case of fire or accidents in the Premises or in the Building or of observed
defects in the Building, its fixtures or equipment.
SECTION 16
TENANT'S INSURANCE
16.1 Insurance. Tenant shall, during the entire Term of this Lease, at
its sole cost and expense, obtain, maintain, and keep in full force and effect
the following types of insurance:
(a) All risk coverage insurance, including endorsements for
vandalism, malicious mischief, theft, sprinkler leakage, covering all of
Tenant's property, including, but not limited to, furniture, fittings,
equipment, installations, alterations, additions, partitions, fixtures, and
anything in the nature of a leasehold improvement in an amount equal to the full
replacement cost of such property without deduction for depreciation.
(b) Commercial general liability insurance, including bodily
injury and property damage, personal injury, contractual liability with respect
to all claims, demands, or actions by any person, firm, or corporation, in any
way arising from, related to, or connected with the conduct and operation of
Tenant's business in the Premises or Tenant's use of the Premises. Such policies
shall be written on a comprehensive basis, with limits not less than
$1,000,000.00, and such higher limits as Landlord or the mortgagees of Landlord
may require from time to time, but may not be unreasonably required.
(c) Any other form or forms of insurance as the mortgagees of
Landlord may reasonably require from time to time in form, in amounts and for
insurance risks against which a prudent tenant would protect itself.
16.2 Evidence. All policies shall be taken out with insurers acceptable
to Landlord and in form satisfactory from time to time to Landlord. Tenant
agrees that certificates of insurance or, if required by Landlord or the
mortgagees of Landlord, copies of each such insurance policy will be delivered
to Landlord as soon as practicable after the placing of the required insurance,
but in no event later than five (5) days after Tenant takes possession of all or
any part of the Leased Premises. All policies shall require that at least thirty
(30) days' prior written notice be delivered to Landlord by the insurer prior to
termination, cancellation, or material change in such insurance.
16.3 Proceeds. Tenant agrees that in the event of damage or destruction
to the leasehold improvements in the Leased Premises covered by insurance
required to be taken out by Tenant pursuant to this Section, Tenant shall use
the proceeds of the insurance for the purpose of building leasehold improvements
appropriate to the continuation of Tenant's business from the Premises. Landlord
shall have the right to review and approve the plans, which approval will not be
unreasonably withheld. In the event of damage or destruction of the Building
entitling the Landlord to terminate this Lease pursuant to Section 17, then, if
the Leased Premises have also been damaged, Tenant will pay to Landlord all of
its insurance proceeds relating to the leasehold
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improvements in the Leased Premises owned by Landlord pursuant to the terms of
the Lease, and if the Leased Premises have not been damaged, Tenant will deliver
to Landlord, in accordance with the provisions of this Lease, the leasehold
improvements and the Leased Premises.
SECTION 17
DAMAGE OR DESTRUCTION
17.1 Right to Terminate. If the Premises or the Building are damaged by
fire or other insured casualty, and the insurance proceeds have been made
available by the holder or holders of any mortgages or deeds of trust covering
the Building, the damage shall be repaired by and at the expense of Landlord to
the extent of such insurance proceeds available, provided such repairs can, in
Landlord's reasonable discretion, be completed within one hundred twenty (120)
days after the occurrence of such damage, without the payment of overtime or
other premiums. Until the repairs are completed, the Rent shall be abated in
proportion to the part of the Premises which is unusable by Tenant in the
conduct of its business. If repairs cannot, in Landlord's reasonable discretion,
be made within said one hundred twenty (120) day period, Landlord shall notify
Tenant within sixty (60) days of the date of occurrence of the damage as to
whether or not Landlord elects to make the repairs. If Landlord elects not to
make the repairs, then either party may, by written notice to the other, cancel
this Lease as of the date of the occurrence of the damage. Except as provided in
this Section 17, there shall be no abatement of Rent and no liability of
Landlord by reason of any injury, inconvenience, temporary limitation of access
or interference to or with Tenant's business or property arising from the making
of any necessary repairs, or any alterations or improvements in or to any
portion of the Building or the Premises, or in or to fixtures, appurtenances,
and equipment therein necessitated by the damage. Tenant understands that
Landlord will not carry insurance of any kind on Tenant's furniture and
furnishings or on any fixtures or equipment removable by Tenant under the
provision of this Lease, and that Landlord shall not be required to repair any
injury or damage caused by fire or other cause, or to make any repairs or
replacements to or of improvements installed in the Premises by or for Tenant at
Tenant's cost.
17.2 Landlord's Insurance. Landlord covenants and agrees that,
throughout the Lease Term, it will insure the Building (excluding foundations,
excavations and other non-insurable items) and the machinery, boilers, and
equipment contained therein owned by Landlord (excluding any property with
respect to which Tenant is obliged to insure pursuant to the provisions of
Section 16 thereof) against damage by fire and extended perils coverage in such
reasonable amounts as would be carried by a prudent owner of a similar property
in the same locale. Landlord will also, throughout the Term, carry commercial
general liability, property damage and loss of rent insurance with respect to
the operation of the Premises in reasonable amounts as would be carried by a
prudent owner of a similar property in the same locale. Landlord may, but shall
not be obligated to, take out and carry any other form or forms of insurance as
it or the mortgagees of Landlord may reasonably determine to be advisable.
Tenant shall pay its proportionate share for all such insurance carried by
Landlord as an Operating Cost, provided that such insurance is not duplicative
of the insurance obtained pursuant to Section 16.1. Notwithstanding any
contribution by Tenant to the cost of insurance premiums, Tenant acknowledges
that it has no right to receive any proceeds from the insurance policies carried
by
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Landlord, and that the insurance will be for the sole benefit of Landlord, with
no coverage for Tenant for any risk insured against.
SECTION 18
ENTRY BY LANDLORD
Landlord and its agents, upon giving 24 hours notice, shall have the
right to enter the Premises during normal business hours for the purpose of
examining or inspecting the same, to supply any services to be provided by
Landlord to Tenant hereunder, to show same to prospective purchasers or tenants
of the Premises, and to make such alterations, repairs, improvements, or
additions, whether structural or otherwise, to the Premises or to the Building
as Landlord may deem necessary or desirable. Landlord may enter by means of a
master key, without liability to Tenant except for any failure to exercise due
care for Tenant's property, and without affecting this Lease. Landlord shall use
reasonable efforts on any such entry not to unreasonably interrupt or interfere
with Tenant's use and occupancy of the Premises. Landlord may enter the Premises
at any time in the case of an emergency. Landlord will only show the Premises to
prospective Purchasers or Tenants upon twenty-four (24) hours notice and then
only with a representative of Tenant present in order to protect the
confidentiality and trade secret aspects of Tenant's operations.
SECTION 19
DEFAULT BY TENANT
19.1 Events of Default. Each one of the following events is referred to
as an "Event of Default":
(a) Tenant shall fail to make due and punctual payment of Rent
or any other amounts payable hereunder, and such failure shall continue for
fifteen (15) days after receipt of written notice from Landlord.
(b) Tenant shall vacate or abandon the Premises and cease
payment of Rent, or remove leasehold improvements or fixtures constituting
property of Landlord;
(c) This Lease shall be transferred to or shall pass to or
devolve upon any other person or party except in the manner set forth in Section
13;
(d) This Lease or the Premises or any part thereof shall be
taken upon execution or by other process of law directed against Tenant, or
shall be taken upon or subject to any attachment at the instance of any creditor
of, or claimant against Tenant, and said attachment shall not be discharged or
disposed of within sixty (60) days after the levy;
(e) Tenant shall file a petition in bankruptcy or insolvency
or for reorganization or arrangement under the bankruptcy laws of the United
States or under any insolvency act of any state, or shall voluntarily take
advantage of any such law or act by answer or otherwise, or shall be dissolved
or shall make an assignment for the benefit of creditors;
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(f) Involuntary proceedings under any such bankruptcy law or
insolvency act or for the dissolution of Tenant shall be instituted against
Tenant, or a receiver or trustee shall be appointed of all or substantially all
of the property of Tenant, and such proceedings shall not be dismissed or such
receivership or trusteeship vacated within sixty (60) days after such
institution or appointment;
(g) Tenant shall fail to pay Rent and shall fail to take
possession of the Premises thirty (30) days following the earlier of the date
the Premises are Ready for Occupancy or the Commencement Date;
(h) Tenant shall fail to perform any of the other agreements,
terms, covenants or conditions of this Lease on Tenant's part to be performed,
and such nonperformance shall continue for a period of thirty (30) days after
written notice by Landlord to Tenant, or if such performance cannot be
reasonably had within such thirty (30) day period, Tenant shall not in good
faith have commenced such performance within such thirty (30) day period and
shall not thereafter diligently proceed to completion.
19.2 Remedies of Landlord. If any one or more Events of Default shall
happen which are not timely cured, then Landlord shall have the right at
Landlord's election, or at any time thereafter, to reenter and take possession
of the Premises or any part thereof by proper legal process and repossess the
same as Landlord's former estate and expel Tenant and those claiming through or
under Tenant, and remove the effects of both or either, without being deemed
guilty of any manner of trespass, and without prejudice to any remedies for
arrears of Rent or breach of covenants or prior conditions and without
terminating this Lease. Should Landlord elect to reenter as provided in this
Subsection, or should Landlord take possession pursuant to legal proceedings or
pursuant to any notice provided for by law including a proceeding for possession
pursuant to Colorado's Forcible Entry and Unlawful Detainer Statutes, Landlord
may, from time to time, without terminating this Lease either:
(a) (i) Relet the Premises or any part thereof in Landlord's
or Tenant's name, but for the account of Tenant, for a term or terms (which may
be greater or less than the period which would otherwise have constituted the
balance of the term of this Lease) and on conditions and upon other terms (which
may include repair of the Premises) as Landlord, in its commercially reasonable
discretion, may determine, and Landlord may collect and receive the rents.
Landlord shall use reasonable efforts to relet the Premises and maximize the
income generated by the Premises. No reentry or taking possession of the
Premises by Landlord shall be construed as an election on Landlord's part to
terminate this Lease unless a written notice of such intention be given to
Tenant. No notice from Landlord hereunder or under a forcible entry and unlawful
detainer statute or similar law shall constitute an election by Landlord to
terminate this Lease unless such notice specifically so states. Landlord
reserves the right following any reentry and/or reletting to exercise its right
to terminate this Lease by giving Tenant written notice, in which event the
Lease will terminate as specific in the notice.
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(ii) If Landlord elects to take possession of the
Premises as provided in this Subsection (a) without terminating the Lease,
Tenant shall pay to Landlord (1) the Rent and other sums due under this Lease
which would be payable if repossession had not occurred, less (2) the net
proceeds, if any, of any reletting of the Premises after deducting Landlord's
expenses in connection with the reletting as follows: all repossession costs,
brokerage commissions, legal expenses and attorneys' fees, repair costs, and the
cost, prorated based on the number of years remaining under the Primary Term of
this Lease, of "freshening" the Premises for a new tenant, such as touch up
work, new paint and carpet, but not including the cost of the demolition and
replacement of the existing tenant finish work.
(b) To give Tenant written notice of intention to terminate
this Lease on the date of the notice, or on any later date specified in the
notice. Tenant's right to possession of the Premises shall cease and the Lease
shall thereupon be terminated, except as to Tenant's liability under this Lease,
as if the expiration of the term fixed in the notice were the end of the term
originally demised. If this Lease is terminated pursuant to the provisions of
this Subsection (b), or terminated pursuant to a proceeding for possession under
the Colorado Forcible Entry and Unlawful Detainer Statutes, Tenant shall remain
liable to Landlord for damages in an amount equal to the Rent and other sums
which would have been owing by Tenant under this Lease for the balance of the
Term had this Lease not been terminated, less the net proceeds, if any, of any
reletting of the Premises by Landlord subsequent to the termination, after
deducting Landlord's expenses in connection with such reletting, including the
expenses enumerated in Subsection (a) above. Landlord shall be entitled to
collect damages from Tenant monthly on the days on which the Rent and other
amounts would have been payable if this Lease had not been terminated.
19.3 Cumulative Remedies. Suit or suits for the recovery of the Rent
and other amounts and damages may be brought by Landlord, from time to time, at
Landlord's election, and nothing in this Lease shall be deemed to require
Landlord to await the date when this Lease or its Term would have expired by
limitation had there been no default by Tenant, or no termination, as the case
may be. Each right and remedy provided for in this Lease shall be cumulative and
shall be in addition to every other right or remedy provided for in this Lease
or now or hereafter existing at law or in equity or by statute or otherwise
including but not limited to suits for injunctive relief and specific
performance. The exercise or beginning of the exercise by Landlord of any one or
more of the rights or remedies provided for in this Lease or now or hereafter
existing at law or in equity by statute or otherwise shall not preclude the
simultaneous or later exercise by Landlord of any or all rights or remedies
provided for in this Lease or now or hereafter existing at law or in equity or
by statute or otherwise. All such rights and remedies shall be considered
cumulative and non-exclusive. All costs incurred by Landlord in connection with
collecting any Rent or other amounts and damages owing by Tenant pursuant to the
provisions of this Lease, or to enforce any provision of this Lease, including
reasonable attorney's fees from the date such matter is turned over to an
attorney, and an action is commenced by Landlord, shall also be paid by Tenant
to Landlord.
19.4 No Waiver. No failure by Landlord to insist upon the strict
performance of any agreement, term, covenant or condition of this Lease or to
exercise any right or remedy consequent upon a breach, and no acceptance of full
or partial payment of Rent during the
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continuance of any breach, shall constitute a waiver of any breach or of the
agreement to be performed or complied with by Tenant, and no breach shall be
waived, altered or modified except by written instrument executed by Landlord.
No waiver of any breach shall affect or alter this Lease, but each and every
agreement, term, covenant and condition shall continue in full force and effect
with respect to any other then existing or subsequent breach. Notwithstanding
any termination of this Lease, the same shall continue in force and effect as to
any provisions which require observance or performance by Landlord or Tenant
subsequent to such termination.
19.5 Bankruptcy. Nothing contained in this Section 19 shall limit or
prejudice the right of Landlord to prove and obtain as liquidated damages in any
bankruptcy, insolvency, receivership, reorganization or dissolution proceeding,
an amount equal to the maximum allowed by any statute or rule of law governing
such a proceeding, and in effect at the time when such damages are to be proved,
whether or not the amount is greater, equal to or less than the amounts
recoverable, either as damages or Rent, referred to in any of the preceding
provisions of this Section. Notwithstanding anything contained in this Section
to the contrary, any such proceeding or action involving bankruptcy, insolvency,
reorganization, arrangement, assignment for the benefit of creditors, or
appointment of a receiver or trustee, as set forth above, shall be considered to
be an event of default only when the proceeding, action or remedy shall be taken
or brought by or against the then holder of the leasehold estate under this
Lease.
SECTION 20
TAXES
During the Term hereof, Tenant shall pay, prior to delinquency, all
business and other taxes, charges, notes, duties and assessments levied, and
rates or fees imposed, charged, or assessed against or in respect of Tenant's
occupancy of the Leased Premises or in respect of the personal property, trade
fixtures, furnishings, equipment, and all other personal property of Tenant
contained in the Premises, and shall hold Landlord harmless from and against all
payment of such taxes, charges, notes, duties, assessments, rates, and fees, and
against all loss, costs, charges, and expenses occasioned by or arising from any
and all such taxes, charges, notes, duties, assessments, rates, and fees. Tenant
shall cause the fixtures, furnishings, equipment and other personal property to
be assessed and billed separately from the real and personal property of
Landlord. If any or all of Tenant's fixtures, furnishing, equipment, and other
personal property shall be assessed and taxed with Landlord's real property,
Tenant shall pay to Landlord Tenant's share of such taxes within ten (10) days
after delivery to Tenant by Landlord of a statement in writing setting forth the
amount of such taxes applicable to Tenant's property. Tenant agrees to provide
financial statements if so requested in writing by any lender holding a security
interest in the Property or the Building. All of the above documents shall be
considered confidential and only disclosed or used for Landlord's appropriate
business purposes.
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SECTION 21
EMINENT DOMAIN
21.1 If the Building, or a substantial part thereof, or a substantial
part of the Premises or Common Areas, shall be lawfully taken or condemned (or
conveyed under threat of such taking or condemnation) for any public or
quasi-public use or purpose, the Term of this Lease shall end upon, and not
before, the date of the taking of possession by the condemning authority.
Current Rent shall be apportioned as of the date of termination. If any part of
the Building, other than the Premises or not constituting a substantial part of
the Premises, shall be so taken or condemned (or conveyed under threat of such
taking or condemnation), or if the grade of any street adjacent to the Building
is changed by any competent authority and such taking or change of grade makes
it necessary or desirable to substantially remodel or restore the Building,
which could not be accomplished without the total relocation of Tenant, Landlord
shall have the right to cancel this Lease upon not less than sixty (60) days'
notice prior to the date of cancellation designated in the notice. No money or
other consideration shall be payable by Landlord to Tenant for the right of
cancellation, and Tenant shall have no right to share in any condemnation award,
or in any judgment for damages, or in any proceeds of any sale made under any
threat of condemnation or taking. Nothing in this Section shall prevent Tenant
from making and pursuing a claim against the condemning authority in its own
right for termination of its leasehold interest, moving costs and other amounts
to which Tenant may be entitled. If this Lease is not canceled, the Lease shall
continue in full force and effect, and Rent shall be equitably abated in
proportion to any reduction in the size and utility of the Premises.
SECTION 22
SUBORDINATION TO MORTGAGES AND DEEDS OF TRUST
22.1 Lease Subordinate to Mortgages.
(a) Landlord agrees to require each lienholder against the
Premises to execute a non-disturbance agreement in favor of Tenant. This Lease
and the rights of Tenant shall be and are hereby made subject and subordinate to
the lien of any mortgages or deeds of trust as to which Tenant has received a
non-disturbance agreement now or hereafter existing against the Building, the
Property or both, and to all renewals, modifications, consolidations,
replacements and extensions thereof and to all advances made now or in the
future. Although the subordination shall be selfoperating, Tenant, or its
successors in interest, shall upon Landlord's request, execute and deliver upon
the demand of Landlord any and all instruments desired by Landlord,
subordinating, in the manner reasonably requested by Landlord, this Lease to any
mortgage or deed of trust. Landlord is hereby irrevocably appointed and
authorized as agent and attorney-in- fact of Tenant to execute all subordination
instruments if Tenant fails to execute the instruments within ten (10) days
after notice from Landlord demanding their execution. The notice may be given in
the manner provided for giving notice below.
(b) Should any mortgage or deed of trust affecting the
Building, the Property or both be foreclosed by a Lender which has granted
Tenant a non-disturbance agreement, then: (i) the liability of the mortgagee,
beneficiary or purchaser at the foreclosure sale to Tenant shall
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exist only so long as the mortgagee, beneficiary, or purchaser is the owner of
the Building and/or Property and the liability shall not continue or survive
after further transfer of ownership; and (ii) Tenant shall be deemed to have
attorned, as Tenant under this Lease, to the purchaser at any foreclosure sale
and this Lease shall continue in force and effect as a direct lease between and
binding upon Tenant and the purchaser at any foreclosure sale. As used in this
Section 22, "mortgagee" and "beneficiary" shall include successors and assigns
of any such party, whether immediate or remote, the purchaser of any mortgage or
deed of trust, whether at foreclosure or otherwise, and the successors,
assignees, mortgagees, and beneficiaries of such purchaser, whether immediate or
remote.
22.2 Tenant's Notices. In the event of any act or omission by Landlord
under this Lease which would give Tenant the right to terminate this Lease, or
to claim a partial or total eviction, Tenant will not exercise any such right
until:
(a) it has given thirty days written notice (by United States
certified or registered mail, postage prepaid) of such act or omission to the
holder of any mortgage or deed of trust on the Property (whose names and
addresses Landlord has previously furnished to Tenant) with a copy to Xxxx X.
Xxxxx, Xxxxxx & Xxxxx, P.C., X.X. Xxx 0000, Xxxxxxx, Xxxxxxxx 00000; and
X'Xxxxxx Development, 000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000;
and
(b) any holder of any mortgage or deed of trust on the
Property shall, following the giving of such notice, have failed with reasonable
diligence to commence and to pursue reasonable action to remedy the act or
omission within not more than sixty (60) days.
SECTION 23
WAIVER
The waiver by Landlord of any breach of any term, covenant, or
condition in this Lease shall not be deemed to be a waiver of the term,
covenant, or condition, or any subsequent breach of the same or any other term,
covenant or conditions. The acceptance of Rent hereunder shall not be construed
to be a waiver of any breach by Tenant of any term, covenant, or condition of
this Lease, it being understood and agreed that the remedies given to Landlord
shall be cumulative, and the exercise of any one remedy by Landlord shall not be
to the exclusion of any other remedy.
SECTION 24
SUBROGATION
The parties to this Lease agree that any and all fire and extended
coverage insurance which is required to be carried by either shall be endorsed
with a subrogation clause, substantially as follows: "This insurance shall not
be invalidated should the insured waive, in writing, prior to a loss, any and
all right of recovery against any party for loss occurring to the property
described herein." Each party waives all claims for recovery from the other
party, its officers, agents or employees for any loss or damage (whether or not
such loss or damage is caused by negligence of the other party, and
notwithstanding any provisions contained in this Lease to the contrary) to any
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of its real or personal property insured under valid and collectible insurance
policies to the extent of the collectible recovery under the insurance.
SECTION 25
PLATS AND RIDERS
Appendices, clauses, plats, and riders, if any, referred to in this
Lease and signed or initialed by Landlord and Tenant and affixed to this Lease
are hereby incorporated in and made a part of this Lease.
SECTION 26
SALE BY LANDLORD
In the event of a sale or conveyance or transfer by Landlord of its
interest in the Property and/or in the Building containing the Premises, and/or
in this Lease to a financially capable and responsible party, the same shall
operate to release Landlord from any future liability upon any of the covenants
or conditions, expressed or implied, contained in favor of Tenant, and in that
event, Tenant agrees to look solely to the responsibility of the successor in
interest of Landlord in and to this Lease. This Lease shall not be affected by
any such conveyance or transfer, and Tenant agrees to attorn to such purchaser
or transferee.
SECTION 27
RIGHT OF LANDLORD TO PERFORM
All covenants and agreements to be performed by Tenant under any of the
terms of this Lease shall be performed by Tenant at Tenant's sole cost and
expense, and without any abatement of Rent. If Tenant shall fail to pay any sum
of money, other than Rent, required to be paid by it, or shall fail to perform
any other act on its part to be performed, and the failure shall continue for
thirty (30) days after written notice by Landlord, Landlord may, but shall not
be obligated to do so, and without waiving or releasing Tenant from any
obligations of Tenant, make any payment or perform any other act on Tenant's
part to be made or performed as in this Lease provided. All sums so paid by
Landlord and all necessary incidental costs, together with interest at the rate
of 4% over the Prime Rate announced from time to time by Norwest Bank, Denver,
from the date of a payment by Landlord, shall be payable to Landlord on demand,
and Tenant covenants to pay any such sums, and Landlord shall have (in addition
to any other right or remedy of Landlord) the same rights and remedies in the
event of the non-payment thereof by Tenant, as in the case of default by Tenant
in the payment of Rent.
SECTION 28
ATTORNEY'S FEES
In the event of any litigation or arbitration between Tenant and
Landlord to enforce any provision of this Lease or any right of either party,
the unsuccessful party to such litigation or arbitration shall pay to the
successful party all costs and expenses, including reasonable attorney's fees,
incurred. Moreover, if Landlord, without fault, is made a party to any
litigation instituted by
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or against Tenant, Tenant shall indemnify Landlord against, and protect, defend,
and save it harmless from, all costs and expenses, including attorney's fees,
incurred by Landlord.
SECTION 29
ESTOPPEL CERTIFICATE
Tenant shall, at any time and from time to time but not more often than
once per year, upon not less than ten (10) days' prior written notice from
Landlord, execute, acknowledge, and deliver to Landlord a statement in writing
certifying that this Lease is unmodified and in full force and effect (or if
modified, stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect) and the dates to which the
Rent and other charges are paid, and acknowledging that Tenant is paying Rent on
a current basis with no offsets or claims, and there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder (or specifying
the offsets, claims, or defaults, if any are claimed). It is expressly
understood and agreed that any such statement may be relied upon by any
prospective purchaser or encumbrance of all or any portion of the Building or by
any other person to whom it is delivered. Tenant's failure to deliver the
statement within the required time shall be conclusive upon Tenant that this
Lease is in full force and effect, without modification except as may be
represented by Landlord, that there are no uncured defaults in Landlord's
performance, and that not more than two (2) months' rental have been paid in
advance.
SECTION 30
NOTICE
Any notice from Landlord to Tenant or from Tenant to Landlord shall be
in writing and may be served personally or by mail. If served by mail, it shall
be mailed by registered or certified mail, return receipt requested, addressed
to Tenant at the Premises or to Landlord at the place from time to time
established for the payment of Rent. Notices shall be effective when delivered,
if served personally, or three (3) days after mailing, if mailed. If no one at
the premises is available to accept the notice, then it shall be deemed
effective upon the second refusal or returned mail delivery attempt.
SECTION 31
RIGHTS RESERVED
Landlord and Tenant reserve the following rights, exercisable without
notice and without liability to Tenant for damage or injury to property, person,
or business, and without effecting an eviction, constructive or actual, or
disturbance of Tenant's use or possession, or giving rise to any claim for
set-off or abatement of rent:
(a) Landlord agrees to name the building the "Chaparral
Building" and not to change the name or address during the term of this Lease or
any extensions hereof, once Chaparral has leased and occupied the entire
building;
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(b) Tenant agrees to install, affix, and maintain any and all
signs on the exterior and interior of the Building;
(c) Tenant agrees to retain at all times, and to use in
appropriate instances, keys to all doors within and into the Premises. No locks
or bolts shall be altered, changed, or added without the prior written consent
of Landlord.
SECTION 32
REAL ESTATE BROKER
32.1 The commission to be paid will be 2 1/2% of Base Rent paid by
Tenant during the full Primary Lease Term. Tenant, Xxxxxxx Xxxxxxx, and
Prudential Wise XxXxxxxx Realtors have agreed to the commission being paid as
follows:
(a) Xxxxxxx Xxxxxxx and Prudential Wise XxXxxxxx Realtors will
be paid 1/4 of 1% of Base Rent paid by Tenant during the full Primary Lease
Term.
(b) Tenant will receive an additional Build Out Allowance
equal to 2 1/4% of Base Rent paid by Tenant during the full Primary Lease Term.
SECTION 33
MISCELLANEOUS PROVISIONS
(a) The words "re-enter", or "re-entry", as used in this
Lease, are not restricted to their technical legal meaning. The term "Landlord",
as used in this Lease, means only the Landlord from time to time, and upon
conveying or transferring its interest in compliance with Section 27. Landlord
shall be relieved from any further obligation or liability pursuant to Section
27.
(b) Time is of the essence of this Lease and of each and all
of its provisions.
(c) Submission of this instrument for examination or signature
by Tenant does not constitute a reservation of or an option for lease, and it is
not effective as a lease or otherwise until execution by both Landlord and
Tenant.
(d) The invalidity or unenforceability of any provision in
this Lease shall not affect or impair any other provisions.
(e) This Lease shall be governed by and construed pursuant to
the laws of the State of Colorado.
(f) Should any mortgagee or beneficiary under a deed of trust
require a modification of this Lease, which modification will not bring about
any increased cost or expense to Tenant or will not in any other way
substantially change the rights and obligations of Tenant hereunder, then and in
such event, Tenant agrees that this Lease may be so modified.
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(g) All rights and remedies of Landlord under this Lease, or
those which may be provided by law, may be exercised by Landlord in its own name
individually, or in its name by its agent, and all legal proceedings for the
enforcement of any rights or remedies, including distress for rent, unlawful
detainer, and any other legal or equitable proceedings, may be commenced and
prosecuted to final judgment and be executed by Landlord in its own name
individually or in its name by its agent. Landlord and Tenant each represent to
the other that each has full power and authority to execute this Lease and to
make and perform the agreements herein contained, and Tenant expressly
stipulates that any rights or remedies available to Landlord, either by the
provisions of this Lease or otherwise, may be enforced by Landlord in its own
name individually or in its name by its agent or principal.
(h) The marginal headings and titles to the paragraphs of this
Lease are not a part of this Lease and shall have no effect upon the
construction or interpretation of any part hereof.
(i) Tenant acknowledges that there are no covenants,
representations, warranties, agreements, or conditions, expressed or implied,
collateral or otherwise, forming part of or in any way effecting or relating to
this Lease except as expressly set out in this Lease and the attachments and
exhibits to this Lease, and that the terms and provisions of this Lease may not
be modified or amended except by written instrument by both Landlord and Tenant.
SECTION 34
SUCCESSORS AND ASSIGNS
Subject to the terms and provisions of Section 13, the covenants and
conditions contained in this Lease shall apply to and bind the respective heirs,
successors, executors, administrators, and assignees of the parties hereto, and
the terms "Landlord" and "Tenant" shall include the successors and assignees of
either such party, whether immediate or remote.
SECTION 35
QUIET ENJOYMENT
Subject to the terms and provisions of this Lease, Landlord covenants
and agrees that Tenant, upon complying with all of the obligations of Tenant
under this Lease, shall peaceably and quietly enjoy the Premises and Tenant's
rights under this Lease during its Term, without hindrance by Landlord or any
persons claiming under Landlord.
SECTION 36
RECORDING
This Lease shall not be recorded by Landlord or Tenant.
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SECTION 37
RELIANCE BY LANDLORD
As of the date of executing this Lease, the Premises consist of
unimproved real property. Landlord intends to proceed with construction of the
Premises in reliance upon Tenant's covenants, obligations and representations
contained in this Lease. Tenant hereby acknowledges and accepts Landlord's
reliance in this regard. As additional consideration from Tenant to Landlord,
Tenant hereby agrees to provide updated business financial statements annually.
Said statements to be supplied to Landlord within ninety days of end of Tenant's
fiscal year.
SECTION 38
OPTION TO EXTEND
38.1 Option to Extend Primary Term. Upon the full and complete
performance of all terms, covenants and conditions contained in this Lease by
Tenant and the payment of all Rent and other sums due under the terms of this
Lease, Tenant shall have the option to renew this Lease for one (1) additional
term of Five (5) years. If Tenant desires to exercise the option, Tenant must
deliver written notice of its election to Landlord not less than one-hundred
eighty (180) days prior to the expiration of the Primary Term of this Lease. If
Tenant exercises its option, this Lease shall be deemed to be extended for the
additional Period, subject to the right of Landlord to make any adjustments and
to assess any charges against Tenant which are provided in this Lease. Rent
shall continue to be calculated according to the terms in this Lease, including
any increases pursuant to the Consumer Price Index or Market Rates. Option
Period Base Rent shall be the Base Rent adjusted by one-half the difference
between the rate determined by the increase in Consumer Price Index and the
current rate being charged for similar space in the area.
SECTION 39
SECURITY DEPOSIT
Tenant shall deposit unto Landlord the sum of $18,500.00 due thirty
(30) days prior to occupancy which is anticipated to be March 15, 2000, to be
held as a Damage Deposit.
SECTION 40
WORK LETTERS
40.1 Landlord and Tenant shall agree upon plans, specifications and
finish work as quickly as possible and shall attach work letters to this Lease
detailing those portions of the project which shall be Landlord's responsibility
and those portions of the finish which shall be attributable to Tenant's
Build-out allowance described in Section 3. At a minimum, Landlord's work shall
consist of the Building, all exterior landscaping and other work, HVAC and
electrical sized and designed for Tenant's needs, plus a "Vanilla Shell"
interior.
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SECTION 41
FIRST RIGHT OF REFUSAL ON ADDITIONAL SPACE
41.1 Landlord agrees to grant Tenant an exclusive option to Lease the
adjoining twenty-thousand square feet of the Building. This option will expire
on November 1, 1999. The Base Rate and Term for the additional space shall be
the Base Rate and Term in effect on the occupied space at the time Tenant
occupies option space.
41.2 Landlord also agrees to grant Tenant an exclusive option to Lease
another twenty-thousand square feet in the Building. This option will expire
thirty (30) months from Commencement of Lease. The Base Rate for the additional
space shall be the current prevailing Market Rate.
LANDLORD:
BY: /s/ Xxxxx X. X'Xxxxxx
--------------------------------------------
Xxxxxxxx X. X'Xxxxxx, Managing Member
TENANT: CHAPARRAL NETWORK STORAGE, INC.
A Delaware Corporation
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------
Its: Vice President, Finance
------------------------------------------
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ADDENDUM TO LEASE AGREEMENT
This Addendum is made and entered into this the l5th day of November, 1999,
between BTC Development, LLC ("Landlord"), and Chaparral Network Storage, Inc.,
a Delaware Corporation ("Tenant"). This Addendum amends the lease entered into
between the aforementioned parties on September 1, 1999 for the rental of
approximately 20,000 rentable square feet in Dry Creek Corporate Center (the
"Building") which Building is situated on land described as 0000 Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx, Xxxxxxxx 00000.
ADDENDUM CONTROLS. This Addendum is attached to and made a part of the Lease
between Landlord and Tenant (as those terms defined above). In the event of any
conflict between the terms of the Lease and those set forth in this Addendum,
the terms of this Addendum will control. The Lease and this Addendum are
referred to collectively as the "Agreement".
PAGE FOUR OF LEASE - DEMISE Paragraph one is amended as follows:
Landlord does hereby lease to Tenant and Tenant hereby leases from Landlord an
approximate 40,000 rentable square feet (the "Premises," or, alternatively, the
"Leased Premises") Dry Creek Corporate Center (the "Building"), which Building
is situated on land described as 0000 Xxxx Xxx Xxxxx Xxxxxxx, Xxxxxxxx, Xxxxxxxx
00000 (the "Property"), together with a non-exclusive right, subject to the
provisions of this Lease, to use all appurtenances thereto, including, but not
limited to, any plazas, common areas, parking lots, walks, ways or other areas
in the Building or on the Property designated by Landlord for the exclusive or
non-exclusive use of the tenants of the Building.
PAGE FIVE OF LEASE - SECTION 3 -- COMPLETION OF THE PREMISES is amended as
follows:
(See Space Plan. Addendum "A") Tenant shall have a Build Out Allowance of
$880,000.00 or $22.00 per useable square foot. The Build Out Allowance includes
all costs incurred in designing, permitting, construction, and installation of
Tenant Improvements. All costs in excess of allowance are to be paid by Tenant.
Golden Triangle Construction, Inc. ("GTC") will be the General Contractor for
any initial Tenant Improvement work done to the Premises. GTC will generally
request 3 competitive bids for all subcontract work to be performed, and will
provide to Tenant a breakdown of all costs prior to the commencement of any
work. All costs in excess of Build Out Allowance will be added to Lease Rate and
amortized at ten percent (10%) over the term of the Lease.
/s/ Xxxxxxx X. Xxxxxxxx /s/ Xxxxx X'Xxxxxx
----------------------- ------------------
Tenant Landlord
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PAGE FIVE OF LEASE - SECTION 4.01 -- RENT is amended as follows:
4.01 Base Rent. Tenant agrees to pay Landlord during the full Primary Lease Term
the sum of $2,288,915.86, payable in advance in equal monthly installments of
$37,833.32 for the Premises: The first full monthly installment of Base Rent
shall be payable on the Commencement Date and each succeeding monthly
installment shall be due and payable on or before the first day of each and
every successive calendar month thereafter during the Primary Lease Term. The
first one hundred and twenty-six thousand dollars of Base Rent shall be prepaid
with the signing of this addendum. The prepayment pays the Base Rent for the
first one hundred and one days Tenant occupies Premises. Prepayment shall be in
the form of 42,000 shares of Chaparral Network Storage, Inc. common stock
purchased at $3.00 per share. The exact square footage of the Premises will be
measured "as-built" and Rent adjusted accordingly.
PAGE SEVEN OF LEASE -- SECTION 5.02(a) is amended as follows:
5.02(a) Taxes. The Rent payable by Tenant shall be increased by the amount of
"Tenant's Proportional Share" of the Taxes on the Property. Tenant's
Proportional Share shall be 67% based upon Tenant's initial occupancy of
approximately 40,000 square feet out of a total building rental space of
approximately 60,000 square feet. Tenant's Proportional Share shall be subject
to confirmation and/or adjustment based on "as-built" measurements of the
Premises and Building. In determining the amount of Taxes for any calendar year,
the amount of special assessments to be included shall be limited to the amount
of the installment (plus any interest payable thereon) of such special
assessment which would have been required to have been paid during such calendar
year if Landlord had elected to have the special assessment paid over the
maximum period of time permitted by law, if the election is available to
Landlord. All reference to Taxes "for" and "billed for" a particular calendar
year shall be deemed to refer to Taxes levied, assessed, billed or otherwise
imposed for such calendar year, without..
In witness whereof parties have executed this agreement the day and month first
written above.
LANDLORD: TENANT:
BTC Development, LLC Chapparal Network Storage, Inc.
/s/ XXXXXXXX X. X'XXXXXX /s/ XXXXXXX X. XXXXXXXX
---------------------------- ----------------------------
By: Xxxxxxxx X. X'Xxxxxx By: Xxxxxxx X. Xxxxxxxx
Managing Member Vice President, Finance
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