EXHIBIT 10.23
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LEASE
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Between
CENTRO III, LLC
and
PHARMION CORPORATION
April 24, 2002
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SUMMARY OF BASIC LEASE TERMS
1. Tenant: Pharmion Corporation
(a) Tenant's entity and jurisdiction: a Delaware corporation.
2. Building Address: 0000 00xx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000
(a) Type: Multi-Tenant.
(b) Approx. Total Rentable Square Footage of Building: 37,688.
(c) Base Building has been constructed by Landlord in accordance
with Work Letter attached as EXHIBIT D.
3. Demised Premises: 0000 00xx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000
(a) Suite 200.
(b) Approx. Total Rentable Square Footage of Demised Premises:
18,410.
(c) Approx. Total Useable Square Footage of Demised Premises:
16,863.
(d) Interior Finish: To be completed by Tenant in accordance with
Work Letter attached as EXHIBIT D.
4. Initial Lease Term:
(a) Period: Five (5) years.
(b) Commencement Date: August 1, 2002.
(c) Expiration Date: Five years after Commencement Date (July 31,
2007).
5. Renewal Options:
(a) Two (2) three-year options at Market Rate.
(b) Market Rate Escalator to apply in each successive year of each
Renewal Term.
(c) Options must be exercised its writing not less than 150 nor
more than 270 days prior to expiration of prior term.
6. Basic Rent:
Rent Schedule:
ANNUAL BASIC MONTHLY BASIC ANNUAL BASIC RENT PER
LEASE YEAR RENT RENT RENTABLE SQUARE FOOT
---------- ------------ ------------- ---------------------
Year 1 $341,506.00 $28,459.00 $18.55
Year 2 $351,815.00 $29,318.00 $19.11
Year 3 $362,309.00 $30,192.00 $19.68
Year 4 $373,171.00 $31,098.00 $20.27
Year 5 $384,368.00 $32,031.00 $20.88
ONE-HALF OF THE BASIC RENT AND ADDITIONAL RENT DUE FOR THE MONTH OF AUGUST 2002
SHALL BE ABATED. THE REMAINING ONE-HALF SHALL BE DUE AND PAYABLE AUGUST 15,
2002.
7. Additional Rent:
(a) Tenant's Pro Rata Share for Additional Rent: 48.85%
(calculated by dividing the approximate Rentable Square
Footage of the Demised Premises (18,410) by the approximate
Rentable Square Footage of the Building (37,688).
8. Security Deposit Amount: $28,459.00 (one month's rent)
9. Place for Payments: Centro III, LLC,
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
10. Place for Notices:
Landlord: with a copy to:
Centro III, LLC Xxxxx X. Xxxxxxxx, Esq.
000 Xxxx Xxxxxx Xxxxxxxx and Associates P.C.
Xxxxxxx, XX 00000 0000 Xxxxxx Xxxx., Xxxxx 000
Xxxxxxx, XX 00000
Tenant:
(Prior to the Commencement Date) (After the Commencement Date)
Pharmion Corporation Pharmion Corporation
0000 Xxxxxxxxx Xxxx 0000 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
11. Permitted Use(s) by Tenant: General office uses as permitted by
applicable zoning.
12. Broker(s): Xxxxx Xxxxxxx, Colorado Group (Landlord's Broker); Xxxx
Xxxxxx, Equis Corporation (Tenant's Broker).
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13. Utilities: Tenant Shall pay its Pro Rata Share of charges for any
utilities not separately metered or billable to the Demised Premises;
provided, however, that if in Landlord's reasonable opinion,
apportioning utility charges based upon Pro Rata Shares would be
inequitable because of disproportionate consumption of utilities by
tenants of the Building, Landlord shall have the right to apportion
utility charges based upon Landlord's reasonable estimation of relative
use of such utilities.
12. Tenant Finish Allowance:
(a) Base Tenant Finish Allowance. $30.00 per Rentable Square Foot
of the Demised Premises ($552,300.00 total). Base Tenant
Finish Allowance shall be used to pay expenses incurred in
performance of Tenant's Work as defined in the Work Letter
attached as EXHIBIT D hereto and shall be paid in accordance
with the provisions set forth in EXHIBIT D. Any excess not
used for Tenant's Work shall be credited against the next
installments of Basic Rent and Additional Rent due hereunder.
(b) Additional Tenant Finish Allowance. Tenant may, at its option,
request from Landlord up to a maximum of $222,705.00 as an
Additional Tenant Finish Allowance. Tenant will notify
Landlord in writing if Tenant desires to use the Additional
Tenant Finish Allowance. The Additional Tenant Finish
Allowance shall be used for the same types of expenses and
paid in the same manner as the Base Tenant Finish Allowance.
Any Additional Tenant Finish Allowance requested and used by
Tenant shall accrue interest from the date of disbursement to
Tenant or its contractors until repaid at the rate of 5.5% per
annum. The Additional Tenant Finish Allowance used by Tenant
shall be amortized at 5.5% per annum in equal monthly payments
of principal and interest over the sixty (60) month initial
Lease Term, and the monthly cost thereof shall be added to and
shall increase the Basic Rent payable hereunder. At Landlord's
request, Tenant shall enter into an Amendment to this Lease in
a form reasonably acceptable to Landlord and Tenant
memorializing the Additional Tenant Finish Allowance used and
the corresponding increase in the Basic Rent. The Base Tenant
Finish Allowance and Additional Tenant Finish Allowance are
collectively referred to as the Tenant Finish Allowance.
15. Signage: Building Standard Lobby directory and Suite signage shall be
provided at Landlord's expense. Tenant may have, at its own expense,
the top four (4) spaces (out of the eight total spaces) on the Building
Monument sign, and Tenant may install one sign on each of the north and
south sides of the east stair tower on the fascia of the Building.
Tenant's signs shall be subject to the provisions of and shall comply
with the requirements of Section 8.10.
16. Parking: See Section 2.9.
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LEASE
This Lease is made this 24th day of April, 2002, between
Centro III, LLC, a Colorado limited liability company, ("Landlord"), whose
address is 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, and Pharmion Corporation, a
Delaware corporation ("Tenant"), whose current address is 0000 Xxxxxxxxx Xxxx,
Xxxxxxx, Xxxxxxxx 00000.
ARTICLE 1
GENERAL
1.1 Consideration. Landlord enters into this Lease in
consideration of the payment by Tenant of the Rents herein reserved and the
keeping, observance and performance by Tenant of the covenants and agreements of
Tenant herein contained.
1.2 Exhibits and Addenda to Lease. The Exhibits and
Addenda listed below shall be attached to this Lease and be deemed incorporated
in this Lease by this reference. In the event of any inconsistency or conflict
between such Exhibits and Addenda and the terms and provisions of this Lease,
the terms and provisions of the Exhibits and Addenda shall control. The
Attachments, Exhibits and Addenda to this Lease are:
Summary of Basic Lease Terms
Exhibit A Legal Description of Land
Exhibit B Location of Demised Premises
Exhibit C Notice of Non-Liability for Mechanics' Liens
Exhibit D Work Letter
Exhibit E Rules and Regulations
ARTICLE 2
DEFINITIONS; DEMISE OF PREMISES
2.1 Demise. Subject to the provisions, covenants and
agreements herein contained, Landlord hereby leases and demises to Tenant, and
Tenant hereby leases from Landlord, the Demised Premises as hereinafter defined,
for the Lease Term as hereinafter defined, together with a non exclusive right
to use all appurtenances thereto including, but not limited to, any decks,
plazas, easement areas, Common Facilities or other areas of Land described in
EXHIBIT A hereto designated by Landlord from time to time for the exclusive or
non-exclusive use of tenants of the Building, subject to existing covenants,
conditions, restrictions, easements and encumbrances affecting the same. Tenant
shall have access to the Demised Premises 24 hours per day, 7 days per week.
2.2 Demised Premises. The "Demised Premises" shall mean
the space to be occupied by Tenant as depicted on EXHIBIT B attached hereto. The
Demised Premises will be within the Building, which is to be constructed on the
Land, as the terms "Building" and "Land" are hereinafter defined.
2.3 Square Footage and Address. The Demised Premises will
contain approximately the rentable and usable floor area set forth in the
Summary of Basic Lease Terms, but neither the Basic Rent, Tenant Finish
Allowance, Tenant's Pro Rata Share nor any other calculation hereunder shall be
adjusted if the actual rentable or usable floor area of the Demised Premises
varies from the figures set forth in the Summary of Basic Lease Terms. The
address of the Demised Premises is the address set forth in the Summary of Basic
Lease Terms.
2.4 Land. "Land" shall mean the parcel of real property
more particularly described in EXHIBIT A attached hereto, as the same may be
replatted, resubdivided or adjusted from time to time by Landlord in its sole
discretion, provided that no such modifications shall change the terms of this
Lease.
2.5 Building. "Building" shall mean the building and
associated improvements constructed on the Land and containing approximately the
number of rentable square feet set forth on the Summary of Basic Lease Terms, as
such Building may be expanded, remodeled, reconstructed or otherwise modified
from time to time in the future by Landlord.
2.6 Improvements. "Improvements" shall mean the Building,
as hereinafter defined, and all other fixtures and improvements on the land,
including landscaping thereon.
2.7 Property. "Property" shall mean the Land, the
Building and the Improvements and any fixtures and personal property used in
operation and maintenance of the Land, Building and Improvements other than
fixtures and personal property of Tenant and other users of space in the
Building.
2.8 Common Facilities. "Common Facilities" shall mean all
of the Property except (a) the Demised Premises and (b) the other premises in
the Building leased or held for lease to other tenants that is intended to be
used in common by Tenant and other tenants, if any. Common Facilities shall
include, without limitation, those items described as Common Facilities in
Section 7.2 below, any walks, driveways, and, if applicable, lobby areas, halls,
stairs, elevators, restrooms, utility rooms, and janitorial closets designed for
common use of Tenant and other users of space in the Building. "Exclusive
Facilities" shall mean the four (4) deck areas of approximately 250 square feet
each on the four corners of the Building adjacent to the Demised Premises which,
though not part of the Demised Premises, shall be reserved for the exclusive use
of Tenant so long as Tenant continues to lease the entire second floor of the
Building. Tenant shall be solely responsible, at its expense, for all cleaning
and maintenance of the Exclusive Facilities so long as Tenant continues to
maintains the exclusive right to use the same.
2.9 Parking Area. "Parking Area" shall mean that portion
of the Land, which is or is to be paved and otherwise improved or designated
unimproved land for the parking of motor vehicles. There are 5 permanently
designated handicap parking spaces and 4 reserved visitor parking spaces located
on the surface lot adjacent to the Building entrance, and 125 parking spaces for
the use of tenants of the Building and their employees and customers. Throughout
the Initial Lease Term and any Renewal Option Terms, and included in the amount
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of Basic Rent due hereunder, Tenant shall be entitled to the non-exclusive use
of its pro rata share of the Parking Area. In the event of excessive conflicts
over the use of parking spaces, Landlord shall have the right to designate some
or all of the Parking Area for the exclusive use of particular tenants, and in
such event, Tenant shall be entitled to its pro rata share of any such
designated spaces in terms of number, location and overall quality of such
assigned spaces. Landlord shall construct signs indicating that unauthorized
vehicles will be towed at the expense of the owner of the vehicle:
2.10 Use of Common Facilities. Tenant is hereby granted
the non-exclusive right and license to use, in common with others entitled to
such use, the Common Facilities, as they from time to time exist, subject to the
rights of Landlord reserved herein. Tenant shall not interfere, at any time,
with the rights of Landlord and others entitled to use any part of the Common
Facilities, and, except as expressly permitted in Article 18, Article 19 of this
Lease or the Work Letter attached hereto as EXHIBIT D, shall not store, either
permanently or temporarily, any materials, supplies or equipment on the Common
Facilities. Landlord shall have the right, at any time, to change, reduce or
otherwise alter the Common Facilities, in its sole discretion and without
compensation to Tenant; provided, however, Landlord shall: (i) provide
reasonable parking and loading areas; (ii) provide access to the Demised
Premises; (iii) not materially and adversely interfere with Tenant's use or
occupancy of the Demised Premises; (iv) not materially reduce or obstruct
Tenant's signage; and further provided that such modifications do not contravene
any specific requirement of this Lease.
2.11 Covenant of Quiet Enjoyment. Landlord covenants and
agrees that, provided Tenant is not in default beyond any applicable cure period
and keeps, observes and performs the covenants and agreements of Tenant
contained in this Lease, Tenant shall have quiet and peaceable possession of the
Demised Premises and such possession shall not be disturbed or interfered with
by Landlord or by any person claiming by, through or under Landlord.
2.12 Condition of Demised Premises. Landlord warrants that
at the time of Landlord's delivery of possession of the Demised Premises to
Tenant: (a) the Demised Premises shall comply with the Americans with
Disabilities Act ("ADA"); (b) Landlord shall have received a certificate of
occupancy for the Base Building Work (as defined in the Work Letter attached
hereto as EXHIBIT D) from the City of Boulder; and (e) Landlord shall warrant
the Base Building Work as set forth in Section 2.04 of the Work Letter attached
hereto as EXHIBIT D. Tenant covenants and agrees that, except as otherwise
provided herein, upon taking possession of the Demised Premises, Tenant shall be
deemed to have accepted the Demised Premises "as is" and Tenant shall be deemed
to have waived any warranty of condition or habitability, suitability for
occupancy, use or habitation, fitness for a particular purpose or
merchantability, express or implied, relating to the Demised Premises. Before
the Demised Premises is deemed accepted, Tenant, Tenant's architect, Tenant's
engineers, Tenant's contractors, Tenant's representatives, and any agents of
Tenant shall have access to the Building during business hours, and upon
reasonable prior written or oral notice, in order to inspect the Base Building
Work. Upon such inspection, Tenant shall have the right to identify items not in
conformance with the Work Letter attached hereto, and Landlord shall correct
such items in accordance with the Work Letter. Tenant, its architects,
engineers, contractors and representatives shall comply with all safety
requirements and directives of Landlord when on the construction site.
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ARTICLE 3
TERM OF LEASE
3.1 Lease Term. "Lease Term" shall mean the period of time
specified in the Summary of Basic Lease Terms commencing at midnight on the
Commencement Date as defined below and expiring at midnight on the Expiration
Date, as specified in the Summary of Basic Lease Terms. "Lease Year" shall mean
each twelve (12) month period beginning on the Commencement Date or any
anniversary thereof and ending the immediately preceding day one year later.
3.2 Commencement Date. The term "Commencement Date" shall mean the
Commencement Date set forth in the Summary of Basic Lease Terms. In the event of
a delay in the occurrence of the Commencement Date, this Lease shall not be void
or voidable by Tenant, and Landlord shall not be liable to Tenant for any loss
or damage resulting from such delay; however, all Rent and other charges
hereunder shall xxxxx during the pendency of such delay.
3.3 Early Occupancy or Entry. In the event Landlord permits Tenant
or its agents or contractors to occupy or enter the Demised Premises for any
reason prior to the Commencement Date, Tenant shall be subject to all terms and
provisions hereof other than the obligation to pay Rent. Upon execution hereof,
Tenant shall be permitted to enter the Demised Premises for purposes of
completing Tenant's Work, as more specifically set forth in the Work Letter
attached hereto as EXHIBIT D.
3.4 Options to Renew. Provided that Tenant is not then in default
under the terms and conditions of this Lease and that Tenant has not been in
default more than twice during the then-current Term, Tenant shall have the
option to renew and extend this Lease for two (2) additional term(s) of three
(3) years each (the "Renewal Teams"). The Renewal Terms shall be on the same
terms, provisions, and conditions contained in this Lease, except that Tenant
shall not be entitled to any Tenant Finish Allowance, Basic Rent shall be
adjusted to the Market Rate in the first year of each Renewal Term, in
accordance with the provisions of Section 4.1.1 below, and Basic Rent shall be
increased by a Market Rate escalator on the anniversary of the Commencement Date
in each successive year of each Renewal Term. Tenant shall give Landlord written
notice of its intention to exercise its respective options not more than two
hundred seventy (270) days nor less than one hundred fifty (150) days prior to
the expiration of the prior Term. Failure to notify Landlord within such time
period as to any option shall void all options to renew, and the Lease shall
terminate at the conclusion of the then-current Term. All options granted
hereunder shall be personal to Tenant and shall not be transferred, assigned, or
pledged by Tenant, except to a "Permitted Assignee" as defined in Section 8.16
hereof.
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ARTICLE 4
RENT AND OTHER AMOUNTS PAYABLE
4.1 Basic Rent. Tenant covenants and agrees to pay to Landlord,
without offset, deduction or abatement, basic rent for the full Lease Term in
the amount specified as Basic Rent in the Summary of Basic Lease Terms ("Basic
Rent"). One-half of the Basic Rent and Additional Rent due for the month of
August 2002 shall be abated, and the remaining one-half shall be due and payable
August 15, 2002.
4.1.1 Market Rate Adjustment. The amount of Basic Rent
shall be adjusted to the Market Rate, as defined below, in the first year of
each Renewal Term as indicated in the Summary of Basic Lease Terms and in
Section 3.4 above. As used herein and in the Summary of Basic Lease Terms, the
term "Market Rate" shall refer to the following:
Market Rate shall mean the annual fixed rental rate a willing lessee
would pay and a willing lessor would accept in an arm's length lease of the
Demised Premises at such date upon the terms and provisions of this Lease;
however, in no event shall the Market Rate be less than the amount of Basic Rent
payable by Tenant in the prior year of the Lease. Within thirty (30) days after
Tenant gives written notice exercising its Renewal Term, Landlord shall provide
Tenant with written notice setting forth Landlord's opinion of Market Rate and
Landlord's opinion of the Market Rate annual escalator to apply in each
subsequent year of the Renewal Term ("Landlord's Market Rate Notice"). In the
event Tenant disagrees with Landlord's opinion of Market Rate or the Market Rate
escalator, Tenant may, within fifteen (15) days after Landlord's Market Rate
Notice, give Landlord written notice setting forth Tenant's opinion of Market
Rate and/or the Market Rate escalator ("Tenant's Market Rate Notice"). If
Landlord and Tenant are unable to agree as to the Market Rate or Market Rate
escalator within ten (10) days after Tenant's Market Rate Notice, the parties
shall select an arbitrator to render a final determination of the Market Rate
and/or the Market Rate escalator, as the case may be. The arbitrator shall be a
licensed commercial real estate broker who shall have at least (10) years
continuous experience in the business of commercial real estate brokerage in
Boulder, Colorado, and shall be a member in good standing of the Denver
Metropolitan Commercial Association of Realtors ("DMCAR") and Commercial Brokers
of Boulder ("CBB"), or if either of such organizations is not then in existence,
such other trade group(s) or professional organization(s) as leading commercial
real estate brokers in Boulder, Colorado customarily participate in at such
time. The arbitrator shall conduct such hearings and investigations as the
arbitrator shall deem appropriate and shall, within thirty (30) days after
having been appointed, make a determination of the Market Rate and/or Market
Rate escalator, as the case may be, and that determination by the arbitrator
shall be binding upon Landlord and Tenant. The arbitrator must choose either the
Market Rate and/or Market Rate escalator designated in Landlord's Market Rate
Notice or the Market Rate and/or Market Rate escalator designated in Tenant's
Market Rate Notice. The arbitrator may not choose a Market Rate or Market Rate
escalator that is different from one of the two numbers provided by Landlord and
Tenant. Each party shall pay its own counsel fees and expenses, if any, in
connection with any arbitration under this paragraph, and the parties shall
share equally all other expenses and fees of any such
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arbitration. The determination rendered in accordance with the provisions of
this paragraph shall be final and binding in fixing the Market Rate and Market
Rate escalator. The arbitrator shall not have the power to add to, modify, or
change any of the provisions of this Lease. In the event Landlord and Tenant are
unable to agree upon an arbitrator, Landlord and Tenant shall each select an
arbitrator meeting the qualifications set forth above and those two arbitrators
shall then choose an arbitrator meeting the qualifications set forth above to
make the determination. If for any reason the Market Rate shall not have been
determined prior to the relevant anniversary of the Commencement Date, then,
until the Market Rate has been finally determined in accordance with this
Section, the amount of Basic Rent shall remain the same as payable during the
prior year of the Lease. Upon final determination of the Market Rate, an
appropriate adjustment to the Basic Rent shall be made reflecting such final
determination, and an adjustment shall be made between Landlord and Tenant with
respect to any overpayment or underpayment of Basic Rent from the commencement
of the Option Term to the date of such final determination, together with
interest accruing at the rate of eight percent (8%) per annum.
4.2 Monthly Rent. Basic Rent shall be payable monthly in advance,
without notice, in equal installments, together with installments of Additional
Rent as estimated by Landlord on an annual basis ("Monthly Rent"). One such
monthly installment shall be due and payable on the Commencement Date and a like
monthly installment shall be due and payable on or before the first day of each
calendar month succeeding the Commencement Date during the hereby demised Term,
except that the rental payment for any fractional calendar month at the
commencement or end of the Lease Term shall be prorated based on the actual
number of days in such month.
4.3 Place of Payments. Basic Rent and all other sums payable by
Tenant to Landlord under this Lease shall be paid to Landlord at the place for
payments specified in the Summary of Basic Lease Terms, or such other place as
Landlord may, from time to time, designate in writing.
4.4 Lease a Net Lease and Rent Absolute. It is the intent of the
parties that, except as expressly provided otherwise in this Lease: (i) the
Basic Rent provided in this Lease shall be a net payment to Landlord; (ii) the
Lease shall continue for the full Lease Term notwithstanding any occurrence
preventing or restricting use and occupancy of the Demised Premises, including
any damage or destruction affecting the Demised Premises, and any action by
governmental authority relating to or affecting the Demised Premises; (iii) the
Basic Rent shall be absolutely payable without offset, reduction or abatement
for any cause; (iv) Landlord shall not bear any costs or expenses relating to
the Demised Premises or provide any services or do any act in connection with
the Demised Premises; and (v) Tenant shall pay, in addition to Basic Rent,
Additional Rent to cover costs and expenses relating to the Demised Premises,
the Common Facilities, and the Property, all as hereinafter provided.
4.5 Additional Rent. Tenant covenants and agrees to pay, as
Additional Rent, all costs and expenses which Tenant is obligated to pay to
Landlord under this Lease.
4.6 Tenant's Pro Rata Share. "Tenant's Pro Rata Share" shall mean
the percentage set forth in the Summary of Basic Lease Terms as Tenant's Pro
Rata Share which is the percentage derived by dividing the approximate rentable
square footage of the Demised
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Premises, as set forth in the Summary of Basic Lease Terms, by the approximate
rentable square footage within the Building, as set forth in the Summary of
Basic Lease Terms. The percentage set forth in the Summary of Basic Lease Terms
shall be conclusive and not subject to adjustment for remeasurement of the area
of the Demised Premises or the Building. Landlord shall modify Tenant's Pro Rata
Share from time to time based upon any material increase or reduction in the
rentable square footage of the Building or of the Demised Premises.
4.7 Monthly Deposits for Taxes, Insurance, and Common Facilities
Charges. Tenant will pay to Landlord, monthly in advance, without notice, on
each day that payment of Monthly Rental is due, amounts, as hereinafter
specified, for payment of Tenant's Pro Rata Share of Taxes and Assessments
(defined in Section 5.1), "Casualty Insurance" (defined in Section 6.1),
Landlord liability insurance, if applicable, (defined in Section 6.2), "Common
Facilities Charges" (defined in Section 7.2), and any other charges payable with
respect to the Property hereunder as Additional Rent (collectively "Monthly
Deposits"). The Monthly Deposits shall each be equal to Tenant's Pro Rata Share
of 1/12 of the amounts, as reasonably estimated by Landlord on an annual basis
based upon a written budget, of the annual Taxes and Assessments, annual
Casualty Insurance premiums, annual Landlord liability insurance premiums, and
annual Common Facilities Charges payable with respect to the Property. The
initial Monthly Deposit shall be subject to adjustment as herein provided.
Landlord shall complete a written reconciliation of Monthly Deposits for each
calendar year during the Lease and provide such reconciliation to Tenant no
later than May 1 of the following year. To the extent the Monthly Deposits
exceed Tenant's Pro Rata Share of the actual cost of such items, the excess
amount shall, at Landlord's option, except as may be otherwise provided by law,
either be paid to Tenant or credited against future Monthly Deposits or against
Basic Rent, Additional Rent or other amounts payable by Tenant under this Lease.
To the extent Monthly Deposits are less than Tenant's Pro Rata Share of the
actual cost of such items, Tenant shall pay the shortfall to Landlord within
thirty (30) days after receipt of Landlord's annual reconciliation. If Tenant so
requests in writing within sixty (60) days after the date of Landlord's annual
reconciliation of Monthly Deposits, Tenant may review Landlord's financial
records for the year of such reconciliation concerning Taxes and Assessments,
Casualty Insurance premiums, and Common Facilities Charges, and Tenant, at its
own expense, may have such financial records reviewed by a certified public
accountant reasonably acceptable to Landlord. If the certified public accountant
determines that Landlord has overcharged Tenant, Landlord shall credit Tenant
for the amount of the over assessment, and if the certified public accountant
determines that Landlord has undercharged Tenant, Tenant shall pay the
additional amount due within ten (10) days after the conclusion of such review.
Additionally, if Landlord has overcharged Tenant by five (5) percent or more,
then Landlord shall reimburse Tenant for the reasonable fees of the certified
public accountant. The amounts of such taxes, insurance premiums and expenses
payable by Tenant for the years in which the Lease Term commences and expires
shall be subject to the provisions hereinafter contained in this Lease for
proration of such amounts in such years. Prior to the dates on which payment is
due for such items, Landlord shall make payment of the same, to the extent funds
from Monthly Deposits available therefor. Except for Landlord's obligation to
make payments out of funds available from Monthly Deposits, the making of
Monthly Deposits by Tenant shall not limit or alter Tenant's obligation to pay
taxes and assessments and to maintain insurance as elsewhere provided in this
Lease.
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4.8 Security Deposit. Upon execution of this Lease by Tenant,
Tenant shall deposit with Landlord, the amount specified as a security deposit
in the summary of Basic Lease Terms ("Security Deposit"). The Security Deposit
shall be retained by Landlord and may be applied by Landlord, to the extent
necessary, to pay and cover any loss, cost, damage or expense, including
attorneys' fees, sustained by Landlord by reason of the failure of Tenant to
comply with any provisions, covenant or agreement of Tenant contained in this
Lease. To the extent not necessary to cover such loss, cost, damage or expense,
the Security Deposit, without any interest thereon, shall be returned to Tenant
within thirty (30) days after expiration of the Lease Term or as may be
otherwise provided by law; provided, however, that Landlord may also deduct any
amount from the Security Deposit Landlord estimates may be required to cover any
shortfall in Additional Rent deposits made by Tenant in the final year of the
Lease until such time as Landlord has completed its annual Additional Rent
reconciliation for such year. The Security Deposit shall not be considered as an
advance payment of rent or as a measure of the loss, cost, damage or expense
which is or may be sustained by Landlord. In the event all or any portion of the
Security Deposit is applied by Landlord to pay any such loss, cost, damage or
expense, Tenant shall, from time to time, promptly upon demand, deposit with
Landlord such amounts as may be necessary to replenish the Security Deposit to
its original amount.
4.9 General Provisions as to Monthly Deposits and Security
Deposit. Landlord shall not be required to hold the Security Deposit in an
escrow or trust deposit account, and Landlord may commingle the Monthly Deposits
with Landlord's own funds. Landlord shall not be obligated to pay interest to
Tenant on account of the Monthly Deposits and Security Deposit. In the event of
a transfer by Landlord of Landlord's interest in the Demised Premises, Landlord
or the property manager of Landlord shall deliver the Monthly Deposits and
Security Deposit to the transferee of Landlord's interest, and after such
transfer Landlord and such property manager shall thereupon be discharged from
any further liability to Tenant with respect to such Monthly Deposits and
Security Deposit. In the event of a transfer by Tenant of Tenant's interest in
the Demised Premises, Landlord shall be entitled to return, the Monthly Deposits
and Security Deposit to Tenant's successor in interest and Landlord shall
thereupon be discharged from any further liability with respect to the Monthly
Deposits and Security Deposit.
4.10 [Intentionally Omitted]
ARTICLE 5
TAXES AND ASSESSMENTS
5.1 Covenant to Pay Taxes and Assessments. Tenant covenants and
agrees to pay, as Additional Rent, Tenant's Pro Rata Share of Taxes and
Assessments, as hereinafter defined, which accrue during or are attributable to
the Lease Term. "Taxes and Assessments" shall mean all taxes, assessments, fees
or other impositions, general or special, ordinary or extraordinary, of every
kind or nature, which may be levied, assessed or imposed upon or with respect to
the Property or any part thereof, or upon any building, improvements or personal
property owned by Landlord at any time situated on the Land. "Taxes and
Assessments" shall not include: (i) any federal, state or local income taxes
levied or assessed on Landlord; (ii)
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special utility, levies, fees or charges imposed, assessed or charged directly
associated with construction of the Base Building; (iii) stock, succession,
transfer, franchise, tax on excess profits, gift or estate taxes or inheritance
taxes; or (iv) interest or penalties imposed as a result of late payment of any
"Taxes or Assessments."
5.2 Proration at Commencement and Expiration of Term. Taxes and
Assessments shall be prorated between Landlord and Tenant for the year in which
the Lease Term commences and for the year in which the Lease Term expires as of,
respectively, the date of commencement of the Lease Term and the date of
expiration of the Lease Term, except as herein provided. Additionally, for the
year in which the Lease Term expires, Tenant shall be liable without proration
for the full amount of Taxes and Assessments relating to any improvements,
fixtures, equipment or personal property which Tenant is required to remove or
in fact removes as of the expiration of the Lease Term for which Landlord can
substantiate it paid Taxes and Assessments. Proration of Taxes and Assessments
shall be made on the basis of actual Taxes and Assessments. Tenant's Pro Rata
Share of Taxes and Assessments for the years in which the Lease Term commences
and expires shall be paid and deposited with the Landlord through Monthly
Deposits as hereinabove provided, but, in the event actual Taxes and Assessments
for either year are greater or less than as estimated for purposes of Monthly
Deposits, appropriate adjustment and payment shall be made between the parties,
at the time Landlord reconciles the Monthly Deposits as set forth in Section 4.7
above, and the obligation of Landlord or Tenant, as the case may be, shall
survive the termination or expiration of this Lease.
5.3 Special Assessments. If any Taxes or Assessments are payable
in installments over a period of years, Tenant shall be responsible only for
installments for periods during the Lease Term with proration, as above
provided, of any installment payable prior to or after expiration of the Lease
Term.
5.4 New or Additional Taxes. Tenant's obligation to pay Tenant's
Pro Rata Share of Taxes and Assessments shall include any Taxes and Assessments
of a nature not presently in effect but which may hereafter be levied, assessed
or imposed upon Landlord or upon the Property if such tax shall be based upon or
arise out of the ownership, use or operation of or the rents received from the
Property, other than income taxes or estate taxes of Landlord or those items
excluded in (i) through (iv) described in Section 5.1. For the purposes of
computing Tenant's liability for such new type of tax or assessment, the
Property shall be deemed the only Property of Landlord.
5.5 Landlord's Sole Right to Contest Taxes. Landlord shall have
the sole right to contest any Taxes or Assessments. Landlord shall pay to or
credit Tenant with Tenant's Pro Rata Share of any abatement, reduction or
recovery of any Taxes and Assessments attributable to the Lease Term, less
Tenant's Pro Rata Share of all costs and expenses incurred by Landlord,
including attorneys' fees, in connection with such abatement, reduction or
recovery, except to the extent any such costs and expenses or any portion
thereof have been or will be otherwise charged to Tenant hereunder.
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ARTICLE 6
INSURANCE
6.1 Casualty Insurance. Landlord covenants and agrees to obtain
and keep in full force and effect during the Lease Term, Casualty Insurance as
hereinafter defined. "Casualty Insurance" shall mean property insurance
including "special form" or "all risk" or equivalent coverage with respect to
the Property, in an amount equal to the full replacement cost thereof, with
coinsurance clauses of no less than ninety percent (90%), and with coverage, at
Landlord's option, by endorsement or otherwise, for all risks, vandalism and
malicious mischief, sprinkler leakage, boilers, and rental loss and with a
deductible in the amount for each occurrence as Landlord, in its sole
discretion, may determine from time to time. Casualty Insurance obtained by
Landlord need not name Tenant as an insured party and, at Landlord's option, may
name any mortgagee or holder of a deed of trust as an insured party as its
interest may appear. Tenant covenants and agrees to pay, as Additional Rent, its
Pro Rata Share of the cost of Casualty Insurance obtained by Landlord, and to
pay, as Additional Rent, its Pro Rata Share of the cost of any deductible under
such Casualty Insurance, not to exceed $5,000.00 per occurrence. Tenant shall be
responsible for obtaining, at Tenant's option, cost and expense, insurance
coverage for personal property and leasehold improvements of Tenant and for
business interruption of Tenant.
6.2 Liability Insurance. Tenant covenants and agrees to obtain and
keep in full force and effect during the Lease Term, and to pay the premiums and
costs of, Liability Insurance as herein defined. "Liability Insurance" shall
mean commercial general liability insurance covering public liability for claims
for bodily injury, personal injury, and property damage, with limits of not less
than two million dollars ($2,000,000.00) combined single limit of liability,
with endorsements for assumed contractual liability with respect to the
liabilities assumed by Tenant under this Lease, and with no deductible in excess
of five thousand dollars ($5,000.00) or self-insurance provision contained
therein, unless otherwise approved in writing by Landlord. Landlord shall also
obtain and keep in full force and effect during the Lease Term commercial
general liability insurance covering public liability for claims of bodily
injury, personal injury, and property damage, with respect to Landlord's
ownership, use and operation of the Property with limits of not less than two
million dollars ($2,000,000.00) combined single limit of liability. Tenant
covenants and agrees to pay Tenant's Pro Rata Share of the premiums and costs of
such liability insurance as Additional Rent hereunder.
6.3 Other Insurance. Tenant covenants and agrees to obtain and
keep in full force and effect during the Lease Term, and to pay the premiums and
costs of, any other types of insurance relating to Tenant's occupancy, use, and
operation of the Demised Premises that Landlord or any mortgagee or holder of a
deed of trust on the Property may hereafter require in the exercise of
commercial reasonableness based upon a change in circumstances or risks. Tenant
shall cause such other insurance to be in effect within thirty (30) days after
receipt of written notice from Landlord.
6.4 General Provisions Respecting Insurance. Except as otherwise
approved in writing by Landlord, all insurance obtained by Tenant shall be
written by
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companies licensed to do business in the State of Colorado and having a "General
Policyholders Rating" of at least A-VIII as set forth in the most current issue
of "Best's Insurance Guide."; all policies of Liability Insurance shall name
Landlord, Landlord's manager(s) and agent(s), and the holder of any mortgage or
deed of trust encumbering the Property as additional insureds, as their
interests may appear; shall provide coverage on an occurrence basis; and shall
provide, by certificate of insurance or otherwise, that the insurance coverage
shall not be canceled or altered except upon thirty (30) days' prior written
notice to Landlord and the holder of any such mortgage or deed of trust;
provided, however, that if Tenant's insurer does not offer such insurance with a
provision, by endorsement, payment of an additional premium or otherwise, that
the insurance coverage shall not be canceled or altered except upon thirty (30)
days' prior written notice to Landlord and the holder of any such mortgage or
deed of trust, then such certificate of insurance may provide that the insurer
shall endeavor in good faith to provide thirty (30) days' prior written notice
to Landlord and the holder of any such mortgage or deed of trust prior to
canceling or altering such policy. Certificates of insurance obtained by Tenant
shall be delivered to Landlord who may deposit the same with the holder of any
such first mortgage or deed of trust. Upon written request, Tenant agrees to
provide Landlord with copies of all policies of insurance obtained by Tenant
hereunder.
6.5 Cooperation in the Event of Loss. Landlord and Tenant shall
cooperate with each other in the collection of any insurance proceeds which may
be payable in the event of any loss, including the execution and delivery of any
proof of loss or other actions required to effect recovery.
6.6 Waiver. Anything in this Lease to the contrary
notwithstanding, neither Landlord nor Tenant shall be liable to the other for
any loss or damage to property occurring on the Demised Premises or the Property
or in any manner growing out of or connected with Tenant's use and occupation of
the Demised Premises, or the condition thereof, or of the Property, caused by
the negligence or fault of Landlord or Tenant or of their respective agents
employees, subtenants, licensees, or assignees, to the extent that such loss or
damage to property is coverable by a standard special form or all risk policy
(regardless of whether such insurance is carried or not, or if so carried,
payable to or protects Landlord or Tenant or both) or for which such party is
otherwise reimbursed; and Landlord and Tenant each hereby respectively waives
all right of recovery against the other, its agents, employees, subtenants,
licensees, and assignees, for any such loss or for damage to the property of the
waiving party. Nothing contained in this section shall be construed to impose
any other or greater liability upon either Landlord or Tenant than would have
existed in the absence of this Section 6.6. Each of the parties shall notify
their respective insurance carriers that the foregoing waiver is contained in
this Lease and shall require such carrier to include an appropriate waiver of
subrogation provision in its policies.
ARTICLE 7
UTILITY, OPERATING, MAINTENANCE AND REPAIR EXPENSES
7.1 Utility Charges. Tenant covenants and agrees to contract in
Tenant's own name and to pay, as Additional Rent, all charges for water, sewage,
disposal, storm
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drainage fees, gas, electricity, light, heat, power, telephone or other utility
services used, rendered or supplied to or for the Demised Premises. If any such
utility charges are not separately metered or billable to the Demised Premises,
then Tenant shall pay its Pro Rata Share of such charge; provided, however, that
if in Landlord's reasonable opinion, apportioning utility charges based upon Pro
Rata Shares would be inequitable because of disproportionate consumption of
utilities by tenants of the Building, Landlord shall have the right to apportion
utility charges based upon Landlord's reasonable estimation of relative use of
such utilities. Tenant shall pay to Landlord the apportioned amount of such
utilities as Additional Rent. Subject to Landlord's prior written consent, which
consent shall not be unreasonably withheld, Tenant shall have the right to
utilize the services of a telephone, telecommunications or other utility
provider that is not providing service to the Building as of the date of
Tenant's execution of this Lease. Landlord agrees that it will not unreasonably
refuse to enter into such agreements or licenses as may be reasonably necessary
to permit such provider to provide service to Tenant. Landlord shall have no
obligation to provide space in the Common Areas of the Building for any such
provider to locate its equipment, nor shall Landlord be obligated to incur any
cost or liability of any kind whatsoever in connection with such additional
utility service providers.
7.2 Common Facilities Charges. "Common Facilities Charges" shall
be paid in accordance with Section 4.7 and shall include all costs and expenses
of operating, repairing, maintaining and upkeep of the Property and Common
Facilities including, without limitation, maintenance of landscaping and
plantings, if any; removal of dirt, debris, obstructions and litter from
sidewalks and driveways; repairs, resurfacing, resealing, restriping, sweeping
and snow removal from the Parking Area, sidewalks and driveways; sprinkler
systems; Building signs; stairways; heating, ventilation and air conditioning
systems; roofs; utilities; fire protection systems and sprinkler systems;
exterior painting; water and sewage disposal systems; storm drainage systems;
supplies, personnel, and the cost of any rental of equipment in implementing
such services; charges for professional management of the Property and Common
Facilities, not to exceed five percent (5%) of Basic Rent, including wages,
salaries, benefits and payroll taxes paid by Landlord with respect to its
employees for providing such services; and personal property taxes, licenses and
permits. Landlord may cause any or all of such services to be provided by
employees of Landlord or by independent contractor(s) and subcontractor(s).
Tenant shall pay to Landlord, monthly in advance, without notice, on each day
that payment of Monthly Rental is due, Tenant's Pro Rata Share of the estimated
monthly charge for the Common Facilities, as determined and redetermined from
time to time by Landlord. The initial monthly charge for Common Facilities is
set forth in the Summary of Basic Lease Terms attached hereto. If the total
monthly charges paid by Tenant are less than the Tenant's Pro Rata Share of the
actual charges for Common Facilities, Tenant shall pay the difference to
Landlord within ten (10) days after demand by Landlord. If Tenant's Pro Rata
Share of such actual charges is less than the total monthly charges paid by
Tenant, the difference shall, at Landlord's option, except as may be otherwise
required by law, either be paid to Tenant or credited against future monthly
charges on the next applicable invoice for Basic Rent, Additional Rent or other
amounts payable by Tenant under this Lease.
7.3 Tenant's Maintenance Obligation. Tenant, at its sole cost and
expense, shall maintain, repair, and keep the Demised Premises and all
improvements, fixtures and personal property thereon in good, safe and sanitary
condition, order and repair, loss by fire,
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casualty, condemnation and ordinary wear and tear excepted and only as it
relates to Tenant's use of the Demised Premises, and in accordance with all
applicable laws, ordinances, orders, rules and regulations of governmental
authorities having jurisdiction. Tenant will perform or contract for and
promptly pay for janitorial and cleaning services, security services, interior
painting, interior window washing, replacement of damaged or broken glass and
other breakable materials, replacement of interior light bulbs and light
fixtures in or serving the Demised Premises. All maintenance and repairs to be
performed by Tenant shall be done promptly, in a good and workmanlike fashion,
and without diminishing the original quality of the Demised Premises or the
Property.
7.4 Landlord's Maintenance Obligation. Landlord shall perform
ordinary repairs to and maintenance and replacement of all Common Facilities,
foundations, exterior walls and structural elements of the Building including,
but not limited to, roof, asphalt, windows, grounds, mechanical equipment and
elevator. Tenant shall pay its Pro Rata Share of all costs and expenses with
respect thereto, pursuant to Section 7.2 above, subject to the exemptions
contained in Section 7.5 below.
7.5 Exemptions from Tenant's Obligations. Notwithstanding the
other provisions of this Article 7, Tenant shall not be liable for nor pay any
costs associated with any of the following:
(i) Costs of capital improvements that must
capitalized and depreciated rather than
treated as current expenses under applicable
provisions of the Internal Revenue Code;
(ii) Landlord's income taxes;
(iii) Leasing commissions or advertising or
promotional expenses incurred in the leasing
of the Building;
(iv) Ground rent, interest on debt or
amortization payments on any mortgages or
deeds of trust on the Building;
(v) Costs of repairs or other work occasioned by
fire, windstorm or other casualty to the
extent of insurance proceeds received by
Landlord or that would have been covered by
a prudent landlord in Boulder, Colorado;
(vi) Depreciation and depreciation reserves;
(vii) Attorney's fees associated with customary
lease review and negotiation;
(viii) Defects in the construction of the Building
or the Property;
(ix) Landlord's corporate overhead including
costs associated with the operation of the
business of the ownership entity that
constitutes Landlord and including salaries
of
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executives or employees above the level of
property manager;
(x) Any expense reimbursed to Landlord from
another source;
(xi) Any charitable, political or civic
contributions made by or on behalf of the
Landlord;
(xii) Contributions with respect to employee
benefit plans or programs maintained by or
on behalf of the Landlord;
(xiii) Any payment made by Landlord that is not
legal under any local, state or federal law,
or costs incurred due to violations by
Landlord or any other tenant in Building of
the terms and conditions of any other lease,
or fines imposes on or reimbursed by
Landlord and not caused by Tenant for
violation of any governmental rule or
authority;
(xiv) Damages and repairs necessitated by the
gross negligence or willful misconduct of
Landlord's employees, agents or contractors;
(xv) Executive salaries or salaries of service
personnel to the extent that such executive
or personnel perform services that are not
directly related to the operation,
management, repair or maintenance of the
Building;
(xvi) Legal fees and expenses, accountants' fees
and expenses and other fees and expenses
incurred in connection with disputes with
tenants in or other occupants of Building,
the manager, the lender or associated with
the enforcement of any lease of defense of
Landlord's title to or interest in the
Building or any part thereof or associated
with violations of law by Landlord;
(xvii) Services, installations or benefits
furnished to other tenants to the extent in
excess of Building standard or not made
generally available to Tenant; and
(xviii) Any other expenses that are not normally
charged as an operating expense by other
landlords of comparable Class A buildings in
Boulder, Colorado.
(xix) Costs of services or work, including
painting and decorating and tenant change
work which Landlord performs for any tenant
or tenant's space in the Building;
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(xx) Costs of repairs or rebuilding necessitated
by condemnation;
(xxi) Costs of selling, syndicating, financing or
refinancing, mortgaging or hypothecating any
of Landlord's interest in the Property;
(xxii) Costs of any disputes between Landlord and
its employees, whether or not engaged
directly in Building operations;
(xxiii) Costs of construction of additional
buildings or parking structures or
extensions to existing buildings or parking
structures;
(xxiv) Any bad debt loss, rent loss or reserves for
bad debt loss or rent loss;
(xxv) Costs of the initial construction or costs
directly related to the initial construction
of the Building or any other improvement on
the Land, including costs of the parking
garage, landscaping or costs of correcting
defects in construction; and
(xxvi) Electrical power costs to the extent any
tenant directly contracts with the local
public service company.
7.6 Services. Landlord shall provide, to be charged as Common
Facilities Charges or Utility Charges as provided herein (except to the extent
any utilities are billed directly to Tenant by the utility provider paid for
directly by Tenant), in accordance with standards from time to time prevailing
in Class A office buildings in Boulder, Colorado: (i) hot and cold running water
at those points of supply in the Common Facilities and cold running water to the
Demised Premises; (ii) heated or cooled air, electrical current and maintenance;
(iii) general use of passenger elevators for ingress and egress to the Demised
Premises; and (iv) trash removal service from the common dumpsters serving the
Building. Landlord shall not be liable for damages or consequential damages or
in any other way in the event of loss, damage, failure, interruption, defect or
change in the quantity or character or supply of electricity furnished to the
Demised Premises or Building or of any other utility, including, but not limited
to, air conditioning, heat or water, and Tenant agrees that such supply may be
interrupted in case of emergency, provided Landlord uses reasonable diligence to
provide such services; nor shall the foregoing be construed as a constructive
eviction of Tenant, or, except as may be otherwise expressly provided herein,
excuse Tenant from failing to perform any of its obligations hereunder. Landlord
shall use commercially reasonable efforts to provide Tenant as much advance
notice as reasonably possible of any interruption and to limit the same to times
other than Tenant's regular business hours. Landlord shall only be required to
maintain such services as are reasonably possible under the circumstances in the
event all or any part of such systems, facilities and equipment are destroyed,
damaged or impaired until completion of the necessary repair or replacement.
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Subject to the provisions of this Section 7.6, Landlord may temporarily
discontinue any services at such times as may be necessary or advisable due to
causes beyond the reasonable control of Landlord. No reduction or discontinuance
of the services described in this Section 7.6 shall be construed as an eviction
of Tenant or, except as may be otherwise expressly provided herein, release
Tenant from any of its obligations under this Lease.
ARTICLE 8
OTHER COVENANTS OF TENANT
8.1 Limitation on Use by Tenant. Tenant covenants and agrees to
use the Demised Premises only for the use or uses set forth as Permitted Uses by
Tenant in the Summary of Basic Lease Terms and for no other purposes, except
with the prior written consent of Landlord. Landlord has made no investigation
of and makes no representations or warranties whatsoever regarding the
permissibility of Tenant's Permitted Uses under applicable zoning or land use
laws, rules, regulations or approvals.
8.2 Compliance with Laws. Tenant covenants and agrees that at all
times during the Lease Term, Tenant's use of the Demised Premises shall be in
compliance with all zoning, land use, and other applicable laws, rules, and
regulations with respect thereto, and that nothing shall be done or kept on the
Demised Premises in violation of any applicable law, ordinance, order, rule or
regulation of any governmental authority having jurisdiction, including, but not
limited to, the City of Boulder, and that the Demised Premises shall be used,
kept and maintained in compliance with any such law, ordinance, order, rule or
regulation and with the certificate of occupancy issued for the Building and/or
the Demised Premises.
8.3 Compliance with Insurance Requirements. Tenant covenants and
agrees that nothing shall be done or kept on the Demised Premises which might
impair or increase the cost of insurance maintained with respect to the Demised
Premises or the Property, which might increase the insured risks or which might
result in cancellation of any such insurance which has been disclosed to Tenant.
8.4 No Waste or Impairment of Value. Tenant covenants and agrees
that nothing shall be done or kept on the Demised Premises or the Property which
would impair the value of the Demised Premises or the Property, or which would
constitute excessive wear and tear or waste.
8.5 No Overloading. Tenant Covenants and agrees that, after
completion of Tenant's Work in accordance with plans approved plans and
specifications approved by Landlord in accordance with EXHIBIT D attached
hereto, nothing shall be done or kept on the Demised Premises or the Building
and that no improvements, changes, alterations, additions, maintenance or
repairs shall be made to the Demised Premises which would impair the structural
soundness of the Building, improvements which would result in an overload of
electrical lines serving the Building or cause excessive tripping of circuit
breakers, which would interfere with any telephone lines or equipment or any
other electric or electronic equipment in the Building or on any adjacent or
nearby property, which would place
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excessive demands on or exceed the capacity of the water lines or sewer lines
servicing the Building, or which would in any other way overload any portion of
the Property or Improvements or any equipment or facilities servicing the same.
In the event of violations hereof, Tenant covenants and agrees to immediately
remedy the violation at Tenant's expense and in compliance with all requirements
of governmental authorities and insurance underwriters.
8.6 No Nuisance, Noxious or Offensive Activity. Tenant covenants
and agrees that no noxious or offensive activity shall be carried on upon the
Demised Premises or the Property nor shall anything be done or kept on the
Demised Premises or the Property which may be or become a public or private
nuisance or which may cause embarrassment, disturbance, or annoyance to others
in the Building or on adjacent or nearby property.
8.7 No Annoying Lights, Sounds or Odors. Tenant covenants and
agrees that no light shall be emitted from the Demised Premises which is
unreasonably bright or causes unreasonable glare; no sound shall be emitted from
the Demised Premises which is unreasonably loud or annoying; and no odor shall
be emitted from the Demised Premises which is unreasonably noxious or offensive
to others in the Building or on adjacent or nearby property.
8.8 No Unsightliness. Tenant covenants and agrees that no
unsightliness shall be permitted on the Demised Premises or the Property that is
visible from any adjacent or nearby property. Without limiting the generality of
the foregoing, all unsightly conditions, equipment, objects and conditions shall
be kept enclosed within the Demised Premises; no refuse, scrap, debris, garbage,
trash, bulk materials or waste shall be kept, stored or allowed to accumulate on
the Demised Premises or the Property except as may be enclosed within the
Demised Premises; except as otherwise expressly provided herein, all pipes,
wires, poles, antennas and other facilities for utilities or the transmission or
reception of audio or visual signals or electricity shall be kept and maintained
underground or enclosed within the Demised Premises or appropriately screened
from view; and no temporary structure shall be placed or permitted on the
Demised Premises or the Property without the prior written consent of Landlord.
8.9 No Animals. Tenant covenants and agrees that no animals shall
be permitted or kept on the Demised Premises or the Property; provided, however,
that nothing herein shall be construed as prohibiting qualified service animals
which may not be legally excluded from the Demised Premises or Property pursuant
to the Americans with Disabilities Act or any similar law, rule or regulation
applicable to the Property.
8.10 Restriction on Signs and Exterior Lighting. Tenant covenants
and agrees that, except as approved in writing by Landlord, which approval shall
not be unreasonably withheld, no signs or advertising devices of any nature
shall be erected or maintained by Tenant on the Demised Premises or the Property
and no exterior lighting shall be permitted on the Demised Premises or the
Property. All signs and advertising devices installed or displayed by Tenant
shall comply with all applicable laws and regulations relating thereto, and
Tenant shall be responsible for obtaining, at its sole cost and expense, all
required permits for the same. Prior to vacating the premises, Tenant shall, at
its sole cost
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and expense, promptly remove all of its signs and advertising devices, and upon
the removal or alteration of any of its signs and advertising devices for any
reason, Tenant shall repair, paint, and restore the surface beneath such signs
damaged by such removal to substantially the same condition as before
installation of Tenant's signs and advertising devices.
8.11 No Violation of Covenants. Tenant covenants and agrees not to
commit, suffer or permit any violation of any covenant, condition of restriction
affecting the Demised Premises or the Property of which Tenant has received
written notice.
8.12 Restriction on Changes and Alterations. Subsequent to
completion of Tenant's Work as described in the Work Letter, Tenant covenants
and agrees not to improve, change, alter, add to, remove or demolish any
improvements on the Demised Premises, ("Changes"), without the prior written
consent of Landlord which consent shall not be unreasonably withheld,
conditioned or delayed; provided, however, Tenant may make any "Permitted
Changes" without Landlord's approval. "Permitted Changes" shall mean: (i)
ordinary office decoration and redecoration; (ii) installation of data,
telephone or communications cabling, and (iii) Changes not visible from the
exterior of the Demised Premises that do not affect the structure or mechanical
systems of the Building, do not require the issuance of a building permit from
the City of Boulder, and which cost less than $10,000 to complete. If Landlord
approves any Changes, Tenant shall: (i) comply with all conditions which may be
reasonably imposed by Landlord in connection with such consent; and (ii) pay to
Landlord the reasonable costs and expenses of Landlord for architectural,
engineering, legal or other consultants which may be reasonably incurred by
Landlord in determining whether to approve any such Changes. Landlord's consent
to any Changes and the conditions imposed in connection therewith shall be
subject to all requirements and restrictions of any holder of a mortgage or deed
of trust encumbering the Property. If such consent is given, no such Changes
shall be permitted unless: (i) Tenant shall have procured and paid for all
necessary permits and authorizations from any governmental authorities having
jurisdiction; (ii) such Changes will not reduce the value of the Property, and
will not affect or impair existing insurance on the Property; and (iii) Tenant,
at Tenant's sole cost and expense, shall maintain or cause to be maintained
workmen's compensation insurance covering all persons employed in connection
with the work and obtains liability insurance covering any loss or damage to
persons or property arising in connection with any such Changes and such other
insurance or bonds as Landlord may reasonably require. Tenant covenants and
agrees that any such Changes approved by Landlord shall be completed with due
diligence and in a good and workmanlike fashion and in compliance with all
conditions reasonably imposed by Landlord and all applicable permits,
authorizations, laws, ordinances, orders, rules and regulations of governmental
authorities having jurisdiction and that the costs and expenses with respect to
such Changes shall be paid promptly when due and that the Changes shall be
accomplished free of liens of mechanics and materialmen. Tenant covenants and
agrees that all such Changes shall become the property of the Landlord at the
expiration of the Lease Term, unless Tenant and Landlord otherwise agree in
writing. If Landlord so requires as a condition of its approval at the time
Landlord grants its consent to such Changes, Tenant shall, at or prior to
expiration of the Lease Term and at its sole cost and expense, remove such
Changes and restore the Demised Premises to their condition prior to such
Changes.
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8.13 No Mechanic's Liens. Tenant covenants and agrees not to permit
or suffer, and to cause to be removed and released, any mechanic's,
materialmen's or other lien on account of supplies, machinery, tools, equipment,
labor or material furnished or used in connection with the construction,
alteration, improvement, addition to or repair of the Demised Premises by,
through or under Tenant. At least fifteen (15) days prior to any Changes, Tenant
shall provide written notice to Landlord of the date of commencement of any
Changes. Prior to the commencement of any Changes, Tenant shall post in
conspicuous locations and maintain on the Demised Premises and Building Notices
of Owner's Non-Liability in the form attached hereto as EXHIBIT C or in such
other form as Landlord may from time to time require in writing of which it has
informed Tenant prior to the above fifteen (15) day period. Tenant shall have
the right to contest, in good faith and with reasonable diligence, the validity
of any such lien or claimed lien, provided that Tenant shall give to Landlord
such security as may be reasonably requested by Landlord to insure the payment
of any amounts claimed, including interest and costs, and to prevent any sale,
foreclosure or forfeiture of any interest in the Property on account of any such
lien, including, without limitation, bonding, escrow or endorsement of the title
insurance policy of Landlord and any holder of a mortgage or deed of trust
encumbering the Property. If Tenant so contests, then on final determination of
the lien or claim for lien, Tenant shall promptly pay any judgment rendered,
with interest and costs, and will cause the lien to be released and any judgment
satisfied.
8.14 No Other Encumbrances. Tenant covenants and agrees not to
obtain any financing secured by Tenant's interest in the Demised Premises and
not to encumber the Demised Premises or Landlord's or Tenant's interest therein,
without the prior written consent of Landlord, and to keep the Demised Premises
free from all liens and encumbrances except liens and encumbrances existing upon
the date of commencement of the Lease Term or liens and encumbrances created by
Landlord. Nothing in this Section 8.14 shall prevent Tenant from obtaining
financing secured by Tenant's personal property located in the Demised Premises.
8.15 Subordination to Landlord Mortgages. Tenant covenants and
agrees that this Lease and Tenant's interest in the Demised Premises shall be
junior and subordinate to any mortgage or deed of trust now or hereafter
encumbering the Property. In the event of a foreclosure of any such mortgage or
deed of trust, Tenant shall attorn to the parry acquiring title to the Property
as the result of such foreclosure. No act or further agreement by Tenant shall
be necessary to establish the subordination of this Lease to any such mortgage
or deed of trust, which is self-executing, but Tenant covenants and agrees, upon
request to Landlord, to execute a commercially reasonable Subordination,
Non-Disturbance and Attornment Agreement. Alternatively, Tenant covenants and
agrees that, at the option of any mortgagee or beneficiary under a deed of
trust, Tenant shall execute such commercially reasonable documents as may be
necessary to establish this Lease and Tenant's interest in the Demised Premises
as superior to any such mortgage or deed of trust. If Tenant is requested to
execute any document confirming the subordination of this Lease to any mortgage
or deed of trust, Tenant's obligation to do so shall be conditioned upon such
document containing a non-disturbance covenant in favor of Tenant.
8.16 Assignment or Subletting. Tenant covenants and agrees, except
for "Permitted Transfers" as defined below, not to make or permit a "Transfer,"
as hereinafter defined, without Landlord's prior written consent, which consent
shall not be unreasonably withheld, conditioned or delayed. A Transfer by Tenant
shall include an assignment of this Lease,
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a sublease of all or any part of the Demised Premises, any transfer of 50% or
more of the voting stock or interests of Tenant, or any assignment, sublease,
license, franchise, transfer, mortgage, pledge or encumbrance of all or any part
of Tenant's interest under this Lease or in the Demised Premises, by operation
of law or otherwise, or the use or occupancy of all or any part of the Demised
Premises by anyone other than Tenant. Any such Transfer by Tenant without
Landlord's written consent shall be void and shall constitute a default under
this Lease. In the event Landlord consents to any Transfer by Tenant, Tenant
shall not be relieved of its obligations under this Lease and Tenant shall
remain liable, jointly and severally and as a principal, and not as a guarantor
or surety, under this Lease, to the same extent as though no Transfer by Tenant
had been made, unless specifically provided to the contrary in Landlord's prior
written consent. The acceptance of rent by Landlord from any person other than
Tenant shall not be deemed to be a waiver by Landlord of the provisions of this
Section or of any other provision of this Lease and any consent by Landlord to
Transfer by Tenant shall not be deemed a consent to any subsequent Transfer by
Tenant. In giving or withholding its consent to a proposed Transfer by Tenant,
Landlord shall be entitled to consider any reasonable factor, including but not
limited to the following: (a) financial strength and credit history of the
proposed subtenant/assignee; (b) business reputation of the proposed
subtenant/assignee; (c) proposed use of the Demised Premises by the proposed
subtenant/assignee; (d) managerial and operational skills of the proposed
subtenant/assignee; and (e) compatibility of the proposed subtenant/assignee
with other tenants of the Building. Notwithstanding the foregoing, provided
Tenant is not in default, Tenant may make a "Permitted Transfer," as defined
below, without Landlord's prior consent, provided that Tenant gives Landlord
written notice of such Transfer within thirty (30) days after the effective date
thereof and provides Landlord copies of documents executed in connection with
such Transfer. A Transfer shall be deemed a "Permitted Transfer" if: (i) such
Transfer is a bona fide Transfer and not a subterfuge; (ii) the Transfer is made
to an Affiliate of Tenant; and (iii) the Affiliate to which the Transfer is made
has a net worth immediately after the Transfer that is equal to or greater than
Tenant's net worth immediately prior to the Transfer. For the purposes of
Section 8.16 only, the term "Affiliate" shall mean any parent, subsidiary or
entity that controls, is controlled by or is under common control with Tenant,
and any merger partner or joint venture partner of Tenant.
If, pursuant to any Transfer not in violation of this Lease, Tenant
collects any rental or other amounts from a subtenant or assignee in excess of
the Basic Rent and Additional Rent due hereunder, Tenant shall be permitted to
retain all such excess amounts.
8.17 Annual Financial Statements. Tenant covenants and agrees to
furnish to Landlord, not more than once per year during the Lease Term and any
renewal or extension thereof, within fifteen (15) days after Landlord's written
request, copies of Tenant's most recent year-end financial statements. Other
than as required by a potential lender or mortgagee, Landlord covenants and
agrees that it will not deliver or otherwise share such financial statements
with any third party and shall treat the information contained therein as
confidential. The financial statements shall include a balance sheet as of the
end of, and a statement of profit and loss for, the preceding fiscal year of
Tenant and, if regularly prepared by Tenant, a statement of sources and use of
funds for the preceding fiscal year of Tenant.
8.18 Payment of Income and Other Taxes. Tenant covenants and agrees
to pay promptly when due all personal property taxes on personal property of
Tenant on the Demised Premises and any applicable federal, state and local
income taxes, sales taxes, use
20
taxes, Social Security taxes, unemployment taxes and taxes withheld from wages
or salaries paid to Tenant's employees, the nonpayment of which might give rise
to a lien on the Demised Premises or Tenant's interest therein, and to furnish,
if requested by Landlord, evidence of such payments.
8.19 Estoppel Certificates. Tenant covenants and agrees to execute,
acknowledge and deliver to Landlord, upon Landlord's written request, a written
Estoppel Certificate certifying that this Lease is unmodified (or, if modified,
stating the modifications) and in full force and effect; stating the dates to
which Basic Rent has been paid, stating the amount of the Security Deposit held
by Landlord; stating the amount of the Monthly Deposits held by Landlord for the
then calendar year; and stating whether or not Landlord is in default under this
Lease (and, if so, specifying the nature of the default); and stating such other
matters, to the extent true, concerning this Lease as Landlord may reasonably
request. Tenant agrees that such statement may be delivered to and relied upon
by any existing or prospective mortgagee or purchaser of the Property. Tenant
agrees that a failure to deliver such a statement within fifteen (15) days after
written request from Landlord 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 by Landlord under this Lease; and
that any representation by Landlord with respect to Basic Rent, the Security
Deposit and Monthly Deposits are true. In the event Tenant requests any changes
or revisions to any such Estoppel Certificate, Tenant shall pay to Landlord,
within ten (10) days after demand by Landlord, the reasonable costs and expenses
of Landlord in connection the negotiation, drafting and revision of such
Estoppel Certificate, including attorneys' fees.
8.20 Landlord Right to Inspect and Show Demised Premises and to
Install "For Sale" Signs. Tenant covenants and agrees that Landlord and the
authorized representatives of Landlord shall have the right to enter the Demised
Premises after reasonable notice to Tenant, and at any time reasonably
acceptable to Tenant, for the purposes of inspecting, repairing or maintaining
the same or, after written notice and a reasonable opportunity to perform,
performing any obligations of Tenant which Tenant has failed to perform
hereunder, or for the purposes of showing the Demised Premises to any existing
or prospective mortgagee or purchaser of the Property, or during the last 180
days of the Lease Term, any prospective lessee of the Demised Premises. In no
event shall any such entry interrupt the conduct of Tenant's business. Tenant
covenants and agrees that Landlord may at any time and from time to time place
on the Property or the Demised Premises a sign advertising the Property or the
Demised Premises for sale or for lease. Landlord will not enter or place a sign
on the Demised Premises for purpose of leasing Demised Premises except with
Tenant's permission or within six (6) months of the expiration of the Lease Term
or Renewal Term.
8.21 Landlord Right to Renovate, Expand or Modify Building. Tenant
covenants and agrees that Landlord shall have the right to renovate, expand,
reconstruct, or otherwise modify the Building and/or Common Facilities at any
time, in Landlord's sole discretion; provided, however, that no such renovation,
expansion, reconstruction, or other modification shall permanently and
materially interfere with Tenant's use or occupancy or right to the quiet use
and enjoyment of the Demised Premises according to the terms of this Lease. In
the event any renovation, expansion, reconstruction or other modification of the
21
Building or Common Facilities by Landlord causes a temporary material
interference with Tenant's use and enjoyment of the Demised Premises, then
during the period of such interference, there shall be an abatement of Basic
Rent and Additional Rent proportionate to the extent of the space and period of
time that Tenant is unable to use and enjoy the Demised Premises.
8.22 [Intentionally omitted]
8.23 Landlord Title to Fixtures, Improvements and Equipment. Tenant
covenants and agrees that all fixtures and improvements on the Demised Premises
and all attached or installed equipment and personal property relating to the
use and operation of the Demised Premises (as distinguished from operations
incident to the business of Tenant), including all plumbing, heating, lighting,
electrical and air conditioning fixtures and equipment, and whether now or
hereafter located upon the Demised Premises ("Building Fixtures"), shall be and
remain the property of the Landlord upon expiration of the Lease Term. If Tenant
desires to install any Building Fixtures that Tenant desires to retain ownership
of and have the right to remove at the expiration or termination of the Lease,
Tenant shall, prior to installation thereof, give Landlord written notice
specifying in reasonable detail the Building Fixtures Tenant desires to retain
ownership of and have the right to remove. Under no circumstances shall Tenant
be permitted to take ownership of or remove any Building Fixtures paid for with
the Tenant Finish Allowance.
8.24 Removal of Tenant's Equipment. Tenant covenants and agrees to
remove, at or prior to the expiration of the Lease Term, all of Tenant's
Equipment, as hereinafter defined. "Tenant's Equipment" shall mean all trade
fixtures, equipment, apparatus, machinery, signs, furniture, furnishings and
personal property used in the operation of the business of Tenant (as
distinguished from the use and operation of the Demised Premises) and all
Building Fixtures which Tenant retained ownership of and has the right to remove
pursuant to Section 8.23. If such removal shall injure or damage the Demised
Premises Tenant covenants and agrees, at its sole cost and expense, at or prior
to the expiration of the Lease Term, to repair such injury and damage in good
and workmanlike fashion and to place the Demised Premises in the same condition
as the Demised Premises were in upon substantial completion of Tenant's Work. If
Tenant fails to remove any Tenant's Equipment by the Expiration of the Lease
Term, Landlord may, at its option, keep and retain any such Tenant's Equipment
or dispose of the same and retain any proceeds therefrom, and Landlord shall be
entitled to recover from Tenant any costs or expenses of Landlord in removing
the same and in restoring the Demised Premises in excess of the actual proceeds,
if any, received by Landlord from disposition thereof. Tenant releases and
discharges Landlord from any and all claims and liabilities of any kind arising
out of Landlord's disposition of Tenant's Equipment.
8.25 Tenant Indemnification of Landlord. Subject to Section 6.6 and
except for Landlord's gross negligence or willful misconduct, Tenant covenants
and agrees to protect, indemnify, defend, and hold Landlord harmless from and
against all liability, obligations, claims, damages, penalties, causes of
action, costs and expenses, including attorneys' fees, imposed upon, incurred by
or asserted against Landlord by reason of: (a) any accident, injury to or death
of any person or loss of or damage to any property occurring in the Demised
Premises; (b) any act or omission of Tenant or Tenant's officers, employees, or
agents; (c) any
22
use which may be made of, or condition existing upon, the Demised Premises; (d)
any improvements, fixtures or equipment upon the Demised Premises; (e) any
failure on the part of Tenant to perform or comply with any of the provisions,
covenants or agreements of Tenant contained in this Lease; (f) any violation of
any law, ordinance, order, rule or regulation of governmental authorities having
jurisdiction by Tenant or Tenant's officers, employees, or agents; and (g) any
repairs, maintenance of Changes to the Demised Premises made or caused to be
made by, through or under Tenant. Tenant further covenants and agrees that, in
case any action, suit or proceeding is brought against Landlord by reason of any
of the foregoing, Tenant will, at Tenant's sole cost and expense, pay all costs
and expenses to defend Landlord in any such action, suit or proceeding.
Notwithstanding the foregoing, Tenant shall only be obligated to indemnify
Landlord to the extent such liability, obligations, claims, damages, penalties,
causes of action, costs or expenses arise by reason of, or otherwise relate to,
Tenant or Tenant's officers, employees, or agents, or any acts or omissions of,
or conditions created by, any such persons.
8.26 Landlord Liability and Indemnification of Tenant. Subject to
Section 6.6, Landlord shall be liable to Tenant for Landlord's gross negligence
and willful misconduct. Tenant waives and releases any claims Tenant may have
against Landlord or Landlord's officers, agents or employees for loss, damage or
injury to person or property sustained by Tenant or Tenant's officers, agents,
employees, guests, invitees, or anyone claiming by, through or under Tenant
resulting from any cause whatsoever other than gross negligence or willful
misconduct of Landlord or Landlord's officers, agents or employees.
Notwithstanding anything to the contrary contained in this Lease, Landlord, its
beneficiaries, successors and assigns, shall not be personally liable with
respect to any of the terms, covenants and conditions of this Lease, and Tenant
shall look solely to the equity of Landlord in the Property in the event of any
default or liability of Landlord under this Lease, such exculpation of liability
to be absolute and without any exception whatsoever. Landlord covenants and
agrees to indemnify Tenant against any claim asserted against Tenant by reason
of the gross negligence or willful misconduct of Landlord or Landlord's
officers, agents or employees.
8.27 Release upon Transfer by Landlord. In the event of a transfer
by Landlord of the Property or of Landlord's interest as Landlord under this
Lease, Landlord's successor or assignee shall take subject to and be bound by
this Lease and, in such event, provided there is a written assignment of this
Lease to the transferee including a transfer of the Security Deposit or credit
therefor, Tenant covenants and agrees that Landlord shall be released from all
obligations of Landlord under this Lease, except obligations which arose and
matured prior to such transfer by Landlord; that Tenant shall thereafter look
solely to Landlord's successor or assign for satisfaction of the obligations of
Landlord under this Lease; and that, upon demand by Landlord or Landlord's
successor or assign, Tenant shall attorn to such successor or assign.
8.28 Rules and Regulations. Tenant shall observe and comply with
the current Rules and Regulations attached hereto as EXHIBIT E. Landlord may
reasonably promulgate additional Rules and Regulations in the future and amend
any existing Rules and Regulations by providing written notice thereof to
Tenant, provided a written copy is delivered to Tenant. In the event of a
conflict between this Lease and the Rules and
23
Regulations, the terms and conditions of this Lease shall control. Landlord
shall not be responsible to Tenant for the failure of any other tenant of the
Building to observe or comply with any of the rules or regulations, but Landlord
shall make reasonable efforts to enforce the rules and regulations (if any) for
the benefit of all tenants of the Building.
8.29 Monitoring Equipment. Should equipment for monitoring fire
systems and/or security systems be deemed necessary by Tenant or be required for
the Demised Premises by federal, state, or local governing agencies because of
Tenant's equipment, the nature of Tenant's business, or Tenant's modification of
the Demised Premises, Tenant shall be responsible for installation of such
monitoring system, for any required building permits, monthly monitoring fees,
and any fines, penalties or other charges for false alarms. Should such
monitoring systems be otherwise required by federal, state, or local governing
agencies, or deemed by Landlord to be advisable for the operation of the
Building, Landlord shall be responsible for installation of such monitoring
systems, and all costs and expenses relating thereto shall be included as Common
Facilities Charges. Should Landlord deem advisable any monitoring system which
carries greater costs and expenses than a monitoring system that would be deemed
advisable by a reasonably prudent landlord of a comparable building in Boulder,
Colorado, then Tenant shall be responsible only for the cost or expense that
would accompany the reasonably prudent landlord's monitoring system.
ARTICLE 9
ENVIRONMENTAL MATTERS
9.1 Definitions.
9.1.1 Hazardous Material. Hazardous Material means any
substance:
9.1.1.1 which is or becomes defined as a "hazardous
material," "hazardous waste," "hazardous substance," "regulated substance,"
"pollutant" or "contaminant" under any federal, state or local statute,
regulation, rule or ordinance or amendments thereto including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C. Section 9601 et seq.) and the Resource Conservation and Recovery
Act (42 U.S.C. Section 6901 et seq.); or
9.1.1.2 which is toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise
hazardous and is or becomes regulated by any governmental authority, agency,
department, commission, board, agency or instrumentality of the United States,
the State of Colorado or any political subdivision thereof; or
9.1.1.3 the presence of which on the premises causes
or threatens to cause a nuisance upon the premises or to adjacent properties or
poses or threatens to pose a hazard to the health or safety of persons on or
about the premises; or
9.1.1.4 which contains gasoline, diesel fuel or
other petroleum hydrocarbons; or
24
9.1.1.5 which contains polychlorinated bipheynols
(PCBs), asbestos or urea formaldehyde foam insulation; or
9.1.1.6 radon gas.
9.1.2 Environmental Requirements. Environmental
Requirements means all applicable present and future statutes, regulations,
rules, ordinances, codes, licenses, permits, orders, approvals, plans,
authorizations, concessions, franchises, and similar items, of all governmental
agencies, departments, commissions, boards, bureaus, or instrumentalities of the
United States, states and political subdivisions thereof and all applicable
judicial, administrative, and regulatory decrees, judgments, and orders relating
to the protection of human health or the environment.
9.1.3 Environmental Damages. Environmental Damages means
all claims, judgments, damages, losses, penalties, fines, liabilities (including
strict liability), encumbrances, liens, costs, and expenses of investigation and
defense of any claim, whether or not such claim is ultimately defeated, and of
any good faith settlement or judgment, of whatever kind or nature, contingent or
otherwise, matured or unmatured, foreseeable or unforeseeable, including without
limitation reasonable attorneys' fees and disbursements and consultants' and
witnesses' fees, any of which are incurred at any time as a result of the
existence of Hazardous Material upon, about, beneath the premises or migrating
or threatening to migrate to or from the Demised Premises, or the existence of a
violation of Environmental Requirements pertaining to the Demised Premises.
9.2 Tenant's Obligation to Indemnify, Defend and Hold Harmless.
Tenant, its successors, assigns and guarantors, agree to indemnify, defend,
reimburse and hold harmless the following persons from and against any and all
Environmental Damages ARISING FROM ACTIVITIES OF TENANT OR ITS EMPLOYEES,
AGENTS, CONTRACTORS, SUBCONTRACTORS, OR GUESTS, LICENSEES, OR INVITEES which (1)
result in the presence of Hazardous Materials upon, about or beneath the Demised
Premises or migrating to or from the Demised Premises, or (2) result in the
violation of any Environmental Requirements pertaining to the Demised Premises
and the activities thereon:
9.2.1 Landlord;
9.2.2 any other person who acquires an interest in the
premises in any manner, including but not limited to purchase at a foreclosure
sale or otherwise; and
9.2.3 the directors, officers, shareholders, employees,
partners, agents, contractors, subcontractors, experts, licensees, affiliates,
lessees, mortgagees, trustees, heirs, devisees, successors, assigns, guests and
invitees of such persons.
This obligation shall include, but not be limited to, the burden and
expense of investigating and defending all claims, suits and administrative
proceedings (with counsel reasonably approved by the indemnified parties),
including attorneys' fees and expert witness and consulting fees, even if such
claims, suits or proceedings are groundless, false or fraudulent, and conducting
all negotiations of any description, and paying and discharging, when and as the
same become due, any and all judgments, penalties or other sums due against
25
such indemnified persons, and all such expenses incurred in enforcing the
obligation to indemnify. Tenant, at its sole expense, may employ additional
counsel of its choice to associate with counsel representing the indemnified
parties.
9.3 Tenant's Obligation to Remediate. Notwithstanding the
obligation of Tenant to indemnify Landlord pursuant to this agreement, Tenant
shall, upon demand of Landlord, and at its sole cost and expense, promptly take
all actions to remediate the Demised Premises, Building, and Land which are
reasonably necessary to mitigate Environmental Damages or to allow full economic
use of the Building and Land, or are required by Environmental Requirements,
which remediation is necessitated by the 1) introduction of a Hazardous Material
upon, about or beneath the Demised Premises or 2) a violation of Environmental
Requirements, EITHER OF WHICH IS CAUSED BY THE ACTIONS OF TENANT, ITS EMPLOYEES,
AGENTS, CONTRACTORS, SUBCONTRACTORS, GUESTS, INVITEES OR LICENSEES. Tenant shall
promptly provide to Landlord copies of testing results and reports that are
generated in connection with the above activities, and copies of any
correspondence with any governmental entity related to such activities.
9.4 Notification. If Tenant shall become aware of or receive
notice or other communication concerning any actual, alleged, suspected or
threatened violation of Environmental Requirements, or liability of Tenant for
Environmental Damages in connection with the Demised Premises or past or
present activities of any person thereon, or that any representation set forth
in this agreement is not or is no longer accurate, then Tenant shall deliver to
Landlord, within ten days of the receipt of such notice or communication by
Landlord, a written description of said violation, liability, correcting
information, or actual or threatened event or condition, together with copies of
any such notice or communication. Receipt of such notice shall not be deemed to
create any obligation on the part of Landlord to defend or otherwise respond to
any such notification or communication.
9.5 Negative Covenants.
9.5.1 No Hazardous Material on Demised Premises. Except for
Hazardous Material customarily used for normal office purposes in strict
compliance with all Environmental Requirements, Tenant shall not cause, permit
or suffer any Hazardous Material to be brought upon, treated, kept, stored,
disposed of, discharged, released, produced, manufactured, generated, refined or
used upon, about or beneath the Demised Premises by Tenant, its agents,
employees, contractors, subcontractors, guests, licensees or invitees, or any
other person. Tenant shall deliver to Landlord copies of all documents, which
Tenant provides to any governmental body in connection with compliance with
Environmental Requirements with respect to the premises, such delivery to be
contemporaneous with provision of the documents to the governmental agency.
9.5.2 No Violations of Environmental Requirements. Tenant
shall not cause, permit or suffer the existence or the commission by Tenant, its
agents, employees, contractors, subcontractors or guests, licensees or invitees,
or by any other person of a violation of any Environmental Requirements upon,
about or beneath the Demised Premises or any portion of the Building or Land.
26
9.6 Landlord's Right to Inspect and to Audit Tenant's Records.
Landlord shall have the right in its sole and absolute discretion, but not the
duty, to enter and conduct an inspection of the Demised Premises and to inspect
and audit Tenant's records concerning any use of Hazardous Materials at the
Demised Premises at any reasonable time to determine whether Tenant is complying
with the terms of the Lease, including but not limited to the compliance of the
Demised Premises and the activities thereon with Environmental Requirements and
the existence of Environmental Damages. Tenant hereby grants to Landlord the
right to enter the Demised Premises and to perform such tests on the Demised
Premises as are reasonably necessary in the opinion of Landlord to assist in
such audits and investigations. Landlord shall use reasonable efforts to
minimize interference with the business of Tenant by such tests inspections and
audits, but Landlord shall not be liable for any interference caused thereby.
9.7 Landlord's Right to Remediate. Should Tenant fail to perform
or observe any of its obligations or agreements pertaining to Hazardous
Materials or Environmental Requirements, then Landlord shall have the right, but
not the duty, without limitation upon any of the rights of Landlord pursuant to
this Lease, to enter the Demised Premises personally or through its agents,
consultants or contractors and perform the same. Tenant agrees to indemnify
Landlord for the costs thereof and liabilities therefrom as set forth in Section
9.2.
9.8 Landlord Certification. Landlord certifies that, to the
current actual knowledge of Landlord's Manager, Xxx Xxxxxxx, no Hazardous
Material is located in the Demised Premises, in the Building or on the Land,
except for Hazardous Material customarily used in the construction of an office
building in compliance with Environmental Requirements. Landlord shall indemnify
and hold Tenant harmless from any loss or damage Tenant suffers as a result of
any breach by Landlord of the foregoing representation.
9.9 Survival of Environmental Obligations. The obligations of
Landlord and Tenant as set forth in this Article 9 and all of its sections shall
survive expiration or termination of this Lease for a period of one year.
ARTICLE 10
DAMAGE OR DESTRUCTION
10.1 Damage to Demised Premises. If any portion of the Demised
Premises shall be damaged or destroyed by fire or other casualty, Tenant shall
give prompt written notice thereof to Landlord ("Tenant's Notice of Damage").
10.2 Options to Terminate if Damage to Demised Premises is
Substantial. Upon receipt of Tenant's Notice of Damage, Landlord shall promptly
proceed to determine the nature and extent of the damage or destruction and to
estimate the time necessary to repair or restore the Demised Premises. As soon
as reasonably possible, Landlord shall give written notice to Tenant stating
Landlord's estimate of the time necessary to repair or restore the Demised
Premises or, if applicable, that the holder of any mortgage or deed of trust
encumbering the Property refuses to permit insurance proceeds to be used for
restoration ("Landlord's Notice of Repair Time"). If the holder of any mortgage
or deed of trust
27
encumbering the Property refuses to permit insurance proceeds to be used for
restoration or if Landlord reasonably estimates that repair or restoration of
the Demised Premises cannot be completed within two hundred forty (240) days
from the time of Landlord's Notice of Repair Time, Landlord and Tenant shall
each have the option to terminate this Lease. Any option granted hereunder shall
be exercised by written notice to the other party given within ten (10) days
after Landlord's Notice of Repair Time. If either Landlord or Tenant exercises
its option to terminate this Lease, the Lease Term shall expire effective as of
the date of the casualty. Following termination of this Lease under the
provisions hereof, Landlord shall refund to Tenant such amounts of Basic Rent
and Additional Rent theretofore paid by Tenant as may be applicable to the
period subsequent to the date of the casualty less the reasonable value of any
use or occupation of the Demised Premises by Tenant subsequent to the time of
Tenant's Notice of Damage.
10.3 Damage to Building. If the Building shall be damaged or
destroyed by fire or other casualty (whether or not the Demised Premises are
affected) to the extent of fifty percent (50%) or more of the replacement cost
of the Building, and within thirty (30) days after the happening of such damage
Landlord shall decide not to reconstruct or rebuild the Building, then upon
written notice to Tenant within such thirty (30) days, this Lease shall
terminate effective on the date of the casualty and Landlord shall refund to
Tenant such amounts of Basic Rent and Additional Rent paid by Tenant for the
period after such damage less the reasonable value of any use or occupation of
the Demised Premises by Tenant during such period.
10.4 Obligations to Repair and Restore. If repair and restoration
of the Demised Premises can be completed within the period specified in Section
10.2, in Landlord's reasonable estimation, or if neither Landlord nor Tenant
terminate this Lease as provided in Sections 10.2 or 10.3, this Lease shall
continue in full force and effect and Landlord shall proceed forthwith to cause
the Demised Premises and/or Building to be repaired and restored with reasonable
diligence and there shall be abatement of Basic Rent and Additional Rent
proportionate to the extent of the space and period of time that Tenant is
unable to use and enjoy the Demised Premises.
10.5 Application of Insurance Proceeds. The proceeds of any
Casualty Insurance maintained on the Demised Premises, other than casualty
insurance maintained by Tenant on fixtures and personal property of Tenant,
shall be paid to and become the property of Landlord, subject to any obligation
of Landlord to cause the Demised Premises to be repaired and restored and
further subject to any rights of a holder of a mortgage or deed of trust
encumbering the Property to such proceeds. The amount of any proceeds is subject
to any right of a holder of a mortgage or deed of trust encumbering the Property
to apply such proceeds to its secured debt.
ARTICLE 11
CONDEMNATION
11.1 Taking - Substantial Taking - Insubstantial Taking. A "Taking"
shall mean the taking of all or any portion of the Demised Premises or the
Building as a result of the exercise of the power of eminent domain or
condemnation for public or quasi-public use or the
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sale of all or part of the Demised Premises under the threat of condemnation. A
"Substantial Taking" shall mean a Taking of twenty five percent (25%) or more of
the area (in square feet) of either the Demised Premises or the Building. An
"Insubstantial Taking" shall mean a Taking that does not constitute a
Substantial Taking.
11.2 Termination on Substantial Taking. If there is a Substantial
Taking with respect to the Demised Premises or the Building, the Lease Term
shall expire on the earlier of: (i) the date of vesting of title pursuant to
such taking, or (ii) the date Tenant is no longer able to occupy the Demised
Premises for the Permitted Use with substantially full use of the Common
Facilities and services provided by Landlord. In the event of termination of
this Lease under the provisions hereof, Landlord shall refund to Tenant such
amounts of Basic Rent and Additional Rent theretofore paid by Tenant as may be
applicable to the period subsequent to the time of termination of this Lease.
11.3 Restoration on Insubstantial Taking. In the event of an
Insubstantial Taking, this Lease shall continue in full force and effect,
Landlord shall proceed forthwith to cause the Demised Premises, less such
Taking, to be restored as near as may be to the original condition thereof and
there shall be a permanent abatement of Basic Rent and Additional Rent
proportionate to the extent of the space so taken.
11.4 Right to Award. The total award, compensation, damages or
consideration received or receivable as a result of a Taking ("Award") shall be
paid to and be the property of Landlord, including, without limitation, any part
of the Award made as compensation for diminution of the value of the leasehold
or the fee of the Demised Premises. Tenant hereby assigns to Landlord all of
Tenant's right, title and interest in and to any such Award. Tenant covenants
and agrees to execute, immediately upon demand by Landlord, such documents as
may be necessary to facilitate collection by Landlord of any such Award.
Notwithstanding the foregoing, Tenant may make a separate claim for the value of
improvements or alterations installed at Tenant's expense and/or Tenant's
removable trade fixtures, equipment or personal property and/or relocation
expenses related to such Taking, provided that any such award does not reduce
Landlord's Award.
ARTICLE 12
DEFAULTS BY TENANT
12.1 Defaults Generally. Each of the following shall constitute a
"Default by Tenant" under this Lease.
12.2 Failure to Pay Rent or Other Amounts. A Default by Tenant
shall exist if Tenant fails to pay Basic Rent, Additional Rent, Monthly
Deposits, or any other amounts payable by Tenant under the terms of this Lease,
within ten (10) days after written notice that such rental or amount has not
been paid when due.
12.3 Violation of Lease Terms. A Default by Tenant shall exist if
Tenant breaches or fails to comply with any agreement, term, covenant or
condition in this Lease applicable to Tenant, and Tenant does not cure such
breach or failure within thirty (30) days
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after notice thereof by Landlord to Tenant, or, if such breach or failure to
comply cannot be reasonably cured within such 30-day period, if Tenant shall not
in good faith commence to cure such breach or failure to comply with such 30-day
period or shall not diligently proceed therewith to completion with ninety (90)
days following the occurrence of the breach or failure.
12.4 [Intentionally Omitted]
12.5 Transfer of Interest Without Consent. A Default by Tenant
shall exist if Tenant's interest under this Lease or in the Demised Premises
shall be transferred to or pass to or devolve upon any other party in violation
of the terms of this Lease.
12.6 Execution and Attachment Against. A Default by Tenant shall
exist if Tenant's interest under this Lease or in the Demised Premises shall be
taken upon execution or by other process of law directed against Tenant, or
shall be subject to any attachment at the instance of any creditor or claimant
against Tenant and said attachment shall not be discharged or disposed of within
sixty (60) days after the levy thereof.
12.7 Bankruptcy or Related Proceedings. A Default by Tenant shall
exist if 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 similar 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 or if involuntary proceedings under any
such bankruptcy or insolvency law or for the dissolution of Tenant shall be
instituted against Tenant or a receiver or trustee shall be appointed for the
Demised Premises or for all or substantially all of the property of Tenant, and
such proceedings shall not be dismissed or such receivership or trusteeship
vacated within ninety (90) days after such institution or appointment.
ARTICLE 13
LANDLORD'S REMEDIES
13.1 Remedies Generally. Upon the occurrence of any Default by
Tenant, Landlord shall have the right, at Landlord's election, then or at
anytime thereafter, to exercise any one or more of the following remedies.
13.2 Cure By Landlord. 1n the event of a Default by Tenant not
cured within any applicable cure period, Landlord may, at Landlord's option, but
without obligation to do so, and without releasing Tenant from any obligations
under this Lease, make any payment or take any action as Landlord may deem
necessary or desirable to cure any such Default by Tenant in such manner and to
such extent as Landlord may deem necessary or desirable. Landlord may do so
without demand on, or written notice to, Tenant and without giving Tenant any
opportunity to cure such Default by Tenant. Tenant covenants and agrees to pay
to Landlord, within fifteen (15) days after demand, all actual advances, costs
and expenses of Landlord in connection with the making of any such payment or
the taking of any such action, including reasonable attorneys' fees, together
with interest as hereinafter provided from
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the day of payment of any such advances, costs and expenses by Landlord. Action
taken by Landlord may include commencing, appearing in, defending or otherwise
participating in any action or proceedings and paying, purchasing, contesting or
compromising any claim, right, encumbrance, charge or lien with respect to the
Demised Premises which Landlord, in its discretion, may deem necessary or
desirable to protect its interest in the Demised Premises and under this Lease.
13.3 Termination of Lease and Damages. In the event of a Default by
Tenant and expiration of any applicable cure period, Landlord may terminate this
Lease, effective at such time as may be specified by written notice to Tenant,
and demand (and, if such demand is refused, recover) possession of the Demised
Premises from Tenant. Tenant shall remain liable to Landlord for damages in an
amount equal to the Basic Rent, Additional Rent and other sums which would have
been owing by Tenant hereunder for the balance of the term, had this Lease not
been terminated, less the net proceeds, if any, of reletting of the Demised
Premises by Landlord subsequent to such termination, after deducting all
Landlord's expenses in connection with such recovery of possession or reletting.
Landlord shall be entitled to collect and receive such damages from Tenant on
the days on which the Basic Rent, Additional Rent and other amounts would have
been payable if this Lease had not been terminated. Alternatively, at the option
of Landlord, Landlord shall be entitled to recover forthwith from Tenant, as
damages for loss of the bargain and not as a penalty, an aggregate sum which, at
the time of such termination of this Lease, represents the excess, if any, of
(a) the aggregate of the Basic Rent, Additional Rent and all other sums payable
by Tenant hereunder that would have accrued for the balance of the Lease Term,
less (b) the aggregate rental value of the Demised Premises for the balance of
the Lease Term, both discounted to present worth at the then applicable federal
rate.
13.4 Repossession and Reletting. In the event of Default by Tenant
and expiration of any applicable cure period, Landlord may reenter and take
possession of the Demised Premises or any part thereof, in accordance with the
requirements and procedures set forth in the Colorado statutes, and repossess
the same and expel Tenant and any party claiming by, under or through Tenant,
and remove the effects of both, without breach of the peace, without being
liable for prosecution on account thereof or being deemed guilty of any manner
of trespass, and without prejudice to any remedies for arrears of rent or right
to bring any proceeding for breach of covenants or conditions. No such reentry
or taking possession of the Demised Premises by Landlord shall be construed as
an election by Landlord to terminate this Lease unless a written notice of such
intention is given to Tenant. No notice from Landlord hereunder or under a
forcible entry and 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 or reletting, to exercise its
right to terminate this Lease by giving Tenant such written notice, in which
even the Lease will terminate as specified in said notice. After recovering
possession of the Demised Premises, Landlord may, from time to time, but shall
not be obligated to, relet the Demised Premises, or any part thereof, for the
account of Tenant, for such term or terms and on such conditions and upon such
other terms as Landlord, in its uncontrolled discretion, may determine. Landlord
may make such repairs, alterations or improvements as Landlord may consider
appropriate to accomplish such reletting, and Tenant shall reimburse Landlord
upon demand for all costs and expenses, including brokers' commissions and
attorneys' fees, which Landlord may incur in
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connection with such reletting. Landlord may collect and receive the rents for
such reletting but, subject to Section 13.5 below, Landlord shall in no way be
responsible or liable for any failure to relet the Demised Premises, or any part
thereof, or for any failure to collect any rent due upon such reletting.
Notwithstanding Landlord's recovery of possession of the Demised Premises,
Tenant shall continue to pay on the dates herein specified, the Basic Rent,
Additional Rent and other amounts which would be payable hereunder if such
repossession had not occurred. Upon the expiration or earlier termination of
this Lease, Landlord shall refund to Tenant any amount, without interest, by
which the amounts paid by Tenant, when added to the net amount, if any,
recovered by Landlord through any reletting of the Demised Premises, exceeds the
amounts payable by Tenant under this Lease. If, in connection with any
reletting, the new lease term extends beyond the existing term, or the premises
covered thereby include other premises not part of the Demised Premises, a fair
apportionment of the rent received from such reletting and the expenses incurred
in connection therewith will be made in determining the net amount recovered
from such reletting.
13.5 Mitigation of Damages. Landlord shall make reasonable efforts
to mitigate its damages as required by applicable law.
13.6 Suits by Landlord. Actions or suits for the recovery of
amounts and damages payable under this Lease may be brought by Landlord from
time to time, at Landlord's election, and Landlord shall not be required to
await the date upon which the Lease Term would have expired to bring any such
action or suit.
13.7 Recovery of Landlord Enforcement Costs. All costs and expenses
incurred by Landlord in connection with collecting any amounts and damages owing
by Tenant pursuant to the provisions of this Lease or to enforce any provision
of this Lease, including reasonable attorneys' fees, whether or not any action
is commenced by Landlord, shall be paid by Tenant to Landlord upon demand.
13.8 Administrative Late Charge. Other remedies for nonpayment of
rent notwithstanding, if the monthly rental payment is not received by Landlord
on or before the third day of the month for which the rent is due, or if any
other payment due Landlord by Tenant is not received by Landlord on or before
the last day of the month next following the month in which Tenant was invoiced,
an Administrative Late Charge of five percent (5%) of such past due amount shall
be come due and payable in addition to such amounts owed under this Lease to
help defray the additional cost to Landlord for processing such late payments.
13.9 Interest on Past-Due Payments and Advances. Tenant covenants
and agrees to pay to Landlord interest on demand at the rate of eighteen percent
(18%) per annum, compounded on a monthly basis, on the amount of any Monthly
Rent, Monthly Deposit or other charges not paid when due, from the date due and
payable, and on. the amount of any payment made by Landlord required to have
been made by Tenant under this Lease and on the amount of any costs and
expenses, including reasonable attorneys' fees, paid by Landlord in connection
with the taking of any action to cure any Default by Tenant, from the date of
making any such payment or the advancement of such costs and expenses by
Landlord.
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13.10 Landlord's Bankruptcy Remedies. Nothing contained in this
Lease 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 allowable by any
statute or rule of law governing such proceeding in effect at the time when such
damages are to be proved, whether or not such amount be greater, equal or less
than the amounts recoverable, either as damages or rent, under this Lease.
13.11 Remedies Cumulative. Exercise of any of the remedies of
Landlord under this Lease shall not prevent the concurrent or subsequent
exercise of any other remedy provided for in this Lease or otherwise available
to Landlord at law or in equity.
ARTICLE 14
SURRENDER AND HOLDING OVER
14.1 Surrender upon Lease. Upon the expiration or earlier
termination of this Lease, or on the date specified in any demand for possession
by Landlord after any Default by Tenant, Tenant covenants and agrees to
surrender possession of the Demised Premises to Landlord broom clean, with all
lighting, doors, and electrical and mechanical systems (including, without
limitation, all HVAC facilities) in good working order and condition, all walls
in clean condition and holes or punctures in the walls repaired, and otherwise
in the same condition as when Tenant first occupied the Demised Premises,
ordinary wear and tear excepted.
14.2 Holding Over. If Tenant shall hold over after the expiration
of the Lease Term, without written agreement providing otherwise, Tenant shall
be deemed to be a Tenant at sufferance, at a monthly rental, payable in advance,
equal to one hundred and twenty five percent (125%) of the Monthly Rental, and
Tenant shall be bound by all of the other terms, covenants and agreements of
this Lease. Nothing contained herein shall be construed to give Tenant the right
to hold over at any time, and Landlord may exercise any and all remedies at law
or in equity to recover possession of the Demised Premises, as well as any
damages incurred by Landlord, due to Tenant's failure to vacate the Demised
Premises and deliver possession to Landlord as herein provided.
ARTICLE 15
MISCELLANEOUS
15.1 No Implied Waiver. No failure by Landlord to insist upon the
strict performance of any term, covenant or agreement contained in this Lease,
no failure by Landlord to exercise any right or remedy under this Lease, and no
acceptance of full or partial payment during the continuance of any Default by
Tenant, shall constitute a waiver of any such term, covenant or agreement, or a
waiver of any such right or remedy, or a waiver of any such Default by Tenant.
15.2 Survival of Provisions. Notwithstanding any termination or
expiration of this Lease, the same shall continue in force and effect as to any
provisions hereof
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which by their terms or the very nature thereof require observance or
performance by Landlord or Tenant subsequent to termination or expiration.
15.3 Covenants Independent. This Lease shall be construed as if the
Covenants herein between Landlord and Tenant are independent, and not dependent,
and Tenant shall not be entitled to any offset against Landlord if Landlord
fails to perform its obligations under this Lease.
15.4 Covenants as Conditions. Each provision of this Lease
performable by Tenant shall be deemed both a covenant and a condition.
15.5 Tenant's Remedies. Tenant may bring a separate action against
Landlord for any claim Tenant may have against Landlord under this Lease,
provided Tenant shall first give written notice thereof to Landlord and shall
afford Landlord a reasonable opportunity to cure any such default. In addition,
Tenant shall send notice of such default by certified or registered mail,
postage prepaid, to the holder of any mortgage or deed of trust covering the
Demised Premises, the Property or any portion thereof of whose address Tenant
has been notified in writing, and shall afford such holder a reasonable
opportunity to cure any default on Landlord's behalf. In no event will Landlord
be responsible for any incidental, consequential or special damages incurred by
Tenant, including, but not limited to, loss of profits or interruption of
business as a result of any default by Landlord hereunder. In the event any
action or claim by Tenant against Landlord is litigated to final judgment and
Tenant prevails therein, Tenant shall be entitled to recover from Landlord its
reasonable costs and expenses incurred in connection therewith, including
attorneys fees, in addition to any other relief to which Tenant may be entitled.
15.6 Binding Effect. This Lease shall extend to and be binding upon
the heirs, executors, legal representatives, successors and assigns of the
respective parties hereto. The terms, covenants, agreements and conditions in
this Lease shall be construed as covenants running with the Land.
15.7 Short Form Lease. This Lease shall not be recorded, but Tenant
agrees, at the request of Landlord, to execute a short form lease for recording,
containing the names of the parties, a description of the Demised Premises and
the Lease Term.
15.8 Notices and Demands. All notices, demands or xxxxxxxx under
this Lease shall be in writing, signed by the party giving the same and shall be
deemed properly given and received when actually given and received or three (3)
Business Days after mailing, if sent by registered or certified United States
mail, postage prepaid, addressed to the party to receive the notice at the
address set forth for such party in the first paragraph of this Lease or at such
other address as either party may notify the other of in writing.
15.9 [Intentionally Omitted]
15.10 Time of the Essence. Time is of the essence under this Lease,
and all provisions herein relating thereto shall be strictly construed.
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15.11 Captions for Convenience. The headings and captions hereof are
for convenience only and shall not be considered in interpreting the provisions
hereof.
15.12 Severability. If any provision of this Lease shall be held
invalid or unenforceable, the remainder of this Lease shall not be affected
thereby, and there shall be deemed substituted for the affected provision a
valid and enforceable provision as similar as possible to the affected
provision.
15.13 Governing Law and Venue. This Lease shall be interpreted and
enforced according to the laws of the State of Colorado. Any action or
proceeding arising out of this Lease, its modification or termination, or the
performance or breach of either party hereto, shall be brought exclusively in
courts of the state and county in which the Property is located. The parties
agree that such courts are a convenient forum and waive any right to alter or
change venue, including removal. THE PARTIES IRREVOCABLY WAIVE ANY RIGHT TO A
TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS LEASE.
15.14 Entire Agreement/Further Assurances. This Lease and any
exhibits and addenda referred to herein, constitute the final and complete
expression of the parties' agreement with respect to the Demised Premises and
Tenant's occupancy thereof. Each party agrees that it has not relied upon or
regarded as binding any prior agreements, negotiations, representations, or
understandings, whether oral or written, except as expressly set forth herein.
The parties agree that if there should be any clerical or typographical errors
in this Lease, the Summary of Basic Lease Terms, any exhibit or addendum hereto,
the party requested to do so will use its reasonable, good faith efforts to
execute such corrective instruments or do all things necessary or appropriate to
correct such errors. Further, the parties agree that if it becomes necessary or
desirable to execute further instruments or to make other assurances, the party
requested to do so will use its reasonable, good faith efforts to provide such
executed instruments or do all things reasonably necessary or appropriate to
carry out this Lease; provided, however, that neither party shall be obligated
to execute instruments or take any action that increases its liabilities or
obligations hereunder or reduces its rights or remedies hereunder.
15.15 No Oral Amendment or Modifications. No amendment or
modification of this Lease, and no approvals, consents or waivers by Landlord
under this Lease, shall be valid and binding unless in writing and executed by
the parry to be bound.
15.16 Real Estate Brokers. Tenant covenants to pay, hold harmless
and indemnify the Landlord from and against any and all cost, expense or
liability for any compensation, commissions, charges or claims by any broker or
other agent with respect to this Lease or the negotiation thereof other than the
broker(s) listed as the Broker(s), if any, on the Summary of Basic Lease Terms,
which Landlord has agreed to compensate pursuant to the terms of a separate
agreement.
15.17 Relationship of Landlord and Tenant. Nothing contained herein
shall be deemed or construed as creating the relationship of principal and agent
or of partnership, or of joint venture by the parties hereto, it being
understood and agreed that no provision contained
35
in this Lease nor any acts of the parties hereto shall be deemed to create any
relationship other than the relationship of Landlord and Tenant.
15.18 Authority of Tenant. Each individual executing this Lease on
behalf of Landlord or Tenant represents and warrants that she or he is duly
authorized to deliver this Lease on behalf of the party for which such
individual is signing and that this Lease is binding upon such party in
accordance with its terms.
15.19 Business Day. The term "Business Day" as used in this Lease
shall mean Monday through Friday, legal holidays on which the U.S. Postal
Services does not make regular deliveries excepted.
ARTICLE 16
RIGHT OF FIRST OFFER
16.1 Tenant's Right of First Offer. Provided Tenant is not then in
default and has not been in default under this Lease more than once during the
Term, and provided that Tenant has not subleased or assigned its interest in the
Premises or any portion thereof in a transaction other than a Permitted
Transfer, as defined in Section 8.16, Landlord shall give Tenant a continuing
right of first offer on any and all space that becomes available in the Building
(the "Offer Space") if such space should become available for lease during the
Term of this Lease. In the event the Offer Space should become available,
Landlord shall give Tenant a written notice stating when the Offer Space will
become available and the terms and conditions for leasing such space that would
be acceptable to Landlord. Tenant shall have five (5) Business Days after such
notice to enter into an Amendment to this Lease adding the Offer Space to
Tenant's Premises upon the specific terms and conditions set forth in Landlord's
notice and otherwise upon the terms and conditions of this Lease. In no event
shall Tenant be entitled to an additional tenant finish allowance or any other
inducements or concessions provided for in this Lease unless the same are
expressly included in Landlord's written notice regarding the Offer Space. If
Tenant does not enter into such an Amendment within such five Business Day
period, Tenant's right of first offer shall be void and of no further force or
effect with respect to such Offer Space. Tenant's right of first offer shall be
in effect only during the initial Term of the Lease and shall not apply to any
extension or renewal of this Lease. Further, Tenant's right of first offer shall
be subordinate and subject to any renewal rights of any tenant occupying the
Offer Space and to any other right of refusal or right of offer previously given
by Landlord to any other tenant with respect to the Offer Space.
ARTICLE 17
TERMINATION OPTION
17.1 Option to Terminate. At any time after the expiration of the
third (3rd) Lease Year, and provided Tenant is not then in default under the
Lease, Tenant shall have the right to terminate this Lease by giving Landlord at
least six (6) months prior written notice exercising such option (the
"Termination Option").
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17.2 Termination Fee. In the event Tenant elects to exercise the
Termination Option, Tenant shall pay to Landlord a fee (the "Termination Fee"),
which shall consist of the sum of: (i) the Base Tenant Finish Allowance,
Additional Tenant Finish Allowance, and all commissions and fees paid by
Landlord to the Brokers in connection with this Lease, less the amount which
would have been paid through the Termination Date had the total of the same been
amortized in equal payments of principal and interest over sixty (60) months at
5.5% per annum, and (ii) $50,000. The Termination Fee shall be paid in the form
of a wire transfer or certified funds, one-half due at the time Tenant gives its
notice exercising the Termination Option and the other one-half due at the time
Tenant surrenders possession of the Demised Premises to Landlord.
For example, assume Tenant exercises the Termination Option effective
as of the end of the fourth Lease Year. Assume also that Tenant used the entire
Base Tenant Finish Allowance and the entire Additional Tenant Finish Allowance
($775,005.00), and that the total compensation paid to the Brokers was $64,000.
The total amount amortized over sixty months would be $839,005, which at 5.5%
per annum results in a monthly amortized cost of $16,026.00. As of the end of
the fourth Lease Year, the unamortized portion remaining would be $186,703.00.
Adding $50,000 to that amount, the Termination Fee would be $236,703.00. The
foregoing example is for illustrative purposes only.
ARTICLE 18
TENANT'S SPECIAL EQUIPMENT
18.1 Special Equipment. If Tenant desires to use the roof of the
Building, the Common Facilities, or any portion of the Land to install any a
satellite dish, generator and/or supplemental HVAC to be used in connection with
Tenant's business at the Demised Premises only, Tenant may so notify Landlord in
writing ("Special Equipment Notice"), which Special Equipment Notice shall
generally describe the specifications for the equipment desired by Tenant and
the location or locations Tenant desires to install such equipment. If at the
time of Landlord's receipt of the Special Equipment Notice, Landlord reasonably
determines that space is available for such equipment on the roof of the
Building, in the Common Facilities or on the Land, as the case may be, then
subject to all governmental laws, rules and regulations, Tenant and Tenant's
contractors (which shall first be reasonably approved by Landlord) shall have
the right and access to install, repair, replace, remove, operate and maintain
such equipment as specified in the Special Equipment Notice and approved by
Landlord, together with all cable, wiring, conduits and related equipment
(collectively, "Special Equipment"), at a location or locations on the roof of
the Building, in the Common Facilities or on the Land, as the case may be,
designated by Landlord. Landlord shall have the right to require Tenant to
relocate the Special Equipment at any time to another location reasonably
approved by Tenant. Tenant shall retain Landlord's designated roofing contractor
to make any necessary penetrations and associated repairs to the roof in order
to preserve Landlord's roof warranty.
18.2 Requirements and Limitations. Tenant's installation and
operation of the Special Equipment shall be governed by the following terms and
conditions:
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(a) Tenant's right to install, replace, repair, remove,
operate and maintain the Special Equipment shall be subject to all governmental
laws, rules and regulations and Landlord makes no representation that such laws,
rules and regulations permit such installation and operation.
(b) All plans and specifications for the Special
Equipment shall be subject to Landlord's reasonable approval.
(c) All costs of installation, operation and maintenance
of the Special Equipment and any necessary related equipment (including, without
limitation, costs of obtaining any necessary permits and connections to the
Building's electrical system) shall be borne by Tenant.
(d) It is expressly understood that Landlord retains the
right to use the roof of the Building for any purpose whatsoever provided that
Landlord shall not unduly interfere with Tenant's use of the Special Equipment.
(e) Tenant shall use the Special Equipment so as not to
cause any interference to other tenants in the Building or to other tenants of
the Building or with any other tenant's Special Equipment, and not to damage the
Building or interfere with the normal operation of the Building.
(f) Landlord shall not have any obligations with respect
to the Special Equipment. Landlord makes no representation that any Special
Equipment for communications purposes will be able to receive or transmit
communication signals without interference or disturbance (whether or not by
reason of the installation or use of similar equipment by others on the roof of
the Building) and Tenant agrees that Landlord shall not be liable to Tenant
therefor.
(g) Tenant shall (i) be solely responsible for any damage
caused as a result of the Special Equipment, (ii) promptly pay any tax, license
or permit fees charged pursuant to any laws or regulations in connection with
the installation, maintenance or use of the Special Equipment and comply with
all precautions and safeguards recommended by all governmental authorities, and
(iii) pay for all necessary repairs, replacements to or maintenance of the
Special Equipment.
(h) The Special Equipment shall remain the sole property
of Tenant. Tenant shall remove the Special Equipment and related equipment at
Tenant's sole cost and expense upon the expiration or sooner termination of this
Lease or upon the imposition of any governmental law or regulation which may
require removal, and shall repair the Building upon such removal to the extent
required by such work of removal. If Tenant fails to remove the Special
Equipment and repair the Building within fifteen (15) days after the expiration
or earlier termination of this Lease, Landlord may do so at Tenant's expense.
The provisions of this Section 18.1 shall survive the expiration or earlier
termination of this Lease.
(i) The Special Equipment shall be deemed to constitute a
portion of the Demised Premises for purposes of Section 18.1 of this Lease.
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(j) Landlord acknowledges that Tenant may require
supplemental HVAC for its computer equipment and possibly for other purposes,
and subject to Landlord's right to approve the specifics of such supplemental
HVAC equipment as part of Landlord's approval of Tenant's Plans pursuant to the
provisions of EXHIBIT D or, after completion of Tenant's Work, as provided in
this Section 18.2, Landlord consents to Tenant's installation and use of such
supplemental HVAC agrees to make reasonable, good faith efforts to accommodate
Tenant's desired equipment.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Lease to be
executed the day and year first above written.
LANDLORD: TENANT:
Centro III, LLC Pharmion Corporation
By: /s/ Xxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
------------------------ ------------------------
Name: Xxx Xxxxxxx Name: Xxxxxxx X. Xxxxxxx
Title: Manager Title: President and CEO
STATE OF COLORADO )
) ss
COUNTY OF BOULDER )
The foregoing instrument was acknowledged before me this 24th day of
April, 2002, by Xxx Xxxxxxx, as Manager of Centro III, LLC.
Witness my hand and official seal.
My commission expires: 5/25/2005
/s/ Xxxxx X. Xxxxxxxx
----------------------------------
Notary Public
[seal]
STATE OF COLORADO )
) ss
COUNTY OF BOULDER )
The foregoing instrument was acknowledged before me this 24th day of
April, 2002, by Xxxxxxxx Xxxxxxx, as HR Representative of Pharmion Corporation.
Witness my hand and official seal.
My commission expires: 10/10/2005
/s/ Xxxxxxxx Xxxxxxx
---------------------------------
Notary Public
[seal]
40
EXHIBIT A
LEGAL DESCRIPTION
That portion or the Northwest Quarter of the Northwest Quarter of
Section 29, Township 1 North, Range 70 West of the 6th P.M., County of Boulder,
State of Colorado, described as follows:
Beginning at a point from which the Southeast corner of the Northwest
Quarter of the Northwest Quarter of Section 29, Township 1 North, Range 70 West
of the 6th P.M. bears South 129.38 feet; thence West 380.8 feet; thence North
184.36 feet, thence East 380.8 feet; thence South 184.36 feet; to the POINT OF
BEGINNING;
EXCEPTING THEREFROM that portion described as follows:
Beginning at a point on the South property line from which point the Northeast
corner of the Northwest Quarter of the Northwest Quarter of Section 29, Township
1 North, Range 70 West bears North 1 degrees 22' East, a distance of 1198.3
feet; thence North 0 degrees 24' West, a distance of 183.8 feet to a point on
the North property line; thence South 89 degrees 59' East, a distance of 36.0
feet to a point on the East line of the Northwest Quarter of the Northwest
Quarter of Section 29; thence along the East line of the Northwest Quarter of
the Northwest Quarter of Section 29, South 0 degrees 21' East, a distance of
183.5 feet; thence South 89 degrees 36' West, a distance of 35.8 feet, more or
less, to the POINT OF BEGINNING, as granted to the Department of Highways by
Deed recorded October 25, 1956, in Book 1028 at Page 124;
ALSO EXCEPTING THEREFROM that portion described as follows: Commencing at the
Southeast corner of the Northwest Quarter of the Northwest Quarter of Section
29; thence North 0 degrees 15'40" West, 129.38 feet along the East line of the
Northwest Quarter of the Northwest Quarter of Section 29 to the South line
extended Easterly of the tract of land conveyed to Xxxx X. Teelen as described
in Deed recorded on Film 834 at Reception No. 083239 of the records of Boulder
County, Colorado; thence South 89 degrees 52'00" West, 71.90 feet parallel with
the South line of the Northwest Quarter of the Northwest Quarter of Section 29
and along the South line extended Easterly and the South line of that tract of
land as described on said Film 834 at Reception No. 083239 to the TRUE POINT OF
BEGINNING; thence North 74 degrees 19'50" East, 37.34 feet to the Westerly
right-of-way line of 00xx Xxxxxx (X.X. Xxxxxxx Xx. 00); thence South 0 degrees
18'10" East, 10.00 feet along the Westerly right-of-way line of said 00xx Xxxxxx
to the Southeast corner of that tract of land as described on said film 834 at
Reception No. 083239; thence South 89 degrees 52'00" West, 36.00 feet parallel
with the South line of the Northwest Quarter of the Northwest Quarter of Section
29 and along the South line of that tract of land as described on said Film 834
at Reception No. 083239 to the TRUE POINT OF BEGINNING.
EXHIBIT B
LOCATION OF DEMISED PREMISES WITHIN BUILDING
[GRAPHIC - FLOOR PLAN]
