EXHIBIT 10.34
LEASE
BETWEEN
QUANTUM CORPORATION ("TENANT")
AND
QD INVESTORS ("LANDLORD")
LEASE
THIS LEASE made this 22nd day of August, 1995, between Quantum
Corporation, a Delaware corporation ("Tenant"), and QD Investors, a Colorado
limited liability company ("Landlord").
W I T N E S S E T H:
DEMISE
Landlord does hereby lease to Tenant and Tenant hereby hires from
Landlord an approximately 158,000 square foot building and related improvements
(collectively referred to as the "Improvements") to be constructed on the land
described in Exhibit A which is attached to and incorporated in this Lease (the
"Property"). The Improvements and the Property are hereinafter sometimes
collectively called the "Premises" or "Leased Premises." Landlord is building
the Improvements according to the design and architectural requirements of
Tenant.
This Lease is upon and subject to the terms, conditions, and covenants
set forth below, and Tenant and Landlord covenant as a material part of the
consideration for this Lease to keep and perform each and all of the terms,
conditions, and covenants by them to be kept and performed and that this Lease
is made upon the condition of such performance.
SECTION 1
PURPOSE
1.1 Use of Premises. The Premises are to be used for research and
development, manufacturing, assembly, warehousing and related office functions
or any other purpose, provided that such uses comply with all environmental
laws, zoning and use restrictions, and restrictive covenants and conditions.
SECTION 2
TERM
2.1 Lease Term. The term of this Lease shall be for a period of fifteen
(15) years (180 months), commencing at 12:01 A.M. on August 15, 1996, subject to
Sections 3.3 and 31.5 of this Lease ("Commencement Date"), and ending fifteen
(15) years from the Commencement Date ("Termination Date") (alternatively, the
"Lease Term or Term"). Changes in the Commencement Date are specifically
provided for in Section 3. If the Commencement Date falls on a day other than
the first day of a month, the first and last
month's Base Rent shall be prorated based upon the number of days of the Lease
Term in those months. Upon expiration of the Term, Tenant shall execute a Quit
Claim Deed in favor of Landlord transferring all of Tenant's right, title, and
interest in and to the Premises.
2.2 Lease Supplement. Upon the Commencement Date, Landlord and Tenant
shall execute a supplement to this Lease confirming:
a. The Commencement Date of this Lease;
b. The Termination Date of the Lease Term of this Lease;
c. The Landlord Work Costs and the annual Base Rent schedule
referred to in Section 4.1;
d. Other matters reasonably requested by Landlord.
SECTION 3
COMPLETION OF THE PREMISES
3.1 Building Construction. Landlord, subject to the terms and
conditions of this Lease, shall construct ("Landlord's Work") the Improvements
pursuant to the terms of this Lease and according to the Final Plans
(hereinafter defined) approved by Landlord and Tenant, which shall be consistent
with and constitute the natural evolution of the Design Development Drawings
attached to and incorporated in this Lease as Exhibit B ("Design Development
Drawings"). Except as set forth in this Lease, the Landlord shall not have any
liability or obligation to pay any cost or expense or to perform any work
arising out of or pertaining to the Premises or the ownership, construction,
condition, or operation thereof after the Commencement Date.
3.2 Landlord's Work. While it is the intention of Landlord and Tenant
that Landlord perform substantially all of the work required to construct the
Improvements, Tenant has engaged various independent entities such as Oz
Architecture ("Architect"), Sigmatech, Huntingdon Engineering & Environmental,
Inc., and Xxxxxxxx XxXxxxxxx & Pan (collectively referred to as "Tenant's
Consultants"). In addition, while the total cost of the Premises including land,
permits, development costs and construction costs are expected to be
substantially in excess of $15,000,000, Landlord shall only be responsible to
pay for a maximum of $15,000,000 consisting of the categories of items set forth
on Schedule II ("Landlord's Work Costs") which dollar amounts shall be completed
as soon as the final budget information is available. Tenant shall be solely
responsible to pay for any and all items necessary to construct the Improvements
(including interest reserves during the construction loan period) which are not
included in or are in excess of Landlord's Work Costs ("Tenant's Work Costs").
The anticipated scope of work categories for Tenant's Work Costs are set forth
in the schedule which is attached to and incorporated in this Lease as Schedule
III. Landlord shall enter into a cost plus contract with The Xxxxxx Company to
construct the Improvements ("Construction Contract") subject to Tenant's consent
which
shall not be unreasonably withheld. At Tenant's election, Tenant shall have the
right to review and approve all requests for payment made pursuant to the
Construction Contract.
Architect shall have the right to review and approve Landlord's Work pursuant
to the standard AIA provisions in the Construction Contract.
3.3 Description of Overall Responsibilities.
a. Plans and Specifications. Tenant's Consultants shall
provide Landlord with all of the necessary final plans and specifications
including working drawings ("Final Plans") required to construct the
Improvements. Tenant's Consultants will be submitting partially complete plans
and specifications to Landlord from time to time. By the dates set forth in the
Plans Schedule, attached to and incorporated in this Lease as Schedule I ("Plans
Schedule"), Tenant's Consultants shall provide Landlord with plans and
specifications in a form and with a level of completeness reasonably
satisfactory to Landlord so that Landlord may immediately commence construction
without further delay or action requested by Tenant ("Constructable Plans").
Upon Landlord's receipt of Constructable Plans, Landlord shall promptly (1)
proceed with the construction contemplated thereby without delay to the extent
reasonably possible; and (2) review the Plans within fifteen (15) days of
receipt and shall notify Tenant: (a) whether the Plans do not constitute
Constructable Plans, (b) whether the scope of the Work is not consistent with
the Design Development Drawings, (c) if the Substantial Completion Date (as
defined below) and Beneficial Occupancy Date will need to be adjusted as a
result of the impact of (a) or (b) above and (d) the number of days of Tenant
Delay resulting from the above. Landlord and Tenant agree to use best efforts to
agree on the above items. Landlord shall in no way be responsible for the
layout, design or engineering of the Premises provided that Landlord constructs
the Premises in conformance with the Constructable Plans and the Final Plans.
Tenant specifically agrees that all Plans delivered to Landlord by Tenant's
Consultants shall be deemed to have been approved by Tenant and that the
Improvements represented by such Plans are desirable and suitable for Tenant's
anticipated needs. Once any Constructable Plans have been received and accepted
by Landlord any changes shall be considered a change order subject to any
necessary time delays or additional costs.
b. Performance Schedule. Landlord and Tenant acknowledge that
the construction of the Improvements is being performed on a "fast-track" basis
such that the final details and scope of the Improvements will not be known at
the time of execution of this Lease. Based upon the Design Development Drawings
Landlord and Tenant desire to cause the Improvements to be Substantially
Completed(as defined below) by August 15, 1996, ("Substantial Completion Date"),
and that Tenant have access to the Wafer Fabrication Areas (as described in more
detail in Section 3.6 and Exhibit E) by June 1, 1996, in order for Tenant to
begin fit up of those spaces. Accordingly, Landlord and Tenant shall each be
obligated to use best efforts to perform their respective obligations within the
time periods set forth in this Lease. Subject to the effect of a Tenant Delay as
set forth in Section 3.3(c) below, the parties acknowledge that the Plans
Schedule and Substantial Completion Date are only an estimate of the time needed
to complete certain stages of the construction process and the failure of either
party to accomplish any step in the process set forth in this Lease within the
applicable time period shall not constitute a default by either party unless
such failure constitutes a breach of the obligation of a party to use best
efforts
to perform its obligations within the time period set forth in this Lease and
appropriate notice has been given and a reasonable cure period has expired. In
the event of such breach by Landlord, Tenant shall be entitled to exercise the
right to purchase the Premises as set forth in Section 27 without regard to the
first sentence of Section 27.
c. Tenant Delay. If Landlord shall be delayed in Substantially
Completing Landlord's Work as a result of any act, neglect, failure, or
admission of Tenant, its agents, servants, employees, contractors,
subcontractors, or Tenant's Consultants, including without limitation, any of
the following, such delay shall be deemed a "Tenant Delay":
1. Tenant's request for materials, finishes or installations which are
not readily available at the time Landlord is ready to install the same;
2. Tenant's failure or delay in furnishing the Constructable or the
Final Plans pursuant to the Plan Schedule or Landlord's and Tenant's agreement
that regardless of whether Constructable Plans have been timely furnished,
additional time will be required to Substantially Complete Landlord's Work due
to a change of scope pursuant to Section 3.3(a);
3. Tenant's changes or revisions in the Constructable or Final Plans;
4. Tenant's failure to timely pay any portion of Tenant's
Contribution (as defined below);
5. Any act by Tenant which interferes with or delays construction
of the Improvements including Tenant's entry of the Premises to install any
Tenant equipment, fixtures or finishes;
6. Any other act or omission by Tenant or its agents which delays
formulation of the Constructable Plans or delays or interferes with Landlord's
Work.
It is the intent of Landlord and Tenant that the commencement of Tenant's
obligation to pay Rent under this Lease shall not be delayed to the extent the
Substantial Completion Date is delayed by any Tenant Delays and, if any Tenant
Delays occur, Tenant's obligation to pay Rent under this Lease shall commence as
of the date it would otherwise have commenced absent delay caused by Tenant
provided that within thirty (30) days of the occurrence of any Tenant Delay,
Landlord shall notify Tenant in writing of the fact that such Tenant Delay has
occurred and the known or anticipated extent of any such delay. With respect to
subparagraphs 1 and 3 above, Landlord shall notify Tenant of the extent of
Tenant Delay as soon as Landlord is able to ascertain the specific number of
days. Landlord shall also use reasonable efforts to notify Tenant of any future
Tenant delays that Landlord anticipates. If Substantial Completion does not
occur on August 15, 1996, as a result of Force Majeure or other occurrences not
constituting a Tenant Delay, then except as adjusted above with respect to
delays caused by any Tenant Delays, the Commencement Date shall occur upon
Substantial Completion.
d. Additional Costs. Tenant shall pay to Landlord a sum equal
to any additional cost to Landlord in completing Landlord's Work resulting from
any Tenant Delay if, as a result thereof, the aggregate cost to complete
Landlord's Work is increased. Any such sum shall be in addition to any sums
payable pursuant to any other subsection of this Lease and shall be paid to
Landlord within thirty (30) days after Landlord submits an invoice to Tenant.
Any costs payable pursuant to this Section 3.3 shall be collectable in the same
manner as Rent and, if Tenant defaults in the payment thereof, Landlord shall
have the same rights as in the Event of Default by Tenant in the payment of Rent
in addition to any other remedies and Landlord shall have no obligation to
continue the performance of Landlord's Work until Tenant shall have cured such
Default.
3.4 Substantial Completion and Punchlist. The Landlord shall notify
Tenant of the anticipated Substantial Completion Date of Landlord's Work in a
notice given to Tenant at least five (5) days prior to the Substantial
Completion Date. Substantial Completion is defined as when the facility is
available for occupancy by the Tenant such that the Tenant can operate with a
minimum of interference by the Landlord and is complete in accordance with the
Final Plans with the exception of punch list items of a minor nature and when
the Landlord delivers to Tenant a Temporary Certificate of Occupancy or
Certificate of Occupancy or an equivalent use or occupancy permit issued by the
necessary governmental authorities. Upon the Substantial Completion Date,
Landlord and Tenant shall set a mutually convenient time for Tenant, Landlord,
Tenant's Consultants, and The Xxxxxx Company to inspect the Premises at which
time Tenant shall prepare and submit to Landlord a punchlist of items pertaining
to the Premises which are incomplete or do not conform to the Final Plans. Upon
completion of the inspection, Tenant shall acknowledge by execution of the
Acceptance Letter in the form attached as Exhibit C that Substantial Completion
of the Premises has occurred, subject to any punchlist items to be completed.
Landlord shall complete the punchlist items within thirty (30) days thereafter
subject to Tenant Delays and Force Majeure. If Tenant fails to confer with
Landlord with respect to the Substantial Completion of the Premises within
thirty (30) days after the Substantial Completion Date, then Landlord's Work
shall be deemed complete and satisfactory in all respects and the Commencement
Date shall be deemed to have occurred on the date set forth in Landlord's notice
as the Substantial Completion Date.
3.5 Acceptance of Premises. By execution of the Acceptance Letter,
Tenant shall be deemed conclusively to have accepted the Premises and to have
acknowledged that the Premises are in the condition required by the Final Plans,
except as to incomplete, or defective items specified in the Acceptance Letter
or set forth in the punchlist and except for defects as hereinafter provided.
Further, Landlord shall only be obligated to repair defects in the Building for
a period of one (1) year after the Commencement Date, provided that Tenant
notifies Landlord, in writing, of any such defects within the one (1) year
period after the Commencement Date. Landlord shall have a reasonable period of
time following receipt of said defect notice within which to correct such
defects. Landlord shall not be responsible for the repair or completion of any
defective or incomplete items of the Premises if the need for such repair or
completion is not set forth in the Acceptance Letter, the punchlist or a timely
delivered defect notice. Landlord shall not be responsible or have any liability
for loss or damage to any fixtures, equipment or other property of Tenant or
others installed or placed in the Premises by Tenant or on Tenant's behalf, by
its servants,
employees, agents or independent contractors, except when caused by Landlord's
negligence or willful misconduct.
3.6 Access by Tenant. Landlord shall permit Tenant and Tenant's agents
to have reasonable access to the Premises seventy-five (75) days prior to the
Substantial Completion Date (which access date is estimated to be June 1, 1996)
in order that Tenant may perform special installations and make the Premises
ready for Tenant's use and occupancy ("Beneficial Occupancy Date"). Landlord
shall use reasonable efforts to have the Wafer Fabrication Area ready to accept
Tenant's installations by the Beneficial Occupancy Date. All ventilation,
mechanical systems, lighting, wall systems, filtration, process piping to point
of connections, and wall, floor and ceiling finishes shall be complete as of the
Beneficial Occupancy Date. The Wafer Fabrication Area shall be wiped down clean,
starting on the date of Beneficial Occupancy Date, but a certification for
cleanliness will not be provided as of the Beneficial Occupancy Date and such
testing shall be subsequent to the filtration system being run through the
purging operation. All dates regarding Beneficial Occupancy and Substantial
Completion set forth in this Lease assumes that all clean rooms and Wafer
Fabrication Area will be constructed with a "modified clean" protocol during
construction. If Tenant requests that an "eight stage clean" protocol procedure
be followed during construction, then notwithstanding any other provisions of
this Lease substantial additional time will be required for the Beneficial
Occupancy Date and the Substantial Completion Date. Such Tenant installation by
Tenant shall not be deemed a Tenant acceptance of any portion of Landlord's
Work. Tenant's occupancy upon the Beneficial Occupancy Date shall constitute a
license only and not a lease and such license shall be conditioned upon:
a. Tenant working in harmony and not interfering with Landlord and
Landlord's agents, contractors, workmen, mechanics and suppliers;
b. Tenant furnishing Landlord with such insurance and other
security as Landlord may reasonably require against liabilities which may arise
out of such entry. Landlord shall have the right to withdraw the license in the
event that Tenant or Tenant's agents substantially interfere with Landlord's
Work. Tenant agrees that Landlord shall not be liable in any way for any injury,
loss, or damage which may occur to any of Tenant's property placed on or
installations made in the Premises prior to the Commencement Date, the same
being at sole risk, and Tenant agrees to protect, defend, indemnify, and hold
harmless Landlord from all liabilities, costs, damages, fees and expenses
arising out of or in connection with the activities of Tenant or its agents,
contractors, suppliers, or workmen in or about the Premises except to the extent
caused by the negligence or willful misconduct of Landlord's agents, contractors
or representative; and
c. Tenant paying any and all Operating Expenses related to Tenant's
presence on the Premises.
3.7 Financing. Landlord and Tenant have entered into an Interim
Agreement executed on June 29, 1995, relating in part to certain financing
issues. Landlord expects that its $15,000,000 of financing will be available for
disbursement on or before September 15, 1995 ("Landlord's Financing Date").
Tenant shall take all steps agreed upon between Tenant and such Lender in order
to assure Landlord's lender the availability of Tenant's
Work Costs and in order to coordinate the funding of construction draws. If, for
any reason other than a default of Landlord or Landlord's lender, Tenant fails
to make funds available to meet its obligations to fund Tenant's Work Costs as
set forth in the Interim Agreement or as agreed to with Landlord's lender within
five (5) days of any due date of any payment, then Landlord shall be entitled to
stop work on construction of the Premises until such payment is made and each
day of work stoppage shall be one (1) day of Tenant Delay. If, for any reason
other than a default of Landlord or Landlord's lender, Tenant fails to make any
payment provided for above within thirty (30) days after Landlord's request for
same, then Landlord may declare an Event of Default and immediately exercise any
or all of its remedies under this Lease.
SECTION 4
RENT
4.1 Base Rent. Beginning with the Commencement Date and throughout the
Lease Term, Tenant shall pay to Landlord a minimum annual rent ("Base Rent")
equal to the product of .107 times the Landlord's Work Costs of $15,000,000
which is $1,605,000. At the beginning of the 30th month of the Lease Term and
every 30 months thereafter, the then applicable Base Rent shall be increased
7.5%. The Base Rent under this Section 4.1 shall be payable to Landlord in equal
monthly installments in the amounts set forth in Schedule IV, in advance, due on
the first day of each month, at the address for Landlord set forth in Section
4.2 of this Lease.
4.2 No Offsets. Except as provided in Section 18.3(c), the Base Rent,
Adjusted Base Rent, Operating Costs, Taxes, and all other sums or charges
required by this Lease to be paid by Tenant to Landlord, (all of which are
sometimes collectively referred to as "Rent") shall be paid to Landlord without
abatement, deduction or offset, in lawful money of the United States of America,
at 0000 Xxxx Xxxxxxxx Xxxx, Xxxxx Xxx, P. O. Xxx 0000, Xxxx Xxxxxxx, Xxxxxxxx
00000, Attention: Treasurer or to such other person or at such other place as
Landlord may from time to time designate by thirty (30) days advanced written
notice to Tenant.
4.3 Interest on Late Payments. Any Rent or other amount due from Tenant
to Landlord under this Lease not paid within fifteen (15) days of when due shall
bear interest from the date due, computed on a daily basis, until the date paid,
at the rate of one and one-half percent (1-1/2%) per month until paid, but the
payment of the interest shall not excuse nor cure any default by Tenant under
this Lease. The failure to charge or collect default interest in connection with
any one or more late payments shall not constitute a waiver of Landlord's right
to charge and collect default interest in connection with any other similar or
like late payments. The covenants in this Lease to pay Rent shall be independent
of any other covenant set forth in this Lease. Notwithstanding the above, upon
the first such late payment during any calendar year Landlord shall give notice
of the late payment to Tenant and no interest shall be charged under this
Section 4.3 provided Tenant makes the payment within ten (10) days following
such notice. This interest charge shall be imposed without notice for all
subsequent late payments during the calendar year.
4.4 Late Payment Charge. Further, and notwithstanding the interest
charges provided for in the preceding Section 4.3, if any Rent or other amounts
owing hereunder are not paid within fifteen (15) days of when due, Landlord and
Tenant agree that Landlord will incur additional administrative and financial
expenses and inconveniences, the amount of which will be difficult if not
impossible to determine. Except as set forth in this Section 4.4, Tenant shall
pay to Landlord an additional one time late charge for any late monthly payment
of Rent in the amount equal to four percent (4%) multiplied by the late monthly
payment. Notwithstanding the above, upon the first such late payment during any
calendar year, Landlord shall give written notice of the late payment to Tenant
and no late fee shall be charged under this Section 4.4 provided that the
payment is made within ten (10) days following such notice. This late fee shall
be imposed without notice for all subsequent late payments during the calendar
year.
SECTION 5
TAXES AND OPERATING COST ADJUSTMENT FORMULA
5.1 Additional Rent. In addition to Base Rent, Tenant shall pay the
Taxes and Operating Costs of the Premises in the manner, at the times, and
in the amounts set forth in this Section 5.
5.2 Taxes.
a. Monthly Payment. Tenant shall pay all Taxes related to the
Premises for each calendar year that occurs during any part of the Lease Term
and provide evidence of such payment to Landlord at least fifteen (15) days
prior to the payment delinquency date. At the request of Landlord's lender,
Tenant shall pay to Landlord or Landlord's mortgagee on or before the first day
of each calendar month until the next adjustment date (which period between
adjustment dates is herein called a "Tax Deposit Year") one-twelfth of the
estimated amount of the Taxes. Amounts paid under this Section 5.2(a) in any Tax
Deposit Year shall be reconciled with amounts actually billed to Landlord for
the same Tax Deposit Year, and provided there is any surplus remaining after the
credit to Tenant and provided Tenant shall not then be in default under any of
the provisions of this Lease, Landlord shall, at Landlord's option, either
refund the amount of the surplus to Tenant within thirty (30) days following the
end of the Tax Deposit Year or apply the surplus amount against any other
amounts then due from Tenant to Landlord. If upon the reconciliation there is
any deficiency in the amount of Taxes paid by Tenant, Landlord shall xxxx Tenant
and Tenant shall pay the additional amount within thirty (30) days. Landlord
shall provide Tenant written evidence of the timely payment, in full, of all
Taxes prior to the date of delinquency.
b. Prorations. With respect to the calendar years occurring
during the initial and last years of the Lease Term, the Taxes will be prorated
between Landlord and Tenant so that Tenant pays only that portion thereof that
is proportionate to that part of such calendar years elapsing during the Lease
Term. Upon the expiration of the full Lease Term, Landlord will estimate the
amount of the Taxes that are payable by Tenant with
respect to the then currently available assessed value and mil levy assessment
information); and, within thirty (30) days after receiving written notice
thereof, Tenant will pay such estimated amount to Landlord in discharge of its
obligation to pay the Taxes with respect to such calendar year; or, if the
amounts then paid by Tenant pursuant to Section 5.2(a) exceed Landlord's
estimate of the prorated portion of Taxes for which Tenant is responsible,
Landlord shall refund the difference within thirty (30) days. However, if such
estimate proves to be inaccurate, either Landlord or Tenant may give written
notice to the other of the amount of the actual Taxes for such calendar year,
and Landlord and Tenant will reprorate such Taxes based upon the actual amount
thereof, promptly paying any adjustment between them. In determining the amount
of Taxes for any calendar year, the amount of special assessments to be included
shall be limited to the amount of the installment (plus any interest payable
thereon) of such special assessment which would have been required to have been
paid during such calendar year if Landlord had elected to have the special
assessment paid over the maximum period of time permitted by law, if the
election is available to Landlord. All reference to Taxes "for" and "billed for"
a particular calendar year shall be deemed to refer to Taxes levied, assessed,
billed or otherwise imposed for such calendar year, without regard to the dates
when any such Taxes are due and payable.
c. Definition. As used in this Lease, the term "Taxes" means
any and all general and special taxes and impositions of every kind and nature
whatsoever levied, assessed, or imposed upon, or with respect to, the Premises,
any leasehold improvements, fixtures, installations, additions, and equipment,
whether owned by Landlord or Tenant, or either because of or in connection with
Landlord's ownership, leasing, and operation of the Premises, including, without
limitation, real estate taxes, personal property taxes, sewer rents, water
rents, general or special assessments, and duties or levies charged or levied
upon or assessed against the Premises and personal property, all costs and
expenses (including legal fees and court costs) charged for the protest or
reduction of property taxes or assessments in connection with the Premises,
provided that prior written consent to such protest is granted by Tenant, or any
tax or excise on rent or any other tax (however described) on account of rental
received for use and occupancy of any or all of the Premises, whether any such
taxes are imposed by the United States, the State of Colorado authority, agency
or any political subdivision. Taxes shall not include any income, capital stock,
succession, transfer, franchise, gift, estate, or inheritance taxes.
d. Assessment Contest. Landlord may and, at Tenant's request,
Landlord shall, contest in good faith by appropriate proceedings, or in any
other manner permitted by law, at Landlord's expense (or at Tenant's expense if
Tenant requests such contest), in Landlord's name, any Taxes assessed or levied
against the Property and the Improvements. Tenant agrees to cooperate with
Landlord and to execute any documents reasonably required for such purpose. The
contest shall include appeals from any judgments, decrees or orders until a
final determination shall be made by a court or governmental department or
authority having final jurisdiction in the matter. Notwithstanding such
contests, Tenant shall pay the Taxes in a timely fashion pursuant to all rules
and regulations of the applicable governmental taxing authority and mortgage
documents affecting the Premises. Upon the final determination of any contest,
Tenant shall pay to the appropriate authority any unpaid Taxes together with any
fines, interest, penalties, costs and charges as may, in accordance with such
determination, be payable. Any tax refund obtained or increased tax liability
incurred as a result of such contest together with any related interest or
penalties earned or incurred shall be refunded to or paid by the Tenant as
applicable to all periods during which Tenant leased the Premises.
5.3 Operating Costs.
a. Inclusion in Operating Costs. Tenant shall directly pay the
Operating Costs for the Premises. Except as otherwise specifically provided for
in this Lease, the term "Operating Costs" means any and all expenses, costs, and
disbursements (other than Taxes) of every kind and nature whatsoever, which are
required to operate, repair, maintain, replace and rebuild the Premises in a
first-class condition subject to reasonable wear, including, without limitation,
the following costs but excluding the costs of Landlord's warranty work
described in Section 3.5:
i. Costs of supplies used by Tenant;
ii. Costs incurred in connection with obtaining and providing energy
for the Improvements, including, but not limited to, costs of propane, butane,
natural gas, steam, electricity, fuel oils, coal or any other energy sources;
iii. Costs of water and sanitary and storm drainage services;
iv. Costs of janitorial and security services, if used by Tenant;
v. Costs of general maintenance, repairs and replacements to the
Premises, including costs of maintaining, repairing and replacing heating,
ventilation and air conditioning systems and the cost of maintaining, repairing
and replacing the roof or the parking lot;
vi. Costs of insurance;
vii. Costs of maintenance and replacement of landscaping;
viii. Costs associated with operation and maintenance of the
Improvements;
ix. Costs of repairs or reconstruction to the foundation, exterior
concrete wall, roof superstructure and any other structural elements
("Structural Elements");
x. Costs of repairs, rebuilding, or other work necessitated by fire,
windstorm or other casualty;
xi. Costs of repairs or rebuilding or other work necessitated by
condemnation;
xii. The costs during the Lease Term of capital improvements and
structural repairs and replacements made in, on or to the Premises in order to
conform to changes subsequent to the Commencement Date in any applicable laws,
ordinances, rules,
regulations or orders of any governmental or quasi-governmental authority
having jurisdiction over the Premises.
b. Exclusion Costs from Operating Costs. Operating Costs shall exclude any
costs not required for the operation, repair, maintenance, replacement and
rebuilding of the Premises, including without limitation:
i. depreciation;
ii. financing costs, including payments on debt (principal or
interest);
iii. leasing commissions;
iv. costs incurred to perform or correct the Landlord's warranties
as set forth in this Lease;
v. costs associated with the operation of the business of the
legal entity which constitutes Landlord as the same is separate and apart
from the costs of operation of the Premises, including legal entity formation
and internal entity accounting;
vi. any late fees or penalties or similar fees incurred by Landlord, except
to the extent attributable to Tenant's late payment or non-payment of Rent.
c. Warranties. Landlord agrees that any contract for
construction of the Improvements with The Xxxxxx Company shall contain the
standard AIA document A201 -1987, Section 3.5.1. and Section 12.2.2., plus the
additional language set forth in Exhibit D which is attached to and incorporated
in this Lease ("Construction Contract Warranties"). Landlord shall assign to
Tenant at the Commencement Date all of its rights to the Construction Contract
Warranties and any supplier or manufacturer equipment warranties.
5.4 Operating Information. Landlord may request up to one time per year
that Tenant provide Landlord with information regarding payments made during the
past two (2) years for taxes, utilities, repairs and maintenance related to the
Premises, which information Tenant agrees to supply within thirty (30) days of
Landlord's request.
SECTION 6
HOLDING OVER
Should Tenant hold over after the Termination Date, Tenant shall become
a tenant from month-to-month upon each and all of the terms herein provided as
may be applicable to such a tenancy, and any such tenancy shall not constitute
an extension of this Lease. During such period Tenant shall be considered to be
in default under this Lease and Landlord may elect to charge Tenant Landlord's
damages, consequential as well as direct, sustained by it by reason of Tenant's
occupying the Premises past the expiration of the Lease
Term including Rent at the rate payable for the month immediately preceding the
date of expiration of the Lease Term. Tenant shall defend, indemnify and hold
Landlord harmless from and against any and all claims, losses and liabilities
for damages resulting from failure to surrender possession upon the Termination
Date or sooner termination of the Term, including, without limitation, any
claims made by any succeeding tenant, and such obligations shall survive the
expiration or sooner termination of this Lease. All rights provided for in
Sections 27-30 shall be deemed terminated and be of no further effect during
said month to month tenancy. The provisions of this paragraph shall not exclude
nor waive Landlord's right of re-entry or any other right hereunder.
SECTION 7
BUILDING SERVICES
Tenant shall directly contract with and be solely responsible for
providing any necessary utility or service required for Tenant's use of the
Premises. Tenant agrees that Landlord shall not be liable for the unavailability
of any heating, air conditioning, electric current, or any other utility or
service. If such services are not available, Landlord shall not be liable for
damages to persons or property for any discontinuance, nor shall a
discontinuance in any way be construed as a constructive or actual eviction of
Tenant or cause an abatement of rent or operate to release Tenant from any of
Tenant's obligations.
SECTION 8
USE OF LEASED PREMISES
8.1 Use. The Leased Premises shall not be used other than for the
purpose set forth in Section 1 of this Lease.
8.2 Hazardous Use. Tenant agrees that it will not keep, use, sell, or
offer for sale in or upon the Leased Premises any article which may be
prohibited by any insurance policy in effect from time to time covering the
Improvements or any hazardous substance, the handling or storage of which is
subject to governmental regulations, unless Tenant complies with all such
applicable regulations and provides Landlord, as reasonably requested by
Landlord from time to time, with documents evidencing such compliance, to the
extent that such documents are required to be prepared for and provided to
governmental agencies or are otherwise prepared by Tenant independent of
Landlord's request. Tenant shall promptly comply with all reasonable
requirements of the insurance authority or of any insurer now or hereafter in
effect relating to the Leased Premises.
8.3 No Waste. Tenant shall not commit, suffer, nor permit any waste,
damage, disfiguration, or injury to the Leased Premises or the fixtures and
equipment located in or on the Premises, or permit or suffer any overloading of
the floors and shall not place any safes, heavy business machinery, or other
heavy things in the Improvements other than as
specifically provided for in the Final Plans, without first obtaining the
written consent of Landlord and, if required by Landlord, of Landlord's
architect, and shall not use or permit to be used by any part of the Leased
Premises for any noxious, or offensive trade or business, and shall not cause or
permit any nuisance in, at, or on the Leased Premises other than those
activities required in connection with the routine operation and maintenance of
Tenant's business in the Premises and conducted in compliance with all
applicable Environmental Laws and Environmental Permits.
8.4 Protection Against Insurance Cancellation. If any insurance policy
required to be carried pursuant to this Lease or any part thereof shall be
cancelled or if cancellation shall be threatened, or if the coverage shall be
reduced or be threatened to be reduced, in any way by reason of the use or
occupation of the Leased Premises or any part thereof by Tenant, any assignee or
subtenant of Tenant, or by anyone permitted by Tenant to be upon the Leased
Premises, and, if Tenant fails to take reasonable efforts to remedy the
condition giving rise to the cancellation, threatened cancellation, reduction,
or threatened reduction of coverage following Tenant's receipt of written notice
or to diligently prosecute such remedial action to completion within a
reasonable time following Tenant's receipt of such written notice, Landlord may,
at its option, enter upon the Leased Premises and attempt to remedy the
condition, and Tenant shall forthwith pay the cost to Landlord as additional
Rent. Except for Landlord's negligence, Landlord shall not be liable for any
damage or injury caused to any property of Tenant or of others located on the
Leased Premises as a result of such entry. If Landlord is unable to remedy the
offensive conditions, the Landlord shall have all of the remedies provided for
in this Lease in the event of a default by Tenant. Notwithstanding the foregoing
provisions of this Section 8.4, if Tenant fails to remedy the condition, Tenant
shall be in default and Landlord shall have no obligations to attempt to remedy.
SECTION 9
COMPLIANCE WITH LAW
9.1 Compliance. Landlord warrants to Tenant that on the Commencement
Date the Premises, as constructed by Landlord, comply with all laws, statutes,
ordinances, regulations or restrictive covenants. Tenant shall not use the
Premises, suffer the use of, or permit anything to be done in or about the
Premises which will in any way conflict with any law, statute, ordinance,
governmental rule or regulation, or any applicable restrictive covenants now in
force or which may hereafter be enacted or promulgated. Tenant shall, at its
sole cost and expense, promptly comply with all laws, statutes, ordinances,
restrictive covenants, and governmental rules, regulations, or requirements now
in force or which may hereafter be in force, and with the requirements of any
board of fire underwriters or other similar body now or hereafter constituted
relating to or affecting the Premises provided nothing in this sentence shall
preclude Tenant from making a claim against Landlord for breach of the warranty
in this Section 9.1. The judgment of any court of competent jurisdiction or the
admission of Tenant in an action against Tenant, whether Landlord be a party to
the action or not, that Tenant has violated any law, statute, ordinance,
restrictive
covenant, or governmental rule, regulation, or requirement, shall be conclusive
of that violation as between Landlord and Tenant.
9.2 Hazardous Materials.
a. During the term of this Lease, Tenant shall comply with all
Environmental Laws and Environmental Permits (each as defined in Section 9.2(d)
hereof) applicable to the operation or use of the Premises, shall cause all
other persons occupying or using the Premises to comply with all such
Environmental Laws and Environmental Permits, shall immediately pay all costs
and expenses incurred by reason of such compliance, and shall obtain and renew
all Environmental Permits required for operation or use of the Premises. Tenant
shall not generate, use, treat, store, handle, release or dispose of, or permit
the generation, use, treatment, storage, handling, release or disposal, of
Hazardous Materials (as defined in Section 9.2(d) hereof) on the Premises, or
transport or permit the transportation of Hazardous Materials to or from the
Premises, except as required in connection with the routine operation and
maintenance of Tenant's business in the Premises, and then only in compliance
with all applicable Environmental Laws and Environmental Permits.
b.(1) Tenant will advise Landlord in writing not later than
five (5) business days after Tenant has knowledge of any of the following: (1)
any pending or threatened Environmental Claim (as defined in Section 9.2(d)
hereof) against Tenant relating to the Premises; (2) any condition or occurrence
on the Premises, of which Tenant has knowledge that results in noncompliance by
Tenant with any applicable Environmental Law; and (3) the actual or anticipated
taking of any removal or remedial action in response to the actual or alleged
presence of any Hazardous Material on the Premises. All such notices shall
describe in reasonable detail the nature of the claim, investigation, condition,
occurrence or removal or remedial action and Tenant's response thereto. In
addition, Tenant will provide Landlord with copies of all written communications
regarding the Premises with any government or governmental agency relating to
actual or possible non-compliance with Environmental Laws, all such
communications with any person relating to Environmental Claims, and such
detailed reports of any such Environmental Claim as may reasonably be requested
by Landlord. At any time and from time to time during the term of this Lease,
Landlord or its agents may perform an environmental inspection of the Premises,
and Tenant hereby grants to Landlord and its agents access to the Premises to
undertake such an inspection upon reasonable notice during Tenant's normal
business hours and in a manner to minimize interference with Tenant's business.
b.(2) Landlord will advise Tenant in writing not later than
five (5) business days after Landlord has knowledge of any pending or threatened
Environmental Claim (as defined in Section 9.2(d) hereof) against Landlord
and/or Tenant relating to the Premises. All such notices shall describe in
reasonable detail the nature of the claim. In addition, Landlord will provide to
Tenant all communications with any person relating to Environmental Claims and
such detailed reports in Landlord's possession relating to any such
Environmental Claim as may reasonably be requested by Tenant.
c. Tenant agrees to defend, indemnify and hold harmless the
Landlord, its officers, managers, owners, lenders, employees, attorneys and
agents ("Indemnitees") from and against all obligations (including removal and
remedial actions), losses, claims, suits, judgments, liabilities, penalties
(including, by way of illustration and not by way of limitation, civil fines),
damages (including consequential and punitive damages), costs and expenses
(including attorneys' and consultants' fees and expenses) of any kind or nature
whatsoever that may at any time be incurred by, imposed on or asserted against
such Indemnitees directly or indirectly based on, or arising or resulting from
(a) the actual or alleged presence of Hazardous Materials on the Premises, which
is caused or permitted by Tenant and/or (b) any Environmental Claim relating in
any way to Tenant's operation or use of the Premises. The provisions of this
Section 9.2(c) shall survive the expiration or sooner termination of this Lease.
d. (1) "Hazardous Materials" means (a) petroleum or petroleum
products, natural or synthetic gas, asbestos in any form, urea formaldehyde foam
insulation, and radon gas; (b) any substances defined now or in the future as or
included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," "toxic pollutants," "contaminants" or "pollutants,"
or words of similar import, under any applicable Environmental Law; and (c) any
other substance exposure to which is regulated by any governmental authority;
(2) "Environmental Law" means any federal, state or local statute, law, rule,
regulation, ordinance, code, policy or rule of common law now or hereafter in
effect and in each case as amended, and any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent
decree or judgment, relating to the environment, health, safety or Hazardous
Materials; (3) "Environmental Claims" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations, proceedings, consent
orders or consent agreements relating in any way to any Environmental Law or any
Environmental Permit, including without limitation (a) any and all Environmental
Claims by governmental or regulatory authorities for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law and/or (b) any and all Environmental Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment;
and (4) "Environmental Permits" means all permits, approvals, identification
numbers, licenses and other authorizations required under any applicable
Environmental Law.
SECTION 10
MAINTENANCE, ALTERATIONS AND REPAIRS
10.1 Tenant to Maintain. Subject to Section 3.5, Tenant shall, at its
sole expense, during the Lease Term maintain, repair, replace and rebuild the
Premises, including the Structural Elements, as necessary to keep the Premises
in good order, condition, and repair, fully operational, and clean and
attractive in appearance, all consistent with a first-class building of similar
use in Boulder County, Colorado. Without limiting the generality of the
foregoing, the Tenant will maintain, repair, replace, and rebuild the roof,
windows, parking and driveway surfaces, sidewalks, landscaping, plumbing,
heating, ventilating, and air-conditioning units, and other mechanical and
electrical, systems on, or constituting a part of, the Premises. Any system or
portion of the Premises that has a warranty shall be maintained in such a manner
as to not void any such warranty and allow Landlord, upon termination of this
Lease, to obtain a maintenance contract on the system without incurring extra
charges.
10.2 Alterations. Tenant shall not, without the prior written consent
of Landlord which shall not be unreasonably withheld so long as Tenant
demonstrates financial assurance of its ability to restore the Premises to
original condition, make any alterations, improvements, or additions to the
Premises, including, but not limited to, partitions, wall coverings, floor
coverings, special lighting or equipment installations and structural changes
(collectively the "Alterations"). Notwithstanding anything else in this Section
10.2, Tenant may make non-structural changes to the Premises (including roof
penetrations) the cost of which is less than $50,000 per project without
Landlord's consent provided Tenant gives Landlord a copy of as-built plans
within thirty (30) days after completion. If Tenant desires to make any
Alterations, the cost of which exceeds $50,000, Tenant shall first submit to
Landlord plans and specifications and obtain Landlord's written approval, if
required, prior to commencing any work. All Alterations, whether temporary or
permanent in character, made by Landlord or Tenant in or upon the Premises shall
become Landlord's property and shall remain upon the Premises at the termination
of this Lease by lapse of time or otherwise, without compensation to Tenant
(excepting only Tenant's movable office furniture, inventory, trade fixtures,
and office and professional equipment). If Landlord's consent is required to the
Alterations, Landlord may require Tenant to remove the Alterations at Tenant's
cost upon the termination of this Lease, and repair any damage caused to the
Premises as a result of any removal shall be paid for by Tenant; provided that
Landlord has given Tenant notice of its intent to require Tenant to remove and
restore any Alterations within seven (7) days of Landlord's receipt of the plans
and specifications. Tenant shall promptly pay, when due, all costs of all
Alterations, and upon completion, deliver to Landlord, evidence of payment and
waivers of all liens for labor, services, or materials. Tenant shall defend and
hold Landlord and the Premises harmless from all costs, including reasonable
attorney fees, damages, liens, claims of liens for labor, services, or materials
relating to the work. Tenant shall immediately give Landlord notice of any
mechanics liens or foreclosure proceedings and Landlord shall be allowed, at its
option, to participate in the defense of or otherwise defend any such claim at
the expense of Tenant. At Landlord's request, Tenant shall bond over any
contested mechanics liens at Tenant's expense. If Landlord incurs any expenses
in the removal of trash or cleaning as a result of Tenant's contractors' work
then Tenant agrees it shall reimburse Landlord within seven (7) days of billing.
In any event, upon termination of this Lease, Tenant shall not be obligated to
remove any item or work attached to the Building as of the Commencement Date.
10.3 Protection Against Liens. At least five (5) days prior to the
commencement of any work the cost of which is in excess of $50,000 on the Leased
Premises, Tenant shall notify Landlord of the commencement of the work and
Tenant shall post a written or printed notice on the Premises that Landlord's
interest shall not be subject to any liens pursuant to Section 38- 22-105(2) of
the Colorado Revised Statutes. During the progress
of any work on the Leased Premises, Landlord or its representatives shall have
the right to go upon and inspect the Leased Premises at all reasonable times,
and shall have the right to post and keep posted thereon notices such as those
provided for by Section 38-22-105(2) of the Colorado Revised Statutes or to take
any further action which Landlord may deem to be proper for the protection of
Landlord's interest in the Leased Premises.
10.4 Surrender of Premises. Upon the expiration of the Lease Term or
any sooner termination of this Lease, Tenant will surrender and deliver the
Premises to Landlord, in good order, condition, and repair, subject only to
ordinary wear and tear and to damage by fire or other casualty if and to the
extent that Landlord is reimbursed by insurance proceeds for the full amount of
such damage. The foregoing will not diminish, or be deemed to diminish, the
obligations of Tenant to maintain, repair and replace the Premises in accordance
with the other provisions of this Lease. Further, upon such expiration or
termination, Tenant will remove all of Tenant's property from the Premises,
except as is provided in Section 10.2. The provisions of this Section will
survive the expiration of the Lease Term or any termination of this Lease.
SECTION 11
ABANDONMENT
Tenant shall not abandon the Premises at any time during the Lease Term
and, if Tenant shall abandon or surrender (whether at the end of the stated Term
or otherwise) the Premises, or shall be dispossessed by process of law or
otherwise, then any personal property belonging to Tenant left on the Premises
shall be deemed abandoned and may be sold or otherwise disposed of by Landlord
without any liability to Tenant whatsoever. Tenant shall not at any time remove
Landlord's property or any fixtures constituting property of Landlord from the
Premises. Any removal of Landlord's property from the Premises by Tenant shall
constitute a material breach of this Lease and Landlord shall have the right to
take all reasonable steps to stop or prevent such breach without such actions
constituting a constructive eviction of Tenant.
SECTION 12
ASSIGNMENT AND SUBLETTING
12.1 Landlord's Consent Required. Tenant shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all or any part of Tenant's interest in the Lease or in the Premises,
without Landlord's prior written consent, which Landlord shall not unreasonably
withhold. In no event shall Landlord be required to approve any transfer to a
prospective tenant who fails to meet the use restrictions set forth in Section
1.1. Landlord shall respond to Tenant's request for consent hereunder in a
timely manner and any attempted assignment, transfer, mortgage, encumbrance or
subletting without such consent shall be void, and shall constitute a material
default and breach of this Lease without the need for notice to Tenant under any
provision of this Lease. "Transfer"
within the meaning of this Section 12.1 shall include any merger,
reorganization, or similar transaction to which the Tenant's consent is
required, or the sale or transfer of all or substantially all of Tenant's
assets. Notwithstanding the above, Tenant may assign all of its rights, (but not
less than all of its rights) to any entity which is at least 51% owned by Tenant
or a parent of Tenant or in connection with any merger or reorganization of
Tenant or a sale of all of Tenant's assets provided that Landlord receives
notice of the transaction and sufficient financial information evidencing that
the parties remaining liable on the Lease have the financial strength and credit
rating at least equal to Tenant's as of the date this Lease is executed or the
date of assignment, whichever is greater.
12.2 Terms and Conditions - Assignment and Subletting.
a. Regardless of Landlord's consent, no assignment or
subletting shall release Tenant of Tenant's obligations hereunder or alter the
primary liability of Tenant to pay Rent and other sums due Landlord hereunder
including Taxes and Operating Costs, and to perform all other obligations to be
performed by Tenant under this Lease.
b. Landlord may accept Rent from any person other than Tenant pending
approval or disapproval of such assignment.
c. Neither a delay in the approval or disapproval of such
assignment or subletting, nor the acceptance of Rent, shall constitute a waiver
or estoppel of Landlord's right to exercise its remedies for the breach of any
of the terms or conditions of this Section 12 of this Lease.
d. The consent by Landlord to any assignment or subletting
shall not constitute a consent to any subsequent assignment or subletting by
Tenant or to any subsequent or successive assignment or subletting by the
subtenant. However, Landlord may consent to subsequent sublettings and
assignments of the sublease or any amendments or modifications thereto without
notifying Tenant or anyone else liable on the Lease or sublease and without
obtaining their consent and such action shall not relieve such persons from
liability under this Lease or said sublease; however, such persons shall not be
responsible to the extent any such amendment or modification enlarges or
increases the obligations of the Tenant or subtenant under this Lease or such
sublease.
e. Upon any default under this Lease, Landlord may proceed
directly against Tenant, any guarantors or any one else responsible for the
performance of this Lease, including the subtenant, without first exhausting
Landlord's remedies against any other person or entity responsible to Landlord,
or any security held by Landlord or Tenant.
f. Landlord's written consent to any assignment or subletting
of the Premises by Tenant shall not constitute any acknowledgement that no
default then exists under this Lease of the obligations to be performed by
Tenant nor shall such consent be deemed a waiver of any then existing default,
except as may be otherwise stated by Landlord writing at the time.
g. The discovery of the fact that any financial statement
relied upon by Landlord in giving its consent to an assignment or subletting was
materially false shall, at Landlord's election, render Landlord's consent null
and void.
h. No consent by Landlord to an assignment of this Lease shall
be effective unless and until Tenant shall deliver to Landlord an agreement in
form and substance reasonably satisfactory to Landlord pursuant to which such
assignee assumes and agrees to be bound by all of the terms, covenants,
conditions, provisions and agreements of this Lease.
12.3 Additional Terms and Conditions - Subletting. Regardless of
Landlord's consent, the following terms and conditions shall apply to any
subletting by Tenant of all or any part of the Premises and shall be deemed
included in all subleases under this Lease whether or not expressly incorporated
therein:
a. Landlord shall not by reason of any assignment of such
sublease to Landlord nor by reason of the collection of the rents from a
subtenant, be deemed liable to the subtenant for any failure of tenant to
perform and comply with any of Tenant's obligations to such subtenant under such
sublease. Tenant hereby irrevocably authorized and directs any such subtenant,
upon receipt of a written notice from Landlord stating that a default exists in
the performance of Tenant's obligations under this Lease, to pay to Landlord the
rents due and to become due under the sublease. Tenant agrees that such
subtenant shall have the right to rely upon any such statement and request from
Landlord, and that such subtenant shall pay such rents to Landlord without any
obligation or right to inquire as to whether such default exists and
notwithstanding any notice from or claim from Tenant to the contrary. Tenant
shall have no right or claim against said subtenant or Landlord for any such
rents so paid by said subtenant to Landlord.
b. No sublease entered into by Tenant shall be effective
unless and until it has been approved in writing by Landlord. In entering into
any sublease, Tenant shall use only such form of sublease as is reasonably
satisfactory to Landlord, and once approved by Landlord, such sublease shall not
be changed or modified without Landlord's prior written consent. Any subtenant
shall, by reason of entering into a sublease under this Lease, be deemed, for
the benefit of Landlord, to have assumed and agreed to conform and comply with
each and every obligation herein to be performed by Tenant other than such
obligations as are contrary to or inconsistent with provisions contained in a
sublease to which Landlord has expressly consented in writing.
c. If Tenant shall default in the performance of its
obligations under this Lease and Landlord terminates this Lease, Landlord at its
option and without any obligation to do so, may require any subtenant to attorn
to Landlord, in which event Landlord shall undertake the obligations of Tenant
under such sublease from the time of the exercise of said option to the
termination of such sublease; provided, however, Landlord shall not be liable
for any prepaid rents or security deposit paid by such subtenant to Tenant or
for any other prior defaults of Tenant under the sublease.
x.Xx subtenant shall further assign or sublet all or any part of the
Premises without Landlord's prior written consent.
12.4 Landlord's Expenses. If Tenant shall assign or sublet the Premises
or request the consent of Landlord to any assignment or subletting or if Tenant
shall request the consent of Landlord for any act Tenant proposes to do then
Tenant shall pay Landlord's reasonable costs and expenses incurred in connection
therewith, including attorneys, architects', engineers' or other consultants'
fees. In addition, Tenant shall pay to Landlord, as Rent, all reasonable
additional direct expenses incurred by Landlord due to any such assignee or
sublessee taking possession of the Premises.
12.5 Acceptance of Performance; No Waiver. If this Lease is assigned,
or if the Premises or any part are sublet or occupied by anybody other than
Tenant, Landlord may, upon default by Tenant, collect the rent from the
assignee, subtenant, or occupant and apply the net amount collected to the Rent,
but no assignment, subletting, occupancy or collection shall be deemed an
acceptance of the assignee, subtenant or occupant as the Tenant, or constitute a
release of Tenant from further performance by Tenant of covenants on the part of
Tenant.
SECTION 13
DAMAGE TO PROPERTY, INJURY TO PERSONS
13.1 Tenant's Waiver of Claims. Tenant, as a material part of the
consideration to be rendered to Landlord under this Lease, to the extent
permitted by law, hereby waives all claims which Tenant, Tenant's successor, or
assigns may have against Landlord, its officers, directors, owners, employees,
attorneys, and agents (excluding contractors and subcontractors) (collectively
the "Released Parties") resulting from fire, explosion, falling plaster, smoke,
steam, gas, electricity, water or rain which may leak from any part of the
Improvements or from the pipes, appliances or plumbing works therein or from the
roof, street or subsurface or from any other places resulting from dampness or
any other cause whatsoever, except personal injury or loss or damage to property
caused by or due to the negligence or willful misconduct of Landlord or breach
of Landlord's warranties set forth in Section 3.5. In addition and subject to
the exceptions of the preceding sentence, the Released Parties shall not be
liable for (i) interference with the utility service, HVAC, or for any latent
defect in the Improvements, except as provided in Section 3.5, (ii) any loss or
damage for which Tenant is required to insure or (iii) any loss or damage
resulting from any construction, Alterations or repair required or permitted to
be performed by Tenant under this Lease. The foregoing to the contrary
notwithstanding, nothing in this Section modifies the indemnities by the
Landlord in this Lease including, but not limited to, Section 13.3(b).
13.2 Tenant's Obligations. Notwithstanding any other provision in this
Lease to the contrary, if Tenant has a contractual obligation under this Lease
and Tenant's failure to perform such obligation would also give rise to
negligence by Landlord, then Landlord's negligence shall not be considered in
applying any provisions of this Lease. By way of example only, without limiting
the foregoing, if Landlord had a statutory duty or a common
law duty to remove ice and snow from any sidewalks on the Premises and Tenant
had a simultaneous contractual obligation under this Lease to maintain the
Premises in compliance with all governmental laws, rules and regulations and/or
maintain the Premises in good condition, Tenant would nevertheless be required
to indemnify Landlord pursuant to this Section 13.2 from the claim of any person
who slipped on the icy sidewalk even though Landlord may legally be considered
negligent.
13.3 Indemnification.
a. Tenant's Indemnification. Tenant shall indemnify, defend
and hold harmless Landlord and its officers, directors, owners, employees,
attorneys and agents (collectively, the "Landlord Indemnitees") from and against
any and all claims, demands, causes of action, judgments, costs, expenses, and
all losses and damages (including consequential and punitive damages) arising
from Tenant's use of the Premises or from the conduct of its business or from
any activity, work, or other acts or things done, permitted or suffered by
Tenant in or about the Premises, and shall further indemnify, defend and hold
harmless the Landlord Indemnitees from and against any and all claims arising
from any breach or default in the performance of any obligation on Tenant's part
to be performed under the terms of this Lease, or arising from any act, omission
or negligence or willful or criminal misconduct of Tenant, or any officer,
agent, employee, independent contractor, guest, or invitee thereof, and from all
costs, reasonable attorneys' fees and disbursements, and liabilities incurred in
the defense of any such claim or any action or proceeding which may be brought
against, out of or in any way related to this Lease. Tenant's indemnity
obligations set forth in this Section 13.3(a) shall not operate or apply to any
such claim(s) arising from Landlord's negligence or willful misconduct. Upon
notice from Landlord, Tenant shall defend any such claim, demand, cause of
action or suit at Tenant's expense by counsel satisfactory to Landlord in its
sole discretion. As a material part of the consideration to Landlord for this
Lease, Tenant hereby assumes all risk of damage to property or injury to persons
in, upon or about the Premises from any cause, and Tenant hereby waives all
claims with respect thereto against the Indemnitees, except to the extent
Landlord is obligated to indemnify Tenant pursuant to Section 13.3(b). Tenant
shall give immediate notice to Landlord in case of casualty or accidents in the
Premises. The provisions of this Section 13.3(a) shall survive the expiration or
sooner termination of this Lease.
b. Landlord's Indemnification. Landlord shall indemnify, defend and hold
harmless Tenant and its officers, directors, owners, employees, attorneys and
agents (collectively the "Tenant Indemnitees") from and against any and all
claims, demands, causes of action, judgments, costs, expenses, and all losses
and damages (including consequential and punitive damages) arising from any
breach or default of performance of any obligation on Landlord's part to be
performed under the terms of this Lease, or arising from any negligence or
willful or criminal misconduct of Landlord, or any officer, agent, employee,
independent contractor, guest or invitee thereof, and from all costs, reasonable
attorneys fees and disbursements, and liabilities incurred in the defense of any
such claim or action or proceeding which may be brought against, out of, or in
any way related to this Lease. Upon notice from Tenant, Landlord shall defend
any such claim, demand, cause of action or suit at Landlord's expense by counsel
satisfactory to Tenant in its sole discretion. The
provisions of this Section 13.3(b) shall survive the expiration or sooner
termination of this Lease. Landlord's indemnity obligations set forth in this
Section 13.3(b) shall not operate or apply to any such claim(s) arising from
Tenant's breach of this Lease or Tenant's negligence or willful misconduct.
13.4 Negligence of Third Parties. The Landlord Indemnitees shall not be
liable to Tenant for any damage by or from any act or negligence of any third
party owner or occupant of adjoining or contiguous property or any other third
party.
13.5 Tenant's Property. All property belonging to Tenant, or any
occupant of the Premises, that is on the Premises, shall be there at the sole
risk of Tenant or other person only, and the Landlord Indemnitees (except in the
case of the negligence or willful misconduct of Landlord or its agents or
employees or breach of the warranties set forth in Sections 3.5 and 10.1) shall
not be liable for, without limitation: (i) damage to or theft of or
misappropriation of such property; (ii) any damage to property entrusted to
Landlord, its agents, or employees, if any; (iii) loss of or damage to any
property by theft or otherwise, by any means whatsoever; (iv) any injury or
damage to persons or property resulting from any condition on the Premises
including, but not limited to, fire, explosion, smoke, falling plaster, steam,
gas, electricity, snow, water, or rain which may leak from any part of the
Improvements or from the pipes, appliances, or plumbing works therein or from
the roof, street, subsurface, or from any other place, or resulting from
dampness or any other cause whatsoever; or (v) interference with the light, air
or other incorporeal hereditament. Tenant shall give prompt notice to Landlord
in case of fire or accidents in the Premises or in the Improvements or of
observed defects in the Improvements, its fixtures or equipment.
13.6 Third-Party Suits. If any action or proceeding is brought against
Landlord by reason of any obligation on Tenant's part to be performed under the
terms of this Lease, or arising from any act or negligence of Tenant, its
agents, or employees, then Tenant, upon notice from Landlord, shall defend the
same at Tenant's expense. If any action or proceeding is brought against Tenant
by reason of any obligation on Landlord's part to be performed under the terms
of this Lease, or arising from any act or negligence of Landlord, its agents, or
employees, then Landlord, upon notice from Tenant, shall defend the same at
Landlord's expense.
SECTION 14
INSURANCE
14.1 Insurance. Tenant shall, during the entire Term of this Lease, at
its sole cost and expense, obtain, maintain, and keep in full force and effect
the following types of insurance:
a. Fire and extended coverage insurance covering Tenant's
personal property, fixtures, improvements, wall coverings, floor coverings,
window coverings, alterations, furniture, equipment, lighting, ceilings,
heating, ventilation and air conditioning equipment, interior plumbing and plate
glass and other property against loss or damage by
fire, flood, windstorms, hail, earthquakes, explosion, riot, damage from
aircraft and vehicles, smoke damage, vandalism and malicious mischief and such
other risks as are from time to time covered under "extended coverage"
endorsements and special extended coverage endorsements commonly known as "all
risks" endorsements, in an amount equal to the greater of the full replacement
value or the amount required by the holder of any mortgage from time to time and
containing the waiver of subrogation required in Section 16 of this Lease. Such
policy shall name Landlord as an additional insured as Landlord's interest may
appear and Landlord's mortgagee under a standard mortgagee policy to the extent
of their respective interests. In addition, Landlord shall obtain, at Tenant's
expense, its own policy insuring Landlord's liability for damage to Tenant's
property in an amount of $5,000,000.
b. All risk coverage covering all of the Improvements on the
Premises in an amount equal to the full replacement value without deduction for
depreciation, (including, without limitation, with respect to the roofs) as
determined by Landlord from time to time. Landlord and Tenant shall be named
joint loss payees on this policy and Landlord's mortgagee shall be the sole
named mortgagee under a standard mortgagee's clause. Any of Landlord's
mortgagees shall agree to make the proceeds of such insurance available to
Tenant for the purpose of repairing and restoring the Improvements provided that
the loan is not in default and that Tenant is not in default under this Lease.
In addition, Landlord may obtain at Tenant's expense its own policy insuring
Landlord's liability for damage to the Improvements.
c. Comprehensive General Liability Insurance with contractual
liability endorsement utilizing an Insurance Services Office standard form
providing coverage for bodily injury (including death), property damage and
products liability insurance (where such exposure exists) occurring on the
Premises. Such insurance shall have a combined single limit of not less than Six
Million Dollars ($6,000,000) per occurrence and Ten Million Dollars
($10,000,000) in the aggregate for all occurrences within each policy year, or
such greater amounts as Landlord may from time to time reasonably require naming
Landlord, and its mortgagees with an insurable interest, as additional insureds.
In addition, Landlord may obtain, at Tenant's expense, its own policy insuring
Landlord against such risks.
d. State Worker's Compensation Insurance in the statutorily
mandated limits and Employers Liability Insurance with limits of not less than
Five Hundred Thousand Dollars ($500,000), or such greater amount as Landlord may
from time to time require.
e. Rent loss insurance in such amounts as will enable Tenant
to keep and perform all the obligations under this Lease for a period of twelve
(12) months.
f. Any other form or forms of insurance as Landlord or the
mortgagees of Landlord may reasonably require from time to time in form, in
amounts and for insurance risks against which a prudent tenant or landlord would
protect itself in similar circumstances.
14.2 Policies. It is expressly understood and agreed that the foregoing
minimum limits of insurance coverage shall not limit the liability of Tenant for
its acts or omissions as provided in this Lease. All of the foregoing insurance
policies (with the exception of Worker's Compensation Insurance to the extent
not available under statutory law) shall
name Landlord, any holder of a mortgage, or any managing agent for the Premises
and such other parties as Landlord shall from time to time designate as an
additional insured as their respective interests may appear, and shall provide
that any loss shall be payable to Landlord and any other additional insured
parties as their respective interests may appear. All claims under policies
carried by Tenant with respect to Section 14.1(a), (b) and (c) may be settled by
Tenant subject to Landlord's consent which shall not be unreasonably withheld.
All insurance required hereunder shall be placed with companies which are rated
A-:VIII or better by Best's Insurance Guide and licensed to do business in the
state in which the Premises are located. All such policies shall be written as
primary policies not contributing with and not supplemental to the coverage that
Landlord may carry, with deductibles not to exceed one percent (1%) of the
amount of coverage. Tenant shall deliver certified copies of all such policies
and all endorsements thereto, thirty (30) days prior to the Commencement Date,
or earlier access to the Premises during construction or, in the case of
renewals thereto, fifteen (15) days prior to the expiration of the prior
insurance policy, together with evidence that such policies are fully paid for,
and that no cancellation, material change or non-renewal thereof shall be
effective except upon thirty (30) days' prior written notice from the insurer to
Landlord. If Tenant shall fail at any time to procure and/or maintain the
insurance required herein, Landlord may, at its option, procure such insurance
on Tenant's behalf and the cost thereof shall be payable upon demand, as Rent.
Payment by Landlord of any insurance premium or the carrying by Landlord of any
such insurance policy shall not be deemed to waive or release the default of
Tenant with respect thereto.
14.3 Protection Against Insurance Cancellation. If any insurance policy
required under this Lease shall be cancelled or if cancellation shall be
threatened, or if the coverage shall be reduced or be threatened to be reduced,
in any way by reason of the use or occupation of the Premises or any part
thereof by Tenant, any assignee or subtenant of Tenant, or by anyone permitted
by Tenant to be upon the Premises, and if Tenant fails to take reasonable
efforts to remedy the condition giving rise to the cancellation, threatened
cancellation, reduction, or threatened reduction of coverage within forty-eight
(48) hours after notice or to complete the remedy within the earlier of five (5)
days after notice or cancellation of the policy, Landlord may, at its option,
enter upon the Premises and attempt to remedy the condition, and Tenant shall
forthwith pay the cost to Landlord as additional Rent. Landlord shall not be
liable for any damage or injury caused to any property of Tenant or of other
persons located on the Premises as a result of such entry. If Landlord is unable
to remedy the offensive conditions if it chooses to attempt same, the Landlord
shall have all of the remedies provided for in this Lease in the event of a
default by Tenant. Notwithstanding the foregoing provisions of this Section
14.3, if Tenant fails to remedy the condition, Tenant shall be in default and
Landlord shall have no obligations to attempt to remedy.
14.4 Blanket Insurance. Nothing in this Section 14 shall prevent Tenant
from taking out insurance of the kind and in the amounts provided for under this
Article under a blanket insurance policy or policies covering other properties
as well as the Leased Premises, provided, however, that any such policy or
policies of blanket insurance provide that the amount of the insurance available
to pay claims as required under this Lease, independent of any events affecting
other property or liability of Tenant, shall not be less than the amounts
required by Section 14.1, and (ii) such amounts so specified shall be
sufficient to prevent any one of the assureds from becoming a co-insurer within
the terms of the applicable policy or policies, and provided further, however,
that any such policy or policies of blanket insurance shall, as to the Leased
Premises, otherwise comply as to endorsements and coverage with the provisions
of this Article. To the extent that Landlord is named as an additional insured
under any blanket insurance policies, such policies shall insure losses incurred
due to the acts or omissions of Landlord, excluding Landlord's intentional acts.
Tenant hereby indemnifies and agrees to hold Landlord harmless from any loss
that would be covered by such policies if the deductible amounts were zero.
SECTION 15
DAMAGE OR DESTRUCTION
Tenant shall notify the Landlord of the exact cause, nature, and extent
of any damage for which Tenant may make an insurance claim or other material
damage immediately upon the occurrence of such damage to any part of the
Premises. Tenant shall further notify Landlord within thirty (30) days of the
occurrence of such damage if it desires not to repair, replace or rebuild the
Premises as necessary to restore the Premises to substantially the same
condition that the Premises were in as of the Commencement Date based upon the
original Final Plans as constructed, including any changes necessary to comply
with the then current governmental laws, rules, ordinances, and regulations
("Original Condition"). Upon receipt of such notice, Landlord may elect to
either terminate the Lease and retain all insurance proceeds or require Tenant
to repair,replace or rebuild. Unless Landlord elects to terminate the Lease
within forty-five (45) days of Landlord's receipt of Tenant's notice regarding
the occurrence of damage, Tenant shall promptly repair, replace and rebuild the
Premises to their Original Condition at Tenant's expense. If Tenant repairs,
replaces or rebuilds the Premises, Tenant shall be entitled to the net insurance
proceeds payable under the insurance carried pursuant to Section 14.1(b) with
respect to such damage and Tenant shall pay any costs in excess of such net
insurance proceeds which are incurred to restore the Premises to their Original
Condition except that Tenant shall not pay to the extent that any such insurance
proceeds are retained by Landlord's lender and applied to Landlord's loan. If
the Landlord elects to terminate the Lease Term, the Lease shall be deemed to
have expired on the date of notice of loss, and all insurance proceeds, plus the
amount of any deductible under the insurance policies, shall be paid to and
retained by the Landlord. There shall be no abatement of Rent unless and to the
extent that Landlord receives rent insurance proceeds from the insurance
purchased by Tenant. In no event shall Landlord be required to make any repairs,
replacements, or rebuild any portion of the Premises.
SECTION 16
WAIVER AND SUBROGATION
Landlord and Tenant agree that any and all insurance which is required
to be carried under Section 14 shall be endorsed with a subrogation clause,
substantially as follows: "This insurance shall not be invalidated should the
insured waive, in writing, prior to a loss, any
and all right of recovery against any party for loss occurring to the property
described herein." Each party waives all claims for recovery from the other
party, its officers, agents or employees for any loss or damage (whether or not
such loss or damage is caused by negligence of the other party, and
notwithstanding any provisions contained in this Lease to the contrary) to any
of its real or personal property insured under valid and collectible insurance
policies to the extent of the collectible recovery under the insurance.
SECTION 17
ENTRY OF LANDLORD
Landlord, its agents, and its mortgagees, upon 24 hours advance notice
(except in case of emergency), shall have the right to enter the Premises during
normal business hours for the purpose of examining or inspecting the same and to
show same to prospective mortgagees, purchasers or tenants of the Improvements,
and to perform any obligations of Tenant if Tenant has failed to do so. Tenant
will require that Landlord be escorted while on the Premises. Landlord shall use
reasonable efforts on any such entry not to unreasonably interrupt or interfere
with Tenant's use and occupancy of the Premises and shall not disclose any trade
secrets or confidential information acquired by Landlord during such entry.
SECTION 18
DEFAULT BY TENANT
18.1 Events of Default. Each one of the following events is referred
to as an "Event of Default":
a. Tenant shall fail to make due and punctual payment of Rent
or any other amounts payable hereunder, and such failure shall continue for five
(5) business days after written notice thereof is given by Landlord; provided,
however, Tenant shall not be entitled to more than one (1) notice of a
delinquency in payment during any calendar year and if thereafter during such
calendar year any Rent or other amounts owing hereunder are not paid when due, a
default shall be considered to have occurred even though no notice is given;
b. Tenant shall default in the performance of or compliance
with any of the other covenants, agreements, terms or conditions of this Lease
to be performed by Tenant (other than any default curable by the payment of
money), and, unless expressly provided elsewhere in this Lease that no notice
and/or opportunity to cure such default is to be afforded Tenant, such default
shall continue for a period of thirty (30) days after written notice thereof
from Landlord to Tenant, or, in the case of a default which cannot with due
diligence be cured within thirty (30) days, Tenant fails to commence such cure
promptly within such thirty (30) day period and thereafter diligently prosecute
such cure to
completion as promptly as possible. Notwithstanding the above, Tenant must
immediately remedy any default that presently threatens an injury or harm to any
person or property; or
c. Tenant shall become insolvent within the meaning of the
United States Bankruptcy Code, as amended from time to time (the "Code"), or
shall have ceased to pay its debts in the ordinary course of business, or shall
be unable to pay its debts as they become due, or Tenant shall notify Landlord
that it anticipates the occurrence of any of the foregoing conditions; or
d. Tenant shall file, take any action to file, or notify
Landlord that Tenant intends to file, a petition, case or proceeding under any
section or chapter of the Code, or under any similar law or statute of the
United States or any state thereof relating to bankruptcy, insolvency,
reorganization, winding up or composition or adjustment of debts; or
e. Tenant shall be adjudicated as a bankrupt or insolvent
or consent to, or file an answer admitting or failing reasonably to contest
the material allegations of, a petition filed against it in any such case or
proceeding in the preceding clause (d); or
f. Tenant shall seek to or consent to or acquiesce in the
appointment of any receiver, trustee, liquidator or other custodian of
Tenant or any material part of its or their properties, whether or not the same
shall relate to their interests in this Lease; or
g. Tenant shall make a general assignment for the benefit of
creditors; or take any other action for the purpose of effecting any of the
foregoing clauses (c) through (f); or
h. if, within thirty (30) days after the filing of an
involuntary petition in bankruptcy against Tenant or the commencement of any
case or proceeding against Tenant seeking any reorganization, composition,
arrangement, liquidation, dissolution, readjustment or similar relief under any
law, such proceeding shall not have been dismissed; or if, within thirty (30)
days after the appointment, without consent or acquiescence of Tenant, of any
trustee, receiver or liquidator of Tenant, of all or any substantial part of the
properties of Tenant, or of all or any part of the Premises, such appointment
shall not have been vacated or stayed on appeal or otherwise; or if, within
thirty (30) days after the expiration of any such stay, such appointment shall
not have been vacated; or if, within thirty (30) days after the taking of
possession without the consent or acquiescence of Tenant, by any governmental
office or agency pursuant to statutory authority for the dissolution or
liquidation of Tenant, such taking shall not have been vacated or stayed on
appeal or otherwise; or
i. the Premises shall be effectively abandoned by Tenant; or
j. any execution or attachment is issued against Tenant or
any of its property whereupon the Premises shall be taken or occupied or
attached, or attempted to be taken or occupied or attached by someone other than
Tenant; or
k. Tenant does or permits to be done anything which creates a
lien upon the Premises or the Improvements and in any such event such lien is
not discharged by Tenant within ten (10) days after receipt of notice of the
filing thereof; or
l. this Lease shall be transferred to or shall pass to or
devolve upon any other person or party except in the manner set forth in
Section 12; or
m. Tenant shall fail to take possession of the Premises
within thirty (30) days of the Substantial Completion Date.
18.2 Landlord's Remedies Upon Default.
a. Upon the occurrence of any Event of Default, Landlord shall
have the option to pursue any one or more of the following remedies without
notice or demand whatsoever, in addition to, or in lieu of, any and all remedies
available to Landlord under the laws of the state in which the Improvements are
located:
i. Landlord may give Tenant written notice of its election to
terminate this Lease, effective on the date specified therein, whereupon
Tenant's right to possession of the Premises shall cease and this Lease, except
as to Tenant's liability determined in accordance with this Lease, shall be
terminated.
ii. Landlord and its agents may immediately re-enter and take
possession of the Premises, or any part thereof, either by summary proceedings,
or by any other applicable action or proceeding, or by force or otherwise
(without being liable for indictment, prosecution or damages therefor) and may
repossess same as Landlord's former estate and expel Tenant and those claiming
through or under Tenant, and remove the effects of both or either, without being
deemed guilty in any manner of trespass, and without prejudice to any remedies
for arrears of Rent or Tenant's breach of covenants or conditions.
iii. Should Landlord elect to re-enter as provided hereinabove or
should Landlord take possession pursuant to legal proceedings or pursuant to any
notice provided by law, Landlord may, from time to time, without terminating
this Lease, relet the Premises or any part thereof in Landlord's or Tenant's
name, but for the account of Tenant, for such term or terms (which may be
greater or less than the period which would otherwise have constituted the
balance of the Term) and on such terms and conditions (which may include
concessions of free rent and alteration, repair and improvement of the Premises)
as Landlord, in its sole discretion, may determine, and Landlord may collect and
receive the rents therefor without relieving Tenant of any liability under this
Lease or otherwise affecting any such liability. Landlord shall have no
obligation to relet the Premises or any part thereof and shall in no event be
liable for failure to relet the Premises or any part thereof, or, in the event
of any such reletting, for refusal or failure to collect any rent due upon such
reletting, and no such refusal or failure shall operate to relieve Tenant of any
liability under this Lease or otherwise to affect any such liability. No such
re-entry or taking possession of the Premises by Landlord shall be construed as
an election on Landlord's part to terminate this Lease unless a written notice
of such intention be given to Tenant. No notice from Landlord hereunder or under
a forcible entry and 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 such re-entry
and/or reletting to exercise its right to terminate this Lease by giving Tenant
written notice thereof, in which event this Lease will terminate as specified in
said notice.
b. Tenant, on its own behalf and on behalf of all persons
claiming through or under Tenant, including all creditors, does further hereby
waive any and all rights which Tenant and all such persons might otherwise have
under any present or future law to redeem the Premises, or to re-enter or
repossess the Premises, or to restore the operation of this Lease following an
Event of Default and, after (i) Tenant shall have been dispossessed by a
judgment or by warrant of any court or judge, or (ii) any re-entry by Landlord,
or (iii) any expiration or termination of this Lease and the Term, whether such
dispossess, re-entry, expiration or termination shall be by operation of law or
pursuant to the provisions of this Lease. The words "re-enter", "re-entry" and
"re-entered" as used in this Lease shall not be deemed to be restricted to their
technical legal meanings. In the event of a breach or threatened breach by
Tenant, or any persons claiming through or under Tenant, of any term, covenant
or condition of this Lease on Tenant's part to be observed or performed,
Landlord shall have the right to enjoin such breach and the right to invoke any
other remedy allowed by law or in equity as if re-entry, summary proceedings and
other special remedies were not provided in this Lease for such breach.
c.i. If this Lease is terminated by Landlord upon an Event of
Default, Tenant shall remain liable to Landlord for damages in an amount equal
to the Base Rent and any other sums due hereunder ("Additional Rent") as of the
date of termination of this Lease plus the Base Rent and any Additional Rent
which would have been owing by Tenant for the balance of the Term (collectively,
the "Aggregate Gross Rent") had this Lease not been terminated, less the net
proceeds, if any, received as a result of any reletting of the Premises by
Landlord subsequent to such termination, after deducting all of Landlord's
expenses including, without limitation, all repossession costs, brokerage
commissions, legal expenses, attorneys' fees, expenses of employees, alteration
and repair costs and expenses of preparation for such reletting (collectively,
the "Reletting Costs"). Landlord shall be entitled to collect Base Rent, any
Additional Rent and all other damages from Tenant monthly on the days on which
Base Rent and any Additional Rent would have been payable hereunder if this
Lease had not been terminated. Alternatively, at the option of Landlord, in the
event this Lease is so terminated, Landlord shall be entitled to recover
forthwith against Tenant, as liquidated damages and not as a penalty, the then
present value of the Aggregate Gross Rent and Reletting Costs less the aggregate
rental value of the Premises for what otherwise would have been the unexpired
balance of the Term. If Landlord relets the Premises, the amount of rent and
other sums payable by the tenant thereunder shall be deemed prima facie to be
the rental value for the Premises (or the portion thereof so relet) for the term
of such reletting. Tenant shall in no event be entitled to any rents collected
or payable in respect of any reletting, whether or not such rents shall exceed
the Base Rent and any Additional Rent reserved in this Lease. Tenant shall bear
the burden of proof in any proceeding to determine the "rental value" for
purposes of the above calculation.
ii. If Landlord does not elect to terminate this Lease, but
takes possession, Tenant shall pay to Landlord the Base Rent, Additional Rent
and Reletting
Costs which would be payable hereunder if such repossession had not occurred,
less the proceeds received by Landlord, if any, of any reletting of the Premises
by Landlord. Tenant shall pay Base Rent and all Additional Rent due to Landlord,
monthly, on the days on which Base Rent would have been payable hereunder if
possession had not been retaken.
d.i. This Lease shall continue in effect for so long as
Landlord does not expressly terminate it, and Landlord may enforce all its
rights and remedies under this Lease, including the right to recover the Base
Rent and any Additional Rent, as the same become due under this Lease. Acts of
maintenance or preservation or efforts to relet the Premises or the appointment
of a receiver upon the initiative of Landlord to protect Landlord's interest
under this Lease shall not constitute a termination of Tenant's rights to
possession unless Landlord shall have specifically elected to terminate this
Lease.
ii. No payments of money by Tenant to Landlord after the
expiration or other termination of this Lease after the giving of any notice by
Landlord to Tenant shall reinstate or extend the Term, or make ineffective any
notice given to Tenant prior to the payment of such money. Landlord may receive
and collect any sums due under this Lease, and the payment thereof shall not
make ineffective any notice, or in any manner affect any pending suit or any
judgment theretofore obtained.
e. Upon the occurrence of an Event of Default all rights of
and/or option of first offer, refusal, purchase, expansion or extension granted
to Tenant pursuant to Sections 27-30 shall terminate and Tenant shall execute a
Quit Claim Deed of the Premises to Landlord transferring any and all of Tenant's
right, title, and interest in and to the Premises.
18.3 Default by Landlord.
a. Before Commencement Date. If Landlord fails to
Substantially Complete the Improvements within forty-five (45) days of August
15, 1996, plus any Tenant Delays or Force Majeure days, then Tenant's sole
remedy shall be to exercise the Purchase Option set forth in Section 27 except
that the Landlord's Work Costs shall only include those costs incurred or
committed to by Landlord as of the date that Tenant elects to exercise its
rights under this Section 18.3(a) except that incurred costs, to the extent
evidenced by mechanics liens, should be withheld for payment to lien claimants
directly. Upon Tenant's election to purchase the Premises in addition to
Landlord's transfer of all its right, title and interest in and to the Premises,
Landlord shall assign to Tenant all of its rights in any contracts related to
the construction or completion of the Improvements.
b. After Commencement Date. Landlord shall not be in default
after Commencement Date unless Landlord fails to perform its obligations within
a reasonable time, but in no event later than thirty (30) days after written
notice by Tenant to Landlord; provided that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for performance,
then Landlord shall not be in default if Landlord commences performance within
such 30-day period and thereafter diligently prosecutes the same to completion
provided further, and notwithstanding the foregoing, if Landlord's failure
materially interferes with Tenant's ability to conduct its business operations
in the Premises
or poses a material threat of injury to persons or damage to property, Landlord
shall be in default unless it commences to cure promptly following notice of
such fact and diligently prosecutes such cure to completion. If Landlord fails
to perform its obligations pursuant to the warranties set forth in Section 3.5
according to the previous sentence, then Tenant may take such action as
reasonably necessary to correct any defect covered by Landlord's warranties and
Landlord shall pay Tenant the reasonable costs incurred by Tenant in performing
such corrections within thirty (30) days of Tenant's invoice to Landlord. In any
event Tenant shall give Landlord notice of its intention to exercise its rights
to correct such defects prior to commencement of corrective action. In no event
shall Tenant have the right to terminate this Lease as a result of Landlord's
default and Tenant's remedies shall be limited to damages and/or injunction
except in the event that Landlord is dispossessed of title to the Premises and
Tenant's possession of the Premises is terminated notwithstanding that Tenant is
not in default under this Lease.
c. Failure to Pay Secured Lender. Any borrowings by Landlord
secured by the Premises shall provide Tenant with concurrent notice of and the
right to cure any monetary default by Landlord under the loan provided Landlord
is not currently contesting the alleged default and Tenant is not otherwise in
default under this Lease. Tenant shall be entitled to an offset against the next
Rent due to the extent of the amount paid by Tenant to Landlord's lender to cure
Landlord's loan.
18.4 Cumulative Remedies. Suit or suits for the recovery of the Rent
and other amounts and damages may be brought by Landlord, from time to time, at
Landlord's election, and nothing in this Lease shall be deemed to require
Landlord to await the date when this Lease or its Term would have expired by
limitation had there been no default by Tenant, or no termination, as the case
may be. Each right and remedy provided for Landlord or Tenant in this Lease
shall be cumulative and shall be in addition to every other right or remedy
provided for in this Lease or now or hereafter existing at law or in equity or
by statute or otherwise including but not limited to suits for injunctive relief
and specific performance. The exercise or beginning of the exercise by Landlord
or Tenant of any one or more of the rights or remedies provided for in this
Lease or now or hereafter existing at law or in equity or by statute or
otherwise shall not preclude the simultaneous or later exercise by Landlord or
Tenant of any or all other rights or remedies. All such rights and remedies
shall be considered cumulative and non-exclusive. All costs incurred by Landlord
in connection with collecting any Rent or other amounts and damages owing by
Tenant pursuant to the provisions of this Lease, or to enforce any provision of
this Lease, including reasonable attorneys' fees from the date such matter is
turned over to an attorney, whether or not one or more actions are commenced by
Landlord, shall also be paid by Tenant to Landlord. All costs incurred by Tenant
to collect any amounts owing from Landlord to Tenant or to enforce any provision
of this Lease, including reasonable attorneys fees from the date such matter is
turned over to an attorney, whether or not one or more actions are commenced by
Tenant, shall be paid by Landlord to Tenant.
18.5 No Waiver. No failure by Landlord or Tenant to insist upon the
strict performance of any agreement, term, covenant or condition of this Lease
or to exercise any right or remedy consequent upon a breach, and no acceptance
of full or partial payment of Rent by Landlord during the continuance of any
breach, shall constitute a waiver of any
breach or of the agreement to be performed or complied with by Tenant or
Landlord , and no breach shall be waived, altered or modified except by written
instrument executed by Landlord or Tenant. No waiver of any breach shall affect
or alter this Lease, but each and every agreement, term, covenant and condition
shall continue in full force and effect with respect to any other then existing
or subsequent breach. Notwithstanding any termination of this Lease, the same
shall continue in force and effect as to any provisions which require observance
or performance by Landlord or Tenant subsequent to such termination.
18.6 Bankruptcy.
a. Nothing contained in this Section 18 shall limit or
prejudice the right of Landlord to prove and obtain as liquidated damages in any
bankruptcy, insolvency, receivership, reorganization or dissolution proceeding,
an amount equal to the maximum allowed by any statute or rule of law governing
such a proceeding and in effect at the time when such damages are to be proved,
whether or not the amount is greater, equal to or less than the amounts
recoverable, either as damages or Rent, referred to in any of the preceding
provisions of this Section.
b. Landlord and Tenant understand that, notwithstanding
certain provisions to the contrary contained herein, a trustee or debtor in
possession under the Code may have certain rights to assume or assign this
Lease. Landlord and Tenant further understand that, in any event, Landlord is
entitled under the Bankruptcy Code to adequate assurances of future performance
of the terms and provisions of this Lease. The parties hereto agree that, with
respect to any such assumption or assignment, the term "adequate assurance"
shall include at least the following:
i. In order to assure Landlord that the proposed assignee will have
the resources with which to pay all Base Rent and any Additional Rent payable
pursuant to the terms hereof, any proposed assignee must have, as demonstrated
to Landlord's satisfaction, a net worth (as defined in accordance with generally
accepted accounting principles consistently applied) of not less than the net
worth of Tenant on the date this Lease became effective, increased by seven
percent (7%), compounded annually, for each year from the Commencement Date
through the date of the proposed assignment. The financial condition and
resources of Tenant were a material inducement to Landlord in entering into this
Lease.
ii. Any proposed assignee must have been engaged in the conduct
of business for the five (5) years prior to any such proposed assignment, which
business does not violate the Permitted Uses, and such proposed assignee shall
continue to engage in the Permitted Uses. Landlord's asset will be substantially
impaired if the trustee in bankruptcy or any assignee of this Lease makes any
use of the Premises other than the Permitted Uses.
iii. Any proposed assignee of this Lease must assume and agree to
be personally bound by the terms, covenants and provisions of this Lease.
SECTION 19
PERSONAL PROPERTY TAXES
During the Term hereof, Tenant shall pay, prior to delinquency, all
business and other taxes, charges, notes, duties and assessments levied, and
rates or fees imposed, charged, or assessed against or in respect of Tenant's
occupancy of the Leased Premises or in respect of the personal property, trade
fixtures, furnishings, equipment, and all other personal property of Tenant
contained in the Premises, and shall hold Landlord harmless from and against all
payment of such taxes, charges, notes, duties, assessments, rates, and fees, and
against all loss, costs, charges, penalties, interest, and expenses (including
reasonable attorneys' fees) occasioned by or arising from any and all such
taxes, charges, notes, duties, assessments, rates, and fees, and any and all
taxes.
SECTION 20
EMINENT DOMAIN
20.1 Condemnation. If the Premises, or a substantial part thereof, the
absence of which materially prevents Tenant's use of the Improvements, shall be
lawfully taken or condemned (or conveyed under threat of such taking or
condemnation) for any public or quasi-public use or purpose, this Lease shall
terminate in its entirety upon, and not before, the date of the taking of
possession by the condemning authority. If any part of the Premises which does
not materially prevent Tenant's use of the Premises shall be so taken or
condemned (or conveyed under threat of such taking or condemnation), this Lease
shall not terminate, but shall continue in full force and effect as to the
balance of the Premises then remaining, without abatement or reduction of Rent
except to the extent the floor area of the Improvements is reduced. Tenant shall
make such repairs and reconstruction as is necessary to return the Premises, as
nearly as possible, to their condition prior to the taking or conveyance, such
that Tenant may continue to use the Premises.
20.2 Award. The award, in respect of the condemnation of the
Property, shall be allocated and disbursed as follows:
a. There shall first be allocated from the award the then fair
market value of the Improvements. Landlord shall be entitled to an amount equal
to the appraised fair market value of the Improvements paid for as Landlord's
Work Costs pursuant to the provisions of Section 3 or Landlord's Work Costs
("Landlord's Share"), and the fair market value of the Improvements paid for as
Tenant's Work Costs shall be allocated to Tenant ("Tenant's Share"). From
Landlord's Share there shall be paid to Landlord's lender holding the lien of a
deed of trust in the Premises such amount as is necessary to pay and discharge
such indebtedness secured thereby, and any balance shall be paid to Landlord. In
the event that Landlord's Share is insufficient to pay and discharge such
indebtedness, there shall be disbursed to such lender from Tenant's Share so
much thereof as may be necessary for such purpose (but not in excess of the
maximum amount of Landlord's indebtedness permitted in Section 33).
b. Tenant shall have no further right or interest in the
balance of the award, except that Tenant shall be entitled to so much of the
award as represents severance damages for purposes of reimbursement to Tenant
for any repair and restoration expenses incurred by Tenant pursuant to Section
20.2 above.
20.3 General. Except as otherwise set forth in Section 20.2 above, no
money or other consideration shall be payable by Landlord to Tenant for the
termination and, except as set forth above, Tenant shall have no right to share
in any condemnation award, or in any judgment for damages, or in any proceeds of
any sale made under any threat of condemnation or taking. Nothing in this
Section shall prevent Tenant from making and pursuing a separate claim against
the condemning authority in its own right, including a claim for the value of
its personal property, equipment and fixtures, and relocation expenses, provided
that such award does not diminish Landlord's award.
SECTION 21
SUBORDINATION TO MORTGAGES AND DEEDS OF TRUST
21.1 Lease Subordinate to Mortgages.
a. This Lease and the rights of Tenant shall be and are hereby
made subject and subordinate to the lien of any mortgages, deeds of trust,
assignments of rents, and security interests now or hereafter existing against
the Premises, and to all renewals, modifications, consolidations, replacements
and extensions thereof and to all advances made now or in the future provided
that so long as Tenant duly performs its obligations under this Lease, its quiet
possession, use and enjoyment shall not be disturbed by the foreclosure or
execution of any mortgages, deeds of trust or other grants of security or deed
in lieu of foreclosure. Although the subordination shall be self-operating,
Tenant, or its successors in interest, shall upon Landlord's request, execute
and deliver any and all instruments reasonably desired by Landlord,
subordinating, in the manner reasonably requested by Landlord, this Lease to any
mortgage or deed of trust; provided that such mortgage or deed of trust holder
concurrently executes and delivers to Tenant a reasonably and customary
non-disturbance agreement. If Tenant unreasonably fails to execute such
instruments within fifteen (15) business days of Landlord's delivery of such
instruments to Tenant, then Tenant shall be deemed to be in default pursuant to
this Lease and shall not be entitled to any opportunity to cure such default
which may be provided for elsewhere in this Lease. If any mortgagee or trustee
shall elect to have this Lease and any options granted hereby prior to the lien
of its mortgage or deed of trust, and shall give written notice thereof to
Tenant, this Lease shall be deemed prior to such mortgage or deed of trust,
whether this Lease is dated prior or subsequent to the date of said mortgage or
deed of trust or the date of recording thereof.
b. Should any mortgage or deed of trust affecting the
Improvements, the Property or both be foreclosed, then: (i) the liability
of the mortgagee, beneficiary or purchaser at the foreclosure sale to Tenant
shall exist only so long as the mortgagee beneficiary, or purchaser is the owner
of the Improvements and/or Property and the liability
shall not continue or survive after further transfer of ownership; and (ii)
Tenant shall be deemed to have attorned, as Tenant under this Lease, to the
purchaser at any foreclosure sale and this Lease shall continue in force and
effect as a direct lease between and binding upon Tenant and the purchaser at
any foreclosure sale. As used in this Section 21, "mortgagee" and "beneficiary"
shall include successors and assigns of any such party, whether immediate or
remote, the purchaser of any mortgage or deed of trust, whether at foreclosure
or otherwise, and the successors, assigns and mortgagees and beneficiaries of
such purchaser, whether immediate or remote.
21.2 Tenant's Notices. In the event of any act or omission by Landlord
under this Lease which would cause Landlord to be in default or give Tenant the
right to terminate this Lease or to claim a partial or total eviction, Tenant
will not exercise any such right until:
a. it has given thirty (30) days written notice (by United
States certified or registered mail, postage prepaid) of such act or omission to
Landlord and to the holder of any mortgage or deed of trust on the Property
(whose names and addresses Landlord agrees will be furnished to Tenant on
request) with a copy to Xxxxx Xxxxxxxx, 0000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxxxxx 00000, or such other person as Landlord may designate, in writing, from
time to time; and
b. any holder of any mortgage or deed of trust on the Property
shall, following the giving of such notice, have failed with reasonable
diligence to commence and to pursue reasonable action to remedy the act or
omission within sixty (60) days of such notice.
SECTION 22
WAIVER
There shall be no waiver by Landlord or Tenant of any rights granted
pursuant to this Lease unless done so in writing, signed by an authorized
representative of Landlord. The waiver by Landlord or Tenant of any breach of
any term, covenant, or condition in this Lease shall not be deemed to be a
waiver of the term, covenant, or condition, or any subsequent breach of the same
or any other term, covenant, or conditions. The acceptance of Rent hereunder
shall not be construed to be a waiver of any breach by Tenant of any term,
covenant, or condition of this Lease, it being understood and agreed that the
remedies given to Landlord shall be cumulative, and the exercise of any one
remedy by Landlord shall not be to the exclusion of any other remedy.
SECTION 23
SALE BY LANDLORD
In the event of a sale or conveyance or transfer by Landlord of its
interest in the Premises, and/or in this Lease, each such Transferee shall be
required to assume the obligations of Landlord hereunder, and such transfer
shall then operate to release Landlord from any future liability upon any of the
covenants or conditions, expressed or implied, contained in favor of Tenant, and
in that event Tenant agrees to look solely to the responsibility of the
successor in interest of Landlord in and to this Lease provided that, in any
event, Landlord shall not be relieved of (i) obligations of Landlord the due
date of performance of which arose prior to the date of disposition by Landlord,
(ii) warranties of Landlord contained in Section 3.5 of this Lease, and (iii)
indemnities of Landlord contained in this Lease with respect to causes of action
which arise prior to the date of disposition by Landlord. This Lease shall not
be affected by any such conveyance or transfer, and Tenant agrees to attorn to
such to such purchaser or transferee.
SECTION 24
RIGHT OF LANDLORD TO PERFORM
All covenants and agreements to be performed by Tenant under any of the
terms of this Lease shall be performed by Tenant at Tenant's sole cost and
expense, and without any abatement of Rent. If Tenant shall fail to pay any sum
of money, other than Base Rent, required to be paid by it, or shall fail to
perform any other act on its part to be performed, and the failure shall
continue for thirty (30) days after written notice by Landlord, Landlord may,
but shall not be obligated to do so, and without waiving or releasing Tenant
from any obligations of Tenant, make any payment or perform any other act on
Tenant's part to be made or performed as provided for in this Lease.
Notwithstanding anything else in this Lease to the contrary, upon any failure by
Tenant to perform any of its obligations under this Lease, the failure of which
threatens bodily injury, property damage or a violation of any law, statute,
ordinance or regulation, Landlord may, but shall not be obligated to, take any
reasonable action or make any payment to remedy or alleviate the situation. In
any such event, notice of the situation shall be given to Tenant as soon as
possible, but not later than within 24 hours of Landlord's commencement of the
remediation. All sums so paid by Landlord and all necessary incidental costs,
plus a ten percent (10%) administrative charge, shall be payable to Landlord
within thirty (30) days of Landlord's request, and Tenant covenants to pay any
such sums, and Landlord shall have (in addition to any other right or remedy of
Landlord) the same rights and remedies in the event of the non-payment thereof
by Tenant, as in the case of default by Tenant in the payment of Rent.
SECTION 25
ATTORNEYS' FEES
If any dispute arises between the parties to this Lease, then either
party may submit the dispute to binding arbitration if the other party so
consents. If any party breaches this Lease, the other party shall be entitled to
collect its reasonable attorneys' fees, arbitration fees, court costs, expert
witness fees, and other incidental expenses from the breaching party incurred to
enforce this Lease whether or not a suit has been commenced, all in addition to
any other remedies or damages that may be available.
SECTION 26
ESTOPPEL CERTIFICATE
26.1 Tenant Estoppel. Tenant shall, upon the Commencement Date and at
any time and from time to time thereafter, upon not less than ten (10) business
days' prior written notice from Landlord, execute, acknowledge, and deliver to
Landlord a statement in writing certifying that Tenant is in possession of the
Premises, subject to no protest or reservation of rights, that this Lease is
unmodified and in full force and effect (or if modified, stating the nature of
such modification and certifying that this lease, as so modified, is in full
force and effect) and the dates to which the Rent and other charges are paid,
and acknowledging that Tenant is paying Rent on a current basis with no offsets
or claims, and there are not, to Tenant's knowledge, any uncured defaults on the
part of Landlord hereunder (or specifying the defaults, if any are claimed), and
addressing such other matters as reasonably requested by Landlord or the holder
of a mortgage. It is expressly understood and agreed that any such statement may
be relied upon by any prospective purchaser or encumbrancer of all or any
portion of the Premises or by any other person to whom it is delivered. Tenant's
failure to deliver the statement within the required time shall be conclusive
upon Tenant that this Lease is in full force and effect, without modification
except as may be represented by Landlord, that there are no uncured defaults in
Landlord's performance, that not more than two (2) months' rental has been paid
in advance and that Tenant is in possession subject to no protest or reservation
of rights.
26.2 Landlord Estoppel. Landlord shall, from time to time, upon not
less than ten (10) business days prior written notice from Tenant, execute
acknowledge, and deliver to Tenant a statement, in writing, certifying that
Landlord is in title to the Premises, that this Lease is unmodified and in full
force and effect (or if modified, stating the nature of such modification and
certifying that this lease, as so modified, is in full force and effect) and the
dates to which the Rent and other charges are paid, and acknowledging that
Tenant is paying Rent on a current basis with no offsets or claims, and there
are not, to Landlord's actual knowledge, without obligation to inspect the
Premises, any uncured defaults on the part of Tenant hereunder (or specifying
the defaults, if any are claimed).
SECTION 27
PURCHASE OPTION
27.1 Price. Landlord hereby grants Tenant the one time exclusive option
("Purchase Option") to purchase the Premises (except in case of default by
Landlord and exercise pursuant to Section 3.3(b) and except as provided in
Section 18.3(a)). The purchase price shall equal Landlord's Work Costs plus the
Transfer Costs. Landlord's Work Costs shall be equal to all costs incurred by
Landlord in development, financing, and construction of the project the general
categories of which are more specifically set forth on Schedule II and which
shall include, but not be limited to, all costs approved by Tenant. Transfer
Costs shall equal all costs incurred by Landlord to sell the Premises to Tenant
including, but not limited to, financing penalties, prepayment penalties,
permanent loan fees, commitment fees (including the $318,000 set forth as item
F.2. on Schedule II to the extent not included in Landlord's Work Costs),
closing costs, title insurance premiums, attorneys fees, and each and every
other cost incurred by Landlord plus $50,000 to cover Landlord's non-itemized
internal costs. If Tenant elects the purchase option, the Premises shall be sold
on an "AS-IS", "WHERE-IS" basis and Landlord shall make no representations or
warranties of any nature except to convey title to Tenant in fee simple absolute
subject to all exceptions shown on the title insurance commitment as of the time
Landlord purchased the Premises plus any other title matters consented to by
Tenant. Tenant shall indemnify and hold Landlord harmless from any Environmental
Claims except those directly caused by Landlord during its construction
activities. In order to exercise this option Tenant shall give Landlord notice
on or before March 31, 1996 ("Exercise Notice"). The Closing Date shall occur
within thirty (30) days after the Commencement Date or at such other time agreed
to by Landlord and Tenant. Within fifteen (15) days of Landlord's receipt of the
Exercise Notice, Landlord shall prepare the necessary contract for sale of the
property which shall be executed by Tenant within thirty (30) days of the
Exercise Notice. The contract shall be a specific performance contract and
Tenant's title policy shall be evidenced by an ALTA owners form policy of title
insurance in favor of Tenant in the amount of the purchase price. If Tenant
fails to close by reason of Tenant's default, this Purchase Option shall
terminate, Tenant shall be deemed to be in default under this Lease, and
Landlord may elect to pursue specific performance, damages or other remedies
under this Lease, or continue the Lease without any rights of first offer,
refusal, extension or expansion.
SECTION 28
EXPANSION OPTION
At Tenant's request, Landlord will use its best efforts to expand the
Premises to include up to an additional 100,000 square feet of leasable space
("Phase II Premises") provided that Tenant has not defaulted under the terms of
this Lease and Tenant's financial strength and credit ratings are at least as
strong as they are upon the execution of this Lease. Landlord shall not be
obligated to spend more than $8,000,000 for Landlord's Work Costs to construct
the Phase II Premises. Tenant shall pay all construction costs in excess of
$8,000,000 plus all financing costs and prepayment penalties related to
refinancing the
Premises to provide for the Phase II Premises. Prior to the commencement of the
construction of the Phase II Premises Tenant shall execute a modification of
this Lease which shall provide as follows:
The term of this Lease shall be extended to fifteen (15) years from the
Substantial Completion of the Phase II Premises with the Base Rent for
the existing Premises ("Phase I Premises") to remain as provided for in
this Lease except that the escalators provided for in Section 4.1 shall
continue through the end of the revised term. The Base Rent for the
Phase II Premises shall equal the product of Landlord's Work Costs for
the Phase II Premises multiplied by the Rent Constant Factor. The Rent
Constant Factor shall be determined using a 15 year amortization period
and the Debt Constant. The Debt Constant shall equal the lowest
commercially available rate which Landlord can obtain. FOR EXAMPLE, IF
THE DEBT CONSTANT IS 8.5% AND THE AMORTIZATION PERIOD IS 15 YEARS THEN
THE RENT CONSTANT FACTOR EQUALS 11.8169. IF THE LANDLORD'S WORK COST OF
THE PHASE II PREMISES IS 8,000,000 THEN THE BASE RENT FOR THE PHASE II
PREMISES PER YEAR SHALL EQUAL $945,352 ($8,000,000 X .118169) PLUS
ESCALATORS EVERY 30 MONTHS AS PROVIDED FOR IN SECTION 4.1.
Landlord shall not build on the Premises for the benefit of anyone other than
Tenant. If, for any reason Landlord fails to perform its obligation to expand
the Premises with reasonable diligence, then Tenant's sole remedy shall be to
perform the construction at Tenant's own expense. In such event Tenant may
extend the Lease Term for up to an additional fifteen (15) years from the date
of Substantial Completion thereof and at no increase in Base Rent on account of
such expansion. Notwithstanding the above, if Tenant assigns this Lease after
the fifth anniversary, Landlord may elect in its sole discretion not to provide
funding for the expansion.
SECTION 29
RIGHT OF FIRST OFFER
If Landlord desires to offer the Premises for sale after expiration or
termination of the Purchase Option set forth in Section 27 and provided that the
right granted in this Section has not otherwise been terminated and that Tenant
is not in default under this Lease, then Landlord shall first offer the Premises
for sale to Tenant ("Sale Notice") for an amount equal to the price that
Landlord is willing to accept for the purchase of the Premises ("Desired Sale
Price"). Upon Tenant's receipt of the Sale Notice Tenant shall have forty-five
(45) days within which to elect to purchase the Premises at the Desired Sale
Price by delivering a written notice to Landlord of its election to do so. If
Tenant delivers a timely written notice of its election to exercise its option
to purchase under this Section 29, then Tenant shall purchase the Premises for
the amount equal to the Desired Sale Price pursuant to the terms set forth in
Section 27.1. If Tenant fails to deliver a timely notice of exercise of its
rights under this Section, then Landlord shall be free to offer the Premises for
sale and accept any offer that is equal to or greater than 90% of the Desired
Sale Price at any time within one (1) year of the Sale Notice. If Landlord
desires to accept a sale price less than
90% of the Desired Sale Price, then Landlord shall be obligated to re-offer the
Premises for sale to Tenant pursuant to the terms of this Section 29.
Notwithstanding the above, if Tenant does not exercise its right to purchase set
forth in Section 27 then Landlord may sell the Premises during the 12-months
following the Commencement Date without compliance with this Section.
SECTION 30
OPTIONS TO EXTEND
Provided that Tenant is not in default under this Lease and provided
that the right granted in this Section has not otherwise been terminated, Tenant
shall be entitled to two successive extension options, each option to have a
duration of five years ("Option to Extend"). If Tenant desires to exercise an
Option to Extend, Tenant shall give notice to Landlord at least one (1) year
prior to the end of the Lease Term in the case of the first Option to Extend and
one (1) year prior to the expiration of the first Option to Extend term in the
case of the second Option to Extend. If Tenant exercises an Option to Extend,
the Lease Term shall be extended by an additional five (5) years and all of the
terms and provisions of the Lease shall remain the same including that Base Rent
shall continue to escalate pursuant to Section 4.1. Except for elimination of
the Option to Extend exercised, all terms of the Lease shall remain in full
force and effect during the Option to Extend term.
SECTION 31
MISCELLANEOUS PROVISIONS
31.1 Authority of Tenant. If Tenant is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants that
he is duly authorized to execute and deliver this Lease on behalf of said
corporation in accordance with a duly adopted resolution of the Board of
Directors or the By-Laws of said corporation, and that this Lease is binding
upon said corporation in accordance with its terms. In addition, Tenant shall,
at the time of execution of this Lease, deliver to Landlord a certified copy of
a resolution of the Board of Directors of said corporation authorizing or
ratifying the execution of this Lease or other evidence acceptable to Landlord
authorizing the signatory on behalf of Tenant to execute this Lease and bind
Tenant in accordance with its terms. Landlord represents and warrants that
Xxxxxxxx X. Xxxxx is duly authorized to execute this Lease and bind Landlord in
accordance with its terms. Landlord shall at the time of execution of this Lease
deliver to Tenant a certified copy of Minutes of Action of Landlord authorizing
the execution of this Lease.
31.2 Financial Statements. Tenant shall, when requested by Landlord
from time to time for purposes of delivering to prospective lenders or
buyers, furnish current, published audited financial statements.
31.3 Authorities for Action. Landlord may act through its managing
agent for the Improvements or through any other person who may from time to time
be designated by Landlord in writing. Tenant shall designate in writing one or
more persons to act on its behalf and may from time to time change such
designation by written notice to Landlord. In the absence of any such
designation, the person or persons executing this Lease on behalf of Tenant
shall be deemed to be authorized to act on behalf of Tenant in any matter
provided for herein.
31.4 Entire Agreement.
a. Tenant acknowledges and agrees that it has not relied upon
any statements, representations, agreements or warranties except those expressed
in this Lease, and that this Lease contains the entire agreement of the parties.
No amendment or modification of this Lease shall be binding or valid unless
expressed in writing and executed and delivered by Landlord and Tenant in the
same manner as the execution of this Lease.
b. The submission of this document for examination and review
does not constitute an option, an offer to lease space, or an agreement to lease
space. This document shall have no binding effect on the parties hereto unless
and until executed and delivered by both Landlord and Tenant and will be
effective only upon Landlord's execution and delivery of same.
31.5 Force Majeure. Any obligation of Landlord or Tenant other than the
obligation to pay money which is delayed or not performed due to Acts of God,
strike, riot, shortages of labor or materials, war (whether declared or
undeclared), governmental laws, regulations or restrictions, governmental
action, or lack thereof, or any other causes of any kind whatsoever which are
beyond Landlord's or Tenant's reasonable control, shall not constitute a default
hereunder and shall be performed within a reasonable time after the end of such
cause for delay or nonperformance.
31.6 Severability. If any term or provision of this Lease or the
application thereof to any person or circumstances shall, to any extent, be
illegal, invalid or unenforceable, the remainder of this Lease, or the
application of such term or provision to persons or circumstances other than
those to which it is held invalid or unenforceable, shall not be affected
thereby, and all other terms and provisions of this Lease shall be valid and
enforced to the fullest extent permitted by law.
31.7 No Setoff. This Lease shall be construed as though the covenants
herein between Landlord and Tenant are independent, and Tenant shall not be
entitled to any setoff, offset, abatement or deduction of Rent or other amounts
due Landlord hereunder if Landlord fails to perform its obligations hereunder
except as provided for in Section 18.3(c); provided, however, the foregoing
shall in no way impair the right of Tenant to commence a separate action against
Landlord for any violation by Landlord of the provisions hereof or to which
Tenant has not waived any claim pursuant to the provisions of this Lease so long
as notice is first given to Landlord and any holder of a Mortgage, and a
reasonable opportunity is granted to Landlord and such holder to correct such
violation. In no event shall Landlord, or any holder of a Mortgage be
responsible for any consequential damages
incurred by Tenant, including, without limitation, lost profits or interruption
of business, as a result of any default by Landlord.
31.8 Relationship of Parties. Nothing contained in this Lease shall
create any relationship between the parties hereto other than that of Landlord
and Tenant, and it is acknowledged and agreed that Landlord shall not be deemed
to be a partner of Tenant in the conduct of its business, or a joint venturer or
a member of a joint or common enterprise with Tenant.
31.9 Successors Bound. Except as otherwise specifically provided
herein, the terms, covenants and conditions contained in this Lease shall bind
and inure to the benefit of the respective heirs, successors, executors,
administrators and assigns of each of the parties hereto.
31.10 Interpretation.
a. Whenever in this Lease any words of obligation or duty are
used, such words or expressions shall have the same force and effect as though
made in the form of a covenant.
b. Words of any gender used in this Lease shall be deemed to
include any other gender, and words in the singular shall be deemed to include
the plural, when the context requires.
c. All pronouns and any variances thereof shall be
deemed to refer to the neuter, masculine, feminine, singular or plural,
when the context requires.
d. No remedy or election given pursuant to any provision in
this Lease shall be deemed exclusive unless so indicated, but each shall,
wherever possible, be cumulative with all other remedies at law or in equity as
otherwise specifically provided herein.
e. If and to the extent that, any of the provisions of any
amendment, modification or rider to this Lease conflict or are otherwise
inconsistent with any of the preceding provisions of this Lease, or of the Rules
and Regulations appended to this Lease, whether or not such inconsistency is
expressly noted in such amendment, modification or rider, the provisions of such
amendment, modification or rider shall prevail, or in case of any inconsistency
with the Rules and Regulations, such Rules and Regulations shall be deemed to be
waived with respect to Tenant to the extent of such inconsistency.
f. The parties mutually agree that the headings and captions
contained in this Lease are inserted for convenience of reference only, and are
not to be deemed part of or to be used in construing this Lease.
g. This Lease shall be construed in accordance with the laws
of the state in which the Improvements are located. Unless herein waived,
Landlord and Tenant
acknowledge that all of the applicable statutes of such state are superimposed
on the rights, duties and obligations of Landlord and Tenant hereunder.
h. Except as expressly contained herein, neither Landlord nor
Landlord's agent or attorneys have made representations, warranties or promises
with respect to the Premises or this Lease.
i. Landlord and Tenant each acknowledge and warrant that each
has been represented by independent counsel and has executed this Lease after
being fully advised by said counsel as to its effect and significance. This
Lease is the result of negotiations between the parties and their respective
attorneys and shall be construed in an even and fair manner, regardless of the
party who drafted this Lease, or any provision thereof.
j. In all instances where Tenant is required by the terms and
provisions of this Lease to pay any sum of money or to do any act at a
particular indicated time or within any indicated period, it is understood and
agreed that time is of the essence.
31.11 Easements. Landlord shall have the right to grant any easements
on, over, under and above the Premises for such purposes as Landlord determines
subject to Tenant's consent which shall not be withheld if such easements will
not materially interfere with Tenant's use or quiet enjoyment of the Premises.
31.12 Short Form Lease. Landlord and Tenant agree to execute and
acknowledge a short form lease in recordable form, indicating the names and
addresses of Landlord and Tenant, a description of the Premises, the Term, the
Commencement and Expiration Dates, and options for renewal, right of first
offer, and purchase, but omitting rent and other terms of this Lease. Further,
upon Landlord's request, Tenant agrees to execute and acknowledge a termination
of lease or quit claim deed in recordable form to be held by Landlord until the
Expiration Date or sooner termination of the Term.
31.13 Landlord's Failure to Consent. If Tenant shall request Landlord's
consent hereunder and Landlord shall fail or refuse to give such consent, Tenant
shall not be entitled to any damages for the withholding of its consent, it
being intended that Tenant's sole remedy shall be an action for specific
performance or injunction and that such remedy shall be available only in those
cases where Landlord has expressly agreed in writing not to unreasonably
withhold its consent or where, as a matter of law, Landlord may not unreasonably
withhold its consent.
31.14 Notices. Any and all notices, elections, offers, acceptances and
demands made or required to be made under this Agreement shall be made in
writing, signed by the party giving such notice, election, offer, acceptance or
demand and shall be delivered personally, or sent by registered or certified
mail, or sent by reliable overnight express service to the other parties at
their addresses set forth below or at such other addresses as may be supplied in
writing to the parties from time to time. All notices shall be deemed effective
at the time of personal delivery, one day following delivery to an overnight
express courier service, or on the date set forth on the receipt for registered
or certified mail, as applicable, except that if delivery by U.S Mail or
overnight courier is not successful upon the first
attempt, second notice shall be mailed and shall be deemed effective upon the
date of mailing.
Landlord: Tenant:
QD Investors Quantum Corporation
0000 X. Xxxxxxxx Xxxx, Xxxxx Xxx 000 XxXxxxxx Xxxx.
Xxxx Xxxxxxx, XX 00000 Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
Vice-President Real Estate
Corporate Services
With a Copy To: With a Copy to:
Xxxxx X. Xxxxxxxx Xxxxxx X. Xxxxxxxx
Xxxxx, Xxxxx and Xxxx P.C. Cooley Godward
1660 Lincoln Street, Suite 0000 Xxxx Xxxx Xxxx Xxxxxx,
Xxxxxx, XX 00000 0xx Xxxxx
Xxxx Xxxx, XX 00000-0000
31.15 Real Estate Broker. Landlord hereby agrees to be liable for up to
$400,000 of any broker's, finder's or similar fees or commissions due in
connection with the transaction payable to Cornish & Xxxxx Commercial and
Xxxxxxxxx Xxxx Company ONCOR International Companies. Except as set forth above,
each party represents that no other broker's, finder's or similar fee or
commission are due in connection with the transaction contemplated by this
Agreement and each party hereby agrees to indemnify and hold harmless the other
party from any claim, expense or cost (including attorneys fees whether suit be
brought or not) resulting from any claim for such fee or commission.
31.16 No Merger. The voluntary or other surrender of possession of the
Premises by Tenant, or a mutual cancellation of this Lease, shall not result in
a merger of Landlord's and Tenant's estates, and shall, at the option of
Landlord, either terminate any or all existing subleases or subtenancies, or
operate as an assignment to Landlord of any or all of such subleases or
subtenancies.
31.17 No Light or Air Easement. This Lease does not grant any rights to
light or air over the Premises or the Property to the extent such items are
affected by the acts of owners of property other than the Premises. Any
diminution or shutting off of light or air by any structure which is now or
hereafter erected on the Property or upon property adjacent to the Property
shall not affect this Lease or impose any liability on Landlord.
31.18 Time is of Essence. Time is of the essence with respect to
the obligations to be performed under this Lease.
31.19 Auctions. Tenant shall not conduct, nor permit to be conducted,
either voluntarily or involuntarily, any auction upon the Premises or the Common
Areas without first having obtained Landlord's prior written consent.
Notwithstanding anything to the contrary in this Lease, Landlord shall not be
obligated to exercise any standard of
reasonableness in determining whether to grant such consent. The holding of any
auction on the Premises or Common Areas in violation of this Section shall
constitute a material default of this Lease.
31.20 Security Measures. Tenant hereby acknowledges that Landlord shall
have no obligation whatsoever to provide guard service or other security
measures for the benefit of the Premises or the Improvements. Tenant assumes all
responsibility for the protection of Tenant, its agents, its employees and
invitees and the property of Tenant and of Tenant's agents and invitees from
acts of third parties.
31.21 Successors and Assigns. Subject to the terms and provisions of
Section 23, the covenants and conditions contained in this Lease shall apply to
and bind the respective heirs, successors, executors, administrators, and
assigns of the parties hereto, and the terms "Landlord" and "Tenant" shall
include the successors and assigns of either such party, whether immediate or
remote.
31.22 Quiet Enjoyment. Subject to the terms and conditions of this
Lease, Landlord covenants and agrees that Tenant, upon complying with all of the
obligations of Tenant under this Lease shall peaceably and quietly enjoy the
Premises and Tenant's rights under this Lease during its Term, without hindrance
by Landlord or any persons claiming under Landlord.
SECTION 32
CONTINGENCIES
32.1 Land Purchase and Financing. The terms of this Lease are expressly
conditioned upon:
a. Landlord arranging financing acceptable to Landlord and
Tenant (as to funding by Tenant of Tenant's Work Costs) and in accordance
with the Interim Agreement;
b. The Xxxxxx Company's execution of a construction
contract acceptable to Tenant to construct the Premises.
If the foregoing conditions are not satisfied or waived by September 15,, 1995,
then this Lease and all other obligations and rights set out above shall be void
and of no further effect, subject nevertheless to the provisions of the Interim
Agreement.
SECTION 33
FINANCING LIMIT
Landlord shall not encumber the Premises with indebtedness the
principal amount of which is in excess of Landlord's Financing Limit. During the
first thirty (30) months of the Lease Term, Landlord's Financing Limit shall
equal fifteen million dollars ($15,000,000). At all times thereafter Landlord's
Financing Limit shall equal the appraised fair market value of the Premises
based upon the Rent required to be paid pursuant to this Lease as determined by
an Independent MAI appraiser familiar with real property in the geographic
location of the Premises.
IN WITNESS WHEREOF, Landlord and Tenant have respectively executed this
Lease as of the day and year first above written.
LANDLORD: QD INVESTORS, a Colorado limited liability company
By: /s/ Xxxxxxxx X. Xxxxx
TENANT: QUANTUM CORPORATION, a Delaware corporation
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx, Vice-President, Finance
By: /s/ /Xxxx Xxxxx
Xxxx Xxxxx, Vice President, Real Estate
and Corporate Services
