EXHIBIT 10.4(d)
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THIRD AMENDMENT OF LEASE AGREEMENT
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This THIRD AMENDMENT OF LEASE AGREEMENT is made and entered into this 1st
day of January 1997, by and between LANDMARK ASSOCIATES OF MARYLAND II, a
Maryland limited partnership herein called Landlord, and APPLIED RESEARCH
CORPORATION, A Colorado corporation herein called Tenant.
WITNESSETH:
WHEREAS, Landlord and Tenant heretofore entered into a Lease Agreement
dated October 22, 1993, and subsequent amended said Lease Agreement on October
22, 1993 and May 12, 1994; and Tenant currently occupies approximately 12, 633
rentable square feet on the eleventh (11th) floor (herein called the Premises)
in the building located at 0000 Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx, (herein
called the Building); and
WHEREAS, Landlord and Tenant desire to make certain modifications to said
Lease Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, Landlord and Tenant agree as follows:
1. Effective January 1, 1997, and subject to the terms, covenants and
conditions hereinafter set forth, Landlord and Tenant agree to reduce the
area of the Premises to approximately 11, 295 rentable square feel
substantially as shown on the floor plan attached hereto as Exhibit A.
Tenant certifies that it has vacated approximately 1,338 rentable square
feel of the Premises as shown in Exhibit A (herein called the "Reduction
Premises"). Tenant further agrees that it will allow the Landlord, its
agent or employees, to enter the Reduction Premises at all times to
examine, inspect, or to make such alterations and repairs to the
Reduction Premises as the Landlord may deem necessary, or to exhibit the
same to prospective tenants.
2. Effective March 1, 1997, Paragraph 3 (Rent; Adjustment Rent) of the Lease
Agreement, as previously amended, shall be deleted in its entirely and
replace with the following language:
3. RENT: ADJUSTMENT RENT
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a. Tenant shall pay rent for the Premises during the Term at the rate of
One Hundred Eighty Two Thousand One Hundred Twenty Five and 92/100
Dollars ($182,125.92) per annum (herein called the "Minimum Rent") in
lawful money of the United States, in equal monthly installments of
Fifteen Thousand One Hundred Seventy Seven and 16/100 Dollars
($15,177.16), in advance, on or before the first (lst) day of each and
every month during the Term at the office of Landlord herein designated
(or such other place as Landlord may designate in a notice to Tenant),
without prior demand therefor and without any setoff or deduction
whatsoever. In the event that Tenant fails to pay any installment of
Minimum Rent or additional rental on the first (1st) day of the month in
which such installment is due, or any other sum hereunder within ten (10)
days after accrual thereof or billing therefor, shall be added to such
unpaid amount a late charge of ten percent (10%) of the installment or
amount due in order to compensate Landlord for the extra administrative
expenses thereby incurred. After fifteen (15) days have elapsed from the
date of accrual or billing there shall be added to such unpaid amount a
second late charge of an additional ten (10%) of the installment or
amount due. After twenty (20) days have elapsed from the date of accrual
or billing, the total amount due shall bear interest at the maximum rate
allowable by law. The Minimum Rent for the first calendar month of the
term shall be due and payable at the time of execution and delivery of
this Lease. If the Commencement Date shall occur on a date other than
the first day of any calendar month, Tenant shall pay to Landlord on the
first day of the month next succeeding the month in which the
Commencement Date shall occur an amount equal to the regular monthly
installment of Minimum Rent divided by thirty (30) multiplied by the
number of days int he period from and including the Commencement Date to
and including the last day of the month in which the Commencement Date
shall occur.
b. Commencing with the first calendar year after the Base Year, and for
each subsequent calendar year or portion thereof thereafter during the
Term, Tenant shall pay to Landlord as additional rent (the "Adjustment
Rent") the sum of the following:
i. Tenant's Pro Rata Share (as hereinafter defined) of any increase
in Operating Expenses (as hereinafter defined) between the then Current
Lease year and the Base year; and
ii. A percentage of the annual Minimum Rent set forth in Paragraph
3.a. above, equal to the percentage by which the Consumer Price Index for
All Urban Consumers for All Items for Washington, DC. - Maryland -
Virginia (hereinafter referred to as the "Index:), issued from time to
time by the Federal Bureau of Labor Statistics or any successor agency,
for the last calendar month available prior to the then Current Lease
Year in question exceeds the Index for the last calendar month available
prior to the month in which the Commencement Date falls.
In the event that the Index is substantially modified or is no longer
published, Landlord hereby agrees to substitute a comparable index
thereto. In the event that Tenant does not agree to the comparable
substitute, the matter will be determined by arbitration in accordance
with the rules of the American Arbitration Association, at the expense of
Tenant.
Notwithstanding the foregoing, Landlord may alternatively elect that the
amount of the increase in Operating Expenses shall be determined by
multiplying (A) the amount by which the Operating Expenses in the Current
Lease Year divided by the average number of square feet of rented space
in the Building during said year exceed the Operating Expenses in the
Base Year divided by the average number of square feet of rented space in
the Building during said year, time (B) the average number of square feet
of rented space in the Building during the Current Lease Year, and in
that event, Tenant shall be required to pay Tenant's Pro Rata Share
thereof as the sum due under Paragraph 3.b.i, above.
If the Expiration Date of this Lease shall occur on a date other than the
last day of a calendar year, then Tenant share of Adjustment Rent for the
calendar year in which the Expiration Date falls shall be determined by
multiplying the Adjustment Rent for the calendar year in which the
Expiration Date falls (calculated as if the Expiration Date were the last
day of such lease year) by a fraction, the numerator of which is the
number of days from and including the first day of such calendar year to
and including the Expiration Date, and the denominator of which is 365.
For purposes of the foregoing, the following terms shall have the
following meanings:
(1) The term "Base Year" shall mean the twelve calendar months
ending December 31, 1997.
(2) The term "Current Lease Year" shall mean each calendar year or
part thereof during the Term after the Base Year.
(3) The "Tenant's Pro Rata Share" shall be six and 18/100 percent
(6.18%).
(4) Operating Expenses, as that term is used herein, shall consist
of only the expenses described below as they relate to the Building and
other appurtenant structures and facilities (collectively, the
"Property"), all of which shall be computed on an accrual basis:
(a) All costs associated with janitorial services. Said
services shall consist of (I) nightly cleaning services throughout the
Property, including, but not limited to, the Premises and other office
suited, restroom (common area and private), common areas such as
corridors, stairwell, and lobbies, (ii) periodic cleaning services
including, but not limited to, stripping and waxing common area floors,
machine scrubbing restroom (common area and private) floors, stripping
and waxing vinyl composition floors in the common areas and in the office
suites. In addition to the cost of janitorial services, the cost of all
supplies necessary to perform the above slated services, and the cost of
all paper products used to stock towel dispensers, toilet paper
dispensers, etc., on an as needed basis, throughout the Building, shall
also be considered to be included in this category of Operating Expense.
(b) All costs associated with electrical, water, wastewater,
and natural gas service, (herein referred to as Utilities") for the
Property. These utilities shall provide electrical current for such
things as heating, lighting, air conditioning, office equipment, etc.;
water to office suites, restrooms, lawn irrigation systems, etc.;
wastewater service for office suites and restrooms; and drainage from the
Property. In addition to the cost for the utilities, all other charges
whether federal, state, county or municipal, of other entity, whether
such costs presently exist or are subsequently added, which are included
as part of the invoices for the utilities listed herein. Landlord and
Tenant agree that the income received from the Tenant, and/or other
tenants of the Building, for after-hours use of the heating and cooling
systems shall be credited against the total cost of utilities for the
Property.
(c) All taxes (including, but not limited to, real estate
taxes), assessments and governmental charges whether federal, state,
county or municipal and whether they be by taxing districts or
authorities presently taxing the Property or by other subsequently
created or otherwise, and any other taxes and assessments attributable to
the Property or its operation. Taxes for the Base year and any calendar
year shall be deemed to be the taxes payable in the Base Year or calendar
year in question, even though the levy or assessment may be for a
different fiscal year. In the event Landlord elects to contest, or
review to determine if it should contest, the costs (actual and/or
proposed) associated with taxes, assessments and/or governmental charges
for the Property as defined above, all costs related to such dispute(s),
including, but not limited to, consultants, attorneys, other
representatives, and related charges, shall be included in this category
of Operating Expenses.
c. Increases in each category of Operating Expenses described in
Paragraph 3.b above shall be calculated separately (i.e., the categories
of Operating Expenses described in subparagraphs (4)(a), (4)(b) and
(4)(c) of Paragraph 3.b shall be computed independently of each other,
and not on an aggregate basis).
d. For each calendar year during the term of this lease following the
Base Year, Tenant shall pay to Landlord on account of Adjustment Rent for
any calendar year on the first day of each month during such calendar
year an amount equal to one-twelfth (1/12) of Landlord's estimate of
Tenant's Adjustment Rent for such calendar year. After the end of any
such calendar year and the delivery of Tenant's Adjustment Rent Statement
(as discussed below), if the amount paid by Tenant during such calendar
year shall exceed the actual amount set forth in said statement, such
excess shall be paid by Landlord to Tenant within thirty (30) days after
Tenant's receipt of the Tenant's Adjustment Rent Statement; if, on the
other hand, the amount shown in Tenant's Adjustment Rent Statement shall
be greater than the aggregate amount paid by Tenant as an estimate on
account of such Adjustment Rent for the calendar year in question, Tenant
shall pay to Landlord, within thirty (30) days after Tenant's receipt of
the Tenant's Adjustment Rent Statement, the difference between the amount
theretofore paid by Tenant and the actual amount of such Adjustment Rent.
e. Following the end of any calendar year, Landlord shall furnish Tenant
with a statement (herein called the "tenant's Adjustment Rent
Statement"), setting forth the amount of Adjustment Rent payable by
Tenant pursuant to Paragraph 3.b., above, by reason of any increase in
any category of Operating Expenses, and any increase attributable to any
increase in the Index. If Tenant does not request the additional
information provided for herein, Tenant shall, within thirty (30) days of
receipt of Tenant's Adjustment Rent Statement, pay the amount of
Adjustment Rent shown thereon. Upon written request from Tenant to
Landlord, Landlord shall provide, within a reasonable time after
Landlord's receipt of Tenant's written request, reasonable supporting
information to substantiate the actual amount of each category of
Operating Expenses for such calendar year. Tenant's written request must
be received by Landlord within thirty (30) days of Tenant's receipt of
Tenant's Adjustment Rent Statement. Upon receipt of such supporting
information, if Tenant disputes any charge(s) shown on the Tenant's
Adjustment Rent Statement, Tenant must advise Landlord of their claim in
writing within thirty (30) days of receipt of the additional supporting
information. If no notice is received by Landlord during this thirty
(30) day time period, all amounts included in the Tenant's Adjustment
Rent Statement shall be deemed acceptable to Tenant, and no further
dispute of the charges may be filed. Notwithstanding the foregoing,
Tenant shall have the right, following written notice to Landlord, as per
above, to audit Landlord's books and records relating to the calculation
of Operating Expenses upon the following terms and conditions: (1) Tenant
may not request such audit more frequently than once per calendar year;
(2) Tenant's written request must specify the category of Operating
Expenses to be audited; (3) such audit must be performed by an accounting
firm approved by Landlord, such approval not to be unreasonable withheld;
(4) such audit must be performed in Landlord's offices in Austin, Texas
for a period of no more than three (3) consecutive business days; and (5)
the cost of such audit shall be the responsibility of Tenant' provided
however, if such audit reveals a discrepancy of five percent (5%) or more
in any category of Operating Expenses which negatively impacts Tenant,
Landlord shall pay the cost of such audit.
3. For the purpose only of calculating the portion of Adjustment Rent stated
in paragraph 3.b.ii. of the Lease, the Commencement Date shall be January
1, 1997.
4. Tenant hereby releases Landlord from any obligation to pay and expressly
waives any claim to the construction allowance stated in paragraph 1 of
the First Amendment of Lease Agreement. The terms of Paragraph 1 of the
First Amendment of Lease Agreement are hereby deleted and shall be
considered null and void.
5. If any of the terms or provisions of the original Lease Agreement or any
subsequent amendments are in conflict with the terms or provisions of
this Amendment, the terms or provision of this Amendment shall prevail.
6. Landlord and Tenant hereby agree and certify that the Lease is in full
force and effect and, except as expressly modified herein, all of the
terms, covenants and conditions of the Lease and the prior Amendments
shall remain in effect and unchanged. Landlord and Tenant further agree
and certify that (a) there exists no default or breach on the part of
either Landlord or Tenant under the Lease, nor has an event occurred
which with the giving of notice, passage of time or both, would
constitute an event of default or breach under the terms of the Lease;
(b) there exists no defenses against the enforcement of any right or
remedy of either party under the Lease, or of any duty or obligation of
Landlord or Tenant thereunder; and (c) both Landlord and Tenant have the
full right, title and authority to execute and enter this Amendment and
have taken all actions and obtained all approvals and consents necessary
on their respective parts to authorize the transactions contemplated by
this Amendment.
TENANT: LANDLORD:
APPLIED RESEARCH CORPORATION LANDMARK ASSOCIATES OF MARYLAND II
/s/ /s/
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S. P. S. Anand, President ____________________, General Partner
