OFFICE LEASE
by and between
AMBER DRIVE II, LLC.
an Delaware limited liability company
(LANDLORD)
and
SOVEREIGN COMPANIES, LLC
a Colorado limited liability company
(TENANT)
ARTICLE 1 DEMISE........................................................1
1.1 Demise...........................................................1
ARTICLE 2 TERM..........................................................1
2.1 Lease Term.......................................................1
2.2 Supplemental Agreement...........................................2
2.3 Landlord's Work..................................................2
ARTICLE 3 RENT..........................................................2
3.1 Base Rent........................................................2
3.2 Additional Rent..................................................3
3.3 Interest on Late Payments and Late Payment Charge................3
ARTICLE 4 TAXES AND OPERATING EXPENSE ADJUSTMENT........................3
4.1 Definitions......................................................3
4.2 Payments of Taxes and Operating Expenses.........................5
4.3 Reimbursement Survives Termination...............................7
ARTICLE 5 BUILDING SERVICES.............................................7
5.1 Standard Services................................................7
5.2 Interruption of Standard Services................................8
5.3 Services Paid by Tenant..........................................9
5.4 Above-Standard Service Requirements..............................9
5.5 Cleaning.........................................................9
5.6 Re-Xxxxxxx.......................................................9
5.7 Landlord's Obligation...........................................10
ARTICLE 6 TENANT REPAIR................................................10
6.1 Damage by Tenant................................................10
6.2 Maintenance.....................................................10
6.3 Good Condition..................................................10
6.4 Surrender.......................................................11
6.5 Broken Glass....................................................11
ARTICLE 7 ASSIGNMENT AND SUBLETTING....................................11
7.1 Limitations.....................................................11
7.2 Acceptance of Performance.......................................12
7.3 Document Review.................................................12
7.4 Affiliated Entities.............................................12
7.5 Transfer Rents..................................................12
ARTICLE 8 TRANSFER BY LANDLORD AND LIMITED LIABILITY...................13
8.1 Transfer of Landlord's Interest.................................13
8.2 Limited Liability of Landlord...................................13
ARTICLE 9 USE OF PREMISES..............................................13
9.1 Use.............................................................13
9.2 Compliance with Rules and Regulations...........................13
ARTICLE 10 INSURANCE....................................................14
10.1 Tenant's Insurance..............................................14
10.2 Landlord's Insurance............................................15
10.3 Subrogation.....................................................15
ARTICLE 11 OBSERVANCE OF LAW............................................16
11.1 Law and Covenants...............................................16
11.2 Taxes...........................................................16
ARTICLE 12 WASTE AND NUISANCE; ENVIRONMENTAL............................16
12.1 Waste and Nuisance..............................................16
12.2 Environmental Covenant..........................................17
12.3 Hazardous Substances............................................17
12.4 Environmental Laws..............................................17
ARTICLE 13 ENTRY BY LANDLORD............................................17
ARTICLE 14 INDEMNIFICATION..............................................18
14.1 Indemnification by Tenant.......................................18
14.2 Indemnification by Landlord.....................................18
ARTICLE 15 ALTERATIONS..................................................19
15.1 Alterations by Tenant...........................................19
15.2 Alterations by Landlord.........................................20
ARTICLE 16 SIGNS AND ADVERTISING........................................20
ARTICLE 17 SUBORDINATION TO MORTGAGES AND DEEDS OF TRUST................21
ARTICLE 18 ESTOPPEL CERTIFICATE/FINANCIAL INFORMATION...................22
18.1 Estoppel Certificate............................................22
18.2 Financial Information...........................................22
ARTICLE 19 QUIET ENJOYMENT..............................................22
ARTICLE 20 FIXTURES.....................................................22
ARTICLE 21 DAMAGE OR DESTRUCTION........................................23
21.1 Casualty........................................................23
21.2 Casualty Caused by Tenant.......................................23
ARTICLE 22 CONDEMNATION.................................................23
22.1 Eminent Domain..................................................23
22.2 Damages.........................................................24
22.3 Restoration.....................................................24
ARTICLE 23 LOSS AND DAMAGE AND DELAY....................................24
23.1 Loss and Damage.................................................24
23.2 Delays..........................................................25
ARTICLE 24 DEFAULT AND REMEDIES.........................................25
24.1 Default by Tenant...............................................25
24.2 Remedies of Landlord............................................26
24.3 Landlord's Default..............................................28
24.4 Personal Property Lien..........................................28
ARTICLE 25 HOLDING OVER.................................................28
ARTICLE 26 NOTICE.......................................................29
26.1 Notice..........................................................29
26.2 Change of Address...............................................29
ARTICLE 27 SECURITY DEPOSIT.............................................29
ARTICLE 28 MISCELLANEOUS PROVISIONS.....................................30
28.1 Captions........................................................30
28.2 Waiver..........................................................30
28.3 Entire Agreement................................................30
28.4 Severability....................................................30
28.5 Modification....................................................30
28.6 Governing Law...................................................30
28.7 Successors and Assigns..........................................30
28.8 Authorization to Execute........................................31
28.9 Approval of Documents...........................................31
28.10 Prime Rate......................................................31
ARTICLE 29 SUBSTITUTION OF PREMISES.....................................31
ARTICLE 30 RECORDING....................................................31
ARTICLE 31 REAL ESTATE BROKER...........................................31
ARTICLE 32 RENT PREPAYMENT..............................................32
ARTICLE 33 OTHER PROVISIONS.............................................32
33.1 Right of First Offer............................................32
33.2 Option to Extend................................................33
33.3 Antenna.........................................................34
33.4 Parking.........................................................35
EXHIBIT A -.FLOOR PLAN
EXHIBIT B -.LEGAL DESCRIPTION
EXHIBIT C -.WORK LETTER
EXHIBIT D -.SUPPLEMENTAL AGREEMENT
EXHIBIT E -.RULES AND REGULATIONS
EXHIBIT F -.ANTENNA LICENSE
EXHIBIT G -.COMPONENTS OF STANDARD TENANT FINISH
EXHIBIT H-..COMPONENTS OF SITE, SHELL AND CORE
EXHIBIT I-..JANITORIAL SPECIFICATIONS
OFFICE LEASE
THIS OFFICE LEASE ("Lease") is made this __28th___ day of February, 2005,
by and between AMBER DRIVE II LLC, a Delaware limited liability company
("Landlord") and SOVEREIGN COMPANIES, LLC, a Colorado limited liability company
("Tenant").
WITNESSETH
ARTICLE 1
DEMISE
------
1.1 Demise. Landlord does hereby lease to Tenant and Tenant hereby leases
from Landlord Suite 900 ("Premises") consisting of approximately 13,730 rentable
square feet ("Rentable Area"), such Premises being generally depicted on the
floor plan attached hereto as Exhibit A and incorporated herein by this
reference, which Premises may be adjusted as set forth herein. The Premises are
situated in that certain building known as 000 Xxxxxxxxxxx Xxxxxxxx located at
000 Xxxxxxxxxxx Xxxxxxxx, Xxxxxxxxxx, Xxxxxxxx ("Building"), which Building is
situated on that certain real Property ("Property") legally described in Exhibit
B attached hereto and incorporated herein by this reference, together with a
non-exclusive right subject to the provisions hereof, to use all appurtenances
thereto, including, but not limited to, any plazas, common areas, walkways or
other areas in the Building or on the Property designated by Landlord from time
to time for the non-exclusive use of the tenants of the Building, all of which
inclusive of the Building are hereinafter collectively called the "Building
Complex".
Such letting and hiring is upon and subject to the terms, conditions and
covenants herein set forth, and Tenant covenants as a material part of the
consideration for this Lease to keep and perform each and all of said terms,
conditions and covenants by it to be kept and performed and that this Lease is
made upon the condition of such performance.
ARTICLE 2
TERM
----
2.1 The term of this Lease and Tenant's obligation to pay rent shall
commence on the later to occur of (a) July 1, 2005 or (b) the date upon which
the Tenant Improvements (defined below) are substantially complete
("Commencement Date") and shall end at 5:00 p.m. on the last day of the one
hundred twentieth (120th) month thereafter, unless sooner terminated as herein
provided ("Lease Term"). Notwithstanding the above, if the work to be performed
to the Premises (the "Tenant Improvements") contemplated by the Space Plan
defined below are not substantially complete on July 1, 2005, due to Landlord
caused delays or Force Majeure Delays, then the Commencement Date and Tenant's
obligation to pay rent shall be extended for a period of time equal to the delay
caused by Landlord and Force Majeure Delay. For purposes of this Lease, "Force
Majeure Delays" means any actual delay in the construction of the Tenant
Improvements contemplated by the Space Plan resulting from events beyond the
reasonable control of Landlord, including but not limited to, delays caused or
contributed to by governmental or quasi-governmental entities, lenders, and acts
of God.
1
2.2 Supplemental Agreement. Within five (5) days after the commencement of
the term of this Lease, Tenant agrees to execute a Supplemental Agreement in the
form attached as Exhibit D and incorporated herein by this reference, setting
forth the commencement and termination dates of the term of this Lease in
accordance with Section 2.1 above and such other information as the parties may
agree to as set forth therein, including the actual Rentable Area of the
Premises, Base Rent and Tenant's Pro Rata Share as defined herein.
2.3 Landlord's Work. Other than as set forth in the Work Letter attached
hereto and incorporated herein as Exhibit C, Landlord shall have no obligation
for the completion or condition of the Premises and Tenant shall accept the
Premises in its "AS-IS" condition as of the date Landlord delivers possession
thereof in accordance with the provisions of the Work Letter, subject to any
Punch List Items as defined in the Work Letter. Landlord shall provide standard
directory and suite signage as part of the Landlord's Work provided for in the
Final Working Drawings.
ARTICLE 3
RENT
----
3.1 Base Rent. Tenant agrees to pay as base annual rent ("Base Rent")
during the Lease Term in amounts set forth in the following schedule:
--------------------------------------------------------------------------------
Base Rent per
Square Foot of Monthly Annual
Period Rentable Area BaseRent BaseRent
--------------------------------------------------------------------------------
Months 1-12 $13.00 $14,874.17 $178,490.04
--------------------------------------------------------------------------------
Months 13-24 $13.39 $15,320.39 $183,844.68
--------------------------------------------------------------------------------
Months 25-36 $13.79 $15,778.06 $189,336.72
--------------------------------------------------------------------------------
Months 37-48 $14.20 $16,247.17 $194,966.04
--------------------------------------------------------------------------------
Months 49-60 $14.63 $16,739.16 $200,869.92
--------------------------------------------------------------------------------
Months 61-72 $15.07 $17,242.59 $206,911.08
--------------------------------------------------------------------------------
Months 73-84 $15.52 $17,757.47 $213,089.64
--------------------------------------------------------------------------------
Months 85-96 $15.99 $18,295.23 $219,542.76
--------------------------------------------------------------------------------
Months 97-108 $16.47 $18,844.43 $226,133.16
--------------------------------------------------------------------------------
Months 109-120 $16.96 $19,405.07 $232,860.84
--------------------------------------------------------------------------------
Base Rent which shall be payable in equal monthly installments without
notice, deduction, set-off or abatement (except as set forth in Articles 21 and
22 hereof this Lease) to Landlord at the address for Landlord set forth in
Article 26 or such other address as Landlord may notify Tenant of in writing, in
lawful money of the United States payable in advance on the first day of each
month. If the Lease Term commences or terminates on a day other than the first
or last day of a calendar month respectively, then the installments of Base Rent
for such month or months shall be prorated based on the actual number of days in
such month and the installments so prorated shall be paid in advance. The term
"Lease Year" shall mean each twelve (12) full month period subsequent to the
first Lease Year. If the Lease Term begins on a date other than the first day of
a month, the first Lease Year shall commence on the Commencement Date and shall
continue until the last day of the twelfth (12th) full month thereafter. Base
Rent for any such partial month shall be prorated for such month and shall be
due and payable on the Commencement Date. Notwithstanding the above-referenced
rental rates, fifty percent (50%) of Tenant's Base Rent and Operating Expenses
for the first year of the Lease Term shall be abated; provided, however, that
Tenant shall commence paying full Rent on the entire Premises on the first day
of the thirteenth (13th) month of the Lease Term and should Tenant occupy more
than fifty percent (50%) of the Premises during the first year of the Lease
Term, then Tenant shall be responsible for payment of the percentage of
Operating Expenses which is applicable to the percentage of the Premises
occupied.
2
3.2 Additional Rent. Any other sums of money or charges to be paid by
Tenant pursuant to the provisions of this Lease are designated as "Additional
Rent". A failure to pay Additional Rent shall be treated in all events as the
failure to pay rent.
3.3 Interest on Late Payments and Late Payment Charge. Any rent (whether
Base Rent or Additional Rent) or other amount due from Tenant to Landlord under
this Lease not paid when due shall bear interest from the date due until the
date paid at the rate of two percent (2%) per month ("Default Rate"), but the
payment of such interest shall not excuse or cure any default by Tenant under
this Lease. Failure to charge or collect such interest in connection with any
one or more such late payments shall not constitute a waiver of Landlord's right
to charge and collect such interest in connection with any other or similar or
like late payments.
Notwithstanding the above, in the event any rent or other amounts owing
hereunder are not paid within five (5) days after the due date, then Landlord
and Tenant agree that Landlord will incur additional administrative expenses,
the amount of which will be difficult if not impossible to determine.
Accordingly, in addition to such required payment, Tenant shall pay to Landlord
an additional late charge for any such late payment in the amount of five
percent (5%) of the amount of such late payment.
ARTICLE 4
TAXES AND OPERATING EXPENSE ADJUSTMENT
--------------------------------------
In addition to Base Rent, Tenant shall reimburse Landlord for Real Estate
Taxes and Operating Expenses (which sum may be adjusted pursuant to Section 4.2)
for the Building Complex as hereinafter set forth in this Section.
4.1 Definitions. The following terms shall have the following meanings
with respect to the provisions of this Lease:
(a) "Tenant's Pro Rata Share" shall mean that fraction, the
numerator of which is the Rentable Area of the Premises as determined by
Landlord and the denominator of which is estimated to be approximately 241,226
rentable square feet being the total Rentable Area of the Building Complex as
determined by Landlord and is estimated to be 5.6918% which calculation shall be
determined by Landlord and included in the Supplemental Agreement. At such time,
if ever, any space is added to or subtracted from the Premises as herein below
provided, Tenant's Pro Rata Share shall be adjusted by Landlord accordingly.
Landlord's system for measurement of rentable area shall be in accordance with
the Standard Method of Measuring Floor Area in Office Buildings of the Building
Owners and Managers Association International (ANSI/BOMA Z65.9-1996) including
question and answer section.
3
(b) "Real Estate Taxes" shall include (i) any form of assessment
(including any so-called "special" assessments), license tax, business license
fee, business license tax, commercial rental tax, levy, charge, penalty or tax,
imposed by any authority having the direct power to tax, including any city,
county, state or federal government, or any school, agricultural, lighting,
water, drainage or other improvement or special district thereof, against the
Premises, the Building, Property, or Building Complex or any legal or equitable
interest of Landlord therein; and (ii) any assessments, tax, fee, levy or charge
in substitution, partially or totally, of or in addition to any assessment, tax,
fee, levy or charge previously included within the definition of Real Estate
Taxes, including, without limitation, those which may be imposed by governmental
agencies for such services as fire protection, street, sidewalk and road
maintenance, refuse removal and for other governmental services formerly
provided without charge to property owners or occupants. It is the intention of
Landlord and Tenant that all such new and increased assessments, taxes, fees,
levies and charges be included within the definition of Real Estate Taxes for
purposes of this Lease. The following shall also be included within the
definition of Real Estate Taxes for purposes of this Lease, provided, however,
that Tenant shall pay Landlord the entire amount thereof: (x) any tax allocable
to or measured by the area of the Premises or the rental payable hereunder,
including without limitation, any gross income, privilege, sales or excise tax
levied by the State, any political subdivision thereof, city, municipal or
federal government, with respect to the receipt of such rental, or upon or with
respect to the possession, leasing, operating, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises or any portion
thereof; and (y) any tax upon this transaction or any document to which Tenant
is a party, creating or transferring an interest or an estate in the Premises.
"Real Estate Taxes" shall not include Landlord's federal or state income,
franchise, inheritance or estate taxes. "Real Estate Taxes" included in this
definition mean taxes or assessments in the year assessed, without regard to the
year in which same become due or payable.
(c) "Operating Expenses" shall mean all maintenance and operating
costs of any kind or nature with respect to the operation, ownership and
maintenance of the Building Complex and shall include, but not be limited to,
the cost of building supplies, window cleaning, costs incurred in connection
with all energy sources for the Building Complex such as propane, butane,
natural gas, steam, electricity, solar energy and fuel oil; the costs of water
and sewer service, janitorial services, both interior and exterior, general
maintenance, repair and decorating of the Building Complex including the heating
and air conditioning systems and structural components of the Building;
landscaping, maintenance, repair and striping of all parking areas; insurance,
including fire and extended coverage and public liability insurance and any
rental insurance and all risk insurance carried by Landlord, including, without
limitation, insurance carried pursuant to Section 10.2; labor costs incurred in
the operation and maintenance of the Building Complex, including wages and other
payments; costs to Landlord for Worker's Compensation and disability insurance;
payroll taxes and welfare fringe benefits; professional building management
fees, legal, accounting, inspection and reasonable consultation fees incurred in
connection with the Building Complex; any association or similar fees or dues;
costs of complying with recorded restrictions, covenants and/or easements; any
expense attributable to costs incurred by Landlord for any capital improvements
or structural repairs to the Building or Property required by any change in the
laws, ordinances, rules, regulations or otherwise which were not in effect on
the date Landlord obtained its building permit to construct the Building
required by any governmental or quasi-governmental authority having jurisdiction
over the Building which costs shall be amortized over the useful life of the
capital improvements or structural repair; and any costs incurred by Landlord in
making capital improvements or other modifications to the Building or any part
thereof, which costs shall be amortized over the useful life of such improvement
or modification with interest on the unamortized amount at the rate of the
greater of twelve percent (12%) per annum or three percent (3%) above the Prime
Rate (as defined in Section 28.11), in accordance with such reasonable life and
amortization schedules and shall be determined in accordance with generally
accepted accounting principles ("GAAP"). Operating Expenses shall expressly
exclude the following:
4
(i) Costs of maintenance and repair reimbursed by insurance
proceeds;
(ii) Alterations or other specific costs attributable solely
to other tenants' space in the Building which under the terms of the respective
lease is such tenant's responsibility;
(iii) Landlord's income taxes;
(iv) Leasing commissions, advertising and marketing expenses,
tenant finish for other tenants of the Building Complex, costs of preparing
leases and other costs of Landlord related solely to leasing space for other
tenants in the Building Complex;
(v) Interest on debt or amortization payments on any mortgages
or deeds of trust, ground lease rent or other charges or expenses in connection
with the financing or refinancing of the Building Complex;
(vi) Landlord's costs in enforcing leases for other tenants in
the Building Complex including without limitation, all legal fees, costs and
expenses to collect rent arrearages and recover possession; and
(vii) Any charge for depreciation of the Building.
(d) "Variable Operating Expenses" shall mean those Operating
Expenses which vary with occupancy levels or which vary with areas serviced
based upon occupied Rentable Area or which are paid directly by tenants of the
Building. Landlord may equitably make adjustments to Operating Expenses to
account for such Variable Operating Expenses.
(e) If during any year of the term of this Lease, including the Base
Year or portion thereof, the Building is less than ninety-five percent (95%)
occupied for periods greater than one hundred eight (180) consecutive days,
those Operating Expenses which vary with occupancy levels of the Building shall
be equitably adjusted by Landlord to reflect the level of Operating Expenses
which reasonably would be incurred if the Building were ninety-five (95%)
occupied.
4.2 Payments of Taxes and Operating Expenses. It is hereby agreed that
during each Lease Year of the Lease Term Tenant shall pay to Landlord Tenant's
Pro Rata Share of the amount of the Operating Expenses and Real Estate Taxes for
the Building Complex as set forth above. It is agreed that Tenant shall, during
each calendar year pay to Landlord an estimate of Tenant's Pro Rata Share of
such Real Estate Taxes and Operating Expenses as hereinafter set forth.
5
Beginning on the Commencement Date, Tenant shall pay to Landlord each month on
the first day of the month an amount equal to one-twelfth (1/12) of Tenant's Pro
Rata Share of the Real Estate Taxes and Operating Expenses for the calendar year
in question as reasonably estimated by Landlord, with an adjustment to be made
between the parties at a later date as hereinafter provided. If the Commencement
Date is not the first day of a calendar month, Tenant shall pay a prorated
portion of its Pro Rata Share of such Real Estate Taxes and Operating Expenses
for such partial month on the Commencement Date. Furthermore, Landlord may from
time to time but no more than three (3) times during any Lease Year furnish
Tenant with notice of a re-estimation of the amount of Tenant's Pro Rata Share
and Tenant shall commence paying its re-estimated Pro Rata Share on the first
day of the month following receipt of said notice. As soon as practicable
following the end of any calendar year, Landlord shall submit to Tenant a
statement setting forth the exact amount of Tenant's Pro Rata Share of the Real
Estate Taxes and Operating Expenses for the calendar year just completed and the
difference, if any, between Tenant's actual Pro Rata Share of the Real Estate
Taxes and Operating Expenses for the calendar year just completed and the
estimated amount of Tenant's Pro Rata Share of the Real Estate Taxes and
Operating Expenses (which were paid in accordance with this subparagraph) for
such year. Such statement shall also set forth the amount of the estimated Real
Estate Taxes and Operating Expenses reimbursement for the new calendar year
computed in accordance with the foregoing provisions. To the extent that
Tenant's Pro Rata Share of the actual Real Estate Taxes and Operating Expenses
for the period covered by such statement is higher than the estimated payments
which Tenant previously paid during the calendar year just completed, Tenant
shall pay to Landlord the difference within thirty (30) days following receipt
of said statement from Landlord. To the extent that Tenant's Pro Rata Share of
the actual Real Estate Taxes and Operating Expenses for the period covered by
the Statements is less than the estimated payments which Tenant previously paid
during the calendar year just completed, Landlord shall at its option either
refund said amount to Tenant within thirty (30) days or credit the difference
against Tenant's estimated reimbursement for such Real Estate Taxes and
Operating Expenses for the current year. In addition, with respect to the
monthly reimbursement, until Tenant receives such statement, Tenant's monthly
reimbursement for the new calendar year shall continue to be paid at the then
current rate, but Tenant shall commence payment to Landlord of the monthly
installments of reimbursement on the basis of the statement beginning on the
first day of the month following the month in which Tenant receives such
statement.
Tenant's obligation with respect to its Pro Rata Share of the Real Estate
Taxes and Operating Expenses shall survive the expiration or early termination
of this Lease and Landlord shall have the right to retain the Security Deposit,
or so much thereof as it deems necessary, to secure payment of Tenant's Pro Rata
Share of the actual Real Estate Taxes and Operating Expenses for the portion of
the final calendar year of the Lease during which Tenant was obligated to pay
such expenses. If Tenant occupies the Premises for less than a full calendar
year during the first or last calendar years of the term hereof, Tenant's Pro
Rata Share for such partial year shall be calculated by proportionately reducing
the Real Estate Taxes and Operating Expenses to reflect the number of months in
such year during which Tenant occupied the Premises. Tenant shall pay its Pro
Rata Share within fifteen (15) days following receipt of notice thereof.
6
Tenant shall have the right, but not more than once per annum, at any time
within one (1) year after a statement of actual Real Estate Taxes and Operating
Expenses for a particular calendar year has been rendered by Landlord as
provided herein, at Tenant's sole cost and expense, to have a certified public
accountant examine and review Landlord's books and records during normal
business hours and after reasonable notice, at Landlord's office relating to the
determination of such Real Estate Taxes and Operating Expenses. Unless Tenant
objects to the statement provided by Landlord within sixty (60) days of receipt
of such statement, the adjustment and statement shall be deemed conclusive.
In the event of any error in the statement, the amount due the other shall
be paid or credited, if applicable, within thirty (30) days of the determination
of the error. In the event that the error shows an excess payment by Tenant of
five percent (5%) or more of the total actual Operating Expense liability of
Tenant for such year, then Landlord shall pay the reasonable costs of such
review within thirty (30) days of final resolution of any dispute regarding the
error.
4.3 Reimbursement Survives Termination. In the event of the termination of
this Lease by expiration of the stated term or for any other cause or reason
whatsoever prior to the determination of rental adjustment as hereinafter set
forth, Tenant's agreement to reimburse Landlord up to the time of termination
shall survive termination of the Lease and Tenant shall pay any amount due to
Landlord within fifteen (15) days after being billed therefor. In the event of
the termination of this Lease by expiration of the stated term or for any other
cause or reason whatsoever, except default by Tenant of any of the terms or
provisions of this Lease, prior to the determination of rental adjustments as
hereinabove set forth, Landlord's agreement to refund any excess additional
rental paid by Tenant up to the time of termination shall survive termination of
the Lease and Landlord shall pay the amount due to Tenant within fifteen (15)
days of Landlord's determination of such amount. This covenant shall survive the
expiration or termination of this Lease.
If the last year of the term of this Lease ends on any day other than the
last day of December, any payment due to Landlord of Tenant's Pro Rata Share of
Real Estate Taxes and Operating Costs shall be prorated on the basis by which
the number of days in such partial year bears to 365.
Any failure of Landlord to furnish Tenant with an estimate of its Pro Rata
Share of Real Estate Taxes and Operating Expenses or any statements as set forth
in this Section 4 shall not act to relieve Tenant of its liability therefor; and
with respect to any deficiencies, Tenant agrees to pay same within fifteen (15)
days of written demand from Landlord.
ARTICLE 5
BUILDING SERVICES
-----------------
5.1 Standard Services. Landlord agrees to furnish to the Premises during
regular business hours from 7:00 a.m. to 6:00 p.m. Mondays through Fridays and
from 8:00 a.m. to 1:00 p.m. Saturdays, except for Holidays as the same are
defined in Exhibit E, and subject to the Rules and Regulations of the Building
as set forth in Exhibit E, heat and air conditioning for the use and occupancy
of the Premises, passenger elevator service and freight elevator service,
subject to scheduling by Landlord. Landlord shall also furnish: (i) electric
current to be supplied for lighting the Premises and public halls and for the
operation of Ordinary Office Equipment, as defined below; (ii) janitorial and
cleaning services, and (iii) domestic water in reasonable quantity. Elevator
service shall mean service either by non-attended automatic elevators or
elevators with attendants at the option of Landlord. Landlord shall also furnish
to the Premises (at rates reasonably set by Landlord) heating and air
conditioning during times other than regular business hours and such other items
as are not provided for herein, provided Tenant gives Landlord not less than
twenty-four (24) hours notice of Tenant's needs for such additional heating or
air conditioning. Landlord shall also, at said times, maintain and keep lighted
the common stairs, entries, and toilet rooms in the Building that would
reasonably be subject to use by Tenant, its agents and employees during other
than regular business hours. Landlord also has the right to charge Tenant for
energy costs incurred because of Tenant's above Building average usage at any
time or by reason of usage of the Premises or the Building during other than
regular business hours. For purposes hereof, Ordinary Office Equipment shall
include current (or comparable to current) everyday office equipment, both in
size of the equipment and number of units utilized within the Premises, for
office tenants in first class office buildings in Broomfield, Colorado and shall
specifically exclude computers or other equipment that require special cooling,
venting or generators for the operation thereof.
7
5.2 Interruption of Standard Services. Tenant agrees that Landlord shall
not be liable for failure to supply any heating, air conditioning, elevator,
janitorial services, electric current, or any other service described in Section
5.1 above during any period if Landlord uses reasonable diligence to restore or
to supply such services or electric current, it being further agreed that
Landlord reserves the right to temporarily discontinue such services or any of
them, or electric current at such times as may be necessary by reason of
accident, unavailability of employees, repairs, alterations, or improvements, or
whenever by reason of strikes, lockouts, riots, acts of God, legal requirements
or any other happening or occurrence beyond the reasonable control of Landlord.
If Landlord is unable to furnish such services or electric current, Landlord
shall not be liable for damages to persons or property for any such
discontinuance, nor shall such 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 hereunder. Landlord's
obligation to furnish services or electric current shall be conditioned upon the
availability of adequate energy sources from the public utility companies
presently serving the Building Complex. Landlord shall have the right to reduce
heating, cooling or lighting within the Premises and in the public area in the
Building as required by any mandatory or voluntary fuel or energy-saving
program.
Notwithstanding the foregoing, Landlord hereby agrees that if there is an
interruption or discontinuance of the services which Landlord has agreed to
provide that renders the Premises untenantable and such interruption or
discontinuance is within Landlord's reasonable control and continues for a
period of seven (7) or more consecutive days after Landlord receives written
notice thereof from Tenant (each an "Unauthorized Interruption"), Tenant's rent
shall xxxxx provided that Landlord can recover such rent through Landlord's rent
loss/business interruption insurance covering the Building and Landlord has not
corrected or remediated the cause of such Unauthorized Interruption within such
seven (7) day period. Such abatement shall commence at the end of said seven (7)
day period and continue until such time as the Premises are rendered tenantable.
In any case, Tenant's rent shall not xxxxx (or shall partially xxxxx) as
follows: (a) if the Unauthorized Interruption is the result of any willful
misconduct or negligent acts on the part of Tenant, its agents, contractors,
employees, express or implied invitees, or servants, or due to Tenant's default,
rent shall not xxxxx, (b) if Tenant continues to nonetheless use any part of the
Premises for conducting its business, rent shall xxxxx only in proportion to the
part rendered untenantable and not so used, (c) if Landlord's rent loss/business
interruption insurance will only cover a portion of Tenant's rent, the rent
shall xxxxx only as to the portion covered by such insurance, and (d) if
Tenant's assignees, sublessees or other transferees are not entitled to rent
abatement, rent shall not xxxxx.
8
5.3 Services Paid by Tenant. Unless otherwise provided by Landlord, Tenant
shall separately arrange with the applicable local public authorities or
utilities, as the case may be, for the furnishing of and payment for all
telephone services as may be required by Tenant in the use of the Premises.
Tenant shall directly pay for telephone services, including the establishment
and connection thereof, at the rates charged for such services by said authority
or utility, and the failure of Tenant to obtain or to continue to receive such
services for any reason whatsoever shall not relieve Tenant of any of its
obligations under this Lease.
5.4 Above-Standard Service Requirements. If heat-generating machines or
equipment other than Ordinary Office Equipment, including telephone equipment,
cause the temperature in the Premises, or any part thereof, to exceed the
temperatures the Building's air conditioning system would be able to maintain in
such Premises were it not for such heat generating equipment, then Landlord
reserves the right to install supplementary air conditioning units in the
Premises, and the cost thereof, including the cost of installation and the cost
of operation and maintenance thereof, shall be paid by Tenant to Landlord upon
demand by Landlord.
Tenant shall not, without the written consent of Landlord, which consent
shall not unreasonably be withheld or delayed, use any apparatus or device which
will in any way increase the amount of electricity or water which Landlord
determines to be reasonable for use of the Premises as general office space, nor
connect with electric current (except through existing electrical outlets in the
Premises) or water pipes any apparatus or device for the purposes of using
electric current, other energy or water. Landlord shall have the right to
install one or more separately checkmetered electrical circuits to serve all of
Tenant's equipment, machinery or appliances which equipment, machinery or
appliances requires electrical current supplied to the Premises as the same is
determined by Landlord which costs of checkmetering shall be payable by Tenant
to Landlord upon demand. Tenant agrees to reimburse Landlord for the
checkmetered electrical current utilized by Tenant at the rates charged to
Landlord to purchase electrical current for the Building, such reimbursement to
be made within fifteen (15) days of the date of the billing therefor; such
billing to occur no more frequently than monthly.
5.5 Cleaning. Tenant shall not provide any janitorial or cleaning services
without Landlord's written consent (which may be given or withheld in Landlord's
sole discretion), and then only subject to supervision of Landlord, at Tenant's
sole responsibility, and by a janitorial or cleaning contractor or employees at
all times satisfactory to Landlord.
5.6 Re-Xxxxxxx. Landlord shall have the exclusive right to make any
replacement of Building standard electric light bulbs, fluorescent tubes and
ballasts in the Building Complex throughout the Lease Term and any renewal
thereof. Landlord may adopt a system of relamping and reballasting periodically
on a group basis as may be required in accordance with good management practice.
9
5.7 Landlord's Obligation. Subject to the provisions of this Lease and
provided Tenant is not in default hereunder, Landlord agrees (as an Operating
Expense) to keep and maintain the Building Complex and to provide standard
services therefor in a manner and at levels reasonably consistent with first
class office buildings of similar age, size and structure in Broomfield,
Colorado.
ARTICLE 6
TENANT REPAIR
-------------
6.1 Damage by Tenant. If the Building Complex, the Building, the Premises
or any portion thereof including but not limited to the elevators, boilers,
engines, pipes and other apparatus, or members of elements of the Building (or
any of them) used for the purpose of climate control of the Building or
operating the elevators, or if the water pipes, drainage pipes, electric
lighting or other equipment of the Building or the roof or outside walls of the
Building or parking facilities of Landlord and also Tenant Improvements (as
hereinafter defined) including but not limited to the carpet, wall covering,
doors and woodwork, become damaged or are destroyed through the negligence,
carelessness or misuse of Tenant, its servants, agents, employees or anyone
permitted by Tenant to be in the Building, or through it or them, then the cost
of the necessary repairs, replacements or alterations shall be borne by Tenant
who shall pay the same within thirty (30) days of receipt of an invoice for such
costs to Landlord as Additional Rent. Landlord shall have the exclusive right,
but not the obligation, to make any repairs necessitated by such damage.
6.2 Maintenance. Tenant shall keep the Premises, including all fixtures
and improvements installed by Tenant or at Tenant's request, in good order,
condition and repair and in secure and lawful condition. If Tenant fails to keep
the Premises in such good order, condition and repair as required hereunder to
the reasonable satisfaction of Landlord, Landlord may, after five (5) days
written notice to Tenant, restore the Premises to such good order and condition
and make such repairs without liability to Tenant for any loss or damage that
may accrue to Tenant's property or business by reason thereof, and upon
completion thereof, Tenant shall pay to Landlord, as Additional Rent, upon
demand, the cost of restoring the Premises to such good order and condition and
the making of the repairs. If as a result of any changes in governmental laws,
ordinances, rules or regulations, the Premises must be altered to lawfully
accommodate the use or occupancy of Tenant, such alterations shall be made only
with Landlord's prior consent, and shall be made in accordance with Article 15
hereof and the entire cost shall be borne by Tenant. In no event shall the
requirement of Landlord's consent for alterations create any liability of
Landlord to Tenant or any third party arising from or related to such legal
requirements.
6.3 Good Condition. Tenant shall leave the Premises at the end of each day
in a reasonable condition for the purpose of allowing the performance of
Landlord's cleaning services hereinafter described.
10
6.4 Surrender. At termination of this Lease, upon its expiration or
otherwise, Tenant shall remove from the Premises all personal property and trade
fixtures of Tenant; repair any damage caused by such removal; deliver up the
Premises with all improvements located thereon (except as herein provided) in
good repair and condition, reasonable wear and tear excepted, broom clean and
free of all debris; execute and deliver such conveyance as Landlord may
reasonably deem necessary or desirable to evidence the same and any other
conveyances pursuant to this Lease; and continue to insure all of the same; as
otherwise required pursuant hereto, until this section 6.4 has been complied
with. Tenant shall give written notice to Landlord at least thirty (30) days
prior to vacating and shall arrange to meet with Landlord for a joint inspection
of the Premises. In the event of Tenant's failure to give such notice or arrange
such joint inspection, Landlord's inspection at or after Tenant's vacating the
Premises shall be conclusively correct for purposes of determining Tenant's
responsibility for repairs and restoration.
6.5 Broken Glass. Tenant shall pay on demand the cost of replacement with
identical quality, size and characteristics of glass broken on the Premises,
including outside windows and doors of the perimeter of the Premises (including
perimeter windows in the exterior walls) during the continuance of this Lease,
unless the glass shall be broken by Landlord, its servants, or agents acting on
its behalf.
ARTICLE 7
ASSIGNMENT AND SUBLETTING
-------------------------
7.1 Limitations. Except as set forth in Section 7.4 below, Tenant shall
not assign or in any manner transfer this Lease or any estate or interest
therein or sublet Premises or any part thereof, or grant any license, concession
or other right to occupy any portion of the Premises (each a "Transfer") without
the prior written consent of Landlord as set forth herein. Landlord shall not
unreasonably withhold or delay consent to any Transfer provided Tenant requests
such consent in writing at least thirty (30) days prior to the proposed Transfer
and (i) Tenant is not in default of this Lease, (ii) the use of the Premises
does not violate the Lease, including the Rules and Regulations attached hereto
as Exhibit E and incorporated herein by this reference, (iii) the proposed
sublessee, assignee, licensee, concessionaire or occupant ("Transferee") has a
good business reputation, (iv) Tenant submits the most current audited current
financials (or such other financial information as is available) for such
Transferee, (v) Tenant submits the form of assignment, sublease, license or
other transfer document ("Transfer Document") for Landlord?'s prior review and
approval, (vi) such Transferee is not a tenant in the Building or in a building
owned by Landlord or an affiliated entity of Landlord; and (vii) the subletting
or assignment does not change the rights, obligations or liabilities of the
parties under the Lease, nor impose any duty upon Landlord not contained in the
Lease. In no event shall Tenant have any right to Transfer if there exists any
default under this Lease. Consent by Landlord to one or more Transfers shall not
operate as a waiver of Landlord's rights under this section. Any Transfer
without Landlord's consent, where such consent is required hereunder, shall be
deemed void and confer no rights upon a third party. Notwithstanding any
Transfer, Tenant under this Lease shall at all times remain fully responsible
and liable for the payment of the rental herein specified and for compliance
with all other terms and conditions of this Lease. Without in any way limiting
Landlord's right to refuse to give consent, Landlord reserves the right in the
event it does give consent to impose such conditions upon its consent as
Landlord deems necessary, including but not limited to payment to Landlord of
any and all sums required to be paid under the terms and conditions of such
Transfer Document including sums in excess of Base Rent and to the requirement
of additional security which in Landlord's reasonable business judgment shall
insure the existing state of Premises and the rentals due under this Lease.
11
Except as set forth in Section 7.4 below, neither this Lease nor any
interest therein shall be assignable as to the interest of Tenant by operation
of law, without the written consent of Landlord. A sale by Tenant of all or
substantially all of its assets or all or substantially all of its stock (if
Tenant is a publicly traded corporation); a merger of Tenant with another
corporation; or the transfer of twenty five percent (25%) or more of the stock
of Tenant if Tenant's stock is not publicly traded; or the transfer of twenty
five percent (25%) or more of the beneficial ownership interest in Tenant if
Tenant is a partnership or a limited liability company without the prior written
consent of Landlord, shall constitute a prohibited assignment hereunder.
7.2 Acceptance of Performance. If this Lease be assigned or if the
Premises or any part thereof be sublet or occupied by anybody other than Tenant,
Landlord may, after default by Tenant, collect the rent from the assignee,
subtenant or occupant and apply the net amount collected to the rent herein
reserved retaining the remainder, if any, for the account of Landlord, but no
such assignment, subletting, occupancy or collection shall be deemed an
acceptance of the assignee, subtenant or occupant as the tenant hereof, or
constitute a release of Tenant from further performance by Tenant of the
covenants on the part of Tenant herein contained.
7.3 Document Review. All Transfer Documents utilized by Tenant to evidence
any Transfer shall be subject to prior reasonable approval by Landlord or its
attorney. Unless Tenant submits to Landlord the subletting and assignment using
Landlord's forms (without modification), Tenant shall pay on demand all of
Landlord's reasonable costs and expenses, including reasonable attorney?s' fees,
incurred in review and approval of such Transfer Documents.
7.4 Affiliated Entities. Provided Tenant is not in default hereunder,
Tenant may effect a Transfer to any Affiliated Entity (as defined below) or any
appointed distributor of Tenant without Landlord's prior consent provided Tenant
delivers to Landlord a copy of the executed Transfer Document on a Landlord
approved form to Landlord within ten (10) days of such Transfer, which Transfer
shall be subject to all of the liabilities and obligations set forth herein and
Tenant shall not be released of any of its liabilities hereunder. In no event,
however, shall any such Transfer have any material adverse financial impact on
Tenant's financial status. Tenant shall, prior to such Transfer, provide written
evidence reasonably satisfactory to Landlord that there shall be no material
adverse financial impact on Tenant or Landlord resulting from such Transfer. For
purposes hereof, Affiliated Entity shall mean an entity which (i) controls, is
controlled by, or is in common control with Tenant; or (ii) results from the
merger or consolidation with Tenant or acquires all or substantially all of the
assets or stock of Tenant.
7.5 Transfer Rents. One-half of any sums or consideration for any Transfer
received by Tenant from the Transferee whether in the form of sublease rents or
otherwise which exceed the total rent payable by Tenant for the Premises and
Transfer Expenses, as defined below, shall be paid to Landlord within five (5)
days after receipt thereof by Tenant. For purposes of this Section 7.5, Transfer
Expenses shall mean Tenant's actual and reasonable costs incurred by Tenant in
conjunction with a Transfer including, but not limited to, tenant finish costs,
commissions, and legal fees to the extent paid to third parties not affiliated
with Tenant.]
12
ARTICLE 8
TRANSFER BY LANDLORD AND LIMITED LIABILITY
------------------------------------------
8.1 Transfer of Landlord's Interest. In the event of a sale, conveyance,
or assignment by Landlord of Landlord's interest in the Building Complex (other
than a transfer for security purposes only), Landlord shall be relieved from and
after the date specified in any such notice of transfer or assignment of all of
Landlord's obligations and liabilities accruing thereafter on the part of
Landlord, and Tenant agrees to look only toward such assignee or transferee of
Landlord's interest for performance of obligations and liabilities arising after
the date of such transfer; provided, however, that no successor landlord shall
be responsible for the return of security deposits unless such successor
actually receives such deposits.
8.2 Limited Liability of Landlord. Anything contained in this Lease to the
contrary notwithstanding, Tenant agrees that Tenant shall look solely to the
estate of Landlord in the Building Complex for the collection of any judgment
(or other judicial process) requiring the payment of money by Landlord in the
event of any default or breach by Landlord with respect to any of the terms and
provisions of this Lease to be observed or performed by Landlord, subject,
however, to the rights of the holder of any mortgage covering the Building
Complex, and no other assets of Landlord, its partners, agents, employees,
officers, or the employees or officers of any of its partners shall be subject
to levy, execution or other judicial process for the satisfaction of Tenant's
claim and Landlord shall not be liable for any such default or breach except to
the extent of Landlord's estate in the Building Complex.
ARTICLE 9
USE OF PREMISES
---------------
9.1 Use. Except as expressly permitted by prior written consent of
Landlord, which may be given or withheld in its sole reasonable discretion, the
Premises shall not be used other than for general business office purposes. All
use of the Premises shall comply with the terms of this Lease and all applicable
laws, ordinances, regulations or other governmental ordinances, recorded
restrictions, covenants and easements and association rules and regulations from
time to time in existence, including, without limitation, obtaining any and all
necessary licenses and permits.
9.2 Compliance with Rules and Regulations. Tenant and employees and all
persons visiting or doing business with Tenant in the Premises shall be bound by
and shall observe the Rules and Regulations as set forth in Exhibit E attached
hereto and incorporated herein by this reference which may, at Landlord's
reasonable discretion, be promulgated, amended, or expanded from time to time
during the Lease term by Landlord relating to the Building, the Building Complex
and/or the Premises of which notice in writing shall be given to Tenant and all
such rules and regulations as changed from time to time shall be deemed to be
incorporated into and form a part of this Lease. Tenant shall further be
responsible for the compliance with such rules and regulations by Tenant's
employees, agents, patrons and invitees. Any default in the performance or
observance of such rules and regulations shall be a default hereunder and
Landlord shall have all remedies provided for in this Lease in the event of
default by Tenant, Landlord however, shall not be responsible to Tenant for
nonobservance by any other tenant or person of any tenant or person of any such
rules and regulations. Landlord agrees to enforce the Rules and Regulations
against Tenant in a manner reasonably consistent with its enforcement of such
rules and regulations against other tenants; however, Tenant acknowledges that
certain rules or regulations may be specific to a tenant or use and that such
rules or regulations may not be applicable to all tenants and cannot be enforced
uniformly.
13
ARTICLE 10
INSURANCE
---------
10.1 Tenant's Insurance. Tenant shall, during its occupancy of the
Premises and during the entire term hereof, at its sole cost and expense,
obtain, maintain and keep in full force and effect, and with Tenant, Landlord,
the property manager and mortgagees of Landlord named as additional insureds
therein as their respective interests may appear, the following types and kinds
of insurance:
(a) Upon property of every description and kind owned by Tenant and
located in the Building Complex or for which Tenant is legally liable or
installed by or on behalf of Tenant, including, without limitation, furniture,
fittings, installations, alterations, additions, partitions, fixtures and
anything in the nature of a leasehold improvement in an amount not less than the
full replacement cost thereof, with a Minimum Coverage on the Special Causes of
Loss Form including Sprinkler Leakage; and in the event that there shall be a
dispute as to the amount which comprises full replacement cost, the decision of
Landlord or the mortgagees of Landlord shall be conclusive. In no event shall
the deductible for such insurance be more than $1,000.00.
(b) Bodily Injury Property Damage and Commercial General Liability
insurance including personal liability, contractual liability, non-owned
automotive liability, tenants' legal liability for the full replacement costs of
the Premises. Such policies shall be written on a comprehensive basis with
limits of not less than $2,000,000.00 with respect to injuries or death of one
or more persons, and not less than $1,000,000.00 with respect to property damage
and not less than $1,000,000.00 for any one occurrence, together with not less
than a $5,000,000 umbrella policy, and such higher limits for all such insurance
as Landlord or the mortgagees of Landlord may reasonably require. All policies
shall name Landlord, its managers and mortgagee as additional insureds. All
policies shall be primary and noncontributing over any valid and collectible
insurance of any of the additional insureds.
(c) 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 consistent with then prevalent insurance
industry practices and policies.
(d) Business interruption insurance in such amounts as will
reimburse Tenant for direct or indirect loss of earnings attributable to all
perils commonly insured against by prudent tenants or attributable to prevention
of access to the Premises or to the Building as a result of such perils.
14
(e) Workers' Compensation Insurance and Employers' liability
insurance in amounts reasonably satisfactory to Landlord or as required by law.
(f) If Tenant performs any work on the Premises, prior to the
commencement of any such work, Tenant shall deliver to Landlord certificates
issued by insurance companies qualified to do business in the State of Colorado,
evidencing that workers' compensation and public liability insurance and
property damage insurance, all with companies in form and in amounts
satisfactory to Landlord, are in force and effect and maintained by all
contractors and subcontractors engaged by Tenant to perform such work and shall
name Landlord, its manager and mortgagee as additional insureds. Landlord or its
mortgagee may require any other form or types of insurance of such parties, and
may be added as an additional insured thereunder if so requested. All policies
shall be primary and noncontributory over any valid collectible insurance made
available to any of the additional insureds.
All policies shall be taken out with insurers reasonably acceptable to
Landlord and in form satisfactory from time to time to Landlord. Tenant agrees
that certificates of insurance, or, if required by Landlord or the mortgagees of
Landlord, certified copies of each such insurance policies will be delivered to
Landlord as soon as practicable after the placing of the required insurance, but
in no event later than ten (10) days after Tenant takes possession of all or any
part of the Premises. All policies shall contain an undertaking by the insurers
to notify Landlord and the mortgagees of Landlord in writing not less than sixty
(60) days prior to any material change, cancellation or sooner termination
thereof.
Tenant covenants and agrees that in the event of damage or destruction to
the leasehold improvements in the Premises covered by insurance as required to
be taken out by Tenant herein, and if Landlord or Tenant do not terminate this
Lease pursuant to Section 21.1 herein, Tenant will use the proceeds of such
insurance for the purpose of repairing or restoring such leasehold improvements.
In the event that Landlord or Tenant are entitled to terminate the Lease
pursuant to Article 21, then if the Premises have also been damaged, Tenant
shall pay to Landlord that amount of its insurance proceeds necessary to repair
the leasehold improvements.
10.2 Landlord's Insurance. Landlord agrees to carry during the term hereof
insurance for fire, extended coverage, vandalism and malicious mischief,
insuring the Building Complex (excluding foundations, excavations and other
non-insurable items) for the full insurable value thereof. Landlord may, but
shall not be obligated to, take out and carry any other form or forms of
insurance as it or the mortgagees of Landlord may reasonably determine to be
advisable. All costs of such insurance shall be included as Operating Expenses
and notwithstanding any contribution by Tenant to the cost of insurance
premiums, as provided in Article 4, Tenant acknowledges that it has no right to
receive any proceeds from any such insurance policies carried by Landlord, and
that such insurance will be for the sole benefit of Landlord, with no coverage
for Tenant for any risk insured against.
10.3 Subrogation. The parties hereto agree that any and all fire, extended
coverage and/or property damage insurance which is required to be carried by
either shall be endorsed with a subrogation clause, substantially as follows:
"This insurance shall not be invalidated should the insured waive, in writing
prior to a loss, any and all right of recovery against any party for loss
occurring to the property described therein"; and each party hereto 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, as a result of damage to any of its real or personal property
insured under valid and collectible insurance policies to the extent of the
collectible recovery under such insurance or which would have been collectible
had the party carried the insurance required to be maintained hereunder.
15
ARTICLE 11
OBSERVANCE OF LAW
-----------------
11.1 Law and Covenants. Tenant shall comply with all provisions of any
applicable covenants, rules or restrictions including the architectural control
committee and all provisions of law, including without limitation, federal,
state, county and city laws, ordinances and regulations and any other
governmental, quasi-governmental or municipal regulations, which shall impose
any duty upon Landlord or Tenant, and which relate to Premises, including,
without limitation, the partitioning, equipment operation, alteration, occupancy
and use of the Premises, and to the making of any repairs, replacements,
alterations, additions, changes, substitutions or improvements of or to the
Premises. Moreover, Tenant shall comply with all police, fire and sanitary
regulations imposed by any federal, state, county or municipal authorities, or
made by insurance underwriters, and to observe and obey all governmental and
municipal regulations and other requirements governing the conduct of any
business conducted in the Premises or the use or occupancy thereof.
11.2 Taxes. Tenant shall fully and timely pay all business and other
taxes, charges, rates, duties, assessments and license fees levied, rates
imposed, charged or assessed against or in respect of Tenant's occupancy of the
Premises or in respect of the personal property, trade fixtures, furniture and
facilities of Tenant or the business or income of Tenant on and from the
Premises, if any, as and when the same shall become due, and to indemnify and
hold Landlord harmless from and against all payment of such taxes, charges,
rates, duties, assessments and license fees and against all loss, costs, charges
and expenses occasioned by or arising from any and all such taxes, rates,
duties, assessments and license fees, and to promptly deliver to Landlord for
inspection, upon written request of Landlord, evidence satisfactory to Landlord
of any such payments.
ARTICLE 12
WASTE AND NUISANCE; ENVIRONMENTAL
---------------------------------
12.1 Waste and Nuisance. Tenant shall not commit, suffer or permit any
waste or damage or disfiguration or injury to the Premises or common areas in
the Building Complex or the fixtures and equipment located therein or thereon,
or permit or suffer any overloading of the floors thereof and shall not place
therein any safe, heavy business machinery, computers, data processing machines,
or other heavy things without first obtaining the consent in writing of Landlord
and, if requested, Landlord's architect or engineer (at Tenant's expense), and
not use or permit to be used any part of the Premises for any dangerous, noxious
or offensive trade or business, and shall not cause or permit any nuisance,
noise or action in, at or on the Premises.
16
12.2 Environmental Covenant. Tenant shall not cause or permit any
Hazardous Substance (as hereinafter defined) to be used, stored, generated, or
disposed of on, in or about the Premises, the Building, the Property or the
Building Complex by Tenant, or any of its agents, employees, representatives,
contractors, suppliers, customers, subtenants, concessionaires, licensees, or
invitees unless Tenant shall have received Landlord's prior written consent,
which Landlord may withhold or at any time revoke in its sole discretion. Tenant
shall indemnify, defend and hold harmless Landlord from and against any and all
claims, damages, fines, judgments, penalties, costs, expenses, liabilities, or
losses relating to any violation by Tenant of any Environmental Law (as
hereinafter defined) or of this Section 12.2 (including, without limitation, a
decrease in value of the Premises, damages caused by loss or restriction of
rentable or usable space, damages caused by adverse impact on marketing of
space, and any and all sums paid for settlement of claims, attorneys' fees,
consultant fees, and expert fees) incurred by or asserted against Landlord
arising during or after the term of this Lease as a result thereof. This
indemnification includes, without limitation, any and all costs incurred because
of any investigation of the site or any cleanup, removal, testing, or
restoration mandated or conducted by or on behalf of any federal, state, or
local agency or political subdivision. Without limitation of the foregoing, if
Tenant causes or permits the presence of any Hazardous Substance on the Premises
and that results in any contamination, Tenant shall promptly, at its sole
expense, take any and all necessary or appropriate actions to return the
Premises to the condition existing prior to the presence of any such Hazardous
Substance. Tenant shall first obtain Landlord's written approval for any such
remedial action.
12.3 Hazardous Substances. As used herein, "Hazardous Substance" means any
substance that is regulated by any local government, the State of Colorado, the
United States government, or any agency, authority and/or instrumentality
thereof and includes any and all materials or substances that are defined as
"hazardous waste," "extremely hazardous waste," or a "hazardous substance"
pursuant to any Environmental Law. "Hazardous Substance" includes but is not
restricted to petroleum and petroleum byproducts, asbestos, explosives,
polychlorinated biphenyls ("PCBs") and infectious waste.
12.4 Environmental Laws. As used herein, "Environmental Laws" means all
federal, state and local laws, including statutes, regulations, and
requirements, relating to the discharge of air pollutants, water pollutants or
process waste water or otherwise relating to the environment or Hazardous
Substances, including, but not limited to, the Federal Clean Water Act, the
Federal Resource Conservation and Recovery Act of 1976, the Federal
Comprehensive Environmental Responsibility Cleanup and Liability Act of 1980,
regulations of the Environmental Protection Agency, regulations of the Nuclear
Regulatory Agency, and regulations of any state department of natural resources
or state environmental protection agency, as amended or supplemented from time
to time, now or at any time hereafter in effect.
ARTICLE 13
ENTRY BY LANDLORD
-----------------
Landlord and its agents shall have the right to enter the Premises at all
reasonable times for the purpose of examining or inspecting the same, to supply
janitorial services and any other services to be provided by Landlord to Tenant
hereunder, to show the same to prospective purchasers, lenders, tenants or
investors, and to make such alterations, repairs, improvements or additions,
whether structural or otherwise, to the Premises or to the Building as Landlord
may deem necessary or desirable. Landlord may enter the Premises for any of the
foregoing reasons including entry by means of a master key without liability to
Tenant including any claims of interference and without affecting this Lease or
Tenant's obligations under this Lease. Landlord shall use reasonable efforts to
avoid interference with Tenant's business in the Premises and shall be
responsible for any acts of gross negligence or willful misconduct caused by
Landlord in connection with such entry.
17
ARTICLE 14
INDEMNIFICATION
---------------
14.1 Indemnification by Tenant. Subject to Article 13 above, Tenant shall
indemnify Landlord and save it harmless from and against any and all claims,
damages, fines, judgments, penalties, costs, expenses, liability or losses
(including loss of rentals payable by Tenant or other tenants in the event of
loss either directly or indirectly caused by any negligent act or omission,
willful misconduct or breach of the Lease of or by Tenant, its agents,
contractors, employees, servants, licensees, or concessionaires or invitees or
by anyone permitted to be on the Premises by Tenant), claims, actions, damages,
liability and expenses arising out of or in connection with the use and/or
occupancy of the Premises, including, without limitation, from any occurrence
in, upon or at the Premises or any part thereof, occasioned wholly or in part by
any negligent act or omission, willful misconduct of Tenant or breach of the
Lease of or by Tenant, its agents, contractors, employees, servants, licensees,
or concessionaires or invitees or by anyone permitted to be on the Premises by
Tenant. In the event Landlord shall be made a party to any litigation commenced
by or against Tenant or by anyone permitted to be on the Premises by Tenant, its
agents, contractors, employees, servants, licensees, concessionaires or
invitees, then Tenant shall protect and hold Landlord harmless and shall pay all
costs, expenses and reasonable attorney?s' fees incurred or paid by Landlord in
connection with such litigation whether or not such action is contested or
prosecuted to judgment. All personal property on the Premises shall be at
Tenant's sole risk, and Landlord shall not be liable for any damage done to or
loss of such personal property or for damage or loss suffered by Tenant.
14.2 Indemnification by Landlord. Landlord agrees to indemnify, defend and
hold Tenant harmless from and against any and all claims, damages, fines,
judgments, penalties, costs, expenses, liabilities or losses arising from any
governmental entity seeking to enforce against Tenant or seeking damages from
Tenant, or seeking to join Tenant in any legal action pertaining to the
violation by Landlord of any Environmental Law(s). The indemnity shall not be
binding upon any Mortgagee and Tenant shall look solely to the respective
landlord when such landlord is finally held to have violated the Environmental
Law. Neither the predecessor in interest nor the successor in interest to such
landlord shall be liable to Tenant for this indemnity.
14.3..Comparative Fault. To the extent that either Landlord or Tenant
(inclusive of their respective employees, agents, contractors, servants,
concessionaires, licensees, or invitees) is finally held by a court of competent
jurisdiction to be partially at fault for any claim for which an indemnity
obligation arises hereunder, then neither Landlord nor Tenant as against each
other shall indemnify, defend or hold the other harmless and each party shall be
liable only to the extent of the percentage of its own fault as finally held by
the court of competent jurisdiction.
18
ARTICLE 15
ALTERATIONS
-----------
15.1 Alterations by Tenant. Tenant shall not make, install or erect in or
to the Premises any installations, alterations, modifications, additions or
partitions without submitting the drawings and specifications to Landlord and
obtaining Landlord's prior written consent in each instance. Furthermore, Tenant
shall obtain Landlord's prior written consent, which consent shall not be
unreasonably withheld or delayed, to any change or changes in such drawings or
specifications submitted as aforesaid. Tenant, upon prior notice to Landlord and
compliance with all other provisions hereof, may make alterations of a "cosmetic
nature" without being subject to Landlord's prior approval, however, Landlord
can request such alterations be removed upon termination or earlier expiration
of the Lease and the Premises returned, at Tenant's expense, to their condition
prior to the alteration, subject to ordinary wear and tear. For purposes hereof,
"cosmetic alterations" shall be alterations of an aesthetic nature which do not
require a building permit and do not affect the structure of the Building or any
of its systems including HVAC, electrical or plumbing. Tenant shall pay the
reasonable cost to Landlord of having its architects, engineers, or other
consultants review such plans and changes thereto prior to proceeding with any
work based on such drawings or specifications. All such work shall be performed
in a good and workmanlike manner, free and clear of all mechanics liens, and in
compliance with the provisions of Article 11 hereof, and once commenced shall be
diligently pursued through completion, and Landlord shall have no liability for
the performance of such work, notwithstanding its consent to any plans and
specifications. PROVIDED NEVERTHELESS that Landlord may, at its option, at
Tenant's expense, require that Landlord's contractors be engaged for any
mechanical or electrical work or other leasehold improvement. Without limiting
the generality of the foregoing, any work performed by or for Tenant shall be
performed by competent workmen whose labor union affiliations are not
incompatible with those of any workmen who may be employed in the Building
Complex by Landlord, its contractors or subcontractors. In addition to the above
all contractors and subcontractors must meet Landlord's specifications, as
reasonably determined by Landlord, for minimum requirements for insurance,
bonds, quality of work, experience and such other reasonably applicable factors.
Tenant shall submit to Landlord's supervision over construction, shall provide
Landlord upon request with financial assurances prior to the commencement of
alterations, and promptly pay to Landlord's or Tenant's subcontractors, as the
case may be, when due, the costs of all such work and of all materials, labor
and services involved therein and of all decoration and all changes in the
Building, its equipment or services necessitated thereby. Tenant covenants that
Tenant will not suffer or permit during the Term hereof any mechanics? or other
liens for work, labor, services or materials ordered by Tenant or for the cost
of which Tenant may be in any way obligated, to attach to the Premises or to the
Building Complex and that whenever and so often as any such liens shall attach
or claims therefor shall be filed, Tenant shall, within twenty (20) days after
Tenant has notice of the claim for lien, procure the discharge thereof by
payment or by giving security or in such other manner as is or may be required
or permitted by law or which shall otherwise satisfy Landlord and or Landlord's
mortgagee. Tenant hereby indemnifies and saves Landlord harmless from and
against any and all loss, liability, damage, penalty, cost, expense or fee
(including, without limitation, court costs and reasonable attorneys' fees)
incurred by or asserted against Landlord as a result of the existence of any
lien against the Building, Premises or the Property. Tenant shall, at its own
cost and expense, take out or cause to be taken out any additional insurance or
bonds reasonably required by Landlord to protect Landlord's, the mortgagee's and
Tenant's interest during the period of alteration.
19
At least five (5) days prior to the commencement of any work permitted to
be done by persons requested by Tenant on the Premises, Tenant shall notify
Landlord of the proposed work and the names and addresses of the persons
supplying labor and materials for the proposed work so that Landlord may avail
itself of the provisions of statutes such as Section 38-22-105(2) of the
Colorado Revised Statutes (1973). During any such work on the Premises and
subject to Article 13 hereof, Landlord, or its representatives, shall have the
right to go upon and inspect the 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) C.R.S. (1973) or to take any further action which
Landlord may deem to be proper for the protection of Landlord's interest in the
Premises.
15.2 Alterations by Landlord. Landlord hereby reserves the right at any
time and from time to time and without any liability to Tenant for any claims,
to make changes in, additions to, subtractions from or rearrangements of the
Building Complex, including, without limitation, all improvements at any time
thereof, all entrances and exits thereto, and to grant, modify and terminate
easements or other agreements pertaining to the Building Complex, including, but
not limited to, the entrance foyer and lobby, and the common corridors and to
make changes or additions to the pipes, conduits, ducts, utilities and other
building services in the Premises which serve other portions of the Building,
provided further that prior to the Commencement Date, Landlord may alter the
Premises to the extent found necessary by Landlord to accommodate changes in
construction design or facilities including major alterations but the Premises,
as altered, shall be in all material aspects comparable to the Premises as
defined herein. Any expense by Landlord of the above rights including entry upon
the Premises shall be without liability to Tenant, including any claims of
interference and without affecting this Lease or the obligations of Tenant under
this Lease. Landlord shall use reasonable effort to avoid interference with
Tenant's business in the Premises.
ARTICLE 16
SIGNS AND ADVERTISING
---------------------
Except as set forth below, Tenant shall not install, paint, display,
inscribe, place or affix any sign, picture, advertisements, notice, lettering or
direction on any part of the Building Complex or in the interior of the Premises
or other portion of the Building any of which would be visible from outside the
Premises. Landlord will prescribe a uniform pattern of identification signs for
tenants to be placed on the outside corridor wall which is near the door leading
into the Premises and other than such identification signs, Tenant shall not
install, paint, display, inscribe, place or affix, or otherwise attach, any
sign, picture, advertisement, notice, lettering or direction on the inside or
outside of the Premises for exterior view without the written consent of
Landlord which may be given or withheld in Landlord's sole discretion. Tenant,
at Tenant's sole cost and expense or paid out of the Tenant Improvement
Allowance, shall have building standard suite and directory signage.
20
ARTICLE 17
SUBORDINATION TO MORTGAGES AND DEEDS OF TRUST
---------------------------------------------
This Lease and the rights of Tenant hereunder shall be and are hereby made
subject and subordinate to the lien of any mortgages or deeds of trust now or
hereafter existing against the Building Complex and to all renewals,
modifications, consolidations, replacements and extensions thereof and to all
advances made, or hereafter to be made, upon the security thereof. Although such
subordination shall be self-operating, Tenant, or its successors in interest,
shall upon Landlord's request, execute and deliver within ten (10) business days
any and all instruments desired by Landlord, subordinating, in the manner
reasonably requested by Landlord, this Lease to any such mortgage or deed of
trust. If Tenant fails to return the subordination documents within ten (10)
business days then all subordination documents at Landlord's option shall
irrevocably and conclusively be deemed affirmed and approved by Tenant and
Landlord may exercise any other right or remedy for Tenant's failure to execute
and return the subordination documents.
Should any mortgage or deed of trust affecting the Building Complex be
foreclosed, then:
(a) the liability of the mortgagee, beneficiary or purchaser at such
foreclosure sale or transfer in lieu of foreclosure shall exist only as to the
liability and obligations of Landlord accruing or arising after the date of such
transfer and only so long as such mortgagee, beneficiary or purchaser is the
owner of the Building Complex and such liability shall not continue or survive
after further transfer of ownership; and
(b) the liability for any security deposits or prepaid rents of the
mortgagee, beneficiary or purchaser at such foreclosure sale or transfer in lieu
of foreclosure sale shall exist only to the extent that the mortgagee,
beneficiary or purchaser actually received the security deposits or prepaid
rents and failed to apply such sums in accordance with the Lease or, if
applicable, failed to transfer or assign such sums to any subsequent purchaser
or transferee.
(c) Tenant shall be deemed to have attorned, as Tenant under this
Lease, to the purchaser at any foreclosure sale thereunder or transferee
pursuant to a deed in lieu of foreclosure, and this Lease shall continue in full
force and effect as a direct lease between and binding upon Tenant and such
purchaser or transferee.
As used in this Article 17 "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.
Landlord, at the written request of Tenant, agrees to request any future
mortgagee or beneficiary to enter into a non-disturbance agreement with Tenant,
in a form satisfactory to such mortgagee or beneficiary, stating that Tenant's
right to the continued use and possession of the Premises shall be under the
same terms and conditions as set forth in this Lease provided that at such time
Tenant is not in default of its obligations herein. However, notwithstanding
such request, Landlord makes no representations or warranties that such
non-disturbance agreement will be entered into by any beneficiary or mortgagee.
21
ARTICLE 18
ESTOPPEL CERTIFICATE/FINANCIAL INFORMATION
------------------------------------------
18.1 Estoppel Certificate. Tenant agrees that it will from time to time,
upon request by Landlord (for the benefit of Landlord and its designated
proposed mortgagee or purchaser), execute and deliver to Landlord within five
(5) days after demand therefor an estoppel certificate on Landlord's form (or
the form of any prospective mortgagee or purchaser) certifying, among other
items, that this Lease is unmodified and in full force and effect (or if there
have been modifications, that the same is in full force and effect as so
modified) and, to the best of Tenant's knowledge, there are no defaults under
the Lease or if so specifying such defaults. Failure to return the estoppel
certificate within the five (5) day period shall conclusively and irrevocably be
deemed an affirmation and approval of the estoppel certificate by Tenant and
Landlord may exercise any other right or remedy for Tenant's failure to properly
and/or timely execute and return the estoppel certificate.
18.2 Financial Information. Tenant shall, from time to time at reasonable
intervals upon Landlord's request, deliver to Landlord a copy of Tenant's most
recent audited financial statements, which audited financial statements shall be
prepared by Tenant or Tenant's accountant no less often than once per year in
accordance with GAAP, any interim financial statements which have been prepared
after the date of the most current audited financial statement, and 10Q's or
10K's when issued, if any.
ARTICLE 19
QUIET ENJOYMENT
---------------
Subject to the terms and provisions of this Lease, Landlord covenants and
agrees that Tenant shall peaceably and quietly have possession of the Premises
during the term hereof, without hindrance by Landlord or those claiming by or
through Landlord. Landlord shall not be liable for any interference by other
tenants or third parties nor shall this Lease or Tenant's obligations hereunder
be affected thereby.
ARTICLE 20
FIXTURES
--------
Any or all installations, alterations, additions, partitions and fixtures
other than Tenant's trade fixtures in or upon the Premises, whether placed there
by Tenant or Landlord, shall become the property of Landlord, without
compensation therefor to Tenant, upon expiration or earlier termination of the
Lease. Notwithstanding anything herein contained, Landlord shall be under no
obligation to repair, maintain or insure such installations, alterations,
additions, partitions and fixtures or anything in the nature of a leasehold
improvement made or installed by or on behalf of Tenant. Landlord may elect that
any or all installations made or installed by or on behalf of Tenant be removed
at the end of the Lease Term and, if Landlord so elects, it shall be Tenant's
obligation to restore the Premises to the condition it was in previous to such
alterations, installations, partitions and fixtures, on or before the
termination of this Lease. Such removal and restoration shall be at the sole
expense of Tenant. Notwithstanding anything in this Lease to the contrary, to
the extent that Landlord's consent to any such installation as set forth above
is required, Landlord, if it gives such consent, will, if requested in writing
by Tenant, notify Tenant as to whether removal of such installation will be
required.
22
ARTICLE 21
DAMAGE OR DESTRUCTION
---------------------
21.1 Casualty. In the event that the Building should be totally destroyed
by fire, tornado or other casualty, or should be so damaged that rebuilding or
repairs cannot be completed in Landlord's reasonable estimation within one
hundred eighty (180) days after the date of such damage, Landlord may, at its
option, terminate this Lease in which event the rent shall be abated during the
unexpired portion of this Lease effective with the date of such damage, or
Landlord may proceed to rebuild the Building and the Premises. In the event the
Building should be damaged by fire, tornado or other casualty, but only to such
extent that rebuilding or repairs in Landlord's reasonable estimation can be
completed within one hundred eighty (180) days after the date of such damage, or
if the damage cannot be repaired within such time frame but Landlord does not
elect to terminate this Lease, in either such event, Landlord shall, within
ninety (90) days after the date of such damage commence to rebuild or repair the
Building and shall proceed with reasonable diligence to restore the Building to
substantially the same condition in which it was immediately prior to the
happening of the casualty, except that Landlord shall not be required to
rebuild, repair or replace any part of the partitions, fixtures and other
improvements which may have been placed by Tenant or other tenants within the
Building. In the event any mortgagee under a deed of trust, security agreement
or mortgage on the Building should require that the insurance proceeds be used
to retire the mortgage debt, Landlord shall have no obligation to rebuild and if
Landlord so elects, this Lease shall terminate upon notice to Tenant. Unless
otherwise provided in this Lease, any insurance which may be carried by Landlord
or Tenant against loss or damage to the Building or to the Premises shall be for
the sole benefit of the party carrying such insurance and under its sole
control.
21.2 Casualty Caused by Tenant. If fire or other casualty causing injury
to the Premises or other parts of the Building shall have been caused by the
negligence or willful misconduct of Tenant, its agents, servants or employees,
or by any other persons entering the Building under express or implied
invitation of Tenant, such injury may be repaired by Landlord at the expense of
Tenant.
ARTICLE 22
CONDEMNATION
------------
22.1 Eminent Domain. If five percent (5%) or more of the Rentable Area of the
Premises is taken by eminent domain, or by conveyance in lieu thereof, and if
such taking interferes substantially with Tenant's use of the Premises, then
this Lease, at the option of either party evidenced by notice to the other given
within thirty (30) days from such taking or conveyance, shall forthwith cease
and terminate entirely. In the event of such termination of this Lease, then
rental shall be due and payable to the actual date of such termination. If less
than five percent (5%) of the Rentable Area of the Premises is taken, or if five
percent (5%) or more of the Premises is taken and neither party terminates this
Lease, this Lease shall cease and terminate as to that portion of the Premises
so taken as of the date of such taking, and the rental thereafter payable under
this Lease shall be abated pro rata from the date of such taking in an amount by
which that portion of the Rentable Area of the Premises so taken shall bear to
the Rentable Area of the Premises prior to such taking. If any part of the
Building Complex shall be taken by eminent domain, or by conveyance in lieu
thereof, and if such taking substantially interferes with Landlord's ownership
or use of the Building Complex in Landlord's reasonable determination, Landlord,
at its option, may upon thirty (30) days' notice to Tenant, terminate this Lease
as of the date of such taking.
23
22.2 Damages. All compensation awarded for any taking (or the proceeds of
private sale in lieu thereof) of the Premises or Building Complex shall be the
property of Landlord and Tenant hereby assigns its interest in any such award to
Landlord; provided, however, Landlord shall have no interest in any award made
to Tenant for the taking of Tenant's fixtures and other personal property or
moving expenses if a separate award for such items is made to Tenant.
22.3 Restoration. If both Landlord and Tenant elect not to terminate this
Lease, Tenant shall remain in that portion of the Premises which shall not have
been appropriated or taken as herein provided, and Landlord agrees, at
Landlord's sole cost and expense (to the extent of proceeds received), to, as
soon as reasonably possible, restore the remaining portion of the Premises to a
complete unit of like quality and character as existed prior to such
appropriation or taking.
ARTICLE 23
LOSS AND DAMAGE AND DELAY
-------------------------
23.1 Loss and Damage. Landlord shall not be liable or responsible in any
way for:
(a) any death or injury arising from or out of any occurrence in,
upon or at the Building Complex or for damage to property of Tenant or others
located on the Premises, nor shall it be responsible in any event for damage to
any property of Tenant or others from any cause whatsoever, unless such damage,
loss, injury or death results from the intentional misconduct or gross or sole
negligence of Landlord, its agents or employees. Without limiting the generality
of the foregoing, Landlord shall not be liable for any injury or damage to
persons or property resulting from fire, explosion, falling plaster, steam, gas,
electricity, water, rain, snow or leaks from any part of the Premises or from
the pipes, appliances, plumbing works, roof, street, or subsurface of any floor
or ceiling or from any other place or because of dampness or climatic conditions
from any other cause of whatsoever kind. Landlord shall not be liable for any
damage whatsoever caused solely by any other tenant or persons in or about the
Building Complex, or by an occupant of adjacent property thereto, or the public,
or construction of any private, public or quasi-public work. All property of
Tenant kept or stored on the Premises shall be kept or stored at the risk of
Tenant only and Tenant shall indemnify Landlord in the event of any claims
arising out of damages to the same, including any subrogation claim by Tenant's
insurers;
(b) any act or omission (including theft, malfeasance or negligence)
on the part of any agent, contractor or person from time to time employed by
Landlord to perform janitorial services or security services, or repairs or
maintenance services, in or about the Premises or the Building; or
24
(c) loss or damage, however caused, to money, securities, negotiable
instruments, papers or other valuables of Tenant.
23.2 Delays. Whenever and to the extent that Landlord shall be unable to
fulfill, or shall be delayed or restricted in the fulfillment of any obligation
hereunder in respect to the supply of or provision for, any service or utility
or the doing of any work or the making of any repairs by reason of being unable
to obtain the material, goods, equipment, service, utility or labor required to
enable it to fulfill such obligation or by reason of any statute, law or any
regulation or order passed or made pursuant thereto or by reason of the order or
direction of any administrator, controller or board, or any governmental
department or officer or other authority, or by reason of not being able to
obtain any permission or authority required thereby, or by reason of any other
cause beyond Landlord's control, whether of the foregoing character or not,
Landlord shall be entitled to extend the time for fulfillment of such obligation
by a time equal to the duration of such delay or restriction, and Tenant shall
not be entitled to compensation for any inconvenience, nuisance or discomfort
thereby occasioned nor shall its obligations under this Lease be affected
thereby; provided that Landlord shall use reasonable efforts in good faith to
minimize any delays or restrictions.
ARTICLE 24
DEFAULT AND REMEDIES
--------------------
24.1 Default by Tenant. The following events shall be deemed to be events
of default by Tenant under this Lease:
(a) Tenant shall fail to pay any installment of rent or any other
sum due to Landlord when due. Notwithstanding the above, Tenant shall not be
deemed in default if not more than twice during any calendar year it pays such
installment of rent or any other sum due Landlord within five (5) days of
receipt of written notice of nonpayment. After delivery of the two notices as
set forth above, Landlord shall give no other notices of nonpayment.
(b) Tenant shall fail to comply with any term, provision or covenant
of this Lease, other than payment of rent or other sums due to Landlord, and
shall not cure such failure within thirty (30) days after written notice thereof
to Tenant, provided, however that if such default cannot reasonably be cured
within such thirty (30) day period, Tenant shall not be deemed in default if it
has commenced to cure, is diligently prosecuting same to completion, provides
Landlord with reasonably satisfactory evidence of same and the cure period does
not exceed ninety (90) days from the date such cure was timely commenced.
(c) Tenant shall die, cease to exist as a corporation or partnership
or be otherwise dissolved or liquidated or become insolvent, or shall make a
transfer in fraud of creditors, or shall make an assignment for the benefit of
creditors or is otherwise unable to pay its debts as they come due.
(d) Tenant shall file a petition under any section or chapter of the
national bankruptcy act as amended or under any similar law or statute of the
United States or any state thereof, or have a petition filed or a request for a
receiver; or Tenant shall be adjudged bankrupt or insolvent in proceedings filed
against Tenant.
25
(e) A receiver or trustee shall be appointed for all of the Premises
or for all or substantially all of the assets of Tenant.
(f) Tenant shall abandon or vacate any portion of the Premises, in
whole or in part.
(g) Tenant assigns or sublets in violation of the provisions of this
Lease.
(h) Tenant fails to deliver the instruments pursuant to Articles 17
and 18 hereof, time being of the essence.
24.2 Remedies of Landlord. Upon the occurrence of any such events of
default, Landlord shall have the option to pursue any one or more of the
following remedies without any notice or demand whatsoever:
(a) Terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may,
without prejudice to any other remedy which it may have for possession or
arrearages in rent, enter upon and take possession of the Premises and expel or
remove Tenant and any other person who may be occupying such Premises or any
part thereof, by force if necessary, without being liable for prosecution of any
claim of damages therefor.
(b) Without terminating the Lease, enter upon and take possession of
the Premises and expel or remove Tenant and any other person who may be
occupying such Premises or any part thereof, by force if necessary, without
being liable for prosecution or any claim for damages therefor, and relet the
Premises and receive the rent therefor.
(c) Enter upon the Premises, by force if necessary, without being
liable for prosecution or any claim for damages therefor, and do whatever Tenant
is obligated to do under the terms of this Lease; and Tenant agrees to reimburse
Landlord on demand for any expenses which Landlord may incur in thus effecting
compliance with Tenant's obligations under this Lease, and Tenant further agrees
that Landlord shall not be liable for any damages resulting to Tenant from such
action, whether caused by the negligence of Landlord or otherwise.
(d) Alter all locks and other security devices at the Premises
without terminating this Lease.
In the event Landlord may elect to regain possession of the Premises by
forcible detainer proceeding, Tenant hereby specifically waives, to the extent
permitted by law, any statutory notice which may be required prior to such
proceeding, and agrees that Landlord's execution of this Lease, is in part
consideration for this waiver.
Exercise by Landlord of any one or more of the remedies hereunder granted
or otherwise available shall not be deemed to be an acceptance of surrender of
the Premises by Tenant, whether by agreement or by operation of law, it being
understood that such surrender can be effected only by the written agreement of
Landlord and Tenant. No such alteration of locks or other security devices and
no removal or other exercise of dominion by Landlord over the property of Tenant
or others at the Premises shall be deemed unauthorized or constitute a
conversion, Tenant hereby consenting, after any event of default, to the
aforesaid exercise of dominion over Tenant's property within the Premises. All
claims for damages by reason of such reentry and/or repossession and/or
alteration of locks or other security devices are hereby waived, as all claims
for damages by reason of any distress warrant, forcible detainer proceedings,
sequestration proceedings or other legal process, to the extent permitted by
law. Tenant agrees that any reentry by Landlord may be pursuant to judgment
obtained in forcible detainer proceedings or other legal proceedings or without
the necessity for any legal proceedings, as Landlord may elect, and Landlord
shall not be liable in trespass or otherwise.
26
In the event Landlord elects to terminate the Lease by reason of an event
of default then notwithstanding such termination, Tenant shall be liable for and
shall pay to Landlord, at the address specified for notice to Landlord herein,
the sum of all rental and other indebtedness accrued to date of such
termination, plus, as damages, an amount equal to the total rental hereunder for
the remaining portion of the Lease term (had such term not been terminated by
Landlord prior to the date of expiration as stated herein) less the reasonable
rental value for such remaining term (net of all reasonably estimated costs of
re-leasing for such remaining term).
In the event that Landlord elects to repossess the Premises without
terminating the Lease, then Tenant shall be liable for and shall pay to Landlord
at the address specified for notice to Landlord herein, all rental and other
indebtedness accrued to the date of such repossession, plus rent required to
paid by Tenant to Landlord during the remainder of the Lease term until the date
of expiration of the term as stated herein diminished by any net sums thereafter
received by Landlord through reletting the Premises during such period (after
deducting expenses incurred by Landlord as provided below). In no event shall
Tenant be entitled to any excess of any rental obtained by reletting over and
above the rental herein reserved. Actions to collect amounts due by Tenant to
Landlord under this subparagraph may be brought from time to time, on one or
more occasions, without the necessity of Landlord's waiting until expiration of
the Lease term.
In the event of any default or breach by Tenant, or threatened or
anticipatory breach or default, Tenant shall also be liable and shall pay to
Landlord, in addition to any sums provided to be paid above, brokers' fees
incurred by Landlord in connection with reletting the whole or any part of the
Premises; the costs of removing and storing Tenant's or other occupants'
property; the costs of repairing, altering, remodeling, or otherwise putting the
Premises into condition acceptable to a new tenant or tenants; and all
reasonable expenses incurred by Landlord in enforcing or defending Landlord's
rights and/or remedies, including reasonable attorneys' fees whether suit was
actually filed or not.
In the event of termination or repossession of the Premises for an event
of default, Landlord shall not have any obligation to relet or attempt to relet
the Premises or any portion thereof, or to collect rental after reletting; and
in the event of reletting, Landlord may relet the whole or any portion of the
Premises, or let the Premises as part of a larger premises, for any period to
any tenant and for any use or purpose.
If Tenant shall fail to make any payment or cure any default hereunder
within the time herein permitted, Landlord, without being under any obligation
to do so and without thereby waiving such default, may make such payment and/or
remedy such other default for the account of Tenant (and enter the Premises for
such purpose), and thereupon Tenant shall be obligated to, and hereby agrees to
pay Landlord upon demand all costs, expenses and disbursements, including
reasonable attorneys' fees incurred by Landlord in taking such remedial action.
27
Landlord is entitled to accept, receive in cash or deposit any payment
made by Tenant for any reason or purpose or in any amount whatsoever, and apply
the same at Landlord's option to any obligation of Tenant and the same shall not
constitute payment of any amount owed except that to which Landlord has applied
the same. No endorsement or statement on any check or letter of Tenant shall be
deemed an accord and satisfaction or recognized for any purpose whatsoever. The
acceptance of any such check or payment shall be without prejudice to Landlord's
rights to recover any and all amounts owed by Tenant hereunder and shall not be
deemed to cure any other default nor prejudice Landlord's rights to pursue any
other available remedy.
Landlord agrees to use reasonable efforts to mitigate its damages however
in no event shall Landlord be required to (i) lease space for less than market
rates applicable for comparable space in first-class Buildings in Broomfield,
Colorado, (ii) expend any sums or (iii) lease the Premises prior to any other
available space in the Building or any building owned by Landlord or an
affiliated entity of Landlord.
24.3 Landlord's Default. Landlord shall not be deemed in default hereunder
unless Tenant shall have given Landlord written notice of such default
specifying such default with particularity and Landlord shall thereupon have
thirty (30) days in which to cure any default unless such default cannot
reasonably be cured within such period wherein Landlord shall not be in default
if it commences to cure the default within the thirty (30) day period and
diligently pursues completion of same. In the event of any default, Tenant
agrees that its exclusive remedy shall be an action for damages. Tenant agrees
that it shall also give notice of default to any mortgagee and right to cure if
Landlord fails to cure within any applicable cure period, and if such mortgagee
commences to cure (which shall include for purposes hereof pursuing its remedies
against Landlord) then Landlord shall not be deemed in default hereof.
24.4 Personal Property Lien. Intentionally Deleted.
ARTICLE 25
HOLDING OVER
------------
If Tenant shall continue to occupy the Premises after the expiration of
this Lease with or without the consent of Landlord, and without any further
written agreement, Tenant shall be a tenant at Landlord's option from month to
month or from day to day at a monthly Base Rent equal to one hundred fifty
percent (150%) of the last full monthly Base Rent payment due hereunder pro rata
for any partial month, and subject to all of the additional rentals, terms and
conditions herein set out except as to expiration of the Lease Term. Such
holding over may be terminated by Landlord upon one (1) day notice. In the event
that Tenant fails to surrender the Premises upon termination or expiration of
this Lease or such holdover tenancy, then Tenant shall indemnify Landlord
against loss or liability resulting from any delay of Tenant in not surrendering
the Premises, including, but not limited to, any amounts required to be paid to
third parties who were to have occupied the Premises and any attorneys' fees
related thereto.
28
ARTICLE 26
NOTICE
------
26.1 Notice. Any notice, request, statement or other writing pursuant to
this Lease shall be deemed to have been given if sent by registered, certified
mail or recognized receipted overnight mail service, postage prepaid, return
receipt requested or delivered by hand to the party at the addresses set forth
below:
TENANT: Sovereign Companies, LLC
000 Xxxxxxxxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx
Attention: Xx Xxxxxxx
With copy to: Xxxx Xxxxxx, Esq.
000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
LANDLORD: AMBER DRIVE II, LLC
c/o Prime West Real Estate Development, Inc.
0000 Xxxxx Xxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
With copy to: XXXXXXXXXX HYATT & XXXXXX, P.C.
000 00xx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Lea Xxx Xxxxxxxx, Esq.
and such notice shall be deemed to have been received by Landlord or Tenant, as
the case may be, on the earlier of actual receipt or the second business day
after the date on which it shall have been so mailed.
26.2 Change of Address. Any party may, by notice to the other, from time to
time, designate another address, which notices mailed more than ten (10)
days
thereafter shall be addressed.
ARTICLE 27
SECURITY DEPOSIT
----------------
Tenant has deposited with Landlord the sum of Twenty One Thousand Seven
Hundred Ninety Nine and 55/100 Dollars ($21,799.55) as security for the
performance by Tenant of all of the terms, covenants, and conditions required to
be performed by it hereunder. Landlord has received such deposit and shall be
solely responsible for its return. Such sum shall be returned to Tenant by
Landlord after a reasonable period after the expiration of the Lease Term and
delivery of possession of the Premises to Landlord if, at such time, Tenant has
fully performed all such terms, covenants and conditions. If Tenant has not
received the security deposit or a portion thereof, as applicable, within sixty
(60) days after the expiration of the Lease Term and Tenant delivered possession
of the Premises to Landlord and fully performed all terms, covenants and
conditions set forth herein, Tenant may send written notice to Landlord at the
address set forth above in Article 26 requesting return of the security deposit.
Prior to the time when Tenant is entitled to the return of the security deposit,
Landlord shall be entitled to intermingle such deposit with its own funds and to
use same for such purposes as Landlord may determine. Tenant shall not be
entitled to any interest on the security deposit. In the event of default by
Tenant in performing any of its obligations under this Lease, Landlord may, in
addition to any other right or remedy available to Landlord hereunder, use,
apply, or retain all or any part of this security deposit for the payment of any
unpaid rent or for any other amount which Landlord may be required to expend by
reason of the default of Tenant, including any damages or deficiency in the
reletting of the Premises or any attorneys' fees associated therewith,
regardless of the whether the accrual of such damages or deficiency occurs
before or after an eviction. If a portion of the security deposit is used or
applied by Landlord during the term hereof, Tenant shall, upon ten (10) days'
written demand, deposit with Landlord an amount sufficient to restore the
security deposit to its original amount.
29
ARTICLE 28
MISCELLANEOUS PROVISIONS
------------------------
28.1 Captions. The captions used herein are for convenience only and do
not limit or amplify the provisions hereof. Whenever the singular is used the
same shall include the plural, and words of any gender shall include the other
gender.
28.2 Waiver. One or more waivers of any covenant, term or condition of
this Lease by either party shall not be construed as a waiver of a subsequent
breach of the same covenant, term or condition. The consent or approval by
either party shall not be construed as a waiver of a subsequent breach of the
same covenant, term or condition. The consent or approval by either party to or
of any act by the other party requiring such consent or approval shall not be
deemed to waive or render unnecessary consent to or approval of any subsequent
similar act.
28.3 Entire Agreement. This Lease contains the entire agreement between
the parties and no agreement shall be effective to change, modify or terminate
this Lease in whole or in part unless such agreement is in writing and duly
signed by the parties hereto.
28.4 Severability. The invalidity or unenforceability of any provision
hereof shall not affect or impair any other provision.
28.5 Modification. Should any mortgagee or beneficiary under a deed of
trust require a modification of this Lease, which modification will not bring
about any increased cost or expense to Tenant or will not in any way
substantially change the rights and obligations of Tenant hereunder, then and in
such event, Tenant agrees that this Lease may be so modified.
28.6 Governing Law. This Lease shall be governed by and construed pursuant
to the laws of the State of Colorado.
28.7 Successors and Assigns. The covenants and conditions herein contained
shall inure to and bind the respective heirs, permitted 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, except as otherwise specifically set forth in this Lease to
the contrary.
30
28.8 Authorization to Execute. The parties executing this Lease on behalf
of Tenant hereby covenant and warrant that (i) in the event Tenant hereunder
shall be a corporation, Tenant is a duly qualified corporation and all steps
have been taken prior to the date hereof to qualify Tenant to do business in the
State of Colorado; (ii) all franchise and corporate or other applicable taxes
have been paid to date, and all future forms, reports, fees and other documents
necessary to comply with applicable laws will be filed, Tenant is authorized to
perform its obligations under this Lease and the person executing this Lease is
duly authorized to do so on behalf of Tenant. 28.9 Approval of Documents.
Landlord's approval of Tenant's plans for work performed by Landlord or Tenant
in the Premises shall create no responsibility or liability on the part of
Landlord for their completeness, design, sufficiency, or compliance with any
laws, rules, or regulations of governmental agencies or authorities.
28.10 Prime Rate. As used herein, Prime Rate shall be the rate published
in the Midwestern Edition of The Wall Street Journal under "Money Rates." If for
any reason the prime rate is no longer published in The Wall Street Journal,
then Landlord shall select another financial publication and reasonably
equivalent announced rate as the "Prime Rate."
ARTICLE 29
SUBSTITUTION OF PREMISES
------------------------
Intentionally Deleted
ARTICLE 30
RECORDING
---------
Tenant agrees not to place this Lease of record unless requested to
execute a Memorandum of Lease by Landlord, which may, at Landlord's option, be
placed of record.
Any recording by Tenant without Landlord's prior written consent shall at
Landlord's option be deemed a default pursuant to Article 24 hereof and Landlord
shall have all of the rights and remedies set forth therein.
ARTICLE 31
REAL ESTATE BROKER
------------------
Tenant represents and warrants that Tenant has not dealt with any broker
in connection with this Lease, and that insofar as Tenant knows, no other broker
negotiated or participated in the negotiations of this Lease, or submitted or
showed the Premises, or is entitled to any commission in connection herewith
(except for Tenant, acting as its own broker, and Landlord's listing brokers
Xxxxxxxx Xxxx Company) and Tenant agrees to indemnify Landlord against any
liability arising from a breach of this representation and warranty including
reasonable attorneys' fees.
31
ARTICLE 32
RENT PREPAYMENT
---------------
Intentionally Deleted
ARTICLE 33
OTHER PROVISIONS
----------------
33.1 Right of First Offer. Landlord hereby grants to Tenant a one time
right of first offer ("Right of First Offer") to lease any space contiguous to
the Premises on the ninth floor of the Building ("Expansion Space") subject to
and in accordance with the following provisions:
(a) Prior to Landlord executing any lease with a bona fide third
party for such Expansion Space, Landlord shall deliver to Tenant a written
notice identifying proposed terms which Landlord is willing to accept for the
Expansion Space ("Offer Notice"). The Offer Notice shall set forth the date that
such proposed lease is to commence ("Expansion Space Commencement Date") the
rental rate, the dimensions of the Expansion space, the lease term and any
allowances or concessions. Notwithstanding the foregoing, if the Offer Notice is
provided by Landlord within the first twenty-four (24) months of the Lease Term
and Tenant accepts the Expansion Space, Tenant shall lease such space on the
same lease terms (including Base Rent) as applicable to the original Premises.
If, however, the Offer Notice is provided by Landlord subsequent to the
expiration of the first twenty-four (24) months of the Lease Term, then Tenant
shall lease such space in accordance with the terms set forth in the Offer
Notice.
(b) Tenant shall have five (5) business days from receipt of the
Offer Notice to either accept or reject the Expansion Space. If Tenant rejects
the Expansion Space or if Landlord has not received the written acceptance or
rejection of the Expansion Space from Tenant by 5:00 p.m. on the fifth (5th)
business day as set forth herein, time being of the essence, then this Right of
First Offer shall be deemed to have expired. Thereafter, Landlord shall have no
further obligation or liability to Tenant pertaining to the Expansion Space and
Landlord may enter into a lease with any tenant.
(c) If the Expansion Space is accepted by Tenant in accordance
herewith, this Lease shall be amended effective as of Expansion Space
Commencement Date to include the Expansion Space as a part of the Premises on
the same terms and conditions as this Lease except as expressly set forth in
subparagraph (a) above and none of the concessions, allowances, Extension
Options or Offers of First Refusal as set forth in this Lease shall be
applicable to the Expansion Space. Tenant's Pro Rata Share shall be amended to
incorporate the Expansion Space and Taxes and Operating Expenses shall be
equitably prorated for such calendar year for Tenant's Pro Rata Share as
amended.
(d) Tenant shall accept the Expansion Premises in its "AS IS"
condition, except as otherwise set forth in the Offer Notice.
(e) This Right of First Offer shall not be applicable unless there
are at least twelve (12) months remaining on the original Lease Term, unless
Tenant agrees to exercise the Option to Extend described in Section 33.2 below.
32
(f) This Right of First Offer is subject to any rights of tenants
under existing leases for space in the Building Complex in accordance with the
current terms of the existing leases, or tenants under leases in Premises for
which Tenant did not exercise this Right of First Offer
(g) This Right of First Offer shall be deemed void and of no further
force and effect if Tenant is in default hereof or if Tenant assigns this Lease
or sublets the Premises.
(h) Any information provided by Landlord regarding a proposed lease
is confidential and Tenant agrees that it shall be liable for all damages of
Landlord arising from or related to a breach of such confidentiality.
33.2 Option to Extend.
(a) Tenant shall have an option to extend the Lease Term ("Option to
Extend") for one (1) additional term consisting of five (5) years (the "Option
Term"). In order to exercise such Option to Extend, Tenant shall notify Landlord
in writing at least one hundred eighty (180), but not more than three hundred
sixty (360), days prior to the expiration of the respective lease term of its
election to exercise the Option to Extend, upon which time Landlord shall submit
in writing within thirty (30) days thereafter a proposal for the then current
Market Base Rental Rate (per rentable square foot per annum) for the Option
Term. Tenant shall have thirty (30) days from the receipt of said notice to (i)
accept the proposed Market Base Rental Rate in writing to Landlord, (ii) to
reject the Market Base Rental Rate and elect the appraisal process set forth
below, or (iii) elect not to extend. If Tenant fails to timely respond to
Landlord's notice of Market Base Rental Rate, Tenant will be deemed to have
elected the appraisal process as described in clause (ii) above. If Tenant
elects not to extend pursuant to clause (iii) above or fails to timely exercise
its Option to Extend, time being of the essence, the Option to Extend shall
automatically terminate and be of no further force and effect and this Lease
shall terminate upon expiration of the then Lease Term. Any such extension shall
be upon all of the terms, conditions and covenants of this Lease except as to
(A) the amount of Base Rent, which shall be determined as set forth herein, (B)
options to extend, options to expand, and rights of refusal, which shall not be
applicable, and (C) Tenant allowances or other concessions which shall not be
applicable to the extension term. As used herein, "Market Base Rental Rate"
shall mean the then Base Rental Rate for comparable first class multi-tenant
office buildings of comparable size, location and age in Interlocken Business
Park in Broomfield, Colorado, at such time, taking into account the following
factors: (i) rent per rentable square foot; (ii) operating expenses and real
estate tax payments; (iii) current rental escalators; and (iv) rental
concessions, if any, as applicable to market renewals of leases.
(b) If Tenant, by written notice delivered no later than ten (10)
days after the date Landlord notifies Tenant of the Market Base Rental Rate,
objects to the Market Base Rental Rate determined by Landlord and elects to
submit the rate determination to appraisal, then, within seven (7) days of the
date of Tenant's objection, each party shall appoint a non-affiliated certified
M.A.I. Appraiser that has at least five (5) years' full-time commercial
appraisal experience in the Broomfield, Colorado vicinity to determine the
Market Base Rental Rate, such process to be completed within twenty (20) days
after the date of the appointment of the last appraiser. If a party does not
appoint a qualified appraiser within five (5) days after the other party has
given notice of the name of its appraiser then the single appraiser shall be the
33
sole appraiser and shall set the Market Base Rental Rate. The appraisers
appointed by the parties shall meet promptly and attempt to set the Market Base
Rental Rate. If they are unable to agree on the Market Base Rental Rate within
twenty (20) days after the date the second appraiser has been appointed, they
shall elect a third appraiser meeting the qualifications stated in this
paragraph within seven (7) days after the last day the two (2) appraisers are to
set the Market Base Rental Rate. If the appraisers are unable to agree on the
third appraiser within said time frame, either of the parties to this Lease,
after giving five (5) days' prior written notice to the other party, may apply
to the then president of the real estate board of Denver, Colorado for the
selection of a third appraiser who meets the qualifications stated in this
Section, which selection shall be made within three (3) business days. All
determinations of Market Base Rental Rate shall be subject to the limitations on
Market Base Rental Rate set forth in the first paragraph of this Section. Each
of the parties shall pay for the appraiser appointed by it and shall bear
one-half of the cost of appointing the third appraiser and of paying the third
appraiser's fee. The third appraiser, however selected, shall be a person who
has not previously acted in any capacity for either party.
(c) Within twenty (20) days after the selection of the third
appraiser, the third appraiser shall determine the Market Base Rental Rate and
all three of the appraiser's Market Base Rental Rates shall be averaged
excluding any single Market Base Rental Rate which is either ten percent (10%)
higher or lower than the middle appraisal of Market Base Rental Rate and the
remaining appraisals shall then be averaged.
(d) If the Market Base Rental Rate is not established for the
extended term prior to its commencement, Tenant shall continue to pay the
applicable Base Rent required for the last full month of the immediately
preceding Lease Term until the appraisers have made their determination. The
Market Base Rental Rate in question, when finally determined by the appraisers,
shall be retroactive to the commencement of the Option Term, and the first Base
Rent payment becoming due at least thirty (30) days after the determination of
the applicable Market Base Rental Rate shall include the retroactive amounts of
monthly Base Rent installments accrued and unpaid. In no event may either
Landlord or Tenant elect not to extend the Lease based upon the Market Base
Rental Rate established in accordance herewith.
(e) The Option to Extend may not be exercised and the Lease shall
not be extended if Tenant is, at the time of exercise, in default which default
is not cured within any applicable cure periods or if this Lease has been sublet
or assigned. Furthermore, time is of the essence hereof, any failure of Tenant
to give any notice required hereunder within the required time period shall
render this option null and void.
33.3 Antenna. Tenant shall have the right at its own expense, throughout
the term of the Lease, provided it is not in default hereunder (beyond the
giving of applicable notice and the passage of applicable grace periods) to
install a satellite dish or antennas on the roof of the Building pursuant to and
in accordance with the Antenna License attached hereto as Exhibit F and
incorporated herein by this reference and subject to (i) the prior written
approval of the plans and specifications by Landlord (such approval not to be
unreasonably withheld, conditioned or delayed), (ii) approval of the Interlocken
Architectural Control Committee and (iii) Tenant obtaining all necessary permits
and complying with all applicable laws, ordinances and regulations pertaining
thereto.
34
33.4 Parking. Landlord represents that the Building Complex has been
constructed to provide, and Tenant is granted the non-exclusive right to use,
not less than four and two-tenths (4.2) parking spaces for every one thousand
(1000) square feet of Rentable Area of the Building inclusive of handicapped and
visitor parking, subject to requirements of any governmental entity and the
architectural control committee at no cost to Tenant during the Lease Term.
35
IN WITNESS WHEREOF, the parties hereto have executed this Lease this 25th
day of February, 2005.
LANDLORD:
AMBER DRIVE II, L.L.C., a Delaware
limited
liability company
By: AMBERJACK, LTD., an Arizona limited
partnership, its managing member
By: PRIME WEST DEVELOPMENT INC.,
Landlord's representative
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Title: Executive Vice President
TENANT:
SOVEREIGN COMPANIES, LLC, a Colorado
limited liability company
By: /s/ Xx Xxxxxxx
------------------------------
Name: Xx Xxxxxxx
------------------------------
Title: LLC Manager
------------------------------
STATE OF COLORADO )
) ss.
COUNTY OF Denver )
The foregoing instrument was acknowledged before me this 28 day of
February, 2005, by Xxxxxxx X. Xxxxxx, President of Prime West Development, Inc.,
as Landlord's representative for Amberjack, Ltd., an Arizona limited
partnership, managing member of Amber Drive II, L.L.C., a Delaware limited
liability company.
WITNESS my hand and official seal.
/s/ Xxxxx X. Xxxxx
--------------------------------------------
Notary Public
( S E A L ). My commission expires: 8/26/06
----------------------
STATE OF COLORADO )
) ss.
COUNTY OF Denver )
The foregoing instrument was acknowledged before me this 28th day of
February, 2005, by Xxxxx X. Xxxxx, Executive Vice President of Prime West
Development, Inc., as Landlord's representative for Amberjack, Ltd., an Arizona
limited partnership, managing member of Amber Drive II, L.L.C., a Delaware
limited liability company.
WITNESS my hand and official seal.
/s/ Xxxxx X. Xxxxx
--------------------------------------------
Notary Public
( S E A L ). My commission expires: 8/26/06
----------------------
STATE OF COLORADO )
) ss.
COUNTY OF Denver )
The foregoing instrument was acknowledged before me this 28th day of
February, 2005, by Xx Xxxxxxx, Manager of Sovereign Companies, LLC a Colorado
limited liability company.
WITNESS my hand and official seal.
Xxxxxx X. Xxxxx
--------------------------------------------
Notary Public
( S E A L ) My commission expires: 2/3/06
----------------------
EXHIBIT A
FLOOR PLAN
[GRAPHIC OMITTED]
A-1
EXHIBIT B
LEGAL DESCRIPTION
XXX 0,
XXXXXXXXXXX XXXXXX XX. 00,
ACCORDING TO THE PLAT RECORDED MAY 18, 1999 IN PLANFILE P-48 F-1 NOS. 10 AND
11,
COUNTY OF BROOMFIELD
STATE OF COLORADO
B-1
EXHIBIT C
WORK LETTER
This WORK LETTER ("Work Letter") is entered into as of the _28th_ day of
February, 2005, by and between AMBER DRIVE II, L.L.C., a Delaware limited
liability company ("Landlord"), and Sovereign Companies, LLC, a Colorado limited
liability company ("Tenant").
RECITALS:
A. Concurrently with the execution of this Work Letter, Landlord and Tenant have
entered into a lease ("Lease") covering certain premises more particularly
described in Exhibit A attached to the Lease ("Premises"). To the extent
applicable, the provisions of the Lease are incorporated herein by this
reference. Unless otherwise defined herein, all capitalized terms shall have the
meanings set forth in the Lease.
B. In order to induce Tenant to enter into the Lease and in consideration of the
mutual covenants hereinafter contained, Landlord and Tenant agree as follows:
AGREEMENTS:
1. TENANT IMPROVEMENTS. As used in the Lease and this Work Letter, the
term "Tenant Improvements" means those items of general tenant improvement
construction shown on the Construction Drawings (defined below), as such
improvements are more particularly described in Paragraph 5 below.
2. WORK SCHEDULE. Attached as Attachment 1 to this Work Letter is a
schedule ("Work Schedule") which sets forth a timetable of critical dates for
the planning and completion of the installation of the Tenant Improvements and
the Commencement Date of the Lease. The Work Schedule describes certain of the
critical items of work to be done or approval to be given by Landlord and Tenant
in connection with the completion of the Tenant Improvements. All plans and
drawings required by this Work Letter and all work performed pursuant thereto
are to be prepared and performed in accordance with the Work Schedule. Based
upon developments during construction of the Tenant Improvements, the parties
may modify the Work Schedule as appropriate to reflect changes to the Work
Schedule agreed to by the parties and changes to the Work Schedule resulting
from Tenant Delays, Force Majeure Delays and Landlord caused delays.
3. TENANT CONSTRUCTION REPRESENTATIVES.
(a) Landlord hereby appoints the following person(s) as Landlord's
representative ("Landlord's Representative") to act for Landlord in all matters
covered by this Work Letter: Xxxxx X. Xxxxx (Address: 0000 Xxxxx Xxxxxxxx, Xxxxx
000, Xxxxxx, Xxxxxxxx 00000, Phone: 000-000-0000, and Fax: 000-000-0000). Tenant
is entitled to rely on information and decisions of Landlord's Representative,
and the signature of Landlord's Representative on documents, Space Plans,
Construction Drawings, change orders, directives, etc., shall be conclusive
evidence of Landlord's approval.
C-1
(b) Tenant hereby appoints the following person(s) as Tenant's
representative ("Tenant's Representative") to act for Tenant in all matters
covered by this Work Letter: Xxxxx Xxxx (Address: 000 Xxxxxxxxxxx, 0xx Xx,
Broomfield, Colorado; Phone: (000) 000-0000, and Fax: (000) 000-0000). Landlord
is entitled to rely on information and decisions of Tenant's Representative, and
the signature of Tenant's Representative on documents, Space Plans, Construction
Drawings, change orders, directives, etc., shall be conclusive evidence of
Tenant's approval.
(c) All communications with respect to the matters covered by this
Work Letter are to be made to Landlord's Representative or Tenant's
Representative, as the case may be, in writing in compliance with the notice
provisions of the Lease. Either party may change its representative under this
Work Letter at any time by written notice to the other party in compliance with
the notice provisions of the Lease.
4. TENANT IMPROVEMENT PLANS.
(a) Preparation of Space Plans. Landlord has selected and hired, and
Tenant has approved, Gensler Architects ("Space Planner") to prepare the
architectural drawings for the Premises. Tenant acknowledges that, although
Landlord hired Space Planner, Landlord shall have no obligation or liability to
assure that the design of the Premises is satisfactory for Tenant and for
Tenant's use. Space Planner and Tenant shall "walk" the Premises in consultation
with Landlord and within the time frame established in the Work Schedule
(defined below), Tenant shall meet and consult with Space Planner in order for
Space Planner to prepare preliminary space plans for the Premises that are
acceptable to Tenant. Provided Tenant has timely met and consulted with Space
Planner and provided Space Planner with all information required by Space
Planner, Landlord agrees to cause the Space Planner to prepare the preliminary
space plans for the layout of Premises ("Space Plans") on or before the outside
date for preparation of the Space Plans set forth in the Work Schedule. The
Space Plans are to be sufficient to convey the architectural design of the
Premises and layout of the Tenant Improvements therein and are to be submitted
to Landlord and Tenant upon completion for Landlord's and Tenant's approval. If
either party disapproves any aspect of the Space Plans, each will advise the
other in writing of such disapproval and the reasons therefor in accordance with
the Work Schedule. Landlord will have until the outside date specified in the
Work Schedule to cause Space Planner to redesign the Space Plans incorporating
the revisions required and to obtain Landlord's and Tenant's final approval of
the Space Plans.
(b) Preparation of Construction Drawings. Based on the approved
Space Plans, Landlord will cause Space Planner to prepare complete architectural
plans, drawings and specifications and complete engineered, mechanical,
plumbing, structural design (if required) and electrical working drawings for
all of the Tenant Improvements for the Premises (collectively, the "Construction
Drawings"). Tenant agrees, at Tenant's expense, to use Landlord's consultants
and engineers for mechanical, electrical, plumbing and structural in connection
with all work to be performed in connection with the Construction Drawings. The
Construction Drawings are to be completed on or before the outside date for
completion of the Construction Drawings set forth in the Work Schedule. The
Construction Drawings will show: (i) the subdivision (including partitions and
walls), layout, lighting, finish and decoration work (including carpeting and
other floor coverings) for the Premises, (ii) all internal and external
C-2
communications and utility facilities which will require conduiting or other
improvements from the base Building shell work and/or within common areas; and
(iii) all other specifications for the Tenant Improvements. The Construction
Drawings will be submitted to Landlord and Tenant for signature to confirm that
they are consistent with the Space Plans. If Tenant or Landlord reasonably
disapprove any aspect of the Construction Drawings based on any inconsistency
with the Space Plans, the disapproving party agrees to advise the other in
writing of such disapproval and the reasons therefor within the time frame set
forth in the Work Schedule. Landlord will have until the outside date specified
in the Work Schedule to cause Space Planner to redesign the Construction
Drawings incorporating the revisions reasonably requested by Landlord and Tenant
and to obtain Landlord's and Tenant's final approval of the Construction
Drawings.
(c) Requirements of Tenant's Construction Drawings. The Construction
Drawings will include locations and complete dimensions, and the Tenant
Improvements, as shown on the Construction Drawings, will: (i) be compatible
with the Building shell and with the design, construction and equipment of the
Building; (ii) comply with all applicable laws, ordinances, rules and
regulations of governmental authorities having jurisdiction and all applicable
insurance regulations; (iii) not require Building service beyond the level
normally provided to other tenants in the Building and will not overload the
Building floors; and (iv) be of a nature and quality consistent with the overall
objectives of Landlord for the Building, as determined by Landlord in its
reasonable but subjective discretion.
(d) Submittal of Construction Drawings. Once approved by Landlord
and Tenant, as provided in the Work Schedule, Landlord will cause Prime West
Development, Inc. or such other contractor selected by Landlord to build out the
space (the "Contractor"), as applicable, to submit the Construction Drawings to
the appropriate governmental agencies for plan checking and the issuance of a
building permit. Landlord will have the right to review Space Planner's
submittal package prior to delivery to such governmental agencies. Space
Planner, with the approval of Landlord and Tenant, will make any changes to the
Construction Drawings which are requested by the applicable governmental
authorities to obtain the building permit. After approval of the Construction
Drawings no further changes may be made without the prior written approval of
both Landlord and Tenant, and then only after agreement by Tenant to pay in
advance any excess costs resulting from the design and/or construction of such
changes, if any. Tenant hereby acknowledges that any such changes will be
subject to the terms of Paragraph 8 below. Landlord shall have no obligation to
approve any further changes to the Construction Drawings or any amendment
thereof or supplement thereto.
(e) Changes to Shell of Building.
(i) If the Construction Drawings or any amendment thereof or
supplement thereto shall require changes in the Building, the increased cost of
the Building work caused by such changes will be paid for by Tenant in advance
as set forth herein, if such costs cause the total costs to exceed the Allowance
(as set forth herein).
(ii) In the event Tenant desires to use the elevator lobby
smoke control doors ("Control Doors") as the primary entrance to the Premises,
Tenant shall obtain the prior written consent of Landlord which shall be granted
or withheld in Landlord's sole and absolute discretion. In the event Landlord
grants its consent, Tenant hereby agrees that it shall (A) be solely responsible
C-3
for the operation and maintenance of the Control Doors; (B) Tenant shall install
the appropriate hardware on the Control Doors and Tenant hereby acknowledges
that it is the sole responsibility of Tenant to ensure that the Control Doors
have locking hardware; (C) upon expiration or earlier termination of this Lease,
Tenant shall restore the Control Doors to their original condition at Tenant's
sole cost and expense; and (D) Tenant shall assume all of the risk for the use
of the Control Doors. Tenant hereby acknowledges and agrees that the function of
the Control Doors is life safety as opposed to security. Tenant hereby
acknowledges and agrees it shall assume all risks of any kind or nature directly
associated with the altering the Control Doors, waives any claims against
Landlord which may arise as a result of using the Control Doors as a primary
entrance or altering the Control Doors, and shall indemnify Landlord for any
claims as specifically set forth in Section 14.1 of the Lease. If Landlord
grants its consent, such consent is not a representation or warranty of any kind
or nature including compliance with applicable building codes, or other
applicable laws, which shall be the sole responsibility of Tenant.
(f) Work Cost Estimate and Statement. Prior to the commencement of
construction of any of the Tenant Improvements shown on the Construction
Drawings, as provided in the Work Schedule, Landlord will require Contractor to
bid the Construction Drawings to three (3) subcontractors in each principal
trade for the construction of the Tenant Improvements, which bids shall include
any qualified subcontractors selected by Tenant and provided to Landlord in
writing in a timely manner. Based in part on the bids selected by Contractor,
Contractor shall prepare a written estimate of the cost to complete the Tenant
Improvement Work, which written estimate will be based on the Construction
Drawings provided to Contractor (which may or may not be a final version
thereof). Landlord shall take such estimate and prepare a report which includes
other costs of the work and fees such as space planning, architectural,
engineering, supervision, insurance, and other soft costs incurred in connection
therewith ("Work Cost Estimate"). Tenant will either approve the Work Cost
Estimate or disapprove specific items and submit to Landlord revisions to the
Construction Drawings to reflect deletions of and/or substitutions for such
disapproved items, and delays attributable to such changes shall be Tenant
Delays. Submission and approval of the Work Cost Estimate will proceed in
accordance with the Work Schedule. Upon Tenant's written approval of the Work
Cost Estimate (such approved Work Cost Estimate is referred to herein as the
"Work Cost Statement"), Landlord will have the right to cause Contractor to
purchase materials and to commence the construction of the items included in the
Work Cost Statement pursuant to Paragraph 6 hereof. If the total costs reflected
in the Work Cost Statement exceed the sum of the Allowance (defined below),
Tenant agrees to pay such excess without notice within five (5) days after
Tenant's approval of the Work Cost Estimate.
(g) Changes in Estimated Work Cost. Throughout the course of
construction, any differences between the cost of the Tenant Improvements ("Work
Cost") estimated in the Work Cost Statement and the actual Work Cost will be
determined by Landlord and appropriate adjustments and payments by Landlord or
Tenant, as the case may be, will be made within five (5) days thereafter without
notice. Landlord shall have no obligation to proceed until receipt of such
excess amounts, and delays in completion of the Tenant Improvements resulting
from such delay in payment by Tenant shall be Tenant Delays, as set forth in
Paragraph 8 below.
C-4
(h) Changes in Work Cost Estimate and Work Cost Statement. The Work
Cost Estimate and Work Cost Statement may be based upon a draft of the
Construction Drawings and changes to those documents may be required due to
modifications to the Construction Drawings required by the City, County, Fire
Department, Architectural Control Committee, or any other applicable
governmental authority or to obtain the required governmental or other necessary
approvals. In such event, the changes to the Work Cost related to such changes
shall be determined by Landlord. Landlord shall revise the Work Cost Estimate
and the Work Cost Statement accordingly and appropriate adjustments and payments
by Landlord or Tenant, as the case may be, will be made within five (5) days
thereafter without notice.
(i) Delays in the Plan Preparation and Submittal Process. Subject to
Force Majeure Delays and provided Landlord and its contractor and other agents
comply with the time frames set forth in the Work Schedule for Landlord's
actions, any failure of the parties to meet the outside dates set forth in the
Work Schedule for completion of the Space Plans and Construction Drawings,
submittal of Construction Drawings to the City and approval of the Work Cost
Estimate will constitute "Tenant Delays" under Paragraph 8 below.
(j) Final Measurement. The parties hereby agree that the estimated
measurement for the total Rentable Area of the Premises shall be determined by
Landlord's architect based upon the final Construction Drawings and that
Landlord's architect shall determine the actual area based upon the final
Construction Drawings.
5. PAYMENT FOR THE TENANT IMPROVEMENTS.
(a) Allowance. Landlord hereby grants to Tenant a tenant improvement
allowance of Thirty-Five and No/100 Dollars ($35.00) per rentable square foot of
the Premises (which based upon 13,730 rentable square feet equates to Four
Hundred Eighty Thousand Five Hundred Fifty and NO/100 Dollars ($480,550.00)
("Allowance").
(b) The Allowance is to be used only for:
(i) Payment of the cost of preparing the Space Plans and the
Construction Drawings, including mechanical, electrical, plumbing and structural
drawings and of all other aspects necessary to complete the Construction
Drawings.
(ii) The payment of plan check, permit and license fees relating
to construction of the Tenant Improvements.
(iii) Construction of the Tenant Improvements, including,
without limitation, the following:
(A) Installation within the Premises of all partitioning,
doors, floor coverings, ceilings, wall coverings and painting, millwork and
similar items;
(B) All electrical wiring, lighting fixtures, outlets and
switches, and other electrical work necessary for the Premises;
C-5
(C) The furnishing and installation of all duct work,
terminal boxes, diffusers, thermostats and accessories necessary for the
heating, ventilation and air conditioning systems within the Premises;
(D) Any additional improvements to the Premises required for
Tenant's use of the Premises including, but not limited to, odor control,
special heating, ventilation and air conditioning, noise or vibration control or
other special systems or improvements;
(E) All fire and life safety control systems such as fire
walls, sprinklers, fire alarms, smoke detectors, fire dampers, including piping,
wiring and accessories, necessary for the Premises;
(F) All plumbing, fixtures, pipes and accessories necessary
for the Premises;
(G) Testing and inspection costs;
(H) Fees for the Contractor will not exceed 6% of the total
construction costs, excluding fees and costs attributable to general conditions
associated with the construction of the Tenant Improvements;
(I) Fees payable to Landlord for construction
administration, which fee shall be equal to five percent (5%) of all costs
associated with construction of the Tenant Improvements; provided, however, that
such construction administration fee shall be waived if Prime West Development,
Inc. is the general contractor for the Tenant Improvement Work; and
(J) Components of Standard Tenant Improvements set forth on
Exhibit G attached to the Lease and incorporated therein by this ---------
reference.
There shall not be charged against the Allowance any amounts attributable
to improvements specifically set forth on Components of Site, Shell and Core as
set forth on Exhibit H attached to the Lease and incorporated herein by this
reference.
(c) Excess Costs. The cost of each item referenced in Paragraph 5(c)
above shall be charged against the Allowance. If the Work Cost Statement exceeds
the Allowance, Tenant agrees to deposit with Landlord such excess prior to the
commencement of construction within five (5) business days after Tenant's
approval of the Work Cost Statement. Landlord agrees to deposit such excess in
an interest bearing account, with any and all interest thereon being payable to
Tenant. In no event will the Allowance be used to pay for Tenant's furniture,
art, equipment, telephone systems or any other item of personal property which
is not affixed to the Premises. To the extent that the actual Work Cost exceeds
the sums deposited with Landlord (inclusive of the Allowance), then Tenant shall
pay such excess costs to Landlord within ten (10) business days of receipt of a
demand therefor together with a final accounting of such Work Costs. If the
actual excess Work Cost is less than the excess amount deposited with Landlord
then within ten (10) business days of completion of the final accounting of such
Work Costs, Landlord shall refund such excess to Tenant; however, in no event
shall Tenant be entitled to any remaining balance of the Allowance.
C-6
(d) Changes. If, after the Construction Drawings have been prepared
and the Work Cost Statement has been established, Tenant requires any changes or
substitutions to the Construction Drawings, any additional estimated costs
related thereto are to be paid by Tenant to Landlord prior to the commencement
of construction of the Tenant Improvements, but in no event later than five (5)
days after receipt of such estimate. Any changes to the Construction Drawings
will be approved by Landlord and Tenant in the manner set forth in Paragraph 4
above and will, if necessary, require the Work Cost Statement to be revised and
agreed upon between Landlord and Tenant in the manner set forth in Paragraph
4(f) above. Changes to the Construction Drawings which delay completion of the
Tenant Improvements will constitute "Tenant Delays" as provided in Paragraph 8
below.
(e) Government Cost Increases. If increases in the cost of the
Tenant Improvements as set forth in the Work Cost Statement are due to
requirements of any governmental agency, Tenant agrees to pay Landlord the
amount of such increases within five (5) days of Landlord's written notice.
(f) Unused Amounts. Any unused portion of the Allowance upon
completion of the Tenant Improvements will be not refunded to Tenant and will
not be available to Tenant as a credit against any obligations of Tenant under
the Lease and shall not be available to Tenant for future alterations after the
initial build out is complete, as such date of completion shall be set forth in
Section 2 of the Supplemental Agreement, a copy of which is attached hereto as
Exhibit D, unless Tenant has directly paid for excess costs as described in
Paragraphs 5(c), 5(d) or 5(e), in which case the unused Allowance may be applied
toward such excess cost amounts and paid to Tenant. Tenant hereby waives its
right to receive any unused portion of Allowance and Tenant hereby agrees that
it has no right to receive payment of any unused portion of the Allowance and
any such unused portion shall not be used as a credit against Base Rent,
Additional Rent or any other obligation of Tenant under the Lease.
6. CONSTRUCTION OF TENANT IMPROVEMENTS. Until Tenant approves the
Construction Drawings and Work Cost Statement, Landlord will be under no
obligation to cause Contractor to commence the construction of any of the Tenant
Improvements. Following Tenant's approval of the Work Cost Statement described
in Paragraph 4(f) above and upon Tenant's payment of the total amount by which
such Work Cost Statement exceeds the Allowance, if any, Landlord will cause
Contractor to commence and diligently proceed with the construction of the
Tenant Improvements, subject to Tenant Delays (as described in Paragraph 8
below) and Force Majeure Delays (as described in Paragraph 9 below).
7. COMMENCEMENT DATE AND SUBSTANTIAL COMPLETION.
(a) Commencement Date. No Tenant Delay of any kind shall cause an
extension of the Commencement Date as set forth in Section 2.1 of the Lease.
Except for the extension of the Commencement Date pursuant to Section 2.1 of the
Lease, Landlord shall have no obligation and will not be liable to Tenant for
any loss or damage resulting from any delay in the delivery of possession of the
Premises, including Landlord caused delays and Force Majeure Delays.
C-7
(b) Substantial Completion; Punch-List. The Tenant Improvements will
be deemed to be substantially completed ("Substantial Completion") when
Contractor notifies to Landlord and Tenant that: (i) Landlord is able to provide
Tenant with reasonable access to the Premises; (ii) Contractor has substantially
performed all of the Tenant Improvements required to be performed by Landlord
under this Work Letter, other than minor "punch-list" type items and adjustments
which do not materially interfere with Tenant's access to or use of the Premises
("Punch List Items"); and (iii) Contractor has obtained a temporary certificate
of occupancy or other required equivalent approval from the local governmental
authority permitting occupancy of the Premises. Notwithstanding the foregoing,
no items caused by Tenant shall be included as Punch List Items. Within five (5)
business days after receipt of such notice from Contractor, Tenant will conduct
a walk-through inspection of the Premises with Landlord, Landlord's
Representative, Tenant's Representative and Contractor, and the parties will
jointly prepare a written punch list ("Punch List") specifying those Punch List
Items which require completion, which items Landlord will cause Contractor to
thereafter diligently complete, subject to Force Majeure Delays. Tenant may not
take occupancy prior to preparation of the Punch List. If the Tenant takes
occupancy prior to completion of the Punch List, it shall take possession
subject to all terms and conditions of this Lease and in no event may Tenant
interfere with or delay the completion of the Punch List Items. For purposes of
this subsection (b), notice may be verbal.
8. TENANT DELAYS. For purposes of this Work Letter, "Tenant Delays" means
any delay in the completion of the Tenant Improvements resulting from any or all
of the following: (a) Tenant's failure to timely perform any of its obligations
pursuant to this Work Letter, including any failure to complete, on or before
the due date therefor, any action item which is Tenant's responsibility pursuant
to the Work Schedule delivered by Landlord to Tenant pursuant to this Work
Letter; (b) Tenant's changes to Space Plans or Construction Drawings after
Landlord's approval thereof; (c) any delay in the delivery, installation or
completion of Tenant's requested materials, finishes, or installations; (d) any
delay of Tenant in making payment to Landlord for Tenant's share of the Work
Cost; or (e) any other act, delay or failure to act caused directly or
indirectly by Tenant, Tenant's employees, agents, architects, contractors,
independent contractors, consultants and/or any other person performing or
required to perform services on behalf of Tenant. These items will only amount
to Tenant Delays if such events actually delay the Commencement Date of this
Lease. Landlord agrees to use reasonable efforts to notify Tenant of Tenant
Delays of which Landlord has actual knowledge.
9. FORCE MAJEURE DELAYS. For purposes of this Work Letter, "Force Majeure
Delays" means any actual delay in the construction of the Tenant Improvements
(other than Tenant Delays) resulting from events beyond the reasonable control
of Landlord, including but not limited to, delays caused or contributed to by
governmental or quasi-governmental entities, lenders, and acts of God.
10. TENANT APPROVALS. Anything submitted to Landlord by Tenant or Tenant's
Representative shall be deemed to have the prior approval of Tenant.
Furthermore, anything submitted to Tenant or Tenant's Representative for
approval which is not disapproved within five (5) business days of receipt of
the submission shall be deemed approved in all respects. The five (5) business
day response period does not extend the dates set forth in the Work Schedule for
such approvals, unless the Work Schedule allows additional time.
C-8
11. LANDLORD APPROVALS. Anything submitted to Landlord or Landlord's
Representative for approval which is not disapproved within five (5) business
days is deemed approved in all respects. The five (5) business day response
period does not extend the dates set forth in the Work Schedule for such
approvals, unless the Work Schedule allows additional time. Any approval by
Landlord is for its sole benefit.
IN WITNESS WHEREOF, the undersigned Landlord and Tenant have caused this
Work Letter to be duly executed by their duly authorized representatives as of
the date of the Lease.
LANDLORD:
AMBER DRIVE II, L.L.C., a Delaware
limited liability company
By: AMBERJACK, LTD., an Arizona limited
partnership, its managing member
By: PRIME WEST DEVELOPMENT INC.,
Landlord's representative
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Title: Executive Vice President
TENANT:
SOVEREIGN COMPANIES, LLC, a Colorado
limited liability company
By: /s/ Xx Xxxxxxx
------------------------------
Name: Xx Xxxxxxx
Title: LLC Manaager
------------------------------
C-9
[GRAPHIC OMITTED]
C-10
