1
Exhibit 10.9
LEASE AGREEMENT
between
▇▇▇▇▇▇▇ Investment Group, LLC
as Landlord
and
ILX Lightwave,
as Tenant
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Boulder, Colorado
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TABLE OF CONTENTS
1. BASIC LEASE DEFINITIONS, EXHIBITS AND ADDITIONAL DEFINITIONS...................................1
2. GRANT OF LEASE.................................................................................3
3. RENT...........................................................................................4
4. PERMITTED USE AND OCCUPANCY....................................................................5
5. UTILITIES, HVAC AND SECURITY...................................................................6
6. REPAIRS........................................................................................7
7. ALTERATION AND IMPROVEMENTS....................................................................7
8. LIENS..........................................................................................8
9. INSURANCE......................................................................................8
10. DAMAGE OR DESTRUCTION..........................................................................9
11. WAIVERS AND INDEMNITIES.......................................................................10
12. CONDEMNATION..................................................................................10
13. ASSIGNMENT AND SUBLETTING.....................................................................11
14. PERSONAL PROPERTY.............................................................................12
15. END OF TERM...................................................................................12
16. ESTOPPEL CERTIFICATES.........................................................................13
17. TRANSFERS OF LANDLORD'S INTEREST..............................................................13
18. RULES AND REGULATIONS.........................................................................14
19. TENANT'S DEFAULT AND LANDLORD'S REMEDIES......................................................14
20. LANDLORD'S DEFAULT AND TENANT'S REMEDIES......................................................16
21. SECURITY DEPOSIT..............................................................................17
22. BROKERS.......................................................................................17
23. LIMITATIONS ON LANDLORD'S LIABILITY...........................................................17
24. NOTICES.......................................................................................17
25. MISCELLANEOUS.................................................................................17
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LEASE AGREEMENT
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
THIS LEASE AGREEMENT (this "Lease") is entered into as of the Date,
and by and between the Landlord and Tenant, identified in Section 1.1 below.
1 BASIC LEASE DEFINITIONS, EXHIBITS AND ADDITIONAL DEFINITIONS.
1.1 Basic Lease Definitions. IN THIS LEASE, THE FOLLOWING DEFINED
TERMS HAVE THE MEANINGS INDICATED:
(a) "Date" means September 18, 2000.
(b) "Landlord" means ▇▇▇▇▇▇▇ Investment Group, LLC, a Colorado limited
liability company.
(c) "Tenant" means ILX Lightwave, a Minnesota corporation.
(d) "Property" means ▇▇▇ ▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ of Boulder, State of Colorado, located at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
(e) "Premises" means the Property and the Building and all other
improvements located on the Property.
(f) "Building" means the building and other related improvements
located on the Property. The Building contains 36,496 square
feet of measured area.
(g) "Permitted Use" means any use permitted under applicable
Laws and the Declaration, and for no other use or purpose.
(h) "Commencement Date" is defined in the Work Letter attached
to this Lease as Exhibit C.
(i) "Term" means the duration of this Lease, which will be
approximately 10 years, beginning on the Commencement Date
and ending on the "Expiration Date" (as defined below),
unless terminated earlier or extended further as provided in
this Lease. The "Expiration Date" means (1) if the
Commencement Date is the first day of a month, the 10-year
anniversary of the day immediately preceding, the
Commencement Date; or (2) if the Commencement Date is not
the first day of a month, the 10-year anniversary of the
last day of the month in which the Commencement Date occurs.
The Term will also include any exercised renewal or
extension of this Lease.
(j) "Base Rent" means the Rent payable in each Lease Year
according to Section 3.1, as follows:
Base Rent Base Rent
Lease Year(s) Per Month Per Year
------------- --------- --------
Lease Year 1 $38,777.00 $465,324.00
Lease Year 2 $40,134.20 $481,610.34
Lease Year 3 $41,538.89 $498,466.70
Lease Year 4 $42,992.75 $515,913.04
Lease Year 5 $44,497.50 $533,969.99
Lease Year 6 $46,054.91 $552,658.94
Lease Year 7 $47,666.83 $572,002.01
Lease Year 8 $49,335.17 $592,022.08
Lease Year 9 $51,061.90 $612,742.85
Lease Year 10 $52,849.07 $634,188.85
(k) "Security Deposit" means $38,777.00.
(l) "Landlord's Address" means:
▇▇▇▇▇▇▇ Investment Group
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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(m) "Tenant's Address" means:
ILX Lightwave, a Minnesota corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(n) "Broker" means The Colorado Group, Inc., acting as a
transaction broker representing both Landlord and Tenant.
Landlord will pay Broker a commission in accordance with a
separate listing agreement with Broker.
(o) "Exhibits" means those exhibits listed in Section 25.15
below.
1.2 ADDITIONAL DEFINITIONS. In addition to those terms defined in
Section 1.1 and other sections of this Lease, the following
defined terms when used in this Lease have the meanings
indicated:
(a) "ADA" means the American with Disabilities Act, as amended
from time to time.
(b) "Additional Rent" means all amounts required to be paid by
Tenant under this Lease in addition to Base Rent, including,
without limitation, the costs of Taxes and Landlord's
premises Expenses.
(c) "Affiliates" means, with respect to any party, any persons
or entities that own or control, are owned or controlled by,
or are under common ownership or control with, such party
and such party's and each of such other person's or entity's
respective officers, directors, shareholders, partners,
venturers, members, managers, agents and employees. For
purposes of this definition, a party is "owned" by anyone
that owns more than 50% of the equity interests in such
party and a party is "controlled" by anyone that owns
sufficient voting interests to control the management
decisions of such party.
(d) "Landlord's Premises Expenses" means all costs (other than
those expressly excluded below) incurred or accrued by
Landlord during each calendar year for maintaining,
repairing and keeping the Premises (including the Building,
and the landscaping and parking areas of the Premises) in
good order and repair and as otherwise required pursuant to
Section 6.1 of this Lease, including, without limitation,
costs and expenses of insurance, repairs, maintenance.
Replacements, cleaning, snow removal, painting (including
painting of the exterior of the Building; the cost of such
complete exterior painting shall be amortized over the
useful life of such painting), resurfacing of any parking
areas (the cost of any substantial or complete resurfacing
shall be amortized over the useful life of such
resurfacing); the costs of all insurance deductibles paid by
Landlord; reasonable management fees calculated according to
any management agreement between Landlord and its managing
agent or property manager, if any; fees and expenses
(including reasonable attorneys' fees) incurred in
contesting the validity of any Laws that would cause an
increase in Landlord's Premises Expenses; costs of
replacements and improvements that are incurred by Landlord;
and costs of any capital improvements (depreciated over the
useful economic life of such improvements together with
interest, at the average Prime Rate in effect during each
such calendar year) by Landlord (1) for the purpose of
reducing Landlord's Premises Expenses, or (2) after the date
of this Lease and which are required under any Laws that
were not applicable to the Building at the time it was
constructed and which are not a result of the nature of
Tenant's use of the Premises (whether or not such Laws are
applicable to the Building as a result of Landlord's or any
tenant's status under such Laws, Landlord's or any tenant's
use, occupancy or alteration of any portion of the Building
or improvements made by or for any tenant in its premises).
Notwithstanding the foregoing, Landlord's Premises Expenses
will not include (1) mortgage principal or interest; (2)
leasing commissions; costs or expenses for which Landlord is
reimbursed by insurance proceeds; (4) legal fees incurred
for negotiating future leases of the Premises; (5) costs
directly and solely related to the maintenance and operation
of the entity that constitutes the Landlord, such as
accounting fees incurred solely for the purpose of reporting
Landlord's financial condition; and (6) the cost of any
capital improvements other than those referred to above.
(e) "Declaration" means any declaration of covenants or
reciprocal easement agreements recorded against the
Premises, as the same may be adopted, amended, supplemented,
or superseded from time to time.
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(f) "Encumbrance" means any ground lease, first mortgage, or
first deed of trust now or later encumbering the Premises
and all their renewals, modifications, supplements,
consolidations, and replacements.
(g) "Environmental Laws" means the Resource Conservation and
Recovery Act, 42 U.S.C. ss. 6901, et seq.; the Comprehensive
Environmental Response, Compensation and Liability Act, 42
U.S.C. ss. 9601, et seq. (including the so-called
"Superfund" amendments thereto); the Clean Water Act, 33
U.S.C. ss. 1251, et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. ss. 1801, et seq., the Toxic
Substances Control Act, 15 U.S.C. ss. 2601, et seq.; the
Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.
ss. 136, et seq.; the Atomic Energy Act of 1954, 42 U.S.C.
ss. 2014, et seq., and any other applicable Laws governing,
or pertaining to any hazardous substances, hazardous wastes,
chemicals or other materials, including, without limitation,
asbestos, polychlorinated biphenyls, radon, petroleum
products and any derivative thereof or any common law theory
based on nuisance or strict liability.
(h) "Hazardous Substance" means any substance, chemical or
material declared to be, or regulated as hazardous or toxic
under any Environmental Law or the presence of which may
give rise to liability under any Environmental Law.
(i) "Laws" means any and all present or future federal, state or
local laws, statutes, ordinances, rules, regulations or
orders of any and all Governmental or quasi-governmental
authorities having jurisdiction.
(j) "Lease Year" means each successive period of 12 calendar
months during the Term, ending on the same day and month
(but not year, except in the case of the last Lease Year) as
the day and month on which the Expiration Date will occur.
If the Commencement Date is not the first day of a month,
the first Lease Year will be greater than 12 months by the
number of days from the Commencement Date to the last day of
the month in which the Commencement Date occurs.
(k) "Leasehold Improvements" is defined in the Work Letter
attached to this Lease as Exhibit C.
(l) "Lender" means the ground lessor of any around lease, the
mortgagee of any mortgage or the beneficiary of any deed of
trust, that constitutes an Encumbrance.
(m) "Prime Rate" means the rate of interest announced from time
to time by The Chase Manhattan Bank, or any successor to it,
as its prime rate. If The Chase Manhattan Bank, or any
successor to it, ceases to announce a prime rate, Landlord
will designate a reasonably comparable financial institution
for purposes of determining the Prime Rate.
(n) "Rent" means the Base Rent, Additional Rent, and all other
amounts required to be paid by Tenant under this Lease.
(o) "Taxes" means the amount incurred by Landlord on an accrued
basis during the Term according to generally accepted
accounting principles for that portion of the following
items that is allocable to the Premises: all ad valorem real
and personal property taxes and assessments, special or
otherwise, levied upon or with respect to the Premises, the
personal property used in operating the Premises, and the
additional charges payable by Tenant as a tenant of the
Premises, and imposed by any taxing authority having,
jurisdiction, all taxes, levies and charges which are
assessed, levied or imposed in replacement of, or in
addition to, all or any part of ad valorem real or personal
property taxes or assessments as revenue sources, and which
in whole or in part are measured or calculated by or based
upon the Premises, the leasehold estate of Tenant, or the
rents and other charges payable by Tenant; and any
reasonable expenses incurred by Landlord in attempting, to
reduce or avoid an increase in Taxes, including, without
limitation, reasonable legal fees and costs. Taxes will not
include any net income taxes of Landlord. Tenant
acknowledges that Taxes may increase during the Term and
that if the Premises is currently subject to a Taxes
abatement program and such program ceases to benefit the
Premises during the Term, Taxes will increase.
2 GRANT OF LEASE.
2.1 DEMISE. Subject to the terms, covenants, conditions and
provisions of this Lease, Landlord leases to Tenant and Tenant
leases from Landlord the Premises for the Term to be used for the
Permitted Use.
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2.2 QUIET ENJOYMENT. Landlord covenants that during the Term Tenant
will have quiet and peaceable possession of the Premises, subject
to the terms, covenants, conditions and provisions of this Lease,
and Landlord will not disturb such possession except as expressly
provided in this Lease.
3 RENT.
3.1 BASE RENT. Commencing on the Commencement Date and then
throughout the Term, Tenant will pay Landlord Base Rent
according, to the following provisions. Base Rent during each
Lease Year (or portion of a Lease Year) will be payable in
monthly installments in the amount specified for such Lease Year
(or portion thereof) in Section 1.10), in advance, on or before
the first day of each and every month during the Term. However,
if the Term commences on other than the first day of a month or
ends on other than the last day of a month, Base Rent for such
month will be appropriately prorated based on the number of days
in such month. Tenant covenants to pay all Rent when due to
Landlord's Address, or to such other place of which Landlord
notifies Tenant from time to time, and to observe and perform all
of the terms, covenants and conditions applicable to Tenant in
this Lease. Tenant further agrees that the covenant to pay Rent
is an independent covenant, not subject to abatement, offset, or
deduction, except as may be provided in this Lease.
3.2 PAYMENT OF LANDLORD'S PREMISES EXPENSES AND TAXES. Commencing on
the Commencement Date and continuing for the duration of the
Term, Tenant agrees to pay Landlord, as Additional Rent, in the
manner provided below, Landlord's Premises Expenses and Taxes.
(a) Estimated Payments. Prior to or within 60 days after the
beginning, of each calendar year, Landlord will notify
Tenant of Landlord's estimate of Landlord's Premises
Expenses and Taxes for such calendar year. For calendar year
2000, Landlord estimates that Landlord's Premises Expenses
will be approximately $18,248.00, insurance will be
approximately $2,198.00 and that Taxes will be approximately
$36,496.00. On or before the first day of each month during
each calendar year, Tenant will pay to Landlord, in advance,
1/12 of the sum of such estimated amounts; provided that
until such notice is given with respect to the ensuing
calendar year, Tenant will continue to pay on the basis of
the prior calendar year's estimate until the month after the
month in which such notice is given. In the month Tenant
first pays based on Landlord's new estimate, Tenant will pay
to Landlord 1/12 of the difference between the new estimate
and the prior year's estimate for each month which has
elapsed since the beginning of the current calendar year. If
at any time or times it appears to Landlord that Landlord's
Premises Expenses or Taxes for the then-current calendar
year will vary from Landlord's estimate by more than 10%,
Landlord may, by notice to Tenant, revise its estimate for
such year, and subsequent payments by Tenant for such year
will be based upon the revised estimate.
(b) Annual Settlement. As soon as practicable after the close of
each calendar year, but in no event more than 90 days after
the close of each calendar year, Landlord will deliver to
Tenant its statement of Landlord's Premises Expenses and
Taxes for such calendar year. If, on the basis of such
statement, Tenant owes an amount that is less than the
estimated payments previously made by Tenant for such
calendar year, Landlord will either refund such excess
amount to Tenant or credit such excess amount against the
next Additional Rent payment(s), if any, due from Tenant to
Landlord. If, on the basis of such statement, Tenant owes an
amount that is more than the estimated payments previously
made by Tenant for such calendar year, Tenant "-ill pay the
deficiency to Landlord within 30 days after the delivery of
such statement. If this Lease commences on a day other than
the first day of a calendar year or terminates on a day
other than the last day of a calendar year, Landlord's
Premises Expenses and Taxes applicable to the calendar year
in which such commencement or termination occurs will be
prorated on the basis of the number of days within such
calendar year that are within the Term.
(c) Final Payment. Tenant's obligation to pay Landlord's
Premises Expenses and Taxes that accrue but are not paid for
periods prior to the expiration OR early termination of the
Term will survive such expiration or early termination.
Prior to or as soon as practicable after the expiration or
early termination of the Term, Landlord may submit an
invoice to Tenant stating Landlord's estimate of the amount
by which Landlord's Premises Expenses and Taxes through the
date of such expiration or early termination will exceed
Tenant's estimated payments for the calendar year in which
such expiration or termination has occurred or will occur.
Tenant will pay the amount of any such excess to Landlord
within 30 days after the date of Landlord's invoices.
3.3 TENANT'S TAXES. Tenant will pay, before delinquency, all taxes
assessed or levied upon its occupancy of the Premises, or upon
Tenant's leasehold improvements, trade fixtures, furnishings,
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equipment, or other personal property of Tenant located on the
Premises, and any other taxes (including, without limitation,
sales taxes and employee withholding taxes) which, if unpaid,
could become a lien or charge against any such property and are
not paid by Tenant as Taxes pursuant to Section 3.2. When
possible, Tenant will cause such leasehold improvements, trade
fixtures, furnishings, equipment, or other personal property to
be assessed and billed separately from the property of Landlord.
Tenant will reimburse Landlord upon demand for any and all such
taxes billed to and paid by Landlord if Landlord is charged such
taxes due to (a) the cost or value of Tenant's equipment,
furniture, fixtures and other personal property located in the
Premises; (b) upon or measured by Rent; (c) upon or with respect
to the possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises or
any portion of the Premises; and (d) upon this transaction or any
document to which Tenant is a party creating or transferring an
interest or an estate in the Premises. If it is not lawful for
Tenant to reimburse Landlord, the Base Rent payable to Landlord
under this Lease will be revised to yield to Landlord the same
net rental after the imposition of any such tax upon Landlord as
would have been payable to Landlord prior to the imposition of
any such tax.
3.4 TAX CONTESTS. Landlord agrees to use reasonable efforts to
contest Taxes in a manner similar to efforts being pursued by
landlords of similar industrial or flex space properties
containing similar tenants in the metropolitan area of the
Building provided, however, in the event Landlord reasonably
believes that the savings resulting from any such tax contest
would be less than the costs incurred in connection therewith,
Landlord will not be required to conduct any tax contest. Tenant
will not contest Taxes. Landlord will pay to Tenant, Tenant's
proportionate share of any refund in Taxes received by Landlord
for a calendar year for which Tenant paid Taxes hereunder, net of
Landlord's costs of obtaining such refund.
3.5 LATE PAYMENTS. To compensate Landlord for its additional cost of
processing late payments for any payment of Rent which is not
received within 7 days after it is due, Tenant will pay a late
charge of 1% of the late payment, but not less than $100 or more
than $1,000. In addition, all amounts payable under this Lease by
Tenant to Landlord, if not paid when due, will bear interest from
the due date until paid at the lesser of the highest interest
rate permitted by law or 5% in excess of the then-current Prime
Rate.
3.6 RIGHT TO ACCEPT PAYMENTS. No receipt by Landlord of an amount
less than Tenant's full amount due will be deemed to be other
than payment "on account," nor will any endorsement or statement
on any check or any accompanying letter effect or evidence an
accord and satisfaction. Landlord may accept such check or
payment without prejudice to Landlord's right to recover the
balance or pursue any right of Landlord. No payments by Tenant to
Landlord after the expiration or other termination of the Term,
or after the giving of any notice (other than a demand for
payment of money) by Landlord to Tenant, will reinstate, continue
or extend the Term or make ineffective any notice given to Tenant
prior to such payment. After notice or commencement of a suit, or
after final judgment granting Landlord possession of the
Premises, Landlord may receive and collect any sums of Rent due
under this Lease, and such receipt will not void any notice or in
any manner affect any pending suit or any judgment obtained.
4 PERMITTED USE AND OCCUPANCY.
4.1 PERMITTED USE. Tenant agrees to use and occupy the Premises only
for the Permitted Use and for no other purpose without the prior
written consent of Landlord, which written consent shall not be
unreasonably withheld or delayed.
4.2 COMPLIANCE.
(a) Use. Tenant agrees to use the Premises in a safe, careful
and proper manner, and to comply, at Tenant's expense, with
all Laws applicable to Tenant's use, occupancy or alteration
of the Premises and with any Laws that require any
alterations to the Building due to Tenant's status under
such Laws, including without limitation, the ADA. If due to
the nature or manner of any use or occupancy of the Premises
by Tenant, any improvements or alterations to the Premises
or Building are required to comply with any Laws, or with
requirements of Landlord's insurers, then Tenant will pay
all costs of the required improvements, alterations or
changes in services. Tenant will not keep anything on the
Premises for any purpose which increases the insurance
premium cost or invalidates any insurance policy carried on
the Premises by Landlord. Tenant will pay, as Rent and upon
demand of Landlord, any such
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increased premium cost due to Tenant's use or occupation of
the Premises. Tenant will not cause, maintain or permit any
nuisance or waste in or about the Premises. In addition,
except as expressly provided otherwise in the Lease, Tenant
will keep the Premises free of debris, and anything of a
dangerous, noxious, toxic or offensive nature or which could
create a fire hazard or undue vibration, heat, noise, fumes,
vapors or odors. If any item of equipment, building material
or other property brought into the Building by Tenant or on
Tenant's request causes a dangerous, noxious, toxic or
offensive effect (including an environmental effect) and in
Landlord's reasonable opinion such effect will not be
permanent but will only be temporary and is able to be
eliminated, then Tenant will not be required to remove such
item, provided that Tenant promptly and diligently causes
such effect to be eliminated. pays for all costs of
elimination and indemnifies Landlord against all liabilities
arising from such effect.
(b) Hazardous Materials. Landlord and Tenant agree that, during
the Term, each will comply with all Laws, including, without
limitation, all Environmental Laws, governing, and all
procedures established by Landlord for the use, abatement,
removal, storage, disposal or transport of any Hazardous
Substances and any required or permitted alteration, repair,
maintenance, restoration, removal or other work in or about
the Premises that involves or affects any Hazardous
Substances. Except for the lawful use of cleaning-agents
used in the course of regular janitorial service, no
Hazardous Substances will be stored, used, released,
produced, processed or disposed in, on or about, or
transported to or from, the Premises by Tenant or any of
Tenant's agents, employees, contractors or invitees, without
first obtaining Landlord's express written consent (any
Hazardous Substances which are stored, used, released,
produced, processed or disposed in, on or about, or
transported to or from, the Premises by any of such persons
or entities are called "Tenant's Hazardous Substances"). If
such approval is granted, any such use, storage or
production of the Hazardous Substances shall be done in
compliance with all Environmental Laws. Tenant, at its
expense, will take all action necessary to restore the
Building and Premises to the condition existing prior to the
introduction of Tenant's Hazardous Substances, whether such
action is required by any governmental authority in order to
comply with applicable Laws or by Landlord in order for
Landlord to make the same economic use of the Building, and
Premises as Landlord could have made prior to the
introduction of Tenant's Hazardous Substances. Such action
may include, without limitation, the investigation of the
environmental condition of the Building or Premises, the
preparation of remediation plans or feasibility studies and
the performance of cleanup, remedial, removal or restoration
work. Tenant will obtain Landlord's written approval before
undertaking any action required by this Section 4.2(b),
which approval will not be unreasonably withheld or delayed
so long, as the proposed actions will not have an avoidable
material and adverse effect on the Building. Each party will
indemnify and hold the other and the other's Affiliates
harmless from and against any and all claims, costs and
liabilities (including reasonable attorneys' fees) arising
out of or in connection with any breach by such party of its
covenants under this Section 4.2(b). The parties'
obligations under this Section 4.2(b) will survive the
expiration or early termination of the Term.
4.3 SIGNS AND DISPLAYS. Tenant will not place, cause or permit to be
placed and maintained on the exterior of the Premises any sign,
awning, lettering or other advertising matter, unless previously
approved by Landlord in Landlord's reasonable discretion.
Landlord agrees to allow Tenant, subject to Landlord's reasonable
approval, to apply for the maximum amount of signage allowable
under applicable Laws.
5 UTILITIES, HVAC AND SECURITY.
5.1 UTILITIES. Tenant will pay for all electricity, gas, water, sewer
or other utility service provided to the Premises from and after
the Commencement Date and will arrange with the providers of such
services for separate metering and direct billing to Tenant.
Neither Landlord nor its agents or employees will be liable to
Tenant or any of Tenant's employees, agents or anyone claiming
through or under Tenant, for any damages, injuries, losses,
expenses, claims, or causes of action,
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because of any interruption, curtailment or discontinuance of any
utility service nor shall any such interruption, curtailment or
discontinuance be deemed an eviction or disturbance of Tenant's
use or possession of the Premises or any part thereof, nor
relieve Tenant from full performance of Tenant's obligations
under this Lease; provided, however, that if any utility service
to the Premises shall become unavailable for a period in excess
of seventy-two (72) consecutive hours and such unavailability is
directly and proximately caused by the gross negligence or
intentional misconduct of Landlord, its agents, contractors or
employees, all Base Rent shall ▇▇▇▇▇ until utility service to the
Premises is restored.
5.2 HVAC. Tenant will pay the cost for all heating, air conditioning
and ventilation service provided to the Premises, including the
cost of maintenance, repair, and replacement of same, including,
without limitation, rooftop units. Tenant will maintain a
preventative maintenance contract on the HVAC units in the
Premises, which contract will provide for periodic maintenance in
accordance with the manufacturer's specifications, by a
contractor reasonably approved by Landlord. Tenant will deliver
to Landlord a copy of such maintenance contract on or before the
Commencement Date and each anniversary of the Commencement Date
during the Term. In the event Tenant fails to maintain such
preventative maintenance contract, Landlord, at its option, may
arrange for such a preventative maintenance contract for the HVAC
units; provided, however, Landlord has notified Tenant of such
failure of Tenant to comply with the maintenance requirements set
forth herein and Tenant has failed to cure such noncompliance
within 30 days from receipt by Tenant of Landlord's notice, in
which event the cost of such preventative HVAC maintenance will
be billed directly to Tenant and will be paid within 10 days of
receipt of invoice therefor. Landlord reserves the right to
obtain preventative maintenance contracts on all the HVAC units
on the Building, and to include the cost in Landlord's Premises
Expenses.
5.3 SECURITY. Tenant will be responsible for any security services to
the Premises, but Tenant will only use security services which
are reputable in the Boulder, Colorado market. In no event will
landlord be liable to Tenant, and Tenant hereby waives any claim
against Landlord and Landlord's Affiliates, for (a) any entry of
third parties onto the Premises or into the Building; (b) any
damage or injury to persons or property, or (c) any loss of
property in or about the Premises or the Building occurring as a
result of any unauthorized or criminal acts of third parties,
regardless of any action, inaction, failure, breakdown,
malfunction or insufficiency of any security services provided by
Landlord, unless such damage to the Premises was the result of
Landlord's gross negligence or intentional misconduct.
6 REPAIRS.
6.1 LANDLORD MAINTENANCE AND REPAIRS. Landlord will keep the exterior
supporting, walls, foundations, roof and down spouting of the
Building, and the parking areas, landscaping, and sidewalks on
the Premises in reasonable condition and in good repair, provided
that the costs of such maintenance and repairs will be included
as Landlord's Premises Expenses as provided in this Lease.
6.2 TENANT'S MAINTENANCE AND REPAIRS. Subject to the tenets of
Articles 4, 10, and 12, and Section 5.1, Tenant will, at
Tenant's own expense and at all times during the Term, maintain
the Building, all windows and doors in the Building, and Tenant's
furnishings, equipment, personal property, and trade fixtures in
the Building, and any mechanical, plumbing, electrical, heating,
ventilating, air conditioning, and the mechanical installations
serving the Building ("Equipment"), in good working order, clean
condition, and repair and in a condition that complies with all
applicable Laws, including, without limitation, the replacement
of the Equipment, fixtures and all broken glass (with a glass of
the same size and quality), at Tenant's expense. Tenant will also
be responsible for the cost of repairing all damage to the
Premises or Building (or any equipment or fixtures in or serving
the same) caused by Tenant or its subtenants, or an), of their
respective agents, employees, contractors, licensees or invitees.
All work done by Tenant or its contractors (which contractors
will be subject to Landlord's reasonable prior written approval)
is subject to Landlord's approval and must be done in a
first-class workmanlike manner using, only grades of materials at
least equal in quality to the materials being replaced and will
comply with all insurance requirements and all applicable Laws.
Tenant will not overload the electrical wiring and ventilation or
utilities serving the Building and will install at Tenant's sole
expense, after first obtaining Landlord's written approval, any
additional electrical wiring that may be required in connection
with Tenant's apparatus, equipment or fixtures. In the event that
any warranties exist from time to time during the Term that cover
and/or apply to any of the items required to be maintained and/or
repaired by
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Tenant hereunder, Landlord shall, upon the prior written notice
from Tenant, use reasonable efforts to assist Tenant in pursing
warranty claims for such items; provided, however, that Landlord
shall not be obligated to expend any cost or expense in pursuing,
such warranty claims. Nothing contained herein shall obligate
Landlord to make any repair or perform any maintenance which is
the responsibility of Tenant under this Section 6.2.
6.3 FAILURE TO MAINTAIN PREMISES. If Tenant fails to perform any of
its obligations under Section 6.2, then Landlord may perform such
obligations and Tenant will pay as Rent to Landlord the cost of
such performance, including an amount sufficient to reimburse
Landlord for overhead and supervision, within 10 days after the
date of Landlord's invoice therefor. For purposes of performing
such obligations, or to inspect the Building, Landlord may enter
the Building upon not less than 12 hours' prior notice to Tenant
(except in cases of actual or suspected emergency, in which case
no prior notice will be required) without liability to Tenant for
any loss or damage incurred as a result of such entry, provided
that Landlord will take reasonable steps in connection with such
entry to minimize any disruption to Tenant's business or Tenant's
use of the Premises.
6.4 NOTICE OF DAMAGE. Tenant will notify Landlord promptly after
Tenant learns of (a) any fire or other casualty on the Premises;
(b) any damage to or defect in the Building, including any
fixtures or equipment in or serving the same, which was Caused by
Tenant or its agents, employees, contractors or invitees, or for
the repair of which Landlord might be responsible; and (C) any
damage to or defect in any parts or appurtenances of the
Equipment located in the Premises.
7 ALTERATION AND IMPROVEMENTS. Tenant may, from time to time, at its own
expense make nonstructural changes, additions, and improvements to the
Premises (including the Building) to better adapt the same to its business,
provided that any such change, addition, or improvement exceeding
$15,000.00 in total value shall be approved by Landlord subject to the
terms and conditions described in Paragraphs 13 and 14 of Exhibit C
attached to this Lease. All changes, additions and improvements to the
Premises (including, the Building) (but excluding Tenant's trade fixtures),
whether temporary or permanent in character, made or paid for by Landlord
or Tenant will, without compensation to Tenant, become Landlord's property
upon installation. If at the time Landlord consents to their installation,
Landlord requests or approves the removal by Tenant of any such changes,
additions or improvements upon termination of this Lease, Tenant will
remove the same upon termination of this Lease as provided in Section 15.1.
All other changes, additions and improvements will remain Landlord's
property upon termination of this Lease and will be relinquished to
Landlord in good condition, ordinary wear and tear excepted.
8 LIENS. Tenant agrees to pay before delinquency all costs for work, services
or materials furnished to Tenant for the Premises, the nonpayment of which
could result in any lien against the Premises. Tenant will keep title to
the Premises free and clear of any such lien. Tenant will immediately
notify Landlord of the filing of any such lien or any pending claims or
proceedings relating to any such lien and will indemnify and hold Landlord
harmless from and against all loss, damages and expenses (including
reasonable attorneys' fees) suffered or incurred by Landlord as a result of
such lien, claims and proceedings. In case any such lien attaches, Tenant
agrees to cause it to be immediately released and removed of record
(failing which Landlord may do so at Tenant's sole expense), unless Tenant
has a good faith dispute as to such lien in which case Tenant may contest
such lien by appropriate proceedings so long as Tenant deposits with the
court or Landlord, whichever is required by applicable Laws, a bond or
other security in an amount reasonably acceptable to Landlord and any
Lender which may be used by Landlord to release such lien if Tenant's
contest is abandoned or is unsuccessful. If Landlord incurs any legal costs
in causing the removal of such lien, Tenant will pay all legal costs
incurred by Landlord, including, without limitation, Landlord's reasonable
attorneys' fees. Upon final determination of any permitted contest, Tenant
will immediately pay any judgment rendered and cause the lien to be
released.
9 INSURANCE.
9.1 LANDLORD'S INSURANCE.
(k) During the Term as part of Landlord's Premises Expenses,
Landlord will provide and keep in force the following,
insurance for its benefit and the benefit of any Lender:
(1) all-risk or fire insurance (including standard extended
coverage endorsement perils, leakage from fire protective
devices and other water damage relating to the Building (but
excluding Leasehold Improvements, Equipment, and Tenant's
documents, files, and work products),
(2) loss of rental income insurance or loss of insurable
gross profits; and
(3) such other insurance (including boiler, machinery,
earthquake, flood, and commercial general liability
insurance) as Landlord reasonably elects to obtain or any
Lender requires.
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(l) Insurance maintained by Landlord under this Section 9.1 will
be in amounts that Landlord from time to time reasonably
determines sufficient or any Lender requires; will be
subject to such deductibles and exclusions as Landlord
reasonably determines will, in the case of insurance under
Section 9.1(a)(1), permit the release of Tenant from certain
liability under Section I 1.1; and will otherwise be on such
terms and conditions as Landlord from time to time
reasonably determines sufficient.
9.2 TENANT'S INSURANCE. During the Term, Tenant will provide and keep
in force the following insurance:
(a) Commercial general liability insurance relating to Tenant's
business (carried on, in or from the Premises) and Tenant's
use and occupancy of the Premises, for personal and bodily
injury and death, and damage to others' property, with
limits of not less than $2,000,000 for any one accident or
occurrence;
(b) All risk or fire insurance (including standard extended
endorsement perils, leakage from fire protective devices and
other water damage) relating, to Leasehold Improvements,
Equipment, inventory and stock-in-trade on a full
replacement cost basis in amounts sufficient to prevent
Tenant from becoming a co-insurer and subject only to such
deductibles and exclusions as Landlord may reasonably
approve;
(c) If any boiler or machinery is operated in the Premises,
boiler and machinery insurance;
(d) If Tenant operates owned, hired or non-owned vehicles on the
Premises, automobile liability insurance with limits of not
less than $1,000,000 combined bodily injury and property
damage; and
(e) Workers' compensation and employer's liability insurance in
any amounts required to comply with applicable Laws.
Landlord, Landlord's property manager (if any), and any Lender
will be named as additional insureds in the policy described in
Section 9.2(a), which will include cross liability and
severability of interests clauses and will be on an 11
occurrence" (and not a "claims made") form. The policies
described in Sections 9.2(b) and (c) will permit the release of
Landlord from certain liability under Section 11.2. Tenant's
insurance policies will be written by insurers that are rated
A-IX or better by Best's Rating Guide and licensed in the State
of Colorado, will be written as primary policies, not
contributing with and not supplemental to the coverage that
Landlord may carry, and will otherwise be upon such terms and
conditions as Landlord from time to time reasonably requires,
including limits on Tenant's deductibles. Tenant will file with
Landlord, on or before the Commencement Date and at least 10 days
before the expiration date of expiring policies, such copies of
either current policies or certificates, or other proofs, as may
be reasonably required to establish Tenant's insurance coverage
in effect from time to time and payment of premiums. Tenant's
insurers will agree to give Landlord and all other additional
insureds at least 30 days' prior notice of any non-renewal, and
at least 10 days' prior notice of any cancellation, of any
insurance coverage required by this Section 9.2. If Tenant fails
to insure or pay premiums, or to file satisfactory proof as
required, Landlord may, upon a minimum of 24 hours' notice,
effect such insurance and Tenant will pay to Landlord, on demand,
the cost of any premiums paid by Landlord. Tenant shall be
entitled to maintain an umbrella policy covering all of Tenant's
assets.
10 DAMAGE OR DESTRUCTION.
10.1 TERMINATION OPTIONS. If fire or other casualty damages the
Building, Landlord will, promptly after learning of such damage.
Notify Tenant in writing of the time necessary to repair or
restore such damage, as estimated by Landlord's architect,
engineer or contractor (the "Repair Notice"). If the damage
renders the Premises or a material part of the Premises
untenantable and such Repair Notice states that repair or
restoration of all of such damage that was caused to the Premises
cannot be completed within 180 days from the date of such damage
(or within 30 days from the date of such damage if such damage
occurred within the last 12 months of the Term), then Tenant will
have the option to terminate this Lease. If such Repair Notice
states that repair or restoration of all of such damage that was
caused to the Building cannot be completed within 180 days from
the date of such damage, or if such damage occurred within the
last 12 months of the Term and such Repair Notice states that
repair or restoration of all such damage that was caused to the
Premises cannot be
12
completed within 30 days from the date of such damage, or if such
damage renders more than 50% of the rentable area of the Build in
untenantable, or if such damage is not insured against by the
insurance policies required to be maintained by Landlord
according to Section 9.1, then Landlord will have the option to
terminate this Lease. Any option to terminate granted above must
be exercised by written notice to the other party given within 10
days after Landlord delivers to Tenant the Repair Notice. If
either party exercises its option to terminate this Lease, the
Term will expire and this Lease will terminate 10 days after
notice of termination is delivered; provided, however, that Rent
for the period commencing on the date of such damage until the
date this Lease terminates will be reduced to the reasonable
value of any use or occupation of the Premises by Tenant during
such period. If Tenant elects to terminate the Lease, Landlord
will be entitled to up to a maximum of $802,912.00 of the
proceeds of Tenant's insurance for Leasehold Improvements and
Equipment (excluding Tenant's furnishings, equipment, personal
property, and trade fixtures in the Building).
10.2 REPAIR OBLIGATIONS. If the Building is damaged by fire or other
casualty and neither party terminates this Lease according to
Section 10.1, then Landlord will repair and restore such damage
with reasonable promptness, subject to delays for insurance
adjustments and delays caused by matters beyond Landlord's
control. However, Landlord will not be required to spend more for
such repair and restoration than the insurance proceeds available
to Landlord as a result of the fire or other casualty. To the
extent Tenant is responsible for insuring Leasehold Improvements,
Equipment, and Tenant's inventory and stock-in-trade, Tenant
agrees, promptly upon notice from Landlord that Landlord is
repairing the Building, to file such claims and pursue such
repairs to the Premises in order to rebuild the Leasehold
Improvements and Equipment to reopen Tenant's business within 20
days after the completion of Landlord's repairs. Landlord will
have no liability to Tenant and Tenant will not be entitled to
terminate this Lease if Landlord's repairs and restoration are
not in fact completed within the estimated time period, provided
that Landlord promptly commences and diligently pursues such
repairs and restoration to completion. In no event will Landlord
be obligated to repair, restore or replace any of the property
required to be insured by Tenant according to Section 9.2.
10.3 RENT ABATEMENT. If any fire or casualty damage renders the
Premises untenantable and if this Lease is not terminated
according to Section 10.1, then Rent will ▇▇▇▇▇ beginning on the
date of such damage. Such abatement will end on the earlier of 30
days after the date Landlord has substantially completed the
repairs and restoration Landlord is required to perform according
to Section 10.2 or the date Tenant accepts the Premises for
occupancy. Such abatement will be in an amount bearing the same
ratio to the total amount of Rent for such period as the
untenantable portion of the Premises bears to the entire
Premises. In no event will Landlord be liable for any
inconvenience or annoyance to Tenant or injury to the business of
Tenant resulting in any way from damage caused by fire or other
casualty or the repair of such damage, provided however that, to
the extent Tenant remains in possession of a portion of the
Premises, Landlord will take all reasonable steps to minimize the
disruption to Tenant's business and use of such portion of the
Premises during the period of repair.
11 WAIVERS AND INDEMNITIES.
11.1 LANDLORD'S WAIVERS. Tenant and its Affiliates will not be liable
or in any way responsible to Landlord for, and Landlord waives
all claims against Tenant and its Affiliates for, any loss,
injury or damage that is insured or required to be insured by
Landlord under Section 9.1(a)(1), so long as such loss, injury or
damage results from or in connection with this Lease or Tenant's
use and occupancy of the Premises.
11.2 TENANT'S WAIVERS. Except to the extent caused by the willful or
negligent act or omission or breach of this Lease by Landlord or
its agents or employees, Landlord and its Affiliates will not be
liable or in any way responsible for, and Tenant waives all
claims against Landlord and its Affiliates for, any loss, injury
or damage suffered by Tenant or others relating to (a) loss or
theft of, or damage to, property of Tenant or others; (b) injury
or damage to persons or property resulting, from fire, explosion,
failing plaster, escaping steam or gas, electricity, water, rain
or snow, or leaks from any part of the Building or from any
pipes, appliances or plumbing, or from dampness; or (c) damage
caused by the public or by construction of any private or public
work. In addition, Landlord and its Affiliates will not be liable
or in any way responsible to Tenant for, and Tenant waives all
claims against Landlord and its Affiliates for, any loss, injury
or damage that is insured
13
or required to be insured by Tenant under Sections 9.2(b) or
9.2(c), so long as such loss, injury or damage results from or in
connection with this Lease.
11.3 LANDLORD'S INDEMNITY. Subject to Section 11.2 and except to the
extent caused by the willful or negligent act or omission or
breach of this Lease by Tenant, its subtenants or licensees, or
any of their respective agents, employees or invitees, Landlord
will indemnify and hold Tenant harmless from and against any and
all liability, loss, claims, demands, damages or expenses
(including reasonable attorneys' fees) due to or arising out of
any willful or negligent act or omission or breach of this Lease
by Landlord or its agents or employees. Landlord's obligations
under this Section 1 1.3 will survive the expiration or early
termination of the Term.
11.4 TENANT'S INDEMNITY. Subject to Section I 1. I and except to the
extent caused by the willful or negligent act or omission or
breach of this Lease by Landlord or its agents or employees,
Tenant will indemnify and hold Landlord harmless from and against
any and all liability, loss, claims, demands, damages or expenses
(including reasonable attorneys' fees) due to or arising out of
any willful or negligent act or omission of or breach of this
Lease by Tenant, its subtenants or licensees, or any of their
respective agents, employees or invitees. Tenant's obligations
under this Section 1 1.4 will survive the expiration or early
termination of the Tenn.
12 CONDEMNATION.
12.1 FULL TAKING. If all or substantially all of the Premises are
taken for any public or quasi-public use under any applicable
Laws or by right of eminent domain. or are sold to the condemning
authority in lieu of condemnation, then this Lease will terminate
as of the date when the condemning authority takes physical
possession of the Premises.
12.2 PARTIAL TAKING.
(a) Landlord's Termination of Lease. If only part of the
Building- or Premises is thus taken or sold, and if after
such partial taking in Landlord's reasonable judgment,
alteration or reconstruction of any affected improvements
necessary for Tenant's use and enjoyment of the Premises is
not economically justified, then Landlord (whether or not
the Building is affected) may terminate this Lease by giving
written notice to Tenant within 60 days after the taking.
(b) Tenant's Termination of Lease. If over 20% of the Building-
is thus taken or sold, Tenant may terminate this Lease if in
Tenant's reasonable judgment the Building cannot be operated
by Tenant in an economically viable fashion because of such
partial taking,. Such termination by Tenant must be
exercised by written notice to Landlord given not later than
60 days after Tenant is notified of the taking of the
Building.
(c) Effective Date of Termination. Termination by Landlord or
Tenant will be effective as o the date when physical
possession of the applicable portion of the Building or
Premises is taken by the condemning authority.
(d) Election to Continue Lease. If neither Landlord nor Tenant
elects to terminate this Lease upon a partial taking, of a
portion of the Premises, the Rent payable under this Lease
will be diminished b an amount allocable to the portion of
the Premises which was so taken or sold. If this Lease is no
terminated upon a partial taking, of the Building, or
Premises, Landlord will, at Landlord's sole expense promptly
restore and reconstruct the Building- and Premises to
substantially their former condition to the extent the same
is feasible. However, Landlord will not be required to spend
for such restoration o reconstruction an amount in excess of
the net amount received by Landlord as compensation or
damage for the part of the Building or Premises so taken. In
the event landlord is unable to restore and reconstruct the
Building and Premises to substantially their former
condition to the extent the same is acceptable to Tenant, in
Tenant's reasonable business judgment, Tenant may terminate
this Lease. Such termination by Tenant must be exercised by
written notice to Landlord given not later than 30 days
after Tenant is notified of the completion of such
restoration and reconstruction of the Building, and
Premises.
12.3 AWARDS. As between the parties to this Lease, Landlord will be
entitled to receive, and Tenant assigns to Landlord, all of the
compensation awarded upon taking of any part or all of the
Premises, including an award for the value of the unexpired Term.
However, Tenant may assert a claim in a
14
separate proceeding against the condemning authority for any
damages resulting from the taking of Tenant's trade fixtures or
personal property or for moving expenses, business relocation
expenses or damages to Tenant's business incurred as a result of
such condemnation.
13 ASSIGNMENT AND SUBLETTING.
13.1 LIMITATION. Except as permitted in Section 13.7, "without
Landlord's prior written consent, Tenant will not assign all or
any of its interest under this Lease, sublet all or any part of
the Premises or permit the Premises to be used by any parties
other than Tenant and its employees.
13.2 NOTICE OF PROPOSED TRANSFER; LANDLORD'S OPTIONS. If Tenant
desires to enter into an assignment of this Lease or a sublease
of all or any part of the Premises, Tenant will first give
Landlord written notice, at least 30 days prior to the proposed
assignment or sublease, of the proposed assignment or sublease,
which notice will contain (a) the name and address of the
proposed transferee, (b) the proposed use of the Premises if
other than the Permitted Use, (c) statements reflecting the
proposed transferee's current financial condition and income and
expenses for the past two years, and (d) the principal terms of
the proposed assignment or sublease. Tenant shall not permit the
proposed transferee to occupy the Premises, or a portion thereof,
without Landlord's written consent. Except in the case of any
transfer permitted under Section 13.7, Landlord will have the
option, which must be exercised, if at all, by notice given to
Tenant within 20 days after Landlord's receipt of Tenant's notice
of the proposed transfer, either (a) if Tenant's notice relates
to a subletting, to sublet from Tenant such space as i described
in the notice for such portion of the Term as is described in the
notice, upon the same terms and condition and for the same Rent
(apportioned, as appropriate, to the amount of such space) as
provided in this Lease; or (b) i such notice relates to an
assignment, to become Tenant's assignee.
13.3 CONSENT NOT TO BE UNREASONABLY WITHHELD. If Landlord does not
exercise its applicable option under Section 13.2, then Landlord
will not unreasonably withhold or delay ITS consent to the
proposed assignment o subletting if each of the following
conditions is satisfied:
(a) the proposed transferee, in Landlord's opinion, has
sufficient financial capacity an business experience to
perform Tenant's obligations under this Lease;
(b) the proposed transferee will make use of the Premises which
in Landlord's reasonable opinion (1) is lawful; (2) is
consistent with the Permitted Use of the Premises under this
Lease; (3) i consistent with the general character of uses
conducted by the other occupants of the Gunbarrel Technical
Center; (4) will not increase the likelihood of damage or
destruction to the Building; (5) will not increase the rate
of wear and tear to the Building; and (6) will not cause an
increase in insurance premiums for insurance policies
applicable to the Building;
(c) the proposed transferee does not have a poor reputation in
the general business community (such as a reputation for
engaging in illegal or unethical business practices);
(d) if the proposed transfer is a sublease, the rent which the
proposed transferee will be required to pay will be equal to
at least 90% of the then-current market rent for the portion
of the premises being sublet;
(e) the proposed transferee, at the time of the proposed
transfer, is neither a tenant in any building owned or
managed by Landlord or any Affiliate of Landlord in the same
county in which the Building is located, nor a party with
whom Landlord is then negotiating for the lease of space in
the Gunbarrel Technical Center;
(f) at the time of the proposed transfer no "Default" (as
defined in Section 19.1) exists under this Lease beyond any
applicable notice and cure period; and
(g) the proposed transferee or Tenant will pay Landlord's
reasonable costs associated with Landlord's review and
approval of the proposed transfer, including, without
limitation, attorneys' fees and costs.
13.4 FORM OF TRANSFER. If Landlord consents to a proposed assignment
or sublease, Landlord's consent will not be effective unless and
until Tenant delivers to Landlord an original duly executed
assignment or sublease, as the case may be, that provides, in the
case of a sublease, that the subtenant will comply with all
applicable terms and conditions of this Lease and, in the case of
an assignment, an assumption by the assignee of all of the terms,
covenants and conditions which this Lease requires Tenant to
perform.
15
13.5 PAYMENTS TO LANDLORD. If Landlord does not exercise its
applicable option under Section 13.2 and Tenant effects an
assignment or sublease, then Landlord will be entitled to receive
and collect, either from Tenant or directly from the transferee,
50% of the amount by which the consideration required to be paid
by the transferee for the use and enjoyment of Tenant's rights
under this Lease (after deducting from such consideration
Tenant's reasonable costs incurred in effecting the assignment or
sublease) exceeds the Rent payable by Tenant to Landlord
allocable to the transferred space. Such percentage of such
amount will be payable to Landlord at the time(s) Tenant receives
the same from its transferee (whether in monthly installments, a
lump sum, or otherwise). Landlord hereby agrees that Tenant shall
be entitled to retain the remaining 50% of the amount by which
the consideration required to be paid by the transferee for the
use and enjoyment of Tenant's rights under this Lease exceeds the
Rent payable by Tenant to Landlord allocable to the transferred
space.
13.6 Change of Ownership. Any change by Tenant in the form of its
legal organization (such as, for example, a change from a general
to a limited partnership), any transfer of 5 1 % or more of
Tenant's assets, and any other transfer of interest effecting a
change in identity of persons exercising effective control of
Tenant will be deemed an "assignment" of this Lease requiring
Landlord's prior written consent. The transfer of any outstanding
capital stock of a corporation whose stock is publicly traded
will not, however, be deemed a "transfer of interest" under this
Section 13.6. Landlord acknowledges that Tenant plans to initiate
an initial public offering, ("IPO") of Tenant's stock sometime
prior to or during the Term and Landlord expressly agrees that
Tenant's IPO does not constitute an "assignment" of this Lease
requiring Landlord's prior written consent.
13.7 Permitted Transfers. Tenant may, upon notice to Landlord but
without obtaining Landlord's consent, assign this Lease or
sublease all or any part of the Premises to a wholly-owned
subsidiary of Tenant or the parent of Tenant, providing, that the
financial statements of the resulting entity are better than, or
equal to, those of the initial Tenant.
13.8 Effect of Transfers. No subletting, or assignment will release
Tenant from any of its obligations under this Lease unless
Landlord agrees to the contrary in writing Acceptance of Rent by
Landlord from any person other than Tenant will not be deemed a
waiver by Landlord of any provision of this Section 13.8. Consent
to one assignment or sub-letting will not be deemed consent to
any subsequent assignment or subletting. In the event of any
default by any assignee or subtenant or any successor of Tenant
in the performance of any Lease obligation, Landlord may proceed
directly against Tenant without exhausting remedies against such
assignee, subtenant or successor. The voluntary or other
surrender of this Lease by Tenant or the cancellation of this
Lease by mutual agreement of Tenant and Landlord will not work a
merger and will, at Landlord's option, terminate all or any
subleases or operate as an assignment to Landlord of all or any
subleases; such option will be exercised by notice to Tenant and
all known subtenants in the Premises.
14 PERSONAL PROPERTY. Tenant may install in the Premises its personal property
(including- Tenant's usual trade fixtures) in a proper manner, provided
that no such installation will interfere with or damage the mechanical,
plumbing or electrical systems or the structure of the Building, and
provided further that if such installation would require any change,
addition or improvement to the Premises, such installation will be subject
to Section 7. Any such personal property installed in the Premises by
Tenant (a) may be removed from the Premises from time to time in the
ordinary course of Tenant's business or in the course of making any
changes, additions or improvements to the Premises permitted under Section
7, and (b) will be removed by Tenant at the end of the Term according to
Section 15.1. Tenant will promptly repair at its expense any damage to the
Premises and the Building resulting from such installation or removal.
15 END OF TERM.
15.1 SURRENDER. Upon the expiration or other termination of the Term,
Tenant will immediately vacate and surrender possession of the
Premises in good order, repair and condition, except for ordinary
wear and tear. Upon the expiration or other termination of the
Term, Tenant agrees to remove (a) all chances, additions and
improvements to the Premises the removal of which Landlord
requested or approved according to Section 7 at the time Landlord
consented to their installation, and (b) all of tenant's trade
fixtures, furnishings, equipment and other personal property.
Tenant will pay Landlord on demand the cost of repairing any
damage to the Premises or Building caused by the installation or
removal of any such items. Any of Tenant's property remaining on
the Premises will
16
be conclusively deemed to have been abandoned by Tenant and may
be appropriated, stored, sold, destroyed or otherwise disposed of
by Landlord without notice or obligation to account to or
compensate Tenant, and Tenant will pay Landlord on demand all
costs incurred by Landlord relating to such abandoned property.
15.2 HOLDING OVER. Tenant understands that it does not have the right
to hold over at any time and Landlord may exercise any and all
remedies at law or in equity to recover possession of the
Premises, as well as any damages incurred by Landlord, due to
Tenant's failure to vacate the Premises and deliver possession to
Landlord as required by this Lease. If Tenant holds over after
the Expiration Date with Landlord's prior written consent, Tenant
will be deemed to be a tenant from month to month, at a monthly
Base Rent, payable in advance, equal to an amount agreed to in
writing by Landlord and Tenant, but in no event less than the
monthly Base Rent payable during the last Lease Year of the Term,
and Tenant will be bound by all of the other terms, covenants and
agreements of this Lease as the same may apply to a
month-to-month tenancy. If Tenant holds over after the Expiration
Date without Landlord's prior written consent, Tenant will be
deemed a tenant at sufferance, at a daily Base Rent, payable in
advance, equal to 150% of the Base Rent per day payable during
the last year of the Term, and Tenant will be bound by all of the
other terms, covenants and agreements of this Lease as the same
may apply to a tenancy at sufferance.
16 ESTOPPEL CERTIFICATES. Promptly upon Landlord's request after Tenant has
occupied the Premises, Tenant will execute and deliver to Landlord an
Occupancy Estoppel Certificate in the form of Exhibit A. In addition,
Tenant agrees that at any time and from time to time (but on not less than
10 days' prior request by Landlord), Tenant will execute, acknowledge and
deliver to Landlord a certificate indicating- any or all of the following:
(a) the Commencement Date and Expiration Date; (b) that this Lease is
unmodified and in full force and effect (or, if there have been
modifications, that this Lease is in full force and effect, as modified,
and stating- the date and nature of each modification); (c) the date, if
any, through which Base Rent, Additional Rent and any other Rent payable
have been paid; (d) that no default by Landlord or Tenant exists which has
not been cured, except as to defaults stated in such certificate-, (e) that
Tenant has no existing- defenses or setoffs to enforcement of this Lease,
except as specifically stated in such certificate: (o provided such events
have occurred, that Tenant has accepted the Premises and that all
improvements required to be made to the Premises by Landlord have been
completed according to this Lease; (g) that, except as specifically stated
in such certificate, Tenant, and only Tenant, currently occupies the
Premises; and (h) such other matters as may be reasonably requested by
Landlord. Any such certificate may be relied upon by Landlord and any
prospective purchaser or present or prospective mortgagee, deed of trust
beneficiary or ground lessor of all or a portion of the Building.
17 TRANSFERS OF LANDLORD'S INTEREST.
17.1 SALE, CONVEYANCE AND ASSIGNMENT. Subject only to Tenant's rights
under this Lease, nothing, in this Lease will restrict Landlord's
right to sell, convey, assign or otherwise deal with the Premises
or Landlord's interest under this Lease.
17.2 EFFECT OF SALE, CONVEYANCE OR ASSIGNMENT. A sale, conveyance or
assignment of the Premises will automatically release Landlord
from liability under this Lease from and after the effective date
of the transfer, except for any liability relating to the period
prior to such effective date; and Tenant will look solely to
Landlord's transferee for performance of Landlord's obligations
relating TO the period after such effective date. This Lease will
not be affected by any such sale, conveyance or assignment and
Tenant will attorn to Landlord's transferee.
17.3 SUBORDINATION AND NONDISTURBANCE. This Lease is and will be
subject and subordinate in all respects to any Encumbrance. With
respect to any Encumbrance first encumbering the Building
subsequent to the Date of this Lease, upon Tenant's request,
Landlord will use its good faith efforts to cause the Lender to
agree (either in the Encumbrance or in a separate agreement with
Tenant) that so long as Tenant is not in default of its
obligations under this Lease, this Lease will not be terminated
and Tenant's possession of the Premises will not be disturbed by
the termination or foreclosure, or proceedings for enforcement,
of such Encumbrance. While such subordination will occur
automatically, Tenant agrees, upon request by and without cost to
Landlord or any successor in interest, to promptly execute and
deliver to Landlord or any Lender such instrument(s) as may be
reasonably required to evidence such subordination. In the
alternative, however, any Lender may unilaterally elect to
subordinate its Encumbrance to this Lease.
17.4 ATTORNMENT. If the interest of Landlord is transferred to any
person (a "Transferee") by reason of the termination or
foreclosure, or proceedings for enforcement, of an Encumbrance,
or by delivery
17
of a deed in lieu of such foreclosure or proceedings, Tenant will
immediately and automatically attorn to the Transferee. Upon
attornment this Lease will continue in full force and effect as a
direct lease between the Transferee and Tenant, upon all of the
same terms, conditions and covenants as stated in this Lease,
except that the Transferee will not be: (a) liable for any act or
omission of an prior landlord, including, Landlord (but such
exemption will not excuse the Transferee from the performance of
any obligations of the landlord under this Lease required to be
performed subsequent to the transfer to the Transferee)-, (b)
subject to any offsets or defenses which Tenant might have
against any prior landlord, including, Landlord (excluding, any
express right of abatement granted under this Lease, provided
that the Lender who held the Encumbrance the enforcement of which
resulted in the transfer to the Transferee (the "Foreclosing
Lender") was afforded any notice and cure rights to which it was
entitled under Section 20.1 with respect to the matter that gave
rise to such express right of abatement); (c) bound by any Rent
or advance Rent which Tenant might have paid for more than the
current month or the next succeeding month to any prior landlord,
including Landlord, and all such Rent will remain due and owing,
regardless of such advance payment; (d) obligated for repayment
to Tenant of the Security Deposit or any other security or
advance rental deposit made by Tenant, except to the extent the
same is paid over to the Transferee; or (e) bound by any
termination, amendment or modification of this Lease (other than
one expressly contemplated by the terms of this Lease and
effected according to such express terms, such as termination
b, Landlord due to a Default by Tenant) made without the
written consent of the Foreclosing Lender. Tenant agrees, upon
request by and without cost to the Transferee, to promptly
execute and deliver to the Transferee such instrument(s) as may
be reasonably required to evidence such attornment.
18 RULES AND REGULATIONS. Tenant agrees to faithfully observe and comply with
the Rules and Regulations set forth on Exhibit B and with all reasonable
modifications and additions to such Rules and Regulations (which will be
applicable to all Building tenants) from time to time adopted by Landlord
and of which Tenant is notified in writing. No such modification or
addition will contradict or abrogate any right expressly granted to Tenant
under this Lease.
19 TENANT'S DEFAULT AND LANDLORD'S REMEDIES.
19.1 DEFAULT. Each of the following events will constitute a material
breach by Tenant and a "Default" under this Lease:
(a) Failure to Pay Rent. Tenant fails to pay Base Rent,
Additional Rent or any other Rent payable by Tenant under
the terms of this Lease when due, and such failure continues
for 7 days after written notice from Landlord to Tenant of
such failure; provided that with respect to Base Rent,
Landlord's Premises Expenses and Taxes, Tenant will be
entitled to only two notices of such failure during any
Lease Year and if, after two such notices are given in any
Lease Year, Tenant fails, during such Lease Year, to pay any
such amounts when due. Such failure will constitute Default
without further notice by Landlord or additional cure
period.
(b) Failure to Perform Other Obligations. Except as otherwise
specifically provided in this Lease, Tenant breaches or
fails to comply with any other provision of this Lease
applicable to Tenant, and such breach or noncompliance
continues for a period of 30 days after notice by Landlord
to Tenant; or, if such breach or noncompliance cannot be
reasonably cured within such 30-day period, Tenant does not
IN good faith commence to cure such breach or noncompliance
within such 30-day period or does not diligently complete
such cure within 90 days after such notice from Landlord.
However, if such breach or noncompliance causes or results
in (1) a dangerous condition on the Premises or Building, or
(2) any insurance coverage carried by Landlord or Tenant
with respect to the Premises or Building- being jeopardized,
then a Default will exist if such breach or noncompliance is
not cured as soon as reasonably possible after notice by
Landlord to Tenant, and in any event is not cured within 30
days after such notice. For purposes of this Section
19.1(b), financial inability will not be deemed a reasonable
ground for failure to immediately cure any breach of, or
failure to comply with, the provisions of this Lease.
(c) Non-Occupancy of Premises. Tenant fails to occupy and use
the Premises within 60 days after the Commencement Date or
leaves substantially all of the Premises unoccupied for 30
consecutive days or vacates and abandons substantially all
of the Premises.
(d) Transfer of Interest Without Consent. Tenant's interest
under this Lease or in the Premises is transferred or passes
to, or devolves upon, any other party in violation of
Section 13.
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(e) Execution and Attachment Against Tenant. Tenant's interest
under this Lease or in the Premises is taken upon execution
or by other process of law directed against Tenant, or is
subject to any attachment by any creditor or claimant
against Tenant and such attachment is not discharged or
disposed of within 30 days after levy.
(f) Bankruptcy or Related Proceedings. Tenant files a petition
in bankruptcy or insolvency, or for reorganization or
arrangement under any bankruptcy or insolvency Laws, or
voluntarily takes advantage of any such Laws by answer or
otherwise, or dissolves or makes an assignment for the
benefit of creditors, or involuntary proceedings under any
such Laws or for the dissolution of Tenant are instituted
against Tenant, or a receiver or trustee IS appointed for
the Premises or for all or substantially all of Tenant's
property, and such proceedings are not dismissed or such
receivership or trusteeship vacated within 60 days after
such institution or appointment.
19.2 REMEDIES. Time is of the essence. If any Default occurs, Landlord
will have the right, at Landlord's election, then or at any later
time, to exercise any one or more of the remedies described
below. Exercise of any of such remedies will not prevent the
concurrent or subsequent exercise of any other remedy provided
for in this Lease or otherwise available to Landlord at law or in
equity.
(a) Cure by Landlord. Landlord may, at Landlord's option but
without obligation to do so, and without releasing Tenant
from any obligations under this Lease, make any payment or
take any action as Landlord deems necessary or desirable to
cure any Default in such manner and to such extent as
Landlord deems necessary or desirable. Landlord may do so
without additional demand on, or additional written notice
to, Tenant and without giving Tenant an additional
opportunity to cure such Default. Tenant covenants and
agrees to pay Landlord, upon demand, all advances, costs and
expenses of Landlord in connection with making any such
payment or taking, any such action, including reasonable
attorney's fees, together with interest at the rate
described in Section 3.5, from the date of payment of any
such advances, costs and expenses by Landlord.
(b) Termination of Lease and Damages. Landlord may terminate
this Lease, effective at such time as may be specified by
written notice to Tenant, and demand (and, if such demand is
refused, recover) possession of the Premises from Tenant.
Tenant will remain liable to Landlord for damages in an
amount equal to the Base Rent, Taxes, Landlord's Premises
Expenses and other Rent which would have been owing by
Tenant for the balance of the Term had this Lease not been
terminated, less the net proceeds, if any, of any reletting
of the Premises by Landlord subsequent to such termination,
after deducting all Landlord's expenses in connection with
such recovery of possession or reletting. Landlord will be
entitled to collect and receive such damages from Tenant on
the days on which such Rent would have been payable if this
Lease had not been terminated. Alternatively, at Landlord's
option, Landlord will be entitled to recover from Tenant, as
damages for loss of the bargain and not as a penalty, an
aggregate sum equal to (1) all unpaid Base Rent, Landlord's
Premises Expenses, Taxes and other Rent for any period prior
to the termination date of this Lease (including interest
from the due date to the date of the award at the rate
described in Section 3.5), plus any other sum of money and
damages owed by Tenant to Landlord for events or actions
occurring prior to the termination date; plus (2) the
present value at the time of termination (calculated at the
rate commonly called the discount rate in effect at the
Federal Reserve Bank of New York on the termination date) of
the amount, if any, by which (A) the aggregate of such Rent
payable by Tenant under this Lease that would have accrued
for the balance of the Term after termination (with respect
to Landlord's Premises Expenses and Taxes, such aggregate
will be calculated by assuming that Landlord's Premises
Expenses and Taxes for the calendar year in which
termination occurs and for each subsequent calendar year
remaining, in the Term if this Lease had not been terminated
will increase by 4% per year over the amount of Landlord's
Premises Expenses and Taxes for the prior calendar year),
exceeds (B) the amount of such Rent which Landlord will
receive for the remainder of the Term from any relenting of
the Premises occurring prior to the date of the award, or if
the Premises have not been relet prior to the date of the
award, the amount, if any, of such Rent which could
reasonably be recovered by reletting the Premises for the
remainder of the Term at the then-current fair rental value,
in either case taking into consideration loss of rent while
finding a new tenant, tenant improvements and rent
abatements necessary to secure a new tenant, leasing,
brokers' commissions and other costs which Landlord has
incurred or might incur in leasing, the Premises to a new
tenant; plus (3) interest on the amount described in (2)
above from the termination date to the date of the award at
the rate described in Section 3.5.
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(c) Repossession and Reletting. Landlord may reenter and take
possession of all or any part of the Premises, without
additional demand or notice, and repossess the same and
expel Tenant and any party claiming by, through or under
Tenant, and remove the effects of both using, such force for
such purposes as may be necessary, without being liable for
prosecution for such action or being deemed guilty of any
manner of trespass, and without prejudice to any remedies
for arrears of Rent or right to bring any proceeding for
breach of covenants or conditions. No such reentry or taking
possession of the Premises by Landlord will be construed as
an election by Landlord to terminate this Lease unless a
written notice of such intention is given to Tenant. No
notice from Landlord or notice given under a forcible entry
and detainer statute or similar Laws will constitute an
election by Landlord to terminate this Lease unless such
notice specifically so states. Landlord reserves the right,
following, any reentry or reletting to exercise its right to
terminate this Lease by giving Tenant such written notice,
in which event the Lease will terminate as specified in such
notice. After recovering possession of the Premises,
Landlord may, from time to time, but will not be obligated
to, relet all or any part of the Premises for Tenant's
account, for such term or terms and on such conditions and
other terms as Landlord, in its discretion, determines.
Landlord hereby acknowledges, however, that Landlord shall
mitigate its damages to the extent required by applicable
Laws. Landlord may make such repairs, alterations or
improvements as Landlord considers appropriate to accomplish
such reletting, and Tenant will reimburse Landlord upon
demand for all costs and expenses, including attorneys'
fees, which Landlord may incur in connection with such
reletting. Landlord may collect and receive the rents for
such reletting but Landlord will in no way be responsible or
liable for any failure to relet the Premises or for any
inability to collect an, rent due upon such reletting.
Regardless of Landlord's recovery of possession of the
Premises, Tenant will continue to pay on the dates specified
in this Lease, the Rent which would be payable if such
repossession had not occurred, less a credit for the net
amounts, if any, actually received by Landlord through any
reletting of the Premises. Alternatively, at Landlord's
option, Landlord will be entitled to recover from Tenant, as
damages for loss of the bargain and not as a penalty, an
aggregate sum equal to (1) all unpaid Base Rent, Taxes and
Landlord's Premises Expenses and other Rent for any period
prior to the repossession date (including interest from the
due date to the date of the award at the rate described in
Section 3.5), plus any other sum of money and damages owed
by Tenant to Landlord for events or actions occurring prior
to the repossession date; plus (2) the present value at the
time of repossession (calculated at the rate commonly called
the discount rate in effect at the Federal Reserve Bank of
New York on the repossession date) of the amount, if any, by
which (A) the aggregate of such Rent payable by Tenant under
this Lease that would have accrued for the balance of the
Term after repossession (with respect to Landlord's Premises
Expenses and Taxes, such aggregate will be calculated by
assuming that Landlord's Premises Expenses and Taxes for the
calendar year in which repossession occurs and for each
subsequent calendar year remaining in the Term if Landlord
had not repossessed the Premises will increase by 4% per
year over the amount of Landlord's Premises Expenses and
Taxes for the prior calendar year), exceeds (B) the amount
of such Rent which Landlord will receive for the remainder
of the Term from any reletting of the Premises occurring
prior to the date of the award, or if the Premises have not
been relet prior to the date of the award, the amount, if
any, of such Rent which could reasonably be recovered by
reletting the Premises for the remainder of the Term at the
then-current fair rental value, in either case taking into
consideration loss of rent while finding a new tenant,
tenant improvements and rent abatements necessary to secure
a new tenant, leasing brokers' commissions and other costs
which Landlord has incurred or might incur in leasing, the
Premises to a new tenant; plus (3) interest on the amount
described in (2) above from the repossession date to the
date of the award at the rate described in Section 3.5. In
no event will Landlord be required to pay Tenant any excess
amounts if Landlord successfully relets the Premises.
(d) Bankruptcy Relief. Nothing contained in this Lease will
limit or prejudice Landlord's right to prove and obtain as
liquidated damages in any bankruptcy, insolvency,
receivership, reorganization or dissolution proceeding, an
amount equal to the maximum allowable by any Laws governing
such proceeding in effect at the time when such damages are
to be proved, whether or not such amount be greater, equal
or less than the amounts recoverable, either as damages or
Rent, under this Lease.
20
20 LANDLORD'S DEFAULT AND TENANT'S REMEDIES.
20.1 DEFAULT. If Tenant believes that Landlord has breached or failed
to comply with any provision of this Lease applicable to
Landlord, Tenant will give written notice to Landlord describing
the alleged breach or noncompliance. Landlord will not be deemed
in default under this Lease if Landlord cures the breach or
noncompliance within 20 days after receipt of Tenant's notice or,
if the same cannot reasonably be cured within such 20-day period,
if Landlord in good faith commences to cure such breach or
noncompliance within such period and then diligently pursues the
cure to completion. Tenant will also send a copy of such notice
to any Lender of whom Tenant has been notified in writing and
such Lender will also have the right to cure the breach or
noncompliance within the period of time described above.
20.2 REMEDIES. If Landlord breaches or fails to comply with any
provision of this Lease applicable to Landlord, and such breach
or noncompliance is not cured within the period of time described
in Section 20.1, then Tenant may exercise any right or remedy
available to Tenant at law or in equity, except to the extent
expressly waived or limited by the terms of this Lease.
21 SECURITY DEPOSIT.
21.1 DEPOSIT. Upon execution of this Lease, Tenant will deposit the
Security Deposit with Landlord. The Security Deposit will be used
solely as security for Tenant's faithful and diligent performance
of all of Tenant's obligations under this Lease, including
payment of Rent. The Security Deposit will remain in Landlord's
possession for the entire Ten-n, and Landlord will not be
required to segregate it from Landlord's general funds, unless
required by Law. Tenant will not be entitled to any interest on
the Security Deposit, unless required by Law.
21.2 USE AND RESTORATION. If Tenant fails to perform any of its
obligations under this Lease, Landlord may, at its option, use,
apply or retain all or any part of the Security Deposit for the
payment of (a) any Rent in arrears; (b) any expenses Landlord may
incur as a direct or indirect result of Tenant's failure to
perform; and (c) any other losses or damages Landlord may suffer
as a direct or indirect result of Tenant's failure to perform. If
Landlord so uses or applies all or any portion of the Security
Deposit, Landlord will notify Tenant of such use or application
and Tenant will, within 10 days after the date of Landlord's
notice, deposit with Landlord a sum sufficient to restore the
Security Deposit to the amount held by Landlord immediately prior
to such use or application. Tenant's failure to so restore the
Security Deposit will constitute Default.
21.3 TRANSFERS. Tenant will not assign or encumber the Security
Deposit without Landlord's express written consent. Neither
Landlord nor its successors or assigns will be bound by any
assignment or encumbrance unless Landlord has given its consent.
Landlord shall, at any time and from time to time, transfer the
Security Deposit to any purchaser or lessee of the Building. Upon
any such transfer, Tenant agrees to look solely to the new owner
or lessee for the return of the Security Deposit.
21.4 REFUND. Provided that Tenant has fully and faithfully performed
all of its obligations under this Lease, Landlord will refund the
Security Deposit, or any balance remaining, to Tenant or, at
Landlord's option, to the latest assignee of Tenant's interest
under this Lease, within 60 days after the expiration or early
termination of the Term and Tenant's vacation and surrender of
the Premises to Landlord in the condition required by Section 15.
1. If Tenant fails to make any final estimated payment of
Landlord's Premises Expenses and Taxes required by Landlord
according to Section 3.2(c), Landlord may withhold such final
payment from the amount of the Security Deposit refund.
22 BROKERS. Landlord and Tenant represent and warrant that no broker or agent
negotiated or was instrumental in negotiating or consummating, this Lease
except the Broker. Neither party knows of any other real estate broker or
agent who is or might be entitled to a commission or compensation in
connection with this Lease. Landlord will pay all fees, commissions or
other compensation payable to the Broker to be paid by Landlord according
to Section I.I (n). Tenant and Landlord will indemnify and hold each other
harmless from all damages paid or incurred by the other resulting, from any
claims asserted against either party by brokers or agents claiming through
the other party. Tenant hereby acknowledges that Tenant does not have any
separate agreement with the Broker.
23 LIMITATIONS ON LANDLORD'S LIABILITY. Any liability for damages, breach, or
nonperformance by Landlord or arising out of the subject matter of, or the
relationship created by, this Lease will be collectible only out of
Landlord's interest in the Premises and no personal liability is assumed
by, or will at any time be asserted
21
against, Landlord, its Affiliates, shareholders, partners, owners or
members, Landlord's property manager or asset manager, or any of its or
their successors or assigns; all such liability, if any, being expressly
waived and released by Tenant.
24 NOTICES. All notices required or permitted under this Lease must be in
writing and will only be deemed properly given and received (a) when
actually given and received, if delivered in person to a party who
acknowledges receipt in writing; or (b) one business day after deposit
with a private courier or overnight delivery service, if such courier or
service obtains a written acknowledgment of receipt; or (c) two business
days after deposit in the United States mails, certified or registered
mail with return receipt requested and postage prepaid. All such notices
must be transmitted by one of the methods described above to the party to
receive the notice at, in the case of notices to Landlord, Landlord's
Address. and in the case of notices to Tenant, Tenant's Address, or, in
either case, at such other address(es) as either party may notify the
other of according to this Section 24.
25 MISCELLANEOUS.
25.1 BINDING EFFECT. Each of the provisions of this Lease will
extend to bind or inure to the benefit of, as the case may be,
Landlord and Tenant. and their respective heirs, successors
and assigns, provided this clause will not permit any transfer
by Tenant contract to the provisions of Section 13.
25.2 COMPLETE AGREEMENT; MODIFICATION. All of the representations
and obligations of the parties are contained in this Lease and
no modification, waiver or amendment of this Lease or of any
of its conditions or provisions will be binding upon a party
unless in writing sign by such party.
25.3 DELIVERY FOR EXAMINATION. Submission of the form of the Lease
for examination will not bind Landlord in any manner, and no
obligations will arise under this Lease until it is signed by
both Landlord and Tenant and delivery is made to each.
25.4 NO AIR RIGHTS. This Lease does not grant any easements or
rights for light, air, or view. Any diminution or blockage of
light, air, or view by any structure or condition now or later
erected will not affect this Lease or impose any liability on
Landlord.
25.5 ENFORCEMENT EXPENSES. Each party agrees to pay, upon demand,
all of the other party's costs, charges and expenses,
including the fees and out-of-pocket expenses of counsel,
agents, and others retained, incurred in successfully
enforcing the other party's obligations under this Lease.
25.6 NO WAIVER. No waiver of any provision of this Lease will be
implied by any failure of either party to enforce any remedy
upon the violation of such provision, even if such violation
is continued or repeated subsequently. No express waiver will
affect any provision other than the one specified in such
waiver, and that only for the time and in the manner
specifically stated.
25.7 RECORDING; CONFIDENTIALITY. Tenant will not record this Lease,
or a short form memorandum, without Landlord's written consent
and any such recording without Landlord's written consent will
be Default. Tenant agrees to keep the Lease terms, provisions
and conditions confidential and will not disclose them to any
other person without Landlord's prior written consent.
However, Tenant may disclose Lease terms, provisions and
conditions to Tenant's accountants, attorneys, managing
employees and others in privity with Tenant, as reasonably
necessary for Tenant's business purposes, without such prior
consent.
25.8 CAPTIONS. The captions of sections are for convenience only
and will not be deemed to limit, construe, affect or alter the
meaning of such sections.
25.9 INVOICES. All bills or invoices to be given by Landlord to
Tenant will be sent to Tenant's Address. Tenant may change
Tenant's Address by notice to Landlord given according to
Section 24. If Tenant fails to give Landlord specific written
notice of its objections within 60 days after receipt of any
▇▇▇▇ or invoice from Landlord, such ▇▇▇▇ or invoice will be
deemed true and correct and Tenant may not later question the
validity of such ▇▇▇▇ or invoice or the underlying information
or computations used to determine the amount stated.
25.10 SEVERABILITY. If any provision of this Lease is declared void
or unenforceable by a final judicial or administrative order,
this Lease will continue in full force and effect, except that
the void or
22
unenforceable provision will be deemed deleted and replaced
with a provision as similar in terms to such void or
unenforceable provision as may be possible and be valid and
enforceable.
25.11 JURY TRIAL. LANDLORD AND TENANT WAIVE TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY LANDLORD OR
TENANT AGAINST THE OTHER WITH RESPECT TO ANY MATTER ARISING
OUT OF OR IN CONNECTION WITH THIS LEASE, TENANT'S USE AND
OCCUPANCY OF THE PREMISES, OR THE RELATIONSHIP OF LANDLORD AND
TENANT. HOWEVER, SUCH WAIVER OF JURY TRIAL WILL NOT APPLY TO
ANY CLAIMS FOR PERSONAL INJURY.
25.12 AUTHORITY TO BIND. The individuals signing this Lease on
behalf of Landlord and Tenant represent and warrant that they
are empowered and duly authorized to bind Landlord or Tenant,
as the case may be, to this Lease according to its terms.
25.13 ONLY LANDLORD/TENANT RELATIONSHIP. Landlord and Tenant agree
that neither any provision of this Lease nor any act of the
parties will be deemed to create any relationship between
Landlord and Tenant other than the relationship of landlord
and tenant. Tenant has only a usufruct not subject to levy and
sale and not assignable by Tenant except as set forth in this
Lease.
25.14 GOVERNING LAW. This Lease will be governed by and construed
according to the laws of the State of Colorado.
25.15 EXHIBITS. The following exhibits are attached to and made a
part of this Lease by this reference:
Exhibit A Occupancy Estoppel Certificate
Exhibit B Rules and Regulations
Exhibit C Work Letter
Having read and intending to be bound by the terms and
provisions of this Lease, Landlord and Tenant have signed it
as of the date.
TENANT: LANDLORD:
▇▇▇▇▇▇▇ Investment Group, LLC, a Colorado
ILX Lightwave, A Minnesota Company limited liability company
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------ -------------------------------------
Printed Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------
Title: President and CEO Title: Manager
---------------------------
STATE OF MONTANA )
) ss:
COUNTY OF GALLATIN )
The foregoing instrument was acknowledged before me this 21 day of
September 2000, by ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as President/CEO of ILX Lightwave, a
Minnesota corporation.
Witness my hand and official seal.
My commission expires: 3/25/2004.
[ILLEGIBLE]
----------------------------------------
Notary Public
23
STATE OF COLORADO )
)ss:
COUNTY OF BOULDER )
The foregoing instrument was acknowledged before me this 22nd day of
September, 2000, by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Manager of ▇▇▇▇▇▇▇ Investment Group,
LLC, a Colorado limited liability company.
Witness my hand and official seal.
My commission expires: 4/28/2003.
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Notary Public
[NOTARY SEAL]
24
EXHIBIT A
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
OCCUPANCY ESTOPPEL CERTIFICATE
THIS OCCUPANCY ESTOPPEL CERTIFICATE (this "Certificate") is made upon
this day of , 200 , by ILX Lightwave., a Minnesota
corporation (the "Tenant"), with respect to and forming a part of that certain
Lease Agreement (the "Lease") dated 2000,
between ▇▇▇▇▇▇▇ Investment Group, LLC, a Colorado limited liability company (the
"Landlord") and Tenant for the property and building located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ (the "Premises").
In consideration of the mutual covenants and agreements stated in the
Lease, and intending that this Certificate may be relied upon by Landlord and
any prospective purchaser or present or prospective mortgagee, deed of trust
beneficiary, or ground lessor of all or a portion of the Premises, Tenant
certifies as follows:
1. Except for those terms expressly defined in this Certificate, all
initially capitalized terms will have the meanings stated for such terms in the
Lease.
2. The Commencement Date occurred on and the Expiration Date will
occur on .
3. Tenant's obligation to make monthly payments of Base Rent under the
Lease began (or will begin) on and is paid current through the date
of this Certificate.
4. Tenant's obligation to make monthly estimated payments of
Additional Rent under the Lease and is paid current through the date of this
Certificate.
5. Tenant has accepted the Premises, and all leasehold improvements
and other work required to be performed by Landlord under the Lease have been
satisfactorily completed.
6. Tenant has no existing offset, credit, or defense to the payment of
any Rent.
IN WITNESS WHEREOF, Tenant has executed this Certificate as of the day
and year first written above.
TENANT:
ILX Lightwave, a Minnesota corporation
By
----------------------------------------
Printed Name
------------------------------
Title
-------------------------------------
A-1
25
EXHIBIT B
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
RULES AND REGULATIONS
Tenant covenants and agrees to comply with the following rules and
regulations as they may be modified or amended during the Term. Landlord will
not be responsible to Tenant for the nonperformance of such rules and
regulations by any other tenant or occupant of the Building.
1. No awning or other projections shall be attached to the outside walls of
the Building without, in each instance, the prior written consent of
Landlord, which consent shall not be unreasonably withheld or delayed.
2. No sign, advertisement, display, notice, or other lettering, shall be
exhibited, inscribed, painted, or affixed on any part of the outside of the
Building without, in each instance, the prior written consent of Landlord.
All such signs, displays, advertisements, and notices of Tenant so approved
by Landlord shall be maintained by Tenant in good and attractive condition
at Tenant's expense and risk.
3. No aerial, dish, antenna or telecommunications tower shall be erected on
the roof or exterior walls of the Building, or on the grounds of the
Premises without, in each instance, the prior written consent of Landlord.
Any such item so installed without such written consent shall be subject to
removal without notice at any time.
4. No loud speakers, television sets, phonographs, radios, musical instruments
or other devices shall be used in a manner so as to be heard or seen off
the Premises without the prior written consent of Landlord.
5. Tenant shall not make or permit any noise, odor or gases which Landlord
deems objectionable to emanate from the Premises. Tenant shall not suffer,
allow, or permit any vibration, light, or other effect to emanate from the
Premises, or from any machine or other installation therein, or otherwise
suffer, allow, or permit the same to constitute a nuisance or otherwise
interfere with the safety, comfort, or convenience of Landlord or any of
the other occupants of the Gunbarrel Technical Center. Upon notice by
Landlord to Tenant that any of the aforesaid is occurring, Tenant agrees to
forthwith remove or control the same.
6. During the last nine months of this Lease, or any renewal or extension
thereof, or at any time that Tenant may be in default hereunder, Landlord
shall have the right, upon reasonable advance notice, to enter the Premises
at all reasonable times during usual business hours for the purpose of
showing the same to prospective tenants. Landlord may also place signs on
the exterior of the Building which are visible from the exterior off the
Premises, for the purpose of advertising the availability of the Premises
for lease.
7. Tenant shall not permit its employees, licensees or invitees, to smoke any
tobacco products in the vicinity of any entrance to the Building. With
Landlord's prior consent, which will not be unreasonably withheld or
delayed, Tenant may establish an outdoor smoking area in the rear of the
Building that is not visible from Winchester Circle. Tenant shall keep such
area free of cigarette butts and other trash and debris.
B-1
26
EXHIBIT C
WORK LETTER
1. Controlling Document; Terms. If there is any conflict or
inconsistency between the provisions of the Lease and those of this Exhibit C
(this "Work Letter"), the provisions of this Work Letter will control. Except
for those terms expressly defined in this Work Letter, all initially capitalized
terms will have the meanings stated for such terms in the Lease. The following
terms, which are not defined in the Lease, have the meanings indicated:
(a) "Scheduled Commencement Date" means February 1, 2001.
(b) "Commencement Date" means the first day of the Term, which
will be the Scheduled Commencement Date, unless the
Commencement Date is extended according to Paragraph 4 below.
(c) "Landlord's Representative" means ▇▇▇▇ ▇▇▇▇▇▇▇. Landlord may
designate another person as Landlord's Representative at any
time by three days' prior written notice to Tenant.
(d) "Tenant's Representative" means ▇▇▇▇▇ ▇▇▇▇▇ of Creative
Project Solutions, Inc. Tenant may designate another person as
Tenant's Representative at any time by three days' prior
written notice to Landlord.
(e) "Submission Date" means September 22, 2000.
(f) "Landlord's Allowance" means $802,912.00.
(g) "Leasehold Improvements" means all alterations, leasehold
improvements and installations to be constructed or installed
by Landlord for Tenant in the Building according to this Work
Letter, as described in the Construction Documents, but
excluding, any Base Building work.
(h) "Preliminary Plans" means space plans and general
specifications for the Leasehold Improvements.
(i) "Construction Documents" means complete construction plans and
specifications for the Leasehold Improvements.
(j) "Total Cost" means the total cost of obtaining all necessary
permits, undertaking all necessary preparation activities,
preparing the Preliminary Plans and the Construction
Documents, obtaining bids and estimates on all cost items,
constructing- and installing the Leasehold Improvements in the
Building, and providing any Building services required during
construction (such as electricity and other utilities, refuse
removal and janitorial). Total Cost will not include the cost
incurred by Landlord in conducting the initial meeting between
Tenant, Landlord and Landlord's architect to begin work on the
Preliminary Plans.
(k) "Base Building" means the installation of eight 15-ton rooftop
HVAC units with gas and electric hookups on the Building, the
installation of new windows in the Building as depicted on the
plan attached hereto as Attachment 1, the installation of
2,000 ▇▇▇, ▇▇▇/▇▇▇▇, ▇-▇▇▇▇▇ electric service to the Building
and the installation of the restrooms and plumbing per
Attachment 1. The Base Building work will be performed by
Landlord at its sole cost and expense, which costs will not be
included within Total Cost and will not be paid out of the
Landlord's Allowance.
2. Landlord's Obligations. Landlord will proceed to complete the
Leasehold Improvements according to this Work Letter and tender possession of
the Premises to Tenant when the Leasehold Improvements have been completed to
the extent that only minor construction details that do not materially interfere
with Tenant's use and enjoyment of the Premises, require completion or
correction. Tenant will accept the Premises when Landlord tenders possession,
provided that the Leasehold Improvements have been substantially completed as
described above, and provided further that Tenant will not be required to accept
possession prior to the Scheduled Commencement Date. Landlord and Tenant agree
that all alterations, improvements and additions made to the Premises according
to this Work Letter, whether paid for by Landlord or Tenant, will, without
compensation to Tenant, become Landlord's property upon installation and will
remain Landlord's property at the expiration or earlier termination of the Term.
27
3. Early Occupancy. Subject to the reasonable approval of Landlord's
contractor, Tenant will have a license to access the Building during the 60-day
period preceding the day on which Landlord reasonably estimates that the
Leasehold Improvements will be substantially completed for the purpose of
permitting Tenant to complete installation of data, telephone and other
communications and furniture installations necessary for the conducting of
Tenant's business from the Premises ("Tenant's Installations"). The making of
Tenant's Installations and all work performed in connection therewith will be
subject to the terms and conditions of Paragraph 14 and subparagraphs (a)
through (e) of Paragraph 13. With Landlord's express written consent, Tenant may
occupy the Premises for regular conduct of Tenant's business prior to the
Scheduled Commencement Date. If Tenant takes possession of any part of the
Premises for its regular business purposes prior to the Scheduled Commencement
Date with Landlord's prior written consent, then: (a) all of the covenants and
conditions of the Lease will bind both parties with respect to such portion of
the Premises; (b) Tenant will pay Landlord Rent for the period of such occupancy
according to the Lease at the rates applicable to the first Lease Year, prorated
for the time and portion of the Premises so occupied; and (c) Tenant will not
encase in or permit any activities that interfere with any construction work
being conducted within or about the Building, by Landlord, its employees or
contractors. No early occupancy under this Paragraph 3 will change the
Commencement Date or the Termination Date.
4. Delayed Occupancy. If Landlord fails to tender possession of the
Premises to Tenant according to Paragraph 2 above on or before the Scheduled
Commencement Date, Landlord will not be in default or liable in damages to
Tenant, nor will the obligations of Tenant be affected, provided, however, that:
(a) The Commencement Date will be extended automatically by one
day for each day of the period after the Scheduled
Commencement Date to the day on which Landlord tenders
possession of the Premises to Tenant in accordance with
Paragraph 2 above, less any portion of that period
attributable to Tenant's delay as more particularly described
in Paragraph 15, and
(b) if Landlord does not tender possession of the Premises to
Tenant in accordance with Paragraph 2 above on or before June
1, 2001 (as extended by any period of delay caused by Tenant's
delay as described in Paragraph 15 below), Tenant will have
the right to terminate the Lease by delivering written notice
of termination to Landlord not more than 30 days after such
tender deadline date. Upon a termination of this Lease under
this subparagraph (b), each party will, upon the other's
request, execute and deliver an agreement in recordable form
containing, a release and surrender of all right, title and
interest in and to the Lease; neither Landlord nor Tenant will
have any further obligations to each other, including, without
limitation, any obligations to pay for work previously
performed in the Premises; all improvements to the Premises
will become and remain the property of Landlord, and Landlord
will refund to Tenant any sums paid to Landlord by Tenant in
connection with the Lease, including,, without limitation, any
payments to Landlord of construction costs for the Premises.
Such postponement of the commencement of the Term and such
termination and refund right will be in full settlement of all
claims that Tenant might otherwise have against Landlord by
reason of Landlord's failure to substantially complete its
obligations under this Work Letter by the Scheduled
Commencement Date.
5. Punch List. Subject to Paragraph 11, Tenant's taking possession of
any portion of the Premises will be conclusive evidence that such portion of the
Premises was in good order and satisfactory condition when Tenant took
possession, except as to any defects identified on a Punch list prepared and
signed by Landlord's Representative and Tenant's Representative after an
inspection of the Premises by both such parties when Tenant takes possession.
Landlord will correct and complete all punch list items as soon as practicable
following such inspection; provided, however, that Landlord will not be
responsible for any items of damage caused by Tenant, its agents, employees,
independent contractors or suppliers. No promises to alter, remodel or improve
the Premises or Building and no representations concerning the condition of the
Premises or Building have been made by Landlord to Tenant other than as may be
expressly stated in the Lease (including, this Work Letter).
6. Representatives. Landlord appoints Landlord's Representative to act
for Landlord in all matters covered by this Work Letter. Tenant appoints
Tenant's Representative to act for Tenant in all matters covered by this Work
Letter. All inquiries, requests, instructions, authorizations and other
communications with respect to the matters covered by this Work Letter will be
made to Landlord's Representative or Tenant's Representative, as the case may
be.
7. Preliminary Plans. On or before the Submission Date, Tenant will
cooperate with Landlord and submit all information necessary for preparation of
the Preliminary Plans (the "Design Information"). Each day after the Submission
Date until Tenant has provided all Desit7n Information will be a day of Tenant's
delay. Promptly after receipt of all Design Information, Landlord will cause its
Architect to prepare the Preliminary Plans based on the submitted Design
Information. Within 5 business days after receipt of the proposed Preliminary
Plans, Tenant will
28
either approve the same in writing or notify Landlord in writing, of how the
proposed Preliminary Plans are inconsistent with the Design Information and how
the Preliminary Plans must be chanced in order to overcome Tenant's objections.
Each day following the 5th business day after the proposed Preliminary Plans are
submitted to Tenant until Tenant either approves them or delivers such notice of
objections will be a day of Tenant's delay. Upon receipt of Tenant's notice of
objections, Landlord will cause its architect to prepare revised Preliminary
Plans according to such notice and submit the revised Preliminary Plans to
Tenant. Upon submittal to Tenant of the revised Preliminary Plans, and upon
submittal of any further revisions, the procedures described above will be
repeated. If the revised Preliminary Plans or any further revisions, are
consistent with the Design Information and all requirements identified in
Tenant's prior notice(s) of objections, then each day following Landlord's
receipt of Tenant's notice of any additional objections until the day on which
Landlord receives Tenant's written approval of the Preliminary Plans will be a
day of Tenant's delay.
8. Cost Estimate. At such time as Preliminary Plans that have been
approved in writing or by both Landlord and Tenant have been prepared, Landlord
will obtain from Landlord's contractor, and notify Tenant of, an estimate of the
Total Cost based on the approved Preliminary Plans ("Cost Estimate"). If the
Cost Estimate is less than or equal to Landlord's Allowance, then Tenant will be
deemed to have approved the Cost Estimate. If the Cost Estimate is greater than
Landlord's Allowance, then Tenant, at Tenant's option, may either approve the
Cost Estimate in writing, or elect to eliminate or revise one or more items
shown on the Preliminary Plans so as to reduce the Cost Estimate and then
approve in writing the reduced Cost Estimate (based on the revised Preliminary
Plans). If the Cost Estimate is greater than Landlord's Allowance, then each day
following the 5th business day after Tenant's receipt of such Cost Estimate
until the day Landlord receives Tenant's written approval of the Cost Estimate
(as the same may have been revised) will be a day of Tenant's delay.
9. Construction Documents. At such time as the Cost Estimate has been
approved (or deemed approved) by Tenant, Landlord will cause its architect and
engineer to prepare the Construction Documents based strictly on the Preliminary
Plans. The Construction Documents will be subject to Landlord's approval. Within
5 business days after receipt of the Construction Documents, Tenant will either
approve the same in writing or notify Landlord in writing, of how the
Construction Documents are inconsistent with the Preliminary Plans and how the
Construction Documents must be changed in order to overcome Tenant's objections.
Each day following the 5th business day after the Construction Documents are
submitted to Tenant until Tenant either approves them or delivers such notice of
objections will be a day of Tenant's delay. Upon receipt of Tenant's notice of
objections, Landlord will cause its architect and engineer to prepare revised
Construction Documents according to such notice and submit the revised
Construction Documents to Tenant. Upon submittal to Tenant of the revised
Construction Documents, and upon submittal of any further revisions, the
procedures described above will be repeated. If the revised Construction
Documents, or any further revisions, are consistent with the Preliminary Plans
and all requirements identified in Tenant's prior notice(s) of objections, then
each day following Landlord's receipt of Tenant's notice of any additional
objections until the day on which Landlord receives Tenant's written approval of
the Construction Documents will be a day of Tenant's delay.
10. Cost Proposal. At such time as the Construction Documents have been
reviewed and approved pursuant to Paragraph 9 above, Landlord will obtain from
Landlord's contractor a bid for the Total Cost and will notify Tenant of the
proposed Total Cost (the "Cost Proposal"). If the Cost Proposal is less than or
equal to the Cost Estimate approved (or deemed approved) by Tenant, then Tenant
will be deemed to have approved the Cost Proposal. If the Cost Proposal is
greater than the Cost Estimate approved (or deemed approved) by Tenant, then
Tenant, at Tenant's option, may either approve the Cost Proposal in writing or
elect to eliminate or revise one or more items shown on the Construction
Documents so as to reduce the Cost Proposal and then approve in writing the
reduced Cost Proposal (based on the revised Construction Documents). If the Cost
Proposal approved or deemed approved by Tenant is greater than Landlord's
Allowance, then Tenant will immediately deposit with Landlord an amount (the
"Construction Deposit") equal to one-half of the difference between Landlord's
Allowance and the approved Cost Proposal. Each day following the 5th business
day after Tenant's receipt of the Cost Proposal until the day on which Landlord
has received Tenant's written approval of the Cost Proposal (if required) and
Landlord has received the Construction Deposit (if required) will be a day of
Tenant's delay.
11. Construction of Leasehold Improvements. At such time as Tenant has
approved (or is deemed to have approved) the Cost Proposal and has made any
required Construction Deposit, Landlord will cause the Leasehold Improvements
(and the Base Building work, if not already completed) to be constructed or
installed in the Premises in a good and workmanlike manner and according to the
Construction Documents and all applicable Laws. Upon substantial completion of
the construction and installation of the Leasehold Improvements and prior to
Tenant's occupancy of the Premises, Tenant will pay to Landlord the amount, if
any, by which the Total Cost exceeds the sum of the Landlord's Allowance and the
Construction Deposit. If Landlord's Allowance exceeds t e Total Cost, Tenant
will be entitled, during the Term of the Lease, to use the unused portion of
Landlord's Allowance (the "Remaining Landlord's Allowance") for Approved
Additional Leasehold Improvements. "Approved Additional Leasehold Improvements"
shall mean any additional alterations, leasehold improvements and installations
to be constructed or
29
installed by Tenant in the Premises, excluding any repairs, replacements and/or
maintenance to the Base Building work and the Leasehold Improvements. Approved
Additional Leasehold Improvements shall be subject to Landlord's prior written
approval in accordance with the terms and provisions of the Lease and this Work
Letter, which approval shall not be unreasonably withheld or delayed. Plans and
specifications for Approved Additional Leasehold Improvements shall be subject
to Landlord's approval according to Paragraph 14 below. If Landlord approves
Tenant's plans for the Approved Additional Leasehold Improvements, Tenant may
perform or cause to be performed the Approved Additional Leasehold Improvements
in accordance with and subject to the applicable terms, covenants and conditions
of the Lease and this Work Letter, including specifically, without limitation,
Paragraph 13 below and Paragraphs 8 and 9 of the Lease. With respect to the
Approved Additional Leasehold Improvements, Landlord agrees to pay Tenant an
allowance to be applied to the cost of designing and performing the Approved
Additional Leasehold Improvements in an amount equal to the lesser of (a)
Tenant's costs; or (b) the Remaining Landlord's Allowance. Landlord will
distribute the Remaining Landlord's Allowance (or any portion thereof actually
used by Tenant as herein provided), in a single payment to Tenant within thirty
(30) days after (a) Tenant has completed all of the Approved Additional
Leasehold Improvements in the Premises, and (b) Tenant delivers to Landlord
original lien waivers from all contractors and any and all applicable
subcontractors or suppliers indicating that claims for mechanics' or material
men's liens with respect to the Approved Additional Leasehold Improvements for
the Premises have been waived. Additionally, Tenant shall provide to Landlord
written notice from all contractors and Tenant's architect (or other evidence
satisfactory to Landlord) that the Approved Additional Leasehold Improvements
for the Premises have been completed.
12. Change Orders. Tenant's Representative may authorize chances in the
Leasehold Improvements work during construction only by written instructions to
Landlord's Representative on a form approved by Landlord. All such changes will
be subject to Landlord's prior written approval according to Paragraph 14 below.
Prior to commencing any change, Landlord will prepare and deliver to Tenant, for
Tenant's approval, a change order ("Change Order") identifying the total cost of
such change, which will include associated architectural, engineering and
construction contractor's fees, and an amount sufficient to reimburse Landlord
for overhead and related expenses incurred in connection with the Change Order.
If Tenant fails to approve and pay for such Change Order within 10 days after
delivery by Landlord, Tenant will be deemed to have withdrawn the proposed
change and Landlord will not proceed to perform the chance. Upon Landlord's
receipt of Tenant's approval and payment, Landlord will proceed to perform the
change.
13. Additional Tenant Work. If Tenant desires any work in addition
to the Leasehold Improvements and Tenant's Installations to be
performed in the Premises ("Additional Tenant Work"), Tenant,
at Tenant's expense, will cause plans and specifications for
such work to be prepared either by Landlord's architect or
engineer or by consultants of Tenant's own selection. All
plans and specifications for Additional Tenant Work will be
subject to Landlord's approval according to Paragraph 14
below. If Landlord approves Tenant's plans and specifications
for any Additional Tenant Work, Landlord will, subject to the
following terms and conditions, grant to Tenant and Tenant's
agents a license to enter the Premises prior to the Scheduled
Commencement Date in order that Tenant may perform or cause to
be performed the Additional Tenant Work according to the plans
and specifications previously approved by Landlord:
(a) Tenant will give Landlord not less than 5 days prior
written notice of the request to have such access to
the Premises, which notice must contain or be
accompanied by: (i) a description and schedule for
the work to be performed by those persons and
entities for whom such early access is being
requested; (ii) the names and addresses of all
contractors, subcontractors and material suppliers
for whom such access is being requested; (iii) the
approximate number of individuals, itemized by trade,
who will be present in the Premises; (iv) copies of
all contracts pertaining to the performance of the
work for which such early access is being requested;
(v) copies of all licenses and permits required in
connection with the performance of the work for which
such access is being requested; (vi) certificates of
insurance and instruments of indemnification against
a claims, costs, expenses, damages, suits, fines,
penalties, actions, causes of action and liabilities
which may arise in connection with such work, and
(vii) assurances of the availability of funds
sufficient to pay for all such work, if such
assurances are requested by Landlord. Each of such
matters will be subject to Landlord's approval, which
approval will not be arbitrarily withheld.
(b) Such early access is subject to scheduling by
Landlord.
(c) Tenant's agents, contractors, workers, mechanics,
suppliers and invitees must work in harmony and not
interfere with Landlord and Landlord's agents in
doing work in the Premises and in other premises and
Common Areas of the Building or the general operation
of the Building. If at any time any agent,
contractor, worker, mechanic, supplier or invitee of
Tenant
30
causes or threatens to cause disharmony or
interference, including labor disharmony, Landlord
may immediately withdraw Tenant's license for access.
(d) If Landlord's work in the Premises and Tenant's work
in the Premises (under such license granted by
Landlord) progress simultaneously, Landlord will not
be liable for any injury to person or damage to
property of Tenant, or of Tenant's contractors,
employees, licensees or invitees, from any cause
whatsoever occurring upon or about the Premises, and
Tenant will indemnify and save Landlord harmless from
any and all liability and claims arising out of or
connected with any such injury or damage.
(e) Tenant agrees that it is liable to Landlord for any
damage to the Building (including the Premises) or
any portion of the work in the Building caused by
Tenant or any of Tenant's employees, agents,
contractors, workers or suppliers.
14. Landlord's Approval. All Preliminary Plans, Construction Documents
and Change Orders, and any drawing space plans, plans and specifications for
Tenant's Installations and any Additional Tenant Work or any other improvements
or installations in the Premises, are expressly subject to Landlord's prior
written approval. Landlord may withhold its approval of any such items that
require work which:
(a) exceeds or adversely affects the capacity or
integrity of the Building's structure or any of its
heating, ventilating, air conditioning, plumbing,
mechanical, electrical, communications or other
systems;
(b) is not approved by the holder of any encumbrance upon
the Premises;
(c) violates any agreement which affects the Premises or
binds Landlord;
(d) Landlord reasonably believes will reduce the market
value of the Premises at the end of the Term;
(e) does not comply with any applicable Law or is not
approved by any governmental authority having
jurisdiction over the Premises; or
(f) would create any unsafe or hazardous condition or
risk of casualty or injury to person or property.
15. Tenant's Delays. The Term of the Lease (and therefore Tenant's
obligation for the payment of Rent) will not commence until Landlord has
substantially completed all work to be performed by Landlord pursuant to
Paragraph 11 above; provided, however, that if Landlord is delayed in
substantially completing such work as a result of:
(a) any Tenant's delay described in Paragraphs 7, 8 or 9
above;
(b) any Change Orders or changes in any drawings, plans
or specifications requested by Tenant;
(c) tenant's failure to review or approve in a timely
manner any item requiring Tenant's review or
approval;
(d) performance of any of Tenant's Installations or
Additional Tenant Work or any failure to complete or
delay in completion of such work; or
(e) any other act or omission of Tenant or Tenant's
architects, engineers, contractors or subcontractors
(all of which will be deemed to be delays caused by
Tenant), then the Commencement Date will only be
extended under Paragraph 4 above until the date on
which Landlord would have substantially completed the
performance of such work but for such delays.
16. General. No approval by Landlord or Landlord's architect or
engineer of any drawings, plans or specifications which are prepared in
connection with construction of improvements in the Premises will constitute a
representation or warranty by Landlord as to the adequacy or sufficiency of such
drawings, plans or specifications, or the improvements to which they relate, for
any use, purpose or condition, but such approval will merely be the consent of
Landlord to the construction or installation of improvements in the Premises
according to such drawings, plans or specifications. Failure by Tenant to pay
any amounts due under this Work Letter will have the same effect as failure to
pay Rent under the Lease, and such failure or Tenant's failure to perform any of
its other obligations under this Work Letter will, subject to the notice and
cure provisions of the Lease, constitute a Default under Section 19.1 of the
Lease, entitling Landlord to all of its remedies under the Lease as well as all
remedies otherwise available to Landlord.