Lease Agreement with Pawnee Properties, LLC.
EXHIBIT
10.27
Lease
Agreement with Pawnee Properties, LLC.
LEASE
PAWNEE
PROPERTIES, LLC
(as
Landlord)
and
(as
Tenant)
LEASE
THIS
LEASE is made this 27th day of July, 2006, by and between PAWNEE PROPERTIES,
LLC, a Colorado limited liability company ("Landlord") and AEROGROW
INTERNATIONAL, INC. a Nevada corporation (“Tenant”).
WITNESSETH:
1.
DEFINITIONS
In
addition to other terms, which are defined elsewhere in this Lease, the terms
defined in the following subparagraphs of this Paragraph 1 shall have the
meanings set forth in such subparagraph whenever used in this Lease with the
first letter of each word capitalized.
a. “Additional
Rent” shall mean Tenant’s Pro Rata Share of Operating Expenses and such other
charges as are required to be paid by Tenant to Landlord.
b.
"Base
Rent" or “Basic Rental” shall mean annual rental for the first year of the
Primary Lease Term of ONE HUNDRED EIGHTY-NINE THOUSAND ONE HUNDRED EIGHT AND
NO/100’s Dollars ($189,108.00) payable in equal monthly installments of FIFTEEN
THOUSAND SEVEN HUNDRED FIFTY-NINE AND NO/100’s Dollars
($15,759.00).
c. “Brokers”
shall mean The Colorado Group, Inc. and ▇▇▇▇▇▇▇▇ Commercial, LLC for Landlord
and ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Ltd. for Tenant.
d. "Building"
shall mean that certain building and other improvements located at ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the real property upon which such building
and improvements is located.
e. “Commencement
Date” shall mean the date the Lease commences pursuant to paragraphs 3(b) or
3(l).
f. "Common
Areas" shall mean those portions of the Building, which are made available
on a
non-exclusive basis for general use in common, including landscaping and lawn
sprinkler systems, of tenants, their employees, agents and invitees. Landlord
shall have the right from time-to-time to change the location or character
of
and to make alterations of or additions to the Common Areas, and to repair
and
reconstruct the Common Areas.
g. Intentionally
Deleted.
h. The
following exhibits, riders and/or addenda are attached to this Lease and
expressly incorporated herein by this reference:
Exhibit
A Depiction
of the Premises
Exhibit
B Rules
and
Regulations
Exhibit
C Form
Tenant Estoppel Certificate
Exhibit
D Form
Subordination, Non-disturbance and Attornment Agreement
Exhibit
E Work
Letter
Exhibit
F 2006
Estimated Operating Expenses
i. "Landlord's
Notice Address" shall mean c/o Chrisman Commercial ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, or such other address as Landlord
may from time-to-time designate.
j. “Lease
Year” shall mean each twelve month period during the Primary Lease Term or
extension thereof.
k. “Operating
Expenses” shall mean all costs and expenses of every kind and nature paid or
incurred by Landlord in the operation, management, repair, maintenance and
administration of the Building as set forth in Paragraph 6 below.
l. “Parking
Spaces” shall mean eighty-six (86) unassigned and uncovered parking spaces in
areas on the Property, which Landlord designates from time-to-time for parking
by tenants in the Building.
m. "Premises"
shall mean those certain premises located on the first and second floor of
the
Building known as Suite 200, which the parties agree is comprised of
approximately 21,012 rentable square feet as depicted on Exhibit A attached
hereto.
n. "Primary
Lease Term." Subject to adjustment as set forth in Paragraph 3b below, the
term
of the Lease shall commence at 12:01 a.m. on the 1st day of December, 2006
and
shall terminate at 12:00 midnight on the 31st day of January, 2012, unless
modified pursuant to paragraph 3(b), a term of five (5) years and two (2)
months.
o. "Prime
Rate" shall mean the rate quoted from time-to-time in the Money Rates section
of
The Wall Street Journal that leading banks are charging to their most
credit-worthy customers.
p. "Property"
shall mean that certain real property on which the Building is situated, located
in Boulder, Colorado more particularly described as ▇▇▇ ▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ of Colorado.
q. "Rent"
shall mean Basic Rent together with all other monetary obligations (or other
obligations which are capable of being reduced to a monetary sum) under this
Lease.
r. "Rentable
Area" shall mean 39,626 square feet which is all rentable space available for
lease in the Building. If there is a significant change in the aggregate
Rentable Area as a result of an addition to the Building, partial destruction
thereof, modification to the design of the Building, or similar cause which
causes a reduction or increase thereto on a permanent basis, Landlord shall
make
such adjustment in the computations as shall be necessary to provide for any
such change. Tenant agrees that the Rentable Area may be recalculated in the
event that the Building and/or the Premises is re-measured. Notwithstanding
such
re-measurement, Tenant's Pro Rata Share and Base Rent shall not be increased
or
decreased during the Primary Lease Term.
s.
“Reserve
Amount” shall mean a reserve for replacement of heating, ventilating and
air-conditioning unit, replacement of the roof, and parking lot in the amount
of
NINETEEN THOUSAND EIGHT HUNDRED THIRTEEN AND NO/100’s Dollars
($19,813.00)).
t. “Security
Deposit" shall mean the sum of TWENTY-FOUR THOUSAND FOUR HUNDRED TWENTY-SIX
AND
45/100’s Dollars ($24,426.45).
u. "Tenant's
Notice Address" shall mean ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇.
v. "Tenant's
Permitted Use" shall mean administrative offices and assembly, machine shop,
and
grow labs for Tenant’s in-home garden unit.
w. "Tenant's
Pro Rata Share" shall mean 55.8166%. This percentage is calculated by dividing
the Premises square footage by 95% of the Rentable Area. In the event Tenant
at
any time during the Primary Lease Term, or any extensions thereof, leases
additional space in the Building, Tenant's Pro Rata Share shall be recomputed
by
dividing the total rentable square footage of the Premises then being leased
by
Tenant (including any additional space) by 95% of the Rentable Area and the
resulting percentage shall become Tenant's Pro Rata Share.
2. PREMISES. In
consideration of the payment of Rent and the keeping and performance of the
covenants and agreements by Tenant, as hereinafter set forth, Landlord hereby
leases and demises unto Tenant the Premises, together with a non-exclusive
right, subject to the provisions hereof, to use all appurtenances thereto,
including the Common Areas.
3. COMPLETION
OF THE PREMISES AND POSSESSION.
a. If
the
Premises have never been occupied and are not completed as of the date this
Lease is entered into and Landlord has agreed to complete the same to any extent
or the Premises have previously been occupied, but Landlord has agreed to
perform remodeling work thereon, provisions with respect to such completion
or
remodeling will be set forth in a work letter to be executed between Landlord
and Tenant concurrently herewith (the "Work Letter"), the form of which is
attached hereto as Exhibit E. Other than as set forth in the Work Letter,
Landlord shall have no obligation for the completion or remodeling of the
Premises, and Tenant shall accept the Premises in their "as is" condition on
the
date the Primary Lease Term commences. If Landlord is to complete or remodel
the
Premises and if the Premises are not "Ready for Occupancy," as hereafter
defined, on the date the Primary Lease Term is to begin, Tenant's obligation
to
pay the Base Rent, its Pro Rata Share of increases in Operating Expenses, and
other sums owing hereunder shall not commence until the Premises are Ready
for
Occupancy, provided, however, from the effective date hereof, other than the
payment of Rent, this Lease, and all of the covenants, conditions, and
agreements herein contained shall be in full force and effect. The postponement
of Tenant's obligation to pay Rent and other sums herein provided to be paid
by
Tenant for such period prior to the delivery of the Premises to Tenant, Ready
for Occupancy, as hereinafter defined, shall be in full settlement of all claims
which Tenant might otherwise have by reason of the Premises not being Ready
for
Occupancy on the date the Primary Lease Term is scheduled to begin. However,
if
Tenant takes possession of all or any part of the Premises prior to the date
the
Premises are Ready for Occupancy for the purpose of conducting its usual
business therein, all terms and provisions of this Lease shall apply, including
the obligations for the payment of all Rent, and other amounts owing hereunder.
"Ready for Occupancy" as used herein shall mean the date that Landlord shall
have substantially completed the Premises or any remodeling work to be performed
by Landlord, to the extent agreed to in the Work Letter. The issuance of all
required certificate(s) of occupancy (temporary or permanent), final inspection
or other approval from the governmental authority having jurisdiction over
the
Building allowing the Tenant to occupy the Premises shall control conclusively
the date upon which the Premises are Ready for Occupancy, and the obligation
to
pay Rent begins as aforesaid. In addition to the above, if Landlord is delayed
in delivering the Premises to Tenant due to the failure of a prior occupant
to
vacate the same, then the obligation for the payment of Rent and the
commencement of the term hereof shall also be postponed, as hereinabove set
forth, and such postponement shall be in full settlement of all claims which
Tenant may otherwise have by reason of such delay of delivery.
b. If
the
commencement of the Primary Lease Term is delayed pursuant to Paragraph 3a
above, and such commencement occurs on a day other than the first day of the
month, the Commencement Date of the Primary Lease Term shall be further delayed
until the first day of the following month and Tenant shall pay proportionate
Rent at the same monthly rate set forth herein (also in advance) for such
partial month. In the event said Commencement Date is so delayed, the expiration
of the term hereof shall be extended so that the Primary Lease Term will
continue for the full period set forth in Paragraph 1 hereof. As soon as the
Primary Lease Term commences, Landlord and Tenant shall execute an addendum
to
this Lease, if requested by either party, setting forth the exact date on which
the Primary Lease Term commenced and the expiration date of the Primary Lease
Term.
c.
Tenant
may take possession of part of the Premises that are the subject of a separate
certificate of occupancy prior to the date the entire Premises are Ready for
Occupancy (“Partial Occupancy”). If a portion of the Premises of at least one of
the two floors to be occupied is approved for occupancy, all terms and
provisions of this Lease shall apply, however Tenant shall only be responsible
for a pro rata portion of the Rent and Additional Rent during the period
commencing with the date the Tenant occupies the partially completed portion
of
the Premises and the date the entire Premises is Ready for Occupancy. A Partial
Occupancy shall not be deemed as the commencement of the Primary Lease
Term.
d. Landlord
represents and warrants that, to the best of Landlord’s knowledge, as of the
commencement of the Primary Lease Term all Building systems are in good working
order and condition, including base Building HVAC, electrical, fire and life
safety systems, plumbing and other mechanical systems, and all other elements
constituting the base Building shell and if not Landlord will be responsible
for
making and paying for the necessary repairs.
4. RENT.
Tenant
agrees to pay to Landlord as Base Rent, without prior notice or demand, the
following amounts:
Schedule
of Base Rent
|
Month(s)
|
Monthly
Base
Rent
|
Annual
Base
Rent
|
|||||
|
Dec
2006-Jan 2007
|
$
|
0.00
|
|||||
|
Feb
2007-Jan 2008
|
$
|
15,759.00
|
$
|
189,108.00
|
|||
|
Feb
2008-Jan 2009
|
$
|
17,510.00
|
$
|
210,120.00
|
|||
|
Feb
2009-Jan 2010
|
$
|
18,385.50
|
$
|
220,626.00
|
|||
|
Feb
2010-Jan 2011
|
$
|
18,385.50
|
$
|
220,626.00
|
|||
|
Feb
2011-Jan 2012
|
$
|
19,261.00
|
$
|
231,132.00
|
|||
|
Total
Base Rent:
|
$
|
1,071,612.00
|
Tenant
shall begin to pay the Base Rent on the date the Primary Lease Term commences
and thereafter on the first day of each month during the term hereof. All Rents
shall be paid in advance, without notice, set off, abatement, counterclaim,
deduction or diminution, at the Colorado Group, ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, or at such place
as
Landlord from time-to-time designates in writing. Tenant shall pay its first
installment of Basic Rent to Landlord simultaneously with its execution of
this
Lease. In addition, Tenant shall pay to Landlord Tenant's Pro Rata Share of
Operating Expenses as provided herein and such other charges as are required
by
the terms of this Lease to be paid by Tenant which shall be referred to herein
as "Additional Rent." Landlord shall have the same rights as to the Additional
Rent as it has in the payment of Base Rent.
5. SECURITY
DEPOSIT.
Simultaneously with its execution of this Lease, Tenant shall deposit with
Landlord the Security Deposit set forth in Paragraph 1t above, which shall
be
held by Landlord as security for the faithful performance by Tenant of all
the
terms, covenants, and conditions of this Lease to be kept and performed by
Tenant during the term hereof. If Tenant defaults with respect to any provision
of this Lease, including, but not limited to the provisions relating to the
payment of Rent, Landlord may (but shall not be required to) use, apply or
retain all or any part of the Security Deposit for the payment of any Rent
or
for the payment of any amount which Landlord may spend or become obligated
to
spend by reason of Tenant's default, or to compensate Landlord for any other
loss or damage which Landlord may suffer by reason of Tenant's default. If
any
portion of said Security Deposit is so used or applied, Tenant shall within
five
(5) days after written demand therefor, deposit cash with Landlord in an amount
sufficient to restore the Security Deposit to its original amount and Tenant's
failure to do so shall be an Event of Default under this Lease. Landlord shall
not be required to keep the Security Deposit separate from its general funds,
and Tenant shall not be entitled to interest on the Security Deposit. If Tenant
shall fully and faithfully perform every provision of this Lease to be performed
by it, the Security Deposit or any balance thereof shall be returned to Tenant
(or at Landlord's option, to the last assignee of Tenant's interest hereunder)
within sixty (60) days after the expiration of the Primary Lease Term or any
extension period thereof.
6. OPERATING
EXPENSES.
a. Operating
Expenses means all reasonable and necessary costs and expenses of every kind
and
nature, other than those expressly excluded below, paid or incurred by Landlord
in operating, managing, repairing, maintaining and administering the Building
including, without limitation:
(1) The
cost
of all insurance required to be kept by Landlord pursuant to this Lease or
by
any lender with respect to the Property, and any other insurance customarily
procured for other commercial buildings in the same geographical area as the
Building or which Landlord may reasonably elect to obtain with respect to the
operation or ownership of the Property and the part of any claim required to
be
paid under the deductible portion of any insurance policies carried by Landlord
in connection with the Property.
(2) The
cost
of general repairs, maintenance and replacements, made from time-to-time by
Landlord to the Property, including costs under mechanical or other maintenance
contracts and repairs and replacements of equipment used in connection with
such
maintenance and repair work. The foregoing excludes capital expenditures as
defined in Paragraph 6b(4) and costs for replacement of heating, ventilating
and
air-conditioning units, replacement of the roof, and parking lot which are
provided for by the Reserve Amount ,
(3) The
cost
of pest control, security services, window cleaning, janitorial and snow and
ice
removal services.
(4) The
cost
of maintaining and repairing common areas, maintaining and repairing
landscaping, and of maintaining and operating fire detection, fire prevention,
lighting and communications systems.
(5) The
cost
of all utilities (including, without limitation, water, sewer, gas and
electricity) used or consumed.
(6) Remuneration
(including wages, usual expense accounts and fringe benefits, costs to Landlord
of workmen's compensation and disability insurance and payroll taxes) and fees
of persons and companies to the extent directly engaged in operating, repairing,
maintaining, or administering the Property.
(7) The
cost
of professional property management fees (not to exceed 6% of Basic Rental
for
the Property) and costs incurred by Landlord or its agents in engaging
accountants or other consultants to assist in making the computations required
hereunder.
(8) The
cost
of capital improvements and structural repairs and replacements made in, on
or
to the Property that are [a] made in order to conform to changes subsequent
to
the Commencement Date in any applicable laws, ordinances, rules, regulations
or
orders of any governmental or quasi-governmental authority having jurisdiction
over the Property; [b] designed primarily or intended to reduce Operating
Expenses or the rate of increase in Operating Expense; or [c] incurred for
redecoration, renovation or replacement of floor coverings of Common Areas.
Landlord and Tenant agree that redecoration should not be required for the
Preliminary Lease Term. The items set forth above in [a] through [c] above
shall
hereafter be collectively referred to as the “Capital Improvements.” The cost of
such Capital Improvements shall be charged by Landlord to Operating Expense
in
equal annual installments over the useful life of such Capital Improvement
(as
reasonably determined by Landlord) together with interest on the balance of
the
unreimbursed cost at 4% above the Prime Rate.
(9) All
real
property taxes and assessments levied against the Building by any governmental
or quasi-governmental authority. The foregoing shall include any taxes,
assessments, surcharges, or service or other fees of a nature not presently
in
effect which shall hereafter be levied on the Building as a result of the use,
ownership or operation of the Building or for any other reason, whether in
lieu
of or in addition to, any current real estate taxes and assessments; provided,
however, any taxes which shall be levied on the rentals of the Building shall
be
determined as if the Building were Landlord's only property and, provided
further, that in no event shall the term "taxes or assessments," as used herein,
include any net federal or state income taxes levied or assessed on Landlord,
unless such taxes are a specific substitute for real property taxes. Such term
shall, however, include gross taxes on rentals. Expenses incurred by Landlord
for tax consultants and in contesting the amount or validity of any such taxes
or assessments shall be included in such computations. The term “assessment”
shall include so-called special assessments, license tax, business license
fee,
business license tax, commercial rental tax, levy, charge, penalty or tax,
imposed by any authority having the direct power to tax, including any city,
county, state or federal government, or any school, agricultural, lighting,
water, drainage or other improvement or special district thereof, against the
Premises, the Building, or the Property or any legal or equitable interest
of
Landlord therein. For the purposes of this Lease, any special assessments shall
be deemed payable in such number of installments as is permitted by law, whether
or not actually so paid. Tenant shall not be responsible to pay any fines,
late
charges or penalties assessed against Landlord as a result of Landlord's failure
to timely pay such taxes and assessments.
(10) Other
costs and expenses, including supplies, not otherwise expressly excluded
hereunder attributable to the operation, management, repair, maintenance and
administration of the Property.
(11) The
Reserve Amount.
b. Operating
Expenses shall not, however, include the following:
(1) Any
charge for depreciation of the Building and any principal, interest or other
finance charge.
(2) The
cost
of any work, including painting, decorating and work in the nature of tenant
finish, which Landlord performs for any tenant in the Building.
(3) The
cost
of repairs, replacements or other work occasioned by insured casualty or defects
in construction or equipment to the extent such cost is reimbursed to Landlord
(or not charged to Landlord) by reason of collected insurance proceeds (using
Landlord's good faith efforts to collect such proceeds) or any contractors',
manufacturers' or suppliers' warranties.
(4) Expenditures
required to be capitalized for federal income tax purposes before any reductions
for accelerated depreciation or other alternative expense method of such
expenditures allowable under federal income tax regulations (except as expressly
authorized in Paragraph 6a(8) herein).
(5) Leasing
commissions, advertising expenses and other costs incurred in leasing space
in
the Building except as otherwise expressly provided in this Lease.
(6) The
cost
of repairing or rebuilding necessitated by condemnation.
(7) The
cost
of any damage to the Property or any settlement, payment or judgment incurred
by
Landlord, resulting from Landlord's tortious act, neglect or breach of this
Lease that is not covered by insurance proceeds.
(8) Costs
(including, without limitation, attorneys fees) incurred by Landlord in
attempting to collect Rent or evict tenants from the Building.
(9) Costs,
including, without limitation, any penalties, fines and legal expenses incurred
by Landlord or any other tenant in the Building as a result of a violation
of
any federal, state or local law, code or regulation.
c. Costs
for
maintenance of HVAC equipment for the Premises shall be charged to Tenant by
Landlord as costs are incurred and shall be paid by Tenant concurrently with
Tenant’s payment of Rent. Landlord shall use reasonable efforts to allocate such
HVAC maintenance charges equitably among the tenants whose Premises are served
by such equipment.
d. On
the
date the Primary Lease Term commences and continuing each month thereafter
during the Primary Lease Term (and any extension thereof) Tenant shall pay
to
Landlord, at the same time as the Base Rent is paid, an amount equal to
one-twelfth (1/12) of Landlord's estimate of Tenant's Pro Rata Share of
Operating Expenses for the particular calendar year, with a final adjustment
to
be made between the parties at a later date for said calendar year in accordance
with the procedures set forth herein.
(1) As
soon
as practicable following the end of each calendar year, but in no event later
than one hundred and fifty (150) days after the end of the calendar year, during
the Primary Lease Term, or any extension thereof, Landlord shall submit to
Tenant a statement prepared by a representative of Landlord setting forth the
exact amount of Tenant's Pro Rata Share of the Operating Expenses for the
calendar year just completed. Beginning with each subsequent calendar year,
it
shall also set forth the estimated amount of Tenant's Pro Rata Share of
Operating Expenses for the new calendar year. In no event will the Rent to
be
paid by Tenant hereunder ever be less than the Base Rent set forth in Paragraph
1 above.
(2) To
the
extent that Tenant's Pro Rata Share of Operating Expenses for the period covered
by such statement is different from the estimated amount upon which Tenant
paid
during the calendar year just completed, Tenant shall pay to Landlord the
difference within twenty (20) days following receipt by Tenant of such statement
from Landlord or receive a credit on the next months' rental owing hereunder,
as
the case may be. Upon request, Landlord shall make available to Tenant for
its
review or audit, Landlord’s records of estimated or actual Operating Expenses.
Until Tenant receives such statement, Tenant's monthly Rent for the new calendar
year shall continue to be paid at the rate paid for the calendar year just
completed, but Tenant shall commence payment to Landlord of the monthly
installments of Rent on the basis of said statement beginning on the first
day
of the month following the month in which Tenant receives such statement.
Moreover, Tenant shall pay to Landlord or deduct from the Rent, as the case
may
be, on the date required for the first payment of Rent, as adjusted, the
difference, if any, between the monthly installments of Rent so adjusted for
the
new calendar year and the monthly installments of Rent actually paid during
the
new calendar year.
(3)
If,
during any particular calendar year, there is a change in the information on
which Landlord based the estimate upon which Tenant is then making its estimated
rental payments so that such estimate furnished to Tenant is no longer accurate,
Landlord shall be permitted to revise such estimate by notifying Tenant and
there shall be such adjustments made in the monthly rental on the first day
of
the month following the serving of such statement on Tenant as shall be
necessary by either increasing or decreasing, as the case may be, the amount
of
monthly Rent then being paid by Tenant for the balance of the calendar year
as
well as an appropriate adjustment in cash based upon the amount theretofore
paid
by Tenant during such particular calendar year pursuant to the prior estimate
(but in no event shall any such decrease result in a reduction of the Base
Rent).
e. Landlord's
and Tenant's responsibilities with respect to the Operating Expense adjustment
described herein shall survive the expiration or early termination of this
Lease, and Landlord shall have the right to retain the Security Deposit, or
so
much thereof as it deems necessary, to secure such payment attributable to
the
year in which this Lease terminates.
f. If
Tenant
shall dispute the amount of an adjustment submitted by Landlord or the proposed
estimated increase or decrease on the basis of which Tenant's Rent is to be
adjusted as provided in Paragraphs 6d(2) or 6d(3) above, Tenant shall give
Landlord written notice of such dispute within thirty (30) days after Landlord
advises Tenant of such adjustment or proposed increase or decrease. If Tenant
does not give Landlord such notice within such time, then Tenant shall be deemed
to have waived its right to dispute the amounts so determined. If Tenant timely
objects, Tenant shall have the right to engage its own certified public
accountants ("Tenant's Accountants") for the purpose of verifying the accuracy
of the statement complained of or the reasonableness of the estimated increase
or decrease. If Tenant's Accountants determine that an error has been made,
Landlord and Tenant's Accountants shall use reasonable efforts to agree upon
the
matter, failing which the parties shall settle the dispute by arbitration or
in
such other manner as they agree. Notwithstanding the pendency of any dispute
over any particular statement, Tenant shall continue to pay Landlord the amount
of the adjusted monthly installments of Rent determined by Landlord until the
adjustment has been determined to be incorrect as aforesaid. A delay by Landlord
in submitting any statement contemplated herein for any calendar year shall
not
affect the provisions of this Paragraph 6 or constitute a waiver of Landlord's
rights as set forth herein for said calendar year or any subsequent calendar
years during the Primary Lease Term and any extensions thereof.
g. Notwithstanding
anything contained herein to the contrary, if any lease entered into
by
Landlord with any tenant in the Building provides for a separate basis of
computation for any Operating Expenses with respect to its premises, then,
to
the extent that Landlord determines that an adjustment should be made in making
the computations herein provided for, Landlord shall be permitted to modify
the
computation of Operating Expenses and Rentable Area for a particular calendar
year, in order to eliminate or otherwise modify any such expenses which are
paid
for in whole or in part by such tenant. Furthermore, in making any computations
contemplated hereby, Landlord shall also be permitted to make such adjustments
and modifications to the provisions of this Paragraph 6 as shall be reasonably
necessary to achieve a fair and equitable allocation of the costs to the Tenant
based upon Tenant’s usage of such services and the intention of the parties
within this Paragraph 6.
h. The
list
of estimated operating expenses for the calendar year 2006 is attached hereto
as
Exhibit F. The Operating Expenses for the calendar year 2006 are estimated
to be
$186,588.00 per year or $4.96 per rentable square foot per year. Landlord makes
no representations that the Operating Expenses will be any more or less than
the
attached estimate. The pro rata portion of the $4.96 per rentable square foot
per year rate shall be paid by Tenant monthly with the Basic Rent through the
end of the first full calendar year of the Primary Lease Term.
7. USE.
Tenant
shall use the Premises for Tenant’s Permitted Use and shall not use or permit
the Premises to be used for any other purpose without the prior written consent
of Landlord. Tenant shall not do or permit anything to be done in or about
the
Premises nor bring or keep anything therein which will in any way increase
the
existing rate or affect any fire or other insurance upon the Building or any
of
its contents, or cause cancellation of any insurance policy covering said
Building or any part thereof or any of its contents. Tenant shall not do or
permit anything to be done in or about the Premises which will, in any way,
obstruct or interfere with the rights of other tenants or occupants of the
Building or injure or annoy them or use or allow the Premises to be used for
any
improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause,
maintain or permit any nuisance in, on or about the Premises. Tenant shall
not
commit or suffer to be committed any waste in or upon the Premises. Tenant
shall
comply with the Rules and Regulations for the Premises, as further described
in
Paragraph 18.
8. COMPLIANCE
WITH LAW.
Tenant
shall not use the Premises or permit anything to be done in or about the
Premises which will, in any way, conflict with any law, statute, ordinance
or
governmental rule or regulation now in force or which may hereafter be enacted
or promulgated. Tenant shall, at its sole cost and expense, promptly comply
with
all laws, statutes, ordinances and governmental rules, regulations or
requirements now in force or which may hereafter be in force, and with the
requirements of any board of fire insurance underwriters or other similar bodies
now or hereafter constituted, relating to, or affecting the condition, use
or
occupancy of the Premises. The judgment against Tenant, whether Landlord be
a
party thereto or not, that Tenant has violated any law, statute, ordinance
or
governmental rule, regulation or requirement, shall be conclusive of that fact
as between Landlord and Tenant.
9. ALTERATIONS
AND ADDITIONS.
Tenant
shall not make or suffer to be made any alterations, additions or improvements
(collectively, “Alterations”) to or of the Premises or any part thereof without
the prior written consent of Landlord, which shall not be unreasonably withheld.
Any Alterations to or of said Premises, including, but not limited to, wall
covering, paneling and built-in cabinet work, but excepting movable furniture
and trade fixtures, shall, on the expiration of the term, become a part of
the
realty and belong to Landlord and shall be surrendered with the Premises. In
the
event Landlord consents to the making of any Alterations to the Premises by
Tenant, the same shall be made by Tenant at its sole cost and expense, and
any
contractor or person selected by Tenant to make the same, must first be
reasonably approved of in writing by Landlord. Upon the expiration or earlier
termination of the term hereof, Tenant shall, upon the written demand by
Landlord, at Tenant's sole cost and expense, forthwith and with all due
diligence, remove any Alterations which have been designated by Landlord to
be
removed, and repair any damage to the Premises caused by such removal. Tenant
may, at Tenant’s option, request that Landlord make a determination as to
whether Landlord will waive the preceding sentence at the time Tenant obtains
approval from Landlord for such Alterations.
10. REPAIRS.
a. Tenant
shall, at its sole cost and expense, keep the Premises and every part thereof
in
good condition and repair, damage thereto from causes beyond the reasonable
control of Tenant and ordinary wear and tear excepted. Tenant shall, upon the
expiration or sooner termination of this Lease hereof, surrender the Premises
to
Landlord in good condition, ordinary wear and tear and damage from causes beyond
the reasonable control of Tenant excepted. Except as specifically provided
in an
addendum, if any, to this Lease, Landlord shall have no obligation whatsoever
to
alter, remodel, improve, repair, decorate or paint the Premises or any part
thereof, and the parties hereto affirm that Landlord has made no representations
to Tenant respecting the condition of the Premises or the Building except as
specifically herein set forth.
b. Landlord
shall repair and maintain the structural portions of the Building, including
the
roof, basic plumbing, air conditioning, heating, and electrical and sprinkler
systems installed or furnished by Landlord, unless such maintenance and repairs
are caused in part or in whole by the act, neglect, fault or omission of any
duty by Tenant, its agents, servants, employees or invitees, in which case
Tenant shall pay to Landlord the reasonable cost of such maintenance and
repairs. The cost of all such repairs (except repairs of structural defects)
shall be included in Operating Expenses. Landlord shall not be liable for any
failure to make any such repairs or to perform any maintenance unless such
failure shall persist for an unreasonable time after written notice of the
need
of such repairs or maintenance is given to Landlord by Tenant. Except as
specifically provided in Paragraph 21 below regarding reconstruction after
a
casualty, there shall be no abatement of Rent and no liability of Landlord
by
reason of any injury to or interference with Tenant's business arising from
the
making of any repairs, alterations or improvements in or to any portion of
the
Building or the Premises or in or to fixtures, appurtenances and equipment
therein. Except as provided in Paragraph 10 c and Paragraph 10 d below, Tenant
waives the right to make repairs at Landlord's expense under any law, statute
or
ordinance now or hereafter in effect.
c. Notwithstanding
the foregoing, if Landlord fails to make any repairs or to perform any
maintenance required of Landlord hereunder and within Landlord’s reasonable
control, and such failure shall persist for an unreasonable time (not less
than
fifteen (15) days) after written notice of the need for such repairs or
maintenance is given to Landlord and unless Landlord has commenced such repairs
or maintenance during such period and is diligently pursuing the same, Tenant
may (but shall not be required to) following a second notice (which notice
shall
have a heading in at least 12-point type, bold and all caps “FAILURE TO RESPOND
SHALL RESULT IN TENANT EXERCISING SELF-HELP RIGHTS”) and Landlord’s failure to
commence repairs within five (5) days after receipt of such second notice,
perform such repairs or maintenance in accordance with the provisions of this
Lease governing Tenant’s repairs and Alterations and Tenant shall be entitled to
offset all third party costs and expenses incurred by Tenant therefor against
the next monthly installment of Rent, provided Tenant delivers to Landlord
appropriate invoices and back-up documentation regarding such costs and
expenses.
d.
Notwithstanding any of the foregoing, in the event of an emergency involving
imminent threat to life or substantial property damage, which shall include
potential damage to Tenant’s growing laboratories for plants and Tenant’s
computer systems, Tenant shall be permitted to proceed, at Tenant’s option, to
repair or otherwise rectify such imminent threat and Tenant shall be entitled
to
offset all third party costs and expenses incurred by Tenant therefor against
the next monthly installment of Rent.
11. LIENS.
Tenant
shall keep the Premises and the Property free from any liens arising out of
any
work performed, materials furnished or obligations incurred by Tenant. Landlord
may require, at Landlord's sole option, that Tenant shall provide to Landlord,
at Tenant's sole cost and expense, a lien and completion bond or other security
reasonably acceptable to Landlord in an amount equal to one and one-half (1-1/2)
times any and all estimated cost of improvements, additions, or alterations
in
the Premises, to insure Landlord against any liability for mechanics' and
materialmen's liens and to insure completion of the work.
12. ASSIGNMENT
AND SUBLETTING.
Except
as expressly provided below, Tenant shall not either voluntarily or by operation
of law, assign or transfer this Lease or any portion or interest therein, and
shall not sublet the said Premises or any part thereof, or any right or
privilege appurtenant thereto, or suffer any other person (the employees,
agents, servants and invitees of Tenant excepted) to occupy or use the said
Premises, or any portion thereof, without the prior written consent of Landlord,
which will not be unreasonably withheld. Tenant may not mortgage, pledge or
encumber this Lease without Landlord’s prior written consent which may be
withheld in Landlord’s sole and absolute discretion. The consent to one
assignment, subletting, occupation or use by any other person shall not be
deemed to be a consent to any subsequent assignment, subletting, occupation
or
use by another person. Any such assignment or subletting without such consent
shall be void, and shall, at the option of Landlord, constitute an Event of
Default under this Lease.
Any
Rent
or other consideration realized by Tenant under any such assignment, subletting
or occupancy in excess of the Basic Rental and other sums payable hereunder,
after amortization of the reasonable and documented costs incurred by Tenant
for
leasing commissions and leasehold improvements in connection with such
assignment, subletting or occupancy over the term of such assignment, subletting
or occupancy, shall be paid to Landlord by Tenant. Landlord may charge a
reasonable fee not to exceed $1,000 to pay for its expenses to review any
proposed assignment, sublease, or encumbrance.
13. HOLD
HARMLESS.
a. Tenant
shall indemnify and hold harmless Landlord against and from any and all claims
arising from Tenant's use of the Premises for the conduct of its business or
from any activity, work, or other thing done, permitted or suffered by Tenant
in
or about the Property, and shall further indemnify and hold harmless Landlord
against and from any and all claims arising from any breach or default in the
performance of any obligation on Tenant's part to be performed under the terms
of this Lease, or arising from any act or negligence of Tenant, or any officer,
agent, employee, guest, or invitee of Tenant, and from all and against all
costs, reasonable attorneys' fees, expenses and liabilities incurred in or
about
any such claim or any action or proceeding brought thereon, and, in any case,
action or proceeding be brought against Landlord by reason of any such claim,
Tenant, upon notice from Landlord shall defend the same at Tenant's expense.
Tenant, as a material part of the consideration to Landlord, hereby assumes
all
risk of damage to property or injury to persons, in, upon or about the Premises,
from any cause other than Landlord's gross negligence or willful and wanton
acts. Landlord or its agents shall not be liable for any damage to property
entrusted to employees of the Building, nor for loss or damage to any property
by theft or otherwise, nor for any injury to or damage to persons or property
resulting from fire, explosion, falling plaster, steam, gas, electricity, water
or rain which may leak from any part of the Building or from the pipes,
appliances or plumbing works therein or from the roof, street or subsurface
or
from any other place resulting from dampness or any other cause whatsoever,
unless caused by or due to the gross negligence or willful and wanton acts
of
Landlord, its agents, servants or employees. Landlord or its agents shall not
be
liable for interference with the light or other incorporeal hereditament, loss
of business by Tenant, nor shall Landlord be liable for any latent defects
in
the Premises or in the Building. Tenant shall give prompt notice to Landlord
in
case of fire or accidents in the Premises or in the Building or of defects
therein.
b.
Landlord shall indemnify and hold harmless Tenant against and from any and
all
claims arising from Landlord's activity, work, or other thing done, permitted
or
suffered by Landlord in or about the Property, and shall further indemnify
and
hold harmless Tenant against and from any and all claims arising from any breach
or default in the performance of any obligation on Landlord's part to be
performed under the terms of this Lease, or arising from any act or negligence
of Landlord, or any officer, agent, or employee of Landlord, and from all and
against all costs, reasonable attorneys' fees, expenses and liabilities incurred
in or about any such claim or any action or proceeding brought thereon, and,
in
any case, action or proceeding be brought against Tenant by reason of any such
claim, Landlord, upon notice from Tenant shall defend the same at Landlord's
expense.
14. SUBROGATION.
Landlord and Tenant hereby mutually waive their respective rights of recovery
against each other for any loss, damage or claim under any fire, extended
coverage and other property insurance policies actually maintained by such
party
or required to be maintained by such party under the terms of this Lease. Each
party shall obtain any special endorsements, if required by their insurer to
evidence compliance with the aforementioned waiver.
15. LIABILITY
INSURANCE.
Tenant
shall, at Tenant's expense, obtain and keep in force during the term of this
Lease a policy of comprehensive public liability insurance with limits not
less
than $2,000,000, combined single limit, insuring Landlord and Tenant against
any
liability arising out of the ownership, use, occupancy or maintenance of the
Premises and all areas appurtenant thereto, as their interests may appear.
The
limit of said insurance shall not, however, limit the liability of Tenant
hereunder. Tenant may carry said insurance under a blanket policy, providing,
however, said insurance by Tenant shall have a Landlord's protective liability
endorsement attached thereto. If Tenant shall fail to procure and maintain
said
insurance, Landlord may, but shall not be required to, procure and maintain
same, but at the expense of Tenant. Tenant shall deliver to Landlord prior
to
occupancy of the Premises certificates evidencing the existence and amounts
of
such insurance. No policy shall be cancelable or subject to reduction of
coverage except after thirty (30) days' prior written notice to
Landlord.
16. SERVICES
AND UTILITIES.
Landlord agrees to furnish to the Premises during reasonable hours of generally
recognized business days, electricity for normal lighting and fractional
horsepower office machines and heat and air conditioning to keep the Premises
in
a condition consistent with other similar buildings in the Boulder area. If
Tenant wishes to have air conditioning and heat to the Premises between the
hours of 6pm and 6:30am Monday through Friday and the 48 hours of Saturday
and
Sunday, Tenant agrees to pay for the cost of the system as estimated by an
independent HVAC maintenance company. Landlord shall also maintain and keep
lighted the common stairs, common entries and toilet rooms in the Building
of
which the Premises are a part. Landlord shall not be liable for, and Tenant
shall not be entitled to, any reduction of rental by reason of Landlord's
failure to furnish any of the foregoing when such failure is caused by accident,
breakage, repairs, strikes, lockouts or other labor disturbances or labor
disputes of any character, or by any other cause, similar or dissimilar, beyond
the reasonable control of Landlord. Landlord shall not be liable under any
circumstances for a loss or injury to property, however occurring, through
or in
connection with or incidental to failure to furnish any of the foregoing, except
as to Landlord's gross negligence or willful and wanton acts. Wherever heat
generating machines or equipment are used in the Premises which affect the
temperature otherwise maintained by the air conditioning system, Landlord
reserves the right to install supplementary air conditioning equipment in the
Premises and the cost thereof, including the cost of installation, and the
cost
of operation and maintenance thereof shall be paid by Tenant to Landlord within
ten (10) days after demand by Landlord.
Tenant
will not, without written consent of Landlord, use any apparatus or device
in
the Premises, including, but without limitation thereto, electronic data
processing machines, punch card machines, and machines using in excess of 120
volts, which will in any way increase the amount of electricity usually
furnished or supplied for the use of the Premises as general office space;
nor
connect with electric current except through existing electrical outlets in
the
Premises, any apparatus or device, for the purpose of using electric current.
If
Tenant shall require water or electric current in excess of that usually
furnished or supplied for the use of the Premises as general office space,
Tenant shall first procure the reasonable prior written consent of Landlord.
Landlord may cause a water meter or electrical current meter to be installed
in
the Premises, so as to measure the amount of water and electric current consumed
for any such use. The cost of any such meters and of installation, maintenance
and repair thereof shall be paid for by Tenant and Tenant agrees to pay to
Landlord promptly upon demand therefor by Landlord for all such water and
electric current consumed as shown by said meters at the rates charged for
such
services by the local public utility furnishing the same, plus an additional
expense as reasonably determined by Landlord incurred in keeping account of
the
water and electric current so consumed. If a separate meter is not installed,
such excess cost for such water and electric current will be established by
an
estimate made by a utility company or electrical engineer.
Landlord
acknowledges that Tenant will require electricity and air conditioning for
Tenant’s grow lab facilities twenty four hours per day, three hundred and sixty
five days per year and Landlord and Tenant agree that a check meter shall be
installed as part of the Tenant Improvements to measure Tenant‘s additional
electrical usage related to such requirement associated with Tenants grow lab
facilities.
17. PERSONAL
PROPERTY TAXES.
Tenant
shall pay, or cause to be paid, before delinquency, any and all taxes levied
or
assessed and which become payable during the term hereof upon all Tenant's
leasehold improvements, equipment, furniture, fixtures and personal property
located in the Premises; except that which has been paid for by Landlord, and
is
the standard of the Building. In the event any or all of Tenant's leasehold
improvements, Alterations, equipment, furniture, fixtures and personal property
shall be assessed and taxed with the Building, Tenant shall pay to Landlord
its
share of such taxes within thirty (30) days after receipt by Tenant from
Landlord of a statement in writing setting forth the amount of such taxes
applicable to Tenant's property which statement shall include a copy of the
tax
▇▇▇▇.
18. RULES
AND REGULATIONS.
The
current Rules and Regulations for the Premises are attached hereto as Exhibit
B
and are incorporated herein by this reference. Tenant shall faithfully observe
and comply with the Rules and Regulations that Landlord shall, from
time-to-time, promulgate. Landlord reserves the right, from time-to-time, to
make all reasonable additions and modifications to said Rules and Regulations,
which shall be binding upon Tenant upon delivery of a copy of them to Tenant.
Landlord shall not be responsible to Tenant for the nonperformance of any said
Rules and Regulations by any other tenants or occupants. Landlord will use
commercially reasonable efforts to apply and enforce the Rules and Regulations
in a non-discriminatory manner.
19. HOLDING
OVER.
Tenant
shall have no right to hold over after the term without the express prior
written consent of Landlord which may be withheld in Landlord’s sole and
absolute discretion. If Tenant remains in possession of the Premises or any
part
after the expiration of the term hereof, without the express written consent
of
Landlord, such occupancy shall be on all terms of this Lease except on a
month-to-month basis and at a rental in the amount of one and one-half times
the
last monthly Rent.
20. ENTRY
BY LANDLORD.
Landlord
reserves, and shall during normal business hours upon reasonable notice to
Tenant (which may be verbal to Tenant’s on-site manager) the right to enter the
Premises, inspect the same, and to supply any service to be provided by Landlord
to Tenant hereunder, to submit said Premises to prospective purchasers or during
the last six months of the term to prospective tenants, to post notices of
non-responsibility, and to alter, improve or repair the Premises and any portion
of the Building of which the Premises are a part that Landlord may deem
necessary or desirable, without abatement of Rent and may for that purpose
in
connection with any work to be performed by Landlord under this Lease. Landlord
shall not be required to give any notice to Tenant in the event of any
emergency, for recurring services (e.g., janitorial) or if Tenant has vacated
the Premises. Landlord may erect scaffolding and other necessary structures
where reasonably required by the character of the work to be performed, always
providing that the business of Tenant shall not be interfered with unreasonably.
Tenant hereby waives any claim for damages or for any injury or inconvenience
to
or interference with Tenant's business, any loss of occupancy or quiet enjoyment
of the Premises, and any other loss occasioned thereby unless caused by gross
negligence or willful and wanton acts of Landlord. For each of the aforesaid
purposes, Landlord shall, at all times, have and retain a key with which to
unlock all of the doors in, upon and about the Premises, and Landlord shall
have
the right to use any and all means which Landlord may deem proper to open said
doors in an emergency, in order to obtain entry to the Premises without
liability to Tenant except for the gross negligence or willful and wanton
conduct of Landlord. Any entry to the Premises obtained by Landlord by any
of
said means, or otherwise shall not, under any circumstances, be construed or
deemed to be a forcible or unlawful entry into, or a detainer of, the Premises,
or an eviction of Tenant from the Premises or any portion thereof. Tenant shall
not change the locks to the Premises without Landlord’s written
consent.
21. RECONSTRUCTION.
In the
event the Premises, or the Building of which the Premises are a part, are
damaged by fire or other perils covered by extended coverage insurance, Landlord
agrees to forthwith repair the same to substantially the same condition as
existed immediately prior to such damage; and this Lease shall remain in full
force and effect, except that Tenant shall be entitled to a proportionate
reduction of the Rent while such repairs are being made, such proportionate
reduction to be based upon the extent to which the damage and the making of
such
repairs shall materially and adversely interfere with the business carried
on by
Tenant in the Premises. If the damage is due to the fault or neglect of Tenant
or its employees, there shall be no abatement of Rent.
In
the
event the Premises or the Building of which the Premises are a part are damaged
as a result of any cause other than the perils covered by fire and extended
coverage insurance, then Landlord shall forthwith repair the same within one
hundred and fifty (150) days of casualty, provided the extent of the destruction
be less than twenty percent (20%) of the then full replacement cost of the
Premises or the Building of which the Premises are a part. In the event the
destruction of the Premises or the Building is to an extent greater than twenty
percent (20%) of the full replacement cost, then Landlord shall have the option:
(1) to repair or restore such damage, this Lease continuing in full force and
effect, but the Rent to be proportionately reduced as hereinabove in this
Paragraph provided; or (2) give notice to Tenant at any time within thirty
(30)
days after such damage terminating this Lease as of the date specified in such
notice, which date shall be no less than thirty (30) and no more than sixty
(60)
days after the giving of such notice. In the event of giving such notice, this
Lease shall expire and all interest of Tenant in the Premises shall terminate
on
the date so specified in such notice and the Rent, reduced by a proportionate
amount, based upon the extent, if any, to which such damage materially
interfered with the business carried on by Tenant in the Premises, shall be
paid
up to date of said such termination. Notwithstanding anything to the contrary
contained in this paragraph, Landlord shall not have any obligation whatsoever
to repair, reconstruct or restore the Premises when the damage resulting from
any casualty covered under this paragraph occurs during the last twelve (12)
months of the term of this Lease or any extension thereof and in the event
of
such casualty during the last twelve (12) months of the term of this Lease,
and
Landlord shall have the right to terminate this Lease by giving written notice
to Tenant within thirty (30) days of such casualty.
Landlord
shall not be required to repair any injury or damage by fire or other cause,
or
to make any repairs or replacements of any panels, decoration, office fixtures,
railings, floor coverings, partitions, or any other property installed in the
Premises by Tenant unless covered by Landlord's insurance as part of the
Building.
Except
as
otherwise expressly authorized hereunder, Tenant shall not be entitled to any
compensation or damages from Landlord for loss of the use of the whole or any
part of the Premises or Tenant's personal property.
22. DEFAULT.
The
occurrence of any one or more of the following events shall constitute an Event
of Default:
a. The
vacating or abandonment of the Premises by Tenant, without payment of
Rent.
b. The
failure by Tenant to make any payment of Rent or any other payment required
to
be made by Tenant hereunder, as and when due.
c. The
failure by Tenant to observe or perform any of the covenants, conditions or
provisions of this Lease to be observed or performed by Tenant, other than
described in Paragraph 22b above, where such failure shall continue for a period
of thirty (30) days after written notice thereof by Landlord to Tenant;
provided, however, that if the nature of Tenant's default is such that more
than
thirty (30) days are reasonably required for its cure, then Tenant shall not
be
deemed to be in default if Tenant commences such cure within said thirty (30)
day period and thereafter diligently prosecutes such cure to
completion.
d. The
making by Tenant of any general assignment or general arrangement for the
benefit of creditors; or the filing by or against Tenant of a petition to have
Tenant adjudged a bankrupt, or a petition of reorganization or arrangement
under
any law relating to bankruptcy (unless, in the case of a petition filed against
Tenant, the same is dismissed within sixty [60] days); or the appointment of
a
trustee or a receiver to take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease, where possession
is not restored to Tenant within thirty (30) days; or the attachment, execution
or other judicial seizure of substantially all of Tenant's assets located at
the
Premises or of Tenant's interest in this Lease, where such seizure is not
discharged in thirty (30) days.
If
Landlord is in default in the performance of any obligation under this Lease
on
the part of Landlord to be performed and such default continues for a period
of
thirty (30) days after Tenant's written notice to Landlord specifying the nature
of the default, then Tenant may exercise any right or remedy it may possess
at
law or equity, which is not otherwise waived in this Lease. If the default
set
forth in Tenant's notice cannot reasonably be cured within thirty (30) days,
then Landlord shall not be deemed to be in default if (i) Landlord notifies
Tenant in writing that it will cure the default, (ii) commences to cure the
default within such thirty (30)-day period, and (iii) proceeds diligently and
in
good faith thereafter to cure such default and does cure such default within
a
reasonable time.
23. REMEDIES
IN DEFAULT.
In the
event of any Event of Default or other breach by Tenant, Landlord may at any
time thereafter, with or without notice or demand, and without limiting Landlord
in the exercise of a right or remedy which Landlord may have by reason of such
Event of Default or breach:
a. Reenter
and take possession of the Premises or any part thereof and repossess the same
as of Landlord's former estate and expel Tenant and those claiming through
or
under Tenant and remove the effects of both or either, without being deemed
guilty of any manner of trespass and without prejudice to any remedies for
arrears of Rent or preceding breach of covenants or conditions. Should Landlord
elect to reenter, as provided in this paragraph, or should Landlord take
possession pursuant to legal proceedings or pursuant to any notice provided
for
by law, Landlord may, from time-to-time, without terminating this Lease, relet
the Premises or any part thereof, either alone or in conjunction with other
portions of the Building of which the Premises are a part, in Landlord's or
Tenant's name but for the account of Tenant, for such term or terms (which
may
be greater or less than the period which would otherwise have constituted the
balance of the term of this Lease) and on such conditions and upon such other
terms (which may include concessions of free Rent and alteration and repair
of
the Premises) as Landlord, in its absolute discretion, may determine and
Landlord may collect and receive the Rents therefor. Landlord shall in no way
be
responsible or liable for any failure to relet the Premises, or any part
thereof, or for any failure to collect any Rent due upon such reletting, but
Landlord shall use commercially reasonable efforts to mitigate its damages.
No
such reentry or taking possession of the Premises by Landlord shall be construed
as an election on Landlord's part to terminate this Lease unless a written
notice of such intention be given to Tenant. No notice from Landlord hereunder
or under a forcible entry and detainer statute or similar law shall constitute
an election by Landlord to terminate this Lease unless such notice specifically
so states. Landlord reserves the right following any such reentry and/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 said
notice.
b. If
Landlord elects to take possession of the Premises as provided in Paragraph
23a
above without terminating the Lease, Tenant shall pay to Landlord (i) the Rent
and other sums as herein provided, which would be payable hereunder if such
repossession had not occurred, less (ii) the net proceeds, if any, of any
reletting of the Premises after deducting all of Landlord's expenses incurred
in
connection with such reletting, including, but without limitation, all
repossession costs, brokerage commissions, legal expenses, attorneys' fees,
expenses of employees, alteration, remodeling, and repair costs and expenses
of
preparation for such reletting. Unpaid installments of rent or other sums shall
bear interest from the date due at the rate of twenty percent (20%) per annum.
If, in connection with any reletting, the new lease term extends beyond the
existing term or the premises covered thereby include other premises not part
of
the Premises, a fair apportionment of the Rent received from such reletting
and
the expenses incurred in connection therewith, as provided aforesaid, will
be
made in determining the net proceeds received from such reletting. In addition,
in determining the net proceeds from such reletting, any Rent concessions will
be apportioned over the term of the new lease unless Tenant agrees otherwise.
Tenant shall pay such amounts to Landlord monthly on the days on which the
Rent
and all other amounts owing hereunder would have been payable if possession
had
not been retaken and Landlord shall be entitled to receive the same from Tenant
on each such day;
c. Give
Tenant written notice of intention to terminate this Lease on the date of such
given notice or on any later date specified therein and, on the date specified
in such notice, Tenant's right to possession of the Premises shall cease and
the
Lease shall thereupon be terminated, except as to Tenant's liability hereunder
as hereinafter provided, as if the expiration of the term fixed in such notice
were the end of the term herein originally demised. In the event this Lease
is
terminated pursuant to the provisions of this Paragraph, Tenant shall remain
liable to Landlord for damages in an amount equal to the Rent and other sums
which would have been owing by Tenant hereunder for the balance of the term
had
this Lease not been terminated less the net proceeds, if any, of any reletting
of the Premises by Landlord subsequent to such termination, after deducting
all
Landlord's expenses in connection with such reletting, including, but without
limitation, the expenses enumerated above. Landlord shall be entitled to collect
such damages from Tenant monthly on the days on which the Rent and other amounts
would have been payable hereunder if this Lease had not been terminated and
Landlord shall be entitled to receive the same from Tenant on each such day.
Alternatively, at the option of Landlord, in the event this Lease is terminated,
Landlord shall be entitled to recover forthwith against Tenant as damages for
loss of the bargain and not as a penalty an amount equal to the worth at the
time of termination of the excess, if any, of the amount of Rent reserved in
this Lease for the balance of the term hereof over the then Reasonable Rental
Value of the Premises for the same period plus all amounts incurred by Landlord
in order to obtain possession of the Premises and relet the same, including
attorneys' fees, reletting expenses, alterations and repair costs, brokerage
commissions and all other like amounts. It is agreed that the "Reasonable Rental
Value" shall be the amount of rental which Landlord can obtain as Rent for
the
remaining balance of the term. Landlord agrees to use commercially reasonable
efforts to mitigate its damages; or
d. Pursue
any other remedy now or hereafter available to Landlord under the laws or
judicial decision of the State of Colorado.
24. EMINENT
DOMAIN.
If more
than twenty-five percent (25%) of the Premises shall be taken or appropriated
by
any public or quasi-public authority under the power of eminent domain, either
party hereto shall have the right, at its option, to terminate this Lease by
giving written notice to the other party, and Landlord shall be entitled to
any
and all income, Rent, award, or any interest therein whatsoever which may be
paid or made in connection with such public or quasi-public use or purpose,
and
Tenant shall have no claim against Landlord or the condemning authority for
the
value of any unexpired term of this Lease. If either less than or more than
twenty-five percent (25%) of the premises is taken, or neither party elects
to
terminate as herein provided, the rental thereafter to be paid shall be
proportionately reduced. If more than ten percent (10%) of the Building other
than the Premises may be so taken or appropriated, Landlord shall have the
right
at its option to terminate this Lease by giving thirty (30) days written notice
to Tenant and shall be entitled to the entire award as above provided. Tenant
shall, however, have the right to pursue a separate claim directly against
the
condemning authority for any damage suffered as a result of such taking.
25. ESTOPPEL
STATEMENT.
Landlord and Tenant shall at any time and from time-to-time, upon not less
than
ten (10) business days' prior written notice from the other party, execute,
acknowledge, and deliver to the other party a statement in writing, (a)
certifying that this Lease is unmodified and in full force and effect (or,
if
modified, stating the nature of such modification and certifying that this
Lease
as so modified, is in full force and effect); (b) the date to which the rental
and other charges are paid in advance, if any; (c) acknowledging that there
are
not, to Tenant's or Landlord's knowledge, as appropriate, any uncured defaults
on the part of the other party hereunder, or specifying such defaults if any
are
claimed; and (d) such other items reasonably requested by the other party.
Any
such statement may be relied upon by any prospective purchaser or encumbrancer
of all or any portion of the real property of which the Premises are a part.
Unless as otherwise reasonably requested, Tenant Estoppel Statement shall be
substantially in the form attached hereto as Exhibit C.
26. PARKING.
Tenant
shall have the right to use in common with other tenants or occupants of the
Building the parking facilities of the Building, subject to the Rules and
Regulations. Landlord shall have no liability for any damage to property in
or
about the parking areas and Tenant hereby waives all claims arising in
connection therewith, and agrees to indemnify Landlord for any claims arising
out of or in connection with Tenant’s use of the Parking Spaces.
27. AUTHORITY
OF PARTIES.
Each
individual executing this Lease on behalf of Tenant represents and warrants
that
he is duly authorized to execute and deliver this Lease on behalf of Tenant,
in
accordance with a duly adopted resolution or in accordance with the operating
agreement, partnership agreement or other governing entity documentation, and
that this Lease is binding upon Tenant in accordance with its
terms.
28. GENERAL
PROVISIONS.
a. Waiver.
The waiver by Landlord of any term, covenant, or condition herein contained
shall not be deemed to be a waiver of such term, covenant or condition or any
subsequent breach of the same or any other term, covenant or condition herein
contained. The subsequent acceptance of Rent hereunder by Landlord shall not
be
deemed to be a waiver of any preceding breach by Tenant of any term, covenant
or
condition of this Lease, other than the failure of Tenant to pay the particular
rental so accepted, regardless of Landlord's knowledge of such preceding breach
at the time of the acceptance of such Rent.
b. Notices.
All notices and demands which may or are to be required or permitted to be
given
by either party to the other hereunder shall be in writing, except the verbal
notice by Landlord to Tenant as stated in Paragraph 20. All notices and demands
by Landlord to Tenant shall be sent by a) United States Mail, postage prepaid,
or b) nationally recognized overnight bonded courier, addressed to Tenant at
the
address set forth in Paragraph 1u above, or to such other place as Tenant may,
from time-to-time, designate in a notice to Landlord. All notices and demands
by
Tenant to Landlord shall be sent by a) United States Mail, postage prepaid,
or
b) nationally recognized overnight bonded courier, addressed to Landlord at
the
address set forth in Paragraph 1i above, or to such other person or place as
Landlord may, from time-to-time, designate in a notice to Tenant.
c. Joint
Obligation. If there is more than one entity or individual which compromises
Tenant under this Lease, then the obligations hereunder imposed upon Tenant
shall be joint and several.
d. Headings
and Paragraph Titles. The headings and paragraph titles of this Lease are for
reference purposes only and shall have no effect upon the construction or
interpretation of any part hereof.
e. Time.
Time is of the essence of this Lease and each and all of its
provisions.
f. Successors
and Assigns. The covenants and conditions herein contained, subject to the
provisions as to assignment, apply to and bind the heirs, successors, executors,
administrators and assigns of the parties hereto.
g. Recordation.
Tenant shall not record this Lease or a short form memorandum hereof or any
other document which makes reference to this Lease without the prior written
consent of Landlord which may be withheld in Landlord’s sole and absolute
discretion. Any such recording without Landlord’s consent shall be considered an
Event of Default.
h. Quiet
Possession. Upon Tenant paying the Rent reserved hereunder and observing and
performing all of the covenants, conditions and provisions on Tenant's part
to
be observed and performed hereunder, Tenant shall have quiet possession of
the
Premises for the entire term hereof against all parties claiming by, through
or
under Landlord, subject to all the provisions of this Lease.
i. Late
Charges. Tenant hereby acknowledges that late payment by Tenant to Landlord
of
Rent or other sums due hereunder will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed upon Landlord
by
terms of any mortgage or trust deed covering the Premises. Accordingly, if
any
installment of Rent or of a sum due from Tenant shall not be received by
Landlord or Landlord's designee within five (5) days after said amount is due,
then Tenant shall pay to Landlord a one-time late charge equal to five percent
(5%) of such overdue amount. The parties hereby agree that such late charges
represent a fair and reasonable estimate of the cost that Landlord will incur
by
reason of the late payment by Tenant. Acceptance of such late charges by
Landlord shall in no event constitute a waiver of Tenant's default with respect
to such overdue amount, nor prevent Landlord from exercising any of the other
rights and remedies granted hereunder.
j. Prior
Agreements. This Lease contains all of the agreements of the parties hereto
with
respect to any matter covered or mentioned in this Lease, and no prior
agreements or understanding pertaining to any such matters shall be effective
for any purpose. No provision of this Lease may be amended or added to except
by
an agreement in writing signed by the parties hereto or their respective
successors in interest. This Lease shall not be effective or binding on any
party until fully executed by both parties hereto.
k. Attorneys'
Fees. In the event of any action or proceeding brought by either party against
the other under this Lease, the prevailing party shall be entitled to recover
all costs and expenses, including the fees of its attorneys in such action
or
proceeding in such amount as the court may adjudge reasonable as attorneys'
fees.
l. Sale
of
Premises by Landlord. In the event of any sale of the Building, and assignment
of Tenant's Security Deposit to a purchaser, Landlord shall be and is hereby
entirely freed and relieved of all liability under any and all of its covenants
and obligations contained in or derived from this Lease arising out of any
act,
occurrence or omission occurring after the consummation of such sale; and the
purchaser, at such sale or any subsequent sale of the Premises, shall be deemed,
without any further agreement between the parties or their successors in
interest or between the parties and any such purchaser, to have assumed and
agreed to carry out any and all of the covenants and obligations of Landlord
under this Lease.
m. Subordination,
Non-Disturbance and Attornment. Within ten (10) days after request of Landlord,
Tenant will, in writing, subordinate its rights hereunder to the lien of any
first mortgage or first deed of trust to any bank, insurance company or other
lending institution, now or hereafter in force against the land and Building
of
which the Premises are a part, and upon any buildings hereafter placed upon
the
land of which the Premises are a part, and to all advances made or hereafter
to
be made upon the security thereof.
In
the
event any proceedings are brought for foreclosure, or in the event of the
exercise of the power of sale under any mortgage or deed of trust made by
Landlord covering the Premises, Tenant shall attorn to the purchaser upon any
such foreclosure or sale and recognize such purchaser as Landlord under this
Lease.
Tenant
will agree to confirm its subordination and attornment in the form attached
hereto as Exhibit D or pursuant to another subordination, non-disturbance and
attornment reasonably requested by Landlord’s lender.
Notwithstanding
anything to the contrary contained herein, Tenant shall only be obligated under
this Paragraph 28m if such bank, insurance company or other lending institution
or purchaser upon any such foreclosure or sale (a) recognizes Tenant's interest
under this Lease, (b) agrees that, so long as Tenant is not in default under
this Lease beyond any applicable cure periods, not to disturb Tenant's
possession of the Premises, and (c) executes and delivers a subordination,
non-disturbance and attornment agreement substantially in the form attached
hereto as Exhibit D or pursuant to another subordination, non-disturbance and
attornment reasonably requested by Landlord’s lender.
Within
ten (10) days after request of Tenant, Landlord will, in writing, execute a
landlord waiver of liens in favor of a secured lender of Tenant, such waiver
to
be in a form reasonably satisfactory to Landlord.
n. Name.
Tenant shall not use the name of the Building or of the development in which
the
Building is situated for any purpose other than as an address of the business
to
be conducted by Tenant in the Premises.
o. Separability.
Any provision of this Lease which shall prove to be invalid, void or illegal
shall in no way affect, impair or invalidate any other provision hereof and
such
other provision shall remain in full force and effect.
p. Cumulative
Remedies. No remedy or election hereunder shall be deemed exclusive but shall,
wherever possible, be cumulative with all other remedies at law or in
equity.
q. Choice
of
Law. This Lease shall be governed by the laws of the State of
Colorado.
r. Signs
and
Auctions. Tenant shall not place any sign upon the Premises or Building or
conduct any auction thereon without Landlord's prior written consent which
shall
not be unreasonably withheld, conditioned or delayed. Notwithstanding the
foregoing, Landlord agrees to provide to Tenant, at Tenant’s sole cost and
expense, Building standard signage on the monument sign for the Building and
Building standard directory signage during the term of this Lease. In addition,
Tenant shall have the right to secure signage on the exterior of the Building
upon satisfaction of the following requirements: (i) Tenant leases a minimum
of
75% of the Building and maintains the 75% minimum; (ii) Tenant submits plans
which detail the size, style and proposed location (on the Building) to Landlord
for its review and approval, which approval may be given, withheld, or
conditioned in its sole, absolute and subjective discretion; (iii) Tenant’s
Building sign complies with all applicable laws, ordinances, rules, regulations
or orders of any governmental or quasi-governmental authority having
jurisdiction over the Property and all restrictive covenants applicable to
the
Property and Tenant provides Landlord evidence of same; and (iv) Tenant pays
all
costs, fees and expenses (including permit fees) to have its sign affixed to
the
Building. Upon the expiration, earlier termination of this Lease or Tenant
leases less than 75% of the Building, Tenant shall, at its sole cost and
expense, remove the Building signage and repair, paint, and/or replace any
portion of the Building damaged or altered as a result of its Building signage
(including, without limitation, any discoloration of the Building).
s. Landlord's
Liability. The liabilities of the partners or members of Landlord pursuant
to
this Lease shall be limited to the assets of the partnership or limited
liability company, and Tenant, its successors and assigns hereby waive all
right
to proceed against any of the partners, members, or the officers, shareholders,
or directors of any corporate partner of Landlord. The term "Landlord," as
used
in this paragraph, shall mean only the owner or owners at the time in question
of the fee title or an interest in a ground lease of the Property.
Notwithstanding anything to the contrary contained herein, the extent of
Landlord's liability under this Lease shall be limited to the Property, and
Tenant shall not seek any personal liability against Landlord or any of
Landlord's partners or members.
t. Waiver
of
Jury Trial. Landlord and Tenant waive trial by jury in any action, proceeding
or
counterclaim brought by either of the parties to this Lease against the other
on
any matters whatsoever arising out of or in any way connected with this Lease,
the relationship of Landlord and Tenant, Tenant's use of occupancy of the
Premises, or any other claims (except claims for personal injury or property
damage), and any emergency statutory or any other statutory remedy.
u. Lender/Mortgagees.
This Lease, at Landlord’s option, shall be subordinate to any mortgage or deed
of trust (now or hereafter placed upon the land and the Building of which the
Premises are a part, and upon any buildings hereafter placed upon the land
of
which the Premises are a part, and to all advances made or hereafter to be
made
upon the security hereof), including any amendment, modification or restatement
of such documents. Tenant agrees that with respect to any of the foregoing
documents, no documentation, other than this Lease, shall be required to
evidence such subordination. Notice to Landlord of any such alleged default
shall be inef-fective unless notice is simultaneously delivered to any holder
of
a mortgage and/or deed of trust affecting all or any portion of the land and
the
Building of which the Premises are a part ("Mortgagees"), as hereafter provided.
Tenant agrees to give all Mortgagees, by certified mail, return receipt
requested, a copy of any notice of default served upon Landlord, provided that
prior to such notice Tenant has been notified, in writing (by way of notice
of
Assign-ment of Rents and Leases, or otherwise), of the address of such
Mortgagees. Tenant further agrees that if Landlord shall have failed to cure
such default within the time provided for in this Lease, then the Mort-gagees
shall have an additional thirty (30) days within which to cure such default
or,
if such default cannot be cured within that time, then such additional time
as
may be necessary, if, within such thirty (30) days, any Mortgagee has commenced
and is diligently pursuing the remedies necessary to cure such default
(includ-ing, but not limited to, commencement of foreclosure proceedings, if
necessary to effect such cure), in which event this Lease shall not be
terminated while such remedies are being so diligently pursued. In no event
will
Landlord or any Mortgagee be responsible for any consequential damages incurred
by Tenant as a result of any default, including, but not limited to, lost
profits or interruption of business as a result of any alleged default by
Landlord hereunder.
v. Arbitration.
Except for an action to gain possession of the Premises (and any corresponding
claim for damages resulting from Tenant’s alleged unlawful detainer) and except
as provided below, any and all disputes arising under or related to this Lease
which cannot be resolved through negotiations between the parties shall be
submitted to binding arbitration. If the parties fail to reach a settlement
of
their dispute within fifteen (15) days after the earliest date upon which one
of
the parties notified the other(s) of its desire to attempt to resolve the
dispute, then the dispute shall promptly be submitted to arbitration by a single
arbiter through the Judicial Arbiter Group ("JAG"), any successor of the
Judicial Arbiter Group, or any similar arbitration provider who can provide
a
former judge to conduct such arbitration if JAG is no longer in existence,
or an
arbiter appointed by the court. The arbiter shall be selected by JAG or the
court on the basis, if possible, of his or her expertise in the subject
matter(s) of the dispute. The decision of the arbiter shall be final,
nonappealable and binding upon the parties, and it may be entered in any court
of competent jurisdiction. The arbitration shall take place in Boulder,
Colorado. The arbitrator shall be bound by the laws of the State of Colorado
applicable to the issues involved in the arbitration and all Colorado rules
relating to the admissibility of evidence, including, without limitation, all
relevant privileges and the attorney work product doctrine. All such discovery
shall be completed in accordance with the time limitations prescribed in the
Colorado Rules of Civil Procedure, unless otherwise agreed by the parties or
ordered by the arbitrator on the basis of strict necessity adequately
demonstrated by the party requesting an extension or reduction of time. The
arbitrator shall have the power to grant equitable relief where applicable
under
Colorado law. The arbitrator shall issue a written opinion setting forth her
or
his decision and the reasons therefor within thirty (30) days after the
arbitration proceeding is concluded. The obligation of the parties to submit
any
dispute arising under or related to this Agreement to arbitration as provided
in
this Paragraph shall survive the expiration or earlier termination of this
Agreement. Notwithstanding the foregoing, either party may seek and obtain
an
injunction or other appropriate relief from a court to preserve or protect
the
status quo with respect to any matter pending conclusion of the arbitration
proceeding, but no such application to a court shall in any way be permitted
to
stay or otherwise impede the progress of the arbitration
proceeding.
w. Financial
Statements. Tenant shall provide their most recent annual financial statements,
including statements of income and expense and statements of net worth
("financial statements") within (fifteen) 15 business days following the written
request of Landlord. Landlord may request said annual financial statements
no
more than twice during any twelve (12) month period. Said financial statements
shall be verified as being true and correct and Landlord agrees to keep said
financial statements confidential, but may use said annual financial statements
for purposes of obtaining financing upon or in connection with the sale of
the
Property. At the time Landlord requests financial statements from Tenant,
Landlord shall advise Tenant if the financial statements will be given to a
third party and to whom the financial statements will be submitted and Landlord
shall, if requested to do so by Tenant, use commercially reasonable efforts
to
obtain from such individual or entity a written agreement which shall provide
that said financial statements will be and shall remain confidential. If Tenant
has not previously submitted the required financial statements to Landlord,
within fifteen (15) days after the execution of this Lease, Tenant shall submit
to Landlord its most recent financial statements.
29. BROKERS.
Tenant
warrants that it has had no dealings with any real estate brokers or agents
in
connection with the negotiation of this Lease excepting only the Brokers listed
in Paragraph 1c, and it knows of no other real estate broker or agent who is
entitled to a commission in connection with this Lease. Tenant hereby agrees
to
indemnify Landlord for any loss or damage, including defense costs, arising
out
of claims from brokers or other finders other than the Brokers referenced
above.
30. HAZARDOUS
MATERIALS AND ENVIRONMENTAL CONSIDERATIONS.
a. Tenant
covenants and agrees that Tenant and its agents, employees, contractors and
invitees shall comply with all Hazardous Materials Laws (as hereinafter
defined). Without limiting the foregoing, Tenant covenants and agrees that
it
will not use, generate, store or dispose of, nor permit the use, generation,
storage or disposal of Hazardous Materials (as hereinafter defined) on, under
or
about the Premises, nor will it transport or permit the transportation of
Hazardous Materials to or from the Premises, except in strict and full
compliance with any applicable Hazardous Materials Laws. Any Hazardous Materials
located on the Premises shall be handled in an appropriately controlled
environment which shall include the use of such equipment (at Tenant's expense)
as is necessary to meet or exceed standards imposed by any Hazardous Materials
Laws and in such a way as not to interfere with any other tenant's use of its
premises. Upon breach of any covenant contained herein, Tenant shall, at
Tenant's sole expense, cure such breach by taking all action prescribed by
any
applicable Hazardous Materials Laws or by any governmental authority with
jurisdiction over such matters.
b. Tenant
shall inform Landlord at any time of (i) any Hazardous Materials it intend
to
use, generate, handle, store or dispose of, on or about or transport from,
the
Premises and (ii) of Tenant's discovery of any event or condition which
constitutes a violation of any applicable Hazardous Materials Laws. Tenant
shall
provide to Landlord copies of all communications to or from any governmental
authority or any other party relating to Hazardous Materials affecting the
Premises.
c. Tenant
shall indemnify and hold Landlord harmless from any and all claims, judgments,
damages, penalties, fines, costs, liabilities, expenses or losses (including
without limitation, diminution on value of the Premises, damages for loss or
restriction on use of all or part of the Premises, sums paid in settlement
of
claims, investigation of site conditions, or any cleanup, removal or restoration
work required by any federal, state or local governmental agency, attorney's
fees, consultant fees and expert fees) which arise as a result of or in
connection with any breach of the foregoing covenants or any other violation
contained herein shall also accrue to the benefit of the employees, agents,
officers, directors and/or partners of Landlord.
d. Upon
termination of the Lease and/or vacation of the Premises, Tenant shall properly
remove all Hazardous Materials and, provided that Landlord reasonably believes
that such a report is necessary, shall provide to Landlord an environmental
audit report, prepared by a professional consultant satisfactory to Landlord
and
at Tenant's sole expense, certifying that the Premises have not been subjected
to environmental harm caused by Tenant's use and occupancy of the Premises.
Landlord shall grant to Tenant and its agents or contractors such access to
the
Premises as is necessary to accomplish such removal and prepare such
report.
e. "Hazardous
Materials" shall mean (a) any chemical, material, substance or pollutant which
poses a hazard to the Premises or to persons on or about the Premises or would
cause a violation of or is regulated by any Hazardous Materials Laws, and (b)
any chemical, material or substance defined as or included in the definitions
of
"hazardous substances", "hazardous wastes", "hazardous materials", "extremely
hazardous waste", "restricted hazardous waste", "toxic substances", "regulated
substances", or words of similar import under any applicable federal, state
or
local law or under the regulations adopted or publications promulgated pursuant
thereto, including, but not limited to, the Comprehensive Environmental
Response. Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sec.
9601, et seq.; the Hazardous Materials Transportation Act, as amended, 49 U.S.C.
Sec. 1801, et seq.; the Resource Conservation and Recover Act, as amended,
42
U.S.C. Sec. 6901, et seq.; the Solid Waste Disposal Act, 42 U.S.C. Sec. 6991
et
seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. Sec. 1251,
et seq., of the Colorado Revised Statutes. "Hazardous Materials Laws" shall
mean
any federal, state or local laws, ordinances, rules, regulations, or policies
(including, but not limited to, those laws specified above) relating to the
environment, health and safety or the use, handling, transportation, production,
disposal, discharge or storage of Hazardous Materials, or to industrial hygiene
or the environmental conditions on, under or about the Premises. Said term
shall
be deemed to include all such laws as are now in effect or as hereafter amended
and all other such laws as may hereafter be enacted or adopted during the term
of this Lease.
f. All
obligations of Tenant hereunder shall survive and continue after the expiration
of this Lease or its earlier termination for any reason.
g. Tenant
further covenants and agrees that it shall not install any storage tank (whether
above or below the ground) on the Premises without obtaining the prior written
consent of Landlord, which consent may be conditioned upon further requirements
imposed by Landlord with respect to, among other things, compliance by Tenant
with any applicable laws, rules, regulations or ordinances and safety measures
or financial responsibility requirements.
31. OPTION
TO RENEW. If
Tenant
is not then in default of the terms, covenants and conditions herein contained,
Tenant shall have the option to renew this Lease for one additional term of
five
(5) years. In the event Tenant desires to exercise said option, Tenant shall
give written notice of such fact to Landlord not less than one hundred eighty
(180) days prior to the expiration of the then current term of this Lease.
In
the event of such exercise, this Lease shall be deemed to be extended for the
additional period on the same terms and conditions; provided however, Landlord
shall have the option of increasing basic monthly rental to the then existing
market rate for similar space in the Boulder vicinity. Basic monthly rental
shall increase three and a half percent (3.5%) each year commencing the second
year of the additional term. Landlord shall notify Tenant of its determination
of market rent no less than one hundred twenty (180) days prior to commencement
of the option term. In the event Tenant objects to Landlord’s determination,
Tenant must notify Landlord in writing on or before the date that is sixty
(150)
days prior to the commencement of the option term. Within the next thirty (30)
days Landlord and Tenant shall each select a Colorado qualified real estate
appraiser with not fewer than five (5) years’ of experience appraising property
similar to the Premises in Boulder County, Colorado, to determine the fair
market rental value of the Premises. In order to be included in this value
determination process, such appraisers’ determinations must be delivered in
writing to both Landlord and Tenant within thirty (30) days after their
appointment. If the valuations determined by such appraisers are within ten
percent (10%) of one another, the fair market rental value of the Premises
shall
be the average of their figures. If the valuations determined by such appraisers
are outside ten percent (10%) of one another, the two previously chosen
appraisers shall jointly appoint a third appraiser with similar qualifications
who shall independently determine the fair market rental value of the Premises
within thirty (30) days after the appointment. The three fair market rental
values shall be averaged and the resulting amount shall be the amount for that
option term. The cost of all appraisals shall be paid equally by Landlord and
Tenant.
32. FIRST
RIGHT OF REFUSAL. Tenant
shall have the right-of-first refusal to lease the remaining vacant space in
the
Building at such time as Landlord receives an offer from a third party to lease
the space. Tenant shall have three (3) business days after receipt of written
notice from Landlord of an offer to lease the space from a third party to enter
into a modification of this Lease to include the additional space.
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TENANT:
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Chief
Financial Officer
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Tax I.D. 46-051068
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