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LEASE MODIFICATION AGREEMENT
LANDLORD: LakeCentre Plaza Ltd., LLLP
TENANT: New Frontier Media, Inc.
LEASE: That certain Lease Agreement between Landlord and Tenant dated August 12,
1998, and Lease Modification Agreement dated January 9, 1999, for the premises
known as ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
In consideration of the covenants, terms, conditions, agreements and payments as
herein set forth, Landlord and Tenant hereby enter into the following:
CURRENT LEASE EXPIRATION: OCTOBER 1, 2003
NEW LEASE EXPIRATION: OCTOBER 1, 2013
NEW BASE MONTHLY RENT DURING LEASE TERM:
For Period Starting: To Period Ending: A Base Monthly rent of:
-------------------- ----------------- ----------------------
October 1, 2003 October 1, 2004 $16,520
October 1, 2004 October 1, 2005 $17,181
October 1, 2005 October 1, 2006 $17,868
October 1, 2006 October 1, 2007 $18,583
October 1, 2007 October 1, 2008 $19,326
October 1, 2008 October 1, 2009 $20,099
October 1, 2009 October 1, 2010 $20,903
October 1, 2010 October 1, 2011 $21,739
October 1, 2011 October 1, 2012 $22,609
October 1, 2013 October 1, 2013 $23,513
ADDITIONAL TERMS AND CONDITIONS: See EXHIBIT "B".
TERMINATION DATE OF AMENDMENT OFFER: This Agreement offer expires July 31, 2003
if not executed by tenant and delivered to this office.
OTHER TERMS AND CONDITIONS: All other terms and conditions of the above
referenced Lease dated August 12, 1998, and Lease Modification Agreement dated
January 9, 1999, for the premises known as ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, shall remain the same except as modified herein.
LANDLORD: TENANT:
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LakeCentre Plaza Ltd., LLLP New Frontier Media, Inc.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------- -----------------------------
BY: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Partner BY: ▇▇▇▇▇ ▇▇▇▇▇▇
Dated this 30 day of July 2003.
EXHIBIT "B" TO LEASE MODIFICATION AGREEMENT DATED JULY _____, ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LTD., LLLP, AS LANDLORD, AND NEW FRONTIER MEDIA, INC., AS
TENANT.
1. Landlord's Construction Obligations. Landlord agrees to upgrade, at
its sole cost and expense, the current electrical transformer servicing the
Leased Premises from 300 KVA to 500 KVA. Landlord shall commence efforts to
procure the new transformer upon execution of this Lease Modification Agreement
and shall cause same to be installed promptly following delivery, at Landlord's
cost and expense.
2. Tenant Improvement Allowance. Landlord shall provide to Tenant a
$500,000.00 allowance for installation of Tenant Improvements (as defined
below). Such allowance shall be funded in installments (not more than one per
calendar month), payable thirty (30) business days following submittal of
invoices to Landlord reflecting the extent of Tenant Improvements completed,
lien waivers for same, and such other evidence as Landlord may reasonably
request to evidence the extent of, and payment for, the Tenant Improvements
completed. Tenant acknowledges that the anticipated cost of Tenant Improvements
will exceed $500,000.00, and that Tenant shall be solely responsible for all
costs and expenses of completing Tenant Improvements in excess of $500,000.00,
and Tenant covenants and agrees to timely pay all such excess amounts and to
provide to Landlord lien waivers showing payment of all such excess amounts.
3. Tenant Improvements. The parties acknowledge and agree that Tenant
has elected to engage its own Contractor(s) and arrange for construction and
installation of Tenant Improvements on Tenant's behalf. "Tenant Improvements"
shall mean all interior walls, partitions, doors, wall coverings, lighting
fixtures, electrical fixtures, outlets and switches, outlets, dropped ceilings,
floor and window coverings, plumbing fixtures and any and all other items that
Tenant desires to have installed in the interior of the Leased Premises
(including, without limitation, all consultant fees and other soft costs
associated with design and delivery of such improvements).
In addition, Tenant shall upgrade the existing electrical transformer
servicing the Leased Premises from 300 KVA to 500 KVA, or install a new
transformer. Tenant shall provide not less than seven (7) days advance written
notice of its intent to install such transformer to Landlord, and to existing
tenants located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇. Tenant
acknowledges that the electrical service to such other tenants shares the use of
existing transformer. Tenant shall therefore take such action as is necessary
during the course of installing the new transformer to provide uninterrupted
utility service to such other tenants, including, if necessary, providing an
auxiliary source of electrical power.
Landlord will provide Tenant a Rent Credit up to $8,000.00 for
transformer upgrade, or installation of a new transformer. This Rent Credit will
be applied after transformer upgrade or new install is completed and Tenant
provides Landlord paid invoice(s) and Lien Waivers for such. Any costs above the
$8,000.00 will be at Tenants sole cost and expense.
Tenant agrees that all contracts with respect to the completion of
Tenant Improvements will include provisions whereby the Contractor, for itself
and its subcontractors, and the subcontractors of each of them, and for all
parties acting through or under each of them will (i) covenant and agree that no
mechanic's liens will be filed by it or any of them against the Leased Premises
or the Building for or on account of any work done or material furnished by said
Contractor or subcontractors and all parties acting through or under any of them
in connection with the Tenant Improvements, and (ii) specifically waive and
relinquish the right to have, file and maintain any mechanic's liens or claim
against the Leased Premises or the Building (provided that such parties need not
waive the right to lien the Tenant Improvements to the extent that same can be
severed from the Leased Premises without harm or damage to the Leased Premises).
Any such contract shall also provide that all subcontracts with subcontractors
and materialmen must contain waiver of lien provisions similar to those required
to be contained in any contract to be executed by Tenant with a Contractor. Said
contract shall also contain language to the effect that said waiver clause is
for the benefit of the Landlord. Any contract pertaining to Tenant Improvements
which does not contain the provisions set forth above, shall be deemed void and
of no force and effect.
Notice is furthermore hereby given that Landlord shall not be liable
for any labor or materials furnished or to be furnished to the Tenant with
regard to Tenant Improvements, and that no mechanic's or other lien for any such
labor or materials shall attach to or affect the reversion or any other estate
or interest of the Landlord in and to the Leased Premises. Subject only to
paragraph 2, above, any and all Tenant Improvement shall be the responsibility
and at the cost of Tenant. Tenant agrees to pay or cause to be paid promptly all
bills and charges for any material, labor or otherwise in connection with or
arising out of any Tenant Improvements, and Tenant agrees to hold Landlord free
and harmless against all liens and claims of liens for labor and materials, or
either of them, filed against the Leased Premises, or any part thereof, and
against any expense or liability in connection therewith. Tenant shall, however,
have the right to contest any mechanic's liens or claims of such liens filed
against the Leased Premises, provided Tenant shall diligently prosecute any such
contest and at all times effectively stay or prevent any sale of the Leased
Premises under execution or otherwise and pay or otherwise satisfy any final
judgment judging or enforcing such contested lien and thereafter procure record
of satisfaction or release thereof. Landlord shall also retain the right, but
shall not have an obligation, to post the Leased Premises or take such other
action as is then permitted by law to protect Landlord and the Leased Premises
against mechanic's liens.
Tenant shall be responsible for obtaining any and all necessary permits
or licenses required in connection with the Tenant Improvements and shall
complete all Tenant Improvements with reasonable diligence and in a good and
workmanlike manner.
4. Plans. Tenant shall engage and pay for the services of an architect,
contractor or contractors to prepare a space layout, working drawings and
specifications for all Tenant Improvements. Tenant shall devote such time in
consultation with the architect and/or contractors as shall be necessary to
enable the architects and/or contractors to develop complete working drawings
and specifications for the construction of the Tenant Improvements, showing
thereon partitions, doors, electrical and telephone outlets, light fixture
locations, wall finishes, floor coverings and special requirements ("Plans").
Tenant hereby acknowledges and agrees that it shall ensure that the Plans comply
with all applicable laws, including, ordinances, orders, rules, regulations and
requirements of all governmental authorities having jurisdiction thereof,
including, but not limited to, ADA requirements.
5. Landlord's Approval. Tenant shall submit to Landlord complete and
final Plans for the Tenant Improvements within sixty (60) days of Tenant's
execution of this Lease Modification Agreement. The Plans shall be subject to
the approval of Landlord, which approval shall not be unreasonably withheld or
delayed. If Landlord should disapprove such Plans, Landlord shall specify to
Tenant the reasons for its disapproval and Tenant shall cause the same to be
revised to meet Landlord's objections and shall resubmit the same to Landlord,
as so revised for approval. If any governmental authority requires a change or
addition to the Plans, as previously approved by Landlord, Tenant shall cause
such government required modifications to be made to the Plans and shall
resubmit the same to Landlord for its concurrence therewith.
6. Contractors. Tenant shall submit to Landlord the names of the
architect, general contractor and the electrical, ventilation, plumbing and
heating subcontractors (hereinafter collectively "Contractors") for Landlord's
approval, which approval shall not be unreasonably withheld or delayed. If
Landlord shall reject any Contractors, Tenant shall choose other Contractors.
7. Tenant's Construction of the Tenant Improvements. Tenant shall
commence construction of the Tenant Improvements within thirty (30) days of
receiving building permits from the City of Boulder. Subject only to paragraph
2, above, Tenant shall promptly pay any and all costs and expenses in connection
with or arising out of the performance of Tenant's construction of the Tenant
Improvements (including the costs of permits therefore) and shall furnish to
Landlord evidence of such payment upon request. Upon completion of the Tenant
Improvements, Tenant shall deliver to Landlord a release and waiver of lien
executed by all of the Tenant's Contractors (including any architect or other
design or engineer professional used in the preparation of the Plans) and each
and every subcontractor and materialman concerned with the Tenant Improvements.
Tenant shall indemnify, defend (with counsel satisfactory to Landlord)
and hold Landlord harmless from and against any and all suits, claims, actions,
loss, cost or expense (including claims for workers' compensation, attorneys'
fees and costs) based on personal injury or property damage caused in, or
contract claims (including, but not limited to, claims for breach of warranty)
arising from the construction of the Tenant's Improvements. Tenant shall repair
or replace (or, at Landlord's election, reimburse Landlord for the cost of
repairing or replacing) any portion of the Leased Premises or Building or item
of Landlord's equipment or any of Landlord's real or personal property damaged,
lost or destroyed in the construction of the Tenant Improvements.
Tenant and Tenant's Contractors shall obtain and provide Landlord with
certificates evidencing Workers' Compensation, public liability and property
damage insurance in amounts and forms and with companies satisfactory to
Landlord. Tenant's agreement with its Contractors shall require such Contractors
to provide daily clean up of the Building to the extent such clean up is
necessitated by the construction of the Tenant Improvements.
Tenant shall notify Landlord at least five (5) days prior to the
commencement of construction of any Tenant Improvements and permit Landlord to
post on the Leased Premises such notices of nonresponsibility as may be required
or otherwise available to Landlord.
8. Changes. Tenant may request reasonable changes in the Plans;
provided, however, that (a) no material change shall be made to the Plans
without Landlord's prior written approval, which approval shall not be
unreasonably withheld or delayed; (b) no such request shall effect any
structural change in the Building or otherwise render the Leased Premises or
building in violation of applicable laws; (c) Tenant shall pay any additional
costs required to implement such change, including, without limitation, loss of
rents, architecture and other consultant fees, increases in construction costs
and other charges payable hereunder caused by such delay; and (d) such requests
shall constitute an agreement by Tenant to any delay in completion caused by
Landlord's reviewing, processing and implementing such change. If Tenant
requests or causes any change, addition or deletion to the Leased Premises to be
necessary after approval of the Plans, a request for the change shall be
submitted to Landlord's Representative, accompanied by revised plans, all at
Tenant's sole expense. Tenant acknowledges that any Contractors engaged by
Tenant are not the Landlord's agent and have no authority to enter into
agreements on Landlord's behalf or otherwise bind Landlord.
9. Tenant's Representative. Tenant has designated ______________as the
Tenant's Representative, to be its sole representative with respect to the
matters set forth in this Lease Modification Agreement, who shall have full
authority and responsibility to act on behalf of the Tenant as required in this
Lease Modification Agreement. Tenant shall not change the Tenant's
Representative without notice to and the prior approval of Landlord.
10. Landlord's Representative. Landlord has designated ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
as Landlord's Representative, to be its sole representative with respect to the
matters set forth in this Lease Modification Agreement, who shall have full
authority and responsibility to act on behalf of Landlord as required in this
Lease Modification Agreement. Landlord shall not change Landlord's
Representative without notice to Tenant.
11. No Representations or Warranties. Notwithstanding anything to the
contrary contained in the Lease or herein, Landlord's review of or participation
in the preparation of the Plans, the cost estimates for the Tenant Improvements,
if at all, shall not constitute any representation or warranty, express or
implied, that (1) the Plans are in conformity with applicable governmental
codes, regulations or rules, or (ii) the Tenant Improvements, if built in
accordance with the Plans, will be suitable for Tenant's intended purpose.
Tenant acknowledges and agrees that the Tenant Improvements are intended for use
by Tenant and the specification and design requirements for such improvements
are not within the special knowledge or experience of Landlord.
12. HVAC Maintenance. The following terms and conditions shall be in
effect beginning August 1, 2003, or, if after such date, the date that this
Lease Modification Agreement is signed, and throughout the remaining term of the
Lease. Section 15 of the Lease shall be amended to add the following:
K. HVAC SYSTEMS. Tenant, at its sole cost and expense, agrees to
maintain in good working order all of the HVAC unit systems, controls, and
related systems for the Leased Premises. Tenant agrees to make all repairs,
periodic servicing, and replacement to these HVAC units with a reputable
licensed contractor. Tenant shall not hold Landlord liable for interruption of
service, nor hold Landlord liable for damages incurred due to the interruption
of service for these units. Tenant, upon receiving written request from
Landlord, shall provide records of all maintenance contracts, repairs, and
replacements on a yearly basis to Landlord.
13. Section 16, Paragraph 1 of the Lease shall be amended as follows:
16. Common Area Maintenance. Tenant shall be responsible for
Tenant's Prorata share of the total costs incurred for the operation,
maintenance and repair of the Common Areas actually paid for by Landlord,
including, but not limited to, the costs and expenses incurred for the
operation, maintenance and repair of parking areas (including restriping and
repaving); removal of snow; all utilities including water, gas, and electric for
the building; janitorial for common areas and tenant occupied space; normal HVAC
maintenance and elevator maintenance (if applicable); trash removal; security to
protect and secure the Area; common entrances, exits, and lobbies of the
Building; all common utilities, including water to maintain landscaping;
replanting in order to maintain a smart appearance of landscape areas; supplies;
depreciation on the machinery and equipment used in such operation, maintenance
and repair; the cost of personnel to implement such services; the cost of
maintaining in good working condition the HVAC system(s) for the Leased
premises; the cost of maintaining in good working condition the elevator(s) for
the Leased Premises, if applicable; and costs to cover Landlord's management
fees paid for the management of the property. These costs shall be estimated on
an annual basis by the Landlord and shall be adjusted upwards or downwards
depending on the actual costs for the preceding twelve months. Tenant shall pay
monthly, commencing with the first month of the Lease Term, as additional rent
due under the terms hereof, a sum equal to Tenant's Prorata Share of the
estimated costs for said twelve (12) month period, divided by 12. The estimated
initial monthly costs are $ 1,244.00. Once each year the Landlord shall
determine the actual costs of the foregoing expenses for the prior year and if
the actual costs are greater than the estimated costs, the Tenant shall pay its
Tenant's Prorata Share of the difference between the estimated costs and the
actual costs to the Landlord with the next payment of Base Monthly Rent, or, if
the actual costs are less than the estimated costs, the Landlord shall forthwith
refund the amount of the Tenant's excess payment to the Tenant.
