LEASE AGREEMENT

Exhibit 10.17

 

LEASE AGREEMENT

 

by and between

 

PARKRIDGE ONE, LLC

 

and

 

TIME WARNER TELECOM INC.

 

dated

 

July 22, 1999

 

 

TABLE OF CONTENTS

 

 

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PARKRIDGE ONE

LEASE AGREEMENT

 

THIS LEASE AGREEMENT (this “ Lease ”) is made and entered into by and between ParkRidge One, LLC, a Delaware limited liability company (the “ Landlord ”), and Time Warner Telecom Inc., a Delaware corporation (the “ Tenant ”).

 

In consideration of the rentals reserved hereunder and the duties, covenants and obligations of the other hereunder, Landlord and Tenant hereby covenant and agree as follows:

 

I.

 

1.01 Demise of the Premises . Landlord hereby leases, demises and lets to Tenant, and Tenant hereby leases and takes from Landlord, those certain premises (hereinafter sometimes called the “ Premises ”) located on the all of the 4th floor and all of the 3rd floor (being Suites 400 and 300) of the building known as ParkRidge One (the “ Building ”) which is located at 10475 Park Meadows Drive, in Littleton (Douglas County), Colorado 80124 (hereinafter sometimes called the “ Land ”). The Land is more particularly described on EXHIBIT A attached hereto and made a part hereof for all purposes. A floor plan of the Premises is attached hereto and made a part hereof for all purposes as EXHIBIT B . The Building, the Land, all existing underground parking structures or above-ground parking lots owned or controlled by Landlord and servicing the Building and any such structures or parking lots on the Land constructed in the future (the “ Parking Facilities ”) and such additional facilities on the Land to service any of the foregoing in subsequent years as may be necessary or desirable in Landlord’s reasonable judgment are hereinafter sometimes collectively called the “ Project .”

 

1.02 License to Use Public Areas . Subject to Section 5.03 below, Landlord hereby grants Tenant, its employees, invitees and other visitors, a nonexclusive license for the term of this Lease and all extensions and renewals thereof to use, for the purpose of ingress and egress to the Building, the Parking Facilities, and the Premises, and in accordance with the Building Rules (as hereinafter defined) (a) the sidewalks and other exterior common areas located on the Project; and (b) the lobbies, public corridors and elevator foyers of the Building as such areas are designated by Landlord from time to time for the common use of the Building’s tenants.

 

1.03 Rentable Area . Landlord and Tenant stipulate and agree for all purposes under this Lease that the Rentable Area (as defined in and determined in accordance with the terms and provisions of EXHIBIT C attached hereto and made a part hereof for all purposes) of the Premises is approximately 56,803 rentable square feet, based upon the final Space Plan (as defined in EXHIBIT D attached hereto and made a part hereof for all purposes), notwithstanding any different measurement thereof that may be made hereafter by or on behalf of either party.

 

1.04 Term .

 

(a) The term of this Lease shall commence on November 1,1999 (such date being herein referred to as the “ Commencement Date ”) and, unless sooner terminated in accordance with the terms and conditions set forth herein, shall expire on the last day of the eighty-seventh (87 ^th ) full calendar month after the Commencement Date (the “ Expiration Date ”).

 

(b) Tenant, at Landlord’s request, shall execute an agreement (in the form attached hereto as EXHIBIT E and made a part hereof for all purposes). Landlord shall use commercially reasonable efforts to prepare and deliver such agreement to Tenant within fifteen (15) days after the Commencement Date and Tenant shall execute and deliver the agreement to Landlord within five (5) business days of Tenant’s receipt thereof.

 

(c) Landlord shall deliver the Premises to Tenant upon full execution and delivery hereof and Tenant may enter upon the Premises for purposes of completing Tenant’s Work as more specifically set forth in EXHIBIT D . Tenant, subject to applicable law, may take occupancy of the Premises at any time prior to the Commencement Date. Upon delivery of the Premises to Tenant all terms of this Lease shall apply except Tenant shall not be obligated to pay Base Rental, Additional Rental, or Parking Fees as such terms are hereinafter defined until the Commencement Date.

 

1.05 Use .

 

(a) The Premises are to be used and occupied by Tenant (and its assignees and subtenants permitted hereunder except as set forth in Subsection 9.01(c)(vi)) solely for general office use and telecommunications services and related office uses including installation and use of all equipment reasonably required to run such operations all of which shall be consistent with a first class multi-tenant suburban office building and for no other purpose. Without limiting the foregoing, the Premises shall not be used for any purpose which would tend to lower the first-class character of the Building, or create excessive elevator loads and/or usage, or materially increase wear and tear on the Building’s mechanical, electrical and plumbing systems, or materially increase the Building’s maintenance and/or janitorial services. Tenant shall not be allowed to: (i) have more than five (5) persons per one thousand (1,000) square feet of Rentable Area occupy the Premises, (ii) use the space as a consular office for any foreign government; or (iii) use the space as an office for any governmental or regulatory authority, agency or bureau.

 

(b) Tenant shall not occupy or use the Premises, or permit any portion of the Premises to be occupied or used as a mutual fund company or for any business or purpose which violates any exclusive given to other tenants in the Project as set forth on EXHIBIT S , attached hereto and made a part hereof, or which is unlawful, disreputable or deemed to be hazardous on account of fire or other hazards, or permit anything to be done which would in any way increase the rate of fire or liability or any other insurance coverage on the Building and/or its contents, or which would produce strong, unusual or offensive odors, fumes, dust or vapors, or that is a public or private

 

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nuisance, or that emits noise or sounds that are objectionable to a person of reasonable judgment due to intermittence, beat, frequency, shrillness or loudness. Tenant shall not permit any cooking within the Premises except the use of a microwave oven and toaster. The Building is a “non-smoking” Building. Tenant agrees that no smoking is allowed in the Premises or in the Public Areas of the Building except in a designated smoking area of the Parking Facilities, as determined from time to time by Landlord. “ Public Areas ” shall include but are not limited to: Parking Facilities, building lobbies, elevators, elevator lobbies, corridors, restrooms, mailrooms, public break rooms, stairwells and pedestrian tunnels (if any).

 

II.

 

2.01 Base Rental . Tenant hereby covenants and agrees to pay to Landlord as partial consideration for Tenant’s use and occupancy of the Premises a base annual rental (the “ Base Rental ”). which Base Rental shall be payable in monthly installments in advance on the first day of each month beginning on the Commencement Date in accordance with the following schedule:

 

 

Landlord shall not collect nor demand from Tenant Base Rental or Additional Rental for the first ninety (90) days of the term of the Lease commencing as of the Commencement Date (the “ Rent Concession ”). Such ninety-day period shall be referred to herein as the “ Free Rent Period ”. In addition, if any portion of the Allowance (as defined in EXHIBIT D ) is not used by Tenant to complete Tenant’s Work (as defined in EXHIBIT D ) in accordance with the Space Plans and Construction Drawings (as defined in EXHIBIT D ) approved by Landlord and no Event of Default has occurred and is continuing, the unused Allowance (the “ Unused Allowance ”) shall at Tenant’s option upon not less than thirty (30) days prior notice to Landlord after final determination of any Unused Allowance and receipt of all final lien waivers for the Tenant, be credited against any Rent then due Landlord from Tenant or Tenant may receive a payment equal to the Unused Allowance. With respect to any expansion or renewal of this Lease for which Tenant is provided an allowance for tenant improvements, the portion of the allowance not used by Tenant for such tenant improvements (not in excess of twenty-five percent (25%) of such allowance) may be credited against any Rent payable during the extension or renewal term on the same terms as set forth above.

 

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2.02 Additional Rental .

 

(a) In addition to the Base Rental for each calendar year (or portion thereof) during the term of this Lease, Tenant shall pay as additional rent (the “ Additional Rental ”) Tenant’s Proportionate Share (as hereinafter defined) of the Operating Expenses (as hereinafter defined) for that year in excess of the Operating Expenses for the Base Year (as hereinafter defined) and Tenant’s Proportionate Share of the Real Estate Taxes (as hereinafter defined) in excess of the Base Real Estate Taxes (as hereinafter defined) for that year. On or about the beginning of each calendar year during the term of this Lease, Landlord shall deliver to Tenant Landlord’s good faith estimate (the “ Estimated Additional Rental ”) of the Additional Rental for that year. The Estimated Additional Rental shall be paid in equal installments in advance on the first day of each month. If Landlord does not deliver an estimate to Tenant for any year by January 1 of that year, Tenant shall continue to pay Estimated Additional Rental based on the prior year’s estimate. From time to time during any calendar year (but not more than twice during any calendar year), Landlord may, upon thirty (30) days prior written notice, revise its estimate of the Additional Rental for that year based on either actual or reasonably anticipated increases in Operating Expenses or Real Estate Taxes, and the monthly installments of Estimated Additional Rental shall be appropriately adjusted for the remainder of that year in accordance with the revised estimate so that by the end of the year, the total payments of Estimated Additional Rental paid by Tenant shall equal the amount of the revised estimate. The parties acknowledge and agree that during calendar year 2000, Tenant’s Estimated Additional Rental shall be only Tenant’s Proportionate Share of the Real Estate Taxes in excess of the Base Real Estate Taxes.

 

(b) “ Base Year ” means calendar year 2000.

 

(c) “ Base Real Estate Taxes ” shall mean Real Estate Taxes of $2.25 per rentable square foot multiplied by the aggregate Rentable Area for the Building.

 

(d) “ Tenant’s Proportionate Share ” means the percentage determined by dividing the Rentable Area contained within the Premises by the aggregate Rentable Area of the space within the Building. Landlord and Tenant hereby stipulate and agree for all purposes under this Lease that the aggregate Rentable Area of the Building is 166,644 rentable square feet, notwithstanding any different measurement thereof that may be made hereafter by or on behalf of either party. Accordingly, unless and until any space is added to or deducted from the Premises (without implying any right in Landlord or Tenant to add space to or deduct space from the Premises, except as expressly set forth in this Lease), Tenant’s Proportionate Share shall be 34.0864%.

 

(e) “ Operating Expenses ” shall mean all customary and ordinary expenses, costs and disbursements of every kind and nature, computed on an accrual basis, incurred by Landlord or paid by or on behalf of Landlord in connection with the operation, maintenance and repair of the Project, excluding only the costs and expenses described in Section 2.02(e) below. Without limiting the generality of the foregoing, Operating Expenses include the following:

 

(i) Wages and salaries of all persons (up to the level of building manager) directly engaged in the operation, maintenance, cleaning, security or access control for the Project, including taxes, insurance and benefits relating thereto.

 

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(ii) All supplies, tools, equipment and materials used in the operation and maintenance of the Project, and the reasonable rental value of the Building management office to the extent used for the operation or management of the Building.

 

(iii) Cost of all utilities for the Project, including but not limited to the cost of water, sewer, gas, electricity, telephone and cable service.

 

(iv) Cost of all maintenance and service agreements for the Project and the equipment therein, including but not limited to security service, window cleaning, snow and ice removal, elevator maintenance, janitorial service and landscaping maintenance.

 

(v) Cost of repairs and general maintenance for the Project (excluding repairs and general maintenance costs that are paid by proceeds of insurance or by Tenant or other third parties).

 

(vi) Amortization of the cost of installation of capital investment items that are hereafter installed for the purpose of reducing Operating Expenses or which may be required or recommended by any laws, ordinances, orders, rules, regulations and requirements hereafter enacted, or any other capital investment items which relate to the maintenance and repair of the Project or any replacements of improvements, equipment or other capital investment items necessary for Landlord to satisfy its obligation under Section 3.05 of this Lease, provided that with respect to capital investment items that are installed for purposes of reducing Operating Expenses, the maximum amount of such items which may be amortized in any year shall be the amount which Landlord reasonably estimates has been saved in Operating Expenses during that year resulting from the installation of such items. All such costs which relate to the installation of a capital investment item shall be amortized over the reasonable life of the capital investment item, with the amortization schedule being determined in accordance with generally accepted accounting principles.

 

(vii) The cost of all insurance relating to the Project, as set forth in Sections 7.01 and 7.02 hereof.

 

(viii) All Project management fees.

 

(ix) The common area costs in the Project and expenses related to the Land and recorded easements and covenants.

 

(f) Landlord hereby agrees that the term “ Operating Expenses ” shall not include any of the following expenses:

 

(i) debt service or rentals under any ground lease;

 

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(ii) costs for which Landlord is entitled to specific refund or reimbursement (A) by insurance, warranties, or service contracts, or (B) as a separate charge by Tenant, by any other tenant of the Building, or by any other third party;

 

(iii) costs incurred by Landlord in connection with the negotiation of any tenant lease in the Project, including leasing commissions, legal fees and leasehold improvements expenses (and/or allowances therefor);

 

(iv) any other costs and expenses for services or amenities that are not generally provided to all tenants in the Building;

 

(v) any increases in Controllable Operating Expenses after the Base Year which are greater than five percent (5%) of the prior year’s Controllable Operating Expenses. For purposes hereof, “ Controllable Operating Expenses ” shall mean all Operating Expenses except the following: (A) utilities, (B) insurance, (C) those items affected by labor costs, such as janitorial services, in the event of an increase in the legal minimum wage, and (D) those items of Operating Expenses affected by the amount of usage which are outside Landlord’s reasonable control (e.g., Landlord can control the hourly rate for snow removal, which hourly rate will be subject to the above cap, but Landlord cannot control the number of times snow removal will be necessary during the year and there shall be no limit on snow removal costs attributable to the number of times that snow removal occurs). If an Operating Expense had not previously been incurred then the five percent (5%) limit thereon shall be imposed in the year subsequent to the date such Operating Expense was first incurred. Furthermore if the increase in Controllable Operating Expenses in any fixed price contract in any year is less than 5% in any year (e.g., due to a three-year fixed contract price or Landlord’s ability to avoid or limit such Operating Expenses in intervening years) the five percent (5%) limit shall be calculated as if there were 5% increases in each prior year.

 

(vi) except as set forth in Section 2.02(e)(vi) above, expenditures classified as capital expenditures for federal income tax purposes or any non-cash charges such as depreciation or amortization;

 

(vii) legal and consultant fees or any other associated fees incurred with respect to any disputes with other tenants or their contractors or vendors;

 

(viii) legal costs, fines, or penalties incurred by Landlord due to violation by Landlord of (A) any governmental rule or regulation or (B) the terms or conditions of any lease of space in the Building;

 

(ix) Landlord or its agent’s corporate overhead;

 

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(x) costs or expenses incurred in connection with removal, enclosure, and capsulation or other handling of Hazardous Substances, unless arising in the ordinary course of maintaining and repairing an office building (i.e., paint storage, spills in parking lot, or generator fuel from the Building generator);

 

(xi) increased insurance costs caused specifically by another tenant in the Building;

 

(xii) cost of installing, operating, and maintaining any speciality service such as a library, club, sandwich shop, or athletic club (exclusive of the common showers located in the Building);

 

(xiii) costs of any work or services performed on any facility other than located at the Project;

 

(xiv) any costs of painting the interior of any tenant’s premises;

 

(xv) costs of initial landscaping of the Project;

 

(xvi) cost of the initial stock of tools and equipment for the operation, repair and maintenance of the Project;

 

(xvii) costs of acquiring objects of art including sculptures and paintings;

 

(xviii) costs of repairing construction defects to the base Building and Parking Facilities;

 

(xix) costs of advertising, tenant gifts and promotions;

 

(xx) costs of material capital improvements or material changes to the structure of the Building which are not required by applicable law or are not in the nature of repair, maintenance and replacement of existing improvements or otherwise not in keeping with Landlord’s obligations as set forth in this Lease;

 

(xxi) any costs for goods and/or services representing an amount paid to any person, firm, corporation or other entity affiliated with Landlord (or any partner thereof) which is in excess of the fair market value of such goods and/or services if said goods and/or services had been rendered by an unaffiliated third party;

 

(xxii) late fees, charges and penalties;

 

(xxiii) costs necessitated by or resulting from the gross negligence or willful misconduct of Landlord, its vendors, agents, employees, and/or independent contractors;

 

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(xxiv) costs arising out of Landlord’s charitable or political contributions and fees or dues payable to trade associations;

 

(xxv) wages and benefits of any employee who does not devote substantially all of his or her time to the Project unless such wages and benefits are allocated to reflect the actual time spent on operating and managing the Project vis-a-vis time spent on matters unrelated to operating and managing the Project;

 

(xxvi) costs, including permit, license and inspection costs, incurred with respect to the installation of tenant improvements made for new tenants in the Project or incurred in renovating or otherwise improving, decorating, painting or redecorating vacant space for tenants or other occupants of the Project; and

 

(xxvii) management fees in excess of four percent (4%) of the aggregate of all base rent and additional rent collected for the Project.

 

(g) “ Real Estate Taxes ” means all federal, state, county or municipal taxes, assessments, fees, impositions, levies and governmental charges relating to the Project, whether paid directly by Landlord or through an escrow arrangement with a mortgagee or ground lessor, and whether they be by taxing districts or authorities presently taxing or assessing the Project or by others subsequently created or otherwise, and any other taxes, assessments, fees, impositions, levies, and governmental charges attributable to the Project or its operation, excluding, however, federal and state taxes on income, death taxes, franchise taxes, and any taxes imposed or measured on or by the income of Landlord from the operation of the Project; provided, however, that if at any time during the term of this Lease, the present method of taxation or assessment shall be so changed that the whole or any part of the taxes, assessments, levies, impositions or charges now levied, assessed or imposed on real estate and the improvements thereof shall be discontinued and as a substitute therefor, or in lieu of an addition thereto, taxes, assessments, levies, impositions or charges shall be levied, assessed and/or imposed wholly or partially as a capital levy or otherwise on the rents received from the Project or the rents reserved herein or any part thereof, then such substitute or additional taxes, assessments, levies, impositions or charges, to the extent so levied, assessed or imposed, shall be deemed to be included within Real Estate Taxes to the extent that such substitute or additional tax would be payable if the Project were the only property of Landlord subject to such tax. It is agreed that Tenant will be responsible for ad valorem taxes on its personal property and on the value of the leasehold improvements in the Premises to the extent that the same exceed the Allowance and the portion of the Additional Allowance used by Tenant (but only if such excess leasehold improvements can be reasonably identified as having increased the value of the Building and only in such event may Landlord may make a reasonable allocation of the ad valorem taxes assessed on the Project to give effect to this sentence). Once the Project is fully assessed as a completed Project, then Landlord agrees that if it is not otherwise appealing such assessment and if the assessment of the Project for Real Estate Taxes by the County of Douglas in any year exceeds 110% of the prior year’s assessment, then upon prompt and timely receipt of Tenant’s request

 

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Landlord will appeal such assessment and the reasonable costs of any appeal shall be an Operating Expense.

 

(h) Within one hundred fifty (150) days after the end of each calendar year during the term of this Lease, or as soon as reasonably practicable thereafter, Landlord shall provide Tenant a statement (“ Expense Statement ”) showing the Base Year Operating Expenses, Base Real Estate Taxes, and Operating Expenses and Real Estate Taxes in excess of the Base Year Operating Expenses and Base Real Estate Taxes respectively for said calendar year, prepared in accordance with generally accepted accounting principles, and a statement prepared by Landlord comparing Estimated Additional Rental paid by Tenant with Additional Rental for such calendar year. For calendar year 1999 the Expense Statement shall only show Base Year Operating Expenses, Base Real Estate Taxes, and actual Real Estate Taxes in excess of Base Real Estate Taxes. In the event that Estimated Additional Rental paid by Tenant exceeds the amount of Additional Rental for said calendar year, Landlord shall pay Tenant an amount equal to such excess at Tenant’s option, by either giving a credit against rentals next due, if any, or by direct payment to Tenant within thirty (30) days of the date of such Expense Statement. In the event that the Additional Rental exceeds Estimated Additional Rental paid by Tenant for said calendar year, Tenant shall pay the difference to Landlord within thirty (30) days of receipt of the Expense Statement. The provisions of this Section 2.02(f) shall survive the expiration or termination of this Lease.

 

(i) Except for credit for Operating Expense set forth on EXHIBIT N , if the actual Operating Expenses for any calendar year for the Project are less than the Base Operating Expenses, Tenant shall not be entitled to any credit or refund for such difference. If the actual Real Estate Taxes are less than the Base Real Estate Taxes for any calendar year Tenant shall not be entitled to a credit or refund for such difference except as more specifically set forth in EXHIBIT N .

 

(j) Notwithstanding any other provision herein to the contrary, it is agreed that if the Building is less than ninety-five percent (95%) occupied during any calendar year (or portion thereof), an adjustment using the BOMA gross-up method identified in the Escalation Handbook for Office Buildings by William H. Brownfield, published by BOMA, 1998, shall be made in computing each component of the Operating Expenses that actually varies with the rate of occupancy of the Building for that year so that the total Operating Expenses shall be computed for such year as though ninety-five percent (95%) of the Building had been occupied during such year.

 

(k) In the event any facilities, services or utilities used in connection with the Building are provided from another building owned or operated by Landlord within the office park or vice versa, the costs incurred by Landlord in connection therewith shall be allocated to Operating Expenses by Landlord on a reasonably equitable basis and consistent with other relevant provisions of this Lease.

 

(l) Except for estimated Additional Rental or as otherwise set forth in other leases in the Building, Landlord will not collect or be entitled to collect Operating Expenses from all of the tenants of the Building in an amount which is in excess of one hundred percent (100%) of the

 

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Operating Expenses actually paid or incurred by Landlord in connection with the provisions of Section 2.02 hereof. All assessments which can be paid by Landlord in installments shall be paid by Landlord in the maximum amount of installments permitted by law and not included in Operating Expenses except in the year in which the installment is actually paid, provided, however, Landlord may prepay such assessments provided that Landlord may not include in Real Estate Taxes or Operating Expenses for a particular year more than the installments that would have been payable for the year in question plus any interest to extent that it would have been included in the installments.

 

(m) Tenant shall have the right to request, review and copy, at Tenant’s expense, Landlord’s books and records regarding the determination of Operating Expenses for the calendar year that is the basis of an Expense Statement only upon written notice to Landlord and scheduling an appointment in advance. Such notice must be delivered within ninety (90) days following Landlord’s delivery of the Expense Statement to Tenant and the review completed within one hundred fifty (150) days after delivery of such notice. Any such review shall be conducted during normal business hours at Landlord’s office in the Denver metropolitan area or such other office as reasonably designated by Landlord. Any party conducting the review must be a certified public accountant from an accounting firm reasonably acceptable to Landlord. Tenant may have such review performed on a contingency fee basis provided the party conducting the review conforms with the prior sentence and Landlord shall not be obligated to pay any of the costs or fees owing to such party. In the event that Landlord and Tenant confirm pursuant to an Expense Statement or Landlord’s acceptance (subject to dispute resolution below) of the results of Tenant’s review (as applicable) that Estimated Additional Rental paid by Tenant exceeds Additional Rental for said calendar year, Landlord shall pay Tenant an amount equal to such excess at Tenant’s option, by either giving a credit against Rent next due, or by direct payment to Tenant within thirty (30) days of the date of such Expense Statement or acceptance. Notwithstanding the foregoing, if no Event of Default has occurred and is continuing and Tenant requests a refund rather than a credit from Landlord in writing, Landlord shall refund said amount to Tenant within thirty (30) days of Landlord’s receipt of Tenant’s request. In the event that the Additional Rental exceeds Estimated Additional Rental for said calendar year, Tenant shall pay the difference to Landlord within thirty (30) days of receipt of the Expense Statement. If Tenant does not object in writing to an Expense Statement within ninety (90) days following receipt of such Expense Statement, specifying the nature of the item(s) in dispute and the reasons therefor or within sixty (60) days of Tenant’s completion of the review as set forth above, the Expense Statement shall then be considered final and accepted by Tenant. Any amount due to Landlord as shown on an Expense Statement, whether or not disputed by Tenant as provided herein shall be paid by Tenant when due as provided in Section 2.02(f) above, without prejudice to any such written exception pending resolution thereof. Tenant shall use reasonable efforts to keep the results of any such review held in strict confidence by Tenant and its representatives. If Landlord disputes the review, both parties shall within twenty (20) days agree upon a neutral third party certified public accountant whose determination shall be binding upon both parties. Except as set forth below, if it is finally determined that Tenant overpaid Additional Rental by more than five percent (5%) then Landlord shall pay all reasonable costs of Tenant incurred in such proceeding (other than any costs and fees of any contingency fee

 

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consultants utilized by Tenant, which shall be the sole obligation of Tenant as set forth above), otherwise Tenant shall pay all of Landlord’s expenses incurred in connection therewith. The provisions of this Subsection (i) shall survive the expiration or termination of this Lease.

 

2.03 Rental Payments .

 

(a) Tenant hereby covenants and agrees to pay the Base Rental and Estimated Additional Rental (collectively, the “ Stated Rentals ”) and all other sums of money as shall become due from and payable by Tenant to Landlord under this Lease inclusive of the Exhibits hereto (collectively, “ Rent ”) in lawful money of the United States to Landlord at Landlord’s address as provided herein (or to such other persons or at such other address(es) as may be designated by Landlord in writing from time to time) Stated Monthly Rentals shall be paid monthly in advance on the first day of each month.

 

(b) If the term of this Lease as described above commences on other than the first day of a calendar month or terminates on other than the last day of a calendar month, then the installments of Stated Rentals for such month or months shall be prorated and the installment or installments so prorated shall be paid in advance. The payment for such prorated month shall be calculated by multiplying the monthly installment by a fraction, the numerator of which shall be the number of days of the lease term occurring during said commencement or termination month, as the case may be, and the denominator of which shall be the total number of days occurring in said commencement or termination month.

 

(c) Except as otherwise specifically provided in this Lease Tenant shall pay all Rent at the times and in the manner provided in this Lease, without demand, set-off or counterclaim. Tenant hereby acknowledges and agrees that (i) Landlord and Tenant have expressly negotiated that except as otherwise provided in this Lease, Tenant’s covenants to pay Rent under this Lease are separate and independent from Landlord’s covenant to provide services and other amenities hereunder and (ii) had the parties not mutually agreed upon the independent nature of Tenant’s covenants to pay all Rent hereunder, Landlord would have required a greater amount of Rent in order to enter into this Lease.

 

(d) In the event any Rent is not paid when due, then Landlord and Tenant agree that Landlord will incur additional administrative expenses, the amount of which will be difficult, if not impossible to determine. Accordingly, in addition to the obligation to pay Rent, Tenant shall pay to Landlord a late charge for such late payment in the additional amount of four percent (4%) of the amount of such late payment of Rent. Notwithstanding the above, Landlord agrees to waive such four percent (4%) late charge if such Rent is paid within five (5) days of Tenant’s receipt of written notice of nonpayment; however, Landlord shall have no further obligation to give such notice and whether or not any other notices are given such waiver shall not occur more than once in any consecutive twelve (12) month period during the Lease term or any extended term.

 

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(e) All Rent shall bear interest from the date due until paid at a rate (the “ Default Rate ”) equal to the lesser of (i) a floating annual rate equal to two percent (2%) above the Prime Rate reported in the Money Rates column or section of the most recent issue of The Wall Street Journal (“ Prime Rate ”), automatically adjusting with each change in the Prime Rate, and (ii) the maximum non-usurious rate of interest permitted by the applicable laws of the State of Colorado. Notwithstanding the foregoing, Landlord shall not more than once during any consecutive twelve (12) month period during the Lease term or any extended term, waive its right to collect the interest as set forth above if Tenant pays the Rent within five (5) days of receipt of written notice of nonpayment. Nothing herein shall require Landlord to give any additional notices; however, if Landlord does elect for any reason to give more than one notice of nonpayment during any twelve (12) month period, the waiver of Landlord’s right to collect interest shall not be waived.

 

2.04 Security Deposit . Intentionally Deleted.

 

III.

 

3.01 Services . Subject to the provisions of Sections 3.02 and 3.03 below, Landlord shall furnish the following services and amenities (collectively, the “ Required Services ”) to Tenant (and its assignees and subtenants permitted hereunder) while occupying the Premises:

 

(a) Hot and cold domestic water at those points of supply in the Building common areas provided for general use of the tenants of the Building;

 

(b) Central heat, ventilation and air conditioning, at such times, at such temperatures and in such amounts as are reasonably considered by Landlord to be standard, but in keeping with the standards of other first-class office buildings of comparable age and size in the southeast suburban Denver, Colorado office market, all as more particularly described on EXHIBIT F attached hereto and made a part hereof for all purposes;

 

(c) Electric lighting service for all public areas of the Building, Project and special service areas of the Building in the manner and to the extent reasonably deemed by Landlord to be in keeping with the standards of other first class office buildings of comparable age and size in the southeast suburban Denver, Colorado office market and electric lighting service to the Premises in the amount of at least two (2) watts per square foot of Rentable Area of the Premises;

 

(d) Janitorial service comparable to that provided by landlords of other first-class office buildings of comparable age and size in the southeast suburban Denver, Colorado office market and consistent with other similar tenants in the Building on a five (5) day per week basis including, at a minimum, those services set forth in EXHIBIT H attached hereto; provided, however, if Tenant’s floor coverings or other improvements require special cleaning or care in excess of that provided for by Landlord in EXHIBIT H , Landlord will provide such additional cleaning or care only upon special agreement with Tenant;

 

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(e) On-site security equipment for the Building perimeter; provided, however, that Tenant agrees that Landlord shall not be responsible for the adequacy or effectiveness of such security;

 

(f) Sufficient electricity during normal operating hours to operate personal computers, calculating machines, photocopying machines and other machines of similar low electrical consumption (120/208 volts); provided, however, total rated power consumption by said machines of low electrical consumption shall not exceed eight (8) watts connected load per square foot of Rentable Area of the Premises. Tenant shall pay to Landlord, monthly as billed, such charges as may be separately metered or as Landlord’s engineer shall reasonably compute for any electrical service usage in excess of 2.25 kilowatt hour per square foot of Rentable Area of the Premises per month at the same rate charged by the utility company. If any electrical equipment requires air conditioning in excess of Building standard as reasonably determined by Landlord, the same shall be installed with applicable meters, at Tenant’s expense and Tenant shall pay all additional operating costs relating thereto above the allotted power consumption set forth above, including, without limitation, any additional maintenance, repairs and utilities related to such electrical equipment and above Building standard air conditioning equipment. Prior to any such metering or installation, Landlord shall provide written notice to Tenant and Tenant shall have thirty (30) days from the date of such notice in which to cease and discontinue the usage causing the need for such metering and installation, failing which Landlord shall be permitted to perform such metering and installation in accordance with this paragraph;

 

(g) All Building standard fluorescent bulb replacement in all areas and all incandescent bulb replacement in Public Areas;

 

(h) Non-exclusive passenger elevator service to the Premises twenty-four (24) hours per day 365 days per year; and

 

(i) Maintenance of the roof, exterior walls, load-bearing columns, foundation, floor slabs, and other structural components and base building components of the Project including but not limited to the following: mechanical, electrical and plumbing systems of the Project, common areas, public restrooms, restrooms on multi-tenant floors, and exterior lighting and landscaping of the Project.

 

3.02 Governmental Regulations . The obligations of Landlord to provide the Required Services shall be subject to governmental regulation thereof ( i.e., rationing, temperature control, etc.) and any such regulation that impairs Landlord’s ability to provide the Required Services as herein stipulated shall not constitute a default hereunder but rather providing the applicable Required Services to the extent allowed pursuant to such regulations shall be deemed to be full compliance with the obligations and agreements of Landlord hereunder.

 

3.03 Failure to Provide Required Services . To the extent any of the Required Services require electricity, gas and water supplied by public utilities or others, Landlord’s covenants

 

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hereunder shall only impose on Landlord the obligation to use its commercially reasonable efforts to cause the applicable public utilities or other providers to furnish the same. Failure by Landlord to furnish any of the Required Services to any extent, or any cessation thereof, due to failure of any public utility or other provider to furnish service to the Building, or any other cause beyond the reasonable control of Landlord, shall not render Landlord liable in any respect for damages to either person or property, nor be construed as an eviction of Tenant, nor result in an abatement of Rent, nor relieve Tenant from fulfillment of any covenant or agreement hereof. In the event of any failure by Landlord to furnish any of the Required Services to any extent, or any cessation thereof, due to malfunction of any equipment or machinery, or any other cause within the reasonable control of Landlord, Tenant shall have no claim for rebate of Rent or damages on account thereof, provided that Landlord utilizes its reasonable efforts to promptly repair said equipment or machinery and to restore said Required Services as soon thereafter as is reasonably practicable.

 

In the event due to causes within the reasonable control of Landlord, HVAC, water, toilets, electric service or elevator service are terminated or substantially reduced such that the Premises are rendered untenantable in the reasonable determination of Landlord and Tenant for five (5) consecutive days and the Premises are in fact not occupied by Tenant for five (5) consecutive days, then Base Rent shall abate on a per diem basis until such services are restored in a manner reasonably consistent with the level of such services provided prior to the event giving rise to the abatement. In no event shall there be any abatement if the problem with the services was caused in whole or in part by the negligent act or omission or misconduct of Tenant, its agents, employees, contractors, sublessees or licensees or if Tenant’s sublessees or licensees are not entitled to rent abatement from Tenant.

 

3.04 Additional Services . Tenant hereby acknowledges and agrees that, except for the Required Services, Landlord, its agents and representatives, have made no representations whatsoever of any additional services or amenities to be provided by Landlord now or in the future under this Lease. Notwithstanding the foregoing, Tenant recognizes that Landlord may, at Landlord’s sole option, elect to provide additional services or amenities for the tenants of the Building from time to time, and hereby agrees that Landlord’s discontinuance of any provision of any such additional services or amenities shall not constitute a default of Landlord under this Lease nor entitle Tenant to any abatement of or reduction in Rent.

 

3.05 Landlord’s Obligation . Subject to the provisions of this Lease, Landlord agrees to keep and maintain the Project in a manner and at levels reasonably consistent with other first-class office buildings of comparable age and size in the southeast suburban Denver, Colorado office market, which obligation includes the common areas of the Building and Project and the structural portions of the Building. Furthermore, Landlord agrees to make reasonable efforts to give to Tenant reasonable advance notice (except in the event of any matter reasonably considered by Landlord to be an emergency) of any planned shutdowns of services materially affecting, in Landlord’s reasonable judgment, Tenant’s use of the common areas or the Premises.

 

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IV.

 

4.01 Care of the Premises .

 

(a) Tenant, its agents, affiliates, contractors, employees, and invitees shall not commit or allow to be committed any waste or damage to any portion of the Premises or the Project, and Tenant shall at its own cost and expense, maintain the Premises in good condition and repair; however in no event shall Tenant be responsible for the acts of third parties (who are not employees, agents, affiliates or contractors of Tenant) in or about the common areas of the Project (except the Premises). If Tenant fails to make required repairs or replacements to the Premises, Landlord shall provide notice thereof to Tenant. If Tenant does not make such repairs or replacements to the Premises within thirty (30) days from the date of such notice (or such longer period as is reasonably necessary to make such repairs or replacements or such shorter period if such repairs or replacements are necessary to protect persons or property), Landlord may, at its option, make such repairs or replacements, and Tenant shall repay the reasonable costs thereof. Tenant shall not undertake the repair or replacement of any damage or injury to the structural components of the Building or its mechanical, electrical or plumbing systems caused by Tenant, its agents, contractors, employees, invitees or visitors, but shall reimburse Landlord for all reasonable costs and expenses incurred in effecting any such repair or replacement.

 

(b) Unless otherwise expressly stipulated herein, Landlord shall not be required to make any improvements to or repairs of any kind or character to the Premises during the term of this Lease.

 

(c) Upon termination of this Lease, by lapse of time or otherwise, Tenant shall deliver up the Premises to Landlord in as good condition as existed on the Commencement Date, ordinary wear and tear and casualty loss and condemnation only excepted. Upon such termination of this Lease, Landlord shall have the right to re-enter and resume possession of the Premises.

 

4.02 Entry for Repairs and Inspection . Tenant shall permit Landlord and its contractors, agents or representatives to enter into and upon any part of the Premises at all reasonable hours and upon reasonable notice (except for entry after-hours for cleaning and in the case of emergency, in which events no notice shall be required) to inspect or clean the same, to make repairs, alterations or additions thereto, to show the same to prospective tenants (within the last nine (9) months of the term), purchasers or lenders, to determine whether Tenant is performing its obligations hereunder or for any other reasonable purpose as Landlord may deem necessary or desirable. Landlord agrees to exercise reasonable good faith efforts (i) to prosecute completion of any work within the Premises diligently, (ii) to minimize interference with Tenant’s use, access, occupancy and quiet enjoyment of the Premises, and (iii) to protect Tenant’s property located in the Premises from damage. Subject to the preceding sentence, entry to the Premises and the conduct of work therein by Landlord and its contractors, agents or representatives pursuant to this Section 4.02 shall not constitute a trespass or an eviction (constructive or otherwise) nor shall Tenant be entitled to any abatement or reduction of Rent or claim for damages for any injury to or interference with Tenant’s business, loss of occupancy or quiet enjoyment or for any other consequential damages by reason thereof.

 

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4.03 Nuisance . Tenant shall conduct its business and control its agents, employees, invitees, contractors and visitors in such manner as not to create any nuisance, or unreasonably interfere with any other tenant, or Landlord in its operation of the Building. Tenant shall use commercially reasonable efforts not to annoy or disturb other tenants in the Building.

 

4.04 Laws and Regulations; Rules of the Building . Tenant, at Tenant’s expense, shall comply with, and Tenant shall use commercially reasonable efforts to cause its visitors, employees, contractors, agents and invitees to comply with (a) all laws, ordinances, orders, rules, regulations and other requirements of governmental authority which impose any duty with respect to or otherwise relate to the use, condition, occupancy, maintenance or alteration of the Premises, whether now in force or hereafter enacted, (b) all rules and regulations reasonably adopted and altered by Landlord from time to time for the use, care and cleanliness of the Building and for preservation of good order therein (the “ Building Rules ”), which Building Rules will be sent by Landlord to Tenant in writing and shall be thereafter carried out and observed by Tenant, its employees, contractors, agents, invitees and visitors, and (c) all provisions of recorded restrictions, covenants, easements and conditions pertaining to the Project. The current Building Rules are attached hereto as EXHIBIT G and made a part hereof for all purposes. All Building Rules hereafter adopted by Landlord shall be reasonable and effective immediately upon receipt of written notice thereof. Landlord shall, to the extent applicable, uniformly enforce the Building Rules against the tenants in the Building in all material respects; however Tenant acknowledges (i) other tenants may have different Building Rules from those attached hereto as EXHIBIT G ; and (ii) Tenant is not a third party beneficiary of the other Building Rules nor are any other tenants a third party beneficiary of this provision or the rules attached hereto as EXHIBIT G .

 

4.05 Hazardous Substances .

 

(a) Except for small quantities of Hazardous Substances customarily used in connection with general office uses (“Permitted Substances”), Tenant shall not cause or permit any Hazardous Substance to be used, stored, generated or disposed of on or in the Building, the Project or the Premises, by Tenant, Tenant’s agents, employees, contractors or invitees without first obtaining Landlord’s written consent. If any Hazardous Substances (other than Permitted Substances) are used, stored, generated, or disposed of on or in the Building, the Project or the Premises, or if the Building, the Project or the Premises, become contaminated in any manner for which Tenant is legally liable or otherwise become affected by any storage, release or discharge of a Hazardous Substance, Tenant shall immediately notify Landlord of the release or discharge of a Hazardous Substance for which Tenant is legally liable and Tenant shall indemnify, defend and hold harmless Landlord and its partners from and against any and all claims, damages, fines, judgments, penalties, costs, liabilities, or losses (including, without limitation, a decrease in value of the Project, the Building or the Premises, damages caused by loss or restriction of rentable or usable space, or any damages caused by adverse impact on marketing of the space, and any and all sums paid for settlement of claims, attorneys’ fees, consultant, and expert fees) arising during or after the term of this Lease, and arising as a result of any contamination, release or discharge of Hazardous

 

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Substances caused by Tenant, its agents, employees, contractors or invitees. This indemnification includes, without limitation, any and all costs incurred because of any investigation of the site or any cleanup, removal, or restoration mandated by federal, state or local agency or political subdivision or required by any Interest Holder. Without limitation of the foregoing, if Tenant causes or permits the presence of any Hazardous Substance on the Premises, the Building or the Project and the same results in any contamination, release or discharge, Tenant shall promptly, at its sole expense, take any and all necessary actions to return the Premises, the Building or the Project, to the conditions existing prior to the presence of any such Hazardous Substance on the Premises, the Building or the Project and in compliance with all applicable laws. Tenant shall first obtain Landlord’s approval for any such remedial action and the approval of the contractors doing the work. Landlord shall have the right to do the work, at Tenant’s sole cost and expense, if Landlord determines an emergency exists or if necessary to protect the health and safety of other tenants of the Project.

 

(b) As used herein, “ Hazardous Substance ” means any substanc