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SIXTH MODIFICATION AND RATIFICATION OF LEASE

Lease Agreement

SIXTH MODIFICATION AND RATIFICATION OF LEASE | Document Parties: ST PAUL PROPERTIES, INC | TRIZETTO GROUP, INC | TRIZZETTO GROUP, INC You are currently viewing:
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ST PAUL PROPERTIES, INC | TRIZETTO GROUP, INC | TRIZZETTO GROUP, INC

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Title: SIXTH MODIFICATION AND RATIFICATION OF LEASE
Governing Law: Colorado     Date: 3/16/2007
Industry: Computer Services     Sector: Technology

SIXTH MODIFICATION AND RATIFICATION OF LEASE, Parties: st paul properties  inc , trizetto group  inc , trizzetto group  inc
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EXHIBIT 10.17

SIXTH MODIFICATION AND RATIFICATION OF LEASE

THIS SIXTH MODIFICATION AND RATIFICATION OF LEASE (this “Modification”) is made and entered into effective the 19 th day of May 2003, by and between ST. PAUL PROPERTIES, INC., a Delaware corporation (“Landlord”), and THE TRIZZETTO GROUP, INC., a Delaware corporation (“Tenant”).

WITNESSETH:

WHEREAS, Landlord and Tenant entered into that certain Office Lease dated as of April 26, 1999, as amended by that certain Lease commencement letter signed by Landlord on September 9, 1999, and by Tenant on September 7, 1999, by that certain First Modification and Ratification of Lease entered into effective November 1, 1999, by that certain Second Modification and Ratification of Lease entered into effective December 27, 1999, by that certain Third Modification and Ratification of Lease entered into effective January 15, 2000, by that certain Fourth Modification and Ratification of Lease entered into October 15, 2000, and by certain of that Fifth Modification and Ratification of Lease entered into effective October 31, 2002 (hereafter collectively the “Lease”), for the rental of certain commercial real property located in the Building known as Atrium I, 6061 S. Willow Drive, Englewood, Colorado, and more particularly described in the Lease as Suites 310 and 300, containing collectively approximately 47,385 rentable square feet (the “Premises” and “Expansion Premises” respectively, which may be collectively referred to herein as the “Premises”) and Suite 233, containing approximately 4,805 rentable square feet (the “Second Expansion Premises”); and

WHEREAS, Tenant desires to extend the term of the Lease for a period of thirty-nine (39) months, from April 30, 2006, to and including July 31, 2009, on the terms and conditions set forth in greater detail in this Modification; and

WHEREAS, Tenant desires to expand the Premises beginning on or about to August 1, 2003, through the addition of the following suites in the Building: Suite 250, containing approximately 4,454 rentable square feet; Suite 235, containing approximately 4,773 rentable square feet; and, Suite 217, containing approximately 2,753 rentable square feet, and including the elimination of the adjacent common area corridor, containing approximately 1,097 rentable square feet (hereafter collectively the “Third Expansion Premises”) as depicted in Exhibit A-3 attached hereto and incorporated by reference; and

WHEREAS, Tenant desires to further expand the Premises beginning on or about August 1, 2003, through the addition of the following suites in the Building: Suite 230 containing approximately 2,297 rentable square feet; and, Suite 260, containing approximately 2,327 rentable square feet (hereafter collectively referred to as the “Fourth Expansion Premises”), as depicted in greater detail in Exhibit A-3 attached hereto and incorporated by reference; and

 


WHEREAS, Landlord is willing to modify the Lease to accommodate such desires, subject to the terms and conditions of this Modification and Landlord and Tenant desire to amend the Lease to reflect the extension of the Lease Term, the addition of the Third Expansion Premises and the Fourth Expansion Premises, and the increase in Base Rent payable under the Lease.

NOW, THEREFORE, in consideration of the foregoing, the agreements of the parties, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. Definitions . All capitalized terms used herein not otherwise defined in this Modification shall have the meanings given them in the Lease.

2. Incorporation of Recitals . The foregoing recitals are incorporated herein and made a part hereof as if set forth in their entirety.

3. Additional Premises . Effective on the earlier of August 1, 2003, or three (3) days after substantial completion of the tenant improvements to be made within the Third Expansion Premises (“Third Expansion Premises Commencement Date”), Landlord shall lease to Tenant and tenant shall lease from Landlord the Third Expansion Premises. Further, effective on August 1, 2003 (the “Fourth Expansion Premises Commencement Date”), Landlord shall lease to Tenant and Tenant shall lease from Landlord the Fourth Expansion Premises. In addition the identification of the Lease Premises in Section 1.03(B) of the Lease is hereby further amended by adding immediately after description of the Second Expansion Premises the following:

THIRD EXPANSION PREMISES:

The following portions of the second floor of the Building outlined on Exhibit A-3 : Suite 250, containing approximately 4,454 rentable square feet; Suite 235, containing approximately 4,773 rentable square feet; Suite 217, containing approximately 2,753 rentable square feet; and including the elimination of the common area corridor adjacent to the foregoing spaces, containing approximately 1,097 rentable square feet .

FOURTH EXPANSION PREMISES:

The following portions of the second floor of the Building outlined on Exhibit A-3 : Suite 230 containing approximately 2,297 rentable square feet; and, Suite 260, containing approximately 2,327 rentable square feet.

4. Third Expansion Premises Commencement Date and Fourth Expansion Premises Commencement Date. Section 1.03(D) of the Lease is hereby amended by adding immediately after the description of commencement date of the Lease the following:

The Third Expansion Premises Commencement Date shall be August 1, 2003. The foregoing notwithstanding, in the event that the tenant improvements made within the Third Expansion Premises as set forth in Exhibit B-3 attached to

 

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the Sixth Modification and Ratification of Lease are substantially complete prior to Agust 1, 2003, and Landlord has obtained a certificate of occupancy for the Third Expansion Premises prior August 1, 2003, Landlord shall allow Tenant to take early occupancy of the Third Expansion Premises, subject to all terms and conditions under the Lease, with the exception of Tenant’s obligation for the payment of Base Rent from the date of such early occupancy until the Third Expansion Premises Commencement Date.

The Fourth Expansion Premises Commencement Date shall be August 1, 2003.

5. Temporary Premises . Upon mutual execution and delivery of this Modification and expiring on September 30, 2003, Landlord shall permit Tenant to occupy up to, but not exceeding, 4,000 rentable square feet in the existing Suite 105, as shown on Exhibit A-4 attached to this Modification and incorporated by reference (the “Temporary Premises”), subject to all of the terms and conditions of the Lease, with the exception of the obligation to pay for Base Rent for the Temporary Premises. Tenant shall be responsible for the payment of all other costs and obligations under the Lease arising as a result of its occupancy and use of the Temporary Premises, including but not limited to the payment of Operating Expenses. Tenant shall occupy the Temporary Premises in their current “as-is” condition and repair. Landlord reserves the right to show Suite 105 to other prospective tenants upon twenty-four (24) hours advance notice to Tenant. Tenant shall have the right to terminate its occupancy of the Temporary Premises prior to September 30, 2003, upon seven (7) days prior written notice to Landlord. In the event that Tenant fails to vacate the Temporary Premises on September 30, 2003, or earlier termination of the Lease, Landlord shall be entitled to exercise all remedies available to Landlord under the Lease in the event of a breach of the Lease, and Tenant shall be responsible for the payment of Base Rent to Landlord for the Temporary Premises in the amount of one and one-half (1  1 / 2 ) times the Base Rent otherwise payable by Tenant for the Premises, and shall also be liable for all damages suffered by Landlord as a result of Tenant’s failure to vacate the Temporary Premises.

6. Termination Date. Section 1.03(F) of the Lease is hereby amended in its entirety by replacing the existing Termination Date of the Lease of April 30, 2006 with the following:

The Termination Date of the Lease for the Premises, Expansion Premises, Second Expansion Premises, Third Expansion Premises and fourth Expansion Premises, shall be July 31, 2009 (seventy-two (72) months following the Third Expansion Premises Commencement Date), unless sooner terminated as provided in this Lease, or as otherwise extended as provided in Exhibit B-3 to the Sixth Modification and Ratification of Lease.

7. Tenant’s Proportionate Share. Section 1.03(J) of the Lease is amended effective on the Third Expansion Premises Commencement Date by adding immediately after the description of the Tenant’s Proportionate Share under the Lease for the Premises the following:

Tenant’s Proportionate Share for the Third Expansion Premises shall be 9.79%.

 

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Tenant’s Proportionate Share for the Fourth Expansion Premises shall be 3.46%.

Tenant’s Proportionate Share for the Temporary Premises shall be 2.99%.

8. Security Deposit. Section 1.03 (K) of the Lease is hereby amended by increasing the security deposit under the Lease in the additional amount of Twenty-Three Thousand Six Hundred Sixteen and 08/100 US Dollars ($23,616.08), for a total security deposit of One Hundred Forty Thousand Four Hundred Sixty-Two and 02/100 and US Dollars ($140,462.02), which additional amount shall be payable to Landlord upon execution of this Modification.

9. Parking Spaces. Effective on the Third Expansion Premises Commencement Date, Section 1.03 (O) of the Lease is deleted in its entirety, as amended, and is replaced with the following:

Commencing on the Third Expansion Premises Commencement Date, and in connection with its occupancy of the premises, Expansion Premises, Second Expansion Premises, Third Expansion Premises and Fourth Expansion Premises, Tenant shall be entitled to the non-exclusive use of a maximum of two hundred and thirty (230) parking spaces in the Building parking areas at no charge during the Term of the Lease expiring on July 31, 2009. Landlord reserves the right to strictly enforce the number of parking spaces utilized by Tenant during the term of this Lease based upon a parking ratio 3.3 parking spaces per 1,000 rentable square feet. Landlord further reserves the right to assign and reassign (with the exception of Tenant’s reserved parking spaces described below), from time to time on a non-discriminatory basis, particular parking spaces for use by persons selected by Landlord, and to issue and implement non-discriminatory rules and regulations with respect to Parking spaces for the Building, provided that Tenant’s rights to the number of parking spaces designated herein are preserved. Within the foregoing parking allowance, Tenant shall be entitled to the use of total of ten (10) covered reserved parking spaces in those areas designated by Landlord for such spaces as of the date of this Modification, at no charge during the initial Term of the Lease.

10. Operating Expenses . Section 2.02 of the Lease, as previously amended, shall be further amended effective on the date of this Modification by deleting the first sentence thereof in its entirety, and replacing it with the following:

In the event Landlord’s operating expenses for the Building shall, in any calendar year during the Term, exceed the sum of those expenses accrued during the base year for the Premises, Expansion Premises, Second Expansion Premises, Third Expansion Premises or Forth Expansion Premises, respectively (“Excess Expenses”) Tenant shall pay as additional rent Tenant’s Proportionate Share of Excess Expenses. The base year for the Premises, Expansion Premises, Second Expansion Premises, Third Expansion Premises and Forth Expansion Premises shall be determined in accordance with the following schedule:

 

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Identification of Premises

 

Rentable Square Feet

 

Lease Period

 

Base Year

Premises   23,610   11/8/99-11/30//04   1999
Premises   23,610   12/1/04-4/30/06   2000
Expansion Premises   23,775   5/1/00-4/30/06   2000
Premises & Expansion Premises   47,385   5/1/06-7/31/06   2003
Second Expansion Premises   4,805   11/1/02-7/31/09   2003
Third Expansion Premises   13,077   8/1/03-7/31/09   2003
Fourth Expansion Premises   4,624   8/1/03-7/31/09   2003

11. Base Rent . Section 1.03 (H) of the Lease entitled Base Rent, and Section 1.03 (I) of the Lease entitled Monthly Installment of Base Rent, are hereby amended by adding the following:

 

  (a) Premises and Expansion Premises Base Rent.

 

Period

 

Rentable

Square Feet

 

Lease

Rate

 

Annual

Payment

 

Monthly

Payment

(6/1/03-4/30/06)   47,385   $19.50/rsf/year   $924,007.50   $77,000.63
(5/1/06-7/31/09)   47,385   $18.50/rsf/year   $876,622.50   $73,051.88

 

  (c) Second Expansion Premises Base Rent . In addition to the Base Rent payable with respect to the Premises and the Expansion Premises, Tenant shall also pay Base Rent for the Second Expansion Premises, payable monthly in advance, without demand, deduction or set-off, in accordance with the following schedule:

 

Period

 

Rentable

Square Feet

 

Lease

Rate

 

Annual

Payment

 

Monthly

Payment

(5/1/03-4/30/06)   4,805   $17.25/rsf/year   $82,886.25   $6,907.19
(5/1/06-7/31/09)   4,805   $18.50/rsf/year   $88,892.50   $7,407.71

 

  (d) Third Expansion Premises Base Rent . In addition to the Base Rent payable with respect to the Premises and the Expansion Premises, the Expansion Premises, and the Second Expansion Premises, beginning on the Third Expansion Premises Commencement Date Tenant shall also pay Base Rent for the Third

 

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Expansion Premises, payable monthly in advance without demand, deduction or set-off, in accordance with the following schedule:

 

Period

 

Rentable

Square Feet

 

Lease

Rate

 

Annual

Payment

 

Monthly

Payment

(8/1/03-4/30/04)   13,077   $14.50/rsf/year   $189,616.50   $15,801.38
(5/1/04-4/30/05)   13,077   $14.79/rsf/year   $193,408.83   $16,117.40
(5/1/05-4/30/06)   13,077   $15.09/rsf/year   $197,331.93   $16,444.33
(5/1/06-4/30/07)   13,077   $15.39/rsf/year   $201,255.03   $16,771.25
(5/1/07-4/30/08)   13,077   $15.70/rsf/year   $205,308.90   $17,109.08
(5/1/08-7/31/09)   13,077   $16.01/rsf/year   $209,362.77   $17,446.90

 

  (e) Fourth Expansion Premises Base Rent. In addition to the Base Rent payable with respect to the Premises, the Expansion Premises, the Expansion Premises, the Second Expansion Premises, and the Third Expansion Premises, beginning on the Fourth Expansion Premises Commencement Date Tenant shall also pay Base Rent for the Fourth Expansion Premises, payable monthly in advance, without demand, deduction or set-off, in accordance with the following schedule:

 

Period

 

Rentable

Square Feet

 

Lease

Rate

 

Annual

Payment

 

Monthly

Payment

(8/1/03-4/30/04)   4,624   $14.50/rsf/year   $67,048.00   $5,587.33
(5/1/04-4/30/05)   4,624   $14.79/rsf/year   $68,388.96   $5,699.08
(5/1/05-4/30/06)   4,624   $15.09/rsf/year   $69,776.16   $5,814.68
(5/1/06-4/30/07)   4,624   $15.39/rsf/year   $71,163.36   $5,930.28
(5/1/07-4/30/08)   4,624   $15.70/rsf/year   $72,596.80   $6,049.73
(5/1/08-7/31/09)   4,624   $16.01/rsf/year   $74,030.24   $6,169.19

12. Base Rent Abatement. The foregoing notwithstanding, and provided that no default (or no event which, with the passage of time or the giving of notice or both, would constitute an event of default under the Lease) shall have occurred under the Lease beyond any applicable period of notice and cure, Base Rent shall be abated as follows: (i) for the Third Expansion Premises Base Rent shall be abated for a period of three (3) months following the Third Expansion Premises Commencement Date for a total Base Rent abatement for the Third Expansion Premises of Forty-Seven Thousand Four Hundred Four and 13/100 US Dollars ($47,404.13); and (ii) for the Fourth Expansion Premises, Base Rent shall be abated for a period

 

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of three (3) months following the Fourth Expansion Premises Commencement Date for a total Base Rent abatement for the Fourth Expansion Premises of Sixteen Thousand Seven Hundred Sixty-Two and No/100 US Dollars ($16,762.00). In the event of any default by Tenant, the entire amount of Base Rent which was otherwise abated, as set forth above, shall be immediately due and payable.

13. Termination Option . Paragraph 10 in the Fifth Modification and Ratification of Lease shall be deleted in its entirely. Tenant shall no longer have a termination option under the terms of the Lease

14. Tenant Improvements . Landlords agrees to provide Tenant with an allowance for construction by Tenant of certain tenant improvements to be incorporated into the Premises, in the amount of Seven Hundred Nine Thousand One Hundred Thirty-Four and No/100 US Dollars ($709,134.00) (the “Construction Credit”) (which Construction Credit is calculated based upon $6.00 per rentable square foot of Suite 300, and $24.00 per rentable square foot for the Third Expansion Premises and the Fourth Expansion Premises), which Construction Credit may be used by Tenant in the manner set forth in Exhibit B-3 , attached to this Modification and incorporated by reference. Landlord shall be paid a construction management supervisory fee out of the Construction Credit equal to one percent (1%) of the hard construction costs of the tenant improvements to be constructed by Tenant, specifically excluding architectural fees, project management fees, permitting, cabling, furniture, fixtures and equipment, which construction management supervisory fee shall not exceed in amount Seven Thousand and No/100 US Dollars ($7,000.00). Landlord’s construction management fee shall be invoiced by and paid to Landlord based upon the invoices submitted by Tenant for reimbursement from Landlord and shall be paid out of the Construction Credit. In the event that Tenant does not use the entire Construction Credit for completion of the improvements to the Premises, the Second Expansion Premises, Third Expansion Premises or the Fourth Expansion Premises, Tenant may apply the unused remainder of the Construction Credit (but in no event exceeding twenty-five percent (25%) of the total Construction Credit) for the payment of Base Rent and other charges next coming due under the Lease, on an amortized basis over the remaining Term of the Lease. Any portion of the Construction Credit not used or committed by Tenant to be applied to Base Rent or other charges coming due under the Lease (in the manner set forth in the foregoing sentence) within eighteen (18) months following the Third Expansion premises Commencement Date shall revert back to Landlord. Landlord, at its option (which option must be exercised, if at all, at the time that Landlord grants its written approval to Tenant’s proposed final construction Plans in the manner described in Exhibit B-3 ) may require Tenant to remove any physical additions and/or repair any alterations made pursuant to this paragraph or Exhibit B-3 , including but not limited to low voltage communications and data cabling, in order to restore the subject portion of the leased premises to the condition existing at the time prior to the commencement of such work, all costs of removal and/or alterations to be done by Tenant. In addition, Tenant shall have the right, at Tenant’s sole cost and expense to remove and relocate from Suite 100 in the Building the following equipment and personal property of Landlord: the UPS unit; two (2) 10-ton Liebert computer room cooling units; and, the raised computer room flooring (“Landlord’s Equipment”). Such removal and relocation of Landlords’s Equipment shall be subject to Landlord’s prior written approval as to the methods and specifications for removal and relocation, which approval shall not be reasonably withheld. In the event that Tenant’s elects

 

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to relocate Landlord’s Equipment as provided in this paragraph, Tenant shall be responsible, at Tenant’s sole cost and expense, for all costs of restoration and repair of those portions of the Building affected by such removal and relocation. In addition, in the event that Tenant elects to relocate Landlord’s Equipment, Tenant agrees to take and use such equipment in its current “as-is” condition and repair, and Tenant shall be solely responsible for all costs of maintaining, repairing and replacing Landlord’s Equipment during the Term of the Lease.

15. Roof Space . Landlord shall make available to Tenant, free of charged during the primary Term, as it may be extended, a portion of the roof of the Building, and associated Building chases, for Tenant’s use for the installation, operation, repair and maintenance of one satellite dish antenna, which usage shall be subject to the terms and conditions of the Satellite Dish License attached to this Modification and made a part hereof.

16. Extension Option . The Extension Option contained in Paragraph 1 of the Addendum to Lease is hereby deleted in its entirety, and is replaced with the following:

Provided no event of default (or no event which, with the passage of time or the giving of notice or both, would constitute an event of default under the Lease) has occurred and is continuing beyond any applicable period of notice and cure, and provided Tenant has not assigned the Lease or sublet all or any portion of the Premises, Tenant shall have one option to extend the term of this Lease for all of the Premises, Expansion Premises, Second Expansion Premises, Third Expansion Premises and Fourth Expansion Premises (but not separate part thereof) for an additional five (5) year term by giving the Landlord written notice at least eight (8) months, but no more than twelve (12) months, prior to the expiration of the then current term of this Lease. Upon the giving of such notice, this Lease shall be considered as extended for such option term upon the same terms, conditions and covenants as are contained in this Lease except that there shall be no additional extension options, and except that charges for parking and for after hours HVAC shall be calculated at the rates than being charged by Landlord to other tenants in the Building for such services and except that the base rent shall be calculated by multiplying the number of rentable square feet of the Premises by the then-fair-market-base-rental-value, which then-fair-market-base-rental-value shall be determined in the manner set forth below.

 

  (a) Landlord and Tenant will have thirty (30) days after Landlord receives the Tenant’s notice of its intent to exercise any extension within which to agree on the then-fair-market-base-rental-value of the Premises. If they agree on the fair market base rent for the subject option period within thirty (30) days, they will amend this lease by stating the new base rent for the option period.

 

  (b) If Landlord and Tenant are unable to agree on the then-fair-market-base-rental-value of the Premises for the option period within thirty (30) days, then the base rent for the option period will be the then-fair-market-base-rental-value of the Premises as determined in accordance with subparagraph d below.

 

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  (c) The “then-fair-market-rental-value of the Premises” means what a landlord under no compulsion to Lease the Premises and a tenant under no compulsion to lease the Premises would determine as rents (including initial monthly rent and rental increases) for the option period, as of the commencement of the option period and determined according to recent market lease transactions in comparable buildings located in the market area of the Premises, taking into consideration the uses permitted under this Lease, the quality, size, design and location of the Premises, the credit-worthiness of the Tenant, allowances for rental abatement, moving and tenant finish, if any, and any other factor reasonably related to the determination of rental values.

 

  (d) If Landlord and Tenant are unable to agree upon the then fair market base rental value of the Premises, within fifteen (15) days after the expiration of the thirty (30) day period set forth in subparagraph a. above, Landlord and Tenant will each appoint a commercial real estate broker with at least ten (10) years’ full-time commercial experience in the area in which the Premises are located to determine the then-fair market rental value of the Premises. If either Landlord or Tenant does not app

 
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