Exhibit 10.14
OFFICE LEASE
PRINCIPAL LIFE INSURANCE COMPANY,
an Iowa corporation,
Landlord
AND
POLICY STUDIES INC.,
a Colorado corporation
Tenant
Regarding the Premises Located
at:
1875 Lawrence Street
Suite 1200
Denver, Colorado 80202
TABLE OF CONTENTS
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1.
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Basic Lease Terms
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Page 1
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2.
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Demise, Term, Relocation
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Page 3
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3.
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Rent
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Page 4
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4.
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Taxes and Operating Expense
Adjustment
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Page 4
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5.
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Building Services
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Page 8
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6.
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Tenant Repair
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Page 10
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7.
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Assignment and Subletting
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Page 11
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8.
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Transfer by Landlord
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Page 13
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9.
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Use of Premises
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Page 13
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10.
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Insurance
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Page 14
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11.
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Observance of Law
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Page 15
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12.
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Waste and Nuisance
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Page 16
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13.
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Entry by Landlord
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Page 16
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14.
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Release, Waiver and Indemnification
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Page 16
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15.
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Alterations
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Page 17
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16.
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Signs and Advertising
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Page 18
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17.
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Subordination to Mortgages and Deeds of
Trust
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Page 19
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18.
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Estoppel Certificate
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Page 19
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19.
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Quiet Enjoyment
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Page 20
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20.
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Fixtures
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Page 20
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21.
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Damage or Destruction
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Page 20
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22.
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Condemnation
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Page 21
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23.
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Loss and Damage and Delay
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Page 21
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24.
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Default and Remedies
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Page 22
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25.
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Holding Over
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Page 25
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26.
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Notice
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Page 25
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27.
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Security Deposit
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Page 25
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28.
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Real Estate Brokers
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Page 26
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29.
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Miscellaneous Provisions
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Page 26
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Execution Page
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Page 29
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Rider to Lease
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Page 30
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Exhibit A - Premises
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Page 35
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Exhibit B - Legal Description
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Page 36
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Exhibit C – Work Letter
Agreement
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Page 37
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Exhibit C-I – Space Plans by
Waring
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Page 41
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Exhibit D – Rules and
Regulations
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Page 43
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Exhibit E – Janitorial and Cleaning
Services
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Page 47
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Exhibit F – Parking
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Page 48
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Exhibit G – Confirmation of
Lease
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Page 49
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STANDARD OFFICE
LEASE
(1875 Lawrence Street, Denver,
Colorado)
THIS LEASE (“Lease”) is
dated for identification purposes only as of March 1, 2005, by
and between Principal Life Insurance Company, an Iowa Corporation
(“Landlord”) and Policy Studies Inc., a Colorado
corporation (“Tenant”).
W I T N E S S E T
H:
ARTICLE I – BASIC LEASE
TERMS
1.1
Landlord and Landlord’s
Address for Notice:
Principal Capital
Management
801 Grand Ave.
Des Moines, Iowa
50392-1370
Attn: Commercial Real Estate
Equities
With a copy to:
Trammell Crow
Services, Inc.
1875 Lawrence Street,
Suite 730
Denver, Colorado 80202
Attn: Cyndi Murren
Tel:
303-296-7622
Fax:
303-846-3237
1.2
Tenant and Tenant’s Address
for Notice:
Policy Studies Inc.
1899 Wynkoop St.,
Suite 300, Denver CO
80202
ATTN: Facilities Director
1.3
Guarantor: None.
1.4
Premises: Suite No. 1200 of the
Building as shown on the floor plan attached hereto as
Exhibit A.
1.5
Building: That certain property,
building and other improvements located at 1875 Lawrence Street,
Denver, Colorado 80202. The legal description of the Building is
set forth in Exhibit B hereto.
1.6
Area of Premises: The Premises shall
be deemed to be 13,595 rentable square feet of space, which
includes all leasable areas of the twelfth floor of the
Building.
1.7
Lease Term: Sixty-three (63)
full calendar months and any partial month.
1.8
Commencement Date: The later of
(a) June 1, 2005, or (b) the Date of Substantial
Completion of the Initial Space, as provided in the Work Letter
attached hereto as Exhibit C .
1.9
Expiration Date: August 31,
2010.
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1.10
Base Rent:
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Dates
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Approx. Rate/RSF/Year
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Monthly Installment
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06/01/05 – 08/31/05
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$
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0.00
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*
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$
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0.00
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*
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09/01/05 – 05/31/06
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$
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17.00
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$
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19,259.58
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06/01/06 – 05/31/07
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$
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17.50
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$
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19,826.04
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06/01/07 – 05/31/08
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$
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18.00
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$
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20,392.50
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06/01/08 – 05/31/09
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$
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18.50
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$
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20,958.96
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06/01/09 – 08/31/10
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$
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19.00
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$
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21,525.42
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*Such abatement shall apply solely to payment of
the monthly installments of Base Rent, and shall not be applicable
to any other charges, expenses or costs payable by Tenant under
this Lease. Landlord and Tenant agree that the abatement of rental
and other payments contained in this Section is conditional
and is made by Landlord in reliance upon Tenant’s faithful
and continued performance of the terms, conditions and covenants of
this Lease and the payment of all monies due Landlord hereunder. In
the event that Tenant defaults under the terms and conditions of
the Lease beyond any applicable notice and cure period, all
conditionally abated rental and other payments shall become fully
liquidated and immediately due and payable at the rate of $17.00
per rentable square foot of space (without limitation and in
addition to any and all other rights and remedies available to
Landlord provided herein or at law and in equity).
1.11
Tenant’s Proportionate
Share:
7.32%.
Estimates (subject to change) of
Tenant’s Proportionate Share of Operating Expenses and Taxes
are as follows:
Calendar year 2004: $8.40
Calendar year 2005: $8.49
1.12
Base Year: Calendar year
2005.
1.13
Security Deposit: Ten Thousand Five
Hundred and No/100ths Dollars ($10,500.00).
1.14
Brokers:
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Landlord’s Broker:
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Trammell Crow Services, Inc.
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Crescent VII
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8390 East Crescent Parkway,
Suite 300
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Greenwood Village, Colorado 80111
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Attn: Jeff Castleton
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Tenant’s Broker:
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Oberndorf Properties LTD
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50 South Steele, Suite 510
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Denver, CO 80209
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1.15
Landlord’s Management Agent
and Address:
Trammell Crow
Services, Inc.
1875 Lawrence Street,
Suite 730
Denver, Colorado 80202
2
1.16
Rent Payment Address:
Principal Life Insurance
Company
c/o Trammell Crow
Denver, Inc.
Dept. 688
1875 Lawrence Street
Denver, Colorado
80291-0688
1.17
Parking Spaces: Thirteen (13)
parking spaces in such areas of the parking facilities associated
with the Building as may be reasonably designated by Landlord from
time to time. None of the Parking Spaces shall be assigned or
reserved.
1.18
Monthly Parking Rent: $90.00 per
month for the Parking Spaces during the two (2) year period
following the Commencement Date. At any time thereafter Monthly
Parking Rent may increase upon thirty (30) days’ prior
written notice to Tenant to Landlord’s then standard
rate.
1.19
Permitted Uses: General office uses
related to business consulting in keeping with the first class
nature of the Building.
1.20
Allowance: Two Hundred Ninety-Nine
Thousand Ninety and No/100ths Dollars ($299,090.00) (i.e.,
approximately $22.00 per rentable square foot of space in the
Premises), as more fully set forth in the Work Letter, attached
hereto as Exhibit C and incorporated herein by
this reference.
ARTICLE 2 – DEMISE, TERM,
RELOCATION
2.1
Demise . Landlord does hereby lease to Tenant and
Tenant hereby leases from Landlord the Premises, which Premises are
situated in the Building, together with a non-exclusive right
subject to the provisions hereof, to use all appurtenances thereto,
including, but not limited to, any plazas, common areas, walkways
or other areas in the Building or on the Property designated by
Landlord for the exclusive or non-exclusive use of tenants of the
Building, all of which inclusive of the Building are hereinafter
collectively called the “Building”. Such letting and
hiring is upon and subject to the terms, conditions and covenants
herein set forth, and Tenant covenants as a material part of the
consideration for this Lease to keep and perform each and all of
said terms, conditions and covenants by it to be kept and performed
and that this Lease is made upon the condition of such
performance.
2.2
Term . The term of this Lease shall commence on the
Commencement Date and expire on the Expiration Date unless sooner
terminated as provided in this Lease and except as provided in the
Work Letter attached hereto as Exhibit C . If
Landlord shall he unable to deliver possession of the Premises to
Tenant on the Commencement Date for any reason whatsoever, this
Lease shall not be void or voidable and Landlord shall not be
subject to any liability for the failure to deliver possession on
said date nor shall such failure to deliver possession on the
Commencement Date affect the validity of this Lease or the
obligations of Tenant hereunder. Tenant’s entry into or
occupancy of the Premises prior to the Commencement Date for any
purpose (including construction) shall be governed by the terms and
conditions of this Lease.
2.3
Supplemental Agreement
. Within five (5) days after
the commencement of the term of this Lease, Tenant agrees to
execute a Supplemental Agreement to become a part hereof, setting
forth the commencement and termination dates of the term of this
Lease.
2.4
Landlord’s Work
. Other than as set forth in
Exhibit C , Landlord shall have no obligation
for the completion of the Premises and Tenant shall accept the
Premises in its “AS IS” condition as of the date
Landlord delivers possession thereof in accordance with the
provisions hereof.
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2.5
Landlord’s Failure to
Complete .
Notwithstanding anything to the contrary herein, if this Lease has
not commenced on or before two (2) years from the date hereof,
then this Lease shall be automatically terminated without notice.
In the event of the termination of this Lease pursuant to the terms
hereof, neither party shall have any liability or obligation
whatsoever to the other except that any deposit of Tenant shall be
promptly refunded, without interest, by Landlord.
ARTICLE 3 - RENT
3.1
Base Rent . Tenant agrees to pay as Base Rent, Base Real
Estate Taxes and Operating Expenses, as defined in Article 4,
without notice, deduction, set-off or abatement to Landlord at the
Building, or such other address as Landlord may notify Tenant of in
writing, in lawful money of the United States payable in advance on
the first day of each month. If the Lease Term commences or
terminates on a day other than the first or last day of a calendar
month respectively, then the installments of Base Rent for such
month or months shall be prorated and the installments so prorated
shall be paid in advance.
3.2
Additional Rent
. Any other sums of money or charges
to be paid by Tenant pursuant to the provisions of this Lease may
be designated as “Additional Rent”. All Additional Rent
shall be paid without offset or demand, unless otherwise
specifically set forth herein. A failure to pay Additional Rent
shall be treated in all events as the failure to pay
rent.
3.3
Prepayment of First Month’s
Rent . Simultaneously
with the execution hereof Tenant has deposited with Landlord a sum
equal to the Base Rent for the first full month of the Lease Term,
which shall be applied to the first month’s Rent as same
becomes due and payable.
ARTICLE 4 - TAXES AND OPERATING EXPENSE
ADJUSTMENT
4.1
Definitions
. The following terms shall have the
following meanings with respect to the provisions of this
Section 4.1:
(a)
“Base Real Estate Taxes and
Operating Expenses” shall mean the actual operating expenses
and real estate taxes for the Base Year.
(b)
“Tenant’s Proportionate
Share” shall be as set forth in Section 1.11 above. At
such time, if ever, any space is added to the Premises as
hereinbelow provided, Tenant’s Proportionate Share shall be
increased accordingly.
(c)
“Real Estate Taxes”
shall include (a) any form of assessment (including any
so-called “special” assessments), license tax, business
license fee, business license tax, commercial rental tax, levy,
charge, penalty or tax, imposed by any authority having the direct
power to tax, including any city, county, state or federal
government, or any school, agricultural, lighting, water, drainage
or other improvement or special district thereof, against the
Premises, the Building or Property or any legal or equitable
interest of Landlord therein; (b) any tax on Landlord’s
right to rent or other income from the Premises or against
Landlord’s business of leasing the Premises; and (c) any
assessments, tax, fee, levy or charge in substitution, partially or
totally, of or in addition to any assessment, tax, fee, levy or
charge previously included within the definition of Real Estate
Taxes which may be imposed by governmental agencies for such
services as fire protection, street, sidewalk and road maintenance,
refuse removal and for other governmental services formerly
provided without charge to property owners or occupants. It is the
intention of Landlord and Tenant that all such new and increased
assessments, taxes, fees, levies and charges be included within the
definition of Real Estate Taxes for purposes of this Lease. The
following shall also be included within the definition of Real
Estate Taxes for purposes of this Lease, provided, however, that
Tenant shall pay Landlord the entire amount thereof: (i) any
tax allocable to or measured by the area of the Premises or the
rental payable hereunder, including without limitation, any gross
income, privilege, sales or excise tax levied by the State, any
political
4
subdivision thereof, city, municipal
or federal government, with respect to the receipt of such rental,
or upon or with respect to the possession, leasing, operating,
management, maintenance, alteration, repair, use or occupancy by
Tenant of the Premises or any portion thereof; and (ii) any
tax upon this transaction or any document to which Tenant is a
party, creating or transferring an interest or an estate in the
Premises. “Real Estate Taxes” shall not include
Landlord’s federal or state income, franchise, inheritance or
estate taxes. “Real Estate Taxes” included in this
definition mean taxes or assessments in the year assessed, without
regard to the year in which same become due or payable.
(d)
“Operating Expenses”
shall mean any and all costs, liabilities and expenses of any kind
or nature related directly or indirectly to the ownership,
operation, repair, and/or maintenance of the Building. Without
limitation to the generality of the foregoing, Operating Expenses
shall specifically include the cost of the following: building
supplies, window cleaning, energy for the Building such as propane,
butane, natural gas, steam, electricity, solar energy and fuel oil;
the costs of water and sewer service, janitorial services, both
interior and exterior; general maintenance and repair of the
Building, including the heating and air conditioning systems and
structural components of the Building; landscaping; maintenance,
repair and striping of all parking areas; insurance, including fire
and extended coverage and public liability insurance and any rental
insurance and all risk insurance carried by Landlord; labor for the
operation and maintenance of the Building, including wages,
benefits and other payments; costs to Landlord for Worker’s
Compensation and disability insurance; payroll taxes and welfare
fringe benefits; professional management, legal, accounting,
inspection and consultation fees incurred in connection with the
Building; new capital improvements to the Building, provided that
the same are for the purpose of reducing operating expenses (such
as energy conservation) or as may be required by governmental
entities and shall be amortized over the applicable useful life
with interest in accordance with such reasonable life and
amortization schedules as shall be determined by Landlord in
accordance with generally accepted accounting principles.
Notwithstanding the foregoing, Operating Expenses shall not
include:
(1)
Principal or interest payments with
respect to mortgages against the Building;
(2)
Ground lease payments or any other
payments under any superior lease;
(3)
Depreciation and amortizations,
except as provided herein all as determined in accordance with
generally accepted accounting principles and sound real estate
practices, consistently applied, and when depreciation or
amortization is permitted or required, the item shall be amortized
over its reasonably anticipated useful life;
(4)
Capital improvements or replacements
to the extent not amortized over the applicable useful life, or new
capital improvements other than those allowed above;
(5)
Charges for special items or
services billed separately to (and in addition to Expense
Adjustment Statements) and paid by tenants of the
Building;
(6)
Costs of any items to the extent
Landlord receives reimbursement from insurance proceeds from
Landlord’s or Tenant’s insurance carriers or from a
third party;
(7)
The cost of providing any service
directly to and paid directly by any tenant (other than through
Operating Expense pass through provisions), and the cost of
services provided selectively to one or more tenants of the
Building (other than Tenant) without reimbursement;
(8)
Marketing costs, including leasing
commissions, attorneys’ fees (in connection with the
negotiation and preparation of letters, deal memos, letters of
intent, leases, subleases and/or assignments), space planning
costs, and other costs and expenses incurred in connection with
lease, sublease and/or
5
assignment negotiations and transactions with
present or prospective tenants or other occupants of the
Building;
(9)
Costs, including permit, license and
inspection costs, incurred with respect to the installation of
tenant improvements made for new tenants in the Building, or
incurred in renovating or otherwise improving, modifying,
decorating, painting or redecorating vacant space for occupancy by
tenants or other occupants of the Building;
(10)
Costs associated with the operation
of the business of the ownership or entity which constitutes
“Landlord”, as the same are distinguished from the
costs of operating the Building including, but not limited to,
costs of defending any lawsuits with any mortgagee, legal fees
incurred in the negotiation and enforcement of tenant leases and
costs of selling, syndicating, financing, mortgaging or
hypothecating any of Landlord’s interest in the
Building;
(11)
The wages of any employee above the
grade of building manager;
(12)
The cost of services provided by
Landlord’s affiliates to the extent that such costs would
exceed the costs of such services rendered by unaffiliated third
parties on a competitive basis;
(13)
Fines, penalties and interest
incurred as a result of Landlord’s negligence or willful
misconduct;
(14)
Any bad debt loss, rent loss, or
reserves for bad debts or rent loss; or
(15)
Landlord’s cost of electricity
and other services which it has sold to tenants and for which
Landlord has been reimbursed.
(e)
“Lease Year” shall mean
each twelve month period subsequent to the Commencement
Date.
(f)
“Variable Operating
Expenses” shall mean those Operating Expenses which vary with
occupancy levels or which vary with areas serviced based upon
occupied Rentable Area.
4.2
Payments of Taxes and Operating
Expenses . In addition to
Base Rent, Tenant shall reimburse Landlord for Real Estate Taxes
and Operating Expenses for the Building as hereinafter set forth.
It is hereby agreed that during each Lease Year of the Lease Term
hereof, Tenant shall pay to Landlord Tenant’s Proportionate
Share of the amount of increase in the Operating Expenses and Real
Estate Taxes over Tenant’s Proportionate Share of the Base
Real Estate Taxes and Base Operating Expenses. It is agreed that
Tenant shall, during each calendar year in which the term of this
Lease commences pay to Landlord an estimate of Tenant’s
Proportionate Share of such increased Real Estate Taxes and
Operating Expenses, if any, as hereinafter set forth. Beginning
with the first calendar year following the year in which this Lease
commenced, Tenant shall pay to Landlord each month on the first day
of the month an amount equal to one-twelfth (1/12) of the increase,
if any, in Tenant’s Proportionate Share of the Operating
Expenses for the new calendar year as reasonably estimated by
Landlord over Tenant’s Proportionate Share of the Base Real
Estate Taxes and Operating Expenses, with an adjustment to be made
between the parties at a later date as hereinafter provided.
Furthermore, Landlord may from time to time but no more than three
(3) times during any Lease Year furnish Tenant with notice of
a re-estimation of the Real Estate Taxes and Operating Expenses and
Tenant shall commence paying its re-estimated Proportionate Share
on the first day of the month following receipt of said notice. As
soon as practicable following the end of any calendar year,
Landlord shall submit to Tenant a statement setting forth the exact
amount of the increase, if any, in Tenant’s Proportionate
Share of the Real Estate Taxes and Operating Expenses for the
calendar year just completed over Tenant’s Proportionate
Share of the Base Real Estate Taxes and Operating Expenses, and the
difference, if any, between Tenant’s actual Proportionate
Share of the Real Estate Taxes and Operating Expenses for the
calendar year just completed and
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the estimated amount of Tenant’s
Proportionate Share of the Real Estate Taxes and Operating Expenses
(which was paid in accordance with this subparagraph) for such
year. Such statement shall also set forth the amount of the
estimated Real Estate Taxes and Operating Expenses reimbursement
for the new calendar year computed in accordance with the foregoing
provisions. To the extent that Tenant’s Proportionate Share
of the actual Real Estate Taxes and Operating Expenses for the
period covered by such statement are higher than the estimated
increases which Tenant previously paid during the calendar year
just completed, Tenant shall pay to Landlord the difference in cash
within thirty (30) days following receipt of said statement from
Landlord. To the extent that Tenant’s Proportionate Share of
the actual Real Estate Taxes and Operating Expenses for the period
covered by the Statements are less than the estimated increases
which Tenant previously paid during the calendar year just
completed, Landlord may at its option either refund said amount in
cash to Tenant or credit the difference against Tenant’s next
accruing Base Rent or Additional Rent. In addition, with respect to
the monthly reimbursement, until Tenant receives such statement,
Tenant’s monthly reimbursement for the new calendar year
shall continue to be paid at the then current rate, but Tenant
shall commence payment to Landlord of the monthly installments of
reimbursement on the basis of the statement beginning on the first
day of the month following the month in which Tenant receives such
statement.
Tenant’s obligation with respect to its
proportionate share of the Real Estate Taxes and Operating Expenses
shall survive the expiration or early termination of this Lease and
Landlord shall have the right to retain the Security Deposit, or so
much thereof as it deems necessary, to secure payment of
Tenant’s Proportionate Share of the actual Real Estate Taxes
and Operating Expenses for the portion of the final year of the
Lease during which Tenant was obligated to pay such expenses. If
Tenant occupies the Premises for less than a full calendar year
during the first or last calendar years of the term hereof,
Tenant’s Proportionate Share for such partial year shall be
calculated by proportionately reducing the Base Real Estate Taxes
and Operating Expenses to reflect the number of months in such year
during which Tenant occupied the Premises (the “Adjusted Base
Real Estate Taxes and Operating Expenses”). The Adjusted Base
Real Estate Taxes and Operating Expenses shall then be compared
with the actual Real Estate Taxes and Operating Expenses for said
partial year to determine the amount, if any, of any increases in
the actual Real Estate Taxes and Operating Expenses for such
partial year over the Adjusted Base Real Estate Taxes and Operating
Expenses. Tenant shall pay its Proportionate Share of any such
increases within thirty (30) days following receipt of notice
thereof.
Tenant shall have the right but not more than
once per annum, at any time within one hundred twenty (120) days
after a statement of actual Real Estate Taxes and Operating
Expenses for a particular calendar year has been rendered by
Landlord as provided herein, at Tenant’s sole cost and
expense, to examine Landlord’s books and records during
normal business hours, at Landlord’s office relating to the
determination of such Real Estate Taxes and Operating Expenses.
Unless Tenant objects to the statement herein within said one
hundred twenty (120) days following receipt of Landlord’s
statement, such statement and adjustment shall be deemed
conclusive.
4.3
Gross Up of Operating
Expenses . If at any time
the Building is not fully occupied or Landlord is not supplying
services to all rentable areas of the Building during an entire
calendar year, then Landlord may adjust actual Operating Expenses
to Landlord’s reasonable estimate of that amount, which would
have been paid or incurred by Landlord as Operating Expenses had
the Building been fully occupied or serviced, and the Operating
Expenses as so adjusted shall be deemed to be the actual Operating
Expenses for such calendar year, provided that in such case that a
similar adjustment is also made to the Base Year Operating
Expenses. If Landlord does not furnish during any applicable period
any particular work or service (the cost of which, if performed by
Landlord, would constitute an Operating Expense) to a tenant which
has undertaken to perform such work or service in lieu of the
performance thereof by Landlord, then Operating Expenses shall be
deemed to be increased by an amount equal to the additional expense
which would reasonably have been incurred during such period by
Landlord if it had, at its cost, furnished such work or service to
such tenant. The provisions of the preceding sentences will apply
only to those Operating Expenses that either vary with occupancy or
by reason of one or more tenants not receiving goods or services
the cost of which constitutes all or part of such Operating
Expenses.
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4.4
Reimbursement Survives
Termination . In the
event of the termination of this Lease by expiration of the stated
term or for any other cause or reason whatsoever prior to the
determination of rental adjustment as hereinafter set forth,
Tenant’s agreement to reimburse Landlord up to the time of
termination shall survive termination of the Lease and Tenant shall
pay any amount due to Landlord within fifteen (15) days after being
billed therefor. In the event of the termination of this Lease by
expiration of the stated term or for any other cause or reason
whatsoever, except default by Tenant of any of the terms or
provisions of this Lease, prior to the determination of rental
adjustments as hereinabove set forth, Landlord’s agreement to
refund any excess additional rental paid by Tenant up to the time
of termination shall survive termination of the Lease and Landlord
shall pay the amount due to Tenant within fifteen (15) days of
Landlord’s determination of such amount. This covenant shall
survive the expiration or termination of this Lease.
If the last year of the term of this Lease ends
on any day other than the last day of December, any payment due to
Landlord by reason of any increase in Real Estate Taxes and
Operating Costs shall be prorated on the basis by which the number
of days in such partial year bears to 365.
Any failure of Landlord to furnish Tenant with
an estimate of its Proportionate Share of Real Estate Taxes and
Operating Expenses or any statements as set forth in this
Article 4 shall not act to relieve Tenant of its liability
therefor; and with respect to any deficiencies, Tenant agrees to
pay same within thirty (30) days of written demand from
Landlord.
ARTICLE 5 - BUILDING SERVICES
5.1
Standard Services
. Landlord agrees to furnish to the
Premises during regular business hours from 7:00 a.m. to
6:00 p.m. Mondays through Fridays and from 8:00 a.m. to
1:00 p.m. Saturdays, except for holidays as the same are
determined by Landlord, and subject to the rules and
regulations of the Building, heat and air conditioning for the use
and occupancy of the Premises, passenger elevator service and
freight elevator service, subject to scheduling by Landlord
provided, however, that a passenger elevator shall always be
available to Tenant. Landlord shall also furnish: (i) electric
current to be supplied for lighting the Premises and public halls,
and for the operation of ordinary office equipment, exclusive of
equipment that is not standard or is in above-standard quantities
generally for tenants of the Building, (ii) janitorial and
cleaning services substantially as set forth in
Exhibit E , and (iii) domestic water in
reasonable quantity. Elevator service shall mean service either by
non-attended automatic elevators or elevators with attendants at
the option of Landlord. Landlord shall also furnish, at rates set
from time to time as solely determined by Landlord, heating and air
conditioning and such other items as are not provided for herein,
provided Tenant gives Landlord not less than forty-eight (48) hours
notice of Tenant’s needs for such additional heating or air
conditioning. The current over-time HVAC service rate is $75 per
hour per floor, which amount is subject to change. Landlord shall
also, at said times, maintain and keep lighted the common stairs,
entries, and toilet rooms in the Building that would reasonably be
subject to use by Tenant, its agents and employees during other
than regular business hours. Landlord also has the right to charge
Tenant for energy costs incurred because of Tenant’s above
Building average usage or by reason of usage of the Premises or the
Building during other than regular business hours.
5.2
Interruption of Standard
Services . Tenant agrees
that Landlord shall not be liable for failure to supply any
heating, air conditioning, elevator, janitorial services, electric
current, or any other service described in this Lease during any
period when Landlord uses reasonable diligence to restore or to
supply such services or electric current, it being further agreed
that Landlord reserves the right to temporarily discontinue such
services or any of them, or electric current at such times as may
be necessary by reason of accident, unavailability of employees,
repairs, alterations, or improvements, or whenever by reason of
strikes, lockouts, riots, acts of God or any other happening or
occurrence beyond the reasonable control of Landlord. If Landlord
is unable to furnish such services or electric current, Landlord
shall not be liable for damages to persons or property for any such
discontinuance, nor shall such discontinuance in any way be
construed as a constructive or actual eviction of Tenant or cause
an abatement of rent or operate to release Tenant from any of
Tenant’s obligations
8
hereunder. Landlord’s obligation to
furnish services or electric current shall be conditioned upon the
availability of adequate energy sources from the public utility
companies presently serving the Building. Landlord shall have the
right to reduce heating, cooling or lighting within the Premises
and in the public area in the Building as required by any mandatory
or voluntary fuel or energy-saving program. Furthermore, due to
Colorado Energy Code Design Requirements, Tenant hereby
acknowledges that it may on certain days experience discomfort with
the heating and air conditioning cycle, and Landlord shall have no
responsibility or liability therefor.
If Landlord fails to provide any
essential Building services specifically required to be provided by
Landlord under the lease (i.e., water, electricity, sewer, elevator
service, HVAC, restrooms, loss of life safety systems, failure of
fire code compliance), and such interruption of service renders the
Premises or any portion of the Premises untenantable for a period
of five (5) consecutive business days following
Landlord’s receipt of written notice from Tenant of such
interruption of service, the Rent shall abate in proportion to the
area of the Premises that is rendered untenantable. Such abatement
period shall commence upon the expiration of said five
(5) business day period. No such abatement shall be provided
if such interruption of service is caused by the negligence or
willful misconduct of Tenant, its agents, employees, contractors,
subtenants, invitees or assignees or by an act of God, or by
matters not within the control of Landlord (including without
limitation the interruption of electrical service to the Building
through no fault of Landlord). The Premises shall be considered
untenantable if Tenant cannot use the Premises or portion thereof
affected in the conduct of its normal business operations as a
result of said interruption of service to the Premises. It is
agreed and understood that Tenant shall not use or be entitled to
use the Premises or portion thereof affected to conduct its normal
business operations during any day for which Landlord is obligated
to abate rent hereunder. The abatement herein provided shall he
Tenant’s sole and exclusive remedy for interruption of
service. Landlord agrees to use its reasonable efforts to restore
such services as soon as possible. Tenant agrees to fully cooperate
with Landlord in remedying any such interruption of essential
Building services. The terms and conditions of this Section 5
shall not apply to situations contemplated under provisions of the
Lease pertaining to condemnation, eminent domain, damage or
destruction elsewhere described in the Lease.
5.3
Services Paid by
Tenant . Unless otherwise
provided by Landlord, Tenant shall separately arrange with the
applicable local public authorities or utilities, as the case may
be, for the furnishing of and payment for all telephone services as
may be required by Tenant in the use of the Premises. Tenant shall
directly pay for such telephone services, including the
establishment and connection thereof, at the rates charged for such
services by said authority or utility, and the failure of Tenant to
obtain or to continue to receive such services for any reason
whatsoever shall not relieve Tenant of any of its obligations under
this Lease.
5.4
Above-Standard Service
Requirements . if heat -
generating machines or equipment, including telephone equipment,
cause the temperature in the Premises, or any part thereof, to
exceed the temperatures the Building’s air conditioning
system would be able to maintain in such Premises were it not for
such heat generating equipment, then Landlord reserves the right to
install supplementary air conditioning units in the Premises, and
the cost thereof, including the cost of installation and the cost
of operation and maintenance thereof, shall be paid by Tenant to
Landlord upon demand by Landlord.
Tenant shall not, without the written consent of
Landlord, not to be unreasonably withheld, use any apparatus or
device which will in any way increase the amount of electricity or
water which Landlord determines to be reasonable for use of the
Premises as general office space, nor connect with electric current
(except through existing electrical outlets in the Premises) or
water pipes any apparatus or device for the purposes of using
electric current, other energy or water. Landlord shall have the
right to install one or more separately submetered electrical
circuits to serve all of Tenant’s equipment, machinery or
appliances which equipment, machinery or appliances requires
electrical current supplied to the Premises for general office
purposes as the same is determined by Landlord which costs of
submetering shall be payable by Tenant to Landlord upon demand.
Tenant agrees to reimburse Landlord for the submetered electrical
current utilized by Tenant at the rates charged to Landlord to
purchase electrical current for the Building, such reimbursement to
be made
9
within fifteen (15) days of the date of the
billing therefor; such billing to occur no more frequently than
monthly.
5.5
Cleaning . Tenant shall not provide any janitorial or
cleaning services without Landlord’s written consent not to
be unreasonably withheld, and then only subject to supervision of
Landlord, at Tenant’s sole responsibility, and by a
janitorial or cleaning contractor or employees at all times
satisfactory to Landlord. Landlord shall provide janitorial and
cleaning services substantially as set forth on
Exhibit E .
5.6
Re-Lamping
. Landlord shall have the exclusive
right to make any replacement of electric light bulbs, fluorescent
tubes and ballasts in the Building throughout the Primary Lease
Term and any renewal thereof. Landlord may adopt a system of
relamping and reballasting periodically on a group basis in
accordance with good management practice.
ARTICLE 6 - TENANT REPAIR
6.1
Damage by Tenant
. If the Building, the Premises or
any portion thereof including but not limited to the elevators,
boilers, engines, pipes and other apparatus, or members of elements
of the Building (or any of them) used for the purpose of climate
control of the Building or operating the elevators, or if the water
pipes, drainage pipes, electric lighting or other equipment of the
Building or the roof or outside walls of the Building or parking
facilities of Landlord and also Tenant Finish including but not
limited to the carpet, wall covering, doors and woodwork, become
damaged or are destroyed through the negligence, carelessness or
misuse of Tenant, its servants, agents, employees or anyone
permitted by Tenant to be in the Building, or through him or them,
then the cost of the necessary repairs, replacements or alterations
shall be borne by Tenant who shall forthwith pay the same on demand
to Landlord as Additional Rent. Landlord shall have the exclusive
right, but not the obligation, to make any repairs necessitated by
such damage.
6.2
Maintenance
. Tenant shall keep the Premises in
as good order, condition and repair as when they were entered upon,
ordinary wear and tear excepted. If Tenant fails to keep the
Premises in such good order, condition and repair as required
hereunder to the satisfaction of Landlord, Landlord may restore the
Premises to such good order and condition and make such repairs
without liability to Tenant for any loss or damage that may accrue
to Tenant’s property or business by reason thereof, and upon
completion thereof, Tenant shall pay to Landlord, as Additional
Rent, upon demand, the cost of restoring the Premises to such good
order and condition and of the making of such repairs.
6.3
Good Condition
. Tenant shall leave the Premises at
the end of each Business Day in a reasonably tidy condition for the
purpose of allowing the performance of Landlord’s cleaning
services hereinafter described.
6.4
Surrender . Tenant shall deliver, at the expiration of the
Term hereof or upon sooner termination of the Term, the Premises in
good repair as aforesaid and in a state of broom cleanliness,
reasonable wear and tear excepted. At all times during the term of
this Lease, Tenant shall ensure that all wiring and cabling that it
installs within the Premises or Building complies with all
provisions of local fire and safety codes, as well as with the
National Electric Code. Further, upon the expiration or sooner
termination of the Term, Tenant shall remove all wiring and cabling
within the Premises and the Building (including the plenums, risers
and rooftop) placed there by or at the direction of Tenant, unless
excused in writing by Landlord. Without limitation to the remedies
available to Landlord in the event that Tenant fails to comply with
the terms and conditions of this subsection, Tenant shall forfeit
such sums from the Security Deposit (or otherwise pay to Landlord)
an amount that Landlord reasonably believes necessary for the
removal and disposal of any such wires and cabling.
6.5
Broken Glass
. Tenant shall pay on demand the
cost of replacement with identical quality, size and
characteristics of glass broken on the Premises, including glass
windows and doors of the Premises (excluding perimeter windows in
the exterior walls) during the continuance of this Lease, unless
the glass shall be broken by Landlord, its servants, employees or
agents acting on its behalf.
10
ARTICLE 7 - ASSIGNMENT AND
SUBLETTING
7.1
Landlord’s
Consent . Tenant shall
not sell, assign, encumber, mortgage or transfer this Lease or any
interest therein, sublet or permit the occupancy or use by others
of the Premises or any part thereof, or allow any transfer hereof
of any lien upon Tenant’s interest by operation of law or
otherwise (collectively, a “Transfer”) without the
prior written consent of Landlord, which consent shall not be
unreasonably withheld. Without limiting Landlord’s right to
withhold such consent, the withholding of such consent may be based
upon, but not limited to, the following:
(a)
In the reasonable judgment of
Landlord, the subtenant or assignee (A) is of a character or
engaged in a business, or proposes to use the Premises in a manner
which is not in keeping with the standards of Landlord for the
Building, or (B) has an unfavorable reputation or credit
standing;
(b)
Either the area of the Premises to
be sublet or the remaining area of the Premises is not regular in
shape with appropriate means of ingress or egress suitable for
normal renting purposes;
(c)
Tenant is in Default under this
Lease;
(d)
[Intentionally Omitted];
(e)
The proposed sublessee or assignee
is a person or entity with whom Landlord is then negotiating to
lease space in the Building; or
(f)
The proposed assignment or sublease
instrument does not have the substance or form which is reasonably
acceptable to Landlord.
If Landlord consents to such sublet or
assignment, such consent shall be expressly contingent upon
Tenant’s payment to Landlord, as Rent, Landlord’s costs
and expenses incurred in connection therewith, including, but not
limited to, reasonable attorney’s fees and Landlord’s
construction supervision fee, if applicable. Any Transfer which is
not in compliance with the provisions of this Article shall,
at the option of Landlord, be void and of no force or
effect.
7.2
Notice to Landlord
. Tenant shall provide written
notice of the proposed assignee, sublettee or transferee, as
applicable, which notice shall provide Landlord with (i) the
name and address of the proposed subtenant, assignee, pledgee,
mortgagee or transferee, (ii) a reasonably detailed
description of such person or entity’s business,
(iii) detailed financial references for such person or entity,
(iv) a true and complete copy of the proposed sublease,
assignment, pledge, mortgage or other conveyance and all related
documentation, and (v) such other information as Landlord may
reasonably require.
7.3
Landlord’s Right of
Recapture . Tenant
shall, by written notice in the form specified in the following
sentence, advise Landlord of Tenant’s intention on a stated
date (which shall not be less than thirty (30) days after date of
Tenant’s notice) to sublet, assign, mortgage or otherwise
Transfer any part or all of the Premises or its interest therein
for the balance or any part of the Term, and, in such event,
Landlord shall have the right, to be exercised by giving written
notice to Tenant within ten (10) business days after receipt
of Tenant’s notice, to recapture the space described in
Tenant’s notice and such recapture notice shall, if given,
cancel and terminate this Lease with respect to the space therein
described as of the date stated in Tenant’s notice. If
Tenant’s notice shall cover all of the space hereby demised,
and Landlord shall elect to give the aforesaid recapture notice
with respect thereto, then the Term shall expire and end on the
date stated in Tenant’s notice as fully and completely as if
that date had been herein definitely fixed for the expiration of
the Term. If, however, this Lease is terminated pursuant to the
foregoing with respect to less than the entire Premises, the Base
Rent and Additional Rent then in effect shall be adjusted on the
basis of the number of rentable square feet retained by
11
Tenant in proportion to the original Rentable
Area of the Premises, and this Lease as so amended shall continue
thereafter in full force and effect. In such event, Tenant shall
pay the cost of erecting demising walls and public corridors and
making other required modifications to physically separate the
portion of the Premises remaining subject to this Lease from the
rest of the Premises. If Landlord, upon receiving Tenant’s
notice that it intends to sublet or assign any such space, shall
not exercise its right to recapture the space described in
Tenant’s notice, Landlord will, as hereinabove provided,
determine whether to approve Tenant’s request to sublet or
assign the space covered by its notice. Notwithstanding the above,
Landlord’s right of recapture shall not apply to any entity
Tenant desires to sublease to who may be a related or affiliated
entity or entity with whom Tenant does mutual business
activity.
7.4
Excess Rent
. If Tenant individually, or as
debtor or debtor in possession or if a trustee in bankruptcy acting
on behalf of Tenant pursuant to the Bankruptcy Code, 11 U.S.C. 101
et seq., shall sublet or assign the Premises or any part thereof or
assign any interest in this Lease at a rental rate (or additional
consideration) in excess of the then current Monthly Base Rent and
Adjustments per rentable square foot, fifty percent (50%) of said
excess Rent (or additional consideration) shall be and become the
property of Landlord and shall be paid to Landlord as it is
received by Tenant, less Tenant’s reasonable brokerage
(excluding commissions paid to brokers who are Tenant’s
affiliates), legal and other expenses (“Tenant’s
Costs”) incurred in connection with such assignment or, in
the case of a sublease, less the monthly Proportionate Share of
such Tenant’s Costs as determined by dividing such
Tenant’s Costs by the number of months in the term of such
sublease. If Tenant shall sublet the Premises or any part thereof,
Tenant shall be responsible for all actions and neglect of the
subtenant and its officers, partners, employees, agents, guests and
invitees as if such subtenant and such persons were employees of
Tenant. Nothing in this Section shall be construed to relieve
Tenant from the obligation to obtain Landlord’s prior written
consent to any proposed sublease.
7.5
Included Transfers
. If Tenant is a partnership, a
withdrawal or change, whether voluntary, involuntary or by
operation of law or in one or more transactions, of partners owning
a controlling interest in Tenant shall be deemed a voluntary
assignment of this Lease and subject to the provisions of this
Article. If Tenant is a corporation, any dissolution, merger,
consolidation or other reorganization of Tenant, or the sale,
transfer or redemption of a controlling interest of the capital
stock of Tenant in one or more transactions, shall be deemed a
voluntary assignment of this Lease and subject to the provisions of
this Article. However, the preceding sentence shall not apply to
corporations the stock of which is traded through a national or
regional exchange or over-the-counter. Neither this Lease nor any
interest therein nor any estate created thereby shall pass by
operation of law or otherwise to any trustee, custodian or receiver
in bankruptcy of Tenant or any assignee for the assignment of the
benefit of creditors of Tenant.
7.6
No Waiver . The consent by Landlord to any Transfer shall
not be construed as a waiver or release of Tenant from liability
for the performance of all covenants and obligations to be
performed by Tenant under this Lease, and Tenant shall remain
liable therefor, nor shall the collection or acceptance of Rent
from any assignee, subtenant or occupant constitute a waiver or
release of Tenant from any of its obligations or liabilities under
this Lease. Any consent given pursuant to this Article shall
not he construed as relieving Tenant from the obligation of
obtaining Landlord’s prior written consent to any subsequent
assignment or subletting.
7.7
[Intentionally
Omitted]
7.8
Document Review
. All documents utilized by Tenant
to evidence any subletting or assignment for which Landlord’s
consent has been requested, shall be subject to prior approval by
Landlord or its attorney. Tenant shall pay on demand all of
Landlord’s costs and expenses, including reasonable
attorney’s fees, incurred in determining whether or not to
consent to any requested subletting or assignment and for the
review and approval of such documentation.
12
ARTICLE 8 - TRANSFER BY LANDLORD.
In the event of a sale, conveyance,
or assignment by Landlord of Landlord’s interest in the
Building (other than a transfer for security purposes only),
Landlord shall be relieved from and after the date specified in any
such notice of transfer or assignment of all of Landlord’s
obligations and liabilities accruing thereafter on the part of
Landlord, and Tenant agrees to look only toward such assignee or
transferee of Landlord’s interest, provided Landlord has
transferred Tenant’s security deposit (if any).
ARTICLE 9 - USE OF PREMISES
9.1
Use . Except as expressly permitted by prior
written consent of Landlord, the Premises shall not be used other
than for the purposes set forth in Article 1. All use of the
Premises shall comply with the terms of this Lease and all
applicable laws, ordinances, regulations or other governmental
ordinances from time to time in existence.
9.2
Compliance with Rules and
Regulations . Tenant and
employees and all persons visiting or doing business with Tenant in
the Premises shall be bound by and shall observe the reasonable
Rules and Regulations as set forth in
Exhibit D , attached hereto and made a part
hereof, which may, at Landlord’s sole discretion, be
promulgated, amended, or expanded from time to time in a
non-discriminatory manor during the Lease term by Landlord relating
to the Building and/or the Premises of which notice in writing
shall be given to Tenant within thirty (30) days of such clause at
which time they will become effective and all such rules and
regulations as changed from time to time shall be deemed to be
incorporated into and form a part of this Lease. Any default in the
performance or observance of such rules and regulations shall
be a default hereunder and Landlord shall have all remedies
provided for in this Lease in the event of default by Tenant,
Landlord however, shall not be responsible to Tenant for
nonobservance by any other tenant or person of any tenant or person
of any such rules and regulations. Landlord shall enforce such
rules and regulations on a non-discriminatory
basis.
9.3
Hazardous Substance
. The term “Hazardous
Substances,” as used in this lease shall mean pollutants,
contaminates, toxic or hazardous wastes, or any other substances
the use and/or the removal of which is required or the use of which
is restricted, prohibited or penalized by any “Environmental
Law,” which term shall mean any federal, state or local law,
ordinance or other statute of a governmental or quasi-governmental
authority relating to pollution or protection of the environment.
Tenant hereby agrees that (i) no activity will be conducted on
the Premises that will produce any Hazardous Substance, except for
such activities that are part of the ordinary course of
Tenant’s business activities (the “Permitted
Activities”) provided said Permitted Activities are conducted
in accordance with all Environmental Laws and have been approved in
advance in writing by Landlord; Tenant shall be responsible for
obtaining any required permits and paying any fees and providing
any testing required by any governmental agency; (ii) the
Premises will not be used in any manner for the storage of any
Hazardous Substances except for the temporary storage of such
materials that are used in the ordinary course of Tenant’s
business (the “Permitted Materials”) provided such
Permitted Materials are properly stored in a manner and location
meeting all Environmental Laws and approved in advance in writing
by Landlord; Tenant shall be responsible for obtaining any required
permits and paying any fees and providing any testing required by
any governmental agency; (iii) no portion of the Premises will
be used as a landfill or a dump; (iv) Tenant will not install
any underground tanks of any type; (v) Tenant will not allow
any surface or subsurface conditions to exist or come into
existence that constitute, or with the passage of time may
constitute a public or private nuisance; (vi) Tenant will not
permit any Hazardous Substances to be brought into the Premises,
except for the Permitted Materials described below, and if so
brought or found located thereon, the same shall be immediately
removed, with proper disposal, and all required cleanup procedures
shall be diligently undertaken pursuant to all Environmental Laws.
Landlord or Landlord’s representative shall have the right
but not the obligation to enter the Premises for the purpose of
inspecting the storage, use and disposal of Permitted Materials to
ensure compliance with all Environmental Laws. Should it be
determined, in Landlord’s sole opinion, that said Permitted
Materials are being improperly stored, used, or disposed of, then
Tenant shall immediately take such corrective action as requested
by Landlord. Should Tenant fail to take such
13
corrective action within 24 hours. Landlord
shall have the right to perform such work and Tenant shall promptly
reimburse Landlord for any and all costs associated with said work.
If at any time during or after the term of the lease, the Premises
is found to be so contaminated or subject to said conditions that
were introduced by Tenant or its agents, employees or contractors,
Tenant shall diligently institute proper and thorough cleanup
procedures at Tenant’s sole cost, and Tenant agrees to
indemnify and hold Landlord harmless from all claims, demand,
actions, liabilities, costs, expenses, damages and obligations of
any nature arising from or as a result of the use of the Premises
by Tenant. The foregoing indemnification and the responsibilities
of Tenant shall survive the termination or expiration of this
Lease.
Landlord will indemnify, defend and
hold Tenant harmless from and against any claim, cost, damage,
expense (including without limitation reasonable attorneys’
fees and costs of defense but excluding indirect or consequential
damages), loss, liability, or judgment now or hereafter arising as
a result of any claim associated with any required clean-up or
other actions arising from the existence or release of Hazardous
Material on, in or under the Premises released by Landlord or a
person or entity acting under the authority of Landlord, or
otherwise accruing prior to the Commencement Date, to the extent
not otherwise caused or aggravated by the act or neglect of Tenant
or Tenant’s agents, employees or contractors.
ARTICLE 10 - INSURANCE
10.1
Tenant’s
Insurance . Tenant shall,
during the Lease Term, procure at its expense and keep in force the
following insurance:
(a)
Commercial general liability
insurance naming Landlord as an additional insured against any and
all claims for bodily injury and property damage occurring in, or
about the Premises arising out of Tenant’s use and occupancy
of the Premises. Such insurance shall have a combined single limit
of not less than One Million Dollars ($1,000,000) per occurrence
with a Two Million Dollar ($2,000,000) aggregate limit and excess
umbrella liability insurance in the amount of Two Million Dollars
($2,000,000). If Tenant has other locations that it owns or leases
the policy shall include an aggregate limit per location
endorsement. Such liability insurance shall be primary and not
contributing to any insurance available to Landlord and
Landlord’s insurance shall be in excess thereto. In no event
shall the limits of such insurance be considered as limiting the
liability of Tenant under this lease.
(b)
Personal property insurance insuring
all equipment, trade fixtures, inventory, fixtures and personal
property located on or in the Premises for perils covered by the
causes of loss - special form (all risk) and in addition, coverage
for flood, earthquake and boiler and machinery (if applicable).
Such insurance shall be written on a replacement cost basis in an
amount equal to one hundred percent (100%) of the full replacement
value of the aggregate of the foregoing.
(c)
Workers’ compensation
insurance in accordance with statutory law and employers’
liability insurance with a limit of not less than $100,000 per
employee and $500,000 per occurrence.
(d)
Business interruption insurance in
such amounts as will reimburse Tenant for direct or indirect loss
of earnings attributable to all perils commonly insured against by
prudent tenants or attributable to prevention of access to the
Premises or to the Building as a result of such perils.
(e)
If Tenant performs any work on the
Premises, prior to the commencement of any such work, Tenant shall
deliver to Landlord certificates issued by insurance companies
qualified to do business in the State of Colorado, evidencing that
workmen’s compensation and public liability insurance and
property damage insurance, all in the amounts satisfactory to
Landlord, are in force and effect and maintained by all contractors
and subcontractors engaged by Tenant to perform such
work.
(f)
Such other insurance as Landlord
deems necessary and prudent or required by
Landlord’s
14
beneficiaries or mortagagees of any deed of
trust of mortgage encumbering the Premises.
The policies required to be maintained by Tenant
shall be with companies rated AX or better in the most current
issue of Best’s Insurance Reports. Insurers shall be licensed
to do business in the state in which the Premises are located and
domiciled in the USA. Any deductible amounts under any insurance
policies required hereunder shall not exceed $1,000. Certificates
of insurance (certified copies of the policies may be required)
shall be delivered to Landlord prior to the commencement date and
annually thereafter at least thirty (30) days prior to the
expiration date of the old policy. Tenant shall have the right to
provide insurance coverage which it is obligated to carry pursuant
to the terms hereof in a blanket policy, provided such blanket
policy expressly affords coverage to the Premises and to Landlord
as required by this Lease. Each policy of insurance shall provide
notification to Landlord at least thirty (30) days prior to any
cancellation or modification to reduce the insurance
coverage.
10.2
Waiver of Subrogation
. The parties hereto agree that any
and all fire, extended coverage and/or property damage insurance
which is required to be carried by either shall be endorsed with a
subrogation clause, substantially as follows: “This insurance
shall not be invalidated should the insured waive, in writing prior
to a loss, any and all right of recovery against any party for loss
occurring to the property described therein”; and each party
hereto waives all claims for recovery from the other party, its
officers, agents or employees for any loss or damage (whether or
not such loss or damage is caused by negligence of the other
party), and notwithstanding any provisions contained in this Lease
to the contrary to any of its real or personal property insured
under valid and collectible insurance policies to the extent of the
collectible recovery under such insurance.
10.3
Insurance By Landlord
. Landlord shall, during the Lease
Term, procure and keep in force the following insurance, the cost
of which shall be deemed as Additional Rent and payable as an
Operating Expense:
(a)
Property insurance insuring the
building and improvements and rental value insurance for perils
covered by the causes of loss - special form (all risk) and in
addition coverage for flood, earthquake and boiler and machinery
(if applicable). Such coverage (except for flood and earthquake)
shall be written on a replacement cost basis equal to ninety
percent (90%) of the full insurable replacement value of the
foregoing and shall not cover Tenant’s equipment, trade
fixtures, inventory, fixtures or personal property located on or in
the Premises.
(b)
Commercial general liability
insurance against any and all claims for bodily injury and property
damage occurring in or about the Building or the Land. Such
insurance shall have a combined single limit of not less than One
Million Dollars ($1,000,000) per occurrence per location with a Two
Million Dollar ($2,000,000) aggregate limit.
(c)
Such other insurance as Landlord
deems necessary and prudent or required by Landlord’s
beneficiaries or mortgagees of any deed of trust or mortgage
encumbering the Premises.
ARTICLE 11 - OBSERVANCE OF LAW
11.1
Law . Tenant, at Tenant’s sole expense, shall
comply with all laws, rules, orders, ordinances, directions,
regulations and requirements of federal, state, county and
municipal authorities now in force or which may hereafter be in
force, which shall impose any duty upon Landlord or Tenant with
respect to the use, occupation or alteration of the Premises, and
that Tenant shall use all reasonable efforts to fully comply with
the Americans With Disabilities Act (“ADA”) within the
Premises. Landlord shall be responsible for compliance with the ADA
in the common areas of the Building.
Notwithstanding the foregoing,
Landlord shall make all alterations so that the bathrooms
associated
15
with the Premises comply with the ADA. If such
alterations are necessitated by Tenant’s use, occupation or
alteration of the Premises, then Tenant shall pay the reasonable
costs of Landlord’s work within thirty (30) days following
demand therefor. If such alterations are not necessitated by use,
occupation or alteration of the Premises (i.e., are generally
applicable to the Building), then Landlord shall include the
applicable costs as an Operating Expense shared generally among the
tenants of the Building.
11.2
Taxes . Tenant shall fully and timely pay all business
and other taxes, charges, rates, duties, assessments and license
fees levied, rates imposed, charged or assessed against or in
respect of Tenant’s occupancy of the Premises or in respect
of the personal property, trade fixtures, furniture and facilities
of Tenant or the business or income of Tenant on and from the
Premises, if any, as and when the same shall become due, and to
indemnify and hold Landlord harmless from and against
all
