OFFICE LEASE
by and between
AMBER DRIVE II, LLC.
an Delaware limited liability company
(LANDLORD)
and
SOVEREIGN COMPANIES, LLC
a Colorado limited liability company
(TENANT)
<PAGE>
ARTICLE 1
DEMISE........................................................1
1.1
Demise...........................................................1
ARTICLE 2
TERM..........................................................1
2.1
Lease
Term.......................................................1
2.2
Supplemental
Agreement...........................................2
2.3
Landlord's
Work..................................................2
ARTICLE 3
RENT..........................................................2
3.1
Base
Rent........................................................2
3.2
Additional
Rent..................................................3
3.3
Interest on Late
Payments and Late Payment Charge................3
ARTICLE 4 TAXES AND OPERATING
EXPENSE ADJUSTMENT........................3
4.1
Definitions......................................................3
4.2
Payments of
Taxes and Operating Expenses.........................5
4.3
Reimbursement
Survives Termination...............................7
ARTICLE 5 BUILDING
SERVICES.............................................7
5.1
Standard
Services................................................7
5.2
Interruption of
Standard Services................................8
5.3
Services Paid by
Tenant..........................................9
5.4
Above-Standard
Service Requirements..............................9
5.5
Cleaning.........................................................9
5.6
Re-Lamping.......................................................9
5.7
Landlord's
Obligation...........................................10
ARTICLE 6 TENANT
REPAIR................................................10
6.1 Damage by
Tenant................................................10
6.2
Maintenance.....................................................10
6.3
Good
Condition..................................................10
6.4
Surrender.......................................................11
6.5
Broken
Glass....................................................11
ARTICLE 7 ASSIGNMENT
AND SUBLETTING....................................11
7.1
Limitations.....................................................11
7.2
Acceptance of
Performance.......................................12
7.3
Document
Review.................................................12
7.4
Affiliated
Entities.............................................12
7.5
Transfer
Rents..................................................12
ARTICLE 8 TRANSFER
BY LANDLORD AND LIMITED LIABILITY...................13
8.1
Transfer of
Landlord's Interest.................................13
8.2
Limited
Liability of
Landlord...................................13
ARTICLE 9 USE OF
PREMISES..............................................13
9.1
Use.............................................................13
9.2
Compliance with
Rules and Regulations...........................13
<PAGE>
ARTICLE 10
INSURANCE....................................................14
10.1
Tenant's
Insurance..............................................14
10.2
Landlord's
Insurance............................................15
10.3
Subrogation.....................................................15
ARTICLE 11 OBSERVANCE OF
LAW............................................16
11.1
Law and
Covenants...............................................16
11.2
Taxes...........................................................16
ARTICLE 12 WASTE AND
NUISANCE; ENVIRONMENTAL............................16
12.1
Waste and
Nuisance..............................................16
12.2
Environmental
Covenant..........................................17
12.3
Hazardous
Substances............................................17
12.4
Environmental
Laws..............................................17
ARTICLE 13 ENTRY BY
LANDLORD............................................17
ARTICLE 14
INDEMNIFICATION..............................................18
14.1
Indemnification by
Tenant.......................................18
14.2
Indemnification by
Landlord.....................................18
ARTICLE 15
ALTERATIONS..................................................19
15.1
Alterations by
Tenant...........................................19
15.2
Alterations by
Landlord.........................................20
ARTICLE 16 SIGNS AND
ADVERTISING........................................20
ARTICLE 17 SUBORDINATION TO
MORTGAGES AND DEEDS OF TRUST................21
ARTICLE 18 ESTOPPEL
CERTIFICATE/FINANCIAL INFORMATION...................22
18.1
Estoppel
Certificate............................................22
18.2
Financial
Information...........................................22
ARTICLE 19 QUIET
ENJOYMENT..............................................22
ARTICLE 20
FIXTURES.....................................................22
ARTICLE 21 DAMAGE OR
DESTRUCTION........................................23
21.1
Casualty........................................................23
21.2
Casualty Caused by
Tenant.......................................23
<PAGE>
ARTICLE 22
CONDEMNATION.................................................23
22.1
Eminent
Domain..................................................23
22.2
Damages.........................................................24
22.3
Restoration.....................................................24
ARTICLE 23 LOSS AND DAMAGE
AND DELAY....................................24
23.1 Loss and
Damage.................................................24
23.2
Delays..........................................................25
ARTICLE 24 DEFAULT AND
REMEDIES.........................................25
24.1
Default by
Tenant...............................................25
24.2
Remedies of
Landlord............................................26
24.3
Landlord's
Default..............................................28
24.4
Personal Property
Lien..........................................28
ARTICLE 25 HOLDING
OVER.................................................28
ARTICLE 26
NOTICE.......................................................29
26.1
Notice..........................................................29
26.2
Change of
Address...............................................29
ARTICLE 27 SECURITY
DEPOSIT.............................................29
ARTICLE 28 MISCELLANEOUS
PROVISIONS.....................................30
28.1
Captions........................................................30
28.2
Waiver..........................................................30
28.3
Entire
Agreement................................................30
28.4
Severability....................................................30
28.5
Modification....................................................30
28.6
Governing
Law...................................................30
28.7
Successors and
Assigns..........................................30
28.8
Authorization to
Execute........................................31
28.9
Approval of
Documents...........................................31
28.10
Prime
Rate......................................................31
ARTICLE 29 SUBSTITUTION OF
PREMISES.....................................31
ARTICLE 30
RECORDING....................................................31
ARTICLE 31 REAL ESTATE
BROKER...........................................31
ARTICLE 32 RENT
PREPAYMENT..............................................32
ARTICLE 33 OTHER
PROVISIONS.............................................32
33.1
Right of First
Offer............................................32
33.2
Option to
Extend................................................33
33.3
Antenna.........................................................34
33.4
Parking.........................................................35
EXHIBIT A -.FLOOR
PLAN
EXHIBIT B -.LEGAL
DESCRIPTION
EXHIBIT C -.WORK
LETTER
EXHIBIT D -.SUPPLEMENTAL
AGREEMENT
EXHIBIT E -.RULES AND
REGULATIONS
EXHIBIT F -.ANTENNA
LICENSE
EXHIBIT G -.COMPONENTS OF
STANDARD TENANT FINISH
EXHIBIT H-..COMPONENTS OF
SITE, SHELL AND CORE
EXHIBIT I-..JANITORIAL
SPECIFICATIONS
<PAGE>
OFFICE LEASE
THIS
OFFICE LEASE ("Lease") is made this __28th___ day of February,
2005,
by and between AMBER DRIVE II
LLC, a Delaware limited liability company
("Landlord") and SOVEREIGN
COMPANIES, LLC, a Colorado limited liability company
("Tenant").
WITNESSETH
ARTICLE 1
DEMISE
------
1.1
Demise. Landlord does hereby lease to Tenant and Tenant hereby
leases
from Landlord Suite 900
("Premises") consisting of approximately 13,730 rentable
square feet ("Rentable
Area"), such Premises being generally depicted on the
floor plan attached hereto as
Exhibit A and incorporated herein by this
reference, which Premises may
be adjusted as set forth herein. The Premises are
situated in that certain
building known as 390 Interlocken Crescent located at
390 Interlocken Crescent,
Broomfield, Colorado ("Building"), which Building is
situated on that certain real
Property ("Property") legally described in Exhibit
B attached hereto and
incorporated herein by this reference, 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 from time
to time for the non-exclusive
use of the tenants of the Building, all of which
inclusive of the Building are
hereinafter collectively called the "Building
Complex".
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.
ARTICLE 2
TERM
----
2.1 The
term of this Lease and Tenant's obligation to pay rent
shall
commence on the later to
occur of (a) July 1, 2005 or (b) the date upon which
the Tenant Improvements
(defined below) are substantially complete
("Commencement Date") and
shall end at 5:00 p.m. on the last day of the one
hundred twentieth (120th)
month thereafter, unless sooner terminated as herein
provided ("Lease Term").
Notwithstanding the above, if the work to be performed
to the Premises (the "Tenant
Improvements") contemplated by the Space Plan
defined below are not
substantially complete on July 1, 2005, due to Landlord
caused delays or Force
Majeure Delays, then the Commencement Date and Tenant's
obligation to pay rent shall
be extended for a period of time equal to the delay
caused by Landlord and Force
Majeure Delay. For purposes of this Lease, "Force
Majeure Delays" means any
actual delay in the construction of the Tenant
Improvements contemplated by
the Space Plan resulting from events beyond the
reasonable control of
Landlord, including but not limited to, delays caused or
contributed to by
governmental or quasi-governmental entities, lenders, and
acts
of God.
1
<PAGE>
2.2
Supplemental Agreement. Within five (5) days after the commencement
of
the term of this Lease,
Tenant agrees to execute a Supplemental Agreement in the
form attached as Exhibit D
and incorporated herein by this reference, setting
forth the commencement and
termination dates of the term of this Lease in
accordance with Section 2.1
above and such other information as the parties may
agree to as set forth
therein, including the actual Rentable Area of the
Premises, Base Rent and
Tenant's Pro Rata Share as defined herein.
2.3
Landlord's Work. Other than as set forth in the Work Letter
attached
hereto and incorporated
herein as Exhibit C, Landlord shall have no obligation
for the completion or
condition 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 of the Work Letter, subject to any
Punch List Items as defined
in the Work Letter. Landlord shall provide standard
directory and suite signage
as part of the Landlord's Work provided for in the
Final Working
Drawings.
ARTICLE 3
RENT
----
3.1 Base
Rent. Tenant agrees to pay as base annual rent ("Base
Rent")
during the Lease Term in
amounts set forth in the following schedule:
--------------------------------------------------------------------------------
Base Rent per
Square Foot of
Monthly
Annual
Period
Rentable Area
BaseRent
BaseRent
--------------------------------------------------------------------------------
Months 1-12
$13.00
$14,874.17
$178,490.04
--------------------------------------------------------------------------------
Months 13-24
$13.39
$15,320.39
$183,844.68
--------------------------------------------------------------------------------
Months 25-36
$13.79
$15,778.06
$189,336.72
--------------------------------------------------------------------------------
Months 37-48
$14.20
$16,247.17
$194,966.04
--------------------------------------------------------------------------------
Months 49-60
$14.63
$16,739.16
$200,869.92
--------------------------------------------------------------------------------
Months 61-72
$15.07
$17,242.59
$206,911.08
--------------------------------------------------------------------------------
Months 73-84
$15.52
$17,757.47
$213,089.64
--------------------------------------------------------------------------------
Months 85-96
$15.99
$18,295.23
$219,542.76
--------------------------------------------------------------------------------
Months 97-108
$16.47
$18,844.43
$226,133.16
--------------------------------------------------------------------------------
Months 109-120
$16.96
$19,405.07
$232,860.84
--------------------------------------------------------------------------------
Base Rent
which shall be payable in equal monthly installments
without
notice, deduction, set-off or
abatement (except as set forth in Articles 21 and
22 hereof this Lease) to
Landlord at the address for Landlord set forth in
Article 26 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 based on the actual number of days in
such month and the
installments so prorated shall be paid in advance. The
term
"Lease Year" shall mean each
twelve (12) full month period subsequent to the
first Lease Year. If the
Lease Term begins on a date other than the first day of
a month, the first Lease Year
shall commence on the Commencement Date and shall
continue until the last day
of the twelfth (12th) full month thereafter. Base
Rent for any such partial
month shall be prorated for such month and shall be
due and payable on the
Commencement Date. Notwithstanding the above-referenced
rental rates, fifty percent
(50%) of Tenant's Base Rent and Operating Expenses
for the first year of the
Lease Term shall be abated; provided, however, that
Tenant shall commence paying
full Rent on the entire Premises on the first day
of the thirteenth (13th)
month of the Lease Term and should Tenant occupy more
than fifty percent (50%) of
the Premises during the first year of the Lease
Term, then Tenant shall be
responsible for payment of the percentage of
Operating Expenses which is
applicable to the percentage of the Premises
occupied.
2
<PAGE>
3.2
Additional Rent. Any other sums of money or charges to be paid
by
Tenant pursuant to the
provisions of this Lease are designated as "Additional
Rent". A failure to pay
Additional Rent shall be treated in all events as the
failure to pay
rent.
3.3
Interest on Late Payments and Late Payment Charge. Any rent
(whether
Base Rent or Additional Rent)
or other amount due from Tenant to Landlord under
this Lease not paid when due
shall bear interest from the date due until the
date paid at the rate of two
percent (2%) per month ("Default Rate"), but the
payment of such interest
shall not excuse or cure any default by Tenant under
this Lease. Failure to charge
or collect such interest in connection with any
one or more such late
payments shall not constitute a waiver of Landlord's
right
to charge and collect such
interest in connection with any other or similar or
like late
payments.
Notwithstanding the above, in the event any rent or other amounts
owing
hereunder are not paid within
five (5) days after the due date, then Landlord
and Tenant agree that
Landlord will incur additional administrative expenses,
the amount of which will be
difficult if not impossible to determine.
Accordingly, in addition to
such required payment, Tenant shall pay to Landlord
an additional late charge for
any such late payment in the amount of five
percent (5%) of the amount of
such late payment.
ARTICLE 4
TAXES AND OPERATING EXPENSE ADJUSTMENT
--------------------------------------
In
addition to Base Rent, Tenant shall reimburse Landlord for Real
Estate
Taxes and Operating Expenses
(which sum may be adjusted pursuant to Section 4.2)
for the Building Complex as
hereinafter set forth in this Section.
4.1
Definitions. The following terms shall have the following
meanings
with respect to the
provisions of this Lease:
(a) "Tenant's Pro Rata Share" shall mean that fraction,
the
numerator of which is the
Rentable Area of the Premises as determined by
Landlord and the denominator
of which is estimated to be approximately 241,226
rentable square feet being
the total Rentable Area of the Building Complex as
determined by Landlord and is
estimated to be 5.6918% which calculation shall be
determined by Landlord and
included in the Supplemental Agreement. At such time,
if ever, any space is added
to or subtracted from the Premises as herein below
provided, Tenant's Pro Rata
Share shall be adjusted by Landlord accordingly.
Landlord's system for
measurement of rentable area shall be in accordance with
the Standard Method of
Measuring Floor Area in Office Buildings of the Building
Owners and Managers
Association International (ANSI/BOMA Z65.9-1996)
including
question and answer
section.
3
<PAGE>
(b) "Real Estate Taxes" shall include (i) 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,
Property, or Building Complex or any legal or equitable
interest of Landlord therein;
and (ii) 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, including, without
limitation, those 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: (x) 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 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 (y) 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.
(c) "Operating Expenses" shall mean all maintenance and
operating
costs of any kind or nature
with respect to the operation, ownership and
maintenance of the Building
Complex and shall include, but not be limited to,
the cost of building
supplies, window cleaning, costs incurred in connection
with all energy sources for
the Building Complex 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, repair and
decorating of the Building Complex 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, including, without
limitation, insurance carried
pursuant to Section 10.2; labor costs incurred in
the operation and maintenance
of the Building Complex, including wages and other
payments; costs to Landlord
for Worker's Compensation and disability insurance;
payroll taxes and welfare
fringe benefits; professional building management
fees, legal, accounting,
inspection and reasonable consultation fees incurred in
connection with the Building
Complex; any association or similar fees or dues;
costs of complying with
recorded restrictions, covenants and/or easements; any
expense attributable to costs
incurred by Landlord for any capital improvements
or structural repairs to the
Building or Property required by any change in the
laws, ordinances, rules,
regulations or otherwise which were not in effect on
the date Landlord obtained
its building permit to construct the Building
required by any governmental
or quasi-governmental authority having jurisdiction
over the Building which costs
shall be amortized over the useful life of the
capital improvements or
structural repair; and any costs incurred by Landlord in
making capital improvements
or other modifications to the Building or any part
thereof, which costs shall be
amortized over the useful life of such improvement
or modification with interest
on the unamortized amount at the rate of the
greater of twelve percent
(12%) per annum or three percent (3%) above the Prime
Rate (as defined in Section
28.11), in accordance with such reasonable life and
amortization schedules and
shall be determined in accordance with generally
accepted accounting
principles ("GAAP"). Operating Expenses shall expressly
exclude the
following:
4
<PAGE>
(i) Costs of maintenance and repair reimbursed by
insurance
proceeds;
(ii) Alterations or other specific costs attributable
solely
to other tenants' space in
the Building which under the terms of the respective
lease is such tenant's
responsibility;
(iii) Landlord's
income taxes;
(iv) Leasing commissions, advertising and marketing
expenses,
tenant finish for other
tenants of the Building Complex, costs of preparing
leases and other costs of
Landlord related solely to leasing space for other
tenants in the Building
Complex;
(v) Interest on debt or amortization payments on any
mortgages
or deeds of trust, ground
lease rent or other charges or expenses in connection
with the financing or
refinancing of the Building Complex;
(vi) Landlord's costs in enforcing leases for other tenants
in
the Building Complex
including without limitation, all legal fees, costs and
expenses to collect rent
arrearages and recover possession; and
(vii) Any charge for depreciation of the Building.
(d) "Variable Operating Expenses" shall mean those
Operating
Expenses which vary with
occupancy levels or which vary with areas serviced
based upon occupied Rentable
Area or which are paid directly by tenants of the
Building. Landlord may
equitably make adjustments to Operating Expenses to
account for such Variable
Operating Expenses.
(e) If during any year of the term of this Lease, including the
Base
Year or portion thereof, the
Building is less than ninety-five percent (95%)
occupied for periods greater
than one hundred eight (180) consecutive days,
those Operating Expenses
which vary with occupancy levels of the Building shall
be equitably adjusted by
Landlord to reflect the level of Operating Expenses
which reasonably would be
incurred if the Building were ninety-five (95%)
occupied.
4.2
Payments of Taxes and Operating Expenses. It is hereby agreed
that
during each Lease Year of the
Lease Term Tenant shall pay to Landlord Tenant's
Pro Rata Share of the amount
of the Operating Expenses and Real Estate Taxes for
the Building Complex as set
forth above. It is agreed that Tenant shall, during
each calendar year pay to
Landlord an estimate of Tenant's Pro Rata Share of
such Real Estate Taxes and
Operating Expenses as hereinafter set forth.
5
<PAGE>
Beginning on the Commencement
Date, Tenant shall pay to Landlord each month on
the first day of the month an
amount equal to one-twelfth (1/12) of Tenant's Pro
Rata Share of the Real Estate
Taxes and Operating Expenses for the calendar year
in question as reasonably
estimated by Landlord, with an adjustment to be made
between the parties at a
later date as hereinafter provided. If the Commencement
Date is not the first day of
a calendar month, Tenant shall pay a prorated
portion of its Pro Rata Share
of such Real Estate Taxes and Operating Expenses
for such partial month on the
Commencement Date. 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 amount of Tenant's Pro Rata Share
and Tenant shall commence
paying its re-estimated Pro Rata 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 Tenant's Pro Rata Share of the Real
Estate Taxes and Operating
Expenses for the calendar year just completed and the
difference, if any, between
Tenant's actual Pro Rata Share of the Real Estate
Taxes and Operating Expenses
for the calendar year just completed and the
estimated amount of Tenant's
Pro Rata Share of the Real Estate Taxes and
Operating Expenses (which
were 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 Pro Rata Share of
the actual Real Estate Taxes and Operating Expenses
for the period covered by
such statement is higher than the estimated payments
which Tenant previously paid
during the calendar year just completed, Tenant
shall pay to Landlord the
difference within thirty (30) days following receipt
of said statement from
Landlord. To the extent that Tenant's Pro Rata Share of
the actual Real Estate Taxes
and Operating Expenses for the period covered by
the Statements is less than
the estimated payments which Tenant previously paid
during the calendar year just
completed, Landlord shall at its option either
refund said amount to Tenant
within thirty (30) days or credit the difference
against Tenant's estimated
reimbursement for such Real Estate Taxes and
Operating Expenses for the
current year. 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 Pro Rata 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 Pro Rata
Share of the actual Real
Estate Taxes and Operating Expenses for the portion of
the final calendar 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 Pro
Rata Share for such partial
year shall be calculated by proportionately reducing
the Real Estate Taxes and
Operating Expenses to reflect the number of months in
such year during which Tenant
occupied the Premises. Tenant shall pay its Pro
Rata Share within fifteen
(15) days following receipt of notice thereof.
6
<PAGE>
Tenant
shall have the right, but not more than once per annum, at any
time
within one (1) year 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 have a certified public
accountant examine and review
Landlord's books and records during normal
business hours and after
reasonable notice, at Landlord's office relating to the
determination of such Real
Estate Taxes and Operating Expenses. Unless Tenant
objects to the statement
provided by Landlord within sixty (60) days of receipt
of such statement, the
adjustment and statement shall be deemed conclusive.
In the
event of any error in the statement, the amount due the other
shall
be paid or credited, if
applicable, within thirty (30) days of the determination
of the error. In the event
that the error shows an excess payment by Tenant of
five percent (5%) or more of
the total actual Operating Expense liability of
Tenant for such year, then
Landlord shall pay the reasonable costs of such
review within thirty (30)
days of final resolution of any dispute regarding the
error.
4.3
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 of Tenant's Pro Rata Share of
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 Pro
Rata
Share of Real Estate Taxes
and Operating Expenses or any statements as set forth
in this Section 4 shall not
act to relieve Tenant of its liability therefor; and
with respect to any
deficiencies, Tenant agrees to pay same within fifteen
(15)
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
defined in Exhibit E, and
subject to the Rules and Regulations of the Building
as set forth in Exhibit E,
heat and air conditioning for the use and occupancy
of the Premises, passenger
elevator service and freight elevator service,
subject to scheduling by
Landlord. 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, as defined below; (ii) janitorial and
cleaning services, 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
to the Premises (at rates
reasonably set by Landlord) heating and air
conditioning during times
other than regular business hours and such other items
as are not provided for
herein, provided Tenant gives Landlord not less than
twenty-four (24) hours notice
of Tenant's needs for such additional heating or
air conditioning. 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 at any
time or by reason of usage of
the Premises or the Building during other than
regular business hours. For
purposes hereof, Ordinary Office Equipment shall
include current (or
comparable to current) everyday office equipment, both
in
size of the equipment and
number of units utilized within the Premises, for
office tenants in first class
office buildings in Broomfield, Colorado and shall
specifically exclude
computers or other equipment that require special
cooling,
venting or generators for the
operation thereof.
7
<PAGE>
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 Section
5.1 above during any period
if 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, legal
requirements
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 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 Complex. 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.
Notwithstanding the foregoing, Landlord hereby agrees that if there
is an
interruption or
discontinuance of the services which Landlord has agreed
to
provide that renders the
Premises untenantable and such interruption or
discontinuance is within
Landlord's reasonable control and continues for a
period of seven (7) or more
consecutive days after Landlord receives written
notice thereof from Tenant
(each an "Unauthorized Interruption"), Tenant's rent
shall abate provided that
Landlord can recover such rent through Landlord's rent
loss/business interruption
insurance covering the Building and Landlord has not
corrected or remediated the
cause of such Unauthorized Interruption within such
seven (7) day period. Such
abatement shall commence at the end of said seven (7)
day period and continue until
such time as the Premises are rendered tenantable.
In any case, Tenant's rent
shall not abate (or shall partially abate) as
follows: (a) if the
Unauthorized Interruption is the result of any willful
misconduct or negligent acts
on the part of Tenant, its agents, contractors,
employees, express or implied
invitees, or servants, or due to Tenant's default,
rent shall not abate, (b) if
Tenant continues to nonetheless use any part of the
Premises for conducting its
business, rent shall abate only in proportion to the
part rendered untenantable
and not so used, (c) if Landlord's rent loss/business
interruption insurance will
only cover a portion of Tenant's rent, the rent
shall abate only as to the
portion covered by such insurance, and (d) if
Tenant's assignees,
sublessees or other transferees are not entitled to rent
abatement, rent shall not
abate.
8
<PAGE>
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
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 other than Ordinary
Office 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, which
consent
shall not unreasonably be
withheld or delayed, 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 checkmetered electrical circuits to serve all
of
Tenant's equipment, machinery
or appliances which equipment, machinery or
appliances requires
electrical current supplied to the Premises as the same
is
determined by Landlord which
costs of checkmetering shall be payable by Tenant
to Landlord upon demand.
Tenant agrees to reimburse Landlord for the
checkmetered electrical
current utilized by Tenant at the rates charged to
Landlord to purchase
electrical current for the Building, such reimbursement
to
be made 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 (which may be given or withheld in Landlord's
sole discretion), 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.
5.6
Re-Lamping. Landlord shall have the exclusive right to make
any
replacement of Building
standard electric light bulbs, fluorescent tubes and
ballasts in the Building
Complex throughout the Lease Term and any renewal
thereof. Landlord may adopt a
system of relamping and reballasting periodically
on a group basis as may be
required in accordance with good management practice.
9
<PAGE>
5.7
Landlord's Obligation. Subject to the provisions of this Lease
and
provided Tenant is not in
default hereunder, Landlord agrees (as an Operating
Expense) to keep and maintain
the Building Complex and to provide standard
services therefor in a manner
and at levels reasonably consistent with first
class office buildings of
similar age, size and structure in Broomfield,
Colorado.
ARTICLE 6
TENANT REPAIR
-------------
6.1 Damage
by Tenant. If the Building Complex, 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 Improvements (as
hereinafter defined)
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 it or them, then the cost
of the necessary repairs,
replacements or alterations shall be borne by Tenant
who shall pay the same within
thirty (30) days of receipt of an invoice for such
costs 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, including all
fixtures
and improvements installed by
Tenant or at Tenant's request, in good order,
condition and repair and in
secure and lawful condition. If Tenant fails to keep
the Premises in such good
order, condition and repair as required hereunder to
the reasonable satisfaction
of Landlord, Landlord may, after five (5) days
written notice to Tenant,
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
the making of the repairs. If
as a result of any changes in governmental laws,
ordinances, rules or
regulations, the Premises must be altered to lawfully
accommodate the use or
occupancy of Tenant, such alterations shall be made only
with Landlord's prior
consent, and shall be made in accordance with Article 15
hereof and the entire cost
shall be borne by Tenant. In no event shall the
requirement of Landlord's
consent for alterations create any liability of
Landlord to Tenant or any
third party arising from or related to such legal
requirements.
6.3 Good
Condition. Tenant shall leave the Premises at the end of each
day
in a reasonable condition for
the purpose of allowing the performance of
Landlord's cleaning services
hereinafter described.
10
<PAGE>
6.4
Surrender. At termination of this Lease, upon its expiration
or
otherwise, Tenant shall
remove from the Premises all personal property and trade
fixtures of Tenant; repair
any damage caused by such removal; deliver up the
Premises with all
improvements located thereon (except as herein provided)
in
good repair and condition,
reasonable wear and tear excepted, broom clean and
free of all debris; execute
and deliver such conveyance as Landlord may
reasonably deem necessary or
desirable to evidence the same and any other
conveyances pursuant to this
Lease; and continue to insure all of the same; as
otherwise required pursuant
hereto, until this section 6.4 has been complied
with. Tenant shall give
written notice to Landlord at least thirty (30) days
prior to vacating and shall
arrange to meet with Landlord for a joint inspection
of the Premises. In the event
of Tenant's failure to give such notice or arrange
such joint inspection,
Landlord's inspection at or after Tenant's vacating the
Premises shall be
conclusively correct for purposes of determining
Tenant's
responsibility for repairs
and restoration.
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 outside windows and
doors of the perimeter of the Premises (including
perimeter windows in the
exterior walls) during the continuance of this Lease,
unless the glass shall be
broken by Landlord, its servants, or agents acting on
its behalf.
ARTICLE 7
ASSIGNMENT AND SUBLETTING
-------------------------
7.1
Limitations. Except as set forth in Section 7.4 below, Tenant
shall
not assign or in any manner
transfer this Lease or any estate or interest
therein or sublet Premises or
any part thereof, or grant any license, concession
or other right to occupy any
portion of the Premises (each a "Transfer") without
the prior written consent of
Landlord as set forth herein. Landlord shall not
unreasonably withhold or
delay consent to any Transfer provided Tenant requests
such consent in writing at
least thirty (30) days prior to the proposed Transfer
and (i) Tenant is not in
default of this Lease, (ii) the use of the Premises
does not violate the Lease,
including the Rules and Regulations attached hereto
as Exhibit E and incorporated
herein by this reference, (iii) the proposed
sublessee, assignee,
licensee, concessionaire or occupant ("Transferee") has
a
good business reputation,
(iv) Tenant submits the most current audited current
financials (or such other
financial information as is available) for such
Transferee, (v) Tenant
submits the form of assignment, sublease, license or
other transfer document
("Transfer Document") for Landlord?'s prior review and
approval, (vi) such
Transferee is not a tenant in the Building or in a
building
owned by Landlord or an
affiliated entity of Landlord; and (vii) the subletting
or assignment does not change
the rights, obligations or liabilities of the
parties under the Lease, nor
impose any duty upon Landlord not contained in the
Lease. In no event shall
Tenant have any right to Transfer if there exists any
default under this Lease.
Consent by Landlord to one or more Transfers shall not
operate as a waiver of
Landlord's rights under this section. Any Transfer
without Landlord's consent,
where such consent is required hereunder, shall be
deemed void and confer no
rights upon a third party. Notwithstanding any
Transfer, Tenant under this
Lease shall at all times remain fully responsible
and liable for the payment of
the rental herein specified and for compliance
with all other terms and
conditions of this Lease. Without in any way limiting
Landlord's right to refuse to
give consent, Landlord reserves the right in the
event it does give consent to
impose such conditions upon its consent as
Landlord deems necessary,
including but not limited to payment to Landlord of
any and all sums required to
be paid under the terms and conditions of such
Transfer Document including
sums in excess of Base Rent and to the requirement
of additional security which
in Landlord's reasonable business judgment shall
insure the existing state of
Premises and the rentals due under this Lease.
11
<PAGE>
Except as
set forth in Section 7.4 below, neither this Lease nor
any
interest therein shall be
assignable as to the interest of Tenant by operation
of law, without the written
consent of Landlord. A sale by Tenant of all or
substantially all of its
assets or all or substantially all of its stock (if
Tenant is a publicly traded
corporation); a merger of Tenant with another
corporation; or the transfer
of twenty five percent (25%) or more of the stock
of Tenant if Tenant's stock
is not publicly traded; or the transfer of twenty
five percent (25%) or more of
the beneficial ownership interest in Tenant if
Tenant is a partnership or a
limited liability company without the prior written
consent of Landlord, shall
constitute a prohibited assignment hereunder.
7.2
Acceptance of Performance. If this Lease be assigned or if
the
Premises or any part thereof
be sublet or occupied by anybody other than Tenant,
Landlord may, after default
by Tenant, collect the rent from the assignee,
subtenant or occupant and
apply the net amount collected to the rent herein
reserved retaining the
remainder, if any, for the account of Landlord, but no
such assignment, subletting,
occupancy or collection shall be deemed an
acceptance of the assignee,
subtenant or occupant as the tenant hereof, or
constitute a release of
Tenant from further performance by Tenant of the
covenants on the part of
Tenant herein contained.
7.3
Document Review. All Transfer Documents utilized by Tenant to
evidence
any Transfer shall be subject
to prior reasonable approval by Landlord or its
attorney. Unless Tenant
submits to Landlord the subletting and assignment using
Landlord's forms (without
modification), Tenant shall pay on demand all of
Landlord's reasonable costs
and expenses, including reasonable attorney?s' fees,
incurred in review and
approval of such Transfer Documents.
7.4
Affiliated Entities. Provided Tenant is not in default
hereunder,
Tenant may effect a Transfer
to any Affiliated Entity (as defined below) or any
appointed distributor of
Tenant without Landlord's prior consent provided Tenant
delivers to Landlord a copy
of the executed Transfer Document on a Landlord
approved form to Landlord
within ten (10) days of such Transfer, which Transfer
shall be subject to all of
the liabilities and obligations set forth herein and
Tenant shall not be released
of any of its liabilities hereunder. In no event,
however, shall any such
Transfer have any material adverse financial impact on
Tenant's financial status.
Tenant shall, prior to such Transfer, provide written
evidence reasonably
satisfactory to Landlord that there shall be no material
adverse financial impact on
Tenant or Landlord resulting from such Transfer. For
purposes hereof, Affiliated
Entity shall mean an entity which (i) controls, is
controlled by, or is in
common control with Tenant; or (ii) results from the
merger or consolidation with
Tenant or acquires all or substantially all of the
assets or stock of
Tenant.
7.5
Transfer Rents. One-half of any sums or consideration for any
Transfer
received by Tenant from the
Transferee whether in the form of sublease rents or
otherwise which exceed the
total rent payable by Tenant for the Premises and
Transfer Expenses, as defined
below, shall be paid to Landlord within five (5)
days after receipt thereof by
Tenant. For purposes of this Section 7.5, Transfer
Expenses shall mean Tenant's
actual and reasonable costs incurred by Tenant in
conjunction with a Transfer
including, but not limited to, tenant finish costs,
commissions, and legal fees
to the extent paid to third parties not affiliated
with Tenant.]
12
<PAGE>
ARTICLE 8
TRANSFER BY LANDLORD AND LIMITED LIABILITY
------------------------------------------
8.1
Transfer of Landlord's Interest. In the event of a sale,
conveyance,
or assignment by Landlord of
Landlord's interest in the Building Complex (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 for
performance of obligations and liabilities arising after
the date of such transfer;
provided, however, that no successor landlord shall
be responsible for the return
of security deposits unless such successor
actually receives such
deposits.
8.2
Limited Liability of Landlord. Anything contained in this Lease to
the
contrary notwithstanding,
Tenant agrees that Tenant shall look solely to the
estate of Landlord in the
Building Complex for the collection of any judgment
(or other judicial process)
requiring the payment of money by Landlord in the
event of any default or
breach by Landlord with respect to any of the terms and
provisions of this Lease to
be observed or performed by Landlord, subject,
however, to the rights of the
holder of any mortgage covering the Building
Complex, and no other assets
of Landlord, its partners, agents, employees,
officers, or the employees or
officers of any of its partners shall be subject
to levy, execution or other
judicial process for the satisfaction of Tenant's
claim and Landlord shall not
be liable for any such default or breach except to
the extent of Landlord's
estate in the Building Complex.
ARTICLE 9
USE OF PREMISES
---------------
9.1 Use.
Except as expressly permitted by prior written consent
of
Landlord, which may be given
or withheld in its sole reasonable discretion, the
Premises shall not be used
other than for general business office purposes. All
use of the Premises shall
comply with the terms of this Lease and all applicable
laws, ordinances, regulations
or other governmental ordinances, recorded
restrictions, covenants and
easements and association rules and regulations from
time to time in existence,
including, without limitation, obtaining any and all
necessary licenses and
permits.
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 Rules
and Regulations as set forth in Exhibit E attached
hereto and incorporated
herein by this reference which may, at Landlord's
reasonable discretion, be
promulgated, amended, or expanded from time to time
during the Lease term by
Landlord relating to the Building, the Building Complex
and/or the Premises of which
notice in writing shall be given to Tenant 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. Tenant shall further be
responsible for the
compliance with such rules and regulations by Tenant's
employees, agents, patrons
and invitees. 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 agrees to enforce the Rules and Regulations
against Tenant in a manner
reasonably consistent with its enforcement of such
rules and regulations against
other tenants; however, Tenant acknowledges that
certain rules or regulations
may be specific to a tenant or use and that such
rules or regulations may not
be applicable to all tenants and cannot be enforced
uniformly.
13
<PAGE>
ARTICLE 10
INSURANCE
---------
10.1
Tenant's Insurance. Tenant shall, during its occupancy of
the
Premises and during the
entire term hereof, at its sole cost and expense,
obtain, maintain and keep in
full force and effect, and with Tenant, Landlord,
the property manager and
mortgagees of Landlord named as additional insureds
therein as their respective
interests may appear, the following types and kinds
of insurance:
(a) Upon property of every description and kind owned by Tenant
and
located in the Building
Complex or for which Tenant is legally liable or
installed by or on behalf of
Tenant, including, without limitation, furniture,
fittings, installations,
alterations, additions, partitions, fixtures and
anything in the nature of a
leasehold improvement in an amount not less than the
full replacement cost
thereof, with a Minimum Coverage on the Special Causes
of
Loss Form including Sprinkler
Leakage; and in the event that there shall be a
dispute as to the amount
which comprises full replacement cost, the decision of
Landlord or the mortgagees of
Landlord shall be conclusive. In no event shall
the deductible for such
insurance be more than $1,000.00.
(b) Bodily Injury Property Damage and Commercial General
Liability
insurance including personal
liability, contractual liability, non-owned
automotive liability,
tenants' legal liability for the full replacement costs
of
the Premises. Such policies
shall be written on a comprehensive basis with
limits of not less than
$2,000,000.00 with respect to injuries or death of one
or more persons, and not less
than $1,000,000.00 with respect to property damage
and not less than
$1,000,000.00 for any one occurrence, together with not
less
than a $5,000,000 umbrella
policy, and such higher limits for all such insurance
as Landlord or the mortgagees
of Landlord may reasonably require. All policies
shall name Landlord, its
managers and mortgagee as additional insureds. All
policies shall be primary and
noncontributing over any valid and collectible
insurance of any of the
additional insureds.
(c) Any other form or forms of insurance as Landlord or
the
mortgagees of Landlord may
reasonably require from time to time in form, in
amounts and for insurance
risks consistent with then prevalent insurance
industry practices and
policies.
(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.
14
<PAGE>
(e) Workers' Compensation Insurance and Employers'
liability
insurance in amounts
reasonably satisfactory to Landlord or as required by
law.
(f) 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 workers'
compensation and public liability insurance and
property damage insurance,
all with companies in form and in amounts
satisfactory to Landlord, are
in force and effect and maintained by all
contractors and
subcontractors engaged by Tenant to perform such work and
shall
name Landlord, its manager
and mortgagee as additional insureds. Landlord or its
mortgagee may require any
other form or types of insurance of such parties, and
may be added as an additional
insured thereunder if so requested. All policies
shall be primary and
noncontributory over any valid collectible insurance
made
available to any of the
additional insureds.
All
policies shall be taken out with insurers reasonably acceptable
to
Landlord and in form
satisfactory from time to time to Landlord. Tenant
agrees
that certificates of
insurance, or, if required by Landlord or the mortgagees
of
Landlord, certified copies of
each such insurance policies will be delivered to
Landlord as soon as
practicable after the placing of the required insurance,
but
in no event later than ten
(10) days after Tenant takes possession of all or any
part of the Premises. All
policies shall contain an undertaking by the insurers
to notify Landlord and the
mortgagees of Landlord in writing not less than sixty
(60) days prior to any
material change, cancellation or sooner termination
thereof.
Tenant
covenants and agrees that in the event of damage or destruction
to
the leasehold improvements in
the Premises covered by insurance as required to
be taken out by Tenant
herein, and if Landlord or Tenant do not terminate this
Lease pursuant to Section
21.1 herein, Tenant will use the proceeds of such
insurance for the purpose of
repairing or restoring such leasehold improvements.
In the event that Landlord or
Tenant are entitled to terminate the Lease
pursuant to Article 21, then
if the Premises have also been damaged, Tenant
shall pay to Landlord that
amount of its insurance proceeds necessary to repair
the leasehold
improvements.
10.2
Landlord's Insurance. Landlord agrees to carry during the term
hereof
insurance for fire, extended
coverage, vandalism and malicious mischief,
insuring the Building Complex
(excluding foundations, excavations and other
non-insurable items) for the
full insurable value thereof. Landlord may, but
shall not be obligated to,
take out and carry any other form or forms of
insurance as it or the
mortgagees of Landlord may reasonably determine to be
advisable. All costs of such
insurance shall be included as Operating Expenses
and notwithstanding any
contribution by Tenant to the cost of insurance
premiums, as provided in
Article 4, Tenant acknowledges that it has no right to
receive any proceeds from any
such insurance policies carried by Landlord, and
that such insurance will be
for the sole benefit of Landlord, with no coverage
for Tenant for any risk
insured against.
10.3
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, as a result
of damage 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 or which would have been collectible
had the party carried the
insurance required to be maintained hereunder.
15
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ARTICLE 11
OBSERVANCE OF LAW
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11.1
Law
