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OFFICE LEASE AGREEMENT

Office Lease Agreement

OFFICE LEASE AGREEMENT | Document Parties: SAN HOLDINGS INC | CATLIN PROPERTIES, INC You are currently viewing:
This Office Lease Agreement involves

SAN HOLDINGS INC | CATLIN PROPERTIES, INC

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Title: OFFICE LEASE AGREEMENT
Date: 5/12/2005
Industry: Software and Programming     Law Firm: Catlin Properties    

OFFICE LEASE AGREEMENT, Parties: san holdings inc , catlin properties  inc
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Exhibit 10.3

 

CATLIN PROPERTIES, INC.

 

MULTI-TENANT

 

OFFICE LEASE AGREEMENT

 

(CROSSROADS I AT MERIDIAN, 9800 PYRAMID COURT, ENGLEWOOD, COLORADO)

 

(FULL-SERVICE GROSS, COLORADO FORM)

 

with

 

SANZ INC. , a Colorado corporation

 

as “Tenant”

 

 

 


 

BASIC LEASE INFORMATION

 

1.

Lease Date : For identification purposes only, the date of this Lease is 4/12/05 , 2005.

 

2.

Landlord : The parties identified in the signature block for Landlord below.

 

3.

Tenant : SANZ INC., a Colorado corporation

 

4.

Address of Building : 9800 Pyramid Court, Englewood, Colorado, 80112

 

5.

Approximate Rentable Area of the Building : 117,792 square feet

 

6.

Premises : Those certain premises located on the 1 st floor of the Building, and commonly referred to as Suite 130

 

7.

Approximate Rentable Area of Premises : 9,595 rentable square feet

 

8.

Parking Spaces : thirty-eight (38) unreserved surface lot parking spaces and up to four (4) reserved garage parking spaces, available as follows: (a) up to two (2) reserved garage spaces leaseable at the rate of $65.00 per space per month (each, a “Paid Reserved Space”), which rate shall be subject to change from time to time at Landlord’s sole discretion, provided that such rate does not increase more than 5% per annum on a cumulative basis, plus (b) for every Paid Reserved Space leased (up to a maximum of two (2) Paid Reserved Spaces), Tenant shall be entitled to one (1) additional reserved garage parking space free of charge during the period that Tenant continues to pay the fees due for such Paid Reserved Space.

 

9.

Term : The period of time commencing on September 15, 2005 (the “Commencement Date” ), and ending on September 14, 2008 (the “Expiration Date” ).

 

10.

Base Rent :

 

Months following the Commencement Date

Monthly

Base Rent

Annual Base Rent per Square Foot of

Rentable Area

09/15/05 - 09/14/06

$13,992.70

$17.50 (approximately $1.46 per month)

09/15/06 - 09/14/07

$14,392.50

$18.00 ($1.50 per month)

09/15/07 - 09/14/08

$14,792.29

$18.50 (approximately $1.54 per month)

 

11.

Base Year : The calendar year 2005.

 

12.

Tenant’s Share : 8.15%

 

13.

Advance Rent Amount : $13,992.70 (per Section 3.1 below).

 

14.

Security Deposit : $13,992.70 (per Section 4.1 below).

 

15.

Business Hours of the Building : 7:00 a.m. to 6:00 p.m., Monday through Friday, exclusive of generally recognized holidays.

 

16.

Landlord’s Address for Payment of Rent :  

c/o Catlin Properties

3620 Fair Oaks Boulevard, Suite 150

Sacramento, California 95825

Attention: Property Management

 

17.

Landlord’s Address for Notices :  

c/o Catlin Properties

3620 Fair Oaks Boulevard, Suite 150

Sacramento, California 95864

Attn: Property Management

 

with a copy to:

 

c/o Catlin Properties

9780 Mt. Pyramid Court, Suite 210

Englewood, Colorado 80112

Attention: Mike Pepper

Telephone: (303) 925-0500

 


18.

Tenant’s Address for Notices  
prior to the Commencement Date  
(thereafter, the Tenant’s Address  
for Notices shall be the Premises) :  

c/o SANZ, Inc

9800 Mt. Pyramid, Ct., Suite 130

Englewood, CO 80112

Attn: Ed Dunn

Telephone: 303.660.3933 x 208

 

19.

Tenant’s Tax Identification Number or Social Security Number : 84-1064036

 

20.

Broker(s) : CB Richard Ellis

 

21.

Guarantor(s) : [NIA]

 

22.

Exhibits :

Exhibit A:   The Premises

Exhibit B:   [INTENTIONALLY OMITTED]

Exhibit C:   [INTENTIONALLY OMITTED]

Exhibit D:   Building Rules

Exhibit E:   [INTENTIONALLY OMITTED]

 

The Basic Lease Information set forth above is part of the Lease and capitalized terms shall be defined terms in the Lease. In the event of any conflict between any Basic Lease Information and the Lease, the Lease shall control.

 

(THE BALANCE OF THIS PAGE IS INTENTIONALLY BLANK)


 

LEASE

 

THIS LEASE is made as of the Lease Date set forth in the Basic Lease Information, by and between the Landlord identified in the Basic Lease Information (“ Landlord ”), and the Tenant identified in the Basic Lease Information (“ Tenant ”). Landlord and Tenant hereby agree as follows:

 

1.    PREMISES. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, upon the terms and subject to the conditions of this Lease, the office space identified in the Basic Lease Information (the “Premises” ), in the Building identified in the Basic Lease Information (the “Building” ). The approximate configuration and location of the Premises are shown on Exhibit A . The Building, the parking facilities serving the Building (the “Parking Facility” ), and the parcel(s) of land on which the Building and the Parking Facility are situated (the “Land” ) are sometimes collectively referred to in this Lease as the “Property” . Landlord shall have the right to confirm the rentable and usable square footage of the Premises by independent measurement. For such purpose, the measurement of the Premises shall be in accordance with the method for determining “rentable area” and “usable area” under the Building Owners and Managers Association Standard Method for Measuring Floor Area in Office Buildings (ANSI Z65.1-1996). Following such measurement, if the rentable square footage of the Premises differs from that set forth in the Basic Lease Information, Tenant and Landlord shall amend this Lease to revise the monthly Base Rent, Tenant’s Share and to otherwise reflect such revised rentable area of the Premises. If Landlord has not, by the date that is sixty (60) days after the Commencement Date, notified Tenant that an adjustment to the rentable area recited in the Basic Lease Information is required, the parties conclusively agree that the rentable area set forth in the Basic Lease Information is correct.

 

2.    COMMENCEMENT DATE; EXPIRATION DATE; EXISTING SUBLEASE.

 

2.1    Commencement Date . The “Commencement Date” and the “Expiration Date” shall be, respectively, the dates set forth in the Basic Lease Information.

 

2.2    Existing Sublease . Tenant currently occupies the Premises pursuant to that certain Sublease Agreement dated as of March 30, 2004, between Avaya, Inc., a Delaware corporation ( “Avaya” ), as sublandlord, and Tenant, as subtenant (the “Existing Sublease” ), which Sublease Agreement was entered into pursuant to that certain Office Building Lease dated as of March 24, 2000, between Avaya, as tenant, and Landlord, as landlord. Tenant agrees that (i) the Existing Sublease shall, in accordance with its terms, expire as of the day before the Commencement Date of this Lease, and (ii) to Tenant’s knowledge, Avaya is not in default under the Existing Sublease, and Tenant has no defenses or offsets to the payment of rent and performance of its obligations under the Existing Sublease, and (iii) Tenant represents that Tenant is the rightful owner of the entire interest of the “subtenant” under the Existing Sublease, and that no other person or entity has any interest as “subtenant” under the Existing Sublease.

 

3.    RENT.

 

3.1    Base Rent; Advance Rent . Tenant agrees to pay to Landlord the Base Rent set forth in the Basic Lease Information, without prior notice or demand, on the first day of each and every calendar month during the Term, except that the Advance Rent Amount set forth in the Basic Lease Information shall be paid upon execution of this Lease, and Base Rent for any partial month at the beginning of the Term shall be paid on the Commencement Date. Base Rent for any partial month at the beginning or end of the Term shall be prorated based on the actual number of days in the month.

 

3.2    Additional Rent: Increases in Operating Costs and Taxes .

 

(a)    Definitions .

 

(1)    “Base Operating Costs” means Operating Costs for the calendar year specified as the Base Year in the Basic Lease Information.

 


(2)    “Base Taxes” means Taxes for the calendar year specified as the Base Year in the Basic Lease Information.

 

(3)    “Operating Costs” means all costs of managing, operating, maintaining, repairing, renewing and replacing the Property, including, by way of illustration and not limitation, all costs, expenditures, fees and charges for: (A) operation, maintenance, repair and replacement of the Property (including, without limitation, maintenance, repair and replacement of glass, the roof covering or membrane, and landscaping; provided, however, that to the extent that the cost of any such replacements are required to be capitalized for federal income tax purposes, the cost of such replacements, together with interest on the unamortized balance at the rate paid by Landlord on funds borrowed to finance such replacements [or, if Landlord finances such replacements out of Landlord’s funds without borrowing, the rate that Landlord would have paid to borrow such funds, as reasonably determined by Landlord], shall be amortized over such useful life as Landlord shall reasonably determine); (B) utilities (as well as related fees, assessments and surcharges) and services (including telecommunications facilities and equipment, repairs to and replacements of telephone risers or intrabuilding network cabling, recycling programs and trash removal), and associated supplies and materials; (C) a proportionate share of compensation (including employment taxes and market-standard fringe benefits) for persons who perform duties in connection with the management (not to exceed a level of general manager), operation, maintenance and repair of the Building, such compensation to be appropriately allocated for persons who also perform duties unrelated to the Building; (D) property (including coverage for earthquake and flood if carried by Landlord), liability, rental income and other insurance relating to the Property, and expenditures for deductible amounts paid under such insurance; (E) licenses, permits and inspections; (F) complying with the requirements of any law, statute, ordinance or governmental rule or regulation or any orders pursuant thereto (collectively “Laws” ); (G) amortization of capital improvements required to comply with Laws, or which are intended to reduce Operating Costs or improve the utility, efficiency or capacity of any Building System, with interest on the unamortized balance at the rate paid by Landlord on funds borrowed to finance such capital improvements (or, if Landlord finances such improvements out of Landlord’s funds without borrowing, the rate that Landlord would have paid to borrow such funds, as reasonably determined by Landlord), over such useful life as is consistent with industry standards for comparable buildings in the Southeast Denver market area; (H) an office in the Property for the management of the Property, including expenses of furnishing and equipping such office and the rental value of any space occupied for such purposes; (I) property management fees (which may be paid to an affiliate of Landlord and shall not exceed 5% of the aggregate Base rent for the Building and consistent with comparable office buildings in the Southeast Denver market area), or in lieu of such management fees, a reasonable administrative fee to compensate Landlord for managing the Property; (J) accounting, legal and other professional services incurred in connection with the operation (but not the ownership) of the Property and the calculation of Operating Costs and Taxes; (K) a reasonable allowance for depreciation on machinery and equipment used to maintain the Property and on other personal property owned by Landlord in the Property (including window coverings and carpeting in common areas); (L) contesting the validity or applicability of any Laws that may affect the Property; (M) the Property’s share of any shared or common area maintenance fees and expenses; and (N) any other expense or charge, whether or not hereinbefore described, which in accordance with generally accepted property management practices would be considered an expense of managing, operating, maintaining, repairing and replacing the Property. Operating Costs for any year during which average occupancy of the Building is less than one hundred percent (100%) shall be calculated based upon the Operating Costs that would have been incurred if the Building had an average occupancy of one hundred percent (100%) during the entire calendar year. If Landlord is not furnishing any particular work or service (the cost of which, if performed or provided by Landlord, would be included in Operating Costs) to a tenant who has undertaken to perform such work or service in lieu of the performance thereof by Landlord, Operating Costs shall, at Landlord’s sole discretion, be deemed to be increased by an amount equal to the additional Operating Costs which would reasonably have been incurred during such period by Landlord if it had at its own expense furnished such work or service to such tenant. The above enumeration of services and facilities shall not be deemed to impose an obligation on Landlord to make available or provide such services or facilities except to the extent if any that Landlord has specifically agreed elsewhere in this Lease to make the same available or provide the same. Without limiting the generality of the foregoing, Tenant acknowledges and agrees that it shall be responsible for providing adequate security for its use of the Premises, the Building and the Property and that Landlord shall have no obligation or liability with respect thereto, except to the extent, if any, that Landlord has specifically agreed elsewhere in this Lease to provide the same.

 

Operating Costs shall not include (i) capital improvements (except as otherwise provided above); (ii) costs of special services rendered to individual tenants (including Tenant) for which a special charge is made; (iii) interest and principal payments on Loans or indebtedness secured by the Building; (iv) costs of leasehold improvements for Tenant or other tenants of the Building; (v) costs of services or other benefits of a type which are not available to Tenant but which are available to other tenants or occupants, and costs for which Landlord is reimbursed by other tenants of the Building other than through payment of tenants’ shares of increases in Operating Costs and Taxes; (vi) leasing commissions, attorneys’ fees and other expenses incurred in connection with leasing space in the Building or enforcing such leases; (vii) depreciation or amortization, other than as specifically enumerated in the definition of Operating Costs above; (viii) costs, fines or penalties incurred due to Landlord’s violation of any Law; (ix) advertising and promotional expenses; (x) nonrecurring costs incurred to remedy structural defects in the original construction of the Building; and (xi) repairs or other work needed due to fire, windstorms, or other casualty or cause actually insured against by Landlord or to the extent Landlord’s insurance required under Section 11.2 - Landlord’s Insurance would have provided coverage, whichever is greater.

 


(4)    “Taxes” means all real property taxes and general, special or district assessments or other governmental impositions, of whatever kind, nature or origin, imposed on or by reason of the ownership or use of the Property; governmental charges, fees or assessments for transit or traffic mitigation (including area-wide traffic improvement assessments and transportation system management fees), housing, police, fire or other governmental service or purported benefits to the Property; personal property taxes assessed on the personal property of Landlord used in the operation of the Property; service payments in lieu of taxes and taxes and assessments of every kind and nature whatsoever levied or assessed in addition to, in lieu of or in substitution for existing or additional real or personal property taxes on the Property or the personal property described above; any increases in the foregoing caused by changes in assessed valuation, tax rate or other factors or circumstances; and the reasonable cost of contesting by appropriate proceedings the amount or validity of any taxes, assessments or charges described above. To the extent paid by other tenants or required to be paid by Tenant as “Tenant’s Taxes” (as defined in Section 8 - Tenant’s Taxes), “Tenant’s Taxes” shall be excluded from Taxes, and accordingly shall not be included in Taxes accrued in the Base Year.

 

(5)    “Tenant’s Share” means the Rentable Area of the Premises divided by the total Rentable Area of the Building, as set forth in the Basic Lease Information. If the Rentable Area of the Building is changed or the Rentable Area of the Premises is changed by Tenant’s leasing of additional space hereunder, Tenant’s Share shall be adjusted accordingly.

 

(b)    Additional Rent .

 

(1)    Tenant shall pay Landlord as “Additional Rent” for each calendar year or portion thereof during the Term Tenant’s Share of sum of (x) the amount (if any) by which Operating Costs for the period exceed Base Operating Costs, and (y) the amount (if any) by which Taxes for such period exceed Base Taxes. It is the intention of Landlord and Tenant that the Base Rent paid to Landlord be absolutely net of all increases in Operating Costs and Taxes over, respectively, the Base Operating Costs and Base Taxes, and the provisions of this Section 3.2 are intended to so provide. Tenant agrees that any Taxes or Operating Costs that accrue or are incurred during the Term of this Lease may be included in the calculation of Additional Rent, notwithstanding that such Taxes or Operating Costs may be payable by Landlord in arrears.

 

(2)    Prior to the end of the Base Year and each calendar year thereafter, Landlord shall notify Tenant of Landlord’s estimate of Operating Costs and Taxes and Tenant’s Additional Rent for the following calendar year. Commencing on the first day of January of each calendar year and continuing on the first day of every month thereafter in such year, Tenant shall pay to Landlord one-twelfth (1/12th) of the estimated Additional Rent. If Landlord thereafter estimates that Operating Costs and Taxes for such year will vary from Landlord’s prior estimate, Landlord may, by notice to Tenant, revise the estimate for each year (and Additional Rent shall thereafter be payable based on the revised estimate).

 

(3)    As soon as reasonably practicable after the end of the Base Year and each calendar year thereafter, Landlord shall furnish Tenant a statement (the “ Statement ”) with respect to such year, showing Operating Costs and Taxes and Additional Rent for the year, and the total payments made by Tenant with respect thereto. Unless Tenant raises any objections to the Statement within ninety (90) days after receipt of the same, such Statement shall conclusively be deemed correct and Tenant shall have no right thereafter to dispute such Statement or any item therein or the computation of Additional Rent based thereon. If Tenant disputes the amount of Additional Rent stated in the Statement, Tenant may, at Tenant’s own cost and expense, designate, within ninety (90) days after receipt of that Statement, an independent certified public accountant to inspect Landlord’s records. Tenant is not entitled to request that inspection, however, if Tenant is then in default under this Lease. The accountant must be a member of a nationally recognized accounting firm and must not charge a fee based on the amount of Additional Rent that the accountant is able to save Tenant by the inspection. Tenant must give reasonable notice to Landlord of the request for inspection, and the inspection must be conducted in Landlord’s offices at a reasonable time or times. If, after that inspection, Tenant still disputes the Additional Rent, a certification of the proper amount shall be made, at Tenant’s expense, by Landlord’s independent certified public accountant. That certification shall be final and conclusive. Any objection of Tenant to the Statement and resolution of any dispute shall not postpone the time for payment of any amounts due Tenant or Landlord based on the Statement, nor shall any failure of Landlord to deliver the Statement in a timely manner relieve Tenant of Tenant’s obligation to pay any amounts due Landlord based on the Statement.

 


 

(4)    If Tenant’s Additional Rent as finally determined for the year exceeds the total payments made by Tenant on account thereof, Tenant shall pay Landlord the deficiency within ten (10) days of Tenant’s receipt of Landlord’s statement. If the total payments made by Tenant on account thereof exceed Tenant’s Additional Rent as finally determined for the year, Tenant’s excess payment shall be credited toward the rent next due from Tenant under this Lease, unless such excess is more than Two Thousand and No/100ths Dollars ($2,000.00) and Tenant is not then in default under this Lease, in which event such excess shall be refunded to Tenant. For any partial calendar year at the beginning or end of the Term, Additional Rent shall be prorated on the basis of a 365-day year by computing Tenant’s Share of increases in the Operating Costs and Taxes for the entire year and then prorating such amount for the number of days during such year included in the Term. Notwithstanding the termination of this Lease, Landlord shall pay to Tenant or Tenant shall pay to Landlord, as the case may be, within ten (10) days after Tenant’s receipt of Landlord’s final statement for the calendar year in which this Lease terminates, the difference between Tenant’s Additional Rent for that year, as finally determined by Landlord, and the total amount previously paid by Tenant on account thereof.

 

(c)    Despite any other provision of this Section 3 to the contrary, in calculating Base Taxes, there shall be excluded from Taxes any increase in Taxes attributable to (i) special assessments, charges, costs, or fees; or (ii) modifications or changes in government laws or regulations, including institution of a split tax roll; and in calculating Base Operating Costs, there shall be excluded from Operating Costs (i) market-wide labor-rate increases arising from extraordinary circumstances (such as boycotts and strikes) and (ii) utility rate increases arising from extraordinary circumstances (such as conservation surcharges, boycotts, embargoes, or other shortages), and, (iii) any other costs of a nature that would not ordinarily be incurred on an annual, recurring basis. If for any reason Base Taxes or Taxes for any year during the Term are reduced, refunded or otherwise changed, Tenant’s Additional Rent shall be adjusted accordingly. If Taxes are temporarily reduced as a result of space in the Building being leased to a tenant that is entitled to an exemption from property taxes or other taxes, then for purposes of determining Additional Rent for each year in which Taxes are reduced by any such exemption, Taxes for such year shall be calculated on the basis of the amount the Taxes for the year would have been in the absence of the exemption. Notwithstanding anything to the contrary in this Lease, if there is at any time a decrease in Taxes below the amount of the Taxes for the Base Year, then for purposes of calculating Additional Rent for the year in which such increase occurs and all subsequent periods, Base Taxes shall be reduced to equal the Taxes for the year in which the decrease occurs.

 

3.3    Payment of Rent . All amounts payable or reimbursable by Tenant under this Lease, including late charges and interest, shall constitute rent and shall be payable and recoverable as rent in the manner provided in this Lease. Unless otherwise specified in this Lease, all sums payable to Landlord on demand under the terms of this Lease shall be payable within ten (10) days after notice from Landlord of the amounts due. All rent shall be paid without offset, recoupment or deduction, in lawful money of the United States of America to Landlord at Landlord’s Address for Payment of Rent as set forth in the Basic Lease Information, or to such other person or at such other place as Landlord may from time to time designate. All payments received by Landlord from Tenant shall be applied to the oldest payment obligation owed by Tenant to Landlord. No designation by Tenant, either in a separate writing or on a check or money order, shall modify this clause or have any force or effect. If any non-cash payment made by Tenant is not paid by the bank or other institution on which it is drawn, Landlord shall have the right, exercised by notice to Tenant, to require that Tenant make all future payments by certified funds or cashier’s check.

 

4.    SECURITY DEPOSIT; LANDLORD’S LIEN.

 

4.1    Security Deposit . On execution of this Lease, Tenant shall deposit with Landlord the sum set forth in the Basic Lease Information (the “Security Deposit” ), in cash, as security for the performance of Tenant’s obligations under this Lease. Landlord may (but shall have no obligation to) use the Security Deposit or any portion thereof to cure any Event of Default under this Lease or to compensate Landlord for any damage Landlord incurs as a result of Tenant’s failure to perform any of Tenant’s obligations hereunder. In such event Tenant shall immediately pay to Landlord an amount sufficient to replenish the Security Deposit to the sum initially deposited with Landlord. If Tenant is not in default at the expiration or termination of this Lease, Landlord shall return to Tenant the Security Deposit or the balance thereof then held by Landlord and not applied as provided above. Landlord may commingle the Security Deposit with Landlord’s general and other funds, and Landlord shall not be required to pay interest on the Security Deposit. Tenant shall not assign or encumber the Security Deposit without the consent of Landlord; any attempt to do so shall be void and not binding on Landlord. If Landlord disposes of its interest in the Premises, Landlord shall deliver or credit the Security Deposit to Landlord’s successor in interest and thereupon be relieved of all further responsibility with respect to the Security Deposit. Tenant waives all provisions of law now in force or that become in force after the date of execution of this Lease, that provide that Landlord may claim from a security deposit only those sums reasonably necessary to remedy defaults in the payment of rent, to repair damage caused by Tenant, or to clean the Premises.

 


4.2    Landlord’s Lien . [INTENTIONALLY OMITTED]

 

5.    USE AND COMPLIANCE WITH LAWS.

 

5.1    Use; Permitted Encumbrances; Suitability of Premises .

 

(a)    Use . The Premises shall be used for general business office purposes and for no other use or purpose. Tenant shall comply with all present and future Laws relating to Tenant’s use or occupancy of the Premises. Tenant shall make any repairs, alterations or improvements as required to comply with all such Laws to the extent that such Laws relate to or are triggered by (i) Tenant’s particular use of the Premises, (ii) the Tenant Improvements, or (iii) any Alterations. Tenant shall observe the “Building Rules” (as defined in Section 27 - Rules and Regulations). Tenant shall not do, bring, keep or sell anything in or about the Premises that is prohibited by, or that will cause a cancellation of or an increase in the existing premium for, any insurance policy covering the Property or any part thereof. Tenant shall not permit the Premises to be occupied or used in any manner that will constitute waste or a nuisance, or disturb the quiet enjoyment of or otherwise annoy other tenants in the Building. Without limiting the foregoing, the Premises shall not be used for educational activities (client and employee training excepted), practice of medicine or any of the healing arts, providing social services, or for any governmental use (including embassy or consulate use). Tenant shall not, without the prior consent of Landlord, (i) bring into the Building or the Premises anything that may cause substantial noise, odor or vibration, overload the floors in the Premises or the Building or any of the heating, ventilating and air-conditioning (the “HVAC” ), mechanical, elevator, plumbing, electrical, fire protection, life safety, security or other systems in the Building (the “Building Systems” ), or jeopardize the structural integrity of the Building or any part thereof; (ii) connect to the utility systems of the Building any apparatus, machinery or other equipment other than typical office equipment; or (iii) connect (directly, or indirectly through use of intermediate devices, electrified strip molding, or otherwise) to any electrical circuit in the Premises any equipment or other load with aggregate connected load requirements in excess of 20 amps.

 

(b)    Permitted Encumbrances . Tenant acknowledges that this Lease is subordinate and subject to all liens, encumbrances, deeds of trust, reservations, restrictions and other matters affecting the Property or the Premises ( “Permitted Encumbrances” ), and any law, regulation, rule, order or ordinance of any governmental entity applicable to the Premises or the use or occupancy thereof, in effect on the execution of this Lease or thereafter promulgated.

 

(c)    Condition and Suitability of Premises . Tenant acknowledges and agrees that Landlord is not obligated to perform any improvement work in the Premises or otherwise prepare the Premises for Tenant’s occupancy. Tenant acknowledges and agrees that it has had an opportunity to inspect the Premises, the Building and the Property, and finds the same in satisfactory condition and repair. Tenant accepts the Premises, the Building and the Project in their “then as is” condition as of the date hereof. The taking of possession of the Premises by Tenant on the Commencement Date shall conclusively establish that the Premises, the Building and the Property were acceptable to Tenant and in satisfactory condition and repair. Tenant acknowledges that neither Landlord nor any of Landlord’s representatives has made any representation or warranty with respect to the Premises, the common area or the Property or with respect to the suitability or fitness of the same for the conduct of Tenant’s business or for any other purpose. The taking of possession of the Premises by Tenant shall conclusively establish that the Premises and the Property were in satisfactory condition to conduct business at such time.

 

5.2    Hazardous Materials .

 

(a)    Use of Hazardous Materials . Tenant shall not cause or permit any Hazardous Materials, as defined below, to be generated, brought onto, used, stored, or disposed of in or about the Premises or the Property by Tenant or its agents, employees, contractors, subtenants, assignees, licensees, transferees or representatives (collectively, “Representatives” ) or its guests, customers, or visitors (collectively, “Visitors” ) except for reasonable quantities of substances that are normally associated with general office duties (such as copier fluids and cleaning supplies) or which are otherwise approved by Landlord. Tenant shall use, store, and dispose of all such Hazardous Materials in strict compliance with all Environmental Requirements (as defined below), and shall comply at all times during the Lease Term with all Environmental Requirements.

 

(b)    Definitions . “Hazardous Materials” shall mean any substance: (A) that now or in the future is regulated or governed by, requires investigation or remediation under, or is defined as a hazardous waste, hazardous substance, pollutant or contaminant under any governmental statute, code, ordinance, regulation, rule or order, and any amendment thereto, including for example only the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. § 9601 et seq., and the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., or (B) that is toxic, explosive, corrosive, flammable, radioactive, carcinogenic, dangerous or otherwise hazardous, including gasoline, diesel fuel, petroleum hydrocarbons, polychlorinated biphenyls ( “PCBs” ), asbestos, radon and urea formaldehyde foam insulation. “Environmental Requirements” shall mean all present and future Laws, orders, permits, licenses, approvals, authorizations and other requirements of any kind applicable to Hazardous Materials.

 


6.    ALTERATIONS .

 

6.1    Tenant shall not make any alterations, improvements or changes to the Premises (including installation of any security system or telephone or data communication wiring or cabling), other than the Tenant Improvements (the “Alterations” ), without Landlord’s prior written consent. Landlord may withhold its consent to such Alterations in its sole discretion if the proposed Alterations would adversely affect the structure or safety of the Building or its electrical, plumbing, HVAC, mechanical or safety systems, or if such proposed Alterations would create an obligation on Landlord’s part to make modifications to the Property (in order, for example, to comply with laws such as the ADA mandating Building accessibility for persons with disabilities); in all other circumstances, Landlord agrees not to unreasonably withhold or delay its consent to proposed Alterations. Any such Alterations shall be completed by Tenant at Tenant’s sole cost and expense: (i) with due diligence, in a good and workmanlike manner, using new materials; (ii) in compliance with plans and specifications approved by Landlord; (iii) in compliance with the construction rules and regulations promulgated by Landlord from time to time; (iv) in accordance with all applicable Laws (including all work, whether structural or non-structural, inside or outside the Premises, required to comply fully with all applicable Laws and necessitated by Tenant’s work); and (v) subject to all conditions which Landlord may in Landlord’s discretion impose. Such conditions may include requirements for Tenant to: (i) provide payment or performance bonds or additional insurance (from Tenant or Tenant’s contractors, subcontractors or design professionals); (ii) use contractors or subcontractors designated by Landlord; and (iii) remove all or part of the Alterations prior to or upon expiration or termination of the Term, provided that, at the time Landlord approves such Alterations, Landlord specifically conditions such approval on Tenant’s agreement to remove such Alterations. If any work outside the Premises, or any work on or adjustment to any of the Building Systems, is required in connection with or as a result of Tenant’s work, such work shall be performed at Tenant’s expense by contractors designated by Landlord. Landlord’s right to review and approve (or withhold approval of) Tenant’s plans, drawings, specifications, contractor(s) and other aspects of construction work proposed by Tenant is intended solely to protect Landlord, the Property and Landlord’s interests. No approval or consent by Landlord shall be deemed or construed to be a representation or warranty by Landlord as to the adequacy, sufficiency, fitness or suitability thereof or compliance thereof with applicable Laws or other requirements. Except as otherwise provided in Landlord’s consent, all Alterations shall upon installation become part of the realty and be the property of Landlord.

 

6.2    Before making any Alterations, Tenant shall submit to Landlord for Landlord’s prior approval reasonably detailed final plans and specifications prepared by a licensed architect or engineer, a copy of the construction contract, including the name of the contractor and all subcontractors proposed by Tenant to make the Alterations and a copy of the contractor’s license. Tenant shall reimburse Landlord upon demand for any expenses reasonably incurred by Landlord in connection with any Alterations made by Tenant, including reasonable fees charged by Landlord’s contractors or consultants to review plans and specifications prepared by Tenant and to update the existing as-built plans and specifications of the Building to reflect the Alterations. Tenant shall obtain all applicable permits, authorizations and governmental approvals and deliver copies of the same to Landlord before commencement of any Alterations.

 

6.3    Tenant shall keep the Premises and the Property free and clear of all liens arising out of any work performed, materials furnished or obligations incurred by Tenant. If any such lien attaches to the Premises or the Property, and Tenant does not cause the same to be released by payment, bonding or otherwise within ten (10) days after the attachment thereof, Landlord shall have the right but not the obligation to cause the same to be released, and any sums expended by Landlord in connection therewith shall be payable by Tenant on demand with interest thereon from the date of expenditure by Landlord at the Interest Rate (as defined in Section 16.2 - Interest). Tenant shall give Landlord at least ten (10) days’ notice prior to the commencement of any Alterations and cooperate with Landlord in posting and maintaining notices of non-responsibility in connection therewith.

 

6.4    Subject to the provisions of Section 5 - Use and Compliance with Laws and the foregoing provisions of this Section, Tenant may install and maintain furnishings, equipment, movable partitions, business equipment and other trade fixtures (the “Trade Fixtures” ) in the Premises, provided that the Trade Fixtures do not become an integral part of the Premises or the Building. Tenant shall promptly repair any damage to the Premises or the Building caused by any installation or removal of such Trade Fixtures.

 


7.    MAINTENANCE AND REPAIRS.

 

7.1    By remaining in possession of the Premises as of the Commencement Date, Tenant agrees that the Premises are then in a good and tenantable condition. Tenant further agrees that the HVAC system serving the Premises is in good working order as of the date of this Lease. During the Term, Tenant at Tenant’s expense but under the direction of Landlord, shall repair and maintain the Premises, including the interior walls, floor coverings, ceiling (ceiling tiles and grid), Tenant Improvements, Alterations, fire extinguishers, outlets and fixtures, and any appliances (including dishwashers, hot water heaters, garbage disposers and any Dedicated HVAC Unit, as defined in Section 9 below) in the Premises, in a first class condition, and keep the Premises in a clean, safe and orderly condition.

 

7.2    Landlord shall maintain or cause to be maintained in reasonably good order, condition and repair, the structural portions of the roof, foundations, floors and exterior walls of the Building, the Building Systems, and the public and common areas of the Property, such as elevators, stairs, corridors and restrooms; provided, however, that Tenant shall pay, within fifteen (15) days after receipt of a written invoice from Landlord, the cost of repairs (plus an administrative fee of fifteen percent (15%): (i) for damage occasioned by Tenant’s use of the Premises or the Property or any act or omission of Tenant or Tenant’s Representatives or Visitors or (ii) which are beyond the scope of Landlord’s express maintenance and repair obligations under this Lease. Landlord shall be under no obligation to inspect the Premises. Tenant shall promptly report in writing to Landlord any defective condition known to Tenant which Landlord is required to repair.

 

7.3    Landlord hereby reserves the right, at any time and from time to time, without liability to Tenant, and without constituting an eviction, constructive or otherwise, or entitling Tenant to any abatement of rent or to terminate this Lease or otherwise releasing Tenant from any of Tenant’s obligations under this Lease:

 

(a)    To make alterations, additions, repairs, improvements to or in or to decrease the size of area of, all or any part of the Building (excluding the Premises), the fixtures and equipment therein, and the Building Systems;

 

(b)    To change the Building’s name or street address;

 

(c)    To install and maintain any and all signs on the exterior and interior of the Building;

 

(d)    To reduce, increase, enclose or otherwise change at any time and from time to time the size, number, location, lay-out and nature of the common areas and other tenancies and premises in the Property and to create additional rentable areas through use or enclosure of common areas;

 

(e)    To institute any mandatory programs (such as trash recycling) for the Building that Landlord believes, in its sole judgment, will be in the best interests of the Building and its tenants; and

 

(f)    If any governmental authority promulgates or revises any Law or imposes mandatory or voluntary controls or guidelines on Landlord or the Property relating to the use or conservation of energy or utilities or the reduction of automobile or other emissions or reduction or management of traffic or parking on the Property (collectively “Controls” ), to comply with such Controls, whether mandatory or voluntary, or make any alterations to the Property related thereto.

 

8.    TENANT’S TAXES. “Tenant’s Taxes” shall mean (a) all taxes, assessments, license fees and other governmental charges or impositions levied or assessed against or with respect to Tenant’s personal property or Trade Fixtures in the Premises, whether any such imposition is levied directly against Tenant or levied against Landlord or the Property, (b) all rental, excise, sales or transaction privilege taxes arising out of this Lease (excluding, however, state and federal personal or corporate income taxes measured by the income of Landlord from all sources) imposed by any taxing authority upon Landlord or upon Landlord’s receipt of any rent payable by Tenant pursuant to the terms of this Lease (the “Rental Tax” ), and (c) any Taxes attributable to the value or cost of Tenant’s (i) personal property, (ii) Trade Fixtures, and/or (iii) Tenant Improvements or other Alterations (to the extent that the cost or value of such Tenant Improvements or other Alterations made in or to the Premises or the Building by or for Tenant exceeds the cost or value of a building-standard build-out, as determined by Landlord, but regardless of whether title to those improvements is vested in Tenant or Landlord). Tenant shall pay any Rental Tax to Landlord in addition to and at the same time as Base Rent is payable under this Lease, and shall pay all other Tenant’s Taxes before delinquency (and, at Landlord’s request, shall furnish Landlord satisfactory evidence thereof). If Landlord pays Tenant’s Taxes or any portion thereof, Tenant shall reimburse Landlord upon demand for the amount of such payment, together with interest at the Interest Rate from the date of Landlord’s payment to the date of Tenant’s reimbursement.

 


9.    UTILITIES AND SERVICES.

 

9.1    Description of Services . Subject to the Controls (as defined in Section 7.3(f) above), Landlord shall furnish to the Premises reasonable amounts of electricity, water, heat and air-conditioning, and janitorial service. Landlord shall also furnish normal fluorescent tube replacement, window washing, elevator service, and common area toilet room supplies. Landlord shall furnish heat, ventilation and air-conditioning during the Business Hours specified in the Basic Lease Information ( “Business Hours” ). As used in this Lease, the term “Business Days” means weekdays except generally recognized holidays. Any additional utilities or services that Landlord may agree to provide (including lamp or tube replacement for other than building standard lighting fixtures) shall be at Tenant’s sole expense.

 

9.2    Payment for Additional Utilities and Services .

 

(a)    Upon request by Tenant in accordance with the procedures established by Landlord from time to time for furnishing HVAC service at times other than Business Hours on Business Days, Landlord shall furnish such service to Tenant and Tenant shall pay for such services on an hourly basis at the then prevailing rate established for the Building by Landlord. If such extended service is not a continuation of that furnished during regular Business Hours as described above, Landlord may require that Tenant pay for a minimum of three (3) hours of such service.

 

(b)    If the temperature otherwise maintained in any portion of the Premises by the HVAC systems of the Building is affected as a result of (i) any lights, machines or equipment used by Tenant in the Premises, or (ii) the occupancy of the Premises by more than one person per 150 square feet of rentable area, then Landlord shall have the right to install any machinery or equipment reasonably necessary to restore the temperature, including modifications to the standard air-conditioning equipment. The cost of any such equipment and modifications, including the cost of installation and any additional cost of operation and maintenance of the same, shall be paid by Tenant to Landlord upon demand.

 

(c)    If Tenant’s usage of electricity exceeds the Building’s standard electrical usage, Landlord may determine the amount of such excess use by any reasonable means (including the installation by Landlord but at Tenant’s expense of a separate meter or other measuring device) and charge Tenant for the cost of such excess usage. In addition, Landlord may impose a reasonable charge for the use of any additional or unusual janitorial services required by Tenant because of any unusual Tenant Improvements or Alterations, the carelessness of Tenant or the nature of Tenant’s business (including hours of operation).

 

(d)    If there is any HVAC or other cooling system located in the Premises that is dedicated to Tenant’s computers or other equipment (such dedicated system is referred to in this Lease as a “Dedicated HVAC Unit” ), Landlord may determine the amount of gas, electricity or other utility costs attributable to such Dedicated HVAC Unit by any reasonable means (including the installation by Landlord but at Tenant’s expense of a separate meter or other measuring device) and charge Tenant for such costs.

 

(e)    Tenant acknowledges that Landlord’s obligations pursuant to Section 9.1 to provide janitorial services to the Premises excludes any portions of the Premises not used as office areas (e.g., closets, storage rooms, mailrooms, computer areas, laboratories, and areas used for the storage, preparation, service, or consumption of food or beverages). Tenant, at its sole cost and expense, shall cause all portions of the Premises not used as office areas to be cleaned on a regular basis in a manner and by a person or entity satisfactory to Landlord. Tenant shall contract directly with Landlord or, at Landlord’s option, directly with Landlord’s contractor for cleaning services in excess of those furnished by Landlord in accordance with this Lease.

 

9.3    Interruption of Services . In the event of an interruption in or failure or inability to provide any services or utilities to the Premises or Building for any reason (a “Service Failure” ), such Service Failure shall not, regardless of its duration, impose upon Landlord any liability whatsoever, constitute an eviction of Tenant, constructive or otherwise, entitle Tenant to an abatement of rent or to terminate this Lease or otherwise release Tenant from any of Tenant’s obligations under this Lease. Tenant hereby waives any benefits of any applicable existing or future Law permitting the termination of this Lease due to such interruption, failure or inability.

 

9.4    Utilities and Services Furnished by Tenant . Except as provided in Sections 9.1 and 9.2 or in the Construction Rider (if any), Tenant shall be solely responsible for the furnishing and direct payment (including, without limitation, hook-up and connection charges) of all other utilities which are separately metered or separately charged (including, without limitation, telephone, cable television and any other special utility requirements of Tenant if available), if any, to the Premises or to Tenant and shall make such payments to the respective utility companies prior to the delinquency.

 


9.5    Utility Providers . Landlord may, in Landlord’s sole and absolute discretion, at any time and from time to time, contract, or require Tenant to contract, for utility services (including generation, transmission, or delivery of the utility service) with a utility service provider of Landlord’s choosing. Tenant shall fully cooperate with Landlord and any utility service provider selected by Landlord. Tenant shall permit Landlord and the utility service provider to have reasonable access to the Premises and the utility equipment serving the Premises, including lines, feeders, risers, wiring, pipes, and meters. Tenant shall either pay or reimburse Landlord for all costs associated with any change of utility service, including the cost of any new utility equipment, within ten (10) days after Landlord’s written demand for payment or reimbursement. Under no circumstances shall Landlord be responsible or liable for any loss, damage, or expense that Tenant may incur as a result of any change of utility service, including any change that makes the utility supplied less suitable for Tenant’s needs, or for any failure, interference, or defect in any utility service. No such change, failure, interference, or defect shall constitute an actual or constructive eviction of Tenant, or entitle Tenant to any abatement of rent, or relieve Tenant from any of Tenant’s obligations under this Lease.

 

10.    EXCULPATION AND INDEMNIFICATION.

 

10.1    Landlord shall not be liable to Tenant for any loss, injury or other damage to any person or property (including Tenant or Tenant’s property) in or about the Premises or the Property from any cause (including defects in the Property or in any equipment in the Property; fire, explosion or other casualty; bursting, rupture, leakage or overflow of any plumbing or other pipes or lines, sprinklers, tanks, drains, drinking fountains or washstands in, above, or about the Premises or the Property; or acts of other tenants in the Property). Tenant hereby waives all claims against Landlord for such damage and the cost and expense of defending against claims relating to such damage, except that Landlord shall indemnify, defend and hold Tenant harmless from and against any claims, actions, liabilities, damages, costs or expenses, including reasonable attorneys’ fees and costs incurred in defending against the same (the “Claims” ) for such damages, to the extent the same are (x) caused by the willful or negligent acts or omissions of Landlord or its authorized representatives and (y) are not covered by insurance actually carried (or required to be carried) by Tenant.

 

10.2    Tenant shall indemnify, defend and hold Landlord harmless from and against Claims arising from (a) the acts or omissions of Tenant or Tenant’s Representatives or Visitors in or about the Property, or (b) any construction or other work undertaken by Tenant on the Premises (including any design defects), or (c) any breach or default under this Lease by Tenant, or (d) any accident, injury or damage, howsoever and by whomsoever caused, to any person or property, occurring in or about the Premises during the Term; excepting only such Claims for any accident, injury or damage to the extent they are caused by the negligent or willful acts or omissions of Landlord or its authorized representatives.

 

10.3    The obligations of the parties under this Section 10 shall survive the expiration or termination of this Lease.

 

11.    INSURANCE.

 

11.1    Tenant’s Insurance .

 

(a)    Tenant shall maintain in full force throughout the Term, commercial general liability insurance providing coverage on an occurrence form basis with limits of not less than Two Million and No/100ths Dollars ($2,000,000.00) each occurrence for bodily injury and property damage combined, Five Million and No/100ths Dollars ($5,000,000.00) annual general aggregate, and Two Million and No/100ths Dollars ($2,000,000.00) products and completed operations annual aggregate. Tenant’s liability insurance policy or policies shall: (i) include premises and operations liability coverage, products and completed operations liability coverage, broad form property damage coverage, blanket contractual liability coverage including, to the maximum extent possible, coverage for the indemnification obligations of Tenant under this Lease, and personal and advertising injury coverage; (ii) provide that the insurance company has the duty to defend all insureds under the policy; (iii) provide that defense costs are paid in addition to and do not deplete any of the policy limits; (iv) cover liabilities arising out of or incurred in connection with Tenant’s use or occupancy of the Premises or the Property; and (v) extend coverage to cover liability for the actions of Tenant’s Representatives and Visitors.

 

(b)    Tenant shall at all times maintain in effect with respect to any Alterations and Tenant’s Trade Fixtures and personal property, commercial property insurance providing coverage, at a minimum, for “special form” perils, to the extent of eighty percent (80%) of the full replacement cost of covered property, and for business income coverage (limited to $150,000) for a minimum of twelve (12) months. Tenant may carry such insurance under a blanket policy, provided that such policy provides equivalent coverage to a separate policy. During the Term, the proceeds from any such policies of insurance shall be used for the repair or replacement of the Alterations, Trade Fixtures and personal property so insured. Landlord shall be provided coverage under such insurance to the extent of its insurable interest and, if requested by Landlord, both Landlord and Tenant shall sign all documents reasonably necessary or proper in connection with the settlement of any claim or loss under such insurance. Landlord will have no obligation to carry insurance on any Alterations or on Tenant’s Trade Fixtures or personal property.

 


(c)    Each policy of insurance required under this Section shall: (i) be in a form, and written by an insurer, reasonably acceptable to Landlord, (ii) be maintained at Tenant’s sole cost and expense, and (iii) require at least thirty (30) days’ written notice to Landlord prior to any cancellation, nonrenewal or modification of insurance coverage. Insurance companies issuing such policies shall have rating classifications of “A” or better and financial size category ratings of “VII” or better according to the latest edition of the A.M. Best Key Rating Guide. All insurance companies issuing such policies shall be licensed to do business in the state where the Property is located. Any deductible amount under such insurance shall not exceed Twenty-Five Thousand and No/100ths Dollars ($25,000.00). Tenant shall provide to Landlord evidence that the insurance required to be carried by Tenant pursuant to this Section, including any endorsement effecting the additional insured status, is in full force and effect and that premiums therefor have been paid. Such evidence shall, at Landlord’s discretion, be in either form of an ACORD Form 27 (Certificate of Insurance) (or its equivalent) or a certified copy of the original policy, in either event providing that the insurer will provide Landlord with at least thirty (30) days prior written notice before any termination or amendment to the policy.

 

(d)    Tenant shall increase the amounts of insurance as required by any Mortgagee, and, not more frequently than once every three (3) years, as recommended by Landlord’s insurance broker, if, in the opinion of either of them, the amount of insurance then required under this Lease is not adequate. Any limits set forth in this Lease on the amount or type of coverage required by Tenant’s insurance shall not limit the liability of Tenant under this Lease.

 

(e)    Each policy of liability insurance required by this Section shall: (i) contain a cross liability endorsement or separation of insureds clause; (ii) provide that any waiver of subrogation rights or release prior to a loss does not void coverage; (iii) provide that it is primary to and not contributing with, any policy of insurance carried by Landlord covering the same loss; (iv) provide that any failure to comply with the reporting provisions shall not affect coverage provided to Landlord, its partners, property managers and Mortgagees; and (v) name Landlord, its partners, the property manager, and such other parties in interest as Landlord may from time to time reasonably designate to Tenant in writing, as additional insureds. Such additional insureds shall be provided the same extent of coverage as provided to Tenant under such policies. All endorsements effecting such additional insured status shall be acceptable to Landlord and shall be at least as broad as additional insured endorsement form number CG 20 26 11 85 promulgated by the Insurance Services Office.

 

(f)    Prior to occupancy of the Premises by Tenant, and not less than thirty (30) days prior to expiration of any policy thereafter, Tenant shall furnish to Landlord a certificate of insurance or certified policy of insurance reflecting that the insurance required by this Section is in force, accompan


 
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