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
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Lease
Date : For
identification purposes only, the date of this Lease is
4/12/05 , 2005.
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Landlord : The parties identified in the signature block
for Landlord below.
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Tenant : SANZ INC., a Colorado corporation
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Address
of Building : 9800
Pyramid Court, Englewood, Colorado, 80112
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Approximate Rentable Area of the
Building : 117,792
square feet
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Premises : Those certain premises located on the 1
st floor of the Building, and commonly referred to as
Suite 130
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Approximate Rentable Area of
Premises : 9,595
rentable square feet
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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.
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Term : The period of time commencing on
September 15, 2005 (the “Commencement
Date” ), and ending on September 14, 2008 (the
“Expiration Date” ).
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Months following the
Commencement Date
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Monthly
Base
Rent
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Annual Base Rent per Square
Foot of
Rentable
Area
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09/15/05 - 09/14/06
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$13,992.70
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$17.50 (approximately $1.46 per
month)
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09/15/06 - 09/14/07
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$14,392.50
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$18.00 ($1.50 per month)
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09/15/07 - 09/14/08
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$14,792.29
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$18.50 (approximately $1.54 per
month)
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Base
Year : The calendar
year 2005.
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Advance
Rent Amount :
$13,992.70 (per Section 3.1 below).
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Security Deposit : $13,992.70 (per Section 4.1
below).
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Business Hours of the Building
: 7:00 a.m. to 6:00 p.m., Monday
through Friday, exclusive of generally recognized
holidays.
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16.
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Landlord’s Address for Payment of
Rent :
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c/o Catlin Properties
3620 Fair Oaks Boulevard, Suite 150
Sacramento, California 95825
Attention: Property Management
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17.
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Landlord’s Address for
Notices :
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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
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18.
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Tenant’s Address for
Notices
prior to the Commencement
Date
(thereafter, the
Tenant’s Address
for Notices shall be the
Premises) :
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9800 Mt.
Pyramid, Ct., Suite 130
Telephone:
303.660.3933 x 208
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Tenant’s Tax Identification Number or
Social Security Number : 84-1064036
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Broker(s) : CB Richard Ellis
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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.
3.1
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 .
(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.
(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.
6.1 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.
11.1
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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