<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB - QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended September 30, 1998.
or
[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from
______________________________________ to ________________________________.
COMMISSION FILE NUMBER 000-24445
COLORADO BUSINESS BANKSHARES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
COLORADO 84-0826324
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
821 17TH STREET
DENVER, CO. 80202
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(303) 293-2265
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 6,673,481 shares of common
stock, $0.01 par value, outstanding as of November 10, 1998.
<PAGE>
COLORADO BUSINESS BANKSHARES, INC.
PART I. FINANCIAL INFORMATION
Page
----
Item 1. Financial Statements 1
Item 2. Management's Discussion and Analysis of Financial Condition
And Results of Operations 6
PART II. OTHER INFORMATION
Item 1. Legal Proceedings None
Item 2. Changes in Securities and Use of Proceeds 12
Item 3. Defaults Upon Senior Securities None
Item 4. Other information None
Item 5. Exhibits 13
SIGNATURES 13
<PAGE>
PART I - FINANCIAL INFORMATION
COLORADO BUSINESS BANKSHARES, INC.
Consolidated Condensed Balance Sheets
September 30, 1998 (unaudited) and December 31, 1997
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
------------- -------------
(unaudited)
<S> <C> <C>
ASSETS
Cash and due from banks $ 18,428,000 $ 15,075,000
Federal funds sold - 12,700,000
------------- ------------
Total cash and cash equivalents 18,428,000 27,775,000
------------- ------------
Investment securities available for sale (cost of $64,049,000 (unaudited) and
$41,456,000, respectively) 64,613,000 41,630,000
Investment securities held to maturity (fair value of $10,687,000 (unaudited) and
$15,189,000, respectively) 10,509,000 14,931,000
Other investments 2,225,000 2,223,000
------------- ------------
Total investments 77,347,000 58,784,000
------------- ------------
Loans and leases, net 207,399,000 164,091,000
Excess of cost over fair value of net assets acquired, net 4,790,000 5,116,000
Investment in operating leases 4,309,000 3,297,000
Premises and equipment, net 2,727,000 1,266,000
Accrued interest receivable 1,655,000 1,331,000
Real estate acquired through foreclosure, net - -
Deferred income taxes 907,000 777,000
Other 10,852,000 1,622,000
------------- ------------
TOTAL ASSETS $328,414,000 $264,059,000
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $ 82,955,000 $ 69,069,000
NOW and money market 88,945,000 75,164,000
Savings 6,569,000 5,971,000
Certificates of deposit 66,755,000 70,854,000
------------- ------------
Total deposits 245,224,000 221,058,000
Federal funds purchased 17,000,000 -
Securities sold under agreements to repurchase 20,650,000 13,024,000
Other liabilities 2,196,000 1,792,000
Advances from the Federal Home Loan Bank 7,190,000 3,260,000
Note payable - 7,500,000
------------- ------------
Total liabilities 292,260,000 246,634,000
Shareholders' Equity:
Cumulative preferred, $.01 par value; 2,000,000 shares authorized; 1,500 issued and
outstanding, $1,000 liquidation preference - 1,500,000
Common, $.01 par value; 25,000,000 shares authorized; 6,673,468 (unaudited) and
4,874,968 issued and outstanding, respectively 67,000 49,000
Additional paid-in capital 29,838,000 11,933,000
Retained earnings 5,895,000 3,833,000
Net unrealized appreciation on available for sale securities, net of income tax
of $210,000 (unaudited) and $65,000, respectively 354,000 110,000
------------- ------------
Total shareholders' equity 36,154,000 17,425,000
------------- ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $328,414,000 $264,059,000
============= ============
</TABLE>
See accompanying notes to consolidated condensed financial statements.
1
<PAGE>
COLORADO BUSINESS BANKSHARES, INC.
Consolidated Statements of Income
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ -------------------------
1998 1997 1998 1997
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans and leases $ 5,179,000 $3,848,000 $14,435,000 $10,127,000
Interest on investments 1,081,000 1,070,000 2,994,000 3,173,000
----------- ---------- ----------- -----------
Total interest income 6,260,000 4,918,000 17,429,000 13,300,000
INTEREST EXPENSE:
Interest on deposits 1,771,000 1,354,000 5,122,000 3,682,000
Interest on short-term borrowings & FHLB advances 394,000 361,000 988,000 987,000
Interest on note payable - 166,000 301,000 564,000
----------- ---------- ----------- -----------
Total interest expense 2,165,000 1,881,000 6,411,000 5,233,000
NET INTEREST INCOME BEFORE PROVISION FOR
LOAN AND LEASE LOSSES 4,095,000 3,037,000 11,018,000 8,067,000
Provision for loan and lease losses 243,000 299,000 964,000 613,000
----------- ---------- ----------- -----------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN AND LEASE LOSSES 3,852,000 2,738,000 10,054,000 7,454,000
----------- ---------- ----------- -----------
OTHER INCOME:
Service charges 245,000 216,000 692,000 615,000
Operating lease income 556,000 356,000 1,807,000 1,005,000
Other income 345,000 170,000 638,000 574,000
----------- ---------- ----------- -----------
Total other income 1,146,000 742,000 3,137,000 2,194,000
----------- ---------- ----------- -----------
OTHER EXPENSE:
Salaries and employee benefits 1,819,000 1,321,000 5,077,000 3,911,000
Occupancy expenses, premises and equipment 502,000 350,000 1,306,000 1,043,000
Depreciation on leases 487,000 292,000 1,403,000 849,000
Amortization of intangibles 109,000 133,000 332,000 402,000
Other 566,000 441,000 1,503,000 1,281,000
----------- ---------- ----------- -----------
Total other expense 3,483,000 2,537,000 9,621,000 7,486,000
----------- ---------- ----------- -----------
INCOME BEFORE INCOME TAXES 1,515,000 943,000 3,570,000 2,162,000
Provision for income taxes 598,000 381,000 1,431,000 890,000
----------- ---------- ----------- -----------
NET INCOME $ 917,000 $ 562,000 $ 2,139,000 $ 1,272,000
=========== ========== =========== ===========
EARNINGS PER SHARE:
Basic $ 0.14 $ 0.11 $ 0.37 $ 0.26
=========== ========== =========== ===========
Diluted $ 0.13 $ 0.10 $ 0.35 $ 0.26
=========== ========== =========== ===========
</TABLE>
2
<PAGE>
COLORADO BUSINESS BANKSHARES, INC.
Consolidated Condensed Statements of Cash Flows
For the Nine Months Ended September 30, 1998 and 1997
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-----------------------------
1998 1997
----------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,139,000 $ 1,272,000
Adjustments to reconcile net income to net cash
by operating activities:
Net amortization (accretion) on securities $ 160,000 99,000
Depreciation and amortization 2,176,000 1,591,000
Provision for loan and lease losses 964,000 613,000
Deferred income taxes (234,000) (131,000)
Loss (Gain) on sale of premises and equipment 34,000 -
Changes in:
Accrued interest receivable (324,000) (184,000)
Other assets (9,229,000) (250,000)
Accrued interest payable and other liabilities 404,000 391,000
----------- ------------
Net cash provided by operating activities (3,910,000) 3,401,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of held to maturity securities and other investments (2,000) (2,720,000)
Purchase of available for sale securities (42,760,000) (16,663,000)
Proceeds from maturities of held to maturity securities 4,331,000 6,352,000
Proceeds from maturities and sale of available for
sale securities 20,064,000 14,546,000
Loan and Lease origination's and repayments, net (46,953,000) (39,159,000)
Proceeds from sale of real estate acquired
through foreclosure - 109,000
Purchase of premises and equipment (2,220,000) (268,000)
Proceeds from sale of premises and equipment 536,000 -
----------- ------------
Net cash used in investing activities (67,004,000) (37,803,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in demand, NOW, money market,
and savings accounts 28,265,000 16,510,000
Net (decrease) increase in certificates of deposit (4,099,000) 18,737,000
Net increase (decrease) increase in federal funds purchased 17,000,000 824,000
Net increase in securities sold under agreements
to repurchase 7,626,000 4,833,000
Advances from (Payments to) the Federal Home Loan Bank 3,930,000 (70,000)
Payment on notes payable (7,500,000) (2,000,000)
Proceeds from issuance of common stock 17,523,000 3,978,000
Proceeds from issuance of preferred stock - 1,500,000
Dividends paid on preferred stock (78,000) (75,000)
Proceeds from options exercised 400,000 -
Redemption of preferred stock (1,500,000) -
----------- ------------
Net cash provided by financing activities 61,567,000 44,237,000
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (9,347,000) 9,835,000
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD 27,775,000 10,672,000
----------- ------------
CASH AND CASH EQUIVALENTS, END OF
PERIOD $18,428,000 $ 20,507,000
=========== ============
</TABLE>
3
<PAGE>
COLORADO BUSINESS BANKSHARES, INC. AND SUBSIDIARY
Notes to Consolidated Condensed Financial Statements
(Unaudited)
1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
The accompanying consolidated condensed financial statements are unaudited and
include the accounts of Colorado Business Bankshares, Inc. ("Parent"), its
wholly owned subsidiary, Colorado Business Bank, N.A. ("Bank"), and its 80%
owned equipment leasing subsidiary, Colorado Business Leasing, Inc. ("Leasing")
collectively referred to as the "Company".
All significant intercompany accounts and transactions have been eliminated.
Information contained in the consolidated condensed financial statements and
notes thereto of the Company should be read in conjunction with the Company's
consolidated financial statements and notes thereto contained in the Company's
Registration Statement on Form SB-2 (Registration No. 333-50037).
The consolidated condensed financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and instructions to Form 10-QSB. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting only of normally recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
nine month period ended September 30, 1998, or for the quarter ended September
30, 1998, are not necessarily indicative of the results that may be expected for
the year ending December 31, 1998.
2. SHAREHOLDERS' EQUITY
In June 1998, the Company completed an initial public offering ("IPO") of its
common stock. A total of 1,610,000 shares of common stock were sold by the
Company at $12.00 per share yielding net proceeds of $17.5 million, after
deducting underwriting expenses and other expenses. Portions of the proceeds
from the offering were used to retire an outstanding note payable and the
Company's cumulative preferred stock. On June 23, 1998, the note payable, $7.25
million as of that date, was paid in full, and the cumulative preferred stock,
$1.5 million as of that date, was redeemed.
4
<PAGE>
3. EARNINGS PER COMMON SHARE
Earnings per common share is computed as follows:
<TABLE>
<CAPTION>
The three months ended Nine months ended
------------------------ -------------------------
September September September September
1998 1997 1998 1997
--------- --------- --------- ---------
(In thousands, except per share amount)
<S> <C> <C> <C> <C>
Net income $ 917 $ 562 $2,139 $1,272
Preferred dividend 0 41 78 75
------ ------ ------ ------
Net income available for
common shareholders $ 917 $ 521 $2,061 $1,197
------ ------ ------ ------
EARNINGS PER COMMON SHARE
Basic $ 0.14 $ 0.11 $ 0.37 $ 0.26
====================================================
Diluted $ 0.13 $ 0.10 $ 0.35 $ 0.26
====================================================
WEIGHTED AVERAGE SHARES
OUTSTANDING
Basic 6,673 4,875 5,613 4,515
====================================================
Diluted 6,878 4,990 5,836 4,631
====================================================
</TABLE>
Basic earnings per share is based on net income divided by the weighted average
number of common shares outstanding during the period. The weighted average
number of shares outstanding used to compute diluted earnings per common share
include the number of additional common shares that would be outstanding if the
potentially dilutive common shares and common share equivalents had been issued
at the beginning of the period.
4. RECENT ACCOUNTING PRONOUNCEMENTS
In June 1997, SFAS No. 130, "Reporting Comprehensive Income," was issued. SFAS
No. 130 established standards for reporting and display of comprehensive income
and its components (revenues, expenses, gains, and losses) in a full set of
general-purpose financial statements. SAFS No. 130 requires that all items that
are required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. SFAS No. 130 requires that a
company (a) classify items of other comprehensive income by their nature in a
financial statement and (b) display the accumulated balance of other
comprehensive income separately from retained earnings and additional paid-in
capital in the equity section of the balance sheet. The Company adopted this
statement in the first quarter of 1998. The Company's only comprehensive income
component is unrealized gains and losses on available for sale securities. For
the nine months ended September 30, 1998 and 1997, comprehensive income was
$2,383,000 (unaudited) and $1,457,000 (unaudited), respectively.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
CONSOLIDATED CONDENSED BALANCE SHEETS
The Company's total assets increased by $64.3 million, from $264.1 as of
December 31, 1997 to $328.4 million as of September 30, 1998. In the first nine
months of 1998, the loan and lease portfolio (net) increased by $43.3 million,
from $164.1 million at December 31, 1997 to $207.4 million as of September 30,
1998. Investment securities increased by $18.5 million, from $58.8 million as
of December 31, 1997 to $77.3 million as of September 30, 1998. For the first
nine months of 1998, investment in operating leases increased by $1.0 million
while cash and cash equivalents decreased by $9.4 million.
The increase in loans and leases resulted from increased loan demand in the
Company's market areas, specifically the Boulder, Denver and West locations, as
well as increased economic growth in the Denver metropolitan area.
The increase in investment securities was comprised of purchases of $40.8
million of mortgage-backed securities and $2.0 million of U.S. Government
Treasury bills. Paydowns and maturities of $14.2 million and sales of $9.7
million from the investment portfolio partially offset these purchases.
Deposits increased by $24.1 million, from $221.1 million as of December 31, 1997
to $245.2 million as of September 30, 1998. Noninterest-bearing deposits
increased by $13.9 million and interest-bearing deposits increased by $14.3
million. Federal funds purchased and securities sold under agreements to
repurchase increased by $24.6 million in the first nine months of 1998.
The Company completed an Initial Public Offering ("IPO") on June 23, 1998, and
portions of the proceeds were used to pay off an outstanding note and the
Company's cumulative preferred stock. The note payable, $7.25 million as of
June 23, 1998, was paid in full, and the Company's cumulative preferred stock,
$1.5 million as of June 23, 1998, was redeemed. Additional paid-in capital
increased $17.9 million, from $11.9 million as of December 31, 1997 to $29.8
million as of September 30, 1998. Of this increase, $17.5 million was a result
of the IPO and $400,000 was a result of the exercise of 40,000 options in the
first quarter of 1998.
6
<PAGE>
CONSOLIDATED RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998.
Net income before preferred dividends for the Company increased $867,000, or
68.2%, for the nine months ended September 30, 1998, from $1,272,000 for the
nine months ended September 30, 1997 to $2,139,000 for the nine months ended
September 30, 1998. The increased earnings during the nine months reflected
increases in interest-earning assets and net interest income. At September 30,
1998, the Company reported a 36.7% increase in interest-earning assets as
compared to September 30, 1997.
The provision for loan and lease losses increased by $351,000, from $613,000 for
the nine months ended September 30, 1997 to $964,000 for the nine months ended
September 30, 1998. The increase in provision is the result of increased loan
volumes.
Net interest income before provision for loan and lease losses increased $2.9
million to $11.0 million for the nine months ended September 30, 1998, from $8.1
million for the nine months ended September 30, 1997, primarily due to increased
loan and lease volume. The Company's net interest margin before provision was
5.67% at September 30, 1998 compared to 5.48% at September 30, 1997.
Total noninterest income increased by $943,000 to $3,137,000 for the nine months
ended September 30, 1998, from $2,194,000 for the nine months ended September
30, 1997. The increases were primarily due to increases in operating lease
income and one-time trading gains of $113,000 ($71,000 after tax) resulting from
the sale of mortgage-backed securities.
Total noninterest expense increased by $2,135,000 to $9,621,0000 for the nine
months ended September 30, 1998, from $7,486,000 for the nine months ended
September 30, 1997. The increase was primarily due to increases in salary and
related expenses and occupancy expenses as a result of the opening of the West
location in the first quarter of 1998, the establishment of the Community Trust
Division in the first quarter of 1998, the data processing system conversion
that was completed in the second quarter of 1998 and start-up costs related to
the opening of the DTC location in September of 1998. Depreciation on operating
leases also increased in the first nine months of 1998 as a result of the
increased volume.
7
<PAGE>
CONSOLIDATED RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30,
1998.
Net income before preferred dividends for the Company increased $355,000, or
63.2%, for the quarter ended September 30, 1998, from $562,000 for the quarter
ended September 30, 1997, to $917,000 for the quarter ended September 30, 1998.
The increased earnings during the three months ended September 30, 1998
reflected increases in interest-earning assets and net interest income. At
September 30, 1998 the Company reported a 36.7% increase in interest-earning
assets as compared to September 30, 1997.
The provision for loan and lease losses decreased by $56,000, from $299,000 for
the three months ended September 30, 1997 to $243,000 for the three months ended
September 30, 1998. The provision for the three months ended September 30, 1997
was high due to a specific provision related to a specific loan that was
charged-off. The provision for the three months ended September 30, 1998 was
appropriate given the loan growth in the portfolio.
Net interest income before provision for loan and lease losses increased
$1,058,000 to $4,095,000 million for the quarter ended September 30, 1998, from
$3,037,000 for the quarter ended September 30, 1997, primarily due to increased
loan and lease volume.
Total noninterest income increased by $404,000 to $1,146,000 for the three
months ended September 30, 1998, from $742,000 for the three months ended
September 30, 1997. The increases were primarily due to increases in operating
lease income and one-time trading gains of $113,000 ($71,000 after tax)
resulting from the sale of mortgage-backed securities.
Total noninterest expense increased by $946,000 to $3,483,000 for the three
months ended September 30, 1998, from $2,537,000 for the three months ended
September 30, 1997. The increase was primarily due to increases in salary and
related expenses and occupancy expenses as a result of continued start-up costs
for the West location and the Community Trust Division, both of which commenced
operations in the first quarter of 1998. Continued expenses relating to start-
up costs for the DTC location, which opened in September of 1998, and the data
processing system conversion that was completed in the second quarter of 1998
added to noninterest expense for the three months ended September 30, 1998.
Depreciation on operating leases also increased in the second quarter of 1998 as
a result of the increased volume.
8
<PAGE>
ALLOWANCE FOR LOAN AND LEASE LOSSES AND NONPERFORMING ASSETS
The following table presents, for the periods indicated, an analysis of the
allowance for loan and lease losses and other related data:
<TABLE>
<CAPTION>
ALLOWANCE FOR LOAN AND LEASE LOSSES: NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1998 DECEMBER 31, 1997
-----------------------------------------------
(Dollars in Thousands)
<S> <C> <C>
Balance beginning of period $ 2,248 $ 1,660
Provision for loan and lease losses 964 949
Net charge offs (104) (361)
Balance end of period $ 3,108 $ 2,248
===============================================
Allowance for loan and lease losses to total
loans and leases 1.48% 1.35%
Allowance for loan and lease losses to
non-performing loans and leases 331.10% 277.19%
</TABLE>
The allowance for loan and lease losses represents management's recognition of
the risks of extending credit and its evaluation of the quality of the loan and
lease portfolio. The allowance for loan and lease losses is maintained at a
level that is considered adequate to provide for anticipated loan and lease
losses, based on various factors affecting the loan and lease portfolio,
including a review of problem loans and leases, business conditions, historical
loss experience, evaluation of the underlying collateral and holding and
disposal costs. The allowance is increased by additional charges to operating
income and reduced by loans and leases charged off, net of recoveries.
NONPERFORMING ASSETS
The Company's nonperforming assets consist of nonaccrual loans and leases,
restructured loans and leases, past due loans and leases and other real estate
owned. Nonperforming assets were $939,000 as of September 30, 1998, compared
with $811,000 as of December 31, 1997.
9
<PAGE>
The following table presents information regarding nonperforming assets as of
the dates indicated:
<TABLE>
<CAPTION>
NONPERFORMING LOANS AND LEASES:
SEPTEMBER 30, 1998 DECEMBER 31, 1997
-----------------------------------------------
(Dollars in Thousands)
<S> <C> <C>
Loans and leases 90 days or more delinquent and
still accruing interest $ 277 $ ----
Nonaccrual loans and leases 323 470
Restructured loans and leases 339 341
-----------------------------------------------
Total nonperforming loans and leases 939 811
Real estate acquired by foreclosure ---- ----
Total nonperforming assets $ 939 $ 811
===============================================
Ratio of nonperforming assets to total assets
0.29% 0.31%
Ratio of nonperforming loans and leases to
total loans and leases 0.45% 0.49%
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity management objective is to ensure its ability to satisfy
the cash flow requirements of depositors and borrowers and allow the Company to
meet its own cash flow needs. The Company's primary source of funds
historically has been customer deposits. Scheduled loan and lease repayments
are a relatively stable source of funds, while deposit inflows and unscheduled
loan and lease prepayments, which are influenced by fluctuations in general
interest rates, returns available on other investments, competition, economic
conditions and other factors, are relatively unstable. Company borrowings may be
used on a short-term basis to compensate for reductions in other sources of
funds (such as deposit inflows at less than projected levels). Company
borrowings may also be used on a longer term basis to support expanded lending
activities and to match the maturity or repricing intervals of assets.
DATA PROCESSING SYSTEMS AND YEAR 2000 COMPLIANCE
The Company has a Year 2000 Committee that meets regularly to oversee issues
relating to its year 2000 compliance plan. The plan calls for all mission
critical systems to be certified as year 2000 compliant by December 31, 1998.
All material systems will be tested and certified as year 2000 compliant by
March 31, 1999. The Company is on schedule with the timetable established in
its plan for completion of this testing and certification.
10
<PAGE>
The Company completed a conversion to the Jack Henry System, a data processing
system that will provide the Company with the ability to offer more advanced
services such as upgraded P.C. banking, a voice response system and check and
document imaging, in June 1998. Unlike the Company's prior data processing
system, the Jack Henry System is designed to be year 2000 compliant. Testing
and validation of the Jack Henry System has been scheduled and will be completed
by December 31, 1998.
As a result of the conversion to the Jack Henry System and implementation of the
network, total incremental expenses relating to year 2000 compliance, including
depreciation and amortization of the new systems, remediation to bring current
systems into compliance and writing off of legacy systems, are not expected to
have a material impact upon the Company's financial condition. Total
expenditures related to remediation, testing, replacement and upgrading system
applications with respect to the conversion to the Jack Henry System are
expected to range from $1.75 million to $1.9 million from 1998 through 2003, of
which $126,000 was incurred in the first nine months of 1998. Of the total,
approximately $1.1 million will result from capital expenditures related to
acquisition and implementation of hardware and software related to the new data
processing system. The balance, $650,000 to $900,000, will result from expenses
associated with network implementation, remediation, hardware and software
maintenance, and testing of existing systems
The Company has contacted key vendors, customers and others on whom it relies to
assure that their systems will be certified as year 2000 compliant in a timely
fashion. The Company has assessed the exposure from funds takers and funds
providers and allocated reserves for potential losses related to year 2000
exposure. These allocated reserves are not considered material at this time.
However, there can be no assurance that the systems of any such company will be
converted in a timely fashion, or that any such failure to convert by another
company would not have an adverse affect on the Company's systems. Furthermore,
no assurance can be given that any or all of the Company's systems are or will
be Year 2000 compliant, or that the ultimate costs required to address the Year
2000 issue or the impact of any failure to achieve substantial Year 2000
compliance will not have a material adverse effect on the Company's financial
condition. In addition, bank regulatory agencies have begun to monitor bank
holding companies' and banks' readiness for the year 2000 as part of the regular
examination process. In the event that a bank holding company or a bank is
determined not to be satisfactorily prepared for the year 2000, it will be
required to submit a written plan establishing a timetable for year 2000
compliance and periodic progress reports on its efforts to implement the plan.
Failure to formulate a satisfactory plan, or to implement the plan successfully,
could result in enforcement action. The inability of the Company, or its
venders, customers and others upon which it relies, to address year 2000 issues
successfully could result in significant interruptions in its operations and,
therefore, could have a material adverse effect on the Company's business,
financial condition, results of operations and cash flows.
11
<PAGE>
FORWARD LOOKING STATEMENTS
The discussion in this report contains forward-looking statements, including,
without limitation, statements relating to the Company's year 2000 compliance,
which are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Although the Company believes that the
expectations reflected in the forward looking statements are reasonable, it can
give no assurance that such expectations will prove to be correct. The forward-
looking statements involve risks and uncertainties that affect the Company's
operations, financial performance and other factors as discussed in the
Company's filings with the Securities and Exchange Commission. These risks
include the impact of economic conditions and interest rates, loan and lease
losses, risks related to the execution of the Company's growth strategy, the
possible loss of key personnel, factors that could affect the Company's ability
to compete in its trade areas, changes in regulations and government policies
and other factors discussed in the Company's filing with the Securities and
Exchange Commission. In particular, risks related to the Company's year 2000
compliance include those discussed under the heading "Data Processing Systems
and Year 2000 Compliance" in this report.
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
In June 1998, the Company completed its IPO. The IPO was conducted pursuant to a
Registration Statement (the "Registration Statement") on Form SB-2 (File No.
333-50037), which was declared effective by the Securities and Exchange
Commission on June 17, 1998. The IPO was commenced on June 18, 1998 and has been
completed. The managing underwriter for the IPO was Dain Rauscher Wessels, a
division of Dain Rauscher Incorporated. 1,610,000 shares of the Company's Common
Stock, $.01 par value (the "Common Stock"), were registered pursuant to the
Registration Statement and all such shares were sold in the IPO by the Company
at a price to the public of $12.00 per share, for gross proceeds of $19.32
million. Expenses incurred by the Company in connection with the Offering
(including underwriting discounts and commissions and expenses paid to or for
the underwriters) are estimated at $1.8 million. Such expenses constitute direct
or indirect payments to others. None of such expenses were direct or indirect
payments to directors or officers of the Company or their associates, persons
owning 10% or more of any class of equity securities of the Company or
affiliates of the Company. After deducting the expenses described above, the net
proceeds to the Company from the IPO were approximately $17.5 million.
Approximately $7.25 million of such net proceeds was used to repay all of the
remaining outstanding indebtedness under the Company's credit facility,
approximately $1.5 million was used to redeem all of the Company's outstanding
Preferred Stock and approximately $ 5.0 million was contributed to the capital
of Colorado Business Bank, N.A., the Company's wholly-
12
<PAGE>
owned bank subsidiary (the "Bank"). The Company intends to contribute the
remaining $3.75 million of net proceeds to the Bank during the next 12 months.
Such uses constitute direct or indirect payments to others. None of the net
proceeds of the IPO were used to make direct or indirect payments to directors
or officers of the Company or their associates, persons owning 10% or more of
any class of equity securities of the Company or affiliates of the Company.
ITEM 5. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
10.1 Lease Agreement between Kesef, LLC and Colorado Business Bankshares,
Inc.
10.2 Office Lease between SFP Realty, LTD., L.L.P. and Colorado
Business Bank of Boulder National Association.
10.3 Office Building Lease between Hanover Resources Inc. and Colorado
Business Bank, N.A.
10.4 Employment Agreement between Colorado Business Bankshares, Inc. and
Kevin G. Quinn
27.1 Financial Data Schedule as of September 30, 1998
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended September 30,
1998.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
COLORADO BUSINESS BANKSHARES, INC.
Date: November 13, 1998 By: /s/ Steven Bangert
----------------- ----------------------------------------------------
Steven Bangert, Chief Executive Officer and Chairman
Date: November 13, 1998 By: /s/ Richard J. Dalton
----------------- ----------------------------------------------------
Richard J. Dalton, Executive Vice President and
Chief Financial Officer
13
<PAGE>
Exhibit 10.1
BASIC LEASE INFORMATION
-----------------------
The following Basic Lease Information is hereby incorporated into and made
a part of the Lease between Landlord and Tenant to which it is attached. Each
reference in the Lease to any of the Basic Lease Information shall mean the
respective information set forth below, and such information shall be deemed
incorporated as a part of the terms provided under the particular Lease Section
pertaining to such information. In the event of any conflict between any Basic
Lease Information and the Lease, the former shall control.
1. Building: 821 17th Street, Denver, Colorado 80202
========
2. Landlord: Kesef, LLC
======== c/o Shames-Makovsky Realty Company
1400 Glenarm Place, Suite 201
Denver, Colorado 80202
3. Landlord's Address for Giving of Notices and Payment of Rent:
============================================================
Kesef, LLC
c/o Shames-Makovsky Realty Company
1400 Glenarm Place, Suite 201
Denver, Colorado 80202
With a Copy of All Notices to:
=============================
Evan Makovsky
Shames-Makovsky Realty Company
1400 Glenarm Place, Suite 201
Denver, Colorado 80202
4. Tenant: Colorado Business Bankshares, Inc.
====== 821 17th Street
Denver, Colorado 80202
5. Premises: The floor area on the first, second, fourth, sixth, eighth
========
and ninth floors of the Building as outlined on the floor plan of the
Building attached hereto as Exhibit B. (Section 1.2; Exhibit B)
6. Parking Allowance: None.
=================
7. Use of Premises: Offices for the following type of business: Bank and
===============
related office uses. (Section 2)
8. Construction Information Submittal Date: N/A.
=======================================
9. Construction Document Approval Date: N/A/
===================================
10. Commencement Date: May 1, 1998.
=================
11. Expiration Date: See Exhibit G attached hereto.
===============
<PAGE>
12. Rent:
====
Months Monthly Base Rent Amount
------ ------------------------
See Exhibit G attached hereto and incorporated herein by this
reference.
The months referred to above are the full calendar months after any
first partial month of the Lease Term. The monthly Base Rent rate for
any such partial month shall be the same as the rate specified for the
first full calendar month when Base Rent is payable. (Section 1.4)
13. Tenant's Percentage of Operating Expenses: As determined pursuant to
=========================================
Section 5.2.
14. Base Year for Adjustments to Operating Expenses: The 1998 Calendar
===============================================
Year. (Section 5.2)
15. Security Deposit: None.
================
16. Brokers: Shames-Makovsky Realty Company.
=======
<PAGE>
LEASE AGREEMENT
---------------
TERMS AND CONDITIONS
--------------------
SECTION 1. DEMISE AND RENT:
--------- ---------------
1.1 Demise: Landlord hereby leases to Tenant, and Tenant hereby leases
------
from Landlord, upon and subject to the terms, covenants, provisions and
conditions of this Lease Agreement (herein called the "Lease"), the premises
described in Section 1.2 in the building (herein called "Building") located on
the Land described on EXHIBIT A attached hereto and incorporated herein.
---------
1.2 Premises: The Premises (herein called "Premises") leased to Tenant
--------
are described in the Basic Lease Information, and are outlined on the floor
plan(s) for the Building attached hereto as EXHIBIT B and incorporated herein by
---------
this reference.
1.3 Commencement and Expiration Dates: The term of this Lease
---------------------------------
(herein called "Lease Term") shall be for the period specified in the Basic
Lease Information subject to adjustment as provided in Section 30 (or until
sooner terminated as herein provided). If Landlord gives Tenant notice of an
adjustment in the Commencement Date pursuant to Section 30, it shall be deemed a
request for an estoppel statement from Tenant confirming the adjustment pursuant
to Section 27. Unless Tenant gives notice to Landlord of an objection to the
adjustment within fifteen (15) days of Landlord's notice, it shall be final and
binding on the Tenant as an amendment of this Lease.
1.4 Rent: The rents shall be and consist of a Base Rent (herein called
----
"Base Rent") and Additional Rent (herein called "Additional Rent"). For
purposes of this Lease, Base Rent and Additional Rent are referred to
collectively as "Rent." Base Rent shall be the amount indicated in the Basic
Lease Information. Base Rent shall be payable in equal monthly installments in
advance on the first day of each and every calendar month during the term of
this Lease (except to the extent otherwise specifically provided elsewhere in
this Lease and except that Tenant shall pay, upon the execution and delivery of
this Lease by Tenant, the sum indicated in the Basic Lease Information, to be
applied against the first installment(s) of Base Rent becoming due under this
Lease). Additional Rent shall consist of all other sums of money as shall
become due from and payable by Tenant to Landlord under this Lease. All Rent
shall be paid in lawful money of the United States of America to Landlord at its
office or such other place, as Landlord shall designate by notice to Tenant.
Tenant shall pay the Base Rent and Additional Rent promptly when due without
notice or demand and without any abatement, deduction or offset for any reason
whatsoever, except as expressly provided in this Lease. If the Commencement
Date occurs on a day other than the first day of a calendar month, the Base Rent
for that partial calendar month shall be prorated on a daily basis. If the
Basic Lease Information provides for the abatement of Base Rent for any
specified periods of time during the term of the Lease ("Rent Free Period(s)"),
none of the Base Rent specified in this Lease as payable during the Lease Term
shall be allocable to any such Rent Free Period(s). In the event of any default
by Tenant, Landlord shall have the right to collect Rent for the Premises from
Tenant for all Rent Free Period(s) at the same Base Rent in effect immediately
after any such Rent Free Period(s).
1.5 Late Charge: Tenant recognizes that late payment of any Rent from
-----------
Tenant to Landlord will result in administrative expense to Landlord, the extent
of which additional expense is extremely difficult and economically impractical
to ascertain. Tenant therefore agrees that if Rent from Tenant to Landlord
remains unpaid five (5) days after said amount is due, the amount of such unpaid
Rent or other payments shall be increased by a late charge
3
LEASE AGREEMENT
<PAGE>
to be paid to Landlord by Tenant in an amount equal to five percent (5%) of the
amount of the delinquent Rent or other payment. Tenant agrees that such amount
is a reasonable estimate of the loss and expense to be suffered by Landlord as a
result of such late payment by Tenant and may be charged by Landlord to defray
such loss and expense. The provisions of this Section in no way relieve Tenant
of the obligation to pay Rent or other payments on or before the date on which
they are due, nor do the terms of this Section in any way affect Landlord's
remedies pursuant to Section 21 of this Lease in the event Rent is past due.
1.6 Confidentiality: Tenant shall keep the Rent and other terms of this
---------------
Lease confidential from other current and prospective occupants of the Building
and any other buildings owned by Landlord except to the extent disclosure is
reasonably necessary in the conduct of Tenant's business.
SECTION 2. USE:
- --------- ---
Tenant shall use and occupy the Premises continuously during the term of
this Lease for the use specified in the Basic Lease Information and for no other
purpose without the written consent of Landlord. If any governmental license or
permit, other than a Certificate of Occupancy, shall be required for the proper
and lawful conduct of Tenant's business in the Premises or any part thereof,
Tenant, at its expense, shall duly procure and thereafter maintain such license
or permit and submit the same to Landlord for inspection. Tenant shall at all
times comply with the terms and conditions of each such license or permit.
Tenant shall not do or permit anything to be done in or about the Premises which
will in any way obstruct or interfere with the rights of other tenants or
occupants of the Building or injure or annoy them, nor use or allow the Premises
to be used for any improper, immoral, unlawful or objectionable purpose, nor
shall Tenant cause or maintain or permit any nuisance in, on, or about the
Premises. Tenant shall not commit or allow the commission of any waste in, on,
or about the Premises. Tenant shall not use the Premises or permit anything to
be done in or about the Premises which will in any way conflict with any law,
statute, ordinance, or governmental rule or regulation now in force or which may
hereafter be enacted or promulgated. Tenant shall not do or permit anything to
be done on or about the Premises or bring or keep anything therein which will in
any way increase the rate of any insurance upon the Building in which the
Premises are situated or any of its contents or cause a cancellation of said
insurance or otherwise affect said insurance in any manner. Tenant shall, at
its sole cost and expense, promptly comply with all laws, statutes, ordinances,
and governmental rules, regulations, or requirements now in force or which may
hereafter be in force ("Legal Requirements") and with the requirements of any
board of fire underwriters or other similar body now or hereafter constituted
relating to or affecting the condition, use, or occupancy of the Premises,
excluding structural changes not related to or affected by: (i) alterations or
improvements made by or for Tenant or (ii) Tenant's acts. The judgment of any
court of competent jurisdiction or the admission of Tenant in an action against
Tenant, whether Landlord be a party thereto or not, that Tenant has so violated
any such law, statute, ordinance, rule, regulation, or requirement, shall be
conclusive of such violation as between Landlord and Tenant. Tenant shall use
its best efforts to prevent any violation of applicable Legal Requirements by
its partners, directors, officers, agents and employees.
SECTION 3. TENANT'S ACCEPTANCE AND MAINTENANCE OF PREMISES:
- --------- -----------------------------------------------
By taking possession of the Premises, Tenant accepts the Premises as being
in the condition in which Landlord is obligated to deliver them and otherwise in
good order, condition and repair.
4
LEASE AGREEMENT
<PAGE>
Landlord's obligations to maintain the Building are as set forth in Section 14.1
hereof. Tenant shall, at all times during the term hereof at Tenant's sole cost
and expense, keep the following items in good order, condition and repair: (i)
floor coverings, (ii) wall coverings, (iii) paint, (iv) casework, (v) ceiling
tiles, (vi) all of Tenant's Property (as defined in Section 13.2 herein) and
(vii) any and all Non-Building-Standard Tenant Improvements. Landlord shall have
no obligation to alter, remove, improve, repair, decorate, or paint the Premises
or any part thereof except as specified in EXHIBIT C attached hereto and made a
---------
part hereof. No representations respecting the condition of the Premises or the
Building have been made by Landlord to Tenant, except as herein set forth.
SECTION 4. OPERATING EXPENSES AND TAXES:
- --------- ----------------------------
4.1 Operating Expenses: For the purposes of this Lease, the term
------------------
"Operating Expenses" shall mean all expenses paid or incurred by Landlord (or on
Landlord's behalf) as determined by Landlord for the operation, maintenance and
repair of the Land and/or Building, including the common areas of the Building,
including without limitation: (i) salaries, wages, medical, surgical, union and
general welfare benefits (including, without limitation, group life insurance)
and pension payments of employees of Landlord engaged in the repair, operation
and maintenance of the Land and/or Building, provided however that Landlord
shall not include in the operating expenses the salaries, wages, etc. of any
employee who is separately compensated by Landlord's property manager; (ii)
payroll taxes, workers' compensation insurance, uniforms and related expenses
for employees; (iii) the cost of all charges for gas, steam, electricity, heat,
ventilation, air-conditioning, water and other utilities furnished to the
Building, together with any taxes on such utilities; (iv) the cost of painting
of public areas; (v) the cost of all charges of insurance, including but not
limited to all risk property insurance with rent loss coverage, liability and
fidelity insurance, with regard to the Land and/or Building and the maintenance
and/or operation thereof; (vi) the cost or rental of all supplies, including
without limitation, cleaning supplies, light bulbs, tubes and ballasts,
materials and equipment, and sales and other taxes thereon; (vii) the cost of
hand tools and other movable equipment used in the repair, maintenance or
operation of the Building amortized over the useful life of such hand tools and
movable equipment (as reasonably estimated by Landlord); (viii) the cost of all
charges for window and other cleaning and janitorial and security services; (ix)
charges of independent contractors performing repairs or services to the Land
and/or Building; (x) non-capital repairs; (xi) remodeling of the public and
common areas of the Building including, without limitation, repainting,
replacement and repair of furnishings, fixtures, accessories, carpeting or other
floor covering, wall and window coverings in the public and common areas,
provided, however, that Landlord shall not include as an operating expense the
costs of the initial remodeling of the Building being performed by Landlord;
(xii) alterations and improvements to the Building made by reason of the laws
and requirements of any public authorities or the requirements of insurance
bodies amortized over the useful life of the improvements; (xiii) management
fees paid to a third party, or, if no managing agent is employed by Landlord,
Landlord shall be entitled to charge a management fee which is not in excess of
five percent (5%) of gross revenue, and such fee shall be included in the
Operating Expenses; (xiv) the cost of any capital improvements or repairs to the
Building and/or of any machinery or equipment installed in the Building
amortized (with interest at the rate of nine percent [9%] on the unamortized
balance) over the useful life of the improvement, machinery and/or equipment as
reasonably estimated by Landlord, which is made or becomes operational, as the
case may be, after the completion of the construction of the Building and which
have a reasonable probability of reducing the
5
LEASE AGREEMENT
<PAGE>
expenses which otherwise would be included in Operating Expenses; (xv)
reasonable legal, accounting and other professional fees incurred in connection
with operation, maintenance and management of the Land and/or Building which are
not incurred solely for the benefit of any one particular tenant; (xvi) the cost
of providing elevator service; (xvii) the cost of landscape and parking area
maintenance and repair; (xviii) the common area charges to which the Building is
subject; (xix) Taxes as defined in Section 4.3; and (xx) all other charges
properly allocable to the operation, repair and maintenance of the Building in
accordance with generally accepted accounting principles.
4.2 Exclusions From Operating Expenses: Operating Expenses shall not
----------------------------------
include: (i) depreciation or amortization (except as provided above in Section
4.1); (ii) interest on and amortization of debts (except as provided above in
Section 4.1); (iii) leasehold improvements made for new tenants of the Building;
(iv) leasing commissions, attorneys' fees, costs and disbursements and other
expenses (including advertising) incurred in connection with leasing,
renovating, or improving space for tenants or other occupants or prospective
tenants or occupants of the Building; (v) refinancing costs; (vi) the cost of
any work or services performed for any occupants of any leased space in the
Building (including Tenant), whether at the expense of Landlord or such
occupants, to the extent that such work or services is in excess of the work or
services which Landlord, at its expense, is required to furnish to Tenant under
this Lease; (vii) the cost of any electricity furnished to the Premises or any
other leased space in the Building in excess of the electricity to be provided
by Landlord under this Lease; (viii) damages recoverable by any occupant due to
violation by Landlord of any of the terms and conditions of this Lease or any
other lease relating to the Building; (ix) repairs occasioned by fire, windstorm
or other casualty, to the extent such repairs are paid for by insurance
proceeds; and (x) capital repairs and replacements (except as provided above in
Section 4.1).
4.3 Taxes: The term "Taxes" shall include (i) all real property taxes
-----
and assessments and personal property taxes, charges, rates, duties and
assessments rated, levied or imposed by any governmental authority with respect
to the Land, the Building and any improvements, fixtures and equipment located
therein or thereon, and with respect to all other property of Landlord, real or
personal, located in or on the Land or the Building and used in connection with
the operation of the Building; (ii) any tax in lieu of a real property tax;
(iii) any tax or excise levied or assessed by any governmental authority on the
rentals payable under this Lease or rentals accruing from the use of the Land or
the Building, provided that this shall not include federal or state, corporate
or personal income taxes; (iv) any tax or excise imposed or assessed against
Landlord which is measured or based in whole or in part on the capital employed
by Landlord to improve the Land and construct the Building; and (v) any
improvement district fee or similar charges (which shall be deemed payable in
the maximum number of installments possible, whether or not Landlord so elects
to pay the same in installments and if so paid in one installment by Landlord,
Landlord shall be entitled to collect interest on the amount paid using the
interest rate factor using by the taxing entity). If Landlord receives a refund
of Taxes then Landlord shall credit such refund, net of any professional fees
and costs incurred by Landlord to obtain the same, against the Taxes for the
Operating Year to which the refund is applicable or the current Operating Year,
at Landlord's option. The amount of the Taxes for the Base Year shall reflect
any refund resulting from any appeal, protest, or other action by Landlord
contesting the amount claimed by the governmental authorities and any statements
by Landlord as to the amount of Base Year Taxes shall be tentative until any
such contest is completed.
6
LEASE AGREEMENT
<PAGE>
SECTION 5. PAYMENT OF OPERATING EXPENSES:
- --------- -----------------------------
5.1 Operating Year: As used in this Section 5, the term "Operating
--------------
Year" shall mean each calendar year of the Lease Term and in the event this
Lease begins or ends on any date other than the first day of the calendar year,
the calculations, costs and payments referred to herein shall be prorated as
provided in Section 31.11.
5.2 Tenant's Pro Rata Share: Throughout the entire Lease Term,
-----------------------
Tenant shall pay, as Additional Rent, Tenant's Percentage of the increase in
Operating Expenses of the Building, if any, over the Operating Expenses for the
Base Year. Tenant's Percentage of the increase in Operating Expenses of the
Building for each Operating Year shall be calculated as follows: the Operating
Expenses for each Operating Year less the Operating Expenses for the Base Year
shall be multiplied by Tenant's Percentage. If in any Operating Year Tenant
occupies the Premises for less than the full Operating Year, then the product
from the foregoing multiplication shall be multiplied by the percentage of the
Operating Year in which Tenant occupied the Premises. "Tenant's Percentage"
shall mean a percentage, the numerator of which is the number of rentable square
feet of the leased Premises and the denominator of which is the total number of
rentable square feet of the Building, whether or not such space is actually
rented. The Tenant's Percentage shall be changed from time to time to reflect
any change in the total rentable square footage in the Building or the rentable
square feet of the leased Premises. If the rentable square footage of the
Building is not fully occupied during any particular Operating Expense year
including the base year, Landlord shall adjust those Operating Expenses which
are affected by occupancy for the particular Operating Expense year to reflect
100% occupancy. If during any Operating Year the tenant of any space in the
Building performs work or services therein pursuant to a written agreement
between Landlord and such tenant in lieu of having Landlord perform the same and
the cost thereof would have been included in Landlord's Operating Expenses, then
in any such event(s), at Landlord's option, the Operating Expenses for such
Operating Year shall be adjusted to reflect the Operating Expenses that would
have been incurred if Landlord had performed such work or services, as the case
may be. In the event Operating Expenses are decreased as a result of
extraordinary changes then the Base Year Operating Expenses shall be
correspondingly reduced. An extraordinary change shall mean changes unrelated
to the normal inflation and deflation of the cost of goods and services making
up the Operating Expenses, such as a change in the rentable area contained in
the Building resulting from condemnation, casualty, demolition, alteration or
construction of the additional improvements. Any decrease in Taxes shall be
considered an extraordinary change if due to any statewide property tax
limitation or reduction legislation. If the total rentable area of the Building
changes, Landlord shall reasonably determine a revised Tenant's Percentage
reflecting the change.
5.3 Written Statement of Estimate: Beginning with the second lease
-----------------------------
year and prior to the commencement of each subsequent Operating Year during the
Lease Term, Landlord shall furnish Tenant with a written statement setting forth
Tenant's Percentage of the estimated increase in Operating Expenses and Taxes
for the next Operating Year. Tenant shall pay to Landlord as Additional Rent
commencing on January 1 of the Operating Year, and thereafter on the first day
of each calendar month, an amount equal to one-twelfth of the amount of Tenant's
Percentage as shown in Landlord's written statement. In the event Landlord
delivers the written statement late, Tenant shall continue to pay to Landlord an
amount equal to one-twelfth of Tenant's Percentage of the estimated Operating
Expenses for the immediately preceding Operating Year until Landlord does
furnish the written statement, at which time
7
LEASE AGREEMENT
<PAGE>
Tenant shall pay the amount of any excess of the Tenant's Percentage for the
expired portion of the current Operating Year over the Tenant's actual payments
during such time and any excess payments by Tenant shall be credited to the next
due payment of Rent from Tenant. The late delivery of any written statement by
Landlord shall not constitute a waiver of Tenant's obligation to pay its pro
rata share of Operating Expenses nor subject the Landlord to any liability, but
Landlord shall use reasonable efforts to deliver such written statements of
estimated increase in Operating Expenses as soon as reasonably possible after
the commencement of each Operating Year.
5.4 Final Written Statement: Within 120 days after the close of each
-----------------------
Operating Year during the Lease Term, Landlord shall deliver to Tenant a written
statement (the "Operating Statement") setting forth Tenant's actual Percentage
of the increase in Operating Expenses for the preceding Operating Year. In the
event Tenant's Percentage of the actual increase in Operating Expenses is in
excess of the Tenant's pro rata estimated increase in Operating Expenses, Tenant
shall pay the amount of such excess to Landlord as Additional Rent within thirty
(30) days after receipt of such statement by Tenant. In the event Tenant's
Percentage of the actual increase in Operating Expenses is less than the
Tenant's Percentage of the estimated increase in Operating Expenses actually
paid by Tenant then the amount of the excess overpayment shall be paid by
Landlord to Tenant within thirty (30) days following the date of such statement
or Landlord may elect to apply the overpayment to Tenant's next Rent payment(s).
The late delivery of any written statement by Landlord shall not constitute a
waiver of Tenant's obligation to pay its pro rata share of Operating Expenses,
but Landlord shall use reasonable efforts to deliver such written statements as
soon as reasonably possible after the commencement of each Operating Year.
5.5 Tenant Examination: The Operating Statement referred to herein
------------------
need not be audited but shall contain sufficient detail to enable Tenant to
verify the calculation of its Percentage. In addition, Tenant, upon at least
five days advance written notice to Landlord and during business hours, may
examine any invoices, receipts, canceled checks, vouchers or other instruments
used to support the figures shown on the Operating Statement, provided however,
that Tenant shall only be entitled to such an examination once in each Operating
Year, and the examination shall not be conducted by anyone who is engaged on a
contingent fee basis to represent Tenant or who is a competitor of Landlord.
Tenant shall also have the one time right to examine the Base Year at any time
during the second lease year upon at least five days advance written notice to
Landlord. Property managers and commercial building owners shall be deemed
competitors of Landlord. The person conducting the examination on behalf of
Tenant shall enter into a confidentiality agreement satisfactory to Landlord.
In the event the examination fails to discover a valid overcharge in excess of
5% of the Operating Expense payments during the Operating Year covered by the
examination, Tenant shall reimburse Landlord for the reasonable costs incurred
by Landlord due to the examination. In the event the examination discloses an
over charge in excess of five percent (5%), Landlord shall promptly refund such
over charge and shall pay to Tenant all reasonable costs incurred for the
examination.
5.6 Disputes: Each such Operating Statement given by Landlord pursuant
--------
to this Section shall be conclusive and binding upon Tenant unless within ninety
(90) days after the receipt of such Operating Statement Tenant shall notify
Landlord that it disputes the correctness of the Operating Statement, specifying
the particular respects in which the Operating Statement is claimed to be
incorrect. If such disputes shall not have been settled by agreement, either
party, within thirty (30) days after receipt of
8
LEASE AGREEMENT
<PAGE>
such Statement, may pursue its available legal remedies, but Tenant hereby
agrees that a dispute over the Operating Statement or any error by Landlord in
interpreting or applying Section 4 or in calculating the amounts in the
Operating Statement shall not be a breach of this Lease by Landlord, and even if
any legal proceeding over the Operating Statement is resolved against Landlord
this Lease shall remain in full force and effect and Landlord shall not be
liable for any consequential damages, and pending the determination of such
dispute, Tenant, within ten (10) days of receipt of such Operating Statement,
shall pay Additional Rent in accordance with the Operating Statement, without
prejudice to Tenant's position. If the dispute shall be determined in Tenant's
favor, Landlord shall forthwith pay to Tenant the amount of Tenant's overpayment
of rents resulting from compliance with the Operating Statement.
5.7 Payment: If an Operating Year ends after the expiration or
-------
termination of this Lease, the Additional Rent in respect thereof payable under
this Section shall be paid by Tenant within ten (10) days of its receipt of the
Operating Statement for such Operating Year.
5.8 No Reduction in Amount of Base Rent: Nothing in the Lease
-----------------------------------
shall be construed to mean the Base Rent amount specified in the Basic Lease
Information shall be reduced due to any decrease in Operating Expenses, it being
intended that the amount of the Base Rent remain fixed throughout the Lease
Term.
SECTION 6. SECURITY DEPOSIT:
- --------- -----------------
The provisions of this Section 6 have been intentionally deleted for the
benefit of the Tenant only and in the event that the Tenant seeks the Landlord's
approval to assign this Lease or sublet the Premises, the Landlord reserves the
right to require that a security deposit be paid and that provisions relating to
the security deposit be inserted into this Lease.
SECTION 7. SUBORDINATION, NOTICE TO SUPERIOR LESSORS AND MORTGAGEES:
- --------- --------------------------------------------------------
7.1 Subordination: Any lease to which this Lease is, at the time
-------------
referred to, subject and subordinate is herein called "Superior Lease" and the
lessor of a Superior Lease or its successor in interest, at the time referred
to, is herein called "Superior Lessor," and any mortgage to which this Lease is,
at the time referred to, subject and subordinate is herein called "Superior
Mortgage" and the holder of a Superior Mortgage, or its successor in interest,
at the time referred to, is herein called "Superior Mortgagee." This Lease, and
all rights of Tenant hereunder, are and shall be subject and subordinate to any
ground leases covering the Land and/or the Building now or hereafter existing,
and to all mortgages which may now or hereafter affect the Land and/or the
Building and/or any of such leases, whether or not such mortgages shall also
cover other lands and/or buildings and/or leases, to each and every advance made
or hereafter to be made under such mortgages, and to all renewals,
modifications, replacements and extensions of such leases and such mortgages.
This Section shall be self-operative, and no further instrument of subordination
shall be required. In confirmation of such subordination, Tenant shall promptly
execute, acknowledge or deliver any instrument that Landlord, any Superior
Lessor or any Superior Mortgagee may reasonably request to evidence such
subordination. The Landlord shall indemnify and hold the Tenant harmless from
all claims and damages, including reasonable attorney's fees, in the event that
any such Superior Lessor terminates this Lease.
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7.2 Notice: If any act or omission of Landlord would give Tenant the
------
right, immediately or after lapse of a period of time, to cancel or terminate
this Lease, or to claim a partial or total eviction, Tenant shall not exercise
such right: (i) until it has given written notice of such act or omission to
Landlord and each Superior Mortgagee and each Superior Lessor whose name and
address shall previously have been furnished to Tenant; and (ii) until a
reasonable period of time, not to exceed thirty (30) days, for such parties to
cure the condition has passed; provided, however, in the case of a default which
cannot with due diligence be cured within such time period duly commence curing
the default within such time period, and thereafter diligently prosecute to
completion all steps necessary to remedy the default.
7.3 Attornment: For the purposes of this Section, the term "Successor
----------
Landlord" shall mean the Superior Lessor or Superior Mortgagee if the same
succeeds to the rights of Landlord under this Lease, whether through possession
or foreclosure action or delivery of a new lease or deed, or any third party
that succeeds to the rights of Landlord under this Lease by virtue of having
purchased the Land and the Building at a foreclosure sale. The Successor
Landlord shall accept Tenant's attornment, assume Landlord's obligations under
the Lease, and shall not disturb Tenant's quiet possession of the Premises.
Tenant shall attorn to and recognize such Successor Landlord as Tenant's
Landlord under this Lease and shall promptly execute and deliver any instrument
that such Successor Landlord may reasonably request to evidence such attornment.
Upon such attornment this Lease shall continue in full force and effect as a
direct lease between the Successor Landlord and Tenant upon all of the terms,
conditions and covenants as are set forth in this Lease except that the
Successor Landlord shall not: (i) be liable for any previous act or omission of
Landlord under this Lease except that the Successor Landlord shall have a
reasonable period of time to cure any continuing breach of this Lease caused by
the Landlord's prior acts or omissions; (ii) be subject to any offset,
deficiency or defense which theretofore shall have accrued to Tenant against
Landlord; (iii) be bound by any previous modification of this Lease or by any
previous prepayment of more than one (1) month's Base Rent, unless such
modification or prepayment shall have been expressly approved in writing by the
Superior Lessor or the Superior Mortgagee whose name and address shall
previously have been furnished to Tenant and through or by reason of which the
Successor Landlord shall have succeeded to the right of Landlord under this
Lease; (iv) be liable for the commencement or completion of any construction or
any contribution toward construction or installation of any improvements upon
the Premises required under this Lease, or any expansion or rehabilitation of
existing improvements upon the Premises, or for restoration of improvements
following any casualty not required to be insured under this Lease or for the
costs of any restoration in excess of the proceeds recovered under any insurance
required to be carried under this Lease; (v) be liable for any lien, right,
power or interest, if any, which may have arisen or intervened in the period
between the recording of any Superior Mortgage and the execution of this Lease
or any lien or judgment which may arise at any time under the terms of this
Lease; or (vi) be liable for the return of any security deposit which was not
actually transferred to the Successor Landlord. Successor Landlord shall be
deemed to have agreed, by taking title to the Building, to undertake all of
Landlord's obligations under this Lease arising after such attornment.
SECTION 8. QUIET ENJOYMENT:
- --------- -----------------
So long as Tenant pays all of the Base Rent and Additional Rent and
performs all of Tenant's other obligations hereunder, Tenant shall peaceably and
quietly have, hold and enjoy the Premises without hindrance, ejection or
molestation by Landlord
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or any person lawfully claiming through or under Landlord, subject nevertheless,
to the provisions of this Lease and to any Superior Lease and/or Superior
Mortgage. This covenant shall be construed as a covenant running with the Land,
and is not, nor shall it be construed as, a personal covenant of Landlord,
except to the extent of Landlord's interest in this Lease and only so long as
such interest shall continue, and thereafter this covenant shall be binding only
upon subsequent successors in interest of Landlord's interest in this Lease, to
the extent of their respective interests, as and when they shall acquire the
same, and so long as they shall retain such interest.
SECTION 9. ASSIGNMENT AND SUBLETTING:
- --------- -------------------------
9.1 Generally: Tenant shall not sell, assign, sublet, encumber or
---------
otherwise transfer by operation of law or otherwise this Lease or any interest
herein, or the Premises or any portion thereof, without the prior written
consent of Landlord which consent shall not be unreasonably withheld or
conditioned nor shall Tenant permit any lien to be placed on the Tenant's
interest by operation of law. Any change in effective control of a corporation,
partnership or other artificial entity which is the Tenant shall be deemed a
transfer of this Lease. Any transfer hereunder by Tenant shall not result in
Tenant being released or discharged from any liability under this Lease. Any
sale, assignment, encumbrance, subletting, occupation, lien or other transfer of
this Lease which does not comply with the provisions of this Section 9 shall be
void. Any listing on Building directories or other signage using a name other
than Tenant's in conjunction with the Premises will not be deemed, nor will it
substitute for, Landlord's consent, as required by this Lease, to any sublease,
assignment or other occupancy of the Premises. For the purposes hereof, the
term "change in effective control" shall mean: a sale by Tenant of all or
substantially all of its assets or substantially all of its stock if Tenant is a
publicly traded corporation, a merger of Tenant with another corporation, the
transfer of 25% or more of the stock in a corporate tenant whose stock is not
publicly traded, or transfer of 25% or more of the beneficial ownership interest
in a partnership tenant. Landlord acknowledges that Tenant is in the process of
"going public" which shall not be considered a "change in effective control" for
the purposes hereof.
9.1.1 Tenant shall, by written notice, advise Landlord of its desire
from and after a stated date (which shall not be less than thirty [30] days nor
more than ninety [90] days after the date of Tenant's notice), to transfer its
interest in the Premises or any portion thereof for any part of the term hereof;
and such notice by Tenant shall state the name and address of the proposed
transferee, and Tenant shall deliver to Landlord a true and complete copy of the
proposed transfer instrument with said notice.
9.1.2 Upon any request by Tenant to transfer all or any part of the
Premises, Landlord shall have the right to either: (a) permit the transfer on
the conditions referred to in Section 9.2 and any other conditions Landlord may
impose; (b) deny Tenant's request, in which event this Lease shall continue in
full force and effect and unmodified; or (c) terminate this Lease by written
notice to Tenant with respect to the portion of the Premises described in
Tenant's notice and if Landlord desires, to then lease such space to any party
including the transferee identified in Tenant's notice at whatever times
Landlord establishes. If Landlord does not consent and elects to terminate the
Lease as to such portion, Tenant may within fifteen (15) days after notice from
Landlord to this effect withdraw Tenant's request for consent. Any such
termination with respect to less than all of the Premises shall result in a
percentage reduction in Rent equal
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to the percentage of the Premises as to which the Lease is terminated.
9.2 Conditions of Landlord's Consent: As a condition to Landlord's
--------------------------------
prior written consent as provided for in this Section 9, (a) Tenant shall pay
Landlord its reasonable legal fees and costs incurred due to the transfer; (b)
the transferee(s) shall agree in writing to comply with and be bound by all of
the terms, covenants, conditions, provisions and agreements of this Lease, and
(c) Tenant shall deliver to Landlord, promptly after execution, an executed copy
of each transfer instrument and an agreement of said compliance by each
transferee. Landlord may require as a condition of granting consent to a
transfer that Tenant shall pay to Landlord all profits from the transfer
determined by deducting from the total consideration paid directly or indirectly
to or for the benefit of Tenant or its designee for the transferred interest,
the reasonable costs of the transfer incurred by the Tenant and subtracting the
remaining rent obligation of the Tenant at such time under this Lease. For
purposes of determining all profits from the transfer, substance shall control
over form such that Landlord may ignore any attempt by Tenant to inflate the
purchase price of any other assets transferred in an attempt to conceal the
profit on the transfer of the Tenant's interest in this Lease. Sums payable
hereunder shall be paid to Landlord as and when paid by the transferee to
Tenant.
SECTION 10. INSURANCE:
- ---------- ---------
10.1 Waiver of Right of Recovery: Whenever (a) any loss, cost, damage,
---------------------------
or expense resulting from fire, explosion, or any other casualty or occurrence
is incurred by either of the parties to this Lease, or anyone claiming by,
through, or under it in connection with the Building or the Premises, and (b)
such party is then covered in whole or in part by insurance (or so required by
operation of law or this Lease to be covered by insurance) with respect to such
loss, cost, damage, or expense or required under this Lease to be so insured,
then the party so insured hereby releases the other party from any liability
said other party may have on account of such loss, cost, damage, or expense to
the extent of any amount recovered by reason of such insurance (or which could
have been recovered had such insurance been carried as so required) and waives
any right of subrogation which might otherwise exist in or accrue to any person
on account thereof. Notwithstanding anything herein to the contrary, each party
shall remain fully liable for the payment of deductibles under their respective
insurance policies.
10.2 Public Liability Insurance: Tenant, at its expense, shall
--------------------------
maintain at all times during the term of this Lease, public liability insurance
in respect of the Premises and the conduct or operation of business therein,
with Landlord, its asset manager and property manager, if any, and any Superior
Lessor or Superior Mortgagee whose name and address shall previously have been
furnished to Tenant, as additional insureds, with One Million and No/100 Dollars
($1,000,000.00) minimum combined single limit coverage, or its equivalent, with
deductibles in such amounts as specified by Landlord in Landlord's reasonable
discretion. All such insurance shall insure the performance by Tenant of the
indemnity agreement as to liability for injury to, illness of, or death of
persons and damage to property set forth in Section 17. Tenant shall deliver to
Landlord and any additional insured ACORD Form 25-S certificates of insurance
issued by the insurance company or its authorized agent, at least ten (10) days
before the Commencement Date. Tenant shall procure and pay for renewals of such
insurance from time to time before the expiration thereof, and Tenant shall
deliver to Landlord and any additional insured such renewal certificate at least
thirty (30) days before the expiration of any existing policy.
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10.3 Acceptable Insurance Companies: All insurance policies required
------------------------------
to be carried by Tenant hereunder shall be issued by responsible insurance
companies authorized to issue insurance in the State of Colorado rated A- or
better and a financial size category of class 10 or better by Best's Insurance
Rating Service, or such other rating service reasonably selected by Landlord in
the event that Best's Insurance Rating Service ceases issuing such ratings.
10.4 Increase in Coverage: Landlord may from time to time, but not
--------------------
more frequently than once every three (3) years, require that the amount of
public liability insurance to be maintained by Tenant under Section 10.2 be
increased so that the amount thereof adequately protects the Landlord's interest
based on amounts of coverage required of comparable tenants in comparable
buildings.
10.5 Landlord's Insurance: Landlord shall maintain property insurance for
--------------------
the Building, the Premises and all improvements which Landlord has the
obligation to maintain and repair insured against loss or damage by fire,
lightning, windstorm, explosion and/or all other extended coverage risks in an
amount equal to the full replacement value thereof, from such companies, and on
terms and conditions, including insurance for loss of Rent as Landlord deems
appropriate from time to time.
SECTION 11. RULES AND REGULATIONS:
- ---------- ---------------------
Tenant shall faithfully observe and comply with the rules and
regulations printed on or annexed to this Lease as EXHIBIT E and all reasonable
---------
modifications thereof and additions thereto from time to time established by
Landlord by written notice to Tenant. Landlord shall not be responsible for the
nonperformance by any other Tenant or occupant of the Building of any said rules
and regulations but Landlord shall use reasonable efforts to remedy any
violation of the rules and regulations applicable to any other Building occupant
upon Tenant's request.
SECTION 12. ALTERATIONS:
- ---------- -----------
12.1 Requirements: Tenant shall not make or suffer to be made any
------------
alterations, additions, or improvements in, on, or to the Premises or any part
thereof without first obtaining the prior written consent of Landlord, which
shall not be unreasonably withheld, conditioned or delayed. Any such
alterations, additions, or improvements in, on, or to said Premises, except for
Tenant's movable furniture and equipment, shall immediately become Landlord's
property and, at the end of the term hereof, shall remain on the Premises
without compensation to Tenant. In the event Landlord consents to the making of
any such alterations, additions, or improvements by Tenant, the same shall be
made by Tenant, at Tenant's sole cost and expense, in accordance with plans and
specifications approved by Landlord, and any contractor or person selected by
Tenant to make the same must first be approved in writing by Landlord. In the
event Landlord consents, Landlord agrees to reasonably cooperate with Tenant in
obtaining all necessary building permits and approvals. If the alterations,
additions or improvements shall be made by Landlord for Tenant's account, Tenant
shall reimburse Landlord for the cost thereof within twenty (20) days after
receipt of a statement, setting forth the actual cost of such alterations,
additions or improvements. In any event, Tenant shall pay Landlord an
administrative charge of fifteen percent (15%) of the actual cost of such
alterations, additions or improvements. After the expiration or sooner
termination of the Lease Term and upon demand by Landlord, Tenant shall remove
any or all alterations, additions, or improvements made by or for the account of
Tenant, designated by Landlord to be removed, and Tenant shall repair and
restore the Premises to their original condition, subject to ordinary wear and
tear. Such
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removal, repair and restoration work shall be done promptly and with all due
diligence at Tenant's sole cost and expense. The provisions of this Section 12
shall not apply to the initial Tenant Improvements described in Exhibit C to
this Lease.
12.2 Indemnification of Landlord: Tenant, at its expense, and with
---------------------------
diligence and dispatch, shall procure the cancellation or discharge of all
notices of violation arising from or otherwise connected with alterations, or
any other work, labor, services or materials done for or supplied to Tenant, or
any other person claiming through or under Tenant, which shall be issued by any
public authority having or asserting jurisdiction. Tenant shall defend,
indemnify and save harmless Landlord and any Superior Lessor or Superior
Mortgagee from and against any and all mechanic's and other liens and
encumbrances filed in connection with alterations, or any other work, labor,
services or materials done for or supplied to Tenant, or any person claiming
through or under Tenant, including, without limitation, security interests in
any materials, fixtures or articles so installed in and constituting part of the
Premises and against all costs, expenses and liabilities incurred in connection
with any such lien or encumbrance or any action or proceeding brought thereon.
Tenant, at its expense, shall procure the satisfaction or discharge of record of
all such liens and encumbrances within fifteen (15) days after the filing
thereof. Nothing herein contained shall prevent Tenant from contesting, in good
faith and at its own expense, any notice of violation, or lien provided Tenant
posts for the protection of Landlord security acceptable to Landlord.
SECTION 13. LANDLORD'S AND TENANT'S PROPERTY:
- ---------- --------------------------------
13.1 Landlord's Property: All fixtures, carpeting, equipment,
-------------------
improvements and appurtenances attached to or built into the Premises at the
commencement of or during the term of this Lease, whether or not by or at the
expense of Tenant, shall be and remain a part of the Premises, shall be deemed
the property of Landlord and shall not be removed by Tenant, except as provided
in Section 13.2; provided, that at Landlord's written request given at the time
Tenant requests such alteration or addition to the Premises, Tenant shall, at
its sole expense and upon termination of the Lease, remove those items specified
by Landlord, including any or all fixtures, equipment, improvements,
appurtenances and other personal property, which are deemed herein the property
of Landlord, but not including the initial Tenant Improvements provided by
Landlord pursuant to Exhibit C of this Lease. Tenant's covenant to remove
property specified by Landlord shall survive the termination of this Lease.
13.2 Tenant's Property: All unattached business and trade fixtures,
-----------------
machinery and equipment, communications equipment and office equipment which are
installed in the Premises by or for the account of Tenant without expense to
Landlord and which can be removed without structural damage to the Building and
all furniture, furnishings (excluding window coverings) and other articles of
movable personal property owned by Tenant and located in the Premises (herein
collectively called "Tenant's Property") shall be and remain the property of
Tenant and may be removed by Tenant at any time during the term of this Lease;
provided, that if any of Tenant's Property is removed, Tenant shall repair or
pay the cost of repairing any damage to the Premises or to the Building
resulting from the installation and/or removal thereof. Any equipment or other
property for which Landlord shall have granted any allowance or credit to Tenant
shall be deemed not to have been installed by or for the account of Tenant
without expense to Landlord, shall not be considered Tenant's Property, and
shall be deemed the property of Landlord.
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13.3 Abandonment: Any items of Tenant's Property may be deemed, at the
-----------
option of Landlord, to have been abandoned if left in the Premises after the
abandonment deadline, and in such case such items may be retained by Landlord,
without accountability, in such manner as Landlord shall determine at Tenant's
expense. The abandonment deadline means the earlier of the expiration date of
this Lease, or fifteen (15) days following an earlier termination date, or three
(3) days following entry of an order of possession for restoration of the
Premises to Landlord.
SECTION 14. SERVICES AND UTILITIES:
- ---------- ----------------------
14.1 Building Maintenance: Landlord shall maintain the public and
--------------------
common areas of the Building, such as the lobbies, stairs, elevators, corridors
and rest rooms, the windows in the Building, the mechanical, plumbing and
electrical equipment serving the Building, and the structure itself, in
reasonably good order and condition except for damage occasioned by the act of
the Tenant, which damage shall be repaired by Landlord at Tenant's expense.
14.2 Utilities: To the extent allowed by law, provided the Tenant shall
---------
not be in default hereunder, and subject to the provisions elsewhere herein
contained and to the rules and regulations of the Building, Landlord agrees to
furnish to the Premises (i) heat and air-conditioning required in Landlord's
reasonable judgment for the comfortable use and occupation of the Premises from
7:00 A.M. to 7:00 P.M. on weekdays, exclusive of legal holidays, (ii) continuous
water and electricity service suitable for the intended use of the Premises,
(iii) janitorial services after 6:00 P.M. on weekdays exclusive of legal
holidays in the manner that such services are, in Landlord's reasonable
judgment, customarily furnished in comparable office buildings in the immediate
market area, and (iv) continuous elevator service which shall mean service by
unattended automatic elevators. Landlord shall provide additional or after-
hours heating or air-conditioning at Tenant's request, and Tenant shall pay to
Landlord a reasonable charge for such services as determined by Landlord.
Tenant agrees to keep and cause to be kept closed all window coverings when
necessary because of the sun's position, and Tenant also agrees at all times to
cooperate fully with Landlord and to abide by all the regulations and
requirements which Landlord may prescribe for the proper functioning and
protection of the heating, ventilating, and air-conditioning system. Wherever
heat-generating machines, excess lighting or equipment are used in the Premises
which affect the temperature otherwise maintained by the air-conditioning
system, Landlord reserves the right to install supplementary air-conditioning
units in the Premises, and the cost thereof, including the cost of installation
and the cost of operation and maintenance thereof, shall be paid by Tenant to
Landlord upon demand by Landlord. Any sums payable under Section 14 shall be
considered Additional Rent and may be added to any installment of Base Rent
thereafter becoming due, and Landlord shall have the same remedies for a default
in payment of such sum as for a default in the payment of Base Rent.
14.3 Excess Usage: If Tenant uses excessive amounts of non-metered
------------
utilities or services of any kind because of operation outside of normal
Building hours, high demands from office machinery and equipment, nonstandard
lighting, or any other cause, Landlord may impose a reasonable charge for
supplying such extra utilities services, which charge shall be payable monthly
by Tenant in conjunction with Rent payments. Landlord may install in the
Premises a special meter to measure the amount of water, electric current or
other resource consumed for any such other use. In case of dispute over any
extra charge under this paragraph, Landlord and Tenant shall agree upon a
qualified independent engineer whose decision shall be conclusive on both
parties. The party not
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prevailing in such dispute shall pay the cost of such engineer's determination.
14.4 Disclaimer: Landlord shall not be in default hereunder or be
----------
liable for any damages directly or indirectly resulting from, or by reason of
(i) the installation, use or interruption of use of any equipment in connection
with the furnishing of the foregoing utilities and services, (ii) failure to
furnish or delay in furnishing any such utilities or services when such failure
or delay is caused by acts of God or the elements, labor disturbances of any
character, any other accidents or other conditions beyond the reasonable control
of Landlord, or by the making of repairs or improvements to the Premises or the
Building, or (iii) the limitation, curtailment, rationing or restriction on use
of water or electricity, gas or any other form of energy or any other service or
utility whatsoever serving the Premises or the Building. Furthermore, Landlord
shall be entitled to cooperate voluntarily in a reasonable manner with the
efforts of national, state or local governmental agencies or utilities suppliers
in reducing energy or other resource consumption. Notwithstanding the
foregoing, in the event there is an interruption of utilities or services for
more than three (3) days, Tenant's obligation to pay rent shall abate until such
time as the utilities or services are restored.
14.5 Use of Common Areas and Facilities: All common facilities and
----------------------------------
areas furnished by Landlord in or near the Building, including parking areas,
lighting facilities, pedestrian sidewalks and ramps, landscaped areas, exterior
stairways, rest rooms and other areas and improvements provided by Landlord for
the general use, in common, of tenants, their officers, agents, employees and
customers shall at all times be subject to the exclusive control and management
of Landlord. Without limiting the scope of such discretion, Landlord shall have
the full right and authority to employ all personnel and to establish, modify
and enforce reasonable rules and regulations necessary for the proper operation
and maintenance of common areas and facilities. Landlord shall have the right
to close all or any portion of the common areas or facilities to such extent as,
in the opinion of Landlord's legal counsel, may be legally sufficient to prevent
a dedication thereof or the accrual of any rights to any person (other than
Tenant) or the public therein; and to do and perform such other acts in and to
said areas and improvements as the Landlord shall reasonably determine to be
advisable. All common areas and facilities not within the Premises, which
Tenant may be permitted to use and occupy, are to be used and occupied under a
revocable license, and if the amount of such areas be diminished, Landlord shall
not be subject to any liability nor shall Tenant be entitled to any compensation
or diminution or abatement of Rent, nor shall such diminution of such areas be
deemed constructive or actual eviction.
14.6 Parking Facilities: Intentionally omitted.
------------------
14.7 Signage: Landlord shall provide Tenant, at no additional charge,
-------
Building standard signage. Tenant shall have the right to place exterior
signage on the Building in areas reasonably designated by Landlord and which
signage shall not be unreasonably withheld or conditioned by Landlord. In
granting its consent for exterior signage, Landlord shall have the right to take
into account all governmental requirements and that the Tenant is not the sole
Tenant of the Building.
14.8 Mailbox: Landlord shall furnish Tenant, without additional charge,
-------
a locked mailbox in the Building.
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SECTION 15. ACCESS AND NAME:
- ---------- ---------------
Landlord reserves, and shall at all times have, the right to re-enter
the Premises upon 24 hours' prior notice to Tenant (except in an emergency) to
inspect the same, to supply janitor service and any other service to be provided
by Landlord to Tenant, to show the Premises to prospective purchasers,
mortgagees or tenants, to post notices of nonresponsibility, and to alter,
improve or repair the Premises and any portion of the Building of which the
Premises are a part, without abatement of Rent. For such purpose, Landlord may
erect, use and maintain scaffolding, pipes, conduits and other necessary
structures in and through the Premises where reasonably required by the
character of the work to be performed, provided that entrance to the Premises
and Tenant's exterior and lobby signage shall not be blocked thereby, and
further provided that the business of Tenant shall not be interfered with
unreasonably. Tenant hereby waives any claim for damages for any injury or
inconvenience to or interference with Tenant's business, any loss of occupancy
or quiet enjoyment of the Premises and any other loss occasioned by Landlord's
conduct pursuant to this Section. For each of the purposes stated in this
Section, Landlord shall at all times have and retain a key with which to unlock
all of the doors in, upon and about the Premises, excluding Tenant's vaults and
safes or special security areas (designated in advance). Landlord shall have
the right to use any and all means which Landlord may deem necessary or proper
to open all doors in an emergency, in order to obtain entry to any portion of
the Premises, and any entry to any portion of the Premises obtained by Landlord
by any such means, or otherwise shall not under any circumstances be construed
or deemed to be a forcible or unlawful entry into, or a detainer of, the
Premises, or an eviction, actual or constructive, of Tenant from all or part of
the Premises. Landlord shall also have the right at any time, without the same
constituting an actual or constructive eviction and without incurring any
liability to Tenant, to change the arrangement and/or location of entrances,
lobbies, parking facilities, passageways, doors and doorways, corridors,
elevators, stairs, toilets or other public parts of the Building and to change
the name, number or designation by which the Building is commonly known.
SECTION 16. NOTICE OF OCCURRENCES:
- ---------- ---------------------
Tenant shall give prompt notice to Landlord of: (i) any occurrence in
or about the Premises for which Landlord might be liable; (ii) any fire or other
casualty in the Premises; (iii) any damage to or defect in the Premises
including the fixtures, equipment and appurtenances thereof, for the repair of
which Landlord might be responsible; and (iv) damage to or defect in any part or
appurtenances of the Building's sanitary, electrical, heating, ventilating, air-
conditioning, elevator or other systems located in or passing through the
Premises or any part thereof.
SECTION 17. NONLIABILITY AND INDEMNIFICATION:
- ---------- --------------------------------
17.1 Waiver: Landlord shall not be liable for any loss or damage to
------
person or property sustained by Tenant, or other persons, which may be caused by
theft, or by any act or neglect of any tenant of the Building or by any other
person in or about the Building. Neither Landlord nor any partner, director,
officer, agent, servant or employee of Landlord shall be liable to Tenant for
any loss, injury or damage to Tenant or to any other person, or to its or their
property, irrespective of the cause of such injury, damage or loss except to the
extent caused by or resulting from the intentional torts or gross negligence of
Landlord, it being the intent of the parties that Tenant look to its own all
risk insurance policy for coverage of any such item resulting from an accident
even if caused by the negligence of Landlord. Further,
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neither Landlord nor any partner, director, officer, agent, servant or employee
of Landlord shall be liable: (i) for any such damage caused by other tenants or
persons in, upon or about the Building, or caused by operations in construction
of any private, public or quasi-public work; or (ii) in any event for
consequential damages, including lost profits, of Tenant or any person claiming
through or under Tenant. Tenant shall not be liable for any loss or damage to
person or property sustained by Landlord, or other persons, which may be caused
by theft, or by any act or neglect of any tenant of the Building or by any other
person in or about the Building. Neither Tenant nor any partner, director,
officer, agent, servant or employee of Tenant shall be liable to Landlord for
any loss, injury or damage to Landlord or to any other person, or to its or
their property, irrespective of the cause of such injury, damage or loss except
to the extent caused by or resulting from the intentional torts or gross
negligence of Tenant, it being the intent of the parties that Landlord look to
its own all risk insurance policy for coverage of any such item resulting from
an accident even if caused by the negligence of Tenant. Further, neither Tenant
nor any partner, director, officer, agent, servant or employee of Tenant shall
be liable: (i) for any such damage caused by other tenants or persons in, upon
or about the Building, or caused by operations in construction of any private,
public or quasi-public work; or (ii) in any event for consequential damages,
including lost profits, of Landlord or any person claiming through or under
Landlord. In the event of any conflict between this Section 17.1 and Section
17.2, the terms and provisions of Section 17.2 shall control.
17.2 Indemnification: Tenant shall indemnify and hold harmless Landlord
---------------
and all Superior Lessors and/or Superior Mortgagees and its and their respective
partners, directors, officers, agents and employees from and against any and all
third party claims for bodily injury and/or property damage arising from or in
connection with any accident, injury or damage whatever (even if caused by
Landlord's negligence or breach of this Lease) occurring in, at or upon the
Premises; together with all costs, expenses and liabilities incurred or in
connection with each such claim or action or proceeding brought thereon,
including, without limitation, all reasonable attorneys' fees and expenses at
trial and upon appeal. In the event of any conflict between this Section 17.2
and Section 17.1, the terms and provisions of Section 17.1 shall control.
17.3 Duty to Defend: In case any action or proceeding is brought
--------------
against Landlord and/or any Superior Lessor and/or Superior Mortgagee and/or its
or their partners, directors, officers, agents and/or employees and such claim
is a claim from which Tenant is obligated to indemnify Landlord pursuant to
Section 17.2, Tenant, upon notice from Landlord or such Superior Lessor or
Superior Mortgagee, shall resist and defend such action or proceeding (by
counsel reasonably satisfactory to Landlord). The obligation of Tenant under
this Section 17 shall survive termination of this Lease.
SECTION 18. DAMAGE OR DESTRUCTION:
- ---------- ---------------------
18.1 Casualty: If the Premises or the Building are damaged by fire or
--------
other casualty, Landlord shall forthwith repair the same unless this Lease is
terminated as permitted herein. Within twenty (20) days from the date of such
damage, Landlord shall notify Tenant if the Building is damaged in excess of
twenty-five percent (25%) of the Building's precasualty value, as reasonably
determined by Landlord (damage in excess of such amount being referred to as
"Major Damage" and damage equal to or less than such amount being referred to as
"Minor Damage"). If Major Damage occurs, Landlord by written notice to Tenant
within thirty (30) days from the date of casualty may elect to terminate the
Lease, provided, however,
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<PAGE>
that if Major Damage occurs in the last year of the Lease Term, Tenant shall
have the right to terminate this Lease by written notice to Landlord within
thirty (30) days of the casualty. If Minor Damage occurs then Landlord shall
repair such damage and rebuild that portion of the Building or the Premises
damaged. In the event of Major Damage, if Landlord gives its written notice to
Tenant electing to rebuild or in the event of Minor Damage, this Lease shall
remain in full force and effect provided the repairs are completed within one
hundred eighty (180) days except the Rent shall be reasonably abated during the
period of repair based on that portion of the Premises not reasonably usable by
Tenant. If in the event of Major Damage, Landlord elects by written notice to
Tenant not to rebuild, then this Lease shall automatically terminate as of the
effective date of such notice, the Rent shall be reduced by a proportionate
amount based upon the extent to which said damage interfered with the business
carried on by Tenant in the Premises, and the Tenant shall pay such reduced Rent
up to the date of termination. Landlord agrees to refund to Tenant any Rent
previously paid for any period of time subsequent to such date of termination.
Landlord shall not be required to repair any damage by fire or other cause to
the property of Tenant.
18.2 Condemnation: If more than twenty-five percent (25%) of the Land
------------
and/or Building shall be taken or appropriated under the power of eminent domain
or conveyed in lieu thereof, Landlord shall have the right to terminate this
Lease. If such taking renders the Premises unsuitable for the conduct of
Tenant's business then Tenant shall have the right to terminate this Lease. If
this Lease is terminated, Landlord shall receive (and Tenant shall assign to
Landlord upon demand from Landlord) any and all income, rent, award or any
interest thereon which may be paid or owed in connection with the exercise of
such power of eminent domain or conveyance in lieu thereof, and Tenant shall
have no claim against the agency exercising such power or receiving such
conveyance, for any part of such sum paid by virtue of such proceedings, whether
or not attributable to the value of the unexpired term of this Lease except for
the unamortized value of Tenant Improvements paid for by Tenant and relocation
benefits, if any. If a part of the Land and/or Building shall be so taken or
appropriated or conveyed and Landlord hereto shall elect not to terminate this
Lease, Landlord shall nonetheless receive (and Tenant shall assign to Landlord
upon demand from Landlord) any and all income, rent, award or any interest
thereon paid or owed in connection with such taking, appropriation or
conveyance; and if the Premises have been damaged as a consequence of such
partial taking or appropriation or conveyance, Landlord shall restore the
Premises and this Lease shall remain in full force and effect except that Tenant
shall be entitled to an appropriate reduction in Rent while such restoration is
being made by Landlord. Such proportionate reduction shall be based upon the
extent to which the restoration being made by Landlord shall interfere with the
business carried on by Tenant in the demised Premises. Landlord will not be
required to repair or restore any injury or damage to the property of Tenant.
SECTION 19. SURRENDER AND HOLDING OVER:
- ---------- --------------------------
19.1 General: On the last day of the term of this Lease, or upon re-
-------
entry by Landlord upon the Premises, Tenant shall quit and surrender the
Premises to Landlord "broom-clean" and in good order, condition and repair,
except for ordinary wear and tear in accordance with the provisions of Section
13 of this Lease.
19.2 Surrender: No agreement relating to the surrender of the Premises
---------
by Tenant shall be valid unless in writing and signed by Landlord.
19.3 Holding Over with Consent: Any holding over after the
-------------------------
expiration of the term of this Lease with the written consent of
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Landlord shall be a tenancy from month to month which tenancy may be terminated
by either party by delivering thirty (30) days written notice prior to the end
of any monthly period. The terms, covenants and conditions of such tenancy shall
be the same as provided herein, and the monthly Rent shall be an amount equal to
one hundred twenty-five percent (125%) of the amount of monthly Rent paid during
the last month prior to the holding over, subject to adjustment as provided in
Section 4 herein. Acceptance by Landlord of Rent after such expiration shall not
result in any other tenancy or any renewal of the term of this Lease, and the
provisions of this Section are in addition to and do not affect Landlord's right
of re-entry or other rights provided under this Lease or by applicable law.
19.4 Holding Over Without Consent: If Tenant shall retain possession
----------------------------
of the Premises or any part thereof without Landlord's consent following the
expiration or sooner termination of this Lease for any reason, then Tenant shall
pay to Landlord for each day of such retention 150% of the amount of the daily
Rent for the last period prior to the date of such expiration or termination,
subject to adjustment as provided in Section 4. Tenant shall also indemnify and
hold Landlord harmless from any loss or liability resulting from delay by Tenant
in surrendering the Premises, including, without limitation, any claims made by
any succeeding tenant founded on such delay. Alternatively, if Landlord gives
notice to Tenant of Landlord's election thereof, such holding over shall
constitute renewal of this Lease for a period from month to month which tenancy
may be terminated by either party by delivering thirty (30) days written notice
prior to the end of any monthly period. Acceptance of Rent by Landlord
following expiration or termination shall not constitute a renewal of this
Lease, and nothing contained in this Section shall waive Landlord's right of re-
entry or any other right. Unless Landlord exercises the option hereby given to
it, Tenant shall be only a Tenant at sufferance, whether or not Landlord accepts
any Rent from Tenant while Tenant is holding over without Landlord's written
consent.
SECTION 20. EVENTS OF DEFAULT:
- ---------- -----------------
20.1 Events of Default: The occurrence of any one or more of the
-----------------
following events of default shall constitute a breach of this Lease by Tenant:
20.1.1 If Tenant shall default in the payment of any security
deposit, Base Rent or Additional Rent, and such default shall continue for three
(3) days after the due date, provided, however, that the Tenant shall have ten
(10) days to cure such default for the first such notice of default during any
twelve (12) month period; or
20.1.2 If Tenant shall, whether by action or inaction, be in default
of any of its obligations under this Lease (other than a default in the payment
of Base Rent or Additional Rent) and such default shall continue and not be
remedied within fifteen (15) days after Landlord shall have given to Tenant a
notice specifying the same, or, in the case of a default which cannot with due
diligence be cured within such time period and the continuance of which for the
period required for cure will not subject Landlord or any Superior Lessor to
prosecution for a crime or termination of any Superior Lease or foreclosure of
any Superior Mortgage, if Tenant shall not, (i) within such time period advise
Landlord of Tenant's intention to take all steps necessary to remedy such
default; (ii) duly commence within such time period, and thereafter diligently
prosecute to completion all steps necessary to remedy the default; and (iii)
complete such remedy within a reasonable time after the date of said notice of
Landlord; or
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LEASE AGREEMENT
<PAGE>
20.1.3 If any event shall occur or any contingency shall arise
whereby this Lease or the estate hereby granted or the unexpired balance of the
term hereof would, by operation of law or otherwise, devolve upon or pass to any
person, firm or corporation other than Tenant, except as expressly permitted by
Section 9; or
20.1.4 If Tenant shall vacate or abandon the Premises; or
20.1.5 If Tenant or any guarantor of Tenant's obligations shall make
a general assignment for the benefit of creditors, or shall be unable to pay its
debts as they become due, or shall file a petition in bankruptcy, or shall be
adjudicated as bankrupt or insolvent, or shall file a petition seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future statute, law or regulation, or
shall file an answer admitting or shall fail timely to contest the material
allegations of a petition filed against it in any such proceeding, or shall seek
or consent to or acquiesce in the appointment of any trustee, receiver or
liquidator of Tenant or any material part of its properties; or
20.1.6 If within ninety (90) days after the commencement of any
proceeding against Tenant or any guarantor of this Lease seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future statute, law or regulation, such
proceeding shall not have been dismissed or if, within ninety (90) days after
the appointment without the consent or acquiescence of Tenant of any trustee,
receiver or liquidator of Tenant or of any material part of its properties, such
appointment shall not have been vacated; or
20.1.7 If this Lease or any estate of Tenant or any guarantor of
this Lease hereunder shall be levied upon under any attachment or execution and
such attachment or execution is not vacated within ten (10) days.
SECTION 21. REMEDIES UPON DEFAULT:
- ---------- ---------------------
21.1 Remedies: Upon the occurrence of an event of default constituting
--------
a breach of this Lease under Section 20, Landlord may exercise any one or more
of the remedies set forth in this Section 21 or in Section 24, or any other
remedy available under applicable law or contained in this Lease.
21.1.1 Landlord or Landlord's agents and employees may immediately
or at any time thereafter to the extent permitted by law re-enter the Premises,
or any part thereof, either by summary eviction proceedings or by any suitable
action or proceeding at law, or by force or otherwise, without being liable to
indictment, prosecution or damages therefor, and may repossess the same, and may
remove any person therefrom, to the end that Landlord may have, hold and enjoy
the Premises.
21.1.2 Landlord at its option may relet the whole or any part of the
Premises from time to time, either in the name of the Landlord or otherwise, to
such tenants, for such terms ending before, on or after the expiration date of
the Lease Term, at such rentals and upon such other conditions (including
concessions, tenant improvements, and free rent periods) as Landlord may
determine to be appropriate. Landlord at its option may make such physical
changes to the Premises as Landlord considers advisable or necessary in
connection with any such reletting or proposed reletting, without relieving
Tenant of any liability under this Lease or otherwise affecting Tenant's
liability. If there is other unleased space in the Building, Landlord may lease
such other space without prejudice to its remedies against Tenant.
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<PAGE>
21.1.3 Whether or not Landlord retakes possession or relets the
Premises, Landlord shall have the right to recover unpaid rent and all damages
caused by the default as well as all costs and expenses incurred in connection
with the enforcement of this Lease, including reasonable attorney fees and court
costs. Damages shall include, without limitation: (i) all rentals lost; (ii)
all reasonable legal expenses and other related costs incurred by Landlord
following Tenant's default; (iii) all costs incurred by Landlord in restoring
the Premises to good order and condition, or in remodeling, renovating or
otherwise preparing the Premises for reletting; and (iv) all costs incurred by
Landlord in reletting the Premises, including, without limitation, any brokerage
commissions and the value of Landlord's time.
21.1.4 To the extent permitted under Colorado law, Landlord may sue
periodically for damages as they accrue without barring a later action for
further damages. Landlord may in one action recover accrued damages plus
damages attributable to the remaining Lease Term equal to the difference between
the rent reserved in this Lease (including an estimated amount of Additional
Rent as determined by Landlord) for the balance of the Lease Term after the time
of award, and the fair rental value of the Premises for the same period
(including an estimated amount of Additional Rent), discounted to the time of
award at the rate of nine percent (9%) per annum. If Landlord has relet the
Premises for the period which otherwise would have constituted the unexpired
portion of the Lease Term or any part, the amount of rent reserved upon such
reletting shall be deemed, prima facie, to be the fair and reasonable rental
value for the part or the whole of the Premises so relet during the term of the
reletting.
21.1.5 To seize and dispose of Tenant's Property (as that term is
defined in Section 13.2) in any manner permitted by law.
21.2 Cumulative Remedies: The remedies provided for in this Lease are
-------------------
cumulative and are not intended to be exclusive of any other remedies to which
Landlord may lawfully be entitled at any time, and Landlord may invoke any
remedy allowed at law or in equity, including an action for specific
performance, as if specific remedies were not provided for herein. In the event
of a breach or threatened breach by Tenant of any of its obligations under this
Lease, Landlord shall also have the right to obtain an injunction and any other
appropriate equitable relief.
21.3 Termination: Even though Tenant has breached this Lease, the Lease
-----------
shall continue in effect for so long as Landlord does not terminate Tenant's
possession of the Premises or Tenant does not abandon the Premises. Even after
Tenant is no longer in possession of the Premises, Tenant shall have continuing
contractual liability under the Lease, and Landlord may enforce its rights and
remedies under this Lease in the event of a breach, including the right to
recover its damages for loss of Rent for the remainder of the Lease Term after
Tenant is dispossessed of the Premises. Acts of maintenance or preservation or
efforts to relet the Premises or the appointment of a receiver upon initiative
of Landlord to protect Landlord's interest under this Lease shall not constitute
a termination of Tenant's contractual liability under the Lease unless written
release of liability is given by Landlord to Tenant.
21.4 Interest on Damages: In addition to any other remedies Landlord
-------------------
may have under this Lease, and without reducing or adversely affecting any of
Landlord's rights and remedies under this Section 21, if any Base Rent,
Additional Rent or damages payable hereunder by Tenant to Landlord are not paid
within ten (10) days after demand therefor or the date on which the same is due,
the same shall bear interest at the annual rate of fifteen
22
LEASE AGREEMENT
<PAGE>
percent (15%) or the maximum rate permitted by law, whichever is less,
calculated monthly from the due date thereof until paid, and the amount of such
interest shall be included as Additional Rent.
SECTION 22. SERVICES IN THE EVENT OF DEFAULT:
- ---------- --------------------------------
To the extent permitted by law, in addition to any rights and remedies
which Landlord may have under this Lease, if there shall be a default hereunder
by Tenant which shall not have been remedied within the applicable grace period,
Landlord shall not be obligated to furnish Tenant or the Premises any heat,
ventilation or air-conditioning services outside of business hours on business
days, or any extra or additional cleaning services; and the discontinuance of
any one or more such services shall be without liability by Landlord to Tenant
and shall not reduce, diminish or otherwise affect any of Tenant's covenants and
obligations under this Lease.
SECTION 23. NO WAIVERS OF PERFORMANCE:
- ---------- -------------------------
The failure of either party to insist in any one or more instances upon the
strict performance of any one or more of the obligations of this Lease, or to
exercise any election herein contained, shall not be construed as a waiver or
relinquishment for the future of the performance of such one or more obligations
or any other obligations of this Lease or of the right to exercise such
election, but the same shall continue and remain in full force and effect with
respect to any subsequent breach, act or omission. The receipt by Landlord of
Rent with knowledge of a breach by Tenant of any obligation of this Lease shall
not be deemed a waiver of such breach.
SECTION 24. CURING TENANT'S DEFAULTS:
- ---------- ------------------------
All covenants and agreements to be performed by the Tenant under any
of the terms of this Lease shall be performed by Tenant at Tenant's sole cost
and expense and without any abatement of Rent except as expressly provided
otherwise herein. If the Tenant shall fail to pay any sum of money, other than
Rent, required to be paid by it hereunder or shall fail to perform any other act
on its part to be performed hereunder, and such failure shall continue for the
periods referred to in Section 20 hereof after notice thereof by the Landlord,
the Landlord may make any such payment or perform any such act on the Tenant's
part to be made or performed as in this Lease provided but shall not be
obligated so to do. Any such payment or performance shall not be a waiver or
release of Tenant's obligations. All sums so paid by the Landlord and all
necessary incidental costs together with interest thereon at the rate specified
in Section 21.4 from the date of such payment by the Landlord shall be payable
as Additional Rent to the Landlord on demand, and the Tenant covenants to pay
any such sums, and the Landlord shall have, in addition to any other right or
remedy of the Landlord, the same rights and remedies in the event of the
nonpayment thereof by the Tenant as in the case of default by the Tenant in the
payment of the Rent.
SECTION 25. BROKER:
- ---------- ------
Tenant covenants, warrants and represents that no broker except as
provided in the Basic Lease Information (the "Broker") was instrumental in
bringing about or consummating this Lease and that Tenant had no conversations
or negotiations with any broker except the Broker concerning the leasing of the
Premises. Tenant agrees to indemnify and hold harmless Landlord against and
from any claims for any brokerage commissions and all costs, expenses and
liabilities in connection therewith, including, without limitation, attorney
fees and expenses, arising out of any conversations or negotiations had by
Tenant with any broker other than the Broker.
23
LEASE AGREEMENT
<PAGE>
Landlord shall pay any brokerage commissions due the Broker as per a separate
agreement between Landlord and the Broker. Landlord covenants, warrants and
represents that no broker other than the Broker was instrumental in bringing
about or consummating this Lease. Landlord agrees to indemnify and hold harmless
Tenant against and from any claims for any brokerage commissions and all costs,
expenses and liabilities in connection therewith, including, reasonable
attorney's fees and expenses, arising out of any brokerage claims which the
Landlord is obligated to pay.
SECTION 26. NOTICES:
- ---------- -------
Any notice, statement, demand, consent, approval or other communication
required or permitted to be given, rendered or made by either party to the
other, pursuant to this Lease or pursuant to any applicable law or requirement
of public authority, shall be in writing (whether or not so stated elsewhere in
this Lease). Notices shall be deemed to have been properly given, rendered or
made: if delivered in person to the Landlord or Tenant and receipt is
acknowledged; or, if sent postage prepaid by registered or certified mail,
return receipt requested, effective forty-eight (48) hours after posted in a
United States post office station or letter box in the continental United
States, addressed to the other party at the address designated by the party
(except that after the Commencement Date, Tenant's address, unless Tenant shall
give notice to the contrary, shall be the Building). Either party may, by notice
as aforesaid, designate a different address or addresses for notices,
statements, demands, consents, approvals or other communications intended for
it.
SECTION 27. ESTOPPEL CERTIFICATES:
- ---------- ---------------------
Tenant agrees, at any time and from time to time, as requested by Landlord
with not less than ten (10) days' prior notice, to execute and deliver to
Landlord a statement certifying that this Lease is unmodified and in full force
and effect (or if there have been modifications, that the same is in full force
and effect as modified and stating the modifications), certifying the dates to
which the Base Rent and Additional Rent have been paid, stating whether or not,
to the best knowledge of the signer, the Landlord is not in default in
performance of any of its obligations under this Lease, and, if so, specifying
each such default of which the signer shall have knowledge, and stating whether
or not, to the best knowledge of the signer, any event has occurred which with
the giving of notice or passage of time, or both, would constitute such a
default, and, if so, specifying each such event, it being intended that any such
statement delivered pursuant hereto shall be deemed a representation and
warranty to be relied upon by the Landlord and by others with whom the Landlord
may be dealing, regardless of independent investigation. Tenant also shall
include in any such statement such other information concerning this Lease as
Landlord may reasonably request. If Tenant fails to respond within fifteen (15)
days of receipt by Tenant of a written request for such a statement, the Tenant
shall be deemed to have given such statement and shall be deemed to have
admitted the accuracy of any information contained in the request for such
statement and that the Lease is unmodified and in full force and effect, that
there are not uncured defaults in Landlord's performance, and that not more than
one (1) month's Rent has been paid in advance.
SECTION 28. MEMORANDUM OF LEASE:
- ---------- -------------------
Tenant shall not record this Lease or any memorandum of this Lease. Any
such recordation shall be deemed to be an event of default under this Lease.
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<PAGE>
SECTION 29. RELOCATION OF PREMISES:
- ---------- ----------------------
In the event Landlord requires the Premises for use in conjunction with
another suite or other reasons connected with the Building leasing program,
Landlord shall have the right, after first giving sixty (60) days' written
notice to Tenant to move the Tenant to another space of similar size within the
Building. Tenant's failure to cooperate in such a relocation shall constitute a
material breach of this Lease giving the Landlord the right to terminate
Tenant's possession of the Premises pursuant to Section 21, and to recover the
amounts stated in Section 19.4 for holding over without the Landlord's consent.
Such move shall be at the sole cost and expense of Landlord, including but not
limited to all costs and expenses related to improving the space with leasehold
improvements equal to those then in the Premises, moving the furniture, office
equipment and other contents of the Premises to the new space, reinstating
telecommunications equipment, printing of new stationery, business cards and
other printed matter bearing the address of the Tenant and such other expenses
as Tenant may reasonably incur, it being the intention of the parties that
Tenant incur no cost or expense as a result of the move. After such move, all
terms and conditions of this Lease shall remain in full force and effect, save
and excepting that the Premises shall be the new space. Notwithstanding anything
herein to the contrary, the provisions of this Section 29 shall only apply to
floors which are multi-tenant floors partially occupied by Tenant; provided,
however, that Landlord shall have no right to relocate Tenant from the first
floor even though the first floor is a multi-tenant floor.
SECTION 30. ADJUSTMENT OF COMMENCEMENT AND EXPIRATION DATES:
- ---------- -----------------------------------------------
30.1 Commencement Date: The term of this Lease shall commence on a
-----------------
date (herein the "Commencement Date") which shall be the date specified in the
Basic Lease Information unless:
30.1.1 Landlord notifies Tenant of an earlier or later Commencement
Date at least thirty (30) days in advance; or
30.1.2 Tenant actually occupies the Premises earlier than the date
specified in the Basic Lease Information or any notice given pursuant to Section
30.1.1, in which event the occupancy date shall be the Commencement Date.
30.2 Tenant Obligations: If the Premises are not ready for Tenant's
------------------
occupancy by the Commencement Date (as specified in the Basic Lease Information)
due to the fault of the Landlord or due to the occurrence of an event of force
majeure, the Base Rent and Additional Rent payable hereunder shall be abated for
the time period of such delay. Tenant shall be considered to have caused any
delay in the preparation of the Premises resulting from Tenant's failure to sign
this Lease on or before the Construction Information Submittal Date specified in
the Basic Lease Information or, in the alternative, to provide Landlord by such
date a written agreement in form and content satisfactory to Landlord
guarantying Tenant will pay Landlord for any and all costs incurred in
connection with the work done prior to execution of this Lease to prepare the
Premises for Tenant. If the Tenant Improvements are not completed on the
Commencement Date due to (i) the failure of Tenant to fulfill any obligation
pursuant to the terms of this Lease or any exhibit hereto, including without
limitation Tenant's failure to comply with the Construction Information
Submittal and Construction Approval Dates specified in the Basic Lease
Information; or (ii) any changes in the Tenant Improvements requested by Tenant,
then Tenant shall not be entitled to any abatement of Rent due to such delay.
30.3 Tenant Termination Rights: Intentionally deleted.
-------------------------
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<PAGE>
30.4 Expiration Date: In the event the Commencement Date is adjusted
---------------
to a date other than as specified in the Basic Lease Information, the Expiration
Date shall be extended as necessary so that the Lease Term will contain the
number of full calendar months indicated in the Rent Schedule of the Basic Lease
Information and so that the Expiration Date will fall on the last day of a
calendar month.
30.5 Early Occupancy: Intentionally deleted.
---------------
SECTION 31. MISCELLANEOUS:
- ---------- -------------
31.1 Merger: All understandings and agreements heretofore had between
------
the parties are merged in this Lease and any other written agreement(s) made
concurrently herewith, which alone fully and completely express the agreement of
the parties and which are entered into after full investigation, neither party
relying upon any statement or representation not embodied in this Lease or any
other written agreement(s) made concurrently herewith.
31.2 Modifications: No agreement shall be effective to change, modify,
-------------
waive, release, discharge, terminate or effect an abandonment of this Lease, in
whole or in part, unless such agreement is in writing, refers expressly to this
Lease and is signed by the party against whom enforcement is sought. If Tenant
shall at any time request Landlord to sublet the Premises for Tenant's account,
Landlord or its agent is authorized to receive the keys for such purposes
without releasing Tenant from any of its obligations under this Lease, and
Tenant hereby releases Landlord of any liability for loss or damage to any of
the Tenant's Property in connection with such subletting.
31.3 Successors and Assigns: Except as otherwise expressly provided
----------------------
in this Lease, the obligations of this Lease shall bind and benefit the
successors and assigns of the parties hereto with the same effect as if
mentioned in each instance where a party is named or referred to; provided,
however, that: (i) no violation of the provisions of Section 9 shall operate to
vest any rights in any successor or assignee of Tenant; and (ii) the provisions
of this Section shall not be construed as modifying the provisions of Sections 9
or 20.
31.4 Nonrecourse Lease: Tenant shall look only to Landlord's estate
-----------------
and property in the Land and the Building (or the proceeds thereof) for the
satisfaction of Tenant's remedies for the collection of a judgment (or other
judicial process) requiring the payment of money by Landlord in the event of any
default by Landlord hereunder, and no other property or assets of Landlord or
its partners or principals, disclosed or undisclosed, shall be subject to levy,
execution or other enforcement procedure for the satisfaction of Tenant's
remedies under or with respect to this Lease, the relationship of Landlord and
Tenant hereunder or Tenant's use or occupancy of the Premises.
31.5 Force Majeure: The obligations of Tenant hereunder shall be in no
-------------
way affected, impaired or excused, nor shall Landlord have any liability
whatsoever to Tenant, because:
31.5.1 Landlord is unable to fulfill, or is delayed in fulfilling,
any of its obligations under this Lease by reason of strike, other labor
trouble, governmental pre-emption of priorities or other controls in connection
with a national or other public emergency or shortages of fuel, supplies or
labor resulting therefrom, or any other cause, whether similar or dissimilar,
beyond Landlord's reasonable control; or
31.5.2 of any failure or defect in the supply, quantity or character
of electricity, water or other utilities furnished to
26
LEASE AGREEMENT
<PAGE>
the Premises, by reason of any requirement, act or omission of the public
utility or others serving the Building with electric energy, steam, oil, gas or
water, or for any other reason whether similar or dissimilar, beyond Landlord's
reasonable control.
31.6 Definitions: For the purpose of this Lease, the following terms
-----------
have the meanings indicated:
31.6.1 The term "mortgage" shall include a mortgage and/or deed of
trust, and the term "holder of a mortgage" or "mortgagee" or words of similar
import shall include a mortgagee of a mortgage or a beneficiary of a deed of
trust.
31.6.2 The term "laws and requirements of any public authorities"
and words of similar import shall mean laws and ordinances of any or all of the
federal, state, city, town, county, borough and village governments and rules,
regulations, orders and directives of any and all departments, subdivisions,
bureaus, agencies or offices thereof, and of any other governmental, public or
quasi-public authorities having jurisdiction over the Building and/or the
Premises, and the direction of any public officer pursuant to law, whether now
or hereafter in force.
31.6.3 The term "requirements of insurance bodies" and words of
similar import shall mean rules, regulations, orders and other requirements of
the Insurance Services Office and/or any other similar body performing the same
or similar functions and having jurisdiction or cognizance over the Building
and/or the Premises, whether now or hereafter in force.
31.6.4 The term "Tenant" shall mean the Tenant herein named or any
assignee or other successor in interest (immediate or remote) of the Tenant
herein named, which at the time in question is the owner of the Tenant's estate
and interest granted by this Lease; but the foregoing provisions of this
subsection shall not be construed to permit any assignment of this Lease or to
relieve the Tenant herein named or any assignee or other successor in interest
(whether immediate or remote) of the Tenant herein named from the full and
prompt payment, performance and observance of the covenants, obligations and
conditions to be paid, performed and observed by Tenant under this Lease.
31.6.5 The term "Land" shall mean the real property lot or parcel
upon which the Building is located including without limitation parking areas,
landscaped areas, walkways, driveways, sidewalks and curbs.
31.6.6 The term "Landlord" shall mean only the owner at the time in
question of the Building or of a lease of the Building, so that in the event of
any transfer or transfers of title to the Building or of Landlord's interest in
a lease of the Building, the transferror shall be and hereby is relieved and
freed of all obligations of Landlord under this Lease accruing after such
transfer, and it shall be deemed without further agreement that such transferee
has assumed and agreed to perform and observe all obligations of Landlord herein
during the period it is the holder of Landlord's interest under this Lease.
31.6.7 The term "herein," "hereof" and "hereunder," and words of
similar import, shall be construed to refer to this Lease as a whole, and not to
any particular Section, unless expressly so stated.
31.6.8 The term "and/or" when applied to two or more matters or
things shall be construed to apply to any one or more or all thereof as the
circumstances warrant at the time in question.
27
LEASE AGREEMENT
<PAGE>
31.6.9 The term "person" shall mean natural person or persons, a
partnership, a corporation and any other form of business or legal association
or entity.
31.7 Effect of Expiration: Upon the expiration or other termination
--------------------
of this Lease, neither party shall have any further obligation or liability to
the other except as otherwise expressly provided in this Lease and except for
such obligations as by their nature or under the circumstances can only be, or
by the provisions of this Lease, may be, performed after such expiration or
other termination; and, in any event, unless otherwise expressly provided in
this Lease, any liability for a payment (including, without limitation,
Additional Rent, herein) which shall have accrued to or with respect to any
period ending at the time of expiration or other termination of this Lease shall
survive the expiration or other termination of this Lease.
31.8 Modifications for Superior Mortgagee: If any Superior Mortgagee
------------------------------------
shall require any modification(s) of this Lease, Tenant upon ten (10) days'
prior written notice of Landlord's request, shall execute and deliver to
Landlord such instruments effecting such modification(s) as Landlord shall
reasonably require, provided that such modification(s) do not adversely affect
in any material respect any of Tenant's rights under this Lease.
31.9 Excavation: If an excavation shall be made upon land adjacent to
----------
or under the Building, or shall be authorized to be made, Tenant shall afford to
the person causing or authorized to cause such excavation, license to enter the
Premises for the purpose of performing such work as said person shall deem
necessary or desirable to preserve and protect the Building from injury or
damage and to support the same by proper foundations, and without reducing or
otherwise affecting Tenant's obligations under this Lease.
31.10 Union Contracts: Tenant agrees that the exercise of its rights
---------------
pursuant to the provision of Section 12 or of any other provisions of this Lease
or the Exhibits hereto shall not be done in a manner which would violate
Landlord's union contracts affecting the Land and/or Building, nor create any
lawful work stoppage, picketing, labor disruption or dispute or any interference
with the business of Landlord or any tenant or occupant of the Building.
31.11 Prorations: Any apportionments or prorations of Base Rent or
----------
Additional Rent to be made under this Lease shall be computed on the basis of a
three hundred sixty (360) day year, with twelve (12) months of thirty (30) days
each.
31.12 Governing Law: Regardless of the place of execution or
-------------
performance, this Lease shall be governed by and construed in accordance with
the laws of the State of Colorado. If any provision of this Lease or the
application thereof to any person or circumstance shall, for any reason and to
any extent, be invalid or unenforceable, the remainder of this Lease and the
application of that provision to other persons or circumstances shall not be
affected but rather shall be enforced to the extent permitted by law. The table
of contents, captions, heading and titles in this Lease are solely for
convenience or reference and shall not affect its interpretation. Each
covenant, agreement, obligation or other provision of this Lease on Tenant's
part to be performed, shall be deemed and construed as a separate and
independent covenant of Tenant, not dependent on any other provision of this
Lease. All terms and words used in this Lease, regardless of the number or
gender in which they are used, shall be deemed to include any other number and
any other gender as the context may require. Time is of the essence of this
Lease and all of its provisions.
28
LEASE AGREEMENT
<PAGE>
31.13 Light Air and View: Any diminution or shutting off of light,
------------------
air or view by any structure which may be erected on lands adjacent to or near
the Building shall in no way affect this Lease or impose any liability on
Landlord.
31.14 Tenant Representations: If Tenant is a corporation, each person
----------------------
executing this Lease on behalf of Tenant does hereby covenant and warrant that:
31.14.1 Tenant is duly incorporated and validly existing under the
laws of its state of incorporation, and, if such corporation is existing under
the laws of a jurisdiction other than Colorado, qualified to transact business
in Colorado;
31.14.2 Tenant has full corporate right and authority to enter into
this Lease and to perform all Tenant's obligations hereunder; and
31.14.3 Each person (and both of the persons if more than one
signs) signing this Lease on behalf of the corporation is duly and validly
authorized to do so.
31.15 Defined Terms: Words capitalized other than as the first word of
-------------
a sentence are defined terms and have the meaning, throughout this Lease, given
to them when they are first used with an initial capital or when used in
quotation marks.
31.16 Counterparts: This Lease may be executed in one or more
------------
counterparts by separate signature, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument, binding
on all parties hereto, even though all parties are not signatories to the
original or to the same counterpart. Any counterpart of this Lease that has
attached to it separate signature pages, which together contain the signatures
of all parties, shall for all purposes be deemed a fully executed instrument,
and in making proof of this Lease, it shall not be necessary to produce or
account for more than one such counterpart.
31.17 Costs and Attorney Fees:
-----------------------
31.17.1 No Suit or Action Filed. Tenant agrees to pay Landlord for
-----------------------
all costs and expenses, including reasonable attorneys' fees, in any court
action brought by Landlord to recover any rent due and unpaid under the terms
hereof, or for the breach of any of the terms and conditions herein contained,
or to recover possession of the Premises, whether or not such court action or
actions shall proceed to judgment.
31.17.2 Arbitration or Mediation; Trial and Appeal. If any
------------------------------------------
arbitration, mediation, or other proceeding is brought in lieu of litigation, or
if legal action is instituted to enforce or interpret any of the terms of this
Lease or if legal action is instituted in a Bankruptcy Court for a United States
District Court to enforce or interpret any of the terms of this Lease, to seek
relief from an automatic stay, to obtain adequate protection, or to otherwise
assert the interest of Landlord in a bankruptcy proceeding, the party not
prevailing shall pay the prevailing party's costs and disbursements, the fees
and expenses of expert witnesses in determining reasonable attorney fees, and
such sums as the court may determine to be reasonable for the prevailing party's
attorney fees connected with the trial and any appeal and by petition for review
thereof.
31.17.3 Definitions. For purposes of this Lease, the term attorney
-----------
fees includes all charges of the prevailing party's attorneys and their staff
(including without limitation legal assistants, paralegals, word processing, and
other support personnel) and any postpetition fees in a bankruptcy court. For
29
LEASE AGREEMENT
<PAGE>
purposes of this Lease, the term fees and expenses includes but is not limited
to long-distance telephone charges; expenses of facsimile transmission; expenses
for postage (including costs of registered or certified mail and return
receipts), express mail, or parcel delivery; mileage and all deposition charges,
including but not limited to court reporters' charges, appearance fees, and all
costs of transcription; costs incurred in searching records.
31.18 Effect of Failure to Consent: The parties acknowledge that the
----------------------------
obligation of good faith and fair dealing generally applies to this Lease
requiring each party to act reasonably except to the extent explicitly and
specifically provided otherwise in this Lease. If either party unreasonably
withholds or conditions a requested consent or demands payment of an
unreasonable sum, the other party shall not be entitled to any damages for the
unreasonableness, it being intended that the sole remedy shall be to proceed as
if the unreasonable party had responded reasonably.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease
Agreement as of the date and year first above written.
LANDLORD: TENANT:
KESEF, LLC COLORADO BUSINESS
BANKSHARES, INC.
By: /s/ Evan Makovsky By: /s/ Richard J. Dalton
----------------------- -----------------------
Evan Makovsky, Manager
Richard J. Dalton
-----------------------
(Print Name)
EVP/CFO
-----------------------
(Title)
30
LEASE AGREEMENT
<PAGE>
EXHIBIT A
---------
LEASE AGREEMENT
---------------
Legal Description for Land
--------------------------
Lots 12, 13, 14, 15 and 16, Block 128, East Denver, City and County of
Denver, State of Colorado.
EXHIBIT A, 29 - Legal Description
---------
<PAGE>
EXHIBIT B
---------
LEASE AGREEMENT
---------------
Floor Plan for the Building
---------------------------
EXHIBIT B, 1 - Floor Plan of Building
---------
<PAGE>
FLOOR PLAN FOR THE BUILDING 9TH FLOOR
<PAGE>
FLOOR PLAN FOR THE BUILDING 8TH FLOOR
<PAGE>
FLOOR PLAN FOR THE BUILDING 4TH - 7TH FLOOR
<PAGE>
FLOOR PLAN FOR THE BUILDING 3RD FLOOR
<PAGE>
FLOOR PLAN FOR THE BUILDING 2ND FLOOR
<PAGE>
FLOOR PLAN FOR THE BUILDING FIRST FLOOR
<PAGE>
FLOOR PLAN FOR THE BUILDING BASEMENT
<PAGE>
EXHIBIT C
---------
LEASE AGREEMENT
---------------
Work Agreement
--------------
Section 1. TENANT IMPROVEMENTS PROVIDED BY LANDLORD. Landlord agrees to
- --------- ----------------------------------------
provide the core and shell improvements to the Premises as set forth on the
drawings prepared by RNL Design designated as 2-7838.10 and 7838.08 (the
"Approved Plans"), at the Landlord's sole cost and expense. The Landlord shall
also contract with Sprung Construction to perform all of the tenant finish set
forth on the said drawings and the Tenant shall reimburse the Landlord for the
cost of the tenant finish, to the extent that the tenant finish exceeds the
allowance set forth in Section 4.1 below, within fifteen (15) days of receipt of
a written invoice from the Landlord.
Section 2. ADDITIONAL TENANT IMPROVEMENTS PROVIDED BY LANDLORD.
- --------- ---------------------------------------------------
Intentionally deleted.
Section 3. ADDITIONAL TENANT IMPROVEMENTS AT TENANT'S EXPENSE.
- --------- --------------------------------------------------
Intentionally deleted.
Section 4. TENANT IMPROVEMENT ALLOWANCES PROVIDED BY LANDLORD.
- --------- --------------------------------------------------
4.1 Allowances: Landlord agrees to provide the following dollar
----------
allowances for Non-Building-Standard Tenant Improvements in the Premises at
Landlord's sole cost and expense: $15.00 per square foot to be utilized by
Tenant in Landlord's reasonable discretion throughout the Premises being
remodeled.
4.2 Application: Each dollar allowance may be applied only to the
-----------
specified Tenant Improvement item. All costs incurred by Landlord relating to
each item shall be deducted from the allowance.
Section 5. DESIGN OF TENANT IMPROVEMENTS.
- --------- -----------------------------
5.1 Intentionally deleted.
5.2 Intentionally deleted.
5.3 Rentable Area Definition. The amount of rentable area shall be 112%
------------------------
of the usable area located on a single-tenant floor and 120% of the usable area
located on a multi-tenant floor. Usable area on multi-tenant floors shall be
computed by measuring to the finished surface of the office-side of corridors
and other permanent walls, to the center of partitions that separate the
Premises from adjoining office suites, and to the inside finished surfaces of
the dominant portion of the permanent outer building walls. The usable area of
a multi-tenant floor shall be equal to the sum of all usable areas on that
floor. Usable area on single-tenant floors shall be computed by measuring to
the inside finished surfaces of the dominant portion of the permanent outer
building walls, excluding any major vertical penetrations of the floor such as
elevators. No deductions shall be made for columns and projections necessary to
the Building when calculating the usable area on any floor of the Building. The
precise amount of the rentable area in the Premises indicated in the approved
CDP
EXHIBIT C, 1 - Work Agreement
---------
<PAGE>
shall be controlling in the event of any variance from the approximate rentable
area specified in the Basic Lease Information. Base Rent, Tenant's Percentage,
the number of parking spaces, if any, available to Tenant and any similar item
based upon the size of the Premises shall be adjusted to reflect the precise
rentable area in the Premises determined by the approved CDP. If Landlord gives
Tenant notice of an adjustment in the size of the Premises by means of the CDP
or otherwise and adjustment of any other terms of the Lease based upon the
changed size of the Premises, it shall be deemed a request for an estoppel
statement from Tenant confirming the adjustments pursuant to Section 27. Unless
Tenant gives notice to Landlord of an objection to the adjustments within
fifteen (15) days of Landlord's notice, it shall be final and binding on Tenant
as an amendment of this Lease. Tenant reserves the right to recalculate the
percentages set forth in the first sentence of this paragraph but in no event
shall the percentages be increased.
5.4 Tenant Responsibilities: Tenant shall be responsible for delays and
-----------------------
additional costs, including without limitation design fees, caused by: (i) any
changes made by Tenant to the Approved Plans other than corrections and
deletions of the type described in Section 5.2; or (ii) by delays in delivery of
non-building-standard materials requiring long lead times. Tenant shall pay,
prior to taking occupancy of the Premises, all of Landlord's design fees arising
out of the inclusion of non-building-standard materials in the Premises.
Section 6. CONSTRUCTION.
- --------- ------------
Landlord shall complete the construction of the Tenant Improvements as soon
as reasonably possible. Landlord's contractor shall complete the Tenant
Improvements in accordance with the Approved Plans.
Section 7. FIELD CHANGE ORDERS.
- --------- -------------------
If Tenant shall request any change in the Tenant Approved Plans, Tenant
shall request such change in writing to Landlord, and such request shall be
accompanied by all information necessary to prepare plans and specifications for
such change. After receiving this information, Landlord shall cause its office
planner to prepare such plans and specifications and a proposed field change
order ("FCO") as soon as reasonably possible thereafter. Landlord shall not be
obligated to proceed with any work which would be affected by a proposed FCO
until it is effective or Tenant withdraws the FCO request. Tenant shall be
responsible for any and all delays in construction and occupancy caused by
Tenant's FCO requests. The proposed FCO shall set forth the estimated cost of
the changes. The proposed FCO shall be effective only when signed by both
Landlord and Tenant, and Tenant has deposited the estimated cost of the changes
with Landlord. Landlord shall hold this payment as an additional security
deposit. Upon the acceptance of the Premises by Tenant, this additional
security deposit shall be applied to pay the cost of the work. If the actual
cost of the change order is more or less than this security deposit then the
excess or deficiency shall be refunded or paid at the same time, as the case may
be. Even if Tenant fails to approve the proposed FCO, Tenant shall be
responsible for the cost of preparing any plans and specifications for the
proposed FCO. The actual cost, including design and administrative fees, of any
FCO shall be paid by Tenant on or before the date Tenant first occupies the
Premises unless stated otherwise in the FCO.
Section 8. IMPROVEMENTS CONSTRUCTED BY TENANT.
- --------- ----------------------------------
EXHIBIT C, 2 - Work Agreement
-------
<PAGE>
If any work is to be performed in connection with Tenant Improvements on
the Premises by Tenant or Tenant's contractor:
8.1 Landlord's Approval: Such work shall not proceed until Landlord's
-------------------
written approval of each of the following items: (a) Tenant's contractor; (b)
public liability and property damage insurance carried by Tenant or its
contractor; and (c) schematic plans and specifications for such work. The
detailed construction plans and specifications shall be prepared by Landlord's
office planner at Tenant's expense based upon the schematic plans and
specifications. All such work shall be done in strict conformity with such
final plans and specifications subject to field change orders prepared and
approved in the manner specified in Section 3.1 above. As-built plans shall be
prepared by Landlord's office planner at Tenant's expense after the work is
fully completed and a copy retained by Landlord for its use.
8.2 Permits: All work shall be done in conformity with a valid building
-------
permit (obtained at Tenant's expense) when required, a copy of which shall be
furnished to Landlord before such work is commenced, and in any case, all such
work shall be performed in accordance with all applicable governmental
regulations at Tenant's sole expense. Notwithstanding any failure by Landlord
to object to any such work, Landlord shall have no responsibility for Tenant's
failure to meet all applicable regulations.
8.3 Coordination: All work by Tenant or Tenant's contractor shall be
------------
scheduled through Landlord. Tenant or Tenant's contractor shall arrange for
necessary utility, hoisting and elevator service with Landlord's contractor and
shall pay such reasonable charges for such services as may be charged by
Landlord's contractor.
8.4 Manner of Entry: Tenant's entry to the Premises for any purpose,
---------------
including without limitation, inspection or performance of Tenant construction
by Tenant's agents, prior to the Lease Commencement Date as specified in the
Basic Lease Information shall be at such times as are approved by Landlord and
subject to all the terms and conditions of the lease except the payment of Rent.
Tenant's entry shall mean entry by Tenant, its officers, contractors, licensees,
agents, servants, employees, guests, invitees, or visitors.
8.5 Faulty Work: Tenant shall promptly reimburse Landlord upon demand for
-----------
any extra expense incurred by the Landlord by reason of faulty work done by
Tenant or its contractors or by reason of any delays caused by such work, or by
reason of inadequate cleanup.
EXHIBIT C, 3 - Work Agreement
---------
<PAGE>
EXHIBIT D
---------
LEASE AGREEMENT
---------------
Schematic Space Plan for the Premises
-------------------------------------
EXHIBIT D, 1 - Schematic Space Plan for Premises
---------
<PAGE>
SCHEMATIC SPACE PLAN FOR THE PREMISES
FIRST FLOOR PLAN
<PAGE>
SCHEMATIC SPACE PLAN FOR THE PREMISES
SECOND FLOOR PLAN
<PAGE>
SCHEMATIC SPACE PLAN FOR THE PREMISES
WOMEN'S BANK
FLOOR FOUR
<PAGE>
SCHEMATIC SPACE PLAN FOR THE PREMISES
WOMEN'S BANK
FLOOR SIX
<PAGE>
SCHEMATIC SPACE PLAN FOR THE PREMISES
WOMEN'S BANK
FLOOR EIGHT
<PAGE>
EXHIBIT E
---------
LEASE AGREEMENT
---------------
Rules and Regulations
---------------------
1. The rights of each tenant in the entrances, corridors and
elevators servicing the Building are limited to ingress to and egress from such
tenant's Premises for the tenant and its employees, licensees and invitees, and
no tenant shall use, or permit the use of, the entrances, corridors or elevators
for any other purpose. No tenant shall invite to the tenant's Premises, or
permit the visit of, persons in such numbers or under such conditions as to
unreasonably interfere with the use and enjoyment of any of the plazas,
entrances, corridors, elevators and other facilities of the Building by any
other tenants. No tenant shall encumber or obstruct, or permit the encumbrance
or obstruction of any of the sidewalks, plazas, entrances, corridors, elevators,
fire exits or stairways of the Building. Landlord reserves the right to control
and operate the public portions of the Building and the public facilities as
well as facilities furnished for the common use of the tenants, in such manner
as it in its reasonable judgment deems best for the benefit of the tenants
generally.
2. Admission to the Building in certain areas and during certain
hours may be restricted by Landlord by means of access devices such as keys,
entry cards, combination codes and the like. Landlord may require all persons
admitted to or leaving the Building outside of business hours on business days
to provide appropriate identification, use a designated access device and to
comply with all other Building security requirements. Tenant shall be
responsible for all persons to whom it issues an access device or discloses an
access code and shall be liable to Landlord for all acts or omissions of such
persons. Any person whose presence in the Building at any time shall, in the
reasonable judgment of Landlord, be prejudicial to the safety, character or
reputation of the Building or of its tenants may be denied access to the
Building or may be ejected therefrom. During any invasion, riot, public
excitement or other commotion, Landlord may prevent all access to the Building
by closing the doors or otherwise for the safety of the tenants and protection
of property in the Building. Each tenant shall pay Landlord a refundable
deposit in an amount reasonably determined by Landlord from time to time for
each access device issued to a tenant.
3. Smoking is prohibited at all times in all areas of the Building,
including, but not limited to, offices, restrooms, corridors, stairwells,
lobbies and elevators.
4. No tenant shall obtain or accept for use in its Premises ice,
food, beverages, cleaning or other similar services from any persons reasonably
prohibited in writing from furnishing such services. Such services shall be
furnished only at such hours, and under such reasonable regulations, as may be
fixed by Landlord from time to time.
5. The cost of repairing any damage to the public portions of the
Building, the common areas or the public facilities or to any facilities used in
common with other tenants, caused by a tenant or its employees, agents,
contractors, licensees or invitees, shall be paid by such tenant.
6. No awnings or other projections shall be attached to the outside
walls of the Building. No curtains, blinds,
EXHIBIT E, 1 - Rules and Regulations
---------
<PAGE>
shades or screens, if any, which are different from the standards adopted by
Landlord for the Building shall be attached to or hung in or used in connection
with any exterior window or door of the Premises of any tenant without the prior
written consent of Landlord. All tenants with Premises visible from one of the
lobbies, or any other public portion of the Building, shall furnish and maintain
the Premises in a first-class manner, utilizing furnishings and other
decorations commensurate in quality and style with the furnishings and decor in
the public portions of the Building.
7. No lettering, sign, advertisement, notice or object shall be
displayed in or on the exterior windows or doors, or on the outside of any
tenant's Premises, or at any point inside any tenant's Premises where the same
might be visible outside of such Premises, without the prior written consent of
Landlord which consent may be withheld in Landlord's sole and unfettered
discretion. In the event of the violation of the foregoing by any tenant,
Landlord may remove the same without any liability, and may charge the expense
incurred in such removal to the tenant violating this rule. Interior signs,
elevator cab designations, and lettering on doors, if and when approved by
Landlord, shall be inscribed, painted or affixed for each tenant by Landlord at
the expense of such tenant, and shall be of a size, color and style acceptable
to Landlord.
8. The windows that reflect or admit light and air into the halls,
passageways or other public places in the Building shall not be covered or
obstructed by any tenant, nor shall any bottles, parcels or other articles be
placed on the window sills.
9. No showcases or other articles shall be put in front of or affixed
to any part of the exterior of the Building, nor placed in the halls, corridors
or vestibules.
10. No bicycles, vehicles, animals, fish or birds of any kind shall
be brought into or kept in or about the Premises of any tenant or the Building
except in areas designated by Landlord.
11. No noise, including, but not limited to, music or the playing of
musical instruments, recordings, radio or television, which, in the judgment of
Landlord, might disturb other tenants in the Building, shall be made or
permitted by any tenant. Nothing shall be done or permitted in the Premises of
any tenant which would impair or interfere with the use or enjoyment by any
other tenant of any other space in the Building.
12. No tenant, nor any tenant's contractors, employees, agents,
visitors or licensees, shall at any time bring into or keep upon the Premises or
the Building any hazardous, inflammable, combustible, explosive or otherwise
dangerous fluid, chemical or substance, except any fluids or substances used in
the ordinary course of Tenant's business as part of a use permitted under the
Lease. Landlord shall be notified of any threatened or actual violation of
environmental laws or other Legal Requirements as soon as possible after any
tenant becomes aware of the situation.
13. Additional locks or bolts of any kind which shall not be operable
by the Grand Master Key for the Building shall not be placed upon any of the
doors or windows by any tenant, nor shall any changes be made in locks or
mechanisms thereof which shall make such locks inoperable by said Grand Master
Key; provided, however, that the Tenant shall have the right to change the locks
so that they are inoperable by the Grand Master Key for areas where money is
stored. Additional keys for a tenant's
EXHIBIT E, 2 - Rules and Regulations
---------
<PAGE>
Premises and restrooms shall be procured only from the Landlord who may make a
reasonable charge therefor. Each tenant shall, upon the termination of its
tenancy, turn over to Landlord all keys of stores, offices and toilet rooms,
either furnished to, or otherwise procured by, such tenant, and in the event of
the loss of any keys furnished by Landlord, such tenant shall pay to Landlord
the cost thereof.
14. All removals, or the carrying in or out of any safes, freight,
furniture, packages, boxes, crates or any other object or matter of any
description must take place during such hours and in such elevators, and in such
manner as Landlord or its agent may determine from time to time. The persons
employed to move furnishings, fixtures and equipment in and out of the Building
shall be reasonably acceptable to Landlord and, if so required by law, shall
hold a Master Rigger's or comparable license. Landlord shall have the right to
require an additional security deposit from Tenant as a condition of approving a
particular moving company for such purposes. Tenant must make arrangements in
advance with Landlord for moving large quantities of furniture and equipment
into or out of the Building. All labor and engineering costs incurred by
Landlord in connection with any moving specified in this rule, including a
reasonable charge for overhead and profit, shall be paid by Tenant to Landlord,
on demand.
15. No tenant shall occupy or permit any portion of its Premises to
be occupied as an office for secretarial or word processing services to third
parties without the prior written consent of Landlord which consent may be
withheld in the sole and unfettered discretion of Landlord. No tenant shall use
its Premises or any part thereof to be used, for manufacturing or the sale at
retail or auction of merchandise, goods or property of any kind or for the
possession, storage, manufacture, or sale of liquor, narcotics, dope, tobacco in
any form, or as a barber, beauty or manicure shop, or as a school.
16. Landlord shall have the right to prohibit any advertising or
identifying sign by any tenant which, in good faith, Landlord believes will
impair the reputation of the Building or its desirability as a building for
others, and upon written notice from Landlord, such tenant shall refrain from
and discontinue such advertising or identifying sign.
17. Landlord shall have the right to prescribe the weight and
position of safes and other objects of excessive weight, and no safe or other
object whose weight exceeds the lawful load for the area upon which it would
stand shall be brought into or kept upon any tenant's Premises. If, in the
reasonable judgment of Landlord, it is necessary to distribute the concentrated
weight of any heavy object, the work involved in such distribution shall be done
at the expense of the tenant and in such manner as Landlord shall determine.
18. No machinery or mechanical equipment other than ordinary portable
business machines may be installed or operated in any tenant's Premises without
Landlord's prior written consent which consent shall not be unreasonably
withheld, conditioned or delayed, and in no case (even where the same are of a
type so excepted or as so consented to by Landlord) shall any machines or
mechanical equipment be so placed or operated as to disturb other tenants, but
machines and mechanical equipment which may be permitted to be installed and
used in tenant's Premises shall be so equipped, installed and maintained by such
tenant as to prevent any disturbing noise, vibration or electrical or other
interference from being transmitted from such Premises to any other area of the
Building.
EXHIBIT E, 3 - Rules and Regulations
---------
<PAGE>
19. Landlord, its contractors, and their respective employees, shall
have the right to use, without charge therefor, all light, power and water in
the Premises of any tenant while cleaning or making repairs or alterations in
the Premises of such tenant.
20. No Premises of any tenant shall be used for lodging or sleeping
or for any immoral or illegal purpose.
21. The requirements of tenants will be attended to only upon
application at the office of the Building. Employees of Landlord shall not
perform any work or do anything outside of their regular duties, unless under
special instructions from Landlord.
22. Canvassing, soliciting and peddling in the Building are
prohibited and each tenant shall cooperate to prevent the same.
23. No tenant shall cause or permit any unusual or objectionable
odors to emanate from its Premises which would annoy other tenants or create a
public or private nuisance. No cooking shall be done in the Premises of any
tenant except as is expressly permitted in such tenant's Lease, except that
Tenant may use microwave ovens for non-commercial microwave cooking of food to
be consumed on the premises by the tenant's personnel.
24. Nothing shall be done or permitted in any tenant's Premises, and
nothing shall be brought into or kept in any tenant's Premises, which would
impair or interfere with any of the Building's services or the proper and
economic heating, cleaning or other servicing of the Building or the Premises,
or the use or enjoyment by any other tenant of any other Premises, nor shall
there be installed by any tenant any ventilating, air-conditioning, electrical
or other equipment of any kind which, in the reasonable judgment of Landlord,
might cause any such impairment or interference.
25. No acids, vapors or other materials shall be discharged or
permitted to be discharged into the waste lines, vents or flues of the Building
which may damage them. The water and wash closets and other plumbing fixtures
in or serving any tenant's Premises shall not be used for any purpose other than
the purposes for which they were designed or constructed, and no sweepings,
rubbish, rags, acids or other foreign substances shall be deposited therein.
All damages resulting from any misuse of the fixtures shall be borne by the
tenants who, or whose servants, employees, agents, visitors or licensees shall
have caused the same.
26. All entrance doors in each tenant's Premises shall be left locked
and all windows shall be left closed by the tenant when the tenant's Premises
are not in use. Entrance doors shall not be propped open at any time. Each
tenant, before closing and leaving its Premises at any time, shall turn out all
lights.
27. Hand trucks not equipped with rubber tires and side guards shall
not be used within the Building.
28. The coverings for all windows in each tenant's Premises above the
ground floor shall be lowered and closed as reasonably required because of the
position of the sun, during the operation of the Building's air-conditioning
system to cool or ventilate the tenant's Premises.
29. Landlord reserves the right to rescind, alter or waive any rule
or regulation at any time prescribed for the Building when, in its reasonable
judgment, it deems it necessary,
EXHIBIT E, 4 - Rules and Regulations
---------
<PAGE>
desirable or proper for its best interest and for the best interests of the
tenants generally, and no alteration or waiver of any rule or regulation in
favor of one tenant shall operate as an alteration or waiver in favor of any
other tenant. Landlord shall not be responsible to any tenant for the
nonobservance or violation by any other tenant of any of the rules and
regulations at any time prescribed for the Building.
EXHIBIT E, 5 - Rules and Regulations
---------
<PAGE>
EXHIBIT F
---------
LEASE AGREEMENT
---------------
Guaranty
--------
INTENTIONALLY DELETED.
EXHIBIT F, 1 - Guaranty
---------
<PAGE>
EXHIBIT G
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RIDER TO LEASE
--------------
1. Premises. The Premises leased by the Tenant shall be all of the 2nd, 8th
--------
and 9th floors, and that portion of the 1st floor currently leased by the Tenant
from the Landlord as set forth on Exhibit B (the "Permanent Premises"). The
parties recognize and acknowledge that a portion of the 8th floor known as the
"Computer Room" will be delivered to the Tenant on May 1, 1998 and that the
Tenant currently has possession of the 1st and 2nd floor space. Until such time
as the 8th and 9th floors have been completely remodeled and delivered to the
Tenant, the Tenant shall lease the space it currently occupies on the 4th and
6th floors (the "Interim Space"). On or before 30 days after the Landlord
delivers possession of the 8th and 9th floors (the "Moving Period"), the Tenant
shall surrender the said Interim Space to Landlord. After delivery of the 8th
and 9th floors to Tenant, Landlord shall have the right to enter the Premises
during normal business hours to finish "punch list" items of construction and
such work shall not be deemed to be a breach of the Tenant's right to quiet
enjoyment of the Premises. After the 8th and 9th floors have been delivered to
the Tenant, the parties shall execute a document setting forth the date the 8th
and 9th floors were delivered to Tenant and the expiration date of this Lease.
2. Expiration Date. The commencement date shall be May 1, 1998. The
---------------
expiration date shall be ten (10) years after the Landlord delivers all of the
8th and 9th floors to the Tenant in the condition required by this Lease.
3. Base Rent. The Base Rent for the Permanent Premises shall be as follows:
---------
First Floor: $18.50 per square foot
2nd, 8th & 9th Floors: $15.00 per square foot
Notwithstanding anything herein to the contrary, in the event that the 8th and
9th floors are delivered to the Tenant as provided in this Lease, but the
Landlord has not completed the repair and rehabilitation of one of the elevators
in the Building, rent for the 8th and 9th floors shall be $14.25 per square foot
until such time as one of the elevators in the Building has been completed.
Base Rent shall be adjusted on the first day of the fourth and seventh lease
years (the "Adjustment Date") to the fair market rent for the Premises, but in
no event shall the amount of rent be less than the amount which is paid by the
Tenant during the third lease year. The "fair market rent" shall be determined
as follows: At least 90 days prior to the Adjustment Date, but no earlier than
six months prior to the Adjustment Date, the Landlord shall deliver to the
Tenant a written notice of the fair market rent which needs to be paid. The
Tenant shall have thirty days from receipt of the Landlord's notice in which (i)
to hire at its sole expense a Colorado licensed real estate broker or MAI
appraiser to evaluate the Landlord's determination of fair market rent, and (ii)
if the Tenant disagrees with the Landlord's determination to deliver a written
notice to Landlord setting forth its opinion of the fair market rent together
with supporting documentation. If the Landlord does not agree with the Tenant's
determination, the Landlord shall have twenty (20) days in which to hire at its
sole expense a Colorado licensed real estate broker or MAI appraiser to
determine the fair market rent and deliver a copy of the same to Tenant. If the
two evaluations are within ten percent (10%) of each other, the fair market rent
shall be the average of the two evaluations. If the two evaluations differ by
more than ten percent (10%), the parties which prepared the respective reports
EXHIBIT G, 1 - Rider
---------
<PAGE>
shall designate a third Colorado licensed real estate broker or MAI appraiser to
determine the fair market rent but in no event shall the fair market rent by
greater than the Landlord's consultant's evaluation or less than the Tenant's
consultant's evaluation. The third Colorado licensed real estate broker or MAI
appraiser shall prepare its report no later than ten (10) days prior to the
Adjustment Date, its determination of fair market rent shall be binding on the
parties, and its cost shall be shared equally by Landlord and Tenant. For
purposes of this paragraph, the term "lease year" shall mean the twelve (12)
month period commencing in the month that possession of the 8th and 9th floors
have been delivered to the Tenant.
Notwithstanding the provisions of the preceding paragraph, until such time as
all of the 8th and 9th floors are remodeled by Landlord and delivered to Tenant,
Tenant shall pay the following Base Rent: Computer Room on 8th floor: $15.00
per square foot; First Floor: $16.00 per square foot which amount shall be
increased to the amount set forth in the preceding paragraph ($18.00 per square
foot) upon the completion of the HVAC repairs and the balancing of the system;
and Second Floor: $13.50 per square foot which amount shall be increased to the
amount set forth in the preceding paragraph ($15.00 per square foot) upon the
completion of the repair and rehabilitation of one of the elevators in the
Building.
The Base Rent for the space occupied on the 4th and 6th floors shall be
$1,177.25 per month, provided, however, that no rent shall be due on this space
during the Moving Period.
4. Remodeling. The parties acknowledge that the Landlord is in the process
----------
of replacing and/or repairing the roof, HVAC, elevators, plumbing and electrical
system. Windows in the building will be replaced or repaired as necessary
subject to limitations imposed due to the building being designated as a
historic building. The Landlord will remodel the bathrooms on the first, 8th
and 9th floors, restore the historic bank lobby, and repair the recent water
damage from roof leakage. Remodeling of the bathroom on the first floor shall
commence upon the issuance of the necessary governmental permits and the
Landlord shall use its best efforts to complete the remodeling by December 31,
1998. The Landlord will remodel the balance of the 8th floor and all of the 9th
floor in accordance with plans approved by the Landlord and Tenant and the
Tenant shall be given a $15.00 per square foot tenant improvement allowance
which can be used for architectural and engineering costs and tenant finish for
the Premises being remodeled, with any excess cost being the responsibility of
the Tenant.
5. Lobby Area. In the event that during the term of this Lease the stairway
----------
in the main lobby area is relocated and additional space which is currently
common area becomes rentable space, the Tenant shall lease the space upon it
becoming available at the same rate per square foot as that then being paid for
the first floor space under this Lease. Landlord and Tenant shall continue to
share equally the cost of the security for the first floor common area;
provided, however, that the Tenant shall be liable for all of the security for
its Premises in the event that the lobby area is redone so that the Tenant has
its own exclusive entrance to its first floor space.
6. Subleased Space. The parties recognize and acknowledge that the Tenant
---------------
currently subleases some 1st floor space from the Broker Restaurant. In the
event that the Broker Restaurant's Lease with the Landlord is either (i)
modified to delete any of the subleased space from the Broker Restaurant's
lease, or (ii) the Broker Restaurant's lease is terminated for any reason,
Landlord and Tenant agree that the subleased space
EXHIBIT G, 2 - Guaranty
---------
<PAGE>
shall be leased by Landlord to Tenant upon the subleased space becoming
available at the same rate per square foot as that then being paid for the first
floor space under this Lease.
7. Expansion Option. As other complete floors in the Building become
----------------
available and are renovated by the Landlord, the Tenant shall have the first
opportunity to lease space on the floors provided that the Tenant leases a
minimum of 3,500 contiguous square feet. In the event that the Tenant exercises
its expansion option, the Landlord shall give the Tenant a $15.00 per square
foot tenant improvement allowance which can be used for architectural and
engineering costs and tenant finish, with any excess cost being the
responsibility of the Tenant. The amount of Base Rent for the expansions space
shall be the amount which is agreed to by the parties in their sole and absolute
discretion and the term of the lease for the expansion space shall be
coterminous with the term of this Lease. Landlord shall provide Tenant written
notice of the expansion space being available and the amount of Base Rent which
Landlord is asking for the expansion space. If the parties do not enter into a
written lease amendment on or before thirty (30) days from the date Landlord
delivered notice to Tenant of the availability of the expansion space, the
Tenant shall have no further expansion option as to the particular space offered
and Landlord shall have the right to offer the said space to any party and lease
the said space for such amounts as the Landlord may determine in its sole and
absolute discretion.
8. Option to Renew. Provided that Tenant is not in default under this
---------------
Lease, Tenant is hereby granted an option to renew this Lease for additional ten
(10) year term, under the same terms and conditions of this Lease excepting,
however, that the Base Rent during the renewal term shall be the fair market
rent which amount shall be no less than 110% of the amount of Base Rent paid in
year 10 of this Lease. The Base Rent during the renewal period shall be
adjusted on the first day of the fourteenth and seventeenth lease years (the
"Adjustment Date") to the fair market rent for the Premises, but in no event
shall the amount of rent be less than the amount which is paid by the Tenant
during the third lease year. The fair market rent shall be determined in
accordance with the provisions of paragraph 3 of this Exhibit G. The Lessee
shall exercise this option by delivering written notice to Lessor and Shames-
Makovsky Realty Company, 1400 Glenarm Place, Suite 201, Denver, Colorado 80202,
by registered or certified mail, return receipt requested, no later than
September 30, 1999, failing which this option to renew shall automatically
terminate.
9. First Opportunity to Purchase. In the event that the Landlord decides to
-----------------------------
sell the Building, the Landlord shall provide thirty (30) days advance written
notice to Tenant setting forth the asking price for the Building. The Tenant
shall have thirty (30) days from receipt of the said notice in which to advise
Landlord that it is interested in purchasing the Building and the parties shall
have thirty (30) days from the date of the Tenant's notice to Landlord in which
to negotiate in good faith and execute a contract acceptable to the parties in
their sole and absolute discretion.
EXHIBIT G, 3 - Rider
---------
<PAGE>
Exhibit 10.2
OFFICE LEASE
<PAGE>
OFFICE LEASE
This Lease is made and entered into as of the 25 day of September, 1998,
between: SFP REALTY, LTD., L.L.P., a Colorado limited liability partnership,
4859 Dakota Blvd., Boulder, Colorado 80304 ("Landlord"), and COLORADO BUSINESS
BANK OF BOULDER NATIONAL ASSOCIATION, 1900 15th Street, Boulder, Colorado 80302
("Tenant").
I. PREMISES; USE
A. Landlord hereby leases to Tenant approximately 6,000 gross square feet
consisting of the entire space of the building ("Building") located at
2025 Pearl Street, Boulder, Colorado 80203, (the "Premises"), on the terms
and conditions set forth herein. The Premises are more particularly
described on Exhibit A attached hereto.
B. Tenant shall not use or permit the Premises or any part thereof to be used
for any purpose or purposes other than for operation of a business bank and
all related or ancillary services associated therewith; Tenant agrees that
no use shall be made or permitted to be made of the Premises, or acts done,
which will increase the rate of insurance upon the Building or cause a
cancellation of any insurance policy covering the Building, or any part
thereof, nor shall Tenant sell, or permit to be kept, used, or sold in or
about the Premises, any article which may be prohibited by the standard
form of insurance policies. Tenant shall not commit, or cause to be
committed, any public or private nuisance upon the Premises, or other act
or thing which may disturb the quiet enjoyment of any other tenant in the
Building nor, without limiting the generality of the foregoing, shall
Tenant allow the Premises to be used for any improper, immoral, unlawful or
objectionable purpose.
C. Tenant shall at its sole cost and expense comply with all laws, statutes,
ordinances and governmental rules, regulations or requirements now in force
or which may hereafter be in force and with the requirements of any board
of fire underwriters or other similar body now or hereafter constituted
relating to or affecting the condition, use or occupancy of the Premises,
excluding structural changes not caused by Tenant's improvements or the
nature of Tenant's occupancy of the Premises.
D. Tenant shall not place any holes in any part of the Premises or place any
exterior or interior signs or interior drapes, blinds, or similar items
visible from the outside of the Premises without the prior written approval
of Landlord.
E. Tenant shall not knowingly permit any employees, agents or guests of Tenant
to violate any covenant or obligation of Tenant hereunder.
F. Except as may be permitted in Article V, Section D below, Tenant agrees
that it will not bring in or permit the placing within the Premises of any
machine or property heavier than customarily used in connection with
general office purposes.
II. TERM
A. This Lease shall be for a term of ten (10) years ("Primary Lease Term"),
unless sooner terminated as herein provided, beginning on January 1, 1999
(the "Lease Commencement Date"). The Primary Lease Term may be extended
pursuant to Paragraph B below.
B. If Landlord, for any reason whatsoever, cannot deliver possession of the
Premises to Tenant on the Lease Commencement Date, this Lease shall not be
void or voidable, nor shall Landlord be liable to Tenant for any loss or
damage resulting therefrom, but in that event the term of the Lease shall
be amended to commence on the date when the Landlord can deliver possession
and the expiration date shall be extended accordingly (unless possession
cannot be delivered within 180 days after the Lease Commencement Date for
reasons other than Landlord's failure to comply with its obligations under
Exhibit C attached hereto, in which case Tenant shall have the right to
terminate this Lease upon written notice to Landlord without penalty to
either party). If permission is given
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<PAGE>
to Tenant to occupy the Premises prior to the Lease Commencement Date, such
occupancy shall be subject to all of the provisions of this Lease.
III. RENT
A. See Exhibit B (attached hereto), Paragraph 1 for Rent Schedule.
B. Tenant also agrees to pay to Landlord, as additional rent without offset or
reduction, one hundred percent (100%) of the Building Expenses (as
hereinafter defined) during the term of this Lease. From time to time,
Landlord shall reasonably estimate the amount of Building Expenses, and
Tenant shall pay additional rent, in advance, based upon such estimate. If
the actual Building Expenses exceed Landlord's estimate for a period,
Tenant shall pay to Landlord such excess within thirty (30) days of notice
of such excess. If the actual Building Expenses are less than Landlord's
estimate for a period, the difference shall be applied to the next amounts
owing by Tenant to Landlord pursuant to this Section B. If the term of
this Lease ends (other than due to default by Tenant hereunder) and Tenant
has complied with all the provisions hereof, Tenant shall be entitled to a
prompt refund of any excess amounts which Tenant has paid to Landlord
pursuant to this Section B.
C. For the purposes hereof, the term "Building Expenses" shall mean all
expenses pertaining to the Building, the land underneath and surrounding
the Building as described in Exhibit A attached hereto, including any
parking areas and/or parking structure located thereon or adjacent thereto
leased by Tenant (collectively, the "Building Area"), including, but not
limited to, the following:
1. all general and special real estate or ad valorem taxes (including,
but not limited to, any new or different tax imposed in lieu of or in
addition to existing taxes) or assessments levied against the Building
Area by any governmental or quasi-governmental authority or by any
applicable association of property owners;
2. the cost of all utilities (including, but not limited to, water,
sewer, electricity, natural gas and any other energy used for heating,
cooling or other purposes) which utilities shall be billed directly to
and separately paid by Tenant;
3. building supplies, janitorial services, trash removal, maintenance,
repair and replacements of the Building Area (including, but not
limited to, elevators and heating, ventilating and air conditioning
equipment and fire monitoring and control systems). All services for
janitorial, trash, snow removal and recycling shall be contracted for
by Tenant and billed directly to and separately paid by Tenant.
Tenant shall have the option to maintain in effect, at Tenant's
expense, a maintenance contract for the heating, ventilation and air
conditioning equipment serving the Building Area with a contractor
acceptable to Landlord;
4. landscaping maintenance and repair;
5. resurfacing (subject to mutual agreement of Landlord and Tenant),
repair and restriping parking surfaces;
6. insurance (including, but not limited to, fire and extended coverage,
public liability and business interruption insurance and loss of rents
insurance), but Tenant shall have no interest in such insurance or the
proceeds thereof;
7. labor costs incurred in the operation or maintenance of the Building
Area, including, but not limited to, wages and other payments,
Workmen's Compensation and disability insurance, payroll taxes and
fringe benefits;
8. Security shall be at Tenant's option and Landlord shall have no
obligation to provide any security. Should Tenant only elect to
provide its own security, it may do so with Landlord's consent, which
shall not be unreasonably withheld. All costs related thereto shall
be billed directly to and separately paid by Tenant;
9. reasonable management fees, legal, accounting, inspection and
consultation fees applicable
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<PAGE>
to the Building Area; and
10. any costs incurred by Landlord for any capital improvements,
structural repairs, replacements or other modifications to the
Building Area to affect labor savings or otherwise reduce Building
Expenses, or required by any change occurring after the issuance of
the Certificate of Occupancy for the Building in the laws, ordinances,
rules, regulations or orders of any governmental or quasi-governmental
authority having jurisdiction over the Building Area, which costs
shall be amortized over the useful life of the applicable capital
improvement or structural repair; however, the annual amortization
amount will not exceed the reduction in Building Expenses as projected
by Landlord's accountant for the relevant year.
D. All reasonable determinations by Landlord pursuant to this Article shall be
presumed to be correct. Until Tenant is advised of the adjustment in the
rent, if any, pursuant to the provisions of this Article, Tenant's monthly
rental shall continue to be paid at the current rate (including all prior
adjustments pursuant to Section B of this Article). No failure by Landlord
to require the payment of additional rent by Tenant pursuant to Section B
of this Article for any period shall constitute a waiver of Landlord's
right to collect such additional rent for such period or for any subsequent
period.
E. If any installment of rent due hereunder is not paid by Tenant on or before
twelve o'clock noon on the seventh (7th) calendar day following the day on
which such installment was due, Tenant shall be required to pay a late
charge of five percent (5%) of such delinquent installment. Any such late
charge shall be due and payable immediately.
F. Unless Landlord notifies Tenant to the contrary, all amounts payable
hereunder shall be payable to Landlord at Landlord's address set forth in
Article XIX below.
G. All Building Expenses shall be computed on the accrual basis. In computing
Building Expenses, (i) no cost or expense may be counted more than once,
(ii) any expenses which are paid by the proceeds of insurance shall be
excluded, and (iii) any expenses which are separately metered or billed
directly to and separately paid by any tenant shall be excluded.
H. Landlord shall provide Tenant with reasonably detailed statements showing
the computation of the Building Expenses once per year. Upon reasonable
prior notice given by Tenant to Landlord, Tenant shall have the right to
review the documentation relating to the computation of Building Expenses
pursuant to this Article during the ninety (90) day period immediately
following issuance of any such statements. Tenant shall have the right to
cause an audit to be made of such computation during such 90-day period, at
Tenant's expense. Any errors in Landlord's computation shall be promptly
corrected.
IV. SECURITY DEPOSIT
Tenant has deposited with Landlord the sum of Ten thousand and 00/100
($10,000.00) as security for the full and faithful performance of every
provision of this Lease to be performed by Tenant. If Tenant defaults with
respect to any provision of this Lease, including but not limited to the
provisions relating to the payment of rent, Landlord may use, apply or retain
all or any part of this security deposit for the payment of any rent or any
other sum in default, or for the payment of any other amount which Landlord may
spend or become obligated to spend by reason of Tenant's default or to
compensate Landlord for any other loss or damage which Landlord may suffer by
reason of Tenant's default. If any portion of said deposit is so used or
applied, Tenant shall, within five (5) days after written demand therefor is
made, deposit cash with Landlord in an amount sufficient to restore the security
deposit to its original amount. Landlord shall not be required to keep this
security deposit separate from its general funds and Tenant shall not be
entitled to interest on such deposit. If Tenant shall fully and faithfully
perform every provision of this Lease to be performed by it, the security
deposit or any balance thereof shall be returned to Tenant within ninety (90)
days after the expiration of the lease term and upon the vacation of the
Premises by Tenant. Landlord shall deliver the funds deposited herein by Tenant
to the purchaser of the Building in the event the Building is sold (or give such
purchaser a credit against the purchase price in the amount of such deposit),
and thereupon, Landlord shall be discharged from further liability with respect
to such deposit.
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<PAGE>
V. LANDLORD'S SERVICES
A. Landlord shall maintain and repair the Building Area in a good and
workmanlike manner similar to other first class office buildings located in
Boulder, Colorado, and shall furnish the following services to the Premises
(the cost of which shall be included within Building Expenses):
1. air conditioning and heat required for ordinary office use; and
2. hot and cold water (to each floor in the Building) and electric
current for lighting the Premises and for ordinary office appliances
and machines only.
Landlord shall not be liable for damages nor shall any rent be abated for
failure to furnish, or delay in furnishing, any such service which is
occasioned by needed repairs, renewals or improvements, or by any strike or
labor controversy, or by any act or default of Tenant or due to the
inability of Landlord to obtain fuel or power from the utility company
supplying same, or for any cause beyond the reasonable control of Landlord,
unless such delay or service interruption continues for a period in excess
of thirty consecutive days and such delay or interruption renders the
Premises or any portion thereof untenantable for Tenant's normal business
operations, in which case the rent shall be abated in proportion to the
unusable portion of the Premises for any such excess. Landlord agrees to
use its best efforts to cause utility companies to continuously supply gas,
electricity, water and other necessary utilities to the Premises.
B. If heat generating machines or equipment (including, but not limited to,
telephone equipment) are used by Tenant in the Premises which affect the
temperature otherwise maintained by the air conditioning system, Landlord
reserves the right if requested by Tenant to install supplementary air
conditioning units in the Premises and the cost thereof, including the cost
of installation, and the cost of operation and maintenance thereof, shall
be paid by Tenant to Landlord upon demand by Landlord.
C. Tenant will not without the prior written consent of Landlord use any
apparatus or device in the Premises which will in any way increase the
amount of electricity or water usually furnished or supplied for use of the
Premises as general office space. Tenant shall not connect with any
electric current, except through existing electrical outlets in the
Premises, or to any water pipes, any apparatus or device, for the purposes
of using electric current or water. If Tenant shall require water or
electric current in excess of that usually furnished or supplied for use of
the Premises as general office space, Tenant must first procure the consent
of Landlord to the use thereof.
D. Notwithstanding anything contained in this Lease to the contrary, if
Landlord consents, Tenant may maintain and operate data processing
equipment and install a bank vault on the Premises. All additional costs
in connection therewith (including, but not limited to, additional support
flooring, insulation, electrical outlets and temperature maintenance
facilities) shall be borne by Tenant.
E. At Tenant's request and with Landlord's approval, Landlord shall furnish
the services described in Section A of this Article at times other than
specified in Section A, provided that Tenant shall pay the entire cost
thereof as reasonably determined by Landlord as additional rental,
notwithstanding the fact that such services may also benefit portions of
the Building other than the Premises.
VI. ASSIGNMENT AND SUBLETTING
Tenant shall not permit any part of the Premises to be used or occupied by
any persons other than Tenant, and the employees of Tenant, nor permit any part
of the Premises to be used or occupied by any licensee or concessionaire, or
permit any persons to be upon the Premises other than Tenant, and its employees,
customers and others having lawful business with Tenant. Tenant shall not
assign this Lease nor sublet all or part of the Premises without the prior
written consent of Landlord, which consent shall not be unreasonably withheld;
provided, however, such consent to any assignment or subletting shall not
relieve Tenant from its obligations as primary obligor (and not as surety or
guarantor) for the payment of all amounts due hereunder and for the full and
faithful observance and performance of the covenants, terms and conditions
herein contained.
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<PAGE>
VII. ESTOPPEL CERTIFICATE
Within ten (10) days of notice from Landlord, Tenant shall execute,
acknowledge and deliver to Landlord an accurate statement in substantially the
form attached hereto as Exhibit B, certifying, among other things, that this
Lease is unmodified and in full force and effect (or, if modified, stating the
nature of such modification and certifying that this Lease, as so modified, is
in full force and effect) and the dates to which rental and other charges are
paid in advance, if any and acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder, or specifying
such defaults if any are claimed. At Landlord's option, such form may contain
other certifications relating to this Lease as may be reasonably required by
Landlord, so long as said certification and/or attestations do not expand or
modify the obligations or responsibilities currently existing herein. It is
expressly understood and agreed that any such statement may be relied upon by
any prospective purchaser or encumbrancer of all or any portion of the Building
Area. Tenant's failure to deliver such statement within such time period shall
be conclusive upon Tenant that this Lease is in full force and effect without
modification except as may be represented by Landlord, that there are no uncured
defaults in Landlord's performance under the Lease and that not more than one
month's rental has been paid in advance. Upon such failure, Tenant does hereby
make, constitute and irrevocably appoint Landlord as Tenant's attorney-in-fact
to execute the statement required under this Article VII on behalf of Tenant.
VIII. SUBORDINATION AND ATTORNMENT
If Landlord desires to finance, refinance, or sell the Premises or the
Building, or any part thereof, Tenant shall deliver to any potential lender or
purchaser designated by Landlord such financial statements of Tenant as may be
reasonably required by such lender or purchaser, including but not limited to
Tenant's financial statements for the past three (3) years. All such financial
statements shall be received by Landlord and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.
This Lease, at Landlord's option, shall be subordinate to any existing or
future mortgage, deed of trust, ground lease or declaration of covenants
(regarding maintenance and use of any areas contained in any portion of the
Building) and to any and all advances made under any mortgage or deed of trust
and to all renewals, modifications, consolidations, replacements and extensions
thereof. Tenant agrees that with respect to any of the foregoing documents, no
documentation, other than this Lease, shall be required to evidence such
subordination. If any holder of a mortgage or deed of trust shall elect to have
this Lease superior to the lien of its mortgage or deed of trust and shall give
written notice thereof to Tenant, this Lease shall be deemed prior to such
mortgage or deed of trust, whether this Lease is dated prior or subsequent to
the date of said mortgage or deed of trust or to the date of recording thereof.
Tenant agrees to execute such documents which may be required by Landlord to
confirm such subordination or priority within ten (10) days of notice from
Landlord (including, but not limited to, a Subordination, Non-Disturbance and
Attornment Agreement), and should Tenant fail to do so within such time period,
Tenant does hereby make, constitute and irrevocably appoint Landlord as Tenant's
attorney-in-fact and in Tenant's name, place and stead, to do so. Tenant hereby
agrees to attorn to any lender designated by Landlord and to all successor
owners of the Building, whether or not such ownership is acquired as a result of
a sale through foreclosure of a deed of trust or mortgage, or otherwise.
Notwithstanding anything to the contrary contained in this Article, so long as
Tenant fulfills all its obligations under this Lease, Tenant's possession of the
premises and Tenant's other rights under this Lease shall not be disturbed or
impaired by any holder of a mortgage or a deed of trust, or by any person
claiming through or under Landlord.
IX. LANDLORD'S RESERVED RIGHTS
Without notice (except as otherwise set forth in this Article) and without
liability to Tenant (except for damages caused by the gross negligence or
willful misconduct of Landlord or its agent), Landlord shall have the right at
any time or from time to time to:
A. enter into the Premises in order to take reasonable measures as Landlord
may deem advisable for the safety, repair, maintenance, improvement, care,
cleanliness, security and reputation of the Building, or for the safety,
security and welfare of the occupants of the Building, including Tenant,
and for such purposes take into and through the Premises or any part of the
Building, all required tools, equipment and materials, and temporarily
suspend use of doors, corridors, elevators or other facilities;
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B. exhibit the Premises to others at reasonable times upon reasonable notice;
or
C. upon at least five (5) days prior notice to Tenant, enter the Premises and
perform any obligation of Tenant hereunder which Tenant has failed to
perform satisfactorily if Landlord elects to do so.
X. RULES AND REGULATIONS
The rules and regulations attached hereto as Exhibit D, as well as such
reasonable rules and regulations as may be hereafter adopted by Landlord upon at
least ten (10) days prior notice to Tenant for the safety, care and cleanliness
of the Building Area and the preservation of good order thereon, are hereby
expressly made a part hereof, and Tenant agrees to obey all such rules and
regulations.
XI. REPAIRS AND ALTERATIONS
A. Except for those matters which are the responsibility of Landlord as set
forth in Article V, Tenant shall keep the Premises in good condition and
repair (except for reasonable wear and tear and damage due to fire or other
insured casualty), and the Premises shall not be altered, repaired or
changed without the prior written consent of Landlord, provided, however,
Landlord's consent shall not be required for non-structural alterations and
repairs to the interior of the Building, the cost of which does not exceed
$5,000.00 and which are consistent with the character and nature of the
Building. Tenant shall keep the Premises and Building free and clear of any
liens due to the actions of Tenant or its agents and shall indemnify, hold
harmless and defend Landlord from any such liens and encumbrances arising
out of any work performed or materials furnished by or at the direction of
Tenant. In the event any such lien is filed, Tenant shall do all acts
necessary to discharge such lien within thirty (30) days of filing, or if
Tenant desires to contest such lien, then Tenant shall deposit with
Landlord such reasonable security as Landlord shall demand to insure the
payment of such lien claim. In the event Tenant shall fail to pay any such
lien claim when due or shall fail to deposit the security with Landlord,
then Landlord shall have the right to expend all sums reasonably necessary
to discharge such lien claim on behalf of the Tenant, and Tenant shall
reimburse Landlord for such expenditure within ten (10) days of demand by
Landlord.
B. Unless otherwise agreed by Landlord, all alterations, improvements and
changes to the Premises that may be required or permitted hereunder shall
be subject to the approval of the Landlord and done either by or under the
direction of Landlord but at the cost of Tenant.
C. Unless otherwise agreed by Landlord, all alterations, improvements and
changes to the Premises made by or at the direction of Tenant, including,
but not limited to, all improvements made to the Premises pursuant to
Exhibit E attached hereto, shall become the property of Landlord in
accordance with Article XXI hereof.
D. Tenant shall not cause or permit any alterations, improvements or changes
to the Premises without the prior written consent of Landlord.
XII. DAMAGES TO PROPERTY; INJURY TO PERSONS; INDEMNITY
A. Tenant shall neither hold, nor attempt to hold Landlord liable for any
injury or damage, either proximate or remote, occurring through or caused
by fire, water, steam, or any repairs, alterations, injury or accident, or
any other cause to any person, to the Premises, to any furniture, fixtures,
tenant improvements, or other personal property of Tenant kept or stored in
the Premises or to other parts of the Building, except to the extent caused
by the gross negligence or willful misconduct of Landlord or its agent.
B. Tenant hereby agrees to indemnify, defend and save Landlord harmless of and
from all liability, loss, damages, costs or expenses, including reasonable
attorney's fees, on account of injuries to the person or damage to the
Building, the property of Landlord or of any other tenant in the Building,
or to any other person rightfully in the Building for any purpose
whatsoever, to the extent that such injuries or damage arise from the use
or occupancy of the Premises by Tenant, or are caused by any act, omission,
or negligence of Tenant, its agents, or employees, or of any other person
entering
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upon the Premises under express or implied invitation of Tenant, or where
such injuries are the result of the violation of the provisions of this
Lease by any of such persons.
XIII. RESTORATION OF PREMISES; INSURANCE
A. In the event the Premises or the Building is damaged by fire or other
insured casualty and insurance proceeds have been made available therefor
to Landlord in an amount sufficient to fully and completely repair such
damage, Landlord shall cause such repairs to be performed, provided such
repairs can, in Landlord's reasonable opinion, be completed within 120 days
after the occurrence of such damage without the payment of overtime or
other premiums. Until such repairs are completed, the rent shall be abated
in proportion to the part of the Premises which is unusable by Tenant in
the conduct of its business (but there shall be no abatement of rent by
reason of any portion of the Premises being unusable for a period equal to
one day or less). If repairs cannot, in the reasonable opinion of
Landlord, be completed within such 120 days, or if the available insurance
proceeds are insufficient to fully and completely perform the repairs,
Landlord may elect to make repairs to the extent of the available insurance
proceeds within a reasonable time and in such event, this Lease shall
continue in effect and the rent shall be abated in the manner provided
above (except that Tenant shall have the right to terminate this Lease upon
notice to Landlord which notice must be given to Landlord not later than
ten (10) days after Landlord notifies Tenant of such election). If
Landlord elects not to make such repairs which cannot be completed within
120 days or paid for with available insurance proceeds, then either party
may, by written notice to the other within thirty (30) days after such
election, cancel this Lease as of the date of such notice. A total
destruction of the Building shall automatically terminate this Lease.
Notwithstanding the foregoing, if any such damage is caused by the act,
omission or negligence of Tenant or any of Tenant's officers, employees or
agents, there will be no rent abatement on account of such damage and
Tenant shall be liable to Landlord for the cost of repair and restoration
to the extent not covered by insurance proceeds. Tenant shall make
available and deliver to Landlord all insurance proceeds payable to Tenant
under the insurance policies which Tenant is required to maintain pursuant
to this Lease for coverage with respect to leasehold improvements, in
excess of building standard, to the Premises and Building, except for those
items listed in Exhibit F attached hereto.
B. Except for Landlord's willful misconduct or gross negligence, there shall
be no abatement of rent and no liability of Landlord by reason of any
injury to or interference with Tenant's business or property arising from
the making of any repairs, alterations or improvements in or to any portion
of the Building or the Premises or in or to fixtures, appurtenances and
equipment therein. Tenant understands that Landlord will not carry
insurance of any kind on the furniture and furnishings of Tenant or on any
fixtures or equipment removable by Tenant under the provisions of this
Lease, and that Landlord shall not be obligated to repair any damage
thereto or replace the same. Landlord shall not be required to repair any
injury or damage by fire or other cause, or to make any repairs or
replacements of improvements installed in the Premises by or for Tenant.
C. Tenant agrees to carry and maintain, for the mutual benefit of Landlord and
Tenant, during the term of this Lease and any extension hereof,
comprehensive general liability insurance in connection with the Premises
and Building Area, including coverage for bodily injury, property damage,
personal injury (employee and contractual liability exclusions deleted),
products and completed operations, contractual liability, owner's
protective liability, host liquor legal liability and broad form property
damage with the following minimum limits of liability: Two Million Dollars
($2,000,000.00) each occurrence combined single limit for bodily injury,
property damage and personal injury; Two Million Dollars ($2,000,000.00)
aggregate for bodily injury and property damage for products and completed
operations. All such insurance shall be procured from a responsible
insurance company or companies authorized to do business in Colorado, and
shall be otherwise satisfactory to Landlord. All such policies shall name
Landlord as an additional insured, and shall provide that the same may not
be canceled or altered except upon thirty (30) days' prior written notice
to Landlord. All insurance maintained by Tenant shall be primary to any
insurance provided by Landlord. If Tenant obtains any general liability
insurance policy on a claims-made basis, Tenant shall provide continuous
liability coverage for claims arising during the entire term of this Lease,
regardless of when such claims are made, either by obtaining an endorsement
providing for an unlimited extended reporting period in the event such
policy is canceled or not renewed for any reason whatsoever or by obtaining
new coverage with a retroactive date the same as or earlier than the
expiration date of the canceled or expired policy. Tenant shall provide
certificate(s) of such insurance to Landlord upon request from time to time
and such certificate(s)
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shall disclose that such insurance names Landlord as an additional insured,
in addition to the other requirements set forth herein. The limits of such
insurance shall not, under any circumstances, limit the liability of Tenant
hereunder.
D. Landlord shall maintain fire and extended coverage insurance on the
Building (including Building standard leasehold improvements) in amounts
determined by Landlord, with the cost thereof to be included in Building
Expenses under Article III of this Lease. Tenant agrees to maintain fire
and extended coverage insurance on all leasehold improvements in excess of
building standard with Landlord named as additional insured and insurance
coverage with respect to the personal property of Tenant located within the
Building, all at replacement cost.
E. Landlord and Tenant each hereby waives any and all causes of action and
rights of recovery against the other, its officers, members, partners,
employees and agents, for any loss or damage occurring to the Premises or
the Building, or the improvements, fixtures, merchandise and personal
property of every kind located in and about the Building to the extent
required to be covered by insurance (whether or not such insurance is
actually maintained) regardless of cause or origin, including the
negligence of either party, its officers, members, partners, employees or
agents. To the extent necessary to effect the foregoing waiver of
subrogation, Landlord and Tenant agree to obtain from their respective
insurance carriers endorsements to all appropriate policies of insurance
waiving the right of subrogation of the insurance carriers.
F. Whenever Landlord has an opportunity to make an election under this
Article, Landlord must make such election within sixty (60) days of the
occurrence of the event which gives rise to such opportunity. Whenever
Landlord elects under this Article to repair the Premises, the Premises
shall be repaired to building standard condition; however, in such event,
Tenant shall have the right to cause Landlord to repair the Premises to the
condition which existed prior to the applicable damage, provided that
Tenant or Tenant's insurance carrier pays to Landlord, in advance, that
portion of the cost of such repair in excess of the cost to repair the
Premises to building standard condition.
XIV. CONDEMNATION
If any portion of the Premises or any portion of the Building which shall
render the Premises untenantable shall be taken by right of eminent domain or by
condemnation or shall be conveyed in lieu of any such taking, then this Lease,
at the option of either Landlord or Tenant exercised by either party giving
notice to the other of such termination at least fifteen (15) days prior to such
anticipated taking or conveyance, shall terminate and the rent shall be duly
apportioned as of the date of such taking or conveyance. Tenant thereupon shall
surrender to Landlord the Premises and all interest therein under this Lease,
and Landlord may reenter and take possession of the Premises or remove Tenant
therefrom. In the event of any such taking or conveyance, Landlord shall
receive the entire award or consideration of the lands and improvements so taken
and Tenant hereby assigns to Landlord all rights of Tenant, if any, to receive
any such award or consideration (except any separate award reimbursing Tenant
for moving or relocation expenses or specifically allocated to Tenant's property
or improvements to the Premises which were paid for by Tenant).
XV. DEFAULT
The occurrence of any one or more of the following events shall constitute
an event of default:
A. Tenant shall fail to pay in full, when due, any amount of rent or any other
amount payable hereunder, and such failure shall continue for five (5) days
after written notice from Landlord to Tenant;
B. Tenant shall vacate or abandon the Premises for a period in excess of
thirty (30) consecutive days without the consent of Landlord;
C. Tenant's interest in this Lease or the Premises or any part thereof shall
be taken upon execution or by other process of law directed against Tenant,
or shall be subject to any attachment at the instance of any creditor or
claimant against Tenant, and said attachment shall not be discharged or
disposed of within thirty (30) days after the levy thereof;
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D. Tenant or any guarantor of Tenant's obligations hereunder shall file a
petition in bankruptcy or insolvency or for reorganization or arrangement
under the bankruptcy laws of the United States or under any insolvency act
of any state, or shall voluntarily take advantage of any such law or act by
answer or otherwise, or shall be dissolved or shall make a general
assignment for the benefit of creditors:
E. Involuntary proceedings under any such bankruptcy law or insolvency act or
for the dissolution of Tenant or any guarantor of Tenant's obligations
hereunder shall be instituted against Tenant or any guarantor of Tenant's
obligations hereunder, or a receiver or trustee shall be appointed for all
or substantially all of the property of Tenant or any guarantor of Tenant's
obligations hereunder, and such proceeding shall not be dismissed or such
receivership or trusteeship vacated within sixty (60) days after such
institution or appointment;
F. Tenant shall fail to comply with the provisions of Article VII or Article
VIII;
G. Tenant shall breach any of the other agreements, terms, covenants or
conditions hereof on Tenant's part to be performed, and such breach shall
continue for a period of thirty (30) days after notice thereof by Landlord
to Tenant; or
H. Tenant or any guarantor of Tenant's obligations hereunder shall be unable
to pay its debts as they become due.
Upon the occurrence of an event of default, Landlord shall have the right, at
its election, then or at any time thereafter, to the following remedies:
1. to give Tenant written notice of intention to terminate this Lease on
the date of such given notice or on any later date specified therein,
whereupon Tenant's right to possession of the Premises shall cease and
this Lease shall thereupon be terminated;
2. without demand or notice, to reenter and take possession of the
Premises or any part thereof, repossess the same, expel Tenant and
those claiming through or under Tenant, and remove the effects of both
or either, without being liable for prosecution thereof so long as due
care is used in such removal, without being deemed guilty of any
manner of trespass. Should Landlord elect to reenter as provided in
this Section 2, or should Landlord take possession pursuant to legal
proceedings or pursuant to any notice provided by law, Landlord shall,
without terminating this Lease, use its good faith efforts to relet
the Premises or any part thereof in Landlord's name for the account of
Tenant on such terms and conditions as Landlord then deems to be
reasonable in light of then current market conditions. Landlord shall
have the right to Lease any and all vacant space in the Building prior
to reletting the Premises. No such reentry or taking possession of
the Premises by Landlord shall be construed as an election on
Landlord's part to terminate this Lease unless a written notice of
such intention be given to Tenant. No notice from Landlord hereunder
or under a forcible entry and detainer statute or similar law shall
constitute an election by Landlord to terminate this Lease unless such
notice specifically so states. Landlord reserves the right following
any such reentry and/or reletting to exercise its right to terminate
this Lease by giving Tenant such written notice, in which event the
Lease will terminate as specified in said notice. Nothing in this
Article is intended to relieve Landlord of any obligation imposed by
Colorado law to mitigate damages in the event of a default by Tenant
hereunder.
In the event that Landlord does not elect to terminate this Lease as
permitted in Section 1 of this Article, but on the contrary, elects to take
possession as provided in Section 2 of this Article, Tenant shall pay to
Landlord (i) the rent, additional rent, Building Expenses and other sums as
herein provided, which would be payable hereunder if such repossession had not
occurred, less (ii) the net proceeds, if any, of any reletting of the Premises
after deducting all Landlord's expenses in connection with such reletting,
including, but without limitation, all repossession costs, brokerage
commissions, attorneys' fees, expenses of employees, alteration and repair costs
and expenses of preparation for such reletting. If, in connection with any
reletting, the new lease term extends beyond the existing term, or the premises
covered thereby include other premises not part of the Premises, a fair
apportionment of the rent received from such reletting and the expenses incurred
in connection therewith as provided aforesaid will be made in determining the
net proceeds from such reletting, and any rent concessions will be equally
apportioned
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over the term of the new lease. Tenant shall pay such rent and other sums to
Landlord monthly on the day on which the rent would have been payable hereunder
if possession had not been retaken and Landlord shall be entitled to receive the
same from Tenant on each such day.
In the event, however, this Lease is terminated by Landlord on account of
an event of default, Landlord shall be entitled to recover forthwith against
Tenant as damages for loss of the bargain and not as a penalty, an aggregate sum
which, at the time of such termination of this Lease, represents the excess of
the aggregate of the rent and all other sums payable by Tenant hereunder that
would have accrued for the balance of the term over the aggregate rental value
of the Premises (such rental value to be computed on the basis of a tenant
paying not only a rent to Landlord for the use and occupancy of the Premises,
but also such other charges as are required to be paid by Tenant under the terms
of this Lease) for the balance of such term both discounted to present value at
the rate of eight percent (8%) per annum.
Suit or suits for the recovery of the amount and damages set forth
hereinabove (and for amounts owing by Tenant to Landlord under this Lease prior
to Landlord's election of remedies under this Article) may be brought by
Landlord, from time to time, at Landlord's election, and nothing herein shall be
deemed to require Landlord to await the date whereon this Lease or the term
hereof would have expired had there been no event of default. Each right and
remedy provided for in this Lease shall be cumulative and shall be in addition
to every other right or remedy provided for in this Lease or now or hereafter
existing at law or in equity or by statute or otherwise, and the exercise or
beginning of the exercise by Landlord of any one or more of the rights or
remedies provided for in this Lease or now or hereafter existing at law or in
equity or by statute or otherwise shall not preclude the simultaneous or later
exercise by Landlord of any or all other rights or remedies provided for in this
Lease or now or hereafter existing at law or in equity or by statute or
otherwise.
Nothing contained in this Article shall limit or prejudice the right of
Landlord to prove and obtain as liquidated damages in any bankruptcy,
insolvency, receivership, reorganization or dissolution proceeding, an amount
equal to the maximum allowed by any statute or rule of law governing such
proceeding and in effect at the time when such damages are to be proved, whether
or not such amount be greater, equal to or less than the amounts recoverable,
either as damage or rent, referred to in any of the preceding provisions of this
Article.
Notwithstanding anything contained in this Article to the contrary, any
such proceeding or action involving bankruptcy, insolvency, reorganization,
arrangement, assignment for the benefit of creditors, or appointment of receiver
or trustee, as outlined in this Article, shall be considered to be an event of
default only when such proceeding, action or remedy shall be taken or brought by
or against the then holder of the leasehold estate under this Lease (which
holder must have been consented to by Landlord pursuant to Article VI).
XVI. LANDLORD'S DEFAULT
In the event Tenant alleges any default by Landlord hereunder, Tenant shall
deliver to Landlord written notice and Landlord shall have thirty (30) days
following receipt of such notice to cure such alleged default or, in the event
such alleged default cannot reasonably be cured within such 30-day period, to
commence action to cure such alleged default within a reasonable time. A copy
of such notice shall be sent by registered mail to any holder of a mortgage or
other encumbrance on the Building the name and address of which Tenant has been
notified in writing (by way of notice of assignment of rents and leases or
otherwise), and such holder shall also have the same time period to cure such
alleged default, which period shall begin to run thirty (30) days after the
expiration of any period allowed Landlord hereunder, or if such default cannot
be cured within that time, then such additional time as may be necessary to
effect such cure, so long as such holder commences such cure within such thirty
(30) day period and thereafter diligently pursues any remedies necessary or
appropriate for curing such default (including, but not limited to, commencement
of foreclosure proceedings), in which event this Lease shall not be terminated
while such remedies are being so diligently pursued.
Notwithstanding anything to the contrary expressly or impliedly contained
in this Lease, there shall be absolutely no personal liability of any person,
firm, partnership, association, or other entity who or which constitutes
Landlord, or of any shareholders, directors, officers, members, partners,
employees, or agents of Landlord, under or with respect to any of the terms,
covenants, or provisions of this Lease, or of any violation hereof, and Tenants
shall, subject to the rights of any mortgagees, fee owners and ground Lessors,
look solely to the interest of Landlord in the Building for the satisfaction of
each and every claim
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and remedy of Tenant in the event of any default or violation whatever by
Landlord hereunder; such exculpation of personal liability is absolute and
without any exception or modification whatever, now or hereafter.
XVII. SURRENDER; HOLDING OVER; PERSONAL PROPERTY
A. Upon termination of this Lease, either by lapse of time or otherwise,
Tenant shall peaceably surrender the Premises in good condition and repair
except for ordinary wear and tear. Tenant shall remove Tenant's moveable
personal property from the Premises upon such termination and shall repair
all damages to the Premises caused by such removal.
B. No surrender of the Premises shall be effected by Landlord's acceptance of
the keys or of the rent or by any other means whatsoever without Landlord's
written acknowledgment of such acceptance as a surrender.
C. Should Tenant, with or without Landlord's written consent, hold over after
the termination of this Lease, Tenant shall become a Tenant from month-to-
month upon each and all of the terms herein provided. During such holding
over, Tenant shall pay base rent at the rate of 150% of the highest monthly
rate provided for herein and shall pay all other rent and other amounts
owing to Landlord hereunder. Such month-to-month tenancy shall continue
until either party gives to the other party notice at least one month prior
to the date of termination of its intention to terminate such tenancy.
D. All movable personal property of Tenant not removed from the Premises upon
the abandonment thereof or upon the termination of this Lease for any cause
whatsoever shall conclusively be deemed to have been abandoned and may be
appropriated, sold, stored, destroyed or otherwise disposed of by Landlord
without notice to Tenant or any other person and without obligation to
account therefor; and Tenant shall pay Landlord all expenses incurred in
connection with the disposition of such property in excess of any amount
received by Landlord in connection with such disposition.
E. During the term hereof, Tenant shall pay prior to delinquency all taxes
assessed against and levied upon fixtures, furnishings, equipment and all
other personal property of Tenant contained in the Premises, and Tenant
shall cause said fixtures, furnishings, equipment and other personal
property to be assessed and billed separately from the real property of
Landlord.
XVIII. COVENANT OF QUIET ENJOYMENT
Landlord covenants that Tenant shall be granted peaceable and quiet
enjoyment of the Premises during the term hereof so long as Tenant punctually
(i) pays the rent and all other amounts payable by Tenant hereunder and (ii)
performs all of Tenant's other covenants and obligations hereunder.
XIX. NOTICES
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given when personally delivered, or if mailed
by certified mail, upon first attempted delivery by the U.S. Postal Service,
return receipt requested or if delivered via Federal Express or similar
overnight courier service, when received, or if by facsimile, on a business day
if received before 5:00 p.m. local time on such business day, or on the next
business day, if received after 5:00 p.m. local time on a business day or any
time on a non-business day. Such notices or other communications shall be sent
to the following addresses, unless other addresses are subsequently specified in
writing:
LANDLORD: SFP Realty, Ltd., L.L.P.
5414 Westridge Dr.
Boulder, Colorado 80301
ATTN: Tim Borst, Managing General Partner
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TENANT: Colorado Business Bank of Boulder
1900 15th Street
Boulder, Colorado 80302
ATTN: Charles Holmes, President
provided, however, that either party may change its address for purposes of
receipt of any such communication by giving ten (10) days' prior written notice
of such change to the other party in the manner prescribed above.
XX. MISCELLANEOUS
A. Subject to the provisions of Article VI, all agreements, covenants and
obligations of this Lease shall be binding upon, apply and inure to the
benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.
B. This Lease contains the entire agreement between the parties and may be
amended only by subsequent written agreement. No promises or
representations, except as herein contained, have been made to Tenant
respecting the condition of the Premises or the manner of operating the
Building.
C. The captions of the various Articles of this Lease are for convenience only
and do not necessarily define, limit, describe or construe the contents of
such Articles.
D. The words "Landlord" and "Tenant" as used herein shall include the plural
as well as the singular. Words used herein in one gender shall include the
other genders, where applicable. If there be more than one Tenant, the
obligations hereunder imposed upon Tenant shall be joint and several.
E. Time is of the essence of this Lease and each and all of its provisions.
F. Submission of this instrument for examination or signature by Tenant does
not constitute a reservation of or option for Lease, and it is not
effective as a Lease or otherwise until execution and delivery by both
Landlord and Tenant.
G. In addition to late charges imposed pursuant to Article III, Section G of
this Lease, any amount due from Tenant to Landlord pursuant to this Lease
which is not paid when due shall bear interest at two percent per annum
above the prime interest rate of Norwest Bank of Denver, National
Association, or its successor from the due date until paid, but the payment
of such interest shall not excuse or cure any default by Tenant under this
Lease, and in no event shall such rate exceed the highest rate allowed by
law in Colorado.
H. Any provisions of this Lease which shall prove to be invalid, void or
illegal shall in no way affect, impair or invalidate any other provision
hereof and such other provisions shall remain in full force and effect.
I. This Lease shall be governed by and construed pursuant to the laws of the
State of Colorado.
J. If any demand is made or action is brought to enforce the provisions of
this Lease, the prevailing party shall be entitled to recover from the
other party all expenses, including reasonable attorneys' fees, incurred in
connection with such demand or action, including any appeal.
K. Landlord shall not be liable to Tenant for any default under this Lease
which occurs after the sale of the Building by Landlord, nor shall Tenant
bring any action against Landlord under this Lease after the sale of the
Building by Landlord and Tenant agrees that its rights with respect to any
such default shall be asserted against Landlord's successor in interest.
L. Landlord may, at its option, make any payment or perform any defaulted
covenant or agreement of Tenant contained herein, and any monies advanced
by Landlord for such purposes (including expenses and reasonable attorneys'
fees) shall be immediately due and payable by Tenant to Landlord.
-12-
<PAGE>
M. Within ten (10) days of notice from the other party, each party agrees to
provide such other party with reasonable evidence (e.g., an opinion of
counsel or a corporate, partnership or limited liability company
resolution) that this Lease has been duly executed, authorized and
delivered by such party.
N. No failure by either party to insist upon the strict performance of any
agreement, term, covenant or condition hereof or to exercise any right or
remedy consequent upon a breach thereof, and no acceptance of full or
partial rent during the continuance of any such breach, shall constitute a
waiver of any such breach of such agreement, term, covenant or condition or
a relinquishment of the right to exercise such right or remedy. No
agreement, term, covenant or condition hereof to be performed or complied
with by either party, and no breach thereto, shall be waived, altered or
modified except by written instrument executed by the other party. No
waiver of any breach shall affect or alter this Lease, but each and every
agreement, term, covenant and condition hereof shall continue in full force
and effect with respect to any other then existing or subsequent breach
thereof. Notwithstanding any termination of this Lease the same shall
continue in force and effect as to any provisions hereof which require
observance or performance of Landlord or Tenant subsequent to termination.
O. Landlord shall have absolutely no personal liability with respect to any
provision of this Lease or any obligation or liability arising from this
Lease or in connection with this Lease in the event of a breach or default
of Landlord of any of its obligations. Tenant shall look solely to the
Landlord's equity in the Building at the time of the breach or default for
the satisfaction of any remedies of Tenant. Such exculpation of liability
shall be absolute and without any exception whatsoever.
XXI. CONSTRUCTION OF LEASEHOLD IMPROVEMENTS
Landlord shall make improvements and alterations to the Premises in
accordance with Exhibit E attached hereto. Any and all improvements or
additions now or in the future situated in or upon the Premises, whether
constructed or installed by, for or at the expense of Landlord or Tenant,
including improvements made to the Premises pursuant to Exhibit E attached
hereto, other than the items listed on the attached Exhibit F, are and shall
become a part of the Premises, and will become Landlord's property, without
compensation to Tenant, and Tenant shall have only a leasehold interest therein,
subject to all of the terms and conditions of the Lease. Tenant shall have the
option to remove from the Premises the personal property listed on Exhibit F
hereto, provided such items are removed within fourteen (14) days following
termination of this Lease. In the event Tenant fails to remove such personal
property within such fourteen (14) day period, all such personal property
remaining on the Premises shall become the property of Landlord, without
compensation to Tenant. Landlord may elect, at Landlord's option, that any of
the personal property set forth on Exhibit F and any alterations or improvements
made in connection therewith shall be removed by Tenant upon termination of this
Lease, and Tenant shall remove the same within fourteen (14) days following
termination hereof, shall repair any damages caused by such removal and shall
return the Premises to the condition existing prior to installation of such
personal property, alterations and improvements.
XXII. ADDITIONAL PROVISIONS
The additional provisions set forth in Exhibit B attached hereto constitute
part of this Lease.
IN WITNESS WHEREOF the parties hereto execute this Lease the day and year
first above written.
LANDLORD: SFP REALTY, LTD., L.L.P.
A COLORADO LIMITED LIABILITY PARTNERSHIP
By:/s/ Tim Borst
-------------
Tim Borst, Managing General Partner
-13-
<PAGE>
TENANT: COLORADO BUSINESS BANK OF BOULDER, NATIONAL ASSOCIATION
By: /s/ Charles Holmes
---------------------
Charles Holmes
Its: /s/ President
--------------------
President
-14-
<PAGE>
EXHIBIT A
LEGAL DESCRIPTION
Legal Description: Lot 10, (Revised), Block 88, East Boulder, City of
Boulder, County of Boulder, State of Colorado,
according to the Lot Line Adjustment as recorded
January 11, 1991 on Film 1658 at Reception No.
1083138 in Plan File P-25 F-3 #10.
Location of the Building: 2025 Pearl Street
Boulder, Colorado 80302
A-1
<PAGE>
EXHIBIT B
ADDITIONAL PROVISIONS
1. Rent. Upon commencement of the Lease, Tenant shall pay to Landlord as
----
base rent without offset or reduction in the sum of One Hundred Twenty-Three
Thousand Dollars ($123,000.00) per year, payable in equal monthly installments
of Ten Thousand Two Hundred Fifty Dollars ($10,250.00), on the first day of each
month (the "Base Rental Rate"). After the first year of the Primary Lease Term,
the Base Rental Rate shall be increased based upon the annual Consumer Price
Index for all Urban Consumers in the Boulder and Denver metropolitan area.
Notwithstanding the foregoing, the increase to the Base Rental Rate will not be
less than three percent (3%) nor more than six percent (6%) annually.
2. Options to Extend. Tenant shall have two (2) consecutive options
-----------------
("Option to Extend") to extend the Primary Lease Term for two (2) additional
five-year terms ("Extension Term"), at its discretion, and providing there
exists no event of default, as defined in the Lease, at the time for Tenant to
exercise such option to extend. In order to exercise each Option to Extend,
Tenant must deliver written notice to such effect (the "Extension Notice") to
Landlord not more than 540 days prior, nor less than 360 days prior to the date
upon which the Lease would expire. Failure by Tenant to exercise any one Option
to Extend shall terminate Tenant's right to exercise any subsequent Option to
Extend. All of the terms, conditions and provisions of this Lease shall remain
in full force and effect during each Extension Term except as follows: (i) the
Lease termination date shall be deemed to be changed to reflect the expiration
of each Option to Extend so exercised by Tenant and (ii) the Base Rental Rate
for each lease year of the Extension Term shall be the market value as
determined by the Landlord in its reasonable discretion, and shall be subject to
adjustment as described in Exhibit B, Paragraph 1 above.
3. Parking. Tenant shall have exclusive use of the parking spaces located
-------
on the north side of the Building. Landlord and Tenant shall execute a mutually
agreeable parking lease ("Parking Lease") for not less than four (4) and not
more than eight (8) parking spaces on property adjacent to the Building owned by
Landlord. Such leased adjacent parking shall be included in the Building Area
(defined in Article III, Section C of the Lease). The Parking Lease shall be
for a period of ten (10) years with a base rate of Twenty-Five Dollars ($25.00)
per month per space (the "Parking Base Rate"). The Parking Base Rate shall be
increased annually under the same terms as the Base Rental Rate. Provided,
however, that in consideration of this Lease, Landlord shall waive all Parking
Lease payments for the first 24 months of this Lease. Thereafter, the Parking
Base Rate shall be increased annually as provided herein for years three (3)
through five (5) of the Parking Lease. Beginning in year six (6) of the Parking
Lease, the Parking Base Rate shall be the market value as determined by Landlord
in its reasonable discretion and shall be subject to annual adjustment under the
same terms as the Base Rental Rate. Contingent upon Tenant's exercise of each
Option to Extend, Tenant shall have two (2) consecutive five (5) year options to
renew the Parking Lease at fair market value to be determined in the Landlord's
reasonable discretion. Failure by Tenant to exercise any one Option to Extend
shall terminate Tenant's right to renew the Parking Lease.
4. First Option to Purchase. If Landlord decides during the Lease Term
------------------------
and any extensions thereof to market and sell the Building as a stand alone
building, then Tenant shall be granted an exclusive negotiation period of forty-
five (45) days within which to negotiate with the Landlord for the purchase of
the Building prior to Landlord marketing the Building to the general public.
5. Building Name. The Building shall be renamed and shall become the
-------------
"Colorado Business Bank Building" or any successor name thereto and shall remain
so for the primary term of the Lease and any extension thereto.
6. Miscellaneous. This Lease shall be conditioned upon approval of
-------------
Tenant's use of the Premises for a business bank by the City of Boulder Planning
Department (the "City"). Should said use be denied by the City, this Lease
shall immediately terminate. In the event the City has not approved Tenant"s
use of the Premises on or before January 1, 1999, Landlord shall have the right,
at its option, to terminate this Lease upon 72 hours written notice to Tenant.
During the City's use approval process and prior to final approval, Landlord may
continue to market the Premises for lease to other parties. If a bona fide
acceptable lease proposal is received by Landlord from a third party,
B-1
<PAGE>
Landlord will notify Tenant of such proposal and Tenant shall have 72 hours from
receipt of such proposal to exercise either of the following options:
a) Terminate this Lease, provided, however, such termination shall
not be effective unless and until Landlord enters into a binding
lease agreement with such third party; or
b) Commence payment of the Base Rental Rate, Building Expenses and
all other sums due hereunder on or before November 1, 1998.
B-2
<PAGE>
EXHIBIT C
TENANT'S CERTIFICATE
The undersigned as Tenant under that certain lease dated
-----------------
made with and Landlord (the "Lease"),
--------------------------------------
hereby certifies as follows:
(1) That the undersigned has entered into occupancy of the premises
described in the Lease;
(2) That the Lease is in full force and effect and has not been
assigned, modified, supplemented or amended in any way, except
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------;
(3) That the Lease represents the entire agreement between the
parties;
(4) That the commencement date of the Lease is ;
----------------
(5) That there is an unexpired term under the Lease of
---------------
years;
(6) That all conditions of said work to be performed by Landlord and
necessary to the enforceability of the Lease have been satisfied;
(7) That there are no defaults on the part of the Landlord under the
Lease;
(8) That no rents have been prepaid other than as provided in the
Lease;
(9) That on this date there are no existing defenses or offsets which
the undersigned has against the enforcement of the Lease by Landlord; and
(10) That the construction to be done by Landlord pursuant to Exhibit
"E" attached to the Lease has been completed.
The undersigned hereby agrees:
(1) To disclaim all right, title or interest in said premises except
the rights granted by the Lease;
(2) To send a copy of any notice or demand given or made to the
Landlord pursuant to the provision of the Lease, by registered mail to the owner
and holder of any mortgage on the first mortgage on the demised premises, or its
assignee upon being notified in writing of such mortgage's or assignee's name
and address, and;
(3) To give to the holder of said mortgage or its assignee the same
right as the Landlord has to cure any default complained of in said notice or
demand.
EXECUTED this day of 19 .
------- --------------------- --
TENANT:
By
--------------------------------
(Print Name)
----------------------
(Print Title)
---------------------
C-1
<PAGE>
EXHIBIT D
RULES AND REGULATIONS
1. At all times during the term of this Lease, Landlord shall have the right
by itself, its agents and employees, to enter into and upon the Premises
during reasonable business hours for the purpose of examining and
inspecting the same and determining whether Tenant shall have complied with
its obligations under the Lease, including the Rules and Regulations.
2. Tenant shall not make or permit any noise or odor that is objectionable to
the public or to other occupants of the Building to emanate from the
Premises, shall not create or maintain a nuisance thereon and shall not do
anything tending to injure the reputation of the Building or the Premises.
3. Tenant shall not place or permit any radio antennae, loud speakers, sound
amplifiers, or similar devices on the roof or outside of the Building.
4. The sidewalks, entrances, passages, elevators, vestibules, stairways,
corridors and halls may not be obstructed or used for any purpose other
than ingress or egress to and from the Premises.
5. Landlord may retain a passkey to the Premises. Tenant shall not alter any
lock or install a new lock on any door of the Premises without the prior
written consent of Landlord; if such consent is given, Tenant shall provide
Landlord with an additional key for the use of Landlord.
6. Upon leaving the Premises, Tenant shall close and lock all windows and
doors of the Premises, and shall shut off all water faucets and major
electrical apparatus located within the Premises.
7. Tenant shall not place any sign upon the Premises without Landlord's prior
written consent, which consent shall not be unreasonably withheld.
Landlord reserves the right to reasonably designate all contractors for
sign painting and lettering.
8. Tenant shall, upon termination of the Lease or of Tenant's possession,
surrender all keys of the Premises to Landlord at the place then fixed for
the payment of rent and shall provide Landlord with all combinations and
keys for any locks, safes, cabinets and vaults remaining in the Premises.
The failure of Landlord to enforce any of the Rules and Regulations shall
not be deemed a waiver of any of such Rules and Regulations. Landlord shall not
be liable to Tenant for violation of any of the Rules and Regulations or the
breach of any covenant or condition in any lease by any other tenant in the
Building, if any.
No act or thing done or omitted to be done by Landlord or Landlord's agent
during the term of the Lease to enforce the Rules and Regulations shall
constitute an eviction of Tenant by Landlord, nor shall it be deemed an
acceptance or surrender of said Premises; no agreement to accept such surrender
shall be valid unless in writing signed by Landlord.
D-1
<PAGE>
EXHIBIT E
LEASEHOLD IMPROVEMENTS AGREEMENT
RECITALS
1. This Leasehold Improvements Agreement (this "Agreement") is attached to
and forms a part of the certain Office Lease dated September 25, 1998, pursuant
to which Landlord has leased to tenant the building (the "Premises") located at
2025 Pearl Street, Boulder, Colorado 80302.
2. Tenant desires to have Landlord make improvements (the "Improvements")
to the Premises, prior to occupancy, and Landlord desires to make such
Improvements upon the terms and conditions contained in this Agreement.
AGREEMENT
A. Definitions. The following terms have the meanings indicated:
-----------
(1) "Amount Financed" shall mean the amount of the loan which
Landlord is able to obtain for purposes of financing the
Landlord's Cost of Improvements (defined below), as set forth in
Paragraph B(1) hereof.
(2) "Change Order" shall mean any change, modification, or addition
to the Final Space Plan (defined below) or Working Drawings
(defined below) after Landlord has approved the same.
(3) "Construction Schedule" means a schedule depicting the relative
time frames for various activities related to the construction of
the Improvements in the Premises.
(4) "Landlord's Cost of Improvements" means and shall include the
following, provided, however, such cost shall in no event exceed
$375,000.00 and may be adjusted in accordance with Paragraph B(1)
hereof:
(a) All contractor and construction manager costs and fees;
(b) All permits and taxes;
(c) All costs of constructing and installing the Improvements;
(d) The cost of the Landlord's overhead for coordination and
administration at a rate of 5% of the total cost to the
Landlord of the above; and
(e) All costs relating to leasing fees or commissions.
(5) "Tenant's Cost of Improvements" means and shall include the
following:
(a) All architectural and engineering fees and expenses;
(b) All costs of Tenant-initiated changes to the Final Space
Plan or Working Drawings after Tenant's approval; and
(c) All costs of Tenant-initiated change orders,
modifications, or additions to the Improvements after
Tenant's approval of the Working Drawings.
(6) "Estimated Construction Cost" means a preliminary estimate of
the Landlord's Cost of Improvements.
(7) "Final Space Plan" means a drawing of the Premises clearly
showing the layout and relationship of all departments and
offices, depicting partitions, door locations, types of
electrical, data and telephone outlets, delineation of
furniture and equipment, and all other general specifications
for the Improvements. The Final Space Plan will be preceded by
preliminary
E-1
<PAGE>
space plans.
(8) "Improvements" means:
(a) The development of all space plans and working drawings,
including supporting engineering studies, structural
design or analysis, lighting or acoustical evaluations,
and all other information as determined by Landlord's
architect; and
(b) All work, alterations, improvements and installations to
be performed and constructed by Landlord pursuant to this
Agreement to create the details and partitioning shown on
the Working Drawings. The Improvements will include
finished ceilings, walls, and floor surfaces, as well as
complete HVAC, lighting, electrical, telephone wiring,
computer system wiring, and fire protection systems. The
Improvements will NOT include personal property items,
such as decorator items or services, art work, plants,
furniture, equipment, or other fixtures not permanently
affixed to the Premises or installation of a vault or
automatic teller machine, furniture for teller stations,
wiring for special equipment necessary for bank
operations.
(9) "Landlord's Cost Proposal" means a final estimate of the
Landlord's Cost of Improvements as depicted on the Working
Drawings, excluding all architectural, engineering, contractor,
and other costs to be paid by Tenant pursuant to this
Agreement.
(9) "Working Drawings" means the construction documents detailing
the Improvements and conforming to codes, complete in form and
content and containing sufficient information and detail to
allow for competitive bidding or negotiated pricing by
contractors selected and engaged by Landlord.
B. Landlord's Obligations.
----------------------
(1) Colorado Business Bank agrees to loan landlord $375,000 to be
used towards Landlord's cost of Improvements on commercially
reasonably terms.
(2) Landlord will proceed to complete the Improvements according to
this Agreement and tender possession of the Premises to Tenant
upon substantial completion of the Improvements to the extent
that only minor construction details, which would not
materially interfere with Tenant's use and enjoyment of the
Premises, require completion or correction. Tenant will accept
the Premises when Landlord tenders possession, provided that
the Improvements have been substantially completed as described
above. Landlord and Tenant agree that all alterations,
improvements and additions made to the Premises according to
this Agreement, whether paid for by Landlord or Tenant, will,
without compensation to Tenant, become Landlord's property upon
installation and will remain Landlord's property at the
expiration or earlier termination of the term of the Lease,
unless otherwise expressly provided herein.
C. Tenant's Obligations. Tenant will promptly pay all Tenant's Cost of
--------------------
Improvements within thirty (30) days of receipt of an invoice for same. Tenant
shall cooperate with Landlord in all respects in the construction of the
Improvements.
D. Project Design and Construction. All work will be performed by
-------------------------------
architects, designers and contractors selected and engaged by Landlord.
E-2
<PAGE>
E. Landlord's Approval. Landlord, in its sole discretion, may withhold
-------------------
its approval of the Final Space Plan, Working Drawings, or any change order
that:
(1) Exceeds or adversely affects the structural integrity of the
Building, or any part of the heating, ventilating, air
conditioning, plumbing, mechanical, electrical, communication,
or other systems of the Building;
(2) Is not approved by the holder of any mortgage or deed of trust
encumbering the Building at the time the work is proposed;
(3) Would not be approved by a prudent owner of property similar to
the Building;
(4) Violates any agreement that affects the Building or binds
Landlord;
(5) Landlord reasonably believes will materially increase the cost
of operation or maintenance of any of the systems of the
Building;
(6) Landlord reasonably believes will materially reduce the market
value of the Premises or the Building at the end of the term;
(7) Does not conform to applicable building code or is not approved
by any governmental, quasi-governmental, or utility authority
with jurisdiction over the Premises.
(8) Would cause the Landlord's Cost of Improvements to exceed the
Amount Financed.
F. Schedule of Improvement Activities.
----------------------------------
(1) Tenant shall submit a "Final Space Plan" to Landlord as part of
this Lease. Within five (5) days after receipt of the Final
Space Plan, Landlord will promptly cause to be prepared and
delivered to Tenant the written Estimated Construction Cost.
In the event the Estimated Construction Cost exceeds the Amount
Financed, Landlord may modify the Final Space Plan in its
reasonable discretion in order to assure that the Estimated
Construction Cost will not exceed the Amount Financed. Landlord
will submit to Tenant said modifications for Tenant's approval,
which shall not be unreasonably withheld (the "Revised Space
Plan").
(2) Upon approval of the Estimated Construction Cost, Landlord will
cause to be prepared and delivered to Tenant the Working
Drawings, finish schedules, the Construction Schedule, and the
Landlord's Cost Proposal for the Improvements in accordance
with the Final or Revised Space Plan. If the Landlord's Cost
Proposal is less than the Estimated Construction Cost, Landlord
will commence construction of the Improvements to the Premises.
If the Landlord's Cost Proposal is more than the Estimated
Construction Cost, Landlord will so notify Tenant in writing
and Tenant will either (1) agree in writing to pay the amount
by which the Landlord's Cost Proposal exceeds the Estimated
Construction Cost or (2) agree to reasonable revisions to the
Working Drawings in order to assure that Landlord's Cost
Proposal does not exceed the Amount Financed. Tenant will give
its immediate attention to the Working Drawings and Landlord's
Cost Proposal approval process and respond to Landlord within 3
business days after submissions are made to it.
(3) Following approval of the Working Drawings and the Landlord
Cost Proposal, Landlord will cause application to be made to
the appropriate governmental authorities for necessary
approvals and building permits. Upon receipt of the necessary
approvals and permits, Landlord will begin
E-3
<PAGE>
construction of the Improvements.
G. Change Orders. Tenant may seek changes to the Improvements during
-------------
construction only by written request to Landlord on a form approved by Landlord.
All such changes will be subject to Landlord's prior written approval in
accordance with paragraph D. Prior to commencing any change, Landlord will
prepare and deliver to Tenant, for Tenant's approval, a change order setting
forth the total cost of such change, which will include associated
architectural, engineering, construction contractor's costs and fees, completion
schedule changes, and the cost of Landlord's overhead. If Tenant fails to
approve such change order within 3 business days after delivery by Landlord,
Tenant will be deemed to have withdrawn the proposed change and Landlord will
not proceed to perform the change. Upon Landlord's receipt of Tenant's
approval, Landlord will proceed with the change. Tenant shall bear the
additional cost of any change that would have the effect of increasing any line
item in Landlord's Cost Proposal.
H. Completion and Commencement Date. Tenant's obligation for payment of
--------------------------------
rent pursuant to the Lease will commence upon issuance of a certificate of
occupancy for the Building by the City of Boulder or January 1, 1999, whichever
is later, provided, however, the payment of rent will not be delayed by a delay
of substantial completion due to Tenant. The following are some examples of
delays that will not affect the date on which rent is to commence under the
Lease:
(1) Late submissions of Information;
(2) Change orders requested by Tenant;
(3) Delays in obtaining unusual or non-building standard
construction materials requested by Tenant;
(4) Tenant's failure to approve timely any item requiring Tenant's
approval; and
(5) Delays by Tenant according to paragraph F hereof.
I. Condition of the Premises.
-------------------------
(1) Upon Landlord's determination and written notice to Tenant
that the Improvements are substantially complete, Tenant will
conduct a walkthrough inspection of the Premises with Landlord
and prepare a punchlist of items needing additional work by
Landlord. Other than the items specified in the punchlist and
Latent Defects (as defined below), by taking possession of the
Premises, Tenant will be deemed to have accepted the Premises
in their condition on the date of delivery of possession and
to have acknowledged that Landlord has installed the
Improvements as required by this Agreement and that there are
no items needing additional work or repair. The punchlist will
not include any damage to the Premises caused by Tenant's
move-in or early access, if permitted. Damage caused by Tenant
will be repaired or corrected by Landlord at Tenant's expense.
Tenant acknowledges that neither Landlord nor its agents or
employees have made any representations or warranties as to the suitability or
fitness of the Premises for the conduct of Tenant's business or for any other
purpose, nor has Landlord or its agents or employees agreed to undertake any
alterations or construct any improvements to the Premises except as expressly
provided in the Lease and this Agreement. If Tenant fails to submit a punchlist
to Landlord within three (3) business days following Tenant's receipt of notice
from Landlord that the Improvements are substantially complete, it will be
deemed that there are no items needing additional work or repair. Landlord's
contractor will complete all reasonable punch-list items within 30 days after
the walk-through inspection or as soon as practicable after such walk-through.
(2) A "Latent Defect" is a defect in the condition of the Premises,
caused by Landlord's failure to construct the Improvements in a
good and workmanlike manner and in accordance with the Working
Drawings, which would not ordinarily be observed during a walk-
through inspection. If Tenant
E-4
<PAGE>
notifies Landlord of a Latent Defect within one year following
the date of this Agreement, then Landlord, at its expense, will
repair the latent defect as soon as practicable. Except as set
forth in this paragraph H, Landlord will have no obligation or
liability to Tenant for Latent Defects.
(3) No approval by Landlord's architect or engineer of any
drawings, plans, or specifications which are prepared in
connection with construction of the Improvements in the
Premises will constitute a representation or warranty by
Landlord as to the adequacy or sufficiency of such drawings,
plans, or specifications, or the Improvements to which they
relate, for any use, purpose, or condition, but such approval
will merely be the consent of Landlord to the construction or
installation of the Improvements in the Premises according to
such drawings, plans, or specifications.
EXECUTED to be effective as of the date of the Amendment to which this
Agreement is attached.
LANDLORD: SFP REALTY, LTD., L.L.P.
A COLORADO LIMITED LIABILITY PARTNERSHIP
By: /s/ Tim Borst
--------------------
Tim Borst, Managing General Partner
TENANT: COLORADO BUSINESS BANK OF BOULDER, NATIONAL ASSOCIATION
By: /s/ Charles Holmes
-------------------------
Charles Holmes
Its: President
------------------------
President
E-5
<PAGE>
EXHIBIT F
TENANT'S PROPERTY, REMOVAL AT END OF LEASE TERM
1. The following equipment and provisions may be added to the Premises
at Tenant's sole cost and expense and may be removed at the end of this Lease
pursuant to the terms and conditions set forth for removal contained in this
Lease:
(a) a vault;
(b) an ATM machine;
(c) a teller station(s)
(d) together with all other non-fixture items, paid for, installed
or supplied by Tenant.
F-1
<PAGE>
EXHIBIT 10.3
OFFICE BUILDING LEASE
THE EDWARD BUILDING
8400 EAST PRENTICE AVENUE
ENGLEWOOD, COLORADO
BETWEEN
HANOVER RESOURCES INC.
AND
COLORADO BUSINESS BANK, N.A.
----------------------------
<PAGE>
TABLE OF CONTENTS
PARAGRAPH PAGE
- --------- ----
1. PREMISES 1
2. TERM 1
3. RENT 1
4. SECURITY DEPOSIT 2
5. RENT ADJUSTMENT 2
6. CHARACTER OF OCCUPANCY 6
7. SERVICES AND UTILITIES 7
8. QUIET ENJOYMENT 8
9. MAINTENANCE AND REPAIR 8
10. ALTERATIONS AND ADDITIONS 9
11. ENTRY BY LANDLORD 10
12. MECHANIC'S LIENS 10
13. DAMAGE TO PROPERTY, INJURY TO PERSONS 11
14. INSURANCE 11
15. DAMAGE OR DESTRUCTION TO BUILDING 13
16. CONDEMNATION 13
17. ASSIGNMENT AND SUBLETTING 16
18. ESTOPPEL CERTIFICATE 17
19. DEFAULT 17
20. LANDLORD'S LIEN 21
21. UNIFORM COMMERCIAL CODE 21
22. COMPLETION OF PREMISES 21
23. REMOVAL OF TENANT'S PROPERTY 22
24. HOLDING OVER 22
25. PARKING AND COMMON AREAS 22
26. SURRENDER AND NOTICE 24
27. ACCEPTANCE OF PREMISES BY TENANT 24
28. SUBORDINATION AND ATTORNMENT 24
29. PAYMENTS AFTER TERMINATION 25
30. AUTHORITIES FOR ACTION AND NOTICE 25
31. LIABILITY OF LANDLORD 26
32. BROKERAGE 26
33. TAXES 26
34. LANDLORD'S RIGHT TO SUBSTITUTE PREMISES 27
35. RIGHTS RESERVED TO LANDLORD 27
36. FORCE MAJEURE CLAUSE 28
37. SIGNAGE 28
38. ATTORNEYS' FEES 28
39. HAZARDOUS MATERIALS 28
40. BANKRUPTCY OR INSOLVENCY 29
41. MISCELLANEOUS 30
EXHIBITS:
A - PREMISES
B - LEGAL DESCRIPTION
C - ESTOPPEL AND COMMENCEMENT DATE CERTIFICATE
D - WORK LETTER AGREEMENT
E - PARKING SCHEDULE
F - RULES AND REGULATIONS
G - [INTENTIONALLY DELETED]
H - LEASE ADDENDUM
<PAGE>
OFFICE BUILDING LEASE
THIS LEASE is made this _____ day of _________, 19__ between HANOVER RESOURCES
INC., a COLORADO CORPORATION ("Landlord") and COLORADO BUSINESS BANK, N.A., a
COLORADO CORPORATION ("Tenant").
1. PREMISES: Landlord hereby leases to Tenant those certain premises designated
--------
on the Plans attached hereto as Exhibit A and incorporated herein by this
reference (the "Premises"), consisting of a total of approximately 3,841
square feet of space (Rentable Area) on the FIRST (1st) floor(s), suite(s)
150 of the building known as THE EDWARD BUILDING located at 8400 EAST
PRENTICE AVENUE, ENGLEWOOD, COLORADO 80111 (hereinafter the "Building"),
located on the real property more particularly described on Exhibit B
attached hereto and incorporated herein by this reference, together with a
non-exclusive right, subject to the provisions hereof, to use all
appurtenances thereunto, including, but not limited to, those areas
designated by Landlord for use by tenants of the Building (the Building,
real property on which the same is situated, other areas and appurtenances
are hereinafter collectively sometimes called the "Building Complex"). For
purposes of this Lease, "Rentable Area" shall mean a measure of area
expressed in square feet computed by measuring the distance between the
walls which enclose the floor to the inside finished surface of the dominant
portion of the permanent outer building walls, exclusive of any major
vertical penetrations of the floor and inclusive of columns and projections
necessary to the building. Major vertical penetrations shall mean stairs,
elevator shafts, flues, pipe shafts, vertical ducts and the like, and their
enclosing walls, which serve more than one floor of the building, but shall
no: include stairs, dumb-waiters, lifts, and the like, exclusively serving a
tenant occupying the leased premises. This Lease is subject to the terms,
covenants and conditions set forth herein and Tenant and Landlord each
covenant as a material part of the consideration for this Lease to keep and
perform each and all of said terms, covenants and conditions to be kept and
performed by them.
2. TERM:
----
(a) The term of this Lease shall be for FIVE (5) years (the "Primary
Lease Term") commencing at 12:01 a.m. on SEPTEMBER 1, 1998 (the
"Commencement Date") and terminating at 12:00 midnight on AUGUST 31,
2003 (the "Termination Date"), unless sooner terminated pursuant
to the terms hereof. "In the event the Premises are not "Ready for
Occupancy" as such term is defined in Paragraph 22 hereof, the
Commencement Date shall mean and refer to the date the Premises are
Ready for Occupancy.
(b) If, as a result of the postponement or acceleration of the
Commencement Date, the term would begin other than on the first day
of the month, Tenant shall pay proportionate rent at the same monthly
rate set forth herein (also in advance) for such partial month and
all other terms and conditions of this Lease shall be in force and
effect during such partial month, anti the end of the term hereof
shall be adjusted to a date which is the last day of the month FIVE
(5) years after the Commencement Date. Tenant agrees to execute and
deliver to Landlord, in form substantially similar to that which is
attached hereto as Exhibit C, an Estoppel and Commencement Date
Certificate, within ten (10) days of the date the term commences,
certifying as to the actual commencement and termination dates of the
term, the rent commencement date, if different, and such other
matters as may be required by Landlord.
3. RENT: Tenant shall pay to Landlord, rent for the Premises ("Base Rent") as
---- follows:
(a) During the FIRST (1st) through TWENTY FOURTH (24th) months of the
Primary Lease Term, the sum of NINETY SEVEN THOUSAND NINE HUNDRED
FORTY FIVE AND FIFTY SIX ONE-HUNDREDTHS Dollars ($97,945.56) per
year, payable in equal monthly installments EIGHT THOUSAND ONE
HUNDRED SIXTY TWO AND THIRTEEN ONE-HUNDREDTHS Dollars ($8,162.13);
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(b) During the TWENTY FIFTH (25th) through THIRTY SIXTH (36th) months of
the Primary Lease Term, the sum of ONE HUNDRED ONE THOUSAND SEVEN
HUNDRED EIGHTY SIX AND FIFTY TWO ONE-HUNDREDTHS Dollars ($101,786.52)
per year, payable in equal monthly installments of EIGHT THOUSAND FOUR
HUNDRED EIGHTY TWO AND TWENTY ONE ONE-HUNDREDTHS Dollars ($8,482.21);
(c) During the THIRTY SEVENTH (37th) through SIXTIETH (60th) months of the
Primary Lease Term, the sum of ONE HUNDRED FIVE THOUSAND SIX HUNDRED
TWENTY SEVEN AND SIXTY ONE-HUNDREDTHS Dollars ($105,627.60) per year,
payable in equal monthly installments of EIGHT THOUSAND EIGHT HUNDRED
TWO AND THIRTY ONE-HUNDREDTHS Dollars ($8,802.30);
All installments of Base Rent shall be payable in advance, on the first (1st)
day of each calendar month during the term hereof. Rent for the first and last
months of the term hereof shall be prorated based upon the number of days during
each of said months that the Lease term was in effect. One monthly installment
of Base Rent shall be due and payable on the date of execution of this Lease by
Tenant. All Base Rent shall be paid without notice, demand, deduction or offset,
at the office of Landlord or to such other person or at such other place as
Landlord may designate in writing. Tenant shall pay to Landlord as "Additional
Rent' all other sums due under this Lease.
5. RENT ADJUSTMENT:
(a) The following terms shall have the following meanings with respect to
the provisions of this Paragraph 5:
(1) "Base Operating Expenses" shall mean an amount equal to THOSE
COLLECTIVE EXPENSES FOR THE CALENDAR YEAR 1998, as hereinafter
defined. In the event that the actual Operating Expenses during
any year are less than the Base Operating Expenses. Tenant shall
not be entitled to any refund, credit or other from of
reimbursement.
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(2) "Building Rentable Area" shall mean all rentable space available for lease
in the Building. If there is a significant change in the aggregate Building
Rentable Area, of a permanent nature, as a result of an addition to the
Building, partial destruction thereof or similar circumstance, Landlord
shall determine and make an appropriate adjustment to the provisions
herein.
(3) "Tenant's Pro Rata Share" shall mean a fraction, the numerator of which is
the Rentable Area of the Premises (i.e., 3,841 square feet) and the
denominator of which is the Building Rentable Area (i.e., 182,752 square
feet), and is equal to 2.101%. At such time, if ever, any space is added to
or subtracted from the Premises pursuant to the terms of this Lease,
tenants Pro Rata Share shall be increased or decreased according
(4) "Operating Expenses" shall mean:
A. ALL REASONABLE AND CUSTOMARY operating expenses of any kind or nature
------------------------
which are incurred with respect to the management, operation and
maintenance of the Building Complex and shall include, but not be
limited to:
(i) Costs of supplies, including but not limited to the cost of
"relamping" all tenant lighting as the same may be required from time
to time;
(ii) Costs incurred in connection with obtaining and providing
energy for the Building Complex, including but not limited to costs of
propane, butane, natural gas, steam, electricity, solar energy and
fuel oils, coal or any other energy sources as well as costs for
heating, ventilation, and air conditioning services ("HVAC");
(iii) Costs of water and sanitary and storm drainage services;
(iv) Costs of janitorial and security services, if any;
(v) Costs of general maintenance and repairs, including, without
limitation, costs of repairing and maintaining plumbing and electrical
systems furnished by Landlord, costs of painting and cleaning, costs
under HVAC and other mechanical maintenance contracts; and costs of
repairs and replacements of equipment used in connection with such
maintenance and repair work and the costs of rental of such equipment;
(vi) Costs of maintenance and replacement of landscaping: and costs
of maintenance, repair, striping and repaving of parking areas, common
areas, plazas and other areas used by tenants of the Building Complex,
including trash and snow removal;
(vii) Any REASONABLE FEES, costs or assessments imposed by any
property owners association or which Landlord must pay for the
Building or Building Complex pursuant to any present or future
covenants, agreements or similar restrictions or agreements affecting
the Building or Building Complex;
(viii) Insurance premiums, including fire and all-risk coverage,
together with loss of rent endorsement; public liability insurance;
and any other insurance carried by Landlord on the Building Complex or
any component parts thereof,
(ix) Labor costs incurred in management, operation or maintenance;
of Building Complex, including wages and other payments, costs to
Landlord of workmen's compensation and disability insurance, payroll
taxes, welfare fringe benefits and all REASONABLE legal fees and other
costs or expenses incurred in resolving any labor disputes;
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(x) Professional building management fees; CONSISTENT WITH A FIRST
-----------------------
CLASS OFFICE BUILDING
---------------------
(xi) Legal, accounting, inspection and other consultation fees
(including, without limitation, fees charged by consultants retained
by Landlord for services that are designed to produce a reduction in
Operating Expenses or reasonably to improve the operation, maintenance
or state of repair of the Building Complex) incurred for the normal
prudent operation of the Building Complex and a general overhead and
administrative charge equal to two percent (2%) of all Operating
Expenses;
(xii) The costs of capital improvements and structural alterations,
repairs and replacements made in or to the Building
Complex or the cost of any machinery or equipment
installed in the Building Complex in order to conform to any
applicable laws, ordinances, rules, regulations or
orders of any governmental or quasi governmental authority having
jurisdiction over the Building Complex (herein, "Required Capital
Improvement") STARTING AFTER THE COMMENCEMENT DATE OF THE LEASE; and
the costs of any capital improvements and structural repairs and
replacements designed primarily to reduce Operating Expenses (herein,
"Cost Savings Improvements"). The expenditures for Required Capital
Improvements and Cost Savings Improvements shall be amortized over the
useful life ACCORDING TO G.A.P. of such capital improvement or
-------------------
structural repair or replacement (as determined by Landlord's
accountants); UTILIZING GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
--------------------------------------------------
(xiii) "Real Estate Taxes" including all real property taxes and
assessments levied against the Building Complex by any governmental or
quasi-governmental authority, including any taxes, assessments,
surcharges, or service or other fees of a nature not presently in
effect which shall hereafter be levied on the Building Complex as a
result of the use, ownership or operation of the Building Complex or
for any other reason, whether in lieu of or in addition to any current
real estate taxes and assessments; provided, however, that in no event
shall the term "Taxes and Assessments", as used herein, include any
federal, state or local income taxes levied or assessed on Landlord,
unless such taxes are a specific substitute for real property taxes;
such term shall, however, include gross taxes on rentals and expenses
incurred by Landlord for tax consultants and in contesting the amount
or validity of any such Taxes or Assessments (all of the foregoing are
collectively referred to herein as "Taxes"). "Assessments" shall
include, without limitation, any and all so-called special
assessments, license tax, business license fee, business license tax,
commercial rental tax, levy, charge or tax imposed by any authority
having the direct power to tax, including any city, county, state or
federal government, or any school, agricultural, lighting, water,
drainage or other improvement or special district thereof, against the
Premises, the Building or the Building Complex, or against any legal
or equitable interest of Landlord therein. For the purposes of this
Lease, any special assessment shall be deemed payable in such number
of installments as is permitted by law, whether or not actually so
paid. If the Building Complex has not been fully assessed as a
completed project, for the purposes of computing the Real Estate Taxes
for any adjustment required herein, the same shall be increased by
Landlord's Accountants, in accordance with their estimate of what the
assessment will be, upon full completion of the Building Complex,
including installation of all tenant finish items; arid
(xiv) Any other expense which under generally accepted accounting
principles would be considered a normal maintenance or operating
expense.
If Landlord selects an accrual accounting basis for calculating
Operating Expenses, Operating Expenses shall be deemed to have been
paid when such expenses have accrued in accordance with generally
accepted accounting principles.
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<PAGE>
B. Operating Expenses shall expressly exclude Landlord's income
taxes; leasing commissions, advertising and promotional expenses:
interest on debt or amortization payments on any mortgages or
deeds of trust: and costs of repairs or other work occasioned by
fire, windstorm or other casualty to tile extent of insurance
proceeds received AND ANYTHING OF A CAPITAL NATURE EXCEPTING
PARAGRAPH 4A(xii).
(b) It is hereby agreed that commencing January 1 of the calendar year
following the Commencement Date, Tenant shall pay to Landlord as
Additional Rent during the balance of the term hereof an estimate of
Tenant's Pro Rata Share of Operating Expenses for the calendar year in
excess of the Base Operating Expenses as reasonably estimated by
Landlord, payable monthly, at the rate of one twelfth (1/12) thereof,
on the same date and at the same place Base Rent is payable, with an
adjustment to be made between the parties at a later date as
hereinafter provided. Landlord shall deliver to Tenant, as soon as
practicable following the end of any calendar year, an estimate of the
Operating Expenses for the new calendar year (the "Annual Estimate").
Until receipt of the Annual Estimate, Tenant shall continue to pay its
monthly Tenant's Pro Rata Share of Operating Expenses in excess of
Base Operating Expenses based upon the estimate for the preceding
calendar year. To the extent that the Annual Estimate reflects an
estimate of Tenant's Pro Rata Share of Operating Expenses in excess of
Base Operating Expenses for the new calendar year greater than the
amount actually paid to the date of receipt of the Annual Estimate for
the new calendar year, Tenant shall pay such amount to Landlord within
thirty (30) days of receipt of the Annual Estimate. Upon receipt of
the Annual Estimate, Tenant shall thereafter pay the amount of its
monthly Tenant's Pro Rata Share of Operating Expenses in excess of
Base Operating Expenses as set forth in the Annual Estimate. As soon
as practicable following the end of any calendar year, Landlord shall
submit to Tenant a statement in reasonable detail describing the
computations of the Operating Expenses setting forth the exact amount
of Tenant's Pro Rata Share of Operating Expenses in excess of Base
Operating Expenses for the calendar year just completed (the
"Statement"), and the difference, if any, between the actual Tenant's
Pro Rata Share of Operating Expenses in excess of Base Operating
Expenses for the calendar year just completed and the estimated amount
of Tenant's Pro Rata Share of Operating Expenses in excess of Base
Operating Expenses paid by Tenant to Landlord. To the extent that the
actual Tenant's Pro Rata Share of Operating Expenses in excess of Base
Operating Expenses for the period covered by the Statement is higher
than the estimated Tenant's Pro Rata Share of Operating Expenses in
excess of Base Operating Expenses-which Tenant previously paid during
the calendar year just completed, Tenant shall also pay to Landlord
such balance within thirty (30) days following receipt of the
Statement from Landlord. To the extent that the actual Tenant's Pro
Rata Share of Operating Expenses in excess of Base Operating Expenses
for the period covered by the Statement is less than the estimated
Tenant's Pro Rata Share of Operating Expenses which Tenant previously
paid during the calendar year just completed, Landlord shall credit
the excess against any sums then owing or next becoming due from
Tenant under the Lease.
(c) If the Lease term hereunder covers a period of less than a full
calendar year during the first or last calendar years of the term
hereof, Tenants Pro Rata Share of Operating Expenses in excess of Base
Operating Expenses for such partial year shall be calculated by
proportionately reducing the Base Operating Expenses to reflect the
number of months in such year during which Tenant leased the Premises
(the "Adjusted Base Operating Expenses"). The Adjusted Base Operating
Expenses shall then be compared with the actual Operating Expenses for
said partial year to determine the amount, if any, of any increases in
the actual Operating Expenses for such partial year over the Adjusted
Base Operating Expenses. Tenant shall pay Tenant's Pro Rata Share of
any such increases within ten (10) days following receipt of notice
thereof.
(d) Tenant shall have the right at its own expense and at a reasonable
time (after written notice to Landlord) within SIXTY (60) DAYS after
receipt of the Statement to audit Landlord's books RELEVANT TO THE
ADDITIONAL RENT due under this Paragraph 5, such audit to be performed
by a nationally recognized accounting firm reasonably acceptable to
Landlord. Tenant hereby agrees that it shall not have the right to
personally conduct such audit. As a condition precedent to Tenant's
exercise of its right to audit Landlord's books, Tenant shall be
required to pay any amounts reflected as
5
<PAGE>
owing on the Statement within the time permitted herein (which amounts
shall be adjusted, if applicable, upon completion of the audit
process). In the event Tenant does not audit Landlord's books and
deliver the results of such audit to Landlord within said 60 DAY
PERIOD, THE TERMS AND amounts set forth in the Statement shall be
deemed conclusive and final and Tenant shall have no further right to
adjustment. In the event Tenant's examination reveals that an error
has been made in Landlord's determination of Tenants Pro Rata Share of
Operating Expenses and Landlord agrees with such determination, then
the amount of such adjustment shall be payable by Landlord or Tenant,
to the other party as the case maybe. In the event Tenant's
examination reveals an error has been made in Landlord's determination
of Tenant's Pro Rata Share of Operating Expenses, and Landlord
disagrees with the results thereof, Landlord shall have SIXTY (60)
days to obtain an audit from an accountant of its choice to determine
Tenants Pro Rata Share of Operating Expenses. In the event Landlord's
accountant and Tenant's accountant are unable to reconcile their
audits, both accountants shall mutually agree upon a third accountant,
whose determination of Tenant's Pro Rata Share of Operating Expenses
shall be conclusive. In the event the amount of error by Landlord is
determined to be ten percent (10%) or more, the reasonable costs of
the three audits made pursuant to this subparagraph shall be paid by
Landlord. In the event the amount of error by Landlord is determined
to be less than ten percent (10%), the reasonable costs of the three
audits made pursuant to this subparagraph shall be paid by Tenant.
(e) Landlord's failure during the Lease term to prepare and deliver any
statements, estimates or bills, or Landlord's failure to make a demand
under this Paragraph or under any other provision of this Lease shall
not in any way be deemed to be a waiver of, or cause Landlord to
forfeit or surrender its rights to collect any items of Additional
Rent which may have become due pursuant to this Paragraph during the
term of this Lease. Tenant's liability for all Additional Rent due
under this Paragraph 5 shall survive the expiration or earlier
termination of this Lease.
6. CHARACTER OF OCCUPANCY:
----------------------
(a) The Premises are to be used for THE general offices OF A PRIVATE
--- ------------
BANKING CONCERN not inconsistent with the character and type of
---------------
tenancy found in comparable first-class office buildings in the Denver
Metropolitan area and for no other purpose without the prior written
consent of Landlord. Nothing contained in this Lease shall be deemed
to give Tenant any exclusive right to such use in the Building or
shall be deemed to be a warranty by Landlord that the Premises are
suitable for a particular use. During the term hereof, Tenant shall be
responsible for compliance with all present or future laws
applicable to the use and occupancy of the Premises. Tenant shall
procure, at its sole expense, all permits or licenses required for the
transaction of business at the Premises.
(b) Tenant shall not permit the Premises nor any part thereof to be used
in any manner, nor anything to be done therein, brought into, or kept
therein, which would in any way (i) make void or voidable any fire or
liability insurance policy then in force with respect to the Building
Complex, (ii) make unobtainable from reputable insurance companies
authorized to do business in the state where the Premises are located
any fire insurance with extended coverage, or liability, elevator,
boiler or other insurance required to be furnished by Landlord under
the terms of any lease or mortgage to which this Lease is subordinate,
at standard rates, (iii) cause, or in Landlord's reasonable opinion be
likely to cause, physical damage to the Building Complex or any part
thereof, (iv) constitute a public or private nuisance, (v) impair, in
the opinion of Landlord, the appearance, character or reputation of
the Building Complex, (vi) discharge objectionable fumes, vapors or
odors into the Building air conditioning system or into the Building
flues or vents not designed to receive them or otherwise in such
manner as may unreasonably offend other occupants of the Building
(vii) impair or interfere with any of the Building services or impair
or interfere with or tend to impair or interfere with the use of any
of the other areas of the Building by, or occasion discomfort, or
annoyance to Landlord or any of the other tenants or occupants of the
Building Complex, any such impairment or interference to be based upon
the judgment of Landlord, (viii) increase on an ongoing periodic basis
the pedestrian traffic in and out of the Premises or the Building
above an ordinary level, OF A PRIVATE BANKING CONCERN (ix) create
waste in, on or around the Premises, Building, or Building Complex, or
(x) make any noise
6
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or set up any vibration which will disturb other tenants, except in
the course of permitted repairs or alterations at times permitted by
Landlord.
(c) Tenant shall not KNOWINGLY use the Premises nor permit anything to be
---------
done in or about the Premises or Building Complex which will in any
way conflict with any law, statute, ordinance, protective covenants,
conditions or restrictions affecting the Building Complex or
governmental or quasi-governmental rules or regulations now in force
or which may hereafter be enacted or promulgated. Tenant shall give
written notice within two (2) days from receipt thereof to Landlord of
any notice it receives of the violation of any law or requirement of
any public authority with respect to the Premises or the use or
occupation thereof. Landlord shall give prompt WRITTEN notice to
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Tenant of any notice it receives relative to the violation by Tenant
of any law or requirement of any public authority with respect to the
Premises or the use or occupation thereof.
7. SERVICES AND UTILITIES:
----------------------
(a) Landlord agrees, without charge except as provided herein, and in
accordance with standards from time to time prevailing for first-class
office buildings in the Denver Metropolitan area, to furnish water to
the Building for use in lavatories and drinking fountains (and to the
Premises if the plans for the Premises so provide); during ordinary
business hours to furnish such heated or cooled air to the Premises
as may, in the judgment of Landlord, be reasonably required for the
comfortable use and occupancy of the Premises provided that Tenant
complies with the recommendations of Landlord's engineer or other duly
authorized representative, regarding occupancy and use of the
Premises; to provide janitorial services for the Premises (including
such interior and exterior window washing as may be required), such
janitorial services to be provided five days a week, except for
"Holidays" as herein defined; during ordinary business hours to cause
electric current to be supplied for lighting the Premises and public
halls; and to furnish such snow removal services to the Building
Complex as may, in the judgment of Landlord, be reasonably required
for safe access to the Building Complex.
(b) Landlord shall provide electricity for normal office purposes
including but not limited to fluorescent and incandescent lighting,
including task and task ambient lighting systems and for normal office
equipment including but not limited to duplicating (reproduction)
machines, communications and audio visual equipment, vending machines,
portable computers (provided they do not require any additional
voltage or special electrical requirements) executive kitchen
equipment and internal communication systems (which may include piped-
in music). To the extent that electric current is utilized in excess
of the amounts indicated above, Tenant's rent shall be increased from
time to time by Landlord in such amounts to cover the cost of
providing such increased use. Landlord shall have the right, if it
determines based on its own judgment that Tenant is using electric
current for purposes other than those described above or for other
than normal office use, to require Tenant to install a check meter to
determine the amount which Tenant is utilizing. The cost of such
excess usage, and check meter, including but not limited to
monitoring, installation and repair thereof, shall be paid by Tenant.
(c) If Tenant requires water in excess of that usually furnished or
supplied for use in the Premises as general office space, Tenant shall
first procure the consent of Landlord for the use thereof. Tenant
agrees to pay to Landlord such amounts as Landlord determines are
necessary to cover the costs of such increased use of water,
including, but not limited to, the cost of installation, monitoring,
maintenance and repair of any check meter or other instrument
necessary to measure the use of additional water.
(d) Tenant agrees that Landlord shall not be liable for failure to supply
any heating, air conditioning, elevator, electrical, janitorial,
lighting or other services during any period when Landlord uses
reasonable diligence to supply such services, or during any period
Landlord is required to reduce or curtail such services pursuant to
any applicable laws, rules or regulations, now or hereafter in force
or effect, it being understood and agreed to by Tenant that Landlord
may discontinue, reduce or curtail such services, or any of them at
such times as it may be necessary by reason of
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accident, unavailability of employees, repairs, alterations,
improvements, strikes, lockouts, riots, acts of God, application of
applicable laws, statutes, rules and regulations, or due to any other
happening beyond the reasonable control of Landlord. In the event of
any such interruption, reduction or discontinuance of services,
Landlord shall not be liable for damages to persons or property as a
result thereof, nor shall the occurrence of any such event in any way
be construed as an eviction of Tenant or cause or permit an abatement,
reduction or setoff of rent, or operate to release Tenant from any of
Tenant's obligations hereunder.
(e) Whenever heat generating machines or equipment are used by Tenant in
the Premises which affect the temperature otherwise maintained by the
air conditioning system, Landlord reserves the right to install
supplementary air conditioning units in the Premises in the event
Landlord's independent consulting engineer determines same are
necessary as a result of Tenant's use of lights or equipment which
generate heat loads in excess of those for which the HVAC system is
designed and the cost therefor, including the cost of installation,
operation and maintenance thereof, shall be paid by Tenant to Landlord
upon demand by Landlord.
(f) In the event that Tenant has any special or additional electrical or
mechanical requirements related to its use of the Premises, any such
electrical or mechanical equipment must be located within the
Premises. Such electrical or mechanical requirements, for the purposes
hereof, shall include by way of example, but not limitation, any
internal telephone system. The foregoing shall in no way be construed
as granting to Tenant additional rights to use any such special or
additional electrical or mechanical equipment in its Premises without
the prior written consent of Landlord. Any additional cost or expense
related to or resulting from such electrical or mechanical
requirements shall be the sole obligation of Tenant.
(g) If Tenant requires AND REQUESTS HVAC service beyond ordinary
------------
business hours (hereafter "After Hours Usage"), such service must be
requested from the Building manager at least twenty-four (24) hours
prior thereto. After Hours Usage can only be supplied for the Building
as a whole, for a minimum of two (2) hour periods, with increments of
one (1) hour thereafter. Tenant shall reimburse Landlord, as
Additional Rent, at the rate of $150.00 per hour.
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8. QUIET ENJOYMENT: Subject to the provisions of this Lease, Landlord
---------------
covenants that Tenant on paying the rent and performing the covenants, of
this Lease on its part to be performed shall and may peacefully and quietly
have, hold and enjoy the Premises for the term of this Lease. Landlord
shall not be responsible for the acts or omissions of any other tenant or
third party which may interfere with Tenant's use and enjoyment of the
Premises. In the event of any transfer or transfers of Landlord's interest
in the Premises or in the real property of which the Premises are a part,
other than a transfer for security purposes only, the transferor shall be
automatically relieved of any and all obligations and liabilities on the
part of Landlord accruing from and after the date of such transfer.
9. MAINTENANCE AND REPAIRS:
------------------------
(a) Notwithstanding any other provisions of this Lease, Landlord shall
repair and maintain the structural portions of the Building,
including the elevators, plumbing, air conditioning, heating and
electrical systems installed or furnished by Landlord, unless such
maintenance and repairs are caused in part or in whole by the act,
neglect, fault or omission of Tenant, its agents, servants, employees,
licensees or invitees, in which case Tenant shall pay to Landlord, on
demand, the cost of such maintenance and repairs less the amount of
any insurance proceeds received by Landlord on account thereof, if
applicable. Landlord shall also maintain and keep in good order and
repair the Building roof; the curtain wall, including all glass
connections at the perimeter of the Building; all exterior doors,
including any exterior plate glass within the Building; the Building
ventilating systems; elevators and escalators, if any; Building
telephone and electrical closets; public portions of the Building or
Building Complex, including but not limited to any balconies,
landscaping, walkways, and upper floor lobbies and corridors, and
interior portions of the Building above and below grade which are not
covered by leases.
8
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(b) Tenant, at Tenant's sole cost and expense, except for services
furnished by Landlord pursuant to Paragraph 7 hereof, shall maintain,
in good order, condition and repair, NORMAL WEAR AND TEAR EXPECTED,
-----------------------------
the Premises, including the interior surfaces of the ceilings if
damaged or discolored due in whole or in part to the act, neglect,
omission or fault of Tenant), walls and floors, all doors, interior
glass partitions or glass surfaces (not exterior windows) and pipes,
electrical wiring, switches, fixtures and other special items, subject
to the provisions of Paragraph 15 hereof. In the event Tenant fails to
so maintain the Premises in good order, condition and repair, Landlord
shall give Tenant notice to do such acts as are reasonably required to
maintain the Premises. In the event Tenant fails to promptly commence
such work and diligently pursue it to completion, then Landlord shall
have the right, but shall not be required, to do such acts and expend
such funds at the expense of Tenant as are reasonably required to
perform such work. The funds so expended plus twenty percent (20%) of
such amounts as an overhead/administrative charge shall be due and
payable by Tenant within ten (10) days after receipt of Landlord's
invoice therefor. Landlord shall have no liability to Tenant for any
damage, inconvenience or interference with the use of the Premises by
Tenant as a result of performing any such work.
10. ALTERATIONS AND ADDITIONS:
-------------------------
(a) Tenant shall make no alterations, additions or improvements to the
Premises or any part thereof without obtaining the prior written
consent of Landlord, which consent shall not be unreasonably withheld
OR DELAYED. Tenant shall submit any such request to Landlord at least
----------
thirty (30) days prior to the proposed commencement date of such work.
Landlord may impose, as a condition to such consent, and at Tenant's
sole cost, such requirements as Landlord may deem necessary in its
judgment, including without limitation, the manner in which the work
is done, a right of approval of the contractor by whom the work is to
be performed and the times during which the work is to be
accomplished, approval of all plans and specifications and the
procurement of all licenses and permits. Landlord shall be entitled to
post notices on and about the Premises with respect to Landlord's non-
liability for mechanics' liens and Tenant shall not permit such
notices to be defaced or removed. Tenant further agrees not to connect
any apparatus, machinery or device to the Building systems, including
electric wires, water pipes, fire safety, heating and mechanical
systems, without the prior written consent of Landlord. Tenant shall
give Landlord at least ten (10) days prior written notice of the
expected commencement date of any work related to the Premises so that
Landlord may post notices of non-responsibility, if appropriate.
(b) All alterations, improvements and additions to the Premises,
including, by way of illustration but not by limitation, all counters,
screens, grilles, special cabinetry work, partitions, paneling,
carpeting, drapes or other window coverings and light fixtures, shall
be deemed a part of the real estate and the property of Landlord and
shall remain upon and be surrendered with the Premises as a part
thereof without molestation, disturbance or injury at the end of the
Lease term, whether by lapse of time or otherwise, unless Landlord, by
notice given to Tenant no later than fifteen (15) days prior to the
end of the term, shall elect to have Tenant remove all or any of such
alterations, improvements or additions (excluding non-movable office
walls), and in such event, Tenant shall promptly remove, at its sole
cost and expense, such alterations, improvements and additions and
restore the Premises to the condition in which the Premises were prior
to the making of the same, reasonable wear and tear excepted. Any such
removal, whether required or permitted by Landlord, shall be at
Tenant's sole cost and expense, and Tenant shall restore the Premises
to the condition in which the Premises were prior to the making of the
same, reasonable wear and tear excepted. All movable partitions,
machines and equipment which are installed in the Premises by or for
Tenant, without expense to Landlord, and can be removed without
structural damage to or defacement of the Building or the Premises,
and all furniture, furnishings and other articles of personal property
owned by Tenant and located in the Premises (all of which are herein
called "Tenant's Property") shall be and remain the property of Tenant
and may be removed by it at the expiration of the term. However, if
any of Tenant's Property is removed, Tenant shall repair or pay the
cost of repairing any damage to the Building or the Premises resulting
from such removal.
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(c) If Landlord permits persons requested by Tenant to perform any
alterations, repairs, modifications or additions to the Premises, then
prior to the commencement of any such work Tenant shall deliver to
Landlord certificates issued by insurance companies qualified to do
business in the state where the Premises are located evidencing that
workmen's compensation, public liability insurance and property damage
insurance, all in amounts, with companies and on forms satisfactory to
Landlord, are in force and maintained by all such contractors and
subcontractors engaged by Tenant to perform such work. All such
policies shall name Landlord as an additional insured and shall
provide that the same may not be canceled or modified without thirty
(30) days prior written notice to Landlord.
(d) Tenant, at its sole cost and expense, shall cause any permitted
alterations, decorations, installations, additions or improvements in
or about the Premises to be performed in compliance with all
applicable requirements of insurance bodies having jurisdiction, and
in such manner as not to interfere with, delay, or impose any
additional expense upon Landlord in the construction, maintenance or
operation of the Building, and so as to maintain harmonious labor
relations in the Building.
11. ENTRY BY LANDLORD:
-----------------
(a) Landlord and its agents shall have the right to enter the Premises at
all reasonable times and upon reasonable notice for the purpose of
examining or inspecting the same, to supply any services to be
provided by Landlord hereunder, to show the same to prospective
purchasers of the Building, to make such alterations, repairs,
improvements or additions to the Premises or to the Building as
Landlord may deem necessary or desirable, and to show the same to
prospective tenants of the Premises DURING THE LAST SIX (6) MONTHS OF
---------------------------------
THE LEASE UNLESS OTHERWISE AGREED. Landlord and its agents may enter
---------------------------------
the Premises at all times and without advance notice for the purpose
of responding to an actual or apparent emergency. Landlord may for the
purpose of supplying scheduled janitorial services and evaluating
janitorial services at any time and from time to time enter the
Premises by means of a master key without liability to Tenant and
without affecting this Lease.
(b) Tenant shall be entitled to ELEVEN (11) sets of keys to the Premises.
-----------
In the event Tenant needs any additional keys, such keys must be
requested from Landlord. Tenant shall pay to Landlord the actual cost
of making such additional keys.
12. MECHANIC'S LIENS: Tenant shall pay or cause to be paid all costs for work
----------------
done by or on behalf of Tenant or caused to be done by or on behalf of
Tenant on the Premises of a character which will or may result in liens
against Landlord's interest in the Premises, Building or Building Complex
and Tenant will keep the Premises, Building and Building Complex free and
clear of all mechanic's liens and other liens on account of work done for
or on behalf of Tenant or persons claiming under Tenant. Tenant hereby
agrees to indemnify, defend and save Landlord harmless of and from all
liability, loss, damages, costs or expenses, including attorneys' fees,
incurred in connection with any claims of any nature whatsoever for work
performed for, or materials or supplies furnished to Tenant, including lien
claims of laborers, materialmen or others. Should any mechanic's liens be
filed or recorded against the Premises, Building or Building Complex with
respect to work done for or materials supplied to or on behalf of Tenant or
should any Action affecting the title thereto be commenced, Tenant shall
cause such liens to be released of re-cord within ten (10) days after
notice thereof. If Tenant desires to contest any such claim of lien, Tenant
shall nonetheless cause such lien to be released of record by the posting
of adequate security with a court of competent jurisdiction if provided by
applicable law or statute of the state where the Premises are located. If
Tenant shall be in default in paying any charge for which such a mechanic's
lien or suit to foreclose such a lien has been recorded or filed and shall
not have caused the lien to be released as aforesaid, Landlord may (but
without being required to do so) pay such lien or claim and any costs
associated there-with, and the amount so paid, together with interest at
the Interest Rate and reasonable attorneys' fees incurred in connection
therewith, shall be immediately due and payable from Tenant to Landlord as
Additional Rent.
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13. DAMAGE TO PROPERTY, INJURY TO PERSONS:
-------------------------------------
(a) Tenant, for itself and its legal representatives, successors and
assigns, as a material part of the consideration to be rendered to
Landlord under this Lease, hereby indemnifies and agrees to hold
harmless Landlord, its agents, employees, contractors, legal
representatives, successors and assigns, from any and all claims of
liability for any injury or damage to any person or property
whatsoever occurring in, on or about the Premises or the Building
Complex or any part thereof, to the extent such injury or damage is
caused by the negligence, fault or omission of Tenant, its agents,
contractors, employees, licensees or invitees or from any breach or
default in the performance of any obligation on Tenant's part to be
performed under the terms of this Lease. BUT NOTHING CONTAINED HEREIN
SHALL REQUIRE TENANT TO INDEMNIFY LANDLORD TO THE EXTENT OF ANY
LIABILITIES ARISING FROM THE NEGLIGENCE OR WILLFUL MISCONDUCT OF
LANDLORD, ITS AGENTS, EMPLOYEES OR CONTRACTORS. Such indemnities shall
include by way of example, but not limitation, all Costs, reasonable
attorneys' fees, expenses and liabilities incurred in or about any
such claim, action or proceeding.
(b) Landlord shall not be liable to Tenant for any damage by or from any
act or negligence of any co-tenant or other occupant of the Building
Complex, or by any owner or occupant of adjoining or contiguous
property. Landlord assumes no liability for any injury or damage to
persons or property resulting in whole or in part from the criminal
activities of others. To the extent not covered by normal fire and
extended coverage insurance, Tenant agrees to pay for all damage to
the Building Complex, as well as all damage to persons or property of
other tenants or occupants thereof, caused by the NEGLIGENCE OR
-------------
WILLFUL MISCONDUCT of Tenant or any of its agents, contractors,
------------------
employees, licensees or invitees. BUT NOTHING CONTAINED HEREIN SHALL
REQUIRE TENANT TO INDEMNIFY LANDLORD TO THE EXTENT OF ANY LIABILITIES
ARISING FROM THE NEGLIGENCE OR WILLFUL MISCONDUCT OF LANDLORD, ITS
AGENTS, EMPLOYEES OR CONTRACTORS.
(c) Neither Landlord nor its agents or employees shall be liable for any
loss or damage to any property occurring by theft or otherwise, nor
for any injury or damage to persons or property resulting from fire,
explosion, falling plaster, steam, gas, electricity, water or rain
which may leak from any part of the Building Complex or from the
pipes, appliances or plumbing works therein or from the roof, street
or subsurface or from any other place or resulting from dampness, or
any other cause whatsoever; provided, however, nothing contained
herein shall be construed to relieve Landlord from liability for any
personal injury or property damage resulting from its gross
negligence. Neither Landlord nor its agents or employees shall be
liable for interference with the lights, view or other incorporeal
hereditament, nor shall Landlord be liable for any latent defect in
the Premises or in the Building or Building Complex. Tenant shall give
prompt notice to Landlord in case of fire or accidents in or about the
Premises or the Building or of defects therein or in the fixtures or
equipment located therein.
(d) In case any claim, demand, action or proceeding is made or brought
against Landlord OR TENANT, its agents or employees, by reason of any
---------
obligation on LANDLORD'S OR Tenant's part to be performed under the
-------------
terms of this Lease, or arising from any act or negligence of Tenant,
its agents or employees, or which gives rise to Tenant's obligation to
indemnify Landlord, THE PREVAILING PARTY shall be responsible for all
--------------------
costs and expenses, including but not limited to reasonable attorneys'
fees incurred in defense or prosecution of the same, as applicable.
14. INSURANCE:
---------
(a) Landlord agrees to carry and maintain the following insurance during
the term of this Lease and any extension hereof: general public
liability insurance against claims for personal injury, including
death and property damage in or about the Premises and the Building or
the Building Complex (excluding Tenants Property), such insurance to
be in an amount not less than One Million Dollars ($1,000,000.00) each
occurrence, Two Million Dollars ($2,000,000.00) aggregate. Such
insurance may expressly exclude property paid for by tenants or paid
for by Landlord for which tenants have reimbursed Landlord located in,
or constituting a part of the Building or the Building Complex. Such
insurance shall afford coverage for damages resulting from (a) fire,
(b) perils covered by extended coverage insurance, and (c) explosion
of steam and pressure boilers and similar apparatus located in the
Building or the Building Complex. Landlord may carry such other
additional insurance coverage as Landlord or Landlord's mortgagee
deems appropriate including coverage for loss of
11
<PAGE>
rents. All such insurance shall be procured from a responsible
insurance company or companies authorized to do business in the State
where the Premises are located.
(b) Tenant shall, at its own cost, at all times during the term of this
Lease and any extensions hereof, procure and maintain insurance for
hazard, fire and extended coverage on Tenant's PERSONAL Property and
--------
the contents of the Premises in an amount equal to full replacement
cost thereof, and comprehensive general liability insurance, including
coverage for bodily injury, property damage, personal injury (employee
and contractual liability exclusions deleted), products and completed
operations, contractual liability, owners protective liability, host
liquor legal liability and broad form property damage with the
following limits of liability: One Million Dollars ($1,003,000.00)
each occurrence combined single limit for bodily injury, property
damage and personal injury; Two Million Dollars ($2,000,000.00)
aggregate for bodily injury and property damage for products and
completed operations. All such insurance shall be procured from a
responsible insurance company or companies authorized to do business
in the State where the Premises are located, with general
policyholders ratings of not less than "A" and a financial rating of
not less than "A" in the most current available Best's Insurance
Reports, and shall be otherwise satisfactory to Landlord. All such
policies shall name Landlord as an additional insured and loss payee,
as applicable, and shall provide that the same may not be canceled or
altered except upon thirty (30) days prior written notice to Landlord.
All insurance maintained by Tenant shall be primary to any insurance
provided by Landlord. If Tenant obtains any general liability
insurance policy on a claims-made basis, Tenant shall provide
continuous liability coverage for claims arising during the entire
term of this Lease, regardless of when such claims are made, either by
obtaining an endorsement providing for an unlimited extended reporting
period in the event such policy is canceled or not renewed for any
reason whatsoever or by obtaining new coverage with a retro active
date the same as or earlier than the expiration date of the canceled
or expired policy. Tenant shall provide certificate(s) of such
insurance to Landlord upon commencement of the Lease term and at least
thirty (30) days prior to any annual renewal date thereof and upon
request from time to time and such certificate(s) shall disclose that
such insurance names Landlord as an additional insured and loss payee,
as applicable. The limits of such insurance shall not, under any
circumstances, limit the liability of Tenant hereunder.
(c) Each party agrees to use its best efforts to include in each of its
policies insuring against loss, damage or destruction by fire or other
casualty a waiver of the insurer's right of subrogation against the
other party, or if such waiver should be unobtainable or
unenforceable (i) an express agreement that such policy shall not be
invalidated if the insured waives the right of recovery against any
party responsible for a casualty covered by the policy before the
casualty; or (ii) any other form of permission for the release of the
other party. If such waiver, agreement or permission shall not be, or
shall cease to be, obtainable without additional charge or at all, the
insured party shall so notify the other party promptly after learning
thereof. In such case, if the other party shall so elect and shall pay
the insurers additional charge therefor, such waiver, agreement or
permission shall be included in the policy, or the other party shall
be named as an additional insured in the policy. Each such policy
which shall so name a party hereto as an additional insured shall
contain, if obtainable, agreements by the insurer that the policy will
not be canceled without at least thirty (30) days prior notice to both
insured and that the act or omission of one insured will not
invalidate the policy as to the other insured. Any failure by either
party, if named as an additional insured, promptly to endorse to the
order of the other party, without recourse, any instrument for the
payment of money under or with respect to the policy of which the
other party is the owner or original or primary insured, shall be
deemed a default under this Lease.
(d) Each party hereby releases the other party with respect to any claim
(including a claim for negligence) which it might otherwise have
against the other party for loss, damage or destruction with respect
to its property (including the Building, Building Complex, the
Premises and rental value or business interruption) occurring during
the term of this Lease to the extent to which it is insured under a
policy or policies containing a waiver of subrogation or permission to
release liability or naming the above party as an additional insured
as provided above.
12
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15. DAMAGE OR DESTRUCTION TO BUILDING:
----------------------------------
(a) In the event that the Premises or the Building are damaged by fire or
other insured casualty and the insurance proceeds have been made
available therefor by the holder or holders of any mortgages or deeds
of trust covering the Building, and such insurance proceeds will be
sufficient to cover the entire cost of repairing the damage, the
damage shall be repaired by and at the expense of Landlord to the
extent of such insurance proceeds available therefor, provided such
repairs and restoration can, in Landlord's reasonable opinion, be made
within two hundred ten (210) days after the occurrence of such damage
without the payment of overtime or other premiums, and until such
repairs and restoration are completed, the Base Rent shall be abated
in proportion to the part of the Premises which is unusable by Tenant
in the conduct of its business, as may be reasonably determined by
Landlord, (but there shall be no abatement of Base Rent by reason of
any portion of the Premises being unusable for a period equal to one
day or less). Landlord agrees to notify Tenant within forty-five (45)
days after such casualty if it estimates that it will be unable to
repair and restore the Premises within said two hundred ten (210) day
period, or if insurance proceeds will not be sufficient to cover the
entire cost of repairing the damage. If insurance proceeds will not be
sufficient to cover the entire cost of repairing the damage, Landlord
shall have the option to terminate this Lease within fifteen (15) days
after giving notice to Tenant, as required by the preceding sentence.
If such repairs and restoration cannot, in Landlord's reasonable,
opinion, be made within the 210-day period, such notice shall set
forth the approximate length of time Landlord estimates will be
required to complete such repairs and restoration. Notwithstanding
anything to the contrary contained herein, if Landlord cannot or
estimates it cannot make such repairs and restoration within said two
hundred ten (210) day period, then Tenant may, by written notice to
Landlord cancel this Lease, provided such notice is given to Landlord
within fifteen (15) days after Landlord notifies Tenant of the
estimated time for completion of such repairs and restoration.
Notwithstanding the preceding sentence, Tenant may not cancel this
Lease as hereinabove stated if the damage to the Premises or the
Building is in whole or in part the result of the act, omission, fault
or negligence of Tenant, its agents, contractors, employees, licensees
or invitees. Except as provided in this Paragraph 15, there shall be
no abatement of rent and no liability of Landlord by reason of any
injury to or interference with Tenant's business or property arising
from the making of any such repairs, alterations or improvements in or
to the Building, Premises or fixtures, appurtenances and equipment.
Tenant understands that Landlord will not carry insurance of any kind
on Tenant's Property, including furniture and furnishings, or on any
fixtures or equipment removable by Tenant under the provisions of this
Lease, or any improvement installed in the Premises by or on behalf of
Tenant, and that Landlord shall not be obligated to repair any damage
thereto or replace the same.
(b) In case the Building throughout shall be so injured or damaged,
whether by fire or otherwise (though the Premises may not be affected,
or if affected, can be repaired within said 210 days) that Landlord,
within sixty (60) days after the happening of such injury, shall
decide not to reconstruct or rebuild the Building, then
notwithstanding anything contained herein to the contrary, upon notice
in writing to that effect given by Landlord to Tenant within said
sixty (60) days, Tenant shall pay the rent, properly apportioned up to
date of such casualty, this Lease shall terminate from the date of
delivery of said written notice, and both parties hereto shall be
released and discharged from all further obligations hereunder (except
those obligations which expressly survive termination of the Lease
term).
16. CONDEMNATION:
-------------
(a) Total Condemnation: If the whole of the Premises shall be taken for a
public or quasi-public use or purpose under power of eminent domain,
or transferred under threat thereof, the term of this Lease shall
terminate and rents shall be apportioned as of the date actual
physical possession thereof shall be so taken by the condemning
authority.
(b) Partial Condemnation: If any portion of the Premises shall be taken
for a public or quasi-public use or purpose under the power of eminent
domain, or transferred under threat thereof, and such
13
<PAGE>
partial taking may reasonably be construed to render the remainder of
the Premises unsuitable for the business of Tenant, Tenant shall be
entitled either to elect to cancel and terminate this lease as of the
date actual physical possession of said portion shall be so taken by
the condemning authority, or to remain in possession of the remainder
of the Premises not so taken; provided, however, that Tenant shall
give Landlord written notice of its election within ten (10) days
after the date of Landlord's notification to Tenant of the pending
partial condemnation, and failing to do so, Tenant shall be deemed to
have elected to remain in possession. In the event Tenant shall elect
or be deemed to have elected to remain in possession, or if the
portion of the Premises so taken shall not be so extensive as may
reasonably be construed to render the remainder of the Premises
unsuitable for the business of Tenant, then and in either such event,
if any portion of the total award is made for a taking of any portion
of the Premises, Landlord shall (but only out of and not exceeding
such portion of the award received by Landlord for or on account of
such taking) repair, reconstruct or restore the remainder of the
Premises (including the building which is a part thereof) to its
condition as it existed immediately prior to such taking (and tenant
shall not be entitled to any damages by reason of any inconvenience or
loss sustained by Tenant as a result thereof) and, except as otherwise
herein provided, this Lease shall continue in all respects in full
force and effect
(c) Abatement of Rent:
(1) If any portion of the Premises shall be taken for a public or
quasi-public use or purpose and Tenant shall elect or be deemed
to have elected to remain in possession as hereinabove provided,
or if the portion of the Premises so taken shall not be so
extensive as may reasonably be construed to render the remainder
of the Premises unsuitable for the business of Tenant, then, and
in either such event, the Base Rent and Additional Rent
(hereinafter "rent and other charges") shall be adjusted as
follows:
A. During the period between the date of such actual taking of
physical possession and the completion of the repairs,
reconstruction or restoration, if any, required by
subparagraph 16(b)(1) hereof, Tenant shall be required to
pay only such portion of the rent and other charges equal to
the portion thereof which the number of square feet of
rentable area in the Premises remaining in a tenantable
condition during such period bears to the total number of
square feet of rentable area in the Premises immediately
prior to such taking of physical possession.
B. Upon completion of said repairs, reconstruction or
restoration, if any, and thereafter throughout the remainder
of the term of this Lease, the rent and other charges
reserved herein shall be equitably reduced in the same
proportion which the number of square feet of rentable area
in the Premises so taken bears to the total number of square
feet of rentable area in the Premises immediately prior to
such taking of physical possession.
(2) No Other Abatement: Except for the abatement in the rent and
other charges expressly hereinabove provided for, there shall be
no reduction, change or abatement of any rental or other charge
payable by or on the part of Tenant to Landlord hereunder, or in
the method of computing, accounting for or paying the same; and
in no event shall there be any reduction, change or abatement of
any rental or other charge whatsoever hereunder until such time
as there shall have been an actual taking of physical possession
of a portion of the Premises.
(d) Condemnation of Common Area: If any portion of the Common Area of the
Building Complex shall be taken for a public or quasi-public use or
purpose under the power of eminent domain, or transferred under threat
thereof, and such taking deprives Tenant, its subtenants, licensees,
concessionaires, business invitees, customers, suppliers, agents,
representatives or employees of reasonable ingress and egress to and
from the Building Complex or the Premises, or if such taking reduces
the area of the vehicular parking portions of the Common Area by an
amount which violates applicable zoning or code requirements, then,
and in either such event, Tenant and
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Landlord shall each have the right, within thirty (30) days after the
date of transfer of title or possession, whichever occurs first, to
cancel and terminate this Lease by giving to the other at least thirty
(30) days written notice of its election so to do provided, however,
that Tenant shall have no such right to cancel or terminate this Lease
if Landlord promptly commences. to take steps to restore reasonable
means of ingress and egress or (as the case may be) to restore the
vehicular parking portions of the Common Area to amounts which comply
with applicable zoning and code requirements by substituting therefore
other lands within the Building Complex or located within a reasonable
proximity thereto, or by constructing multiple level or subterranean
parking, or by any or all of such means and thereafter diligently
proceeds to complete such restoration. In the event Tenant shall elect
to remain in possession, or if this Lease is not otherwise terminated
in accordance with the provisions of this subparagraph 16(d), there
shall be no reduction or abatement of any rent or other charge
whatsoever payable on the part of Tenant to Landlord hereunder, and
this Lease shall continue in all respects in full force and effect.
(e) Damages Awarded:
(1) Except as otherwise herein provided, all damages awarded or other
sums or awards paid on account of any condemnation or taking (or
the threat thereof) under the power of eminent domain of the
Premises, the Common Area, or any portion or portions of the
Building Complex, shall belong to and shall be the sole property
of Landlord; whether such damages or other sums are awarded as
compensation for loss or diminution in value of the Tenant's
leasehold interest in the Premises, or for the fee (or Landlord's
leasehold estate) of the Premises, or as severance damages, or
otherwise, and Tenant hereby assigns to Landlord any interest
which it might otherwise have in any such award.
(2) Tenant in no event shall have any claim whatsoever against
Landlord for loss; or diminution of value of the Tenant's
leasehold interest or for the value of any unexpired term of this
Lease and Tenant hereby expressly waives any such right or claim;
provided, however, that Tenant shall be entitled to receive any
award or portion thereof made for the taking of any of Tenant's
Property (described in subparagraph 10(b)) under the power of
eminent domain, and for damages thereto caused thereby, for any
cost to which Tenant might be put in relocating Tenant's
Property, and for interruption of, or damage to Tenants business.
(f) Effect of Termination: In the event this Lease is canceled or
terminated pursuant to any of the provisions of this Paragraph 16, the
effective date of such cancellation or termination shall be the date
upon which actual physical possession shall be taken by the condemnor,
or the date upon which Tenant ceases doing business in, upon or from
the Premises, whichever last occurs. All rent and other charges
payable on the part of Tenant to Landlord hereunder shall be paid
through the effective date of such cancellation or termination. After
such payment, and as of the effective date of such cancellation or
termination, the parties shall thereupon be released from all further
liability hereunder, except that Landlord shall make an equitable
refund to Tenant of any unearned, unused or unappropriated advance
rental or security deposit theretofore paid by Tenant to Landlord
hereunder.
(g) Voluntary Transfer: A voluntary transfer of all or part of the
Premises or of the Common Area or other portion of the Building
Complex by Landlord to any public or quasi-public body, agency or
person, corporate or otherwise, having the power of eminent domain,
either under threat of condemnation or while condemnation proceedings
are pending, shall be deemed to be a taking under the power of eminent
domain for the purposes of this Paragraph 16.
(h) Temporary Condemnation: If the whole or any part of the Premises,
Common Area, vehicular parking areas or other portion of the Building
Complex, or any interests or rights of use therein are taken for a
public or quasi-public use or purpose or under or in connection with
the threat thereof, for a limited period of time ("Temporary Taking"),
this Lease shall continue in all respects, in full force and effect
and there shall be no reduction, charge or abatement of any rent and
other
15
<PAGE>
charges payable by Tenant, or in the method of computing, accounting
for or paying the same. Tenant shall be entitled to claim and recover
directly from the condemning authority any compensation and damages
payable on account thereof, to the extent of and as applicable to any
such Temporary Taking which deprives Tenant of its rights hereunder;
provided, however, that if the Temporary Taking is for a period
extending beyond the Primary Lease Term, or the then current renewal
term of this Lease, such award shall be apportioned between Landlord
and Tenant as of the termination date of said term.
17. ASSIGNMENT AND SUBLETTING:
-------------------------
(a) Tenant shall not permit any part of the Premises to be used or
occupied by any persons other than Tenant and its employees, nor shall
Tenant permit any part of the Premises to be used or occupied by any
licensee or concessionaire or permit any persons other than Tenant,
its employees and invitees, to be upon the Premises. Tenant shall not
voluntarily, by operation of law, or otherwise, assign, transfer or
encumber this Lease or any interest herein nor sublet or part with
possession of all or any part of the Premises (any and all of which
shall hereinafter be referred to as a "Transfer') without Landlord's
prior written consent, such consent not to be unreasonably withheld.
Any Transfer without the prior written consent of Landlord shall
constitute a default hereunder, shall be void and shall confer no
rights upon any third party, notwithstanding Landlord's acceptance of
rent payments from any purported transferee. Landlord's consent to any
requested assignment of this Lease or subletting of all or any part of
the Premises shall be subject to the following conditions:
(1) such consent and resulting subletting or assignment shall not
relieve Tenant of its primary obligations hereunder, including
the obligation for payment of all rents due hereunder;
(2) Landlord, at its option and from time to time, may collect the
rent from the subtenant or assignee, and apply the net amount
collected to the rent herein reserved, but no such collection
shall be deemed an acceptance by Landlord of the subtenant or
assignee as the tenant hereof, or a release of Tenant from
further performance of covenants on the part of Tenant herein
contained;
(3) any such subtenant or assignee shall be a company or other entity
of good repute, engaged in a business or profession compatible
with and in keeping with the then standards of the Building,
financially capable of performing its obligations with respect to
the Premises and have a net worth and financial strength equal to
or greater than Tenant,
(4) such subtenant or assignee shall assume and agree to perform all
of Tenant's obligations under this Lease insofar as they pertain
to the space so sublet or assigned; and
(5) Tenant is not in default of any term or condition of this Lease
at the time it requests Landlord's consent.
(b) In the event of any Transfer of this Lease or all or any part of the
Premises by Tenant, Landlord in addition to any rights contained
herein, shall have the option, at its discretion, to collect and
receive all net sums and other consideration due to Tenant from such
sublessee or assignee over the Base Rent due hereunder.
(c) The sale or other transfer, in one or more transactions of all or a
majority of the stock of Tenant, if Tenant is a corporation, or the
sale of all or a majority of the ownership interest in Tenant, if
Tenant is a partnership, or the sale of all or substantially all of
the assets of Tenant shall constitute a Transfer for purposes of this
Lease.
(d) At the time of making a request for Landlord's consent to a Transfer
and not less than thirty (30) days prior to the proposed effective
date thereof, Tenant shall provide to Landlord such information as
Landlord, its accountants and attorneys, shall reasonably require with
respect to such proposed Transfer, including but not limited to name
and address of the proposed transferee, description of
16
<PAGE>
business operations, financial information and certificate of
corporate authority and good standing or partnership certificate, as
applicable. SEE ADDENDUM PARAGRAPH 4
------------------------
(e) Consent of Landlord to a Transfer shall not relieve Tenant from
seeking consent to any subsequent Transfers.
(f) Subletting or assignments by subtenants or assignees shall not be
permitted under any circumstances, nor shall Tenant be permitted to
assign this Lease or sublet all or any part of the Premises during any
period of time that all or any portion of the Base Rent is abated.
Further, no option to renew or extend the term of this Lease or to
lease additional space, if any, shall be exercisable by any subtenant
or assignor.
(g) All subleases or assignments shall be in writing and a copy thereof
provided to Landlord within ten (10) days of its effective date. All
subleases shall further contain an express provision that in the event
of any default by Tenant under this Lease and upon notice thereof to
the subtenant from Landlord, all rentals payable by the subtenant
shall be paid directly to Landlord, for the Tenants account, until
subsequent notice from Landlord that such default has been cured.
Notwithstanding the foregoing, receipt by Landlord of rent directly
from the subtenant shall not be considered a waiver of the
default on the part of Tenant, nor an acceptance of such subtenant.
18. ESTOPPEL CERTIFICATE: Tenant further agrees at any time and from time to
--------------------
time on or before TEN (10) (6) days after written request by Landlord, to
execute, acknowledge and deliver to Landlord an estoppel certificate certifying
(to the extent it believes the same to be true) that this Lease is unmodified
and in full force and effect (or if there have been modifications, that the same
is in full force and effect as modified, and stating the modifications), that
there have been no defaults thereunder by Landlord or Tenant (or if there have
been defaults, setting forth the nature thereof), the date to which the rent and
other charges have been paid, if any, the amount of any security deposit, the
Commencement Date and Termination Date of the term, whether or not Tenant has
any options to extend the term or expand the Premises, that Tenant claims no
present charge, lien, claim or offset against rent, the rent is not prepaid for
more than one month in advance and such other matters as may be reasonably
required by Landlord, Landlord's. mortgagee, or any potential purchaser of the
Building, it being intended that any such statement delivered pursuant to this
Paragraph may be relied upon by any prospective purchaser of all or any portion
of Landlord's interest herein, or a current or future holder of any mortgage or
deed of trust encumbering any portion of the Building Complex. Tenant's failure
to deliver such statement within such time shall be a default under this Lease.
19. DEFAULT:
--------
(a) The following events (herein referred to as an "event of default")
shall constitute a default by Tenant hereunder
(1) Tenant shall fail to pay WITHIN FIVE (5) DAYS AFTER NOTICE FROM
--------------------------------------
LANDLORD any installment of Base Rent, Additional Rent or any
--------
other amounts payable hereunder, PROVIDED THAT LANDLORD NEED NOT
-------------------------------
PROVIDE TENANT WITH WRITTEN NOTICE OF FAILURE MORE THAN TWICE
-------------------------------------------------------------
DURING THE TERM OF THE LEASE.
----------------------------
(2) This Lease or the estate of Tenant hereunder shall be transferred
to or shall pass to or devolve upon any other person or party in
violation of the provisions of this Lease, except as permitted
herein;
(3) This Lease or the Premises or any part thereof shall be taken
upon execution or by other process of law directed against
Tenant, or shall be taken upon or subject to any attachment at
the instance of any creditor or claimant against Tenant, and said
attachment shall not be discharged or disposed of within thirty
(30) days after the levy thereof;
17
<PAGE>
(4) Tenant shall file a petition in bankruptcy or insolvency or for
reorganization or arrangement under the bankruptcy laws of the United
States or under any insolvency act of any state, or shall voluntarily
take advantage of any such law or act by answer or otherwise, or shall
be dissolved or shall make an assignment for the benefit of creditors;
(5) Involuntary proceedings under any such bankruptcy law or insolvency
act or for the dissolution of Tenant shall be instituted against
Tenant, or a receiver or trustee shall be appointed of all or
substantially all of the property of Tenant, and such proceedings
shall not be dismissed or such receivership or trusteeship vacated
within thirty (30) days after such institution or appointment;
(6) Tenant shall fail to take possession of the Premises within thirty
(30) days of the Commencement Date;
(7) SHOULD Tenant abandon the Premises for ten (10) consecutive days;
------
(8) Tenant shall fail to perform any of the other agreements, terms,
covenants or conditions hereof on Tenant's part to be performed (other
than the obligation to pay rent or any other charges payable
hereunder), and such nonperformance shall continue for a period of
fifteen (15) days after notice thereof by Landlord to Tenant;
provided, however, that if Tenant cannot reasonably cure such
nonperformance within fifteen (15) days, Tenant shall not be in
default if it commences cure within said fifteen (15) days and
diligently pursues the same to completion, with completion occurring
in all instances within sixty (60) days;
(9) Tenant shall, for reasons other than those specifically permitted in
this Lease, cease to conduct continually its normal business
operations in the Premises, or fail to, from the Commencement Date
throughout the term of this Lease and any renewals hereof, operate its
normal business activities as an active and ongoing entity consistent
with generally accepted standards in the industry;
(10) Tenant shall fail to obtain a release of any mechanic's lien, as
required under Paragraph 12 hereof, or fail to timely provide an
estoppel certificate as required under Paragraph 18 hereof;
(11) A guarantor of this Lease, if any, or a general partner of Tenant (if
Tenant is a general or limited partnership), becomes a debtor under
any state or federal bankruptcy proceedings, or becomes subject to
receivership or trusteeship proceedings, whether voluntary or
involuntary except in the case of a guarantor, Tenant shall not be in
default It if a substitute guarantor, with acceptable creditworthiness
and financial abilities in light of the responsibilities of Tenant
hereunder, and otherwise acceptable to Landlord, is provided to
Landlord within fifteen (15) days; and
(12) All or any part of the personal property of Tenant is seized, subject
to levy or attachment, or similarly repossessed or removed from the
Premises.
(b) Upon the occurrence of an event of default, and in addition to any other
remedies now or hereafter available to Landlord at law or in equity,
Landlord shall have the right, at its election, then or at any time
thereafter and while any such event of default shall continue, either;
(1) To give Tenant written notice of Landlord's intention to terminate
this Lease on the date such notice is given or on any later date
specified therein, where-upon, on the date specified in such notice,
tenant's right to possession of the premises shall cease and this
lease shall thereupon be terminated without prejudice to Landlord's
rights as described below; or
18
<PAGE>
(2) To re-enter and take possession of the Premises or any part thereof
and repossess the same as Landlord's former estate and expel Tenant
and those claiming through or under Tenant, and remove the effects of
both or either, without being deemed guilty of any manner of trespass
and without prejudice to any remedies for arrears of rent or breach of
covenants or conditions. Should Landlord elect to re-enter the
Premises pursuant to the provisions hereof, legal proceedings or any
notice provided for by law, Landlord may, from time to time, without
terminating this Lease, relet the Premises or any part thereof for
such term or terms (which may be greater or less than the period which
would otherwise have constituted the balance of the term of this
Lease) and on such conditions and upon such other terms (which may
include concessions of free rent and alteration and repair of the
Premises) as Landlord, in its discretion, may determine, and Landlord
may collect and receive the rents therefor. Landlord shall in no way
be responsible or liable for any failure to relet the Premises or any
part thereof or for any failure to collect any rent due upon such
reletting. No such re-entry or taking possession of the Premises by
Landlord shall be construed as an election on Landlord's part to
terminate this Lease unless a written notice of such termination is
given to Tenant. No notice from Landlord hereunder or under a forcible
entry and detainer statute or similar law shall constitute an election
by Landlord to terminate this Lease unless such notice specifically so
states. Landlord reserves the right following any such re-entry and/or
reletting, to exercise its right to terminate this Lease by giving
Tenant such written notice, in which event, this Lease will terminate
as specified in said notice.
(c) In the event that Landlord elects to terminate this Lease as permitted in
Paragraph 19(b)(1) hereof, or elects to take possession as provided in
Paragraph 19(b)(2), Tenant shall pay to Landlord (i) the Base Rent,
Additional Rent and other sums as herein provided, which would be payable
hereunder if such termination or repossession had not occurred, less (ii)
the net proceeds, if any, of any reletting of the Premises after deducting
all Landlord's expenses in connection with such reletting, including but
without limitation, all repossession costs, brokerage commissions, legal
expenses, attorneys' fees, expenses of employees, alteration and repair
costs and expenses of preparation for such reletting. If, in connection
with any reletting, the new lease term extends beyond the existing term, or
the premises covered thereby include other premises not part of the
Premises, a fair apportionment of the rent received from such reletting and
the expenses incurred in connection therewith as provided aforesaid will be
made in determining the net proceeds from such reletting. Tenant shall pay
such rents and other sums to Landlord monthly on the days on which the Base
Rent would have been payable hereunder if such termination or repossession
had not occurred.
(d) In the event this Lease is terminated, then, as an alternative to the
rights provided in paragraph 19(c) hereof, and at Landlord's option,
Landlord shall be entitled to recover against Tenant as damages for loss of
the bargain and not as a penalty, an aggregate sum which, at the time of
such termination of this Lease, represents the excess, if any, of the
aggregate of the Base Rent, Additional Rent and all other sums payable by
Tenant hereunder that would have accrued for the balance of the term, over
the aggregate rental value of the Premises (such rental value to be
computed on the basis of a tenant paying not only a rent to Landlord for
the use and occupation of the Premises, but also such other charges as are
required to be paid by Tenant under the terms of this Lease) for the
balance of such term, both discounted to present worth at the rate of eight
percent (8%) per annum.
(e) Suit or suits for the recovery of the amounts and damages set forth above
may be brought by Landlord, from time to time, at Landlord's election and
nothing herein shall be deemed to require Landlord to await the date
whereon this Lease or the term hereof would have expired had there been no
such default by Tenant or no such termination, as the case may be.
(f) After an event of default by Tenant, Landlord may sue for or otherwise
collect all rents, issues and profits payable under all subleases on the
Premises, including those past due and unpaid.
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<PAGE>
(g) After an event of default by Tenant, Landlord may without terminating
this Lease, enter upon the Premises without being liable for any claim
for damages and without being deemed guilty of any manner of trespass
and without prejudice to any other remedies, and do whatever Tenant is
obligated to do under the terms of this Lease. Tenant agrees to
reimburse Landlord on demand for any expenses which Landlord may incur
in effecting compliance with the Tenant's obligations under this
Lease. Further, Tenant agrees that Landlord shall not be liable for
any damages resulting to Tenant from effecting compliance with
Tenant's obligations under this subparagraph.
(h) No failure by Landlord to insist upon the strict performance of any
agreement, term, covenant or condition hereof or to exercise any right
or remedy consequent upon a breach thereof, and no acceptance of full
or partial rent during the continuance of any such breach, shall
constitute a waiver of any such breach of such agreement, term,
covenant or condition. No waiver of any breach shall affect or alter
this Lease, but each and every agreement, term, covenant and condition
hereof shall continue in full force and effect with respect to any
other then existing or subsequent breach thereof.
(i) Nothing contained in this Paragraph shall limit or prejudice the right
of Landlord to prove and obtain as liquidated damages in any
bankruptcy, insolvency, receivership, reorganization or dissolution
proceeding, an amount equal to the maximum allowed by any statute or
rule of law governing such proceeding and in effect at the time when
such damages are to be proved, whether or not such amount be greater,
equal to or less than the amounts recoverable, either as damages or
rent referred to in any of the preceding provisions of this Paragraph.
(j) Any rents or other amounts owing to Landlord hereunder which are not
paid within five (5) days of the date they are due, shall bear
interest from the due date at the rate of eighteen percent (18%) per
annum ("Interest Rate") until paid. Similarly, any amounts paid by
Landlord to cure any default of Tenant or to perform any obligation of
Tenant, shall, if not repaid by the Tenant within five (5) days of
demand by Landlord, thereafter bear interest from the date paid by
Landlord at the Interest Rate until paid. In addition to the
foregoing, Tenant shall pay to Landlord whenever any Base Rent,
Additional Rent or any other sums due hereunder remain unpaid more
than five (5) days after the due date thereof, an administrative
charge to compensate Landlord for the costs and expenses associated
with handling a delinquent account equal to ten percent (10%) of the
amount due. Further, in the event of default by Tenant, in addition to
all other rights and remedies, Landlord shall be entitled to receive
from Tenant all sums in the nature of a rental abatement, the payment
of which may previously have been waived or abated by Landlord, and
the unamortized portion of any tenant finish allowance, moving
allowance or brokerage commission paid by Landlord, together with
interest thereon from the date or dates such amounts were paid by
Landlord, or would have been due from Tenant but for the abatement, at
the Interest Rate, until paid; it being understood and agreed that
such payment or abatement was made on the condition and basis that
Tenant fully perform all obligations and covenants under the Lease for
the entire term.
(k) Each right and remedy provided for in this Lease shall be cumulative
and shall be in addition to every other right or remedy provided for
in this Lease now or hereafter existing at law or in equity or by
statute or otherwise, including, but not limited to, suits for
injunctive or declaratory relief and specific performance. The
exercise or commencement of the exercise by Landlord of any one or
more of the rights or remedies provided for in this Lease now or
hereafter existing at law or in equity or by statute or otherwise
shall not preclude the simultaneous or subsequent exercise by landlord
of any or all other rights or remedies provided for in this lease, or
now or hereafter existing at law or in equity or by statute or other-
wise. All costs incurred by Landlord in connection with collecting any
amounts and damages owing by Tenant pursuant to the provisions of this
Lease or to enforce any provision of this Lease, including by way of
example, but not limitation, reasonable attorneys' fees from the date
any such matter is turned over to an attorney, shall also be
recoverable by Landlord from Tenant. Landlord and Tenant agree that
any action or proceeding arising out of this Lease shall be heard by a
court sitting without a jury and thus hereby waive all rights to a
trial by jury.
20
<PAGE>
22. COMPLETION OF PREMISES:
-----------------------
(a) Landlord has agreed to make certain improvements to the Premises as
more full), set forth in a work letter (the "Work Letter") attached
hereto and incorporated herein as Exhibit D. Other than as set forth
in the Work Letter, Landlord shall have no obligation for any
improvements to the Premises, and Tenant shall accept the Premises in
its "as is" condition on the Commencement Date ABSENT PUNCH LIST ITEMS
AND LATENT DEFECTS. Landlord shall not have any obligation for the
repair or replacement of any portions of the interior of the Premises,
including but not limited to carpeting, draperies, window coverings,
wallcoverings or painting, which are damaged or wear out during the
term hereof, regardless of the cause therefor, except as may otherwise
be specifically set forth in this Lease. If the Premises are not Ready
for Occupancy (as hereafter defined) on the Commencement Date, unless
such delay is caused by Tenant, its agents or employees, the rental
obligations hereunder shall not commence until the Premises are Ready
for Occupancy, whereupon, this Lease and all covenants, conditions and
terms hereof shall be in full force and effect; and the Termination
Date hereof shall be postponed as set forth in paragraph 2(b). The
postponement of the rent and term herein provided for such period
shall be in full settlement for all claims which Tenant might have by
reason of the Premises not being Ready for Occupancy on the
Commencement Date. If Tenant wishes to take possession of all or any
part of the Premises prior to the date the Premises are Ready for
Occupancy, it must first secure the prior written consent of Landlord
and such occupancy shall in no way hinder, delay or interfere with
Landlord's work in completion of the Premises, and in such event, all
terms and provisions of this Lease, including the obligation to pay
rent at a rate equal to the monthly rate provided in Paragraph 3
(prorated accordingly) shall apply. "Ready for Occupancy" as that term
is used herein shall mean the date when all major construction aspects
of the Premises and any remodeling work to be performed by Landlord to
the extent agreed to in the Work Letter are completed although minor
items are not completed (including but not limited to, touch-up
plastering or repainting which does not unreasonably interfere with
Tenant's ability to carry on its business in the Premises). The
certificate of the architect (or other representative of Landlord) in
charge of supervising the completion or remodeling of the Premises
shall control conclusively the date upon which the Premises are Ready
for Occupancy. If Landlord is delayed in delivering the Premises to
Tenant because the same are not Ready for Occupancy or due to the
failure of a prior occupant to vacate the same, then the rent and term
shall be postponed as
21
<PAGE>
hereinabove set forth, and such postponement shall be in full settlement of
all claims which Tenant may otherwise have by reason of the delay of
delivery.
(b) Landlord, at its sole option, may allow Tenant to enter into the Premises
for the purpose of installing furniture, fixtures and equipment, subject to
the terms of the Work Letter prior to the Commencement Date at its sole
risk and with no obligation to pay rent provided that such entry and work
do not unreasonably interfere in any way with the performance of Landlord's
work or other workers in and about the Building. At any time during such
period of early entry, if Landlord notifies Tenant that Tenant's entry or
work is interfering with or delaying the performance of work to be
performed by Landlord or other workers in and about the Building, or
causing any disruption whatsoever, Tenant shall forthwith discontinue any
further work and shall vacate the Premises, and shall cause its workmen or
contractors to remove therefrom, any equipment, materials or installations
which are the subject of Landlord's notice.
23. REMOVAL OF TENANT'S PROPERTY: All movable furniture and personal effects of
----------------------------
Tenant not removed AT THE END OF THE LEASE TERM, abandonment thereof or
upon the termination of this Lease for any cause whatsoever shall
conclusively be deemed to have been abandoned and may be appropriated,
sold, stored, destroyed or otherwise disposed of by Laridlord without
notice to Tenant and without obligation to account therefor, and Tenant
shall reimburse Landlord for all expenses incurred in connection with the
disposition of such property.
24. HOLDING OVER: Tenant shall vacate the Premises upon the expiration or
------------
earlier termination of this Lease. Tenant shall reimburse Landlord for and
indemnify Landlord against all damages and liability which Landlord incurs
from Tenant's delay in vacating the Premises, including without limitatior,
claims by and liability to any succeeding tenant founded on such delay and
any attorneys'fees and costs. If Tenant does not vacate the Premises upon
the expiration or earlier termination of the Lease and holds over without
Landlord's consent, Tenant shall be deemed a holdover tenant at will.
During such holdover period, Tenant shall be liable for all damages
incurred by Landlord as a result of Tenant's withholding of the Premises.
Should Tenant holdover after the expiration or earlier termination of this
Lease with Landlord's consent, Tenant shall become a tenant from month to
month, subject to all of the terms of this Lease as may be applicable to
such month to month tenancy, except that Tenant shall pay monthly rent
equal to two hundred percent (200%) of the last monthly rental rate plus
all other monetary charges as provided herein. Such tenancy shall continue
until terminated by Landlord, as provided by law, or until Tenant shall
have given to Landlord at least thirty (30) days written notice prior to
the last day of the calendar month intended as the date of termination of
such month to month tenancy.
25. PARKING AND COMMON AREAS:
------------------------
(a) Tenant shall have the right to use FIVE (5) assigned parking spaces
--------
(the "Assigned Spaces") located in the parking structure comprising a
part of the Building Complex (the "Garage") on the terms and
conditions contained herein. Tenant shall have the right to use SIX
---
(6) unassigned parking spaces (the "Unassigned Spaces") located in
---
a surface parking area constructed on the real property (the "Surface
Lot") on the terms and conditions contained herein The rights of
Tenant to the Assigned and Unassigned Spaces as granted by Landlord
shall collectively be referred to as the "Parking Privileges."
(b) There shall be no charge for the Unassigned Spaces. Tenant shall pay
to Landlord as a parking fee for the Assigned Spaces an amount (the
"Fee") equal to the result obtained by multiplying the monthly charge
per assigned parking space established by Landlord from time to time
for assigned parking privileges in the Garage times the number of
assigned parking spaces included in the Assigned Spaces. The initial
monthly charge per assigned parking space is $45.00 FOR COMPACT AND
----------------------
FOR MID-SIZE AND $60.00 FOR FULL SIZE and Landlord shall be entitled
-------------------------------------
to increase or decrease such charge from time to time upon at least
one month's written notice of the increase or decrease to Tenant,
provided, however, that any such increase shall not exceed the highest
amount charged for comparable covered parking spaces in the office
park area generally
24
<PAGE>
referred to as the Denver Technological Center. The Fee shall be paid on
the first day of the Term of this Lease and on the first day of each
succeeding calendar month during the Term of this Lease. All payments of
the Fee shall be made in advance, without notice or set off, at the address
of Landlord set forth in this Lease, or at such place as Landlord from time
to time designates in writing. If the Term of this lease shall begin on a
day other than the first day of a calendar month or end on a day other than
the last day of a calendar month, the Fee for the fractional month at the
beginning or end of the Term of this Lease shall be prorated on a daily
basis and shall be paid on the date of the beginning of the Term of this
Lease or in advance on the first day of the last month of the Term of this
Lease, as the case may be.
(c) The Parking Privileges shall commence on the same day as the Term of this
Lease and shall continue in full force and effect for the Term of this
Lease unless sooner terminated or extended pursuant to the provisions of
this Lease. The Parking Privileges shall automatically terminate upon the
expiration or earlier termination of the Term of this Lease.
(d) (1) Tenant shall use the Assigned and Unassigned Spaces only for
automobile parking. Landlord shall have the right at any time to
change the arrangement or location of, or both, or to regulate the use
of, the Assigned and Unassigned Spaces or the Garage or Surface Lot
without incurring any liability to Tenant or entitling Tenant to any
abatement of the Fee. Among other things, Landlord shall be entitled
to assign designated areas for use by particular persons or groups of
persons and Tenant shall refrain from parking in such spaces. Tenant
acknowledges that the Unassigned Spaces will not be designated for use
by Tenant and that Tenant will use the Unassigned Spaces in the Garage
and Surface Lot in common with all persons to whom or which Landlord
grants the right to use the Assigned Spaces in the Garage and Surface
Lot.
(2) The use of the Assigned and Unassigned Spaces is subject to the
following rules:
A. Tenant shall designate use of the Assigned and Unassigned Spaces
to specific individuals employed by Tenant ("Designated Users"),
but Tenant shall remain responsible for all obligations to pay
rent or to otherwise perform hereunder. Tenant agrees to provide
Landlord from time to time with a listing of all vehicles of
Designated Users, including names, vehicle models and colors and
license plate numbers, and Tenant shall provide Landlord with a
revised listing promptly after any change to the listing. Tenant
shall see that all of Tenants Designated Users are supplied with
parking decals provided by Landlord, which decals shall at all
times be displayed prominently on the vehicles of Designated
Users. Tenant shall be responsible for enforcing compliance with
all terms contained herein by Designated Users of the Assigned
and Unassigned Spaces. Landlord shall have the right to directly
ban any Designated User from the Assigned and Unassigned Spaces
for violation of the Parking Privileges.
B. Tenant and Designated Users of the Assigned and Unassigned Space
shall approach and leave the parking facilities with due care for
pedestrians, other moving or parked vehicles, and the doors,
fences and other improvements in the Garage and on the Surface
Lot.
C. Tenant and Designated Users of the Assigned and Unassigned Spaces
shall park only in designated spaces and not in ramps, corridors
or approaches to the Garage or the Surface Lot.
D. Tenant and Designated Users of the Assigned and Unassigned Spaces
shall observe the special hours of opening, closing and non-use
of the Garage and the Surface Lot when closings are necessitated
for repairs, cleanings, and rehabilitations.
23
<PAGE>
E. Tenant shall not be permitted to assign the Parking Privileges
of any interest or permit the Assigned and Unassigned Spaces
or any part thereof to be used by others without the prior
written consent of Landlord, which consent may be withheld by
Landlord in its absolute discretion; except that, if the
proposed assignee or user is a permitted assignee, sublessee
or occupant under the terms of this Lease, Landlord's consent
shall not be required. Tenant shall remain primarily liable
for the performance of the obligations of the Tenant hereunder
notwithstanding any assignment or occupancy arrangement
permitted or consented to under the provisions of this
Section.
(e) If the Parking Privileges are terminated, Tenant shall remain liable
to Landlord for all Fees and other sums accrued and unpaid hereunder
to the date of termination of the Parking Privileges.
(f) If Tenant shall default in making payment of any Fee or other sums due
hereunder, Landlord may charge Tenant and Tenant shall pay upon demand
interest thereon at the Default Rate specified in Section 19 (j) of
this Lease.
26. SURRENDER AND NOTICE: Upon the expiration or earlier termination of this
--------------------
Lease, Tenant shall promptly quit and surrender to Landlord the Premises
broom clean, in good order and condition, ordinary wear and tear excepted,
and Tenant shall remove all of its movable furniture and other effects and
such alterations, additions and improvements as Landlord shall require
Tenant to remove pursuant to Paragraph 10 hereof. In the event Tenant fails
to so vacate the Premises on a timely basis as required, Tenant shall be
responsible to Landlord for all costs and damages, including but not
limited to any amounts required to be paid to third parties who were to
have occupied the Premises, incurred by Landlord as a result of such
failure, plus interest thereon at the Interest Rate, from the date Landlord
incurs such costs and damages, on all amounts not paid by Tenant within
five (5) days of demand, until paid in full.
27. ACCEPTANCE OF PREMISES BY TENANT: Taking possession of the Premises by
--------------------------------
Tenant shall be conclusive evidence as against Tenant that the Premises
were in the condition agreed upon between Landlord and Tenant ABSENT ANY
LATENT DEFECTS and acknowledgement of satisfactory completion of the work
which Landlord agreed in the Work Letter to perform, except for any "punch
list" items set forth in writing from Tenant to Landlord within ten (10)
days after the Commencement Date. Without limiting the foregoing, Tenant
specifically acknowledges that it shall take possession of the Premises
despite the existence of various start-up inconveniences (if any) that may
be associated with the use of the Building's appurtenances, such as certain
construction obstacles, including scaffolding, delays in use of freight
elevator service, certain elevators not being available to Tenant, the
passage of work crews using elevators, uneven air conditioning services and
other conditions incident to construction in office buildings. Tenant also
acknowledges that from time to time Landlord may perform construction and
improvement work in other portions of the Building Complex and that such
work may cause intermittent noise, vibrations or other temporary
inconveniences; provided, however, Landlord will take all steps reasonably
necessary and feasible to minimize such inconveniences to Tenant
28. SUBORDINATION AND ATTORNMENT:
----------------------------
(a) This Lease, and all rights of Tenant here-under, are and shall be
subject and subordinate in all respects to all present and future
ground leases, overriding leases and underlying leases and/or grants
of term of the real property and/or the Building or the Building
Complex now or hereafter existing and to all deeds of trust, mortgages
and building loan agreements, including leasehold mortgages and
building loan agreements, which may now or here-after affect the
Building or the Building Complex or any of such leases, whether or not
such deeds of trust or mortgages shall also cover other lands or
buildings, to each and every advance made or hereafter to be made
under such deeds of trust or mortgages, and to all renewals,
modifications, replacements and extension of such leases, deeds of
trust and mortgages. The provisions of this Paragraph shall be self-
operative and no further instrument of subordination shall be
required. However, in confirmation of such subordination, Tenant shall
promptly execute and deliver to Landlord (or such other party so
designated by Landlord) at Tenant's own cost and expense, within live
(5) days after
24
<PAGE>
request from Landlord an instrument, in recordable form if required,
that Landlord, the lessor of any such lease or the holder of any such
deed of trust or mortgage or any of their respective successors in
interest or assigns may request evidencing such subordination. Failure
by Tenant to comply with the requirements of this Paragraph shall be a
default hereunder. Notwithstanding the foregoing, in the event that
Tenant does not execute such documents as may be required to confirm
the subordination set forth in this Paragraph, Tenant hereby grants to
Landlord a power of attorney coupled with an interest to act as
Tenant's attorney in fact for the purposes of executing whatever
documents are necessary to evidence such subordination. The leases to
which this Lease is, at the time referred to, subject and subordinate
pursuant to this Paragraph are hereinafter sometimes called "superior
leases" and the deeds of trust or mortgages to which this Lease is, at
the time referred to, subject and subordinate are hereinafter
sometimes called "superior deeds of trust" or "superior mortgages".
The lessor of a superior lease or the beneficiary of a superior deed
of trust or superior mortgage or their successors in interest or
assigns are hereinafter sometimes collectively referred to as a
"superior party". Notwithstanding the foregoing, upon Tenant's
request, Landlord agrees to request such superior party grant to
Tenant a non-disturbance agreement in the form then being used by such
superior party for such purposes, providing that Tenant,
notwithstanding a default by Landlord, shall be entitled to remain in
possession of the Premises in accordance with the terms of this Lease
for so long as Tenant shall not be in default of any term, condition
or covenant of this Lease. Further, Tenant shall attorn to such
superior party.
(b) If, in connection with the procurement, continuation or renewal of any
financing for which the Building or the Building Complex or of which
the interest of the lessee therein under a superior lease represents
collateral in whole or in part, a lender shall request reasonable
modifications of this Lease as a condition of such financing, Tenant
will not unreasonably withhold its consent thereto provided that such
modifications do not increase the obligations of Tenant under this
Lease or adversely affect any rights of Tenant or decrease the
obligations of Landlord under this Lease.
29. PAYMENTS AFTER TERMINATION: No payments of money by Tenant to Landlord
--------------------------
after the termination of this Lease, in any manner, or after giving of any
notice (other than a demand for payment of money) by Landlord to Tenant,
shall reinstate, continue or extend the term of this Lease or affect any
notice given to Tenant prior to the payment of such money, it being agreed
that after the service of notice of the commencement of a suit or other
final judgment granting Landlord possession of the Premises, Landlord may
receive and collect any sums of rent due, or any other sums of money due
under the terms of this Lease or otherwise exercise its rights, and
remedies hereunder. The payment of such sums of money, whether as rent or
otherwise, shall not waive said notice or in any manner affect any pending
suit or judgment theretofore obtained.
30. AUTHORITIES FOR ACTION AND NOTICE:
----------------------------------
(a) Except as otherwise provided herein, Landlord may, for any matter
pertaining to this Lease, act by and through its Building manager or
any other person designated in writing from time to time.
(b) All notices or demands required or permitted to be given to Landlord
hereunder shall be in writing, and shall be served by hand delivery or
by deposit in the United States mail, with proper postage prepaid,
certified or registered, return receipt requested, addressed as
follows:
LOEB PARTNERS REALTY & DEVELOPMENT CORP. AS AGENT FOR HANOVER
RESOURCES INC.
8400 EAST PRENTICE AVENUE, SUITE 1201
ENGLEWOOD, COLORADO 80111
With a copy to:
LOEB PARTNERS REALTY & DEVELOPMENT CORP.
521 FIFTH AVENUE, SUITE 2300
NEW YORK, NEW YORK 10175
All notices or demands required or permitted to be given to Tenant
hereunder shall be in writing and shall be served by hand delivery or
by deposit in the United States Mail, with proper postage prepaid,
certified or registered, return receipt requested, addressed to Tenant
at the Premises,
25
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With a copy to:
N/A
-------------------------------
-------------------------------
-------------------------------
Either party shall have the right to designate in writing, served as
above provided, a different address to which notice is to be provided.
All notices or demands shall be deemed served on the day of delivery if
hand delivered, or three (3) days after deposit in the U.S. Mail, if
sent by registered or certified mail. The foregoing shall in no event
prohibit notice from being given as provided by the federal or state
Rules of Civil Procedure, as the same may be amended from time to time.
31. LIABILITY OF LANDLORD: Landlord's liability under this Lease shall be
---------------------
limited to Landlord's estate and interest in the Building (or to the
proceeds thereof) and no other property or other assets of Landlord or its
partners (if Landlord is a partnership), agents, employees, legal
representatives, successors or assigns, shall be subject to levy, execution
or other enforcement procedure for the satisfaction of Tenant's remedies
under or with respect to this Lease, the relationship of Landlord and
Tenant hereunder or Tenant's use and occupancy of the Premises. Nothing
contained in this Paragraph shall be construed to permit Tenant to offset
against rents due a successor landlord, a judgment (or other judicial
process) requiring the payment of money by reason of any default of a prior
landlord, except as otherwise specifically set forth herein.
32. BROKERAGE: Tenant represents and warrants that it has dealt only with
---------
TRAMMELL CROW COMPANY AS AGENT FOR LANDLORD AND THE KAY COMPANIES AS AGENT
--------------------------------------------------------------------------
FOR TENANT (the "Broker") in the negotiation of this Lease. Landlord shall
----------
make payment of the brokerage fee due to the Broker pursuant to and in
accordance with Landlord's separate agreement with the Broker. Tenant
hereby agrees to indemnify and hold the Landlord harmless of and from any
and all loss, costs, damages or expenses (including, without limitation,
all attorneys' fees and disbursements) by reason of any claim of or
liability to any other broker or person claiming through Tenant and arising
out of or in connection with the negotiation, execution and delivery of
this Lease. Additionally, Tenant acknowledges and agrees that Landlord
shall have no obligation for payment of any brokerage fee or similar
compensation to any person with whom Tenant has dealt or may in the future
deal with respect to leasing of any additional or expansion space in the
Building or renewals or extensions of this Lease. In the event any claim
shall be made against Landlord by any other broker who shall claim to have
negotiated this Lease on behalf of Tenant or to have introduced Tenant to
the Building or to Landlord, Tenant shall be liable for payment of all
reasonable attorneys' fees, costs and expenses incurred by Landlord in
defending against the same, and in the event such broker or other person
shall be successful in any such action, Tenant shall, in addition, make
payment to such Broker.
33. TAXES:
-----
(a) Tenant shall be liable for and shall pay at least ten (10) days before
delinquency and Tenant hereby agrees to indemnify and hold Landlord
harmless from and against any liability in connection with, all taxes
levied against any personal property, fixtures, machinery, equipment,
apparatus, systems and appurtenances placed by or on behalf of Tenant
in or about or utilized by Tenant in, upon or in connection with the
Premises ("Equipment Taxes"). If any Equipment Taxes are levied against
Landlord or Landlord's property or if the assessed value of Landlord's
property is increased by the inclusion therein of a value placed upon
such personal property, fixtures, machinery, equipment, apparatus,
systems or appurtenances of Tenant, and if Landlord, after written
notice to Tenant, pays the Equipment Taxes or taxes based upon such an
increased assessment (which Landlord shall have the right to do
regardless of the validity of such levy, but under proper protest if
requested by Tenant prior to such payment and if payment under protest
is permissible), Tenant shall pay to Landlord upon demand, as
Additional Rent hereunder, the taxes so levied against Landlord or the
proportion of such taxes resulting from such increase in the
assessment; provided, however, that in any such event, Tenant shall
have the right, on behalf of Landlord and with Landlord's full
cooperation, but at no cost to Landlord, to bring suit in any court of
competent
26
<PAGE>
jurisdiction to recover the amount of any such tax so paid under
protest, and any amount so recovered shall belong to Tenant (provided
Tenant has previously paid such amount to Landlord). Notwithstanding
the foregoing to the contrary, Tenant shall cooperate with Landlord to
the extent reasonably necessary to cause the fixtures, furnishings,
equipment and other personal property to be assessed and billed
separately from the real property of which the Premises form a part,
and Landlord shall use reasonable efforts to treat all other Tenants
on the same basis.
(b) Tenant shall pay to Landlord, as Additional Rent, any excise, sales,
privilege or other tax, assessment or other charge (other than income
or franchise taxes) imposed, assessed or levied by any governmental or
quasi-governmental authority or agency upon Landlord on account of
this Lease, the rent or other payments made by Tenant hereunder, any
other benefit received by Landlord hereunder, Landlord's business as a
lessor hereunder, or other in respect of or as a result of the
agreement or relationship of Landlord and Tenant hereunder.
35. RIGHTS RESERVED TO LANDLORD:
---------------------------
(a) All portions of the Building are reserved to Landlord except the
Premises and the inside surfaces of all walls, windows and doors
bounding in the Premises, but including exterior building walls, core
corridor walls and doors and any core corridor entrance. Landlord also
reserves any space in or adjacent to the Premises used for shafts,
stacks, pipes, conduits, fan rooms, ducts, electric or other
utilities, sinks or other Building facilities, and the use thereof, as
well as the right to access thereto through the Premises for the
purposes of operation, maintenance and repair.
(b) Landlord shall have the following rights without liability to Tenant
for damage or injury to property, person or business (all claims for
damage being hereby waived and released), and without effecting an
eviction or disturbance of Tenant's use or possession of the Premises
or giving rise to any claim for setoffs or abatement of rent:
(1) To enter the Premises as more fully provided in this Lease.
(2) To install and maintain signs on the exterior and interior of the
Building, except within the Premises, provided the signs do not
block either completely or partially the exterior windows of the
Premises.
(3) To have pass keys to the Premises.
(4) To have access to all mail chutes according to the rules of the
United States Postal Service.
(5) To do or permit to be done any work in or about the exterior of
the Building or any adjacent or nearby building, land, street or
alley.
27
<PAGE>
(6) To grant to anyone the exclusive right to conduct any business or
render any service in the Building, provided such exclusive right
shall not operate to exclude Tenant from the use expressly permitted
by this Lease.
36. FORCE MAJEURE CLAUSE: Wherever there is provided in this Lease a time
--------------------
limitation for performance by Landlord of any obligation, including but not
limited to obligations related to construction, repair, maintenance or
service, the time provided for shall be extended for as long as and to the
extent that delay in compliance with such limitation is due to accident,
unavailability of employees, strikes, lockouts, riots, an act of God,
governmental control or other factors beyond the reasonable control of
Landlord.
37. SIGNAGE:
--------
(a) No sign, advertisement or notice shall be inscribed, painted or
affixed on any part of the inside or outside of the Building unless of
such color, size and style and in such place upon or in the Building
as shall be first designated by Landlord, but there shall be no
obligation or duty on Landlord to allow any sign, advertisement or
notice to be inscribed, painted or affixed on any part of the inside
or outside of the Building. A directory in a conspicuous place, with
the names of Tenant, not to exceed names, shall be provided by
Landlord on a one time basis. Any necessary revision to such directory
shall be made by Landlord, at Tenant's expense, within a reasonable
time, after written notice from Tenant of the change making the
revision necessary. Landlord shall have the right to remove all non-
permitted signs without notice to Tenant and at the expense of Tenant.
(b) Tenant shall only be permitted to install building standard signs and
logos, subject to Landlord's prior written consent and criteria as to
size, design, materials and location.
38. ATTORNEYS' FEES: In the event of any dispute hereunder, or any default in
---------------
the performance of any term or condition of this Lease, the prevailing
party shall be entitled to recover all costs and expenses associated
therewith, including reasonable attorneys' fees.
39. HAZARDOUS MATERIALS:
-------------------
(a) Tenant shall not cause or permit any Hazardous Material to be brought
upon, kept, or used in or about the Premises by Tenant, its agents,
employees, contractors, licensees or invitees, without the prior
written consent of Landlord (which Landlord shall not unreasonably
withhold as long as Tenant demonstrates to Landlord's reasonable
satisfaction that such Hazardous Material is necessary or useful to
Tenant's business and will be used, kept and stored in a manner that
complies with all laws regulating any such Hazardous Material so
brought upon or used or kept in or about the Premises). If Tenant
breaches the obligations stated in the preceding sentence, or if the
presence of Hazardous Material on the Premises caused or permitted by
Tenant results in contamination of the Premises or Building Complex,
or any part thereof, or if contamination of the Premises or Building
Complex by Hazardous Material otherwise occurs for which Tenant is
legally liable, then Tenant shall indemnify, defend and hold Landlord,
its agents, employees, legal representatives, successors and assigns,
harmless from any and all claims, judgments, damages, penalties,
fines, costs, liabilities, or losses (including, without limitation,
diminution in value of the Premises and Building Complex, damages for
the loss or restriction on use of any rentable or usable space or of
any amenity of the Premises or Building Complex, damages arising from
any adverse impact on marketing of space in the Building, and sums
paid in settlement of claims, attorneys' fees, consultant fees and
expert fees) which arise during or after the Lease term as a result of
such contamination. This indemnification of Landlord by Tenant
includes, without limitation, costs incurred in connection with any
investigation of site conditions or any cleanup, remedial, removal or
restoration work required by any federal, state, or local governmental
agency or political subdivision because of Hazardous Material present
in or about the Building Complex or the soil or ground water on or
under the Building Complex. Without limiting the foregoing, if the
presence of any Hazardous Material on or about the Building Complex
caused or permitted by Tenant results in any contamination of any
portion thereof, Tenant shall promptly take all actions at its sole
expense as are necessary to return the Building Complex to the
condition existing prior to
28
<PAGE>
the introduction of any such Hazardous Material, subject to obtaining
Landlord's prior written consent to the actions to be taken by Tenant.
Landlord may properly require its consent to the selection of the
contractors and other experts involved in the inspection, testing and
removal or abatement activities, the scope of activities to be
performed, the manner arid method for performance of such activities,
and such other matters as may be required or requested by Landlord for
the safety of and continued use of the Building Complex and all
occupants thereof. Tenant agrees that it, and not Landlord, is
responsible for the use of the Premises 1br purposes of all
notification and reporting requirements under all Hazardous
Material(s) laws, and agrees to comply in all respects with the same.
The obligations and liabilities of Tenant herein shall survive
expiration or termination of this Lease.
(b) "Hazardous Material", as used in this Lease, shall be construed in its
broadest sense and shall include asbestos, other asbestotic material
(which is currently or may be designated in the future as a Hazardous
Material), any petroleum base products, pesticides, paints and
solvents, polychlorinated biphenyl, lead, cyanide, DDT, acids,
ammonium compounds and other chemical products (excluding commercially
used cleaning materials in ordinary quantities) and any substance or
material if defined or designated as a hazardous or toxic substance,
or other similar term, by any federal, state or local law, statute,
regulation, or ordinance affecting the Building Complex or Premises
presently in effect or that may be promulgated in the future, as such
statutes, regulations and ordinances may be amended from time to time.
40. BANKRUPTCY OR INSOLVENCY: If the Tenant becomes a debtor under Chapter 7 of
------------------------
the United States Bankruptcy Code, or in the event that a petition for
reorganization or adjustment of debts is filed concerning the Tenant under
Chapter 11 or Chapter 13 of the Bankruptcy Code, or a proceeding filed
under Chapter 7 is transferred to Chapter 11 or 13, the Trustee or the
Tenant, as Debtor-in-Possession, shall be deemed to have rejected this
Lease. No election by the Trustee or Debtor-in-Possession to assume this
Lease shall be effective unless each of the following conditions, which
Landlord and Tenant hereby acknowledge to be commercially reasonable in the
context of a bankruptcy proceeding, has been satisfied, and the Landlord
has so acknowledged in writing:
(a) The Trustee or Debtor-in-Possession has cured, or has provided the
Landlord "adequate assurance" (as hereinafter defined) that from the
date of such assumption, the Trustee or Debtor-In-Possession will
promptly cure all monetary and non-monetary defaults under this Lease.
(b) The Trustee or Debtor-in-Possession has compensated, or has provided
to the Landlord adequate assurance that within ten (10) days of the
date of assumption, the Landlord will be compensated, for any
pecuniary loss incurred by the Landlord arising from default of the
Tenant, the Trustee or the Debtor-in-Possession as recited in the
Landlord's written statement of pecuniary loss sent to the Trustee or
Debtor-in-Possession.
(c) The Trustee or Debtor-in-Possession has provided the Landlord with
adequate assurance of future performance of each of the Tenant's, the
Trustee's, or Debtor-in-Possession's obligations under this Lease;
provided, however, that
(1) The Trustee or Debtor-in-Possession shall also deposit with the
Landlord, as security for the timely payment of rent and other
sums due hereunder, an amount equal to three months Base Rent,
Additional Rent and other monetary charges accruing under this
Lease; and
(2) The obligations imposed upon the Trustee or Debtor-in-Possession
shall continue with respect to the Tenant or any assignee of this
Lease after the completion of the bankruptcy proceedings.
(d) For purposes of this Paragraph, Landlord and Tenant acknowledge that,
in the context of the bankruptcy proceeding of the Tenant, at a
minimum, "adequate assurance" shall mean:
29
<PAGE>
(1) The Trustee or Debtor-in-Possession will continue to have
sufficient unencumbered assets after the payment of all secured
obligations and administrative expenses to assure the Landlord
that the Trustee or Debtor-in-Possession will have sufficient
funds to fulfill all of the obligations of Tenant under this
Lease; or
(2) The Bankruptcy Court shall have entered an order segregating
sufficient cash payable to the Landlord, and the Trustee or
Debtor-in-Possession shall have granted to the Landlord a valid
and perfected first lien and security interest or mortgage in
property of the Tenant, the Trustee or Debtor-in-Possession,
acceptable as to value and kind to the Landlord, in order to
secure to the Landlord the obligation of the Tenant, Trustee or
Debtor-in-Possession to cure the monetary or non-monetary
defaults under the Lease within the time period set forth above.
(e) The following conditions shall apply to any assignment of this Lease
in Bankruptcy Proceedings:
(1) If the Trustee or Debtor-in-Possession has assumed this Lease and
elects to assign the Lease to any other person, such interest or
estate of Tenant in this Lease may be so assigned only if the
Landlord has acknowledged in writing that the intended assignee
can provide to the Landlord "adequate assurance of future
performance" (as herein-after defined) of all of the terms,
covenants and conditions of this Lease to be performed by the
Tenant.
(2) For the purposes of this provision, Landlord and Tenant
acknowledge that, in the context of a bankruptcy proceeding, at a
minimum, "adequate assurance of future performance" shall mean
that each of the following conditions has been satisfied, and the
Landlord has so acknowledged in writing:
A. The proposed assignee has submitted a current financial
statement audited by a Certified Public Accountant which
shows the net worth and working capital and amounts
determined by Landlord to be sufficient to assure the future
performance by such assignee of all of Tenant's obligations
under this Lease;
B. The proposed, assignee, if requested by the Landlord, shall
have obtained guarantees in form and substance satisfactory
to the Landlord from one or more persons who satisfy the
Landlord's standards of creditworthiness;
C. The Landlord has obtained all consents or waivers from any
third party required under any lease, mortgage, financing
arrangement, or other agreement by which the Landlord is
bound, in order to permit the Landlord to consent to such
assignment.
41. MISCELLANEOUS:
--------------
(a) The rules and regulations attached hereto as Exhibit F, as well as
such rules and regulations as may hereafter be adopted by Landlord for
the safety, care and cleanliness of the Premises and the Building and
the preservation of good order thereon, are hereby expressly made a
part hereof, and Tenant agrees to obey all such rules and regulations.
The violation of any of such rules and regulations by Tenant shall be
deemed a breach of this Lease by Tenant affording Landlord all the
remedies set forth herein. Landlord shall not be responsible to Tenant
for the nonperformance by any other tenant or occupant of the Building
of any of said rules and regulations.
(b) The term "Landlord" as used in this Lease, so far as covenants or
obligations on the part of Landlord are concerned, shall be limited to
mean and include only the owner or owners of the Building at the time
in question, and in the event of any transfer or transfers of tie
title thereto, Landlord herein named (and in the case of any
subsequent transfers or conveyances, the then grantor) shall be
automatically released from and after the date of such transfer or
conveyance of
30
<PAGE>
all liability in respect to the performance of any covenants or
obligations on the part of Landlord contained in this Lease thereafter
to be performed and relating to events occurring thereafter, provided
that any funds in the hands of Landlord or the then grantor at the
time of such transfer in which Tenant has an interest shall be turned
over to the grantee, and any amount then due and payable to Tenant by
Landlord or the then grantor under any provisions of this Lease shall
be paid to Tenant.
(c) As used in this Lease, the term "ordinary business hours" shall mean
the hours from 7:00 a.m. to 6:00 p.m., Monday through Friday, and 9:00
a.m. to 1:00 p.m. on Saturday, except for New Years Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, Christmas Day, and any
other national or state holiday as may be established from time to
time ("Holidays").
(d) This Lease shall be construed as though the covenants herein between
Landlord and Tenant are independent and not dependent and Tenant shall
not be entitled to any setoff of the rent or other amounts owing
hereunder against Landlord, if Landlord fails to perform its
obligations set forth herein, except as herein specifically set forth;
provided, however, the foregoing shall in no way impair the right of
Tenant to commence a separate action against Landlord for any
violation by Landlord of the provisions hereof so long as notice is
first given to Landlord and any holder of a mortgage or deed of trust
covering the Building Complex or any portion thereof whose address
Tenant has been notified in writing and so long as an opportunity has
been granted to Landlord and such holder to correct such violation as
provided in Paragraph 41 (h) hereof.
(e) If any clause or provision of this Lease is illegal, invalid or
unenforceable under present or future laws effective during the term
of this Lease, then and in that event, it is the intention of the
parties hereto that the remainder of this Lease shall not be affected
thereby, and it is also the intention of the parties to this Lease
that in lieu of each clause or provision of this Lease that is
illegal, invalid or unenforceable, there shall be added as a part of
this Lease a clause or provision as similar in terms to such illegal,
invalid or unenforceable clause or provision as may be possible arid
be legal, valid and enforceable, provided such addition does not
increase or decrease the obligations of or derogate from the rights or
powers of either Landlord or Tenant.
(f) The captions of each paragraph are added as a matter of convenience
only and shall be considered of no effect in the construction of any
provision or provisions of this Lease.
(g) Except as herein specifically set forth, all terms, conditions and
covenants to be observed and performed by the parties hereto shall be
applicable to and binding upon their respective heirs, administrators.
executors, successors and assigns. The terms, conditions and covenants
hereof shall also be considered to be covenants running with the land.
(h) Except as otherwise specifically provided herein, in the event
Landlord shall fail to perform any of the agreements, terms, covenants
or conditions hereof on Landlord's part to be performed, and such
nonperformance shall continue for a period of thirty (30) days after
written notice thereof, from Tenant to Landlord, or if such
performance cannot be reasonably had within such thirty (30) day
period, and Landlord shall not in good faith have commenced such
performance within such thirty (30) day period and proceed therewith
to completion, it shall be considered a default of Landlord under this
Lease. Tenant shall give written notice to Landlord in the matter
herein set forth and shall afford Landlord a reasonable opportunity to
cure any such default. In addition, Tenant shall send notice of such
default by certified or registered mail, with proper postage prepaid,
to the holder of any mortgages or deeds of trust covering the Building
Complex or any portion thereof of whose address Tenant has been
notified in writing and shall afford such holder a reasonable
opportunity to cure any alleged default on Landlord's behalf.
(i) If there is more than one entity or person which or who are the
Tenants under this Lease, the obligations imposed upon Tenant under
this Lease shall be joint and several. Further, the obligations of
Tenant under this Lease shall be guaranteed in accordance with and
by the
31
<PAGE>
person(s) identified on the Guaranty of Lease attached hereto and
incorporate herein as Exhibit G.
(j) No act or thing done by Landlord or Landlord's agent during the term
hereof, including but not limited to any agreement to accept surrender
of the Premises or to amend or modify this Lease, shall be deemed to
be binding upon Landlord unless such act or things shall be by an
officer of Landlord or a party designated in writing by Landlord as so
authorized to act. The delivery of keys to Landlord, or Landlord's
agent, employees or officers shall not operate as a termination of
this Lease or a surrender of the Premises. No payment by Tenant or
receipt by Landlord of a lesser amount than the monthly rent herein
stipulated shall be deemed to be other than on account of the earliest
stipulated rent, nor shall any endorsement or statement on any check
or any letter accompanying any check or payment as rent be deemed an
accord and satisfaction and Landlord may accept such check or payment
without prejudice to Landlord's right to recover the balance of such
rent or pursue any other remedy available to Landlord.
(k) Landlord shall have the right to construct other buildings or
improvements in any Common Area, or any other area designated by
Landlord for use by tenants or to change the location, character or
make alterations of or additions to any of said common areas or other
areas. Landlord, during the entire term of this Lease, shall have the
right to change the number and name of the Building at any time
without liability to Tenant.
(l) Tenant acknowledges and agrees that it has not relied upon any
statements representations, agreements or warranties, except such as
are expressed in this Lease.
(m) Notwithstanding anything to the contrary contained herein, Landlord's
liability under this Lease shall be limited to its interests in this
building.
(n) Time is of the essence with respect to the performance of every
provision of this Lease in which time of performance is a factor,
including specifically and without limitation, Tenant's obligation to
make any payments or give any notices.
(o) Tenant and Landlord and the party executing this Lease on behalf of
each of them represent to each other that such party is authorized to
do so by requisite action of the board of directors or partners, as
the case may be, and agree upon request to deliver to each other a
resolution or similar document to that effect.
(p) This Lease shall be governed by and construed in accordance with the
laws of the State where the Premises are located.
(q) This Lease, together with Exhibits A, B, C, D, E, F and the Lease
Addendum attached as Exhibit H, contains the entire agreement of the
parties and may not be amended or modified in any manner except by an
instrument in writing signed by both parties. Tenant shall not record
this Lease or a memorandum hereof.
(r) Tenant shall not use the name of the Building, the Building Complex or
the development in which the Building is situated as part of its legal
or trade name, nor for any purpose other than as an address for the
business to be conducted by Tenant in the Premises.
(s) In the event Landlord makes available to Tenant and its employees any
area of the Building Complex for use as an athletic/health facility,
Tenant agrees, on behalf of itself and its employees, that Landlord
shall have no liability for any damages or injuries incurred by any
person as a result of the use of such facility.
(t) The submission or delivery of this document for examination and review
does not constitute an option, an offer to lease space in the Building
or an agreement to lease. This document shall have no binding effect
on the parties unless and until executed by both Landlord and Tenant.
32
<PAGE>
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease the day and
year first above written.
LANDLORD:
LOEB PARTNERS REALTY & DEVELOPMENT
__________________________________
CORP., as agent for HANOVER RESOURCES INC.
__________________________________________
a COLORADO CORPORATION
__________________________________________
BY: /s/ [SIGNATURE ILLEGIBLE]
______________________________________
TITLE: ___________________________________
LANDLORD NOTARY
---------------
STATE OF ______________)
COUNTY OF _____________)
The foregoing instrument was acknowledged before me this __ day of
________, 19__, by ________________ as ________________ of ________________, a
________________.
Witness my hand and official seal.
My commission expires: ________________.
__________________________________________
Notary Public
Address:__________________________________
__________________________________________
__________________________________________
TENANT:
COLORADO BUSINESS BANK
__________________________________________
ATTEST: A COLORADO CORPORATION
__________________________________________
By: ____________________ BY: /s/ KEVIN G. QUINN
______________________________________
KEVIN G. QUINN
Title: _________________ TITLE: PRESIDENT/TECH CENTER
___________________________________
TENANT NOTARY
-------------
STATE OF Colorado)
COUNTY OF Jefferson)
The foregoing instrument was acknowledged before me this 10th day of
July, 1998, by Kevin G. Quinn as ________________ of ________________, a
________________.
Witness my hand and official seal.
My commission expires: October 21, 2001.
[SIGNATURE ILLEGIBLE]
__________________________________________
Notary Public
Address: 9575 W. Powers Circle
__________________________________
Littleton, CO 80123
__________________________________________
33
<PAGE>
EXHIBIT A
DESCRIPTION OF PREMISES
34
<PAGE>
EXHIBIT B
LEGAL DESCRIPTION
The land referred to in this Lease is described as follows:
PARCEL 1:
A PARCEL OF LAND LYING IN LOT 1. BLOCK 4, A RESUBDIVISION OF BLOCK 7, DENVER
TECHNOLOGICAL CENTER FILING NO.2, BLOCK 2, DENVER TECHNOLOGICAL FILING NO.3, A
PART OF LOTS 1 AND 2, BLOCK 5, A SUBDIVISION OF SECTION 16 AND A PART OF VACATED
S. WABASH ST. SITUATED IN SECTION 16, TOWNSHIP 5 SOUTH, RANGE 67 WEST OF THE
6TH PRINCIPAL MERIDIAN, CITY OF GREENWOOD VILLAGE, COUNTY OF ARAPAHOE, STATE OF
COLORADO, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE SOUTHWEST CORNER OF SAID LOT 1, THENCE NORTHERLY ALONG THE
WEST LINE OF SAID LOT 1 A DISTANCE OF 170.52 FEET TO THE TRUE POINT OF
BEGINNING; THENCE CONTINUING ALONG LAST SAID COURSE A DISTANCE OF 181.72 FEET TO
A POINT OF CURVE; THENCE ALONG THE ARC OF SAID CURVE TO THE RIGHT, HAVING A
RADIUS OF 140.00 FEET AND A CENTRAL ANGLE OF 103 DEGREES 28 MINUTES 07 SECONDS A
DISTANCE OF 252.82 FEET TO A POINT OF TANGENT; THENCE CONTINUING ALONG THE
BOUNDARY OF SAID LOT 1 FOLLOWING FOUR (4) COURSES:
(1) ALONG SAID TANGENT A DISTANCE OF 198.OO FEET TO A POINT OF CURVE;
(2) ALONG THE ARC OF SAID CURVE TO THE RIGHT, HAVING A RADIUS OF 220.00 FEET AND
A CENTRAL ANGLE OF 73 DEGREES 49 MINUTES 32 SECONDS, A DISTANCE OF 283.47 FEET
TO A POINT OF TANGENT;
(3) ON AN ANGLE TO THE LEFT OF 180 DEGREES 00 MINUTES 00 SECONDS ALONG THE
BACKWARD EXTENSION OF SAID TANGENT A DISTANCE OF 136.09 FEET;
(4) ON AN ANGLE TO THE RIGHT OF 89 DEGREES 17 MINUTES 02 SECONDS A DISTANCE OF
18.28 FEET TO A POINT ON A CURVE;
THENCE DEPARTING SAID BOUNDARY OF LOT 1 ON AN ANGLE TO THE RIGHT OF 75 DEGREES
25 MINUTES 05 SECONDS AND ALONG THE ARC OF SAID CURVE TO THE RIGHT, HAVING A
RADIUS OF 75.00 FEET AND A CENTRAL ANGLE OF 12 DEGREES 17 MINUTES 53 SECONDS, A
DISTANCE OF 16.10 FEET TO A POINT OF TANGENT; THENCE ALONG SAID TANGENT A
DISTANCE OF 163.26 FEET; THENCE ON AN ANGLE TO THE RIGHT OF 90 DEGREES 00
MINUTES 00 SECONDS PARALLEL WITH THE SOUTH LINE OF SAID LOT 1 DISTANCE OF 556.30
FEET TO THE TRUE POINT OF THE BEGINNING.
PARCEL II:
A PARCEL OF LAND BEING A PORTION OF EAST PRENTICE AVENUE AS SHOWN AND DEDICATED
BY THE PLAT A RESUBDIVISION OF BLOCK 7, DENVER TECHNOLOGICAL CENTER FILING
140.2, BLOCK 2, DENVER TECHNOLOGICAL FILING NO.3, A PART OF LOTS I AND 2, BLOCK
5, A SUBDIVISION OF SECTION 16 AND A PART OF VACATED S. WABASH ST., SITUATED IN
THE NORTHEAST ONE-QUARTER OF SECTION 16, TOWNSHIP 5 SOUTH, RANGE 67 WEST OF THE
6TH PRINCIPAL MERIDIAN, CITY OF GREENWOOD VILLAGE, COUNTY OF ARAPAHOE, STATE OF
COLORADO, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
35
<PAGE>
COMMENCING AT THE NORTHEAST CORNER OF SAID SECTION 16; THENCE WESTERLY ALONG
THE NORTH LINE OF SAID SECTION 16 A DISTANCE OF 1270.86 FEET TO THE CENTERLINE
OF SOUTH TAMARAC PARKWAY; THENCE ON AN ANGLE TO THE LEFT OF 89 DEGREES 16
MINUTES 04 SECONDS, ALONG SAID CENTERLINE, A DISTANCE OF 1647.74 FEET TO THE
INTERSECTION OF SAID CENTERLINE WITH THE EASTERLY EXTENSION OF THE NORTH
BOUNDARY LINE OF LOT 1, BLOCK 4 OF SAID SUBDIVISION; THENCE ON AN ANGLE TO THE
RIGHT OF 89 DEGREES 17 MINUTES 02 SECONDS, ALONG SAID EXTENSION AND THE NORTH
LINE OF SAID LOT 1 A DISTANCE OF 71.72 FEET TO THE TRUE POINT OF BEGINNING;
THENCE CONTINUING ALONG LAST SAID COURSE, ALONG THE BOUNDARY LINE OF SAID LOT 1
A DISTANCE OF 18.28 FEET; THENCE ON AN ANGLE TO THE LEFT OF 89 DEGREES 17
MINUTES 02 SECONDS ALONG SAID BOUNDARY LINE, ALONG A LINE 40 FEET WESTERLY FROM
AND PARALLEL WITH THE EAST LINE OF SAID LOT 1, A DISTANCE OF 136.09 FEET TO A
POINT ON A CURVE, THE CHORD OF SAID CURVE AND THE SOUTHERLY EXTENSION OF LAST
SAID COURSE FORMS AN ANGLE TO THE RIGHT OF 143 DEGREES 05 MINUTES 14 SECONDS;
THENCE ALONG THE ARC OF SAID CURVE TO THE LEFT, HAVING A RADIUS OF 220.00 FEET
AND A CENTRAL ANGLE OF 73 DEGREES 49 MINUTES 32 SECONDS, A DISTANCE OF 283.47
FEET TO A POINT OF TANGENT; THENCE ALONG SAID TANGENT A DISTANCE OF 23.69 FEET
TO A POINT ON A CURVE, THE CHORD OF SAID CURVE AND THE WESTERLY EXTENSION OF
LAST SAID FORMS AN ANGLE TO THE RIGHT OF 173 DEGREES 38 MINUTES 56 SECONDS;
THENCE ALONG THE ARC OF SAID CURVE TO THE LEFT, HAVING A RADIUS OF 601.00 FEET
AND A CENTRAL ANGLE OF 12 DEGREES 42 MINUTES 07 SECONDS, A DISTANCE OF 133.24
FEET TO A POINT OF REVERSE CURVE; THENCE ALONG THE ARC OF SAID REVERSE CURVE TO
THE RIGHT HAVING A RADIUS OF 75.00 FEET AND A CENTRAL ANGLE OF 74 DEGREES 13
MINUTES .46 SECONDS A DISTANCE OF 97.17 FEET TO THE TRUE POINT OF BEGINNING.
PARCEL III:
AN ACCESS EASEMENT LOCATED IN LOT 1, BLOCK 4, A RESUBDIVISION OF BLOCK 7, DENVER
TECHNOLOGICAL CENTER FILING 2, BLOCK, DENVER TECHNOLOGICAL FILING NO.3, A PART
OF LOTS 1 AND 2, BLOCK 5, A SUBDIVISION OF SECTION 16 AND A PART OF VACATED S.
WABASH ST. SITUATED IN SECTION 16, TOWNSHIP 5 SOUTH, RANGE 67 WEST OF THE 6TH
PRINCIPAL MERIDIAN, CITY OF GREENWOOD VILLAGE, COUNTY OF ARAPAHOE, STATE OF
COLORADO, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE SOUTHWEST CORNER OF SAID LOT 1, BLOCK 4; THENCE NORTHERLY
ALONG THE WEST LINE OF SAID LOT 1 A DISTANCE OF 155.50 FEET TO THE TRUE POINT OF
BEGINNING; THENCE CONTINUING ALONG LAST SAID COURSE, ALONG SAID WEST LINE A
DISTANCE OF 15.02 FEET TO A POINT 170.33 FEET, AS MEASURED AT RIGHT ANGLES,
NORTHERLY FROM THE SOUTH LINE OF SAID LOT 1, THENCE ON AN ANGLE TO THE RIGHT OF
87 DEGREES 17 MINUTES 39 SECONDS, PARALLEL WITH SAID SOUTH LINE A DISTANCE OF
556.30 FEET; THENCE ON AN ANGLE TO THE RIGHT OF 90 DEGREES 00 MINUTES 00 SECONDS
A DISTANCE OF 15.00 FEET; THENCE ON AN ANGLE TO THE RIGHT OF 90 DEGREES 00
MINUTES 00 SECONDS PARALLEL WITH THE SOUTH LINE OF SAID LOT 1 A DISTANCE OF
557.01 FEET TO THE TRUE POINT OF BEGINNING.
THE PROPERTY LEGALLY DESCRIBED ABOVE IS COMMONLY KNOWN AS 8400 EAST PRENTICE
AVENUE, ENGLEWOOD, COLORADO 80111.
36
<PAGE>
EXHIBIT C
ESTOPPEL AND COMMENCEMENT DATE CERTIFICATE
THIS ESTOPPEL AND COMMENCEMENT DATE CERTIFICATE ("Certificate") is
executed this ___ day of ________, 19__, by HANOVER RESOURCES INC., A COLORADO
---------------------- ----------
CORPORATION ("Landlord") COLORADO BUSINESS BANK NA. a COLORADO CORPORATION
- ----------- -------------------------- --------------------
("Tenant") with respect to and forming a part of that certain Office Building
Lease ("Lease") dated ________, 19__, for the premises commonly known as
SUITE 150 ("Premises").
- ---------
WITNESSETH
WHEREAS, the parties desire to reaffirm and/or amend and certify to certain
provisions of the Lease; and
WHEREAS, the parties desire that the matters set forth herein be conclusive
and binding on the parties.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. The Lease Commencement Date is deemed and agreed to be ________, 19__,
and the Lease Termination Date is agreed and deemed to be ________, 19__,
unless sooner terminated, as provided therein.
2. Tenant's first installment of Base Rent in the amount of ______________
Dollars ($______) for the period of _______________ (is due on) (was paid on),
________, 19__.
3. Tenant's first installment of Tenant's Pro Rata Share of Operating
Expenses in the amount of _____________ Dollars ($______) (is due on) (was paid
on) ________, 19__.
4. On ________, 19__, Tenant deposited with Landlord a security deposit
in the form of ______________, in the amount of ___________ Dollars ($______).
5. By execution hereof, Tenant acknowledges and agrees that all
improvements or other work required of Landlord has been satisfactorily
performed and Tenant hereby accepts the Premises in full compliance with the
terms and conditions of the Lease.
6. Except as maybe amended herein, all terms and conditions of the Lease
shall continue in full force and effect and are hereby republished, ratified and
reaffirmed in their entirety.
7. This Certificate shall be binding upon and maybe relied upon by the
parties hereto and their respective legal representatives, successors and
assigns.
37
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Certificate as of the
day and year first above written.
LANDLORD:
LOEB PARTNERS REALTY & DEVELOPMENT
__________________________________
CORP., as agent for HANOVER RESOURCES INC.
__________________________________________
BY:
______________________________________
TITLE: ___________________________________
TENANT:
COLORADO BUSINESS BANK
__________________________________________
A COLORADO CORPORATION
__________________________________________
ATTEST:
BY:
By: ____________________ ______________________________________
KEVIN G. QUINN
TITLE: PRESIDENT/TECH CENTER
Title: _________________ ___________________________________
LANDLORD NOTARY
---------------
STATE OF ______________)
COUNTY OF _____________)
The foregoing instrument was acknowledged before me this __ day of
________, 19__, by ________________ as ________________ and ________________
as ________________ of ________________, a ________________.
Witness my hand and official seal.
My commission expires: ________________.
__________________________________________
Notary Public
Address:__________________________________
__________________________________________
__________________________________________
33
<PAGE>
TENANT NOTARY
-------------
STATE OF __________)
COUNTY OF _________)
The foregoing instrument was acknowledged before me this ____ day of
________, 19__, by ______________ as ________________ and ________________ as
________________ of ________________, a ________________.
Witness my hand and official seal.
My commission expires: ________________.
__________________________________________
Notary Public
Address: _________________________________
__________________________________________
__________________________________________
39
<PAGE>
EXHIBIT D
WORK LETTER AGREEMENT
This Agreement supplements that certain lease (herein-after referred to as
the "Lease") dated and executed concurrently herewith by and between HANOVER
-------
RESOURCES INC., a COLORADO CORPORATION (hereinafter referred to as "Landlord")
- -------------- --------------------
and COLORADO BUSINESS BANK N.A., a COLORADO CORPORATION (hereinafter referred
--------------------------- --------------------
to as "Tenant") with the terms defined in the Lease to have the same definition
where used herein.
Landlord agrees to improve the Premises in accordance with the plans and
specifications attached hereto as Exhibit D-1. Tenant shall be responsible for
all costs and expenses incurred as a result of any modifications, changes or
revisions to the plans requested by Tenant.
IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS WORK LETTER AGREEMENT
THIS ________ DAY OF ______________, 1998.
LANDLORD:
LOEB PARTNERS REALTY & DEVELOPMENT
__________________________________
CORP., as agent for HANOVER RESOURCES INC.
__________________________________________
BY: /s/ [SIGNATURE ILLEGIBLE]
______________________________________
TITLE: VP
___________________________________
TENANT:
a COLORADO BUSINESS BANK, N.A.
__________________________________________
A COLORADO CORPORATION
__________________________________________
ATTEST:
By: /s/ [SIGNATURE ILLEGIBLE] BY: /s/ KEVIN G. QUINN
_________________________ ______________________________________
Title: NOTARY PUBLIC TITLE: PRESIDENT - DENVER TECH CENTER
______________________ ___________________________________
40
<PAGE>
EXHIBIT D-1
PLANS AND SPECIFICATIONS
Landlord to provide the following tenant improvements:
- -----------------------------------------------------
1. New Building Standard Carpet (Patcraft, New Jazz 30 oz.), Building Standard
Pad, and Rubber Base throughout Wood base to remain where existing.
2. Paint ad existing painted walls and all new walls. Where wallcovering is
removed due to demo, prep walls for paint. Paint all heat registers and door
frames.
3. Demo wall to 46"A.F.F. Provide and install new 12"W wood transaction top
approximately 9'-0" long. Provide divider to create two (2) equal
transaction surfaces. Demo wallcovering on this wall only.
4. Provide and install plastic laminate worksurface approximately 8'-0" x 30"W.
Install at 42" A.F.F.
5. Demo wall and door. Reuse door at Remove door and reuse at 7.
6. Remove door and reuse at 10. Provide an install new building standard door.
7. Provide and install building standard door.
8. Provide and install 3/8" tempered glass for conference room to 8'2" height,
approximately 8'-0" wide.
9. Demo wall. Install new building standard door.
10. Install building standard door from 6.
11. Provide and install new building standard door.
12. Ceiling tile repair where necessary and clean-up.
13. HVAC and fire protection.
14. New Building Standard wall.
THE EDWARD BUILDING
8400 EAST PRENTICE AVENUE
Suite 150
3,841 r.s.f.
41
<PAGE>
EXHIBIT E
PARKING SCHEDULE
"Assigned parking spaces provided upon occupancy"
42
<PAGE>
EXHIBIT F
RULES AND REGULATIONS
Landlord and Tenant agree that the following Rules and Regulations shall be
and hereby are made a part of this Lease, and Tenant agrees that Tenant's
employees and agents, or any others permitted by Tenant to occupy or enter the
Premises, will at all times abide by said Rules and Regulations:
1. The sidewalks, entries, passages, corridors, stairways and elevators of the
Building shall not be obstructed by Tenant, or Tenant's agents or
employees, or used for any purpose other than ingress to and egress from
the Premises.
2. Furniture, equipment or supplies will be moved in or out of the Building
only upon the elevator designated by Landlord and then only during such
hours and in such manner as may be prescribed by Landlord and upon no less
than forty-eight (48) hours prior notice to Landlord. Landlord shall have
the right to approve or disapprove the movers or moving company employed by
Tenant. Tenant shall cause the movers to use only the loading facilities
and elevator designated by Landlord. In the event Tenant's movers damage
the elevator or any part of the Building, Tenant shall forthwith pay to
Landlord the amount required to repair said damage. Tenant shall insure
that deliveries of materials and supplies to the Premises are made through
such entrances, elevators and corridors and at such times as may from time
to time be designated by Landlord, and shall promptly pay or cause to be
paid to Landlord the cost of repairing any damage in or to the Building or
Building Complex caused by any person making such deliveries.
3. No safe or other articles, the weight of which may in the opinion of
Landlord constitute a hazard or damage to the Building or Building's
equipment, shall be moved into the Premises.
4. Safes and other equipment, the weight of which is not excessive, shall be
moved into, from and about the Building only during such hours and in
such manner as shall be prescribed by Landlord; and Landlord shall have
the right to designate the location of such articles in the Premises.
5. During the entire term of this Lease, Tenant shall, at Tenant's expense,
install and maintain under each and every caster chair a chair pad or
Landlord approved carpet casters to protect the carpeting.
6. No sign, advertisement or notice shall be inscribed, painted or affixed on
any part of the inside or outside of the Building unless of such color,
size and style and in such place upon or in the Building, as shall be first
designated and approved in writing by Landlord, provided, however, there
shall be no obligation or duty on Landlord to allow any sign, advertisement
or notice to be inscribed, painted or affixed on any part of the inside or
outside of the Building except as otherwise provided in the Lease. No
furniture shall be placed in front of the Building or in any lobby or
corridor, without the prior written discretionary consent of Landlord.
Landlord shall have the right to remove all non-permitted signs and
furniture, without notice to Tenant, and at the expense of Tenant.
7. Tenant shall not do or permit anything to be done in the Premises, or bring
or keep anything therein which would in any way increase the rate of fire
insurance on the Building or on property kept therein, constitute a
nuisance or waste, or obstruct or interfere with the rights of other
tenants, or in any way injure or annoy them, or conflict with any of the
rules or ordinances of the Fire Department or of the Department of Health
of the City and County where the Building is located.
8. Tenant shall not employ any person or persons other than the BONDED janitor
------
of Landlord for the purpose of cleaning or taking care of the Premises,
without the prior written consent of Landlord. Landlord shall be in no way
responsible to Tenant for any loss of property from the premises, however
occurring, or for any damage done to Tenants furniture or equipment by the
janitor or any of janitor's staff, or by any other person or persons
whomsoever. The janitor of the building may at all times keep a pass key,
and other agents of Landlord shall at all times be allowed admittance to
the Premises.
43
<PAGE>
9. Water closets and other water fixtures shall not be used for any purpose
other than that for which the same are intended, and any damage resulting
to the same from misuse on the part of Tenant, Tenant's agents or
employees, shall be paid for by Tenant. No person shall waste water by
tying back or wedging the faucets or in any other manner.
10. No animals EXCEPT HEARING AND SEEING EYE DOGS shall be allowed in the
----------------------------------
office, halls, corridors and elevators in the Building. No person shall
disturb the occupants of this or adjoining buildings or premises by the use
of any radio, sound equipment or musical instrument or by the making of
loud or improper noises.
11. No vehicles, including bicycles, shall be permitted in the offices, halls,
corridors, and elevators in the Building nor shall any vehicles be
permitted to obstruct the sidewalks or entrances of the Building.
12. Tenant shall not allow anything to be placed on the outside of the
Building, nor allow anything to be thrown by Tenant, Tenant's agents or
employees, out of the windows or doors, or down the corridors, elevator
shafts, or ventilating ducts or shafts of the Building. Tenant, except in
case of fire or other emergency, shall not open any outside window.
13. No additional lock or locks shall be placed by Tenant on any door in the
Building unless written consent of Landlord shall first have been obtained.
If, with Landlord's consent, Tenant installs lock(s) incompatible with the
Building Master Locking System: (a) Landlord, without abatement of rent,
shall be relieved of any obligation under this Lease to provide any service
to the affected areas which requires access thereto; (b) Tenant shall
indemnify Landlord against any expenses as a result of forced entry
thereto, which may be required in an emergency; and (c) Tenant shall at the
end of the term and at Landlord's request remove such lock(s) at Tenant's
expense. A reasonable number of keys to the toilet rooms if locked by
Landlord will be furnished by Landlord, and neither Tenant, Tenant's agents
or employees shall have any duplicate keys made. At the termination of this
tenancy, Tenant shall promptly return to Landlord all keys to offices,
toilet rooms or vaults. Landlord may from time to time install and change
locking mechanisms on entrances to the Building, Building Complex and the
Premises, and shall provide Tenant with two (2) sets of keys for each
lockset at no additional charge. If now or at any future time the locking
mechanisms of the Building Complex or Premises utilize "card keys," Tenant
shall deposit with Landlord the sum of $15.00 for each card key issued to
Tenant and Tenant's employees, as a deposit to be refunded to Tenant upon
return of the applicable card key.
14. No window shades, blinds, screens, draperies or other window coverings will
be attached or detached by Tenant without Landlord's prior written consent.
Tenant agrees to abide by Landlord's rules with respect to maintaining
uniform curtains, draperies and/or linings at all windows and hallways.
15. No awnings shall be placed over any window.
16. If Tenant desires telegraphic, telephonic or other electric connections,
Landlord or Landlord's agents will direct the electricians as to where and
how the wires may be introduced and without such directions, no boring or
cutting for wires will be permitted. Any such installation and connection
shall be made at Tenant's expense.
17. Tenant shall not install or operate any steam or gas engine or boiler, or
carry on any mechanical operation in the Premises. The use of oil, gas or
inflammable liquids for heating, lighting or any other purpose is expressly
prohibited. Explosives or other articles deemed extra hazardous shall not
be brought into the Building Complex.
18. Any painting or decorating as may be agreed to be done by and at the
expense of Landlord shall be done during regular weekday working hours.
Should Tenant desire such work on Saturdays, Sundays, holidays or outside
of regular working hours, Tenant shall pay for the extra cost thereof.
Tenant shall carry out Tenant's repair, maintenance, alterations and
improvements in the Premises only during times agreed to in advance by
Landlord and in a manner which will not interfere with the rights of the
other tenants in the Building or Building Complex.
44
<PAGE>
19. Except as permitted by Landlord and except for normal office decorating,
Tenant shall not mark upon, paint signs upon, cut, drill into, drive nails
or screws into, or in any way deface the walls, ceilings, partitions or
floors of the Premises or of the Building, and any defacement, damage or
injury caused by Tenant Tenant's agents or employees, shall be paid for by
Tenant.
21. Tenant shall not obstruct or interfere with the rights of other tenants of
the Building, or of persons having business in the Building, or in any way
injure or annoy such tenants or persons.
22. Tenant shall not commit any act or permit anything in or about the Building
which shall or might subject Landlord to any liability or responsibility
for injury to any person or property by reason of any business or operation
being carried on in or about the Building or for any other reason.
23. Tenant shall not use the Building for lodging, sleeping, cooking, or for
any immoral or illegal purpose or for any purpose that will damage the
Building, or the reputation thereof, or for any purposes other than those
specified in the Lease.
24. Canvassing, soliciting, and peddling in the Building are prohibited, and
Tenant shall cooperate to prevent such activities.
25. Tenant shall not conduct mechanical or manufacturing operations, cook or
prepare food, or place or use any inflammable combustible explosive, or
hazardous fluid, chemical, device, substance or material in or about the
Building. Tenant shall comply with all statutes, ordinances, rules, orders,
regulations and requirements imposed by governmental or quasi-governmental
authorities in connection with fire and public safety and fire prevention
and shall not commit any act or permit any object to be brought or kept in
the Building, which shall result in a change of the rating of the Building
by the Insurance Services Officer or any similar person or entity.
26. Tenant shall not use the building for manufacturing or for the storage of
goods, wares or merchandise, except as such storage may be incidental to
the use of the Premises for general office purposes and except in such
portions of the Premises as may be specifically designated by Landlord for
such storage. Tenant shall not occupy the Building or permit any portion of
the Building to be occupied for the manufacture or direct sale of liquor,
narcotics, or tobacco in any form, or as a medical office, barber shop,
manicure shop, music or dance studio or employment agency. Tenant shall not
conduct in or about the Building any auction, public or private, without
the prior written approval of Landlord.
27. Tenant shall not use in the Building any machines, other than the standard
office machines such as typewriters, calculators, copying machines and
similar machines, without the express prior written consent of Landlord.
All office equipment and any other device of any electrical or mechanical
nature shall be placed by Tenant in the Premises in settings approved by
Landlord, so as to absorb or prevent any vibration, noise or annoyance.
Tenant shall not cause improper noises, vibrations, or odors within the
Building.
28. Tenant shall not deposit any trash, refuse, cigarettes, or other substances
of any kind within or out of the Building except in the refuse containers
provided therefore. Tenant shall not introduce into the Building any
substance which might add an undue burden to the cleaning or maintenance of
the Premises or the Building. Tenant shall exercise its best efforts to
keep the sidewalks, entrances, passages, courts, lobby areas, garages or
parking areas, elevators, escalators, stairways, vestibules, public
corridors and halls in and about the Building clean and free from rubbish.
29. Tenant shall use the Common Areas only as a means of ingress and egress,
and Tenant shall permit no loitering by any persons upon Common Areas or
elsewhere within the Building. The Common Areas and roof of the Building
are not for the use of the general public, and Landlord shall, in all
cases, retain the right to control or prevent access thereto by all persons
whose presence in the judgment of the Landlord, shall be prejudicial to the
safety, character, reputation or interests of the Building and its tenants.
Tenant shall not enter the mechanical rooms, air conditioning rooms,
electrical closets, or similar areas or go upon the roof of the Building
without the express prior written consent of Landlord. For purposes hereof,
"Common
45
<PAGE>
Areas" shall mean all portions of the Building Complex which, subject to
the provisions of this Lease and Landlord's rules and regulations governing
such use, are from time to time made available to tenants and their
invitees or which benefit the tenants of the Building, including but not
limited to the lobby, elevators, common walkways and hallways and other
common appurtenances or facilities of the Building Complex.
30. Landlord its agents or representatives reserve the right to exclude or
expel from the Building any person, who, in the judgment of Landlord, is
intoxicated or under the influence of liquor or drugs or who shall in any
manner act in violation of the rules and regulations of the Building.
31. Tenant shall not use the washrooms, restrooms and plumbing fixtures of the
Building, and appurtenances thereto, for any other purpose then the
purposes for which they were constructed, and Tenant shall not deposit any
sweepings, rubbish, rags or other improper substances therein. Tenant shall
not waste water by interfering or tampering with the faucets or otherwise.
If Tenant or Tenant's servants, employees, contractors, jobbers, agents,
licensees, invitees, guests or visitors cause any damage to Such washrooms,
restrooms, plumbing fixtures or appurtenances, such damage shall be
repaired at Tenant's expense and Landlord shall not be responsible
therefor.
32. The sashes, sash doors, skylights, windows and doors that reflect or admit
light or air into the common areas of the Building shall not be covered or
obstructed by Tenant, through placement of objects upon window-sills or
otherwise. Tenant shall cooperate with Landlord in obtaining maximum
effectiveness of the cooling system of the Building by closing drapes and
other window coverings when the sun's rays fall upon the windows of the
Premises. Tenant shall not obstruct, alter or in any way impair the
efficient operation of Landlord's heating, ventilating, air conditioning,
electrical, fire, safety, or lighting systems, nor shall Tenant tamper with
or change the setting of any thermostat or temperature control valves in
the Building.
33. Subject to applicable fire or other safety regulations, all doors opening
into Common Area and all doors upon the perimeter of the Premises shall be
kept closed and, during nonbusiness hours, locked, except when in use for
ingress or egress. If Tenant uses the Premises after regular business hours
or on nonbusiness days, Tenant shall lock any entrance doors to the
Building or to the Premises used by Tenant immediately after using such
doors.
35. Tenant shall not permit its employees or agents to smoke in any lobby,
hallway or restroom within the Building Complex or in any other areas of
the Building Complex posted as a non-smoking area. Notwithstanding the
foregoing, Landlord shall not be required to impose any restrictions on
smoking within the Building for the benefit of Tenant. No decision by
Landlord to permit or prohibit smoking shall be construed as a breach of
this Lease by Landlord.
36. Tenant agrees that Landlord may reasonably amend, modify, delete or add new
and additional rules and regulations to the use and care of the Premises
and the Building, provided such changes shall not unreasonably interfere
with Tenant's use of the Premises for office purposes. Tenant agrees to
comply with all such rules and regulations upon notice to Tenant from
Landlord thereof. In the event of any breach of any rules and regulations
herein set forth or any reasonable amendments, modifications or additions
thereto Landlord shall have all remedies in this Lease provided for in the
event of default by Tenant.
37. All references in these Rules and Regulations to "Tenant" shall be deemed
to include the employees, agents, invitees and licensees of Tenant and
others permitted by Tenant to use or occupy the Premises.
46
<PAGE>
INTENTIONALLY DELETED
- ---------------------
47
<PAGE>
48
<PAGE>
EXHIBIT H
LEASE ADDENDUM
This Addendum to Lease is made by and between HANOVER RESOURCES INC.,
(hereinafter "Landlord") and COLORADO BUSINESS BANK, N.A. (hereinafter
"Tenant").
WHEREAS, the following Articles 1, 2, and 3 shall be incorporated into the
Lease, and the parties hereto, agree to as follows:
1. EQUIPMENT INSTALLATION:
-----------------------
SUBJECT TO THE DENVER TECH CENTER, LOCAL LAWS AND ORDINANCES, AND
LANDLORD'S FINAL APPROVAL, LANDLORD AGREES THAT TENANT SHALL HAVE THE RIGHT
TO INSTALL A NIGHT DEPOSITORY AND ATM ON THE SOUTH SIDE OF THE BUILDING IN
A LOCATION APPROVED BY LANDLORD. SUCH EQUIPMENT WILL BE INSTALLED BY
CONTRACTORS APPROVED BY LANDLORD, AND TENANT SHALL BE SOLELY RESPONSIBLE
FOR ALL COSTS ASSOCIATED WITH SUCH INSTALLATION. TENANT SHALL REMOVE ALL
EQUIPMENT AND ASSOCIATED CONSTRUCTION, VAULTS, ETC. AND RESTORE THE
BUILDING TO ITS ORIGINAL CONDITION AT TENANT'S SOLE COST AND EXPENSE, AT
THE END OF LEASE EXPIRATION, LEASE EXTENSION, OR EARLIER TERMINATION.
2. LEASE CONTINGENCY:
------------------
THIS LEASE IS CONTINGENT UPON ACCEPTANCE OF THE BRANCH BANK APPLICATION,
SUBMITTED BY COLORADO BANK SHARES, INC. TO THE CONTROLLER OF THE CURRENCY.
SHOULD TENANT NOT RECEIVE APPROVAL BY SEPTEMBER 1, 1998, TENANT SHALL
REIMBURSE LANDLORD NO LATER THAN SEPTEMBER 15, 1998 FOR OUT OF POCKET COSTS
INCLUDING, BUT NOT LIMITED TO CONSTRUCTION COSTS, BROKERAGE COMMISSIONS A
THE REMAINING LEASE OBLIGATION OF THE EXISTING TENANT IN THE PREMISES.
(USA HEALTH NETWORK, INC.)
3. OPTION TO RENEW:
----------------
PROVIDED TENANT HAS NOT BEEN IN DEFAULT DURING THE PRIMARY TERM OF THIS
LEASE, TENANT SHALL HAVE ONE (1) FIVE (5) YEAR OPTION TO RENEW THE LEASE
FOR ALL THE SPACE THEN DEMISED UNDER THE INITIAL LEASE AGREEMENT UPON FIRST
PROVIDING LANDLORD WRITTEN NOTICE (RETURN RECEIPT REQUESTED) OF ITS
INTENTION T0 EXERCISE THE RENEWAL OPTION NINE (9) MONTHS PRIOR TO THE
EXPIRATION DATE. THE RENTAL RATE FOR THE RENEWAL TERM SHALL BE AT THE THEN
PREVAILING MARKET RATE FOR COMPARABLE BUILDINGS IN THE DENVER TECH CENTER
AREA, EXCEPTING; BROKERAGE COMMISSIONS, RENTAL ABATEMENT, MOVING ALLOWANCE
OR SIMILAR CONCESSIONS. FURTHER, IN NO EVENT SHALL THE RENEWAL RATE BE LESS
THAN THE LAST YEAR'S RENTAL RATE DURING THE PRIMARY TERM. LANDLORD SHALL
PROVIDE TENANT WITH THE MARKET RENTAL RATE AFTER RECEIPT OF TENANT'S
EXERCISE OF THIS OPTION. TENANT SHALL HAVE TEN (10) BUSINESS DAYS TO
EXECUTE THE OPTION EXTENSION, AFTER WHICH, IF THE TENANT HAS NOT EXECUTED
THE OPTION EXTENSION THEN THIS LEASE SHALL. EXPIRE PER THE PROVISIONS OF
SECTION 2 OF THIS LEASE AND TENANT SHALL HAVE NO OPTION TO RENEW HEREUNDER.
TIME IS OF THE ESSENCE WITH REGARD TO THIS OPTION CLAUSE.
4. ASSIGNMENT AND SUBLETTING:
-------------------------
FOR A PERIOD OF THIRTY (30) DAYS AFTER TENANT'S NOTICE OF SUBLETTING OR
ASSIGNMENT IS GIVEN TO LANDLORD, LANDLORD WILL HAVE THE RIGHT BY WRITTEN
NOTICE TO TENANT TO:
49
<PAGE>
(1) IN THE CASE OF A PROPOSED SUBLEASE, EITHER
(A) SUBLET FROM TENANT ANY PORTION OF THE PREMISES PROPOSED TO BE SUBLET
FOR THE TERM FOR WHICH SUCH PORTION IS PROPOSED TO BE SUBLET BUT AT
THE SAME RENT AS TENANT IS REQUIRED TO PAY TO LANDLORD UNDER THIS
LEASE FOR THE SAME SPACE, COMPUTED ON A PRO RATA SQUARE FOOTAGE BASIS,
OR
(2) IN THE CASE OF A PROPOSED ASSIGNMENT, TERMINATE THIS LEASE.
IF LANDLORD TERMINATES THIS LEASE, SUCH TERMINATION WILL BE AS OF THE DATE
SPECIFIED IN THE NOTICE. IF LANDLORD TERMINATES THIS LEASE, LANDLORD MAY, IF IT
ELECTS, ENTER INTO A NEW LEASE COVERING THE PREMISES OR A PORTION THEREOF WITH
THE INTENDED ASSIGNEE OR SUBTENANT, ON SUCH TERMS AS LANDLORD AND SUCH PERSON
MAY AGREE, OR ENTER INTO A NEW LEASE COVERING THE PREMISES OR A PORTION OF THE
PREMISES WITH ANY OTHER PERSON. IN SUCH EVENT, TENANT WILL NOT BE ENTITLED TO
ANY PORTION OF THE PROFIT, IF ANY, WHICH LANDLORD MAY REALIZE ON ACCOUNT OF SUCH
TERMINATION AND RELETTING. LANDLORD'S EXERCISE OF ITS AFORESAID OPTION WILL NOT
BE CONSTRUED TO IMPOSE ANY LIABILITY UPON LANDLORD WITH RESPECT TO ANY REAL
ESTATE BROKERAGE COMMISSION(S) OR ANY OTHER COST OR EXPENSES INCURRED BY TENANT
IN CONNECTION WITH ITS PROPOSED SUBLETTING OR ASSIGNMENT.
IF TENANT COMPLIES WITH THE PROVISIONS OF THIS SECTION AND LANDLORD DOES NOT
EXERCISE AN OPTION PROVIDED TO LANDLORD, LANDLORD'S CONSENT TO A PROPOSED
ASSIGNMENT OR SUBLETTING WILL NOT BE UNREASONABLY WITHHELD. WITHOUT LIMITING THE
OTHER INSTANCES IN WHICH IT MAY BE REASONABLE FOR LANDLORD TO WITHHOLD ITS
CONSENT TO AN ASSIGNMENT OR SUBLETTING, LANDLORD AND TENANT ACKNOWLEDGE THAT IT
WILL BE REASONABLE FOR LANDLORD TO WITHHOLD ITS CONSENT IN ANY OF THE FOLLOWING
INSTANCES:
(1) THE PROPOSED ASSIGNEE OR SUBLESSEE IS A GOVERNMENTAL AGENCY;
(2) IN LANDLORD'S REASONABLE JUDGMENT THE USE OF THE PREMISES BY THE PROPOSED
ASSIGNEE OR SUBLESSEE WOULD ENTAIL ALTERATIONS THAT WOULD LESSEN THE VALUE
OF THE LEASEHOLD IMPROVEMENTS IN THE PREMISES OR WOULD REQUIRE INCREASED
SERVICES BY LANDLORD.
(3) LANDLORD HAS RECEIVED FROM ANY PRIOR TENANT TO THE PROPOSED ASSIGNEE OR
SUBTENANT A NEGATIVE REPORT CONCERNING SUCH PRIOR TENANT'S EXPERIENCE WITH
THE PROPOSED ASSIGNEE OR SUBTENANT;
(4) LANDLORD HAS EXPERIENCED PREVIOUS DEFAULTS BY OR IS IN LITIGATION WITH THE
PROPOSED ASSIGNEE OR SUBTENANT;
(5) (i) THE PROPOSED ASSIGNEE'S OR SUBTENANT'S ANTICIPATED USE OF THE PREMISES
INVOLVES THE GENERATION, STORAGE, USE, TREATMENT, OR DISPOSAL OF HAZARDOUS
MATERIAL; (ii) THE PROPOSED ASSIGNEE OR SUBTENANT HAS BEEN REQUIRED BY ANY
PRIOR LANDLORD, LENDER OR GOVERNMENTAL AUTHORITY TO TAKE REMEDIAL ACTION IN
CONNECTION WITH HAZARDOUS MATERIAL CONTAMINATING A PROPERTY IF THE
CONTAMINATION RESULTED FROM SUCH ASSIGNEE'S OR SUBTENANT'S ACTIONS OR USE
OF THE PROPERTY IN QUESTION; OR (iii) THE PROPOSED ASSIGNEE OR SUBTENANT IS
SUBJECT TO AN E11FORCEMENT ORDER ISSUED BY ANY GOVERNMENTAL AUTHORITY IN
CONNECTION WITH THE DISPOSAL OR STORAGE OF A HAZARDOUS MATERIAL;
50
<PAGE>
(6) THE USE OF THE PREMISES BY THE PROPOSED ASSIGNEE OR SUBTENANT WILL
VIOLATE ANY APPLICABLE LAW, ORDINANCE OR REGULATION;
(7) THE PROPOSED ASSIGNMENT OR SUBLEASE WILL CREATE A VACANCY ELSEWHERE
IN THE BUILDING.
(8) THE PROPOSED ASSIGNEE OR SUBTENANT, OR ANY PERSON THAT, DIRECTLY OR
INDIRECTLY, CONTROLS, IS CONTROLLED BY, OR IS UNDER COMMON CONTROL WITH
THE PROPOSED ASSIGNEE OR SUBTENANT, IS THEN AN OCCUPANT OF THE BUILDING;
(9) THE PROPOSED ASSIGNEE OR SUBTENANT IS A PERSON WITH WHO LANDLORD IS
NEGOTIATING TO LEASE SPACE IN THE BUILDING OR HAS SHOWN THE BUILDING
WITHIN THE LAST SIX (6) MONTHS.
(10) THE PROPOSED ASSIGNMENT OR SUBLEASE FAILS TO INCLUDE ALL OF THE TERMS
AND PROVISIONS REQUIRED TO BE INCLUDED PURSUANT TO THIS PARAGRAPH;
(11) IN THE CASE OF A SUBLETTING OF LESS THAN THE ENTIRE PREMISES, IF THE
SUBLETTING WOULD RESULT IN THE DIVISION OF THE PREMISES INTO MORE THAN TWO
SUBPARCELS OR WOULD REQUIRE ACCESS TO BE PROVIDED THROUGH SPACE LEASED OR
HELD FOR LEASE TO ANOTHER TENANT OR IMPROVEMENTS TO BE MADE OUTSIDE THE
PREMISES.
(D) IF TENANT ASSIGNS OR SUBLETS THE PREMISES OR REQUESTS LANDLORD'S CONSENT TO
A PROPOSED ASSIGNMENT, SUBLETTING OR OTHER ACT, THEN TENANT WILL PAY TO
LANDLORD AN ADMINISTRATIVE FEE IN THE SUM OF $500.00 AND ALSO LANDLORD'S
REASONABLE ATTORNEY'S FEES.
51
<PAGE>
EXHIBIT 10.4
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the 1st
day of July, 1998, by and between Colorado Business Bankshares, Inc., a Colorado
corporation ("Company"), and Kevin G. Quinn ("Employee").
WITNESSETH:
WHEREAS, Employee desires to be employed by Company or one of its
subsidiaries and the parties desire to set forth certain conditions of
Employee's employment as hereinafter set forth.
NOW, THEREFORE, the parties agree as follows:
1. EMPLOYMENT. Company hereby agrees to employ Employee, and Employee
----------
hereby agrees to be employed by Company, as (a) President of The Denver Tech
Center branch of Company's subsidiary Colorado Business Bank ("CBB"), and (b)
such other different executive capacities with the Company, CBB or any other
Company subsidiary as may be determined from time to time by the Boards of
Directors of Company, CBB or such other subsidiary.
2. RESPONSIBILITIES OF EMPLOYMENT. During the term of Employee's
------------------------------
employment, Employee:
(a) shall diligently and faithfully serve Company and its subsidiaries
in such executive capacities as may be determined from time to time by the
Boards of Directors of Company and its subsidiaries, and Employee shall
devote Employee's best efforts and entire business time, services and
attention to the advancement of Company's interests;
(b) shall not, without the prior written consent of the Board of
Directors of Company, engage in any other employment or business, directly
or indirectly, as a sole proprietor, a member of a partnership or limited
liability company, as a director, officer, employee or shareholder of a
corporation not affiliated with Company, or as a consultant or otherwise,
whether for compensation or otherwise, which could reasonably be expected
to or does interfere with Employee's performance of Employee's duties
hereunder or which business is in competition in any way with the business
then being conducted by Company and its subsidiaries; provided, however,
that the provisions of this subparagraph (b) shall not be deemed to prohibit
Employee's ownership of stock in any publicly owned corporation so long as
Employee's ownership, directly and indirectly, when aggregated with the
direct and indirect ownership of all members of Employee's family, does not
exceed one percent (1%) of the total outstanding stock of such publicly
owned corporation, measured by reference to either market value or voting
power;
<PAGE>
(c) shall diligently and faithfully carry out the policies, programs
and directions of the Boards of Directors of Company and its subsidiaries;
(d) shall fully cooperate with such other officers of Company and its
subsidiaries as may be elected or appointed by the Boards of Directors of
Company and its subsidiaries; and
(e) shall report to the appropriate executive officer of Company.
3. COMPENSATION. Company will compensate Employee for Employee's services during
------------
the term of this Agreement and Employee's employment hereunder as follows:
(a) Basic Compensation. Company shall pay to Employee as a minimum
------------------
basic compensation the sum of Eighty Thousand Dollars ($80,000.00) per
year, payable in equal semi-monthly installments. Employee's basic
compensation may be increased from time to time in the sole discretion of
Company's Board of Directors.
(b) Benefits. Employee shall be entitled to participate in any and all
--------
other benefits from time to time afforded executive employees of Company,
including, without limitation, health, accident, hospitalization and life
insurance programs. Company shall additionally pay the monthly (not initial
or initiation) dues for Employee at community or business related clubs or
activities to be agreed upon by Employee and Company.
(c) Reimbursement of Expenses. Employee shall be entitled to
-------------------------
reimbursement of ordinary and necessary out-of-pocket expenses reasonably
incurred by Employee on behalf of Company in the course of performing
Employee's duties hereunder, subject to Employee furnishing appropriate
documentation relative to such expenses in form and substance satisfactory
to Company.
(d) Vacations. Employee shall be entitled to four (4) weeks paid
---------
vacation each year, subject to Company's general vacation policy.
(e) Discretionary Bonus Plan. Employee shall be entitled to
------------------------
participate in such discretionary bonus plan as may be adopted and amended,
from time to time, by the Company.
(f) Allocations. As Company and Employee intend that Employee may be a
-----------
dual employee of Company and one or more of its subsidiaries, Company may
allocate to one or more of its subsidiaries any portion of Employee's basic
and other compensation that Company and one or more of its subsidiaries
deem to be a lawful and appropriate allocation, but no such allocation will
relieve Company of any of its obligations to Employee under this Agreement.
<PAGE>
4. TERM AND TERMINATION.
--------------------
(a) Term. The term of Employee's employment shall be a one (1) year term
----
beginning on the date hereof. Upon expiration of the stated term of this
Agreement, Employee's employment with Company shall revert to the status of
employment at will and shall thereafter be subject to termination by either
party and at any time regardless of cause.
(b) Termination. Upon termination of this Agreement by Company, by Employee
-----------
or upon the death or disability of Employee, the rights and obligations of
Employee shall be as follows:
(i) Termination by Employee. In the event Employee elects to terminate
-----------------------
Employee's employment hereunder, this Agreement shall immediately
terminate without any further obligation on the part of Company, except
that Company shall pay to Employee such compensation pursuant to Paragraph
3 hereof as may be accrued and unpaid on the date of termination of
employment.
(ii) Termination by Company for Cause. If Employee's employment
--------------------------------
hereunder is terminated by Company for cause, this Agreement shall
immediately terminate without any further obligation on the part of
Company, except that Company shall pay to Employee such compensation
pursuant to Paragraph 3 hereof as may be accrued and unpaid on the date of
such termination of employment. For purposes of this Agreement, "cause"
shall mean willful failure or neglect of Employee to perform Employee's
duties as prescribed herein, the conviction of a felony, theft,
embezzlement or improper use of corporate funds by Employee, self dealing
detrimental to Company, any attempt to obtain any personal profit from any
transaction in which Company has an interest or any breach of the terms of
Paragraphs 6 or 7 of this Agreement by Employee.
(ii) Termination by Company for Other Reasons. Company shall have the
----------------------------------------
right at any time to terminate Employee's employment hereunder for any reason
by giving Employee written notice (which notice shall fix the date as of which
Employee's employment is to terminate) of its intention to do so. If Employee's
employment hereunder is terminated by Company other than for cause, Company
shall be obligated to pay Employee the severance benefits set forth in Paragraph
4(c) hereof.
(iii) Constructive Discharge. If Employee is ever constructively
----------------------
discharged, Employee may terminate this Agreement and Employee's employment
hereunder by delivering written notice to Company no later than thirty (30) days
before the effective date of termination. If Employee is constructively
discharged, Company shall be obligated to pay Employee the severance benefits
set forth in Paragraph 4(c) hereof. For purposes of the foregoing, "constructive
discharge" means the occurrence of any one or more of the following: (i)
Employee is removed from all of the offices described in Paragraph 1 hereof;
(ii) Company fails to vest with or removes from Employee the duties,
responsibilities, authority or resources that Employee reasonably needs to
competently perform the duties of Employee's office; (iii) Company decreases
Employee's basic compensation or arbitrarily and capriciously decreases
Employee's bonus; or (iv) Company transfer; Employee to a location outside the
Denver metropolitan area; and in any of such events, Company fails to
<PAGE>
cure any of the above within thirty (30) days after Employee gives Company
written notice of such breach.
(v) Termination Upon Change of Control. If a Change of Control occurs, Employee
----------------------------------
may terminate this Agreement and Employee's employment hereunder for any reason
within two (2) years after a Change of Control occurs by delivering written
notice of termination to Company or its successor no less than thirty (30) days
before the effective date of termination (any such notice by Employee which can
be construed as a notice under either Paragraph 4 (b) (iv) or this Paragraph 4
(b) (v) shall be deemed a notice under this Paragraph 4 (b) (v). If Employee so
terminates, Company shall be obligated to pay Employee two (2) times the
severance benefits set forth in Paragraph 4 (c) hereof, with the exception that
the Paragraph 4(c)(ii) bonus component shall be based upon a full year and not
prorated to the date of Employee's termination.
(A) A "Change of Control" will be deemed to have occurred if: a) any person
(as such term is defined in Section 13 (d) or 14 (d) of the Securities Exchange
Act of 1934, as amended (the 1934 Act") other than a person who is a
shareholder of Company as of the date of this Agreement acquires beneficial
ownership (within the meaning of Rule l3d-3 promulgated under the 1934 Act) of
fifty percent (50%) or more of the combined voting power of the then outstanding
voting securities of Company; or b) the individuals who were members of
Company's Board of Directors as of the date of this Agreement (the "Current
Board Members") cease for any reason to constitute a majority of the Board of
Directors of Company or its successor; however, if the election or the
nomination for election of any new director of Company or its successor is
approved by a vote of a majority of the individuals who are Current Board
Members, such new director shall, for the purposes of this paragraph, be
considered a Current Board Member; or c) Company's stockholders approve (1) a
merger or consolidation of Company or CBB and the stockholders of Company
immediately before such merger or consolidation do not, as a result of such
merger or consolidation, own, directly or indirectly, more than fifty percent
(50%) of the combined voting power of the then outstanding voting securities of
the entity resulting, from such merger or consolidation in substantially the
same proportion as their ownership of the combined voting power of the
outstanding securities of Company immediately before such merger or
consolidation; or (2) a complete liquidation or dissolution or an agreement for
the sale or other disposition of all or substantially all of the assets or stock
of Company or CBB (provided that a complete liquidation or dissolution or the
sale or other disposition of all or substantially all the assets or stock of
just CBB will be deemed a "Change of Control", only if Employee is not offered a
position with Company or one of its subsidiaries with responsibilities, although
not necessarily the same title, and reporting requirements consistent with those
responsibilities and reporting requirements set forth in Paragraph 2 hereof).
(B) Notwithstanding and in lieu of Paragraph 4(b)(v)(A), a Change of
Control will not be deemed to have occurred: a) solely because fifty percent
(50%) or more of the combined voting power of the then outstanding voting
securities of Company are acquired by (1) a trustee or other fiduciary holding
securities under one or more employee benefit plans maintained for employees of
Company and its subsidiaries, or (2) any person pursuant to the will or trust of
any existing stockholder of Company, or who is a member of the immediate family
of such stockholder, or (3) any corporation which, immediately prior to such
acquisition, is owned directly or indirectly by the stockholders in the same
proportion as their ownership of stock immediately
<PAGE>
prior to such acquisition; or b) if Employee agrees in writing to waive a
particular Change of Control for the purposes of this Agreement.
(vi) Termination Upon Employee's Disability. In the event Employee's
--------------------------------------
employment is terminated by Company due to Employee's disability, Company
shall be obligated to pay Employee the severance benefits set forth in
Paragraph 4(c) hereof. For purposes of the foregoing, "disability" shall
mean Employee's inability due to illness or other physical or mental
disability to substantially perform Employee's duties as prescribed herein
for a period of sixty (60) days within any consecutive six (6) month
period, and any action to be taken hereunder based on disability shall not
be effective until the expiration of such sixty (60) day period.
(vii) Termination Upon Employee's Death. In the event that Employee
---------------------------------
dies while employed by Company, then Company shall be obligated to pay
Employee's estate the severance benefits set forth in Paragraph 4(c) hereof
(viii) Continuing Obligations of Employee. Notwithstanding anything to
----------------------------------
the contrary contained herein, termination of this Agreement or Employee's
employment hereunder, for whatsoever reason or for no reason at all, by
Employee or otherwise, shall not be deemed in any way to affect Employee's
obligations under Paragraphs 6 and 7 of this Agreement, with respect to
which Employee shall remain bound.
(c) Severance Benefit. Provided Employee is in compliance with
-----------------
Paragraph 4(b)(viii) hereof, Company will pay or provide the following severance
benefits to Employee in lieu of any separation payments otherwise provided upon
termination of employment under any other severance pay or similar plan or
policy of Company:
(i) Twelve (12) consecutive monthly payments each equal to one-
twelfth (1/12th) of Employee's annual basic compensation in effect immediately
prior to Employee's termination;
(ii) Twelve (12) consecutive monthly payments each equal to one-
twelfth (1/12th) of the higher of (a) Employee's discretionary bonus for the
previous calendar year, or (b) the average of Employee's discretionary bonus for
the previous three (3) calendar years (or such fewer calendar years as Employee
has been employed), in each case prorated to the date of Employee termination.
(iii) For the twelve (12) month period following the date of
termination of Employee's employment, Company will maintain in full force and
effect for the continued benefit of Employee each employee benefit plan in which
Employee was a participant immediately prior to the date of Employee's
termination, unless an essentially equivalent and no less favorable benefit is
provided by a subsequent employer at no additional cost to Employee. If the
terms of any employee benefit plan of Company do not permit continued
participation by Employee, then Company will arrange to provide to Employee (at
Company's cost) a benefit substantially similar to and no less favorable than
the benefit Employee was entitled to receive under such plan at the end of the
period of coverage. (This provision specifically is not applicable to any car,
car phone,
<PAGE>
parking and club dues, which benefits, if any, end upon Employee's date of
termination of employment.)
(iv) For the twelve (12) month period following the date of termination
of Employee's employment, Company will treat Employee for all purposes as an
Employee under all of Company's retirement plans in which Employee was a
participant on the date of termination of Employee's employment or under which
Employee would become eligible during such twelve (12) month period (hereinafter
referred to collectively as the "Plan"). Benefits due to Employee under the
Plan shall be computed as if Employee had continued to be an Employee of Company
for the twelve (12) month period following termination of employment. If under
the terms of the Plan such continued coverage is not permitted, Company will pay
to Employee or Employee's estate a supplemental benefit in an amount which, when
added to the benefits that Employee is entitled to receive under the Plan, shall
equal the amount that Employee would have received under the Plan had Employee
remained an employee of Company during such twelve (12) month period.
(v) If any excise tax imposed under Internal Revenue Code Section 4999 or
any successor provision, as amended after the date hereof, is due and owing by
Employee as a result of any amount paid or payable pursuant to this Paragraph 4
(c), Company shall indemnify and hold Employee harmless against all such excise
taxes and any interest, penalties or costs with respect thereto.
(vi) Company will be obligated to make all payments that become due to
Employee under this Paragraph 4 (c) whether or not Employee obtains other
employment following termination. The payments and other benefits provided for
in this Paragraph 4 (c) are intended to supplement any compensation or other
benefits that have accrued or vested with respect to Employee or Employee's
account as of the effective date of termination.
(vii) Company may elect to, defer any payments that may become due to
Employee under this Paragraph 4 (c) if, at the time the payments become due,
Company, CBB or any of Company's other subsidiaries is not in compliance with
any regulatory-mandated minimum capital requirements or if making the payments
would cause Company's, CBB's or any of Company's other subsidiaries' capital to
fall below such minimum capital requirements. In this event, Company will resume
making the payments as soon as it can do so without violating such minimum
capital requirements.
5. SALE OR REORGANIZATION OF COMPANY. This Agreement shall not restrict
---------------------------------
the sale, transfer, consolidation, liquidation, reorganization or disposition of
the assets of Company and to the extent that the business of Company is
conducted in another form or through another entity or entities, such entity or
entities shall be obligated to fulfill Company's obligations hereunder.
6. RESTRICTIVE COVENANT. It is mutually recognized and agreed that the
--------------------
services to be rendered pursuant to this Agreement by Employee are special,
unique and of extraordinary character. Therefore, as a condition to Company's
obligations hereunder, Employee agrees that without Company's prior written
consent, during the term of this Agreement and for a period ending on the first
anniversary of the date of termination of Employee's employment
<PAGE>
hereunder, regardless of cause, Employee will not engage in any manner, directly
or indirectly, to solicit or induce any employee or agent of Company or any of
its subsidiaries to terminate employment with Company or any of its
subsidiaries, as the case may be, or solicit or induce any customer of Company
or any of its subsidiaries to become a customer of any person, firm,
partnership, corporation, trust or other entity that owns, controls or is a
bank, savings and loan association, credit union or similar financial
institution. Furthermore, Employee will at no time during or subsequent to the
term of Employee's employment by Company make any statements or take any actions
which could reasonably be expected to damage the reputation or business of
Company. It is further recognized and agreed that irreparable injury will result
to Company, its businesses and property in the event of a breach of this
covenant by Employee, that such injury would be difficult if not impossible to
ascertain, and therefore, any remedy at law for any breach by Employee of this
covenant will be inadequate and Company shall be entitled to temporary and
permanent injunctive relief without the necessity of proving actual damage to
Company by reason of any such breach. In addition, in the event of a breach
of this covenant by Employee, Company shall also be entitled to recover
reasonable costs and attorneys' fees incurred in connection with the enforcement
of its rights hereunder. Whenever used herein, Company shall be deemed to
include any successors or any other person or entity which may hereafter acquire
the business of Company or any of its subsidiaries. The foregoing
notwithstanding, should the assets of Company be disposed of in such a manner
that no purchaser thereof has acquired a going business, then Employee shall not
be bound by the covenants expressed in this paragraph.
7. TRADE SECRETS AND CONFIDENTIAL INFORMATION. Employee hereby covenants
------------------------------------------
and agrees that Employee will not, except as may be required in connection with
Employee's employment under this Agreement or compelled by any judicial or
administrative order, directly or indirectly, use or disclose to any other
person, firm or corporation, whether during or subsequent to the term of
Employee's employment by Company, irrespective of the time, manner or cause of
the termination of Employee's employment, any information of a proprietary
nature belonging to Company, or which could be reasonably expected to have an
adverse effect on Company, its businesses, property or financial condition,
including but not limited to records, data, documents, processes,
specifications, methods of operation, techniques and know-how, plans, policies,
customer lists, the names and addresses of suppliers or representatives,
investigations or other matters of any kind or description relating to the
products, services, suppliers, customers, sales or businesses of Company. All
records, files, documents, equipment and the like relating to Company's
businesses which Employee shall prepare, use or observe shall be and remain the
sole property of Company, and upon termination of this Agreement or Employee's
employment hereunder for any reason, Employee shall return to the possession of
Company any items of that nature and any copies thereof which Employee may have
in Employee's possession.
8. INDEMNITY.
---------
(a) Indemnification. Company will indemnify Employee (and, upon
---------------
Employee's death, Employees heirs, executors and administrators) to the
fullest extent
<PAGE>
permitted by law against all expenses, including reasonable attorneys'
fees, court and investigative costs, judgments, fines and amounts paid in
settlement (collectively, "Expenses") reasonably incurred by Employee in
connection with or arising out of any pending, threatened or completed
action, suit or proceeding in which Employee may become involved by reason
of Employee having been an officer or director of Company or any of its
subsidiaries. The indemnification rights provided for herein are not
exclusive and will supplement any fights to indemnification that Employee
may have under any applicable bylaw or charter provision of Company or any
of its subsidiaries, or any resolution of Company or any of its
subsidiaries, or any applicable statute.
(b) Advancement of Expenses. In the event that Employee becomes a
-----------------------
party, or is threatened to be made a party, to any pending, threatened or
completed action, suit or proceeding for which Company or any of its
subsidiaries is permitted or required to indemnify Employee under this
Agreement, any applicable bylaw or charter provision of Company or any of
its subsidiaries, any resolution of Company or any of its subsidiaries, or
any applicable statute, Company will, to the fullest extent permitted by
law, advance all Expenses incurred by Employee in connection with the
investigation, defense, settlement or appeal of any threatened, pending or
completed action, suit or proceeding, subject to receipt by Company of a
written undertaking from Employee to reimburse Company for all Expenses
actually paid by Company to or on behalf of Employee in the event it shall
be ultimately determined that Company or any of its subsidiaries cannot
lawfully indemnify Employee for such Expenses, and to assign to Company all
rights of Employee to indemnification under any policy of directors' and
officers' liability insurance to the extent of the amount of Expenses
actually paid by Company to or on behalf of Employee.
(c) Litigation. Unless precluded by an actual or potential conflict of
----------
interest, Company will have the right to recommend counsel to Employee to
represent Employee in connection with any claim covered by this Section 8.
Further, Employee's choice of counsel, Employee's decision to contest or
settle any such claim, and the terms and amount of the settlement of any
such claim will be subject to Company's prior reasonable approval in
writing.
9. ARBITRATION. Any disputes arising out of this Agreement or connected
-----------
with Employee's employment shall be submitted by Employee and Company to
arbitration by the American Arbitration Association or its successor, and the
determination of the American Arbitration Association or its successor shall be
final and absolute. The arbitrator shall be governed by the duly promulgated
rules and regulations of the American Arbitration Association or its successor,
and the pertinent provisions of the laws of the State of Colorado relating to
arbitration. The decision of the arbitrator may be entered as a judgment in any
court in the State of Colorado or elsewhere. The prevailing party shall be
entitled to receive reasonable attorneys' fees incurred in connection with such
arbitration in addition to such other costs and expenses as the arbitrators may
award.
10. INTERPRETATION. This Agreement shall be construed in accordance with
--------------
the internal laws of the State of Colorado. The titles of the paragraphs have
been inserted as a matter
<PAGE>
of convenience of reference only and shall not be construed to control or affect
the meaning or construction of this Agreement.
11. SEVERABILITY. In the event that any portion of this Agreement is found
------------
to be in violation of or conflict with any federal or state law, the parties
agree that said portion shall be modified only to the extent necessary to enable
it to comply with such law.
12. ASSIGNMENT. This Agreement shall not be assignable by Employee, but
shall be binding upon and inure to the benefit of the heirs, successors and
assigns of Employee and Company.
13. NOTICES. All notices or other communications in connection with this
Agreement shall be in writing and shall be deemed to have been duly given when
delivered, sent by professional courier or mailed first class, postage prepaid
and addressed as follows:
(i) If to Company, addressed to:
Colorado Business Bankshares, Inc.
821 - 17th Street
Denver, Colorado 80202
Attn: Steven Bangert
(ii) If to Employee, addressed to:
Kevin G. Quinn
2452 S. Leyden St.
Denver, CO 80222
or such other address or addressed to the attention of such other person or
persons as either of the parties may notify the other in accordance with the
provisions of this paragraph.
14. ENTIRE AGREEMENT. This Agreement is the entire agreement and
----------------
understanding of the parties hereto with respect to the subject matter hereof
and supersedes any and all prior and contemporaneous negotiations,
understandings and agreements with regard to the subject matter hereof, whether
oral or written. No representation, inducement, agreement, promise or
understanding altering, modifying, taking from or adding to the terms and
conditions hereof shall have any force or effect unless the same is in writing
and validly executed by the parties hereto.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COLORADO BUSINESS BANKSHARES,
INC.
/s/ [SIGNATURE ILLEGIBLE] By: /s/ STEVEN BANGERT
--------------------- -------------------------
Steven Bangert
Chief Executive Officer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-START> JAN-01-1998 JAN-01-1997
<PERIOD-END> SEP-30-1998 SEP-30-1997
<CASH> 18,417,000 16,551,000
<INT-BEARING-DEPOSITS> 11,000 56,000
<FED-FUNDS-SOLD> 0 3,900,000
<TRADING-ASSETS> 0 0
<INVESTMENTS-HELD-FOR-SALE> 66,838,000 39,724,000
<INVESTMENTS-CARRYING> 10,509,000 16,417,000
<INVESTMENTS-MARKET> 178,000 279,000
<LOANS> 210,507,000 150,432,000
<ALLOWANCE> 3,108,000 2,080,000
<TOTAL-ASSETS> 328,414,000 236,729,000
<DEPOSITS> 245,224,000 190,558,000
<SHORT-TERM> 37,650,000 15,305,000
<LIABILITIES-OTHER> 2,196,000 1,489,000
<LONG-TERM> 7,190,000 12,330,000
0 0
0 1,500,000
<COMMON> 67,000 49,000
<OTHER-SE> 36,087,000 15,499,000
<TOTAL-LIABILITIES-AND-EQUITY> 328,414,000 236,729,000
<INTEREST-LOAN> 14,435,000 10,127,000
<INTEREST-INVEST> 2,993,000 3,168,000
<INTEREST-OTHER> 1,000 5,000
<INTEREST-TOTAL> 17,429,000 13,300,000
<INTEREST-DEPOSIT> 5,122,000 3,682,000
<INTEREST-EXPENSE> 6,411,000 5,233,000
<INTEREST-INCOME-NET> 11,018,000 8,067,000
<LOAN-LOSSES> 964,000 613,000
<SECURITIES-GAINS> 113,000 25,000
<EXPENSE-OTHER> 9,621,000 7,486,000
<INCOME-PRETAX> 3,570,000 2,162,000
<INCOME-PRE-EXTRAORDINARY> 2,139,000 1,272,000
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 2,139,000 1,272,000
<EPS-PRIMARY> 0.37 0.26
<EPS-DILUTED> 0.35 0.26
<YIELD-ACTUAL> 5.67 5.48
<LOANS-NON> 323,000 803,000
<LOANS-PAST> 277,000 0
<LOANS-TROUBLED> 339,000 343,000
<LOANS-PROBLEM> 3,175,000 2,761,000
<ALLOWANCE-OPEN> 2,248,000 1,660,000
<CHARGE-OFFS> 174,000 212,000
<RECOVERIES> 70,000 191,000
<ALLOWANCE-CLOSE> 3,108,000 2,080,000
<ALLOWANCE-DOMESTIC> 3,108,000 2,080,000
<ALLOWANCE-FOREIGN> 0 0
<ALLOWANCE-UNALLOCATED> 2,293,000 1,707,000
</TABLE>
