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EXHIBIT 10.19.1
OFFICE LEASE
by and between
AMBER DRIVE I, L.L.C.
a Delaware limited liability company
(LANDLORD)
and
MCDATA CORPORATION,
a Delaware corporation
(TENANT)
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TABLE OF CONTENTS
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Page
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ARTICLE 1 DEMISE..........................................................................................1
1.1 Demise..........................................................................................1
ARTICLE 2 TERM............................................................................................1
2.1 Term............................................................................................1
2.2 Supplemental Agreement..........................................................................2
2.3 Landlord's Work.................................................................................2
ARTICLE 3 RENT............................................................................................2
3.1 Base Rent.......................................................................................2
3.2 Additional Rent.................................................................................3
3.3 Interest on Late Payments and Late Payment Charge...............................................3
ARTICLE 4 TAXES AND OPERATING EXPENSE ADJUSTMENT..........................................................4
4.1 Definitions.....................................................................................4
4.2 Payments of Taxes and Operating Expenses........................................................8
4.3 Reimbursement Survives Termination..............................................................9
ARTICLE 5 BUILDING SERVICES..............................................................................10
5.1 Standard Services..............................................................................10
5.2 Interruption of Standard Services..............................................................10
5.3 Services Paid by Tenant........................................................................11
5.4 Above-Standard Service Requirements............................................................11
5.5 Cleaning.......................................................................................12
5.6 Re-Lamping.....................................................................................12
5.7 Landlord's Obligation..........................................................................12
ARTICLE 6 TENANT REPAIR..................................................................................12
6.1 Damage by Tenant...............................................................................12
6.2 Maintenance....................................................................................13
6.3 Good Condition.................................................................................13
6.4 Surrender......................................................................................13
6.5 Broken Glass...................................................................................14
ARTICLE 7 ASSIGNMENT AND SUBLETTING......................................................................14
7.1 Limitations....................................................................................14
7.2 Acceptance of Performance......................................................................15
7.3 Document Review................................................................................15
7.4 Affiliated Entities............................................................................15
ARTICLE 8 TRANSFER BY LANDLORD AND LIMITED LIABILITY.....................................................15
8.1 Transfer of Landlord's Interest................................................................15
8.2 Limited Liability of Landlord..................................................................15
ARTICLE 9 USE OF PREMISES................................................................................16
9.1 Use............................................................................................16
9.2 Compliance with Rules and Regulations..........................................................16
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<TABLE>
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ARTICLE 10 INSURANCE......................................................................................16
10.1 Tenant's Insurance.............................................................................16
10.2 Landlord's Insurance...........................................................................18
10.3 Subrogation....................................................................................18
ARTICLE 11 OBSERVANCE OF LAW..............................................................................19
11.1 Law and Covenants..............................................................................19
11.2 Taxes..........................................................................................19
ARTICLE 12 WASTE AND NUISANCE; ENVIRONMENTAL..............................................................19
12.1 Waste and Nuisance.............................................................................19
12.2 Environmental Covenant.........................................................................19
12.3 Hazardous Substances...........................................................................20
12.4 Environmental Laws.............................................................................20
ARTICLE 13 ENTRY BY LANDLORD..............................................................................21
ARTICLE 14 INDEMNIFICATION................................................................................21
14.1 Indemnification by Tenant......................................................................21
14.2 Indemnification by Landlord....................................................................21
ARTICLE 15 ALTERATIONS....................................................................................22
15.1 Alterations by Tenant..........................................................................22
15.2 Alterations by Landlord........................................................................23
ARTICLE 16 SIGNS AND ADVERTISING..........................................................................23
ARTICLE 17 SUBORDINATION TO MORTGAGES AND DEEDS OF TRUST..................................................24
ARTICLE 18 ESTOPPEL CERTIFICATE/FINANCIAL INFORMATION.....................................................25
18.1 Estoppel Certificate...........................................................................25
18.2 Financial Information..........................................................................25
ARTICLE 19 QUIET ENJOYMENT................................................................................25
ARTICLE 20 FIXTURES.......................................................................................25
ARTICLE 21 DAMAGE OR DESTRUCTION..........................................................................26
21.1 Casualty.......................................................................................26
21.2 Casualty Caused by Tenant......................................................................26
ARTICLE 22 CONDEMNATION...................................................................................27
22.1 Eminent Domain.................................................................................27
22.2 Damages........................................................................................27
22.3 Restoration....................................................................................27
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<TABLE>
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ARTICLE 23 LOSS AND DAMAGE AND DELAY......................................................................27
23.1 Loss and Damage................................................................................27
23.2 Delays.........................................................................................28
ARTICLE 24 DEFAULT AND REMEDIES...........................................................................28
24.1 Default by Tenant..............................................................................28
24.2 Remedies of Landlord...........................................................................29
24.3 Landlord's Default.............................................................................31
24.4 Personal Property Lien.........................................................................31
ARTICLE 25 HOLDING OVER...................................................................................32
ARTICLE 26 NOTICE.........................................................................................32
26.1 Notice.........................................................................................32
26.2 Change of Address..............................................................................33
ARTICLE 27 SECURITY DEPOSIT...............................................................................33
ARTICLE 28 MISCELLANEOUS PROVISIONS.......................................................................33
28.1 Captions.......................................................................................33
28.2 Waiver.........................................................................................33
28.3 Entire Agreement...............................................................................33
28.4 Severability...................................................................................34
28.5 Modification...................................................................................34
28.6 Governing Law..................................................................................34
28.7 Successors and Assigns.........................................................................34
28.8 Authorization to Execute.......................................................................34
28.9 Guaranty of Lease..............................................................................34
28.9 Approval of Documents..........................................................................34
28.10 Prime Rate.....................................................................................34
ARTICLE 29 SUBSTITUTION OF PREMISES.......................................................................34
ARTICLE 30 RECORDING......................................................................................34
ARTICLE 31 REAL ESTATE BROKER.............................................................................35
ARTICLE 32 RENT PREPAYMENT................................................................................35
ARTICLE 33 OTHER PROVISIONS...............................................................................35
33.1 Option to Extend...............................................................................35
33.2 Parking........................................................................................37
33.3 Vacation.......................................................................................37
33.4 Antenna........................................................................................37
33.5 Generator......................................................................................37
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EXHIBIT A - FLOOR PLAN..................................................................................A-1
EXHIBIT B - LEGAL DESCRIPTION...........................................................................B-1
EXHIBIT C - WORK LETTER.................................................................................C-1
EXHIBIT D - SUPPLEMENTAL AGREEMENT......................................................................D-1
EXHIBIT E - RULES AND REGULATIONS.......................................................................E-1
EXHIBIT F - ANTENNA LICENSE.............................................................................F-1
EXHIBIT G - JANITORIAL SPECIFICATIONS...................................................................G-1
EXHIBIT H - COMPONENTS OF STANDARD TENANT FINISH FOR GENERAL OFFICE PURPOSES............................H-1
EXHIBIT I - COMPONENTS OF SITE, SHELL AND CORE..........................................................I-1
EXHIBIT J - ASSIGNMENT AND SUBLETTING FORMS.............................................................J-1
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OFFICE LEASE
THIS OFFICE LEASE ("Lease") is made this __th day of October, 2000, by
and between AMBER DRIVE I, L.L.C., a Delaware limited liability company
("Landlord") and MCDATA CORPORATION, a Delaware corporation ("Tenant").
WITNESSETH
ARTICLE 1
DEMISE
1.1 Demise. Landlord does hereby lease to Tenant and Tenant hereby
leases from Landlord Suites 300, 400, 500, and 600 ("Premises") consisting of
approximately 95,936 rentable square feet ("Rentable Area"), such Premises being
generally depicted on the floor plan attached hereto as Exhibit A and
incorporated herein by this reference, which Premises may be adjusted as set
forth herein. The Premises are situated in that certain building known as 380
Interlocken Crescent located at 380 Interlocken Crescent, Broomfield, Colorado
("Building"), which Building is situated on that certain real Property
("Property") legally described in Exhibit B attached hereto and incorporated
herein by this reference, together with a non-exclusive right subject to the
provisions hereof, to use all appurtenances thereto, including, but not limited
to, any plazas, common areas, walkways or other areas in the Building or on the
Property designated by Landlord from time to time for the non-exclusive use of
the tenants of the Building, all of which inclusive of the Building are
hereinafter collectively called the "Building Complex".
Such letting and hiring is upon and subject to the terms, conditions
and covenants herein set forth, and Tenant covenants as a material part of the
consideration for this Lease to keep and perform each and all of said terms,
conditions and covenants by it to be kept and performed and that this Lease is
made upon the condition of such performance.
ARTICLE 2
TERM
2.1 Term. The term of this Lease and Tenant's obligation to pay rent
shall commence on a Suite by Suite basis on the earlier to occur of (a) February
26, 2001 for the first Suite, February 26, 2001, for the second Suite, March 26,
2001, for the third Suite, and April 23, 2001 for the fourth Suite or (b) the
date upon which Tenant takes occupancy of all or any portion of the respective
Suite ("the Suite Commencement Dates") and shall end at 5:00 p.m. on the last
day of the sixtieth (60th) month after the Suite Commencement Date for the
fourth Suite, unless sooner terminated as herein provided ("Lease Term"). The
period from the Suite Commencement Date for the first Suite and the Suite
Commencement Date for the fourth Suite shall be called the Interim Lease Term."
During the Interim Lease Term the Tenant shall pay Base Rent on a staggered
basis as each Suite Commencement Date occurs and to the extent that any Suite
Commencement Date occurs on other than the first day of a calendar month, the
Base Rent and Additional Rent shall be prorated accordingly. The respective
Suite Commencement Date shall be in the following order, unless Tenant prior to
getting a building permit for the first Suite upon which it intends to commence
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Tenant Improvement Work, requests from Landlord a different order, the approval
of which will not be unreasonably withheld or denied by Landlord.
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Suite Number Suite Commencement Date
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Suite 400 February 26, 2001 (first Suite Commencement Date)
Suite 300 February 26, 2001 (second Suite Commencement Date)
Suite 500 March 26, 2001 (third Suite Commencement Date)
Suite 600 April 23, 2001 (fourth Suite Commencement Date)
</TABLE>
2.2 Supplemental Agreement. Within five (5) days after the Commencement
Date for each Suite, Tenant agrees to execute a Supplemental Agreement in the
form attached as Exhibit D and incorporated herein by this reference, setting
forth the commencement and termination dates of the term of this Lease in
accordance with Section 2.1 above and such other information as the parties may
agree to as set forth therein, including the actual Rentable Area of the
Premises, Base Rent and Tenant's Pro Rata Share as defined herein.
2.3 Landlord's Work. Other than as set forth in the Work Letter,
Landlord shall have no obligation for the completion or condition of the
Premises and Tenant shall accept the Premises in its "AS IS" condition as of the
date Landlord delivers possession thereof in accordance with the provisions of
the Work Letter, subject to any Punch List Items as defined in the Work Letter
and Warranty as set forth in the Work Letter.
ARTICLE 3
RENT
3.1 Base Rent. Tenant agrees to pay as base annual rent ("Base Rent")
during the Lease Term in amounts set forth in the following schedule:
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BASE RENT PER SQUARE
PERIOD FOOT OF RENTABLE AREA MONTHLY BASE RENT* ANNUAL BASE RENT*
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Interim Lease Year $18.75 $ $
First Lease Year $18.75 $ $
Second Lease Year $19.13 $ $
Third Lease Year $19.51 $ $
Fourth Lease Year $19.90 $ $
Fifth Lease Year $20.30 $ $
</TABLE>
*In the Supplemental Agreement for the fourth Suite, the parties will
set forth the schedules for Monthly Base Rent and Annual Base Rent.
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Base Rent which shall be payable in equal monthly installments without
notice, deduction, set-off or abatement (except as set forth in Articles 21 and
22 hereof this Lease) to Landlord at the address for Landlord set forth in
Article 26 or such other address as Landlord may notify Tenant of in writing, in
lawful money of the United States payable in advance on the first day of each
month. If the Lease Term commences or terminates on a day other than the first
or last day of a calendar month respectively, then the installments of Base Rent
for such month or months shall be prorated based on the actual number of days in
such month and the installments so prorated shall be paid in advance. The term
"Lease Year" shall mean each twelve (12) full month period subsequent to the
first Lease Year. If the Lease Term begins on a date other than the first day of
a month, the first Lease Year shall commence on the first day of the calendar
month following the Fourth Suite Commencement Date and shall continue until the
last day of the twelfth (12th) full month thereafter. Base Rent for any such
partial month containing the Commencement Date shall be prorated for such month
and shall be due and payable on the Commencement Date.
3.2 Additional Rent. Any other sums of money or charges to be paid by
Tenant pursuant to the provisions of this Lease are designated as "Additional
Rent". A failure to pay Additional Rent shall be treated in all events as the
failure to pay rent.
3.3 Interest on Late Payments and Late Payment Charge.
(a) Any rent (whether Base Rent or Additional Rent) or other amount due
from Tenant to Landlord under this Lease not paid when due shall bear interest
from the notice and cure period until the date paid at the rate of one and
one-half percent (1 1/2%) per month ("Default Rate"), but the payment of such
interest shall not excuse or cure any default by Tenant under this Lease.
Failure to charge or collect such interest in connection with any one or more
such late payments shall not constitute a waiver of Landlord's right to charge
and collect such interest in connection with any other or similar or like late
payments.
(b) Notwithstanding the above, in the event any rent or other amounts
owing hereunder are not paid within five (5) days after the due date, then
Landlord and Tenant agree that Landlord will incur additional administrative
expenses, the amount of which will be difficult if not impossible to determine.
Accordingly, in addition to such required payment, Tenant shall pay to Landlord
an additional late charge for any such late payment in the amount of five
percent (5%) of the amount of such late payment.
(c) Notwithstanding the above, Landlord shall give written notice of
non-payment to Tenant and if Landlord receives payment of such amounts due
within five (5) days of such notice, then Landlord shall waive the interest and
late charge on such late payment for the first two (2) late payments in any
calendar year. Landlord (a) shall have no obligation to waive such interest or
late charge more than twice during any calendar year; and (b) shall have no
obligation to waive any interest or late charge if Tenant is in default under
this Lease beyond any applicable cure, grace or notice period.
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ARTICLE 4
TAXES AND OPERATING EXPENSE ADJUSTMENT
In addition to Base Rent, Tenant shall reimburse Landlord for Real
Estate Taxes and Operating Expenses (which sum may be adjusted pursuant to
Section 4.2) for the Building Complex as hereinafter set forth in this Section.
4.1 Definitions. The following terms shall have the following meanings
with respect to the provisions of this Lease:
(1) "Tenant's Pro Rata Share" shall mean that fraction, the
numerator of which is the Rentable Area of the Premises as determined by
Landlord and the denominator of which is estimated to be approximately 240,186
rentable square feet being the total Rentable Area of the Building Complex as
determined by Landlord for the fourth Suite which calculation shall be
determined by Landlord and included in the Supplemental Agreement for the fourth
Suite. If any space is added to or subtracted from the Premises Tenant's Pro
Rata Share shall be adjusted by Landlord accordingly. Landlord's system for
measurement of rentable area shall be in accordance with the Standard Method of
Measuring Floor Area in Office Buildings of the Building Owners and Managers
Association International (ANSI/BOMA Z65.9-1996) including question and answer
section. Landlord and Tenant agree that the Rentable Area of the Premises will
be as set forth in the final Space Plans as more specifically set forth in
Exhibit C and this Lease shall be adjusted accordingly, including Tenant's Pro
Rata Share, monthly and annual Base Rent calculation and aggregate Allowances,
if any. When the Rentable Area of the Premises has been determined in accordance
with the final Space Plan neither Tenant's Base Rent nor its Pro Rata Share may
be adjusted (except as set forth in Articles 7, 21 and 22 hereof)
notwithstanding any remeasurement of the Building or of the Premises by Landlord
or Tenant. Notwithstanding the above, during the Interim Lease Term Tenant's Pro
Rata Share shall be calculated for each Suite as of such Suite's respective
Suite Commencement Date, and Tenant shall not pay its Pro Rata Share of Real
Estate Taxes and Operating Expenses in any month applicable to a Suite prior to
such Suite's respective Suite Commencement Date.
(2) "Real Estate Taxes" shall include (i) any form of
assessment (including any so-called "special" assessments), license tax,
business license fee, business license tax, commercial rental tax, levy, charge,
or tax, imposed by any authority having the direct power to tax, including any
city, county, state or federal government, or any school, agricultural,
lighting, water, drainage or other improvement or special district thereof,
against the Premises, the Building, Property, or Building Complex or any legal
or equitable interest of Landlord therein; and (ii) any assessments, tax, fee,
levy or charge in substitution, partially or totally, of or in addition to any
assessment, tax, fee, levy or charge previously included within the definition
of Real Estate Taxes, including, without limitation, those which may be imposed
by governmental agencies for such services as fire protection, street, sidewalk
and road maintenance, refuse removal and for other governmental services
formerly provided without charge to property owners or occupants. It is the
intention of Landlord and Tenant that all such new and increased assessments,
taxes, fees, levies and charges be included within the definition of Real Estate
Taxes for purposes of this Lease. The following shall also be included within
the definition of Real Estate Taxes for purposes of this Lease, provided,
however, that Tenant shall pay Landlord the entire amount thereof: (x) any tax
allocable to or measured by the area of the Premises or the rental payable
hereunder, including without limitation, any gross income, privilege, sales or
excise tax levied by the State, any political subdivision thereof, city,
municipal or federal government, with respect to the receipt of such rental, or
upon or with respect to the possession, leasing, operating, management,
maintenance, alteration, repair, use or
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occupancy by Tenant of the Premises or any portion thereof; and (y) any tax upon
this transaction or any document to which Tenant is a party, creating or
transferring an interest or an estate in the Premises. "Real Estate Taxes" shall
not include Landlord's federal or state income, franchise, inheritance or estate
taxes. "Real Estate Taxes" included in this definition mean taxes or assessments
in the year assessed, without regard to the year in which same become due or
payable.
(3) "Operating Expenses" shall mean all maintenance and
operating costs of any kind or nature with respect to the operation, ownership
and maintenance of the Building Complex and shall include, but not be limited
to, the cost of building supplies, window cleaning, costs incurred in connection
with all energy sources for the Building Complex such as propane, butane,
natural gas, steam, electricity, solar energy and fuel oil; the costs of water
and sewer service, janitorial services, both interior and exterior, general
maintenance, repair and decorating of the Building Complex including the heating
and air conditioning systems and structural components of the Building;
landscaping, maintenance, repair and striping of all parking areas; insurance,
including fire and extended coverage and public liability insurance and any
rental insurance and all risk insurance carried by Landlord, including, without
limitation, insurance carried pursuant to Section 10.2; labor costs incurred in
the operation and maintenance of the Building Complex, including wages and other
payments; costs to Landlord for Workmen's Compensation and disability insurance;
payroll taxes and welfare fringe benefits; professional building management
fees, legal, accounting, inspection and reasonable consultation fees incurred in
connection with the Building Complex; any association or similar fees or dues;
costs of complying with recorded restrictions, covenants and/or easements; any
expense attributable to costs incurred by Landlord for any capital improvements
or structural repairs to the Building or Property required by any change in the
laws, ordinances, rules, regulations or otherwise which were not in effect on
the date Landlord obtained its building permit to construct the Building
required by any governmental or quasi-governmental authority having jurisdiction
over the Building which costs shall be amortized over the useful life of the
capital improvements or structural repair; and any costs incurred by Landlord in
making capital improvements or other modifications to the Building or any part
thereof, not excluded in Section 4.1(c) (viii) below, which costs shall be
amortized over the useful life of such improvement or modification with interest
on the unamortized amount at the rate of the greater of ten and one-half percent
(10.5%) per annum or three percent (3%) above the Prime Rate (as defined in
Section 28.11), in accordance with such reasonable life and amortization
schedules and shall be determined in accordance with generally accepted
accounting principles ("GAAP"). Operating Expenses shall expressly exclude the
following:
(1) Costs of maintenance and repair reimbursed by
insurance proceeds;
(2) Alterations or other specific costs attributable
solely to other tenant's space in the Building which under the terms of the
respective lease is such tenant's responsibility;
(3) Landlord's income taxes;
(4) Leasing commissions, advertising and marketing
expenses, tenant finish for other tenants of the Building Complex, costs of
preparing leases and other costs of Landlord related solely to leasing space for
other tenants in the Building Complex;
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(5) Interest on debt or amortization payments on any
mortgages or deeds of trust, ground lease rent or other charges or expenses in
connection with the financing or refinancing of the Building Complex;
(6) Landlord's costs in enforcing leases for other
tenants in the Building Complex including without limitation, all legal fees,
costs and expenses to collect rent arrearages and recover possession;
(7) Any charge for depreciation of the Building;
(8) The cost of any structural additions to the Building
without the consent of Tenant, unless required by any change in laws or designed
primarily to reduce Operating Expenses as set forth in Section 4.1(c);
(9) Landlord's general overhead;
(10) costs incurred in connection with alterations,
additions or improvements in order to comply with local building codes and
amendments, regulations and directives to Title III of the Americans with
Disabilities Act, of any portion of the Building Complex [except the common
areas of the Building Complex which costs are incurred in order to comply with
changes thereto enacted or promulgated after the date of the issuance of the
Building Permit for the Building];
(11) costs related to the presence existing prior to the
date of this Lease on, in or under the Land, the Building or both, or the
clean-up or remediation of Hazardous Materials;
(12) costs or services or other benefits which are not
offered to Tenant, but which are offered to and provided another tenant or
occupant of the Building Complex;
(13) expenses for which Landlord has been reimbursed
from insurance, from another tenant (other than pursuant to an operating expense
clause similar to the one in the Tenant's lease) or from another source;
(14) expenses which are covered by construction or
equipment warranties;
(15) excessive management fees, which are not within the
market for fees charged by comparable companies for single comparable
properties, and comparable property management companies shall exclude companies
owned by the owner of the property, companies in operation less than ten (10)
years and companies that manage fewer than ten (10) comparable commercial office
buildings;
(16) expenses to repair latent defects in the structural
elements of the Building core and shell;
(17) expenses caused solely from the actual violation of
laws by Landlord, including fees, penalties, and attorneys fees associated
therewith;
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(18) costs or expenses paid directly by any tenant;
(19) costs caused solely by Landlord's gross negligence
or wilful misconduct;
(20) costs incurred due to the violation by Landlord of
the terms and conditions of any lease or contract;
(21) costs incurred with vehicle parking operations,
except to the extent that such costs are more than all revenues obtained solely
from such parking operations;
(22) art and objects of art;
(23) political or charitable contributions; and
(24) costs in excess of the market costs of any goods or
services acquired from any affiliate of Landlord or any of its agents (or
affiliate of any partner, member, shareholder, director, officer of Landlord or
any of its agents).
Notwithstanding any other provisions of this Lease to the contrary, in
determining Operating Expenses (a) the total of Operating Expenses charged to
all tenants of the Building shall not exceed 100% of the Operating Expenses for
the Building; (b) no item of Operating Expenses shall be included more than
once; (c) accounting for Operating Expenses shall be in accordance with
generally accepted accounting principles consistently applied; (d) Operating
Expenses shall reflect all cash discounts, trade discounts or quantity discounts
received by Landlord in the purchase of any goods or services; (e) if capital
items are leased, rather than purchased, Operating Expenses for any period shall
reflect no more than the amortized amount that would be included in Operating
Expenses, had the item been purchased.
(4) "Variable Operating Expenses" shall mean those Operating
Expenses which vary with occupancy levels or which vary with areas serviced
based upon occupied Rentable Area or which are paid directly by tenants of the
Building. Landlord may equitably make adjustments to Operating Expenses to
account for such Variable Operating Expenses.
(5) If during any year of the term of this Lease, including
the Interim and First Lease Year or portion thereof, the Building is less than
ninety-five percent (95%) occupied for periods greater than one hundred eight
(180) consecutive days, those Operating Expenses which vary with occupancy
levels of the Building shall be equitably adjusted by Landlord to reflect the
level of Operating Expenses which reasonably would be incurred if the Building
were ninety-five (95%) occupied.
(6) Landlord shall not charge Tenant for any increases in
"Controllable Operating Expenses" after the second full calendar year of the
Lease Term which are greater than five percent (5%) of the prior year's
Controllable Operating Expenses cumulative over the Lease Term with each year's
Controllable Operating Expenses grossed up to 95% occupancy if the Building is
less than fully occupied. For purposes hereof, "Controllable Operating Expenses"
shall mean costs and expenses that Landlord can contract for at an hourly rate.
For example, Landlord can
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control the hourly rate for snow removal, which hourly rate will be subject to
the above cap; however, Landlord cannot control the number of times snow removal
will be necessary during the year and there shall be no limit on snow removal
costs attributable to the number of times that snow removal occurs. In no event
shall there be any cap on any expenses attributable to taxes, insurance or
utilities.
4.2 Payments of Taxes and Operating Expenses. It is hereby agreed that
during each Lease Year of the Lease Term Tenant shall pay to Landlord Tenant's
Pro Rata Share of the amount of the Operating Expenses and Real Estate Taxes for
the Building Complex as set forth above. It is agreed that Tenant shall, during
each calendar year pay to Landlord an estimate of Tenant's Pro Rata Share of
such Real Estate Taxes and Operating Expenses as hereinafter set forth.
Beginning on the Commencement Date, Tenant shall pay to Landlord each month on
the first day of the month an amount equal to one-twelfth (1/12) of Tenant's Pro
Rata Share of the Real Estate Taxes and Operating Expenses for the calendar year
in question as reasonably estimated by Landlord, with an adjustment to be made
between the parties at a later date as hereinafter provided. If the Commencement
Date is not the first day of a calendar month, Tenant shall pay a prorated
portion of its Pro Rata Share of such Real Estate Taxes and Operating Expenses
for such partial month on the Commencement Date. Furthermore, Landlord may from
time to time but no more than three (3) times during any Lease Year furnish
Tenant with notice of a re-estimation of the amount of Tenant's Pro Rata Share
and Tenant shall commence paying its re-estimated Pro Rata Share on the first
day of the month following receipt of said notice. As soon as practicable
following the end of any calendar year, Landlord shall submit to Tenant a
statement (the "Settlement Statement"). The Settlement Statement shall set out
in reasonable detail the actual amount of Operating Expenses and Real Estate
Taxes incurred for the Building Complex for the calendar year, including a
detailed breakdown of each separate category of Operating Expenses, the amount
thereof, and the major cost components included in each category and reflecting
the amount of any adjustment of any Operating Expenses which vary with occupancy
and how such adjustments were calculated and setting forth the exact amount of
Tenant's Pro Rata Share of the Real Estate Taxes and Operating Expenses for the
calendar year just completed and the difference, if any, between Tenant's actual
Pro Rata Share of the Real Estate Taxes and Operating Expenses for the calendar
year just completed and the estimated amount of Tenant's Pro Rata Share of the
Real Estate Taxes and Operating Expenses (which were paid in accordance with
this subparagraph) for such year. Such Settlement Statement shall also set forth
the amount of the estimated Real Estate Taxes and Operating Expenses
reimbursement for the new calendar year computed in accordance with the
foregoing provisions. To the extent that Tenant's Pro Rata Share of the actual
Real Estate Taxes and Operating Expenses for the period covered by such
Settlement Statement is higher than the estimated payments which Tenant
previously paid during the calendar year just completed, Tenant shall pay to
Landlord the difference within thirty (30) days following receipt of said
Settlement Statement from Landlord. To the extent that Tenant's Pro Rata Share
of the actual Real Estate Taxes and Operating Expenses for the period covered by
the Settlement Statements is less than the estimated payments which Tenant
previously paid during the calendar year just completed, Landlord shall at its
option either refund said amount to Tenant within thirty (30) days or credit the
difference against Tenant's estimated reimbursement for such Real Estate Taxes
and Operating Expenses for the current year. Any excess estimated payments made
by Tenant which have not been refunded or applied as credits to Tenant's Rent
obligations under the Lease, shall, at the end of the term, be promptly refunded
to Tenant. In addition, with respect to the monthly reimbursement, until Tenant
receives such statement, Tenant's monthly reimbursement for the new calendar
year shall continue to be paid at the then current rate,
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but Tenant shall commence payment to Landlord of the monthly installments of
reimbursement on the basis of the statement beginning on the first day of the
month following the month in which Tenant receives such statement.
Tenant's obligation with respect to its Pro Rata Share of the Real
Estate Taxes and Operating Expenses shall survive the expiration or early
termination of this Lease and Landlord shall have the right to retain the
Security Deposit, to the extent there is a Security Deposit, or so much thereof
as it deems necessary, to secure payment of Tenant's Pro Rata Share of the
actual Real Estate Taxes and Operating Expenses for the portion of the final
calendar year of the Lease during which Tenant was obligated to pay such
expenses. If Tenant occupies the Premises for less than a full calendar year
during the first or last calendar years of the term hereof, Tenant's Pro Rata
Share for such partial year shall be calculated by proportionately reducing the
Real Estate Taxes and Operating Expenses to reflect the number of months in such
year during which Tenant occupied the Premises. Tenant shall pay its Pro Rata
Share within fifteen (30) days following receipt of notice thereof.
Tenant shall have the right, but not more than once per annum, at any
time within one (1) year after a Settlement Statement of actual Real Estate
Taxes and Operating Expenses for a particular calendar year has been rendered by
Landlord as provided herein, and delivered to Tenant (the "Review Period") at
Tenant's sole cost and expense, to examine and review Landlord's books and
records during normal business hours and after reasonable notice, at Landlord's
office within the Building Complex or in metropolitan Denver, Colorado relating
to the determination of such Real Estate Taxes and Operating Expenses. Unless
Tenant objects to the statement provided by Landlord within sixty (60) days of
receipt of such statement, the adjustment and statement shall be deemed
conclusive. Notwithstanding anything above, should Tenant exercise the Review
Period for two different calendar years at the same time, Tenant shall be
allowed concurrent review.
In the event of any error in the statement, the amount due the other
shall be paid or credited, if applicable, within thirty (30) days of the
determination of the error. In the event that the error shows an excess payment
by Tenant of three percent (3%) or more of the total actual Operating Expense
liability of Tenant for such year, then Landlord shall pay the reasonable costs
of such review within thirty (30) days of final resolution of any dispute
regarding the error.
4.3 Reimbursement Survives Termination. In the event of the termination
of this Lease by expiration of the stated term or for any other cause or reason
whatsoever prior to the determination of rental adjustment as hereinafter set
forth, Tenant's agreement to reimburse Landlord up to the time of termination
shall survive termination of the Lease and Tenant shall pay any amount due to
Landlord within fifteen (30) days after being billed therefor. In the event of
the termination of this Lease by expiration of the stated term or for any other
cause or reason whatsoever, except default by Tenant of any of the terms or
provisions of this Lease, prior to the determination of rental adjustments as
hereinabove set forth, Landlord's agreement to refund any excess additional
rental paid by Tenant up to the time of termination shall survive termination of
the Lease and Landlord shall pay the amount due to Tenant within fifteen (30)
days of Landlord's determination of such amount or within thirty days after
determination of any adjustment. This covenant shall survive the expiration or
termination of this Lease.
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If the last year of the term of this Lease ends on any day other than
the last day of December, any payment due to Landlord of Tenant's Pro Rata Share
of Real Estate Taxes and Operating Costs shall be prorated on the basis by which
the number of days in such partial year bears to 365.
Any failure of Landlord to furnish Tenant with an estimate of its Pro
Rata Share of Real Estate Taxes and Operating Expenses or any statements as set
forth in this Section 4 shall not act to relieve Tenant of its liability
therefor; and with respect to any deficiencies, Tenant agrees to pay same within
fifteen (30) days of written demand from Landlord.
ARTICLE 5
BUILDING SERVICES
5.1 Standard Services. Landlord agrees to furnish to the Premises
during regular business hours from 7:00 a.m. to 6:00 p.m. Mondays through
Fridays and from 8:00 a.m. to 1:00 p.m. Saturdays, except for Holidays, as the
same are defined in Exhibit E, and subject to the Rules and Regulations of the
Building as set forth in Exhibit E, and subject to the rules and regulations of
the Building, reasonably adopted by the Landlord in accordance with Article 9 of
this Lease, heat and air conditioning for the use and occupancy of the Premises,
passenger elevator service and freight elevator service, subject to scheduling
by Landlord, limited access security system and electrical power consistent with
Exhibit I attached hereto. Landlord shall also furnish: (i) electric current to
be supplied for lighting the Premises and public halls and for the operation of
Ordinary Office Equipment, as defined below; (ii) janitorial and cleaning
services, and (iii) domestic water in reasonable quantity. Elevator service
shall mean service either by non-attended automatic elevators or elevators with
attendants at the option of Landlord. Landlord shall also furnish to the
Premises (at rates reasonably set by Landlord) not in excess of Landlord's
reasonable estimate of the actual costs thereof, heating and air conditioning
(HVAC) during times other than regular business hours and such other items as
are not provided for herein, provided Tenant gives Landlord not less than
twenty-four (24) hours notice of Tenant's needs for such additional heating or
air conditioning. Notwithstanding the above, Landlord shall use reasonably
efforts to furnish the Premises with heating and air conditioning in less than
twenty-four (24) hours notice. Landlord shall also, at said times, maintain and
keep lighted the common stairs, entries, and toilet rooms in the Building that
would reasonably be subject to use by Tenant, its agents and employees during
other than regular business hours. Landlord also has the right to charge Tenant
for energy costs (in amounts not in excess of Landlord's reasonable estimate of
the actual costs thereof) incurred because of Tenant's above Building average
usage at any time or by reason of usage of the Premises or the Building during
other than regular business hours. For purposes hereof, Ordinary Office
Equipment shall include current (or comparable to current) everyday office
equipment, both in size of the equipment and number of units utilized within the
Premises, for office tenants in first class office buildings in Broomfield,
Colorado and shall specifically exclude computers or other equipment that
require special cooling, venting or generators for the operation thereof.
Landlord and Tenant acknowledge that there may be special twenty-four (24) hour
HVAC and electrical power requirements for the customer service area as approved
pursuant to Exhibit C hereof and that checkmeters or submeters may be installed
in conjunction therewith.
5.2 Interruption of Standard Services. Tenant agrees that Landlord
shall not be liable for failure to supply any heating, air conditioning,
elevator, janitorial services, electric current, or any other service described
in Section 5.1 above during any period if Landlord uses reasonable diligence to
restore or to supply such services or electric current, it being further agreed
that Landlord reserves the right to temporarily discontinue such services or any
of them, or electric current at such times
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as may be necessary by reason of accident, unavailability of employees, repairs,
alterations, or improvements, or whenever by reason of strikes, lockouts, riots,
acts of God, legal requirements or any other happening or occurrence beyond the
reasonable control of Landlord. If Landlord is unable to furnish such services
or electric current, Landlord shall not be liable for damages to persons or
property for any such discontinuance, nor shall such discontinuance in any way
be construed as a constructive or actual eviction of Tenant or cause an
abatement of rent or operate to release Tenant from any of Tenant's obligations
hereunder. Landlord's obligation to furnish services or electric current shall
be conditioned upon the availability of adequate energy sources from the public
utility companies presently serving the Building Complex. Landlord shall have
the right to reduce heating, cooling or lighting within the Premises and in the
public area in the Building as required by any mandatory or voluntary fuel or
energy-saving program. Furthermore, due to energy code design requirements as
promulgated from time to time, Tenant hereby acknowledges that it may on certain
days experience discomfort with the heating and air conditioning cycle, and
Landlord shall have no responsibility or liability therefor. Landlord shall use
reasonable efforts to mitigate the interruption of standard services.
Notwithstanding the foregoing, Landlord hereby agrees that if there is
an interruption or discontinuance of the services which Landlord has agreed to
provide that renders the Premises untenantable and such interruption or
discontinuance is within Landlord's reasonable control and continues for a
period of seven (7) or more consecutive days after Landlord receives written
notice thereof from Tenant (each an "Unauthorized Interruption"), Tenant's rent
shall abate provided that Landlord can recover such rent through Landlord's rent
loss/business interruption insurance covering the Building and Landlord has not
corrected or remediated the cause of such Unauthorized Interruption within such
seven (7) day period. Such abatement shall commence at the end of said seven (7)
day period and continue until such time as the Premises are rendered tenantable.
In any case, Tenant's rent shall not abate (or shall partially abate) as
follows: (a) if the Unauthorized Interruption is the result of any willful
misconduct or negligent acts on the part of Tenant, its agents, contractors,
employees, express or implied invitees, or servants, or due to Tenant's default,
rent shall not abate, (b) if Tenant continues to nonetheless use any part of the
Premises for conducting its business, rent shall abate only in proportion to the
part rendered untenantable and not so used, (c) if Landlord's rent loss/business
interruption insurance will only cover a portion of Tenant's rent, the rent
shall abate only as to the portion covered by such insurance, and (d) if
Tenant's assignees, sublessees or other transferees are not entitled to rent
abatement, rent shall not abate.
5.3 Services Paid by Tenant. Unless otherwise provided by Landlord,
Tenant shall separately arrange with the applicable local public authorities or
utilities, as the case may be, for the furnishing of and payment for all
telephone services as may be required by Tenant in the use of the Premises.
Tenant shall directly pay for telephone services, including the establishment
and connection thereof, at the rates charged for such services by said authority
or utility, and the failure of Tenant to obtain or to continue to receive such
services for any reason whatsoever shall not relieve Tenant of any of its
obligations under this Lease. Tenant shall have limited access to the conduits
and risers consistent with what is approved by Landlord pursuant to Exhibit C.
5.4 Above-Standard Service Requirements. If heat-generating machines or
equipment other than Ordinary Office Equipment, including telephone equipment,
cause the temperature in the Premises, or any part thereof, to exceed the
temperatures the Building's air conditioning system would be able to maintain in
such Premises were it not for such heat generating equipment, then
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Landlord reserves the right to install supplementary air conditioning units in
the Premises, and the cost thereof, including the cost of installation and the
cost of operation and maintenance thereof, shall be paid by Tenant to Landlord
upon demand by Landlord.
Tenant shall not, without the written consent of Landlord (which
consent shall not be unreasonably withheld or delayed), use any apparatus or
device which will in any way increase the amount of electricity or water which
Landlord determines to be reasonable for use of the Premises as general office
space, nor connect with electric current (except through existing electrical
outlets in the Premises) or water pipes any apparatus or device for the purposes
of using electric current, other energy or water. Landlord shall have the right
to install one or more separately checkmetered or submetered electrical circuits
to serve all of Tenant's equipment, machinery or appliances which equipment,
machinery or appliances requires electrical current supplied to the Premises as
the same is determined by Landlord which costs of checkmetering or submetering
shall be payable by Tenant to Landlord upon demand. Tenant agrees to reimburse
Landlord for the submetered electrical current utilized by Tenant at the rates
charged to Landlord to purchase electrical current for the Building, such
reimbursement to be made within fifteen (30) days of the date of the billing
therefor; such billing to occur no more frequently than monthly. To the extent
that Tenant pays Landlord directly for the electrical services through
checkmetering or submetering, those expenses will not be included in the
Operating Expenses.
5.5 Cleaning. Tenant shall not provide any janitorial or cleaning
services without Landlord's written consent (which may be given or withheld in
Landlord's sole discretion), and then only subject to supervision of Landlord,
at Tenant's sole responsibility, and by a janitorial or cleaning contractor or
employees at all times satisfactory to Landlord.
5.6 Re-Lamping. Landlord shall have the exclusive right to make any
replacement of Building standard electric light bulbs, fluorescent tubes and
ballasts in the Building Complex throughout the Lease Term and any renewal
thereof. Landlord may adopt a system of relamping and reballasting periodically
on a group basis as may be required in accordance with good management practice.
5.7 Landlord's Obligation. Subject to the provisions of this Lease and
provided Tenant is not in default hereunder beyond any applicable cure period,
Landlord agrees (as an Operating Expense to the extent provided in this Lease)
to keep and maintain the Building Complex and to provide standard services
therefor in a manner and at levels reasonably consistent with first class office
buildings of similar age, size and structure in Broomfield, Colorado.
ARTICLE 6
TENANT REPAIR
6.1 Damage by Tenant. Except as set forth in Article 21, if the
Building Complex, the Building, the Premises or any portion thereof including
but not limited to the elevators, boilers, engines, pipes and other apparatus,
or members of elements of the Building (or any of them) used for the purpose of
climate control of the Building or operating the elevators, or if the water
pipes, drainage pipes, electric lighting or other equipment of the Building or
the roof or outside walls of the Building or parking facilities of Landlord and
also Tenant Improvements (as hereinafter defined) including but not limited to
the carpet, wall covering, doors and woodwork, become damaged or are destroyed
through the negligence, or misuse of Tenant, its servants, agents,
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employees or anyone permitted by Tenant to be in the Building, or through it or
them to the extent that fault is reasonably established, then the cost of the
necessary repairs, replacements or alterations shall be borne by Tenant who
shall pay the same within thirty (30) days of receipt of an invoice for such
costs to Landlord as Additional Rent. Landlord shall have the exclusive right,
but not the obligation, to make any repairs necessitated by such damage.
Notwithstanding the above, to the extent the damages are within the Premises,
Tenant shall have the option to repair the damage first, at its own cost and
expense provided that such damage does not adversely affect the operation of the
Building Systems. Tenant shall make such election within three (3) days of
receipt of written notice from Landlord and Tenant shall thereafter commence and
diligently prosecute same to completion.
6.2 Maintenance. Tenant shall keep the Premises, including all fixtures
and improvements installed by Tenant or at Tenant's request, in good order,
condition and repair and in secure and lawful condition, ordinary wear and tear
excepted. If Tenant fails to keep the Premises in such good order, condition and
repair as required hereunder to the reasonable satisfaction of Landlord, and
Tenant fails to perform any such maintenance or repair within thirty (30) days
after receipt of Landlord's notice thereof, or if such repair or maintenance
cannot be performed within thirty (30) days, if Tenant fails to commence such
maintenance or repair within thirty (30) days after receipt of Landlord's notice
and thereafter diligently pursues such maintenance or repair to completion,
Landlord may restore the Premises to such good order and condition and make such
repairs without liability to Tenant for any loss or damage that may accrue to
Tenant's property or business by reason thereof, and upon completion thereof,
Tenant shall pay to Landlord, as Additional Rent, upon demand, the reasonable
cost of restoring the Premises to such good order and condition and the making
of the repairs. Notwithstanding the foregoing, Tenant shall not make any changes
to the base building or the HVAC. If as a result of any changes in governmental
laws, ordinances, rules or regulations after the date of this lease, the
Premises must be altered to lawfully accommodate the use or occupancy of Tenant,
such alterations shall be made only with Landlord's prior consent not to be
unreasonably withheld or delayed, and shall be made in accordance with Article
15 hereof and the entire cost shall be borne by Tenant. In no event shall the
requirement of Landlord's consent for alterations create any liability of
Landlord to Tenant or any third party arising from or related to such legal
requirements.
6.3 Good Condition. Tenant shall leave the Premises at the end of each
day in a reasonable condition for the purpose of allowing the performance of
Landlord's cleaning services hereinafter described.
6.4 Surrender. At termination of this Lease, upon its expiration or
otherwise, Tenant shall remove from the Premises all personal property and trade
fixtures of Tenant; repair any damage caused by such removal; deliver up the
Premises with all improvements located thereon (except as herein provided) in
good repair and condition, reasonable wear and tear excepted, broom clean and
free of debris; execute and deliver such conveyance as Landlord may reasonably
deem necessary or desirable to evidence the same and any other conveyances
required pursuant to this Lease; and continue to insure all of the same; as
otherwise required pursuant hereto, until this section 6.4 has been complied
with. Tenant shall give written notice to Landlord at least thirty (30) days
prior to vacating and shall arrange to meet with Landlord for a joint inspection
of the Premises. In the event of Tenant's failure to give such notice or arrange
such joint inspection, Landlord's inspection at or
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after Tenant's vacating the Premises shall be conclusively correct for purposes
of determining Tenant's responsibility for repairs and restoration.
6.5 Broken Glass. Tenant shall pay on demand the cost of replacement
with identical quality, size and characteristics of glass broken on the
Premises, including outside windows and doors of the perimeter of the Premises
(including perimeter windows in the exterior walls) during the continuance of
this Lease, unless the glass shall be broken by Landlord, its servants, or
agents acting on its behalf or if the damage to the glass results from
structural or design defects.
ARTICLE 7
ASSIGNMENT AND SUBLETTING
7.1 Limitations. Except as set forth in Section 7.4 below, Tenant shall
not assign or in any manner transfer this Lease or any estate or interest
therein or sublet Premises or any part thereof, or grant any license, concession
or other right to occupy any portion of Premises (each a "Transfer") without the
prior written consent of Landlord as set forth herein. Landlord shall not
unreasonably withhold or delay consent to any Transfer provided Tenant requests
such consent in writing at least sixty (60) days prior to the proposed Transfer
and (i) Tenant is not in default of this Lease beyond any applicable cure
period, (ii) the use of the Premises does not violate the Lease, including the
Rules and Regulations attached hereto as Exhibit E and incorporated herein by
this reference, (iii) the proposed sublessee, assignee, licencee, concessionaire
or occupant ("Transferee") has a good business reputation, (iv) Tenant submits
the most current audited current financials (or such other financial information
as is available) for such Transferee, (v) Tenant submits the applicable form
attached hereto and incorporated herein by this reference ("Exhibit J") for
assignment, sublease, license or other transfer document ("Transfer Document")
for Landlord's prior review and approval, (vi) such Transferee is not a tenant
in the Building or in a building owned by Landlord or an affiliated entity of
Landlord, and (vii) the Transfer does not amend the Lease nor impose any
additional obligation or liability upon Landlord. In no event shall Tenant have
any right to Transfer if there exists any default under this Lease which remains
uncured after any applicable cure period. Consent by Landlord to one or more
Transfers shall not operate as a waiver of Landlord's rights under this section.
Any Transfer without Landlord's consent, where such consent is required
hereunder, shall be deemed void and confer no rights upon a third party.
Notwithstanding any Transfer, Tenant and any guarantor of Tenant's obligations
under this Lease shall at all times remain fully responsible and liable for the
payment of the rental herein specified and for compliance with all other terms
and conditions of this Lease. Without in any way limiting Landlord's right to
refuse to give consent, Landlord reserves the right in the event it does give
consent to impose such conditions upon its consent as Landlord deems reasonably
necessary, including but not limited to payment to Landlord of any and all sums
required to be paid under the terms and conditions of such Transfer Document
including sums in excess of Base Rent and to the requirement of additional
security which in Landlord's reasonable business judgment shall insure the
existing state of Premises and the rentals due under this Lease.
Except as set forth in Section 7.4 below, neither this Lease nor any
interest therein shall be assignable as to the interest of Tenant by operation
of law, without the written consent of Landlord. Except as set forth in Section
7.4 below, a sale by Tenant of all or substantially all of its assets or all or
substantially all of its stock (if Tenant is a publicly traded corporation); a
merger of Tenant with another corporation; or the transfer of twenty five
percent (25%) or more of the stock of Tenant
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if Tenant's stock is not publicly traded; or the transfer of twenty five percent
(25%) or more of the beneficial ownership interest in Tenant if Tenant is a
partnership or a limited liability company without the prior written consent of
Landlord, shall constitute a prohibited assignment hereunder.
7.2 Acceptance of Performance. If this Lease be assigned or if the
Premises or any part thereof be sublet or occupied by anybody other than Tenant,
Landlord may, after default by Tenant of any of its obligations hereunder beyond
any applicable cure period, collect the rent from the assignee, subtenant or
occupant and apply the net amount collected to the rent herein reserved
retaining the remainder, if any, for the account of Landlord, but no such
assignment, subletting, occupancy or collection shall be deemed an acceptance of
the assignee, subtenant or occupant as the tenant hereof, or constitute a
release of Tenant from further performance by Tenant of the covenants on the
part of Tenant herein contained.
7.3 Document Review. All Transfer Documents utilized by Tenant to
evidence any Transfer shall be subject to prior reasonable approval by Landlord
or its attorney. Tenant shall pay on demand all of Landlord's reasonable costs
and expenses, including reasonable attorney's fees, incurred in review and
approval of such Transfer Documents, which fees shall not exceed $1,500.00,
provided the subletting or assignment are on Landlord's applicable form attached
as Exhibit J and have not been modified.
7.4 Affiliated Entities. Provided Tenant is not in default hereunder
beyond any applicable cure period, provided that Tenant cures any default prior
to the actual Transfer, Tenant may effect a Transfer to any Affiliated Entity
(as defined below) without Landlord's prior consent provided Tenant delivers to
Landlord a copy of the executed Transfer Document on a Landlord approved form to
Landlord within ten (10) days of such Transfer, which Transfer shall be subject
to all of the liabilities and obligations set forth herein and Tenant shall not
be released of any of its liabilities hereunder. In no event, however, shall any
such Transfer have any material adverse financial impact on Tenant's financial
status. Tenant shall, prior to such Transfer, provide written evidence
reasonably satisfactory to Landlord that there shall be no material adverse
financial impact on Tenant or Landlord resulting from such Transfer. For
purposes hereof, Affiliated Entity shall mean an entity which (i) controls, is
controlled by, or is in common control with Tenant; or (ii) results from the
merger or consolidation with Tenant or acquires all or substantially all of the
assets or stock of Tenant.
ARTICLE 8
TRANSFER BY LANDLORD AND LIMITED LIABILITY
8.1 Transfer of Landlord's Interest. In the event of a sale,
conveyance, or assignment by Landlord of Landlord's interest in the Building
Complex (other than a transfer for security purposes only), Landlord shall be
relieved from and after the date specified in any such notice of transfer or
assignment of all of Landlord's obligations and liabilities accruing thereafter
on the part of Landlord, and Tenant agrees to look only toward such assignee or
transferee of Landlord's interest for performance of obligations and liabilities
arising after the date of such transfer.
8.2 Limited Liability of Landlord. Anything contained in this Lease to
the contrary notwithstanding, Tenant agrees that Tenant shall look solely to the
estate of Landlord in the Building Complex for the collection of any judgment
(or other judicial process) requiring the payment of
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money by Landlord in the event of any default or breach by Landlord with respect
to any of the terms and provisions of this Lease to be observed or performed by
Landlord, subject, however, to the rights of the holder of any mortgage covering
the Building Complex, and no other assets of Landlord, its partners, agents,
employees, officers, or the employees or officers of any of its partners shall
be subject to levy, execution or other judicial process for the satisfaction of
Tenant's claim and Landlord shall not be liable for any such default or breach
except to the extent of Landlord's estate in the Building Complex.
ARTICLE 9
USE OF PREMISES
9.1 Use. Except as expressly permitted by prior written consent of
Landlord, which may be given or withheld in its sole discretion, the Premises
shall not be used other than for general business office purposes, a customer
service center, (not to exceed 2,000 rentable square feet) and classroom
training space not to exceed training space for thirty (30) people. All use of
the Premises shall comply with the terms of this Lease and all applicable laws,
ordinances, regulations or other governmental ordinances, recorded restrictions,
covenants and easements and association rules and regulations from time to time
in existence, including, without limitation, obtaining any and all necessary
licenses and permits.
9.2 Compliance with Rules and Regulations. Tenant and employees and all
persons visiting or doing business with Tenant in the Premises shall be bound by
and shall observe the Rules and Regulations as set forth in Exhibit E attached
hereto and incorporated herein by this reference which may, at Landlord's
reasonable discretion, be promulgated, amended, or expanded from time to time
during the Lease term by Landlord relating to the Building, the Building Complex
and/or the Premises of which notice in writing shall be given to Tenant and all
such rules and regulations as changed from time to time shall be deemed to be
incorporated into and form a part of this Lease. Tenant shall further be
responsible for the compliance with such rules and regulations by Tenant's
employees, agents, patrons and invitees. Any default in the performance or
observance of such rules and regulations shall be a default hereunder and
Landlord shall have all remedies provided for in this Lease in the event of
default by Tenant, Landlord however, shall not be responsible to Tenant for
nonobservance by any other tenant or person of any tenant or person of any such
rules and regulations. Landlord agrees to enforce the Rules and Regulations
against Tenant in a manner reasonably consistent with its enforcement of such
rules and regulations against other tenants; however, Tenant acknowledges that
certain rules or regulations may be specific to a tenant or use and that such
rules or regulations may not be applicable to all tenants and cannot be enforced
uniformly. For example, a tenant with a banquet area in its premises may have
different rules governing preparation and serving of food.
ARTICLE 10
INSURANCE
10.1 Tenant's Insurance. Tenant shall, during its occupancy of the
Premises and during the entire term hereof, at its sole cost and expense,
obtain, maintain and keep in full force and effect, and with Tenant, Landlord,
the property manager and, to the extent Landlord provides Tenant with written
notice thereof mortgagees of Landlord named as additional insureds therein as
their respective interests may appear, the following types and kinds of
insurance:
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(1) Upon property of every description and kind owned by
Tenant and located in the Building Complex or for which Tenant is legally liable
or installed by or on behalf of Tenant, including, without limitation,
furniture, fittings, installations, alterations, additions, partitions, fixtures
and anything in the nature of a leasehold improvement costing in excess of the
Tenant Improvement Work Allowances set forth in Exhibit C (the "Excess T.I") in
an amount not less than the full replacement cost thereof, with a Minimum
Coverage on the Special Causes of Loss Form including Sprinkler Leakage; and in
the event that there shall be a dispute as to the amount which comprises full
replacement cost, the decision of Landlord or the mortgagees of Landlord shall
be conclusive. In no event shall the deductible for such insurance be more than
$1,000.00.
(2) Bodily Injury Property Damage and Commercial General
Liability insurance including personal liability, contractual liability,
non-owned automotive liability, tenants' legal liability for the full
replacement costs of the Premises, and owners' and contractors' protective
insurance coverage and a cross-liability clause with respect to the Premises and
Tenant's use of any part of the Building Complex and which coverage shall
include the business operations conducted by Tenant and any other persons on the
Premises. Such policies shall be written on a comprehensive basis with limits of
not less than $2,000,000.00 with respect to injuries or death of one or more
persons, and not less than $1,000,000.00 with respect to property damage and not
less than $1,000,000.00 for any one occurrence, together with not less than a
$5,000,000 umbrella policy, and such higher limits for all such insurance as
Landlord or the mortgagees of Landlord may reasonably require. All policies
shall name Landlord, its managers and mortgagee to the extent Landlord provides
Tenant with written notice thereof as additional insureds. All policies shall be
primary and noncontributing over any valid and collectible insurance of any of
the additional insureds.
(3) Any other form or forms of insurance as Landlord or the
mortgagees of Landlord may reasonably require from time to time in form, in
amounts and for insurance risks consistent with then prevalent insurance
industry practices and policies.
(4) Business interruption insurance in such amounts as will
reimburse Tenant for direct or indirect loss of earnings attributable to all
perils commonly insured against by prudent tenants or attributable to prevention
of access to the Premises or to the Building as a result of such perils.
(5) Workers' Compensation Insurance and Employers liability
insurance in amounts as required by law.
(6) If Tenant performs any work on the Premises, prior to the
commencement of any such work, Tenant shall deliver to Landlord certificates
issued by insurance companies qualified to do business in the State of Colorado,
evidencing that workmen's compensation and public liability insurance and
property damage insurance, all with companies in form and in amounts
satisfactory to Landlord, are in force and effect and maintained by all
contractors and subcontractors engaged by Tenant to perform such work and shall
name Landlord, its manager and mortgagee to the extent Landlord provides Tenant
with written notice thereof as additional insureds. Landlord or its mortgagee
may require any other reasonable form or types of insurance of such parties, and
may be added as an additional insured thereunder if so requested. All policies
shall be primary and noncontributory over any valid collectible insurance made
available to any of the additional insureds.
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All policies shall be taken out with insurers acceptable to Landlord
and in form satisfactory from time to time to Landlord. Tenant agrees that
certificates of insurance, or, if required by Landlord or the mortgagees of
Landlord, certified copies of each such insurance policies will be delivered to
Landlord as soon as practicable after the placing of the required insurance, but
in no event later than ten (10) days after Tenant takes possession of all or any
part of the Premises. All policies shall contain an undertaking by the insurers
to notify Landlord and all additional insureds in writing not less than sixty
(60) days prior to any material change, cancellation or sooner termination
thereof.
Tenant covenants and agrees that in the event of damage or destruction
to the leasehold improvements in the Premises covered by insurance as required
to be taken out by Tenant herein, and if Landlord or Tenant do not terminate
this Lease pursuant to Section 21.1 herein, Landlord and Tenant will coordinate
the repair of the Premises and Tenant will use the proceeds of such insurance
for the purpose of repairing or restoring the Excess T.I. to the extent that
such proceeds are reasonably necessary for repair of the leasehold improvements.
In the event that Landlord or Tenant are entitled to terminate the Lease
pursuant to Article 21, then if the Premises have also been damaged, Tenant
shall be entitled to certain proceeds attributable to the Excess T.I.
10.2 Landlord's Insurance. Landlord agrees to carry during the term
hereof insurance for fire, extended coverage, vandalism and malicious mischief,
insuring the Building Complex (excluding foundations, excavations and other
non-insurable items) for the full insurable value thereof. Landlord may, but
shall not be obligated to, take out and carry any other form or forms of
insurance as it or the mortgagees of Landlord may reasonably determine to be
advisable. All costs of such insurance shall be included as Operating Expenses
and notwithstanding any contribution by Tenant to the cost of insurance
premiums, as provided in Article 4, Tenant acknowledges that it has no right to
receive any proceeds from any such insurance policies carried by Landlord, and
that such insurance will be for the sole benefit of Landlord, with no coverage
for Tenant for any risk insured against.
10.3 Subrogation. The parties hereto agree that any and all fire,
extended coverage and/or property damage insurance which is required to be
carried by either shall be endorsed with a subrogation clause, substantially as
follows: "This insurance shall not be invalidated should the insured waive, in
writing prior to a loss, any and all right of recovery against any party for
loss occurring to the property described therein"; and each party hereto waives
all claims for recovery from the other party, its officers, agents or employees
for any loss or damage (whether or not such loss or damage is caused by
negligence of the other party), and notwithstanding any provisions contained in
this Lease to the contrary, as a result of damage to any of its real or personal
property insured under valid and collectible insurance policies to the extent of
the collectible recovery under such insurance or which would have been
collectible had the party carried the insurance required to be maintained
hereunder.
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ARTICLE 11
OBSERVANCE OF LAW
11.1 Law and Covenants. Tenant shall comply with all provisions of any
applicable covenants, rules or restrictions including the architectural control
committee and all provisions of law, including without limitation, federal,
state, county and city laws, ordinances and regulations and any other
governmental, quasi-governmental or municipal regulations, which shall impose
any duty upon Landlord or Tenant, and which relate to Premises, including,
without limitation, the partitioning, equipment operation, alteration, occupancy
and use of the Premises, and to the making of any repairs, replacements,
alterations, additions, changes, substitutions or improvements of or to the
Premises. Moreover, Tenant shall comply with all applicable police, fire and
sanitary regulations imposed by any federal, state, county or municipal
authorities, or made by insurance underwriters, and to observe and obey all
governmental and municipal regulations and other requirements governing the
conduct of any business conducted in the Premises or the use or occupancy
thereof.
11.2 Taxes. Tenant shall fully and timely pay all business and other
taxes, charges, rates, duties, assessments and license fees levied, rates
imposed, charged or assessed against or in respect of Tenant's occupancy of the
Premises or in respect of the personal property, trade fixtures, furniture and
facilities of Tenant or the business or income of Tenant on and from the
Premises, if any, as and when the same shall become due, and to indemnify and
hold Landlord harmless from and against all payment of such taxes, charges,
rates, duties, assessments and license fees and against all loss, costs, charges
and expenses occasioned by or arising from any and all such taxes, rates,
duties, assessments and license fees, excluding income tax, and to promptly
deliver to Landlord for inspection, upon written request of Landlord, evidence
satisfactory to Landlord of any such payments if requested.
ARTICLE 12
WASTE AND NUISANCE; ENVIRONMENTAL
12.1 Waste and Nuisance. Tenant shall not commit, suffer or permit any
waste or damage or disfiguration or injury to the Premises or common areas in
the Building Complex or the fixtures and equipment located therein or thereon,
or permit or suffer any overloading of the floors thereof and shall not place
therein any safe, heavy business machinery, heavy computers, heavy data
processing machines, or other heavy things without first obtaining the consent
in writing of Landlord which consent will not be unreasonably withheld or
delayed and, if requested, Landlord's architect or engineer (at Tenant's
expense), and not use or permit to be used any part of the Premises for any
dangerous, noxious or offensive trade or business, and shall not cause or permit
any nuisance, unreasonable noise or action in, at or on the Premises.
12.2 Environmental Covenant. Tenant shall not cause or permit any
Hazardous Substance (as hereinafter defined), except for normal amounts of the
same which are necessary and normally used for the regular and normal cleaning
of the Premises and the operation of copiers, computers, fax machines, and
similar business machines for office use on the Premises, to be used, stored,
generated, or disposed of on, in or about the Premises, the Building, the
Property or the Building Complex by Tenant, or any of its agents, employees,
representatives, contractors, suppliers, customers, subtenants, concessionaires,
licensees, or invitees unless Tenant shall have received Landlord's prior
written consent, which Landlord may withhold or at any time revoke in its sole
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discretion. Tenant shall indemnify, defend and hold harmless Landlord from and
against any and all claims, damages, fines, judgments, penalties, costs,
expenses, liabilities, or losses relating to any violation by Tenant of any
Environmental Law (as hereinafter defined) or of this Section 12.2 (including,
without limitation, a decrease in value of the Premises, damages caused by loss
or restriction of rentable or usable space, damages caused by adverse impact on
marketing of space, and any and all sums reasonably paid for settlement of
claims, attorneys' fees, consultant fees, and expert fees) incurred by or
asserted against Landlord arising during or after the term of this Lease as a
result thereof. This indemnification includes, without limitation, any and all
reasonable costs incurred because of any investigation of the site or any
cleanup, removal, testing, or restoration mandated or conducted by or on behalf
of any federal, state, or local agency or political subdivision. Without
limitation of the foregoing, if Tenant causes or permits the presence of any
Hazardous Substance on the Premises and that results in any contamination,
Tenant shall promptly, at its sole expense, take any and all necessary or
appropriate actions to return the Premises to the condition existing prior to
the presence of any such Hazardous Substance. Tenant shall first obtain
Landlord's written approval for any such remedial action which shall not be
unreasonably withheld or delayed.
12.3 Hazardous Substances. As used herein, "Hazardous Substance" means
any substance that is regulated by any local government, the State of Colorado,
the United States government, or any agency, authority and/or instrumentality
thereof and includes any and all materials or substances that are defined as
"hazardous waste," "extremely hazardous waste," or a "hazardous substance"
pursuant to any Environmental Law. "Hazardous Substance" includes but is not
restricted to petroleum and petroleum byproducts, asbestos, explosives,
polychlorinated biphenyls ("PCBs") and infectious waste.
12.4 Environmental Laws. As used herein, "Environmental Laws" means all
federal, state and local laws, including statutes, regulations, and
requirements, relating to the discharge of air pollutants, water pollutants or
process waste water or otherwise relating to the environment or Hazardous
Substances, including, but not limited to, the Federal Clean Water Act, the
Federal Resource Conservation and Recovery Act of 1976, the Federal
Comprehensive Environmental Responsibility Cleanup and Liability Act of 1980,
regulations of the Environmental Protection Agency, regulations of the Nuclear
Regulatory Agency, and regulations of any state department of natural resources
or state environmental protection agency, as amended or supplemented from time
to time, now or at any time hereafter in effect.
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ARTICLE 13
ENTRY BY LANDLORD
Landlord and its agents shall have the right to enter the Premises at
all reasonable times for the purpose of examining or inspecting the same, to
supply janitorial services and any other services to be provided by Landlord to
Tenant hereunder, to show the same to prospective purchasers, lenders, tenants
or investors, and to make such alterations, repairs, improvements or additions,
whether structural or otherwise, to the Premises or to the Building as Landlord
may deem necessary or desirable. Landlord may enter the Premises for any of the
foregoing reasons including entry by means of a master key without liability to
Tenant including any claims of interference and without affecting this Lease or
Tenant's obligations under this Lease. Landlord shall use reasonable efforts to
avoid interference with Tenant's business in the Premises. Furthermore, except
for janitorial services or entry due to Landlord's reasonable belief that there
may be an emergency, Landlord shall provide Tenant with prior verbal notice of
proposed entry and Tenant shall have the right (but not the obligation) to have
a representative of Tenant accompany Landlord at all times when Landlord is
exercising its right of entry hereunder.
ARTICLE 14
INDEMNIFICATION
14.1 Indemnification by Tenant. Tenant shall indemnify Landlord and
save it harmless from and against any and all claims, damages, fines, judgments,
penalties, costs, expenses, liability or losses (including loss of rentals
payable by Tenant or other tenants in the event of loss either directly or
indirectly caused by any negligent act or omission, willful misconduct or breach
of the Lease of or by Tenant, its agents, contractors, employees, servants,
licensees, or concessionaires or invitees or by anyone permitted to be on the
Premises by Tenant), claims, actions, damages, liability and expenses arising
out of or in connection with the use and/or occupancy of the Premises,
including, without limitation, from any occurrence in, upon or at the Premises
or any part thereof, occasioned wholly or in part by any negligent act or
omission, willful misconduct of Tenant or breach of the Lease of or by Tenant,
its agents, contractors, employees, servants, licensees, or concessionaires or
invitees or by anyone permitted to be on the Premises by Tenant. In the event
Landlord shall be made a party to any litigation commenced by or against Tenant
or by anyone permitted to be on the Premises by Tenant, its agents, contractors,
employees, servants, licensees, concessionaires or invitees, then Tenant shall
protect and hold Landlord harmless and shall pay all costs, expenses and
reasonable attorney's fees incurred or paid by Landlord in connection with such
litigation whether or not such action is contested or prosecuted to judgement.
All personal property on the Premises shall be at Tenant's sole risk, and
Landlord shall not be liable for any damage done to or loss of such personal
property or for damage or loss suffered by Tenant.
14.2 Indemnification by Landlord. Landlord agrees to indemnify, defend
and hold Tenant harmless from and against any and all claims, damages, fines,
judgments, penalties, costs, expenses, liabilities or losses arising from any
governmental entity seeking to enforce against Tenant or seeking damages from
Tenant, or seeking to join Tenant in any legal action pertaining to the
violation by Landlord of any Environmental Law(s). The indemnity shall not be
binding upon any Mortgagee and Tenant shall look solely to the respective
landlord when such landlord is finally held to have
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violated the Environmental Law. Neither the predecessor in interest nor the
successor in interest to such landlord shall be liable to Tenant for this
indemnity.
ARTICLE 15
ALTERATIONS
15.1 Alterations by Tenant. Tenant shall not make, install or erect in
or to the Premises any installations, alterations, modifications, additions or
partitions without submitting the drawings and specifications to Landlord and
obtaining Landlord's prior written consent in each instance, which consent will
not be unreasonably withheld or delayed (in no event shall Tenant be permitted
to make any alterations to any portion of the Building or Building Complex other
than within the Premises as shown in the Construction Drawings approved pursuant
to the Work Letter). Furthermore, Tenant shall obtain Landlord's prior written
consent, which consent shall not be unreasonably withheld or delayed, to any
change or changes in such drawings or specifications submitted as aforesaid.
Tenant, upon prior notice to Landlord and compliance with all other provisions
hereof, may make alterations of a "cosmetic nature" without being subject to
Landlord's prior approval, however, Landlord can request, by notice to Tenant
within thirty (30) days of Tenant's notice to Landlord of Tenant's intent to
install such cosmetic alterations (as hereinafter defined), such alterations be
removed upon termination or earlier expiration of the Lease and the Premises
returned, at Tenant's expense, to their condition prior to the alteration,
subject to ordinary wear and tear. For purposes hereof, "cosmetic alterations"
shall be alterations of an aesthetic nature which do not require a building
permit and do not affect the structure of the Building or any of its systems
including HVAC, electrical or plumbing. Tenant shall pay the reasonable cost to
Landlord of having its architects, engineers, or other consultants review such
plans and changes thereto prior to proceeding with any work based on such
drawings or specifications. All such work shall be performed in a good and
workmanlike manner, free and clear of all mechanic's liens, and in compliance
with the provisions of Article 11 hereof, and once commenced shall be diligently
pursued through completion, and Landlord shall have no liability for the
performance of such work, notwithstanding its consent to any plans and
specifications. PROVIDED NEVERTHELESS that Landlord may, at its option, at
Tenant's expense, require that Landlord's contractors be engaged for any
mechanical or electrical work or other leasehold improvement. Without limiting
the generality of the foregoing, any work performed by or for Tenant shall be
performed by competent workmen whose labor union affiliations are not
incompatible with those of any workmen who may be employed in the Building
Complex by Landlord, its contractors or subcontractors. In addition to the above
all contractors and subcontractors must meet Landlord's specifications, as
reasonably determined by Landlord, for minimum requirements for insurance,
bonds, quality of work, experience and such other reasonably applicable factors.
Tenant shall submit to Landlord's reasonable supervision over construction,
shall provide Landlord upon request with reasonable financial assurances prior
to the commencement of alterations, and promptly pay to Landlord's or Tenant's
subcontractors, as the case may be, when due, the costs of all such work and of
all materials, labor and services involved therein and of all decoration and all
changes in the Building, its equipment or services necessitated thereby. Tenant
covenants that Tenant will not suffer or permit during the Term hereof any
mechanics' or other liens for work, labor, services or materials ordered by
Tenant or for the cost of which Tenant may be in any way obligated, to attach to
the Premises or to the Building Complex and that whenever and so often as any
such liens shall attach or claims therefor shall be filed, Tenant shall, within
twenty (20) days after Tenant has notice of the claim for lien, procure the
discharge thereof by payment or by giving security or in such other manner as is
or may be required or permitted by law or which shall
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otherwise satisfy Landlord and or Landlord's mortgagee. Tenant hereby
indemnifies and saves Landlord harmless from and against any and all loss,
liability, damage, penalty, cost, expense or fee (including, without limitation,
court costs and reasonable attorneys' fees) incurred by or asserted against
Landlord as a result of the existence of any lien against the Building, Premises
or the Property as a result of any work done on behalf of Tenant or parties
claiming by or through Tenant. Tenant shall, at its own cost and expense, take
out or cause to be taken out any additional insurance or bonds reasonably
required by Landlord to protect Landlord's, the mortgagee's and Tenant's
interest during the period of alteration.
At least five (5) days prior to the commencement of any work permitted
to be done by persons requested by Tenant on the Premises, Tenant shall notify
Landlord of the proposed work and the names and addresses of the persons
supplying labor and materials for the proposed work so that Landlord may avail
itself of the provisions of statutes such as Section 38-22-105(2) of the
Colorado Revised Statutes (1973). During any such work on the Premises,
Landlord, or its representatives, shall have the right to go upon and inspect
the Premises at all reasonable times in accordance with Section 13.1, and shall
have the right to post and keep posted thereon notices such as those provided
for by Section 38-22-105(2) C.R.S. (1973) or to take any further action which
Landlord may deem to be proper for the protection of Landlord's interest in the
Premises.
15.2 Alterations by Landlord. Landlord hereby reserves the right at any
time and from time to time and without any liability to Tenant for any claims,
to make changes in, additions to, subtractions from or rearrangements of the
Building Complex, including, without limitation, all improvements at any time
thereof, all entrances and exits thereto, and to grant, modify and terminate
easements or other agreements pertaining to the Building Complex, including, but
not limited to, the entrance foyer and lobby, and the common corridors and to
make changes or additions to the pipes, conduits, ducts, utilities and other
building services in the Premises which serve other portions of the Building,
provided further that prior to the Commencement Date, Landlord may alter the
Premises to the extent found necessary by Landlord to accommodate changes in
construction design or facilities including major alterations but the Premises,
as altered, shall be in all material aspects comparable to the Premises as
defined herein. Any expense by Landlord of the above rights including entry upon
the Premises shall be without liability to Tenant, including any claims of
interference and without affecting this Lease or the obligations of Tenant under
this Lease. Landlord shall use commercially reasonable efforts to avoid
interference with Tenant's business in the Premises.
ARTICLE 16
SIGNS AND ADVERTISING
Except as set forth below, Tenant shall not install, paint, display,
inscribe, place or affix any sign, picture, advertisements, notice, lettering or
direction on any part of the Building Complex or in the interior of the Premises
or other portion of the Building any of which would be visible from outside the
Premises. Landlord will prescribe a uniform pattern of identification signs for
tenants to be placed on the outside corridor wall which is near the door leading
into the Premises and other than such identification signs, Tenant shall not
install, paint, display, inscribe, place or affix, or otherwise attach, any
sign, picture, advertisement, notice, lettering or direction on the inside or
outside of the Premises for exterior view without the written consent of
Landlord which may be given or withheld in Landlord's sole discretion.
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ARTICLE 17
SUBORDINATION TO MORTGAGES AND DEEDS OF TRUST
This Lease and the rights of Tenant hereunder shall be and are hereby
made subject and subordinate to the lien of any mortgages or deeds of trust now
or hereafter existing against the Building Complex and to all renewals,
modifications, consolidations, replacements and extensions thereof and to all
advances made, or hereafter to be made, upon the security thereof; provided
however, Tenant's quiet enjoyment of the Premises shall not be disturbed and
this Lease shall remain in full force and effect so long as Tenant is not in
default hereunder after expiration of applicable notice and cure periods.
Although such subordination shall be self-operating, Tenant, or its successors
in interest, shall upon Landlord's request, execute and deliver within fifteen
(15) business days any and all instruments desired by Landlord, subordinating,
in the manner reasonably requested by Landlord, this Lease to any such mortgage
or deed of trust in accordance with the provisions hereof so long as each
instrument acknowledges Tenant's right to possession provided Tenant is not in
default. If Tenant fails to return the subordination documents within fifteen
(15) business days then all subordination documents at Landlord's option shall
irrevocably and conclusively be deemed affirmed and approved by Tenant and
Landlord may exercise any other right or remedy for Tenant's failure to execute
and return the subordination documents.
Should any mortgage or deed of trust affecting the Building Complex be
foreclosed, then:
(1) the liability of the mortgagee, beneficiary or purchaser
at such foreclosure sale or transfer in lieu of foreclosure shall exist only as
to the liability and obligations of Landlord accruing or arising after the date
of such transfer and only so long as such mortgagee, beneficiary or purchaser is
the owner of the Building Complex and such liability shall not continue or
survive after further transfer of ownership; and
(2) the liability for any security deposits or prepaid rents
of the mortgagee, beneficiary or purchaser at such foreclosure sale or transfer
in lieu of foreclosure sale shall exist only to the extent that the mortgagee,
beneficiary or purchaser actually received the security deposits or prepaid
rents and failed to apply such sums in accordance with the Lease or, if
applicable, failed to transfer or assign such sums to any subsequent purchaser
or transferee.
(3) Tenant shall be deemed to have attorned, as Tenant under
this Lease, to the purchaser at any foreclosure sale thereunder or transferee
pursuant to a deed in lieu of foreclosure, and this Lease shall continue in full
force and effect as a direct lease between and binding upon Tenant and such
purchaser or transferee.
As used in this Article 17 "mortgagee" and "beneficiary" shall include
successors and assigns of any such party, whether immediate or remote, the
purchaser of any mortgage or deed of trust, whether at foreclosure or otherwise,
and the successors, assigns and mortgagees and beneficiaries of such purchaser,
whether immediate or remote.
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ARTICLE 18
ESTOPPEL CERTIFICATE/FINANCIAL INFORMATION
18.1 Estoppel Certificate. Tenant agrees that it will from time to
time, upon request by Landlord (for the benefit of Landlord and its designated
proposed mortgagee or purchaser), execute and deliver to Landlord within fifteen
(15) days after demand therefor an estoppel certificate on Landlord's form (or
the form of any prospective mortgagee or purchaser) certifying, among other
items, 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 so
modified) and, to the best of Tenant's knowledge, there are no defaults under
the Lease or if so specifying such defaults. Failure to return the estoppel
certificate within the fifteen (15) day period shall conclusively and
irrevocably be deemed an affirmation and approval of the estoppel certificate by
Tenant and Landlord may exercise any other right or remedy for Tenant's failure
to properly and/or timely execute and return the estoppel certificate. Landlord
agrees to provide Tenant, within fifteen (15) days after demand (but not more
than once during any Lease Year) an estoppel certificate 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 so modified and to
the best of Landlord's knowledge, there are no defaults under the Lease or is so
specifying such defaults.
18.2 Financial Information. To the extent Tenant is not a public
company, Tenant shall, from time to time at reasonable intervals upon Landlord's
request, deliver to Landlord a copy of Tenant's most recent audited financial
statements, which audited financial statements shall be prepared by Tenant or
Tenant's accountant no less often than once per year in accordance with GAAP,
any interim financial statements which have been prepared after the date of the
most current audited financial statement, and 10Q's or 10K's when issued, if
any.
ARTICLE 19
QUIET ENJOYMENT
Subject to the terms and provisions of this Lease, Landlord covenants
and agrees that Tenant shall peaceably and quietly have possession of the
Premises during the term hereof, without hindrance by Landlord or those claiming
by or through Landlord. Landlord shall not be liable for any interference by
other tenants or third parties nor shall this Lease or Tenant's obligations
hereunder be affected thereby other than as specifically set forth herein.
ARTICLE 20
FIXTURES
Any or all installations, alterations, additions, partitions and
fixtures other than Tenant's trade fixtures in or upon the Premises, whether
placed there by Tenant or Landlord, shall become the property of Landlord,
without compensation therefor to Tenant, upon expiration or earlier termination
of the Lease. Notwithstanding anything herein contained, Landlord shall be under
no obligation to repair, maintain or insure such installations, alterations,
additions, partitions and fixtures or anything in the nature of a leasehold
improvement made or installed by or on behalf of Tenant. Landlord may elect that
any or all installations made or installed by or on behalf of Tenant be removed
at the end of the Lease Term and, if Landlord so elects, it shall be Tenant's
obligation to restore the Premises to the condition it was in previous to such
alterations, installations, partitions
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and fixtures, on or before the termination of this Lease. Such removal and
restoration shall be at the sole expense of Tenant. Notwithstanding anything in
this Lease to the contrary, to the extent that Landlord's consent to any such
installation as set forth above is required, Landlord, if it gives such consent,
will, if requested in writing by Tenant, notify Tenant as to whether removal of
such installation will be required. Notwithstanding anything in this Lease to
the contrary, to the extent that Landlord's consent to any such installation as
set forth above is required, Landlord, if it gives such consent, will, if
requested in writing by Tenant, notify Tenant as to whether removal of such
installation will be required.
ARTICLE 21
DAMAGE OR DESTRUCTION
21.1 Casualty. In the event that the Building should be
totally destroyed by fire, tornado or other casualty, or should be so damaged
that rebuilding or repairs cannot be completed in Landlord's reasonable
estimation within one hundred eighty (180) days after the date of such damage,
Landlord may, at its option, terminate this Lease in which event the rent shall
be abated during the unexpired portion of this Lease effective with the date of
such damage, or Landlord may proceed to rebuild the Building and the Premises.
Tenant may terminate this Lease upon thirty (30) days prior written notice to
Landlord if (i) it would take more than one hundred and eighty (180) days to
repair (as determined by Landlord) (ii) at least fifty percent (50%) of the
Premises, have been rendered untenantable (iii) neither Tenant nor its employees
caused the casualty and (iv) there are fewer than thirty-six (36) months
remaining in the applicable Lease Term as of the date of the casualty. In the
event the Building should be damaged by fire, tornado or other casualty, but
only to such extent that rebuilding or repairs in Landlord's reasonable
estimation can be completed within one hundred eighty (180) days after the date
of such damage, or if the damage cannot be repaired within such time frame but
Landlord does not elect to terminate this Lease, in either such event, Landlord
shall, within ninety (90) days after the date of such damage commence to rebuild
or repair the Building and shall proceed with reasonable diligence to restore
the Building to substantially the same condition in which it was immediately
prior to the happening of the casualty, except that Landlord shall not be
required to rebuild, repair or replace any part of the partitions, fixtures and
other improvements which may have been placed by Tenant or other tenants within
the Building. In the event any mortgagee under a deed of trust, security
agreement or mortgage on the Building should require that the insurance proceeds
be used to retire the mortgage debt, Landlord shall have no obligation to
rebuild and if Landlord so elects, this Lease shall terminate upon notice to
Tenant. Unless otherwise provided in this Lease, any insurance which may be
carried by Landlord or Tenant against loss or damage to the Building or to the
Premises shall be for the sole benefit of the party carrying such insurance and
under its sole control. If (i) the Premises are damaged or otherwise rendered
untenantable, (ii) this Lease is not terminated, and (iii) the casualty was not
caused by Tenant, its agents or employees then Rent shall equitably abate based
upon the portion of the Premises rendered untenantable from the date of the
casualty until restored.
21.2 Casualty Caused by Tenant. Subject to the waiver of subrogation
clause in Section 10.3 of this Lease, if fire or other casualty causing injury
to the Premises or other parts of the Building shall have been caused by the
negligence or willful misconduct of Tenant, its agents, servants or employees,
or by any other persons entering the Building under express or implied
invitation of Tenant, such injury may be repaired by Landlord at the expense of
Tenant.
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ARTICLE 22
CONDEMNATION
22.1 Eminent Domain. If five percent (5%) or more of the Rentable Area
of the Premises is taken by eminent domain, or by conveyance in lieu thereof,
and if such taking interferes substantially with Tenant's use of the Premises,
then this Lease, at the option of either party evidenced by notice to the other
given within thirty (30) days from such taking or conveyance, shall forthwith
cease and terminate entirely. In the event of such termination of this Lease,
then rental shall be due and payable to the actual date of such termination. If
less than five percent (5%) of the Rentable Area of the Premises is taken, or if
five percent (5%) or more of the Premises is taken and neither party terminates
this Lease, this Lease shall cease and terminate as to that portion of the
Premises so taken as of the date of such taking, and the rental thereafter
payable under this Lease shall be abated pro rata from the date of such taking
in an amount by which that portion of the Rentable Area of the Premises so taken
shall bear to the Rentable Area of the Premises prior to such taking. If any
part of the Building Complex shall be taken by eminent domain, or by conveyance
in lieu thereof, and if such taking substantially interferes with Landlord's
ownership or use of the Building Complex in Landlord's reasonable determination,
Landlord, at its option, may upon thirty (30) days' notice to Tenant, terminate
this Lease as of the date of such taking.
22.2 Damages. All compensation awarded for any taking (or the proceeds
of private sale in lieu thereof) of the Premises or Building Complex shall be
the property of Landlord and Tenant hereby assigns its interest in any such
award to Landlord; provided, however, Landlord shall have no interest in any
award made to Tenant for the taking of Tenant's fixtures and other personal
property or moving expenses if a separate award for such items is made to
Tenant.
22.3 Restoration. If both Landlord and Tenant elect not to terminate
this Lease, Tenant shall remain in that portion of the Premises which shall not
have been appropriated or taken as herein provided, and Landlord agrees, at
Landlord's sole cost and expense (to the extent of condemnation proceeds to the
extent received), to, as soon as reasonably possible, restore the remaining
portion of the Premises to a complete unit of like quality and character as
existed prior to such appropriation or taking. If this Lease is not terminated
in accordance herewith and the condemnation has caused the Premises to be
untenantable, then Rent shall equitably be abated during such restoration.
ARTICLE 23
LOSS AND DAMAGE AND DELAY
23.1 Loss and Damage. Landlord shall not be liable or responsible in
any way for:
any death or injury arising from or out of any occurrence in, upon or at the
Building Complex or for damage to property of Tenant or others located on the
Premises, nor shall it be responsible in any event for damage to any property of
Tenant or others from any cause whatsoever, unless such damage, loss, injury or
death results from the intentional misconduct or gross or sole negligence of
Landlord, its agents or employees. Without limiting the generality of the
foregoing, Landlord shall not be liable for any injury or damage to persons or
property resulting from fire, explosion, falling plaster, steam, gas,
electricity, water, rain, snow or leaks from any part of the Premises or from
the pipes, appliances, plumbing works, roof, street, or subsurface of any floor
or ceiling or from any other place or because of dampness or climatic conditions
from any other cause of whatsoever kind.
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Landlord shall not be liable for any damage whatsoever caused by any other
tenant or persons in or about the Building Complex, or by an occupant of
adjacent property thereto, or the public, or construction of any private, public
or quasi-public work. Other than as set forth above, all property of Tenant kept
or stored on the Premises shall be kept or stored at the risk of Tenant only and
Tenant shall indemnify Landlord in the event of any claims arising out of
damages to the same, including any subrogation claim by Tenant's insurers;
(1) any act or omission (including theft, malfeasance or
negligence) on the part of any agent, contractor or person from time to time
employed by Landlord to perform janitorial services or security services, or
repairs or maintenance services, in or about the Premises or the Building; or
(2) loss or damage, however caused, to money, securities,
negotiable instruments, papers or other valuables of Tenant.
23.2 Delays. Whenever and to the extent that Landlord or Tenant shall
be unable to fulfill, or shall be delayed or restricted in the fulfillment of
any obligation hereunder in respect to the supply of or provision for, any
service or utility or the doing of any work or the making of any repairs by
reason of being unable to obtain the material, goods, equipment, service,
utility or labor required to enable it to fulfill such obligation or by reason
of any statute, law or any regulation or order passed or made pursuant thereto
or by reason of the order or direction of any administrator, controller or
board, or any governmental department or officer or other authority, or by
reason of not being able to obtain any permission or authority required thereby,
or by reason of any other cause beyond Landlord's or Tenant's reasonable
control, whether of the foregoing character or not, Landlord or Tenant, as the
case may be, shall be entitled to extend the time for fulfillment of such
obligation by a time equal to the duration of such delay or restriction, and
Tenant shall not be entitled to compensation for any inconvenience, nuisance or
discomfort thereby occasioned nor shall its obligations under this Lease be
affected thereby; provided that Landlord shall use reasonable efforts in good
faith to minimize any delays or restrictions.
ARTICLE 24
DEFAULT AND REMEDIES
24.1 Default by Tenant. The following events shall be deemed to be
events of default by Tenant under this Lease:
(1) Tenant shall fail to pay any installment of rent or any
other sum due to Landlord when due. Notwithstanding the above, Tenant shall not
be deemed in default if not more than twice during any calendar year it pays
such installment of rent or any other sum due Landlord within five (5) days of
receipt of written notice of nonpayment. After delivery of the two notices as
set forth above, Landlord shall give no other notices of nonpayment.
(2) Tenant shall fail to comply with any term, provision or
covenant of this Lease, other than payment of rent or other sums due to
Landlord, and shall not cure such failure within thirty (30) days after written
notice thereof to Tenant, provided, however that if such default cannot
reasonably be cured within such thirty (30) day period, Tenant shall not be
deemed in default if it
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has commenced to cure, is diligently prosecuting same to completion, and
provides Landlord with reasonably satisfactory evidence of same.
(3) Tenant shall die, cease to exist as a corporation or
partnership or be otherwise dissolved or liquidated or become insolvent, or
shall make a transfer in fraud of creditors, or shall make an assignment for the
benefit of creditors or is otherwise unable to pay its debts as they come due.
(4) Tenant shall file a petition under any section or chapter
of the national bankruptcy act as amended or under any similar law or statute of
the United States or any state thereof, or have a petition filed or a request
for a receiver; or Tenant shall be adjudged bankrupt or insolvent in proceedings
filed against Tenant which proceeding is not dismissed within ninety (90) days
after the filing thereof.
(5) A receiver or trustee shall be appointed for all of the
Premises or for all or substantially all of the assets of Tenant.
(6) Except as set forth in Section 33.3, Tenant shall abandon
or vacate any portion of the Premises, in whole or in part.
(7) Tenant assigns or sublets in violation of the provisions
of this Lease.
(8) Tenant fails to deliver the instruments pursuant to
Articles 17 and 18 hereof, time being of the essence.
24.2 Remedies of Landlord. Upon the occurrence of any such events of
default, Landlord shall have the option to pursue any one or more of the
following remedies without any notice or demand whatsoever:
(1) Terminate this Lease, in which event Tenant shall
immediately surrender the Premises to Landlord, and if Tenant fails to do so,
Landlord may, without prejudice to any other remedy which it may have for
possession or arrearages in rent, enter upon and take possession of the Premises
and expel or remove Tenant and any other person who may be occupying such
Premises or any part thereof, by force if necessary to the extent permitted by
law, without being liable for prosecution of any claim of damages therefor.
(2) Without terminating the Lease, enter upon and take
possession of the Premises and expel or remove Tenant and any other person who
may be occupying such Premises or any part thereof, by force if necessary to the
extent permitted by law, without being liable for prosecution or any claim for
damages therefor, and relet the Premises and receive the rent therefor.
(3) Enter upon the Premises, by force if necessary to the
extent permitted by law, without being liable for prosecution or any claim for
damages therefor, and do whatever Tenant is obligated to do under the terms of
this Lease; and Tenant agrees to reimburse Landlord on demand for any expenses
which Landlord may incur in thus effecting compliance with Tenant's obligations
under this Lease, and Tenant further agrees that Landlord shall not be liable
for any damages resulting to Tenant from such action, whether caused by the
negligence of Landlord or otherwise.
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(4) Alter all locks and other security devices at the Premises
without terminating this Lease.
Exercise by Landlord of any one or more of the remedies hereunder
granted or otherwise available shall not be deemed to be an acceptance of
surrender of the Premises by Tenant, whether by agreement or by operation of
law, it being understood that such surrender can be effected only by the written
agreement of Landlord and Tenant. No such alteration of locks or other security
devices and no removal or other exercise of dominion by Landlord over the
property of Tenant or others at the Premises shall be deemed unauthorized or
constitute a conversion, Tenant hereby consenting, after any event of default,
to the aforesaid exercise of dominion over Tenant's property within the
Premises. All claims for damages by reason of such reentry and/or repossession
and/or alteration of locks or other security devices are hereby waived, as all
claims for damages by reason of any distress warrant, forcible detainer
proceedings, sequestration proceedings or other legal process, to the extent
permitted by law. Tenant agrees that any reentry by Landlord may be pursuant to
judgment obtained in forcible detainer proceedings or other legal proceedings or
without the necessity for any legal proceedings, as Landlord may elect, and
Landlord shall not be liable in trespass or otherwise.
In the event Landlord elects to terminate the Lease by reason of an
event of default then notwithstanding such termination, Tenant shall be liable
for and shall pay to Landlord, at the address specified for notice to Landlord
herein, the sum of all rental and other indebtedness accrued to date of such
termination, plus, as damages, an amount equal to the total rental hereunder for
the remaining portion of the Lease term (had such term not been terminated by
Landlord prior to the date of expiration as stated herein) less the reasonable
rental value for such remaining term (net of all reasonably estimated costs of
re-leasing for such remaining term).
In the event that Landlord elects to repossess the Premises without
terminating the Lease, then Tenant shall be liable for and shall pay to Landlord
at the address specified for notice to Landlord herein, all rental and other
indebtedness accrued to the date of such repossession, plus rent required to
paid by Tenant to Landlord during the remainder of the Lease term until the date
of expiration of the term as stated herein diminished by any net sums thereafter
received by Landlord through reletting the Premises during such period (after
deducting reasonable expenses incurred by Landlord as provided below). In no
event shall Tenant be entitled to any excess of any rental obtained by reletting
over and above the rental herein reserved. Actions to collect amounts due by
Tenant to Landlord under this subparagraph may be brought from time to time, on
one or more occasions, without the necessity of Landlord's waiting until
expiration of the Lease term.
In the event of any default or breach by Tenant, or (including a
threatened or anticipatory breach or default prior to the Fourth Suite
Commencement Date), Tenant shall also be liable and shall pay to Landlord, in
addition to any sums provided to be paid above, reasonable broker's fees
incurred by Landlord in connection with reletting the whole or any part of the
Premises; the reasonable costs of removing and storing Tenant's or other
occupants' property; the costs of repairing, altering, remodeling, or otherwise
putting the Premises into condition acceptable to a new tenant or tenants; and
all reasonable expenses incurred by Landlord in enforcing or defending
Landlord's rights and/or remedies, including reasonable attorney's fees whether
suit was actually filed or not.
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In the event of termination or repossession of the Premises for an
event of default, Landlord shall not have any obligation to relet or attempt to
relet the Premises or any portion thereof, or to collect rental after reletting;
and in the event of reletting, Landlord may relet the whole or any portion of
the Premises, or let the Premises as part of a larger premises, for any period
to any tenant and for any use or purpose.
If Tenant shall fail to make any payment or cure any default hereunder
within the time herein permitted, Landlord, without being under any obligation
to do so and without thereby waiving such default, may make such payment and/or
remedy such other default for the account of Tenant (and enter the Premises for
such purpose), and thereupon Tenant shall be obligated to, and hereby agrees to
pay Landlord upon demand all costs, expenses and disbursements, including
reasonable attorney's fees incurred by Landlord in taking such remedial action.
Landlord is entitled to accept, receive in cash or deposit any payment
made by Tenant for any reason or purpose or in any amount whatsoever, and apply
the same at Landlord's option to any obligation of Tenant and the same shall not
constitute payment of any amount owed except that to which Landlord has applied
the same. No endorsement or statement on any check or letter of Tenant shall be
deemed an accord and satisfaction or recognized for any purpose whatsoever. The
acceptance of any such check or payment shall be without prejudice to Landlord's
rights to recover any and all amounts owed by Tenant hereunder and shall not be
deemed to cure any other default nor prejudice Landlord's rights to pursue any
other available remedy.
Landlord agrees to use reasonable efforts to mitigate its damages
however in no event shall Landlord be required to (i) lease space for less than
market rates applicable for comparable space in first-class buildings in
Broomfield, Colorado, (ii) expend any sums or (iii) lease the Premises prior to
any other available space in the Building or any building owned by Landlord or
an affiliated entity of Landlord.
24.3 Landlord's Default. Landlord shall not be deemed in default
hereunder unless Tenant shall have given Landlord written notice of such default
specifying such default with particularity and Landlord shall thereupon have
thirty (30) days in which to cure any default unless such default cannot
reasonably be cured within such period wherein Landlord shall not be in default
if it commences to cure the default within the thirty (30) day period and
diligently pursues completion of same. In the event of any default, Tenant
agrees that its exclusive remedy shall be an action for damages. Tenant agrees
that it shall also give notice of default to any mortgagee (of which Tenant has
been notified in writing) and right to cure if Landlord fails to cure within any
applicable cure period, and if such mortgagee commences to cure (which shall
include for purposes hereof pursuing its remedies against Landlord) then
Landlord shall not be deemed in default hereof.
24.4 Personal Property Lien. Intentionally Deleted
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ARTICLE 25
HOLDING OVER
If Tenant shall continue to occupy the Premises after the expiration of
this Lease with or without the consent of Landlord, and without any further
written agreement, Tenant shall be a tenant at Landlord's option from month to
month or from day to day at a monthly Base Rent equal to two hundred percent
(150%) of the last full monthly Base Rent payment due hereunder pro rata for any
partial month, and subject to all of the additional rentals, terms and
conditions herein set out except as to expiration of the Lease Term. Such
holding over may be terminated by Landlord upon ten (10) days notice. In the
event that Tenant fails to surrender the Premises upon termination or expiration
of this Lease or such holdover tenancy, then Tenant shall indemnify Landlord
against loss or liability resulting from any delay of Tenant in not surrendering
the Premises, including, but not limited to, any amounts required to be paid to
third parties who were to have occupied the Premises and any attorney's fees
related thereto.
ARTICLE 26
NOTICE
26.1 Notice. Any notice, request, statement or other writing pursuant
to this Lease shall be deemed to have been given if sent by registered,
certified mail or recognized receipted overnight mail service, postage prepaid,
return receipt requested or delivered by hand to the party at the addresses set
forth below:
TENANT: McData Corporation
310 Interlocken Parkway
Broomfield, CO 80021
Attention: Dave Weishaar, VP Manufacturing
Phone: 303-460-9200
Fax: 303-465-4996
With copy to: McData Corporation
310 Interlocken Parkway
Broomfield, CO 80021
Attention: Tom McGimpsey, VP and General Counsel
Phone: 303-460-9200
Fax: 303-465-4996
LANDLORD: AMBER DRIVE I, L.L.C.
c/o Prime West Real Estate Development, Inc.
6025 S. Quebec Street, Suite 110
Englewood, Colorado 80111
Attention: Stephen F. Clarke
With copy to: BROWNSTEIN HYATT & FARBER, P.C.
410 17th Street, 22nd Floor
Denver, Colorado 80202
Attention: Laura Jean Christman, Esq.
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and such notice shall be deemed to have been received by Landlord or Tenant, as
the case may be, on the earlier of actual receipt or the second business day
after the date on which it shall have been so mailed.
26.2 Change of Address. Any party may, by notice to the other, from
time to time, designate another address, which notices mailed more than ten (10)
days thereafter shall be addressed.
ARTICLE 27
SECURITY DEPOSIT
Tenant has deposited with Landlord the sum of Zero and 00/100 Dollars
($00.00) as security for the performance by Tenant of all of the terms,
covenants, and conditions required to be performed by it hereunder. Such sum
shall be returned to Tenant after a reasonable period after the expiration of
the Lease Term and delivery of possession of the Premises to Landlord if, at
such time, Tenant has fully performed all such terms, covenants and conditions.
Prior to the time when Tenant is entitled to the return of the security deposit,
Landlord shall be entitled to intermingle such deposit with its own funds and to
use same for such purposes as Landlord may determine. Tenant shall not be
entitled to any interest on the security deposit. In the event of default by
Tenant in performing any of its obligations under this Lease, Landlord may, in
addition to any other right or remedy available to Landlord hereunder, use,
apply, or retain all or any part of this security deposit for the payment of any
unpaid rent or for any other amount which Landlord may be required to expend by
reason of the default of Tenant, including any damages or deficiency in the
reletting of the Premises or any attorney's fees associated therewith,
regardless of the whether the accrual of such damages or deficiency occurs
before or after an eviction. If a portion of the security deposit is used or
applied by Landlord during the term hereof, Tenant shall, upon five (5) days
written demand, deposit with Landlord an amount sufficient to restore the
security deposit to its original amount.
ARTICLE 28
MISCELLANEOUS PROVISIONS
28.1 Captions. The captions used herein are for convenience only and do
not limit or amplify the provisions hereof. Whenever the singular is used the
same shall include the plural, and words of any gender shall include the other
gender.
28.2 Waiver. One or more waivers of any covenant, term or condition of
this Lease by either party shall not be construed as a waiver of a subsequent
breach of the same covenant, term or condition. The consent or approval by
either party shall not be construed as a waiver of a subsequent breach of the
same covenant, term or condition. The consent or approval by either party to or
of any act by the other party requiring such consent or approval shall not be
deemed to waive or render unnecessary consent to or approval of any subsequent
similar act.
28.3 Entire Agreement. This Lease contains the entire agreement between
the parties and no agreement shall be effective to change, modify or terminate
this Lease in whole or in part unless such agreement is in writing and duly
signed by the parties hereto.
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28.4 Severability. The invalidity or unenforceability of any provision
hereof shall not affect or impair any other provision.
28.5 Modification. Should any future mortgagee or beneficiary under a
deed of trust require a modification of this Lease, which modification will not
bring about any increased cost or expense to Tenant or will not in any way
substantially or materially change the rights and obligations of Tenant
hereunder, then and in such event, Tenant agrees that this Lease may be so
modified.
28.6 Governing Law. This Lease shall be governed by and construed
pursuant to the laws of the State of Colorado.
28.7 Successors and Assigns. The covenants and conditions herein
contained shall inure to and bind the respective heirs, permitted successors,
executors, administrators and assigns of the parties hereto, and the terms
"Landlord" and "Tenant" shall include the successors and assigns of either such
party, whether immediate or remote, except as otherwise specifically set forth
in this Lease to the contrary.
28.8 Authorization to Execute. The parties executing this Lease on
behalf of Tenant hereby covenant and warrant that (i) in the event Tenant
hereunder shall be a corporation, Tenant is a duly qualified corporation and all
steps have been taken prior to the date hereof to qualify Tenant to do business
in the State of Colorado; (ii) all franchise and corporate or other applicable
taxes have been paid to date, and all future forms, reports, fees and other
documents necessary to comply with applicable laws will be filed, Tenant is
authorized to perform its obligations under this Lease and the person executing
this Lease is duly authorized to do so on behalf of Tenant.
28.9 Guaranty of Lease. Intentionally Omitted.
28.9 Approval of Documents. Landlord's approval of Tenant's plans for
work performed by Landlord or Tenant in the Premises shall create no
responsibility or liability on the part of Landlord for their completeness,
design, sufficiency, or compliance with any laws, rules, or regulations of
governmental agencies or authorities.
28.10 Prime Rate. As used herein, Prime Rate shall be the rate
published in the Midwestern Edition of The Wall Street Journal under "Money
Rates." If for any reason the prime rate is no longer published in The Wall
Street Journal, then Landlord shall select another financial publication and
reasonably equivalent announced rate as the "Prime Rate."
ARTICLE 29
SUBSTITUTION OF PREMISES
Intentionally Deleted
ARTICLE 30
RECORDING
Tenant agrees not to place this Lease of record unless requested to
execute a Memorandum of Lease by Landlord, which may, at Landlord's option, be
placed of record.
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Any recording by Tenant without Landlord's prior written consent shall
at Landlord's option be deemed a default pursuant to Article 24 hereof and
Landlord shall have all of the rights and remedies set forth therein.
ARTICLE 31
REAL ESTATE BROKER
Landlord and Tenant each represent and warrant to the other that it has
not dealt with any broker in connection with this Lease, and that insofar as it
knows, no other broker negotiated or participated in the negotiations of this
Lease, or submitted or showed the Premises, or is entitled to any commission in
connection herewith (except Tenant's brokers McBride and Company LLC ("McBride")
and Landlord's listing brokers Cushman & Wakefield of Colorado, Inc.
("Cushman")) and each party agrees to indemnify the other against any liability
arising from a breach of this representation and warranty including reasonable
attorney's fees. Landlord shall pay Cushman's fee. The parties acknowledge that
McBride and Cushman have a separate agreement, regarding the payment of
McBride's fee.
ARTICLE 32
RENT PREPAYMENT
Intentionally Omitted.
ARTICLE 33
OTHER PROVISIONS
33.1 Option to Extend.
(1) Tenant shall have an option to extend the Lease for one
(1) additional term of five (5) years. In order to exercise such option, Tenant
shall notify Landlord in writing at least two hundred seventy (270), but not
more than three hundred sixty (360), days prior to the expiration of the
respective lease term of its election to exercise the option, upon which time
Landlord shall submit in writing within thirty (30) days thereafter a proposal
for the then current Market Base Rental Rate (per rentable square foot per
annum) for the extended term. Tenant shall have thirty (30) days from the
receipt of said notice to (i) accept the proposed Market Base Rental Rate in
writing to Landlord, (ii) to reject the Market Base Rental Rate and elect the
appraisal process set forth below, or (iii) elect not to extend. If Tenant
elects not to extend or fails to timely exercise its option, time being of the
essence, [all of] the option(s) shall automatically terminate and be of no
further force and effect and this Lease shall terminate upon expiration of the
then Lease term. Any such extension shall be upon all of the terms, conditions
and covenants of this Lease except as to (A) the amount of Base Rent, which
shall be determined as set forth herein, (B) options to extend, options to
expand, and rights of refusal, which shall not be applicable, and (C) Tenant
allowances or other concessions which shall not be applicable to the extension
term. As used herein, "Market Base Rental Rate" shall mean the then Base Rental
Rate for comparable first class multi-tenant office buildings of comparable
size, location and age in Broomfield, Colorado, at such time, taking into
account the following factors: (i) rent per rentable square foot; (ii) operating
expenses and real estate tax
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payments; (iii) current rental escalators; and (iv) rental concessions, if any,
as applicable to market renewals of leases.
(2) If Tenant, by written notice delivered no later than seven
(7) days after the date Landlord notifies Tenant of the Market Base Rental Rate,
objects to the Market Base Rental Rate determined by Landlord and elects to
submit the rate determination to appraisal, then, within seven (7) days of the
date of Tenant's objection, each party shall appoint a non-affiliated certified
M.A.I. Appraiser that has at least five (5) years' full-time commercial
appraisal experience in Broomfield, Colorado (or any successor county thereto)
to determine the Market Base Rental Rate, such process to be completed within
twenty (20) days after the date of the appointment of the last appraiser. If a
party does not appoint a qualified appraiser within five (5) days after the
other party has given notice of the name of its appraiser then the single
appraiser shall be the sole appraiser and shall set the Market Base Rental Rate.
The appraisers appointed by the parties shall meet promptly and attempt to set
the Market Base Rental Rate. If they are unable to agree on the Market Base
Rental Rate within twenty (20) days after the date the second appraiser has been
appointed, they shall elect a third appraiser meeting the qualifications stated
in this paragraph within seven (7) days after the last day the two (2)
appraisers are to set the Market Base Rental Rate. If the appraisers are unable
to agree on the third appraiser within said time frame, either of the parties to
this Lease, after giving five (5) days' prior written notice to the other party,
may apply to the then president of the real estate board of Denver, Colorado for
the selection of a third appraiser who meets the qualifications stated in this
Section, which selection shall be made within three (3) business days. All
determinations of Market Base Rental Rate shall be subject to the limitations on
Market Base Rental Rate set forth in the first paragraph of this Section. Each
of the parties shall pay for the appraiser appointed by it and shall bear
one-half of the cost of appointing the third appraiser and of paying the third
appraiser's fee. The third appraiser, however selected, shall be a person who
has not previously acted in any capacity for either party.
(3) Within twenty (20) days after the selection of the third
appraiser, the third appraiser shall determine the Market Base Rental Rate and
all three of the appraiser's Market Base Rental Rates shall be averaged
excluding any single Market Base Rental Rate which is either ten percent (10%)
higher or lower than the middle appraisal of Market Base Rental Rate and the
remaining appraisals shall then be averaged.
(4) If the Market Base Rental Rate is not established for the
extended term prior to its commencement, Tenant shall continue to pay the
applicable Base Rent required for the last full month of the Lease term until
the appraisers have made their determination. The Market Base Rental Rate in
question, when finally determined by the appraisers, shall be retroactive to the
commencement of the extension term, and the first Base Rent payment becoming due
after the determination of the applicable Market Base Rental Rate shall include
the retroactive amounts of monthly Base Rent installments accrued and unpaid. In
no event may either Landlord or Tenant elect not to extend the Lease based upon
the Market Base Rental Rate established in accordance herewith.
(5) This option to extend may not be exercised and the Lease
shall not be extended if Tenant is in default which default is not cured within
any applicable cure periods this Lease has been sublet or assigned.
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(6) Time is of the essence hereof, any failure of Tenant to
give any notice required hereunder within the required time period shall render
this option null and void.
(7) This option shall terminate with respect to any Suite that
is sublet or assigned in whole or in part. For example, if 15,000 rentable
square feet of Suite 600 are sublet for all or any portion of the Lease Term
then the option terminates as to all of Suite 600, including the portion not
sublet. The Tenant shall have the option to extend on only the Suites that it
has not sublet or assigned. In no event shall any subtenant or assignee have any
right to extend. Upon an extension exercised by Tenant in accordance herewith
for the remaining Suites which were not sublet nor assigned, then this Lease
will be amended reducing the Premises and Tenant's Pro Rata Share accordingly.
All determinations of Market Base Rental Rate shall be made based upon the
amended Premises.
33.2 Parking. Landlord represents that the Building Complex shall be
constructed to provide not less than four and one-half (4.5) parking spaces for
every one thousand (1000) square feet of Rentable Area of the Building inclusive
of handicapped and visitor parking, subject to requirements of any governmental
entity and the architectural control committee. Should Landlord provide reserved
parking to any tenant in the Building, Tenant shall receive its proportionate
share of reserved parking. For example, if a two thousand square foot tenant
received two reserved parking spaces (1/1000 square feet), then Tenant would
receive one reserved space for every 1000 square feet leased by Tenant. If
Tenant already had one reserved parking space for every two thousand square feet
leased, it would receive only such additional reserved spaces to bring its ratio
to one space per thousand square feet of leased space. If other tenants are
required to pay for such reserved spaces, then Tenant's reserved spaces would be
paid for on the same terms.
33.3 Vacation. Tenant may, provided it complies with all other terms of
the Lease including payment of Rent, vacate the Premises in whole or in part
provided Tenant gives Landlord thirty (30) days prior written notice of its
intent to vacate.
33.4 Antenna. Tenant shall have the right at its own expense at any
time and from time to time during the term hereof, provided it is not in default
hereunder to install, repair, maintain and replace two (2) antennas or satellite
dishes pursuant to and in accordance with the Antenna License attached hereto as
Exhibit F attached hereto and incorporated herein by this reference.
33.5 Generator. Prior to the First Suite Commencement Date the Landlord
and Tenant shall reasonably coordinate on the provision of supplemental
generator service for the customer service center located in the Tenant's
premises. If Landlord can reasonably accommodate Tenant using the generator for
the Building then the parties as part of the Tenant Improvement Work for the
respective Suite in which the customer service center is located shall
incorporate the provision of generator services to the customer service center.
The Tenant understands that using the Landlord's generator shall not subject
Landlord to any liability, cost or expense of any kind or nature, including any
failure of the generator to work or work properly, and Tenant, in consideration
of Landlord permitting Tenant the use of Landlord's generator, releases
Landlord, its agents, employees and property manager and agrees to hold such
parties harmless from any and all claims, damages or expenses of any kind or
nature arising from or related to the Landlord's generator. If Landlord and
Tenant cannot for any reason agree upon use of Landlord's generator then Tenant
shall have the right to install a generator solely for the use of its customer
service center on the roof of the Building. The
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parties agree to enter into a "Generator License" Agreement for the generator
substantially in the same form as the Antenna License Agreement excluding
provisions unique to antennas and including provisions which would be applicable
to a small generator using natural gas.
[SIGNATURE PAGES FOLLOW]
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<PAGE> 44
IN WITNESS WHEREOF, the parties hereto have executed this Lease this
6th day of October, 2000.
LANDLORD:
AMBER DRIVE I, L.L.C., a Delaware limited liability
company
By: AMBERJACK, LTD., an Arizona limited partnership,
its managing member
By: /s/ Steven F. Clark
Name: Steven F. Clark
Title: President Prime West Development, Inc.
Agent for Landlord
By: /s/ James C. Crain
Name: James C. Crain
Title: V.P Operations, Prime West Developments,
Inc. Agent for Landlord
TENANT:
MCDATA CORPORATION, a Delaware corporation
By: /s/ John F. McDonnell
Name: John F. McDonnell
Title: CEO, Chairman
