OFFICE/LIGHT MANUFACTURING LEASE
(2900 Center Green Court South)
(Boulder, Colorado)
LEASE SUMMARY
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1. Landlord: THW Partners Limited Partnership, a
Colorado limited partnership
2. Tenant: Gilead Sciences, Inc., a
Delaware corporation
3. Guarantor: None
4. Premises: Second Floor, 2900 Center Green Court
South, Boulder, Colorado
5. Rentable Square Feet: Approximately 10,207 square feet
6. Commencement Date: March 1, 2000
7. Expiration Date: February 28, 2005
8. Term: Five (5) years
9. Rent Commencement Date: March 1, 2000
10. Initial Rent: $173,519
(Annually)
11. Initial Rent: $14,459.92
(Monthly)
12. Increase in Base Rent: 3% annual increase on Base Rent during
years two, three, four and five
13. Operating Expenses: Pro rata share of increases
over 1999 Base Year
14. Tenant's Pro Rata Share
of the Building Complex: 30.10%
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15. Security Deposit: $14,459.92 in cash or
acceptable letter of credit
16. Parking Spaces: None assigned
17. Tenant Finish Allowance $112,277.00 per Workletter
18. Option on Additional Space: None
19. Option to Renew: Two 5-year terms @ 95% of
Market Rates
20. Right of First Offer: Yes
EXHIBITS:
A - Premises
B - Legal Description
C - Estoppel and Commencement Date Certificate
D - Work Letter Agreement
E - Rules and Regulations
F - Other Rights of Opportunity
to Lease Space
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Note: This Lease Summary does not in any way modify the terms of the
Lease, but rather is for information purposes only. The Lease should
be consulted for the specific terms of the Lease Agreement.
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OFFICE/LIGHT MANUFACTURING LEASE
(2900 Center Green Court South)
(Boulder, Colorado)
THIS LEASE is made this _____ day of January, 2000, between THW
PARTNERS LIMITED PARTNERSHIP, a Colorado limited partnership ("Landlord") and
GILEAD SCIENCES, INC., a Delaware corporation ("Tenant").
1. PREMISES: Landlord hereby leases to Tenant those certain premises
designated on the Plans attached hereto as EXHIBIT A and incorporated herein
by this reference (the "Premises"), consisting of a total of approximately
10,207 square feet of space and known as the second floor in the building at
2900 Center Green Court South in Boulder, Colorado (hereinafter the
"Building"), located on the real property more particularly described on
EXHIBIT B attached hereto and incorporated herein by this reference, together
with a non-exclusive right, subject to the provisions hereof, to use all
appurtenances thereunto, including, but not limited to, parking areas, and
any other areas designated by Landlord for use by tenants of the Building
(the Building, the real property on which the same is situated, parking
areas, other buildings thereon and areas and appurtenances are hereinafter
collectively sometimes called the "Building Complex"). This Lease is subject
to the terms, covenants and conditions set forth herein and Tenant and
Landlord each covenant as a material part of the consideration for this Lease
to keep and perform each and all of said terms, covenants and conditions to
be kept and performed by them.
2. TERM:
(a) The term of this Lease shall be for Five (5) years (the
"Primary Lease Term") commencing at 12:01 a.m. on March 1, 2000 (the
"Commencement Date") and terminating at 11:59 p.m. on February 28, 2005 (the
"Termination Date"), unless sooner terminated pursuant to the terms hereof.
If Landlord constructs the tenant improvements pursuant to the Workletter
(Exhibit D), in the event that the Premises are not "Ready for Occupancy," as
such term is defined in Paragraph 20 hereof, prior on or before the
Commencement Date, the Commencement Date (and the date for commencement of
rental payments) shall mean and refer to the date the Premises are Ready for
Occupancy. If Tenant constructs the tenant improvements pursuant to the
Workletter (Exhibit D), the Commencement Date and the date for commencement
of rental payments may be deferred as a result of any Landlord Delays, as
described in Paragraph 20 hereof.
(b) If, as a result of the postponement or acceleration of
the Commencement Date, the term would begin other than on the first day of
the month, Tenant shall pay proportionate rent at the same monthly rate set
forth herein (also in advance) for such partial month and all other terms and
conditions of this Lease shall be in force and effect during such partial
month, and the end of the term hereof shall be adjusted to a date which is
the last day of the month five (5) years after the Commencement Date. Tenant
agrees to execute and deliver to Landlord, in form attached hereto as EXHIBIT
C, an Estoppel and Commencement Date Certificate, within thirty (30) days of
the date the term commences, certifying as to the actual
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commencement and termination dates of the term, the rent commencement date,
if different, and such other matters as may be required by Landlord.
3. RENT: Tenant shall pay rent to Landlord for the Premises from the
Commencement Date through December 31, 2000 at the rate of One Hundred
Seventy Three Thousand, Five Hundred and Nineteen Dollars ($173,519) per
year, payable in equal monthly installments of Fourteen Thousand Four Hundred
Fifty Nine and 92/100 Dollars ($14,459.92).
A portion of the foregoing rent is Tenant's Pro-Rata Share of
Operating Expenses for the calendar year 1999, the exact amount of which
remains to be determined. The balance of the foregoing rent is defined as
"Base Rent."
On January 1, 2001, and on each January 1st thereafter throughout
the term and any extended term of this Lease, the Operating Expense component
of the rent shall be adjusted as provided in paragraph 5.b. of this Lease.
On March 1, 2001, and on each March 1st thereafter throughout the
term and any extended term of this Lease, the Base Rent due for the ensuing
year shall be increased by 3% of the Base Rent payable during the preceding
year.
All installments of Rent shall be payable in advance, on the first (1st) day
of each calendar month during the term hereof. Rent for the first and last
months of the term, hereof shall be prorated based upon the number of days
during each of said months that the Lease term was in effect. One monthly
installment of Rent shall be due and payable on the date of execution of this
Lease by Tenant. All Rent shall be paid without notice, demand, deduction or
offset, at the office of Landlord or to such other person or at such other
place as Landlord may designate in writing. Tenant shall pay to Landlord as
"Additional Rent" all other sums due under this Lease.
4. SECURITY DEPOSIT: It is agreed that Tenant, concurrently with the
execution of this Lease, has deposited with Landlord, and will keep on
deposit at all times during the term hereof, a sight draft letter of credit
from a reputable financial institution satisfactory to Landlord, payable to
Landlord, in the amount of Fourteen Thousand Four Hundred Fifty Nine and
92/100 Dollars ($14,459.92), the receipt of which is hereby acknowledged, as
security for the payment by Tenant of the rent and all other sums herein
agreed to be paid and for the faithful performance of all the terms,
conditions and covenants of this Lease. If, at any time during the term
hereof, Tenant shall be in default in the performance of any provisions of
this Lease, Landlord shall have the right, but shall not be obligated, to
draw upon said letter of credit and to use the proceeds therefrom, or so much
thereof as necessary, in payment of any rent in default, reimbursement of any
expense incurred by Landlord, and in payment of any damages incurred by the
Landlord by reason of Tenant's default. In such event, Tenant shall, on
written demand of Landlord, forthwith remit to Landlord a sufficient amount
in cash to restore said deposit to its original amount. In the event said
deposit has not been utilized as aforesaid, said deposit, or as much thereof
as has not been utilized for such purposes, shall be refunded to Tenant,
without interest, within sixty (60) days after the termination of this Lease
upon full performance of this Lease by Tenant and vacation of the Premises by
Tenant. Landlord shall have the right to commingle any cash portion
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of said deposit with other funds of Landlord. Landlord may assign the letter
of credit and deliver any cash funds deposited herein by Tenant to any
purchaser of Landlord's interest in the Premises who assumes all of
Landlord's obligations under this Lease and holds such letter of credit
and/or cash pursuant to the terms of this Lease, in the event such interest
is sold, and thereupon Landlord shall be discharged from further liability
with respect to such deposit. If said letter of credit is not assignable,
Tenant agrees to replace the letter of credit payable to Landlord with one
payable to any such purchaser of the Premises. If the valid claims of
Landlord exceed the amount of said deposit, Tenant shall remain liable for
the balance of such claims.
5. ADDITIONAL RENT:
(a) The following terms shall have the following meanings with
respect to the provisions of this Paragraph 5:
(1) "Building Complex Rentable Area" shall mean all
rentable space available for lease in the Building Complex, calculated on the
basis set forth in BOMA Publication #ANSIZ-65.1-1980. If there is a
significant change in the aggregate Building Complex Rentable Area, of a
permanent nature, as a result of an addition to the Building Complex, partial
destruction thereof or similar circumstance, Landlord's Accountants (as
herein defined) shall determine and make an appropriate adjustment to the
provisions herein.
(2) "Tenant's Pro Rata Share" shall mean a fraction, the
numerator of which is the BOMA Rentable Area of the Premises (i.e. 10,207
square feet) and the denominator of which is the Building Complex Rentable
Area (i.e. 33,909 square feet), and is equal to 30.10%. At such time, if
ever, any space is added to or subtracted from the Premises pursuant to the
terms of this Lease, Tenant's Pro Rata Share shall be increased or decreased
accordingly.
(3) "Operating Expenses" shall mean:
A. All operating expenses of any kind or nature
which are necessary, ordinary or customarily incurred with respect to the
operation and maintenance of the Building Complex as determined in accordance
with generally accepted accounting principles and shall include, but not be
limited to:
(i) Costs of supplies, including but not
limited to the cost of "relamping" all Building lighting as the same may be
required from time to time;
(ii) Costs incurred in connection with
obtaining and providing energy for the Building Complex, including but not
limited to costs of propane, butane, natural gas, steam, electricity, solar
energy and fuel oils, coal or any other energy sources as well as costs for
heating, ventilation, and air conditioning services ("HVAC");
(iii) Costs of water and sanitary and
storm drainage services;
(iv) Costs of janitorial and security
services, if any;
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(v) Costs of general maintenance and
repairs, including costs under HVAC and other mechanical maintenance
contracts; and repairs and replacements of equipment used in connection with
the maintenance and repair work;
(vi) Costs of maintenance and replacement
of landscaping, sprinkler systems; and costs of supplies, maintenance,
repair, striping and repaving of parking areas, common areas, plazas and
other areas of the Building Complex, including trash and snow removal;
(vii) Insurance premiums, including fire
and all-risk coverage, together with loss of rent endorsement; public
liability insurance; and any other insurance carried by Landlord on the
Building Complex or any component parts thereof;
(viii) Labor costs, including wages and
other payments, costs to Landlord of workmen's compensation and disability
insurance, payroll taxes, welfare fringe benefits incurred directly in
connection with the operation of the Building Complex, and all legal fees and
other costs or expenses incurred in resolving any labor disputes;
(ix) Professional building management
fees not to exceed market rate management fees in the Boulder area;
(x) Legal, accounting, inspection and
other consultation fees (including, without limitation, fees charged by
consultants retained by Landlord for services that are designed to produce a
reduction in Operating Expenses or reasonably to improve the operation,
maintenance or state of repair of the Building Complex) incurred for the
normal prudent operation of the Building Complex (but not those incurred in
connection with Landlord's business relationship or dealings with tenants or
prospective tenants);
(xi) The costs of capital improvements
and structural repairs and replacements made in or to the Building Complex or
the cost of any machinery or equipment installed in the Building Complex in
order to conform to changes, subsequent to the Lease Commencement Date, in
any applicable laws, ordinances, rules, regulations or orders of any
governmental or quasi-governmental authority having jurisdiction over the
Building Complex (herein, "Required Capital Improvement"); and the costs of
any capital improvements and structural repairs and replacements designed
primarily to reduce Operating Expenses (herein, "Cost Savings Improvements").
The expenditures for Required Capital Improvements and Cost Savings
Improvements shall be amortized and included within annual Operating Expenses
over the useful life of such capital improvement or structural repair or
replacement (as determined by Landlord's accountants), provided that the
amortized amount of any Cost Savings Improvement shall be limited in any year
to the reduction in Operating Expenses as a result thereof. Landlord shall
apprise Tenant of its plans to make any Required Capital Improvement or Cost
Savings Improvement prior to commencement of work on such improvements. The
foregoing shall not, however, imply that Tenant has any right to approve of
such improvements or be construed to
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require Tenant's consent to any such improvement;
(xii) All real property taxes and
assessments ("Taxes and Assessments") levied against the Building Complex by
any governmental or quasi-governmental authority, including any taxes,
assessments, surcharges, or service or other fees of a nature not presently
in effect which shall hereafter be levied on the Building Complex as a result
of the use, ownership or operation of the Building Complex or for any other
reason, whether in lieu of or in addition to any current real estate taxes
and assessments; provided, however, that any taxes which shall be levied on
the rentals of the Building Complex shall be determined as if the Building
Complex were Landlord's only property and provided further, that in no event
shall the term "Taxes and Assessments", as used herein, include any federal,
state or local income taxes levied or assessed on Landlord, unless such taxes
are a specific substitute for real property taxes; such term shall, however,
include gross taxes on rentals and expenses incurred by Landlord for tax
consultants and in contesting the amount or validity of any such Taxes or
Assessments (all of the foregoing are collectively referred to herein as
"Taxes"). "Assessments" shall include any and all so-called special
assessments, license tax, business license fee, business license tax,
commercial rental tax, levy, charge or tax imposed by any authority having
the direct power to tax, including any city, county, state or federal
government, or any school, agricultural, lighting, water, drainage or other
improvement or special district thereof, against the Premises, the Building
or the Building Complex, or against any legal or equitable interest of
Landlord therein. For the purposes of this Lease, any special assessment
shall be deemed payable in such number of installments as is permitted by
law, whether or not actually so paid. If the Building Complex has not been
fully assessed as a completed project, for the purposes of computing the Real
Estate Taxes for any adjustment required herein, the same shall be increased
by Landlord's Accountants, in accordance with their estimate of what the
assessment will be, upon full completion of the Building Complex, including
installation of all tenant finish items. The terms "taxes" and "assessments"
as used herein shall not include any interest, penalties or fines resulting
from delinquency in payments or other causes.
(xiii) Any other expense which under
generally accepted accounting principles would be considered a normal
maintenance or operating expense. If Landlord selects an accrual accounting
basis for calculating Operating Expenses, Operating Expenses shall be deemed
to have been paid when such expenses have accrued in accordance with
generally accepted accounting principles.
B. But shall expressly exclude Landlord's income
taxes; leasing commissions, advertising and promotional expenses; interest on
debt or amortization payments on any mortgages or deeds of trust;
depreciation, costs of repairs or other work occasioned by fire, windstorm or
other casualty to the extent of insurance proceeds received; costs and
expenditures which Landlord has treated (or which Landlord should, in
accordance with U.S. Generally Accepted Accounting Principals treat), for its
accounting purposes, as a capital expenditure, other than Required Capital
Improvements and Cost Savings Improvements referred to in Paragraph
5(a)(3)(xi) above, and any other expense which under generally accepted
accounting principles would not be considered a normal maintenance or
operating expense, except as otherwise specifically provided herein.
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b. It is hereby agreed that Tenant shall pay to Landlord as
Additional Rent, commencing January 1, 2001, Tenant's Pro Rata Share of the
amount by which Operating Expenses for the calendar year 2000 exceed the
Operating Expenses for the calendar year 1999, payable monthly, on the same
date and at the same place Base Rent is payable. In a like manner, Additional
Rent shall be adjusted as of each January 1st during the Term. Landlord shall
deliver to Tenant, as soon as practicable following the end of any calendar
year, a calculation of the Operating Expenses for the calendar year just
ended and the adjustment in rent resulting from any excess of such Operating
Expenses over the Operating Expenses for the base year of 1999 (the "Budget
Sheet"). Until receipt of the Budget Sheet, Tenant shall continue to pay its
monthly Tenant's Pro Rata Share of Operating Expenses based upon the amount
paid during the preceding calendar year. To the extent that the Budget Sheet
reflects Tenant's Pro Rata Share of Operating Expenses for the new calendar
year greater than the amount actually paid to the date of receipt of the
Budget Sheet for the new calendar year, Tenant shall pay such amount to
Landlord within thirty (30) days of receipt of the Budget Sheet. Upon receipt
of the Budget Sheet, Tenant shall thereafter pay the amount of its monthly
Tenant's Pro Rata Share of Operating Expenses as set forth in the Budget
Sheet.
c. If the Lease term hereunder covers a period of less than
a full calendar year during the last calendar year of the term hereof,
Tenant's Pro Rata Share of Operating Expenses for such partial year shall be
adjusted accordingly to reflect the number of months in such year during
which Tenant leased the Premises.
d. Tenant shall have the right at its own expense and at a
reasonable time (after written notice to Landlord) within ninety (90) days
after receipt of the Budget Sheet to audit Landlord's books relevant to the
Additional Rent due under this Paragraph 5. Landlord shall fully cooperate
with Tenant in connection with such audit. In the event Tenant does not audit
Landlord's books and deliver the results thereof to Landlord within said
90-day period, the terms and amounts set forth in the Budget Sheet shall be
deemed conclusive and final and Tenant shall have no further right to
adjustment unless the failure to complete such audit is caused by Landlord's
failure to provide or make available to Tenant the information necessary to
complete such audit, in which case such time period shall be appropriately
expanded. In the event Tenant's examination reveals that an error has been
made in Landlord's determination of Tenant's Pro Rata Share of Operating
Expenses and Real Estate Taxes and Landlord agrees with such determination,
then the amount of such adjustment shall be payable by Landlord or Tenant, to
the other party as the case may be. In the event Tenant's examination reveals
an error has been made in Landlord's determination of Tenant's Pro Rata Share
of Operating Expenses and Real Estate Taxes, and Landlord disagrees with the
results thereof, Landlord shall have thirty (30) days to obtain, at its own
expense, an audit from an accountant of its choice to determine Tenant's Pro
Rata Share of Operating Expenses and Real Estate Taxes. In the event
Landlord's accountant and Tenant's accountant are unable to reconcile their
audits, both accountants shall mutually agree upon a third accountant, whose
determination of Tenant's Pro Rata Share of Operating Expenses and Real
Estate Taxes shall be conclusive. In the event the amount of error by
Landlord is determined to be ten percent (10%) or more, the reasonable costs
of the three audits made pursuant to this
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subparagraph shall be paid by Landlord. In the event the amount of error by
Landlord is determined to be less than ten percent (10%), the reasonable
costs of the three audits made pursuant to this subparagraph shall be paid by
Tenant.
e. Landlord's failure during the Lease term to prepare and
deliver any statements or bills, or Landlord's failure to make a demand under
this Paragraph or under any other provision of this Lease shall not in any
way be deemed to be a waiver of, or cause Landlord to forfeit or surrender
its rights to collect any items of Additional Rent which may have become due
pursuant to this Paragraph during the term of this Lease. Tenant's liability
for all Additional Rent due under this Paragraph 5 shall survive the
expiration or earlier termination of this Lease.
f. Notwithstanding anything in this paragraph 5 to the
contrary, Tenant shall only be responsible for Additional Rent resulting from
an increase in Operating Expenses over Base Operating Expenses commencing on
the first day of January, 2001, based on any increase or estimated increase
of Operating Expenses during the calendar year 2000 over those incurred
during 1999. Thereafter, adjustments in the amount of any Additional Rent
shall occur as of the first day of each calendar year during the remaining
Initial Term and any Extended Term of this Lease.
6. CHARACTER OF OCCUPANCY:
(a) The Premises are to be occupied for office and light
manufacturing uses not inconsistent with the character and type of tenancy
found in comparable first-class office/light manufacturing buildings in the
Boulder area and for no other purpose without the prior written consent of
Landlord. By way of limitation, the term "light manufacturing uses" shall
include only the packaging and distribution of pharmaceutical products and
not the manufacture or testing of pharmaceutical products.
(b) Tenant shall not suffer nor permit the Premises nor any
part thereof to be used in any manner, nor anything to be done therein, nor
suffer or permit anything to be brought into or kept therein, which would in
any way (i) make void or voidable any fire or liability insurance policy then
in force with respect to the Building Complex, (ii) make unobtainable from
reputable insurance companies authorized to do business in Colorado any fire
insurance with extended coverage, or liability, boiler or other insurance
required to be furnished by Landlord under the terms of any lease or mortgage
to which this Lease is subordinate, at standard rates, (iii) cause or in
Landlord's reasonable opinion be likely to cause physical damage to the
Building Complex or any part thereof, (iv) constitute a public or private
nuisance, (v) impair, in the reasonable opinion of Landlord, the appearance,
character or reputation of the Building Complex, (vi) discharge objectionable
fumes, vapors or odors into the air conditioning system or into any flues or
vents not designed to receive them or otherwise in such manner as may
unreasonably offend other occupants of the Building Complex, (vii) impair or
interfere with any of the Building Complex services or impair or interfere
with or tend to impair or interfere with the use of any of the other areas of
the Building Complex by, or occasion discomfort, or annoyance to Landlord or
any of the other tenants or occupants of the Building Complex, any such
impairment or interference to be based upon the reasonable opinion of
Landlord, (viii) increase on an ongoing
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periodic basis the pedestrian traffic in and out of the Premises or the
Building Complex above an ordinary level, (ix) create waste in, on or around
the Premises, Building, or Building Complex, or (x) make any noise or set up
any vibration which will disturb other tenants, except in the course of
permitted repairs or alterations at times permitted by Landlord.
(c) Tenant shall not use the Premises nor permit anything
to be done in or about the Premises or Building Complex in any way which will
conflict with any law, statute, ordinance, protective covenants affecting the
Building Complex or governmental or quasi-governmental rules or regulations
now in force or which may hereafter be enacted or promulgated. Tenant shall
give prompt written notice to Landlord of any notice it receives of the
violation of any law or requirement of any public authority with respect to
the Premises or the use or occupation thereof. Landlord shall give prompt
written notice to Tenant of any notice it receives relative to the violation
by Tenant of any law or requirement of any public authority with respect to
the Premises or the use or occupation thereof.
7. SERVICES AND UTILITIES:
(a) Landlord agrees, and in accordance with standards from
time to time prevailing for first-class office/light manufacturing buildings
in the Boulder area: (i) to furnish water to the Building for use in
lavatories and drinking fountains (and to the Premises if the plans for the
Premises so provide); (ii) to furnish heating and air conditioning service;
(iii) to furnish all gas and electric services reasonably required in and to
the Premises, (iv) to furnish such snow removal services to the Building
Complex as may, in the judgment of Landlord, be reasonably required for safe
access to the Building Complex, and (v) to provide and pay for all reasonable
and normal management and operating expenses of the Building and the
Premises, including trash removal (except janitorial services and maintenance
within the Premises).
(b) If Tenant requires water in excess of that usually
furnished or supplied for use in the Premises as general office space, Tenant
shall first procure the consent of Landlord for the use thereof. Tenant
agrees to pay to Landlord such amounts as Landlord determines are necessary
to cover the costs of such increased use of water, including, but not limited
to, the cost of installation, monitoring, maintenance and repair of any check
meter or other instrument necessary to measure the use of additional water.
Landlord additionally reserves the right and at its option shall be entitled
to cause the Premises to be separately metered for water usage.
(c) Tenant agrees that Landlord shall not be liable for
failure to supply any required services during any period when Landlord uses
reasonable diligence to supply such services, or during any period Landlord
is required to reduce or curtail such services pursuant to any applicable
laws, rules or regulations, now or hereafter in force or effect, it being
understood and agreed to by Tenant that Landlord may discontinue, reduce or
curtail such services, or any of them, at such times as it may be necessary
by reason of accident, unavailability of employees, repairs, alterations,
improvements, strikes, lockouts, riots, acts of God, application of
applicable laws, statutes, rules and regulations, or due to any other
happening beyond the reasonable control of Landlord. In the event of any such
interruption, reduction or discontinuance of Landlord's
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services, Landlord shall not be liable for damages to persons or property as
a result thereof, nor shall the occurrence of any such event in any way be
construed as an eviction of Tenant or cause or permit an abatement, reduction
or setoff of rent, or operate to release Tenant from any of Tenant's
obligations hereunder, so long as such services are resumed within a
reasonable period of time.
(d) In the event that Tenant has any special or additional
electrical or mechanical requirements related to its use of the Premises, any
such electrical or mechanical equipment must be located within the Premises.
Such electrical or mechanical requirements, for the purposes hereof, shall
include by way of example, but not limitation, any internal telephone system.
The foregoing shall in no way be construed as granting to Tenant additional
rights to use any such special or additional electrical or mechanical
equipment in its Premises without the prior written consent of Landlord. Any
additional cost or expense related to or resulting from such electrical or
mechanical requirements shall be the sole obligation of Tenant. Landlord
acknowledges that Tenant occupies space in other locations, and that the
Premises and the other locations will be interconnected with telephone and
computer services. However, such interconnection shall not involve any
electrical, mechanical or telecommunication equipment located on the outside
of the Building or within the Building other than in the Premises or involve
any structural penetration or wiring within walls or roof of the Building or
Premises, without the Landlord's prior written consent.
(e) Tenant at its sole cost and expense shall take good
care of the Premises, ordinary wear and tear excepted, and keep the same free
from waste at all times, and pay all charges for janitorial services
performed in the leased Premises during the term of this Lease.
8. QUIET ENJOYMENT: Subject to the provisions of this Lease,
Landlord covenants that Tenant, on paying the rent and performing the
covenants of this Lease on its part to be performed, shall and may peacefully
and quietly have, hold and enjoy the Premises for the term of this Lease.
Landlord shall not be responsible for the acts or omissions of any other
tenant or third party which may interfere with Tenant's use and enjoyment of
the Premises. In the event of any transfer or transfers of Landlord's
interest in the Premises or in the real property of which the Premises are a
part, other than a transfer for security purposes only, the transferor shall
be automatically relieved of any and all obligations and liabilities on the
part of Landlord accruing from and after the date of such transfer; provided
that the transferee agrees to accept and perform all obligations and
responsibibilities of Landlord under this Lease from and after the date of
transfer and agrees to accept and acknowledge all rights of Tenant under this
Lease from and after the date of transfer.
9. MAINTENANCE AND REPAIRS:
(a) Notwithstanding any other provisions of this Lease,
Landlord shall repair and maintain in good order, condition and repair the
roof, foundations, and exterior walls of the Building excluding store fronts,
glass windows, door closure devices, door frames and locks, except to the
extent such maintenance and repairs are caused by the negligent act or
omission of Tenant, its agents, servants, employees, licensees or invitees,
in which case Tenant shall either, at its option: (i) pay to Landlord,
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on demand, the cost of such maintenance and repairs performed by Landlord
less the amount of any insurance proceeds received by Landlord on account
thereof, if applicable; or (ii) promptly repair and maintain the damage it
has caused to the Premises, doing so in accordance with building standards
and in compliance with all local building codes and governmental regulations
and with the requirements of this Lease dealing with alterations, maintenance
and repairs. Landlord shall also maintain and keep in good order public
portions of the Building Complex, including but not limited to landscaping,
walkways and parking areas.
(b) Tenant, at Tenant's sole cost and expense, shall
maintain, in good order, condition and repair, the Premises, including the
interior surfaces of the ceilings, interior walls and floors, all doors,
interior and exterior glass and windows, store fronts, door closure devices,
door frames and locks, plumbing (excluding restrooms) and electrical wiring,
switches, fixtures and other mechanical items, and shall replace light bulbs
within the Premises as necessary. In the event Tenant fails to so maintain
the Premises in good order, condition and repair, ordinary wear and tear
excepted, Landlord shall give Tenant notice to do such acts as are reasonably
required to maintain the Premises. In the event Tenant fails to promptly
commence such work and diligently pursue it to completion, then Landlord
shall have the right, but shall not be required, to do such acts and expend
such funds at the expense of Tenant as are reasonably required to perform
such work. Tenant shall reimburse Landlord for all costs and expenses
incurred in performing such work within ten (10) days of invoice. Landlord
shall have no liability to Tenant for any damage, inconvenience or
interference with the use of the Premises by Tenant as a result of performing
any such work.
(c) Landlord and Tenant shall each do all acts required to
comply with all applicable laws, ordinances, regulations and rules of any
public authority relating to their respective maintenance obligations as set
forth herein.
10. ALTERATIONS AND ADDITIONS:
(a) Other than is provided for in Exhibit D, Tenant shall
make no permanent alterations, additions or improvements to the Premises or
any part thereof without obtaining the prior written consent of Landlord,
which consent shall not be unreasonably withheld or delayed. Tenant shall
submit any such request to Landlord at least thirty (30) days prior to the
proposed commencement date of such work. Landlord may impose, as a condition
to such consent, and at Tenant's sole cost, such reasonable requirements as
Landlord may deem necessary in its judgment, including without limitation,
the manner in which the work is done, a right of approval of the contractor
by whom the work is to be performed and the times during which the work is to
be accomplished, approval of all plans and specifications and the procurement
of all licenses and permits. Landlord shall be entitled to post notices on
and about the Premises with respect to Landlord's non-liability for
mechanics' Liens and Tenant shall not permit such notices to be defaced or
removed. Tenant further agrees not to connect any apparatus, machinery or
device to the Building systems, including electric wires, water pipes, fire
safety, heating and mechanical systems, without the prior written consent of
Landlord.
(b) All alterations, improvements and additions to the
Premises,
<PAGE>
including, by way of illustration but not by limitation, all counters,
screens, grilles, special cabinetry work, partitions, paneling, carpeting,
drapes or other window coverings and light fixtures, but excluding any
computer systems, telephone or other communication systems and similar
equipment, shall be deemed a part of the real estate and the property of
Landlord and shall remain upon and be surrendered with the Premises as a part
thereof without molestation, disturbance or injury at the end of the Lease
term, whether by lapse of time or otherwise. With respect to any alterations,
improvements and additions made to the Premises without Landlord's prior
written consent, Landlord, by notice given to Tenant no later than fifteen
(15) days prior to the end of the term, may elect to have Tenant remove all
or any of such alterations, improvements or additions (excluding non-movable
office walls), and in such event, Tenant shall promptly remove, at its sole
cost and expense, such alterations, improvements and additions and restore
the Premises to the condition in which the Premises were prior to the making
of the same, reasonable wear and tear excepted. Any such removal, whether
required or permitted by Landlord, shall be at Tenant's sole cost and
expense, and Tenant shall restore the Premises to the condition in which the
Premises were prior to the making of the same, reasonable wear and tear
excepted. All movable partitions, machines and equipment which are installed
in the Premises by or for Tenant, without expense to Landlord, and which can
be removed without structural damage to or defacement of the Building or the
Premises, and all furniture, furnishings and other articles of personal
property owned by Tenant and located in the Premises (all of which are herein
called "Tenant's Property") shall be and remain the property of Tenant. If
any of Tenant's Property is removed, however, Tenant shall repair or pay the
cost of repairing any damage to the Building or the Premises resulting from
such removal. All additions or improvements which are to be surrendered with
the Premises shall be surrendered with the Premises, as a part thereof, at
the end of the term or the earlier termination of this Lease.
(c) If Landlord permits persons requested by Tenant to
perform any alterations, repairs, modifications or additions to the Premises,
then prior to the commencement of any such work, Tenant shall deliver to
Landlord certificates issued by insurance companies qualified to do business
in the State of Colorado evidencing that workmen's compensation, public
liability insurance and property damage insurance, all in amounts, with
companies and on forms satisfactory to Landlord, are in force and maintained
by all such contractors and subcontractors engaged by Tenant to perform such
work. All such policies shall name Landlord as an additional insured and
shall provide that the same may not be canceled or modified without thirty
(30) days prior written notice to Landlord.
(d) Tenant, at its sole cost and expense, shall cause any
permitted alterations, decorations, installations, additions or improvements
in or about the Premises to be performed in compliance with all applicable
requirements of insurance bodies having jurisdiction, and in such manner as
not to interfere with, delay, or impose any additional expense upon Landlord
in the construction, maintenance or operation of the Building, and so as to
maintain harmonious labor relations in the Building.
11. ENTRY BY LANDLORD:
(a) Landlord and its agents shall have the right to enter
the Premises
<PAGE>
at all reasonable times and upon reasonable notice for the purpose of
examining or inspecting the same, to supply any services to be provided by
Landlord hereunder, to show the same to prospective purchasers and
prospective tenants of the Building, and to make such alterations, repairs,
improvements or additions to the Premises or to the Building as Landlord may
deem necessary or desirable. Landlord and its agent may enter the Premises at
all times and without advance notice and without liability to Tenant for
damage caused by such entry, whether forced or otherwise, for the purpose of
responding to an actual or apparent emergency. If, during the last 60 days of
the term hereof, Tenant shall have removed substantially all of its property
from the Premises, Landlord may immediately enter and alter, renovate and
redecorate the Premises without elimination or abatement of rent or incurring
liability to Tenant for any compensation.
12. MECHANIC'S LIENS: Except to the extent of Landlord's obligation
to pay for tenant finish, as provided for in Exhibit D, Tenant shall pay or
cause to be paid all costs for work done by or on behalf of Tenant or caused
to be done by or on behalf of Tenant on the Premises of a character which
will or may result in liens against Landlord's interest in the Premises,
Building or Building Complex and Tenant will keep the Premises, Building and
Building Complex free and clear of all mechanic's liens and other liens on
account of work done for or on behalf of Tenant or persons claiming under
Tenant. Except to the extent of Landlord's obligation to pay for tenant
finish, as provided for in Exhibit D, Tenant hereby agrees to indemnify,
defend and save Landlord harmless of and from all liability, loss, damages,
costs or expenses, including reasonable attorneys' fees, incurred in
connection with any claims of any nature whatsoever for work performed for,
or materials or supplies furnished to Tenant, including lien claims of
laborers, materialmen or others. Should any such liens be filed or recorded
against the Premises, Building or Building Complex with respect to work done
for or materials supplied to or on behalf of Tenant or should any action
affecting the title thereto be commenced, Tenant shall cause such liens to be
released of record within five (5) days after notice thereof pursuant to the
means provided therefore under Colorado statute. If Tenant desires to contest
any such claim of lien, Tenant shall nonetheless cause such lien to be
released of record by the posting of adequate security with a court of
competent jurisdiction as may be provided by Colorado's mechanics lien
statutes. If Tenant shall be in default in paying any charge for which such a
mechanics lien or suit to foreclose such a lien has been recorded or filed
and shall not have caused the lien to be released as aforesaid, after
consulting with Tenant, Landlord may (but without being required to do so)
pay such lien or claim and any costs associated therewith, and the amount so
paid, together with reasonable attorneys' fees incurred in connection
therewith, shall be immediately due from Tenant to Landlord as Additional
Rent.
13. DAMAGE TO PROPERTY, INJURY TO PERSONS:
(a) Tenant, as a material part of the consideration to be
rendered to Landlord under this Lease, hereby waives all claims of liability
that Tenant or Tenant's legal representatives, successors or assigns may have
against Landlord, and Tenant hereby indemnifies and agrees to hold Landlord
harmless from any and all claims of
<PAGE>
liability for any injury or damage to any person or property whatsoever: (1)
occurring in, on or about the Premises or any part thereof; and (2) occurring
in, on or about the Building Complex, to the extent such injury or damage is
caused by the negligent act or omission of Tenant, its agents, contractors,
employees, licensees or invitees. Tenant further agrees to indemnify and to
hold Landlord harmless from and against any and all claims arising from any
breach or default in the performance of any obligation on Tenant's part to be
performed under the terms of this Lease, or arising from any act of
negligence of Tenant, or any of its agents, contractors, employees, licensees
or invitees. Such indemnities shall include by way of example, but not
limitation, all costs, reasonable attorneys' fees, expenses and liabilities
incurred in or about any such claim, action or proceeding.
(b) Landlord shall not be liable to Tenant for: (i) any
damage by or from any act or negligence of any co-tenant or other occupant of
the Building Complex, or by any owner or occupant of adjoining or contiguous
property, or (ii) any injury or damage to persons or property resulting in
whole or in part from the criminal activities of others, unless Landlord has
received actual and timely knowledge of any threat, occurrance or event which
poses a risk of injury or damage to Tenant, unless Landlord has a legal and
practical remedy available to it to abate, remedy or eliminate such risk, and
unless Landlord has failed to take reasonable steps to abate, remedy or
eliminate such risk. To the extent not covered by normal fire and extended
coverage insurance, Tenant agrees to pay for all damage to the Building
Complex, as well as all damage to persons or property of other tenants or
occupants thereof, caused by the misuse or negligent act or omission of
Tenant or any of its agents, contractors, employees, licensees or invitees.
(c) Neither party nor their agents or employees shall be
liable to the other party for the loss or damage to any property occurring by
theft or otherwise, nor for any injury or damage to persons or property
resulting from fire, explosion, falling plaster, steam, gas, electricity,
water or rain which may leak from any part of the Building Complex or from
the pipes, appliances or plumbing works therein or from the roof, street or
subsurface or from any other place or resulting from dampness, or any other
cause whatsoever; provided, however, nothing contained herein shall be
construed to relieve either party from liability for any personal injury or
property damage resulting from its negligence. Neither Landlord nor its
agents or employees shall be liable for interference with the lights, view or
other incorporeal hereditaments, nor shall Landlord be liable to Tenant or
its officers, employees, guests or invitees for any damages arising from any
latent defect in the Premises or in the Building or Building Complex unless
resulting from Landlord's negligence. Each party shall give prompt notice to
the other in case of fire or accidents in or about the Premises or the
Building or of defects therein or in the fixtures or equipment located
therein.
(d) In case any claim, demand, action or proceeding is made
or brought against Landlord or Tenant, its agents or employees, by reason of
any obligation on the other party's part to be performed under the terms of
this Lease, or arising from any act or negligence of either party, its agents
or employees, or which gives rise to either party's obligation to indemnify
the other, the party shall be responsible for all costs and expenses,
including but not limited to reasonable attorneys' fees incurred in defending
or prosecution of the same, as applicable.
<PAGE>
(e) Landlord, as a material part of the consideration to be
rendered to Tenant under this Lease, hereby waives all claims of liability
that Landlord or Landlord's legal representatives, successors or assigns may
have against Tenant and Landlord hereby indemnifies and agrees to hold Tenant
harmless from any and all claims of liability for any injury or damage to any
person or property whatsoever: (1) occurring in, on or about the Premises or
any part thereof: and (2) occurring in, on or about the Building Complex, to
the extent such injury or damage is caused by the negligent act or omission
of Landlord, its agents, contractors, or employees. Landlord further agrees
to indemnify and hold Tenant harmless from and against any and all claims
arising from any breach or default in the performance of any obligation on
Landlord's part to be performed under the terms of this Lease, or arising
from any act of negligence of Landlord, or any of its agents, contractors, or
employees. Such indemnities shall include by way of example, but not
limitation, all costs, reasonable attorneys' fees, expenses and liabilities
incurred in or about any such claim, action or proceeding.
14. INSURANCE:
(a) Landlord agrees to carry and maintain the following
insurance during the term of this Lease and any extension hereof: fire and
extended coverage and general public liability insurance against claims for
personal injury, including death and property damage in or about the Premises
and the Building or the Building Complex (excluding Tenant's Property), such
insurance to be in amounts sufficient to provide reasonable protection for
the Building Complex. Such insurance may expressly exclude property paid for
by tenants or paid for by Landlord for which tenants have reimbursed Landlord
located in or constituting a part of the Building or the Building Complex.
Such insurance shall afford coverage for damages resulting from (a) fire, (b)
perils covered by extended coverage insurance, and (c) explosion of steam and
pressure boilers and similar apparatus located in the Building or the
Building Complex. All such insurance shall be procured from a responsible
insurance company or companies authorized to do business in Colorado and may
be obtained by Landlord by endorsement on its blanket insurance policies.
(b) Tenant shall procure and maintain at its own cost at
all times during the term of this Lease and any extensions hereof, hazard,
fire and extended coverage on Tenant's property and the contents of the
Premises, comprehensive general liability insurance, including coverage for
bodily injury, property damage, personal injury, products, host liquor legal
liability and broad form property damage with the following limits of
liability: One Million Dollars ($1,000,000.00) each occurrence combined
single limit for bodily injury, property damage and personal injury; One
Million Dollars ($1,000,000.00) aggregate for bodily injury and property
damage and for products liability. All such insurance shall be procured from
a responsible insurance company or companies authorized to do business in
Colorado, and shall be otherwise satisfactory to Landlord. All such policies
shall name Landlord as an additional insured, and shall provide that the same
may not be canceled or materially altered except upon thirty (30) days prior
written notice to Landlord. All insurance maintained by Tenant shall be
primary to any insurance provided by Landlord. If Tenant obtains any general
liability insurance policy on a claims-made basis, Tenant shall provide
continuous liability coverage for claims arising during the entire term of
this Lease, regardless of when
<PAGE>
such claims are made, either by obtaining an endorsement providing for an
unlimited extended reporting period in the event such policy is canceled or
not renewed for any reason whatsoever or by obtaining new coverage with a
retroactive date the same as or earlier than the expiration date of the
canceled or expired policy. Tenant shall provide certificate(s) of such
insurance to Landlord upon commencement of the Lease term and at least thirty
(30) days prior to any annual renewal date thereof and upon request from time
to time and such certificate(s) shall disclose that such insurance names
Landlord as an additional insured, in addition to the other requirements set
forth herein. The limits of such insurance shall not, under any
circumstances, limit the liability of Tenant hereunder.
(c) Each party agrees to use its best efforts to include in
each of its policies insuring against loss, damage or destruction by fire or
other casualty a waiver of the insurer's right of subrogation against the
other party, or if such waiver should be unobtainable or unenforceable (i) an
express agreement that such policy shall not be invalidated if the insured
waives the right of recovery against any party responsible for a casualty
covered by the policy before the casualty; or (ii) any other form of
permission for the release of the other party. If such waiver, agreement or
permission shall not be, or shall cease to be, obtainable without additional
charge or at all, the insured party shall so notify the other party promptly
after learning thereof. In such case, if the other party shall so elect and
shall pay the insurer's additional charge therefor, such waiver, agreement or
permission shall be included in the policy, or the other party shall be named
as an additional insured in the policy. Each such policy which shall so name
a party hereto as an additional insured shall contain, if obtainable,
agreements by the insurer that the policy will not be canceled without at
least thirty (30) days prior notice to both insureds and that the act or
omission of one insured will not invalidate the policy as to the other
insured. Any failure by either party, if named as an additional insured,
promptly to endorse to the order of the other party, without recourse, any
instrument for the payment of money under or with respect to the policy of
which the other party is the owner or original or primary insured, shall be
deemed a default under this Lease.
(d) Each party hereby releases the other party with respect
to any claim (including a claim for negligence) which it might otherwise have
against the other party for loss, damage or destruction with respect to its
property (including the Building, Building Complex, the Premises and rental
value or business interruption) occurring during the term of this Lease to
the extent to which it is insured under a policy or policies containing a
waiver of subrogation or permission to release liability or naming the above
party as an additional insured as provided above.
15. DAMAGE OR DESTRUCTION TO BUILDING:
(a) In the event that the Premises or the Building are
damaged by fire or other insured casualty and the insurance proceeds have
been made available therefor by the holder or holders of any mortgages or
deeds of trust covering the Building, the damage shall be repaired by and at
the expense of Landlord to the extent of such insurance proceeds are
available therefor, provided such repairs and restoration can, in Landlord's
reasonable opinion, be made within one hundred fifty (150) days after the
occurrence of such damage without the payment of overtime or
<PAGE>
other premiums, and until such repairs and restoration are completed, the
Base Rent shall be abated in proportion to the part of the Premises which is
unusable by Tenant in the conduct of its business, as may be reasonably
determined by Landlord, (but there shall be no abatement of Base Rent by
reason of any portion of the Premises being unusable for a period equal to
one day or less). Landlord agrees to notify Tenant within forty-five (45)
days after such casualty if it estimates that it will be unable to repair and
restore the Premises within said one hundred fifty (150) day period. Such
notice shall set forth the approximate length of time Landlord estimates will
be required to complete such repairs and restoration. Notwithstanding
anything to the contrary contained herein, if Landlord cannot or estimates it
cannot make such repairs and restoration within said one hundred fifty (150)
day period or fails to do complete such repairs and restoration within said
150-day period, then Tenant may, by written notice to Landlord, cancel this
Lease, provided such notice is given to Landlord within fifteen (15) days
after Landlord notifies Tenant of the estimated time for completion of such
repairs and restoration, or within 15 days following the expiration of said
150-day period, as the case may be. Notwithstanding the preceding sentence,
Tenant may not cancel this Lease as hereinabove stated if the damage to the
Premises or the Building is in whole or in part the result of the act,
omission, fault or negligence of Tenant, its agents, contractors, employees,
licensees or invitees. Except as provided in this Paragraph 15, there shall
be no abatement of rent and no liability of Landlord by reason of any injury
to or interference with Tenant's business or property arising from the making
of any such repairs, alterations or improvements in or to the Building,
Premises or fixtures, appurtenances and equipment. Tenant understands that
Landlord will not carry insurance of any kind on Tenant's Property, including
furniture and furnishings, or on any fixtures or equipment removable by
Tenant under the provisions of this Lease, or any improvement installed in
the Premises by or on behalf of Tenant, and that Landlord shall not be
obligated to repair any damage thereto or replace the same.
(b) In case the Building throughout shall be so injured or
damaged, whether by fire or otherwise (though the Premises may not be
affected, or if affected, can be repaired within said 150 days) that
Landlord, within sixty (60) days after the happening of such injury, shall
decide not to reconstruct or rebuild the Building, then notwithstanding
anything contained herein to the contrary, upon notice in writing to that
effect given by Landlord to Tenant within said sixty (60) days, Tenant shall
pay the rent, properly apportioned up to date of such casualty, this Lease
shall terminate from the date of delivery of said written notice, and both
parties hereto shall be released and discharged from all further obligations
hereunder (except those obligations which expressly survive termination of
the Lease term). A total destruction of the Building shall automatically
terminate this Lease.
16. CONDEMNATION:
(a) If the whole of the Premises or so much thereof as to
render the balance unusable by Tenant for the proper conduct of its business (in
the reasonable opinion of Tenant) shall be taken under power of eminent domain
or transferred under threat thereof, then this Lease, at the option of either
Landlord or Tenant exercised by either party giving notice to the other of such
election within thirty (30) days after such conveyance or taking possession,
whichever is earlier, shall forthwith cease and terminate and the rent shall be
duly apportioned as of the date of such taking or
<PAGE>
conveyance. No award for any partial or entire taking of the real property
and its fixtures which constitute part of the real property under the terms
of this Lease shall be apportioned and Tenant hereby assigns to Landlord any
award which may be made in such taking or condemnation, together with any and
all rights of Tenant now or hereafter arising in or to the same or any part
thereof. Notwithstanding the foregoing, Tenant shall be entitled to seek,
directly from the condemning authority, an award for its removable trade
fixtures, equipment and personal property and relocation expenses, if any, to
the extent Landlord's award is not diminished. In the event of a partial
taking which does not result in a termination of this Lease, Base Rent and
Additional Rent and other obligations hereunder shall be reduced in
proportion to the reduction in the size of the Premises so taken and this
Lease shall be modified accordingly. Promptly after obtaining knowledge
thereof, Landlord or Tenant, as the case may be, shall notify the other of
any pending or threatened condemnation or taking affecting the Premises or
the Building.
(b) If all or any portion of the Premises shall be
condemned or taken for governmental occupancy for a limited period, this
Lease shall not terminate and Landlord shall be entitled to receive the
entire amount of any such award or payment thereof as damages, rent or
otherwise. Tenant hereby assigns to Landlord any award which may be made in
such temporary taking, together with any and all rights of Tenant now or
hereafter arising in or to the same or any part thereof. Tenant shall be
entitled to receive an abatement of Base Rent and Additional Rent and other
rental obligations hereunder during the period of time possession is taken
and in proportion to the reduction in the size of the Premises so taken.
17. ASSIGNMENT AND SUBLETTING:
(a) Except as expressly provided in this Paragraph 17,
Tenant shall not, voluntarity, involuntarily or otherwise, sublet all or any
portion of the Premises or assign all or any portion of Tenant's rights under
this Lease or permit any part of the Premises to be used or occupied by any
persons other than Tenant and its employees, nor shall Tenant permit any part
of the Premises to be used or occupied by any licensee or concessionaire or
permit any persons other than Tenant, its employees and invitees, to be upon
the Premises. Tenant shall not voluntarily, by operation of law, or
otherwise, assign, transfer or encumber this Lease or any interest herein nor
sublet or part with possession of all or any part of the Premises (any and
all of which shall hereinafter be referred to as "Transfer") without
Landlord's prior written consent, which consent shall not be unreasonably
withheld or delayed.
Landlord shall be under no obligation to consent to any sublease,
transfer or assignment if: (i) Tenant is then in default of any term or
condition of this Lease or (ii) any event has occurred which, with the giving
of notice, the passage of time, or both would constitute a default hereunder.
No such sublease or assignment shall relieve Tenant of its
obligations hereunder, except as expressly provided for in this Paragraph 17.
Any Transfer without the prior written consent of Landlord shall
constitute a
<PAGE>
default hereunder and shall be void AB INITIO and shall confer no rights upon
any third party, notwithstanding Landlord's acceptance of rent payments from
any purported transferee.
Tenant may, without Landlord's consent being first required, assign
this Lease or sublet all or any portion of the Premises to a wholly owned
subsidiary of Tenant, to a corporate parent of Tenant owning a majority of
the issued and outstanding common stock of Tenant, or to a corporation the
majority of whose stock is held by a corporate parent of Tenant. No such
assignment or subletting shall relieve Tenant of its obligations hereunder.
Landlord's consent to any requested assignment of this Lease or
subletting of all or any part of the Premises (other than those expressly
permitted in the preceding paragraph) shall be subject to the following
conditions:
(1) such consent and resulting subletting or
assignment shall not relieve Tenant of its primary obligations hereunder,
including the obligation for payment of all rents due hereunder;
(2) Should Tenant default of the payment of Rent
or Additional Rent hereunder, Landlord, at its option and from time to time,
may collect the rent from the subtenant or assignee, and apply the net amount
collected to the rent herein reserved, but no such collection shall be deemed
an acceptance by Landlord of the subtenant or assignee as the tenant hereof,
or a release of Tenant from further performance of covenants on the part of
Tenant herein contained;
(3) any such subtenant or assignee shall be a
company or other entity of good repute, engaged in a business or profession
compatible with and in keeping with the then standards of the Building and
financially capable of performing its obligations with respect to the
Premises; and
(4) such subtenant or assignee shall assume and
agree to perform all of Tenant's obligations under this Lease insofar as they
pertain to the space so sublet or assigned.
(5) Tenant is not in default of any term or
condition of this Lease at the time it requests Landlord's consent.
(b) In the event of any Transfer of this Lease or all or
any part of the Premises by Tenant without Landlord's consent (other than
those expressly permitted above), Landlord in addition to any rights
contained herein, shall have the following options at its reasonable
discretion:
(1) To collect and receive the excess of rent due
to Tenant from such sublessee or assignee over the Base Rent due hereunder;
(2) To give Tenant written notice of Landlord's
intention to terminate this Lease on the date such notice is given or on any
later date specified therein, whereupon, on the date specified in such
notice, Tenant's right to possession
<PAGE>
of the Premises shall cease and this Lease shall thereupon be terminated,
except as to any uncompleted obligations of Tenant; or
(3) To re-enter and take possession of the
Premises or the part thereof subject to such Transfer, and to enforce all
rights of Tenant, and receive and collect all rents and other payments due to
Tenant, in accordance with such sublet or assignment of the Premises, or any
part thereof, as if Landlord was the sublettor or assignor, and to do
whatever Tenant is permitted to do pursuant to the terms of such sublease or
assignment.
(c) The sale of all or a majority of the stock of Tenant,
or the sale of all or substantially all of the assets of Tenant shall
constitute a Transfer for purposes of this Lease, unless such sale is to a
"Permitted Transferee." A Permitted Transferee is any entity that (i) has a
tangible net worth of not less that $15,000,000, (ii) has cash or cash
equivalents of not less than $5,000,000, (iii) whose total liabilities to
tangible net worth do not exceed 1/5 to 1, and (iv) agrees in writing to
honor each of the provisions of this Lease. Without limiting the generality
of the foregoing and notwithstanding any other provisions of this Lease, no
consent shall be required for, and no default shall occur as a result of: (i)
the transfer of all or more than a majority of the capital stock of Tenant to
any Permitted Transferee, or the transfer of all or substantially all of the
assets of Tenant to any Permitted Transferee, or (ii) the assignment of this
Lease to any Permitted Transferee who becomes the holder of all or more than
a majority of the capital stock of Tenant or all or substantially all of the
assets of Tenant.
(d) At the time of making a request for Landlord's consent
to a Transfer and not less than thirty (30) days prior to the proposed
effective date thereof, Tenant shall provide to Landlord such information as
Landlord, its accountants and attorneys, shall reasonably require with
respect to such proposed Transfer, including but not limited to name and
address of the proposed transferee, description of business operations,
financial information and certificate of corporate authority and good
standing or partnership certificate, as applicable.
(e) Consent of Landlord to a Transfer shall not relieve
Tenant from seeking consent to any subsequent Transfers.
(f) Subletting or assignments of a sublease by subtenants
shall not be permitted under any circumstances. Further, no option to renew
or extend the term of this Lease or to lease additional space, if any, shall
be exercisable by any subtenant. If Tenant obtains Landlord's consent to an
assigment of this Lease, the assignee shall be entitled to sublease and
further assign this Lease and to exercise the Tenant's rights to renew or
extend the term of this Lease or to lease additional space, all as provided
herein and subject to the terms and conditions as herein prescribed.
(g) All subleases or assignments shall be in writing and a
copy thereof provided to Landlord within ten (10) days of its effective date.
All subleases shall further contain an express provision that in the event of
any default by Tenant in the payment of rent or additional rent due hereunder
and upon notice thereof to the Tenant and subtenant from Landlord, all
rentals payable by the subtenant shall be paid directly to Landlord, for the
Tenant's account, until subsequent notice from Landlord that such
<PAGE>
default has been cured. Notwithstanding the foregoing, receipt by Landlord of
rent directly from the subtenant shall not be considered a waiver of the
default on the part of Tenant, nor an acceptance of such subtenant.
18. ESTOPPEL CERTIFICATE: Landlord and Tenant agree that, at any
time and from time to time, on or before five (5) days after written request
by the other party, to execute, acknowledge and deliver to the requesting
party and the requesting party's lender or purchaser an estoppel certificate
certifying (to the extent it believes the same to be true) that this Lease is
unmodified and in full force and effect (or if there have been modifications,
that the same is in full force and effect as modified, and stating the
modifications), that there have been no defaults thereunder by Landlord or
Tenant (or if there have been defaults, setting forth the nature thereof),
the date to which the rent and other charges have been paid, if any, that
Tenant claims no present charge, lien, claim or offset against rent, the rent
is not prepaid for more than one month in advance and such other matters as
may be reasonably required by the requesting party, its lender or mortgagee,
or any potential purchaser of the Building or Tenant's leasehold estate, it
being intended that any such statement delivered pursuant to this Paragraph
may be relied upon by any prospective purchaser of all or any portion of
Landlord's interest herein, or a holder of any mortgage or deed of trust
encumbering any portion of the Building Complex or the leasehold estate of
Tenant. Landlord's or Tenant's failure or refusal to deliver such statement
within such time shall be a default under this Lease. Notwithstanding the
foregoing, in the event that Tenant does not execute the statement required
by this Paragraph within 10 business days of written request, then, so long
as such failure or delay is not due to Tenant's refusal to include additional
matters that are not reasonable, or the requesting party's refusal to permit
disclosure by Tenant of exceptions to such statement, Tenant hereby grants to
Landlord a power of attorney coupled with an interest to act as Tenant's
attorney in fact for the purpose of executing such statement or statements
required by this Paragraph. Such power of attorney shall not grant Landlord
the right to execute a statement that includes any matters that are not
expressly covered in this Paragraph or that does not include any exceptions
that may have been raised by Tenant or of which Landlord is aware.
19. DEFAULT:
(a) The following events (herein referred to as an "event
of default") shall constitute a default by Tenant hereunder;
(1) Tenant shall fail to pay when due any
installment of Base Rent, Additional Rent or any other amounts payable
hereunder;
(2) This Lease or the estate of Tenant hereunder
shall be transferred to or shall pass to or devolve upon any other person or
party in violation of the provisions of this Lease;
(3) This Lease or the Premises or any part thereof
shall be taken upon execution or by other process of law directed against
Tenant, or shall be taken upon or subject to any attachment at the instance
of any creditor or claimant against Tenant, and said attachment shall not be
discharged or disposed of within forty-five (45) days after the levy thereof;
<PAGE>
(4) Tenant shall file a petition in bankruptcy or
insolvency or for reorganization or arrangement under the bankruptcy laws of
the United States or under any insolvency act of any state, or shall
voluntarily take advantage of any such law or act by answer or otherwise, or
shall be dissolved or shall make an assignment for the benefit of creditors;
(5) Involuntary proceedings under any such
bankruptcy law or insolvency act or for the dissolution of Tenant shall be
instituted against Tenant, or a receiver or trustee shall be appointed of all
or substantially all of the property of Tenant, and such proceedings shall
not be dismissed or such receivership or trusteeship vacated within thirty
(30) days after such institution or appointment;
(6) Tenant shall abandon or permanently vacate the
Premises for ten (10) consecutive days while in default in the payent of rent
or additional rent due hereunder;
(7) Tenant shall fail to perform any of the other
agreements, terms, covenants or conditions hereof on Tenant's part to be
performed, and such nonperformance shall continue for a period of fifteen
(15) days after notice thereof by Landlord to Tenant; provided, however, that
if Tenant cannot reasonably cure such nonperformance within fifteen (15)
days, Tenant shall not be in default if it commences cure within said fifteen
(15) days and diligently pursues the same to completion, with completion
occurring in all instances within sixty (60) days;
(8) Tenant shall fail to obtain a release of any
mechanic's lien, as required herein;
(9) All or any part of the personal property of
Tenant is seized, subject to levy or attachment, or similarly repossessed or
removed from the Premises and Tenant is consequently unable to conduct its
business operations from the Premises.
(b) Upon the occurrence of an event of default, Landlord
shall have the right, at its election, then or at any time thereafter and
while any such event of default shall continue, either:
(1) To give Tenant written notice of Landlord's
intention to terminate this Lease on the date such notice is given or on any
later date specified herein, whereupon, on the date specified in such notice,
Tenant's right to possession of the Premises shall cease and this Lease shall
thereupon be terminated; PROVIDED, HOWEVER, all of Tenant's obligations,
including, but not limited to, repayment of the Tenant Build-Out Allowance
paid by Landlord on behalf of Tenant pursuant to the terms of the Work Letter
Agreement executed by Landlord and Tenant in the form attached hereto as
EXHIBIT D, with interest at the rate of 18% per annum, compounded annually,
<PAGE>
computed from the date(s) of payment by Landlord (such sum with interest
hereinafter referred to as the "Allowance Recovery") and the amount of Base
Rent and other obligations reserved in this Lease for the balance of the term
hereof, shall immediately be accelerated and due and payable in the manner
and to the extent provided in paragraph 19(d), below.
(2) To re-enter and take possession of the
Premises or any part thereof and repossess the same as Landlord's former
estate and expel Tenant and those claiming through or under Tenant, and
remove the effects of both or either, using such force for such purposes as
may be reasonably necessary, without being liable for prosecution thereof,
without being deemed guilty of any manner of trespass and without prejudice
to any remedies for arrears of rent or preceding breach of covenants or
conditions; PROVIDED, HOWEVER, any such action shall be in compliance with
the provisions of Article 40 of Title 13, Colorado Revised Statutes. Should
Landlord elect to re-enter the Premises as provided in this Paragraph
19(b)(2) or should Landlord take possession pursuant to legal proceedings or
pursuant to any notice provided for by law, Landlord may, from time to time,
without terminating this Lease, relet the Premises or any part thereof, in
Landlord's or Tenant's name, but for the account of Tenant, for such term or
terms (which may be greater or less than the period which would otherwise
have constituted the balance of the term of this Lease) and on such
conditions and upon such other terms (which may include concessions of free
rent and alteration and repair of the Premises) as Landlord, in its
discretion, may determine, and Landlord may collect and receive the rents
therefor. Landlord shall use commercially reasonable efforts to relet the
Premises or any part thereof. No such re-entry or taking possession of the
Premises by Landlord shall be construed as an election on Landlord's part to
terminate this Lease unless a written notice of such intention be given to
Tenant. No notice from Landlord hereunder or under a forcible entry and
detainer statute or similar law shall constitute an election by Landlord to
terminate this Lease unless such notice specifically so states. Landlord
reserves the right following any such re-entry and/or reletting, to exercise
its right to terminate this Lease by giving Tenant such written notice, in
which event, this Lease will terminate as specified in said notice.
(c) In the event that Landlord does not elect to terminate
this Lease as permitted in Paragraph 19(b)(1) hereof, but on the contrary,
elects to take possession as provided in Paragraph 19(b)(2), Tenant shall pay
to Landlord (i) the rent and other sums as herein provided, which would be
payable hereunder if such repossession had not occurred, plus (ii) the amount
of the Allowance Recovery, less (iii) the net proceeds, if any, of any
reletting of the Premises after deducting all Landlord's expenses in
connection with such reletting, including but without limitation, all
repossession costs, brokerage commissions, legal expenses, reasonable
attorneys' fees, expenses of employees, alteration and repair costs and
expenses of preparation for such reletting. If, in connection with any
reletting, the new lease term extends beyond the existing term, or the
premises covered thereby include other premises not part of the Premises, a
fair apportionment of the rent received from such reletting and the expenses
incurred in connection therewith as provided aforesaid will be made in
determining the net proceeds from such reletting. Tenant shall pay such rent
and other sums to Landlord monthly on the days on which the rent would have
been payable hereunder if possession had not been retaken.
<PAGE>
(d) In the event this Lease is terminated pursuant to
Paragraph 19(b)(1) hereof, Landlord shall be entitled to recover forthwith
against Tenant as damages for loss of the bargain and not as a penalty, an
aggregate sum which, at the time of such termination of this Lease,
represents the excess, if any, of the aggregate of the rent and all other
sums payable by Tenant hereunder that would have accrued for the balance of
the term over the aggregate rental value of the Premises (such rental value
to be computed on the basis of a tenant paying not only a rent to Landlord
for the use and occupation of the Premises, but also such other charges as
are required to be paid by Tenant under the terms of this Lease) for the
balance of such term, both discounted to present worth at the rate of eight
percent (8%) per annum, plus the amount of the Allowance Recovery.
Alternatively, at Landlord's option, Tenant shall pay to Landlord upon demand
the amount of the Allowance Recovery, and Tenant shall remain liable to
Landlord for damages in an amount equal to the rent and other sums arising
under the Lease for the balance of the term had the Lease not been
terminated, less the net proceeds, if any, from any subsequent reletting,
after deducting all expenses associated therewith and as enumerated above.
Landlord shall be entitled to receipt of such amounts from Tenant monthly on
the days on which such sums would have otherwise been payable.
(e) Suit or suits for the recovery of the amounts and
damages set forth above may be brought by Landlord, from time to time, at
Landlord's election and nothing herein shall be deemed to require Landlord to
await the date whereon this Lease or the term hereof would have expired had
there been no such default by Tenant or no such termination, as the case may
be.
(f) After an event of default by Tenant, Landlord may sue
for or otherwise collect all rents, issues and profits payable under all
subleases on the Premises including those past due and unpaid.
(g) After an event of default by Tenant, Landlord may,
without terminating this Lease, enter upon the Premises, with force if
necessary without being liable for prosecution of any claim for damages,
without being deemed guilty of any manner of trespass and without prejudice
to any other remedies, and do whatever Tenant is obligated to do under the
terms of this Lease. Tenant agrees to reimburse Landlord on demand for any
expenses which Landlord may incur in effecting compliance with the Tenant's
obligations under this Lease; further, Tenant agrees that Landlord shall not
be liable for any damages resulting to Tenant from effecting compliance with
Tenant's obligations under this subparagraph caused by the negligence of
Landlord.
(h) No failure by Landlord to insist upon the strict
performance of any agreement, term, covenant or condition hereof or to
exercise any right or remedy consequent upon a breach thereof, and no
acceptance of full or partial rent during the continuance of any such breach,
shall constitute a waiver of any such breach of such agreement, term,
covenant or condition. No agreement, term, covenant or condition hereof to be
performed or complied with by Tenant, and no breach thereof, shall be waived,
altered or modified except by written instrument executed by Landlord. No
waiver of any breach shall affect or alter this Lease, but each and every
agreement, term, covenant and condition hereof shall continue in full force
and effect with respect
<PAGE>
to any other then existing or subsequent breach thereof. Notwithstanding any
unilateral termination of this Lease, this Lease shall continue in force and
effect as to any provisions hereof which require observance or performance of
Landlord or Tenant subsequent to termination.
(i) Nothing contained in this Paragraph shall limit or
prejudice the right of Landlord to prove and obtain as liquidated damages in
any bankruptcy, insolvency, receivership, reorganization or dissolution
proceeding, an amount equal to the maximum allowed by any statute or rule of
law governing such proceeding and in effect at the time when such damages are
to be proved, whether or not such amount be greater, equal to or less than
the amounts recoverable, either as damages or rent, referred to in any of the
preceding provisions of this Paragraph.
(j) Any rents or other amounts owing to Landlord hereunder
which are not paid within ten (10) days of the date they are due, shall
thereafter bear interest from the due date at the rate of eighteen percent
(18%) per annum ("Interest Rate") until paid. Similarly, any amounts paid by
Landlord to cure any default of Tenant or to perform any obligation of
Tenant, shall, if not repaid by the Tenant within five (5) days of demand by
Landlord, thereafter bear interest from the date paid by Landlord at the
Interest Rate until paid. In addition to the foregoing, Tenant shall pay to
Landlord whenever any Base Rent, Additional Rent or any other sums due
hereunder remain unpaid more than ten (10) days after the due date thereof, a
late charge equal to five percent (5%) of the amount due.
(k) Each right and remedy provided for in this Lease shall
be cumulative and shall be in addition to every other right or remedy
provided for in this Lease now or hereafter existing at law or in equity or
of statute or otherwise, including, but not limited to, suits for injunctive
or declaratory relief and specific performance. The exercise or commencement
of the exercise by either party of any one or more of the rights or remedies
provided for in this Lease now or hereafter existing at law or in equity or
by statute or otherwise shall not preclude the simultaneous or subsequent
exercise by said party of any or all other rights or remedies provided for in
this Lease, or now or hereafter existing at law or in equity or by statute or
otherwise. All costs incurred by either party in connection with collecting
any amounts and damages owing by the other party pursuant to the provisions
of this Lease or to enforce any provision of this Lease, including, by way of
example, but not limitation, reasonable attorneys' fees from the date any
such matter is turned over to an attorney, shall also be recoverable by the
prevailing party. Landlord and Tenant agree that any action or proceeding
arising out of this Lease shall be heard by a court sitting without a jury
and thus hereby waive all rights to a trial by jury.
20. COMPLETION OF PREMISES:
(a) Landlord and Tenant have yet to agree on which of the
parties is to be responsible for construction of the tenant improvements to
the Premises as more fully set forth in the work letter ("Work Letter")
attached hereto and incorporated herein as EXHIBIT D.
(1) Should Tenant be the Contracting Party, as
defined in Exhibit D, the "Commencement Date" as used herein, and the
obligation of Tenant to
<PAGE>
commence the payment of rent and additional rent hereunder, shall be March 1,
2000, subject only to the deferral of such date by the number of days, if
any, which Landlord fails or refuses to approve plans, specifications,
contractors, bonds, insurance coverages, or the like, beyond the number of
day alloted for such approvals in Exhibit D.
(2) Should Landlord be the Contracting Party, as
defined in Exhibit D, the "Commencement Date" as used herein, and the
obligation of Tenant to commence the payment of rent and additional rent
hereunder, shall be March 1, 2000, subject only to the deferral of such date
as a result of delays in construction of the tenant improvements that were
within Landlord's control. Matters within Landlord's control shall include
delays caused by the contractor constructing such improvements, but shall not
include delays resulting from protracted negotiations of the terms of this
Lease or delays caused by Tenant's review of plans and specifications or in
negotiating costs, or delays by the City of Boulder in issuing permits. If
there are delays within Landlord's control, the Commencement Date shall be
deferred beyond March 1, 2000, by the number of days of delay caused by
Landlord.
(b) Other than as set forth in the Work Letter, Landlord shall have
no obligation for the completion of the Premises, and Tenant shall accept the
Premises in its "as is" condition on the Commencement Date.
(c) Subsequent to the Commencement Date, Landlord shall not have any
obligation for the repair or replacement of any portions of the interior of
the Premises, including, but not limited to, carpeting, draperies, window
coverings, wall coverings or painting, which are damaged or wear out during
the term hereof, regardless of the cause therefor, except as may otherwise be
specifically set forth in this Lease.
(d) If Landlord is the Contracting Party, and if Tenant wishes to
complete improvements to the interior of the Premises prior to the
Commencement Date, Tenant may do so, at Tenant's sole risk and with no
obligation to pay rent provided that (i) Tenant has delivered to Landlord
written evidence that Tenant's insurance obligations under Paragraph 14
hereof are then met, (ii) such entry and work do not unreasonably interfere
in any way with the performance of Landlord's work or other workers in and
about the Building, and (iii) such entry and work comply in all respects with
the provisions of this Lease. At any time during such period of early entry,
if Landlord notifies Tenant that Tenant's entry or work is interfering with
or delaying the performance of work to be performed by Landlord or other
workers in and about the Building, or causing any disruption whatsoever,
Tenant shall forthwith discontinue any further work and shall vacate the
Premises, and shall cause its workmen or contractors to remove therefrom, any
equipment, materials or installations which are the subject of Landlord's
notice.
21. REMOVAL OF TENANT'S PROPERTY: All movable furniture and personal
effects of Tenant not removed from the Premises upon the vacation or
abandonment thereof coupled with non-payment of Base Rent or upon the
termination of this Lease for any cause whatsoever shall conclusively be
deemed to have been abandoned and may be appropriated, sold, stored,
destroyed or otherwise disposed of by Landlord without notice to Tenant and
without obligation to account therefor, and Tenant shall reimburse Landlord
for all expenses incurred in connection with the disposition of such property.
<PAGE>
22. HOLDING OVER: Should Tenant, with Landlord's written consent,
hold over after the termination of this Lease and continue to pay rent,
Tenant shall become a tenant from month to month only upon each and all of
the terms herein provided as may be applicable to such month to month tenancy
and any such holding over shall not constitute an extension of this Lease.
During such holding over, Tenant shall pay monthly rent equal to the last
monthly rental rate and the other monetary charges as provided herein. Such
tenancy shall continue until terminated by Landlord, as provided by law, or
until Tenant shall have given to Landlord at least thirty (30) days written
notice prior to the last day of the calendar month intended as the date of
termination of such month to month tenancy.
23. PARKING AND COMMON AREAS: Tenant shall have the non-exclusive
use of parking areas within the Building Complex. Landlord shall have the
right, without obligation, and from time to time, to change the number, size,
location, shape and arrangement of parking areas and other common areas,
restrict parking of tenants or their guests to designated areas, designate
loading or handicap loading areas, and to change the level or grade of
parking; PROVIDED, HOWEVER, that Landlord shall at all times during the term
of this Lease maintain a parking ratio of 1 parking space per 400 square feet
of rentable floor space, considering all parking spaces available and all
rentable square footage in the Building Complex and in the complex at 2905,
2945, and 2995 Center Green Court South. Except as otherwise specifically
provided herein, all access roads, courtyards, and other areas, facilities or
improvements furnished by Landlord are for the general and nonexclusive use
in common of all tenants of the Building, and those persons invited upon the
land upon which the Building is situated and shall be subject to the
exclusive control and management of Landlord, and Landlord shall have the
right, without obligation to establish, modify and enforce such rules and
regulations which the Landlord may deem reasonable and/or necessary. Unless
as otherwise provided, Tenant's use of the parking area, as herein set forth,
shall be in common with other tenants of the Building and any other parties
permitted by Landlord to use the parking area. The parking rights herein
granted shall not be deemed a lease but shall be construed as a license
granted by Landlord to Tenant for the term of this Lease.
24. SURRENDER AND NOTICE: Upon the expiration or earlier termination
of this Lease, Tenant shall promptly quit and surrender to Landlord the
Premises broom clean, in good order and condition, ordinary wear and tear and
loss by fire or other casualty excepted, and Tenant shall remove all of its
movable furniture and other effects and such alterations, additions and
improvements as Landlord shall require Tenant to remove pursuant to Paragraph
10 hereof. In the event Tenant fails to so vacate the Premises on a timely
basis as required, Tenant shall be responsible to Landlord for all costs and
damages, including, but not limited to, any amounts required to be paid to
third parties who were to have occupied the Premises, incurred by Landlord as
a result of such failure, plus interest thereon at the Interest Rate on all
amounts not paid by Tenant within five (5) days of demand, until paid in full.
25. ACCEPTANCE OF PREMISES BY TENANT: Taking possession of the
Premises by Tenant shall be conclusive evidence as against Tenant that the
Premises were in the condition agreed upon between Landlord and Tenant, and
acknowledgment of satisfactory completion of the fix-up work which Landlord
has agreed in writing to
<PAGE>
perform, except as otherwise set forth herein.
26. SUBORDINATION AND ATTORNMENT:
(a) This Lease, and all rights of Tenant hereunder, are and
shall be subject and subordinate in all respects to all deeds of trust,
mortgages and building loan agreements, including leasehold mortgages and
building loan agreements, which may now or hereafter affect the Building or
the Building Complex, whether or not such deeds of trust or mortgages shall
also cover other lands or buildings, to each and every advance made or
hereafter to be made under such deeds of trust or mortgages, and to all
renewals, modifications, replacements and extensions of such deeds of trust
and mortgages. The provisions of this Paragraph shall be self-operative and
no further instrument of subordination shall be required. However, in
confirmation of such subordination, Tenant shall promptly execute and deliver
to Landlord (or such other party so designated by Landlord) at Tenant's own
cost and expense, within fifteen (15) days after request from Landlord an
instrument, in recordable form if required, that Landlord or the holder of
any such deed of trust or mortgage or any of their respective successors in
interest or assigns may request evidencing such subordination. Failure by
Tenant to comply with the requirements of this Paragraph shall be a default
hereunder. Notwithstanding the foregoing, in the event that Tenant fails to
execute such documents as may be required to confirm the subordination set
forth in this Paragraph, then, so long as such failure or delay is not due to
Tenant's refusal to execute docuuments that contain unreasonable terms or
conditions beyond what is required by this Paragraph, or the requesting
party's refusal to accept reasonable changes to such documents that will not
diminish the subordination granted by this Paragraph, Tenant hereby grants to
Landlord a power of attorney coupled with an interest to act as Tenant's
attorney in fact for the purposes of executing such documents. Such power of
attorney shall not grant Landlord the right to execute documets that grant
rights or impose obligations beyond the subordination covered in this
Paragraph. The deeds of trust or mortgages to which this Lease is, at the
time referred to, subject and subordinate are hereinafter sometimes called
"superior deeds of trust" or "superior mortgages". The beneficiary of a
superior deed of trust or superior mortgage or their successors in interest
or assigns are hereinafter sometimes collectively referred to as a "superior
party". The subordination provided by this Section 26 shall be subject to the
provision that, and any subordination entered into by Tenant after the date
of this Lease must contain a non-disturbance agreement in the form then being
used by such superior party for such purposes, providing that, in any case,
Tenant, notwithstanding such subordination or a default by Landlord, shall be
entitled to remain in possession of the Premises in accordance with the terms
of this Lease for so long as Tenant shall not be in default of any term,
condition or covenant of this Lease. Further, Tenant shall attorn to such
superior party.
(b) Tenant shall take no steps to terminate this Lease,
without giving written notice to such superior party, and a reasonable
opportunity to cure (without such superior party being obligated to cure),
any default on the part of Landlord under this Lease, provided Tenant shall
be obliged to notify only such superior parties of which Tenant has actual
knowledge by virtue of a prior written communication from Landlord or such
superior party.
<PAGE>
(c) If, in connection with the procurement, continuation or
renewal of any financing for which the Building or the Building Complex
represents collateral in whole or in part, a lender shall request reasonable
modifications of this Lease as a condition of such financing, Tenant will not
unreasonably withhold its consent thereto provided that such modifications do
not increase the obligations of Tenant under this Lease or adversely affect
any rights of Tenant or decrease the obligations of Landlord under this Lease.
27. PAYMENTS AFTER TERMINATION: No payments of money by Tenant to
Landlord after the termination of this Lease, in any manner, or after giving
of any notice (other than a demand for payment of money) by Landlord to
Tenant, shall reinstate, continue or extend the term of this Lease or affect
any notice given to Tenant prior to the payment of such money, it being
agreed that after the service of notice of the commencement of a suit or
other final judgment granting Landlord possession of the Premises, Landlord
may receive and collect any sums of rent due, or any other sums of money due
under the terms of this Lease or otherwise exercise its rights and remedies
hereunder. The payment of such sums of money, whether as rent or otherwise,
shall not waive said notice or in any manner affect any pending suit or
judgment theretofore obtained.
28. AUTHORITIES FOR ACTION AND NOTICE:
(a) Except as otherwise provided herein, Landlord may, for
any matter pertaining to this Lease, act by and through its building manager
or any other person designated in writing from time to time.
(b) All notices or demands required or permitted to be
given to Landlord hereunder shall be in writing, and shall be deemed duly
served when received, if hand delivered, or five (5) days after deposited in
the United States mail, with proper postage prepaid, certified or registered,
return receipt requested, addressed to Landlord in care of Hast & Company,
525 Canyon Boulevard, Boulder, Colorado 80302, with a copy to Joel C. Davis,
Dietze and Davis, P.C., 2060 Broadway, Suite 400, Boulder, Colorado 80302.
All notices or demands required to be given to Tenant hereunder shall be in
writing, and shall be deemed duly served when received, if hand delivered, or
five (5) days after deposited in the United States mail, with proper postage
prepaid, certified or registered, return receipt requested, addressed to
Tenant as follows:
Gilead Sciences, Inc.
333 Lakeside Drive
Foster City, CA 94404
ATTN: General Counsel
Either party shall have the right to designate in writing,
served as above provided, a different address to which notice is to be
provided. The foregoing shall in no event prohibit notice from being given as
provided in Rule 4 of the Colorado Rules of Civil Procedure, as the same may
be amended from time to time.
29. LIABILITY OF LANDLORD: Landlord's liability under this Lease
shall be limited to
<PAGE>
Landlord's estate and interest in the Building (or to the proceeds thereof)
and no other property or other assets of Landlord shall be subject to levy,
execution or other enforcement procedure for the satisfaction of Tenant's
remedies under or with respect to this Lease, the relationship of Landlord
and Tenant hereunder or Tenant's use and occupancy of the Premises. Nothing
contained in this Paragraph shall be construed to permit Tenant to offset
against rents due a successor landlord, a judgment (or other judicial
process) requiring the payment of money by reason of any default of a prior
landlord, except as otherwise specifically set forth herein.
30. BROKERAGE: Landlord and Tenant represent and warrant to each
other that they have dealt only with CRESA Partners and Key, Whiteside & Hart
and Hast and Company ("Brokers") in the negotiation of this Lease. Landlord
shall make payment of the brokerage fee due to the Brokers pursuant to and in
accordance with Landlord's separate agreement with Keys, Whiteside & Hart and
Hast and Company. In the event that any of Landlord's or Tenant's
representations and warranties made in this Paragraph 30 is untrue at any
time in any respect, each party hereby agrees to indemnify and hold the the
other harmless of and from any and all loss, costs, damages or expenses
(including, without limitation, all reasonable attorneys' fees and
disbursements) by reason of any claim of or liability to any other broker or
person claiming through the representing party arising out of or in
connection with the negotiation, execution and delivery of this Lease.
Additionally, Tenant acknowledges and agrees that Landlord shall have no
obligation for payment of any brokerage fee or similar compensation to any
person with whom Tenant has dealt or may in the future deal with respect to
leasing of any additional or expansion space in the Building or renewals or
extensions of this Lease, except as may be provided by Landlord's separate
written agreement. In the event any claim shall be made against either party
by any other broker who shall claim to have negotiated this Lease on behalf
of the other party or to have introduced the other party to the Building or
to the other party, the party who allegedly engaged such broker shall be
liable for payment of all reasonable attorneys' fees, costs and expenses
incurred by the other party in defending against the same, and in the event
such broker shall be successful in any such action, the party who allegedly
engaged such broker shall, in addition, make payment to such broker.
31. TAXES:
(a) Tenant shall be liable for and shall pay at least ten
(10) days before delinquency and Tenant hereby agrees to indemnify and hold
Landlord harmless from and against any liability in connection with, all
taxes levied against any personal property, fixtures, machinery, equipment,
apparatus, systems and appurtenances placed by or on behalf of Tenant in or
about or utilized by Tenant in, upon or in connection with the Premises
("Equipment Taxes"). If any Equipment Taxes are levied against Landlord or
Landlord's property or if the assessed value of Landlord's property is
increased by the inclusion therein of a value placed upon such personal
property, fixtures, machinery equipment, apparatus, systems or appurtenances
of Tenant, and if Landlord, after written notice to Tenant, pays the
Equipment Taxes or taxes based upon such an increased assessment (which
Landlord shall have the right to do regardless of the validity of such levy,
but under proper protest if requested by Tenant prior to such payment and if
payment under protest is permissible), Tenant shall pay to Landlord upon
demand, as Additional Rent hereunder, the taxes so levied against
<PAGE>
Landlord or the proportion of such taxes resulting from such increase in the
assessment; provided, however, that in any such event, Tenant shall have the
right, on behalf of Landlord and with Landlord's full cooperation, but at no
cost to Landlord, to bring suit in any court of competent jurisdiction to
recover the amount of any such tax so paid under protest, and any amount so
recovered shall belong to Tenant (provided Tenant has previously paid such
amount to Landlord). Notwithstanding the foregoing to the contrary, Tenant
shall cooperate with Landlord to the extent reasonably necessary to cause the
fixtures, furnishings, equipment and other personal property to be assessed
and billed separately from the real property of which the Premises form a
part, and Landlord shall use reasonable efforts to treat all other Tenants on
the same basis.
(b) Tenant shall pay to Landlord, as Additional Rent, any
excise, sales, privilege or other tax, assessment or other charge (other than
income or franchise taxes) imposed, assessed or levied by any governmental or
quasi-governmental authority or agency upon Landlord on account of this
Lease, the rent or other payments made by Tenant hereunder, any other benefit
received by Landlord hereunder, Landlord's business as a lessor hereunder, or
other in respect of or as a result of the agreement or relationship of
Landlord and Tenant hereunder.
32. RIGHTS RESERVED TO LANDLORD:
(a) Landlord shall have the following rights without
liability to Tenant for damage or injury to property, person or business (all
claims for damage being hereby waived and released), and without effecting an
eviction or disturbance of Tenant's use or possession of the Premises or
giving rise to any claim for setoffs or abatement of rent:
(1) To enter the Premises as more fully provided
in this Lease.
(2) To install and maintain signs on the exterior
of the Building in accordance with the terms of this Lease.
(3) To decorate, remodel, repair, alter or
otherwise prepare the Premises for reoccupancy during the last six (6) months
of the term hereof if, during or prior to such time, Tenant has vacated the
Premises, or at any time after Tenant abandons the Premises.
(4) To have access to all mail chutes according to
the rules of the United States Postal Service.
(5) To do or permit to be done any work in or
about the exterior of the Building or any adjacent or nearby building, land,
street or alley.
(6) To grant to anyone the exclusive right to
conduct any business or render any service in the Building, provided such
exclusive right shall not operate to interfere with Tenant's quiet enjoyment
of the Premises as granted in this
<PAGE>
Lease.
33. FORCE MAJEURE CLAUSE: Wherever there is provided in this Lease a
time limitation for performance by Landlord or Tenant of any obligation
including, but not limited to, obligations related to construction, repair,
maintenance or service, but excluding the payment by Tenant of any regularly
scheduled installment of rent or additional rent payable hereunder, the time
provided for shall be extended for as long as and to the extent that delay in
compliance with such limitation is due to an act of God, governmental control
or other factors beyond the reasonable control of the party to so perform.
34. SIGNAGE:
(a) No sign, advertisement or notice shall be inscribed,
painted or affixed on any part of the inside or outside of the Building
unless of such color, size and style and in such place upon or in the
Building as shall (i) comply with all applicable covenants, conditions, and
restrictions applicable to the Building and the rules and regulations of any
local authority with jurisdiction over the Building, and (ii) be approved in
writing by Landlord, which approval shall not be unreasonably withheld.
Landlord shall have the right to remove all nonpermitted signs without notice
to Tenant and at the expense of Tenant.
35. ATTORNEYS' FEES: In the event of any dispute hereunder, or any
default in the performance of any term or condition of this Lease, the
prevailing party shall be entitled to recover all costs and expenses
associated therewith including reasonable attorneys' fees.
36. BANKRUPTCY OR INSOLVENCY: If the Tenant becomes a debtor under
Chapter 7 of the United States Bankruptcy Code, or in the event that a
petition for reorganization or adjustment of debts is filed concerning the
Tenant under Chapter 11 or Chapter 13 of the Bankruptcy Code, or a proceeding
filed under Chapter 7 is transferred to Chapter 11 or 13, the Trustee or the
Tenant, as Debtor-in-Possession, shall be deemed to have rejected this Lease.
No election by the Trustee or Debtor-in-Possession to assume this Lease shall
be effective unless each of the following conditions, which Landlord and
Tenant hereby acknowledge to be commercially reasonable in the context of a
bankruptcy proceeding, has been satisfied, and the Landlord has so
acknowledged in writing:
(a) The Trustee or Debtor-in-Possession has cured, or has
provided the Landlord "adequate assurance" (as hereinafter defined) that from
the date of such assumption, the Trustee or Debtor-in-Possession will
promptly cure all monetary and non-monetary defaults under this Lease.
(b) The Trustee or Debtor-in-Possession has compensated, or
has provided to the Landlord adequate assurance that within ten (10) days of
the date of assumption, the Landlord will be compensated, for any pecuniary
loss incurred by the Landlord arising from default of the Tenant, the Trustee
or the Debtor-in-Possession as recited in the Landlord's written statement of
pecuniary loss sent to the Trustee or Debtor-in-Possession.
<PAGE>
(c) The Trustee or Debtor-in-Possession has provided the
Landlord with adequate assurance of future performance of each of the
Tenant's, the Trustee's, or Debtor-in-Possession's obligations under this
Lease; provided, however, that:
(1) The Trustee or Debtor-in-Possession shall also
deposit with the Landlord, as security for the timely payment of rent and
other sums due hereunder, an amount equal to three months Base Rent,
Additional Rent and other monetary charges accruing under this Lease; and
(2) The obligations imposed upon the Trustee or
Debtor-in-Possession shall continue with respect to the Tenant or any
assignee of this Lease after the completion of the bankruptcy proceedings.
(d) For purposes of this Paragraph, Landlord and Tenant
acknowledge that, in the context of the bankruptcy proceeding of the Tenant,
"adequate assurance" shall mean:
(1) The Trustee or Debtor-in-Possession will
continue to have sufficient unencumbered assets after the payment of all
secured obligations and administrative expenses to assure the Landlord that
the Trustee or Debtor-in-Possession will have sufficient funds to fulfill all
of the obligations of Tenant under this Lease, or
(2) The Bankruptcy Court shall have entered an
order segregating sufficient cash payable to the Landlord, and the Trustee or
Debtor-in-Possession shall have granted to the Landlord a valid and perfected
first lien and security interest or mortgage in property of the Tenant, the
Trustee or Debtor-in-Possession, acceptable as to value and kind to the
Landlord, in order to secure to the Landlord the obligation of the Tenant,
Trustee or Debtor-in-Possession to cure the monetary or non-monetary defaults
under the Lease within the time period set forth above.
(e) The following conditions shall apply to any assignment
of this Lease in Bankruptcy Proceedings:
(1) If the Trustee or Debtor-in-Possession has
assumed this Lease and elects to assign the Lease to any other person, such
interest or estate of Tenant in this Lease may be so assigned only if the
Landlord has acknowledged in writing that the intended assignee can provide
to the Landlord "adequate assurance of future performance" (as hereinafter
defined) of all of the terms, covenants and conditions of this Lease to be
performed by the Tenant.
(2) For the purposes of this provision, Landlord
and Tenant acknowledge that, in the context of a bankruptcy proceeding,
"adequate assurance of future performance" shall mean that each of the
following conditions has been satisfied or exceeded, and the Landlord has so
acknowledged in writing:
A. The proposed assignee has submitted a
current
<PAGE>
financial statement audited by a Certified Public Accountant which shows the
net worth and working capital and amounts determined by Landlord to be
sufficient to assure the future performance by such assignee of all of
Tenant's obligations under this Lease, or, if such financial statements are
deemed by the Landlord to be insufficient, that;
B. The proposed assignee shall have
obtained guarantees in form and substance satisfactory to the Landlord from
one or more persons who satisfy the Landlord's standards of creditworthiness;
and
C. The Landlord has obtained all consents
or waivers from any third party required under any lease, mortgage, financing
arrangements or other agreement by which the Landlord is bound, in order to
permit the Landlord to consent to such assignment.
37. MISCELLANEOUS:
(a) The rules and regulations attached hereto as EXHIBIT E,
as well as such rules and regulations as may hereafter be adopted by Landlord
for the safety, care and cleanliness of the Premises, the Building and the
Building Complex and the preservation of good order thereon, are hereby
expressly made a part hereof, and Tenant agrees to obey all such rules and
regulations. The violation of any of such rules and regulations by Tenant
shall be deemed a breach of this Lease by Tenant affording Landlord all the
remedies set forth herein. Landlord shall not be responsible to Tenant for
the nonperformance by any other tenant or occupant of the Building of any of
said rules and regulations.
(b) The term "Landlord" as used in this Lease, so far as
covenants or obligations on the part of Landlord are concerned, shall be
limited to mean and include only the owner or owners of the Building at the
time in question, and in the event of any transfer or transfers of the title
thereto, Landlord herein named (and in the case of any subsequent transfers
or conveyances, the then grantor) shall be automatically released from and
after the date of such transfer or conveyance of all liability in respect to
the performance of any covenants or obligations on the part of Landlord
contained in this Lease thereafter to be performed and relating to events
occurring thereafter; provided that the transferee has expressly agreed in
writing to assume all obligations of Landlord under this Lease; provided that
any funds in the hands of Landlord or the then grantor at the time of such
transfer in which Tenant has an interest shall be turned over to the grantee,
and any amount then due and payable to Tenant by Landlord or the then grantor
under any provisions of this Lease shall be paid to Tenant.
(c) This Lease shall be construed as though the covenants
herein between Landlord and Tenant are independent and not dependent and Tenant
shall not be entitled to any setoff of the rent or other amounts owing hereunder
against Landlord, and Landlord shall not be entitled to exercise any of its
remedies hereunder, if Landlord or Tenant as the case may be, fails to perform
its obligations set forth herein, except as herein specifically set forth;
provided, however, the foregoing shall in no way impair the right of either
party to commence a separate action against the other party for any violation by
a breaching party of the provisions hereof so long as notice is first given to
the breaching party and any holder of a mortgage or deed of trust covering the
Building
<PAGE>
Complex or any portion thereof whose address Tenant has been notified in
writing and so long as an opportunity has been granted to the breaching party
and such holder to correct such violation as provided in subparagraph (g)
hereof.
(d) If any clause or provision of this Lease is illegal,
invalid or unenforceable under present or future laws effective during the
term of this Lease, then and in that event, it is the intention of the
parties hereto that the remainder of this Lease shall not be affected
thereby, and it is also the intention of the parties to this Lease that in
lieu of each clause or provision of this Lease that is illegal, invalid or
unenforceable, there shall be added as a part of this Lease a clause or
provision as similar in terms to such illegal, invalid or unenforceable
clause or provision as may be possible and be legal, valid and enforceable,
provided such addition does not increase or decrease the obligations of or
derogate from the rights or powers of either Landlord or Tenant.
(e) The captions of each paragraph are added as a matter of
convenience only and shall be considered of no effect in the construction of
any provision or provisions of this Lease.
(f) Except as herein specifically set forth, all terms,
conditions and covenants to be observed and performed by the parties hereto
shall be applicable to and binding upon their respective heirs,
administrators, executors, successors and assigns. The terms, conditions and
covenants hereof shall also be considered to be covenants running with the
land.
(g) Except as otherwise specifically provided herein, in
the event either party shall fail to perform any of the agreements, terms,
covenants or conditions hereof on its part to be performed (such party being
referred to as the "Non-Performing Party"), and such nonperformance shall
continue for a period of thirty (30) days after written notice thereof from
the other party (the "Notifying Party") to the Non-Performing Party, or if
such performance cannot be reasonably had within such thirty (30) day period,
and the Non-Performing Party shall not in good faith have commenced such
performance within such thirty (30) day period and proceed therewith to
completion, it shall be considered a default of the Non-Performing Party
under this Lease. Notifying Party shall give written notice to the
Non-Performing Party in the matter herein set forth and shall afford the
Non-Performing Party a reasonable opportunity to cure any such default. In
addition, Tenant shall send notice of such default by certified or registered
mail, with proper postage prepaid, to the holder of any mortgages or deeds of
tru