EXHIBIT 2.4
LEASE
1. PARTIES. This Lease, dated, for reference purposes only, January 7,
2002 is made by and between EASTSIDE PROPERTIES, LLC (herein called "Landlord")
and COLORADO MEDTECH, INC. (herein called "Tenant").
2. PREMISES. Landlord does hereby lease to Tenant and Tenant hereby leases
from Landlord that certain industrial space (herein called "Premises") indicated
on Exhibit A attached hereto and by reference thereto made a part hereof, said
Premises being agreed, for the purposes of this Lease, to have an area of
approximately 103,150 square feet (including the Common Areas, as hereinafter
defined) and consisting of the entirety of that certain building known as the
EASTSIDE BUILDING ("Building"), located at 4801 N. 63rd Street, Boulder,
Colorado 80301 (the "Property"). Said Lease is subject to the terms, covenants
and conditions herein set forth and the Landlord and Tenant covenant as a
material part of the consideration for this Lease to keep and perform each and
all of their respective covenants and conditions to be kept and performed and
that this Lease is made upon the condition of said performance. "Common Areas"
shall mean those portions of the Building which are made available on a
non-exclusive basis for general use in common of tenants, their employees,
agents and invitees. Landlord shall have the right from time to time to change
the location or character of and to make alterations of or additions to the
Common Areas, and to repair and reconstruct the Common Areas. So long as Tenant
leases all of the Building, Tenant shall have the exclusive use of all Common
Areas in and about the Building. The Premises shall include all personal
property located in or attached to the Premises, including, but not limited to,
the buss bar, employee lockers (attached or not), fire extinguishers, all
furniture, fixtures and office equipment, including, but not limited to all
computers (CPU's and monitors) except the computer equipment required to
continue the current owner's operations in Ireland, telephone system (Rolm 9200
CBX, switchboard and handsets), desks (including the reception desk at the
entrance to the Premises), chairs, cubicles, bookshelves, tables, credenzas,
file-storage racks on the mezzanine and artwork (the "Personal Property").
Landlord, Tenant and the current owner shall compile a detailed list of the
Personal Property, which shall include the above. In the event Landlord fails to
acquire any of the Personal Property pursuant to the Original Contract (as
hereinafter defined) and receives a reduction in the purchase price for the
Property pursuant to the Original Contract, Landlord shall pay to Tenant, or the
Rent shall be reduced at the rate of $13.22 per $1,000 in value for lost
Personal Property. Tenant shall not be entitled to challenge the value received
by Landlord for lost Personal Property so long as Tenant's valuation of the lost
Personal Property does not differ from Landlord's valuation by an amount equal
to or greater than $20,000.00.
3. TERM. The term of this Lease shall be for ten (10) years. Subject to
Substantial Completion of the Premises pursuant to the Work Letter, this lease
shall commence on the 1st day of July, 2002 ("Commencement Date"), and end on
the last day of the 120th calendar month following the Commencement Date, but,
unless earlier terminated as provided herein, no earlier than the 30th day of
June, 2012 (the "Term").
4. POSSESSION.
a. Subject to Tenant Delay as set forth in the Work Letter and
delays due to Force Majeure (as hereinafter defined), if the Landlord cannot
deliver possession of the Premises to Tenant at the Commencement Date, this
Lease shall not be void or voidable, the expiration date of the above Term shall
be extended, to ten (10) years after the end of the month during which Landlord
delivers possession to Tenant and all Rent shall be abated during the period
between the Commencement Date and the time when Landlord delivers possession and
Landlord shall pay all penalties (including any holdover penalty amount)
incurred by Tenant at Tenant's current leased premises until such time as
Landlord delivers possession of the Premises to Tenant. Notwithstanding anything
to the contrary contained in this Paragraph 4(a), in the event that Landlord has
not delivered possession of the Premises to Tenant, for any reason whatsoever,
on or prior to ninety (90) days after the Commencement Date set forth in
Paragraph 3 above, then Tenant may terminate this Lease upon written notice to
Landlord and neither party shall thereafter have any obligations or liability
under this Lease, except Landlord shall reimburse Tenant for all out of pocket
architectural and engineering fees and expenses Tenant incurred in connection
with the design and build-out of the Premises (but, not to exceed $25,000).
Nothing herein to the contrary shall relieve Landlord of its obligation to use
its best efforts to complete the Tenant Improvements and to deliver possession
of the Premises to Tenant on or before the Commencement Date set forth in
Paragraph 3 above. In the event that this Lease is terminated pursuant to this
Paragraph 4(a), Landlord shall promptly return to Tenant the security deposit
and the first month's Base Rent prepaid pursuant to Paragraph 5(a) below. As
used herein, "Force Majeure" shall mean acts of God, strike, riot, war, weather,
or any other reason beyond the reasonable control of the Landlord; provided,
however, that prior to Landlord being entitled to any extension due to a delay,
Landlord shall bear the burden of establishing such delay.
b. So long as such occupancy is authorized under Applicable Law (as
hereinafter defined) and does not unreasonably interfere with any remaining
build-out of the Premises, Landlord shall permit Tenant to occupy the Premises
prior to the Commencement Date, such occupancy shall be subject to all the
provisions of the Lease, including the payment of Tenant's Pro Rata Share of
Operating Expenses, as provided herein; provided, however, Tenant shall not be
obligated to pay Base Rent and Occupancy Improvement Rent until the Commencement
Date. Said early possession shall not advance the termination date herein above
provided. Notwithstanding the foregoing, in the event that Landlord permits
Tenant to enter the Premises prior to completion of the Tenant Improvements
solely for the purposes of performing Tenant's pre-opening activities, Tenant
shall not be obligated to pay Rent while Tenant is performing such pre-opening
activities. Except as provided above, Tenant shall be obligated to pay Rent at
such time as the City of Boulder completes its final inspection of the Tenant
Improvements and Tenant is authorized to occupy the Premises pursuant to a
certificate of occupancy or other applicable governmental sign off.
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5. RENT.
a. Tenant agrees to pay to Landlord as basic rental, without prior
notice or demand, the sum of SIXTY-FOUR THOUSAND THIRTY-NINE AND No/100 Dollars
($64,039.00), on or before the first day of the first full calendar month of the
Term hereof and a like sum on or before the first day of each and every
successive calendar month thereafter during the Term hereof ("Base Rent"),
except that the first month's Base Rent shall be paid upon the execution hereof.
Rent for any period during the Term hereof which is for less than one (1) month
shall be a prorated portion of the monthly installment herein, based upon the
number of days such Rent is due. Said Rent shall be paid to Landlord, without
deduction or offset except as set forth herein, in lawful money of the United
States of America, which shall be legal tender at the time of payment at 3434
47th Street, Suite 220, Boulder, Colorado 80301, or to such other person or at
such other place as Landlord may from time to time designate in writing. In
addition to payment of Base Rent, subject to adjustment as set forth in
Paragraph 32.a below, Tenant shall pay to Landlord the Occupancy Improvement
Rent monthly in the amount of TEN THOUSAND FIVE HUNDRED SEVENTY-TWO AND No/100
Dollars ($10,572.00).
b. On the first day of the month following the end of a Lease Year
(as hereinafter defined) Landlord may increase the Base Rent payable for the
subsequent twelve (12) month period. The increase shall be measured by the
increase in the Consumer Price Index, as described below, but shall not exceed
three percent (3%) of the Base Rent owing for the immediately preceding year
("the 3% Cap"). "Lease Year" shall mean each twelve (12) month period beginning
with the Commencement Date, or any anniversary thereof, and ending on the
preceding date one (1) year later. The following definitions and methods shall
be used to calculate the increases in basic rental under this paragraph:
(1) "Consumer Price Index" shall mean the semi-annual indexes
of the Consumer Price Index for all Urban Consumers, Denver-Boulder, Colorado
(All items; 1982-84 equals 100) issued by the United States Department of Labor,
Bureau of Labor Statistics, or any successor agency of the United States that
issues such indexes or any successor index.
(2) "Initial Consumer Price Index" shall mean the Consumer
Price Index published for the nearest calendar period preceding the Commencement
Date of this Lease.
(3) "Latest Consumer Price Index" shall mean the Consumer
Price Index published for the nearest calendar period preceding the first day on
which an increase under this Lease is to be effective.
(4) "Previous Consumer Price Index" shall mean the Consumer
Price Index published for the nearest calendar period preceding the first day on
which the previous increase under this Lease was effective.
(5) The first increase will be calculated by multiplying the
basic rental by a fraction, with the numerator being the Latest Consumer Price
Index and the denominator being the Initial Consumer Price Index.
(6) Each subsequent increase will be calculated by multiplying
the then current basic rental by a fraction, with the numerator being the Latest
Consumer Price Index and the denominator being the Previous Consumer Price
Index.
(7) To the extent that the calculation under subparagraphs (5)
and (6) above exceed the 3% Cap, such excess ("Excess") shall be preserved and
carried forward to subsequent years until utilized. All or part of the Excess
may be added to the amount calculated under subparagraph (6) above for any
subsequent year, subject to the 3% Cap.
(8) If the Consumer Price Index is discontinued, Landlord will
designate an alternative comparable index to be used in calculating the increase
in the basic rental under this Lease.
(9) Tenant will not be entitled to a credit for any decrease
in the Consumer Price Index except to the extent that it shall be off-set
against any Excess carried forward under the provisions of paragraph 5(b)(7).
c. Notwithstanding any provision contained herein, the Base Rent due
under the terms hereof shall at no time be less than SIXTY-FOUR THOUSAND
THIRTY-NINE AND No/100 Dollars ($64,039.00) per month.
6. SECURITY DEPOSIT. Tenant has deposited with Landlord, upon the
execution of this Lease, the sum of FIFTY THOUSAND AND No/100 Dollars
($50,000.00). Said sum shall be held by Landlord as security for the faithful
performance by Tenant of all the terms, covenants, and conditions of this Lease
to be kept and performed by Tenant during the term hereof. If Tenant defaults
with respect to any provision of this Lease, including, but not limited to the
provisions relating to the payment of rent, Landlord may (but shall not be
required to) use, apply or retain all or any part of this security deposit for
the payment of any rent or any other sum in default, or for the payment of any
amount which Landlord may spend or become obligated to spend by reason of
Tenant's default, or to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of Tenant's default. If any portion of said
deposit is so used or applied, Tenant shall within five (5) days after written
demand therefor, deposit cash with Landlord in an amount sufficient to restore
the security deposit to its original amount and Tenant's failure to do so shall
be a material breach of this
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Lease. Landlord shall not be required to keep this security deposit separate
from its general funds, and Tenant shall not be entitled to interest on such
deposit. If Tenant shall fully and faithfully perform every provision of this
Lease to be performed by it, the security deposit or any balance thereof shall
be returned to Tenant (or at Landlord's option, to the last assignee of Tenant's
interest hereunder) at the expiration of the Lease term. In the event of
termination of Landlord's interest in this Lease, Landlord shall transfer said
deposit to Landlord's successor in interest.
7. OPERATING EXPENSES. For the purposes of this Article, "Operating
Expenses" means all reasonable and necessary costs and expenses of every kind
and nature, other than those expressly excluded below, paid or incurred by
Landlord in operating, managing, repairing, maintaining and administering the
Building including, without limitation or duplication:
a. The cost of all insurance required to be kept by Landlord
pursuant to this Lease and any other insurance customarily procured for other
commercial buildings in the same geographical area as the Building and which
Landlord may reasonably elect to obtain with respect to the operation or
ownership of the Property and the part of any claim required to be paid under
the deductible portion of any insurance policies carried by Landlord in
connection with the Property.
b. The cost of reasonable and necessary general repairs, maintenance
and replacements, excluding capital expenditures, made from time to time by
Landlord to the Property, including costs under mechanical or other maintenance
contracts and repairs and replacements of equipment used in connection with such
maintenance and repair work. Replacements of heating, ventilating and
air-conditioning equipment may only be charged to Tenant through draw downs on
the reserve account established under subparagraph l. below.
c. The cost of pest control, security, cleaning and snow and ice
removal services.
d. The cost of maintaining, repairing and redecorating Common Areas,
and landscaping the Common Areas (but excluding the $150,000 to $200,000
landscaping expenditure pursuant to Paragraph 33 below), and of maintaining and
operating any fire detection, fire prevention, lighting and communications
systems. Redecorating, renovating and replacement of floor coverings of Common
Areas shall only be charged to Operating Expenses as provided in subparagraph i.
of this paragraph.
e. The cost of all utilities, unless separately metered or
submetered and paid by Tenant (including, without limitation, water, sewer, gas,
electricity, heating, ventilating and cooling to the Premises), used or consumed
by Tenant.
f. INTENTIONALLY DELETED
g. Remuneration (including wages, usual expense accounts and fringe
benefits, costs to Landlord of workmen's compensation and disability insurance
and payroll taxes) and fees of persons and companies to the extent directly
engaged in operating, repairing, maintaining, or administering the Property.
h. The cost of professional property management fees (not to exceed
5% of Base Rent) and costs incurred by Landlord or its agents in engaging
accountants or other consultants to assist in making the computations required
hereunder.
i. The cost of capital improvements and structural repairs and
replacements made in, on or to the Property that are [i] made in order to
conform to changes subsequent to the Commencement Date in any applicable laws,
ordinances, rules, regulations or orders of any governmental or
quasi-governmental authority having jurisdiction over the Property, or [ii]
designed primarily to reduce Operating Expenses or the rate of increase in
Operating Expense, [iii] (in the event the Building is no longer only occupied
by Tenant) redecoration, renovating and replacement of floor coverings in the
Common Areas; such costs shall be charged by Landlord to Operating Expenses in
equal annual installments over the useful life of such capital improvement or
structural repair or replacement (as reasonably determined by Landlord) together
with interest on the balance of the unreimbursed cost at 4% above the Prime Rate
charged by Colorado Business Bank of Boulder on the date the cost was incurred
by Landlord, or based on the savings realized in such Lease year that the costs
are charged.
j. Real property taxes and assessments, gross receipts, taxes
(whether assessed against the Landlord or assessed against the Tenant and
collected by the Landlord, or both). Tenant shall not be responsible to pay any
fines, late charges or penalties assessed against Landlord as a result of
Landlord's failure to timely pay such taxes and assessments.
k. Other costs and expenses, including supplies, not otherwise
expressly excluded hereunder attributable to the operation, management, repair,
maintenance and administration of the Property.
l. A reserve for replacement of heating, ventilating and
air-conditioning equipment, replacement of the roof, and parking lot of
FIFTY-TWO THOUSAND AND NO/100 Dollars ($52,000.00) per annum.
Notwithstanding anything to the contrary in this Lease, Operating
Expenses shall not, however, include the following:
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m. Any charge for depreciation of the Building or equipment and any
principal, interest or other finance charge.
n. The cost of any work, including painting, decorating and work in
the nature of tenant finish, which Landlord performs in any rentable premises
other than work which Landlord performs in the Premises pursuant to the Work
Letter.
o. The cost of repairs, replacements or other work occasioned by
casualty required to be covered by Landlord's insurance to the extent such cost
is reimbursed to Landlord by collected insurance proceeds (provided Landlord
uses good faith commercially reasonable efforts to collect such proceeds), or
cost of repairs, replacements or other work occasioned by defects in
construction or equipment, covered by any contractors', manufacturers' or
suppliers' warranties.
p. Expenditures required to be capitalized for federal income tax
purposes (except as provided in Article 7, paragraph d. and i.).
q. Leasing commissions, advertising expenses and other costs
incurred in leasing space in the Building except as otherwise expressly provided
in this Lease.
r. The cost of repairing or rebuilding any part of the Property
necessitated by condemnation.
s. The cost of any damage to the Property or any settlement, payment
or judgment incurred by Landlord, resulting from Landlord's tortious act,
neglect, violation of Applicable Laws (as defined in this Lease) or breach of
this Lease that is not covered by insurance proceeds.
t. Costs (including, without limitation, attorneys fees) incurred by
Landlord in attempting to collect rent or evict tenants (other than Tenant) from
the Building.
u. Costs, including, without limitation, any penalties, fines and
legal expenses incurred by Landlord or any other tenant in the Building as a
result of a violation of any federal, state or local law, code or regulation.
In addition to Base Rent, Tenant shall pay its Pro Rata Share (as
hereinafter defined) of Operating Expenses paid or incurred by the Landlord for
the operation or maintenance of the Building of which the Premises are a part
(Base Rent and Operating Expenses are collectively referred to herein as
"Rent"). So long as Tenant occupies all of the Building, Tenant shall pay 100%
of the Operating Expenses for the Building. If Tenant no longer occupies all of
the Building, Tenant's Pro Rata Share shall be a fraction, the numerator of
which is the total number of rentable square feet which then comprises the
Premises and the denominator of which is the total number of rentable square
feet in the Building (e.g. 103,150 square feet). Upon commencement of this
Lease, Landlord shall give Tenant a statement of the amount of Operating
Expenses payable by Tenant with each payment of Base Rent, which shall be based
upon a best estimate of such expenses if no record of actual expenses for the
prior year are available. Landlord shall provide to Tenant on or before the
first day of March of each year thereafter an itemized statement of the prior
year's Operating Expenses payable by Tenant hereunder and advise Tenant of any
increase in Operating Expenses, but failure by Landlord to give such statement
by said date shall not constitute a waiver by Landlord of its right to require
an increase in Operating Expenses. The total amount of actual Operating Expenses
for the prior year shall be used as an estimate for current year and this amount
shall be divided into twelve (12) equal monthly installments, and Tenant shall
pay to Landlord, concurrently with the regular monthly Base Rent payment, an
amount equal to one (1) monthly installment of such estimate. Subsequent
installments shall be payable concurrently with the regular monthly Base Rent
payments for the balance of that calendar year and shall continue until the next
year's statement is rendered. If actual Operating Expenses are more or less than
estimated, then upon receipt of a statement from Landlord, Tenant shall pay a
lump sum equal to such total increase with the next regular monthly Rent payment
or receive a credit against said Rent payment. Tenant or its representative
shall have the right to inspect Landlord's books and records relating to the
Operating Expenses during normal business hours. In the event Tenant's
inspection reveals an error of five percent (5%) or more in the calculation of
Operating Expenses and/or charges to Tenant, the reasonable cost of such
inspection shall be paid by Landlord.
Even though the Term has expired and Tenant has vacated the
Premises, when the final determination is made of Tenant's share of Operating
Expenses for the year in which this Lease terminates, Tenant shall immediately
pay any increase due over the estimated expenses paid and, conversely, any
overpayment made in the event said expenses decrease shall be immediately
rebated by Landlord to Tenant.
8. USE. Tenant shall use the Premises for administrative office, research
and development facilities, diagnostics laboratories, assembly/packaging,
manufacture of precision or electronic instruments/parts/tools, repair,
maintenance, sales and service of commodities manufactured at the Premises,
warehouse, distribution and wholesale of commodities manufactured at the
Premises, uses incidental thereto, and for other lawful purposes and shall not
use or permit the Premises to be used for any other purpose without the prior
written consent of Landlord. Tenant shall have the right to use the Premises for
the permitted uses seven (7) days per week, twenty-four (24) hours per day.
Tenant shall not do or permit anything to be done in or about the
Premises nor bring or keep anything therein which will in any way increase the
existing rate or affect any fire or other insurance upon the Building or any of
its contents, or cause cancellation of any insurance policy covering said
Building or any part thereof or any of its contents. In the event the Building
is no longer only occupied by Tenant, then Tenant shall
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not do or permit anything to be done in or about the Premises which will, in any
way, obstruct or interfere with the rights of other tenants or occupants of the
Building or injure or annoy them. Tenant will not use or allow the Premises to
be used for any immoral or unlawful purpose, nor shall Tenant cause, maintain or
permit any nuisance in, on or about the Premises. Tenant shall not commit or
suffer to be committed any waste in or upon the Premises.
9. COMPLIANCE WITH LAW. Tenant shall not use the Premises or permit
anything to be done in or about the Premises, which will, in any way, conflict
with any law, statute, ordinance or governmental rule, regulation or requirement
("Applicable Laws") now in force or which may hereafter be enacted or
promulgated. Tenant shall, at its sole cost and expense, promptly comply with
all Applicable Laws now in force or which may hereafter be in force, and with
the requirements of any board of fire insurance underwriters or other similar
bodies now or hereafter constituted, relating to Tenant's specific use or
occupancy of the Premises, excluding structural changes not related to or
affected by Tenant's improvements or acts. Landlord represents and covenants
that as of the Commencement Date, to the best of Landlord's knowledge, the
Building and the Premises are in compliance with all Applicable Laws. The
judgment against Tenant, whether the Landlord be a party thereto or not, that
Tenant has violated any Applicable Law shall be conclusive of that fact as
between the Landlord and Tenant.
10. ALTERATIONS AND ADDITIONS. Tenant shall not make or suffer to be made
any alterations, additions or improvements (collectively, "Alterations") to or
of the Premises or any part thereof which requires any modification to any
structural or foundation component of the Premises without the written consent
of Landlord first had and obtained, which will not be unreasonably withheld,
conditioned or delayed, and any alterations, additions or improvements to or of
said Premises, including, but not limited to, wall covering, paneling and
built-in cabinet work, but excepting movable furniture and trade fixtures,
shall, on the expiration of the term, become a part of the realty and belong to
the Landlord and shall be surrendered with the Premises. In the event Landlord
consents to the making of any Alterations to the Premises by Tenant, the same
shall be made by Tenant at Tenant's sole cost and expense, and any contractor or
person selected by Tenant to make the same, must first be approved of in writing
by the Landlord, which will not be unreasonably withheld, conditioned or
delayed. Landlord shall, at the time it consents to the making of any
Alterations, notify Tenant in writing, whether Tenant shall be allowed to leave
such Alterations in the Premises or be required to remove such Alterations from
the Premises upon the expiration or earlier termination of the Term hereof. In
the case of Landlord's requiring the removal of such Alterations, Tenant shall,
upon the written demand by the Landlord, at Tenant's sole cost and expense,
forthwith and with all due diligence, remove such Alterations which have been
designated by the Landlord to be removed, and repair any damage to the Premises
caused by such removal.
11. REPAIRS.
a. Subject to Tenant's right to inspect the Premises prior to
occupancy thereof and submit a "punch list" to Landlord in accordance with
Paragraph 32.b of this Lease and to latent defects, by taking possession of the
Premises, Tenant shall be deemed to have accepted the Premises as being in good,
sanitary order, condition and repair. Subject to Landlord's maintenance, repair
and replacement obligations set forth in this Lease, Tenant shall, at Tenant's
sole cost and expense, keep the Premises and every part thereof in good
condition and repair, damage thereto from causes beyond the reasonable control
of Tenant and ordinary wear and tear excepted. Tenant shall, upon the expiration
or sooner termination of this Lease hereof, surrender the Premises to the
Landlord in good condition, ordinary wear and tear and damage from causes beyond
the reasonable control of Tenant excepted. Except as specifically provided in
this Lease, Landlord shall have no obligation whatsoever to alter, remodel,
improve, repair, decorate or paint the Premises or any part thereof, and the
parties hereto affirm that Landlord has made no representations to Tenant
respecting the condition of the Premises or the Building except as specifically
herein set forth.
b. Landlord shall repair and maintain the structural portions of the
Building, including the roof, basic plumbing, air conditioning, heating, and
electrical and sprinkler systems installed or furnished by Landlord, and any
latent defects thereof, in good order, condition and repair, unless such
maintenance and repairs are caused in part or in whole by the act, neglect,
fault or omission of any duty by the Tenant, its agents, servants, employees or
invitees, in which case Tenant shall pay to Landlord the reasonable cost of such
maintenance and repairs. The cost of all such repairs (except repairs of
structural defects) shall be included in Operating Expenses as provided in
Article 7 hereof. In the event Landlord fails to perform its maintenance or
repair obligations hereunder, Tenant shall notify Landlord to do such acts as
are required to fulfill its maintenance and repair obligations. In the event
Landlord fails to commence such work promptly upon demand by Tenant, and
diligently prosecute it to completion, or in the event of an emergency, then
Tenant shall have the right, but shall not be required, to do such acts and
expend such funds as are reasonably required to perform such work. In the event
that any of such repairs, maintenance or replacement was not properly chargeable
to Tenant as an Operating Expense, or should have been paid through the reserve
account established by Landlord, then upon completion of such work, Landlord
shall reimburse to Tenant all necessary and reasonable costs thereof within 10
days following receipt of an invoice from Tenant. If Landlord fails to reimburse
Tenant within such 10 day period, interest shall accrue on the unpaid invoiced
costs at the rate of 4% over the Prime Rate then being charged by Colorado
Business Bank of Boulder, or its successor, and Tenant shall be entitled to
offset such unpaid amounts against future Rent. Except as provided herein or as
otherwise set forth in this Lease, and subject to the provisions of Article 21,
there shall be no abatement of Rent and no liability of Landlord by reason of
any injury to or interference with Tenant's business arising from the making of
any repairs, alterations or improvements in or to any portion of the Building or
the Premises or in or to fixtures, appurtenances and equipment therein.
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12. LIENS. Tenant shall keep the Premises and the property in which the
Premises are situated free from any liens arising out of any work performed,
materials furnished or obligations incurred by Tenant. Landlord may require, at
Landlord's sole option, that Tenant shall provide to Landlord, at Tenant's sole
cost and expense, a lien and completion bond or other security reasonably
acceptable to Landlord in an amount equal to one and one-half (1-1/2) times any
and all estimated cost of Alterations in the Premises, to insure Landlord
against any liability for mechanics' and materialmen's liens and to insure
completion of the work. Tenant hereby agrees to indemnify, defend, and save
Landlord harmless of and from all liability, loss, damage, costs, or expenses,
including attorneys' fees, on account of any claims of any nature whatsoever
including claims or liens of laborers or materialmen or others for work
performed for or materials or supplies furnished to Tenant or persons claiming
under Tenant. Should Tenant receive any notice of intent to file a lien, Tenant
shall deliver a copy of such notice to Landlord and shall promptly resolve the
claim.
13. ASSIGNMENT AND SUBLETTING. Except as expressly provided below, Tenant
shall not either voluntarily or by operation of law, assign, transfer, mortgage,
pledge, hypothecate or encumber this Lease or any interest therein, and shall
not sublet the said Premises or any part thereof, or any right or privilege
appurtenant thereto, or suffer any other person (the employees, agents, servants
and invitees of Tenant excepted) to occupy or use the said Premises, or any
portion thereof, without the written consent of Landlord first had and obtained,
which consent shall not be unreasonably withheld, conditioned or delayed, and a
consent to one assignment, subletting, occupation or use by any other person
shall not be deemed to be a consent to any subsequent assignment, subletting,
occupation or use by another person. Any such assignment or subletting without
such consent shall be void, and shall, at the option of the Landlord, constitute
a default under this Lease. Notwithstanding anything to the contrary herein,
Tenant may, upon written notice to Landlord, but without the consent of
Landlord, (i) transfer (by assignment or sublease, in whole or in part) this
Lease to any parent or affiliate of Tenant or to a wholly owned subsidiary of
Tenant, or (ii) transfer (by assignment or sublease, in whole or in part) this
Lease to any person or entity acquiring, by asset or stock purchase, merger,
consolidation or liquidation, all or substantially all of Tenant's assets or
voting stock, provided that such person or entity assumes in writing the
obligations of Tenant under this Lease ("Permitted Transfer").
If Tenant realizes any rent or other consideration under any such
assignment, subletting or occupancy (other than a Permitted Transfer) in excess
of the Base Rent and other sums payable hereunder, after amortization of the
reasonable costs incurred by Tenant for leasing commissions and leasehold
improvements in connection with such assignment, subletting or occupancy over
the term of such assignment, subletting or occupancy, Tenant shall pay to
Landlord 50% of the excess Base Rent promptly upon receipt by Tenant. Landlord
may charge a reasonable fee not to exceed $1,000 as part of its consent to any
assignment, sublease, or encumbrance.
14. HOLD HARMLESS. Subject to Article 15, Tenant shall indemnify and hold
harmless Landlord against and from any and all claims arising from Tenant's use
of the Premises for the conduct of its business or from any activity, work, or
other thing done, permitted or suffered by the Tenant in or about the Building,
and shall further indemnify and hold harmless Landlord against and from 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 or negligence of the Tenant, or any officer, agent,
employee, guest, or invitee of Tenant, and from all and against all costs,
reasonable attorneys' fees, expenses and liabilities incurred in or about any
such claim or any action or proceeding brought thereon, and, in any case, action
or proceeding be brought against Landlord by reason of any such claim, Tenant,
upon notice from Landlord shall defend the same at Tenant's expense. Subject to
Article 15, Landlord shall indemnify and hold harmless Tenant against and from
any and all claims arising in the Premises, the Building or any part thereof for
the conduct of its business or from any activity, work, or other thing done,
permitted or suffered by the Landlord in or about the Premises or Building, and
shall further indemnify and hold harmless Tenant against and from 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 or negligence of the Landlord, or any officer, agent, employee,
guest, or invitee of Landlord, and from all and against all costs, reasonable
attorneys' fees, expenses and liabilities incurred in or about any such claim or
any action or proceeding brought thereon, and, in any case, action or proceeding
be brought against Tenant by reason of any such claim, Landlord, upon notice
from Tenant shall defend the same at Landlord's expense. Tenant, as a material
part of the consideration to Landlord, hereby assumes all risk of damage to
property or injury to persons, in, upon or about the Premises, from any cause
other than Landlord's negligence or willful acts. Landlord or its agents shall
not be liable for any damage to property entrusted to employees of the Building,
nor for loss or damage to any property by theft or otherwise, nor for any injury
to 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 or from the pipes, appliances or plumbing works therein or from the
roof, street or subsurface or from any other place resulting from dampness or
any other cause whatsoever, unless caused by or due to the negligence of
Landlord, its agents, servants or employees. Landlord or its agents shall not be
liable for interference with the light or other incorporeal hereditament, loss
of business by Tenant. Tenant shall give prompt notice to Landlord in case of
fire or accidents in the Premises or in the Building or of defects therein or in
the fixtures or equipment.
15. SUBROGATION. Landlord and Tenant hereby mutually waive their
respective rights of recovery against each other for any loss, damage or claim
under any fire, extended coverage and other property insurance policies actually
maintained by such party or required to be maintained by such party under the
terms of this Lease. Each party shall obtain any special endorsements, if
required by their insurer to evidence compliance with the aforementioned waiver.
16. LIABILITY INSURANCE. Tenant shall, at Tenant's expense, obtain and
keep in force during the Term of this Lease a policy of comprehensive public
liability insurance with limits not less than $2,000,000, combined single limit,
insuring Landlord and Tenant against any liability arising out of the
6
ownership, use, occupancy or maintenance of the Premises and all areas
appurtenant thereto, as their interests may appear. The limit of said insurance
shall not, however, limit the liability of the Tenant hereunder. Tenant may
carry said insurance under a blanket policy, providing, however, said insurance
by Tenant shall have a Landlord's protective liability endorsement attached
thereto. If Tenant shall fail to procure and maintain said insurance, Landlord
may, but shall not be required to, procure and maintain same, but at the expense
of Tenant after notifying Tenant and allowing ten (10) business days. Tenant
shall deliver to Landlord prior to occupancy of the Premises certificates
evidencing the existence and amounts of such insurance with named insured as
their interests may appear. No policy shall be cancelable or subject to
reduction of coverage except after thirty (30) days' prior written notice to
Landlord. Landlord shall obtain and keep in force during the Term of this Lease,
comprehensive public liability insurance on the Building, workers' compensation
insurance in compliance with Applicable Laws and special form property insurance
or all risk property insurance, in the amount of the full replacement value, on
the shell and core of the Building, on the Premises, on all finish items and
fixtures in the Premises, whether installed pursuant to the Work Letter or
otherwise, and on the Property, from such companies and on such terms and
conditions, including loss of rental insurance, as customarily maintained by
landlords for other commercial buildings in the same geographical area as the
Building. Landlord shall deliver to Tenant prior to occupancy of the Premises
certificates evidencing the existence and amounts of such insurance with named
insured as their interests may appear. The costs of Landlord's insurance shall
be included in Operating Expenses.
17. SERVICES AND UTILITIES. Tenant shall contract directly with Xcel
Energy ("Xcel") to provide gas and electric service to the Premises, and shall
pay Xcel for such service and Landlord shall not include any fee or charge for
such service in Operating Expenses.
18. PROPERTY TAXES. Tenant shall pay, or cause to be paid, before
delinquency, any and all taxes levied or assessed and which become payable
during the Term hereof upon all Tenant's leasehold improvements, equipment,
furniture, fixtures and personal property located in the Premises; except that
which has been paid for by Landlord, and is the standard of the Building. In the
event any or all of Tenant's leasehold improvements, equipment, furniture,
fixtures and personal property shall be assessed and taxed with the Building,
Tenant shall pay to Landlord its share of such taxes within thirty (30) days
after receipt by Tenant from Landlord of a statement in writing setting forth
the amount of such taxes applicable to Tenant's property which statement shall
include a copy of the tax bill.
19. RULES AND REGULATIONS. Tenant shall faithfully observe and comply with
the non-discriminatory rules and regulations that Landlord shall, from time to
time, promulgate. Landlord reserves the right, from time to time, to make all
reasonable modifications to said rules. The additions and modifications to those
rules shall be binding upon Tenant upon delivery of a copy of them to Tenant.
Landlord shall not be responsible to Tenant for the nonperformance of any said
rules by any other tenants or occupants. A copy of the current rules and
regulations are attached hereto as Exhibit B. The rules and regulations numbers
1, 2, 7, 11, 13 and 14 shall not be applicable to Tenant so long as Tenant
leases all of the Building. In addition, the first sentence of rule 3 shall not
be applicable and the second sentence of rule 3 shall be qualified to provide
that Tenant shall be entitled to go on the roof or into any mechanical system as
provided pursuant to the maintenance obligations or pursuant to any rights
granted to Tenant under this Lease; the first sentence of rule 8 shall not be
applicable and the second sentence of rule 8 shall be limited to discarding
anything outside of the entrance door; rule 9 shall be qualified to allow Tenant
to keep combustible fluids and materials in the Premises so long as it does not
result in any violation of Applicable Laws.
20. HOLDING OVER. If Tenant remains in possession of the Premises or any
part after the expiration of the Term hereof, without the express written
consent of Landlord, such occupancy shall be a tenancy from month-to-month at a
rental in the amount of one and one-half times the last monthly Base Rent, plus
all other charges payable hereunder, and upon all the terms hereof applicable to
a month-to-month tenancy.
21. ENTRY BY LANDLORD. Landlord reserves, and shall during normal business
hours upon reasonable written notice to Tenant and subject to Tenant's security
requirements, as herein defined, have the right to enter the Premises, inspect
the same, supply janitorial service and any other service to be provided by
Landlord to Tenant hereunder, to submit said Premises to prospective purchasers
or during the last six months of the Term to prospective tenants, to post
notices of non-responsibility, and to alter, improve or repair the Premises and
any portion of the Building of which the Premises are a part that Landlord may
deem necessary or desirable, without abatement of Rent and may for that purpose
in connection with any work required to be performed by Landlord under this
Lease, Landlord may erect scaffolding and other necessary structures where
reasonably required by the character of the work to be performed, always
providing that the entrance to the Premises shall not be blocked thereby, and
further providing that the business of the Tenant shall not be interfered with
unreasonably. Tenant, in favor of Landlord, only hereby waives any claim for
damages or for any injury or inconvenience to or interference with Tenant's
business, any loss of occupancy of the Premises, and any other loss occasioned
thereby unless caused by negligence or willful acts of Landlord. For each of the
aforesaid purposes, Landlord shall, at all times, have and retain a key with
which to unlock all of the doors in, upon and about the Premises, excluding
Tenant's vaults, safes and files and locked documentation room (or other
acknowledged secure areas), and Landlord shall have the right to use any and all
means which Landlord may deem proper to open said doors in an emergency, in
order to obtain entry to the Premises without liability to Tenant except for any
failure to exercise due care for Tenant's property. Any entry to the Premises
obtained by Landlord by any of said means, or otherwise shall not, under any
circumstances, be construed or deemed to be a forcible or unlawful entry into,
or a detainer of, the Premises, or an eviction of Tenant from the Premises or
any portion thereof.
22. RECONSTRUCTION. In the event the Premises, or the Building of which
the Premises are a part, are damaged by fire or other perils covered by extended
coverage insurance, Landlord agrees to
7
forthwith repair the same, at Landlord's expense (except for any deductible), to
substantially the same condition as existed immediately prior to such damage;
and this Lease shall remain in full force and effect, except that the Tenant
shall be entitled to a proportionate reduction of the Rent while such repairs
are being made, such proportionate reduction to be based upon the extent to
which the damage and the making of such repairs shall materially interfere with
the business carried on by the Tenant in the Premises.
In the event the Premises or the Building of which the Premises are
a part are damaged as a result of any cause other than the perils covered by
fire and extended coverage insurance, then Landlord shall forthwith repair the
same within one hundred and fifty (150) days of casualty, provided the extent of
the destruction be less than twenty-five percent (25%) of the then full
replacement cost of the Premises or the Building of which the Premises are a
part. In the event the destruction of the Premises or the Building is to an
extent greater than twenty-five percent (25%) of the full replacement cost, then
both Tenant and Landlord shall have the option to give notice to the other at
any time within thirty (30) days after such damage terminating this Lease as of
the date specified in such notice, which date shall be no less than thirty (30)
and no more than sixty (60) days after the giving of such notice. In the event
of giving such notice, this Lease shall expire and all interest of the Tenant in
the Premises shall terminate on the date so specified in such notice and the
Rent, reduced by a proportionate amount, based upon the extent, if any, to which
such damage materially interfered with the business carried on by the Tenant in
the Premises, shall be paid up to date of said such termination. If neither
Landlord nor Tenant terminates, then Landlord agrees to forthwith repair the
damage, at Landlord's expense, to substantially the same condition as existed
immediately prior to such damage; and this Lease shall remain in full force and
effect, except that the Tenant shall be entitled to a proportionate reduction of
the Rent while such repairs are being made, such proportionate reduction to be
based upon the extent to which the damage and the making of such repairs shall
materially interfere with the business carried on by the Tenant in the Premises.
Notwithstanding anything to the contrary contained in this Article, Landlord
shall not have any obligation whatsoever to repair, reconstruct or restore the
Premises when the damage resulting from any casualty covered under this Article
occurs during the last twelve (12) months of the Term of this Lease or any
extension thereof and in the event of such casualty during the last twelve (12)
months of the Term of this Lease either Landlord or Tenant shall have the right
to terminate this Lease by giving written notice to the other party within
thirty (30) days of such casualty.
Landlord shall not be required to repair any injury or damage by
fire or other cause, or to make any repairs or replacements of any panels,
decoration, office fixtures, railings, floor coverings, partitions, or any other
property installed in the Premises by Tenant unless covered by Landlord's
insurance as part of the Building or through an endorsement to Landlord's
insurance.
Except for the abatement of Rent as provided in this Article 22,
Tenant shall not be entitled to any compensation or damages from Landlord for
loss of the use of the whole or any part of the Premises, or Tenant's personal
property, unless caused by Landlord, or, subject to Article 21, any compensation
or damages for inconvenience or annoyance occasioned by such damage, repair,
reconstruction or restoration.
23. DEFAULT. The occurrence of any one or more of the following events
shall constitute a default and breach of this Lease:
a. The vacating or abandonment of the Premises by Tenant, without
payment of Rent.
b. The failure by Tenant to make any payment of Rent or any other
payment required to be made by Tenant hereunder, as and when due, where such
failure shall continue for a period of ten (10) days after written notice
thereof by Landlord to Tenant.
c. The failure by Tenant to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed by the
Tenant, other than described in Article 23.b above, where such failure shall
continue for a period of thirty (30) days after written notice thereof by
Landlord to Tenant; provided, however, that if the nature of Tenant's default is
such that more than thirty (30) days are reasonably required for its cure, then
Tenant shall not be deemed to be in default if Tenant commences such cure within
said thirty (30) day period and thereafter diligently prosecutes such cure to
completion.
d. The making by Tenant of any general assignment or general
arrangement for the benefit of creditors; or the filing by or against Tenant of
a petition to have Tenant adjudged a bankrupt, or a petition of reorganization
or arrangement under any law relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed within sixty [60] days); or
the appointment of a trustee or a receiver to take possession of substantially
all of Tenant's assets located at the Premises or of Tenant's interest in this
Lease, where possession is not restored to Tenant within thirty (30) days; or
the attachment, execution or other judicial seizure of substantially all of
Tenant's assets located at the Premises or of Tenant's interest in this Lease,
where such seizure is not discharged in thirty (30) days.
e. If Landlord is in default in the performance of any obligation
under this Lease on the part of Landlord to be performed and such default
continues for a period of thirty (30) days after Tenant's written notice to
Landlord specifying the nature of the default, then Tenant may exercise any
right or remedy it may possess at law or equity, which is not otherwise waived
in this Lease. If the default set forth in Tenant's notice cannot reasonably be
cured within thirty (30) days, then Landlord shall not be deemed to be in
default if (i) Landlord notifies Tenant in writing that it will cure the
default, (ii) commences to cure the default within such thirty (30)-day period,
and (iii) proceeds diligently and in good faith thereafter to cure such default
and does cure such default within a reasonable time.
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24. REMEDIES IN DEFAULT. In the event of any such default or breach by
Tenant, Landlord may at any time thereafter, with or without notice or demand,
and without limiting Landlord in the exercise of a right or remedy which
Landlord may have by reason of such default or breach, pursuant to Applicable
Laws and subject to Landlord's agreement to use reasonable efforts to mitigate
its damages:
a. Terminate Tenant's right to possession of the Premises by any
lawful and peaceful means, in which case this Lease shall terminate and Tenant
shall immediately surrender possession of the Premises to Landlord. In such
event Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant's default including, but not limited to, the cost
of recovering possession of the Premises; expenses of reletting, including
necessary and reasonable expenses incurred in connection with renovation and
alteration of the Premises, reasonable attorneys' fees, any real estate
commission actually paid; the worth at the time of award by the court having
jurisdiction thereof of the amount by which the unpaid Rent for the balance of
the Term after the time of such award exceeds the amount of such rental loss for
the same period that Tenant proves could be reasonably avoided; that portion of
the leasing commission paid by Landlord and applicable to the unexpired Term of
the Lease. Unpaid installments of Rent or other sums shall bear interest from
the date due at the rate of twenty percent (20%) per annum. In the event Tenant
shall have abandoned the Premises without payment of Rent, Landlord shall have
the option of (a) taking possession of the Premises and recovering from Tenant
the amount specified in this paragraph, or (b) proceeding under the provisions
of the following Article 24.b.
b. Maintain Tenant's right to possession, in which case this Lease
shall continue in effect whether or not Tenant shall have abandoned the
Premises. In such event, Landlord shall be entitled to enforce all of Landlord's
rights and remedies under this Lease, including the right to recover the Rent as
it becomes due hereunder.
c. Pursue any other remedy now or hereafter available to Landlord
under the laws or judicial decision of the State in which the Premises are
located.
25. EMINENT DOMAIN. If more than twenty-five percent (25%) of the Premises
shall be taken or appropriated by any public or quasi-public authority under the
power of eminent domain, either party hereto shall have the right, at its
option, to terminate this Lease by giving written notice to the other party, and
Landlord shall be entitled to any and all income, rent, award, or any interest
therein whatsoever which may be paid or made in connection with such public or
quasi-public use or purpose, and Tenant shall have no claim to such award;
provided, however, that the foregoing shall not prevent Tenant from recovering
from any award to the extent its interests are compensable. If either less than
or more than twenty-five percent (25%) of the premises is taken, or neither
party elects to terminate as herein provided, the rental thereafter to be paid
shall be proportionately reduced. If more than ten percent (10%) of the Building
other than the Premises may be so taken or appropriated, Landlord shall have the
right at its option to terminate this Lease by giving thirty (30) days written
notice to Tenant and shall be entitled to the entire award as above provided.
26. ESTOPPEL STATEMENT. Landlord and Tenant shall at any time and from
time to time upon not less than ten (10) business days' prior written notice
from the other party execute, acknowledge, and deliver to the other party a
statement, in writing, (a) certifying that this Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and
certifying that this Lease as so modified, is in full force and effect), and the
date to which the rental and other charges are paid in advance, if any, and (b)
acknowledging that there are not, to Tenant's or Landlord's knowledge, as
appropriate, any uncured defaults on the part of the other party hereunder, or
specifying such defaults if any are claimed. Any such statement may be relied
upon by any prospective purchaser or encumbrancer of all or any portion of the
real property of which the Premises are a part.
27. PARKING. Tenant shall have the right to use all of the parking
facilities of the Building. Landlord represents and covenants that as of the
Commencement Date, to the best of Landlord's knowledge, the parking facilities
of the Building are in compliance with all Applicable Laws. Landlord covenants
and agrees that so long as Tenant leases all of the Building, Tenant shall have
the exclusive right to utilize all parking spaces on the Property.
28. AUTHORITY OF PARTIES.
a. Corporate Authority. If Tenant is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants that
he is duly authorized to execute and deliver this Lease on behalf of the
corporation, in accordance with a duly adopted resolution of the board of
directors of said corporation or in accordance with the bylaws of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms.
b. Limited Partnerships. If the Landlord herein is a limited
partnership, it is understood and agreed that any claims by Tenant on Landlord
shall be limited to the assets of the limited partnership, and furthermore,
Tenant expressly waives any and all rights to proceed against the individual
partners or the officers, directors or shareholders of any corporate partner,
except to the extent of their interest in said limited partnership.
c. Limited Liability Company. If the Landlord herein is a limited
liability company, it is understood and agreed that any claims by Tenant on
Landlord shall be limited to the assets of the limited liability company, and
furthermore, Tenant expressly waives any and all rights to proceed against
individual members or managing members, except to the extent of their interest
in said limited liability company. Each individual executing this Lease on
behalf of Landlord represents and warrants that he is duly authorized to
9
execute and deliver this Lease on behalf of Landlord, in accordance with a duly
adopted resolution of the members of Landlord or in accordance with the
operating agreement of Landlord, and that this Lease is binding upon Landlord in
accordance with its terms.
29. GENERAL PROVISIONS.
a. Plats and Riders. Clauses, plats, exhibits and riders, if any,
signed by the Landlord and the Tenant and endorsed on or affixed to this Lease
are a part hereof.
b. Waiver. The waiver by either Landlord or Tenant of any term,
covenant, or condition herein contained shall not be deemed to be a waiver of
such term, covenant or condition or any subsequent breach of the same or any
other term, covenant or condition herein contained. The subsequent acceptance of
Rent hereunder by Landlord shall not be deemed to be a waiver of any preceding
breach by Tenant of any term, covenant or condition of this Lease, other than
the failure of the Tenant to pay the particular rental so accepted, regardless
of Landlord's knowledge of such preceding breach at the time of the acceptance
of such Rent.
c. Notices. All notices and demands which may or are to be required
or permitted to be given by either party to the other hereunder shall be in
writing. All notices and demands by the Landlord to the Tenant shall be sent by
a) United States Mail, postage prepaid, or b) nationally recognized overnight
bonded courier, addressed to the Tenant at Colorado MEDtech, Inc. Attn: Ronald
Baum at 6175 Longbow Drive, Boulder, CO 80301, or to such other place as Tenant
may, from time to time, designate in a notice to the Landlord. All notices and
demands by the Tenant to the Landlord shall be sent by a) United States Mail,
postage prepaid, addressed to the Landlord at the Office of the Building, or to
such other person or place as the Landlord may, from time to time, designate in
a notice to the Tenant.
d. Joint Obligation. If there be more than one Tenant the
obligations hereunder imposed upon Tenants shall be joint and several.
e. Marginal Headings. The marginal headings and Article titles to
the Articles of this Lease are not a part of this Lease and shall have no effect
upon the construction or interpretation of any part hereof.
f. Time. Time is of the essence of this Lease and each and all of
its provisions in which performance is a factor.
g. Successors and Assigns. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.
h. Recordation. Neither the Landlord nor Tenant shall record this
Lease or a short form memorandum hereof without the prior written consent of the
other party.
i. Quiet Possession. Upon Tenant paying the Rent reserved hereunder
and observing and performing all of the covenants, conditions and provisions of
Tenant's part to be observed and performed hereunder, Tenant shall have quiet
possession of the Premises for the entire Term hereof, subject to all the
provisions of this Lease.
j. Late Charges. Tenant hereby acknowledges that late payment by
Tenant to Landlord of Rent or other sums due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed upon
Landlord by terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of Rent or of a sum due from Tenant shall not be
received by Landlord or Landlord's designee within five (5) business days after
said amount is due, then Tenant shall pay to Landlord a late charge equal to
five percent (5%) of such overdue amount. The parties hereby agree that such
late charges represent a fair and reasonable estimate of the cost that Landlord
will incur by reason of the late payment by Tenant. Acceptance of such late
charges by the Landlord shall in no event constitute a waiver of Tenant's
default with respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder.
Notwithstanding the foregoing to the contrary, Landlord agrees to provide
telephonic notice (but no more than once during any calendar year) to the C.F.O.
of Tenant of any default in timely payment of Rent and two (2) business days to
cure such default before imposing this late charge.
k. Prior Agreements. This Lease contains all of the agreements of
the parties hereto with respect to any matter covered or mentioned in this
Lease, and no prior agreements or understanding pertaining to any such matters
shall be effective for any purpose. No provision of this Lease may be amended or
added to except by an agreement in writing signed by the parties hereto or their
respective successors in interest. This Lease shall not be effective or binding
on any party until fully executed by both parties hereto.
l. Attorneys' Fees. In the event of any action or proceeding brought
by either party against the other under this Lease, the prevailing party shall
be entitled to recover all costs and expenses, including the fees of its
attorneys in such action or proceeding in such amount as the court may adjudge
reasonable as attorneys' fees.
10
m. Sale of Premises by Landlord. In the event of any sale of the
Building, and assignment of Tenant's Security Deposit to Purchaser, Landlord
shall be and is hereby entirely freed and relieved of all liability under any
and all of its covenants and obligations contained in or derived from this Lease
arising out of any act, occurrence or omission occurring after the consummation
of such sale; and the purchaser, at such sale or any subsequent sale of the
Premises, shall be deemed, without any further agreement between the parties or
their successors in interest or between the parties and any such purchaser, to
have assumed and agreed to carry out any and all of the covenants and
obligations of the Landlord under this Lease.
n. Subordination, Non-Disturbance and Attornment. Upon written
request of the Landlord, Tenant will, in writing, subordinate its rights
hereunder to the lien of any first mortgage or first deed of trust to any bank,
insurance company or other lending institution, now or hereafter in force
against the land and Building of which the Premises are a part, and upon any
buildings hereafter placed upon the land of which the Premises are a part, and
to all advances made or hereafter to be made upon the security thereof.
In the event any proceedings are brought for foreclosure, or
in the event of the exercise of the power of sale under any mortgage or deed of
trust made by the Landlord covering the Premises, the Tenant shall attorn to the
purchaser upon any such foreclosure or sale and recognize such purchaser as the
Landlord under this Lease.
Notwithstanding anything to the contrary contained herein,
Tenant shall only be obligated under this Paragraph 29(n) if such bank,
insurance company or other lending institution or purchaser upon any such
foreclosure or sale (a) recognizes Tenant's
interest under this Lease, (b) agrees that, so long as Tenant is not in default
under this Lease beyond any applicable cure periods, not to disturb Tenant's use
or possession of the Premises, and (c) executes and delivers a commercially
reasonable subordination, non-disturbance and attornment agreement.
o. Name. Tenant shall not use the name of the Building or of the
development in which the Building is situated for any purpose other than as an
address of the business to be conducted by the Tenant in the Premises.
p. Separability. Any provision of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provision hereof and such other provision shall remain in full force and effect.
q. Cumulative Remedies. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
r. Choice of Law. This Lease shall be governed by the laws of the
State of Colorado.
s. Signs and Auctions. Tenant shall, subject to compliance with
Applicable Laws, have the right to place any sign upon the Premises or the
exterior of the Building provided the sign and the installation thereof is
approved in advance in writing by the Landlord and provided, further, that upon
removal there is no evidence of a sign having been installed. Upon termination
of the Lease Tenant shall have the obligation to remove the sign at its sole
cost and restore the exterior wall to its original condition. Tenant shall have
the right to secure signage on the monument sign for the Building during the
Term. Until such time as the Building is no longer only occupied by Tenant,
Tenant shall be entitled to use the entire monument sign and at such time as the
Building is no longer only occupied by Tenant, Tenant shall be entitled to use a
proportionate portion of the monument sign equal to Tenant's occupancy of the
Building. Tenant shall not conduct any auction at the Building without
Landlord's prior written consent which shall not be unreasonably withheld,
conditioned or delayed.
t. Landlord's Liability. The liabilities of the members of the
Landlord pursuant to this Lease shall be limited to interest in the Property
(including all rents and other income derived therefrom) and to the assets of
the limited liability company, and Tenant, its successors and assigns hereby
waive all right to proceed against any of the partners, members, or the
officers, shareholders, or directors of any corporate partner of Landlord. The
term "Landlord," as used in this article, shall mean only the owner or owners at
the time in question of the fee title or an interest in a ground lease of the
Property. Notwithstanding anything to the contrary contained herein, the extent
of the Landlord's liability under this Lease shall be limited to the Property of
which the Premises herein are a part (including all rents and other income
derived therefrom) and the assets of the limited liability company, and Tenant
shall not seek any personal liability against Landlord or any of Landlord's
partners or members.
u. Waiver of Jury Trial. Landlord and Tenant waive trial by jury in
any action, proceeding or counterclaim brought by either of the parties to this
Lease against the other on any matters whatsoever arising out of or in any way
connected with this Lease, the relationship of Landlord and Tenant, Tenant's use
of occupancy of the Premises, or any other claims (except claims for personal
injury or property damage), and any emergency statutory or any other statutory
remedy.
v. Arbitration. Except for an action to gain possession of the
Premises and except as provided below, any and all disputes arising under or
related to this Agreement which cannot be resolved through negotiations between
the parties shall be submitted to binding arbitration. If the parties fail to
reach a settlement of their dispute within fifteen (15) days after the earliest
date upon which one of the parties notified the other(s) of its desire to
attempt to resolve the dispute, then the dispute shall promptly be submitted to
arbitration by a single arbiter through the Judicial Arbiter Group ("JAG"), any
successor of the Judicial Arbiter Group, or any similar arbitration provider who
can provide a former judge to conduct such arbitration if JAG is
11
no longer in existence, or an arbiter appointed by the court. The arbiter shall
be selected by JAG or the court on the basis, if possible, of his or her
expertise in the subject matter(s) of the dispute. The decision of the arbiter
shall be final, nonappealable and binding upon the parties, and it may be
entered in any court of competent jurisdiction. The arbitration shall take place
in Boulder, Colorado. The arbitrator shall be bound by the laws of the State of
Colorado applicable to the issues involved in the arbitration and all Colorado
rules relating to the admissibility of evidence, including, without limitation,
all relevant privileges and the attorney work product doctrine. All such
discovery shall be completed in accordance with the time limitations prescribed
in the Colorado Rules of Civil Procedure, unless otherwise agreed by the parties
or ordered by the arbitrator on the basis of strict necessity adequately
demonstrated by the party requesting an extension or reduction of time. The
arbitrator shall have the power to grant equitable relief where applicable under
Colorado law. The arbitrator shall issue a written opinion setting forth her or
his decision and the reasons therefor within thirty (30) days after the
arbitration proceeding is concluded. The obligation of the parties to submit any
dispute arising under or related to this Agreement to arbitration as provided in
this Paragraph shall survive the expiration or earlier termination of this
Agreement. Notwithstanding the foregoing, either party may seek and obtain an
injunction or other appropriate relief from a court to preserve or protect the
status quo with respect to any matter pending conclusion of the arbitration
proceeding, but no such application to a court shall in any way be permitted to
stay or otherwise impede the progress of the arbitration proceeding.
w. Financial Statements. At such time as Tenant ceases to be a
publicly traded corporation, Tenant, not more than one (1) time each calendar
year, shall provide their most recent annual report, including statements of
income and expense and statements of net worth ("financial statements") within
15 business days following the written request of Landlord. Landlord may request
said annual report once during any twelve (12) month period. Said annual report
shall be verified as being true and correct and Landlord agrees to keep said
annual report confidential, but may use the annual report for purposes of
obtaining financing upon the property. At the time Landlord requests annual
financial statements from Tenant for financing purposes, Landlord shall advise
Tenant to whom the annual report will be submitted and Landlord shall, if
requested to do so by Tenant, obtain from such individual or entity a written
agreement which shall provide that said annual report will be and shall remain
confidential. In the event Tenant is acquired by or merged with another entity
resulting in Tenant being a subsidiary of such other entity and Tenant files
consolidated financial statements with that entity, then Tenant shall only be
obligated to provide financial statements of such other entity so long as the
surviving entity assumes the Lease and outstanding obligations therein. Within
fifteen (15) days after the execution of this Lease, Tenant shall submit to
Landlord its most recent financial statements.
30. BROKERS. Tenant warrants that it has had no dealings with any real
estate brokers or agents in connection with the negotiation of this Lease
excepting only Chrisman Commercial and it knows of no other real estate broker
or agent who is entitled to a commission in connection with this Lease. Tenant
discloses to Landlord that it had an exclusive agency relationship with Cresa
Partners, which Tenant terminated on January 1, 2002, but for which a
termination fee may be owed by Tenant to Cresa Partners. Tenant hereby agrees to
indemnify and hold Landlord harmless of and from any and all damages, losses,
costs or expenses (including without limitation, all attorneys' fees and
disbursements) by reason of any claim of or liability to any other broker or
other person claiming by or through Tenant and arising out of or in connection
with the negotiation, execution and delivery of this Lease. Landlord hereby
agrees to indemnify and hold Tenant harmless of and from any and all damages,
losses, costs or expenses (including without limitation, all attorneys' fees and
disbursements) by reason of any claim of or liability to any other broker or
other person claiming by or through Landlord and arising out of or in connection
with the negotiation, execution and delivery of this Lease.
31. HAZARDOUS MATERIALS AND ENVIRONMENTAL CONSIDERATIONS
a. Tenant covenants and agrees that Tenant and its agents,
employees, contractors and invitees shall comply with all Hazardous Materials
Laws (as hereinafter defined). Without limiting the foregoing, Tenant covenants
and agrees that it will not use, generate, store or dispose of, nor permit the
use, generation, storage or disposal of Hazardous Materials (as hereinafter
defined) on, under or about the Leased Premises in violation of any applicable
Hazardous Materials Laws, nor will it transport or permit the transportation of
Hazardous Materials to or from the Leased Premises in violation of any
applicable Hazardous Materials Laws. Any Hazardous Materials located on the
Leased Premises shall be handled in an appropriately controlled environment
which shall include the use of such equipment (at Tenant's expense) as is
necessary to meet or exceed standards imposed by any Hazardous Materials Laws
and in such a way as not to interfere with any other tenant's use of its
premises. Upon breach of any covenant contained herein, Tenant shall, at
Tenant's sole expense, cure such breach by taking all action prescribed by any
applicable Hazardous Materials Laws or by any governmental authority with
jurisdiction over such matters.
b. Except for Hazardous Materials typically utilized by office
tenants (e.g. printing machine toner), Tenant shall inform Landlord at any time
of (i) any Hazardous Materials it intends to use, generate, handle, store or
dispose of, on or about or transport from, the Premises and (ii) of Tenant's
discovery of any event or condition which constitutes a violation of any
applicable Hazardous Materials Laws. Tenant shall provide to Landlord copies of
all communications to or from any governmental authority or any other party
relating to Hazardous Materials affecting the Premises.
c. Tenant shall indemnify and hold Landlord harmless from any and
all claims, judgments, damages, penalties, fines, costs, liabilities, expenses
or losses (excluding consequential damages, but, including without limitation,
diminution on value of the Premises, damages for loss or restriction on use of
all or part of the Premises, sums paid in settlement of claims, investigation of
site conditions, or any cleanup, removal or restoration work required by any
federal, state or local governmental agency, attorney's fees, consultant fees
and expert fees) which arise as a result of or in connection with any breach of
the foregoing
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covenants or any other violation contained herein shall also accrue to the
benefit of the employees, agents, officers, directors and/or partners of
Landlord. Landlord shall indemnify and hold Tenant harmless from any and all
claims, judgments, damages, penalties, fines, costs, liabilities, expenses or
losses (excluding consequential damages, but, including without limitation,
diminution on value of the Premises, damages for loss or restriction on use of
all or part of the Premises, sums paid in settlement of claims, investigation of
site conditions, or any cleanup, removal or restoration work required by any
federal, state or local governmental agency, attorney's fees, consultant fees
and expert fees) which arise as a result of or in connection with any violation
of Hazardous Materials Laws and existing conditions prior to the Commencement
Date, and which shall also accrue to the benefit of the employees, agents,
officers, directors and/or partners of Tenant.
d. Upon termination of the Lease and/or vacation of the Leased
Premises, Tenant shall properly remove all Hazardous Materials and shall provide
to Landlord an environmental audit report, prepared by a professional consultant
satisfactory to Landlord and at Tenant's sole expense, certifying that the
Leased Premises have not been subjected to environmental harm caused by Tenant's
use and occupancy of the Leased Premises; provided, however, Landlord reasonably
believes that such a report is necessary because of a notice of violation of
Hazardous Materials Laws, or Landlord reasonably believes a violation or problem
exists. It shall not be reasonable for Landlord to believe a violation or
problem exists solely by Tenant's use of or the existence of any Hazardous
Materials at the Premises. Landlord shall grant to Tenant and its agents or
contractors such access to the Leased Premises as is necessary to accomplish
such removal and prepare such report.
e. "Hazardous Materials" shall mean (a) any chemical, material,
substance or pollutant which poses a hazard to the Leased Premises or to persons
on or about the Leased Premises or would cause a violation of or is regulated by
any Hazardous Materials Laws, and (b) any chemical, material or substance
defined as or included in the definitions of "hazardous substances", "hazardous
wastes", "hazardous materials", "extremely hazardous waste", "restricted
hazardous waste", "toxic substances", "regulated substances", or words of
similar import under any applicable federal, state or local law or under the
regulations adopted or publications promulgated pursuant thereto, including, but
not limited to, the Comprehensive Environmental Response. Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Sec. 9601, et seq.; the Hazardous
Materials Transportation Act, as amended, 49 U.S.C. Sec. 1801, et seq.; the
Resource Conservation and Recover Act, as amended, 42 U.S.C. Sec. 6901, et seq.;
the Solid Waste Disposal Act, 42 U.S.C. Sec. 6991 et seq.; the Federal Water
Pollution Control Act, as amended, 33 U.S.C. Sec. 1251, et seq., of the Colorado
Revised Statutes. "Hazardous Materials Laws" shall mean any federal, state or
local laws, ordinances, rules, regulations, or policies (including, but not
limited to, those laws specified above) relating to the environment, health and
safety or the use, handling, transportation, production, disposal, discharge or
storage of Hazardous Materials, or to industrial hygiene or the environmental
conditions on, under or about the Leased Premises. Said term shall be deemed to
include all such laws as are now in effect or as hereafter amended and all other
such laws as may hereafter be enacted or adopted during the Term of this Lease.
f. All obligations of Tenant hereunder shall survive and continue
after the expiration of this Lease or its earlier termination for any reason.
g. Tenant further covenants and agrees that it shall not install any
storage tank (whether above or below the ground) on the Leased Premises without
obtaining the prior written consent of the Landlord, which consent may be
conditioned upon further requirements imposed by Landlord with respect to, among
other things, compliance by Tenant with any applicable laws, rules, regulations
or ordinances and safety measures or financial responsibility requirements.
32. MISCELLANEOUS
a. Landlord shall construct certain build-out improvements to the
Premises, including construction of suspended ceilings; exterior and
partitioning walls; installation of carpeting; painting; installation of fire
sprinkling system; HVAC, and lighting systems; and other improvements as agreed
upon in accordance with plans and specifications ("Plans") to be approved by
Landlord and Tenant, and attached hereto as Exhibit E (hereinafter collectively
referred to as the "Tenant Improvements"). Landlord and Tenant will use their
best efforts to prepare and approve construction drawings and specifications and
approve them in writing within twenty-one (21) days after the date of this
Lease. Tenant Improvements shall be completed pursuant to the provisions of the
Work Letter attached hereto as Exhibit F.
Landlord's Contribution (as defined in the Work Letter) for
Tenant Improvements is $800,000; provided, however, Landlord agrees to finance
the cost of the Tenant Improvements up to a maximum of $1,300,000.00 (the
"Occupancy Improvement Rent"). To the extent that the cost of said improvements
is less than or exceeds $800,000, then the Occupancy Improvement Rent set forth
in Paragraph 5.a above shall increase or decrease by amortizing the increase or
decrease. If the cost of Tenant Improvements increase or decrease by $1,000, the
Occupancy Improvement Rent will increase or decrease by $13.22. Tenant shall
have the option of amortizing the actual amount of the Occupancy Improvement
Rent over ten (10) years at 10% per annum, or paying up front the actual
Amortized Tenant Finish Amount. Notwithstanding anything to the contrary herein,
Tenant shall be entitled, at its sole discretion, to prepay the entire amount of
the Occupancy Improvement Rent at anytime during the Term, so long as Landlord
has the flexibility to prepay its loan on the Property. In the event any
prepayment of Landlord's loan would result in the additional payment of
prepayment penalties, and Tenant elects to prepay the Occupancy Improvement
Rent, in addition to the Occupancy Improvement Rent, Tenant shall pay such
prepayment penalties.
b. Tenant has the right, within 10 days prior to possession, to
inspect the Premises after Landlord completes the Tenant Improvements. Tenant
has the right to create a "punch list" of unfinished
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items based on Tenant's pre-possession inspection and to add to the "punch list"
for a period of 30 days after taking possession. Landlord is obligated to
complete items on the "punch list" to Tenant's reasonable satisfaction within 30
days of the receipt of the "punch list".
33. LANDSCAPING. Landlord covenants and agrees that it will expend at
least One Hundred Fifty Thousand Dollars ($150,000) on landscaping improvements
to the Property which improvements will be completed no more than four (4)
months after the Commencement Date. Landlord acknowledges and agrees that such
improvements are at Landlord's sole cost and expense and are not to be added to
Operating Expenses or deducted from Tenant's finish allowance.
34. OPTION TO RENEW
a. Provided that Tenant is not in default under the Lease beyond any
applicable cure period, Tenant shall have the option to renew the Lease for two
additional terms of five (5) years each (the "Option"), the first such period
from and after the date the initial Term ends ("First Option Period) and the
second such period from and after the date the First Option Period ends. Each
option must be exercised, if at all, by a written notice received by Landlord no
later than one (1) year before the end of the prior period.
b. The Option granted hereunder shall be upon the terms and
conditions of the Lease; provided, however, the monthly Base Rent to be paid by
Tenant to Landlord for applicable option period shall be an amount equal to the
Base Rent payable by Tenant for the calendar month immediately prior to the
exercise of the Option increased by the Consumer Price Index as set forth in
Section 5.b of this Lease.
35. OPTION TO PURCHASE
a. As an inducement to Tenant to enter into this Lease, Landlord
hereby gives and grants to Tenant the exclusive right, privilege and option
(hereinafter referred to as the "Option") to purchase the Property from
Landlord, together with all easements, hereditaments, improvements constructed
thereon, and appurtenances thereto, upon and subject to the terms, covenants and
conditions hereinafter set forth. This Option is not assignable by Tenant, and
shall terminate upon any assignment by Tenant, except if such assignment is to
the parent of Tenant, to Tenant's affiliate or is related to a merger or
acquisition of Tenant. Landlord acknowledges that the Option is an integral and
material term of this Lease, but for which Tenant would not have entered into
this Lease.
b. (1) The Option may be exercised if no uncured default described
in Paragraph 23 of this Lease exists. The Option shall be exercised by Tenant
serving upon Landlord written notice (hereinafter referred to as the "Exercise
Notice") of Tenant's election to exercise the Option in accordance with the
terms and conditions hereof. Landlord shall give Tenant notice of its intent to
sell the Building and/or Property prior to marketing it for sale.
(2) Upon service of the Exercise Notice, Landlord shall be
obligated to convey the Property to Tenant and Tenant shall be obligated to pay
the Purchase Price (as defined herein) in accordance with the terms and
provisions hereof.
c. The purchase price for the Property (hereinafter referred to as
the "Purchase Price") shall be ninety-eight percent (98%) of the fair market
value of the Property to be determined as follows: (i) by written agreement of
the parties reached within thirty (30) days after the date of the Exercise
Notice; or (ii) if the parties are unable to so agree within said thirty (30)
day period, then by appraisal to be conducted in accordance with the provisions
set forth below. Notwithstanding anything to the contrary herein, in no event
shall the Purchase Price be less than the sum of $3,000,000, plus the amount of
the unamortized Occupancy Improvement Rent, plus the portion of any
non-prepayable Deed of Trust against the Property, if any, which Landlord can
verify the proceeds of which were not utilized to return any capital to Landlord
or any of its members (the "Minimum Purchase Price"). The Minimum Purchase Price
herein shall be personal to Eastside Properties, LLC and in the event the
Property is sold, such Minimum Purchase Price shall terminate.
Within ten (10) days after the expiration of the thirty (30) day period referred
to above, the Tenant shall appoint a disinterested person with at least ten
years professional experience as a M.A.I. real estate appraiser in Boulder CO
area. Within ten (10) days thereafter, the Landlord shall by written notice to
the Tenant appoint a second disinterested person with at least ten years
professional experience as a M.A.I. real estate appraiser in the Boulder, CO
area. The appraisers thus appointed shall appoint a third disinterested person
with at least ten years professional experience as a M.A.I. real estate
appraiser in Boulder, CO area, and each of such three appraisers shall promptly,
and no event longer than thirty (30) days, and independently make a
determination of the fair market value of the Property, after which the ultimate
fair market value of the Property shall be determined by calculating the average
of the two (2) closest appraisals. If, within five (5) days after the
appointment of the second appraiser, the two appraisers appointed by the parties
shall be unable to agree upon the appointment of a third appraiser, they shall
give written notice of such failure to agree to the parties, and, if the parties
fail to agree upon the selection of such third appraiser within five (5) days
after the appraisers appointed by the parties have given such notice, then
within five (5) days thereafter either of the parties upon written notice to the
other party may apply for such appointment to the local Judicial Arbiters Group.
The Landlord and Tenant each shall be entitled to present evidence and argument
to the appraisers. The determination of the fair market value of
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the Property pursuant to the terms of this Paragraph shall be conclusive upon
the parties. The appraisers shall give written notice to the parties stating
their determination, and shall furnish to each party a copy of such
determination signed by them. In the event of the failure, refusal, or inability
of any appraiser to act, a new appraiser qualified as provided above shall be
appointed in his stead, which appointment shall be made in the same manner as
hereinabove provided for the appointment of the appraiser so failing, refusing,
or unable to act. The expenses of each appraisal conducted in accordance with
the provisions of this paragraph shall be borne by the Tenant. Anything to the
contrary notwithstanding, Tenant shall have the right to rescind the exercise of
its Option by written notice to Landlord within ten (10) days after receipt of
written notice of the arbitrators' determination of the Purchase Price, in which
event Tenant shall pay, in addition to the costs of the appraisers, any
reasonable costs actually incurred by Landlord pursuant to an arbitration with
respect thereto.
The term "fair market value" shall mean the price, expressed in terms of cash,
which the Property would bring if exposed upon an open and competitive market
for a reasonable length of time under all conditions requisite to a fair sale,
with the purchaser being willing but under no compulsion to buy and not in
possession and the seller being willing but under no compulsion to sell, with
both parties having full knowledge as to all the uses to which the Property
might be put and considering the highest and best use of the Property with the
Lease in place.
d. Landlord shall convey the Property by means of a special warranty
deed (hereinafter referred to as the "Deed") subject, however, to the following
liens and encumbrances (the "Permitted Encumbrances"): (1) Restrictions,
conditions, reservations, easements and limitations of record and any additional
restrictions, conditions, reservations, easements, liens and encumbrances which
are placed of record by any action or failure to act by Tenant resulting in
consensual or non-consensual encumbrances against the Property;
(2) Real estate taxes and assessments, both general and
special;
(3) Zoning and building ordinances, if any;
(4) Any liens and encumbrances, or other matters of record,
created or caused by Tenant; and
(5) such other matters as Tenant may approve in its sole and
absolute discretion.
All funds and documents required hereunder shall be deposited in escrow with the
Escrow Agent (as hereinafter defined) prior to the Closing Date.
e. The obligation of Tenant to consummate the purchase of the
Property shall be subject to Tenant's ability at closing to obtain an owner's
fee policy of title insurance (hereinafter referred to as the "Title Policy")
issued by a title company selected by Tenant and as to whom Landlord has no
reasonable objection (the "Title Company") in the amount of the Purchase Price
(provided, however, that Landlord shall not be required to update any survey or
provide a new survey for the Property nor shall Landlord be responsible for
removal of any mechanic's liens, except to the extent that any work or services
performed with respect to the Property has been made by or at the specific
request of Landlord), showing title to be good in Tenant subject only to the
Permitted Encumbrances. Tenant shall pay for the cost of the Title Policy.
Tenant shall order a commitment for the Title Policy from the Title Company
within ten (10) business days after Tenant's delivery to Landlord of the
Exercise Notice, and shall direct the Title Company to deliver a copy thereof to
Landlord, together with copies of all items shown as requirements or exceptions.
Tenant shall have a period of thirty (30) days after receipt of the Commitment
in which to notify Landlord of any exceptions to title to which Tenant objects
(hereinafter referred to as the "Title Defects"). Landlord shall pay and
discharge on the Closing Date any Title Defects which are in the nature of liens
or mortgages against the Property, including any Deed of Trust granted by
Landlord that may be paid and released, but excluding any Deed of Trust that by
its terms cannot be pre-paid without penalty. No exceptions to title permitted
under subparagraph (d) above shall be deemed to be Title Defects.
f. Upon receipt by Landlord of Tenant's notification of Title
Defects, Landlord shall have thirty (30) days in which to cure said Title
Defects without diminishing or relieving Tenant of its obligations hereunder.
Should Landlord be unwilling or fail to cure said Title Defects within the
period provided above, Tenant shall, as its sole remedy, have the option to (i)
accept the Property subject to the Title Defects without reduction in Purchase
Price, except however, the Purchase Price shall be reduced by any Deed of Trust
granted by Landlord which is not released at Closing, or (ii) declare this
Property Option null and void, except for the cost of escrow incurred to that
date (which cost shall be borne by Tenant), and thereafter both parties shall be
relieved of any further liability under the Option, but the Lease shall continue
in full force and effect. Tenant shall notify Landlord of its election within
five (5) days after receipt of notice by Landlord of its failure to cure the
Title Defects.
g. Title Company shall act as Escrow Agent. A copy of this Lease
shall be delivered to, and shall constitute instructions to, the Escrow Agent.
The Escrow Agent may attach its "standard conditions of acceptance", provided,
however, if there is a conflict between the provisions of this Lease and the
provisions of said standard conditions, the provisions of this Lease shall
prevail.
15
h. Real estate taxes and assessments, both general and special, and
all charges for utilities, shall not be prorated but shall be assumed by Tenant.
Rent, including Base Rent and Operating Expenses, except those assumed by
Tenant, shall be prorated to the Closing Date.
i. (1) On the Closing Date, at such time as the Escrow Agent has
in its possession all funds representing the Purchase Price, the Deed and all
other documents required from Landlord and/or Tenant, it shall pay off any Deed
of Trust granted by Landlord that may be prepaid, file the Deed for record,
transferring title to the Tenant, issue the Title Policy to the Tenant as
hereinabove provided and, simultaneously, pay to Landlord the Purchase Price,
less any deductions provided for herein.
(2) The Escrow Agent shall deliver to the Tenant the Deed, the
Title Policy and all funds remaining to the credit of Tenant after charging
Tenant and deducting from such funds: (A) any amounts due Landlord by reason of
pro-rations hereunder; (B)one-half (-1/2) of the escrow fee; and (C) any
intangible tax, documentary stamps, cost of recording and other costs incidental
to the making or recording of a mortgage to be placed on the Property; and the
cost of the Lender's Title Policy. On the Closing Date, Tenant shall deposit
with an Escrow Agent funds which are sufficient to pay the foregoing costs.
(3) The Escrow Agent shall deliver to Landlord the funds in
its possession to the credit of Landlord after charging the Landlord and
deducting from such funds: (A) any amounts due Tenant by reason of any
pro-rations hereunder, (B) one-half (-1/2) of the escrow fee; and (C) the cost
of the Owner's Title Policy.
(4) All necessary instruments, documents and funds shall be
deposited in escrow with the Escrow Agent no later than the day prior to the
Closing Date. Unless the parties hereto otherwise agree in writing or unless
extended pursuant to the terms hereof, the date for the closing of the purchase
of the Property (the "Closing Date") shall be thirty (30) days from the date of
establishment of the Purchase Price in accordance with subparagraph (c) of this
Paragraph.
(5) It is understood and agreed that in the event that, for
any reason, there shall fail to be a closing pursuant to the terms of the
Option, then the balance of this Lease, exclusive of this Paragraph, shall
continue in full force and effect as if said paragraph were not a part hereof.
(6) If Tenant fails to exercise the option to purchase the
Property, or if Tenant is not entitled to exercise the option as set forth
above, or this Lease has expired or has been terminated and is not then in full
force and effect, the attempted exercise of Option shall be void and of no
effect. If on the Closing Date, there is a default by Tenant of which Tenant has
received notice as provided herein and which remains uncured after the
applicable cure period set forth therein, or the Lease has been terminated and
is not then in full force and effect, at the Landlord's option, Tenant shall
have no right to purchase the Property and the exercise of the Option shall be
deemed void and of no effect.
j. Notwithstanding anything to the contrary herein, the purchase and
sale of the Property shall be subject to the consent of any lender which is the
beneficiary of a Deed of Trust which may be prepaid, granted by Landlord.
36. CONTINGENCIES. Tenant acknowledges that Landlord does not own the Property
or the Building. Rather, Landlord intends to enter into a Contract to Buy and
Sell Real Estate with the current owner of the Property (the "Original
Contract"). Notwithstanding anything contained herein to the contrary, this
Lease is contingent upon Landlord delivering to Tenant all of the following
("Landlord's Contingencies"):
a. a copy of the Original Contract, executed by Landlord and the
current owner of the Property, by January 23, 2002, with no conditions on the
closing under the contract except the payment by Landlord of the purchase price
and the delivery of a deed for the Property by the current owner;
b. a financing commitment, by February 15, 2002, reasonably
satisfactory to Tenant, from a lender or other private sources (members of the
Landlord's limited liability company) committing to fund the total purchase
price for Landlord's acquisition of the Property;
c. Landlord's acquisition of the Property from the current owner on
or before March 31, 2002.
If Landlord fails to satisfy any of Landlord's Contingencies within the time
periods set forth above, Tenant, upon written notice to Landlord, shall be
entitled to terminate this Lease. In the event of Tenant's termination, Landlord
agrees to reimburse Tenant the engineering and architectural costs (in an amount
not to exceed $25,000) incurred by Tenant in connection with this Lease and the
Work Letter, within ten (10) days of Landlord's receipt of an invoice from
Tenant for such costs.
d. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THIS
LEASE SHALL NOT BE A VALID AND ENFORCEABLE OBLIGATION OF TENANT UNLESS TENANT
OBTAINS APPROVAL OF THE LEASE BY TENANT'S BOARD OF DIRECTORS AND TENANT DELIVERS
A DULY EXECUTED DOCUMENT EVIDENCING SUCH APPROVAL TO LANDLORD ON OR BEFORE 5:00
P.M., JANUARY 18, 2002.
16
LANDLORD: TENANT:
EASTSIDE PROPERTIES, LLC COLORADO MEDTECH, INC.
By: By:
------------------------------ ----------------------------
Steven P. Chrisman Name:
Manager -------------------------
5777 Central Avenue, #110 Title:
Boulder, CO 80301 ------------------------
Tax I.D.
------------
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