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EXHIBIT 10.6
INNOTRAC LEASE
THIS LEASE is made as of the 16TH DAY OF JUNE, 1999, between LOCKHEED
MARTIN CORPORATION ("LANDLORD") and INNOTRAC CORPORATION ("TENANT").
RECITALS
WHEREAS, the premises (the "PREMISES"), as depicted on the floor plan
attached hereto and incorporated herein as EXHIBIT A, is composed of
approximately 87,310 rentable square feet on the ground floor of that certain
building (the "BUILDING") commonly known as #5 William White, which Building
contains approximately 144,341 rentable square feet and is currently part of the
two-building campus approximately depicted on the site plan attached hereto and
incorporated herein as EXHIBIT B and totaling 317,860 rentable square feet. The
land on which such two-building campus is located and all improvements thereon
are herein called the "PROJECT", and that portion of such land on which the
Building is situated is herein called the "BUILDING LAND".
ACCORDINGLY, Landlord and Tenant agree:
1.0 PREMISES; COMMON AREAS. Landlord hereby leases and demises to Tenant,
and Tenant leases and takes from Landlord, upon and subject to the covenants,
agreements, terms, provisions and conditions of this Lease, the Premises. The
Premises contains Eighty-seven Thousand Three Hundred Ten (87,310) rentable
square feet of the Building and is located at #5 William White Blvd., Pueblo,
Colorado. For the purposes of pro rata calculations, the Premises comprises 60%
("TENANT'S BUILDING SHARE") of the rentable square footage of the Building and
27% ("TENANT'S PROJECT SHARE") of the rentable square footage of the Project.
Landlord also grants to Tenant, as an appurtenance to the Premises, the
nonexclusive right to use, in accordance with and subject to the terms and
conditions of this Lease and in common with Landlord and other tenants of the
Building or Project, (I) common areas of the Building and other common areas
located on the Building Land, including, without limitation, common lobbies,
public corridors, stairways, elevators, rest rooms, entranceways, landscaped
areas, sidewalks, driveways, service roads, loading facilities, surface parking
lots and all other common areas and facilities located from time to time on the
Building Land which Landlord from time to time designates and makes available as
common areas to benefit and serve the Building or the Building Land (the
"BUILDING LAND COMMON AREA"), and (II) Project driveways necessary to provide
access from the Building or the Building Land to or from a public street and
other Project common areas reasonably necessary for the full enjoyment of the
use of the Premises by Tenant and its invitees and directly benefiting the
Premises, other than Building Land Common Areas (the "PROJECT COMMON AREA"). The
Building Land Common Area and the Project Common Area are collectively called
the "COMMON AREA".
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2.0 TERM.
2.1 COMMENCEMENT DATE. The initial term of this Lease (which initial term,
together with any Option Terms, is hereinafter called the "TERM") will begin on
AUGUST 1, 1999 ("COMMENCEMENT DATE") and end on SEPTEMBER 30, 2004.
2.2 PERFORMANCE OF TENANT IMPROVEMENTS. Tenant has the right to enter the
Premises and the Project and, at Tenant's option, to begin construction of
Tenant's improvements or the Parking Lot Expansion (as hereinafter defined), or
both, beginning upon the execution of this Lease. All terms of this Lease will
apply to Tenant's entry of the Premises, except for SECTIONS 4.0 AND 5.0 and any
other provision of this Lease concerning the payment of Rent (as hereinafter
defined); PROVIDED, HOWEVER, that from and after the date Tenant begins
conducting business in or from any portion of the Premises, Tenant shall pay its
share of operating expenses, as provided in SECTION 5.0, below, with respect to
such portion.
2.3 RENT COMMENCEMENT. Base Rent (as hereinafter defined) will commence on
OCTOBER 1, 1999 (the "RENT COMMENCEMENT DATE") and will continue throughout the
Term of this Lease.
3.0 OPTIONS.
3.1 OPTION TO EXTEND. Landlord hereby grants to Tenant an option to extend
the initial Lease term ("INITIAL TERM") with respect to the Premises for TWO (2)
ADDITIONAL PERIODS of FIVE (5) YEARS each (each such option is hereinafter
called an "OPTION", and each such additional period is hereinafter called an
"OPTION TERM") upon and subject to the terms and conditions set forth in this
Lease. An Option shall be exercised, if at all, by Tenant's delivery of written
notice of exercise to Landlord not later ONE HUNDRED EIGHTY (180) DAYS prior to
the expiration date of the Initial Term or the first Option Term, as the case
may be. All of the terms of this Lease shall apply to the Option Term(s), except
that annual Base Rent for each Option Term shall be $5.33 per rentable square
foot for warehouse space and $6.33 per rentable square foot of office space. The
Base Rent shall thereafter increase at an annual rate of THREE PERCENT (3%) on
each anniversary date.
3.2 FIRST RIGHT OF EXPANSION. If at any time prior to the expiration of the
Term, Landlord receives a bona fide offer for the lease of all or any portion of
the Building not then leased by Tenant (the "EXPANSION SPACE"), Tenant shall
have the right of first refusal to lease the Expansion Space, and Landlord
shall, within FIVE (5) DAYS after receipt of same, give Tenant written notice of
such offer. Tenant will then have FIFTEEN (15) DAYS from Tenant's actual receipt
of such notice, to accept or reject the Expansion Space. The rent for the
Expansion Space will be at the same rate as Tenant is then paying for like type
space (e.g., office space, warehouse space). Expansion Space will be leased with
3/1000 parking spaces. If Tenant accepts the Expansion Space, Landlord and
Tenant shall execute an amendment to this Lease to reflect additions to the
Premises resulting from the exercise of the right of refusal to lease. Tenant's
lease of any Expansion Space pursuant to this right of first refusal will be on
all the terms and conditions set forth in this Lease except as to parking, free
rent, and pro rata share.
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4.0 BASE RENT. Beginning on the Rent Commencement Date, Tenant will pay
base rent in monthly installments ("BASE RENT") in advance, on or before the
first day of each month, in the following amounts: (I) until the expiration of
the thirty-sixth month of the Term, monthly Base Rent shall be THIRTY-SIX
THOUSAND FOUR HUNDRED EIGHTY-NINE AND 75/100 DOLLARS ($36,489.75) (calculated
using a monthly rental rate of $0.46 for the approximately 44,982 rentable
square feet of office space within the Premises and $0.38 for the approximately
42,328 rentable square feet of warehouse space within the Premises), and (II)
for months thirty-seven (37) to sixty-two (62) of the Term, monthly Base Rent
shall be THIRTY-EIGHT THOUSAND THREE HUNDRED FOURTEEN AND 24/100 DOLLARS
($38,314.24) (calculated using a monthly rental rate of $0.48 for the
approximately 44,982 rentable square feet of office space within the Premises
and $0.39 for the approximately 42,328 rentable square feet of warehouse space
within the Premises).
If the Term commences on a day other than the first day of a calendar month or
ends on a day other than the last day of the calendar month, then monthly rent
will be appropriately prorated by Landlord based on the actual number of
calendar days in such month. If the Term commences on a day other than the first
day of a calendar month, then the prorated monthly rent for such month will be
paid on or before the first day of the Term. Monthly rent will be paid to
Landlord, without written notice or demand, and without deduction or offset, in
lawful money of the United States of America at Landlord's address, or to such
other address as Landlord may from time to time designate in writing.
5.0 OPERATING EXPENSES. In addition to Base Rent, beginning with the date
Tenant begins to conduct business in or from any portion of the Premises, Tenant
will pay Tenant's Building Share of the operating expenses for each calendar
year or partial calendar year during the Term, which operating expenses shall
include the Building's pro rata share (approximately 43%) of operating expenses
billed with respect to the entire Project Common Area.
5.1 OPERATING EXPENSES. (A) As used in this Lease, the term "OPERATING
EXPENSES" means the reasonable costs actually paid or incurred by Landlord
during the Lease Term for the maintenance of the Common Areas and Premises,
including without limitation real and personal property taxes and assessments;
wages, salaries, and compensation of employees to the extent actually performing
maintenance of the Common Areas or Premises; consulting, accounting, legal,
depreciation on personal property and equipment; janitorial in the common areas,
maintenance and security services; management fees and costs, and office rent or
rental value of space in the Project used or furnished by Landlord as a
management office; power, water, waste disposal, and other utilities; materials
and supplies; maintenance and repairs; insurance obtained with respect to the
Building and any other costs, charges and expenses that under general acceptable
accounting principles would be regarded as a management, maintenance, and
operating expense; 100% of the cost of repair to the service road, loading
docks, or parking lots or any other areas of the Building or Project that exceed
normal wear and tear, due to Tenant's distribution use of the Premises; cost
(amortized over the useful life of such improvements, as determined in
accordance with generally accepted accounting principles ("GAAP")) of any
capital improvements that are made to the Common Area or the Premises by
Landlord (i) for the purpose of reducing operating expenses, or (ii) after the
date of this Lease that are necessary to comply with any applicable requirement
of any governmental law or regulation that was not
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applicable to the Common Area or the Premises as of the date of this Lease to
the extent that such improvement is not required as a result of the particular
use by, or any improvements constructed by or for, any other tenant or occupant
of the Project; and other reasonable costs, charges and expenses that under GAAP
would be regarded as operating expenses, as defined herein.
(B) Operating expenses will not include:
(1) depreciation on any portion of the Project;
(2) costs of alterations of space or other improvements made for tenants
of the Project;
(3) finders fees and real estate brokers' commissions;
(4) ground lease payments, mortgage principal or interest;
(5) capital improvements other than as may be expressly included in
subparagraph (a), above;
(6) costs of replacements of personal property and equipment for which
depreciation costs are included as an operating expense;
(7) costs of excess additional services provided to any tenant in the
Building that are directly billed to such tenants;
(8) the cost of repairs due to casualty or condemnation; (9) any cost due
to Landlord's breach of the Lease;
(10) any income, estate, inheritance, or other transfer tax and any excess
profit, franchise, or similar taxes on Landlord's business;
(11) all costs, including legal fees, relating to activities for the
solicitation and execution of leases of space in the Project; and
(12) any legal fees incurred by Landlord in enforcing its rights under
other leases for premises in the Project.
5.2 TAXES.
(A) Tenant will reimburse Landlord for the following taxes ("TAXES"), and
Landlord shall pay all such Taxes to the appropriate taxing authority when due:
(1) taxes that are payable upon or measured by rent, including without
limitation, any gross revenue tax, excise tax, or value added tax
levied by the federal government or any other governmental body with
respect to the receipt of rent; and
(2) upon this transaction or any document to which Tenant is a party
creating or transferring an interest or an estate in the Premises; and
(3) Tenant's Building Share of ad valorem taxes assessed against the
Building and the Building Land.
(B) Tenant will not be obligated to pay any inheritance tax, gift tax, transfer
tax, franchise tax, income tax (based upon net income), profit tax, or capital
levy imposed upon Landlord.
(C) Tenant will pay promptly when due all personal property taxes on Tenant's
personal property in the Premises and any other taxes required by law to be paid
by Tenant that if not paid would give rise to a lien on the Premises or Tenant's
interest in the Premises.
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5.3 UTILITIES.
(A) Tenant agrees to pay during the term of this Lease 100% of all charges for
such utilities (including without limitation water, electricity, sewage, gas,
and any other utility services) used by Tenant in connection with the operation
of the Premises. If any such utility services are not separately metered or
billed to Tenant but rather are billed to and paid by Landlord, Tenant will pay
to Landlord, within THIRTY (30) DAYS after receipt of written notice and
reasonable evidence thereof from Landlord or on the first day of the following
month, the cost of any such utilities submetered to the Premises or a reasonable
proportionate share (based on the square footage of the Premises relative to
other premises in the Building and the use of the Premises relative to the use
of such other premises) of any such utilities provided to the Building and not
separately submetered.
(B) Pursuant to SECTION 5.1, above, Tenant agrees to pay during the term of this
Lease its pro rated charges for such utilities (including without limitation
water, electricity, sewage, gas, and any other utility services) used in the
Common Area.
(C) Tenant will install at its sole cost and expense telephone service to the
Premises. Tenant will pay the appropriate supplier for the telephone service
billed directly to Tenant.
5.4 ADDITIONAL RENT. Amounts payable by Tenant according to this SECTION 5.0
shall be deemed to be, and will be payable as, "Additional Rent", without
deduction or offset (Base Rent, such Additional Rent and any other sums payable
by Tenant to Landlord under this Lease are herein collectively called "RENT").
If Tenant fails to pay any amounts due according to this SECTION 5.0, Landlord
will have all the rights and remedies available to it on account of Tenant's
failure to pay Base Rent. Except as otherwise provided herein, Additional Rent
shall be paid monthly (according to Landlord's reasonable good faith estimate)
with subsequent annual reconciliation, in accordance with the following
procedures:
(A) At the commencement of the Term and each subsequent anniversary date,
Landlord shall give Tenant notice of its reasonable estimate of operating
expenses and Taxes payable to Landlord by Tenant under SECTION 5.0 above for the
calendar year in which the Term commences and for each subsequent calendar year
during the Term, as the case may be. On or before the first day of each month
from and after the Rent Commencement Date, Tenant shall pay to Landlord 1/12th
of such estimated Additional Rent, provided that if such notice is not given on
the anniversary date, Tenant shall continue to pay on the basis of the prior
year's estimate until the month after such notice is given. If at any time or
times such Additional Rent for the current calendar year varies from such
estimate by more than 5%, Landlord may, by notice to Tenant, reasonably revise
its estimate for such year to account for such increase, and subsequent payments
by Tenant for such year shall be based upon such revised estimate.
(B) Within 90 DAYS after the close of each calendar year or as soon after such
90-day period as practicable, Landlord shall deliver to Tenant a statement of
the actual operating expenses and Taxes for such calendar year. If on the basis
of such statement Tenant owes an amount that is less than the estimated payments
for such calendar year previously made by Tenant, Landlord shall refund such
excess to Tenant within 30 DAYS after delivery of the statement. If on the basis
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of such statement Tenant owes an amount that is more than the estimated payments
for such calendar year previously made by Tenant, Tenant shall pay the
deficiency to Landlord within 30 DAYS after delivery of the statement.
6.0 SECURITY DEPOSIT. Tenant has deposited THIRTY-SIX THOUSAND SIX HUNDRED
FORTY-TWO AND 34/100 DOLLARS ($36,642.34) with Landlord as Security Deposit for
Tenant's payment of rent and performance of its other obligations under this
Lease and any renewals or extensions of this Lease. If Tenant defaults in its
payment of rent or performance of its other obligations under this Lease, and
such default continues beyond any applicable notice and cure period, Landlord
may use all or part of the Security Deposit for the payment of the amount of
Rent for which payment is in such default, or for the payment of any other
reasonable amount necessary for Landlord to spend by reason of Tenant's default.
If Landlord so uses any portion of the Security Deposit, Tenant will restore the
Security Deposit to its original amount within FIVE (5) DAYS after written
demand from Landlord. The Security Deposit will not be a limitation on
Landlord's damages or other rights under this Lease, or a payment of liquidated
damages, or an advance payment of the Rent. Upon the expiration of the Term or
earlier termination of this Lease, Landlord shall refund to Tenant any Security
Deposit not used by Landlord as aforesaid. Landlord may deliver the Security
Deposit to a purchaser of the Premises and be discharged from further liability
with respect to it, so long as such purchaser assumes Landlord's obligations and
duties with respect to the Security Deposit.
7.0 USE. The Premises will be used for business offices, distribution and
warehouse and for no other purposes. Without limiting the foregoing, Landlord
specifically approves Tenant's use of the Premises for a call center. The
Premises will be used in a careful, safe and proper manner. The Premises will
not be used for any activity or in any manner that would tend to lower the
character of the Building or Project. Tenant will not use or occupy or permit
the Premises to be used or occupied for any purpose or in any manner prohibited
by the laws of the United States, or the State of Colorado, or the ordinances of
the City of Pueblo. Tenant will not commit waste in, on or about the Premises,
the Building or the Project. Tenant will conduct its business and control its
employees, agents, invitees and visitors in such manner as not to create any
nuisance, interfere with, annoy, or disturb any other tenant or occupant of the
Building or Project or Landlord in its operation of the Building or Project.
Tenant will not do anything that is prohibited by the standard form of extended
coverage fire policy, or that will increase the existing rate of such insurance
or cause a cancellation in Landlord's insurance.
8.0 TENANT ALTERATIONS.
8.1 GENERAL. During the Term, Tenant will not make or allow to be made any
alteration, additions, or improvements to or of the Premises, the Building or
the Project, or attach any fixtures or equipment to the Premises or Building,
without first obtaining Landlord's written consent, which will not be
unreasonably withheld. All such alterations, additions, and improvements
consented to by Landlord that are required to be made as a result of the nature
of Tenant's use of the Premises:
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(A) Will be performed by contractors approved by Landlord, which will not be
unreasonably withheld, and subject to reasonable conditions specified by
Landlord.
(B) The general contractor shall carry and maintain contractor liability
insurance and shall agree in writing (whether in the Contractor Agreement or
otherwise) that Landlord is not responsible for payment for any labor or
materials ordered by Tenant and that no lien shall be filed against the Building
or the Project therefor.
(C) Tenant will be required to provide Landlord with a copy of "as built"
drawings or field-marked construction drawings of the alteration, addition or
improvement within 30 DAYS of completion.
(D) All work with respect to any alterations, additions or improvements will be
done in a good and workmanlike manner, and diligently prosecuted to completion
to the end that the Building will be a complete unit, except during the period
necessarily required for such work.
8.2 COMPLIANCE WITH LAWS BY TENANT. Prior to commencing any alteration, addition
or improvement Tenant must acquire all necessary building permits. All
alterations, additions or improvements made by Tenant shall be made at Tenant's
sole cost and expense, in accordance with this Lease and all applicable laws,
codes, ordinances and all governmental regulations and all requirements of any
insurer providing coverage for the Premises.
8.3 ALTERATIONS BECOME PART OF PREMISES. All alterations, additions or
improvements made to the Premises by Tenant (except movable furniture, equipment
and trade fixtures) shall become part of the Premises and Landlord's property
immediately upon installation thereof unless Landlord requires the removal
thereof prior to the termination of this Lease. Tenant shall have no obligation
to remove the alterations, additions or improvements from the Premises unless
requested by Landlord in writing at the time of Landlord's consent thereto, in
which event Tenant shall remove such items and repair any damage caused thereby
at Tenant's sole cost and expense. Notwithstanding the foregoing, Tenant shall
be permitted to remove from the Premises any such alterations, additions and
improvement if, at the time of their installation, Landlord and Tenant have
mutually agreed that Tenant may remove the same. Any alteration, addition or
improvement that Tenant is required or, at Tenant's option, permitted to remove,
together with any movable furniture, equipment and trade fixtures, shall be
removed at Tenant's expense prior to the termination of this Lease and Tenant
shall promptly repair any damage to the Premises caused by such removal. If
Tenant fails to remove any alteration, addition or improvement that Tenant is
required to remove or fails to repair damage caused by such removal, Landlord
shall give written notice thereof to Tenant and if Tenant shall not have removed
such addition, alteration or improvement within TEN (10) DAYS following Tenant's
receipt of such notice, Landlord shall have the right to undertake such action
for Tenant and to collect within TEN (10) DAYS after written demand from
Landlord all reasonable costs incurred in such removal or repair, together with
Default Interest (defined in PARAGRAPH 24.6) from the date TEN (10) DAYS after
Landlord's request.
9.0 LIENS. Tenant shall keep the Premises free and clear of all liens incurred
by or resulting from acts of Tenants or any subtenant or any contractor or
subcontractor of Tenant. If any such
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lien is filed, Tenant shall, within TEN (10) DAYS following Tenant's receipt of
notice of such lien, at its expense, cause the lien to be fully discharge by
paying the obligation secured thereby or by obtaining and recording a surety
bond of at least 150% of the amount of the claim plus estimated costs of
interest, and in accordance with applicable law. Tenant is not authorized to act
for or on behalf of Landlord for the purpose of constructing any improvements to
the Premises, and neither Landlord nor Landlord's interest in the Premises shall
be subject to any obligations incurred by Tenant. If any lien is filed or any
action commenced affecting the title to the Premises Tenant shall upon receiving
such notice immediately notify the Landlord. Tenant shall indemnify Landlord
against and hold harmless Landlord, the Premises, the Building and the Project
free, clear and harmless of and from all mechanics liens and claims of liens,
and all other liabilities, liens, claims and demands on account of such work by
or on behalf of Tenant.
10.0 PARKING LOT EXPANSION. Tenant shall construct at any time during the Term
up to, at Tenant's option, an additional 300 parking spaces within the general
area designated in EXHIBIT C or within another area on the Building Land
reasonably acceptable to Landlord (the "PARKING LOT EXPANSION"). The Parking Lot
Expansion will be performed in accordance with SECTIONS 8.0 AND 9.0 above. The
initial Parking Lot Expansion work for the parking spaces initially desired by
Tenant must be completed, subject to force majeure, within SIX (6) MONTHS of the
execution of this Lease. Such completion will be evidenced by a certificate of
occupancy issued by the City of Pueblo.
11.0 ASSIGNMENT/SUBLETTING. Tenant will not assign this sublease in whole or in
part and will not sub-sublease the Sublease Premises in whole or in part without
the prior written consent of Landlord, which Landlord agrees will not be
unreasonably withheld. However, Landlord and Tenant acknowledge that it will be
reasonable for Landlord to withhold its consent in the following instances:
(i) the sublease does not contain a reasonable security deposit
provision;
(ii) banking, financial, or other credit information and references
about the proposed assignee or subtenant sufficient to enable
Landlord to determine the financial responsibility and
character of the proposed assignee or subtenant have not been
provided to Landlord;
(iii) and in Landlord's reasonable judgment, the financial worth of
the proposed assignee or subtenant does not meet the credit
standards applied by Landlord for other tenants under
subleases for the Premises.
Landlord's consent to an assignment or sublease will not release Tenant from the
payment and performance of its obligations under this Lease, but rather Tenant
and assignee or subtenant will be jointly and severally liable for such payment
and performance.
In the case of an assignment or subletting, 100% of any sum or economic
consideration received by Tenant as a result of such subletting (after having
first subtracted broker and marketing costs) will be paid to Landlord after
first deducting the rental due under this lease, prorated to reflect only rental
allocable to the sublet portion of the Premises, and the cost of any real estate
commissions incurred in connection with such subletting, amortized over the term
of the
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sublease. Upon Landlord's request, Tenant will assign to Landlord all amounts to
be paid to Tenant by any such subtenant or assignee and will direct such
subtenant or assignee to pay the same directly to Landlord.
12.0 LANDLORD SERVICES.
12.1 LANDLORD'S REPAIR AND MAINTENANCE. Landlord will keep in good, working
order and repair the Common Area, the windows in the Building, the mechanical,
plumbing and electrical equipment and systems (including, without limitation,
HVAC) serving the Premises and Building, and the structure, structural
components and slab of the Building. Prior to the commencement of the Term,
Landlord will close the opening that currently exists between Floor 1 and Floor
2 of the Building and will repair certain depressions in the Premises floor or
slab such that such depressions are made level with the adjacent portions of the
floor or slab.
12.2 LANDLORD'S OTHER SERVICES.
(A) Landlord will furnish the Premises with those services customarily
provided in comparable office buildings in the vicinity of the Project,
including without limitation: (1) electricity for lighting and the operation of
office machines standard and customary for Tenant's use of the Premises,
although Landlord will not be obligated to furnish more power to the Premises
than is proportionally allocated to the Premises under the Building design; (2)
heat and air conditioning reasonably required for the comfortable occupation of
the Premises during business hours; (3) access and elevator service; (4)
lighting replacement in the parking lot and other Common Areas; (5) restroom
supplies; (6) window washing with reasonable frequency, as determined by
Landlord; and (7) daily cleaning service of the Common Areas during weekdays.
(B) Landlord will furnish the Premises and Tenant with the exclusive use of
the 150 kW "back-up" generator located in the Building, together with the diesel
fuel storage tank related thereto.
12.3 BUSINESS HOURS. The term business hours means 5:00 a.m. to 9:00 p.m. on
Monday through Friday, except holidays, and 6:00 a.m. to 5:00 p.m. on Saturdays,
and 8:00 a.m. to 5:00 p.m. on Sunday; except holidays. The term "holidays" means
New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day.
Tenant will be responsible for the costs of all additional operating expenses as
a result of Tenant's use of the Premises during hours other than Building
business hours (7:00 a.m. to 6:00 p.m. on weekdays and 8:00 a.m. to 12:00 noon
on Saturdays, except holidays). Additional operating expenses may include, but
are not limited to, after-hours building engineer costs, utilities in the common
area, after-hours air conditioning and heating costs and repairs.
Tenant acknowledges that the front lobby entrance of the Building will be locked
at 6:00 p.m. Monday through Friday, at 12:00 noon on Saturdays, and will be
locked during holidays. When the lobby door is locked, Tenant will enter and
exit through the East Entrance door. Special arrangements for lobby access
during holidays can be arranged with Landlord's on site building engineer.
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Tenant acknowledges that Landlord is not responsible for the security of
Tenant's employees, including operation after hours and parking lot security.
12.4 LIMITATION ON LIABILITY. Landlord will not be in default under this Lease
or be liable to Tenant or any other person for direct of consequential damage,
or otherwise, for any failure to supply any heat, air conditioning, elevator,
lighting, security, or for surges or interruptions of electricity; or for other
services Landlord has agreed to supply during any period when Landlord uses
reasonable diligence to supply such services unless such failure, surge or
interruption continues for more than two consecutive days, in which event Tenant
shall be entitled to an abatement of one day's Rent for each day that such
failure, surge or interruption subsists, to the extent that Tenant is not able
to use the entire Premises. Landlord reserves the right to temporarily
discontinue such services at such times as may be necessary by reason of
accident; strikes; lockouts; riots; acts of god; governmental preemption; any
rule, order or regulation of any governmental agency; conditions of supply and
demand that make any product unavailable; Landlord's compliance with any
mandatory governmental energy conservation or environmental protection program;
or any other happening beyond the control of Landlord. When Landlord must
temporarily discontinue services as to facilitate repairs, alterations or
improvements, Landlord will coordinate such discontinuation with Tenant so as to
reasonably limit the disruption to Tenant.
Landlord will use reasonable diligence to restore such services to Tenant.
13.0 TENANT'S CARE OF PREMISES.
13.1 MAINTENANCE. Subject to Landlord's obligations set forth in SECTION 12.0,
Tenant will maintain the Premises in good condition, reasonable wear and tear
and casualty and condemnation excepted. Tenant will immediately advise Landlord
of any damage to the Premises or the Building. Any failure of Tenant to so
maintain the Premises that continues after any applicable notice and cure period
may be corrected by Landlord, at the expense of Tenant. Such reasonable expense
will be collectible as additional rent and will be paid by Tenant within THIRTY
(30) DAYS after delivery of a statement for such expense.
13.2 JANITORIAL AND WASTE REMOVAL. Tenant will provide, at Tenant's sole costs
and expense, all janitorial service within Tenant's Premises including Tenant's
restrooms. Tenant will be responsible for the provision, removal and cost of
Tenant's waste and dumpster.
13.3 150 KW "BACK-UP" GENERATOR. Tenant will be responsible for the maintenance
and the cost of the 150 kW "back-up" generator which Tenant has sole use.
14.0 INSURANCE.
14.1 LANDLORD'S INSURANCE. At all times during the term, Landlord will carry and
maintain:
(A) Fire and extended coverage insurance covering the Project, its equipment,
furnishings, and leasehold improvements in the Premises to the extent Landlord
paid for such improvements;
(B) Commercial general liability insurance covering bodily injury and property
damage on the Project with a combined single occurrence limit of not less than
$5,000,000; and
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(C) Such other insurance as Landlord reasonably determines from time to time.
14.2 TENANT'S INSURANCE. At all times during the term, Tenant will carry and
maintain, at Tenant's expense, the following insurance, in the amounts specified
below, with insurance companies and on forms reasonably satisfactory to
Landlord:
(A) Bodily injury and property damage liability insurance, with a combined
single occurrence limit of not less than $1,000,000, together with a $20,000,000
umbrella policy. All such insurance will be equivalent to coverage offered by a
commercial general liability form, including without limitation personal injury
and contractual liability coverage for the performance by Tenant of the
indemnity agreements in PARAGRAPH 16.3 of the Lease.
(B) Worker's compensation insurance insuring against and satisfying tenant's
obligations and liabilities under the worker's compensation laws of the state in
which the Premises are located, including employer's liability insurance in the
limits required by the laws of the state in which the Project is located.
(C) If Tenant operates owned, hired or non-owned vehicles on the Project,
comprehensive automobile liability at a limit of liability not less than
$500,000 combined bodily injury and property damage.
14.3 NOTICE OF INSURANCE. All insurance provided for in this Article shall be
effected under valid and enforceable policies issued by insurance companies
authorized to do business in Colorado and reasonably acceptable to Landlord.
Tenant shall cause its insurance companies issuing such to agree to notify
Landlord in writing of any cancellation, alteration or non-renewal of said
insurance at least THIRTY (30) DAYS prior thereto. Tenant shall deliver to
Landlord, on the Commencement Date and on each anniversary of the Commencement
Date, certificates evidencing the insurance coverage required herein. All public
liability and property damage policies shall contain a provision that Landlord,
although named as an additional insured, shall nonetheless be entitled to
recovery under said policies for any loss occasioned to Landlord, its servants,
agents and employees by reason of Tenant's active negligence.
14.4 WAIVER OF SUBROGATION; RELEASE. Notwithstanding any other provisions in
this Lease, but provided Tenant carries the insurance it is required to carry
under PARAGRAPH 14.2 above, Tenant and Landlord each waive all rights of
recovery against the other, and against the directors, partners, officers,
employees, agents and representative of the other, for loss of, or damage to,
the property of the waiving party, or the property of others under its control.
Each party shall, upon obtaining the insurance policies required hereunder, give
notice to the insurance carrier or carriers that the foregoing waiver of
subrogation is contained in this Lease and shall obtain, at their own expense,
an appropriate waiver of subrogation endorsement from the insurer. If the
Premises or Tenant's personal property are damaged or destroyed by fire or any
other cause against which Tenant is required to maintain insurance pursuant to
this Lease, Landlord shall not be liable to Tenant for any such damage or
destruction unless caused by the intentional misconduct of Landlord. Tenant
shall have no claim to or interest in any portion of the proceeds of any
insurance maintained by Landlord.
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15.0 LAWS AND HAZARDOUS SUBSTANCES.
15.1 COMPLIANCE WITH LAWS. Tenant, at its expense, shall cause its use of and
alterations to the Premises to comply with all existing and future rules,
regulations, ordinances, orders, codes, laws and requirements of all municipal,
county, state, federal and other applicable governmental authorities
(collectively, "LAWS"). Landlord shall, at Landlord's sole cost and expense,
cause the Premises to comply with all Laws that are effective prior to Tenant's
occupancy not relating solely to any alterations by Tenant or a subtenant or
Tenant's or a subtenant's particular use of the Premises.
15.2 HAZARDOUS SUBSTANCES. Tenant shall not use, produce, store, release,
dispose or handle in or about the Premises or transfer to or from the Premises
any Hazardous Substances except in compliance with all applicable Environmental
Laws. Tenant shall not construct or use any improvements or equipment or engage
in any act on or about the Premises that would require the procurement of any
license or permit pursuant to any Environmental Law unless Tenant shall have
first procured any license or permit. Tenant shall immediately notify Landlord
of (i) the receipt of notice by Tenant of the existence of any Hazardous
Substances on or about the Premises that may be in violation of any
Environmental Law (regardless of whether Tenant is responsible for the existence
of such Hazardous Substance), (ii) Tenant's receipt of written notice of any
proceeding or investigation by any federal, state or local governmental
authority regarding the presence of any Hazardous Substance on the Premises or
the migration thereof to or from any other property, (iii) all claims made or
threatened by any third party against Tenant relating to any loss or injury
resulting from any Hazardous Substance, or (iv) Tenant's notification to the
National Response Center of any release of a reportable quantity of a Hazardous
Substance in or about the Premises.
"ENVIRONMENTAL LAWS" shall mean any federal, state or local law, statute,
ordinance, rule, regulation, guideline, permit, license, order, requirement,
agreement, or approval pertaining to Hazardous Substances and the protection of
health, industrial hygiene, natural resources or the environment, including
without limitation, the federal Comprehensive Environmental Response,
Compensation, and Liability Act, as amended. For purposes of this Article,
"HAZARDOUS SUBSTANCE" means any matter giving rise to liability under the
Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section 6901 et seq.,
the Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C. Sections 9601 et seq. (including the so-called "Superfund"
amendments thereto), the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seq. or the Solid Waste Disposal Act, 42 U.S.C. Section 6901,
et seq., including any regulations promulgated thereunder, as any of the
foregoing may be amended, all Colorado environmental protection laws, any other
applicable, federal, state or local statute, law, ordinance, rule or regulation
governing or pertaining to any hazardous substances, hazardous wastes, chemicals
or other materials, including without limitation asbestos, polychlorinated
biphenyls, radon, petroleum and any derivative thereof or any common law theory
based on nuisance or strict liability.
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Landlord shall not use, produce, store, release, dispose or handle in
or about the Project or transfer to or from the Project any Hazardous Substances
except in compliance with all applicable Environmental Laws.
16.0 WAIVER AND INDEMNITY.
16.1 ASSUMPTION AND WAIVER. Except to the extent caused by the negligence or
intentional misconduct of Landlord or its agents or employees, or by Landlord's
failure to perform its obligations hereunder, Tenant assumes all risk of, and
waives all claims against Landlord arising from damage, loss or theft of
property or injury to persons in or upon the Premises from any cause. Subject to
the exception set forth in the preceding sentence, and to SUBSECTION 12.4,
above, the foregoing waiver includes, without limitation, the following risks:
(i) any defect in or failure of plumbing, heating or air conditioning equipment,
electric wiring, water pipes, stairs, railings or walks; (ii) the bursting,
leaking or running of any tank, washstand, water closet, main or any pipe or
tank in, upon or about the Premises; (iii) the backup of any sewer pipe or
downspout; (iv) the escape of steam or hot water; (v) water, snow or ice; (vi)
the falling of any plaster or stucco; (vii) broken glass; (viii) any act or
omission of other adjoining property owner (except Landlord); and (ix) any
unauthorized or criminal entry of third parties within the Premises.
16.2 NOTICE OF CLAIMS. Tenant shall give immediate notice to Landlord (i) in
case of fire or accidents in the Premises or any breakdown or malfunction of any
security measures, and (ii) if Tenant receives notice of any claim, action or
proceeding instituted or threatened against Landlord.
16.3 TENANT'S INDEMNITY. Except to the extent caused by the negligence or
intentional misconduct of Landlord or its agents or employees, Tenant shall
indemnify Landlord, its successors, assigns, subsidiaries, directors, officers,
agents, employees and Landlord's property manager, if any, against all claims,
costs, attorneys' fees, damages, expenses, liabilities and losses of third
parties arising out of or in connection with any of the following:
(A) Tenant's, its subtenants' and its and their agents' and employees' use of
the Premises or the conduct of Tenant's or a subtenant's business thereon.
(B) Any activity, work or occurrence performed, or affirmatively consented to,
by Tenant or a subtenant in, on or about the Premises.
(C) Tenant's failure to perform substantially and properly all of Tenant's
obligations under this Lease.
(D) The negligence or intentional misconduct of Tenant, any of its subtenants,
its agents, contractors, servants, employees or licensees.
(E) Tenant's failure to comply with or violation of any laws, statutes, codes,
licensing requirements, ordinances, orders and rules and regulations of any
public authority applicable to Tenant's specific use of the Premises.
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If any claim is made or action is brought against Landlord as a result of any
activities or omissions listed above, Tenant, upon notice from Landlord, shall
diligently defend the same at Tenant's expense through counsel reasonably
satisfactory to Landlord. Tenant's obligation to indemnify Landlord, its
successors, assigns, subsidiaries, directors, officers, agents, employees and
Landlord's property manager, if any, pursuant to this SUBSECTION 16.3 shall
survive the expiration or earlier termination of this Lease.
17.0 CONDEMNATION.
17.1 TOTAL CONDEMNATION. If the Building or Building Land is taken under power
of eminent domain or conveyed by Landlord under the threat thereof (a
"CONDEMNATION"), this Lease shall terminate as of the date of Condemnation.
Landlord shall give written notice to Tenant promptly after Landlord is made
aware of any threatened or pending condemnation proceedings relating to any
Building or any portion of the Project. All rent and other obligations shall be
paid and performed up to the date of any such Condemnation, and Tenant shall
have no claim against Landlord for the value of any unexpired term of this
Lease.
17.2 PARTIAL CONDEMNATION OF THE PREMISES. If a portion of the Building or
Premises is taken by a Condemnation and such partial taking renders the Premises
unsuitable for Tenant's business, as reasonably determined by Tenant and
Landlord in their good faith discretion, this Lease shall terminate as of the
date of Condemnation with respect to such Premises and Tenant shall have no
claim against Landlord for the value of any un-expired term of this Lease. If
the partial taking by Condemnation does not render the Premises unsuitable for
Tenant's business, Rent shall be equitably reduced based upon the portion of the
Premises taken by such Condemnation and Landlord shall promptly restore the
Premises to a condition comparable to its condition prior to the Condemnation
less the portion lost in the Condemnation; provided, however, Landlord shall not
be obligated to commence such restoration until it receives the Condemnation
award. If there are not sufficient funds from the Condemnation award, in the
exercise of reasonable diligence, to restore the Premises, or if the Premises is
not otherwise restored, within 120 DAYS after the date of such Condemnation, to
a condition comparable to its condition prior to the Condemnation less the
portion lost in the Condemnation, then this Lease shall terminate unless one
party elects to contribute the shortfall.
17.3 CONDEMNATION AWARD. In the event of a Condemnation, whether whole or
partial, subject to the next sentence, Tenant waives any right to any part of
the award, as damages or otherwise, and Landlord shall receive the full amount
of such award. Notwithstanding the foregoing, in the event of any Condemnation,
including, without limitation, a partial Condemnation, Tenant shall have the
right to recover from the condemning authority, but not from Landlord, such
compensation as may be separately awarded to or recoverable by Tenant on account
of the loss of Tenant's leasehold estate or improvements, or both, any damage to
Tenant's business by reason of the Condemnation and for any cost or loss to
which Tenant might be put in removing Tenant's personal property, improvements
and equipment.
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17.4 DATE OF CONDEMNATION. The date of Condemnation shall mean the earlier of
the date (i) possession of the Premises is delivered to the condemning
authority, or (ii) title to the Premises is vested in the condemnation
authority.
18.0 DESTRUCTION AND DAMAGE. If the Premises or the Building are damaged by fire
or other insured casualty, Landlord will give Tenant written notice of the time
that Landlord has determined in its reasonable discretion will be needed to
repair the damage and the election (if any) that Landlord has made according to
this section. The notice will be given before the 30TH DAY (the "NOTICE DATE")
after the fire or other insured casualty.
If the Premises or the Building are damaged by fire or other insured casualty to
an extent Landlord has determined in its reasonable discretion can be repaired
within 120 DAYS after the date of such damage, after the notice date, Landlord
will promptly begin to repair the Building and Premises to a condition
comparable to its condition prior to the date of such damage and will use
reasonable diligence to pursue the completion of such repair. In that event this
Lease will continue in full force and effect, except that Rent will be abated on
a pro rata basis from the date of the damage until the date of the completion of
such repairs (the "REPAIR period"), based on the proportion of the rentable area
of the Premises that is unsuitable for Tenant's business, as reasonably
determined by Tenant in its good faith discretion, as a result of such damage.
If the Premises or the Building are damaged by fire or other insured casualty to
an extent Landlord has determined in its reasonable discretion cannot be
repaired within 120 DAYS after the notice date, then (1) Landlord may cancel
this Lease as of the date of the damage by written notice given to Tenant on or
before the notice date, or (2) Tenant may cancel this Lease as of the date of
the damage by written notice given to Landlord within 10 DAYS after Tenant's
actual receipt of Landlord's written notice that the repairs cannot be made
within such 120-DAY period. In any event, if written notice as to the time that
Landlord has determined in its reasonable discretion will be needed to repair
the damage and the election (if any) that Landlord has made according to this
section is not actually received by Tenant on or before the notice date, then
Tenant may cancel this Lease as of the date of the damage by written notice
given to Landlord within 10 DAYS after the notice date. If neither Landlord nor
Tenant so elects to cancel this Lease, Landlord will use reasonable diligence to
proceed to repair the Building and Premises to a condition comparable to its
condition prior to the date of such damage, and Rent will be abated on a pro
rata basis during the repair period, based on the proportion of the rentable
area of the Premises that is unsuitable for Tenant's business, as reasonably
determined by Tenant in its good faith discretion, as a result of such damage,
and if such repair is not completed prior to the date 120 DAYS after the date of
such damage (as such time period may be extended for up to 45 days for delays
beyond the control of Landlord of which Tenant is given notice, so long as
Landlord diligently prosecutes such repair to completion), Tenant may terminate
this Lease as of the date of such damage by giving written notice to Landlord on
or before the date 30 DAYS after the expiration of such 120-DAY period.
If the Premises or the Building are damaged by any casualty against which
Landlord is not required hereby to carry and maintain insurance, or if the
insurance proceeds along with any deductible are insufficient to pay for the
repair of any damage to the Premises or the Building,
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Landlord will have the option either, subject to the rights and obligations of
the parties as set forth in the preceding three paragraphs, to elect to repair
the damage or to cancel this Lease as of the date of the casualty by written
notice to Tenant on or before the notice date.
Landlord will not be responsible for repairing or replacing any of Tenant's
improvements, fixtures, or personal property, unless such improvements, fixtures
or personal property were originally paid for by Landlord.
If any damage by fire or other casualty is the result of willful conduct or
negligence of Tenant, its agents, contractors, employees, or invitees, Rent will
not be abated. Tenant will have no right to terminate this Lease on account of
any damage to the Premises, the Building or the Project, except as set forth in
this Lease.
19.0 ENTRY BY LANDLORD. Landlord, its agents, employees, and contractors may
enter the Premises at any time in response to an emergency and at reasonable
hours, upon reasonable advance notice, to:
(A) Inspect the Premises;
(B) Exhibit the Premises to prospective purchasers or lenders and exhibit the
Premises during the final six (6) months of the Term to prospective tenants;
(C) Determine whether Tenant is complying with all its obligations in this
Lease;
(D) Post written notices of non-responsibility or similar notices; or
(E) Make repairs required of Landlord under the terms of this Lease or make
repairs to any adjoining space or utility services or make repairs, alterations,
or improvements to any other portion of the Building.
Landlord will at all times have and retain a key with which to unlock all of the
doors in, on and about the Premises. Landlord will have the right to use any and
all reasonable means Landlord may reasonably deem proper to open doors in and to
the Premises in an emergency in order to obtain entry to the Premises. Any entry
to the Premises by Landlord in accordance with this Section will not be
construed or deemed to be a forcible or unlawful entry into or a detainer of the
Premises or an eviction, actual or constructive, of Tenant from the Premises or
any portion of the Premises, nor will any such entry entitle Tenant to damages
or an abatement of monthly rent, additional rent, or other charges that this
lease requires Tenant to pay.
20.0 EFFECT OF SALE. So long as such successor in interest assumes Landlord's
obligations under the Lease arising from and after such effective date: a sale,
conveyance, or assignment of the Building and the Building Land or the Project
will operate to release Landlord from liability from and after the effective
date of such sale, conveyance, or assignment upon all of the covenants, terms,
and conditions of this Lease, express or implied, except those liabilities that
arose prior to such effective date; after the effective date of such sale,
conveyance, or assignment, Tenant will look solely to Landlord's successor in
interest in and to this Lease for Landlord's
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obligations under the Lease arising from and after such effective date; this
Lease will not be affected by any such sale, conveyance, or assignment; and
Tenant will attorn to Landlord's successor in interest to this Lease.
21.0 PARKING. Tenant, its employees, agents, servants, customers and other
invitees, will have the right to use TWO HUNDRED (200) parking spaces in the
Building parking lot identified on EXHIBIT D, attached hereto. Landlord will not
give rights to other persons or entities (including, without limitation, other
tenants) to the Building parking lot that exceeds the number of the remaining
parking spaces. Tenant may, at its discretion, designate such 200 spaces (by
painting on the surface of the parking lot or otherwise), together with the
Parking Lot Expansion, as being reserved for Tenant and may post warning signs
concerning towing or other consequences of vehicles not authorized by Tenant
being parked in such spaces, so long as Tenant removes or paints over any such
designation and removes any such warning signs upon the expiration of the Term
or earlier termination of this Lease. Tenant may reasonably enforce its rights
to such spaces.
22.0 SUBORDINATION.
22.1 GENERAL. This Lease and Tenant's rights under this Lease are subject and
subordinate to any ground or underlying lease, mortgage, indenture, deed of
trust, or other lien encumbrance (each, a "MORTGAGE"), together with any
renewals, extensions, modifications, consolidations, and replacements of such
superior lien, now or after the date affecting or placed, charged, or enforced
against the Building Land, the Building, or all or any portion of the Project or
any interest of Landlord in them or Landlord's interest in this Lease and the
leasehold estate created by this lease, so long as, with respect to any Mortgage
so affecting, or placed, charged or enforced against, the Building Land,
Building, Project or any such interest, the mortgagee or secured party
thereunder first agrees in writing not to disturb this Lease or Tenant's rights,
interests and privileges hereunder. This provision will be self-operative and no
further instrument of subordination will be required in order to effect it.
Notwithstanding the foregoing, Tenant will execute, acknowledge, and deliver
lien and reasonably acceptable to Tenant to confirm or effect any subordination
to Landlord within TWENTY (20) DAYS after written demand by Landlord, such
documents as may be reasonably requested by Landlord or the holder of any
superior lien and reasonably acceptable to Tenant.
22.2 ATTORNMENT AND NONDISTURBANCE. Tenant agrees that in the event that any
holder of a superior lien succeeds to Landlord's interest in the Premises, then,
upon receipt of reasonable evidence of such succession, Tenant will pay to such
holder all rents subsequently payable under this Lease. Further, Tenant agrees
that in the event of the enforcement by the holder of a superior lien of the
remedies provided for by law or by such superior lien, tenant will, upon request
of any person or party succeeding to the interest of Landlord as a result of
such enforcement (a "SUCCESSOR LANDLORD") and receipt of reasonable evidence of
such succession, automatically become the Tenant of and attorn to such Successor
Landlord without change in the terms of provisions of this Lease. Such Successor
Landlord will not be bound by:
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(A) Any payment of rent for more than one month in advance, except prepayments
in the nature of security for the performance by Tenant of its obligations under
the Lease;
(B) Any amendment or modification of this Lease made after Tenant's receipt of
reasonable evidence of such succession without the written consent of such
Successor Landlord; or
(C) Any claim for damages against Landlord arising prior to the date on which
such Successor Landlord succeeded to Landlord's interest; provided, however,
that this sentence shall not prohibit Tenant from offsetting rent or terminating
this Lease, if Tenant is entitled to such offset or termination in this Lease
herein or to any remedy that Tenant may be entitled to in law or equity.
Upon request by such Successor Landlord and without cost to Landlord or such
Successor Landlord, Tenant will, within TWENTY (20) DAYS after written demand,
execute, acknowledge, and deliver an instrument or instruments confirming the
attornment, so long as such instrument provides that such Successor Landlord
will not disturb Tenant in its use of the Premises in accordance with this Lease
and is otherwise reasonably acceptable to Tenant.
23.0 ESTOPPEL CERTIFICATE. Upon receipt of a written request from either party,
the other party shall within FIFTEEN (15) DAYS after receipt of such request,
execute, acknowledge and deliver to the party requesting such statement a
written statement (i) certifying that this Lease is unmodified (or, if modified,
stating the nature of such modification) and in full force and effect and the
dates to which rent and other charges are paid in advance, (ii) acknowledging
that there are no then existing defaults or events known to the executing party
which would, given the passage of time or the giving of notice or both,
constitute events of default, (iii) setting forth such other matters as the
party executing such certificate may desire, or acknowledging any other factual
matters that the party requesting such statement may reasonably request. In
addition, upon receipt of a written request from Landlord, Tenant shall use
commercially reasonable efforts to execute, acknowledge and deliver to Landlord
such written statement within FIFTEEN (15) DAYS after receipt of such request.
The statements to be made by either party may be modified to reflect the true
and correct state of the facts at the time of such statement. Any such
statements may be relied upon by any prospective purchaser or encumbrancer of
all or any portion of the Premises. Failure to deliver such statement within
such 15-day period shall entitle the party requesting such statement to give a
second notice to the other party, and failure to deliver such statement within
FIVE (5) DAYS after receipt of such second notice shall be conclusive against
the party asked to produce such statement that the statements set forth therein
are true and correct.
24.0 DEFAULT, REMEDIES.
24.1 DEFAULTS. The occurrence of any one or more of the following events shall
constitute a material default and breach of this Lease by Tenant:
(A) Tenant's failure to make any payment of Rent, as and when due, where such
failure continues for a period of TEN (10) DAYS after receipt of written notice
from Landlord that such is past due.
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(B) Tenant's failure to observe or perform any of Tenant's obligations under
this Lease where such failure continues for a period of THIRTY (30) DAYS after
receipt of written notice from Landlord of such failure, unless such failure
cannot reasonably be cured within such 30-day period, in which event Tenant
shall not be in default of this Lease provided Tenant commences to cure such
failure within said 30-day period and thereafter diligently and continuously
pursue completion thereof.
(C) Any assignment of Tenant's interest in this Lease contrary to the
provisions of this Lease.
(D) To the extent not prohibited by law, (i) the making by Tenant of any
general assignment or general arrangement for the benefit of creditors; (ii) the
filing by or against Tenant of a proceeding under state or federal involving
and/or bankruptcy laws (unless, in the case of a petition filed against Tenant,
the same is dismissed within thirty (30) days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of Tenant's assets
at the Premises or of Tenant's interest in this Lease, where possession is not
restored to Tenant within thirty (30) days; or (iv) the attachment, execution or
other judicial seizure of substantially all of Tenant's assets at the Premises
or of Tenant's interest in this Lease.
24.2 REMEDIES. In the event of any such default or breach, Landlord shall be
entitled to exercise the following rights and remedies at any time thereafter,
with or without notice or demand:
(A) To terminate this Lease effective immediately upon delivery of written
notice to Tenant and Tenant shall surrender possession of the Premises within 5
DAYS after receipt of such notice. Notwithstanding such termination, Landlord
shall have the right to recover from Tenant:
(1) The worth at the time of payment of same, by reason of a judgment,
settlement or otherwise (the "TIME OF THE AWARD"), of the unpaid Rent due and
payable at the time of termination;
(2) The worth at the time of the award of the amount by which the Rent
which would have been earned after termination until the time of the award
exceeds the amount of such rental loss that could have been reasonably avoided;
(3) The worth at the time of the award (computed by discounting to
present value at the discount rate of the Federal Reserve Bank of San Francisco
at the time of award plus two percent) of the amount by which the rents for the
balance of the Lease Term after the time of award exceed the amount of such
rental loss that could be reasonably avoided;
(4) Any other amounts necessary to compensate Landlord for all actual,
direct damages suffered by Landlord and proximately caused by the default by
Tenant or which in the ordinary course of events would likely result.
The "WORTH AT THE TIME OF AWARD" of the amounts referred to in clauses
(i) and (ii) above is computed by allowing interest at an annual rate (the
"DEFAULT INTEREST RATE") equal to the greater of (i) ten percent (10%), or (ii)
five percent (5%) plus the rate established by the Federal
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Reserve Bank of Denver, as of the twenty-fifth (25th) day of the month
immediately preceding the default by Tenant, on advances to member banks under
Sections 13 and 13(a) of the Federal Reserve Act, as now in effect or hereafter
from time to time amended, not to exceed the maximum rate allowable by law.
(B) CONTINUANCE OF LEASE. Upon any default by Tenant and unless and until
Landlord elects to terminate this Lease pursuant to SECTION 24.2(A) above, this
Lease shall continue in effect after the default by Tenant and Landlord may
enforce all its rights and remedies under this Lease, including without
limitation, the right to recover payment of Rent as they become due. Neither
efforts by Landlord to mitigate damages caused by a default by Tenant nor the
acceptance of any Rent shall constitute a waiver by Landlord of any of
Landlord's rights or remedies, including the rights and remedies specified in
SECTION 24.2(A) above.
24.3 REMEDIES CUMULATIVE. No remedy or option of Landlord shall be considered
exclusive of any other remedy, but the same shall be cumulative and in addition
to every other remedy or option given hereunder, or now or hereafter existing at
law, in equity or by statute, including, without limitation an action to recover
amounts due hereunder. Landlord may exercise its rights and remedies at any
time, in any order, to any extent, and as often as Landlord deems advisable.
24.4 LANDLORD'S RIGHT TO ACT. If Tenant fails to timely perform any of its
obligations under this Lease, Landlord may give written notice to Tenant of such
failure, and in the event Tenant has not performed such obligation within any
applicable notice and cure period as set forth in SUBSECTION 24.1, above,
Landlord shall have the right, without any passage of time or declaring Tenant
in default, to perform such obligation on Tenant's behalf and to charge to
Tenant all reasonable costs and expenses incurred in connection therewith.
Tenant shall within TEN (10) DAYS pay such amount upon presentment of a
statement to Tenant. Such amount shall bear interest at the Default Interest
Rate from the date ten (10) days after Tenant's receipt of such written
statement.
24.5 LATE CHARGES. Tenant hereby acknowledges that late payment by Tenant to
Landlord of Rent 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 on Landlord by the terms of any mortgage or
deed of trust covering the Premises. Accordingly, Tenant shall pay to Landlord,
without the necessity of prior notice or demand, a late charge equal to FIVE
PERCENT (5%) of any installment of Rent which is not received by Landlord within
TEN (10) DAYS after the due date for such installment. The parties hereby agree
that such late charge represents a fair and reasonable estimate of the costs
Landlord will incur by reason of late payment by Tenant. In no event shall this
provision for a late charge be deemed to grant to Tenant a grace period or
extension of time within which to pay any installment of Rent or prevent
Landlord from exercising any right or remedy available to Landlord upon any
default of Tenant in the payment of such installment of Rent when due, including
without limitation the right to terminate this Lease in accordance with this
SECTION 24.0. In the event any installment of Rent is not received by Landlord
by the THIRTIETH (30TH) DAY after the due date for such installment, such
installment shall bear interest at the annual rate set forth in SECTION 24.6
below, commencing on the thirty-
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first (31st) day after the due date for such installment and continuing until
such installment is paid in full.
24.6 INTEREST ON PAST-DUE OBLIGATIONS. Any payment due from Tenant to Landlord
not received by Landlord within THIRTY (30) DAYS after the same is due, shall
bear interest from the due date until paid, at the Default Interest Rate. In
addition, Tenant shall pay all reasonable costs and attorneys' fees incurred by
Landlord in the collection of such amounts.
24.7 ATTORNEYS' FEES. In any dispute between the parties the prevailing party
shall be entitled to recover from the other party immediately upon demand all
reasonable costs, attorneys' fees, expert witness fees, costs of test and
analysis, travel and accommodation expenses, deposition and trial transcript
copies, court costs and other similar reasonable costs and fees incurred in
enforcing its rights and remedies under this Lease, regardless of whether legal
proceedings are actually commenced.
24.8 ACCORD AND SATISFACTION. Payment by Tenant or receipt by Landlord of a
lesser amount than the Rent or other charges due hereunder shall be deemed to be
on account of the earliest due stipulated rent or other charges, and no
endorsement or statement on any check or any letter accompanying any check or
payment shall be deemed an accord and satisfaction, and Landlord shall accept
such check or payment without prejudice to Landlord's right to recover the
balance of such Rent or other charges or pursue any other remedy in this Lease.
25.0 LANDLORD'S LIABILITY.
25.1 DEFAULT BY LANDLORD. Landlord shall not be considered in default or breach
of this Lease for the nonperformance of any obligation imposed herein unless
such nonperformance shall continue for a period of at least THIRTY (30) DAYS
after notice from Tenant; provided, however, if the nature of the nonperformance
is such that it cannot be reasonably cured within thirty (30) days, Landlord
shall not be deemed to be in default if Landlord commences to cure such
nonperformance within such 30-day period and thereafter pursues such cure to
completion in the exercise of reasonable diligence.
The liability of Landlord, or any of the respective partners, officers or
directors of Landlord, to Tenant for or in respect of any default by Landlord
under the terms of this Lease shall be limited to the interest of Landlord in
the Project and the rents, profits and proceeds therefrom. Tenant agrees to look
solely to Landlord's interest in the Project and the rents and profits therefrom
for the recovery and satisfaction of any judgment against Landlord, or any of
the respective partners, officers or directors of Landlord.
25.2 SALE OF LANDLORD'S INTEREST. Upon any sale or conveyance of Landlord's
interest in this Lease, and provided the transferee of such interest assumes in
writing all of Landlord's obligations hereunder from and after the date of such
transfer or assignment, Landlord shall be entirely relieved of all liability for
Landlord's obligations under the Lease accruing thereafter. Landlord shall,
concurrently with such transfer, deliver to Tenant written notice thereof
together with a copy of the instrument by which the transferee assumed the
obligations of Landlord hereunder.
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25.3 MORTGAGE EXCULPATION. Notwithstanding anything contained herein to the
contrary, but subject to Subsection 22.2, above, Tenant waives and holds any
mortgagee or beneficiary named in any mortgage, deed or trust or other security
instrument harmless from any and all claims Tenant may have against Landlord
arising prior to the mortgage or beneficiary succeeding to Landlord's interest
hereunder.
26.0 FORCE MAJEURE. If either party is delayed or prevented from the performance
of any act by reason of acts of god, strikes, lockouts, labor troubles, failure
or refusal of governmental authorities to timely issue permits or approvals or
conduct reviews or inspections, civil disorder, inability to procure materials,
materials, restrictive governmental laws or regulations, or other causes beyond
the control of the party obligated (financial inability excepted), performance
of such act shall be excused for the period of delay and the period for the
performance of any such act shall be extended for a period equivalent to the
period of such delay; provided, however, nothing herein shall excuse Tenant from
the prompt payment of rent or any other sum.
27.0 NOTICES. No notice, consent, approval or other communication given in
connection herewith shall be validly given, made, delivered or served unless in
writing and delivered in person or sent by confirmed facsimile transmission
and/or registered or certified United States mail, postage prepaid, to Landlord
or Tenant at the address set forth below or to such other addresses as Landlord
or Tenant may from time to time designate in writing and deliver to the other
party in accordance with this Article. Notices, consents, approval or
communications shall be deemed given or received upon delivery or refusal of
delivery, if delivered in person, or upon three (3) days after deposit in the
mail, if delivered by mail or upon receipt of a facsimile transmission, if given
by facsimile.
Landlord: Terri Cohen
Notices: LMC Properties, Inc.
100 S. Charles St., Suite 1400
Baltimore, MD 21201
Fax: (410) 468-1079
Landlord: Greg Johnson
Rent: Lockheed Martin Tactical Systems
3333 Pilot Knob Road
Eagan, MN 55121
Fax: (651) 456-2605
Tenant: Innotrac Corporation
6655 Sugarloaf Parkway
Duluth, Georgia 30097-4916
Attn: Mr. David Ellin
Fax: (678) 584-8950
28.0 MULTI-TENANTING. Prior to permitting occupancy or use of all or any portion
of the second floor of the Building, Landlord shall, at no cost to Tenant,
install such demising walls, doors and
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door locks as are necessary to demise the Premises from the remainder of the
Building, all as depicted on the plans and specifications attached hereto as
EXHIBIT E. Tenant shall be responsible for the installation of any electronic
entry system desired by Tenant with respect to the Premises. Upon occupancy or
use of all or any portion of the second floor of the Building, that portion of
the first floor space of the Building that is outside of the Premises (presently
estimated to be approximately 3,050 square feet) shall be deemed Common Area and
the number of square feet deemed to be the square footage of the Premises
hereunder shall be reduced by Tenant's Building Share of the square footage of
such first floor space, and Base Rent and other rental payable hereunder,
Tenant's Building Share, and Tenant's Project Share shall be decreased in
accordance with such reduction in the square footage of the Premises.
29.0 GENERAL.
29.1 COLORADO LAW; VENUE. This Lease shall be construed in accordance with the
laws of the State of Colorado. The parties agree that Pueblo County, Colorado,
shall be the venue for any litigation relating to this Lease.
29.2 NO PARTNERSHIP. Nothing contained in this Lease shall be deemed to create
any relationship other than that of landlord and tenant.
29.3 AMENDMENTS. No alteration, amendment, change or addition to this Lease
shall be binding upon Landlord or Tenant unless reduced to writing, and signed
by both parties.
29.4 NO WAIVER. No delay or omission of either party to exercise any right or
power shall impair any such right or power, or shall be construed to be a waiver
of any nonperformance by the other party or an acquiescence therein. No waiver
of any nonperformance shall be effective unless it is in writing. No written
waiver by either party shall be deemed to be a waiver of any other Lease
provision, or of any subsequent breach by the other party of the same or any
other provision. Landlord's or Tenant's consent to or approval of any act by the
other party shall not be deemed to render unnecessary the procurement of
Landlord's or Tenant's consent to or approval of any subsequent act of the other
party, whether or not similar to the act so consented to or approved.
29.5 EXHIBITS. Exhibits A, B, C, D, E and F attached hereto shall by this
reference be deemed a part of this Lease as if set forth in full herein.
29.6 PARTIAL INVALIDITY. If any provision of this Lease is held by a court of
competent jurisdiction to be invalid, void or unenforceable, that provision may
be modified to the minimum extent necessary and the remainder of the provisions
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.
29.7 CAPTIONS. The various headings and numbers herein and the grouping of the
provisions of this Lease into separate articles and sections are for the purpose
of convenience only and shall not control or affect the meaning or construction
of any of the provisions.
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29.8 TIME. Time is of the essence. If any time period provided for herein
expires on a Saturday, Sunday or legal holiday, such time period shall be
extended to the next succeeding day that is not a Saturday, Sunday or legal
holiday.
29.9 RECORDATION. Neither party shall record this Lease in the public records
of the county within which the Premises is located. Either may, upon request and
at the expense of the requesting party, cause the other party to execute and
record a memorandum of this Lease in Pueblo County, Colorado.
29.10 NO THIRD PARTY RIGHTS. Except as expressly provided herein, no term of
this Lease is intended to or shall be for the benefit of any person not a party
hereto, and no such other person shall have any right or cause of action
hereunder.
29.11 JOINT AND SEVERAL OBLIGATIONS. If Tenant is constituted of two or more
persons, corporations or other entities, all agreements, covenants,
representations and warranties of Tenant herein are the joint and several
obligations of the entities constituting Tenant. Notice given to any one of the
entities constituting Tenant shall be deemed as having been given to all such
entities.
29.12 AUTHORITY TO EXECUTE. Any individual executing this Lease on behalf of or
as representative for a corporation or other person, partnership or entity
represents and warrants that he or she is duly authorized to execute and deliver
this Lease on behalf of such party, and that this Lease is binding upon such
party in accordance with its terms.
29.13 BINDING ON SUCCESSORS AND ASSIGNS. Each of the provisions of this Lease
shall bind, extend to, and inure to the benefit of the respective heirs, legal
representatives, and successors and assigns of both Landlord and Tenant;
provided, however, that this clause shall not permit any transfer contrary to
the terms hereof.
29.14 IMPARTIAL INTERPRETATION. This Lease is the result of negotiations between
Landlord and Tenant and therefore the language contained in this Lease shall be
construed as a whole according to its fair meaning and not strictly for or
against either Landlord or Tenant.
29.15 PLURALS. The words "Landlord" and "Tenant", as herein used, shall include
the plural as well as the singular. The neuter gender shall include the
masculine and feminine genders.
29.16 NOT BINDING UNTIL SIGNED. Submission of this instrument to Tenant for
examination shall not bind Landlord or Tenant in any manner, until this
instrument is executed and delivered by both Landlord and Tenant.
29.17 QUIET ENJOYMENT. Landlord covenants and agrees that Tenant, upon paying
the Base Rent and other charges herein provided for and observing and keeping
the covenants, agreements and conditions of this Lease on its part to be kept
and performed, shall lawfully and quietly hold, occupy and enjoy the Premises
during the Term in accordance with and subject to the terms of this Lease.
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29.18 LIMITATION ON RECOURSE. Tenant specifically agrees to look solely to
Landlord's interest in the Project and the rents, profits and proceeds therefrom
for the recovery of any judgments from Landlord. It is agreed that Landlord (and
its shareholders, venturers, and partners, and their shareholders, venturers,
and partners and all of their officers, directors, and employees) will not be
personally liable for any such judgments. The provisions contained in the
preceding sentence are not intended to and will not limit any right that Tenant
might otherwise have to obtain injunctive relief against Landlord or relief in
any suit or action in connection with enforcement or collection of amounts that
may become owing or payable under or on account of insurance maintained by
Landlord.
29.19 CONFIDENTIALITY. Landlord and Tenant acknowledge that the terms and
conditions of this Lease are to remain confidential for the benefit of both
parties, and may not be disclosed by either party to anyone, by any manner or
means, directly or indirectly, except to the respective party's attorneys,
accountants, consultants, brokers, agents and others who must reasonably have
knowledge hereof, or as required by law, without the other party's prior written
consent. The foregoing shall not apply in the event Tenant desires to assign
this Lease, or its interest herein, or to sublease all or a portion of the
Premises, in which event Tenant shall be entitled to disclose the terms of this
Lease as necessary in connection with the negotiation of any potential sublease
or assignment. Tenant acknowledges, that the terms and conditions of this Lease
will be disclosed to potential buyers and lenders of the Project. The consent by
a party to any specific disclosures shall not be deemed to be a waiver by the
consenting party of any prohibition against future disclosure.
29.20 BROKERS. The parties represent and warrant to each other that no broker or
finder other than PM Realty Group and Insignia/ESG was instrumental in arranging
or bringing about this lease transaction and that there are no other claims or
rights for brokerage commissions or finder's fees in connection with the
transaction contemplated by this Lease. If any person brings a claim for a
commission or finder's fee based upon any contact, dealings or communication
with Landlord or Tenant, other than the Brokers already identified herein, then
the party through whom such person makes his claim shall indemnify, hold
harmless and defend the other party (the "Indemnified Party") from any and all
costs, damages, claims, liabilities, losses, or expenses, (including without
limitation, reasonable attorneys' fees and disbursements) incurred by the
Indemnified Party in defending against the claim. A copy of the Broker's
commission agreement is attached hereto as EXHIBIT F.
29.21 Y2K DISCLOSURE. Tenant acknowledges that Landlord has represented, that to
Landlord's actual knowledge, the necessary equipment, software and appliances,
including but not limited to elevators, heating, ventilating and air
conditioning systems, access systems, door locks, energy management systems and
other building systems (collectively, the "BUILDING SYSTEMS") owned by Landlord
and located within the Building may not remain fully functional and perform
their normal operations on and after January 1, 2000 and may experience
interruptions or malfunctions as a result of the passage from the year 1999 to
the year 2000. If any repairs, alterations or replacements are required to
restore the Building Systems to their functional and operation condition,
Landlord will cause such repairs, alterations or replacements to be promptly and
timely made at Landlord's sole cost and expense.
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29.22 ENTIRE AGREEMENT. This Lease constitutes the entire agreement between
Landlord and Tenant regarding the subject matter hereof and supersedes all oral
statements and prior writings related thereto. Except for those set forth in
this Lease, no representations, warranties, or agreements have been made by
Landlord or Tenant to the other with respect to this Lease or the obligations of
Landlord or Tenant in connection therewith.
Landlord and Tenant have executed this Lease as of the day and year
first above written.
LANDLORD: LMC Properties, Inc.
Signature:/s/Terri Beattie
------------------------------------------
By: Terri Beattie
Its: Director, Real Estate
TENANT: Innotrac Corporation
Signature:/s/David Ellin
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By: David Ellin
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Its: Senior Vice President and Chief Operating Officer
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