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EXHIBIT 10.16
THIRD MODIFICATION AND RATIFICATION OF LEASE
THIS THIRD MODIFICATION AND RATIFICATION OF LEASE ("Modification") is
made and entered into effective this 15th day of January 2000 by and between ST.
PAUL PROPERTIES, INC., a Delaware corporation ("Landlord"), and THE TRIZETTO
GROUP, INC., a Delaware corporation ("Tenant").
W I T N E S S E T H:
WHEREAS, Landlord and Tenant entered into that certain Office Lease
dated as of April 26, 1999, as amended by that certain Lease commencement letter
signed by Landlord on September 9, 1999, and by Tenant on September 7, 1999, by
that certain First Modification and Ratification of Lease entered into effective
November 1, 1999, and by that certain Second Modification and Ratification of
Lease entered into effective December 27, 1999 (hereafter collectively the
"Lease"), for the rental of certain commercial real property located in the
Building known as Atrium I, 6061 S. Willow Drive, Englewood, Colorado, and more
particularly described in the Lease as Suites 300 and 310 (the "Premises"); and
WHEREAS, pursuant to the final space plan prepared by Landlord's
architect, and re-measurement of the Expansion Premises in accordance with BOMA
standards, the size of the Expansion Premises has been determined to contain
23,775 rentable square feet, rather than 22,670 rentable square feet as stated
in the Second Modification and Ratification of Lease; and
WHEREAS, pursuant to the Second Modification and Ratification of
Lease Landlord and Tenant agreed to further amend the Lease to reflect any
change in the measurement of the actual size of the Expansion Premises, together
with the calculation of Base Rent, and all other matters that are dependent upon
the size of the Expansion Premises; and
NOW, THEREFORE, in consideration of the foregoing, the agreements of
the parties, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Definitions. All capitalized terms used herein not otherwise
defined in this Modification shall have the meanings given them in the Lease.
2. Additional Premises. The identification of the Leased Premises in
Section 1.03 (B) of the Lease is hereby amended by replacing the description of
the Expansion Premises with the following:
EXPANSION PREMISES:
That part of the Building outlined on Exhibit A-1 to the
Second Modification and Ratification of Lease, called Suite
300, on the third floor(s) of the Building, containing
approximately 23,775 rentable square feet, including tenant
improvements to be made by Landlord pursuant to Exhibit B-2
to the Third Modification and Ratification of Lease.
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3. Tenant's Proportionate Share. Section 1.03(J) of the Lease is
amended effective on the Expansion Premises Commencement Date by replacing the
description of Tenant's Proportionate Share of the Expansion Premises with the
following:
Tenant's Proportionate Share for the Expansion Premises
shall be 17.8%.
4. Security Deposit. Section 1.03(K) of the Lease is hereby amended
by increasing the security deposit for the Premises and Expansion Premises in
the additional amount of One Thousand Eight Hundred Eighteen and 65/100 Dollars
($1,818.65), for a total security deposit of One Hundred Sixteen Thousand Eight
Hundred Forty-five and 94/100 Dollars ($116,845.94), which additional amount
shall be payable to Landlord upon execution of this Modification.
5. Parking Spaces. Section 1.03(O) of the Lease, as amended by the
Second Modification and Ratification of Lease, is further amended effective on
the Expansion Premises Commencement Date by replacing the additional language
contained in Paragraph 9 of the Second Modification and Ratification of Lease
with the following:
During the Expansion Premises Term, Tenant shall be
entitled to the additional non-exclusive use in common with
Landlord and others of a maximum of seventy-seven (77)
parking spaces in the Building parking areas at no charge
during the primary Term of the Lease. Within the foregoing
parking allowance, Tenant shall be entitled during the
primary Lease Term to ten (10) covered parking spaces in
the Building parking area at the rate of $30.00 per parking
space per month. In addition, through June 30, 2002, Tenant
may be entitled to use additional parking spaces, in an
amount to be determined by Landlord, on a non-reserved,
non-exclusive basis in common with other tenants of the
Building, in that certain parking lot adjacent to the
Building parking lot and currently leased by Landlord and
known as the "Sheplers" parking lot, at no additional cost
to Tenant. Landlord reserves the right to strictly enforce
the number of parking spaces utilized by Tenant during the
term of this Lease based upon a parking ratio of 3.3
parking spaces per 1,000 rentable square feet.
6. Base Rent. Effective on the Expansion Premises Commencement Date,
Section 1.03(H) of the Lease entitled Base Rent, and Section 1.03(I) of the
Lease entitled Monthly Installments of Base Rent, shall be amended with respect
to the Expansion Premises as follows:
(a) Expansion Premises Base Rent. In addition to the
Base Rent payable with respect to the Premises,
Tenant shall also pay Base Rent with respect to
the Expansion Premises, payable monthly in
advance, without demand, deduction or set-off, in
accordance with the following schedule:
Rentable Lease Annual Monthly
Months Square Feet Rate Payment Payment
------ ----------- ---- ------- -------
1-60 23,775 $19.75/rsf $469,556.25 $39,129.69
(5/1/00-4/30/05)
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61-72 23,775 $20.15/rsf $479,066.25 $39,922.19
(5/1/05-4/30/06)
7. Tenant Improvements. Paragraph 13 of the Second Modification and
Ratification of Lease shall be replaced in its entirety with the following:
Landlord agrees to provide Tenant with an allowance for tenant
improvements for the Expansion Premises in the amount and in the
manner as set forth in the attached Exhibit B-2 - Provisions Relating
To Construction Of Tenant's Expansion Premises (Finish Allowance
only), which shall replace in its entirety Exhibit B-1 to the Second
Modification and Ratification of Lease.
8. Real Estate Brokers. Each of the parties hereto hereby warrants
and represents to the other party that it has not dealt with or been represented
by any broker in connection with its execution of this Modification other than
Landlord's listing agent, Venture Group Real Estate, LLC, acting as agent of
Landlord, and Julien J. Studley, Inc., acting as agent of Tenant. Landlord shall
be responsible for payment of any compensation or commission to Venture Group
Real Estate, LLC, and Julien J. Studley, Inc., with respect to this
Modification. Tenant agrees to indemnify and hold Landlord harmless from and
against any other claims for commissions or similar compensation from any other
person claiming an entitlement to any such payment as a result of its
representation of Tenant. In addition, Landlord agrees to indemnify and hold
Tenant harmless from and against any claims for commissions or similar
compensation from any other broker or person claiming an entitlement to any such
payment as a result of its representation of Landlord.
9. Performance of Obligations. Tenant hereby acknowledges and
confirms that, as of the date hereof, Landlord has performed all obligations on
the part of the Landlord under the Lease and that Tenant has no claims against
Landlord or claims of offset against any rent or other sums payable by Tenant
under the Lease.
10. Conflicts and Non-Amended Provisions. In the event of any express
conflict or inconsistency between the terms of the Lease and the terms of this
Modification, the terms of this Modification shall control and govern. In all
other respects, the terms, covenants and conditions of the Lease are hereby
ratified, reaffirmed and republished in their entirety.
11. No Offer. The submission of this Modification by Landlord to the
Tenant is not an offer to modify or amend the Lease and is not effective until
execution and delivery by both Landlord and Tenant.
12. Entire Agreement. This Modification contains the entire agreement
between the parties as to its subject matter and supersedes any and all prior
agreements, arrangements or understandings between the parties relating to the
subject matter hereof.
13. Counterparts. This Modification may be executed in a number of
identical counterparts, each of which shall be deemed an original for all
purposes, but all of which together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the parties have entered into this Modification
effective as of the date first set forth hereinabove.
LANDLORD: TENANT:
ST. PAUL PROPERTIES, INC., a THE TRIZETTO GROUP, INC.,
Delaware corporation a Delaware corporation
By: /s/ R. William Inserra By: /s/ Michael J. Sunderland
----------------------------------- ----------------------------------
R. William Inserra Michael J. Sunderland
Vice President - Asset Management Senior VP, Chief Financial Officer
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EXHIBIT "B-2"
PROVISIONS RELATING TO CONSTRUCTION OF TENANT'S EXPANSION PREMISES
(FINISH ALLOWANCE ONLY)
1. Landlord will provide Tenant with a construction credit in the sum
of up to Fifteen and No/100 Dollars ($15.00) per rentable square foot of the
Expansion Premises, which equals Three Hundred Fifty-six Thousand Six Hundred
Twenty-five and No/100 Dollars ($356,625.00) (the "Construction Credit"), which
may be used only against the cost of design and construction by Landlord of
Improvements or alterations permanently installed and incorporated in the realty
of the Expansion Premises or the Premises, including space plans and working
drawings of the Expansion Premises (excluding specifically fixtures, furniture
and equipment), as contemplated under the plans and specifications and working
drawings to be prepared by an architect selected by Tenant, and subject to
Landlord's reasonable approval, and to be initialed by Tenant and by Landlord
for identification and approval (the "Plans"); provided, however, that Landlord
shall provide Tenant with one space plan for the Expansion Premises at no charge
(the cost of any additional space plans and all working drawings shall be paid
for out of the Construction Credit). Landlord will cause such work (the "Work")
to be performed in a good and workmanlike manner and in accordance with the
Plans, using Landlord's standard building materials (unless otherwise specified
by Tenant), and using one of Landlord's approved contractors for the Building.
All Work performed shall be subject to Landlord's review and approval, including
but not limited to administration of the Work, which administration shall be
subject to a construction management fee payable to Landlord out of the
Construction Credit of one percent (1%) of the Construction Credit, which is
equal to Three Thousand Five Hundred Sixty-six and 25/100 Dollars ($3,566.25).
All Work shall also be subject to the reasonable approval of the architect. If
the Construction Credit is not used within six months of the Commencement Date,
the unused portion shall revert back to Landlord.
2. In the event the cost of the Work exceeds the Construction Credit,
Landlord agrees to provide an additional Construction Credit (the "Additional
Construction Credit") of up to Three and No/100 Dollars ($3.00) per rentable
square foot, which equals Seventy-one Thousand Three Hundred Twenty-five and
No/100 Dollars ($71,325.00) provided the cost of any such Additional
Construction Credit shall increase the Base Rent under the Lease for the
Premises and the Expansion Premises by amortizing such Additional Construction
Credit over the Term at the rate of eleven percent (11%) per annum, compounded
monthly, and further provided, that Landlord and Tenant shall enter into an
amendment to this Lease memorializing the amount of the Additional Construction
Credit used, and the new Base Rent for the Premises and the Expansion Premises.
Any portion of the Additional Construction Credit used by Tenant shall also be
subject to a one percent (1%) construction management fee payable to Landlord
out of the Additional Construction Credit. Tenant shall have the option of
reimbursing Landlord the Additional Construction Credit amounts provided by
Landlord within thirty (30) days of the final accounting of such costs.
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3. All material and labor selected by Tenant must be readily
available in Denver, Colorado. Tenant agrees that promptly after the execution
of the Modification, Tenant will advise Landlord of all selections or
designations as to paint, color and materials, if other than Landlord's standard
materials.
4. Any additional work which Landlord may agree to perform, or cost
of changes or any materials or installations other than Landlord standard
materials or installations which Landlord may agree to obtain over and above the
Construction Credit, or the Additional Construction Credit if utilized by
Tenant, (to be known as "Tenant's Overstandard Work"), shall be procured at a
cost, plus 5% thereof as an administration payment. Costs include but are not
limited to so-called "general conditions" (e.g., trash, clean-up and hauling,
job lighting and power, insurance, safety protection, security and hoists) in
whole or in part apportionable to Tenant's Overstandard Work. If the aggregate
of all Tenant's Overstandard Work to which Landlord agrees is less than
$2,000.00, the whole amount shall be payable promptly after completion of such
work and after Landlord's billing Tenant for the work. If the aggregate of all
Tenant's Overstandard Work exceeds $2,000.00, such aggregate shall be payable
50% upon Tenant's signing with Landlord the agreement under which Landlord
agrees to perform such Tenant's Overstandard Work, and the balance shall be
payable in substantially equal progress payments promptly after Landlord's
billing Tenant for that work. Such payments in either event shall be collectible
as additional obligations which Tenant shall bear pursuant to the Lease, and, if
Tenant defaults in the payment of that work, Landlord shall have (in addition to
all other remedies) the same rights as provided in the Lease in the event of
Tenants' default in the payment of rent. Any Tenant's Overstandard Work shall
also be subject to the terms of the Lease and shall also be subject to
Landlord's approval of plans and specifications as set forth in Paragraph 1
above.
5. If the Expansion Premises are not ready for occupancy because of
delays attributable to Tenant (such as changes by Tenant to its finish
requirements after approval of the initial design, delays in providing
information or approving space plans and drawings, and like delays, but not
including the architect's reasonable rejection of the Work under Paragraph 1
above) the Expansion Premises Commencement Date shall be the date the Expansion
Premises would have been substantially completed and ready for occupancy in the
absence of such delays, which date is agreed to be May 1, 2000. Failure by
Landlord to complete the tenant finish improvements shall not relieve Tenant of
its duty to pay rent and perform its obligations under the Lease if such failure
is attributable to Tenant's failure to determine its requirements, approve plans
and specifications or otherwise facilitate completion of the tenant finish
improvements. However, if the Expansion Premises are not ready for occupancy
because of delays not attributable to Tenant, Force Majeure, or architect's
reasonable rejection of the Work pursuant to Paragraph 1 above, the Expansion
Premises Commencement Date shall be the first day of the month following the
date the Work is substantially complete and the Expansion Premises are
substantially ready for occupancy. In the event the Expansion Premises
Commencement Date is delayed beyond May 1, 2000, the Termination Date of the
Lease for the Premises and Expansion Premises shall be extended to the date
which is the last day of the month that is seventy-two (72) full months after
the Expansion Premises
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Commencement Date, and the parties shall enter into an amendment to the Lease
verifying the Expansion Premises Commencement Date and the Termination Date of
the Lease.
6. The terms "substantially complete" and "substantial completion"
are defined as the date when construction is sufficiently completed in
accordance with the contract documents, as modified by any change orders agreed
to by the parties, and subject to completion of Tenant's reasonable list of
punch-list items, so that Tenant can occupy the Expansion Premises for the use
for which it was intended.
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