Exhibit 10.45
AMENDMENT TO AND EXTENSION OF OFFICE LEASE
This Amendment to and Extension of Office Lease (this "Amendment") is by
and between MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, a Massachusetts
corporation ("Landlord"), through its agent, CORNERSTONE REAL ESTATE ADVISERS,
INC., and ST. MARY LAND & EXPLORATION COMPANY, a Delaware corporation
("Tenant"), and is dated as of December 14, 2001.
1. Purpose. This Amendment amends and extends that certain lease agreement
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titled Indenture dated June 1, 1989 (the "Original Lease") by and between The
Equitable Life Assurance Society of the United States, a New York corporation
("Equitable"), and Parish Corporation, a Colorado corporation ("Parish").
Equitable conveyed its interest in the Property and in the Original Lease (as
amended) to Landlord. Parish has assigned its interest in the Lease to Tenant
and Tenant has assumed Parish's obligations under the Lease as set forth in
paragraph 25, below. Landlord and Tenant desire to extend the currently
effective term of the Original Lease (as amended), to modify the definition of
the Premises, to provide for certain improvements to the Premises, and to make
certain other modifications to the Original Lease.
2. Interpretation. For purposes of this Amendment, the term "Original
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Lease" means only the June 1, 1989 Indenture, described above (but not any
amendment thereto) and paragraphs 1 through 3 of the Rider attached thereto.
This Amendment amends the provisions and extends the term of the Original Lease.
In the event of any inconsistency between the provisions of this Amendment and
the provisions of the Original Lease, the provisions of this Amendment shall
control. Capitalized terms used and not otherwise defined herein shall have the
meanings set forth for them in the Original Lease. This Amendment and the
Original Lease are referred to collectively as this "Lease."
3. Premises. As of the date of this Amendment, Tenant occupies all of
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Floors 7, 9, and 11 and portions of Floors 6, 8, and 10 of Denver Financial
Center Tower II, Denver, Colorado (the "Building") pursuant to the terms of the
Original Lease (as amended).
a. On or before approximately February 1, 2002, Landlord shall
complete Tenant Improvements, as described in paragraph 10, below, to Suite 420
as shown on Exhibit A ("Suite 420") and to the 5th Floor of the Building. Upon
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such completion, Tenant shall take possession of such space pursuant to the
terms of this Lease. Tenant shall thereupon surrender all space on the 6th
Floor, 8th Floor, and 10th Floor (to the extent occupied by Tenant) of the
Building, Landlord shall complete Tenant Improvements to the 6th Floor on or
before approximately April 1, 2002 pursuant to paragraph 10, below at which time
Tenant shall commence occupancy thereof pursuant to this Lease. Tenant shall
thereupon surrender all space on the 7th Floor, and Landlord shall complete
Tenant Improvements to the 7th Floor on or before approximately June 1, 2002
pursuant to paragraph 10, below, at which time Tenant shall complete the
vacation of the 11th Floor and commence occupancy of the 7th Floor pursuant to
this Lease. In addition, this Lease shall be effective as of June 1, 2002 with
respect to Tenant's occupancy of the 9th Floor of the Building. The estimated
completion dates in this paragraph are dependent upon, among other things,
Tenant's compliance with the provisions of paragraph 10, below, and shall be
subject to delays caused by Force Majeure (as defined below).
b. For purposes of this Lease, Suite 420 and the 5th, 6th, 7th, and
9th Floors of the Building shall constitute the "Premises" and be deemed to
consist of approximately 42,660 rentable square feet. Rentable square footage
computations are made by Landlord in accordance with BOMA method of measurement
ANSI/BOMA Z65.1-1996.
c. The Commencement Date under this Amendment with respect to each
floor, or portion thereof, set forth above shall be the date which is the
earlier of (i) the date Tenant commences actual occupancy of such portion of the
Premises and (ii) the date which is the later of the date set forth in
subparagraph (a), above, or the date such portion of the Premises has been
substantially completed in accordance with the plans as determined in writing by
the architect subject only to punch-list items which will not materially
interfere with Tenant's occupancy of such portion of the Premises and, in the
case of the 9th Floor, June 1, 2002. The termination date with respect to leased
space under the Original Lease shall be the date on which Tenant completely
vacates and surrenders to Landlord all space on a particular floor in the
condition required by the Original Lease, except with respect to any floor or
portion thereof which is intended by the Plans to be demolished and rebuilt as
part of the Premises.
4. Property. For purposes of determining operating expenses under paragraph
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1(b) of the Lease, "Property" means the commercial office structure, together
with all appurtenant plazas, subgrade areas, and other improvements situated on
the land and known as the "Denver Financial Center Tower I and Tower II", and
Tenant's share means 9.79% (42,660/435,672).
5. Effective Date and Rent Commencement. Payment of rent with respect to
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each portion of the Premises under this Lease shall commence three months after
the Commencement Date as determined under paragraph 3(c), above. The estimated
dates on which rent shall commence with respect to various floors comprising the
Premises are as follows:
Suite 420 and 5th Floor: May 1, 2002
6th Floor: July 1, 2002
7th and 9th Floors: September 1, 2002
As Tenant vacates floors as contemplated by paragraph 3, above, rent payable
under the Original Lease for such vacated floors shall terminate. Landlord and
Tenant intend that, so long as Tenant's relocation from currently occupied space
to newly remodeled portions of the Premises in a commercially reasonable and
business-like matter, rent payments due with respect to the space being vacated
shall terminate as of the Commencement Date with respect to the new space.
Except as provided in this paragraph 5 and paragraph 3(c), above, the effective
date for the application of this Amendment shall be June 1, 2002.
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6. Lease Term. The Lease Term for the Premises shall expire May 31, 2012.
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7. Rent. Tenant shall pay Base Rent, Additional Rent, and all other amounts
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due to Landlord under this Lease on the first day of each month during the Term
(and pro rata for any partial month) at the office of Landlord's building
manager, currently Transwestern Commercial Services, 1775 Sherman Street, Lobby
Level, Denver, CO 80203 without demand, the same being waived and without
set-off or deduction, according to the following schedule:
Annual Annual Monthly
Time Period Rent Per r.s.f. Rent Rent
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Commencement Date - 05/31/04 $17.50 per r.s.f $746,550.00 $62,212.50
6/1/04 - 05/31/07 $18.50 per r.s.f $789,210.00 $65,767.50
6/1/07 - 05/31/12 $19.50 per r.s.f. $831,870.00 $69,322.50
8. Base Year. Under this Lease, the Base Year for Taxes and Operating
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Expenses shall be the full calendar year 2002. Each calendar year, Tenant shall
pay its Tenant's share (9.79%) of the difference between Operating Expenses and
Taxes for such calendar year and actual Operating Expenses and Taxes incurred
during the Base Year.
9. Taxes and Operating Expenses. For purposes of the provisions of
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paragraph 1(b) of the Original Lease, Taxes and Operating Expenses shall have
the following meanings:
Taxes: The term "Taxes" means all taxes and assessments,
special or otherwise, levied upon or with respect to the Building
and the Property (including air rights) imposed by federal, state
or local government, use, occupancy, excise or other similar
taxes, and taxes on rent or other income from the Building
(computed, in case of a graduated tax as if Landlord's income
from the Building were Landlord's sole taxable income), the cost
of contesting by appropriate proceeding the amount or validity of
any of the aforementioned taxes or assessments, and taxes and
assessments of every kind and nature whatsoever levied or
assessed and imposed on Landlord in lieu of or in substitution
for existing or additional real or personal property taxes or
assessments on the Building or the Property; except that Taxes
shall not include general income, franchise, capital stock,
estate or inheritance tax, unless Landlord equitably determines
that such Taxes are in lieu of or in substitution for real estate
taxes. In the case of special taxes and assessments payable in
installments, only the amount of such installment due and payable
during a single calendar year shall be included in Taxes for that
year.
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Operating Expenses: The term "Operating Expenses" shall be
deemed to include all costs which, for federal tax purposes, may
be expensed rather than capitalized and which Landlord will incur
in owning, maintaining and operating the Building or the
Property, exclusive of Taxes, as hereinabove defined, mortgage
interest and depreciation. Without limitation to the foregoing,
the term "Operating Expenses" shall mean those costs incurred
during each year of the term of the Lease in respect of the
operations and maintenance of the Property and the Building in
accordance with accepted principles of sound management and
accounting practices as applied to the operation and maintenance
of comparable office buildings in the Central Business District
of Denver, Colorado, including the cost of or charges for the
following by way of illustration, but without limitation:
landscaping and snow removal, water and sewer, insurance
premiums, licenses, permits and inspections, heat, light,
electrical power, steam, security, janitorial services,
maintenance of and repairs to equipment servicing the Property or
the Building, window cleaning, refuse removal services,
air-conditioning, supplies, materials, equipment and tools,
administration and management of the Property and the Building,
changing the Building's electric service provider and associated
installation, maintenance, repair and service costs, changing any
company providing electricity service, personal property taxes on
the personal property used in the operation of the Property or
the Building, the cost, as amortized over the useful life of the
improvement as reasonably determined by Landlord with interest at
one and one-half percent (l1/2%) above the prime rate announced
from time to time by the Wells Fargo Bank of Denver on the
unamortized amount of any capital improvement made after the
Effective Date which reduces Operating Expenses, but in an amount
not to exceed such reduction for the relevant year, and the cost
of contesting by appropriate proceedings the applicability to the
Property or the Building or the validity of any statute,
ordinance, rule or regulation affecting the Property or the
Building which might increase Operating Expenses. Operating
Expenses shall not include: (i) costs for repairs or other work
occasioned by fire, windstorm or other insured casualty to the
extent covered by insurance proceeds; (ii) costs incurred in
leasing or procuring new tenants (i.e., lease commissions,
advertising costs and costs for renovating space for new
tenants); (iii) legal costs in enforcing the terms of any lease;
(iv) interest or amortization payments on any mortgage or
mortgages; (v) rental for any ground or underlying lease or
leases; (vi) salaries or other compensation paid to any executive
employees above the grade of Senior Property Manager (unless the
resident Senior Property Manager has executive responsibilities,
in which case such person's salary shall be allocated between
duties as property manager, which shall be charged as an
Operating Expense, and duties as an executive, which shall not be
allocated as an Operating Expense); (vii) wages, salaries, or
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other compensation paid for clerks or attendants in concessions
or newsstands operated by Landlord; and (viii) those exclusions
from Operating Expenses listed on Exhibit B to this Amendment.
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If Landlord makes any capital improvement during the term of the Lease in order
to comply with safety or any other requirements of any federal, state or local
law or governmental regulation that is enacted after the date of this Amendment,
then the cost as amortized over the useful life of the improvement as reasonably
determined by the Landlord with interest at one and one-half percent (l1/2%)
above the prime rate announced from time to time by Wells Fargo Bank of Denver,
shall be deemed an Operating Expense in each of the calendar years during which
such amortization occurs, and Tenant shall be responsible for Tenant's Share of
any such amortized expense.
The remaining terms of Paragraph 1(b) are not modified.
10. Tenant Improvements.
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a. Landlord shall provide to Tenant an allowance (the "TI Allowance")
of up to $32.70 per rentable square foot of Suite 420 and Floors 5, 6, and 7 of
the Building, approximately 33,181 rentable square feet, or $1,085,018.70. Such
allowance shall be utilized by Tenant solely for the architecture, design,
engineering, construction, and construction management (including project
management services of CRESA Partners or an affiliate up to a maximum of $2.00
per rentable square foot) in the construction of Tenant Improvements to the
Premises. Landlord shall charge a construction management fee of 2% of the hard
construction costs which shall be paid from the TI Allowance. "Hard construction
costs" include all costs of labor and materials related to the physical
construction of the Tenant Improvements and do not include fees of architects
and engineers, project management fees, or insurance. Tenant Improvements shall
include only those additions and improvements which are considered real property
under Colorado law, including capital improvements to the Building as approved
by Landlord and shall be installed only pursuant to detailed plans and
specifications which have been approved in advance by Landlord, which approval
shall not be unreasonably withheld or delayed. Landlord and Tenant have approved
the preliminary space plan (the "Preliminary Drawings") for improvements to the
Premises (as finally embodied in the detailed plans and specifications, the
"Tenant Improvements") prepared by W.E. Kieding Interior Architects (the
"Architect"). Landlord shall review the detailed plans and specifications
described above and provide comments to Tenant within five (5) business days of
delivery. Thereafter, comments on revised plans and plan revisions shall be
provided no later than two (2) business days after request by the other party.
i. All such Tenant Improvements shall be completed by a
contractor reasonably approved by Landlord pursuant to a contract
between such contractor and Landlord.
ii. Landlord shall require its general contractor to solicit
written bids from reputable subcontractors and suppliers with respect to
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all material subcontracts and material purchases. Such subcontracts and
contracts for material purchases shall be awarded to the lowest bidder
unless Tenant consents to use of a different subcontractor or supplier,
and such consent shall be granted on a commercially reasonable basis.
The contract with the general contractor shall contain the provisions
set forth in this subparagraph.
iii. Landlord reserves the right to require that any Tenant
Improvement affecting any significant system in the Building to be
completed only by Landlord's contractor or subcontractor at Tenant's
expense, provided the charges of such contractors are competitive with
others in their trade.
iv. Tenant shall be liable to pay any amount for such Tenant
Improvements in excess of the amount of the allowance set forth above
("Excess Costs"). Landlord shall promptly notify Tenant upon Landlord's
discovery that there are Excess Costs, whereupon Tenant shall have the
opportunity to make changes to the approved plans so as to reduce the
costs. Landlord shall, upon Tenant's written request, finance an amount
to pay for Excess Costs not to exceed $1.00 per rentable square foot or
$33,181.00. Such amount shall be amortized over the remaining Term of
the Lease at an interest rate of 12% per year and paid to Landlord in
equal installments monthly as Base Rent.
b. Tenant may authorize changes in the Tenant Improvements during
construction only by written change order. All such changes will be subject to
Landlord's prior written approval, which approval shall not be unreasonably
withheld or delayed, and shall be subject to Tenant's final agreement in writing
as to any delays attributable to the change and the costs of such change
(including availability of Landlord's financing and Tenant electing to have
Landlord finance such costs as provide in subparagraph (a)(iv), above), all of
which costs in excess of the TI Allowance shall be prepaid by Tenant. Tenant
shall confirm its final agreement to a change order by executing a written
agreement and paying to Landlord any amounts payable in connection with the
change order. If Tenant fails to deliver the final agreement or payment in a
timely manner, Tenant shall be deemed to have withdrawn the proposed change
order, and Landlord will not proceed with the change.
c. In addition to the TI Allowance described above, Landlord shall
provide a TI Allowance for the portion of the Premises located on the 9th Floor.
Such TI Allowance may be used with respect to Tenant Improvements for which a
building permit is issued on or after June 1, 2002 but prior to June 1, 2004.
The amount of the TI Allowance shall be $32.70 per rentable square foot of the
Premises on the 9th Floor being improved multiplied by a fraction the numerator
which is the number of full calendar months remaining in the term of the Lease
subsequent to the date of issuance of the building permit and the denominator of
which is 120. The provisions of the preceding subparagraph (a) shall apply to
the construction of Tenant Improvements to the 9th Floor. In the event the costs
of Tenant Improvements to the 9th Floor exceed the TI Allowance, at the request
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of Tenant, Landlord shall advance up to an additional $1.00 per square foot on
the terms and conditions set forth in paragraph 10(a)(iv), above.
d. Tenant shall receive no credit for any unused TI Allowance.
e. The plans for constructing the Tenant Improvements contemplate
that the Landlord will make certain repairs and replacements to base building
systems, and the expense of such repairs and replacements are to be paid from
the TI Allowance. Any repairs or replacements to the base building systems in
addition to those contemplated by the plans which are necessary in order to
provide services to the Premises as required by this Amendment or required by
appropriate authorities to comply with applicable building codes shall be the
responsibility of Landlord.
f. Landlord shall notify Tenant in writing at such time as Landlord
deems the construction of a portion of the Tenant Improvements (which portion
shall not be less than all of the Tenant Improvements for a particular floor) to
be complete and the Premises ready for occupancy, which notice shall be
accompanied by a certificate of the Architect that the Tenant Improvements have
been substantially completed in accordance with the approved plans. Upon
Landlord so notifying Tenant of completion, Landlord, Tenant, and the contractor
shall conduct an inspection of the Premises to verify that the applicable Tenant
Improvements have been satisfactorily completed. As a part of the inspection,
the inspecting parties shall prepare and execute a punch-list of items of
incomplete work. Landlord shall cause the general contractor to promptly
commence the punch-list work and to complete all such work within thirty (30)
days after the date of the punch-list.
g. Subject to Tenant complying with reasonable requirements relating
to balancing the HVAC system, Landlord shall maintain the Premises according to
ASHRAE standards as set forth in Exhibit C to this Amendment. Tenant's
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requirements may include the following: maintaining window coverings in a closed
position during the cooling season; not covering registers or returns; not
making substantial changes in the location of electrical equipment, lights, and
other heat generators compared to the plans; not accessing or changing
thermostats without input from Building management; and not using space heaters
or other substantial generators of heat in the Premises. Landlord shall provide
electrical power to the Premises, exclusive of the power required to run base
building systems and building standard lighting, in an amount equal to or
greater than 1.7 watts per rentable square foot based on an "Average Running
Load" of Tenant's low voltage electrical demand. In addition, Landlord shall
make available to Tenant and the Premises the additional electrical service as
set forth on Exhibit C to this Amendment. Landlord shall not require Tenant to
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install a submeter with respect to electrical service unless there is a material
change in Tenant's electrical usage from that contemplated by the plans.
Electrical usage, as shown on the Architect's plans dated November 2, 2001, does
not constitute "heat generating machines or equipment" which triggers certain
rights of Landlord under Section 2(b) of the Original Lease.
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h. Upon default by Landlord in providing electrical service to the
Premises, Tenant shall have the right to an abatement of rent for each day in
which there has been an Interruption of Electrical Service (as defined below).
Landlord shall be deemed to be in default in providing electrical service only
if, in any 12-month period, there have been more than two Interruptions in
Electrical Service or if, during the Term, there have been more than four
Interruptions in Electrical Service. An Interruption in Electrical Service shall
mean that:
i. there has been a failure to provide electrical service to any
part of the Premises at the minimum levels required by this Amendment;
ii. the interruption has, in Tenant's reasonable opinion,
materially interfered with its ability to conduct its business;
iii. the interruption is for reasons other than Force Majeure,
except insufficiency in capacity of the Building's base systems shall
not be deemed to be beyond Landlord's reasonable control; and
iv. Tenant has given Landlord written notice of such
interruption and interference within one business day of its occurrence.
Upon any Interruption of Electrical Service, Landlord will use its best efforts
to determine the cause of the interruption and remedy the same as soon as
possible. Thereafter, Landlord shall notify Tenant as to what Landlord has
determined to be the cause of the Interruption of Electrical Service and how it
has remedied the same. Tenant, through its engineers and consultants, shall have
the right, at Tenant's expense, to participate in investigating the cause of the
interruption. Tenant's remedies hereunder shall be in addition to any other
remedies available to Tenant.
11. Brokerage. Tenant warrants to Lender that Tenant has not dealt with any
broker, agent, or other person who may be entitled to a commission in connection
with the modification and extension of the Lease other than CRESA Partners and
Cushman & Wakefield of Colorado, Inc. ("Cushman"). Cushman is Landlord's
agent and owes a fiduciary obligation to Landlord only. Tenant is represented by
CRESA Partners which owes a fiduciary obligation to Tenant only. Landlord agrees
to pay CRESA Partners a brokerage commission with respect to the execution of
this Lease equal to $178,140.00. One half of such commission, or $89,070.00,
will be paid to CRESA Partners upon execution and delivery of this Amendment to
Landlord and the balance shall be paid promptly following Landlord's receipt of
Tenant's rent payment due May 1, 2002 and Tenant's having taken full possession
of Suite 420 and the 5th and 6th Floors to the extent such portions of the
Premises are ready for occupancy.
12. Right of First Refusal.
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a. Subject to the terms and conditions contained herein, Tenant shall
have a continuing right ("Option") to lease all or part of the remaining office
space located on the 4th and 8th Floors of the Building, respectively (the
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"Option Space"), on and subject to the terms of this paragraph 12. This Option
shall be subject to Landlord's right to lease all or part of the Option Space
which becomes subject to a Letter of Intent to Lease ("LOI") between a
prospective tenant and Landlord from time to time ("Offer Space") provided
Landlord gives Tenant notice of its intent to lease such Offer Space and Tenant
does not exercise its Option to lease such Offer Space as provided in
subparagraph (b), below.
b. If during the initial Term of this Lease, Landlord enters an LOI,
Landlord shall promptly provide Tenant with written notice (the "Offer Notice")
that Landlord has entered into the LOI. The Offer Notice shall identify the
Offer Space, the name of the prospective tenant, and the rent rate. Tenant shall
have seven (7) business days following the Offer Notice within which to exercise
its Option to lease the Offer Space in accordance with the terms set forth
below. Should Tenant indicate that it is not prepared to lease the Offer Space,
whether by notice to Landlord or by failing to respond to the Offer Notice
within the seven (7) business day period, then Tenant shall be deemed to have
waived its Option with respect to such Offer Space. Upon such waiver, for a
period of 90 days Landlord may lease the Offer Space to the prospective tenant
at a rent not less than 90% of the rent set forth in the LOI without having to
re-offer the Offer Space to Tenant. If during such 90-day period Landlord
desires to lease the Offer Space to the prospective tenant named in the LOI for
a rent less than 90% of the rent set forth in the LOI, Landlord shall notify
Tenant of such fact and again offer the Offer Space to Tenant and Tenant shall
accept or reject such offer within two business days. If Tenant fails to respond
within such two business-day period, Tenant shall be deemed to have rejected the
offer and Landlord may lease the Offer Space within the original 90-day period
to the prospective tenant pursuant to the LOI at not less than 100% of the rent
as so modified. If Landlord does not lease the Offer Space to the prospective
tenant within the 90-day period, Tenant shall again have its continuing Option
to lease the Offer Space on the terms provided in this paragraph 12 and Landlord
shall not lease the Offer Space unless Landlord re-offers the Offer Space to
Tenant on the terms provided in subparagraph (a), above.
c. Tenant's Option shall be the Option to lease the Option Space at
the then current rent per square foot under the Lease and otherwise in
accordance with the terms set forth below, and subject to existing rights to
expand, extend, or renew as set forth in this Lease. The term of the lease of
the Option Space shall be co-terminus with the term of the Lease, including
extensions. Landlord shall not be obligated to provide any allowance to Tenant
for tenant improvements or any other expense.
d. If Tenant exercises such Option, the effective date of Tenant's
leasing of the Option Space (the "Option Space Effective Date") shall be the
earlier to occur of (i) the date Tenant occupies the Option Space or (ii) the
date ninety (90) days following Tenant's notice of its intent to exercise its
option to lease the Option Space.
e. The Option Space shall be leased in "as is" condition, and all
other improvements in the Option Space shall be Tenant's responsibility at
Tenant's cost, and shall be made in accordance with the applicable provisions of
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this Lease and in compliance with all applicable laws, ordinances, and
regulations. The rights of Tenant under this provision shall not be severed from
this Lease or separately sold, assigned, or otherwise transferred, and shall
terminate at the expiration of the original Lease term.
13. Option to Renew. Tenant, but not any assignee or sublessee of Tenant,
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is hereby granted the option to renew this Lease for one (1) term of five (5)
years. Provided Tenant is not in default (after notice and expiration of any
applicable cure period), Tenant may exercise such option upon written notice to
Landlord with no less than nine (9) months prior written notice before the
expiration of the current Term. If Tenant fails to exercise the option by the
date set forth in the preceding sentence, then Tenant shall be deemed to have
elected not to exercise the option and this renewal option shall be deemed to
have terminated. Time is of the essence in the exercise of such option.
Notwithstanding the preceding, an assignee of Tenant which is owned or under
common ownership with Tenant or which owns Tenant may exercise the option to
renew set forth in this paragraph 13, provided such assignee's financial
position is reasonably acceptable to Landlord and provided Tenant continues to
be a party to the Lease during such renewal term. For purposes of the preceding
sentence, ownership means at least 51% equity ownership and 51% voting control.
a. The renewal term will be on the same terms and conditions as those
contained in this Lease except as follows:
i. There shall be no further rights to renew after the exercise
of the renewal option;
ii. Any tenant improvement allowance, rental concessions, or the
like, granted by Landlord to Tenant in the initial lease term shall not
be applicable in the renewal term; and
iii. The rent for the renewal term shall be the "Fair Market
Rental Value" defined as the amount per rentable square foot for the
Premises during the renewal term which is representative of and
comparable of the consideration charge for substantially comparable
office space in the Central Business District of Denver, Colorado taking
into consideration that the renewal is being made on an "as is" basis
without any tenant improvement allowance, rental concessions, or the
like.
b. In the event the parties cannot agree on Fair Market Rental Value,
either Landlord or Tenant may, by notice to the other, commence an arbitration
proceeding to determine Fair Market Rental Value as follows:
i. The arbitration shall be conducted by a three-member panel
composed of licensed Colorado real estate brokers, whose brokerage
activities for the last ten years have concentrated in office leasing in
the Central Business District of Denver, Colorado. Each of Landlord and
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Tenant shall, by notice to the other, identify one such broker to act as
an arbitrator. Within five days of such appointment, the two arbitrators
so selected shall select a third arbitrator meeting the preceding
qualifications, who shall act as chairman of the arbitration panel. In
the event a party fails to appoint an arbitrator, the arbitration shall
be conducted by the single arbitrator appointed by the other party. In
the event the two arbitrators cannot select a third arbitrator within
the applicable time period, such arbitrator shall be selected by the
President of the Denver Board of Realtors upon the request of either
party.
ii. The arbitrators shall be impartial.
iii. Within 15 days of the appointment of the third arbitrator,
each of the two party-appointed arbitrators shall prepare a memorandum
setting forth such arbitrator's estimate of the Fair Market Rental Value
of the Premises, including all comparable leases relied on and the
reasoning and rationale of such arbitrator.
iv. Within five days following the delivery of the reports of
the two party-appointed arbitrators to the third arbitrator, the third
arbitrator shall select as the Fair Market Rental Value the amount
determined by one or the other of the party-appointed arbitrators which,
in the determination of the third arbitrator, is closest to Fair Market
Rental Value as determined by such third arbitrator.
v. The place of the arbitration will be in the Central Business
District of Denver, Colorado. The rules of the arbitration shall be
established as needed by the third arbitrator. The decision of the
arbitrators shall be final, binding, and conclusive on Landlord and
Tenant and shall not be reviewable by a court other than on account of
fraud. Once the arbitrators have been appointed, neither the parties nor
their respective counsel may contact the arbitrators except in writing
with copies to the other party and its counsel or in telephone
conversations or meetings with counsel for both of the parties
participating. The fees of the two party-appointed arbitrators shall be
paid by the respective appointing party. The fees of the third
arbitrator shall be shared equally by the parties. All expenses
authorized by the third arbitrator in connection with the arbitration
shall be shared by the parties.
14. Early Termination Option. Subject to Tenant's compliance with the
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provisions of this paragraph, Tenant may, from time to time, surrender to
Landlord all or a portion of the Premises (the "Surrendered Premises"). To
exercise such early termination option, Tenant shall comply with each of the
following:
a. Tenant shall provide written notice to Landlord at least nine
calendar months in advance of the date of termination.
b. The date of termination shall be as of the last day of a calendar
month.
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c. The Surrendered Premises shall include all of the space on the
floor or floors on which the Surrendered Premises is located.
d. On the first day of the month in which the termination date
occurs, Tenant shall pay to Landlord as Additional Rent the unamortized
Transaction Costs with respect to the Surrendered Premises. "Transaction Costs"
means all of the following costs actually paid by Landlord and not reimbursed by
Tenant: TI Allowance, Excess Costs, real estate brokerage commissions, and
Landlord's legal expenses. As of the date of this Amendment, the TI Allowance is
$32.70 per rentable square foot, and real estate brokerage commissions are $6.65
per rentable square foot; Landlord's legal expenses will be determined as of the
execution of this Amendment. Because the actual Transaction Costs will not be
known until after the Tenant Improvements are completed, upon the request of
either party, the parties will confirm in writing the final actual Transaction
Costs. All Transaction Costs shall first be allocated on a per square footage
basis (and on a temporal basis to account for different Commencement Dates) as
between the Surrendered Premises and the balance of the Premises, and such
Transaction Costs allocated to the Surrendered Premises shall then be prorated
by multiplying such expenses by a fraction, the numerator of which is the number
of calendar months remaining in the Term divided by the total number of months
from the first month for which Base Rent was paid through the last month of the
Term.
e. The termination right granted by this paragraph shall not be
effective until after May 31, 2008.
f. At the time Tenant makes the payment required by subparagraph (d),
above, Tenant shall pay Landlord a termination fee equal to the amount of Rent
for the Surrendered Premises which would have been due for the first three
months following the termination date but for such early termination.
15. Parking. Landlord grants to Tenant the right, in common with others
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authorized by Landlord, to use the parking facilities owned by Landlord which
are part of the Property. As of the commencement of this Lease, Landlord shall
continue to provide to Tenant parking in 20 reserved spaces and 32 non-reserved
spaces as provided in the Original Lease (as amended). In the event Tenant
expands the Premises subject to this Lease, additional parking shall be provided
at a ratio of one parking space per each 1,208 rentable square feet added to the
Premises. In the event Tenant exercises its rights of early termination under
paragraph 14, above, the number of parking spaces provided to Tenant under this
Lease shall be reduced at a ratio of one parking space per each 1,208 rentable
square feet subtracted from the Premises (to the extent the Premises is 42,660
square feet or larger) or at the ratio of one parking space per each 820
rentable square feet subtracted from the Premises to the extent the Premises is
less than 42,660 square feet. Tenant shall pay Landlord the fee for parking
monthly, in advance, with monthly Rent. Through December 31, 2002, such parking
fee shall be the same as charged on September 18, 2001 under the Original Lease.
Thereafter, the parking fee will be adjusted to the then current market rate.
Thereafter, any adjustment in market rate shall be limited, on a cumulative
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basis, to 4% per year. Parking spaces which are currently allocated to and used
by Tenant's subtenants D.C. Dudley & Associates and Summo Minerals, shall
continue to be made available to them for the Term of this Lease at the parking
fee determined under this paragraph.
a. Landlord, at its sole election, shall designate types and
locations of parking spaces within the parking facilities provided, however, any
such designation shall be uniformly applied and shall not unfairly favor any
tenant in the Building. Landlord shall not move the location of Tenant's 20
reserved parking spaces and the reserved parking spaces which are currently
allocated to and used by Tenant's subtenants, D.C. Dudley & Associates and
Summo Minerals, unless required to do so by events not in Landlord's control;
provided, however, that Landlord will use good faith efforts to return such
spaces to their original location as soon as practical.
b. In addition to the limited rate increases in parking fees
described above, Landlord may increase the parking fee by the amount of any fee
or charge levied, assessed, imposed, or required to be paid to any governmental
authority on account of the parking of motor vehicles.
c. If requested by Landlord, Tenant shall notify Landlord of the
license plate number, year, make, and model of each automobile entitled to use
the parking facilities pursuant to this Lease, and if requested by Landlord,
such automobile shall be identified by identification tags and stickers and only
such designated automobiles will be permitted to use the parking facilities.
d. Parking facilities are provided solely for the accommodation of
Tenant. Landlord disclaims any responsibility or liability of any kind
whatsoever, from whatever cause, with respect to automobile parking areas and
adjoining streets, sidewalks, driveways, property, and passage ways, or the use
thereof by Tenant or Tenant's employees, customers, agents, contractors or
invitees.
During the period CRESA is providing construction management services as
contemplated by paragraph 10(a), above, a representative of CRESA may park in
the loading dock area of the Building pursuant to reasonable requirements of
Landlord, including sign-in procedures and depositing keys for such vehicle with
Building security.
16. Storage Space Agreement. Tenant entered into a certain Storage Space
------------------------
Agreement dated September 30, 1991, with Equitable, the then owner of the
Building. The Storage Space Agreement shall continue in effect at the current
rate of $10.00 per square foot. The Storage Space Agreement shall terminate as
of the last day of the Term of this Lease. Landlord may change the amount of
rent payable with respect to Storage Space Agreement, provided such rent shall
not be increased on a cumulative basis more than 3% per year from January 1,
2002.
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17. Hazardous Materials.
-------------------
a. Definition of Hazardous Materials. The term "Hazardous Materials"
---------------------------------
for purposes hereof shall mean any chemical, substance, materials or waste or
component thereof which is now or hereafter listed, defined or regulated as all
hazardous or toxic chemical, substance, materials or waste or component thereof
by any federal, state or local governing or regulatory body having jurisdiction
("Governmental Body"), or which would trigger any employee or community
"right-to-know" requirements adopted by any such body, or for which any such
body has adopted any requirements for the preparation or distribution of a
materials safety data sheet ("MSDS"). Landlord represents that, to its actual
knowledge, there are no Hazardous Materials currently existing on the Property,
except as may be disclosed in any report or document delivered to Tenant by
Landlord, Hazardous Materials brought to the Premises by Tenant or Tenant's
agents, commercially reasonable amounts of Hazardous Materials which are
constituents of cleaners, solvents, or ink, in commercially reasonable
quantities, as used in normal day-to-day operations of the Building and the
Premises, or Hazardous Materials contained in office equipment, appliances,
electrical fixtures, all of which are not in violation of applicable law.
b. No Hazardous Materials. Tenant shall not transport, use, store,
-----------------------
maintain, generate, manufacture, handle, dispose, release, or discharge any
Hazardous Materials. However, the foregoing provisions shall not prohibit the
transportation to and from, and use, storage, maintenance and handling within
the Premises of Hazardous Materials customarily used in the business or activity
expressly permitted to be undertaken in the Premises under Article 6, provided:
(a) such Hazardous Materials shall be used and maintained only in such
quantities as are reasonably necessary for such permitted use of the Premises
and the ordinary course of Tenant's business therein, strictly in accordance
with applicable Law, highest prevailing standards, and the manufacturers'
instructions therefor, (b) such Hazardous Materials shall not be disposed of,
released or discharged in the Building, and shall be transported to and from the
Premises in compliance with all applicable Laws, and as Landlord shall
reasonably require, (c) if any applicable Law or Landlord's trash removal
contractor requires that any such Hazardous Materials be disposed of separately
from ordinary trash, Tenant shall make arrangements at Tenant's expense for such
disposal directly with a qualified and licensed disposal company at a lawful
disposal site (subject to scheduling and approval by Landlord), and (d) any
remaining such Hazardous Materials shall be completely, properly and lawfully
removed from the Building upon expiration or earlier termination of this Lease.
Any clean up, remediation and removal work shall be subject to Landlord's prior
written approval (except in emergencies), and shall include, without limitation,
any testing, investigation, and the preparation and implementation of any
remedial action plan required by any Governmental Body or reasonably required by
Landlord. If Landlord or any Lender or Governmental body arranges for any tests
or studies showing, that this Article has been violated by Tenant, Tenant shall
pay for the costs of such tests.
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c. Notices To Landlord. Tenant shall promptly notify Landlord of: (i)
-------------------
any enforcement, cleanup or other regulatory action taken or threatened by any
governmental or regulatory authority with respect to the presence of any
Hazardous Materials on the Premises or the migration thereof from or to other
property, (ii) any demands or claims made or threatened by any party relating to
any loss or injury resulting from any Hazardous Materials on the Premises, (iii)
any release, discharge or non-routine, improper or unlawful disposal or
transportation of any Hazardous Materials on or from the Premises or in
violation of this Article, and (iv) any matters where Tenant is required by Law
to give a notice to any Governmental Body respecting any Hazardous Materials on
the Premises. Landlord shall have the right (but not the obligation) to join and
participate, as a party, in any legal proceedings or actions affecting the
Premises initiated in connection with any environmental, health or safety law.
At such times as Landlord may reasonably request, Tenant shall provide Landlord
with a written list, certified to be true and complete, identifying any
Hazardous Materials then used, stored, or maintained upon the Premises, the use
and approximate quantity of each such materials, a copy of any MSDS issued by
the manufacturer therefor, and such other information as Landlord may reasonably
require or as may be required by Law.
d. Indemnifications. Tenant will indemnify, defend (by counsel
----------------
reasonably acceptable to Landlord), protect, and hold Landlord and each of
Landlord's partners, employees, agents, attorneys, successors and assigns, free
and harmless from and against any and all claims, liabilities, penalties,
forfeitures, losses or expenses (including attorney's fees) or death of or
injury to any person or damage to any property whatsoever, arising from or
caused in whole or in part directly or indirectly, by:
i. the presence in, on, under, or about the Premises or
discharge in or from the Premises of any Hazardous Materials placed in,
under or about, the Premises by Tenant or at Tenant's direction,
excluding any tenant improvement work done by Landlord; or
ii. Tenant's use, analysis, storage, transportation, disposal,
release, threatened release, discharge, or Generation of Hazardous
Materials to, in, on, under, about, or from the Premises; or
iii. Tenant's failure to comply with any Hazardous Materials Law
applicable hereunder to Tenant.
Landlord will indemnify, defend (by counsel reasonably acceptable to Tenant),
protect, and hold Tenant and each of Tenant's employees, agents, attorneys,
successors and assigns, free and harmless from and against any and all claims,
liabilities penalties, forfeitures, losses or expenses (including attorney's
fees) or death of or injury to any person or damage to any property whatsoever,
arising from or caused in whole or in part, directly or indirectly, by
15
(1) the presence in, on, under or about the Premises or
the Building or discharge in or from the Premises or the
Building of any Hazardous Materials existing as of the date of
this Amendment (and not placed or released on the Premises by
Tenant) or placed, in, on, under, or about the Premises or the
Building by Landlord or at Landlord's direction; or
(2) Landlord's use, analysis, storage, transportation,
disposal, release, threatened release, discharge or generation
of Hazardous Materials to, in, on, under, about or from the
Premises or the Building; or
(3) Landlord's failure to comply with any Hazardous
Materials Law.
The obligations of each party ("Indemnifying Party") pursuant to this paragraph
includes, without limitation, and whether foreseeable or unforeseeable, all
costs of any required or necessary repair, cleanup or detoxification or
decontamination of the Premises or the Building, and the preparation and
implementation of any closure, remedial action or other required plans in
connection therewith, and survives the expiration or earlier termination of the
term of the Lease.
18. Alterations. Tenant shall make no alterations or additions to the
-----------
Premises without the prior written consent of Landlord, which consent shall not
be unreasonably withheld. Tenant shall complete any alterations authorized by
Landlord in good and workman like manner, using contractors and pursuant to a
general contract reasonably acceptable to Landlord, fully paid for and free from
liens, in accordance with plans and specifications approved by Landlord. In
exercising Landlord's reasonable discretion under this paragraph 18, Landlord
may take into consideration the following, without limitation: the effect of any
proposed alteration or addition on any base system of the Building, the need for
additional power, the need to rebalance the HVAC system, the effect on other
portions of the Building, the business reputation and financial qualification of
the contractors and their experience with the Building, and similar factors.
Tenant shall give Landlord at least 10 days prior written notice of the
commencement of any alterations to afford Landlord the opportunity to post a
notice of nonresponsibility, which notice Tenant will maintain in place
throughout the period of construction. Tenant indemnifies Landlord on account of
any mechanics', materialmen's, or similar lien or encumbrance to be filed
against the Premises or Building in connection with any such work undertaken by
Tenant. Tenant shall remove any such lien to Landlord's satisfaction within 20
days from its recordation, and if Tenant fails to do so, Landlord may take
whatever action Landlord deems necessary to remove such lien or encumbrance,
without being responsible to investigate its validity. All amounts so paid and
Landlord's costs, including attorneys' fees, shall be deemed additional rent
under this Lease and be payable in full upon demand. Tenant shall not be
required to remove any alterations or additions made by Tenant pursuant to this
paragraph unless removal is made a condition of Landlord's approval.
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19. Compliance with ADA. Notwithstanding anything to the contrary contained
-------------------
in this Lease, Landlord and Tenant agree that responsibility for compliance with
the Americans With Disabilities Act of 1990 (the "ADA") shall be allocated as
follows: (i) Landlord shall be responsible for compliance with the provisions of
Title III of the ADA for all Common Areas, including exterior and interior areas
of the Building not included within the Premises or the premises of other
tenants; (ii) Landlord shall be responsible for compliance with the provisions
of Title III of the ADA for any construction, renovations, alterations and
repairs made within the Premises if such construction, renovations, alterations
or repairs are made by Landlord for the purpose of improving the Building
generally or are done as Landlord's Work and the plans and specifications for
the Landlord's Work were prepared by Landlord's architect or space planner and
were not provided by Tenant's architect or space planner; (iii) Tenant shall be
responsible for compliance with the provisions of Title III of the ADA for any
construction, renovations, alterations and repairs made within the Premises if
such construction, renovations, alterations and repairs are made by Tenant, its
employees, agents or contractors, at the direction of Tenant or done pursuant to
plans and specifications prepared or provided by Tenant or Tenant's architect or
space planner.
20. General Office Use. Paragraph 11 of the Original Lease permits Tenant
-------------------
to occupy and use the Premises for general offices and no other purpose
whatsoever. "General office use" does not include use as a telephone call center
or other use which would increase the level of occupancy of the Premise to more
than one person per 170 square feet.
21. Rules and Regulations. Landlord may adopt Building Rules and
------------------------
Regulations and janitorial specifications from time to time which shall be
applicable to all tenants in the Building to the extent of any inconsistency
between the provisions of this Lease and the provisions of such Rules and
Regulations, this Lease shall control. A copy of the current Rules and
Regulations and janitorial specifications is attached to this Lease as Exhibit
-------
D.
- -
22. Surrender of Premises. Upon the expiration of the Term, or sooner
----------------------
termination of the Lease, Tenant shall quit and surrender to Landlord the
Premises, broom clean, in good order and condition, normal wear and tear and
damage by fire and other casualty excepted. All leasehold improvements and other
fixtures, such as light fixtures and HVAC equipment, wall coverings, carpeting
and drapes, in or serving the Premises, whether installed by Tenant or Landlord,
shall be Landlord's property and shall remain, all without compensation,
allowance or credit to Tenant. Any property not removed shall be deemed to have
been abandoned by Tenant and may be retained or disposed of by Landlord at
Tenant's expense free of any and all claims of Tenant, as Landlord shall desire.
All property not removed from the Premises by Tenant may be handled or stored by
Landlord at Tenant's expense and Landlord shall not be liable for the value,
preservation, or safekeeping thereof. At Landlord's option all or part of such
property may be conclusively deemed to have been conveyed by Tenant to Landlord
as if by bill of sale without payment by Landlord. The Tenant hereby waives to
the maximum extent allowable the benefit of all laws now or hereafter in force
in this state or elsewhere exempting property from liability for rent or for
debt. Tenant's Liebert air cooling unit presently located on the Premises shall
17
be deemed to be equipment owned by Tenant, and not a leasehold improvement or
fixture. Tenant shall, upon the termination of the Lease with respect to that
portion of the Premises where such Liebert unit is located remove such Liebert
unit and repair any damage to the Premises caused by such removal.
23. Cooperation Regarding Operation of HVAC System. Paragraph 11(k) of the
----------------------------------------------
Original Lease is revised to read in its entirety as follows:
Tenant shall cooperate in all reasonable ways with Landlord to
assure the effective operation of the Building's heating,
ventilating, and air-conditioning system. Such cooperation shall
include closing of window coverings during the cooling season; not
covering registers or returns; not making substantial changes in
the location of electrical equipment, lights, and other heat
generators compared to the plans; not accessing or changing
thermostat settings without input from Building management; and
not using space heaters or other substantial generators of heat in
the Premises
24. Landlord's Obligation to Repair. To the extent any part of the Tenant
--------------------------------
Improvements contemplated by this Amendment and paid for with the TI Allowance
constitute part of the Building's base utility systems or structural element,
Landlord, and not Tenant, shall be obligated to maintain, repair, and replace
such items as contemplated by the second sentence of paragraph 12 of the
Original Lease.
25. Assignment and Assumption. Parish is the original tenant under the
---------------------------
Original Lease (as defined in paragraph 1, above). Parish hereby assigns to
Tenant all of Parish's rights and obligations of whatsoever nature under the
Original Lease as modified by this Amendment. Tenant hereby assumes all
obligations of Parish under the Original Lease and this Amendment and agrees to
timely pay and perform all obligations of Parish and Tenant under the Original
Lease and this Amendment. Landlord shall not be required to provide to Parish
any notices under the Lease, including, without limitation, notice of
non-payment or non-performance or any notice of default.
26. Substitute Premises. Paragraph 26 of the Original Lease is deleted.
-------------------
27. Force Majeure. Landlord shall be excused for the period of any delay in
-------------
the performance of any obligation hereunder when prevented from so doing by a
cause or causes beyond its control ("Force Majeure"), including all labor
disputes, civil commotion, war, war-like operations, invasion, rebellion,
hostilities, military or usurped power, sabotage, governmental regulations or
controls, fire or other casualty, inability to obtain any material, services or
financing, or through acts of God. Tenant shall similarly be excused for delay
in the performance of any obligation hereunder by reason of Force Majeure;
provided:
18
a. Nothing contained in this paragraph or elsewhere in this Lease
shall be deemed to excuse or permit any delay in the payment of the Rent, or any
delay in the cure of any default which may be cured by the payment of money; and
b. No reliance by Tenant upon this paragraph shall limit or restrict
in any way Landlord's right of self-help as provided in this Lease.
28. Certifications and Covenants by Tenant. As additional consideration for
--------------------------------------
this Amendment, Tenant hereby certifies that:
a. The Lease is in full force and effect, unmodified except by this
Amendment, and binding on Tenant. Tenant ratifies the Lease.
b. There are no uncured defaults on the part of Landlord or Tenant
under the Lease.
c. There are no existing offsets or defenses which Tenant has against
the enforcement of the Lease by Landlord.
29. Authority. Each of Landlord and Tenant, and each person signing for
---------
them, hereby warrants and represents to the other that the individual signing on
behalf of that party is fully authorized to sign on behalf of, and to bind, such
party and that, when signed by the parties, this Amendment shall be fully
binding on the party on whose behalf this Amendment is executed by such
individual.
30. Exhibits. The parties acknowledge and agree that each of the Exhibits
--------
attached to this Agreement form an integral part of this Agreement and by this
reference are incorporated herein as if set forth in full verbatim.
Exhibit A: Suite 420
Exhibit B: Operating Expense Exclusions
Exhibit C: ASHRAE Standards
Exhibit D: Rules and Regulations and Janitorial
Standards
31. Execution by Facsimile and Counterparts. This Amendment may be executed
---------------------------------------
in one or more counterparts, all of which shall, taken together, constitute one
and the same agreement. The parties intend that delivery of this Amendment may
be effected by facsimile transmission and that a facsimile copy which has been
executed by the transmitting party shall constitute an original.
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32. Notice Addresses. Addresses for notice to Landlord and Tenant under the
----------------
Lease shall be as follows:
Landlord: Massachusetts Mutual Life Insurance Company
c/o Cornerstone Real Estate Advisers, Inc.
10866 Wilshire Boulevard
Suite 800
Los Angeles, CA 90024
Attn: Asset Manager - Denver Financial Center
with a copy to: Transwestern Commercial Services
1775 Sherman Street, Lobby Level
Denver, CO 80203
Tenant: St. Mary Land & Exploration Company
1776 Lincoln Street, Suite 700*
Denver, CO 80203
Attn: Vice President - Administration
with copy to: St. Mary Land & Exploration Company
1776 Lincoln Street, Suite 700
Denver, CO 80203
Attn: General Counsel
*Suite 1100 prior to delivery of 7th Floor to Tenant
33. Entire Agreement. This Amendment, together with the Exhibits attached
----------------
hereto, constitutes the entire agreement of the parties and supersedes all prior
understandings and agreements with respect to the subject matter hereof.
20
34. No Amendments. No change, modification, or addition of this Amendment
-------------
shall be enforceable unless it is in writing and signed by the party against
whom enforcement is sought.
LANDLORD: TENANT:
- -------- ------
MASSACHUSETTS MUTUAL LIFE ST. MARY LAND & EXPLORATION
INSURANCE COMPANY COMPANY, a Delaware corporation
By: CORNERSTONE REAL ESTATE
ADVISERS, INC., its agent By: /s/ MARK A. HELLERTEIN
------------------------------
Name Typed: Mark A. Hellerstien
By: /s/ ROBERT K. GIFFIN Title: President
------------------------------- Date: 12/14/01
Name Typed: Robert K. Giffin ----------------------------
Title: Vice President
Date: 12/17/01
------------------------------
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