LEASE AMENDMENT OF APRIL 1, 2005
EXHIBIT
10.1
LEASE
AMENDMENT OF APRIL 1, 2005
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PROPERTY
NAME:
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The
Lotus Building
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EFFECTIVE
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October
1, 2004
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UNITED
PROFESSIONAL MANAGEMENT, INC. as agent for the owner, called Landlord under
that
certain LEASE AGREEMENT (the "Lease") EFFECTIVE October 1, 2003, between
parties
hereto and AEROGROW INTERNATIONAL INC., hereinafter called Tenant under the
Lease do hereby agree as follows:
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1.
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The
Lease shall continue until April 30,
2006
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2.
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The
monthly rent, payable in advance, for the term shall
be:
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| a. |
$2,534
in cash.
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b.
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6336
shares of stock and issued in advance at the beginning of each
three
months beginning October 1, 2004.
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| c. |
A
to-be-determined sur-charge for the excess utility
usage
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3.
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Tenant
shall have the right to terminate this lease by giving a minimum
of ninety
days written notice and in no event before the last day of the
month. At
the same time of submitting the written notice to terminate, Tenant
will
pay all the shares of stock rent due up to the termination date
and will
pay the cash rent on a monthly
basis.
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4.
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All
other terms and conditions of the Lease shall remain the same except
that
there shall be no further options to
renew.
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TENANT
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LANDLORD
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AeroGrow
International, Inc.
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United
Professional Management, Inc.
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/s/
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, VP
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/s/
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PROPERTY
NAME:
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The
Lotus Building
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EFFECTIVE:
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October
7, 2003
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UNITED
PROFESSIONAL MANAGEMENT, INC. as agent for the owner, called Landlord under
that
certain LEASE AGREEMENT (the "Lease") EFFECTIVE October 1, 2003, between
parties
hereto and AEROGROW INTERNATIONAL INC.; hereinafter called Tenant under the
Lease do hereby agree as follows:
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1.
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ADDITION
OF ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇: Effective March 1, 2004, Tenant shall
include
▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇ to the remaining term of the above described
Lease. Tenant may add portions or all of the Suites prior to March
1, 2003
and will pay a prorated rent beginning on the date the additional
area is
added.
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2.
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RENT:
The monthly rent for such period of extension from March 1, 2004
to and
thru midnight September 30, 2004, shall be $2,556 cash and 2,625
shares of
stock. Rent from October 1, 2003 until March 1, 2004 will be on
prorated
basis for both the cash and stock amount computed upon the amount
of space
used each month.
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3.
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The
Premises as outlined to Section I. Premises shall be amended to
read
Suites 201, 203 and 204, which are delineated on Exhibit B attached
hereto
and incorporated by this reference.
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4.
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SECURITY
DEPOSIT: The security deposit shall be increased by $1,400 to a
total of
$3,400.00
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5.
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All
other terms and conditions of the Lease shall remain the
same.
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TENANT
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LANDLORD
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AeroGrow
International, Inc.
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United
Professional Management, Inc.
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/s/
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, VP
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/s/
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LEASE
AGREEMENT
THIS
LEASE, effective on October 1, 2003, is entered into by and between United
Professional Management, Inc., authorized agent for the owner, hereinafter
called Landlord, and AeroGrow International Inc., a Nevada corporation,
hereinafter called Tenant.
1. Premises.
Landlord
hereby leases to Tenant that portion of The Lotus Building commonly known
as
Suites 201 (referred to herein as the Premises), the location and approximate
dimensions of which are delineated on EXHIBIT A attached hereto and incorporated
by this reference. Such building and improvements are situated upon real
property, which is legally described as follows:
The
South
1/2 of the South 1/2 of the Northeast 1/4 of Section 32, Township 1 North,
Range
70 West of the Sixth P.M., except the East 347 feet thereof and except also
portions excepted in a conveyance of said real estate by CONSUMERS NATIONAL
LIFE
INSURANCE COMPANY; County of Boulder, State of Colorado;
also
known as ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The Premises are leased
together with the nonexclusive use of six (6) unassigned parking spaces in
the
parking lot, which use shall be in common with other tenants of the
building.
2. Term.
2.1 Term.
The
term of this lease shall be one (1) year, beginning on October 1, 2003 and
ending on September 30, 2004, both dates inclusive, unless sooner terminated
as
herein provided.
2.2 Occupancy.
Taking
possession of the Premises or any part thereof by Tenant shall be conclusive
evidence that Tenant accepts the Premises in its present condition. Tenant
may
have use of the Premises prior to October 1, 2003 for the purpose of doing
authorized Tenant improvements. If Tenant operates its business in the Premises
prior to October 1, 2003, Tenant will pay a daily prorated rent to
Landlord.
2.3 Right
of Extension.
Tenant
is granted the right to extend the basic term for one (1) consecutive period
of
THREE (3) years, all upon the same agreements and conditions, except rent,
which
shall be at the basic rate as determined by the provisions outlined in Exhibit
C
provided that (1) Tenant is not in material default at the commencement of
the
extended term, (2) Tenant gives written notice to Landlord of its intention
to
extend the Lease at least ninety (90) days prior to the expiration of the
Lease
Term, (3) In no event shall the Base Rent for any Renewal Period be less
than
the Base Rent for the immediate prior year.
3. Security
Deposit.
3.1 Payment
of Deposit.
Upon
execution of this Lease, Tenant shall pay to Landlord the sum of Two Thousand
Dollars ($2,000.00) as security for Tenant's full and faithful performance
of
all covenants and conditions of this Lease to be kept and performed by Tenant.
Said sum shall be returned to Tenant after the expiration of the term of
this
Lease provided Tenant has fully and faithfully performed all such covenants
and
conditions. Prior to the time when Tenant shall be entitled to the return
of the
security deposit, Landlord shall be entitled to intermingle such deposit
with
its own funds and to use such sum for such purposes as Landlord may determine.
Tenant shall not be entitled to any interest on the security
deposit.
3.2 Default,
by Tenant.
In the
event of default by Tenant in with respect to any provision of this Lease,
including, but not limited to, the payment of rent and additional rent, Landlord
may use, apply or retain all or any part of such security deposit for the
payment of any unpaid rent and additional rent, or for any other amount which
Landlord may be required to spend by reason of the default of Tenant, including
any damages or deficiency in re-leasing of the Premises, regardless of whether
the accrual of such damages or deficiency occurs before or after an eviction
or
a summary re-entry or other re-entry by Landlord. If any portion of the security
deposit is so used or applied, Tenant shall, within five (5) days after notice
from Landlord, deposit cash with Landlord in an amount sufficient to restore
the
security deposit to its original amount, and failure to do so shall constitute
a
default under this Lease.
4. Base
Rent.
The
amount of annual Base Rent due from Tenant during the term of this Lease
shall
be $18,000.00. Tenant shall pay Landlord the Base Rent in twelve equal monthly
installments of $1,500.00 without notice or demand and without any deduction
or
set-off, at ▇▇▇▇ ▇▇▇▇▇ ▇▇., #▇-▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or at such
other place as Landlord may direct in writing. Each monthly rent installment
shall be due and payable, in advance, on or before the first day of each
month
during the term of this Lease.
5. Additional
Rent.
Tenant
agrees to pay as Additional Rent an amount equal to Tenant's Proportionate
Share
of any "Operating Expenses" and "Real Estate Taxes" as said terms are
hereinafter defined. During the first year of this lease, the Additional
Rent
shall be a fixed amount and payable quarterly in advance, by the issuance
of
stock issued by AreoGrow International, Inc. (See Exhibit B)
5.1 Operating
Expenses.
"Operating Expenses" for the purposes of this paragraph 5, shall mean all
reasonable and necessary costs and expenses of every kind and nature, other
than
those expressly excluded below, paid or incurred by Landlord in operating,
managing, repairing, maintaining and administering the Building including,
without limitation or duplication:
(a) The
costs
of general repairs, maintenance and replacements, excluding capital
expenditures, made from time to time by Landlord to the Building, including
costs under mechanical or other maintenance contracts and repairs and
replacements of equipment used in connection with such maintenance and repair
work.
(b) The
cost
of pest control, security, cleaning and snow and ice removal
services.
(c) The
cost
of maintaining, repairing, redecorating, renovating, replacement of floor
coverings, and landscaping the common facilities used by the public and other
tenants, such as elevator, hallways, stairways, etc. not for the exclusive
use
of a single tenant, hereafter referred to as "Common Facilities," and of
maintaining and operating any fire detection, fire prevention, lighting and
communications systems.
(d) The
cost
of all utilities (including, without limitation, water, sewer, gas and
electricity) used or consumed.
(e) The
cost
of providing heating, ventilating and cooling to the interior portions of
the
Building, if any.
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(f) Remuneration
and fees of persons and companies to the extent engaged in repairing,
maintaining, or administering the Building.
(g) The
cost
of professional property management fees.
(h) Costs
incurred by Landlord or its agents in engaging accountants or other consultants
to assist in making the computations required hereunder.
(i) The
cost
of capital improvements and structural repairs and replacements made in,
on, or
to the Building that are (i) made in order to conform to changes subsequent
to
the Commencement Date in any applicable laws, ordinances, rules, regulations
or
orders of any governmental or quasi-governmental authority having jurisdiction
over the Building, or (ii) designed primarily to reduce Operating Expenses
or
the rate of increase in Operating Expenses, or (iii) the replacement of the
roof, heating, ventilating and air conditioning equipment; such costs shall
be
charged by Landlord to Operating Expense in equal annual installments over
the
useful life of such capital improvement or structural repair or replacement
(as
reasonably determined by Landlord) together with interest on the balance
of the
un-reimbursed costs at two percent (2%) above the average Prime Rate charged
by
three major banks in Boulder on the date the cost was incurred by
Landlord.
(j) Other
costs and expenses, including supplies, not otherwise expressly excluded
hereunder attributable to the operation, management, repair, maintenance
and
administration of the Building.
5.2 Excluded
Expenses.
Operating Expenses shall not, however, include the following:
(a) Any
charge for depreciation of the Building or equipment and any principal, interest
or other finance charge.
(b) The
cost
of any work, including painting, decorating and work in the nature of tenant
finish, which Landlord performs in any rentable premises other than work
of a
kind and scope which Landlord would be obligated to perform in the demised
premises.
(c) The
cost
of repairs, replacements or other work occasioned by insured casualty or
defects
in construction or equipment to the extent such cost is reimbursed to Landlord
(or not charged to Landlord) by reason of collected insurance proceeds (using
Landlord's good faith efforts to collect such proceeds) or any contractors',
manufacturers', or suppliers' warranties.
(d) Expenditures
required to be capitalized for federal income tax purposes (except as provided
in Section 5.1(i)).
(e) Leasing
commissions, advertising expenses and other costs incurred in leasing space
in
the Building except as otherwise expressly provided in this Lease.
(f) The
cost
of repairing or rebuilding necessitated by condemnation.
(g) The
cost
of any damage to the Building or any settlement, payment or judgment incurred
by
Landlord, resulting from Landlord's tortious act, neglect or breach of this
Lease that is not covered by insurance proceeds.
5.3 Real
Estate Taxes.
"Real
Estate Taxes" shall mean all real estate taxes, assessments, and other
governmental impositions and charges of every kind and nature whatsoever,
extraordinary as well as ordinary, foreseen and unforeseen, and each and
every
installment thereof, which shall or may during the Lease term be levied,
assessed, imposed, become due and payable or liens upon, or which arise in
connection with the use, occupancy or possession of, or become due and payable
out of, or for the Building or any part thereof. If at any time during the
term
of this Lease the method of taxation of real estate prevailing at the time
of
execution hereof shall be or has been altered so as to cause the whole or
any
part of the taxes now or hereafter levied, assessed or imposed on real estate
to
be levied, assessed or imposed upon Landlord wholly or partially as a capital
levy or measured by the rents received therefrom then such new or altered
taxes
attributable to the Premises shall be deemed to be included within the term
"Real Estate Taxes" for the purposes of this subparagraph, except that such
shall not be deemed to include any enhancement of said tax attributable to
another income or other ownerships of Landlord. Tenant shall in no event
be
responsible for, or reimburse Landlord for any general income tax liabilities
incurred by Landlord.
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5.4 Payment
of Additional Rent.
(a) It
is
hereby agreed that Tenant shall pay to Landlord as Additional Rent during
each
calendar year during the term hereof an estimate of "Tenant's Proportionate
Share of Operating Expenses and Real Estate Taxes" for the calendar year
as
reasonably estimated by Landlord, payable monthly, at the rate of one-twelfth
(1/12) thereof, on the same date and at the same place that base rent as
described in Section 1 is or would otherwise be payable, with an adjustment
to
be made between the parties at a later date as hereinafter provided. Tenant
shall deliver to Tenant, as soon as practicable following the end of any
calendar year, but in no event later than June 30th, an estimate of the
Operating Expenses and Real Estate Taxes for the new calendar year (the "Budget
Sheet"). Until receipt of the Budget Sheet, Tenant shall continue to pay
its
monthly Tenant's Proportionate Share of Operating Expenses and Real Estate
Taxes
based upon the estimate for the preceding calendar year. To the extent that
the
Budget Sheet reflects an estimate of Tenant's Proportionate Share of Operating
Expenses and Real Estate Taxes for the new calendar year greater than the
amount
actually paid to the date of receipt of the Budget Sheet for the new calendar
year, Tenant shall pay such amount to Landlord within thirty (30) days of
receipt of the Budget Sheet. Upon receipt of the Budget Sheet, Tenant shall
thereafter pay the amount of its monthly Tenant's Proportionate Share of
Operating Expenses and Real Estate Taxes. Notwithstanding the foregoing,
Landlord's failure to deliver the Budget Sheet to Tenant on or before June
30th,
shall in no way serve as a waiver of Landlord's right under this Section.
As
soon as practicable following the end of any calendar year, but not later
than
June 30th, Landlord shall submit to Tenant a statement in reasonable detail
describing the computations of the Operating Expenses and Real Estate Taxes,
setting forth the exact amount of Tenant's Proportionate Share of Operating
Expenses and Real Estate Taxes for the calendar year just completed (the
"Statement"), and the difference, if any, between the actual Tenant's
Proportionate Share of Operating Expenses and Real Estate Taxes for the calendar
year just completed and the estimated amount of Tenant's Proportionate Share
of
Operating Expenses and Real Estate Taxes paid by Tenant to Landlord.
Notwithstanding the foregoing, Landlord's failure to deliver the Statement
to
Tenant on or before June 30th, shall in no way serve as a waiver of Landlord's
right under this Section. To the extent that the actual Tenant's Proportionate
Share of Operating Expenses and Real Estate Taxes for the period covered
by the
Statement is higher than the estimated Tenant's Proportionate Share of Operating
Expenses and Real Estate Taxes which Tenant previously paid during the calendar
year just completed, Tenant shall also pay to Landlord such balance within
thirty (30) days following receipt of the Statement from Landlord. To the
extent
that the actual Tenant's Proportionate Share of Operating Expenses and Real
Estate Taxes for the period covered by the Statement is less than the estimated
Tenant's Proportionate Share of Operating Expenses and Real Estate Taxes
which
Tenant previously paid during the calendar year just completed, Landlord
shall
credit the excess against any sums then owing or next becoming due from Tenant
to Landlord under the Lease.
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(b) If
the
Lease term hereunder covers a period of less than a full calendar year during
the first or last calendar years of the term hereof, Tenant's Proportionate
Share of Operating Expenses and Real Estate Taxes for such partial year shall
be
calculated proportionately to reflect the number of months in such year during
which Tenant leased the Premises.
(c) Even
though the term has expired, when the final determination is made of Tenant's
share of Operating Expenses for the year in which this Lease terminates,
Tenant
shall immediately pay any increase due over the estimated expenses paid and,
conversely, any overpayment made in the even said expenses decreased shall
be
immediately rebated by Landlord to Tenant.
6. Late
Charge.
If
Landlord does not receive any monthly rent installment within five (5) days
after the day upon which the installment is due, Tenant agrees to pay a late
charge of one percent (1%) of the monthly rent installment per day, commencing
with the due date, not to exceed ten percent (10%) of the monthly rental
installment; provided; however, that if the fifth day of the month falls
on a
Saturday, Sunday or legal holiday, the late charge shall not be due if the
rent
is received by Landlord on the next business day following the fifth day
of the
month.
7. Use
of Premises.
7.1 Permitted
Use.
Tenant
shall use and occupy the Premises solely as office space and related uses
and
for no other purpose whatsoever without Landlord's prior written
consent.
7.2 Prohibited
Use.
Tenant
shall not use or permit the use of the Premises in a manner (nor do or permit
to
be done in the Premises anything) which will in any way increase the existing
premium for, or otherwise affect any insurance upon the Premises; or which
will
cause or be likely to cause structural damage to any part of the building;
or
which will constitute a public or private nuisance; or which violates any
laws
or regulations of any governmental authority. Tenant shall not commit or
allow
to be committed any waste in or upon the Premises.
8. Signs.
Landlord
shall provide, at Landlord's expense, a building directory, which shall include
a listing of the business name and suite number of each tenant within the
building, including Tenant. The design and location of such directory shall
be
determined in Landlord's sole discretion. Tenant, at Tenant's expense, may
affix
and maintain upon or within twelve (12) inches of the door to the Premises
such
sign, name or insignia as have obtained written approval of Landlord as to
location, type, size, color and display qualities. Landlord may require that
all
signs affixed or maintained by Tenant conform to standard sign
criteria.
9. General
Covenants of Tenant.
9.1 Compliance
with Regulations.
Tenant
shall promptly comply with all laws, orders, and regulations of federal,
state,
county and municipal authorities, and with any direction of any public officer,
pursuant to law, which shall impose any duty upon Landlord or Tenant with
respect to the leased premises including fire and safety regulations; provided,
however, that Tenant shall not be required to expend more than $2,500.00
during
the term of this Lease in complying with the requirements of this subparagraph.
In the event that such public authority requires repair or improvement to
the
building which requires expenditure of more than $50,000.00, Landlord shall
have
the option, in lieu of making the repairs or improvements, to terminate this
Lease by giving Tenant notice of such intention. Following such notice, the
Lease shall terminate upon the last day occupancy is permitted by the public
authority issuing the order requiring the repairs or improvements.
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9.2 Licenses
and Permits.
After
commencement of this lease, Tenant, at its sole expense, shall obtain all
licenses or permits which may be required for the conduct of its business
with
the terms of this Lease, or for the making of repairs, alterations, improvements
or additions, and Landlord, where necessary will cooperate with Tenant in
applying for all such permits or licenses, but Landlord shall incur no costs
or
expenses therefore.
9.3 Environmental
Regulations.
Tenant
will not cause, or permit to be caused, any act or practice, by negligence,
omission or otherwise, that would adversely affect the environment or do
anything or permit anything to be done that would violate any federal, state
or
local laws, regulations or guidelines concerning the impact on the environment
of the conduct of Tenant's business. Any violation of this covenant shall
constitute a default under this Lease.
(a) If
Tenant
shall become aware of or receive notice or other communication concerning
any
actual, alleged, suspected or threatened violation of any environmental law,
regulation, or ordinance, or liability of Tenant for environmental damages
in
connection with the Premises or past or present activities of any person
thereon, including but not limited to notice or other communication concerning
any actual or threatened investigation, inquiry, lawsuit, claim, citation,
directive, summons, proceeding, complaint, notice, order, writ, or injunction
relating to same, then Tenant shall deliver to Landlord, within ten (10)
days of
the receipt of such notice or communication, by Tenant, a written description
of
said violation, liability, or actual or threatened event or condition, together
with copies of any documents evidencing same. Receipt of such notice shall
not
be deemed to create any obligation on the part of Landlord to defend or
otherwise respond to any such notification.
(b) Notwithstanding
the obligation of Tenant to indemnify Landlord pursuant to this Lease Agreement,
Tenant shall, upon demand of Landlord, and at its sole cost and expense,
promptly take all actions to remediate any environmental damages caused by
Tenant. Tenant shall proceed continuously and diligently with such remediation,
provided that in all cases such actions shall be in accordance with all
applicable requirements of governmental entities. Any such actions shall
be
performed in a good, safe and workmanlike manner and shall minimize any impact
on the businesses conducted at the property of which the Premises are a part.
Should Tenant fail to perform or observe any of its obligations or agreements
pertaining to remediation of environmental damage, then Landlord shall have
the
right, but not the duty, without limitation upon any of the rights of Landlord
pursuant to this Lease Agreement, to perform the same, either personally
or
through its agents, consultants or contractors.
(c) Tenant
shall indemnify and hold Landlord its principals, agents or employees harmless
from any and all claims, including all costs, expenses and attorney's fees,
by
or on behalf of any person, entity or governmental agency arising from any
breach or default on the part of Tenant in the performance of the covenant
contained in this paragraph 3. In case any action or proceeding is brought
against Landlord its principals, agents or employees by reason of any such
claim, Tenant, upon written notice from Landlord, covenants to resist or
defend,
at Tenant's expense, such action or proceeding by counsel reasonably
satisfactory to Landlord.
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(d) If
Landlord pays any amount for remediation of substances introduced onto the
Premises the building of which the Premises are a part, or their surrounding
environs by Tenant in violation of the covenant contained in this section,
including detection, removal or confinement of such substances, then the
sum so
paid, together with all costs and attorney's fees, shall be paid by Tenant
to
Landlord as additional rent within thirty (30) days of written notice to
Tenant
of such expenditures.
9.4 Indemnity.
(a) Tenant
shall indemnify and hold Landlord harmless against and from any and all claims
arising from Tenant's use of the Premises or from the conduct of its business
or
from any activity, work or other things done, permitted or suffered by Tenant
in
or about the Premises, and shall further indemnify and hold Landlord harmless
against and from any and all claims arising from any breach or default in
the
performance of any obligation on Tenant's part to be performed under the
terms
of this Lease, or arising from any act or negligence of Tenant, or any officer,
agent, employee, guest or invitee of Tenant, and from all costs, attorneys'
fees, and liabilities incurred in or about the defense of any such claim
or any
action or proceeding brought thereon, and in case any action or proceeding
be
brought against Landlord by reason of such claim, Tenant upon notice from
Landlord shall defend the same at Tenant's expense by counsel reasonably
satisfactory to Landlord. Tenant, as a material part of the consideration
to
Landlord, hereby assumes all risk of damage to property or injury to persons
upon the Premises, from any cause other than the negligence of Landlord,
its
agents, servants or employees, and Tenant hereby waives all claims in respect
thereof against Landlord. Tenant shall give prompt notice to Landlord in
case of
casualty or accidents in the Premises.
(b) Landlord
or its agents shall not be liable for any loss or damage to persons or property
resulting from fire, explosion, steam, gas, electricity, water or rain which
may
leak from any part of the building or from the pipes, appliances or plumbing
therein or from the roof, street or subsurface or from any other place resulting
from dampness or any other cause whatsoever, unless caused by or due to the
negligence of Landlord, its agents, servants or employees.
9.5 Damage
to Premises.
Tenant
shall not damage nor permit any damage to any portion of the Premises, and
at
the termination of this Lease, Tenant shall deliver the Premises to Landlord
in
as good condition as existed at the commencement date of this Lease, ordinary
wear and tear and damage by casualty that is covered by Landlord's insurance
excepted. The cost and expense of any repairs necessary to restore the condition
of the Premises shall be borne by Tenant, and if Landlord undertakes to restore
the Premises it shall have a right of reimbursement against Tenant.
9.6 Liens
and Encumbrances.
Tenant
shall pay before delinquency all costs for work done or caused to be done
by
Tenant in the Premises which could result in any lien or encumbrance on
Landlord's interest in the Premises or any part thereof. If any such lien
or
encumbrance is filed against the Premises or the Property and Tenant shall
fail
to cause such lien to be discharged of record within thirty (30) days after
Tenant receives written notice of its filing, whether by payment or posting
of a
statutory surety bond with the appropriate court, Landlord may, at its option,
pay such charge and related costs and interest, and the amount paid, together
with reasonable attorney's fees incurred by Landlord, shall be immediately
due
from Tenant to Landlord.
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9.7 Alterations
and Improvements.
Tenant
shall not make any alterations or improvements to the Premises without
Landlord's prior written approval which approval shall not be unreasonably
withheld. Any alterations or improvements to the Premises made by Tenant
shall
be at Tenant's expense and, with the exception of trade fixtures installed
by
Tenant, shall become the property of Landlord and shall be surrendered to
Landlord upon termination of this Lease. Landlord, at its option, may require
Tenant to remove any physical additions and repair any alterations to which
Landlord has not previously consented in accordance with this subparagraph,
in
order to restore the Premises to the condition existing at the time Tenant
took
possession thereof. All costs of such removal and repair shall be borne by
Tenant.
9.8 Janitorial
Service.
Tenant
shall provide, at Tenant's sole expense, janitorial or cleaning service for
the
Premise which shall clean the Premises in a manner satisfactory to
Landlord.
9.9 Non-Smoking
Environment.
Tenant
shall maintain a smoke free environment within the Premises and all common
areas
of the building and shall not smoke or permit smoking of cigarettes, pipes,
cigars or other tobacco products within the Premises or the common areas
of the
building.
10. Landlord's
Covenants.
10.1 Services
Provided.
So long
as Tenant is not in default under any of the covenants of this Lease to be
performed by Tenant, Landlord shall provide the following services:
(a) Heat
for
the Premises when and as reasonably required for comfortable occupancy of
the
Premises, and air conditioning for the Premises when and as reasonably required
for comfortable occupancy of the Premises, on business days from 8:00 a.m.
to
6:00 p.m. (if Tenant requires air conditioning for more extended hours or
on
Saturdays, Sundays or on holidays, Landlord will furnish the same at Tenant's
expense);
(c) Water
and
sewer service for ordinary lavatory and toilet purposes;
(d) Janitorial
service and maintenance of the common areas, parking areas and landscaping,
which shall include window cleaning, inside and outside, twice in each lease
year,
(e) Electricity
sufficient for Tenant's permitted uses of the Premises;
10.2 Service
Interruption.
Landlord shall not be liable for the interruption of heating, plumbing, air
conditioning, electrical systems, or cleaning or other services, if any,
by
causes beyond Landlord's control or when necessary by reason of accident
or for
repairs, alterations, replacements, or improvements necessary or desirable
in
the judgment of Landlord for as long as maybe reasonably required by reason
thereof. No such interruption of service shall be deemed a default by Landlord
nor shall it be deemed an eviction or disturbance of Tenant's use or quiet
enjoyment of the Premises.
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10.3 Repairs.
Landlord shall repair and maintain the structural portions of the building
in
which the Premises are located, including exterior walls and roof. Landlord
shall not be liable for failure to make such repairs or to perform any
maintenance unless such failure shall persist for an unreasonable time after
written notice of the need for such repairs or maintenance is given to Landlord
by Tenant.
10.4 Non-Smoking
Environment.
Landlord shall include subparagraph 9.9 in all leases for the Lotus Building,
and shall make every reasonable effort to enforce such provision as to all
tenants.
11. Personal
Property.
11.1 Abandonment
by Tenant.
Any
property of Tenant remaining in the Premises at any time when Landlord recovers
possession of the Premises shall be deemed abandoned, and Landlord shall
have no
responsibility or liability whatsoever for any of said personal property.
Without modifying the foregoing, Landlord may store any of such property
in any
public or private warehouse, and Tenant shall pay to Landlord promptly upon
demand all costs incurred in connection with such property, including the
costs
of moving and storage, court costs, and attorneys' fees. Landlord may, at
its
option, without notice, sell any such personal property at any public or
private
sale for such prices as Landlord may obtain, and Landlord shall apply the
proceeds of such sale first to the costs incurred in the connection with
such
property, and then to any amounts due under this Lease from Tenant to Landlord,
and the surplus, if any, to Tenant.
11.2 Landlord's
Lien.
Tenant
hereby grants to Landlord a lien upon and a security interest in all property
now owned or hereafter acquired by Tenant which shall come in or be placed
upon
the Premises, to secure the payment of rent and the performance of each and
every other obligation hereunder to be performed by Tenant. Following any
event
of default, Landlord, without notice or demand, may take possession of and
sell
such property at public and private sale upon giving Tenant ten (10) days'
notice. The proceeds of any such sale shall be applied first to the payment
of
expenses thereof, second to the discharge of the unpaid rent or other liability
hereunder, and the balance, if any, shall be paid to Tenant. Tenant agrees
to
execute and record any financing statements and other documents necessary
to
perfect or record the lien herein granted. Failure to obtain execution or
to
record financing statements by the Landlord shall have no effect upon the
granted herein.
11.3 Personal
Property Tax.
Tenant
shall pay, or cause to be paid, before delinquency any and all taxes levied
or
assessed and which become payable during the term hereof upon all Tenant's
leasehold improvements, equipment, furniture, fixtures, and any other property
located in the Premises. In the event any or all of Tenant's leasehold
improvements, equipment, fixtures, furniture and other personal property
shall
be assessed and taxed with the real property, Tenant shall pay to Landlord
its
share of such taxes within ten (10) days after delivery to Tenant by Landlord
of
a statement in writing setting forth the amount of such taxes applicable
to
Tenant's property.
12. Entry
Upon Premises By Landlord.
After
giving reasonable notice to Tenant, which need not be in writing, Landlord
and
its representatives may enter the Premises at any reasonable time, for the
purpose of inspecting the Premises, performing any work which Landlord may
reasonably elect to undertake or which is made necessary by reason of Tenant's
default under the terms of this Lease, or exhibiting the Premises for sale,
lease or mortgage financing, or any other reasonable purpose. Tenant hereby
waives any claim for damages or for any injury or inconvenience to or
interference with Tenant's business, loss of occupancy or quiet enjoyment
of the
Premises, or any other loss occasioned thereby. For each of the aforesaid
purposes, Landlord shall at all times have and retain a key with which to
unlock
all of the doors in, upon and about the Premises.
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13. Damage
to
Premises.
In the
event that without negligence or willful misconduct of Tenant or its employees,
agents, or licensees, the Premises are damaged by fire or other casualty
to such
extent that the Premises are rendered substantially inaccessible or unusable
for
office purposes then either Landlord or Tenant shall have the option to
terminate this Lease, provided that the party wishing to terminate this Lease
must give written notice of termination to the other party within thirty
(30)
days after the date upon which such damage occurs or the option to terminate
shall be void. In the event that either party exercises the option to terminate,
this Lease shall be deemed to terminate on the third day after the giving
of
said notice, and Tenant shall surrender possession within ten (10) days
thereafter. In the event neither party exercises the aforesaid option to
terminate this Lease, Landlord, at its expense, shall repair the damage with
reasonable dispatch, restoring the Premises as nearly as possible to its
condition prior to such damage and all Base Rent and Additional Rent payable
hereunder shall ▇▇▇▇▇ from the date the damage occurred until such time as
the
Premises have been entirely repaired and restored. Any disbursement of insurance
proceeds by a holder of a deed of trust shall be deemed to have been made
by
Landlord. In determining what constitutes reasonable dispatch, consideration
shall be given to delays caused by strikes, adjustment of insurance, and
other
causes beyond Landlord's control. Notwithstanding the foregoing provision,
in
the event the Premises are damaged by fire or other insured casualty due
to the
negligence or willful misconduct of Tenant, or the employees, agents or
licensees of Tenant then without prejudice to any other rights and remedies
of
Landlord or its insurer, the damage shall be repaired as provided above.
Tenant,
however, shall not be relieved of any liability for any damage to the Premises
caused by any negligence or willful misconduct of Tenant or its employees,
agents or licensees.
14. Liability
Insurance.
At all
times Tenant shall, at Tenant's expense, keep in full force and effect a
policy
of comprehensive public liability insurance, with a company acceptable to
Landlord, insuring Landlord and Tenant against any liability arising out
of the
ownership, use, occupancy or maintenance of the Premises and all areas
appurtenant thereto. Such insurance shall be in an amount not less than
$1,000,000.00 for injury or death of one person in any one accident or
occurrence, and in an amount not less than $1,000,000.00 for injury or death
of
more than one person in any one accident or occurrence. Such insurance shall
further insure Landlord and Tenant against liability for property damage
in an
amount not less than $500,000.00. The limit of any such insurance shall not,
however, limit the liability of Tenant under this Lease. Tenant shall deliver
to
Landlord copies of the policies of insurance required herein or certificates
evidencing the existence and amounts of such insurance with loss payable
clauses
satisfactory to Landlord.
15. Quiet
Enjoyment.
Tenant,
upon payment of the required rents and performing the terms, conditions,
covenants and agreements contained in this Lease, shall peaceably and quietly
hold and enjoy the Premises during the full term of this Lease. Landlord
shall
reasonably endeavor to insure Tenant's quiet enjoyment, but Landlord shall
not
be responsible for the acts or omissions of any third party that may interfere
with Tenant's use and enjoyment of the Premises, so long as such acts or
omissions of such third party are beyond Landlord's control.
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16. Assignment
and Subletting.
16.4 Assignment
by Landlord.
Landlord and owner shall have the right to transfer and assign, in whole
or in
part., right, title and interest in the Premises and its rights and obligations
in and under this Lease. Landlord and owner shall be released from all
obligations from the date of transfer, except for obligations as related
to the
period of time from the commencement date to the date of transfer and provided
that Landlord or owner shall transfer Tenant's security deposit to its
transferee and that such transferee agrees in writing to assume Landlord's
or
owner's obligation to hold such security deposit consistent with the terms
of
this Lease.
16.5 Assignment
by Tenant.
Tenant
shall not assign this Lease or any interest therein, or sublet all or any
part
of the Premises without the prior written consent of Landlord, which consent
shall not be unreasonably withheld; provided, however, that as a condition
of
giving such consent:
(a) Landlord
shall have the right to make reasonable inquiry into the financial qualification
of any proposed subtenant or assignee to operate a business enterprise upon
the
Premises, and to perform a lease agreement therefor, and Landlord's obligation
to permit assignment of this Lease or a sublease is contingent upon Landlord's
approval of the proposed subtenant's or assignee's financial qualification.
"Reasonable inquiry" may include, without limitation, requiring any prospective
subtenant or assignee to supply to Landlord current and complete financial
statements and credit reports.
(b) Upon
Tenant's application for Landlord's consent to assignment or sublease, Landlord
shall have the option to charge Tenant an administrative charge, not to exceed
$500.00, to reimburse Landlord for its costs in reviewing Tenant's application
for such assignment or sublease and making any inquiry related thereto. In
addition, and as a condition of Landlord's approval, Tenant shall reimburse
Landlord for any attorney fees incurred by Landlord in review or negotiation
of
any assignment or sublease.
(c) If
Tenant
is a corporation or a partnership, an assignment, as that term is used herein,
includes one or more sales or transfers by which an aggregate of more than
50%
of Tenant's shares or partnership interests shall be vested in a party or
parties who are not shareholders or partners as of the date of this Lease.
For
purposes of this paragraph, share and partnership interest ownership shall
be
determined in accordance with the principles set forth in Section 544 of
the
Internal Revenue Code.
(d) Without
modifying the foregoing provisions of subparagraph 16.2, Landlord will permit
the assignment of this lease to an entity owned or controlled by the individuals
identified as Tenant in the preamble of this Lease, provided that Tenant
makes
written application for consent to such assignment accompanied by documentation
sufficient for Landlord to determine that such entity legally exists and
is
owned or controlled by said individuals.
16.6 Continuing
Liability.
Notwithstanding any sublease or assignment of this Lease, Tenant shall remain
liable under all of the provisions and conditions of this Lease for the
remaining term of the Lease.
17. Default
by Tenant.
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17.7 Events
of Default.
The
following shall be deemed to be events of default by Tenant under this
Lease:
(a) Failure
by Tenant to pay when due any installment of Base Rent, Additional Rent,
or any
other sum payable by Tenant under this Lease.
(b) Abandonment
by Tenant of the Premises for a period of thirty (30) consecutive days except
following damage to, or destruction of the Premises;
(c) Failure
by Tenant to comply with any term, provision or covenant of this Lease, other
than the payment of rent, and the failure is not cured within ten (10) days
after written notice to Tenant; provided, however, that if such default shall
be
of such a nature that the same cannot be cured or remedied within such ten
(10)
day period, then Tenant shall not be deemed to be in default hereunder if
within
such ten (10) day period Tenant shall commence to cure such default and shall
thereafter diligently and in good faith proceed to cure such
default.
17.8 Remedies
for Tenant's Default.
Upon
the occurrence of any event of default, Landlord shall have the
option:
(a) To
terminate this Lease; or
(b) Terminate
Tenant's right to possession of the Premises and re-enter or repossess the
Premises, either by legal proceeding, surrender or otherwise, and dispossess
and
remove therefrom Tenant or other occupants thereof and their effects without
being liable to any prosecution or civil damages. Landlord shall use its
best
efforts to rerent the Premises at such rental and upon such other terms and
conditions as Landlord may deem advisable in its reasonable discretion. However,
Tenant shall remain liable under the terms of this Lease, and Tenant's
obligations including the obligation to pay rent shall continue for the full
term of this Lease, provided, however, that Tenant shall receive appropriate
credit for amounts received by Landlord as a result of any
rerenting.
17.9 Waiver
of Default or Remedy.
Failure
of Landlord to declare an event of default immediately upon its occurrence,
or
delay in taking any action in connection with an event of default, shall
not
constitute a waiver of the default, but Landlord shall have the right to
declare
the default at any time and take such action as is lawful or authorized under
this Lease. Failure by Landlord to enforce the remedy provided upon an event
of
default shall not be deemed or construed to constitute a waiver of the default
or of any other violation or breach of any of the terms, provisions and
covenants contained in this Lease.
18. Force
Majeure.
In the
event Landlord or Tenant shall be delayed or hindered in or prevented from
performing any of the agreements, provisions or covenants required hereunder
by
restrictive governmental laws or regulations, riots, insurrection, war or
other
reason of a like nature not the fault of Landlord or Tenant, in performing
work
or doing acts required under the terms of this Lease, then performance of
such
act shall be extended for a period equivalent to the period of such
delay.
19. Holding
Over.
In the
event of holding over by Tenant after the expiration or termination of this
Lease, the holdover shall be as a month to month tenancy and all of the terms
and provisions of this Lease shall be applicable during that period, except
that
Tenant shall pay Landlord as rental for the period of such hold over an amount
equal to one hundred twenty percent (120%) of the rent and additional rent
which
would have been payable by Tenant had the holdover period been a part of
the
original term of this Lease, including any adjustments made during the lease
term. Tenant agrees to vacate and deliver the Premises to Landlord upon Tenant's
receipt of notice from Landlord to vacate. The rent payable during the holdover
period shall be payable to Landlord on demand. No holding over by Tenant,
whether with or without consent of Landlord, shall operate to extend this
Lease
except as otherwise expressly provided in this Lease. In the event Tenant
fails
to surrender the Premises upon termination or expiration of this Lease, then
Tenant shall indemnify Landlord against loss or liability resulting from
any
delay by Tenant in surrendering the Premises, including, but not limited
to, any
amounts required to be paid to third parties which were to have occupied
the
Premises and any reasonable attorney's fees related thereto.
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20. Condemnation.
20.10 Taking
of Premises.
If,
during the term of this Lease, all or a substantial part of the Premises
are
condemned or taken for any public or quasi-public use by any public authority,
under any law, ordinance or regulation, by right of eminent domain or purchase
in lieu thereof, then this Lease shall terminate upon the date when possession
is taken by such public authority.
20.11 Partial
Taking.
In the
event a portion of the Premises or the portion of the parking area currently
paved, adjacent to the Building and located on the Property, shall be taken
for
any public or quasi-public use by any public authority, under any law, ordinance
or regulation, or by right of eminent domain or by purchase in lieu thereof,
this Lease shall be voidable in the discretion of either party provided that
the
party wishing to terminate the Lease must give written notice of termination
within thirty (30) days after Tenant is given notice of Landlord's consent
to
the taking or the entry of an order for the taking by a court of competent
jurisdiction. The Lease shall terminate upon the date when possession of
the
Premises is taken by the public authority.
20.12 Condemnation
Proceeds.
All
compensation awarded or paid upon such a total or partial taking of the Premises
by condemnation shall belong to and be the property of Landlord; provided,
however, that nothing contained herein shall be construed to preclude Tenant
from prosecuting any claim directly against the condemning authority in such
condemnation proceeding for loss of the leasehold, business, or depreciation
to,
damage to, or cost of removal of, or for the value of stock, trade fixtures,
equipment, furniture, and other personal property belonging to Tenant. Landlord
and Tenant hereby agree to cooperate in the joint prosecution of their claims
against the condemning authority.
21. Miscellaneous
Provisions.
21.13 Applicable
Law and Construction.
This
Lease and the rights, duties and obligations hereunder shall be controlled
by
the laws of the State of Colorado. The singular shall include the plural
and the
plural shall include the singular as appropriate. Any reference to gender
shall
include all genders as appropriate. The titles and headnotes of paragraphs
and
subparagraphs of this Lease are for reference only, are not intended as an
interpretation, and shall not affect or change the context or meaning of
this
Lease.
21.14 Parties
Bound.
All
covenants and agreements contained in this Lease shall extend to, be binding
upon and inure to the benefit of the parties to this Lease and their respective
heirs, personal representatives, successors, legal representatives and
assigns.
21.15 Severability.
The
invalidity or unenforceability of any provision of this Lease shall not affect
or impair the validity or enforceability of any other provision in this
Lease.
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21.16 Notices.
Whenever any notice is required or permitted hereunder, such notice shall
be in
writing unless otherwise specifically provided. Except as required or permitted
under applicable law, any notice or document required to be delivered hereunder
shall be deemed to be given and delivered four (4) days after it is deposited
in
the United States Mail, certified mail, Return Receipt Requested, addressed
to
the Landlord at the address set forth at subparagraph 5.1(i) and to Tenant
at
the Premises, or at such other addresses as either party has specified by
written notice delivered in accordance herewith.
21.17 Attorney
Fees.
In the
event either party initiates legal action due to the other party's breach
of any
covenant, condition or agreement contained in this Lease, the prevailing
party
in such legal action shall be entitled to recover from the losing party all
of
the prevailing party's reasonable costs, expenses and attorney fees incurred
in
relation to such legal action.
21.18 Entire
Agreement.
This
Lease contains the entire agreement of the parties, and there are no
representations, warranties, agreements, promises or understandings, either
oral
or written, between them, except such as are expressly set forth in this
Lease.
Tenant represents and agrees that it has not relied upon any statements,
representations, warranties, agreements or promises made by Landlord, or
anyone
acting or claiming to be acting on Landlord's behalf, with respect to this
Lease
or the Premises, including, without limitation, its size or physical
condition.
21.19 Modification.
This
Lease may not be altered, waived, amended or extended except by an instrument
in
writing signed by the party or parties to be bound thereby.
21.8 Bathroom
Access.
Notwithstanding any other provision of this Lease to the contrary, Tenant
agrees
to permit use of the bathroom facility within the Premises on the date of
this
Lease which has been modified to provide access to persons with disabilities
by
all persons using the building on business days from 9:00 a.m. to 5:00 p.m.
including other tenants and their employees, customers, clients and
patrons.
WHEREFORE,
the parties execute this Lease effective on the date set forth in the preamble
on page 1 of this Lease.
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Landlord:
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Tenant:
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United
Professional Management, Inc.
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AeroGrow
International Inc.
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/s/
▇▇▇▇▇ ▇▇▇▇
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/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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By:
▇▇▇▇▇ ▇▇▇▇, President
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By:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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