EXHIBIT 10.16
OFFICE LEASE
FOR HORIZON BUILDING
Monarch Park
Boulder, Colorado
THIS LEASE (this "Lease"), dated October 10, 1996, is between MUM II, LLC
("Landlord") and Horizon Organic Dairy, Inc. ("Tenant").
For and in consideration of the covenants and agreements herein contained,
Landlord and Tenant hereby agree as follows:
SECTION I: ADDITIONAL DEFINED TERMS
In addition to those terms defined in the introductory paragraph of this
Lease, the following terms shall have the following meanings when used in this
Lease:
(a) Architect's Measurement: Any measurement of area made by
Landlord's architect measuring Usable Area or Rentable Area for all of the space
to be measured based on the Building floor plans, which measurement shall be
conclusive and binding upon both Landlord and Tenant, unless any tenant of the
Building objects to such measurement within sixty (60) days of notice to Tenant
with the calculation of an Architect's Measurement (or in the event of
structural modification to the Building which results in a change in any area of
any floor, within sixty (60) days of notice to Tenant of the recalculation of an
Architect's Measurement), in which case such measurement shall be presumptively
correct but subject to correction if mistaken. The sole effect that a
correction to an Architect's Measurement shall be the calculation of Tenant's
share of the Operation Cost and in no event shall a mistake in an Architect's
Measurement entitle Tenant to any adjustment in the Base Rent or Escalation
Rent. The Architect's Measurements have been made from the outside of exterior
walls to the middle of a demising wall between tenants and to the Common Area
side of a wall between a Common Area and a tenant's area.
(b) Base Operating Cost: An amount equal to $2.01 per square foot of
Building Rentable Area per calendar year which represents an estimate of the
Operating Cost for the entire calendar year in which the Term of this Lease
begins.
(c) Base Rent: The annual amount of rent payable with respect to each
Lease Year during the term of this Lease Payable as set forth in
Section 4(a). The amount of the Base Rent for the first Lease Year shall be
$95,178.06 total, for Suite A plus Suite D, which consists of, $71,013.43 for
Suite A and $24,164.63 for Suite D. The amount of the Base Rent for all Lease
Years after the first Lease Year shall be calculated in the manner set forth in
Section 4(a).
(d) Building: A portion of that certain parcel of real property
described in Exhibit A attached hereto, together with the building known as
Horizon Building and all other improvements located thereon.
(e) Building Rentable Area: 34,585 square feet which has been
determined by Architect's Measurement. If from time to time there is a
structural modification to the Building which results in a change in the area of
any floor of the Building, Building Rentable Area shall, until any further
change, mean the number of square feet as recomputed after such change by
Architect's Measurement.
(f) Commencement Date: The date of the Term of this Lease commences
as determined in accordance with provisions of Section 30.
(g) Common Areas: Those portions of the Building which are made
available for the general use in common of tenants of the Building and their
employees, agents, and invitees, including but not limited to the areas on
individual floors devoted to corridors, elevators, lobbies, restrooms and other
similar facilities, automobile parking areas which are reserved for "visitors
only", driveways, entrances and exits, including all plaza areas, loading areas,
pedestrian walkways and ramps, landscaped areas and stairways.
(h) Default Rate: An annual rate of interest equal to fifteen (15)
percent.
(i) Lease Year:
(i) For the First Lease Year, the period beginning on the Commencement
Date and ending on the last day of the same calendar month in which the
Commencement Date occurred in the next calendar year; and
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(ii) For Lease Years after the First Lease Year, the twelve-month
period beginning on the next day following the expiration of the preceding Lease
Year. If the Term of this Lease shall end prior to the last day of a Lease Year
as defined above, the final Lease Year hereunder shall be deemed to end on the
day the Term of this Lease ends.
(j) Operating Cost: as defined in Section 6(b).
(k) Ordinary Business Hours: The hours of 7:00 a.m. to 6:00 p.m.
Monday through Friday and 9:00 a.m. to 1:00 p.m. on Saturdays, except for any of
such days which may fall on the holidays of New Year's Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
(l) Premises: Suites A and D on the first and second floor of the
Building, as generally reflected on the floor plan attached to this Lease as
Exhibit B.
(m) Premises Rentable Area: 6,605.9 square feet in finished office
space in Suite A on the first floor and 6,443.9 square feet in unfinished office
space in Suite D on the second floor for a total of 13,049.8 square feet which
has been determined by Architects Measurement. Premises Rentable Area is the
Premises Usable Area plus Tenant's pro rata share (based upon Premises Usable
Area to other tenant's premises usable area) of the Common Areas. If from time
to time there is a structural modification to the Building which affects the
area of any floor of the Building which contains the Premises, Premises Rentable
Area shall, until further change, mean the number of square feet as recomputed
after such change by Architect's Measurement.
(n) Premises Usable Area: 6,115 square feet of finished office space
in Suite A on the first floor and 5,965 square feet of unfinished office space
in Suite D on the second floor which has been determined by Architect's
Measurement. If from time to time there is a structural modification to the
Building which affects the area of any floor to the building which contains the
Premises, Premises Usable Area shall, until further changes, mean the number of
square feet as computed after such change by Architect's Measurement.
(o) Security Deposit: The amount of $47,600.00 (due at time of
execution of this lease) to be kept on deposit with Landlord by Tenant in
accordance with the provisions of Section 28.
(p) Term: The period beginning at noon on the Commencement Date and
ending at noon on the last day of the calendar month in which the tenth (10th)
anniversary of the Commencement Date occurs.
SECTION 2: LEASE OF PREMISES
Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord,
the Premises, together with the non-exclusive right to use the Common Areas for
the purposes for which the Common Areas are intended. The Premises are leased
on the terms and conditions set forth in this Lease.
SECTION 3: TERM
The term of this Lease shall be as set forth in Section l(p), unless sooner
terminated or extended pursuant to the terms of this Lease.
SECTION 4: RENT
(a) Tenant shall pay Landlord during each Lease Year the Base Rent, in
equal monthly installments in the amount of one-twelfth of the Base Rent on the
Commencement Date and on the first day of each succeeding calendar month during
the Term of this Lease; provided that the rent payable on the Commencement Date
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shall be prorated for the remaining days left in the calendar month in which the
Commencement Date occurs. All payments of Base Rent shall be paid in advance,
without notice, set-off or deduction, in lawful money of the United States, at
the address of Landlord set forth in Section 40 of this Lease, or at such other
place as Landlord may from time to time designate in writing. The amount of the
Base Rent for each Lease Year after the first Lease Year shall be increased to
an amount determined by multiplying the amount of the Base Rent in effect for
the preceding Lease Year by an adjustment factor which factor shall be
calculated in the following manner. Such adjustment shall be calculated by
first determining the All Items Consumer Price Index for All Urban Consumers,
CPI-U, Denver (1967 equals 100), as determined by the United States Department
of Labor, Bureau of Labor Statistics as of both the latest date preceding the
date of commencement of the preceding lease year and as of
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the latest date possible in the lease year just preceding the commencement of
the next following lease year. Upon receipt of the second of such index
figures, the percentage of the increase, if any, of the second of such figures
over the first, shall be calculated therefrom (such percentage increases are
herein referred to as the "Index Percentage Change"). An annual rental increase
(herein referred to as Escalation Rent) shall then be computed by multiplying
the Index Percentage Change times the last preceding Base Rent Annual rate as
adjusted and set forth in Section 4. Tenant shall pay one-twelfth (1/12) of the
resulting Escalation Rent each month during the ensuing lease year at the same
time Tenant pays the Base Rent. Such payments shall commence on the first day
of the month following Tenant's receipt of notice setting forth such increase,
which notice shall be sent within sixty (60) days of the beginning of each new
Lease Year. The first monthly rental payment which includes new Escalation Rent
shall also include the Escalation Rent, if any, for each month in the then
current lease year which elapsed prior to Tenant's receipt of Landlord's notice.
If there is no increase in Index Percentage Change, there shall be no
adjustment, but in no event shall the Base Rent and Escalation Rent payable be
less than the Base Rent and Escalation Rent paid during the preceding lease
year. The Base Rent due hereunder shall be apportioned for any fractional
calendar months at the beginning and end of the Term of this Lease and any
renewals and extensions thereof.
(b) If the index specified in Section 4(a) above is discontinued in
its current form, or if the basis on which it was calculated should be revised,
an appropriate conversion of the revised index to a common base will be made
upon conversion factors published by the Bureau of Labor Statistics or upon
conversion factors otherwise made available.
(c) In addition to the Base Rent and the Escalation Rent, Tenant shall
pay Landlord in monthly installments simultaneously with payments of the Base
Rent, one-twelfth (1/12th) the Base Operating Cost times the Premises Rentable
Area and 100% of the Operating Cost adjustment determined as set forth in
Section 6, and such other charges as are required by the terms of this Lease to
be made by Tenant. Any such adjustment or change shall be deemed to be
additional rent and shall be payable in the manner provided for the payment of
Base Rent and shall be recoverable as Base Rent, and Landlord shall have all
rights against Tenant for default in payment thereof as in the case of arrears
of Base Rent.
SECTION 5: USE
(a) Tenant shall use and occupy the Premises for professional or
business offices and storage incidental thereto and for no other purpose.
Tenant shall use the Premises in a careful, safe and Proper manner and shall not
use or Permit the Premises to be used for any purpose prohibited by the
Certificate of Occupancy issued for the Building or the laws of the United
States or the State of Colorado, or the ordinances of the County of Boulder.
Tenant shall neither do nor permit to be done any act or thing upon the Premises
which shall or might subject Landlord to any liability or responsibility for
injury to any person or persons or to property by reason of any business or
operation carried on upon the Premises or for any reason.
(b) In the event that any official shall hereafter at any time contend
or declare by notice, violation, order or in any other manner whatsoever that
the Premises are used for a purpose which is a violation of any permit,
certificate of occupancy, statute, ordinance or other requirement of law
applicable to the Building or the Premises, Tenant shall, upon five days'
written notice from Landlord, immediately discontinue such use of the Premises.
(c) Tenant, at its sole expense, shall comply with all laws, orders
and regulations of federal, state, county and municipal authorities, and with
any direction of any public officer or officers, pursuant to law, which shall
impose any violation, order or duty upon Landlord or Tenant with respect to the
Premises, or the use or occupation thereof.
SECTION 6: OPERATING COST ADJUSMENT
(a) If in any calendar year the Operating Cost is greater than the
Base Operating Cost, Tenant shall pay to Landlord as additional rent an amount
equal to such excess multiplied by the Premises Rentable Area. Any amount
payable by Tenant to Landlord under this Section 6 shall be paid within thirty
(30) days after written notice thereof by Landlord. Landlord may, either prior
to the beginning of or during any calendar year, compute a bona fide estimate of
Operating Cost for such calendar year. Upon receipt of written notice thereof,
Tenant shall pay to Landlord, in monthly installments simultaneously with
payments of Base Rent under Section 4(a), one-twelfth of the product
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of such estimated Operating Cost and the Premises Rentable Area. An annual
adjustment shall be made between the parties within thirty (30) days after
Landlord's determination of Operating Cost. Any amounts of excess estimated
Operating Cost which Landlord is required to return may be offset by accrued
amounts payable by Tenant to Landlord. If the Term of this Lease ends before
the end of a calendar year, any amount payable by Tenant or Landlord in respect
of that year under this Section 6 shall be adjusted proportionately on a daily
basis utilizing the previous year's determination of Operating Costs and the
obligation to pay such amount shall survive the expiration or earlier
termination of this Lease. In no event shall Landlord be required to make any
payment or refund to Tenant if in any calendar year the Operating Cost is less
than the Base Operating Cost.
(b) As used in this Lease, "Operating Cost" means an amount per square
foot of Building Rentable Area per calendar year determined as set forth below
(projected to an annual figure for the calendar year in which the Building is
first occupied), which represents the actual Operating Cost for any calendar
year during the Term of this Lease.
The Operating Cost (calculated to the nearest cent) shall be determined by
Landlord and shall be equal to the sum of the following in respect of a calendar
year divided by the Building Rentable Area:
(i) All general and special real estate taxes, special assessments,
assessments for improvements, special district or improvement district
assessments, water charges, sewer charges, vault charges and other ad valorem
taxes, rates, levies and assessments payable in respect of such year by Landlord
upon or in respect of the Building by any governmental or quasi-governmental
authority and all taxes specifically imposed in lieu of any such taxes. If due
to a future change in the method of taxation, any franchise, income, profit or
other tax shall be levied against Landlord in whole or in part in lieu of any
tax which would otherwise constitute one of the foregoing taxes or charges or if
there shall be levied against Landlord a tax or license fee measured by gross
rents, such franchise, income, Profit or other tax or license fee shall be
deemed to be a real estate tax for the purposes hereof. The taxes described in
this Section 6(b)(i) shall also include all of Landlord's expenses, including,
but not limited to, attorney's fees, incurred by Landlord in any effort to
minimize such taxes, whether by contesting proposed increases in assessments or
by any other means or procedures appropriate in the circumstances.
(ii) All costs, charges and expenses payable by Landlord (not directly
reimbursed by tenants of the Building or by insurance proceeds) which are
directly attributable to the ownership, operation, maintenance and normal repair
of the Building, including, but not limited to, the cost of utilities, building
supplies, janitorial services with the exception of the janitorial services for
the Premises Rentable Area which shall be provided and paid for by Tenant,
window cleaning services, normal maintenance and repair of the Building and the
Common Areas (including elevators and the periodic refurbishing of the Common
Areas), heating and air conditioning, landscaping, snow removal, parking area
repair and maintenance, insurance (including boiler and machinery, fire and
extended coverage, rental and public liability insurance) and labor costs
incurred in the operation or maintenance of the Building, but excluding in any
case renting commissions and costs of painting or decorating any other tenant's
space. It is mutually understood and agreed that Tenant shall be responsible
directly to the Public Service Co. of Colorado for the payment of gas and
electric utility bills for their Premises Rentable Area.
(iii) The following expenses and costs shall not be included within
the "Operating Costs" for the Building; costs incurred in connection with the
original construction of the Building or in connection with any major change in
the Building; costs of alterations or improvements to the premises of other
tenants; depreciation, interest and principal payments on mortgages and other
debt costs, if any; costs of correcting major and/or latent defects in, or
significant design errors relating to, the design, or construction of the
Building; costs for which the Landlord is reimbursed by any tenant or occupant
of the Building, by insurance proceeds, or by anyone else; the expense for
extraordinary service provided to other tenants of the Building for which
Landlord receives reimbursement; costs associated with the operating of the
business of the Landlord as a separate entity, as the same are distinguished
from the cost of operating the Building; the wages and benefits of any employee
who does not devote substantially all of his or her employee time to the
Building, unless such wages and benefits are prorated to reflect time spent on
operating and managing the Building; fines, penalties and interests; any charges
or expenses accrued by Landlord resulting from its own or its affiliate's
occupancy of any space in the Building; any recalculation of or additional
Operating Costs actually incurred more than three years prior to the year in
which the Landlord proposes that such costs be included; all items and services
for which the Tenant
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or other tenant of the Building reimburses the Landlord or which the Landlord
provides selectively to one or more of the tenants (other than Tenant) without
reimbursement; tax penalties incurred as a result of the Landlord's negligence,
inability, or unwillingness to make payments when due; Landlord's general
overhead and general administrative expenses, provided nothing herein shall be
deemed to prohibit the Landlord from charging a reasonable management fee
computed in accordance with industry custom and otherwise subject to the
limitations herein; costs (including reasonable attorney fees) incurred by
Landlord due to Landlord's violation or any tenant's violation (other than
Tenant) of the terms and conditions of any lease of space in the Building; and
any other expense which in accordance with generally accepted accounting
principles, consistently applied, would not normally be treated as Operating
Costs by landlords of comparable buildings, except for expenses relating to
repair or replacement of the roof, paving, and HVAC equipment, which shall be
included within the "Operating Costs" of the Building.
(c) Tenant shall have the right to inspect all documents reflecting
any part of the Operating Costs and the calculations of any amount payable under
Section 6(a) of this Lease and Landlord shall explain its calculations of
Operating Cost and the amounts due under Section 6(a) once each year upon
request by Tenant. If Tenant wishes to dispute the determination of Operating
Costs under Section 6(b) or the calculation of any amount payable under Section
6(a), Tenant shall give Landlord written notice of such dispute within ninety
(90) days after receipt of notice from Landlord of the matter giving rise to the
dispute. If Tenant does not provide Landlord such notice within such time,
Tenant shall have waived its right to dispute such determination or calculation.
Promptly after the giving of such written notice, Landlord shall cause to be
made a complete audit of Landlord's records relating to the matter in dispute by
a nationally recognized firm of independent certified public accountants
selected by Landlord. The cost of such audit shall be borne by Tenant unless
such audit discloses an error which overstated Operating Cost by more than three
percent of the amount determined by the audit in which event Landlord shall bear
the cost of such audit. If such audit reveals that the amount previously
determined by Landlord was incorrect, a correction shall be made and either
Landlord shall promptly return to Tenant any overpayment or Tenant shall
promptly pay to Landlord any underpayment which was based on such incorrect
amount. Notwithstanding the pendency of any dispute hereunder, Tenant shall
make payments based upon Landlord's determination or calculation until such
determination or calculation has been established hereunder to be incorrect.
SECTION 7: TAXES
(a) Tenant shall pay before delinquency any and all taxes,
assessments, license taxes and other charges levied, assessed or imposed and
which become payable during the Term of this Lease upon Tenant's operations at,
occupancy of, or conduct of business at the Premises or upon equipment,
furniture, appliances, trade fixtures and other personal property of any kind
installed or located at premises; provided however Tenant may pay such amounts
after delinquency to the extent that such delay is necessary to Tenant's good
faith and diligent contest of such amounts, but only so long as there is no risk
of Tenant having any of its assets foreclosed upon or seized by the taxing
authority.
(b) If Tenant shall install or cause Landlord to install special
tenant improvements such as, but not limited to, private elevators, escalators,
interior staircases or other fixtures and fittings which cause an increase in
the assessed value of the Building, then Tenant shall also pay as additional
rent all the taxes specified in Section 6(b)(i) reasonably allocable to such
extraordinary improvements. If the taxing authorities fail to render a separate
tax ▇▇▇▇ with respect to such improvements, Landlord shall allocate a reasonable
portion of such taxes on the Building to such improvements.
SECTION 8: QUIET ENJOYMENT
Landlord covenants and agrees with Tenant that upon Tenant paying the Base
Rent and additional rent hereunder and observing and performing all the terms,
covenants and conditions of this Lease on Tenant's part to be observed and
performed, Tenant may peaceably and quietly enjoy the Premises subject,
nevertheless, to the terms and conditions of this Lease and to the underlying
mortgages hereinafter mentioned.
SECTION 9: PREPARATION OF PREMISES
Landlord shall, prior to the commencement of the Term of this Lease,
substantially complete the work in the Premises required to be done by Landlord
as specified in Exhibit C attached hereto. Landlord shall not be required to
timely complete any of such work where Landlord's failure to do so is caused by
any delay, interference with or hindrance
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of such work by Tenant, Tenant's contractor or any of their employees, servants
or agents, by any changes in such work requested by Tenant and agreed to by
Landlord, or by the failure of Tenant or Tenant's contractor to timely and
properly complete any of Tenant's work in the Premises. Any such failure of
Landlord shall not make this Lease void or voidable or alter or affect any of
the terms hereof (with the exception of Section 3, above) and Tenant shall not
be entitled to any abatement of rent therefor. In order that Tenant can plan
its affairs, Landlord shall give Tenant ninety (90) days notice of when Landlord
believes the Commencement Date will occur and thereafter shall keep Tenant
advised as to construction progress and any changes in Landlord's prediction as
to the Commencement Date.
SECTION 10: ACCEPTANCE OF PREMISES
Taking possession of the Premises by Tenant shall be conclusive evidence as
against Tenant that the Premises and the Building were in good and satisfactory
condition when Possession was taken.
SECTION 11: ACCESS TO PREMISES
Landlord and Landlord's agents shall have the right to enter the Premises
at all times to examine them, to show them to prospective purchasers,
mortgagees, lessors or lessees, and to make and perform such decorations,
cleaning, maintenance, repairs, alterations, improvements or additions as
Landlord may deem necessary or desirable for the safety, improvement or
preservation of the Premises or of other portions of the Building, without the
same constituting an eviction of Tenant in whole or in part or entitling Tenant
to any abatement of rent, by reason of loss or interruption of business of
Tenant, or otherwise. If Tenant shall not be personally present to open and
permit an entry into the Premises, at any time when for any reason an entry
therein shall be necessary or permissible, Landlord or Landlord's agents may
enter the Premises by use of a master key, or in an emergency may forcibly enter
the Premises, without rendering Landlord or Landlord's agents liable therefor
(provided that during such entry Landlord or Landlord's agents shall accord
reasonable care to Tenant's property), and without in any manner affecting the
obligations and covenants of this Lease. Landlord shall have the right to
erect, build, use and maintain unexposed pipes, ducts and conduits in and
through the premises. If an excavation shall be made upon land adjacent to the
Building or any part thereof or shall be authorized to be made, Tenant shall
afford to the person causing or authorized to cause such excavation, license to
enter upon the Premises for the purpose of doing such work as such person shall
deem necessary to preserve the Building or any part thereof from injury or
damage and to support any part thereof by proper foundations without any claim
for damages or indemnity against Landlord or diminution or abatement of rent.
Notwithstanding anything to the contrary in this paragraph, Landlord agrees to
use its best efforts not to interfere unreasonably with the Tenant or the
Tenant's business in the course of exercising its rights under this paragraph.
In the event that Landlord's exercise of its rights under this paragraph
prevents Tenant from operating its business for three or more days (unless such
exercise results from Tenant's action, breach of this Lease, or negligence).
Tenant shall be entitled to an abatement of rent until such time that Tenant is
able to operate its business on the Premises.
SECTION 12: ALTERATIONS BY TENANT
(a) Tenant shall make no alterations, decorations, installations,
additions or improvements in or to the Premises without first obtaining the
written consent of Landlord which consent shall not be unreasonably withheld.
Tenant understands that Landlord's consent will be conditioned on Tenant's
compliance with Landlord's requirements as in effect at the time permission is
requested, which requirements will include, but not be limited to Landlord's
approval of plans, specifications, contractors, insurance, and hours of
construction. Tenant will be required to pay Landlord a reasonable fee for
supervising Tenant's contractor and for landlord's related costs, such as, but
not limited to, trash removal, utilities and elevator operators. Prior to the
commencement of any work in or to the Premises by Tenant's contractor, Tenant
shall on request deliver to Landlord certificates issued by applicable insurance
companies evidencing that workmen's compensation and public liability insurance
and property damage insurance, all in amounts and with companies, and on forms
satisfactory to Landlord, are in force and effect and maintained by all
contractors and subcontractors engaged by Tenant to perform such work. Each
such certificate shall provide that it may not be cancelled without ten days'
prior written notice to Landlord.
(b) All articles of personal property, and all movable business and
trade fixtures, machinery and equipment, cabinetwork, furniture and movable
partitions owned or installed by Tenant at its expense in the Premises (and with
respect to which no credit or
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allowance was granted to Tenant by Landlord) shall remain the property of Tenant
and may be removed by Tenant at any time, provided that Tenant, at its expense,
shall repair any damage to the Premises or the Building caused by such removal.
All alterations, decorations, installations, additions or improvements in or to
the Premises other than those specified in the first sentence of this Section
12(b) shall, upon the completion thereof, become the Property of Landlord and
shall be surrendered to Landlord upon the expiration or other termination of the
Term of this Lease. Landlord may elect to require Tenant to remove all or any
part of the Property described in the first sentence of this Section 12(b) at
the expiration or other termination of the Term of this Lease, in which event
such removal shall be done at Tenant's expense, and Tenant shall, at its
expense, repair any damage to the Building or Premises caused by such removal.
(c) Subject to the provisions of Section 11 of this Lease. Tenant
shall be solely responsible for the consequences of Tenant's repairs and
alterations on the Building's structure and on the operation of Building
systems, such as heating, air conditioning, ventilating, electrical and
plumbing, whether or not Tenant had received Landlord's consent to such repairs
or alterations pursuant to this Section 12.
SECTION 13: REPAIRS
(a) Tenant shall take good care of the Premises and the fixtures and
improvements therein, including, but not limited to, carpet, drywall and
fixtures (except for the unexposed pipes, ducts and conduits in and through the
Premises), and, at its sole cost and expense, make repairs, restorations or
replacements as and when needed to preserve them in good working order and
condition. If Tenant fails to make any repairs, restorations or replacements
required by this Lease, Landlord may (but without any obligation to do so) make
such repairs, restorations, or replacements at the expense of Tenant and such
expense shall be due as additional rent. Tenant shall comply with all
provisions of Sections 12 and 14 of this Lease in connection with such repairs,
restorations and replacements.
(b) Landlord shall make repairs, restorations and replacements as and
when needed to those portions of the Building which are not required to be
maintained by Tenant or other tenants of the Building in order to preserve them
in good working order and condition. Landlord shall replace all lamps, tubes
and ballasts used in the Premises either after notice from Tenant or as a result
of any periodic relamping program undertaken by Landlord. Such repairs,
restorations and replacements shall be included within Operating Cost unless the
need for such repairs, restorations and replacements resulted from any fault or
negligence of Tenant or Tenant's employees, agents or invitees, in which event
the amount paid for such repairs, restorations and replacement shall be
immediately due from Tenant to Landlord with interest at the Default Rate from
the dates of Landlord's payments.
(c) There shall be no allowance to Tenant for a diminution of rental
value and no liability on the part of Landlord, by reason of inconvenience,
annoyance or injury to, or interruption of business, arising from Landlord,
Tenant or others making any repairs, restorations, replacements, alterations,
additions or improvements in or to any portion of the Building or the Premises,
or in or to fixtures, appurtenances or equipment thereof or as a result of other
tenants failing to make repairs.
SECTION 14: MECHANIC'S LIENS
(a) Tenant shall pay or cause to be paid all costs for work done by it
or caused to be done by it on the Premises of a character which will or may
result in liens on Landlord's interest therein and Tenant will keep the Premises
free and clear of all mechanic's liens, and other liens on account of work done
for Tenant or persons claiming under it. Tenant shall indemnify and hold
Landlord harmless against any liability, loss, damage, costs or expenses,
including attorney's fees, on account of any claims of any nature whatsoever,
including claims of liens of laborers or material men or others for work
performed for, or materials or supplies furnished to Tenant or persons claiming
under Tenant.
(b) Should any liens be filed or recorded against the Premises or any
action affecting the title thereto be commenced, Tenant shall give Landlord
written notice thereof. Tenant shall thereafter cause such liens to be removed
of record within ten days after the filing of the liens. If Tenant shall desire
to contest any claim of lien, it shall furnish Landlord with security
satisfactory to Landlord of at least 150% of the amount of the claim, plus
estimated costs and interest. For purposes of the preceding sentence, a bond
from a surety company reasonably satisfactory to Landlord in a form reasonably
satisfactory to Landlord shall be satisfactory security. If a final judgment
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establishing the validity or existence of a lien for any amount is entered,
Tenant shall pay and satisfy the same at once. If Tenant shall be in default in
paying any charge for which a mechanic's lien or suit to foreclose the lien has
been recorded or filed, and shall not have given Landlord security as described
above, Landlord may (but without being required to do so) pay such lien or claim
and any costs, and the amount so paid, together with reasonable attorney's fees
incurred in connection therewith, shall be immediately due from Tenant to
Landlord with interest at the Default Rate from the dates of Landlord's
payments.
(c) At least five days prior to the commencement of any work permitted
to be done by persons requested by Tenant on the Premises, Tenant shall notify
Landlord of the proposed work and the names and addresses of the persons
supplying labor and materials for the proposed work so that Landlord may avail
itself of the provisions of statutes such as Section 38-22-105(2) of Colorado
Revised Statutes (1973, as amended). During any such work on the Premises,
Landlord and its representatives shall have the right to go upon and inspect the
Premises at all reasonable times, and shall have the right to post and keep
posted thereon notices such as those provided for by Section 38-22-105(2) or to
take any further action which Landlord may deem to be proper for the protection
of Landlord's interest in the Premises.
SECTION 15: CASUALTY
(a) If the Premises, or the Building, shall be so damaged by fire or
other casualty as to render the Premises untenantable, and if such damage shall
be so great that an architect selected by Landlord shall certify in writing to
Landlord that the Premises, with the exercise of reasonable diligence, but
without the payment of overtime or other premiums cannot be made tenantable
within 180 days from the happening of the fire or other casualty, or if the
damage shall be such that Landlord's architect shall certify that the Premises
can be made tenantable within the 180-day period from the happening of the fire
or other casualty, but insurance proceeds are not made available to Landlord for
repair of such damage, then Landlord may terminate this Lease, and in the event
such fire or other casualty occurs in the final one year of the Term or in the
final one year of any Option Term, Tenant may terminate this Lease. If neither
Landlord or Tenant terminates this Lease as set forth above, then, except as
hereinafter provided, Landlord shall with reasonable promptness, repair the
damage so done except that Landlord shall not be required to repair, replace or
restore any items specified in the first sentence of Section 12(b). In the
event that such repairs are not actually completed within 270 days from the
happening of the fire or other casualty, Tenant may terminate this Lease within
280 days from the beginning of the fire or other casualty. Until such repair is
substantially completed, the Base Rent shall be abated in proportion to the part
of the Premises which is unusable by Tenant in the reasonable conduct of its
business or profession. There shall be no abatement of Base Rent by reason of
any portion of the Premises being unusable for a period of 15 days or less. If
the damage is due to the fault or negligence of Tenant or Tenant's employees,
agents or invitees, there shall be no abatement of Base Rent.
(b) If the Premises, without the fault or negligence of Tenant, shall
be damaged by fire or other casualty, but not so as to render them untenantable,
Landlord shall cause the damage to be repaired with reasonable promptness and
there shall be no abatement of Base Rent or any other amounts due under this
Lease. If the fire or other casualty causing damage to the Premises or other
parts of the Building shall have been caused by the Tenant, or Tenant's
employees, agents or invitees, such damage shall be repaired by Landlord and the
amount paid for such repair shall be immediately due from Tenant to Landlord
with interest at the Default Rate from the dates of Landlord's payments.
(c) If the Building is so damaged by fire or other casualty (although
the Premises are unaffected by such fire or other casualty, or if affected, can
be repaired within 180 days) that Landlord shall deem it advisable to
reconstruct, rebuild or raze the Building, then notwithstanding anything
contained herein to the contrary, this lease may be terminated by Landlord as of
the date of the occurrence of the fire or other casualty by giving written
notice to Tenant of such termination within (30) days after the occurrence of
the fire or other casualty. Within ninety (90) days of such notice of
termination, Tenant shall surrender to Landlord the Premises and all interest
therein under this Lease, and Landlord may re-enter and take possession of the
Premises and remove Tenant therefrom. Tenant shall Pay Base Rent, and all other
sums payable hereunder, duly apportioned as of the date of such termination of
this, Lease, and Landlord and Tenant shall be free and discharged from all
obligations arising hereunder after the date of such termination.
8
SECTION 16: EMINENT DOMAIN
(a) If any portion of the Premises or any portion of the Building
shall be taken by right of eminent domain or by condemnation or shall be
conveyed in lieu of any such taking, which shall render the Premises
untenantable, then this Lease, at the option of either Landlord or Tenant
exercised by either party giving written notice to the other of such termination
within thirty (30) days after such taking or conveyance, shall forthwith cease
and terminate and the Base Rent and all other sums payable hereunder shall be
duly apportioned as of the date of such taking or conveyance. Tenant thereupon
shall surrender to Landlord the Premises and all interest therein under this
Lease, and Landlord may re-enter and take possession of the Premises and remove
Tenant therefrom. If neither party exercises the option to terminate this
Lease, Landlord shall make an equitable adjustment of the Base Rent payable by
Tenant for the tenantable portion of the Premises.
(b) If any portion of the Building shall be taken or conveyed as
described above, which shall not render the Premises untenantable, then this
Lease, at the option of Landlord exercised by Landlord giving written notice to
Tenant of such termination within thirty (30) days after such taking or
conveyance, shall forthwith cease and terminate and the Base Rent and all other
sums payable hereunder shall be duly apportioned as of the date of such taking
or conveyance. Tenant thereupon shall surrender to Landlord the Premises and
all interest therein under this Lease, and Landlord may re-enter and take
possession of the Premises and remove Tenant therefrom. If Landlord does not
exercise the option to terminate this Lease, this Lease shall continue in full
force and effect.
(c) In the event of any taking or conveyance described above, Landlord
shall receive the entire award or consideration for the lands and improvements
so taken and Tenant hereby waives all claims against Landlord and assigns to
Landlord all claims against the condemnor for or on account of or incident to
such taking or conveyance, except that Tenant may separately claim and recover
from the condemnor, but not from Landlord, the value of any Personal Property of
Tenant which Tenant was entitled to remove pursuant to this Lease.
SECTION 17: INJURY TO PERSON OR PROPERTY
Tenant shall neither hold nor attempt to hold Landlord or Landlord's
employees or agents liable for, and Tenant shall hold harmless and indemnify
Landlord and Landlord's employees or agents from and against, any and all
demands, claims causes of action, liabilities, or judgements, and any and all
expenses (including, without limitation, attorney's fees) incurred by Landlord
in investigating and resisting the same, arising from any of the following:
(a) Any injury or damage to the person or property of Tenant, any
other tenant in the Building or to any other person rightfully in the Building
for any purpose whatsoever, where the injury or damage is caused by the neglect
or fault of Tenant or Tenant's employees, agents or invitees, or where such
injuries are the result of the violation of laws or ordinances, governmental
orders of any kind, or of the provisions of this Lease including the rules and
regulations provided for in Section 25 of this Lease, by any of such persons.
(b) Any injury or damage of any nature suffered by Tenant or Tenant's
employees, agents or invitees, where the injury or damage is caused by the
interference with or obstruction of deliveries to the Premises by any person;
(c) Any injury or damage of any nature suffered by Tenant or Tenant's
employees, agents or invitees where the injury or damage is caused by the loss
or destruction by any person of furniture, inventory, valuables, files or any
other property kept or stored on the Premises; and
(d) Any injury or damage not specified above to the person or property
of Tenant, or Tenant's employees, agents or invitees, where the injury or damage
is caused by any reason other than the negligence, recklessness or intentional
acts of Landlord or Landlord's employees or agents, including, but not limited
to any injury or damage resulting from fire, explosion, falling plaster or
glass, steam, gas, electricity, water, rain or snow or leaks from any part of
the Building, or from the pipes, appliances or plumbing works or from the roof,
street subsurface or from any other place or by dampness.
9
SECTION 18: INSURANCE
(a) At all times during the Term of this Lease, Tenant shall, at its
own expense, maintain (i) public liability insurance for claims for personal
injury or death and property damage with limits of not less than $500,000.00
combined single limit of liability; and (ii) fire and extended coverage
insurance on all property described in the first sentence of Section 12(b) to
the extent of at least 90 percent of their insurable value. All such policies
shall name Landlord as an additional insured party and shall be with insurance
companies and on forms reasonably satisfactory to Landlord. Tenant shall, prior
to Tenant's occupancy of the Premises and thereafter at Landlord's request,
furnish Landlord with copies of all insurance to be maintained by Tenant and
with evidence of payment of the premiums thereon. All such policies shall
contain a clause or endorsement to the effect that they may not be terminated or
amended during the Term of this Lease except after ten days' written notice
thereof to Landlord.
(b) Tenant shall not use or suffer or permit any other firm or person
to use the Premises for any hazardous purpose or in any manner that will
violate, suspend, void, make inoperative or increase the rate of any policies of
insurance of any kind at any time carried by Landlord upon the Premises or the
Building and the fixtures and property therein. Tenant at Tenant's sole expense
shall comply with all rules, orders, regulations or requirements of the board of
fire underwriters, or any other similar body, having jurisdiction over the
Building. Any increase in the cost of any insurance carried by Landlord
attributable to Tenant's activities on the Premises or Tenant's failure to
perform and observe Tenant's obligations and covenants hereunder shall be borne
by Tenant and payable to Landlord, from time to time, on demand.
SECTION 19: SERVICES PROVIDED BY LANDLORD
(a) As long as Tenant is not in default hereunder, Landlord shall
furnish or cause to be furnished the following services:
(i) Passenger elevator service for access to and egress from the
Premises during ordinary Business Hours and subject to call at all other times
(but paid for by Tenant proportionate to its percentage of Building Rentable
Area);
(ii) Heating or air conditioning; provided that Tenant will be solely
-------------
responsible to pay for the power to operate such heating and air conditioning on
the Premises as such utilities will be separately metered;
(iii) Domestic running water for the operation of lavatories,
ordinary drinking fountains in the Common Areas of the Building at all times
(but paid for by Tenant proportionate to its percentage of Building Rentable
Area;
(iv) Common Area janitorial services to be provided (but paid for by
Tenant proportionate to its percentage of the Building Rentable Area);
(v) Electric current for lighting the Premises and the Common Areas of
the Building, for operating ordinary 110-volt portable desk top office equipment
of the type normally used in executive offices, and for operating 220-volt
equipment only as indicated on Exhibit C; provided that Tenant will be solely
-------------
responsible to pay the electric ▇▇▇▇ to operate such systems on the Premises as
such utilities will be separately metered.
(b) Tenant shall not use or consume water for any purpose other than
ordinary lavatory and drinking purposes. Tenant covenants and agrees that at
all times its use of electric current shall never exceed the capacity of any
wiring installation in or to the Premises.
(c) Landlord shall not be liable to Tenant or any other person, for
direct or consequential damage, or otherwise, for any failure to supply any
heating, air conditioning, elevator, janitor, lighting or other service Landlord
has agreed to supply during any period when Landlord uses reasonable diligence
to supply such services. Landlord reserves the right temporarily to discontinue
such services, or any of them, at such times as maybe necessary by reason of
accident, unavailability of employees, repairs, alterations or improvements,
strikes, lockouts, riots, acts of God, governmental preemption in connection
with a national or local emergency, any rule, order or regulation of any
governmental agency, conditions of supply and demand, Landlord's compliance with
any voluntary or mandatory governmental energy conservation or environmental
protection program or any other happening beyond the control of Landlord.
Landlord shall not be liable for damages to person or property or for injury to,
or interruption of, business
10
for any discontinuance permitted under this Section 19, nor shall such
discontinuance in any way be construed as an eviction of Tenant or cause an
abatement of rent or operate to release Tenant from any of Tenant's obligations
hereunder.
SECTION 20: ASSIGNMENT AND SUBLETTING
Tenant shall not assign this Lease or any interest herein or sublet all or
any part of the Premises, or suffer or permit the Premises or any part thereof
to be occupied by others, without the prior written consent of Landlord in each
instance, which consent shall not be unreasonably withheld. Any such attempted
assignment, subletting, or occupancy without Landlord's prior written consent
shall be void and shall confer no rights whatsoever on any party. Tenant will
notify Landlord in writing of any interest in this Lease which Tenant wishes to
assign or any portion of the Premises which Tenant wishes to sublet or permit
others to occupy which notice shall specify the terms and conditions of such
transaction and shall be accompanied by such information as Landlord may require
with respect to the proposed assignee, sublessee or occupant. Upon receipt of
such notice and information, Landlord shall have the right in its discretion,
reasonably exercised, to either:
(i) Consent to such assignment, subletting or occupancy in which event
any rent or other consideration realized by Tenant under any such assignment,
subletting or occupancy in excess of the Base Rent and other sums payable
hereunder, after amortization of the reasonable costs incurred by Tenant for
leasing commissions and leasehold improvements in connection with such
assignment, subletting or occupancy over the term of such assignment, subletting
or occupancy, shall be paid to Landlord by Tenant: or
(ii) Refuse to consent to such assignment, subletting or occupancy,
setting forth its reasons for such refusal, in writing.
If Landlord does not deliver written notice as to Landlord's election of
one of the options referred to above within thirty (30) days after its receipt
of the notice and information from Tenant, Landlord shall be deemed to have
consented to the proposed assignment, subletting or occupancy. If this Lease or
any interest herein is assigned, or if the Premises of any part thereof be
sublet or occupied by anybody other than Tenant, with or without the consent of
Landlord having first been obtained, Landlord may, after default by Tenant,
collect rent from the assignee, subtenant or occupant, and apply the net amount
collected to the Base Rent and other sums due hereunder, but no collection shall
be deemed a waiver of this covenant, or the acceptance of the assignee,
subtenant or occupancy as the tenant hereof or a release of Tenant from the
further performance by Tenant of covenants on the part of Tenant contained in
this Lease. The consent by Landlord to an assignment, subletting, or occupancy
arrangement shall not relieve Tenant from primary liability hereunder or from
the obligation to obtain the express consent in writing of Landlord to any
further assignment, subletting, or occupancy arrangement.
SECTION 21: END OF TERM
Upon the expiration or other termination of the Tem of this Lease, Tenant
shall Promptly quit and surrender to Landlord the Premises broom-clean, in good
order and condition, ordinary wear excepted, and Tenant shall remove all of its
movable furniture and other effects and such alterations, additions and
improvements as Landlord shall require Tenant to remove pursuant to Section 12.
All movable furniture and other effects and alterations, additions and
improvements not so shall conclusively be deemed to have been abandoned and
maybe appropriated, sold, stored, destroyed or otherwise disposed of by Landlord
without notice to Tenant or any other person and without obligation to account
therefor; and Tenant shall pay Landlord all expenses incurred in connection with
such property, including, but not limited to, the cost of repairing any damage
to the Building or Premises caused by removal of such property. Tenant's
obligation to observe or perform this covenant shall survive the expiration or
other termination of this Lease.
SECTION 22: HOLDOVER
If Tenant or any party claiming through or under Tenant shall remain or
continue to be in possession of the Premises or any part thereof after the
termination of this Lease, at Landlord's option, Tenant or such party or both
shall be deemed to be illegally retaining possession or shall be deemed to be a
month to month tenant of the Premises on all the terms and conditions of this
Lease, except that the Base Rent shall be 1.5 times the amount of the Base Rent
for the final Lease Year. Nothing herein contained shall be construed to limit
Landlord's right to obtain Possession of the Premises upon termination of this
Lease by unlawful detainer proceedings or otherwise in the event that Landlord
11
does not exercise Landlord's option to treat the continued possession by Tenant
or any party claiming through or under Tenant as a month to month tenancy.
SECTION 23: SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE
(a) This Lease is subject and subordinate to all ground and underlying
leases and to all mortgages, trust indentures and other encumbrances which may
now or hereafter affect such leases or all or any portion of the Building and to
all renewals, modifications, consolidations, replacements and extensions
thereof. This clause shall be self-operative and no further instrument or
subordination shall be required to order to effectuate it. Tenant covenants and
agrees nevertheless, to execute and deliver promptly any certificate or other
assurance in confirmation of such subordination requested by any lessor or
mortgagee.
(b) Tenant agrees that in the event any proceedings are brought for
the foreclosure of any mortgage to which this Lease is subject and subordinate,
or any ground lessor retakes possession of the Building. Tenant will attorn to
the purchaser at any such foreclosure sale or such ground lessor (as the case
maybe) and will recognize such Purchaser or ground lessor as its landlord under
this Lease. Any attornment to a purchaser or ground lessor pursuant to this
Section 23 shall occur automatically, but Tenant shall on request by and without
cost to Landlord, ground lessor, or any purchaser execute and deliver any
instruments evidencing such attornment.
(c) Notwithstanding the foregoing, no subordination or attornment
pursuant to the Provisions of this Section 23 shall be effective unless prior to
the date any party desiring such subordination or attornment obtains title to,
or possession of the Building, such party has acknowledged by written notice to
Tenant that this Lease and Tenant's rights hereunder shall continue undisturbed
while Tenant is not in default hereunder; except that party shall not be:
(i) Liable for any act or omission of any prior Landlord or;
(ii) Subject to any offsets or defenses which Tenant might have
against any prior Landlord; or
(iii) Bound by any Base Rent which Tenant might have paid for more
than one month in advance to any prior Landlord.
SECTION 24: STATEMENT OF PERFORMANCE
Each party agrees at any time and from time to time, to execute and deliver
to the other, within twenty (20) days following a request therefor, a statement
in writing certifying that this Lease is in full force and effect, and
unmodified (or specifying any modifications), that the requesting party is not
in default hereunder (or specifying any alleged defaults by the requesting
party), and any further information about this Lease or the Premises which the
requesting party may reasonably request. Each party understands that
prospective purchasers, mortgagees or lessors of the Building and prospective
assignees of this Lease or prospective subleassees or occupants of the Premises
will rely on such certificates. Any failure by either party to respond to a
request within twenty (20) days after receipt of the request shall constitute an
admission that the matters set forth in the requested certificate are true.
SECTION 25: RULES AND REGULATIONS
The rules and regulations set forth on Exhibit D attached hereto are hereby
made a part of this Lease. Landlord may from time to time amend, modify, delete
or add new and additional reasonable rules and regulations for the use, safety,
cleanliness and care of the Premises and the Building, and the comfort, quiet
and convenience of occupants of the Building. Such new or modified rules and
regulations shall be effective upon notice to Tenant from Landlord thereof.
Tenant and Tenant's employees, agents and invitees, shall at all times observe
faithfully and comply strictly with, the rules and regulations set forth on
Exhibit D or as hereinafter modified by Landlord. In the event of any breach of
any rules or regulations set forth on Exhibit D or any amendments or additions
thereto, Landlord shall have all remedies in this Lease provided for in the
event of default by Tenant and shall, in addition have any remedies available at
law or in equity including the right to enjoin any breach of such rules and
regulations. No provision of this Lease shall be construed to impose upon
Landlord any duty or obligation to enforce the rules and regulations or terms,
covenants or conditions in any other lease, against any other tenant or person.
Landlord shall not be liable to Tenant for violation of such rules, regulations,
terms, covenants or conditions by any other tenant, or such tenant's
12
employees, agents or invitees, or any other person. To the extent that Landlord
enforces the rules and regulations for the Building, they shall be enforced
uniformly with respect to all tenants.
SECTION 26: SIGNS; BUILDING NAME; DIRECTORY
(a) Tenant shall not install, inscribe, paint or otherwise attach any
sign, advertisement or notice on any part of the outside of the Premises or the
Building or to any part of the inside of the Premises which is visible from
outside of the Premises or in the halls, lobbies, windows or elevator banks of
the Building without the prior consent of Landlord, which consent may be
withheld in Landlord's absolute discretion. Any permitted sign shall comply
with the requirements of any governmental authority having jurisdiction over the
Building. Tenant shall, at Tenant's expense, maintain all permitted signs and
shall, on the expiration or earlier termination of this Lease, and at Tenant's
expense, remove all such Permitted signs and repair any damage caused by such
removal. Landlord shall have the right to remove all non-permitted signs
without notice to Tenant and at the expense of Tenant.
(b) Landlord shall have the right to name the Building and to change
the name, number or designation by which the Building is commonly known. Tenant
shall not use the name of the Building for any purpose other than as the address
of the business or profession to be conducted by Tenant in the Premises.
(c) Landlord shall provide a directory in a conspicuous place in the
Building with names of tenants of the Building. Tenant shall be given one line
on the Building directory. Landlord shall also provide one suite identification
sign adjacent to the main entry door of the Premises in Landlord's standard
form. Tenant shall pay Landlord's reasonable charges for changing such director
listing and identification sign at Tenant's request.
SECTION 27: INDEMNITY; WAIVER
(a) Tenant shall indemnify and hold Landlord harmless from any and all
demands, claims, causes of action, liabilities, judgments, fines and expenses
(including, without limitation, attorney's fees) incurred or suffered by
Landlord by reason of any breach, violation or non-performance by Tenant or
Tenant's employees, agents or invitees of any covenant or provision of this
Lease.
(b) INDEMNIFICATION AND LIABILITY OF LANDLORD. Landlord has no
knowledge of any present violations of applicable federal, state, or local laws
and regulations, including all laws related to toxic hazardous waste. The
tenant shall comply with all applicable federal, state, and local laws and
regulations, including but not limited to the Federal Water Pollution Control
Act, 33 U.S.C. (S)1251, et seq., the Oil Pollution Act, 33 U.S.C. (S)2701 et
------ --
seq., the Clean Air Act, 42 U.S.C. (S)7401, et seq., the Resource Conservation
------
and Recovery Act, 42 U.S.C. (S)6901, et seq., and the Comprehensive
------
Environmental Response, Control, and Liability Act, 42 U.S.C. (S)9601, et seq.,
------
as subsequently amended. The Tenant shall indemnify, defend, and hold the
Landlord harmless for any violations incurred under any such laws and
regulations or for any costs, damages, claims, liabilities, and judgments
arising from past, present, and future acts or judgments arising from past,
present, and future acts or omissions of the Tenant in connection with the use
and/or occupancy authorized by the Lease or other acts of Tenant, agents or
assigns. This indemnification and hold harmless agreement includes, but is not
limited to, acts and omissions of the Tenant in connection with the use and/or
occupancy authorized by the lease which result in: (1) violations of the above
or any applicable laws and regulations; (2) judgments, claims, or demands
assessed against the Landlord; (3) costs, expenses, and damages incurred by the
Landlord; or (4) other releases or threatened releases on or into the land,
property, and other interest of the Landlord by solid waste and/or hazardous
substance(s).
(c) The Tenant's indemnification of the Landlord shall also include
any damages to life or property arising from the Tenant's occupancy or use of
land, property, and other interests of the Landlord. The Landlord has no duty
to inspect leasehold area or to warn of hazards and, if the Landlord does
inspect the area, it shall incur no additional duty nor liability for identified
or non-identified hazards. This covenant may be enforced by the Landlord in a
court of competent jurisdiction.
(d) LANDLORD AND TENANT HEREBY MUTUALLY WAIVE TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THEM AGAINST THE OTHER
ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS
LEASE, THE RELATIONSHIP OF
13
LANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF
INJURY OR DAMAGE.
(e) Binding Arbitration. (i) Any controversy, claim or dispute
arising out of or relating to this Lease or the breach, termination,
enforceability or validity thereof, including without limitation the
determination of the scope or applicability of this Lease to arbitrate, shall be
determined exclusively by binding arbitration in Boulder County before three
arbitrators. The arbitration shall be governed by the American Arbitration
Association under its Commercial Arbitration Rules, provided that at least one
member of the panel shall have relevant knowledge of or experience in the
commercial real estate industry.
(ii) No provision of, nor the exercise of any rights under Section
27(e) shall limit the right of any party; (a) To bring a forcible entry and
detainer, unlawful detainer or eviction action, (b) to exercise self-help
remedies relating to a Landlord lien, or (c) to request and obtain from a court
having jurisdiction before, during or after the pendency of any arbitration,
provisional or ancillary remedies and relief including, but not limited to,
injunctive or mandatory relief or the appointment of a receiver. The
institution and maintenance of an action or judicial proceeding for, or pursuit
of, provisional or ancillary remedies or exercise of self-help remedies shall
not constitute a waiver of the right of any party hereto, even if such party is
the plaintiff, to submit the dispute to arbitration if such party would
otherwise have such right.
(iii) In any such arbitration proceeding, the arbitrator shall not
have the power or authority to award punitive damages to any party. Judgment
upon the award rendered may be entered in any court having jurisdiction.
(iv) Each of the parties shall, subject to the award of the
arbitrators, pay an equal share of the arbitrators' fees. The arbitrators shall
have the power, in the reasonable exercise of their discretion, to award
recovery of all costs and fees (including attorneys' fees, administrative fees,
arbitrators' fees and court costs) to the prevailing party.
SECTION 28: SECURITY
Tenant shall keep on deposit with Landlord at all times during the Term of
this Lease, the Security Deposit as security for the payment by Tenant of the
Base Rent and any other sums due under this Lease and for the faithful
performance of all the terms, conditions and covenants of this Lease. If, at
any time during the Term of this Lease Tenant shall be in default in the
performance of any provision of this Lease, Landlord may, but shall not be
required to, use the Security Deposit or so much thereof as necessary, in
payment of any Base Rent or any other sums due under this Lease in default, in
reimbursement of any expense incurred by Landlord or in payment of the damages
incurred by Landlord by reason of Tenant's default. In such event, Tenant
shall, on written demand of Landlord, forthwith remit to Landlord a sufficient
amount in cash to restore the Security Deposit to its original amount. In the
event the Security Deposit has not been utilized as described above, the
Security Deposit, or as much thereof as has not been utilized for such purposes,
shall be refunded to Tenant, with interest, within sixty (60) days of the end of
the Tem, upon full performance of this Lease by Tenant. Landlord shall have the
right to commingle the Security Deposit with other funds of Landlord, however,
Landlord shall quarterly pay Tenant interest on the average daily principal
balance of the security deposit at an annual rate of eight (8) per cent.
Landlord shall deliver the Security Deposit (plus any accrued interest) to the
purchaser of Landlord's interest in the Premises in the event such interest be
sold, and thereupon, Landlord shall be discharged from further liability with
respect to the Security Deposit.
Notwithstanding the above provisions of this Section 28, if claims of
Landlord exceed the Security Deposit, Tenant shall remain liable for the balance
of such claims. Tenant shall not assign or encumber or attempt to assign or
encumber the Security Deposit provided for herein except that Tenant may assign
such deposit in the event of a permitted assignment of Tenant's entire interest
in this Lease.
SECTION 29: INTENTIONALLY LEFT BLANK
SECTION 30: COMMENCEMENT OF THE TERM
The Term of this Lease shall commence on whichever of the following dates
shall first occur.
(a) The date on or after April 1, 1997, on which the Premises are
substantially ready for occupancy (which shall mean that Landlord shall have
substantially completed the work in the Premises required to be completed by
Landlord as specified in
14
Exhibit C, exclusive of minor matters of mechanical and cosmetic adjustment;
provided that, in the event Landlord shall be delayed in completing such work by
any interference with or hindrance of such work by Tenant, Tenant's contractor
or any of their employees, servants or agents or by any changes in such work
requested by Tenant and agreed to by Landlord, the Premises shall be deemed to
have been substantially ready for occupancy on the date on which Landlord would
have substantially completed such work had such delay not occurred; or
(b) The date on which Tenant shall take Possession and occupy the
Premises.
Landlord shall deliver written notice to Tenant specifying the date,
determined in the manner specified above, on which the term of this Lease
commenced, which date shall be the Commencement for all purposes under this
Lease.
SECTION 31: EVENTS OF DEFAULT
The following shall constitute defaults of Tenant hereunder:
(a) Tenant shall fail to pay when due any installment of Base Rent or
any other sum payable by Tenant under terms of this Lease, and Tenant shall fail
to remedy such failure within five (5) days after Landlord shall have given
Tenant written notice specifying such failure;
(b) Tenant shall neglect or fail to perform or observe any of the
covenants herein contained on Tenant's part to be performed or observed and
Tenant shall fail to remedy such default within ten days after Landlord shall
have given to Tenant written notice specifying such neglect or failure (or
within such period, if any, as may be reasonably required to cure such default
if it is of such nature that it cannot be cured within such ten-day period and
proceeds with reasonable diligence thereafter to cure such default);
(c) This Lease or the Premises or any part thereof shall be taken upon
execution or by other process of law directed against Tenant, or shall be taken
upon or subject to any attachment at the instance of any creditor of or claimant
against Tenant, and such, attachment shall not be discharged or disposed of
within thirty (30) days after the levy thereof;
(d) Tenant shall not take possession of the Premises within thirty
(30) days after the Commencement Date or shall vacate or abandon the Premises or
lock the premises so as to prevent the entry therein of Landlord or Landlord's
representatives as permitted by the term of this Lease;
(e) Tenant shall remove or attempt to remove any goods or property
from the Premises other than in the usual course of business;
(f) Tenant shall:
(i) Admit in writing Tenant's inability to pay Tenant's debts
generally as they become due;
(ii) Make an assignment of all or a substantial part of Tenant's
property for the benefit of creditors;
(iii) Apply for or consent to or acquiesce in the appointment of a
receiver, trustee or liquidator of Tenant or of all or a substantial part of
Tenant's property or of the Premises or of Tenant's interest in this Lease; or
(iv) File a voluntary petition in bankruptcy or a petition or an
answer seeking reorganization under any bankruptcy or insolvency law or an
arrangement with creditors, or take advantage of any insolvency law or file an
answer admitting the material allegations of a petition filed against Tenant in
any bankruptcy, reorganization or bankruptcy proceedings; or
(g) The entry of a court order, judgement or decree without the
application, approval or consent of Tenant, approving a petition seeking
reorganization of Tenant under any bankruptcy or insolvency law or appointing a
receiver, trustee or liquidator of Tenant or of all or a substantial part of
Tenant's property or of the Premises or of Tenant's interest in this Lease, or
adjudicating Tenant as bankrupt or insolvent, and such order, judgment or decree
shall not be vacated, set aside or stayed within thirty (30} days from the date
of entry.
15
SECTION 32: REMEDIES
If Tenant shall default under this Lease as set forth in Section 31,
Landlord shall have the following rights and remedies in addition to all other
remedies at law or equity, and none, of the following, whether or not exercised
by Landlord, shall preclude the exercise of any other right or remedy whether
herein set forth or existing at law or equity:
(a) Landlord shall have the right to terminate this Lease by giving
Tenant notice in writing, and upon the giving of such notice, this Lease and the
Term hereof as well as the right, title and interest of Tenant under this Lease
shall wholly cease and expire in the same manner and with the same force and
effect (except as to Tenant's liability on the date specified in such notice as
if such date were the expiration date of the Term of this Lease) without the
necessity of re-entry or any other act on Landlord's part. Upon any termination
of this Lease, Tenant shall quit and surrender to Landlord the Premises as set
forth in Section 32. If this Lease is terminated, Tenant shall remain liable to
Landlord for all Base Rent accrued and unpaid and other sums due hereunder to
the date of termination of this Lease and Landlord shall also be entitled to
recover from Tenant the worth at the time of such termination of the excess, if
any, of the amount of Base Rent reserved in this Lease for the balance of the
Term of this Lease (which shall be calculated using an interest rate equal to
the legal rate of interest then in effect) in excess of the then reasonable
rental value of the Premises for the same period. No provision(s) of this Lease
shall limit or prejudice the right of Landlord to prove for and obtain as
liquidated damages by reason of any termination of this Lease, an amount equal
to the maximum allowed by any statute or rule of law in effect at the time when,
and governing the proceedings in which, such damages are to be proved, whether
or not such amount be greater, equal to, or less than the amount of the
difference referred to above.
(b) Landlord may without demand or notice, re-enter and take
possession of the Premises or any part thereof, and repossess the same as of
Landlord's former estate and expel Tenant and those claiming through or under
Tenant, and remove the effects of any and all such persons (forcibly, if
necessary) without being deemed guilty of any manner of trespass and without
prejudice to any remedies for arrears of rent or preceding breach of covenants.
Should landlord elect to re-enter as provided in this Section 32(b), or should
Landlord take possession pursuant to legal proceedings or pursuant to any notice
provided for by law, Landlord may, from time to time, without terminating this
Lease, relet the Premises or any part thereof for such term or terms and at such
rental or rentals, and upon such other conditions as Landlord may deem
advisable, with the right to make alterations and repairs to the Premises. No
such re-entry or repossession of the Premises by Landlord shall be construed as
an election on Landlord's part to terminate this Lease unless a written notice
of termination is given to Tenant by Landlord. No such re-entry or repossession
of the Premises shall relieve Tenant of its liability and obligation under this
Lease, all of which shall survive such re-entry or repossession. Upon the
occurrence of such re-entry or repossession, Landlord shall be entitled to the
amount of the monthly Base Rent, and any other sums which would be payable
hereunder if such re-entry or repossession had not occurred, less the net
proceeds, if any, of any reletting of the Premises after deducting all of
Landlord's reasonable expenses in connection with such reletting, including but
without limitation, all repossession costs, brokerage commissions, legal
expenses, attorney's fees, expenses of employees, alteration costs and expenses
of preparation for such reletting. Tenant shall pay such amount to Landlord on
the days on which the Base Rent or any other sums due hereunder would have been
payable hereunder if possession had not been retaken. In no event shall Tenant
be entitled to receive the excess, if any, of net rent collected by Landlord as
a result of such reletting over the sums payable by Tenant to Landlord
hereunder.
(c) If Tenant shall default in making any payment required to be made
by Tenant (other than payments of Base Rent) or shall default in performing any
other obligations of Tenant under this Lease, Landlord may, but shall not be
obligated to, make such payment or on behalf of Tenant, expend such sum as maybe
necessary to perform such obligation. All sums so expended by Landlord with
interest thereon at the Default Rate shall be repaid by Tenant to Landlord on
demand. No such payment of expenditure by Landlord shall be deemed a waiver of
Tenant's default nor shall it affect any other remedy of Landlord by reason of
such default.
(d) If Tenant shall fail to pay when due any installment of Base Rent
or other sum due under this Lease (even if such failure is timely cured),
Landlord may charge and Tenant shall pay upon demand interest thereon at the
Default Rate, and a collection charge (in addition to any attorney's fees
incurred) equal to five percent (5%) of the amount of said late payment.
16
SECTION 33: CONTROL OF THE COMMON AREAS
Landlord shall have the right at any time to change the arrangement or
location of, or both, or to regulate or eliminate the use of the Common Areas
without incurring any liability to Tenant or entitling Tenant to any abatement
of rent and such action shall not constitute an actual or constructive eviction
of Tenant, so long as Tenant's Leasehold interests are not materially affected.
SECTION 34: PARKING PRIVILEGES
Tenant's guest or clients have the same rights to use in common with other
tenants of the Building guests or clients those automobile Parking areas which
are reserved for "visitors only" and which are included within the Common Areas.
SECTION 35: FAILURE TO GIVE PERMISSION; EARLY OCCUPANCY
If Landlord is unable to give possession of the Premises on the
Commencement Date hereof for any reason, including, but not limited to, failure
to complete the Building or the retention of the Premises or any Part thereof by
a prior occupant, Landlord shall not be subject to any liability for failure to
give possession on such date, and, except as set forth in Section 3, the
validity of this Lease shall not be impaired under such circumstances, nor shall
such circumstances be construed to extend the Term of this Lease.
SECTION 36: NO IMPLIED SURRENDER OR WAIVER
The failure of Landlord to seek redress for violation of, or to insist upon
the strict performance of, any covenant or condition of this Lease or any of the
rules and regulations set forth in Exhibit D to this Lease or hereafter adopted
by Landlord shall not prevent a subsequent act, which would have originally
constituted a violation, from having all the force and effect of an original
violation. If it should be necessary or proper for Landlord to bring any action
under this Lease or to place this Lease with any attorney for the enforcement of
any of Landlord's rights hereunder, then Tenant agrees to pay to Landlord
reasonable attorney's fees. The receipt by Landlord of any sums due hereunder
with knowledge of the breach of any covenant of this Lease shall not be deemed a
waiver of such breach. The failure of Landlord to enforce any of the rules and
regulations set forth in Exhibit D, or hereafter adopted, against Tenant or any
other tenant in the Building shall not be deemed a waiver of such rules and
regulations or any part thereof. No provisions of this Lease shall be deemed to
have been waived by Landlord unless such waiver is in writing signed by
Landlord. No act or thing done by Landlord or Landlord's agents during the Term
of this Lease shall be deemed an acceptance of a surrender of the Premises, and
no agreement to accept such surrender shall be valid unless in writing signed by
Landlord. No employees of Landlord or of Landlord's agents shall have any power
to accept the keys of the Premises prior to the termination of this Lease. The
delivery of keys to any employee of Landlord, or of Landlord's agents, shall not
operate as a termination of this Lease or a surrender of the Premises. No
payment by Tenant, or receipt by Landlord, of a lesser amount than any sums due
hereunder, shall be deemed to be other than on account of the earliest
stipulated amount, nor shall any endorsement or statement on any check or any
letter accompanying any check or payment as rent be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such amount or pursue any other
remedy available to Landlord. Time is of the essence hereof.
SECTION 37: PAYMENTS AFTER TERMINATION
No payment of money by Tenant to Landlord after the termination of this
Lease, in any manner, or after the giving of any notice (other than a demand for
payment of money) by Landlord to Tenant, shall reinstate, continue, or extend
the Term of this Lease or make ineffective any notice given to Tenant prior to
the payment of such money. After the service of notice or the commencement of a
suit or after final judgment granting Landlord possession of the Premises,
Landlord may receive and collect any sums due hereunder, and the payment of such
sums shall not make ineffective any notice, or in any manner affect any pending
suit or any judgment theretofore obtained.
SECTION 38: NO REPRESENTATIONS BY LANDLORD; ENTIRE AGREEMENT
Landlord and Landlord's agents have made no representations, warranties,
agreements or promises with respect to the Building or Premises except such as
are expressed herein. The entire contract of the parties is contained herein,
and there are no promises,
17
agreements, representations, warranties, conditions or understandings, either
oral or written, between them, other than as are herein set forth.
SECTION 39: BROKERAGE
Tenant represents and warrants that Tenant has dealt only with Landlord in
connection with this Lease and that no broker negotiated this Lease or is
entitled to any Commission in connection herewith. The execution and delivery
of this Lease by Landlord shall be conclusive evidence that Landlord has relied
upon the foregoing representation and warranty. Tenant further agrees to
indemnify and hold harmless Landlord with respect to any claim for broker's
commission or similar compensation brought by any person by reason of Tenant's
acts.
SECTION 40: NOTICE
Any notice, demand or communications concerning the Lease by Landlord to
Tenant shall be in writing and shall be deemed sufficiently given or rendered if
delivered personally to Tenant or any of its officers, or three days after
having been sent by United States certified or registered mail, return receipt
requested, postage prepaid, addressed to Tenant at the most current address of
Tenant known by Landlord, or, after commencement of the Term of this Lease, at
the Premises. Any notice, demand or communication concerning this Lease by
Tenant to Landlord shall be in writing and shall be deemed sufficiently given or
rendered if delivered personally to Landlord or its General Manager or three
days after having been sent by certified or registered United States mail,
postage prepaid, addressed to Landlord at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Either party shall have the right to designate in writing,
served as above, a different address to which any notice, demand or
communication is to be mailed.
SECTION 41: AMENDMENT OR MODIFICATION
Except as herein otherwise provided, no amendment, alteration, modification
of or addition to this Lease shall be valid or binding unless expressed in
writing and signed by the party or parties to be bound thereby.
SECTION 42: DEFINITION OF LANDLORD
The term "Landlord" as used in this Lease, so far as covenants or
obligations on the part of Landlord are concerned, shall be limited to mean and
include only the owner or owners at the time in question of the building. In
the event that the interest of the Landlord herein named in the Building is
transferred, whether by sale, lease or sublease, foreclosure, or otherwise, the
named Landlord shall be and hereby is entirely freed and relieved of all
covenants and obligations of Landlord hereunder, and it shall be deemed and
construed without further agreement between the parties or their successors in
interest, or between the parties and any such transferee that such transferee
has assumed and agreed to carry out any and all covenants and obligations of the
named Landlord and is the Landlord hereunder.
SECTION 43: SEVERABILITY
If any clause or provision of this Lease is illegal, invalid or
unenforceable under present or future laws effective during the Term of this
Lease, then and in that event, it is the intention of the parties hereto that
the remainder of this Lease shall not be affected thereby. It is also the
intention of the parties to this Lease that in lieu of each clause or provision
of this Lease that is illegal, invalid or unenforceable, there be added as a
part of this Lease a clause or provision as similar in terms to such illegal,
invalid or unenforceable clause or provision as may be possible and be legal,
valid and enforceable.
SECTION 44: CAPTIONS; GENDER AND NUMBER
The caption of each Section is added as a matter of convenience only and
shall be considered of no effect in the construction of any provision or
provisions of this Lease. The term "Tenant" herein, or any pronoun used in
place thereof, shall include the masculine, feminine, singular, plural,
individuals, partnerships or corporations where applicable.
18
SECTION 45: SUCCESSORS, ASSIGNS; JOINT AND SEVERAL LIABILITY
The covenants, conditions and agreements contained in this Lease shall bind
and inure to the benefit of Landlord and Tenant and their respective heirs,
distributees, executors, administrators, successors, and except as otherwise
provided in this Lease, obligations imposed upon Tenant under this Lease shall
be joint and several.
SECTION 46: GOVERNING LAW
This Lease shall be governed by and interpreted in accordance with the laws
of the State of Colorado.
SECTION 47: LENDERS PROTECTION CLAUSE
Tenant agrees to give each ground lessor and holder of a mortgage, deed of
trust or other encumbrance secured by the real property described in Exhibit A
attached hereto, by certified or registered mail, a Copy of any notice of
default served upon the Landlord, provided that prior to such notice Tenant has
been notified in writing of the address of such ground lessor or holder. Tenant
further agrees that if Landlord shall have failed to cure such default within
the time provided for in this Lease, then all of such ground lessors and holders
shall have an additional thirty (30) days within which to cure such default or
if such default cannot be cured within that time, then in such additional time
as may be necessary if within such thirty (30) days, such ground lessor or
holder has commenced and is diligently pursuing, the remedies necessary to cure
such default (including, but not limited to, commencement of foreclosure
proceedings, if necessary to effect such cure) in which event this Lease shall
not be terminated while such remedies are being so diligently pursued.
EXECUTED as of the date first set forth above.
LANDLORD: TENANT;
MUM II, LLC, HORIZON ORGANIC DAIRY, INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇. /s/ Barnet ▇. ▇▇▇▇▇▇▇▇
------------------------- ----------------------
By ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇. By President
Manager/Member
19
ADDENDUM TO LEASE
THIS Addendum to Lease, dated this 10th day of October, 1996, is between
MUM II, LLC ("Landlord") and Horizon Organic Dairy, Inc. ("Tenant").
WHEREAS, the parties entered into a lease dated October 10, 1996 (the
"Lease"); and
WHEREAS, the parties wish to modify the Lease;
IT IS THEREFORE AGREED AS FOLLOWS:
1. Section 26(c) of the Lease shall be modified so that the Landlord may,
at its discretion, provide the directory in a conspicuous place on the grounds
outside the Building instead of in a conspicuous place in the Building.
2. Section 26(b) of the Lease shall be modified to require the name of the
Building to be the "Horizon Building" during such times as the Lease is in
effect and the Tenant is not in default under the terms of the Lease. Tenant
shall design, acquire at its cost and expense, and pay for the installation of a
sign stating the name of the Building to be placed on the exterior of the
building. Tenant shall submit the design of the sign, as well as drawings
showing where the sign will be placed on an exterior wall of the Building prior
to causing the sign to be constructed. Such sign shall comply with the
requirements of all governmental authorities having jurisdiction over the
building and shall not be installed without the written approval of Landlord,
which approval shall not be unreasonably denied. Upon expiration or earlier
termination of the Lease, Tenant may remove such sign provided that Tenant
repairs all damage caused by such removal.
3. Except as provided in Section 17 of the Lease, subject to the
provisions of paragraph 4 below and only to the extent that Landlord has
insurance coverage to pay the amounts set forth below, Landlord agrees to
indemnify, defend and hold Tenant and its officers, directors, partners and
employees entirely harmless from and against all liabilities, losses, demands,
actions, expenses or claims, including attorney fees and court costs, but
excluding consequential and special damages, for injury to or death of any
person or for damage to any property to the extent that such are determined to
be caused by the misconduct of Landlord, its agents, employees or contractors,
on or about the Premises or Building. None of the events or conditions set
forth in this paragraph shall be deemed a constructive or actual eviction or
entitle Tenant to any abatement or reduction of rent.
4. Notwithstanding the provisions of the preceding paragraph or Section 17
of the Lease, neither Landlord nor Tenant shall be liable to the other for any
damage of the property of the other caused by fire, casualty or the actions of
Landlord, Tenant or their respective employees, agents and contractors, except
to the extent that such property damage is (a) not covered by the property
insurance of the party owning the damaged property required to be maintained
under the terms of this Lease (or if such insurance is not in effect as
required, the amount of such damages which would not have been covered had such
insurance been in effect as required); (b) caused by the intentional actions of
the Landlord or Tenant, as the case may be (i.e. by the indemnifying party); or
(c) are caused by Tenant's installation or removal of alterations or trade
fixtures as provided in the Lease. In connection with the foregoing waiver of
claims, Landlord and Tenant hereby waive any rights of subrogation arising under
their respective property insurance policies.
5. Landlord warrants, represents and covenants to Tenant that the
construction of the improvements to the Premises shall be performed in a good
and ▇▇▇▇▇▇▇ like manner according to the plans and specifications referred to in
Section 9 of the Lease. Only to the extent that (i) Tenant assumes
responsibility of repairing a particular defect and (ii) such defect pertains to
the Premises, Landlord shall assign to Tenant the warranties, representations
and other rights provided by any contractors, workmen, suppliers or others who
perform services or provides goods for constructing such improvements to the
extent of the sums expended by Tenant for such repairs.
20
6. Landlord warrants, represents and covenants that the Premises are zoned
for the use set forth in Section 5 of the Lease and that it is not aware that
there will be noncompliance with any federal, state and local laws, rules,
regulations or ordinances, including without limitation, the Americans with
Disabilities Act or any laws relating to toxic hazardous waste as set forth in
Section 27(b) of the Lease, with respect to the Building and surrounding
property owned by Landlord as of the Commencement Date.
7. All other terms of the Lease not modified herein shall remain in full
force and effect.
IN WITNESS WHEREOF the parties hereto have executed this Addendum to Lease
on the day and year first above written.
HORIZON ORGANIC DAIRY, INC.
By /s/ Barnet ▇. ▇▇▇▇▇▇▇▇
----------------------
President
MUM II, LLC
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., General Manager
21
SECOND ADDENDUM TO LEASE
This Second Addendum to Lease, dated this 10th day of October, 1996, is
between MUM II, LLC ("Landlord") and Horizon Organic Dairy, Inc. ("Tenant").
WHEREAS, the parties entered into a Lease, dated October 10, 1996, (the
"Lease"); and
WHEREAS, in consideration for the mutual promises herein contained, the
parties wish to provide for options to extend the Lease and to provide for
assurances of payment by Tenant to Landlord of all obligations due under the
Lease;
IT IS THEREFORE AGREED AS FOLLOWS:
1. Capitalized Words. All capitalized words not otherwise defined herein
-----------------
shall have the meanings given them under the provisions of the Lease.
2. Grant of First Option. Tenant shall have the option to extend the Term
---------------------
of the Lease for an additional five (5) years (the "First Option"); provided
that Tenant is not in default under the Lease at the time the First Option is
exercised.
3. Exercise of First Option. Tenant may only exercise its First Option by
------------------------
written notice to Landlord served upon Landlord during the time period between
nine (9) months and six (6) months prior to the end of the original Term. Once
such notice is served, the Term of the Lease shall automatically be modified so
that the Term of the Lease shall end at noon on the last day of the calendar
month in which the fifteenth (15th) anniversary of the Commencement Date occurs.
4. Grant of Second Option. Provided that Tenant has exercised its First
----------------------
Option, Tenant shall have the option to extend the Term of the Lease for another
five (5) year additional period (the "Second Option"); provided that Tenant is
not in default under the Lease at the time the Second Option is exercised.
5. Exercise of Second Option. Tenant may only exercise its Second Option
-------------------------
by written notice to Landlord served upon Landlord during the time period
between nine (9) months and six (6) months prior to the end of the Term as
modified by the exercise of the First Option. Once such notice is served, the
Term of the Lease shall be automatically modified so that the Lease will end at
noon on the last day of the calendar month in which the twentieth (20th)
anniversary of the Commencement Date occurs.
6. All Provisions of the Lease to Remain the Same During the Option
----------------------------------------------------------------
Periods. All the provisions of the Lease shall remain the same during the
-------
extended Terms in the event that either or both of the options granted hereunder
are exercised, including, but not limited to, the provisions of the lease
regarding the Escalation Rent.
7. Aurora Dairy Corporation. Landlord and Tenant agree that Landlord may,
in Landlord's sole discretion, lease to Aurora Dairy corporation, a Delaware
corporation, or one of its affiliates ("Aurora") approximately 3,600 square feet
in Suite D (the "Aurora Space") for at least five (5) years and upon such other
terms as Landlord finds satisfactory. Landlord and Aurora may enter directly
into a lease for the Aurora space, in which event, Tenant shall not be entitled
to the use or possession of such space under the terms of the Lease, and
Tenant's rent for Suite D shall be proportionately reduced. Tenant shall have
an option to lease the Aurora Space at the expiration or termination of the
lease between Landlord and Aurora for the Aurora Space at Tenant's then current
per square foot rental rate for Suite A with all terms and conditions the same
as Tenant's then existing Lease. Such option shall be exercised by Tenant on or
before one hundred twenty (120) days prior to the expiration of Landlord's lease
with Aurora, and in the event of an earlier termination of the lease between
Landlord and Aurora for the Aurora Space, within five (5) days of notice that
the Landlord or Aurora intends to terminate the lease prior to its expiration.
Tenant may only exercise such option if the Lease is currently in effect and
Tenant is not in default thereunder. If Tenant exercises its option under this
paragraph, then the Lease shall be amended to include the Aurora Space. If
Tenant does not exercise its option hereunder, then Landlord may lease the
Aurora Space to Aurora or any other party on any terms that Landlord may find
satisfactory to Landlord.
22
8. All other terms of the Lease not modified herein shall remain in full
force and effect.
IN WITNESS WHEREOF the parties hereto have executed this Addendum to Lease
on the day and year first above written.
HORIZON ORGANIC DAIRY, INC.
By /s/ Barnet ▇. ▇▇▇▇▇▇▇▇
----------------------
President
MUM II, LLC
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., General Manager
23
THIRD ADDENDUM TO LEASE
THIS Third Addendum to Lease dated this 31st. day of March , 1997,
----------- ---------
is between MUM II, LLC (Landlord) and Horizon Organic Dairy, Inc. (Tenant).
WHEREAS, the parties entered into a lease dated October 10, 1996, as
amended by the Addendum to Lease and the Second Addendum to Lease (the "Lease");
and
WHEREAS, the parties wish to modify the Lease,
IT IS THEREFORE AGREED AS FOLLOWS:
1. Capitalized Words. All capitalized words not otherwise defined herein
-----------------
shall have the meanings given them under the provisions of the Lease.
2. Base Rent for Suite D. The per square foot Base Rent for Suite D shall
---------------------
be increased to the same per square foot Base Rent as Suite A. The total Base
Rent for the first Lease Year shall be $140,285.36 total, consisting of
---------------
$71,013.43 for Suite A and $69,271.93 for Suite D, except that Tenant
------------ --------------
shall be entitled to a credit of $123.58 per day for each day between the
----------
Commencement Date and October 4, 1997. (Such credit reflects the difference
between the Base Rent rate for finished space and unfinished space.)
3. Finish for Suite D. Suite D shall be finished office space, to be
------------------
finished by Landlord prior to October 4, 1997, as set forth in Exhibits "A" and
"B" attached hereto.
4. No Change in Commencement Date. The Commencement Date shall be the
------------------------------
date set forth in the Lease without reference to whether the finished work set
forth in Section 3 above has been completed. For purposes of Section 30(b) of
the Lease, the Premises shall be considered to be occupied by Tenant so long as
any portion of Suite A is occupied by Tenant.
5. Sublease. Landlord consents to Tenant subleasing the portion of Suite
--------
D shown on Exhibit A to Aurora Dairy Company, Inc. without Tenant paying to
Landlord any portion of the rents received by Tenant from Aurora Dairy Company,
Inc. so long as the sublease is substantially in the form and upon the terms of
the sublease attached hereto as Exhibit "C". Tenant shall remain liable to
Landlord for all of its obligations under the Lease and paragraph 2 hereof
whether or not Aurora Dairy Company, Inc. fulfills its obligations under the
Sublease.
6. Other Terms. All other terms of the Lease not modified herein shall
-----------
remain in full force and effect.
24
IN WITNESS WHEREOF, the parties hereto have executed this Third Addendum to
Lease on the day and year first above written.
HORIZON ORGANIC DAIRY, INC.
By /s/ Barnet ▇. ▇▇▇▇▇▇▇▇
----------------------
MUM II, LLC
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
--------------------------
▇▇▇▇▇▇ ▇. Unkfer, Jr., General Manager
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EXHIBIT A
[Picture of Horizon building on landscaped lot.]
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EXHIBIT B
[Picture of floor plan of the premises.]
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EXHIBIT C
Pg 1 of 2
SUBLEASE FOR HORIZON BUILDING
MONARCH PARK
THIS Sublease is made this _____ day of ______________, 1997, by and
between Horizon Organic Dairy, Inc. ("Landlord") and Aurora Dairy Company, Inc.
("Subtenant").
Section 1. Master Lease. This Sublease is subject and subordinate to the
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Lease dated October 10, 1996, as amended by the Addendum to Lease, Second
Addendum to Lease and Third Addendum to Lease, between MUM, II, LLC ("Owner")
and Landlord ("Master Lease"). Subject to the Sections 2 through 7 below, the
parties intend that Landlord shall sublet the Premises (as defined in Section 2
below) to Subtenant upon the same terms and conditions that Landlord is renting
them from Owner. Except as may be inconsistent with the terms hereof, all
terms, covenants and conditions in the Master Lease shall be applicable to this
Sublease with the same force and effect as if Landlord were the Lessor under the
Master Lease and Subtenant were the Lessee thereunder, and in case of any breach
hereof by Subtenant, Landlord shall have all of the rights against Subtenant as
would be available to the Landlord against the Tenant under the Master Lease, if
such breach were by the Tenant thereunder. Subtenant represents that it has
read and is familiar with the terms of the Master Lease. All capitalized words
not otherwise defined herein shall have the meanings given them under the Master
Lease.
Section 2. Lease of Premises. Landlord hereby leases to Subtenant, and
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Subtenant hereby leases from Landlord, the portion of Suite D of the Horizon
Building shown on Exhibit "A" attached hereto, together with the non-exclusive
right to use the common areas for the purposes for which the common areas are
intended (the "Premises"). The Premises Rentable Area is 3595.2 square feet
which has been determined by Architect's Measurement.
Section 3. Term. The Term of this Sublease shall be from October 4, 1997
--------- ----
to ___ __________ unless sooner terminated or extended pursuant to the terms of
this Sublease.
Section 4. Rent. Subtenant shall pay to Landlord all Base Rent, Operating
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Costs, and Escalation Rent attributable to the Premises under the Master Lease.
Section 5. Preparation of Premises. This Sublease is conditioned upon the
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completion of the improvements described in Exhibit "A" attached hereto, prior
to October 4, 1997.
Section 6. Insurance. Subtenant shall maintain the insurance required
--------- ---------
under the terms of the Master Lease, except that the policy shall name Landlord
and Owner as
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EXHIBIT C
Pg 2 of 2
additional insured parties and shall be with insurance companies and on
forms reasonably satisfactory to both the Landlord and the Owner.
Section 7. Assignment and Subletting. Tenant shall not assign this Lease
--------- -------------------------
or any interest hereto or sublease all or any part of the Premises or suffer or
permit the Premises or any part thereof to be occupied by others without the
prior written consent of Landlord and Owner. Landlord and Owner may each
withhold their consent for any reason in their sole discretion.
IN WITNESS WHEREOF the parties have executed this Sublease on the day and
year first above written.
HORIZON ORGANIC DAIRY, INC.
By
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AURORA DAIRY CORPORATION, INC.
By
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EXHIBIT D
(Attached to and forming a part of Office Lease for Horizon Building)
RULES AND REGULATIONS
The rules and regulations set forth in this Exhibit shall be and
hereby are made a part of the Lease to which they are attached. Whenever the
term "Tenant" is used in these rules and regulations, it shall be deemed to
include Tenant, its employees, agents or invitees. The following rules and
regulations may from time to time be modified by Landlord in the manner set
forth in Article 19 of the Lease.
1. OBSTRUCTION. The sidewalks, entries, passage, corridors, halls,
lobbies, stairways, elevators and other common facilities of the Building shall
be controlled by the Landlord and shall not be obstructed by Tenant or used for
any other purpose other than ingress or egress to and from the Premises. Tenant
shall not place any item in any of such locations, whether or not any such item
constitutes an obstruction, without the prior written consent of the Landlord.
Landlord shall have the right to remove any such obstruction or any such item
without notice to Tenant and at the expense of the Tenant.
2. DELIVERIES. Tenant shall insure that all deliveries of supplies
to the Premises shall be made during the ordinary business hours of the
building. If any person delivering supplies to Tenant damages the elevator or
any other part of the building, Tenant shall pay to landlord upon demand the
amount require to repair such damage.
3. MOVING. If Tenant's movers damage the elevator or an other part
of the Building, Tenant shall pay to Landlord upon demand the amount required to
repair such damage.
4. HEAVY ARTICLES. Tenant shall not place a load upon any floor of
the Premises exceeding 50 lbs. of live load per square foot. Tenant will pay the
fees of the structural engineer of the Building if structural engineering advice
is necessary in planning the positioning of heavy loads. Business machines and
mechanical equipment shall be placed and maintained by Tenant at Tenant's
expanse in settings sufficient to absorb and prevent vibration, noise and
annoyance. Safes and other heavy equipment, the weight of which will not
constitute a hazard or damage the Building or its equipment, shall be moved
into, from and about the Building only during such hours and in such manner as
shall be prescribed by Landlord.
5. NUISANCE. Tenant shall not do or permit anything to be done in
the Premises, or bring or keep anything therein which would in any way
constitute a nuisance or waste, obstruct or interfere with the rights of other
tenants of the Building, or in any way injure or annoy them, or conflict with
the laws relating to fire, or with any
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regulations of the fire department, or with any insurance policy upon the
Building or any part thereof, or conflict with any of the rules and ordinances
of any governmental authority having Jurisdiction over the Building. Tenant
shall not cause or permit any odors of cooking or other processes, or any
unusual or other objectionable odors, to emanate from the Premises.
6. PASS KEY. The Janitor of the Building may at all times keep a
pass key to the Premises, and he and other agents of the Landlord shall at all
times be allowed admittance to the Premises, with reasonable notice given to
Tenant.
7. LOCKS AND KEYS FOR PREMISES. No additional lock or locks shall be
placed by Tenant on any door in the Building and no existing lock shall be
changed unless written consent of the Landlord shall first have been obtained.
A reasonable number of keys to the Premises and to the toilet rooms, if locked
by Landlord, will be furnished by Landlord and Tenant shall not have any
duplicate keys made. At the termination of this tenancy, Tenant shall promptly
return to Landlord all keys to offices and toilet rooms.
8. USE OF THE WATER FIXTURES. Water closets and other water fixtures
shall not be used for any purpose other than that for which they are intended,
and any damage resulting to such fixtures from misuse on the part of the Tenant
shall be paid for by Tenant.
9. NO ANIMALS, EXCESSIVE NOISE. No animals shall be allowed in the
offices, halls, corridors and elevators in the Building, except guide dogs for
the sight or hearing impaired. No person shall disturb the occupants of this or
adjoining buildings or space by the use of any radio or musical instrument or by
the making of loud or improper noises.
10. BICYCLES. Bicycles or other vehicles shall not be permitted
anywhere inside or on the sidewalks outside of the Building, except in those
areas designated by Landlord for bicycle parking.
11. TRASH. Tenant shall not allow anything to be placed on the
outside of the Building, nor shall anything be thrown by Tenant out of the
windows or doors, or down the corridors, elevator shafts or ventilating ducts or
shafts of the Building. All trash shall be placed in receptacles provided by
Tenant on the Premises or in any receptacles provided by Landlord for the
Building.
12. WINDOWS. Levelor style window coverings shall be installed by
Landlord and no awnings shall be placed over the windows without Landlord's
prior written consent. Tenant agrees to abide by Landlord's rules with respect
to maintaining uniform window coverings at all windows and hallways so that the
Building will present a uniform exterior appearance.
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13. HAZARDOUS OPERATIONS AND ITEMS. Tenant shall not install or operate
any steam or gas engine or boiler, or carry on any mechanical business in the
Premises without Landlord's prior written consent, which consent may be withheld
in Landlord's absolute discretion. The use of oil, gas or flammable liquids for
heating, lighting or any other purpose is expressly prohibited. Tenant shall
not bring or permit to be brought or kept in or on the Premises any flammable,
combustible or explosive fluid, material, chemical or substance. Explosives or
other articles deemed extra hazardous shall not be brought into the Building.
14. HOURS FOR REPAIRS, MAINTENANCE AND ALTERATIONS. Any repairs,
maintenance and alterations required or permitted to be done by Tenant under the
Lease shall be done only during the ordinary Business Hours of the Building
unless Landlord shall have first consented to such work being done outside of
such times. If Tenant desires to have such work done by Landlord's employees,
on saturdays or sundays, holidays or weekdays outside of ordinary business
hours, Tenant shall pay the extra cost of such labor.
15. NO DEFACING OF PREMISES. except as permitted below, Tenant shall
not ▇▇▇▇ upon, paint signs upon, cut, drill into, drive nails or screws into, or
in any way deface the walls, ceilings, partitions or floors of the Premises or
of the Building, and any defacement, damage or injury caused by Tenant shall be
paid for by Tenant. Tenant shall be allowed to hang up pictures, plagues and
decorative items not exceeding 8 square feet in size on the walls of the
Premises.
16. CHAIR PADS. During the entire term of this Lease, Tenant shall, at
its expense, install and maintain under all caster chairs a chair pad to protect
the carpeting.
17. CAPTIONS. The caption for each of these rules and regulations is
added as a matter of convenience only and shall be considered of no effect in
the construction of any provision or provisions of these rules.
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