**Exhibit10.21**

 

**AMENDEDAND RESTATED OFFICE LEASE**

 

THIS Amended and Restated Office Lease, dated May 16, 2002, is betweenMUM II, LLC (“Landlord”) and Horizon Organic Dairy, Inc. (“Tenant”).

 

**Recitals:**

 

1.                                       Landlord and Tenant entered into a leasedated October 15, 1996, an Addendum to Lease dated October 10, 1996, a SecondAddendum to Lease, dated October 10, 1996, a Third Addendum to Lease datedMarch 31, 1997, a Fourth Addendum to Lease dated May 14, 1999, and a FifthAddendum to Lease dated June 21, 2000.

 

2.                                       Landlord and Tenant wish to modify the Leaseagain to provide for a remodel of certain space not currently occupied byTenant but to be occupied on August 1, 2002; and to delete various obsoleteprovisions; and to restate the Lease as so modified in this Amended andRestated Office Lease.  This Amended andRestated Office Lease is sometimes referred to herein as this “Lease”.  The provisions of this Amended and RestatedOffice Lease were not necessarily in effect since the Commencement Date,especially the Base Rent and Premises terms. Rather, for purposes of this Amended and Restated Office Lease, the rentterms are meant to be effective as of the first day of the current (2001-2002)Lease Year.

 

IT IS THEREFORE AGREED AS FOLLOWS:

 

SECTION I:  ADDITIONAL DEFINEDTERMS

 

In addition to those terms defined in the introductory paragraph ofthis Lease, the following terms shall have the following meanings when used inthis Lease:

 

(a)                                  Architect’s Measurement:  Any measurement of area made by Landlord’sarchitect measuring Usable Area or Rentable Area for all of the space to bemeasured based on the Building floor plans, which measurement shall beconclusive and binding upon both Landlord and Tenant, unless any tenant of theBuilding objects to such measurement within sixty (60) days of notice to Tenantwith the calculation of an Achitect’s Measurement (or in the event ofstructural modification to the Building which results in a change in any areaof any floor, within sixty (60) days of notice to Tenant of the recalculationof an Architect’s Measurement), in which case such measurement shall bepresumptively correct but subject to correction if mistaken.  The sole effect that a correction to anArchitect’s Measurement shall be the calculation of Tenant’s share of theOperation Cost and in no event shall a mistake in an Architect’s Measuremententitle Tenant to any adjustment in the Base Rent or Escalation Rent.  The Architect’s Measurements have been madefrom the outside of exterior walls to the middle of a demising wall betweentenants and to the Common Area side of a wall between a Common Area and atenant’s area.

(b)                                 Base Operating Cost:  An amount equal to $3.38 per square foot ofBuilding Rentable Area per calendar year which represents an estimate of theOperating Cost for the entire 2002 calendar year.

 

(c)                                  Base Rent: The annual amount of rent payable with respect to each Lease Year duringthe term of this Lease payable as set forth in Section 4(a).  Subject to Section 48 below, the amount ofthe Base Rent for the current (September 1, 2001-August 31, 2002) Lease Yearshall be $365,207.76  (6,179.2 squarefeet of warehouse space at $8.17 per square foot; 20,087.8 square feet ofoffice space at $12.74 per square foot; and 5,039.0 square feet of the space shownon Exhibit D at $11.67 per square foot). The amount of the Base Rent for all Lease Years after the current LeaseYear shall be calculated in the manner set forth in Section 4(a).

 

(d)                                 Building: That certain parcel of real property described in Exhibit A attachedhereto, together with the building known as Horizon Building and all otherimprovements located thereon.

 

(e)                                  Building Rentable Area: 39,624 square feetwhich has been determined by Architect’s Measurement.  If from time to time there is a structural modification to theBuilding 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 ofsquare feet as recomputed after such change by Architect’s Measurement.

 

(f)                                    Commencement Date:  The date of the Term of this Lease commenced August 18, 1997.

 

(g)                                 Common Areas:  Those portions of the Building which are made available for thegeneral use in common of tenants of the Building and their employees, agents,and invitees, including but not limited to the areas on individual floorsdevoted to corridors, elevators, lobbies, restrooms and other similarfacilities, 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 percent (15%).

 

(i)                                     Lease Year:

 

(i)            For the First LeaseYear, the period beginning on the Commencement Date (August 18, 1997)  and ending on the last day of the samecalendar month in which the Commencement Date occurred in the next calendaryear (August 31, 1998); and

(ii)                                  For Lease Years after the First Lease Year,the twelve-month period beginning on the next day following the expiration ofthe preceding Lease Year.  If the Termof 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 ofthis 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. Mondaythrough Friday and 9:00 a.m. to 1:00 p.m. on Saturdays, except for any of suchdays which may fall on the holidays of New Year’s Day, Memorial Day,Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

 

(l)                                     Premises: Space on the first and second floorof the Building, as reflected on the floor plan attached to this Lease asExhibit B.

 

(m)                               Premises Rentable Area: 31,306 square feet,which has been determined by Architect’s Measurement.  Premises Rentable Area is the Premises Usable Area plus Tenant’sprorata share (based upon Premises Usable Area to other tenant’s premisesusable area) of the Common Areas.  Iffrom time to time there is a structural modification to the Building whichaffects the area of any floor of the Building which contains the Premises,Premises Rentable Area shall, until further change, mean the number of squarefeet as recomputed after such change by Architect’s Measurement.

 

(n)                                 Premises Usable Area: 28,987.5 square feet,which has been determined by Architect’s Measurement.  If from time to time there is a structural modification to theBuilding which affects the area of any floor to the Building which contains thePremises, Premises Usable Area shall, until further changes, mean the number ofsquare feet as computed after such change by Architect’s Measurement.

 

(o)                                 Security Deposit:  The amount of $47,600.00 (paid at the time of execution of thisLease) to be kept on deposit with Landlord by Tenant in accordance with theprovisions of Section 28.

 

(p)                                 Term: The period beginning at noon on the Commencement Date (August 18, 1997)and ending at noon on the last day of the calendar month in which the tenth(10th) anniversary of the Commencement Date occurs (August 31, 2007).  The Term is subject to extension as providedin Section 35 of this Lease.

 

SECTION 2:  LEASE OF PREMISES

 

Landlord currently leases and shall continue to lease to Tenant, andTenant hereby currently leases and shall continue to lease from Landlord, thePremises, together with the non-exclusive right to use the Common Areas for thepurposes for which the Common Areas are intended.  The Premises are leased on the terms and conditions set forth inthis Lease.  (The Premises haveincreased since the Commencement Date.)

SECTION 3:  TERM

 

The term of this Lease shall be as set forth in Section 1(p), unlesssooner terminated or extended pursuant to the terms of this Lease.

 

SECTION 4:  RENT

 

(a)                                  Tenant shall pay Landlord during each LeaseYear the Base Rent, in equal monthly installments in the amount of one-twelfthof the Base Rent on the Commencement Date and on the first day of eachsucceeding calendar month during the Term of this Lease.  All payments of Base Rent shall be paid inadvance, without notice, set-off or deduction, in lawful money of the UnitedStates, at the address of Landlord set forth in Section 40 of this Lease, or atsuch other place as Landlord may from time to time designate in writing.  The amount of the Base Rent for each LeaseYear after the current Lease Year shall be increased to an amount determined bymultiplying the amount of the Base Rent in effect for the preceding Lease Yearby an adjustment factor which factor shall be calculated in the followingmanner.  Such adjustment shall becalculated by first determining the All Items Consumer Price Index for AllUrban Consumers, CPI-U, Denver (1967 equals 100), as determined by the UnitedStates Department of Labor, Bureau of Labor Statistics as of both the latestdate preceding the date of commencement of the preceding Lease Year and as ofthe latest date possible in the Lease Year just preceding the commencement ofthe next following Lease Year.  Uponreceipt of the second of such index figures, the percentage of the increase, ifany, of the second of such figures over the first, shall be calculatedtherefrom (such percentage increases are herein referred to as the “IndexPercentage Change”).  An annual rentalincrease (herein referred to as Escalation Rent) shall then be computed bymultiplying the Index Percentage Change times the last preceding Base RentAnnual rate as adjusted and set forth in Section 4.  Tenant shall pay one-twelfth (1/12) of the resulting EscalationRent each month during the ensuing Lease Year at the same time Tenant pays theBase Rent.  Such payments shall commenceon the first day of the month following Tenant’s receipt of notice settingforth such increase, which notice shall be sent within sixty (60) days of thebeginning of each new Lease Year.  Thefirst monthly rental payment which includes new Escalation Rent shall alsoinclude the Escalation Rent, if any, for each month in the then current LeaseYear which elapsed prior to Tenant’s receipt of Landlord’s notice.  If there is no increase in Index PercentageChange, there shall be no adjustment, but in no event shall the Base Rent andEscalation Rent payable be less than the Base Rent and Escalation Rent paidduring the preceding Lease Year.  TheBase Rent due hereunder shall be apportioned for any fractional calendar monthsat the beginning and end of the Term of this Lease and any renewals andextensions thereof.

 

(b)                                 If the index specified in Section 4(a) aboveis discontinued in its current form, or if the basis on which it was calculatedshould be revised, an appropriate conversion of the revised index to a commonbase will be made upon conversion factors published by the Bureau of LaborStatistics or upon conversion factors otherwise made available.

(c)                                  In addition to the Base Rent and theEscalation Rent, Tenant shall pay Landlord in monthly installmentssimultaneously with payments of the Base Rent, one-twelfth (1/12th) the BaseOperating Cost times the Premises Rentable Area and 100% of the Operating Costadjustment determined as set forth in Section 6, and such other charges as arerequired by the terms of this Lease to be made by Tenant.  Any such adjustment or change shall bedeemed to be additional rent and shall be payable in the manner provided forthe payment of Base Rent and shall be recoverable as Base Rent, and Landlordshall have all rights against Tenant for default in payment thereof as in thecase of arrears of Base Rent.

 

(d)                                 Landlord acknowledges that Tenant has paidall amounts under the original lease, as amended, that were due and payableprior to the effective date of this Amended and Restated Lease.

 

SECTION 5:  USE

 

(a)                                  Tenant shall use and occupy the Premises forprofessional or business offices and storage incidental thereto and for noother purpose.  Landlord warrants,represents, and covenants that the Premises are zoned for such use.  In addition, for so long as a portion of thePremises includes warehouse space, Tenant may also use the warehouse portion ofthe Premises for warehouse purposes. Tenant shall use the Premises in a careful, safe and proper manner andshall not use or permit the Premises to be used for any purpose prohibited bythe Certificate of Occupancy issued for the Building or the laws of the UnitedStates or the State of Colorado, or the ordinances of the County ofBoulder.  Tenant shall neither do norpermit to be done any act or thing upon the Premises which shall or mightsubject Landlord to any liability or responsibility for injury to any person orpersons or to property by reason of any business or operation carried on uponthe Premises or for any reason.

 

(b)                                 In the event that any official shallhereafter at any time contend or declare by notice, violation, order or in anyother manner whatsoever that the Premises are used for a purpose which is aviolation of any permit, certificate of occupancy, statute, ordinance or otherrequirement of law applicable to the Building or the Premises, Tenant shall,upon five days’ written notice from Landlord, immediately discontinue such useof the Premises.

 

(c)                                  Tenant, at its sole expense, shall complywith all laws, orders and regulations of federal, state, county and municipalauthorities, and with any direction of any public officer or officers, pursuantto law, which shall impose any violation, order or duty upon Landlord or Tenantwith respect to the Premises, or the use or occupation thereof.

SECTION 6:  OPERATING COSTADJUSTMENT

 

(a)                                  If in any calendar year the Operating Cost isgreater than the Base Operating Cost, Tenant shall pay to Landlord asadditional rent an amount equal to such excess multiplied by the PremisesRentable Area.  Any amount payable byTenant to Landlord under this Section 6 shall be paid within thirty (30) daysafter written notice thereof by Landlord. Landlord may, either prior to the beginning of or during any calendaryear, compute a bona fide estimate of Operating Cost for such calendaryear.  Upon receipt of written noticethereof, Tenant shall pay to Landlord, in monthly installments simultaneouslywith payments of Base Rent under Section 4(a), one-twelfth of the product ofsuch estimated Operating Cost and the Premises Rentable Area.  An annual adjustment shall be made betweenthe parties within thirty (30) days after Landlord’s determination of OperatingCost.  Any amounts of excess estimatedOperating Cost which Landlord is required to return may be offset by accruedamounts payable by Tenant to Landlord. If the Term of this Lease ends before the end of a calendar year, anyamount payable by Tenant or Landlord in respect of that year under this Section6 shall be adjusted proportionately on a daily basis utilizing the previousyear’s determination of Operating Costs and the obligation to pay such amountshall survive the expiration or earlier termination of this Lease.  In no event shall Landlord be required tomake any payment or refund to Tenant if in any calendar year the Operating Costis less than the Base Operating Cost.

 

(b)                                 As used in this Lease, “Operating Cost” meansan amount per square foot of Building Rentable Area per calendar yeardetermined as set forth below (projected to an annual figure for the calendaryear in which the Building is first occupied), which represents the actualOperating Cost for any calendar year during the Term of this Lease.  The Operating Cost (calculated to thenearest cent) shall be determined by Landlord and shall be equal to the sum ofthe following in respect of a calendar year divided by the Building RentableArea:

 

(i)                                     All general and special real estate taxes,special assessments, assessments for improvements, special district orimprovement district assessments, water charges, sewer charges, vault chargesand other ad valorem taxes, rates, levies and assessments payable in respect ofsuch year by Landlord upon or in respect of the Building by any governmental orquasi-governmental authority and all taxes specifically imposed in lieu of anysuch taxes.  If due to a future changein the method of taxation, any franchise, income, profit or other tax shall belevied against Landlord in whole or in part in lieu of any tax which wouldotherwise constitute one of the foregoing taxes or charges or if there shall belevied against Landlord a tax or license fee measured by gross rents, suchfranchise, income, profit or other tax or license fee shall be deemed to be areal estate tax for the purposes hereof. The taxes described in this Section 6(b)(i) shall also include all ofLandlord’s expenses, including, but not limited to, attorney’s fees, incurredby Landlord in any effort to minimize such taxes, whether by contestingproposed increases in assessments or by any other means or proceduresappropriate in the circumstances.

(ii)                                  All costs, charges and expenses payable byLandlord (not directly reimbursed by tenants of the Building or by insuranceproceeds) 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 theexception of the janitorial services for the Premises Rentable Area which shallbe provided and paid for by Tenant, window cleaning services, normalmaintenance and repair of the Building and the Common Areas (including elevatorsand the periodic refurbishing of the Common Areas), heating and airconditioning, landscaping, snow removal, parking area repair and maintenance,insurance (including boiler and machinery, fire and extended coverage, rentaland public liability insurance) and labor costs incurred in the operation ormaintenance of the Building, but excluding in any case renting commissions andcosts of painting or decorating any other tenant’s space.  It is mutually understood and agreed thatTenant shall be responsible directly to the Public Service Co. of Colorado forthe payment of gas and electric utility bills for its Premises Rentable Area.

 

(iii)                               The following expenses and costs shall not beincluded within the “Operating Costs” for the Building: Costs incurred in connectionwith the original construction of the Building or in connection with any majorchange in the Building; costs of alterations or improvements to the premises ofother tenants; depreciation, interest and principal payments on mortgages andother debt costs, if any; costs of correcting major and/or latent defects in,or significant design errors relating to the design, or construction of theBuilding; costs for which the Landlord is reimbursed by any tenant or occupantof the Building, by insurance proceeds or by anyone else; the expense forextraordinary service provided to other tenants of the Building for whichLandlord receives reimbursement; costs associated with the operating of thebusiness of the Landlord as a separate entity, as the same are distinguishedfrom the cost of operating the Building; the wages and benefits of any employeewho does not devote substantially all of his or her employee time to theBuilding, unless such wages and benefits are prorated to reflect time spent onoperating and managing the Building; fines, penalties and interests; anycharges or expenses accrued by Landlord resulting from its own or itsaffiliate’s occupancy of any space in the Building; any recalculation of oradditional Operating Costs actually incurred more than three years prior to theyear in which the Landlord proposes that such costs be included; all items andservices for which the Tenant or other tenant of the Building reimburses theLandlord or which the Landlord provides selectively to one or more of thetenants (other than Tenant) without reimbursement; tax penalties incurred as aresult of the Landlord’s negligence, inability, or unwillingness to makepayments when due; Landlord’s general overhead and general administrativeexpenses, provided nothing herein shall be deemed to prohibit the Landlord fromcharging a reasonable management fee computed in accordance with industrycustom and otherwise subject to the limitations herein; costs (includingreasonable attorney fees) incurred by Landlord due to Landlord’s violation orany tenant’s violation (other than Tenant) of the terms and conditions of anylease of space in the Building; and any other expense which in accordance withgenerally accepted accounting principles, consistently applied, would not normallybe treated as Operating Costs by landlords of comparable buildings, except forexpenses relating to repair or replacement of the roof, paving, and HVACequipment, which shall be included within the “Operating Costs” of theBuilding.

(c)                                  Tenant shall have the right to inspect alldocuments reflecting any part of the Operating Costs and the calculations ofany amount payable under Section 6(a) of this Lease, and Landlord shall explainits calculations of Operating Cost and the amounts due under Section 6(a) onceeach year upon request by Tenant.  IfTenant wishes to dispute the determination of Operating Costs under Section6(b) or the calculation of any amount payable under Section 6(a), Tenant shallgive Landlord written notice of such dispute within ninety (90) days afterreceipt of notice from Landlord of the matter giving rise to the dispute.  If Tenant does not provide Landlord suchnotice within such time, Tenant shall have waived its right to dispute suchdetermination or calculation.  Promptly afterthe giving of such written notice, Landlord shall cause to be made a completeaudit of Landlord’s records relating to the matter in dispute by a nationallyrecognized firm of independent certified public accountants selected byLandlord.  The cost of such audit shallbe borne by Tenant unless such audit discloses an error which overstatedOperating Cost by more than three percent of the amount determined by the auditin which event Landlord shall bear the cost of such audit.  If such audit reveals that the amountpreviously determined by Landlord was incorrect, a correction shall be made andeither Landlord shall promptly return to Tenant any overpayment or Tenant shallpromptly pay to Landlord any underpayment which was based on such incorrectamount.  Notwithstanding the pendency ofany dispute hereunder, Tenant shall make payments based upon Landlord’sdetermination or calculation until such determination or calculation has beenestablished hereunder to be incorrect.

 

SECTION 7:  TAXES

 

(a)                                  Tenant shall pay before delinquency any andall taxes, assessments, license taxes and other charges levied, assessed orimposed and which become payable during the Term of this Lease upon Tenant’soperations at, occupancy of, or conduct of business at the Premises or uponequipment, furniture, appliances, trade fixtures and other personal property ofany kind installed or located at premises, provided, however, Tenant may paysuch amounts after delinquency to the extent that such delay is necessary toTenant’s good faith and diligent contest of such amounts, but only so long asthere is no risk of Tenant having any of its assets foreclosed upon or seizedby the taxing authority.

 

(b)                                 If Tenant shall install or cause Landlord toinstall special tenant improvements such as, but not limited to, privateelevators, escalators, interior staircases or other fixtures and fittings whichcause an increase in the assessed value of the Building, then Tenant shall alsopay as additional rent all the taxes specified in Section 6(b)(i) reasonablyallocable to such extraordinary improvements. If the taxing authorities fail to render a separate tax bill withrespect to such improvements, Landlord shall allocate a reasonable portion ofsuch taxes on the Building to such improvements.

SECTION 8:  QUIET ENJOYMENT

 

Landlord covenants and agrees with Tenant that upon Tenant paying theBase Rent and additional rent hereunder and observing and performing all theterms, covenants and conditions of this Lease on Tenant’s part to be observedand performed, Tenant may peaceably and quietly enjoy the Premises subject,nevertheless, to the terms and conditions of this Lease and to the underlyingmortgages hereinafter mentioned.

 

SECTION 9:  PREPARATION OFPREMISES

 

(a)                                  Landlord shall, prior to August 1, 2002,substantially complete the work in the Premises required to be done by Landlordas specified in Exhibit C attached hereto. Landlord shall not be required to timely complete any of such work whereLandlord’s failure to do so is caused by any delay, interference with orhindrance of such work by Tenant, Tenant’s contractor or any of theiremployees, servants or agents, by any changes in such work requested by Tenantand agreed to by Landlord, or by the failure of Tenant or Tenant’s contractor totimely and properly complete any of Tenant’s work in the Premises.  Any such failure of Landlord shall not makethis Lease void or voidable or alter or affect any of the terms hereof, andTenant shall not be entitled to any abatement of rent therefrom except asprovided in Section 48 below.  Landlordwarrants, represents and covenants to Tenant that the work to be performedpursuant to this Section 9 shall be performed in a good and workman like manneraccording to the plans and specifications referred to in Exhibit C, and exceptto the extent otherwise provided in Exhibit C all materials used for the workset forth in Exhibit C will be new and of equal or better quality than used inthe remainder of the Premises.  Only tothe extent that (i) Tenant assumes responsibility of repairing a particulardefect and (ii) such defect pertains to the Premises, Landlord shall assign toTenant the warranties, representations and other rights provided by anycontractors, workmen, suppliers or others who perform services or providesgoods for constructing such improvements to the extent of the sums expended byTenant for such repairs.  Landlord shallbe responsible for repairs to the improvements set forth on Exhibit C that arenecessitated by design or construction defects to the extent not covered by thecontractor’s warranty.

 

(b)                                 Landlord shall use its reasonable discretionin deciding whether to honor any Tenant request for a change order to the plansand specifications set forth on Exhibit C; otherwise, Landlord shall not berequired to honor any Tenant request for a change order to the plans andspecifications set forth on Exhibit C. In the event Landlord, in Landlord’s reasonable discretion, does agreeto any such change order, Tenant shall pay the cost of such change ordercharged by the contractor as soon as the change order is executed by Landlord.

(c)                                  Upon prior notice to Tenant, Landlord shallbe entitled to change the plans and specifications set forth on Exhibit C tothe extent necessary to comply with applicable law or safety standards or toprevent grossly unreasonable costs.

 

(d)                                 Prior to commencement of the work depicted onExhibit C, Landlord shall deliver to Tenant a copy of its building permit forsuch work.

 

SECTION 10:  ACCEPTANCE OFPREMISES

 

Tenant acknowledges that the Premises and the Building, except for thework to be completed by Landlord as depicted on Exhibit C, are currently ingood and satisfactory condition.  Takingpossession of the areas shown on Exhibit C after Landlord commences the workdescribed in Exhibit C shall be conclusive evidence as against Tenant that thework set forth in Exhibit C was satisfactorily completed by Landlord, subjectto correction by Landlord of punch list items disclosed to Landlord prior toTenant taking possession of such area and latent defects disclosed to Landlordwithin a reasonable time after discovery of same by Tenant.

 

SECTION 11:  ACCESS TO PREMISES

 

Landlord and Landlord’s agents shall have the right to enter thePremises 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 asLandlord may deem necessary or desirable for the safety, improvement orpreservation of the Premises or of other portions of the Building, without thesame constituting an eviction of Tenant in whole or in part or entitling Tenantto any abatement of rent, by reason of loss or interruption of business ofTenant, or otherwise.  If Tenant shallnot be personally present to open and permit an entry into the Premises, at anytime 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, orin an emergency may forcibly enter the Premises, without rendering Landlord orLandlord’s agents liable therefor (provided that during such entry Landlord orLandlord’s agents shall accord reasonable care to Tenant’s property), andwithout in any manner affecting the obligations and covenants of thisLease.  Landlord shall have the right toerect, build, use and maintain unexposed pipes, ducts and conduits in andthrough the Premises.  If an excavationshall be made upon land adjacent to the Building or any part thereof or shallbe authorized to be made, Tenant shall afford to the person causing orauthorized to cause such excavation, license to enter upon the Premises for thepurpose of doing such work as such person shall deem necessary to preserve theBuilding or any part thereof from injury or damage and to support any partthereof by proper foundations without any claim for damages or indemnityagainst 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 theTenant or the Tenant’s business in the course of exercising its rights underthis paragraph.  In the event thatLandlord’s exercise of its rights under this paragraph prevents Tenant fromoperating its business for three or more days (unless such exercise resultsfrom Tenant’s action, breach of this Lease, or negligence).  Tenant shall be entitled to an abatement ofrent until such time that Tenant is able to operate its business on thePremises.  Notwithstanding theforegoing, Landlord and Landlord’s contractor shall have exclusive possessionof the areas depicted on Exhibit C while Landlord is performing the work setforth in Section 9 above or until August 1, 2002 (whichever is later) andaccess to the entire Building to the extent necessary or reasonable for thecompletion of such work.  None ofLandlord’s contractor’s rights to possession set forth above, nor any ofLandlord’s contractor’s construction operations shall constitute an eviction orpartial eviction nor entitle Tenant to any abatement of rent (except asprovided in Section 48 below) despite the fact that the construction activitywill to some extent, interfere with Tenant’s use of the Premises, unless and tothe extent that Tenant is unable to conduct business in  a portion of the Premises outside the areashown on Exhibit C for three successive days or more due to intolerable noiseor other equally disruptive interference by Landlord’s contractor as evidencedby Tenant having to send its employees home, in which case rent shall abateonly for such area where Tenant cannot conduct business and only during thetime business cannot be conducted in such area and Tenant shall be entitled tooffset such abated rental amount against the next due Base Rent payment.  In addition, Landlord’s contractor shallhave the use of Tenant’s electric, gas and water utilities during theconstruction period.  Tenant shall notinterfere with Landlord’s contractor’s construction activities nor attempt togive Landlord’s contractor’s employees or subcontractors directions withrespect to any construction activity.

SECTION 12:  ALTERATIONS BYTENANT

 

(a)                                  Tenant shall make no alterations,decorations, installations, additions or improvements in or to the Premiseswithout first obtaining the written consent of Landlord which consent shall notbe unreasonably withheld.  Tenantunderstands that Landlord’s consent will be conditioned on Tenant’s compliancewith Landlord’s requirements as in effect at the time permission is requested,which requirements will include, but not be limited to Landlord’s approval ofplans, specifications, contractors, insurance, and hours of construction.  Tenant will be required to pay Landlord areasonable fee for supervising Tenant’s contractor and for Landlord’s relatedcosts, such as, but not limited to, trash removal, utilities and elevatoroperators.  Prior to the commencement ofany work in or to the Premises by Tenant’s contractor, Tenant shall on requestdeliver to Landlord certificates issued by applicable insurance companiesevidencing that workmen’s compensation and public liability insurance andproperty damage insurance, all in amounts and with companies, and on formssatisfactory to Landlord, are in force and effect and maintained by allcontractors and subcontractors engaged by Tenant to perform such work.  Each such certificate shall provide that itmay not be cancelled without ten days’ prior written notice to Landlord.

(b)                                 All articles of personal property, and allmovable business and trade fixtures, machinery and equipment, cabinetwork,furniture and movable partitions owned or installed by Tenant at its expense inthe Premises (and with respect to which no credit or allowance was granted toTenant by Landlord) shall remain the property of Tenant and may be removed byTenant at any time, provided that Tenant, at its expense, shall repair anydamage 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 inthe first sentence of this Section 12(b) shall, upon the completion thereof,become the Property of Landlord and shall be surrendered to Landlord upon theexpiration or other termination of the Term of this Lease.  Landlord may elect to require Tenant toremove all or any part of the Property described in the first sentence of thisSection 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 Tenantshall, at its expense, repair any damage to the Building or Premises caused bysuch removal.

 

(c)                                  Subject to the provisions of Section 11 ofthis Lease, Tenant shall be solely responsible for the consequences of Tenant’srepairs and alterations on the Building’s structure and on the operation ofBuilding systems, such as heating, air conditioning, ventilating, electricaland plumbing, whether or not Tenant had received Landlord’s consent to suchrepairs or alterations pursuant to this Section 12.

 

SECTION 13:  REPAIRS

 

(a)                                  Tenant shall take good care of the Premisesand the fixtures and improvements therein, including, but not limited to,carpet, drywall and fixtures (except for the unexposed pipes, ducts andconduits in and through the Premises), and, at its sole cost and expense, makerepairs, restorations or replacements as and when needed to preserve them ingood working order and condition.  IfTenant fails to make any repairs, restorations or replacements required by thisLease, Landlord may (but without any obligation to do so) make such repairs,restorations, or replacements at the expense of Tenant and such expense shallbe due as additional rent.  Tenant shallcomply with all provisions of Sections 12 and 14 of this Lease in connectionwith such repairs, restorations and replacements.

 

(b)                                 Landlord shall make repairs, restorations andreplacements as and when needed to those portions of the Building which are notrequired to be maintained by Tenant or other tenants of the Building in orderto preserve them in good working order and condition.  Landlord shall replace all lamps, tubes and ballasts used in thePremises either after notice from Tenant or as a result of any periodicrelamping program undertaken by Landlord. Such repairs, restorations and replacements shall be included withinOperating Cost unless the need for such repairs, restorations and replacementsresulted from any fault or negligence of Tenant or Tenant’s employees, agentsor invitees, in which event the amount paid for such repairs, restorations andreplacement shall be immediately due from Tenant to Landlord with interest atthe Default Rate from the dates of Landlord’s payments.

(c)                                  There shall be no allowance to Tenant for adiminution of rental value and no liability on the part of Landlord, by reasonof inconvenience, annoyance or injury to, or interruption of business, arisingfrom Landlord, Tenant or others making any repairs, restorations, replacements,alterations, additions or improvements in or to any portion of the Building orthe Premises, or in or to fixtures, appurtenances or equipment thereof or as aresult of other tenants failing to make repairs.

 

SECTION 14:  MECHANIC’S LIENS

 

(a)                                  Tenant shall pay or cause to be paid allcosts for work done by it or caused to be done by it on the Premises of acharacter which will or may result in liens on Landlord’s interest therein andTenant will keep the Premises free and clear of all mechanic’s liens, and otherliens on account of work done for Tenant or persons claiming under it.  Tenant shall indemnify and hold Landlordharmless against any liability, loss, damage, costs or expenses, includingattorney’s fees, on account of any claims of any nature whatsoever, includingclaims of liens of laborers or materialmen or others for work performed for, ormaterials or supplies furnished to Tenant or persons claiming under Tenant.

 

(b)                                 Should any liens be filed or recorded againstthe Premises or any action affecting the title thereto be commenced, Tenantshall give Landlord written notice thereof. Tenant shall thereafter cause such liens to be removed of record withinten days after the filing of the liens. If Tenant shall desire to contest any claim of lien, it shall furnishLandlord with security satisfactory to Landlord of at least 150% of the amountof the claim, plus estimated costs and interest.  For purposes of the preceding sentence, a bond from a suretycompany reasonably satisfactory to Landlord in a form reasonably satisfactoryto Landlord shall be satisfactory security. If a final judgment establishing the validity or existence of a lien forany amount is entered, Tenant shall pay and satisfy the same at once.  If Tenant shall be in default in paying anycharge for which a mechanic’s lien or suit to foreclose the lien has beenrecorded or filed, and shall not have given Landlord security as describedabove, Landlord may (but without being required to do so) pay such lien orclaim and any costs, and the amount so paid, together with reasonableattorney’s fees incurred in connection therewith, shall be immediately due fromTenant to Landlord with interest at the Default Rate from the dates ofLandlord’s payments.

 

(c)                                  At least five days prior to the commencementof any work permitted to be done by persons requested by Tenant on thePremises, Tenant shall notify Landlord of the proposed work and the names andaddresses of the persons supplying labor and materials for the proposed work sothat Landlord may avail itself of the provisions of statutes such as Section38-22-105(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 thePremises at all reasonable times, and shall have the right to post and keepposted thereon notices such as those provided for by Section 38-22-105(2) or totake any further action which Landlord may deem to be proper for the protectionof Landlord’s interest in the Premises.

SECTION 15:  CASUALTY

 

(a)                                  If the Premises, or the Building, shall be sodamaged by fire or other casualty as to render the Premises untenantable, andif such damage shall be so great that an architect selected by Landlord shallcertify in writing to Landlord that the Premises, with the exercise ofreasonable diligence, but without the payment of overtime or other premiumscannot be made tenantable within 180 days from the happening of the fire orother casualty, or if the damage shall be such that Landlord’s architect shallcertify that the Premises can be made tenantable within the 180-day period fromthe happening of the fire or other casualty, but insurance proceeds are notmade available to Landlord for repair of such damage, then Landlord mayterminate this Lease, and in the event such fire or other casualty occurs inthe final one year of the Term or in the final one year of any Option Term,Tenant may terminate this Lease.  Ifneither Landlord nor Tenant terminate 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 Section12(b).  In the event that such repairsare not actually completed within 270 days from the happening of the fire orother casualty, Tenant may terminate this Lease within 280 days from thebeginning of the fire or other casualty. Until such repair is substantially completed, the Base Rent shall be abatedin proportion to the part of the Premises which is unusable by Tenant in thereasonable conduct of its business or profession.  There shall be no abatement of Base Rent by reason of any portionof the Premises being unusable for a period of 15 days or less.  If the damage is due to the fault ornegligence of Tenant or Tenant’s employees, agents or invitees, there shall beno abatement of Base Rent.

 

(b)                                 If the Premises, without the fault ornegligence of Tenant, shall be damaged by fire or other casualty, but not so asto render them untenantable, Landlord shall cause the damage to be repairedwith reasonable promptness and there shall be no abatement of Base Rent or anyother amounts due under this Lease.  Ifthe fire or other casualty causing damage to the Premises or other parts of theBuilding shall have been caused by the Tenant, or Tenant’s employees, agents orinvitees, such damage shall be repaired by Landlord and the amount paid forsuch repair shall be immediately due from Tenant to Landlord with interest atthe Default Rate from the dates of Landlord’s payments.

 

(c)                                  If the Building is so damaged by fire orother casualty (although the Premises are unaffected by such fire or othercasualty, or if affected, can be repaired within 180 days) that Landlord shalldeem it advisable to reconstruct, rebuild or raze the Building, thennotwithstanding anything contained herein to the contrary, this Lease may beterminated by Landlord as of the date of the occurrence of the fire or othercasualty by giving written notice to Tenant of such termination within thirty(30) days after the occurrence of the fire or other casualty.  Within ninety (90) days of such notice oftermination, Tenant shall surrender to Landlord the Premises and all interesttherein under this Lease, and Landlord may re-enter and take possession of thePremises and remove Tenant therefrom. Tenant shall pay Base Rent, and all other sums payable hereunder, dulyapportioned as of the date of such termination of this Lease, and Landlord and Tenantshall be free and discharged from all obligations arising hereunder after thedate of such termination.

SECTION 16:  EMINENT DOMAIN

 

(a)                                  If any portion of the Premises or any portionof the Building shall be taken by right of eminent domain or by condemnation orshall be conveyed in lieu of any such taking, which shall render the Premisesuntenantable, then this Lease, at the option of either Landlord or Tenantexercised by either party giving written notice to the other of suchtermination within thirty (30) days after such taking or conveyance, shallforthwith cease and terminate and the Base Rent and all other sums payablehereunder shall be duly apportioned as of the date of such taking orconveyance.  Tenant thereupon shallsurrender to Landlord the Premises and all interest therein under this Lease,and Landlord may re-enter and take possession of the Premises and remove Tenanttherefrom.  If neither party exercisesthe option to terminate this Lease, Landlord shall make an equitable adjustmentof the Base Rent payable by Tenant for the tenantable portion of the Premises.

 

(b)                                 If any portion of the Building shall be takenor conveyed as described above, which shall not render the Premisesuntenantable, then this Lease, at the option of Landlord exercised by Landlordgiving written notice to Tenant of such termination within thirty (30) daysafter such taking or conveyance, shall forthwith cease and terminate and theBase Rent and all other sums payable hereunder shall be duly apportioned as ofthe date of such taking or conveyance. Tenant thereupon shall surrender to Landlord the Premises and allinterest therein under this Lease, and Landlord may re-enter and takepossession of the Premises and remove Tenant therefrom.  If Landlord does not exercise the option toterminate this Lease, this Lease shall continue in full force and effect.

 

(c)                                  In the event of any taking or conveyancedescribed above, Landlord shall receive the entire award or consideration forthe lands and improvements so taken and Tenant hereby waives all claims againstLandlord and assigns to Landlord all claims against the condemnor for or onaccount of or incident to such taking or conveyance, except that Tenant mayseparately claim and recover from the condemnor, but not from Landlord, thevalue of any personal property of Tenant which Tenant was entitled to removepursuant to this Lease.

 

SECTION 17:  INJURY TO PERSON ORPROPERTY

 

Tenant shall neither hold nor attempt to hold Landlord or Landlord’semployees or agents liable for, and Tenant shall hold harmless and indemnifyLandlord and Landlord’s employees or agents from and against, any and alldemands, claims causes of action, liabilities, or judgments, and any and allexpenses (including, without limitation, attorney’s fees) incurred by Landlordin investigating and resisting the same, arising from any of the following:

(a)                                  Any injury or damage to the person orproperty of Tenant, any other tenant in the Building or to any other personrightfully in the Building for any purpose whatsoever, where the injury ordamage 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 oflaws or ordinances, governmental orders of any kind, or of the provisions ofthis Lease including the rules and regulations provided for in Section 25 ofthis Lease, by any of such persons.

 

(b)                                 Any injury or damage of any nature sufferedby Tenant or Tenant’s employees, agents or invitees, where the injury or damageis caused by the interference with or obstruction of deliveries to the Premisesby any person;

 

(c)                                  Any injury or damage of any nature sufferedby Tenant or Tenant’s employees, agents or invitees where the injury or damageis 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 tothe 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 orsnow or leaks from any part of the Building, or from the pipes, appliances orplumbing works or from the roof, street subsurface or from any other place orby dampness.

 

(e)                                  Except as provided in subsection (a) through(d) above, and subject to the provisions of subsection (f) below, and only tothe extent that Landlord has insurance coverage to pay the amounts set forthbelow, Landlord agrees to indemnify, defend and hold Tenant and its officers,directors, partners, and employees entirely harmless from and against allliabilities, losses, demands, actions, expenses or claims, including attorneyfees and court costs, but excluding consequential and special damages, forinjury to or death of any person or for damage to any property to the extentthat such are determined to be caused by the misconduct of Landlord, itsagents, employees or contractors, on or about the Premises or Building.  None of the events or conditions set forthin this paragraph shall be deemed a constructive or actual eviction or entitleTenant to any abatement or reduction of rent.

 

(f)                                    Notwithstanding the provisions of thepreceding subsections (a) through (e) above, neither Landlord nor Tenant shallbe liable to the other for any damage of the property of the other caused byfire, casualty or the actions of Landlord, Tenant or their respectiveemployees, agents and contractors, except to the extent that such propertydamage is (a) not covered by the property insurance of the party owning thedamaged property required to be maintained under the terms of this Lease (or ifsuch insurance is not in effect as required, the amount of such damages whichwould 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) caused by Tenant’s installation orremoval of alterations or trade fixtures as provided in the Lease.  In connection with the foregoing waiver ofclaims, Landlord and Tenant hereby waive any rights of subrogation arisingunder their respective property insurance policies.

SECTION 18:  INSURANCE

 

(a)                                  At all times during the Term of this Lease,Tenant shall, at its own expense, maintain (i) public liability insurance forclaims for personal injury or death and property damage with limits of not lessthan $500,000.00 combined single limit of liability; and (ii) fire and extendedcoverage insurance on all property described in the first sentence of Section12(b) to the extent of at least 90 percent of their insurable value.  All such policies shall name Landlord as anadditional insured and shall be with insurance companies and on formsreasonably satisfactory to Landlord. Tenant shall, prior to Tenant’s occupancy of the Premises and thereafterat Landlord’s request, furnish Landlord with copies of all insurance to bemaintained by Tenant and with evidence of payment of the premiums thereon.  All such policies shall contain a clause orendorsement to the effect that they may not be terminated or amended during theTerm of this Lease except after ten days’ written notice thereof to Landlord.

 

(b)                                 Tenant shall not use or suffer or permit anyother firm or person to use the Premises for any hazardous purpose or in anymanner that will violate, suspend, void, make inoperative or increase the rateof any policies of insurance of any kind at any time carried by Landlord uponthe Premises or the Building and the fixtures and property therein.  Tenant at Tenant’s sole expense shall complywith all rules, orders, regulations or requirements of the board of fireunderwriters, or any other similar body, having jurisdiction over theBuilding.  Any increase in the cost ofany insurance carried by Landlord attributable to Tenant’s activities on thePremises or Tenant’s failure to perform and observe Tenant’s obligations andcovenants hereunder shall be borne by Tenant and payable to Landlord, from timeto time, on demand.

 

SECTION 19:  SERVICES PROVIDEDBY LANDLORD

 

(a)                                  As long as Tenant is not in defaulthereunder, Landlord shall furnish or cause to be furnished the followingservices:

 

(i)                                     Passenger elevator service for access to andegress from the Premises during ordinary Business Hours and subject to call atall other times (but paid for by Tenant proportionate to its percentage ofBuilding Rentable Area);

 

(ii)                                  Heating or air conditioning; provided thatTenant will be solely responsible to pay for the power to operate such heatingand air conditioning on the Premises as such utilities will be separatelymetered;

(iii)                               Domestic running water for the operation oflavatories, ordinary drinking fountains in the Common Areas of the Building atall times (but paid for by Tenant proportionate to its percentage of BuildingRentable Area;

 

(iv)                              Common Area janitorial services to beprovided (but paid for by Tenant proportionate to its percentage of theBuilding Rentable Area);

 

(v)                                 Electric current for lighting the Premisesand the Common Areas of the Building, for operating ordinary 110-volt portabledesk top office equipment of the type normally used in executive offices, andfor operating 220-volt equipment only as indicated on Exhibit C; providedthat Tenant will be solely responsible to pay the electric bill to operatesuch systems on the Premises as such utilities will be separately metered.

 

(b)                                 Tenant shall not use or consume water for anypurpose other than ordinary lavatory and drinking purposes.  Tenant covenants and agrees that at alltimes its use of electric current shall never exceed the capacity of any wiringinstallation in or to the Premises.

 

(c)                                  Landlord shall not be liable to Tenant or anyother person, for direct or consequential damage, or otherwise, for any failureto supply any heating, air conditioning, elevator, janitor, lighting or otherservice Landlord has agreed to supply during any period when Landlord usesreasonable diligence to supply such services. Landlord reserves the right temporarily to discontinue such services, orany of them, at such times as may be necessary by reason of accident,unavailability of employees, repairs, alterations or improvements, strikes,lockouts, riots, acts of God, governmental preemption in connection with anational or local emergency, any rule, order or regulation of any governmentalagency, conditions of supply and demand, Landlord’s compliance with anyvoluntary or mandatory governmental energy conservation or environmentalprotection program or any other happening beyond the control of Landlord.  Landlord shall not be liable for damages toperson or property or for injury to, or interruption of, business for anydiscontinuance permitted under this Section 19, nor shall such discontinuancein any way be construed as an eviction of Tenant or cause an abatement of rentor operate to release Tenant from any of Tenant’s obligations hereunder.

 

SECTION 20:  ASSIGNMENT ANDSUBLETTING

 

Tenant shall not assign this Lease or any interest herein or sublet allor any part of the Premises, or suffer or permit the Premises or any partthereof to be occupied by others, without the prior written consent of Landlordin 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 conferno rights whatsoever on any party. Tenant will notify Landlord in writing of any interest in this Leasewhich Tenant wishes to assign or any portion of the Premises which Tenantwishes to sublet or permit others to occupy which notice shall specify theterms and conditions of such transaction and shall be accompanied by suchinformation as Landlord may require with respect to the proposed assignee,sublessee or occupant.  Upon receipt ofsuch notice and information, Landlord shall have the right in its discretion,reasonably exercised, to either:

(i)                                     Consent to such assignment, subletting oroccupancy in which event any rent or other consideration realized by Tenantunder any such assignment, subletting or occupancy in excess of the Base Rentand other sums payable hereunder, after amortization of the reasonable costsincurred by Tenant for leasing commissions and leasehold improvements inconnection with such assignment, subletting or occupancy over the term of suchassignment, 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, inwriting.

 

If Landlord does not deliver written notice as to Landlord’s electionof one of the options referred to above within thirty (30) days after itsreceipt of the notice and information from Tenant, Landlord shall be deemed tohave consented to the proposed assignment, subletting or occupancy.  If this Lease or any interest herein isassigned, or if the Premises of any part thereof be sublet or occupied byanybody other than Tenant, with or without the consent of Landlord having firstbeen obtained, Landlord may, after default by Tenant, collect rent from theassignee, subtenant or occupant, and apply the net amount collected to the BaseRent and other sums due hereunder, but no collection shall be deemed a waiverof this covenant, or the acceptance of the assignee, subtenant or occupancy asthe tenant hereof or a release of Tenant from the further performance by Tenantof 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 primaryliability hereunder or from the obligation to obtain the express consent inwriting of Landlord to any further assignment, subletting, or occupancyarrangement.  Landlord acknowledges andconsents to Tenant’s current sublease of a portion of the warehouse space toInterface Communications Company.

 

SECTION 21:  END OF TERM

 

Upon the expiration or other termination of the Term 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 removeall of its movable furniture and other effects and such alterations, additionsand improvements as Landlord shall require Tenant to remove pursuant to Section12.  All movable furniture and othereffects and alterations, additions and improvements not so removed shall conclusivelybe deemed to have been abandoned and may be appropriated, sold, stored,destroyed or otherwise disposed of by Landlord without notice to Tenant or anyother person and without obligation to account therefor; and Tenant shall payLandlord all expenses incurred in connection with such property, including, butnot limited to, the cost of repairing any damage to the Building or Premisescaused by removal of such property. Tenant’s obligation to observe or perform this covenant shall survivethe expiration or other termination of this Lease.

SECTION 22:  HOLDOVER

 

If Tenant or any party claiming through or under Tenant shall remain orcontinue to be in possession of the Premises or any part thereof after thetermination of this Lease, at Landlord’s option, Tenant or such party or bothshall be deemed to be illegally retaining possession or shall be deemed to be amonth to month tenant of the Premises on all the terms and conditions of thisLease, except that the Base Rent shall be 1.5 times the amount of the Base Rentfor the final Lease Year.  Nothingherein contained shall be construed to limit Landlord’s right to obtainpossession of the Premises upon termination of this Lease by unlawful detainerproceedings or otherwise in the event that Landlord does not exerciseLandlord’s option to treat the continued possession by Tenant or any partyclaiming 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 allground and underlying leases and to all mortgages, trust indentures and otherencumbrances which may now or hereafter affect such leases or all or anyportion of the Building and to all renewals, modifications, consolidations,replacements and extensions thereof. This clause shall be self-operative and no further instrument orsubordination shall be required to order to effectuate it.  Tenant covenants and agrees nevertheless, toexecute and deliver promptly any certificate or other assurance in confirmationof such subordination requested by any lessor or mortgagee.

 

(b)                                 Tenant agrees that in the event anyproceedings are brought for the foreclosure of any mortgage to which this Leaseis subject and subordinate or any ground lessor retakes possession of theBuilding, Tenant will attorn to the purchaser at any such foreclosure sale orsuch ground lessor (as the case may be), and will recognize such Purchaser orground lessor as its landlord under this Lease.  Any attornment to a purchaser or ground lessor pursuant to thisSection 23 shall occur automatically, but Tenant shall on request by andwithout cost to Landlord or any purchaser execute and deliver any instrumentsevidencing such attornment.

 

(c)                                  Notwithstanding the foregoing, nosubordination or attornment pursuant to the Provisions of this Section 23 shallbe effective unless prior to the date any party desiring such subordination orattornment obtains title to, or possession of the Building, such party hasacknowledged by written notice to Tenant that this Lease and Tenant’s rightshereunder 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 priorLandlord or;

(ii)                                  Subject to any offsets or defenses whichTenant might have against any prior Landlord; or

 

(iii)                               Bound by any Base Rent which Tenant mighthave paid for more than one month in advance to any prior Landlord.

 

SECTION 24:  STATEMENT OFPERFORMANCE

 

Each party agrees at any time and from time to time, to execute anddeliver to the other, within twenty (20) days following a request therefor, astatement in writing certifying that this Lease is in full force and effect,and unmodified (or specifying any modifications), that the requesting party isnot in default hereunder (or specifying any alleged defaults by the requestingparty), and any further information about this Lease or the Premises which therequesting party may reasonably request. Each party understands that prospective purchasers, mortgagees orlessors of the Building and prospective assignees of this Lease or prospectivesubleassees or occupants of the Premises will rely on such certificates.  Any failure by either party to respond to arequest within twenty (20) days after receipt of the request shall constitutean admission that the matters set forth in the requested certificate are true.

 

SECTION 25:  RULES ANDREGULATIONS

 

The rules and regulations set forth on Exhibit D attached hereto arehereby made a part of this Lease. Landlord may from time to time amend, modify, delete or add new andadditional reasonable rules and regulations for the use, safety, cleanlinessand care of the Premises and the Building, and the comfort, quiet andconvenience of occupants of the Building. Such new or modified rules and regulations shall be effective uponnotice to Tenant from Landlord thereof. Tenant and Tenant’s employees, agents and invitees, shall at all timesobserve faithfully and comply strictly with, the rules and regulations setforth on Exhibit D or as hereinafter modified by Landlord.  In the event of any breach of any rules orregulations set forth on Exhibit D or any amendments or additions thereto,Landlord shall have all remedies in this Lease provided for in the event ofdefault by Tenant and shall, in addition have any remedies available at law orin equity including the right to enjoin any breach of such rules andregulations.  No provision of this Leaseshall be construed to impose upon Landlord any duty or obligation to enforcethe 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 suchtenant’s employees, agents or invitees, or any other person.  To the extent that Landlord enforces therules and regulations for the Building, they shall be enforced uniformly withrespect to all tenants.

 

SECTION 26:  SIGNS; BUILDINGNAME; DIRECTORY

(a)                                  Tenant shall not install, inscribe, paint orotherwise attach any sign, advertisement or notice on any part of the outsideof the Premises or the Building or to any part of the inside of the Premiseswhich is visible from outside of the Premises or in the halls, lobbies, windowsor elevator banks of the Building without the prior consent of Landlord, whichconsent may be withheld in Landlord’s absolute discretion.  Any permitted sign shall comply with therequirements of any governmental authority having jurisdiction over theBuilding.  Tenant shall, at Tenant’sexpense, maintain all permitted signs and shall, on the expiration or earliertermination of this Lease, and at Tenant’s expense, remove all such Permittedsigns and repair any damage caused by such removal.  Landlord shall have the right to remove all non-permitted signswithout notice to Tenant and at the expense of Tenant.

 

(b)                                 The name of the Building shall be the“Horizon Building” during such times as this Lease is in effect and the Tenantis not in default hereunder.  Tenant hasdesigned and acquired at its cost and expense, and paid for the installation ofa sign stating the name of the Building and placed it on the exterior of theBuilding.  Tenant submitted the designof the sign, as well as drawings showing where the sign will be placed on anexterior wall of the Building prior to causing the sign to be constructed.  Such sign was installed with the writtenapproval of Landlord.  Upon expirationor earlier termination of the Lease, Tenant shall remove such sign and repairall damage caused by such removal.

 

(c)                                  Landlord shall provide a directory in aconspicuous place in the Building or on the grounds outside the Building withnames of tenants of the Building. Tenant shall be given one line on the Building directory.  Landlord shall also provide one suiteidentification sign adjacent to the main entry door of the Premises inLandlord’s standard form.  Tenant shallpay Landlord’s reasonable charges for changing such director listing and identificationsign at Tenant’s request.

 

SECTION 27:  INDEMNITY; WAIVER

 

(a)                                  Tenant shall indemnify and hold Landlordharmless 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 ornon-performance by Tenant or Tenant’s employees, agents or invitees of anycovenant or provision of this Lease.

 

(b)                                 INDEMNIFICATION AND LIABILITY OFLANDLORD.  Landlord has no knowledge ofany present violations of applicable federal, state, or local laws andregulations, including all laws related to toxic hazardous waste.  The tenant shall comply with all applicablefederal, state, and local laws and regulations, including but not limited tothe Federal Water Pollution Control Act, 33 U.S.C. §1251, et seq., theOil Pollution Act, 33 U.S.C. §2701 et seq., the Clean Air Act, 42 U.S.C.§7401, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.§6901, et seq., and the Comprehensive Environmental Response, Control,and Liability Act, 42 U.S.C. §9601, et seq., as subsequentlyamended.  The Tenant shall indemnify,defend, and hold the Landlord harmless for any violations incurred under anysuch laws and regulations or for any costs, damages, claims, liabilities, andjudgments arising from past, present, and future acts or judgments arising frompast, present, and future acts or omissions of the Tenant in connection withthe use and/or occupancy authorized by the Lease or other acts of Tenant,agents or assigns.  This indemnificationand hold harmless agreement includes, but is not limited to, acts and omissionsof the Tenant in connection with the use and/or occupancy authorized by thelease which result in:  (1) violationsof the above or any applicable laws and regulations; (2) judgments, claims, ordemands assessed against the Landlord; (3) costs, expenses, and damagesincurred by the Landlord; or (4) other releases or threatened releases on orinto the land, property, and other interest of the Landlord by solid wasteand/or hazardous substance(s).

(c)                                  The Tenant’s indemnification of the Landlordshall also include any damages to life or property arising from the Tenant’soccupancy or use of land, property, and other interest of the Landlord.  The Landlord has no duty to inspectleasehold area or to warn of hazards and, if the Landlord does inspect thearea, it shall incur no additional duty nor liability for identified or non-identifiedhazards.  This covenant may be enforcedby the Landlord in a court of competent jurisdiction.

 

(d)                                 LANDLORD AND TENANT HEREBY MUTUALLY WAIVETRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OFTHEM AGAINST THE OTHER ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAYCONNECTED WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT’SUSE OR OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF INJURY OR DAMAGE.

 

(e)                                  Binding Arbitration.

 

(i)                                     Any controversy, claim or dispute arising outof or relating to this Lease or the breach, termination, enforceability orvalidity thereof, including, without limitation, the determination of the scopeor applicability of this Lease to arbitrate, shall be determined exclusively bybinding arbitration in Boulder County before three arbitrators.  The arbitration shall be governed by theAmerican Arbitration Association under its Commercial Arbitration Rules,provided that at least one member of the panel shall have relevant knowledge ofor experience in the commercial real estate industry.

 

(ii)                                  No provision of, nor the exercise of anyrights under Section 27(e) shall limit the right of any party: (A) to bring aforcible entry and detainer, unlawful detainer or eviction action; (B) toexercise self-help remedies relating to a Landlord lien; or (C) to request andobtain from a court having jurisdiction before, during or after the pendency ofany arbitration, provisional or ancillary remedies and relief, including, butnot limited to, injunctive or mandatory relief or the appointment of areceiver.  The institution andmaintenance of an action or judicial proceeding for, or pursuit of, provisionalor ancillary remedies or exercise of self-help remedies shall not constitute awaiver 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 suchright.

(iii)                               In any such arbitration proceeding, thearbitrator shall not have the power or authority to award punitive damages toany party.  Judgment upon the awardrendered may be entered in any court having jurisdiction.

 

(iv)                              Each of the parties shall, subject to theaward of the arbitrators, pay an equal share of the arbitrators’ fees.  The arbitrators shall have the power, in thereasonable exercise of their discretion, to award recovery of all costs andfees (including attorneys’ fees, administrative fees, arbitrators’ fees andcourt costs) to the prevailing party.

 

SECTION 28:  SECURITY

 

Tenant shall keep on deposit with Landlord at all times during the Termof this Lease, the Security Deposit as security for the payment by Tenant ofthe Base Rent and any other sums due under this Lease and for the faithfulperformance of all the terms, conditions and covenants of this Lease.  If, at any time during the Term of thisLease Tenant shall be in default in the performance of any provision of thisLease, Landlord may, but shall not be required to, use the Security Deposit orso much thereof as necessary, in payment of any Base Rent or any other sums dueunder this Lease in default, in reimbursement of any expense incurred byLandlord or in payment of the damages incurred by Landlord by reason ofTenant’s default.  In such event, Tenantshall, on written demand of Landlord, forthwith remit to Landlord a sufficientamount in cash to restore the Security Deposit to its original amount.  In the event the Security Deposit has notbeen utilized as described above, the Security Deposit, or as much thereof ashas not been utilized for such purposes, shall be refunded to Tenant, withinterest, within sixty (60) days of  theend of the Term, upon full performance of this Lease by Tenant.  Landlord shall have the right to comminglethe Security Deposit with other funds of Landlord; however, Landlord shallquarterly pay Tenant interest on the average daily principal balance of theSecurity Deposit at an annual rate of eight percent (8%).  Landlord shall deliver the Security Deposit(plus any accrued interest) to the purchaser of Landlord’s interest in thePremises in the event such interest be sold, and thereupon, Landlord shall bedischarged from further liability with respect to the Security Deposit.  Notwithstanding the above provisions of thisSection 28, if claims of Landlord exceed the Security Deposit, Tenant shallremain liable for the balance of such claims. Tenant shall not assign or encumber or attempt to assign or encumber theSecurity Deposit provided for herein except that Tenant may assign such depositin the event of a permitted assignment of Tenant’s entire interest in thisLease.

 

SECTION 29: LANDLORD WARRANTIES

 

Landlord warrants, represents, and covenants that it is not aware ofany noncompliance with any federal, state and local laws, rules, regulations orordinances, including, without limitation, the Americans with Disabilities Actor any laws relating to toxic hazardous waste as set forth in Section 27(b) ofthis Lease, with respect to the Building and surrounding property owned byLandlord as of the Commencement Date

SECTION 30:  COMMENCEMENT OF THETERM

 

The Term of this Lease commenced on August 18, 1997.

 

SECTION 31:  EVENTS OF DEFAULT

 

The following shall constitute defaults of Tenant hereunder:

 

(a)                                  Tenant shall fail to pay when due anyinstallment of Base Rent or any other sum payable by Tenant under terms of thisLease, and Tenant shall fail to remedy such failure within five (5) days afterLandlord shall have given Tenant written notice specifying such failure;

 

(b)                                 Tenant shall neglect or fail to perform orobserve any of the covenants herein contained on Tenant’s part to be performedor observed and Tenant shall fail to remedy such default within ten days afterLandlord shall have given to Tenant written notice specifying such neglect orfailure (or within such period, if any, as may be reasonably required to curesuch default if it is of such nature that it cannot be cured within suchten-day period and proceeds with reasonable diligence thereafter to cure suchdefault);

 

(c)                                  This Lease or the Premises or any partthereof shall be taken upon execution or by other process of law directedagainst Tenant, or shall be taken upon or subject to any attachment at theinstance of any creditor of or claimant against Tenant, and such, attachmentshall not be discharged or disposed of within fifteen (15) days after the levythereof;

 

(d)                                 Tenant shall vacate or abandon the Premisesor lock the premises so as to prevent the entry therein of Landlord orLandlord’s representatives as permitted by the terms of this Lease;

 

(e)                                  Tenant shall remove or attempt to remove anygoods or property from the Premises other than in the usual course of business;

 

(f)                                    Tenant shall:

 

(i)                                     Admit in writing Tenant’s inability to payTenant’s debts generally as they become due;

 

(ii)                                  Make an assignment of all or a substantialpart of Tenant’s property for the benefit of creditors;

 

(iii)                               Apply for or consent to or acquiesce in theappointment of a receiver, trustee or liquidator of Tenant or of all or asubstantial part of Tenant’s property or of the Premises or of Tenant’sinterest in this Lease; or

(iv)                              File a voluntary petition in bankruptcy or apetition or an answer seeking reorganization under any bankruptcy or insolvencylaw or an arrangement with creditors, or take advantage of any insolvency lawor file an answer admitting the material allegations of a petition filedagainst Tenant in any bankruptcy, reorganization or insolvency proceedings; or

 

(g)                                 The entry of a court order, judgment ordecree without the application, approval or consent of Tenant, approving apetition seeking reorganization of Tenant under any bankruptcy or insolvencylaw or appointing a receiver, trustee or liquidator of Tenant or of all or asubstantial part of Tenant’s property or of the Premises or of Tenant’sinterest in this Lease, or adjudicating Tenant as bankrupt or insolvent, andsuch order, judgment or decree shall not be vacated, set aside or stayed withinthirty (30) days from the date of entry.

 

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 otherremedies at law or equity, and none of the following, whether or not exercisedby Landlord, shall preclude the exercise of any other right or remedy whetherherein set forth or existing at law or equity:

 

(a)                                  Landlord shall have the right to terminatethis Lease by giving Tenant notice in writing, and upon the giving of suchnotice, this Lease and the Term hereof as well as the right, title and interestof Tenant under this Lease shall wholly cease and expire in the same manner andwith the same force and effect (except as to Tenant’s liability on the datespecified in such notice as if such date were the expiration date of the Termof this Lease) without the necessity of re-entry or any other act on Landlord’spart.  Upon any termination of thisLease, Tenant shall quit and surrender to Landlord the Premises as set forth inSection 21.  If this Lease isterminated, Tenant shall remain liable to Landlord for all Base Rent accruedand unpaid and other sums due hereunder to the date of termination of thisLease and Landlord shall also be entitled to recover from Tenant the worth atthe time of such termination of the excess, if any, of the amount of Base Rentreserved in this Lease for the balance of the Term of this Lease (which shallbe calculated using an interest rate equal to the legal rate of interest thenin effect) in excess of the then reasonable rental value of the Premises forthe same period.  No provision(s) ofthis Lease shall limit or prejudice the right of Landlord to prove for andobtain as liquidated damages by reason of any termination of this Lease, anamount equal to the maximum allowed by any statute or rule of law in effect atthe time when, and governing the proceedings in which, such damages are to beproved, whether or not such amount be greater, equal to, or less than theamount 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 repossessthe same as of Landlord’s former estate and expel Tenant and those claimingthrough or under Tenant, and remove the effects of any and all such persons(forcibly, if necessary) without being deemed guilty of any manner of trespassand without prejudice to any remedies for arrears of rent or preceding breachof covenants.  Should landlord elect tore-enter as provided in this Section 32(b), or should Landlord take possessionpursuant to legal proceedings or pursuant to any notice provided for by law,Landlord may, from time to time, without terminating this Lease, relet thePremises or any part thereof for such term or terms and at such rental orrentals, and upon such other conditions as Landlord may deem advisable, withthe right to make alterations and repairs to the Premises.  No such re-entry or repossession of thePremises by Landlord shall be construed as an election on Landlord’s part toterminate this Lease unless a written notice of termination is given to Tenantby Landlord.  No such re-entry orrepossession of the Premises shall relieve Tenant of its liability andobligation under this Lease, all of which shall survive such re-entry orrepossession.  Upon the occurrence ofsuch re-entry or repossession, Landlord shall be entitled to the amount of themonthly Base Rent, and any other sums, which would be payable hereunder if suchre-entry or repossession had not occurred, less the net proceeds, if any, ofany reletting of the Premises after deducting all of Landlord’s reasonableexpenses 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 suchreletting.  Tenant shall pay such amountto Landlord on the days on which the Base Rent or any other sums due hereunderwould have been payable hereunder if possession had not been retaken.  In no event shall Tenant be entitled toreceive the excess, if any, of net rent collected by Landlord as a result ofsuch reletting over the sums payable by Tenant to Landlord hereunder.

 

(c)                                  If Tenant shall default in making any paymentrequired to be made by Tenant (other than payments of Base Rent) or shalldefault in performing any other obligations of Tenant under this Lease,Landlord may, but shall not be obligated to, make such payment or on behalf ofTenant, expend such sum as may be necessary to perform such obligation.  All sums so expended by Landlord withinterest thereon at the Default Rate shall be repaid by Tenant to Landlord ondemand.  No such payment or expenditureby Landlord shall be deemed a waiver of Tenant’s default nor shall it affectany other remedy of Landlord by reason of such default.

 

(d)                                 If Tenant shall fail to pay when due anyinstallment of Base Rent or other sum due under this Lease (even if suchfailure is timely cured), Landlord may charge and Tenant shall pay upon demandinterest thereon at the Default Rate, and a collection charge (in addition toany reasonable attorney’s fees incurred) equal to five percent (5%) of theamount of said late payment.

 

SECTION 33:  CONTROL OF THECOMMON AREAS

 

Landlord shall have the right at any time to change the arrangement orlocation of, or both, or to regulate or eliminate the use of the Common Areaswithout incurring any liability to Tenant or entitling Tenant to any abatementof rent and such action shall not constitute an actual or constructive evictionof 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 withother tenants of the Building guests or clients those automobile Parking areaswhich are reserved for “visitors only” and which are included within the CommonAreas.

 

SECTION 35: TENANT’S OPTIONS

 

(a)                                  Grant of First Option.  Tenant shall have the option to extend theTerm of this Lease for an additional five (5) years (the “First Option”),provided that Tenant is not in default under this Lease at the time the FirstOption is exercised.

 

(b)                                 Exercise of First Option.  Tenant may only exercise its First Option bywritten notice to Landlord served upon Landlord during the time period betweennine (9) months and six (6) months prior to the end of the original Term.  Once such notice is served, the Term of theLease shall automatically be modified so that the Term of the Lease shall endat noon on the last day of the calendar month in which the fifteenth (15th)anniversary of the Commencement Date occurs.

 

(c)                                  Grant of Second Option.  Provided that Tenant has exercised its FirstOption, Tenant shall have the option to extend the Term of the Lease foranother five (5) year additional period (the “Second Option”), provided thatTenant is not in default under the Lease at the time the Second Option isexercised.

 

(d)                                 Exercise of Second Option.  Tenant may only exercise its Second Optionby written notice to Landlord served upon Landlord during the time periodbetween nine (9) months and six (6) months prior to the end of the Term asmodified by the exercise of the First Option. Once such notice is served, the Term of the Lease shall be automaticallymodified so that the Lease will end at noon on the last day of the calendarmonth in which the twentieth (20th) anniversary of the Commencement Dateoccurs.

 

(e)                                  All Provisions of the Lease to Remain theSame During the Option Periods.  All theprovisions of the Lease shall remain the same during the extended Terms in theevent that either or both of the options granted hereunder are exercised,including, but not limited to, the provisions of the Lease regarding theEscalation Rent.

 

SECTION 36:  NO IMPLIEDSURRENDER OR WAIVER

The failure of Landlord to seek redress for violation of, or to insistupon the strict performance of, any covenant or condition of this Lease or anyof the rules and regulations set forth in Exhibit D to this Lease or hereafteradopted by Landlord shall not prevent a subsequent act, which would haveoriginally constituted a violation, from having all the force and effect of anoriginal violation.  If it should benecessary or proper for Landlord to bring any action under this Lease or toplace this Lease with any attorney for the enforcement of any of Landlord’srights hereunder, then Tenant agrees to pay to Landlord reasonable attorney’sfees.  The receipt by Landlord of anysums due hereunder with knowledge of the breach of any covenant of this Leaseshall not be deemed a waiver of such breach. The failure of Landlord to enforce any of the rules and regulations setforth in Exhibit D, or hereafter adopted, against Tenant or any other tenant inthe Building shall not be deemed a waiver of such rules and regulations or anypart thereof.  No provisions of thisLease shall be deemed to have been waived by Landlord unless such waiver is inwriting signed by Landlord.  No act orthing done by Landlord or Landlord’s agents during the Term of this Lease shallbe deemed an acceptance of a surrender of the Premises, and no agreement toaccept such surrender shall be valid unless in writing signed by Landlord.  No employees of Landlord or of Landlord’sagents shall have any power to accept the keys of the Premises prior to thetermination of this Lease.  The deliveryof keys to any employee of Landlord, or of Landlord’s agents, shall not operateas a termination of this Lease or a surrender of the Premises.  No payment by Tenant, or receipt byLandlord, of a lesser amount than any sums due hereunder, shall be deemed to beother than on account of the earliest stipulated amount, nor shall anyendorsement or statement on any check or any letter accompanying any check orpayment as rent be deemed an accord and satisfaction, and Landlord may acceptsuch check or payment without prejudice to Landlord’s right to recover thebalance of such amount or pursue any other remedy available to Landlord.  Time is of the essence hereof.

 

SECTION 37:  PAYMENTS AFTERTERMINATION

 

No payment of money by Tenant to Landlord after the termination of thisLease, in any manner, or after the giving of any notice (other than a demandfor payment of money) by Landlord to Tenant, shall reinstate, continue, orextend the Term of this Lease or make ineffective any notice given to Tenantprior to the payment of such money. After the service of notice or the commencement of a suit or after finaljudgment granting Landlord possession of the Premises, Landlord may receive andcollect any sums due hereunder, and the payment of such sums shall not makeineffective any notice, or in any manner affect any pending suit or anyjudgment theretofore obtained.

 

SECTION 38:  NO REPRESENTATIONSBY LANDLORD; ENTIRE AGREEMENT

 

Landlord and Landlord’s agents have made no representations,warranties, agreements or promises with respect to the Building or Premisesexcept such as are expressed herein. The entire contract of the parties is contained herein, and there are nopromises, agreements, representations, warranties, conditions orunderstandings, either oral or written, between them, other than as are hereinset forth.  This Amended and RestatedOffice Lease supercedes and replaces the original Lease and all addendathereto.  The amount of Base Rent doesnot cover times before Lease Year 2001-2002, but rather, the Base Rent,together with the credits given in Section 48 that are applicable to the2001-2002 Lease Year, reflect the amount of rent (exclusive of Operating Costs)due during Lease Year 2001-2002.

SECTION 39:  BROKERAGE

 

Tenant represents and warrants that Tenant has dealt only with Landlordin connection with this Lease and that no broker negotiated this Lease or isentitled to any commission in connection herewith, except that  Gary A. Aboussie of The Colorado Group, Inc.who was involved with the negotiation of the terms of the new amendments to theoriginal lease that are set forth in this Amended and Restated Lease.  The execution and delivery of this Lease byLandlord shall be conclusive evidence that Landlord has relied upon theforegoing representation and warranty. Tenant further agrees to indemnify and hold harmless Landlord withrespect to any claim for broker’s commission or similar compensation brought byany person by reason of Tenant’s acts. Tenant will pay any and all commissions or other compensation due to TheColorado Group, Inc., Gary A. Aboussie, and either or both of them.

 

SECTION 40:  NOTICE

 

Any notice, demand or communications concerning the Lease by Landlordto Tenant shall be in writing and shall be deemed sufficiently given orrendered if delivered personally to Tenant or any of its officers, or threedays after having been sent by United States certified or registered mail,return receipt requested, postage prepaid, addressed to Tenant at the mostcurrent address of Tenant known by Landlord or at the Premises.  Any notice, demand or communicationconcerning this Lease by Tenant to Landlord shall be in writing and shall bedeemed sufficiently given or rendered if delivered personally to Landlord orits General Manager three days after having been sent by certified or registeredUnited States mail, postage prepaid, addressed to Landlord at 6676 GunparkDrive, Suite D, Boulder, Colorado 80301. Either party shall have the right to designate in writing, served asabove, a different address to which any notice, demand or communication is tobe mailed.

 

SECTION 41:  AMENDMENT ORMODIFICATION

 

Except as herein otherwise provided, no amendment, alteration,modification of or addition to this Lease shall be valid or binding unlessexpressed in writing and signed by the party or parties to be bound thereby.

 

SECTION 42:  DEFINITION OFLANDLORD

 

The term “Landlord” as used in this Lease, so far as covenants orobligations on the part of Landlord are concerned, shall be limited to mean andinclude only the owner or owners at the time in question of the Building.  In the event that the interest of theLandlord herein named in the Building is transferred, whether by sale, lease orsublease, foreclosure, or otherwise, the named Landlord shall be and hereby isentirely freed and relieved of all covenants and obligations of Landlordhereunder, and it shall be deemed and construed without further agreementbetween the parties or their successors in interest, or between the parties andany such transferee that such transferee has assumed and agreed to carry outany and all covenants and obligations of the named Landlord and is the Landlordhereunder.

SECTION 43:  SEVERABILITY

 

If any clause or provision of this Lease is illegal, invalid orunenforceable under present or future laws effective during the Term of thisLease, then and in that event, it is the intention of the parties hereto thatthe remainder of this Lease shall not be affected thereby.  It is also the intention of the parties tothis Lease that in lieu of each clause or provision of this Lease that isillegal, invalid or unenforceable, there be added as a part of this Lease aclause or provision as similar in terms to such illegal, invalid orunenforceable clause or provision as may be possible and be legal, valid andenforceable.

 

SECTION 44:  CAPTIONS; GENDERAND NUMBER

 

The caption of each Section is added as a matter of convenience onlyand shall be considered of no effect in the construction of any provision orprovisions of this Lease.  The term“Tenant” herein, or any pronoun used in place thereof, shall include themasculine, feminine, singular, plural, individuals, partnerships orcorporations where applicable.

 

SECTION 45:  SUCCESSORS,ASSIGNS; JOINT AND SEVERAL LIABILITY

 

The covenants, conditions and agreements contained in this Lease shallbind and inure to the benefit of Landlord and Tenant and their respectiveheirs, distributees, executors, administrators, successors, and except asotherwise provided in this Lease, the obligations imposed upon Tenant underthis Lease shall be joint and several.

 

SECTION 46:  GOVERNING LAW

 

This Lease shall be governed by and interpreted in accordance with thelaws of the State of Colorado.

 

SECTION 47:  LENDERS PROTECTIONCLAUSE

 

Tenant agrees to give each ground lessor and holder of a mortgage, deedof trust or other encumbrance secured by the real property described in ExhibitA attached hereto, by certified or registered mail, a copy of any notice ofdefault served upon the Landlord, provided that prior to such notice Tenant hasbeen notified in writing of the address of such ground lessor or holder.  Tenant further agrees that if Landlord shallhave 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 curedwithin that time, then in such additional time as may be necessary if withinsuch thirty (30) days, such ground lessor or holder has commenced and isdiligently pursuing, the remedies necessary to cure such default (including,but not limited to, commencement of foreclosure proceedings, if necessary toeffect such cure) in which event this Lease shall not be terminated while suchremedies are being so diligently pursued.

SECTION 48: RENT DURING THE 2001-2002 LEASE YEAR PRIOR TO

COMPLETION OF SECTION 9 WORK AND AUGUST 1, 2002

 

(a)                                  For each day during Lease Year 2001-2002prior to the earlier of:

 

(I)                                    The day Tenant occupies the space depicted onExhibit C; or

 

(ii)                                  The later of (x) substantial completion ofthe work set forth in Section 9 and (y) August 1, 2002;

Tenantshall receive a credit against Base Rent for $161.11.  The date, as calculated above, prior to which Tenant shallreceive such credit is referred to herein as the “Move-In Date”.

 

(b)                                 For purposes of calculating Escalation Rentas of September 1, 2002, the credits set forth in subsection (a) above shall beignored and Base Rent prior to September 1, 2002 shall be deemed to be as setforth in Section I(c) above.

 

(d)                                 For purposes of calculating the amountspayable to Landlord pursuant to Sections 4(c) and Section 6, until the Move-InDate, Tenant shall be considered to have only 26,227 square feet in PremisesRentable Area and Building Rentable Area shall be considered to be 34,585square feet.

 

(e)                                  “Substantial completion” of the work setforth in Section 9 shall mean the stage in the progress of the constructionwhen the space in question is sufficiently complete so that Tenant can occupyit for office use, exclusive of minor matters of mechanical and cosmeticadjustment; provided that, in the event Landlord shall be delayed in completingsuch 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 anychanges in such work requested by Tenant and agreed to by Landlord, thePremises shall be deemed to have been substantially ready for occupancy on thedate on which Landlord would have substantially completed such work had suchdelay not occurred.  The issuance of atemporary or permanent Certificate of Occupancy or Tenant’s taking possessionof the space set forth in Exhibit C shall conclusively establish substantialcompletion, if not already established. Landlord shall deliver written notice to Tenant specifying the date,determined in the manner specified above, on which substantial completionoccurred, which date shall be the date of substantial completion for allpurposes under this Lease.

(f)                                    Except for payment of Base Rent and OperatingExpenses (which are separately addressed in subsections (a) and (d) above),notwithstanding anything to the contrary in this Lease, none of the obligationsof Tenant under this Lease (such as the requirements to maintain and insure)shall apply to the space depicted on Exhibit C until the Move-In Date.

 

SECTION 49: FIRST RIGHT OF OFFER

 

(a)                                  First Right of Offer.  Ifat any time during the Term, Landlord proposes to rent any portion of theBuilding to a party which is not currently a tenant of space within theBuilding or lists any portion of the Building for rent, Landlord shall firstmake a written offer to rent such portion of the Building to Tenant for thesame base rent on which Landlord proposes to rent such portion of the Building.

 

(b)                                 Acceptance of Offer.  TheTenant shall have the right for a period of forty-five (45) days after receiptof the offer from Landlord to elect to rent the portion of the Building setforth in Landlord’s offer.  The makingof a counter-offer by Tenant shall not be deemed a rejection of Landlord’soffer or otherwise shorten Tenant’s forty-five day period to accept Landlord’soffer.  To exercise this right of firstoffer, the Tenant shall give written notice to Landlord within said forty-fiveday period.  Upon exercise of the rightof first offer, this Lease shall be deemed amended to include the additionalpremises set forth in Landlord’s offer and to increase the Base Rent hereunderby the amount set forth in Landlord’s offer. Unless otherwise set forth in the Landlord’s offer, all other terms ofthis Lease, including Escalation Rent, payment of Operating Costs (as expandedto cover the new premises), and the Term (the term for the additional spacewill be coterminous with the term for the existing Premises) shall remain thesame and shall govern the new added premises as though the new premises wereincluded in this Lease.

 

(c)                                  Failure to Accept Offer.  IfTenant does not elect to accept the offer in accordance with Section 49(b)above, then Landlord may rent the portion of the Building offered to Tenant toanother party at a base rental rate not less than 90% of the base rent offeredto Tenant (taking into account free rent periods offered to such other party),or at a price not less than Tenant’s last counter-offer to Landlord, whicheveris greater.  Tenant’s failure to acceptthe offer pursuant to Section 49(b) shall not terminate Tenant’s right of firstoffer, except as to the portion of the Building rented to a third partypursuant to Section 49(c) within six months after the expiration of the 45 dayperiod set forth in Section 49(b), and then only for so long as such thirdparty or its successors occupy that portion of the Building.

 

EXECUTED as of the date first set forth above.

 
| LANDLORD:    |                           | TENANT:                      |                    |
|--------------|--------------------------------|------------------------------|-------------------------|
|         |                           |                         |                    |
| MUM  II, LLC |                           | HORIZON  ORGANIC DAIRY, INC. |
|         |
| By           | /s/ Donald W. Unkefer, Jr.     |                         | By                      | /s/ Tom Briggs |
|         | Donald W. Unkefer,Jr., Manager |                         |                    | Name:  Tom Briggs |
|         |                           |                         |  Title:   CFO |
|              |                                |                              |                         |  |  |  |  |

 

 

 

**EXHIBIT A**

 

**Description of Real Property for Horizon Building**

 

 

Lot 1E

MonarchPark P.U.D. Replat E,

Accordingto the Plat in Planfile P-56 F-3 #2

Countyof Boulder, State of Colorado

 

 

 

**EXHIBIT B**

 

**Floor Plan Showing the Premises**

 

 

 

**EXHIBIT C**

 

**Landlord’s Work**

 

**[Showing area to receive Tenant finish.]**

 

 

 

** **

**EXHIBIT D**

** **

(Attached to and forminga part of Office Lease for Horizon Building)

 

RULES AND REGULATIONS

 

                                Therules and regulations set forth in this Exhibit shall be and hereby are made apart of the Lease to which they are attached. Whenever the term “Tenant” is used in these rules and regulations, itshall be deemed to include Tenant, its employees, agents or invitees.  The following rules and regulations may fromtime to time be modified by Landlord in the manner set forth in Article 19of the Lease.

 

                                1.  OBSTRUCTION.  The sidewalks, entries, passage, corridors, halls, lobbies,stairways, elevators and other common facilities of the Building shall becontrolled by the Landlord and shall not be obstructed by Tenant or used forany other purpose other than ingress or egress to and from the Premises.  Tenant shall not place any item in any ofsuch 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 orany 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 Premisesshall be made during the ordinary business hours of the building.  If any person delivering supplies to Tenantdamages the elevator or any other part of the building, Tenant shall pay tolandlord upon demand the amount required to repair such damage.

 

                                3.  MOVING. If Tenant’s movers damage the elevator or any other part of theBuilding, Tenant shall pay to Landlord upon demand the amount required torepair such damage.

 

                                4.  HEAVY ARTICLES.  Tenant shall not place a load upon any floor of the Premisesexceeding 50 lbs. of live load per square foot.  Tenant will pay the fees of the structural engineer of the Buildingif structural engineering advice is necessary in planning the positioning ofheavy loads.  Business machines andmechanical equipment shall be placed and maintained by Tenant at Tenant’sexpense in settings sufficient to absorb and prevent vibration, noise andannoyance.  Safes and other heavyequipment, the weight of which will not constitute a hazard or damage theBuilding or its equipment, shall be moved into, from and about the Buildingonly 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, orbring or keep anything therein which would in any way constitute a nuisance orwaste, 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 regulations of the fire department, or with any insurance policyupon the Building or any part thereof, or conflict with any of the rules andordinances of any governmental authority having Jurisdiction over theBuilding.  Tenant shall not cause orpermit any odors of cooking or other processes, or any unusual or otherobjectionable odors, to emanate from the Premises.

                                6.  PASS KEY. The Janitor of the Building may at all times keep a pass key to thePremises, and he and other agents of the Landlord shall at all times be allowedadmittance to the Premises, with reasonable notice given to Tenant.

 

                                7.  LOCKS AND KEYS FOR PREMISES.  No additional lock or locks shall be placedby Tenant on any door in the Building and no existing lock shall be changedunless written consent of the Landlord shall first have been obtained.  A reasonable number of keys to the Premisesand to the toilet rooms, if locked by Landlord, will be furnished by Landlordand Tenant shall not have any duplicate keys made.  At the termination of this tenancy, Tenant shall promptly returnto Landlord all keys to offices and toilet rooms.

 

                                8.  USE OF THE WATER FIXTURES.  Water closets and other water fixtures shallnot be used for any purpose other than that for which they are intended, andany damage resulting to such fixtures from misuse on the part of the Tenantshall be paid for by Tenant.

 

                                9.  NO ANIMALS, EXCESS NOISE.  No animals shall be allowed in the offices,halls, corridors and elevators in the Building, except guide dogs for the sightor hearing impaired.  No person shalldisturb the occupants of this or adjoining buildings or space by the use of anyradio 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 onthe sidewalks outside of the Building, except in those areas designated byLandlord for bicycle parking.

 

                                11.  TRASH. Tenant shall not allow anything to be placed on the outside of theBuilding, 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 theBuilding.  All trash shall be placed inreceptacles provided by Tenant on the Premises or in any receptacles providedby Landlord for the Building.

 

                                12.  WINDOWS. Levelor style window coverings shall be installed by Landlord and noawnings shall be placed over the windows without Landlord’s prior writtenconsent.  Tenant agrees to abide byLandlord’s rules with respect to maintaining uniform window coverings at allwindows and hallways so that the Building will present a uniform exteriorappearance.

                                13.  HARDOUS OPERATIONS AND ITEMS.  Tenant shall not install or operate anysteam or gas engine or boiler, or carry on any mechanical business in thePremises without Landlord’s prior written consent, which consent may bewithheld in Landlord’s absolute discretion. The use of oil, gas or flammable liquids for heating, lighting or anyother purpose is expressly prohibited. Tenant shall not bring or permit to be brought or kept in or on thePremises any flammable, combustible or explosive fluid, material, chemical orsubstance.  Explosives or other articlesdeemed extra hazardous shall not be brought into the Building.

 

                                14.           HOURS FOR REPAIRS, MAINTENANCE ANDALTERATIONS.  Any repairs, maintenanceand alterations required or permitted to be done by Tenant under the Leaseshall be done only during the ordinary Business Hours of the Building unlessLandlord shall have first consented to such work being done outside of suchtimes.  If Tenant desires to have suchwork done by Landlord’s employees, on Saturdays or Sundays, holidays orweekdays outside of ordinary business hours, Tenant shall pay the extra cost ofsuch labor.

 

                                15.  NO DEFACING OF PREMISES.  Except as permitted below, Tenant shall notmark upon, paint signs upon, cut, drill into, drive nails or screws into, or inany way deface the walls, ceilings, partitions or floors of the Premises or ofthe Building, and any defacement, damage or injury caused by Tenant shall bepaid for by Tenant.  Tenant shall beallowed to hang up pictures, plaques and decorative items not exceeding 8square 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 thecarpeting.

 

                                17.  CAPTIONS. The caption for each of these rules and regulations is added as a matterof convenience only and shall be considered of no effect in the construction ofany provision or provisions of these rules.