Document:

Exhibit
10.21

 

AMENDED
AND RESTATED OFFICE LEASE

 

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

 

Recitals:

 

1.                                       Landlord and Tenant entered into a lease
dated October 15, 1996, an Addendum to Lease dated October 10, 1996, a Second
Addendum to Lease, dated October 10, 1996, a Third Addendum to Lease dated
March 31, 1997, a Fourth Addendum to Lease dated May 14, 1999, and a Fifth
Addendum to Lease dated June 21, 2000.

 

2.                                       Landlord and Tenant wish to modify the Lease
again to provide for a remodel of certain space not currently occupied by
Tenant but to be occupied on August 1, 2002; and to delete various obsolete
provisions; and to restate the Lease as so modified in this Amended and
Restated Office Lease.  This Amended and
Restated Office Lease is sometimes referred to herein as this “Lease”.  The provisions of this Amended and Restated
Office 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 rent
terms 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 DEFINED
TERMS

 

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

 

(a)                                  Architect’s Measurement:  Any measurement of area made by Landlord’s
architect measuring Usable Area or Rentable Area for all of the space to be
measured based on the Building floor plans, which measurement shall be
conclusive and binding upon both Landlord and Tenant, unless any tenant of the
Building objects to such measurement within sixty (60) days of notice to Tenant
with the calculation of an Achitect’s Measurement (or in the event of
structural modification to the Building which results in a change in any area
of any floor, within sixty (60) days of notice to Tenant of the recalculation
of an Architect’s Measurement), in which case such measurement shall be
presumptively correct but subject to correction if mistaken.  The sole effect that a correction to an
Architect’s Measurement shall be the calculation of Tenant’s share of the
Operation Cost and in no event shall a mistake in an Architect’s Measurement
entitle Tenant to any adjustment in the Base Rent or Escalation Rent.  The Architect’s Measurements have been made
from the outside of exterior walls to the middle of a demising wall between
tenants and to the Common Area side of a wall between a Common Area and a
tenant’s area.

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

 

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

 

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

 

(e)                                  Building Rentable Area: 39,624 square feet
which has been determined by Architect’s Measurement.  If from time to time there is a structural modification to the
Building which results in a change in the area of any floor of the Building,
Building Rentable Area shall, until any further change, mean the number of
square feet as recomputed after such change by Architect’s Measurement.

 

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

 

(g)                                 Common Areas:  Those portions of the Building which are made available for the
general use in common of tenants of the Building and their employees, agents,
and invitees, including but not limited to the areas on individual floors
devoted to corridors, elevators, lobbies, restrooms and other similar
facilities, automobile parking areas which are reserved for “visitors only”,
driveways, entrances and exits, including all plaza areas, loading areas,
pedestrian walkways and ramps, landscaped areas and stairways.

 

(h)                                 Default Rate:  An annual rate of interest equal to fifteen percent (15%).

 

(i)                                     Lease Year:

 

(i)            For the First Lease
Year, the period beginning on the Commencement Date (August 18, 1997)  and ending on the last day of the same
calendar month in which the Commencement Date occurred in the next calendar
year (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 of
the preceding Lease Year.  If the Term
of this Lease shall end prior to the last day of a Lease Year as defined above,
the final Lease Year hereunder shall be deemed to end on the day the Term of
this Lease ends.

 

(j)                                     Operating Cost:  as defined in Section 6(b).

 

(k)                                  Ordinary Business Hours:  The hours of 7:00 a.m. to 6:00 p.m. Monday
through Friday and 9:00 a.m. to 1:00 p.m. on Saturdays, except for any of such
days which may fall on the holidays of New Year’s Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

 

(l)                                     Premises: Space on the first and second floor
of the Building, as reflected on the floor plan attached to this Lease as
Exhibit 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’s
prorata share (based upon Premises Usable Area to other tenant’s premises
usable area) of the Common Areas.  If
from time to time there is a structural modification to the Building which
affects the area of any floor of the Building which contains the Premises,
Premises Rentable Area shall, until further change, mean the number of square
feet as recomputed after such change by Architect’s Measurement.

 

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

 

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

 

(p)                                 Term: 
The period beginning at noon on the Commencement Date (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 provided
in Section 35 of this Lease.

 

SECTION 2:  LEASE OF PREMISES

 

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

SECTION 3:  TERM

 

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

 

SECTION 4:  RENT

 

(a)                                  Tenant shall pay Landlord during each Lease
Year the Base Rent, in equal monthly installments in the amount of one-twelfth
of the Base Rent on the Commencement Date and on the first day of each
succeeding calendar month during the Term of this Lease.  All payments of Base Rent shall be paid in
advance, without notice, set-off or deduction, in lawful money of the United
States, at the address of Landlord set forth in Section 40 of this Lease, or at
such other place as Landlord may from time to time designate in writing.  The amount of the Base Rent for each Lease
Year after the current Lease Year shall be increased to an amount determined by
multiplying the amount of the Base Rent in effect for the preceding Lease Year
by an adjustment factor which factor shall be calculated in the following
manner.  Such adjustment shall be
calculated by first determining the All Items Consumer Price Index for All
Urban Consumers, CPI-U, Denver (1967 equals 100), as determined by the United
States Department of Labor, Bureau of Labor Statistics as of both the latest
date preceding the date of commencement of the preceding Lease Year and as of
the latest date possible in the Lease Year just preceding the commencement of
the next following Lease Year.  Upon
receipt of the second of such index figures, the percentage of the increase, if
any, of the second of such figures over the first, shall be calculated
therefrom (such percentage increases are herein referred to as the “Index
Percentage Change”).  An annual rental
increase (herein referred to as Escalation Rent) shall then be computed by
multiplying the Index Percentage Change times the last preceding Base Rent
Annual rate as adjusted and set forth in Section 4.  Tenant shall pay one-twelfth (1/12) of the resulting Escalation
Rent each month during the ensuing Lease Year at the same time Tenant pays the
Base Rent.  Such payments shall commence
on the first day of the month following Tenant’s receipt of notice setting
forth such increase, which notice shall be sent within sixty (60) days of the
beginning of each new Lease Year.  The
first monthly rental payment which includes new Escalation Rent shall also
include the Escalation Rent, if any, for each month in the then current Lease
Year which elapsed prior to Tenant’s receipt of Landlord’s notice.  If there is no increase in Index Percentage
Change, there shall be no adjustment, but in no event shall the Base Rent and
Escalation Rent payable be less than the Base Rent and Escalation Rent paid
during the preceding Lease Year.  The
Base Rent due hereunder shall be apportioned for any fractional calendar months
at the beginning and end of the Term of this Lease and any renewals and
extensions thereof.

 

(b)                                 If the index specified in Section 4(a) above
is discontinued in its current form, or if the basis on which it was calculated
should be revised, an appropriate conversion of the revised index to a common
base will be made upon conversion factors published by the Bureau of Labor
Statistics or upon conversion factors otherwise made available.

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

 

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

 

SECTION 5:  USE

 

(a)                                  Tenant shall use and occupy the Premises for
professional or business offices and storage incidental thereto and for no
other purpose.  Landlord warrants,
represents, and covenants that the Premises are zoned for such use.  In addition, for so long as a portion of the
Premises includes warehouse space, Tenant may also use the warehouse portion of
the Premises for warehouse purposes. 
Tenant shall use the Premises in a careful, safe and proper manner and
shall not use or permit the Premises to be used for any purpose prohibited by
the Certificate of Occupancy issued for the Building or the laws of the United
States or the State of Colorado, or the ordinances of the County of
Boulder.  Tenant shall neither do nor
permit to be done any act or thing upon the Premises which shall or might
subject Landlord to any liability or responsibility for injury to any person or
persons or to property by reason of any business or operation carried on upon
the Premises or for any reason.

 

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

 

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

SECTION 6:  OPERATING COST
ADJUSTMENT

 

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

 

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

 

(i)                                     All general and special real estate taxes,
special assessments, assessments for improvements, special district or
improvement district assessments, water charges, sewer charges, vault charges
and other ad valorem taxes, rates, levies and assessments payable in respect of
such year by Landlord upon or in respect of the Building by any governmental or
quasi-governmental authority and all taxes specifically imposed in lieu of any
such taxes.  If due to a future change
in the method of taxation, any franchise, income, profit or other tax shall be
levied against Landlord in whole or in part in lieu of any tax which would
otherwise constitute one of the foregoing taxes or charges or if there shall be
levied against Landlord a tax or license fee measured by gross rents, such
franchise, income, profit or other tax or license fee shall be deemed to be a
real estate tax for the purposes hereof. 
The taxes described in this Section 6(b)(i) shall also include all of
Landlord’s expenses, including, but not limited to, attorney’s fees, incurred
by Landlord in any effort to minimize such taxes, whether by contesting
proposed increases in assessments or by any other means or procedures
appropriate in the circumstances.

(ii)                                  All costs, charges and expenses payable by
Landlord (not directly reimbursed by tenants of the Building or by insurance
proceeds) which are directly attributable to the ownership, operation,
maintenance and normal repair of the Building, including, but not limited to,
the cost of utilities, building supplies, janitorial services with the
exception of the janitorial services for the Premises Rentable Area which shall
be provided and paid for by Tenant, window cleaning services, normal
maintenance and repair of the Building and the Common Areas (including elevators
and the periodic refurbishing of the Common Areas), heating and air
conditioning, landscaping, snow removal, parking area repair and maintenance,
insurance (including boiler and machinery, fire and extended coverage, rental
and public liability insurance) and labor costs incurred in the operation or
maintenance of the Building, but excluding in any case renting commissions and
costs of painting or decorating any other tenant’s space.  It is mutually understood and agreed that
Tenant shall be responsible directly to the Public Service Co. of Colorado for
the payment of gas and electric utility bills for its Premises Rentable Area.

 

(iii)                               The following expenses and costs shall not be
included within the “Operating Costs” for the Building: Costs incurred in connection
with the original construction of the Building or in connection with any major
change in the Building; costs of alterations or improvements to the premises of
other tenants; depreciation, interest and principal payments on mortgages and
other debt costs, if any; costs of correcting major and/or latent defects in,
or significant design errors relating to the design, or construction of the
Building; costs for which the Landlord is reimbursed by any tenant or occupant
of the Building, by insurance proceeds or by anyone else; the expense for
extraordinary service provided to other tenants of the Building for which
Landlord receives reimbursement; costs associated with the operating of the
business of the Landlord as a separate entity, as the same are distinguished
from the cost of operating the Building; the wages and benefits of any employee
who does not devote substantially all of his or her employee time to the
Building, unless such wages and benefits are prorated to reflect time spent on
operating and managing the Building; fines, penalties and interests; any
charges or expenses accrued by Landlord resulting from its own or its
affiliate’s occupancy of any space in the Building; any recalculation of or
additional Operating Costs actually incurred more than three years prior to the
year in which the Landlord proposes that such costs be included; all items and
services for which the Tenant or other tenant of the Building reimburses the
Landlord or which the Landlord provides selectively to one or more of the
tenants (other than Tenant) without reimbursement; tax penalties incurred as a
result of the Landlord’s negligence, inability, or unwillingness to make
payments when due; Landlord’s general overhead and general administrative
expenses, provided nothing herein shall be deemed to prohibit the Landlord from
charging a reasonable management fee computed in accordance with industry
custom and otherwise subject to the limitations herein; costs (including
reasonable attorney fees) incurred by Landlord due to Landlord’s violation or
any tenant’s violation (other than Tenant) of the terms and conditions of any
lease of space in the Building; and any other expense which in accordance with
generally accepted accounting principles, consistently applied, would not normally
be treated as Operating Costs by landlords of comparable buildings, except for
expenses relating to repair or replacement of the roof, paving, and HVAC
equipment, which shall be included within the “Operating Costs” of the
Building.

(c)                                  Tenant shall have the right to inspect all
documents reflecting any part of the Operating Costs and the calculations of
any amount payable under Section 6(a) of this Lease, and Landlord shall explain
its calculations of Operating Cost and the amounts due under Section 6(a) once
each year upon request by Tenant.  If
Tenant wishes to dispute the determination of Operating Costs under Section
6(b) or the calculation of any amount payable under Section 6(a), Tenant shall
give Landlord written notice of such dispute within ninety (90) days after
receipt of notice from Landlord of the matter giving rise to the dispute.  If Tenant does not provide Landlord such
notice within such time, Tenant shall have waived its right to dispute such
determination or calculation.  Promptly after
the giving of such written notice, Landlord shall cause to be made a complete
audit of Landlord’s records relating to the matter in dispute by a nationally
recognized firm of independent certified public accountants selected by
Landlord.  The cost of such audit shall
be borne by Tenant unless such audit discloses an error which overstated
Operating Cost by more than three percent of the amount determined by the audit
in which event Landlord shall bear the cost of such audit.  If such audit reveals that the amount
previously determined by Landlord was incorrect, a correction shall be made and
either Landlord shall promptly return to Tenant any overpayment or Tenant shall
promptly pay to Landlord any underpayment which was based on such incorrect
amount.  Notwithstanding the pendency of
any dispute hereunder, Tenant shall make payments based upon Landlord’s
determination or calculation until such determination or calculation has been
established hereunder to be incorrect.

 

SECTION 7:  TAXES

 

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

 

(b)                                 If Tenant shall install or cause Landlord to
install special tenant improvements such as, but not limited to, private
elevators, escalators, interior staircases or other fixtures and fittings which
cause an increase in the assessed value of the Building, then Tenant shall also
pay as additional rent all the taxes specified in Section 6(b)(i) reasonably
allocable to such extraordinary improvements. 
If the taxing authorities fail to render a separate tax bill with
respect to such improvements, Landlord shall allocate a reasonable portion of
such taxes on the Building to such improvements.

SECTION 8:  QUIET ENJOYMENT

 

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

 

SECTION 9:  PREPARATION OF
PREMISES

 

(a)                                  Landlord shall, prior to August 1, 2002,
substantially complete the work in the Premises required to be done by Landlord
as specified in Exhibit C attached hereto. 
Landlord shall not be required to timely complete any of such work where
Landlord’s failure to do so is caused by any delay, interference with or
hindrance of such work by Tenant, Tenant’s contractor or any of their
employees, servants or agents, by any changes in such work requested by Tenant
and agreed to by Landlord, or by the failure of Tenant or Tenant’s contractor to
timely and properly complete any of Tenant’s work in the Premises.  Any such failure of Landlord shall not make
this Lease void or voidable or alter or affect any of the terms hereof, and
Tenant shall not be entitled to any abatement of rent therefrom except as
provided in Section 48 below.  Landlord
warrants, represents and covenants to Tenant that the work to be performed
pursuant to this Section 9 shall be performed in a good and workman like manner
according to the plans and specifications referred to in Exhibit C, and except
to the extent otherwise provided in Exhibit C all materials used for the work
set forth in Exhibit C will be new and of equal or better quality than used in
the remainder of the Premises.  Only to
the extent that (i) Tenant assumes responsibility of repairing a particular
defect and (ii) such defect pertains to the Premises, Landlord shall assign to
Tenant the warranties, representations and other rights provided by any
contractors, workmen, suppliers or others who perform services or provides
goods for constructing such improvements to the extent of the sums expended by
Tenant for such repairs.  Landlord shall
be responsible for repairs to the improvements set forth on Exhibit C that are
necessitated by design or construction defects to the extent not covered by the
contractor’s warranty.

 

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

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

 

(d)                                 Prior to commencement of the work depicted on
Exhibit C, Landlord shall deliver to Tenant a copy of its building permit for
such work.

 

SECTION 10:  ACCEPTANCE OF
PREMISES

 

Tenant acknowledges that the Premises and the Building, except for the
work to be completed by Landlord as depicted on Exhibit C, are currently in
good and satisfactory condition.  Taking
possession of the areas shown on Exhibit C after Landlord commences the work
described in Exhibit C shall be conclusive evidence as against Tenant that the
work set forth in Exhibit C was satisfactorily completed by Landlord, subject
to correction by Landlord of punch list items disclosed to Landlord prior to
Tenant taking possession of such area and latent defects disclosed to Landlord
within 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 the
Premises at all times to examine them, to show them to prospective purchasers,
mortgagees, lessors or lessees, and to make and perform such decorations,
cleaning, maintenance, repairs, alterations, improvements or additions as
Landlord may deem necessary or desirable for the safety, improvement or
preservation of the Premises or of other portions of the Building, without the
same constituting an eviction of Tenant in whole or in part or entitling Tenant
to any abatement of rent, by reason of loss or interruption of business of
Tenant, or otherwise.  If Tenant shall
not be personally present to open and permit an entry into the Premises, at any
time when for any reason an entry therein shall be necessary or permissible,
Landlord or Landlord’s agents may enter the Premises by use of a master key, or
in an emergency may forcibly enter the Premises, without rendering Landlord or
Landlord’s agents liable therefor (provided that during such entry Landlord or
Landlord’s agents shall accord reasonable care to Tenant’s property), and
without in any manner affecting the obligations and covenants of this
Lease.  Landlord shall have the right to
erect, build, use and maintain unexposed pipes, ducts and conduits in and
through the Premises.  If an excavation
shall be made upon land adjacent to the Building or any part thereof or shall
be authorized to be made, Tenant shall afford to the person causing or
authorized to cause such excavation, license to enter upon the Premises for the
purpose of doing such work as such person shall deem necessary to preserve the
Building or any part thereof from injury or damage and to support any part
thereof by proper foundations without any claim for damages or indemnity
against Landlord or diminution or abatement of rent.  Notwithstanding anything to the contrary in this paragraph,
Landlord agrees to use its best efforts not to interfere unreasonably with the
Tenant or the Tenant’s business in the course of exercising its rights under
this paragraph.  In the event that
Landlord’s exercise of its rights under this paragraph prevents Tenant from
operating its business for three or more days (unless such exercise results
from Tenant’s action, breach of this Lease, or negligence).  Tenant shall be entitled to an abatement of
rent until such time that Tenant is able to operate its business on the
Premises.  Notwithstanding the
foregoing, Landlord and Landlord’s contractor shall have exclusive possession
of the areas depicted on Exhibit C while Landlord is performing the work set
forth in Section 9 above or until August 1, 2002 (whichever is later) and
access to the entire Building to the extent necessary or reasonable for the
completion of such work.  None of
Landlord’s contractor’s rights to possession set forth above, nor any of
Landlord’s contractor’s construction operations shall constitute an eviction or
partial eviction nor entitle Tenant to any abatement of rent (except as
provided in Section 48 below) despite the fact that the construction activity
will to some extent, interfere with Tenant’s use of the Premises, unless and to
the extent that Tenant is unable to conduct business in  a portion of the Premises outside the area
shown on Exhibit C for three successive days or more due to intolerable noise
or other equally disruptive interference by Landlord’s contractor as evidenced
by Tenant having to send its employees home, in which case rent shall abate
only for such area where Tenant cannot conduct business and only during the
time business cannot be conducted in such area and Tenant shall be entitled to
offset such abated rental amount against the next due Base Rent payment.  In addition, Landlord’s contractor shall
have the use of Tenant’s electric, gas and water utilities during the
construction period.  Tenant shall not
interfere with Landlord’s contractor’s construction activities nor attempt to
give Landlord’s contractor’s employees or subcontractors directions with
respect to any construction activity.

SECTION 12:  ALTERATIONS BY
TENANT

 

(a)                                  Tenant shall make no alterations,
decorations, installations, additions or improvements in or to the Premises
without first obtaining the written consent of Landlord which consent shall not
be unreasonably withheld.  Tenant
understands that Landlord’s consent will be conditioned on Tenant’s compliance
with Landlord’s requirements as in effect at the time permission is requested,
which requirements will include, but not be limited to Landlord’s approval of
plans, specifications, contractors, insurance, and hours of construction.  Tenant will be required to pay Landlord a
reasonable fee for supervising Tenant’s contractor and for Landlord’s related
costs, such as, but not limited to, trash removal, utilities and elevator
operators.  Prior to the commencement of
any work in or to the Premises by Tenant’s contractor, Tenant shall on request
deliver to Landlord certificates issued by applicable insurance companies
evidencing that workmen’s compensation and public liability insurance and
property damage insurance, all in amounts and with companies, and on forms
satisfactory to Landlord, are in force and effect and maintained by all
contractors and subcontractors engaged by Tenant to perform such work.  Each such certificate shall provide that it
may not be cancelled without ten days’ prior written notice to Landlord.

(b)                                 All articles of personal property, and all
movable business and trade fixtures, machinery and equipment, cabinetwork,
furniture and movable partitions owned or installed by Tenant at its expense in
the Premises (and with respect to which no credit or allowance was granted to
Tenant by Landlord) shall remain the property of Tenant and may be removed by
Tenant at any time, provided that Tenant, at its expense, shall repair any
damage to the Premises or the Building caused by such removal.  All alterations, decorations, installations,
additions or improvements in or to the Premises other than those specified in
the first sentence of this Section 12(b) shall, upon the completion thereof,
become the Property of Landlord and shall be surrendered to Landlord upon the
expiration or other termination of the Term of this Lease.  Landlord may elect to require Tenant to
remove all or any part of the Property described in the first sentence of this
Section 12(b) at the expiration or other termination of the Term of this Lease,
in which event such removal shall be done at Tenant’s expense, and Tenant
shall, at its expense, repair any damage to the Building or Premises caused by
such removal.

 

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

 

SECTION 13:  REPAIRS

 

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

 

(b)                                 Landlord shall make repairs, restorations and
replacements as and when needed to those portions of the Building which are not
required to be maintained by Tenant or other tenants of the Building in order
to preserve them in good working order and condition.  Landlord shall replace all lamps, tubes and ballasts used in the
Premises either after notice from Tenant or as a result of any periodic
relamping program undertaken by Landlord. 
Such repairs, restorations and replacements shall be included within
Operating Cost unless the need for such repairs, restorations and replacements
resulted from any fault or negligence of Tenant or Tenant’s employees, agents
or invitees, in which event the amount paid for such repairs, restorations and
replacement shall be immediately due from Tenant to Landlord with interest at
the Default Rate from the dates of Landlord’s payments.

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

 

SECTION 14:  MECHANIC’S LIENS

 

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

 

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

 

(c)                                  At least five days prior to the commencement
of any work permitted to be done by persons requested by Tenant on the
Premises, Tenant shall notify Landlord of the proposed work and the names and
addresses of the persons supplying labor and materials for the proposed work so
that Landlord may avail itself of the provisions of statutes such as Section
38-22-105(2) of Colorado Revised Statutes (1973, as amended).  During any such work on the Premises,
Landlord and its representatives shall have the right to go upon and inspect the
Premises at all reasonable times, and shall have the right to post and keep
posted thereon notices such as those provided for by Section 38-22-105(2) or to
take any further action which Landlord may deem to be proper for the protection
of Landlord’s interest in the Premises.

SECTION 15:  CASUALTY

 

(a)                                  If the Premises, or the Building, shall be so
damaged by fire or other casualty as to render the Premises untenantable, and
if such damage shall be so great that an architect selected by Landlord shall
certify in writing to Landlord that the Premises, with the exercise of
reasonable diligence, but without the payment of overtime or other premiums
cannot be made tenantable within 180 days from the happening of the fire or
other casualty, or if the damage shall be such that Landlord’s architect shall
certify that the Premises can be made tenantable within the 180-day period from
the happening of the fire or other casualty, but insurance proceeds are not
made available to Landlord for repair of such damage, then Landlord may
terminate this Lease, and in the event such fire or other casualty occurs in
the final one year of the Term or in the final one year of any Option Term,
Tenant may terminate this Lease.  If
neither Landlord 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 Section
12(b).  In the event that such repairs
are not actually completed within 270 days from the happening of the fire or
other casualty, Tenant may terminate this Lease within 280 days from the
beginning of the fire or other casualty. 
Until such repair is substantially completed, the Base Rent shall be abated
in proportion to the part of the Premises which is unusable by Tenant in the
reasonable conduct of its business or profession.  There shall be no abatement of Base Rent by reason of any portion
of the Premises being unusable for a period of 15 days or less.  If the damage is due to the fault or
negligence of Tenant or Tenant’s employees, agents or invitees, there shall be
no abatement of Base Rent.

 

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

 

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

SECTION 16:  EMINENT DOMAIN

 

(a)                                  If any portion of the Premises or any portion
of the Building shall be taken by right of eminent domain or by condemnation or
shall be conveyed in lieu of any such taking, which shall render the Premises
untenantable, then this Lease, at the option of either Landlord or Tenant
exercised by either party giving written notice to the other of such
termination within thirty (30) days after such taking or conveyance, shall
forthwith cease and terminate and the Base Rent and all other sums payable
hereunder shall be duly apportioned as of the date of such taking or
conveyance.  Tenant thereupon shall
surrender to Landlord the Premises and all interest therein under this Lease,
and Landlord may re-enter and take possession of the Premises and remove Tenant
therefrom.  If neither party exercises
the option to terminate this Lease, Landlord shall make an equitable adjustment
of the Base Rent payable by Tenant for the tenantable portion of the Premises.

 

(b)                                 If any portion of the Building shall be taken
or conveyed as described above, which shall not render the Premises
untenantable, then this Lease, at the option of Landlord exercised by Landlord
giving written notice to Tenant of such termination within thirty (30) days
after such taking or conveyance, shall forthwith cease and terminate and the
Base Rent and all other sums payable hereunder shall be duly apportioned as of
the date of such taking or conveyance. 
Tenant thereupon shall surrender to Landlord the Premises and all
interest therein under this Lease, and Landlord may re-enter and take
possession of the Premises and remove Tenant therefrom.  If Landlord does not exercise the option to
terminate this Lease, this Lease shall continue in full force and effect.

 

(c)                                  In the event of any taking or conveyance
described above, Landlord shall receive the entire award or consideration for
the lands and improvements so taken and Tenant hereby waives all claims against
Landlord and assigns to Landlord all claims against the condemnor for or on
account of or incident to such taking or conveyance, except that Tenant may
separately claim and recover from the condemnor, but not from Landlord, the
value of any personal property of Tenant which Tenant was entitled to remove
pursuant to this Lease.

 

SECTION 17:  INJURY TO PERSON OR
PROPERTY

 

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

(a)                                  Any injury or damage to the person or
property of Tenant, any other tenant in the Building or to any other person
rightfully in the Building for any purpose whatsoever, where the injury or
damage is caused by the neglect or fault of Tenant or Tenant’s employees,
agents or invitees, or where such injuries are the result of the violation of
laws or ordinances, governmental orders of any kind, or of the provisions of
this Lease including the rules and regulations provided for in Section 25 of
this Lease, by any of such persons.

 

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

 

(c)                                  Any injury or damage of any nature suffered
by Tenant or Tenant’s employees, agents or invitees where the injury or damage
is caused by the loss or destruction by any person of furniture, inventory,
valuables, files or any other property kept or stored on the Premises; and

 

(d)                                 Any injury or damage not specified above to
the person or property of Tenant, or Tenant’s employees, agents or invitees,
where the injury or damage is caused by any reason other than the negligence,
recklessness or intentional acts of Landlord or Landlord’s employees or agents,
including, but not limited to any injury or damage resulting from fire,
explosion, falling plaster or glass, steam, gas, electricity, water, rain or
snow or leaks from any part of the Building, or from the pipes, appliances or
plumbing works or from the roof, street subsurface or from any other place or
by dampness.

 

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

 

(f)                                    Notwithstanding the provisions of the
preceding subsections (a) through (e) above, neither Landlord nor Tenant shall
be liable to the other for any damage of the property of the other caused by
fire, casualty or the actions of Landlord, Tenant or their respective
employees, agents and contractors, except to the extent that such property
damage is (a) not covered by the property insurance of the party owning the
damaged property required to be maintained under the terms of this Lease (or if
such insurance is not in effect as required, the amount of such damages which
would not have been covered had such insurance been in effect as required); (b)
caused by the intentional actions of the Landlord or Tenant, as the case may be
(i.e. by the indemnifying party); or (c) caused by Tenant’s installation or
removal of alterations or trade fixtures as provided in the Lease.  In connection with the foregoing waiver of
claims, Landlord and Tenant hereby waive any rights of subrogation arising
under their respective property insurance policies.

SECTION 18:  INSURANCE

 

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

 

(b)                                 Tenant shall not use or suffer or permit any
other firm or person to use the Premises for any hazardous purpose or in any
manner that will violate, suspend, void, make inoperative or increase the rate
of any policies of insurance of any kind at any time carried by Landlord upon
the Premises or the Building and the fixtures and property therein.  Tenant at Tenant’s sole expense shall comply
with all rules, orders, regulations or requirements of the board of fire
underwriters, or any other similar body, having jurisdiction over the
Building.  Any increase in the cost of
any insurance carried by Landlord attributable to Tenant’s activities on the
Premises or Tenant’s failure to perform and observe Tenant’s obligations and
covenants hereunder shall be borne by Tenant and payable to Landlord, from time
to time, on demand.

 

SECTION 19:  SERVICES PROVIDED
BY LANDLORD

 

(a)                                  As long as Tenant is not in default
hereunder, Landlord shall furnish or cause to be furnished the following
services:

 

(i)                                     Passenger elevator service for access to and
egress from the Premises during ordinary Business Hours and subject to call at
all other times (but paid for by Tenant proportionate to its percentage of
Building Rentable Area);

 

(ii)                                  Heating or air conditioning; provided that
Tenant will be solely responsible to pay for the power to operate such heating
and air conditioning on the Premises as such utilities will be separately
metered;

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

 

(iv)                              Common Area janitorial services to be
provided (but paid for by Tenant proportionate to its percentage of the
Building Rentable Area);

 

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

 

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

 

(c)                                  Landlord shall not be liable to Tenant or any
other person, for direct or consequential damage, or otherwise, for any failure
to supply any heating, air conditioning, elevator, janitor, lighting or other
service Landlord has agreed to supply during any period when Landlord uses
reasonable diligence to supply such services. 
Landlord reserves the right temporarily to discontinue such services, or
any of them, at such times as 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 a
national or local emergency, any rule, order or regulation of any governmental
agency, conditions of supply and demand, Landlord’s compliance with any
voluntary or mandatory governmental energy conservation or environmental
protection program or any other happening beyond the control of Landlord.  Landlord shall not be liable for damages to
person or property or for injury to, or interruption of, business for any
discontinuance permitted under this Section 19, nor shall such discontinuance
in any way be construed as an eviction of Tenant or cause an abatement of rent
or operate to release Tenant from any of Tenant’s obligations hereunder.

 

SECTION 20:  ASSIGNMENT AND
SUBLETTING

 

Tenant shall not assign this Lease or any interest herein or sublet all
or any part of the Premises, or suffer or permit the Premises or any part
thereof to be occupied by others, without the prior written consent of Landlord
in each instance, which consent shall not be unreasonably withheld.  Any such attempted assignment, subletting,
or occupancy without Landlord’s prior written consent shall be void and shall confer
no rights whatsoever on any party. 
Tenant will notify Landlord in writing of any interest in this Lease
which Tenant wishes to assign or any portion of the Premises which Tenant
wishes to sublet or permit others to occupy which notice shall specify the
terms and conditions of such transaction and shall be accompanied by such
information as Landlord may require with respect to the proposed assignee,
sublessee or occupant.  Upon receipt of
such notice and information, Landlord shall have the right in its discretion,
reasonably exercised, to either:

(i)                                     Consent to such assignment, subletting or
occupancy in which event any rent or other consideration realized by Tenant
under any such assignment, subletting or occupancy in excess of the Base Rent
and other sums payable hereunder, after amortization of the reasonable costs
incurred by Tenant for leasing commissions and leasehold improvements in
connection with such assignment, subletting or occupancy over the term of such
assignment, subletting or occupancy, shall be paid to Landlord by Tenant: or

 

(ii)                                  Refuse to consent to such assignment,
subletting or occupancy, setting forth its reasons for such refusal, in
writing.

 

If Landlord does not deliver written notice as to Landlord’s election
of one of the options referred to above within thirty (30) days after its
receipt of the notice and information from Tenant, Landlord shall be deemed to
have consented to the proposed assignment, subletting or occupancy.  If this Lease or any interest herein is
assigned, or if the Premises of any part thereof be sublet or occupied by
anybody other than Tenant, with or without the consent of Landlord having first
been obtained, Landlord may, after default by Tenant, collect rent from the
assignee, subtenant or occupant, and apply the net amount collected to the Base
Rent and other sums due hereunder, but no collection shall be deemed a waiver
of this covenant, or the acceptance of the assignee, subtenant or occupancy as
the tenant hereof or a release of Tenant from the further performance by Tenant
of covenants on the part of Tenant contained in this Lease.  The consent by Landlord to an assignment,
subletting, or occupancy arrangement shall not relieve Tenant from primary
liability hereunder or from the obligation to obtain the express consent in
writing of Landlord to any further assignment, subletting, or occupancy
arrangement.  Landlord acknowledges and
consents to Tenant’s current sublease of a portion of the warehouse space to
Interface 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 remove
all of its movable furniture and other effects and such alterations, additions
and improvements as Landlord shall require Tenant to remove pursuant to Section
12.  All movable furniture and other
effects and alterations, additions and improvements not so removed shall conclusively
be deemed to have been abandoned and may be appropriated, sold, stored,
destroyed or otherwise disposed of by Landlord without notice to Tenant or any
other person and without obligation to account therefor; and Tenant shall pay
Landlord all expenses incurred in connection with such property, including, but
not limited to, the cost of repairing any damage to the Building or Premises
caused by removal of such property. 
Tenant’s obligation to observe or perform this covenant shall survive
the expiration or other termination of this Lease.

SECTION 22:  HOLDOVER

 

If Tenant or any party claiming through or under Tenant shall remain or
continue to be in possession of the Premises or any part thereof after the
termination of this Lease, at Landlord’s option, Tenant or such party or both
shall be deemed to be illegally retaining possession or shall be deemed to be a
month to month tenant of the Premises on all the terms and conditions of this
Lease, except that the Base Rent shall be 1.5 times the amount of the Base Rent
for the final Lease Year.  Nothing
herein contained shall be construed to limit Landlord’s right to obtain
possession of the Premises upon termination of this Lease by unlawful detainer
proceedings or otherwise in the event that Landlord does not exercise
Landlord’s option to treat the continued possession by Tenant or any party
claiming through or under Tenant as a month to month tenancy.

 

SECTION 23:  SUBORDINATION,
ATTORNMENT AND NON-DISTURBANCE

 

(a)                                  This Lease is subject and subordinate to all
ground and underlying leases and to all mortgages, trust indentures and other
encumbrances which may now or hereafter affect such leases or all or any
portion of the Building and to all renewals, modifications, consolidations,
replacements and extensions thereof. 
This clause shall be self-operative and no further instrument or
subordination shall be required to order to effectuate it.  Tenant covenants and agrees nevertheless, to
execute and deliver promptly any certificate or other assurance in confirmation
of such subordination requested by any lessor or mortgagee.

 

(b)                                 Tenant agrees that in the event any
proceedings are brought for the foreclosure of any mortgage to which this Lease
is subject and subordinate or any ground lessor retakes possession of the
Building, Tenant will attorn to the purchaser at any such foreclosure sale or
such ground lessor (as the case may be), and will recognize such Purchaser or
ground lessor as its landlord under this Lease.  Any attornment to a purchaser or ground lessor pursuant to this
Section 23 shall occur automatically, but Tenant shall on request by and
without cost to Landlord or any purchaser execute and deliver any instruments
evidencing such attornment.

 

(c)                                  Notwithstanding the foregoing, no
subordination or attornment pursuant to the Provisions of this Section 23 shall
be effective unless prior to the date any party desiring such subordination or
attornment obtains title to, or possession of the Building, such party has
acknowledged by written notice to Tenant that this Lease and Tenant’s rights
hereunder shall continue undisturbed while Tenant is not in default hereunder;
except that party shall not be:

 

(i)                                     Liable for any act or omission of any prior
Landlord or;

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

 

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

 

SECTION 24:  STATEMENT OF
PERFORMANCE

 

Each party agrees at any time and from time to time, to execute and
deliver to the other, within twenty (20) days following a request therefor, a
statement in writing certifying that this Lease is in full force and effect,
and unmodified (or specifying any modifications), that the requesting party is
not in default hereunder (or specifying any alleged defaults by the requesting
party), and any further information about this Lease or the Premises which the
requesting party may reasonably request. 
Each party understands that prospective purchasers, mortgagees or
lessors of the Building and prospective assignees of this Lease or prospective
subleassees or occupants of the Premises will rely on such certificates.  Any failure by either party to respond to a
request within twenty (20) days after receipt of the request shall constitute
an admission that the matters set forth in the requested certificate are true.

 

SECTION 25:  RULES AND
REGULATIONS

 

The rules and regulations set forth on Exhibit D attached hereto are
hereby made a part of this Lease. 
Landlord may from time to time amend, modify, delete or add new and
additional reasonable rules and regulations for the use, safety, cleanliness
and care of the Premises and the Building, and the comfort, quiet and
convenience of occupants of the Building. 
Such new or modified rules and regulations shall be effective upon
notice to Tenant from Landlord thereof. 
Tenant and Tenant’s employees, agents and invitees, shall at all times
observe faithfully and comply strictly with, the rules and regulations set
forth on Exhibit D or as hereinafter modified by Landlord.  In the event of any breach of any rules or
regulations set forth on Exhibit D or any amendments or additions thereto,
Landlord shall have all remedies in this Lease provided for in the event of
default by Tenant and shall, in addition have any remedies available at law or
in equity including the right to enjoin any breach of such rules and
regulations.  No provision of this Lease
shall be construed to impose upon Landlord any duty or obligation to enforce
the rules and regulations or terms, covenants or conditions in any other lease,
against any other tenant or person. 
Landlord shall not be liable to Tenant for violation of such rules,
regulations, terms, covenants or conditions by any other tenant, or such
tenant’s employees, agents or invitees, or any other person.  To the extent that Landlord enforces the
rules and regulations for the Building, they shall be enforced uniformly with
respect to all tenants.

 

SECTION 26:  SIGNS; BUILDING
NAME; DIRECTORY

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

 

(b)                                 The name of the Building shall be the
“Horizon Building” during such times as this Lease is in effect and the Tenant
is not in default hereunder.  Tenant has
designed and acquired at its cost and expense, and paid for the installation of
a sign stating the name of the Building and placed it on the exterior of the
Building.  Tenant submitted the design
of the sign, as well as drawings showing where the sign will be placed on an
exterior wall of the Building prior to causing the sign to be constructed.  Such sign was installed with the written
approval of Landlord.  Upon expiration
or earlier termination of the Lease, Tenant shall remove such sign and repair
all damage caused by such removal.

 

(c)                                  Landlord shall provide a directory in a
conspicuous place in the Building or on the grounds outside the Building with
names of tenants of the Building. 
Tenant shall be given one line on the Building directory.  Landlord shall also provide one suite
identification sign adjacent to the main entry door of the Premises in
Landlord’s standard form.  Tenant shall
pay Landlord’s reasonable charges for changing such director listing and identification
sign at Tenant’s request.

 

SECTION 27:  INDEMNITY; WAIVER

 

(a)                                  Tenant shall indemnify and hold Landlord
harmless from any and all demands, claims, causes of action, liabilities,
judgments, fines and expenses (including, without limitation, attorney’s fees)
incurred or suffered by Landlord by reason of any breach, violation or
non-performance by Tenant or Tenant’s employees, agents or invitees of any
covenant or provision of this Lease.

 

(b)                                 INDEMNIFICATION AND LIABILITY OF
LANDLORD.  Landlord has no knowledge of
any present violations of applicable federal, state, or local laws and
regulations, including all laws related to toxic hazardous waste.  The tenant shall comply with all applicable
federal, state, and local laws and regulations, including but not limited to
the Federal Water Pollution Control Act, 33 U.S.C. §1251, et seq., the
Oil 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 subsequently
amended.  The Tenant shall indemnify,
defend, and hold the Landlord harmless for any violations incurred under any
such laws and regulations or for any costs, damages, claims, liabilities, and
judgments arising from past, present, and future acts or judgments arising from
past, present, and future acts or omissions of the Tenant in connection with
the use and/or occupancy authorized by the Lease or other acts of Tenant,
agents or assigns.  This indemnification
and hold harmless agreement includes, but is not limited to, acts and omissions
of the Tenant in connection with the use and/or occupancy authorized by the
lease which result in:  (1) violations
of the above or any applicable laws and regulations; (2) judgments, claims, or
demands assessed against the Landlord; (3) costs, expenses, and damages
incurred by the Landlord; or (4) other releases or threatened releases on or
into the land, property, and other interest of the Landlord by solid waste
and/or hazardous substance(s).

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

 

(d)                                 LANDLORD AND TENANT HEREBY MUTUALLY WAIVE
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF
THEM AGAINST THE OTHER ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT’S
USE OR OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF INJURY OR DAMAGE.

 

(e)                                  Binding Arbitration.

 

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

 

(ii)                                  No provision of, nor the exercise of any
rights under Section 27(e) shall limit the right of any party: (A) to bring a
forcible entry and detainer, unlawful detainer or eviction action; (B) to
exercise self-help remedies relating to a Landlord lien; or (C) to request and
obtain from a court having jurisdiction before, during or after the pendency of
any arbitration, provisional or ancillary remedies and relief, including, but
not limited to, injunctive or mandatory relief or the appointment of a
receiver.  The institution and
maintenance of an action or judicial proceeding for, or pursuit of, provisional
or ancillary remedies or exercise of self-help remedies shall not constitute a
waiver of the right of any party hereto, even if such party is the plaintiff,
to submit the dispute to arbitration if such party would otherwise have such
right.

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

 

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

 

SECTION 28:  SECURITY

 

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

 

SECTION 29: LANDLORD WARRANTIES

 

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

SECTION 30:  COMMENCEMENT OF THE
TERM

 

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 any
installment of Base Rent or any other sum payable by Tenant under terms of this
Lease, and Tenant shall fail to remedy such failure within five (5) days after
Landlord shall have given Tenant written notice specifying such failure;

 

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

 

(c)                                  This Lease or the Premises or any part
thereof shall be taken upon execution or by other process of law directed
against Tenant, or shall be taken upon or subject to any attachment at the
instance of any creditor of or claimant against Tenant, and such, attachment
shall not be discharged or disposed of within fifteen (15) days after the levy
thereof;

 

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

 

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

 

(f)                                    Tenant shall:

 

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

 

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

 

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

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

 

(g)                                 The entry of a court order, judgment or
decree without the application, approval or consent of Tenant, approving a
petition seeking reorganization of Tenant under any bankruptcy or insolvency
law or appointing a receiver, trustee or liquidator of Tenant or of all or a
substantial part of Tenant’s property or of the Premises or of Tenant’s
interest in this Lease, or adjudicating Tenant as bankrupt or insolvent, and
such order, judgment or decree shall not be vacated, set aside or stayed within
thirty (30) days from the date of entry.

 

SECTION 32:  REMEDIES

 

If Tenant shall default under this Lease as set forth in Section 31,
Landlord shall have the following rights and remedies in addition to all other
remedies at law or equity, and none of the following, whether or not exercised
by Landlord, shall preclude the exercise of any other right or remedy whether
herein set forth or existing at law or equity:

 

(a)                                  Landlord shall have the right to terminate
this Lease by giving Tenant notice in writing, and upon the giving of such
notice, this Lease and the Term hereof as well as the right, title and interest
of Tenant under this Lease shall wholly cease and expire in the same manner and
with the same force and effect (except as to Tenant’s liability on the date
specified in such notice as if such date were the expiration date of the Term
of this Lease) without the necessity of re-entry or any other act on Landlord’s
part.  Upon any termination of this
Lease, Tenant shall quit and surrender to Landlord the Premises as set forth in
Section 21.  If this Lease is
terminated, Tenant shall remain liable to Landlord for all Base Rent accrued
and unpaid and other sums due hereunder to the date of termination of this
Lease and Landlord shall also be entitled to recover from Tenant the worth at
the time of such termination of the excess, if any, of the amount of Base Rent
reserved in this Lease for the balance of the Term of this Lease (which shall
be calculated using an interest rate equal to the legal rate of interest then
in effect) in excess of the then reasonable rental value of the Premises for
the same period.  No provision(s) of
this Lease shall limit or prejudice the right of Landlord to prove for and
obtain as liquidated damages by reason of any termination of this Lease, an
amount equal to the maximum allowed by any statute or rule of law in effect at
the time when, and governing the proceedings in which, such damages are to be
proved, whether or not such amount be greater, equal to, or less than the
amount of the difference referred to above.

(b)                                 Landlord may without demand or notice,
re-enter and take possession of the Premises or any part thereof, and repossess
the same as of Landlord’s former estate and expel Tenant and those claiming
through or under Tenant, and remove the effects of any and all such persons
(forcibly, if necessary) without being deemed guilty of any manner of trespass
and without prejudice to any remedies for arrears of rent or preceding breach
of covenants.  Should landlord elect to
re-enter as provided in this Section 32(b), or should Landlord take possession
pursuant to legal proceedings or pursuant to any notice provided for by law,
Landlord may, from time to time, without terminating this Lease, relet the
Premises or any part thereof for such term or terms and at such rental or
rentals, and upon such other conditions as Landlord may deem advisable, with
the right to make alterations and repairs to the Premises.  No such re-entry or repossession of the
Premises by Landlord shall be construed as an election on Landlord’s part to
terminate this Lease unless a written notice of termination is given to Tenant
by Landlord.  No such re-entry or
repossession of the Premises shall relieve Tenant of its liability and
obligation under this Lease, all of which shall survive such re-entry or
repossession.  Upon the occurrence of
such re-entry or repossession, Landlord shall be entitled to the amount of the
monthly Base Rent, and any other sums, which would be payable hereunder if such
re-entry or repossession had not occurred, less the net proceeds, if any, of
any reletting of the Premises after deducting all of Landlord’s reasonable
expenses in connection with such reletting, including but without limitation,
all repossession costs, brokerage commissions, legal expenses, attorney’s fees,
expenses of employees, alteration costs and expenses of preparation for such
reletting.  Tenant shall pay such amount
to Landlord on the days on which the Base Rent or any other sums due hereunder
would have been payable hereunder if possession had not been retaken.  In no event shall Tenant be entitled to
receive the excess, if any, of net rent collected by Landlord as a result of
such reletting over the sums payable by Tenant to Landlord hereunder.

 

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

 

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

 

SECTION 33:  CONTROL OF THE
COMMON AREAS

 

Landlord shall have the right at any time to change the arrangement or
location of, or both, or to regulate or eliminate the use of the Common Areas
without incurring any liability to Tenant or entitling Tenant to any abatement
of rent and such action shall not constitute an actual or constructive eviction
of Tenant, so long as Tenant’s Leasehold interests are not materially affected.

SECTION 34:  PARKING PRIVILEGES

 

Tenant’s guest or clients have the same rights to use in common with
other tenants of the Building guests or clients those automobile Parking areas
which are reserved for “visitors only” and which are included within the Common
Areas.

 

SECTION 35: TENANT’S OPTIONS

 

(a)                                  Grant of First Option.  Tenant shall have the option to extend the
Term 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 First
Option is exercised.

 

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

 

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

 

(d)                                 Exercise of Second Option.  Tenant may only exercise its Second Option
by written notice to Landlord served upon Landlord during the time period
between nine (9) months and six (6) months prior to the end of the Term as
modified by the exercise of the First Option. 
Once such notice is served, the Term of the Lease shall be automatically
modified so that the Lease will end at noon on the last day of the calendar
month in which the twentieth (20th) anniversary of the Commencement Date
occurs.

 

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

 

SECTION 36:  NO IMPLIED
SURRENDER OR WAIVER

The failure of Landlord to seek redress for violation of, or to insist
upon the strict performance of, any covenant or condition of this Lease or any
of the rules and regulations set forth in Exhibit D to this Lease or hereafter
adopted by Landlord shall not prevent a subsequent act, which would have
originally constituted a violation, from having all the force and effect of an
original violation.  If it should be
necessary or proper for Landlord to bring any action under this Lease or to
place this Lease with any attorney for the enforcement of any of Landlord’s
rights hereunder, then Tenant agrees to pay to Landlord reasonable attorney’s
fees.  The receipt by Landlord of any
sums due hereunder with knowledge of the breach of any covenant of this Lease
shall not be deemed a waiver of such breach. 
The failure of Landlord to enforce any of the rules and regulations set
forth in Exhibit D, or hereafter adopted, against Tenant or any other tenant in
the Building shall not be deemed a waiver of such rules and regulations or any
part thereof.  No provisions of this
Lease shall be deemed to have been waived by Landlord unless such waiver is in
writing signed by Landlord.  No act or
thing done by Landlord or Landlord’s agents during the Term of this Lease shall
be deemed an acceptance of a surrender of the Premises, and no agreement to
accept such surrender shall be valid unless in writing signed by Landlord.  No employees of Landlord or of Landlord’s
agents shall have any power to accept the keys of the Premises prior to the
termination of this Lease.  The delivery
of keys to any employee of Landlord, or of Landlord’s agents, shall not operate
as a termination of this Lease or a surrender of the Premises.  No payment by Tenant, or receipt by
Landlord, of a lesser amount than any sums due hereunder, shall be deemed to be
other than on account of the earliest stipulated amount, nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment as rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord’s right to recover the
balance of such amount or pursue any other remedy available to Landlord.  Time is of the essence hereof.

 

SECTION 37:  PAYMENTS AFTER
TERMINATION

 

No payment of money by Tenant to Landlord after the termination of this
Lease, in any manner, or after the giving of any notice (other than a demand
for payment of money) by Landlord to Tenant, shall reinstate, continue, or
extend the Term of this Lease or make ineffective any notice given to Tenant
prior to the payment of such money. 
After the service of notice or the commencement of a suit or after final
judgment granting Landlord possession of the Premises, Landlord may receive and
collect any sums due hereunder, and the payment of such sums shall not make
ineffective any notice, or in any manner affect any pending suit or any
judgment theretofore obtained.

 

SECTION 38:  NO REPRESENTATIONS
BY LANDLORD; ENTIRE AGREEMENT

 

Landlord and Landlord’s agents have made no representations,
warranties, agreements or promises with respect to the Building or Premises
except such as are expressed herein. 
The entire contract of the parties is contained herein, and there are no
promises, agreements, representations, warranties, conditions or
understandings, either oral or written, between them, other than as are herein
set forth.  This Amended and Restated
Office Lease supercedes and replaces the original Lease and all addenda
thereto.  The amount of Base Rent does
not cover times before Lease Year 2001-2002, but rather, the Base Rent,
together with the credits given in Section 48 that are applicable to the
2001-2002 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 Landlord
in connection with this Lease and that no broker negotiated this Lease or is
entitled 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 the
original lease that are set forth in this Amended and Restated Lease.  The execution and delivery of this Lease by
Landlord shall be conclusive evidence that Landlord has relied upon the
foregoing representation and warranty. 
Tenant further agrees to indemnify and hold harmless Landlord with
respect to any claim for broker’s commission or similar compensation brought by
any person by reason of Tenant’s acts. 
Tenant will pay any and all commissions or other compensation due to The
Colorado Group, Inc., Gary A. Aboussie, and either or both of them.

 

SECTION 40:  NOTICE

 

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

 

SECTION 41:  AMENDMENT OR
MODIFICATION

 

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

 

SECTION 42:  DEFINITION OF
LANDLORD

 

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

SECTION 43:  SEVERABILITY

 

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

 

SECTION 44:  CAPTIONS; GENDER
AND NUMBER

 

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

 

SECTION 45:  SUCCESSORS,
ASSIGNS; JOINT AND SEVERAL LIABILITY

 

The covenants, conditions and agreements contained in this Lease shall
bind and inure to the benefit of Landlord and Tenant and their respective
heirs, distributees, executors, administrators, successors, and except as
otherwise provided in this Lease, the obligations imposed upon Tenant under
this Lease shall be joint and several.

 

SECTION 46:  GOVERNING LAW

 

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

 

SECTION 47:  LENDERS PROTECTION
CLAUSE

 

Tenant agrees to give each ground lessor and holder of a mortgage, deed
of trust or other encumbrance secured by the real property described in Exhibit
A attached hereto, by certified or registered mail, a copy of any notice of
default served upon the Landlord, provided that prior to such notice Tenant has
been notified in writing of the address of such ground lessor or holder.  Tenant further agrees that if Landlord shall
have failed to cure such default within the time provided for in this Lease,
then all of such ground lessors and holders shall have an additional thirty
(30) days within which to cure such default or if such default cannot be cured
within that time, then in such additional time as may be necessary if within
such thirty (30) days, such ground lessor or holder has commenced and is
diligently pursuing, the remedies necessary to cure such default (including,
but not limited to, commencement of foreclosure proceedings, if necessary to
effect such cure) in which event this Lease shall not be terminated while such
remedies are being so diligently pursued.

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 2001-2002
prior to the earlier of:

 

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

 

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

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

 

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

 

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

 

(e)                                  “Substantial completion” of the work set
forth in Section 9 shall mean the stage in the progress of the construction
when the space in question is sufficiently complete so that Tenant can occupy
it for office use, exclusive of minor matters of mechanical and cosmetic
adjustment; provided that, in the event Landlord shall be delayed in completing
such work by any interference with or hindrance of such work by Tenant,
Tenant’s contractor or any of their employees, servants or agents or by any
changes in such work requested by Tenant and agreed to by Landlord, the
Premises shall be deemed to have been substantially ready for occupancy on the
date on which Landlord would have substantially completed such work had such
delay not occurred.  The issuance of a
temporary or permanent Certificate of Occupancy or Tenant’s taking possession
of the space set forth in Exhibit C shall conclusively establish substantial
completion, if not already established. 
Landlord shall deliver written notice to Tenant specifying the date,
determined in the manner specified above, on which substantial completion
occurred, which date shall be the date of substantial completion for all
purposes under this Lease.

(f)                                    Except for payment of Base Rent and Operating
Expenses (which are separately addressed in subsections (a) and (d) above),
notwithstanding anything to the contrary in this Lease, none of the obligations
of 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.  If
at any time during the Term, Landlord proposes to rent any portion of the
Building to a party which is not currently a tenant of space within the
Building or lists any portion of the Building for rent, Landlord shall first
make a written offer to rent such portion of the Building to Tenant for the
same base rent on which Landlord proposes to rent such portion of the Building.

 

(b)                                 Acceptance of Offer.  The
Tenant shall have the right for a period of forty-five (45) days after receipt
of the offer from Landlord to elect to rent the portion of the Building set
forth in Landlord’s offer.  The making
of a counter-offer by Tenant shall not be deemed a rejection of Landlord’s
offer or otherwise shorten Tenant’s forty-five day period to accept Landlord’s
offer.  To exercise this right of first
offer, the Tenant shall give written notice to Landlord within said forty-five
day period.  Upon exercise of the right
of first offer, this Lease shall be deemed amended to include the additional
premises set forth in Landlord’s offer and to increase the Base Rent hereunder
by the amount set forth in Landlord’s offer. 
Unless otherwise set forth in the Landlord’s offer, all other terms of
this Lease, including Escalation Rent, payment of Operating Costs (as expanded
to cover the new premises), and the Term (the term for the additional space
will be coterminous with the term for the existing Premises) shall remain the
same and shall govern the new added premises as though the new premises were
included in this Lease.

 

(c)                                  Failure to Accept Offer.  If
Tenant 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 to
another party at a base rental rate not less than 90% of the base rent offered
to 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, whichever
is greater.  Tenant’s failure to accept
the offer pursuant to Section 49(b) shall not terminate Tenant’s right of first
offer, except as to the portion of the Building rented to a third party
pursuant to Section 49(c) within six months after the expiration of the 45 day
period set forth in Section 49(b), and then only for so long as such third
party 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

Monarch
Park P.U.D. Replat E,

According
to the Plat in Planfile P-56 F-3 #2

County
of 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 forming
a part of Office Lease for Horizon Building)

 

RULES AND REGULATIONS

 

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

 

                                1.  OBSTRUCTION.  The sidewalks, entries, passage, corridors, halls, lobbies,
stairways, elevators and other common facilities of the Building shall be
controlled by the Landlord and shall not be obstructed by Tenant or used for
any other purpose other than ingress or egress to and from the Premises.  Tenant shall not place any item in any of
such locations, whether or not any such item constitutes an obstruction,
without the prior written consent of the Landlord.  Landlord shall have the right to remove any such obstruction or
any such item without notice to Tenant and at the expense of the Tenant.

 

                                2.  DELIVERIES. 
Tenant shall insure that all deliveries of supplies to the Premises
shall be made during the ordinary business hours of the building.  If any person delivering supplies to Tenant
damages the elevator or any other part of the building, Tenant shall pay to
landlord upon demand the amount required to repair such damage.

 

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

 

                                4.  HEAVY ARTICLES.  Tenant shall not place a load upon any floor of the Premises
exceeding 50 lbs. of live load per square foot.  Tenant will pay the fees of the structural engineer of the Building
if structural engineering advice is necessary in planning the positioning of
heavy loads.  Business machines and
mechanical equipment shall be placed and maintained by Tenant at Tenant’s
expense in settings sufficient to absorb and prevent vibration, noise and
annoyance.  Safes and other heavy
equipment, the weight of which will not constitute a hazard or damage the
Building or its equipment, shall be moved into, from and about the Building
only during such hours and in such manner as shall be prescribed by Landlord.

 

                                5.  NUISANCE. 
Tenant shall not do or permit anything to be done in the Premises, or
bring or keep anything therein which would in any way constitute a nuisance or
waste, obstruct or interfere with the rights of other tenants of the Building,
or in any way injure or annoy them, or conflict with the laws relating to fire,
or with any regulations of the fire department, or with any insurance policy
upon the Building or any part thereof, or conflict with any of the rules and
ordinances of any governmental authority having Jurisdiction over the
Building.  Tenant shall not cause or
permit any odors of cooking or other processes, or any unusual or other
objectionable odors, to emanate from the Premises.

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

 

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

 

                                8.  USE OF THE WATER FIXTURES.  Water closets and other water fixtures shall
not be used for any purpose other than that for which they are intended, and
any damage resulting to such fixtures from misuse on the part of the Tenant
shall be paid for by Tenant.

 

                                9.  NO ANIMALS, EXCESS NOISE.  No animals shall be allowed in the offices,
halls, corridors and elevators in the Building, except guide dogs for the sight
or hearing impaired.  No person shall
disturb the occupants of this or adjoining buildings or space by the use of any
radio or musical instrument or by the making of loud or improper noises.

 

                                10.  BICYCLES. 
Bicycles or other vehicles shall not be permitted anywhere inside or on
the sidewalks outside of the Building, except in those areas designated by
Landlord for bicycle parking.

 

                                11.  TRASH. 
Tenant shall not allow anything to be placed on the outside of the
Building, nor shall anything be thrown by Tenant out of the windows or doors,
or down the corridors, elevator shafts or ventilating ducts or shafts of the
Building.  All trash shall be placed in
receptacles provided by Tenant on the Premises or in any receptacles provided
by Landlord for the Building.

 

                                12.  WINDOWS. 
Levelor style window coverings shall be installed by Landlord and no
awnings shall be placed over the windows without Landlord’s prior written
consent.  Tenant agrees to abide by
Landlord’s rules with respect to maintaining uniform window coverings at all
windows and hallways so that the Building will present a uniform exterior
appearance.

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

 

                                14.           HOURS FOR REPAIRS, MAINTENANCE AND
ALTERATIONS.  Any repairs, maintenance
and alterations required or permitted to be done by Tenant under the Lease
shall be done only during the ordinary Business Hours of the Building unless
Landlord shall have first consented to such work being done outside of such
times.  If Tenant desires to have such
work done by Landlord’s employees, on Saturdays or Sundays, holidays or
weekdays outside of ordinary business hours, Tenant shall pay the extra cost of
such labor.

 

                                15.  NO DEFACING OF PREMISES.  Except as permitted below, Tenant shall not
mark upon, paint signs upon, cut, drill into, drive nails or screws into, or in
any way deface the walls, ceilings, partitions or floors of the Premises or of
the Building, and any defacement, damage or injury caused by Tenant shall be
paid for by Tenant.  Tenant shall be
allowed to hang up pictures, plaques and decorative items not exceeding 8
square feet in size on the walls of the Premises.

 

                                16.  CHAIR PADS. 
During the entire term of this Lease, Tenant shall at its expense,
install and maintain under all caster chairs a chair pad to protect the
carpeting.

 

                                17.  CAPTIONS. 
The caption for each of these rules and regulations is added as a matter
of convenience only and shall be considered of no effect in the construction of
any provision or provisions of these rules.Exhibit 10.22

 

ADDENDUM TO AMENDED AND RESTATED OFFICE LEASE

 

THIS Addendum to Amended and
Restated Office Lease dated this 16th day of May 2002 is entered into between
MUM II, LLC (“Landlord”) and Horizon Dairy, Inc. (“Tenant”)

 

WHEREAS,
simultaneously herewith the parties are entering into the Amended and Restated
Office Lease for the rental of a portion of the Horizon Building  (the “Restated Lease”); and,

 

WHEREAS,
toward the end of the negotiations for the Restated Lease but prior to the
preparation of Exhibit C attached to the Restated Lease, Tenant requested that
three new window openings be made to the area depicted on Exhibit C and that
four new skylights be installed on the roof of the area depicted on Exhibit C;
and,

 

WHEREAS, the
Base Rent set forth in the Restated Lease was based upon the Premises without
the three new window openings and four new skylights; and,

 

WHEREAS, the
new window openings and skylights will cost the Landlord an additional $22,500
to install; and,

 

WHEREAS, the
parties have agreed on how this extra cost will be shared between the parties
and wish to set forth that agreement in this Addendum;

 

IT IS
THEREFORE AGREED as follows:

 

1.                                       In
consideration of the extra windows and skylights described above, Tenant shall
pay Landlord the sum of $11,250 plus interest thereon at the rate of 7.15%  per annum in sixty payments of $223.56 per
month beginning August 1, 2002  and
ending on July 1, 2007.

 

2.                                       The
sums set forth in paragraph 1 above shall be due regardless of whether the
Restated Lease is terminated and the obligation to pay such sums shall survive
the termination of the Restated Lease if the termination is due to the default
of Tenant.

 

3.                                       Tenant
acknowledges that cutting the openings in the existing concrete walls and roof
in order to add the three new window openings and four skylights will cause a
great deal of noise that will exceed the noise created by the other
construction activity necessary to complete the work set forth on Exhibit C to
the Restated Lease.  Landlord shall use
commercially reasonable methods to minimize such noise, if feasible.  Nothing in this paragraph will affect
Tenant’s rights under Section 11 of  the  Restated Lease.

 

IN WITNESS
WHEREOF the parties have executed this Addendum on the day and year first above
written.

 

	
   

  	
   

  	
   

  	
  HORIZON
  ORGANIC DAIRY, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Tom Briggs

  
	
   

  	
   

  	
   

  	
   

  	
  Name:  Tom Briggs

  
	
   

  	
   

  	
   

  	
   

  	
  Title:  CFO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  MUM II, LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Donald W. Unkefer

  
	
   

  	
   

  	
   

  	
   

  	
  Donald W.
  Unkefer, Jr., Manager

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