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Sample Business Contracts

Colorado-Boulder-1645 Broadway Lease - BWAY Property LP and Alfalfas Boulder Inc.

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                                 LEASE OVERVIEW
                                CORPORATE OFFICE

           Location:   1645 Broadway
               Size:   11,600 square feet
             Tenant:   Alfalfa's Inc.
         Lease Type:   Tenant pays taxes and insurance
          Guarantor:
         Lease Date:   October 5, 1992
  Commencement Date:   November 11, 1992

    Amendment Dated:   None

               Term:   Lease term to expire October 10, 2006
    Renewal Options:   6 years commencing 10/11/2006 
                       Written Notice to Landlord by 270 days to 300 days 
                       prior to expiration

  Current Base Rent:               $13,326.00
Current CAM Charges:   Taxes         2,030.00
                       Insurance       176.00

   Annual Base Rent:   $159,911.00 (through November 11, 1996)
                       $13.79 per foot per year

        Escalations:   At each anniversary date rent shall increase by the U.S.
                       GNP Price Deflator Index. This adjustment to be 
                       calculated by the lessor on an annual basis.


    Percentage Rent:   None
   Security Deposit:   $10,250.00
<PAGE>   2




                                LEASE AGREEMENT

         THIS LEASE, made and entered into this 5TH DAY OF OCTOBER 1992, BY AND
BETWEEN BWAY PROPERTY LIMITED PARTNERSHIP (hereinafter referred to as
"Landlord" and ALFALFAS BOULDER, INC. a Colorado corporation (hereinafter
referred to as "Tenant") having its principal place of business 201 University,
Denver, Colorado 80206.




                                  WITNESSETH:

                 IN CONSIDERATION of the covenants, terms, conditions,
agreements and payments as hereinafter set forth, the parties hereto covenant
and agree as follows:

        1.      PROPERTY - LEASED PREMISES. Landlord hereby leases unto Tenant
a portion of the premises to be approved by the parties hereto, situate at 1645
BROADWAY, AS MORE PARTICULARLY SHOWN ON EXHIBIT "A" TO BE ATTACHED HERETO AND
MADE A PART HEREOF IN Boulder, Colorado consisting of approximately 9,500
square feet and hereinafter referred to as the "leased premises", the leasing
of which shall be governed by the terms of this Lease. Such 9,500 square feet
shall be subdivided by Tenant at its sole cost and expense with a dividing wall
erected so that the remaining portion of the building shall have access to the
parking lot and be suitable for rental to another tenant.


        2.      TERM. The term of this Lease shall commence at 12:00 noon on 
the 18th day of November 1992, hereinafter referred to as the "Commencement
Date", and unless terminated as herein provided for, shall end at 12:00 noon, on
the 10th day of October 2000. If Landlord shall be unable to give complete
possession of the leased premises before the Commencement Date by reason of the
holding over or retention of possession by the current


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<PAGE>   3
                                LEASE AGREEMENT

occupants of the leased premises in whole or in part, or for any other reason,
for the first 60 days of such delay, Landlord shall not be subject to liability
for the failure to give possession on said date,and no abatement or diminution
of the rent to be paid hereunder shall be allowed to Tenant nor shall the
validity of the Lease be impaired under such circumstances. However, the rent
reserved and covenanted to be paid herein shall not commence until 70 days
after possession of the leased premises is given to Tenant or the premises are
available for occupancy by Tenant, and no such failure to give possession on
the date of commencement of the term shall affect the obligations of Tenant
hereunder. By the signing of this lease, or any option relating hereto, Tenant
shall be deemed to have accepted the leased premises and acknowledges that the
leased premises are in satisfactory condition.

         3.      OPTION TO EXTEND. Upon full and complete performance of all
the terms, covenants and conditions herein contained by Tenant and payment of
all rental due under the terms hereof, Tenant shall be given the option to
renew this Lease for an additional term of SIX (6) years commencing on October
11, 2000 and terminating on October 10, 2006 and, except for the amount of
rental to be paid (as modified by paragraph 4B below), upon the same terms and
conditions provided in this Lease. In the event Tenant desires to exercise said
option to renew the term of this Lease, Tenant shall give written notice of
such fact to Landlord not less than TWO hundred SEVENTY (270) days nor more
than THREE hundred (300) days prior to the expiration of the current term of
this Lease. In the event of such exercise, this Lease Agreement shall be deemed
to be extended for the additional 6 year period, subject to the right of the
Landlord to make such adjustments and/or assessment of


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<PAGE>   4
                                LEASE AGREEMENT

charges against Tenant as is provided for herein.

         4.      RENT. Tenant shall pay all amounts due to Landlord hereunder,
to BWAY PROPERTY LIMITED PARTNERSHIP at 2805 Broadway Boulder, Colorado 80304.
The following is the rental for the leased premises:

A.       BASE RENTAL RATE:

         (1)     The base annual rental for the first full year of the term
hereof shall be One Hundred Twenty Three Thousand dollars ($123,000.00). Said
rental shall be payable in monthly installments (basic first year monthly
rental) of $10,250.00 (ten thousand two hundred fifty dollars) in advance, on
the first day of each month during the term hereof except that no basic first
year monthly rental shall be due from Tenant until January 15, 1993;

         ESCALATION OF BASE RENTAL RATE: On a date which shall be one year
after the Commencement Date of the term of this Lease, and annually thereafter,
(hereinafter referred to as the "adjustment date"), the base annual rental due
hereunder shall be adjusted upward (or downward) by the annual percentage
increase (or decrease) in the U.S. Gross National Product Price Deflator Index
(hereinafter referred to as the "Index"). The first adjustment of the base
annual rental herein set forth shall be based upon the percentage increase in
the Index between that published on the closest date of publication prior to
the commencement of the first year of this Lease, and that published on the
closest date of publication thereof prior to the first annual anniversary date
following the commencement of the term of this Lease.  Thereafter, any such
adjustment shall be based on the annual percentage change in the Index. Upon
each adjustment date the base annual rental then

                                       3
<PAGE>   5
                                LEASE AGREEMENT

being paid shall be increased by an amount equal to the amount arrived at by
multiplying the percentage increase in the Index for the preceding twelve (12)
months times the then payable base annual rental.

         If publication of the Index shall be discontinued, the parties hereto
shall thereafter accept comparable statistics on the cost of living for United
States cities, as they shall be computed and published by an agency of the
United States or by a responsible financial periodical of recognized authority
then to be selected by the parties hereto. In the event of (1) use of
comparable statistics in place of the Index as above-mentioned, or (2)
publication of the index figure at other than bimonthly intervals, there shall
be made in the method of computation herein provided for such revisions as the
circumstances may require to carry out the intent of this paragraph.

         5.      SECURITY DEPOSIT. Subject to collection the tenant has on the
date this lease is signed by the parties hereto deposited with the Landlord the
sum of $10,250.00 (equal to one month of base rental) as security for the
performance by the Tenant of the terms of this Lease. The Landlord may use,
apply or retain the whole or any part of the security so deposited to the
extent required for the payment of any rent and additional rent or other sum as
to which the Tenant is in default or for any sum which the Landlord may expend
or may be required to expend by reason of the Tenant's default in respect of
any of the terms of this Lease, including, but not limited to, and damages or
deficiency in the reletting of the leased property, whether such damages or
deficiency accrued before or after summary proceedings or other reentry by the
Landlord. Said security deposit shall accrue simple interest on the $10,250.00
at whatever annual rate such funds earn per year in a fully insured money
market fund which Tenant and Landlord shall agree upon. In the


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<PAGE>   6
                                LEASE AGREEMENT

event Landlord and Tenant can not agree on which fund such Security Deposit
shall be used, said security deposit shall accrue simple interest on the
$10,250.00 at the rate of 4% per year or the minimum rate permitted by Law,
whichever is higher. In the event that the Tenant shall have complied with all
of the terms of this Lease, the security deposit shall be returned to the
Tenant within thirty (30) days after the date fixed as the end of the lease and
after delivery of possession of the leased property to the Landlord. In the
event of a sale or lease of the premises of which the leased property forms a
part, the Landlord shall have the right to transfer the security deposit to the
vendee or lessee and, provided Landlord has in fact so transferred such
security deposit, the Landlord shall thereupon be released from all liability
for the return of such security deposit and the Tenant shall look solely to the
new landlord for the return of such security deposit. The Tenant shall not
assign or encumber the money deposited as security, and neither the Landlord
nor its successors or assigns shall be bound by any such assignment or
encumbrance.

         6.      TAXES - REAL PROPERTY - RESPONSIBILITY.

Tenant shall be liable for and shall pay a pro-rata share of all taxes, levies,
assessments and charges, including, but not limited to, the general real
property taxes (hereinafter referred to as the "Taxes") on the land and
improvements on the property known as 1645 Broadway in Boulder, Colorado, which
pro rata share shall be at the ratio of 9,500/14,500. Additionally, Tenant
shall pay 100% of the increase in the general real property taxes due to any
improvements to the leased premises made by Tenant. At the election of
Landlord, Landlord may advise Tenant of the estimated amount of such real
property taxes, based on the most current available assessment and levy, and


                                       5
<PAGE>   7
                                LEASE AGREEMENT

Tenant shall pay monthly to Landlord, as additional rent under the terms hereof,
a sum equal to one-twelfth of Tenant's pro-rata share of such estimated real
property taxes. In the event the first and last months of the lease term are
not full calendar months, the liability of Tenant under the terms hereof shall
be prorated with Tenant being liable for only those number of days in such
month during which this lease was in effect.

         7.      TAXES - PERSONAL PROPERTY - RESPONSIBILITY. Tenant shall pay
for any and all taxes and/or assessments levied and/or assessed against any
furniture, fixtures, equipment and items of a similar nature installed and/or
located in or about the leased premises by Tenant.

         8.      INSURANCE - RESPONSIBILITY.

                 A.       The Landlord shall, at the cost and expense of
Tenant, have and maintain in effect at all times, fire, extended coverage,
flood, public liability and vandalism and malicious mischief insurance on the
building only in such amounts as shall be determined appropriate by Landlord,
and shall notify Tenant of the premium therefor. At the election of the
Landlord, Landlord may notify Tenant of the premium for such insurance and on
the first day of the month next following receipt of notification of the amount
of such premium, and on the first day of each month thereafter until subsequent
notification of any change, Tenant shall pay to Landlord, as additional rent
due under the terms hereof, one-twelfth of Tenant's share of the amount
thereof, such share to be determined in the manner set forth in paragraph 6
herein.

                 B.       During the construction of any improvement to the
leased premises, Tenant shall carry such public liability and workman's
compensation


                                       6
<PAGE>   8
                                LEASE AGREEMENT

insurance as shall be required by the laws of the State of Colorado. Before all
work is commenced, Tenant shall furnish to Landlord proof of such insurance
coverage, and such liability policy shall name the Landlord as an additional
insured.

         9.      INSURANCE - RESPONSIBILITY OF TENANT. Tenant shall procure,
pay for and maintain comprehensive public liability insurance providing
coverage from any loss or damage occasioned by an accident or casualty in, or
about the leased premises and Tenant shall procure, pay for and maintain all
insurance necessary for loss to contents in the leased premises, providing
proof of coverage acceptable to Landlord. Tenant agrees to obtain, at its sole
cost and expense, flood insurance coverage sufficient to cover loss of
inventory on the Premises.

         10.     UTILITIES. At the election of Landlord, Tenant shall exercise
its best efforts to obtain and install at its sole cost and expense separate
meters for all utility services and shall pay the cost, directly to the
suppliers thereof, of all utility services which are separately metered for the
leased premises including, but not limited to, heat, water, gas, electric and
sewer services. In the event that Landlord has elected to pay any of those
costs directly, Tenant shall pay such costs to Landlord as additional rent
under the terms hereof, within ten days from presentation by Landlord of the
statement for such utility services. In no event shall Landlord be liable for
any interruption or failure in the supply of any such utility to the leased
premises not caused by the Landlord.

         11.     ACCESS AND PARKING FACILITIES. Landlord shall provide to Tenant

                                       7
<PAGE>   9
                                LEASE AGREEMENT

access and parking facilities as currently exists on the property, including
all the spaces used by the current tenant, Blue Mountain Arts, except for 6
spaces which Landlord shall reserve for use by others together with the
remaining 5,000 square feet of the building of which the Leased Premises are a
part. Tenant, at its own cost, shall be responsible for the repair,
maintenance, replacement and snow removal in connection with all sidewalk
access facilities. Landlord shall provide snow removal of the parking and
loading facilities to Tenant at Landlord's sole cost and expense. Landlord
shall provide to Tenant, at Landlord's cost and expense, striping of all of the
parking and other access facilities other than sidewalk.

         12.     TENANT'S OPERATING AND UPKEEP EXPENSE. The Tenant at its own
expense shall be responsible for the reasonable and necessary operation,
maintenance and repair of the leased premises. The Tenant and Landlord agree
that as of the above date, all heating, roofing, and utilities are in good
working order.

         13.     ALTERATIONS, CHANGES AND ADDITIONS BY TENANT.

                 A.       Interior of Leased Premises. Tenant may, during the
term of this Lease, at Tenant's expense, but only upon demonstration of
Tenant's financial ability and with the prior written approval of the Landlord,
such approval not to be unreasonably withheld, erect inside partitions, add to
existing electric power service, add telephone outlets, add light fixtures,
install additional heating and/or air conditioning or make such other changes
or alterations as Tenant may desire. Prior to the commencement and during the
course of such construction, Tenant shall comply with all relevant laws,
ordinances, regulations and orders and shall procure all necessary approvals,


                                       8
<PAGE>   10
                                LEASE AGREEMENT

permits and certificates in connection therewith as may be required by all
governmental agencies having jurisdiction thereof. Prior to making any such
changes or alterations to the Leased Premises, Landlord and Tenant shall agree
whether or not such changes or alterations shall be removed by Tenant at its
sole cost and expense at the end of this Lease. At the end of this Lease, all
such fixtures, equipment, additions and/or alterations (except trade fixtures
as may be installed by Tenant and if so, as described on Exhibit "B" attached
hereto) shall be and remain the property of Landlord. All such work shall be
done in a good and workmanlike manner and shall consist of new materials unless
agreed to otherwise in writing by Landlord, and all such work, upon completion,
must be approved by Landlord and by the Building Inspector for the City of
Boulder and all other governing authorities having jurisdiction therefor. Any
and all repairs, changes and/or modifications thereto shall be the
responsibility of and at the sole cost of Tenant.

                 B.       Exterior of Leased Premises. Landlord must approve in
writing, which approval shall not be unreasonably withheld, any signs to be
placed in, near or on the leased premises, regardless of size or value, and/or
any addition, change or alteration to the exterior of the lease premises. Prior
to the cutting of any holes in the roof and/or any exterior surfaces or prior
to any work being performed and/or any equipment being installed on the roof by
Tenant, Tenant must submit to Landlord a structural report of the work to be
performed. The prior written approval of such work by the Landlord is to be
obtained by Tenant, which approval shall not be unreasonably withheld. If
Tenant fails to obtain such prior written approval, then any roof or structural
repairs necessitated by such change shall be the responsibility of Tenant. As a
condition to the granting of


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<PAGE>   11
                                LEASE AGREEMENT

such approval, Landlord shall have the right to require Tenant to furnish a bond
or other security acceptable to Landlord sufficient to insure completion of and
payment for any such work to be so performed. Prior to the commencement and
during the course of such construction, Tenant shall comply with all relevant
laws, ordinances, regulations and orders and shall procure all necessary
approvals, permits and certificates in connection therewith as may be required
by all governmental agencies having jurisdiction thereof.

         14.     CARE OF PROPERTY - RESPONSIBILITY.         In addition to
those items mentioned elsewhere in this Lease, Tenant shall maintain in good
repair all equipment, machinery and appliances necessary for heat and air
conditioning, and maintain electrical wiring and plumbing, provide all exterior
maintenance, repairs and groundskeeping to and for the leased premises. Tenant
shall be responsible for provision of trash receptacles and trash removal
service for the leased premises.

         Landlord may, but shall not be required to, enter the leased premises
at all reasonable times to make such repairs, alterations, improvements and
additions, including repairs and alterations to ducts and all other facilities
for air conditioning service as Landlord shall desire or deem necessary to the
premises or to the building or to any equipment located in the building or as
Landlord may be required to do by the City of Boulder or by the order or decree
of any court or by any other governmental authority, all at the sole cost and
expense of Tenant. Landlord shall repair plumbing to the property, electrical
to the property and shall replace, when defective, boilers and air conditioners
which belong to Landlord and which are fixtures within the leased premises.

         Tenant will, at his own expense but subject to any contractors' or


                                       10
<PAGE>   12
                                LEASE AGREEMENT


builders' warranties, keep the leased premises, which shall be deemed to
include all areas within or inside the exterior door to the leased premises and
the exterior door itself, in good repair and tenantable condition during the
term of this Lease, and Tenant shall promptly and adequately repair all damage
to the leased premises and replace or repair all damaged or broken glass,
fixtures and appurtenances, under the supervision and with the approval of
Landlord, within a reasonable period of time. If Tenant does not do so,
Landlord may, but need not, make such repairs and replacements, and Tenant
shall pay Landlord the cost thereof forthwith upon being billed for same.

         Tenant is responsible for replacement of all burned-out light bulbs
within the leased premises whether the light fixture is owned by Tenant or
Landlord. Tenant further agrees at the end of the term to return the leased
premises to Landlord in substantially as good condition as when received,
except for usual and ordinary wear and tear. Tenant further agrees to be
responsible for any repairs and/or maintenance required for any part of the
improvements of which the leased premises are a part where such repair and/or
maintenance is necessitated by actions or inactions of Tenant and/or activities
conducted by Tenant on the leased premises and/or as may be necessitated by any
governing authority.

         15.     CONTROL OF COMMON AREAS. Any parking areas, grounds and other
facilities deemed to be common areas with other tenants, if any, furnished by
Landlord in, on or near the improvements of which the leased premises are a
portion, shall at all times be subject to the exclusive management of Landlord,
meaning that Landlord shall have the right from time to time to establish,
modify and enforce reasonable rules and regulations with respect


                                       11
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                                LEASE AGREEMENT

to said facilities and areas.

         16.     USE OF PREMISES AND CARE OF GROUNDS - TENANT. Tenant shall use
the leased premises for offices for its retail grocery business of Tenant and,
to the extent allowed by local ordinances and zoning, for any other permitted
uses relating thereto provided however, that no toxic substances or other
material shall be disposed in, on, or around the Leased Premises. The use of
the leased premises for any other purpose is hereby expressly prohibited unless
Landlord otherwise agrees in writing. Tenant shall continuously and
uninterruptedly during the terms of this Lease occupy and use the leased
premises for the purposes hereinabove specified unless prevented from so doing
by causes beyond Tenant's control. Tenant shall not do anything in or about the
leased premises which will, in any way, void or make voidable or tend to
increase the rates for any insurance on the leased premises and/or the
improvements of which the leased premises are a part and/or the real property
on which said improvements are located. Tenant agrees to pay, as additional
rent, an amount equal to any increase in the insurance premiums that may be
charged during the term of this Lease for the amount of the insurance carried
by Landlord on the total improvements of which the leased premises are a part
when such increase results from activities carried on by Tenant on the leased
premises, whether or not Landlord has consented to the same. Tenant shall
conform to all present and future laws and ordinances of any governmental
authority having jurisdiction over the leased premises. Tenant shall not allow
any accumulation of trash or debris on the leased premises or within any
portion of the improvements of which the leased premises are a part. No storage
of any material outside of the leased premises shall be allowed unless first
approved by Landlord in writing, and


                                       12
<PAGE>   14
                                LEASE AGREEMENT


then in only such areas as are designated by Landlord. Tenant Will not use or
permit upon the premises anything unreasonably dangerous to life or limb.
Tenant will not in any manner deface or injure the building or any part
thereof.  Tenant shall not commit or suffer any waste on the leased premises
nor shall Tenant permit any nuisance to be maintained on the leased premises or
permit any disorderly conduct, common noise, odors or other activity having a
tendency to annoy or disturb neighbors or occupants, if any, of any other part
of the improvements of which the leased premises is a part.

         17.     LIABILITY FOR OVERLOAD. It shall be Tenant's sole and
exclusive responsibility to meet all fire regulations of any governmental unit
having jurisdiction over the leased premises as such regulations affect
Tenant's use of sidewalks and pavements adjoining the same which will result
from the movement of heavy articles. Tenant shall be liable for the cost of any
damage to the leased premises, the improvements of which the leased premises
are a part or the sidewalks and pavements adjoining the same which will result
from the movement of heavy articles. Tenant shall not unduly load or overload
the floors, mezzanines or any part of the leased premises.

         18.     GLASS AND DOOR RESPONSIBILITY. Replacement and repair of all
glass and doors on, within or bounding the leased premises shall be the
responsibility of the Tenant. Any replacement or repair shall be promptly
completed at the expense of the Tenant.

         19.     RULES AND REGULATIONS. Landlord reserves the right to adopt
and promulgate reasonable rules and regulations applicable to the leased
premises and the land and improvements of which the leased premises are a part
and


                                       13
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                                LEASE AGREEMENT


from time to time to amend or supplement said rules or regulations. Notice of
such rules and regulations and amendments and supplements thereto shall be
given to Tenant, and Tenant agrees to comply with and observe such rules and
regulations and amendments and supplements thereto, provided, however, the same
shall apply uniformly to all tenants, if any, of the improvements of which the
lease premises are a part.

         20.     DAMAGE TO LEASED PREMISES. In the event the leased premises
and/or the improvements of which the leased premises are a part shall be
totally destroyed by fire or other casualty or so badly damaged that, in the
opinion of Landlord, it is not feasible to repair or rebuild same, Landlord (or
Tenant, if such destruction shall not have been caused directly or indirectly
by Tenant) shall have the right to terminate this Lease upon written notice to
Tenant (Landlord). If the leased premises shall be wholly or partially damaged
by fire or other casualty, except if caused by Tenant's negligence, and said
leased premises are rendered wholly or partially untenantable thereby, an
appropriate reduction of the rent shall be allowed for any untenantable portion
of the leased premises until repair thereof shall be substantially completed,
and if Landlord has not substantially commenced the required repairs within
sixty (60) days after receiving permission to do so from all applicable and
governing authorities, and substantially completed same within one hundred
eighty (180) days thereafter, Tenant may cancel this lease as to that portion
of space not so repaired and remaining untenantable. Tenant shall be
responsible for any 'deductible' amount not paid by any insurance policy.

         21.     INSPECTION OF AND RIGHT OF ENTRY TO LEASED PREMISES.


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<PAGE>   16
                                LEASE AGREEMENT


                 A.       Landlord, and/or Landlord's agents and employees,
shall retain at all times, and have the right to use, in appropriate instances,
keys to all doors within and into the leased premises. If locks shall be
changed or added, Landlord shall be furnished with a key or keys thereto.

                 B.       Landlord, and/or Landlord's agents and employees,
shall have the right to enter the leased premises at all times during regular
business hours and, at all times during emergencies, to examine the leased
premises, to make such repairs, alterations, improvements or additions as
Landlord may deem necessary or desirable, provided there is no unreasonable
interference with Tenant's substantially the same conduct of its business, and
Landlord shall be allowed to take all materials into and upon said premises
that may be required therefor without the same constituting an eviction of
Tenant in whole or in part, and the rent reserved shall in no way abate while
such repairs, alterations, improvements or additions are being made, for reason
of loss or interruption of business of Tenant or otherwise. Landlord reserves
the right, at any time during the term hereof, to exhibit the leased premises
to any prospective purchaser of the improvements of which the leased premises
are a part and/or to place upon the leased premises and/or the improvements of
which the leased premises are a part, a notice or sign indicating the property
is for sale, such sign shall not be posted directly on any portion of the
building occupied by Tenant or, if posted on the land, within twenty feet of
any entry to such portion of the building, and within and during the ninety
(90) days prior to the expiration of the term of this Lease or any renewal
thereof, Landlord may exhibit the premises to prospective tenants and may place
upon the leased premises the usual notices indicating the leased premises are
for lease.

         C.      Landlord shall have the right to approve the weight, size and


                                       15
<PAGE>   17
                                LEASE AGREEMENT

location of safes and other heavy equipment and articles in and about the
leased premises and the access and parking areas and to require all such items
and furniture and similar items to be moved into and out of the building and
within the building and leased premises only at such times as will not
interfere with business operations of other tenants, if any. Movements of
Tenant's property into or out of the building and within the building are
entirely at the risk and responsibility of Tenant, and Landlord reserves the
right to require a permit (if required) before allowing any such property to be
moved into or out of the building.

         D.      Landlord shall have the right to take all reasonable measures
necessary for the security of the building and its occupants. Tenant agrees,
however, that security within and about its leased premises is solely the
responsibility of the Tenant.

         E.      Nothing contained herein shall impose any obligation upon the
Landlord to do or perform any of the above and foregoing. Landlord may enter
upon the premises and may exercise any or all of the foregoing rights hereby
reserved without being deemed guilty of an eviction or disturbance of Tenant's
use or possession and without being liable in any manner to Tenant.

         22.     COVENANT AGAINST LIENS. Tenant covenants and agrees with
Landlord not to suffer or permit any lien of mechanics or materialmen to be
placed against the land or building at 1645 Broadway, Boulder, Colorado or the
leased premises or Tenant's interest under this Lease. Tenant shall post notice
pursuant to section 38-22-101, et seq., C.R.S.1973, as amended, negating
Landlord's liability for any mechanic's liens resulting from any work, labor or
materials performed for or delivered at Tenant's request for incorporation into
the leased premises.

                                       16
<PAGE>   18
                                LEASE AGREEMENT

         In case any such lien attaches to the leased premises for work claimed
to have been furnished to Tenant, it shall be paid off and removed by Tenant
within ten (10) days thereafter at Tenant's expense. Additionally, should any
such mechanic's lien be filed, Tenant shall immediately file with the Clerk of
the District Court in Boulder County a corporate surety bond equal to one and
one-half the amount of the lien or such other amount as may be required to
remove said lien, plus all costs associated therewith pursuant to the
requirements of section 38-22-131, C.R.S. (1981 Cum.Supp.) and any amendments
thereto.

         Tenant has no authority or power to cause or permit any lien or
encumbrance of any kind whatsoever, whether created by act of Tenant, operation
of law or otherwise, to attach to or be placed upon Landlord's title or
interest in the leased premises, and any and all liens and encumbrances created
by Tenant shall attach to Tenant's interest only.

         23.     DEFAULT - REMEDIES OF LANDLORD. Annual Base Rent and any other
amount to be paid with the Annual Base Rent in regular monthly installments
shall be due on the first day of each calendar month and shall be delinquent if
not received by Landlord on or before the tenth of the month. Any other rent,
fee, charge or payment to be made by Tenant hereunder (all of which are to be
considered additional rental payments,) unless other time limits for payment
are prescribed herein, shall be due ten days after receipt by Tenant of a
statement from Landlord and shall be delinquent if not received by Landlord
within ten days from the date due.

         If Tenant shall be delinquent in the payment of rent or other charges
due from Tenant hereunder or default in the keeping of any of the terms,
covenants or conditions of this Lease to be kept and/or performed by Tenant,

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<PAGE>   19
                                LEASE AGREEMENT


or if any proceedings be commenced by or for Tenant under any of the
bankruptcy laws or if Tenant is adjudged insolvent by any court, or if Tenant
makes an assignment for the benefit of creditors, or if Tenant enters into a
general extension agreement with creditors, or if Tenant's leasehold interest
shall be levied upon by execution or seized by virtue of any writ of any court
of law, then such events shall constitute a breach of this Lease and Landlord
may, at Landlord's option, exercise any one or more of the rights available to
Landlord under the laws of the State of Colorado now or hereafter in effect,
consecutively or, concurrently, including, without limitation, the following:

                 A.       Landlord may, if Tenant refuses upon proper demand to
quit the premises, immediately, or at any time thereafter, terminate this Lease
pursuant to section 13-40-101, et seq., C.R.S.1973, as amended, and obtain
through judicial process a writ of restitution and thereby repossess the leased
premises, together with all additions, alterations and improvements thereto.
Landlord may, at its option, at any time and from time to time thereafter,
relet the leased premises or any part thereof for the account of Tenant or
otherwise, and receive and collect the rents therefor and apply the same first
to the payment of such expenses as Landlord may have incurred in recovering
possession and for putting the same in good order and condition for rerental,
and expense, commissions and charges paid by Landlord in reletting the leased
premises. Any such reletting may be for the remainder of the term of this Lease
or for a longer or shorter period. In lieu of reletting such leased premises,
Landlord may occupy the same or cause the same to be occupied by others.
Whether or not the leased premises or any part thereof be relet, and provided
that Landlord does not reoccupy them, Tenant shall pay the Landlord the rent
and all other charges required to be

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<PAGE>   20
                                LEASE AGREEMENT

paid by Tenant up to the time of the expiration of this Lease or of such
recovered possession, as the case may be, and thereafter, Tenant, if required
by Landlord, shall pay to Landlord until the end of the term of this Lease, the
equivalent of the amount of all rent reserved herein and all other charges
required to be paid by Tenant, less the net amount received by Landlord for
such reletting, if any.

         If the leased premises shall be reoccupied by Landlord, then, from and
after the date of repossession, the Lease shall be deemed to have been
terminated by Landlord and Tenant shall be discharged of any obligations to
Landlord under the provisions hereof for the payment of rent.

         In event of any default by Tenant, and regardless of whether the
premises shall be relet or possessed by Landlord, any fixtures, additions,
furniture, and the like then on the premises may be retained by Landlord.

         In the event Tenant is in default under the terms hereof and, by the
safe and reasonable determination of Landlord, has abandoned the leased
premises, Landlord shall have the right to remove all the Tenant's property
from the leased premises and dispose of said property in such manner as is
reasonably determined best by Landlord, all at the cost and expense of Tenant
and without liability of Landlord for the actions so taken. Such reentry and
removal of personal property shall not be considered or construed to be a
forcible entry and shall be a remedy in addition to and separate and apart from
the Landlord's right of distraint and Landlord lien provided for in paragraph
23D and 23E below.

                 B.       Landlord shall also have the right to continue this
lease in full force and effect, including Tenant's right to possession and
Landlord's right to collect rent as it becomes due, provided Landlord may, at
Landlord's option, take any action necessary or appropriate, including

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<PAGE>   21
                                LEASE AGREEMENT

entering upon the demised premises, to cure any breach, in which event the
reasonable cost to Landlord for such cure, including attorneys' fees, shall
become immediately due and payable by Tenant as additional rental per annum.
Any installment of rent or other payment which is not paid when due shall bear
interest at the rate of eighteen percent (18%) per annum.

                 C.       Additionally, Landlord shall have the right to seek
such equitable relief as may be appropriate.

                 D.       Landlord may, after default, enter upon the leased
premises at any reasonable time to exercise its right of distraint against any
property of the Tenant and may seize such property having a value of this
amount of the unpaid rent and Landlord may keep said property in its possession
until the time such rental payment or payments have been made.

                 E.       Landlord and Tenant agree that Tenant grants unto
Landlord and Landlord has and shall have from the date of this Lease a landlord
lien upon all of the personal property, furniture, fixtures and equipment of
Tenant now located or hereinafter located upon the leased premises. In the
event of any default in the payment of any of the rental payments provided for
herein, Landlord shall have the right to take possession of the property
encumbered by said landlord lien and to dispose of said property at public or
private sale after sending notification of the time and place thereof to Tenant
and any other party with a recorded interest in the property subsequent to that
of Landlord at least ten (10) days prior to such sale.

         All powers and remedies given by this Lease to Landlord may be
exercised, from time to time, and as often as occasion may arise or as may be
deemed expedient. No delay or omission of Landlord to exercise any right or
power arising from any default shall impair any such right or power or shall be
considered to be a waiver of any such default or acquiescence thereof.


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<PAGE>   22
                                LEASE AGREEMENT

The acceptance of rental by Landlord shall not be deemed to be a waiver of
breach of any of the covenants herein contained or of any of the rights of
Landlord to any remedies herein given.

         24.     LEGAL PROCEEDINGS - RESPONSIBILITY.   In the event of any
proceeding at law or in equity wherein Landlord, without being in default as to
its covenants under the terms hereof, shall be made a party to any litigation
by reason of Tenant's interest in the leased premises, Landlord shall be
allowed and Tenant shall be liable for and shall pay all costs and expenses
incurred by Landlord including reasonable attorneys' fees. In the event either
party shall be required to commence any legal proceeding relating to the leased
premises and/or Tenant's occupancy thereof and/or Tenant's relation thereto,
the prevailing party shall be allowed and the other party shall be liable for
and shall pay all reasonable costs and expenses incurred by the prevailing
party, including reasonable attorney's fees.

         25.     HOLD HARMLESS. Tenant will indemnify and hold Landlord
harmless from and against any and all claims, losses, expenses, costs,
judgments, and/or demands arising from the conduct of Tenant on the leased
premises and/or on account of any operation or action by Tenant and/or from and
against all claims arising from any breach or default on the part of Tenant or
any act of negligence of Tenant, its agents, contractors, servants, employees,
licensees, or invitees; or any accident, injury or death of any person or
damage to any property in or about the leased premises arising from or caused
by Tenant's conduct, misconduct or negligence.  This paragraph 25 shall survive
termination of this Lease regardless of the reason for such termination. The
indemnification and hold harmless provisions set forth

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<PAGE>   23
                                LEASE AGREEMENT

herein shall not apply to claims, losses, expenses, costs, judgments and/or
demands arising solely from the negligence of Landlord.

         26.     ASSIGNMENT OR SUBLETTING. Tenant shall not without the consent
of Landlord, which consent shall not be unreasonably withheld, (a) assign this
Lease or any interest hereunder; (b) suffer or permit any assignment thereof by
operation of law; (c) sublet the leased premises or any part thereof; or (d)
permit the use of the premises by any party or parties other than Tenant, its
agents and employees. In the event of any sublease, Landlord shall retain the
right to collect such subrentals directly from such sub-tenants in the event
Tenant is in default under any of the terms and conditions hereunder. In the
event of an assignment of this Lease by Tenant, unless expressly agreed to the
contrary by Landlord, Tenant shall not be released from its obligations under
this Lease.

         27.     WARRANTY OF TITLE. Landlord covenants it has good right to
lease the leased premises in the manner described herein and that Tenant shall
peaceably and quietly have, hold, occupy, and enjoy the premises during the
term of the Lease.

         28.     GOVERNMENTAL ACQUISITION OF PROPERTY.      In the event the
leased premises and/or the improvements of which the leased premises are a part
shall be taken by condemnation or eminent domain, Landlord shall have the right
to terminate this Lease upon written notice to Tenant. The parties agree that
Landlord shall have complete freedom of negotiation and settlement of all
matters pertaining to the governmental acquisition of such property, it being
understood and agreed that any financial settlement respecting land


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<PAGE>   24
                                LEASE AGREEMENT


to be taken whether resulting from negotiation and agreement or condemnation
proceedings, shall be the exclusive property of Landlord, there being no
sharing whatsoever between Landlord and Tenant of any sum received in
settlement.  Landlord, at its option, may, after the taking of the property,
provide the same amount of square feet of land area and useable building space
for Tenant's operations in the immediate vicinity of the leased premises; in
the event Landlord cannot so do within thirty days of such taking, Tenant shall
have the right to terminate this Lease, but shall not receive payment of any
form of compensation. The taking of land as noted herein and/or the subsequent
termination of this Lease shall not be considered as a breach of this Lease by
Landlord, nor give rise to any claim in Tenant for damages or compensation from
Landlord.

         29.     CHANGES AND ADDITIONS TO IMPROVEMENTS BY LANDLORD. Landlord
reserves the right at any time to make alterations or additions to the
improvements of which the leased premises are a part and/or to build additions
or other structures adjoining said improvements. Landlord also reserves the
right to construct other buildings and/or improvements in the immediate area of
the improvements in which the leased premises are located and to make
alterations or additions thereto, all as Landlord shall determine. However,
such changes and additions by Landlord shall not deny Tenant access to the
leased premises nor shall they materially impair or impede Tenant's ability to
make reasonable use of the leased premises as provided in Section 16 herein,
and Landlord shall use its best efforts to prevent such denial of access to, or
impairment of, use of the leased premises. Landlord further reserves the
exclusive right to the roof of the improvements of which the leased premises
are a part and the airspace above said roof; provided, however, that Tenant

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<PAGE>   25
                                LEASE AGREEMENT

shall have the right to install and maintain improvements on the roof subject
to the provisions of paragraph 13 of this Lease. In the event a significant
alteration or addition is to be made by Landlord upon the leased premises,
Landlord shall give to Tenant written notice of such alteration or addition
prior to commencement of construction thereof. Tenant shall, within thirty (30)
days following receipt of any such notice, register with Landlord, in writing,
any objection or protest thereto, and upon failure to do so shall be deemed to
have waived any objection or protest thereto.

         30.     SUBORDINATION. It is expressly understood and agreed that this
Lease shall be subject and subordinate to any mortgage or deed of trust now
upon the demised premises and any mortgage or deed of trust hereafter placed
upon the demised premises, provided that the mortgagee or beneficiary under
such deed of trust agrees in writing with Tenant or adequate provision is made
in such future mortgage or deed of trust that, regardless of any default or
breach under said mortgage or deed of trust or of any possession or sale of the
sole or any part of the premises under or through such mortgage or deed of
trust, this Lease and Tenant's possession shall not be disturbed by mortgagee
or beneficiary or any other party claiming under or through such mortgage or
deed of trust; provided, however, that Tenant shall continue to observe and
perform Tenant's obligations under this Lease and pay rent to whomsoever may be
lawfully entitled to same from time to time. Tenant hereby agrees to execute,
if same is required by Landlord to subordinate Tenant's rights acquired by
this Lease to the lien of any such mortgage or deed of trust, as aforesaid.

         31. HOLDING OVER. If, after expiration of the term of this lease,


                                       24
<PAGE>   26
                                LEASE AGREEMENT

including any renewal thereof, Tenant shall remain in possession of the leased
premises and continue to pay rent without a written agreement as to such
possession, the Tenant shall be deemed a month-to-month Tenant and the rental
rate during such holdover shall be equivalent to the monthly rental paid for
the last month of tenancy under this Lease plus an amount equal to ten (10%)
percent of such monthly rental paid and shall thereafter be increased in the
manner set forth in paragraph 4B herein. No holding over by Tenant shall
operate to renew or extend this Lease without the written consent of Landlord
to such renewal or extension having first been obtained.

         32.     MODIFICATION. No modification of this Lease shall be binding
unless in writing and signed by the parties hereto.

         33.     LATE CHARGE. The Landlord shall have the right to collect from
Tenant a collection charge for each and every payment due to Landlord hereunder
which is delinquent, said charge being Twenty-Five and No/100 Dollars ($25.00)
or one and one-half percent of said payment, whichever sum shall be greater.
Said amounts shall be considered late rental payments under the terms of this
Lease. Payment of such late rental payments shall not excuse or cure any
default by Tenant under this Lease.

         34.     MEMORANDUM OF LEASE - RECORDING.  The parties hereto agree this
Lease will not be recorded.

         35.     NOTICE PROCEDURE. All notices, demands, and requests which may
or are required to be given by either party to the other shall be in writing
and such that are to be given to Tenant shall be deemed to have been properly


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<PAGE>   27
                                LEASE AGREEMENT


given if served on Tenant or sent to Tenant by United States certified mail,
return receipt requested, properly sealed, stamped, and addressed to Tenant at
the address first above mentioned with a copy sent to the Chief Financial
Officer at 201 University, Denver, CO 80206 and such as are to be given to
Landlord shall be deemed to have been properly given if personally served on
Landlord or if sent to Landlord, United States certified mail, return receipt
requested, properly sealed, stamped and addressed to BWAY Property Limited
Partnership c/o Spine Property Management Corporation 2805 Broadway Boulder
Colorado 80304 to the attention of Robert Polis or at such other place as
Landlord may from time to time designate in a written notice to Tenant. Any
notice given by mailing shall be effective as of the date of mailing as shown
by the receipt given therefor.

         36.     CONTROLLING LAW. The Lease, and all terms hereunder shall be
construed consistent with the laws of the State of Colorado. Any dispute
resulting in litigation hereunder shall be resolved in court proceedings
instituted in Colorado and in no other jurisdiction; provided, however, that
Landlord may elect to institute arbitration proceedings by serving upon Tenant
a written demand for arbitration of the dispute. In that event, the dispute
shall be arbitrated in Boulder, Colorado, pursuant to the rules and regulations
of the American Arbitration Association then in effect.  Landlord and Tenant
shall agree upon an arbitrator, but if unable to do so, the arbitrators
selected by each of them shall appoint the arbitrator to hear and adjudicate
the matter.

         37.     BINDING UPON SUCCESSORS. The covenants and agreements herein
contained shall bind and inure to the benefit of Landlord and Tenant and


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<PAGE>   28
                                LEASE AGREEMENT

their respective heirs, personal representatives, successors and assigns. This
lease shall be signed by the parties in duplicate, each of which shall be a
complete and effective original Lease.

         38.     PARTIAL INVALIDITY. If any term, covenant or condition of this
Lease or the application thereof to any person or circumstance shall, to any
extent, be deemed invalid or unenforceable, the remainder of this Lease and/or
the application of such term, covenant or condition to persons and
circumstances other than those to which it has been held invalid or
unenforceable, shall not be affected thereby.

         39.     MISCELLANEOUS. All marginal notations and paragraph headings
are for purposes of reference and shall not affect the true meaning and intent
of the terms hereof. Throughout this Lease, wherever the words "Landlord" and
"Tenant" are used, they shall include but not be limited to, and imply to the
singular, plural, persons both male and female, companies, partnerships and
corporations, and in reading said Lease, the necessary grammatical changes
required to make the provisions hereof mean and apply as aforesaid shall be
made in the same manner as though originally included in said Lease. The
undersigned signatory on behalf of Tenant hereby warrants and represents that
he is authorized to execute this lease and that Tenant is financially capable
of carrying out its obligations herein.

         40.     BROKER. The parties hereto agree that no broker, Realtor or
other person ("Broker") brought about this transaction. Tenant hereby
indemnifies and holds Landlord harmless against any claims for any and all
amounts that may be asserted by any person seeking payment of any kind for
bringing this transaction about.

IN WITNESS WHEREOF, the parties have executed this Lease as of the date hereof.

              LANDLORD: BWAY Property Limited Partnership by
                        Spine Property Management Corporation, General Partner


                    By: /s/ ROBERT POLIS
                        --------------------------------
                        Robert Polis

                 Title: President

                  Date: 
                        ---------------------------------

                TENANT: ALFALFAS BOULDER, INC.

                    By: /s/ S. M. HASSAN
                        --------------------------------
                        S.M. HASSAN
                 Title: President
                  Date: 
                        --------------------------------



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