Colorado-Denver-1111-23 South Washington Street Lease - AGF Property Management Corp. and Wild Oats Markets Inc.
LEASE
This Lease is made as of October 12, 1994, by and between AGF Property
Management Corp., a Colorado corporation ("Landlord"), whose principal place of
business is 410 17th Street, Suite 800, Denver, Colorado, and Wild Oats
Markets, Inc., a Delaware corporation ("Tenant"), whose principal place of
business is 1668 Valtec Lane, Boulder, Colorado.
ARTICLE 1
DEFINITIONS
The following terms have the following definitions:
l.1 "Commencement Date". The Commencement Date is the date Landlord
tenders possession of at least approximately 15,500 square feet of the Premises
to Tenant in the condition described in Section 2.3 of this Lease.
1.2 "Premises" means approximately 18,600 square feet in the building
commonly known as 1111-23 South Washington Street, Denver, Colorado. The
Premises are more particularly described in attached Exhibit A.
1.3 "Term" means the period beginning with the Commencement Date, and
ending on the earlier of the day this Lease expires or the day this Lease is
terminated, as provided herein. The Term will include the optional extension
periods, if such are exercised by Tenant.
SL.4 "Lease Year" means each twelve month period beginning on the
Commencement Date and each anniversary thereof.
1.5 "Center" means the real property and improvements located on the land
described on Exhibit B, attached hereto and incorporated herein by this
reference.
ARTICLE 2
PRELIMINARY AGREEMENTS
2.1 Grant of Leasehold. Landlord hereby leases to Tenant, and Tenant
hereby leases from Landlord, the Premises, for the Term and upon the terms,
covenants and conditions set forth in this Lease.
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2.2 Landlord's Tendering of Possession. As of the date hereof (the
"Possession Date") Landlord shall tender at least approximately 15,500 square
feet of the Premises to Tenant. The remaining 3,100 square feet shall be
delivered by Landlord, using commercially reasonable efforts to deliver such
space as soon as practicable. In the event such 3,100 square feet are not
delivered by Commencement Date, Tenant's Rent attributable to said 3,100 square
feet, or portion thereof not delivered, shall be abated until so delivered on a
per square foot basis, as Tenant's sole and exclusive remedy.
2.3 Condition of Premises. Landlord shall deliver the Premises to
Tenant in its as-is condition. At Tenant's request, Landlord has commissioned
and delivered to Tenant, without representation or warranty, a report
concerning the environmental condition of the Property, which report Tenant
hereby accepts and approves.
ARTICLE 3
TERM; OPTIONS TO EXTEND
3.1 Term. The Term shall commence as of the Commencement Date and end on
the date sixty (60) months after the Commencement Date, unless the Commencement
late is other than the first day of a calendar month, in which event the Term
shall end sixty (60) months after the first day of the calendar month following
the month in which the Commencement Date occurs.
3.2 Options. Landlord hereby grants to Tenant two (2) consecutive options
(the "Option") to extend the Term for periods of ten (10) years each (the
"Option Term"). The Option shall apply only to the original space leased
hereunder (approximately 18,600) and shall be on the following terms and
conditions:
A. Written notice of Tenant's interest in exercising the Option shall
be given to Landlord no later than four (4) months prior to the expiration of
the Term ("Tenant's Notice").
B. Unless Landlord is timely notified by Tenant in accordance with
subparagraph A above, it shall be conclusively deemed that Tenant does not
desire to exercise the Option, and the Lease shall expire in accordance with
its terms, at the end of the Term.
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C. Tenant's right to exercise its Option shall be conditioned on: (i)
Tenant not being in default under the Lease at the time of exercise of the
Option or at the time of the commencement of the Option Term; and (ii) Tenant
not having subleased more than twenty-fivsr percent (25%) of the Premises or
assigned its interest under the Lease as of the commencement of the Option Term
or having vacated more than twenty-five percent (25%) of the Premises.
D. The Option granted hereunder shall be upon the terms and
conditions contained in the Lease
E. After exercise of the Option above described, there shall be no
further rights on the part of Tenant to extend the term of the Lease.
3.3 Holding over; Removal of Fixtures; Surrender. If Tenant remains in
possession of the Premises after the expiration of the Term without any express
written agreement as to such holding over, then such holding over shall be
deemed and taken to be a holding upon a tenancy from month-to-month, subject to
all the terms and conditions hereof on the part of Tenant to be observed and
performed and at a monthly rent equivalent to one hundred fifty percent (150%)
of the monthly installments of Minimum Rent, Percentage Rent, and CAM, paid by
Tenant immediately prior to such expiration or the current market rental rate
for the Premises, whichever is greater. All such rent shall be payable in
advance on the same day of each calendar month. To the extent that Percentage
Rent for the month preceding the date of termination is not known as of the
beginning of the holdover period, Percentage Rent for the purposes hereof shall
be deemed to be the monthly average of the Percentage Rent for the prior two
calendar quarters. Such monthto-month tenancy may be terminated by either party
upon thirty (30) days' notice prior to the end of any such monthly period.
Nothing contained herein shall be construed as obligating Landlord to accept
any rental tendered by Tenant after the expiration of the Term hereof or as
relieving Tenant of its liability pursuant to this Paragraph and any holdover
without Landlord's consent shall be deemed a default hereunder entitling
Landlord to all of its rights and remedies set forth in Article 15, including,
without limitation, its right to recover consequential damages resulting from
said holdover.
Upon the expiration or earlier termination of the Term, Tenant shall cease
doing business, and Tenant shall remove all
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trade fixtures, equipment, signs and personal property owned by Tenant
("Tenant's Property") from the Premises (and Tenant shall repair any damage
caused by such removal) and surrender the Premises to Landlord in the condition
the Premises are required to be maintained during the Term pursuant to the
Lease, broom-clean, reasonable wear and tear excepted. Tenant shall surrender
all keys to Landlord and shall inform Landlord of all combinations of locks,
safes and vaults, if any, remaining on the Premises. In the event Tenant fails
to vacate the Premises on a timely basis as required, Tenant shall be
responsible to Landlord for all costs incurred by Landlord as a result of such
failure, including, but not limited to, any amounts required to be paid to
third parties who were to have occupied the Premises. Upon the expiration of
this Lease, Landlord shall have the right to purchase any or all of Tenant's
Property at the fair market value of the same.
ARTICLE 4
RENT
4.1 Minimum Rent.
A. Commencing on the Commencement Date and thereafter during the
initial four-year Term, Tenant shall pay Minimum Rent in the amount of $4.50
per square foot, which is approximately Six Thousand Nine Hundred Seventy-Five
Dollars ($6,975.00) per month, payable in advance on or before the first day of
each month. During the fifth (5th) year of the Term, Tenant shall pay Minimum
Rent in the amount of $7.00 per square foot (unless otherwise adjusted higher
as provided herein), which is approximately Ten Thousand Eight Hundred Fifty
Dollars ($10,850.00) per month, payable in advance on or before the first day
of each month. If the Commencement Date shall occur other than on the first or
the last day of a calendar month, the first Minimum Rent shall be prorated on a
daily basis, and shall be paid with the rent due for the next succeeding full
month.
B. Notwithstanding anything to the contrary set forth in subparagraph
A above, Tenant shall have the right to occupy the Premises without payment of
Minimum Rent and Percentage Rent for a period commencing on the date Tenant's
obligation to pay rent would otherwise commence in accordance with Paragraph
4.1.A. of the Lease and terminating twelve (12) months from such date (the
"Deferred Rent Period"). Notwithstanding the foregoing, Tenant is obligated to
pay its Pro Rata Share of CAM and Real
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Estate Taxes for the term of this Lease during the Deferred Rent Period. It is
agreed that the rent payable under this Lease is allocable to, and shall be
accrued by the parties during, their fiscal periods in which the same is
actually paid as provided in this Paragraph, as modified by this subparagraph.
Landlord and Tenant agree that no portion of the Minimum Rent paid by Tenant
during that portion of the Term occurring after the expiration of the Deferred
Rent Period shall be allocated by Landlord or Tenant to such Deferred Rent
Period, nor is such rent intended by the parties to be allocable to the
Deferred Rent Period. Notwithstanding the preceding, if Tenant's Gross Sales,
as defined below, for the first twelve (12) months of the Term exceed Three
Million Dollars ($3,000,000), Tenant shall pay Percentage Rent, as defined
below, in the amount of 1.5% of the Gross Sales in excess of $3,000,000 in the
manner in which Percentage Rent is paid as provided below.
C. If for any reason at any time during the initial sixty (60)
months of the Lease Tenant is in default hereunder for nonpayment of rent or
violation of Section 9.1, which default is not cured within any applicable cure
periods, Tenant shall owe to Landlord, in addition to all other amounts
otherwise set forth herein, all amounts of Minimum Rent and Percentage Rent
deferred pursuant to subparagraph B above. Such amounts shall be immediately
due and payable upon the occurrence of any such default. Tenant shall have no
obligation to pay such amounts if no Event of Default has occurred prior to the
expiration of the initial sixty (60) months of the term.
D. If Tenant exercises its option to extend the term for an
additional ten years ("lst Option Period"), the Minimum Rent for such 1st
Option Period shall be as follows (unless increased as otherwise provided in
Paragraph 4.1.E. below):
Years 6-7 $7.00 per sf
Years 8-15 $7.50 per sf
If Tenant exercises its option to extend the term for an
additional ten years ("2nd Option Period"), the Minimum Rent for such 2nd
Option Period shall be as follows (unless increased as otherwise provided in
Paragraph 4.1.E. below):
Year 16 $7.50 per sf
Years 17-21 $9.00 per sf
Years 22-25 $10.80 per sf
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E. Notwithstanding the above, if Percentage Rent (defined herein) is
paid for any Lease Year (except the first Lease Year), such Percentage Rent
when added to the Minimum Rent for that year shall constitute the Minimum Rent
for the next Lease Year. (Example: In Lease Year 2, Tenant has Gross Sales of
$9,000,000, requiring payment of Minimum Rent of $83,700 and Percentage Rent of
$96,300 for a total of $180,000. The Minimum Rent for Lease Year 3 shall be
$180,000. If in Lease Year 3 Tenant has Gross Sales of $10,000,000, Tenant
shall pay a total of $200,000, which shall become the Minimum Rent for Lease
Year 4. However, if in any Lease Year Gross Sales decrease by more than 15%
from the previous Lease Year, the Minimum Rent shall not be increased under
this paragraph. For example, continuing from the above example, if in Lease
Year 4 Tenant's sales decreased by 16% to 8,400,000, Tenant's Minimum Rent
shall remain at $180,000, rather than increase to $200,000. Since, during Lease
Year 4 Tenant will pay Minimum Rent based upon $200,000, Tenant shall receive a
credit against its Rent next due in accordance with the terms and conditions of
paragraph 4.2.A. below.
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4.2 Percentaqe Rent- Payment; Audit of Gross Sales.
A. In addition to the Minimum Rent, Tenant shall pay to Landlord for
each Lease Year, as percentage rent ("Percentage Rent"), a sum equivalent to
the amount, if any, by which two percent (2%) of Tenant's Gross Sales (as
hereinafter defined) exceeds the Minimum Rent for such year, except for the
First Lease Year during which Tenant shall pay 1.5% of Gross Sales in excess of
$3,000,000. Such Percentage Rent shall be estimated and paid on or before
thirty days from the close of each quarter of each Lease Year and shall be
accompanied by a written statement of Gross Sales, certified as correct by
Tenant. In the event that the total of the quarterly payments for Percentage
Rent for each Lease Year is not equal to the Percentage Rent due for the entire
Lease Year, then (a) Tenant shall pay to Landlord any deficiency with and at
the time Tenant delivers its Annual Statement, or (b) Landlord shall credit
Tenant's next payment of Minimum Rent with any excess. To the extent there are
any partial months included in the Lease Year or there is a partial Lease Year,
the Percentage Rent shall be prorated accordingly.
B. Gross Sales Defined. The term "Gross Sales" is hereby
defined to mean all sales of Tenant and of all licensees, concessionaires, and
subtenants of Tenant, from all business conducted upon or from the Premises,
whether such sales be evidenced by check, credit, gift certificates, charge
accounts, exchange or otherwise, and shall include, but not be limited to, the
amounts received from the sale of goods, wares and merchandise and for services
performed on or at the Premises, together with the amount of all orders taken
or received at the Premises, whether such orders are filled from the Premises
or elsewhere, and whether such sales be made by means of merchandise or other
vending devices of any kind or nature in the Premises, and shall include all
deposits not refunded to purchasers. Each sale on installment or for credit
shall be treated as a sale in the Lease Year during which such sale takes
place, irrespective of the time when Tenant shall receive payment therefor.
Gross Sales shall not include sales of merchandise for which cash has been
refunded; allowances made on merchandise which is defective; the amount of any
sales, use or gross receipts tax imposed by any governmental authority directly
on sales and collected from customers; transfers or sales to other stores of
Tenant; discount sales to employees; sales price of fixtures, equipment or
property sold not in the
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ordinary course of business; and the amounts of accounts receivable actually
uncollected and charged off as bad debts.
D. Tenant's Records. For the purpose of ascertaining the amount of
Percentage Rent due, Tenant shall keep within the Denver metropolitan area
books and records, kept in accordance with generally accepted accounting
principles, containing all Gross Sales during each month of the term hereof,
and all supporting records such as excise tax reports, state sales tax,
business and occupation tax and gross income tax reports and receipts or
invoices from vending machine companies. Such records shall be retained for at
least four (4) years after expiration of the Term. Tenant shall retain for at
least one (1) year after the expiration of each Lease Year all original sales
records and sales slips. All such records shall be open to inspection and audit
by Landlord and its agents at all reasonable times during ordinary business
hours. Tenant hereby specifically authorizes and consents to Landlord obtaining
any and all tax records relating to the operation of the business in the
Premises including sales tax records. Tenant agrees to execute any consents
necessary for Landlord to obtain such records.
E. Reports by Tenant. On or before the twentieth (20th) day of the
calendar month succeeding each calendar quarter during the Term hereof
(including the twentieth (20th) day of the month following the expiration of
the Term), Tenant shall deliver to Landlord at the place then fixed for payment
of rental a written statement signed and certified to Landlord by Tenant to be
an accurate statement of Gross Sales made during the preceding quarter or for
so much of the quarter remaining in the event of termination of the Term,
together with a copy of state sales tax receipts. In addition thereto, Tenant
shall within sixty (60) days of the close of each Lease Year during the Term
deliver to Landlord an audited statement certified to Landlord by an
independent certified public accountant showing Gross Sales during the
preceding year (the "Annual Statement of Gross Sales"). Any information
obtained by Landlord shall be held in strict confidence except Landlord may
inform the holder of any deed of trust on the building of the information
contained in said reports.
F. Audit. The acceptance by Landlord of payments of Percentage
Rent shall be without prejudice to Landlord's right to an examination of
Tenant's books and records in order to verify
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the amount of Gross Sales received by Tenant. Landlord may cause, at any
reasonable time, upon seventy-two (72) hours prior written notice to Tenant, a
complete audit to be made of Tenant's Gross Sales. If such audit discloses an
understatement of Gross Sales of two percent (2%) or more for any Lease Year,
Tenant shall promptly pay to Landlord the reasonable costs of said audit in
addition to the deficiency, together with interest on such deficiency in the
amount of three percent (3%) per annum above the Prime Rate, as defined below,
in effect from time to time during such period, from the date of underpayment
to the date such deficiency is paid.
G. Competition. Tenant agrees that it will not, during the term of
this Lease, open for business, directly or indirectly, operate nor own any
similar type of business within a radius of three (3) miles from the location
of the Premises without first obtaining Landlord's prior written consent which
may be given or withheld in its sole discretion. Any such consent, if given,
shall be subject to such conditions as Landlord may deem reasonable.
4.3 Advance Rent. Upon execution of this Lease, Tenant shall pay to
Landlord two months' advance Minimum Rent in the total amount of Thirteen
Thousand Nine Hundred Fifty and No/100 Dollars ($13,950.00). Such rent payments
shall be in lieu of the Minimum Rent due for the first two full months for
which Tenant is required to pay Minimum Rent, excluding any partial months.
4.4 Late Payments; Interest. Any rents or other amounts owing hereunder
which are not paid when due shall thereafter bear interest at the rate of three
percentage points over the Prime Rate or the highest rate permitted by
applicable usury law, whichever is lower, until paid. The Prime Rate shall be
the prime rate as published in the money rates section of the Western Edition
of the Wall Street Journal or its equivalent. Further, in the event any rents
or other amounts owing hereunder are not paid within five (5) days after said
amounts are due, Landlord and Tenant agree that Landlord will incur additional
administrative expenses, the amount of which will be difficult if not
impossible to determine. Accordingly, Tenant shall pay to Landlord an
additional, one-time late charge for any such late payment in the amount of two
percent (2%) of such payment. Any amounts paid by Landlord to cure any defaults
of Tenant hereunder, which Landlord shall have the right but not the obligation
to do, shall, if not repaid by Tenant within five (5) days of demand by
Landlord,
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thereafter bear interest at the rate of three percentage points over the Prime
Rate or the highest rate permitted by applicable usury law, whichever is lower,
until paid.
4.5 CAM. Tenant agrees to pay as an additional charge each month for
its Pro Rata Share of the cost of operation and maintenance of the Center
(including, among other costs, those incurred for lighting, water, sewage,
painting, cleaning, policing, inspecting, insurance, landscaping, repairing,
replacing, guarding and protecting) which may be incurred by Landlord in its
reasonable discretion (collectively, "CAM"). Landlord shall make monthly or
other periodic charges based upon the estimated annual cost of operation and
maintenance of the Center, payable in advance but subject to adjustment after
the end of the year on the basis of the actual cost for such year. Any such
periodic charges shall be due and payable upon delivery of notice thereof. The
Minimum Rent, Percentage Rent and CAM payments are sometimes hereinafter
collectively called "Rent" or "rent" and shall be paid when due in lawful money
of the United States without demand, deduction, abatement or offset at such
place as Landlord may designate from time-to-time. Expenditures for
replacements, which are capital improvements, shall be amortized at twelve
percent (12%) over the useful life of such capital improvement (as determined
by Landlord's accountants). Notwithstanding anything herein to the contrary,
Tenant shall repair and maintain the common area, including without limitation,
the parking lot, lights, landscaping ("Repairs") during the term hereof. Tenant
shall bill Landlord for the reasonable cost of said Repairs, less Tenant's Pro
Rata Share and plus Landlord's parking lot repair obligation (as described in
Section 11.2), which bill shall be accompanied by a detailed description of the
work completed and evidence of payment of the same acceptable to Landlord. To
the extent that Landlord has the right to and collects the same (except for
Landlord's parking lot repair obligation) from its other tenant's in the
Center, Landlord shall pay over the same to Tenant. Landlord shall pay Tenant
Landlord's parking lot repair obligation, if said Repairs encompass parking lot
repairs. Tenant shall perform the Repairs in a commercially reasonable manner
so as to cause the Center to be maintained in good condition and repair which
is acceptable to Landlord (the "Maintenance Standard"). In the event that
Tenant is not performing the Repairs to the Maintenance Standard, as reasonably
determined by Landlord, then Tenant shall cease to perform the Repairs upon
receipt of written notice from Landlord.
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ARTICLE 5
TAXES AND ASSESSMENTS
5.1 Taxes on Tenant's Business Operations and Personal Property. Tenant
shall cause to be paid all sales taxes levied in connection with operations on
the Premises, as well as all taxes levied against the leasehold held by Tenant,
or against its personal property, leasehold improvements, additions,
alterations and fixtures on the Premises.
5.2 Taxes on the Premises. Tenant shall pay its Pro Rata Share of all
real property taxes and assessments (including general and special
assessments), hereinafter sometimes jointly called "Real Estate Taxes", which
may be levied or assessed by any lawful authority against the Center, except
for t5,000 which shall be paid by Landlord. The foregoing shall include any
taxes, assessments, surcharges, or service or other fees of a nature not
presently in effect which shall hereafter be levied on the Center as a result
of the use, ownership or operation of the Center or for any other reason,
whether in lieu of or in addition to, any current real estate taxes and
assessments; provided, however, in no event shall the term Real Estate Taxes,
as used herein, include any net federal, state or local income taxes levied or
assessed on Landlord, unless such taxes are a specific substitute for real
property taxes. Such term shall, however, include gross taxes on rentals. Such
real estate taxes shall be paid prior to delinquency but may be paid in
installments if installment payments are allowed by the taxing authorities.
5.3 Proration and Seqregation. Real Property Taxes shall be prorated,
and Tenant shall pay those pertaining to the Term. "Tenant's Pro Rata Share"
shall mean, subject to the limitations hereinafter set forth, a fraction, the
numerator of which is the rentable square feet comprising the Premises and the
denominator of which is the rentable square feet comprising the Center (the
"Rentable Area"), which is currently 24,600. In the event Tenant, at any time
during the Term, or any extensions thereof, leases additional space in the
Center, Tenant's Pro Rata Share shall be recomputed by dividing the total
rentable square footage of space then being leased by Tenant (including any
additional space) by the Rentable Area and the resulting figure shall become
Tenant's Pro Rata Share.
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5.4 Contests. Tenant, at its cost, may contest, object to or oppose,
(herein "Contest") any tax, assessment, imposition or charge of which Tenant is
required by this Lease to pay all or a portion, provided that prompt notice of
such contest shall be given to Landlord, and provided further that such contest
is reasonable in the judgment of Tenant under the circumstances at the time
such contest is to be made. Landlord agrees to cooperate fully with Tenant in
contesting, objecting or opposing such, (including bringing the contest in the
name of the Landlord if required) provided that Tenant reimburses Landlord for
all costs incurred. Tenant shall not submit nor allow any submission to be made
to any public entity with respect to said Contest without Landlord's prior
written approval of said submission which approval may be withheld in
Landlord's sole discretion.
ARTICLE 6
INSURANCE
6.1 Landlord shall not be liable to Tenant or to Tenant's employees,
agents or visitors, or to any other person or entity, whomsoever, for any
injury to person or damage to or loss of property on or about the Premises or
the common area caused by the negligence or misconduct of Tenant, its
employees, subtenant, licensees or concessionaires, or of any other person
entering the Center under the express or implied invitation of Tenant, or
arising out of the use of the premises by tenant and the conduct of its
business therein, or arising out of any breach or default by Tenant in the
performance of its obligations hereunder or resulting from any other cause
except Landlord's gross negligence or willful misconduct, and Tenant hereby
agrees to indemnify Landlord and hold it harmless from any loss, expense or
claims arising out of such damage or injury.
6.2 Tenant shall procure and maintain throughout the term of this
lease a policy or policies of insurance, at its sole cost and expense, insuring
both Landlord and Tenant against all claims, demands or actions arising out of
or in connection with Tenant's use or occupancy of the Premises, or by the
condition of the Premises, the limits of such policy or policies to be in an
amount not less than $3,000,000 in respect of injuries to or death of any one
person, and in an amount not less than $3,000,000 in respect of any one
accident or disaster, and in an amount not less than $1,000,000 in respect of
property damaged
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or destroyed, and to be written by insurance companies satisfactory to
Landlord. Tenant shall obtain and maintain throughout the term of this Lease
"all risk" or "multiperil" insurance on and for the full cost of replacement of
all of Tenant's Property and betterments in the Premises, including, without
limitation all furniture, fixtures, personal property and all tenant finish.
All such insurance policies shall name Landlord as an additional insured
thereon. Tenant shall obtain a written obligation on the part of each insurance
company to notify Landlord at least ten (10) days prior to cancellation of such
insurance. Such policies or duly executed certificates of insurance shall be
promptly delivered to Landlord and renewals thereof as required shall be
delivered to Landlord at least thirty days prior to the expiration of the
respective policy terms. In addition to the remedies provided in this Lease,
Landlord may, but is not obligated to obtain such insurance and Tenant shall
pay to Landlord upon demand as additional rental the reasonable premium cost
thereof plus interest at the rate of ten percent (10%) per annum from the date
of payment by Landlord until repaid by Tenant.
6.3 Landlord and Tenant agree and covenant that neither shall be
liable to the other for loss arising out of damage to or destruction of the
Premises or contents thereof when such loss is caused by any perils included
within standard fire and extended coverage insurance policy of the state in
which the Premises is situated; this Agreement shall be binding whether or not
such damage or destruction be caused by negligence of either party or their
agents, employees or visitors.
6.4 Landlord and Landlord's agents and employees shall not be liable
to Tenant or any other person or entity whomsoever for any injury to person or
damage to property caused by the Premises or other portions of the Center
becoming out of repair or by defect in or failure of equipment, pipes or
wiring, or broken glass, or by the backing up of drains, or by gas, water,
steam, electricity or oil leaking, escaping or flowing into the Premises, nor
shall Landlord be liable to Tenant or any other person or entity whomsoever for
any loss or damage that may be occasioned by or through the acts or omissions
of other tenants of the Center or of any other persons or entities whomsoever,
excepting only duly authorized employees and agents of Landlord. With respect
to latent or patent defects in the Premises or in the building of which they
form a part, Landlord's liability shall not extend beyond one year from the
date of substantial
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completion of the construction of the Premises, whether or not such defects are
discovered within such one-year period. Tenant shall indemnify and hold
Landlord harmless from any loss, cost, expense or claims arising out of such
injury or damage referred to in this paragraph 6.4.
ARTICLE 7
TENANT ALTERATIONS; TRADE FIXTURES
7.1 Right to Make Alterations. Tenant shall not, without first
obtaining Landlord's written approval, make (or cause to be made) any
alterations to the exterior or interior of the Premises. Tenant shall be
permitted to make nonstructural changes or improvements to the interior of the
Premises in an amount not to exceed $25,000 in any consecutive twelve (12)
month period without first obtaining Landlord's written approval. Any work done
by Tenant shall be done in a good and workmanlike manner, in compliance with
all governmental requirements, to which the Landlord may be a party and in such
manner as to cause a minimum of interference with other construction in
progress and with the transaction of business in the Center. Tenant agrees to
indemnify Landlord and hold it harmless against any loss, liability or damage
resulting from such work, and Tenant shall, if requested by Landlord, furnish
bond or other security satisfactory to Landlord against any such loss,
liability or damage. Landlord shall cooperate, at no cost to Landlord, with
Tenant in securing the necessary permits and authority to perform any such
work. All alterations, additions, improvements and fixtures (other than
unattached, movable trade fixtures) which may be made or installed by either
party upon the Premises shall remain upon and be surrendered with the Premises
and become the property of Landlord at the termination of this Lease, unless
Landlord requests their removal in which event Tenant shall remove the same and
restore the Premises to their original condition at Tenant's expense. Any
linoleum, carpeting or other floor covering which may be cemented or otherwise
affixed to the floor of the Premises is a permanent fixture and shall become
the property of Landlord without credit or compensation to Tenant. Tenant shall
notify Landlord of the names and addresses of all persons and companies
scheduled to perform improvements on the Premises no later than five (5)
business days prior to the commencement of said work.
Tenant agrees that all venting, opening, sealing, waterproofing or any
altering of the roof shall be performed by
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Landlord's roofing contractor at Tenant's expense and that when completed
Tenant shall furnish to Landlord a certificate from Landlord's roofing
contractor that all such alterations approved by Landlord have been completed
in accordance with the plans and specifications therefor approved by Landlord.
7.2 Trade Fixtures. Tenant's personal property, signs and trade
fixtures in the Premises shall be and remain Tenant's property and may be
installed, removed or replaced from time to time, provided that Tenant shall
promptly repair any damage to the Premises caused thereby.
7.3 Liens. Tenant shall pay or cause to be paid all costs for work
done by Tenant or caused to be done by Tenant on the Premises (including work
performed by Landlord or its contractor at Tenant's request following the
commencement of the Term) 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 mechanics' liens, and other liens on account of work done for Tenant or
persons claiming under it, excluding any Tenant Finish Work performed by
Landlord pursuant to the Rider. Tenant hereby agrees to indemnify, defend, and
save Landlord harmless of and from all liability, loss, damage, costs, or
expenses, including attorneys' fees, on account of any claims of any nature
whatsoever including claims or liens of laborers or materialmen or others for
work performed for or materials or supplies furnished to Tenant or persons
claiming under Tenant. Should any liens be filed or recorded against the
Premises or any action affecting the title thereto be commenced as a result of
such work (which term includes the supplying of materials), Tenant shall cause
such liens to be removed of record within twenty (20) days after notice from
Landlord. If Tenant desires to contest any claim of lien, Tenant shall furnish
to Landlord adequate security of at least one hundred fifty percent (150%) of
the amount of the claim, plus estimated costs and interest and, if a final
judgment establishing the validity or existence of any 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 aforesaid, 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.
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ARTICLE 8
INDEMNIFICATION
8.1 Tenant's Indemnity. Tenant shall, during the Term, indemnify,
defend and hold harmless Landlord from any and all actions, claims, demands,
penalties or liabilities which result from Tenant's operations at the Premises
during the Term, including any liens arising out of work contracted for by
Tenant and any claims arising from the breach or default of any obligation
imposed on Tenant by this Lease.
8.2 Landlord's Indemnity. Landlord shall indemnify, defend and hold
harmless Tenant from any and all actions, claims, demands, penalties or
liabilities including any injury to any person or damage to any property on the
Premises or any other claim, liability or expense, arising as the result of any
violation of law by Landlord, or arising from the breach or default by Landlord
of any obligation imposed on Landlord by Tenant according to the terms of this
Lease.
ARTICLE 9
USE CONTROLS AND RESTRICTIONS
9.1 Use of Premises.
A. Tenant shall occupy, use and operate the Premises for the
operation of a natural, retail grocery store and other related and incidental
uses, including but not limited to a delicatessen, juice bar, or the offering
of educational or instructional classes, and for no other purpose. Tenant shall
have full right and authority to use the parking lot in the Center for parking
and periodic sidewalk and tent sales in connection with its operations so long
as such use does not unreasonably interfere with the use of the adjoining
tenant. Subject to the terms and conditions of existing leases in the Center,
as they may be modified, extended, amended or renewed, Tenant shall be entitled
to use all of the Center parking except for fifteen (15) spaces in the front
part of the Center and five (5) spaces in the back or side (at Landlord's
election) portion of the Center. Between the hours of 1:00 a.m. and 4:30 a.m.,
the adjoining tenant shall have first priority to use substantially all of the
parking spaces in the Center. Tenant acknowledges that its use of the parking
area for purposes other than parking is subject to applicable zoning and
building codes and other rules, regulations, laws, and ordinances and codes
which may be
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in effect or promulgated from time to time by applicable governmental agencies
or authorities. Tenant's liability insurance shall govern its use and occupancy
of the common area prior to Landlord's insurance for the same. Tenant shall
cause all trash and debris to be removed and policed and damage promptly
repaired relating to is use of the common area for other than parking.
B. Tenant, at Tenant's expense, shall comply with all laws, codes,
rules, and regulations of the United States, the State of Colorado, or of the
City and County of Denver ("Applicable Laws") now in effect, or which may
hereafter be in effect, which shall impose any duty upon Landlord or Tenant
with respect to the occupation or alteration of the Premises or Tenant's use,
occupation, alteration, or Repairs of the common areas of the Center. Tenant
shall not commit waste or suffer or permit waste to be committed or permit any
nuisance on or in the Premises. Tenant agrees that it will not store, keep,
use, sell, dispose of or offer for sale in, upon or from the Premises any
article or substance which may be prohibited by any insurance policy in force
from time to time covering the Building nor shall Tenant keep, store, produce
or dispose of on, in or from the Premises or the Building any substance which
may be deemed a hazardous substance or infectious waste under any state, local
or federal rule, statute, law, regulation or ordinance as may be promulgated or
amended from time to time.
C. Tenant agrees to operate the above-described business in the
Premises in a commercially reasonable manner during the entire Term
continuously in one hundred percent (100%) of the Premises during each hour of
the entire Term when Tenant is required under this Lease to be open for
business. Said business will be conducted with a commercially reasonably amount
of staff and stock of merchandise, using only such portions of the Premises for
storage and office purposes as are reasonably required.
If Tenant needs to conduct repairs or refurbish the Premises,
which shall require the temporary closing of Tenant's business, then Landlord
agrees not to unreasonably withhold consent to such temporary shut down
provided Tenant gives Landlord prior written notice thereof and otherwise
complies with the provisions of this Lease concerning alterations and repairs.
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D. The business of Tenant shall be conducted in its own name unless
another name shall first submitted to Landlord in writing. Tenant shall conduct
its business in the Premises and will keep the Premises open for business
during hours customary for natural grocery stores in the Denver metro area.
E. The Leased Premises shall not be used for any use except as
specifically set forth in Section 9 nor in any event shall it be used for the
carrying on of any barter, trade, or exchange of goods, or sales through
promotional give-away gimmicks, or any business involving the sale of
second-hand goods, insurance salvage stock, or fire sale stock, and shall not
be used for any auction or pawnshop business, any fire sale, bankruptcy sale,
going-out-of-business sale, moving sale, bulk sale, or any other business
which, because of merchandising methods or otherwise, would tend to lower the
high quality character of the Center nor shall Tenant keep, use, sell, or offer
for sale in or upon the Premises any article which may be prohibited by any
insurance policy in force from time to time covering the Center.
ARTICLE 10
PUBLIC UTILITIES
10.1 Tenant shall separately arrange with the applicable local public
authorities or utilities, as the case may be, for the furnishing of and payment
for all utilities serving the Premises which can be separately metered or
submetered, including but not limited to electrical, sewer, water, natural gas
and telephone as may be required by Tenant in the use of the Premises. Tenant
shall directly pay for all such utilities, the cost of installing any meters or
submeters and any fees or costs for the installation or connection thereof, at
the rates charged for such utilities by said authority or utility or if the
service is separately metered but cannot be paid directly to the utility, then
at the rate charged by Landlord. The failure of Tenant to obtain or to continue
to receive such utilities for any reason whatsoever shall not relieve Tenant of
any of its obligations under the Lease.
ARTICLE 11
MAINTENANCE OF PREMISES AND COMMON AREA
11.1 Tenant's Maintenance of Premises. Tenant shall, during the Term,
maintain, make all necessary repairs to, and keep the
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interior nonstructural portions of the building of the Premises in good
condition and repair, ordinary wear and tear excepted, including the following
equipment and systems, whether on the interior or exterior of the building:
mechanical equipment, electrical equipment, heating, ventilation and air
conditioning ("HVAC") and store front and plate glass. Subject to Landlord's
obligation to make repairs in the event of certain casualties, as set forth in
Article 12 below, Landlord shall have no obligation for the repair or
replacement of any portion of the interior of the Premises which is damaged or
wears out during the term hereof regardless of the cause therefor, including
but not limited to, carpeting, draperies, window coverings, wall coverings,
painting or any of Tenant's property or betterments in the Premises.
11.2 Landlord's Maintenance of Parkinq Lot. Landlord will upgrade,
repair and maintain the parking lot at its sole cost and expense, up to a
maximum of $3,000 per year, with such $3,000 to be accumulated for years in
which none or only some of such amount is expended. Tenant shall be responsible
for its pro-rata cost of such further work as part of CAM. Landlord shall use
reasonable efforts to enforce its roof warranty during the term of this Lease.
11.3 Landlord's Entry. Upon reasonable prior written notice delivered
to Tenant, Landlord may enter the Premises to inspect the same or to perform
Landlord's maintenance and repairs, provided, however, that such entry shall
not unnecessarily interfere with Tenant's use of the Premises nor the
conducting of business thereon. Except in emergencies, such entry shall be
during business hours after Tenant has received such notice and has approved
the time and method of such entry, which approval shall not be unreasonably
withheld.
ARTICLE 12
CASUALTY AND RECONSTRUCTION
12.1 Damaqe to Premises. If, during the Term, the Premises are damaged
by a casualty, such as fire, earthquake or unusual weather or an event causing
sudden damage (in this Article collectively a "Casualty"), the following shall
apply. For the purpose of this Article, "Proceeds" are any proceeds of casualty
insurance Landlord or Tenant is required hereby to carry or damages recoverable
from a third party which are received or recoverable by Landlord or Tenant as a
result of the occurrence
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on account of the damage, less actual, out-of-pocket costs of collection.
If the Premises is damaged by a Casualty, which is a risk covered by
casualty insurance that either Landlord or Tenant is required hereby to carry,
Tenant shall promptly commence and prosecute with diligence reconstruction of
the Premises and its sign, fixtures, equipment and the other items necessary to
reconstruct the Premises to a condition substantially equivalent to its
condition immediately before the Casualty. Tenant's obligation to rebuild as
provided herein shall be subject to insurance proceeds available to Tenant plus
applicable deductibles. Tenant shall use its best efforts to complete such
reconstruction as soon as possible after the casualty. Although Tenant's
insurance shall be primary, Landlord shall deliver to Tenant its insurance
proceeds attributable to said casualty and property owned by Landlord.
12.2 Abatement of Rental. If by a casualty any portion of the Premises
is damaged, and as a result of such damage Tenant's operations are interfered
with to the extent that Gross Sales decrease by seven percent (7%) or more as a
result thereof for a period of five days or more, to the extent of rental
interruption proceeds received by Landlord, Tenant's obligations to pay Minimum
Rent shall abate in a just proportion to the duration and extent of such
interference with Tenant's operations in the Premises, and such abatement shall
continue until the earlier of the time Landlord's repairs are completed or this
Lease terminates. Tenant agrees that during any period of reconstruction or
repair of the Premises it will continue the operation of its business within
the Premises to the extent practicable.
ARTICLE 13
CONDEMNATION; EXERCISE OF POLICE POWER
13.1 Effect of Condemnation. If, after the date hereof all or any
portion of the Premises shall be taken by eminent domain, or substantially
interfered with by governmental action (herein collectively called a "Taking"),
the following shall be applicable:
A. Taking of Entire Market. If the entire Premises shall be taken,
this Lease shall terminate as of the Taking. Landlord shall thereupon repay to
Tenant (subject to deduction
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for all charges then currently due Landlord under the terms of this Lease) its
pro rata share of prepaid rents and other sums due hereunder.
B. Takinq of Premises. If part, but not all, of the Premises
shall be taken by condemnation, Tenant may elect to terminate this Lease as of
the Taking, if said taking is in excess of ten percent (10%) of the Premises
and, in Tenant's reasonable judgment, after such Taking the remaining portion
of the Premises, as constructed or reconstructed, will be unsuitable for the
conduct of Tenant's business. If Tenant elects to so terminate, it shall notify
Landlord within thirty (30) days after the Taking or lose such right to
terminate.
C. Distribution of Award. All compensation awarded for any Taking
(or the proceeds of private sale in lieu thereof) of the Premises or Center
shall be the property of Landlord, and Tenant hereby assigns its interest in
any such award to Landlord; provided, however, Landlord shall have no interest
in any award made to Tenant for loss of business or for the taking of Tenant's
fixtures and other property if a separate award for such items is made to
Tenant.
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ARTICLE 14
ASSIGNMENT; SUBLETTING
14.1 Landlord's Consent.
A. Tenant shall not assign or in any manner transfer this lease or
any estate or interest therein, or sublet the Premises or any part thereof, or
grant any license, concession or other right to occupy any portion of the
Premises without the prior written consent of Landlord, which shall not be
unreasonably withheld. If Tenant is a corporation, the sale or transfer of more
than fifty percent (50%) of the Tenant's stock shall constitute an assignment
for purposes of this lease. Tenant shall pay to Landlord an up front fee of
$200.00 to compensate Landlord for the time and expense of reviewing any
request and documentation regarding assignment or subletting. This
administrative fee shall be in addition to any other monetary or non-monetary
terms associated with the assignment or subletting. Consent by Landlord to one
or more assignment or subtenants shall not operate as a waiver of Landlord's
rights as to any subsequent assignments and sublettings. Notwithstanding any
assignment or subletting, tenant and any guarantor of Tenant's obligations
under this lease shall at all times remain fully responsible and liable for the
payment of the rental herein specified and for compliance with all of its other
obligations under this lease.
B. If Tenant desires at any time to assign this Lease or any
portion thereof, it shall, at least sixty (60) days prior to the proposed
commencement of the proposed assignment, notify Landlord of its desire to do so
and shall submit in writing to Landlord (i) the name of the proposed assignee;
(ii) the nature of the proposed assignee's business to be carried on at the
Premises; and (iii) the last published certified financial statements (or other
evidence of net worth) of the prospective assignee.
C. Tenant shall not mortgage, pledge or otherwise encumber its
interest in this lease or in the Premises.
14.2 Encumbrances. Upon request by Tenant, provided Tenant is not in
default hereunder, Landlord agrees to subordinate its liens (common law and
statutory) that exist or may exist on Tenant's Property, to the properly
perfected and filed lien of
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any bona fide, third party and unaffiliated bank, leasing company or other
party making a loan or granting credit to Tenant.
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ARTICLE 15
DEFAULT OF TENANT
15.1 Default. The occurrence of any one or more of the following events
shall constitute a default under this Lease by Tenant:
A. Non-curable defaults:
1. Any involuntary transfer of Tenant's interest in this Lease
or except as otherwise allowed by this Lease, any voluntary transfer of
Tenant's interest in this Lease, without Owner's prior written consent.
2. If the leasehold interest of Tenant is levied upon under
execution or is attached by process of law and said levy or attachment is not
promptly released.
3. Tenant or any guarantor of Tenant's obligations under this
lease shall become insolvent, or shall make a transfer in fraud of creditors,
or shall make an assignment for the benefit of creditors.
4. Tenant or any guarantor of Tenant's obligations under this
lease shall file a petition under any section or chapter of the National
Bankruptcy Act, as amended, or under any similar law or statute of the United
States or any State thereof; or Tenant or any guarantor of Tenant's obligations
under this lease shall be adjudged bankrupt or insolvent in proceedings filed
against Tenant or any guarantor of Tenant's obligations under this lease.
5. A receiver or Trustee shall be appointed for all Premises
or for all or substantially all of the assets of Tenant or any guarantor of
Tenant's obligations under this lease.
6. Tenant shall desert or vacate any substantial portion of
the Premises.
7. The Business operated by Tenant shall be closed for failure
to pay any State sales tax as required or for any other reason.
B. Curable Defaults
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1. The failure by Tenant to make any payment of Minimum Rent
or any other payment required to be made by Tenant hereunder within ten (10)
days of when due. If Tenant does not fully cure such default within said ten
(10) days.
2. The failure by Tenant to observe or perform any covenants,
conditions or provisions of this Lease to be observed or performed by Tenant,
other than the aforementioned defaults, if Tenant does not fully cure any such
default within 30 days after Tenant has been given notice of such default.
Provided, however, if any such default cannot reasonably be cured within said
30 days (the "Cure Period"), Tenant shall not be in default of this Lease, if
Tenant commences to cure the default within the Cure Period and diligently and
in good faith continues to cure the default until completions and provides
Landlord with evidence of the same.
15.2 Remedies. Upon the occurrence of any such events of default,
Landlord shall have the option to pursue any one or more of the following
remedies without any notice or demand whatsoever:
A. Terminate this lease in which event Tenant shall immediately
surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may,
without prejudice to any other remedy which he may have for possession or
arrearages in rental, enter upon and take possession of the Demised premises
and expel or remove Tenant and any other person who may be occupying said
premises or any part thereof without being liable for prosecution or any claim
of damages therefor.
B. Enter upon and take possession of the Premises and expel or
remove Tenant and any other person who may be occupying said premises or any
part thereof without being liable for prosecution or any claim for damages
therefor with or without having terminated the lease.
C. Enter upon the Premises without being liable for prosecution or
any claim for damages therefor, and do whatever Tenant is obligated to do under
the terms of this lease, and Tenant agrees to reimburse Landlord on demand for
any expenses which Landlord may incur in thus effecting compliance with
Tenant's obligations under this lease, and Tenant further agrees
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that Landlord shall not be liable for any damages resulting to the Tenant from
such action.
D. Alter all locks and other security devices at the Premises
without terminating this lease.
15.3 Exercise by Landlord of any one or more remedies hereunder
granted or otherwise available shall not be deemed to be an acceptance of
surrender of the Premises by Tenant, whether by agreement or by operation of
law, it being understood that such surrender can be effected only by the
written agreement of Landlord and Tenant. No such alteration of locks or other
security devises and no removal or other exercise of dominion by Landlord over
the property of Tenant or others at the Premises shall be deemed unauthorized
or constitute a conversion, Tenant hereby consenting, after any event of
default, to the aforesaid exercise of dominion over Tenant's property within
the Premises. All claims for damages by reason of such reentry and/or
repossession and/or alteration of locks or other security devices are hereby
waived, as are all claims for damages by reason of any distress warrant,
forcible detainer proceedings, sequestration proceedings or other legal
process. Tenant agrees that any reentry by Landlord may be pursuant to judgment
obtained in forcible detainer proceedings or other legal proceedings or without
the necessity for any legal proceedings, as Landlord may elect, and Landlord
shall not be liable in trespass or otherwise.
15.4 In the event Landlord elects to terminate the lease by reason of
an event of default, then notwithstanding such termination, Tenant shall be
liable for and shall pay to Landlord, at the address specified for notice to
Landlord herein the sum of all rental and other indebtedness accrued to date of
such termination, plus, as damages, an amount equal to the difference between
(1) the minimum rent plus Tenant's CAM charges hereunder for the remaining
portion of the lease Term (had such term not been terminated by Landlord prior
to the date of expiration), and (2) the then present value of the then fair
rental value of the Premises for such period.
15.5 In the event that Landlord elects to repossess the Premises
without terminating the lease, then Tenant shall be liable for and shall pay to
Landlord at the address specified for notice to Landlord herein all rental and
other indebtedness accrued to the date of such repossession, plus rental
required to be paid by Tenant to Landlord during the remainder of the lease
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term until the date of expiration of the term as stated in Article 1 diminished
by any net sums thereafter received by Landlord through reletting the Premises
during said period (after deducting expenses incurred by Landlord as provided
in Section 15.6 hereof). In no event shall Tenant be entitled to any excess of
any rental obtained by reletting over and above the rental herein reserved.
Actions to collect amounts due by Tenant to Landlord as provided in this
Section 15 may be brought from time to time, on one or more occasions, without
the necessity of Landlord's waiting until expiration of the lease term.
15.6 In case of any event of default or breach by Tenant, Tenant shall
also be liable for and shall pay to Landlord, at the address specified for
notice to Landlord herein. In addition to any sum provided to be paid above,
commercially reasonably brokers' fees incurred by Landlord in connection with
reletting the whole or any part of the Premises; the costs of removing and
storing Tenant's or other occupant's property; the costs of repairing,
altering, remodeling or otherwise putting the Premises into condition
acceptable to a new tenant or tenants, and all reasonable expenses incurred by
Landlord in enforcing or defending Landlord's rights and/or remedies including
reasonable attorneys' fees.
15.7 In the event of termination or repossession of the Premises for
an event of default, Landlord may relet the whole or any portion of the
Premises for any period, to any tenant, and for any use and purpose.
15.8 If Tenant should fail to make any payment or cure any default
hereunder within the time herein permitted, Landlord, without being under any
obligation to do so and without thereby waiving such default, may make such
payment and/or remedy such other default for the account of Tenant (and enter
the Premises for such purpose), and thereupon Tenant shall be obligated to, and
hereby agrees, to pay Landlord, upon demand, all costs, expenses and
disbursements (including reasonable attorneys' fees) incurred by Landlord in
taking such remedial action.
15.9 In the event that Landlord shall have taken possession of the
Premises pursuant to the authority herein granted, then Landlord shall have the
right to keep in place and use all of the furniture, fixtures and equipment of
the Premises, including that which is owned by or leased to Tenant at all times
prior to any foreclosure thereon by Landlord or repossession thereof by any
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lessor thereof or third party having a lien thereon, Landlord shall also have
the right to remove from the Premises (without the necessity of obtaining a
distress warrant, writ of sequestration or other legal process) all or any
portion of such furniture, fixtures, equipment and other property located
thereon and place same in storage at any premises within the County in which
the Premises is located: and in such event, Tenant shall be liable to Landlord
for costs incurred by Landlord in connection with such removal and storage and
shall indemnify and hold Landlord harmless from all loss, damage, cost, expense
and liability in connection with such removal and storage. Landlord shall also
have the right to relinquish possession of all or any portion of such
furniture, fixtures, equipment and other property to any person ("Claimant")
claiming to be entitled to possession thereof who presents to Landlord a copy
of any instrument represented to Landlord by Claimant to have been executed by
Tenant (or any predecessor of Tenant) granting Claimant the right under various
circumstances to take possession of such furniture, fixtures, equipment or
other property, without the necessity on the part of Landlord to inquire into
the authenticity of said instrument's copy of Tenant's or Tenant's
predecessor's signature thereon and without the necessity of Landlord's making
any nature of investigation or inquiry as to the validity of the factual OI
legal basis upon which Claimant purports to act: and Tenant agrees to indemnify
and hold Landlord harmless from all cost, expense, loss, damage and liability
incident to Landlord's relinquishment of possession of all or any portion of
such furniture, fixtures, equipment or other Property to Claimant. The rights
of Landlord herein stated shall be in addition to any and all other rights
which Landlord has or may hereafter have at law or in equity; and Tenant
stipulates and agrees that the rights herein granted Landlord are commercially
reasonable.
ARTICLE 16
DEFAULT OF LANDLORD
16.1 Events of Default. The following are defaults by Landlord:
A. Landlord's failure, when required Hereunder, to pay any sum
that Landlord is required to pay or provide under this Lease if such failure
continues for fifteen (15) days after written notice of such failure from
Tenant to Landlord;
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B. Landlord's failure, when required hereunder, to perform any
other obligation of Landlord if such failure continues for thirty (30) days
after written notice from Tenant to Landlord of such default, provided that if
such failure cannot reasonably be cured by the end of such thirty (30) day
period, Landlord shall not be in default if Landlord commences reasonable
efforts to cure such failure within the thirty (30) day period and thereafter
diligently prosecutes such cure to completion.
16.2 Tenant's Remedies. In the event of any default by Landlord,
Tenant's exclusive remedy shall be an action for damages (Tenant hereby waiving
the benefit of any laws granting it a lien upon the property of the Landlord
and/or upon rent due Landlord), but prior to any such action Tenant will give
Landlord written notice specifying such default with particularity, and
Landlord shall thereupon have thirty (30) days in which to cure any such
default. Unless and until Landlord fails to so cure any default after such
notice Tenant shalt not have any remedy or cause of action by reason thereof.
All obligations of Landlord hereunder will be construed as covenants, not
conditions; and all such obligations will be binding upon Landlord only during
the period of its possession of the Center and not thereafter.
The term "Landlord" shall mean only the owner, for the time being of
the Center, and in the event of transfer by such owner of its interest in the
Center, such owner shall thereupon be released and discharged from all
covenants and obligations of the Landlord thereafter accruing, but such
covenants and obligations shall be binding during the lease term upon each new
owner for the duration of such owner's ownership.
Notwithstanding any other provision hereof, Landlord shall not have
any personal liability hereunder. In the event of any breach or default by
Landlord in any term or provision of this lease, Tenant agrees to look solely
to the equity or interest then owned by Landlord in the land and improvements
which constitute the Center; however, in no event, shall any deficiency
judgment or any money judgment of any kind be sought or obtained against any
Party Landlord.
ARTICLE 17
SERVICE OF NOTICE
17.1 Manner of Service and Addresses. All notices, rental agreements,
approvals, consents or demands (herein collectively
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"Notice"), which either party desires to serve upon the other pursuant to this
Lease must be in writing and, shall be deemed served if enclosed in a sealed
envelope and delivered or mailed as provided herein to the specified
address(es). Notices shall be addressed to Landlord at:
AGF Property Management Corp.
410 17th Street, Suite 800
Denver, CO 80202
Notices shall be addressed to Tenant at:
Wild Oats Markets, Inc.
1668 Valtec Lane
Boulder, Co. 80301
ATT: Michael C. Gilliland
Any mailed Notice shall be deposited in the United States Post Office,
postage prepaid, registered or certified, return receipt requested. A Notice
shall be effective upon delivery to the address designated by a party for the
receipt of Notices. Either party may change its foregoing address by a Notice
of such change to the other party.
ARTICLE 18
AUTHORITY; OUIET ENJOYMENT; ENCUMBRANCES
18.1 Ouiet Enjoyment. Landlord further warrants that so long as Tenant
is not in default of this Lease, then Tenant shall, during the Term hereof,
subject to the terms and conditions of this Lease, freely, peaceably and
quietly occupy and enjoy the full possession of the Premises, together with all
rights and privileges herein granted.
18.2 Subordination.
A. This Lease, at Landlord's option, shall be subordinate to any
mortgage or deed of trust (now or hereafter placed upon the Center, or any
portion thereof), including any amendment, modification, or restatement of any
of such documents, and to any and all advances made under any mortgage or deed
of trust and to all renewals, modifications, consolidations, replacements, and
extensions thereof, provided that as long as Tenant is not in default under
this Lease, no foreclosure of, deed given in lieu of foreclosure of, or sale
under the
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encumbrance, and no steps or procedures taken under the encumbrance, shall
terminate Tenant's rights under this Lease including its rights of quiet
enjoyment. Tenant agrees that with respect to any of the foregoing documents,
no documentation, other than this Lease, shall be required to evidence such
subordination. Landlord hereby represents that as of the date hereof, there are
no deeds of trust secured by the Center. If Landlord causes a deed of trust to
be placed against the Center, then Landlord shall prior to the execution
thereof deliver to Tenant a nondisturbance agreement from the holder of said
deed of trust in accordance with the terms of this subsection 18.2.A.
B. If any holder of a mortgage or deed of trust shall elect to
have this Lease superior to the lien of the holder's mortgage or deed of trust
and shall give written notice thereof to Tenant, this Lease shall be deemed
prior to such mortgage or deed of trust, whether this Lease is dated prior or
subsequent to the date of said mortgage or deed of trust or the date of
recording thereof.
C. In confirmation of such subordination or superior position,
as the case may be, Tenant agrees to execute such documents as may be required
by Landlord or its Mortgagee to evidence the subordination of its interest
herein to any of the documents described above, or to evidence that this Lease
is prior to the lien of any mortgage or deed of trust, as the case may be, and
failing to do so within ten (10) days after written demand, Tenant does hereby
make, constitute, and irrevocably appoint Landlord as Tenant's attorney-in-fact
and in Tenant's name, place, and stead, to do so.
D. Tenant hereby agrees to attorn to all successor owners of
the Center, whether or not such ownership is acquired as a result of a sale,
through foreclosure of a deed of trust or mortgage, or otherwise.
ARTICLE 19
REMOVAL OF TENANT'S PROPERTY
A. All movable furniture and personal effects of Tenant not removed
from the Premises upon the vacation or abandonment thereof or upon the
termination of this Lease for any cause whatsoever 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
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person and without obligation to account therefor and Tenant shall pay Lands
expenses incurred in connection with the disposition of such property.
B. Subject to Section 14.2, Tenant hereby conveys a security interest
to Landlord in all of Tenant's Property, except its inventory of grocery
products, situated on the Premises as security for the payment of all rents and
other amounts due or to become due hereunder, and Tenant shall execute such
documents as Landlord may reasonably require to evidence and perfect Landlord's
security interest therein. For this purpose, this Lease shall be considered to
be a security agreement covering such property and Landlord, upon the
occurrence of an event of default hereunder, may exercise any rights of a
secured party under the Uniform Commercial Code of the State of Colorado. Such
security interest shall be prior and superior to any other security interest,
except as otherwise provided herein. Landlord's security interest shall extend
to replacements of property removed from the Premises and to the proceeds from
the sale of any Tenant's Property.
ARTICLE 20
GENERAL
20.1 Riqhts Cumulative. Each and all of the rights, powers, options and
remedies of Landlord and Tenant contained herein shall be cumulative and not
exclusive.
20.2 Delay Not Waiver. Any delay of Landlord or Tenant in enforcing any
right or remedy shall not waive, affect, diminish, suspend or exhaust any right
or remedy. No act or omission, or series of acts or omissions, by either party
as to any failure of the other to fully perform this Lease shall be deemed to
be a waiver by such party of the right at all times thereafter to insist upon
full and complete performance and in accordance with this Lease.
20.3 Modifications Only by Writing. None of the provisions of this
Lease shall be changed or waived except by a written instrument executed by the
parties to be bound.
20.4 Successors and Assiqns. Subject to the prohibitions herein on
assignment or transfer, each of the covenants and conditions hereof shall inure
to the benefit of and shall bind (as the case may be) each of the successors
and assigns of the
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respective parties hereto, and any reference herein to Landlord or Tenant shall
include their respective successors and assigns.
20.5 Captions. The captions of Articles and Sections of this lease
are for convenience only and do not limit or amplify the covenants and
conditions of this Lease.
20.6 Construction of Lanquaqe of Lease; Governing Law. This Lease
shall be construed according to its fair meaning, and not strictly for or
against Landlord or Tenant. This Lease shall be governed by, and construed in
accordance with, the laws of the State of Colorado.
20.7 Estopped Certificate. Each party shall, within five (5) business
days' written request from the other party, execute to the requesting party a
written statement certifying, to the best of its knowledge, whether or not this
Lease is modified and whether or not this Lease is in full force and effect
(or, if there have been modifications, stating those modifications), the date
to which rental and any other charges have been paid, whether or not, to its
knowledge, either party has failed to perform an obligation under this Lease,
and if so, the nature of the failure, and such other items as said requesting
party may reasonably request. Such a statement may be relied upon by a party or
any transferee, mortgagee, or encumbrancer. A statement hereunder may be
requested by either party from the other at any time and from time to time.
20.8 Entire Aqreement. This instrument reflects and merges all of the
prior agreements and negotiations of the parties hereto, and contains their
entire agreement.
20.9 Time of Essence: Extensions. Time is of the essence of this
instrument, although any period of time herein may be extended in the event the
parties so agree in writing.
20.10 Other Documents. Each party shall furnish to the other party,
upon request, such other documents as may be reasonably required in order to
carry out the provisions of this Lease.
20.11 Exhibits. The Exhibits herein referred to are attached and made a
part hereof as if fully set forth.
20.12 Force Maieure. If either party except as otherwise herein
specifically provided, shall be delayed or hindered in or
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prevented from the performance of any act required hereunder by reason of
strikes, lockouts, labor troubles, inability to procure materials, failure of
power, restrictive governmental laws or regulations, riots, insurrection, war
or other reason of a like nature not the fault of the party delayed in
performing work or doing acts required under the terms of this Lease, then
performance of such acts shall be excused for the period of delay and the
period for the performance of any such act shall be extended for a period
equivalent to the period of such delay. The provisions of this Article shall
not operate to excuse Tenant from the prompt payment of Minimum Rent,
Percentage Rent or any other payments required by the terms of this Lease.
20.13 Additional Space. Landlord hereby grants to Tenant a right of
first offer (the "Right of First Offer") to lease approximately 6,000 rentable
square feet of space adjacent to the Premises in the Center (the "Right of
First Offer Space") as depicted on EXHIBIT C attached hereto on the following
basis:
A. Tenant shall have ten (10) days after being notified by
Landlord, in writing, of Landlord's desire to lease the Right of First Offer
Space (which notice is hereinafter referred to as "Landlord's Notice") within
which to notify Landlord, in writing, if Tenant desires to exercise its Right
of First Offer as to such space. Tenant's Right of First Offer hereunder shall
be subject and subordinate to all rights of extension, expansion, or first
offer or refusal as to the Right of First Offer Space in favor of other tenants
in the Center in existence as of the date of this Lease. Landlord shall have
the right to determine the exact square footage of the Right of First Offer
Space at the time such space or any portion thereof is offered to Tenant
pursuant to the provisions of this Paragraph. Tenant must take all of the Right
of First Offer Space and may not elect to lease a portion thereof.
B. Such space shall be offered to Tenant upon the terms and
conditions of this Lease; however, the Minimum Rent and Pro Rata Share shall be
increased based upon number of square feet in the Right of First Offer Space.
C. If Tenant does not notify Landlord within such ten (10) day
period, it shall be conclusively presumed that Tenant does not desire to
exercise its Right of First Offer, Landlord shall be free to lease such space
to anyone whom it desires, and Tenant shall have no further rights with respect
to such space.
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D. If Tenant elects to add the Right of First Offer Space to
the Lease, Tenant will accept such space in its "as is" condition without any
remodeling work or fix-up work being performed by Landlord. All costs in
connection with preparing the Right of First Offer Space for occupancy by
Tenant, including but not limited to costs of compliance with all applicable
laws, codes, or ordinances, shall be borne by Tenant.
E. All notifications contemplated by this Paragraph, whether
from Tenant to Landlord, or from Landlord to Tenant, shall be in writing and
shall be given in the manner provided in the Lease.
G. Tenant's right to exercise the Right of First Offer shall
be conditioned on: (i) Tenant not being in default under the Lease at the time
of the exercise of the Right of First Offer or as of the date on which Tenant's
occupancy of the Right of First Offer Space is scheduled to commence; (ii)
Tenant not having subleased more than twenty-five percent (25%) of the
Premises, assigned its interest under the Lease, or having vacated more than
twenty-five percent (25%) of the Premises as of the date on which Tenant's
occupancy of the Right of First Offer Space is scheduled to commence; and (iii)
there being at least two (2) years remaining in the Term. Notwithstanding the
foregoing, if there are less than two (2) years remaining in the Term but the
Right of First Offer would otherwise be available to Tenant hereunder and an
option to extend the Term is then available to Tenant under the other
provisions of this Lease, Tenant shall have the right to exercise its Right of
First Offer provided that Tenant simultaneously exercises its option to extend
the Term.
20.14 Riqht to Purchase. Provided Tenant is not in default hereunder,
at any time during the first twenty-four (24) months of the Lease Term, Tenant
shall have the right to purchase the Center for the amount of $2,250,000,
payable by wire transfer of good funds as directed by Landlord. Tenant must
provide Landlord with no less than sixty (60) days advance written notice of
its intent to so purchase. If Tenant does not notify Landlord within such sixty
(60) day period, it shall be conclusively presumed that Tenant does not desire
to exercise its right to purchase, and Tenant shall have no further rights to
purchase the same. At closing, the parties shall prorate all rents, taxes,
utilities and similar items. If Tenant exercises such right, the property
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shall be transferred in its then "as is" condition and subject to all existing
leases and tenancies, and the parties shall enter into an assignment and
assumption agreement with regard to all outstanding leases, liabilities and
obligations of Landlord relating to the Center.
20.15 Authority. All persons executing this Lease represent and
warrant that they have full power and authority to do so on behalf of their
respective party.
20.16 This Lease shall be construed as though the covenants herein
between Landlord and Tenant are independent and not dependent and Tenant shall
not be entitled to any setoff of the rent or other amounts owing hereunder
against Landlord if Landlord fails to perform its obligations set forth herein;
provided, however, the foregoing shall in no way impair the right of Tenant to
commence a separate action against Landlord for any violation by Landlord of
the provisions hereof so long as notice is first given to Landlord and an
opportunity granted to Landlord to correct such violation as provided in
herein.
20.17 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 and 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.
20.18 Brokerage. Tenant hereby represents and warrants that Tenant has
not employed any broker in regard to this Lease and that Tenant has no
knowledge of any broker being instrumental in bringing about this Lease
transaction, except for CB Commercial. Tenant shall indemnify Landlord against
any expense incurred by Landlord as a result of any claim for brokerage or
other commissions made by any broker, finder, or agent, whether or not
meritorious, employed by Tenant or claiming by, through, or under Tenant.
20.19 Recording. Tenant agrees not to place this Lease of record
unless requested to execute a Memorandum of Lease by
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Landlord, which may, at the Landlord's option, be placed of record. In
addition, if requested by the Landlord, the Tenant will execute a memorandum of
lease to be filed with the Colorado Department of Revenue on such form as may
be prescribed by said department within ten (10) days after the execution of
this Lease or any other such memorandum so that the Landlord may avail itself
of the provisions of the statutes such as Section 39-22-604(7)(c) of the
Colorado Revised Statutes (1994). Any recording by Tenant without Landlord's
prior written consent shall be deemed a default hereof.
20.20 Asbestos Remediation Allowance. Landlord hereby grants to Tenant
an asbestos remediation allowance equal to $25,500.00 (the "Allowance"). Said
Allowance shall be paid to Tenant upon completion actions approved by Landlord
designed to remediate the asbestos in the floor tiles or mastic in the Premises
(the "Remediation"). Tenant's contractor and contract for the Remediation shall
be subject to Landlord prior review and approval. If the cost of the
Remediation is in excess of the Allowance, then Tenant agrees that it shall pay
for said work in excess of the Allowance. The Remediation shall be performed in
accordance with the terms and conditions of this Lease for the performance of
any improvements in the Premises. Prior to receipt of the Allowance, Tenant
shall provide Landlord with evidence reasonably acceptable to Landlord of
Tenant's compliance with the terms and conditions hereof, including, without
limitation, lien releases from contractors and subcontractors, construction
permits, and asbestos disposal manifests.
20.21 Termination Right. Tenant shall have the right to terminate this
Lease by delivering written notice to Landlord on or before October 28, 1994,
provided the estimated cost of performing the Remediation (based upon three
bids) is in excess of $37,200. Tenant's notice shall contain copies of the
bids. If Landlord notifies Tenant within three (3) business days after
receiving Tenant's notice of its election to terminate, that Landlord will pay
the difference between the estimated cost of Remediation and $37,200, then
Tenant's termination notice shall be void and of no force or effect. If no
notice is given by Tenant to Landlord as provided above, then Tenants right to
terminate as contained in this section 20.21 shall terminate and be of no force
or effect.
IN WITNESS WHEREOF, the parties have executed this Lease effective as
of the date first set forth above.
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Landlord: AGF Property Management Corp.
By: /s/ PRESIDENT, AGF PROPERTY
MANAGEMENT CORP.
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Its: President
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Tenant: Wild Oats Markets, Inc.
By: Bennett Bertoli
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Its: Assistant Secretary
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EXHIBIT A
PREMISES
(Site layout of premise, including building and lot, showing its borders with
Pearl Street and Washington Street)
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EXHIBIT B
CENTER
BEGINNING AT A POINT ON THE WEST LINE OF LOT 2, BLOCK 2, SHERMAN SUBDIVISION,
ACCORDING TO THE RECORDED PLAT THEREOF, SAID POINT LYING 3.3 FEET NORTH OF THE
SOUTHWEST CORNER OF SAID LOT 2, THENCE EAST AND PARALLEL TO THE SOUTH LINE OF
SAID LOT 2, 132.50 FEET; THENCE SOUTH AT RIGHT ANGLE 53.30 FEET; THENCE EAST AT
RIGHT ANGLE 132.50 FEET TO A POINT BEING THE NORTHEAST CORNER OF LOT 44 OF SAID
BLOCK 2; THENCE SOUTH AT RIGHT ANGLE AND ALONG THE EAST LINE OF SAID BLOCK 2,
437.5 FEET; THENCE WEST AT RIGHT ANGLE 12.14 FEET; THENCE RIGHT AN ANGLE OF 45
DEGREES 49 MINUTES 45 SECONDS, 104.56 FEET; THENCE LEFT AN ANGLE OF 2 DEGREES
40 MINUTES 36 SECONDS, 54.33 FEET; THENCE RIGHT AN ANGLE OF 6 DEGREES 11
MINUTES 10 SECONDS 214.87 FEET TO A POINT ON THE WEST LINE OF LOT 11 OF SAID
BLOCK 2 AND LYING 13.00 FEET NORTH OF THE SOUTHWEST CORNER OF SAID LOT 11;
THENCE RIGHT AN ANGLE OF 40 DEGREES 39 MINUETS 33 SECONDS AND ALONG THE WEST
LINE OF SAID BLOCK 2, 215.30 FEET TO THE POINT OF BEGINNING, CITY AND COUNTY OF
DENVER, STATE OF COLORADO. TOGETHER WITH AN EASEMENT AND RIGHT-OF-WAY FOR
VEHICULAR AND PEDESTRIAN TRAFFIC ACROSS, IN AND THROUGH THE FOLLOWING PROPERTY;
ALL THAT PORTION OF THE VACATED ALLEY LYING NORTH OF THE ABOVE DESCRIBED
PROPERTY TO EAST MISSISSIPPI AVE., AS SET FORTH IN INSTRUMENTS RECORDED APRIL
7, 1966 IN BOOK 9584 AT PAGE 87 AND RECORDED JUNE 8, 1966 IN BOOK 9608 AT PAGE
620, COUNTY OF DENVER, STATE OF COLORADO.
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EXHIBIT C
RIGHT OF FIRST OFFER SPACE
(Site layout of premise, including building and lot, showing its borders with
Pearl Street and Washington Street, noting right of first offer space)
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