Loading...
HomeMy WebLinkAboutresolution.council.028-97 . . e RESOLUTION #28 Series of 1997 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, AUTHORIZING EXECUTION OF A LEASE WITH THIN AIR FOODS FOR THE TENTH HOLE BAR & GRILLE AND AUTHORIZING THE CITY MANAGER TO EXECUTE SAID LEASE ON BEHALF OF THE CITY-oF-ASPEN / WHEREAS, there has been submitted to the City Council a lease between . the City of Aspen, Colorado, and Thin Air Foods Inc. a copy of which lease is annexed hereto and made a part hereof. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO: Section 1 That the City Council of the City of Aspen hereby approves that lease between the City of Aspen, Colorado, and Thin Air Foods, Inc. for the Tenth Hole Bar & Grille, a copy of which is annexed hereto and incorporated here, and does hereby authorize the City Manager to execute said lease on behalf of the City of Aspen. Dated: 5/) ;:2 , 1997 f John S. ennett, Mayo~ f?~k.e L 'E. f21~Af d .s Y'V\'1o I {to ~ e I, Kathryn S. Koch, duly appointed and acting City Clerk do certify that the foregoing is a true and accurate copy of that resolution adopted by the City Council of the City of Aspen, Colorado, at a meeting held April 28, 1997. ~t~~ f!i!11fdwA ~ Kathryn S. Kdch, ity C erk . e e e . LEASE AGREEMENT THIS LEASE AGREEMENT is made and entered into this Io.n-l day of $,ctC 1997 by and between The City of Aspen, 130 South Galena Street, Aspen, Colorado 81611 ("Landlord") and Thin Air Foods, Inc., a Colorado corporation, c/o George Schermerhorn, P.O. Box 8883, Aspen, Colorado 81612 ("Tenant"). WIT N E SSE T H: WHEREAS, Landlord is the lessee of the real property and all of the improvements thereon, known as Truscott Place, located in Pitkin County, Colorado and described on Exhibit A attached hereto and incorporated herein by this reference ("Truscott Place"); and, WHEREAS, the Tenant currently occupies a portion of Truscott Place pursuant to a Lease Agreement dated May 15, 1995; and, WHEREAS, the Landlord desires to remodel portion of Truscott Place that will require Tenant to move its operations within Truscott Place; and, WHEREAS, the parties desire to enter into this new Lease Agreement to facilitate the remodeling and relocation of Tenant's operation; and, WHEREAS, Landlord desires to sublease the lease premises, consisting of approximately 3,043 square feet (kitchen area 1,096 square feet, bathrooms 119 square feet, and restaurant/bar area 1,828 square feet) as delineated on Exhibit B attached hereto and incorporated herein and refelTed to herein as the "premises" or the "lease premises", in accordance with the terms and conditions contained in this Lease Agreement; and, WHEREAS, Tenant desires to lease from Landlord the lease premises in accordance with the tenns and conditions contained in this Lease Agreement; NOW, THEREFORE, for and in consideration of the payments to be made hereunder, and in fUliher consideration of the terms, conditions, covenants and mutual promises contained herein, the parties hereto agree as follows: I. Lease of Premises. Landlord does hereby agree to remodel, at landlord's expense, that portion of Truscott Place described below, prior to the commencement of the 1997 golf season, and does hereby rent to Tenant the following described premises, subject to the covenants and conditions hereinafter contained, to wit: - ..,,' , . That portion of Truscott Place, Pitkin County, Colorado, delineated and outlined in red on Exhibit B attached hereto and incorporated herein, consisting of the restaurant facility, complete with bar, seating and dining area and kitchen, located therein, constituting approximately 3,043 square feet, for the term, at the rents, and upon the conditions and covenants hereinafter set forth., Talcing possession of the lease premises by Tenant shall constitute acknowledgment that such premises 'are in good condition and neither the City of Aspen nor Landlord shall be required to malce any alterations thereto, unless agreed to in advance and in writing by the City of Aspen and Landlord. 2. Equipment Provided bv Landlord. The Landlord shall furnish Tenant with those items of moveable equipment (equipment that is not attached or otherwise built in to the premises) described in the inventory appended hereto as Exhibit C. Other articles deemed necessary by Tenant for its use of the premises but not enumerated in Exhibit C shall be, furnished by Tenant, at Tenant's expense. All items of equipment set forth in Exhibit C shall be maintained in good working order by Tenant, at Tenant's own cost and expense, and shall be returned to the Landlord upon the termination of this Lease in the same condition as when accepted by Tenant, ordinary wear and tear excepted. If the equipment is determined to be fully depreciated or incapable of repair, Tenant shall not be required to purchase a new piece of equipment nor shall the Landlord be obligated to purchase new equipment or substitute equipment that can't be repaired with working equipment. 3. Tenn. Unless sooner terminated, as provided herein, the term of the Lease shall be for a period of three (3) years. The lease term shall commence May 15, 1997, and shall end on October 15, 1999. Tenant's occupancy of the lease premises during this term shall be limited by paragraph 4, below. The parties hereto acknowledge that Landlord currently intends to construct upon the Aspen municipal Golf Course a restaurant facility that will render Tenant's operation superfluous. Landlord currently plans to construct said facility to be operational by the end of the term of this lease Agreement. In the event that Landlord does not construct and open for business said restaurant facility on or before May 15, 2000, the term of this lease shall be automatically extended for an additional year; to wit: October 15, 2000. Similarly, in the event that Landlord does not construct and open for business said restaurant facility on or before May 15 of subsequent years, the term of this lease shall be extended to October 15 of that year; provided, however, that in no event shall the term ofthis lease be extended beyond October 15, 2003. In the event that said restaurant facility is constructed and open for business by Landlord before May 15, 1999, Landlord shall pay to Tenant a sum equal to the average of Tenant's net profits for the previous two seasons as and for all damages caused by the early construction and operation of said restaurant facility. 4. Occupancy of the Lease Premises. Tenant shall be entitled to occupy the lease premises only for the five month period from May 15th through October 15th (with the exception of upper office facility which will be utilized for storage year around) of each year of the lease term. During the remainder of each year during the lease term, Landlord shall have the right to sublease the lease premises to other Tenants, on a long term or short term basis, at the . . ..' Ii!!,_ sole discretion of Landlord and without any compensation to Tenant. In the event that Landlord subleases the lease premises during the off season to a third party, Landlord agrees to return the lease premises to Tenant in the same condition as it is in at the end of the summer season, normal wear and tear expected. 5. Use. Tenant shall not occupy or use the lease premises or any part thereof, nor permit or suffer the same to be occupied or used for any purpose except to provide food services to golfers and others in the form of hot and cold snacks, sandwiches, drinks and the like. Hot sandwiches, hamburgers, etc. will be served Memorial day to Labor day weather permitting at the outdoor grille. Morning food service will include muffins, coffee, and orange juice. Lunch and afternoon food service will include fresh sandwiches, hamburgers, hot dogs, and various hot and cold snacks and drinks. In addition, Tenant may use the lease premises to cater occasional private parties during periods other than the Occupancy Period defined in paragraph 4, above, with the Landlord's prior consent. In no event shall Tenant use or operate the lease premises as a full service restaurant withont Landlord's written consent, which consent may be withhold in Landlord's sole discretion and, further, which consent may require renegotiation of the rent due hereunder. Landlord's consent shall be required as to any change in the use of the lease premises by Tenant. Tenant shall comply promptly with all applicable statutes, ordinances, rules, regulations, orders and requirements relating to the use of the lease premises, including any rules or regulations imposed by the City of Aspen as the Landlord under the Master Lease. Tenant shall not use nor permit the use of the lease premises in any manner that will tend to create a nuisance or tend to disturb other tenants or occupants of the improvements or adjacent properties thereto. 6. Service to Patrons/No Discrimination. The service provided to. patrons by Tenant shall be rendered courteously and efficiently. Landlord reserves the right to prohibit the sale of any item that it deems objectionable, and shall have the right to order the improvement of the quality of either the merchandise or the services rendered. Tenant shall not discriminate against any employee or applicant for employment because of race, religion, color, creed, ancestry, sex, age, sexual orientation or national origin. Tenant and Tenant's employees shall not discriminate against any person because of race, religion, color, creed, ancestry, sex, age, sexual orientation or national origin by refusing to furnish such person any service or privilege offered to or enj oyed by the general public. Neither Tenant nor Tenant's employees shall publicize the services provided hereunder in any manner that would directly or inferentially reflect on the acceptability of the patrons of any person because of race, religion, color, creed, ancestry, sex, age, sexual orientation or national origin. 7. Hours of Operation. Tenant shall operate the concession seven (7) days a week and, at a minimum, shall be open to the public from the opening date to July 3rd between 9:00 a.m. to 7:00 p.m. and from July 4th through September 1st from 8:00 a.m. to 7:00 p.m.; provided however, that Tenant may close the concession during periods of inclement weather. Tenant may, at Tenant's option, remain open for additional hours. - e . 8. Parking. Tenant's patrons shall be able to use the public parking lot available for patrons of the Aspen Golf Course. At no time, however, shall Tenant's rights under this Lease extend to parking areas designated for use by the residential tenants of Truscott Place. 9. Rent. The base rent for the three year term of this Lease shall be 11 % of gross income minus sale.s tax and employee meal discounts, commencing on May 15th of each year of this lease agreement and continuing on the fifteenth day of each calendar month thereafter, through September 15th of each year of this lease agreement. On or before November 1st of each year of this lease agreement, commencing on November 1, 1997, Tenant shall provide the Landlord with financial information, certified by Tenant's accountant, showing Tenant's gross revenue for that lease year. This rent shall be paid in monthly installments, commencing on inuing on June 10, of each year and continuing the tenth day of each calendar month thereafter through October 15, 1999. 10. Accounting. For purposes of this lease agreement, gross revenues shall be defined as gross sales less sales taxes, less employee meal discounts. In addition to the accounting to be provided to Landlord on November I st of each year of this lease agreement pursuant to paragraph 9, above, Tenant shall provide Landlord: a) with copies of the quarterly sales and withholding tax statements it provides to the appropriate authorities, with a notation thereon by Tenant's accountants reflecting the portion of the income reflected on those returns that is derived from the gross sales; and, b) income statements prepared by Tenant's accountants reflecting the gross sales and sales taxes paid by Tenant for each Occupancy Period. II. Late Charges. The Tenant hereby acknowledges that late payment by Tenant to Landlord of rent or other sums due hereunder will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which shall be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges and the late charges which may be imposed upon Landlord by terms of the Master Lease or any mortgage or trust . deed covering the lease premises. Accordingly, if any bona fide installment of rent or any other sum due from Tenant hereunder shall not be received by Landlord or Landlord's designee on or before the twentieth (20th) day of each calendar month that a rent payment is due, then Tenant shall pay to Landlord a late charge of twenty percent (20%) on such overdue amount. The parties hereby agree that such a late charge will represent a fair and reasonable settlement of the cost that Landlord would incur by reason of the late payment by Tenant. Acceptance of such late charges by Landlord shall in no event constitute a waiver of Tenant's default with respect to such overdue amount, nor prevent Landlord from exercising any of the other rights and remedies granted hereunder unless the entire amount due, plus late charge, is accepted by Landlord. In addition, any sum for which the Tenant shall be obligated to the Landlord, which is not received on the due date thereof, shall bear interest at the rate of twenty-five percent (25%) per annum from and after the due date until paid. . ~ . ..,. " 12. Personal and Real Property Taxes. Tenant shall pay, as additional rent hereunder, . all personal property taxes assessed against the personal property used by Tenant and located on the lease premises. Likewise, Tenant shall be responsible for any and all sales, use, withholding and other taxes assessed against the lease premises for Tenant's business operation therein. The real estate taxes for the lease premises shall be paid by Landlord. 13. Fire and Casualtv Insurance. The Tenant, at its own cost and expense, shall provide and keep in full force for the benefit of the Tenant and the City of Aspen and the Landlord (as named or additional insureds) during the term hereof or any extension or renewal period, insurance to insure the lease premises against fire, normal extended coverage perils, vandalism, malicious mischief, and liability. Such insurance shall provide protection to the extent of at least one hundred percent (100%) of the insurable replacement cost of the building . . containing the lease premises. In connection herewith, it is acknowledged that Landlord, for ease of administration, is carrying such insurance upon the entire Truscott Place. Accordingly, Tenant shall pay to Landlord Tenant's prorata share of the insurance premium Landlord pays to insure the lease premises. Tenant's prorata share shall be equal to a sum calculated by dividing 6815 by the total number of square feet of Truscott Place and multiplying the resulting dividend by the annual premium paid by Landlord for such insurance. This premium shall be paid to Landlord within ten (10) days of Ten ant's receipt of notice of the amount due from Landlord. Throughout the term of this Lease, the Tenant shall carry and maintain in effect casualty insurance covering . its trade fixtures, equipment, furnishings, leasehold improvements and plate glass, which insurance shall protect against fire, nonnal extended coverage perils, vandalism, malicious mischief, and sprinkler malfunction. Such insurance shall provide coverage to the extent of at least one hundred percent (100%) of the insurable replacement cost of the insured property. Both the Landlord and the Tenant waive any right of subrogation which their respective insurers may. acquire against either of them. Both of these waivers shall automatically terminate at such time as either party's insurer requires that an additional premium be paid as a consequence of this . . . Wal ver prOVISIOn. 14. Liability Insurance. The Tenant, at its own cost and expense, shall provide and keep in full force for the benefit of the Tenant and the City of Aspen and the Landlord (as named or additional insureds) during the term hereof or any extension or renewal period, general public liability insurance for claims of liability arising out of, occasioned by or resulting from an accident or otherwise in or about the lease premises, for Five Hundred Thousand Dollars ($500,000.00) each occurrence with a One Million Dollar ($l,OOO,OOO.OO) general aggregate combined single limit covering bodily injury, property damage, and personal injury. In addition, if Tenant serves, manufactures, or distributes alcoholic beverages on the lease premises, Tenant shall carry liability insurance for such activity with limits in the same amounts as stated above. . The policy or policies of insurance (or binders of insurance therefor) shall be issued by a reputable company or companies authorized to do business in this State and shall name Landlord as an additional insured. Tenant shall provide evidence of such insurance coverage to Landlord prior to the commencement of the term hereof. The Tenant also agrees to and shall save, hold and keep harmless and indemnify the Landlord from and against any and all payments, expenses, costs, attorneys' fees and/or damage to property or injuries to persons occasioned wholly or in . . . part by or resulting from any acts or omissions by the Tenant or any subtenants, assignees or successors. If for any reason as a result of Tenant's activities, use, or business, it shall be impossible to obtain fire and other hazard insurance on the buildings and improvements on the lease premises, in an amount and with insurance companies acceptable to the Landlord, the Landlord may terminate this Lease and the term hereof, upon giving to Tenant fifteen (15) days notice in writing of the Landlord's intention to do so and upon the expiration of the time provided in said notice, this Lease and the term hereof shall terminate. If by reason of the use of the lease premises by the Tenant or by character or manner in which the Tenant's business is carried on, Landlord's insurance rates for fire and other hazards shall be increased, the Tenant shall pay, as additional rent, the amounts by which the premiums for such insurance are increased. The Tenant waives all rights of recovery against the Landlord or Landlord's agents, employees or . other representatives, for any loss, damages or injury of any nature whatsoever to property or persons for which the Tenant is insured. Each party shall give the other party prompt notice of any claim coming to the knowledge of any party that in any way directly or indirectly affects either party, and both parties shall have the right to participate in the defense of such claim to the extent of its interest. 15. Notice of Cancellation ofInsurance Coverage. The above insurance policies shall contain clauses substantially similar to the following: (1) Notwithstanding any other provision in this policy, the insurance afforded hereunder to the City of Aspen and Landlord shall be priinary as to any other insurance or reinsurance covering the City or Landlord and such other insurance or reinsurance shall not be required to contribute to any liability until the appropriate limit of liability afforded hereunder is exhausted. (2) This policy may not be canceled or changed until forty-five (45) days after receipt by Landlord and the City of Aspen of a written notice of such cancellation or change in coverage, as endorsed by receipt of a certified letter, unless such cancellation is a result of nonpayment of premium due, in which case, this policy may not be canceled until ten (10) days after receipt by Landlord and the City of Aspen of a written notice of such cancellation, as endorsed by receipt of a certified letter. 16. Utilities and Maintenance. Tenant shall pay its prorated share of all charges for gas (10% of the gas bill as determined by reading the West gas meter for that portion of Truscott Place, but not exceeding previous years gas bills), electricity (one-third of the total electricity bill for metered service for the lease premises not to exceed the previous years bills), water and sewer (a flat fee of $25.00 per month), telephone and cable television (separately contracted for by Tenant) and trash removal or other utility and maintenance services used by the Tenant in or about the lease premises during the term of this Lease. Cleaning expenses of shared restrooms shall be the responsibility of the Tenant. Landlord, however, shall be responsible for a share of the expenses for cleaning the shared restrooms at a cost not exceeding $6.00 per day. Tenant's share of any such charges for utilities or maintenance services used by Tenant but paid by e . . Landlord, either because the utilities are not separately metered or because Landlord contracts for the service for the entire improvements, shall be as stated above during the months that Tenant is .in possession of the lease premises. Upon receipt of a statement from Landlord for Tenant's share of such utility or maintenance service charges, Tenant shall pay the same to Landlord within ten (10) days. If any charges are not paid when due, Landlord may pay the same, and any amount so paid by Landlord shall thereupon become due to Landlord from Tenant as additional rent. 17. Alterations. No alterations, additions, or improvements shall be made, and no fixtures shall be installed in or attached to the lease'premises, without the written consent of!he Landlord. Unless otherwise provided herein, all such alterations, additions or improvements when made, installed in or attached to the said lease premises, shall belong to and become the property of the Landlord and shall be surrendered with the lease premises as part thereof upon the expiration or sooner termination of this Lease, without hindrance, molestation, or injury. Notwithstanding that they may have become an integral part of the lease premises, Landlord may require Tenant to remove all or any part of such alterations, additions, improvements or fixtures at the expiration or earlier termination of this Lease, restoring the lease premises to the same condition existing at the beginning of the original term, ordinary wear and tear excepted. If Landlord does so require, Tenant shall repair all damages resulting from such removal and should Tenant fail to repair damages resulting from such removal, Landlord may remove the ,same or malce such repairs for Tenant's account, and Tenant shall pay to Landlord, on demand, . an amount equal to Landlord's costs incurred in such removal or repair. All work with respect to any permitted alterations, additions, or improvements shall be done at Tenant's sole expense in a good and workmanlike manner, strictly in accordance with the plans and specifications approved by Landlord. In doing said work, other Tenants of Landlord (if any) shall not be adversely affected nor unreasonably inconvenienced. Tenant shall, at its own expense, obtain all necessary building or other permits or approvals required by appropriate governmental authorities prior to beginning such work. If any mechanics' or other liens shall be created or filed against the lease premises by reason of labor performed or materials furnished for the Tenant in the alteration, addition or repair to any building or improvement, the Tenant shall within ten (10) days thereafter, at the Tenant's own cost and expense, cause such lien or liens to be satisfied and discharged of record together with any Notices of Intention that may have been filed. Failure to do so shall entitle Landlord to resort to such remedies as are provided herein in the case of any default of this Lease, in addition to such as are permitted by law. Any goods, inventory or other personal property of Tenant not affixed to the lease premises and not removed by Tenant upon the termination of this Lease, or upon any quitting, vacating or abandonment of the lease premises by the Tenant, or upon the Tenant's eviction, shall be considered abandoned and Landlord shall have the right, without any notice to the Tenant, to sell or otherwise dispose of the same, at the expense of the Tenant, and shall not be accountable to the Tenant for any part of the proceeds of such sale, if any. . . . l8. Repairs. The Tenant has examined the lease premises and has entered into this Lease without any representation on the part of the Landlord as to the condition thereof. Tenant is relying upon its own inquiry as to applicable zoning and other land use regulations, if any, governing the permitted uses of the lease premises. Tenant shall talce good care of the lease premises and shall, at the Tenant's own cost and expense, malce all repairs, including painting and decorating, and shall maintain the lease premises in good condition and state of repair, and at the end or other expiration of the term hereof, shall deliver up the lease premises in good order and condition, wear and tear from reasonable use thereof, and damage by the elements not resulting from the neglect or fault of the Tenant, excepted. The Tenant shall neither encumber nor obstruct the sidewalks, driveways, yards, entrances, hallways and stairs, but shall keep and maintain the same in a clean condition, free from debris, trash, refuse, snow and ice. In case of destruction of, or any damage to the glass in the lease premises, or the destruction of, or damage . of any kind whatsoever to the lease premises, caused by the carelessness, negligence or improper conduct on the part of the Tenant or the Tenant's agents, employees, guests, licenses, invitees, subtenants, assignees or successors, the Tenant shall repair the said damage or replace or restore any destroyed parts of the lease premises, as speedily as possible, at the Tenant's own cost and expense. 19. Damage to Premises. If the lease premises shall be so damaged by fire or other catastrophe (which is not caused by the fault or negligence of the Tenant or imputable to the Tenant) as to render said lease premises untenantable, the Tenant thereupon shall surrender the lease premises to the Landlord. The Tenant shall pay rent, duly apportioned, up to the time of such termination of this Lease. Notwithstanding the foregoing, in lieu of any termination of the Lease, Landlord may elect, at its sole option, within thirty (30) days after the event of such damage, to continue the Lease without regard of such damage, whereupon Landlord shall. at its expense make the lease premises fit for occupancy and the rent shall be abated only for the period during which the Tenant shall be deprived of the use of said lease premises by reason of such damage and the repair thereof. If said lease premises, without the fault of the Tenant, shall be slightly damaged by fire or other catastrophe but not so as to render the same untenantable for any substantial period of time, the Landlord, after receiving notice in writing of the occurrence of the injury, shall cause the same to be repaired with reasonable promptness; and in such event, . rent shall be proportionately abated, according to the loss of use, until the lease premises are substantiall y restored. 20. Sublease/Assignment. Tenant shall not assign, sublease, mortgage, pledge or otherwise hypothecate or transfer all or any part of Tenant's leasehold estate hereunder, or pemlit the lease premises or any portion thereof to be occupied by anyone without Landlord's prior written consent in each instance, which consent may be withheld in Landlord's sole and absolute discretion. In the event Landlord consents to Tenant's assignment or sublease of the lease premises, or any portion thereof, such assignment or sublease shall be subject to the following condi tions: . . . a. Prior approval of subtenant or assignee by Landlord, with respect to his financial capability, available references and proposed use of the lease premises; b. . Tenant, and any guarantors of Tenant, shall remain jointly and severally liable to Landlord hereunder throughout the term of any such assignment or sublease and Landlord may look solely to Tenant for payment of any amounts due under the Lease Agreement and not paid by the subtenant or assignee; c. Any failure of the sublessee or assignee to perform under the terms of this Lease Agreement shall be deemed to be a breach by Tenant of this Lease Agreement; and, d. Tenant shall be responsible to pay to Landlord, as additional rent hereunder, all costs and attorney's fees incurred by Landlord in approving any such subtenant or assignee and in reviewing any sublease agreement or assignment of this Lease Agreement, up to a cap of $1000.00 in costs and attorney's fees for anyone prospective subtenant or assignee. Notwithstanding the above-referenced $1000.00 cap, Landlord reserves the right to deny the right to review and approve a proposed subtenant or assignee if, in Landlord's judgment, a review of such prospective subtenant's or assignee's records would cost Landlord more than $1000.00 and Tenant is unwilling to commit in writing to paying any costs incurred by Landlord that exceed $1000.00 in such review. In the event Tenant is a corporation, these provisions shall apply to any transfer, sale or other disposition, whether voluntary or involuntary, of any stock in Tenant or to any merger, consolidation or dissolution or any other transaction, the effect of which would be in any way to avoid or circumvent such prohibitions. Any assignment or subletting contrary to the provisions of this Paragraph shall be void and shall, at the option of the Landlord, constitute a default under . the terms of this Lease. 21. Maintenance and Repairs. Tenant shall during the term of this Lease keep in condition and repair equal to that which existed at the commencement of this lease the lease premises and every part thereof, including without limiting the generality of the foregoing, all plumbing fixtures, within the lease premises, refrigeration, electrical fixtures and lighting fixtures, additional fixtures, interior walls, wall coverings and paint, ceilings, floors and floor coverings, windows, doors, plate glass, awnings, and entrances. Landlord shall have responsibility for the repair and maintenance of the building structure, roof, foundation and structural integrity of any additional stories above the lease premises, and shall, at its expense provide major repairs and required replacement to mechanical systems situated within the lease premises. Major repairs and replacements are agreed to be those which cost more than $500.00 for each single item, and are required to provide the level of service and serviceability thereof and therefrom currently existing. Any repairs or replacements that will exceed $500.00 may be undertalcen by Landlord, provided Landlord and Tenant agree in advance upon a cost sharing arrangement for such repair or replacement. Absent such agreement, Landlord shall have no . obligation to execute such repair or replacement, but in the event Landlord determines to effectuate such repair or replacement, Landlord shall have the sole discretion to determine the type, extent and quality of repair or replacement that shall be undertalcen. .' ''''.- . . 22. Signs. The Tenant shall not place nor allow to be placed any signs of any kind whatsoever, upon, in or about the said lease premises or any part thereof, except of a design and structure and in or at such places as may be indicated and consented to by the Landlord in writing. ln case the Landlord or the Landlord's agents, employees or representatives shall deem it necessary to remove any such signs in order to paint or malce any repairs, alterations or improvements in or upon the lease premises, they shall be replaced at the Landlord's expense when the said repairs, alterations or improvements shall have been completed. Any signs permitted by the Landlord shall at all times conform with all municipal ordinances or other laws and regulations applicable thereto. 23. Compliance with Law. Tenant shall obtain and pay for all permits or licenses that may be required for the operation of the lease premises in accordance herewith. A copy of such permits or licenses shall be submitted to Landlord for verification of this requirement prior to occupancy. The Tenant shall promptly comply with all laws, ordinances, rules, regulations, . requirements, and directives of the federal, state, and municipal governments or public authorities and of all their departments, bureaus and subdivisions, applicable to and affecting the said lease premises, their use and occupancy, and shall promptly comply with all orders, regulations, requirements and directives of the Board of Fire Underwriters or similar authority and of any insurance companies which have issued or are about to issue policies of insurance covering the said lease premises and its contents, for the prevention of fire or other casualty, damage or injury, all at Tenant's own cost and expense. Tenant shall obtain and maintain during the life of this Lease, worker's compensation insurance and employer's liability insurance for Tenant's employees in strict compliance with state laws. Certificates evidencing such insurance or approved self-insurance shall be submitted to Landlord prior to occupancy. Tenant shall not use the lease premises for any purposes deemed unlawful, disreputable, or extra hazardous. 24. Quiet Enjoyment. So long as the Tenant is not in default hereunder during the term hereof or any renewal or extension hereof, the Landlord covenants that the Tenant shall peacefully and quietly occupy and enjoy the lease premises subject to the terms hereof. The Landlord warrants that it has full power and authority to execute this Lease, be bound by, and perform all its obligations hereunder. Notwithstanding anything to the contrary contained herein, Tenant acknowledges that Landlord's right to occupy and lease the lease premises to Tenant is . based upon Landlord's rights under the Master Lease. In the event Landlord loses the right to occnpy and lease the lease premises because of a default by Landlord or the Owner of the building in accordance with the provisions of the Master Lease, Landlord shall have no obligation hereunder to Tenant and this Lease shall be of no further force or effect, subject to the City of Aspen's rights pursuant to the Master Lease. 25. Condemnation. lfthe land and the lease premises leased herein, or of which the lease premises are a part, or any portion hereof, shall be talcen under eminent domain or condemnation proceedings, or if suit or other action shall be instituted for the talcing or condemnation thereof, or if in lieu of any formal condemnation proceedings or actions, if any, the Landlord or the City of Aspen shall grant an option to purchase and/or shall sell and convey e . . the said lease premises, or any portion thereof, to the governmental or other public authority, agency, body or public utility seeking to talce said land and lease premises or any portion thereof, then this Lease, at the option of Landlord, shall terminate and the term hereof shall end as of such date as the Landlord shall fix by notice in writing; and the Tenant shall have no claim or right to claim or be entitled to any portion of any amount which may be awarded as damages or paid as . the result of such condemnation proceedings or paid as the purchase price for such option, sale or conveyance in lieu of formal condemnation proceedings; and all rights of the Tenant to damages, if any, are hereby assigned to the Landlord. The Tenant agrees to execute and deliver any instruments, at the expense of the Landlord, as may be deemed necessary or required to expedite any condemnation proceedings or to effectuate a proper transfer of title to such governmental or other public authority, agency, body, or public utility seeking to talce or acquire the said lands and lease premises or any portion thereof. The Tenant covenants and agrees to vacate said lease premises, remove all the Tenant's personal property therefrom and deliver up peaceable possession thereof to the Landlord or to such other party designated by the Landlord in the aforementioned notice. Failure by the Tenant to comply with any provisions in this clause shall subject the Tenant to such costs, expenses, damages and losses as the Landlord may incur by reason of the Tenant's breach hereof. 26. Landlord's Lien. Tenant hereby grants to Landlord a security interest in any and all of Tenant's furniture, fixtures, equipment and inventory whenever acquired, their proceeds and the proceeds of any and all insurance policies carried thereon as and for additional security for the faithful performance by Tenant of all of its obligations hereunder. Tenant agrees to execute and deliver to Landlord, upon request, such additional documents as Landlord may require to establish and perfect such security interest including, without limitation, a financing . statement in form satisfactory to Landlord, which is to be executed and delivered by Tenant to Landlord. The exercise by Landlord of any rights in and to such furniture, fixtures, equipment and inventory upon default hereunder shall be governed by Article 9 of the Colorado Uniform Conunercial Code, as in effect at the time of such default, but such exercise shall not preclude Landlord from exercising any or all other rights and remedies hereunder or as provided by law. 27. Inspection and Repair. The Tenant agrees that the Landlord and the Landlord's agents, employees or other representatives, shall have the right to enter into and upon the lease premises or any part thereof, at all reasonable hours, for the purpose of examining the same or making such repairs or alterations therein as may be necessary for the safety and preservation thereof. This clause shall not be deemed to be a covenant by the Landlord nor be construed to create an obligation on the part of the Landlord to malce such inspection or repairs. Tenant expressly waives and releases any claim, demand, or cause of action it might have by reason of any inconvenience; annoyance to Tenant, its guests, licensees or invitees arising from any maintenance, alteration or repair to any portion of the lease premises, the building in which it is located or the property upon which it is situate. Tenant grants to Landlord the right to temporarily discontinue utilities or any of them at any such time or times as may be necessary by reason of any such maintenance work, alteration or repair. ~" ~- . .'., ".'" 28. Landlord Remodel of Premises. In the event Landlord desires to remodel any portion of the lease premises during the term of this lease agreement, it may do so, provided it is solely at Landlord's expense and, provided further, that any remodel work commenced by Landlord shall not interfere with or disrupt Tenant's business within the lease premises. 29. Possession of Lease Premises for Housing PUI:poses. In the event Landlord desires to talce possession of any portion of the lease premises for housing purposes, Landlord. shall have the right to terminate this lease agreement for the portion of the lease premises to be used for the purpose of accommodating the creation of such housing; provided. however, that Landlord shall not terminate any portion of this lease agreement during any occupancy period (May 15th through October 15th) of the lease term. If the Landlord terminates any portion of this lease agreement pursuant to this paragraph, Tenant shall have the exclusive right to enter into good faith negotiations with Landlord for a new lease for the remainder of the lease premises not used by Landlord for housing, if any, on such terms and conditions as are acceptable to both Landlord and Tenant and to execute a new lease agreement reflecting same. This exclusive right to negotiate shall extend for two months from the date of termination of the lease agreement. 'In the event Landlord and Tenant have not executed a new lease agreement within such two month period, Landlord shall be free to negotiate and execute a lease agreement for the lease premises with any third party provided that any such new lease agreement shall not commence prior to the termination date of this lease agreement. In the event Landlord terminates any portion of this lease agreement for housing purposes as provided herein, Landlord will be responsible for the cost of moving Tenant into the remaining lease premises, without being responsible for any new improvements or equipment to the lease premises. .30. Default. If there should occur any default on the part of the Tenant in the performance of any conditions or covenants herein contained or if, during the term hereof, the lease premises or any part thereof shall be or become abandoned or deserted, vacated or vacant, or should the Tenant be evicted by summary proceedings or otherwise, the Landlord, in addition to any other remedies herein contained or as may be permitted by law, may either by force or otherwise, without being liable for prosecution therefor or for damages, re-enter the said lease premises and again possess the same with or without terminating this Lease; and as agent for the Tenant or otherwise, re-Iet the lease premises and receive the rents therefor and apply the same, first to the payment of such expenses and costs, as the Landlord may have been put in re-entering and repossessing the same and in malcing such repairs and alterations, as may be necessary; and . second to the payment of the rents due hereunder. Whether or not the Landlord shall terminate this Lease, the Tenant shall remain liable for such rents as may be in arrears and also the rents as may accrue subsequent to the re-entry by the Landlord, to the extent of the difference between the rents reserved hereunder and the rents, if any, received by the Landlord during the remainder of the unexpired term hereof, after deducting the aforementioned expenses, fees, and costs; the same to be paid as such deficiencies arise and are ascertained each month. In addition, upon any such default, or if Tenant be adjudicated a bankrupt, insolvent or placed in receivership, or should proceedings be instituted by or against the Tenant for bankruptcy, insolvency, receivership, agreement of composition or assignment for the benefit of creditors, or if this Lease or the estate of the Tenant hereunder shall be transferred by virtue of any court proceedings, writ . . ., " of execution or levy sale, the Landlord may, if the Landlord so elects, at any time thereafter, terminate this Lease, upon written notice to Tenant or to any trustee, receiver, or other person in charge of or acting as custodian of the assets or property of the Tenant. In the event of default, except in the payment of rent or additional rent hereunder, including any default by Tenant under the terms of the Master Lease, Landlord, prior to the exercise of any of its rights or remedies hereunder, shall give Tenant notice of such default together with a ten (10) day right to cure should such default be in the payment of any other sums due Landlord hereunder or a twenty . (20) day right to cure should such default be in any of the other conditions or covenants of this Lease or the Master Lease to be performed by Tenant, unless the same by its or their nature require immediate or earlier attention. Upon the giving of such notice, this Lease and the term hereof shall, unless the default shall be cured during the applicable period, end on the date fixed in such notice as if the said date were originally fixed in this Lease for the expiration hereof; and the Landlord shall have the right to remove all persons, goods, fixtures and chattels therefrom, by force or otherwise, without liability for damages. No right of redemption shall be exercised under any present or future law of the State of Colorado in case the Tenant shall be dispossessed for any cause or if the Landlord shall, in any other manner, obtain possession of the lease premises in consequence of the violation of any of the covenants and agreements of the Tenant. The Landlord shall have a lien paramount to all others on every right and interest of the Tenant in and to this Lease, and on any furnishings, equipment, fixtures, or other personal property of any kind belonging to the Tenant, or the equity of the Tenant therein, on the leased property. Such lien is granted for the purpose of securing the payment of rents, taxes, assessments, insurance charges, liens, penalties and damages herein covenanted to be, paid by the Tenant and for the purpose of securing the performance of all of the Tenant's obligations under this Lease. Such lien shall be in addition to all rights of the Landlord given under statutes of this State, which are now or shall hereinafter be in effect. 31. Attorneys' Fees and Waiver of Right to Jury. In the event of any litigation or other action or proceeding between the parties hereto arising out of the performance or non- performance of this Lease, or enforcement of any rights or remedies hereunder, including any indemnities herein contained, the prevailing party shall be entitled in such litigation, action or proceeding to also recover as part of any judgment, award or other relief, its reasonable attorneys' fees and costs incurred. The Landlord and Tenant expressly waive any right which either may have to trial by jury of any dispute arising under this Lease relating to the issues of termination of this Lease and rights to possession of the lease premises. 32. Delays. Whenever a period of time is provided in this Lease for either Landlord or Tenant to do or perform any act or thing, neither Landlord nor Tenant shall be liable or responsible for performing any obligation hereunder as a result of any unavoidable delay due to strikes, lockouts, casualties, acts of God, or other governmental regulations or control or other causes beyond such party's reasonable control, and the time for performance specified herein shall be extended for a period of time corresponding to such delay, . . - 33. Mortgage Prioritv. This Lease shall not be a lien against the lease premises with respect to any mortgages or trust deeds now or hereafter placed upon the lease premises or the building. The recordipg of such mortgage or mortgages shall have preference and precedence and be superior and prior in lien to this Lease, irrespective of the date of recording and the Tenant agrees to execute any instruments, without costs, which may be deemed necessary or desirable, to further effect the subordination of this Lease to any such mortgage or mortgages. In addition, this Lease shall be subordinate to the Master Lease. Tenant shall, upon request, execute any estoppel certificates or attornment agreements that may be required by the holder of any mortgage or trust deed now or hereafter placed upon the lease premises or the building or by the Owner of the building in which the lease premises are located. A refusal by the Tenant to execute any such instruments shall entitle the Landlord to at once terminate this Lease. Tenant agrees not to record or file this Lease in the real estate records affecting the building in which the lease premises is located. Any such recording in violation hereof shall be considered a slander of Landlord's and the City of Aspen's title and a breach of this entire Lease. This covenant shall survive the expiration or earlier termination of this Lease. 34. Holding Over. This Lease shall expire of its own accord without notice at the end . of the term or earlier, as herein specified. If, after the expiration of this Lease, Tenant remains in possession of the lease premises with the Landlord's consent, such holding over shall be a tenancy-at-will at a rental equal to 125% of the last monthly rental provided in this Lease, and otherwise subject to all the obligations and conditions ofthis Lease. 35. Cumulative Remedies. The various rights, remedies, options and elections of the Landlord expressed herein are cumulative and the failure of the Landlord to enforce. strict performance by the Tenant of the conditions and covenants of this Lease or to exercise any election or option or to resort or have recourse to any remedy herein conferred or the acceptance by the Landlord of any installment of rent after any breach by the Tenant, in anyone or more instances, shall not be construed or deemed to be a waiver or a relinquishment for the future by the Landlord of any such conditions and covenants, options, elections or remedies, but the same shall continue in full force and effect. 36. Cleanliness' Waste and Nuisance. Tenant shall keep the lease premises at all times in a neat, clean and sanitary condition, shall neither commit nor permit any waste or nuisance thereon, and shall keep the walks adjacent thereto free from waste and debris, and all snow and ice which shall not be the responsibility of the Landlord or the City of Aspen to remove. Tenant shall store all trash in the containers provided for that purpose. 37. Brokers.. Each party represents to the other that it has had no dealings with any real estate broker or agent in connection with the negotiation of this Lease. 38. Waiver. No waiver by Landlord or Tenant of any provision of this Lease shall be . effective unless in writing nor shall such waiver be deemed a waiver of any other provision hereof, nor of any subsequent breach by Tenant of the same or of any other provision. e - e 39. Surrender of Premises. At the end of each five month period of possession of the lease premises by Tenant, as well as at the termination of this Lease, Tenant shall surrender the lease premises to Landlord in good condition and repair, excepting for reasonable wear and tear and acts of God. Tenant shall have the right at the end of the term hereof to, and upon demand by Landlord Tenant shall, remove any equipment, furniture, trade fixtures not affixed to the realty, and other personal property placed in the lease premises by Tenant and Tenant shall promptly repair any damage to the lease premises caused by such removal. 40. Governing Law. This Lease shall be construed and enforced in accordance with the laws of the State of Colorado. In the event of any litigation arising out of this Lease, jurisdiction and venue shall rest with the District Court for Pitkin County. 41. Time of Essence. Time is of the essence with respect to the performance of every provision of this Lease in which the time of performance is a factor. 42. Severability. The terms, conditions, covenants, and provisions of this Lease shall be deemed to be severable. If any clause or provision herein contained shall be adjudged to be invalid or unenforceable by a court of competent jurisdiction or by operation of any applicable law, it shall not affect the validity of any other clause or provision herein, but such other clauses or provisions shall remain in full force and effect. 43. Notices. All notices required under the terms of this Lease shall be given in person or by mailing such notices by certified or registered mail, retum receipt requested, to the address of the party as shown at the beginning of this Lease, or to such other address as may be designated in writing, which notice of change of address shall be given in the same manner. If not sooner received, any notice given by mail shall conclusively be deemed received three (3) days after the date of certification or registration. 44. Entire Lease. This Lease contains the entire contract between the parties and there are no other agreements, understandings, representations, or warranties except as expressly set forth herein. No additions, changes or modifications, renewals or extensions hereof shall be binding unless reduced to writing and signed by the Landlord and Tenant. To the extent possible, this Lease shall be construed vis-a-vis the Landlord and Tenant without reference to the Master Lease. However, in the event the rights of Landlord and Tenant hereunder are directly affected by and in conflict with provisions of the Master Lease, such that to adhere to the terms of this Lease would result in a default by Landlord under the Master Lease, the Master Lease provision shall control. 45. References_ In all references herein to any parties, persons, entItles or corporations, the use of any particular gender or the plural or singular number is intended to include the appropriate gender or number as the text of the within Lease may require. - . e 46. Tenant is an Independent Contractor. This Lease is not a contract of employment. No relationship of employer and employee, joint venture or partnership, exists between Landlord and Tenant or between the Landlord and any employee or agent of the Landlord. Tenant shall at all times be deemed to be an independent contractor. Tenant is not authorized to bind Landlord to any agreements or obligations. The term Landlord when used in this Lease shall mean and include the Executive Director of the Landlord and any other agent or employee of the Landlord designated by the Director with the responsibility of enforcing any of the terms of this Lease. 47. Binding Effect. All the terms, covenants, and conditions herein contained shall be for and shall inure to the benefit of and shall bind the respective parties hereto, and their heirs, executors, administrators, personal or legal representatives, successors and assigns respectively. 48. Guaranty. In the event Tenant hereunder is a corporation, this Lease and the performance of all the payments, obligations, conditions and covenants contained herein shall be personally guaranteed by the shareholders of Tenant by execution of a guaranty of lease in a form provided by Landlord. IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and year above first written. TENANT: THIN AIR FOODS, INC. d/b/a lOTH HOLE BAR & GRILL a Colorado Corporation ATTEST: By: ~~~ / I George Schermerhorn, President. , Secretary LANDLORD: THE CITY OF ASPEN B:<(-f-{ f.<1-1--~ I '" . . .'. "~ Q:c.clc.-nls.. ~~\ .~ rOWfY\ APPROVED AS TO FORM: APPROVED AS TO CONTENT: . / . ;f///1adi> 4/1#11 John ?'Worcester, Esq., Attorney to the City of Aspen - ~;J ~_V-/Q2-r7 Golf Deparfulent thjn~air.397 . . tit . e GUARANTY OF LEASE FOR VALUE RECEIVED, and in consideration for, and as an inducement to the aforesaid Landlord to malce the foregoing Lease with THIN AIR FOODS, INC. d/b/a lOTH HOLE BAR & GRILL, a Colorado corporation, as Tenant, the undersigned George Schermerhorn, unconditionally guarantees the full performance and observance of all the covenants, conditions, and agreements therein provided to be performed and observed by Tenant, and expressly agrees that the validity of this agreement and the obligations of the guarantors hereunder shall in no wise be terminated, affected or impaired by reason of the assertion by Landlord against Tenant of any of the rights or remedies reserved to Landlord pursuant to the provisions of the within Lease or by the relief of Tenant from any of Tenant's obligations under the Lease by operation of law or otherwise (including, but without limitation, the rejection of the Lease in connection with proceedings under the bankruptcy laws now or hereafter enacted); the undersigned hereby waiving all suretyship defenses. The undersigned further covenants and agrees that this guaranty shall remain and continue in full force and effect as to any renewal, modification, or extension of this Lease, whether or not the undersigned shall have received any notice of or consented to such renewal, modification or extension. The undersigned further agrees that his liability under this guaranty . shall be primary, and that in any right of action which shall accrue to landlord under the Lease, landlord may, at Landlord's option, proceed against the undersigned and Tenant, jointly or severally, and may proceed against the undersigned without having commenced any action against or having obtained any judgment against Tenant. The undersigned further represents to Landlord as an inducement for Landlord to malce the Lease, that the undersigned owns 100% all of the entire outstanding capital stock of Tenant. It is agreed that the failure of Landlord to insist in anyone or more instances upon a strict performance or observance of any of the terms, provisions or covenants of the foregoing Lease or to exercise any right therein contained shall not be construed or deemed to be a waiver or relinquishment for the future of such term, provision, covenant or right, but the same shall continue and remain in full force and effect. Receipt by Landlord of rent with knowledge of the breach of any provision of the foregoing Lease shall not be deemed a waiver of such breach. Except as may be otherwise specifically provided in the Lease subletting, assignment, or other transfer of the within Lease, or any interest therein, shall not operate to extinguish or diminish the liability of the undersigned guarantors under this guaranty; and wherever reference is made to the liability of Tenant named in the within Lease, such reference shall be deemed likewise to refer to the undersigned guarantors. . It is further agreed that all of the terms and provisions hereof shall inure to the benefit of the respective heirs, personal representatives, successors and assigns of Landlord, and shall be binding upon the heirs and assigns of the undersigned. - . . IN WITNESS WHE~, the undersigned guarantor has caused this guaranty to be executed effective as of the day of 1l~d , 199_. d~~~ thin-air.397