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EXHIBIT 10.5
OFFICE LEASE
THIS OFFICE LEASE (the "Lease"), is made and entered into effective
as
of this 1st day of March, 2004, by and
between HDP - KANSAS CITY, L.L.C., the
"Landlord," and U.S. PREMIUM BEEF, LTD. the
"Tenant".
BASIC TERMS
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1. PREMISES:
Suite 501, consisting of approximately 2,727 rentable square
feet
and located on the 5th floor of the Building. See Exhibit A
attached hereto.
BUILDING:
12200 Ambassador Drive, Kansas City, MO
2. COMMENCEMENT DATE:
March 1, 2004
EXPIRATION DATE:
February 28, 2006
3. TERM:
24 months
4. BASE RENT:
Base Rent
Base Rent
(per rentable square foot)
Months
(monthly installments)
1-24
$10 per square foot
$ 2,272.50 per month
5. ADDRESS OF LANDLORD FOR
NOTICES:
HDP - Kansas City, L.L.C.
c/o
Higgins Development Partners
101 East Erie Street, Suite 800
Chicago, IL 60611
Attn: Kent Knautz
Facsimile:
312-943-9768
6. ADDRESS OF TENANT FOR
NOTICES:
12220 Ambassador Drive, Suite 501
Kansas City, Missouri 64163
Attn: President
7. BROKER(S):
None
8. GUARANTOR(S):
None
9. SECURITY DEPOSIT:
$ 0
10. EXHIBITS:
Exhibit "A" - Premises
Exhibit "B" - Rules and Regulations
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WITNESSETH:
For and in consideration of the rents, covenants and agreements
hereinafter set forth, and for other good
and valuable consideration, the
receipt and sufficiency of which are hereby
acknowledged, Landlord and Tenant
agree as follows:
1.
PREMISES AND COMMON AREA: (a) Landlord, for and in
consideration of the rents, covenants and
agreements hereinafter specified to be
paid, kept and performed by Tenant, leases
to Tenant, and Tenant hereby accepts,
the Premises (as defined in the Basic
Terms) on an AS IS, WHERE IS basis. In
addition to the Premises, Landlord shall
provide Tenant with access to the
storage room located behind the East
elevators on an
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AS IS, WHERE IS basis, end such use of the
storage area shall be on a rent-free
basis, but subject to all other terms and
conditions of this Lease.
(b) Landlord grants Tenant the non-exclusive right, together
with all other occupants of the Building
and their agents, employees and
invitees, to use the Common Area during the
Term. For purposes of this Lease,
"Common Area" means the parking area,
driveways, loading docks, lobby areas,
multi-tenant corridors and landscaped
areas, as well as other areas of the
Building and Land which Landlord may
designate from time to time as common area
available to all tenants. Landlord, at
Landlord's sole and exclusive discretion,
may make changes to the Common Area
provided that such changes do not prevent
use of the Common Area by Tenant except as
otherwise provided in the last
sentence of this subsection (b) Landlord's
rights regarding the Common Area
include, but are not limited to, the right
to (a) restrain unauthorized persons
from using the Common Area; (b) place
permanent or temporary kiosks, displays,
carts or stands in the Common Area and
lease the same to tenants; (c)
temporarily close any portion of the Common
Area (i) for repairs, improvements
or alterations, (ii)to discourage
unauthorized use, (iii) to prevent dedication
or prescriptive rights, or (iv) for any
other reason Landlord deems sufficient
in Landlord's reasonable judgment; (d)
change the shape and size of the Common
Area; (e) add, eliminate or change the
location of any improvements located in
the Common Area and construct buildings or
other structures in the Common Area;
and (f) impose and revise Rules and
Regulations concerning use of the Common
Area, including, but not limited to, any
parking facilities comprising a portion
of the Common Area.
2.
SECURITY DEPOSIT: [Intentionally Deleted.]
3.
TERM:
A. The
Lease term shall commence on the Commencement
Date (as stated in the Basic Terms). The
Lease term shall be for the Term (as
stated in the basic Terms) and shall end at
midnight on the last day of said
period (the "Expiration Date").
B.
Either party shall have the right to terminate this
Lease prior to the Expiration Date with six
(6) months advance written notice to
the non-terminating party. Such early
termination notice shall expressly set
forth the last day of the Lease term. In
the event Tenant shall fail to quit and
vacate the Premises upon the expiration or
the termination of this Lease, as set
forth in the early termination notice, then
Tenant shall immediately be in
default of the terms and conditions of'
this Lease, and Landlord shall be able
to pursue any rights or remedies it may
have available to it under the terms of
this Lease, including but not limited to
the terms and provisions set forth in
Section 28 below.
4.
ACCEPTANCE OF PREMISES: Tenant's occupancy of the Premises
establishes Tenant's acceptance of the
Premises, the Building and the Land in an
"AS IS - WHERE IS" condition. All
warranties, express or implied, are hereby
waived and disclaimed by Tenant.
5.
RENT:
(a) Base Rent.
Tenant agrees to pay Landlord at such
place as Landlord shall designate from time to time, Rent as
follows: Tenant will pay Base Rent in monthly installments to
Landlord, in advance, without offset or deduction, commencing
on the Commencement Date and continuing on the first day of
each and every calendar month after the Commencement Date
during the Term through and including the Expiration Date,
except that Tenant shall pay the first month's Base Rent
within ten (10) days after full execution of this Lease. Base
Rent shall be payable in equal monthly installments subject to
Section 7.
(b) Additional
Rent. In addition to the Base Rent, Tenant
shall pay during the Lease Term as additional rent
("Additional Rent"), all other sums or amounts provided for in
this Lease, which are to be paid for by Tenant.
6. RENT
ADJUSTMENT: [Intentionally Deleted.]
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7.
PRORATION OF FIRST AND LAST MONTH'S RENT: Tenant's obligation
to pay Rent under this Lease will commence
upon the Commencement Date. The
parties hereto acknowledge and agree that,
as of March 1,2004, Landlord has not
received notice of termination from
Farmland Industries, Inc. of that certain
Build-To-Suit Lease/Sublease Agreement (the
"Farmland Lease") by and among
HDP-Kansas City, L.L.C. and Farmland
Industries, Inc. dated September 9, 1999.
Although it is anticipated that Farmland
Industries, Inc. intends to terminate
the Farmland Lease, such termination has
not been received by Landlord as of
March 1, 2004. Tenant hereby holds Landlord
harmless in the event such Farmland
Lease is not terminated by Farmland
Industries, Inc. If the Commencement Date
occurs on any day other than the first day
of a calendar month, then all Rent
provided shall he prorated for that month,
and the Lease Term shall be adjusted
accordingly. If Tenant's lease shall end on
any other day other than the last
day of a calendar month, then all Rent
shall be prorated for that month.
8. USE:
Tenant agrees that it shall occupy and use the Premises
for general office use, and for no other
purpose, and that it will conduct its
business in such a manner as will not
interfere with or infringe upon the rights
of any other tenants or occupants of the
Building, or disturb their quiet
enjoyment, or interfere with any services
to be provided to any Common Areas or
to any other tenant within the Building, or
which may invalidate or increase the
premium cost of any insurance carried on
the Building. Tenant further agrees
that it will observe and comply with all
present and future laws, ordinances,
requirements, orders, directions, rules and
regulations of all governmental
authorities affecting the Premises,
specifically relating to Tenant's use of the
Premises, and that it will not use or
permit the use of the Premises for any
unlawful, disreputable or hazardous use. In
no event shall Tenant he required to
make alterations so the Premises, whether
structural, mechanical or otherwise,
to comply with such laws, or to remove any
hazardous substance not placed on the
Premises by Tenant or its employees,
contractors or invitees. Tenant shall not
use or occupy the Premises in violation of
the certificate of occupancy. Tenant
shall obtain all licenses, permits or other
authorizations from any governmental
or quasi-governmental agencies needed for
the operation of Tenant's business on
the Premises. For purposes of this section,
the Maximum Occupancy Density shall
he computed as if all occupants, employees
and/or independent contractors of
Tenant stationed at the Premises is present
at the Premises at any given time.
9.
SERVICES:
A. If
Tenant is not in default under this Lease, then
Landlord agrees to furnish Tenant during
the Lease Term, the following services
consistent with those services provided to
other class A office building:
(i) Heating
and Air Conditioning: Landlord agrees to
supply heating and air conditioning when necessary for normal
comfort
in the Premises from Monday through Friday, during the period from
7:00
a.m. to 6:00 p.m., and on Saturday from 8:00 a.m. to 1:00 p.m.,
exclusive of holidays ("Normal Business Hours"). When machines
or
equipment are used in the Premises that generate heat or in any
way
affect the temperature otherwise maintained by the air
conditioning
system, or when occupancy of the Premises or electrical load
exceeds
standards set from time to time by building management,
Landlord
reserves the right to require Tenant to install (or, at
Landlord's
option, to require Tenant to reimburse Landlord for its
installation
of) supplementary air conditioning and/or ventilation units in
the
Premises, in such manner, and of such kind or quality as Landlord
may
in its sole discretion determine. Tenant shall bear all costs
and
expenses related to this installation, including maintenance
and
operation of any such unit(s). Landlord further agrees that heating
or
air conditioning services for the Premises at times other than
Normal
Business Hours shall be provided on the condition that Tenant shall
pay
as Additional Rent the entire cost of such additional services
based
upon prevailing rates (on an hourly basis). Landlord reserves the
right
to set reasonable requirements for prior notice of the need for
off-hours services.
(ii)
Electricity: Landlord agrees to supply electrical
wiring and facilities for standard building lighting fixtures
provided
by the Landlord and for Tenant's normal office uses during
Normal
Business Hours, but not including electrical service required for
any
item of equipment which requires voltage other than 120 volts.
Landlord
shall not be responsible for providing electricity required for
any
electrical equipment requiring voltage other than 120 volts
single
phase, and Tenant's equipment and the Premises lighting may not
exceed
an average of five (5) watt per square foot of the Premises. No
electrical circuit for the supply of Tenant's incidental uses will
have
a current capacity exceeding 15 amperes; and electricity to be used
by
Tenant shall be only for equipment and accessories normal to
office
usage. Landlord reserves the right to require Tenant to install
(or, at
Landlord's option, to require Tenant to
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reimburse Landlord for its installation of) conduit wiring and
other
equipment necessary to supply electricity for Tenant's use
requirements
in excess of those set forward in this subsection at Tenant's
expense
by arrangement with the approved electrical utility, if applicable.
If
Tenant's electrical usage as determined either by metering,
submetering
or an electrical usage survey exceeds normal electrical usage to
be
provided by Landlord hereunder, Tenant further agrees to pay
monthly as
Additional Rent the entire cost of providing such excess
electricity.
(iii)
Water: Landlord agrees to supply water to the Common
Areas of the Building from regular Building outlets for
drinking,
lavatory and toilet purposes.
(iv)
Janitorial: Landlord agrees to furnish to the Common
Areas and to the Premises reasonable janitorial services and
normal
trash removal customarily furnished by similar office buildings in
the
suburban Platte County area.
(v) Elevator:
Landlord shall supply appropriate elevator
services for the Building during Normal Business Hours and at all
other
times shall provide what Landlord deems to be sufficient
elevator
service, subject always to reasonable security requirements, to
permit
Tenant reasonable access to the Premises.
(vi)
Maintenance: Routine maintenance and electric
lighting service (including lamp replacement), will be provided
by
Landlord for all Common Areas and service areas of the Building in
the
manner Landlord deems appropriate, including, without limitation,
snow
and ice
removal.
(vii)
Backup Generator. The parties acknowledge that a
backup generator services the Building. Landlord shall maintain
such
backup generator during the Term of the Lease. Notwithstanding
the
above,
Landlord makes no representations or warranties as to the
sufficiency of such backup generator to serve Tenant's
operational
needs in the Premises.
(viii) Lobby
Desk and Security: Landlord shall provide a
person to work at the lobby desk of the Building during normal
business
hours. Landlord shall further provide a card key access system
for
after hours use of the Premises by the Tenant. Notwithstanding
the
above, Landlord shall have no liability to the Tenant, Tenant's
agents,
servants, employees, customers, invitees, licensees or any
person
entering the Premises or the Building under the invitation of
Tenant or
any assignee or subtenant of the Tenant (all of whom, exclusive
of
Tenant only, are hereinafter jointly and severally referred to
as
"Invitees") for any losses resulting from theft, burglary or
damage
done to persons on the Premises, and Landlord shall not be required
to
insure against such losses.
B. If
Tenant requests additional work or services from
Landlord, then Landlord may furnish such
additional work or service in Tenant at
Landlord's option. If Landlord performs
such work or service for Tenant, then
Tenant agrees to pay Landlord any
additional costs associated with this work,
including a reasonable administrative or
overhead charge.
C.
Services and utilities provided to the Building or
the Premises by Landlord are not warranted
by Landlord to be free from
interruption. Landlord is not responsible
or liable for any injury, damage, loss
or inconvenience resulting from failure to
furnish any of the services or
utilities which Landlord agrees to provide;
however, Landlord shall use
commercially reasonable efforts to restore
any services or utilities that are
interrupted. Failure to provide any such
service will not constitute a default
under this Lease, is not an eviction, and
does not entitle Tenant to any
reduction, offset or abatement in the
payment of Base Rent or Additional Rent
under this Lease; provided, however, that
if the interruption or cessation of
utilities resulted from a cause within
Landlord's exclusive control and the
Premises are not usable by Tenant for the
conduct of Tenant's business as a
result thereof, Base Rent and Additional
rent shall be abated for the period
which commences five(5) business days after
the date Tenant gives to Landlord
written notice of such interruption until
such time as the utilities required
for the conduct of Tenant's business are
restored. Tenant shall not be entitled
to such abatement if Tenant is in fact
conducting business in the Premises
during such interruption of utilities.
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D.
Tenant shall be solely responsible for the
installation, use and maintenance of
telephone and other communication services
to the Premises. Landlord shall have the
right to direct and approve the
location and method of installation of all
wires and other equipment to be
installed in the Premises and the Building,
as well as the contractor performing
any such work in the Building. In no event
shall Landlord be responsible for
payment for such installation, use or
maintenance of the telephone or other
communication services. Tenant shall not
have the right to install wiring or
other equipment outside of the Premises
without the advance written consent of
Landlord, and agrees to coordinate such
efforts with Landlord. All expenses
incurred by Landlord in connection with
such telephone or communication services
shall be payable by Tenant as Additional
Rent.
10. REPAIRS
AND MAINTENANCE:
A.
Landlord agrees to maintain the structure, roof,
exterior walls, exterior doors, exterior
windows, public restrooms, public
elevators, all plumbing, heating, air
conditioning and similar equipment and the
corridors of the Building of which the
Premises is a part, and the grounds and
parking areas serving the Building, in good
repair and in a manner which is
consistent with the maintenance and repair
of other class A office buildings.
Such maintenance and repair costs incurred
by Landlord shall be at Landlord's
sole cost and expense; provided, however,
that if any repairs to any part of the
Building or any such equipment installed in
or used in connection with the
Building or any of the grounds or parking
areas serving the Building are
necessitated by the negligent act or
omission of Tenant or its Invitees, Tenant
shall immediately reimburse Landlord for
the cost thereof upon demand, as
Additional Rent.
B.
Tenant shall be responsible for the Premises and at
Tenant's cost, shall keep it in a safe,
neat and attractive condition. Tenant
shall pay for all redecoration, remodeling,
alteration and painting of the
Premises desired by Tenant, which must be
approved by Landlord. Tenant shall
also pay for the repair and maintenance
during the Lease Term of all special
equipment or improvements installed in the
Premises, including, but not limited
to, supplemental air handling units,
dishwashers, icemakers, disposals, showers,
sinks, commodes, glass walls and other
similar equipment or improvements. All
improvements by Tenant shall be subject to
Section 12.B. below.
11. ASSIGNMENT
AND SUBLETTING: Tenant shall not assign or mortgage
this Lease or sublet all or any portion of
the Premises without Landlord's prior
written consent, in each instance, which
such consent will be granted in
Landlord's sole discretion. Any request for
Landlord's written consent shall be
accompanied by a copy of the proposed
assignment or sublease, which must be ins
form acceptable to Landlord. No assignment,
mortgaging, or subletting, if
consented to by Landlord, shall relieve
Tenant of its liability under this
Lease. Tenant shall pay to Landlord, in
consideration for Landlord's written
consent to the assignment or sublease, all
rent and other consideration received
by Tenant from any such assignee or
subtenant which is in excess of the rental
obligation required under the terms of this
Lease for the Premises or portion
thereof for which the consent of Landlord
is requested. Consent by Landlord so
any assignment or sublease shall not
operate as a waiver of the necessity for
Tenant to obtain the prior written consent
of Landlord to any subsequent
assignment, mortgaging or subletting and
the terms of any such consent shall be
binding upon the assignee, mortgagee or
subtenant. Any transfer of this Lease by
merger, consolidation, or liquidation or
any change in ownership of or power to
vote the majority of outstanding voting
stock of Tenant or, if Tenant is a
partnership, any withdrawal, replacement,
or substitution of any partner or
partners, either general or limited,
whether as the result of a single or series
of transactions, shall constitute an
assignment for purposes of this Lease.
Notwithstanding the above, Tenant, without
Landlord's consent (provided that
Tenant is not in default in the performance
of its obligations under this
Lease), may cause an assignment or
subletting (each, a "Transfer") to an
Affiliate of Tenant if Tenant (a) notifies
Landlord at least thirty (30) days
prior to such Transfer; (b) delivers to
Landlord, at the tune of Tenant's
notice, current financial statements of
Tenant and the Affiliate that are
reasonably acceptable to Landlord; and (c)
the Affiliate assumes and agrees ins
writing delivered to and reasonably
acceptable to Landlord to perform Tenant's
obligations under this Lease arising after
such Transfer and to observe all
terms and conditions of this Lease. For
purposes of this Section 11, the term
"Affiliate" means any person or entity
that, directly or indirectly, controls,
is controlled by or is under common control
with Tenant. For purposes of this
definition, "control" means possessing the
power to direct or cause the
direction of the management and policies of
the entity by the ownership of a
majority of the voting interests of the
entity.
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12.
IMPROVEMENTS; ALTERATIONS:
A.
Tenant shall make no alterations, improvements or
changes to the Premises or the Building
without Landlord's prior written
consent, which consent shall not he
unreasonably withheld or delayed. Unless
Landlord shall otherwise agree, any
alterations, improvements or changes to
which Landlord may consent shall be done
either by or tinder the direction of
Landlord, but at the sole cost of Tenant
and pursuant only to such plans,
specifications and agreements approved in
writing by Landlord. By consenting to
or approving any plans, specifications and
agreements for any alterations,
improvements or changes which Tenant
desires to make to the Premises, Landlord
does not warrant and shall assume no
responsibility or liability for the
completeness, design sufficiency, or
compliance of such plans with all
applicable laws, rules and regulations of
governmental agencies or authorities.
If Landlord performs such work for Tenant,
then Tenant agrees to pay Landlord
any additional costs associated with this
work, including a reasonable
administrative or overhead charge.
B.
Tenant will keep the Building and Common Areas free
from any mechanics', materialmen's,
designers' or other liens arising out of any
work performed, materials furnished or
obligations incurred by or for Tenant or
any person or entity claiming by, through
or under Tenant.
13.
SIGNAGE:
A.
Landlord hereby approves of Tenant's signage in place
as of January 15, 2004.
B.
Tenant shall not display, inscribe, paint or affix
any sign, picture, advertisement or notice
visible from anywhere outside the
Premises without Landlord's prior written
consent. Such consent may he granted
in Landlord's sole discretion. If consented
to by Landlord, any such sign will
meet all requirements set by Landlord, will
be maintained at Tenant's expense
and removed at the termination of this
Lease at Tenant's expense. Tenant will
immediately repair any damage to the
Building or Premises caused by such
removal. Tenant shall have the right to
place its name on the front sign by the
entrance of the building; provided (i) all
costs associated therewith shall be
solely borne by Tenant, (ii) Tenant shall
be responsible for obtaining all
governmental approvals, and (iii) Tenant
shall obtain Landlord's prior approval
as to the location and design of the
signage prior to installation by Tenant.
14. RISK OF
LOSS - INDEMNITY:
A.
Landlord shall not be responsible or liable to Tenant
for any injury, loss or damage to persons
or property occurring in or on the
Premises regardless of cause (except to the
extent caused by the gross
negligence or willful misconduct of
Landlord or its agents, contractors or
employees), it being understood and agreed
that all risk of loss shall be borne
by Tenant.
B.
Subject to Section 15.D. hereof, Tenant agrees to
indemnify and save Landlord harmless from
and against any and all claims and
demands (except to the extent caused by the
gross negligence or willful
misconduct of Landlord or its agents,
contractors or employees) for, or in
connection with, any accident, injury, loss
or damage whatsoever caused or
alleged to have been caused in whole or in
part to any person or property
arising, directly or indirectly, out of the
business conducted in the Premises
or occurring in or on the Premises, or
arising from any act or omission of
Tenant or any assignee or subtenant of
Tenant or their respective licensees,
agents, employees or contractors, and from
and against any and all costs,
expenses and liabilities incurred in
connection with any such claim or
proceeding brought thereon.
15.
INSURANCE:
A.
Tenant, at its own cost and expense, shall maintain:
(i) Commercial
general liability insurance on an
occurrence basis protecting and insuring Landlord, Landlord's
mortgagees, and Tenant against claims and liabilities for injury
or
damage to persons or property or for the loss of life or
property
occurring upon, in or about the Premises, the Building or the Land,
or
the contiguous sidewalks, parking lots, driveways and private
streets,
caused by or resulting from any act or omission of Tenant, its
employees, agents, contractors, customers, guests, licensees or
invitees,
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such insurance to afford minimum protection during the Lease term
in
such amounts as Landlord shall from tune to time designate by
written
notice to Tenant, but in no event less than Two Million Dollars
($2,000,000) combined single limit coverage per location for
bodily
injury, including death, and for property damage liability or a
combination thereof. Such insurance shall contain coverage for
broad
form property damage and contractual liability (including,
without
limitation, that specifically assumed herein). Any policy shall (i)
be
endorsed to name Landlord and its property manager an
additional
insureds, without qualification, limitation, or reservation; (ii)
be
endorsed to he primary to and noncontributory with any
insurance
maintained by Landlord and its property manager; (iii) contain
a
separation of insureds clause in the policy; and (iv) contain a
waiver
of any rights of subrogation in favor of Landlord and ha
property
manager. Landlord shall notify Tenant of any change in its
property
manager and Tenant shall have a reasonable period thereafter to
update
its insurance certificate;
(ii) Insurance in
accordance with the applicable laws
relating to workers' compensation, with respect to all of the
Tenant's
employees working on the Premises, regardless of whether such
coverage
or insurance is mandatory or merely elective under the law.
Tenant
shall also maintain employer's liability coverage with limits of
not
less than One Million Dollars ($1,000,000) per accident Any
policy
shall contain a waiver of rights of subrogation in favor of
Landlord
and its property manager. If Landlord is required by any applicable
law
to pay any workers' compensation premiums with respect to employees
of
Tenant, Tenant shall reimburse Landlord for such payment,
(iii) Fire
insurance in an amount adequate to cover the
cost of repla
