Attached files
EXHIBIT 10.2
[Net Lease]
LEASE AGREEMENT
THIS LEASE AGREEMENT is made this 7th day of March, 2014, between Custer
Place LLC and or assigns ("Landlord"), and the Tenant named below.
Tenant: 5110 Race LLC
Tenant's representative, Shawn Phillips
DBA: Strainwise
Premises: 1150 W. Custer Place
Denver, CO 80223
Approximately 26,700 Square Feet
Tenant's Proportionate Share
of Project: 100%
Lease Term: Beginning on the Commencement Date and
ending on the 31st day of March, 2019.
Commencement Date: April 1, 2014
Initial Monthly Base Rent: $26,700.00
Initial Estimated Monthly Operating $2,500.00
Expense Payments:
Initial Monthly Base Rent and $29,200.00
Operating Expense Payments:
Amount Due & Payable at time of $87,600 (June 2014' rent of $29,200 + last
Lease Execution month rent deposit of $29,200 + Security
Deposit of $29,200)
Monthly Base Rent Month(s) Dates Amount PSF
Initial year 1 Apr 01, 14 to Apr 30, 14 rent abated n/a
2 May 01, 14 to May 30, 14 $16,800 $12.00
3-9 Jun 01, 14 to Dec 31, 14 $29,200 $12.00
10-11 Jan 01, 15 to Feb 28, 15 rent abated n/a
12 Mar 01, 15 to Mar 31, 15 $29,200 $12.00
13-24 Apr 01, 15 to Mar 31, 16 $27,500 $12.36
25-36 Apr 01, 16 to Mar 31, 17 $28,325 $12.73
37-48 Apr 01, 17 to Mar 31, 18 $29,170 $13.11
49-60 Apr 01, 18 to Mar 31, 19 $30,035 $13.50
Security Deposit: $29,200
Addenda:
Tenant shall have two (2) five year option periods
to renew lease under the same terms and conditions
by providing Landlord with written notice within
120 days prior to expiration of lease. The lease
rate shall increase 3% from the prior year (annual
increases to continue at 3%).
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1. Granting Clause. In consideration of the obligation of Tenant to pay
rent as herein provided and in consideration of the other terms, covenants, and
conditions hereof, Landlord Leases to Tenant, and Tenant takes from Landlord,
the Premises, to have and to hold for the Lease Term, subject to the terms,
covenants and conditions of this Lease.
2. Acceptance of Premises. Tenant shall accept the Premises in its
condition as of the Commencement Date, subject to all applicable laws,
ordinances, regulations, covenants and restrictions. Landlord has made no
representation or warranty as to the suitability of the Premises for the conduct
of Tenant's business, and Tenant waives any implied warranty that the Premises
are suitable for Tenant's intended purposes. Except as provided in Paragraph 10,
in no event shall Landlord have any obligation for any defects in the Premises
or any limitation on its use. The taking of possession of the Premises shall be
conclusive evidence that Tenant accepts the Premises and that the Premises were
in good condition at the time possession was taken except for items that are
Landlord's responsibility under Paragraph 10 and any punch list items agreed to
in writing by Landlord and Tenant. Landlord states that the plumbing is in good
working order and roof is free of leaks.
3. Use. Tenant shall have the right to use and occupy the Premises for the
following purposes : Sale, Cultivation and infusion of marijuana in compliance
with Amendment 20 of the Colorado Constitution HB 1284, Colorado HB 1043 and
applicable ordinances of the City and County of Denver, by Tenant and for such
other lawful purposes. . Tenant shall not conduct or give notice of any auction,
liquidation, or going out of business sale on the Premises. Tenant will use the
Premises in a careful, safe manner and will not commit waste thereon. Tenant
shall not permit any unlawful or unpleasant, smoke, dust, gas, noise, or
vibrations to emanate from the Premises, or take any other action that would
constitute a nuisance. Tenant, at its sole expense, shall use and occupy the
Premises in compliance with all laws, including, without limitation, the
Americans With Disabilities Act, orders, judgments, ordinances, regulations,
codes, directives, permits, licenses, covenants and restrictions now or
hereafter applicable to the Premises (collectively, "Legal Requirements"). The
Premises shall not be used as a place of public accommodation under the
Americans with Disabilities Act or similar state statutes or local ordinances or
any regulations promulgated thereunder, all as may be amended from time to time.
Tenant shall, at its expense, make any alterations or modifications, within or
without the Premises that are required by Legal Requirements related to Tenant's
use or occupation of the Premises. Tenant will not use or permit the Premises to
be used for any purpose or in any manner that would void Tenant's or Landlord's
insurance, increase the insurance risk, or cause the disallowance of any
sprinkler credits. If any increase in the cost of any insurance on the Premises
or the Project is caused by Tenant's use or occupation of the Premises, or
because Tenant vacates the Premises, then Tenant shall pay the amount of such
increase to Landlord.
4. Base Rent. Tenant shall pay Base Rent in the amount set forth above. The
first month's Base Rent, the Security Deposit, and the first monthly installment
of estimated Operating Expenses (as hereafter defined) shall be due and payable
on the date hereof, and Tenant promises to pay to Landlord in advance, without
demand, deduction or set-off, monthly installments of Base Rent on or before the
first day of each calendar month succeeding the Commencement Date. Payments of
Base Rent for any fractional calendar month shall be prorated. All payments
required to be made by Tenant to Landlord hereunder shall be payable at such
address as Landlord may specify from time to time by written notice delivered in
accordance herewith. The obligation of Tenant to pay Base Rent and other sums to
Landlord and the obligations of Landlord under this Lease are independent
obligations. Tenant shall have no right at any time to abate, reduce, or set-off
any rent due hereunder except as may be expressly provided in this Lease. Tenant
waives and releases all statutory liens and offset rights as to rent.
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5. Security Deposit. The Security Deposit shall be held by Landlord as
security for the performance of Tenant's obligations under this Lease. The
Security Deposit is not an advance rental deposit or a measure of Landlord's
damages in case of Tenant's default. Upon each occurrence of an Event of Default
(hereinafter defined), Landlord may use all or part of the Security Deposit to
pay delinquent payments due under this Lease, and the cost of any damage,
injury, expense or liability caused by such Event of Default, without prejudice
to any other remedy provided herein or provided by law. Tenant shall pay
Landlord on demand the amount that will restore the Security Deposit to its
original amount. Landlord's obligation respecting the Security Deposit is that
of a debtor, not a trustee; no interest shall accrue thereon. The Security
Deposit shall be the property of Landlord, but shall be paid to Tenant when
Tenant's obligations under this Lease have been completely fulfilled. Landlord
shall be released from any obligation with respect to the Security Deposit upon
transfer of this Lease and the Premises to a person or entity assuming
Landlord's obligations under this Paragraph 5.
6. Operating Expense Payments. During each month of the Lease Term, on the
same date that Base Rent is due, Tenant shall pay Landlord an amount equal to
1/12 of the annual cost, as estimated by Landlord from time to time, of Tenant's
Proportionate Share (hereinafter defined) of Operating Expenses for the Project.
Payments thereof for any fractional calendar month shall be prorated. The term
"Operating Expenses" means all costs and expenses incurred by Landlord with
respect to the ownership, maintenance, operation, and management of the Project
including, but not limited to costs of: Taxes (hereinafter defined) and fees
payable to tax consultants and attorneys for consultation and contesting taxes;
insurance; utilities; maintenance, repair and replacement of all portions of the
Project, including without limitation, paving and parking areas, roads, roofs,
alleys, and driveways, mowing, landscaping, exterior painting, utility lines,
lighting, electrical systems and other mechanical and building systems; amounts
paid to contractors and subcontractors for work or services performed in
connection with any of the foregoing; charges or assessments of any association
to which the Project is subject; property management fees payable to a property
manager, including any affiliate of Landlord, security services, if any; trash
collection, sweeping and removal; and additions or alterations made by Landlord
to the Project or the Building in order to comply with Legal Requirements (other
than those expressly required herein to be made by Tenant) or that are
appropriate to the continued operation of the Project and an administration fee
not to exceed $120.00 per year or $10.00 per month of the above Operating
Expenses payable to Landlord. Operating Expenses do not include costs, or
expenses, depreciation or amortization for capital repairs and capital
replacements required to be made by Landlord under Paragraph 10 of this Lease,
debt service under mortgages or ground rent under ground Leases, costs of
restoration to the extent of net insurance proceeds received by Landlord with
respect thereto, leasing commissions, or the costs of renovating space for
tenants. Landlord will provide a reconciliation report for the Operating
Expenses by March 15th of each year. Tenant shall have a reasonable opportunity
to audit the expenses.
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The Base Rent, Operating Expenses and all other amounts due and payable to
Landlord by Tenant pursuant to this Lease are sometimes collectively referred to
herein as "Rent."
7. Utilities. Tenant shall pay for all water, gas, electricity, heat,
light, power, telephone, sewer, sprinkler services, refuse and trash collection,
and other utilities and services used on the Premises, all maintenance charges
for utilities, and any storm sewer charges or other similar charges for
utilities imposed by any governmental entity or utility provider, together with
any taxes, penalties, surcharges or the like pertaining to Tenant's use of the
Premises. Landlord shall have the right to cause at Tenant's expense any of said
services to be separately metered or charged directly to Tenant by the provider.
Tenant shall pay its share of all charges for jointly metered utilities based
upon consumption, as reasonably determined by Landlord. Landlord shall not be
liable for any interruption or failure of utilities or any other service to the
Premises and no such interruption or failure shall result in the abatement of
rent 'hereunder.unless caused by Landlord. Tenant agrees to limit use of water
and sewer to the amounts allowed by the applicable water and sewer districts and
providers.
8. Taxes. Landlord shall pay all taxes, assessments and governmental
charges (collectively referred to as "Taxes") that accrue against the Project
during the Lease Term, which shall be included as part of the Operating Expenses
charged to Tenant. Landlord may contest by appropriate legal proceedings the
amount, validity, or application of any Taxes or liens thereof. All capital
levies or other taxes assessed or imposed on Landlord upon the rents payable to
Landlord under this Lease and any franchise tax, any excise, transaction, sales
or privilege tax, assessment, levy or charge measured by or based, in whole or
in part, upon such rents from the Premises and/or the Project or any portion
thereof shall be paid by Tenant to Landlord monthly in estimated installments or
upon demand, at the option of Landlord, as additional rent; provided, however,
in no event shall Tenant be liable for any net income taxes imposed on Landlord
unless such net income taxes are in substitution for any Taxes payable
hereunder. If any such tax or excise is levied or assessed directly against
Tenant, then Tenant shall be responsible for and shall pay the same at such
times and in such manner, as the taxing authority shall require. Tenant shall be
liable for all taxes levied or assessed against any personal property or
fixtures placed in the Premises, whether levied or assessed against Landlord or
Tenant.
9. Insurance. Landlord shall maintain all risk property insurance covering
the full replacement cost of the Building. Landlord may, but is not obligated
to, maintain such other insurance and additional coverages as it may deem
necessary, including, but not limited to, commercial liability insurance and
rent loss insurance. All such insurance shall be included as part of the
Operating Expenses charged to Tenant. The Project or Building may be included in
a blanket policy (in which case the cost of such insurance allocable to the
Project or Building will be determined by Landlord based upon the insurer's cost
calculations). Tenant shall also reimburse Landlord for any increased premiums
or additional insurance, which Landlord reasonably deems necessary as a result
of Tenant's use of the Premises.
Tenant, at its expense, shall maintain during the Lease Term: all risk
property insurance covering the full replacement cost of all property and
improvements installed or placed in the Premises by Tenant at Tenant's expense;
worker's compensation insurance with no less than the minimum limits required by
law; employer's liability insurance with such limits as required by law; and
commercial liability insurance, with a minimum limit of $1,000,000 per
occurrence and a minimum umbrella limit of $1,000,000, for a total minimum
combined general liability and umbrella limit of $2,000,000 (together with such
additional umbrella coverage as Landlord may reasonably require) for property
damage, personal injuries, or deaths of persons occurring in or about the
Premises. Landlord may from time to time require reasonable increases in any
such limits. The commercial liability policies shall name Landlord as an
additional insured, insure on an occurrence and not a claims-made basis, be
issued by insurance companies which are reasonably acceptable to Landlord, not
be cancelable unless thirty (30) days prior written notice shall have been given
to Landlord, contain a hostile fire endorsement and a contractual liability
endorsement and provide primary coverage to Landlord (any policy issued to
Landlord providing duplicate or similar coverage shall be deemed excess over
Tenant's policies). Tenant thereof shall deliver such policies or certificates
to Landlord upon commencement of the Lease Term and upon each renewal of said
insurance.
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The all risk property insurance obtained by Landlord and Tenant shall
include a waiver of subrogation by the insurers and all rights based upon an
assignment from its insured, against Landlord or Tenant, their officers,
directors, employees, managers, agents, invitees and contractors, in connection
with any loss or damage thereby insured against. Neither party nor its officers,
directors, employees, managers, agents, invitees or contractors shall be liable
to the other for loss or damage caused by any risk coverable by all risk
property insurance, and each party waives any claims against the other party,
and its officers, directors, employees, managers, agents, invitees and
contractors for such loss or damage. The failure of a party to insure its
property shall not void this waiver. Landlord and its agents, employees and
contractors shall not be liable for, and Tenant hereby waives all claims against
such parties for, business interruption and losses occasioned thereby sustained
by Tenant or any person claiming through Tenant resulting from any accident or
occurrence in or upon the Premises or the Project from any cause whatsoever,
including without limitation, damage caused in whole or in part, directly or
indirectly, by the negligence of Landlord or its agents, employees or
contractors.
10. Landlord's Repairs. Landlord shall maintain, at its expense, the
structural soundness of the roof, foundation, and exterior walls of the Building
in good repair, reasonable wear and tear and uninsured losses and damages caused
by Tenant, its agents and contractors excluded. The term "walls" as used in this
Paragraph 10 shall not include windows, glass or plate glass, doors or overhead
doors, special store fronts, dock bumpers, dock plates or levelers, or office
entries. Tenant shall promptly give Landlord written notice of any repair
required by Landlord pursuant to this Paragraph 10, after which Landlord shall
have a reasonable opportunity to repair.
11. Tenant's Repairs. Subject to Landlord's obligation in Paragraph 10,
Tenant, at its expense, shall maintain in good repair and condition all portions
of the Premises. If Tenant fails to perform any repair for which it is
responsible, Landlord may perform the repair and be reimbursed by Tenant within
ten (10) days after demand therefore. Subject to Paragraphs 9 and 15, Tenant
shall bear the full cost of any repair to any part of the Building or Project
that results from damage caused by Tenant, its agents, contractors, or invitees
and any repair that benefits only the Premises. Heating, ventilation and air
conditioning systems and other mechanical and building systems serving the
Premises shall be maintained at Tenant's expense pursuant to maintenance service
contracts entered into by Tenant or, at Landlord's election, by Landlord.
Landlord shall reasonably approve the scope of services and contractors under
such maintenance contracts.
12. Tenant-Made Alterations and Trade Fixtures. Any alterations, additions,
or improvements made by or on behalf of Tenant to the Premises ("Tenant-Made
Alterations") shall be subject to Landlord's prior written consent that shall
not be unreasonably withheld. Tenant shall cause, at its expense, all
Tenant-Made Alterations to comply with insurance requirements and with Legal
Requirements and shall construct at its expense any alteration or modification
required by Legal Requirements as a result of any Tenant-Made Alterations. All
Tenant-Made Alterations shall be constructed in a good and workmanlike manner by
contractors reasonably acceptable to landlord and only good grades of materials
shall be used. All plans and specifications for any Tenant-Made Alterations
shall be submitted to Landlord for its approval, and Landlord may monitor
construction of the Tenant-Made Alterations; and Tenant shall reimburse Landlord
for its costs in reviewing plans and documents and in monitoring construction.
Tenant shall provide Landlord with the identities and mailing addresses of all
persons performing work or supplying materials, prior to beginning such
construction, and Landlord may post on and about the Premises notices of
non-responsibility pursuant to applicable law. Landlord's right to review plans
and specifications and monitor construction shall be solely for its own benefit,
and Landlord shall have no duty to see that such plans and specifications or
construction comply with applicable laws, codes, rules, or regulations. At
Landlord's request, Tenant shall obtain payment and performance bonds for any
Tenant-Made Alterations which bonds shall be delivered to Landlord prior to
commencement of work on the Tenant-Made Alterations and shall be in form and
substance satisfactory to Landlord. Upon completion of any Tenant-Made
Alterations, Tenant shall deliver to Landlord sworn statements setting forth the
names of all contractors and subcontractors who did work on the Tenant-Made
Alterations and final lien waivers from all such contractors and subcontractor.
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Tenant, at its own cost and expense, may erect such shelves, bins,
machinery and trade fixtures (collectively "Trade Fixtures") in the ordinary
course of its business provided that such items do not alter the basic character
of the Premises, do not overload or damage the Premises, and may be removed
without injury to the Premises, and provided that the construction, erection,
and installation thereof complies with all Legal Requirements and with
Landlord's requirements. Subject to Paragraphs 21 and 38 below, upon the
expiration of the Lease Term, Tenant shall remove its Trade Fixtures and shall
repair any damage caused by such removal, by the last day of the Lease Term.
13. Signs. Should have the right to have signage for at least three signs.
Tenant shall not make any changes to the exterior of the Premises, install any
exterior lights, decorations, balloons, flags, pennants, banners, or painting,
or erect or install any signs, windows or door lettering, placards, decorations,
or advertising media of any type which can be viewed from the exterior of the
Premises, without Landlord's prior written consent. Upon vacation of the
Premises, Tenant shall remove all signs and repair, paint, and/or replace the
building facia surface to which its signs are attached. Tenant shall obtain all
applicable governmental permits and approvals for sign and exterior treatments.
All signs, decorations, advertising media, blinds, draperies and other window
treatment or bars or other security installations visible from outside the
Premises shall be subject to Landlord's approval and conform in all respects to
Landlord's requirements.
15. Restoration. If at any time during the Lease Term a fire or other
casualty damages the Premises, Landlord shall notify Tenant within sixty (60)
days after such damage as to the amount of time Landlord reasonably estimates it
will take to restore the Premises. If the restoration time is estimated to
exceed three (3) months, either Landlord Tenant may elect to terminate this
Lease upon notice to the other party given no later than thirty (30) days after
Landlord's notice. If neither party elects to terminate this Lease or if
Landlord estimates that restoration will take three (3) months or less, then,
subject to receipt of sufficient insurance proceeds, Landlord shall promptly
restore the Premises excluding the improvements installed by Tenant or by
Landlord and paid by Tenant, subject to delays arising from the collection of
insurance proceeds or from Force Majeure events. Tenant at Tenant's expense
shall promptly perform, subject to delays arising from the collection of
insurance proceeds, or from Force Majeure events, all repairs or restoration not
required to be done by Landlord and shall promptly re-enter the Premises and
commence doing business in accordance with this Lease. Notwithstanding the
foregoing, either party may terminate this Lease if the Premises are damaged
during the last year of the Lease Term and Landlord reasonably estimates that it
will take more than one month to repair such damage. Base Rent and Operating
Expenses shall be abated for the period of repair and restoration in the
proportion which the area of the Premises, if any, which is not usable by Tenant
bears to the total area of the Premises. Such abatement shall be the sole remedy
of Tenant, and except as provided herein, Tenant waives any right to terminate
the Lease by reason of damage or casualty loss.
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16. Condemnation. If any part of the Premises or the Project should be
taken for any public or quasi-public use under governmental law, ordinance, or
regulation, or by right of eminent domain, or by private purchase in lieu
thereof (a "Taking" or "Taken"), and the Taking would prevent or materially
interfere with Tenant's use of the Premises or in Landlord's judgment would
materially interfere with or impair its ownership or operation of the Project,
then upon written notice by Landlord this Lease shall terminate and Base Rent
shall be apportioned as of said date. If part of the Premises shall be taken,
and this Lease is not terminated as provided above, the Base Rent payable
hereunder during the unexpired Lease Term shall be reduced to such extent as may
be fair and reasonable under the circumstances. In the event of any such Taking,
Landlord shall be entitled to receive the entire price or award from any such
Taking without any payment to Tenant, and Tenant hereby assigns to Landlord
Tenant's interest, if any, in such award. Tenant shall have the right, to the
extent that same shall not diminish Landlord's award, to make a separate claim
against the condemning authority (but not Landlord) for such compensation as may
be separately awarded or recoverable by Tenant for moving expenses and damage to
Tenant's Trade Fixtures, if a separate award for such items is made to Tenant.
17. Assignment and Subletting. During the course of the lease, the Tenant
may consider a merger, consolidation, or sale of substantial amount of stock of
Tenant or a transfer of a substantial partnership interest of the Tenant. Tenant
shall be able to develop the Premises for the purpose of subleasing to other
tenants. Landlord shall not unreasonably withhold consent to assignment or
subleasing. Without Landlord's prior written consent, Tenant shall not assign
this Lease or Sublease the Premises or any part thereof or mortgage, pledge, or
hypothecate its Leasehold interest or grant any concession or license within the
Premises and any attempt to do any of the foregoing shall be void and of no
effect. For purposes of this paragraph, a transfer of the ownership interests
controlling Tenant shall be deemed an assignment of this Lease unless such
ownership interests are publicly traded. Notwithstanding the above, Tenant may
assign or sublet the Premises, or any part thereof, to any entity-controlling
Tenant, controlled by Tenant or under common control with Tenant (a Tenant
Affiliate), with the consent of Landlord, which consent shall not be
unreasonably withheld. Tenant shall reimburse Landlord for all of Landlord's
reasonable out-of-pocket expenses in connection with any assignment or sublease.
Upon Landlord's receipt of Tenant's written notice of a desire to assign or
sublet the Premises, or any part thereof (other than to a Tenant Affiliate),
Landlord may, by giving written notice to Tenant within thirty (30) days after
receipt of Tenant's notice, terminate this Lease with respect to the space
described in Tenant's notice, as of the date specified in Tenant's notice for
the commencement of the proposed assignment or sublease.
Notwithstanding any assignment or subletting, Tenant and any guarantor or
surety of Tenant's obligations under this Lease shall at all times remain fully
responsible and liable for the payment of the rent and for compliance with all
of Tenant's other obligations under this Lease (regardless of whether Landlord's
approval has been obtained for any such assignments or sublettings). In the
event that the rent due and payable by a sublessee or assignee (or a combination
of the rental payable under such sublease or assignment plus any bonus or other
consideration therefore or incident thereto) exceeds the rental payable under
this Lease, then Tenant shall be bound and obligated to pay Landlord as
additional rent hereunder one half (1/2) of such excess rental and other excess
consideration within ten (10) days following receipt thereof by Tenant.
If this Lease be assigned or if the Premises be subleased (whether in whole
or in part) or in the event of the mortgage, pledge, or hypothecation of
Tenant's Leasehold interest or grant of any concession or license within the
Premises or if the Premises be occupied in whole or in part by anyone other than
Tenant, then upon a default by Tenant hereunder Landlord may collect rent from
the assignee, sublessee, mortgagee, pledgee, party to whom the Leasehold
interest was hypothecated, concessionee or license or other occupant and, except
to the extent set forth in the preceding paragraph, apply the amount collected
to the next rent payable hereunder; and all such rentals collected by Tenant
shall be held in trust for Landlord and immediately forwarded to Landlord. No
such transaction or collection of rent or application thereof by Landlord,
however, shall be deemed a waiver of these provisions or release Tenant from the
further performance by Tenant of its covenants, duties, or obligations
hereunder.
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18. Indemnification. Except for the negligence of Landlord, its agents,
employees or contractors, and to the extent permitted by law, Tenant agrees to
indemnify, defend and hold harmless Landlord, and Landlord's agents, employees
and contractors, from and against any and all losses, liabilities, damages,
costs and expenses (including attorneys' fees) resulting from claims by third
parties for injuries to any person and damage to or theft or misappropriation or
loss of property occurring in or about the Project and arising from the use and
occupancy of the Premises or from any activity, work, or thing done, permitted
or suffered by Tenant in or about the Premises or due to any other act or
omission of Tenant, its subtenants, assignees, invitees, employees, contractors
and agents. The furnishing of insurance required hereunder shall not be deemed
to limit Tenant's obligations under this Paragraph 18.
19. Inspections and Access. Landlord and its agents, representatives, and
contractors may enter the Premises at any reasonable time to inspect the
Premises and to make such repairs as may be required or permitted pursuant to
this Lease and for any other business purpose. Landlord and Landlord's
representatives may enter the Premises during business hours for the purpose of
showing the Premises to prospective purchasers and, during the last year of the
Lease Term, to prospective tenants. Landlord may erect a suitable sign on the
Premises stating the Premises are available to lease or that the Project is
available for sale.
20. Quiet Enjoyment. If Tenant shall perform all of the covenants and
agreements herein required to be performed by Tenant, Tenant shall, subject to
the terms of this Lease, at all times during the Lease Term, have peaceful and
quiet enjoyment of the Premises against any person claiming by, through or under
Landlord.
21. Surrender. Upon termination of the Lease Term or earlier termination of
Tenant's right of possession, all Tenant-Made Alterations and any improvements
constructed by Landlord pursuant to the Construction Addendum, if any, attached
hereto ('Initial Improvements') shall remain in the Premises as the property of
Landlord. Alternatively, upon any such termination, Landlord may, by notice to
Tenant, require Tenant at Tenant's expense to remove any or all Trade Fixtures
and/or any or all Tenant-Made Alterations and/or the Initial Improvements, and
to repair any damage caused by such removal. Any Trade Fixtures, Tenant-Made
Alterations or Initial Improvements not so removed by Tenant as permitted or
required herein shall be deemed abandoned and may be stored, removed, and
disposed of by Landlord at Tenant's expense, and Tenant waives all claims
against Landlord for any damages resulting from Landlord's retention and
disposition of such property. All obligations of Tenant hereunder not fully
performed as of the termination of the Lease Term shall survive the termination
of the Lease Term, including without limitation, indemnity obligations, payment
obligations with respect to Base Rent, Operating Expenses and obligations
concerning the condition and repair of the Premises.
22. Holding Over. If Tenant retains possession of the Premises after the
termination of the Lease Term, unless otherwise agreed in writing, such
possession shall be subject to immediate termination by Landlord at any time,
and all of the other terms and provisions of this Lease (excluding any expansion
or renewal option or other similar right or option) shall be applicable during
such holdover period, except that Tenant shall pay Landlord from time to time,
upon demand, as Base Rent for the holdover period, an amount equal 150% of the
Base Rent in effect on the termination date, computed on a monthly basis for
each month or part thereof during such holding over. All other payments shall
continue under the terms of this Lease. In addition, Tenant shall be liable for
all damages incurred by Landlord as a result of such holding over. No holding
over by Tenant, whether with or without consent of Landlord, shall operate to
extend this Lease except as otherwise expressly provided, and this Paragraph 22
shall not be construed as consent for Tenant to retain possession of the
Premises.
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23. Events of Default. Each of the following events shall be an event of
default ("Event of Default") by Tenant under this Lease:
(i) Tenant shall fail to pay any installment of Base Rent or any other
payment required herein when due, and such failure shall continue for a period
of ten (10) days from the date such payment was due.
(ii) Tenant or any guarantor or surety of Tenant's obligations hereunder
shall (A) make a general assignment for the benefit of creditors; (B) commence
any case, proceeding or other action seeking to have an order for relief entered
on its behalf as a debtor or to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, liquidation, dissolution or
composition of it or its debts or seeking appointment of a receiver, trustee,
custodian or other similar official for it or for all or of any substantial part
of its property (collectively a "proceeding for relief'); (C) become the subject
of any proceeding for relief which is not dismissed within sixty (60) days of
its filing or entry; or (D) die or suffer a legal disability (if Tenant,
guarantor, or surety is an individual) or be dissolved or otherwise fail to
maintain its legal existence (if Tenant, guarantor or surety is a corporation,
partnership or other entity).
(iii) Any insurance required to be maintained by Tenant pursuant to this
Lease shall be canceled or terminated or shall expire or shall be reduced or
materially changed, except, in each case, as permitted in this Lease.
(iv) Tenant shall not occupy or shall vacate the Premises or shall fail to
continuously operate its business at the Premises for the permitted use set
forth herein, whether or not Tenant is in monetary or other default under this
Lease.
(v) Tenant shall attempt or there shall occur any assignment, subleasing
or other transfer of Tenant's interest in or with respect to this Lease except
as otherwise permitted in this Lease.
(vi) Tenant shall fail to discharge any lien placed upon the Premises in
violation of this Lease within thirty (30) days after any such lien or
encumbrance is filed against the Premises.
(vii) Tenant shall fail to comply with any provision of this Lease other
than those specifically referred to in this Paragraph 23, and except as
otherwise expressly provided herein, such default shall continue for more than
thirty (30) days after Landlord shall have given Tenant written notice of such
default.
24. Landlord's Remedies. Upon each occurrence of an Event of Default and so
long as such Event of Default shall be continuing, Landlord may at any time
thereafter at its election: terminate this Lease or Tenant's right of
possession, (but Tenant shall remain liable as hereinafter provided) and/or
pursue any other remedies at law or in equity. Upon the termination of this
Lease or termination of Tenant's right of possession, it shall be lawful for
Landlord to re-enter the Premises as provided by lawful summary dispossession
proceedings or any other action or proceeding authorized by law and to remove
Tenant and all persons and property therefrom. If Landlord re-enters the
Premises, Landlord shall have the right to keep in place and use, or remove and
store, all of the furniture, fixtures and equipment at the Premises.
9
If Landlord terminates this Lease, Landlord may recover from Tenant the sum
of: all Base Rent and all other amounts accrued hereunder to the date of such
termination; the cost of reletting the whole or any part of the Premises,
including without limitation brokerage fees and/or leasing commissions incurred
by Landlord, and costs of removing and storing Tenant's or any other occupant's
property, 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 pursuing its remedies, including reasonable
attorneys' fees and court costs; and the excess of the then present value of the
Base Rent and other amounts payable by Tenant under this Lease as would
otherwise have been required to be paid by Tenant to Landlord during the period
following the termination of this Lease measured from the date of such
termination to the expiration date stated in this Lease, over the present value
of any net amounts which Tenant establishes Landlord can reasonably expect to
recover by reletting the Premises for such period, taking into consideration the
availability of acceptable tenants and other market conditions affecting
leasing. Such present values shall be calculated at a discount rate equal to the
ninety (90) day U.S. Treasury bill rate at the date of such termination.
If Landlord terminates Tenant's right of possession (but not this Lease),
Landlord may, but shall be under no obligation to, relet the Premises for the
account of Tenant for such rent and upon such terms as shall be satisfactory to
Landlord without thereby releasing Tenant from any liability hereunder and
without demand or notice of any kind to Tenant. For the purpose of such
reletting Landlord is authorized to make any repairs, changes, alterations, or
additions in or to the Premises, as Landlord deems reasonably necessary or
desirable. If the Premises are not relet, then Tenant shall pay to Landlord as
damages a sum equal to the amount of the rental reserved in this Lease for such
period or periods, plus the cost of recovering possession of the Premises
(including attorneys' fees and costs of suit), the unpaid Base Rent and other
amounts accrued hereunder at the time of repossession, and the costs incurred in
any attempt by Landlord to relet the Premises. If the Premises are relet and a
sufficient sum shall not be realized from such reletting [after first deducting
therefrom, for retention by Landlord, the unpaid Base Rent and other amounts
accrued hereunder at the time of reletting, the cost of recovering possession
(including attorneys' fees and costs of suit), all of the costs and expense of
repairs, changes, alterations, and additions, the expense of such reletting
(including without limitation brokerage fees and leasing commissions) and the
cost of collection of the rent accruing therefrom] to satisfy the rent provided
for in this Lease to be paid, then Tenant shall immediately satisfy and pay any
such deficiency. Any such payments due Landlord shall be made upon demand
therefore from time to time and Tenant agrees that Landlord may file suit to
recover any sums falling due from time to time. Notwithstanding any such
reletting without termination, Landlord may at any time thereafter elect in
writing to terminate this Lease for such previous breach.
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 and/or a termination of this Lease by Landlord, whether by agreement or
by operation of law, it being understood that such surrender and/or termination
can be effected only by the written agreement of Landlord and Tenant. Any law,
usage, or custom to the contrary notwithstanding, Landlord shall have the right
at all times to enforce the provisions of this Lease in strict accordance with
the terms hereof; and the failure of Landlord at any time to enforce its rights
under this Lease strictly in accordance with same shall not be construed as
having created a custom in any way or manner contrary to the specific terms,
provisions, and covenants of this Lease or as having modified the same. Tenant
and Landlord further agree that forbearance or waiver by Landlord to enforce its
rights pursuant to this Lease or at law or in equity shall not be a waiver of
Landlord's right to enforce one or more of its rights in connection with any
subsequent default. A receipt by Landlord of rent or other payment with
knowledge of the breach of any covenant hereof shall not be deemed a waiver of
such breach, and no waiver by Landlord of any provision of this Lease shall be
deemed to have been made unless expressed in writing and signed by Landlord. To
the greatest extent permitted by law, Tenant waives the service of notice of
Landlord's intention to re-enter as provided for in any statute, or to institute
legal proceedings to that end, and also waives all right of redemption in case
Tenant shall be dispossessed by a judgment or by warrant of any court or judge.
The terms "enter," "re-enter," "entry" or "re-entry," as used in this Lease, is
not restricted to their technical legal meanings. Any reletting of the Premises
shall be on such terms and conditions as Landlord in its sole discretion may
determine (including without limitation a term different than the remaining
Lease Term, rental concessions, alterations and repair of the Premises, Lease of
less than the entire Premises to any tenant and leasing any or all other
portions of the Project before reletting the Premises). Landlord shall not be
liable, nor shall Tenant's obligations hereunder be diminished because of,
Landlord's failure to relet the Premises or collect rent due in respect of such
reletting.
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25. Tenant's Remedies/Limitation of Liability. Landlord shall not be in
default hereunder and Tenant shall not have any remedy or cause of action unless
Landlord fails to perform any of its obligations hereunder within thirty (30)
days after written notice from Tenant specifying such failure (unless such
performance will, due to the nature of the obligation, require a period of time
in excess of thirty (30) days, then after such period of time as is reasonably
necessary). All obligations of Landlord hereunder shall be construed as
covenants, not conditions; and, except as may be otherwise expressly provided in
this Lease, Tenant may not terminate this Lease for breach of Landlord's
obligations hereunder. All obligations of Landlord under this Lease will be
binding upon Landlord only during the period of its ownership or leasehold of
the Premises and not thereafter. The term "Landlord" in this Lease shall mean
only the owner or master lessor, for the time being of the Premises, and in the
event of the transfer by such owner or master lessor, of its interest in the
Premises, such owner or master lessor shall thereupon be released and discharged
from all obligations of Landlord thereafter accruing, but such obligations shall
be binding during the Lease Term upon each new owner for the duration of such
owner's ownership. Any liability of Landlord under this Lease shall be limited
solely to its interest in the Project, and in no event shall any personal
liability be asserted against Landlord in connection with this Lease nor shall
any recourse be had to any other property or assets of Landlord.
26. Waiver of Jury Trial. TENANT AND LANDLORD WAIVE ANY RIGHT TO TRIAL BY
JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE, BETWEEN LANDLORD AND TENANT ARISING OUT OF THIS
LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.
27. Subordination. This Lease and Tenant's interest and rights hereunder
are and shall be subject and subordinate at all times to the lien of any
mortgage, now existing or hereafter created on or against the Project or the
Premises, and all amendments, restatements, renewals, modifications,
consolidations, refinancing, assignments and extensions thereof, without the
necessity of any further instrument or act on the part of Tenant. Tenant agrees,
at the election of the holder of any such mortgage, to attorn to any such
holder. Tenant agrees upon demand to execute, acknowledge and deliver such
instruments, confirming such subordination and such instruments of attornment as
shall be requested by any such holder. Tenant hereby appoints Landlord's
attorney in fact for Tenant irrevocably (such power of attorney being coupled
with an interest) to execute, acknowledge and deliver any such instrument and
instruments for and in the name of the Tenant and to cause any such instrument
to be recorded. Notwithstanding the foregoing, any such holder may at any time
subordinate its mortgage to this Lease, without Tenant's consent, by notice in
writing to Tenant, and thereupon this Lease shall be deemed prior to such
mortgage without regard to their respective dates of execution, delivery or
recording and in that event such holder shall have the same rights with respect
to this Lease as though this Lease had been executed prior to the execution,
delivery and recording of such mortgage and had been assigned to such holder.
The term "mortgage" whenever used in this Lease shall be deemed to include deeds
of trust, security assignments and any other encumbrances, and any reference to
the "holder" of a mortgage shall be deemed to include the beneficiary under a
deed of trust.
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28. Mechanic's Liens. Tenant has not expressed or implied authority to
create or place any lien or encumbrance of any kind upon, or in any manner to
bind the interest of Landlord or Tenant in, the Premises or to charge the
rentals payable hereunder for any claim in favor of any person dealing with
Tenant, including those who may furnish materials or perform labor for any
construction or repairs. Tenant covenants and agrees that it will pay or cause
to be paid all sums legally due and payable by it on account of any labor
performed or materials furnished in connection with any work performed on the
Premises and that it will save and hold Landlord harmless from all loss, cost or
expense based on or arising out of asserted claims or liens against the
Leasehold estate or against the interest of Landlord in the Premises or under
this Lease. Tenant shall give Landlord immediate written notice of the placing
of any lien or encumbrance against the Premises and cause such lien or
encumbrance to be discharged within ten (10) days of the filing or recording
thereof; provided, however, Tenant may contest such liens or encumbrances as
long as such contest prevents foreclosure of the lien or encumbrance and Tenant
causes such lien or encumbrance to be bonded or insured over in a manner
satisfactory to Landlord within such ten (10) day period.
29. Estoppel Certificates. Tenant agrees, from time to time, within ten
(10) days after request of Landlord, to execute and deliver to Landlord, or
Landlord's designee, any estoppel certificate requested by Landlord, stating
that this Lease is in full force and effect, the date to which rent has been
paid, that Landlord is not in default hereunder (or specifying in detail the
nature of Landlord's default), the termination date of this Lease and such other
matters pertaining to this Lease as may be requested by Landlord. Tenant's
obligation to furnish each estoppel certificate in a timely fashion is a
material inducement for Landlord's execution of this Lease. No cure or grace
period provided in this Lease shall apply to Tenant's obligations to timely
deliver an estoppel certificate. Tenant hereby irrevocably appoints Landlord as
its attorney in fact to execute on its behalf and in its name any such estoppel
certificate if Tenant fails to execute and deliver the estoppel certificate
within ten (10) days after Landlord's written request thereof.
30. Environmental Requirements. Except for Hazardous Material contained in
products used by Tenant in de minimus quantities for ordinary cleaning and
office purposes, Tenant shall not permit or cause any party to bring any
Hazardous Material upon the Premises or store or use any Hazardous Material in
or about the Premises without Landlord's prior written consent. Tenant, at its
sole cost and expense, shall operate its business in the Premises in compliance
with all Environmental Requirements and shall immediately remediate any
Hazardous Materials released on or from the Project by Tenant, its agents,
employees, contractors, subtenants or invitees. The term "Environmental
Requirements" means all applicable present and future statutes, regulations,
ordinances, rules, codes, judgments, orders or other similar enactments of any
governmental authority or agency regulating or relating to health, safety, or
environmental conditions on, under, or about the Premises or the environment,
including without limitation, the following: the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"); the Resource Conservation
and Recovery Act; and all state and local counterparts thereto, and any
regulations or policies promulgated or issued thereunder. The term "Hazardous
Material(s)' means and includes petroleum (as defined in CERCLA) and any
substance, material, waste, pollutant, or contaminant listed or defined as
hazardous or toxic, under any Environmental Requirements.
Tenant shall indemnify, defend, and hold Landlord harmless from and against
any and all losses (including, without limitation, diminution in value of the
Premises or the Project and loss of rental income from the Project), claims,
demands, actions, suits, damages (including, without limitation, punitive
damages and consequential damages), expenses (including, without limitation,
remediation, corrective action, or cleanup expenses), and costs (including,
without limitation, actual attorneys' fees, consultant fees or expert fees)
which are brought or recoverable against, or suffered or incurred by Landlord as
a result of any release of Hazardous Materials for which Tenant is obligated to
remediate as provided above or any other breach of the requirements under this
Paragraph 30 by Tenant, its agents, employees, contractors, subtenants,
assignees or invitees, regardless of whether Tenant had knowledge of such
noncompliance. The obligations of Tenant under this Paragraph 30 shall survive
any termination of this Lease.
12
Landlord shall have access to, and a right to perform inspections and tests
of, the Premises to determine Tenant's compliance with Environmental
Requirements, its obligations under this Paragraph 30, or the environmental
condition of the Premises. Access shall be granted to Landlord upon Landlord's
prior notice to Tenant and at such times so as to minimize, so far as may be
reasonable under the circumstances, any disturbance to Tenant's operations. Such
inspections and tests shall be conducted at Landlord's expense, unless such
inspections or tests reveal that Tenant has not complied with any Environmental
Requirement, in which case Tenant shall reimburse Landlord for the reasonable
cost of such inspection and tests. Landlord's receipt of or satisfaction with
any environmental assessment in no way waives any rights that Landlord holds
against Tenant.
31. Rules and Regulations. Tenant shall, at all times during the Lease Term
and any extension thereof, comply with all reasonable rules and regulations at
any time or from time to time established by Landlord covering use of the
Premises and the Project. The current rules and regulations are attached hereto.
In the event of any conflict between said rules and regulations and other
provisions of this Lease, the other terms and provisions of this Lease shall
control. Landlord shall not have any liability or obligation for the breach of
any rules or regulations by other tenants in the Project.
32. Security Service. Tenant acknowledges and agrees that, while Landlord
may patrol the Project, Landlord is not providing any security services with
respect to the Premises and that Landlord shall not be liable to Tenant for, and
Tenant waives any claim against Landlord with respect to, any loss by theft or
any other damage suffered or incurred by Tenant in connection with any
unauthorized entry into the Premises or any other breach of security with
respect to the Premises.
33. Force Majeure. Landlord shall not be held responsible for delays in the
performance of its obligations hereunder when caused by strikes, lockouts, labor
disputes, acts of God, inability to obtain labor or materials or reasonable
substitutes therefor, governmental restrictions, governmental regulations,
governmental controls, delay in issuance of permits, enemy or hostile
governmental action, civil commotion, fire or other casualty, and other causes
beyond the reasonable control of Landlord (Force Majeure).
34. Entire Agreement. This Lease constitutes the complete agreement of
Landlord and Tenant with respect to the subject matter hereof. No
representations, inducements, promises or agreements, oral or written, have been
made by Landlord or Tenant, or anyone acting on behalf of Landlord or Tenant,
which are not contained herein, and any prior agreements, promises,
negotiations, or representations are superseded by this Iease. An instrument in
writing signed by both parties hereto may not amend except this Lease.
35. Severability. If any clause or provision of this Lease is illegal,
invalid or unenforceable under present or future laws, then and in that event,
it is the intention of the parties hereto that the remainder of this Lease shall
not be affected thereby. It is also the intention of the parties to this Lease
that in lieu of each clause or provision of this Lease that is illegal, invalid
or unenforceable, there be added, as a part of this Lease, a clause or provision
as similar in terms to such illegal, invalid or unenforceable clause or
provision as may be possible and be legal, valid and enforceable.
13
36. Brokers. Tenant represents and warrants that it has dealt with no
broker, agent or other person in connection with this transaction and that no
broker, agent or other person brought about this transaction, other than the
broker, if any, set forth on the first page of this Lease, and Tenant agrees to
indemnify and hold Landlord harmless from and against any claims by any other
broker, agent or other person claiming a commission or other form of
compensation by virtue of having dealt with Tenant with regard to this leasing
transaction.
37. Miscellaneous. (a) Any payments or charges due from Tenant to Landlord
hereunder shall be considered rent ("Rent") for all purposes of this Lease.
(b) If and when included within the term "Tenant," as used in this
instrument, there is more than one person, firm or corporation; each shall be
jointly and severally liable for the obligations of Tenant.
(c) All notices required or permitted to be given under this Lease shall be
in writing and shall be sent by registered or certified mail, return receipt
requested, or by a reputable national overnight courier service, postage
prepaid, or by hand delivery addressed to the parties at their addresses below,
and with a copy sent to Landlord at 13982 W. Bowles Ave Suite 200, Littleton, CO
80111. Either party may by notice given aforesaid change its address for all
subsequent notices. Except where otherwise expressly provided to the contrary,
notice shall be deemed given upon delivery.
(f) Neither this Lease nor a memorandum of Lease shall be filed by or on
behalf of Tenant in any public record. Landlord may prepare and file, and upon
request by Landlord Tenant will execute, a memorandum of Lease.
(g) The normal rule of construction to the effect that any ambiguities are
to be resolved against the drafting party shall not be employed in the
interpretation of this Lease or any exhibits or amendments hereto.
(h) The submission by Landlord to Tenant of this Lease shall have no
binding force or effect, shall not constitute an option for the leasing of the
Premises, nor confer any right or impose any obligations upon either party until
execution of this Lease by both parties.
(i) Words of any gender used in this Lease shall be held and construed to
include any other gender, and words in the singular number shall be held to
include the plural, unless the context otherwise requires. The captions inserted
in this Lease are for convenience only and in no way define, limit or otherwise
describe the scope or intent of this Lease, or any provision hereof, or in any
way affect the interpretation of this Lease.
(j) Late Fees and Interest on Late Payments. Tenant recognizes that the
late payment of any Rent will result in administrative and other expenses to
Landlord, the extents of which are difficult and economically impractical to
ascertain. Tenant, therefore, agrees that any payment of Base Rent and/or
Operating Expenses, or any other amount due Landlord by Tenant hereunder, which
is not paid within ten (10) days of the due date shall be increased by a late
fee equal to fifteen percent (15%) of the payment due. Any delinquent payments
of Base Rent, Operating Expenses or other amounts due Landlord pursuant to the
terms of the Lease, including the late fee specified above, shall accrue
interest at the rate of eighteen percent (18%) per annum commencing ten (10)
days after the due date thereof. The provisions of this article shall in no way
relieve Tenant of the obligation to pay Rent on or before the date on which it
is due, or affect Landlord's remedies pursuant to Article 24, but shall be an
addition thereto.
14
(k) Construction and interpretation of this Lease shall be governed by the
laws of the state in which the Project is located.
(1) Time is of the essence as to the performance of Tenant's obligations
under this Lease.
(m) All exhibits and addenda attached hereto are hereby incorporated into
this Lease and made a part hereof. In the event of any conflict between such
exhibits or addenda and the terms of this Lease, such exhibits or addenda shall
control.
38. Landlord's Lien/Security Interest. Tenant hereby grants Landlord a
security interest, and this Lease constitutes a security agreement, within the
meaning of and pursuant to the Uniform Commercial Code of the state in which the
Premises are situated as to all of Tenant's property situate in, or upon, or
used in connection with the Premises (except merchandise sold in the ordinary
course of business) as security for all of Tenant's obligations hereunder,
including, without limitation, the obligation to pay rent. Such property thus
encumbered includes specifically all trade and other fixtures for the purpose of
this Paragraph and , equipment, . (cannot legaly assign) In order to perfect
such security interest, Tenant shall execute such financing statements and file
the same at Tenant's expense at the state and county Uniform Commercial Code
filing offices as often as Landlord in its discretion shall require; and Tenant
hereby irrevocably appoints Landlord its agent for the purpose of executing and
filing such financing statements on Tenant's behalf as Landlord shall deem
necessary.
39. Personal Property / Furniture, Fixtures and Equipment (FF&E): Tenant
acknowledges that any FF&E that may remain on the premises including but not
limited to Lifts, Storage Racks, Compressors, Heating, Air Conditioning and
other Fixtures, are in `AS IS' condition. Landlord shall be responsible for the
removal of all office furniture currently on the premises.
40. Additional Provisions: In the event Colorado or local law is changed
which makes Tenant's use of the Premises illegal under Colorado or local law,
and provided Tenant may not continue said use even if under a grandfather
clause. Tenant may terminate the Lease subject to requirements for vacating the
property within this Lease. And upon the following terms and conditions.
A Tenant shall notify Landlord in writing no less than 90 days from
date Tenant elects to terminate.
15
B. At time of notification Tenant shall tender Landlord rents due
through the time of vacating.
C. Tenant shall not include the security deposit as portion of the
sum tendered. D. Tenant shall return the Premises to Landlord
upon expiration of the 60 th th day.
41. Acknowledgement: Tenant acknowledges that the growing and sale of
Marijuana may violate federal laws. In addition to any other provision in this
Lease, Tenant shall indemnify, protect, defend and hold harmless the leased
premises and Landlord, from and against any and all claims, loss of rents and/or
damages, costs, liens, judgments, penalties, fine, loss of permits, attorneys'
and consultants' fees, expenses and/or liabilities arising out of, involving, or
in connection with, the cultivation, sale, infusion, or other activity involving
Marijuana in or on the Premises. The foregoing shall include, but not be limited
to, the defense or pursuit of any claim or any action or proceeding involved
therein, and whether or not (in the case of claims made against Landlord)
litigated and/or reduced to judgment. In case any action or proceeding is
brought against Landlord by reason of any of the foregoing matters, Tenant upon
notice from Landlord shall defend the same at Tenant's expense by counsel
reasonably satisfactory to Landlord and Landlord shall cooperate with Tenant in
such defense. Landlord need not have first paid any such claim in order to be so
indemnified. The provisions of this Section shall survive the expiration or
termination of this Lease.
42. Right of First Offer. Landlord hereby grants to Tenant a right of first
offer with respect to any sale of the Property to a non-related party,
("Tenant's Right of First Offer"). If Landlord decides to sell the Premises,
Landlord shall first notify Tenant in writing of Landlord's intention (the
"Notice to Sell"). Tenant will have (a) Fifteen (15) days to deliver to Landlord
a letter of intent setting forth the material terms under which Tenant proposes
to buy the Premises and (b) an additional ten (10) days to submit to Landlord a
contract setting forth the terms under which Tenant proposes to buy the Premises
(the "Negotiation Period"). Should the parties fail to enter into a contract to
purchase and sell the Premises within the Negotiation Period, Tenant will have
no further rights with respect to the Premises, and Landlord will be free to
offer and sell the Premises to any third party, under any terms and conditions
acceptable to Landlord. Tenant shall, upon Landlord's request, execute and
acknowledge an instrument evidencing Tenant's relinquishment of Tenant's Right
of First Offer with respect to the Premises.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
day and year first above written.
TENANT: LANDLORD
5110 RACE, LLC CUSTER PLACE, LLC
By:/s/ Shawn Phillips By:/s/ Billy Halax
------------------------------ ------------------------------
Title: Managing Member Its: Manager
Address: Address:
1350 Independence St., Ste. 300
--------------------------------- 13982 W. Bowles Ave, Suite 200
Lakewood, CO 80215 Littleton, CO 80127
---------------------------------
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Rules and Regulations
1. The sidewalk, entries, and driveways of the Project shall not be obstructed
by Tenant, or its agents, or used by them for any purpose other than
ingress and egress to and from the Premises.
2. Tenant shall not place any objects, including antennas, outdoor furniture,
etc., in the parking areas, landscaped areas or other areas outside of its
Premises, or on the roof of the Project.
3. Except for seeing-eye dogs, no animals shall be allowed in the offices,
halls, or corridors in the Project.
4. Tenant shall not disturb the occupants of the Project or adjoining
buildings by the use of any radio or musical instrument or by the making of
loud or improper noises.
5. If Tenant desires telegraphic, telephonic or other electric connections in
the Premises, Landlord or its agent will direct the electrician as to where
and how the wires may be introduced; and, without such direction, no boring
or cutting of wires will be permitted. Any such installation or connection
shall be made at Tenant's expense.
6. Tenant shall not install or operate any steam or gas engine or boiler, or
other mechanical apparatus in the Premises, except as specifically approved
in the Lease. The use of oil, gas or inflammable liquids for heating,
lighting or any other purpose is expressly prohibited. Explosives or other
articles deemed extra hazardous shall not be brought into the Project.
7. Parking any type of recreational vehicles is specifically prohibited on or
about the Project. Except for the overnight parking of operative vehicles,
no vehicle of any type shall be stored in the parking areas at any time. In
the event that a vehicle is disabled, it shall be removed within 48 hours.
There shall be no "For Sale" or other advertising signs on or about any
parked vehicle. All vehicles shall be parked in the designated parking
areas in conformity with all signs and other markings. All parking will be
open parking, and no reserved parking, numbering or lettering of individual
spaces will be permitted except as specified by Landlord.
8. Tenant shall maintain the Premises free from rodents, insects and other
pests.
9. Landlord reserves the right to exclude or expel from the Project any person
who, in the judgment of Landlord, is intoxicated or under the influence of
liquor or drugs or who shall in any manner do any act in violation of the
Rules and Regulations of the Project.
10. Tenant shall not cause any unnecessary labor by reason of Tenant's
carelessness or indifference in the preservation of good order and
cleanliness. Landlord shall not be responsible to Tenant for any loss of
property on the Premises, however occurring, or for any damage done to the
effects of Tenant by the janitors or any other employee or person.
11. Tenant shall give Landlord prompt notice of any defects in the water, lawn
sprinkler, sewage, gas pipes, electrical lights and fixtures, heating
apparatus, or any other service equipment affecting the Premises.
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12. Tenant shall not permit storage outside the Premises, including without
limitation, outside storage of trucks and other vehicles, or dumping of
waste or refuse or permit any harmful materials to be placed in any
drainage system or sanitary system in or about the Premises.
13. All moveable trash receptacles provided by the trash disposal firm for the
Premises must be kept in the trash enclosure areas, if any, provided for
that purpose, or in the areas designated by Landlord.
14. No auction, public or private, will be permitted on the Premises or the
Project.
15. No awnings shall be placed over the windows in the Premises except with the
prior written consent of Landlord.
16. The Premises shall not be used for lodging, sleeping or cooking or for any
immoral or illegal purposes or for any purpose other than that specified in
the Lease. No gaming devices shall be operated in the Premises.
17. Tenant shall ascertain from Landlord the maximum amount of electrical
current, which can safely be used in the Premises, taking into account the
capacity of the electrical wiring in the Project and the Premises and the
needs of other tenants, and shall not use more than such safe capacity.
Landlord's consent to the installation of electric equipment shall not
relieve Tenant from the obligation not to use more electricity than such
safe capacity.
18. Tenant assumes full responsibility for protecting the Premises from theft,
robbery and pilferage.
19. Tenant shall not install or operate on the Premises any machinery or
mechanical devices of a nature not directly related to Tenant's ordinary
use of the Premises and shall keep all such machinery free of vibration,
noise and air waves which may be transmitted beyond the Premises.
18
