HomeMy WebLinkAbout2016 Resolution No. 049•
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RESOLUTION No.1i_
SERIES OF 2016
A RESOLUTION SUPPORTING THE ENGLEWOOD MCLELLAN RESERVOIR
FOUNDATION LEASE OF LOT 4 IN HIGHLANDS RANCH PLANNING AREA 85
(PA 85) WITH SOLANA LUCENT STATION LLC. CONSISTING OF 9.89 ACRES.
WHEREAS, the Englewood McLellan Reservoir Foundation was formed to oversee the
development of the McLellan Reservoir property; and
WHEREAS, the Lease is for approximately 9 .89 acres of the Englewood McLellan Reservoir
Foundation property; and
WHEREAS, the City will realize $390,678 on average per year for the lease of this property
over twenty years for a total amount of $7. 8 million dollars; and
WHEREAS , the Englewood City Council discussed the terms of the proposed Lease terms at
the January 7, 2013 Executive Session, and the Study Session of February 4, 2013; and
WHEREAS, the Englewood McLellan Reservoir Board (EMRF) Board of Directors seeks a
Resolution of Support from the Englewood City Council for a Lease with Solana Lucent Station
LLC.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
ENGLEWOOD, COLORADO, AS FOLLOWS:
Section 1. The City Council of the City of Englewood, Colorado, hereby supports the Lease
between the Englewood McClellan Reservoir Foundation and Solana Lucent Station LLC. for the
lease of a portion of the McLellan Property, attached hereto as Exhibit A.
ADOPTED AND APPROVED this 14th day of March, 2016.
I, L oucrishia A. Ellis, City ClerJcJ9r the City of Englewood, Col ado, hereby certify the above is
a true copy of Resolution No. :f2___, Series of 2016.
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COUNCIL COMMUNICATION
Date Agenda Item Subject
March 14, 2016 Resolution of support to the
11 cii Englewood Mclellan
Reservoir Foundation for
enter into a ground lease
with MKS Residential, d.b.a.
Solana Lucent Station, LLC.
INITIATED BY STAFF SOURCE
Englewood Mclellan Reservoir Foundation Michael Flaherty, EMRF Board of Directors
COUNCIL GOAL AND PREVIOUS COUNCIL ACTION
In 1999, City Council authorized the creation of the Englewood Mclellan Reservoir
Foundation (EMRF) for the purpose of facilitating the development of property adjacent
to the City's Mclellan Reservoir. On January 7, 2013 and again during a Council Study
Session on February 4, 2013, the EMRF Board of Directors of EMRF presented a Letter
of Intent (LOI) from MKS Residential, d.b.a. Solana Lucent Station, LLC, for a lease of
property in Highlands Ranch Planning Area 85 (PASS.) Since that time, EMRF and
MKS have negotiated a lease, based on the terms of the LOI and MKS has secured its
entitlements from Douglas County.At the City Council Study Session on February 22,
2016, the Board of Directors of the Englewood Mclellan Reservoir Foundation (EMRF)
presented the terms of the lease agreement to Council.
RECOMMENDED ACTION
EMRF recommends City Council approve a resolution supporting the EMRF to enter
into a ground lease with MKS Residential, d.b.a. Solana Lucent Station, LLC, for lease
of the 9.89 acres in Lot 4 in PA 85 owned by EMRF.
BACKGROUND
In 1999, through Ordinance 41, City Council authorized the transfer of certain parcels of
property in Douglas County near Mclellan Reservoir to EMRF for the purpose of
facilitating the development of those properties. Since that time, EMRF has managed
and maintained the property, has made improvements, including over-lot grading and
storm water management, and has platted most of the individual parcels, including the
subject parcel. The basic terms of the lease with MKS are as follows:
1. The lease acknowledges the payment of a deposit of $200,000.
2. The term of the lease is twenty (20) years with two (2) extension options of
twenty (20) years each, and one final option of fifteen (15) years. (A maximum
total lease term of 75 years.)
3. A Construction Rent Period beginning on the Commencement Date and shall
be at½ the Base Rent, or $13,737/month. Construction Rent will terminate
the earlier of 18 months or the issuance of Certificate of Occupancy.
Construction Rent shall be drawn from a $200,000 deposit that was required •
by the Letter of Intent.
4. Base Rent shall be $329,702 annually, to commence on the issuance of a
final Certificate of Occupancy or eighteen (18) months from the
Commencement Date. Base Rent is based on a land value of $9.00 per land
square foot with an 8.5% annual yield to EMRF.
5. Base Rent shall be increased at year five (5) and every five (5) years
thereafter during the Initial Term and during any Extension Term, the rent
shall be increased by ten percent (10%).
6. In the event that the Tenant exercises an Extension Option, the Base Rent
shall be adjusted, equal to any increase in the Consumer Price Index.
7. The Construction Period Rent will be ½ the Annual Rent for each phase.
8. At year five and every five (5) years thereafter during the Initial Term, the
Annual Rent then in effect for the Phase 1 and Phase 2 Improvements shall
be increased by ten percent (10%).
9. At the first renewal option, the Base Rent shall be adjusted, equal to any
increase in the Consumer Price Index, above the five year adjustments.
FINANCIAL IMPACT
Based on the terms of the lease the gross payments to EMRF over the intial 20 year
term is $7.8 million, an annual average of $390,678.
LIST OF ATTACHMENTS
City Council Resolution
Lease agreement
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TO:
FROM:
DATE:
REGARDING:
Lou,
Lou Ellis
Nancy Fritz
March 15, 2016
EMRF -Solana Lucc11L~uition LLC Lease passed by Resolution on
March 14, 2015
Please find attached 1 original of the Solana Lucent Station Lease which requires the Tom
Brennan's signature as President of EMRF.
Once the Mayor has signed the Resolution talce a copy of the signed Resolution and the original
Lease to Tom for his signature to be affixed to the Lease.
Then a copy of the signed resolution and the signed Original Lease need to come back to me for
further processing by Mike Miller, Esq. for the City.
Mike Miller is in charge of getting all the documents signed by the Parties.
Once Mike has completed the transaction Mike will get an original Exchange Agreement to Lou
Ellis for the City's records .
Tom,
Lou will bring you a signed resolution and the original Lease for you to sign.
Once you have signed the Lease bring the signed Resolution and the original Lease to me to get
back to Mike Miller for further processing.
Thank you.
Nancy Fritz
CC: Tom Brennan
C T Y O F
OFFICE OF
H. Michael Miller
Berenbaum W einshienk PC
370 17 th Street -Suite 4800
Denver, CO 80202
Mike,
G
T H E CIT y ATTORNEY
March 29, 2016
Enclosed you will find a copy of Resolution No. 49, Series of 2016 -Englewood McLellan
Reservoir Foundation Lease-SOLANA Lucent Station LLC 9.89 Acres PA 85 -City of
Englewood Resolution No. 49, Series of 2016.
I assume Tom Brennan sent you the original, but all I have is a copy Tom gave me. However,
please note that what Tom gave me was incorrect and I have included Resolution No. 49, Series
2016 as well as the cover page of the Lease marked Exhibit A.
• Sincerely,
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Nancy Fritz
City Attorney's Office
Enclosure
Daniel L. Brotzman, City Attorney
Dugan S. Comer, Deputy City Attorney Crystal D. Lay, Prosecuting Attorney
1000 Englewood Parkway • Englewood, Colorado 80110 • Phone 303-762-2320 • FAX 303-783-6892
www.englewoodgov.org
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(00325438:)
GROUND LEASE
between
ENGLEWOOD/MCLELLAN RESERVOffi FOUNDATION,
a Colorado non-profit corporation,
as Landlord
and
SOLANA LUCENT STATION LLC,
a Delaware limited liability company,
as Tenant
Dated effective as of January 1, 2016
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• Table of Contents:
Fundamental Lease Terms ............................................................................................................ 1
Definitions ....................................................................................................................................... 3
Lease of Premises ........................................................................................................................... 6
Lease Term; Pre Commencement Right of Entry; Title Insurance .......................................... 9
Rent ............................................................................................................................................... 11
Taxes .............................................................................................................................................. 15
Utilities/Maintenance and Repair Obligations .......................................................................... 17
Use, Assignment and Subletting ................................................................................................. 17
Mechanics Liens ........................................................................................................................... 19
Indemnity and Insurance ............................................................................................................ 20
• Damage or Destruction ................................................................................................................ 23
Eminent Domain .......................................................................................................................... 25
Default ........................................................................................................................................... 26
Covenant of Quiet Enjoyment .................................................................................................... 31
Landlord's Right to Mortgage/Transfers by Landlord ............................................................ 31
Right of First Refusal. ................................................................. ~················································32
Surrender of Premises ................................................................................................................. 33
Miscellaneous ................................................................................................................................ 33
Leasehold Financing .................................................................................................................... 37
Representations of Landlord and Tenant .................................................................................. 44
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{00325438 :}
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EXHIBITS
EXHIBIT A: LEGAL DESCRIPTION OF PREMISES
EXHIBIT B: SITE PLAN OF PREMISES
EXHIBIT C: MEMORANDUM OF LEASE
EXHIBIT D: PLAZA CIRCLE PHASE 1
EXIIlBIT E: SUBDMSION IMPROVEMENT AGREEMENT
EXHIBIT E-1: SUBDMSION IMPROVEMENT AGREEMENT ASSIGNMENT
{00325438 :} ii
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GROUND LEASE
This GROUND LEASE (the "Lease") is made effective as of the 1st day of January, 2016,
by and between ENGLEWOOD/MCLELLAN RESERVOIR FOUNDATION, a Colorado
nonprofit corporation ("Landlord"), and SOLANA LUCENT STATION LLC, a Delaware
limited liability company ("Tenant"). The date this Lease is executed and delivered by both pru.ties
hereto shall be referred to hereinafter as the "Effective Date."
WITNES SETH:
For and in consideration of the mutual covenants herein contained and other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree to the terms and conditions as hereinafter provided:
1 Fundamental Lease Terms.
For convenience, this Section 1 summarizes certain fundamental economic and business
terms of this Lease.
Effective Date:
Premises:
Landlord
Tenant
{00325438 :}
January 1, 2016.
That certain unimproved real property located in the County of
Douglas, State of Colorado, as more particularly described in
Exhibit A attached hereto and incorporated herein by this
reference, consisting of approximately 430,808 square feet.
The location of the Premises are shown on the Site Plan
attached to this Lease as Exhibit B
ENGLEWOOD/MCLELLAN RESERVOIR FOUNDATION
1000 Englewood Parkway
Englewood, Colorado 80110
Attention: President
SOLANA LUCENT STATION LLC
c/o Rey Lenn Properties LLC
444 S. Cedros, Suite 180
Solana Beach, CA 92075
Attention: Ric Shwisberg, COO
With a copy to:
Rey Lenn Properties LLC
444 S. Cedros, Suite 180
Solana Beach, CA 92075
Attention: Christy Dutchman, CFO
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Term or Initial
Term:
Extension
Options/Extension
Term:
Rent:
Twenty (20) years from the Commencement Date
Two (2) options to extend the Tenn for a period of twenty (20)
years each and one (1) final option to extend the Term for a
period of fifteen (15) years ( each such option being an
"Extension Option and each such extension period being an
"Extension Term").
Construction Rent: Annual rent in the amount of $164,851
payable in equal monthly installments in the amount of
$13,737.58 commencing as provided in Section 5.1.1.
Base Rent: Annual rent in the amount of $329,702 payable in
equal monthly installments in the amount of $27,475.17
commencing as provided in Section 5.1.2. The Base Rent is
subject to adjustment as follows:
On the fifth (5 th ) anniversary of the Commencement Date and
every five (5) years thereafter during the Initial Term (each
such date being an "Initial Term Base Rent Adjustment
Date") the Base Rent then in effect shall be increased by ten
percent (10%).
If the Term is extended for the First Extension Term of twenty
(20) years, then at the commencement of the First Extension
Term, the Base Rent then in effect shall be subject to
adjustment to account for any increase in the "CPI Index" in
the manner set forth in Section 5.3.3. Thereafter, on the fifth
(5 th ) anniversary of the commencement date of the First
Extension Term, and every five (5) years thereafter during the
First Extension Term, the Base Rent then in effect shall be
increased by ten percent (10%).
If the Term is extended for the Second Extension Term of
twenty (20) years, then at the commencement of the Second
Extension Term, the Base Rent shall be subject to further
adjustment to account for any increase in the "CPI Index" in
the manner set forth in Section 5.3.5. On the fifth (5 th)
anniversary of the commencement date of the Second
Extension Term and every five (5) years thereafter during the
Second Extension Term, the Base Rent then in effect shall be
increased by ten percent (10%).
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Deposit
If the Term is fiuther extended for the Third (and final)
Extension Term of fifteen (15) years, then at the
commencement of the Third Extension Term and each five (5)
years thereafter the Base Rent then in effect shall be increased
by ten percent (10%).
This is a Net Lease.
The Deposit in the amount $200,000 (receipt of which is
acknowledged by Landlord) shall be held, disbursed and
applied as provided in Section 5.6 below.
Each of the Fundamental Lease Terms set forth above is a
summary of the terms elsewhere in this Lease which relate to
each such Fundamental Lease Term. If there is any conflict
between any Fundamental Lease Term and any specific clause
of the Lease, the more specific clause shall control.
2 Definitions. For purposes of this Lease, the following te1ms shall have the following
meanings:
2.1 "Base Rent" shall have the meaning set forth in Section 5.1.2
2.2 "Buildings" means the buildings which may be constructed by the Tenant on the
Premises.
2.3 "Casualty" shall have the meaning set forth in Section 11.1.
2.4 "Commencement Date" shall have the meaning set forth in Section 4.1.
2.5 "Construction Rent" means the monthly amount of $13,737.58 as provided in
Section 5.1.1
2.6 "Default" or "Event of Default" shall have the meaning set forth in Section 13.1.
2.7 "Default Rate" means interest accruing at the rate equal to the Prime Rate plus five
percent (5%), which rate shall be adjusted with each change in the Prime Rate.
However, in no event shall the Default Rate be less than ten percent (10%) per
annum. For purposes of this Lease, "Prime Rate" shall mean the prime rate as
published in the Wall Street Journal. If the p1ime rate published by the Wall
Street Journal becomes unavailable, Landlord shall use the prime rate as announce
or published by such other organization or publication as reasonably determined by
Landlord to be comparable to the prime rate now published in the Wall Street
Journal.
• 2.8 "Deposit" shall have the meaning set forth in Section 5.6.
2.9 "Effective Date" means January 1, 2016.
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2.10 "Environmental Law" shall have the meaning set forth in Section 20.1.8
2.11 "Excusable Delay" shall mean any of the following events that prevents, delays,
retards or hinders a party's performance of its duties hereunder: act of God; fire;
earthquake; flood; explosion; war; invasion; insurrection; riot; mob violence;
sabotage; vandalism; inability to procure or general shortage of labor, equipment,
facilities, materials or supplies in the open market; failure of transpmiation; strikes
and lockout.
2.12 "Extension Option" shall have the meaning set forth in Section 4.2.
2.13 "Extension Term" shall have the meaning set forth in Section 4.2.
2.14 "First Extension Term" means the twenty year (20) period commencing on the
first day of 21st Lease Year, and ending 11:59 PM on the last day of the 40th Lease
Year.
2.15 "Improvements" means and includes without limitation, all Buildings, paving,
curbs, gutters, sidewalks, fences and other physical structures now or hereafter
constructed on the Premises of every kind and nature whatsoever, including
without limitation all landscaping and planting and fixtures. The Improvements are
to be constructed on the Premises by or at the direction of Tenant as more
particularly described in Section 3.6. "Improvements" shall also include (i) all
grading, paving and hook-up to utilities (both wet and dry); and (ii) all on-site and
off-site improvements which may be required by any governmental agency as a
condition to the development of the Premises by Tenant.
2.16 "Initial Term" means the first twenty (20) Lease Years as more specifically
described in Section 4.1
2.17 "Institutional Lender" means a national or state bank, federal or state savings and
loan association, mortgage company, insurance company, real estate investment
trust, pension trust or fund, or other similar entity or financial institution regularly
engaged in the business of making loans secured by deeds of trust or mmigages on
commercial or residential real property.
2.18 "Landlord" means Englewood/McLellan Reservoir Foundation, its successors and
assigns.
2.19 "Leasehold Mortgage" shall have the meaning set forth in Section 19 .1
2.20 "Leasehold Mortgagee" shall have the meaning set forth in Section 19 .1
2.21 "Lease Year" means each period of twelve (12) consecutive full calendar months
beginning on the first day of the first calendar month next following the
Commencement Date ( or beginning on the Commencement Date, if the
Commencement Date falls on the first day of a month); provided, however, that the
first Lease Year shall also include any partial month from the Commencement Date
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through the last day of the month in which the Commencement Date falls and the
last Lease Year shall end on the date the Term expires or terminates.
2.22 "Memorandum of Lease" means the Memorandum of Lease in the form attached
to this Lease as Exhibit C and incorporated herein by this reference
2.23 "Monetary Default" shall have the meaning set f01ih in Section 13.1.1
2.24 "Non-Monetary Default" shall have the meaning set forth in Section 13.1.1
2.25 "Pre-Development Rent" shall have the meaning set forth in Section 5.6
2.26 "Premises" shall have the meaning set forth in Section 3.1. The Premises include,
without limitation, all of Landlord's rights, privileges and easements appurtenant to
the real property, including, without limitation, all development rights, air rights,
water rights, wastewater, storm drainage and other utility rights, credits and
capacities, permits, agreements, rights-of-way and other appurtenances used in
connection with the beneficial use and enjoyment of the Premises.
2.27 "Real Estate Taxes" means all taxes, however named, assessed, levied, or
collected, whether on an ad valorem basis or other taxing method on the Premises,
Improvements, Buildings, and assessments for land, betterments, and
improvements that are levied or assessed on the Premises or the Improvements by
any lawful authority, as finally determined in accordance with law, net of any
applicable abatements, refunds, or rebates.
2.28 "Real Property" means the land described in Section 3 .1.
2.29 "Rent" means and includes the Construction Rent, Base Rent and all other
amounts Tenant is required to pay under this Lease.
2.30 "Second Extension Term" means the twenty year (20) period commencing on the
first day of 41st Lease Year, and ending 11 :59 PM on the last day of the 60th Lease
Year.
2.31 "Site Plan" means the Site Plan attached to this Lease as Exhibit B.
2.32 "Tenant" means Solana Lucent Station LLC, a Delaware limited liability company
and its permitted successors or assigns.
2.33 "Third Extension Term" means the fifteen year (15) period commencing on the
first day of 61st Lease Year, and ending 11 :59 PM on the last day of the 75th Lease
Year.
• 2.34 "Title Commitment" shall have the meaning set forth in Section 4.4
2.35 "Title Company" means Fidelity National Title Insurance Company, or such other
title company mutually agreed upon by Landlord and Tenant.
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3 Lease of Premises.
3.1 Lease of Premises. For the Term, uses, rent, and in consideration of the covenants
and agreements contained herein, and for other valuable consideration, Landlord
hereby leases to Tenant and Tenant hereby leases from Landlord, upon the
following te1ms, stipulations, provisions, and conditions, that certain unimproved
real property consisting of approximately 430,808 square feet (9.89 acres) ofland
described in Exhibit A attached hereto and incorporated herein by this reference
("Premises"). The location of the Premises is shown on the Site Plan.
3.2 Title. Landlord hereby represents and warrants to Tenant that it has good,
marketable and insurable title to the Premises, free and clear of any mortgages,
pledges, liens, and other encumbrances, subject only to the exceptions to title
shown in the Title Commitment which have been approved by Tenant.
3.3 Condition of Premises: Tenant Release. Except as otherwise expressly provided
herein, the Premises are being leased in their as-is condition. Except for Landlord's
representations and warranties expressly set forth in this Lease, Tenant hereby
waives, releases, acquits and forever discharges Landlord and its officers, directors,
shareholders, employees, agents, successors and assigns, of and from any and all
suits, causes of action, claims, demands, damages ( actual and punitive), losses,
costs, liabilities, and expenses, including attorneys' fees, of any kind or nature, in
law or in equity, known or unknown, which Tenant shall or may have or acquire or
possess in any way directly or indirectly connected with, based upon, or arising out
of (i) Landlord's use, maintenance, leasing, ownership, operation, and demolition
of improvements upon the Premises prior to the Effective Date of this Lease; or (ii)
the condition (including environmental condition and structural fitness), status,
quality, or nature of the Premises. Except as otherwise expressly provided herein,
it is the intention of this Lease that any and all responsibilities and obligations of
Landlord, and any and all rights or claims of Tenant against Landlord its successors
and assigns and affiliates arising by virtue of the physical condition of the
Premises, are by this release declared null and void and of no present or future
effect as to such parties.
3.4 Premises Improvements. Tenant, at its sole cost and expense, with its own forces or
those of its contractors and subcontractors, may construct Improvements on the
Premises. All of the Improvements shall comply in all material respects with all
applicable governmental requirements. As of the Effective Date it is contemplated
by Tenant that the Premises will be improved with a multi-family residential
development consisting of approximately 285 market rate apartments and
appurtenant facilities in accordance with plans and specifications approved by the
applicable governmental authorities .
3.5 Plaza Circle Improvements. Landlord and Tenant acknowledge that
development of the Real Property will require the phased construction of a loop
road ("Plaza Circle") adjacent to the Real Property and an adjacent parcel of land
owned by the Regional Transportation District ("RTD"). The location of the Plaza
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Circle is shown on the Site Plan. As a condition of this Lease, Tenant assumes the
obligations of Landlord regarding construction of the first phase of the Plaza Circle,
and Tenant shall be entitled to receive all reimbursements and/or credits due
Landlord by RTD in connection with the construction of the first phase of the Plaza
Circle. Without limitation of the foregoing, Landlord acknowledges and agrees
that Landlord shall be required to reimburse Tenant on a monthly basis for fifty
percent (50%) of all costs incurred by Tenant in connection with the construction of
the first Phase of Plaza Circle as contemplated herein, including without limitation,
all costs for permits, labor and materials and bonding (if required). Such
reimbursements shall be made by Landlord to Tenant on a monthly basis and such
reimbursements shall be due and payable no later than thirty (30) days after
Tenant's deliver to Landlord of an invoice/draw request and supporting back-up
documentation, including appropriate lien releases from Tenant's contractor and
subcontractors. A diagram showing the improvements that comprise the first phase
of the Plaza Circle is attached to this Lease as Exhibit D.
3.6 Entitlements/Easements.
3.6.1 Entitlements. Except for those items subject to reimbursement by
Landlord related to Plaza Circle as provided in Section 3.5 above, Tenant
shall be responsible, at its sole cost and expense for obtaining all permits,
approvals and related entitlements ( collectively "Entitlements") required
from applicable governmental authorities for the construction of the
Improvements on the Premises. Landlord shall cooperate with Tenant in
securing the Entitlements, including without limitation, any parcel or
subdivision map which may be required by Tenant in connection with the
separate phasing and financing of the Improvements as contemplated by
this Lease. If Landlord has not done so prior to the Effective Date,
Landlord agrees to execute all documents necessary for Tenant to process
and obtain the Entitlements, including the signing of applications
reasonably requested by Tenant as may be required in connection with the
Entitlements; provided, however, Except for those items subject to
reimbursement by Landlord related to Plaza Circle as provided in Section
3 .5 above, all documents to be signed by Landlord shall be at no cost to
Landlord and without any other liability or obligation of Landlord.
3.6.2 Easements. Landlord and Tenant agree, upon the reasonable request of
either party to this Lease, the applicable governmental agency, quasi-
governmental agency (i.e., RTD) or a public utility, to execute documents
which are reasonably required to create utility easements, temporary
construction easements, or other easements required to construct and
operate the Improvements, maintain and service the Improvements or any
other improvements to be developed on the adjoining lands owned by
Landlord, provided such easements do not unreasonably interfere with
either party's use of their property. Such easements include, without
limitation, those certain easements described on any subdivision map or
plat which may be required by Tenant in connection with the separate
phasing and financing of the Improvements as contemplated by this Lease.
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Each party will undertake to obtain the consent of its mortgagee, if any, to
any easements required under this Section 3.6.2.
3. 7 Subdivision Processing.
3.7.l Subdivision Map and Subdivision Improvement Agreement. Landlord
acknowledges that the Premises are a portion of a larger tract of land
owned in fee by Landlord, and as a part of the processing of the
Entitlements, Tenant processed and on November 19, 2015, recorded a
minor development final plat ("Map") causing the Premises to become a
separate legal parcel as contemplated by this Lease. As the fee owner of
the land (including the Premises) the Map was approved by Landlord as
contemplated in Section 3.6.l above. Concurrently with, and as a condition
to the approval and recording of the Map, the County of Douglas, Colorado
("County") required that the fee owner of the land as "Developer" enter
into a subdivision improvement agreement ("Subdivision Improvement
Agreement") with the County which generally provides for the completion
of certain public improvements within the proposed subdivision. A copy of
the approved Subdivision Improvement Agreement is attached to this Lease
as Exhibit E. The Subdivision Improvement Agreement provides in
pertinent part that the Developer may assign its rights and obligations under
the Subdivision Agreement to a party who is a successor or assignee of the
Developer without the consent of the County. In consideration of
Landlord's execution of the Subdivision Improvement Agreement prior to
the Effective Date, concurrently with the execution of this Lease, Landlord
shall assign all of its rights and obligations as Developer pursuant to
Subdivision Improvement Agreement to Tenant and Tenant shall accept
such assignment and assume such obligations of Developer on the terms
and conditions more particularly set forth in the Assignment and
Assumption of Subdivision Improvement Agreement attached to this
Lease as Exhibit E-1.
3.8 Possession. Except for this Lease, Landlord shall deliver possession of the
Premises free of all tenancies and rights of possession .
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4 Lease Term; Pre Commencement Right of Entry; Title Insurance
4.1 Effective Date: Initial Term: Commencement Date. This Lease shall become
legally binding on the Effective Date. The Initial Term shall commence effective
as of January I, 2016. Unless Tenant has exercised an Extension Option as
provided below, the Initial Te1m shall expire at 11 :59 p.m. on December 31, 2036.
No later than ninety (90) days after the Commencement Date, Landlord shall
deliver a written notice and Amendment to the Memorandum of Lease to Tenant
to confirm the (a) Commencement Date and (b) the resulting expiration date of the
Initial Term. Tenant shall confirm the information set forth in the notice by
execution and delivery of the notice and Amendment to Landlord no later than ten
(10) business days after submission thereof to Tenant. The failure of Tenant to
timely execute and deliver the notice to Landlord shall be deemed Tenant's
confirmation that the information set forth in Landlord's notice is true and correct
for all purposes, in which case Landlord shall have the right to record an
Amendment to the Memorandum of Lease consistent with such confirmation.
4.2 Extension Option .
4.2.1 Extension of Term. Landlord hereby grants to Tenant the option to extend
the Term of this Lease for two (2) additional periods of twenty (20) years
each and one (1) final option for a period of fifteen (15) years ( each such
option being an "Extension Option, and each such 20 or 15-year period, as
applicable, being an "Extension Term"). Tenant shall exercise each
Extension Option by written notice ("Option Notice") delivered by Tenant
to Landlord no later than one hundred eighty (180) days prior to (x) the date
of expiration of the Initial Term, in the case of the First Extension Option;
and (y) the date of expiration of then applicable Extension Term, in the case
of each subsequent Extension Option. If the Term is extended by the then
applicable Extension Term as provided herein, all terms, covenants and
conditions of the Lease shall remain unmodified and in full force and effect,
except that (A) there shall be no further extension of the Term following the
expiration of the Third Extension Term; and (B) the Base Rent to be paid by
Tenant for the then applicable Extension Term shall be subject to
adjustment as set forth below. All references in this Lease to "Term" or
"Lease Term" shall be considered to mean the Te1m as extended, and all
references in this Lease to termination or to the end of the Term shall be
considered to mean the termination or end of the then applicable Extension
Term. As a condition of Tenant's right to exercise one or more Extension
Options, including the right set forth in Section 4.2.3, there shall be no
continuing and uncured Event of Default beyond any applicable notice and
cure period at either the time of Tenant's exercise of such Extension Option
or at the time of Commencement of the Extension Term. If Tenant elects to
terminate this Lease pursuant to Section 4.2.2 below, any unexercised
Extension Options for Extension Terms shall, subject to the rights of any
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Leasehold M01igagee, be deemed terminated upon such termination of the
Lease.
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4.2.2 Tenant Termination/Rights of Leasehold Mortgagee. Tenant may terminate
the Lease at the end of the Initial Term, or at the end of any Extension
Term, by written notice given to Landlord ("Termination Notice") at least
one hundred eighty (180) days prior to the expiration of the then current
Term. The Termination Notice shall include the name and address of any
Leasehold Mortgagee and the name and telephone number of a
representative of such Leasehold Mortgagee. If Tenant elects to terminate
this Lease as provided in the preceding sentence, Landlord shall, no later
than thirty (30) days following receipt of any Termination Notice, provide
written notice of such election to any Leasehold Mortgagee at the address
included in the Termination Notice and such election shall be suspended for
a period of sixty (60) days after receipt of such notice by each such
Leasehold Mortgagee. Any Leasehold Mortgagee may by written notice
given to Landlord prior to the expiration of such sixty (60) day period,
cancel such election, and in such case the Term shall be deemed renewed or
extended in favor of Tenant or the Leasehold Mortgagee, or its nominee, as
shall be specified in Leasehold Mortgagee's notice, without the necessity
for the execution or delivery of any further instrument, and if the Leasehold
Mortgagee has designated itself or its nominee, at the request of Landlord or
the Leasehold Mortgagee, or its nominee, Landlord and the Leasehold
Mortgagee, or its nominee shall enter into a new lease for the Extension
Term as provided in Section 19.9 below.
4.2.3 Landlord's Option Expiration Notice. In the event Tenant, on or prior to
one hundred eighty (180) days prior to the end of the current Term, has
failed to give Landlord either a notice of exercise of the then applicable
Option in accordance with Section 4.2.1. or a Termination Notice in
accordance with Section 4.2.2, then as a condition precedent to the
termination of this Lease, Landlord shall give Tenant and any Leasehold
Mortgagee whose name and address has been provided to Landlord, a
written notice ("Landlord's Option Expiration Notice") stating that this
Lease will terminate unless, within ninety (90) days following the date
Landlord gives the Landlord's Option Expiration Notice, Tenant or such
Leasehold Mortgagee gives Landlord written notice of exercise of the next
applicable Extension Option. In the event Tenant or such Leasehold
Mortgagee gives such notice of exercise within the ninety (90) day period,
and provided there is no continuing and uncured default as provided in
Section 4.2.1, the then applicable Extension Option shall be deemed
exercised for all purposes; however, if Tenant or such Leasehold M01igagee
fails to give such notice of exercise on or before ninety (90) days following
the date Landlord gives the Landlord's Option Expiration Notice, this Lease
shall terminate for all purposes on the later to occur of (i) the expiration of
then current Term; or (i) the expiration of ninety (90) days following the
date Landlord gives Landlord's Option Expiration Notice to Tenant or such
Leasehold Mortgagee.
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4.3 Tenant's Pre-Commencement Right of Entry. Before the Commencement Date,
Tenant, its agents, employees, contractors, or subcontractors, prospective lenders
and investors have been given the right of access to the Premises to test, inspect,
and evaluate the Premises as Tenant deemed appropriate. To the extent Tenant has
not done so prior to the Effective Date, Tenant shall promptly restore any
alterations made to the Premises by Tenant, or at Tenant's instance or request, and
Tenant shall pay for all work performed by Tenant, or at Tenant's instance or
request. Any and all liens on any portion of the Premises resulting from the actions
or requests or otherwise at the instance of Tenant shall be removed by Tenant at its
expense within thirty (30) days after written notice thereof is received by Tenant.
Tenant shall, at Tenant's expense, defend, indemnify, and hold harmless Landlord
from and against any and all obligations, claims, loss, and damage, including costs
and reasonable attorneys' fees, to the extent the same are caused by Tenant's entry
upon or inspection of the Premises. Follo~ing Tenant's receipt of written request
from Landlord, Tenant shall provide Landlord in a commercially reasonable
timeframe with copies oftest and reports obtained by Tenant; provided however,
such tests and reports shall be provided without any representation or warranty
whatsoever as to accuracy or completeness. Tenant's obligations under this
Section 4.3 to restore, to pay for all work, to remove liens, and to defend indemnify
and hold Landlord harmless shall survive the expiration or earlier termination of
this Lease.
4.4 Title Insurance. Landlord has provided Tenant with a Title Insurance
Commitment ("Title Commitment") with an Effective Date of February 4, 2016
issued by Fidelity National Title Company ("Title Company"). Tenant will pay
the premium for the ALT A leasehold title insurance policy described in the Title
Commitment. Landlord shall make arrangements with the Title Company such
that, concurrently with the execution of this Ground Lease, the Title Company
shall be unconditionally prepared to deliver to Tenant, at Tenant's expense, Title
Company's standard coverage ALTA Extended Coverage Owner's Policy of Title
Insurance together with an ALTA Endorsement Form 13 (Leasehold-Owners)
dated as of the Effective Date, showing a good and marketable leasehold interest
in the Real Property vested in Tenant and insuring Tenant in the amount equal to
the value of the Real Property and the Improvements that the Premises is free and
clear of all covenants, rights, rights of way, easements, liens, encumbrances, or
other matters affecting title to or use of the Real Property except: (i) only those
exceptions shown in the Title Commitment that have been approved in writing by
Tenant prior to the Effective Date; and (ii) the customary printed exceptions.
5.1 Construction Rent. Tenant shall initially pay to Landlord, in United States Dollars,
rent ("Construction Rent") in the annual amount of $164,851. Construction Rent
shall be payable in equal monthly installments in the amount of $13,737 .58 each,
commencing on the Commencement Date, and continuing until the "Base Rent
Start Date" as defined in Section 5.2 below. Construction Rent shall be payable in
advance on the first day of each calendar month, with appropriate proration for any
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partial calendar month, at the address given for Landlord in Section 18.3, as such
address may be changed in accordance with Section 18.3. Notwithstanding
anything in this Lease to the contrary, the obligation for payment of Construction
Rent ceases upon the Tenant's commencement of the payment of Base Rent.
Base Rent. Tenant shall pay to Landlord, in United States Dollars, beginning on
the Base Rent Start Date, Base Rent in the annual amount of $329,702 payable
monthly in the amount of $27,475.17. The "Base Rent Start Date" shall be the
earlier of (i) the date Tenant is issued a final Ce1iificate of Occupancy or
equivalent approval from the applicable governmental agency which permits
Tenant to occupy the Improvements or any portion thereof; or (ii) the date which is
eighteen (18) months following the Commencement Date. Base Rent shall be
payable in monthly installments, in advance on the first day of each calendar
month, with appropriate proration for any partial calendar month or Lease Year, at
the address given for Landlord in Section 18.3, as such address may be changed in
accordance with Section 18.3. Base Rent shall be adjusted as provided in Section
5.3 below. Landlord shall apply the Deposit (described in Section 5.6), including
accrued interest thereon, first to the payment of Construction Rent, and the excess,
if any, to the payment of Base Rent.
Base Rent Adjustments.
5.3.1 Base Rent Fixed Adjustments (Initial Term). On the fifth (5 th ) anniversary
of the Commencement Date, and every five (5) years thereafter during the
Initial Term (each such date being an "Initial Term Base Rent
Adjustment Date"), the Base Rent then in effect shall be increased by ten
percent (10%).
5.3.2 Base Rent/First CPI Index Adjustment -First Extension Term. In the
event Tenant exercises the Extension Option to extend the Term for the
First Extension Term, then effective as of the first day of the First
Extension Term (the "First CPI Adjustment Date"), the Base Rent shall
be adjusted as follows:
5.3.2.1 Base Rent (the initial Base Rent in the amount of $329,702) shall
be increased by an amount equal to the percentage increase in the
CPI Index (as defined below) which has occu1Ted from the
Commencement Date to the last day of the Initial Term.
Notwithstanding the foregoing, in no event shall the Base Rent
beginning on the first day of the First Extension Term be less
than the Base Rent in effect for the last year of the Initial Term,
and no event shall the increase in the Base Rent be greater than
thirty (30) % of the Base Rent in effect for the last year of the
Initial Term. When the new Base Rent is determined, Landlord
shall give Tenant written notice to that effect showing how the
new Base Rent was computed. If the new Base Rent cannot be
determined by the First CPI Adjustment Date, Tenant shall
continue paying the then cu1Tent Base Rent until such time as the
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new Base Rent is determined. When the new Base Rent is
determined, Landlord shall give Tenant written notice to that
effect showing how the new Base Rent was computed and Tenant
shall pay the new Base Rent retroactive to the First CPI
Adjustment Date.
5.3.2.2 By way of example of the adjustment to be made under Section
5.3.2.1 above, assuming (i) the CPI Index has increased 45%
from the Commencement Date thiu the last day of the of the
Initial Term, and (ii) the Base Rent for the last year of the Initial
Term was $438,833 (i.e.,· the initial Base Rent as adjusted 10%
every 5 years as provided in Section 5 .3 .1 above) then the Base
Rent payable on the first day of the First Extension Term would
be increased to $478,068 annually ($329,702 x 45% = $148,366;
$329,702 + $148,366 = $478,068). Based on the same
assumptions, except that (x) the CPI Index only increased 30%
from the Commencement Date thru the last day of the of the
Initial Term, and (y) the Base Rent for the last year of the Initial
Term was $438,833 (i.e., the Base Rent as adjusted 10% every 5
years as provided in Section 5.3.1 above), the Base Rent
commencing the first day of the First Extension Term shall
remain at $438,833. [$329,702 x 30% = $98,911; $329,702 +
$98,911 = $428,613.] Since $428,613 is less than the Base Rent
in effect for the last year of the Initial Term ($438,833), there
would be no downward adjustment. For further purposes of
illustration, based on the same assumptions, except that (x) the
CPI Index increased 75% from the Commencement Date thru the
last day of the of the Initial Term, and (y) the Base Rent for the
last year of the Initial Term was $438,833 (i.e., the Base Rent as
adjusted 10% every 5 years as provided in Section 5.3.1 above),
the Base Rent commencing the fust day of the First Extension
Term would be $570,483. [$438,833 x 1.3 = $570,483; $329,702
x 1.75 = $576,979]. Since the 75% increase in the CPI as applied
to the initial Base Rent ($329,702) would result in an increase in
the Base Rent in effect for the last year of the Initial Term by
more than 30%, the adjustment to Base Rent would be capped at
30%.
5.3.3 Base Rent Fixed Adjustments During First Extension Term. In the event
Tenant exercises the Extension Option to extend the Term for the First
Extension Term, then at the commencement of the 26 th Lease Year, 31st
Lease Year, and 36 th Lease Year, the Base Rent then in effect shall be
increased by ten percent (10%) .
5.3.4 Base Rent/Second CPI Index Adjustment-Second Extension Term. In
the event Tenant exercises the Extension Option to extend the Term for
the Second Extension Term, then effective as of the first day of the Second
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5.3.5
5.3.6
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Extension Term (the "Second CPI Adjustment Date"), the Base Rent
shall be further adjusted as follows:
5.3.4.1 The Base Rent (the initial Base Rent in the amount of $329,702)
shall be increased by an amount equal to the percentage increase
in the CPI Index (as defined below) which has occU1Ted from the
Commencement Date to the last day of the First Extension Term
(Lease Year 40). Notwithstanding the foregoing, in no event
shall the Base Rent beginning on the first day of the Second
Extension Term be less than the Base Rent in effect for the last
day of the First Extension Term, and no event shall the increase
in be greater than thirty (30) % of the Base Rent in effect for the
last year of the First Extension Term. When the new Base Rent
is determined, Landlord shall give Tenant written notice to that
effect showing how the new Base Rent was computed. If the
new Base Rent cannot be determined by the Second CPI
Adjustment Date, Tenant shall continue paying the then CU1Tent
Base Rent until such time as the Base Rent is determined. When
the new Base Rent is determined Landlord shall give Tenant
written notice to that effect showing how the new Base Rent was
computed and Tenant shall pay the new Base Rent retroactive to
the Second CPI Adjustment Date.
Base Rent Fixed Adjustments During Second and Third Extension Term.
In the event Tenant exercises the Extension Option to extend the Term for
the Second Extension Term and Third Extension Option, Commencing
with the first day of the 46th Lease Year, and every five (5) years
thereafter during the remaining Term of the Lease, the Base Rent then in
effect shall be increased by ten percent (10%).
CPI Index. As used herein, the "CPI Index" shall mean the Consumer
Price Index for all Urban Consumers, Denver, Boulder, Metro Area -All
Items Index (CPI-U, 1982-84 = 100), published by the United States
Department of Labor, Bureau of Labor Statistics. If the CPI Index is
published with numbers issued other than on a monthly basis, the CPI
Index used for purposes of making the adjustments to Rent shall be the
CPI Index number published for the date closest to the Commencement
Date or the applicable adjustment date . If the CPI Index is discontinued,
the CPI Index adjustment shall be made using comparable statistics on the
cost of living for the Denver, Boulder metropolitan area as computed and
published by any agency of the United States Government or by a
responsible financial periodical or recognized authority selected in the
reasonable discretion of Landlord .
5.4 Net Lease. This Lease is a net lease. Except as may be expressly provided
otherwise in this Lease, all costs incurred in connection with the construction,
operation, maintenance and leasing of the Improvements and all Real Estate Taxes
and other costs incurred in connection with and in relation to the Premises shall be
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paid by Tenant. Landlord shall have no obligation to make any repairs,
replacements or renewals of any kind, nature or description whatsoever to the
Improvements or the Premises.
5.5 Security Deposit; Pre-Development Rent. Pursuant to the terms of that ce1tain
Letter of Intent ("Letter of Intent") entered into between and Landlord and
Tenant dated February 15, 2013 and mutually executed on February 28, 2013 (as
amended), Tenant has deposited the amount of Two Hundred Thousand Dollars
($200,000.00) as a security deposit ("Deposit") into an interest bearing account
with Fidelity National Title Company, as Escrow Agent ("Escrow Agent"). The
Letter of Intent provides in pertinent pait that the Escrow Agent will disburse the
amount of $10,000 per month from the Deposit to Landlord (the "Pre-Develop-
ment Rent") on the terms and conditions set forth in the Letter of Intent. At the
time of Tenant's payment of the first monthly installment of Construction Rent, all
Pre-Development Rent received by Landlord as of that date shall be applied to the
payment of the Construction Rent and/or Base Rent as it becomes due.
Notwithstanding anything in this Lease to the contrary, in the event of a conflict
between the terms and conditions of this Lease and the terms and conditions of the
Letter of Intent, the terms and conditions of this Lease shall control.
5.6 Base Rent Credit/Brokerage Fees. The Letter oflntent provides in pertinent part
that Landlord shall provide Tenant with a credit against the payment of Base Rent
("Base Rent Credit") in an amount equal to one half (1/2) of the commission paid
to the Broker but Landlord's share of the commission shall in no event exceed
1.75% of the Base Rent for the first 20 years of this Lease. Accordingly, the Base
Rent Credit shall not exceed $133,888.00. The amount of the Base Rent Credit
shall be divided by 60 and applied in equal installments against the first 60 months
of Base Rent payable during the Initial Term.
6 Taxes
6.1 Real Estate Taxes. Commencing on the Commencement Date and continuing
during the Term of this Lease, Tenant shall assume, pay, bear, and discharge any
and all Real Estate Taxes with respect to the Premises, or any part thereof, and all
other taxes in any manner applicable to or assessed against the Premises or
Buildings or any part thereof, or against any of the machinery, fixtures, equipment,
or other prope1ty or items. Tenant shall pay all Real Estate Taxes directly to the
taxing authorities and Tenant shall be credited all reimbursements on account of
abatements, refunds, or rebates of Real Estate Taxes during the Term. Landlord
hereby authorizes Tenant to file and pursue any protest of the valuation of the
Premises and abatement petitions for abatement of taxes for any reason, as Tenant
may deem to be appropriate. Landlord agrees to reasonably cooperate and execute
any form of agreement as may be necessary in connection therewith .
6 .2 Separate Tax Parcels. In the event the Premises are now included in a larger tax
parcel owned by Landlord, Landlord, at Landlord's sole cost and expense, shall
take such actions as may be necessary to make the Premises a separate Tax Parcel
or Tax Parcels. Tenant shall cooperate with Landlord in such action.
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6.3 Special Assessments. In the event there is a special assessment which is included
within the definition of Real Estate Taxes herein, and such assessment may be
paid in periodic installments, Tenant shall pay such in such periodic installments
or at Tenant's sole option, may prepay or elect to retire the principal indebtedness
on any special assessment and Tenant shall be responsible only for those
installments relating to the period included within the Term, based upon the
maximum number of installments in which the same may be paid. In the event of
any proposed special assessment which would provide for payments extending
beyond the Initial Term, unless Tenant agrees to pay for all of such assessment,
Landlord shall have the right to participate in the process of approving or rejecting
such assessment.
6.4 Invoices. Landlord shall cooperate with Tenant so that all invoices for Real Estate
Taxes shall be sent directly by the taxing authority to Tenant. Landlord agrees to
submit to Tenant any invoices for Real Estate Taxes and notices of special
assessments with respect to the Premises which are sent to Landlord within thirty
(30) days after receipt by Landlord. Landlord shall furnish Tenant with copies of
all Notices of Valuation of the Premises which are sent to Landlord within ten (10)
days after receipt thereof and in sufficient time to allow Tenant to determine
whether or not to contest any increase in Real Estate Taxes or valuation. If Tenant
desires to contest such increase, Tenant shall protest such valuation or file an
abatement petition within applicable statutory time periods. Landlord shall fully
cooperate with Tenant in any such proceeding.
6.5 Proration of Taxes. If the Term shall expire on any date other than December 31st
of any year, the amount payable by Tenant during the calendar year in which such
termination occurs shall be prorated on the basis which the number of days from
the commencement of said tax fiscal year to and including said termination date
bears to 365. A similar proration shall be made for the tax fiscal year in which the
Term commences.
6.6 Personal Property Taxes. Tenant shall pay all taxes charged against trade fixtures,
furnishings, equipment or any other personal property belonging to Tenant
( collectively "Personal Property Taxes"). Tenant may contest any such Personal
Property Taxes, assessments or valuations; provided, however, Tenant shall do so
within the time period permitted by applicable statutes.
6. 7 Taxes Payable in Installments. Should any Real Estate Taxes or Personal Property
Taxes (sometimes collectively referred to as "Taxes") be levied on or assessed
against the Premises and/or Improvements that may be either paid in full prior to a
delinquency date within the Term or paid in installments over a period either
within or extending beyond the Term, Tenant may elect to pay such Taxes in
installments. Should Tenant elect to pay any such Taxes in installments, Tenant
shall be liable to pay only those installments becoming due during the Term .
Landlord shall cooperate with Tenant and on written request of Tenant execute or
join with Tenant in executing any instruments required to permit any such Taxes
to be paid in installments.
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7 Utilities/Maintenance and Repair Obligations
7.1 Utilities. Tenant shall assume, bear, pay, and discharge as its sole and separate
obligation all of the applicable charges for all utilities consumed on the Premises.
Except in the event of an emergency, neither Landlord nor Tenant shall take any
action which shall interrupt or interfere with any utility service, including electric,
gas, water, sewage, telephone or data communication service to the Premises or to
the adjoining property owned by Landlord. The obligation of Tenant to pay for
utility service to the Premises shall begin on the Commencement Date.
7.2 Repair and Maintenance Obligations. Tenant shall be solely responsible for the
maintenance of the Real Property and the Improvements during the Term, at
Tenant's sole cost and expense. Landlord shall not be obligated to maintain or to
make any repairs, replacements, or renewals of any kind, nature or description
whatsoever to the Real Property or Improvements thereon.
7.3 Alterations and Improvements. Tenant shall have the right to alter the Real
Property and the Improvements, as Tenant from time to time determines to be
appropriate (e.g., through the construction of buildings, structures and other
facilities, including, but not limited to, any and all utility lines, pipes, connections,
fixtures, machinery, equipment, signs, furniture, furnishings, appointments and
other personal property that Tenant determines to be reasonably necessary or
appropriate in connection with Tenant's ownership and operation of the Premises
and Improvements). All alterations, additions and improvements made or
constructed by Tenant shall be made or constructed in a good and workmanlike
manner, in full compliance with all laws and ordinances applicable thereto.
Except as otherwise provided in this Lease, all such additions, alterations, changes
and improvements shall be and remain the property of Tenant.
8 Use, Assignment and Subletting
8.1 Permitted Use. Tenant may use and occupy the Premises during the Term of the
Lease for any lawful use in accordance with the requirements of this Lease,
including, without limitation, the development of the Premises for mixed use/
multifamily residential development purposes (the "Permitted Use").
8.2 Assignment and Subletting.
8.2.1 Assignment Prior to Completion of the Improvements. Prior to the
completion of the Improvements, Tenant shall assign this Lease only with
the prior written approval of Landlord, in Landlord's sole discretion;
provided, however, no such approval shall be required if the assignment is
to an entity controlled by Tenant, provided, further, in any event Tenant
shall also remain liable for payment and performance required by Tenant
under this Lease. For purposes of this Section 8.2.1, "an entity controlled
by Tenant" shall mean entity in which management control is vested,
directly or indirectly by Tenant, an affiliate of Tenant or the principals of
Tenant (including, without limitation any entity formed by Tenant, the
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principals of Tenant or their affiliates with institutional and/or private
capital partners for the purpose of the development, construction,
ownership and operation of the Improvements to be constructed on the
Premises.
8.2.2 Assignment Following Completion of the Improvements Except as
otherwise specifically in this Lease, following completion of the
Improvements, as evidenced by a final Certificate of Occupancy for all of
the Improvements, Tenant may assign this Lease only with the prior
written approval of Landlord, which approval shall not be unreasonably
withheld, conditioned or delayed; provided, however, Landlord's approval
shall not be required if the assignment is to an entity in which
management control is vested, directly or indirectly by Tenant, an affiliate
of Tenant or the principals of Tenant (including, without limitation any
entity formed by Tenant, the principals of Tenant or their affiliates with
institutional and/or private capital partners for the purpose of the
development, construction, ownership and operation of the Improvements
to be constructed on the Premises.
8.2.3 Tenant's Right to Sublease. Tenant may permit the use of all or any
portion of the Premises by any person other than Tenant, or sublet all or
any portion of the Premises without the consent or approval of Landlord.
Landlord shall accept performance by any subtenant or occupancy tenant
of any of the terms and provisions of this Lease required to be performed
by Tenant with the same force and effect as though performed by Tenant.
Without limitation of the foregoing, Tenant may sublease individual
multifamily residential units and retail/commercial premises in the
ordinary course of Tenant's business without Landlord's consent. In no
event shall any sublease extend beyond the Term. Except for subleases to
individual multifamily residential units in the ordinary course of Tenant's
business, and sublease to retaiVcommercial tenants in the ordinary course
of Tenant's business, Tenant shall deliver to Landlord a copy of all other
subleases. Except as provided in Section 19 of this Lease, Tenant shall
not pledge, hypothecate or encumber this Lease, or any interest therein.
8.2.4 Transfer Notice. If Tenant desires at any time to enter into an assignment,
transfer, pledge, hypothecation, encumbrance or occupation of, or the use
of the Premises (collectively "Transfer") which requires Landlord's
consent, Tenant shall provide Landlord with written notice ("Transfer
Notice") at least thirty (30) days prior to the proposed effective date of the
Transfer. The Transfer Notice shall include (i) the name of the proposed
transferee, (ii) the nature of the proposed Transfer; (iii) the proposed
effective date of the Transfer; and (iv) a statement of the proposed
transferee's qualifications and experience in the ownership, operation and
management of developments of a size, type and quality similar to the
project to be constructed on the Premises by Tenant, and (v) reasonable
evidence that the proposed transferee has the capacity to fulfill the
financial obligations of the Tenant under this Lease (all of which
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information Landlord can consider in determining whether or not to
consent to the transfer). At any time within twenty (20) days after
Landlord's receipt of the information specified above, Landlord may, by
written notice to Tenant, elect to either consent to the Transfer, or
reasonably disapprove the Transfer, setting fo1ih in writing Landlord's
specific grounds for doing so. If Landlord fails to respond to Tenant's
request for consent to such Transfer by the expiration of such twenty (20)
day period, then the proposed Transfer shall be deemed approved.
8.2.5 Assumption of Lease Obligations. Any assignment of this Lease shall be
effective only upon delivery to Landlord of an instrument effecting an
assignment of this Lease by Tenant, executed by Tenant and the assignee.
Each assignee shall agree to assume, be bound by, and perform all terms,
covenants, and conditions of this Lease to be kept and performed by
Tenant and which arise after the effective date of the assignment. After
execution of the assignment or sublease, Tenant will forward a completed
copy thereof to Landlord. Upon the delivery to Landlord of such written
agreement, the assignor of this Lease shall be relieved of all obligations
under this Lease following the effective date of the Transfer; provided
however, Tenant shall not be released from any obligations which have
accrued and/or remain unsatisfied prior to the effective date of such
Transfer.
8.3 Tenant's Right to Mortgage Leasehold. Notwithstanding anything in this Lease to
the contrary Tenant may assign and encumber this Lease without Landlord's prior
written consent in accordance with Article 19.
9 Mechanics Liens
9.1 Liens. Tenant shall promptly pay when due the entire cost of all work done to the
Premises by or at the request of Tenant (including but not limited to work done
prior to the Effective Date) and Tenant shall keep the Premises free ofliens for
labor or materials. Should mechanics', materialmen's, or other liens be filed
against the Premises, Tenant shall cause the lien to be canceled and discharged of
record, or shall file a bond in substitution of the mechanic's lien in accordance
with the provisions of Colorado Revised Statute 3 8-22-131, et. seq ., within forty-
five (45) days of Tenant's receipt of notice of such lien. Notwithstanding the
foregoing, Tenant may contest, in good faith and with reasonable diligence, the
validity of any such lien or claimed lien, provided that Tenant shall give to
Landlord such security as Landlord may reasonably request ensure the payment of
any amounts claimed. If the Tenant contests a lien or claimed lien, then on final
determination of the lien or claimed lien, the Tenant shall cause the lien to be
released and, in the event of an adverse judgment, satisfy such judgment.
9.2 Protection of Landlord's Interest in Premises. Nothing in this Lease shall be
construed as giving Tenant or any other person any right, power or authority to act
as agent of or to contract for, or permit the rendering of, any services or the
furnishing of any materials in such manner as would give rise to the filing of any
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mechanics' liens or other claims against the fee of the Premises or the
Improvements thereon. Landlord shall have the right at all reasonable times to
post, and keep posted, on the Premises ( at locations approved by T errant) any
notices which Landlord may deem necessary for the protection of Landlord and its
interest in the Premises and the improvements thereon from mechanics' liens or
other claims.
10 Indemnity and Insurance
10.1 Indemnification of Landlord. From and after the Effective Date and continuing at
all times thereafter during the Term hereof:
10.1.1 Tenant assumes all risk ofloss, damage, or destruction to the Premises,
Improvements, Buildings and contents, or to any other property brought
upon the Premises, Improvements, and Building by Tenant, or by any
other person, with or without the consent or knowledge of Tenant. Tenant
hereby indemnifies and agrees to protect and defend Landlord from all
such loss, damage, or destruction including claims and causes of action
asserted against Landlord.
10.1.2 To the fullest extent permitted by law, Tenant shall indemnify and save
harmless Landlord from any and all claims, losses, damages, or expenses,
on account of injuries to or death of any and all persons whomsoever
while on the Premises, and any and all loss or destruction of or damage to
the Premises, the Improvements, the Building and any contents and
personal property located upon the Premises and owned by, rented to, or in
the care, custody, or control of the parties hereto, or any of Tenant's
subtenap.ts, arising or growing out of, or in any manner connected with:
(i) any use and occupancy of the Premises by Tenant or any subtenants for
a permitted use or otherwise; (ii) caused or occasioned, in whole or in part,
by reason of or arising during the presence upon the Premises of the
person or the property of the Tenant, its officers, employees, agents,
subtenants, renters, customers, invitees, licensees, servants, contractors,
subcontractors, materialmen, suppliers, workmen, laborers, and the
employees and agents of each of the foregoing, or any and all other
persons, invited or otherwise, with or without Tenant's consent, while on
the Premises; (iii) arising out of or resulting from Tenant's development,
sale or marketing of the Premises and/or the Improvements; and (iv) any
plans or designs for the Improvements prepared by or on behalf of Tenant.
10.1.3 The foregoing indemnification obligations of Tenant shall not apply to any
injuries , death, claims, losses, damages and expenses to the extent arising
as a result of any negligence, willful misconduct or intentional acts of
Landlord or its officers, employees, contractors or agents .
10.2 Indemnification of Tenant. Landlord hereby agrees to indemnify and save
harmless Tenant, to the fullest extent permitted by law, from any and all claims,
losses, damages, or expenses, on account of injuries to or death of any and all
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persons whomsoever while on the Premises, and any and all loss or destruction of
or damage to the Premises, the Improvements and any contents and personal
property located upon the Premises and owned by, rented to, or in the care,
custody, or control of Tenant, or any of Tenant's officers, employees, contractors,
subcontractors, agents or subtenants, arising from the negligence or willful
misconduct or intentional acts of Landlord, its officers, employees, contractors or
agents.
I 0.3 Defense Obligations. Landlord and Tenant further agree, that if it is the
indemnifying party, that it will appear and defend at its own expense, in the name
and on behalf of the indemnified party, all claims or suits for injuries to or death of
persons or loss or destruction of or damage to property arising or growing out of
or in any manner connected with or caused or occasioned by or in connection with
its indemnities set forth in this Article 10.
10.4 Insurance.
10.4.1 Property Insurance. During the period of construction of the
Improvements on the Premises, Tenant shall keep or require its general
contractor to keep, a policy of builders risk insurance covering loss or
damage to the Improvements for the full replacement cost of all such
construction, naming Tenant's Leasehold Mortgagee, if any, as a loss
payee. During the Term (including any Extension Term), Tenant shall
keep in full force and effect a policy of "all risk", special form or
equivalent form property insurance covering loss or damage to the
Premises in the amount of the full replacement cost of the Buildings and
other Improvements on the Real Property, with a commercially reasonable
deductible , naming Tenant's Leasehold Mortgagee, if any, as a loss payee.
10.4.2 Liability Insurance. During the Term, Tenant shall keep in full force
commercial general liability insurance policy ("CGL Policy"), with
bodily injury and property damage coverage with respect to the Premises
and business operated by Tenant on the Premises. The limits of such CGL
Policy shall be not less than $2,000,000.00 combined single limit for
bodily injury and property damage, with a commercially reasonable
deductible. Following at least sixty (60) days prior written notice from
Landlord, the CGL Policy combined single limit for bodily injury and
property damage requirement may be increased by Landlord, but not more
than once in any five (5) year period, to a commercially prudent and
reasonable amount, based upon the then current general liability insurance
conditions prevailing in the metropolitan Denver market; provided
however, in no event shall the insurance limits be increased beyond those
amounts typically carried by owners of similar multifamily residential
developments in Denver, Colorado. Nothing herein shall preclude Tenant
from providing the initial $2,000,000 in coverage required pursuant to this
Section 10.4.2 by way of primary coverage and any additional coverage
which may be required by way of "following form" umbrella coverage.
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10.4.3 Workers' Compensation Insurance. To the extent required by law, Tenant
shall maintain workers' compensation insurance covering its employees in
statutory limits, naming Tenant's Leasehold Mortgagee, if any, as a loss
payee.
10.4.4 Automobile Liability. Tenant shall maintain at all times during the Term
garage liability insurance covering liability arising out of the use of (i) all
Tenant owned vehicles, (ii) all vehicles hired or leased by Tenant and (iii)
all non-owned and borrowed vehicles.
10.4.5 Form of Policies. All insurance required by this Section shall be with
insurers licensed or otherwise permitted to conduct business in the State of
Colorado. Any insurance hereunder may be provided under blanket
policies of insurance. The property and liability insurance maintained by
Tenant pursuant to Sections 10.4.1 and 10.4.2 shall name Tenant as
insured and Landlord as additional insured, and at Landlord's written
request, any Fee Mortgagee, as additional insured, as their interests may
appear.
10.4.6 General Insurance Requirements. All policies of insurance ( other than
self-insurance) enumerated above shall be provided by insurance carriers
having at policy commencement a General Policyholder's Rating of not
less than A-and a financial rating of VII or better, in the most current
issue of Bests Key Rating Guide; provided, however, that if the rating of
any such insurer falls below such level, such rating reduction shall not
constitute a default hereunder provided all renewals of such policies shall
be with carriers with a Best rating of not less than A-VII at the time of
such renewal. An increased coverage or "umbrella" policy may be
provided and utilized by either party to increase the coverage provided by
individual or blanket policies in lower amounts, and the aggregate
coverage provided by all such policies with respect to the Premises and
Tenant's liability hereunder shall be satisfactory provided that such
policies otherwise comply with the provisions of this Article 10.
10.4.7 Mutual Waiver of Right of Recovery and Subrogation. With respect to
any loss covered by insurance or required to be covered by property
insurance hereunder, Landlord and Tenant hereby waive any and all rights
of recovery against each other for any loss or damage to the Premises or
the contents contained therein, or for loss of income on account of fire or
other casualty; and each party's aforesaid policies of insurance shall, to the
extent available, contain appropriate provisions recognizing this mutual
release and waiving all rights of subrogation by the respective insurance
earners .
10.4.8 Evidence of Insurance. On or before the Commencement Date, Tenant
shall cause to be issued to Landlord certificates of insurance evidencing
compliance with the applicable covenants of this Article 10. Tenant shall
use commercially reasonable efforts to obtain from the insurer a certificate
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which provides that the certificate holder will be given at least thirty (30)
days' notice prior to cancellation; provided, however, if Tenant is unable
to obtain such provision, then Tenant agrees to provide to Landlord at
least thirty (30) days' notice of any anticipated cancellation of an existing
insurance policy.
10.4.9 Self Insurance. Tenant shall have the right to self-insure in lieu of
providing the insurance required under this Article provided it complies
with all of the following:
10.4.9.l Tenant shall have delivered to Landlord a certification from an
independent public accountant reasonably satisfactory to
Landlord that as of the end of Tenant's most recently ended fiscal
year, Tenant had a net worth of at least $100,000,000.00
computed in accordance with Generally Accepted Accounting
Principles, consistently applied,
10.4.9.2 Tenant has delivered to Landlord an Agreement reasonably
satisfactory to Landlord agreeing to indemnify and hold Landlord
harmless from and against any loss and liability to the extent such
loss and liability would have been covered under the policies of
insurance required under other provisions of this Article, and
10.4.9.3 Within 90 days after the end of each fiscal year, Tenant has
delivered to Landlord a certification from an independent public
accountant reasonably satisfactory to Landlord that as of the end
of the fiscal year just ended, Tenant had a net worth of at least
$100,000,000.00 computed in accordance with Generally
Accepted Accounting Principles, consistently applied, and if
Tenant fails to deliver such certification within the time required,
Tenant will immediately obtain the insurance required by, and
comply with, the other provisions of this Article 10.
11 Damage or Destruction
11.1 Damage of Improvements. If the Premises or any of the Improvements are
damaged or destroyed during the Initial Term or any Extension Term by fire,
flood, act of God, act of terrorism or other casualty ("Casualty"), then except as
specifically provided below, this Lease shall continue in effect, and Tenant shall
continue to pay the Rent without abatement. Notwithstanding the foregoing,
Tenant shall not have any obligation to repair and/or rebuild the Improvements
damaged by any Casualty. No later than one hundred twenty (120) days after any
Casualty, Tenant shall deliver written notice ("Casualty Notice") to Landlord
stating whether Tenant (subject to the rights of any Leasehold Mortgagee,
including the rights of any Leasehold Mortgagee to participate in the adjustment of
any losses of insurance proceeds related to the Casualty) has elected to either (i)
repair and/or rebuild the Improvements; or (ii) not to repair and/or rebuild the
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Improvements. If Tenant elects to repair and/or rebuild the Improvements then the
Casualty Notice shall include Tenant's commercially reasonable judgment as to:
(x) the period of time within which such damage or destruction can be completely
repaired; (y) the estimated cost to repair such damage or destruction (the "Repair
Cost"); and (z) the estimated proceeds from insurance that Tenant reasonably
anticipates to receive. Alternatively, if Tenant elects not to repair and/or rebuild
the Improvements, Tenant shall advise the Landlord in the Casualty Notice and
within a reasonable period of time, at Tenant's sole cost and expense (a) provide a
sightly barrier, (b) remove all debris from the damaged portion of the
Improvements, ( c) remove and dispose of all Hazardous Substances in accordance
with applicable legal requirements, and ( d) take such other actions as may be
required under applicable municipal, ordinances, county codes, mies and
regulations and other laws, rules and regulations with respect to any damage or
destruction of the Improvements. In the event Tenant elects not to repair or
rebuild those Improvements damaged by the Casualty and no remaining portion of
the Improvements are functional, Tenant shall, at its sole cost and expense, at
Landlord's written request and within a reasonable period of time, also ( e)
demolish and remove all remaining Improvements on the Premises, (f) remove
foundations and footings, and (g) restore the Premises to substantially the
condition that existed on the Commencement Date, including filling and grading
the Premises in a safe and slightly manner as existed on the Commencement Date,
or seed such portion of the Premises as designated by Landlord.
Repair and Restoration. In the event Tenant elects to repair and/or rebuild the
Improvements, prior to commencing work, Tenant shall provide evidence
reasonably satisfactory to Landlord that Tenant has sufficient funds to complete
the work or that Tenant has, or that sufficient insurance proceeds are or will be
made available to complete the work, and Tenant shall promptly commence and
diligently complete all such work. All repair and/or restoration work shall be
performed in a good and workmanlike manner and shall be subject to all
provisions of this Lease applicable to construction of the Improvements.
11.3 Damage or Destruction During Last Two Years of Tenn. If the Casualty occurs
during the last two (2) years of the Initial Term or any Extension Term, Tenant
may (provided that it has first obtained the written consent of any Leasehold
Mortgagee) elect to terminate this Lease by stating such intent in the Casualty
Notice. In the event of any such termination, Tenant shall within a reasonable
period of time after such notice (a) provide a sightly barrier, (b) demolish and
remove all Improvements on the Premises, ( c) clear debris, ( d) remove
foundations and footings, ( e) remove and dispose of all Hazardous Substances in
accordance with applicable legal requirements, (f) take such other actions as may
be required under applicable municipal, ordinances, county codes, rules and
regulations and other laws, rules and regulations with respect to any damage or
destruction of the Improvements, and (g) restore the Premises to substantially the
condition that existed on the Commencement Date, including filling and grading
the Premises in a safe and slightly manner as existed on the Commencement Date,
or seed such portion of the Premises as designated by Landlord.
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11.4 Application of Insurance Proceeds. In the event a Casualty occurs prior to the last
two (2) years of the Initial Term or any Extension Term, or if during the last two
(2) years of the Initial Term or any Extension Term and Tenant elects to repair
and/or rebuild the Improvements damaged by fire or other casualty or cause, all
insurance proceeds shall be retained by Tenant subject to the rights of any
Leasehold Mortgagee. In the event a Casualty occurs during the last two (2) years
of the Initial Term or any Extension Term and Tenant elects to not repair and/or
rebuild the Improvements damaged by fire or other casualty or cause, subject to
the rights of any Leasehold Mortgagee, the insurance proceeds shall frrst be
applied to any Leasehold Mortgage and any excess proceeds shall be used first to
pay the present value of any Rent remaining until the end of the current term of the
Lease, next to the cost of the work required to be performed by Tenant under
Section 11.3, and to the extent there are any remaining proceeds, such proceeds
shall be retained by and belong to the Landlord.
12 Eminent Domain
12.1 Definition of Taking and Substantial Taking. For the purpose of this Lease, a
"Taking" shall mean any condemnation or exercise of the power of eminent
domain by any authority vested with such power or any other taking for public
use, including a private purchase in lieu of condemnation by an authority vested
with the power of eminent domain; the "Date of Taking" shall mean the earlier of
(i) the date upon which title to the Premises or any portion thereof or any right
appurtenant thereto so taken is vested in the condemning authority; or (ii) the date
upon which possession of the Premises or any portion thereof is taken by the
condemning authority; and "Substantially All of the Premises" shall mean means
the Taking of so much of the Premises or Improvements or both that one or more
of the following conditions results: (i) the remainder of the Premises would not be
economically and feasibly usable by Tenant as reasonably determined by Tenant;
and/or (ii) a reasonable amount of reconstruction would not make the Premises
and Improvements a practical improvement and reasonably suited for the uses and
purposes for which the Premises were being used prior to the Condemnation;
and/or (iii) the conduct of Tenant's business on the Premises would be materially
and substantially prevented or impaired reasonably determined by Tenant.
12.2 Tenant's Rights Upon Taking or Substantial Taking. Each party agrees to furnish
the other a copy of any notice of a threatened or proposed Taking received by such
party. In the event of a Taking of Substantially All of the Premises, this Le~se
shall terminate and both Landlord and Tenant shall be relieved from all further
obligations hereunder from and after the Date of Taking. All Base Rent and other
sums payable by Tenant hereunder shall be apportioned and paid through and
including the Date of Taking, and neither Landlord nor Tenant shall have any
rights in any compensation or damages payable to the other in connection with
such Taking .
12.3 Tenant's Rights Upon Less Than Substantial Taking. In the event of a Taking of
less than Substantially All of the Premises, Base Rent and other charges shall be
reduced fairly and equitably in accordance with the portion condemned or taken,
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effective as of the Date of Taking. Tenant shall make all necessary restorations to
the Improvements so that the p01iions of the Improvements not taken constitute a
complete architectural unit. Subject to the rights of any Leasehold Mo1igagee, the
proceeds of the award attributable to the value of the Improvements taken shall be
retained by Tenant.
12.4 Rights Upon Temporruy Taking. Notwithstanding the foregoing, in the event of a
Taking of the Premises or any portion thereof, for temporary use (specifically one
not exceeding one hundred eighty (180) days in duration), without the Taking of
the fee simple title thereto, this Lease shall remain in full force and effect, and
there shall be no abatement of Rent during such period. Subject to the rights of
any Leasehold Mortgagee, all awards, damages, compensation and proceeds
payable by the condemnor by reason of such Taking relating to the Premises for
periods prior to the expiration of the Lease shall be payable to Tenant. All such
awards, damages, compensation and proceeds for periods after the expiration of
the Lease shall be payable to Landlord. Anything contained in this Section 12.4 to
the contrary notwithstanding, a temporary Taking for any period in excess of one
hundred eighty (180) days may, at Tenant's option, be deemed a permanent Taking
and shall be governed by Sections 12.2 or 12.3 above, as applicable.
12.5 Award. The award paid by the condemning authority (other than a Taking for
temporary use) shall be allocated on a pro rata basis between the fair market value
of the Premises and the Improvements as determined by the condemning authority
or a court of competent jurisdiction.
12.6 Separate Representation. Landlord and Tenant shall each have the right to
represent their respective interests in each proceeding or negotiation with respect
to a Taking or intended Taking and to make full proof of their claims. Subject to
the consent and rights of any Leasehold Mortgagee to participate in any
proceeding or negotiations, Tenant shall have the sole right to control the defense,
prosecution and settlement of its claim to the extent the proceeding or negotiation
affects Tenant's leasehold interest hereunder and/or the Improvements., Landlord
shall have the sole right to control the defense, prosecution and settlement of its
claim to the extent the proceeding or negotiation affects Landlord's reversionary
interest in the Premises and/or Improvements. Landlord and Tenant each agrees to
execute and deliver to the other any instruments that may be reasonably required
to effectuate or facilitate the provisions of this Lease relating to any Taking.
13 Default
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13.1 Events of Tenant's Default. Any of the following occurrences, conditions or acts
by Tenant shall constitute an "Event of Default" by Tenant under this Lease:
13.1.1 Failure to Pay Rent: Breach. (i) Tenant's failure to make any payment of
money required by this Lease (including without limitation Base Rent or
Real Estate Taxes) (subject to Tenant's right of good faith contest with
respect to Real Estate Taxes, as set forth in and as limited by Article 5),
within ten (10) days after the receipt of written notice from Landlord to
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Tenant that same is overdue ("Monetary Default"), in which event such
delinquent amount shall accrue interest at the Default Rate; or (ii) Tenant's
failure to observe or perform any other material provision of this Lease
within thirty (30) days after receipt of written notice from Landlord to
Tenant specifying such default and demanding that the same be cured
("Non-Monetary Default"); provided that, if such default cannot with
due diligence be wholly cured within such thirty (30) day period, Tenant
shall have such longer period as is reasonably necessary to cure the
default, so long as Tenant proceeds promptly to commence the cure of
same within such thirty (30) day period and diligently prosecutes the cure
to completion. In the event Landlord is required under this Section 13 .1.1 to
give a notice of a monetary default during any twelve (12) month period,
there shall be no charge for the first (1 s~ such notice, thereafter there shall be
a charge of $2500 each for all other such notices given during a twelve (12)
month period to compensate the Landlord for the extra expense incurred as a
result of such late payment.
13 .1.2 Bankruptcy. Any petition is filed by or against Tenant under any section
or chapter of the Federal Bankruptcy Code, and, in the case of a petition
filed against Tenant, such petition is not dismissed within sixty (60) days
after the date of such filing .
13.1.3 Insolvency. Tenant becomes insolvent or transfers property in fraud of
creditors.
13 .1.4 Assignment for Benefit of Creditors. Tenant makes an assignment for the
benefit of creditors.
13.1.5 Receivership. A receiver is appointed for any of Tenant's assets.
13.1.6 Attachment. This Lease or Tenant's interest in the Premises or any part
thereof is taken by attachment, execution or other process of law, and such
attachment, execution or other process has not been released within sixty
(60) days thereafter.
13 .1. 7 Lien. Tenant fails to obtain a release of any lien against the Premises as
required under the terms of this Lease.
Notwithstanding the foregoing, in the event the Tenant continues to pay Rent as required under the
terms of this Lease, no Event of Default shall occur solely as a result of Tenant's bankruptcy,
insolvency, assignment for benefit of its creditors, or the appointment of a receiver for any of
Tenant's assets .
13.2 Landlord's Remedies. After the occurrence of an Event of Default by Tenant (and
such Event of Default remains uncured after the expiration of any applicable
notice and cure period), Landlord shall have the right to institute from time to time
an action or actions (i) to recover damages ( exclusive of consequential or special
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damages), (ii) for injunctive and/or other equitable relief, and (iii) in the event of
Monetary Default only, to recover possession of the Premises and terminate this
Lease.
13 .2.1 Monetary Default. In the event of a Monetary Default:
(i) Continue Lease. Landlord may, at its option, terminate Tenant's right to
possession of the Premises and continue this Lease in full force and effect, in which event
Landlord shall have the right to collect Base Rent and other charges when due, together with
Landlord's reasonable attorneys' fees and interest at the Default Rate from the date such
payment was due until the date paid by Tenant. In the alternative, Landlord shall have the
right, at its option to make any payment, such as Real Property Taxes, otherwise required to
be made by Tenant, in which event such payment shall not be deemed a cure of Tenant's
default, and Tenant shall reimburse Landlord for any such payment, together with
reasonable attorneys' fees and interest at the Default Rate from the date Landlord makes
such payment to the date Landlord receives such reimbursement. Landlord shall have the
right to peaceably re-enter the Premises, without such re-entry being deemed a termination
of the Lease or an acceptance by Landlord of a surrender thereof. Landlord shall also have
the right, at its option, from time to time, without terminating this Lease, to relet the
Premises, or any part thereof, following applicable legal process, as the agent, and for the
account, of Tenant upon such terms and conditions as Landlord may deem advisable, in
which event the Rents received on such reletting shall be applied (i) first to the reasonable
and actual and documented expenses of such reletting and collection, including without
limitation necessary renovation and alterations of the Premises, reasonable and actual
attorneys' fees and any reasonable and actual and documented real estate commissions and
consulting fees paid, and (ii) thereafter toward payment of all sums due or to become due to
Landlord hereunder. If a sufficient amount to pay such expenses and sums shall not be
realized, in Landlord's exercise of commercially reasonable efforts to mitigate its damages
(which Landlord hereby agrees to make), then Tenant shall pay Landlord any such
deficiency, and Landlord may bring an action or actions therefor as such deficiency shall
arise and accrue. Landlord shall not, in any event, be required to pay Tenant any sums
received by Landlord on a reletting of the Premises in excess of the Rent provided in this
Lease, but such excess shall reduce any accrued present or future obligations of Tenant
hereunder. Landlord's re-entry and reletting of the Premises without termination of this
Lease shall not preclude Landlord from subsequently terminating this Lease as set forth
below.
(ii) Terminate Lease. Landlord may terminate this Lease by written
notice to Tenant specifying a date therefor, which shall be no sooner than thirty (30) days
following receipt of such notice by Tenant, and this Lease shall then terminate on the date so
specified as if such date had been originally fixed as the expiration date of the Term. In the
event of such termination, Landlord shall be entitled to recover from Tenant all of the
following as damages:
(A) The "worth at the time of the award payment" (defined
below) of any obligation which has accrued pdor to the date of termination.
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(B) The "worth at the time of the award payment" of the
amount by which the unpaid Base Rent and all other charges which would have accrued
after termination until the time of award payment exceeds the amount of any sums (net of
reletting costs and expenses) actually received by Landlord from the Premises after
termination. Landlord shall have an affirmative obligation to attempt to mitigate its
damages following termination, until the time of the award payment.
(C) The "worth at the time of the award payment" of the
amount by which the Base Rent and all other charges which would have accrued after the
time of the award payment for the remaining term of this Lease exceeds the Fair Market
Rent ("FMR"), determined in the manner set forth below, for the remaining term of this
Lease. The FMR, as used in this Lease, shall be the fair market rent of the Premises, net
of market brokerage commissions and consulting fees, as of the time of the award for a
term equal to the remaining term of this Lease subsequent to the time of the award
payment (assuming this Lease had not been terminated) on an "as is" basis, as determined
by a licensed MAI appraiser selected by Landlord who has a minimum of 10 years of
experience in the appraisal of institutional quality inulti-family apartment projects in the
Denver metropolitan area. At Tenant's option, Tenant may select an additional licensed
MAI appraiser (meeting the same experience criteria as set forth above for Landlord's
appraiser) to estimate FMR and Tenant's appraiser and Landlord's appraiser shall select a
third MAI appraiser (also meeting the experience criteria as set forth above for
Landlord's appraiser) to estimate the FMR, in which case the FMR shall be the median of
the three FMR valuations. Tenant shall bear the cost of the FMR valuation process.
As used in this Section 13.2, the term, ''worth at the time of the award payment",
shall be computed by allowing simple interest at an accrual rate equal to the Default Rate for
past due obligations, and a discount rate to net present value at the time of the award
payment of five percent ( 5%) per annum on anticipated future obligations or revenues, and
mitigation amounts, with no interest or discount, on the amount of the obligations payable
on the date of such calculation. In the event this Lease shall be terminated as provided
above, by summary proceedings or otherwise, Landlord, its agents, servants or
representatives may immediately or at any time thereafter peaceably re-enter and take
possession of the Premises
13 .3 Reimbursement of Landlord's Costs in Exercising Remedies. Landlord may
recover from Tenant, and Tenant shall pay to Landlord upon demand, as
Additional Rent, such reasonable and actual and documented out-of pocket
expenses as Landlord may incur in recovering possession of the Premises, placing
the same in good order and condition and repairing the same for reletting, and all
other reasonable and actual and documented out-of pocket expenses, commissions
and charges incurred by Landlord in exercising any remedy provided herein or as
a result of any Event of Default by Tenant hereunder (including without limitation
reasonable attorneys' fees), provided that in no event shall Tenant be obligated to
compensate Landlord for any speculative or consequential damages caused by
Tenant's failure to perform its obligations under this Lease.
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13.4 Remedies Are Cumulative. The various rights and remedies reserved to Landlord
herein are cumulative, and Landlord may pursue any and all such rights and
remedies, in addition to any other rights or remedies available at law or in equity,
whether at the same time or otherwise (to the extent not inconsistent with specific
provisions of this Lease). Notwithstanding anything herein to the contrary,
Landlord expressly waives its right to forcibly dispossess Tenant from the
Premises, whether peaceably or otherwise, without judicial process, such that
Landlord shall not be entitled to any "commercial lockout" or any other provisions
of applicable law which permit landlords to dispossess tenants from commercial
properties without the benefit of judicial review.
13.5 Mitigation of Damages. In the event Landlord elects to terminate the Lease and
seek damages from Tenant as provided herein, Landlord will use reasonable
efforts to mitigate its damages. Landlord shall have the option but not the
obligation to list the Premises for lease with a real estate broker. In the event
Landlord elects not to so list the property but instead elects to itself market the
property for lease, such election shall not be deemed to constitute a failure by
Landlord to mitigate. Landlord will not be obligated to (i) accept less than the
then current market rent for the Premises; (ii) deviate from its then established
guidelines for tenants including without limitation use, experience, reputation, and
creditworthiness; (iii) lease less than all of the Premises; (iv) extend the Term of
this Lease; or (v) expend any money on behalf of a new tenant. Tenant will not
have any independent, affirmative claim against Landlord on account of
Landlord's failure to mitigate its damages; however, such failure to mitigate may
be asserted by Tenant as a defense to a claim by Landlord to the extent allowed by
law.
13.6 Waiver of Landlord's Lien. Landlord hereby waives any statutory liens and any
rights of distress with respect to the Tenant's Property (as defined below) from
time to time located on the Premises. This Lease does not grant a contractual lien
or any other security interest to Landlord or in favor of Landlord with respect to
Tenant's Property. Landlord further agrees, without cost to Tenant, to execute and
deliver such instruments reasonably requested by Tenant from time to time to
evidence the aforesaid waiver of Landlord. As used herein the term "Tenant's
Property" shall mean all business and trade fixtures, machinery and equipment,
automobiles, computers, furniture, satellite dish(s), signage, communications
equipment and office equipment, and all furniture, furnishings and other articles of
personal property owned by Tenant and located in the Premises.
13.7 Landlord Events of Default. Each of the following events or conditions shall
constitute a "Landlord Event of Default" hereunder: (a) any payment by
Landlord required hereunder is not paid when due and such failure continues for
thirty (30) days following written notice thereof; (b) any failure by Landlord to
perform any of its material duties or obligations contemplated by this Lease and
such failure continues for a period of thirty (30) days following written notice
thereof from Tenant to Landlord; provided, however, that if such failure cannot
reasonably be cured within said thirty (30) day period and Landlord shall have
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commenced to cure such failure within said period and shall thereafter proceed
with reasonable diligence and good faith to cure such failure, such thirty (30) day
period shall be extended for such longer period as shall be necessary for Landlord
to cure the same with all reasonable diligence; or ( c) any filing with a bankruptcy
court of a voluntary or involuntary petition of bankruptcy by or against Landlord
and such petition is not vacated within sixty (60) days, or a receiver or trustee is
appointed for Landlord and such appointment is not vacated with sixty (60) days,
or Landlord makes an assignment for the benefit of its creditors, except as
provided in this Lease.
13.8 Tenant Remedies for Landlord Event of Default. Upon the occurrence of a
Landlord Event of Default under this Article 13 and subject to any limitations set
forth in any consent and agreement executed with a Leasehold M01igagee, Tenant
may exercise all remedies available at law or at equity or other appropriate
proceedings, including bringing an action or actions from time to time for
recovery of damages which may include, without limitation, all amounts due and
unpaid to Tenant by Landlord, and all costs and expenses reasonably incurred in
the exercise of its remedies hereunder (including reasonable attorneys' fees),
and/or specific performance.
13.9 Attorneys' Fees In the event that either Landlord or Tenant commences any suit
for the collection of any amounts for which the other may be in default or for the
performance of any other covenant or agreement hereunder, the prevailing party in
any such action shall be awarded its costs and expenses, including, but not limited
to, all reasonable attorneys' fees and expenses incurred in enforcing such
obligations and/or collecting such amounts, from the other party to such action.
13 .10 Waiver of Consequential Damages. In no event shall either Landlord or Tenant
have the right to recover consequential damages of any kind from the other.
Except as limited hereinabove, all rights and remedies may be exercised and
enforced concurrently and whenever and as often as Landlord or Tenant shall
deem necessary.
14 Covenant of Quiet Enioyment
Landlord agrees that Tenant shall quietly and peaceably hold, possess, and enjoy the Premises,
without any hindrance or molestation by the agents or employees of Landlord, and further,
Landlord shall defend the title to the Premises and the use and occupancy of the same by Tenant
against the lawful claims of all persons whosoever, except those claiming by or through Tenant.
15 Landlord's Right to Mortgage/Transfers by Landlord
15 .1 Landlord's Right to Mortgage Fee. Landlord may mortgage its fee interest in the
Premises ("Fee Mortgage"), provided such mortgage expressly provides that the
rights and interests of the mortgagee thereunder are subordinate and subject to the
rights and interests of Tenant hereunder and the rights of any Leasehold Mortgagee
under any Leasehold Mortgage then or thereafter existing. This Lease and any new
lease made pursuant to Section 19.9 and any Leasehold Mortgage and all renewals,
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modifications, extensions or replacements of any of the foregoing shall be senior
and superior to (i) the lien of any Fee Mmtgage, or (ii) any encumbrances, now or
hereafter made or affecting all or any part of the fee title to the Premises, as the
same may be modified, extended, consolidated or renewed from time to time.
15.2 Transfers by Landlord. No transfer or sale of Landlord's interest hereunder shall
release Landlord from any of its obligations or duties hereunder prior to the
effective date of such transfer or sale. Landlord shall be released of any ongoing
obligations hereunder only from and after the date of such transfer or sale provided
such transferee, expressly assumes, in writing, the obligations of Landlord under
this Lease. Should Landlord sell, convey, or transfer its interest in the Premises or
should any Fee Mortgagee of Landlord succeed to Landlord's interest through
foreclosure or deed in lieu, Tenant shall attom to such succeeding party as its
landlord under this Lease promptly upon any such succession, provided such
succeeding party expressly assumes all of Landlord's duties and obligations under
this Lease. Such succeeding party shall not be liable for any of Landlord's
obligations and duties hereunder prior to its assumption of Landlord's duties and
obligations hereunder. Notwithstanding anything contained herein to the contrary,
(i) Landlord's right to transfer or sale of Landlord's interest under this Lease is
expressly subject to the Tenant's Right of First Refusal as set forth in Article 16
below; and (ii) in no event shall Landlord have the right to transfer, in any manner
whatsoever, or to sell its interest hereunder prior to delivery of possession of the
Premises to Tenant.
16 Right of First Refusal.
Provided there is no continuing and uncured Event of Default by Tenant in existence under this
Lease beyond the applicable notice and cure period, Tenant shall have a right of first refusal
("Right of First Refusal") to purchase Landlord's interest in the Premises on the following
terms and conditions: If at any time during the Term, Landlord shall have received a bona fide
arm's length offer to purchase the Premises from a third party which is acceptable to Landlord
("Offer"), Landlord shall promptly send a notice of such Offer to Tenant. Such notice shall set
forth the exact terms and conditions of the Offer so received together with a copy of the Offer,
and shall state the desire of Landlord to sell the Premises on such terms and conditions.
Thereafter, for a period of ninety (90) days (the "Acceptance Period), Tenant shall have the
right and option to purchase the entire Premises on the terms and conditions set forth in the
Offer. If Tenant elects to purchase the Premises on the terms and conditions set forth in the
Offer, Tenant shall provide Landlord with written notice of such election within the Acceptance
Period. If Tenant fails to notify Landlord of its election to purchase the Premises within such
ninety (90) day period, Landlord may sell the Premises to the proposed transferee on the terms
and conditions set forth in the Offer; provided however, if, for any reason, the Premises are not
sold in accordance with the terms and conditions of the Offer, so long as there is no continuing
and uncured default by Tenant in existence under this Lease beyond the applicable notice and
cure period Tenant shall have a continuing Right of First Refusal to purchase the Premises as
provided herein.
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17 Surrender of Premises
Upon termination of the Lease, whether by expiration of the Initial Term and any Extension
Term or otherwise, Landlord shall have the option (a) to take possession of part or all of the
Improvements then situated on the Premises and retain ownership of such Improvements free
and clear of any claim of Tenant, or (b) to require the Tenant, at its sole cost and expense, to raze
and remove all or any portion of the Improvements , and in either case to fill and grade the
Premises to the condition as existed on the Commencement Date, or seed such portion of the
Premises as designated by Landlord. Landlord shall exercise its option by written notice to
Tenant. Tenant shall have until the later of the termination of the Lease or one hundred eighty
(180) days following such notice to raze and remove any or all of the Improvements designated
in Landlord's notice and to fill and grade the Premises or seed the portion designated by
Landlord, and in the event such one hundred eighty (180) day period extends beyond the
termination of the Lease, Landlord shall permit the Tenant to retain possession of the Premises
during such one hundred eighty (180) day period, without any additional compensation to
Landlord, for the sole purpose of completing such work.
18 Miscellaneous
18.1 Non-Waiver of Default. No acquiescence by either party to any default by the
other party shall operate as a waiver of its rights with respect to any other breach or
default, whether of the same or any other covenant or condition.
18.2 Recording. This Lease shall not be recorded. The parties shall execute,
acknowledge, and deliver to each other duplicate originals of a short form or
memorandum of this Lease ("Memorandum of Lease") in substantially the form
of Exhibit C attached hereto and incorporated herein, describing the Premises and
setting forth the Tenn of this Lease. Upon request of either party, the parties shall
acknowledge and deliver to each other duplicate originals of an amendment to
Memorandum of Lease confirming the Commencement Date and expiration date of
the Initial Tenn, and thereafter if any Extension Option is exercised, an additional
amendment or amendments, stating the commencement and end of each applicable
Extension Term. The Memorandum of Lease and amendment to Memorandum of
Lease, if applicable, shall be recorded at Tenant's expense. In the event Tenant
records this Lease , this Lease shall automatically be deemed terminated and of no
further force or effect. Upon the expiration or earlier termination of this Lease,
upon written request of Landlord, Tenant will execute and deliver to Landlord a
termination of the Memorandum of Lease suitable for recording .
18.3 Notice. Any notice, request, offer, approval, consent, or other communication
required or permitted to be given by or on behalf of either party to the other shall be
given or communicated in writing by personal delivery, reputable overnight courier
service which keeps receipts of deliveries (i.e., Federal Express), or United States
certified mail (return receipt requested with postage fully prepaid) or express mail
service addressed to the other party as follows:
! . '. ·f.:
-. ---· ·!..-••-·, ~-,_ ......... _._ ...... -~-•· '--· -•'' ' -·:....;. _.._:..;:. • -•--·-· ·~·-··· ••. -· -c ~---' -'--~--•~-s,.,.: .•... -"··•"·:-;c,~ .. -c ,. -•"-'-· .• cC;"-,l.=· < ~:,,,;~•.·us-:\;·· '~ .. ,..._-•_: __ ' , -...... -~-·~·-..;.~ .. :, . -:. ..
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If to Tenant:
With copies to:
If to Landlord:
With copies to:
If to Leasehold
Mortgagee:
With copies to:
SOLANA LUCENT STATION LLC
Clo ReyLenn Properties LLC
444 S. Cedros Suite 180
Solana Beach, CA 92075
Attention: Ric Shwisberg and Christy Dutchman
SOLANALUCENT STATION LLC
Clo Rey Lenn Properties LLC
7310 S. Alton Way, Unit 6 D
Centennial, CO 80112
Attention: Jason Smith
Englewood/McLellan Reservoir Foundation
1000 Englewood Parkway
Englewood, Colorado 80110
Attention: President
City of Englewood
1000 Englewood Parkway
Englewood, Colorado 80110
Attention: City Attorney
Bank of the Ozarks
8201 Preston Road
Suite 700
Dallas, Texas 75225
Attn: Brannon Hamblen
Bank of the Ozarks
6th and Commercial
P.O. Box 196
Ozark, Arkansas 72949
Attn: Regina Barker
or at such other address as may be specified from time to time in writing by either party. All
such notices hereunder shall be deemed to have been given on the date personally delivered or
the date marked on the return receipt, unless delivery is refused or cannot be made, in which case
the date of postmark shall be deemed the date notice has been given .
18.4 Successors and Assigns. All covenants, promises, conditions, representations, and
agreements herein contained shall be binding upon, apply to, and inure to the
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benefit of the Parties hereto and their respective heirs, executors, administrators,
successors (including subtenants), and permitted assigns.
18.5 Partial Invalidity. If any provision of this Lease or the application thereof to any
person or circumstance shall to any extent be held invalid, the remainder of this
Lease or the application of such provision to persons or circumstances other than
those as to which it is held invalid shall not be affected thereby, and each provision
of this Lease shall be valid and enforceable to the fullest extent permitted by law.
18.6 Interpretation. In interpreting this Lease in its entirety, any additions written or
typed thereon shall be given equal weight, and there shall be no inference, by
operation of law or otherwise, that any provision of this Lease shall be construed
against either party hereto. This Lease shall be construed without regard to any
presumption or other rule requiring constmction against the Parties causing this
Lease to be drafted.
18.7 Headings, Captions, and References. The section captions contained in this Lease
are for convenience only and do not in any way limit or amplify any term or
provision hereof. The use of the terms "hereof," "hereunder," and "herein" shall
refer to this Lease as a whole, inclusive of the Exhibits, except when noted
otherwise. The terms "include," "includes," and "including" incorporate the
meaning "without limitation." The use of the masculine or neuter genders herein
shall include the masculine, feminine, and neuter genders and the singular form
shall include the plural when the context so requires.
18. 8 Governing Law. This Lease shall be construed under the laws of the State of
Colorado.
18.9 Execution of Documents. Landlord and Tenant shall each cooperate with the other
and execute such documents as the other party may reasonably require or request so
as to enable it to conduct its operations, so long as the requested conduct or
execution of documents does not derogate or alter the powers, rights, duties, and
responsibilities of the respective Parties.
18.l0Force Majeure. Whenever a party is required to perform an act under this Lease by
a certain time, unless specifically provided otherwise in this Lease, such party may
extend the deadline in the event of Excusable Delay. In the event a party elects to
so extend a deadline, such party shall first give written notice to the other party
within twenty (20) days following the commencement of the Excusable Delay
setting forth the event giving rise to the Excusable Delay. The party electing to
extend the deadline shall within twenty (20) days following the end of the
Excusable Delay give an additional written notice to the other party setting forth
the number of days the period ha! been extended as a result of the Excusable Delay
and the details of such delay .
18.11 Reasonable Consent. Unless specifically provided to the contrary, in all cases
where consent or approval shall be required pursuant to this Lease, the giving of
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each consent or approval shall not be unreasonably withheld, conditioned or
delayed by the party from whom such consent is required or requested.
18.12 Authority. No agreement, including but not limited to an agreement to amend or
modify this Lease or to accept surrender of the Premises, shall be deemed binding
upon either party, unless in writing and signed by an officer or other authorized
representative of the party against whom the agreement is to be enforced or by a
person designated in writing by such party as so authorized to act. In addition if
this Lease is subject to any Leasehold Mortgage, the prior written consent of any
such Leasehold Mortgagee shall also be required.
18.13 Payment of Rent. No payment by Tenant or receipt by Landlord of a lesser amount
than the Rent herein stipulated shall be deemed to be other than on account of the
earliest stipulated Rent, nor shall any endorsement or statement on any check or
any letter accompanying any check or payment of Rent be deemed an accord and
satisfaction unless expressly agreed to by Landlord acting thru its authorized
representative, and Landlord may accept such check or payment without prejudice
to Landlord's right to recover the balance of such Rent or pursue any other remedy
then available to Landlord .
18.14 Estoppel Certificates.
18.14.1 Tenant's Certificate. Within fourteen (14) days following receipt
of any written request which Landlord may make from time to time,
Tenant shall execute, acknowledge and deliver to Landlord a written
statement, certifying to any Leasehold Mortgagee, encumbrancer or
prospective purchaser the matters set forth therein and such other matters
requested by Landlord. Landlord and Tenant intend that any statement
delivered pursuant to this Section 18.4 may be relied upon by any such
purchaser or prospective purchaser, encumbrancer, or Mortgagee.
Tenant's failure to deliver such statement to Landlord within such fourteen
(14) day period shall be conclusive upon Tenant that (i) the terms and
provisions of this Lease have not been changed except as otherwise
represented by Landlord; (ii) that this Lease has not been canceled or
terminated and is in full force and effect, except as otherwise represented
by Landlord; (iii) that the current amount of the Rent is as provided in the
Lease; (iv) that there have been no assignments of the Lease; (v) that not
more than one month's Rent or other charges have been paid in advance;
and (vi) that to the best of Tenant's knowledge Landlord is not in default
under the Lease.
18.14.2 Landlord's Certificate. Landlord shall, at any time and from time
to time, within fourteen (14) days following written request by Tenant,
execute, acknowledge and deliver to Tenant and any Leasehold
Mortgagee, a statement in writing prepared by Tenant and edited by
Landlord, as appropriate, certifying that (i) this Lease is unmodified and in
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full force and effect ( or if there have been modifications, that the same is
in full force and effect as modified and stating the modifications); (ii) the
dates to which Tenant has paid Rent, adjustments to Rent, and other
charges in advance; (iii) whether or not to the best knowledge of Landlord,
Tenant is in default in the performance of any covenant, agreement or
condition contained in this Lease and, if so, specifying each such default
of which Landlord may have knowledge; or (iv) containing any other
information or certifications which reasonably may be requested by
Tenant or any Leasehold Mortgagee, any proposed assignee or sublessee
of Tenant, or any person or entity to which Tenant reasonably requests
such information be provided. Any such statement, delivered pursuant to
this subsection, may be relied upon by Tenant, any proposed assignee or
sub lessee or any proposed lender (including any Leasehold Mortgagee) of
Tenant. Landlord's failure to deliver any such statement within the
fourteen (14) day period set forth above shall be deemed to establish
conclusively that this Lease is in full force and effect and has not been
modified except as may be represented by Tenant. In the event that any
Leasehold Mortgagee requests that Landlord execute such a statement,
Tenant shall pay Landlord's reasonable attorneys' fees and costs incurred
in connection therewith .
18.15 Holding Over. Should Tenant hold over, without Landlord's consent, after the
Lease term has expired and continue to pay Rent, Tenant shall become a month to
month tenant only. In no event shall such hold over constitute an extension of the
term of this Lease. During such hold over, the Rent shall be an amount equal to
one hundred fifty percent (150%) of the Rent during the last month of the term of
the Lease, together with all other amounts payable by Tenant under the terms of the
Lease. None of the terms of this Section or the holding over by Tenant shall
constitute a waiver of any rights of Landlord to terminate the Lease at any time and
to re-enter and take possession of the Premises. Tenant shall indemnify and hold
harmless Landlord against all damages incurred by Landlord resulting from any
delay by Tenant in surrendering possession of the Premises.
19 Leasehold Financing
19.1 Definitions: For purposes of this Article 19, the term "Tenant" shall mean and
include each of the following: (i) the Tenant under this Lease; (ii) an assignee,
transferee or subtenant of the Tenant under this Lease who is or becomes directly
and primarily liable to Landlord; and (iii) any further assignee, transferee or
subtenant of any of the parties listed in (ii) who is or becomes directly and
primarily liable to Landlord. "Leasehold Mortgage" means and includes a
mortgage, a deed of trust or other security instrument by which Tenant's leasehold
estate or any portion thereof is mortgaged, conveyed, assigned, or otherwise
transferred to secure a debt or other obligation. The holder or holders of any such
Leasehold Mortgage shall be referred to herein as a "Leasehold Mortgagee." The
Leasehold Mortgagee's interest in the Premises and this Lease shall be subordinate,
junior and subject to Landlord's ownership of the Premises and interest in this
Lease.
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19.2 Encumbrance of Leasehold Estate by Tenant. Tenant may, from time to time
during the Term, without Landlord's prior consent, but following written notice to
Landlord, hypothecate, encumber, mortgage, pledge, or alienate the Improvements
to be constructed by Tenant on the Premises and/or Tenant's leasehold estate and
rights hereunder; provided however, (i) that no Leasehold Mortgage incurred by
Tenant pursuant to this Article shall, and Tenant shall not have power to incur any
encumbrance that will, constitute in any way a lien or encumbrance on Landlord's
fee interest in the Premises; and (ii) the Leasehold Mortgage and all rights
acquired under it shall be subject to each and all of the terms, covenants,
conditions and restrictions stated in this Lease and to all of the rights and interests
of Landlord, except as otherwise provided in this Lease.
19.3 Notices to Landlord. Notices to Landlord regarding Leasehold Mortgages shall be
given as follows:
19.4
19.3.l If Tenant shall, on one or more occasions, mortgage its leasehold estate,
the holder of such Leasehold Mortgage shall provide Landlord with notice
of such Leasehold Mortgage and the name and address of the Leasehold
M01igagee. Landlord and Tenant agree that, following receipt of such
notice by Landlord, the provisions of this Section 19 .3 shall apply with
regard to each such Leasehold Mortgage .
19 .3 .2 In the event of any assignment of a Leasehold Mortgage or in the event of
a change of address of a Leasehold Mortgagee or of an assignee of such
Leasehold Mortgagee, notice of the name and address of such new
Leasehold Mortgagee or assignee shall be promptly provided to Landlord
and in no event later than sixty (60) days following such assignment.
Cancellation or Modification of Lease. No cancellation, surrender, modification or
termination of this Lease shall be effective as to any Leasehold Mortgagee unless
either consented to in writing by such Leasehold Mortgagee or done in accordance
with the provisions of this Article 19.
19 .5 Enforcement of Leasehold Mortgage. A Leasehold Mortgagee or its assigns may
enforce such Leasehold Mortgage and acquire title to the leasehold estate in any
lawful way and, pending foreclosure of such lien, the Leasehold Mortgagee may
take possession of and operate the Premises, performing all obligations performable
by Tenant, and upon foreclosure of such lien by power of sale, judicial foreclosure,
or acquisition of the leasehold estate by deed in lieu of foreclosure, the Leasehold
Mortgagee may sell and assign the leasehold estate hereby created.
Notwithstanding anything herein contained to the contrary, the Leasehold
Mortgagee or any person or entity acquiring such leasehold estate shall be liable to
perform the obligations imposed on Tenant by this Lease only during the period
such person has ownership of said leasehold estate or possession of the Premises;
provided further that, except as expressly provided herein, in no event shall
Landlord's rights be impaired to exercise its remedies following an Event of
Default prior to Leasehold Mortgagee's possession or ownership. Landlord agrees
to provide an estoppel certificate to any Leasehold Mortgagee upon written request
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therefor, stating that this Lease is unmodified and in full force and effect ( or if there
have been modifications, that the same is in full force and effect as modified and
stating the modifications), the dates to which Tenant has paid Rent, adjustments to
Rent, and other charges in advance, if any, stating whether or not to the best
knowledge of Landlord, Tenant is in default in the perfonnance of any covenant,
agreement or condition contained in this Lease and, if so, specifying each such
default of which Landlord may have knowledge.
19 .6 Notice To and Rights of Leasehold Mortgagees. When giving notice to Tenant
with respect to any Event of Default or termination of this Lease, Landlord shall
serve a copy of such notice upon any Leasehold Mortgagee who shall have given
Landlord a written notice specifying its name and address. No such notice shall be
effective against any Leasehold Mortgagee unless and until served on such
Leasehold Mortgagee as herein provided. Upon the occurrence of an Event of
Default by Tenant in the performance of any of the terms, covenants, agreements,
and conditions of this Lease to be performed on Tenant's part, any Leasehold
Mortgagee shall have the right, within the grace perio.d available to Tenant for
curing such Event of Default plus, in each case, the additional periods of time
specified in Sections 19.7 and 19.8, as applicable, granted to any Leasehold
Mortgagee herein, to cure or make good, such Event of Default or to cause the
same to be cured or made good, whether the same consists of the failure to pay
Rent or the failure to perform any other obligation. Landlord shall accept such
performances on the part of any Leasehold Mortgagee as though the same had been
done or performed by Tenant. Tenant authorizes each Leasehold Mortgagee to take
any such action at such Leasehold Mortgagee's option and does hereby authorize
entry upon the Premises by any Leasehold Mortgagee for such purpose.
19.7 Limitation on Landlord's Tennination Rights. Anything contained in this Lease to
the contrary notwithstanding, if any Event of Default occurs which entitles
Landlord to terminate this Lease, Landlord shall have no right to terminate this
Lease unless, following the expiration of the period of time given Tenant to cure
such Event of Default ( or the act or omission which gave rise to such default),
Landlord shall notify each and every Leasehold Mortgagee of Landlord's intent to
so terminate at least thirty (30) days in advance of the proposed effective date of
such termination, if such Event of Default is capable of being cured by the payment
of money, and at least forty-five (45) days in advance of the proposed effective date
of such tennination, if such Event of Default is not capable of being cured by the
payment of money. The provisions of this Section 19.7 shall apply if, during such
thirty (30) or forty-five (45) day period, any Leasehold Mortgagee shall:
19.7.1 notify Landlord of such Leasehold Mortgagee's desire to nullify such
notice; and
19.7.2 pay or cause to be paid all Rent and other payments then due and in
arrears as specified under notice to such Leasehold Mortgagee and which
may become due during such thirty (30) or forty-five (45) day period; and
• 19.7.3 comply or in good faith, with reasonable diligence and continuity,
commence to comply with all nonmonetary requirements of this Lease
then in default and reasonably susceptible of being complied with by such
Leasehold Mortgagee.
19.8 Default Procedure. The following procedure shall be followed upon the
occunence of an Event of Default:
19. 8 .1 If Landlord shall elect to terminate this Lease by reason of any Event of
Default of Tenant, and a Leasehold M01igagee shall have furnished
Landlord notice in the manner provided for by Section 19.7, the specified
date for the termination of this Lease as fixed by Landlord in its notice of
termination shall be extended for a period of six ( 6) months, provided that
such Leasehold Mortgagee shall, during such six (6) month period:
19.8.1.1 pay or cause to be paid the Rent and all other monetary
obligations of Tenant under this Lease as the same become
due, and continue its good faith efforts to perform all of
Tenant's other obligations under this Lease, excepting past
nonmonetary obligations then in default and not reasonably
• susceptible of being cured by Leasehold Mortgagee; and
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19.8.1.2 if not enjoined or stayed, commence proceedings to acquire
or sell Tenant's interest in this Lease by foreclosure of the
Leasehold Mortgage or other appropriate means and
prosecute the same to completion with due diligence. The
time available to a Leasehold Mortgagee to initiate
foreclosure proceedings as aforesaid shall be deemed
extended by the number of days of delay of occasioned by
judicial restriction against such initiation.
19. 8.2 If at the end of six ( 6) month period such Leasehold Mortgagee is
complying with Subsection 19.8.1.1, this Lease shall not then terminate,
and the time for completion by such Leasehold Mortgagee of its
proceedings shall continue so long as such Leasehold Mortgagee is
enjoined or stayed in a judicial proceeding and thereafter for so long as
such Leasehold Mortgagee proceeds to complete steps to acquire or sell
Tenant's interest in this Lease by foreclosure of the Leasehold Mortgage
or by other appropriate means with reasonable diligence and continuity.
Nothing in this Section 19.8, however, shall be construed to extend this
Lease beyond the Term hereof nor to require a Leasehold Mortgagee to
continue such foreclosure proceedings after the Event of Default has been
cured. If the Event of Default shall be cured and the Leasehold Mortgagee
shall discontinue such foreclosure proceedings, this Lease shall continue
in full force and effect as if Tenant had not defaulted under this Lease.
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19.8.3 If a Leasehold Mortgagee is complying with Subsections 19.8.1.l and
19.8.1.2, upon the acquisition of Tenant's estate herein or any portion
thereof by such Leasehold Mortgagee or its designee or any other
purchaser at a foreclosure sale, or otherwise, this Lease shall continue in
full force and effect as if Tenant had not defaulted under this Lease.
19.8.4 For the purposes of this Section 19 the maldng of a Leasehold Mortgage
shall not be deemed to constitute an assignment or transfer of this Lease or
of the leasehold estate hereby created, nor shall any Leasehold Mortgagee,
as such, be deemed to be an assignee or transferee of this Lease or of the
leasehold estate hereby created so as to require such Leasehold
Mortgagee, as such, to assume the performance of any of the terms,
covenants or conditions on the part of the Tenant to be performed
hereunder, but the purchaser, including the Leasehold Mortgagee if
applicable, at any sale of this Lease and of the leasehold estate hereby
created in any proceedings for the foreclosure of any Leasehold Mortgage
shall be deemed to be an assignee or transferee and shall be deemed to
have agreed to perform all of the terms, covenants and conditions on the
part of the Tenant to be performed hereunder from and after the date of
such purchase and assignment, but only for so long as such purchaser or
assignee is the owner of the leasehold estate .
19.8.5 Any Leasehold Mortgagee or other acquirer of the leasehold estate of
Tenant pursuant to foreclosure, assignment in lieu of foreclosure or other
proceedings may, upon acquiring Tenant's leasehold estate, without
further consent of Landlord (but following prior written notice to
Landlord), sell and assign the leasehold estate or portion thereof on such
terms and to such persons and organizations as are acceptable to such
mortgagee or acquirer and thereafter be relieved of all obligations under
this Lease; provided that such purchaser or assignee has, concurrent with
such purchase or assignment, delivered to Landlord its written agreement
to be thereafter bound by all of the provisions of this Lease.
19.8.6 Notwithstanding any other provisions of this Lease, any sale of this Lease
and of the leasehold estate hereby created in any proceedings for the
foreclosure of any Leasehold Mortgage, or the assignment or transfer of
this Lease and of the leasehold estate hereby created in lieu of the
foreclosure of any Leasehold Mortgage shall be deemed to be a permitted
sale, transfer or assignment of this Lease and of the leasehold estate
hereby created.
19.9 Leasehold Mortgagee's Right to New Lease. In case of the termination of this
Lease by reason of any Event of Default or in the event ofrejection or
disaffirmance of this Lease pursuant to bankruptcy law or any other law affecting
creditor's rights, Landlord shall give prompt notice thereof to any Leasehold
Mortgagees whose name and address for notice has been given to Landlord.
Landlord shall, following receipt of written request of any such Leasehold
Mortgagee or designee, made at any time within sixty (60) days after the giving of
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such notice by Landlord, enter into a new lease of the Premises with such
Leasehold Mortgagee, or its designee, within thirty (30) days after receipt of such
request, which new lease shall be effective as of the date of such termination of this
Lease for the remainder of the term of this Lease, at the Rent provided for herein,
and upon the exact same terms, covenants, conditions and agreements as are herein
contained; provided that such Leasehold Mortgagee(s) shall: (a)
contemporaneously with the delivery of such request, pay to Landlord all the
installments of Rent and other charges payable by Tenant hereunder which are
delinquent or then due, whether or not Landlord has specified them as due in any
notice to such Leasehold Mortgagee given as provided in this paragraph; (b) pay to
Landlord at the time of the execution and delivery of said new lease any and all
sums for Rent and other charges payable by Tenant hereunder to and including the
date thereof, together with all actual and documented out of pocket expenses,
including reasonable attorneys' fees, incurred by Landlord in connection with the
termination of this Lease and with the preparation, execution and delivery of such
new lease, less the net amount (if any) of all sums received by Landlord from any
Subtenants/residents in occupancy of any pa.ii of parts of the Improvements on the
Real Prope1iy or any part thereof up to the date of commencement of such new
lease; and ( c) on or prior to the execution and delivery of said new lease, agree in
writing that promptly following the delivery of such new lease, such Leasehold
Mortgagee or its designee will perform or cause to be performed all of the other
covenants and agreements herein contained on Tenant's part to be performed to the
extent that Tenant shall have failed to perform the same to the date of delivery of
such new lease, except such covenants and agreements which are not susceptible of
performance by such Leasehold Mortgagee.
19.l O Priority of New Leases. Any new lease made pursuant to Section 19.9 and any
renewal lease entered into with a Leasehold Mortgagee shall be prior to any
mortgage or other lien, charge or encumbrance on the fee of the Premises and the
Tenant under such new lease shall have the same right, title and interest in and to
the Premises and the Improvements thereon as Tenant had under this Lease. The
provisions of this Section 19.10 and Section 19.9 shall survive the termination,
rejection or disaffirmance of this Lease and shall continue in full force and effect
thereafter to the same extent as if Sections 19 .9 and 19 .10 were a separate and
independent contract made by Landlord, Tenant and such Leasehold Mortgagee
and, from the effective date of such termination, rejection or disaffirmance of this
Lease to the date of execution and delivery of such new lease, such Leasehold
Mortgagee may use and enjoy said Real Property without hindrance by Landlord or
any person claiming by, through or under Landlord.
19.11 Liabilities of New Tenant. The new Tenant shall be liable to perform all of the
obligations imposed on the Tenant by such new lease only during the period such
person has ownership of such leasehold estate .
19.12 Protection of Landlord's Estate. Despite anything in this Lease to the contrary, the
foregoing provisions do not give to any person whatsoever the right to mortgage,
hypothecate or otherwise to encumber or to cause any liens to be placed against the
fee interest of Landlord.
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19.13 Incurable Defaults. Nothing herein contained shall require any Leasehold
Mortgagee or its designee as a condition of the exercise of any rights hereunder or
in order to comply with the provisions of Section 19.7 or 19.8 or as a condition of
entering into the new lease provided for by Section 19.9 to cure any nonmonetary
default of Tenant not reasonably susceptible of being cured by such Leasehold
Mortgagee or its designee.
19.14 Condemnation Awards. Tenant's share of the proceeds arising from an exercise of
the power of eminent domain as provided for herein shall, subject to the provisions
of this Lease, be disposed of as provided for by any Leasehold Mortgage.
19.15 Mortgagee Clauses. A standard mortgagee clause naming each Leasehold
Mortgagee may be added to any and all insurance policies required to be cruTied by
Tenant hereunder on condition that the insurance proceeds are to be applied in the
manner specified in this Lease and each Leasehold Mortgage shall so provide,
except that such Leasehold Mortgage may provide in a manner for the disposition
of such proceeds, if any, otherwise payable directly to Tenant (but not such
proceeds, if any, payable jointly to Landlord and Tenant) pursuant to the provisions
of this Lease.
19 .16 Proceedings. Landlord shall give each Leasehold Mortgagee whose name and
address for notice has been given to Landlord, prompt notice of any arbitration or
legal proceedings between Landlord and Tenant involving obligations under this
Lease. Each Leasehold Mortgagee shall have the right to intervene in any such
proceedings and be made a party to such proceedings, and the parties hereto do
hereby consent to such intervention. In the event that any Leasehold Mortgagee
shall not elect to intervene or become a party to any such proceedings, Landlord
shall give the Leasehold Mortgagee notice of, and a copy of, any award or decision
made in any such proceedings, which shall be binding on all Leasehold Mortgagees
not intervening after receipt of such notice or arbitration or proceedings.
19 .17 Notice by Landlord. Notices from Landlord to any Leasehold Mortgagee shall be
mailed to the address furnished Landlord pursuant to Section 19.6, and those from
any Leasehold Mortgagee to Landlord shall be mailed to the address designated
pursuant to the provisions of Section 18.3 hereof. Such notices, demands and
requests shall be given in the manner described in Section 18.3.8 and shall in all
respects be governed by the provisions of that Section.
19.18No Waiver. No payment made to Landlord by a Leasehold Mortgagee shall
constitute agreement that such payment was, in fact, due under the terms of this
Lease; and a Leasehold Mortgagee having made any payment to Landlord
pursuant to Landlord's wrongful, improper or mistaken notice or demand shall be
entitled to the return of any such payment or portion thereof provided it shall have
made demand therefor not later than sixty (60) days after the date of its payment.
19.19No Merger. There shall be no merger of this Lease, nor of the leasehold estate
created by this Lease, with the fee estate in the Premises by reason of the fact that
this Lease or the leasehold estate created by this Lease or any interest in this Lease
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or said leasehold estate may be held, directly or indirectly, by or for the account of
any person or persons who shall own the fee estate in the Premises or any interest
in such fee estate, and no such merger shall occur unless and until all persons at the
time having an interest in the fee estate in the Premises and all persons (including
Leasehold Mortgagees) having an interest in this Lease or in the estate of Landlord
and Tenant shall join in a written instrument effecting such merger and shall duly
record the same.
19 .20 Liens. On the Commencement Date, the Premises shall be free and clear of all
mortgage liens other than those expressly agreed to (if any) in accordance with this
Lease. Thereafter, any mortgage placed on the Premises by Landlord, or permitted
to be placed or remain thereon by Landlord, shall be subject to this Lease, any
mortgage then in existence on the leasehold estate as permitted by this Lease,
Tenant's right as permitted by this Lease subsequently to encumber the leasehold
estate, and any and all documents executed or to be executed by Landlord in
connection with the development of the Premises or any portion thereof.
19.21 Amendments Required by Leasehold Mo1igagees. Upon the reasonable request of
any Leasehold Mortgagee, Landlord and Tenant shall cooperate in including in this
Lease by suitable amendment or separate agreement from time to time any
provision for the purpose of implementing the protective provisions contained in
this Lease for the benefit of such Leasehold Mortgagee in allowing such Leasehold
Mortgagee reasonable means to protect or preserve the lien of its proposed
Leasehold Mortgage upon the occurrence of an Event of Default under the terms of
the Lease. Landlord and Tenant shall execute, deliver, and acknowledge any
amendment or separate agreement reasonably necessary to effect any such
requirement; provided, however, that any such amendment or separate agreement
shall not in any way affect the Term or rental under this Lease nor otherwise in any
material respect adversely affect any rights of Landlord under this Lease.
19.22 Fees and Costs. Tenant agrees to reimburse Landlord for its reasonable, actual
and documented, attorneys' fees and costs incurred in connection with Landlord's
review and/or approval of any documentation which may be required in
connection with any Leasehold Mortgage by Tenant as provided herein.
19 .23 Benefits. The provisions of this Article 19 are for the benefit of any Leasehold
Mortgagee and may be relied upon and shall be enforceable by any Leasehold
Mortgagee. No Leasehold Mortgagee shall be liable upon the covenants,
agreements or obligations of Tenant contained in this Lease, except as expressly
provided herein.
20 Representations of Landlord and Tenant
20.1 Representations of Landlord. Landlord represents and warrants to Tenant that, as
of the Effective Date:
20.1.1 Landlord is a non-profit corporation validly organized and existing under
the laws of the State of Colorado. Landlord has the full right, power and
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authority to enter into this Agreement and to perform Landlord's
obligations hereunder.
20.1.2 This Agreement (i) has been duly authorized, executed, and delivered by
Landlord; and (ii) is the binding obligation of Landlord;
20.1.3 Landlord has not granted, other than to Tenant, any outstanding option,
right of first refusal or any preemptive right with respect to the purchase of
all or any portion of the Premises.
20.1.4 To the best of Landlord's knowledge, the Premises and use and occupancy
thereof is not in violation of any laws and no written notice of such
violation has been received by Landlord and is not the subject of any
existing, pending, or threatened investigation or inquiry by any
governmental authority or subject to any remedial obligations under any
laws pertaining to or relating to hazardous materials or other
environmental conditions.
20.1.5 No lawsuit has been filed or threatened against Landlord regarding the
Premises.
20.1.6 There are no other leases, agreements or contracts in existence relating to
· the Premises, including, without limitation, tenant leases, service
contracts, or management agreements.
20.1. 7 There are no oral agreements affecting the Premises.
20.1.8 There is no litigation pending with respect to the Premises relating to any
Environmental Law violations. Except as disclosed in writing by
Landlord or disclosed in environmental reports delivered to Tenant,
Landlord has no actual knowledge of an Environmental Law violation and
has received no notice or other written communication from a
governmental agency or any other person or entity alleging or suggesting
an Environmental Law violation on the Premises. The term
"Environmental Law," as used in this Agreement, shall include: (1)
Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C.A. §9601, et seq. ("CERCLA");
(2) Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976, as amended by the Hazardous and Solid Waste
Amendments of 1984, 42 U.S.C.A. §6901, et seq.; (3) Federal Water
Pollution Control Act of 1972, as amended by the Clean Water Act of
1977, as amended, 33 U.S.C.A. §1251, et seq.; (4) Toxic Substances
Control Act of 1976, as amended, 15 U.S.C.A. §2601, et seq.; (5)
Emergency Planning and Community Right-to-Know Act of 1986, 42
U.S.C.A. § 11001, et seq.; (6) Clean Air Act of 1966, as amended by the
Clean Air Act Amendments of 1990, 42 U.S.C.A. §7401, et seq.; (7)
National Environmental Policy Act of 1970, as amended, 42 U.S.C.A.
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§4321, et seq.; (8) Rivers and Harbors Act of 1899, as amended, 33
U.S.C.A. §401, et seq.; (9) Endangered Species Act of 1973, as amended,
16 U.S.C.A. §1531, et seq.; (10) Occupational Safety and Health Act of
1970, as amended, 29 U.S.C.A. §651, et seq.; (11) Safe Drinking Water
Act of 1974, as amended, 42 U.S.C.A. §300(f), et seq.; and (12) all
applicable standards, rules, policies and other governmental requirements.
20.1.9 Landlord owns the Premises free and clear of any mortgage or deed of
trust.
20.2 Representations of Tenant. Tenant represents, warrants and covenants to Landlord
that:
20.2.1 Tenant's Authority. Tenant is a duly constituted limited liability company
organized under the laws of the State of Delaware, it has the power to
enter into this Lease and perform Tenant's obligations hereunder; and the
person executing this Lease on Tenant's behalf has the right and lawful
authority to do so.
20.2.2 Tenant's Covenant as to Hazardous or Toxic Substances.
20.2.2.1 Except for those substances and materials which are typically
used in connection with the construction and operation of
multifamily residential developments (such as paints, solvents
and other similar materials) or substances typically used in
multifamily residential dwellings such as household cleaners and
paints (which materials shall be permitted on the Premises and
which at all times shall be used, stored, transported and disposed
in accordance with all applicable laws), Tenant hereby covenants
that Tenant shall not cause or permit any "Hazardous
Substances" (as hereinafter defined) to be placed, held, located
or disposed of in, on or at the Premises or any part thereof except
in accordance with all applicable laws, statutes, ordinances, and
regulations .
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20.2.2.2 Tenant hereby agrees to indemnify Landlord and hold Landlord
harmless from and against any and all losses, liabilities, damages,
injuries, expenses, including reasonable attorneys' fees, costs of
any settlement or judgment and claims of any and every kind
whatsoever paid, incurred or suffered by, or asse1ied against,
Landlord by any person or entity or governmental agency as a
result of the escape, seepage, leakage, spillage, discharge,
emission, discharging or release from, the Premises of any
Hazardous Substance, provided, however, that the foregoing
indemnity is limited to matters arising solely from Tenant's
violation of the covenant contained in the subsection 20.2.2.1.
20.2.2.3 For purposes of this Lease, "Hazardous Substances" shall mean
and include those elements or compounds which are contained in
the list of hazardous substances now or hereafter adopted by the
United States Environmental Protection Agency (the "EPA") or
the list of toxic pollutants designated by Congress or the EPA or
which are now or hereafter defined as hazardous, toxic,
pollutants, infectious or radioactive by any other Federal, state or
local statute, law, ordinance, code, rule, regulation, order or
decree regulating, relating to, or imposing liability or standards of
conduct concerning, any hazardous, toxic or dangerous waste,
substance or material, as now or at any time hereafter in effect.
"Hazardous Substances," for the purposes ofthis Lease, shall
include petroleum products, asbestos, and polychlorinated
biphenyls, and underground storage tanks unless installed,
maintained, and closed in compliance with all applicable laws.
20.2.2.4 In the event Hazardous Substances are present on the Premises
in violation of Tenant's covenant in subsection 20.2.2.1, and
Tenant fails to clean up, remove, resolve, minimize the impact of,
or otherwise remediate such contamination in compliance with all
applicable laws and regulations and to obtain a "no further
action" or similar closure letter from the governmental authorities
with jurisdiction over such Hazardous Substances permitting the
development and use of the Premises as contemplated herein
without further remediation (collectively, "Remediate," which
term shall include obtaining such approvals as are required from
applicable governmental authorities prior to the commencement
of Remediation activities on the Premises), then Landlord shall
have the right, but not the obligation, thirty (30) days after notice
to Tenant and Tenant's failure to Remediate, or, if Tenant cannot
Remediate within thirty (30) days, then upon Tenant's failure to
commence preparation of a plan to Remediate within such thirty
(30) day period and diligently pursue the approval of such plan
and the completion of the remediation work authorized by the
approved plan to completion, to enter upon the Premises to
Remediate such contamination. Tenant agrees to commence
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preparation of such plan promptly upon receipt of notice that
such Hazardous Substances are present, to apply for approval of
such plan promptly, and to pursue such approval diligently. All
reasonable and actual and documented costs and expenses
incurred by Landlord in the exercise of any such rights which
result from Tenant's violation of the covenants contained herein,
shall be deemed additional Rent under this Lease and shall be
payable by Tenant within thirty (30) days of written demand
which demand shall be supported by appropriate back-up
documentation .
20.3 Broker. Landlord and Tenant acknowledge that Richard Liedy and Richard Dean,
(collectively "Broker") have acted as Broker for Tenant in connection with the
transaction contemplated by this Lease and Tenant agrees to pay Broker any and
all compensation due it as a result of this transaction pursuant to a separate written
agreement to be entered into between Tenant and Broker. Notwithstanding the
foregoing, Landlord acknowledges that Tenant shall be entitled to the Base Rent
Credit for a portion of the compensation paid to Broker as more specifically
provided in Section 5. 7 above. Except for Broker, each party hereby indemnifies
and agrees to hold the other party harmless from all damages, claims, liabilities or
expenses, including reasonable and actual attorneys' fees (through all levels of
proceedings), resulting from any claims that may be asserted against the other party
by any real estate broker or finder with whom the indemnifying party either has or is
purported to have dealt.
Signatures Appear on the Following Page
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IN WITNESS WHEREOF, this Lease has been executed as of the date written above.
LANDLORD:
ENGLEWOOD/MCLELLAN RESEVOIR
FOUNDATION, a Colorado non-profit
corporation
,,,,,,--;;
By:~:.__~~~... ~-
Name: -~":=-~~~<L-""'-"-........,,..c.=.:::,_:_:_"-'-'--
Title: __ ...,_,,_.....,,,..==..,,....!....::0,.__.___ _____ _
TENANT:
SOLANA LUCENT STATION LLC,
a Delaware limited liability company
By: Solana Lucent Holdings LLC,
a Delaware limited liability company,
its Manager
By: RP Solana Lucent Station Investors
LLC, a Delaware limited liability
company, its Manager
By: ReyLenn Properties LLC,
a California limited liability company,
its Manager
By: ~
Name: i:&tL-t,~
Title: ~~~"1...
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EXHIBIT A
LEGAL DESCRIPTION OF THE PREMISES
Lot 2, Highlands Ranch Filing No. 157, according to the Plat thereofrecorded November 19,
2015 at Reception No. 2015083463, County of Douglas, State of Colorado .
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(00325438 :}
EXHIBITB
SITE PLAN OF PREMISES
SEE ATTACHED
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A PART OF THE NORTHWEST .1/4 SECTION 4, TOWNSHIP 6 SOUTH, RA~NGE BB.WEST~,=. "-
PLANNING AREA 85-A -9.89 ACRES ---·
SITE IMPROVEMENT P[AN -SP2015-008 1------_____ _:_. -. l------------l.----~---•• -... -... ---,11
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EXHIBITC
MEMORANDUM OF LEASE
SEE ATTACHED
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MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE is made and entered into between
ENGLEWOOD/MCLELLAN RESERVOIR FOUNDATION, a Colorado nonprofit corporation
("Landlord"), and SOLANA LUCENT STATION LLC, a Delaware limited liability company
("Tenant"). Landlord has leased to Tenant the real property described in Exhibit A attached
hereto ("Premises"). The initial term of the Lease commenced effective as of January 1, 2016
and ends at 11 :59 p.m. on December 31, 2036. Tenant has two (2) options to extend the Lease
for twenty (20) years each, and one final option to extend the term for fifteen (15) years.
The Lease and the options contained therein are subject to the terms, conditions and
provisions of that certain unrecorded lease between the parties hereto dated effective as of
January!, 2016 (the "Lease").
• Landlord has granted Tenant Right of First Refusal to purchase the Premises on the terms
•
and conditions more specifically set forth in of the Lease.
The Lease is made and entered into upon all of the terms, covenants, and conditions, and
subject to all of the provisions, set forth in the Lease, which terms, covenants, conditions, and
provisions of the Lease are incorporated herein by reference. By this Memorandum, all parties
dealing with the above-described real property and/or the Premises are hereby put on notice as to
the rights and obligations of Landlord and Tenant under the Lease. In the event of any conflict
between the provisions of this Memorandum and the provisions of the Lease, the provisions of
the Lease shall control.
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This Memorandum of Lease is executed on the dates set forth in the acknowledgments
attached hereto, to be effective as of the ___ day of ______ _, 2016.
LANDLORD:
ENGLEWOOD/MCLELLAN RESEVOIR
FOUNDATION, a Colorado non-profit
corporation
TENANT:
SOLANA LUCENT STATION LLC,
a Delaware limited liability company
By: Solana Lucent Holdings LLC,
a Delaware limited liability company,
its Manager
By: RP Solana Lucent Station Investors
LLC, a Delaware limited liability
company, its Manager
By: Rey Lenn Properties LLC,
a California limited liability company,
Manager
~
Name: 8.tt.. ~, ?rtf.,t
Title: I.A ":N\-l?t2'.\.
,•.' I
... ··-" ..... -• •••••--•-h••••• •· •. ,.••,•• •. ._,• ••••·· ~•,.: ...... ~ ,_•••
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Exhibit A to Memorandum of Lease
Legal Description of the Real Property
Lot 2, Highlands Ranch Filing No. 157, according to the Plat thereof recorded November 19,
2015 at Reception No. 2015083463, County of Douglas, State of Colorado .
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EXHIBITD
RTD PHASE 1 IMPROVEMENTS
SEE ATTACHED
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EXHIBITE
SUBDIVISION IMPROVEMENT AGREEEMENT
SEE ATTACHED
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SUBDIVISION IMPROVEMENTS AGREEMENT
___ Solana Lucent Station-SB 2012-053_1-Iighlands Ranch Filing 157 __
(Project Name & File Numbe1)
Al Peterson -------------
(St c if.f E11ginee1)
Matt Jakubowski -------------
(StqffP lanne1~
This Agreement is made as of thiso-2 u 'i-day of August, 2015, between Englewood McLelian
Reservoir Foundation, a Colorado Non-Profit corporation qualified to do business in Colorado
("Developer"), whose address is 1000 Englewood Parkway, Englewood, Colorado 80110 and the
BOARD OF COUNTY COMMISSIONERS OF THE COUNTY OF DOUGLAS ("County"), whose
address is 100 Third Street, Castle Rock, Colorado 80104, Attention: Public Works Engineering
Director. ·
GENERAL
1.1 Purpose. The purpose of this Agreement is to provide for the completion of the
Subdivision Improvements as hereinafter defined, for the Stibdivision, as hereinafter defined.
1.2 Recitals.
( a) Developeris the owner and subdivider of the Subdivision and has presented a
final plat of the Subdivision to the County for approval.
(b) The subdivision statutes of the State of Colorado, Section 30-28-127, C.R.S.,
and the Subdivision Resolution of the County authorize the execution of a subdivision improvements
agreement between the County and Developer whereby Developer agrees to construct any required
public improvements for the Subdivision and to provide secmity for completion of the Subdivision
Improvements.
(c) This Agreement will provide for the completion of the Subdivision
Improvements within the Subdivision and will protect the County from the cost of completing the
Subdivision Improvements.
( d) This Agreement is not executed for tl1e benefit of third pmties such as, but not
limited to, materialmen, laborers or others providing work, services or material for the Subdivision
Improvements or lot or home buyers in the Subdivision .
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1.3 S1.1bdivision. The "Subdivision" sha11 mean Highlands Ranch Planned Development
Filing No. 157, Douglas County, Colorado, the final plat for which has been presented to the County
and is expected to be approved by the Corn1ty at the time of, and in connection with, approval of this
Agreement by the County,
1.4 Subdivis.ion Improvements. The "Subdivision Improvements" shall mean the street,
drainage and other imJ)l'ovements, including cost contributions and/or guarantees of payment, ifany,
set forth and described on the Plans, as hereinafter defined and/or in Exhibits A, attached hereto and
are incorporated herein by this reference. Tue Subdivision Improvements and phasing are listed,
together with the estimated costs fhereof and/or with the agreed upon :financial contribution amounts,
on Exhibits A.
1.5 Plans. The "Plans" shall mean the construction drawings dated 12-10-2014, entitled
_ Solana Lucent Station Public Roadway Improvements_ on file with the Public Works Engineering
Director.
II. CONSTRUCTION OF SUBDIVISION IMPROVEMENTS.
2.1 Agreement to Construct. Subject lo and in accordance with the terms and provisions
of this Agreement, Developer agrees to cause the Subdivision Improvements to be constrncted and
completed at its expense, in accordance with the .Plans.
2 .2 Final Plat Approval as Condition. The obligation of the Developer to construct and
complete the Subdivision Improvements i$ conditioned upon and shall adse only upon approval and
recordation of the final plat of the Subdivision by the County.
2.3 Commencement of Construction. Developer shall commence construction and
installation of one or more Phases of the Subdivision Improvements within 60 days ;from the date of
receipt by the County of security for the full amount of the construction cost of said Phase(s) as
identified in Exhibits A of this Agreement.
2.4 Completion Date. Said Phase(s) shall be completed within Twenty (20) months after
the date of receipt of security for said Phase(s) ("Completion Date"). The Completion Date may be
extended with the approval of the Board of County Commissioners, which approval shall not be
umeasonably withheld.
2.5 Construction Standards. The Subdivision Improvements, including water and sanitaiy
sewer, shall be constrnclecl in accordance with the Plans approved by the Public Works Engineering
Director and, to the extent not otherwise provided in the Plans, in accordance with the County's
ordinances, resolutions, and regulations.
2.6 Warranties of Developer. Developer warrants that the Subdivision Improvements will
be installed in a good and worlananlike manner and in substantial compliance with the Plans and
requirements of this Agreement and shall be substantially free of defects in materials and
worlmrnnship. These warranties of Developer shall remain in force and effect as to any completed
Phase of the Subdivision !mprovernenls until the lapse of two years after Preliminary Acceptance of
such Phase of the Subdivision Improvements as hereinafter provided in this Agreement.
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2. 7 Title to Subdivision Improvements. All Subdivision Improvements shall be
constructed within streets or easements dedicated to the CotU1ty in the final plat of the Subdivision or
conveyed by other recorded instruments at the time the final plat is recorded. Subdivision
Improvements for private roads shall be in accordance with the Douglas County Roadway Design
and Construction Standards. Title to the property shown on the final plat shall be vested, at the time
the final plat is pi-esented to the County for approval, in Developer and any other parties executing
the final plat and shall be certified by a title company's or attorney's ce1ti:ficate shown on the final
plat.
III. SECURITY FOR COMPLETION.
3.1 Deposit of Security for Developer Obligations. To secure the performance of the
obligations of Developer under this Agreement to complete the Subdivision Improvements for the
Subdivision, Deve]o1,er shall deposit with the County cash or an irrevocable letter of credit with
provisions as hereinafter set forth. The cash or letter of credit shall be deposited after approval of the
final plat for the Subdivision and shaJJ be 115% of the estimated cost to constrnct each Phase, which
the Developer desires to construct. No conveya11ce or transfer of title to any lot, lots, tract or tracts of
land within a Phase with uncompleted Subdivision Improvements shall be made, nor any building
pennit issued, unless cash or an approved letter of credit has been deposited with the County or
unless all pub! ic improvements have been completed and cash or an irrevocable letter of credit in the
amount of 15 percent of the estimated cost of said improvements has been deposited with the County
as provided in Section 4.2 below. The cash or the irrevocable letter of credit shall be retained by the
County until satisfaction of Developer's obligations under this Agreement or earlier release by the
County.
3.2 Provisions for Letter of Credit. A letter of credit for a Phase shall be in an amount
equal to 115% of the estimated cost to constrnct that Phase. The letter of credit shall be iss.ued by
T B. D. • or such other banlc as shall be approved by the
County; shall have an expiration date no earlier than two years after its date of issue; and shall
provide that it may be drawn upon from time to time by the County in such amount or amounts as the
County may designate as justified, such amounts not to exceed, in the aggregate, the amount of the
letter of credit. Draws under any such letter of credit shall be by a ce1tificate signed by the Chainmm
or Acting Chainnan of the Board of County Commissioners of Douglas County stating that the
County is entitled to draw the specified amount under the terms of this Agreement. The right of the
County to draw on any letter of credit shall be as provided in, and subject to, the provisions of
Sections 5.1 tluough 5.6 of this Agreement.
3.3 Recording of Agreement. After approval of the final plat of the Subdivision by the
County, this Agreement may, at the option and expense of the County, be recorded in the office of
the Clerk and Recorder of Douglas County. Upon Final Acceptance of all of the Subdivision
Improvements by the County, the County shall deliver to Developer a recordable executed document,
which shall release all property within the Subdivision from any further effect of this Agreement.
IV. ACCEPTANCE OF IMPROVEMENTS.
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4.1 Preliminary Acceptance. Upon the satisfactory completion of the Subdivision
Improvements in a Phase of the Subdivision, Developer shall be entitled to obtain preliminary
acceptance thereof by the County (11 Preliminary Acceptance 11 ) in accordance with the following
provisions.
Upon such completion, Developer shall give written notice to the Public Works Engineering
Director requesting an inspection of the completed Subdivision Improvements (11 Preliminary
Inspection Notice"). The County shall inspect the completed Subdivision Impt·ovements within
fourteen days after receipt by the Public Works EJ1gineeri.ng Director of the Preliminary Inspection
Notice and, if the Public Works Engineering Director finds that the specified improvements have
been completed substantially in accordance with the Plans and the other requirements of this
Agreement, the Public Works Engineering Director shall issue a letter evidencing Preliminaiy
Acceptance within fourteen days after the inspection.
If, upon inspection of the completed Subdivision Improvements, the Public Works
Engineering Director finds that the specified improvements have not been completed substantially in
accordance with the Plans and the other requirements of this Agreement, the Public Works
Engineering Director shall issue a written noti.ce of noncompliance within fourteen clays after the
inspection specifying the respects in which the completed Subdivision Improvements have not been
completed substantially in accordance with the Plans and the other requirements of this Agreement.
Developer shall thereupon take such action as is necessary to cure any noncompliance and, upon
curing the same, shall give a new Preliminruy Inspection Notice to the Public Works Engineering
Director. Upon the giving of such anew Preliminary Inspection Notice, the foregoing provisions of
this Section 4.1 shall be applicable as if the new Prelimina1y Inspection Notice were a Preliminal"y
Inspection Notice under the foregoing provisions of this Section 4.1.
4.2 Partial Release of Security. At the time of Prelimina1y Acceptance of completed
Subdivision Improvements, the County shall issue a written release of the cash or letter ofcredit and
the plat restriction provided in Section 3.1. The amount to be released for the completed Subdivision
Improvements shall be the total amount of the cash or letter of credit for each completed Phase.
Prior to release of the cash or letter of credit, cash or an irrevocable letter of credit in the amount of
15% ("Waimnty Security 11
) of the total costs of the Subdivision Improvements for the Phase shall be
delivered to the County by the Developer. The Warranty Security shall remain in effect <luring the
two-year warranty period following Preliminary Acceptance of the completed Subdivision
Improvements for the completed Phase.
4.3 Maintenance Prior to Final Acceptance. Until Final Acceptance by the County of the
Subdivision Improvements, Developer shall, at Developer's expense, mak:e all needed repairs or
replacements to the Subdivision Improvements required on account of defects in materials or
workmanship and shall be responsible for ordina1y repairs and maintenance thereof including street
sanding, snow removal, and cleaning. Subsequent to prelin1inary acceJJta11ce and subject to
accessibility, the Dcpatiment of Public Works Engineering may elect to relieve the Developer of
traffic signage and snow removal responsibility. Specific reductions or releases of responsibility
must be in writing signed by the Public Works Engineering Director .
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4.4 Final Acceptance. At the end of the two-year wmrnnty period for any Phase of the
Subdivision Improvements, Developer shall be entitled to obtain final acceptance thereof by the
Cotmty ("Pinal Acceptance") in accordance with the following provisions.
No later than 60 days prior to the expiration of the warranty period for any Phase of
the Subdivisionlmprovements, Developer shall give written notice to the Public Works Engineering
Director requesting a final inspection of such Phase of the Subdivision Improvements ("Final
Inspection Notice"). The County shall inspect such Phase of the Subdivision Improvements within
fourteen days after receipt by the Public Works Engineering Director of the Final Inspection Notice
and, if the Public Works Engineering Director finds that the Phase of the Subdivision In1provements
is substantially free of defects in materials and workmanship and has been repaired and maintained
as and to the extent required in this Agreement, the Public Works Engineering Director shall issue a
letter evidencing Final Accepta11ce of the Phase of the Subdivision Improvements.
If, upon final inspection of a Phase of the Subdivision Improvements, the Public
Works Engineering Director finds that the Phase of the Subdivision Imprnvements is not
substantially free of defects in materials and wotkmanship or has not been repaired and maintained
as required under this Agreement, the Public Works Engineering Director shall issue a written notice
ofnoncompliance within fourteen days after the final inspection specifying the respects in which the
Subdivision Improvements are not substantially free of defects in materials and wodcmanship or
have not been repaired and maintained as required under this Agreement. Developer shall thereupon
take such action as is necessary to cure any noncompliance and, upon curing the same, shall give a
new Final Inspection Notice to the Public Works Engineering Director. Upon the givi11g of such new
Final Inspection Notice, the foregofog provisions of this Section 4.4 shall be applicable as if the new
Final Tnspectioh Notice were a Final Inspection Notice under the foregoing pmvisions of this Section
4.4.
At the time of Pinal Acceptance of the Subdivision Improvements for a Phase in the
Subdivision, Developer shall be entitled to a telease of the Warranty Security for that Phase. The
release shall be in writing, signed by the Public Works Engineering Director.
Upon Final Acceptance of a Phase of the Subdivision Improvements, the County shall
assume full responsibility for repairs and maintenance of the Subdivision Improvements as would
normally be the responsibility of the County by law.
Prior to Final Acceptance of all of the Subdivision Improvements, "as constrncted"
engineering drawings shall be submitted to the County in accordance with County policy.
V. DEFAULTS AND REMEDIES
5 .1 Default by Developer. A default by Developer shall exist after notice and hearing and
an opportunity to cure as hereinafter provided if (a) Developer fails to construct the Subdivision
Improvements in substantial compliance with the Plans and the other requirements of this
Agreement; (b) Developer fails to complete construction of the Subdivision Improvements by the
Completion Date provided herein as the same may be extended; (c) Developer foils to cure any
noncompliance specified in any written notice of noncompliance within a reasonable time after
receipt of the notice of noncompliance; (cl) Developer otherwise breaches or fails to comply with any
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obligation of Developer under this Agreement; (e) Developer becomes insolvent, files a voluntary
petition in bankruptcy, is adjudicated a bankrupt pursuant to an involuntmy petition in bm1.kruptcy, or
a receiver is appointed for Developer; (:f) Developer fails lo maintain in full force and effect a letter
of credit in the amounts specified in this Agreement. Notice of default as to any Phase of the
Subdivision Improvements must be given prior to expiration of the wairnnty period for such Phase of
the Subdivision Improvements as hereinafter provided.
5.2 Notice and Hearing. In the event a default by Developer is believed to exist, the
County shall give written notice thereof to Developer, specifying the default and setting a dati;i for
hearing before the Board of County Commissioners to determine the existence of the default. The
hearing shall be no less than fourteen days after the receipt by Developer of the 11.otice of default
from County. Within 30 days after such hcadng, the Board of County Commissioners shall
determine whether or not a default exists and, if so, shall specify a reasonable time within which
Developer shall be required to cure the default.
5 .3 Remedies of County. If the Board of County Commissioners, after notice and hearing
as aforesaid, determines that a default by Developer exists, and if Developer fails to cure such default
within the time specified by the Board of County Commissioners, the County shall be entitled to (a)
make a dtaw on the letter of credit for the amount reasonably detemlined by the County to be
necessary to cw·e the default in a manner consistent with the approved Plans up to the face amount of
the letter of credit; and (b) sue the Developer for recovery of any amount necessary to cure the
default over and above the amount available under the letter of credit.
5 .4 County Right to Complete Subdivision Improvements. The right of the County to
complete or cause completion of the Subdivision Improvements as hereinabove provided shall
include the following rights. The County shall have the right to complete the Subdivision
Improvements, in substantial accordance with the Plans, the estimated construction costs, and other
requirements of this Agreement, either itself or by contract with a third party or by assignment ofits
rights to a successor developer who has acquired the Subdivision by purchase, foreclosure, or
otherwise. The County, any contractor under the County, or any such successor developer, their
agents, subconh·actors and employees shall have the non-exclusive right to enter upon the streets and
easements shown on the final plat of the Subdivision and upon any part of the Subdivision owned by
Developer for the purpose of completing the Subdivision Improvements.
5.5 Use of Funds by County. Any funds obtained by County in cash or under a letter of
credit, or recovered by the County from Developer by suit or otherwise, shall be used by the County
to pay lhe costs of completion of the Subdivision Improvements substantially in accordance with the
Plans and the other requirements of this Agreement and to pay the reasonable costs and expenses of
the County in connection with the default by Developer, including reasonable attorneys' fees, with
the surplus, if any, to be returned to Developer.
5 .6 Protection of.Im1ocent Purchasers. The cash or letter of credit furnished to the County
under this Agreement is designed to assure completion of the Subdivision Improvements and to
protect lhe County from bearing the cost of completing the Subdivision Improvements. Accordingly,
the County shall have recourse only in the cash or under the letter of credit and against the Developer
and the successors and assigns of Developer in its capacity as developer ofthe Subdivision and shall
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~@DOUGLAS COVat!!X
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not have recourse against third paiiies who pmchase lots or acquire interests in the Subdivision other
than those who acquire lots or interests as a successor or assignee of Developer in its capacity as
developer of the Subuivision.
VI. MISCELLANEOUS.
6.1 Indemnification. Developer shall indemnify and save harmless the County from any
and all suits, actions, claims, judgments, obligations, or liabilities of every nature and description
which arise from an event or occunence prior to the date of Final Acceptance and which are caused
by, arise from, or on account of the construction and installation of the Subdivision Improvements;
and any and all suits, actions, claims, or judgments which arise from an event or occurrence prior to
the date of the Final Acceptance and which are asserted by or on behalf of contractors or
subcontractors working in the Subdivision, lot owners in the Subdivision, or third parties claiming
injuries resul!ing from defective improvements constructed by Developer. This indemnification shall
not apply to claims arising from the negligent acts or omissions of County. Developer shalJ pay any
and all judgments rendered against the County on account of any such suit, action, or claim, together
with all reasonable expenses and attorneys' fees incmred by the County in defending such suit,
action, or claim. The County shall, within fifteen days after being served with any such claim, suit,
or action, notify the Developer ofits reliance upon this ilidemnification and provide Developer with
a copy of all documents pertainh1g to the claim or cause of action. The Developer may provide
proper legal representation for the County in said action, in which case the Developer shall not be
responsible for any additional legal foes incm1'ed by the Cmmty. The County agrees that the
Developer may also, on its own behalf, become a party to any such action mid the County agrees to
execute any documents as may be necessary to allow the Developer to be a party. The Developer is
not an agent 01· employee of the County.
6.2 Insurance. Developer shall require that all contractors engaged in the construction of
the Subdivision Improvements maintain worker's compensation insurance. Before proceeding with
the construction of improvements, Developer shall provide the Public Works Engineel'ing Director
with written evidence of property damage insurance and bodily injury insurmtce in an amount ofnot
less than Six Hundred Thousand Dollars each, or such other maximum amount ofliability as may be
specified in the Colorado Governmental Immunity Act, and protectit1g the County against any and all
claims for damages to persons or property resulting from construction and/or installation of any
Subdivision Improvements pursuant to this Agteement. The policy shall provide that the County
shall be notified at least thirty days in advance of any reductio11 in coverage, termination, or
cancellation of the policy. Such notice shall be sent by certified mail to the Public Works
Engineering Director, return receipt requested. Developer agrees that any contractors engaged by or
for Developer to construct the Improvements shall maintain public liability coverage in limits not
. less than those descdbed above.
6.3 No Third Pnrty Beneficiaries. Except as herein provided, no person or entity, other
than a party to this Agreement, shall have m1y right of action under this Agreement including, but not
limited to, lenders, lot or home buyers and materialmen, laborers or others providing work, services,
• or materials for the Subdivision Tmprnvemcnts .
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6.4 Assigµability. Subject to the provisions of SectionJ.1 above, Developer may convey
or transfer title or interests in the Subdivision without the consent of the County and a grantee or
transferee of Developer shall not be obligated to fulfill any of the obligations of Developer under this
Agreement unless such grantee or transferee is the successor or assignee of Developer in its capacity
as developer of the Subdivision. Developer may assign its rights and obligations under this
Agreement to a party who is the successor or assignee of Developer in its capacity as developer of
the Sulxlivision without the consent of the County; provided, however, that (a) Developer notifies
the Counly of the assignment and of the name and address of the successor developer; m1d (b) the
successor Developer assumes the obligations of Developer under this Agreement. Unless otherwise
agreed by County , Developer shall remain liable for perfonnance of the obligations of Developer
under this Agreement. The County shall release the cash or a letter of credit furnished by Developer
if lhe County accepts new security from any successor Developer of the Subdivision.
6.5 No Automatic Ftnther Approvals. Execution of this Agreement by the County shall
not be construed as a representation or Warranty that Developer is entitled to any other approvals
required from the Counly, if any, before Developer is entitled to commence development of the
Subdivision or to transfor ownership of property in the Subdivision.
6.6 Notices. All notices, consents or other instrnments or communications provided for
under th.is Agreement shall be in writing, signed by the pmty giving the same, and shall be deemed
properly given and received (a) when actually delivered and received personally, by messenger
service, or by fax or telecopy delivery; (b) on the next business day after deposit for delivery in an
overnight courier service such as Federal Express; or (c) three business days after deposit in the
United States mail, by registered or certified mail with return re<.:eipt requested. All such notices or
other instruments shall be transmitted with delivery or postage charges prepaid, addressed to the
pa1iy at the address below for that party or to such other address as such party may designate by
written notice to the other patty:
If to Developer:
Ifto Coun1.y:
Englewood McLellan Reservoir Foundation, __ _
(Name)
1000 Englewood Parkway, Englewood, CO 80110
Attn: President
(Address)
(Phone)
Department of Public Works Engineering
Attn: Public Works Engince1fog Director
100 Third Sh·eet
Castle Rock, CO 80104
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6. 7 Further Assurances. At any time, and from time to time, upon request ofeithei' party,
the other party agrees to make, execute and deliver or cause to be made, executed and delivered to
the requesting pmiy any and all further instruments, ce1tificates and documents consistent with the
provisions of this Agl'eement as may, in the reasonable opinion of the requesting party, be necessary
or desirable fo order to effectuate, complete or perfect the right of the parties under this Agreement.
6.8 Binding Effect. Subject to Section 6.4 above, this Agreement shall nm with the land
and be binding upon and inure to the benefit ofthe parties hereto and their respective successors and
assigns.
6.9 Headings for Convenience. All headings and captions used herein are for
convenience only and are of no meaning in the interpretation or effect of this Agreement.
6.10 No Implied Waivers. The failure by a party to enforce any provision of this
Agreement or the waiver of any specific requirement of this Agreement shall not be construed as a
general waiver of this Agteement or any provision herein nor shall such action act to est op the party
from subsequently e11forcing this Agreement according to its terms.
6.11 Severability. If any provisio11 of this Agreement is declared by a court of competent
jmisdiction to be invalid, it shail not affect the vaiidity of this Agreement as a whole or any pati
thereof other than the pmt declared to be invalid and there shall be substituted for the affected
provision, a valid and enforceable prnvision as similar as possible to the affected provision.
6.12 No Waiver of Sovernign Immunity. Nothing contained in this Agreement shall
constitute a waiver of the sovereign immunity of the County under applicable state law.
6.13 Consent to Jurisdiction and Venue . Personal jurisdiction and venue for any civil
action conm1enced by either party to this Agreement with respect to this Agreement or a letter of
credit shall be proper only if such action is commenced in the District Court for Douglas County,
Colorado. Developer expressly waive~ the right to bring such action in or to remove such action to
any other comt, whether state or federal.
6.14 Force Majeure. Neither party shall be liable for failure to perform hereunder if suc11
failure is the result of Force Majeure and any time limit expressed in this Agreement shall be
extended for the period of any delay resulting from any Force Majeure. "Force Mi3;jeure" shall mean
causes beyond the reasonable control of a pmty such as, but not limited to, weather conditions, acts
of God, strikes, work stoppages, unavailability of or delay in receiving labor oi-materials, faults by
contractors, subcontractors, utility companies or third parties, fire or other casualty, or action of
government authorities.
6.15 Entire Agreement. This Agteement, and any agreement or document referred to
herein, constitutes the entire understanding between the parties with respect to the subject matter
hereof and all other prior underslandings or agreements shall be deemed merged in this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and
year first above written.
Name of Developer:
_ Englewoo~ an Reservoir Foundation, a Colorado Non Profit Corporation_
BY: ( ,
TITLE: lfi e -4-s: ; o(,,,_,;/
DATE: sdok ___ /_,_._~/~-----
STATE OF COLORADO
COUNTY OF ~(L /Ufl(_ ) ss.
. fh /J, . +
The foregoing instrum.ent was acknowledged before me this /L-day of 0{Ad& {W
20 J.5_, by f< I f._ K /<µ tf fY} .
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l)f.,,,JS ,· /II tJ •• -f-(Name of Officer) rnglv (..u.!::: 0 () ///LL ,.ell& 1l
as J/1 Le I J, vf<-RU,.,/ of R..;;f u1r//0/, /-c.nu.,c/cr-f1v,-,1 .
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LINDA
TRUJILLO
·•.. . ... ·•.. ..•·
(Qffice) (Name of Developer)
Witness my hand and officia~al. , b-
My co1nmission expires: {Ct.17/.2,t_.{ /!,, ~ Ji,{!/
Notaryublic
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BOARD OF COUNTY COMMISSIONERS:
COUNTY OF DOUGLAS
~/
DO ~SJ. DEBORD
County Manager
DATE: l'/Y/IJ-
APPROVED AS TO FISCAL CONTENT:
• Director of Finance
DA TE:, _ ___;;;;__s.a/4..;.....;'/7._,_·~c..=...:'.:5_· __
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APPROVED AS TO LEGAL FORl\11:
Assistant County Attorney
DATE:_-.:..+-/ /2~Ji,~1/;.!..-=1/_:)~-----1 7
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EXHIBIT A
Engineer
SIA -Opinion of Probable Construction Cost
For
HIGHLANDS RANCH FILING 157, LOT 2
SP2015-008
ITEM NO. DESCRIPTION QUANTITY UNIT UNIT COST TOTAL COST
Roadway
1 Asphalt Pavement 20,81"1 SF $ 3.00 $ 62.433.45
2 Concrete Curb & Gutter 1,365 LF $ 12.00 $ 16,301.11
3 Concrete Cross Pan 1,144 SF $ 9.00 $ 10,295.10
4 Concrete Sldewalk 2,671 SF $ 3.00 $ 8,012.25
6 Handicap Ramp Single 6 EA $ 600.00 $ 3,600 .00
7 Handicap/No ParklngfStop Sign 1 EA $ 200.00 $ 200.00
6 Pavement Markin9 Paint 10 GAL $ 100.00 $ 1,000.00
Subtotal -Roadway $ 101,921.91
Storm Sewer
1 18" RCP 10 LF $ 60 .00 $ 600.00
2 42"RCP 434 LF $ 100.00 $ 43,400.00
3 48"RCP 134,74 LF $ 110.00 $ 14,821.40
4 5' Manhole with Gra tad Lid (1 0'+) 1 EA $ 8,000.00 $ 8,000.00
5 5' Manhole (10'+) 1 EA $ 8,000 .00 $ 8,000.00
7 Box Base Manhole {10+) 2 EA $ 10,000.00 $ 20,000 .00
Subtotal -Storm Sewer $ 94,821.40 • Total Improvements $ 196,743.31
1 S% Warranty $ 29,611.50
Grand Total $ 226,254.80
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EXHIBIT A
Engineer
SIA -Opinion of Probable Construction Cost
For
HIGHLANDS RANCH FILING 157, LOT 2
SP2015-008
ITEM NO, DESCRIPTION QUANTITY UNIT UNITCOST TOTALCOST
Water Main
1
2
3
4
6
7
12" PVC
12" Ga te Valve
45d -Bend
22 .5d • Bend
11 .25d -Bend
Connect lo Exis ti ng
Subtotal -Water Main
Sanitary Sewer .
2
O"PVC
5' Manhole (10'+)
Subtotal• Sanitary Sewor
Total Improvements
15% Wa rranty
Grand Total
1,127
4
1
3
2
1
640
5
LF
EA
EA
EA
EA
EA
LF
EA
$ 50.00 $ 56,347.50
$ 4,000.00 $ 16,000.00
$ 70.00 $ 70.00
$ 70.00 s 210.00
$ 70.00 $ 140.00
$ 5,000.00 $ 5,000.00
$
$ 77,767.50
$ 40.00 $ 25 ,585.60
$ 8 ,000 .00 $ 40 ,000 .00
$ 65,585.60
$ 143 ,353.10
$ 21 ,502,97
$ 164,856.07
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EXHIBIT E-1
SUBDIVISION IMPROVEMENT AGREEEMENT ASSIGNMENT
SEE ATTACHED
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ASSIGNMENT OF SUBDMSION IMPROVEMENT AGREEMENT
THIS ASSIGNMENT OF SUBDIVISION IMPROVEMENT AGREEMENT
("Assignment"), is made effective as of the __ day of _____ ~ 2016, by and between
Englewood/McLellan Reservoir Foundation, a Colorado non-profit corporation ("EMRF" or
"Assignor"), and Solana Lucent Station LLC, a Delaware limited liability company
("Assignee").
Recitals:
A. EMRF, as "Developer", and the BOARD OF COUNTY COMMISSIONERS OF
DOUGLAS COUNTY, Colorado ("County") entered into that certain Subdivision Improvement
Agreement dated August 20, 2015, ( the "Subdivision Agreement")
B. Concurrently with the execution of this Assignment, Assignee, as Tenant, and
EMRF, as Landlord, have entered into that certain Ground Lease dated effective as of January 1,
2016 ("Ground Lease") pursuant to which Assignee intends to develop the Premises described in
the Ground Lease for a multifamily residential development, all as more particularly in the
Ground Lease.
C. Assignor desires to assign to Assignee, all of its rights and obligations as the
Developer under the Subdivision Agreement, and Assignee agrees to accept such assignment on
the terms and conditions set forth in this Assignment.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Assignor hereby grants, assigns, transfers, conveys and delivers to Assignee the
Subdivision Agreement and all of Assignor's rights and obligations thereunder, and Assignee
hereby accepts such Assignment and agrees to perform all of Assignor's obligations as the
Developer under the Subdivision Agreement not yet performed.
2. Assignee hereby agrees to indemnify, protect, defend (with counsel chosen by
Assignor) and hold harmless Assignor from and against any and all liability, loss, cost, damage or
expense (including, without limitation, reasonable attorneys' fees) which Assignor may incur
under the Subdivision Agreement and from any and all claims and demands whatsoever which
may be asserted against Assignor by reason of any alleged obligation or undertaking on its part,
to perform or discharge any of the terms, covenants or agreements contained therein, which
claims or demands arise from events occurring before and after the effective date of this
Assignment.
3. By acceptance of this Assignment, Assignee hereby assumes and agrees to
perform and to be bound by all of the terms, covenants, conditions and obligations imposed upon
or assumed by Assignor under the Subdivision Agreement.
• 4. This Assignment may be executed in counterpaiis, each of which shall be
deemed an original, but all of which, together, shall constitute one and the same instrument.
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5. This Assignment shall be binding upon and inure to the benefit of the successors,
assigns, personal representatives, heirs and legatees of the respective parties hereto.
6. In the event of the bringing of any action or suit by a party hereto against another
party hereunder by reason of any breach of any of the covenants, conditions, agreements or
provisions on the part of the other party arising out of this Assignment, then, in that event, the
prevailing party shall be entitled to have and recover of and from the other party all costs and
expenses of the action or suit, including reasonable attorneys' fees.
7. This Assignment shall be governed by, interpreted under, and construed in
accordance with the laws of the State of Colorado.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first written above .
ASSIGNOR:
ENGLEWOOD/MCLELLAN RESEVOIR
FOUNDATION, a Colorado non-profit
corporation
By: -., ~~~--
Name: -...U~~Q~..D~J:::!1:~~--
Title: --..ll..:.....:.=....c....>.-""""-'__,,"'-'.-______ _
ASSIGNEE:
SOLANA LUCENT STATION LLC,
a Delaware limited liability company
By: Solana Lucent Holdings LLC,
· a Delaware limited liability company,
its Manager
By: RP Solana Lucent Station Investors
LLC, a Delaware limited liability
company, its Manager
By: ReyLenn Properties LLC,
a California limited liability company,
Manager
~
Name: ~ ~ ~
Title: tj;lNtt=,e>t
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To: Bank of the Ozarks
8201 Preston Road
Suite 700
Dallas, Texas 75225
Attn: Brannon Hamblen
ESTOPPEL CERTIFICATE
WCP Solana Lucent Investor, LLC
c/o Parse Capital, LLC
6710 East Camelback, Suite 100
Scottsdale, Arizona 85251
Attention: Matthew Borgeson
Re: Ground Lease between Englewood/McLellan Reservoir Foundation, as Landlord
and Solana Lucent Station LLC, as Tenant dated effective as of January 1, 2016
Gentlemen:
The undersigned landlord (the "Landlord"), hereby certifies to Bank of the Ozarks (the
"Bank") and WCP Solana Lucent Investor, LLC ("Investor"), their successor and assigns, as
follows:
1. The ground lease attached hereto (the "Lease") constitutes the entire agreement
between Solana Lucent Station LLC, a Delaware limited liability company ("Tenant") and
Englewood/McLellan Reservoir Foundation ("Landlord") and has not been in any respect
modified, altered or amended except as follows:
2. The Lease has a total initial term of twenty (20) years, commencing effective
Januaryl, 2016 and ending December 31, 2036 (the "Initial Term"). The Initial Term is subject
to extension on the terms and conditions set forth in the Lease.
3. Rent on the Lease has been paid up to and including _______ , 2016; as of
the date of this Certificate, the current monthly rental on the Lease is ________ _
Dollars($ ---~
4. There are no offsets or credits against rentals or other sums payable under the Lease.
Lessee has deposited the sum of _________ Dollars($ ___ ~ with Lessor as a
security deposit.
5. To the best knowledge of Landlord, Tenant is not in any respect in default in the
performance of the terms and provisions of the Lease, nor is there now any fact or condition
which, with notice or the lapse of time or both, will become a default.
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6. Tenant (i) except as provided in the Lease as set forth above does not have any right
to renew or extend the term of this Lease, (ii) does not have any option or preferential right to
purchase all or any pali of the Premises, and (iii) does not have any right, title or interest with
respect to the Premises other than as Tenant under the Lease.
7. Landlord understands that this Certificate is delivered to Bank and Investor in order
to induce Bank and Investor to extend credit to Tenant and that without this Ce1iificate, Bank
and Investor not extend such credit to Tenant.
Dated: _ __,~..............,8 ......... C-'-\t-=--_1..,--='2-_ _,, 2016
99999 9.900012 /2 46343 .0 I
Lease Tab #442 -8/8/00
2
LANDLORD
ENGLEWOOD/MCLELLAN RESEVOIR
FOUNDATION, a Colorado non-profit ::~
Name:~_N
rts: IB:\:.S\t>llit
Mailing address of Landlord:
Englewood/McLellan Reservoir Foundation
1000 Englewood Parkway
Englewood, Colorado 80110
Attention: President
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GROUND LESSOR
CONSENT AND ACKNOWLEDGMENT
This GROUND LESSOR CONSENT AND ACKNOWLEDGMENT (the
"Consent") is made effective as of _______ , 2016, by and between
ENGLEWOOD/MCLELLAN RESERVOIR FOUNDATION, a Colorado non-profit
corporation (the "Landlord"), and WCP SOLANA LUCENT INVESTOR, LLC, a
Delaware limited liability company (the "Investor")
BACKGROUND
A. Landlord and Solana Lucent Station, LLC, a Delaware limited liability
company ("Tenant") have entered into that certain Ground Lease Agreement for the
Premises executed to be effective January 1, 2016 (the "Ground Lease").
B. Tenant is a single member limited liability company with Solana Lucent
Holdings, LLC, a Delaware limited Jiability company as its sole member ("Member").
Member is currently managed by RP Solana Lucent Station, LLC ("RPS"). RPS and
Investor are the sole members of Member.
C. Investor has requested that Landlord treat Investor as if it were a Leasehold
Mortgagee under the Ground Lease and provide Investor with the same notice and cure
rights as a Leasehold Mortgagee under Section 19 of the Ground Lease.
D. Defined terms used in this Consent but not otherwise defined shall have the
meanings given in the Ground Lease.
AGREEMENT
1. Consent to Investor Control of Tenant. Investor has advised Landlord
that upon certain events established in the operating agreement of Member, Investor may
step in and act as the managing member of Member, and to the extent such action
constitutes a change of control of Manager or Tenant under the Ground Lease, this
constitutes Landlord's prior written consent to such change.
2. Investor Right to Cure. Landlord agrees that Investor shall be deemed to
be a Leasehold Mortgagee for the purposes of the Ground Lease and Investor shall have the
same notice and cure rights available to a Leasehold Mortgagee under Section 19 of the
Ground Lease.
3.
4847-1074-7695.3
Notice Address. The notice address for Investor is:
WCP Solana Lucent Investor, LLC
c/o Parse Capital, LLC
6710 East Camelback, Suite 100
Scottsdale, Arizona 85251
Attention: Charles Liang
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With copy to:
Kutak Rock, LLP
8601 N. Scottsdale Road, Suite 300
Scottsdale, AZ 85253
Attention: Arik Michelson, Esq.
4. Effectiveness of Consent. Except as expressly provided in this Consent,
this Consent and the terms, conditions and obligations under this Consent shall remain in
effect for so long as the "Tenant" under the Lease is Solana Lucent Station, LLC, a
Delaware limited liability company.
LANDLORD:
ENGLEWOOD/MCLELLAN
RESERVOIR FOUNDATION, a
Colorado non-profit corporation
~
Name~~@
Title: 7@<~t
4847-1074-7695.3
INVESTOR:
WCP SOLANA LUCENT INVESTOR,
LLC, a Delaware limited liability company
By: ___________ _
Name: ____________ _
Title: ____________ _
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03 /16 12016 3:18:44 PM Commitment ;\'a .: 59 7-F0443268-158-TKA, Amendment No. 19
AFFIDAVIT AND I~DEl\L"ITY AGREEMENT
TO Fidelit)· l\'ational Title Company a Colorado Corporation and Fidelity National Title Insurance Company. a California Corporation.
l. This is written e\'idence to you that there are no unpaid bills. and to the extent there may be unpaid bills, that the undersigned
undertakes and agrees to cause the same to be paid such that there shall be no mechanics or materialmen's liens affecting the property
for materials or labor furnished for construction and erection. repairs or improvements contracted by or on behalf of the undersigned
on property:
legally described as:
See Attached Affida,it and lndemnit)· Agreement Legal Description
Property Address : Lot 2 PA 85 -Ground Lease, Highalnds Ranch, CO
2. \\'e farther represent that to the actual knowledge and belief of the undersigned there are no public improvements affecting the
property prior to the date of closing that would give rise to a special property tax assessment against the property after the date of
closing.
3 . \Ve further represent that to the actual knowledge and belief of the undersigned there are no pending proceedings or unsatisfied
judgments of record. in any Court, State, or Federal. nor any tax liens filed or taxes assessed against us which may result in liens, and
that if there are judgments, bankmptcies, probate proceedings, state or federal tax liens of record against parties with same or similar
names, that they arc not against us.
4. We further represent that there are no unrecorded contracts, leases, easements, or other agreements or interests relating to said
premises of which we have knowledge.
5. We further represent that to the actual knowledge and belief of the undersigned we are in sole possession of the real property
described herein other than leasehold estates reflected as recorded items under the subject commitment for title insurance.
6. We further represent that there are no unpaid charges and assessments that could result in a lien in favor of any association of
homeowners which are provided for in any document referred to in Schedule B of Commitment referenced above .
7. We further understand that any payoff figures shmrn on the settlement statement have been supplied to Fidelity National Title
Company as settlement agent by the seller's/borrower's lender and are subject to confirmation upon tender of the payoff to the lender.
If the payoff figures are inaccurate, we hereby agree to immediately pay any shortage(s) that may exist. If applicable as disclosed or
referred to on Schedule A of Commitment referenced above.
The undersigned affiant(s) know the matters herein stated are true and indemnities Fidelity i"iational Title Company, a Colorado
Corporation and Fidelity National Title Insurance Company, a California Corporation against loss, costs, damages and expenses of
every kind incurred by it by reason of its reliance on the statements made herein.
This agreement is executed with and forms a part of the sale and1or financing of the above described premises, and is given in addition
to the conveyance and1or financing of the premises in consideration for the conveyance and'or financing, and forms a complete
agreement by itself for any action thereon.
State of Colorado
County of Douglas
)ss:
SELLER:
TI1e foregoing instrument was acknowledged, subscribed, and sworn to before me on
(SEAL)
Linda Trujillo
Notary Publlo
State of Colorado
Notary ID 20114064461
Expires 10/11/2019
Notary Public
My Commission Expires:
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