HomeMy WebLinkAbout2023 Resolution No. 0081
RESOLUTION NO. 08
SERIES OF 2023
A RESOLUTION SUPPORTING AN AGREEMENT BY THE
ENGLEWOOD MCLELLAN RESERVOIR FOUNDATION (EMRF)
FOR THE LEASE OF A PORTION OF THE MCLELLAN
PROPERTY TO INTEGRITY MOTORS LTD.
WHEREAS, Ordinance 41, Series of 1999 established the creation of the
Englewood McLellan Reservoir Foundation (EMRF) to oversee the development of
property, to enhance and diversify the City’s long-term revenues, and to protect the water
supply in and around McLellan Reservoir; and
WHEREAS, Integrity Motors Ltd. submitted a Letter of Intent on May 20, 2022,
to lease approximately 6.179 acres of the EMRF property; and
WHEREAS, negotiations have been completed, based on the terms of the Letter
of Intent, whereby Integrity Motors Ltd. has agreed to lease the property, with a future
option to purchase as outlined:
• A lease term of 20 years, with extensions up to 80 years;
• An initial net annual lease rate of $98,915.00 during construction;
• An annual lease rate of $197,830 (“Base Rent”) following completion of
construction;
• Rate increases based on market rate following the first anniversary of the Base
Rent start date; and
• The right of first refusal to purchase the property through the term of the Lease
and as required by applicable law; and
WHEREAS, the EMRF Board of Directors seeks a Resolution of Support from
the Englewood City Council for a Ground Lease to Integrity Motors Ltd.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF ENGLEWOOD, COLORADO, THAT:
Section 1. The City Council of the City of Englewood, Colorado, hereby
supports a Ground Lease Agreement between the Englewood/McLellan Reservoir
Foundation and Integrity Motors Ltd. in substantially the same form as the “Ground
Lease” attached as Exhibit A.
Section 2. The Mayor, Mayor Pro Tem (in the Mayor’s absence), and/or City
staff are hereby granted the authority to take all actions necessary to implement the
provisions of Section 1 above.
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ADOPTED AND APPROVED this 21st day of February, 2023.
Othoniel Sierra, Mayor
ATTEST:
Stephanie Carlile, City Clerk
I, Stephanie Carlile, City Clerk for the City of Englewood, Colorado, hereby
certify the above is a true copy of Resolution No. 08, Series of 2023.
Stephanie Carlile
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F&W 2/13/23
GROUND LEASE
This GROUND LEASE (the “Lease”) is made as of the ____ day of ______, 202__, by
and between ENGLEWOOD/MCLELLAN RESERVOIR FOUNDATION, a Colorado
nonprofit corporation ("Landlord"), and INTEGRITY MOTORS LTD., a Colorado limited
liability company ("Tenant"). The date this Lease is executed by both parties hereto shall be
referred to hereinafter as the “Effective Date.”
W I T N E S S E T H :
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:
Article 1
Fundamental Lease Terms
For convenience, this Article 1 summarizes certain fundamental economic and business
terms of this Lease.
Effective Date: The date this Lease is executed by both parties.
Premises: That certain real property described on Exhibit A attached
hereto and incorporated herein by this reference, consisting of
approximately 6.179 acres located at the NE corner of C-470
and Lucent Blvd., Douglas County, Colorado.
The location of the Premises is shown on Exhibit A-2 (“Site
Plan”)
Landlord ENGLEWOOD/MCLELLAN RESERVOIR FOUNDATION, a
Colorado nonprofit corporation
1000 Englewood Parkway
Englewood, Colorado 80110
Attention: President
Tenant Integrity Motor Ltd.
6060 S. Broadway
Littleton, Colorado 80121
Attention: Michael McDonald and Patrick Hutchinson
Possession Date:
Initial Term:
On the Construction Rent Start Date
20 years starting on the Possession Date
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Option: Eight (8) renewal option of ten (10) years each.
Rent: Annual amount of $98,915.00, as Construction Rent, payable
monthly and commencing as provided in Article 4.
Annual amount of $197,830.00 as Base Rent commencing as
provided in Article 4, increased two and 40/100th percent
(2.40%) each year following the first anniversary of the Base
Rent Start Date and continuing each year thereafter until the
end of the fifth (5th) Lease Year following the Base Rent Start
Date. Thereafter the Rent shall be adjusted as provided in
Article 4.
This is a Net Lease.
Article 2
Ground Lease of Premises
1. Definitions. For purposes of this Lease, the following terms shall have the
following meanings:
A. “Adjustment Date” shall have the meaning set forth in Article 4.3.D.
B. "Assessments" shall have the meaning set forth in Article 20.1.K.
C. “Base Rent” shall have the meaning set forth in Article 4.2.
D. “Base Rent Start Date” shall have the meaning set forth in Article 4.1
E. "Buildings" shall mean the buildings which may be constructed by the
Tenant on the Premises.
F. "Casualty" shall have the meaning set forth in Article p12.1.
G. “Construction Rent Start Date” shall have the meaning set forth in
Article 3.1.
H. "Default" or "Event of Default" shall have the meaning set forth in
Article 14.1.
I. “Default Rate” shall mean interest accruing at the rate equal to the Prime
Rate plus three percent (3%), 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 prime 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..
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J. "Effective Date" shall mean the date this Lease is executed by both
parties.
K. “Environmental Law” shall have the meaning set forth in Article 20.1.J.
L. "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; pandemic, government or court orders, inability to procure or general
shortage of labor, equipment, facilities, materials or supplies in the open market; failure
of transportation; strikes; lockouts; any material delay caused by Landlord without fault
of Tenant; or any delays due to causes beyond the control of Landlord or Tenant and
without its fault or negligence. However, in no event shall any payment due hereunder
be delayed as a result of an Excusable Delay after the Construction Rent Start Date
unless expressly otherwise provided under this Lease.
M. “Extension Option” shall have the meaning set forth in Article 3.2
N. "Improvements" shall mean the Buildings and any other improvements
constructed on the Premises.
O. “Initial Term” shall mean the period specifically described in Article
3.1.
P. "Landlord" is Englewood/McLellan Reservoir Foundation.
Q. "Leasehold Mortgage" shall have the meaning set forth in Article 19.1.
R. “Lease Year” shall have the meaning set forth in Article 3.1.
S. "Memorandum of Lease" shall have the meaning set forth in Article
18.2.
T. “Monetary Default” shall have the meaning set forth in Article 14.1.
U. “Non-Monetary Default” shall have the meaning set forth in Article
14.1.
V. “Permitted Exceptions” shall have the meaning set forth in Article 2.3.
W. "Premises" shall have the meaning set forth in Article 1.
X. “Possession Date” shall have the meaning set forth in Article 1.
Y. "Real Estate Taxes" shall mean 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
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lawful authority, as finally determined in accordance with law, net of any applicable
abatements, refunds, or rebates..
Z. "Rent" shall mean the amount set forth in Article 4.
AA. "Tenant" is Integrity Motors Ltd. and its permitted successors or assigns.
BB. “Term” is the Initial Lease Term and the term of any Extension Option
timely exercised by the Tenant.
CC. “Title Commitment shall have the meaning set forth in Article 2.3.H
DD. “Title Company” shall mean Fidelity National Title Insurance Company.
2. Premises.
A. 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 the Premises,
upon the following terms, stipulations, provisions, and conditions.
B. 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 Permitted Exceptions.
3. Title Policy. Prior to the execution of this Lease, Landlord has delivered to Tenant
a title commitment for a leasehold title policy covering the Premises (the “Title Commitment”)
issued by the Title Company, with said commitment to insure, subject to the requirements and
exceptions set forth therein, a leasehold estate in the Premises in Tenant. Tenant acknowledges
and agrees that it has reviewed and approved the exceptions to title set forth on Exhibit B , as
well as any and all other matters affecting all or any portion of the Premises disclosed by the
Title Commitment; all such exceptions and other matter are herein referred to as the “Permitted
Exceptions”. Landlord shall not create, consent to or permit further covenants, conditions,
easements, encumbrances or restrictions against the title to the Premises (“Encumbrances”)
without Tenant’s prior written consent; provided, however, Tenant shall not unreasonably
withhold, condition or delay such consent if the proposed Encumbrance shall not unreasonably
impact the Tenant’s current or potential future use or improvement of the Premises as reasonably
determined by Tenant. Landlord shall cause the Title Company to issue to Tenant an ALTA
leasehold title insurance policy insuring Tenant’s leasehold estate in the Premises, in accordance
with the terms of the Title Commitment issued to Tenant. The policy shall be in an amount to
take into account the improvements to be constructed; however, Tenant shall pay the incremental
cost of the premium reflecting the improvements to be constructed. Tenant shall cooperate with
Landlord in obtaining the Leasehold title insurance policy and, if requested by Tenant, a
simultaneous issuance of a Lender’s Policy for Tenant’s mortgagee, in an amount to take into
account the improvements to be constructed. Landlord shall pay the base premium for the
leasehold title insurance policy, and Tenant shall pay the incremental premium relating to the
improvements to be constructed, for any endorsements and for any Lender’s title insurance
policy.
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4. 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.
5. Improvements. Tenant, at its sole cost and expense, with its own forces or those
of its contractors, may construct, alter, demolish, and reconstruct Improvements on the Premises
during the Lease Term, as it determines in its sole discretion. All of the Improvements shall
comply in all respects with all applicable governmental requirements.
6. Easements. Landlord and Tenant agree, upon the reasonable request of either
party to this Lease, the applicable governmental agency, or a public utility, to execute documents
which are reasonably required to create utility easements, temporary construction easements, or
other easements required to construct 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. Each
party will undertake to obtain the consent of its mortgagee, if any, to any easements required
under this paragraph.
7. Possession. Landlord shall deliver possession of the Premises to Tenant on the
Construction Rent Start Date.
8. Signage. Tenant shall have the right, at Tenant’s expense, to erect and use pylons
or monument signs on the Premises to the extent permitted by applicable government ordinances,
rules and regulations.
9. Letter of Intent. The Landlord and Tenant acknowledge and agree that the Letter
of Intent between Landlord and Tenant dated May 20, 2022, shall terminate on the Possession
Date.
Article 3
Lease Term
1. Term. The lease term and delivery of possession shall commence on the
Construction Rent Start Date, as further confirmed in a commencement date letter exchanged
between Landlord and Tenant in the form attached hereto as Exhibit C, and shall expire at 11:59
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p.m. on the date twenty (20) years later (“Initial Term”). For purposes of this Lease, the term
“Lease Year” shall mean each full twelve (12) month period beginning on the first day of the
Initial Term, whereby the last day of any Lease Year shall be the last day of the twelfth month
after the Construction Rent Start Date; however. the parties further acknowledge that if the
period from the commencement of the Initial Term to December 31 of that calendar year is only
a partial Lease Year, any obligation payable by Tenant or to be performed by Tenant on a Lease
Year basis shall be pro-rated or adjusted for this partial Lease Year as applicable. Extension
Options. Tenant shall have an option to extend the lease term for an additional ten (10) years
(“First Extension Option”). If the First Extension Option is exercised, Tenant shall have an
option to extend the lease for seven (7) additional consecutive terms, each consisting of ten (10)
years (each an “Extension Option” or collectively the “Extension Options”). The First
Extension Option and each additional Extension Option shall be on the same terms and
conditions as set forth herein (there shall be no options beyond the options granted in this Article
3.2), except the Base Rent shall be adjusted as provided in Article 4. Tenant shall have the right
to exercise its options by providing Landlord written notice exercising its option to extend not
less than one ninety (90) days nor more than one (1) year prior to the expiration of the then
current term. As a condition of Tenant’s right to exercise one or more Extension Options, at the
time of the giving of its notice of exercise, and the commencement of the applicable option
period, there shall be no uncured Event of Default.
Article 4
Rent
1. Construction Rent. Tenant shall pay to Landlord, in United States Dollars, rent
(“Construction Rent”) in the annual amount of $98,915, payable monthly in the amount of
$8,242.92. Construction Rent shall be payable in equal monthly installments, commencing on
the Construction Rent Start Date, and continuing until the “Base Rent Start Date, as hereinafter
defined. The “Base Rent Start Date” shall be the earlier of (i) the date a Certificate of
Occupancy is issued, or (ii) the first day following the end of eighteen (18) months after the
Construction Rent Start Date. Construction Rent shall be payable in advance on the first day of
each calendar month, with appropriate proration for any partial calendar month, at the address
given for notices to Landlord in Article 18.2.
2. Base Rent. Beginning on the Base Rent Start Date, Tenant shall pay to Landlord,
in United States Dollars, Base Rent in the annual amount of $197,830, payable monthly in the
amount of $16,485.83. 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 Article 18.2, as such address may be changed in
accordance with Article 18. The Base Rent shall be adjusted annually as provided in Paragraph 3
of this Article 4.
3. Rent Adjustments.
A. Base Rent shall increase by two and 40/100th percent (2.40%) each
Lease Year following the first anniversary of the Base Rent Start Date, and continuing
each Lease Year thereafter. At the end of every 5th year, the Base Rent shall be adjusted
in accordance with the CPI Index as described in subparagraph B of this Paragraph 3,
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or, upon timely written election by either the Landlord or Tenant, adjusted based on an
appraisal as provided in subparagraph C of this Paragraph 3.
B. Subject to the option for an adjustment as provided in subparagraph C of
this Paragraph 3, beginning the first month of the 6th Lease Year following the Base
Rent Start date, and the first day of the month every five (5) Lease Years thereafter
during the Initial Term, and on the commencement of the First Extension Option and
the first day of the month every five (5) Lease Years thereafter during the First
Extension Option and any additional Extension Options (“Adjustment Date”), the
Base Rent shall be adjusted by an amount equal to the total percentage increase or
decrease in the CPI Index (as defined below) which has occurred from the first month
of the first year of the applicable five (5) year period (“Base Year”) to the month prior
to the applicable Adjustment Date; provided, however, the maximum increase to the
Base Rent as of the Base Year over the applicable 5-year period will not exceed
nineteen percent (19%) and the minimum increase to the Base Rent as of the Base Year
over the applicable 5-year period will not be less than six and 18/100th percent
(6.18%). Example scenarios:
• CPI increased (cumulatively) by 15% from the first month of year 1 to the last
month of year 5, the Base Rent for year 6 would equal to $197,830, multiplied
by 1.15, equaling a Base Rent of $227,504.50, payable in equal monthly
installments.
• CPI increased (cumulatively) by 9% from the first month of year 1 to the last
month of year 5, the Base Rent for year 6 would equal to $197,830, multiplied
by 1.09, equaling a Base Rent of $215,634.70, payable in equal monthly
installments.
• CPI increased (cumulatively) by 25% from the first month of year 1 to the last
month of year 5, the Base Rent for year 6 would equal to $197,830, multiplied
by 1.19, equaling a Base Rent of $235,417.70, payable in equal monthly
installments.
• CPI increased (cumulatively) by 4% from the first month of year 1 to the last
month of year 5, the Base Rent for year 6 would equal to $197,830, multiplied
by 1.0618, equaling a Base Rent of $210,055.90, payable in equal monthly
installments.
• CPI increased (cumulatively) by 15% from the first month of year 6 to the last
month of year 10, assuming a Base Rent of $227,504.50 in year 6, the Base
Rent for year 11 would equal to $227,504.50, multiplied by 1.15, equaling a
Base Rent of $261,630.18, payable in equal monthly installments.
The Base Year for the first Adjustment Date shall be the year of the Base Rent Start
Date. Each Base Year thereafter will be the first year of the applicable five (5) year
period in which the Adjustment Date is measured, and the Base Rent subject to
adjustment shall be the Base Rent as of the Base Year of the applicable five (5) year
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period in which the Adjustment Date is measured. Following each Adjustment Date,
the Base Rent shall increase two and 40/100ths percent (2.40%) each Lease year
thereafter until the next Adjustment Date.
C. In lieu of the adjustment to the Rent on any Adjustment Date based on
the CPI Index as set forth in subparagraph B of this Paragraph 3, upon written notice to
the other party (“FMV Election Notice”), either Landlord or Tenant shall have the
option to cause the Base Rent adjustment for the applicable Adjustment Date to be
determined in accordance with an appraisal of the fair market value of the unimproved
land as of the Adjustment Date, multiplied by the average “capitalization rate”, each
determined in accordance with the same procedure as set forth in the subparagraph D of
this Paragraph 3 (hereinafter a “FMV Adjustment”). This option shall be exercised by
Landlord or Tenant giving the other an FMV Election Notice no earlier than ninety (90)
days prior to the Adjustment Date and no later than the Adjustment Date. If neither
party timely provides an FMV Election Notice, the option to cause the Base Rent to be
adjusted based on the fair market value of the unimproved land shall be waived for the
applicable Adjustment Date, and the Base Rent adjustment shall be made in accordance
with subparagraph B of this Paragraph 3 above. For clarification, as provided in
subparagraph B of this Paragraph 3, following each Adjustment Date, the Base Rent
shall increase two and 40/100ths percent (2.40%) each year thereafter until the next
Adjustment Date, accordingly, upon completion of FMV Adjustment, the annual two
and 40/100ths percent (2.40%) increase and the Base Rent adjustment described in
subparagraph B of this Paragraph 3, shall be measured moving forward from the new
Base Rent resulting from the FMV Adjustment.
D. Beginning the first day of the seventieth (70th) Lease Year, the Base
Rent shall be adjusted based on the average “capitalization rate” for commercial ground
lease property located in Douglas County, Colorado, multiplied by the fair market value
as of the first day of the seventieth (70th) Lease Year, as more particularly described
below. The fair market value shall be determined by appraisal of the Premises as
unimproved real estate by an MAI commercial real estate appraiser with at least ten
(10) years commercial real estate appraisal experience in the Douglas County, Colorado
submarket, mutually selected by Landlord and Tenant. The annual Base Rent as of the
first day of the seventieth (70th) Lease Year shall then be the appraised fair market
value of the Premises (as determined by the appraiser described above) multiplied by a
capitalization rate (determined by the appraiser selected above, as a percentage) equal
to the average capitalization rate for commercial ground lease property located in
Douglas County, Colorado for ground leases made during the prior twelve (12) month
period. If the appraiser selected is unwilling to establish the average capitalization rate,
the capitalization rate shall be determined by a commercial real estate broker mutually
selected by the Landlord and Tenant with at least ten (10) years commercial real estate
brokerage experience in the Douglas County, Colorado submarket, that works for one
of the six (6) largest commercial brokerage firms in Colorado. The cost of the
appraiser, and if necessary the broker, shall be paid equally by Landlord and Tenant.
Thereafter, the Base Rent shall be subject to an annual and 5-year adjustments as
provided in subparagraph B of this Paragraph 3. In the event the parties are unable to
mutually agree upon either a real estate appraiser or commercial real estate broker as
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required by this section within twenty (20) days of written notice by either Landlord or
Tenant (“Initial Deadline”), the Landlord and Tenant shall each select an appraiser or
broker, as applicable, and provide notice of appointment of the appraisers/brokers (as
applicable) in writing and delivered to the other party within twenty (20) days after
expiration of the Initial Deadline. The two (2) appraisers/brokers shall promptly select
a third appraiser/broker (the “Third Appraiser/Broker”). The Third Appraiser/
Broker, as applicable, shall be the party charged with making the appraisal or
establishing the capitalization rate, as applicable.
E. As use herein, the CPI Index shall mean:
i The Consumer Price Index for all Urban Consumers, Denver-
Aurora-Lakewood Area - All Items Index (CPI-U, 1982-84 equals 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 shall be the CPI Index number published for the month prior to the
applicable Adjustment Date.
ii. If the CPI Index is discontinued, the CPI Index adjustment shall be
made using comparable statistics on the cost of living for the Denver 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 and approved by Tenant, such approval not be
unreasonably withheld or delayed.
4. Net Lease. This Lease is a net lease. All costs incurred in connection with the
construction, operation, maintenance and leasing of the Improvements and all costs incurred in
connection with and in relation to the Premises shall be 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.
Article 5
Taxes
1. Real Estate Taxes.
A. 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 property or items that
accrue during the Term of this Lease. 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 of this Lease.
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 execute any form of agreement,
authorization, or other documents as may be necessary in connection therewith.
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B. In the event the Premises are now included in a larger tax parcel owned
by Landlord, Landlord shall take such actions as may be necessary to make the
Premises a separate Tax Parcel. Tenant shall cooperate with Landlord in such action.
C. 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 may prepay or 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 of this Lease,
based upon the maximum number of installments in which the same may be paid. In the
event of any proposed special assessment would provide for payment extending beyond
the Term of this Lease (excluding and extension period), 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.
D. Landlord shall cooperate with Tenant so that all invoices for Real Estate
Taxes shall be sent directly by the taxing authority to Tenant.
E. 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.
2. 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. Personal
Property Taxes. Tenant shall pay all taxes charged against trade fixtures, furnishings, equipment
or any other personal property belonging to Tenant. 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.
Article 6
Utilities
1. Utility Usage. 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 electric, gas, water, sewage, or telephone service to the
Premises or to the adjoining property owned by Landlord.
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Article 7
Use, Subletting, and Assignment
1. Use. Tenant may use and occupy the Premises during the Term of the Lease for
all lawful uses in accordance with the requirements of this Lease.
2. Assignment and Subletting.
A. Prior to completion of the Improvements, Tenant shall have the right to
sublet all or any part of the Premises or assign this Lease only upon Landlord's prior
written consent which shall not be unreasonably withheld. Following completion of the
Improvements, and provided Tenant is not in default hereunder, Tenant shall have the
right to sublease or assign this Lease for any lawful purpose without Landlord’s consent.
B. In the event Tenant assigns or transfers its interest in this Lease as
permitted hereunder, Tenant shall remain liable under this Lease. However, in the event
the assignee or transferee (i) assumes and agrees to pay and perform all of the Tenant’s
obligations under this Lease, pursuant to an assumption agreement reasonably approved
by Landlord, (ii) is a new vehicle dealer approved by a major new vehicle manufacturer,
and (iii) has net liquid assets equal to the next ten (10) years of Base Rent, the Tenant
assigning or transferring the Lease shall be fully released from any liability arising from
and after such assignment or transfer.
C. Any assignment or subletting shall be effective only upon delivery to
Landlord of an instrument effecting an assignment or subletting of this Lease by Tenant,
executed by Tenant and the assignee or sublessee. 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.
Article 8
Right of First Refusal; Right of First Offer
1. General Provisions. Landlord’s sale of the Premises at any time during the
Lease Term shall be subject to the right of first refusal for the benefit of Tenant set forth in this
Article 8; provided, however, that Tenant’s rights under this Article 8 shall not apply during any
period in which Tenant is in Default under this Lease. For purposes of this Article, the terms
“purchase,” “sell” and “sale” shall be construed to mean any bone fide purchase and sale
transaction in which Landlord intends to or transfers or conveys the Premises (or any portion
thereof) in exchange for cash, seller financing, other real property or other non-cash
consideration. The sale, transfer or other disposition of fifty percent (50%) or more of the
ownership interest in the Landlord shall be deemed a “sale” of the Premises, triggering the
Tenant’s rights under this Article. Notwithstanding any other provisions of this Article, the
provisions hereof shall not apply to any sale, transfer or other conveyance of the Premises (or
any portion thereof) by Landlord to any person or entity which controls, is controlled by or is
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under common control with Landlord, or to any agency or authority controlled by the City of
Englewood, Colorado or the City of Englewood itself; provided, however, any subsequent sale,
except for a sale to a person or entity controlled by or under common control of the City of
Englewood, to the City of Englewood, shall be subject to the right of first refusal for the benefit
of Tenant set forth in this Article 8.
2. Right of First Refusal. If, at any time during the Lease Term, Landlord receives
and wishes to accept a bona fide written offer from a person or entity other than Tenant (the
“Offeror”) to purchase the Premises, and if Tenant is not then in Default under this Lease,
Landlord shall give written notice of such offer to Tenant, specifying the material terms on
which the Offeror proposes to purchase the Premises, together with a copy of said written offer,
and shall offer to Tenant the opportunity to purchase the Premises on the terms set forth in the
prospective purchaser’s written offer accompanying Tenant’s notice. For purposes of this
Article, an offer shall be considered bona fide if it is contained in a letter of intent or other
writing signed by the Offeror and specifies the material terms of such proposed purchase. Tenant
shall have twenty (20) business days after the date of giving of such notice by Landlord in which
to accept such offer by written notice to Landlord for an amount equal to the amount set forth in
the written offer tendered to and acceptable to Landlord. Upon such acceptance by Tenant, the
Premises shall be sold to Tenant on the terms set forth in Landlord’s notice, and the parties shall
promptly execute an agreement containing the terms of Landlord’s said notice and such other
reasonable and customary terms as the parties shall agree. If Tenant does not accept Landlord’s
offer within the allotted time, Landlord shall thereafter have the right to sell the Premises to the
Offeror, at any time within one hundred eighty (180) days after Tenant’s failure to accept
Landlord’s offer, at a price and on other terms and conditions not materially more favorable to
the Offeror than the price and other terms of the original offer specified in Landlord’s said
notice. If Tenant does not accept Landlord’s offer and Landlord does not sell the Premises to the
Offeror within one hundred eighty (180) days, this right of first refusal shall reattach to the
Premises.
3. Right of First Offer. In addition to the Right of First Refusal provided above,
Landlord grants to Tenant a right of first offer (“Right of First Offer”) to purchase the Premises
during the term of this Lease, on the following terms and conditions:
A. If Landlord determines to sell, assign, or otherwise transfer the Premises
(or any portion thereof) during the Term, then the Landlord must first notify Tenant and
furnish to Tenant, in writing, the following terms upon which Landlord will offer the
Premises to Tenant (the “Notice”): (i) the price the Premises will be marketed; (ii) the
amount of any deposit required; (iii) whether the Landlord will provide and pay for title
insurance; and (iv) the commercially reasonable time to close upon the purchase of the
Premises (items (i) through (iv) above shall collectively be referred to as “Terms”).
Tenant shall have an absolute first, prior and irrevocable right to acquire the portion of
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the Premises being transferred on the Terms, which it may exercise by giving written
notice of acceptance to the Landlord within twenty (20) business days after receipt of that
Notice and the Terms; provided, however, Landlord may market the Premises during
such twenty (20) business day period, provided the Premises shall remain subject to the
terms of this Right of First Offer.
B. Within twenty (20) business days after Tenant gives notice of its
acceptance of the Right of First Offer, if any, Tenant and Landlord shall enter into a
written contract on such Terms or the Counteroffer (defined below) terms, as applicable
(the “First Offer Contract”); however, executing such a contract shall not be a
prerequisite to either party’s enforcement of the right of this Right of First Offer. Tenant
may propose an offer to Landlord for the purchase of the Premises upon terms different
from the Terms stated above (“Counteroffer”); however, Landlord shall not be obligated
to accept such Counteroffer. Notwithstanding the rejection of Tenant’s Counteroffer,
upon the expiration of the twenty (20) business day acceptance period, the Right of First
Offer shall automatically terminate and be of no further effect. Landlord shall not enter
into a contract to sell any portion of the Premises to any person or entity unless and until
Landlord receives Tenant’s written waiver or the expiration or termination of this Right
of First Offer. Title to the Premises shall be subject only to the Permitted Exceptions.
C. Landlord shall not work in bad faith to circumvent the intent of the Right
of First Offer through multi-step related transactions which combined together would
trigger this Right of First Offer, and any such multi-step related transactions shall trigger
this Right of First Offer.
D. If Landlord does not receive Tenant’s notice of acceptance of the Right of
First Offer within the twenty (20) business day period, Landlord shall be free to market
the Premises and thereafter sell the Premises on terms substantially similar to Terms, not
less than 10% below the purchase price provided in the Terms. Any contract for sale or
sale made for an amount less than ten percent (10%) below the purchase price provided
in the Terms shall be subject to the Right of First Refusal terms provided above in
Paragraph A. Notwithstanding the preceding sentence to the contrary, Landlord may
resubmit the Terms to Tenant, with or without new terms at any time, in which event the
twenty (20) business day period shall begin again.
3. Compliance Required. Any attempted transfer not in compliance with the
provisions of this Article shall be null and void, and Tenant also shall have all remedies available
to Tenant at law or in equity, including, without limitation, injunctive relief to halt or enjoin, or
to set aside any such sale or transfer.
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Article 9
Mechanics Liens
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, and Tenant shall keep the Premises free of liens 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 38-22-131, 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 to 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.
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 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 any notices which Landlord may deem necessary for
the protection of Landlord and it interest in the Premises and the improvements thereon from
mechanics’ liens or other claims.
Article 10
Indemnity
1. Indemnity. From and after the Effective Date and continuing at all times
thereafter during the Term hereof: Tenant assumes all risk of loss, 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 arising from or related to Improvements, Buildings and contents or 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 or otherwise arising from the
Tenant’s use or occupancy of the Premises.
B. 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 Tenant, or any of Tenant’s subtenants, 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
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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 or Guarantor.
C. Tenant hereby indemnifies and saves harmless Landlord and any of its
officers, members, contractors and agents from any and all claims, losses, damages, or
expenses, on account of injuries to or death of any and all persons whomsoever arising
from or related to the use or occupancy of the Premises, and any and all loss or
destruction of or damage to any real or personal property adjacent to the Premises,
caused by Tenant or any of its employees, managers, members, officers, contractors,
subcontractors, materialmen, suppliers, workmen, laborers, subtenants, renters,
licensees, servants or agents.
D. The foregoing indemnities shall not apply to any injuries, death, claims,
losses, damages and expenses to the extent arising as a result of any negligence or
intentional acts, or other unlawful misconduct of, Landlord or its officers, employees,
contractors or agents.
E. Landlord hereby indemnifies and saves harmless Tenant, to the extent
permitted by law, 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
subtenants, arising from the negligence or intentional acts, or other unlawful
misconduct of Landlord, its officers, employees, or agents.
2. Appear and Defend. 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 Paragraph 1 of this
Article 10.
Article 11
Insurance
1. Property Damage. During the period of construction, 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 and all option periods, Tenant shall keep in
full force and effect a policy of all risk, special form or equivalent form property insurance
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covering loss or damage to the Premises in the amount of the full replacement cost of the
Building and other improvements on the Property, in an amount at least equal to the hard costs of
construction, with a deductible that is commercially reasonable in light of Tenant’s financial
strength, naming Tenant’s Leasehold Mortgagee, if any, as a loss payee.
2. Liability Insurance. During the Term, Tenant shall keep in full force commercial
general liability insurance or garage liability insurance (collectively, “CGL”), with bodily injury
and property damage coverage with respect to the Premises and business operated by Tenant, which
shall name Landlord and, at Landlord’s written request, Landlord's first Mortgagee as additional
insureds as their respective interests may appear. 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 deductible
that is commercially reasonable in light of Tenant’s financial strength. 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 three (3) year period, to a commercially prudent and reasonable amount,
based upon the then current general liability insurance conditions prevailing in the metropolitan
Denver market.
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.
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.
5. Form of Policies. All insurance required by this Article 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. During the last two lease years of
any extension following the expiration of the First Extension Option, all property insurance
maintained by Tenant pursuant to Paragraph 1 of this Article 11 shall name Tenant as insured and
Landlord as additional insured, as their interests may appear in accordance with Article 12.3, and, so
long as the Premises are mortgaged pursuant to a mortgage of which Tenant has received written
notice, shall be subject to a standard mortgagee clause in favor of Landlord’s first mortgagee. All
insurance maintained by Tenant pursuant to Paragraph 2 of this Article 11 shall name Tenant as
insured and Landlord as additional insured, as their interests may appear, and, so long as the
Premises are mortgaged pursuant to a mortgage of which Tenant has received written notice, shall
be subject to a standard mortgagee clause in favor of Landlord’s first mortgagee.
6. Policy Provisions. All policies of insurance enumerated above shall be provided by
insurance carriers having at policy commencement a Best rating of not less than A- VIII; 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- VIII 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 11.
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7. Waiver of Right of Recovery and Subrogation. With respect to any loss covered by
insurance or required to be covered by 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
carriers.
8. Evidence of Insurance. On or before the Effective Date, Tenant shall cause to be
issued to Landlord certificates of insurance evidencing compliance with the applicable covenants of
this Article 11. Each such certificate shall provide that at least thirty (30) days' notice of
cancellation shall be given to the certificate holder.
Article 12
Damage or Destruction
1. Tenant’s Option to Repair or Rebuild. If the Premises or any of the Improvements
are damaged or destroyed during the Initial Term or First Extension Option by a fire or other
casualty (“Casualty”), this Lease shall continue in effect, and Tenant shall continue to pay the
Rent without abatement. Tenant shall remove and dispose of all hazardous materials in
accordance with applicable legal requirements and take such action as may be required under
applicable municipal ordinances and other laws, rules and regulations with respect to any
damage or destruction of the Tenant's Improvements. Tenant shall not have any obligation to
repair and/or rebuild the Tenant's Improvements damaged by fire or other casualty or cause.
Tenant shall promptly provide a sightly barrier and shall remove all debris from the damaged
portion of the Tenant's Improvements and use diligent efforts to place the Premises in an orderly
and safe condition. Tenant shall retain any excess insurance proceeds.
In the event only a portion of any Tenant Improvement is damaged and the remaining
portion is functional, and Tenant elects not to repair or replace the damaged portion, Tenant shall
remove the damaged portion and repair or replace the remaining portion to a condition as much
as practical consistent with the condition existing prior to the damage.
2. Tenant’s Election to Repair or Rebuild. In the event Tenant elects to repair and/or
rebuild the Improvements, if the cost of such repair or restoration shall be less than the
insurance proceeds paid as a result of the Casualty, Tenant shall be entitled to retain the balance
of such proceeds to the extent not required to be applied to any Leasehold Mortgage. Tenant
shall complete all work promptly after the occurrence of the Casualty. 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.
3. Last Two Years of Extension Period. In the event a Casualty occurs during the
last two lease years of any Extension Option in which at least seventy percent (70%) of the
square footage of the Improvements are substantially unusable (“Significant Casualty”), and if
Tenant elects not to repair and/or rebuild and gives written notice to Landlord within one
hundred twenty (120) days of the date of the Casualty of such election, then Landlord shall have
the option, exercised by written notice to Tenant on or before the earlier of (a) one hundred
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twenty (120) days following written notice from Tenant of its election not to repair and/or
rebuild, or (b) two hundred forty (240) days following the date of the Casualty, to (i) continue
the Lease to the end of the then current term, in which case there shall be no abatement of rent,
and the insurance proceeds shall be paid to Tenant except to the extent required to payoff and
discharge any Leasehold Mortgage, or (ii) to terminate the Lease effective as of one hundred
twenty (120) days following the date of the Casualty, in which case the insurance proceeds shall
be paid to Tenant except to the extent required to payoff and discharge any Leasehold Mortgage
or as otherwise provided in this Section 3. Promptly following the Casualty, Tenant shall
promptly provide a sightly barrier and shall remove and dispose of all hazardous materials in
accordance with applicable legal requirements, take such action as may be required under
applicable municipal ordinances and other laws, rules and regulations with respect to any
damage or destruction of the Tenant's Improvements, and shall use diligent efforts to place the
Premises in an orderly, clean and safe condition. If Tenant does not elect to repair and/or
rebuild, if requested by Landlord, Tenant at its sole expense (using any insurance proceeds to
the extent applicable) shall remove and raze the portion of the Premises which is damaged,
remove and dispose of all hazardous materials in accordance with applicable legal requirements,
and, at Landlord’s election, fill and grade the Premises in a safe, clean and sightly manner as
existed on the Effective Date, or seed such portion of the Premises as designated by Landlord.
Any remaining insurance proceeds shall then be used to pay off and discharge any Leasehold
Mortgage, and the balance, if any, shall be paid to Tenant. In the event Landlord enters into a
subordination agreement with Tenant’s leasehold mortgagee, notwithstanding any provision in
the agreement to the contrary, in no event shall the right of Landlord or Tenant to use insurance
proceeds to remove and raze the damaged portion or remove and dispose of hazardous materials
be deemed subordinated to the rights of such leasehold mortgagee.
Article 13
Eminent Domain
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 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 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 so much of the Premises or the rights
appurtenant thereto as, when taken, leaves the untaken portion unsuitable in Tenant’s reasonable
opinion for the continued feasible and economic operation of the Premises by Tenant for the
same purposes as immediately prior to such Taking or as contemplated herein.
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 Lease 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.
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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, effective as of the Date of
Taking, and Tenant shall make all necessary restorations to the Improvements so that the
portions of the Improvements not taken constitute a complete architectural unit, and the proceeds
of the award attributable to the value of the Improvements Taken shall be retained by Tenant. If
any Taking has a material impact on Tenant's ability to conduct business as reasonably
determined by Tenant, which the parties agree reasonably includes but is not limited to, a loss of
use of more than ten percent (10%) of vehicle parking or storage, the need to construct/alter any
improvements that cost $250,000 or more, or the taking of more than ten percent (10%) of the
square footage of the Improvements, this Lease shall terminate at Tenant's option, such option to
be exercised by Tenant giving not less than thirty (30) days' prior written notice to Landlord,
such notice to be given not more than ninety (90) days after Tenant’s receipt of notice of the
impending Taking.
4. Rights Upon Temporary 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. 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 Article 13.4 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
Articles 13.2 and 13.3 above, as applicable.
5. Award. The award paid by the condemning authority shall be allocated as
follows:
B. First to the Landlord in an amount equal to the value of the Premises (on
the basis of unimproved land not encumbered by this Lease)
C. Next to the Tenant in an amount equal to the value of the Tenant's
leasehold interest and Improvements, subject to the rights of any Leasehold Mortgagee.
If this Lease is not terminated, the award for the cost of restoring the Improvements
shall be payable to Tenant, subject to the rights of any Leasehold Mortgagee.
D. Any other award permitted by law shall be payable to Landlord and
Tenant as their respective interests may appear.
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 by power of
condemnation and to make full proof of their claims. Tenant shall have the sole right to control
the defense, prosecution and settlement of its claim to the extent the condemnation proceeding or
negotiation affects Tenant's leasehold interest hereunder and/or the Improvements, subject to the
consent of any Leasehold Mortgagee. Landlord shall have the sole right to control the defense,
prosecution and settlement of its claim to the extent the condemnation proceeding or negotiation
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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 condemnation.
Article 14
Default
1. Events of Tenant's Default. Any of the following occurrences, conditions or acts
by Tenant shall constitute an "Event of Default" under this Lease:
A. 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 thirty (30) days after receipt of written notice from
Landlord to Tenant specifying such default and demanding that the same be cured
(“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 no event shall
Landlord be required to give more than two notices of a Monetary Default during any
twelve (12) month period, and in the event two such notices have been given, Tenant shall
be in default if any payment is not made when due, no notice shall be required, and interest
shall accrue at the Default Rate from the date such payment was due until paid.
B. 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.
C. Insolvency. Tenant becomes insolvent or transfers property in fraud of
creditors.
D. Assignment for Benefit of Creditors. Tenant makes an assignment for the
benefit of creditors.
E. Receivership. A receiver is appointed for any of Tenant's assets, and such
receiver is not dismissed within sixty (60) days after the date of such filing.
F. 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.
G. Lien. Tenant fails to obtain a release of any lien against the Premises as
required under the terms of this Lease.
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2. Notices and Cure Periods. Upon occurrence of an Event of Default by Tenant,
Landlord shall deliver Tenant a separate/additional written Notice of Default, specifying the
Event of Default in reasonable detail, allowing Tenant a supplemental thirty (30) days to cure the
Event of Default (“Supplemental Cure Period”). If Tenant fails to cure the Event of Default
within such Supplemental Cure Period, then Landlord may seek to enforce the remedies provided
in Article 14.3 of this Lease, including an action to evict Tenant from the Premises. Compliance
with this Article 14.2 by Landlord, and the failure of the Tenant to cure the Event of Default within
the Supplemental Cure Period are conditions precedent to Landlord’s enforcement of any of the
remedies provided in Article 14.3 or otherwise permitted by applicable law.
3. Landlord's Remedies. After the occurrence of an Event of Default by Tenant,
following expiration of the Supplemental 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 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.
A. Monetary Default. In the event of a Monetary Default, and subject to the
foregoing provisions concerning the Supplemental Cure Period:
(i) Continue Lease. Landlord may, at its option, continue this Lease in full
force and effect, without terminating Tenant's right to possession of the Premises, in which
event Landlord shall have the right to collect Base Rent and other charges when due,
including any sums due for any option period for which an extension option has been
exercised, 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 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 notifies
Tenant that Landlord made 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, with or without 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 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 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 monthly, and Landlord
may bring an action or actions therefor as such monthly 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
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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 prior to the date of termination.
(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.
(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. At Tenant’s option, Tenant may
select an additional licensed MAI appraiser to estimate FMR and Tenant’s appraiser and
Landlord’s appraiser shall select a third MAI appraiser to estimate the FMR, in which
case the FMR shall be the median of the three appraisals. Tenant shall bear the cost of
the appraisal process.
As used in this Article 13, Paragraph 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
resume possession of the Premises and, at Tenant’s expense, remove all persons and
property therefrom, by summary dispossession proceedings.
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(iii) 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 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 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.
B. 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.
C. 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
accept less than the then current market rent for the Premises; deviate from its then
established guidelines for tenants including without limitation use, experience, reputation,
and creditworthiness; lease less than all of the Premises; extend the term of this Lease; or
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.
D. 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 movable partitions,
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.
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4. Landlord's Default. In the event Landlord shall at any time be in default in the
observance or performance of any of the covenants and agreements required to be performed and
observed by Landlord hereunder and any such default shall continue for a period of thirty (30)
days after written notice to Landlord (or if such default is incapable of being cured in a
reasonable manner within thirty (30) days and if Landlord has not commenced to cure the same
within said thirty (30) day period and thereafter diligently prosecutes the same to completion),
and Landlord shall not thereafter cure such default, Tenant shall be entitled, at its election, to
bring suit for the collection of any amounts for which Landlord may be in default, or for the
performance of any other covenant or agreement devolving upon Landlord, in addition to all
remedies otherwise provided in this Lease and otherwise available at law or in equity under the
laws of the United States or the State of Colorado.5. 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 attorneys’ fees and expenses incurred in enforcing such obligations and/or
collecting such amounts, from the other party to such action.
6. 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. In the event of a default by Tenant,
nothing contained herein shall preclude, or be deemed a waiver, of Landlord’s right to recover
damages arising from its ownership or operation of the property owned by it adjacent to the
Premises. Article 15
Covenant of Quiet Enjoyment
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, subject to and any additional exceptions created by Tenant or created by
Landlord and approved by Tenant, 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.
Article 16
Subordination; Landlord's Right to Mortgage and Convey Premises
Landlord may mortgage its interest in the Premises, provided such mortgage
expressly provides that the rights and interests of the mortgagee thereunder are subject and
subordinate to the rights and interests of Tenant hereunder and the rights of any Leasehold
Mortgagee under any Leasehold Mortgage then or thereafter existing. Should Landlord sell,
convey, or transfer its interest in the Premises or should any mortgagee of Landlord succeed to
Landlord's interest through foreclosure or deed in lieu thereof, Tenant shall attorn to such
succeeding party as its landlord under this Lease promptly upon any such succession, provided
such succeeding party 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.
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Article 17
Transfers by Landlord
No transfer or sale of Landlord's interest hereunder shall release Landlord from
any of its obligations or duties hereunder prior thereto. Landlord shall be released of any
ongoing obligations hereunder from and after the date of such transfer and only upon the written
agreement by the transferee of Landlord to assume all such obligations and duties.
Article 18
Miscellaneous
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. Recording. This Lease shall not be
recorded. Following the Construction Rent Start Date, 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 D attached hereto and
incorporated herein, describing the Premises and setting forth the Term of this Lease. The
Memorandum of Lease shall be recorded only at the time of, or following, the Construction Start
Date. The recording shall be 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. If Tenant
terminates this Lease, upon request of Landlord, Tenant will execute and deliver to Landlord a
termination of the Memorandum of Lease suitable for recording.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:If to Tenant: Integrity
Motors Ltd.
6060 S. Broadway
Littleton, Colorado 80121
Attention: Michael McDonald and Patrick
Hutchinson
With copies to: Fairfield and Woods
1801 California St. Suite 2600
Denver, Colorado 80202
Attention: Randy Earnest, Esq.
If to Landlord: Englewood/McLellan Reservoir Foundation
1000 Englewood Parkway
Englewood, Colorado 80110
Attention: President
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With copies to: City of Englewood
1000 Englewood Parkway
Englewood, Colorado 80110
Attention: City Attorney
With copies to: Spencer Fane LLP
1700 Lincoln St., Suite 2000
Denver, Colorado 80203
Attention: H. Michael Miller, Esq.
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.
4. Successors and Assigns. All covenants, promises, conditions, representations,
and agreements herein contained shall be binding upon, apply to, and inure to the benefit of the
Parties hereto and their respective heirs, executors, administrators, successors (including
subtenants), and permitted assigns.
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.
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 construction
against the Parties causing this Lease to be drafted.
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.
8. Governing Law. This Lease shall be construed under the laws of the State of
Colorado.
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.
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10. Force 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 has been extended as a result of the Excusable Delay and the details of
such delay.
11. Reasonable Consent. Notwithstanding anything to the contrary contained in this
Lease, in all cases where consent or approval shall be required pursuant to this Lease, the giving
of each consent or approval shall not be unreasonably withheld, delayed or conditioned by the
party from whom such consent is required or requested.
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 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. 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.
13. Estoppel Certificate. Each party agrees, from time to time, within twenty (20)
days following written request from the other party, Landlord, to execute and deliver an estoppel
stating that this Lease is in full force and effect, and if modified or amended, setting forth such
modification or amendment, that no default exists, or if a default, setting forth the same, and such
other factual matters regarding the Lease as may be reasonably requested, provided such estoppel
does not obligate the party to acknowledge or consent to any modifications or interpretations of
this Lease not previously agreed upon by both parties in writing.
14. 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 Paragraph 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 reimburse Landlord and indemnify
Landlord against all damages incurred by Landlord resulting from any delay by Tenant in
surrendering possession of the Premises.
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15. Digital Execution and Counterparts. This Agreement may be executed digitally
and/or in two or more counterparts, all of which shall, upon execution and delivery of identical
counterparts by each party, constitute a single agreement.
Article 19
Leasehold Financing
1. Mortgage by Tenant. Tenant may, at any time and from time to time, without
Landlord’s consent, encumber, hypothecate, mortgage, pledge, or alienate the Improvements
and/or Tenant's leasehold estate and rights hereunder, including as security for payment of any
indebtedness of Tenant to its lender made for the purpose of financing or refinancing the
construction costs of Tenant's improvements to the Premises or the operations of Tenant on the
Premises. Such lien shall be referred to herein as a "Leasehold Mortgage" and the holder or
holders of any such lien 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. A Leasehold Mortgage shall
encumber no interest in the Premises other than Tenant’s interest in the Lease and the
Improvements located on the Premises, including any personal property of Tenant, and any
subleases of portions of the Premises. A Leasehold Mortgagee or its assigns may enforce such
lien 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 to any Leasehold
Mortgagee upon written request therefor, provided such estoppel does not obligate Landlord to
acknowledge or consent to any modifications or interpretations of this Lease not previously
agreed upon by both parties in writing.
2. Notice To and Rights Of Leasehold Mortgagees. When giving notice to Tenant
with respect to any default hereunder, Landlord shall also 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 any Leasehold Mortgagee as herein provided. In the event Tenant shall default 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
period available to Tenant for curing such default or such additional time as may be granted to
any Leasehold Mortgagee herein, to cure or make good, such 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, and Landlord shall accept such performances on the part of any Leasehold
Mortgagee as though the same had been done or performed by Tenant.
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A. In the case of a Monetary Default by Tenant, Landlord will take no action to
effect a termination of this Lease by reason thereof unless such default has continued
beyond forty-five (45) days after Landlord shall have served a copy of such notice
required by Article 14.2 upon Tenant and any Leasehold Mortgagee who has given
Landlord notice as provided above in Article 10.2.A, it being the intent hereof and the
understanding of the parties that any Leasehold Mortgagee shall be allowed not less
than fifteen (15) days in addition to the thirty (30) days granted to Tenant to cure any
Monetary Default of Tenant. In the case of any Non-Monetary Default by Tenant, a
Leasehold Mortgagee shall be allowed, in addition to any grace period granted to
Tenant, an additional time as hereinafter specified to cure such Non-Monetary Default
within which either:
(i) if such default is a monetary default or is otherwise susceptible of
being cured by the Leasehold Mortgagee without obtaining possession of the
Premises, to commence and diligently proceed to cure such Non-Monetary
Default within thirty (30) days following the expiration of any grace period
granted to Tenant, or if such default cannot reasonably be cured within thirty (30)
days, to commence such cure within thirty (30) days following the expiration of
any grace period granted to Tenant and to diligently prosecute the cure to
completion;
(ii) if such default is a non-monetary default and is not susceptible of
being cured by the Leasehold Mortgagee without obtaining possession of the
Premises, to commence proceedings to obtain possession of the Premises within
thirty (30) days following the expiration of any grace period granted to Tenant
and diligently prosecute such action to completion (including possession by a
receiver) and to cure such default within thirty (30) days following possession or
the appointment of a receiver in the case of a default which is susceptible of
being cured within thirty (30) days when the Leasehold Mortgagee has obtained
possession thereof. If such default cannot reasonably be cured within thirty (30)
days following possession or appointment of a receiver, to commence such cure
within thirty (30) days following possession or appointment of a receiver and to
diligently prosecute the cure to completion.
D. In the event that this Lease is terminated by
Landlord on account of any default, Landlord shall give
prompt notice thereof to each Leasehold Mortgagee
who has given notice to be notified. Landlord, within
thirty (30) days after receiving a written request
therefor, which shall be given within sixty (60) days
after delivery of such notice of termination, will
execute and deliver a new lease of the Premises to the
Leasehold Mortgagee or its nominee or to the
purchaser, assignee, or transferee, as the case may be,
for the remainder of the term of this Lease, containing
the same covenants, agreements, terms, provisions, and
limitations as are contained herein, provided that the
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Leasehold Mortgagee shall (i) pay to Landlord,
simultaneously with the delivery of such new lease, all
unpaid rental due under this Lease up to and including
the date of the commencement of the term of such new
lease and all expenses including, without limitation,
reasonable attorneys' fees and disbursements and court
costs incurred by Landlord in connection with the
default by Tenant and the termination and the
preparation of the new lease, and (ii) the Leasehold
Mortgagee shall commence and diligently proceed to
cure all defaults existing under this Lease which are
susceptible to cure.
E. 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 or occasioned by other
circumstances beyond the Leasehold Mortgagee's control.
F. During the period that a Leasehold Mortgagee shall be in possession of the
Premises and/or during the pendency of any foreclosure proceedings instituted by a
Leasehold Mortgagee, the Leasehold Mortgagee shall pay or cause to be paid all
charges of whatsoever nature payable by Tenant hereunder which have been accrued
and are unpaid and which will thereafter accrue during said period. Following the
acquisition of Tenant's leasehold estate by the Leasehold Mortgagee or its designee,
either as a result of foreclosure or acceptance of an assignment in lieu of foreclosure,
the Leasehold Mortgagee or party acquiring title to Tenant's leasehold estate, whereon
Landlord's right to effect a termination of this Lease based upon the default in question
shall be deemed waived. Any default not susceptible of being cured by the Leasehold
Mortgagee or party acquiring title to Tenant's leasehold estate shall be and shall be
deemed to have been waived by Landlord upon completion of the foreclosure
proceedings or acquisition of Tenant's interest in this Lease by any purchaser (who
may, but need not be, the Leasehold Mortgagee) at the foreclosure sale, or who
otherwise acquires Tenant's interest from the Leasehold Mortgagee or by virtue of a
Leasehold Mortgagee's Exercise of its remedies. Any such purchaser, or successor of
purchaser, shall not be liable to perform the obligations imposed on Tenant by this
Lease incurred or accruing after such purchaser or successor no longer has ownership
of the leasehold estate or possession of the Premises.
G. Nothing herein shall preclude Landlord from exercising any of Landlord's
rights or remedies with respect to any other default by Tenant during any period of any
such forbearance, subject to the rights of any Leasehold Mortgagee as herein provided.
H. In the event two or more Leasehold Mortgagees each exercise their rights
hereunder and there is a conflict which renders it impossible to comply with all such
requests, the Leasehold Mortgagee whose leasehold mortgage would be senior in
priority if there were a foreclosure shall prevail. In the event any Leasehold Mortgagee
pays any rental or other sums due hereunder which relate to periods other than during
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its actual ownership of the leasehold estate, such Leasehold Mortgagee shall be
subrogated to any and all rights which may be asserted against Landlord with respect to
such period of time.
I. 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 Trust Deed on the occurrence of a 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.
J. Tenant shall reimburse Landlord any attorneys’ fees or other direct out of
pocket costs incurred in connection with any lease amendments or other documentation
or review in connection with Tenant’s proposed Leasehold Mortgage.
Article 20
Representations of Landlord and Tenant
1. Representations of Landlord. Landlord represents and warrants to Tenant that, as
of the Effective Date:
A. 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 authority to enter
into this Agreement and to perform Landlord’s obligations hereunder.
B. This Agreement (i) has been duly authorized, executed, and delivered by
Landlord; and (ii) is the binding obligation of Landlord;
C. 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.
D. 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.
E. There are no unrecorded easements or rights-of-way affecting any or all
of the Premises granted by Landlord except the sanitary sewer interceptor lines as
previously disclosed by Landlord to Tenant.
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F. No lawsuit has been filed against Landlord regarding the Premises.
G. There are no other leases, agreements or contracts in existence relating
to the Premises, including, without limitation, tenant leases, service contracts, or
management agreements.
H. Landlord has received no notice from any insurance company with
respect to the cancellation of any policy concerning the Premises or refusal of the
insurance company to insure the Premises.
I. There are no oral agreements affecting the Premises.
J. There is no litigation pending with respect to the Premises relating to
any Environmental Law violations. Except as disclosed in writing by Landlord, no notice
of an Environmental Law violation or other written communication has been received by
Landlord 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. §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.
K. There are no agreements, commitments or understandings by or between
Landlord and any third party pursuant to which (i) Landlord agrees to make the Premises
part of any special assessments, special district, or taxing district ("Assessments"), or (ii)
Landlord or its successors in interest are required to sell, grant or dedicate any part of the
Premises or to grant any easement, water rights, rights-of-way, road or license for ingress
and egress or other use in respect to any part of the Premises, whether on account of the
development of adjacent or nearby real property or otherwise. Landlord has no
knowledge of any Assessments being contemplated.
L. Landlord has no knowledge of any fact, condition, or action, present,
contemplated, or threatened, which would or may result in the termination or impairment
of access to and from the Premises as such access presently exists, and Landlord is not in
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violation of any easements, rights-of-way, conditions, covenants and restrictions,
licenses, or other agreements burdening the Premises.
M. Landlord owns the Premises free and clear of any mortgage or deed of
trust.
2. Representations of Tenant. Tenant represents, warrants and covenants to Landlord
that:
A. Tenant's Authority. Tenant is a duly constituted corporation organized
under the laws of the State of Colorado, 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.
B. Tenant's Covenant as to Hazardous or Toxic Materials.
i. Tenant hereby covenants that Tenant shall not cause or by its
activities or conduct 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.
Notwithstanding anything to the contrary, Tenant is not liable for migration of Hazardous
Substances onto the Premises.
ii. 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 asserted 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
preceding subparagraph 2.B.i., and provided that Tenant is not liable for migration of
Hazardous Substances onto the Premises.
iii. 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 of this
Paragraph 16, shall include petroleum products, asbestos, and polychlorinated biphenyls,
and underground storage tanks unless installed, maintained, and closed in compliance
with all applicable laws.
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iv. In the event Hazardous Substances are present on the Premises in
violation of Tenant's covenant in subparagraph 2.B.i hereof, 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. Notwithstanding the foregoing, in no event shall Tenant be afforded
more than two (2) years after the approval of Tenant’s remediation plan by the appropriate
governmental agency or agencies, or any shorter time required for the completion of such
remediation by the agencies in granting such approval, to complete such remediation.
Tenant agrees to commence 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 costs and expenses incurred by Landlord in
the exercise of any such rights, which costs and expenses result from Tenant's violation of
the covenants contained herein, shall be deemed Additional Rent under this Lease and shall
be payable by Tenant upon demand.
v. Landlord represents and warrants to Tenant that, except as may be
disclosed in the Phase 1 environmental report delivered to Tenant prior to the Effective Date
of this Lease, it has no actual knowledge of any violation of any state or federal
environmental laws.
3. Broker. Tenant acknowledges and agrees that it has engaged NAI Shames
Makovsky as its real estate agent in connection with this transaction, and agrees this it shall be
solely responsible for any payment due NAI Shames Makovsky. and agrees to indemnity and
hold Landlord harmless from all damages, claims, liabilities or expenses, including reasonable
and actual attorneys’’ fees resulting from any claim asserted by NAI Shames. Makovsky. Except
for NAI Shames Makovsky, each party hereby warrants and represents that it has not engaged
any other broker or agent in connection with this transaction, and 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.
[Remainder of this page intentionally left blank]
[Signatures on 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 nonprofit corporation
By:
__________________________________
Name
__________________________________
Title
__________________________________
Date
TENANT:
INTEGRITY MOTORS LTD.
a Colorado limited liability company
By:
Michael McDonald, President
_________________________________
Date
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EXHIBIT A
LEGAL DESCRIPTION OF PREMISES
Lot 1A, Highlands Ranch-Filing No. 153, 2nd Amendment, County of Douglas, State of
Colorado
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EXHIBIT A-2
SITE PLAN OF PREMISES
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EXHIBIT B
EXISTING TITLE EXCEPTIONS
1. Water rights, claims or title to water, whether or not disclosed by the Public Records.
2. All taxes and assessments for the year 2022, a lien not yet due or payable.
3. The right of proprietor of a vein or lode to extract or remove his ore should the same be found to penetrate
or intersect the premises thereby granted as reserved in United States patent recorded April 1, 1881 in Book
K at Page 455; and any and all assignments thereof or interest therein.
4. Ordinance No. 25, Series of 1960, recorded October 21, 1960 in Book 134 at Page 115 at Reception No.
109391.
5. Any assessment or lien of Highlands Ranch Metropolitan District No. 3, as disclosed by the instrument
recorded December 30, 1991 in Book 1018 at Page 992 at Reception No. 9141497.
6. Terms, conditions, provisions, agreements and obligations contained in the Grant of Easement recorded
April 10, 1997 in Book 1422 at Page 426 at Reception No. 9718587.
7. Terms, conditions, provisions, agreements and obligations contained in the Grant of Easement recorded
April 10, 1997 in Book 1422 at Page 435 at Reception No. 9718588.
8. Terms, conditions, provisions, agreements and obligations contained in the Ordinance No. 41 recorded
October 26, 1999 in Book 1769 at Page 1868 at Reception No. 90110.
9. An easement for storm drainage and incidental purposes granted to Highlands Ranch Metropolitan District
No. 3 by the instrument recorded December 3, 2007 at Reception No. 2007093247.
10. An easement for underground water line and incidental purposes granted to Centennial and Sanitation
District by the instrument recorded March 5, 2008 at Reception No. 2008015871.
11. Ordinance No. 25, Series 1981, granting easements to Mission Viejo Water and Sanitation District recorded
July 2, 1981 in Book 415 at Page 660 at Reception No. 270566.
12. Terms, conditions, provisions, restrictions and easements dedicated and shown on the plat of Highlands
Ranch-Filing No. 153 recorded March 20, 2009 at Reception No. 2009019129 and Highlands Ranch-Filing
No. 153, 12nd Amendment recorded July 3, 2012 at Reception No. 2012047832.
13. Grant of Right-of-Way Easement to The Board of County Commissioners of The County of Douglas, State
of Colorado recorded December 13, 2005 at Reception No. 2005120153.
14. Grant of Right-of-Way Easement to The Board of County Commissioners of The County of Douglas, State
of Colorado recorded January 24, 2006 at Reception No. 2006006816.
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EXHIBIT C
COMMENCEMENT DATE LETTER
TO: __________________
__________________
__________________
Attn: ____________
(“Landlord”)
FROM: __________________
__________________
__________________
Attn: _____________
(“Tenant”)
RE: Ground Lease dated ___________________, 20_____ (“Lease”) covering the
premises described therein (“Premises”) located at the NE corner of C-470 and
Lucent Blvd., Douglas County, Colorado.
Pursuant to the term of the Lease, Tenant has agreed to provide this Commencement Date Letter
to Landlord to confirm the Possession Date and the Construction Rent Start Date. This
Commencement Date Letter is not in any way intended to modify any of the terms of the Lease.
All capitalized terms not otherwise defined therein shall have the meaning ascribed to them in
the Lease.
1. Lease Term; Extension Option. The Lease Term commenced on ___________, 20___is
presently in force, and, unless Tenant exercises its extension option, will expire on
_______________, 20___. Tenant has eight (8) ten (10) year extension options exercisable
pursuant to the Lease.
2. Rental Commencement Date. Tenant’s obligation to pay Construction Rent under the
Lease commenced on _____________, 20____, which shall be the Construction Rent Start Date.
3. Rental. Commencing on the Construction Rent Start Date, Tenant is obligated to pay
Construction Rent (as defined in the Lease) in the amount of $8,242.92 per month.
4. Amendments. The Lease has not been modified, altered or amended in any
respect, except for (indicate “None” if none)______________________________________.
(signature page to follow)
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The information set forth in this Commencement Date Letter is true and correct as of the date
hereof. This acknowledgment shall be binding upon the successors and assigns of Tenant.
DATED: ________________________ TENANT:
INTEGRITY MOTORS LTD.
a Colorado limited liability company,
By: _____________________________
Michael McDonald, President
________________________________
Date
DATED: ________________________ LANDLORD:
ENGLEWOOD MCLELLAN RESERVOIR
FOUNDATION .
a Colorado nonprofit corporation
By: _____________________________
_______________, President
________________________________
Date
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EXHIBIT D
MEMORANDUM OF LEASE
WHEN RECORDED, RETURN TO:
MEMORANDUM OF LEASE AGREEMENT
This Memorandum of Lease Agreement (this “Memorandum”) is executed as of
_____________, 20____, by and between Englewood McLellan Reservoir Foundation, a
Colorado nonprofit corporation (“Landlord”), and Integrity Motors, Ltd., a Colorado limited
liability company (“Tenant”).
WITNESSETH:
WHEREAS, Landlord and Tenant have entered into a Ground Lease (the “Lease”) dated
__________________, 20____, the terms, provisions and conditions of which are incorporated
herein by reference to the same extent as if recited in their entirety herein, whereby Landlord has
leased to Tenant the premises (the “Premises”) certain real property consisting of approximate
6.179 acres, more or less, located at the northeast corner of Lucent Blvd. and C-470 in Highlands
Ranch, Colorado, said Premises being more particularly described as Lot 1A, Highlands Ranch-
Filing No. 153, 2nd Amendment, County of Douglas, State of Colorado.
Special reference is hereby made to the following terms and provisions of the Lease:
1. Lease Term; Option Term. The term of the Lease (the “Lease Term”) shall be
for a period of two hundred forty (240) full calendar months. The Lease Term shall commence
on the Construction Rent Start Date as more particularly described in the Lease. Tenant is given
the right to extend the Lease Term for eight (8) additional periods of ten (10) years per period,
upon the same terms and conditions as provided in the original term of the Lease, except that rent
shall be as specified in the Lease.
2. Right of First Refusal; Right of First Offer. The Tenant is granted a right of
first refusal to purchase the Premises through the term of the Lease, as it may extended, as more
particularly described in the Lease. Additionally, the Tenant is granted a right of first offer to
purchase the Premises through the term of the Lease, as it may extended, as more particularly
described in the Lease.
3. Miscellaneous. This Memorandum is executed for the purpose of recordation in
the real estate records of the County of Douglas, Colorado, in order to give notice of the terms
and provisions of the Lease and is not intended and shall not be construed to define, limit or
modify the Lease. In the event of a conflict between the terms hereof and the terms of the Lease,
the terms of the Lease shall control. This Memorandum may be executed in counterpart.
(signature page to follow)
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EXECUTED on the date first recited above.
LANDLORD:
ENGLEWOOD/MCLELLAN RESERVOIR
FOUNDATION
a Colorado nonprofit corporation
By:
__________________________________
Name
__________________________________
Title
__________________________________
Date
TENANT:
INTEGRITY MOTORS LTD.
a Colorado limited liability company
By:
Michael McDonald, President
__________________________________
Date
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STATE OF COLORADO )
)ss
COUNTY OF _____________ )
The foregoing instrument was acknowledged before me this _____ day of ________, 20__,
by , as of ENGLEWOOD/MCLELLAN
RESERVOIR FOUNDATION, a Colorado nonprofit corporation.
WITNESS MY HAND AND OFFICIAL SEAL.
Notary Public
My commission expires: .
STATE OF COLORADO )
)ss
COUNTY OF _____________ )
The foregoing instrument was acknowledged before me this _____ day of ________, 20__,
by Michael McDonald, as President of INTEGRITY MOTORS LTD., a Colorado limited
liability company.
WITNESS MY HAND AND OFFICIAL SEAL.
Notary Public
My commission expires: .
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