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HomeMy WebLinkAbout2024-03-18 (Regular) Meeting Agenda Packet Please note: If you have a disability and need auxiliary aids or services, please notify the City of Englewood (303- 762-2405) at least 48 hours in advance of when services are needed. 1000 Englewood Pkwy - Council Chambers Englewood, CO 80110 AGENDA City Council Regular Meeting Monday, March 18, 2024 ♦ 6:00 PM Council Dinner will be available at 5:30 p.m. To view the meeting, please follow this link to our YouTube live stream link: YouTube 1. Study Session Topic a. Representatives from Denver Fire will be present to provide a report regarding fire services in Englewood. 6:00 p.m. to 7:00 p.m. Information Presentation: 30 minutes Discussion: 30 minutes 1a 2. Call to Order 3. Pledge of Allegiance 4. Roll Call 5. Consideration of Minutes of Previous Session a. Minutes of the Regular City Council Meeting of March 4, 2024. 5a documents 6. Appointments, Communications, Proclamations, and Recognition a. Recognition of Stephanie Carlile, for fulfilling the requirements to become an Athenian Fellow of the International Institute of Municipal Clerks (or IIMC) Athenian Leadership Society 7. Recognition of Scheduled Public Comment Public Comment will begin shortly after 7:00 p.m. The deadline to sign up to speak for Scheduled Public Comment is Wednesday by 5 p.m., prior to the meeting, through the City Clerk’s Office. This is an opportunity for the public to address City Council. There is an expectation that the presentation will be conducted in a respectful manner. Council may ask questions for clarification, but there will not be any dialogue. Please limit your presentation to five minutes. Written materials for presentation to Council may be submitted to the City Clerk. a. Marcia McGilley, Executive Director of Aurora-South Metro Small Business Development Center, and Laurie Womer, Associate Director of Aurora-South Metro Small Business Development Center will be present to address Council regarding the Small Business Page 1 of 329 Englewood City Council Regular Agenda March 18, 2024 Please note: If you have a disability and need auxiliary aids or services, please notify the City of Englewood (303- 762-2405) at least 48 hours in advance of when services are needed. Development Center Annual Update. b. Kathleen Bailey, an Englewood resident, will address Council regarding need for actual 25-year rain event capacity infrastructure in the upstream half of the south Englewood Basin. 7b documents c. Chris Cordova will address Council regarding the Standards of Behavior policy. d. Robert Merriman, an Englewood resident, will address Council regarding Movement 5280. e. Lori Merriman, an Englewood resident, will address Council regarding Movement 5280. f. Stephen Sanford, will address Council regarding Movement 5280. g. Tami Fischer, an Englewood resident, will address Council. h. Greg Aden will address Council. i. Tania Diller, an Englewood resident, will address Council. j. Regan Benson, will address Council regarding, when people fear their government. k. Gary Kozacek, an Englewood resident will address Council regarding Judge Jefferson's salary and other issues. l. Nicholas Young, an Englewood resident will address Council regarding City policies and Englewood Police Department's responsibilities to citizens. m. Robert Stocker will address Council. n. Tom Novosad, an Englewood resident, will address Council regarding a flyer left on his doorstep concerning homelessness. o. Ben Olsen, an Englewood resident, will address Council regarding his experience living near Movement 5280. p. Kristen Vitale, an Englewood resident, will address Council regarding the impact of the 5280 Hub on the neighborhood’s well being. 8. Recognition of Unscheduled Public Comment If you would like to sign-up to speak virtually for public comment please visit: Zoom Registration to register or plan to attend the meeting in person. If registering to speak virtually, you will receive a unique and personalized invitation by email to join the meeting. Every speaker who wants to register should sign-up with their own email address. If you do not have an email address or if you have any questions regarding this process, please reach out to the City Clerk's Office at CityClerk@englewoodco.gov or call 303- 762-2430. Citizens may also submit written public comments to the City Clerk's Office at CityClerk@englewoodco.gov until 12 p.m. the day after the meeting. Page 2 of 329 Englewood City Council Regular Agenda March 18, 2024 Please note: If you have a disability and need auxiliary aids or services, please notify the City of Englewood (303- 762-2405) at least 48 hours in advance of when services are needed. This is an opportunity for the public to address City Council. There is an expectation that the presentation will be conducted in a respectful manner. Council may ask questions for clarification, but there will not be any dialogue. Please limit your presentation to 3 minutes. Council Response to Public Comment. 9. Consent Agenda Items a. Approval of Ordinances on First Reading i. CB-7 Intergovernmental Agreement with Adams County Health Department for the Colorado Local Entity Air Network (CLEAN) Program 9ai documents Staff: Sustainability Coordinator Melissa Englund b. Approval of Ordinances on Second Reading. c. Resolutions and Motions i. Resolution of Support for recognition agreement between Englewood McLellan Reservoir Foundation and UC Health 9ci documents Staff: Director Utilities and South Platte Renew, Pieter Van Ry ii. Training Center lease agreement with Broken Tee Partners, LLC, dba MetaGolf Learning Center, at Broken Tee Golf Course 9cii documents Staff: Golf Manager Shannon Buccio 10. Public Hearing Items 11. Ordinances, Resolutions and Motions a. Approval of Ordinances on First Reading b. Approval of Ordinances on Second Reading c. Resolutions and Motions 12. General Discussion a. Mayor's Choice b. Council Members' Choice 13. City Manager’s Report 14. Adjournment Page 3 of 329 STUDY SESSION TO: Mayor and Council FROM: Shawn Lewis DEPARTMENT: City Manager's Office DATE: March 18, 2024 SUBJECT: Denver Fire Update DESCRIPTION: A report from Denver Fire regarding fire services in Englewood. RECOMMENDATION: N/A PREVIOUS COUNCIL ACTION: 2015: Englewood City Council approves a 20-year agreement with the City of Denver to provide fire and ambulance services in Englewood. SUMMARY: Denver Fire provides fire suppression services to the City of Englewood by contract. This update is at the request of the City Council and will cover calls and response times, strengths and successes, challenges, threats, opportunities, and time for City Council to ask questions. ANALYSIS: The City of Englewood entered into the Denver Fire contract in 2015 as pension liabilities and costs of operating a standalone fire service continued to increase. At the time, the contract was estimated to save Englewood $17,855,406 (see attached 2015 Council Communication analysis), while providing residents in the northeast and far west portions of the city with better fire protection as a result of proximity of existing Denver fire stations to those portions of the city. Denver Fire has provided services to the City of Englewood with very few complaints or concerns from residents save a period during the "Great Resignation" in 2022 when the Denver 911 center was short-staffed and some residents complained of unacceptable wait times as calls were transferred from Englewood 911 to Denver 911. A detailed presentation is attached outlining response times, strengths, weaknesses, opportunities and threats as requested by Council and the City Manager's Office. COUNCIL ACTION REQUESTED: N/A FINANCIAL IMPLICATIONS: Denver Fire Services are a fixed cost annually with an automatic 3% increase. Page 4 of 329 CONNECTION TO STRATEGIC PLAN: Public Safety Services: Invest in high-quality policing and other public safety services Responding to Emergencies: Effectively prepares for and responds to emergencies ATTACHMENTS: Denver Fire Contract 2015 Denver Fire-City of Englewood Council Communication Power Point Presentation Page 5 of 329 Page 6 of 329 Page 7 of 329 Page 8 of 329 Page 9 of 329 Page 10 of 329 Page 11 of 329 Page 12 of 329 Page 13 of 329 Page 14 of 329 Page 15 of 329 Page 16 of 329 Page 17 of 329 Page 18 of 329 Page 19 of 329 Page 20 of 329 Page 21 of 329 Page 22 of 329 Page 23 of 329 Page 24 of 329 Page 25 of 329 Page 26 of 329 Page 27 of 329 Page 28 of 329 Page 29 of 329 Page 30 of 329 Page 31 of 329 Page 32 of 329 Page 33 of 329 Page 34 of 329 Page 35 of 329 Page 36 of 329 Page 37 of 329 Page 38 of 329 Page 39 of 329 Page 40 of 329 Page 41 of 329 Page 42 of 329 Page 43 of 329 Page 44 of 329 Page 45 of 329 Page 46 of 329 Page 47 of 329 Page 48 of 329 Page 49 of 329 Page 50 of 329 Page 51 of 329 Page 52 of 329 Page 53 of 329 Page 54 of 329 Page 55 of 329 Page 56 of 329 Page 57 of 329 Page 58 of 329 Page 59 of 329 Page 60 of 329 Page 61 of 329 Page 62 of 329 Page 63 of 329 Page 64 of 329 Page 65 of 329 Page 66 of 329 Page 67 of 329 Page 68 of 329 Page 69 of 329 Page 70 of 329 Page 71 of 329 Page 72 of 329 Page 73 of 329 Page 74 of 329 Page 75 of 329 Page 76 of 329 Page 77 of 329 Page 78 of 329 Page 79 of 329 Page 80 of 329 Page 81 of 329 Page 82 of 329 Page 83 of 329 Page 84 of 329 Page 85 of 329 Page 86 of 329 Page 87 of 329 Page 88 of 329 Page 89 of 329 Page 90 of 329 Page 91 of 329 Page 92 of 329 Page 93 of 329 Page 94 of 329 Page 95 of 329 Page 96 of 329 Page 97 of 329 Page 98 of 329 Page 99 of 329 Page 100 of 329 Page 101 of 329 Page 102 of 329 Page 103 of 329 Page 104 of 329 Page 105 of 329 Page 106 of 329 Page 107 of 329 Page 108 of 329 Page 109 of 329 • COUNCIL COMMUNICATION Date: May 4, 2015 Agenda Item: Subject: Intergovernmental Agreement 11 a ii for Fire/EMS service with Denver Fire Initiated By: City Manager's Office Staff Source: Eric A. Keck, City Manager COUNCIL GOAL AND PREVIOUS COUNCIL ACTION The issue of how to provide Fire and EMS service within the community in the most responsible, efficacious, and financially sustainable manner has been studied by the Englewood City Council for several years. The Council has entertained a variety of different alternatives including a proposed merger with the City of Littleton and the Littleton Fire/Rescue Department. In early 2014, the City Council obtained a proposal from the South Metro Fire Rescue Authority as well as a proposal from Denver Fire. In September of 2014, the City Council held a number of study sessions to examine the topic of fire service delivery. Comment from the membership of the Englewood Fire/Rescue Department was also heard on September 8, 2014 wherein the Department enunciated concerns with safety, training, and the condition of capital equipment. Furthermore, the Englewood Fire/Rescue Department advocated to the City Council to contract with South Metro. It was also during this meeting that the City Council authorized former Fire • Chief Andy Marsh to examine how to enhance the safety, training and communications within the department. On January 14, 2015, the City Manager presented an analysis of alternatives and recommendation to contract with Denver Fire at a special study session. Council subsequently took public comment on the recommendation at their meetings on January 20 and February 2, 2015. A final summary presentation was made by the City Manager on February 9, 2015 with the City Council providing consensus direction to move forward with the negotiation of an agreement on February 17, 2015. The goal of the City Council with this particular matter is to ensure a fiscally viable, high quality fire suppression and EMS provision agreement. RECOMMENDED ACTION Staff recommends Council approve a bill for an ordinance authorizing an Intergovernmental Agreement for Fire/EMS service with the City and County of Denver. BACKGROUND, ANALYSIS, AND ALTERNATIVES IDENTIFIED City staff have analyzed a number of different alternative service provision vehicles for Fire and EMS service in Englewood. These range from maintaining a standalone fire department, contracting fire and EMS service, and the formulation of an authority. It was determined that contracting fire and EMS service would be the most cost efficacious manner of moving forward as well helping to ensure that the community was best served in the safest way possible. When all of the options were analyzed with the idea that the City should look for an option that will not add to the expenses of the City as well as provide quality service, a contract with Denver Fire emerged as the best option. A synopsis of the costs of the options appears below. Page 110 of 329 - Entity Base Cost Personnel One Apparatus Capital Cost Separation Total Cost Cost Time Cost Cost Cost Englewood $9,139,834 $378,285 $0 $2,700,000 $15 532,795 $0 $27 750.914 Denver $5.300 000 $349.263 $0 $1 191.000 $750,000 $2 ,305,245 9,895.508 South $6,762,488 $457,785 $504,810 $(1, 191,000) $12,198,500 $750,000 $19,482,583 Metro IGA Highlights: The version of the IGA that is before the City Council is slightly different than the original draft. This is due to the fact that the Denver Attorney's Office put together a new form. However, the agreement largely contains all of the points as before including language stipulating the two paramedic units with two paramedics to be housed in the fire stations; a response time matrix for both fire and EMS; the stipulation that all emergent trauma patients be taken to Swedish Hospital; the stipulation that Denver Fire will provide the City of Englewood with a call analysis data report each month; the inclusion of a process for dealing with disputes including both fire and EMS personnel present to resolve any such matters should they arise; the inclusion of language concerning the adoption of the 2015 International Codes with Englewood adopting amendments of these codes over time; the rolling stock to be transferred has now been incorporated into the agreement rather than referenced by an exhibit; and an overall increase in the cost of the agreement over the 20 year period from what was originally drafted. Denver has suggested 3% annual increases rather than 1 %. Key exclusions from the previous draft agreement include the removal of the C itizen Initiative Petition language as Denver is opposed to such language and the removal of the section referencing the Denver Civil Service Commission requirements. FINANCIAL IMPACT The fiscal impact of a contract for Fire and EMS services with the City and County of Denver will be $3,091,667 for the remainder of 2015 beginning on June 1,201 5. The proposal contemplates a 2% increase for 2016 and then a 3% increase annually beginning in 2017. The total operational expenditure for fire services over the life of the Denver contract would be $150,56 1,244 versus $259,642,412 were the City of Englewood to retain a standalone fire department. This does not include any capi tal costs for the updating or replacement of facilities which Englewood will continue to own. Exhibit E attached hereto contains the payment schedule. LIST OF ATTACHMENTS City Attorney's Office Memo Proposed Bill for an Ordinance Page 111 of 329 • • MEMORANDUM TO: FROM: DATE: Mayor Penn Englewood City Council Members Eric Keck, City Manager Laura Herblan, Acting Firf;?C · Dan Brotzman, City7tt e April 24, 2015 The Englewood City Council reviewed and discussed the draft IGA (attached) at the April 6, 2015 Study Session. Council directed the City Manager and staff to proceed with negotiations. Denver re-drafted the IGA and sent a counterproposal which is attached to the Ordinance. Denver's proposal addresses a number of previously unclarified issues but also differs from the April 611' version in several significant ways: Over the 20 year term of the IGA payment for Denver's services is $156,847,504 an increase of $49,881,844 over the April 6, 2015 draft. Paragraph 18 concerning the Citizen Initiative Petition has been deleted. Denver's position is that the contract must continue for the entire term even if the Englewood Charter is changed by the voters to require a standalone department. 4 firefighters per vehicle is addressed in paragraph 3 but that may be modified in Denver's sole discretion. 4 minute response times for fire and ambulance are addressed in the Denver Response Standard. That standard may be modified in Denver's sole discretion. Paragraph 5 shows that 2 ambulances with 2 paramedics will be based at Englewood fire stations. Paragraph 14.3 sets forth a process for the Englewood City Manager to review response times. But as noted above, the response times are at the sole discretion of the Denver Fire Chief. Paragraph 5 shows Swedish as the primary hospital. Paragraph 5 does not specifically list Denver Health as the provider of medical services. Denver Fire may decide to change the medical provider after consulting Englewood. The new IGA requires the adoption of the 2015 international fire and building codes. Further updates are mandated within 6 months of Denver's adopting new codes. Englewood is prohibited from adopting laws or amendments inconsistent with Denver's various codes without obtaining Denver's written permission. Further, Exhibit B appears to be the original Glendale procedure without the changes requested from our Community Development Department (building codes} and Fire Department. This may delay r eview times for Englewood residents and businesses. Paragraph 9 shows six additional vehicles going to Denver than the Exhibit E attached to the April 6th !GA draft. Page 112 of 329 Negotiated language concerning arson and fire investigation was not incorporated. The paragraph concerning coordination with the Englewood Police is now addressed under paragraph 6.1. Paragraph 8 eliminates the attachment from the Denver Civil Service Commission and sets forth new criteria. Englewood coordinated with FPPA to insert language protecting the firefighters ongoing pension qualifications. Such language has been deleted. Further, the language addressing Englewood's determination to pay severance has been removed. Utilities are now being paid by Englewood. Denver has agreed to mutual aid but not automatic aid. Automatic aid agreements are being discontinued in Council Bill 20, 2015. 15.2 Force Majeure has been added to provide a defense to Denver for strikes and work stoppages. 2 Page 113 of 329 Denver Fire Department City of Englewood Presentation: Overview of 2023 March 18, 2024 Pa g e 1 1 4 o f 3 2 9 Mission Statement: The Denver Fire Department is dedicated to: •Our Desire to Serve; committing to those we serve with integrity, accountability, and inclusivity. •Our Courage to Act; providing quality, timely and professional emergency services to protect life and property. •Our Ability to Perform; working together to maintain the highest standards of mitigation, preparedness, prevention, and community engagement. Value Statement: The Denver Fire Department is a nationally accredited organization built on a rich history of tradition, continuously leading through emergency response, community engagement, and wellness. Embracing a caring culture built on a foundation of respect, inclusion, and trust. Continuously leading the fire service through innovative practices with a focused attention to our family and yours. Vision Statement: How we serve our community: •Integrity -Ethical actions with honesty and respect •Compassion -Caring for each other and those we serve •Excellence -Striving to be the best in all we do Pa g e 1 1 5 o f 3 2 9 Today’s Attendees/Presenters • Desmond G. Fulton, Fire Chief • Robert Murphy, Division Chief, Operations • Robert Miller, Asst. Chief, Denver Fire Dispatch • Anthony Jeffers, Asst. Chief, District 7 • Brad Nerger, Captain (NEW), Engine 37 • Andrew Dameron, Director, Emergency Communications Center Pa g e 1 1 6 o f 3 2 9 Agenda • Overview of Calls & Apparatus Arrivals • Strengths & Successes • Challenges • Threats • Opportunities • Q&A Pa g e 1 1 7 o f 3 2 9 Overview of 2023 Calls • DFD Responses to the City of Englewood • Incident Counts, by call type * These are emergent responses only* Call Type Total Calls Auto 186 EMS 3474 Fire (Other)122 Fire (Structure)15 Haz 3 Other 1043 Tech 28 Total 4871 Pa g e 1 1 8 o f 3 2 9 Apparatus:E37 & T38 Total Unit Arrivals: 4,933 E37 2,894 T38 1,247 Other 792 City of Englewood Pa g e 1 1 9 o f 3 2 9 Strengths & Successes •Accreditation Process •Insurance Services Office (ISO) •Improvements to Central Fire Station Locker Rooms •Coordination with EPD and FMO •SCBAs & New Hydraulic Tools •Englewood Fire Response & Apparatus Gap Map Pa g e 1 2 0 o f 3 2 9 Accreditation The Commission on Fire Accreditation International (CFAI) has completed a review and appraisal of the Denver Fire Department based on the tenth edition of the accreditation model. The commission’s goals are to promote organizational self-improvement and award accreditation status to recognize good performance. The peer assessment team’s objectives were to validate the agency’s self-assessment study, identify and make recommendations for improvement, issue a report of findings, and conclude if the agency is eligible for an award of accreditation. The Denver Fire Department demonstrated that its self-study accreditation manual, community risk assessment/standards of cover (CRA/SOC), and strategic plan met all core competencies and criteria. Therefore, the peer assessment team recommends accredited agency status for the Denver Fire Department from the Commission on Fire Accreditation International. The peer assessment team had meetings with the executive director of safety (EDOS), the senior staff, and the president and secretary-treasurer of the firefighters’ local. Individually and collectively, they expressed a long-standing interest in the process. There is clearly a commitment to continue to follow and support the implementation of identified opportunities for improvement. It can be anticipated that all representatives will be supporters and network participants as the full benefits of going through the self-assessment process are realized and built on in the future. Pa g e 1 2 1 o f 3 2 9 The Insurance Services Office (ISO), is an independent, for-profit organization. The ISO scores fire departments on how they are doing against its organization’s standards to determine property insurance costs. To determine ISO rating for fire departments, the organization conducts a field survey and scores a department across four key areas using the Fire Suppression Rating Schedule (FSRS). These areas include Emergency Communication Systems (10 points); Fire Departments, covering personnel, capabilities, training, equipment, etc. (50 points); Water Supply (40 points); and Community Risk Reduction (extra credit of up to 5.5 points). It uses a 100-point scale (with the potential of 105.5 with the Community Risk Reduction extra credit), and the more points you score, the better your ISO fire rating. Badge of honor Ultimately, a lower score reflects well on a fire department. Like accreditation, a good ISO fire rating demonstrates a commitment to excellence as verified by a third-party reviewal. Plus, it really is an honor to be able to claim an ISO Fire Protection Class 1 rating. Everyone works hard as a team, so to come out on top with a good ISO score is something that you want to shout from the top of your fire truck. This coveted ISO rating clearly demonstrates that you are doing what you need to be doing to help protect your community. After analyzing the data it collects, the ISO assigns a Public Protection Classification (PPC) on a scale from 1 to 10. The higher the ISO fire protection class (with Class 1 being the best), the “better” the department –at least in the eyes of the ISO. The score reflects how prepared a community is for fires.Denver Fire received an ISO rating of 1, the highest rating available. Insurance Services Office (ISO) Pa g e 1 2 2 o f 3 2 9 Improvements to Central Fire Station Locker Rooms Pa g e 1 2 3 o f 3 2 9 Coordination with EPD & FMO DFD works closely with the Englewood Fire Marshalls Office to identify and pre-plan certain target hazards within the city of Englewood. • Meadow Gold Dairies, 1325 W. Oxford Ave. • General Shale Brick, 1845 W. Dartmouth Ave. • South Metro Transfer Station, 2400 W. Union Ave. DFD has also been actively working with Englewood PD Swat Team on a response plan and Standard Operating Guideline (SOG) that specifically calls for Truck 38 to respond to any requests for Fire Department resources. Updates are sent daily to the Englewood Fire Marshall’s office of any significant incidents that occurred in the City the day before. All DFD District 7 Chiefs have direct contact with the Fire Marshall’s office and update him as needed on incidents. Pa g e 1 2 4 o f 3 2 9 SCBAs & New Hydraulic Tools SCBA’s The Denver Fire Department transitioned to the 3M SCOTT Air-Pak X3 Pro SCBA in July 2023. The X3 Pro SCBA combines advanced material selection for improved water repellency and has a removeable harness for decontamination and serviceability. The Air-Paks are state of the art and meet or exceed all applicable NFPA standards. The new SCBA’s, which were placed on every DFD apparatus, were acquired through the Assistance to Firefighters Grants (AFG) Program. We were awarded a grant for $2.5 million with a $500k match from the City. Engine 37 and Truck 38 both have the new SCOTT X3 Pro SCBA’s. Holmatro Battery Powered Hydraulic Tools Denver Fire Department was the recipient of a $900,000 grant that afforded the department the opportunity to upgrade its hydraulic extrication equipment to a full battery powered extrication compliment of spreaders, cutters, and rams, which were placed on all Truck/Tower and Heavy Rescue Companies (Truck 38 has the new tool setup). Battery powered technology has changed the way firefighters are able to perform full extrication maneuvers on motor vehicle incidents and allows firefighters to be more versatile, using tools that are not required to be powered by a gasoline engine and connected with hydraulic lines, while still providing equal or greater tool operational capabilities. Pa g e 1 2 5 o f 3 2 9 Englewood Fire Response Pa g e 1 2 6 o f 3 2 9 Englewood Fire Response (continued) Pa g e 1 2 7 o f 3 2 9 Apparatus Gap Map The DFD Dispatch Team and Shift Commander group utilize a real-time, dynamic software application that provides coverage monitoring, alerting and move-up recommendations. The system provides emergency dispatchers with automated, optimal move-up recommendations while simultaneously allowing them to continuously monitor and identify any gaps in coverage. Connecting with CAD in real-time, the ‘Gap Map’ identifies holes in coverage by tracking each unit’s status, location, and incident assignment. The software then instantaneously recommends optimal, practical, and automated unit relocations, or “move-ups”, that reflect the department’s custom coverage policies. Pa g e 1 2 8 o f 3 2 9 Apparatus Gap Map (continued) Pa g e 1 2 9 o f 3 2 9 Apparatus Gap Map (continued) Pa g e 1 3 0 o f 3 2 9 Denver 911 -Staffing & Retention Staffing Pay and Wellness Retention As of March 2024 • 101% staffing for ECT o 74% effective o We were below 50% effective last summer • Increased starting pay by 45% since 2020 • Focus on wellness, peer support, resources • 2021: 47%Turnover • 2022: 35%Turnover • 2023: 19%Turnover Pa g e 1 3 1 o f 3 2 9 Threats • PFAS In 2022, under a State of Colorado funded mandate, all PFAS foam was removed from DFD Engines and replaced with non- PFAS foam. The Engines were triple rinsed and new foam was added. Engine 37 was included in this replacement process. • Single Layer PPE Pa g e 1 3 2 o f 3 2 9 Opportunities Fire Apparatus Exhaust Systems Much of the existing exhaust system at Station 37 will be kept in place, but the duct work will need replaced as well as boot/hose connector replacement. Station 38 will need a complete system replacement as it was in poor shape when Denver moved into the building. DFD Line-Shop will perform the electrical work and the vendor has agreed to perform the work at Station 38 at no cost. Total cost is $27,735 Pa g e 1 3 3 o f 3 2 9 Questions Contact: Desmond G. Fulton, Fire Chief (720) 913-3424/Office (303) 944-4089/Mobile Desmond.Fulton@denvergov.org Pa g e 1 3 4 o f 3 2 9 MINUTES City Council Regular Meeting Monday, March 4, 2024 1000 Englewood Parkway - 2nd Floor Council Chambers 6:00 PM 1 Study Session Topic a) Director of Finance Kevin Engels was present to review the Monthly Financial Report. b) Sustainability Coordinator Melissa Englund and Company Yearout Energy were present to provide City Council with a project update on the Energy Performance Contract. c) Director of Parks, Recreation, Library, and Golf Christina Underhill and Deputy Director of Parks and Recreation, Brad Anderson were present to discuss the Parks and Recreation GO Bond. 2 Call to Order The regular meeting of the Englewood City Council was called to order by Mayor Sierra at 7:08 p.m. 3 Pledge of Allegiance The Pledge of Allegiance was led by Mayor Sierra. 4 Roll Call COUNCIL PRESENT: Mayor Othoniel Sierra Mayor Pro Tem Joe Anderson Council Member Steve Ward Council Member Chelsea Nunnenkamp Council Member Rita Russell Council Member Tena Prange Council Member Kim Wright COUNCIL ABSENT: None STAFF PRESENT: City Manager Lewis City Attorney Niles City Clerk Carlile Senior Deputy City Clerk McKinnon Page 1 of 6 Draft Page 135 of 329 City Council Regular March 4, 2024 Deputy City Manager Dodd Director of Public Works Rachael Director of Utilities and South Platte Renew Van Ry Director of Parks, Recreation, Library and Golf Underhill Director of Communications Harguth Deputy Director of Engineering Hoos, Public Works Deputy Director Anderson, Parks, Recreation, Library and Golf Open Space Manager Torres, Parks, Recreation, Library and Golf Sustainability Coordinator Englund, City Manager's Office Management Fellow Ramsey, City Manager's Office City Engineer Keith, Public Works Neighborhood Engagement Program Manager Hinkfuss, Communications Systems Administrator Munnell, Information Technology Audio Visual Engineer Hessling, Information Technology Officer Roberts, Police Department 5 Consideration of Minutes of Previous Session a) Minutes of the Regular City Council Meeting of February 19, 2024. Moved by Council Member Joe Anderson Seconded by Council Member Tena Prange APPROVAL OF THE MINUTES OF THE REGULAR CITY COUNCIL MEETING OF FEBRUARY 19, 2024. For Against Abstained Chelsea Nunnenkamp x Rita Russell x Othoniel Sierra x Joe Anderson (Moved By) x Tena Prange (Seconded By) x Kim Wright x Steven Ward x 7 0 0 Motion CARRIED. 6 Appointments, Communications, Proclamations, and Recognition a) Director of South Platte Renew and Englewood Utilities, Pieter Van Ry, was recognized for his appointment to the National Association of Clean Water Agencies’ (NACWA) Board of Directors. 7 Recognition of Scheduled Public Comment a) Kathleen Bailey, an Englewood resident, addressed Council regarding need for actual 25-year rain event capacity infrastructure in upstream half of South Page 2 of 6 Draft Page 136 of 329 City Council Regular March 4, 2024 Englewood Basin. b) Chris Cordova addressed Council regarding the Standards of Behavior Policy. c) Danna Liebert, an Englewood resident, addressed Council regarding the Parks and Recreation General Obligation Bond. d) C. Ann Dickerson, an Englewood resident, addressed Council regarding the Constitution and Council actions, e) Gary Kozacek, an Englewood resident, addressed Council regarding open meetings and Council rules. f) Alisia Blythe was scheduled to address Council and wasn't present. g) Kathy Conley, an Englewood resident, addressed Council regarding the Englewood Parks proposal for using funds from the General Obligation Bond. 8 Recognition of Unscheduled Public Comment a) Cathye Woody, an Englewood resident, addressed Council regarding sustainability. b) Michael Chisholm, an Englewood resident, addressed Council regarding the parks and recreation grant. c) Cara Frangipane, an Englewood resident, addressed Council regarding the parks landscaping grant. d) Diane Tomasso, an Englewood resident, addressed Council regarding the parks landscaping. e) Stacie addressed Council regarding fighting through homelessness. f) Regan Benson addressed Council regarding Judge Jefferson and the misuse of taxpayer resources. g) Nicole Flounders, an Englewood resident, addressed Council regarding sustainability. h) Christie McNeil, an Englewood resident, addressed Council regarding sustainability in parks. Council Member Wright responded to Public Comment. The meeting recessed at 8:35 p.m. for a break The meeting reconvened at 8:45 p.m. with all council members present. 9 Consent Agenda Items There were no items on Consent Agenda. a) Approval of Ordinances on First Reading Page 3 of 6 Draft Page 137 of 329 City Council Regular March 4, 2024 There were no Ordinances on First reading. b) Approval of Ordinances on Second Reading. There were no additional Ordinances on Second reading. (see 11(b)(i)). c) Resolutions and Motions There were no additional Resolutions and Motions. (see 11(c)(i-ii)). 10 Public Hearing Items No public hearing was scheduled before Council. 11 Ordinances, Resolutions and Motions a) Approval of Ordinances on First Reading There were no Ordinances on First reading b) Approval of Ordinances on Second Reading i) CB-5 Approval of an Amendment to an Intergovernmental Agreement with the Colorado Department of Transportation, involving additional funds for the Design and Construction of Dartmouth Traffic Calming Corridor Moved by Council Member Joe Anderson Seconded by Council Member Chelsea Nunnenkamp ORDINANCE NO. 8 SERIES OF 2023 (COUNCIL BILL NO. 05 INTRODUCED BY COUNCIL MEMBER ANDERSON) AN ORDINANCE AUTHORIZING AN AMENDMENT TO THE INTERGOVERNMENTAL AGREEMENT BETWEEN THE STATE OF COLORADO, COLORADO DEPARTMENT OF TRANSPORTATION (CDOT) AND THE CITY OF ENGLEWOOD FOR THE DARTMOUTH TRAFFIC CALMING CORRIDOR PROJECT #FSA M395-022 (24186). For Against Abstained Chelsea Nunnenkamp (Seconded By) x Rita Russell x Othoniel Sierra x Joe Anderson (Moved By) x Tena Prange x Page 4 of 6 Draft Page 138 of 329 City Council Regular March 4, 2024 Kim Wright x Steven Ward x 6 1 0 Motion CARRIED. c) Resolutions and Motions i) Approval of a contract with Elite Industries to provide construction services to improve park amenities at Bates Logan in the amount of $1,314,803. Moved by Council Member Chelsea Nunnenkamp Seconded by Council Member Steven Ward Approval of a contract with Elite Industries to provide construction services to improve park amenities at Bates Logan in the amount of $1,314,803. For Against Abstained Chelsea Nunnenkamp (Moved By) x Rita Russell x Othoniel Sierra x Joe Anderson x Tena Prange x Kim Wright x Steven Ward (Seconded By) x 7 0 0 Motion CARRIED. ii) 2024 Strategic Plan Revisions Moved by Council Member Chelsea Nunnenkamp Seconded by Council Member Tena Prange Approval of the 2024 Strategic Plan Revisions. For Against Abstained Chelsea Nunnenkamp (Moved By) x Rita Russell x Othoniel Sierra x Joe Anderson x Tena Prange (Seconded By) x Kim Wright x Page 5 of 6 Draft Page 139 of 329 City Council Regular March 4, 2024 Steven Ward x 6 1 0 Motion CARRIED. 12 General Discussion a) Mayor's Choice b) Council Members' Choice 13 City Manager’s Report 14 Adjournment MAYOR SIERRA MOVED TO ADJOURN. The meeting adjourned at 10:11 p.m. City Clerk Page 6 of 6 Draft Page 140 of 329 From:Kathleen B To:City Clerk Cc:Stephanie Carlile; Othoniel Sierra; Steven Ward; Rita Russell; Kim Wright; Tena Prange; Joe Anderson; Chelsea Nunnenkamp Subject:My 3/18/24 Public Comment Date:Wednesday, March 13, 2024 3:35:28 PM USE CAUTION: This email originated from outside of the organization. DO NOT CLICK LINKS or OPEN ATTACHMENTS unless you have verified the sender and know that the content is legitimate. Good evening fellow Englewood Residents, I am here tonight to continue to implore any Englewood citizens who may be listening, to please help encourage this City Council instruct their employed City Manager to invest in the installation of 25-year rain event capacity main trunk line pipe from S. Clarkson to Cherokee in order to protect the life health and property of the many vulnerable residents living in the Upstream Half of the South Englewood Basin from the inevitable next Life Health and Property devastation from a Major Rain event. The most recent 2022 MHFD/Dewberry Major Drainage-way Plan made a point to take into account all of the Ulteig Planned Hydraulic Improvements both installed and yet to be installed in their Capacity analysis of the system. And even with Ulteig in the calculation the Storm Water pipe Infrastructure Capacity in the upstream half of the South Englewood Basin REMAINS identified as a 2-year rain event capacity storm water infrastructure system. To help understand what that means, I want to share a few more basic Facts about storm Water and storm water infrastructure capacity. 1) Our existing storm water infrastructure capacity was intentionally built in 1973 to handle only the peak flow of a regular average 2-year rain event. 2) The normal regular average rainfall event we are all familiar with and experience yearly is identified as 2-year rain event. 3) A “rain event” is identified by the amount of water in inches that falls within the first hour of that event. 4) According to the latest 2022 MHFD Study: • the standard average 2-year rain event drops 0.82 inches in one hour. 5) The Major Rain Event that hit the upstream half of the South Englewood Basin on 7/24/18 dropped 1.95 inches of rain in one hour and overwhelmed our 0.82 inches in one hour 2-year rain event CAPACITY system - resulting in that Deadly Devastating flash flood. 6) the Ulteig Plan leaves the existing 2-year rain event capacity main trunk line pipe in place. The main trunk line is the work horse of the system. And it will remain only a 0.82 inches in one hour 2-year rain event capacity. Page 141 of 329 7) Ulteig, with the exception of some enlarged inlets, primarily adds hydraulic improvements and additional ancillary pipes into and around the existing Ancillary pipe systems. City Action: 1) In 2019 Council committed to replacing the existing 0.82 inches in one hour 2-year rain event capacity main trunk line pipe system with a 1.66 inches in one hour 25-year rain event capacity main trunk line pipe system in the upstream half of the South Englewood Basin. At an estimated Cost of $7.6 million to $8.2 Million. - 25-year rain event capacity pipe are the largest pipe that can fit into our streets. 2) in 2020 The new CM didn’t want to spend the money to replace the still existing aged 2- year rain event capacity main trunk line pipe with 25-year rain event capacity main trunk line pipe. 3) And on June 21 2021 the City Council adopted CM’s and Staff’s the $2.2 million Ulteig Plan declaring it also provides 25-year rain event capacity protection for those families. I will take a close look at the Ulteig Plan next meeting. 4) Ulteig construction began on July 12 2021, and Phase 2 on February 28 2022. And false claims of 25-year rain event protection in place were made before the Plan was Completed. 5) On 6/22/23 Public Works Director Rachael posted that the City had been hit with another 1.95 inches in one hour Major 25 to 50-year rain event on 6/22/23. 6) Both Director Rachel and the CM Lewis declared that their Ulteig Hydraulic installations into the existing 2-year rain event capacity system had kept that Major Rain Event from inflicting anything more than one sinkhole downstream and just minor flooding upstream. Yet Contrary to the above claims: 1) Based on MHFD rain gage data analysis the 2-year rain event capacity system was hit with a 1.31 inches in one hour 10-year rain event on 6/22/23 which still resulted in a sinkhole downstream and the minor flooding upstream. 2) And based on PUBLIC WORK’s own posting on their Public Works Department platform within the City of Englewood‘s Website: • Just a little over 1/2 of the Ultieg Planned hydraulic improvements have actually been installed into the existing 2-year rain event capacity system. • And the remaining planned installations are on hold until 2025, due to discovering existing waist water Sewer lines where they planned to install the rest of the hydraulic improvements. And Yet according to Staff and Council apparently just over 1/2 of the $2.2 million Ultieg Plan stopped a 1.95 inches in one hour Major 25 to 50-year rain event on 6/22/23. That false scenario was presented as fact to the Citizens on the Website on 6/22/23, and again by CM at a subsequent Council Meeting. I look forward to any challenge from staff or Council regarding my claims. Page 142 of 329 And I will be back next Public Council meeting to share more facts. Thank you, Kathleen Bailey Sent from my iPhone Page 143 of 329 COUNCIL COMMUNICATION TO: Mayor and Council FROM: Melissa Englund DEPARTMENT: City Manager's Office DATE: March 18, 2024 SUBJECT: Intergovernmental Agreement with Adams County Health Department for the Colorado Local Entity Air Network (CLEAN) Program DESCRIPTION: Intergovernmental Agreement with Adams County Health Department for the Colorado Local Entity Air Network (CLEAN) Program RECOMMENDATION: City staff recommends City Council approve the Intergovernmental Agreement (IGA) with Adams County Health Department to continue the city's participation in the Colorado Local Entity Air Network (CLEAN). PREVIOUS COUNCIL ACTION:  Study Session on the development of a sustainability plan and program (February 22, 2021)  Approval, by motion, of the City of Englewood Sustainability Plan (April 5, 2021) SUMMARY: Staff is looking to continue the partnership in the Colorado Local Entity Air Network (CLEAN) through an Intergovernmental Agreement (IGA) with Adams County Health Department (ACHD), the new backbone organization of the program after Tri-Cities Health Department dissolved in 2022. Entering the IGA with ACHD also allows the city to be a sub-recipient of the EPA funds ACHD was awarded via the EPA to expand the CLEAN program. ANALYSIS: The City of Englewood joined the Colorado Local Entity Air Network (CLEAN) (formerly Love My Air) program back in 2022. This program is designed to raise awareness of air quality issues and protect residents from harmful air pollutants through education. This program also provided the City of Englewood with two air quality monitors, one at Cushing Park and one at the Northwest Green Belt. This program was originally run through the Tri-Cities Health Department. When the Tri-Cities Health Department dissolved in 2022, Adams County Health Department (ACHD) took over as the backbone organization of the program. Page 144 of 329 In 2023, ACHD was awarded a $438,775 grant from the Environmental Protection Agency (EPA) to expand the CLEAN program. Since the City of Englewood is a member of CLEAN, the city is able to receive up to $1,000 as a subrecipient to help advance air quality education and outreach in the city. COUNCIL ACTION REQUESTED: Staff requests City Council approve of the IGA with Adams County Health Department in order to access EPA funding provided to the county. FINANCIAL IMPLICATIONS: Approving the IGA allows Englewood to be a sub-recipient of the EPA funding granted to Adams County Health Department to expand the CLEAN program. Englewood would use these funds to advance air quality projects currently listed in the Strategic Plan. CONNECTION TO STRATEGIC PLAN: Participation in CLEAN helps accomplish or progress the following goals and projects in the sustainability plan priority area within the Strategic Plan, either through the use of the air sensors or through the collaborating efforts of the CLEAN cohort:  [GOAL] Air Quality: Improve public health outcomes through better air quality  [PROJECT] Monitor air quality through regional partners and use of technology  [PROJECT] Increase education and outreach around how to stay safe during bad air quality days  [PROJECT] Investigate education and outreach around bad indoor air quality identification and prevention OUTREACH/COMMUNICATIONS: Participation in the CLEAN program provides cohort learning with other municipalities in the area. Fellow municipalities that are part of the CLEAN cohort are:  City of Sheridan  City of Northglenn  Commerce City  Adams County  Arapahoe County  Arapahoe Libraries With Adams County Health Department receiving funding from the EPA to expand the program, it is expected that more municipalities will join over the coming months and years. To view the sensors, go to https://clean.lovemyair.com/. Residents can sign up for air quality alerts to stay informed about when it is and isn't safe to recreate outdoors. ATTACHMENTS: IGA Contract CB #7 IGA CLEAN ADAMS COUNTY Page 145 of 329 Adams County Health Department, Environmental Health Division Love My Air, Colorado Local Entity Air Network (CLEAN) SUBRECIPIENT AGREEMENT with City of Englewood PASS-THROUGH ENTITY: Adams County Health Department 4430 S. Adams County Parkway, Brighton CO 80601 Unique Entity ID: FV56SRLGHGJ6 SUBRECIPIENT: City of Englewood 1000 Englewood Parkway Englewood, CO 80110 Unique Entity ID: 84-6000583 Federal Awarding Agency: U.S. Environmental Protection Agency (EPA) Pass-through Entity: Adams County Health Department Grant Number (FAIN): 00I14500 Date of EPA Award: 06/02/2023 Project and Award Description: See Exhibit A for Subaward Project Description. See Exhibit B for Federal Award Description. Subaward is Not for Research and Development. Subaward Period of Performance: 2/1/2024 – 1/15/2026 EPA Award Budget Period: 06/07/2023 – 01/15/2026 EPA Award Project Period: 06/07/2023 – 01/15/2026 EPA Award Total Budget Period Cost: $438,775.00 EPA Award Total Project Period Cost: $438,775.00 Agreement Documents: Exhibit A – Scope of Work, Budget, and Project Descriptions Exhibit B – EPA Notice of Award to ACHD Page 146 of 329 AGREEMENT This SUBRECIPIENT AGREEMENT (“Agreement”) is made between the Adams County Health Department (“ACHD”) and City of Englewood (“Subrecipient”). ACHD and Subrecipient may each be referred to herein, individually, as a “Party”, or collectively, as “the Parties”. 1. Federal "Flow Down” Requirements. Subrecipient is responsible for complying with all relevant Federal statutes, regulations and the terms of the EPA award. These requirements include: a. All terms of the EPA award, attached hereto as Exhibit B, and incorporated herein by reference. b. Title VI of the Civil Rights Act and other Federal statutes and regulations prohibiting discrimination in Federal financial assistance programs, as applicable. c. Reporting Subawards and Executive Compensation under Federal Funding Accountability and Transparency Act (FFATA) set forth in General Condition of the EPA award entitled “Reporting Subawards and Executive Compensation.” d. Limitations on individual consultant fees as set forth in General Condition 2 CFR 1500.9 and the General Condition of the EPA award entitled “Consultant Fee Cap.” e. EPA’s prohibition on paying management fees as set forth in General Condition of the EPA award entitled “Management Fees.” f. The Procurement Standards in 2 CFR Part 200 including those requiring competition when the subrecipient acquires goods and services from contractors and access to Subrecipient records for verification of compliance with 2 CFR 200.331 as well as 2 CFR Part 200, Subpart D, Post Federal Award Requirements for Financial and Program Management, and 2 CFR Part 200, Subpart F, Audit Requirements. 2. Renewal and Termination. a. Renewal. This Agreement may be renewed or amended only by the mutual written agreement of the Parties. b. Termination. ACHD or Subrecipient may terminate this Agreement at any time and for any reason upon written notice to the other Party of at least five (5) days before the effective date of such termination. 3. Payment for Services. For services rendered, ACHD agrees to pay Subrecipient, pursuant to the terms of this Agreement, the not to exceed total of $1,000. Page 147 of 329 4. Cooperation. Both Parties will seek each other's cooperation in carrying out the provisions of this Agreement. During the term of this Agreement, arrangements may be made for periodic meetings between Subrecipient and ACHD to promote understanding of, and adjustments to, this Agreement and/or the work performed under this Agreement. 5. Work Product. a. Any data, reports, client records, documents or other information provided by ACHD to Subrecipient during the Agreement Term, or created by Subrecipient for ACHD, shall be and remain the sole property of ACHD at all times (collectively, the “Materials”). Subrecipient shall return or provide to ACHD such Materials upon the completion or termination of the services provided under this Agreement Subrecipient agrees not to release, divulge, publish, transfer, sell, or otherwise make known any such Materials without the express prior written consent of ACHD, or as otherwise required by law. b. Subrecipient authorizes ACHD and its agents to use all Materials for all legal purposes, including, but not limited to, the promotion of the activities of ACHD. Subrecipient expressly waives any right of compensation (except as provided for in this Agreement), and any other claim arising or potentially arising out of ACHD’s use of any of the Materials. Additionally, Subrecipient waives any right to inspect or approve the finished use of any Materials in any form, including, but not limited to, newspapers, journals, brochures, annual reports, radio, television, videos, slide presentations, cablecasting and closed-circuit viewing. 6. Advertising. No advertising, publicity, or news release containing any reference to ACHD shall be used by Subrecipient, or anyone on Subrecipient’s behalf, unless prior written approval is obtained from ACHD. ACHD may release information regarding this Agreement to the general public and news media. Subrecipient grants to ACHD a non- exclusive license to include Subrecipient’s name in information pertaining to the Agreement that is released to the public. 7. Personnel and Subcontractors. a. All the work to be performed pursuant to this Agreement will be performed by Subrecipient or under its supervision, and all personnel engaged in the work shall be fully qualified and shall be authorized under State and local law to perform such work. b. None of the work to be performed by Subrecipient shall be subcontracted to any other party, except as may be provided in the Scope of Work, without the prior written approval of ACHD. Failure to obtain ACHD’s prior written approval of any subcontractor shall result in the disallowance of reimbursements for any work provided by any such subcontractor. 8. Compliance. Page 148 of 329 a. The Parties will each comply with all applicable statutes, laws, rules, and regulations when carrying out its obligations under this Agreement. b. The Parties will carry out all obligations with reasonable care and in accordance with activities contemplated under this Agreement. c. Subrecipient will cooperate with ACHD in supplying information to ACHD, or in complying with any procedures which might be required by any governmental agency in order for ACHD to establish that it has observed all requirements of the law with respect to this Agreement. 9. Nondiscrimination. Subrecipient shall not discriminate against any employee or qualified applicant for employment because of age, race, color, religion, marital status, disability, sex, or national origin. Subrecipient agrees to post in conspicuous places, available to employees and applicants for employment, notices provided by the local public agency setting forth the provisions of this nondiscrimination clause. ACHD is an equal opportunity employer. 10. Independent Contractor. The relationship between Subrecipient and ACHD is that of an independent contractor. Subrecipient shall be solely and entirely responsible for its acts and the acts of its employees, agents, servants, and subcontractors during the term and performance of this Agreement. Subrecipient shall not be deemed to be, nor shall it represent itself as an employee, or joint venture of ACHD. No employee or officer of ACHD shall supervise Subrecipient. Subrecipient is not entitled to worker’s compensation benefits under ACHD’s worker’s compensation coverage, or any other ACHD employee benefits. Subrecipient shall be solely responsible for payment of federal and state income tax that may arise from monies earned under this Agreement. ACHD will not withhold or make payments for social security, make unemployment or disability insurance contributions or obtain Workers Compensation insurance on Subrecipient’s behalf. 11. Insurance. ACHD and Subrecipient are both recognized as political subdivisions of the State of Colorado. As such, they are governed by the Colorado Governmental Immunity Act, C.R.S. 24-10-101 et seq. The Parties acknowledge and agree that ACHD and Subrecipient, their respective officers, and employees, are relying on, and do not waive or intend to waive, by any provision of this Agreement, the monetary limitations or any other rights, immunities, and protections provided by said Act. As such, each Party shall maintain such insurance as is standard for governmental entities. Each Party shall supply the other Party with applicable certificates of insurance upon request. 12. Notice. Any notice to be given hereunder by either Party to the other may be affected in writing by personal delivery, or by mail, certified with postage prepaid, or by overnight delivery service. Notices sent by mail or by an overnight delivery service shall be addressed to the Parties at the addresses above. Either Party may change its address by written notice in accordance with this paragraph. Page 149 of 329 13. Third Parties. This Agreement does not and shall not be deemed to confer upon any third party any right to claim damages, to bring suit or other proceeding against either ACHD or Subrecipient because of any term contained in this Agreement. 14. Assignment. Subrecipient shall not assign this Agreement in whole or in part without prior written consent of ACHD. 15. Severability. If any provision of this Agreement is determined to be unenforceable or invalid for any reason, the remainder of this Agreement shall remain in effect, unless otherwise terminated in accordance with the terms contained herein. 16. Governmental Immunity. a. The Parties acknowledge and agree that both Parties and their respective officers and employees, are relying on, and do not waive or intend to waive, by any provision of this Agreement, the monetary limitations or any other rights, immunities, and protections provided by the Colorado Governmental Immunity Act, as it is from time to time amended. b. Neither ACHD nor Subrecipient shall be liable to the other or shall make claim for any incidental, indirect or consequential damages arising out of or connected in any way to the work referenced within this Agreement. The mutual waiver of consequential damages includes, but is not limited to, loss of use, loss of profit, loss of business, loss of income or any other consequential damages that either Party may have incurred from any cause of action including negligence or breach of contract. 17. Entire Agreement. This Agreement constitutes the entire agreement and understanding between the Parties and supersedes any prior agreement or understanding relating to the subject matter of this Agreement. 18. Modification. This Agreement may be modified or amended only by a duly authorized written instrument executed by the Parties hereto. 19. Waiver. The failure of either Party at any time to require performance of the other Party of any provision of this Agreement shall in no way affect the right of such Party thereafter to enforce the same provision, nor shall the waiver by either Party of any breach of any provision hereof be taken or held to be a waiver of any other or subsequent breach, or as a waiver of the provision itself. 20. Survival. The rights and obligations of the Parties shall survive the term of this Agreement to the extent that any performance is required under this Agreement after its expiration or termination of this Agreement. 21. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall together constitute one and the same document. Page 150 of 329 22. Jurisdiction and Venue. The laws of the State of Colorado shall govern as to the interpretation, validity, and effect of this Agreement. The Parties agree that jurisdiction and venue for any disputes arising under this Agreement shall be with Adams County, Colorado. 23. Authorization. Each Party represents and warrants that it has the power and ability to enter into this Agreement, to grant the rights granted herein, and to perform the duties and obligations herein described. 24. Security Breaches and Personal Information. a. If Subrecipient obtains personal identifying information, as that term is defined in C.R.S. 24-73-101, from ACHD during the course of this Agreement, Subrecipient shall destroy or properly dispose of the information in a manner that is compliant with C.R.S. 24-73-101 when that information is no longer needed for the performance of this Agreement. Subrecipient shall also implement and maintain reasonable security procedures and practices that are appropriate to the nature of the personal identifying information obtained; and reasonably designed to help protect the personal identifying information from unauthorized access, use, modification, disclosure, or destruction. b. In the event of a security breach, as defined in C.R.S. 24-73-103, that compromises computerized data that includes personal information subject to this Agreement, Subrecipient shall notify ACHD of the security breach in the most expedient time and without unreasonable delay following discovery of the security breach, if misuse of personal information about a Colorado resident occurred or is likely to occur; and cooperate with ACHD, including sharing with ACHD any information relevant to the security breach, except that such cooperation does not require the disclosure of confidential business information or trade secrets. REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY. SIGNATURE PAGE FOLLOWS. Page 151 of 329 7 IN WITNESS WHEREOF, the Parties have caused this Subrecipient Agreement to be executed by its duly authorized representatives. ACHD: __________________________________ Signature Date: _____________________________ Name: ____________________________ Title: ____________________________ Subrecipient: __________________________________ Signature Date: _____________________________ Name: ____________________________ Title: ____________________________ REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY Page 152 of 329 8 Adams County Health Department, Environmental Health Division Love My Air, Colorado Local Entity Air Network (CLEAN) SUBRECIPIENT AGREEMENT with City of Englewood EXHIBIT A SCOPE OF WORK Project Description: The Love My Air Colorado Local Entity Air Network (CLEAN) program empowers communities to live better, longer by reducing air pollution and limiting exposure through behavior changes, advocacy, and community engagement. The program provides low -cost air sensors, a program data dashboard, and programming support to increase understanding of the impact of particulate matter on air quality and what individuals can do to protect their health. Through CLEAN, partners host and create programming and communications to raise awareness about air quality, empower individuals to adjust behaviors to reduce air quality impacts, and empower individuals to change behaviors to reduce exposure to poor air quality. Project Objectives: • Gather real-time, hyper-local air quality data by placing air quality monitoring sensors within the community, in collaboration with community partner organizations. • Provide community members with easy access to local air quality data through a user- friendly data dashboard. • Empower communities, families, schools and parks and recreation districts to limit exposure and reduce pollution through behavior change, advocacy, and community engagement. • Support community partners to incorporate air quality education and information into their diverse programming. • Convene a cohort of community partners to share lessons learned. Program Activities: Subrecipient will use funding under this Agreement to support the Project Objectives described above. Allowable uses of funding are broad to allow Subrecipient to support Project Objectives within their diverse organization activities. Subrecipient Organization Description: • The City of Englewood is a small-sized city (population ~33,000) located in Arapahoe County. The city borders the City of Denver to the south with the City of Sheridan to its western border. In 2021, the city adopted its first ever Sustainability Plan, which includes Air Quality as one of its goal areas. Subrecipient Responsibilities: • Use of Funding. o The City of Englewood is still in the planning phases of the best use for available CLEAN program funds, but will use the funds to advance one or multiple of its air quality projects listed within the Sustainability Plan, which include: ▪ Increase education and outreach around how to stay safe during bad Page 153 of 329 9 air quality days. ▪ Investigate education and outreach around bad indoor air quality identification and prevention. • Air Quality Sensor(s). o Subrecipient requests and allows for the installation of ACHD air quality sensor(s) at the following property location(s): ▪ Cushing Park 700 W Dartmouth Ave, Englewood, CO 80110 ▪ Northwest Greenbelt Park 2235 W Vassar Ave Englewood, CO 80110 o Subrecipient shall grant ACHD access to said property, as needed, for ACHD to carry out its responsibilities related to air quality sensor(s) installed on Subrecipient’s property. o Subrecipient shall exercise reasonable care to ensure air quality sensor(s) are secure and remain in working order. o Subrecipient shall notify ACHD as soon as possible of any air quality sensor(s) loss or damage. Subrecipient is not responsible for costs associated with loss or damage. • Reporting. Subrecipient shall: o Provide information relevant to work performed under this Agreement during EPA quarterly reporting periods and upon request from ACHD. o Submit a final report on work performed under this Agreement no later than October 31, 2025. This report shall include (1) A description of the work performed under this Agreement. (500 words or less). (2) A description of the audiences reached through the work performed under this Agreement. (250 words or less). (3) The number of individuals reached through work performed under this Agreement. And (4) At least one highlight from the work performed. (250 words or less). ACHD Responsibilities: • Air Quality Sensors. o ACHD shall, at no cost to Subrecipient, (1) Survey properties, as needed, to determine suitable location(s) to install air quality sensor(s). (2) Install air quality sensor(s) in location(s) approved by Subrecipient. (3) Perform maintenance and troubleshooting at air quality sensor(s), estimated to occur as often as weekly. And (4) Remove air quality sensors upon the expiration or termination of this Agreement. o ACHD shall retain all title, rights, and ownership of its equipment. • Access to Data. ACHD shall provide Subrecipient with access to air quality sensor data through its CLEAN data dashboard. • Technical Assistance. ACHD shall provide technical assistance to Subrecipient as needed to carry out the work under this Agreement. • Educational Materials and Information. ACHD shall provide educational materials and information to assist Subrecipient with incorporating air quality into their diverse organization activities. Project Points of Contact: Page 154 of 329 10 The following individuals will serve as the primary points of contact regarding work performed under this Agreement. • Adams County Health Department o Renata Trisilawati o rtrisilawati@adcogov.org o 720 969 0700 • Subrecipient, City of Englewood o Mel Englund, Sustainability Coordinator o menglund@englewoodco.gov o 303-870-2047 Payment Terms: • Subrecipient shall send an invoice via email to ACHD for expenses incurred according to the Budget below. All invoices shall include a description of the expenditures incurred, by activity, during the invoice period. ACHD shall reimburse Subrecipient within thirty (30) days receipt of said invoice. • Subrecipient shall be responsible for all taxes for all payments received and will complete a Form W-9 upon signing this Agreement. • Subrecipient shall maintain records and documentation of work performed under this Agreement, including fiscal records, and shall retain the records for a period of three (3) years from the date this Agreement is terminated. Said records and documents shall be subject at all reasonable times to inspection, review, or audit by authorized Federal, State, or County personnel. Budget: The City of Englewood is still in the planning phase of how the city would like to use it’s $1,000 from the CLEAN program to help advance air quality education in the City of Englewood. REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY. Page 155 of 329 11 Adams County Health Department, Environmental Health Division Love My Air, Colorado Local Entity Air Network (CLEAN) SUBRECIPIENT AGREEMENT with City of Englewood EXHIBIT B EPA NOTICE OF AWARD TO ACHD REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY. Page 156 of 329 Pa g e 1 5 7 o f 3 2 9 Pa g e 1 5 8 o f 3 2 9 Pa g e 1 5 9 o f 3 2 9 Pa g e 1 6 0 o f 3 2 9 Pa g e 1 6 1 o f 3 2 9 Pa g e 1 6 2 o f 3 2 9 1 ORDINANCE COUNCIL BILL NO. 7 NO. _____________ INTRODUCED BY COUNCIL SERIES OF 2024 MEMBER _________________ A BILL FOR AN ORDINANCE AUTHORIZING AN INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF ENGLEWOOD AND ADAMS COUNTY HEALTH DEPARTMENT, ENVIRONMENTAL HEALTH DIVISION FOR THE LOVE MY AIR, COLORADO LOCAL ENTITY AIR NETWORK (CLEAN) SUBRECIPIENT AGREEMENT. WHEREAS, in 2022 the City of Englewood joined the Colorado Local Air Entity Network (CLEAN) program administered by the Tri-County Health Department; and WHEREAS, the Tri-County Health Department dissolved and the Adams County Health Department, Environmental Health Division took over the administration of the CLEAN program; and WHEREAS, the Adams County Health Department, Environmental Health Division received a $438,775.00 grant from the United States Environmental Protection Agency; and WHEREAS, the Adams County Health Department, Environmental Health Division is the pass through entity for the United States Environmental Protection Agency grant; and WHEREAS, the grant was awarded for the CLEAN program; and WHEREAS, the CLEAN program expands air quality monitoring by using air sensors, a data dashboard, and programing support; and WHEREAS, the goal of the CLEAN program is to reduce air pollution and the impacts of air pollution by encouraging behavior changes and education; and WHEREAS, the Adams County Health Department is working with other cities and local partners to collect air quality data for the CLEAN program; and WHEREAS, the CLEAN program would allow the City of Englewood to gather local air quality data; and WHEREAS, the local air quality data could be provided to the community through a data dashboard; and Page 163 of 329 2 WHEREAS, the passage of this Ordinance will authorize the City of Englewood to enter into a Subrecipient Agreement with the Adams County Health Department, Environmental Health Division for the Love My Air, Colorado Local Entity Air Network (CLEAN) program; and WHEREAS, Article XIV, Section 18(2)(a) of the Constitution of the State of Colorado, and Part 2, Article 1, Title 29, C.R.S. encourages and authorizes intergovernmental agreements; and WHEREAS, Sections 29-1-203 and 29-1-203.5, C.R.S. authorize governments to cooperate and contract with one another to provide any function, service, or facility lawfully authorized to each. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ENGLEWOOD, COLORADO, AS FOLLOWS: Section 1. The City Council of the City of Englewood, Colorado hereby authorizes execution by the City of an Intergovernmental Agreement with the Adams County Health Department, Environmental Health Division for the Love My Air, Colorado Local Entity Air Network (CLEAN) Subrecipient Agreement, in the form substantially the same as that attached hereto. Section 2. General Provisions The following general provisions and findings are applicable to the interpretation and application of this Ordinance: A. Severability. If any clause, sentence, paragraph, or part of this Ordinance or the application thereof to any person or circumstances shall for any reason be adjudged by a court of competent jurisdiction invalid, such judgment shall not affect, impair or invalidate the remainder of this Ordinance or its application to other persons or circumstances. B. Inconsistent Ordinances. All other Ordinances or portions thereof inconsistent or conflicting with this Ordinance or any portion hereof are hereby repealed to the extent of such inconsistency or conflict. C. Effect of repeal or modification. The repeal or modification of any provision of the Code of the City of Englewood by this Ordinance shall not release, extinguish, alter, modify, or change in whole or in part any penalty, forfeiture, or liability, either civil or criminal, which shall have been incurred under such provision, and each provision shall be treated and held as still remaining in force for the purposes of sustaining any and all proper actions, suits, proceedings, and prosecutions for the enforcement of the penalty, forfeiture, or liability, as well as for the purpose of sustaining any judgment, decree, or order which can or may be rendered, entered, or made in such actions, suits, proceedings, or prosecutions. D. Safety Clauses. The City Council hereby finds, determines, and declares that this Ordinance is promulgated under the general police power of the City of Englewood, that it is promulgated for the health, safety, and welfare of the public, and that this Ordinance Page 164 of 329 3 is necessary for the preservation of health and safety and for the protection of public convenience and welfare. The City Council further determines that the Ordinance bears a rational relation to the proper legislative object sought to be obtained. This Safety Clause is not intended to affect a Citizen right to challenge this Ordinance through referendum pursuant to City of Englewood Charter 47. E. Publication. Publication of this Ordinance may be by reference or in full in the City’s official newspaper, the City’s official website, or both. Publication shall be effective upon the first publication by either authorized method. Manuals, Municipal Code, contracts, and other documents approved by reference in any Council Bill may be published by reference or in full on the City’s official website; such documents shall be available at the City Clerk’s office and in the City Council meeting agenda packet when the legislation was adopted. F. Actions Authorized to Effectuate this Ordinance. The Mayor is hereby authorized and directed to execute all documents necessary to effectuate the approval authorized by this Ordinance, and the City Clerk is hereby authorized and directed to attest to such execution by the Mayor where necessary. In the absence of the Mayor, the Mayor Pro Tem is hereby authorized to execute the above-referenced documents. The execution of any documents by said officials shall be conclusive evidence of the approval by the City of such documents in accordance with the terms thereof and this Ordinance. City staff is further authorized to take additional actions as may be necessary to implement the provisions of this Ordinance. G. Enforcement. To the extent this ordinance establishes a required or prohibited action punishable by law, unless otherwise specifically provided in Englewood Municipal Code or applicable law, violations shall be subject to the General Penalty provisions contained within EMC § 1-4-1. Page 165 of 329 COUNCIL COMMUNICATION TO: Mayor and Council FROM: Pieter Van Ry DEPARTMENT: Utilities DATE: March 18, 2024 SUBJECT: Resolution of Support for recognition agreement between Englewood McLellan Reservoir Foundation and UC Health DESCRIPTION: The Englewood McLellan Reservoir Foundation (EMRF) Board of Directors is seeking Council support to enter into a recognition agreement between EMRF and University of Colorado Health (UC Health) and Highlands Ranch MP RK6, LLC (Developer). RECOMMENDATION: Staff recommends City Council approve the proposed Resolution of Support for a recognition agreement between EMRF and UC Health and the Developer. PREVIOUS COUNCIL ACTION:  November 15, 2016 – City Council approved a Resolution of Support for the third amendment to the lease agreement with option to purchase for 33.3 acres in PA81 with Shea Properties d.b.a. Central Parks Highlands Ranch.  May 25, 2016 – City Council approved a Resolution of Support for the second amendment to the lease agreement with option to purchase for 33.3 acres in PA81 with Shea Properties d.b.a. Central Parks Highlands Ranch.  April 21, 2016 – City Council approved a Resolution of Support for the first amendment to the lease agreement with option to purchase for 33.3 acres in PA81 with Shea Properties d.b.a. Central Parks Highlands Ranch.  April 5, 2016 – City Council approved a Resolution of Support for a lease agreement with option to purchase for 33.3 acres in PA81 with Shea Properties d.b.a. Central Parks Highlands Ranch. SUMMARY: Englewood McLellan Reservoir Foundation has a long-term ground lease with UC Health covering approximately 33 acres in Northwest Douglas County. UC Health intends to sublease approximately 1 acre of the land under this ground lease to a developer to develop a medical office building. This transaction is between UC Health and the developer of the medical office building. A recognition agreement between EMRF and UC Health and the Developer will provide that in the event UC Health were to default on the master lease, EMRF would recognize the lease of the medical office building and, if necessary, would give a direct lease for the medical office building on the same terms as the sublease. ANALYSIS: The master lease between UC Health and EMRF permits UC Health to execute a sublease; however, the developer of the medical office building and its lender have requested EMRF enter Page 166 of 329 into a recognition agreement with UC Health and the Developer. This proposed recognition agreement is designed to be effective only in the event that UC Health defaults on the master lease. There is no change to the master lease with UC Health. If the recognition agreement ever becomes applicable, the sublease is on favorable terms; the rent increases by 2.5 percent annually, and after the initial term of 20 years, there is a fair market value adjustment to the rent beginning every 10 years. Based on a new appraisal every 10 years, the rent continually increases at 2.5 percent annually. EMRF would collect the rent directly from the Developer of the medical office building and reclaim the remaining property currently under the UC Health ground lease. COUNCIL ACTION REQUESTED: For City Council to approve a Resolution of Support, supporting a recognition agreement between EMRF and UC Health and the Developer. FINANCIAL IMPLICATIONS: None. CONNECTION TO STRATEGIC PLAN: Governance and Economy:  Ensures the City of Englewood is effectively leveraging its assets to the benefit of Englewood residents. ATTACHMENTS: Resolution #__ Contract Approval Summary Recognition Agreement between EMRF and UC Health and the Developer Ground Sublease Agreement Ground Lease PowerPoint Presentation Page 167 of 329 1 RESOLUTION NO. SERIES OF 2024 A RESOLUTION SUPPORTING THE RECOGNITION AGREEMENT BETWEEN THE ENGLEWOOD MCLELLAN RESERVOIR FOUNDATION (EMRF), UNIVERSITY OF COLORADO HEALTH, AND HIGHLANDS RANCH MP RK6. 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, EMRF has entered into long- term leases on various parcels of property in and around the McLellan Reservoir with Council support; and WHEREAS, EMRF and University of Colorado Health (“UCH”), as successor- in-interest to Central Park at Highlands Ranch, LLC, entered into a Ground Lease dated April 5, 2016, as amended by the First Amendment to Ground Lease dated April 21, 2016, the Second Amendment to Ground Lease dated May 25, 2016, and the Third Amendment to Ground Lease dated November 15, 2016, for 33.283 acres which is legally described as Lot 2A, Highlands Ranch Filing No. 156, 1st Amendment, County of Douglas, State of Colorado in and around the McLellan Reservoir; and WHEREAS, UCH desires to sublease a portion of the property to Highlands Ranch MP RK6 (“HRMP”), as permitted under the Ground Lease, and WHEREAS, as authorized by the Ground Lease, HRMP requests ERMF execute and deliver an agreement acknowledging the Sublease, the Recognition Agreement; and WHEREAS, the EMRF Board of Directors seeks a Resolution of Support from the Englewood City Council for the Recognition Agreement acknowledging a Ground Sublease between UCH to HRMP. 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 the Recognition Agreement between the Englewood/McLellan Reservoir Foundation, University of Colorado Health, and Highlands Ranch MP RK6 in substantially the same form as the “Recognition Agreement” attached as Exhibit A. Page 168 of 329 2 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. ADOPTED AND APPROVED this __ day of _____, 2024. Othoniel Sierra, Mayor ATTEST: Stephanie Carlile, City Clerk I, Stephanie Carlile, City Clerk for the City of Englewood, Colorado, hereby certify that the above is a true copy of Resolution No. , Series of 2024. Stephanie Carlile Page 169 of 329 Contract Number City Contact Information: Staff Contact Person Phone Title Email Summary of Terms: Original Contract Amount Start Date 3/25/2024 Amendment Amount End Date Amended Contract Amount Total Term in Years Landlord & Tenant Contact Information: Name Contact Address Phone Email Aurora CO City State Zip Code Name Contact Address Phone Email Chicago IL City State Zip Code Contract Type: Please select from the drop down list Description of Contract Work/Services Procurement Justification of Contract Work/Services CONTRACT APPROVAL SUMMARY HIGHLANDS RANCH MP RK6, LLC c/o Remedy Medical Properties, Inc. 800 W Madison Street, Suite 400 Recognition Agreement Recognition Agreement between EMRF and UC Health and the Developer $ - $ - $ - 303.349.3766Sarah Stone SStone@englewoodco.govUtilities Deputy Director – Business Solutions and Engineering Renewal options available n/a Englewood McLellan Reservoir Foundation has a long-term ground lease with UC Health covering approximately 33 acres in Northwest Douglas County. UC Health intends to sublease approximately 1 acre of the land under this ground lease to a developer to develop a medical office building. This transaction is between UC Health and the developer of the medical office building. A recognition agreement between EMRF and UC Health and the Developer will provide that in the event UC Health were to default on the master lease, EMRF would recognize the lease of the medical office building and, if necessary, would give a direct lease for the medical office building on the same terms as the sublease. The master lease between UC Health and EMRF permits UC Health to execute a sublease; however, the developer of the medical office building and its lender have requested EMRF enter into a recognition agreement with UC Health and the Developer. This proposed recognition agreement is designed to be effective only in the event that UC Health defaults on the master lease. There is no change to the master lease with UC Health. If the recognition agreement ever becomes applicable, the sublease is on favorable terms; the rent increases by 2.5 percent annually, and after the initial term of 20 years, there is a fair market value adjustment to the rent beginning every 10 years. Based on a new appraisal every 10 years, the rent continually increases at 2.5 percent annually. EMRF would collect the rent directly from the Developer of the medical office building and reclaim the remaining property currently under the UC Health ground lease. 60607 Payment or Revenue terms (please describe terms or attached schedule if based on deliverables) Attention: Peter Westmeyer None, Recognition Agreement only. Attention: Director of Real Estate 12401 East 17th Avenue Mail Stop A-037 80045-0508 University of Colorado Health (“UCH”), as successor-in-interest to Central Park at Highlands Ranch, LLC (Shea) Page 170 of 329 CONTRACT APPROVAL SUMMARY Source of Funds: Revenue CAPITAL ONLY A B C 1=A-B-C Capital Tyler New World Spent To Contract Budget Operating Year Project # / Task #Fund Division Account Line Item Description Contract Title Budget Date Amount Remaining C -$ -$ -$ -$ C -$ -$ -$ -$ O -$ -$ -$ -$ O -$ -$ -$ -$ O -$ -$ -$ -$ Total Current Year -$ -$ -$ -$ C -$ -$ -$ -$ C -$ -$ -$ -$ O -$ -$ -$ -$ O -$ -$ -$ -$ O -$ -$ -$ -$ Total - Year Two -$ -$ -$ -$ GRAND TOTAL -$ -$ -$ -$ Process for Choosing Contractor: Solicitation Name and Number Attachment (For Capital Items Only / Expense Line Item Detail is Located in OpenGov): All Other Attachments: n/a NOTES/COMMENTS (if needed): For Operating Line Item Detail, please review information provided in Tyler New World For Capital Items, please review Prior Month's Project Status and Fund Balance Report General Ledger Account String Solicitation:Evaluation Summary/Bid Tabulation Attached Proposal/Bid Attached Prior Month-End Project Status and Fund Balance Report Evaluation Summary/Bid Tabulation AttachedEvaluation Summary/Bid Tabulation AttachedEvaluation Summary/Bid Tabulation AttachedContract Copy of Original Contract if this is an Amendment Copies of Related Contracts/Conveyances/Documents Addendum(s) Exhibit(s) Certificate of Insurance Page 171 of 329 Recognition Agreement - Page 1 Highlands Ranch MOB WHEN RECORDED RETURN TO: Remedy Medical Properties, Inc. 800 W. Madison, Suite 400 Chicago, IL 60607 Attention: Gregg Graines SMRH draft 3/6/24 SPACE ABOVE THIS LINE FOR RECORDER’S USE ONLY RECOGNITION AGREEMENT THIS RECOGNITION AGREEMENT (this “Agreement”) is entered into as of [____________] [__], 2024 by and among ENGLEWOOD/MCLELLAN RESERVOIR FOUNDATION, a Colorado nonprofit corporation (together with its successors and assigns, including any successor as fee owner of the Overall Parcel or the MOB Parcel, the “Foundation”), UNIVERSITY OF COLORADO HEALTH, a Colorado nonprofit corporation (together with its permitted successors and assigns, “Landlord”), and HIGHLANDS RANCH MP RK6, LLC, a Delaware limited liability company (together with its successors and assigns, “Tenant”). RECITALS: A. The Foundation, as landlord, and Landlord, as tenant, are parties to the Ground Lease dated April 5, 2016, as amended by that certain First Amendment to Ground Lease dated April 21, 2016, that certain Second Amendment to Ground Lease dated May 25, 2016, and that certain Third Amendment to Ground Lease dated November 15, 2016 (as may hereafter be amended, modified or supplemented as permitted hereunder, the “Foundation Lease”), whereby the Foundation leases to Landlord a 33.283 acre parcel of land described in attached Exhibit A (the “Overall Parcel”), all as more particularly described therein, and as evidenced by a Memorandum of Ground Lease and Notice of Assignment and Assumption of Ground Lease dated effective May 25, 2016, recorded as Instrument No. 2016033132 in the Real Property Records of Douglas County, Colorado. B. Landlord, as ground sublessor, and Tenant, as ground sublessee, are parties to the Ground Sublease dated of or about even date herewith (as the same may hereafter be amended, modified or supplemented as permitted hereunder, the “Ground Sublease”), pursuant to which Tenant subleases from Landlord a portion of the Overall Parcel identified therein as the “Ground Subleased Premises” and more particularly described in attached Exhibit B (the “MOB Parcel”). A Memorandum of Ground Sublease dated of or about even date herewith is being recorded in the Real Property Records of Douglas County, Colorado prior to the recordation of this Agreement. Capitalized terms not otherwise defined herein shall have the meaning assigned such terms in the Foundation Lease. C. The MOB Parcel is subject to that certain Declaration of Covenants, Conditions and Restrictions dated as of May 25, 2016 (the “Declaration”), recorded as Instrument No. 2016033134 in the Real Property Records of Douglas County, Colorado, Page 172 of 329 Recognition Agreement - Page 2 Highlands Ranch MOB by and between Central Park at Highlands Ranch, LLC, a Colorado limited liability company (together with its successors and assigns, “Shea”) and Landlord. D. Tenant is willing to enter into the Ground Sublease provided that the Foundation, Landlord and Tenant agree to the provisions of this Agreement. AGREEMENT: NOW THEREFORE, in consideration of the premises and other mutual valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 1. Representations of the Foundation. The Foundation hereby makes the following representations, each as of the date hereof, to Tenant and to any Subleasehold Mortgagee (as defined below): (a) Other than the Foundation Lease and other matters of record, there are no other agreements or understandings, whether written or oral, between the Foundation and Landlord relating to the Overall Parcel, including the MOB Parcel. (b) Except for the Foundation Lease and instruments of record, there are no leases, mortgages, deeds of trust or other security interests granted by the Foundation covering the Foundation’s fee interest in the Overall Parcel, including the MOB Parcel. (c) The Foundation has not received written notice of any pending eminent domain proceedings or other governmental actions or any judicial actions of any kind against its interest in the Overall Parcel, including the MOB Parcel. (d) The Foundation Lease has not been modified or amended, except to the extent set forth in the definition of Foundation Lease in Recital A above, and to the knowledge of the Foundation, (i) the Foundation Lease remains in full force and effect, and (ii) there exists no default or event which, with the passage of time or the giving of notice, or both, would constitute an event of default under the Foundation Lease by any party thereto. 2. Tenant Agreements. (a) Delivery of Notices. The Foundation will deliver to Tenant and any lender now or hereafter having a lien on the MOB and Tenant’s leasehold interest in the MOB Parcel, provided Tenant has provided the name and address of such Subleasehold Mortgagee to the Foundation (each a “Subleasehold Mortgagee”) a copy of all notices with respect to (i) a default or Event of Default, (ii) matters or circumstances that could give rise to a default or Event of Default, or (iii) the Purchase Option, the Extension Option or any other extension or modification of the Term that the Foundation delivers to Landlord with respect to the Foundation Lease. (b) Default Notice and Cure. Page 173 of 329 Recognition Agreement - Page 3 Highlands Ranch MOB i. When giving notice to Landlord with respect to any default or Event of Default under the Foundation Lease, the Foundation shall also serve a copy of such notice upon Tenant and any Subleasehold Mortgagee. No such notice shall be effective against Tenant or any Subleasehold Mortgagee unless and until served on Tenant and such Subleasehold Mortgagee as herein provided. In the event Landlord shall default in the performance of any of the terms, covenants, agreements, and conditions of the Foundation Lease to be performed on Landlord’s part, Tenant shall have the right, within the grace period available to Landlord for curing such default or such additional time as may be granted to Tenant 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 the Foundation shall accept such payment or performances by or on behalf of Tenant as though the same had been done or performed by Landlord. ii. In the case of a Monetary Default by Landlord, the Foundation will take no action to effect a termination of the Foundation Lease by reason thereof unless such default has continued beyond forty-five (45) days after the Foundation shall have served a copy of notice of such default upon Tenant and its Subleasehold Mortgagee, it being the intent hereof and the understanding of the parties that Tenant shall be allowed not less than fifteen (15) days in addition to the thirty (30) days granted to Landlord to cure any Monetary Default of Landlord. iii. In the case of any Non-Monetary Default by Landlord, Tenant shall be allowed, in addition to any grace or cure period granted to Landlord, an additional thirty (30) days following the expiration of any grace or cure period granted to Landlord within which to cure such Non-Monetary Default, or if such default cannot reasonably be cured within such thirty (30) days, to commence such cure within such thirty (30) days following the expiration of any grace period granted to Landlord and to diligently prosecute the cure to completion, and during any such period the Foundation will take no action to effect a termination of the Foundation Lease by reason thereof. (c) New Lease. In the event that (i) Landlord (or any successor to Landlord’s interest in the Foundation Lease, including any Leasehold Mortgagee or its designee) fails to exercise any Extension Option prior to the deadline to do so under the Foundation Lease (except if Landlord, or any successor to Landlord’s interest in the Foundation Lease including any Leasehold Mortgagee or its designee, or Tenant has validly exercised the Purchase Option and thereafter closes on the acquisition of the Premises and otherwise effectuates the transactions contemplated thereby), (ii) Landlord (or any successor to Landlord’s interest in the Foundation Lease, including any Leasehold Mortgagee or its designee, but expressly excluding Tenant) validly exercised the Purchase Option but thereafter fails to close on the acquisition of the Premises and otherwise effectuate the transactions contemplated thereby, or (iii) the Foundation Lease is terminated for any reason (provided that if a new ground lease demising the Overall Parcel or the MOB Parcel to any Leasehold Mortgagee or its designee is executed by the Foundation, the Ground Sublease shall remain in effect and otherwise unmodified and this clause (iii) shall not apply), expires, is surrendered or rejected in a bankruptcy proceeding with respect to Page 174 of 329 Recognition Agreement - Page 4 Highlands Ranch MOB Landlord, then the Foundation shall give prompt notice thereof to Tenant and any Subleasehold Mortgagee. The Foundation, within thirty (30) days after receiving a written request therefor from Tenant, which shall be given within sixty (60) days after notice from the Foundation is received by Tenant and any Subleasehold Mortgagee of such termination, expiration, surrender or failure to exercise an Extension Option, as applicable, will execute and deliver a new lease of solely the MOB Parcel, improvements and related rights and easements to Tenant containing the same covenants, agreements, terms, provisions, and limitations as are contained herein and in the Ground Sublease, subject to reasonable modification as requested by Tenant to reflect the direct relationship between the Foundation and Tenant without Landlord (e.g. preservation of extension options, etc.), and shall execute, deliver and record such documentation as reasonably requested by Tenant to provide that all easements and other rights set forth in the Construction, Operation and Reciprocal Easement Agreement (the “COREA”) and any other easements or other agreements granted by Landlord to Tenant in accordance with the Foundation Lease (or otherwise approved in advance by the Foundation) in connection with Tenant’s development and operation of the MOB Parcel (collectively, the “MOB Easements”) will be binding on the Foundation’s (or its successor’s) fee interest in the Overall Parcel for the benefit of the MOB Parcel, provided that Tenant shall (A) pay to the Foundation, simultaneously with the delivery of such new lease, all unpaid rent due under the Foundation 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 the Foundation in connection with the termination and the preparation and delivery of the new lease and any defaults by Landlord for which Tenant properly received notice by Landlord as and when required by Section 2(b)(i) of this Agreement, and (B) Tenant shall commence and diligently proceed to cure all defaults existing under the Foundation Lease which are susceptible to cure by Tenant, in each case under clauses (A) and (B) as and to the extent applicable solely to the MOB Parcel (e.g. the MOB Parcel’s pro rata share of Rent as determined based upon its proportionate share of the Overall Parcel on a square footage basis). For the period of time after termination or expiration of the Foundation Lease but prior to the execution and delivery of the new lease, the Ground Sublease will be deemed to remain in effect as a direct lease with the Foundation as Landlord, and Landlord shall not disturb or otherwise interfere with Tenant’s possession of the MOB Parcel and rights under the MOB Easements. For the avoidance of doubt, Tenant will have no right to a new lease in accordance with this Section 2(c) (and the Ground Sublease shall continue as a direct lease by Landlord to Tenant) if Landlord has acquired fee ownership of the MOB Parcel, or Landlord has timely exercised the Purchase Option and thereafter Landlord (or its designee or assignee permitted in accordance with the Foundation Lease) acquires fee ownership of the Overall Parcel. If Tenant does enter into a new, direct lease with the Foundation, Tenant agrees to reasonably cooperate with the Foundation, at the Foundation’s sole cost and expense, with respect to any reconfiguration of the parking servicing the MOB Parcel, provided that at all times the Parking Requirements (as such term is defined in the COREA) shall be satisfied within the MOB Parking Zone (as such term is defined in the COREA). (d) No Modifications. No cancellation, modification or amendment of the Foundation Lease affecting, directly or indirectly, Tenant, the MOB Parcel or the MOB Easements, shall be entered into without Tenant’s prior written consent. Any modification Page 175 of 329 Recognition Agreement - Page 5 Highlands Ranch MOB or amendment of the Ground Sublease made without the Foundation’s prior written consent will not be binding upon the Foundation and will not be included in the terms of a direct lease as provided in Section 2(c). (e) No Waiver of Landlord Performance. Nothing in this Section 2 shall be deemed to relieve the Landlord of any of its obligations under the Foundation Lease. (f) No Qualified Assignee Requirement. For the sake of clarity, the Foundation, Landlord and Tenant acknowledge and agree that the Qualified Assignee requirements set forth in Article 7 of the Foundation Lease do not apply to any Tenant under the Ground Sublease, including with respect to any rights Tenant may exercise pursuant to this Agreement. 3. Subleasehold Mortgagee Agreements. (a) Notwithstanding anything to the contrary in the Foundation Lease, each Subleasehold Mortgagee shall be entitled to exercise the rights of Tenant under Sections 2(b) and (c) of this Agreement. If reasonably requested by any Subleasehold Mortgagee, each of the Foundation, Landlord and Tenant agree to enter into any amendments or modifications to this Agreement, or enter into another agreement or agreements on substantially similar terms, in each case intended to secure the survival and financeability of the Ground Sublease as contemplated hereby but which do not materially reduce any rights or increase any material obligations of the Foundation or Landlord hereunder. Tenant will pay to the Foundation, within thirty (30) days following written demand by the Foundation, the actual, reasonable, out-of-pocket costs and expenses (including attorneys’ fees) incurred by the Foundation in connection with the negotiation and execution of any modifications, amendments or other agreements requested by any Subleasehold Mortgagee pursuant to this Section 3(a). (b) The Foundation agrees that the Foundation Lease and this Agreement will continue in force, unabated, in the event any Subleasehold Mortgagee or its designee acquires Tenant’s interest under the Ground Sublease or enters into a new sublease pursuant to the terms of the Ground Sublease, and such Subleasehold Mortgagee or designee shall be entitled to all rights of Tenant under this Agreement. (c) Following a foreclosure (or deed in lieu of foreclosure) and acquisition of the Overall Parcel, the MOB Parcel or Landlord’s leasehold interest under the Foundation Lease by a Leasehold Mortgagee (i) the Ground Sublease will not be terminated and Tenant’s possession of the MOB Parcel will not be disturbed as a result of such foreclosure (or deed in lieu of foreclosure), provided that no Event of Default under the Ground Sublease has occurred and is continuing, and (ii) Tenant (or Subleasehold Mortgagee following a foreclosure or receipt of a deed in lieu of foreclosure by Subleasehold Mortgagee) will continue to be entitled to exercise the rights of Tenant under Sections 2(b) and (c) of this Agreement. (d) Landlord and any Leasehold Mortgagee will enter into such commercially reasonable form of non-disturbance and attornment agreement as may be requested from Page 176 of 329 Recognition Agreement - Page 6 Highlands Ranch MOB time to time by Tenant in furtherance of the provisions of this Section 3 and the financeability of Tenant’s interests under the Ground Sublease. Further, each Leasehold Mortgagee and Subleasehold Mortgagee shall use commercially reasonable efforts to coordinate the exercise by Leasehold Mortgagee of its rights as a Leasehold Mortgagee under the Foundation Lease and Subleasehold Mortgagee’s exercise of its rights under the Ground Sublease and this Agreement. 4. Notice. Any notice or demand required or given hereunder or under the Foundation Lease to the Foundation, Landlord, Tenant, a Leasehold Mortgagee or a Subleasehold Mortgagee shall be in writing and shall considered to have been duly and properly given if given in accordance with the Section 17(3) of the Foundation Lease. The parties’ addresses are as follows: To Tenant: c/o Remedy Medical Properties, Inc. 800 W Madison Street, Suite 400 Chicago, IL 60607 Attention: Peter Westmeyer And a copy to: Greenberg Traurig, LLP 1840 Century Park East Suite 1900 Los Angeles, CA 90067 Attention: Gregory Fishman To Foundation: Englewood McLellan Reservoir Foundation 1000 Englewood Parkway Englewood, Colorado 80110 Attention: President And a copy to: Spencer Fane LLP 1700 Lincoln St., Suite 2000 Denver, Colorado 80203 Attention: H. Michael Miller, Esq. and City of Englewood 1000 Englewood Parkway Englewood, Colorado 80110 Attention: City Attorney To Landlord: University of Colorado Health 12401 East 17th Avenue Mail Stop A-037 Aurora, Colorado 80045-0508 Attention: Director of Real Estate Page 177 of 329 Recognition Agreement - Page 7 Highlands Ranch MOB And a copy to: University of Colorado Health 12401 E. 17th Avenue, MS F415 Aurora, Colorado 80045-0508 Attn: Chief Legal Officer and Sheppard Mullin 333 South Hope Street, 43rd Floor Los Angeles, California 90071-1422 Attention: Timothy Reimers & Scott Timpe Such addresses for a party may be changed by such party from time to time by delivery of notice to the other parties given in the same manner as provided in the Foundation Lease, and additional notice parties and addressees, including those of a Subleasehold Mortgagee, may be added by written notice to the Foundation, Landlord, Tenant and any other notice parties, as applicable. 5. Recitals; Definitions. The recitals are hereby incorporated by reference into this Agreement as if set forth herein. 6. Binding Effect. This Agreement shall run with the land and be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns including but not limited to any holder of a mortgage or deed of trust on the fee interest in the Overall Parcel or MOB Parcel, Subleasehold Mortgagees, Leasehold Mortgagees and their respective nominees or designees. 7. Recording. Tenant will cause this Agreement to be recorded in the Land Records of Douglas County, Colorado. 8. Counterparts. This Agreement may be executed in any number of counterparts and each of the counterparts shall be considered an original and all counterparts shall constitute but one and the same instrument. 9. Entire Agreement. This Agreement and the exhibits hereto, which are incorporated herein by this reference, shall constitute the entire agreement between the parties with respect to the subject matter hereof. This Agreement may not be changed or modified orally or in any manner other than by any agreement in writing signed by the parties hereto. No waiver of any of the terms or conditions of this Agreement and no waiver of any default or failure of compliance shall be effective unless in writing and no waiver furnished in writing shall be deemed to be a waiver of any other term or provision or any future condition of this Agreement. 10. Applicable Law. This Agreement shall be governed by the law of the State of Colorado. 11. Litigation Expenses. In the event of any litigation arising out of any dispute or controversy concerning this Agreement, the party or parties not prevailing in such dispute shall pay any and all costs and expenses incurred by the prevailing party or parties, including, without Page 178 of 329 Recognition Agreement - Page 8 Highlands Ranch MOB limitation, reasonable attorneys’ fees and expenses, which shall include fees and expenses of in- house attorneys. 12. Time Is of the Essence. Time is of the essence of this Agreement and the performance of each of the covenants and agreements herein. 13. Conflict. In the case of a conflict between the terms of the Foundation Lease or the Ground Sublease and the terms of this Agreement, the terms of this Agreement shall control. Nothing in this Agreement shall be construed to derogate in any way from any rights granted to any Subleasehold Mortgagee under the Ground Sublease. 14. Representations and Warranties. Each of the Foundation, Landlord and Tenant hereby makes the following representations, each as of the date hereof, to the other parties hereto and to any Subleasehold Mortgagee: This Agreement and all agreements, instruments and documents herein provided to be executed by the applicable party are duly authorized, executed and delivered by and are binding upon such party. The applicable party has the capacity and authority to enter into this Agreement and consummate the transactions herein provided without the consent or joinder of any other party, except in each case as the same have previously been obtained. This Agreement has been duly executed and delivered and constitutes the legal, valid and binding obligation of such party, enforceable against the applicable party in accordance with its terms, subject to (a) applicable bankruptcy, insolvency, reorganization, moratorium or similar other laws or enactments in effect now or in the future affecting the enforceability of creditors’ rights generally, and (b) the exercise of judicial discretion. No consent, approval, authorization or order of, or declaration, filing or registration with, any governmental authority or other person or entity is required in connection with the execution and delivery of this Agreement and the consummation of the actions contemplated hereby by such party, except in each case as the same have been previously obtained. 15. Survival. This Agreement shall survive the termination of the Foundation Lease and the Ground Sublease. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the respective dates of acknowledgement, to be effective as of the date first above written. [Remainder of page intentionally left blank; signature pages follow] Page 179 of 329 Recognition Agreement - Signature Page Highlands Ranch MOB ENGLEWOOD/MCLELLAN RESERVOIR FOUNDATION, a Colorado nonprofit corporation By: Name: Title: THE STATE OF COLORADO § § COUNTY OF § This instrument was acknowledged before me this ____ day of _______________, 202[_] by __________________________, __________________ of ENGLEWOOD/MCLELLAN RESERVOIR FOUNDATION, a Colorado nonprofit corporation, on behalf of said corporation. Notary Public, State of Colorado (printed name) My Commission Expires: Page 180 of 329 Recognition Agreement - Signature Page Highlands Ranch MOB UNIVERSITY OF COLORADO HEALTH, a Colorado nonprofit corporation By: Name: Title: THE STATE OF COLORADO § § COUNTY OF § This instrument was acknowledged before me this ____ day of _______________, 202[_] by __________________________, __________________ of UNIVERSITY OF COLORADO HEALTH, a Colorado nonprofit corporation, on behalf of said corporation. Notary Public, State of Colorado (printed name) My Commission Expires: Page 181 of 329 Recognition Agreement - Signature Page Highlands Ranch MOB HIGHLANDS RANCH MP RK6, LLC, a Delaware limited liability company By: Name: Title: STATE OF ILLINOIS ) ) SS COUNTY OF COOK ) On this ___ day of , 2024, before me, a Notary Public in and for the State and County aforesaid, personally appeared , as Authorized Signatory of , a Delaware limited liability company, known to me (or satisfactorily proven) and acknowledged that he or she, as such Authorized Signatory, being authorized to do so on behalf of such company, executed the foregoing instrument as the voluntary act and deed of said company for the purposes therein contained by signing the name of the a limited liability company by himself or herself as such Authorized Signatory. IN WITNESS WHEREOF, I hereunto set my hand and official seal. (Signature of Notary) (Legibly Print or Stamp Name of Notary) My commission expires: (official seal) Page 182 of 329 Recognition Agreement - Signature Page Highlands Ranch MOB Shea Consent Shea hereby consents to this Agreement and to the recording of this Agreement in the real property records of Douglas County, Colorado, and agrees that this Agreement will remain in effect until the expiration or sooner termination of the Ground Sublease. SHEA: CENTRAL PARK AT HIGHLANDS RANCH, LLC, a Colorado limited liability company By: Shea Properties Management Company, Inc., a Delaware corporation, its Manager By: Name: Title: Assistant Secretary By: Name: Title: Assistant Secretary Page 183 of 329 Recognition Agreement - Signature Page Highlands Ranch MOB THE STATE OF [_______] ) COUNTY OF [_______] ) This instrument was acknowledged before me on _________, 202[_] by [__________], [____________] of [______________], a [______________], on behalf of said limited liability company. Notary Public, State of [______] (printed name) My Commission Expires: THE STATE OF [_______] ) COUNTY OF [_______] ) This instrument was acknowledged before me on _________, 202[_] by [__________], [____________] of [______________], a [______________], on behalf of said limited liability company. Notary Public, State of [______] (printed name) My Commission Expires: Page 184 of 329 EXHIBIT A OVERALL PARCEL All of Lot 2A, Highlands Ranch Filing No. 156, 1st Amendment, County of Douglas, State of Colorado, except the Remedy Tract. Page 185 of 329 EXHIBIT B MOB PARCEL Page 186 of 329 Pa g e 1 8 7 o f 3 2 9 Pa g e 1 8 8 o f 3 2 9 GROUND SUBLEASE between UNIVERSITY OF COLORADO HEALTH, a Colorado nonprofit corporation and HIGHLANDS RANCH MP RK6, LLC, a Delaware limited liability company Dated as of ________, 2024 Page 189 of 329 GROUND SUBLEASE THIS GROUND SUBLEASE (“Sublease”) is made and entered into as ________, 2024 (the “Effective Date”), by and between University of Colorado Health, a Colorado nonprofit corporation (“Sublandlord”) and Highlands Ranch MP RK6, LLC, a Delaware limited liability company (“Subtenant”). RECITALS This Sublease is entered into upon the basis of the following facts, understandings and intentions of the parties: A. Englewood/McLellan Reservoir Foundation, a Colorado nonprofit corporation (“Master Landlord”) is the fee owner of that certain real property consisting of 33.283 acres (the “Master Ground Leased Premises”) which is legally described in Exhibit “A” attached hereto, which has the address of 1500 Park Central Drive, in the City of Highlands Ranch (“City”), in the state of Colorado (“State”), as further described in the Master Ground Lease (defined below). Master Landlord ground leased the Master Ground Leased Premises to Central Park at Highlands Ranch, LLC, a Colorado limited liability company (“Shea”) pursuant to that certain Ground Lease dated April 5, 2016 (as the same has previously been and may hereafter be amended, modified, or restated, the “Master Ground Lease”). Shea, as assignor, assigned to Sublandlord, as assignee, all rights, title and interest in the Master Ground Leased Premises and the Master Ground Lease, except for the Retained Rights (as defined below) pursuant to that certain Agreement of Assignment and Assumption of Ground Lease dated May 25, 2016 (“Master Ground Lease Assignment”). In connection with the Master Ground Lease Assignment, Shea and Sublandlord entered into that certain Declaration of Covenants, Conditions and Restrictions dated May 25, 2016 and recorded in the Official Records of Douglas County, Colorado on May 26, 2016 as Document No. 2016033134 (the “Shea CC&Rs”). The “Retained Rights” retained by Shea as described in the Master Ground Lease Assignment are referred to in this Sublease as the “Retained Rights”. B. Sublandlord desires to sublease to Subtenant, and Subtenant desires to sublease from Sublandlord, that certain portion of the Master Ground Leased Premises (the “Ground Subleased Premises”) so that Subtenant can construct a medical office building on the Ground Subleased Premises consisting of approximately 119,000 rentable square feet of space to be used to provide medical services and ancillary services (as altered, remodeled, refurbished, reconstructed, and/or replaced from time to time, collectively the “MOB”), which parcel is as approximately depicted in Exhibit “B-1” and described in Exhibit “B-2” attached hereto and incorporated in this Sublease by this reference and is more particularly depicted on the survey dated November 8, 2023 prepared by Precision Survey and Mapping and bearing project number R13637-UCHealth (the “Survey”) attached hereto as Exhibit “C” and incorporated by reference in this Sublease. C. Concurrently with the execution of this Sublease, Sublandlord and Subtenant will enter into certain Ancillary Documents (as defined below) to document certain easements as more particularly described therein and pursuant to which Sublandlord and Subtenant have also agreed, among other things, to certain obligations relating to construction and maintenance of certain Page 190 of 329 2 common areas located upon the Master Ground Leased Premises, all as more particularly described in the Ancillary Documents. D. Sublandlord will lease approximately 30,000 rentable square feet of space in the MOB from Subtenant pursuant to one or more medical office building leases in substantially the form attached as Exhibit “D” (the “MOB Leases”), to be dated of or about even date herewith. E. The parties desire to establish the terms and conditions of the Sublease to fulfill the foregoing objectives. F. Sublandlord also owns and operates a community hospital commonly known as the UC Health Highlands Ranch Hospital (the “Hospital”) located on the Master Ground Leased Premises. NOW, THEREFORE, in consideration of the mutual covenants and promises of the parties, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree that the foregoing recitals are true and correct and incorporated herein by this reference, and further agree as follows: ARTICLE 1 - DEMISE OF GROUND SUBLEASED PREMISES Section 1.1 Ground Subleased Premises. Sublandlord, for and in consideration of the rents, covenants and conditions herein set forth, does hereby lease to Subtenant, and Subtenant does hereby lease from Sublandlord, the Ground Subleased Premises, subject to the terms, conditions and provisions hereof. To the extent applicable, Sublandlord and Subtenant agree that the Ground Subleased Premises shall include those certain easements, rights, covenants and obligations relating to access, parking, shared utilities and services, and the like (collectively, the “Ancillary Documents”), as specifically described in Exhibit “B-3” attached hereto and incorporated herein by reference. Section 1.2 Sublandlord’s Warranty of Title. Sublandlord hereby represents and warrants that it has a leasehold interest in the Ground Subleased Premises, and that the Ground Subleased Premises is free and clear of any liens, mortgages or other encumbrances other than the Master Ground Lease, this Sublease, and those liens, mortgages and other encumbrances listed on Exhibit “E” attached to this Sublease and incorporated herein by reference (collectively, the “Permitted Encumbrances”). Section 1.3 Quiet Enjoyment. Sublandlord covenants and agrees that Subtenant, upon paying the rent and other charges herein provided and observing and keeping the covenants, conditions, and terms of this Sublease on Subtenant’s part to be kept or performed, shall lawfully and quietly hold, occupy and enjoy the Ground Subleased Premises during the “Term ” and any “Extended Term” (as defined in Article 2) of this Sublease without hindrance of Sublandlord or any person claiming by, through or under Sublandlord, subject only to the Ancillary Documents and Permitted Encumbrances in existence as of the Effective Date or as otherwise entered into after the Effective Date in accordance with this Sublease or the COREA. Notwithstanding the foregoing, Sublandlord hereby retains the right to enter upon and inspect the Ground Subleased Premises and MOB for any legitimate purpose hereunder at reasonable times and upon reasonable advance notice (except in emergencies, in which even no prior notice is required), subject to the Page 191 of 329 3 rights of any tenants under any leases for space at the MOB. Following the Effective Date, Sublandlord will not enter into any easements, liens, mortgages, or other encumbrances affecting the Ground Subleased Premises except (i) in accordance with Section 6.4.6 below, or (ii) with Subtenant’s written consent, which consent may be granted or withheld in Subtenant’s sole and absolute discretion with respect to liens, mortgages and other forms of secured obligations and which will not be unreasonably withheld, conditioned, or delayed with respect to other encumbrances. Section 1.4 Documentary Stamp Tax and Intangible Tax. Notwithstanding anything in this Sublease to the contrary, in the event that at any time this Sublease is determined to be a taxable instrument, or represent a taxable transaction by the State under provisions relating to documentary stamp tax, or intangible tax or similar taxes, then payment of any such tax or taxes shall be borne by Subtenant. Section 1.5 Fee Ownership of the MOB. Notwithstanding anything in this Sublease to the contrary, the Sublandlord and Subtenant acknowledge and agree that during the Term (including any Extended Term) Subtenant shall have full ownership rights in fee to the MOB and any and all other improvements upon the Ground Subleased Premises. For the avoidance of doubt, for income tax purposes, Subtenant shall be considered to be the owner of the MOB during the Term and shall be entitled to claim all depreciation, cost recovery, and other tax deductions with respect thereto. Section 1.6 Compliance with Law, Matters of Record and Ancillary Documents. Subtenant and Sublandlord must comply with the terms of the Ancillary Documents, all other matters of record which affect the Ground Subleased Premises (including, without limitation, easements, covenants, restrictions, and obligations) as of the Effective Date or which are entered into after the Effective Date in accordance with this Sublease or the COREA, and all applicable laws, at all times; provided that so long as Sublandlord or an Affiliate thereof is then a tenant or occupant of the MOB, Subtenant shall be deemed to be in compliance with the provisions of this Section 1.6 to the extent such non-compliance is caused by the acts or omissions of Sublandlord or such Affiliate or otherwise constitutes a default by Sublandlord or its Affiliates under an MOB Lease. ARTICLE 2 - LEASE TERM Section 2.1 Sublease Commencement. The commencement date of this Sublease (“Sublease Commencement Date”) shall be the Effective Date. Prior to the Sublease Commencement Date, Subtenant shall not have any possessory, legal or equitable right, title or interest in or to the Ground Subleased Premises; however, Subtenant may deliver a copy of this Sublease to potential lenders in connection with the financing of the MOB. Section 2.2 Sublease Term. The term of this Sublease shall be for a period commencing on the Sublease Commencement Date and continuing through April 4, 2036 (the “Initial Term”). As used in this Sublease, “Term” shall refer to the Initial Term, and any applicable Extended Term (as defined below). The last day of the Initial Term of this Sublease shall be April 4, 2036 (the “Expiration Date”), unless sooner terminated or extended as herein provided. Page 192 of 329 4 Section 2.3 Rent Commencement. Rent payments shall commence on the Commencement Date (as such term is defined in Sublandlord’s MOB Lease dated as of the Effective Date) of Sublandlord’s MOB Lease dated as of the Effective Date (the “Rent Commencement Date”). Section 2.4 Options to Extend. Subtenant may, at its option and subject to the conditions herein stated, extend the original Term of this Sublease for six (6) additional periods of ten (10) years each, and one (1) final option of five (5) years, subject to all the provisions of this Sublease, including provisions for adjustments to the rent. Each additional option period in effect hereunder shall be referred to as an “Extended Term.” The Expiration Date, as used herein, shall be deemed extended, to the extent applicable, to the last date of each Extended Term of this Sublease. Subtenant agrees that each Extended Term will not impose any additional requirements or obligations upon Sublandlord, the Ground Subleased Premises being leased upon renewal “As Is”, except for the Base Annual Rent (as defined below) which will be adjusted the first day of each Extended Term and each anniversary thereafter in accordance with Section 3.2 below. Each option for an Extended Term shall be deemed exercised automatically without any action by any party unless Subtenant shall give written notice to Sublandlord irrevocably declining the option not later than two hundred and ten (210) days prior to expiration of the Term, and each Extended Term, as may be applicable. Notwithstanding anything to the contrary set forth herein, (I) if the term of the Master Ground Lease is extended for any reason, including any amendment, modification, renewal, entry into a replacement or new ground lease or otherwise, then the then-current Term (whether the Initial Term or the then-current Extended Term) of this Sublease shall automatically be extended by the lesser of (a) the corresponding period of time by which the term of the Master Ground Lease is extended, and (b) an amount equal to seventy-five (75) years minus the number of years that have already elapsed of the Term since the Effective Date, and (II) if the Purchase Option under the Master Ground Lease is exercised by Sublandlord, then the then-current Term (whether the Initial Term or the then-current Extended Term) of this Sublease shall automatically be extended by an amount equal to seventy-five (75) years minus the number of years that have already elapsed of the Term since the Effective Date. Upon the occurrence of either (I) or (II), (A) the Extended Terms (starting with the last Extended Term until the same has been reduced in full, and continuing in the same manner in reverse order of Extended Terms) will be reduced such that the total Term of this Sublease (including any remaining Extended Terms following such reduction) is equal to a period of seventy-five (75) years following the Effective Date, and (II) the parties shall enter into an amendment of this Sublease memorializing the extended Term and reduction of Extended Terms, provided that this paragraph shall remain in full force and effect despite any failure to enter into such amendment, and for the avoidance of doubt any such failure shall not be deemed to disregard, amend or modify this paragraph or render the applicable extension of the Term and reduction of the Extended Terms ineffective. Section 2.5 Reversion. At the Expiration Date or sooner valid termination of this Sublease by Sublandlord, whether by default, eviction, or otherwise (except in the instance of a new ground sublease issued to a Recognized Mortgagee in accordance with Section 6.3 hereof or as may be otherwise set forth in that certain Recognition Agreement by and among Master Landlord, Sublandlord and Subtenant of or about even date herewith (as may be amended or modified from time to time, the “Master Landlord Recognition Agreement”), including upon a Page 193 of 329 5 new direct lease between Master Landlord and Subtenant,) the MOB, Ground Subleased Premises and all other improvements upon the Ground Subleased Premises shall, without compensation to Subtenant or any other party, then become the sole property of Sublandlord or Sublandlord’s designee subject to any leases then in effect, free and clear of all claims to or against them by Subtenant or any third person, and all liens, security interests, and encumbrances against the Ground Subleased Premises, other than the Permitted Encumbrances, and any other encumbrances or liens against the Ground Subleased Premises expressly joined in or consented to by Sublandlord, and Subtenant shall indemnify, defend and hold Sublandlord harmless against all liability and loss, including but not limited to reasonable attorneys’ fees and costs through litigation and all appeals, arising from such claims, liens against the Ground Subleased Premises, security interests and encumbrances against the Ground Subleased Premises and from Sublandlord’s exercise of the rights conferred by this section, except to the extent such claims arise from the acts or omissions of any Sublandlord Representatives (as hereinafter defined). All alterations, improvements, additions and utility installations (whether or not such utility installation constitutes trade fixtures of Subtenant) which may be made on the Ground Subleased Premises, shall be the property of Sublandlord and shall remain upon and be surrendered with the Ground Subleased Premises at the Expiration Date or sooner termination of this Sublease. Notwithstanding the provisions of this paragraph, the machinery and equipment of Subtenant or any tenant of the MOB, other than that which is either (a) affixed to the Ground Subleased Premises so that it cannot be removed without damage to the Ground Subleased Premises or (b) necessary for the continued operation of the MOB and other improvements located on the Ground Subleased Premises, shall remain the property of Subtenant or such tenant or other such occupant of the MOB, as may be applicable, and may be removed prior to the expiration or termination of this Sublease. The obligations of Subtenant under this Section 2.5 will survive the expiration or sooner termination of this Sublease for a period of one (1) year. Section 2.6 Subtenant Protections. 2.6.1. Sublandlord shall not terminate the Master Ground Lease, and Sublandlord shall not amend or modify the Master Ground Lease in a manner affecting the Ground Subleased Premises or this Sublease or Subtenant’s interest therein without the prior written consent of Subtenant, which consent may be granted or withheld in its sole and absolute discretion. 2.6.2. Sublandlord shall timely exercise Sublandlord’s Extension Options (as defined therein) set forth in Article 3 Section 2 of the Master Ground Lease so long as (i) Subtenant has not affirmatively declined to exercise the concurrent extension option set forth in Section 2.4, and (ii) Sublandlord has not exercised remedies pursuant to Section 13.2 and terminated this Sublease pursuant to Section 13.2.1 as a result of any uncured default by Subtenant. 2.6.3. If Sublandlord or an Affiliate thereof acquires fee title to the Master Ground Leased Premises or any portion thereof, the Sublandlord shall not terminate the Master Ground Lease without the prior written consent of Subtenant, not to be unreasonably withheld, conditioned or delayed. 2.6.4. If Sublandlord or an Affiliate thereof acquires fee title to the Master Ground Leased Premises or any portion thereof and the Master Ground Lease is terminated, Page 194 of 329 6 merged or collapsed, this Sublease shall remain in full force and effect and shall be deemed to be a direct ground lease with the fee owner with respect to the Ground Subleased Premises. 2.6.5. Notwithstanding anything to the contrary set forth in this Sublease, this Sublease shall be subject to the terms of the Master Landlord Recognition Agreement (as such term is defined herein). 2.6.6. Sublandlord shall not amend or modify any of the Retained Rights in a manner adversely affecting the Ground Subleased Premises or this Sublease or Subtenant’s interest therein or in any of the Ancillary Documents, and shall at all times comply in all material respects with the terms of all documents evidencing such Retained Rights or related thereto, and Sublandlord shall provide copies of all material written notices, including notices of default, received from or delivered to Shea which affects the Ground Subleased Premises. 2.6.7. Sublandlord shall provide copies of all written notice of default under the Master Ground Lease it receives or delivers promptly after such receipt or delivery. 2.6.8. Sublandlord shall provide copies of all material written notices, including notices of default, it receives or delivers under any Ancillary Document or any other document of record which affects the Ground Subleased Premises promptly after such receipt or delivery. 2.6.9. The Memorandum of Lease shall contain references to the provisions of this Section 2.6. ARTICLE 3 - RENT, TAXES AND UTILITIES Section 3.1 Base Annual Rent. Subtenant agrees to pay Sublandlord, for the use and occupancy of the Ground Subleased Premises, “Base Annual Rent” in the amount of $241,920.00 payable in monthly installments of $20,160.00 in advance on the Rent Commencement Date and on the first day of each month thereafter for the remainder of the Term and each Extended Term, subject to adjustment as described in Section 3.2. Simultaneously with and in addition to payment of Base Annual Rent, Subtenant agrees to pay any applicable state sales tax due on the rent. There shall be no increases in the Base Annual Rent other than as set forth in this Article 3. The term “rent,” as used herein, shall mean Base Annual Rent and all additional rent and other monetary amounts becoming due and payable under this Sublease. Section 3.2 Base Annual Rent Adjustments. 3.2.1. On the first (1st) anniversary of the first (1st) day of the month following the Rent Commencement Date (or on the first (1st) anniversary of the Rent Commencement Date if the Rent Commencement Date is the first day of a calendar month) and on each anniversary thereafter (except for the first day of any Extended Term when the Base Annual Rent will be adjusted pursuant to Section 3.2.2 below) through the expiration of the Term (including any Extended Term), the Base Annual Rent shall be increased by two and one-half percent (2.5%) over the immediately preceding rental amount. 3.2.2. Effective as of the first (1st) day of each Extended Term, Base Annual Rent will be adjusted to the Fair Market Rent (as defined below), but in no event will the Base Annual Page 195 of 329 7 Rent be less than the Base Annual Rent that was payable immediately prior to such adjustment. As used in this Sublease, “Fair Market Rent” means the fair market rental rate (calculated on an annual basis) of the Ground Subleased Premises, which will be calculated based on the Ground Subleased Premises being vacant land only without assigning any value to any Improvements then constructed on the Ground Subleased Premises, and will be calculated based on the greater metropolitan area in which the Ground Subleased Premises are located. In the event Subtenant exercises an option to extend the Term by an Extended Term, Sublandlord and Subtenant will attempt to agree upon the Fair Market Rent using their good faith efforts. If, within ten (10) days following Subtenant’s exercise of an option to extend the Term by an Extended Term Sublandlord and Subtenant do not reach agreement on the Fair Market Rent as of the commencement of the applicable Extended Term, then Sublandlord and Subtenant will agree upon a date (which date must be no later than thirty-five (35) days after Subtenant’s exercise of its option to extend the Term by the Extended Term) for Sublandlord and Subtenant to exchange sealed envelopes containing their respective determinations of the Fair Market Rent. The sealed envelopes will be simultaneously opened in the presence of representatives of Sublandlord and Subtenant, and if the higher of the two determinations of Fair Market Rent is not more than 5% greater than the lower determination of Fair Market Rent, then the two values will be averaged and the average will be determined to be the Fair Market Rent applicable to the commencement of the applicable Extended Term. If the higher of the two determinations of Fair Market Rent is more than 5% greater than the lower determination of Fair Market Rent, then within ten (10) days Sublandlord and Subtenant will agree on the appointment of an arbitrator who must be a MAI licensed real estate appraiser with at least ten (10) years’ experience appraising commercial properties in the metropolitan area where the Ground Leased Premises are located. The determination of the arbitrator will be final, binding, and enforceable by any court of competent jurisdiction, and will be limited solely to determining whether Sublandlord’s or Subtenant’s determination of the Fair Market Rent exchanged in the sealed envelopes is closest to the arbitrator’s opinion of the Fair Market Rent of the Ground Subleased Premises. The arbitration must be conducted no more than thirty (30) days after the appointment of the arbitrator. Section 3.3 Taxes. 3.3.1. Real and Personal Property. From and after the Sublease Commencement Date, Subtenant shall pay or cause to be paid, without abatement, deduction, or offset, the following items: All real and personal property taxes, general and special assessments, and all other charges, assessments and taxes of every description, levied on or assessed against the Ground Subleased Premises, the MOB and other improvements located on the Ground Subleased Premises; personal property located on or in the Ground Subleased Premises, the MOB or improvements; the leasehold estate, or any leasehold estate, to the full extent of installments existing or newly assessed during the Term and any Extended Term, but excluding any capital gains taxes imposed in connection with the execution of this Sublease and any municipal, state, or federal income, gross receipts, inheritance, estate, succession, profit, capital, transfer, gains, or corporate franchise taxes imposed upon Sublandlord (collectively, “Taxes”). Subtenant shall also be required to pay for all development and impact fees for the initial construction of the Improvements, and all related construction and development expenses of the Improvements from and after the Sublease Commencement Date. Subtenant shall make all such payments directly to the appropriate charging or taxing authority before delinquency and before any fine, interest, or penalty shall become due or be imposed by operation of law for their nonpayment. If, however, the law expressly permits Page 196 of 329 8 the payment of any or all of the above items in installments (whether or not interest accrues on the unpaid balance), Subtenant may, at Subtenant’s election, utilize the permitted installment method, but shall pay each installment with any interest before delinquency and before any fine, interest, or penalty shall become due or be imposed by operation of law for their nonpayment. All payments of taxes or assessments or both, including permitted installment payments, shall be prorated for the initial Lease year and for the year in which the Sublease terminates. Subtenant shall at all times defend, indemnify and hold Sublandlord harmless from any and all losses, costs, damages or expenses (including reasonable attorneys’ fees) arising out of Subtenant’s breach of its covenants set forth in this Section 3.3.1, which indemnity shall survive the expiration or earlier termination of this Sublease. 3.3.2. Calculation of Real Estate Taxes. Sublandlord and Subtenant agree that Subtenant shall be responsible for the real estate taxes attributable to the Ground Subleased Premises as improved with the MOB. 3.3.3. Proof of Compliance. Subtenant shall furnish to Sublandlord, within thirty (30) days following the date when any tax, assessment, or charge (for which Subtenant is responsible hereunder) would become delinquent, receipts or other reasonably appropriate evidence establishing payment thereof. 3.3.4. Contesting Taxes. Subtenant shall have the right to contest or review by legal proceedings, as permitted under applicable law, any assessed valuation, real estate tax, or assessment; provided that, unless Subtenant has paid such tax or assessment under protest to the extent then payable, Subtenant shall furnish to Sublandlord proof reasonably satisfactory to Sublandlord that such protest or contest may be maintained without payment under protest. Sublandlord shall, if so requested by Subtenant, join in any proceeding for contest or review of such taxes or assessments, but the entire cost of such joinder in the proceedings (including all costs, expenses, and reasonable attorneys’ fees reasonably sustained by Sublandlord in connection therewith) shall be borne by Subtenant. Any amount already paid by Subtenant and subsequently recovered as the result of such contest or review shall be for the account of Subtenant. 3.3.5. Separate Tax Parcel. Sublandlord and Subtenant acknowledge and agree that (i) the Ground Subleased Premises is part of a larger portion of the land (said portion of land being the Master Ground Leased Premises), and (ii) the Ground Subleased Premises cannot be severed into a separate tax parcel prior to the date hereof. Sublandlord and Subtenant agree to use commercially reasonable efforts, including the preparation of any necessary plats, to cause the Ground Subleased Premises to be assessed separately from the balance of the Master Ground Leased Premises for real estate tax purposes (the “Tax Severance”). Sublandlord will use commercially reasonable steps to cause Master Landlord to cooperate with such Tax Severance in accordance with the terms of the Master Ground Lease. Any easements granted for the benefit of the Ground Subleased Premises are intended to be valued as part of the taxable parcel benefited by such easements. Sublandlord and Subtenant each will cooperate with the Tax Severance and in connection therewith Sublandlord and Subtenant agree to not unreasonably withhold their consent to the timely execution by each of them of any agreement, instrument or other documents which may be reasonably necessary to effect the same. Sublandlord may, at its option, contract with a third party to process the Tax Severance. In such event, Sublandlord and Subtenant shall each bear one-half (1/2) of the third party cost for Tax Severance, which shall be due within thirty (30) days Page 197 of 329 9 after receipt of invoices. Sublandlord and Subtenant further agree as follows with respect to the Tax Severance: (a) Sublandlord and Subtenant expressly acknowledge and agree that the terms regarding Subtenant’s obligation to pay Taxes set forth in this Section 3.3 shall be applicable following a Tax Severance. Unless and until the Tax Severance has occurred, Sublandlord shall deliver to Subtenant a copy of the applicable tax bill and Subtenant shall pay to Sublandlord within thirty (30) days after written demand (provided that such demand shall not be made earlier than sixty (60) days before a payment becomes due and is accompanied by a true and correct copy of the applicable tax bill for the Taxes then payable) Subtenant’s Share (as hereinafter defined) of all Taxes payable from and after the Sublease Commencement Date for the periods occurring after the Sublease Commencement Date. Sublandlord and Subtenant agree that, as of the date hereof and from time to time, Subtenant’s Share shall be equal to the number of acres/square feet in the Ground Subleased Premises, divided by the number of acres/square feet in the Master Ground Leased Premises and such Subtenant’s Share shall be applied to all Taxes payable by Subtenant, including the taxable value of the MOB and as further described in Sections 3.3.1 and 3.3.2. Following the Sublease Commencement Date unless and until the Tax Severance occurs, Sublandlord shall (subject to Sublandlord’s right to contest the amount or validity thereof by appropriate legal proceedings so long as Sublandlord either makes all such contested payments under protest or such contest may be maintained without payment under protest) timely pay all Taxes due for the Master Ground Leased Premises before any lien, fine, penalty, interest or other charge may be added for non-payment, provided that Subtenant has paid Subtenant’s Share thereof as computed above. Sublandlord shall furnish to Subtenant, within ninety (90) days following the date when date when any tax, assessment, or charge would become delinquent, receipts or other reasonably appropriate evidence establishing payment thereof. Sublandlord agrees to act in good faith without intent to unfairly overburden Subtenant in any estimated portion of the Taxes payable by Subtenant hereunder. Unless and until Tax Severance occurs, at the written direction of Subtenant, Sublandlord shall contest the amount or validity of any or all Taxes due for the Ground Subleased Premises by appropriate legal proceedings, and Sublandlord shall make all such contested payments under protest (unless such contest may be maintained without payment under protest). Any cost or expenses incurred by Sublandlord in connection with a contest of the Taxes pursuant to the foregoing shall be reimbursed by Subtenant within thirty (30) days following Sublandlord’s written demand. (b) In addition to Sublandlord’s covenant to pay Taxes attributable to the Master Ground Leased Premises prior to the Tax Severance in accordance with the terms of Section 3.3.5(a) above, subject to any contest by Sublandlord as permitted or required under Section 3.3.5(a) above, Sublandlord agrees to pay, as the same become due and payable and before any lien, fine, penalty, interest or other charge may be added for nonpayment, (i) all Taxes assessed against the Ground Subleased Premises, the Master Ground Leased Premises and any other real property now or hereafter owned by Sublandlord that is burdened by an easement for the benefit of Subtenant, and (ii) any roll-back taxes, charges or similar levies assessed against the Ground Subleased Premises and the Master Ground Leased Premises. In the event Sublandlord fails to make any such payments on or before the date required, then Subtenant may, at its option, make such payment on behalf of Sublandlord, and Sublandlord shall reimburse Subtenant for such expenditure, together with interest at the Default Rate, within thirty (30) days following written demand. Page 198 of 329 10 Section 3.4 Utilities. From and after the Sublease Commencement Date, Subtenant shall arrange and timely pay for, at its sole cost, or cause to be paid all charges for water, heat, gas electricity, cable, trash disposal, sewers and any and all other utilities (“Utilities”) used upon the Ground Subleased Premises throughout the Term and any Extended Term, including, without limitation, any connection and servicing fees, permit fees, inspection fees, and fees to reserve utilities capacity, including any such charges or fees incurred prior to the Sublease Commencement Date. Subtenant shall make or cause all such payments to be made directly to the appropriate utility as and when due. All Utilities on the Ground Subleased Premises will be separately metered from other areas on the Master Ground Leased Premises (but, for the avoidance of doubt, not necessarily for units within the MOB). Section 3.5 No Security Deposit. No security deposit is required hereunder. Section 3.6 Triple Net Rent. All Base Annual Rent payable hereunder shall be paid as “triple net” rent without deduction or offset, except as otherwise provided in this Sublease. It is the intent of the parties, except as is otherwise provided in this Sublease, that Base Annual Rent provided to Sublandlord shall be absolutely net to Sublandlord, and Subtenant shall pay all costs, charges, insurance premiums, Taxes, Utilities, expenses, and assessments of every kind and nature incurred for, against, or in connection with the Ground Subleased Premises, including without limitation, assessments, both regular and special, which may be due to any property associations by virtue of recorded declarations, covenants and restrictions affecting the Ground Subleased Premises, as same may be amended from time to time, accruing from and after the Sublease Commencement Date, except as expressly stated herein. All such costs, charges, insurance premiums, Taxes, Utilities, expenses and assessments covering the Ground Subleased Premises shall be approximately prorated upon the Sublease Commencement Date and upon the expiration or sooner termination of this Sublease, except for any expenses such as insurance premiums which are not being assumed by or transferred for the benefit of Sublandlord. Section 3.7 Late Payments. In the event Subtenant fails to pay any installment of Base Annual Rent or other sums hereunder to Sublandlord within thirty (30) days after the date that such installment or other charge is due (“Payment Breach”), Subtenant shall pay to Sublandlord on demand a late charge in an amount equal to five percent (5%) of such installment or other charge overdue in any month (“Late Fee”). Sublandlord and Subtenant acknowledge and agree that Sublandlord’s harm caused by Subtenant’s failure to make timely payments would be impossible or very difficult to accurately estimate, and that the Late Fee is a reasonable estimate of the anticipated or actual harm that might arise from such uncured Payment Breach and is not intended to constitute a penalty. ARTICLE 4- USE OF GROUND SUBLEASED PREMISES Section 4.1 Primary Use. Subtenant shall use or cause the use of the Ground Subleased Premises and any improvements thereon for the construction, reconstruction and operation of the MOB and such related and incidental uses thereto as permitted hereunder or, if the Sublandlord Operation Condition (as defined below) is not then satisfied, for any lawful purposes, and for no other uses. Section 4.2 Use of Medical Office Building. Page 199 of 329 11 4.2.1. Prohibited Use Restrictions. The parties acknowledge that, so long as Sublandlord owns or operates the Hospital or another medical-related facility such as a medical office building, free-standing clinic, free-standing emergency room, rehabilitation facility, imaging or diagnostic facility, urgent care center, clinical laboratory facility or ambulatory surgery center upon the Master Ground Leased Premises (the “Sublandlord Operation Condition”), the principal purpose of this Sublease is for the MOB to be constructed and occupied by tenants that provide medical services and ancillary services. So long as the Sublandlord Operation Condition is satisfied, the MOB shall be used, subject to the express terms of this Sublease, solely for medical offices and for the practice of medicine, and such other uses which are ancillary to a medical office or medical facilities (provided that for any space in the MOB whereby the use of the entire demised premises (and the applicable lease or leases with respect to the same) is merely ancillary to a medical office or medical facilities, e.g. a coffee shop, such demised premises shall not exceed 2,000 rentable square feet in the aggregate) (“Ancillary Use Leases”), and for any other purposes that are approved in advance and in writing by Sublandlord, in its reasonable discretion. Subtenant agrees that for so long as the Sublandlord Operation Condition is satisfied, it shall not use the MOB or any portion thereof, and, subject to Sections 13.1.5 and 13.1.9, it shall not permit the MOB or any portion thereof to be used by any occupant, tenant or subtenant of the MOB (other than Sublandlord or its Affiliates or their respective successors or assigns which may lease space in the MOB from time to time pursuant to the MOB Leases or otherwise), for the following services without the express prior written approval of the Sublandlord, which approval, except as otherwise provided in this paragraph, shall be at the sole discretion of the Sublandlord and may be withheld for any reason, reasonable or unreasonable, or for no reason at all (the “Prohibited Uses”): (a) ambulatory surgery procedures (as defined in the list of Medicare-covered ambulatory surgery procedures) or any other surgical or other procedures that require a general anesthetic (as opposed to only a local anesthetic); (b) physical therapy; (c) reference diagnostic imaging services (which include, without limitation, the following: fluoroscopy, computerized tomography (CT), radiation therapy, interventional radiology, mammography and breast diagnostics, nuclear medicine testing, magnetic resonance imaging (MRI) and positive emission tomography (PET)); (d) cardiac catheterization; (e) laboratory services; unless Sublandlord acknowledges in writing that such proposed laboratory services are not available to Subtenant or such occupants on a commercially reasonable basis at the Hospital; (f) intentionally omitted; (g) pharmaceutical or pharmacy services; (h) rehabilitation; (i) inpatient or extended care; (j) infusion; (k) home care; (l) durable medical equipment; (m) health plan or physician network services; (n) hospice; (o) respiratory center including sleep services; (p) dialysis; (q) gastroenterology; (r) endoscopy; (s) oncology center, including medical and radiation oncology; (t) urgent care; (u) inpatient behavioral health center; and (v) inpatient or outpatient drug or alcohol treatment center; provided, however, that Sublandlord’s consent shall not be required for x-ray, plane film radiography and ultrasound services, and any other services identified under subsections (a) through (e) above, with respect to tenants of the MOB or physician employees of such tenants performing x-ray, plane film radiography or ultrasound services or other services identified under subsections (a) through (e) as such services relate to their own patients where such tenants or physician employees of such tenants are the treating professionals and such services are provided incidental to any such tenants or physician employees of such tenants use of the MOB to the extent such services are customarily provided by a physician in the treatment of such physician’s patients in the ordinary and customary course of treatment within a physician office setting, provided that such services may be performed if: (i) they are performed under applicable law in a physician office setting, (ii) they are merely Page 200 of 329 12 ancillary and incidental to such physician’s primary medical practice and do not constitute the physician’s primary medical practice or specialty nor the predominant services rendered by such physician to such physician’s patients, (iii) such patients are not referred to such physician primarily for the purpose of obtaining such ancillary services, and (iv) with respect to the provision of x-ray or other high-resolution imaging services, the equipment utilized in the provision of such services either (I) is not customarily used primarily by full-service hospitals, or (II) if such equipment is customarily used primarily by full-service hospitals, at the time the applicable lease or other occupancy agreement is signed, the Hospital does not then offer such imaging services utilizing such equipment proposed to be provided; provided that in no event may magnetic resonance imaging (MRI), computerized tomography (CT), or positron emission tomography (PET) services be performed without the prior written consent of Sublandlord in its sole discretion. 4.2.2. Leases. (a) Until the date that is twelve months after the date on which Substantial Completion (as defined below) is achieved, Subtenant shall not enter into a lease (except Ancillary Use Leases or any lease for less than 5,000 rentable square feet) with any tenant pursuant to which the economic terms of such tenant’s lease is materially better than the economic terms of Sublandlord’s MOB Lease. (b) So long as the Sublandlord Operation Condition is satisfied, (i) all leases for the MOB (other than the MOB Leases and other leases entered into by Sublandlord or its Affiliate which may lease space in the MOB from time to time) shall contain the Prohibited Use restrictions set forth under Section 4.2.1, and (ii) all leases with Qualified Tenants (as defined below) or any other lease or sublease of the MOB shall require that such tenant or subtenant to maintain their status as Qualified Tenants throughout the term of such subtenant’s lease. 4.2.3. Prohibitions Not Applicable to Sublandlord. The provisions of Section 4.2 of this Article 4 to the contrary notwithstanding, Sublandlord or an Affiliate or purchaser of Sublandlord or of the Hospital shall be permitted to lease and use space in the MOB (including pursuant to the MOB Leases) to perform any of the services or businesses set forth as items (a) through (e), inclusive, of Section 4.2.1, or any other use which is compatible with services offered by the Hospital, and in no event shall Subtenant be in breach of or in default under any provision of this Sublease as a result of any such lease or use. 4.2.4. MOB Occupancy; Sublandlord’s ROFO. (a) So long as the Sublandlord Operation Condition is satisfied, Subtenant shall use commercially reasonable efforts to lease space in the MOB to (i) individual tenants who are licensed physician members of the active medical staff that are credentialed at the Hospital (“Active Medical Staff Members”), (ii) entities 100% owned by licensed physicians with respect to whom (A) each of the owners and employed physicians of such tenants who provide medical services in the space occupied by such tenants of the MOB are Active Medical Staff Members, and (B) such entity is not a Competitor, (iii) entities with respect to whom (A) each of the employed physicians of such tenants who provide medical services in the space occupied by such tenants of the MOB are Active Medical Staff Members, and (B) such entity is not a Competitor, or (iv) other tenants providing medical or medically-related services who are not Page 201 of 329 13 Competitors, and are not nor at any previous time have been excluded from participating in any federally funded health care program, including Medicare and Medicaid (collectively, “Qualified Tenants”). Notwithstanding anything to the contrary set forth in this Sublease, Qualified Tenants who meet the requirements of either subsection 4.2.4(a)(i), 4.2.4(a)(ii) or 4.2.4(a)(iii) above shall not require Sublandlord’s prior written approval, but Qualified Tenants who only meet the requirement of subsection 4.2.4(a)(iv) shall require Sublandlord’s prior written approval, which shall not be unreasonably withheld, conditioned or delayed (and any failure to grant or withhold such approval within ten (10) business days after delivery of notice thereof shall be deemed an approval of such proposed Qualified Tenant). Subtenant may also lease space in the MOB to tenants who are not Qualified Tenants (collectively, “Non-Qualified Tenants”), provided that such Non-Qualified Tenants are not Competitors, are not nor at any previously have been excluded from participating in any federally funded healthcare program, including Medicare and Medicaid, and have been approved in advance in writing by Sublandlord, which approval will not be unreasonably withheld, conditioned or delayed (provided that the failure of a Non-Qualified Tenant to meet any of the foregoing requirements will be a reasonable basis for Sublandlord to withhold its approval, and any failure to grant or withhold such approval within ten (10) business days after delivery of notice thereof shall be deemed an approval of such proposed Non-Qualified Tenant). (b) So long as the Sublandlord Operation Condition is satisfied, in the event that at any time during the Term space in the MOB (excluding with respect to the initial lease-up of the MOB during the first one (1) year following the Effective Date) will become or does become vacant and available for lease to a third party (the “ROFO Space”), Subtenant shall so notify Sublandlord in writing of the availability of such space (a “ROFO Space Notice”), and Sublandlord shall have fifteen (15) business days from receipt of the ROFO Space Notice to notify Subtenant in writing of Sublandlord’s exercise of its option to lease the ROFO Space on the terms and conditions contained in the ROFO Space Notice (the “Leasing Right of First Offer”), pursuant to a new lease which in addition to the terms set forth in the ROFO Space Notice will otherwise be on commercially reasonable terms and conditions and on substantially the same form as the MOB Lease. In addition, prior to accepting any unsolicited offer to lease space in the MOB for which a ROFO Space Notice has not yet been delivered within the prior one (1) year, Subtenant must first deliver to Sublandlord a ROFO Space Notice (which must be on the same terms and conditions as the unsolicited offer that Landlord proposes to accept), and Sublandlord will have the opportunity to exercise its Leasing Right of First Offer in accordance with this Section. The ROFO Space Notice shall identify the space, base rental, date of availability and improvement allowance (if any) that Subtenant is willing to provide. In the event Sublandlord fails to deliver to Subtenant its written acceptance of the Leasing Right of First Offer set forth in the ROFO Space Notice within fifteen (15) business days of its receipt thereof, Subtenant, subject to all other terms of this Sublease, shall be free to lease the ROFO Space to a third party (provided that such lease is for a rental rate that is at least ninety-five percent (95%) of the rental rate set forth in the ROFO Space Notice, and such other “material non-economic terms” of the lease are not materially more favorable to the third party than those set forth in the ROFO Space Notice), and the Leasing Right of First Offer with respect to the ROFO Space shall be null and void until the expiration or earlier termination of the resulting lease with the third party; provided, that if Sublandlord does not timely deliver to Subtenant its written acceptance of the Leasing Right of First Offer set forth in the ROFO Space Notice and Subtenant does not enter into a lease for the ROFO Space offered to Sublandlord within one (1) year after Subtenant’s delivery of the ROFO Space Notice, then if Subtenant desires Page 202 of 329 14 later to lease the ROFO Space, Subtenant shall be required to again provide Sublandlord with a ROFO Space Notice. The failure of Sublandlord to exercise this Leasing Right of First Offer for any available ROFO Space in one instance shall not be deemed a waiver of its Leasing Right of First Offer in another instance. For the purposes of this Section 4.2.4(b), “material non-economic terms” include terms such as (i) the creation of an option agreement not contemplated in the ROFO Space Notice whereby the tenant after execution of the lease agreement has the unilateral right to terminate such lease prior to commencement of design and/or construction activities by either party or otherwise whereby neither party has any obligation to commence any such activity (including, without limitation, engaging third parties to design and/or construct the ROFO Space) for at least six (6) months after execution of the applicable lease, and (ii) required tenant contributions to improvement of the ROFO Space which Subtenant is requiring as a condition to the leasing of the ROFO Space, provided, however, the parties acknowledge and agree that “material non-economic terms” do not include terms such as length of tenant improvement periods, delays in the timing for lease and/or rent commencement after the execution of such lease, or discretionary lease signing or due diligence extensions or accelerations. 4.2.5. Additional Requirements. Notwithstanding anything to the contrary set forth in the provisions of 4.2.4 of this Sublease, so long as the Sublandlord Operation Condition is satisfied subject to Section 13.1.5, (i) all tenants and subtenants of the MOB will be required to comply with the Prohibited Use restrictions, except as otherwise provided for in this Sublease, and (ii) no tenant or subtenant of the MOB shall be a Competitor (as defined in Section 10.1). If, and to the extent that, 42 USC § 1395x(v)(1)(I) is applicable, until the expiration of four (4) years after the termination or expiration of this Sublease, Subtenant shall make available, upon written request by the Secretary of the Department of Health and Human Services, or upon request by the Comptroller General of the United States General Accounting Office, or any of their duly authorized representatives, a copy of this Sublease and such books, documents, and records as are necessary to certify the nature and extent of the costs of the items and services provided by Subtenant under this Sublease. Subtenant shall comply with all applicable federal, state and local laws, ordinances, rules, and regulations (“Laws”) throughout the Term of this Sublease. In the event that Subtenant or any Qualified Tenant, Non-Qualified Tenant or any proposed tenant or subtenant of the MOB is or becomes (or is or becomes owned by, whether directly or indirectly) a “referring physician” or a “referral source” as to Subtenant or Sublandlord for services paid for by Medicare or a state health care program, as the terms are defined under any federal or state health care anti-referral or anti-kickback, regulation, interpretation or opinion (“Referral Source”), then the following shall apply: (i) lease documents shall be set out in writing and signed by the parties; (ii) the lease documents shall cover all of the premises leased for the term of the lease and specify the premises covered by the lease; (iii) the term of the lease shall be for not less than one year, (iv) the rental charge shall be set in advance (provided that with respect to any renewal period, rent which is adjusted to Fair Market Value at the commencement of such renewal period will be deemed to be set in advance), shall be consistent with Fair Market Value in arms- length transactions, and shall not vary with, or be determined in a manner that takes into account, the volume or value of any referrals or business otherwise generated between the Referral Source and Sublandlord or its Affiliate, or Subtenant or its Affiliate, for which payment may be made in whole or in part under Medicare, Medicaid or other Federal health care programs; and (v) the aggregate space rented shall not exceed that which is reasonably necessary to accomplish the Page 203 of 329 15 commercially reasonable business purpose of the lease. For purposes of this paragraph, the term “Fair Market Value” means the value of the rental property for general commercial purposes, but shall not be adjusted to reflect the additional value that one party (either the prospective lessee or lessor) would attribute to the property as a result of its proximity or convenience to sources of referrals or business otherwise generated for which payment may be made in whole or in part under Medicare, Medicaid and all other Federal health care programs. Notwithstanding the foregoing, a lease shall be deemed to be for Fair Market Value if it contains a provision permitting the Sublandlord after it assumes any such lease (the “Sublease Takeover Date”) to do any of the following: (a) (i) negotiate the rental rate for any renewal periods under any such lease that has not been exercised by the tenant as of the Sublandlord Takeover Date and for which the renewal period rent is subject to negotiation, (ii) set the rental rate for any renewal period at Fair Market Value, or (iii) reduce the rental charge to Fair Market Value unilaterally in Sublandlord’s sole and absolute discretion in the event such rental charge was not Fair Market Value when initially set, and (b) contains the following provision or a provision substantially similar thereto to take effect after the Sublease Takeover Date: “Landlord and Tenant acknowledge that (i) the space rented does not exceed that which is reasonable and necessary for the legitimate business purposes of Tenant, and (ii) that the [Rent] and other amounts set forth or required to be paid pursuant to the terms of this Lease (a) have been negotiated on an arms-length basis pursuant to bona fide bargaining between the parties, and (b) do not relate, directly or indirectly, to the volume or value of any referrals between the parties. Notwithstanding anything herein to the contrary, if at any time during the Term hereof [Sublandlord] becomes the direct Landlord under this Lease and obtains an independent third- party appraisal which determines that the aggregate payments required to be paid pursuant to the terms of this Lease for the remaining term of the Lease or any unexercised renewal term are not fair market value, the parties shall initiate good faith negotiations to revise the applicable payment terms and to amend this Agreement accordingly. If Landlord and Tenant are unable to reach an agreement as to the [Rent] fair market value within 60 days following commencement of such negotiations, then Landlord and Tenant may mutually agree to terminate this Lease, as determined in each of their sole and absolute discretion.” Section 4.3 MOB Leases Compliance. 4.3.1. Compliance with Use Restrictions. For so long as the Sublandlord Operation Condition is satisfied, except for MOB Leases, each Qualified Tenant lease will provide that such tenant shall, at all times during the term of such lease, maintain its status as a Qualified Tenant, and comply with the Prohibited Use restrictions. Subtenant will have the right and responsibility of enforcing the terms and conditions of each tenant lease and of making all assessments necessary to make any and all payments to the Sublandlord or to third parties as may be required by this Sublease. Subtenant agrees to utilize legal remedies available under the applicable lease with any tenant to enforce the Prohibited Use restrictions and Qualified Tenant requirements (if applicable) under all leases in the MOB, including but not limited to obtaining injunctive relief to enforce said restrictions; however Subtenant shall not be required to terminate any lease for violation of any of said restrictions unless Sublandlord leases such space as provided for herein. Subtenant shall enforce the Prohibited Use restrictions and Qualified Tenant requirements (if applicable) under all leases in a commercially reasonable manner through the Page 204 of 329 16 exercise of remedies as determined in its commercially reasonable discretion, including with respect to litigation and general lease enforcement strategy and tactics. Notwithstanding the foregoing, but subject to the last sentence of this Section 4.3.1, for so long as the Sublandlord Operation Condition is satisfied, each tenant lease for space in the MOB shall provide that (a) the Qualified Tenant requirements (except in a lease to a Non-Qualified Tenant approved by Sublandlord, in which case the requirements applicable to such Non-Qualified Tenant) and the Prohibited Use restrictions are imposed on such tenant explicitly for the benefit of the Sublandlord, (b) Sublandlord, as a third party beneficiary, may enforce the Qualified Tenant requirements and Prohibited Use restrictions directly against such tenant, and (c) Sublandlord’s rights in the event of a breach by such tenant will include the right to terminate such tenant’s lease, to seek preliminary, temporary and permanent injunctive relief and to pursue other legal and/or equitable remedies as a result of such tenant’s breach. Sublandlord agrees that if Subtenant fails to pursue or obtain a remedy reasonably acceptable to Sublandlord, then Sublandlord may exercise its third party beneficiary rights (including, without limitation, by initiating any lawsuit or other form or litigation, arbitration or similar procedure, seeking and obtaining injunctive or other similar relief, or terminating such lease) to enforce such restrictions, which enforcement shall be at Sublandlord’s sole cost and expense unless such enforcement actions are being taken due to a failure by Subtenant to take such actions as required under this Section 4.3.1. Sublandlord agrees that if Sublandlord thereafter enforces its third party beneficiary rights and terminates any such lease due to a breach of such restrictions, then so long as Subtenant, in its efforts to enforce compliance with the restrictions set forth above, has utilized any and all legal remedies available under the applicable tenant lease (other than termination of the lease), Sublandlord will be responsible for the rent and other charges payable under such lease for the duration of the lease term; provided, that during such period, Subtenant will use commercially reasonable efforts to re-lease the leased space to a replacement tenant subject to and in accordance with the terms of this Sublease. In the event that Sublandlord is required to enforce its third party beneficiary rights due to the Subtenant’s failure to enforce compliance with the foregoing requirements and restrictions under a tenant lease as required of Subtenant above and such lease does not require the tenant thereunder to reimburse Sublandlord for costs incurred by Sublandlord in connection with enforcement of such lease (or such lease does not include a prevailing party provision), then Subtenant shall be required to reimburse Sublandlord for all reasonable costs incurred by Sublandlord in connection with enforcing such third party beneficiary rights, but not including the rent payments and other costs for which Sublandlord will be responsible in the event of the termination of such lease as described in this Section 4.3.1. For the avoidance of doubt, nothing in this Section 4.3.1 shall apply to the MOB Leases or any other lease or sublease entered into by or with Sublandlord or its Affiliates. Any breach of this Section 4.3.1 by Subtenant shall be governed by Section 13.1.5. 4.3.2. Fair Market Value. No later than January 30th of each calendar year during the Term, Subtenant will provide Sublandlord with a rent roll for the MOB on the form used in Subtenant’s ordinary course of business. Notwithstanding anything to the contrary set forth herein, any failure by Subtenant to provide such rent roll shall by the due date in any year shall not be deemed to be a default under this Sublease. Section 4.4 Hazardous Materials. 4.4.1. Definitions. “Hazardous Materials” shall mean any material, substance or waste that is or has the characteristic of being hazardous, toxic, ignitable, reactive or corrosive, Page 205 of 329 17 including, without limitation, petroleum, PCBs, asbestos, materials known to cause cancer or reproductive problems and those materials, substances and/or wastes, including infectious waste, medical waste, and potentially infectious biomedical waste, which are or later become regulated by any local governmental authority, the State, or the United States Government, including, but not limited to, substances defined as “hazardous substances,” “hazardous materials,” “toxic substances” or “hazardous wastes” in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. § 1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et seq.; all corresponding and related State and local Statutes, ordinances and regulations, including without limitation any dealing with underground storage tanks; and in any other environmental law, regulation or ordinance now existing or hereinafter enacted (collectively, “Hazardous Materials Laws”). 4.4.2. Condition of Premises at Commencement of Lease. Sublandlord and Subtenant acknowledge and agree that a Phase I environmental audit has been performed on the Ground Subleased Premises by Partner Engineering and Science, Inc. (the “Auditor”) dated December 4, 2023 (the “Phase I”). A true and correct copy of the Phase I has been made available to Sublandlord and Subtenant prior to the execution of this Sublease. Without limiting any rights of Subtenant or any of its Affiliates under any separate written agreement with Sublandlord, Subtenant accepts the condition of the Ground Subleased Premises as of the Commencement Date. 4.4.3. Use of Premises by Subtenant; Remediation of Contamination. (a) Use. Subtenant hereby agrees that Subtenant and Subtenant’s officers, directors, employees, representatives, agents, contractors, subcontractors, successors, assigns, tenants, subtenants, licensees, permittees, concessionaires, invitees, others acting for or on behalf of Subtenant, and any other occupants of the Ground Subleased Premises, and any of the aforementioned utilizing, occupying, or entering any portion of the Master Ground Leased Premises (for purposes of this Section 4.4.3, and expressly excluding Sublandlord’s Representatives (as defined below), referred to collectively herein as “Subtenant’s Representatives”) shall not use, generate, manufacture, refine, produce, process, store or dispose of, on, under or about the Master Ground Leased Premises or transport to or from the Master Ground Leased Premises in the future for the purpose of generating, manufacturing, refining, producing, storing, handling, transferring, processing or transporting Hazardous Materials, unless such Hazardous Material is necessary to the business of any such person or entity and such Hazardous Material is used, kept, stored and disposed of in a manner and in quantities that is reasonable and customary in the conduct of such business on the Master Ground Leased Premises and complies with all applicable Hazardous Materials Laws. Subtenant shall, and shall cause Subtenant’s Representatives to, comply with all applicable Hazardous Materials Laws with respect to the Master Ground Leased Premises throughout the Term. To the extent required by applicable law, it shall be Subtenant’s responsibility to dispose of, by duly licensed haulers to duly licensed facilities for final disposal of such materials and wastes, any Hazardous Materials and infectious waste (as such term is defined by applicable federal, state, and local environmental laws) brought by Subtenant (or Subtenant’s Representatives) on the Master Ground Leased Premises. To this end, to the extent required by applicable law, Subtenant shall see to it that all such Hazardous Material and infectious waste are stored, disposed of and transported in a manner consistent with applicable laws and approved by Sublandlord. Subtenant shall be responsible for all costs and Page 206 of 329 18 expenses associated with such removal and any related remediation. Subtenant shall not cause or permit any Hazardous Materials or infectious waste to be disposed on, under, or about the Master Ground Leased Premises or surrounding property. Subtenant shall not place or permit to be placed any Hazardous Materials or infectious waste in any trash dumpster or other garbage collection bin provided by Sublandlord for the disposal of non-infectious waste or garbage. Furthermore, Subtenant shall, at its own expense, procure, maintain in effect and comply with all conditions of any and all permits, licenses and other governmental and regulatory approvals required for the storage or use by Subtenant or any of Subtenant’s Representatives of Hazardous Materials on the Master Ground Leased Premises, including without limitation, discharge of appropriately treated materials or wastes into or through any sanitary sewer serving the Ground Leased Premises. All leases of the MOB entered into by Subtenant from and after the Sublease Commencement Date (except the MOB Leases) will contain use restrictions and limitations conforming to the terms of this Section 4.4. (b) Remediation. If at any time during the Term or any Extended Term any contamination of the Master Ground Leased Premises by Hazardous Materials shall occur as a result of the acts or omissions of Subtenant or Subtenant’s Representatives (“Subtenant Contamination”), then Subtenant, at its sole cost and expense, shall promptly and diligently remove or cause to be removed such Hazardous Materials from the Master Ground Leased Premises, or the groundwater underlying the Master Ground Leased Premises, to the extent required by applicable Hazardous Materials Laws. However, Subtenant shall not take or cause to be taken any required remedial action in response to any Subtenant Contamination in, on or about the Master Ground Leased Premises or enter into any settlement agreement, consent decree or other compromise in respect to any claims relating to any Subtenant Contamination without first notifying Sublandlord of Subtenant’s intention to do so and affording Sublandlord the opportunity to appear, intervene or otherwise appropriately assert and protect Sublandlord’s interest with respect thereto. In addition to all other rights and remedies of the Sublandlord hereunder, if Subtenant does not promptly and diligently take all steps to prepare and obtain all necessary approvals of a remediation plan for any Subtenant Contamination, and thereafter commence the required remediation of any Hazardous Materials released or discharged in connection with Subtenant Contamination within thirty (30) days after Sublandlord has reasonably approved Subtenant’s remediation plan and all necessary approvals and consents have been obtained and thereafter continue to prosecute said remediation to completion in accordance with the approved remediation plan, then Sublandlord, at its sole discretion, shall have the right, but not the obligation, to cause said remediation to be accomplished, and Subtenant shall reimburse Sublandlord within fifteen (15) business days of Sublandlord’s written demand for reimbursement of all amounts reasonably paid by Sublandlord (together with interest from the date of expenditure on said amounts at the Default Rate until paid), when said demand is accompanied by proof of payment by Sublandlord of the amounts demanded. Subtenant shall promptly deliver to Sublandlord copies of hazardous waste manifests reflecting the legal and proper disposal of all Hazardous Materials removed from the Master Ground Leased Premises as part of Subtenant’s remediation of any Subtenant Contamination. If at any time during the Term or any Extended Term any contamination of the Master Ground Leased Premises by Hazardous Materials shall occur other than as a result of the acts or omissions of Subtenant or Subtenant’s Representatives, then Sublandlord, at its sole cost and expense, shall promptly and diligently remove or cause to be removed such Hazardous Materials from the Master Ground Leased Premises, or the groundwater Page 207 of 329 19 underlying the Master Ground Leased Premises, to the extent required by applicable Hazardous Materials Laws. (c) Disposition of Hazardous Materials. Except as discharged into the sanitary sewer or otherwise removed from the Master Ground Leased Premises in strict accordance and conformity with all applicable Hazardous Materials Laws, Subtenant shall cause any and all Hazardous Materials removed from the Master Ground Leased Premises as part of the required remediation of Subtenant Contamination to be removed and transported solely by duly licensed haulers to duly licensed facilities for final disposal of such materials and wastes. 4.4.4. Notice of Hazardous Materials Matters. Each party hereto (for purposes of this Section, “Notifying Party”) shall promptly notify the other party (the “Notice Recipient”) in writing of any of the following of which it obtains actual knowledge: (a) any enforcement, clean- up, removal or other governmental or regulatory action instituted, contemplated or threatened concerning the Master Ground Leased Premises, pursuant to any Hazardous Materials Laws; (b) any claim made or threatened by any person against the Notifying Party or the Master Ground Leased Premises, relating to damage contribution, cost recovery, compensation, loss or injury resulting from or claimed to result from any Hazardous Materials on or about the Ground Leased Premises; and (c) any reports made to any environmental agency arising out of or in connection with any Hazardous Materials in or removed from the Master Ground Leased Premises, including any complaints, notices, warnings or asserted violations in connection therewith, all upon receipt by the Notifying Party of actual knowledge of any of the foregoing matters. Notifying Party shall also supply to Notice Recipient as promptly as possible, and in any event within five (5) business days after Notifying Party first receives or sends the same, with copies of all claims, reports, complaints, notices, warnings or asserted violations relating in any way to the Master Ground Leased Premises, or the parties’ use thereof. 4.4.5. Indemnification by Subtenant. Subtenant shall indemnify, defend, protect, and hold Sublandlord free and harmless from and against any and all claims, actions, causes of action, liabilities, penalties, forfeitures, damages, losses or expenses (including, without limitation, reasonable attorneys’ fees and costs through litigation and all appeals) arising out of or resulting from death of or injury to any person or damage to any property whatsoever actually incurred or suffered by Sublandlord, or resulting from any enforcement, clean-up, removal or other governmental or regulatory action instituted concerning the Master Ground Leased Premises pursuant to any Hazardous Materials Laws, arising from or caused in whole or in part, directly or indirectly by (a) any Subtenant Contamination, (b) Subtenant’s failure to comply with any Hazardous Materials Laws with respect to the Master Ground Leased Premises, or (c) a breach of any covenant, warranty or representation of Subtenant under this Section 4.4, in each case except to the extent arising out of the acts or omissions of any Sublandlord Representative, or other third parties not constituting Subtenant’s Representatives. Subtenant’s obligations hereunder shall include, without limitation, and whether foreseeable or unforeseeable, all costs of any required or necessary repair, clean-up or detoxification or decontamination of the Master Ground Leased Premises, and the preparation and implementation of any closure, remedial action or other required plans in connection therewith. For purposes of the indemnity provisions hereof, any acts or omissions of Subtenant, or by Subtenant’s Representatives (whether or not they are negligent, intentional, willful or unlawful) shall be strictly attributable to Subtenant. The foregoing Page 208 of 329 20 indemnification by Subtenant shall survive the expiration or sooner termination of this Sublease, but shall not extend to conditions not attributable to Subtenant prior to the Effective Date. 4.4.6. Indemnification by Sublandlord. Sublandlord shall indemnify, defend, protect, and hold Subtenant free and harmless from and against any and all claims, actions, causes of action, liabilities, penalties, forfeitures, damages, losses or expenses (including, without limitation, reasonable attorneys’ fees and costs through litigation and all appeals) arising out of or resulting from death of or injury to any person or damage to any property whatsoever actually incurred or suffered by Subtenant, or resulting from any enforcement, clean-up, removal or other governmental or regulatory action instituted concerning the Master Ground Leased Premises pursuant to any Hazardous Materials Laws, arising from or caused in whole or in part, directly or indirectly by (a) any contamination of the Master Ground Leased Premises by Hazardous Materials shall occur as a result of the acts or omissions of Sublandlord or Sublandlord’s Representatives, (b) Sublandlord’s failure to comply with any Hazardous Materials Laws with respect to the Master Ground Leased Premises, or (c) a breach of any covenant, warranty or representation of Sublandlord under this Section 4.4, in each case except to the extent arising out of the acts or omissions of Subtenant or any of Subtenant’s Representatives, or other third parties not constituting Sublandlord’s Representatives. Sublandlord’s obligations hereunder shall include, without limitation, and whether foreseeable or unforeseeable, all costs of any required or necessary repair, clean-up or detoxification or decontamination of the Master Ground Leased Premises, and the preparation and implementation of any closure, remedial action or other required plans in connection therewith. For purposes of the indemnity provisions hereof, any acts or omissions of Sublandlord, or by Sublandlord’s Representatives (whether or not they are negligent, intentional, willful or unlawful) shall be strictly attributable to Sublandlord. The foregoing indemnification by Sublandlord shall survive the expiration or sooner termination of this Sublease. ARTICLE 5- DESIGN APPROVAL, INITIAL CONSTRUCTION AND ALTERATIONS Section 5.1 Design Approval. 5.1.1. Subtenant’s Architect (as defined below) prepared and delivered to Sublandlord the design development drawings for the Base Building Work (as defined in the MOB Leases), which includes the Parking Construction Work (as defined in that certain Construction, Operation, and Reciprocal Easement Agreement (the “COREA”) entered into by the Parties as of even date) (collectively, the “Improvements”), set forth on Exhibit “I-1” attached hereto (the “Design Development Drawings”), in consultation with Sublandlord and which Sublandlord has approved. 5.1.2. Subtenant has caused the final construction documents (including final plans and specifications) to be prepared (the “Project Construction Documents”) based upon and in accordance with the Design Development Drawings, which Project Construction Documents have been approved by Sublandlord and are set forth on Exhibit “I-2” attached hereto. Subtenant has also caused a budget to be prepared based on the Project Construction Documents (the “CD Budget”), which budget has been approved by Sublandlord and is attached hereto as Exhibit “I- 3”. Page 209 of 329 21 5.1.3. Sublandlord hereby authorizes Subtenant to proceed with construction as of the Sublease Commencement Date. 5.1.4. The approval by Sublandlord of the Design Development Drawings, the Project Construction Documents, the CD Budget, and any other budgets, drawings, plans, or specifications will not be deemed to be a representation or warranty by Sublandlord as to the adequacy or sufficiency of the same (including, without limitation, the Project Construction Documents) or the design and construction contemplated thereby for any use or purpose, or compliance with applicable laws or governmental requirements; and by its approval, Sublandlord assumes no liability or responsibility whatsoever for such budgets, drawings, plans, or specifications (including, without limitation, the Project Construction Documents) or for any defect in any improvement or construction made pursuant to the same. Section 5.2 Construction of the Work. Subtenant shall diligently pursue and perform construction of the Improvements in compliance with the provisions of this Article 5, and in accordance with the Project Construction Documents. Sublandlord shall join in and execute any applications required to be submitted under applicable law to perform the Approved Work as and when required by the applicable governing agency, provided Sublandlord’s agreement to join and execute such applications shall in no way diminish Subtenant’s responsibility for obtaining all consents, approvals and other entitlements as provided in Section 5.4.1 below. Section 5.3 Additional Provisions Specific to Initial Construction of the Improvements. 5.3.1. Change Orders. Subtenant shall not make material changes to the Project Construction Documents without Sublandlord’s prior written consent as provided herein. The parties hereby agree that a “material change” to the Project Construction Documents shall mean any change which would either (i) materially diminish the value or utility of the MOB, or (ii) materially change the design or layout of the exterior of the MOB or of the interior common areas of the MOB. Any material changes to the Project Construction Documents arising during construction shall be documented by Subtenant, Subtenant’s Architect or Subtenant’s Contractor (a “Change Order”) and submitted to Sublandlord for its review and approval. Sublandlord shall have three (3) business days to review such Change Order and respond with approval in writing, rejection or submit a reasonable request for additional information. If Sublandlord requests additional information, such Change Order will be resubmitted by Subtenant with such information as is reasonably requested and Sublandlord shall thereafter have two (2) business days to approve the resubmitted Change Order. Sublandlord approval of Change Orders and any resubmitted Change Orders shall not be unreasonably withheld, conditioned or delayed and if Sublandlord fails to respond with said 3-day period after receipt of the Change Order or within said 2- day period after receipt of the resubmitted Change Order, such Change Order shall be deemed approved, and Subtenant may proceed with the work reflected thereon. If a material Change Order is required in order for the Improvements to comply with applicable law or in order to incorporate any work required by any local governmental field inspector, such Change Order shall be submitted to Sublandlord for review, but shall not be subject to Sublandlord’s approval. Sublandlord acknowledges that Sublandlord’s prior consent shall not be required in order for Subtenant to modify the CD Budget in its sole and absolute discretion, including without limitation to reallocate costs from any line item in the CD Budget (and which expressly includes the use by Subtenant of Page 210 of 329 22 any savings realized under the CD Budget and the use by Subtenant of any “contingency” line item in the CD Budget) to another line item in the CD Budget. All changes to the Project Construction Documents requested by Sublandlord (“Sublandlord Change Orders”) shall be delivered to Subtenant in writing for Subtenant’s review and approval. The actual duration of all delays caused by Sublandlord Change Orders, including, without limitation, any stoppage of work during the Sublandlord Change Orders review process, will constitute a Sublandlord Delay (as defined below). All increases in the CD Budget resulting from any Sublandlord Change Orders, including but not limited to increases in the cost of the Improvements caused by any delays caused by any Sublandlord Change Orders shall be paid by Sublandlord within thirty (30) days following Subtenant’s request of same. 5.3.2. MOB Entitlements, Contributions and Payments. Subtenant shall be solely responsible, at its cost, to obtain any and all governmental consents and approvals and other entitlements necessary for the development and construction of the Improvements. Sublandlord shall reasonably cooperate (but shall not be obligated to incur any material cost or expense except as specifically stated below) with Subtenant in order to expedite Subtenant’s obtaining the necessary approvals set forth above. 5.3.3. Application for Permits. On or before the date that is ten (10) business days following the Sublease Commencement Date, Subtenant will apply for all permits, licensing, zoning changes, replats, PUDs, sewer taps, easements and site plan approvals which may be necessary to allow for the development and construction of the Improvements. Sublandlord will, at Subtenant’s expense, reasonably cooperate with Subtenant in the pursuit thereof including, without limitation, completion and submittal of any application for the same. 5.3.4. Timeframe to Commence Construction of and to Complete MOB. Subtenant shall execute a guaranteed maximum price construction contract for the Improvements with Layton Construction Company, LLC, as the contractor thereunder (“Subtenant’s Contractor”). Subtenant’s architect for the MOB is Page Southerland Page, Inc. (“Subtenant’s Architect”). Sublandlord’s prior written approval shall be required for any change of Subtenant’s Contractor or Subtenant’s Architect, which approval shall not be unreasonably withheld, delayed or conditioned. Subtenant shall commence construction (i.e., begin preliminary grading work) within sixty (60) days following the Sublease Commencement Date (the “Authorization Date”); provided, however, if Subtenant has not obtained a building permit by the Authorization Date, Subtenant shall not be required to commence construction until thirty (30) days from receipt of the building permit and shall diligently pursue completion of the Improvements thereafter. Subtenant shall use commercially reasonable efforts to cause the Improvements to be Substantially Completed (as defined herein) on or before the date that is twenty (20) months after commencement of construction (the “Projected Completion Date”), subject to extension for each day of Force Majeure Events. If Subtenant fails to cause the Improvements to be Substantially Completed on or before the Projected Completion Date (a “Delivery Breach”), then Sublandlord may send a written notice to Subtenant requiring Subtenant to provide a recovery plan that outlines, in reasonably sufficient detail, the corrective measures Subtenant will undertake as may be necessary to expedite the progress of construction in order to cause the Improvements to be Substantially Completed no later than the sixtieth (60th) day following the Projected Completion Date, subject to extension for each day of Force Majeure Events (the “Outside Date”). If Subtenant fails to cause the Improvements to be Substantially Completed on or before the Outside Page 211 of 329 23 Date, then, Subtenant shall pay to Landlord an amount equal to Five Thousand and 00/100 Dollars ($5,000.00) per day (the “Liquidated Damages”) for each day that Subtenant fails to achieve Substantial Completion of the Improvements beyond the Outside Date (to the extent such delay is caused by reasons other than Force Majeure Events) for a period of one hundred eighty (180) days (“Delay Damage Period”). Sublandlord and Subtenant acknowledge and agree that Sublandlord’s harm caused by an uncured Delivery Breach would be impossible or very difficult to accurately estimate as of the Authorization Date, and that the Liquidated Damages are a reasonable estimate of the anticipated or actual harm that might arise from such uncured Delivery Breach. In the event Substantial Completion of the Improvements is not achieved by the end of the Delay Damage Period, as extended for Force Majeure Events, Sublandlord and Subtenant shall in good faith confer for a period of thirty (30) days to negotiate either an extension of the Delay Damage Period or an alternative resolution to the delay, and Subtenant shall also pay to Landlord an amount equal to the Liquidated Damages for each day during such 30-day period. If no resolution is reached within such time period and Substantial Completion has not yet been achieved, then Sublandlord may (i) at any time after the expiration of such 30-day period Sublandlord, elect (but it will have no obligation to do so) to complete the Improvements in accordance with the Project Construction Documents, at Subtenant’s cost, provided that Subtenant must also pay to Landlord an amount equal to the Liquidated Damages for each day thereafter until Sublandlord causes the Substantial Completion of the Improvements to be achieved up to a maximum of number of days that Sublandlord reasonably estimates (which estimate will be made by Sublandlord at the time that Sublandlord elects to complete the Improvements) will be needed to achieve Substantial Completion of the Improvements, or (ii) at any time after the date that is twenty (20) months after the Outside Date (provided that Subtenant must pay to Landlord an amount equal to the Liquidated Damages for each day during such 20-month period until Substantial Completion of the Improvements is achieved), provided that Sublandlord has not exercised its rights pursuant to clause (i) above, declare that an Event of Default has occurred by reason of such failure and exercise Sublandlord’s termination remedies in Article 13 of this Sublease. If Sublandlord elects to complete the Improvements pursuant to (i) in the foregoing sentence, then (A) Subtenant will cooperate with Sublandlord to complete the construction of the Improvements including but not limited to, assigning (to the extent assignable) to Sublandlord all contracts, subcontracts, permits and other documents and agreement necessary to complete the Improvements in accordance with the Project Construction Documents, and (B) Sublandlord may not thereafter declare the existence of a default or Event of Default as a result of Subtenant’s failure to cause the Substantial Completion of the Improvements prior to the expiration of the Delay Damage Period. On the tenth day of each calendar month, Subtenant must pay to Sublandlord the amount of Liquidated Damages that accrued during the prior calendar month, and Subtenant’s obligation to pay the amount of the Liquidated Damages to Sublandlord in accordance with this Section will survive the expiration or sooner termination of this Sublease. For purposes of this Section, “Substantial Completion”, “Substantially Completed”, or “Substantially Complete” shall mean the earlier of (i) (a) the Improvements are substantially completed in accordance with the Project Construction Documents (excluding any exterior signage), and any approved Change Orders as certified by Subtenant’s Architect; (b) the MOB’s mechanical, electrical, plumbing, heating, air conditioning and other systems (to the extent the same are not part of the Interior Improvements) are fully operational; (c) those portions of the parking areas, access roads and Improvements that are legally required and reasonably necessary for the MOB to be occupied are substantially completed in accordance with the Project Page 212 of 329 24 Construction Documents and any approved Change Orders; (d) the MOB has received a temporary certificate of occupancy, certificate of completion or a functional equivalent thereof by the applicable governmental authorities, and (e) Subtenant has notified Sublandlord of (a), (b), (c) and (d) above and given Sublandlord at least ten (10) days after notification of (a), (b), (c) and (d) to inspect the same; and (ii) the date on which the Improvements would have been Substantially Complete pursuant to Section (i) but for Sublandlord Delays (as defined below). The Improvements shall be deemed Substantially Complete notwithstanding that the exterior signage has not been installed and notwithstanding a requirement to complete minor corrective work or punch list items provided that the completion of the same will not interfere with the completion of the Interior Improvements or the normal business operations to be conducted by the tenants under the MOB Leases in the MOB (such work or punch list items, collectively the “Punch List Items”). In the event of any dispute as to whether the MOB is Substantially Complete, the written decision of Subtenant’s Architect shall be final and binding on Sublandlord and Subtenant. Subtenant will use commercially reasonable efforts to cause the completion of any Punch List Items as soon as reasonably practicable after inspection by Sublandlord. 5.3.5. Construction. Subtenant shall cause the construction of all Improvements in a good and workmanlike and in compliance with the Project Construction Documents and the CD Budget (as the same may have been modified pursuant to approved Change Orders), all applicable laws and regulations, and the insurance requirements set forth in this Sublease. During such construction, Sublandlord may (but will have no duty or obligation to) inspect the Improvements and the materials being used in, or to be used in, the construction of the Improvements during normal business hours and upon not less than forty-eight (48) hours’ prior written notice to ensure construction of the Improvements in accordance with the Project Construction Documents. Section 5.4 Construction Coordination; Management. Subtenant shall have access to the Ground Subleased Premises at all times after the Effective Date. Subtenant shall be solely responsible for coordinating all construction activities for construction of the Improvements subject to the terms of this Sublease. Subtenant shall provide Sublandlord with reasonable advance notice of and the opportunity to attend any prescheduled construction coordination or update meetings, which must be held at least once every 2 weeks during the construction of the Improvements. During construction, Subtenant shall cause Subtenant’s Contractor to install and maintain appropriate and necessary signage reasonably acceptable to Sublandlord directing all construction traffic related to construction of the Improvements to the Ground Subleased Premises and related parking, storage areas, and staging areas using routes reasonably acceptable to Sublandlord and Subtenant. Section 5.5 Alterations. Except for (i) the initial construction or reconstruction (including in connection with a casualty or condemnation) of Improvements pursuant to this Section 5 and the MOB Leases, (ii) the Interior Improvements (as such term is defined in the MOB Leases), (iii) any alterations required to be made to the MOB or Ground Subleased Premises in order to comply with all applicable laws, rules, ordinances, orders and regulations of all governmental authorities or leases, (iv) alterations to the interior of the MOB (excluding, subject to subclause (v) below, any alterations to the interior common areas) consisting of tenant improvements for tenants and other occupants of the MOB, (v) routine repair and maintenance, including as may be required under any leases (including MOB Leases) or other occupancy Page 213 of 329 25 agreements, and (vi) as otherwise permitted in this Sublease, Subtenant shall not make or allow to be made any structural or exterior alterations, additions or improvements to the MOB or the Ground Subleased Premises or any exterior part thereof without the express prior written consent of the Sublandlord which consent shall not be unreasonably withheld, conditioned, or delayed (provided that with respect to structural alterations required pursuant to (iii) above, Sublandlord’s approval will be limited to the design theme of such alterations). Any structural alterations to or modification of the exterior of the MOB or any interior common areas shall require Subtenant to provide Sublandlord with sketches and elevations showing the proposed alteration or modification. Without Sublandlord’s consent, Subtenant shall be allowed to make all other alterations. Any alterations, additions or improvements (except movable furniture and trade fixtures) shall at once become a part of the MOB and belong to the Sublandlord upon the expiration or earlier termination of this Sublease. In the event the Sublandlord consents to the making of any alterations, additions, or improvements to the Ground Subleased Premises by the Subtenant, and with respect to alterations or tenant improvements for which no consent is required, the same shall be made by the Subtenant at the Subtenant’s sole cost and expense, in conformance with all applicable code and governmental requirements. Prior to commencing (which will include contracting with an architect, engineer, or other design professional to provide design services) any alterations, additions, or improvements to the Ground Subleased Premises or MOB and which are expected to cost more than $250,000, Subtenant must, except in the case of emergencies in which such period of advance notice is impractical under the circumstances, provide at least thirty (30) days’ prior written notice to Sublandlord, provided, however, any failure to do so shall not be deemed a default under this Sublease. Section 5.6 Liens. Sublandlord shall not be liable for any work, labor or materials furnished or to be furnished upon credit to or for Subtenant or anyone claiming under the Subtenant, and that no mechanic’s or other liens for any such work, labor or materials shall attach to or affect the estate or interest of the Sublandlord in and to the Ground Subleased Premises. If any mechanic’s lien or notice or claim thereof is filed against the Ground Subleased Premises with respect to work, labor or materials furnished or to be furnished to the Subtenant, or anyone claiming under the Subtenant, the Subtenant shall within thirty (30) days from the date of filing, cause the same to be withdrawn, discharged or removed by deposit, bonding proceedings or otherwise. If the Subtenant fails to do so, the Sublandlord may do so and may pay any judgments recovered by any such lienor. Subtenant shall promptly reimburse the Sublandlord for all amounts paid pursuant to this paragraph, which amounts shall constitute an additional obligation of the Subtenant under this Ground Lease, and which shall constitute a default by Subtenant if not reimbursed within thirty (30) days following written demand therefor. ARTICLE 6 - ENCUMBRANCE OF LEASEHOLD ESTATE Section 6.1 Tenant’s Right to Encumber; Recognized Mortgagee. 6.1.1. Rights and Obligations of Subtenant. (a) Subject to the terms of this Section 6.1, Subtenant may, at any time, and from time to time during the Term, obtain and shall be entitled to all proceeds of, financing (including interim, permanent, capital improvements and equity) for the MOB and Subtenant’s interest in this Sublease, and Subtenant shall have the right, without Sublandlord’s consent, to Page 214 of 329 26 encumber all or any portion of its interest in this Sublease and the leasehold estate and all attendant and appurtenant rights including, without limitation, any loan obtained by Subtenant or its direct or indirect constituents to provide financing for the MOB and Subtenant’s interest in this Sublease, whether for construction or otherwise, which is secured by direct or indirect equity interests in Subtenant (collectively, the “Leasehold Interest”) and Subtenant’s fee interest in the MOB (subject to the reversionary rights in favor or Sublandlord as set forth in Section 2.5) by deed of trust, mortgage or other security instrument or any direct or indirect pledges of ownership interest in Subtenant (collectively, “Leasehold Mortgage”), including as part of a portfolio or cross- collateralized financing, provided that for any portfolio financing, the amount in the applicable loan documents allocable to the MOB under the Leasehold Mortgage in effect at any one time shall not exceed eighty percent (80%) of the fair market value of Subtenant’s interests in the Ground Subleased Premises (the fair market value utilized by the applicable lender automatically being deemed to be a reasonable fair market value) as of the closing of the financing for which such Leasehold Mortgage is being provided. Notwithstanding anything in this Sublease to the contrary, Subtenant may not obtain financing from, or grant a Leasehold Mortgage to, a Competitor. Additionally, Sublandlord acknowledges and agrees that, except as otherwise set forth in the Master Landlord Recognition Agreement, any Leasehold Mortgage under this Sublease will not constitute a “Leasehold Mortgage” as defined in the Master Ground Lease, and that Mortgagee (as defined below) will not constitute a “Leaseholder Mortgagee” as defined in the Master Ground Lease. The Master Landlord Recognition Agreement shall be recorded in the applicable land records immediately after the Memorandum (as such term is defined below). (b) Subtenant covenants and agrees to pay the indebtedness secured by any Leasehold Mortgage entered into in compliance with the provisions hereof, when the same shall become due and payable, and to perform, when such performance is required, all obligations of the mortgagor thereunder. Subtenant further agrees not to suffer or permit any default to occur and continue under any Leasehold Mortgage. The Leasehold Mortgage shall specify that the indebtedness is that of Subtenant only and is not the indebtedness of Sublandlord and is limited to the Leasehold Interest and Subtenant’s fee interest in the MOB (subject to the reversionary rights in favor of Sublandlord as set forth in Section 2.5) and any rights granted under the Master Landlord Recognition Agreement. Said Leasehold Mortgage must, by its own terms, have a stated maturity date which is prior to expiration of the Term and may include extensions covering all or part of an Extended Term that become exercisable upon the exercise thereof, and Subtenant covenants that it will be so paid and that the Leasehold Interest will be released from such lien prior to the expiration of the Term or any Extended Term, as applicable, or the earlier termination of this Sublease (for any reason). Subtenant shall cause a true, complete and correct copy of the original of each Leasehold Mortgage, together with written notice containing the name and address of the holder thereunder (the “Mortgagee”), to be delivered to Sublandlord promptly following Subtenant’s execution and delivery of such Leasehold Mortgage to the Mortgagee and the recordation and return of such Leasehold Mortgage. Subtenant shall, from time to time, but not more than one (1) time per calendar year, when and as requested by Sublandlord in writing, deliver to Sublandlord a certificate from the Mortgagee or Subtenant certifying as to the amount of the unpaid principal balance under the Leasehold Mortgage held by such Mortgagee, together with accrued interest thereon, and, to the actual knowledge of the Mortgagee or Subtenant, as to the existence or absence of defaults thereunder. 6.1.2. Rights and Obligations of Master Landlord and Sublandlord. Page 215 of 329 27 (a) Master Landlord will not be required to pledge its fee interest in the Master Ground Leased Premises to secure any Leasehold Mortgage or to subordinate such fee interest to the rights of the Mortgagee except as may be set forth in the Master Ground Lease or Master Landlord Recognition Agreement, and Master Landlord will not be required to execute any promissory note or to assume in any manner any liability on the Mortgage. (b) Sublandlord will not be required to pledge its leasehold interest in the Master Ground Leased Premises to secure any Leasehold Mortgage or to subordinate such leasehold interest to the rights of the Mortgagee, and Sublandlord will not be required to execute any promissory note or to assume in any manner any liability on the Mortgage. Section 6.2 Rights of Mortgagee. Subject to the terms of this Sublease, a Mortgagee may enforce its rights under its Leasehold Mortgage and acquire title to the Leasehold Interest and Subtenant’s fee simple interest in the MOB encumbered by the Leasehold Mortgage (said estates being collectively called the “Leasehold Mortgage Property”) and exercise any rights available to it under the Master Landlord Recognition Agreement, in any lawful way, including possession through foreclosure, assignment and/or deed or assignment in lieu of foreclosure, and upon foreclosure of the Leasehold Mortgage or acceptance of an assignment and/or deed in lieu of foreclosure and issuance of a certificate of title to the leasehold estate, take possession of the Leasehold Mortgage Property. Sublandlord hereby disclaims any contractual and/or statutory liens and rights of distraint with respect to any personalty from time to time located within or upon the Ground Subleased Premises, and hereby subordinates to any Leasehold Mortgage any such lien or security interest which Sublandlord may have in any such personalty. Sublandlord agrees to execute and deliver such instruments (which instruments must be in a form reasonably acceptable to Sublandlord) to evidence or confirm this subordination as may be reasonably requested by Subtenant’s lender. Section 6.3 Recognized Mortgagee Protections. 6.3.1. Notices to Recognized Mortgagee. The holder of any Leasehold Mortgage may give notice to Sublandlord of the name and address of such holder (such holder of the Leasehold Mortgage is sometimes referred to herein as a “Recognized Mortgagee”) in the manner provided in this Sublease, and if such notice is given, Sublandlord shall give to such Recognized Mortgagee a copy of each notice of default under this Sublease given by Sublandlord to Subtenant (the “Sublandlord Notice”) at the same time as and whenever any such Sublandlord Notice shall thereafter be given by Sublandlord to Subtenant, addressed to such Recognized Mortgagee at its address last furnished to Sublandlord. No such notice by Sublandlord to Subtenant hereunder shall be deemed to have been duly given unless and until a copy thereof has been served on such Recognized Mortgagee in the manner provided in this Sublease. 6.3.2. Sublandlord Obligations. (a) Sublandlord agrees that it will not accept the surrender of the Ground Subleased Premises by Subtenant prior to the termination of this Sublease which materially alters the rights and obligations of the parties hereunder, or consent to the modification of any material term of the Sublease or consent to the termination thereof by Subtenant, without the prior written approval of a Recognized Mortgagee, in each instance, which approval shall not Page 216 of 329 28 be unreasonably withheld, conditioned or delayed; provided, however, that if a Recognized Mortgagee fails to respond within thirty (30) days following the giving of a written request for approval, then such Recognized Mortgagee will be deemed to have approved such request. Sublandlord further agrees that it will not seek to terminate this Sublease or Subtenant’s right of possession thereunder by reason of any act or omission of Subtenant until: (i) Sublandlord has given to the Recognized Mortgagee a copy of the Sublandlord Notice with respect to the Subtenant default upon which the proposed termination is based; (ii) after the expiration of all applicable notice and grace periods set forth under the Sublease with respect to such default (a “Lease Default”), Sublandlord shall have given written notice to the Recognized Mortgagee (the “Mortgagee Notice”) of the failure of Subtenant to cure such Lease Default. The Mortgagee Notice shall be sent by certified mail, return receipt requested or by a nationally recognized commercial overnight delivery service to the address set forth above (or to such other address or in such other manner as may hereinafter be designated in writing to Sublandlord by the Recognized Mortgagee); and (iii) a reasonable period of time shall have elapsed following the receipt of the Mortgagee Notice, during which period the Recognized Mortgagee shall have the right, but shall not be obligated, to remedy such Lease Default, Sublandlord agreeing to accept any such remedy by the Recognized Mortgagee as if the same had been performed by Subtenant. As used herein, a reasonable period of time shall be (A) twenty (20) days as to any failure to pay rent, Taxes, or Utilities as such sums are specified in the Sublandlord Notice, (B) as to defaults other than those specified in (A), forty-five (45) days if such Lease Default can be remedied during such forty-five (45) day period, or (C) if such Lease Default cannot be remedied during such forty-five (45) day period, then such period of time as is necessary to remedy such Lease Default, provided the Recognized Mortgagee has commenced to cure such Lease Default within such forty-five (45) day period and continues to diligently prosecute the same. (b) Sublandlord will accept performance by any such Recognized Mortgagee of any covenant, condition or agreement on Subtenant’s part to be performed hereunder with the same force and effect as though performed by Subtenant. (c) The time of the Recognized Mortgagee to cure any Lease Default by Subtenant which reasonably requires that said Recognized Mortgagee be in possession of the Leasehold Mortgage Property to do so, or the time for a Recognized Mortgagee to obtain Subtenant’s interest in the Leasehold Mortgage Property in order to elect to enter into a new lease with Sublandlord as provided in subsection (d) below, shall be deemed extended to include the period of time reasonably required by said Recognized Mortgagee to obtain such possession or obtain Subtenant’s interest in the Leasehold Mortgage Property (by foreclosure or otherwise) with best efforts; provided, however, that such Recognized Mortgagee shall have delivered to Sublandlord its written commitment to cure outstanding Lease Defaults reasonably requiring possession of the Leasehold Mortgage Property (which commitment may be revoked by Recognized Mortgagee by written notice to Sublandlord, in which case the terms of subsection (d) Page 217 of 329 29 below shall apply); and further provided, however, that during such period all other obligations of Subtenant under this Sublease are being duly performed. (d) If this Sublease is terminated or if the Subtenant’s right of possession is terminated for any reason, other than termination following a Recognized Mortgagee’s failure to cure a default as permitted in this Section 6.3, or in the event of the rejection or disaffirmance of this Sublease pursuant to bankruptcy laws or other laws affecting creditors’ rights, Sublandlord shall execute and deliver a new ground sublease of the Ground Subleased Premises to the Recognized Mortgagee, or any designated affiliate of Recognized Mortgagee (other than a Competitor), or any servicer selected by Recognized Mortgagee, within thirty (30) days after the request of the Recognized Mortgagee, subject to the requirements of this Subsection 6.3.2(d). The new ground sublease shall be effective as of the date of termination, rejection or disaffirmance of this Sublease and shall be upon the same terms and provisions contained in this Sublease (including the amount of the rent and other sums due from Subtenant hereunder as well as Sublandlord’s reversionary rights set forth in Section 2.5 hereof). In order to obtain a new ground sublease, a Recognized Mortgagee must make a written request to Sublandlord for the new ground sublease within thirty (30) days after the Recognized Mortgagee is notified, by a court order or otherwise by Sublandlord, of the date of termination, rejection or disaffirmance of the Sublease, as the case may be. In addition, as of the execution of the new ground sublease, the Recognized Mortgagee must cure all defaults under the Sublease and pay to Sublandlord all rent and other sums that would have been due and payable by Subtenant under this Sublease (save and except for penalties and late fees) but for the rejection, disaffirmance or termination. Sublandlord agrees that upon the written request by any Recognized Mortgagee to Sublandlord, Sublandlord shall provide such Recognized Mortgagee a reasonably detailed listing in writing of the then defaults under this Sublease. If Sublandlord and Recognized Mortgagee enter into a new ground sublease pursuant to this Article and if, for any reason, this Sublease has not been previously terminated, then this Sublease shall be deemed terminated. The provisions of this subsection (d) are a separate and independent contract made by Sublandlord and each Recognized Mortgagee. Simultaneous with the execution of the new ground sublease contemplated hereunder, Sublandlord shall convey by quitclaim deed and assignment any of Sublandlord’s right, title and interest in and to the MOB and other improvements located on the Ground Subleased Premises, together with subleases to any subtenant to Recognized Mortgagee. 6.3.3. Recognized Mortgagee Rights to Enforce. The provisions of this Section 6.3 are for the benefit of each Recognized Mortgagee and may be relied upon and shall be enforceable by each Recognized Mortgagee and their respective successors and assigns. Neither a Recognized Mortgagee nor any other holder or owner of the indebtedness secured by a Leasehold Mortgage or otherwise shall be liable upon the covenants, agreements or obligations of Subtenant contained in this Sublease, unless and until such Recognized Mortgagee or that holder or owner acquires the interest of Subtenant, and then only to the extent set forth in this Section 6.3. Sublandlord and Subtenant agree to execute such documentation reasonably requested by a Recognized Mortgagee consistent with the terms and provisions of this Article 6. 6.3.4. Recognized Mortgagee Priority. Anything herein contained to the contrary notwithstanding, the provisions of this Section 6.3 shall inure only to the benefit of all Recognized Mortgagees and their respective successors and assigns. If more than one such Mortgagee (one such Mortgagee being intended to include multiple mortgagees holding a single Page 218 of 329 30 mortgage or deed of trust) shall make written requests upon Sublandlord for a new ground sublease in accordance with the provisions of this Section, the new ground sublease shall be entered into pursuant to the request of the Recognized Mortgagee whose Leasehold Mortgage shall be prior in lien thereto and thereupon the written requests for a new ground sublease of each person junior in priority shall be and be deemed to be void and of no force and effect. Section 6.4 Other Miscellaneous Provisions Concerning Leasehold Mortgages. 6.4.1. Sublandlord Termination Rights. In the event that an Event of Default on the part of Subtenant shall have occurred and shall remain in existence beyond the expiration of any applicable notice and/or cure periods set forth herein, but further subject to any notice and curative rights in favor of Subtenant and the rights of any Recognized Mortgagee as provided hereunder, Sublandlord shall be entitled to terminate this Sublease in accordance with Section 13.2. 6.4.2. Sublandlord Notice. If (a) the outstanding principal balance of any loan entered into by Subtenant and secured by a Leasehold Mortgage increases (expressly excluding any disbursements under any such loan for capital repairs, tenant improvement allowances, leasing commissions, the funding of reserves, protective advances, or for similar purposes, or interest that becomes capitalized), or (b) Subtenant refinances any Leasehold Mortgage, Subtenant will notify Sublandlord in writing of the occurrence thereof. Any such notice will provide the following information (as applicable): (i) the amount of the increase, and/or (ii) the length of the refinanced term. In the event the Mortgagee under any Leasehold Mortgage changes, Subtenant must provide written notice of the name of the new Mortgagee to Sublandlord promptly upon Subtenant having actual knowledge of such change. 6.4.3. Sublandlord Rights to Enforce. The provisions of this Section 6.4 are for the benefit of Sublandlord and may be relied upon and shall be enforceable by Sublandlord. Neither Sublandlord nor its successors or assigns shall be liable upon the covenants, agreements or obligations of Subtenant contained in any Leasehold Mortgage by virtue of the exercise of any rights set forth in this Section 6.4. 6.4.4. Sublandlord Consent to Leasehold Mortgage. At Subtenant’s request, Sublandlord shall execute a written agreement with a Recognized Mortgagee in which Sublandlord agrees that it consents to the granting of the Leasehold Mortgage and that Sublandlord will not disturb the tenancy of the Recognized Mortgagee (its successors or assigns and any subsequent purchaser) following the date such Recognized Mortgagee becomes the Subtenant under the Sublease, subject to the terms and provisions of this Sublease. Additionally, Sublandlord shall execute such other documentation reasonably requested to confirm the rights of a Recognized Mortgagee hereunder; provided, under no circumstances shall Sublandlord be responsible for the payment of the debt secured by the Leasehold Mortgage, and in no event will Sublandlord’s reversionary interest in the MOB, Sublandlord’s leasehold interest in the Master Ground Leased Premises, or Master Landlord’s fee interest in the Master Ground Leased Premises, be subject or subordinate to the lien of the Leasehold Mortgage. Without limiting the generality of the foregoing, upon Subtenant’s or any leasehold mortgagee’s or prospective leasehold mortgagee’s request, Sublandlord shall enter into and deliver to Subtenant and such leasehold mortgagee or prospective leasehold mortgagee (and its administrative agent, as applicable) a recognition Page 219 of 329 31 agreement in the form attached hereto as Exhibit “H”, to be effective upon such leasehold mortgagee or prospective leasehold mortgagee becoming a Recognized Mortgagee. 6.4.5. Applicability of Sublandlord’s Consent Right and Right of First Refusal; Transfers to Competitors. Notwithstanding the foregoing or anything in this Sublease to the contrary, if a Recognized Mortgagee (or its affiliate) acquires the interest of the Subtenant in this Sublease by way of a foreclosure, foreclosure sale or deed in lieu of foreclosure, the acquisition of the Subtenant’s interest by the Recognized Mortgagee (or its affiliate) shall not be subject to Sublandlord’s prior written consent, as set forth in Section 10.1, or to the Right of First Refusal or the Right of First Offer (each as defined below), as granted in Section 10.4 below, but such transfer shall be subject to the restrictions on transfer to a Competitor as provided for in Section 10.1; provided, further, the subsequent transfer of the Subtenant’s interest by the Recognized Mortgagee (or its affiliate) shall be subject to the applicable provisions regarding such transfer set forth in Article 10, and shall be subject to the Right of First Refusal as provided for in Section 10.4, as well as to the restrictions on transfers to a Competitor as provided for in Section 10.1. In addition, if Subtenant receives an unsolicited offer from an unrelated third party for the sale or transfer of Subtenant’s interest (an “Unsolicited Offer”), the sale or transfer of Subtenant’s interest shall be subject to the Right of First Refusal and the restrictions on transfer to a Competitor as provided for in Section 10.1. 6.4.6. Sublandlord’s Right to Encumber Fee Interest. Subtenant acknowledges and agrees that Sublandlord may enter into a mortgage or deed of trust now or hereafter encumbering the Sublandlord’s ground leasehold interest in the Ground Subleased Premises (“Sublandlord Mortgage”) and that the Master Landlord Recognition Agreement shall govern the relationship between the Sublandlord Mortgagee (defined below) and the Leasehold Mortgagee; provided, however, that Sublandlord shall not enter into any Sublandlord Mortgage unless such Sublandlord Mortgage is expressly declared in writing to be in all respects, and such Sublandlord Mortgage shall in all respects be, subject and subordinate to this Sublease and the Master Landlord Recognition Agreement and all right, title, option, interest, remedy and privilege of Subtenant and any Recognized Mortgagee under this Sublease and the applicable leasehold mortgagee or holder of such Sublandlord Mortgage (“Sublandlord Mortgagee”) enters into a subordination and non-disturbance agreement reasonably acceptable to Subtenant and any Recognized Mortgagee. Sublandlord shall provide a true, correct and complete copy of any Sublandlord Mortgage to Subtenant within a reasonable timeframe after execution thereof. In the event of a foreclosure of any Sublandlord Mortgage or a transfer in lieu of foreclosure, Subtenant must attorn to the party acquiring leasehold title to the Ground Subleased Premises as the result of such foreclosure or transfer in lieu of foreclosure. Subtenant covenants and agrees, upon request of Sublandlord, and subject to the approval of any Recognized Mortgagee, to execute such documents as may be necessary or appropriate to confirm and establish this Sublease as subordinate to any Sublandlord Mortgage in accordance with the foregoing provisions (including, without limitation, such Sublandlord Mortgagee’s form of subordination, non-disturbance and attornment agreement in form reasonably acceptable to Subtenant). Alternatively, Subtenant covenants and agrees that, at the option of any Sublandlord Mortgagee, Subtenant must execute documents as may be necessary to establish this Sublease and Subtenant’s interest in the Ground Subleased Premises as superior to any such Sublandlord Mortgage within 10 days after Subtenant’s receipt thereof. If any Sublandlord Mortgagee or purchaser at foreclosure thereof, succeeds to the interest of Sublandlord in the Ground Subleased Premises, such person will not be (i) liable for Page 220 of 329 32 any act or omission of Sublandlord under this Sublease; (ii) liable for the performance of Sublandlord’s covenants hereunder which arise prior to such person succeeding to the interest of Sublandlord hereunder; (iii) [intentionally omitted]; (iv) liable for any security deposit which was not delivered to such person; or (v) bound by any modifications to this Sublease to which such Sublandlord Mortgagee has not consented in writing. If any Sublandlord Mortgagee requires a modification of this Sublease, which modification will not bring about any increased cost or expense to Subtenant or will not in any other way substantially change the rights and obligations of Subtenant hereunder, then and in such event, Subtenant agrees, subject to the approval of any Recognized Mortgagee, to cooperate with Sublandlord in connection therewith (including, without limitation, executing and delivering amendments to this Sublease). Subtenant must comply with the provisions of any Sublandlord Mortgage entered into by Sublandlord for the benefit of its Sublandlord Mortgagee that limit the rights of Sublandlord and Subtenant to amend the provisions of this Sublease, but only to the extent such Subleasehold Mortgage has been provided to Subtenant. 6.4.7. Leasehold Mortgage Defaults and Foreclosure. Any Recognized Mortgagee agrees that it shall not exercise any of its remedies against Subtenant under a Leasehold Mortgage for a given default unless: (a) Recognized Mortgagee has given Sublandlord a copy of the notice of default, and (b) Sublandlord shall have the option, but not the obligation, to cure said default within the time frames afforded Subtenant under the Leasehold Mortgage. Recognized Mortgagee agrees to accept performance and compliance by Sublandlord of and with any term, covenant agreement, provision, condition or limitation on Sublandlord’s part to be kept, observed or performed by Subtenant. In addition, Recognized Mortgagee hereby agrees to give Sublandlord a copy of any written notice of default by Subtenant under the Leasehold Mortgage. A Recognized Mortgagee shall provide Sublandlord written notice of institution of the foreclosure proceedings or, if applicable, written notice that it has decided to accept an assignment of the Sublease in lieu of foreclosure (each of such notices being referred to herein as the “Foreclosure Notice”), after expiration of thirty (30) days from delivery of the Foreclosure Notice, a Recognized Mortgagee shall be permitted, at its sole option, to complete the foreclosure or obtain the Leasehold Interest by assignment in lieu of foreclosure, and, after acquiring the Leasehold Interest to assign or otherwise transfer the Leasehold Interest pursuant to the terms of this Sublease. ARTICLE 7 – MAINTENANCE AND REPAIR; MANAGEMENT Section 7.1 Maintenance and Repair of Ground Subleased Premises. Subtenant agrees that it will, at its own cost and expense, maintain, repair and replace, or cause such to be done, to the Ground Subleased Premises, MOB and any other improvements thereon and appurtenances thereto and every part thereof, including without limitation all landscaping therein, in good order, condition and repair and in accordance in all material respects with all applicable laws, rules, ordinances, orders and regulations of all governmental authorities. In the event any items required to be made under the provisions of this Sublease are not made within thirty (30) days after written notice from Sublandlord to do so, then Sublandlord may, at its option, so long as Subtenant is not then diligently pursuing a cure thereof, enter upon said Ground Subleased Premises and repair or replace the same, and in such event Subtenant shall not be deemed to be in default under this Sublease, but the cost and expense of such items, with interest at the rate equal to the lesser of (a) eight percent (8%) per year, or (b) the maximum rate then allowed by law (such Page 221 of 329 33 lesser rate, the “Default Rate”), shall be due and paid by Subtenant as additional rent to Sublandlord within thirty (30) days following written demand. Section 7.2 Emergency Repairs or Replacements. Notwithstanding the provisions of Section 7.1, in the event of an emergency in which the applicable repair or replacement is required to avoid the imminent threat of (i) loss or impairment of life, (ii) severe personal injury, or (iii) material damage to the structural integrity of the MOB, Sublandlord, at its option, may, after reasonable prior notice to Subtenant under the applicable circumstances, enter on the Ground Subleased Premises to effect repairs and replacements needed as described in Section 7.1 as a result of such emergency or any other reasonable emergency. The cost and expense of such repairs and replacements, together with interest at the Default Rate shall be due and paid by Subtenant to Sublandlord within thirty (30) days following written demand as additional rent due hereunder. Section 7.3 Management. Except as set forth in the MOB Leases, the day to day operation and management of the MOB shall be performed by Subtenant or its Affiliates or a property management company determined by Subtenant. Any third party non-affiliate selected by Subtenant who will provide management services for the MOB must be approved by Sublandlord, which approval shall not be withheld, conditioned or delayed if such proposed manager (or the principals thereof) has experience in the management of medical office buildings and has a good business reputation, it being acknowledged and agreed that (i) Remedy Medical Properties, Inc., as the initial property manager for the MOB, is deemed approved by Sublandlord, and (ii) Sublandlord’s approval of any proposed successor property manager shall not be required if Subtenant proposes to engage a reputable, national or regional, third party non-affiliate property manager which, together with its affiliates, operates not less than five hundred thousand (500,000) square feet of medical office buildings or other health care facilities and has at least ten (10) years’ experience operating medical office buildings or other health care facilities (an “Approved Property Manager”). Normal and customary property management fees not to exceed four percent (4%) of gross revenues, and salaries, fringe benefits, payroll taxes and related direct costs for on-site building manager and building engineer shall be included as pass through expenses under all tenant leases, except as otherwise set forth in the MOB Leases. In the event that the property manager for the Ground Subleased Premises fails in any material respect to operate the Ground Subleased Premises in accordance with the requirements of this Sublease, then, at the election of Sublandlord following written notice to Subtenant, Subtenant and Sublandlord shall discuss and mutually agree upon any applicable remediation and/or replacement efforts. ARTICLE 8- MECHANICS’ LIENS Section 8.1 Prohibition of Liens on Fee or Leasehold Interest. Subject to Section 6.1 and unless removed as set forth in Section 8.2, Subtenant shall not suffer, create or permit any mechanic’s liens or other liens (other than liens for taxes and assessments not yet due or payable, if any) to be filed against the fee of the Ground Subleased Premises nor against Subtenant’s leasehold interest in the land, nor any buildings or improvements on the Ground Subleased Premises, by reason of any work, labor, services or materials supplied or claimed to have been supplied to Subtenant or anyone holding the Ground Subleased Premises or any part thereof through or under Subtenant (expressly excluding, for the avoidance of doubt, any mechanic’s liens or other liens filed against the Ground Subleased Premises or any portion thereof Page 222 of 329 34 by or on account of the acts or omissions of any Sublandlord Representative). The Memorandum of Lease shall contain a reference to this provision. Section 8.2 Removal of Liens by Subtenant. If any such mechanic’s or laborer’s liens or materialman’s lien shall be recorded against the Ground Subleased Premises, or any improvements thereof due to the performance of work requested by Subtenant, within thirty (30) days after notice of the filing thereof, or fifteen (15) days after Subtenant is served with a complaint to foreclose said lien or Sublandlord advises Subtenant in writing that Sublandlord has been served with such a complaint, whichever is earlier, Subtenant shall cause such lien to be removed, or will transfer the lien to bond pursuant to applicable law. If Subtenant in good faith desires to contest any such lien, Subtenant shall be privileged to do so, but in such case Subtenant hereby agrees to indemnify and save Sublandlord harmless from all liability for damages, including reasonable attorneys’ fees and costs, occasioned thereby and shall, in the event of a judgment of foreclosure upon any mechanic’s lien, cause the same to be discharged and removed prior to the execution of such judgment. Sublandlord may, in its sole discretion, require that any such lien be removed or bonded over as a condition precedent to Subtenant’s privilege to contest any lien. ARTICLE 9 - CONDEMNATION Section 9.1 Interests of Parties on Condemnation. If the Ground Subleased Premises or any part thereof shall be taken for public purpose by condemnation as a result of any action or proceeding in eminent domain, or shall be transferred in lieu of condemnation to any authority entitled to exercise the power of eminent domain, the interests of Sublandlord and Subtenant in the award or consideration for such transfer, and the allocation of the award and the other effect of the taking or transfer upon this Sublease, shall be as provided by this Article 9 and subject to the terms of any Leasehold Mortgage. Section 9.2 Total Taking - Termination. If the entire Ground Subleased Premises is taken or so transferred, this Sublease and all of the right, title and interest thereunder shall cease, terminate and be of no further force or effect on the date title to such land so taken or transferred vests in the condemning authority. Section 9.3 Partial Taking - Termination. In the event of (i) the taking or transfer of only a part of the Ground Subleased Premises or the Master Ground Leased Premises, leaving the remainder of the Ground Subleased Premises or the Master Ground Leases Premises in such location, or in such form, shape or reduced size as to be not effectively and practicably usable in the good faith opinion of Subtenant for the operation thereon of Subtenant’s business in an economically feasible manner, taking into consideration the effect, if any, of such taking on the availability of parking proximately located to the MOB and utilities to the MOB, or (ii) any taking or transfer of only a part of the Ground Subleased Premises or the Master Ground Leased Premises pursuant to which Sublandlord has the right to terminate the MOB Leases in effect immediately prior to such partial taking or transfer (unless Sublandlord irrevocably waives such termination right) and/or tenants comprising more than 25% of the then-current occupancy of the MOB exercise their pre-existing rights to terminate their respective leases, then this Sublease and all right, title and interest thereunder may be terminated by Subtenant giving, within sixty (60) days of the occurrence of such event, thirty (30) days’ notice to Sublandlord of Subtenant’s intention to terminate. Page 223 of 329 35 Section 9.4 Partial Taking - Continuation with Rent Abatement. In the event of (i) the taking or transfer of only a part of the Ground Subleased Premises leaving the remainder of the premises in such location and in such form, shape or size as to be used effectively and practicably in the good faith opinion of Subtenant for the purpose of operation thereon of Subtenant’s business in an economically feasible manner and (ii) so long as the MOB Leases, if in effect immediately prior to such partial taking or transfer, shall remain in full force and effect following such partial taking or transfer (and so long as Sublandlord shall have waived any applicable termination right under the MOB Leases), and/or tenants comprising 25% or less of the then-current occupancy of the MOB exercise their pre-existing rights to terminate their respective leases, then this Sublease shall terminate only as to the portion of the Ground Subleased Premises so taken or transferred as of the date title to such portion vests in the condemning authority, and shall continue in full force and effect as to the portion of the Ground Subleased Premises not so taken or transferred. From and after such date the rental required to be paid by Subtenant shall be reduced in proportion to which the square footage of the area so taken or transferred bears to the total square footage of the Ground Subleased Premises. Section 9.5 Partial Taking - Award. If title and possession of a portion of the Ground Subleased Premises is taken under the power of eminent domain, and the Sublease continues as to the portion remaining, all compensation and damages (“Compensation”) payable to Subtenant by reason of any improvements so taken shall be used, subject to the rights of any Leasehold Mortgagee, to the extent reasonably needed, by Subtenant in replacing any improvements so taken with improvements of the same type as the remaining portion of the Ground Subleased Premises. If the Compensation payable to Subtenant and which is permitted to be used by each Leasehold Mortgagee to restore the MOB shall be less than the cost of restoration of the MOB, Subtenant shall pay such deficiency at its sole cost and expense. All plans and specifications for such replacement and improvements shall be subject to Sublandlord’s reasonable prior approval, which approval will not be unreasonably withheld, conditioned, or delayed, and all such repairs shall be in compliance with all then existing codes, zoning ordinances, rules and regulations governing the Ground Subleased Premises. Section 9.6 Allocation of Award. 9.6.1. Value of Interests in Ground Subleased Premises. Any Compensation awarded or payable because of the taking of all or any portion of the Ground Subleased Premises by eminent domain shall be awarded in accordance with the values of the respective interests in the Ground Subleased Premises and all improvements thereon immediately prior to the taking. The value of Sublandlord’s interest in the Ground Subleased Premises and all improvements thereon immediately prior to a taking shall include the then value of its interest in the Ground Subleased Premises prior to the Expiration Date of this Sublease, Rent payable under this Sublease, together with the value of its reversionary interest in the MOB and any other improvements located on the Ground Subleased Premises (including, without limitation, utility connections) after the Expiration Date (including all Extended Terms under Section 2.4). The value of Subtenant’s interest in the Ground Subleased Premises and improvements immediately prior to a taking shall include the then value of its interest in the Ground Subleased Premises and improvements for the remainder of the Term of this Sublease (including all Extended Terms under Section 2.4). Such values shall be those determined in the proceeding relating to such taking or, if no separate determination of the values is made in such proceeding, those determined by agreement between Page 224 of 329 36 Sublandlord and Subtenant. If such agreement cannot be reached, such values shall be determined by an appraiser or appraisers appointed in the manner provided in 9.6.2(b) below. The time of taking shall mean 12:01 a.m. of, whichever shall first occur, the date of title or the date physical possession of the portion of the Ground Subleased Premises on which the improvements are located is taken by the taking agency or entity. In the event of separate awards, then such separate awards shall be re-allocated between Sublandlord and Subtenant in accordance with the terms and provisions of this Section 9.6. To the extent any outstanding encumbrance or encumbrances incurred by Subtenant under Article 6 of this Sublease exist, such encumbrance or encumbrances shall be satisfied from Subtenant’s award or share of the award. Notwithstanding anything to the contrary set forth in this Sublease, Subtenant may appear in any taking proceeding or action to negotiate, prosecute and adjust any claim for any award or compensation on account of any taking as it relates to its interest in the Ground Subleased Premises, including the MOB, and Sublandlord shall reasonably cooperate with Subtenant with respect to any such proceeding. 9.6.2. Appraisal Process. For the purpose of determining the values pursuant to Section 9.6.1 above, if Sublandlord and Subtenant cannot otherwise agree, Sublandlord and Subtenant agree to employ and be bound by the results of the following appraisal process (the “Appraisal Process”): (a) Within thirty (30) days following the inability of Sublandlord and Subtenant to agree on their respective values in Section 9.6.1 above, both Subtenant and Sublandlord shall designate a nationally recognized competent, professionally qualified and accredited MAI appraiser familiar with the values of medical office buildings in the market in which the Ground Subleased Premises is located. Each of said appraisers shall forthwith, independently, undertake an appraisal of Sublandlord and Subtenant’s values, taking into consideration the terms of this Sublease, to determine the fair market value thereof. Each party shall be responsible for the costs incurred with respect to the appraisal prepared on such party’s behalf. (b) If the values reflected in the higher of said appraisals does not exceed the lower appraisal by more than ten percent (10%), the fair market value shall be the average of the two appraisals. (c) If the values of the higher of said two appraisals exceeds the lower appraisal by more than ten percent (10%), then the two appraisers selected by the parties shall promptly select a similarly qualified third appraiser who shall independently undertake an appraisal of the values of Sublandlord and Subtenant to determine the fair market value thereof. Upon conclusion of the third appraisal, the fair market value shall be the average of the two appraisals from among the three that have the least or smallest difference between them. The cost of the third appraisal shall be shared equally by Sublandlord and Subtenant. (d) In the event either party fails to designate an appraiser within the period specified above, and such failure continues for more than ten (10) days after written notice is given to the party who has failed to designate an appraiser by the other party, then the fair market value shall be calculated using the fair market value as determined by the appraiser appointed by the party who did designate an appraiser. Page 225 of 329 37 Section 9.7 Voluntary Conveyance. A voluntary conveyance by Sublandlord to a public utility, agency or authority under threat of a taking under the power of eminent domain in lieu of formal proceedings shall be deemed a taking within the meaning of this Article 9. ARTICLE 10 - ASSIGNMENT AND SUBLEASE Section 10.1 Limitation on Assignment and Subletting the Entire Premises. (a) Except for leases of space in the MOB (which will not constitute an Assignment (as defined below) and will be governed by Article 4 and Section 10.2) and Leasehold Mortgages (which will not constitute an Assignment and will be governed by Article 6), and except as otherwise expressly prohibited in this Sublease, Subtenant shall be permitted to sell, assign, sublet, transfer, hypothecate, pledge, grant a security interest in, or convey this Sublease or the leasehold estate created hereby (each, an “Assignment”), for purposes of security or otherwise, without the prior written consent of Sublandlord. Subtenant shall not be permitted to enter into an Assignment prior to Substantial Completion of the Improvements without the prior written consent of Sublandlord, which consent Sublandlord may grant or withhold in Sublandlord’s sole and absolute discretion, provided that any Assignment by Subtenant to an Affiliate of Subtenant shall not require Sublandlord’s consent. Following the Substantial Completion of the Improvements, Subtenant may not enter into an Assignment with any person or entity that is an Unqualified Operator without the prior written consent of Sublandlord, which consent Sublandlord may not unreasonably withhold, condition or delay. Notwithstanding anything to the contrary set forth in this Sublease, upon an approved or permitted assignment of Subtenant’s entire interest in this Sublease and the leasehold estate created hereby, Subtenant shall be released from any continuing obligations under this Sublease, but shall remain fully liable for all of the terms, provisions, covenants, conditions, indemnifications and obligations binding upon Subtenant under this Sublease up to the date of assignment; provided that the foregoing release is expressly conditioned upon such approved or permitted assignee assuming in writing the “Subtenant” obligations under this Sublease. Except as otherwise expressly provided in this Sublease, so long as the Sublandlord Operation Condition shall remain satisfied, in no event may Subtenant enter into any Assignment with (1) any person or entity (other than Sublandlord or Sublandlord’s affiliate) that (or has any Affiliates that): (i) operates an acute care hospital, (ii) operates a sports medicine facility, (iii) operates a diagnostic center, or (iv) operates an ambulatory surgery center, in each case for the foregoing (i) – (iv) (any such hospital, facility or center described in such clauses (i) through (iv), a “Competing Facility”), (v) is or has been engaged in material litigation with Sublandlord (provided that notwithstanding anything in this Sublease to the contrary, with respect to tenants leasing space in the MOB, such tenants must only satisfy this clause (v) at such time as such tenants’ leases are initially executed), or (vi) otherwise competes directly with Sublandlord in the ownership and operation of other medical facilities providing health care services to patients that are customarily provided in full-scale hospitals (each person or entity that satisfies any of the foregoing in (i) through (v), a “Competitor”), or (2) any person or entity (other than Sublandlord, Sublandlord’s Affiliate, or a Recognized Mortgagee) that lacks the institutional expertise and/or experience to own and operate projects similar to the MOB (an “Unqualified Operator”). (b) For the purposes of determining whether a person or entity is an Unqualified Operator, Sublandlord and Subtenant acknowledge and agree that a person or entity that individually or collectively with any affiliate of such person or entity, (x) owns not less than Page 226 of 329 38 five hundred thousand (500,000) square feet of medical office buildings or other health care facilities, (y) manages or operates not less than five hundred thousand (500,000) square feet of medical office buildings or other health care facilities, or (z) engages an Approved Property Manager, will be deemed to not be an Unqualified Operator. (c) For the purposes of determining whether a person or entity is a Competitor, Sublandlord and Subtenant acknowledge and agree that any bank, mortgage company, pension plan, real estate investment trust, other institutional investor or other person or entity that is primarily in the business of lending or investing, or developing, owning and/or managing buildings (or any direct or indirect subsidiary or affiliate thereof) that are a Competitor under sub- clauses (i) through (iv) of clause (1) of Section 10.1(a) shall not be deemed to be a Competitor unless any of the following conditions are satisfied: such person or entity itself or through any direct or indirect subsidiary or affiliate (I) owns and operates an acute care hospital in the Denver Metropolitan Area, or (II) owns and operates a Competing Facility located within Douglas County, Colorado or within five (5) miles of the Ground Subleased Premises. (d) In the event that Sublandlord consents (or is deemed to have consented) to any sale, transfer, pledge, assignment, sublease, granting of a security interest in, hypothecation or conveyance (including any Assignment) of this Sublease or any interest therein, the related assignee, transferee, secured party or subtenant, as the case may be, shall be deemed not to be a Competitor or Unqualified Operator. (e) Sublandlord’s consent to any sale, transfer, pledge, assignment, sublease, granting of a security interest, hypothecation or conveyance (including any Assignment) requiring its consent shall be deemed to have been given in the event that (x) Sublandlord fails to object in writing within fifteen (15) business days after Sublandlord’s receipt of written notice of any such consent request, (y) Subtenant delivers to Sublandlord an additional written notice of such consent request, prominently marked or identified on the notice itself and, if delivered via United States mail or certified mail, on the outside of the envelope, containing the notice with the legend, “SECOND NOTICE OF CONSENT REQUEST - FAILURE TO CONSENT WITHIN FIFTEEN (15) BUSINESS DAYS WILL RESULT IN DEEMED CONSENT UNDER THE SUBLEASE”, and (z) Sublandlord fails to respond to such consent request within fifteen (15) business days following Sublandlord’s receipt of such additional written notice. Any transfer, sublease or assignment (including any Assignment) for which Sublandlord’s consent is not obtained in violation of the terms of this Sublease shall be and be deemed to be void and of no force and effect. (f) Sublandlord’s failure to respond to any request by Subtenant for confirmation of whether any person or entity is Active Medical Staff or satisfy any of the criteria of a Competitor within fifteen (15) business days after receipt of such request shall be deemed to confirm that such person or entity is Active Medical Staff or is not a Competitor, as applicable. Section 10.2 Leases to Tenants of the MOB. With respect to leases between Subtenant and tenants of the MOB that are not affiliated with Sublandlord (“Non-affiliate Leases”), the standard form lease to be utilized shall include the following lease provisions: Page 227 of 329 39 (a) Each lease must incorporate all lease provisions referred to herein which are expressly required to be included in any sublease of the Ground Subleased Premises, including but not limited to the Prohibited Use restrictions, the Qualified Tenant requirements, and the requirement that a Qualified Tenant shall maintain its status as such throughout the term of such tenant’s lease, and the reversionary interest of Sublandlord in the MOB, and Subtenant shall use commercially reasonable efforts to enforce such provisions. (b) Each lease must provide that (i) the Qualified Tenant requirements and the Prohibited Use restrictions are imposed on tenants of the MOB explicitly for the benefit of Subtenant, as Sublandlord under the tenant lease, and Sublandlord, as a third party beneficiary, (ii) Sublandlord may enforce these restrictions directly against a tenant upon Subtenant’s failure to successfully enforce such restrictions following Subtenant’s use of commercially reasonable efforts, and (iii) Sublandlord’s rights in the event of a breach of these restrictions by a tenant will include the right to terminate the tenant lease, to seek preliminary, temporary and permanent injunctive relief and to pursue other legal and/or equitable remedies as a result of such breach. (c) Each lease will grant no greater parking rights than are granted under this Sublease and the Ancillary Documents, as defined in Section 1.1 hereinabove. (d) Each new lease and lease renewal after the Effective Date of this Sublease shall include subordination b the tenant to this Sublease. (e) Any default notices sent by Subtenant under any tenant lease for the MOB must be sent to Sublandlord. Each such Non-affiliate Lease shall provide that it will automatically terminate upon a termination of this Sublease; provided, however, that Sublandlord agrees not to terminate any lease where a written subordination, non-disturbance and attornment agreement is entered into between Sublandlord and a tenant, in form reasonably acceptable to Sublandlord. Notwithstanding the foregoing, no Non-affiliate Lease will be required to automatically terminate upon a termination of this Sublease if otherwise provided in this Sublease, or if (i) the Master Ground Lease terminates and Landlord becomes the fee owner of the Real Property; or (ii) this Sublease terminates for any reason and Subtenant becomes the Ground Lessee under the Master Ground Lease or the fee owner of the Master Ground Leased Premises; and/or (iii) the Master Ground Lease terminates and this Sublease survives, including if it becomes a direct ground lease, and/or (iv) this Sublease terminates but a new replacement Ground Sublease is executed. Section 10.3 Permitted Transfers to Affiliates. Subtenant, and Subtenant’s shareholders, members, and owners, may not (in whole or in part) transfer their interest in the MOB and/or this Sublease, or control of Subtenant; provided, however, that Subtenant and its shareholders, members, and owners may transfer their interest in the MOB and/or this Sublease, or control of Subtenant, to an Affiliate of Subtenant (an “Affiliate Transfer”), or following the Substantial Completion of the Improvements (and prior to the Substantial Completion of the Improvements Sublandlord’s consent will be required, which consent Sublandlord may grant or withhold in Sublandlord’s sole and absolute discretion) which results from a merger or consolidation of a direct or indirect owner of Subtenant or the sale of all or substantially all of the assets, partnership or membership interests, or capital stock a direct or indirect owner of Subtenant Page 228 of 329 40 without any Sublandlord consent, subject to the prohibition on the sale or transfer to a Competitor or an Unqualified Operator for so long as the Sublandlord Operation Condition remains satisfied (but subject to the deemed consent provisions set forth in Section 10.1). For purposes of this Sublease, “Affiliate” when used with reference to a specific Party, shall mean any parent or subsidiary of such Party or any other person entity, in each case which directly or indirectly, controls, is controlled by or is under common control with such Party. For purposes of this provision, “control” shall mean (i) the ownership or control of fifty percent (50%) or more of the equity interest or membership interest in the entity in question; (ii) the ownership or control of fifty percent (50%) or more of the voting rights of the entity in question, (iii) the power to appoint or approve and remove fifty percent (50%) or more of the members of the entity in question’s governing body (i.e., board of directors or other similar governing body), or (iv) the power, directly or indirectly, to otherwise direct the management, policies or affairs of the entity in question, whether through the ownership of voting securities, by contract (including the holding of any veto rights) or otherwise. Section 10.4 Sublandlord’s Right of First Refusal. Subject to the provisions of Section 6.4.5, Subtenant may sell, convey or transfer its interest in this Sublease, the leasehold estate, the MOB, and the personal property owned by Subtenant and located on the MOB and used in the operation or management thereof (collectively, the “Property”), subject to and in accordance with the terms of this Sublease. Except as otherwise provided in Section 10.1, in no event may Subtenant sell its interest in the Property, or may any interest in Subtenant be sold, to a Competitor. Except as specified herein in connection with an Affiliate Transfer or in Section 6.4.5, in order to accept an offer, whether solicited or unsolicited, for transfer or sale of all or substantially all of the Property (a “Transfer ”), Subtenant must first have offered the same to Sublandlord in accordance with the following provisions. Subject to the provisions of Section 6.4.5, Sublandlord shall have a recurring right of first refusal (a “Right of First Refusal”) to purchase prior to Subtenant consummating any proposed Transfer. Should Subtenant from time to time desire to Transfer (i) all or a portion of the Property, (ii) an undivided interest in all or a portion of the Property, or (iii) control of Subtenant as a result of a sale, transfer, or other conveyance of partnership or membership interests, or capital stock in Subtenant to a third party that is not an Affiliate thereof or of Subtenant (clauses (i), (ii) and (iii) are each the “Offered Property”), Subtenant shall furnish Sublandlord with a copy of a fully executed letter of intent or term sheet (“Subtenant Transfer Notice”) certified by an officer of Subtenant as being a bona fide, arms’ length transaction, which Subtenant Transfer Notice shall set forth: (w) the length of the inspection period, if any; (x) a description of the Offered Property; (y) the sales price therefor and the amount of earnest money required; and (z) any other material financial conditions and financial terms upon which the Offered Property will be Transferred. Within thirty (30) days of receipt of the Subtenant Transfer Notice, Sublandlord shall notify Subtenant in writing whether Sublandlord elects to purchase the Offered Property on the same terms and conditions set forth in the Subtenant Transfer Notice (“Election Notice”). If the Sublandlord provides an Election Notice electing to purchase the Offered Property, then the parties shall proceed as provided in subsection 10.4.1 below. If Sublandlord does not provide an Election Notice within such thirty (30) day period, Sublandlord shall be deemed to have waived its right to deliver an Election Notice and Sublandlord’s preferential right to purchase shall not apply to any Transfer of the Offered Property made within two hundred seventy (270) days after the Subtenant Transfer Notice for a purchase price that is at least ninety-five percent (95%) of the purchase price Page 229 of 329 41 set forth in the Subtenant Transfer Notice and upon such other material non-economic terms that are not materially more favorable to the purchaser than those set forth in the Subtenant Transfer Notice; provided, that if Subtenant fails to Transfer the Offered Property within such two hundred seventy (270) day period for at least ninety-five percent (95%) of the purchase price set forth in the Subtenant Transfer Notice and upon such material non-economic terms that are not materially more favorable to the purchaser than those set forth in the Subtenant Transfer Notice, Subtenant shall again submit to Sublandlord a Subtenant Transfer Notice with respect to such Offered Property and Sublandlord shall again have a preferential right to purchase the Offered Property as set forth herein. In the event that the Offered Property is an undivided interest in all or a portion of the Property, then in connection with the closing of the sale of such Offered Property to Sublandlord, Subtenant and Sublandlord shall enter into a mutually agreeable joint ownership agreement setting forth the rights and obligations of the Sublandlord and Subtenant with regard to the Property, including, but not limited to, cost sharing and maintenance. For the purposes of this Section 10.4 and Section 10.5, “material non-economic terms” include terms such as (a) with respect to terms in the originally signed contract for the Transfer of the Offered Property (but expressly not including the waiver of any terms or obligations therein, any modifications or amendments thereto, or any amendments and restatements thereof), the length of diligence periods specified in the contract for the Transfer of the Offered Property and the timing for closing specified in the contract for the Transfer of the Offered Property, and (b) required loan assumptions, required acquisition by Sublandlord of other real estate owned by Subtenant (or an Affiliate of Subtenant) that is not the Ground Subleased Premises, or required membership or partnership interest assumptions, in each case which Subtenant is requiring as a condition to the conveyance of the Ground Subleased Premises, provided, however, the parties acknowledge and agree that “material non-economic terms” do not include terms such as (c) discretionary closing or due diligence extensions, discretionary closing or due diligence accelerations, closing deliverables, closing conditions, post-closing survival periods for indemnities, post-closing survival periods for representations and warranties and any holdbacks, guarantees, or indemnitees related to the same, and/or the discretionary waiver of any of the foregoing, and (d) with respect the waiver of any terms or obligations set forth in a contract for the Transfer of the Offered Property, any modifications or amendments thereto, or any amendments and restatements thereof, the length of diligence periods and the timing for closing. The Right of First Refusal contained in this Section shall apply to any subsequent Transfer occurring while this Sublease is in effect; provided however, the foregoing Right of First Refusal shall not be applicable to a transfer of the Property as a result of foreclosure or other action or proceeding for the enforcement of a Leasehold Mortgage (or by deed in lieu thereof) given to a Mortgagee in an arm’s-length transaction, but shall apply to any subsequent Transfer following such foreclosure or other action or proceeding. Notwithstanding anything to the contrary set forth in this Sublease, the Right of First Refusal shall not apply if the Offered Property is contemplated to be conveyed to an Affiliate of Subtenant. 10.4.1. Election to Purchase. Upon receipt of the Election Notice in which Sublandlord elects to purchase the Offered Property on the same terms and conditions set forth in the Subtenant Transfer Notice, the parties shall proceed to consummate the purchase and sale of the Offered Property with a ninety (90) day due diligence period and a thirty (30) day period to close thereafter; provided that such sale shall be for cash and by special warranty deed, “as is, where is”, free and clear of liens, claims and encumbrances other than those existing on the date Page 230 of 329 42 hereof, those created by or through or with the written consent of Sublandlord, or agreed to by the parties on the same terms and conditions as set forth in the Subtenant Transfer Notice, except as otherwise mutually agreed to by the parties. Section 10.5 Sublandlord’s Right of First Offer. Sublandlord shall have a recurring right of first offer (a “Right of First Offer”) to elect to purchase the Offered Property if Subtenant desires to Transfer the Offered Property. Should Subtenant from time to time elect to Transfer the Offered Property, then prior to offering such Offered Property for Transfer to any third party, Subtenant shall furnish Sublandlord with a written notice containing the price and material financial terms and financial conditions upon which Subtenant is willing to Transfer the Offered Property (“ROFO Notice”). Within thirty (30) days of receipt of the ROFO Notice, Sublandlord shall notify Subtenant in writing whether Sublandlord elects to purchase the Offered Property on the same terms and conditions set forth in the ROFO Notice (“ROFO Election Notice”). If the Sublandlord provides a ROFO Election Notice electing to purchase the Offered Property, then the Parties shall proceed as provided below. If Sublandlord does not provide a ROFO Election Notice within such thirty (30) day period, then Sublandlord shall be deemed to have waived its right to deliver a ROFO Election Notice and Subtenant may accept an offer from a third party and proceed with a Transfer of the Offered Property within two hundred seventy (270) days after Sublandlord’s receipt of the ROFO Notice for a purchase price equal to or greater than ninety-five percent (95%) of the price stated in the ROFO Notice and upon such material non-economic terms that are not materially more favorable to the purchaser than those set forth in the ROFO Notice. Notwithstanding the foregoing, if (i) Subtenant fails to Transfer the Offered Property upon such material non-economic terms that are not materially more favorable to the purchaser than those set forth in the ROFO Notice within such two hundred seventy (270) day period, or (ii) if Subtenant is willing to Transfer the Offered Property for a purchase price that is less than ninety-five percent (95%) of that set forth in the ROFO Notice which was submitted to Sublandlord, then Sublandlord’s rights under this Section will be automatically reinstated and Subtenant shall again submit to Subtenant a ROFO Notice with respect to such Offered Property and Sublandlord shall again have a preferential right to purchase the Offered Property as set forth herein. Upon receipt of the ROFO Election Notice in which Sublandlord elects to purchase the Offered Property on the same terms and conditions set forth in the ROFO Notice, the Parties shall proceed to consummate the purchase and sale of the Offered Property within ninety (90) days thereafter; provided that such sale shall be for cash and by special warranty deed, “as is, where is”, free and clear of liens, claims and encumbrances other than those existing on the date hereof created by or through or with the consent of Sublandlord, or agreed to by the Parties on the same terms and conditions as set forth in the ROFO Notice, except as otherwise mutually agreed to by the Parties. The Right of First Offer contained in this Section shall apply to any subsequent Transfer occurring while this Sublease is in effect, provided however, the foregoing Right of First Offer shall not be applicable to a transfer of the Property as a result of foreclosure or other action or proceeding for the enforcement of a Leasehold Mortgage (or by deed in lieu thereof) given to a Mortgagee in an arm’s-length transaction, but shall apply to any subsequent Transfer following such foreclosure or other action or proceeding. Notwithstanding anything to the contrary set forth in this Sublease, the Right of First Refusal shall not apply if the Offered Property is contemplated to be conveyed to an Affiliate of Subtenant. Page 231 of 329 43 ARTICLE 11 - INSURANCE AND INDEMNIFICATION Section 11.1 Comprehensive General Liability Insurance. Subtenant shall, at its cost and expense, at all times during the Term, maintain in force, for the joint benefit of Sublandlord and Subtenant, and any holder of a mortgage on the Ground Subleased Premises, a broad form comprehensive coverage policy, by the terms of which Sublandlord and Subtenant, and any holder of a mortgage on the Ground Subleased Premises, are additional insureds. Such insurance policy or policies shall be maintained on the minimum basis of $2,000,000.00 for damage to property and for bodily injury or death as to any person, and $2,000,000.00 as to any one accident, with a deductible not exceeding $100,000.00. Such insurance policy or policies shall be stated to be primary and noncontributing with any insurance which may be carried by Sublandlord. A certificate of said insurance shall be delivered to Sublandlord on the Sublease Commencement Date, effective from and after the Sublease Commencement Date, and renewal certificates and proof of payment of premium therefor shall be delivered to Sublandlord prior to the renewal date of any such insurance policies during the Term and any Extended Term. In the event Subtenant fails to timely pay any premium when due, Sublandlord shall be authorized to do so, and may charge all costs and expenses thereof, including the premium and interest at the maximum rate allowed by law, to Subtenant, to be paid by Subtenant as additional rent hereunder. Section 11.2 Fire and Extended Coverage Property Insurance. Following the Substantial Completion of the Improvements, Subtenant shall, at its cost and expense and at all times during the Term and any Extended Term, maintain in force, for the joint benefit of Sublandlord and Subtenant, and any holder of a mortgage on the Ground Subleased Premises, a policy of insurance against loss or damage by fire and lightning, and such other perils as are covered under the broadest form of the “extended coverage” or “all risk” endorsements available in the State including, but not limited to, damage by wind storm, hurricane, explosion, smoke, sprinkler leakage, vandalism, malicious mischief and such other risks as are normally covered by such endorsements. The Recognized Mortgagee shall be named as required by its loan documents, and any insurance proceeds shall be applied in the manner as set forth in this Sublease, subject to the terms of the Leasehold Mortgage. The insurance shall be carried and maintained to the extent of full (actual) replacement cost of the MOB and the other Improvements located on the Ground Subleased Premises during the Term of this Sublease and any Extended Term; provided however, that during the period of construction of the Improvements, Subtenant shall provide or cause to be provided Builders’ Risk coverage to the full replacement costs thereof, including coverage for (x) loss of materials, furniture, fixtures, and supplies which become part of the completed project whether on-site, in transit or stored off-site, (y) soft costs, and (z) Ordinance or Laws coverage in amounts reasonably acceptable to Sublandlord, with replacement cost valuation and an agreed amount endorsement or waiver of co-insurance. Such insurance policy or policies shall be stated to be primary and noncontributing with any insurance which may be carried by Sublandlord. In addition, the deductible for such insurance shall not exceed $25,000.00. A certificate of said insurance shall be delivered to Sublandlord on the Sublease Commencement Date, to be effective from and after the Sublease Commencement Date. Any renewal certificates and proof of payment of premium therefor shall be delivered to Sublandlord prior to the renewal date of any such insurance policies during the Term and any Extended Term. In the event Subtenant fails to timely pay any premium when due, Sublandlord shall be authorized, but not obligated, to do so, and may charge all costs and expenses thereof, including the premium and interest at the Default Rate, to Page 232 of 329 44 Subtenant, to be paid by Subtenant as additional rent hereunder. Sublandlord shall have no obligation to obtain insurance for the benefit of Subtenant. Section 11.3 Other Insurance. Subtenant must also maintain, at its sole cost and expense, the following insurance policies, all of which must be reasonably satisfactory to Sublandlord in carrier, forms, amounts and coverage: (a) if Subtenant has any employees, (i) during the construction of the Improvements, worker’s compensation as prescribed by applicable Law; and (ii) Employers’ Liability insurance in an amount of no less than $1,000,000 per accident for bodily injury and disease; covering all Subtenant employees working on or about the MOB (and a waiver of subrogation will apply to all parties); (b) at all times during the Term, Automobile liability insurance, including operation of “autos”, hired, or non-owned in an amount not less than $1,000,000 for bodily injury and property damage, which must insure against any and all claims for bodily injury, including death resulting therefrom, and damage to the property of others arising from its operations under the contracts, whether such operations are performed by Subtenant, Subtenant’s contractors, or by anyone directly or indirectly employed by any of them (and a waiver of subrogation will apply to all parties); (c) at all times during the Term, umbrella or excess liability insurance following form to the general liability policy requirements listed above, in an amount not less than $10,000,000 per occurrence, with a minimum aggregate limit of $10,000,000; and (d) such other insurance coverages maintained by Subtenant, Subtenant’s Contractor, and any subcontractors, in such forms and amounts as Sublandlord may request consistent with the customary practices of prudent developers and owners of similar properties. Section 11.4 Waiver of Subrogation. Sublandlord and Subtenant and all parties claiming under them mutually release and discharge each other from all claims and liabilities arising from or caused by any casualty or hazard covered or required hereunder to be covered in whole or in part by the casualty and liability insurance to be carried on the MOB, the Ground Subleased Premises or in connection with any improvements on or activities conducted on the Ground Subleased Premises, and the MOB, and waive any right of subrogation which might otherwise exist in or accrue to any person on account thereof, and evidence such waiver by endorsement to the required insurance policies, provided that such release shall not operate in any case where the effect is to invalidate or increase the cost of such insurance coverage (provided that in the case of increased cost, the other party shall have the right, within thirty (30) days following written notice, to pay such increased cost, thereby keeping such release and waiver in full force and effect). Section 11.5 Indemnification. Subtenant shall indemnify, defend, protect, and hold Sublandlord free and harmless from and against any and all claims, actions, causes of action, liabilities, penalties, forfeitures, damages, losses or expenses (including, without limitation, reasonable attorneys’ fees and costs through litigation and all appeals) actually incurred by Sublandlord in connection with or arising from (a) any occurrence in, upon, at or about the Master Ground Leased Premises; (b) the occupancy, use, construction upon and maintenance of the Master Ground Leased Premises by Subtenant and its tenants, subtenants, guests and invitees, and any party acting by, through or under any of them, but expressly excluding Sublandlord or Sublandlord’s Representatives; (c) the operation of the business of Subtenant thereon; and (d) any act or failure to act, occasioned wholly or in part by gross negligence or willful misconduct of Subtenant and its agents, contractors, employees, and invitees, but expressly excluding Sublandlord or Sublandlord’s Representatives. Nothing contained herein shall be construed to Page 233 of 329 45 make Subtenant liable for any injury or loss caused by the negligence, gross negligence or willful misconduct of Sublandlord or any of Sublandlord’s Representatives, Sublandlord agreeing to indemnify and hold Subtenant harmless therefrom. ARTICLE 12 - DAMAGE AND DESTRUCTION Section 12.1 Subtenant’s Duty to Restore Premises. At any time during the Term or Extended Term(s) of this Sublease, and so long as no Event of Default has occurred, if any buildings or improvements now or hereafter on the Ground Subleased Premises are damaged and/or destroyed in whole or in part by fire, theft, the elements, or any other cause, and such damage or destruction does not constitute a Major Casualty, this Sublease shall continue in full force and effect, and Subtenant, at its sole cost and expense, shall repair and restore the damaged or destroyed MOB and related improvements according to the original plan hereof or according to such modified plans as shall be reasonably approved in writing by Sublandlord so long as (i) leases with tenants (including Sublandlord) comprising not less than seventy-five percent (75%) of the occupied space in the MOB at the time of such casualty remain in full force and effect, (ii) tenants (including Sublandlord) under leases comprising not less than seventy-five percent (75%) of the occupied space in the MOB at the time of such casualty shall have waived any right to terminate their respective leases together in connection with such damage or destruction, (iii) the MOB Leases shall have not less than eight (8) years remaining on its term (including available options provided that the tenants under such MOB Leases have exercised any option necessary to make the then-current term of the MOB Leases have at least eight (8) years remaining), and (iv) not less than forty-five (45) years shall remain under the Term of this Sublease, as may be extended by any available Extended Term (the “Mandatory Restoration Conditions”). If the conditions set forth in clauses (i) through (iv) above are not each satisfied, then Subtenant may elect to terminate this Sublease by written notice to Sublandlord (a “Subtenant Non-Major Casualty Termination Election”), in which case this Sublease shall terminate on the sixtieth (60th) day after Sublandlord receives such notice. In the event of such termination, at Sublandlord’s election in Sublandlord’s sole and absolute discretion, Subtenant shall, at Subtenant’s sole cost and expense, demolish the remaining improvements and promptly remove all debris from the Ground Subleased Premises. Any work of repair and restoration commenced by Subtenant hereunder shall be commenced by Subtenant as soon as reasonably possible, with due consideration given to, among other things, clearing of damaged portions of the Ground Subleased Premises and site preparation, adjustment of insurance claims, redesign, rebidding and repermitting, obtaining a new loan or loans for construction or repair, and Subtenant shall proceed diligently to commence any such repairs and restoration. Once construction has commenced, Subtenant shall proceed diligently thereafter to complete the construction or repair, and shall complete the same no later than (I) eighteen (18) months in the case of damage or destruction of seventy-five percent (75%) of the MOB or less, and (II) twenty-four (24) months in the case of damage or destruction greater than seventy-five percent (75%) of the MOB, after obtaining all necessary governmental licenses, permits and approvals to complete the construction or repair and the commencement of such construction or repair (which commencement shall not be deemed to have occurred due to the razing of damaged Improvements or the erection of temporary structures) and subject to delays due to Force Majeure Events. Subtenant shall not be responsible for delays caused by Force Majeure Events. Sublandlord will, at Subtenant’s expense, reasonably cooperate with Subtenant in the pursuit of any such necessary licenses, permits and approvals including, without limitation, completion and submittal of any application for the same. Notwithstanding anything to the contrary contained Page 234 of 329 46 herein, so long as no Event of Default has occurred, if (a) any buildings or improvements now or hereafter on the Ground Subleased Premises are damaged and/or destroyed (1) in the amount of seventy-five percent (75%) or more, by fire, theft, the elements, or (2) during the last forty-five (45) years of the Term as may be extended by any available Extended Term or (b) following any damage or destruction to any buildings or improvements now or hereafter on the Ground Subleased Premises, the Mandatory Restoration Conditions are not satisfied or the creditworthiness of Sublandlord or such successor to Sublandlord (as the case may be), together with any lease guarantor, does not at such time, in the good faith determination of Subtenant, meet or exceed the creditworthiness of Sublandlord as of the Effective Date (a “Major Casualty”), Subtenant shall have the option to terminate this Sublease. Such option to terminate shall be exercised by Subtenant delivering to Sublandlord written notice of Subtenant’s intent to terminate this Sublease (a “Subtenant Major Casualty Termination Election”), in which case this Sublease shall terminate on the sixtieth (60th) day after Sublandlord receives such Subtenant Major Casualty Termination Election; provided, however, that if Subtenant’s election to terminate the Sublease was the result of the Mandatory Restoration Conditions not being satisfied as of the date of the Subtenant Major Casualty Termination Election, then Sublandlord may, within thirty (30) days following Subtenant’s delivery to Sublandlord of the Subtenant Major Casualty Termination Election, elect to deliver written notice to Subtenant (a “Sublandlord Major Casualty Rebuilding Election”) of Sublandlord’s election to enter into such amendments and/or amendments to and restatements of this Sublease and/or any sublease of the Ground Subleased Premises (to the extent then subleased to Sublandlord) as shall be required to satisfy the Mandatory Restoration Conditions. If Sublandlord timely delivers a Sublandlord Major Casualty Rebuilding Election, then Sublandlord and Subtenant shall enter into such amendments to and/or amendments and restatements of this Sublease and/or any applicable sublease as shall be necessary to satisfy the Mandatory Restoration Conditions within thirty (30) days following Sublandlord’s delivery of the Sublandlord Major Casualty Rebuilding Election and upon entering into such amendments and/or amendments and restatements, the related Subtenant Major Casualty Termination Election shall be deemed revoked. If Subtenant has delivered a Subtenant Major Casualty Termination Election and Sublandlord fails to timely deliver a Sublandlord Major Casualty Rebuilding Election, then the parties will not have any further rights or obligations under this Sublease, except those which expressly survive a termination; provided, however, that in such event, at Sublandlord’s election in Sublandlord’s sole and absolute discretion, Subtenant shall, at Subtenant’s sole cost and expense, demolish the remaining improvements and promptly remove all debris from the Ground Subleased Premises. Section 12.2 Application of Insurance Proceeds. Any and all fire or other insurance proceeds that become payable at any time during the Term or any Extended Term because of damage to or destruction of any buildings or improvements on the Ground Subleased Premises shall, subject to the terms of any Leasehold Mortgage incurred by Subtenant pursuant to Article 6 of this Sublease, be paid, if not required to be paid to such Recognized Mortgagee, to Subtenant and applied toward the cost of repairing and restoring the damaged or destroyed buildings or improvements in the manner required by Section 12.1 of this Sublease. Notwithstanding the foregoing, in the event that Subtenant exercises its option to terminate this Sublease under Section 12.1 above pursuant to a Subtenant Non-Major Casualty Termination Election or a Subtenant Major Casualty Termination Election, then, in either such event, any and all fire or other insurance proceeds that become payable as follows: first, to the payment of any outstanding amounts owed to the Recognized Mortgagee, next, to any reasonable costs Subtenant incurs in connection with Page 235 of 329 47 the adjustment of the loss and the collection thereof and razing the Ground Subleased Premises if required by Sublandlord (provided that if Sublandlord does not require Subtenant to raze the Ground Subleased Premises, then an amount equal to the reasonable cost of razing the Ground Subleased Premises will be paid to Sublandlord), and the remainder to Subtenant. ARTICLE 13- DEFAULTS AND REMEDIES Section 13.1 Defaults. Each of the following events in Section 13.1.1 through 13.1.6 below shall be a default by Subtenant and a breach of this Sublease and constitute an “Event of Default.” 13.1.1. Abandonment. Intentional abandonment of the Ground Subleased Premises after the Rent Commencement Date, as evidenced by no activity on the Ground Subleased Premises or the improvements now or hereafter constructed thereon (except temporarily (i) during the diligent undertaking of repairs following a casualty or condemnation, (ii) if on account of a Force Majeure Event, or (iii) at any such time as the MOB is vacant provided Subtenant is using commercially reasonable efforts to lease the same), where such abandonment continues for a period of ninety (90) days after notice thereof by Sublandlord to Subtenant. 13.1.2. Attachment or Other Levy. The subjection of any right or interest of Subtenant in the Ground Subleased Premises to attachment, execution or other levy, or to seizure under legal process, if not released within ninety (90) days, subject to Subtenant’s right to promptly and actively contest the same in good faith and by appropriate proceedings. 13.1.3. Appointment of Receiver. The appointment of a receiver to take possession of the Ground Subleased Premises or improvements thereof, or of Subtenant’s interest in the leasehold estate or of Subtenant’s operations on the Ground Subleased Premises, for any reason, including but not limited to assignment for benefit of creditors or voluntary or involuntary bankruptcy proceedings, but not including receivership (a) pursuant to administration of the estate of any deceased or incompetent individual member of any Subtenant, or (b) pursuant to any mortgage permitted by the provision of this Sublease relating to the purchase or construction of improvements, (c) instituted by Sublandlord, the event of default being not the appointment of a receiver at Sublandlord’s instance, but the event justifying the receivership, if any, or (d) that is dismissed, vacated, terminated or discharged within ninety (90) days (subject to extension due to Force Majeure Events). 13.1.4. Insolvency: Bankruptcy. An assignment by Subtenant for the benefit of creditors, or the filing of a voluntary or involuntary petition by or against Subtenant under any law for the purpose of adjudicating Subtenant a bankrupt; or for extending time for payment, adjustment or satisfaction of Subtenant’s liabilities; or reorganization, dissolution, or arrangement on account of, or to prevent bankruptcy or insolvency; unless, in case of such that are involuntary on Subtenant’s part, the assignment, proceedings, and all consequent orders, adjudications, custodies and supervisions are dismissed, vacated or terminated within ninety (90) days after the assignment, filing or other initial event (subject to extension due to Force Majeure Events). 13.1.5. Violation of Use Restrictions. (a) Subtenant’s violation (which expressly includes any violation by any tenant of the MOB, subtenant thereof, or other occupant of the MOB) Page 236 of 329 48 of the use restrictions set forth in this Sublease at any time in which the Sublandlord Operation Condition is satisfied, including, without limitation, Qualified Tenant requirements, the Prohibited Use restrictions set forth in Section 4.2 of this Sublease and the restrictions on transactions with Competitors or Unqualified Operators, or (b) in the case of the violation of the use restrictions set forth in this Sublease by any tenant of the MOB subtenant thereof, or other occupant of the MOB at any time in which the Sublandlord Operation Condition is satisfied, including, without limitation, Qualified Tenant requirements, the Prohibited Use restrictions set forth in Section 4.2 of this Sublease, Subtenant’s failure to (i) include the Qualified Tenant requirements or the Prohibited Use restrictions in any lease, (ii) use efforts to enforce such provisions under a lease as required under Section 4.3.1, or (iii) agree with any tenant of the MOB under a lease or otherwise in writing that Sublandlord will have third-party beneficiary rights to enforce the Qualified Tenant requirements and the Prohibited Use restrictions directly against such tenant, after the application of the notice and cure provisions in Section 13.1.7 below and as further subject to the provisions of Sections 13.1.8 and 13.1.9 below. 13.1.6. Default in Payment or Performance Under this Sublease. Failure of Subtenant to pay any installment of Base Annual Rent, additional rent, or any impositions or other monetary obligations of any nature whatsoever required to be paid by Subtenant under this Sublease when due and payable, but subject to Section 13.1.7 below; or failure of Subtenant to observe or perform any of its other covenants, conditions or agreements under this Sublease, which failure has an adverse effect on Sublandlord; or the breach of any warranties or representations of Subtenant under this Sublease having a material and adverse effect upon Sublandlord. For purposes of this Article 13, all monetary payments required to be made under this Sublease, including, but not limited to, Taxes, insurance premiums, utility payments, and association assessments, together with all other sums Subtenant is obligated to pay under this Sublease (other than rent), shall be deemed additional rent hereunder. 13.1.7. Notice and Right to Cure. If the alleged default is monetary in nature such as (but not limited to) nonpayment of rent, taxes or any other sums required to be paid by Subtenant, Sublandlord shall deliver written notice to Subtenant of the default and Subtenant will have thirty (30) days after the receipt of such written notice to cure the default; provided, however, that if after exercise of due diligence and its best efforts to cure such monetary default Subtenant is unable to do so within the thirty (30) day period, then Subtenant’s failure to cure such monetary default shall not result in an Event of Default unless Subtenant fails to cure such monetary default within an additional thirty (30) days. Subtenant shall promptly commence and diligently pursue such legal or equitable actions to enforce the provisions of Sections 4.2.1 or 4.3.1 or the Qualified Tenant requirements set forth herein, as the case may be, in the manner described in Section 4.3.1 (but, for the avoidance of doubt, excluding termination of the applicable lease) in the event those provisions have been violated. Said actions shall be instituted and prosecuted, at Subtenant’s cost and expense, with counsel of Subtenant’s choice. As to any other non-monetary defaults not otherwise specifically addressed in this Sublease, Subtenant shall have sixty (60) days after written notice is given by Sublandlord specifying the nature of the default to cure the default; provided, however, that if after exercise of due diligence and its commercially reasonable efforts to cure such non-monetary default Subtenant is unable to do so within the sixty (60) day period, then (a) the cure period shall be extended for such time as is necessary to cure such non-monetary default, so long as Subtenant continues to diligently prosecute to completion the curing of the default and (b) in the event that Subtenant ceases or fails to diligently prosecute such cure, then Subtenant’s failure Page 237 of 329 49 to cure such non-monetary default and to diligently prosecute such cure shall not result in an Event of Default unless and until (1) Sublandlord delivers to Subtenant an additional written notice of such non-monetary default, prominently marked or identified on the notice itself and, if delivered via United States mail or certified mail, on the outside of the envelope, containing the notice with the legend, “SECOND NOTICE OF POTENTIAL EVENT OF DEFAULT - FAILURE TO CURE WITHIN THIRTY (30) DAYS MAY RESULT IN AN EVENT OF DEFAULT UNDER THE SUBLEASE.”, and (2) Subtenant fails to cure such non-monetary default within thirty (30) days following Subtenant’s receipt of such notice. As used herein, non-monetary default shall be those non-monetary defaults described in Section 13.1.6 of this Sublease. 13.1.8. Sublandlord and Sublandlord Representative Lease Defaults. Notwithstanding anything in this Sublease to the contrary, in the event that any alleged breach or default by Subtenant under this Sublease is caused by or is the result of any act or omission by Sublandlord or any of its Affiliates (including any act or omission by Sublandlord or any of its Affiliates under the MOB Leases) or any of their respective sub-tenants or licensees, or any of their respective members, directors, officers, employees, tenants, licensees, invitees, contractors or agents (other than Subtenant and Subtenant’s Representatives) (each, inclusive of Sublandlord, a “Sublandlord Representative” and collectively, the “Sublandlord’s Representatives”), including if such Sublandlord Representative is obligated under an MOB Lease or other lease, as applicable, to pay for or perform any obligations that correspond to any of Subtenant’s obligations hereunder, then Subtenant shall be not in breach or default under this Sublease whether or not Subtenant performs or fails to perform the same. Under no circumstance shall any act or omission of such Sublandlord Representative entitle any Sublandlord Representative to indemnification under this Sublease. For the avoidance of doubt, this Section 13.1.8 shall apply to all Subtenant obligations under this Sublease, even if such obligations are not expressly stated herein as being subject to this Section 13.1.8 and, in the event of any conflict or inconsistency between the terms of this Section 13.1.8 and any other provisions in this Sublease, this Section 13.1.8 shall govern and control. 13.1.9. Defaults by Tenants. Notwithstanding anything to the contrary set forth in Section 13.1.5 or in this Sublease, in the event that any tenant of the MOB, or any subtenant thereof, or any occupant of the MOB, has breached or violated Prohibited Use restrictions or failed to comply with its obligation to remain a Qualified Tenant, Subtenant shall not be in breach or default under this Sublease so long as Subtenant (i) included the Prohibited Use Restrictions and Qualified Tenant requirements, as applicable, in such tenant’s, subtenant’s or occupant’s lease or other occupancy agreement, (ii) is using commercially reasonable efforts to enforce the Qualified Tenant requirements and the Prohibited Use restrictions directly against such tenant, subtenant, or occupant in accordance with Section 4.3.1, and (iii) has not agreed with such tenant, subtenant, or occupant under its lease or occupancy agreement, or otherwise, that Sublandlord does not have third-party beneficiary rights to enforce the Qualified Tenant requirements and Prohibited Use restrictions directly against such tenant, subtenant, or occupant. Section 13.2 Remedies. If any default by Subtenant shall continue uncured upon expiration of the applicable curing period described in Section 13.1.7 above, then subject to the rights of any Mortgagee as described in this Sublease, Sublandlord may exercise any one or all of the following remedies in addition to all other rights and remedies provided by law or equity, from time to time, to which Sublandlord may resort cumulatively or in the alternative: Page 238 of 329 50 13.2.1. Termination. Sublandlord may, at Sublandlord’s election, and without notice, terminate this Sublease. All Subtenant’s rights and interest of any kind whatsoever in the Master Ground Leased Premises, the MOB and in all improvements shall terminate upon termination of this Sublease. Promptly after any such termination, Subtenant shall surrender and vacate the Master Ground Leased Premises, the MOB and any other improvements in broom-clean condition, and Sublandlord may re-enter and take possession of the Master Ground Leased Premises, the MOB and all other improvements. Termination under this paragraph shall not relieve Subtenant from the payment of any sum then due to Sublandlord, or from any claim for damages previously accrued, or then accruing, against Subtenant. 13.2.2. Re-entry Without Termination. If permitted under applicable law, Sublandlord may, at Sublandlord’s election, and subject to applicable law and process, re-enter the Master Ground Leased Premises, the MOB and improvements thereon, and without terminating this Sublease, at any time, relet the Master Ground Leased Premises and improvements, or any part(s) of them, for the account, and in the name of Subtenant or otherwise, all upon commercially reasonable rates and terms determined by Sublandlord. Any reletting may be for the remainder of the Term, the Extended Term(s) or for any longer or shorter period. Sublandlord may execute any leases made under this provision either in Sublandlord’s name or in Subtenant’s name, and Sublandlord, subject to applicable law and process, shall be entitled to all rents from the use, operation or occupancy of the Master Ground Leased Premises or improvements, or both. Sublandlord shall have the further right, at Sublandlord’s option, to make such reasonable and necessary alterations, repairs, replacements and/or restorations which shall not operate or be construed to release Subtenant from liability hereunder. Subtenant shall nevertheless pay to Sublandlord on the due dates specified in this Sublease the equivalent of all sums required of Subtenant under this Sublease, plus Sublandlord’s reasonable expenses. No act by or on behalf of Sublandlord under this provision shall constitute a termination of this Sublease unless Sublandlord gives Subtenant written notice of termination. 13.2.3. Tenant’s Personal Property. Sublandlord may, at Sublandlord’s election, use Subtenant’s personal property and trade fixtures or any of such property and fixtures without compensation and without liability for use or damage, or store them for the account and at the cost of Subtenant. The election of one remedy for any one item shall not foreclose an election of any other remedy for another item, or for the same item at a later time. 13.2.4. Acceleration. Sublandlord may accelerate the Base Annual Rent, the rent and any additional rent due hereunder and Subtenant shall immediately pay Sublandlord, as damages, the value of the entire amount of all such sums which would become due and payable during the remainder of the Term, less the fair market value of the Ground Subleased Premises and the MOB, discounted to present value using the then applicable discount rate of the Federal Reserve Bank. Present Value shall be determined utilizing generally accepted standard present value tables available at the time of such election. 13.2.5. Appointment of Receiver. Sublandlord may, if Sublandlord elects to file suit to enforce this Sublease and/or protect its rights hereunder, in addition to the other remedies provided in this Sublease and by law, have the appointment of a receiver of the Ground Subleased Premises and the improvements thereon. Page 239 of 329 51 Section 13.3 Remedies Cumulative. Suit or suits for the recovery of such damages, or any installments thereof, may be brought by Sublandlord from time to time at its election, and nothing contained herein shall be deemed to require Sublandlord to postpone suit until the date when the term of this Sublease would have expired nor limit or preclude recovery by Sublandlord against Subtenant of any sums or damages which, in addition to the damages particularly provided above, Sublandlord may lawfully be entitled by reason of any default hereunder on the part of Subtenant. All the remedies hereinbefore given to Sublandlord and all rights and remedies given to it at law and in equity shall be cumulative and concurrent. Section 13.4 Subtenant’s Liability After Default. If an Event of Default shall occur under this Sublease, Sublandlord, without thereby waiving such default, may (but shall not be obligated to) perform the same for the account and at the expense of Subtenant, without notice in a case of emergency, and in any other case only if such default continues after the expiration of the curing period applicable, if any, under Section 13.1.7 of this Sublease. Any reasonable expenses incurred by Sublandlord in connection with any such performance, and all costs, expenses, and disbursements of every kind and nature whatsoever, including, subject to Section 15.12, reasonable attorneys’ fees involved in collecting or endeavoring to collect the rent or any additional rent or any part thereof or enforcing or endeavoring to enforce any rights against Subtenant or Subtenant’s obligations hereunder, shall be due and payable upon Sublandlord’s submission of an invoice therefor. All sums advanced by Sublandlord on account of Subtenant under this section, or pursuant to any other provision of this Sublease, and all rent, if delinquent or not paid by Subtenant and received by Sublandlord when due hereunder, shall bear interest at the Default Rate, from the due date thereof until paid and the same shall be and constitute additional rent and be due and payable upon Sublandlord’s demand therefor. Section 13.5 Holdover. If Subtenant remains in possession of the Ground Subleased Premises or any part thereof after the expiration or sooner termination of the Term or any extension thereof, Subtenant shall become a subtenant at sufferance and shall pay the Sublandlord a rent equal to 200% of the Base Annual Rent paid by Subtenant in the last month prior to the expiration or termination of the Sublease, which shall be payable on a per diem basis, not to exceed the amount permitted to be charged by a Sublandlord under applicable State law. Notwithstanding that Sublandlord may allow Subtenant to continue in possession after the expiration or sooner termination of this Sublease, neither that nor the provisions of this section shall constitute a waiver of any of Sublandlord’s rights under this section or this Sublease. Further, notwithstanding the payment of rent by Subtenant and acceptance thereof by Sublandlord as provided in this section, Subtenant shall be in continuing breach of this Sublease at any time or during any period in which Subtenant is a holdover subtenant. ARTICLE 14 - SURRENDER AND REMOVAL Section 14.1 Surrender of Possession. Upon the expiration of the Term, the Extended Term(s) or any earlier termination thereof, Subtenant shall surrender to Sublandlord possession of the Master Ground Leased Premises, the MOB and all other improvements constructed and installed on the Ground Subleased Premises broom-clean and in its then current condition, so long as Subtenant has fully complied with its ongoing maintenance obligations as set forth in this Sublease, reasonable wear and tear excepted. Subtenant may remove, or cause to be removed, all personal property and equipment of Subtenant, other than permanent fixtures, from the Master Page 240 of 329 52 Ground Leased Premises within thirty (30) days after the date of any termination of this Sublease; thereafter all such personal property and equipment not removed shall belong to Sublandlord without the payment of any consideration. Section 14.2 Tenant’s Quitclaim. Upon the expiration of the Term or any Extended Term, or any sooner termination of this Sublease, Subtenant agrees that its interests shall be quit claimed to Sublandlord without necessity of further action, provided, however, that Subtenant shall, upon request, execute, acknowledge and deliver to Sublandlord an instrument in writing, quitclaiming to Sublandlord all right, title and interest of Subtenant in and to the Ground Subleased Premises and all improvements (including the MOB), free and clear of any liens, mortgages or other encumbrances other than the Master Ground Lease, this Sublease, the Permitted Encumbrances, and any encumbrances entered into, approved or consented to by Sublandlord. ARTICLE 15 - GENERAL PROVISIONS Section 15.1 Sublease Subordinate to Master Ground Lease. This Sublease is and will at all times be subject and subordinate to the Master Ground Lease, but subject in all respects to the Master Landlord Recognition Agreement. Subtenant will not take any action under this Sublease that would constitute a default under the Master Ground Lease subject to the Master Landlord Recognition Agreement. Subtenant acknowledges that it has been provided with a copy of the Master Ground Lease prior to the execution of this Sublease. Section 15.2 Intentionally Omitted. Section 15.3 Conditions and Covenants. All of the provisions of this Sublease shall be deemed as running with the land, and construed to be “conditions” as well as “covenants” as though the words specifically expressing or imparting covenants and conditions were used in each separate provision. Section 15.4 Survival of Indemnities. All representations, warranties and indemnities of Subtenant under this Sublease shall survive the expiration or sooner termination of this Sublease. Section 15.5 No Waiver of Breach. No failure by either Sublandlord or Subtenant to insist upon the strict performance by the other of any covenant, agreement, term or condition of this Sublease, or to exercise any right or remedy consequent upon a breach thereof, shall constitute a waiver of any such breach or of such covenant, agreement, term or condition. No waiver of any breach shall affect or alter this Sublease, but each and every covenant, condition, agreement and term of this Sublease shall continue in full force and effect with respect to any other then existing or subsequent breach. Section 15.6 Unavoidable Delay. 15.6.1. If either party shall be delayed or prevented from the performance of any act required by this Sublease by reason of (i) acts of God (including floods, fires, earthquakes, explosions and other natural disasters), and other casualties and adverse weather conditions to the extent exceeding the number of weather delay days specified in the project schedule in the applicable construction contract, (ii) war, invasions or other hostilities (whether war is declared or Page 241 of 329 53 not), terrorist threats or acts, riots or other civil unrest, embargoes or blockades, (iii) strikes, lockouts, labor disputes, labor stoppages or slowdowns or other industry disturbances, (iv) inability to procure materials through use of commercially reasonable efforts, (v) restrictive governmental laws or regulations, proclamations, orders, laws, actions, or requests, (vi) epidemics, pandemics, or other national or regional public health emergency, (vii) unreasonable delays in transportation, (viii) a governmental authority’s failure to provide an approval or issue a building, construction, development permit, or any other similar permit which failure is beyond the reasonable control of the party seeking such approval or permit, (ix) delays by public utility companies beyond the reasonable control of the party obligated, (x) Sublandlord Delay, or (xi) another cause beyond the reasonable control of the party obligated (financial inability excepted) (each, a “Force Majeure Event”), performance of such act shall be excused for the period of the delay and the period for the performance of such act shall be extended for a period equivalent to the period of such delay; provided, however, nothing in this section shall excuse Subtenant from the prompt payment of any rental or other charge required of Subtenant except as may be expressly provided elsewhere in this Sublease. 15.6.2. “Sublandlord Delay” shall mean and include delays to the extent caused by: (a) any “Tenant Delay”, as such term is defined in the MOB Leases; (b) Sublandlord’s failure (including in its capacity directly or through affiliates as tenant under the MOB Leases) to obtain all required approvals and permits for the performance of the Interior Improvements or to complete any Interior Improvements, in each case which are necessary for achievement of Substantial Completion of the Improvements; (c) Sublandlord’s failure to timely satisfy any of its obligations under this Sublease; and (d) Sublandlord’s failure to take any action required of it under this Sublease for the issuance of any licenses or permits or for the achievement of Substantial Completion of the Improvements. In order for Subtenant to obtain any extension of time to perform as a result of any Sublandlord Delay, Subtenant must provide written notice to Sublandlord, with a notation thereon in BOLD, ALL CAPS font that a Sublandlord Delay has commenced, within two (2) business days following the commencement of any Sublandlord Delay. Any failure to deliver the foregoing written notice to Sublandlord will not constitute a default under this Ground Sublease, but any Sublandlord Delay will not be determined to have commenced until such notice is provided. Section 15.7 Notices. Unless otherwise specifically provided in this Sublease or by law, any and all notices or other communications required or permitted by this Sublease or by law to be served on, given to, or delivered to any party to this Sublease shall be in writing and shall be deemed duly served, given, delivered and received (i) when personally delivered (including confirmed overnight delivery service to the party to whom it is directed), or (ii) in lieu of such personal delivery, when three (3) business days have elapsed following deposit thereof in the Page 242 of 329 54 United States mail, first-class postage prepaid, certified, return receipt requested, or (iii) the next business day following delivery to a nationally recognized overnight carrier (e.g. Federal Express), or (iv) the date of such delivery via electronic mail (provided, however, that (a) any notice provided via electronic mail must be followed by a hard copy notice delivered via one of the methods described in clauses (i) through (iii) above, and (b) with respect to any recipient for which an email address is listed below (or pursuant to any updated address information from time to time provided in accordance with this Section), notice delivered via any of the methods described in clauses (i) through (iii) above shall not be deemed given unless notice is also provided via electronic mail), in each case addressed to: Sublandlord: University of Colorado Health 12401 East 17th Avenue Mail Stop A-037 Aurora, Colorado 80045-0508 Attention: Director of Real Estate With copy to: University of Colorado Health 12401 E. 17th Avenue, MS F415 Aurora, Colorado 80045-0508 Attn: Chief Legal Officer And to: Sheppard Mullin 333 South Hope Street, 43rd Floor Los Angeles, California 90071-1422 Attention: Timothy Reimers & Scott Timpe Email: treimers@sheppardmullin.com; stimpe@sheppardmullin.com Subtenant: c/o Remedy Medical Properties, Inc. 800 W. Madison, Suite 400 Chicago, IL 60607 Attention: Peter Westmeyer Email: pwestmeyer@remedymed.com and Attention: Gregg Graines Email: ggraines@remedymed.com With copy to: Greenberg Traurig LLP 1840 Century Park East, Suite 1900 Los Angeles, CA 90067 Attention: Gregory Fishman, Esq. Email: fishmang@gtlaw.com Either party may change its address for the purpose of this paragraph by giving written notice of such change to the other party in the manner provided in its paragraph. Page 243 of 329 55 Section 15.8 Gender; Interpretation. The use herein of (a) any gender includes all others, and (b) the singular number includes the plural and vice-versa, whenever the context so requires. When used in this Sublease, the word “including” shall mean “including, but not limited to” and all references to sections, exhibits and schedules are to sections, exhibits and schedules in or to this Sublease unless otherwise specified. Section 15.9 Captions. Captions in this Sublease are inserted for convenience of reference only and do not define, describe or limit the scope or the intent of this Sublease or any of the terms hereof. Section 15.10 Entire Agreement. This Sublease contains the entire agreement between the parties regarding the subject matter hereof. Any oral or written representations, agreements, understandings and/or statements shall be of no force and effect. Section 15.11 Waiver; Amendment. No modification, waiver, amendment, discharge or change of this Sublease shall be valid unless the same is in writing and signed by the party against which the enforcement of such modification, waiver, amendment, discharge or change is or may be sought. Section 15.12 Attorney’s Fees. The prevailing party in any litigation, bankruptcy proceedings, and all appeals shall be entitled to recover, in addition to all other items of recovery permitted by law, reasonable attorneys’ fees and costs incurred in such litigation, bankruptcy proceedings, and appeals, which award or recovery shall be mandatory and not in the discretion of the court. Section 15.13 Time. Time is of the essence of each obligation of each party hereunder. Section 15.14 Governing Law. This Sublease shall be construed and enforced in accordance with the laws of the State. Section 15.15 Binding Effect. Subject to any provision of this Sublease that may prohibit or curtail assignment of any rights hereunder, this Sublease shall bind and inure to the benefit of the respective heirs, assigns, personal representatives, and successors of the parties hereto. Section 15.16 Execution of Other Instruments. Each party agrees that it shall, upon the other’s request, take any and all steps, and execute, acknowledge and deliver to the other party and all further instruments necessary or expedient to effectuate the purpose of this Sublease. Section 15.17 Severability. If any term, provision, covenant or condition of this Sublease is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated. Section 15.18 Counterparts. This Sublease may be executed in one or more counterparts, each of which shall be deemed an original and when taken together will constitute one instrument. The parties agree that this Sublease will be deemed executed and delivered by a party if a party executes this Sublease and delivers a copy of the executed Lease to the other party Page 244 of 329 56 by email or other electronic transmittal and the parties intend that electronically imaged signatures such as .pdf files shall constitute original signatures and are binding on all parties. The parties hereby waive any defenses to the enforcement of the terms of this Sublease based on the form of the signature, and hereby agree that such electronically transmitted or signed signatures shall be conclusive proof, admissible in judicial proceedings, of the parties’ execution of this Sublease. Section 15.19 Estoppel Certificate. Either party shall execute, acknowledge and deliver to the other party, within twenty (20) days after requested by the other party, a statement in writing certifying, if such is the case, that this Sublease in unmodified and in full force and effect (or if there have been modifications that the same is in full force and effect as modified); the date of commencement of this Sublease; the dates for which the rent and other charges have been paid; any alleged defaults and claims against the other party and providing such other information as shall be reasonably requested. Section 15.20 Good Standing. Subtenant represents and warrants that it is in good standing as of the Effective Date of this Sublease, and covenants that it will remain in good standing under the applicable laws of the State where the Master Ground Leased Premises is located and in the State in which Subtenant is organized at all times during the Term and any Extended Term of this Sublease. Section 15.21 Representations and Warranties. Each of Sublandlord and Subtenant hereby makes the following representations, each as of the date hereof, to the other party: This Lease and all agreements, instruments and documents herein provided to be executed by the applicable party are duly authorized, executed and delivered by and are binding upon such party. The applicable party has the capacity and authority to enter into this Lease and consummate the transactions herein provided without the consent or joinder of any other party, except in each case as the same have been previously obtained. This Lease has been duly executed and delivered and constitutes the legal, valid and binding obligation of such party, enforceable against the applicable party in accordance with its terms, subject to (a) applicable bankruptcy, insolvency, reorganization, moratorium or similar other laws or enactments in effect now or in the future affecting the enforceability of creditors’ rights generally, and (b) the exercise of judicial discretion. No consent, approval, authorization or order of, or declaration, filing or registration with, any governmental authority or other person or entity is required in connection with the execution and delivery of this Lease and the consummation of the actions contemplated hereby by such party, except in each case as the same have been previously obtained. Section 15.22 Personal Liability. None of Sublandlord’s Representatives or Subtenant’s Representatives, whether disclosed or undisclosed, shall have any personal liability under or in connection with this Sublease. Subtenant agrees it shall look solely to Sublandlord’s interest in the Ground Subleased Premises and this Sublease for the satisfaction of its remedies or to collect any judgment requiring payment of any money by Sublandlord. Except as expressly provided in this Sublease, in no event shall (i) Sublandlord be liable to Subtenant for any consequential, speculative, punitive, incidental, indirect, treble, or special damages or claims for damages by reason of loss of profits or business or (ii) Subtenant be liable to Sublandlord for any consequential, speculative, punitive, incidental, indirect, treble, or special damages or claims for damages by reason of loss of profits or business. Page 245 of 329 57 Section 15.23 Memorandum of Lease. On or before the Effective Date, Sublandlord and Subtenant shall execute and acknowledge a Memorandum of this Sublease for purpose of recordation. Such Memorandum shall be in the form attached hereto as Exhibit “G” and incorporated herein by reference. Section 15.24 Waiver of Trial by Jury. SUBLANDLORD AND SUBTENANT MUTUALLY, EXPRESSLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY FOR ANY PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS SUBLEASE, OR ANY CONDUCT OR COURSE OF DEALING OF THE PARTIES, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PERSONS. THIS WAIVER IS A MATERIAL INDUCEMENT TO SUBLANDLORD TO ACCEPT DELIVERY OF THIS SUBLEASE AND TO SUBTENANT TO ENTER INTO THIS SUBLEASE. [Signatures on following pages] Page 246 of 329 IN WITNESS WHEREOF, this Sublease has been executed as of the Effective Date. SUBLANDLORD: UNIVERSITY OF COLORADO HEALTH, a Colorado nonprofit corporation By: Name: Its: [signature pages continue] Page 247 of 329 IN WITNESS WHEREOF, this Sublease has been executed as of the Effective Date. SUBTENANT: HIGHLANDS RANCH MP RK6, LLC, a Delaware limited liability company By: Name: Its: Page 248 of 329 Exhibit A – Master Ground Leased Premises EXHIBIT “A” MASTER GROUND LEASED PREMISES Lot 2A, Highlands Ranch Filing No. 156, 1st Amendment, County of Douglas, State of Colorado. Page 249 of 329 Exhibit B-1 – Depiction of Ground Subleased Premises EXHIBIT “B-1” DEPICTION OF GROUND SUBLEASED PREMISES Page 250 of 329 Exhibit B-2 – Legal Description of Ground Subleased Premises EXHIBIT “B-2” LEGAL DESCRIPTION OF GROUND SUBLEASED PREMISES Page 251 of 329 Exhibit B-3 – Ancillary Documents EXHIBIT “B-3” ANCILLARY DOCUMENTS 1. The COREA. Page 252 of 329 Exhibit C - Survey EXHIBIT “C” SURVEY [Document follows] Page 253 of 329 Exhibit D – Form of MOB Lease EXHIBIT “D” FORM OF MOB LEASE [Document follows] Page 254 of 329 Exhibit E – Permitted Encumbrances EXHIBIT “E” PERMITTED ENCUMBRANCES 1. Current real property taxes and assessments with respect to the Property, which are a lien for the taxable year in which the Property is conveyed, and which are not due on or before the Property is conveyed. 2. Any law, statute, code, ordinance, rule, regulation, restriction, requirement, writ, injunction, decree, order or demand of any governmental authority. 3. All matters that currently appear of record or that would be disclosed by a complete and accurate survey or inspection of the Property or any appurtenances therein or thereon. 4. The Master Ground Lease. 5. All Retained Rights in favor of Shea pursuant to the Master Ground Lease Assignment and that certain Declaration of Covenants, Conditions and Restrictions dated as of May 25, 2016 by and between Shea and Sublandlord. The term “Permitted Encumbrances” shall also include any liens, security interests or encumbrances from time to time created by, on behalf of, or pursuant to the acts or omissions of Sublandlord following the Effective Date. Page 255 of 329 Exhibit F – Intentionally Omitted EXHIBIT “F” INTENTIONALLY OMITTED Page 256 of 329 Exhibit G – Memorandum of Ground Sublease EXHIBIT “G” MEMORANDUM OF SUBLEASE1 [To be inserted] 1 NTD: To be prepared once form of Sublease is agreed. Page 257 of 329 Exhibit H – Form of Recognition Agreement EXHIBIT “H” FORM OF RECOGNITION AGREEMENT THIS INSTRUMENT PREPARED BY AND UPON RECORDATION RETURN TO: [______] THIS RECOGNITION AGREEMENT (the “Agreement”) is made as of this __ day of ___________, 20__, by and between [______] (“Sublandlord”), [______] (“Tenant”), and [______] (“Administrative Agent”) for certain financial institutions (collectively, the “Lender”). RECITALS: A. Pursuant to that certain Ground Sublease, dated as of [____________], by and between Sublandlord, as Sublandlord, and Subtenant, as Subtenant (the “Ground Sublease”), Sublandlord demised and let to Subtenant a certain parcel of real property located in [______] County, [______], and more particularly described on Exhibit A attached hereto, together with the other easements, licenses, rights-of-way, rights, improvements, privileges, hereditaments and appurtenances thereunto (referred to in the Ground Sublease) being referred to herein as the “Premises” and the “Ground Subleased Premises” in the Ground Sublease. B. In that certain Leasehold [Mortgage/Deed of Trust], Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as of [______________], 20__ (as the same may be amended or modified from time to time, together with any other leasehold mortgage, deed of trust or comparable document now or at any time hereafter entered into by Subtenant in favor of Administrative Agent for the benefit of Lender, the “Mortgage”), Subtenant has granted to Administrative Agent for the benefit of Lender a mortgage with respect all of its right, title and interest in and to the Premises, for the purpose of securing a loan (the “Loan”) made by Administrative Agent to Subtenant contemporaneously with the execution and delivery of the Mortgage. C. Administrative Agent and Lender require as a condition to the Loan, that the parties hereto enter into this Agreement. NOW, THEREFORE, in consideration of the premises, the mutual promises and covenants of the parties hereunder, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. The recitals are hereby incorporated by reference into this Agreement as if set forth herein. 2. Sublandlord recognizes and acknowledges (i) that the Mortgage constitutes a “Leasehold Mortgage” with respect to the Premises, within the meaning of Section 6.1 and the Page 258 of 329 Exhibit H – Form of Recognition Agreement other provisions of the Ground Sublease, (ii) that Lender is and shall be deemed to be the “Recognized Mortgagee” (as that term is effectively defined and used in the Ground Sublease) with respect to the Mortgage and the Premises, and (iii) that Administrative Agent does not constitute a “Competitor” or an “Unqualified Operator” (as those terms are effectively defined and used in the Ground Sublease). 3. In no event shall Lender, in its capacity as the Lender with respect to the Premises be deemed a sublessee, assignee or transferee of Subtenant’s right, title or interest in and to the Premises so as to require Administrative Agent or any Lender to assume the performance of any of the covenants or agreements on the part of Subtenant to be performed with respect thereto. 4. With respect to Administrative Agent, in its capacity on behalf of the Lenders under the Ground Sublease with respect to the Premises, the provisions of Sections 5 to 16, inclusive, hereof shall apply, notwithstanding anything in the Ground Sublease to the contrary. 5. Upon the occurrence and continuation of an event of default under the Loan Agreement, Administrative Agent shall have all cure rights set forth in this Agreement or as otherwise set forth in the Ground Sublease. 6. It shall not be necessary for Administrative Agent or Lender to obtain possession of the Premises to effect any such cure of a default by Subtenant under the Ground Sublease with respect to the Premises, and Sublandlord will not commence any proceeding or act to terminate the term of the Ground Sublease with respect to the Premises if (a) Administrative Agent shall, within the grace period applicable to it, inform Sublandlord that it has taken steps to foreclose the Mortgage or to take any other actions necessary for it to obtain possession of the Premises; (b) all rent under the Ground Sublease with respect to the Premises shall be paid and all other provisions and requirements of the Ground Sublease with respect to the Premises which are capable of being observed and performed without obtaining possession of the Premises are so observed and performed while any such foreclosure, other action or other remedy is being prosecuted by Administrative Agent, and for so long thereafter as Administrative Agent shall have obtained possession of the Premises; and (c) Administrative Agent shall be diligently prosecuting such foreclosure and attempting to effect a cure of such default. Nothing herein contained shall be deemed to require Administrative Agent to continue with any foreclosure or other proceedings, or, in the event Administrative Agent shall otherwise acquire possession of the Premises, to continue such possession, if the default in respect to which Sublandlord shall have given notice as aforesaid shall be remedied. 7. Sublandlord will, promptly after the delivery thereof to Subtenant, give Administrative Agent a written copy of each notice given to Subtenant under the Ground Sublease, at the address of Administrative Agent provided for on the signature page hereof. In the event Sublandlord sends Subtenant a notice of default under the Ground Sublease, then, from and after the time that a copy of such notice has been delivered to Administrative Agent, Administrative Agent for the benefit of Lender shall have a period equal to the period granted under the Ground Sublease to Administrative Agent to effect a cure of such default. Sublandlord will accept performance by Administrative Agent or its nominee of any and all of the obligations of Subtenant under the Ground Sublease, including (without limitation) the obligation of Subtenant (as the lessee thereunder) to pay rent; and the performance of any such obligation by Administrative Agent Page 259 of 329 Exhibit H – Form of Recognition Agreement or its nominee shall be deemed to have been a cure effected by Subtenant. Sublandlord hereby consents to the entry into the Premises by Administrative Agent or its nominee for the purpose of effecting the cure of any default under the Ground Sublease by Subtenant. In the event of a default by Subtenant under the Ground Sublease, Administrative Agent may affect the cure of such default by performing all of the obligations of Subtenant under the Ground Sublease. This Section will only be applicable to any permitted successor, nominee or permitted assignee of Administrative Agent or Lender if prior written notice of such assignment of Administrative Agent’s or Lender’s interest is provided to Subtenant. 8. Sublandlord agrees that, in the event of the termination of the Ground Sublease with respect to the Premises by reason of any default thereunder by Subtenant or any inaction or action by Subtenant including without limitation, and whether or not constituting a default under the Ground Sublease, rejection of the Ground Sublease by Subtenant or Subtenant’s bankruptcy estate, it will enter into a new lease with respect to the Premises with Administrative Agent for the benefit of Lender or its nominee (the “Transferee”) for the remainder of the term of the Ground Sublease, effective as of the date of such termination, at the rent and upon the terms, options, provisions, covenants and agreements then contained in the Ground Sublease applicable to the Premises; provided, that: (a) Administrative Agent or Transferee shall make written request upon Sublandlord for such new lease prior to or within thirty (30) days after the date of such termination of the Ground Sublease with respect to the Premises, and such written request is accompanied by payment to Sublandlord of all sums then due to it under the Ground Sublease with respect to the Premises, including the payment of all rent to the date of such new lease with respect to the Premises; (b) Administrative Agent or the Transferee shall pay to Sublandlord, at the time of the execution and delivery of such new lease, any and all sums that would then be due under the Ground Sublease with respect to the Premises but for such termination, together with any reasonable expenses, including reasonable attorneys’ fees, incurred by Sublandlord as a result of such termination, as well as in the preparation, execution and delivery of such new lease; (c) Administrative Agent or the Transferee shall cure all defaults under the Ground Sublease except for any defaults that Administrative Agent or Transferee are under no obligation to cure, including without limitation those listed in Section 10 below, and Transferee shall be a similarly creditworthy Subtenant as Subtenant, along with a similarly creditworthy replacement guarantor, if applicable; and (d) All provisions contained in either the Ground Sublease or this Agreement with respect to the Mortgage and the rights of Administrative Agent and Lender shall survive the termination of both the Ground Sublease with respect to the Premises and this Agreement for such period of time as shall be necessary to effectuate any and all rights effectively granted to Administrative Agent and Lender by the provisions of the Ground Sublease with respect to the Premises; provided, however, that this subsection shall not extend the cure period of any cure rights set forth in the Ground Sublease; and Page 260 of 329 Exhibit H – Form of Recognition Agreement (e) Administrative Agent or its nominee shall retain all cure rights enumerated in this Agreement or the Ground Sublease, provided, however, that nothing contained herein or in the Ground Sublease shall be construed to require Administrative Agent or the Transferee to cure any default by Subtenant under the Ground Sublease with respect to the Premises, provided further, however, for the avoidance of doubt, Administrative Agent or its Transferee shall be required to cure pursuant to clauses (a) through (c) above in order to avail themselves of the benefits of this Section. Sublandlord agrees that any option to purchase the Premises or any portion thereof or right of first refusal or right of first offer to purchase the Premises or any portion thereof, as may be provided in the Ground Sublease, shall not apply to any foreclosure of the Mortgage or acceptance of a deed in lieu. Lender agrees that any such option to purchase the Premises or any portion thereof or right of first refusal or right of first offer to purchase the Premises or any portion thereof will not be terminated by any foreclosure or conveyance of the Premises by Lender or any Transferee; rather, any such option to purchase the Premises or any portion thereof or right of first refusal or right of first offer to purchase the Premises or any portion thereof will remain as an obligation of any party acquiring the Premises by Lender or any Transferee following such foreclosure. Additionally, Sublandlord agrees that it will attorn to and recognize any Transferee and the successors and assigns of such Transferee, as its Subtenant for the unexpired balance (and any extensions or renewals, if exercised) of the term of the Ground Sublease upon the same terms and conditions set forth in the Ground Sublease. Such attornment shall be effective and self- operative without the execution of any further instrument. Sublandlord agrees, however, to execute and deliver at any time and from time to time, upon the request of any holder(s) of any of the indebtedness or other obligations secured by the Mortgage, or upon request of any such Transferee, any instrument or certificate reasonably requested by such party to evidence such attornment. Sublandlord, in the event of attornment, will have the same remedies against Lender for the breach of an agreement contained in the Ground Sublease that Sublandlord might have had against Subtenant if Lender had not succeeded to the interest of Subtenant. 9. Sublandlord agrees that (i) Sublandlord shall not have the right to remedy or cure any default of Subtenant under the Mortgage or any related loan documents and neither Lender nor Administrative Agent shall be obligated to accept any performance by Sublandlord of any obligation, covenant, condition or agreement to be performed or observed by Subtenant pursuant to the Mortgage or any related Loan documents; (ii) Sublandlord shall not have any right to consent or approve (a) the Mortgage or any related Loan documents or any amendments to any of the terms of the Mortgage or any related Loan documents, or (b) any future advances or other increases in the principal amount of the Loan which is secured by the Mortgage; provided, however, that no mortgagee may be a Competitor (as defined in the Ground Sublease); (iii) Subtenant shall not be required to deliver copies of the Mortgage or related Loan documents to Sublandlord; (iv) Sublandlord shall not have any right purchase the Mortgage or to assume Subtenant’s obligations with respect to the Loan or to prepay or pay to Administrative Agent or Lender on Subtenant’s behalf any principal or other amounts owed by Subtenant in connection with the Loan or to terminate the Ground Sublease as a result of any acceleration of the Loan (without there existing any other default under the Ground Sublease); (v) any provisions in the Ground Sublease limiting the principal amount of the Loan shall not be applicable with respect to the Loan or the Mortgage and Subtenant shall be free to obtain the Loan in any amount as determined by Subtenant in its sole and absolute discretion without any limitation under the Ground Sublease; and (vi) any Page 261 of 329 Exhibit H – Form of Recognition Agreement provisions of the Ground Sublease prohibiting or limiting Subtenant’s right to cross-collateralize the Premises with any other property shall not be applicable with respect to the Mortgage or the Loan. For the avoidance of doubt, except as explicitly provided herein, nothing in this Agreement shall limit Sublandlord from exercising its rights under the Ground Sublease and any space lease affecting the Premises that might cure the default of the Subtenant. 10. The following defaults under the Ground Sublease shall not, as between Sublandlord and the Transferee, constitute an event of default by the Subtenant, which must be cured but shall be automatically cured upon conveyance of such leasehold estate to Transferee: (i) the insolvency of the Subtenant or the commencement by or against the Subtenant of any proceedings under any Chapter of the United States Bankruptcy Code as amended from time to time; (ii) the attachment, execution or other judicial or statutory levy or seizure of the Premises or any portion thereof; (iii) the appointment of a receiver or other custodian or personal representative to take possession of all or any portion of the Subtenant’s assets; (iv) any composition of creditors of the Subtenant or any assignment by the Subtenant of all or any portion of the Subtenant’s assets for the benefit of creditors; (v) any other default which relates to the status of the Subtenant, and not to the status or condition of the Premises; (vi) any fraud or misrepresentation of the Subtenant; or (vii) any failure of the Subtenant to indemnify Sublandlord pursuant to an express provision of the Ground Sublease related to any of the foregoing defaults in subsections (i)-(vi) hereof if such act, omission, event or condition giving rise to such indemnification occurred prior to the date Transferee acquires the Ground Sublease. 11. In addition to any notices required under the Ground Sublease, Subtenant will give prompt written notice to Administrative Agent of every breach or default on the part of Sublandlord in respect of any obligation or covenant of Sublandlord under the Ground Sublease with respect to the Premises, if such breach or default may be of such a nature as to give Subtenant a right to terminate the Ground Sublease with respect to the Premises, to reduce rent, or to credit or offset any amounts against future rents, prior to the exercise of such right by Subtenant. However, the failure of Subtenant so to give any such notice to Administrative Agent shall not invalidate any action taken by Subtenant in furtherance of any such right under and pursuant to the Ground Sublease with respect to the Premises. 12. Intentionally omitted. 13. Sublandlord hereby represents and warrants that Sublandlord will not permit any further encumbrance of Subtenant’s leasehold estate under the Ground Sublease, absent written consent from Administrative Agent; and Sublandlord hereby subordinates whatever interest it may have in Subtenant’s leasehold estate (but not in Sublandlord’s reversionary interest in the Premises), if any, to the lien of the Mortgage. 14. Tenant hereby represents and warrants that it has not encumbered its interests in and to the Premises to any person other than Administrative Agent for the benefit of Lender. 15. Sublandlord acknowledges that the name of the Administrative Agent and Lender shall be added to the “Loss Payable Endorsement” of any and all insurance policies required to be carried by the Subtenant under the Ground Sublease and that any insurance proceeds payable Page 262 of 329 Exhibit H – Form of Recognition Agreement thereunder, including without limitation, all casualty proceeds, shall be paid to the Administrative Agent and Lender and applied in accordance with the Mortgage. 16. Sublandlord and Subtenant hereby reaffirm, acknowledge and agree that all condemnation proceeds to which the Subtenant, subject to the Ground Sublease, is entitled on account of Subtenant’s interest shall be subject to the rights of the Administrative Agent and Lender under the Mortgage. 17. This Agreement may not be altered, modified, or amended except by writing signed by all of the parties hereto. 18. This Agreement shall be binding upon and inure to the benefit of the parties hereto, their respective heirs, successors and assigns. 19. The validity, enforcement, and interpretation of this Agreement shall be governed by and construed in accordance with the laws of the State of [______] and applicable United States federal law, and is intended to be performed in accordance with, and only to the extent permitted by, such laws. If any provision of this Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provisions to other persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law. 20. All notices, requests, consents, demands and other communications required or which any party desires to give hereunder shall be in writing and, unless otherwise specifically provided, shall be deemed sufficiently given or furnished if delivered by personal delivery, by nationally recognized overnight courier, or by registered or certified United States mail, postage prepaid, addressed to the party to whom directed at the addresses specified near the signature blocks of this Agreement (unless changed by similar notice in writing given by the particular party whose address is to be changed). Any such notice or communication shall be deemed to have been given either at the time of personal delivery or, one day after deposit with an overnight courier, or three days after deposit in U.S. Mail. Notwithstanding the foregoing, no notice of change of address shall be effective except upon actual receipt. 21. This Agreement may be executed in multiple counterparts, each of which, for all purposes, shall be deemed an original, and all of which together shall constitute one and the same agreement. [SIGNATURES ON FOLLOWING PAGES] Page 263 of 329 Exhibit H – Form of Recognition Agreement IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed under seal by their respective duly authorized-representatives as of the date first above written. SUBLANDLORD: [______] By:__________________________________ Print Name: ___________________________ Its: __________________________________ Address: [______] With a copy to: [______] And to: Sheppard Mullin Attn: Timothy J. Reimers, Esq. 333 South Hope Street, 43rd Floor Los Angeles, California 90071-1422 Email: treimers@sheppardmullin.com [Acknowledgment follows on next page.] Page 264 of 329 Exhibit H – Form of Recognition Agreement ACKNOWLEDGMENT Page 265 of 329 Exhibit H – Form of Recognition Agreement [SIGNATURES CONTINUED FROM PRECEDING PAGES] SUBTENANT: [______] By:______________________________ Name: ___________________________ Title: ____________________________ Address: c/o Remedy Medical Properties, Inc. 800 W. Madison, Suite 400 Chicago, IL 60607 ACKNOWLEDGMENT [SIGNATURES CONTINUE ON FOLLOWING PAGES] Page 266 of 329 Exhibit H – Form of Recognition Agreement [SIGNATURES CONTINUED FROM PRECEDING PAGES] ADMINISTRATIVE AGENT: [______] By:__________________________________ Print Name: ___________________________ Its: Duly Authorized Signatory Address: [______] Attn: ___________________________ Reference: ______________________ Page 267 of 329 Exhibit H – Form of Recognition Agreement EXHIBIT A GROUND SUBLEASED PREMISES [To be inserted] Page 268 of 329 Exhibit I-1 – List of Design Development Drawings Exhibit “I-1” LIST OF DESIGN DEVELOPMENT DRAWINGS [List follows] Page 269 of 329 Exhibit I-2 – List of Project Construction Documents EXHIBIT “I-2” LIST OF PROJECT CONSTRUCTION DOCUMENTS [To be inserted upon completion] Page 270 of 329 Exhibit I-3 – CD Budget EXHIBIT “I-3” CD BUDGET [To be inserted upon completion] Page 271 of 329 Page 272 of 329 Page 273 of 329 Page 274 of 329 Page 275 of 329 Page 276 of 329 Page 277 of 329 Page 278 of 329 Page 279 of 329 Page 280 of 329 Page 281 of 329 Page 282 of 329 Page 283 of 329 Page 284 of 329 Page 285 of 329 Page 286 of 329 Page 287 of 329 Page 288 of 329 Page 289 of 329 Page 290 of 329 Page 291 of 329 Page 292 of 329 Page 293 of 329 Page 294 of 329 Page 295 of 329 Page 296 of 329 Page 297 of 329 Page 298 of 329 Page 299 of 329 Page 300 of 329 Page 301 of 329 Page 302 of 329 Page 303 of 329 Page 304 of 329 Page 305 of 329 Page 306 of 329 Page 307 of 329 Page 308 of 329 Page 309 of 329 Page 310 of 329 Page 311 of 329 Page 312 of 329 Page 313 of 329 Page 314 of 329 Page 315 of 329 Page 316 of 329 Page 317 of 329 Resolution of Support for EMRF to Enter into a Recognition Agreement Presented By EMRF President and Englewood Utilities and South Platte Renew Director, Pieter Van Ry Pa g e 3 1 8 o f 3 2 9 UC Health Ground Lease Background •EMRF leases UC Health 33.283 acres •Ground Lease Dated April 5, 2016 •1st amendment April 21, 2016 •2nd amendment April 15, 2016 •Agreement allows UC Health to sublease •Highlands Ranch MP RK6, LLC (Developer) to sublease 1 acre from UC Health for construction of a future medical office building Plaza Dr Lu c e n t B l v d Town Center Dr UC Health Highlands Ranch Hospital Pa g e 3 1 9 o f 3 2 9 Recognition Agreement •Recognition Agreement for Financing Purposes •No change to ground lease between EMRF and UC Health •EMRF to agree to recognize sublease if UC Health defaults on Ground Lease •Terms of Recognition Agreement •Only effective if UC Heath defaults on master lease •EMRF collects rent from Developer •Rent increases by 2.5% annually •Market adjustment to rent after initial 20-year term •Market adjustment to rent then every 10 years •Continuing 2.5% annual rent increase Recommendation: Approve the Resolution of Support for EMRF to enter into a Recognition Agreement with UC Health and Developer Pa g e 3 2 0 o f 3 2 9 Questions? Pa g e 3 2 1 o f 3 2 9 Thank you Pa g e 3 2 2 o f 3 2 9 COUNCIL COMMUNICATION TO: Mayor and Council FROM: Shannon Buccio DEPARTMENT: Parks, Recreation & Library DATE: March 18, 2024 SUBJECT: Training Center lease agreement at Broken Tee Golf Course DESCRIPTION: Training Center lease agreement with Broken Tee Partners, LLC, dba MetaGolf Learning Center, at Broken Tee Golf Course RECOMMENDATION: Staff recommends that Council, by motion, approve the lease agreement for the training center with Broken Tee Partners, LLC, dba MetaGolf Learning Center, at Broken Tee Golf Course. PREVIOUS COUNCIL ACTION: None SUMMARY: Broken Tee Golf Course leases out the training center space of the facility to an outside vendor to offer instructional options, i.e. individual or group lessons, to patrons. The current lease agreement with Broken Tee Partners, LLC ends on March 31, 2024. ANALYSIS: The current agreement, initiated in March 2019, has proven to be mutually beneficial, and Broken Tee Golf Course has appreciated the dedication and professionalism demonstrated by Broken Tee Partners, LLC. MetaGolf Learning Center is a full-service golf instruction and club fitting business focused on providing state-of-the-art golf instruction and personalized club fitting to its clients. Currently, the staff consists of six full-time and four part-time golf instructors, including two females. Each instructor has a minimum of 10 years of teaching and coaching experience. The lesson rates for instruction vary based on demand and expertise; however, MetaGolf offers many options for beginning and budget-oriented golfers. Discounted lessons for juniors, Englewood residents, and staff, as well as providing donations for Broken Tee special events, are offered in support of the community. During the 2018 Request for Bid process, only one submission from Broken Tee Partners, LLC, was received. Despite the current efforts to explore other potential options, no contact with alternative vendors expressing interest was received. Given the positive relationship that has been built over the past years, extending the partnership would be in the best interest of both parties. The proposed lease agreement would provide continuity in the management and operation of Broken Tee, ensure a seamless experience for Broken Tee patrons, and maintain the high standards already established. Page 323 of 329 COUNCIL ACTION REQUESTED: Staff recommends that Council, by motion, approve the lease agreement for the training center with Broken Tee Partners, LLC, dba MetaGolf Learning Center, at Broken Tee Golf Course. FINANCIAL IMPLICATIONS: Broken Tee Partners, LLC, dba MetaGolf Learning Center, will pay $22,000 annually to lease out the training center area at Broken Tee Golf Course. CONNECTION TO STRATEGIC PLAN: Community Wellbeing: Elevating community well-being lies at the heart of Broken Tee's commitment to enhancing the golfer's experience at one singular location. They can play, purchase merchandise, practice at the driving range, and enjoy food and beverages. Broken Tee guests may also choose to improve their golf game with professional instructors at one location. By consolidating these diverse offerings within a single location, Broken Tee streamlines the golfing experience and fosters a sense of belonging and connectivity within Englewood's vibrant community. Broken Tee strives to enrich patrons' lives, empowering them to thrive both on and off the course, all within the welcoming embrace of the Broken Tee golf facility. OUTREACH/COMMUNICATIONS: As MetaGolf Learning Center is located at the golf facility, they must and will be included in Broken Tee marketing campaigns on social media, email blasts, and websites. Broken Tee patrons need to know what is offered at our location. It's encouraged that their instructors share their offerings with staff so that they can be shared with our patrons. In return, MetaGolf welcomes sharing Broken Tee's special events and offerings with their clients, too. ATTACHMENTS: Training Center lease agreement Page 324 of 329 Page 1 of 5 BROKEN TEE GOLF INSTRUCTION CENTER LEASE AGREEMENT THIS LEASE AGREEMENT (the “Agreement''), entered into this _____ day of ________, 2024, (the “Effective Date”) by and between the City of Englewood, a Colorado Municipal Corporation on behalf of Broken Tee Golf Course (collectively referred to as "the City") and Broken Tee Partners, LLC (“Trainer”), collectively referred to as the “Parties”. The Parties hereby agree as follows: 1. PREMISES: City hereby grants Trainer exclusive use of the Learning Center Space in the Clubhouse at Broken Tee Golf Course, 2101 W. Oxford Ave., Sheridan Colorado, and the non- exclusive use of a portion of the driving range and practice area designated by the City (hereafter collectively “the Leased Premises”), for the term described below. Trainer shall use the Leased Premises for non-exclusive golf-related instruction, training, club fitting, club sales and club repair. Trainer’s use of the Leased Premises shall not interfere with the City’s use, maintenance or repair of the Leased Premises. 2. TERM: The initial term of this Agreement shall be one (1) year, starting the Effective Date above. This Agreement may be renewed for four (4) additional one-year terms by the Trainer providing written notice of the renewal request at least 90 days prior to the end of the then-current term to the Director of Parks, Recreation, Library, and Golf or their designee. The City shall have sole discretion whether or not to grant the request for a renewal term, and shall timely inform the Trainer of its decision regarding the request. Any renewal term shall be subject to all terms and conditions in this Agreement, except that City and Trainer shall mutually agree in writing upon the rent due for any renewal term prior to renewal. 3. RENT: Trainer shall pay the City $22,000.00 for the initial one-year term of this Agreement, by paying $2,750.00 per month, on or before the first day of each month, from April through November. Rent may be prepaid at any time, but Trainer shall pay a late fee of $10.00 per day for each day rent is past due. If, after 15 days, rent and all accrued late fees have not been paid, the City may terminate this Agreement without further notice. In such event, the City shall be entitled to recover all unpaid rent owed under the then-current term, as liquidated damages. 4. TRAINER SERVICES: The City shall review and approve all services before offered by Trainer. Upon request by City, Trainer will offer discounted services, lessons and clinics for City employees, City sponsors and partners, and City programs and special events. 5. HOURS OF OPERATION: Trainer will post all hours Trainer expects to operate at the Leased Premises, a minimum of five (5) days per week from April 1 through October 31, except for holidays or inclement weather. 6. INSURANCE: a. Performance Bond/Letter of Credit. Trainer shall furnish to the City a performance bond or letter of credit in the amount of Twenty Thousand Dollars ($20,000.00) Page 325 of 329 Page 2 of 5 guaranteeing faithful performance by Trainer of all payments of rent, and compliance with this Agreement, applicable law and regulations. Said bond or letter of credit shall be furnished within thirty (30) days of the Effective Date and shall remain in full force and effect until this Agreement is expired or terminated. b. Insurance. Trainer shall obtain and maintain during every term of this Agreement, at its sole cost and expense: i. Commercial General Liability Insurance with minimum limits of one million dollars ($1,000,000) per person and one million dollars ($1,000,000) per occurrence, plus an additional amount sufficient to pay related attorneys’ fees and defense costs. ii. Worker’s Compensation. To the extent required by law, Trainer shall procure and maintain worker’s compensation coverage for its employees. c. Fire and Extended Coverage. The City shall provide and maintain fire and extended coverage insurance on its real and personal property only, including the Clubhouse at Broken Tee Golf Course and contents/improvements belonging to the City. Trainer shall be solely responsible for securing and paying for insurance coverage to protect its own equipment, supplies, improvements and other property on or in the Leased Premises. Trainer hereby expressly waives any cause of action or right of recovery which Trainer may hereafter have against the City for any loss or damage to the Leased Premises or to any property, contents or improvements belonging to Trainer or its employees, incurred by any cause. d. Additional Insured. Any insurance policy required herein or secured by Trainer for its activities or property at the Leased Premises shall name the City as an additional insured, and such policies shall not be cancelled or changed without first giving the City thirty (30) days prior written notice. The policies shall be issued by an insurance company approved to do business in the State of Colorado and a copy of the policy or a Certificate of Insurance shall be delivered to the City. 7. ADDITIONAL CITY OBLIGATIONS: a. UTILITIES: The City will pay all utilities for the Leased Premises, including heating, cooling, water and electricity. b. PARKING: Trainer and its customers shall have non-exclusive use of the parking lot adjacent to the Golf Course Clubhouse. The City will repair and maintain the parking lot, including snow removal. 8. ADDITIONAL TRAINER OBLIGATIONS: a. SIGNS: Trainer shall have sole responsibility for any signage regarding Trainer’s services at the Leased Premises, which shall receive City approval prior to installation. b. SECURITY: Trainer shall ensure proper security to protect its own equipment, supplies, improvements and other property on or in the Leased Premises. Trainer shall comply with any reasonable City request regarding security. Page 326 of 329 Page 3 of 5 c. PERSONNEL: At its own expense, Trainer shall employ qualified and professional personnel required for its operations at the Leased Premises; all of Trainer’s personnel shall comply with City dress codes and other applicable policies. Trainer shall supervise all personnel and operations at the Leased Premises. d. PREMISES: Trainer shall be responsible for the cost and maintenance of all improvements to the Leased Premises, along with equipment, supplies, and other property, required for the Trainer’s use and operations. No improvements shall be made to the City’s real property without prior notice and approval by the City. Trainer shall keep the Leased Premises within its exclusive possession in a safe, neat, clean and professional manner. 9. INDEMNIFICATION AND RELEASE: The Trainer assumes the risk and shall fully indemnify, release, defend, and forever hold harmless the City, its officers, agents, employees, representatives, elected and appointed officials, and assigns from any and all liability, claims, demands, suits, damages, injuries, and causes of action of any kind or nature arising out of this Agreement, including by the Trainer, its officers, agents, employees, representatives, elected and appointed officials, and assigns, and by any third party. The City is not responsible for: wages, salaries, or benefits of any employee, representative, or agent of Trainer; any debts, liabilities, or any other obligation of Trainer’ or for loss, theft, damage or other casualty of any of Trainer’s equipment or property on or in the Leased Premises. 10. MAINTENANCE AND REPAIRS: a. The City may temporarily close the Training Center for routine maintenance, repair, construction, or cleaning. If the City is required to close the Training Center for any reason, the City will provide Trainer with reasonable notice and, if possible, mutually agree upon a closure schedule. b. Trainer shall be responsible for repair and/or replacement of all its equipment on the Leased Premises, and, when necessary, shall replace range mats used by Trainer for lessons. 11. TERMINATION: This Agreement may be terminated for convenience and without recourse by either Party upon ninety (90) days written notice to the other Party. Either Party may immediately and without notice terminate this Agreement for any violation of its terms. 12. OTHER PROVISIONS: a. RIGHT OF ENTRY: The City has the right to enter the Leased Premises at any reasonable time, upon providing advance reasonable notice. b. SURRENDER OBLIGATIONS: Upon termination or expiration of this Agreement, Trainer shall deliver the Leased Premises in as good condition as when received, except for ordinary wear and tear or loss or damage caused by fire or natural disaster. Trainer shall remove its supplies and personal property, except those items set forth as fixtures and subject to Page 327 of 329 Page 4 of 5 any valid lien or claim which the City may have for unpaid fees or rents. c. NOTICES: All notices, demands, and communications hereunder shall be personally served or sent by certified mail to: City of Englewood Attention: Director of Parks, Recreation, Library and Golf 1000 Englewood Parkway Englewood, CO 80110 Broken T Partners, LLC/Metagolf Learning Center Attention: Manager Jason Preeo 2101 W. Oxford Avenue Englewood, CO 80110 With a copy to: City of Englewood Attention: City Attorney’s Office 1000 Englewood Parkway Englewood, CO 80110 d. ENTIRE AGREEMENT: This Agreement constitutes the entire agreement between the Parties relative to the Leased Premises, and there are no oral agreements or representations between the Parties regarding the subject matter of this Agreement. This Agreement supersedes and cancels all prior agreements and understandings with respect to the Leased Premises. e. SEVERABILITY: If any part, term, or provision of this Agreement is by the courts held to be illegal or in conflict with any law of the State of Colorado, the validity of the remaining portions or provisions shall not be affected, and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the particular part, term, or provision held to be invalid. f. HEADINGS: The section headings in this Agreement are solely for convenience and shall not be considered in its interpretation. g. COLORADO GOVERNMENTAL IMMUNITY ACT: No provision of this Agreement waives or is intended to waive any provision of the Colorado Governmental Immunity Act, Colo. Rev. Stat. § 24-10-101 et seq. h. INCORPORATION OF ENGLEWOOD MUNICIPAL CODE § 4-1-3-4: This Agreement is subject to the provisions of Englewood Municipal Code (EMC) § 4-1-3-4, the applicable provisions of which are incorporated by reference as if fully set forth herein. IN WITNESS WHEREOF, the City and Broken Tee Partners, LLC. do hereby execute this Broken Tee Golf Instruction Center Lease Agreement. Page 328 of 329 Page 5 of 5 CITY OF ENGLEWOOD, COLORADO By: __________________________________Date:________________________________ (Department Director) By: __________________________________Date:_______________________________ (City Manager) By:______________________________________Date:_______________________________ (Mayor) ATTEST: ________Date:________________________________ (City Clerk) BROKEN TEE PARTNERS, LLC. By: __________________________________ (Signature) __________________________________ (Print Name) Title: __________________________________ Date: __________________________________ Page 329 of 329