Exhibit 10.25
BUSINESS LEASE
THIS LEASE (“Lease”),
dated as of the 2nd day of October, 2006, is by and between 5975
Terminal, LLC., a Colorado Limited Liability Company
(“Landlord”) and VCG CO Springs, Inc., a Colorado
corporation (“Tenant”).
1. DEFINITIONS
. Unless otherwise
indicated, capitalized terms used in this Lease shall have the
meanings set forth below:
(a) “Additional
Rent” shall mean all charges payable by Tenant under this
Lease other than Minimum Rent.
(b) “Building”
shall mean the building located on the Demised Premises.
(c) “Operating
Costs” shall mean all costs incurred to insure, maintain,
repair and replace all elements of the Premises. Operating Costs
include, but are not limited to, costs and expenses for the
following: maintenance, repair and replacement (as necessary) of
all structural and mechanical components of the Building including,
but not limited to, exterior and interior walls, the roof ,
foundation and all components of the parking lots, driveways and
sidewalks surrounding the Building and located on the Premises;
gardening and landscaping; utilities, water and storm sewer
charges; maintenance of signs; fire alarm monitoring service;
premiums for liability, property damage, fire and other types of
insurance on the Premises and worker’s compensation
insurance; all property taxes and assessments levied on or
attributable to the Premises; all real and personal property taxes
levied on or attributable to such property used in connection with
the maintenance and operation of the Premises; fees for required
licenses and permits; repairing, resurfacing, painting, lighting,
cleaning, refuse removal, security, if any, and similar items.
Operating Costs shall also include any parking charges, utilities
surcharges, or other costs levied, assessed or imposed on the
Premises by or at the direction of any governmental authority in
connection with the use or occupancy of the Premises or the parking
facilities included in the Premises, or pursuant to any covenants,
conditions or restrictions to which the Premises are
subject.
(d) “Effective
Date” shall mean the later of the date set forth in the
initial paragraph of this Lease or the date on which Tenant
acquires the assets comprising the business located in the Premises
from Consolidated Restaurants Limited., LLC., a Colorado limited
liability company .
(e) “Guarantors”
shall mean: 1. VCG Holding Corp. a Colorado corporation, the sole
owner of Tenant; and 2. Troy Lowrie, CEO of VCG Hold
Corp.
(f) “ Hazardous
Material” shall mean any hazardous, radioactive or toxic
substance, material or waste, including, but not limited to, those
substances, materials and wastes (whether or not mixed, commingled
or otherwise combined with other substances, materials or wastes)
listed in the United States Department Transportation Hazardous
Material Table (49 CFR 172.101) or by the Environmental Protection
Agency as hazardous substances (40 CFR Part 302) and amendments
thereto, or such substances, materials and wastes which are or
become regulated under any applicable local, state or federal law
including, without limitation, any material, waste or substance
which is (i) a petroleum product, crude oil or any fraction
thereof, (ii) asbestos, (iii) polychlorinated biphenyls,
(iv) designated as a “hazardous substance”
pursuant to Section 311 of the Clean Water Act, 33 U.S.C.
Section 1251, et seq. (33 U.S.C. Section 1321) or listed
pursuant to Section 307 of the Clean Water Act (33 U.S.C
Section 1317), (v) defined as
a “hazardous waste”
pursuant to Section 1004 of the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901, et seq. (42 U.S.C.
Section 6903) or (vi) defined as a “hazardous
substance” pursuant to Section 101 of the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C.
Section 9601, et seq. (42 U.S.C.
Section 9601).
(h) “Demised
Premises” or “Premises” shall mean the real
property located at 5975 Terminal Dr., Colorado Springs, El Paso
County, CO 80915, and all improvements located thereon.
(i) “ Lease Term”
shall mean a period of 10 years and 0 months beginning on the Rent
Commencement Date, plus any extended term granted by Landlord and
timely and properly elected by Tenant pursuant to subparagraph 3(b)
below.
(j) “Lease Year”
shall mean a period of twelve consecutive months during the Lease
Term which begins on the first day of the first calendar month
after the Rent Commencement Date or any anniversary
thereof.
(k) “Minimum
Rent” shall mean the base rental for the Demised Premises
set forth in subparagraph 4(a) below.
(l) “Permitted
Use” shall mean operation of a restaurant and adult
cabaret and no other uses.
(m) “Property”
shall mean that certain real property owned by Landlord upon which
the Premises are is located.
(n) “Real Property
Taxes” shall mean (i) any fee, license fee, license
tax, business license fee, commercial rental tax, levy, charge,
assessment, penalty or tax imposed by any taxing authority against
the land and buildings comprising the Premises, (ii) any tax
or charge for fire protection, streets, sidewalks, road
maintenance, refuse or other services provided to the Property by
any governmental agency, (iii) any tax imposed upon this
transaction or based upon a re-assessment of the Property due to a
transfer of all or part of Landlord’s interest in the
Property. In the event that it shall not be lawful for Tenant and
Landlord to apportion such future taxes, if any, then in that
event, the minimum rent payable to Landlord under this Lease shall
be revised to net Landlord the same rental after imposition of any
such future tax upon Landlord as would have been payable to
Landlord prior to the impositions of any such tax. “Real
Property Tax” does not, however, include Landlord’s
federal or state income, franchise, inheritance or estate
taxes.
(o) “Rent” shall
mean Minimum Rent and any Additional Rent.
(p) “Rent Commencement
Date” shall mean that date that Tenant’s obligation
to pay rent, which shall commence upon the date the Tenant acquires
the personal property located within the Premises from Consolidated
Restaurants Limited., LLC., a Colorado limited liability
company.
2. LEASE OF DEMISED
PREMISES. Landlord hereby
leases the Demised Premises to Tenant, and Tenant hereby leases the
Demised Premises from Landlord, subject to the terms, covenants and
conditions herein set forth, and Tenant covenants as a material
part of
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the consideration for this Lease to keep and
perform each and all of such terms, covenants and conditions by
Tenant to be kept and performed.
3. LEASE TERM/OPTION TO
RENEW.
(a) The Lease Term shall begin at
twelve o’clock noon on the Rent Commencement Date and shall
end at twelve o’clock noon on the last day of the Tenth Lease
Year. Promptly after the Rent Commencement Date, Landlord and
Tenant shall execute a Certificate of Commencement setting forth
the Rent Commencement Date and the expiration date of the Lease
Term.
(b) Upon the condition that Tenant
(a) is not in default at the time of the exercise of any
option contained in this subparagraph, and (b) has, during the
Lease Term and Option Periods, fulfilled all of Tenant’s
obligations completely and in a timely manner, Landlord hereby
grants to Tenant two (2) separate Options to Renew the Lease
Term for two (2) separate additional five (5) year
periods upon the same and terms and conditions as set forth in this
Lease (each an “Option”), except that the Rent payable
during each Option Period will be as described in Section 4
below. The Option to Renew as provided in this paragraph, will be
deemed to have been exercised by Tenant and this Lease shall
automatically renew, unless, within 180 days prior to the
expiration of the Lease Term, Tenant provides Landlord written
notice of Tenant’s intention not to exercise the Option to
Renew, in which event the Lease will expire either at the end of
the Lease Term or at the end of any applicable properly executed
Extended Term. The terms and conditions of this Option to Renew are
personal to the Tenant.
4. RENT.
(a) Minimum Rent. During the term
hereof, Tenant agrees to pay the Landlord at the address as shown
herein, or at such other place as the Landlord may from time to
time designate in writing, “Minimum Rent” for the
Demised Premises. Said rent shall be payable in advance on the
first of each month, without deduction or set-off, without notice
or demand, as follows:
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Per Annum
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Monthly
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1-5
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$120,000
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$10,000
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6-10
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$126,000
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$10,500
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11-15 (Option Period One)
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$144,000
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$12,000
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16-20 (Option Period 2)
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$162,000
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$13,500
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In the event the Rent Commencement
Date is other than the first day of a month, Tenant will pay Rent
for said partial month on a pro-rata basis; provided, however, the
end of the Term shall be on the last day of the one hundred
twentieth (120 th ) month of the Term of this
Lease.
(b) Additional Rent. During the term
hereof, Tenant agrees to pay the Landlord at the address as shown
herein, or at such other place as the Landlord may from time to
time designate in writing, “Additional Rent,” in an
amount equal to the amount by which eight (8%) percent of
“Gross Sales,” as defined hereinafter, exceeds the
Minimum Rent described above. The Additional Rent for each month of
the term hereof shall be paid on the first day of the second
following month, for example, the Additional Rent for January shall
be paid on March 1.
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Tenant shall keep or cause to be
kept, full, complete, and proper books, records and accounts of the
Gross Sales and credits of each separate department and concession
at any time operated in the demised premises; said books, records
and accounts, including any sales tax reports that Tenant may be
required to furnish to any governmental agency, shall at all
reasonable times be open to the inspection of Landlord,
Landlord’s auditor or other authorized representative or
agent.
At Landlord’s expense,
Landlord may cause at any reasonable time upon fifteen
(15) days prior notice to Tenant a complete audit to be made
of Tenant’s records relating to Gross Sales for the period
covered by any statement issued by Tenant pursuant to this Lease;
provided, however, that if such records are found to be incorrect
to the extent of three-percent (3%) or more over the Gross
Sales figure submitted by Tenant, Tenant shall pay for such audit.
Tenant shall promptly pay to Landlord any deficiency, or Landlord
shall promptly credit to Tenant’s account any overpayment, as
the case may be, which is established by such audit. Landlord shall
have the right to audit Tenant’s books and records with
respect to Gross Sales twice during any Lease Year.
Within thirty (30) days after
the close of each Lease Year, a final adjustment and accounting for
each Lease Year shall be had to determine the Gross Sales of the
preceding Lease Year, and the amount of rent paid by Tenant during
such preceding Lease Year, including the rent based upon the
percentage of Gross Sales. In the event the amounts of rent for
said Lease Year actually paid by Tenant exceed eight percent
(8%) of Gross Sales as so computed on a twelve month basis,
then such excess rental payments shall be promptly credited by
Landlord to Tenant’s account; provided, however, that Tenant
shall never pay for any Lease Year less than the Minimum Rent
provided for above. In the event the amount of rent paid by Tenant
is less than eight percent (8%) of Gross Sales, Tenant shall
pay the difference to Landlord. All debits and credits arising
under the terms of this paragraph shall be paid in any event within
thirty (30) days of the completion of the final adjustment and
accounting.
Tenant shall continuously during the
entire term of this Lease, operate said business on said Premises
with due diligence and efficiency as to reasonably produce the
maximum return to Landlord.
5. SECURITY
DEPOSIT.
Tenant will not be required to make
a security deposit with the lease.
6. OPERATING
COSTS.
(a) This Lease is totally net to the
Landlord. Tenant shall maintain the Premises in first-class
condition at Tenant’s sole cost and expense. Landlord may
inspect the Premises and, if Landlord reasonably determines that
Tenant is not maintaining the Premises in a first-class condition,
Landlord may provide Tenant with written notice of any such
maintenance concern, and Tenant shall promptly make such repairs.
If Tenant fails to complete such repairs within thirty
(30)
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days of receipt of such notice,
Landlord may undertake such repairs and Tenant shall be obligated
to reimburse Landlord for its costs within ten (10) days of
receipt of an invoice therefore.
(b) Tenant shall pay all Operating
Costs during the Lease Term and shall not permit the placement of
any lien upon the Premises by any material/men, laborer or other
provider of goods and services to the Premises.
7. TAXES.
(a) Tenant shall pay all Real
Property Taxes on the land, buildings and other improvements
constituting the Property and the Premises (including any fees,
taxes or assessments against, or as a result of, any tenant
improvements installed in the Demised Premises by or for the
benefit of Tenant) attributable to the Lease Term. Tenant shall pay
such taxes ten (10) days prior to their due date and shall
promptly provide Landlord with evidence of such payment. If Tenant
has committed an event of default under this Lease, and at
Landlord’s option, Tenant shall pay Landlord a sum equal to
one-twelfth (1/12) of the annual Real Property Taxes payable
by Tenant under this Lease, together with each payment of Minimum
Rent. Landlord shall hold such payments in a non-interest bearing
impound account. If unknown, Landlord shall reasonably estimate the
amount of Real Property Taxes when installments are due. Tenant
shall pay any deficiency of funds in the impound account to
Landlord upon written request. If Tenant defaults under this Lease,
Landlord may apply any funds in the impound account to any
obligation then due under this Lease.
(b) Tenant shall pay before
delinquency all taxes charged against trade fixtures, furnishings,
equipment or any other personal property belonging to Tenant which
become payable during the Lease Term. In the event any or all of
Tenant’s leasehold improvements, equipment, furniture,
fixtures and other personal property shall be assessed and taxed
with the Property, Tenant shall pay to Landlord its equitable share
of such taxes within ten (10) days after delivery to Tenant by
Landlord of a statement in writing setting forth the amount of such
taxes determined by Landlord to be applicable to Tenant’s
property.
8. USE OF DEMISED
PREMISES/MAINTENANCE OF LIQUOR LICENSES.
(a) Tenant shall use the Demised
Premises for the Permitted Use only, and not for any other purpose,
without the prior written consent of Landlord, which may be
withheld in Landlord’s sole and absolute
discretion.
(b) Tenant shall not do or permit
anything to be done in or about the Demised Premises nor bring or
keep anything therein which is not within the Permitted Use of the
Demised Premises or which will in any way increase the existing
rate of or affect any fire or other insurance upon the Building or
any of its contents, or cause a cancellation of any insurance
policy covering the Building or any of its contents. Tenant shall
not use or allow the Demised Premises to be used for any improper,
immoral, unlawful or objectionable purpose; nor shall Tenant cause,
maintain or permit any nuisance in, on or about the Demised
Premises inconsistent with the use of the Premises for its
Permitted Use. Tenant shall not commit any waste or permit any
nuisance upon the Demised Premises or overload the floors
thereof.
(c) Tenant shall not cause or permit
any Hazardous Material (as herein after defined) to be brought
upon, transported through, stored, kept, used, discharged or
disposed in or about the Property by Tenant, its agents, employees
or contractors. Any such Hazardous
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Material brought upon, transported,
used, kept or stored in or about the Property which is necessary
for Tenant to operate its business for the Permitted Use will be
brought upon transported, used, kept and sorted in only such
quantities as are necessary for the usual and customary operation
of Tenant’s business and in a manner that complies with
(i) all laws, rules, regulations, ordinances, codes or any
other governmental restrictions or requirements of all federal,
state and local government authorities having jurisdiction thereof
regulating such Hazardous Material, (ii) any permits issued
for any such Hazardous Material (copies of which must be delivered
to Landlord before any Hazardous Material is brought in, on or
about the Property), and (iii) all products and
manufacturers’ instructions and recommendations, to the
extent they are stricter than laws, rules, regulations, ordinances,
codes or permits. If Tenant, its agents, employees or contractors,
in any way breach the obligations stated in this paragraph, or if
the presence of Hazardous Materials on the Property caused or
permitted by Tenant results in release or threatened release of
such Hazardous Material, on from or under the Property, or if the
presence on, from or under the Property of Hazardous Materials
otherwise arises out of the operation of Tenant’s business,
then without limitation of any other rights or remedies available
to Landlord hereunder or at law or in equity, Tenant shall
indemnify, defend, protect and hold harmless Landlord (and
Landlord’s directors, shareholders, officers, employees,
partners, agents, mortgagees or successors to Landlord’s
interest in the Demised Premises) (collectively, herein
“Indemnity”) from any and all claims, sums paid in
settlement of claims, judgments, damages, clean-up costs,
penalties, fines, liabilities, losses or expenses (including
without limitation attorney, consultant and expert fees and any
fees incurred by Landlord to enforce the Indemnity) which arise
during or after the Term as a result of Tenant’s breach of
such obligations or such release or such contamination of the
Property, including, without limitation, diminution in value of the
Property, damages for the loss of, or the restriction on the use
of, rentable or usable space or any amenity of the Property,
damages arising from any adverse impact on the sale or lease of the
Property, and damage and diminution in value to the Property or
other properties, whether owned by Landlord or by third parties.
The Indemnity includes, without limitation, costs incurred in
connection with any investigation of site conditions or any
clean-up, remedial, removal or restoration work required by any
federal, state, or local governmental agency or political
subdivision because of Hazardous Material present in the soil or
groundwater on, under or originating from the Property. Without
limiting the foregoing, if the presence of any Hazardous Material
on the Property caused or permitted by Tenant results in any
contamination, release or threatened release of Hazardous Material
on, from or under the Property or other properties, Tenant shall
promptly take all actions at its sole cost and expense which are
necessary to return the Property and any other affected property to
the condition existing prior to the introduction of such Hazardous
Material; provided that Landlord’s approval of such actions
shall first be obtained (which approval shall not be unreasonably
withheld) and so long as such actions do not have or would not
potentially have any material adverse effect on Landlord, on the
Property or on other property. The Indemnity contained in this
section shall survive the expiration or earlier termination of this
Lease and shall survive any transfer of Landlord’s interest
in the Property.
(d) In conjunction with the
operation of the Premises for its Permitted Use, Tenant has
obtained and shall maintain a hotel and restaurant class liquor
license and adult cabaret liquor license from the State of Colorado
and the City and County of Denver (“Liquor Licenses”).
At all times during the terms of this Lease, Tenant shall maintain
the Liquor Licenses in full force and effect. Tenant shall be
solely responsible for and Tenant shall pay any and all fees,
assessments, charges, levies or other monetary obligations imposed
in connection with the Liquor Licenses to assure that it is
maintained in good standing throughout the term of
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this Lease. In the event Tenant
receives any notice of violation, citation, written or oral
warning, or any complaint, objection, or challenge to the Liquor
Licenses, Tenant shall notify Landlord in writing of such
information within three (3) days of receipt of such written
or oral notice and, if such notice was written, Tenant shall
include in said notice a copy of any notice, citation,
correspondence or other written information provided to Tenant.
Tenant shall utilize its best efforts to maintain the Liquor
Licenses in good standing and in full compliance with the rules,
regulations, ordinances and statutes of the City and County of
Denver and the State of Colorado and shall take no action, which
may place the Liquor Licenses in jeopardy in any way. Tenant agrees
that it shall utilize the benefits of the Liquor Licenses only in
connection with the operation of the Demised Premises for a
restaurant and adult cabaret and shall file no application to
(i) amend the status of the Liquor Licenses, (ii) amend
the composition of the Tenant, (iii) transfer the Liquor
Licenses or (iv) amend the location of the Premises served by
the Liquor Licenses without the advance written approval of the
Landlord which may be withheld in the Landlord’s sole
discretion.
(e) The Demised Premises will be
operated under the name “Diamond Cabaret”. Landlord
hereby consents to Tenant’s use of such name and agrees that
the name “Diamond Cabaret” shall be utilized at the
Demised Premises only and shall not be utilized at any other
location owned or operated by Tenant, its affiliates, subsidiaries,
shareholders, directors or officers, except with the express
written permission of Landlord, which may be withheld in
Landlord’s sole discretion. In the event of a default whereby
Tenant’s rights in this Lease are terminated, Tenant shall
forever relinquish any and all rights it may have to the name
“Diamond Cabaret” and Landlord shall be fully entitled
to use such name at its sole discretion.
9. COMPLIANCE WITH
LAW. Tenant shall not use
the Demised Premises or permit anything to be done in or about the
Demised Premises which will in any way conflict with any law,
statute, ordinance or governmental rule or regulation now in force
or which may hereafter be enacted or promulgated including, without
limitation, the Americans With Disabilities Act. Tenant shall, at
its sole cost and expense, promptly comply with all laws, statutes,
ordinances and governmental rules, regulations or requirements now
in force or which may hereafter be in force and with the
requirements of any board of fire underwriters or other similar
bodies now or hereafter constituted relating to or affecting the
condition, use or occupancy of the Demised Premises, excluding
structural changes not related to or affected by Tenant’s
improvements or acts. The judgment of any court of competent
jurisdiction or the admission of Tenant in any action against
Tenant, whether Landlord be a party thereto or not, that Tenant has
violated any law, statute, ordinance or governmental rule,
regulation or requirement, shall be conclusive of that fact as
between Landlord and Tenant.
10. ALTERATIONS AND
ADDITIONS. Tenant shall
not make or allow to be made any alterations, additions or
improvements to or of the Demised Premises or any part thereof
without first obtaining the written consent of Landlord and any
alterations, additions or improvements to or of the Demised
Premises, including, but not limited to, wall covering, paneling
and built in cabinet work, but excepting movable furniture and
trade fixtures, shall at once become a part of the realty and
belong to Landlord and shall be surrendered with the Demised
Premises. In the event Landlord consents to the making of any
alterations, additions or improvements to the Demised Premises by
Tenant, the same shall be made by Tenant at Tenant’s sole
cost and expense and shall be completed in a good and workmanlike
manner, free of any liens. Upon the expiration or sooner
termination of the Term, Tenant shall, upon written demand by
Landlord, at Tenant’s sole cost and expense, forthwith and
with all due diligence,
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remove any alterations, additions or
improvements made by Tenant which are designated by Landlord to be
removed, and Tenant shall, forthwith and with all due diligence, at
its sole cost and expense, repair any damage to the Demised
Premises caused by such removal.
11. MAINTENANCE AND
REPAIR.
(a) By its entry into the Demised
Premises, Tenant shall be deemed to have accepted the Demised
Premises as being in good order, condition and repair. Tenant
shall, at Tenant’s sole cost and expense, keep the Demised
Premises and every part thereof in good condition and repair,
including without limitation, the maintenance, replacement and
repair of any storefront, doors, window casements, glazing,
plumbing, pipes, electrical wiring and conduits, and the heating
and air conditioning (“HVAC”) system. Tenant shall
obtain a service contract for repairs and maintenance of the HVAC
system and shall provide to Landlord a copy of the service contract
along with written details of any and all scheduled and other
repairs and maintenance performed on the HVAC system within ten
(10) days of the date of such performance. Tenant shall, upon
the expiration or sooner termination of this Lease, surrender the
Demised Premises to Landlord in good condition, broom clean,
ordinary wear and tear excepted. Any damage caused by
Tenant’s use of the Demised Premises shall be repaired at the
sole cost and expense of Tenant.
(b) Tenant shall repair and maintain
the structural portions of the Building, including the exterior
walls and roof. Landlord shall not be liable for Tenant’s
failure to make such repairs or to perform any maintenance. There
shall be no abatement of Rent and no liability of Landlord by
reason of any injury to or interference with Tenant’s
business arising from the making of any repairs, alterations or
improvements in or to any portion of the Building or the Demised
Premises or in or to fixtures, appurtenances and equipment therein.
Tenant waives any right to make repairs at Landlord’s expense
under any law, statute or ordinance now or hereafter in
effect.
(c) If Tenant refuses or neglects to
repair or maintain the Premises, as required herein, to the
reasonable satisfaction of Landlord, Landlord shall provide Tenant
with written notice of any such refusal or neglect and Tenant shall
repair any item mentioned in said notice within thirty
(30) days thereafter. If Tenant has not made such repairs
within the 30-day period, Landlord may make such repairs without
liability to the Tenant for any loss or damage it may accrue to
Tenant’s merchandise, fixtures or other property or to
Tenant’s business by reason thereof and, upon completion
thereof, Tenant shall pay Landlord’s costs for making such
repairs upon presentation of a bill thereof. In the event Tenant
does not pay such bill within ten (10) days of its receipt,
such failure shall be an event of default hereunder, Landlord shall
be entitled to utilize all of its remedies herein and such amount
shall bear interest at the rate of eighteen percent (18%) per
annum.
(d) Landlord agrees to perform once
during the term hereof any major repair or restoration to the
parking lot on the Premises, provided such repair or restoration is
not caused by Tenant’s failure to perform routine maintenance
on said parking lot, which routine maintenance shall include
periodic re-sealing as required but not less frequently than every
two years, and the prompt repair of cracks, potholes, or other
similar minor defects. Landlord’s obligation pursuant to this
paragraph shall not extend to striping or re-striping said parking
lot.
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12. LIENS.
Tenant shall keep the Property free
from any liens arising out of any work performed, materials
furnished or obligations incurred by or on behalf of Tenant.
Landlord may require, at Landlord’s sole option, that Tenant
provide to Landlord, at Tenant’s sole cost and expense, a
lien and completion bond in an amount equal to one and one-half
(1 1
/ 2 ) times the estimated cost of
any improvements, additions or alterations in the Demised Premises
which Tenant desires to make, to insure Landlord against any
liability for mechanics and materialmen’s liens and to insure
completion of the work. Landlord shall have the right to post
notices on the Demised Premises, that the Demised Premises are not
subject to liens of those providing labor and/or materials to the
Demised Premises at the request of the Tenant pursuant to Colorado
Statutes. Tenant shall provide Landlord with ten (10) days
prior written notice prior to commencing any improvements at the
Property, to allow Landlord adequate time to post said
notices.
13. ASSIGNMENT AND
SUBLETTING.
(a) Tenant shall not (voluntarily,
by operation of law or otherwise) assign, transfer, mortgage,
pledge, hypothecate or encumber this Lease or any interest therein,
and shall not sublet the Demised Premises or any part thereof, or
any right or privilege appurtenant thereto, or allow any other
person (the employees, agents, servants and invitees of Tenant
excepted) to occupy or use the Demised Premises, or any portion
thereof, without first obtaining the written consent of Landlord,
which consent may be withheld in the discretion of Landlord. The
transfer of more than five percent (5%) of the membership
interest of Tenant or thirty percent (30%) of the capital
stock of Guarantor, however accomplished, and whether in a single
transaction or in a series of related or unrelated transactions,
will be deemed an assignment of this Lease or such sublease
requiring the Landlord’s consent in each instance. Any
assignment or subletting without such consent shall be void, and
shall, at the option of Landlord, constitute a default under the
terms of this Lease. Acceptance of Rent by Landlord from anyone
other than Tenant shall not be construed as a consent or waiver by
Landlord, nor as a release of Tenant, but the same shall be taken
to be a payment on account of Tenant. A consent to one assignment,
subletting, occupation or use by any other person shall not be
deemed to be a consent to any subsequent assignment, subletting,
occupation or use by another person.
(b) Tenant shall provide Landlord
with a copy of any proposed sublease or assignment that contains
the name and address of the proposed subtenant or assignee, a copy
of any purchase and sale agreement for the assets of Tenant, the
anticipated effective date of the proposed sublease or assignment,
the duration of the term of any proposed sublease, and the amount
of space any proposed subtenant will occupy. In addition, Tenant
shall provide detailed information regarding the proposed
subtenant’s or assignee’s financial condition and
credit history, relevant business history and experience, together
with any other pertinent information which Landlord reasonably
requires. Landlord may require an opportunity to meet and interview
the proposed subtenant or assignee as well. For purposes of
Landlord’s consent to a proposed sublease or assignment, it
shall be considered reasonable for Landlord to consider
(i) the relative financial strength, business reputation and
operational/management experience of Tenant and the proposed
subtenant or assignee, (ii) any history that the proposed
subtenant or anyone has with the liquor licensing agencies of the
City and County of Denver and the State of Colorado, and
(iii) whether the use of the Demised Premises after such
sublease or assignment would create any nuisance or violate any
federal, state or local laws or any lease or agreement affecting
the Shopping Center or involve Hazardous Materials.
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Landlord’s Initials
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Tenant’s Initials
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Notwithstanding anything else in
this article contained, as a condition to Landlord’s written
approval of any assignment or sublease by Tenant, Landlord may
require that it shall be entitled to the receipt of fifty percent
(50%) of any profit derived by Tenant as a result of such
assignment or sublease. Such profit is defined as any amounts
received by Tenant from its assignee or subtenant in excess of the
Rent required to be paid by Tenant hereunder. Tenant shall deliver
all documents pertaining to any such assignment or subletting to
Landlord upon Landlord’s demand. Such profit shall not
include any lump-sum payment made to Tenant from its assignee or
subtenant in consideration of the transfer of Tenant’s
business, trade name, inventory, or goodwill: but any amount
attributed to lease assignment or sale on any document concerning
the transaction (including the assignee’s tax return) by
assignee shall be conclusively established as not
attributable to Tenant’s business, trade name, inventory or
goodwill, and therefore, shall be included in Tenant’s
profits as described herein. In no event shall the payment received
by Landlord pursuant to this subparagraph (b) be less than
$100,000.00.
(c) I