FIRST AMENDMENT TO LEASE
Exhibit
10.1
FIRST
AMENDMENT TO LEASE
THIS
FIRST AMENDMENT TO LEASE ("First Amendment") is made and entered into as of
this
6th day of March, 2007, by and between DENVER PLACE ASSOCIATES LIMITED
PARTNERSHIP, a Delaware limited partnership (hereinafter called "Landlord")
and
RANCHER ENERGY CORP., a Nevada corporation (hereinafter called
"Tenant").
RECITALS
A. Landlord
and Tenant entered into that certain Denver Place Office Lease dated as of
October 30, 2006 (the "Lease"), pursuant to which the Tenant leased
approximately 5,869 square feet of rentable area on the seventeenth (17th)
floor, known as Suite 1740 (the "Initial Leased Premises"), of the office
building known as Denver Place South Tower, located at 000 - 00xx Xxxxxx,
Xxxxxx, Xxxxxxxx (the "Building").
B. Landlord
and Tenant desire to (i) substitute the Initial Leased Premises for
approximately 12,382 square feet of rentable area located on the thirty-fourth
(34th) floor of the Building known as Suite 3400, and (ii) extend the Term
of
the Lease to July 31, 2012.
C. Landlord
and Tenant now desire to amend the Lease in the manner and form set forth
herein.
AGREEMENT
NOW,
THEREFORE, in consideration of the mutual promises set forth below, Landlord
and
Tenant hereby amend the Lease effective as of the date hereof.
1. Term.
The
term of the Lease is hereby extended to expire on July 31, 2012, and the "Lease
Term" section of the Office Lease Facing Page is hereby amended in its entirety
to reflect such extension, as follows:
LEASE
TERM:
|
Commencement
Date:
|
November
10, 2006
|
|
Lease
Period:
|
Five
(5) years, eight (8) months and twenty-one (21) days
|
|
Lease
Expiration:
|
July
31, 2012
|
2. Base
Rent.
The
"Base Rent" section of the Office Lease Facing Page is hereby amended in its
entirety to reflect the following rent adjustments:
BASE
RENT:
|
11/10/06
- 02/09/07:
|
$0.00
per annum / $0.00 monthly
|
|
02/10/07
- 07/31/07*:
|
$114,445.56
per annum / $9,537.13 monthly
|
|
08/01/07*
- 07/31/09:
|
$359,078.04
per annum / $29,923.17 monthly
|
|
08/01/09
- 07/31/10:
|
$371,460.00
per annum / $30,955.00 monthly
|
|
08/11/10
- 07/31/12:
|
$383,841.96
per annum / $31,986.83 monthly
|
*
subject
to adjustment pursuant to the provisions of subparagraph 4(b) below
Base
Operating Costs including Real Estate Taxes shall be the total amount of
Operating Expenses (on a per rentable square foot basis) incurred by Landlord
during the Calendar Year 2007 (Landlord's Operating Expense
Contribution).
Proportionate
Share of applicable taxes and Building Operating Expenses:
|
During
such period of the Term of the Lease that the Leased Premises consists
of
the Initial Leased Premises
|
|
|
(11/10/06
- 07/31/07):
|
5,869 = .78%
|
|
754,288
|
|
|
During
such period of the Term of the Lease that the Leased Premises consists
of
the Substitute Leased Premises
|
|
|
(08/01/07
- 07/31/12):
|
12,382 = 1.64%
|
|
754,288
|
|
3. Substitution
of Leased Premises.
The
Leased Premises under the Lease shall be amended to consist of approximately
12,382 square feet of rentable area known as Suite 3400 located on the
thirty-fourth (34th) floor of the Building and which is diagramed on
Exhibit
A-1
attached
hereto and made a part hereof (sometimes herein referred to as the "Substitute
Leased Premises") instead and in place of the Initial Leased Premises. The
Substitute Leased Premises shall be substituted as the Leased Premises under
the
Lease as of the date (the "Substitute Leased Premises Commencement Date") which
is the later of (i) August 1, 2007 ("Scheduled Substitute Leased Premises
Commencement Date"), and (ii) the date Landlord notifies Tenant that the
Substitute Leased Premises are ready for occupancy, and the Substitute Leased
Premises shall, after such date, be deemed to be the Leased Premises for all
purposes of the Lease as amended herein and all references in the Lease to
the
Leased Premises shall be deemed to refer to the Substitute Leased Premises
and
the Initial Leased Premises shall no longer constitute the Leased Premises.
Tenant agrees to completely vacate the Initial Leased Premises in accordance
with the provisions of Section 11.03 of the Lease on or before that date (the
"Vacation Date") which is the tenth (10th) business day to occur after the
date
Landlord notifies Tenant that the Substitute Leased Premises are ready for
occupancy. In the event Tenant fails to vacate the Initial Leased Premises
on or
before the Vacation Date, (i) Tenant shall be deemed a tenant at sufferance,
(ii) Tenant shall pay to Landlord the amount of $800.00 per day for each day
Tenant fails to vacate the Initial Leased Premises after such date, and (iii)
Landlord shall be permitted to exercise any and all legal and equitable remedies
including but not limited to the eviction of Tenant and a claim for any damages
(including consequential damages) incurred by Landlord as result of Tenant's
failure to vacate the Initial Leased Premises on or before the Vacation
Date.
4. Substitute
Leased Premises Improvements.
(a)
Landlord
shall, at its own cost and expense, in a good and workmanlike manner, cause
the
Substitute Leased Premises to be improved and completed in accordance with
the
plans and specifications (the “Final SLP Layout Plans”) prepared by Xxxxx Xxxxx
Associates under date of February 21, 2007, a copy of which is attached
hereto as Exhibit
A-2
and
incorporated herein by this reference, incorporating the use of a reasonable
quantity of Building standard materials and finishes (such work being herein
called "Landlord's SLP Work"). Landlord reserves the right: (i) to make
substitutions of material or components of equivalent grade and quality when
and
if any specified material or component shall not be readily or reasonably
available, and (ii) to make changes necessitated by conditions met in the course
of construction, provided that Tenant's approval of any substantial change
shall
first be obtained (which approval shall not be unreasonably withheld or delayed
so long as there shall be general conformity with the Final SLP Layout Plans).
Tenant shall on or before March 15, 2007 by notice to Landlord designate a
single individual who Tenant agrees shall be available to meet and consult
with
Landlord at the Substitute Leased Premises as Tenant’s representative respecting
the matters which are the subject of this Paragraph 4 and who, as between
Landlord and Tenant, shall have the power to legally bind Tenant, in making
requests for changes, giving approval of plans or work, giving directions to
Landlord or the like, under this Paragraph 4; and any notice or delivery given
to such person personally or at his place of business shall have the same effect
as a notice or delivery given to Tenant.
2
(b)
Landlord
currently estimates that the Landlord’s SLP Work can be completed to a level
permitting Tenant’s occupancy on or before August 1, 2007. If Landlord
shall, for any reason (including, without limitation, failure to complete the
work, if any, required to be done by Landlord under this lease) fail to make
available to Tenant possession of the Substitute Leased Premises on or before
August 1, 2007 or any other date, Landlord shall not be subject to any
liability for such failure nor for any failure to timely complete any work;
provided, however, that in the event Landlord's SLP Work is not completed to
a
level permitting Tenant's occupancy on or before August 31, 2007 for reasons
other than a Tenant SLP Delay (hereinafter defined), Tenant shall, commencing
September 1, 2007, receive two (2) days of Base Rent abatement for each day
that
occurs after August 31, 2007 until the day the Substitute Leased Premises are
ready for Tenant's occupancy or, would have been ready for Tenant's occupancy,
in the absence of any Tenant SLP Delay, whichever is sooner (herein the "Delay
Abatement"). Under such circumstances, (i) the Initial Leased Premises shall
continue to be the Leased Premises under the Lease as amended herein, (ii)
the
Substitute Leased Premises shall not be substituted for the Initial Leased
Premises, and (iii) Tenant’s obligation to pay Base Rent and Additional Rent for
the Substitute Leased Premises shall not commence until the Substitute Leased
Premises Commencement Date (and, if applicable, Tenant shall be entitled to
the
Delay Abatement); and such failure to make available to Tenant possession of
the
Substitute Leased Premises on or before August 1, 2007 or any other date or
to timely complete any work, shall not in any other way affect the validity
or
continuance of this Lease, nor the Term or the obligations of Tenant hereunder.
Such deferral of Rent and the substitution of the Substitute Leased Premises
for
the Initial Leased Premises as the Leased Premises under the Lease as amended
herein shall be Tenant’s sole and exclusive rights and remedies with respect to
any such failure. There shall be no deferral of Rent on the Substitute Leased
Premises, however, if any such failure is caused in whole or part by any act
or
omission of Tenant, its agents, servants, employees or contractors, which has
the effect of hindering or delaying Landlord's delivery of possession or the
timely completion of any work to be done by Landlord (hereinafter a "Tenant
SLP
Delay") including, without limitation, (a) any delay which is caused by changes
in the work to be performed by Landlord in readying the Substitute Leased
Premises for Tenant's occupancy, (b) any delay, not caused by Landlord, in
furnishing materials or procuring labor required to be furnished or procured
for
the completion of the Substitute Leased Premises, or (c) any delay which is
caused by any failure by Tenant, without regard to any grace period applicable
thereto, promptly to furnish to Landlord any required information, approval
or
consent or caused by any good faith reluctance on the part of Landlord to
approve any information required to be submitted by Tenant and approved by
Landlord, or (d) any delay which is caused by the performance of any work or
activity in the Substitute Leased Premises by Tenant or any of its employees,
agents or contractors. Tenant also shall pay to Landlord, within ten (10) days
after receipt of demand made from time to time, a sum equal to any additional
cost to Landlord in completing the Substitute Leased Premises resulting from
any
Tenant SLP Delay.
(c)
Landlord
and Tenant acknowledge that the Substitute Leased Premises may be available for
occupancy and prior to the completion of Landlord’s SLP Work. In the event
Tenant occupies the Substitute Leased Premises prior to completion of Landlord’s
SLP Work, Tenant agrees to permit Landlord and its contractor, subcontractor
and
employees to access the Substitute Leased Premises at all times, and without
further notice, to complete the Landlord’s SLP Work, Landlord agrees to use all
reasonable efforts to minimize interference with Tenant’s use of the Substitute
Leased Premises and operation of its business during completion of Landlord’s
SLP Work, but Tenant confirms its understanding and agreement that completion
of
the Landlord’s SLP Work may result in noise, vibration, dirt, dust and other
circumstances necessarily arising from such construction. Landlord shall have
no
liability (and Tenant shall not be entitled to claim damages or any actual
or
constructive eviction, or right of offset or reduction in its rent or other
monetary obligations) as a consequence of any disruption or interference with
Tenant’s use of the Substitute Leased Premises or conduct of its business
throughout the completion of such construction. In the event the Substitute
Leased Premises are available for Tenant’s occupancy prior to August 1,
2007, Tenant shall, at its election, be permitted to occupy the Substitute
Leased Premises subject to all the terms and provisions of this Lease as amended
herein; provided, however, Tenant shall not be obligated to pay Base Rent and
Additional Rent for the Substitute Leased Premises for that period of time
occurring from the date the Substitute Leased Premises are ready for occupancy
up to August 1, 2007, however, Tenant shall remain obligated to pay Base
Rent and Additional Rent for the Initial Leased Premises during such time
period.
3
(d)
Landlord
shall afford Tenant and its employees and agents (each herein referred to as
a
"Tenant Party" and collectively the "Tenant Parties") access to the Substitute
Leased Premises at reasonable times prior to the Substitute Leased Premises
Commencement Date only in the presence of a representative of the Landlord,
and
at Tenant's sole risk and expense, for the purposes of inspecting and verifying
Landlord's performance of the Landlord's SLP Work. Tenant shall advise Landlord
promptly of any objection to the construction of the Landlord's SLP Work. Within
fifteen (15) days after the Landlord’s SLP Work is completed, Landlord and
Tenant shall prepare a mutually agreed-upon list (“SLP Punch List”) of items of
the Landlord’s SLP Work that need to be corrected or repaired. Landlord agrees
to cause the items set forth in the SLP Punch List to be corrected or repaired
within thirty (30) days after the date the SLP Punch List is prepared. As used
in this subparagraph 4(d), “SLP Punch List” items means minor details of
construction or decoration that do not interfere with the Tenant’s use and
enjoyment of the Substitute Leased Premises.
5. Tenant's
Right of First Offer.
Article
61 of the Addendum to the Lease is amended and restated to provide in its
entirety as follows:
Upon
and
subject to all the terms and conditions set forth in this Xxxxxxxxx 0, Xxxxxxxx
hereby grants to Tenant during the Term of the Lease as amended herein, a
continuous and ongoing right of first offer (the "Right of First Offer")
covering that office space located upon the thirty-third (33rd) floor of the
Building, consisting of approximately 12,382 square feet of rentable area and
which is depicted on Exhibit
A-3
attached
hereto (the "Offer Space"). The Right of First Offer shall be on the following
terms and conditions:
(a)
If
Landlord shall desire to lease all or any portion of the Offer Space, as
evidenced by the initiation of formal negotiations with or the issuance of
a
proposal to a third party by or on behalf of Landlord covering any portion
of
the Offer Space, or Landlord's acceptance of a proposal from a third party,
Landlord shall first offer to lease such part of the Offer Space (the
"Designated Offer Space") to Tenant, by giving written notice to Tenant. Such
notice shall specify the date on which the Designated Offer Space is expected
to
be available for Tenant's lease (the "Scheduled Designated Offer Space
Commencement Date"), and the length of the term the Designated Space is to
be
leased for (the "Designated Offer Space Lease Term"). Within six (6) business
days after Landlord gives Tenant such notice, Tenant shall, by written notice
to
Landlord (the "Offer Notice"), elect or decline to exercise it Right of First
Offer. If Tenant fails to deliver the Offer Notice to Landlord within such
period of six (6) business days, Tenant shall be deemed to have declined to
exercise its Right of First Offer. If Tenant declines or is deemed to have
declined to exercise its Right of First Offer, Landlord thereafter shall have
the right to lease such Designated Offer Space to any party upon such terms
and
conditions and for such period or successive period of time as Landlord, in
its
sole discretion, shall determine. Notwithstanding the foregoing, Tenant shall
have no right to exercise the Right of First Offer (and, at Landlord's option,
any previous exercise of the Right of First Offer shall be null and void) if
at
the time Tenant first attempts to exercise the Right of First Offer, or at
any
time thereafter until the Designated Offer Space has been added to the Leased
Premises, Tenant is in default under the Lease as amended herein. The Right
of
First Offer shall be subject and subordinate to any renewal, expansion and/or
similar rights granted to any tenant of the Building prior to the date of this
First Amendment or granted to any tenant leasing any Designated Offer Space
after the Tenant declines or is deemed to have declined to exercise its Right
of
First Offer.
4
(b) In
the
event Tenant exercises the Right of First Offer, Tenant shall deliver to
Landlord the Tenant's proposed layout plans and specifications for such
Designated Offer Space (the “DOS Layout Plans”) within twenty (20) business days
after delivery of the Offer Notice. The DOS Layout Plans shall provide for
a
level of improvements comparable to the level of the Landlord’s SLP Work, shall
provide for the use of a reasonable quantity of Building standard materials
and
finishes, and shall be subject to Landlord’s approval. Notwithstanding the
foregoing provisions of this subparagraph 5(b), the cost and expense of
completing the Designated Offer Space Improvements on a per rentable square
foot
basis shall not exceed the product of $0.42 multiplied by the number of months
expected to occur during the Designated Offer Space Lease Term, unless the
Tenant provides funds to Landlord in a manner reasonably acceptable to Landlord
to pay for any costs and expenses in excess of such limit. Upon the Offer Notice
being given and within such time as Landlord reasonably determines is necessary
to complete such Designated Offer Space for occupancy, Landlord shall cause
such
Designated Offer Space to be improved and completed in a manner consistent
with
the approved DOS Layout Plans (the "Designated Offer Space Improvements").
Landlord and Tenant acknowledge that Tenant will continue to occupy the Leased
Premises during construction of the Designated Offer Space Improvements and
Tenant confirms its understanding that completion of the Designated Offer Space
Improvements may result in noise, vibration, dirt, dust and other circumstances
necessarily arising from such construction. Landlord shall have no liability
(and Tenant shall not be entitled to claim damages or any actual or constructive
eviction, or right of offset or reduction in its rent or other monetary
obligations) as a consequence of any disruption or interference with Tenant’s
use of the Leased Premises or conduct of its business throughout the completion
of such construction. The "Commencement Date" with respect to the Designated
Offer Space ("Designated Offer Space Commencement Date") shall be deemed to
be
that date which is the later of the Scheduled Designated Offer Space
Commencement Date or the first business day after the substantial completion
of
the Designated Offer Space Improvements.
(c)
Landlord
shall afford Tenant and Tenant Parties access to the Designed Offer Space at
reasonable times prior to the occupancy of the Designed Offer Space only in
the
presence of a representative of the Landlord, and at Tenant's sole risk and
expense, for the purposes of inspecting and verifying Landlord's performance
of
the Designed Offer Space Improvements. Tenant shall advise Landlord promptly
of
any objection to the construction of the Designed Offer Space Improvements.
Within fifteen (15) days after the Designed Offer Space Improvements are
completed, Landlord and Tenant shall prepare a mutually agreed upon list ("DOS
Punch List") of items of the Designed Offer Space Improvements that need to
be
corrected or repaired. Landlord agrees to cause the items set forth in the
DOS
Punch List to be corrected or repaired within thirty (30) days after the date
the DOS Punch List is prepared. As used in this subparagraph 5(c), "DOS Punch
List" items means minor details of construction or decoration that do not
interfere with Tenant's use and enjoyment of the Desiganted Offer
Space.
(d)
The
Designated Offer Space shall be added to the Leased Premises, for all purposes,
as of the Designated Offer Space Commencement Date for the Designated Offer
Space Lease Term and subject to and upon the following economic terms and all
of
the other terms, covenants and conditions of the Lease as amended
herein:
5
(i) the
Base
rent shall be at the “Designated Offer Space Fair Market Rental Rate” or “DOS
FMRR” as defined in subparagraph 5(e) below.
(ii) Landlord
shall make available to Tenant and Tenant shall have the non-assignable option
to rent from Operator (hereinafter defined) one (1) unreserved parking space
located within the Parking Garage (hereinafter defined) for every 1,000 square
feet of rentable area contained in the Designated Offer Space at the monthly
rate posted from time to time by the Operator and otherwise subject to the
terms
of the Parking Agreement attached to the Lease as Exhibit D as amended herein
(the “Parking Agreement”). Tenant must exercise its option to rent any
additional parking spaces within thirty (30) days after the Designated Offer
Space Commencement Date.
(iii) Tenant's
Proportionate Share shall be increased to a new percentage, calculated in
accordance with the provisions of the Lease as amended herein by increasing
the
rentable area of the Leased Premises by the number of square feet comprising
the
rentable area of such Designated Offer Space. Tenant's obligation to pay Base
Rent and the Additional Rent calculated pursuant to the Lease as amended herein
for the Designated Offer Space shall commence on the Designated Offer Space
Commencement Date. Upon addition of the Designated Offer Space to the Leased
Premises, the Lease shall be deemed modified in the manner set forth above
without the necessity of any further agreement or document; provided, however,
Landlord and Tenant agree to execute, acknowledge and deliver an instrument
evidencing such modification of the Lease to be prepared by
Landlord.
(e) Designated
Offer Space Fair Market Rental Rate.
(i) For
the
purposes of this Paragraph 5, the term "Designated Offer Space Fair Market
Rental Rate" or "DOSFMRR" for the Designated Offer Space added to the Leased
Premises pursuant to the terms of Paragraph 5 shall mean an amount per square
foot of the rentable area of the Designated Space, reasonably determined by
Landlord by reference to the market for comparable space (including the extent
and condition of the build-out) in similar and comparable office buildings
located in the downtown Denver central business district, that a willing
landlord would offer and a willing tenant would accept in an arms length
transaction for the lease of such office space
[A] commencing
on the Designated Offer Space Commencement Date and expiring on the last day
of
the Designated Offer Space Lease Term,
[B] providing
for no free rent, a tenant finish allowance equal to the cost of completing
the
Designated Offer Space Improvements plus the value of the tenant improvements
in
place upon the Designated Offer Space prior to construction of the Designated
Offer Space Improvements to a prospective tenant, and
[C] otherwise
on all of the terms and conditions of the Lease as amended herein, including
the
Tenant's obligation to pay Additional Rent in accordance with the provisions
of
Article 54 of the Lease using the Landlord's Operating Expense Contribution
defined in subsection 54.02(c) of the Lease.
(ii)
Landlord
shall deliver to Tenant its proposed DOSFMRR within thirty (30) days after
Landlord's receipt of the Offer Notice. Landlord and Tenant shall use reasonable
good faith efforts to mutually agree upon the DOSFMRR within thirty (30) days
after Landlord's receipt of the Offer Notice.
6
(iii)
In
the
event Landlord and Tenant cannot agree upon the DOSFMRR within the thirty (30)
day period described in subparagraph 5(e)(ii) the DOSFMRR shall be determined
by
appraisal, said appraisal shall be conducted in accordance with the following
procedures:
[A] Within
twenty (20) days after receipt of a notice to appraise given by either party,
Landlord and Tenant shall each select a real estate appraiser, who shall be
a
member of the American Institute of Real Estate Appraisers, and who shall have
at least five (5) years appraisal experience with respect to commercial and
office rental properties in the central business district of Denver, Colorado.
If one of the parties hereto fails to appoint an appraiser within the time
period prescribed, then the single appraiser appointed shall be the sole
appraiser and shall determine the DOSFMRR. If two appraisers are appointed,
they
shall have thirty (30) days from the date the second appraiser is appointed
(the
"30-day Appraisal Period") within which to agree upon the DOSFMRR. The
appraiser(s) shall be advised that the determination of the DOSFMRR shall be
governed by the definitions of same set forth in this Paragraph 5. The
determination by the two appraisers of the DOSFMRR shall be binding on Landlord
and Tenant.
[B] If
the
two appraisers appointed by the parties hereto are unable to agree upon the
DOSFMRR within the 30-day Appraisal Period, then said appraisers shall attempt,
within ten (10) days after the expiration of the 30-day Appraisal Period, to
select a third appraiser (the "Third Appraiser"). If the first two appraisers
are unable to agree on the Third Appraiser within the ten (10) day period
prescribed in the immediately preceding sentence, either Landlord or Tenant,
by
giving ten (10) days notice to the other party hereto, shall request that the
presiding judge of the District Court for the City and County of Denver, State
of Colorado select the Third Appraiser. The Third Appraiser, however selected,
shall meet the qualifications set forth in subparagraph 5(e)(iii)[A] above,
and
shall be a person who has not previously acted in any capacity for either
Landlord or Tenant.
[C] On
or
before the tenth (10th) day after the Third Appraiser is appointed or selected,
the first two appraisers shall each simultaneously submit in sealed envelopes
his/her opinion of the fair market base rent at issue, together with any written
arguments or data in support of said opinion(s), to the Third Appraiser. Within
thirty (30) days after he/she is appointed or selected, the Third Appraiser
shall determine the DOSFMRR by selecting one of the opinions submitted by the
first two appraisers. The selection of the Third Appraiser shall be binding
on
Landlord and Tenant.
(iv)
Each
party hereto shall pay the fees and expenses of the appraiser selected by such
party, and the fees and expenses of the Third Appraiser shall be borne equally
by Landlord and Tenant.
7
6. Tenant’s
Right to Expand Leased Premises.
Tenant's Right to Expand Leased Premises provided in Article 62 of the Addendum
to the Lease is terminated and null, void, and of no further
effect.
7. Renewal
Option.
The
provisions of Article 63 of the Addendum to the Lease are amended and restated
to provide in their entirety as follows:
(a)
Renewal
Term.
Tenant
shall have the option to renew ("Renewal Option") this Lease for one additional
term of five (5) years ("Renewal Term"), commencing upon the expiration of
the
initial Term of this Lease, on the condition that Tenant is not in default
under
the Lease as amended herein in any material respect at the time Tenant gives
notice of exercise of its Renewal option or at the time of commencement of
the
Renewal Term. The Renewal shall be on all of the terms, covenants and conditions
of the Lease as amended herein, except (i) there shall be no obligation to
provide any tenant improvements, furniture, cabling or other Tenant allowance
or
to construct any tenant improvements, (ii) Landlord's Operating Expense
Contribution for determining Tenant's obligations to pay Additional Rent
pursuant to the provisions of Article 54 shall be changed to mean the total
amount of Operating Expenses (on a per square foot of rentable area basis)
incurred by Landlord during the Calendar Year in which the Renewal Term
commences, (iii) there shall be no Right of First Offer or Right to Expand
Leased Premises or further right to renew the Term of the Lease, and (iv) the
annual Base Rent for the Leased Premises during the Renewal Term shall be the
Renewal Term Fair Market Rental Rate ("RTFMRR") as defined in subparagraph
7(b)
below, at the time the Renewal Term begins. Tenant's Renewal Option may be
exercised only by Tenant giving Landlord written notice of Tenant's election
to
exercise such option, at least nine (9) months prior to the end of the initial
Term of the Lease, time being of the essence with respect to such
notice.
(b)
Fair
Market Rental Rate.
(i)
For
the
purposes of this Paragraph 7, the term "Renewal Term Fair Market Rental Rate"
or
"RTFMRR" for the Renewal Term shall mean an amount per square foot of the
rentable area of the Leased Premises per annum, reasonably determined by
Landlord by reference to the market for comparable space (including the extent
and condition of the build-out in the Building.
[A] commencing
on the commencement date of the Renewal Term,
[B] providing
for no free rent, a tenant finish allowance equal to the value of the tenant
improvements in place upon the Leased Premises to a prospective tenant as of
the
commencement date of the Renewal Term, and
[C] otherwise
on all of the terms and conditions of the Lease as amended herein, including
the
Tenant's obligation to pay Tenant's Proportionate Share of Operating Expenses
in
accordance with the provisions of Article 54 of the Lease using a Landlord’s
Operating Expense Contribution in the amount to be adjusted.
(ii)
Landlord
shall deliver to Tenant its proposed RTFMRR for the Renewal Term within thirty
(30) days after Landlord's receipt of notice of Tenant's election to exercise
its option to renew ("Renewal Notice"). Landlord and Tenant shall use reasonable
good faith efforts to mutually agree upon the RTFMRR within thirty (30) days
after Tenant's delivery of the Renewal Notice.
(iii)
In
the
event Landlord and Tenant cannot agree upon the RTFMRR for the Renewal Term
within the thirty (30) day period described in subparagraph 7(b)(ii) the RTFMRR
shall be determined by appraisal, said appraisal shall be conducted in
accordance with the following procedures:
8
[A] Within
twenty (20) days after receipt of a notice to appraise given by either party,
Landlord and Tenant shall each select a real estate appraiser, who shall be
a
member of the American Institute of Real Estate Appraisers, and who shall have
at least five (5) years appraisal experience with respect to commercial and
office rental properties in the central business district of Denver, Colorado.
If one of the parties hereto fails to appoint an appraiser within the time
period prescribed, then the single appraiser appointed shall be the sole
appraiser and shall determine the RTFMRR. If two appraisers are appointed,
they
shall have thirty (30) days from the date the second appraiser is appointed
(the
"30-day Appraisal Period") within which to agree upon the RTFMRR. The
appraiser(s) shall be advised that the determination of the RTFMRR shall be
governed by the definitions of same set forth in this subparagraph 7(b). The
determination by the two appraisers of the RTFMRR shall be binding on Landlord
and Tenant.
[B] If
the
two appraisers appointed by the parties hereto are unable to agree upon the
RTFMRR within the 30-day Appraisal Period, then said appraisers shall attempt,
within ten (10) days after the expiration of the 30-day Appraisal Period, to
select a third appraiser (the "Third Appraiser"). If the first two appraisers
are unable to agree on the Third Appraiser within the ten (10) day period
prescribed in the immediately preceding sentence, either Landlord or Tenant,
by
giving ten (10) days notice to the other party hereto, shall request that the
presiding judge of the District Court for the City and County of Denver, State
of Colorado select the Third Appraiser. The Third Appraiser, however selected,
shall meet the qualifications set forth in subparagraph 7(b)(iii)[A] above,
and
shall be a person who has not previously acted in any capacity for either
Landlord or Tenant.
[C] On
or
before the tenth (10th) day after the Third Appraiser is appointed or selected,
the first two appraiser shall each simultaneously submit in sealed envelopes
his/her opinion of the fair market base rent at issue, together with any written
arguments or data in support of said opinion(s), to the Third Appraiser. Within
thirty (30) days after he/she is appointed or selected, the Third Appraiser
shall determine the RTFMRR by selecting one of the opinions submitted by the
first two appraisers. The selection of the Third Appraiser shall be binding
on
Landlord and Tenant.
[D] Each
party hereto shall pay the fees and expenses of the appraiser selected by such
party, and the fees and expenses of the Third Appraiser shall be borne equally
by Landlord and Tenant.
8. Parking.
The
first paragraph (after the lead-in provision) of the Parking Agreement attached
as Exhibit
D
to the
Lease is amended and restated as of August 1, 2007 to provide in its entirety,
as follows:
The
Building in which the Leased Premises are located contains a parking garage
for
the benefit of tenants and the general public (hereinafter called "Parking
Garage"). Landlord does not operate or manage the Parking Garage, but maintains
a management agreement with an independent contractor (hereinafter called
"Operator") for the management and operation of the Parking Garage. In order
to
rent parking spaces in the Parking Garage, Tenant must contract separately
with
the Operator for such rentals. Landlord shall reserve for Tenant and Tenant
shall have a non-assignable option to rent from the Operator two (2) unreserved
parking spaces and eight (8) reserved parking spaces (collectively, the "Parking
Spaces") located in the Parking Garage at the prevailing market rates posted
by
the Operator from time to time during the Term of the Lease. Tenant shall
exercise its option to rent the Parking Spaces on or before August 31, 2007
by notifying the Operator in writing. The Parking Agreement attached as Exhibit
D shall remain in effect in the event Tenant exercises the Renewal
Option.
9
9. Temporary
Leased Premises.
Landlord agrees to make available for Tenant’s occupancy (i) approximately 656
square feet of rentable area located on the seventeenth (17th) floor of the
Building which is depicted on Exhibit
A-4
attached
hereto and incorporated herein by this reference (the "17th Floor Temporary
Leased Premises"), and (ii) approximately 2,000 square feet of rentable area
located on the eighteenth (18th) floor of the Building which is depicted on
Exhibit
A-4
attached
hereto (the “18th Floor Temporary Leased Premises”). Tenant shall be permitted
to occupy the 17th Floor Temporary Leased Premises commencing April 15, 2007
or
such earlier date if the 17th Floor Temporary Leased Premises are available
(the
"17th Floor Temporary Leased Premises Commencement Date"), and the 18th Floor
Temporary Leased Premises commencing March 1, 2007 (the "18th Floor Temporary
Leased Premises Commencement Date") and continuing through and until that date
(the "Temporary Leased Premises Expiration Date") which is the second (2nd)
business day to occur after the Substitute Leased Premises Commencement Date.
As
of the 17th Floor Temporary Leased Premises Commencement Date (with respect
to
the 17th Floor Temporary Leased Premises) and as of the 18th Floor Temporary
Leased Premises (with respect to the 18th Floor Temporary Leased Premises),
the
17th Floor Temporary Leased Premises and 18th Floor Temporary Leased Premises
(collectively referred to herein as the "Temporary Leased Premises") shall
constitute additional Leased Premises through and until the Temporary Leased
Premises Expiration Date upon and subject to all of the terms, covenants and
conditions of the Lease as amended herein, with the exception that Tenant shall
not be obligated to pay any Base Rent or Additional Rent with respect to the
Temporary Leased Premises. Tenant agrees to accept the Temporary Leased Premises
in its "AS IS" condition without any obligation upon Landlord to complete
improvements to the Temporary Leased Premises or to provide any allowance for
the completion of such improvements. On or before the Temporary Leased Premises
Expiration Date, Tenant shall completely vacate and redeliver the Temporary
Leased Premises to Landlord in the same condition it was in on the 17th Floor
Temporary Leased Premises Commencement Date (with respect to the 17th Floor
Temporary Leased Premises) and on the 18th Floor Temporary Leased Premises
Commencement Date (with respect to the 18th Floor Temporary Leased Premises),
reasonable wear and tear excepted. In the event Tenant fails to vacate the
Temporary Leased Premises on or before the Temporary Leased Premises Expiration
Date, (i) Tenant shall be deemed a tenant at sufferance, (ii) Tenant shall
pay
to Landlord the amount of $500.00 per day for each day Tenant fails to vacate
the Temporary Leased Premises after the Temporary Leased Premises Expiration
Date, and (iii) Landlord shall be permitted to exercise any and all legal and
equitable remedies including but not limited to the eviction of Tenant and
a
claim for any damages (including consequential damages) incurred by Landlord
as
result of Tenant's failure to vacate the Temporary Leased Premises on or before
the Temporary Leased Premises Expiration Date.
10. Tenant's
Cabling Allowance.
Provided Tenant performs all of its obligations under the Lease as amended
herein, Landlord agrees to provide Tenant with an allowance for the installation
of cabling to service Tenant's equipment in the Substitute Leased Premises
in
the amount of $6,191.00 ("Tenant's Cabling Allowance"). Landlord agrees to
pay
the Tenant's Cabling Allowance to Tenant within thirty (30) days after the
occurrence of the Substitute Leased Premises Commencement Date.
11. Substitution
of Other Premises.
Landlord's right to substitute the Existing Premises as provided in Article
53
of the Lease is terminated and null, void and of no further effect.
10
12. Real
Estate Broker.
Landlord and Tenant acknowledge and agree that: (i) Landlord has been
represented in connection with this First Amendment by Amerimar Realty
Management Co.-Colorado (“Amerimar”) and by Silverbrae Holdings, Inc. (Xxxxx X.
X. Xxxx and Xxxxx XxXxxxxx) (“Silverbrae”) as Landlord*s
agent,
and (ii) Tenant has been represented in connection with this First Amendment
by
Staubach Company (Xxxxxxx Xxxxx) ("Xxxxxxxx") as Tenant*s
agent.
Tenant agrees to indemnify, defend and hold Landlord harmless from and against
any claims, for a commission or other compensation in connection with this
First
Amendment, made by any broker or finder (other than Staubach) who claim to
have
dealt with or communicated to Tenant in connection with this First Amendment,
provided that Landlord has not in fact retained such broker or finder. Landlord
agrees to pay Amerimar, Silverbrae and Staubach pursuant to the terms of
separate agreements, for their services rendered in connection with this First
Amendment.
13. Reaffirmation
of Lease Terms.
Tenant
and Landlord agree that the terms, covenants and conditions of the Lease shall
remain and continue in full force and effect as amended herein. Each of Landlord
and Tenant confirms that it is in compliance with the Lease provisions and
the
neither Tenant nor Landlord has any defenses, claims or offsets against the
other as of the date hereof. As of the date hereof, Tenant waives and releases
Landlord and its agents and employees, from any and all claims, demands,
damages, actions, causes of action, or suits of any kind or nature whatsoever,
known or unknown, arising out of or in connection with the Lease and/or use
or
occupancy of the Initial Leased Premises prior to the date hereof. Except as
specifically modified in this First Amendment, the Lease remains in full force
and effect. If there is any conflict between the terms and provisions of this
First Amendment and the terms and provisions of the Lease, the terms and
provisions of this First Amendment shall govern.
14. Tenant's
Representations Concerning Assignment and Sublease.
Tenant
represents and warrants to Landlord that (i) there are no subleases, assignments
or other agreements between the Tenant and any third party concerning or
affecting the Lease or the Initial Leased Premises or any portion thereof;
and,
(ii) Tenant has not assigned, conveyed, pledged or granted any interest in
the
Lease or any portion of the Initial Leased Premises to any person or
entity.
15. Governing
Law.
The
governing law of this First Amendment and all provisions hereunder shall be
governed by and construed in accordance with the laws of the State of
Colorado.
16. Complete
Agreement.
This
First Amendment contains all agreements, understandings and arrangements between
the parties hereto with regard to the matters described herein.
17. Benefit.
Subject
to the limitations on Tenant's assignment and subleasing provided in the Lease,
this First Amendment shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.
18. Counterparts.
This
First Amendment may be executed in two (2) or more counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the
same
agreement.
19. Binding
Effect.
This
First Amendment becomes effective only upon the execution by Landlord and
Tenant.
20. Definitions.
All
capitalized terms used herein, but not defined herein, shall have the same
meanings given to such terms in the Lease unless otherwise
indicated.
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IN
WITNESS WHEREOF, the parties hereto have caused this First Amendment to be
duly
executed as of the day and year first above written.
|
LANDLORD:
|
||
|
DENVER
PLACE ASSOCIATES LIMITED
|
||
|
PARTNERSHIP,
a Delaware limited partnership
|
||
|
By:
|
Amerimar
Realty Management Co.-Colorado,
|
|
|
|
By:
Amerimar Realty Management Co.-
|
|
|
Pennsylvania, its general partner,
|
||
|
|
By: ARC-Management Co., Inc.,
|
|
| its general partner | ||
|
Date:
3/20/07
|
|
By: /s/ Xxxxx X.
Xxxxxxxx
|
|
Xxxxx X. Xxxxxxxx,
President
|
||
|
TENANT:
|
||
|
RANCHER
ENERGY CORP., a Nevada corporation
|
||
|
Date:
3/6/07
|
By:
/s/ Xxxx
Works
|
|
|
President and CEO (Title)
|
||
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