EXHIBIT 10.18
LEASE
THIS LEASE, made and entered into this 8th day of July, 1991, by and
between PVI BUILDING INVESTORS, a Colorado General Partnership ("Landlord"), and
PRECISION VISUALS, INC., a Delaware corporation ("Tenant").
1. Landlord is the Owner of Xxx 0, Xxxxxxxxx Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxxx, Xxxxxx of Boulder, State of Colorado, including the 25,440 square
foot building (the "Building"), parking lots and landscaping on Lot 7, which
address is 0000 Xxxxxxx Xxxx (the "Premises").
2. Tenant is currently in occupancy of the Premises under the terms and
conditions of the Lease dated December 28, 1984 as modified herein.
3. Tenant desires to continue to lease the Premises from the Landlord
from the date of this lease through July 31, 1997, subject to the terms and
conditions set forth herein.
4. This Lease supersedes and replaces in its entirety the Lease dated
December 28, 1984, covering these Premises.
AGREEMENT
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1. Leased Premises. Landlord hereby leases unto Tenant and Tenant leases
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from Landlord, pursuant to the term and Commencement Date specified in paragraph
2 below, Lot 7, the "Premises."
2. Term.
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(a) Commencement and Term of Occupancy. The term of this Lease shall
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commence on August 1, 1991 ("Commencement Date"). The Lease shall terminate on
July 31, 1997, unless earlier terminated pursuant to the terms of this Lease or
by operation of law or extended by mutual agreement.
3. Possession. Possession shall be deemed to occur as of the
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Commencement Date indicated above.
4. Rent. Tenant shall pay the base rent including any escalation
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provided for in paragraph 4(b), Operating Expenses, and other monthly charges to
Landlord, at the address set forth in paragraph 30(c) of this Lease, without
prior notice or demand, on or before the first day of the first full calendar
month of the Lease term and a like sum on or before the first day of each and
every successive calendar month during the Lease term according to paragraph
4(a). Rent for any period during the term hereof which is for less than one (1)
month shall be a prorated portion of the normal monthly installment, based upon
a thirty (30) day month. The following rent shall be paid to Landlord, without
deduction or offset in lawful money of the United States of America, which shall
be legal tender at the time of payment:
(a) Initial Rental Rate: The base lease rate shall be $9.25 per
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square foot, per year, or $19,610 per month.
(b) Escalation of Festal Rate: on each annual anniversary of the
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Commencement Date of the term of this Lease, the annual base rental shall be
adjusted upward (but not downward) in the same proportion by which the consumer
price index of the United State Department of Labor, Bureau of Labor Statistics
(presently designated as all urban consumers, Denver - all/items) increases, on
the closest date of publication thereof prior to each adjustment date from the
index on the closest date of publication thereof one year prior to each
adjustment date. However, in no event shall the base rent increase by an amount
which is less than two percent (2%) per year or more than six percent (6%) per
year for the preceding year.
5. Security Deposit. xxxxxxxxxxx
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6. Operating Expenses.
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(a) Tenant shall be responsible for all Operating Expenses in regard
to the Premises which shall include but not be limited to the items set forth in
subsections (b) and (c) below. The items in subsection (b) shall be paid by
Landlord and reimbursed by Tenant. The items in subsection (c) shall be the sole
responsibility of Tenant and shall be paid directly by Tenant.
(b) All real estate taxes and insurance premiums on the Premises,
including the land, building, and improvements shall be paid by Landlord and
reimbursed by Tenant. The real estate taxes shall include all real estate taxes
and assessments that are levied upon or assessed against the Premises, including
any taxes which may be levied on rents other than federal and state income
taxes. The insurance shall include all insurance premiums for fire, extended
coverage, liability, and any other insurance that Landlord deems necessary for
the Premises. The tax and insurance expenses required to be paid in this
subsection (b) shall be paid by Tenant to Landlord in one lump sum within five
(5) business days of Landlord's presentation of an invoice or other statement
evidencing the amount due. Alternatively, if any lender financing the building
requires a monthly escrow of the above amounts, they shall be estimated in
advance by Landlord. The estimated amount shall be paid monthly in advance by
Tenant in conjunction with the payments due under Section 4 promptly upon
receipt of yearly estimates. The amount paid shall be held by Landlord for the
payment of the tax and insurance expenses. If Landlord's estimate is less than
the actual cost, Tenant shall pay to Landlord on demand the amount, if any,
equal to the difference between the actual tax and insurance expenses and the
estimated tax and insurance expenses. If Landlord's estimate exceeds the actual
cost, the balance remaining after payment of the actual tax and insurance
expenses shall be held by Landlord and applied to the next monthly payment(s) of
tax and insurance expenses required to be paid in this subsection (b). The
Tenant shall not be entitled to receive interest on any additional amounts paid.
Even though
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the term has expired and Tenant has vacated the Premises, when the final
determination is made of Tenant's actual tax and insurance expenses for the year
in which this Lease terminates, Tenant snail immediately pay any balance due or
Landlord shall Immediately refund any overpayment.
(c) Tenant shall be solely responsible for and shall directly pay for
the following expenses set forth in this subsection (c) , and the expenses for
items set forth in Paragraph 10(c) below:
(i) All water, sewer, gas, electricity and other utilities, and
materials used in the operation and maintenance of the Premises.
(ii) All maintenance and repair expenses incurred for: the plumbing,
heating, ventilation, air conditioning and electrical systems of the Building
(except as set forth in Section 9(a)(2)); greenbelt areas; the parking lot areas
(which shall include all general maintenance and repairs, resurfacing, painting,
restriping, cleaning, snow removal, sweeping and janitorial services);
maintenance and repair of sidewalks, curbs and signs; maintenance and repair of
sprinkler systems; lighting and other utilities; maintenance and repair of any
fire protection systems, lighting systems, and any other utility systems; all
costs and expense pertaining to any security alarm system; upkeep of maintenance
and operating machinery and equipment and amounts paid for such machinery and
equipment, if any.
(d) Landlord may give written notice to Tenant of Tenant's failure to
perform its required duties under subsection 6(c). If after thirty (30) days
written notice, Tenant fails to diligently perform and complete its required
duties under subsection 6(c), Landlord may elect to perform such duties and the
reasonable costs incurred shall constitute additional rent due and payable to
Landlord within five (5) days after such amounts are disclosed to Tenant.
(e) Landlord shall be responsible for and shall pay for all
maintenance and repairs to the roof which are not borne by Tenant in paragraph
10(b), exterior finish (painting) and items of a purely structural nature. If,
after thirty (30) days' written notice, Landlord fails to diligently perform and
complete the above necessary maintenance and repairs, Tenant may elect to effect
the maintenance and repairs in a reasonable manner and shall be reimbursed by
Landlord for the reasonable costs of the maintenance or repairs.
7. Use. Tenant shall use the Premises for office space and other related
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uses and shall not use or permit the Premises to be used for any other purpose
without the prior written consent of Landlord. Tenant shall not do or permit
anything to be done in or about the Premises nor bring or keep anything on the
Premises which
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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 cancellation of any
insurance policy covering said Building or Premises or any part thereof or any
of its contents. Tenant shall not allow the Premises to be used for any improper
or unlawful purposes, nor shall Tenant cause, maintain or permit any nuisance
in, on or about the Premises. Tenant shall not commit or suffer to be committed
any waste in an abusive or destructive manner in or upon the Premises so that
said waste shall disturb the quiet enjoyment of any persons.
8. Compliance with Law. Tenant shall not use the Premises or permit
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anything to be done in or about the Premises which will in any way conflict with
any law, statute, ordinance or governmental rule or regulation now in force or
which may later be enacted or promulgated. 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 later be in force.
9. Alterations and Additions.
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(a) Interior of Premises.
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1) By Tenant. Tenant may, during the term of this Lease, at
Tenant's expense, erect inside partitions, add to existing electric power
service, add telephone outlets, add light fixtures, install additional heating
or air conditioning or make other changes or alterations as Tenant may desire.
Any changes or alterations in excess of $20,000.00 shall require the prior
written approval of Landlord which shall not be unreasonably withheld. Upon
termination of this Lease, Tenant may remove all such fixtures, equipment,
additions or alterations and Landlord shall likewise have the option to require
Tenant to remove any or all such fixtures, equipment, additions or alterations;
provided, however, in either case, Landlord may, solely at its discretion,
require Tenant to restore the Leased Premises to the condition existing
immediately prior to the change or installation, normal wear and tear excepted,
all at Tenant's sole cost and expense. All restoration work shall be done in a
good and workmanlike manner and shall consist of new materials unless agreed to
otherwise by Landlord, and upon completion, must be approved by Landlord and by
the Building Inspector.
2) By Landlord. In the performance of the recitals herein,
Landlord, a% Landlord's expense, shall remodel the Premises in accordance with
the "Schedule of Tenant Finish to be Provided by Landlord," as set forth in
Exhibit A and attached hereto and project drawings as identified in "Schedule of
Project Drawings" as set forth in Exhibit B. Notwithstanding any provision to
the contrary in this Lease, the base lease rate set forth in 4(a) above shall be
reduced to $8.00 per sq. ft., on an annualized
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basis from the commencement date until substantial completion of all of the
tenant finish items set forth in Exhibit A; provided, however, that if
substantial completion of al' of such tenant finish items is not achieved by
August 14, 1991, then the base lease rate set forth in 4(a) above shall be
reduced to $8.00 per sq. ft., on an annualized basis, for the portion of the
Premises occupied by Tenant until substantial completion of all of the tenant
finish items set forth in Exhibit A and the base lease rate set forth in 4(a)
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above shall be reduced to $0.00 per sq. ft., on an annualized basis, for the
portion of the Premises not occupied by Tenant until the earlier of substantial
completion of all of the tenant finish items set forth in Exhibit A or the date
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of Tenant's reoccupancy and use of substantially all of the premises for its
business activities. Landlord shall warrant and shall, at its sole cost and
expense, be responsible for any repair and maintenance expense incurred for the
entire heating, ventilation and air conditioning system of the Building for a
period of one year following the substantial completion of all of the tenant
finish items set forth in Exhibit A. The parties will use best efforts to
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coordinate the tenant finish work to minimize interruption to Tenant's daily
business activities while accommodating Landlord's reasonable request to allow
for orderly progression of work.
(b) Exterior of Premises. Landlord must approve in writing any
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addition, change or alteration to the exterior of the Premises and any signs to
be placed on the Premises by Tenant, regardless of size or value. Prior to the
cutting of any holes in the roof or any exterior surfaces or prior to any work
being performed or any equipment being installed on the roof by Tenant, the
prior written approval of Landlord shall be obtained by Tenant. All roof or
other repairs necessitated by the change shall be the responsibility and at the
cost of Tenant.
10. Repairs.
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(a) By taking possession of the Premises, Tenant shall be deemed to
have accepted the Premises as being in good, sanitary order, condition and
repair except as noted in 9(a) (2) above. Tenant shall, at Tenant's sole cost
and expense, keep %he Premises in good condition and repair, ordinary wear and
tear excepted. Tenant shall, upon the expiration or voluntary or involuntary
termination of this Lease, surrender the Premises to the Landlord in good
condition, ordinary wear and tear and damage from causes beyond the reasonable
control of Tenant excepted. If the Premises are not returned in good condition,
Landlord shall be entitled to pass on a reasonable charge, in an amount equal to
the actual cost of any cleaning, repairing and replacing necessary to restore
the Premises to good condition, so long as Landlord has provided the work called
for in 9(a) (2) above.
(b) Notwithstanding the foregoing, Landlord shall at its sole cost and
expense be responsible for any repairs, maintenance
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and replacement in the structural portions of the Building, including the
structural portions of the roof (defined as supporting columns, walls, joists
and decking) and exterior walls, unless caused in part or in whole by the act,
neglect, fault or omission of any duty by the Tenant, its agents, servants,
employees, and invitees, in which case the Tenant shall at Tenant's sole cost
and expense, make such repairs and replacements as are necessary to maintain
such structural portions in a good condition.
(c) Tenant shall, at Tenant's expense be responsible for making
repairs and maintaining, in addition to those required under paragraph 6(c)(ii),
the electrical systems of the Building and the built-up portion of the roof
(which shall be limited to shingles, felt, tar, insulating materials, asphalt
and gravel components, layered membranes, or other similar non-structural
roofing systems). Landlord may inspect the Premises from time to time to
determine whether Tenant has performed the obligations in this paragraph 10(c)
to Landlord's satisfaction. Landlord may make a list of repairs and maintenance
which Tenant has not performed and deliver that list to Tenant. Tenant shall
promptly effect the repairs or maintenance required by Landlord. If Tenant has
not completed the items within thirty (30) days of receipt of Landlord's written
notice, Landlord may effect the repairs and maintenance at reasonable cost and
immediately xxxx Tenant. Tenant shall remit any sums due on the xxxx within give
(5) days of its receipt. 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 making any repairs, alterations or improvements in or about any
portion of the Building or the Premises or to fixtures, appurtenances or
equipment therein.
11. Liens. Tenant shall keep the Premises and the property on which the
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Premises are situated, free from any liens arising out of any work performed,
materials furnished or obligations incurred by Tenant. If any lien is placed
upon the Premises, or any part thereof, Landlord may require, at Landlord's sole
option, that Tenant shall provide to Landlord, at Tenant's sole cost and
expense, a bond in an amount equal to one and one-half (1-1/2) times the amount
of the lien. Alternatively, Landlord may pay off any lien on the Premises after
giving Tenant 15 days' notice, if Tenant does not provide said bond and pass the
cost back to Tenant the following month as additional rent.
12. Assignment and Subletting.
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(a) This Lease shall not be assigned nor shall any part of the
Premises be sublet without Landlord's prior written consent, which consent shall
not be unreasonably wwithheld. If Tenant should desire to assign this Lease or
sublet the Premises or any part thereof, Tenant shall give Landlord appropriate
written notice of its desire at least thirty (30) days in advance of the date on
which Tenant desires to make such assignment or sublease. Landlord
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shall then have a period of twenty (20) days following receipt of such notice
within which to notify Tenant in writing whether the assignment or subletting is
acceptable to Landlord, provided, however, that Landlord's approval shall not be
unreasonably withheld. If Landlord should fail to notify Tenant in writing of
whether Landlord elects to approve or refuse the assignment or sublease within
said twenty (20) day period, Landlord shall be deemed to have consented to the
proposed assignment or sublease. No assignment or subletting by Tenant shall
relieve Tenant of any obligation under this Lease. Any attempted assignment or
sublease by Tenant in violation of the terms and covenants of this paragraph
shall be void. Any consent by Landlord to a particular assignment or sublease
shall not constitute Landlord's consent to any other or subsequent assignment or
sublease.
(b) If Tenant is a corporation, then any transfer of this Lease by
merger or consolidation, or sale of stock shall constitute an assignment for
purposes of this Lease to which Landlord hereby consents.
13. Hold Harmless.
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(a) Indemnification and Defense. Tenant shall indemnify and hold
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harmless Landlord against and from any and all claims arising from Tenant's use
of the Premises for the conduct of its business or from any activity, work, or
other thing done, permitted or suffered by the Tenant in or about the Premises.
Each party shall further indemnify and hold harmless the other against and from
any and all claims arising from any breach or default in the performance of any
obligation on the indemnifying party's part to be performed under the terms of
this Lease, or arising from any act or negligence of such party, or any OFFICER,
AGENT, EMPLOYEE, GUEST, OR INVITEE OF SUCH PARTY, AND FROM all costs, attorneys'
fees, expenses and liabilities incurred resulting from any such claim or any
action or proceeding. In any case, action or proceeding brought against the
indemnified party by reason of any above claim, the indemnifying party shall
defend the claim at the indemnifying party's expense through legal counsel
reasonably satisfactory to the indemnified party. Tenant, as a material part of
the consideration to Landlord, assumes all risk of damage to property or injury
to persons, in, upon or about the Premises, from any cause other than Landlord's
negligence, and tenant hereby waives all claims in respect t. hereof against
Landlord.
(B) PROPERTY AND OTHER DAMAGE. Landlord or its agents shall not be
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liable for any damage to property entrusted to employees of the Tenant, nor for
loss or damage to any property by theft or otherwise, nor for any injury to or
damage to persons or property resulting from fire, explosion, toxic waste,
falling plaster, steam, gas, electricity, water or rain which may leak from any
part of the Building or from the pipes, appliances or plumbing
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works therein or from the roof, street or subsurface or from any other place
resulting from dampness or any other cause whatsoever, unless caused by the
willful acts, negligence or misconduct of Landlord, its agents, servants or
employees. Landlord or its agents shall not be liable for interference with the
light or other incorporeal hereditaments, loss of business by Tenant, nor shall
Landlord be liable for any latent defect in the Premises. Tenant shall give
prompt notice to Landlord in case of fire or accidents in or on the Premises.
14. Subrogation. As long as their respective insurers so permit, Landlord
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and Tenant hereby mutually waive their respective rights of recovery against
each other for any loss insured by fire, extended coverage and other property
insurance policies existing for the benefit of the respective parties. Each
party shall obtain any special endorsements, if required by their insurer to
evidence compliance with this waiver.
15. Liability Insurance. Tenant shall, at Tenant's expense, obtain and
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keep in force during the term of this Lease a policy of comprehensive public
liability insurance insuring Landlord and Tenant against any liability arising
out of the ownership, use, occupancy or maintenance of the Premises and all
areas appurtenant thereto, in an amount of not less than $1,000,000 for injury
or death of one person and $5,000,000 for more than one person plus property
damage of not less than $100,000. The limit of said insurance shall not,
however, limit the liability of the Tenant hereunder except under Paragraph 14
above. Tenant may carry the insurance under a blanket policy, providing,
however, said insurance by Tenant shall have a Landlord's protective liability
endorsement attached thereon. If Tenant shall fail to procure and maintain said
insurance, Landlord may, but shall not be required to, procure and maintain
same, but at the expense of Tenant. Insurance required hereunder shall be in
companies rated A+AAA or better in "Best's Insurance Guide." Tenant shall
deliver to Landlord prior to occupancy of the Premises copies of policies of
liability insurance required herein or certificates evidencing the existence and
amounts of such insurance with loss payable clauses satisfactory to Landlord. No
policy shall be cancellable or subject to reduction of coverage except after ten
(10) days' prior written notice to Landlord. All such policies shall be written
as primary policies not contributing with and not in excess of coverage which
Landlord may carry.
16. Services and Utilities.
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(a) Except for negligent workmanship done by Landlord during
construction, Landlord shall not be liable for any damages, and Tenant shall not
be entitled to any reduction of rental by reason of failure of any utility
service to furnish utilities when such failure is caused by accident, breakage,
repairs, strikes, lockouts or other labor disturbances or labor disputes of any
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character, or by any other cause, similar or dissimilar, beyond the reasonable
control of Landlord. Landlord shall not be liable under any circumstances for a
loss of or injury to property, however occurring, through or in connection with
or incidental to failure to furnish any of the foregoing.
(b) To the extent Tenant has incurred damages from the above, Landlord
shall pass through any monies recovered under a claim against a manufacturer's
warranty which was not used to repair and restore the warrantled equipment.
17. Personal Property Taxes. Tenant shall pay directly, or cause to be
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paid, Before delinquency, any and a,1 taxes levied or assessed and which become
payable during the Lease term upon all Tenant's leasehold improvements,
equipment, furniture, fixtures and personal property located in the Premises.
18. Title of Landlord. Landlord covenants that as of the date hereof there
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are no liens upon its estate other than (a) the effect of covenants, conditions,
restrictions, easements, mortgages, trust deeds, encumbrances and rights of way
of record: (b) the effect of any zoning laws and (c) general and special taxes
not delinquent.
19. Holding Over. If Tenant remains in possession of the Premises or any
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part thereof after the expiration of the term hereof, without the express
written consent of Landlord, such occupancy shall be a tenancy from month to
month at one and one half times the rental rate as was in effect during the last
month of the term, plus all other charges payable under this Lease, and shall be
subject to all the other terms of this Lease.
20. Entry By Landlord.
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(a) Landlord reserves and shall at any and all times have the right to
enter the Premises, inspect the same, and to perform any service to be provided
by Landlord to Tenant, to submit said Premises to prospective purchasers or
tenants, to post notices of non-responsibility, and to alter, improve or repair
the Premises and any portion of the Building which is part of the Premises that
Landlord may deem necessary or desirable, without abatement of rent. This right
shall also include Landlord's right to enter the premises for the purpose of
remodeling and repair as set forth elsewhere herein. Landlord may for that
purpose erect scaffolding and other necessary structures where reasonably
required by the character of the work to be performed, providing that the
entrance to the Premises shall not be blocked, and further providing that the
business of the Tenant shall not be interfered with unreasonably. Tenant hereby
waives any claim for damages or for any injury or inconvenience to or
interference with Tenant's Business, any loss of occupancy or quiet enjoyment of
the Premises, and any other loss occasioned thereby.
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(b) Landlord shall have the right to approve the weight, size and
location of safes and other heavy equipment and articles in and about the Leased
Premises.
(c) Security within the Leased Premises is solely the responsibility
of the Tenant. The Landlord shall bear no responsibility for loss or damage due
to the Leased Premises or Tenant's furnishings, equipment supplies or fixtures
as a result of theft or vandalism.
(d) Upon Landlord's request, Tenant shall give Landlord reasonably
prompt access to the Building and all its parts for purposes of inspection,
repair or other reasonable purposes. Any entry to the Premises obtained by
Landlord for such purposes by any reasonable means shall not be construed or
deemed to be a forcible or unlawful entry into, or a detainer of, the Premises,
or an eviction of Tenant from the Premises.
21. Reconstruction.
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(a) If the Premises or the Building which is a part of the Premises
are damaged by fire or other perils covered by extended coverage insurance,
Landlord agrees to forthwith repair the same: and this Lease shall remain in
full force and effect, except that Tenant shall be entitled to a proportionate
reduction of the rent while such repairs are being made, such proportionate
reduction shall be based upon the extent to which the making of such repairs
shall materially interfere with the business carried on by the Tenant in the
Premises. If the damage is due to the fault or neglect of Tenant or its
employees, there shall be no abatement of rent.
(b) If the Premises or the Building which is a part of the Premises
are damaged as a result of any cause other than the perils covered by fire and
extended coverage insurance, then Landlord shall forthwith repair the same,
provided the extent of the destruction be less than twenty (20%) percent of the
then full replacement cost of the Premises or the Building which is part of the
Premises. If the Premises or the Building is destroyed to an extent greater than
twenty (20%) percent of the full replacement cost, Landlord shall have the
option: (1) to repair or restore such damage and this Lease shall continue in
full force and effect, but the rent shall be proportionately reduced as provided
in Section 21(a), or (2) give notice to Tenant, at any time within sixty (60)
days after the damage, terminating this Lease as of the date specified in the
notice, which date shall be no less than thirty (30) and no more than sixty (60)
days after the giving of the notice. If the notice is given, this Lease shall
expire and all interest of the Tenant in the Premises shall terminate on the
date so specified in such notice and the Rent, reduced by a proportionate
amount, based upon the extent, if any, to which such damage materially
interfered with the business carried on by the
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Tenant in the Premises, shall be paid up to date of the termination.
(c) Notwithstanding anything to the contrary contained in this Section
21, Landlord shall not have any obligation to repair, reconstruct or restore the
Premises when the damage resulting from any casualty covered under this Section
occurs during the last twelve (12) months of the term of this Lease.
(d) Landlord shall not be required to repair any injury or damage by
fire or other cause, or to make any repairs or replacements of any panels,
decoration, office fixtures, railings, floor covering, partitions, or any other
property installed in the Premises by Tenant.
(e) The Tenant shall not be entitled to any compensation or damages
from Landlord for loss of the use of the whole or any part of the Premises,
Tenant's personal property or any inconvenience or annoyance occasioned by such
damage, repair, reconstruction or restoration.
22. Default. The occurrence of any one or more or the following events
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shall constitute a material default and breach of this Lease by Tenant:
(a) The vacating or abandonment of the Premises by Tenant.
(b) The failure by Tenant to make any payment of rent or any other
payment required to be made by Tenant under this Lease, as and when due, if the
failure shall continue for a period of three (3) days after Tenant's receipt of
written notice of the amount and date due.
(c) The failure by Tenant to observe or perform any of the covenants,
conditions or provisions of this Lease other than described in Section 22(b)
above, if such the failure continues for a period of thirty (30) days after
written notice is given by Landlord to Tenant; provided, however, that if the
nature of Tenant's default is such that more than thirty (30) days are
reasonably required for its cure, then Tenant shall not be deemed to be in
default if Tenant commences such cure within the thirty (30) day period and
continuously and diligently prosecutes such cure to completion.
23. Remedies In Default. Upon any default or breach by Tenant, Landlord
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may, at its option, at any time with or without notice or demand and without
limiting Landlord in the exercise of a right or remedy which Landlord may have
by reason of such default or breach, elect to:
(a) Terminate Tenant's right to possession of the
Premises by any lawful means, in which case this Lease shall terminate and
Tenant shall immediately surrender possession of the Premises to Landlord.
Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant's default including, but not limited to, the costs
actually incurred in recovering possession and the amount by which the unpaid
rent for the balance of the lease term after the default exceeds the amount
Landlord receives, if any, from subsequent tenants upon the exercise of
reasonable efforts to relet the Premises. Unpaid installments of rent or other
sums shall bear interest from the date due at the rate of one and one-half (1-
1/2%) percent per month (18% per annum) until paid. If Tenant abandons the
Premises, Landlord shall have the option of (a) taking possession of the
Premises and recovering from Tenant t-he amount specified in this paragraph, or
(b) proceeding under the other provisions of this Section 23; or
(b) Maintain Tenant's right to possession, in which case this Lease
shall continue in effect whether or not Tenant abandons the Premises. In such
event Landlord shall be entitled to enforce all of Landlord's rights and
remedies under this Lease, including the right to recover the rent as it becomes
due. No re-entry or taking possession of the premises by Landlord shall be
construed as an election to terminate the Lease unless a notice of such
intention to terminate be given to Tenant. Notwithstanding any such reletting on
behalf of the Tenant without termination, the Landlord shall have the right at
any time after reletting to elect to terminate the Lease and to proceed under
the provisions of subsection (a) with regard to an award for reserved rent.
Interest on past due rent shall accrue at a rate equal to one and one half (1-
1/2%) percent per month (18% per year).
(c) If Tenant defaults or breaches this Lease, all of Tenant's
fixtures, furniture, equipment, improvements, additions, alterations and other
personal property shall remain on the Premises. During the period of default,
Landlord shall have the right to take the exclusive possession of such items and
to use them, rent or charge free, until all defaults are cured. At Landlord's
option, at any time Tenant is in default during the term of this Lease, Landlord
may require Tenant to immediately remove all or a portion of such items in a
manner which restores all or a portion of the Leased Premises (at Landlord's
discretion) to the condition existing as of the commencement of this Lease. If
Tenant fails to comply with this removal requirement, Landlord may employ
persons to accomplish the removal and add the costs incurred to the rent owed by
Tenant.
(d) In considerstion of the mutual benefits arising under this Lease,
Tenant hereby grants to Landlord a lien and security interest, for collection of
rent and all additional charges, on and against all personal property of Tenant
from time to time situated on the Premises. The lien shall secure the
13
payment of all rent and additional charges payable by Tenant to Landlord under
this Lease. The provisions of this paragraph describing the lien and security
interest shall constitute a security agreement under the Uniform Commercial Code
so that Landlord shall have and may enforce a security interest on all property
of Tenant now or hereafter placed in or on the Premises, including but not
limited to all fixtures, machinery, equipment, invert:cry, furnishings and other
articles of personal property now or hereafter placed in or upon the Premises by
Tenant. Tenant agrees to execute as debtor such financing statement or
statements as Landlord may now or hereafter reasonably request in order that
such security interest or interests may be perfected pursuant to the Uniform
Commercial Code. Landlord, as a secured party, shall be entitled to all of the
rights and remedies afforded a secured party under the Uniform Commercial Code
in addition to and cumulative of the Landlord's liens and rights otherwise
provided by law or by the other terms and provisions of this Lease.
(e) Pursue any other remedy now or hereafter available to Landlord
under the laws or Judicial decisions of the State of Colorado.
24. Bankruptcy. Tenant agrees that if all or substantially all of
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Tenant's assets are placed in the hands of a receiver or trustee, and the
receivership or trusteeship continues for a period of ninety (90) days, or
longer, or if Tenant makes an assignment for the benefit of creditors or is
finally adjudicated as bankrupt, or if Tenant institutes any proceedings for
itself under the Bankruptcy Act as the Act now exists or under any future
amendment of the Act, or under any other act relating to the subject of
bankruptcy, wherein Tenant seeks to be adjudicated as bankrupt or to be
discharged of its debts or to effect a plan of liquidation, composition or
reorganization, or should any involuntary proceeding be filed against Tenant
under any such bankruptcy laws and such proceeding not be removed within ninety
(90) days, this Lease or any interest of Tenant in and to the Premises shall not
become an asset in any of such proceedings. Under all circumstances described in
this Section 25, Landlord may declare the Lease term ended and re-enter the
Premises, take possession and remove all persons. Tenant shall have no further
claims under this Lease other than for wrongful exercise of this right by
Landlord.
25. Eminent Domain. If more than twenty-five (25%) of the land area within
---------------
the Premises shall be taken or appropriated by any public or quasi-public
authority under the power of eminent domain, either party hereto shall have the
right, at its option, to terminate this Lease, and Landlord shall be entitled to
any and all income, rent, award, or any interest therein which may be paid or
made in connection with the public or quasi-public use or purpose, and Tenant
shall have no claim against Landlord for the value of
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any unexpired term of this Lease. If either (1) less than ten percent (10%) of
the land area within the Premises is taken, or (2) more than twenty-five (25%)
of the land area within the Premises is taken and neither party elects to
terminate the Lease, the rent shall be equitably reduced. Neither Landlord nor
Tenant shall have any claim against each other for the value of the unexpired
lease.
26. Offset Statement. Tenant shall at any time, upon not less than ten
-----------------
(10) days' prior written notice from Landlord, execute, acknowledge and deliver
to Landlord a statement in writing (a) certifying that this Lease is unmodified
and in full force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease as so modified, is in full force and
effect), and the date to which the rent and other charges are paid in advance,
if any, and (b) acknowledging that there are not, to Tenant's knowledge, any
uncured defaults on the part of the Landlord hereunder, or specifying such
defaults if any are claimed. Any such statement may be relied upon by any
prospective purchaser or encumbrancer of all or any portion of the real property
of which the Premises are a part. Landlord shall deliver a similar statement to
Tenant but not more often than once in any twelve month period.
27. Authority and Liability of Parties.
-----------------------------------
(a) Corporate Authority. If Tenant is a corporation, each individual
--------------------
executing this Lease on behalf of said corporation represents and warrants that
he is duly authorized to execute and deliver this Lease on behalf of the
corporation, in accordance with a duly adopted resolution of the board of
directors of the corporation or in accordance with the bylaws of the
corporation, and that this Lease is binding upon the corporation in accordance
with its terms. Tenant shall also, at the time of signing of this Lease, provide
Landlord with a copy of the corporate resolution and other necessary documents
as determined by Landlord which authorize Tenant to enter into this Lease.
(b) Partnerships. If the Landlord is a partnership, it is understood
-------------
and agreed that any claims by Tenant on Landlord shall be limited to the assets
of the partnership, and furthermore, Tenant expressly waives any and all rights
to proceed against the individual partners or the officers, directors or
shareholders of any corporate partner, except to the extent of their interest in
the partnership.
28. Further Instruments. Tenant agrees to respond to reasonable requests
--------------------
from Landlord to submit complete and accurate operating and profit and loss
statements to Landlord on a quarterly and fiscal year end basis and to
reasonably cooperate with Landlord's efforts from time to time to obtain
financing for the Premises.
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29. General Provisions.
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(a) Plats and Riders. All exhibits affixed to this Lease shall
-----------------
constitute a part of this Lease.
(b) Waiver. The waiver by Landlord cr Tenant of any term, covenant or
-------
condition contained in this Lease shall not be deemed to be a waiver of the
term, covenant or condition on any subsequent breach of the same or any other
term, covenant or condition. Any subsequent acceptance of rent by Landlord shall
not be deemed to be a waiver of any preceding breach by Tenant of any term,
covenant or condition of this Lease, other than the failure of the Tenant to pay
the particular rental obligation which was accepted, regardless of Landlord's
knowledge of the preceding breach at the time of the acceptance of the rent.
(c) Notices. All notices and demands which may or are required or
--------
permitted to be given by either party to the other under this Lease shall be in
writing. All notices and demands by the Landlord to the Tenant shall be sent by
certified or registered United States Mail, postage prepaid, addressed to the
Tenant at the Premises, or to such other place as Tenant may designate in a
notice to the Landlord. All notices and demands by the Tenant to the Landlord
shall be sent by certified or registered United States Mail, postage prepaid,
addressed to the Landlord in care of Xxxx Xxxxxxx, Xxxxxxx and Associates, 0000
Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, with a copy to Xxxx X. Xxxx, Xxxx &
XxXxxxx 0000 0xx Xx., Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000 or to such other
persons or places as the Landlord may designate in a notice to the Tenant. All
notices shall be deemed effective three (3) days after the date of the
registration or certification by the U.S. Post Office.
(d) Marginal Headings. The marginal headings, page numbers and
------------------
section titles to the Sections of this Lease are not a part of this Lease and
shall have no effect upon its construction or interpretation.
(e) Time. Time is of the essence of this Lease and each and all of
-----
its provisions in which performance is a factor.
(f) Successors and Assigns. The covenants and conditions of this
-----------------------
Lease, subject to the provisions as to assignment, apply to and bind the heirs,
successors, executors, administrators and assigns of the parties.
(g) Quiet Possession. Upon Tenant paying the rent and observing and
-----------------
performing all of the covenants, conditions and provisions on Tenant's part to
be observed and performed, Tenant shall have quiet possession of the Premises
for the entire Lease term, subject to all the provisions of this Lease.
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(h) Late Charges. Tenant hereby acknowledges that late payment by
-------------
Tenant to Landlord of rent or other sums due will cause Landlord to incur costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. The costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed upon Landlord by
terms of any mortgage or trust deed covering the Premises. Accordingly, if any
installment of rent or of a sum due from Tenant shall not be received by
Landlord or Landlord's designee within ten (10) days after the amount is due,
Tenant shall pay Landlord a late charge equal three percent (3%) multiplied by
the amount of past due sums. The parties agree that the late charges represent a
fair and reasonable estimate of the cost that Landlord will incur by reason of
the late payment by Tenant. Acceptance of such late charges by the Landlord
shall in no event constitute a waiver of Tenant's default with respect to such
overdue amount, nor prevent Landlord from exercising any of the other rights and
remedies granted under of this Lease or by operation of law, including
Landlord's right to collect interest on past due sums.
(i) Prior Agreements. This Lease contains all of the agreements of the
-----------------
parties regarding any matters covered or mentioned in this Lease, and no prior
agreements or understandings pertaining to any matters shall be effective for
any purpose. No provision of this Lease may be amended or added to except by an
agreement in writing signed by the parties or their respective successors in
interest. This Lease shall not be effective or binding on any party until fully
executed by both parties.
(j) Inability to Perform. This Lease including Landlord's and
---------------------
Tenant's obligations shall not be affected or impaired because either party is
unable to fulfill any of its obligations under this Lease or is delayed in doing
so, if such inability or delay is caused by reason of strike, labor troubles,
acts of God, or any other cause beyond their reasonable control.
(k) Attorneys' Fees. If any action or proceeding is brought by either
----------------
party against the other under this Lease, the prevailing party shall be entitled
to recover all costs and expenses including, but not limited to, reasonable
attorneys' fees.
(1) Sale of Premises by Landlord. If the Premises are sold, Landlord
-----------------------------
shall be and is hereby entirely freed and relieved of all liability under any
and all of its covenants and obligations contained in or derived from this Lease
arising out of any act, occurrence or mission occurring after the consummation
of such sale; and the purchaser, at such sale or any subsequent sale of the
Premises shall be required, without any further agreement between the parties or
their successors in interest or between the parties and any such purchaser, to
assume and agree to carry out any and all of the covenants and obligations of
the Landlord under this Lease.
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(m) Subordination. (1.) This Lease, at Landlord's option, shall be
--------------
subject and subordinate to the liens of any first lien mortgages or deeds of
trust in any amount or amounts whatsoever now or hereafter placed on or against
the land or improvements, or either thereof, of which the Premises are a part,
or on or against Landlord's interest or estate therein, without the necessity of
the execution and delivery of any further instruments on the part of Tenant to
effectuate such subordination. If any first lien mortgagee or trustee shall
elect to have this Lease prior to the lien of its mortgage or deed of trust and
shall give written notice thereof to Tenant, this Lease shall be deemed prior to
such mortgage or deed of trust, whether this Lease is dated prior or subsequent
to the date of said mortgage or deed of trust. This Lease shall not be subject
and subordinate to the liens of any junior mortgage or deed of trust without the
prior written consent of the holder of the first lien mortgage or deed of trust.
(2.) Tenant covenants and agrees to execute and
deliver upon demand without charge therefor, such further instruments evidencing
such subordination or non-subordination of this Lease to the lien of any such
mortgages or deeds of trust as may be required by Landlord.
(n) Name. Tenant shall not use the name of the Building or of the
-----
development in which the Building is situated for any purpose other than as an
address of the business to be conducted by the Tenant in the Premises; provided,
however, that Tenant shall be unrestricted in its use of the names "PVI" or
"Precision Visuals."
(o) Separability. Any provision of this Lease which shall prove to be
-------------
invalid, void or illegal shall in no way affect, impair or invalidate any other
provision hereof and such other provision shall remain in full force and effect.
(p) Cumulative Remedies. No remedy or election hereunder shall be
--------------------
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
(g) Choice of Law. This Lease shall be interpreted and governed by the
--------------
laws of the State of Colorado.
(r) Signs and Auctions. Tenant shall not place any sign upon the
-------------------
Premises or Building, except original mutually agreed upon signage, or conduct
any auction thereon without Landlord's prior written consent.
(s) Cure Rights. Landlord agrees to cooperate in any reasonable manner
------------
to permit Tenant to exercise Landlord's cure rights to any deeds of trust
granted by Landlord encumbering the Premises. Landlord shall have the first
right to execute any cure, but Tenant may require Landlord's cooperation and
cure at any time
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within the last five (5) days of the exercise of such rights. Landlord agrees to
give Tenant written notice of any event giving rise to such rights within a
reasonable time after such event.
(t) Warranty of Title. Landlord warrants to Tenant that it owns or
-----------------
otherwise has the right to grant the rights herein.
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IN WITNESS WHEREOF, the parties have executed this lease as of the date
hereof.
LANDLORD: PVI BUILDING INVESTORS,
a Colorado General Partnership
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------
General Partner
TENANT: PRECISION VISUALS, INC.
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Xxxxx X. Xxxxxx, CEO
ATTEST:
/s/ Xxxx Xxxxxx
-----------------------------------
Xxxx Xxxxxx, Secretary
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