Exhibit 10.6

 

BUILDING LEASE

 

1.             PARTIES. This Lease, dated as of this 7 day of July, 2001, is
made by and between DIKEOU REALTY (herein called “Landlord”) and 2222 INC.
(herein “Tenant”).

 

2.             BUILDING. Landlord does hereby lease to Tenant and Tenant hereby
leases from Landlord that certain space (herein called “Building”), having land
dimensions of approximately 50 feet in frontage by 125 feet in depth and located
at 1443-1447 Stout Street Denver, CO. The legal description of the property is
Lots 27-28, Block 131, East Denver Subdivision. Said Building is commonly known
as the Bradshaw Building with two retail bar/restaurants establishments located
on the ground level and a residential hotel on the 2nd and 3rd floors. This
Lease is subject to the terms, covenants and conditions herein set forth and the
Tenant covenants as a material part of the consideration for the Lease to keep
and perform each and all of said terms, covenants and conditions by it to be
kept and performed.

 

3.             USE. Tenant shall use the Building for hotel, restaurant and bar
for cabaret adult entertainment, and shall not use or permit the Building to be
used for any other purpose without the prior written consent of Landlord.

 

4.             MINIMUM RENT.

 

4.A. Tenant agrees to pay to Landlord as Minimum Rent without notice or demand,
the monthly sum of Twelve Thousand and no/100ths Dollars ($12,000.00), in
advance, on or before the first day of each and every successive calendar month
during months 1 through 36 of the Lease Term; the monthly sum of Fifteen
Thousand and no/100ths Dollars ($15,000.00) in advance, on or before the first
day of each and every successive calendar month during the months 37-72 of the
Lease Term; the monthly sum of Seventeen Thousand and no/100ths Dollars
($17.000.00) in advance, on or before the first day of each and every successive
calendar month during the months 73-120 of the Lease Term; the monthly sum of
Twenty Thousand and no/100ths Dollars ($20,000.00) in advance, on or before the
first day of each and every successive calendar month during the months 121-156
of the Lease Term; the monthly sum of Twenty-One Thousand and no/100ths Dollars
($21,000.00) in advance, on or before the first day of each and every successive
calendar month during the months 157-180 of the Lease Term.

 

The rental and term shall commence as follows:

 

           September 1, 2001

 

Rent for any period which is for less then one (1) month shall be a prorated
portion of the monthly installment herein based upon a thirty (30) day month.
Said rental shall be paid to Landlord, without deduction or offset, in lawful
money of the United States of America and at such place as Landlord may from
time to time designate in writing. Notwithstanding anything to the contrary
herein all payments are recognized to be payments as a gross lease payment
amount per square foot as it relates to the total amount paid.

 

4.B          MINIMUM RENT. Version 1. This paragraph has been intentionally
deleted.

 

4.B.         MINIMUM RENT. Version 2. This paragraph has been intentionally
deleted.

 

5.             TERM. The primary term of this Lease shall be fifteen (15) full
calendar years (hereinafter “Lease Term”). The parties hereto acknowledge that
certain obligations under various articles hereof may commence prior to the
Lease Term, i.e. construction, hold harmless, liability insurance, etc.; and the
parties agree to be Bound by these articles prior to commencement of the Lease
Term.

 

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6.             SECURITY DEPOSIT. Concurrently with Tenants execution of this
Lease, Tenant has deposited with Landlord a sum of twenty four thousand dollars
($24,000.00). Said sum shall be held by Landlord as security for the faithful
performance by Tenant of all the terms, covenants, and conditions of this Lease.
If Tenant defaults with respect to any provision of this Lease, including, but
not limited to the provisions relating to the payment of rent. Landlord may (but
shall not be required to) use, apply or retain all or any part of this security
deposit for the payment of any rent or any other sum in default, or for the
payment of any amount which Landlord may spend or become obligated to spend by
reason of Tenant’s default, or to compensate Landlord for any other loss or
damage which Landlord may suffer by reason of Tenant’s default. If any portion
of said deposit is so used or applied Tenants shall, within five (5) days after
written demand therefore, deposit cash with Landlord in an amount sufficient to
restore the security deposit to its original amount and Tenant’s failure to do
so shall be a default under this Lease. Landlord shall not be required to keep
this security deposit separate from its general funds, and Tenant shall not be
entitled to interest on such deposit If Tenant shall fully and faithfully
perform every provision of this Lease to be performed by it, the security
deposit or any balance thereof shall be returned to Tenant (or, at Landlord’s
option, to the last assignee of Tenants interest hereunder) within ten (10) days
following expiration of the Lease Term. In the event of termination of
Landlord’s interest in this Lease, Landlord shall transfer said deposit to
Landlord’s successor in Interest.

 

In the event that Tenant vacates its Building, or is evicted from its Building,
or in the event this Lease Terminates pursuant to default by Tenant, then
Landlord is hereby entitled to keep all of Tenant’s Security Deposit, if any, as
liquidated damages regardless of whether or not Tenant owes to Landlord any
money at this time. This paragraph shall in no way limit Landlord’s rights, to
collect any monies owed to Landlord by Tenant or otherwise.

 

7.             ADDITIONAL CHARGES.

 

7 A.         Percentage Rent This paragraph has been intentionally deleted.

 

7.B.         Adjustments

 

I. In addition to the Minimum Rent provided in Article 4 hereinabove, and
commencing at the same time as any rental commences under this Lease, Tenant
shall pay to Landlord the following items, herein called Adjustments:

 

(a) All real estate taxes, insurance premiums, and assessments on the Building,
including land, building, and improvements thereon. Said real estate taxes shall
include all real estate taxes and any and all assessments that are levied upon
and/or assessed against the Building, including any taxes which may be levied on
rents. Said insurance shall include all insurance premiums for fire, extended
coverage, liability, and any other insurance that Landlord deems necessary on
the Building.

 

(i) This paragraph has been intentionally deleted.

 

(ii) This paragraph has been intentionally deleted.

 

(iii) Any charges, utilities surcharges, or any other costs levied, assessed or
imposed by, or at the direction of, or resulting from statutes or regulations,
or interpretations thereof, promulgated by any governmental authority in
connection with the use or occupancy of the Building or the parking facilities
serving the Building.

 

II. Upon commencement of rental Landlord shall submit to Tenant a statement of
the anticipated monthly Adjustments, and Tenant shall pay these Adjustments on a
monthly basis concurrently with the payment of the Rent and on each succeeding
January. Tenant shall continue to make said monthly payments until notified by
Landlord of a change thereof. In the event the total of the monthly payments
which Tenant has made for the prior calendar year be less than the Tenant’s
actual share of such Adjustments then Tenant shall pay the difference in a lump
sum within ten days after receipt of such statement from Landlord and shall
concurrently pay the difference in monthly payments made in the then calendar
year and the amount of monthly payments which are then calculated as monthly
Adjustments based on the prior year’s experience.

 

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Any overpayment by Tenant shall be credited towards the monthly Adjustments next
coming due. Even though the term has expired and Tenant has vacated the
Building, when the final determination is made of Tenant’s share of said
Adjustments for the year in which this Lease terminates, Tenant shall
immediately pay any increase due over the estimated Adjustments previously paid
and, conversely, any overpayment made shall be immediately rebated by Landlord
to Tenant. Failure of Landlord to submit statements as called for herein shall
not be deemed to be a waiver of Tenant’s requirement to pay sums as herein
provided.

 

8.             USES PROHIBITED. Tenant shall not do or permit anything to be
done in or about the Building nor bring or keep anything therein which is not
within the permitted use of the Building which will in any way increase the
existing rate of or affect any fire or other insurance upon the Building or any
of its contents, or cause a cancellation of any insurance policy covering said
Building or any part thereof or any of its contents. Tenant shall not do or
permit anything to be done In or about the Building which will in any way
obstruct or interfere with the rights of other tenants or occupants of the
Building or injure or annoy them or use or allow the Building to be used for any
improper, immoral, unlawful or objectionable purpose; nor shall Tenant cause,
maintain or permit any nuisance in, on or about the Building. Tenant shall not
commit or allow to be committed any waste in or upon the Building.

 

9.             COMPLIANCE WITH LAW. Tenant shall not use the Building, or permit
anything to be done in or about the Building, which will in any way conflict
with any law, statute, ordinance or governmental rule or regulation now in force
or which may hereafter be enacted or promulgated. Tenant shall, at Its sole cost
and expense, promptly comply with all laws, statutes, ordinances and
governmental rules, regulations or requirements now in force or which may
hereafter be in force and with the requirements of any board of fire
underwriters or other similar bodies now or hereafter constituted relating to or
affecting the condition, use or occupancy of the Building, excluding structural
changes not related to or affected by Tenant’s improvements or acts. The
judgment of any court of competent jurisdiction or the admission of Tenant in
any action against Tenant, whether Landlord be a party thereto or not, that
Tenant has violated any law, statute, ordinance or governmental rule, regulation
or requirement, shall be conclusive of that fact as between the Landlord and
Tenant.

 

10.           ALTERATIONS AND ADDITIONS. Tenant shall not make or allow to be
made any alterations, additions or Improvements to or of the Building or any
part thereof without first obtaining the written consent of Landlord and any
alterations, additions or improvements to or of said Building, including, but
not limited to, wall covering, paneling and built-in cabinet work, but excepting
movable furniture and trade fixtures, shall at once become a part of the really
and belong to the Landlord and shall be surrendered with the Building. In the
event Landlord consents to the making of any alterations, additions or
improvements to the Building by Tenant, the same shall be made by Tenant at
Tenant’s sole cost and expense. Upon the expiration or sooner termination of the
term hereof, Tenant shall, upon written demand by Landlord at Tenant’s sole cost
and expense, forthwith and with all due diligence, remove any alterations,
additions, or improvements made by Tenants, designated by Landlord to be
removed, and Tenant shall, forthwith and will all due diligence, at its sole
cost and expense, repair any damage to the Building caused by such removal.
Landlord hereby grants Tenant the right to remodel the Building at Tenant’s sole
cost and expense, provided that (i) Tenant obtain Landlord’s prior written
consent thereto, and (ii) Tenant shall keep the Building free from any and all
liens associated with any work performed, materials furnished or obligations
incurred by or on behalf of Tenant. In the event a lien is filed on the Building
for which Tenant is liable, Tenant shall have the right to secure a bond in
favor of Landlord in the amount of such lien within 15 days of its filing.

 

11            REPAIRS.

 

11.A..      By entry hereunder, Tenant shall be deemed to have accepted the
Building as being in good, sanitary order, condition and repair. Tenant shall,
at Tenant’s sole cost and expense, keep the Building and every part thereof in
good condition and repair including without limitation, the maintenance,
replacement and repair of any storefront, doors, window casements, glazing,
heating and air-conditioning system (Tenant shall obtain a service contract for
repairs and maintenance of said system, said maintenance contract to conform to

 

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the requirements under the warranty, if any, on said system), plumbing, pipes,
electrical wiring and conduits. Tenant shall, upon the expiration or sooner
termination of this Lease hereof, surrender the Building to the Landlord in good
condition, broom clean, ordinary wear and tear and damage from causes beyond the
reasonable control of Tenant excepted. Any damage to adjacent Building caused by
Tenant’s use of the Building shall be repaired at the sole cost and expense of
Tenant

 

11.B.  Notwithstanding the provisions of Article 11A hereinabove. Tenant shall
also repair and maintain at Tenant’s sole cost and expense the structural
portions of the Building, including the exterior walls and roof. There shall be
no abatement of rant and no liability of Landlord by reason of any injury to or
interference with Tenant’s business arising from the making of any repairs,
alterations or improvements in or to any portion of the Building or the Building
or in or to fixtures, appurtenances and equipment therein.

 

12.           LIENS. Tenant shall keep the Building and the property in which
the Building are situated free from any liens arising out of any work performed,
materials furnished or obligations incurred by or on behalf of Tenant. Landlord
may require, at Landlord’s sole option, that Tenant shall provide to Landlord,
at Tenant’s sole cost and expense, a lien and completion bond in an amount equal
to one and one-half (1½) times the estimated cost of any improvements,
additions, or alterations in the Building which the Tenant desires to make, to
insure Landlord against any liability for mechanics’ and materialmen’s liens and
to insure completion of the work. Tenant Is requested to obtain written approval
from Landlord for any improvements in excess of $5,000,000. Landlord hereby
grants the Tenant the right to remodel the Leased Building at Tenant’s sole cost
and expense.

 

13.           ASSIGNMENT AND SUBLETTING. Tenant shall not either voluntarily, or
by operation of law, assign, transfer, mortgage, pledge, hypothecate or encumber
this Lease or any interest therein, and shall not sublet the said Building or
any part thereof, or any right or privilege appurtenant thereto, or allow any
other person (the employees, agents, servants and invitees of Tenant excepted)
to occupy or use the said Building, or any portion thereof, without first
obtaining the written consent of Landlord, which consent shall not be
unreasonably withheld. A consent to one assignment, subletting, occupation or
use by arty other person shall not be deemed to be a consent to any subsequent
assignment, subletting, occupation or use by any other person. Consent to any
such assignment or subletting shall in no way relieve Tenant of any liability
under this Lease. Any such assignment or subletting without such consent shall
be void and shall, at the option of the Landlord, constitute a default under the
terms of this Lease.

 

                In the event that Landlord shall consent to a sublease or
assignment hereunder. Tenant shall pay Landlord reasonable fees, not to exceed
Three Hundred and no/100ths ($300.00) Dollars, incurred in connection with the
processing of documents necessary to giving of such consent.

 

14.           HOLD HARMLESS. Tenant shall indemnify and hold harmless Landlord
against and from any and all claims arising from Tenant’s use of the Building or
from the conduct of its business or from any activity, work, or other things
done, permitted or suffered by the Tenant In or about the Building, and shall
further indemnify and hold harmless Landlord against and from any and all claims
arising from any breach or default In the performance of any obligation on
Tenant’s part to be performed under the terms of this Lease, or arising from any
act or negligence of the Tenant, or any officer, agent, employee, guest, or
invitees of Tenant, and from ail costs, attorney’s fees, and liabilities
incurred in or about the defense of any such claim or any action or proceeding
brought thereon and in case any action or proceeding be brought against Landlord
by reason of such claim, Tenant upon notice from Landlord shall defend the same
at Tenant’s expense by counsel reasonably satisfactory to Landlord, Tenant, as a
material part of the consideration to Landlord, hereby assumes all risk of
damage to property or injury to persons in, upon or about the Building, from any
cause other than Landlord’s negligence; and Tenant hereby waives all claims in
respect thereof against Landlord.  Tenant shall give prompt notice to Landlord
in case of casualty or accidents in the Building. Landlord or its agents shall
not be liable for any loss or damage to persons or properly resulting from fire,
explosion, falling plaster, steam, gas, electricity, water or rain which may
leak from any part of the Building or from the pipes, appliances or plumbing
works therein or from the roof, street or subsurface or from any other place
resulting

 

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from dampness or any other cause whatsoever, unless caused by or due to the
negligence of Landlord, its agents, servants or employees. Landlord or its
agents shall not be liable for interference with the light, air, or for any
latent defect in the Building.

 

15.           SUBROGATION. As long as their respective insurers so permit,
Landlord 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 apply to their insurers to obtain said waivers. Each party
shall obtain any special endorsements, if required by their insurer to evidence
compliance with the aforementioned waiver.

 

16.           LIABILITY INSURANCE. Tenant shall, at Tenant’s expense, obtain and
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 Building and all
areas appurtenant thereto. Such insurance shall be in the amount of not less
than $1,000,000.00 for injury or death of one person in any one accident or
occurrence and in the amount of not less than $1,000,000.00 for injury or death
of more than one person in any one accident or occurrence. Tenant shall
reimburse Landlord to insure Landlord and Tenant against liability for property
damage of at least $2,000,000.00. The limit of any such insurance shall not,
however, limit the liability of the Tenant hereunder. 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 AAA or better in “Best’s Insurance Guide”.
Tenant shall deliver to Landlord, prior to right of entry, 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 cancelable or subject to reduction of coverage. All such
policies shall be written as primary policies not contributing with and not in
excess of coverage which Landlord may carry.

 

17.           UTILITIES. Tenant shall pay for all water, gas, heat, light,
power, sewer charges, telephone service and ail other services and utilities
supplied to the Building, together with any taxes thereon. If any such services
are not separately metered to Tenant, Tenant shall pay a reasonable proportion
to be determined by Landlord of all charges jointly metered with other Building.

 

18.           PERSONAL PROPERTY TAXES. Tenant shall pay, or cause to be paid,
before delinquency any and all taxes levied or assessed and which become payable
during the term hereof upon all Tenant’s leasehold improvements, equipment,
furniture, fixtures, and any other personal properly located in the Building. In
the event any or all of the Tenant’s leasehold improvements, equipment,
furniture, fixtures and other personal property shall be assessed and faxed with
the real property, Tenant shall pay to Landlord its share of such taxes within
ten (10) days after delivery to Tenant by Landlord of a statement in writing
setting forth the amount of such taxes applicable to Tenant’s property.

 

19.           RULES AND REGULATIONS. Tenant shall faithfully observe and comply
with the reasonable rules and regulations that Landlord shall from time to time
promulgate and/or modify. The rules and regulations shall be binding upon the
Tenant upon delivery of a copy of them to Tenant Landlord snail not be
responsible to Tenant for the non performance of any said rules and regulations
by any other tenants or occupants.

 

20.           HOLDING OVER. If Tenant shall hold over after the expiration of
the Lease Term, without written agreement providing otherwise, Tenant shall be
deemed to be a tenant from month to month, at a monthly rental, payable in
advance, equal to two hundred percent (200%) of the Basic Rent, Additional Rent,
Parking Fees and other amounts last payable by Tenant under this Lease (but, In
any event, not less than the rental value of the Demised Building), and Tenant
shall be bound by all of the other terms, covenants and agreements of this
Lease. Alternatively, at the election of Landlord expressed In a written notice
to Tenant and not otherwise, such holding over shall constitute a renewal of
this Lease for one (1) year, with Basic Rent in the amount of two hundred
percent (200%) of the Basic Rent payable by Tenant in the immediately preceding
Lease Year (but, in any event, not less than the rental value of the Demised
Building), and Tenant

 

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shall be bound by all other terms, covenants and agreements of this Lease,
including, without limitation, all terms related to Additional Rent. Nothing
contained herein shall be construed to give Tenant the right to hold over at any
time, and Landlord may exercise any and all remedies at Saw or in equity to
recover possession of the Demised Building, as well as any damages incurred by
Landlord due to Tenant’s failure to vacate the Demised Building and deliver
possession to Landlord as herein provided.

 

21.           ENTRY BY LANDLORD. Landlord reserves, and shall at any and all
times have, the right to enter the Building to inspect the same, to submit said
Building to prospective purchasers or tenants, to post notices of
non-responsibility, to post “For Lease” signs in Building’ windows six
(6) months prior to the expiration of the term or any option terms, to repair
the Building and any portion of the Building of which the Building are a part
that Landlord may deem necessary or desirable, without abatement of rent, and
may for that purpose erect scaffolding and other necessary structures where
reasonably required by the character of the work to be performed, always
providing that the entrance to the Building shall not be unreasonably blocked
thereby, 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 Building, and any other loss occasioned
thereby. For each of the aforesaid purposes, Landlord shall at all times have
and retain a key with which to unlock all of the doors in, upon and about the
Building, excluding Tenant’s vaults, safes and files, and Landlord shall have
the right to use any and all means which Landlord may deem proper to open said
doors in an emergency, in order to obtain entry to the Building without
liability to Tenant except for any failure to exercise due care for Tenant’s
property and any entry to the Building obtained by Landlord by any of said
means, or otherwise, shall not under any circumstances be construed or deemed to
be a forcible or unlawful entry into, or a detainer of, the Building, or an
eviction of Tenant from the Building or any portion thereof.

 

22.           TENANTS DEFAULT. The occurrence of any one or more of the
following events shall constitute a default and breach of this Lease by Tenant

 

22.A.       The vacating or abandonment of the Building by Tenant.

 

22.B. The failure by Tenant to make any payment of rent or any other payment
required to be made by Tenant hereunder, as and when due, where such failure
shall continue for a period of five (5) days after written notice thereof by
Landlord to Tenant.

 

22.C. The failure by Tenant to observe or perform any of the covenants,
conditions, or provisions of this Lease to be observed or performed by the
Tenant, other than described in Article 22.B., above, where such failure shall
continue for a period of thirty (30) days after written notice hereof 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
said thirty (30) days period and thereafter diligently prosecutes such cure to
completion.

 

22.D. The making by Tenant of any genera! assignment or general arrangement for
the benefit of creditors; or the filing by or against Tenant of a petition to
have Tenant adjudged a bankrupt, or a petition or reorganization or arrangement
under any law relating to bankruptcy (unless, in the case of a petition filed
against Tenant, the same is dismissed within sixty (60) days); or the
appointment of a trustee or a receiver to take possession of substantially all
of Tenant’s assets located at the Building or of Tenants interest in this Lease,
where possession is not restored to Tenant within thirty (30) days; or the
attachment, execution or other judicial seizure of substantially all of Tenant’s
assets located at the Building or of Tenant’s Interest in this Lease, where such
seizure is not discharged in thirty (30) days.

 

23.           REMEDIES IN DEFAULT. In the event of any such default or breach by
Tenant, Landlord may at any time thereafter, in his sole discretion, 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:

 

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23. A. Terminate Tenant’s right to possession of the Building by any lawful
means, in which case this Lease shall terminate and Tenant shall immediately
surrender possession of the Building to Landlord. In such event Landlord shall
be entitled to recover from Tenant ail damages incurred by Landlord by reason of
Tenant’s default including, but not limited to, the cost of recovering
possession of the Building; expenses of reletting, including necessary
renovation and alteration of the Building; reasonable attorney’s fees’ the worth
at the time of award by the court having jurisdiction thereof of the amount by
which the unpaid rent and other charges and Adjustments called for herein for
the balance of the term after the time of such award exceeds the amount of such
loss for the same period that Tenant proves could be reasonably avoided; and
that portion of any leasing commission paid by Landlord and applicable to the
unexpired term of this Lease. Unpaid installments of rent or other sums shall
bear interest from the date due at the maximum legal rate; or

 

23.B. Maintain Tenant’s right to possession, in which case this Lease shall
continue in effect whether or not Tenant shall have abandoned the Building. 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 and any other
charges and Adjustments as may become due hereunder; or

 

23.C. Pursue any other remedy now or hereafter available to Landlord under the
laws or judicial decisions of the State in which the Building are located.

 

24.           DEFAULT BY LANDLORD. Landlord shall not be in default unless
Landlord fails to perform obligations required of Landlord within a reasonable
time, but in no event later than thirty (30) days after written notice by Tenant
to Landlord and to (he holder of any first mortgage or deed of trust covering
the Building whose name and address shall have (heretofore been furnished to
Tenant in writing, specifying wherein Landlord has failed to perform such
obligation; provided, however, that if the nature of Landlord’s obligation is
such that more than thirty (30) days are required for performance then Landlord
shall not be in default if Landlord commences performance within such thirty
(30) day period and thereafter diligently prosecutes the same to completion. In
no event shall Tenant have the right to terminate this Lease as a result of
Landlord’s default and Tenant’s remedies shall be limited to damages and/or an
injunction.

 

25.           RECONSTRUCTION. In the event the Premises are damaged by fire or
other perils covered by extended coverage insurance, Landlord agrees to
forthwith repair same, and (his Lease shall remain in full force and effect,
except that Tenant shall be entitled to a proportionate reduction of the Minimum
Rent from the dale of damage and while such repairs are being made, such
proportionate reduction to be based upon the extent to which the damage and
making of such repairs shall reasonably interfere with (he 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.

 

                In the event the Premises are damaged as a result of any cause
other than the perils covered by fire and extended coverage insurance, then
Tenant shall forthwith repair the same, provided the extent of the destruction
be less than ten (10%) percent of the then full replacement cost of the
Premises. In the event the destruction of the Premises is to an extent of ten
(10%) percent or more of the full replacement cost then the Landlord shall have
the option; (1) to repair or restore such damage, this Lease continuing in full
force and effect, but the Minimum Rent to be proportionately reduced as
hereinabove in this Article provided; or (2) give notice to Tenant at any time
within sixty (60) days after such damage, terminating this Lease as of the date
specified in such notice, which date shall be no more than thirty (30) days
after (he giving of such notice. In the event of giving such notice, 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 Minimum Rent, reduced by a
proportionate reduction, based upon the extent, if any. to which such damage
interfered with the business carried on by the Tenant in the Premises, shall be
paid up to date of said such termination.

 

                Notwithstanding anything to the contrary contained in this
Article, Landlord shall not have any obligation whatsoever to repair,
reconstruct or restore the Premises when the damage resulting from any casualty
covered under this Article occurs during the last twenty-four months of the term
of this Lease or any extension thereof.

 

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                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 leasehold
improvements, fixtures, or other personal property of Tenant

 

26.           EMINENT DOMAIN. If more than twenty-five (25%) percent of the
Building 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, within sixty (60) days after said taking, to terminate this Lease
upon thirty (30) days written notice, if more than 25% of the Building are taken
(and neither party elects to terminate as herein provided), the Minimum Rent
thereafter to be paid shall be equitably reduced, if any part of the Building
other than the Building may be so taken or appropriated, Landlord shall within
sixty (60) days of said taking have the right at its option to terminate this
Lease upon written notice to Tenant, in the event of any taking or appropriation
whatsoever. Landlord shall be entitled to any and all awards and/or settlements
which may be given and Tenant shall have no claim against Landlord for the value
of any unexpired term of this Lease.

 

27.           PARKING AND COMMON AREAS. This paragraph has been intentionally
deleted.

 

27.A.       This paragraph has been intentionally deleted.

 

27.B.       This paragraph has been intentionally deleted.

 

27.C.       This paragraph has been intentionally deleted.

 

27.D.       This paragraph has been intentionally deleted.

 

28.           SIGNS. This paragraph has been intentionally deleted.

 

29.           DISPLAYS. This paragraph has been intentionally deleted.

 

30.           AUCTIONS. Tenant shall not conduct or permit to be conducted any
sale by auction in, upon or from the Building whether said auction be voluntary,
involuntary, pursuant to any assignment for the payment of creditors or pursuant
to any bankruptcy or other insolvency proceeding.

 

31.           HOURS OF BUSINESS. This paragraph has been intentionally deleted.

 

32.           MERCHANTS ASSOCIATION. This paragraph has been intentionally
deleted.

 

33.           SECURITY INTEREST. This paragraph has been intentionally deleted.

 

34.           GENERAL PROVISIONS.

 

(i) Plats and Riders. Clauses, plats, riders and addendums, if any, affixed to
this Lease are a part hereof.

 

(ii) Waiver. The waiver by Landlord of any term, covenant or condition herein
contained shall not be deemed to be a waiver of such term, covenant or condition
or any subsequent breach of the same or any other term, covenant or condition
herein contained. The subsequent acceptance of rent hereunder by Landlord shall
not be deemed to be a waiver of any preceding default by Tenant of any term,
covenant or condition of this Lease, other than the failure of the Tenant to pay
the particular rental so accepted, regardless of Landlord’s knowledge of such
preceding default at the time of the acceptance of such rent.

 

(ill) Joint Obligation, if there is more than one Tenant the obligations
hereunder imposed shall be joint and several.

 

(iv) Marginal Headings. The marginal headings and article titles to the articles
of this Lease are not a part of the Lease and shall have no effect upon the
construction or interpretation of any part hereof.

 

(v) Time. Time is of the essence of this Lease and each and all of its
provisions in which performance is a factor.

 

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(vi) Successors and Assigns. The covenants and conditions herein contained,
subject to the provisions as to assignment, apply to and bind the heirs,
successors, executors, administrators and assigns of the parties hereto.

 

(vii) Recordation. Neither Landlord nor Tenant shall record this Lease, but a
short form memorandum hereof may be recorded at the request of the Landlord or
Tenant.

 

(viii) Quiet Possession. Upon Tenant paying the rent reserved hereunder and
observing and performing all of the covenants, conditions and provisions on
Tenant’s part to be observed and performed hereunder. Tenant shall have quiet
possession of the Building for the entire term hereof, subject to all the
provisions of this Lease.

 

(ix) Late Charges. Tenant hereby acknowledges that late payment by Tenant to
Landlord of rent or other sums due hereunder will cause Landlord to incur costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such 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 Building. Accordingly, if any
installment of rent or any sum due from Tenant shall not be received by Landlord
or Landlord’s designee by the fifth day of the month then it is considered past
due, then Tenant shall pay to Landlord a late charge equal to the maximum amount
permitted by law (and in the absence of any governing law, ten percent of such
overdue amount), plus any attorney’s fees incurred by Landlord by reason of
Tenant’s failure to pay rent and/or other charges when due hereunder. The
parties hereby agree that such 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
hereunder.

 

(x) Prior Agreements. This Lease contains all of the agreements and
representations of the parties hereto with respect to any matter covered or
mentioned in this Lease, and no prior agreements or understanding pertaining to
any such matters shall be effective far any purpose. No provision of this Lease
may be amended or added to except by an agreement in writing signed by the
parties hereto or their respective successors in interest. This Lease shall not
be effective or binding on any party until fully executed by both parties
hereto.

 

(xi) Inability to Perform. This Lease and the obligations of the Tenant
hereunder shall not be affected or impaired because the Landlord is unable to
fulfill any of its obligations hereunder 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 the reasonable control of the Landlord.

 

(xii) Partial Invalidity, 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

 

(xiii) Cumulative, Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, whenever possible, be cumulative with ail other remedies at
law or in equity.

 

(xiv) Choice of Law. This Lease shall be governed by the laws of the State in
which the Building are located.

 

(xv) Attorney’s Fees. In the event of any action or proceeding brought by either
party against the other under this Lease the prevailing party shall be entitled
to recover for the fees of its attorneys in such action or proceedings,
including costs of appeal, if any, in such amount as the court may adjudge
reasonable as attorneys’ fees. In addition, should it be necessary for Landlord
to employ legal counsel to enforce any of the provisions herein contained,
Tenant agrees to pay all attorney’s fees and court costs reasonably incurred.

 

(xvi) Sale of Building by Landlord. In the event of any sale of the Building by
Landlord, 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 omission occurring
after the consummation of such sale; and the purchaser, at such sale or any
subsequent sale of the Building shall be deemed, without any further agreement
between the parties or their successors in interest or between the parties and
any such purchaser, to have assumed and agreed to carry out any and all of the
covenants and obligations of the Landlord under this Lease.

 

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(xvii) Subordination, Attornment. Upon request of the Landlord, Tenant shall In
writing subordinate its rights hereunder to the lien of any mortgage or deed of
trust, to any bank, insurance company or other lending institution, now or
hereafter in force against the Building, and to all advances made or hereafter
to be made upon the security thereof.

 

In the event any proceedings are brought for foreclosure, or in the event of the
exercise of the power of sale under any mortgage or deed of trust made by the
Landlord covering the Building, the Tenant shall atom to the purchaser upon any
such foreclosure or sale and recognize such purchaser as the Landlord under this
Lease.

 

The provisions of this Article to the contrary notwithstanding, and so Song as
Tenant is not in default hereunder, this Lease shall remain in full force and
effect for the full term thereof.

 

(xviii) Notices. All notices and demands which may or are to be required or
permitted to be given by either party on the other hereunder shall be in
writing. All notices and demands by the Landlord to the Tenant shall be sent by
United States Mail, postage prepaid, addressed to the Tenant at the Building,
and to the address herein below, or to such other place as Tenant may from time
to time designate in a notice to the Landlord. All notices and demands by the
Tenant to the Landlord shall be sent by United States Mail, postage prepaid,
addressed to the Landlord at the address set forth herein, and to such other
person or place as the Landlord may from time to time designate in a notice to
the Tenant.

 

To Landlord at: 1615 California Street, Suite 707, Denver Colorado 80202

To Tenant at: 9003 E. Mansfield, Denver. CO 80237

 

(xix) Tenant’s Statement. Tenant shall at any time and from time to time, upon
not less than three 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 rental 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, and (c) setting forth the date
of commencement of rents and expiration of the term hereof. Any such statement
may be relied upon by the prospective purchaser or encumbrancer of all or any
portion of the real property of which the Building are a part.

 

(xx) Authority of Tenant. 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 said corporation, in
accordance with the bylaws of said corporation, and that this Lease is binding
upon said corporation.

 

(xxi) Default interest. All monies owed by Tenant, including but not limited to
rent, shall accrue interest at the prime rate plus 10% or 20% per annual,
whichever is greater, from the default date until paid in full.

 

(xxi) Counterparts. This instrument may be signed in one or more counterparts,
each of which shall be considered an original and when taken together shall
constitute one and the same instrument.

 

35.           In addition to She foregoing rights and remedies of the Landlord
as set forth in paragraphs 22 and 23 above, in the event of Tenant default
terminating Tenant’s rights under the Lease, the Landlord shall have the option
to accelerate all current and future monetary obligations of the Tenant,
including remaining installments of rent, and such other amounts due under the
term of the Lease. Such accelerated unpaid rent and other amounts due under the
terms of the Lease (gross rents) shall accrue interest at the highest rate
allowed by law until paid in full.

 

36.           DEMOLITION/ REMODEL/ RENOVATION. This paragraph has been
intentionally deleted.

 

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Landlord:

 

TENANT:

Dikeou Realty

 

 

 

 

 

/s/ John Dikeou

 

 

By: Jonn P. Dikeou

 

By:

Its:

 

Its:

 

 

 

 

 

 

 

 

By:

 

 

Its:

 

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EXHIBIT “B”

 

CONSTRUCTION OF TENANTS STORE

 

Tenant shall be obligated to comply with the following:

 

a) Prior to start of Tenant’s work Tenant’s contractor shall provide. Landlord
with a construction schedule In bar graph form indicating the completion date of
all phases of Tenant’s work.

 

b) Tenant’s contractor shall be responsible for the repair, replacement or clean
up of any damage done by him to other contractor’s work, which basically
includes access ways to the Tenant’s Building, which may be concurrently used by
others.

 

c) Tenant’s contractor shall contain his storage of materials and his operations
within the Building and such other space as may be assigned by Landlord’s
contractor.

 

d) All trash and surplus construction materials shall be stored within the
Building and promptly removed from the Building.

 

e) Tenant’s contractor shall provide temporary utilities, portable toilet
facilities and portable drinking water as required for his work within the
Building and shall pay to Landlord’s contractor the cost of any temporary
utilities and facilities provided by Landlord’s contractor at Tenant’s
contractor’s request.

 

f) Tenant’s contractor shall notify Landlord of any planned work to be done on
weekends or other than normal job hours.

 

g) Tenant’s contractor shall be responsible for compliance with applicable codes
and regulations of duly constituted authorities having jurisdiction so far as
the performance of the work and completed improvements are concerned for all
work performed by Tenant’s contractor and all applicable safety regulations
established by the general contractor for the Building.

 

DESCRIPTION OF LANDLORD’S WORK

 

“As is”

 

DESCRIPTION OF TENANTS WORK

 

Except as provided under “Description of Landlord’s Work” above, all work in the
Building shall be provided by Tenant at Tenant’s expense. Tenant shall be
permitted access to Building after Landlord’s contractor has completed work or
portions thereof, for the purpose of completing Tenant’s work.

 

Tenant’s work shall include, but not be limited to, decorative and/or show
window lighting and any special furred, covered or dropped ceiling areas.  Any
modifications to the fire sprinkler system required due to irregularities of
Tenant’s partitioning and/or ceiling design or in excess of ISO ordinary hazard
rating shall be provided by Landlord at Tenant’s expense.

 

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EXHIBIT “C”

STANDARD TENANT SIGN CRITERIA

 

1.     All signs must be submitted by each tenant to the Landlord for Landlord’s
approval prior to application for sign permit Submit to Landlord detailed
drawings showing size, layout, colors, materials, style of all letters and all
graphics.

 

2.     Each tenant shall be responsible for obtaining ail permits for signs and
for providing and installing all signs.

 

3.     In addition to approval by Landlord, all signs must be in conformance
with local sign codes.

 

4.     The tenant shall be responsible for repair of any damage to the building
caused by the installation of his signs.

 

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GENERAL ADDENDUM

 

Addendum to that lease dated the        day of      , 2001 by and between DIKEOU
REALTY herein called “LANDLORD”, and 2222 INC. herein called TENANT.

 

WHEREAS, it is intended that the parties to that lease add additional terms
therein and to have full force and effect as though set forth in said lease.

 

TO the extent this Addendum is at variance with the body of this Lease the
General Addendum shall prevail.

 

NOW, THEREFORE, in consideration of mutual promises, TEN DOLLARS and other
valuable consideration, sufficiency and receipt acknowledged, the parties herein
further agree as follows:

 

1.        COMMON AREA. This paragraph has been intentionally deleted.

 

2.        SIGNAGE. This paragraph has been intentionally deleted.

 

3.        ADJUSTMENTS. All rent adjustments, expenses and all monies due under
this lease shall be considered as additional rent and payable as such.

 

4.        PLATE GLASS INSURANCE. The Tenant shall be responsible for the
maintenance and insuring of the plate glass on the Building.

 

5.        FLOOR AREA DEFINITION. This paragraph has been intentionally deleted.

 

6.        MINIMUM RENT, in no event shall the Minimum Rent be below the minimum
rent for the preceding year.

 

7.        SALES TAX (GROSS RECEIPTS TAX). In addition to all other payments, the
Tenant shall pay sales tax and/or gross receipts tax, and any and all increases
in such tax on the total amount paid to Landlord Including, but not limited to,
rent, real estate taxes, insurance, common area maintenance fees and common area
utilities.

 

8.        LIEN WARRANTS. The Landlord in no manner whatsoever shall be
responsible for any contract that the Tenant makes or for any agreement that the
Tenant makes for construction, alteration, or repairing of the building or
improvement on the demised Building or for the purchase of material to be used
for work and labor to be performed in and about the construction, alteration or
repair to be made, and that such contract or agreement between the tenant and
said third party to this contract shall contain express waivers by said
contractor of any and all claim for mechanics or material liens against the
demised Building or improvements thereon, including those made and erected under
the terms of this lease.

 

9.        REPAIRS. The landlord shall not be responsible for any repairs that
the tenant shall contract with other parties.

 

10.      ASSIGNMENT. Notwithstanding other assignment provisions in this Lease
that are in conflict with the following provisions of assignment the following
assignment provisions shall prevail:

 

(a) Tenant may not assign this Lease or sublease the Building, in whole or in
part, to a wholly owned corporation or controlled subsidiary of Tenant without
first having obtained the written consent of Landlord, such consent not to be
unreasonably withheld.

 

(b) If Tenant is a corporation, any transfer, sale, pledge or other disposition
of more than ten percent

 

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(10%) of the common stock shall occur, or voting control or power to vote the
majority of the outstanding stock capital stock be changed, such action shall be
deemed an assignment under the terms of this Lease and shall be subject to all
the terms and conditions thereof. Any breach of the assignment clause by Tenant
will constitute a default under the terms of this Lease.

 

(c) In the event the Tenant shall transfer, assign, or sublease the entire or
any portion of the Building for rentals or any consideration in excess of those
rentals, consideration, and/or the sales proceeds payable hereunder. Tenant
shall pay to Landlord, as additional rent hereunder, 5% of such excess rentals
and consideration paid for the transfer, sublease and/or assignment of the
Lease. Tenant will also pay to Landlord, a sum of $34,000 upon any transfer,
assignment, or stock purchase to reimburse Landlord for the cost of the new
boiler that Landlord has Installed in the Building.

 

(cc) All provisions of Paragraph 13 of the Base Lease remains in full force and
effect when not in conflict with Paragraph 10 herein and more specifically, but
not limited thereto, consent to any assignment or subletting shall In no way
relieve Tenant of any liability under this Lease.

 

(d) Any proposed assignee or subtenant of Tenant shall assume Tenant’s
obligations hereunder and deliver to Landlord an assumption agreement in form
satisfactory to Landlord no less than ten (10) days prior to the effective date
of the proposed assignment.

 

(e) Notwithstanding any of the foregoing provisions, if Tenant is in default
under any of the terms of this lease, Tenant may not assign or sublet the
Building in whole or in part.

 

11.      ADDITIONAL PROVISIONS FOR SECURITY DEPOSITS. If Tenant should be
overdue In the payment of monthly rent or other sums payable to Landlord on at
least two or more occasions during a year, Landlord, at its option, may require
tenant to increase the amount of security deposit now held by Landlord by an
amount sufficient to cover at least two month’s rent or greater amount to be
determined at sole discretion of Landlord. In this event, upon receipt of the
additional security sum, Landlord and tenant shall evidence such receipt by a
letter signed and acknowledged by both parties to be incorporated as part of
this Lease, stating the “New Total Amount” so held without liability for any
interest

 

12.      HAZARD INSURANCE. Tenant shall be responsible for any increase In the
hazard insurance premium rates when said increase in the premium rates is
directly attributable to the unique use of the Building by the Tenant.

 

13.      MORTGAGE FINANCING. Tenant shall, upon the request of Landlord, execute
and deliver such instruments as may be required by Landlord to make this Lease
either superior or subordinate to any mortgages now or hereafter placed upon
Landlord’s interest in the Building or the Demised Building or future additions
thereto. Tenant hereby attorns to any purchaser at a foreclosure sale or sale in
lieu of foreclosure or any other sale or any type, and agrees to execute all
agreements required by any such purchaser affirming such attornment.

 

Upon request of any mortgage of record, Tenant shall give such mortgagee copies
of all notices given by Tenant to Landlord hereunder, and Tenant shall allow
such mortgagee a reasonable length of time (In any event, not less than sixty
(60) days from the date of such notice) in which to cure any default by Landlord
hereunder. Any such notice shall be sent to such department and address as such
mortgagee shall direct Tenant in writing.

 

14.      TAP FEES. This paragraph has been intentionally deleted.

 

15.      IMPROVEMENT OF DEMISED BUILDING. Tenant accepts Building In its “as is”
condition. Any required improvements and or maintenance and repairs should be at
Tenant’s sole cost and expense.

 

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16.      SERVICE CORRIDORS. This paragraph has been intentionally deleted.

 

17.      RADIUS CLAUSE. This paragraph has been intentionally deleted.

 

18.      RIGHT TO MOVE TENANT. This paragraph has been intentionally deleted.

 

19.      ZONING. The property on which Tenant’s Building shall be located is
zoned B-5. As Landlord does not understand the exact nature of Tenant’s
occupancy to the same level as does Tenant, it shall be the sole responsibility
of Tenant to confirm that the zoning use is compatible with Tenant’s use.

 

20.      OWNERSHIP OF EQUIPMENT. This paragraph has been intentionally deleted.

 

21.      FINANCIAL STATEMENTS. Tenant and any potential assignees will provide
Landlord with a current copy of its financial statement and tax return.
Additionally, Tenant agrees to supply Landlord and/or Landlord’s lender,
potential lenders, or potential purchasers of the Building with Tenant’s
financial statement, tax return, and store ranking, both locally and nationally
if applicable, upon Landlord’s written request

 

22. TERMINATION OF LEASE dated July 1, 1994. This Lease dated  the day       of 
          , 2001 (hereafter “New Lease”) shall be In full force and effect and
shall replace the previous Lease dated July 1, 1994 between Tenant and Landlord.

 

23. Landlord hereby agrees that whenever its consent is required under this
Lease, such consent shall not be unreasonably withheld.

 

IN WITNESS WHEREOF, the parties have executed this        day of
                , 2001.  Addendum this.

 

LANDLORD:

 

TENANT:

DIKEOU REALTY

 

 

/s/ John Dikeou

 

/s/ Orville Bullard

By: John P. Dikeou

 

By:

It: Partner

 

Its:

 

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General Addendum

 

Addendum to that lease dated the 1st, day of  MAR, 2000 Inc. herein called
Landlord and 1443 Corporation herein called Tenant.

 

Whereas, it is intended that the parties to that lease add additional terms
therein and to have full force and effect as though set forth in said lease.

 

To the extent this Addendum is at variance with the body of this Lease the
General Addendum shall prevail.

 

Now, Therefore the parties herein further agree as follows:

 

1.

 

In addition to the Minimum Rent provided in the Lease and commencing at the same
time as any rent commences under the Lease, Tenant shall pay to Landlord the
following items, herein called adjustments:

 

 

 

 

 

a.

All real estate taxes, insurance premiums, and assessments on the Building,
including land, building and improvements thereon.

 

 

 

2.

 

Lien Warrants. The Landlord in no manner whatsoever shall be responsible for any
contract that the Tenant makes or for any agreement that the Tenant makes for
construction, alteration, or repairing of the building or improvements on the
demised building or for the purchase of material to be used for work and labor
to be performed in and about the construction, alteration or repair to be made.

 

LANDLORD:

 

TENANT:

 

 

 

2222, Inc.

 

1443 Corporation

 

 

 

/s/ Ginger Bullard

 

/s/ Orville Bullard

 

 

 

By: Ginger Bullard

 

By: Orville D. Bullard

 

 

 

Its: President

 

Its: President

 

 

 

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