Document:

EX-10.1 MEMORNADUM OF UNDERSTANDING

 

Exhibit 10.1

Fox, et al. v. First BanCorp, et al.

United States District Court for the District of Puerto Rico,

Civil Action No. 05-cv-2148-(JG)

MEMORANDUM OF UNDERSTANDING

     This Memorandum of Understanding (“MOU”) confirms that a settlement (the “Settlement”)
has been agreed to in principle between defendants First BanCorp, Angel Alvarez-Perez, Annie
Astor-Carbonell, Laura Villarino-Tur and UBS Financial Services, Inc. of Puerto Rico and Lead
Plaintiffs on behalf of themselves and members of the Class (“Plaintiffs”) in the above-referenced
consolidated action (the “Action”).

     1. First BanCorp shall pay or cause to be paid $74.25 million (the “Settlement
Fund”) into an interest-bearing escrow account controlled by Lerach Coughlin Stoia Geller Rudman &
Robbins LLP and Zwerling, Schachter & Zwerling, LLP at a financial institution designated by
Plaintiffs, subject to Court oversight, as follows: (1) within 15 calendar days following
preliminary approval of the Settlement by the District Court, Defendants shall pay or cause to be
paid $61 million; and (2) the remaining $13.25 million shall be paid at the earlier of (a) December
31, 2007; or (b) within either (i) 14 calendar days of Bank of Nova Scotia purchasing approximately
$94.5 million of First BanCorp common stock (subject to any required regulatory approvals allowing
First BanCorp to pay the $13.25 million at that time, which approvals First BanCorp shall seek
immediately upon execution of this MOU) or (ii) within 14 calendar days of First BanCorp receiving
a capital investment by a third party greater than $25 million (subject to any required regulatory
approvals allowing First BanCorp to pay the $13.25 million at that time which approvals First
BanCorp shall use best efforts to obtain). In the event that First Bancorp fails to obtain
regulatory approvals, if required, allowing it to pay all or part of the $13.25 million within 14
calendar days of the purchase of common stock by Bank of Nova

 

 

Scotia or First BanCorp receiving a capital investment by a third party greater than $25 million,
simple interest shall accrue at 9% per annum on the $13.25 million from the end of the 14 calendar
day period referenced in this paragraph until such time as any unpaid amount is paid into the
escrow account. If the Settlement Fund or any portion thereof is not timely paid as set forth
herein, any unpaid amount shall bear simple interest at 9% per annum from the date such amount
should have been paid until paid into the escrow account.

     2. For the purposes of the Settlement, the parties shall stipulate to certify a
Settlement Class, defined as all persons who purchased or otherwise acquired the common or
preferred stock of First BanCorp during the time period from April 16, 2001 through December 13,
2005 (the “Settlement Class Period”). Excluded from the Settlement Class are Defendants and their
related parties. This Settlement applies to all claims arising under §§11, 12(a)(2) and 15 of the
Securities Act of 1933 and §§10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder during the
Settlement Class Period.

     3. Within a reasonable time after the execution of this MOU, the parties shall advise the
Court of this MOU and shall seek a stay of all pending motions and schedules pending effectuation
of the Settlement.

     4. Following execution of this MOU, the parties and their counsel shall use their best efforts
to finalize and execute a Stipulation of Settlement (“Stipulation”) and such other documentation as
may be required or appropriate in order to obtain approval by the Court of the Settlement of this
Action upon the terms set forth in this MOU. Promptly upon execution of the Stipulation, the
parties shall apply to the Court for preliminary approval of the Settlement and for the scheduling
of a hearing for consideration of final approval of the Settlement and Plaintiffs’ counsel’s
application for an award of attorneys’ fees and expenses. The parties shall use their best efforts
to apply for preliminary approval no later than April 16, 2007.

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     5. The Stipulation shall provide for the dismissal of the Action with prejudice upon final
approval of the Settlement and shall contain a release of claims, typical for this type of action,
arising out of, relating to, or in connection with the purchase or acquisition of common or
preferred stock of First BanCorp during the Settlement Class Period and the acts, facts, statements
or omissions that have been or could have been asserted by the Lead Plaintiffs in the Action
against the Defendants. Defendants shall release Lead Plaintiffs, the members of the Settlement
Class and their counsel from any claims relating to the institution, prosecution or settlement of
this Action.

     6. The Stipulation shall also provide, among other terms, that:

     (a) the parties shall seek from the Court an order of preliminary approval of the Stipulation
and Settlement and directing that notice of pendency and settlement be provided to the Settlement
Class. Subject to Court approval, the Class notice will provide for a 40-day opt-out period;

     (b) Plaintiffs may designate the settlement claims administrator subject to Court approval. First
BanCorp shall provide or cause to be provided to the settlement claims administrator its
shareholder lists as appropriate for providing notice to the Settlement Class;

     (c) the consideration described in paragraph 1 above shall be timely provided in full;

     (d) Defendants have denied and continue to deny that they have committed any act or omission giving rise to any
liability and/or violation of law;

     (e) neither the Settlement nor any of its terms shall constitute
an admission or finding of wrongful conduct, acts or omissions;

     (f) Lead Plaintiffs, defendants and their counsel shall not make any
application for sanctions pursuant to Rule 11 of the Federal Rules of Civil Procedure (“Fed. R.

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Civ. P.”) or any other court rule or statute, with respect to any claims or defenses in this
Action. The final judgment will contain a finding that, during the course of the Action, all
parties and their counsel complied with Fed. R. Civ. P. 11, and the Action is being settled
voluntarily by the defendants after consultation with competent legal counsel. The defendants may
issue a press release announcing the Settlement, but may not contradict this language.

     (g) the allocation of the Settlement Fund among the members of the Settlement Class shall be
subject to a plan of allocation to be proposed by Lead Plaintiffs and approved by the Court.
Defendants will take no position with respect to such proposed plan of allocation or such plan as
may be approved by the Court; such plan of allocation is a matter separate and apart from the
proposed Settlement between the parties and any decision by the Court concerning the plan of
allocation shall not affect the validity or finality of the Settlement;

     (h) Defendants take no
position with respect to any questions concerning Plaintiffs’ counsels’ request or award of
attorneys’ fees and reimbursement of expenses from the Settlement Fund. Such matters are not the
subject of any agreement between the parties other than what is set forth herein;

     (i) If so ordered
by the court upon preliminary approval, plaintiffs’ counsel shall be entitled to provisional
reimbursement of 75% of their out-of-pocket expenses, subject to plaintiffs’ counsel’s several
obligation to make appropriate refunds or repayments to the settlement fund plus interest at the
same rate as earned on the settlement fund if, and when, as a result of any order, the final fee or
expense award is lower than that amount; and

     (j) Plaintiffs’ counsel may at any time apply for and
receive an award of attorneys’ fees and reimbursement of expenses from the Settlement Fund in such
amounts as the Court approves and that any amount included in such award shall be paid to
Plaintiffs’ counsel immediately upon the Court’s approval of the Settlement and award, subject to
each Lead

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Plaintiffs’ counsels’ obligation to pay back any such amount if, or to the extent that, the award
order is amended or does not become final. This provision shall apply notwithstanding timely
objections thereto, the potential for appeal therefrom, or collateral attack thereof.

     7. In addition to the Stipulation, the parties will enter into a separate letter agreement
allowing Defendants to terminate the Settlement in the event that Settlement Class members
purchasing or acquiring an agreed upon number of First BanCorp common or preferred shares traded
during the Settlement Class Period opt-out of the Settlement. This Supplemental Agreement shall
not be filed with the Court unless and until a dispute arises among the parties concerning its
interpretation or application.

     8. Plaintiffs’ counsel shall administer the Settlement Fund. All reasonable costs and expenses
of class notice and administration of the Settlement shall be paid from the Settlement Fund when
incurred. Until such time as the settlement becomes final, First BanCorp shall have reasonable
access to the books and records concerning the administration of the Settlement Fund. The
Settlement Fund, less any amounts incurred for notice, administration and/or taxes, shall revert to
the entities or persons making the deposits if the Settlement does not become effective.

     9. The consummation of the settlement is subject to the completion by Lead
Plaintiffs and their counsel of appropriate confirmatory discovery in the Action sufficient to
satisfy Lead Plaintiffs’ and their counsel that the proposed Settlement is fair and reasonable, and
counsel for the parties will use good faith efforts to agree upon the scope of such discovery.

     10. If
the Settlement outlined in this MOU is not approved by the Court or
is terminated:

     (a) the Settlement shall be without prejudice, and none of its terms shall be effective or enforceable,
except to the extent that costs of notice and administration, taxes and tax related expenses have
been incurred or expended as set forth in Paragraph 8 herein;

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     (b) the parties shall revert to their litigation positions immediately prior to
the execution of this MOU; and

     (c) the fact and terms of this Settlement and the negotiations thereof shall
not be admissible in any trial of this Action.

     11. This MOU may be executed in counterparts, including by signature
transmitted by facsimile. Each counterpart when so executed shall be deemed to be
an original, and all such counterparts together shall constitute the same
instrument. The undersigned signatories represent that they have authority from
their clients to execute this MOU. The terms of this MOU and Settlement shall
inure to and be binding upon the parties and their successors in interest.

     IT IS HEREBY AGREED by the undersigned.

	 	 	 
	DATED: March 5, 2007

	 	LERACH COUGHLIN STOIA GELLER
	 

	 	     RUDMAN & ROBBINS LLP
	 

	 	SAMUEL H. RUDMAN
	 

	 	ROBERT M. ROTHMAN
	 
	 	 
	 
	 	/s/ Samuel H. Rudman
	 

	 	 
	 

	 	SAMUEL H. RUDMAN
	 
	 	 
	 

	 	58 South Service Road, Suite 200

Melville, NY 11747

Telephone: 631/367-7100

631/367-1173 (fax)
	 
	 	 
	 

	 	ZWERLING, SCHACHTER &
	 

	 	     ZWERLING, LLP
	 

	 	JEFFREY C. ZWERLING
	 
	 	 
	 

	 	/s/ Jeffrey C. Zwerling
	 

	 	 
	 

	 	JEFFREY C. ZWERLING
	 
	 	 
	 

	 	41 Madison Avenue
	 

	 	New York, NY 10010
	 

	 	Telephone: 212/223-3900
	 

	 	212/371-5969 (fax)

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	 	Counsel for Plaintiffs
	 
	 	 
	 

	 	WEIL, GOTSHAL & MANGES LLP
	 

	 	JOSEPH S. ALLERHAND
	 
	 	 
	 

	 	/s/ Joseph S. Allerhand
	 

	 	 
	 

	 	JOSEPH S. ALLERHAND
	 
	 	 
	 

	 	767 Fifth Avenue
	 

	 	New York, NY 10153-0119
	 

	 	Telephone: 212/310-8000
	 

	 	212/310-8007 (fax)
	 
	 	 
	 

	 	Attorneys for Defendant First BanCorp

7EX-4.2

 

4701 LEASE

THIS INDENTURE OF LEASE made and entered into this first day of March 1, 2007, by and between
MEYERS 4701, LLC, a Colorado Limited Company, herein designated “Landlord” and MINER AND MINER,
CONSULTING ENGINEERS, INC., a Colorado Corporation, herein designated “Tenant”.

WITNESSETH

ARTICLE I

     PREMISES:

	 	1.	 	Landlord, for and in consideration of the rents, covenants and agreements
hereinafter specified to be paid, kept and performed by the Tenant, has rented and
leased and by these presents does hereby rent and lease unto the Tenant the following
described real estate, to-wit:

Lot 4, Westgate Commercial Center Subdivision

County of Larimer, State of Colorado

4701 Royal Vista Circle, Windsor, Colorado

	 	2.	 	The property hereinabove described is hereinafter referred to as the “Demised
Premises”.

	 	3.	 	To meet the needs of the Tenant, the landlord has agreed to expand the Demised
Premises, adding approximately 7,500 square feet (“the Addition”), which should be
ready for occupation by the Tenant in early summer, 2007. Future additions may be
required to meet the joint needs of Tenant and Landlord, subject to the mutual
agreement of both Tenant and Landlord.

ARTICLE II

     TERM:

	 	1.	 	Primary Term. The primary term of this lease shall be 6 years
commencing the occupancy date of the Addition and ending six (6) years hence.
	 
	 	2.	 	Options to Extend. Tenant is hereby granted three successive options
of 6 years each to extend this lease beyond its primary term. Failure to exercise any
option by the tenant shall cause all future options to terminate automatically. In
order to exercise any option to extend this lease, Tenant must give Landlord written
notice of exercise not sooner than one year before the expiration of the then existing
term and not later than 180 days prior to the expiration of the then existing lease
term.

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ARTICLE III

RENTAL:

	1.	 	Rental for the period from the execution date of this lease until occupancy of
the Addition shall be $26,221.00 per month. Upon occupation of the Addition, Tenant
will send Landlord a letter indicating that the Addition is occupied, where upon the
monthly rent shall change to the product of the actual size of the Demised Premises in
square feet times $18.50 per square foot divided by 12 months, the new amount of which
shall apply on a pro-rated basis during the month of occupancy. Monthly rental
payments shall be subject to a bi-annual (every 2 years) increase of not more than 6%.
All rentals shall be paid at the business address of the Landlord at 4250 W.
16th St, Greeley, Colorado 80634, or to such other person firm or
corporation and at such other place as may be hereafter be designated by Landlord in
writing.
	 
	2.	 	In the event Tenant elects to exercise any of the options granted to Tenant to
extend the lease, rental payable for the option term shall be as determined by the
parties’ negotiations. If the parties are unable to agree on a fair rental value for
an option term, rental shall be determined by appraisal of fair rental value. In
obtaining an appraisal of fair rental value each party shall select a licensed real
estate appraiser than practicing in the Greater Fort Collins, Colorado area. If the
two appraisers are unable to agree on a fair market rental value for the option term,
the two appraisers shall pick a third appraiser similarly qualified and the decision of
the three appraisers shall be binding upon Landlord and Tenant. In establishing rental
rates for the ensuing term, the appraisers may graduate the rental increases for each
year during the option term. In no event shall rent for any option term be less than
the rental rate payable during the preceding year of the prior term.
	 
	3.	 	In addition the Tenant shall pay real estate taxes, Westgate Commercial Center
Subdivision Assessments and the building insurance costs for said premises when due and
shall submit proof of payments to the Landlord within 30 days of payment due dates.
This lease is intended to be net of all taxes, utilities and maintenance. Tenant shall
pay all costs of repair and maintenance for the Demised Premises.
	 
	4.	 	Tenant shall have the right to contest the amount of validity, in whole or in
part, of any ad valorem tax assessment or seek a reduction in the assessed valuation of
the Demised Premises by appropriate proceeding diligently conducted in good faith, but
only after payment of such amount and/or item in question unless said payment would
operate as a bar to such contest or interfere materially with the prosecution thereof.
Upon final determination of such proceedings, Tenant shall immediately pay any amounts
plus interest, fees, penalties, or other liability in connection thereof as finally
determined in such proceedings as required by law. Tenant covenants that Landlord
shall not suffer or sustain any costs or expense (including but not limited to
attorney’s fees) or any liabilities in connection with such proceeding. Tenant shall
consult with Landlord before and during any such contest.

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ARTICLE IV

IMPROVEMENTS BY TENANT—TRADE FIXTURES:

	1.	 	All trade fixtures, equipment, appliances, furniture, furnishings, together
with improvements approved by Landlord installed in the Demised Premises by the Tenant
may be removed by the Tenant at the expiration of the term of this lease, or any
extension or renewal thereof, or any sooner termination thereof, and if removed Tenant
shall repair any damage caused by such removal and restore the building to the same
condition it was in at the time such fixtures, equipment, appliances, furniture,
furnishings and improvements were installed. All such fixtures, equipment, appliances,
furniture, furnishings and other improvements installed by Tenant, if Tenant elects to
remove the same, shall be removed within five (5) days after the termination of this
lease, otherwise the same shall become the property of the Landlord.
	 
	2.	 	Tenant agrees to promptly pay all costs and expenses involved or incurred in
the installation of such improvements, fixtures, equipment, appliances, furniture and
furnishings and under no circumstances shall Tenant suffer or permit the Demised
Premises to become charged with a lien for unpaid labor or material bills incurred in
such work and all such installation and work to be performed by Tenant shall be at the
sole cost, risk and expense of the Tenant. The Tenant also agrees to save the Landlord
harmless of and from and to indemnify Landlord against liability for damages to persons
or property resulting from such installation and work.

ARTICLE V

UTILITIES, PERSONAL PROPERTY TAXES:

Tenant agrees to pay all bills for electricity, gas, water and sewer service used by Tenant
and to pay all personal property taxes levied and assessed against the Tenant’s and
Landlord’s personal property located and used on the Demised Premises promptly when due and
before the same become delinquent.

ARTICLE VI

MAINTENANCE, UPKEEP AND USE OF PREMISES:

	1.	 	Tenant agrees to use and occupy the Demised Premises as offices for engineers,
software personnel and other businesses and professions in a safe and lawful manner;
that it will not permit or suffer any waste thereon or thereof, or any nuisance thereon
or thereabout; that it will keep the sidewalks adjacent to said premises free from ice
and snow and will maintain said premises and landscaping in a clean, orderly and
sightly condition. Tenant further agrees to keep all improvements upon said premises,
including all sewer connections, plumbing, air conditioning and heating appliances,
wiring, glass, doors and windows roof and

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	 	 	parking lot (hereinafter referred to as the “Permanent Building Equipment”), in good
order and repair and condition at the expense of the Tenant; not to endanger the
floors or walls of the Demised Premises by overloading; to order no repairs at the
expense of the Landlord, and at the expiration of this lease to surrender and
deliver said premises, including all air conditioning and heating appliances,
plumbing, sewer connections, wiring, glass, doors and windows in as good order and
condition as when the same were entered upon, loss by fire and ordinary wear
excepted. Provided, however, Tenant shall cause the Landlord to be paid from
proceeds of insurance carried by Tenant on the Demised Premises for any damages or
losses to the extent Tenant is paid by the insurance carrier for such damages or
losses. Tenant agrees to comply with the laws and observe all laws, statutes,
ordinances, regulations and legal requirements relating to the use and occupancy of
said premises and to the business conducted thereon, and that it will not suffer or
permit said premises to be used for the purpose of carrying on any illegal business
or occupation.
	 
	2.	 	Notwithstanding paragraph 1 of Article VI herein, the Landlord shall be
responsible for replacing Permanent Building Equipment when it is no longer
economically feasible to repair and maintain the same. In the event that the parties
unable to agree that Permanent Building Equipment needs to be replaced, the parties
shall obtain an independent assessment from a qualified service provider of the
Permanent Building Equipment in question. If the parties are unable to select a
service provider, the parties shall obtain independent qualified service providers to
provide assessments. If the parties respective professionals are unable to agree upon
a suitable remedy, the two service providers shall pick a third qualified service
provider similarly qualified and the decision of the three service providers shall be
binding upon Landlord and Tenant.

ARTICLE VII

ALTERATIONS AND ADDITIONS:

	1.	 	Tenant shall make no alterations or changes or additions to the Demised
Premises without first procuring the written consent of the Landlord. Landlord shall
not unreasonably withhold such consent but may condition such consent upon being
satisfied with plans and specifications submitted by Tenant, verification of financial
ability to pay for the improvements and the opinion of real estate advisors that the
alterations or additions will not decrease the value of the Demised Premises. All
additions, alterations and improvements made to the Demised Premises by either Landlord
or Tenant shall become the property of Landlord and be surrendered with the premises at
the termination of this Lease. During the time of any construction by Tenant on the
Demised Premises, Landlord shall have the right to post the premises notifying
contractors that Landlord is not liable or responsible for the cost of any such
additions or repairs.

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	2.	 	Whenever Landlord conveys its interest in the Premises, Landlord shall
automatically be released from further performance of covenants on the part of Landlord
contained herein, and from any and all further liability, obligations, costs and
expenses, demands, causes of action, claims or judgments arising from or growing out of
or connected with this Lease after the effective date of said assignment. If
requested, Tenant shall execute a form of release and such other documentation as may
be required to effect the provisions of this paragraph. The effective date of said
release shall be the date the assignee executes an assumption of such an assignment
whereby the assignee expressly agrees to assume all of Landlord’s obligations, duties,
responsibilities and liabilities with respect to this lease.

ARTICLE VIII

ASSIGNMENT AND SUBLETTING:

It is agreed that Tenant shall not assign this lease or sublet the premises to any other
person, firm or corporation without the written consent of the Landlord first had and
obtained, which consent may be withheld in the sole discretion of Landlord.

ARTICLE IX

INSURANCE:

General Liability: Tenant at its sole cost and expense, but for the mutual benefit of
Landlord and Tenant as named insureds, shall maintain commercial general liability insurance
on an “occurrence basis” against claims for “personal injury,” including without limitation,
bodily injury, death or property damage occurring upon, in or about the Demised Premises and
on, in or about the adjoining sidewalks, streets, and passageways, with a limit of not less
than one million dollars ($1,000,000) each occurrence and two million dollars ($2,000,000)
aggregate with respect to personal injury or death to any one or more persons or damage to
property. The Landlord, by written notification to Tenant, may require the limits of
general liability insurance to be increased to the extent inflation has caused the existing
limit to become commercially imprudent as generally determined by similar lease requirements
in the geographical area of the Premises.

	1.	 	Extended Coverage: Tenant at its sole cost and expense, shall. keep
the improvements on the Demised Premises insured during the Term for the mutual benefit
of Landlord and Tenant as named insureds, against loss by damage, by fire and
lightening and against loss or damage by other risks embraced by coverage of the type
now known as the Broad Form of Extended Coverage, including, but not limited to, fire,
riot, and civil commotion, vandalism and malicious mischief, extended perils (all risk)
and against such other risks or hazards as Landlord may from time to time reasonably
designate in amounts sufficient to prevent Landlord or Tenant from becoming co-insurer
under the terms of the applicable policies but in any event in an amount not less than
the full replacement cost of the

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	 	 	improvements on the Demised Premises without deduction for physical depreciation and
with not more than $2,500.00 deductible from the loss payable for any casualty. The
policies of insurance carried in accordance with this paragraph shall contain a
replacement cost endorsement. Such full replacement cost shall be determined from
time to time, but not more frequently than once in any 12 consecutive calendar
months. In all events, such insurance shall be in form and content and amount
necessary to satisfy Landlord’s first mortgage lender. Such insurance shall be
written by companies reasonably acceptable to Landlord.
	 
	2.	 	Waiver of Subrogation: Landlord and Tenant each hereby waive any and all
rights of recovery against the other, or against the partners, officers, employees,
agents and representatives of the other for loss or damage to such waiving party or its
property or the property of the other under its control to the extent that such loss or
damage is insured against under any policy in force at the time of such loss or damage.
Tenant shall, upon obtaining the policies of insurance required hereunder, give notice
to the insurance carrier or carriers that the foregoing mutual waiver of subrogation is
contained in this lease.
	 
	3.	 	Tenant’s Contents: Tenant shall assume the risk of damage to any fixtures,
goods, inventory, equipment, furniture and Leasehold improvements which remain in the
property of Tenant to as to which Tenant retains the right of removal from the Demised
Premises and Landlord shall not be liable for injury to Tenant’s business or any loss
of income wherefrom relative to such damage.
	 
	4.	 	Rental Income Insurance: Tenant shall obtain and keep in force during the term
of this Lease a policy of rental income insurance in amount adequate to cover all
rental due hereunder for a period of 12 months, with loss payable to Landlord, which
insurance shall also cover all real estate taxes and insurance costs for which Tenant
is obligated during such 12-month period.

ARTICLE X

FIRE OR OTHER CASUALTY LOSSES

	1.	 	Restoration of Damaged Premises. In the event the Demised Premises are damaged
or destroyed or rendered partially un-tenantable for their then use by fire or other
casualty, Landlord shall promptly repair (but only from insurance proceeds released by
the holder of any mortgage lien upon the Demised Premises) the Demised Premises and
restore the same to substantially the condition in which they were immediately prior to
the happening of such casualty. The Landlord’s obligation to repair shall not extend
to any improvements or additions made by the Tenant unless they become a part of the
Demised Premises.
	 
	2.	 	Abatement of Rent: Rent due and payable hereunder shall be abated, but only to
the extent of any proceeds received by Landlord from rental income insurance maintained
pursuant to this Lease during the period commencing with such damage

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	 	 	or destruction and ending with the substantial completion by Landlord of the work of
repair or reconstruction.

	3.	 	Option to Terminate: If the improvements are damaged or destroyed to the
extent that the same cannot, with reasonable diligence, be fully repaired or restored
by Landlord within 180 days after the date of the damage, the parties shall have the
option to terminate this Lease by written notice to the other party given within 45
days from the date of said damage or destruction.

ARTICLE XI

INDEMNITY

The Tenant shall indemnify and hold harmless the Landlord, including its officers, agents,
servants and employees, from and against any and all liability, loss, damage, claims,
demands, actions, causes of action, costs and expenses, including reasonable attorney’s
fees, growing out of injury to or death of persons while on the Demised Premises, or the
loss or destruction of or damage to the leased Demised Property, when such destruction or
damage occurs on the leased Demised Premises or results from or arises in any way in
connection with, or incident to the occupation or use of the leased Demised Premises by, or
the presence thereon of, the Tenant, the Tenant’s officers, agents, servants, employees,
patrons, licensees, or invitees, except to the extent caused by the negligence of the
Landlord.

ARTICLE XII

BREACH-REMEDIES:

	1.	 	Defaults: The occurrence of any one or more of the following events shall
constitute a material default and material breach of this Lease by Tenant:

	 	a.	 	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, or such
failure shall continue for a period of five days after written notice thereof
from Landlord to Tenant;
	 
	 	b.	 	The failure by Tenant to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed or preformed
by Tenant, other than those described in paragraph (i) above, where such
failure shall continue for a period of 30 days after written notice thereof
from Landlord to Tenant; provided, however, that if the nature of Tenant’s
default is such that it is capable of being cured but more than 30 days are
reasonably required for its cure, then Tenant shall not be deemed to be in
default if Tenant commences such cure within such 30-day period and thereafter
diligently prosecutes such cure to completion; or

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	 	c.	 	Insolvency: The making by Tenant of a general assignment for
the benefit of creditors. The filing by or against Tenant of a petition to
have Tenant adjudged as bankrupt or of a petition for reorganization or
arrangement under any bankruptcy law (unless, in the case of a petition filed
against the Tenant, the same is dismissed within 90 days); substantially all of
Tenant’s assets or of Tenant’s interest in this Lease, where possession is not
restored to Tenant within 30 days; or the attachment, or other judicial seizure
of substantially all of Tenant’s assets or Tenant’s interest in this Lease or
such seizure is not discharged within 30 days.

2. Remedies:

	 	a.	 	In the event of any default and breach by Tenant of any of its
obligation under this Lease and notwithstanding the vacation or abandonment of
the Demised Premises by Tenant, this Lease shall continue in effect so long as
Landlord does not expressly terminate Tenant’s right to possession in any of
the manner specified in this paragraph and Landlord may, in Landlord’s option
and without limiting Landlord in the exercise of any other rights to remedies
which it may have by reason of such default and breach, exercise all of its
rights and remedies hereunder, including without limitation:

	 	i.	 	The right to declare the term ended and to
render the Demised Premises and take possession thereof and remove all
persons therefrom, and Tenant shall have no further claim in or to the
Demised Premises under the Lease; or
	 
	 	ii.	 	The right without declaring this Lease ended to
reenter the Demised Premises, take possession thereof, remove all
persons therefrom and occupy or Lease the whole or any part thereof for
and on account of Tenant and upon such terms and conditions and for
such rent as Landlord may deem proper and to collect such rent or any
other rent that may hereafter become payable and apply the same as
provided in subparagraph (ii) below; or
	 
	 	iii.	 	The right even though Landlord may have re-let
the Demised Premises or brought an action to collect rent and other
charges without termination this Lease, to thereafter elect to
terminate this Lease and all of the rights of Tenant in and to the
Demised Premises; or
	 
	 	iv.	 	The right, without terminating this Lease to
bring an action or actions to collect rent and other charges hereunder
which are from time to time past due and unpaid or to enforce any other
provisions of this Lease imposing obligations on Tenant, it being
understood that the bringing of such action or actions shall not
terminate this Lease unless written notice of termination is given.

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	 	b.	 	Should Landlord re-let the Demised Premises under the
provisions provided above, the proceeds of any such re-letting shall first be
applied to the payment of the costs and expenses of re-letting and second to
all amounts due Landlord by Tenant hereunder.
	 
	 	c.	 	Should Landlord elect to terminate this Lease under the
provisions hereof, Landlord shall be entitled to recover immediately from
Tenant:

	 	i.	 	The worth at the time of the award of the
unpaid rent which had been earned at the time of termination;
	 
	 	ii.	 	The worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination
until the time of the award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided.
	 
	 	iii.	 	The worth at the time of the award of the
amount by which the unpaid rent for the balance of the term after the
time of award exceeds the amount of such rental loss that Tenant proves
could reasonably be avoided.
	 
	 	iv.	 	Any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant’s failure
to perform its obligations under the Lease or which in the ordinary
course of things would be likely to result therefrom.

For the purposes of computing “the worth at the time of the award” of the amount specified
in Subparagraph c. above, such amount shall be discounted at the discount rate of the
Federal Reserve Bank of Kansas City at the time of the award. For purposes of computing
“the worth at the time of the award” under Subparagraphs a. and b. above, an interest rate
of 10% per annum shall be used.

	 	d.	 	If Landlord shall elect to reenter the Demised Premises as
provided above, Landlord shall not be liable for damages by reason of any
reentry so long as Landlord has acted in a reasonable manner in effecting such
re-entry. Except for claims based upon negligence, malicious, reckless or
willful and wanton acts of Landlord, Tenant hereby waives all claims and
demands against Landlord for damages or loss arising out of or in connection
with any re-entering and taking possession of the Demised Premises and waives
all claims for damages or loss arising out of or in connection with any
destruction or damage to the Demised Premises and any loss of property
belonging to Tenant or any person, firm or corporation which may be in or upon
the Demised Premises at the time of such entry.
	 
	 	e.	 	Landlord shall not be deemed to have terminated this Lease,
Tenant’s right to possession of the Premises or the liability of Tenant to pay
rent thereafter to accrue or its liability for damages under any of the
provisions hereof by any reentry hereunder or by any action in unlawful
detainer or otherwise to

9

 

	 	 	 	obtain possession of the Demised Premises, unless Landlord shall notify
Tenant in writing that Landlord has so elected to terminate this Lease.
Tenant agrees that the service by Landlord of any notice pursuant to the
unlawful detainer statutes or comparable statutes of the State or locality
in which the Demised Premises are located and the surrender of possession
pursuant to such notice shall not (unless Landlord elects to the contrary at
the time of or any time subsequent to the service of such notice and such
election shall be evidenced by a written notice to Tenant), be deemed to be
a termination of this Lease or Tenant’s obligation hereunder. No reentry or
reletting under this paragraph shall be deemed to constitute a surrender or
termination of this Lease or any of the rights, options, elections, powers
and remedies reserved by Landlord hereunder or a release of Tenant from any
of its obligations hereunder, unless Landlord shall specifically notify
Tenant, in writing, to that effect. No such reletting shall preclude
Landlord from thereafter at any time terminating this Lease as herein
provided.

	 	f.	 	All fixtures, furnishings, equipment and other personal
property of Tenant remaining on the Demised Premises at the time that Landlord
takes possession of thereof may at Landlord’s election be stored at Tenant’s
expense or sold or otherwise disposed of by Landlord in any manner permitted by
law.
	 
	 	g.	 	Any right or remedy conferred upon Landlord under this Lease is
not to be deemed exclusive of any other right or remedy that it may have under
law and all rights and remedies shall be cumulative.

3. TENANT’S REMEDIES:

Upon Landlord’s breach of this Lease, Tenant shall have the right to give notice to Landlord
specifying such breach and allowing fifteen (15) business days thereafter for cure of such
breach. If the breach is of such a nature that it cannot be cured by diligent effort during
such grace period, Landlord may cure its breach by undertaking a course of performance
within such grace period and diligently pursuing it thereafter. If Landlord fails to cure
its breach within said grace period, Tenant may pursue all remedies available to Tenant at
law or in equity, including the right to immediately terminate this Lease.

ARTICLE XIII

INSPECTION:

Tenant shall permit Landlord and its agents to enter upon the Demised Premises at all
reasonable times for the purpose of inspecting the same, and at any time within thirty (30)
days prior to the expiration of this lease or any extension thereof to place upon the
premises any usual or ordinary “To Let” or “To Lease” signs.

10

 

ARTICLE XIV

LANDLORD’S COVENANT OF TITLE AND QUIET ENJOYMENT:

So long as Tenant is not in default hereunder, Tenant shall have the right to quiet and
peaceful possession of the Demised Premises.

ARTICLE XV

LANDLORD’S RIGHT TO PERFORM:

In the event Tenant is in default hereunder, the Landlord may cure such default on behalf of
Tenant in which even Tenant shall reimburse Landlord for all sums paid to effect such cure
together with interest at the rate of 9% per annum and reasonable attorney’s fees.

ARTICLE XVI

MISCELLANEOUS:

	1.	 	The Landlord shall not be responsible for any debts, bills, or obligations
incurred by the Tenant with respect to improvements made by the Tenant on the Demised
Premises including those improvements made by Tenant specified in Article IV above, and
no person, firm or corporation shall have the right to mechanic’s or material men’s
lien against the Demised Premises for the cost of any improvements made by the Tenant.
The Landlord shall have the right to post statutory notice or take such other steps, as
Landlord deems necessary to protect the premises against the possibility of mechanics
or material men’s liens.
	 
	2.	 	This lease constitutes a merger of all proposals, negotiations and
representations with respect to the subject matter and provisions hereof, and may be
altered, amended or modified only in writing signed by a representative of the Landlord
authorized to sign this instrument and by an authorized representative of the Tenant.
	 
	3.	 	Estoppel Certificates. Tenant shall, within ten (10) days of submission to
Tenant, execute and deliver to Landlord an estoppel certificate in form and content as
may reasonably be required by Landlord, a prospective purchaser of the property or a
lender.
	 
	4.	 	Holding Over. In the event Tenant should hold over after the expiration of
this lease, Tenant shall be deemed a tenant from month to month at rental equal to 110%
of the rent payable just prior to the expiration of the lease.
	 
	5.	 	Attorneys Fees. In the event of a dispute between the parties with respect to
any matter hereunder or in the event Landlord employs attorneys to represent it in

11

 

	 	 	 	conjunction with enforcement of this lease, the prevailing party in any such dispute
shall be entitled to recover their costs, witness fees and attorneys fees incurred.
	 
	 	6.	 	Venue. In the event of any dispute between the parties, the parties will
attempt in good faith to resolve any controversy or claim arising out of or relating to
this Agreement within 30 days by negotiations; if resolution cannot be achieved, the
parties agree that the proper jurisdiction for such dispute shall be in the District
Court of Weld County, Colorado and both parties hereby waive any right to trial by a
jury.
	 
	 	7.	 	Condemnation. In the event all or any portion of the property is condemned by
a public authority, the entire condemnation award shall be the property of the Landlord
and this lease shall terminate if such condemnation materially interferes with Tenant’s
use of the property.
	 
	 	8.	 	Written notices to the Landlord hereunder shall, until further notice by the
Landlord, be addressed to Landlord at 4250 W. 16th St., #48, Greeley, Colorado 80634,
and written notices to Tenant hereunder shall, until further notice, by or on behalf of
Tenant be addressed to Tenant at 4701 Royal Vista Circle, Fort Collins, Colorado 80528.
	 
	 	9.	 	All notices shall be delivered personally or deposited in the United States
Post Office properly addressed as aforesaid, postage prepaid, for delivery by
registered or certified mail.
	 
	 	10.	 	This lease and all of its provisions shall be binding upon and shall inure to
the benefit of the successors and assigns of the Tenant and the personal
representatives and assigns of the Landlord.
	 
	 	11.	 	The captions and titles of Articles of this lease are for convenience only and
are not a part of the lease and do not in any way limit or amplify tire terms and
provisions of this lease.

ARTICLE XV1I

This Lease, at Landlord’s option, shall be subordinate to any mortgage of deed of trust now or
hereafter placed on the Demised Premises by the Landlord or its officers, employees, agents or
representatives. Tenant agrees to execute all reasonable subordination agreements requested of it
by Landlord in conjunction with the sale or mortgaging of the Demised Premises provided that such
party receiving the subordination agrees not to disturb or interfere with Tenant’s possession of
the Demised Premises so long as Tenant is not in default under the Lease. Such subordination
agreements shall be signed and returned to Landlord within 30 days of receipt by Tenant.

12

 

IN WITNESS WHEREOF the parties hereto have hereunto subscribed their names the day and year first
above written.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	MEYERS 4701, LLC, Landlord	 	MINER AND MINER, CONSULTING

ENGINEERS, INC., Tenant
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By

	 	      /s/ Roger W. Meyers
 

      Roger W. Meyers
	 	 
	 	By
	 	      /s/ Jeffrey R. Meyers
 
      
Jeffrey R. Meyers, P.E.	 	 	 	 	 	 
	 

	 	      Manager
	 	 	 	 	 	      President	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	ATTEST:
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By
	 	      /s/ Drew Ditter	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
      
Drew Ditter	 	 	 	 	 	 

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