Document:

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.

 

 

 

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.

 

 

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

 

 

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 (11⁄2)
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

 

 

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

 

 

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:

 

 

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.

 

 

                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.

 

 

(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.

 

 

(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.

 

 

	
  Landlord:

  	
   

  	
  TENANT:

  
	
  Dikeou Realty

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ John Dikeou

  	
   

  	
   

  
	
  By: Jonn P. Dikeou

  	
   

  	
  By:

  
	
  Its:

  	
   

  	
  Its:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
  Its:

  

 

 

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.

 

 

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.

 

 

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

 

 

(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.

 

 

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:

  

 

 

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: PresidentExhibit 10.7

 

CONSULTING AGREEMENT

 

AGREEMENT made
as of December 4th, 2007, by and between LANCE C. MIGLIACIO, with offices at
2822 Stonnington Court, Highlands Ranch, Colorado, 80126 (“Consultant”), and VCG
HOLDING CORPORATION, INC., with offices at 390 Union Boulevard, Suite 540,
Lakewood Colorado, 80228 (“Client”).

 

WHEREAS, the Client desires
professional guidance and advice regarding marketing, promotions, special
events at it’s locations (“Services”) and desires Consultant to aid it in these
matters; and

 

WHEREAS, Consultant has expertise in such areas and is
willing to act as a consultant to Client upon the terms and conditions set
forth in this Agreement;

 

NOW, THEREFORE, in consideration of the foregoing
and the mutual promises herein contained, the parties hereto agree as follows:

 

1.             Duties,
Scope of Agreement, and Relationship of the Parties.

 

(a)                                  Client hereby agrees to retain Consultant as an advisor and consultant
on marketing, promotions and special events (“Services”), consistent with
Consultant’s expertise and ability, and Consultant agrees to consult with
Client during the term of this Agreement. 
Client understands that Consultant has many other business interests and
will devote as much time as is necessary to perform his duties under this
Agreement.  In addition, Client
understands that Consultant’s efforts on behalf of his other interests are the
sole and separate property of Consultant.

 

(b)                                 The services rendered by Consultant to Client pursuant to this
Agreement shall be as an independent contractor, and this Agreement does not
make Consultant the employee, agent, or legal representative of Client for any
purpose whatsoever, including without limitation, participation in any benefits
or privileges given or extended by Client to its employees.  No right or authority is granted to
Consultant to assume or to create any obligation or responsibility, express or
implied, on behalf of or in the name of Client. 
Client shall not withhold for Consultant any federal or state taxes from
the amounts to be paid to Consultant hereunder, and Consultant agrees that he
will pay all taxes due on such amounts.

 

2.             Fee.

 

(a)                                  In consideration for
performing the Services, the Client shall pay to Consultant a fee (“Fee”)
consisting of eighty thousand (80,000) shares of the common stock (restricted)
of client.  All shares when issued shall
be fully paid and non-assessable.  This Fee
is due and payable upon the approval of the American stock exchange for
issuance, if required, approval from the American Stock Exchange 

 

 

1

 

 

shall
be applied before December 11, 2007. 
Any shares issued pursuant to this Agreement shall be issued in
certificate form to Lance C. Migliacio.

 

(b)                                 Consultant acknowledges that
the common shares issued pursuant to this Agreement (i) have not been
registered under the Securities Act of 1933, as amended (the “Act”), (ii) cannot be offered or sold
except pursuant to a registration statement under the Act or an exemption from
registration under the Act, and (iii) are being acquired for investment
and not with a view to the distribution thereof.  Consultant represents that he is an “accredited
investor” as such term is defined by Rule 501(a) of Regulation D and
also acknowledges he is capable of evaluating the merits and risks of an
investment in the common shares of VCG.

 

3.                                       Expenses.  Client shall reimburse Consultant for all
reasonable and necessary expenses incurred by him in carrying out his duties
under this Agreement provided Consultant submits related receipts and
documentation with his request for reimbursement and obtains approval from
Client.

 

4.                                       Term.  This Agreement shall continue in effect for a
period of five (5) years from the date hereof.  Subject to the continuing obligations of Consultant
under Section 5 below, either party may terminate this Agreement at any
time if the other party shall fail to fulfill any material obligation under
this Agreement and shall not have cured the breach within 10 days after having
received notice thereof.  Termination or
expiration of this Agreement shall not extinguish Client’s obligation to pay
Consultant’s compensation pursuant to Section 2 hereof.

 

5.             Confidential
Information.

 

(a)                                  “Confidential Information,” as used in this Section 5, means information
that is not generally known and that is proprietary to Client or that Client is
obligated to treat as proprietary.  This
information includes, without limitation:

 

(i)                                     trade secret information about Client and its products and/or services;

 

(ii)                                  information concerning Client’s business as Client has conducted it
since Client’s incorporation or as it may conduct it in the future; and

 

(iii)                               information concerning any of Client’s past, current, or possible
future products and/or services, including (without limitation) information
about Client’s research, accounting, marketing, or operations.

 

(b)                                 Any information that Consultant reasonably considers Confidential
Information, or that Client treats as Confidential Information, will be
presumed to be Confidential Information (whether Consultant or others
originated it and regardless of how it was obtained).

 

 

2

 

 

(c)                                  Except as required in his duties to Client, Consultant will never,
either during or after the term of this Agreement, use or disclose Confidential
Information to any person not authorized by Client to receive it.

 

(d)                                 If this Agreement is terminated, Consultant will promptly turn over to
Client all records and any compositions, articles, and other items that
disclose, describe, or embody Confidential Information, including all copies,
reproductions, and specimens of the Confidential Information in its possession,
regardless of who prepared them.  The
rights of Client set forth in this Section 5 are in addition to any rights
of Client with respect to protection of trade secrets or confidential
information arising out of the common or statutory laws of the State of Colorado
or any other state or any country wherein Consultant may from time to time perform
services pursuant to this Agreement. 
This Section 5 shall survive the termination or expiration of this
Agreement.

 

6.                                       Inside Information—Securities Laws
Violations.  In the
course of the performance of Consultant’s duties, it is expected that Consultant
will receive information that is considered material inside information within
the meaning and intent of the federal securities laws, rules, and
regulations.  Consultant will not
disclose this information directly or indirectly or as a basis for advice to
any other party concerning any decision to buy, sell, or otherwise deal in
Client’s securities

 

7.             Miscellaneous.

 

(a)                                  Successors and Assigns.  This Agreement is binding on and inures to
the benefit of Client, its successors and assigns, all of which are included in
the term the “Client” as it is used in this Agreement and upon Consultant, his
successors and assigns.  Neither this
Agreement nor any duty or right hereunder will be assignable or otherwise
transferable by either party without the written consent of the other party,
except that Client shall assign this Agreement in connection with a merger,
consolidation, assignment, sale or other disposition of substantially all of
its assets or business.  This Agreement
will be deemed materially breached by Client if its successor or assign does
not assume substantially all of Client’s obligations under this Agreement.

 

(b)                                 Modification.  This Agreement may be modified or amended
only by a writing signed by both Client and Consultant.

 

(c)                                  Governing Law.  The laws of Colorado will govern the
validity, construction, and performance of this Agreement.  Any legal proceeding related to this
Agreement will be brought in an appropriate Colorado court, and both Client and
Consultant hereby consent to the exclusive jurisdiction of that court for this
purpose.

 

(d)                                 Construction.  Wherever possible, each provision of this
Agreement will be interpreted so that it is valid under the applicable
law.  If any provision of this Agreement
is to any extent invalid under the applicable law, that provision will 

 

 

3

 

 

still be effective to the extent it remains
valid.  The remainder of this Agreement
also will continue to be valid, and the entire Agreement will continue to be
valid in other jurisdictions.

 

(e)                                  Waivers.  No failure or delay by either Client or
Consultant in exercising any right or remedy under this Agreement will waive
any provision of the Agreement, nor will any single or partial exercise by
either Client or Consultant of any right or remedy under this Agreement
preclude either of them from otherwise or further exercising these rights or
remedies, or any other rights or remedies granted by any law or any related
document.

 

(f)                                    Captions.  The headings in this Agreement are for
convenience only and do not affect this Agreement’s interpretation.

 

(g)                                 Entire Agreement.  This Agreement supersedes all previous and
contemporaneous oral negotiations, commitments, writings, and understandings
between the parties concerning the matters in this Agreement.

 

(h)                                 Notices.  All notices and other communications required
or permitted under this Agreement shall be in writing and sent by registered
first-class mail, postage prepaid, and shall be effective five days after
mailing to the addresses stated below. 
These addresses may be changed at any time by like notice.

 

	
  In the case of Client:

  	
   

  	
  VCG Holding Corporation, Inc.

  
	
   

  	
   

  	
  390 Union Blvd., Suite 540

  
	
   

  	
   

  	
  Lakewood, Colorado 80228

  
	
   

  	
   

  	
   

  
	
  In the case of Consultant:

  	
   

  	
  Lance C. Migliaccio

  
	
   

  	
   

  	
  2822 Stonnington Court

  
	
   

  	
   

  	
  Highlands Ranch, Colorado 80126

  

 

IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date and year first above written.

 

	
  “Consultant”

  	
  “Client”

  
	
   

  	
   

  	
  VCG Holding Corporation, Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Lance Migliaccio

  	
   

  	
  By:

  	
  /s/ Troy Lowrie

  	
   

  
	
   

  	
  Lance C. Migliaccio,

  	
   

  	
  Troy Lowrie, President

  
						

 

 

 

4

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