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EXECUTION VERSION
SUBLEASE AGREEMENT
CHAPEL SQUARE – UNIT D-101 – BUILDING D
THIS SUBLEASE AGREEMENT (the “Sublease”) is made as of the 1st day of
November, 2021 (the “Effective Date”) between VAIL CLINIC, INC., d/b/a VAIL HEALTH,
a Colorado non-profit corporation (“Sublandlord”) and COUNTY OF EAGLE, STATE OF
COLORADO, a body corporate and politic (“Subtenant”).
RECITALS
A. Sublandlord leases certain space known and numbered as Unit D-101 containing
approximately 1,646 rentable square feet of space (the “Premises”) located in Avon, Colorado,
which Premises is located in the building now known as Chapel Square, Building D (“Chapel
Square Building D”), situated on Tract B-2, Amended Final Plat of Chapel Square Subdivision,
a Re-subdivision of Lot 22 and Tract B-2, Chapel Square Subdivision, according to the Plat thereof
recorded May 14, 1999, Reception No. 696103, County of Eagle, Colorado (“Tract B-2”) pursuant
to that certain:
(i) Lease Agreement dated February 10, 2011 between Chapel Square Ventures,
L.P., as landlord and Sublandlord, as tenant (the “Initial Lease”), as amended by
(ii) First Amendment to Lease Agreement dated May 18, 2015 between Chapel
Square Building D, LLC (successor to Chapel Square Ventures, L.P.), as landlord and
Sublandlord, as tenant (the “First Amendment”), as amended by
(iii) Second Amendment to Lease Agreement dated June 15, 2020 between CSB
Properties LLC (successor to Chapel Square Building D, LLC), as landlord (the “Prime
Landlord”) and Sublandlord, as tenant (the “Second Amendment”), and as amended by
(iii) Third Amendment to Lease Agreement dated October 7, 2021 between Prime
Landlord, as landlord and Sublandlord, as tenant (the “Third Amendment, and
collectively with the Initial Lease, the First Amendment and the Second Amendment, the
“Prime Lease”), a true correct and complete copy of which Prime Lease is attached hereto
as Exhibit A.
B. Sublandlord desires to sublease to Subtenant and Subtenant desires to sublease
from Sublandlord, the entire Premises leased to Sublandlord under the Lease, in accordance with
the terms of this Sublease.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the parties agree as follows:
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1. Recitals and Capitalized Terms. The Recitals set forth above are incorporated
herein by reference. Capitalized terms not otherwise defined herein shall have the meaning given
them in the Prime Lease.
2. Subleased Premises. Sublandlord hereby subleases to Subtenant and Subtenant
hereby subleases from Sublandlord, the entire Premises leased to Sublandlord under the Prime
Lease, as more fully described therein (the “Subleased Premises”).
3. Condition of Subleased Premises. Subtenant acknowledges that it has inspected
the Subleased Premises and does hereby accept the Subleased Premises in its AS-IS, WHERE-IS
CONDITION, WITH ALL FAULTS and without any representation or warranty by Sublandlord,
its agents or employees, or otherwise. Subtenant further acknowledges and agrees that
Sublandlord has not made and does not make any representations or warranties with respect to the
Chapel Square Building D.
4. Term of Sublease.
a. Sublandlord hereby leases to Subtenant the Subleased Premises for the
period (the “Sublease Term”) from November 1, 2021 (the “Sublease Commencement Date”),
through and including October 31, 2022, provided that no if Event of Default shall have occurred
and be continuing, the Sublease Term shall automatically be extended for five (5) additional
successive twelve (12) month periods through October 31, 2027 (the “First Expiration Date”),
unless within ninety (90) days before the end of any twelve (12) month period, Subtenant provides
written notice to Sublandlord that it is terminating this Sublease at the end of the then applicable
twelve (12) month period.
b. By written notice to Sublandlord given on or before that date which is two
hundred ten (210) days before the First Expiration Date, Subtenant may extend the Sublease Term
through and including October 31, 2028, provided that if no Event of Default shall have occurred
and be continuing, the Sublease Term shall automatically be extended for two (2) additional
successive twelve (12) month periods through October 31, 2030 (the “Second Expiration Date”),
unless within ninety (90) days before the end of any twelve (12) month period, Subtenant provides
written notice to Sublandlord that it is terminating this Sublease at the end of the then applicable
twelve (12) month period.
c. By written notice to Sublandlord given on or before that date which is two
hundred ten (210) days before the Second Expiration Date, Subtenant may extend the Sublease
Term through and including October 31, 2031, provided that if no Event of Default shall have
occurred and be continuing, the Sublease Term shall automatically be extended for two (2)
additional successive twelve (12) month periods through October 31, 2033 (the “Final Expiration
Date”), unless within ninety (90) days before the end of any twelve (12) month period, Subtenant
provides written notice to Sublandlord that it is terminating this Sublease at the end of the then
applicable twelve (12) month period.
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d. Notwithstanding the foregoing, any expiration or termination of the Prime
Lease prior to the expiration or termination of this Sublease, shall automatically terminate this
Sublease.
e. Notwithstanding anything to the contrary contained in this Sublease,
Subtenant shall have no obligations under this Sublease after, nor shall any payments be made to
Sublandlord in respect of any period after December 31 of any year, without an appropriation for
the obligations by Subtenant under this Sublease in accordance with a budget adopted by the Board
of County Commissioners of the Subtenant in compliance with Article 25, title 30 of the Colorado
Revised Statutes, the Local Government Budget Law (C.R.S. 29-1-101 et. seq.) and the TABOR
Amendment (Colorado Constitution, Article X, Sec. 20). Subtenant represents and warrants that
the Board of County Commissioners of the Subtenant have adopted a budget which contains an
appropriation for the obligations of Subtenant under this Sublease, including the obligation to
make payments hereunder, at least through October 31, 2022. The foregoing shall not be deemed
to release Subtenant from any obligation under this Sublease first arising prior to December 31 of
any year, including December 31, 2022, to the extent that such obligations survive any termination
of this Sublease.
5. Rent. Subtenant shall pay all amounts in the nature of Rent which Sublandlord is
obligated to pay under the Prime Lease, including, without limitation, any Base Rent (provided
that Subtenant shall only be obligated to pay the Base Rent amounts set forth in this Section 5),
Taxes, Operating Costs, and any other Additional Rent payable under the Prime Lease. For the
purposes of this Sublease, Base Rent payable during each year through the First Expiration Date
(unless terminated as provided in Section 4 above) shall equal:
Period
Base Rent
(Annual)
Base Rent
(Monthly Installments
November 1, 2021 – October 31, 2022 $56,408.16 $4,700.68
November 1, 2022 – October 31, 2023 $58,100.40 $4,841.70
November 1, 2023 – October 31, 2024 $59,843.40 $4,986.95
November 1, 2024 – October 31, 2025 $61,638.72 $5,136.56
November 1, 2025 – October 31, 2026 $63,487.92 $5,290.66
November 1, 2026 – October 31, 2027 $65,392.56 $5,449.38
Provided no Event of Default then exists under this Sublease (exclusive of Taxes,
Operating Costs, and any other Additional Rent which shall not be abated) Base Rent due and
payable for each of the four (4) months commencing on November 1, 2021 and continuing through
February 28, 2022 shall be abated. In the event any Event of Default occurs after the Effective
Date, then all such previously abated Base Rent shall be immediately due and payable.
Base Rent during each year of this Sublease after the First Expiration Date (if extended as
provided in Section 4 above) shall equal the Base Rent in effect during the immediately preceding
year increased by three percent (3%).
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At Sublandlord’s written direction, all Rent and other such amounts shall be paid by
Subtenant directly to Sublandlord or Prime Landlord on or before the date such amounts are due
under the Prime Lease.
6. Permitted Use. Notwithstanding anything in the Prime Lease to the contrary,
Subtenant may only use the Subleased Premises as a facility providing governmental services,
including facilities used for the application, processing, and issuance of vehicle registrations,
permits, and licenses (including marriage licenses), document recording functions, elections
administration, public health administration (including the operation of public health clinics),
human services administration and related meeting activities, and other related administrative
functions, including, without limitation, a small business development center (the “Permitted
Use”) and for no other purpose, without Sublandlord’s consent, which consent may not be
unreasonably withheld by Sublandlord, and without the prior written consent of Prime Landlord.
Subtenant acknowledges and agrees that it shall not be unreasonable for Sublandlord to withhold
or to deny its consent of any modification to the definition of Permitted Use if Prime Landlord
does not approve of such modification.
7. Tenant Improvement Allowance. Subtenant shall be entitled to the receipt of the
Refurbishment Allowance made available by Prime Landlord under the Third Amendment as
described below. Notwithstanding the foregoing or anything to the contrary contained herein,
Sublandlord shall have no obligation to provide Subtenant with such Refurbishment Allowance to
the extent not provided by the Prime Landlord.
a. Provided no Event of Default then exists, Sublandlord shall provide
Subtenant (to the extent provided by the Prime Landlord) with an allowance in an amount of Forty-
One Thousand One Hundred Fifty and 00/100 Dollars ($41,150.00) (the “Refurbishment
Allowance”) to reimburse Subtenant for its direct out-of-pocket costs for refurbishing the
Subleased Premises and making alterations to the Subleased Premises pursuant to Section 11 of
the Initial Lease, all of which is performed in accordance with the Prime Lease, during the period
commencing on the Effective Date and ending on the date which is three (3) months after the
Effective Date (the “Reimbursement Period”), which Refurbishment Allowance shall be paid as
provided below.
b. Except as expressly provided below, the Refurbishment Allowance may
only be used for costs associated with refurbishing the Subleased Premises (by way of example,
re-carpeting and re-painting) and making permanent alterations to the Subleased Premises pursuant
to Section 11 of the Initial Lease and not for the purchase or installation of any equipment or other
personal property of Subtenant (“Refurbishment Allowance Items”). All Refurbishment
Allowance Items for which the Refurbishment Allowance has been made available shall be
deemed Prime Landlord’s property under the terms of the Prime Lease. As requested by Subtenant
in writing prior to the expiration of the Reimbursement Period, portions of the Refurbishment
Allowance for the Refurbishment Allowance Items may be disbursed in installments, no more
frequently than monthly, based on the costs of such Refurbishment Allowance Items incurred since
the date of the last disbursement, as evidenced by bills and invoices in detail reasonably
satisfactory to Sublandlord and Prime Landlord, and further conditioned upon (i) Sublandlord’s
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and Prime Landlord’s confirmation that the work associated with the applicable Refurbishment
Allowance Item(s) has been completed in substantial accordance with the approved plans and
specifications and working drawings, if applicable, and in a good and workmanlike manner; and
(ii) Sublandlord and Prime Landlord having received contractors affidavits and waivers of lien, all
in form and substance reasonably acceptable to Sublandlord and Prime Landlord from all
contractors, subcontractors and materialmen who supplied labor and/or materials with respect to
the applicable Refurbishment Allowance Item(s).
c. If all or any portion of the Refurbishment Allowance remains unused and
unrequested by Subtenant at the expiration of the Reimbursement Period, Subtenant shall not be
entitled to any unused and unrequested Refurbishment Allowance for the payment of costs
incurred with respect to Reimbursement Allowance Items, except that, provided no Event of
Default has occurred and is continuing, Subtenant shall be entitled to apply any such unused and
unrequested Refurbishment Allowance toward its Base Rent obligations coming due after the
expiration of the Reimbursement Period.
8. Incorporation of Prime Lease Terms.
d. Except as set forth in this Sublease, the terms of the Prime Lease are
incorporated herein by reference, and all remedies, obligations, rights of entry, rights of
enforcement, indemnifications, releases, waivers, and rights to payment or reimbursement are
hereby imposed upon the parties hereto, with the Sublandlord being substituted for the Landlord
in the Prime Lease, the Subtenant being substituted for the tenant in the Prime Lease and the
Subleased Premises being substituted for the premises in the Prime Lease.
e. Notwithstanding the foregoing, Subtenant shall perform and observe the
terms and conditions to be performed on the part of Sublandlord, as tenant under the provisions of
the Prime Lease, except (i) as expressly modified and amended by and as set forth in this Sublease,
and (ii) for the performance of those terms and conditions the performance and observance of
which by Sublandlord and Subtenant that would be nonsensical, prohibited, or contradictory in the
context of this Sublease (and the provisions hereof), in which event the parties shall agree as to the
reasonable interpretation of such requirement in the context of this Sublease and given the spirit
and intentions of the parties hereto.
f. In addition, Sublandlord shall not be obligated to perform any of the
obligations of Prime Landlord under the Prime Lease with respect to the Subleased Premises,
however with respect to any such Prime Landlord obligations, Subtenant shall be entitled to all the
benefits under the Prime Lease, subject to any provisions of this Sublease, and shall be deemed to
be a third-party beneficiary of Sublandlord, as tenant, with respect thereto. In no event shall
Subtenant be entitled to enforce any such obligations against Prime Landlord or Sublandlord.
Subtenant agrees that neither Prime Landlord nor Subtenant shall be in privity with one another
with respect to the Prime Lease, but Sublandlord shall use commercially reasonable efforts to cause
the Prime Landlord to perform such obligations set forth in the Prime Lease with respect to the
Subleased Premises for the benefit of the Subtenant.
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g. In addition, this Sublease shall not incorporate and Subtenant shall have no
rights to exercise any of the following provisions of the Prime Lease:
Initial Lease
i. Section 2 - Term
ii. Section 3 – Delay in Commencement
iii. Sections 4.1(a) –(e) and last sentence of Section 4.1 – Base Rental
iv. Section 4.2 - Renewal Term(s) Base Rent, except Subtenant may
extend the Sublease as set forth in Section 4 of this Sublease
v. Section 12 – Brokers
vi. Section 21 - First Sentence – Use of Premises, except Subtenant may
only use the Subleased Premises for the Permitted Use described in
as set forth in Section 6 of this Sublease and those uses consented to
by Sublandlord and Prime Landlord under Section 6 of this Sublease
vii. Section 31 – Assignment/ Right of First Refusal
viii. Section 37 – Option to Extend, except Subtenant may extend the
Sublease as set forth in Section 4 of this Sublease
ix. Section 43.3- Subordination of Mortgage, that portion of the first
sentence beginning with the words “provided however, Landlord
shall obtain …” and continuing through the end of the first sentence
ending “… and cure periods.” The intent of the deletion of the
foregoing referenced clause is to clarify that neither Sublandlord nor
Prime Landlord shall have an obligation to deliver a subordination,
non-disturbance, and attornment agreement to Subtenant.
x. Section 50 - Names of Notice Parties – Notice Procedure
First Amendment
i. Section 1 - Recitals
ii. Section 2 - Extension of Term; Expiration Date, except Subtenant
may extend the Sublease as set forth in Section 4 of this Sublease
iii. Section 3 – Terms of Extension, except Subtenant may extend the
Sublease as set forth in Section 4 of this Sublease
iv. Section 4 - Early Termination Right; Early Termination Payment
v. Section 5 – Permitted Transfers
vi. Section 6 – Notices
vii. Section 7 – Brokerage
Second Amendment
i. Section 1- Recitals
ii. Section 2 - Extension of Term; Expiration Date, except Subtenant
may extend the Sublease as set forth in Section 4 of this Sublease
iii. Section 3 – Terms of Extension, except Subtenant may extend the
Sublease as set forth in Section 4 of this Sublease
iv. Section 4 - Early Termination Right; Early Termination Payment
v. Section 5 – Notices
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vi. Section 6 – Brokerage
Third Amendment
i. Section 1 – Recitals
ii. Section 2 - Extension of Term, except Subtenant may extend the
Sublease as set forth in Section 4 of this Sublease
iii. Section 3 – Base Rent, except Tenant shall pay Rent as set forth in
Section 5 of this Sublease
iv. Section 4 – Tenant Improvement Allowance, except Subtenant shall
be entitled to the receipt of the Refurbishment Allowance as set forth
in Section 7 of this Sublease
v. Section 5 – Exclusive Use
vi. Section 6 – Permitted Use, except Subtenant may only use the
Subleased Premises for the Permitted Use described in as set forth
in Section 6 of this Sublease and those uses consented to by
Sublandlord and Prime Landlord under Section 6 of this Sublease
vii. Section 7 – Permitted Sublease
viii. Section 13 – Notices
ix. Section 14 – Brokerage
9. Additional Covenants with Respect to the Prime Lease.
a. Subtenant covenants and agrees that Subtenant will comply with all of the
terms and conditions of the Prime Lease and the obligations of Sublandlord as tenant thereunder
with respect to the Subleased Premises and as modified by this Sublease, and not do anything that
would constitute a default under or otherwise violate the terms of the Prime Lease or omit to do
anything that Subtenant is obligated to do under the terms of this Sublease so as to cause a default
by Sublandlord, as tenant under the Prime Lease or a termination of the Prime Lease.
b. Sublandlord covenants and agrees that Sublandlord will comply with all of
the terms and conditions of the Prime Lease and the obligations of Sublandlord, as tenant
thereunder, and not do anything that would constitute a default under the Prime Lease or omit to
do anything so as to cause a default by Sublandlord, as tenant under the Prime Lease or a
termination of the Prime Lease.
10. Subordination. This Sublease and all rights of Subtenant hereunder and with respect
to the Prime Leased Premises are subject and subordinate to the terms, conditions, and provisions
of the Prime Lease and any Mortgage (as hereinafter defined) which may now or hereafter
encumber the Building or any interest of the Prime Landlord therein. This Sublease shall not be
deemed in any way or manner a modification of the Prime Lease or a release of Sublandlord from
any and all obligations to be performed by Sublandlord as the lessee under the Prime Lease.
Notwithstanding anything to the contrary contained in this Sublease, nothing herein shall amend
the terms of the Prime Lease or increase Prime Landlord’s obligations or liabilities under the Prime
Lease or otherwise. To the extent that Prime Landlord’s consent or approval is required pursuant
to the terms of the Prime Lease, Prime Landlord’s consent or approval shall be required in this
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Sublease, and in no event may Sublandlord exercise such consent or approval rights in lieu of
Prime Landlord’s consent or approval rights. “Mortgage” shall mean all of Prime Landlord’s
mortgages, deeds of trust, ground leases, and other such encumbrances now or hereafter placed
upon the Building, or any part thereof, and all renewals, modifications, consolidations,
replacements or extensions thereof, and all indebtedness now or hereafter secured thereby and all
interest thereon. The provisions of this Section with respect to the Mortgage shall be self-operative;
however, as provided in Section 43.5 of the Initial Lease, Subtenant shall execute and deliver,
within ten (10) days after request therefor, such documentation as Prime Landlord or any lender
of Prime Landlord may reasonably require from time to time.
11. Notices. All notices to be given hereunder shall be delivered in the manner set forth
for the giving of notices pursuant to Section 50 of the Initial Lease addressed:
a. if to Sublandlord, to (i) Vail Clinic, Inc., d/b/a Vail Health, 181 West
Meadow Drive, Vail, CO 81657, Attention: President and Chief Executive Officer, and with a
copy to (ii) Vail Clinic, Inc., d/b/a Vail Health, 181 West Meadow Drive, Vail, CO 81657,
Attention: Chief Real Estate Officer.
b. if to Subtenant, to (i) Eagle County, Colorado, 500 Broadway, Post Office
Box 850, Eagle, CO 81631, Attention: Kelley Collier, Chief Operations Officer and with a copy
to (ii) the Eagle County Attorney’s Office, 500 Broadway, Post Office Box 850, Eagle, CO 81631,
Attention: County Attorney.
Sublandlord agrees that upon receipt of any and all notices, requests, demands, and
other communications made by Prime Landlord, that Sublandlord shall forward a copy thereof to
Subtenant in the manner set forth herein.
12. Assignment and Subletting. Subtenant shall not have the right to assign, mortgage,
or otherwise encumber, pledge, hypothecate, or permit any lien to attach to this Sublease (or
Subtenant’s interest therein) or to sublet the whole or any part of the Subleased Premises, whether
voluntarily or by operation of law, or permit the use or occupancy of the Subleased Premises by
anyone other than Subtenant (each a “Transfer”), without the prior written consent of
Sublandlord, which consent may not unreasonably be withheld by Sublandlord, and without the
prior written consent of Prime Landlord, and such restrictions shall be binding upon any assignee
or subtenant to which Sublandlord and Prime Landlord have consented. Subtenant acknowledges
and agrees that it shall not be unreasonable for Sublandlord to withhold or to deny its consent to
any Transfer if Prime Landlord does not approve of such Transfer.
13. Brokers. Sublandlord and Subtenant each represent and warrant to the other that
they have dealt with no broker or other person claiming a commission in connection with this
Amendment. To the extent permitted by law, each party shall indemnify, defend and hold the
other party harmless for any breach of such representation and warranty.
14. Sublease Agreement for Unit D-102. This Sublease is being executed
simultaneously with that certain Sublease Agreement dated as of the date hereof between
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Sublandlord and Subtenant with respect to Unit D-102 in the Chapel Square Building D (the “Unit
D-102 Sublease”). This Sublease and the Unit D-102 Sublease shall have concurrent terms and
both this Sublease and the Unit D-102 Sublease shall be extended in accordance with Section 4
above (if either one is extended) and in no event may this Sublease be terminated as provided in
Section 4 above without the Unit D-102 Sublease being terminated. Further, this Sublease and the
Unit D-102 Sublease shall be cross-defaulted, with the effect that any default by Tenant under the
Unit D-102 Sublease shall be a default under this Sublease and vice-versa.
15. Interpretation. It is the intent of the parties that all rights and obligations of
Sublandlord under the Prime Lease with respect to the Subleased Premises be passed through to
Subtenant under the terms and conditions set forth herein, including all payment and performance
obligations therein. Subtenant shall be bound unto Sublandlord under all of the terms and
conditions of the Prime Lease as they pertain to the Subleased Premises.
16. Counterparts. This Sublease may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which taken together shall constitute one and the
same instrument.
17. Electronically Transmitted Signatures. In order to expedite the execution of this
Sublease, signatures sent by electronic mail may be used in the place of original signatures on this
Sublease. The parties intend to be bound by the signatures of the electronically mailed signatures,
and hereby waive any defenses to the enforcement of the terms of this Sublease based on the form
of the signature.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties have executed this Medical Office Building Master
Sublease Agreement as of the date first set forth above.
SUBLANDLORD:
VAIL CLINIC, INC. d/b/a VAIL HEALTH
a Colorado non-profit corporation
By:
Name: William Cook
Title: President
SUBTENANT:
COUNTY OF EAGLE, STATE OF
COLORADO, By and Through Its BOARD OF
COUNTY COMMISSIONERS
By:
Name:
Title: Chair, Board of County Commissioners
Matt Scherr
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EXHIBIT A
INITIAL LEASE AGREEMENT AND FIRST, SECOND AND
THIRD AMENDMENTS
[SEE ATTACHED]
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