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HomeMy WebLinkAboutresolution.council.021-11 RESOLUTION # �I (Series of 2011) A RESOLUTION APPROVING AN AGREEMENT BETWEEN THE CITY OF ASPEN, COLORADO, AND PROBUILD COMPANY LLC SETTING FORTH THE TERMS AND CONDITIONS REGARDING ASSIGNMENT AND ASSUMPTION OF LEASE FOR 38005 HIGHWAY 82 AND AUTHORIZING THE CITY MANAGER TO EXECUTE SAID CONTRACT WHEREAS, there has been submitted to the City Council an agreement between the City of Aspen, Colorado, and Probuild Company LLC, a copy of which agreement is annexed hereto and made a part thereof. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO: Section 1 That the City Council of the City of Aspen hereby approves that agreement between the City of Aspen, Colorado, and Probuild Company LLC regarding the assignment and assumption of lease for 38005 Highway 82 for the city of Aspen, a copy of which is annexed hereto and incorporated herein, and does hereby authorize the City Manager of the City of Aspen to execute said contract on behalf of the City of Aspen. Dated: Aticeic. / S cge;ihi Michael C. Ire d, Mayor I, Kathryn S. Koch, duly appointed and acting City Clerk do certify that the foregoing is a true and accurate copy of that resolution adopted by the City Council of the City of Aspen, Colorado, at a meeting held, March 14, 2011 I !� / . __ Kathy 9 . Koch, City Clerk ASSIGNMENT AND ASSUMPTION OF LEASE THIS ASSIGNMENT AND ASSUMPTION OF LEASE (this "Agreement ") is made and entered into as of March3l , 2011, by and among WESTERN BUILDING SOLUTIONS, INC., a Colorado corporation ( "Assignor "), PROBUILD COMPANY LLC, a Delaware limited liability company ( "Assignee "), and the CITY OF ASPEN ( "Lessor "). A. Assignor is the lessee under that certain Lease Agreement by and between Assignor and Lessor, dated August 1, 2010, a copy of which is attached hereto as Exhibit A (the "Lease "), pursuant to which Assignor leases the property located at 38005 Highway 82, Aspen, Colorado (the "Leased Premises "). Capitalized terms used but not otherwise defined in this Agreement shall have the meanings set forth in the Lease. B. Assignor and Assignee intend to enter into an Asset Purchase Agreement pursuant to which, among other things, Assignor, as seller, will sell to Assignee, as buyer, certain assets associated with the business operated by Assignor on the Leased Premises and, in connection therewith, Assignor will assign its interest under the Lease to Assignee (the "Asset Purchase "). C. In connection with and contingent upon the closing of the Asset Purchase, Assignor has agreed to assign to Assignee all of Assignor's right, title, and interest in, to, and under the Lease, and Assignee has agreed to accept such assignment and to assume the liabilities and obligations of Assignor under the Lease arising on or after the Effective Date (as defined in Section 15 of this Agreement). D. Lessor desires to approve and consent to the assignment and assumption of the Lease, and to effect such other obligations of Lessor set forth in this Agreement. NOW, THEREFORE, for and in consideration of the premises, covenants, and agreements contained herein, and other good and valuable consideration, the receipt, adequacy, and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows: 1. Assignment. Effective as of the Effective Date, Assignor hereby assigns and transfers to Assignee all of its right, title, and interest in and to the Lease and Assignor's rights thereunder. 2. Assumption. Effective as of the Effective Date, Assignee hereby accepts the foregoing assignment and assumes the performance of all the obligations of Assignor arising on and after the Effective Date under the terms of the Lease and agrees, as of the Effective Date, to be bound by all the terms, covenants, and conditions of the lessee under the Lease. 3. Lessor's Consent. Lessor consents to the foregoing assignment of the Lease by Assignor to Assignee. 4. Minimum Monthly Rent. For purposes of clarification the parties agree that Section 3.1 of the Lease shall be amended and restated in its entirety as follows: The obligation to pay rent under the terms of this Lease shall begin on the Commencement Date. The minimum monthly rent for the Lease term shall be the greater of thirty -five thousand dollars ($35,000) or one - twelfth (1/12) of 4.61% of the prior year's annual gross sales. Annual gross sales shall include income (not including sales tax) from sales by Lessee at the Aspen location and the sale of any associated facility shipping into the city of Aspen. The term "annual" shall refer the fiscal year of Lessee. Rent will be prorated for any partial month. 5. Security Deposit. On or before the date that is five (5) business days following the Effective Date, Assignee shall pay to Lessor a security deposit (the "Security Deposit ") in an amount equal to $70,000. If Assignee defaults with respect to any covenant or condition of the Lease, Lessor may apply the whole or any part of the Security Deposit to the payment of any sum in default or any sum that Lessor may spend by reason of Assignee's default. The Security Deposit or any balance thereof shall be returned to Assignee within thirty (30) days after the earlier of the expiration of the term or termination of the Lease. 6. Lessor Agreement. Lessor waives, releases, and relinquishes any right of distraint, lien or levy Lessor may have by statute or otherwise with respect to any and all personal property and fixtures, including, without limitation, any inventory, which are now owned or hereafter acquired by Assignee, in or upon the Leased Premises. In connection with the execution of this Agreement and from time to time upon Assignee's reasonable request, Lessor agrees to promptly execute and deliver from time to time a landlord consent and waiver, in favor of Assignee's lender, substantially in the form of Exhibit B attached hereto. 7. Estoppel Certificate. Lessor and Assignor each represent to Assignee that the Lease is in full force and effect as of the date hereof, and has not been modified, amended or supplemented in any way prior to the date hereof, and constitutes the entire agreement between Lessor and Assignee thereunder with respect to the Premises. Lessor and Assignee each agree to execute such estoppel certificates as may be reasonably be requested by the other party from time to time upon not less than ten business days notice certifying (a) that the Lease is unmodified and in full force and effect (or if there shall have been modifications that the same is in full force and effect as modified and stating the modifications), (b) the dates to which the rent and other charges have been paid in advance, if any, and (c) whether or not such signing party is or, to the best knowledge of such signing party, such other party to the Lease is, in default in the performance of any covenant, agreement or condition contained in the Lease and, if so, specifying each such default of which the signing party is aware, it being intended that any such certificate delivered pursuant to this paragraph may be relied upon by such requesting party or any prospective lender or assignee of such requesting party. 8. No Default. To the best of Lessor's knowledge, there exists no default of Lessor or Assignor under the Lease or any state of facts which, with the passage of time or the 2 Project Powder — Assignment and Assumption of Lease (Aspen) DOC giving of notice or both, could result in a default on the part of Lessor or Assignor under the Lease. 9. Assignor Improvements. Lessor acknowledges and agrees that Lessee shall not be required to remove any alternations, additions, or other improvements to the Leased Premises and existing as of the Effective Date. 10. Subleases. Notwithstanding anything to the contrary in the Lease, Lessee shall have the right to sublease all or any portion of (a) the residential apartments on the Leased Premises to such parties, and on such terms and conditions, as Lessee, as sublandlord, deems necessary or convenient (the "Residential Subleases "), and (b) such other portions of the Leased Premises as Lessee may desire, provided Lessee obtains Lessor's prior written approval which shall not be unreasonably withheld, conditioned, or delayed. Notwithstanding anything to the contrary in subparagraph (b) of this Section 10, Lessor acknowledges and approves the existing sublease between Lessee, as sublandlord, and City Market, as subtenant, covering a portion of the surplus warehouse (the "Warehouse ") situated on the Leased Premises, which is depicted on Exhibit C attached hereto (the "Warehouse Sublease "), pursuant to which City Market also parks trucks and other vehicles on a portion of the Leased Premises. All rights and obligations of Lessee, as sublandlord, arising under the Residential Subleases, the Warehouse Sublease, and any other sublease, shall accrue to the benefit and obligation of Lessee, and Lessor shall have no rights or obligations arising under the Residential Subleases or the Warehouse Sublease. 11. Affiliate Assignments /Subleases. Lessor acknowledges and agrees that notwithstanding Section 18.1 of the Lease, Lessee may assign this Lease or sublet all or part of the Leased Premises to an "Affiliate" which, for purposes of the Lease, shall mean any entity that controls, is controlled by, or is under common control with Lessee provided that Lessee shall furnish Lessor with notice of such assignment or sublease promptly following any such assignment or sublease and no such assignment or sublease shall release or otherwise affect Lessee's obligations under the Lease. 12. Lessor's Access. During the term of the Lease, Lessor shall have the right to reasonably use such driveways and paved portions as may exist from time to time on the Leased Premises and which are generally located in the areas depicted on Exhibit C attached hereto (the "Lessor Access Space "), for the purposes of accessing the property owned by Lessor directly south of the Leased Premises, provided however, such use and access shall not interfere with Assignee's operations on the Leased Premises. 13. Lessor's Storage. Lessor and Assignor acknowledge, and Assignee agrees that Lessor has a license to use a certain portion of the Leased Premises, which is depicted on Exhibit C attached hereto (the "Lessor Storage Space "), for the storage of Lessor's personal property in exchange for payment to Assignee of $1 per month for the remaining term of the Lease, provided however, either party may terminate the license upon sixty (60) days prior written notice. The parties further acknowledge and agree that Lessee shall have no liability for any loss or damage to such personal property of Lessor from any cause whatsoever and that the waiver of subrogation contemplated by Section 6.5 of the Lease applies to any insurance that Lessor maintains with respect to such personal property. 3 Project Powder -- Assignment and Assumption of Lease (Aspen) DOC 14. Option to Renew. Lessee shall have the right, at its option, to extend the term of the Lease for a single five (5) year period beginning August 1, 2013 and ending at 11:59 p.m. on July 31, 2018 (the "Renewal Term "), on the same conditions and terms in the Lease; provided however, that effective as of the first day of the Renewal Term, the minimum monthly rent payable pursuant to Section 3.1 of the Lease shall be an amount equal to the minimum monthly rent payable in the month immediately preceding the Renewal Term increased by $2,500. To exercise its option to renew, Lessee shall give Lessor notice of such election at least sixty (60) days before July 31, 2013. 15. Effective Date. This Agreement shall be effective as of the date on which the Assignor and Assignee consummate the Asset Purchase (the "Effective Date "); provided, however, if the Asset Purchase is not consummated by April 30, 2011, this Agreement shall be of no further force and effect. 16. Notices. As of the Effective Date, Assignee's address to which notices shall be sent pursuant to Section 20.1 of the Lease is 7595 Technology Way, Suite 500, Denver, Colorado 80237, Attention: Real Estate Manager. 17. Authorization of Signatories. Each person executing this Agreement individually and personally represents and warrants that he is duly authorized to execute and deliver the same on behalf of the entity or municipality for which he is signing (whether it be a corporation, partnership, limited liability company, municipality or otherwise) and that this Agreement is binding upon said entity or municipality in accordance with its terms. 18. Counterparts. This Agreement may be executed in multiple counterparts, all of which shall constitute one document. Signatures sent by facsimile transmission or in PDF format shall be deemed to be originals for all purposes of this Agreement. [Signature Page Follows] 4 Project Powder — Assignment and Assumption of Lease (Aspen). WC IN WITNESS WHEREOF. all parties hereto have caused this Assignment and Assumption of Lease Agreement to be duly executed as of the day and year first above written. ASSIGNOR: WES u' / BUILDING SOLUTIONS, INC., By: Lti Name: �7! /.'4f a y_ Title: S P ASSIGNEE: PROBUILD COMPANY LLC, a Delaware limited liability company By i.._ /f# Name: Fro"^ Title: I I LESSOR CITY OF P �+ ' Name: .. _ �: u _ Title: C- jee✓ is it ' I i I 5 Psomea li Exhibit C Depiction of the Warehouse, the Lessor Access Space, and the Lessor Storage Space . e , t Aries— . i ii it t it t ., r. / I • { . i 3 c 1/ . _-- ., Exhibit B Lessor Agreement Wells Fargo Capital Finance, LLC, in its capacity as agent pursuant to the Loan Agreement (as hereinafter defined) acting for and on behalf of the financial institutions which are parties thereto as lenders (together with its successors and assigns in such capacity, "Agent "), and the financial institutions which are parties to the Loan Agreement as lenders (collectively, "Lenders ") have entered into financing arrangements with PROBUILD COMPANY LLC, a Delaware limited liability company ( "Debtor ") and certain of its affiliates pursuant to which Agent has been granted a security interest in all of the personal property of Debtor and such affiliates, including, but not limited to, inventory and equipment (hereinafter "Personal Property "). For purposes of this Agreement, the term "Personal Property" does not include plumbing and electrical fixtures, heating, ventilation and air conditioning, wall and floor coverings, walls or ceilings and other fixtures not constituting trade fixtures. Some of the Personal Property has or may from time to time become affixed to or be located on, wholly or in part, the real property leased by Debtor or its affiliates located at 38005 Highway 82, Aspen, Colorado (the "Premises "). The undersigned is the owner or lessor of the Premises. The term "Loan Agreement" as used herein shall mean the Loan and Security Agreement, dated August 3, 2007, by and among Debtor, certain of its affiliates, Agent and Lenders, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced. In order for Agent and Lenders to consider making loans or providing other financial accommodations to Debtor or its affiliates in reliance upon the Personal Property as collateral, the undersigned agrees as follows: 1. The undersigned waives and relinquishes any landlord's lien, rights of levy or distraint, claim, security interest or other interest the undersigned may now or hereafter have in or with respect to any of the Personal Property, whether for rent or otherwise. 2. The Personal Property may be installed in or located on the Premises and is not and shall not be deemed a fixture or part of the real property but shall at all times be considered personal property. 3. Agent, at its option, for itself and for the benefit of Lenders, may enter and use the Premises for the purpose of repossessing, removing, selling or otherwise dealing with any of the Personal Property, and such license shall be irrevocable and shall continue from the date Agent enters the Premises pursuant to the rights granted to it herein for a period not to exceed one hundred twenty (120) days or if later, until the receipt by Agent of written notice from the undersigned directing removal of the Personal Property; provided, that, (a) for each day that Agent uses the Premises pursuant to the rights granted to it herein, unless the undersigned has otherwise been paid rent in respect of any of such period, Agent shall pay the regularly scheduled rent provided under the lease relating to the Premises between the undersigned and Debtor (the "Lease "), prorated on a per diem basis to be determined on a thirty (30) day month, without thereby assuming the Lease or incurring any other obligations of Debtor, (b) any extensions of the foregoing period shall be with the written consent of the undersigned and at the same rate and (c) any damage to the Premises caused by Agent or its representatives will be repaired by Agent. 4. The undersigned agrees to send notice in writing of any termination of, or default, abandonment or surrender under the Lease to: Wells Fargo Capital Finance, LLC, as Agent One Post Office Square Boston, Massachusetts 02109 Attention: Portfolio Manager Upon receipt of such notice, Agent shall have the right, but not the obligation, to cure such default within twenty (20) days thereafter. Any payment made or act done by Agent to cure any such default shall not constitute an assumption of the Lease or any obligations of Debtor. 5. This Agreement may not be changed or terminated orally or by course of conduct. The undersigned shall notify any purchaser of the Premises or of its business of this Agreement and its terms and this Agreement is binding upon the undersigned and the heirs, personal representatives, successors and assigns of the undersigned and inures to the benefit of Agent, Lenders and their respective successors and assigns. Dated this /S day of /7f = "2011. CITY OF` 'EN By:. , 4 Name: Title: 8 Project Powder— Assignment and Assumption of Lease (Aspen).DOC tm PRQ$uild May 16, 2013 SENT VIA CERTIFIED MAIL RETURN RECEIPT REQUESTED City of Aspen Attn: Scott Miller 130 S. Galena Street Aspen, CO 81611 Re: Assignment and Assumption of Lease dated March 31,2011 by and between City of Aspen and ProBuild Company LLC, for premises located at 38005 Highway 82, Aspen, CO (the "Lease") Mr. Miller: Pursuant to Section 14 of the Assignment and Assumption of above referenced Lease, Tenant has the right to extend the term of the lease for a single five (5) year period. This letter shall serve as notice to you that we hereby exercise our right to extend the Lease for an additional five years beginning August 1, 2013. The term of the Lease shall expire on July 31, 2018. If you have any questions, please feel free to call me. Very truly yours, PROBUILD COMPANY LLC Matt LaScola Director of Real Estate 7595 Technology Way, Fifth floor • Denver, CO 80237 • 303-262-8500