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HomeMy WebLinkAboutresolution.council.065-11 RESOLUTION # 15 (Series of 2011) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, APPROVING A SUBLEASE BETWEEN THE ISIS RETAIL GROUP AND FREE PEOPLE OF PA LLC WHEREAS, there has been submitted to the City Council a sublease between the Isis Retail Group and Free People of PA LLC, a true and accurate copy, and WHEREAS, the agreement between the Isis Retail Group and the City of Aspen states that "Tenant will at all times have the right to sublet space within the premises and with Landlord's consent, which shall not be unreasonably withheld or delayed." NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, That the City Council of the City of Aspen hereby approves the sublease, between the Isis Retail Group and Free People of PA LLC, a copy of which is , incorporated herein. INTRODUCED, READ AND ADOPTED by the City Council of the City of Aspen on the 26 day of September 2011. , g eJ��'I ��'�� ' •_S • Cl Michael C. reland, 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 September 26, 2011. V /6-PAC___ Kat / n S. Koch, City Clerk LEASE by and between ISIS RETAIL GROUP, LLC, LANDLORD and FREE PEOPLE OF PA LLC, TENANT LEASED SPACE: approximately 1,694 rentable square feet in the Building located 406 E. Hopkins Avenue, Aspen, Colorado 81611 PHBF/ 858850.4 TABLE OF CONTENTS Lease Section Page [1] LEASED SPACE 1 [2] COMMON AREAS AND FACILITIES 1 [3] TERM; COMMENCEMENT DATE; EFFECTIVENESS; PRIOR POSSESSION 1 [4] PURPOSE 4 [5] MINIMUM RENT 4 [6] PERCENTAGE RENT 4 [7] ADDITIONAL RENT 7 [8] TENANT'S OPTION TO EXTEND 8 [9] UTILITIES AND SERVICES 10 [10] AFFIRMATIVE AGREEMENTS OF TENANT 10 [11] NEGATIVE AGREEMENTS OF TENANT 12 [12] AFFIRMATIVE AND NEGATIVE AGREEMENTS OF LANDLORD 13 [13] SIGNS 15 [14] ADJACENT PROPERTIES 15 [15] ASSIGNMENT AND SUBLETTING 15 [16] INDEMNIFICATION; WAIVER OF SUBROGATION 16 [17] ALTERATIONS AND IMPROVEMENTS 17 [18] LIENS 18 [19] DAMAGE 18 [20] TAKING 19 [21] TENANT'S DEFAULTS 21 [22] REMEDIES FOR TENANT'S DEFAULTS 21 [23] LANDLORD'S DEFAULTS AND TENANT'S REMEDIES; LOSS OF LEASEHOLD 22 [24] OWNERSHIP, ENCUMBRANCES AND COMPLIANCE WITH LAWS 23 [25] SUBORDINATION OF LEASE; ATTORNMENT 25 [26] ESTOPPEL CERTIFICATES 25 [27] LANDLORD'S WAIVER 26 -i - PHBF/ 858850.4 Section Page [28] NON - WAIVER OF DEFAULT 26 [29] AGENT 26 [30] INTENTIONALLY DELETED 2 6 [31] ENTIRE AGREEMENT; AMENDMENTS IN WRITING 26 [32] PARTIES BOUND 27 [33] RECORDATION OF MEMORANDUM OF LEASE 27 [34] NOTICES 27 [35] PARTIAL INVALIDITY 27 [36] HEADINGS; GENERAL INTERPRETIVE PRINCIPLES 28 [37] REASONABLENESS 28 [38] FORCE MAJEURE 28 [39] DEFAULT RATE 29 [40] ATTORNEY'S FEES 29 [41] QUIET ENJOYMENT 29 [42] GOVERNING LAW 29 [43] COUNTERPARTS; FACSIMILES 29 [44] LANDLORD LIMITATION OF LIABILITY 30 [45] RECOGNITION, CONSENT AND NONDISTURBANCE FROM THE CITY AND PRIME LANDLORD; ASSIGNMENT OF PURCHASE OPTION 30 LIST OF EXHIBITS Exhibit "A" - Land [Intentionally Omitted] Exhibit `B" - Leased Space Exhibit "C" - Landlord's Work Exhibit "C -1" — Facade Control Zone Exhibit "D" — City Lease Exhibit "E" — Plan Outlining Streets of Aspen's downtown "core" Exhibit "F" — Agreement for Recognition, Consent to Sublease, Nondisturbance and Attornment Under Lease Exhibit "G" — Purchase Option Agreement -ii PHBF/ 858850.4 SCHEDULE OF TERMS Whenever any term below is mentioned in this Lease, the definition and/or information next to the corresponding term shall be incorporated in its meaning: A. LANDLORD: Isis Retail Group, LLC , a Colorado limited liability company B. LANDLORD'S ADDRESS: 9 Pyramid Road Aspen, CO 81611 Attn: Courtney Lord C. TENANT: Free People of PA LLC, a Pennsylvania limited liability company D. TENANT'S ADDRESS: 5000 South Broad Street Philadelphia, PA 19112 Attn: President E. LAND: The tract of land located at 406 E. Hopkins Avenue, Aspen, Colorado 81611. F. LEASED SPACE: The approximately one thousand six hundred ninety -four (1,694) square feet of interior space in the Building including the store front, as shown on the plan attached hereto as Exhibit `B" and made a part hereof. The floor area of the Leased Space is one thousand six hundred ninety -four (1,694) square feet but this number shall be grossed -up to one thousand eight hundred twelve (1,812) square feet for the purposes of payment of CAM Charges and Taxes. G. BUILDING: The building erected on the Land consisting of approximately twenty - seven thousand ninety -six (27,096) rentable square feet of space. H. PROPERTY: The Land, together with the Building (and all other buildings and improvements on the Land) and all Common Areas and Facilities. I. COMMON AREAS AND FACILITIES: All common areas and facilities located on or pertaining to the Property, if any, including any and all passageways, walkways, entrances, exits, cellar doors, landscaped areas, loading facilities, staircases, corridors and other areas, equipment, signs and facilities, both interior and exterior, now existing and from time to time hereafter furnished by Landlord in, on or upon the Property for the common or joint use and benefit of all of the occupants in the retail portion of the Building. J. INITIAL LEASE TERM: Ten (10) Lease Years; subject, however, to the determination of the "Expiration Date" (as defined below). K. DELIVERY DATE: The date as determined in accordance with the provisions of Section [3] hereof. -I - PHBF/ 858850.4 L. COMMENCEMENT DATE: The date which is the earlier of sixty -seven (67) days after the Delivery Date or the date on which Tenant opens its business to the public on the Leased Space; subject, however, to the application of (i) any Rent credits provided by the provisions of Sections [3](b) hereof, and (ii) any extension as provided by Section [5](a) hereof. M. EXPIRATION DATE: 11:59 p.m. (Aspen, Colorado time) on the day immediately preceding the date which is ten (10) years after the Commencement Date; provided, however, if the Commencement Date is a date other than a February 1 the Expiration Date shall be extended from the scheduled expiration date until the immediately succeeding April 30` and subject, however, to Tenant's Option to Extend or sooner termination pursuant to the provisions hereof. N. ANNUAL MINIMUM RENTAL RATE: Initial Lease Term Annual Minimum Monthly Lease Year Rental Rate Installments 1 $104,400.00 $8,700.00 2 $107,532.00 $8,961.00 3 $110,757.96 $9,229.83 4 $114,080.64 $9,506.72 5 $117,503.04 $9,791.92 6 $121,028.16 $10,085.68 7 $124,659.00 $10,388.25 8 $128,398.80 $10,699.90 9 $132,250.80 $11,020.90 10 $136,218.36 $11,351.53 Extension Annual Minimum Monthly Term, if any Rental Rate Installments 1 -5 The greater of (a) the One - twelfth (1/12) of "Market Rental Rate" as the Annual Minimum determined pursuant to Rental Rate the provisions of Section [8] hereof or (b) the Annual Minimum Rental Rate actually paid by Tenant for Lease Year 10 plus three (3 %) annual increases in the same manner as the Initial Lease Term. - II - PHBF/ 858850.4 O. ADDITIONAL RENT: All costs and charges other than Minimum Rent and Percentage Rent payable by Tenant to Landlord pursuant to the provisions of this Lease. P. PERCENTAGE RENT: See Section [6] hereof. Q. DEFAULT RATE: Ten (10 %) percent per annum. R. PERMITTED USES: Any general retail use, including the display and sale of apparel, shoes and accessories, gifts, cards, furniture, home furnishings, housewares, food, plants, fresh and dried flowers, pots, containers and stands for plants or flowers, and/or items related to the foregoing, together with ancillary office and storage use. Notwithstanding anything to the contrary contained in this Lease, Tenant shall not operate a restaurant or other food and beverage type facility or a "luxury retail" store from the Leased Space. "Luxury retail" is defined as stores and merchandise such as Louis Vuitton, Gucci and Hermes. S. OPTION TO EXTEND: One (1) option of five (5) years, exercisable in accordance with the provisions of Section [8] hereof. T. TENANT'S PROPORTIONATE SHARE: A fraction, the numerator of which shall be the total gross square feet of the Leased Space (i.e., 1,812) and the denominator of which shall be the total gross square feet of the Building (i.e., 27,096), or six and sixty -nine hundredths (6.69 %) percent. U. LAWS: All federal, state, county and local governmental or quasi - governmental laws, statutes, codes, ordinances, rules, decrees, orders, standards and regulations, including those of any utility company or authority, public, quasi- public or private, both foreseen and unforeseen, either now in force or hereafter adopted or enacted. V. LANDLORD'S WORK: The construction, alterations and improvements set forth on Exhibit "C" attached hereto and made a part hereof. W. TENANT'S WORK: The alterations and improvements to be performed by Tenant in accordance with the provisions of Section [17] hereof to prepare the Leased Space for Tenant's initial use and occupancy. X. INTENTIONALLY OMITTED. Y. AFFILIATE: Any entity (i) into or with which an entity may be merged or consolidated, (ii) which is controlled by, controls, or is under common control of or with an entity, or (iii) which acquires or controls the majority of the assets of an entity. For purposes of this definition, the terms "controlled by," "controls" or "under common control with" shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of any entity, whether through ownership, legally or beneficially, of voting securities, by contract or otherwise. - III - PHBF/ 858850.4 Z. PERMITTED CLOSURES: Permitted Closures shall mean closures (i) to conduct the taking and restocking of inventory, (ii) necessitated by the performance of maintenance, repairs, and replacements, if necessary, (iii) for inclement weather, (iv) on any local, state, or federal holidays, (v) for purposes of refurbishing, remodeling or altering the Leased Space, (vi) during any other periods of time specifically set forth in this Lease when Tenant may, or by necessity must, suspend or cease doing business in or from the Leased Space, and (vii) during all or any part of the off - season in the City of Aspen from April 15 to June 15 and from October 1 to Thanksgiving of each calendar year. AA. PRIME LEASE: The City of Aspen Public Facilities Authority, a non - profit corporation (the "Prime Landlord "), having an address of 130 South Galena Street, Aspen, Colorado 81611 is the owner of the commercial unit ( "Commercial Unit A ") in the Isis Theater Building located at 406 East Hopkins, Aspen, Colorado (the "Building "), which includes the Leased Space. The Prime Landlord entered into a Lease Purchase Agreement (the "Prime Lease ") with the City of Aspen, a Colorado Municipal Corporation acting through its City Council (the "City "), having an address of 130 South Galena Street, Aspen Colorado 81611, pursuant to which the City leased the Leased Space. BB. CITY LEASE: The City and Landlord entered into that certain Sublease dated February 16, 2007 (the "City Lease ") pursuant to which Landlord sublet the Leased Space from City. -Iv - PHBF/ 858850 4 LEASE LEASE made this 31 day of August, 2011, by and between ISIS RETAIL GROUP, LLC, a Colorado limited liability company, (the "Landlord "), party of the first part, and FREE PEOPLE OF PA LLC, a Pennsylvania limited liability company (the "Tenant "), party of the second part. WITNESSETH: The parties hereto, intending to be legally bound, hereby covenant and agree as follows: [1] LEASED SPACE. Landlord hereby demises and sublets to Tenant, and Tenant hires and leases from Landlord, upon the terms, covenants, conditions and provisions set . forth herein and in the Schedule of Terms attached hereto and made a part hereof, the Leased Space. Landlord reserves an easement above Tenants finished ceiling to the roof, or to the bottom of the floor deck above the Leased Space, and below the floor of the Leased Space, for general access purposes and in connection with the exercise of Landlord's other rights under this Lease. In exercising such rights, Landlord shall use its reasonable best efforts to minimize the disturbance of Tenant's business at the Leased Space. [2] COMMON AREAS AND FACILITIES. Tenant shall have the non- exclusive right of access to, egress from, and use of all Common Areas and Facilities, which shall be available to Tenant seven (7) days a week, twenty four (24) hours a day. Landlord reserves the right at any time, and from time to time, to make alterations to, and to build additional stories on the Building, including any modifications of the Common Areas and Facilities. In no event shall such work which would materially and adversely affect Tenant's operations in the Leased Space be performed during the months of October, November or December, except in the case of an emergency. [3] TERM; COMMENCEMENT DATE; EFFECTIVENESS; PRIOR POSSESSION. (a) The Initial Lease Term shall be for the period set forth in the Schedule of Terms, commencing on the Commencement Date and ending on the Expiration Date; subject, however, to extension pursuant to Tenant's Option to Extend and to sooner termination pursuant to the provisions hereof. (b) (i) Landlord shall, at Landlord's sole cost and expense, commence and complete Landlord's Work, in a good and workmanlike manner using only materials that are new, of good quality, free of material defect and in accordance with (A) the terms, covenants, conditions and provisions of this Lease, (B) all Laws applicable to the Property, and (C) the plans, drawings, specifications and construction memoranda prepared by PHBF/ 858850. 4 Landlord's architect and approved in advance by Tenant. Landlord acknowledges that Landlord has visited other stores operated by Tenant as of the date of this Lease, has consulted with Tenant's design representatives, and is familiar with both Tenant's current aesthetic design and construction standards and the manner in which Tenant operates its business at such other stores. Landlord shall use its best efforts to utilize such standards of Tenant in the preparation of the aforesaid plans, drawings, specifications and construction memoranda for Tenant's approval. It shall be deemed reasonable for Tenant to withhold such approval of the plans, drawings, specifications and/or construction memoranda if Tenant does so because the plans, drawings, specifications and/or construction memoranda deviate from such standards or do not otherwise comply with the other requirements and provisions of this Lease. Furthermore, Landlord shall also solicit and obtain at all times Tenant's approval in advance of any proposed material deviations from such plans, drawings, specifications and construction memoranda previously approved by Tenant relating to the Leased Space; provided, however, that any deviation affecting the Leased Space or the ability of Tenant to either use, occupy or enjoy the Leased Space or to operate its business thereon or therefrom, all as contemplated by Tenant, in Tenant's sole opinion, shall be deemed material and, provided, further, that with respect to the immediately preceding proviso, the standards of Section [37] shall not apply. Landlord's Work shall be "substantially complete" on the date when Landlord is ready and able to deliver exclusive possession of the Leased Space to Tenant with Landlord's Work, including all aspects thereof necessary for the commencement and completion of Tenant's Work, completed to the satisfaction of Tenant, with only "punchlist items" of minor finishing and adjustment as determined by Tenant, in Tenant's sole opinion, remaining to be completed. For purposes of this Lease, the "Delivery Date" shall mean the date on which Landlord's Work is substantially complete and Tenant accepts possession thereof; provided, however, under no circumstances shall the Delivery Date be earlier than October 3, 2011. Landlord agrees to promptly apply for and diligently prosecute the issuance of all permits, licenses and approvals by the aforesaid authorities and utility companies necessary for the commencement and completion of Landlord's Work. Landlord further agrees to complete all punchlist items within twenty -one (21) days after the Delivery Date, failing which Tenant shall have the right, but not the obligation, to complete such work at Landlord's expense, and if Landlord fails to reimburse Tenant for the cost therefor incurred by Tenant within thirty (30) days after the presentation of an invoice setting forth in reasonable detail, such cost, then such amount shall accrue interest at the Default Rate from the date of submission of such invoice, and Tenant, in addition to all other rights and remedies available at law or in equity and under this Lease, may set off such cost and interest from installments of Rent next to become due hereunder. Landlord shall use its best efforts to ensure that the Delivery Date occurs no later than October 5, 2011. If the Delivery Date does not occur by April 21, 2012, Tenant shall have the right, but not the obligation, to terminate this Lease by notice to Landlord at any time thereafter until the Delivery Date occurs, in which event this Lease shall be null and void and neither Landlord nor Tenant shall have any further rights, liabilities or obligations hereunder. Landlord is not preparing any plans for Landlord's Work. Tenant has already completed preliminary plans and specifications for Tenant's Work dated August 2, 2011 and prepared by David Levy and Associates ( "Tenant's Plans). Tenant's Plans are preliminary and are subject to revisions and modifications. (ii) Notwithstanding the foregoing, if the Delivery Date does not occur by October 5, 2011 and Tenant has not thereafter exercised any termination right -2 PHBF/ 858850.4 provided for herein, then Tenant shall receive a credit equal to two (2) days of all costs and charges payable as installments of Minimum Rent (based on the Annual Minimum Rental Rate set forth in Paragraph [N] of the Schedule of Terms for the first Lease Year) and costs and charges payable as Additional Rent, calculated on a per diem basis, for each day after October 3, 2011 and until the earlier to occur of either November 5, 2011 or the date on which Landlord's Work is substantially completed, to be applied on account of the installments of Rent first to become due and payable hereunder from and after the Commencement Date. If the Delivery Date has not occurred by November 5, 2011, Tenant shall receive a credit equal to three (3) days of all Minimum Rent (based on the Annual Minimum Rental Rate set forth in Paragraph [N] of the Schedule of Terms for the first Lease Year) and costs and charges payable as Additional Rent, calculated on a per diem basis, for each day from and after November 5, 2011, and until the date on which Landlord's Work is substantially completed, to be applied on account of the installments of Rent first to become due and payable hereunder from and after the Commencement Date. The foregoing two (2) periods for determination of credits resulting from a delay in the Delivery Date shall run consecutively, but not cumulatively. The credits provided by this paragraph are acknowledged by Landlord to be a material inducement to Tenant to execute and deliver this Lease, and shall be in addition to any and all other rights and remedies available to Tenant hereunder or at law or in equity. (iii) The extension provisions of Section [38] hereof shall not apply to any of the provisions of this Section [3](b). If Landlord shall be delayed or hindered in or prevented from the performance of and substantial completion of the Landlord's Work by October 5, 2011 by reason of Acts of God (defined below), then the dates set forth in Section [3](b) shall be extended for a period equivalent to the period of such delay. The term "Acts of God" as used in this Lease shall mean an act or acts occasioned exclusively by the direct, immediate, and exclusive operation of the forces of nature, uncontrolled and uninfluenced by human intervention, of such a character that it could not have been prevented or escaped from by any amount of foresight or prudence, or by any reasonable degree of care or diligence. (c) From and after the date of this Lease, Landlord and Tenant shall be bound by all of the terms, covenants, conditions and provisions of this Lease (other than the payment of Rent) applicable respectively to each party hereunder, notwithstanding that the Initial Lease Term shall not commence until the Commencement Date as provided hereby. To that end, in addition to all other rights of Tenant hereunder, Tenant, its architects, contractors, agents and other designees shall have the right of access to and 'egress from the Leased Space and the Common Areas and Facilities from and after the date of this Lease to prepare the Leased Space for Tenant's use and occupancy. Tenant's obligation to pay all Minimum, Percentage, and Additional Rent and any other costs and charges payable by Tenant hereunder shall not begin until the Commencement Date; subject, however, to any credits provided hereunder. (d) Upon request of either party hereto, after the Commencement Date has been established, Landlord and Tenant shall execute and deliver a memorandum confirming the Delivery Date, the Commencement Date, and the Expiration Date. (e) As used herein, the term "Rent" shall be defined as Minimum Rent, Percentage Rent and all sums payable and collectible as Additional Rent. -3 PHBF/ 858850.4 (f) If the Commencement Date and/or the Expiration Date is other than the first day or last day of a calendar month, as the case may be, then Rent shall be prorated for each such partial month. (g) If, after the Delivery Date, any governmental or quasi - governmental authority or public, quasi - public or private utility company or authority prohibits Tenant from either opening or operating its business on the Leased Space or, after opening, requires Tenant to close that business, in whole or in part, because of any reason within Landlord's control, no Rent shall be due or payable by Tenant for such period, and if such closure continues for more than thirty (30) days, Tenant, in addition to all other rights and remedies available hereunder and at law or in equity, may terminate this Lease at any time after the expiration of such thirty (30) day period by notice to Landlord. [4] PURPOSE. The Leased Space may be used and occupied for the Permitted Uses and for no other purpose without Landlord's prior consent. [5] MINIMUM RENT. • (a) Commencing on the Commencement Date, Tenant shall pay Landlord the annual Minimum Rent in equal consecutive monthly installments on the first day of each calendar month during the Initial Lease Term and the Extension Term, in advance and without prior notice or demand or set off (except as expressly set forth in this Lease). (b) All Rent shall be payable to Landlord at its offices set forth in the Schedule of Terms, or to such other address as Landlord may so notify Tenant from time to time in the manner prescribed in Section [34] hereof. (c) A "Lease Year" referred to in the Schedule of Terms shall mean each twelve (12) month period during the Initial Lease Term and the Extension Term commencing on the Commencement Date or an anniversary of the Commencement Date, provided that during the first Lease Year no Rent shall be due or payable until, or otherwise allocated or attributable to any period prior to, the Commencement Date, notwithstanding any of the provisions of this Lease to the contrary. [6] PERCENTAGE RENT. In addition to the Minimum Rent and all other charges and sums payable as Additional Rent hereunder, Tenant shall pay to Landlord, in the manner and in accordance with the provisions herein set forth for each Percentage Rent Lease Year (as hereinafter defined) during the Initial Lease Term and the Extension Term, an additional percentage rent ( "Percentage Rent ") equal to five percent (5 %) of "Gross Sales from the Leased Space" (as hereinafter defined) for such Percentage Rent Lease Year in excess of the quotient of the Minimum Rent payable during such Percentage Rent Lease Year divided by .05 (the "Percentage Rent Base "). (a) The term "Percentage Rent Lease Year" as used herein shall mean the twelve (12) month period beginning on February 1 and ending on January 31, and each successive twelve (12) month period thereafter during the Initial Lease Term and the Extension Term; provided, however, that if the Commencement Date is other than a February 1, then the -4 PHBF/ 858850.4 first Percentage Rent Lease Year shall be the period from the Commencement Date to the next succeeding January 31, and, provided further, if the first Percentage Rent Lease Year contains less than one hundred eighty (180) days, the Gross Sales from the Leased Space generated for such Percentage Rent Lease Year and the prorated Minimum Rent due and payable for such Percentage Rent Lease Year shall each be added to the respective figures applicable to the second Percentage Rent Lease Year for purposes of determining Percentage Rent for the combined first and second Percentage Rent Lease Years. In such instance, anything in Section [61(b) or elsewhere in this Lease to the contrary notwithstanding, the combined Percentage Rent due for such first and second Percentage Rent Lease Years shall be due within ninety (90) days after the expiration of the second Percentage Rent Lease Year. If the Expiration Date is other than January 31, the last Percentage Rent Lease Year shall be the period from the immediately preceding February 1 to the Expiration Date, and the Percentage Rent Base for such partial Percentage Rent Lease Year shall be adjusted accordingly. (b) Within ninety (90) days after the expiration of each Percentage Rent Lease Year (except as provided in Section [6J(a) hereof with respect to a first Percentage Rent Lease Year of less than one hundred eighty (180) days), Tenant shall submit to Landlord a statement, certified as being true and correct on behalf of Tenant by its Chief Financial Officer, showing the amount of Gross Sales from the Leased Space for such Percentage Rent Lease Year, and Tenant will pay to Landlord any Percentage Rent due hereunder within ninety (90) days after the expiration of the Percentage Rent Lease Year. (c) If Landlord is unwilling to accept the statement furnished to Landlord by Tenant, Landlord is hereby given the right to retain a reputable, independent Certified Public Accountant ( "C.P.A. ") of its own choice for the purpose of auditing the gross receipts and sales books of Tenant pertaining to the Leased Space. If the findings of the C.P.A. retained by Landlord indicate a discrepancy in Gross Sales from the Leased Space which is less than or equal to four (4 %) percent of those furnished by Tenant and which would entitle Landlord to receive a greater amount of Percentage Rent, then Landlord agrees to pay the compensation of the C.P.A. retained by Landlord. In any event, Tenant shall pay Landlord the amount of Percentage Rent found to be due and owing by Landlord's C.P.A. within thirty (30) days after receipt of demand for the accounting. Should the findings of the C.P.A. retained by Landlord indicate a discrepancy which indicates that Tenant's payment of Percentage Rent exceeded the amount which otherwise was due, then Landlord agrees to pay the compensation of the C.P.A. and to reimburse Tenant, upon demand, in an amount equal to any overpayment. If, however, the findings of the C.P.A. retained by Landlord disclose a discrepancy in excess of four (4 %) percent between the figures furnished by the C.P.A. retained by Landlord and those furnished by Tenant and which would entitle Landlord to receive a greater amount of Percentage Rent, then Tenant shall pay the actual reasonable compensation of the C.P.A. retained by Landlord, and Tenant agrees that the Percentage Rent payments shall be made in accordance with the findings of the C.P.A. retained by Landlord. All such payments are to be made within thirty (30) days after receipt of demand for the accounting. (d) Tenant shall keep at the Leased Space or at the headquarters of Tenant sufficient books of account, vouchers and other records showing Gross Sales from the Leased Space of Tenant, and Tenant shall permit Landlord and any C.P.A. retained by Landlord -5 PHBF/ 858850. at all reasonable times and upon reasonable advance notice, to examine the same for the purpose of verification of the statements hereinabove provided for, if Landlord should elect to do so, which examination of any particular statement shall be made within two (2) years after the date such statement is delivered to Landlord. (e) The expression "Gross Sales from the Leased Space" used in this Lease shall mean the sum of (i) the total (exclusive of all sales taxes or other taxes in the nature thereof) of all selling prices or charges for merchandise sold at, in, on or from the Leased Space, whether for cash or on credit, by or for Tenant, reduced by any discounts or adjustments allowed to purchasers on such sales and by the price of returned merchandise so sold during a Percentage Rent Lease Year, and (ii) the gross sales of any concessionaire, licensee or subtenant of Tenant occupying any portion or portions of the Leased Space (determined in accordance with the provisions of the preceding clause (i)); provided, however, in the case of coin -in -slot machines (including public telephones and vending machines) which Tenant may either maintain or license to be maintained on the Leased Space, such expression shall not mean the amounts collected in such machines, but only the license fees or other comparable fees which accrue to Tenant therefrom. The Gross Sales from the Leased Space shall not include: (A) the exchange of merchandise between stores of Tenant where such exchanges are made solely for the convenient operation of Tenant's business and not for the purpose of consummating a sale which has theretofore been made at, in, on or from the Leased Space and/or for the purpose of depriving Landlord of the benefit of a sale which otherwise would have been made at, in, on or from the Leased Space; or (B) returns to shippers or manufacturers; or (C) mail order (whether telephonic, electronic or otherwise) sales shipped from the Leased Space or from any of Tenant's distribution centers or facilities for merchandise orders placed through e -mail, facsimile transmission, internet or other similar telephonic or electronic devices, or any other retail, wholesale or office facilities; or (D) sales of fixtures and equipment after use thereof in the conduct of Tenant's business in the Leased Space; or (E) all rent actually collected by Tenant from any concessionaire, licensee or subtenant of Tenant occupying any portion or portions of the Leased Space; or (F) donations to charitable organizations; or (G) sales at a discount to employees of Tenant provided such sales do not exceed two (2 %) percent of Gross Sales from the Leased Space; or (I-I) the deductions or charges imposed on Tenant by third party credit card issuers or carriers; or (I) any interest or carrying charges imposed by Tenant on Tenant issued credit cards or other time sales); or (J) the price of any gift card sold or exchanged, except same shall be included when and to the extent the same, after issuance, is redeemed and/or used to purchase merchandise at, in or from the Leased Space. (f) Notwithstanding the fact that a portion of the rental reserved hereunder may be a percentage of Gross Sales from the Leased Space, and notwithstanding anything else to the contrary, Landlord shall not be deemed for any purpose to be or to have become a partner of Tenant or a joint venturer or a member of a joint enterprise with Tenant. The provisions of this Lease relating to Percentage Rent payable hereunder are included solely for the purpose of providing a method whereby Percentage Rent is to be measured and ascertained. -6 PHBF/ 858850.4 [7] ADDITIONAL RENT. Commencing on the Commencement Date, Tenant shall pay Landlord according to the following, in addition to the Minimum Rent specified herein: (a) (i) Tenant's Proportionate Share of all real estate taxes and assessments levied against the Property (the "Taxes ") during the Initial Lease Term and the Extension Term. (ii) Tenant shall pay Landlord's reasonable estimate of Tenant's Proportionate Share of such Taxes (the "Tax Escrow Payment ") on a monthly basis. Tenant authorizes Landlord to use the funds deposited with Landlord in connection with the Tax Escrow Payment to pay the Taxes levied or assessed against the Property. Each Tax Escrow Payment shall be due at the same time and in the same manner as the time and manner of the payment of Minimum Rent as provided herein. The amount of the initial monthly Tax Escrow Payment is Eight and 30/100 Dollars ($8.30) per gross square foot of the Leased Space. The Tax Escrow Payment account of Tenant shall be reconciled annually. If the Tenant's total Tax Escrow Payments are less than the actual Tenant's Proportionate Share of the Taxes, Tenant shall pay to Landlord the difference within thirty (30) days after the date that Tenant receives from Landlord an invoice for such Taxes for the tax year(s) in question issued by the appropriate governmental authority; if the total Tax Escrow Payments of Tenant are more than the actual Tenant's Proportionate Share of the Taxes, Landlord shall retain such excess and credit it to Tenant's Tax Escrow Payment account (or, if such adjustment is at the end of the Term, pay Tenant), which reimbursement obligation shall survive the Expiration Date or sooner termination of this Lease. Tenant shall not be responsible for any late fees, charges, penalties or interest due to Landlord's delinquency or delay in payment of such Taxes. If any such invoice shall cover any period of time prior to the Commencement Date or after the Expiration Date, Tenant's Proportionate Share shall be appropriately prorated. (iii) If Landlord receives a reimbursement, refund, credit or other retroactive adjustment of Taxes after Tenant has paid Tenant's Proportionate Share thereof, Landlord shall promptly remit to Tenant upon receipt, Tenant's Proportionate Share of such reimbursement, refund, credit or other retroactive adjustment, which payment obligation shall survive the Expiration Date of this Lease. (iv) Other than the payment of Tenant's Proportionate Share of Taxes, Tenant shall not be required to pay any other tax, levy, assessment or charge assessed against Landlord, including levies on Rent and any gift, estate or inheritance tax. (v) Upon Tenant's request, Landlord shall deliver evidence, reasonably acceptable to Tenant, that such Taxes have been paid in full. (b) Tenant shall be responsible for and agrees to pay, before delinquency, any sales tax on rents, and any tax or assessment that may be assessed, charged or imposed by law now in effect, or which is hereafter enacted or may go into effect, in connection with the use, occupancy, possession or tenancy of the Leased Space for each month or portion thereof during the Term (all of the foregoing are hereinafter referred to as "Rent Taxes "). Tenant -7 PHBF/ 858850.4 agrees to pay the Rent Taxes in the manner and in accordance with the requirements of applicable law, rule and regulation, as the same may be amended from time to time. In the event that the applicable taxing authority shall require (or permit and Landlord shall elect to do so) Landlord or Landlord's agent to collect any Rent Taxes for or on behalf of the applicable taxing authority then such Rent Taxes shall be paid by Tenant to Landlord or Landlord's agent monthly with the Minimum Rent payments required hereunder, in accordance with the requirements of the applicable taxing authority and in no event later than monthly within thirty (30) days notice from Landlord to Tenant. (c) (i) Tenant shall pay a fixed per annum charge for the costs and expenses incurred by Landlord in connection with the general maintenance, operation or cleaning with respect to the Common Areas and Facilities, including (1) utility costs for the operation of the Common Areas and Facilities, mechanical plant, and snowmelt, and (2) the premiums for property insurance and commercial general liability insurance maintained by Landlord upon the Building pursuant to Section [12](c) hereof which premiums are the subject of Section [7](b) hereof (collectively, the "CAM Charges "). (ii) Tenant shall not be responsible for any late fees, charges, penalties or interest due to Landlord's delinquency or delay in payment of any item of the CAM Charges. (iii) Landlord covenants and agrees to operate and maintain the Common Areas and Facilities in good order, condition and repair, and in a safe, secure, well -lit and clean condition in the most cost - effective manner that is reasonable and consistent with the needs of the tenants and occupants of the Property, and at least equivalent to the highest standards at other retail buildings of similar size and character located within the geographic area of the Property. (d) (i) Tenant agrees to remit payment to Landlord for Tenant's Proportionate Share of CAM Charges in twelve (12) equal monthly installments commencing on the Commencement Date. Notwithstanding anything to the contrary contained in this Section [7], for the first Lease Year (the "Base Year "), Tenant shall pay a fixed CAM Charge in the amount of Four and 20/100 Dollars ($4.20) per gross square foot of the Leased Space, and such amount shall be deemed to be Tenant's Proportionate Share of CAM Charges for the Base Year, irrespective of the actual amount calculated therefor. Thereafter, Tenant's CAM Charge shall increase three (3 %) percent per annum over the fixed CAM Charge for the immediately preceding Lease Year. (ii) In no event, however, shall Tenant's Proportionate Share of CAM Charges and Taxes in the Base Year exceed a total of Twelve and 30/100 Dollars ($12.30) per gross square foot of the Leased Space. [8] TENANT'S OPTION TO EXTEND. Tenant shall have the option to extend the Initial Lease Term for one (1) additional period (the "Extension Term ") of five (5) years, commencing on the first day following the Expiration Date of the Initial Lease Term, provided that Tenant is not in a monetary Event of Default or a default under the operating 8 PHBF/ 858850.4 covenant in Section [1010) which is then continuing beyond all applicable cure periods at the time of its exercise of the extension option or as of the commencement date of the Extension Term. Tenant's exercise of the extension option shall be by notice to Landlord at least twelve (12) full calendar months prior to the Expiration Date of the Initial Lease Term. The Extension Term shall be upon the same terms, covenants, conditions and provisions as are in effect as of the Expiration Date of the Initial Lease Term, except that the annual Minimum Rental Rate in effect during the Extension Terms shall be the rate set forth in Paragraph [N] of the Schedule of Terms. (a) The "Market Rental Rate" shall mean the rental rate then in effect for similar retail space in buildings of comparable size and street presence in Aspen's downtown "core" located on the streets outlined on Exhibit "E" attached hereto running from the Gondola Plaza to the Jerome Hotel, as such Market Rental Rate shall be determined by Landlord or by "appraisal" (as hereinafter provided). In all cases, the Market Rental Rate shall be determined after taking into account any economic incentives (such as so- called free rent periods, rent credits and allowances for tenant improvements) which effectively reduce the amount of annual minimum rent to be paid by tenants that are included in leases for retail space in that area that are reasonably equivalent in length to that of the Extension Term, after recognizing Tenant's additional obligations to pay Additional Rent and after providing for limitations imposed on any renovation, improvement or development of the Building because of either its historic classification or its location within an historic district, if applicable. Within twenty (20) days after receipt of Tenant's notice of its exercise of its option to extend with respect to the Extension Term, Landlord shall advise Tenant of Landlord's determination of the Market Rental Rate. If Landlord and Tenant are unable to agree upon the Market Rental Rate within ten _(10) days of Tenant's receipt of Landlord's determination, Tenant shall have the right by notice to Landlord within ten (10) days thereafter to either (i) revoke its exercise of the extension option, or (ii) submit the determination of the Market Rental Rate to appraisal in the manner hereinafter set forth. If the appraisal process is instituted by Tenant, Landlord and Tenant agree to cooperate in such effort so that the determination of the Market Rental Rate can be completed no later than six (6) months prior to the commencement date of the Extension Term. Within seven (7) days after Tenant's receipt of the determination of the Market Rental Rate from the appraisers, Tenant shall again have the right to revoke its exercise of the Extension Term if Tenant, in its sole discretion, is not in agreement with the Market Rental Rate as determined by appraisal. Landlord and Tenant understand that, for purposes of this Section [8], it shall be reasonable for Tenant, in its sole discretion, to disagree with such determination of the appraisers, notwithstanding the provisions of Section [37] hereof. The appraisal process shall be conducted in the following manner: Within the first seven (7) days, Landlord and Tenant shall each provide the other with the name and respective qualifications of an appraiser who meets the "Appraiser Qualifications" (as defined below), and those two appraisers, within seven (7) additional days after their appointments, shall select a third appraiser who meets the Appraiser Qualifications. The parties shall share equally all of the costs of the appraisers, except that Tenant shall pay all of the -9 PHBF/ 858850.4 reasonable appraisal costs if Tenant exercises its revocation right after Tenant and Landlord receive the appraisers' determination of Market Rental Rate. Within seven (7) days following the selection of the appraisers, Landlord and Tenant shall each notify the other and the three appraisers, in writing, of their determination of the Market Rental Rate. Within seven (7) days thereafter, the three appraisers shall decide in writing whether Landlord's or Tenant's determination of the Market Rental Rate is more correct and shall state in detail the reasons therefor. If the three (3) appraisers do not unanimously agree, the decision of the majority shall be deemed to be the decision of the appraisers. The determination of the Market Rental Rate, which the appraisers decide to be the more correct, shall be the Market Rental Rate for purposes of this Lease. The appraisers shall be empowered to choose only between Landlord's and Tenant's determination, and shall reach no other compromise or decision. As used herein, "Appraiser Qualifications" shall mean an MAI appraiser or real estate broker currently holding a valid and active real estate brokerage license pursuant to the laws of the State of Colorado and with experience in commercial retail leases, including at least ten (10) years' experience in appraising and/or leasing retail properties within Aspen's downtown "core" as defined above. [9] UTILITIES AND SERVICES. Prior to and as a condition of the Delivery Date, Landlord, at Landlord's sole cost and expense, shall provide and connect to the Leased Space the lines, equipment and /or facilities necessary to enable Tenant to obtain water, electricity, telephone, storm and sewer service and all other appropriate utilities or services thereon, together with separate meters for each, in sufficient capacities to enable Tenant to use, occupy and enjoy the Leased Space for its intended purposes and to operate its business thereon and therefrom, all as part of Landlord's Work as if fully set forth on Exhibit "C" attached hereto. Landlord shall provide Tenant with all applicable meter numbers, and reasonable access to such meters at all times to the extent any of such meters are located outside of the Leased Space. Except as set forth in this Section [9] and elsewhere in this Lease, Tenant shall pay prior to delinquency all costs and charges for such utilities or services used or consumed by Tenant on the Leased Space, whether supplied by Landlord or by a private, public or quasi - public utility company or authority; provided, however, if such utilities or services are not separately metered to the Leased Space, Tenant shall pay its equitable share of such utilities based upon an invoice as reasonably and equitably determined by Landlord, and Tenant's obligation to pay the same prior to delinquency shall be conditioned on Landlord's delivery of paid receipts therefor prior thereto. In no event shall Tenant be obligated to reimburse Landlord for any utilities or services at a rate in excess of the secondary rate that Tenant would have paid for such utilities or services if directly metered, nor shall Tenant be responsible for any late fees, charges, penalties or interest due to Landlord's failure to timely make such payments. [10] AFFIRMATIVE AGREEMENTS OF TENANT. Tenant agrees, throughout the Initial Lease Term and the Extension Term: (a) To keep the interior of the Leased Space clean and well - maintained, and to remove all refuse, trash and debris therefrom; - 10 - PHBF/ 858850.4 (b) To comply with all Laws and notices issued by any governmental authorities having jurisdiction over the Leased Space, as well as with the reasonable recommendations with respect to Tenant's use and occupancy of the Leased Space made by the Board of Fire Underwriters and by insurance carriers insuring the Property, unless such compliance is necessitated by the failure, negligently or intentionally, of Landlord, its agents, contractors, servants or employees, to keep, observe and perform Landlord's obligations under this Lease. Notwithstanding anything herein contained to the contrary, Tenant shall not be obligated to comply with any Laws (including regulations of Landlord's insurance companies) which require any structural changes in or to the Leased Space or the Building of which it is a part and all such changes shall be the sole responsibility of Landlord; provided, however, if such changes are made necessary by any act or work performed by Tenant or the particular manner in which Tenant operates its business at the Leased Space, Tenant shall make such changes at its sole cost and expense; (c) To use every reasonable precaution against fire in the Leased Space; (d) To give Landlord prompt notice of any fire occurring in the Leased Space; (e) To maintain (i) commercial general liability insurance coverage written on an occurrence form through a company(ies) reasonably satisfactory to Landlord naming Landlord as an additional insured and covering any and all claims for bodily injury (including death) and property damage occurring in or about the Leased Space with a combined single limit of not less than Two Million ($2,000,000) Dollars per occurrence and Three Million ($3,000,000) Dollars annual aggregate, and (ii) basic form coverage insurance covering Tenant's personal property in the Leased Space and any leasehold improvements installed by Tenant that are removable by Tenant pursuant to the provisions of this Lease in such amounts as Tenant deems reasonable; (f) To deliver to Landlord certificate(s) of insurance(s) maintained by Tenant pursuant to sub section (e) above (which, at Tenant's option, may be maintained under blanket and/or umbrella coverages) at the Commencement Date, and, thereafter, at least ten (10) days prior to the expiration date of any policy(ies) then in force; (g) To be responsible for all maintenance and repair of the non- structural portions of the Leased Space, including the storefront, doors and windows, and those portions of the plumbing, electrical, sprinkler, air handler unit exclusively serving the Leased Space, and other utility systems located entirely within the Leased Space and which serve it exclusively, unless such work is necessitated by the failure, negligently or intentionally, of Landlord, its agents, contractors, servants or employees, to keep, observe and perform Landlord's obligations under this Lease; provided, however, that anything in this Lease to the contrary notwithstanding, Tenant shall not be responsible for the performance of any such work in compliance with so- called "LEED" (or its equivalent) construction or certification standards now in existence or hereinafter established or adopted by Landlord. - 11 - PHBF/ 858850.4 (h) Tenant shall maintain and repair any improvements or facilities installed in the Leased Space by Tenant. (i) To surrender possession of the Leased Space to Landlord at the Expiration Date in good order and condition and broom - clean, reasonable wear and tear and damage by fire or other casualty or "taking" (as that term is hereinafter defined) excepted, upon the Expiration Date of the Initial Lease Term or of the Extension Term, as the case may be, unless such work is necessitated by the failure, negligently or intentionally, of Landlord, its agents, contractors, servants or employees, to keep, observe and perform Landlord's obligations under this Lease; subject, however, to the provisions of Section [17] and other applicable provisions of this Lease 0) Tenant shall be open for business and operate continuously in all or substantially all of the Leased Space during the entire Term of this Lease, and shall conduct its business at all times in a first class and reputable manner, during Monday through Saturday during the following days and hours: 10:00 a.m. to 6:00 p.m. Mondays through Saturdays and 12:00 p.m. (noon) to 5:00 p.m. on Sundays, excluding closings for Permitted Closures. In the event Tenant shall fail to operate or conduct Tenant's business in accordance with the provisions of this Section [10](j), Minimum Rent shall increase by 25% for each day that Tenant during such period that Tenant fails to conduct Tenant's business in accordance with the provisions of this Section [1010). [11] NEGATIVE AGREEMENTS OF TENANT. Tenant agrees, throughout the Initial Lease Term and the Extension Term, that Tenant shall not, without the prior consent of Landlord: (a) Use or operate any machinery or equipment that is harmful to the Leased Space or the Building; (b) Place any weights in the Leased Space beyond the safe carrying capacity of the Building; and (c) Do or allow to be done anything which may suspend the fire insurance maintained by Landlord covering the Building. (d) In the event Tenant shall own or operate a Free People store(s) in Pitkin or Garfield counties, Colorado (the "Radius Area "), then, as Landlord's sole remedy, the Gross Sales of any such Free People store(s) within the Radius Area shall be included in the Gross Sales made from the Leased Space (as if such store were part of the Leased Space) and the Percentage Rent hereunder shall be computed upon the aggregate of the Gross Sales made from the Leased Space and by the Gross Sales from any such other store(s) while such other store(s) is /are open and being operated within the Radius Area. Tenant shall report and maintain records of the Gross Sales of such other store(s) in the manner provided in Section [6] hereof." - 12 - PHBF/ 858850.4 [12] AFFIRMATIVE AND NEGATIVE AGREEMENTS OF LANDLORD. (a) Landlord covenants, represents, warrants and agrees that the Leased Space and the Building are now and shall be as of the Delivery Date properly constructed and that the Leased Space, Building and Common Areas and Facilities are in good condition and structurally sound with the roof and all below grade levels free from water intrusion, that there has been no water infiltration into the Leased Space, Building or Common Areas and Facilities, and that possession of the Leased Space shall be delivered to Tenant in such condition, after Landlord's Work has been substantially completed, on the Delivery Date. Landlord further covenants, represents, warrants and agrees that all water, sewer, gas, telephone, electrical and other utility lines, equipment and facilities shall be in good condition and working order and free of any obstructions as of the Delivery Date and as a condition thereof. Landlord, at its sole cost and expense, shall be responsible for (i) the maintenance and repair (including replacements, as necessary) of (A) the Common Areas and Facilities, including the removal of snow, ice and debris therefrom, (B) all structural portions of the Building (whether or not within, above, below, or outside of the Leased Space), including the roof with built -up insulation, downspouts, drains, gutters, exterior and interior walls, ceilings, floor slabs, foundation and structural supports and windows, (C) the IIVAC serving the Building, (D) the water, sewer, gas, telephone, electrical, and other utility lines, equipment and facilities from each public or private utility source to the point where such utility enters the Leased Space, (E) the removal of water which has infiltrated any and all portions of the Building, and the abatement of any hazardous or dangerous conditions or substances which may result or has resulted from such infiltrations, and (F) the portions of various utility lines, systems, equipment and facilities within the Leased Space which service other tenants or occupants of any portion of the Property either exclusively or in common with Tenant, and (ii) the removal from the Property (including the Building) of all hazardous or dangerous substances, whether or not regulated under any Laws, pertaining to the environment. In addition to, and not in limitation of, Landlord's Work and Landlord's other responsibilities set forth elsewhere in this Lease, if it is determined that, during the course of the commencement and/or completion of either Landlord's Work or Tenant's Work, in order for Tenant to either be able and/or be permitted pursuant to applicable Laws, to commence, proceed with and/or complete Tenant's Work, certain remedial work is necessary to maintain, preserve or restore the integrity of the Building's roof, structure, or utility systems, equipment and/or facilities, Landlord shall promptly commence and complete, at Landlord's sole cost and expense, all such remedial work in accordance with applicable Laws. In carrying out its responsibilities as required under this Section [12], Landlord shall promptly undertake all such maintenance, repair and replacement work as soon as Landlord knows of the need therefor and thereafter shall diligently prosecute the same to completion. All such work shall be commenced and completed in accordance with applicable Laws and undertaken in a manner which does not unreasonably disrupt or interfere with the business activities of Tenant and, to the extent practical, all repairs shall be done during the hours that Tenant is not open for business. During any period when all or a portion of the Leased Space is rendered untenantable due to Landlord's activities as contemplated by this Section [12] and not caused by Tenant, Tenant's obligation to pay Rent under this Lease shall be abated. - 13 - PHBF/ 858850.4 (b) Except as specifically set forth in Section [10](b) hereof, Landlord, at Landlord's sole cost and expense, shall comply with all Laws relating to the components of the Leased Space, the Building, the Common Areas and Facilities and/or the Property, which Landlord is obligated to maintain, including those pertaining to handicapped access to and egress from the Leased Space, the Building, the Common Areas and Facilities and/or the Property as well as between and among the various levels of the Leased Space, if any, and of the Building, if any, seismic reinforcement, replacement and retrofitting, life and fire safety and the protection of health and the environment. (c) Landlord shall maintain (or cause the Prime Landlord to maintain) (i) property insurance covering the Building (including the Leased Space as improved by Landlord's Work) and any other improvements on the Property, and (ii) commercial general liability insurance coverage written on an occurrence form with a contractual liability endorsement covering Landlord's indemnity obligations under this Lease, with a combined single limit of not less than Two Million ($2,000,000) Dollars per occurrence and annual aggregate covering claims for bodily injury (including death), property damage occurring in or about the Common Areas and Facilities. Landlord shall deliver to Tenant said certificates thereof upon Tenant's request. (d) Landlord and its authorized representatives may upon reasonable advance notice to Tenant (except in the case of an emergency, in which event no such notice shall be required): (i) inspect the Leased Space; (ii) exhibit the Leased Space to current and prospective purchasers, lenders, insurers, governmental authorities and, within the twelve (12) months prior to the Expiration Date of the Initial Lease Term or the Extension Term (or earlier if an Event of Default has occurred and is continuing), as the case may be, to brokers and prospective tenants; and (iii) enter the Leased Space for the purpose of exercising any rights or remedies expressly granted or reserved to Landlord under this Lease or applicable Laws, or to make any repairs, maintenance, replacements, improvements or alterations or other work in or about the Leased Space consistent with Landlord's responsibilities hereunder. In connection with exercising such rights, Landlord shall use all of its reasonable diligent efforts to conduct itself in a manner so as not to disrupt or interfere with the operation of Tenant's business thereon or therefrom, which shall include, to the extent possible, the exercise of such rights during the hours that Tenant is not open for business. (e) Landlord shall not permit any sidewalk sales in front of the Leased Space (if the sidewalks are controlled by Landlord) or the display or sale of any merchandise in the Common Areas and Facilities in a manner which, in Tenant's judgment, is or would be deleterious to the operation of Tenant's business on and from the Leased Space or injurious to Tenant's image or reputation, and Landlord shall cause such sales or displays to be terminated promptly after Tenant's notice that the same is objectionable. (f) Landlord may promulgate rules and regulations for the Common Areas and Facilities (which Tenant shall reasonably comply with) but shall not promulgate any rule or regulation for either the Building or the Common Areas and Facilities which impairs Tenant's use, occupancy and /or enjoyment of the Leased Space or the operation of its business - 14 - PHBF/ 858850.4 thereon or therefrom (including any rule or regulation which would affect the days or hours of Tenant's operation), and Landlord shall apply uniformly all rules and regulations to all tenants and occupants of other premises on the Property from time to time. To the extent any such rule or regulation is breached by any such other tenant or occupant, Landlord shall enforce such rule or regulation against such other tenant or occupant, at Landlord's sole cost and expense. (g) The address set forth in Paragraph [E] of the Schedule of Terms is the legal address for the Leased Space which may be used for purposes of delivery of all construction materials, inventory, merchandise and other items of personal property to be used by Tenant, its contractors, agents and employees to prepare and perform Tenant's Work, and to otherwise ready the Leased Space for Tenant's use, occupancy and enjoyment and for the operation of Tenant's business thereon and therefrom. [13] SIGNS. Permission is hereby given to Tenant, at Tenant's sole cost and expense, to erect or install lighting, awnings and/or signs in the interior of the Leased Space, as well as on the exterior of the Leased Space and/or the Building, without Landlord's approval and at Tenant's discretion, to the maximum extent possible, so long as such exterior signage complies with applicable Laws. Tenant shall be responsible for the erection and maintenance of such lighting, awnings and/or signs in accordance with all such applicable Laws. Tenant agrees, at Tenant's sole cost and expense, at the Expiration Date of the Initial Lease Term or the Extension Term, as the case may be, to remove such awnings and/or signs, if directed by Landlord to do so, and to repair any damage to the Leased Space and/or the Building caused by the erection, maintenance or removal thereof. If Landlord does not so direct, Tenant may still remove any such signage or other devices which identify Tenant. [14] ADJACENT PROPERTIES. Landlord covenants and agrees that, as to leases entered into subsequent to the execution of this Lease, if the purpose of the occupancy of any space immediately adjacent to the Leased Space is for the operation of a dine -in, take -out, food court or delivery- service restaurant business (each, a "Restaurant "), each occupant of such other premises shall covenant and agree in its lease with Landlord to (a) maintain the Restaurant and any sidewalks, entryways, passages, courts, corridors or halls which are part of the Restaurant (or otherwise such Restaurant's responsibility to clean or maintain) in a clean, orderly and sanitary condition, free of trash, debris, insects, rodents, vermin and other pests; (b) have any garbage, trash, rubbish and refuse removed in accordance with Building rules and regulations; (c) maintain efficient and effective devices for preventing and eliminating any odors or fumes, cooking or otherwise, which may interfere with Tenant's use, enjoyment or occupancy of the Leased Space; (d) if the Restaurant is located in premises above the Leased Space, take all actions necessary to prevent any flooding or leakage into the Leased Space; and (e) be obligated to employ from time to time a licensed exterminator who shall treat the Restaurant for vermin, rodents and insects, at occupant's sole cost and expense, on a scheduled basis. Landlord also covenants and agrees to actively enforce such provisions (or provisions of similar import) contained in any such Restaurant leases. [15] ASSIGNMENT AND SUBLETTING. Tenant shall be permitted to assign this Lease or sublet any portion of the Leased Space during the Initial Lease Term and the Extension Term; provided, however, that: (a) Tenant notifies Landlord of its intention to assign -15 PHBF/ 858850.4 or sublet; (b) the assignment or subletting is by written agreement and a copy thereof is provided by Tenant to Landlord; (c) in the case of an assignment, the assignee assumes Tenant's obligations under this Lease by written agreement; and (d) any assignment or subletting shall not release Tenant from any of the terms, covenants, conditions or provisions of this Lease. Landlord specifically acknowledges that Tenant (i) may either assign this Lease or sublet any portion(s) of the Leased Space during the Initial Lease Term and the Extension Term to any corporation, limited liability company or partnership into or with which Tenant may be merged or consolidated or to any corporation, limited liability company or partnership which shall be an Affiliate, subsidiary, parent or successor of Tenant, or to a partnership, the majority interest in which shall be owned by the stockholders or other interest or equityholders of Tenant or of any such corporation, or to any person or entity which acquires at least five (5) of the stores of Tenant (including the store at the Leased Space) which are open and operating under the same trade name as of the date of acquisition, or (ii) convert its structure into any other type of structure as may be permitted by Laws, and in any such event, the conditions of clauses (a) and (b) shall not apply. Landlord acknowledges that the stock of or other equity interest in Tenant is not publicly traded as of the date of this Lease, and, therefore, neither (A) any subsequent public offering of any or all of the stock or interests in Tenant, nor (B) any sale, assignment or other transfer of the stock or interests in Tenant by a shareholder(s) or other holder(s) pursuant to either a public offering or private sale shall be deemed an assignment of this Lease by operation of law or otherwise. Except as expressly permitted under this Section [15], Tenant agrees not to assign or in any manner transfer this Lease or any estate or interest therein, and not to lease or sublet the Leased Space or any part or parts thereof or any right or privilege appurtenant thereto, and not to allow anyone to conduct business at, upon or from the Leased Space (whether as concessionaire, franchisee, licensee, permittee, subtenant, department operator or otherwise), or to come in, by, through or under it, in all cases either by voluntary or involuntary act of Tenant or by operation of law or otherwise, without the consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. [16] INDEMNIFICATION; WAIVER OF SUBROGATION. (a) Tenant agrees to indemnify, defend and hold harmless Landlord during the Initial Lease Term and the Extension Term against and from all claims, losses, liabilities, costs, damages or expenses (including reasonable attorney's, consultant's and expert fees and expenses actually incurred) directly or indirectly arising out of or attributable to any injury to any person (including death) or damage to any property which arises from Tenant's act or omission, negligent or intentional, or from the failure of Tenant to keep, observe, and perform any of the terms, covenants, conditions and provisions of this Lease to be kept, observed or performed by Tenant, unless such injury or damage is caused by the negligence or wrongful act of Landlord, its agents, contractors, servants or employees. Landlord agrees to indemnify, defend and hold harmless Tenant during the Initial Lease Term and the Extension Term against and from all claims, losses (which shall not be limited to the loss or restriction of use of the Leased Space), liabilities, costs, damages or expenses (including reasonable attorney's, consultant's and expert fees and expenses actually incurred) directly or indirectly arising out of or attributable to any injury to any person (including death) or damage to any property which -16 PHBF/ 858850.4 occurs in the Common Areas and Facilities during the Initial Lease Term and the Extension Term, the failure of Landlord to keep, observe and perform any of the terms, covenants, conditions and provisions of this Lease to be kept, observed or performed by Landlord, or from Landlord's act or omission, negligent or intentional, or out of any misrepresentation or breach or non - fulfillment of warranty by Landlord, unless the same is caused by the negligence or wrongful act of Tenant, its agents, contractors, servants or employees. The scope and the extent of the respective obligations of Landlord and Tenant under this Section [16] shall be to the fullest extent permitted by Law, and also shall not be limited to the minimum dollar amounts of commercial general liability insurance to be maintained by Landlord and Tenant, respectively, under this Lease. The indemnification, defense and hold harmless provisions of this Section [16] shall survive the Expiration Date of the Initial Lease Term or the Extension Term, as the case may be. (b) As to any loss or damage which occurs upon the property of a party hereto, such party hereby releases the other, to the extent of such damaged party's insurance indemnities, from any and all liability for such Loss or damage even if such loss or damage shall be brought about by the fault or negligence of such other party, or the agents, servants or employees of such other party; provided, however, that this release shall be effective only with respect to loss or damage occurring during such time as the applicable policy(ies) of insurance shall contain a clause to the effect that this release shall not affect said policy(ies) or the right of the insured to recover thereunder. If any policy does not contain such a clause, the insured party shall, at the request of the other party to this Lease, have such a clause added to said policy if obtainable. [17] ALTERATIONS AND IMPROVEMENTS. Tenant, at Tenant's sole cost and expense, may make any alterations and improvements to the Leased Space and /or the Building, either interior or exterior, as it desires and without Landlord's consent, for Tenant's use, occupancy and enjoyment and the operation of its business thereon and therefrom, at any time during the Initial Lease Term and the Extension Terms, if any, including Tenant's Work necessary for Tenant's initial use and occupancy, except for alterations and improvements which would affect the structural integrity of the Building and /or the utilities systems, lines and equipment contained therein, which latter work shall be done in accordance with plans and specifications submitted by Tenant to Landlord for approval prior to the commencement thereof. Tenant shall not be obligated to perform any of such alterations and improvements in compliance to so- called "LEED" (or its equivalent) construction or certification standards, except as required by Laws. Landlord's failure to notify Tenant of any objections within ten (10) days after the date of submission of the plans and specifications for any such work shall be conclusively presumed to constitute Landlord's consent thereto. Tenant's improvements necessarily may include high speed data connection service, such as Tl line and /or a high speed cable connection (along with a high speed line from the Leased Space to the service provider's connection box) to link the Leased Space to Tenant's communication network. To the extent Tenant and its designees require access to areas of the Property outside of the Leased Space to commence and complete any such alterations or improvements, Landlord shall provide or otherwise ensure such access, at no cost or expense to Tenant. All alterations and improvements which are made by Tenant for which Landlord's consent must be requested as aforesaid shall remain upon the Leased Space at the Expiration Date of the Initial Lease Term or the Extension Term, as the case may be, in the - 17 - PHBF/ 858850.4 absence of an agreement to the contrary between the parties hereto. Anything in this Lease to the contrary notwithstanding, all Tenant's Work which is non - structural in nature and any trade fixtures, trade equipment, trade machinery, goods and effects whenever installed or placed in, on or about the Leased Space by Tenant, whether attached to the Leased Space or not, shall remain the personal property of Tenant and shall be removable by Tenant, at Tenant's election, from time to time and also upon the Expiration Date of the Initial Lease Term or the Extension Term, as the case may be; provided, however, that Tenant shall repair, or cause to be repaired, at Tenant's sole cost and expense, any damage to the Leased Space caused by the removal of said additions and improvements, trade fixtures, equipment, machinery, goods and effects, and, provided further, that any additions or improvements remaining on the Leased Space upon the Expiration Date shall become the personal property of the Landlord and there shall be no obligation of Tenant to remove said additions and /or improvements. Landlord recognizes and agrees that whenever its consent or approval is required hereunder with respect to alterations and improvements to the Leased Space and/or the Building, it shall be unreasonable for Landlord to withhold its consent or approval on the basis of aesthetics, so long as the subject alterations or improvements are consistent with Tenant's then current aesthetic design and construction standards. [18] LIENS. Tenant shall keep the Leased Space free from any liens arising from any labor performed by or on behalf of, or materials furnished to, Tenant. If any such lien attaches, and the same is not discharged of record (by bonding or otherwise) within forty -five (45) days after Landlord notifies Tenant thereof, then Landlord shall have the option to discharge the same and Tenant shall reimburse Landlord therefor as Additional Rent within thirty (30) days after receipt of an invoice therefor. [19] DAMAGE. (a) In the event of damage to or destruction of the Leased Space, or to any portions of either the Building or the Common Areas and Facilities (whether or not the Leased Space is directly affected), caused by fire or other casualty, whether by act of God or not, intentional, or otherwise, Landlord shall make repairs and restorations to components of the Building which Landlord is obligated to maintain and repair as set forth in this Lease (including the construction of Landlord's Work), and Tenant shall complete Tenant's improvements and open for business within ninety (90) days after Landlord's delivery of possession of the Leased Space to Tenant with all repairs and reconstruction substantially completed, unless this Lease is terminated by either Landlord or Tenant as hereinafter provided. If the damage or destruction is to the Leased Space or to any portion(s) of the Common Areas and Facilities and the same cannot be restored within one hundred eighty (180) days after commencement of the work to the condition as existed immediately prior to such damage or destruction, then Landlord shall so advise Tenant promptly, and either party hereto, for a period of thirty (30) days after Tenant's receipt of such notice, shall have the right to terminate this Lease by notice to the other, as of the date specified in such termination notice, which termination date shall be no earlier than thirty (30) days nor later than sixty (60) days after the date of such termination notice. In the event of such fire or other casualty, if this Lease is not terminated pursuant to the provisions of this Section [19], then Landlord shall proceed diligently to restore the Leased Space and any portions of the Common Areas and Facilities so damaged or destroyed so that the affected portions are in 18 PHBF/ 858850.4 the same condition, to the extent reasonably possible, as existed prior to the occurrence of the damage or destruction. (b) In the event of such damage or destruction and if this Lease has not been terminated as elsewhere provided herein, if Landlord has not substantially completed the repairs and reconstruction of the Leased Space within two hundred seventy (270) days after the date on which such damage or destruction occurred so that the Leased Space is in the same condition as it was immediately prior to such damage or destruction, Tenant, at its option, may terminate this Lease by giving notice thereof to Landlord at any time prior to the substantial completion of such work. (c) For purposes of this Section [19], the standard for the term "substantial completion" shall be a state of completion when there remains to be completed only punchlist items of minor finishing and adjustment mutually determined by Landlord and Tenant. Landlord further covenants and agrees, at its sole cost and expense, to complete such punchlist items within thirty (30) days after the date of substantial completion. (d) If Landlord elects to terminate this Lease as provided herein, then it is agreed and understood that no such notice of termination by Landlord shall be effective unless Landlord shall have similarly and simultaneously cancelled the leases of all other similarly located ground floor retail store tenants in the Building so affected by the damage or destruction. (e) If any such damage or destruction to the Leased Space or to any portions of the Common Areas and Facilities or to the Building is of a nature or extent that Tenant's continued use and occupancy of the Leased Space is impaired, the Rent payable by Tenant hereunder shall be equitably abated until the date on which Tenant has reopened for business to the public, fully stocked and staffed, in the Leased Space. [20] TAKING. (a) If any portion(s) of the Leased Space is taken or condemned for a public or quasi - public use by any lawful power or authority, or if Tenant is denied access to or egress from the Leased Space by any action or decree of any lawful power or authority or as a result of natural or other disaster, or if Tenant is denied or deprived of either the use, occupancy and/or enjoyment of the Leased Space and/or the ability to operate its business thereon or therefrom by action or decree of any lawful power or authority or as a result of natural or other disaster, or by any oral or written agreement between Landlord or any such power or authority or by the acquiescence of Landlord (individually, and collectively, a "taking "), and the taking is not deemed "temporary" (as that term is hereinafter defined), this Lease shall, as to the part which is subject to the taking, terminate as of the date Tenant is denied or deprived of such possession, use, occupancy, enjoyment and/or operation of or on the Leased Space, and the Rent due hereunder shall be reduced proportionately by the square footage of the Leased Space which is so affected. - 19 - PHBF/ 858850.4 (b) Should any portion(s) of the Common Areas and Facilities be the subject of a taking (and no portion of the Leased Space is directly affected), but the taking materially adversely affects Tenant's use, occupancy and/or enjoyment of the Leased Space and/or the operation of Tenant's business thereon or therefrom, then the Rent due hereunder shall be equitably reduced as of the date on which such taking commenced to reflect the impact on Tenant. (c) If, however, only a portion of the Leased Space, or of the Common Areas and Facilities, or of the Property (notwithstanding that the Leased Space and/or the Common Areas and Facilities are not directly affected) is subject to a taking, whether or not temporary, and such taking renders the Leased Space unfit, in Tenant's reasonable opinion, for Tenant's use, occupancy and/or enjoyment of the Leased Space, and/or the continued operation of Tenant's business thereon or therefrom, Tenant shall have the option, but not the obligation, of terminating this Lease by giving Landlord notice to that effect within thirty (30) days after the taking. (d) A taking, whether partial or total, shall be deemed "temporary" hereunder if, as of the date on which such taking commenced, Tenant has the expectation that, within one hundred fifty (150) days after the taking, Tenant's access and egress to and from the Leased Space, and /or Tenant's possession, use, occupancy, enjoyment and operation of or on the Leased Space, as the case may be, shall be restored to the satisfaction of Tenant. In the event of a temporary taking, Rent shall be reduced as aforesaid, and Tenant's other obligations under this Lease shall be suspended, for the duration thereof. If, after one hundred fifty (150) days, notwithstanding Tenant's expectation, Tenant's rights have not been restored to Tenant's satisfaction as aforesaid, then Tenant shall notify Landlord to such effect, the taking shall no longer be deemed temporary, and the other provisions of this Section [20] applicable to a taking shall then apply. (e) In the event of any total or partial taking, whether temporary or not, Tenant waives all claims against Landlord and agrees that its claim against the exercising power or authority shall be limited to those claims provided by applicable Laws for lessees similarly situated which shall not diminish the award to Landlord, such as business interruption and loss of business, removal expenses and loss of leasehold improvements, trade fixtures and personalty. (f) If this Lease shall continue after a partial taking, Landlord shall make such repairs and restorations to the remainder of the Property (including the Leased Space) as may be required by Tenant for the continued operation of Tenant's business on and from the Leased Space (or the remainder thereof), but Landlord shall not be required to expend any sums in excess of the total of all award and insurance proceeds received by it; provided, however, that if such collective proceeds are insufficient, in Landlord's opinion, to complete the repairs and restorations and Landlord is unwilling to expend any additional sums, then Landlord shall notify Tenant to that effect, and Tenant shall have the option of (a) terminating this Lease by giving notice to Landlord, the effective date of which shall be no less than fifteen (15) days and no more than sixty (60) days after the date of Tenant's notice, within thirty (30) days after Tenant's receipt from Landlord of Landlord's notice of its unwillingness to expend such additional sums - 20 - PHBF/ 858850.4 and the Rent shall be apportioned as of the effective date of such termination notice, or (b) paying the additional amount needed to complete the repairs and restorations as may be required by Tenant for the continued operation of its business on and from the Leased Space. (g) Landlord agrees to promptly notify Tenant of any taking, but in any event no later than ten (10) days after Landlord learns thereof. [21] TENANT'S DEFAULTS. Any other provisions of this Lease to the contrary notwithstanding, it shall be deemed to be an "Event of Default" under this Lease if (a) Tenant fails to pay any installment of Rent which is due and payable hereunder by Tenant and such failure continues for a period of seven (7) days after Tenant's receipt of notice thereof from Landlord, or (b) Tenant fails to keep, observe or perform any other term, covenant or condition of this Lease to be kept, observed or performed by Tenant and such failure continues after Tenant's receipt of notice of default thereof from Landlord for more than thirty (30) days, provided that if the same cannot be cured within thirty (30) days, then within such additional time, if any, as is reasonably necessary to complete such cure, provided that Tenant has commenced such cure within the initial thirty (30) day period and diligently pursues such cure to completion, or (c) if there is filed by or against Tenant a petition in bankruptcy or insolvency or for reorganization or for the appointment of a receiver or trustee, or if Tenant makes an assignment for the benefit of creditors or takes advantage of any insolvency act or code, and within one hundred twenty (120) days thereafter Tenant fails to secure discharge of any of such proceedings. [22] REMEDIES FOR TENANT'S DEFAULTS. (a) If an Event of Default as defined in Section [21 ] hereof shall have occurred and is continuing Landlord may, at its option in addition to all other rights and remedies available to Landlord at law or in equity: (i) Terminate this Lease by giving prior notice thereof to Tenant in compliance with Colorado Law, and, upon the expiration of such notice period, this Lease shall terminate with the same force and effect as though the date of such notice were the Expiration Date, and all rights of Tenant hereunder shall expire and terminate, but Tenant shall remain liable as hereinafter expressly provided, and/or (ii) Exercise any other rights and remedies available to Landlord at law or in equity; provided, however, that if the Event of Default pertains to Tenant's failure to initially open for business in the Leased Space for reasons outside of Tenant's control, under no circumstances may Landlord exercise any right or remedy, at law or in equity, or preclude the timely offset thereof by Tenant, all pursuant to the provisions of Section [17] hereof, notwithstanding the existence of any other Event of Default by Tenant that may then be alleged by Landlord. (b) At any time or from time to time after the repossession of the Leased Space, Landlord may relet all or any part thereof for the account of Tenant for such term(s) (which may be greater or less than the period which otherwise would have constituted -21 PHBF/ 858850.4 the balance of the Initial Lease Term or of the Extension Term then in effect, as the case may be) and on such conditions and for such uses as Landlord, in its reasonable discretion, may determine, and Landlord may collect and receive any rents payable by reason of such reletting for the account of Tenant. (c) In the event of any termination of this Lease or repossession of the Leased Space or any part thereof by reason of an Event of Default, as liquidated and agreed to damages and not as a penalty for the failure of Tenant to keep, observe and perform Tenant's covenants hereunder, Tenant agrees to pay the Minimum Rent which would be payable under this Lease by Tenant in the absence of such termination or repossession, less the net proceeds, if any, of any reletting pursuant to Section [22](b) hereof or otherwise, after deducting from such proceeds all of Landlord's reasonable expenses actually incurred directly attributable to such reletting, other than costs imposed or charged by Landlord or persons or entities affiliated with Landlord. (d) If the Lease is terminated or if Tenant is evicted without termination, Landlord will have the right to accelerate Rent, discounted to present value using Federal Reserve Bank discount rate, less the proceeds of reletting. Landlord shall use reasonable efforts to relet the Leased Space following termination of this Lease as a result of Tenant's default, provided Tenant acknowledges and agrees that Landlord may refuse to relet if Landlord determines that the proposed use or quality of the prospective tenant's operation is not then appropriate for the Building or if Landlord determines that the proposed rent is below market; in reletting, Landlord shall not be obligated to give preference to reletting the Leased Space over other vacant space. (e) In the event of any termination of this Lease or repossession of the Leased Space or any part thereof by reason of an Event of Default, Landlord agrees to use its commercially reasonable efforts to relet the Leased Space in order to mitigate the damages which will otherwise be incurred because of such early termination or repossession. (f) All remedies available to Landlord hereunder as a result of the occurrence of an Event of Default by Tenant shall be cumulative and concurrent, but may only be exercised by Landlord after Tenant has received all required notices from Landlord and all applicable periods have expired without a cure having been effectuated by Tenant. [23] LANDLORD'S DEFAULTS AND TENANT'S REMEDIES; LOSS OF LEASEHOLD. (a) It shall constitute a default hereunder if, from and after the date of this Lease, Landlord fails to keep, observe or perform any of its obligations to be kept, observed or performed under this Lease within thirty (30) days after Landlord's receipt of notice of nonperformance from Tenant; provided, however, that if such breach cannot be cured within thirty (30) days, then within such additional time, if any, as is reasonably necessary to complete such cure, so long as Landlord has commenced such cure within the initial thirty (30) day period and diligently pursues such cure to completion; and, provided further, that in the event of a breach that will adversely affect the operation of Tenant's business on the Leased Space, Tenant may, in its notice of breach, reduce the period for cure to any shorter period reasonable under the circumstances, so long as Tenant states in its notice the exact nature of the threat to the operation - 22 - PHBF/ 858850.4 of its business. If Landlord fails to cure such default within the applicable time period, then Tenant may elect, in addition to any and all other rights and remedies available to Tenant hereunder or at law or in equity, to cure such default on behalf of Landlord, but Tenant shall be under no obligation, express or implied, to do so. In such latter event, following the presentation to Landlord of reasonable evidence that Tenant has reasonably expended sums to cure such default and otherwise has incurred damages as a result of Landlord's failure to cure such default, Tenant shall be permitted to deduct such damages and reasonably expended sums, together with interest thereon at the Default Rate calculated as provided in Section [39] hereof from the installments of Rent next to become due under this Lease; provided, however, that the sums to be deducted in any month do not exceed fifty (50 %) percent of the installment of Minimum Rent payable therefor, and, provided further, that such deduction rights shall continue, subject to such fifty (50 %) percent limitation, until the reimbursement obligation of Landlord to Tenant is satisfied in full. Furthermore, such reimbursement obligation shall survive the Expiration Date or sooner termination of this Lease. (b) The parties hereto acknowledge and agree that (i) the leasehold estate created by this Lease is unique to Tenant and for the operation of its business therein and therefrom, (ii) the loss of this leasehold estate cannot be adequately compensated for by money damages, and (iii) money payment, bonding, or any other security cannot adequately protect Tenant from the loss thereof. Nevertheless, if, by virtue of Landlord's bankruptcy, or otherwise, it becomes necessary to value such leasehold estate, then a variety of factors must be taken into account to make a determination whether Tenant's interest in the leasehold estate is adequately protected. The parties hereto further acknowledge and agree that such determination of adequate protection must recognize the various unique aspects of the leasehold estate which cannot be duplicated, including, (I) the amount of rent and sums payable as additional rent therefor by Tenant if less than fair market value, (II) the cost of leasehold improvements made by or on behalf of Tenant, (III) the cost of furniture, fixtures and equipment installed by or on behalf of Tenant, (IV) the layout of the Leased Space for Tenant's business, and (V) the creation and development of good will and market presence for Tenant's business at the Leased Space. [24] OWNERSHIP, ENCUMBRANCES AND COMPLIANCE WITH LAWS. Landlord covenants, represents and warrants to and agrees with Tenant as follows: (a) Landlord is the owner of all rights, title and interests of the tenant under the City Lease, including the leasehold estate created thereby. (b) The Leased Space is currently zoned under all applicable Laws to permit the use and occupancy thereof for the Permitted Uses, and Landlord is unaware of any facts or circumstances that could or would cause any licenses or permits which may be required for Tenant's use and occupancy of the Leased Space either to not be granted, or, if granted, to not be continued in effect or renewed. (c) All requisite actions necessary to authorize Landlord to execute and deliver this Lease and to perform its obligations hereunder have been taken. - 23 - PHBF/ 858850 4 (d) The Property (including the Leased Space, the Building, and the Common Areas and Facilities) complies with all Laws, including those Laws relating to handicapped access and egress, seismic reinforcement, replacement and retrofitting, life and fire safety, health and the environment, and shall continue to so comply upon and after completion of Landlord's Work, excluding any compliance with Laws due to Tenant's Work or alterations to the Leased Space. (e) Neither the Leased Space nor the Property is subject to any mortgage, deed of trust, lien, claim or encumbrance (including the City Lease and the Prime Lease) as of the date of this Lease which shall prohibit or adversely affect Tenant's occupancy or the Permitted Uses hereunder, and to the actual knowledge of Landlord, there are no material violations or defaults under any such mortgage, deed of trust, lien, claim or encumbrance, or the City Lease or Prime Lease, and the enforcement of any such rights or claims shall not adversely affect the improvement, use, occupancy or enjoyment of the Leased Space and the Common Areas and Facilities by Tenant in the manner contemplated by this Lease. (f) No hazardous or dangerous substances, whether or not regulated under any Laws, pertaining to the environment, including asbestos, asbestos - containing materials, radon, toxic and non -toxic molds, and transformers containing or contaminated by PCBs, whether prior to or during the period that Landlord is the legal or beneficial owner of the Property, have been or are presently, used, handled, generated, processed, treated, stored, transported, released, discharged or disposed on, about, or beneath the Property, by any person whether or not in violation of any such Laws. (g) The Building is listed as a historic site, and the Land located within a historic district by the City of Aspen and the Aspen Historic Preservation Department. (h) The Property is a separately assessed real estate tax parcel for all purposes. (i) Landlord covenants and agrees not to voluntarily cancel or surrender the City Lease, or consent to any modification, amendment or supplement to the City Lease which will deprive Tenant of any or all rights under this Lease, without the prior consent of Tenant, and Landlord shall pay all amounts due and perform all obligations required of it under the City Lease in a timely manner (so long as such obligations are not otherwise undertaken hereunder by Tenant). (ii) Landlord shall promptly forward to Tenant any default, termination or other notice which it may receive from the City with respect to the City Lease or the Prime Lease. (iii) Landlord represents and warrants to and agrees with Tenant as follows as of the date hereof: - 24 - PHBF/ 858850.4 (A) the copy of the City Lease attached hereto as Exhibit "D" is true, correct, and complete, and is in full force and effect in accordance with, and subject to, all of the terms, covenants, conditions and agreements contained therein; (B) the term of the City Lease commenced on February 16, 2007, and is for a term of thirty (30) successive one year renewal terms expiring on August 31, 2037; (C) the City Lease has not been modified, amended or supplemented; (D) Landlord, as prime tenant, has received no notice of Landlord's default under the City Lease, Landlord knows of no default by the City under the City Lease or the Prime Lease, and no event or condition now exists which, with the passage of time or the giving of notice, or both, would or could constitute a default under the City Lease by either party thereto; and (E) Landlord has full right, power and authority to make and enter into this Lease for the full Term, and no joinder or approval of any other person or entity is required with respect to the Landlord's right and authority to enter into this Sublease, except the approval of the City. [25] SUBORDINATION OF LEASE; ATTORNMENT. This Lease shall become subject or subordinate to any lease, right, claim, mortgage or deed of trust hereafter placed against or affecting the Leased Space or any portion or portions thereof but only if the holder of any right or claim or the mortgagee under any mortgage or the lessor under any lease, as the case may be (hereafter the "holder ") shall have executed, acknowledged and delivered to Tenant a recordable, written instrument in form and content reasonably acceptable to Tenant (the "Non- Disturbance Agreement ") pursuant to which any such holder on behalf of itself and its respective heirs, personal representatives, successors and assigns (including any purchaser under foreclosure proceedings or grantee under a deed in lieu of foreclosure (the "Purchaser ")) shall recognize Tenant's interest in this Lease and permit Tenant to remain in quiet possession of the Leased Space (together with Tenant's non - exclusive right in and to the Common Areas and Facilities) for the balance of the Initial Lease Term and the Extension Term so long as Tenant shall pay the Minimum Rent as reserved hereunder and otherwise keep, observe and perform all of its obligations under this Lease. If any proceedings are brought for the foreclosure of, or in the event of exercise of the power of sale under, any mortgage (or other instrument) made by Landlord covering the Leased Space, Tenant shall, at the request of Purchaser, attorn to Purchaser upon any such foreclosure or sale and recognize such Purchaser as the Landlord under this Lease, subject to Tenant's receipt of a Non - Disturbance Agreement as provided above. [26] ESTOPPEL CERTIFICATES. Landlord and Tenant agree within thirty (30) days after receipt of a request therefor to execute and deliver to the other a statement, addressed to such party, in writing, certifying: (a) that this Lease is in full force and effect and - 25 - PHBF/ 858850.4 unmodified or, if modified, stating the date of modification and the terms thereof, (b) the Delivery Date, the Commencement Date, and the Expiration Date, (c) that the Rent is paid currently without any offset or defense thereto, or stating any offsets or defenses claimed by Tenant or Landlord, as the case may be, and known at the time of such statement, (d) the amount of Rent, if any, paid in advance, and (e) that, to the actual knowledge of the certifying party, there are no uncured Events of Default by Tenant or defaults by Landlord, as the case may be, or stating those claimed by either Tenant or Landlord provided that, in fact, such Events of Default or defaults are ascertainable. [27] LANDLORD'S WAIVER. If Tenant shall acquire trade fixtures, trade equipment, trade machinery or other goods and effects subject to a purchase money security interest, or shall lease any of the same, or if any institutional lender provides Tenant with financing the proceeds of which are intended to enable Tenant to use and occupy the Leased Space or to operate Tenant's business and such financing is secured in whole or in part by a lien on such goods or fixtures, Landlord shall, upon request from Tenant, execute a waiver of any right it may have to distrain upon or secure a lien against such goods or fixtures for any reason whatsoever, in form and content acceptable to the holders of any such security interest or the lessor under any such lease; provided, however, that the holder of any such security interest or the lessor under any such lease agrees in writing to repair any damage which may be done to the Leased Space as the result of the removal of such trade fixtures, equipment, machinery or other goods and effects. [28] NON - WAIVER OF DEFAULT. No delay or omission by Landlord in exercising any right upon any Event of Default by Tenant, or by Tenant in exercising any right upon any default by Landlord, will impair any such right or be construed as a waiver thereof or be deemed to be a waiver as to future events. [29] AGENT. Landlord and Tenant represent, warrant and agree that the only broker or agent with which they have dealt in connection with this Lease is The McDevitt Company and Frias Commercial Real Estate, for whose commissions Landlord agrees to be solely responsible. Landlord and Tenant agree to indemnify, defend and hold the other harmless of, from and against any claims against or costs and expenses (including reasonable attorney's fees and expenses) incurred by the other resulting from a misrepresentation, breach of warranty, nonfulfillment of warranty or breach of agreement with respect to the foregoing. The provisions of this Section [29] shall survive the Expiration Date of the Initial Lease Term and the Extension Term. [30] INTENTIONALLY DELETED. [31] ENTIRE AGREEMENT; AMENDMENTS IN WRITING. The parties hereto have read this Lease carefully and understand it fully. The parties expressly understand and agree that this Lease sets forth all of the terms, covenants, conditions, promises and agreements relative to the Leased Space, and there are no terms, covenants, conditions, promises or agreements, either oral or written, express or implied, other than those set forth herein. Neither this Lease, nor any Exhibits or Schedules attached hereto, may be modified or amended except pursuant to a written agreement executed and delivered by both parties hereto. -26 PHBF/ 858850.4 [32] PARTIES BOUND. All rights and liabilities given to, or imposed upon, the parties to this Lease shall also extend to and bind their several and respective heirs, personal representatives, successors and assigns. [33] RECORDATION OF MEMORANDUM OF LEASE. At the request of either party hereto, such parties shall execute and deliver a recordable memorandum or short form of this Lease. [34] NOTICES. All notices, statements, demands, requests, consents, communications and certificates to Landlord must be in writing and given by certified or registered mail, return receipt requested, postage prepaid, or by nationally- recognized overnight courier service, addressed to Landlord at the address set forth below (and regardless of whether or not the provisions of this Lease specifically indicate that a notice shall be in writing). All notices, statements, demands, requests, consents, communications and certificates by Landlord to Tenant must be in writing and given by certified or registered mail, return receipt requested, postage prepaid, or by nationally- recognized overnight courier service, addressed to Tenant at the address set forth below (and regardless of whether or not the provisions of this Lease specifically indicate that a notice shall be in writing). Any such notices, statements, demands, requests, consents, communications, or certificates may also be given to such other parties or addresses as Landlord or Tenant may designate in writing to the other from time to time in the manner prescribed above and in all cases shall be deemed given on the date the same is mailed or delivered in accordance with the provisions of this Section [34]. To Landlord: 9 Pyramid Road Aspen, CO 81611 Attn: Courtney Lord To Tenant: 5000 South Broad Street Philadelphia, PA 19112 Attn: President and 5000 South Broad Street Philadelphia, PA 19112 Attn: General Counsel with copy to: Drinker Biddle & Reath LLP One Logan Square, Suite 2000 Philadelphia, PA 19103 -6996 Attn: Harry S. Cherken, Jr., Esquire [35] PARTIAL INVALIDITY. If any term, covenant or condition of this Lease or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease and the application of such term, covenant or condition to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term, covenant and condition of this Lease shall be valid and enforceable to the fullest extent permitted by law. - 27 - PHBF/ 858850.4 [36] HEADINGS; GENERAL INTERPRETIVE PRINCIPLES. (a) Any headings preceding the text of the various Sections and subsections hereof are inserted solely for convenience and reference and shall not constitute a part of this Lease, nor shall they affect its meaning, construction or effect. (b) For purposes of this Lease, except as otherwise expressly provided or unless the context otherwise requires, (i) the terms defined in this Lease have the meanings assigned to them and include the plural as well as the singular, and the use of any gender hereunder shall be deemed to include the other genders; (ii) references herein to "Sections," "subsections," "paragraphs" and other subdivisions without reference to a document are to designated Sections, subsections, paragraphs and other subdivisions of this Lease; (iii) a reference to a subsection without further reference to a Section is a reference to such subsection as contained in the same Section in which the reference appears, and this rule shall also apply to paragraphs and other subdivisions; (iv) the words "herein," "hereof," "hereunder" and other words of similar import refer to this Lease as a whole and not to any particular provision; and (v) the word "including" means "including, but not limited to." [37] REASONABLENESS. Whenever the terms, covenants, conditions and provisions of this Lease entitle Landlord and /or Tenant to exercise their respective opinions, or to give their respective approvals or consents, such opinions shall be reasonable and such approvals and consents shall not be unreasonably withheld, conditioned or delayed, notwithstanding that in some, but not all, instances a reasonableness standard is referenced. Landlord agrees that if there are other tenants or occupants in the Building, Landlord will not take any actions, or exercise any opinions, or give any consents or approvals, with respect to such other tenants or occupants which either discriminate against Tenant or interfere with Tenant's use, occupancy and enjoyment of the Leased Space or the operation of its business thereon or therefrom. Furthermore, Landlord agrees that, having acknowledged its familiarity with the manner in which Tenant operates its business at other stores, nothing in this Lease is intended to require Tenant to operate its business in the Leased Space in a manner which is different from the manner Tenant generally operates its business at such other stores, and that it would be unreasonable for Landlord to exercise any of its approval, consent or other rights under the provisions of this Lease in a way which would prohibit Tenant from doing so. [38] FORCE MAJEURE. If either Landlord or Tenant shall be delayed or hindered in or prevented from the performance of any act required hereunder by reason of strikes, lockouts, labor troubles, inability to procure materials, failure of power, martial law, restrictive Laws, riots, insurrection, acts of terrorism, war or other reasons of a like nature not the fault of, or under the control of, the party delayed in performing work or doing acts required under the terms, covenants, conditions or provisions of this Lease, then performance of such act shall be excused for the period of the delay and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay; provided, however, that the foregoing provisions of this Section [38] shall not apply to (i) Landlord's reimbursement obligation for any reimbursement or payment obligation of Landlord hereunder, (ii) Tenant's obligation to pay Rent (except in those instances under this Lease which specifically provided for a reduction or abatement thereof, as in Sections [19] and [20] relating to fire, casualty and taking, - 28 - PHBF/ 858850.4 or if Tenant is unable to use, occupy or enjoy the Leased Space for the purposes intended by Tenant, including the operation of its business therein and therefrom because of any of the foregoing occurrences or events), or (iii) any other performance obligation under this Lease which specifically provides that the provisions of this Section [38] shall not apply; provided further, that as to the aforesaid payment or reimbursement obligations, the provisions of this Section [38] shall apply if delivery thereof is delayed because of any of the foregoing occurrences or events and either Landlord or Tenant, as the case may be, is able to establish that payment or reimbursement was presented to the delivery service (including either the postal or courier service) on or before the due date therefor. [39] DEFAULT RATE. Any payment of any sums hereunder, or sums advanced or expended to or on behalf of one of the parties hereto by the other party, whether by Landlord to Tenant, or by Tenant to Landlord, which is not made or repaid when due shall accrue interest at the Default Rate from the due date through the date of collection or set -off, as the case may be. [40] ATTORNEY'S FEES. If either Landlord or Tenant shall institute any action or proceeding against the other relating to any of the terms, covenants, conditions or provisions of this Lease, or there occurs any Event of Default by Tenant or default by Landlord, the unsuccessful party in such action or proceeding shall reimburse the successful party for reasonable attorney's fees and other costs and expenses incurred therein by the successful party, including fees, costs and expenses incurred in any appellate proceeding. [41] QUIET ENJOYMENT. Upon payment by Tenant of the Rent reserved and provided to be paid by Tenant hereunder and upon the keeping, observance and performance by Tenant of all of the terms, covenants, conditions and provisions of this Lease on Tenant's part to be kept, observed and performed, Tenant shall peaceably and quietly hold and enjoy the Leased Space for the Initial Lease Term and the Extension Term without hindrance or interruption by Landlord or by any person or persons lawfully claiming or holding by, through or under Landlord. [42] GOVERNING LAW. This Lease shall be construed, interpreted and governed by the laws of the State in which the Leased Space is situated. [43] COUNTERPARTS; FACSIMILES. (a) This Lease may be executed in any number of counterparts, each of which shall be an original, and such counterparts together shall constitute one and the same instrument. (b) The parties hereto agree that a facsimile or other electronic transmission of an executed counterpart of this Lease shall have the same binding effect on the signatory as an executed and delivered original thereof. The parties hereto further agree, for confirmatory purposes only, to exchange copies of executed counterpart originals promptly after the aforesaid facsimile or other electronic transmissions so that each party may have at least one (1) fully executed original hereof - 29 - PHBF/ 858850 4 [44] LANDLORD LIMITATION OF LIABILITY. If Landlord shall fail to perform any covenant, term or condition of this Lease upon Landlord's part to be performed, and if as a consequence of such default Tenant shall recover a money judgment against Landlord, such judgment shall be satisfied only out of the proceeds of sale received upon execution of such judgment and levied thereon against the right, title and interest of Landlord in the Building and out of rents or other net income from such property received by Landlord, or out of the consideration received by Landlord from the sale or other disposition of all or any part of Landlord's right, title and interest in the Building, subject, nevertheless, to the rights of Landlord's mortgagee, and neither Landlord, nor the individuals or entities which are owners of Landlord, nor any of Landlord's officers, directors, employees or agents, shall be liable for any deficiency [45] RECOGNITION, CONSENT AND NONDISTURBANCE FROM THE CITY AND PRIME LANDLORD; ASSIGNMENT OF PURCHASE OPTION. This Lease shall be conditioned upon the City entering into an Agreement for Recognition, Consent to Sublease, Nondisturbance and Adornment Under Lease agreement in a form substantially similar to that set forth in Exhibit "F ". The Prime Landlord has been asked to provide to Tenant an agreement that Tenant's possession of the Leased Space shall not be disturbed, and that Tenant's rights as tenant under this Lease shall be recognized, if the Prime Lease is terminated. If the Prime Landlord does not provide Tenant with such nondisturbance agreement, then unless and until such nondisturbance agreement is provided to Tenant, Landlord shall have the following obligations to Tenant: (a) In the event Tenant's interest in the Leased Space is terminated following termination of the Prime Lease, Landlord hereby agrees to immediately pay to Tenant a sum equal to the then unamortized cost to Tenant of Tenant's leasehold improvements in the Leased Space, which amortization shall be on a straight -line basis over the full stated initial Term of this Lease. Landlord's payment obligations under this Section [45](a) shall survive the termination of this Lease; and (b) In the event that the City is in default of its obligations under the Prime Lease, or the Prime Landlord is in default under the Mortgage and Indenture of Trust dated February 1, 2007 between the Prime Landlord and American National Bank, as Trustee, and either of such defaults trigger Landlord's purchase rights under the Purchase Option Agreement entered into between the Prime Landlord, the City and Landlord (a copy of which is attached hereto as Exhibit "G "), and Landlord elects to not exercise its purchase rights set forth in the Purchase Option Agreement, then Landlord hereby assigns to Tenant Landlord's purchase rights under the Purchase Option Agreement. Landlord agrees to promptly forward to Tenant any notices received by Landlord of any default by the City under the Prime Lease or any default by the Prime Landlord under the Mortgage. -30 Mir/ 858850.4 IN WITNESS WHEREOF the parties hereto, intending to be legally bound, have caused this Lease to be duly executed, under seal, the day and year first above - written. LANDLORD: ISIS RETAIL GROUP, LLC B • TENANT: FREE PEOPLE OF PA LLC By: It • utho ized ign tory - 31 - PHBF/ 858850.4 Exhibit "A" [INTENTIONALLY OMITTED] PHBF/ 858850.4 A-1 Exhibit "C -1" [Facade Control Zone] C -1 -1 PHBF/ 858850.4 m 1 y rTi 5 b m y — oro d CA CA b I m r) I Z m I, I x ��--- I hi 9 I I C) m I a •.; .,_..., .., . ......,..,...,?,_ i z tr, o I 1 I In s L 0 m r m m . II r � k s z,� a ir l . [ vai i%d EXHIBIT "C" Landlord's Work The Landlord shall deliver the Leased Space, Building and Common Areas and Facilities in accordance with (i) all Laws, (ii) as more fully set forth in the Lease entered into between the parties, and (iii) all other applicable provisions of this Lease. Tenant . shall not be required to accept possession of the Leased Space until Tenant has inspected the Leased Space and found the Leased Space and all of Landlord's Work to be in conformance with this Exhibit and the requirements of the Lease. I . Delivery of Leased Space. 1. The delivery of possession of the Leased Space free and clear of any and all hazardous substances pertaining to the environment, including but not limited to asbestos and asbestos - containing materials (encapsulated or not), toxic and non -toxic molds, radon, and transformers containing or contaminated by PCBs, whether or not presently regulated under any Laws. Appropriate environmental and inspection reports to be provided by Landlord and delivered to Tenant prior to acceptance of possession of the Leased Space. 2. Landlord shall ensure the delivery of the Leased Space in compliance with all applicable Laws, including but not limited to those concerning handicapped accessibility to and from the Leased Space, and to and from the Building and all Common Areas and Facilities. Landlord provided Tenant with evidence from the governing jurisdiction to support the compliant condition. 3. Delivery of the Leased Space to permit sound and music within the Leased Space typical of a Free People store. 4. Delivery of possession of the Leased Space, broom swept, and free of all prior tenant's fixtures, stockroom shelving, decorative lighting and fitting room partition walls. Landlord shall deliver the existing ceiling, general lighting, bathrooms, stockroom partition wall, demising walls and floor slab. Landlord shall provide fully demised Leased Space with studs extending to the underside of the roof deck or the floor above. Any proposed or future interior Landlord - installed utility lines, conduit, flexible conduit, BX conduit, pipes, ducts, shafts and chases within the Leased Space shall be located tight to the deck above, layout and location to be approved by Tenant acting in a reasonable manner. I I. Vanilla Shell Construction Requirements. 1. Floor. a. Landlord shall provide the existing, level at a single elevation, and clean concrete slab for the entire Leased Space. PHBF/ 858850.4 C -1 b. Landlord shall be responsible for assuring that the floor is designed to meet the governing building code load requirements of Tenant for (i) retail use, and (ii) full height stock room/storage use. 2. Walls. a. Interior Demising Walls — the delivery of the Leased Space fully demised with all existing demising walls extending to the underside of the roof deck on the floor above. 3. Watertightness. a. The roof and all levels, if more than one, including those at grade and below grade, are to be free from water intrusion. 4. Utilities. a. Provide to the Leased Space the existing separate meters or check meters as approved by municipality for all utilities and services to be used or consumed on the Leased Space by Tenant, including, but not limited to, electric and telephone. 5. Electrical. a. Landlord shall provide the existing 200 Amps 120/208V electrical service with meter socket identified by a meter socket number. 6. Telephone / Data. a. Landlord shall provide the existing conduit and wire from Local Provider switching equipment to the existing Dmarc for Tenant's full telephone communication service. 7. Heating, Ventilation and Air - Conditioning (HVAC). Landlord shall provide the existing HVAC system within the Building, existing access for connection points for any necessary or code - required chases, shafts or exhausts. 8. Plumbing. a. Sewer — Landlord shall provide the existing sanitary sewer line and plumbing facilities within the Leased Space. Landlord warrants that the sewer line is in good working order and free of obstructions. PHBF/ 858850.4 C -2 Exhibit "C -1" [Facade Control Zone] C -1 -1 PHBF/ 858850.4 . •,, 811.111. -.1•11 c / .. , • ' e . . ql0 • ' „ . ,.,. l Fr t 41 ,,,. , - - ii• qt. . li . . 4 r 1 TENANT'S .. . 1 1 " • A ile b t ,ihs • CONTROL ZONE • iii- ■ , 111: . 4 L,t''' , . . WITHIN DASHED t . • ii • ... . 4 • ,.. AREA -0 •. ... ..„, .. . . , • ,,,...:., 1i 44 P. # . 4 Il l .4 ot , ^ • 1 f ii MPI ' . Jr.. . f.., . .. '4 '. ;C h.'.. ". ' '''''''' •.• '' ' ;'•4 .,N4 ,.. '' ' '• • ' ' • , • . , ti • ' "Nu. - ' '' '4' •-•..,...,‘, z„.... .... .:•. N, -." ,- -.... •-,-, ,„, , . 1111 t .4.- • • ..'. =,-...... -...„ -.11,, .1 • - .f.,.. 1, ,,., A, 3 - Fi oil • e-0-14 ' . . . . . -,.-' 1 p,, 1::..-, - -. 1 ; ; i •-:;;;, 4 . P.- -- - -,, i .. • '- ..= E 44" , .!,,-....-■ I .„..,,,. _..... ..:,:. _„:„,._. ....., „ , ....., t . . 4 - '. 1 ...,,_-:1 • k Ma .. , ._ i. ., di " li _:,.,,. _ :J.' „.. ,, . . . 1 i . , .. . ,- , 1, ci - ' - ' -• - -- - - -- -.. __•.y.1 .1-t • _ .. -,:1 •-•-/ - , :ik ,.,,,.-.---.:.„-..,•-,,-,f-;„:„.•••:. . : ,.• • . , • . „ ' ... .. J „, ,...,,..; „,... .. ., . , . ''''' '''. ' • - ' ' ,' - . .' ''' ' ' ' ,4 1- 4V;%.' . - ' " ,- - •,V ' . • ,OPLE 406 E HOPKINS AVE, ASPEN, CO .,-.. r.", .. . .. .. _ , . o Z Z Z z O Q o m U J� 0 w CO W - O 0 CL U 0 z o Or mz w ~ w z F- o z o z U a F aZ ¢z Uzi F w Z I m wL a 0 < W l a0 m CC F wd'ikN= l7 OW 0 C O w NJ (.7O JJZ N Z,D Q2 Z W z waS ZOQO� Fa WW aO r F� H W 0 U w m m 5 = N RI O X Z Q N W O J W w f a W N W - 5 Z a J Z W '� W H WC� Z 0 CC N ' O S O F 0 CO \Z - F Z W W •% " Vl.. 1111 1#1111 li — I rill � i :III �) i 1 II j 1111 _ 1111 _� r r.lrrrrrrrr. n ..�r �r,.r,r !�rrrrr -liiii i _ I r 0111 1 � 011l ! I J a 1111 f • h. • 0 I t!f`• w to 0111 r o 0111 0111 — d ll I i Irrrrrrurrrwl viii 1 . / w 0 z r nuuuurwlnrrrr (� o = � I w 0 I ti �, N 0 1 C7 1111 F-W0 I Q 0111 ZOZ = II 11 °" zUZ�w W IMMI a 1111 I-` < WNW — z ¢ 1111 - ,ICI I l l l l l 11111111 I I 1 w :111 19 I� 1 I� I� I�I�II 1� o N ..:, 0 �� z f:4 4 0 U O Q N =- U w W = H J o ao w 'w'm m0 — u. n N z N O W 1 0 U a w� O O U O W w a 0 0 0 � _ w x 2 N O0 F r y J W Z O FT's W Q 0 Fy aU X L4 w Exhibit "D" [City Lease] PHBF/ 858850.4 II II IIIII IIIIII IIIII IIII IIIIII IIII III 1E1111 53 4 - JRNICE K VOS CAUDILL PITKIN COUNTY CO R 2336. D 0.00 SUBLEASE by and between The City of Aspen ( "City" or "Landlord "), and Isis Retail Group, LLC a Colorado Limited Liability Company ( "Tenant ") Dated: February 16, 2007 Isis Building Aspen, Colorado II II III III II I 1 I I ll 0 9e 5 JPNICE K VO5 CAUDILL PITKIN COUNTY CO R 2336.00 0 0.00 TABLE OF CONTENTS ARTICLE I DEFINITIONS Section 1.01. Definitions and Construction of Terms 6 ARTICLE II GRANT AND TERM Section 2.01. Premises 6 Section 2.02. Assignment of Declarant and Owners Rights 7 Section 2.03. COP Financing 8 Section 2.04. Term 9 Section 2.05. Rights to Purchase 10 Section 2.06. Isis Group Under - Subleases 12 ARTICLE III CONSTRUCTION Section 3.01. Landlord's Construction 12 Section 3.02. Tenant's Work 13 Section 3.03. Remodel of Lobby Area for Retail Use 13 ARTICLE !V RENT Section 4.01. Base Rent 14 Section 4.02. Reserve Account 14 ARTICLE V USE AND OPERATION Section 5.01. Use of Premises 15 Section 5.02. Signs 15 ARTICLE VI COMMON AREAS Section 6.01. Use of Common Areas 16 Section 6.02. Operation of Common Areas 16 Section 6.03. Common Area Expenses and Tenant's Pro- 17 Rata Share • 1Jffl ) U! 1 1 U J L J JII IIIIIIII l ll�lI IIILI 5 34584 of 467 R . D 0.00 Section 6.04. Tenant's Obligation for COP Administrative 17 Costs 17 Section 6.05. Changes to the Building or Premises ARTICLE VII REAL ESTATE TAXES Section 7.01. Tenant's Tax Obligation 18 ARTICLE VIII UTILITIES Section 8.01. Utilities 18 ARTICLE IX MAINTENANCE AND ALTERATIONS Section 9.01. Maintenance and Alterations 19 Section 9.02. Nuisance and Cleanliness 19 Section 9.03. Alteration of Premises 20 ARTICLE X INSURANCE Section 10.01. Insurance During Term 20 Section 10.02. Landlord Not Liable for Damages - Covenant to 71 Hold Harmless ARTICLE XI FIRE AND OTHER CASUALTY Section 11.01. Repair of Presmises and Building 22 ARTICLE XII EMINENT DOMAIN Section 12.01. Condemnation 23 23 Section 12.02. Damages 23 Section 12.03. Temporary Taking ARTICLE XIII ASSIGNMENT, SUBLETTING OR ACQUIRE ASPENFILM PREMISES 2 I II I 534584 JAN 111111E11111111111111111111111li CAUD IN COUNTY CO 233 6 00 i 0 14541 Section 13.01. Assignment and Subletting by Tenant 24 Section 13.02. Right to Acquire AspenFilm Lease 25 Section 13.03. AspenFilm's Right to Acquire Tenant's Lease 27 Section 13.04. AspenFilm's Right to Negotiate Acquisition of 28 the Property Section 13.05. AspenFilm's Right to Acquire Interests in 29 Tenant ARTICLE XIV ESTOPPEL CERTIFICATE, ATTORNMENT AND SUBORDINATION Section 14.01. Estoppel Certificates 31 Section 14.02. Subordinantion, Non - Disturbance and 31 Attornment ARTICLE XV TENANT'S RIGHT TO MORTGAGE Section 15.01. Tenant's Right to Encumber 32 ARTICLE XVI QUIET ENJOYMENT Section 16.01. Landlord's Covenants • 32 Section 16.02. Landlord's Mortgages 33 Section 16.03. Assignment of Theater Lease 34 Section 16.04. Assignment of AH Leases ARTICLE XVII DEFAULT Section 17.01. Default by Tenant 34 Section 17.02. Abandonment 35 Section 17.03. Surrender of Premises 36 Section 17.04. Landlord's Default 36 Section 17.05. Interest on Late Payment 36 Section 17.06. Attorney's Fees 36 Section 17.07. Remedies Cumulative 37 Section 17.08. No Waiver of Default ARTICLE XIX 3 • II II II III 111111111111111 11111111 0 534584 2 6/20 0 0014541 JANICE K VOS CPUDILL PITKIN COUNTY CO R 2336.00 0 MISCELLANEOUS Section 19.01. AH Units 37 Section 19.02. Memorandum of Lease 37 - Section 19.03. Notices 38 Section 19.04. Entire Agreement 38 Section 19.05. Binding Effect 38 • Section 19.06. Consents 39 Section 19.07. Construction 39 Section 19.08. Deed Restrictions 39 Section 19.09. Payments Due from Landlord 39 EXHIBITS: Ex. MOU -1 — Memorandum of Understanding Ex. A — The Premises Plan Ex. DR -1 — Occupancy and Use Deed Restriction, Agreement, and Covenant Ex. B — Renovation Agreement — Assignment of Renovation Agreement Ex C — Base Rent Schedule . Ex. D — Statement of members of Tenant LLC 4 111111111111 I I I II 5 g 4 541 JA K VOS DILL PITKIN COUNTY CO R 2336.00 D 0.00 SUBLEASE THIS SUBLEASE (the "Lease ") is entered into as of the 16th day of February, 2007, between, The City of Aspen, a Colorado Municipal Corporation acting through its City Council , the address of which is 130 South Galena Street, Aspen, CO 81611, (the "City" or "Landlord "), and Isis Retail Group, LLC., a Colorado Limited Liability Company, the address of which is 9 Pyramid Road, Aspen, CO 81611 ( "Tenant "). WHEREAS, City, Tenant and Independent Films, Inc., a Colorado nonprofit corporation d /b /a Aspen Filmfest ( "AspenFilm ")have entered into a Memorandum of Understanding (the "MOU "), a true copy of which is attached hereto at Exhibit MOU -1, concerning the acquisition, redevelopment and leasing of the Isis Theater Building (the "Building ") located at 406 East Hopkins, Aspen Colorado. All capitalized terms in the MOU shall be given the same meaning herein; and, WHEREAS, The City of Aspen Public Facilities Authority, a non - profit corporation ( "Authority "), the address of which is 130 South Galena Street, Aspen, CO 81611, is the owner of the Commercial Unit, ( "Commercial Unit A ") and Units C and D (the "AH Units ") in the Building, is the "Authority" referred to in the MOU, and has entered into a Lease Purchase Agreement with the City for the rental of said units, which Lease Purchase Agreement is recorded at reception no.C34S9-I , of the records of the Clerk and Recorder of Pitkin County, Colorado, (the "Authority Lease "); and WHEREAS, City is hereby subleasing to Tenant, its interest in the Authority Lease as it pertains to the Premises, and is also executing this Lease for the purpose of memorializing its obligations, duties and rights, other than as Landlord, as set forth in the MOU with respect to the Tenant's rights and obligations set forth herein and in the MOU; and WHEREAS, it is intended that, Commercial Unit A, as defined in the Condominium Declaration for Isis Theater Condominiums ( "Declaration ") recorded in the Pitkin County Clerk and Recorder's records at reception #438433 on December 9, • 1999, and as shown on the Condominium Plat recorded in the Pitkin County Clerk and Recorder's records at Plat Book 52, Page 1, on December 9, 1999 (the "Plat "), be reconfigured and recondominiumized (the "Recondominiumization ") to create a separate commercial condominium unit for the Premises leased hereunder, to be known as "Commercial Unit 1," and to create Commercial Unit 2, to be leased by AspenFilm, as a tenant thereof under a separate lease agreement with Landlord (the "AspenFilm • Lease "), all substantially in accordance with the plan shown on Exhibit A, attached • hereto and incorporated herein by this reference (the "Premises Plan "); and 5 1111111111111111 1 (III I II 5 6/2007 01:541 JANICE K VOS CAUDILL PITKIN COUNTY CO R 2336.00 D 0.00 :. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: ARTICLE I DEFINITIONS Section 1.01 Definitions and Construction of Terms— Defined terms used in this Lease which are also used in the Authority Lease shall have the same meaning as in the Authority Lease, unless otherwise specified herein or unless the context requires a meaning unique to this Lease. In the event of any inconsistency between the meaning of a defined term in the Authority Lease and the meaning of a defined term that makes sense in the context of this Lease, the meaning that makes sense in the context of this Lease shall be given paramount effect; provided, however, the parties hereto acknowledge that this Agreement is intended to comply in all respects with the Authority Lease and it shall be interpreted to be consistent with the intent of the Authority Lease. ARTICLE II GRANT AND TERM Section 2.01 Premises (a) In consideration of the sums to be paid and the obligations to be performed by each of the parties pursuant to this Lease, Landlord hereby leases to Tenant, and Tenant rents from Landlord, premises consisting of the following which are contained in the Building: (i) a portion of the Premises shown on the Premises Plan and described thereon as Commercial Unit 1; and (ii) two existing affordable housing Condominium Units C & D ( "AN Units ") together with all improvements and equipment now or hereafter erected or installed thereon, all of which are subject to the Declaration (collectively, Commercial Unit 1 and Units C and D shall be referred to herein as the "Premises "). AspenFilm shall lease pursuant to a separate Sublease Agreement Commercial Unit 2. The portion of Commercial Unit A that is included in the Premises shall be referred to herein as Commercial Unit 1, and the portion of Commercial Unit A that is to be leased by AspenFilm shall be referred to herein as "Commercial Unit 2 ", notwithstanding the pendency of completion of the Recondominiumization. (b) Commercial Unit 1 shall be deemed to contain, as of the date hereof, approximately three thousand seven hundred (3,700) Square Feet of floor area ( "Commercial Unit 1 Floor Area "). Until such time as the Recondominiumization is completed, Tenant's share of common expense and utility charges (not otherwise separately metered or assessed to Commercial Unit 1) (the "Tenant's Commercial 6 • 1111111111101111111111111111111 Page: 584 001:541 JRNICE K VOS CAUDILL PITKIN COUNTY CO R 2336.00 0 0.00 Unit Pro -Rata Share "), shall be seventeen (17 %) percent of those assessed to Commercial Unit A (3,700/21,664 (total floor area of Commercial Unit A). The Commercial Unit 1 Floor Area calculation shall be subject to adjustment in the event any mezzanines are constructed within the boundaries of Commercial Unit 1 so that the Tenant's Commercial Unit Pro -Rata Share shall be the percentage of floor area within _ Commercial Unit 1 plus Commercial Unit 2, that Commercial Unit 1, including new mezzanine floor area represents. In the event the boundaries of Commercial Unit 1 are expanded beyond those shown on the Premises Plan to take a portion of the remaining floor area of Commercial Unit 2 (with AspenFilm's consent), then the floor area of the expanded portion of the boundary of Commercial Unit 1 shall be added to the Commercial Unit 1 Floor Area and subtracted from the remaining floor area of Commercial Unit 2 and the ratio of the resulting floor areas shall be recalculated and the Tenant's Commercial Unit Pro -Rata Share shall be revised accordingly. Section 2.02 Assignment of Declarant and Owner Rights Not later than the Commencement Date (defined below), Landlord shall have obtained from the Authority: (a) an assignment to Landlord: all of the Declarant's reserved rights under the Declaration pursuant to a form of assignment reasonably acceptable to Tenant and AspenFilm; and (b) an irrevocable proxy, coupled with the interest passed by the Authority Lease, of the right to vote all of the votes in the Association allocated to Commercial Unit A and the AH Units as set forth in the Declaration. Said assignments shall remain in effect throughout the term of this Lease (subject, however, to the expiration of Declarant Rights as provided in the Declaration). Landlord agrees that during the term of this Lease, Landlord shall exercise the Declarant Rights and voting rights as necessary and as reasonably requested by Tenant to fulfill the Landlord's obligations under this Lease and as reasonably requested by AspenFilm to fulfill Landlord's obligations under the AspenFilm Sublease (collectively, the "Subtenant Leases") to assist Tenant and AspenFilm in fulfilling the Tenant's and AspenFilm's obligations under the Subtenant Leases, to assist Tenant and AspenFilm in exercising Tenant's and AspenFilm's rights under the Subtenant Leases and, generally, as necessary to fulfill the intent of the Subtenant Leases. Landlord expressly agrees that it shall fully exercise all of said rights as necessary to facilitate the Recondominiumization, including the initiation and prosecution of litigation, if necessary, and any and all changes to common elements in the Building reasonably requested by Tenant and AspenFilm, including, without limitation, all changes to the exterior of the Building approved by the City and /or its boards and commissions. Except as otherwise expressly provided for above, in the event of a conflict between Tenant's direction to Landlord and AspenFilm's direction to Landlord, Landlord shall exercise its voting rights and Declarant Rights in a manner that it deems to be in the best interests of Tenant, the owner of Commercial Unit 2, and Landlord. At the time of the Recondominiumization, Landlord, acting through its assignment of Declarant Rights, shall allocate the votes in the Association attributable to Commercial Unit A, in accordance with Section 5.1 of the Declaration and subject to reallocation in the event that one or more mezzanines are built in Commercial Unit 1. With the exception of the expansion of Residential Unit B 7 III IIII'IIJI II'IIIIIIIIIJII 11 0 34584 of 45' LL PITKIN COUNTY CO R 2338.00 0 0.00 (the Free Market Unit) to add a bedroom of no more than 500 sq. ft. or the re- development of the Notch area as described in the MOU, City further agrees that it shall not exercise said rights to approve construction of new condominium units on the roof or the expansion of existing condominium units on the roof of the Building, without first obtaining Tenant's written consent. Tenant's written consent shall not be unreasonably - withheld. Section 2.03 COP Financing (a) The City has, or shall before the Commencement Date, cause there to be issued approximately e in Certificates of Participation ( "COP ") for the purchase of the Premises. The COP shall be 30 -year, self- amortizing obligations and shall bear a coupon rate of not more than 6 %, shall be callable in whole or in part, at par value, at the City's option at any time after one hundred twenty (120) months, and may contain such optional defeasance provisions as are customary for municipal finance obligations. (b) The City shall be responsible for coordinating any disclosures regarding the City, the Authority, the Property and these transactions as the City shall deem appropriate, and while Tenant shall have the right and opportunity to review and comment on such disclosures and the COP documents generally, Tenant shall not be liable or legally responsible in any way for such disclosures or any deficiencies therein_ (c) The. COP proceeds have, or shall be, utilized for the acquisition of the Commercial Unit A and the AN Units; for the costs of issuing, rating and insuring - the COP; for the costs of the Recondominiumization and the physical renovation of Commercial Unit 1 to enable it to be used for retail purposes; and, for reconfiguring the lobby area of Commercial Unit A, as defined in the MOU (any - and all conversion and construction costs shall include all "hard" and "soft" costs relating to architectural, engineering, planning, approvals, permitting, the Recondominiumization, and actual construction); for leasing commissions incurred by Tenant or Isis Property Group, LLC which are payable to third parties who are not affiliates of Isis Property Group, LLC; and for such miscellaneous costs as Tenant may incur in connection with these transactions. (d) It is understood that: 1 Tenant shall be responsible for the servicing and repayment of the Isis Group Base Rental Allocation as defined in the Authority Lease (the "Tenant's Base Rent Allocation "); 2 The tenant of the newly created Commercial Unit 2, AspenFilm shall be responsible for the servicing and repayment the AspenFilm Base Rental Allocation as defined in the Authority Lease (the "AspenFilm COP Allocation "); 8 • 111111111111110111111111131111111111111111 ° 9 01 :sai • JANICE K VOS CAUDILL PITKIN COUNTY CO R 2336.00 D 0.00 3 The City shall, subject to the limitations of the Authority Lease pay to the Authority under the terms of the Authority Lease all Base Rentals as defined therein. In no event shall City be responsible for the payment of any costs not identified herein or in the Authority Lease. 4 At the CCA Closing (as defined in the MOU), Landlord shall, out of the COP proceeds and cash invested by Tenant and AspenFilm, make the following payments and /or establish the following accounts for future expenditures, as more fully described and conditioned according to the terms of the MOU: Project Costs Amount • Wee SOURCES Section 2.04 Term The Lease Term shall be comprised of the Initial Term commencing on the date the 2007A Certificates are issued and ending on December 31, 2007) and thirty (30) successive one -year Renewal Terms, subject to subsection (a) of this Section. (a) This Lease Term shall expire upon the earliest of any of the following events: (i) August 31, 2037 (ii) December31 of any Fiscal Year during which an Event of Nonappropriation has occurred under the Authority Lease 9 534584 10111111111111111111111111 Page: 6/ 0007 01:54i J K VOS CAUDILL PITKIN TY CO R 2336.00 D 0.00 (iii) the purchase of all of the Leased Property by the Tenant pursuant to Section 2.05 hereof; or (iv) any termination of the Authority Lease following an Event of Default thereunder; or (v) termination of this Lease following an Event of Default in accordance with Section 17.01 hereof. Section 2.05 Rights to Purchase (a) Upon Notice of Default by City: Provided the Recondominiumization has been completed, in the event City is in default in its obligations under the Authority Lease or the Authority is in default under the Indenture, including, without limitation, a failure by the City to appropriate funds to pay the Base Rentals due or corning due in the fiscal year next occurring, City shall immediately provide notice to Tenant, along with a copy of any notice from the Authority or the COP indenture trustee stating that an event of default by the City (Landlord) or the Authority, as applicable has occurred. Upon the giving of such notice, Tenant shall have the right to purchase the Premises for an amount equal to the sum of the then - outstanding principal amount of the Tenant's Base Rent Allocation, all accrued and unpaid interest thereon and all costs of paying off the portion of the COP allocated to Tenant's Base Rent Allocation, and regardless of any preclusion against prepayment or redemption, provided Tenant gives notice of its intent to exercise this purchase right not later than sixty (60) days after the giving of said notice and close within ninety (90) days of the giving of said notice from the Authority or the COP indenture trustee, and further provided that AspenFilm exercises its right to purchase Commercial Unit 2 concurrently, provided, however, if AspenFilm does not exercise its right to purchase Commercial Unit 2 concurrently, then Tenant shall have only the right to purchase the Premises together with Commercial Unit 2 , for an amount equal to the sum of the then - outstanding principal amount of the entire COP, all accrued and unpaid interest on the COP and all costs of paying off the COP. The City agrees that in connection with the Authority Lease, a purchase option agreement will be executed between the Authority and Tenant ( "Purchase Option Agreement ") which implements the purchase option set forth herein and is recorded in as an encumbrance on the Building with a priority senior to any lien for the COP financing. AspenFilm's rights to purchase its premises and Tenant's Premises, if Tenant does not exercise its right to purchase the Premises upon a default by the City, shall also be included in the AspenFilm Lease and in a purchase option agreement between the Authority and AspenFilm The Purchase Option Agreement shall provide that the property being acquired thereby, shall be free and clear of this Lease and the AspenFilm Lease, but subject to Permitted Encumbrances permitted by the Authority Lease. 10 Ell Ell 11111 11111 ll 53458 �0l4sai JRNICE K VOS CAUOILL PITKIN COUNTY CO R 2336.00 0 0.00 (b) By Defeasance: Prior to March 1, 2017, Tenant shall have the right to purchase the Premises from Landlord by defeasing Tenant's Base Rent Allocation with United States Treasury securities in amounts and maturities sufficient to service the Tenant's Base Rent through March 1, 2017 and to retire the Tenant's Base Rent Allocation as of March 1, 2017, and further provided that AspenFilm exercises its right to purchase Commercial Unit 2 concurrently. The first party (the "Exercising Party ") ( "party" as used in this section shall mean either Tenant or AspenFilm) to exercise this right shall give the other party not less than 120 days notice and not less than 60 days notice to Landlord of its election to purchase its premises and the other party's premises if the other party does not exercise its right to purchase its premises. If the other party elects to purchase its premises concurrently with the Exercising Party, then the other party shall provide not less than ninety (90) days written notice to the Exercising Party and 60 days notice to Landlord of the intent of the other party to purchase its Premises. In the event that the COP is defeased by AspenFilm alone (that is, Tenant is the non - exercising party in such defeasance), then this Lease shall remain in full force and effect, and upon the expiration of the Term hereof on August 31, 2037, provided, Tenant is not in default of its obligations hereunder at such time, Tenant shall have the right to purchase Commercial Unit 1 for ten ($10.00) dollars. (c) After ten (10) years of the Term: At any time after March 1, 2017 issuance Tenant shall have the right (provided that Tenant is not in default, after notice and the expiration of any applicable cure period) to purchase the Premises from Landlord for an amount equal to the then - outstanding principal balance of the Tenant's Base Rent Allocation and any accrued but unpaid interest thereon upon no less than 60 days' notice to Landlord of Tenant's intent to purchase the Premises; and it is understood that Tenant's rights as to the retirement of the Tenant's Base Rent Allocation and as to obtaining title to the AH Units and Commercial Unit 1 shall be analogous to its rights under a "contract for deed" purchase of real estate. If the above rights are not exercised prior to the full payment of Tenant's Base Rent Allocation, upon such full payment, Tenant shall have the right to purchase Commercial Unit 1 and the AH Units for ten ($10.00) dollars. • (d) Cross Options: Any time after March 1, 2010, in the event Tenant or AspenFilm elect not to exercise their respective rights to purchase under the terms of Section 2.05 (b) (or the equivalent terms applicable to AspenFilm), the exercising party shall have the right to purchase the non - exercising party's premises by giving not less than 60 days' notice to Landlord that said exercising -party wishes to acquire the non - exercising party's premises at the same time that the exercising -party gives notice of its election to exercise its purchase rights. The exercising party shall take the non - exercising party's premises subject to the terms of the non - exercising party's lease, except that none of the purchase options contained in Sections 2.05 (a) and (c) of the non - exercising party's lease shall be given effect. 11 II III II III II III III I I I I II 02/16/2007 / 0 01 :541 JRNICE K VOS CAUDILL PITKIN COUNTY CO R 2336.00 D 0.00 (e) Identical Terms: Terms identical to those set forth in this Section 2.05, modified as appropriate for correct references to the parties and the premises involved, shall be included in the AspenFilm Lease. (f) Upon the transfer by the Authority or Landlord of fee simple title, to Tenant or its successor, to the AH Units, such transfer shall be subject to a conveyance by the City or the Authority to the Aspen /Pitkin County Housing Authority, of a '/z of 1% • undivided ownership interest in each of the AH Units, however, such ownership shall not include any right to rents or proceeds of sale, nor other economic interests, nor any obligation for the payment of any costs of ownership, nor any decision making authority with respect to the use, operation, control, etc, of the AH Units. After the date upon which title to the AH Units passes to Tenant, should Tenant wish to transfer title to the AH Units to a third party, Landlord agrees to execute such documents and take any actions as may be necessary to perfect the transfer of title desired by Tenant, without any further consideration owing to Landlord, City or Authority. Section 2.06 Isis Group Under - Subleases For the purpose of facilitating the decision making of AspenFilm with respect to the potential acquisitions or assignments in Section 2.05 and Section 13 hereof, Tenant shall provide AspenFilm with complete copies of any under - sublease or license entered into between Tenant (or any other fee simple owner or subleasehold owner of Commercial Unit 1) and an under - subtenant concerning all or part of Commercial Unit 1. Said instrument shall be provided within ten (10) days of its execution. Any amendment thereto shall also be provided within ten (10) days of its execution. The sublease between Landlord and AspenFilm shall contain a provision that Aspenfilm shall keep all such instruments strictly confidential and that they may be shown only to members of the Board of Directors of AspenFilm, AspenFilm's accountant, counsel and lenders in connection with the possible financing of AspenFilm's potential purchase of a fee simple or leasehold or subleasehold interest in Commercial Unit 1 or any interest in Tenant or its successor. ARTICLE III CONSTRUCTION Section 3.01 Landlord's Construction (a) Landlord is not obligated to perform any construction work within the premises. Tenant agrees to accept the Premises in "As -Is" condition and will perform all work required or necessary within the Premises. (b) City acknowledges that time is of the essence as to the Recondominiumization, the conversion of the Premises (the West Main Theater) to • retail space and the reconfiguration of the Lobby, all as referred to in the MOU. Accordingly, the City agrees that all plans and submissions of Tenant shall be given first 12 I 1IJ IIIIIII III (11 LQ N COUNTY ,0 2 0 116/ 6 " 0 " 00 °1 00 D 0 priority for consideration by the City's Community Development Office and for approvals and issuance of building permits, and that no such submissions shall be subject to the rocess customary rule of "first in time ". Should the land use or building permit approval from tss for the proposed improvements extend beyond one - hundred - twenty (120) y submission date of complete land use application for the conversion of the West Main Theater to retail use and a complete building permit application for the necessary physical changes for such conversion, all rents due under this Lease shall be abated until the required approvals and building permits are issued by the City. Tenant shall be reasonably responsive to City building permit plan review comments and shall submit requested corrections in a timely manner. During said period of abatement, Tenant shall be liable to pay to the City as rent only for those amounts collected from any sub - lessee in the Premises at that time, less a proportionate share of the common area maintenance, real estate taxes, and other operating expenses of the building and no more, but nothing contained herein shall relieve Tenant of its obligation to pay to AspenFilm any and all rents and other sums withheld or abated by the theater operator in Commercial Unit 2 as provided for in the Mou. 'Section 3.02 Tenant's Work Tenant accepts the Premises in its present "as is" condition without any warranty or any obligation of Landlord to make any improvements in or to the Building. The interior of the Premises shall be the responsibility of Tenant and under the complete control and supervision of Tenant ('Tenant Work "). Section 3.03 Remodel of Lobby Area for Retail Use Tenant shall, pursuant to the Renovation Agreement and assignment thereof, appended hereto as Exhibit B, shall cause the Improvements to be constructed, acquired and installed in and on the Premises and Commercial Unit 2 in accordance with the terms of the MOU, this Lease and according to the requirements of the Assignment of the Renovation Agreement. Landlord shall either provide the following notices to the tenant under the Theater Lease (defined in Section 16.01 below) or shall cause AspenFilm, as the assignee of the Theater Lease, to provide all notices required by paragraph 25 of the Theater Lease and as otherwise allowed by the Theater Lease, as and when requested by Tenant, in order to facilitate the termination of the Theater Lease as to the West Main Theater, the Recondominiumization and the conversion of the West Main Theater to retail uses, it being acknowledged and agreed that Isis Group shall only be obligated to undertake and pay for the landlord's construction activities as such are provided for in the Theatre Lease in the event of such conversion of the West Main Theatre to retail uses. 13 Page: 10111111111111111111311111111111111111 6 02 6 5 0 00 1: JANICE K ARTICLE IV RENT Section 4.01 Base Rent The monthly base rent ( "Monthly Base Rent ") payable by Tenant shall be equal to one -sixth of the semi - annual debt service (principal and interest) due on the Tenant's Base Rent Allocation of the COP, as may be adjusted for various credits under the Authority Lease, which is 68.6% of the monthly base rent payable by the City under the Authority Lease. Tenant's annual base rent shall be as set forth in Exhibit C appended hereto ( "Annual Base Rent"), payable in monthly installments on the 15"' day of each month, with the first payment due and payable at the CCA closing and on the 15 day of the month thereafter . Section 4.02 Reserve Account (a) In addition to the Base Rent re uired to be paid as set forth at Section 4.01, Tenant shall pay to Landlord the sum o' per month as and for a capital reserve fund as described below. The AspenFilm Sublease Agreement shall contain a similar requirement in the amount of Caper month. (b) Landlord shall establish a Capital Reserve Fund and shall be maintained by the Trustee as a separate and distinct fund from any COP repayment accounts. Said Capital Reserve Fund shall be maintained until such time as the Premises and Commercial Unit 2 are conveyed to both Tenant and AspenFilm whereupon the balance • of the fund shall be transferred back to Tenant and AspenFilm in the same proportion that it was funded. If either AspenFilm or Tenant acquires its respective premises and the other party does not acquire its respective premises, then the proportionate share of • the balance of the Capital Reserve Fund shall be transferred back to the party who acquires its respective premises. The fund shall be applied as necessary to pay the costs of capital repairs or improvements over the life of the building. The funds may be used as required and as determined by Landlord upon the request and /or advice of AspenFilm and Tenant for such purposes as roof, exterior walls, interior bearing walls, the building foundation, the plumbing, water sewer, electrical, heating or ventilation systems, including replacement of fixtures and equipment. Landlord shall have no responsibility for any capital repairs and improvements notwithstanding the fact that the Trustee shall maintain this Capital Reserve Fund. In the event of insufficient capital reserves, Landlord may, in its sole and exclusive discretion, use other funds within its control to undertake such necessary repairs or improvements. Landlord may require reimbursement from Tenant in amounts that Landlord, in its sole discretion, deems fair under the circumstances. Should a disagreement arise between the parties concerning the necessity for any repair or capital improvement, or the allocation of the cost of such repair or improvement, Landlord shall have ultimate decision- making authority with regard to the same. 14 1111111111 lilllllll lII a0 4D$ 0 001:54 JANICE K VOS GRUDILL PI ARTICLE V USE AND OPERATION Section 5.01 Use of Premises (a) Subject to the provisions of Section 5.02, Tenant shall, during the entire Term, use the Premises, if at all, for retail purposes, or shall sublease the Premises to a subtenant that shall use the Premises for retail purposes in accordance with this Lease and any requirements of applicable law, including, without limitation, any requirements .of Section 10.02 of the Authority Lease. Tenant shall not be required to operate the Premises for any purpose whatsoever. • (b) The Premises shall not be used for restaurant uses unless the appropriate mitigation costs are paid to the City pursuant to the City Land Use Code in effect at the time of conversion to such use, and provided that the City Council, in its sole discretion ' approves such a change in use. (c) Tenant shall use commercially reasonable efforts to sublease the Premises to one or more tenants that are to deemed "mid-leoel" retail type stores). re a l uses which are local businesses (as opposed Level retailers shall dle three classifications fications of merchandise categories that as described retail industry's described below f Moderate, ple, but not limitation, and r are h not intended to bete only ones way example, permitted in way p each category but are listed as examples of the type of businesses that are representative of each category. Moderate is defined as tenants such as Gap, Hollister, Banana Republic, Victoria's Secret, Replay, Ron Herman, Fred Seigel, Club Monaco, American Eagle, J. Crew, bebe Sport, Lucky Brand Jeans, Abercrombie & Fitch, Levi's, Ann Taylor Loft. Bridge is defined as tenants such as Ann Taylor, lor, A nt e Kl Sigrid Olsen, Puma, Juicy Couture, Guess, Arani AX, Creek, Urban Outfitters, Anthropologie, and J. Jill. Better is defined as tenants such as Brooks Brothers, Lisa Klein, Stuart Weitzman, David Yura, RL RL Ralph Lauren Rugby, Lacoste, Apple Computer, Sony Style, Scoop, C no Armani Talbot's, Ted Baker, Diesel, Williams Sonoma, Pottery Tourneau, Cole Hahn, G o Boss John Varva rmani Bosse tos, Eileen en Fisher, Calvin Klein, Intermix. b Section 5.02 Signs Tenant and its sub - tenants will have the right to construct and attach signs to the Building, Ten and its sub-tenants s shall determine. thereafter shall of te comply with appropriate municipal requirements. II II III III( III III III I III II II 029 JPNICE K VOS CAUDILL PITKIN COUNTY CO R 2336.00 D 0.00 ARTICLE VI COMMON AREAS Section 6.01 Use of Common Areas Landlord hereby grants to Tenant and its subtenants, agents, employees, customers, licensees and other invitees the nonexclusive easement, in common with Landlord and all other tenants and owners of the Building and their agents, employees, customers and licensees to use all the Common Areas of the Building as provided in the Declaration of Condominium during the term thereof and thereafter in the same manner as provided in the Declaration. "Common Areas" are more fully described in the Declaration and shall be the goveming language and definition. Landlord shall not grant any other person other than owners or other tenants in the Building the right to utilize the Common Areas and shall use reasonable efforts to prevent such other persons from utilizing the Common Areas, Section 6.02 Operation of Common Areas (a) Landlord shall or shall cause the Isis Theater Condominium Association (the "Association ") to engage Tenant, Isis Property Group, LLC, or any entity controlled by the members of Isis Property Group, LLC (at Isis Property Group, LLC's discretion), to act as property manager for the Building under a separate management agreement for an initial period of one year and at a market rate management fee. Said management fee shall be payable by Tenant's retail subtenant and by a pass- through payment payable by AspenFilm's commercial theater operator subtenant. The management agreement shall be automatically extended for successive one year terms for so long as (x) Courtney Lord shall be a member of a constituent member of Tenant and Tenant shall own Commercial Unit 1 and (y) the COP financing shall be outstanding on Commercial Unit 2, unless said management agreement is terminated for cause. For purposes on this section, "cause" shall be defined as (i) charging more than "market rate" for goods and services; (ii) failure to manage the Property in according to customary business practices with respect to the management of similar properties; or (iii) fraud in accounting for fees and costs. (b) In the event there is a disagreement between Tenant and AspenFilm concerning whether or not cause, as defined herein, sufficient for termination exists, upon the request of either Tenant or AspenFilm, the City shall make said determination; provided, however, before such termination may occur, written notice shall be given to Tenant setting forth the reasons for said claim and Tenant shall have a period of thirty (30) days from receipt of said notice ( "Cure Period ") to undertake efforts to cure the alleged default. Not later than the expiration of the Cure Period, Tenant shall submit such information or documents to City and AspenFilm as are reasonably necessary to demonstrate that the alleged default has been cured. Upon expiration of the Cure Period, City shall make a determination as to whether or not the cure of the alleged default has been made. If the cure has not been made to City's reasonable satisfaction, City may terminate the management agreement on the 16 • • II III II 1111 11111111 III I III 534584 9 9 001:54] JANICE K VOS CAUDILL PITKIN COUNTY CO R 2336.00 D 0.00 last day of the month in which the City's determination was made, by notice given to said manager, not later than ten (10) days prior to the termination date. Section 6.03 Common Area Expenses and Tenant's Pro - Rata Share (a) Tenant shall contribute to the cost of operating the Common Areas ( "Common Area Expenses ") pursuant to the provisions regarding same contained in the Declaration and all operating costs, assessments for maintenance costs for the Building, real estate taxes and casualty and liability insurance premiums for the AH • Units and Commercial Unit 1. Tenant's obligation for said costs shall be in the amount • of the assessments levied against Commercial Unit A multiplied by Tenant's Commercial Unit Pro -Rata Share and the full amount assessed or incurred by the AH Units. After the Recondominiumization has been completed, Tenant's obligation for said costs with respect to Commercial Unit A, shall be the full amount of the assessments levied against Commercial Unit 1. (b) Under no circumstance shall the Landlord be responsible for any such operating costs, real estate taxes or casualty or liability insurance premiums or for any other costs of owning or operating the AH Units or Commercial Unit 1 while this Lease is in force. It is agreed that the Lease is a triple net lease and Landlord is not liable for any expenses for operating the Building or Premises. To the extent Landlord is required to pay any amounts as Additional Rentals under the Authority Lease with respect to the Premises, Tenant shall reimburse such amounts within 30 days, subject to the provisions for contesting any such amounts in the Authority Lease. Section 6.04 Tenant's Obligation for COP Administrative Costs Tenant shall pay to Landlord all COP administrative costs incurred with respect to the Premises. If such costs are not separately assessed to the Premises, then the administrative costs shall be equitably apportioned among Commercial Units 1 & 2 and the AH Units. Such payment shall be made within thirty (30) days of Tenant's receipt of an invoice therefore from Landlord, together with a detailed statement of the charges • and any allocation formula. Section 6.05 Changes to the Building or Premises No alterations or changes shall be made to the Building or Premises by or with the consent of Landlord, without Tenant's approval and shall only be made in accordance with the procedures contained in the Declaration. Any construction of the proposed Notch as described in the MOU is exempt from this provision. 17 I • IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII IIIIIIIIIIIlIIi 534584 02/16/200 0 01541 JP 6 ARTICLE VII REAL ESTATE TAXES Section 7.01 Tenant's Tax Obligation (a) Without limiting Tenant's obligations under Section 6.03 hereof, Tenant covenants and agrees to pay prior to delinquency an amount equal to all real estate taxes and assessments ( "Impositions ") which may be levied or assessed by any lawful authority against the Premises, for each calendar year or part thereof of the Term from and after the Commencement Date. After the Recondominiumization is completed, Landlord shall arrange for all tax bills and assessment notices to be provided to Tenant directly by the taxing authorities and thereafter, Tenant shall pay all Impositions directly to the appropriate taxing authorities. Provided that Landlord has given Tenant not less than sixty (60) days notice in advance of the due date of any Impositions, Tenant shall be responsible for any late payment charges or interest relating to its failure to pay any Impositions when due. Tenant's obligation for said Impositions shall be in the amount of the Impositions levied against Commercial Unit A multiplied by Tenant's Commercial Unit Pro -Rata Share and the full amount levied against the AH Units. After the Recondominiumization has been completed, Tenant's obligation for said Impositions with respect to Commercial Unit A, shall be the full amount of the assessments levied against Commercial Unit 1. (b) City agrees that any fee simple transfer of Commercial Unit 1 or either of the AH Units by the City or the Authority to Tenant or its successor shall be exempt from RETT, WHRETT and any other City- imposed real estate transfer tax in effect at the time • of such transfer ARTICLE Vill UTILITIES Section 8.01 Utilities Without limiting Tenants obligations under Section 6.03 hereof, Tenant shall pay when due, all utility charges separately metered or separately billed to the Premises. Utilities that are not separately metered or charged, will be paid through Common Area Expenses. Landlord hereby grants Tenant, its agents and invitees, a nonexclusive easement, in common with Landlord and all other occupants of the Building to whom Landlord has granted or may hereafter grant similar rights, to install, use and maintain all utility systems and facilities serving the Premises, including without limitation all utility conduits, piping, conductors and the like, on, over, across and under the Building, along routes designated by Landlord for the benefit of all tenants and owners in the Building, subject to the terms of the Declaration. 18 II II 01111111 1111 11111111 Page: 534584 0 01 454 1 JANICE K VOS CPUOILL PITKIN COUNTY CO R 2336.00 ARTICLE IX MAINTENANCE AND ALTERATIONS Section 9.01 Maintenance and Alterations (a) Those portions of the Building and Premises which are general common elements as defined in the Declaration shall be maintained and repaired by the Association and Landlord shall exercise all its powers as an owner of the Premises, to cause the Association undertake maintenance and repairs of the general common elements as necessary to maintain the Building as a first class residential and commercial property, except that if any such repair is required by reason of the Tenant's negligence or the negligence of any of its agents or employees, the Landlord or the Association may make such repair and add the cost thereof to the first installment of rent which shall thereafter become due. Except as provided in Articles XI and XII, Tenant shall at all times throughout the Term keep the Premises and any portion thereof which is not a common element, and all partitions, door surfaces, fixtures, equipment and appurtenances thereof (including lighting, heating and plumbing fixtures and air conditioning systems) in good order, repair and condition.. Without limiting the generality thereof, Tenant shall keep the glass of all windows and doors clean and presentable; promptly replace all broken glass in the Premises; keep the heating system, air conditioning system, lighting system and all plumbing systems in the Premises clean and in a good state of repair, including pipes, drains, toilets, fixtures and basins; and keep all utilities within the Premises in a good state of repair. Tenant acknowledges and agrees that other than the obligation to exercise its powers as an owner to cause the Association to maintain and repair the general common elements of the Building, Landlord has no maintenance, repair, replacement or other duty of any kind or nature with respect to the Building. (b) Tenant shall maintain the Premises in a clean, sanitary and safe condition in accordance with all directions, rules and regulations of health officers, fire marshals, building inspectors, and other governmental officials, and comply with all requirements of law affecting the Premises. Section 9.02 Nuisance and Cleanliness Tenant covenants that it will exercise the highest duty of care to maintain the Premises in a clean condition and to provide sufficient trash and garbage service. Tenant shall not permit any noxious or offensive odors to exist in or around the Premises. Tenant shall not perform any act or carry on any practices that may injure the Building, of which the Premises form a part, or be nuisance or menace to other tenants or unit owners in said Building. A breach of the obligations set forth in this section by Tenant shall constitute a material breach of this Lease. 19 II II II III II III III I II 1I1 II Page: 120 467 JANICE K VOS CAUDILL PITKIN COUNTY CO R 2336.00 0 0.00 Section 9.03 Alteration of Premises Tenant shall have the right to undertake construction within the Premises and upon the exterior walls of the Premises, as necessary to accommodate commercial and retail uses, without first obtaining Landlord's consent, but such work shall be subject to compliance with all applicable building codes; obtaining requisite approvals from applicable City boards and commissions and the Association to the extent required by the Declarations; and, the Renovation Agreement. Tenant shall have use of funds allocated to the retail construction as provided by the COP financing for such work and shall, at its sole cost and expense, pay for any costs in excess thereof. Tenant shall perform any such alterations in a manner which minimizes, to the extent reasonable, the disruption to the operations of the Building and its tenants and owners. All alterations shall be made in accordance with all applicable laws, ordinances and regulations, and Tenant shall obtain all governmental permits and consents prior to undertaking any such alterations, and perform such alterations and/or improvements in accordance with the terms of the Declaration. ARTICLE X INSURANCE Section 10.01 Insurance During Term (a) During the Term, Tenant or its sub - tenant(s) shall insure the Premises against all risks normally insured against on an "all risk" form of policy for its full replacement cost; shall maintain commercial general liability insurance with respect to the Building and the business operated by Tenant or its sub - tenant(s) therein, including contractual liability coverage, with combined limits of not less than Two Million Dollars ($2,000,000) for personal injury or death and property damage. In addition, Tenant or its sub - tenant(s) shall either maintain fire and extended coverage, vandalism, malicious mischief and special extended coverage insurance in an amount sufficient to cover the cost of replacement of all furnishings, fixtures and equipment in the Premises, or self - insure against such risks. Landlord shall exercise its powers as an owner to cause the Association to carry and maintain during the Term, the insurance required by the Declaration. (b) The insurance policies provided pursuant to subsection (a) of this Section shall meet the following conditions: (1) any insurance policy may have a deductible clause in an amount deemed reasonable by the City; (H) each insurance policy shall be provided by an insurer rated "A" by Best or in the two highest rating categories of S &P and Moody's, unless waived by the Certificate Insurer; (iii) each insurance policy shall be so written or endorsed as to make losses, if any, payable to the City, the Authority, the Trustee American national Bank, Denver, Colorado, or any successor thereto), and the Tenant, as their respective interests may appear; (iv) each insurance policy shall contain a provision to the effect that the insurance company shall not cancel the policy 20 I 100#1111111111111 534584 02/16/2007 00:541 • Page: JANICE K VOS CRUDILL PITKIN COUNTY CO R 2336.00 or modify it materially and adversely to the interest of the Landlord, the Authority, the Trustee or the Tenant, if applicable, without first giving written notice thereof to the such parties at least 10 days in advance of such cancellation or modification; (v) each insurance policy, or each certificate evidencing such policy, shall be deposited with the Landlord and Trustee; (vi) full payment of insurance proceeds under any insurance policy up to the dollar limit required by this Section in connection with damage to the Leased Premises shall not, under any circumstance, be contingent on the degree of damage sustained at other property owned or leased by the Landlord or the Tenant; (vii) each insurance policy shall explicitly waive any co- insurance penalty; and (viii) coverage under each insurance policy shall apply exclusively to the Leased Premises (except as provided in subsection (d) of this Section) and must be available to repair or rebuild the Leased Property under all circumstances after the occurrence of an insured peril. (c) Landlord may provide any of the insurance required by subsection (a) of this Section under blanket insurance policies which insure not only the risks required to be insured hereunder but also other similar risks. (d) Landlord shall cause an insurance consultant, which may be the person providing the insurance, to annually review the coverage of the policies of insurance maintained pursuant to this Section and to make recommendations thereon, and Tenant shall comply with such recommendations. Section 10.02 Landlord not Liable for Damages - Covenant to Hold Harmless (a) Landlord shall not be liable to tenant or to any other person whatsoever for any damage occasioned by falling plaster, electricity, gas, water, steam, sprinkler or other pipe and sewage system or bursting, running or leaking of any tank, washstand, closet or waste to other pipes in or about the Premises, or the Building or which they are a part, nor for any damage occasioned by water being upon or corning from the roof, or vent, or otherwise for any damage arising from any acts or neglect of co- tenants or other occupants or unit owners of the Building or of adjacent property, or the public, nor shall Landlord be liable in damages or otherwise for any failure to furnish, or interruption of service of any water, gas, electricity, heated water, steam and /or chilled water, cause by fire, accident, riot, strike, labor disputes, acts of God, or the making of any repairs or improvements or other causes beyond the control of Landlord. (b) From and after the Commencement Date, Tenant shall indemnify Landlord and hold Landlord harmless from and against any and all claims, actions, damages, liability, cost and expense, including reasonable attorney's fees, in connection with all losses, including personal injury and /or damage to property, arising from or out of any act or omission of Tenant or any licensee, sub - tenant, assignee or concessionaire of Tenant or any officer, agent or employee of Tenant or any such person in, on or about the Premises. 21 Page: 279 of 67 MIN111111 intinll 6 00 6 .5 0 78 00 014541 JANICE K VOS CAUDILL PITKIN COUN Y CO R (c) From and after the date of this Lease, to the extent allowed by law, Landlord shall indemnify Tenant, its officers, directors, stockholders, beneficiaries, partners, representatives, agents and employees and hold them harmless from and against any and all claims, actions, damages, liability, cost and expense, including reasonable attorney's fees, in connection with all losses, including personal injury and /or damage to property arising from or out of any negligent act or omission of Landlord or any licensee or assignee of Landlord or any officer, agent or employee of Landlord or any such person in on or about the Building in which the Premises are located and the Premises. For purposes of this section, litigation initiated by third parties contesting recondominiumization, the approval of any land use development applications, or other actions of the City Council shall not be deemed to constitute a negligent act or omission by Landlord. ARTICLE XI FIRE AND OTHER CASUALTY Section 11.01 Repair of Premises and Building (a) If the general common elements portion of the Premises shall be damaged by fire or other casualty of the kind insured against in standard policies of fire insurance with extended coverage which coverage is maintained by the Association, the Association shall cause such damage to be repaired, and the rent shall not be abated. If the Premises shall be rendered wholly untenantable, and if the damage shall be so great that it cannot be fit for occupancy, then Tenant shall have the option to terminate this Lease from the date of occurrence of such damage, and the Tenant shall thereupon surrender to the Landlord the Premises and all interest hereunder; provided that, as a condition of such termination, any insurance proceeds paid to Tenant as a result of such damage shall be delivered by Tenant to Landlord, who shall apply such proceeds in accordance with the Authority Lease. In case of fire or other casualty caused by the fault, neglect or willful act of Tenant, its guests, invitees or employees, Tenant shall promptly make all necessary repairs to restore the premises to their condition prior to such occurrence at Tenant's sole cost and expense and the rental provided for in this Lease shall not abate. (b) Subject to the provisions of Section 11.01(c), in the event of damage or destruction of all or any part of the Premises other than its general common elements, by fire or other casualty Tenant shall repair and /or rebuild the same with reasonable diligence. If insurance proceeds are payable to Landlord or Landlord's mortgagee or first lien holder, Landlord or its mortgagee shall promptly make the proceeds available to Tenant for such repair and restoration. In the event the insurance proceeds exceed the cost of repair and rebuilding, such excess shall be retained by (or paid to) Tenant and in the event the insurance proceeds are less than the cost of repair and rebuilding, such short -fall shall be paid by Tenant. 22 534584 111111111111 111 111I�IIII MEM 6 00 180 0000 01:541 Page: 280 of (c) In the event of any damage or destruction by fire or other casualty of any other part of the Building (other than the Premises), Landlord, shall with reasonable diligence exercise all its powers as an owner to cause the Association to undertake the repair and /or rebuilding and restoration of same in a manner and to at least a condition equal to that existing before the damage or destruction. (d) Each party agrees to commence any required restoration within ninety (90) days after the date of the damage or destruction (subject to settlement with its insurance carrier, which it shall diligently pursue), and diligently pursue the work to completion. ARTICLE XII EMINENT DOMAIN Section 12.01 Condemnation In the event that the Premises or any part thereof sufficient to render it unsuitable for Tenant's use and occupancy, as determined by Tenant in its reasonable discretion, shall be taken or damaged by reason of any exercise of the power of eminent domain, whether by a condemnation proceeding or otherwise, or in the event the Premises or part thereof sufficient to render it unsuitable for Tenant's use and occupancy, as determined by Tenant in its reasonable discretion, shall be transferred in avoidance of an exercise of the power of eminent domain, this Lease shall terminate as of the date title is vested in the condemning authority or the date of physical occupancy by the condemning authority or its agents, whichever first occurs, and both parties shall thereupon be released from any liability thereafter accruing hereunder except as provided herein; but all rentals and other charges then accrued shall immediately be due and payable by Tenant. Landlord agrees immediately after receiving notice of any proposed taking to give to Tenant notice in writing thereof. If the taking is of a part of the Premises which does not render the remainder unsuitable, as determined by Tenant in its reasonable discretion, then from the time of taking of "physical possession by the condemnor or proposed condemnor, the then rent payable hereunder shall abate in the ratio that the area of the Premises taken bears to the area of the Premises before such taking. Section 12.02 Damages If the Premises or Building are so taken, the award made as compensation for such taking shall first be used to pay Landlord's Leased Property Purchase Option Price under the Authority Lease. If any of the award made as compensation r ema i amount over amount shall be awarded to Tenant, and Landlord shall promptly pay that to Tenant. 23 53 4584 SitE111 CO R 2338 000 4 84 541 of 14 . . D 0.00 JANICE K VOS CAUDILL PITON COUNTY • Section 12.03 Temporary Taking In the event of a temporary taking of the Premises, the entire award made as compensation for said temporary taking shall be paid over to Tenant. ARTICLE XIII ASSIGNMENT, SUBLETTING AND RIGHTS TO LEASE OR ACQUIRE ASPENFILM ACQUIRE PREMISES OR MEMBERSHIP INTERESTS IN TENANT Section 13.01 Assignment and Subletting by Tenant (a) Tenant will at all times have the right to sublet space within the Premises with Landlord's consent, which shall not be unreasonably withheld or delayed, and with the consent of Financial Security Assurance Inc., in its capacity as COP insurer (the "COP Insurer ") which shall not be unreasonably withheld or delayed. Tenant shall provide to Landlord a copy of all subleases and amendments thereto. if Landlord or the COP Insurer does not approve or deny, in writing, Tenant's request for approval of a sublease within ten (10) days of Tenant's request therefore, said approval shall be deemed to have been given. (b) Tenant will at all times have the right to assign this Lease to another parry with Landlord's consent which shall not be unreasonably withheld or denied, and with the consent of the COP Insurer which shall not be unreasonably withheld or delayed. Tenant shall provide to Landlord a copy of all assignment agreements and amendments thereto. If Landlord or the COP Insurer does not approve or deny, in writing, Tenant's request for approval of an assignment within ten (10) days of Tenant's request therefore, said approval shall be deemed to have been given. (i) For the purpose of this provision, any transfer of a majority or controlling interest in Tenant (whether in one or more related or unrelated transactions), whether by transfer of stock, consolidation, merger, transfer of a partnership interest or transfer of any or all of Tenant's assets or otherwise, or by operation of law, shall be deemed an assignment of this lease. Any assignment or sublet in contravention of this provision shall be void and shall be a default hereunder. Notwithstanding any permitted assignment, Tenant shall at ail times remain directly, primarily and fully responsible and liable for the payment of the rent herein specified and for compliance with all of its other obligations under the terms, provisions and covenants of this lease. (c) The following transfers are exempt from this provision: (a) by devise or descent; (b) by order of a bankruptcy court in connection with the adjudication of bankruptcy of a Selling Member; (c) a transfer in violation of the operating agreement of Tenant which or results in the transferee having no voting interest in the Tenant; (d) transfers by g without consideration; (e) transfers to family trusts or family limited liability companies 24 III IIIII IIIIIIIIIII IIII IIIIIIII11 ll1111 / 4 584° 0 1: 54 , J{NIICE K VOS CAUDILL PITKIN COUNTY CD R 2336.00 0 0.00 where all of the members in the transferee are family members of the members in the transferor; (e) transfers to entities in which the members of the transferor have the same ratio of ownership interest in the transferee as they had in the transferor; and (f) transfers as a result of dilution of the interest of a Member as provided for in the Operating Agreement or relevant shareholder or other agreement among the Members of the relevant entity. Section 13.02 Right to Acquire AspenFilm Lease (a) First Right to Negotiate Assignment of AspenFilm Lease. Landlord agrees to include the following provisions in its lease with AspenFilm for Commercial Unit 2 (the AspenFilm Premises "): "If at any time during the Term of this lease, AspenFilm determines that it wishes to assign its interest in this lease for Commercial Unit 2 to an entity which is not a non - profit entity, then AspenFilm shall, before listing the lease for such assignment or offering it for assignment or accepting an offer from a third party for such assignment, first offer to the tenant under the lease with the City for Commercial Unit 1 or if Commercial Unit 1 has been condominiumized and sold, then said offer shall be made to the owner of. Commercial Unit 1 (collectively, the "Commercial Unit 1 Tenant or Owner"), the opportunity to negotiate the terms for and obtain an assignment thereof. AspenFilm shall provide written notice to the Commercial Unit 1 Tenant or Owner of its intent to assign this lease and shall propose a price and the terms for such an assignment (the "Initial Offer "). The parties shall have a period of Thirty (30) days to negotiate the terms of the assignment and in the event they are unable to agree upon said terms, then AspenFilm shall be free to assign it to a third party, provided that the price for said assignment shall be not less than ninety (90) percent of the price offered in the Initial Offer and the material terms of said assignment shall be no less favorable to AspenFilm than those which were contained in the Initial Offer. The City shall have the right to acquire an assignment of this lease if the Commercial Unit 1 Tenant or Owner does not exercise its rights hereunder to acquire this lease. All notices required hereby to be given to the Commercial Unit 1 Tenant or Owner shall be given to the City at the same time as they are given to the Commercial Unit 1 Tenant or Owner. If City desires to negotiate for the assignment of this lease, City shall engage in the negotiations with AspenFilm during the same thirty day period as is provided to the Commercial Unit 1 Tenant or Owner and all provisions hereof shall apply equally to the Commercial Unit 1 Tenant or Owner and the City, except that the Commercial Unit 1 Tenant or Owner shall have the first right to acquire this lease and the City shall have the right to acquire this lease only if AspenFilm and Commercial Unit 1 Tenant or Owner are unable to successfully negotiate the terms of an assignment of this lease. Any assignment which is in violation of these provisions shall be voidable in an action brought by the Commercial Unit 1 Tenant or Owner or by the City to enforce the terms of this provision. 25 8 53454 11111111111111111111111 QTY Co R 2336.00 345 04 1541 JANICE K (i) If, at any time subsequent to an Initial Offer and the failure of AspenFilm and the Commercial Unit 1 Tenant or Owner and the failure of the City and AspenFilm to agree upon the terms of an assignment, AspenFilm desires to assign this lease for a price which is less than ninety (90) percent of the price contained in the Initial Offer and /or which contains material terms less favorable l Unit to AspenFilm, then AspenFilm shall provide " her offer to the ) Commerc a same 1 Tenant or Owner and the City (the provisions hereof which pertain to an Initial Offer shall apply to all Subsequent Offers. This sequence of offers and negotiations shall continue for as many times as necessary to afford the Commercial Unit 1 Tenant or Owner and the City the rights to negotiate for and obtain an assignment of this lease as are provided for herein. " (b) First Right to Negotiate Acquisition of AspenFilm Premises. Landlord agrees to include the following provisions in its lease with AspenFilm and in any deed conveying any for-profit the entity, and any I sale of the Aspen Film �Premises by Aspen Film shall be subject to the following provisions: "No sale of the fee simple interest in the Property (the AspenFilm Premises) to any for - profit entity shall occur in violation of the following provisions and any sale of the Property shall be subject to the following provisions: If at any time, the owner of the Property (the "AspenFilm Premises Owner') determines that it wishes to sell its interest in all or a portion of the Property to a for - profit entity, the AspenFilm Premises Owner shall, before listing the Property for sale or offering it for sale or accepting an offer for its sale from a third party, whether or not said offer is solicited by the AspenFilm Premises Owner, first offer to the tenant under the lease with the City for Commercial Unit 1 or if Commercial Unit 1 has been condominiumized and sold, then said offer shall be made to the owner of Commercial Unit 1 (collectively, the "Commercial Unit 1 Tenant or Owner "), the opportunity to negotiate the terms for and acquire the Property. The AspenFilm Premises Owner shall provide written notice to the Commercial Unit 1 Tenant or Owner of its intent to sell the Property and shall propose a price and the terms for such sale (the "Initial Offer'). The parties shall have a period of Thirty (30) days from the receipt of said notice by the Commercial Unit 1 Tenant or Owner to negotiate the terms of the sale and in the event they are unable to agree upon said terms, then the AspenFilm Premises Owner shall be free to sell the Property to a third party, provided that the price for said sale shall be for a price which is no less than ninety (90) percent of the price offered in the Initial Offer and the material terms of said sale shall be no less favorable to the AspenFilm Premises Owner than those which were contained in the Initial Offer. Any sale which is in violation of these provisions shall be voidable in an action brought by the Commercial Unit 1 Tenant or Owner to enforce the terms of this provision. The City shall have the right to acquire the AspenFilm premises if the Commercial Unit 1 Tenant or Owner does not exercise its gg en hereunder acquire he Commerc al Unit h 1 Tenant Premises. All notices required it shall given to the City at hereby he same g 26 111111 II I III III 11111 11111 III ®/ ¢58 0 a01 :sal JANICE K VOS CPUDILL PITKIN COUNTY CO R 2336.00 D time as they are given to the Commercial Unit 1 Tenant or Owner. If City desires to negotiate for the purchase of the AspenFilm Premises, City shall engage in the negotiations with AspenFilm during the same thirty day period as is provided to the Commercial Unit 1 Tenant or Owner and all provisions hereof shall apply equally to the Commercial Unit 1 Tenant or Owner and the City, except that the Commercial Unit 1 Tenant or Owner shall have the first right to acquire the AspenFilm Premises and the City shall have the right to acquire the AspenFilm Premises only if AspenFilm and Commercial Unit 1 Tenant or Owner are unable to successfully negotiate the terms of an acquisition of the AspenFilm Premises. (i) If, at any time subsequent to an Initial Offer and the failure of the AspenFilm Premises Owner and the Commercial Unit 1 Tenant or Owner to agree upon the terms of said sale, the AspenFilm Premises Owner desires to sell the Property for a price which is Tess than ninety (90) percent of the price contained in the Initial Offer and/or which contains material terms less favorable to the AspenFilm Premises Owner, then the AspenFilm Premises Owner shall provide another offer to the Commercial Unit 1 Tenant or Owner (the "Subsequent Offer ") and the same provisions hereof which pertain to an Initial Offer shall apply to all Subsequent Offers. This sequence of offers and negotiations shall continue for as many times as necessary to afford the Commercial Unit 1 Tenant or Owner the rights to negotiate the terms for and acquire the Property as are provided for herein. " (c) In any Lease between Landlord and AspenFilm, AspenFilm shall be granted the same rights as are set forth in subsections 13.02(a) and (b) above with respect to any assignment or sale of the Premises. Section 13.03 AspenFilm's Right to Acquire Tenant's Lease 13.03.1 If at any time during the Term of this lease, Tenant determines that it wishes to assign its interest in this lease for Commercial Unit 1 , then Tenant shall, before listing this Lease for such assignment or offering it for assignment or accepting an offer from a third party for such assignment, first offer to AspenFilm or its successor (collectively, "Commercial Unit 2 Owner ") the opportunity to negotiate the terms for and obtain an assignment thereof. Tenant shall provide written notice to Commercial Unit 2 Owner of its intent to assign this Lease and shall propose a price and the terms for such an assignment (the "Initial Offer "). The parties shall have a period of Thirty (30) days to negotiate the terms of the assignment and in the event they are unable to agree upon said terms, then Tenant shall be free to assign it to a third party, provided that the price for said assignment shall be not less than ninety (90 %) percent of the price offered in the Initial Offer and the material terms of said assignment shall be no less favorable to Tenant than those which were contained in the Initial Offer. The City shall have the right to acquire an assignment of this lease if the Commercial Unit 2 Owner does not exercise its rights hereunder to acquire this lease. All notices required hereby to be given to the Commercial Unit 2 Owner shall be given to the City at the same time as 27 1 # 111100 if Page: 4584 001:541 JANICE K VOS CRUDILL PITKIN COUNTY CO R 2336.00 D 0.00 they are given to the Commercial Unit 2 Owner. If City desires to negotiate for the assignment of this lease, City shall engage in the negotiations with Tenant during the same thirty day period as is provided to the Commercial Unit 2 Owner and all provisions hereof shall apply equally to the Commercial Unit 2 Owner and the City, except that the Commercial Unit 2 Owner shall have the first right to acquire this Lease and the City shall have the right to acquire this lease only if Tenant and Commercial Unit 2 Owner are unable to successfully negotiate the terms of an assignment of this Lease. 13.03.2 Any assignment which is in violation of these provisions shall be voidable in an action brought by the Commercial Unit 2 Owner or by the City to enforce the terms of this provision. • 13.03.3 If, at any time subsequent to an Initial Offer and the failure of Tenant and the Commercial Unit 2 Owner and the failure of the City and Tenant to agree upon the terms of an assignment, Tenant desires to assign this Lease for a price which is less than ninety (90 %) percent of the price contained in the Initial Offer and/or which contains material terms less favorable to Tenant, then Tenant shall provide another offer to the Commercial Unit 2 Owner and the City (the "Subsequent Offer ") and the same provisions hereof which pertain to an Initial Offer shall apply to all Subsequent Offers. This sequence of offers and negotiations shall continue for as many times as necessary to afford the Commercial Unit 2 Owner and the City the rights to negotiate for and obtain an assignment of this lease as are provided for herein. 13.04 AspenFilm's Right to Negotiate Acquisition of the Property. No sale of the fee simple interest in the Property (Commercial Unit 1) shall occur in violation of the following provisions and any sale of the Property shall be subject to the following provisions: 13.04.1 If at any time, the owner of the Property (the "Premises Owner ") determines that it wishes to sell its interest in all or a portion of the Property to a for - profit entity, the Premises Owner shall, before listing the Property for sale or offering it for sale or accepting an offer for its sale from a third party, whether or not said offer is solicited by the Premises Owner, first offer to the Commercial Unit 2 Owner the opportunity to negotiate the terms for and acquire the Property. The Premises Owner shall provide written notice to the Commercial Unit 2 Owner of its intent to sell the Property and shall propose a price and the terms for such sale (the "Initial Offer"). The parties shall have a period of Thirty (30) days from the receipt of said notice by the Commercial Unit 2 Owner to negotiate the terms of the sale and in the event they are unable to agree upon said terms, then the Premises Owner shall be free to sell the Property to a third party, provided that the price for said sale shall be for a price which is no less than ninety (90 %) percent of the price offered in the Initial Offer and the material terms of said sale shall be no less favorable to the Premises Owner than those which were contained in the Initial Offer. Any sale which is in violation of these provisions shall be voidable in an action brought by the Commercial Unit 2 Owner to enforce the terms of this provision. The City shall have the right to acquire the Property if the 28 of 67 IiltilIIIIII IIIIIIIIIIIIIIIIIIIII11111111LI1111 Page: 0 a 14 a 54 JANICE K VOS AUDILL PITKIN COUNTY CO R 2336.00 Commercial Unit 2 Owner does not exercise its rights hereunder to acquire the Property. All notices required hereby to be given to the Commercial Unit 2 Owner shall be given to the City at the same time as they are given to the Commercial Unit 2 Owner. If City desires to negotiate for the purchase of the Property; City shall engage in the negotiations with Tenant during the same thirty day period as is provided to the Commercial Unit 2 Owner and all provisions hereof shall apply equally to the Commercial Unit 2 Owner and the City, except that the Commercial Unit 2 Owner shall have the first right to acquire the Property and the City shall have the right to acquire the Property if the Premises Owner and Commercial Unit 2 Owner are unable to successfully negotiate the terms of an acquisition of the Property. 13.04.2 if, at any time subsequent to an Initial Offer and the failure of the Premises Owner and the Commercial Unit 2 Owner to agree upon the terms of said sale, the Premises Owner desires to sell the Property for a price which is less than ninety (90 %) percent of the price contained in the Initial Offer and /or which contains material terms less favorable to the Premises Owner, then the Premises Owner shall provide another offer to the Commercial Unit 2 Owner (the "Subsequent Offer ") and the same provisions hereof which pertain to an Initial Offer shall apply to all Subsequent Offers. This sequence of offers and negotiations shall continue for as many times as necessary to afford the Commercial Unit 2 Owner the rights to negotiate the terms for and acquire the Property as are provided for herein. Section 13.05 AspenFilm's Right to Acquire Interests In Tenant. 13.05.1 If at any time during or after the Term of this lease, any majority or controlling member of Tenant or the Premises Owner (as the context may require), or any majority or controlling member of any entity which is a majority or controlling member of Tenant (in either case, the "Selling Member "; and for the purpose of this Section 13.05, "member" shall also mean partner or shareholder or trustee or beneficiary, if the relevant entity is a partnership or corporation or trust, as the context may require; and "Tenant" shall mean the tenant under this Lease and any interest in any constituent entity other than family trusts), determines that it wishes to assign its majority or controlling interest (an "Interest ") in Tenant or Premises Owner, then such member (the "Selling Member ") shall, before offering it for assignment or accepting an offer from a third party for such assignment, first offer to the Commercial Unit 2 Owner the opportunity to negotiate the terms for and obtain an assignment thereof. The Selling Member shall provide written notice to Commercial Unit 2 Owner of its intent to assign its Interest and shall propose a price and the terms for such an assignment (the "Initial Offer ", which shall contain a copy of the entity's partnership agreement, operating agreement, shareholders' agreement, tenancy -in- common agreement or other relevant governing document, together with its current and three - years' prior balance sheets, income statements, cash flow statements, tax return and the Selling Member's K -1. The parties shall have a period of Thirty (30) days to negotiate the terms of the assignment and in the event they are unable to agree upon said terms, then the Selling Member shall be free to assign the Interest to a third party, provided that the price for 29 • 1111111111111 III II II II III 5 of 67 82/18/2007 01: 3 4ICE K VOS CAUDILL PITKIN COUNTY CO R 2336.00 0 0.00 said assignment shall be not less than ninety (90 %) percent of the price offered in the Initial Offer and the material terms of said assignment shall be no less favorable to the Selling Member than those which were contained in the Initial Offer. The City shall have the right to acquire an assignment of the Interest if the. Commercial Unit 2 Owner does not exercise its rights hereunder to acquire the Interest. All notices required hereby to be given to the Commercial Unit 2 Owner shall be given to the City at the same time as they are given to the Commercial Unit 2 Owner. If City desires to negotiate for the assignment of the Interest, City shall engage in the negotiations with the Selling Member during the same thirty day period as is provided to the Commercial Unit 2 Owner and all provisions hereof shall apply equally to the Commercial Unit 2 Owner and the City, except that the Commercial Unit 2 Owner shall have the first right to acquire the Interest and the City shall have the right to acquire the Interest only if Tenant and Commercial Unit 2 Owner are unable to successfully negotiate the terms of an assignment of the Interest. The following transfers are exempt from this provision (but in each event, Landlord and FilmFest must be given fifteen (15) days prior written notice of any such transfer and the agreement therefore): (a) by devise or descent; (b) by order of a bankruptcy court in connection with the adjudication of bankruptcy of a Selling Member (c) a transfer in violation of the operating agreement of Tenant which results in the transferee having no voting interest in the Tenant; (d) transfers by gift or without consideration; (e) transfers to family trusts or family limited liability companies where all of the members in the transferee are family members of the members in the transferor; (f) transfers to entities in which the members of the transferor have the same ratio of ownership interest in the transferee as they had in the transferor; (g) transfers as a result of dilution of the interest of a Member as provided for in the Operating Agreement or relevant shareholder or other agreement among the Members of the relevant entity; and (h) transfers to and among persons or entities who were members of Isis Group at the time of its execution of this Sublease. 13.05.2 Any assignment of an Interest which is in violation of these provisions shall be voidable in an action brought by the Commercial Unit 2 Owner or by the City to enforce the terms of this provision. 13.05.3 If, at any time subsequent to an Initial Offer and the failure of the Selling Member and the Commercial Unit 2 Owner and the failure of the City and the Selling Member to agree upon the terms of an assignment of an Interest, the Selling Member desires to assign such Interest for a price which is less than ninety (90 %) percent of the price contained in the Initial Offer and /or which contains material terms less favorable to the Selling Member, then the Selling Member shall provide another offer to the Commercial Unit 2 Owner and the City (the "Subsequent Offer") and the same provisions hereof which pertain to an Initial Offer shall apply to all Subsequent Offers. This sequence of offers and negotiations shall continue for as many times as necessary to afford the Commercial Unit 2 Owner and the City the rights to negotiate for and obtain an assignment of the Interest as are provided for herein. 30 . II II II 1111111 III III I I III III 534584 Page: 001:541 02/16/2007 JANICE K VOS CAUDILL PITKIN COUNTY CO R 2336.00 0 0.00 13.05.4 Tenant shall, within thirty (30) days of request therefore, but not more frequently than four times per calendar year during the Term, deliver to the City and to the Commercial Unit 2 Owner a statement, certified by the manager of Tenant, setting forth the names, telephone numbers and addresses of each member of Tenant (including its constituent entities) and their respective ownership interests in Tenant and its constituent entities as of January 1 of such year. Tenant's failure to deliver such statement to the City and Commercial Unit 2 Owner shall be a default hereunder. Attached hereto as Exhibit D is such statement, certified as true by Courtney Lord, as of the date hereof. 13.05.5 For the purpose of this Section 13.05, "controlling or majority" shall mean having the voting power to appoint or remove the manager of the Tenant, or the power to amend the operating agreement of the Tenant, including without limitation by virtue of proxies or voting trusts or similar devices ARTICLE XIV ESTOPPEL CERTIFICATE, ATTORNMENT AND SUBORDINATION Section 14.01 Estoppel Certificates From time to time, but not more frequently than twice during any Lease Year, Tenant shall, within thirty (30) days after written request from Landlord, execute and deliver a commercially reasonable estoppel certificate. Landlord shall also execute and deliver to Tenant similar estoppel certificates within thirty (30) days after written request therefor, but not more frequently than twice during any Lease Year. Section 14.02 Subordination, Non - Disturbance and Attornment (a) Subject to events of termination of this Lease, such as, without limitation, non - appropriation, within thirty (30) days after the execution of this Lease, Landlord shall use its best efforts to deliver to Tenant a mutually satisfactory Non - Disturbance Agreement from any mortgagee or trustee of the Premises. (b) From time to time during the Term, Tenant shall, within thirty (30) days after written request from Landlord, enter into a mutually satisfactory subordination, non - disturbance and attornment agreement to subordinate this Lease to the lien of any mortgage or other security interest now or hereafter placed on Landlord's interest in the Premises and the Building. Such Agreement shall contain the terms and provisions described in Section 14.02(c) and shall be subject to events of termination of this Lease, • such as, without limitation, non - appropriation). 31 V 11111111 534584 g 60014541 JANICE K VOS CRUD/LL PITKIN COUNTY CO R 2336.00 D 0.00 (c) Each such agreement shall expressly provide that (i) this Lease shall remain in full force and effect during the Term, and that Tenant's rights hereunder shall not be disturbed, notwithstanding any default by Landlord in payment of the indebtedness and other amounts secured by such mortgage, notwithstanding any default by Landlord in performance of Landlord's other obligations pursuant to such mortgage, and notwithstanding any foreclosure proceedings with respect thereto, provided that Tenant makes any payments that Landlord fails to make after receipt of notice of such non - payment; (ii) that all fire insurance proceeds and condemnation awards shall be applied in accordance with the terms of this Lease, and (iii) that Tenant shall be given notice of any default by Landlord hereunder, and Tenant shall have the right to cure such defaults on Landlord's behalf and to assume Landlord's obligations under this Lease ; and (iv) subject to events of termination of this Lease, such as, without limitation, non - appropriation. Each such agreement will include Tenant's agreement to attorn to any purchaser of the Premises on any foreclosure of such mortgage. (d) Landlord shall enter into with any sub - tenant of Tenant, upon Tenant's request, a reasonable non - disturbance and attornment agreement providing that in the event that Tenant defaults under the Lease (after notice and Tenant's failure to cure) and Tenant forfeits, to the City, Tenant's rights under the Lease, then Landlord shall recognize such sub - tenant as a direct obligor to the Landlord and the Landlord shall not disturb such sub - tenant's rights under its sub -lease for so long as such sub - tenant timely performs all of its obligations thereunder, but always subject to events of termination of this lease, such as, without limitation, non - appropriation. • ARTICLE XV TENANT'S RIGHT TO MORTGAGE Section 15.01 Tenant's Right to Encumber Tenant shall at all times have the right to grant a security interest in or otherwise encumber its interest in this Lease; provided, however that Landlord grants its consent in writing, which consent shall not be unreasonably withheld, and provided further that the COP Insurer grants its consent in writing, which shall not be unreasonably withheld or delayed. Tenant shall provide to Landlord all documents relating to a proposed encumbrance or security interest in this Lease upon requesting Landlord's consent. ARTICLE XVI QUIET ENJOYMENT AND ASSIGNMENT OF LEASES Section 16.01 Landlord's Covenant Landlord covenants and agrees that during the Term, Tenant shall at all times throughout the Term have the peaceable and quiet enjoyment and possession of the 32 of 67 II IIII III III W WI\ LI \\ kII\ 02/16/20 Page: 0 84 0 I4sni JRtJICE K VOS LRUDILL PITKIN COUNTY c0 R 233 6 Premises without hindrance or interruption, subject to the terms of this Lease and of the Authority Lease, the Declaration , that certain Lease dated May 28, 2002, originally between The Isis, LLC, a Colorado limited liability company, as Landlord, and Rocky Mountain Resort Cinemas, Inc, a Wyoming corporation, as Tenant, as affected by Consent to Assignment, Estoppel Certificate and Amendment to Lease dated - September 25, 2003 among The Isis, LLC, Rocky Mountain Resort Cinemas, Inc., Metropolitan /Rocky Mountain Cinemas, L.L.C., a Delaware limited liability company, as Assignee, Marshall C. Smith and Karen Smith, husband and wife, and Metro - Northwest, LLC, and as further affected by Assignment and Assumption of Lease dated September 25, 2003 between Rocky Mountain Resort Cinemas, Inc., as Assignor, and Metropolitan /Rocky Mountain Cinemas, LLC, as Assignee (collectively, the "Theater Lease "), the Unit C- -Lease dated April 1, 2006 between CC Aspen, LLC, as landlord, and Heather Davis, Melanie Burrell and Ilka Evans as tenant, the Unit D- -Lease dated April 1, 2006 between CC Aspen, LLC, as landlord, and Judson Zevin, Garrett Mandich and Sarah DeStefano, as tenant (collectively, the "AH Leases "), and other matters of record. Landlord shall perform all of its obligations under the Authority Lease and shall protect Tenant's rights under this Lease from disturbance by reason of any default by Landlord under the Authority Lease. Section 16.02 Landlord's Mortgages • To the fullest extent allowed by law and subject to the Authority Lease (including provisions relating to the Landlord's non - appropriation rights), Landlord covenants and agrees to make all payments when and as due and to perform and comply with all covenants, conditions, obligations and agreements when and as required by the terms of all agreements or obligations which could or may have an affect on this Lease and to which Landlord is a party or by which it is bound, and on request of Tenant to furnish proof of such payment and performance to Tenant within thirty (30) days after request therefor. Section 16.03 Assignment of Theater Lease Landlord has assigned the Theater Lease to AspenFilm, as the subtenant under the sublease of the remaining portion of Commercial Unit A. Until such time as the Theater Lease is terminated as to the Commercial Unit 1, as a result of the exercise of such rights under paragraph 25 of the Theater Lease, Tenant shall be entitled to receive thirty (30 %) percent of all rents and sixteen and fifty -five one - hundredths (16.55 %) percent of the triple net and CAM charges payable pursuant to the Theater Lease and AspenFilm, as the subtenant of City holding the sublease on the remaining portion of Commercial Unit A, shall be entitled to receive (70 %) percent of all rents and the remaining share of the triple net and CAM charges payable pursuant to the Theater Lease. AspenFilm shall pay Isis Group's share of said sums to Isis Group, within fifteen (15) days of AspenFilm's receipt of them. Provided that AspenFilm agrees to and does in fact diligently pursue collection actions against the Tenant under the Theater Lease (the "Theater Tenant ") for its failure to pay all sums due under the Theater Lease, Isis Group 33 Page: 291 of 467 1111 I 1111111111111111111111h N R 1111 1 534584 /20 0 0 01 .541 JANICE K VOS CAUDII PITKIN will pay to AspenFilm , Isis Group's above stated share of any triple net and CAM charges which are not timely paid by the Theater tenant. AspenFilm, as the Assignee (under - Landlord) of the Theater Lease, shall have the right to collect all the triple net and CAM charges paid by the Theater Tenant and pay them to the Association, vendor, utility provider or other applicable recipient. If AspenFilm handles these funds in this manner, AspenFilm does not have to remit them to Tenant. Section 16.03 Assignment of AH Leases Landlord hereby assigns to Tenant and Tenant accepts the assignment of the AH Leases. ARTICLE XVII DEFAULT, ABANDONMENT, SURRENDER OF PREMISES Section 17.01 Default by Tenant If Tenant shall fail to perform or observe any of Tenant's covenants and if such failure shall continue after notice, in the case of any failure to pay when due any Rent or other monetary amounts due hereunder, for more than ten (10) days after Tenant's receipt of written notice of such failure, or in any other case for more than thirty (30) days after Tenant's receipt of written notice of such failure or such longer time as may be reasonably required to cure because of the nature of the default (provided Tenant must have undertaken procedures to cure the default within such thirty (30) day period and thereafter diligently pursue such effort to completion); then, and in any of said events ( "Event of Default ") Landlord lawfully may, immediately or at any time thereafter, pursuant to summary dispossession or other legal proceedings, enter into and upon the Premises or any part thereof, repossess the same as of its former estate, and expel Tenant, and those claiming an interest by, through or under Tenant, and remove any personalty left by Tenant (or anyone claiming by, through or under Tenant) without being deemed guilty of any manner of trespass, and without prejudice to any other remedies which Landlord may have at law, in equity or under this Lease, including, without limitation, any remedies which might otherwise be used for arrearages of rent or other breach hereunder (but excluding any right to accelerate rent), or upon written notice to Tenant, terminate this Lease. If Landlord elects to terminate this Lease due to an Event of Default as aforesaid, then Tenant shall remain liable for all rental and other obligations accruing up to the date of termination, but Tenant shall have no further liability after the date of termination under this Lease. If Landlord elects to repossess the Premises due to an Event of Default as aforesaid, then Tenant shall (a) remain 34 l II 534584 iiIIIIIIIIIIIIIIII IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIil 00 0.00 1641 liable for all rental and other obligations accruing up to the date of such repossession, and (b) be liable to Landlord for all reasonable costs actually incurred in connection with the repossession and re- letting of the Premises (including, without limitation, reasonable attorneys' and brokerage fees, but not including any costs of renovating or retrofitting the Premises), and (iii) remain liable for the payment of all Rent obligations payable hereunder for the balance of the unexpired Term of this Lease in effect as of the date of repossession by Landlord. In the event the Premises are re -let by Landlord, Tenant shall be entitled to a credit against its rental obligations hereunder in the amount of rents received by Landlord from any such re- letting of the Premises less any reasonable costs incurred by Landlord (not previously reimbursed by Tenant) in connection with the repossession and re- letting of the Premises (including, without limitation, reasonable attorneys' fees and brokerage commissions, but not including any cost of renovating or retrofitting the Premises). In the event of termination of Tenant's right of possession of the Premises by Landlord as aforesaid, Landlord shall use reasonable efforts to re -let the Premises at a fair market rental or as near thereto as is possible under the circumstances then existing so as to minimize the damages suffered by Landlord and payable by Tenant hereunder. Section 17.02 Abandonment (a) Tenant shall not vacate or abandon the Premises at any time during the Term of this Sublease. Abandonment shall be deemed to have occurred if Tenant is absent from the Premises for more than ninety (90) days without having made payment of Rent as set forth in Article IV, above. If Tenant should violate this prohibition or be dispossessed of the Premises involuntarily, by operation of law or otherwise, any personal property belonging to Tenant left on the Premises shall be deemed to be abandoned, at the Landlord's option, or Landlord may store such property in Tenant's name and at Tenant's expense without notice to Tenant. (b) Upon abandonment of the Premises, Landlord, at its election, may reenter and relet Premises as set forth at Section 17.01, above. The rights and remedies of Landlord under remedy of Landlo herein given in addition to and not exclusive of any other right or or which may be permitted by law. Section 17.03 Surrender of Premises • Except for trade fixtures, all alterations, additions, improvements, partitions, flooring, carpeting or fixtures, including, but not limited to light fixtures, electrical fixtures, and plumbing fixtures, which may be made or installed by either of the parties hereto or any subtenant of Tenant. upon the Premises and which in any manner attached to the floors, walls, windows, or ceilings are to be the property at the termination of this Lease due to Default by Tenant, unless Landlord shall elect otherwise. Landlord shall make such election by giving notice in writing to Tenant prior to the expiration or other event Landlord termination so ele t, such alterations, nsa installations, l o addit additions or improvements the shall made by Tenant 35 534584 Page: 293 of 111111111111111111111111111 1111111 36 00/161 0 0 00 0 1 541 or any subtenant of Tenant upon the Premises as the Landlord shall so elect shall be removed by Tenant, or any subtenant of Tenant, and Tenant, or any subtenant of Tenant, shall restore the Leased Premises to its original condition at the commencement hereof, normal wear and tear excepted, at its own costs and expense prior to the expiration or termination of this Lease due to a Tenant Default; or if Tenant fails to do so at Tenant's expense. Section 17.04 Tenant's Remedies for Nonappropriation or Default (a) Non- appropriation or Event of Default under Authority Lease or Indenture.. If Landlord fails to appropriate funds to pay the COP amounts due or coming due in the fiscal year next occurring during the Initial Term and successive renewal terms and any failure to pay said funds if appropriated, to the payments due on the COP; or, an Event of Default occurs under the Authority Lease or Indenture Tenant's remedy shall be limited to its right to exercise its purchase option, as provided for in this Lease. (b) Other Default. In the event Landlord defaults in any of its obligations under this Lease, other than as referred to in subclause (a) above, Tenant shall not have a right to damages, however Tenant shall have a right to seek specific performance of the act or obligation to be performed by Landlord, or may seek other remedies (not including damages) which may be available at law or equity, including, without limitation, injunctive relief. Section 17.05 Interest on Late Payments All amounts required to be paid by either party to the other pursuant to this Lease shall bear interest from the due date until the date of payment at the prime rate of Wells Fargo Bank, N.A., as published by said bank from time to time, or if said bank is no longer publishing said rate, then the rate shown in the Wall Street Journal as the prime rate. Section 17.06 Attorneys' Fees In the event of any default by either party in making any payment or performing or complying with any covenant, condition, obligation or agreement when and as required by the terms of this Lease, continuing beyond any period provided in this Lease for the curing of the default, the party not in default shall be entitled to recover reasonable attorneys' fees incurred by reason of the default and in enforcing the terms of this Lease, including any fees incurred in bankruptcy proceedings and/or arbitrations. Section 17.07 Remedies Cumulative The rights and remedies of Landlord and Tenant hereunder shall be cumulative, and no one of them shall be construed as exclusive of any other or of any rights and remedies 36 II II III 1111 II III II I I III II 534584 Page: 607�01:541 JANICE K VOS CAUDILL PITKIN COUNTY CO R 2336.00 0 0.00 otherwise available at law or in equity. The exercise of any rights or remedies by Landlord or Tenant shall not impair its standing to exercise any other rights or remedies. Section 17.08 No Waiver of Default No acquiescence by either party in any default by the other shall be construed as a waiver of the default, and no waiver of any default shall be construed as a waiver of any other or subsequent default. ARTICLE XVIII Intentionally Omitted ARTICLE XIX MISCELLANEOUS Section 19.01 AH Units During the Term of this Lease, AspenFilm shall have the first right to select a tenant who will lease an AH Unit as it becomes available from time to time, subject to the Aspen /Pitkin County Housing Authority ( "APCHA ") standards, for its employees and for Theater employees. The City will have the second right to select a tenant who will lease an AH Unit, subject to APCHA standards, for its employees. Tenant shall have the third right to select a tenant who will lease an AH Unit subject to APCHA standards, for its employees or the employees of its sub - tenants or designees. AspenFilm and City shall both be given notice by Tenant at the time Tenant learns of an upcoming vacancy of any AH Unit and both shall have the same 30 days from the giving of said notice to exercise said rights by providing written notice to Tenant within said 30 day period. Tenant shall provide said notice upon learning of an upcoming vacancy, but not earlier than ninety days from the expiration date of the existing lease on the AH Unit that will become vacant. The rights granted above shall be subject to Tenant's (as the landlord under the leases for the AH Units) ability to deliver the AH Unit in the event that, after availing itself of judicial remedies (which Tenant shall pursue in the event that an AH Unit occupant holds over and refuses to vacate such AH Unit), Tenant is unable to eject such occupant from an AH Unit. The City shall be responsible for amending the current deed restrictions for the AH Unit to provide for this provision. At all times during the Term of this Lease, Tenant shall be entitled to all rents and other proceeds from the AH Units. Section 19.02 Memorandum of Lease The parties are concurrently herewith executing a Memorandum of this Lease, for public record. As soon as practical after the Commencement Date, the parties shall execute an amendment to the Memorandum of Lease, setting forth the Commencement Date, the expiration date of the Initial Term, and the dates of the Renewal Terms, for public record. 37 Hill In I II II Page: 4584 °01454 Section 19.03 Notices JANICE K VOS CAUDILL PITKIN COUNTY CO R 2336.00 D 0.00 Every notice, demand, request, or other instrument required to be given pursuant to this Lease shall be in writing and sent by United States certified mail, return receipt requested, postage prepaid, or by a recognized overnight delivery service, and shall be - deemed effective two days after mailing or one day after deposit with the overnight • delivery service, if properly addressed as follows: lf to Landlord: City of Aspen, Attention: City Manager • 130 S. Galena Street, 2 Floor Aspen, CO 81611 • (b) if to Tenant: Isis Retail Group, LLC Attention: Courtney Lord • 9 Pyramid Road Aspen, CO 81611 with a copy to: Klein, Cote, & Edwards, LLC Attention: Herbert S. Klein, Esq. 201 North Mill Street, Suite 203 Aspen, CO 81611 Either party may designate an alternate or additional address by written notice given pursuant to this section. Section 19.04 Entire Agreement This Lease and its exhibits, including the MOU, sets forth all the covenants, promises, agreements, conditions and understandings between Landlord and Tenant concerning the subject matter of this Lease. No alteration, amendment or addition to this Lease shall be binding on Landlord or Tenant unless it is in writing and signed by each party. Section 19.05 Binding Effect The provisions of this Lease shall be binding on the parties and their successors and assigns, shall be enforceable by Landlord and its successors and assigns and by Tenant and its permitted successors and assigns. 38 II II 'HUM II 111111 II 0 g 650 0'01 :541 Section 19.06 Consents JPNICE K VOS CAUDILL PITKIN COUNTY CO R 2336.00 D 0.00 Wherever Landlord's consent or approval shall be required pursuant to the terms of this Lease, such consent or approval shall not be unreasonably withheld, conditioned or delayed. Section 19,07 Construction (a) This Lease shall be construed according to the laws of the State of Colorado. If any provision of this Lease or the application thereof to any person or circumstance shall be invalid or unenforceable, the remainder of this Lease shall not be • affected thereby and each provision shall be valid and enforceable to the fullest extent permitted by law. (b) The captions and index in this Lease are inserted only as a matter of convenience, and do not define, limit, or describe the scope or intent of the articles and sections. Section 19.08 Deed Restrictions The parties hereto acknowledge that this Agreement is subject to certain deed restrictions as set forth in that certain Occupancy and Use Deed Restriction, Agreement and Covenant appended hereto as Exhibit DR -1 and incorporated herein by this reference. Section 19.09 Payments due from Landlord Any and all payments due from Landlord, including without limitation, those set forth at Sections 10.02(c), 17.05, and 17.06, shall not be an obligation of Landlord beyond the fiscal year for which funds are appropriated for the payment therefore or to make payments from any funds from the City of Aspen other than funds appropriated for the payment of current expenditures. 39 111111111111111111111 IIIII 11E11111111H 53458 r 7�01:541 JRNICE K VOS CAUDILL PITKIN COUNTY CO R 2336.00 0 0.00 IN WITNESS WHEREOF, Landlord and Tenant have signed this Lease. LANDLORD: - THE CITY OF ASPEN, a municipal corporation acting through its City Council pursuant to its Charter and the laws of State of Colorado By: Ste e Barwick, City Manager TENANT: ISIS RETAIL GROUP, LLC, a Colorado '- 'ted Liabil' Company By: surtney Lord Its: Manager JPW- saved: 2/14/ 2007- 16664- G:yohnlwordlagralsis1Retail- Lease- 2- 15- 07.DOC 40 Exhibit "E" [Plan Outlining Streets of Aspen's downtown "core "] PHBF/ 858850 4 " EXHIBIT E — ASP DOWNTOWN COR } , , e ryL # > fs � � n L. 27� '` . " r, ° > s 14414 /7kr O.* ta -. E -, 1 StJ h�`. 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L'-a °. m. : nL wi4.. .• I' TM • LMW.N L j' 21... .°d"a4' ^ W � � r 1 1 '11 1 L ; ',� _ a � F� j h117 .. .1 © {', -H,u?� _ C 0.7 La ^"`' p ♦ e ( 1 mw Ist3•.Illy 1 1 6) WnNl.s.elti K I A • ... —„ -L-L - I -r 9r �� - ! q n w . • • v . ` .I,. wr.y NE SLEEKER Q t .e. ..slmra �. • Au-awn" .o�u^. 7 7 et eacaor - 1 rvnm:.d ...6411 . non 1 nom e 4/flassasoswas Exhibit "F" Agreement for Recognition, Consent to Sublease, Nondisturbance and Attornment under Lease PHBF/ 858850 4 AGREEMENT FOR RECOGNITION, NON - DISTURBANCE AND ATTORNMENT UNDER LEASE THIS AGREEMENT is entered into as of this day of September, 2011, by and among THE CITY OF ASPEN, a Colorado municipal corporation, acting through its City Council, whose address is 130 South Galena Street, Aspen, Colorado 81611(hereinafter referred to as "City"); ISIS RETAIL GROUP LLC, a Colorado limited liability company (hereinafter referred to as "Landlord') and FREE PEOPLE OF PA LLC, a Pennsylvania limited liability company, whose address is 5000 South Broad Street, Philadelphia, Pennsylvania 19112 ( "Tenant "). WITNESSETH: WHEREAS, the City, as Landlord, and Landlord, as Tenant, entered into a certain City Lease dated as of the 16th day of February, 2007 ( "City Lease ") with regard to certain property located in the City of Aspen, County of Pitkin, State of Colorado, which property so leased is more particularly described in said City Lease; and WHEREAS, pursuant to the City Lease, Landlord has the right to enter into subleases and City, if it approves the sublease, has agreed to execute a recognition, non - disturbance and attornment agreement; and WHEREAS, Landlord concurrently herewith is entering into a City Lease with Tenant for a portion of the property leased by Landlord under and pursuant to the City Lease, which portion of the property so leased is more particularly described in said City Lease ( "Tenant Sublease "), and in Exhibit A attached hereto and made a part hereof; and WHEREAS, Tenant requires the execution and delivery of this Agreement as a condition precedent to the effectiveness of the Tenant Sublease; and NOW, THEREFORE, to induce and in consideration of the execution and delivery by Tenant of the Tenant Sublease and in consideration of the premises and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE 1 NON - DISTURBANCE AND ATTORNMENT City hereby acknowledges that it has been furnished a copy of the Tenant Sublease as executed by Landlord and Tenant, and that City hereby approves of and consents to the Tenant Sublease, as same may from time to time be amended or modified with the approval of City, not to be unreasonably withheld, provided that the City's consent shall not be required for any amendment conforming the exercise by Tenant of an option granted in the Tenant Sublease. City hereby covenants and agrees that during the entire term of the Tenant Sublease, Tenant's possession and rights under the Tenant Sublease shall not be abrogated, diminished or otherwise adversely affected in any way by reason of any default under the City Lease or by OAKLAND /1361530.1 Aspen, Colorado —Isis Building 10/2/2007 SNDA - PI-IBF/ 866216.2 reason of termination, cancellation, surrender or expiration of the City Lease. In the event of any such termination, cancellation, surrender or expiration of the City Lease, City shall (i) accept the attornment of Tenant thereafter, (ii) recognize the rights of Tenant under the Tenant Sublease so long as Tenant shall not have been finally adjudicated to be in default under the Tenant Sublease beyond all applicable notice and cure periods, and (iii) be bound to Tenant under all of the terms, covenants and provisions of the Tenant Sublease for the remainder of the term thereof (including the renewal periods, if Tenant elects or has elected to exercise its options to extend the term) and City hereby agrees to assume and perform such terms, covenants and provisions and Tenant shall from and after the date such City succeeds to the interest of "Landlord" under the Tenant Sublease, have the same remedies against City for the breach of any covenant contained in the Tenant Sublease that Tenant might have had under the Tenant Sublease against Landlord if City had not succeeded to the interest of Landlord; provided that City will not be responsible (a) for any action or inaction of Landlord under the Tenant Sublease or (b) to cure any default by Landlord under the Tenant Sublease which occurred or commenced prior to the termination of the City Lease, unless such default continues to exist on the date of attornment and violates the City's obligation as Landlord under the Tenant Sublease. Tenant shall not be named or joined in any action or proceeding by City under the City Lease to recover possession from Landlord. ARTICLE 2 GENERAL COVENANTS City shall furnish simultaneously to Tenant a copy of any notice sent to Landlord under the City Lease, and shall advise Tenant in writing upon the expiration or termination of the City Lease for any cause. Wherever in this Agreement or in the Tenant Sublease a party hereto shall be required or permitted to serve a notice or demand on any party, such notice or demand shall be given or served as hereinafter provided. Notices shall be sent to: City: The City of Aspen 130 South Galena Street Aspen, Colorado 81611 Attention: City Manager Landlord: Isis Retail Group, LLC 9 Pyramid Road Aspen, Colorado 81611 Attention: Courtney Lord with a copy to: Richard J. Burstein, Esquire Honigman Miller Schwartz and Cohn LLP 38500 Woodward Avenue, Suite 100 Bloomfield Hills, Michigan 48304 -5048 OAKLAND /1361530.1 Aspen, Colorado— Isis Building 10/2/2007 SNDA - 2 PHBF/ 866216.2 Tenant: Free People of PA LLC 5000 South Broad Street Philadelphia, Pennsylvania 19112 Attention: President with a copy to: Free People of PA LLC 5000 South Broad Street Philadelphia, Pennsylvania 19112 Attention: General Counsel and such other places as hereafter shall be designated in writing by the respective parties. Such notice shall be mailed by United States registered or certified mail, return receipt requested, postage prepaid. City agrees to and does hereby waive and relinquish any and all rights or remedies against Tenant, pursuant to any lien, statutory or otherwise, that it may have against the property, goods or chattels of Tenant in or on the premises demised to Tenant under the Tenant Sublease, except as provided Landlord under the Tenant Sublease. The agreements herein contained shall bind and inure to the benefit of the parties hereto and their respective heirs, representatives, successors and assigns and shall be deemed covenants running with the land. (signatures begin on the following page) OAKLAND /1361530.1 Aspen, Colorado— Isis Building 10/2/2007 SNDA - 3 PHBF/ 866216.2 IN WITNESS WHEREOF, the parties hereto have executed this Agreement For Recognition, Non - Disturbance and Attornment Under Lease as of the day and year first above written. WITNESSES: THE CITY OF ASPEN, a Colorado municipal corporation acting through its City Council pursuant to its Charter and the laws of the State of Colorado By: _ 171 /_ _ Steve Barwick i ea )M _ Its: City Manager /�lL%f l( Ci M / "City" STATE OF COLORADO ) )ss COUNTY OF PITKIN ) The foregoing instrument was acknowledged before me this 13 day of September, 2011, by Steve Barwick, the City Manager of THE CITY OF ASPEN, a Colorado municipal corporation. ypu \ q? I Notary Public ) � , d aP` °; t .STq � . 0 Y� 0 OAKLAND /1361530.1 Aspen, Colorado— Isis Building 10/2/2007 SNDA 4 PHBF/ 866216.2 WITNESSES: ISIS RETAIL GROUP, LLC a Colorado limited liability company By: Courtney Lord Its: Manager "Landlord" STATE OF MICHIGAN ) )ss COUNTY OF OAKLAND ) The foregoing instrument was acknowledged before me this day of September, 2011, by Courtney Lord, the Manager of ISIS RETAIL GROUP, LLC, a Colorado limited liability company. Notary Public OAKLAND /1361530.1 Aspen, Colorado— Isis Building 10/2/2007 SNDA - 5 PHBF/ 866216.2 WITNESSES: FREE PEOPLE OF PA LLC, a Pennsylvania limited liability company By: Its: "Tenant" COMMONWEALTH OF PENNSYLVANIA ) )ss COUNTY OF PHILADELPHIA ) The foregoing instrument was acknowledged before me this day of September, 2011, by , the of FREE PEOPLE OF PA LLC, a Pennsylvania limited liability company. Notary Public OAKLAND /1361530.1 Aspen, Colorado— Isis Building 10/2/2007 SNDA - 6 PHBF/ 866216.2 EXHIBIT A TENANT SUBLEASE • OAKLAND /1361530.1 Aspen, Colorado— Isis Building 10/2/2007 SNDA - Exhibit A, Page 1 PHBF/ 866216.2 Exhibit "G" Purchase Option Agreement PHBF/ 858850.4 VII 1111 IIII II II III 1111 02 6 //2007 x 01:491 JANICE K VOS CAUDILL PITKIN COUNTY CO R 76.00 D 0.00 PURCHASE OPTION AGREEMENT THIS PURCHASE OPTION AGREEMENT (this "Agreement ") is dated as of February 1, 2007 and is entered into by and between CITY OF ASPEN PUBLIC FACILITIES AUTHORITY, a Colorado nonprofit corporation (the "Corporation ") and ISIS RETAIL GROUP, LLC, a Colorado limited liability company ( "Isis "). WHEREAS, Isis is a Colorado limited liability company that is duly organized, validly existing and in good standing under the laws of the State, is duly qualified to do business in the State, and is duly authorized under its articles of organization to perform its obligations under this Agreement; and WHEREAS, the Corporation has purchased those units and interests in the common elements established by the Condominium Declaration for Isis Theater Condominiums recorded in the Pitkin County Clerk and Recorder's records at reception #438433 on December 9, 1999 (the "Declaration ") which are described in Exhibit A hereto (collectively, the "Acquired Property ") as assignee of Isis Property Group, LLC ( "Isis Property Group ") pursuant to the Purchase Agreement dated as of September 12, 2006 between Isis Property Group and CC Aspen, LLC; and WHEREAS, the Corporation is authorized, under its articles of incorporation and bylaws, action of its board of directors and applicable law, to: (a) acquire and own the Acquired Property; (b) lease to the City of Aspen, Colorado (the "City ") the Acquired Property, together . with the improvements thereon described in Exhibit B to the Lease Purchase Agreement dated February 1, 2007 (the "Lease ") by and between the Corporation, as lessor, and the City, as lessee (as further defined herein, the "Improvements," and, collectively with the Acquired Property, the "Leased Property "); and (c) execute, deliver and perform its obligations under this Agreement; and WHEREAS, in order to finance the acquisition of the Acquired Property and the construction of the Improvements, the Corporation is on the date hereof issuing the "City of Aspen Public Facilities Authority Taxable Certificates of Participation (Isis Theater Project), Series 2007A" (the "Certificates "), pursuant to the Mortgage and Indenture of Trust dated as of the date hereof (the "Indenture ") between the Corporation and American National Bank, as trustee; and WHEREAS, the Corporation will, on the date hereof, lease the Leased Property to the City pursuant to the Lease; and WHEREAS, the City will, on the date hereof, enter into: (a) the Sublease dated as of the date hereof (the "Isis Sublease "), recorded at Reception No. .8t -{691 of the records of the Clerk and Recorder of Pitkin County, Colorado (the "County "), between the City, as sublessor, and Isis, as sublessee, pursuant to which the City will sublease the portion of the Leased Property set forth in the Isis Sublease (the "Isis Sublease Property ") to Isis; and (b) the AspenFibn Sublease dated as of the date hereof (the "AspenFilm Sublease" and, collectively with the Isis Sublease, the "Subleases "), recorded at Reception No. g5S of the records of the Clerk and Recorder of the County, between the City, as sublessor, and Independent Films, Inc. 4317 -OS17- 0753.4 1 II II III II III II 111 I I a / 6//20007 015491 JANICE K VOS CAUDILL PITKIN COUNTY CO R 76.00 D 0..00 ("AspenFilm"), as sublessee, pursuant to which the City will sublease the portion of the Leased Property set forth in the AspenFilm Sublease (the "AspenFilm Sublease Property") to AspenFilm; and WHEREAS, in order to effectuate the intent and purposes of the Subleases, the Corporation anticipates that the Leased Property will be re- condominiumized (the " Recondominiumization") as contemplated in the Subleases; and . WHEREAS, the Corporation desires to grant to Isis the purchase options set forth herein; NOW, THEREFORE, for and in consideration of the mutual covenants and the representations, covenants and warranties herein contained, the parties hereto agree as follows: Section 1. Right to Purchase Upon Notice of Default by City. Provided the Recondominiumization has been completed: (a) In the event the City is in default in its obligations under the Lease or the Corporation is in default under the Indenture, including, without limitation, a failure by the City to appropriate funds to pay the Base Rentals due or corning due in the fiscal year next occurring, Isis shall have the right to purchase the Isis Sublease Properly for an amount equal to the sum of the then - outstanding principal amount of the Isis Base Rental Allocation (as defined in the Lease), all accrued and unpaid interest thereon and all costs of paying off the portion of the Certificates allocated to the Isis Base Rental Allocation, and regardless of any preclusion against prepayment or redemption, provided Isis gives notice of its intent to exercise this purchase right not later than sixty (60) days after the City's giving of the notice described in Section 2.05 of the Isis Sublease and closes on such purchase within ninety (90) days of the giving of such notice, and further provided that AspenFilm exercises its right to purchase the AspenFilm Sublease Property concurrently. (b) If AspenFih does not exercise its right to purchase the AspenFilm Sublease Property concurrently as required by subsection (a) of this Section 1, then Isis shall have only the right to purchase the Leased Property in its entirety, for an amount equal to the sum of the then- outstanding principal amount of the Certificates, all accrued and unpaid interest on Ole Certificates and all costs of paying off the Certificates; provided Isis gives notice of its intent to exercise this purchase right not later than sixty (60) days after the City's giving of the notice described in Section 2.05 of the Isis Sublease and closes on such purchase within ninety (90) days of the giving of such notice. Section 2. Purchased Property Free of Subleases. Upon any purchase by Isis of the Isis Sublease Property pursuant to Section 1 hereof, the Isis Sublease Property shall be free and clear of the Isis Sublease and the covenants and restrictions referred to in Section 5.01(c) of the Isis Sublease, but subject to Pennitted Encumbrances, as defined in the Lease. Upon any purchase by Tsis of the Leased Property in its entirety pursuant to Section 1 hereof, the Leased Property shall be free and clear of the Isis Sublease and the AspenFilm Sublease and the 48V-0817-0753 2 II II III II MI II II P 015491 JPNICE K VOS CRUDILL PITKIN COUNTY CO R 76.00 0 0.00 covenants and restrictions referred to in Section 5.01(c) of the of each such Sublease, but subject to Permitted Encumbrances, as defined in the Lease. Section 3. Identical Terms. Terms identical to those set forth herein, modified as appropriate for correct references to the parties and the property involved, shall be included in a purchase option agreement dated as of the date hereof between the Corporation and Aspenfilm. Section 4. Transfer Subject to Conveyance. Any purchase by Isis of the This Sublease Property or the Leased Property pursuant hereto shall be subject to a conveyance by the Corporation to the Aspen/Pitkin County Housing Corporation, of a %2 of 1% undivided ownership interest in each of the AH Units (as defined in the Isis Sublease). However, such ownership shall not include any right to rents or proceeds of sale, nor other economic interests, nor any obligation for the payment of any costs of ownership, nor any decision making authority with respect to the use, operation, control, etc, of the AH Units. Section 5. Recording. This Agreement shall be recorded as an encumbrance on the Leased Property with a priority senior to any lien for the Certificates. Section 6. Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon the Corporation and Isis and their respective successors and assigns. This Agreement and the covenants set forth herein are expressly intended to be covenants, conditions and restrictions running with the Leased Property. Section 7. Amendments, Changes and Modifications. This Agreement may not be effectively amended, changed, modified or altered other than by the execution of a subsequent document in the same manner as this Agreement is executed. Section 8. Applicable Law. The laws of the State of Colorado shall be applied in the interpretation, execution and enforcement of this Agreement. Section 9. Execution in Counterparts. This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instnunent. [remainder of page intentionally left blank] 4817-0517-0753 4 3 II II it II III II II I I II 02/16/2007 Page: 582 { 01549 JRNICE K VOS CRUDILL PITKIN COUNTY CO R 76.00 D 0.00 IN WITNESS WHEREOF, the Corporation and Isis have executed this Agreement as of the date first above written. CITY OF ASPEN PUBLIC FACILITIES AUTHORITY By , .. • esiden ISIS RETAIL GROUP, LLC By Manager [Signature Page to Purchase Option Agreement] 4817-0817-0753.4 4 STATE OF COLORADO ) 1111 11/ /11 11111/11/ ihIIiihII 1 1111 /1/11111! P 3 ef 6D 5 015 76.00 00 ) ss. COUNTY OF PITKIN ) The foregoing instnunent was acknowledged before me this / L day of February, 2007, by Helen Kalin Klanderud, as President of the City of Aspen Public Facilities Authority. WITNESS MY HAND AND OFFICIAL SEAL, the day and year above written. [NOTARIAL SEAL] 8R.q�ti. al4 V ° P2 -6 Jel/c LL ot Q�p "Any .otary My commission expires: s9 i (7-6 1 zct us "1, O COI0 < M y Corami7iion ExNes09125 • 4817 -0St7 - 07534 5 534582 } 1111 STATE OF COLORADO ) II III II II 029 15 of 01549! JRNICE K VOS CAUDILL PITKIN COUNTY CO R 75.00 D 0.00 SS. COUNTY OF PITKIN ) The forego'ng instn lent was acknowledged before me this f$ day of February, 2007, by, , as ____ of the Isis Retail Group, LLC. WITNESS MY HAND AND OFFICIAL SEAL, the day and year above written. [NOTARIAL SEAL] ll�� ( ( Notary t My commission expires: �.' .ubliq VINCEiJ'I .+ Ydy Commission Expires 6/25/2067 a 3 601 E. Hopkins f . Aspen, CO 81611 y �•, 4817 -0817- 0753.4 6