HomeMy WebLinkAboutresolution.council.099-06
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RESOLUTION NO. ~q
Series of 2006
A RESOLUTION OF THE CITY OF ASPEN, COLORADO, AUTHORIZING THE CITY
MANAGER AND MAYOR TO EXECUTE, ON BEHALF OF THE CITY OF ASPEN, A
MEMORANDUM OF UNDERSTANDING WITH THE ISIS PROPERTY GROUP LLC, AND
INDEPENDENT FILMS, INC. RELATING TO THE PURCHASE REDEVELOPMENT AND
OPERATION OF THE ISIS MOVIE THEATER BUILDING.
WHEREAS, there has been submitted to the City Council a proposed Memorandum of
Understanding between the City of Aspen, Isis Property Group, LLC, and Independent Films,
Inc., (commonly known as Aspen FilmFest), relating to the purchase, redevelopment and
operation of the Isis Movie Theater Building; and
WHEREAS, after due deliberation and consideration the City Council has determined that
it is in the best interest of the City of Aspen to approve said Memorandum of Understanding and
authorizes the City Manager and Mayor to execute same on behalf of the City of Aspen.
NOW, WHEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF ASPEN, COLORADO, that the City Manager and Mayor are hereby authorized to execute
on behalf of the City of Aspen the Memorandum of Understanding appended hereto as Exhibit
A.
Dated:~) or;
,2006.
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 ~ ~'i5, 2006.
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JPW- saved: 11!21/2006-249-G:\john\word\resos\Isis-MOU.doc
MEMORANDUM OF UNDERSTANDING
THIS MEMORANDUM OF UNDERSTANDING made as of
_, 2006 (this "Memorandum") among THE CITY OF ASPEN, a Colorado municipal
corporation (the "City"); the INDEPENDENT FILMS, INC., a Colorado nonprofit
corporation d/b/a Aspen Filmfest ("Aspen Film"); and ISIS PROPERTY GROUP LLC, a
Colorado limited liability company ("Isis Group");
W-I- T -N-E-S-S-E- T -H:
WHEREAS, the Isis Theater Condominium (the "Condominium") is a commercial
and residential condominium located in the Isis Theater building (the "Building") at 406
East Hopkins, Aspen Colorado; and
WHEREAS, the Condominium comprises four condominium units, including one
(1) free-market housing unit (the "Free Market Unit"), two (2) affordable housing units
(the "AH Units") and one commercial unit (The "Commercial Unir); and
WHEREAS, the Commercial Unit comprises two (2) street-level movie theaters
(the "Main Theaters"), three (3) lower-level movie theaters (the "Lower Theaters", and
collectively with the Main Theaters, the "Theaters") and appurtenant lobby, elevator,
concession, restroom, projection and mechanical room spaces; and
WHEREAS, AspenFilm is a nonprofit organization, qualified under Section
501(c)(3) of the Internal Revenue Code, which has operated in Aspen for nearly thirty
(30) years and which brings artistic, educational and performance programs to the
Roaring Fork Valley; and
WHEREAS, Isis Group is a for-profit group of local real estate investors and
contractors; and
WHEREAS, Aspen Film, Isis Group, and the City of Aspen believe that the
Theaters, which are the sole remaining commercial theaters in the City of Aspen, are a
vital public amenity, and AspenFilm, Isis Group, and the City of Aspen are interested in
assuring the continued operation of at least some of the Theaters; and
WHEREAS, AspenFilm has substantial experience in presenting film programs
in the City of Aspen and in the Roaring Fork Valley, including first run, documentary,
foreign, shorts and children's programs; and
WHEREAS, in addition to its educational seminars and programs in area
schools, AspenFilm presents four main film programs each year, including Aspen
Filmfest, Aspen Shortsfest, Academy Screenings and Summerfilms; and
WHEREAS, AspenFilm is in need of a permanent home for its presentations;
and
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Memorandum of Understanding
Page 2
WHEREAS, the City Council of the City of Aspen has determined that it is in the
best interests of the citizens and guests of Aspen to participate in the public/private
collaboration as set forth herein; and
WHEREAS, the City and AspenFilm and Isis Group have agreed in principle on a
plan (the "Project") pursuant to which:
(a) The City would, through a nonprofit corporation identified by the
City (the "Authority"), purchase the Commercial Unit and the AH
Units (collectively, the "Property") and the Authority would execute
a lease purchase agreement with the City for the Property (the
"Authority-City Lease");
(b) The Authority would issue Certificates of Participation ("COP") to
public investors in order to finance the purchase, renovation and
upgrade of the Theaters and other portions of the Property;
(c) The Commercial Unit would be re-condominiumized so that the
westerly theater on the main level ("West Main Theater") would
become a separate condominium unit and the Lobby (the "Lobby")
would be reconfigured, as shown on Exhibit A;
(d) The approximately 576 sq. ft. exterior open space (the "Notch"), in
the southeast comer of the Building, would be constructed as a
two level structure and would become a new entrance to the
remaining Theaters and for the AH Units and the Free Market
Unit, and its second floor would also be used as an amenity to the
theater operations of AspenFilm;
(e) The Notch would be identified in the re-condominiumization of the
Building as "Commercial Unit 3.-
(f) The City would approve and permit through its usual land use
approval process the conversion of the West Main Theater to
retail use, the Lobby reconfiguration and the construction of the
Notch, as set forth herein;
(g) The City would sublease to Isis Group the AH Units and that
portion of the reconfigured Commercial Unit comprising the West
Main Theater and part of the Lobby ("Commercial Unit 1"), as
shown in Exhibit A:
(h) The City would sublease to AspenFilm the remaining Main
Theater and all of the Lower Theaters ("Commercial Unit 2") along
with the Notch;
(i) Isis Group and AspenFilm would be responsible for making
monthly lease payments to the City, as set forth herein, in an
Memorandum of Understanding
Page 3
amount equal to the rent and other amounts payable by the City
under the Authority-City lease;
(j) The City would pay the rent and other amounts payable under the
Authority-City lease, provided that the City's annual payment and
other financial obligations shall be subject to annual appropriation
by the City Council;
(k) Isis Group would act as property manager for the Property under
a separate management agreement, for a period of one year
providing for a market rate management fee payable by Isis
Group's retail subtenant and by a pass-through payment to Isis
Group of any management fee payable by AspenFilm's
commercial theater operator subtenant, but AspenFilm would (i)
pay no out-of-pocket management fee, (ii) pay no management
fee as to the Notch. Said management agreement shall be
automatically extended for successive one year terms for so long
as (x) Courtney Lord shall be a member of Isis Group and Isis
Group shall own Commercial Unit 1 and (y) the COP financing
shall be outstanding on Commercial Units 2 and 3, unless
terminated for cause, ("cause" shall be deemed to be (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. In the event there is a
disagreement between Isis Group and AspenFilm concerning
whether or not cause sufficient for termination exists, upon the
request of either Isis Group or AspenFilm, City shall make said
determination; provided, however, before such termination may
occur, written notice shall be given to Isis Group setting forth the
reasons for said claim and Isis Group shall have a period of thirty
(30) days from receipt of said notice (the "Cure Period") to
undertake efforts to cure the alleged default. Not later than the
expiration of the Cure Period, Isis Group 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, the management agreement shall
terminate on the last day of the month in which the City's
determination was made.
WHEREAS, the City, AspenFilm and Isis Group wish to set forth their
understanding in principle as to the foregoing matters.
Memorandum of Understanding
Page 4
NOW, THEREFORE, the City, AspenFilm and Isis Group hereby agree as
follows:
1. Acquisition of the Commercial Unit and the AH Units.
1.1 Isis Group and CC Aspen, LLC, an Arizona limited liability company ("CCA")
which owns the Property, have entered into that certain Purchase Agreement,
dated September 15, 2006 (as amended October 6, 2006)(the "CCA Contract", a
true and complete fully-signed copy of which is attached hereto as Exhibit "B"),
for the purchase by Isis Group or assigns, from CCA, of the Commercial Unit
and the AH Units for the sum of $7,497,000.00 (the "Purchase Price").
1.2 Not later than closing under the CCA Contract (the "CCA Closing"), Isis Group
shall assign to the City or to the Authority, at the City's option, all of Isis Group's
rights to the CCA Contract and to the Earnest Money (defined in paragraph 1.6.1
below).
1.3 At the CCA Closing, the Authority shall receive from CCA (pursuant to the terms
and conditions of the CCA Contract) a deed to the Property, and the City shall
cause such deed to be recorded exempt from the City's real estate transfer tax
("REIT) and Wheeler Real Estate Transfer Tax ("WHREIT).
1.4 Prior to or simultaneously with the delivery of payment of the purchase price in
connection with the CCA Closing, the City shall use its best efforts to cause the
Authority to issue Certificates of Participation ("COP") as described at Section 2,
below. The proceeds from the COP shall be delivered to Pitkin County Title, Inc.,
which shall act as closing and escrow agent for the purchase of the Property.
1.5 At the CCA Closing, Aspen Film shall cause to be delivered to Pitkin County Title,
Inc., the sum of Three Hundred Fifty Thousand ($350,000.00) Dollars as its cash
contribution towards the purchase of the Property.
1.6 At the CCA Closing, Isis Group shall cause to be delivered to Pitkin County Title,
Inc., the sum of Eight Hundred Fifty Thousand ($850,000.00) Dollars as its cash
contribution towards the purchase of the Property. Isis Group shall receive credit
against this obligation for any earnest money paid by Isis Group to Pitkin County
Title prior to closing. Of the $850,000.00 referenced in this section and in section
1.7 as the Isis Group Cash, it is understood that $50,000.00 shall be contributed
by Isis Group to AspenFilm or City as a charitable contribution; and $200,000.00
shall be donated by one or more third parties.
1.7 At the CCA Closing, the Authority shall, out of the COP proceeds and cash from
Isis Group and AspenFilm, make the following payments or establish the
following accounts for Mure expenditures:
Proi&e:t Costs: Amount:
a. Purchase $7,497,000
b. COP Issuance Costs 400,000
c. Housing Mitigation
d. Retail Construction
e. Leasing Commission
f. Architectural Fees
g. Legal Fees
h. Planning Fees
i. Debt Service While under construction
j. Notch Construction
k. Contingency
Total:
Sources:
Isis Group Cash
Aspen Film Cash
COP Proceeds
Total:
Memorandum of Understanding
Page 5
323,000
550,000
180,000
25,000
50,000
15,000
300,000
700,000
50,000
$10,090,000
$850,000
350,000
8,890,000
$10,090,000
1.8 At the CCA Closing, the City shall use its best efforts to cause the Authority to
provide the funding for Closing as set forth herein and to consummate this
transaction. Should the Authority fail to provide such funding, Isis Group may at
its option proceed to Closing under the CCA Contract or terminate the CCA
Contract pursuant to its terms.
1.8.1 Should the Authority fail to provide the COP funding, or should the
Authority or the City fail to provide funding from any other source, necessary to
close the transaction at the CCA Closing (February 16, 2007, or as extended by
consent of the parties), and Isis Group elects to terminate the CCA Contract by
the CCA Closing (February 16, 2007, or as extended by consent of the parties),
the City shall reimburse the Isis Group the amount of Three Hundred Thousand
Dollars ($300,000.00) as, and for all of its costs, expenses and profeSSional
fees arising from and relating to this transaction and this Agreement shall
terminate, subject to the following: notwithstanding the termination of this MOU
due to City's failure to provide the funding, if Isis Group acquires the Isis
Building, the provisions of Paragraphs 6.1 and 7 hereinafter, shall survive such
termination and be honored by City.
1.8.2 Should the Authority fail to provide the COP funding, or should the
Authority or the City fail to provide funding from any other source, necessary to
close the transaction at the CCA Closing, and Isis Group elects to proceed to
close on the CCA Contract (February 16, 2007, or as extended by consent of the
parties), the City shall reimburse the Isis Group the amount of any additional
costs, expenses and professional fees resulting therefrom, including the
difference in the cost of and interest on the bridge and/or substitute financing
obtained by Isis Group to complete the CCA Closing; provided that the amount
does not exceed twenty-five thousand dollars ($25,000.00).
Memorandum of Understanding
Page 6
1.9 Should Isis Group fail to close for any reason, City shall have the option to close
on the CCA Contract or cause the Authority to do so and if City closes, City shall
reimburse to Isis Group all its earnest money deposits paid in connection with
the CCA Contract and this Agreement.
1.10 Isis Group covenants that it shall be prepared to proceed to closing and that all
conditions precedent to closing have been performed by the appropriate parties.
In the event that the closing needs to be continued, for any reason, Isis Group
shall take all steps necessary to obtain a continuance of the closing from CCA
Aspen, LLC.
1.11 Isis Group shall, prior to the closing of the purchase from CCA, have the right to
assign its interests in this Agreement and any leases or other documents
executed in connection thereto; provided, however, that, with the exception of
the Isis Retail Group, LLC (Courtney Lord, Phil Holstein and John Olson, as
partners) and the current theater tenant/operator as a partner for which approval
is hereby granted, the City has the right to approve the assignment in writing
which approval may be granted or withheld at City's sole discretion. Isis Group
shall provide a copy of the document of assignment, which shall include the
acceptance by said entity of the rights and obligations so assigned and its
affirmative covenant to perform the provisions of the agreements assigned.
2. Certificate of Participation Financina.
2.1 The City shall cause the Authority to issue the COP in an amount as set forth at
Section 1.7, above, through the City's underwriter Stifel, Nicholaus & Co.
("Stifel"). The COP shall be 3D-year, self-amortizing obligations, and the City
shall endeavor to market the COP so that they shall bear a coupon rate of
approximately 6% per annum, 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 shall
contain such optional defeasance provisions as are customary for municipal
finance obligations.
2.1 The Certificates of Participation shall contain the following, or similar, language:
This certificate is not an obligation of the City of Aspen, and the City of
Aspen is not obligated by the lease to make any payments in any fiscal
year beyond the fiscal year for which funds are appropriated for the
payment thereof or to make payments from any funds of the City of
Aspen other than funds appropriated for the payment of current
expenditures. All payment obligations of the City of Aspen under the
lease, including, without limitation, the City of Aspen's obligation to pay
rentals, are from year to year only and do not constitute multiple-fiscal
year direct or indirect debt or other financial obligation of the City of
Aspen. The lease is subject to annual renewal or cancellation at the
option of the City of Aspen and will be terminated upon the occurrence of
an event of nonappropriation. In such event, all payments from the City of
Memorandum of Understanding
Page 7
Aspen under the lease will terminate, and this certificate will be payable
from such moneys, if any, as may be held by the trustee under the
indenture and any moneys made available from liquidation of the Building
or Property in whole or in part. Upon the occurrence of an event of
nonappropriation or an event of default under the lease, there is no
assurance of any payment of this certificate.
2.2 The City shall be responsible for coordinating with Stifel such disclosures
regarding the City, the Authority, the Property and these transactions as counsel
to the City and counsel to Stifel shall deem appropriate, and while AspenFilm
and Isis Group shall have the right and opportunity to review and comment on
such disclosures and the COP documents generally, neither AspenFilm nor Isis
Group shall be legally responsible for such disclosures or any deficiencies
therein.
2.3 The base rent payable by AspenFilm and Isis Group under their respective
subleases shall be equal to the base rent payable by the City under the
Authority-City Lease, which shall be equal to the principal and interest due on the
COP. The following table sets forth the allocation of responsibility for Aspen Film
and Isis Group for the repayment of base rent payable under the Authority-City
Lease and the current estimate of the annual payments required from each of
them:
Est. Annual
Amount Repayments
3,100,000 225,147
5,790,000 415,582
8,890,000 640,729
(The AspenFilm allocation amount is referred to hereinafter as the "AspenFilm
Base Rent Allocation" and the Isis Group allocation amount is hereinafter
referred to as the "IG Base Rent Allocation")
AspenFilm
Isis Group
% Allocation
34.87
65.13
For the first five (5) years of the Base Rent Allocation payments made by
AspenFilm, the City shall reimburse AspenFilm for the payment amount
attributable to $100,000.00 of the total AspenFilm Base Rent Allocation.
Following the fifth year of the AspenFilm Base Rent Allocation, AspenFilm shall
be responSible for the full amount of the AspenFilm Base Rent Allocation.
The Authority-City Lease and the AspenFilm and Isis Group subleases shall be
triple net leases. In addition to base rent, AspenFilm and Isis Group shall be
obligated to pay their proportionate share, based on the allocations above, of the
costs of administering the COP financing.
2.4 The parties hereto understand that the financial figures set forth in this
Memorandum of Understanding are best estimates. In the event that the actual
cost of the COP issuance costs is less than the estimate as set forth in Section
1.7, above ($400,000), any such savings shall used be to reduce the AspenFilm
Base Rent Allocation and IG Base Rent Allocation in a prorated fashion
Memorandum of Understanding
Page 8
according to the total amounts of the AspenFilm Base Rent Allocation and IG
Base Rent Allocation. All other savings realized from the estimates as set forth in
Section 1.7 shall be returned to Isis Group. If savings are identified in the total
Project costs prior to closing and the issuance of COP, the amount of COP
financing and the amount of base rent payable under the Authority-City Lease
shall be reduced accordingly.
2.5 The Isis Group and AspenFilm hereby acknowledge that the Certificates of
Participation to be issued in accordance with this Memorandum of
Understanding shall not be an obligation of the City of Aspen, and the City of
Aspen shall not be obligated by any lease document to make any payments in
any fiscal year beyond the fiscal year for which funds are appropriated for the
payment thereof. All payment obligations of the City in accordance with this
Memorandum of Understanding or any other document contemplated to be
executed by the City pursuant to this Memorandum of Understanding shall be
from year to year only and shall not be constitute multiple-fiscal year direct or
indirect debt or financial obligation of the City. Any and all documents
contemplated by this Memorandum of Understanding to be executed by the City
shall be terminable upon the occurrence of an event of nonappropriation.
2.6 Stifel has brought to the attention of AspenFilm and Isis Group that neither
Aspen Film nor Isis Group would have, as subtenants of the Authority, customary
nondisturbance protections in the event of the City's default under the Authority-
City Lease. The City shall use its best efforts to arrange for such protections in
one or more auxiliary agreements satisfactory to AspenFilm and Isis Group. In
any event, the COP documents shall provide that in the event of the City's
default under the Authority Lease, by nonappropriation for any reason:
2.6.1 During the first ten years Aspen Film and Isis Group, shall have the right
to purchase their respective individual Commercial Units for an amount
equal to the sum of the Aspen Film Base Rent Allocation and IG Base
Rent Allocation, respectively, for the then-outstanding principal amount of
their respective portions of the COP, all accrued and unpaid interest on
the COP and all costs of paying off the COP, and regardless of any
preclusion against prepayment or redemption, within ninety (90) days of
notice from the COP indenture trustee stating that an event of default by
the City has occurred under the Authority-City Lease; provided that both
parties exercise their right to purchase at the same time or, if either Isis
Group or Aspen Film does not exercise its right to purchase, the
exercising-party shall have the right to purchase the non-exercising
party's Unites) by giving notice at the same time that the exercising-party
exercises its right to purchase its Unite s) that said exercising-party wishes
to exercise its right to acquire the non-exercising party's Unites).
2.7 COP proceeds that are not expensed at the CCA closing, including, but not
limited to the amount allocated to "Notch Construction," shall be held by the
trustee for the COP financing and deposited in one or more segregated accounts
Memorandum of Understanding
Page 9
and invested in accordance with the City's approved investment policies. All of
such funds shall be available to the parties, as required, on a next-<lay basis. All
interest income shall be attributed to and made available to the remaining Project
costs except for interest income on the amount of the COP proceeds attributable
to the Notch construction (as the same may be reduced by expenditure on the
Notch) which shall be attributed to and applied against AspenFilm's obligations
on the COP.
2.8 City shall account for all COP proceeds, cash contributions, and all Project cost
disbursements. City shall prepare periodic financial reports, no less than monthly
during the period of construction of the retail space and Notch (if constructed at
the same time). All requests for disbursements from Project funds shall be
evidenced by an invoice. Isis Group and AspenFilm shall have reasonable
access to City accounting records during normal business hours.
3. Recondominimization of the Commercial Unit and the Notch.
3.1 The parties hereto understand that the Building and Property need to be
recondominiumized before the CCA closing and issuance of the COP (the
"Recondominiumization"). Isis Group and AspenFilm shall submit to the City
applications to recondominiumize, through an administrative proceeding, the
Commercial Unit so that:
. The West Main Theater and a portion of the Lobby becomes Commercial
Unit 1;
. The Remaining Theaters become Commercial Unit 2; and
. The Notch becomes Commercial Unit 3.
3.2 The Isis Group, with the advice and consent of the City and AspenFilm, shall be
responsible for preparing and processing the recondominiumization application.
All additional square footage created, including mezzanine space and non-
common-area Notch space, shall be included in recalculation of prorata shares
under the condominium documents. The costs of preparing and processing the
requisite land use application shall be paid by the Authority from COP Proceeds.
3.3 The Isis Group shall pay any and all costs, anticipated or unanticipated, of any
kind or nature including without limitation the costs of recondominiumization), of
(a) converting the West Main Theater to retail space, (b) reconfiguring the
theater lobby as a result of (a) above (c) paying to the theater operator any sums
owed to such operator in connection with the buyout of such operator's right to
use the West Main Theater, and (d) any rent abatement or other concessions,
fees, costs, or sums demanded by such theater operator in connection with any
construction or conversion activities pursued by Isis Group. Isis Group shall
indemnify, defend and hold City, the Authority, and AspenFilm harmless against
any and all claims, causes, liens, damages and costs (including without limitation
Memorandum of Understanding
Page 10
attorney's fees and costs) in connection with such buyout, conversion and
construction. Until such time as the redevelopment of the West Main Theater
occurs and the rent payable for the existing theaters is reduced by 30% pursuant
to the theater operator's existing lease by reason of Isis Group's notice to the
theater operator that Isis Group is buying out the West Main Theater Aspen Film
and Isis Group shall apportion all rent payable by such theater operator so that
Isis Group receives thirty (30%) percent of all rents and triple net charges
payable pursuant to such existing lease.
4. Subleases to Isis GroUD and AsoenFilm.
4.1 Commercial Unit 1 and AH Units. Not later than the CCA Closing, the City and
Isis Group shall enter into a sublease (the "Isis Group Sublease") for Commercial
Unit 1 and the AH Units. Such Sublease shall provide, among other things, that:
4.1.1 Monthly fixed rent under the Isis Group Sublease shall be an amount
equal to the one-sixth of the semi-annual debt service payable on the IG
Base Rent Allocation. The term of the sublease shall be thirty (30) years.
4.1.2 Monthly fixed rent under the Isis Group Sublease shall commence as of
the date of the COP financing closing, subject to the provisions contained
herein.
4.1.3 In addition to monthly fixed rent, Isis Group shall pay all operating costs,
its prorated share of assessments for maintenance costs for the building,
real estate taxes and casualty and liability insurance premiums, repair or
replacement costs in the event insurance proceeds are insufficient and
COP administrative costs for the AH Units and Commercial Unit 1. Under
no circumstance shall the City or the Authority be liable or responsible for
any of 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.
4.1.4 In addition to monthly fixed rent as set forth at Section 4.1.1, above, and
the operating costs described in Section 4.1.3, above, Isis Group shall
monthly pay the City $250.00 as and for a Capital Reserve Fund as
described below at Section 9.
4.1.5 Commercial Unit 1 shall be deed restricted to prohibit restaurant uses,
unless appropriate mitigation is paid to the City pursuant to the City Land
Use Code in effect at the time of requested conversion to that use; and,
provided further, that the City Council, in its sole discretion approves such
a change in use.
Memorandum of Understanding
Page 11
4.1.6 The City shall enter into with any under-subtenant of Isis Group, upon Isis
Group's request, a reasonable nondisturbance and attornment
agreement providing that in the event that Isis Group defaults under the
Isis Group Sublease (after notice and Isis Group's failure to cure) and Isis
Group forfeits, to the City, Isis Group's rights under the Isis Group
Sublease, then the City shall recognize such under-subtenant as a direct
obligor to the City and the City shall not disturb such under-subtenant's
rights under its under-sublease for so long as such under-subtenant
timely performs all of its obligations thereunder; provided, however, that
any such nondisturbance agreement shall be subject to provisions similar
to those set forth in section 2.6 hereof.
4.1.7 Isis Group shall assign to the City all rents from any under-subleases, up
to the amounts due under the sublease between Isis Group and City, but
Isis Group shall be entitled to collect such rents for so long as Isis Group
timely pays its monthly sublease payments to the City.
4.1.8 The Isis Group Sublease shall provide that Isis Group shall use
commercially reasonable efforts to sublease Commercial Unit 1 to one or
more tenants that are deemed "mid-level" retail uses. The City and Isis
Group shall include as part of the Isis Group Sublease, a reasonable
definition of "mid-level retail tenant" for this purpose.
4.1.9 Isis Group shall have the right (provided that Isis Group is not in default,
after notice and the expiration of any applicable cure period, under the
Isis Group Sublease) to purchase the AH Units and Commercial Unit 1
,(a) at any time after ten (10) years from the date of COP issuance, for an
amount equal to the then-outstanding principal balance of the IG Base
Rent Allocation and any accrued and unpaid interest thereon; and (b)
provided that AspenFilm exercises its right to purchase Commercial Units
2 and 3 concurrently, at any time prior to ten (10) years by defeasing the
IG Base Rent Allocation with United States Treasury securities in
amounts and maturities sufficient to service the IG Base Rent through ten
(10) years from the date of COP issuance and to retire the IG Base Rent
Allocation as of the first business day of the eleventh (11th) year. It is
understood that Isis Group's rights as to the retirement of the IG 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
expiration of the term of the sublease, upon such expiration, Isis Group
shall have the right to purchase Commercial Unit 1 for ten ($10.00)
dollars.
4.1.10 Any fee simple transfer of Commercial Unit 1 or either of the AH Units by
the City or the Authority to Isis Group 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.
Memorandum of Understanding
Page 12
4.1.11 The Isis Sublease shall provide and be subject to reasonable assignment
rights for the sub-tenants.
4.1.12 In the event of any default by or transfer (in what ever form) of its fee
simple interest in Commercial Unit 1 by Isis Group, or in the event of the
transfer of any controlling or majority membership interest in Isis Group
(in one or more transactions) to persons or entities who were not
members of Isis Group at the time of its execution of the Sublease,
AspenFilm shall have a first right to negotiate the terms of acquisition of
such fee simple interest or membership interest by AspenFilm. The
terms of said rights shall be set forth in the lease between AspenFilm and
the City.
4.2 Commercial Unit 2 and the Notch. Not later than the CCA Closing, the City
and AspenFilm shall enter into a sublease (the "AspenFilm Sublease") for
Commercial Unit 2 and the Notch. The AspenFilm Sublease shall provide,
among other things, that:
4.2.1 Monthly fixed rent under the AspenFilm Sublease shall be an amount
equal to one-sixth of the semi-annual debt service payable on the
Aspen Film Base Rent Allocation. The term of the AspenFilm Sublease
shall be thirty (30) years.
4.2.2 Monthly fixed rent under the AspenFilm Sublease shall commence as of
the date of the COP financing closing.
4.2.3 In addition to monthly fixed rent, AspenFilm shall pay all operating costs,
its prorated share of assessments for maintenance costs for the building,
real estate taxes (subject to partial or complete abatement as provided
below) and casualty and liability insurance premiums, repair or
replacement costs in the event insurance proceeds are insufficient and
COP administrative costs for Commercial Unit 2 and Commercial Unit 3.
Under no circumstance shall the City or the Authority be liable or
responsible for any of such operating costs, real estate taxes or casualty
or liability insurance premiums or for any other costs of owning or
operating Commercial Unit 2 and Commercial Unit 3.
4.2.4 In addition to monthly fixed rent as set forth at Section 4.2.1, above, and
the operating costs described in Section 4.2.3, above, AspenFilm shall
monthly pay the City $150.00 as and for a Capital Reserve Fund as
described below at Section 9.
4.2.5 In the event of AspenFilm's default under the AspenFilm Sublease (after
notice and AspenFilm's failure to cure such default), and in addition to
AspenFilm's forfeiture of its subleasehold interest in Commercial Unit 2
and Commercial Unit 3, AspenFilm shall be liable for an amount not to
exceed six (6) months' fixed rent under the AspenFilm sublease.
Memorandum of Understanding
Page 13
4.2.6 AspenFilm shall have the right to assign its rights under the AspenFilm
sublease (a) without the City's consent, to any other nonprofit entity which
succeeds generally to the mission and the practices of AspenFilm, and
(b) with the City's consent, which shall not be unreasonably withheld,
conditioned or delayed, to any other person or entity.
4.2.7 Commercial Unit 2 and Commercial Unit 3 shall be utilized only for the
purpose of operating movie theaters, subject, however, to occasional use
for live performances, community events, meeting rooms, speeches,
auxiliary uses for AspenFilm presentations and other artistic, educational,
nonprofit or community purposes. The specific allowed uses for
Commercial Unit 3 shall be determined after it is constructed, but shall
include the above stated uses and, in addition, may be used for a cafe
bar or other similar use.
4.2.8 AspenFilm shall operate, or shall cause to be operated, the theaters in
Commercial Unit 2 reasonably continuously and during such times and
hours as a commercial or nonprofit theater would operate, subject,
however, to closures for refurbishing, repair, equipment servicing,
closures caused by casualty or condemnation or by the bankruptcy, or
inSOlvency of or failure to operate by an operating under-subtenant.
AspenFilm's failure to operate for six (6) consecutive months shall be
deemed an event of default subject, however, to notice of such default
and AspenFilm's failure to cure such default within six (6) additional
consecutive months.
4.2.9 The City shall enter into with any under-subtenant of AspenFilm, upon
AspenFilm's request or the request of the under-subtenant of AspenFilm,
a reasonable nondisturbance and attornment agreement providing that in
the event that AspenFilm defaults under the AspenFilm Sublease (after
notice and AspenFilm's failure to cure) and AspenFilm forfeits, to the City,
AspenFilm's rights under the AspenFilm Sublease, then the City shall
recognize such under-subtenant as a direct obligor to the City and the
City shall not disturb such under-subtenant's rights under its under-
sublease for so long as such under-subtenant timely performs all of its
obligations thereunder; provided, however, that any such nondisturbance
agreement shall be subject to provisions similar to those set forth in
Section 2.6 hereof.
4.2.10 AspenFilm shall assign to the City all rents from any under-subleases, but
AspenFilm shall be entitled to collect such rents for so long as Aspen Film
timely pays its monthly sublease payments to the City.
4.2.11 The City shall from time to time, and at Aspen Film's request, cooperate
with Aspen Film in negotiating with the Pitkin County Assessor a partial or
complete real estate tax abatement for Commercial Unit 2 and
Commercial Unit 3. It is understood that (a) partial real estate tax
Memorandum of Understanding
Page 14
abatement shall be grounded in usage rights granted to AspenFilm for its
nonprofit activities by the commercial under-subtenant in exchange for
rent reductions granted under such commercial under-subtenant's under-
sublease with AspenFilm, and that (b) complete real estate tax
abatement shall be appropriate while AspenFilm operates Commercial
Unit 2 and Commercial Unit 3 solely or substantially for not-for-prorrt
purposes.
4.2.12 AspenFilm shall have the right (provided that AspenFilm is not in default,
after notice and the expiration of any applicable cure period. under the
AspenFilm Sublease) to purchase Commercial Units 2 and Commercial
Unit 3,(a) at any time after ten (10) years from the date of COP issuance,
for an amount equal to the then-outstanding principal balance of the
AspenFilm Base Rent Allocation and any accrued and unpaid interest
thereon; and (b) provided that the Isis Group concurrently exercises its
right to purchase Commercial Unit 1, at any time prior to ten (10) years by
defeasing the Aspen Film Base Rent Allocation with United States
Treasury securities in amounts and maturities sufficient to service the
AspenFilm Base Rent Allocation through ten (10) years and to retire the
Aspen Film Base Rent Allocation as of the first business day of the
eleventh (11th) year. The right to purchase as described herein shall be
conditioned upon the purchase of both Commercial Unit 2 and
Commercial Unit 3 at the same time. It is understood that AspenFilm's
rights as to the retirement of the IG Base Rent Allocation and as to
obtaining title to Commercial Units 2 and Commercial Unit 3 shall be
analogous to its rights under a "contract for deed" purchase of real
estate.
4.2.13 Any fee simple transfer of Commercial Unit 2 and Commercial Unit 3 by
the City or the Authority to AspenFilm shall be exempt from RETT,
WHRETT and any other City-imposed real estate transfer tax in effect at
the time of such transfer.
4.2.14 In the event of any default by or transfer (in what ever form), to any for-
profit entity, of its leasehold or fee simple interest in Commercial Unit 2 or
Commercial Unit 3 by AspenFilm, Isis Group shall have a first right to
negotiate the terms of its acquisition by Isis Group. The terms of said
rights shall be set forth in the lease between Isis Group and the City.
5. Deed Restrictions: Perpetual City Fractional Ownership of AH Units.
Contemporaneously with the filing of the Recondominimization plat (the
. Amended Plat") and the amended Condominium Declaration of the Isis Building
Condominium (the "Declaration Amendment"), the City and either Isis Group or
Aspen Film (as the context may require) shall record, in the real estate records of
Pitkin County, covenants containing perpetual restrictions as provided in
Sections 5.1 through 5.5.
Memorandum of Understanding
Page 15
5.1 Commercial Unit 1 shall be deed restricted (the "Retail Space Deed Restriction")
to retail uses, and restaurant uses therein shall be specifically prohibited, unless
the required affordable housing mitigation is paid as required by City regulations
as they may exist at that time; and, provided further that the City Council, in its
sole discretion, consents to such a change.
5.2 Commercial Unit 2 and Commercial Unit 3 shall be deed restricted (the "Theater
Deed Restriction") to those uses identified in Section 4.2.7, above; subject,
however, to other uses which may be necessary or appropriate in the event of
technological, sociological or economic changes rendering theater use obsolete
or impracticable. In the event that AspenFilm determines that the deed restriction
for Commercial Unit 2 or Commercial unit 3 needs to be amended to permit uses
not originally contemplated (theater, performance, artistic, educational, and
community uses), it shall so notify the Aspen City Council and the Aspen City
Council shall, in its sole discretion, approve or deny any amendments to the
deed restrictions on the uses permitted for Commercial Unit 2 or Commercial
Unit 3.
5.3 Aspen Film 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 Housing Office 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 Housing Office standards,
for its employees. Isis Group shall have the third right to select a tenant who will
lease an AH Unit subject to Housing Office standards, for its employees.
AspenFilm and City shall both be given notice by Isis Group at the time Isis
Group 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 Isis Group within said 30 day period. Isis Group 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 Isis Group's (as
the landlord under the leases for the AH Units) ability to deliver the AH Unit in the
event of difficulties which may be encountered with the existing tenant. The City
shall be responsible for amending the current deed restrictions for the AH Unit.
5.4 Upon the transfer by the Authority or the City of fee simple title, to Isis Group or
its successor, to the AH Units, such transfer shall be subject to a conveyance by
the City or the Authority to the AspenlPitkin County Housing Authority, of a % of
1 % undivided ownership interest in each of the AH Units.
5.5 Any further development on the Building's roof shall be prohibited through a
recorded deed restriction, unless the consent of the City is obtained. The City
Council of the City shall have sole discretion in approving or denying any
amendments to the deed restriction. For the purpose of this Section 5.5, the
"roof" shall mean the plane of the Building on which the Free Market Unit, the AH
Units, decking and mechanical elements (as well as any replacement therefore)
are now located.
Memorandum of Understanding
Page 16
5.6 The deed restrictions for Commercial Units 1, 2, and 3 shall contain a prohibition
from changing the name of the Building from its current name; to wit: "Isis". The
deed restriction for Commercial Units 2 and 3 shall contain language prohibiting
AspenFilm from selling or granting naming rights to any portion of Commercial
Units 2 or 3, including, but not limited to the interior theaters without the consent
of the City Council. In granting or denying its consent to such naming rights, the
City Council shall take into consideration the reasonable needs of Aspen Film,
but shall have absolute discretion in its decision.
6. EmDlovee Housina Mitiaation.
6.1 Isis Group shall pay to the City, from amounts received by it upon issuance of
the COP, a monetary sum in full satisfaction of the City's employee housing
mitigation requirements, determined in accordance with the City's land use code,
in connection with the conversion of the West Main Theater to retail uses. Such
cost shall be paid in full when Isis Group obtains its building permit for such
conversion.
6.2 The parties hereto believe the Notch construction to be an essential public facility
under the City's land use code and therefore exempt from the City's employee
housing mitigation requirements. The parties acknowledge, however, that the
determination as to the character of the Notch is within the Aspen City Council's
quasi-judicial authority and shall be made in the normal course of a land use
application.
7. Community DeveloDment Office PrioritY Consideration and ADDrovals. The
City acknowledges that time is of the essence as to the Recondominiumization, the
conversion of the West Main Theater to retail space, the reconfiguration of the Lobby
and the construction of the Notch. Accordingly, the City agrees that all plans and
submissions of Isis Group or Isis Group and AspenFilm shall be given first 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
customary rule of "first in time". Should the land use or building permit approval process
for the proposed improvements extend beyond one-hundred-twenty (120) days from the
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 or one-hundred-eighty (180) days from the
submission date of a complete land use application for the "Notch" addition and a
complete building permit application for the necessary physical changes for such
addition, all rents due the City on Units affected by such delay shall be abated until the
required approvals are issued by the City. The Isis Group or AspenFilm, as applicable,
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, the
lessees under the subleases shall be liable to the City only for those amounts collected
from any sub-lessee in the subject Unit at that time, and no more. Isis Group's
application for conversion of the West Main Theater shall not be deemed incomplete
Memorandum of Understanding
Page 17
due to any deficiencies in the portion of the application related to the Notch or the ticket-
sale kiosk.
8. DeveloDl1lent of the Notch SDace. Isis Group estimates that the cost of re-
developing Commercial Unit 3, the Notch, is $700,000.00 for which $450,000.00 of COP
proceeds and $250,000.00 from cash made available by Isis Group at the CCA Closing
shall be dedicated for this purpose. It is understood that the Notch shall be two story
addition to the southeast comer of the Building developed to accommodate a new
entrance to the Free Market Unit within the building, the AH Units, the uses set forth at
Section 4.2.7, above, and the new entrance to the Theaters within Commercial Unit 2.
The parties hereto agree to the following with respect to the construction of the Notch:
(a) Isis Group shall construct the Notch contemporaneously with the
redevelopment of Commercial Unit 1. The cost of constructing the Notch shall be
at a cost equal to its actual subcontractors' costs plus three and one half (3.5%)
percent.
(b) Isis Group shall be responsible for all architectural and construction
contracting and construction management of the Notch to ensure a final product
consistent with the approved plans for the Notch.
(c) Isis Group and AspenFilm shall have the right and obligation to consult
with the project architect for the design and development of the Notch and shall
promptly give their comments and feedback regarding the Notch design and on
plans for the development of the Notch. In case of an impasse among the parties
regarding acceptable Notch design, the City shall have the power to approve
final Notch design and plan. Isis Group and AspenFilm acknowledge that final
design approval and permitting for the Notch shall require approval of the City
through the standard design review process as set forth in the City Land Use
Code and applicable building codes.
(d) In the event that the cost of the Notch, including architectural,
engineering and planning fees, exceeds the budgeted amount of $700,000.00,
the parties shall come to an agreement on the allocation of the cost overruns;
provided that the City shall not be responsible for same. Any savings in the cost
of the construction of the Notch shall be returned to the parties to this
Memorandum (or third parties, if any) in the proportion that the funds are
provided by the parties (or third parties) for the construction of the Notch.
(e) The demising wall between Commercial Unit 1 and Commercial Unit 2
shall be moved easterly approximately 5 feet as shown in Exhibit C appended
hereto at the time of the redevelopment of Commercial Unit 1.
(f) AspenFilm and the tenanVoperator of the theaters shall agree on the
operation of the Notch which said agreement shall include terms and conditions
relating to common area maintenance costs; the cost of providing and
maintaining fixtures, furniture and equipment; revenue generation and expenses;
Memorandum of Understanding
Page 18
access to the first and second floor of the Notch, and lease terms. AspenFilm
hereby agrees as part of its negotiations with the current tenant/operator of the
theaters that it will ensure that the City is provided access and usage rights to
the second floor of the Notch for free at any time that the second floor of the
Notch is not being used by either AspenFilm or the current tenant/operator of the
theaters. In the event that AspenFilm and the current tenant/operator of the
theaters are unable to come to an agreement on the operation of the Notch as
described in this section, the City shall arbitrate the impasse between the parties
and shall have the power to approve a final negotiated agreement for the parties.
8.1 The parties hereto acknowledge that the construction of the Notch is
dependant upon the ability to raise private contributions of $250,000.00 towards
the total estimated cost of $700,000.00; obtaining approval for the creation of the
Notch from the other owner of a condominium unit in the Isis Building; and, an
agreement between Isis Group and Aspen Film on the design, construction,
operation, and allocation for any construction cost overruns . The parties hereto
further acknowledge that pledges for the full amount of $250,000.00 have not
been received as of the date of this Memorandum of Understanding.
Accordingly, notwithstanding the previous provisions of this Memorandum of
Understanding that contemplate the construction of the Notch contemporaneous
with the redevelopment of Commercial Unit 1, the parties further agree to the
following provisions in the event that City determines on or before December 15,
2006, that the Notch can not be built because (a) the private contributions have
not been made or pledged to the satisfaction of the City; (b) the parties are
unable to agree on the design, construction, operation, or allocation for any
construction cost overruns or savings of the Notch; (c) the other condominium
unit owner has not consented to the creation of the Notch as a condominium
unit; or (d) any other reason determined by the City:
(a) The amount to be delivered by Isis Group at the CCA Closing
pursuant to Section 1.7, above, shall be $600,000.00;
(b) The amount of the COP proceeds identified in Sections 1.7 and
2.3 above shall be reduced by $100,000.00 to reflect a similar reduction
in the Aspen Film Base Rent Allocation;
(c) The City's obligation to reimburse AspenFilm for the first five (5)
years of the amount attributable to $100,000.00 of the total AspenFilm
Base Rent Allocation referenced at Section 2.3, above, is extinguished.
(d) The parties shall proceed with the redevelopment of Commercial
Unit 1 as contemplated and set forth in that certain Lease between The
Isis, LLC and Rocky Mountain Resort Cinemas, Inc., dated May 28, 2002;
and, specifically, Exhibit G, appended thereto.
9. Capital Reserve Fund. The City shall establish a Capital Reserve Fund to be
funded by monthly payments made by Isis Group in accordance with Section 4.1.4 and
Memorandum of Understanding
Page 19
Aspen Film in accordance with Section 4.2.4. Such reserve fund shall be in the name of
the City until such time as title to the Property and Building are conveyed to both Isis
Group and AspenFilm. Upon conveyance of Commercial Units 1,2 and 3, the balance of
the fund shall be transferred back to Isis Group and AspenFilm in the same proportion
that it was funded. 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 the City upon the request and/or advice of Aspen Film and Isis
Group 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. The City shall have no responsibility
for any capital repairs and improvements notwithstanding the fact that the City shall
maintain this Capital Reserve Fund. In the event of insufficient capital reserves, the City
may, in its sole and exclusive discretion, use other funds within its control to undertake
such necessary repairs or improvements. The City may require reimbursement from the
parties in amounts that the City, in its sole discretion, deem 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, the City shall have ultimate decision-making authority with regard
to the same.
10. Fees and Costs. All of the fees and costs of the COP financing shall be
payable from the COP proceeds. Except for the $50,000 line item for "Legal Fees" set
forth at Section 1.7, each party hereto shall pay the fees and costs of its own legal
counsel provided, however, that the fees and costs of the City's bond counsel (for the
COP financing) shall be paid out of the COP proceeds. It is understood that except for
the fees and costs to be paid out of COP proceeds, as identified in Section 1.7, above,
each party shall be responsible for any additional costs or fees not identified herein
which can be specifically related to, or associated with, Commercial Unit 1, Commercial
Unit 2 or Commercial Unit 3.
11. Non-Exclusive Memorandum: Further Assurances: Ratification. This
Memorandum is intended to set forth the material terms and conditions of the
transactions which are generally described herein, but this Memorandum is not intended
to be exhaustive in scope. It is understood that the COP documents, the Isis Group
Sublease, the AspenFilm Sublease, the Recondominiumization documents, the deed
restrictions described herein, and a variety of other instruments and agreements will
require preparation, negotiation and execution and delivery prior to the completion of the
transactions described herein. However, the City, Isis Group and AspenFilm agree to
work diligently towards the consummation of such transactions generally as provided
herein, and containing at least the terms and conditions set forth herein, and the City,
Isis Group and AspenFilm agree to perform, execute and/or deliver any and all such
further acts, deeds and assurances as may be customarily required to consummate the
transactions contemplated hereby. It is understood that the final documents referenced
herein shall require the formal approval of the AspenFilm Board of Directors, the Aspen
City Council and Isis Group.
Memorandum of Understanding
Page 20
12. Due Authorization. Except as specifically stated herein, each party hereto
represents and warrants to the other parties that the individuals executing this
Memorandum have been duly authorized by his or her respective entity to execute and
deliver this Memorandum and to agree to the understandings contained herein. The
execution of this Memorandum of Understanding by the City Manager shall be
specifically conditioned upon subsequent Aspen City Council approval of the
Memorandum of Understanding evidenced by a duly approved and executed resolution
of the Aspen City Council specifically approving a Memorandum of Understanding and
authorizing the Mayor or the City Manager to execute the same on behalf of the City of
Aspen. The parties hereto acknowledge that the City is a home rule municipal
corporation governed by its City Charter, the laws, and constitution of the State of
Colorado. If the Memorandum of Understanding, any of the documents contemplated
herein to be executed in the future, any requisite land use approvals, or any action
required by the City is challenged by a referendum or initiative, or is subjected to a
judicial court proceeding, all provisions of the Memorandum, together with the duties
and obligations of each party, shall be suspended pending the outcome of the election
or court proceeding (including any appeal.) If the referendum, initiative, or court
challenge results in making the City's performance under this Memorandum impossible
or illegal, then this Memorandum of Understanding shall be null and void and of no
further effect. If the referendum, initiative, or court challenge fails, then the parties shall
continue to be bound by all the terms and provisions of this Memorandum and any other
agreements made in connection therewith.
13. Recitals. The recitals at the beginning of this Agreement shall be deemed included
as terms and conditions of this Agreement.
14. Counteroarts: Facsimile Execution And Delivery. This Memorandum may be
executed in several counterparts, each of which shall be deemed an original, and
together such counterparts shall constitute but one and the same instrument. This
Memorandum may be executed and delivered by the electronic transmission of facsimile
signatures, each of which shall be deemed to be an original.
[SIGNATURES ON FOLLOWING PAGE]
11/15/2006 17:19
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LYNDAPALEVSKY
PAGE 01
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PAGE 1)2 j 132
Memorandum of Understanding
Page 2t
IN WITNESS WHEREOF, the City, Isis Gro~p stld A5penFllm have each caused this
Memorandum of Understanding to be executed as of the date first stated above
By:
Approved as to fOr
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John Worcester. City Attorney
By:
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Philip HoIstei, anager
BY/? Q
~ourt~rd. Manllger
INDEPENDENT FILMa. INC.
By
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hielen, ExecutIVe Director
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08:51 AM RICHARD CARTER
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3104523796
Memorandum of Underltal.mng
paGe 2t
IN WlTAlESSWHEREOF, theetly, Jail Group and Asp.nFUm I18Vll each caused this
Memorandum of Understanding to be 8xecuf8d IIlI of !he data fircl8tated lIbol/e.
THE CITY OF ASPEN, COlawx>
By:
Stel/e Barwick, City Manager (Subject to approval by the Aspen City Council)
By:
Helen Kafin KIanderud, Mayor
Attest: Kathryn Koch. CUy Clerk
Approved as 10 form:
John Worcester, City Attomey
ISIS PROPERTY GROUP LLC
By:
Philip Holltein, Manager
By~
Courtney Lord, Maneger
INDEPENDeNT I'ILMS, INC.
By:
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OeDe nkman. Secmary
By:
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By:
Laura Thielen. executive Director
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PURCHASE AGREEMENT
FOR PURCHASE OF
THE ISIS THEATER BUILDING
THIS AGREEMENT (this "Agreement") is made and entered into as of the 12'h day of
September. 2006, by and between CC Aspen, LLC, an Arizona limited liability company
("Seller"), and Isis Property Group, LLC. a Colorado limited liability company ("Buyer").
RECITALS
A. Seller is the owner of the "Property" (defined below), which consists of one (I)
commercial condominium unit and two (2) residential condominium units located in a building,
commonly known as "The Isis Theater Building", located in the City of Aspen. Pitkin County,
State of Colorado. having a street address of 406 East Hopkins Avenue.
B. Buyer desires to purchase the Property on the terms and conditions hereinafter
documented.
NOW, THEREFORE, in consideration of the mutual undertakings of the parties hereto, it
is hereby agreed as follows:
I. Purchase and Sale. Seller shall sell to Buyer. and Buyer shall purchase from
Seller, the Property on the tenns and conditions hereinafter set forth.
'-
1.1. Propertv. As used herein, the "Property" means, collectively, (a) those
certain condominium units described in Exhibit "A", together with all easements, rights-of-way
and appurtenances benetiting such units (the "Units"), (b) the undivided interest in all common
elements appurtenant to the Units (the "Appurtenant Common Elements") as set forth in that
certain Condominium Declaration for Isis Theater Condominiums recorded December'19, 1999
as Reception No. 438433 in the records of the office of the Clerk and Recorder of the County of
Pitkin. Colorado (the "Declaration"), (c) all right, title and interest of Seller in and to all tangible
personal property now or on the Closing Date located within the Units (the "Personal
Property"), (d) all right, title and interest of Seller, if any, in and to the rights of the "Declarant"
under the Declaration (the "Declarant's Rights"), and (e) all "Leases" (as hereinafter defined),
all "Service Agreements" (as hereinafter defined), the name "The Isis Theater Building" (to the
extent assignable), goveromental permits, licenses and approvals. warranties and guarantees that
Seller has received in connection with any work or services perfonned with respect to, or
equipment installed in. the Units, tenant lists, advertising material, telephone exchange numbers
and other intangible personal property related to the Units, Appurtenant Common Elements or
Personal Property (collectively, the "Intangible Property"). The Property includes the items
specified on Exhibit HD-l" and, notwithstanding the foregoing, excludes the items specified on
Exhibit "B-2".
2. Purchase Price. The purchase price (the "Purchase Price") shall be Seven
Million Four Hundred Ninety-Seven Thousand and No/IOO Dollars ($7,497.000.00)
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as follows:
.Pavment of Purchase Price. The Purchase Price shall be paid to Seller by Buyer
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3.1 Earnest Deoosit. On or prior to the date that is one (1) business day after this
Agreement has been signed by Scllcr and Buyer (thc "Mutual Execution Date"), Buyer
shall deliver Three Hundred Thousand and NoI100 Dollars ($300,000.00) (the "First
Earnest Deposit") to Pitkin County Title, Inc., at its offices at 601 East Hopkins, Aspen,
Colorado 81611, Attention: Mr. Vince Higens, which company, in its capacity as escrow
holder hereunder. is called "Escrow Agent." The First Earnest Deposit shall he
delivered to Escrow Agent by wire transfer of immediately available federal funds or in
the form of a cashier's check or certified check. Upon payment of the First Earnest
Deposit into escrow, the First Earnest Deposit shall immediately become non-refundable,
except in the event of Seller's default hereunder or other circumstances which entitle
Buyer to receive hack the Earnest Deposit under the express terms of this Agreement. On
or prior to the date that is thirty (30) days after the Mutual Execution Date, Buyer shall
deliver an additional Three Hundred Thousand and Noll 00 Dollars ($300,000.00) (the
"Second Earnest Deposit"; First and Second Earnest Deposit may he collectively
referred to herein as "Earnest Deposit") to Escrow Agent. The SCf,;olld Eanlt:~t Dt:pusil
shall be delivered to Escrow Agent by wire transfer of immediately available federal
funds or in the form of a cashier's check or certified check. Upon payment of the Second
Earnest Deposit into escrow, the Second Earncst Deposit shall immediately become
non-refundable, except in the event of Seller's default hereunder or other circumstances
which entitle Buyer to receive back the Earncst Deposit under the express terms of this
Agreement. Without further instruction by the parties to Escrow Agent, the First Earnest
Deposit shall he disbursed outsidc of escrow to Seller on or before the date two (2)
business days after the Mutual Execution Date, and the Second Earnest Deposit shall be
disburscd outside of escrow to Seller on or before the date one (I) business days after it is
received by Escrow Agent.
3.2 Closing Pavment. The Purchase Price, as adjusted by the application of the
Earnest Deposit and by the prorations and credits specified herein, shall be
paid to Escrow Agent by wire transfer of immediately available federal funds
(through the escrow described in Scction 8.1) on or before I I :00 a.m.
(Mountain Standard Time) on the Closing Date (the amount to be paid under
this Section 3.2 bcing hcrcin called the "Closing Payment").
4. Title Matters.
4.1. Aooroved Title Commitment. Buyer acknowledges having previously
receivcd, rcviewed and approved that certain Commitment for Title Insurance issued by Fidelity
National Title Insurance Company (the '"Title Company") with an effective date of May I,
2006. Case No. PCT20156F5 (the "Approved Title Commitment"). Buyer further
acknowledges that it has previously received, reviewed and approved all of the information and
documentation described in the Approved Title Commitment as requirements and exceptions
undcr Schedule B thereof. Immcdiately following thc Mutual Execution Date, Seller shall
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request that Escrow Agent deliver to Buyer an updated Commitment for Title Insurance issued
by the Title Company covering the Property (the "Updated Title Commitment").
4.2. Buver's and Seller's Title Contingencies. A condition precedent to
Buyer's obligation to purchasc the Property shall be the irrevocable and unconditional
commitment of Title Company to issue to Buyer effectivc as of the date and time thc Deed is
recorded, an AL 'I' A extended coverage owner's title insurance policy ("Owner's Policy"), or
equivalent form acceptable to Buyer, with coverage in the amount of the Purchase Price and
dated as of the date and time the Deed is recorded. insuring title to the Units to be vested of
record in Buyer, subject only to the "Permitted Exceptions", with such endorsements as Title
Company has agreed in writing prior to Closing to issue. Notwithstanding anything to the
contrary contained in this Agreement, on or before the Closing Date, Seller shall, at its sole cost
and expense, pay in full (including, but not limited to the payment of any prepayment penalty) all
sums secured by, and cause the release of, any "Seller Mortgage Liens" (which, as used herein,
means any mortgage or deed of trust liens created by Seller that encumbers the Units). Seller
may use the Purchase Price to effectuate such release.
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As used herein, "Pennitted Ext:eptiolls" means tIn; following; (1) tlu: lit;u uf any n:al
estate taxes and assessments for the "Current Tax Year" (as defined below) and subsequent
periods, provided that the same are prorated in accordance with this Agreement; (2) all matters
set fonh in the Approved Title Commitmem; (3) all exceptions set fonh or to be set forth in the
Updated Title Commitment or any amendment thereof that are not Newly Disclosed Material
Exceptions (as defined below in this Section); and (4) all exceptions set forth or to be set forth in
the Updated Title Commitment or any amendment thereof which were not sct forth in the
Approved Title Commitment and which have not been objected to by Buyer pursuant to the
provisions set forth below in Section 4.3, or, if timely and properly objected to by Buyer as
described below in Section 4.3 and not cured by Seller, such exceptions set forth or to be set
forth in the Updated Title Commitment or any amendment thereof as to which Buyer's initial
objection(s) has been waived (or deemed waived) by Buyer in accordance with the terms of
Section 4.3. In no event shall the Seller Mortgage Liens constitute Permitted Exceptions.
It shall he the right of Buyer to ohtain. at Buyer's sole cost and expe",e, "ny survey of
the Property desired by Buyer (the "Survey"). Buyer acknowledges that it confirmed with the
Title Company prior to the Mutual Execution Date that the Title Company will not require any
survey of the Property in order to issue the Owner's Policy as an extended coverage policy. If
Buyer chooses to obtain the Survey, the Survey shall he delivered to Title Company by Buyer at
least ten (10) days prior to thc Closing. The Survey shall be certified in favor of 'I' it Ie Company,
Buyer and Seller. Notwithstanding anything to the contrary contained in this Agreement, Buyer
shall not have the right to disapprove any survey exception disclosed by the Survey and included
in any amendment to the Approved Title Commitment, in the Updated Title Commitment or in
any amendment thereof, and any such survey exception shall be deemed a Penllitted Exception.
Any title endorsements requested by Buycr to thc Owncr's Policy shall be agreed upon
by Buyer and Title Company in writing prior to the Closing; provided, however, Seller agrees to
execute and deliver thc Title Company's standard form owner's declaration regarding
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mechanics' liens in order to enable Buyer to obtain an endorsement deleting the standard
exception for mechanics' liens. Except as specifically set forth in Section 4.3 below, the
agreement of the Title Company to issue any particular title endorsement requestcd by Buyer
shall not be a condition to Buyer's obligation to purchase the Property.
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4.3. Newlv Disclosed Material Exceptions. Approval by Buyer of any
additional and prcviously undisclosed exceptiones) to title which materially and adversely affect
the value or use of the Property that were not contained in the Approved Title Commitment but
appear in the 1 Jprlaterl Title Commitment or any amendment thereof (a "Newly Disclosed
Material Exception"), shall be a condition precedent to Buyer's obligation to purchase the
Property, unless the Title Company has unconditionally committed to endorse over such
exceptiones), by endorsement io form and substance reasonahly satisfactory to Buyer or unless
Title Company has unconditionally committed not to include such exceptiones) in the Owner's
Policy. Buyer's approval of any Newly Disclosed Material Exception may be granted at Buyer's
sole and absolute discretion. Unless Buyer gives written notice that it disapproves any Newly
Disclosed Material Exception(s), stating the Newly Disclosed Material Exception(s) so
disapprovcd, on or before the sooner to occur of: (a) five (5) business days after receipt of the
Upuatt:u TiLk CUIIlIllillllt:llt ur (111 amendment thereto that first discloses such Newly Disclosed
Material Exception(s) or (b) the Closing Date, Buyer shall be deemed to have approved such
Newly Disclosed Material Exception(s). If, for any reason, on or before thc Closing Date, Seller
does not cause any Newly Disclosed Material Exception which Buyer timely disapproves (to the
extent Buyer is permitted hereunder to so disapprove) to be removed at no cost or expense to
Boyer (Seller having the right but not the obligation to do so), the obligation of Seller to sell, and
Buyer to buy, the Property as herein provided shall terminate (and no party hereto shall have any
further obligations in connection hcrewith except under those provisions that expressly survive a
termination of this Agreement). Notwithstanding the foregoing to the contrary, if Buyer properly
and timely disapproves any Newly Disclosed Material Exception and Seller fails to notify Buyer
within five (5) business days thereafter that Seller will attempt to remove the same on or before
the Closing Date. Seller shall be deemed to have elected not to attempt to cause the same to be
removed. If Seller notifies Buyer or is deemcd to have elected that it will not eliminate a Newly
Disclosed Material Exception properly and timely disapproved by Buyer, Buyer shall have a
periorl of three (1) husiness days thereafter to elect in writing by written notice to Seller and
Escrow Agcnt either to terminate this Agreement and in such case receive a refund of the Earnest
Deposit (or, if applicable, the portion thereof previously deposited with Escrow Agent) or to
waive its previous disapproval of such Newly Disclosed Material Exception(s). Buyer's failure
to timely make the election described in the immediately preceding sentence shall be deemed
Buyer's election to waive its previous disapproval of the Newly Disclosed Material Exception(s)
in question. Notwithstanding tho foregoing to the contrary, Seller shall have the affinnative
obligation to remove any Newly Discloscd Material Exception evidenced by a writing that has
been signed on behalf of Seller.
5. Due Diligence Reviews. Buyer acknowledges that it (or parties with whom Buyer
is associated) has previously performed and completed due diligence examinations, reviews and
inspections of all matters pertaining to the Property, including the Property Documents (as
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defined below in this Section) and that, therefore, Buyer's obligation to purchase the Property is
not conditioned on the results of any further due diligence examinations, reviews and inspections
of the Property (including the Property Documents) which Buyer may choose to conduct prior to
the Closing (the "Additional Examinations"). Prior to the Closing and while this Agreement
remains in effect, Seller shall provide Buyer with reasonable access to the Property (subject to
the applicable provisions of the Leases) to conduct Additional Examinations.
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5.1. Review Standards. Buyer shall at all times conduct any Additional
ExaminMions it chooses to undertake in a manner so as to not unreasonably interfere with or
disturb any tenant at the Property or violate such tenant's lease, and Buyer will indemnify,
defend and hold Seller and the Property harmless from and against any loss, cost, liability.
expense (including, without limitation, reasonable attorneys' fees) and damage arising from
damage to the Property or injury to persons, caused by Buyer's Additional Examinations (the
foregoing obligation surviving any termination of this Agreement). Without limitation on the
foregoing, without the prior written consent of Seller (which consent shall not be unreasonably
withheld or delayed), in no event shall Buyer make any intrusive physical testing
(environmental, structural or otherwise) at the Property (such as soil borings, water samplings or
tltt: likt:). Notwithstanding the foregoing to the contrary: (i) Seller agrees that Buyer may
communicate and meet with any tenant of the Property without giving prior notice to Seller or
obtaining Seller's consent thereto; (ii) Seller and Buyer agree that, although Buyer shall not be
required to obtain Seller's consent to contact or meet with representatives of the City of Aspen to
discuss the Property, at least forty-eight hours prior to any such contacts or meetings Buyer will,
on a good faith efforts basis, provide Seller with written or telephonic notice of such and will
allow Seller's representatives to be present in person or telephonically during any such contacts
or meetings, provided. however, that unless Buyer's failure to do so has occurred on more than
two (2) separate occasions after which Seller has provided Buyer with notice of its failure to
comply, Buyer's failure to do so shall not be deemed a breach of this Agreement which entitles
Seller to terminate this Agreement; and (iii) Buyer agrees that all of its contacts with the City of
Aspen or any other governmental authority with jurisdiction over the Property shall be subject to
the provisions of Section 5.2. Seller shall have the right, at its option, to cause a representative
of Seller to be present at all inspections, reviews and examinations (excluding tenant interviews,
hilt including any in-person or telephonic meetings with a governmental authority) conducted
hereunder. If a representative of Seller is unable to participatc in any meeting between Buyer
and a governmental authority rclating to the Property. Buyer shall provide Seller, promptly
following the mecting, with a reasonably detailed summary of the results of such meeting,
provided, however, that Buyer's failure to do so shall not be deemed a breach of this Agreement
which entitles Seller to terminate this Agreement unless such failure continues uncured for a
period of ten (10) days following written notice by Seller to Buyer of such failure. Prior to
Closing, Buyer shall keep all information or data received or discovered in connection with any
of its inspections, reviews or examinations of the Property (whether the same occurred prior to or
after tbe Mutual Execution Date) and the terms ofthls Agreement strictly confidentiul;provided,
however, that (x) such information or data may be disclosed by Buyer to the extent required by
law and to its representatives and agents (including attorneys, accountants, planning consultants,
city staff membcrs involved in any development review process and lenders) to the extent such
representatives and agents need to know such information for thc purpose of evaluating the sale
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contemplated hereby and are instructed and agree to maintain such confidentiality and (y) the
foregoing confidentiality restriction shall not apply to any information or data that is available to
Buyer from any other source (other than by reason of a breach by Buyer of such confidentiality
restriction). Buyer acknowledges having previously received, reviewed and approved the
documents and information described on Exhibit "B-3" attached hereto (collectively, the
"Property Documents"). Buyer acknowledges that it shall have no right to rely on the accuracy
of any of the Property Documents obtained from Seller or Seller's agents, that such information
was made available solely as a courtesy and that Seller has not, and shall not be deemed to have,
made any representation~ or warranties whatsoever. express or implied. with respect to the
completeness, content or accuracy of the Property Documents or with respect to any of the
matters disclosed thereby. In the event of any termination hereunder, Buyer shall return all
documents and other materials furnished by Seller hereunder (whether furnished prior to or after
the Mutual Execution Date) and. unless such termination resulted from Seller's default, at
Seller's written request, Buyer shall promptly deliver to Seller true, accurate and complete copies
of any written reports relating to the Property prepared for or on behalf of Buyer by any third
party (whether prepared prior to or after the Mutual Execution Date), and Buyer shall promptly
deliver to Seller all written correspondence, documentation and other work product relating to
Buyt:r':-; t:ffurb (wht:ther such t;ffOl1s occurred prior to or after the Mutual Execution Date) to
obtain from the City of Aspen or any other governmental authority land use entitlement or other
entitlement approvals affecting the Property. Buyer's delivery obligations under this Section 5.1
shall survive the termination of this Agreement.
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5.2. Entitlement Efforts. If Buyer seeks to obtain any land use approvals or
other approvals from the City of Aspen or any other governmental authority with jurisdiction
over the Property with respect to the Property, including, without limitation, any rezoning,
conditional use permit, variance, plat approval, site plan approval, development plan approval,
historic building-related approval, permit, approval or variance regarding affordable housing or
employee housing requirements, open space requirements or other governmental requirements,
approval of any open space cash-in-lieu fee or other cash-in-lien fee, or any other discretionary
or non-discretionary permit, variance or approval (collectively, the "Entitlement Approvals"),
Buyer shall seek such Entitlement Approvals in accordance with the provisions of Section 5.1.
Additionally, without obtaining Seller's prior written consent (which consent may be withheld
by Seller in Seller's sole and absolute discretion), in no event whatsoever shall Buyer:
(i) request, permit or cause any Entitlement Approvals to hecome effective so as to legally bind
the Property or any current or future owner, tenant or secured lender of the Property as of any
date prior to the Closing; or (ii) seek any Entitlement Approvals that would, if granted, have the
effect of (a) obligating any current or future owner, tenant or secured lender of the Property for
payments to any governmental authority, except if under applicable ordinances, laws, rules and
regulations the payments only become due upon the implementation of the Entitlement
Approvals and such payments do not become due if the Entitlement Approvals are not
implemented, (b) requiring any current or future owner, tenant or sccured lender of the Property
to make a dedication of any portion of or interest in the Property, or (c) changing the permitted
uses of all or any portion of the Property so that the uses of the Property existing as of the Mutual
Execution Date are no longer permitted or so that any permitted uses of the Property as of the
Mutual Execution Date are no longer permitted, unless, in any of such events, the Closing has
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occurred. Seller shall execute any consents or authorizations required by the City of Aspen in
ordcr to allow Buyer to pursue Entitlement Approvals consistent with the terms of this Section
and to allow Entitlement Approvals consistent with the terms of this Section to become effective.
Notwithstanding anything to the contrary contained in this Section, in no event whatsoever shall
Buyer seek, or allow to be issued, any building permit, or takc any other action, that would allow
for the implementation or realization of any of the Entitlcment Approvals (in either case, an
"Entitlement Approval Building Permit/Implementing Action") unless the Closing has occurred.
Buyer shall indemnify, dcfcnd and hold Seller harmless from and against any and all loss, cost,
liability, expense and damage (including, without limitation. reasonable attorneys' fees) arising
out of or in connection with Buyer's failure to comply with the provisions of this Section 5.2,
which obligation shall survive the termination of this Agreement.
6. Performance bv Parties. The performance and observance, in all material
respects, by Seller of all covenants and agreements of this Agreement to be performed or
observcd by Seller prior to or on the Closing Date shall be a condition precedent 10 Buyer's
obligation to purchase the Property. The performance and observance, in all material respects,
by Buyer of all covenants and agreements of this Agreement to be performed or observed by
Buy~r prior lO ur VB the Clu~illg Date shall be a condition precedent to Seller's obligation to sell
thc Property. Notwithstanding anything to the contrary contained in this Agreement, Buyer
agrees that its ability to obtain financing for the purchase of the Property shall not constitute a
condition precedent to Buyer's obligations under this Agreement.
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7. Tenant Estopoel Certificates; Previous Theater Lease Corresoondcnce. Buyer
acknowledges that Seller shall not have any responsibility to request an estoppel certificate from
any of the tenants under the Lcases and that receipt by Buyer of executed estoppel certificates
from any of the tenants under the Leases (including the Theater Tenant, as that tcrm is defined in
Section 10.1.2(a)) shall not be a condition prccedent to Buyer's obligations under this
Agreement. Buycr further acknowledges having received and reviewed copies of the following
correspondence: (i) October 24, 2005 letter from Marshall C. Smith to Rick Kauffman; (ii)
December 13. 2005 mcmorandum from Doug Olson to Richard Kauffman; (iii) two (2) scparate
lctters dated Dccember 15, 2005 from Richard Kauffman to Doug Olson; and (iv) mcmorandum
coptioned "Proposed Isis Theater Lcase Amcndments" received by Seller from Marshall C.
Smith on or aboul May 8. 2006 (collectively. thc "Previous Theater Leasc Correspondencc").
Buycr agrees that it has had the opportunity to thoroughly investigate all of the matters and
issues raised in the Previous Thcater Lease Correspondence and to discuss the same with the
Theater Tenant. Buyer agrees lhat none of the issues or matters raised in the Previous Theater
Lease Correspondencc will provide Buyer with any reaSOn to claim that Seller is in default under
this Agreement or that u condition precedent to Buyer's obligation to purchase the Property has
not been satisfied. Buycr further agrees that the Purchase Price set forth in this Agreement takes
into account all of the matters and issues raised by the Previous Theater Lease Correspondence
and that notwithstanding anything to the contrary contained in the Previous Theater Lease
Corrcspondence, Buyer shall not be entitled to any credit against the Purchase Price set forth in
this Agreement on account of the matters and issues raised by the Previous Theater Lease
Correspondence. Buyer and Seller further agree that notwithstanding anything to the contrary
contained in the Previous Theater Lease Correspondence, Seller's only obligations with respect
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to the repair and maintenance of the Property from and after the Mutual Execution Date arise
under the express provisions of the Leases (and not any statements, assertions or promises made
in the Previous Theater Lease Correspondence) and in Section 11.1 of this Agreement. Buyer
acknowledges having previously received and reviewed that certain tenant estoppel certificate
dated February 1,2006 and that certain notice of election to extend the term of the Theater Lease
dated September 12.2006. both executed by the Thcater Tenant.
8. Closing Procedure. The sale and purchase herein provided shall be consummated
(the "C1o,ing") at a closing conference ("Closing Conference"), which shall be held on the
Closing Date at the offices of Escrow Agent or at another mutually satisfactory location. Either
party may choose to participate in the Closing Confcrcnce by mail or recognized overnight
courier service, provided that such does not in any way delay the Closing. As used herein,
"Closing Date" shall mean the date ninety (90) calendar days after the Mutual Execution Date
or, with the written consent of both parties (which either party may withhold in its sole and
absolute discretion), any earlier date.
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8.1. Escrow. On or before 11 :00 a.m. Mountain Standard time on the Closing
Date, the parties shall deliver to Escrow Agent the following: (1) by Seller, a duly executed and
acknowledged original special warranty deed (the "Deed") in the form of Exhibit "C"; and
(2) by Buyer, the Closing Payment in immediately available federal funds. This Agreement shall
constitute escrow instructions, and a fully executed cupy ur cuuul~rparl (.;upit:~ ~hall be llt::pusiled
with Escrow Agent for this purpose. Should Escrow Agent require the execution of its standard
form printed escrow instructions, Buyer and Seller agree to execute the same to the extent the
same are not inconsistent with the terms of this Agreement and do not require the parties to
release or indemnify the Escrow Agent for its negligence, willful misconduct or failure to abide
by the terms of any written escrow instructions; however, such instructions shall be construed as
applying only to Escrow Agent's employment, and if there are conflicts between the terms of this
Agreement and the terms of the printed escrow instructions, the terms of this Agreement shall
control.
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8.2. Deliverv to Parties. On the Closing Date (x) the Deed shall be delivered to
Buyer by Escrow Agent's depositing the same for recordation, (y) the Closing Payment shall be
paid to Seller, and (z) the following items shall be delivered:
8.2.1.
Escrow Agent, the following:
Seller Deliveries. Seller shall deliver to Buyer, through
(a) a duly executed bill of sale, assignment and assumption
agreement (the "Assignment and Assumption Agreement") from Seller with respect to the
tangible and intangible personal property included in the Property (including the Leases and
Service Agreements) in the form of Exhibit UD"j
(b) a duly executed certificate of "non-foreign" status in the
form of Exhibit "E" from Seller and any required state withholding or non-foreign status
certificate;
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(c) notices to each of the tenants under the Leases
("T enant Notices"), duly executed by Seller in the form of Exhibit "F", addressed to each of
such tenants;
(d) evidence reasonably satisfactory to Buyer and Title
Company respecting the due organization of Seller and the due authorization and execution of
this Agreement and the documents required t? be delivered hereunder;
(e) to the extent they are then in Seller's possession, and
have not heretofore been delivered to Buyer: (i) any plans and specifications for all
improvements made within the Units and for the "Common Elements" and the "Building" as the
latter two capitalized terms are defined in the Declaration; (ii) all unexpired warranties and
guarantees which Seller has received in connection with any work or services performed with
respect to, or equipment installed in, the Property; (iii) all keys for the Units; (iv) originals of all
Leases; and (v) originals of all Service Agreements that will remain in effect after the Closing.
Any of the materials described in this Section 8.2.1(e) that are delivered by Seller shall be
delivered, without representation or warranty, express or implied; and
(I) such additional documents as may be reasonably
n:yuirt:u by Tilk Company in unJt:r to cunsummalt: lht: lransaclion:; hcn:under (provided the
same do not increase in any material respect the costs to, or liability or obligations of, Seller in a
manner not otherwise provided for herein).
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8.2.2.
Escrow Agent, the following:
Buyer Deliveries. Buyer shall deliver to Seller, through
(a) a duly executed and acknowledged Assignment and
Assumption Agreement;
(b) evidence reasonably satisfactory to Seller and Title
Company respecting the due organization of Buyer and the due authorization and execution of
this Agreement and the documents required to be delivered hereunder; and
(c) such additional documents as may be reasonably
required by Title Company in order to consummate the transactions hereunder (provided the
same do not increase in any material respect the costs to, or liability or obligations of Buyer in a
manner not otherwise provided for herein).
8.3. Closing Costs. Seller shall pay (I) 0% of all state, county and city transfer
and sules taxes payable, if any. in connection with the transfer contemplated herein, (2) that
portion of the title insurance premium for the Owner's Policy (excluding any endorsements)
relating to standard coverage for an insured amount equal to the Purchase Price and (3) 50% of
all escrow charges. Buyer shall pay (I) 100% of all state, county and city transfer and sales taxes
payable, if any, in connection with the transfer contemplated hereby, (2) 50% of all escrow
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charges, (3) the costs of extended coverage and any endorsements to the Owner's Policy and any
prcmium for an insured amount in excess of the Purchase Price, (4) the costs, if any, to obtain
and/or update the Survey, (5) all fees, costs or expenses in connection with Buyer's due diligence
reviews hereunder, and (6) 100% of all recording costs, cxcluding any recording costs necessary
to release any licns or encumbrances that are not Permitted Exceptions (the recording costs for
which shall be paid by Seller). Any other closing costs shall be allocated in accordance with
local custom in the County of Pitkin, State of Colorado. Seller and Buyer shall pay their
respective shares of prorations as hereinafter provided.
8.4. Prorations.
8.4.1. Items to be Proratcd. The following shall be prorated between
Seller and Buyer as of the Closing Date (on the basis of the actual number of days elapsed over
the applicable pcriod):
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(a) All rcal cstate taxes and assessments on the Propcrty for
the tax year in which the Closing occurs (the "Current Tax Year") and any use tax on the
Personal Propelty (with Seller and Duyer each being responsible for a pro rata share of such
taxes and assessments based upon the number of days in such tax year occurring before the
Closing Date. in the case of Seller, and including and after the Closing Date, in the case of
Buyer). If any assessments on the Property are payable in installments, then the installment for
the current period shall bc prorated (with Buyer being allocated the obligation to pay any
installments due on or after the Closing Date).
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(b) All fixed and additional rentals under the Leases,
security deposits and other tenant charges. On the Closing Date, Seller shall leave with Buyer,
or provide a crcdit in an amount equal to, all prepaid rcntals for periods after the Closing Date
and all refundable security deposits to tenants (to the extent the foregoing were made by tenants
under the Leases and are not applied or forfeited prior to thc Closing Datc). All rents and other
amounts payable on or prior to the Closing by a tenant under any of the Leases (whether actually
paid or delinquent) shall be prorated on the Closing Date. Following the Closing, Buyer shall be
entitled to pursue and collect from tenants under the Lcases who were tenants of the Property as
of the Closing Date any rent or other amounts payable by such tenants which were delinquent as
of the Closing Date. However, with respect to all other amounts or rights of any kind respecting
tenants who are no longer tenants of the Property as of the Closing Date and the guarantors of
such leases that have terminated prior to the Closing Date, Seller shall retain all rights relating
thereto.
(c) All operating expenses and utility payments not paid by
tenants; however, there will be no prorations for existing debt service, insurance premiums or
payroll (bccuu~c Buyer is not acquiring Seller's financing, insurance or employees).
(d) All condominium association assessments and dues and
other applicable privatc assessments and dues.
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8.4.2. Calculation. The prorations and payments shall be made on the
basis of a written statement submitted to Buyer and Seller by Escrow Agent prior to the Close of
Escrow and approved by Buyer and Seller. Any item which cannot be finally prorated because
of the unavailability of information shall be tentatively prorated on the basis of the best data then
availablc and repro rated when the information is available. In the event any prorations or
apportionments made under this Section 8.4.2 shall prove to be incorrect for any reason and the
amount in question exceeds $500.00, then any party shall be entitled to an adjustment to correct
the same provided a written request identifying the error in reasonable detail is given to the other
party no later than three (1) months after the Closing, except that with respect to real property
taxes or use taxes, said adjustments shall be made within sixty (60) days of receipt of the tax bill
and in no event will either party be entitled to a further credit by reason of a corrected
re-proration of real property taxes and use taxes in an amount exceeding $2,500.00.
8.4.3. The obligations of the parties under this Section 8 shall survive
the Closing.
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9. Condemnation or Destruction of ProDertv. In the event that, after the date hereof
but prior to the Closing Date, either any portion of the Propelty is Taken (as ddined below) or
any of the improvements on the Property are damaged or destroyed by any casualty, Seller shall
not have any obligation to repair or replace any such damage or destruction, but Seller shall be
required to give Buyer prompl written nOlice of lhe same. Seller shall deliver and assign to
Buyer, upon consummation of the transaction herein provided (except to the extent any Taking
(as defined below) proceeds or insurance proceeds are attributable to lost rents or other items
applicable to any period prior to the Closing), all claims of Seller respecting any Taking (as
defined below) or casualty insurance coverage, as applicable, and all condemnation proceeds or
proceeds from any such casualty insurance received by Seller on account of any casualty (except
to the extent required for collection costs or repairs by Seller prior to the Closing Date), as
applicable. In connection with any retention of insurance proceeds hereunder, Buyer shall be
credited with an amount equal to the applicable deductible amount under the condominium
association's insurance (except to the extent required for collection costs or repairs by such
association prior to the Closing Date). In the event the condemnation award offered in
connection with the Taking or the cost of repair of damage to the Property on account of a
casualty, as applicable, shall exceed $432,500.00 (or if a casualty is uninsured, and Seller does
not elect to credit Buyer with an amount equal to the cost to repair such uninsured casualty,
Seller having the right. but not the obligation, to do so), or in the event a Taking occurs with
respect to all of the Property. Buyer may, at its option, terminate this Agreement by notice to
Seller, given on or before the earlier to occur of the Closing Date or the date ten (10) days
following receipt by Buyer of notice of the Taking or occurrence of the casualty, and in such
event the Earnest Deposit (or, as applicable, the portion thereof previously deposited with
Escrow Agent) shall be refunded to Buyer. Except as otherwise specifically set forth in this
Section, Duyer shall not have thc right to terminate this Agreement or receive a refund of all or
any portion of the Earnest Deposit by reason of a Taking or the occurrence prior to the Closing
of a casualty alTccting the Property. As used in this Section, the Property or applicable portion
thereof shall be deemed "Taken" and a "Taking" shall occur only if a governmental authority
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files and serves litigation against Seller prior to the Closing seeking to acquire all or any portion
of the Property under the power of eminent domain.
10. Representations and Warranties.
10.1. Representations and Warranties of Seller.
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10.1.1. General Disclaimer. Except as specifically set forth in
Section 10.1.2 below, the sale of the Property hereunder is and will be made on an "AS-IS,
WHERE-IS" basis, without representations and warranties of any kind or natur,e, express,
implied or otherwise, including any representation or warranty concerning title to the Property
(except as specifically set forth in the Deed or Assignment and Assumption Agreement), the
physical condition of the Property (including the condition of the soil or the Improvements), the
environmental condition of the Property (including the presence or absence of hazardous
substances on or rcspecting the Property), the compliance of the Property with applicable laws
and regulations (including zoning and building codes or the status of development or use rights
respecting the Property), the land use entitlements and other governmental approvals that havc
been granted or have not been granted with respect to the Property, the financial condition of the
Property, the Leases or Service Agreements, or any other representation or warranty respecting
any income, expenses, charges, liens or encumbrances, rights or claims on, affecting or
perlaining LO Ihe Properly or any parl lhereor. Buyer acknowledges Ihal Buyer has previously
examined. reviewed and inspected all matters which in Buyer's judgment bear upon the Property
and its value and suitability for Buyer's purposes. Except as to matters specifically set forth in
Section 10.1.2 below, Buyer will proceed with the closing contemplated hereby solely on the
basis of its own physical, financial and other examinations, reviews and inspections and the title
insurance protection afforded by the Owner's Policy. Buyer acknowledges that it shall have no
right to rely on the accuracy of any of the documents, materials or other information it may
obtain from Seller or Seller's agents or brokers, whether obtained pursuant to the terms of
Sections 4 or 8.2.1(f) or otherwise, and Buyer further acknowledges that neither Seller nor its
agents or brokers has made, nor shall be deemed to have made any representations or warranties
whatsoever, express or implied, with respect to the completeness, contcnt or accuracy of any of
such documents. materials or information or with respect to any of the matters disclosed thereby.
Buyer understands and agrees that Seller's transfer of the Declarant's Rights is without any
representation or warranty whatsoever, express or implied, and is in the nature of a quit-claim.
Buyer further agrees that with respect to the physical condition of the Property, parties with
whom Buyer is associated are licensed contractors in the state of Colorado with expertise in
commercial development and the construction, repair and maintenance of commercial buildings
sllch as the Property and the roofs and mechanical and other components thereof. By executing
this Agreement, Buyer hereby gives Seller, as a material inducement for Seller to enter into this
Agreement. a full release of any and all claims or causes of action Buyer may have now or in the
future based on the condition of the Property, the mutters contained in the Previous Theater
Lease Correspondence and all other matters pertaining to the Property, except as expressly set
forth in Section 10.1.2 below.
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10.1.2. Representations and Warranties of Seller. Sellcr hereby
represents and warrants to Buyer, as of the datc that Seller executes this Agreement and to
Seller's knowledge, as follows:
(a) Leases. There are no leascs of space in the Property
under which Seller is the landlord (whether by entering into the leases or acquiring the Property
subject to the leases) other than the Leases. As used herein, "Leases" means, collectively,
(I) the leases listed in Exhibit "G" (the "Lease Exhibit") and any new lease of Unit C of the
Properly which the landlord thereunder is required to enter into pursuant to Paragraph 47 of the
Theater Lease and (2) the leases entered into in accordance with this Agreement. None of the
Leases has been amended except as set forth in the Lease Exhibit. There are no security deposits
under the Leases except as set forth in the Lease Exhibit. Furthermore, (a) except as may be
described in the Previous Theater Lease Correspondence (which correspondence is governed by
Sections 7 and 10.1.1, Seller has not received any noticc that it is in default under any of the
Leases, (b) the tenant of Commercial Unit A (the "Theater Tenant") is not in monetary default
with respect to its obligation to pay its monthly base rent (and to Seller's knowledge, is not in
material non-monetary default) under the Theater Tenant's Lease (the "Theater Lease"), except
as set forth on Exhibit "H"" and (c) Seller ha:s Hut receivt:'u lIutice that allY tt:Ili::1111 ulIllt:r allY
Lease has filed for bankruptcy.
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(b) Litigation. Except for pending litigation currently
being pursued arising out of a lease default by a former tenant of a portion of the Property and
the default by the guarantor of that lease (the "Former Theater Tenant/Guarantor
Litigation"), there is no pending (and Seller has not received any written notice of any
threatened) action, litigation, condcmnation or other proceeding (collectively, "Proceeding")
involving any portion of the Property or against Seller. The Former Theater Tenant/Guarantor
Litigation does not involve any claim by any former tenant to possession, ownership or use of
the Property. Buyer acknowledges that it shall have no right, title, interest or claim in or to any
award of damagcs, attorneys' fces or costs that may now or in the future be awarded to Seller or
any other person or entity arising by reason of the Former Theater Tenant/Guarantor Litigation
or any settlement proceeds paid in connection with the Former Theater Tenant/Guarantor
Litigation or any right whatsocvcr with respect to the Former Theater Tenant/Guarantor
Litigation. Notwithstanding anything to the contrary contained in this Agreement, Seller makes
no representations or warranties whatsoever concerning any threatened Proceeding involving the
proposed Taking of all or any portion of the Property.
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(c) Compliance. Subject to the provisions of Section 13.1,
Seller has received no written notice from any governmental authority having jurisdiction over
the Property to the effect that the Property is not in compliance with applicable laws and
ordinances or, if it has, such alleged violation has been cured.
(d) Service Agreements. Seller has not entered into any
service agreemcnts. equipment leasing contracts or other contracts relating to the Property which
will be in force after the Closing, except for the Leases, the Service Agreements, and contracts
recorded in the official records of the county in which the Property is located. As used herein,
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the "Service Agreements" means, collectively, (a) contracts described in Exhibit "I" and
(b) contracts entered into in accordance with this Agreement. There is no monetary default or
material non-monetary default under the Service Agreements.
( e) Due Authoritv. This Agreement and all agreements,
instruments and documents herein provided to be executed or to be caused to be executed by
Seller are, and on the Closing Date will be, duly authorized, executed and delivered by, and are
binding upon, Seller. Seller is a limited liability company duly organized and validly existing
and in good standing \lnder the laws nfthe State of Arizona, and is qualified to do husiness in the
State of Colorado. Seller has the capacity and authority to enter into this Agreement and
consummate the transactions herein provided without the consent or joinder of any other party.
(f) Consents: No Conflict. Seller has obtained all consents
and permissions related to the transactions herein contemplated and required under any covenant,
agreement, encumbrance or applicable laws. Subject to the provisions of Section 13.1, neither
this Agreement nor any agreement, document or instrument executed or to be executed in
connection with the same, nor anything provided in or contemplated by this Agreement or any
such other agrccmcnt~ document or instrument, does now or shall hereafter breach, invalidate,
cancel, make inoperative or interfere with, or result in the acceleration or maturity of, any
agreement, document, instrument, right or interest, affecting or relating to Seller or the Property.
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(g) Environmental Matters. There has been no release of
any material known to Seller to be a "Hazardous Material" at or upon the Property, in an amoW1t
which would, as of the date hereof, give rise to an "Environmental Compliance Cost". The term
"Hazardous Material" shall mean asbestos, petroleum products and any other hazardous waste
or substance which has, as of the date hereof, been determined to be hazardous or a pollutant by
the U.S. Environmental Protection Agency, the U.S. Department of Transportation or any
instrumentality authorized to regulate substances in the environment which has jurisdiction over
33the Property ("Environmental Al(ency") which substance causes the Property (or any part
thereof) to be in material violation of any applicable environmental laws. The term
"Environmental Compliance Cost" means any material out-of-pocket cost, fee or expense
reasonably incurred directly to satisfy any requirement imposed by an Environmental Agency to
bring the Property into compliance with applicable Federal, State and local laws and regulations
directly relating to the existence on the Property of any Hazardous Material.
(h) Seller has not previously assigned any of its right, title
or interest (if any) in and to the Declarant's Rights.
10.2. Representations and Warranties of Buver. Buyer hereby represents and
warrants to Seller: (I) this Agreement and all agreements, instruments and documents herein
provided to be executed or to be caused to be executed by Buyer are and on the Closing Date
will be duly authorized, executed and delivered by, and are binding upon, Buyer; and (2) Buyer
has the capacity and authority to enter into this Agreement and consummate the transactions
herein provided without the consent or joinder of any other party.
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10.3. Survival. Any cause of action of a party (the "Benefiting Party") for a
breach of any representations or warranties set forth in this Agreement or in any other document
delivered in connection herewith by the other party (the "Obligated Party") shall survive until
the date that is twelve (12) months after the Closing Date (the period beginning on the Closing
Date and ending on such date being herein called the "Survival Period"), at which time such
representations and warranties (and any cause of action resulting from a breach thereot) shall
tenninate except as to: (I) any claims arising out of the Deed or Assignment and Assumption
Agreement. and (2) any breach with respect to which the Benefiting Party gives the Obligated
Party wrillen notice (identifying sueh breach with reasonable detail) on or before the expiration
of the Survival Period; provided. however, that, exeept for any claims arising out of the Deed,
the Benefiting Party must file and serve any litigation against the Obligated Party in a court of
competent jurisdiction on or before the. last day of the Survival Period in order for such
representation or warranty to continue to survive. Notwithstanding the foregoing: (I) if a
Benefiting Party shall have knowledge as of the Closing Date that any of the representations or
warranties of the Obligated Party contained herein or in any other document delivered in
connection herewith are false or inaccurate, then the Obligated Party shall not have any liability
or obligation respecting such false or inaccurate representations or warranties (and any cause of
llction resulting therefrom shall terminate upon the Closing); and (2) to the extent any
representation and warranty of Seller hereunder is confinned by a tenant estoppel certificate with
respect to any particular Lease, such representation and warranty shall be deemed stricken from
this Agreement (and from any cenificate delivered in connection herewith), insofar as such
Lease is concerned (and Seller shall not have any obligation or liability with respect thereto).
lOA. Knowledge.
] OA.l. Definition. When a statement is made under this Agreement to
the "knowledge" of a party (or other similar phrase), it means that none of the Designated
Representatives of such party has any actual knowledge (as distinguished from imputed or
constructive knowledge or knowledge which could be acquired through investigation) of any
facts indicating that such statement is not true. Each Designated Representative shall be deemed
to have actual knowledge of any matter brought to the allention of such Designated
Representative in writing. None of the Designated Representatives shall have any personal
liability under this Agreement.
IOA.2. Designated Representatives. The "Designated
Representatives" are limited to the following individuals:
(a) for Seller: Richard Kauffman: and
(b) for Buyer: Phil Holstein.
10.5. Post-Closing Breaches. In the event Buyer first discovers after the
Closing that a representation or warranty made by Seller in this Agreement or in any other
document delivered in connection with this Agreement was not correct in any material respect
when made (the "Post-Closing Breaches"), Buyer may, provided that it has filed and served
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such litigation against Seller in a court of competent jurisdiction on or before the last day of the
Survival Period as required by Section 10.3, bring an action for actual damages arising from any
Post-Closing Breaches; provided, however, in no event shall: (i) Buyer be entitled to bring an
action for actual damages arising from any Post-Closing Breaches unless the loss, damage, cost
and cxpcnsc suffcred or incurred by Buyer due to such Post-Closing Breaches (the "Post-
Closing Losses") equal or exceed fifty Thousand Dollars ($50.000.00) in the aggregate: (ii)
Seller's aggregate liability for all Post-Closing Losses exceed Four Hundred Thousand Dollars
($400,000.00); and (iii) Buyer be entitled to punitive or consequential damages from Seller. The
provisions of this Section shllll survive the rlosing
11. Interim Covenants of Seller. Until the Closing Date or the sooner termination of
this Agreement:
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11.1. Maintenance and Operation. Seller shall maintain and operate the
Propcrty in the same manner as prior hereto pursuant to its normal course of business (such
maintenance obligations shall not include extraordinary capital expenditures or expcnditures not
incurred in such normal course of business), subject to reasonable wear and tear and further
~ulJjt:ct tv u~:::;trU\.;tiuIl by casualty or ulher l;:venb bt:yuml tht: reasonable control of Seller.
Without limitation of the foregoing, Seller shall maintain, or cause the condominium association
named in the Declaration to maintain, casualty insurance on the Property (including the
Appurtenant Common Elcmcnts) in an amount not less than its full replacement cost and rental
loss insurance covering rental income from the Leases for a period of not less of twclvc (12)
months.
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I 1.2. Service Agreements. If such would survive the Closing, Seller shall not
enter into any additional service agreements, equipment leasing contracts, contracts relating to
the Property or other similar agreements relating to the Property or material modifications or
extensions to thc Service Agreements without the prior written consent of Buyer, which shall not
be unreasonably withheld. delayed or conditioned.
11.3. Leases. Seller shall not enter into any new lease of Commercial Unit A or
material modifications of the existing Theater T.ease without the prinr written consent of Buyer,
which may be withheld in Buyer's sole discretion. Buyer expressly acknowledges that Seller
may enter into new residential leases for either or both of the Leases relating to Residential Units
C or D and that Seller may extend either or both of the existing Leases relating to Residential
Units C or D, without obtaining Buyer's prior "'Tilten consent thereto. Notwithstanding the
prcceding, Seller agrees it will not enter into any new Lease relating to Residential Units C or D,
with u leuse term in excess of six (6) months and thut no extension of the leuse terms of either of
such Leases shall be for morc than an additional six (6) months.
11.4. Access to the ProPcl1v. Seller shall continue to give Buyer access lu tIll;
Property in accordancc with and subject to the provisions ofSeetion 5.
11.5. Mortgages. Scllcr shall not further encumber the Property with any
mortgages or deeds of trust unless such will be paid in full as of the Closing.
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12. DISPOSITION OF EARNEST DEPOSIT: REMEDIES FOR
PRE-CLOSING DEFAULTS.
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12.1. IF THE TRANSACTION HEREUNDER SHALL FAIL TO CLOSE
BY REASON OF SELLER'S DEFAULT, THEN BUYER SHALL BE ENTITLED, AS ITS
SOLE AND EXCLUSIVE REMEDY, TO EITHER (i) SPECIFICALLY ENFORCE THIS
AGREEMENT OR (2) TERMINATE THIS AGREEMENT AND OBTAIN A RETURN
OF THE EARNEST DEPOSIT (OR, AS APPLICABLE. THE PORTION THEREOF
PREVIOUSLY DEPOSITED WITH ESCROW AGENT). IF BUYER ELECTS TO
TERMINATE DUE TO A SELLER DEFAULT OR THE OCCURRENCE OF ANY
OTHER MATTER WHICH UNDER THE EXPRESS TERMS OF THIS AGREEMENT
ENTITLES HilYER TO A RETURN OF ALL OR A PORTION OF ITS EARNEST
DEPOSIT, THE EARNEST DEPOSIT OR APPLICABLE PORTION THEREOF SHALL
BE RETURNED TO BUYER, AND NO PARTY SHALL HAVE ANY FURTHER
OBLIGATION OR LIABILITY TO THE OTHER (EXCEPT UNDER THOSE
PROVISIONS OF THIS AGREEMENT THAT EXPRESSLY SURVIVE A
TERMINATION OF TIllS AGREEMENT). IN NO EVENT, WHATSOEVER, SHALL
BUYER BE ENTITLED TO SEEK DAMAGES AGAINST SELLER BY REASON OF A
PRE-CLOSING SELLER DEFAULT UNDER THIS AGREEMENT. IN THE EVENT
BUYER ELECTS TO SEEK SPECIFIC PERFORMANCE OF THIS AGREEMENT BY
REASON OF SELLER'S DEFAULT, IT SHALL FILE AND SERVE SUCH SPECIFIC
PERFORMANCE ACTION WITHIN THIRTY -FIVE (35) DAYS FOLLOWING THE
CLOSING DATE OR FOREVER BE BARRED FROM BRINGING SUCH SPECIFIC
PERFORMANCE ACTION AGAINST SELLER.
12.2. SUBJECT TO THE PROVISIONS OF SECTION 12.3, IN THE
EVENT OF A BUYER DEFAULT PRIOR TO THE CLOSING, THE EARNEST
DEPOSIT, TO THE EXTENT IT HAS BEEN DELIVERED BY BUYER TO ESCROW
AGENT, SHALL BE DELIVERED TO SELLER (IF NOT PREVIOUSLY DELIVERED
TO SELLER PURSUANT TO SECTION 3.1) AND RETAINED BY SELLER AS FULL
COMPENSATION AND LIQUIDATED DAMAGES UNDER AND IN CONNECTION
WITH THIS AGREEMENT, AND IN SUCH EVENT, BUYER SHALL NOT BE LIABLE
TO SELLER FOR MONETARY DAMAGES EXCEPT FOR FORFEITURE OF THE
EARNEST DEPOSIT (AND EXCEPT AS PROVIDED UNDER THOSE PROVISiONS
OF THIS AGREEMENT THAT EXPRESSLY SURVIVE A TERMINATION OF THIS
AGREEMENT). IN CONNECTION WITH THE FOREGOING, THE PARTIES
RECOGNIZE THAT SELLER WILL INCUR EXPENSE IN CONNECTION WITH THE
TRANSACTION CONTEMPLATED HY THIS AGREEMENT AND THAT THE
PROPERTY WILL BE REMOVED FROM THE MARKET; FURTHER, THAT IT IS
EXTREMELY DIFFICULT AND IMPRACTICABLE TO ASCERTAIN THE EXTENT
OF DETRIMENT TO SELLER CAUSED BY THE BREACH BY BUYER UNDER THIS
AGREEMENT AND THE FAILURE OF THE CONSUMMATION OF THE
TRANSACTION CONTEMPLATED BY THIS AGREEMENT OR THE AMOUNT OF
COMPENSATION SELLER SHOULD RECEIVE AS A RESULT OF BUYER'S
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BREACH OR DEFAULT. SUBJECT TO THE PROVISIONS OF SECTION 12.3, IN
THE EVENT THE SALE CONTEMPLATED HEREBY SHALL NOT BE
CONSUMMATED ON ACCOUNT OF BUYER'S DEFAULT, THEN THE
TERMINATION OF THIS AGREEMENT AND RETENTION OF THE EARNEST
DEPOSIT SHALL BE SELLER'S SOLE AND EXCLUSIVE REMEDIES UNDER THIS
AGREEMENT BY REASON OF SUCH DEFAULT, SUBJECT TO THE PROVISIONS
OF THIS AGREEMENT THAT EXPRESSLY SURVIVE A TERMINATION OF THIS
AGREEMENT AND THE PARTIES SHALL TAKE SUCH ACTION AS MAY BE
RF.QIJIRF.D TO CAIJSF. THE EARNEST DEPOSIT, TO THE EXTENT IT HAS BEEN
DELIVERED BY BUYER TO ESCROW AGENT, TO BE DELIVERED TO SELLER (IF
NOT PREVIOUSLY DELIVERED TO SELLER PURSUANT TO SECTION 3.1).
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12.3. NOTWITHSTANDING THE FOREGOING TO THE CONTRARY,
IF (I) BUYER FAILS TO TIMELY AND PROPERLY FILE AND SERVE A SPECIFIC
PERFORMANCE ACTION AGAINST SELLER AS DESCRIBED IN SECTION 12.1
FOLLOWING AN ALLEGED SELLER DEFAULT AND THEREAFTER BUYER
REFUSES TO CAUSE ESCROW AGENT TO TERMINATE THE ESCROW CREATED
IIEREBY OR CLAIMS THAT THIS AGREEMENT HAS NOT BEEN CANCELLED, OR
(2) BUYER TIMELY FILES AND SERVES A SPECIFIC PERFORMANCE ACTION
AGAINST SELLER IN ACCORDANCE WITH THE TERMS OF SECTION 12.1
t'OLLOWING AN ALLEGED SELLER DEFAULT AND THEREAFTER A COURT OF
COMPETENT JURISDICTION DECREES THAT SUCH SPECIFIC PERFORMANCE
ACTION WAS BROUGHT IN BAD FAITH, FRIVOLOUSLY AND/OR IN VIOLATION
OF ANY RULE OF COURT, STATUTE OR OTHER RULE, REGULATION OR LAW
PERTAINING TO ACTIONS BROUGHT FRIVOLOUSLY OR IN BAD FAITH OR
WITHOUT JUST CAUSE, SELLER SHALL ALSO BE ENTITLED TO RECOVER ALL
COSTS AND EXPENSES, INCLUDING ACTUAL ATTORNEYS' FEES, EXPERTS'
FEES AND CONSULTANTS' FEES AND CONSEQUENTIAL DAMAGES, IF ANY,
WHICH MAY BE INCURRED BY SELLER BY REASON OF THE CLOUD ON TITLE
TO THE PROPERTY WHICH MAY RESULT FROM BUYER'S WRONGFUL
FAILURE TO ALLOW THE TERMINATION OF THE ESCROW CREATED HEREBY
AND THE AGREEMENT OR FROM BUYER'S PURSIJIT OF THF. SPEf:lFIC
PERFORMANCE ACTION. FURTHER NOTWITHSTANDING THE FOREGOING TO
THE CONTRARY, NOTHING CONTAINED IN THIS AGREEMENT SHALL
PRECLUDE SELLER FROM RECOVERING ALL COSTS AND EXPENSES,
INCLUDING ACTUAL ATTORNEYS' FEES, EXPERTS' FEES AND CONSULTANTS'
FEES INCURRED BY SELLER IN SEEKING SPECIFIC PERFORMANCE OR
ENFORCEMENT OF THE LIQUIDATED DAMAGES PROVISIONS OF SECTION
12.2.
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12.4. IN TnE EYENT TnE TRANSACTION nEREIN PROVIDED
SHALL CLOSE, THE EARNEST DEPOSIT SHALL BE APPLIED AS A PARTIAL
PAYMENT OF THE PURCHASE PRICE.
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12.5. NEITHER SELLER NOR BUYER SHALL BE DEEMED IN
DEFAULT HEREUNDER BY REASON OF ITS FAILURE TO TIMELY PERFORM
ANY OF ITS OBLIGATIONS HEREUNDER, UNLESS SUCH FAILURE TO PERFORM
CONTINUES UNCURED FOR A PERIOD OF FIVE (5) CALENDAR DAYS
FOLLOWING WRITTEN NOTICE OF SUCH FAILURE FROM THE OTHER PARTY;
PROVIDED, HOWEVER, THAT A TWO BUSINESS DAY CURE PERIOD, RATHER
THAN A FIVE CALENDAR DAY CURE PERIOD SHALL APPLY IN THE EVENT
BUYER FAILS TO HAVE IMMEDIATELY AVAILABLE FEDERAL FUNDS IN
ESCROW ON THE CLOSING DATE SUFFICIENT IN AMOUNT TO CLOSE THE
TRANSACTION, OR IN THE EVENT THE FIRST EARNEST DEPOSIT OR SECOND
EARNEST DEPOSIT IS NOT TIMELY PAID INTO ESCROW AS SET FORTH IN
SECTION 3.1.
12.6. BY INITIALING BELOW, SELLER AND BUYER
ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE
PROVISIONS OF THIS SECTION 12 AND THE LIMITATIONS ON REMEDIES
DESCRIBED IN THIS CTlON:
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Seller's 1m at.
Buyer's Initials
13. Miscellaneous.
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13.1. City of Aspen Open Space Fee. Buyer acknowledges that the
$250,000.00 open space cash-in-Iieu fee payable to the City of Aspen by the owner of the
Property as described in Resolution No. 98-18 of the City of Aspen has been paid in full by
Seller.
13 .2. Brokers.
13.2.1. [n the event of a claim for broker's or linder's fee or
commissions in connection with the sale contemplated by this Agreement, then Seller shall
indemnify, defend and hold harmless Buyer from the same if it shall be based upon any claim by
Houston and Gorog (Heidi Houston) or any agreement alleged to have been made by Seller, and
Buyer shall indemnify, delend and hold harmless Seller from the same if it shall be based upon
any claim by The Fleischer Company (Mark Wyman and Craig Rathbun) or any agreement
alleged to have been made by Buyer. The indemnification obligations under this Section 13.2.1
shall indefinitely survive the closing of the transactions hereunder or the earlier termination of
this Agreement.
13.2.2. Scller and Buyer D.Ckllowlcdgc that Heidi Houston has an
ownership interest in the Seller and that Mark Wyman and Craig Rathbun may be members of a
limited liability company to be formed that may become the assignee of Buyer's rights
hereunder,
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13.3. No Waiver. No waiver by a party of any breach of this Agreement or of
any warranty or representation hereunder by the other party shall be deemed to be a waiver of
any othcr breach by such other party (whether preceding or succeeding and whether or not of the
same or similar nature), and no acceptancc of payment or performance by a party after any
breach by the other party shall be deemed to be a waiver of any brcach of this Agreemcnt or of
any representation or warranty hereunder by such other party, whcther or not the first party
knows of such breach at the time it accepts such payment or performance. No failure or delay by
a party to exercise any right it may have by reason of the default of the othcr party shall operate
as a waiver of default or modification of this Agreement or shall prevent the exercise of any right
by the first party while the othcr party continues to be so in default.
13.4. Piess Releases. Any press release issued prior to Closing by Buyer or
Seller with respect to thc transactions contcmplated by this Agreement shall be subject to the
prior approval of the other party, which approval may be withheld in the other party's sole and
absolute discretion.
13.5. Modification. This Agreement may not be modified or amended except
by written agreement signed by all parties.
13.6. Matters of Construction.
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13.6.1. Incomoration of Exhibits. All exhibits attached and referred to
in this Agreement are hereby incorporated herein as fully set forth in (and shall be deemed to be
a part of) this Agreement.
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13.6.2. Entire Agreement. This Agreement contains the entire
agreement between the parties respecting the matters herein set forth and supersedes all prior
agreements between the parties hereto respecting such matters.
13.6.3. Non.Business Davs. Whenever action must be taken
(including the giving of notice or the delivery of documcnts) under this Agreement during a
certain period of time (or by a particular date) that ends (or occurs) on a non.busincss day. then
such period (or date) shall be extended until the immediately following business day. As used
herein. "business day" means any day other than a Saturday, Sunday or federal or Colorado statc
boliday. As used herein, "calendar day" or "day" means any day including Saturdays, Sundays
and federal and Colorado state holidays.
13.6.4. Severability. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or unenforceable, shall
not bc affcctcd thereby, and cach such tcrm and provision of this Agreement shall be valid and
be enforced to the fullest extent permitted by law.
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13.6.5. Internretation. Words used in the singular shall include the
plural. and vice-versa, and any gender shall be deemed to include the other. Whenever the words
"including", "include" or "includes" are used in this Agreement, they shall be interpreted in a
non-exclusive manner. The captions and headings of the Sections of this Agreement are for
convenience ofreference only, and shall not be deemed to define or limit the provisions hereof.
Except as otherwise indicated, all Exhibit and Section references in this Agreement shall be
deemed to refer to the Exhibits and Sections in this Agreement. Each party acknowledges and
agrees that this Agreement (a) has becn rcvicwed by it and its counsel, (b) is the product of
negotiations between the parties and (c) shall not be deemed prepared or drafted by anyone
party. In the event of any dispute between thc parties concerning this Agreement, the parties
agree that any ambiguity in the language of the Agreement is to not to be resolved against Seller
or Buyer, but shall be given a reasonable interpretation in accordance with the plain meaning of
the terms of this Agreement and the intent of the parties as manifested hereby.
13.6.6. Governing Law. THIS AGREEMENT SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF
TIlE STATE or COLORADO (WITHOUT REGARD TO CONFLICTS OF LAW).
~
13.6.7. Third Partv Beneficiaries. Except as otherwise expressly
provided in this Agreement, Seller and Buyer do not intend by any provision of this Agreement
to confer any righl, remedy or benefit upon any third party, and no third party shall be emitled to
enforce or otherwise shall acquire any right, remedy or benefit by reason of any provision of this
Agreement.
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13.7. No Recordation. In no event shall this Agreement or any document or
memorandum related to the subject matter of this Agreement be recorded, except for the closing
documents to be recorded pursuant to Section 8.
13.8. Effectiveness of Agreement. In no event shall any draft of this
Agreement create any obligations or liabilities, it being intended that only a fully executed and
delivered copy of this Agreement will bind the parties hereto.
13.9. No Joint Venture. This Agreement does not and shall not be construed to
create a partnership, joint venture or any other relationship between the parties hereto except the
relationship ofthe seller and buyer specifically established hereby.
13.10. Successors and Assigns. Buyer may assign and transfer its rights and
obligations under this Agreement (an '''Assignment'') without the prior written consent of Seller,
but only if such Assignment is in compliance with the terms of this Section 13.10. As a
condition to the effectiveness of such Assignment, the assignee shall assume in writing all of
Buyer's obligations hereunder and deliver an original of such writing to Seller (the '"Assumption
Instrument"). Buyer shall give Seller written notice of any Assignment (including a signed
original of the Assumption Instrument) on or prior to the next business day following such
Assignment. No Assignment in violation of the provisions hereof shall be valid or enforceable.
Following an Assignment in compliance with the terms of this Section, references in this
2]
1~62'2 1'1
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Agreement to the "Buyer" shall be deemed references to the Buyer's assignee; and such
Assignment shall operate as a release of the original Buyer hereunder from his/its obligations or
liabilities under this Agreement. Subject to the foregoing, this Agreement and the tenns and
provisions hereof shall inure to the benefit of and be binding upon the successors and assigns of
the parties.
13.11. 1031 Exchange. Each of Buyer and Seller agrees to cooperate with the
other in any manner reasonably necessary to assist the other party in achieving a tax-deferred
exchange under Section 1011 or the Internal Revenue Code of 1986 (as amended). However, in
no event shall the cooperating party be obligated: (i) to take title to any replacement property;
(ii) to incur any obligation, indebtedness, liability. cost or expense as a result of cooperation to
affect that exchange, except costs or expenses to be paid by the party seeking to achieve the
exchange transaction; (iii) to act as a qualified intermediary for any deferred like-kind exchange;
or (iv) to agree to any extension of the Closing Date. The exchanging party agrees to indemnify
and hold harmless the cooperating party from and against any and all claims, suits, proceedings,
liabilities, damages, losses, costs and expenses, including, without limitation, reasonable
attorneys' fees and disbursements in any way connected with the cooperation by the cooperating
party wiLh Lht: t:ffurL tu ,,"chicve such an exchange, which obligation shall indefinitely survive the
Closing.
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13.12. Notices. Any notice which a party is required or may desire Lo give Lhe
other shall be in writing and shall be sent by personal delivery or by "mail" (either (i) by United
States registered or certified mail, return receipt requested, postage prepaid, or (ii) by Federal
Express or similar generally recognized overnight carrier regularly providing proof of delivery),
addressed as follows (subject to the right of a party to designate a different address for itself by
notice similarly given):
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TO BUYER:
Isis Property Group. I.I.C
c/o Mr. Mark Wyman
314 South Galena Street, Suite 200
Aspen, Colorado 81611
Fax: (970) 925-2924
With COpy To:
Klein, Cote & Edwards, LLC
20 I North Mill Street, Suite 203
Aspen, Colorado 81611
Attention: Herbert S. Klein, Esq.
Fax: (970) 925-3977
22
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TO SELLER:
CC Aspen, LLC
c/o Holualoa Arizona, Inc.
3573 East Sunrise Drive, Suite 225
Tucson, AZ 85718
Attention: Mr. Richard Kauffman
Fax: (520) 615-1896
And
Lewis and Roca LLP
One South Church Avenue, Suite 700
Tucson, Arizona 85701
Attention: Lewis D. Schorr, Esq.
Fax: (520) 879-4719
~
Any notice so given by "mail" shall be deemed to huve been given us of the date of delivery
(whether accepted or refused) established by U.S. Post Office return receipt or the overnight
carrier's proof of delivery, as the easc may be. Any such notice not so given shall be deemed
giv~Il upuu reL:dpl uf the ~aIIlt; by the party to whum the same is to be given. Notwithstanding
anything to the contrary contained in this Section 13.12, no notice under this Agreement shall be
effective if given via facsimile unless such notice via facsimile transmission is also hand
delivered or "mailed" (as described above) on or before the next business day.
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13.13. Legal Costs. The parties hereto agree that they shall pay directly any
and all legal costs which they have incurred on their own behalf in the preparation of this
Agreement, and all other agreements pertaining to this transaction and that such legal costs shall
not be part of the closing costs. In addition, if any party hereto brings any suit or other
proceeding with respect to the subject matter or the enforcement of this Agreement, the
prevailing party (as determined by the court, agency or other authority before which such suit or
proceeding is commenced), in addition to such other relief as may be awarded, shall be awarded
its reasonable attorneys' fees, expenses and costs of investigation actually incurred from the non-
prevailing party. The foregoing includes attorneys' fees, expenses and costs of investigation
(including those incurred in appellate proceedings), costs incurred in establishing the right to
indemnification, or in any action or participation in, or in connection with, any case or
proceeding under Chapter 7, 11 or 13 of the Bankruptcy Code (11 United States Code Sections
101 et seQ.), or any successor statutes. This Section shall survive any termination of this
Agreement.
13.H. Counteroarts. This Agreement may he executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall constitute one and
the same document. This Agreement may also be executed by the exchange of faxed or e-mailed
signatures; provided, however, the parties agree to exchange originally signed identical
23
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Line 1
15,0:(,0:; 09.15-2006
212
counterparts of this Agreement or duplicate originals bereofimmedilltely following the exchange
of such faxed or e-mailed signatures.
13.15. Back-Un Offel'S. Seller shall have the right while thii Agreement
remains in effect to negotiate and accept so.called Back-Up Offers provided that iuch offers
accepted by Seller expressly state therein that they are subJect to Buyer's rights under this
Agreement.
IN WITNESS WHEREOF. the P411ies hereto have executed this Agreement a" of the date
first above written.
SELtER:
CC ASPEN, lLC, an Arizona limited
liability company
By: HoluaJoa Arizona, Inc., an Ari2;ona
corpumtlol1
Its: Manager
By:
Name:
Title:
Date:
.....
BUYER:
Isl. Properly Group, LLC, a Colorado
limited llabiltty company
.-';1/ C!
By: /'~........_---z.....
Name: c1-:' ~,,; .,:~ .I1r;:-'f!.1 t "'".-;1.1
Title: .#'J'J .",,, ,,(" ,-;:::..
Date: r;j "F/"/LI i.
24
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From:
5206151895
09/15/2006 14:30 #018 P.002
lIn91
15:02:03 09.15-2006
21~
counterparts or this Agreement or duplicate originals hereofimmediately following the exchange
of such faxed Or e-mailed signatures.
13.1 s. Back-Un Offers. Seller shall have the right while this Agreement
remains in effect to negoti"te and accept so.called Back-Up Offers provided that such offers
accepted by Seller expressly state therein that they are subJect to Buyer's rights under this
Agreement.
IN WlTNESS WHEREOF. the parties hereto have executed this Agreen1"nt as of the date
first above written.
SELtER:
CC ASPEN, LLC, an Arizona limited
!lability company
By; HoluaJoa Arizona, Inc., an Arimna
CO,(pQfCLtlOll
Its: Manager
By:
Name:
Title:
Date:
BUYER:
Isis Property Group, LLC, a Colorado
!ladted liabil!ty company
...-;~ C
By: ('~______<........
Name: c1.;'N"'''~J\r;:'''C'.f 1.1;;'::...'
Title: ;h :,'), '1( (,;.'c...
Date: :,i/ /11'~f :'.
24
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counterparts of this Agreement or duplicate originals hereof immediately following the exchange
of such faxed or e-mailed signatures.
13.15. Back-Up Offers. Seller shall have the right while this Agreement
remains in effect to negotiate and accept so-called Back-Up Offers provided that such offers
accepted by Seller expressly state therein that they are subject to Buyer's rights under this
Agreement.
IN WITNESS WHEREOF. the parties hereto have executed this Agreement as of the dote
first above written.
SELLER:
CC ASPEN, LLC, an Arizona limited
liability company
By:
Holualoa Arizona, Inc., an Arizona
corpori:1tion
Manager
Its:
'-;-.,....
By:
Name:
Title:
Date:
BUYER:
Isis Property Group, LLC, a Colorado
limited liability company
~ (".
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By: i'/\..-~-_/______
Nflme: (~""-j ,:; ,),; ~. " ('.-,.~;
Title: ./ I') . ~1 '1t"; ,.:.'.:__
Date: >//'U/..J?>
24
lM2.\21'l
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.,...,
] EXHIBIT LIST
2
3
4 '"^" Description of Units
5
6 "B-1" Included Property
7 "B-2!' Excluded Property
8 "B-3'" Property Documents
9
10 "c" Form of Special Warranty Deed
I]
12 "D" Form of Bill of Sale. Assignment and Assumption
]3
14 "E" Form of Non-Foreign Status Certificate
15
16 T" Form of Notice to Tenants
]7
18 "0" Lease Exhibit
19
20 "H" Lease Defaults
21
22 ''1'' Service Agreements
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EXHIBIT "A"
DESCRIPTION OF UNITS
COMMERCIAL UNIT A and RESIDENTIAL UNITS C AND D, ISIS THEATER
CONDOMINIUMS according to the Map filed for record Dcccmbcr 9, 1999, in Plat Book 52 at
Pagc 1 and as defined and described by the Condominium Declaration for Isis Theater
Condominiums recorded Dcccmbcr 9, 1999, as Reception No. 438433. City of Aspen, Pitkin
County, Colorado
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EXHIBIT "B-1"
INCLUDED PROPERTY
I. The "Theater Seats," as that term is defined in Section 3(e) ofthc Theater Lease.
2. Any other person"t property of Seller. if any, used in connection with the ownership.
operation or maintenance of the Property.
....,""""
.
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EXIIIBIT "B-2"
EXCLUDED PROPERTY
1. Any and all property owned by any of the tenants under the Leases.
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EXHIBIT "B-3"
PROPERTY DOCUMENTS
I. Current leases tor all Units
2. Service Contracts
J. Current Year Operating Budget since May 2005
-1. Operating Statements, current year, monthly basis since May 2005
5. Receivables Report as of October 15,2005
6. Certified Rent Roll
7. Real Estate Tax Bills, 2005 Tax Year
8. Property Record Cards as of May 12.2005
9. Tax Parcel Map
10. Certificate of Liability Insurance and Evidence of Property Insurance
] I. List of Personal Property
12. Plans and Specifications ~ prepared by Charles Cunnitfe Architects dated February 15. 1999
13. Al.TA Survey - December 9,1999
14. Description of pending or threatened litigation involving the Property (except Former Theater
Tenant/Guarantor Litigation described in Section to.1.2(b))
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3
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EXHIBIT "C"
FORM OF
SPECIAL WARRANTY DEED
RECORDING REQUEST BY
WHEN RECORDED MAIL TO
['*Buyer Notice Address*']
SPACE ABOVE THIS LINE RESERVED FOR RECORDER'S USE
SPECIAL WARRANTY DEED
THIS DEED is made as of this day of
L1.C, an Arizona limited liability company, as grantor, and
. as grantee:
,200_, between CC ASPEN,
"........
WITNESSETH, that the grantor has sold, remised, released, eontributed, transferred,
assigned and eonveyed. and by these presents does sell, remise, release, eontribute, transfer,
assign and convey unto the grantee the following described real property situate, lying and being
in the County of Pitkin and State of Colorado, to wit:
SEE EXHIBIT A ATTACHED HERETO AND MADE A PART HEREOF.
TOGETHER with all and singular the hereditaments and appurtenances thereto
belonging, or in anywise appertaining, and the reversion and reversions, remainder and
remainders. rents, issues and profits thereof; and all the estate, right, title, interest, claim and
demand whatsoever of the grantor, either in law or equity, of, in and to the above bargained
premises, with the hereditaments and appurtenances;
TO HAVI<; AND TU HULD the saId premises above bargained and deseribed, with the
appurtenances. unto the grantee, its successors and assigns forever. The grantor does hereby
covenant and agree that it shall and will WARRANT AND FOREVER DEFEND the above-
bargained premises in the quiet and peaceable possession of the grantee. its successors and
assigns, against all acts of grantor and no other, and subject to: all taxes and assessments; patent
reservations; all covenants, conditions, restrictions, servitudes, liens, reservations, easements,
declarations or other mallers of record or to which referenee is made in the publie reeords; any
and all mallers whieh an aecurate survey and physical inspection of the premises would'reveal;
the rights of the tenants under recorded or unrecorded leases affecting all or any portion of the
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premises as of the date hereof; zoning and other restnctlOns, reservations, prohibitions.
regulations and requirements imposed by governmental authorities; and any matters created by
or with the written consent of grantee or arising as a result of work performed by or other
activities of the grantee regarding the premises.
IN WITNESS WHEREOF, the grantor has hereunto set its hand and seal the day and
year first above written.
GRANTOR:
CC ASPEN, LLC,
an Arizona limited liability company
By: Holualoa Arizona, Inc., an Arizona
corporation
Its: Manager
By:
Name:
Title:
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CERTIFICATE OF ACKNOWLEDGMENT
STATE OF
)
) S.S.:
)
COUNTY OF
On thc _ day of in the year 200_ bcforc me, the undersigned, a
Notary Public in and for said State, personally appeared , pcrsonally
known to me or proved to me on thc basis of satisfactory evidence to bc thc individual(s) whose
name(s) is (arc) subscribed to the within instrument and acknowledged to me that he/shelthey
cxecuted the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the
instrument, thc individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument.
Notary Public
My commission expires:
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AFFIX SEAL
After Recording Plcase Return To:
Send Tax Statements To:
EXHIBITS:
Exhibit A - Property Description
3
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EXHIBIT "0"
FORM OF
BILL OF SALE, ASSIGNMENT AND ASSUMPTION
FOR V ALliABLE CONSIDERATION. receipt of which is herehy "cknowledged, the
undersigned. CC ASPEN, LLC. an Arizona limited liability company ("Seller"), hereby sells,
transfers. assigns and conveys to ("Buyer"),
the following:
I. Personal Property. All right, title and interest of Seller in and to the "Personal
Property" (as hereinafter defined).
2. Leases. All right, title and interest of Seller in and to the leases (the "Leases")
described in Schedule "A" attached hereto.
3. Service Agreements. All right, title and interest of Seller in and to the service
agr~~rn~nLS (Lhe "Service Agreements") described in Schedule "B" attached hereto.
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4. Other Intangible Property. All right, title and interest of Seller, to the extent
assignable, in and to any other "Intangible Property" (as hereinafter defined).
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5. Declarant's Rights. All right, title and interest of Seller, if any, in and to the
"Declarant's Rights" (as hereinafter defined).
This Bill of Sale, Assignment and Assumption is given pursuant to that certain agreement
(the "Purchase Agreement") dated as of__, 2006, between Seller and Buyer, providing
for the sale of certain property in the City of Aspen, County of Pitkin, State of Colorado. The
covenants. agreements and limitations provided in the Purchase Agreement with respect to the
property conveyed hereunder are hereby incorporated herein by this reference as if herein set out
in full. Subject to the covenants, agreements and limitations set forth in the Purchase
Agreement. Buyer hereby accepts the foregoing assignment and agrees to assume and discharge,
in accordance with the terms thereof, all of the obligations of Seller under the Leases and Service
Agreements. to the extent the same arise on or after the date hereof. This Bill of Sale.
Assignment and Assumption shall inure to the benefit of and shall be binding upon Seller und
Buyer, and their respective successors and assigns. The property is conveyed "AS IS, WHERE
IS" without warranty or representation, express or implied, except as expressly provided in (and
subject to the limitations of) the Purchase Agreement. As used herein, "Personal P.-ope."ty."
"Intangible Property" and "Declarant's Rights" shall have the respective meanings set forth
for the same in the Purchase Agreement.
Seller shall and does indemnify Buyer against, and agrees to hold Buyer harmless from,
all liabilities, obligations, actions. suits, proceedings and claims, and all costs and expenses
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(including. without limitation, reasonable attorneys' fees) ineurred in connection with the Leases,
based upon or arising out of any breach or alleged breach of the Leases by Seller occurring or
alleged to have occurred before the date hereof. Buyer shall and does indemnify Seller against,
and agrees to hold Seller harmless from, all liabilities, obligations, actions, suits. proceedings and
claims, and all costs and expenses (including, without limitation, reasonable attorneys' fees)
incurred in connection with the Leases, based upon or arising out of any breach or alleged breach
of the Leases by Buyer occurring or alleged to have occurred on or after the date hereof.
Seller shall and does indemnify Buyer against. and agrees to hold Buyer harmless from,
all liabilities, obligations, actions, suits, proceedings and claims, and all costs and expenses
(including, without limitation, reasonable attorneys' fees) incurred by Buyer as a result of claims
brought against Buyer. as Seller's successor in interest under the Service Agreements, based
upon or arising out of any breach or alleged breach of the Service Agreements by Seller as to an
obligation arising or accruing or alleged to have arisen or accrued before the date hereof. Buyer
shall and does indemnify Seller against, and agrees to hold Seller harmless from, all liabilities,
obligations, actions, suits, proceedings and claims, and all costs and expenses (including, without
limitation, reasonable attorneys' fees) incurred by Seller based upon or arising out of any breach
or alleged breach of the Service Agreements by Ouyer as to an obligation ari~illg or al.:l.:fuing ur
alleged to have arisen or accrued on or after the date hereof.
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Buyer ,hall and due, indemnify Seller against, and agrees to hold Seller harmless from,
all liabilities, obligations, actions, suits, proceedings and claims, and all costs and expenses
(including, without limitation, reasonable attomeys' fees) incurred by Seller based upon or
arising out of any exercise of the Declarant's Rights or the failure to exercise any of the
Declarant's Rights. whether such exercise or failure to exercise occurs or occurred or is alleged
to occur or to have occurred prior to, on or after the date hereof.
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DATED: As of [insert Closing Date)
SELLER:
CC ASPEN. LLC. an Arizona limited
liability company
By: Holualoa Arizona, Inc., an Arizona
corporation
Its: Manager
By:
Name:
Title:
Date:
2
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S"chedules:
A . List of Leases
B - List of Service Agreements
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BUYER:
By:
Name:
Title:
Date:
3
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EXHIBIT "E"
CERTlFICA nON OF NON-FOREIGN STATUS
Section 1445 of the Internal Revenue Code provides that a transferee (buyer) ofa U. S.
real property intcrcst must withhold tax if the transferor (seller) is a foreign person. To inform
the transferee (buyer) that withholding of tax is not required upon the disposition of a US. real
property interest by CC Aspen, LLC, an Arizona limited liability company ("Seller"), the
undersigned hereby certifies the following on behalf of Seller:
I. Seller is not a foreign corporation. foreign partnership, foreign trust, or foreign
estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations).
2. Seller is not a disregarded entity as defined in Treasury Regulation 9 1.1445-
2(b)(2)(iii).
3. Seller's U.S. employer identification number is 20-1797793.
4. Seller's office address is:
c/o Holualoa Arizona, Inc.
3573 E. Sunrise, Suite 225
Tucson, AZ 85718
5. Seller understands that this ccrtification may be disclosed to the Internal Revenue
Scrvice by the transferee (buyer) and that any false statement contained herein could be punished
by fine, imprisonment, or both.
Under penalties of perjury, the undersigned declares that he has cxamined this
certification and to thc bcst of his knowledge and helief it is true, correct and complctc, and he
further declares that he has the authority to sign this document on behalf of Seller.
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":rrurlllnknown document pruperty numl!.
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Executed as of the _ day of
,200_
SELLER:
CC ASPEN. LLC, an Arizona limited
liability company
By: Holualoa Arizona, Inc., an Arizona
corporation
Its: Manager
By:
Name:
Title:
Date:
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EXHIBIT "F"
FOR.'\1 OF NOTICE TO TENANTS
,2003
VIA CERTIFIED MAIL
RETURN RECEIPT REOUESTED
[TENANT NAME]
[TENANT NOTICE ADDRESS]
Attention:
Rc: Isis Theater Condominiums. Unit
406 E. Hopkins Ave.
Aspen, CO 8161 I
Security Deposit: $
Ladies and Gentlemen:
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Please be advised that, effective as of the date hereof, CC Aspen, LLC ("Seller"), sold its
interest in the referenced condominium unit and assigned its interest in your lease of such unit
(the "Lease") to ("Buyer"). Consequently, Buyer is now
your landlord and the referenced security deposit, if any, under the Lease has been transferred to
and received by Buyer. Buyer is now responsible to account to you under the Lease and at law
for the security deposit transferred by Seller. All future notices and other communication should
be delivered to Buyer at the following address:
All rent and other charges now or past due, if any, and all rent and other charges due on
or after the date hereof under the Lease should be paid and delivered as follows:
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Very truly yours,
SELLER:
CC ASPEN, LLC, an Arizona limited
liability company
By: Holualoa Arizona, Inc., an Arizona
corporation
Its: Manager
By:
Name:
Title:
Date:
BUYER:
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By:
Name:
Title:
Date:
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EXHI8IT "G"
The Isis Theater Building
Tenant List/Security Deposits
lInit No. Name of Tenant nate of T ,ease Dates of Amendments "ecuritv DeDosit
A Metropolitan/Rocky OS/28/02 9/25/03 $ 50,000.00
Mountain Cinemas, L.L.C.
C Heather Davis, Melanie ~4/01l06 , ~ 1,456.21
Burrell and Ilka Evans
~ udson Zevin, Garrett ~4/0 1/06 ~ 1,456.21
Mandich and Sarah
DeStefano
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EXHIBIT "H"
LEASE DEFAULTS
None
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EXHIBIT "I"
The Isis Theater Building
SERVICE AGREEMENTS
Platinum Maintenance Agreement hetween Seller and Thyssen Krupp Elevator Corporation. approved
by Seller on September 14, 2005 and by Thyssen Krupp Elevator Corporation on October 7. 2005
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L - RETAIL e DISPLAY
V'lINDOV'l
92 SF
EXHIBIT C
SCN.E, r,,', r.q