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RESOLUTION NO. ":::/-
Series of 2~
A RESOLUTION OF THE CITY OF ASPEN, COLORADO, AUTHORIZING AND
APPROVING A SUBLEASE AGRREMENT BETWEEN THE CITY OF ASPEN AND THE
ISIS GROUP LLC; A SUBLEASE AGREEMENT BETWEEN THE CITY OF ASPEN AND
INDEPENDENT FILMS, INC.; AND AN OCCUPANCY AND USE DEED RESTRICTION,
AGREEMENT, AND COVENANT; DELEGATING TO THE CITY MANAGER THE FINAL
PROVISIONS OF SAID DOCUMENTS AND OTHER DOCUMENTS; AND AUTHORIZING
THE CITY MANAGER AND THE MAYOR TO EXECUTE, ON BEHALF OF THE CITY
OF ASPEN, SAID DOCUMENTS AND OTHER RELATED DOCUMENTATION.'
WHEREAS, the City Council has approved and passed Ordinance No.1, Series of 2007,
authorizing and approving a Lease Purchase Agreement, an Official Statement and other
documentation in conformity with a certain Memorandum of Understanding by and among the
City, Independent Films, Inc. and Independent Films, Inc. approved and authorized by the City
Council pursuant to Resolution No. 99, Series of 2006; and
WHEREAS, the City Council in accordance with the aforementioned Resolution No. 99,
Series of 2006, expressed its determination that it is in the best interests of the City and its
inhabitants to retain the Isis Building as a theater in the downtown area suitable for exhibition of
films to the public; and
WHERES, the City of Aspen Public Facilities Authority, will acquire certain property
within the boundaries of the City, which property contains theaters commonly known as the Isis
Building; and
WHEREAS, the City Council has determined in the MOU that the lease by the City of
certain portions of the Isis Building from the Aspen Public Facilities Authority and thereafter
sublease said portions of the Isis Building to the Isis Retail Group, LLC and other portions of the
Isis Building to Independent Films, Inc.; and
WHEREAS, there has been submitted to the City Council certain documents identified
below.
NOW, WHEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF ASPEN, COLORADO, that the City Council hereby approves the following documents in
substantially the form as appended hereto, copies of which have been made available to the City
Council, authorizes the City Manager and Mayor, the Mayor Pro Tern and all other appropriate
officers and employees of the City to execute and deliver such documents, with such changes
therein, not inconsistent herewith, as are approved by the persons executing the same and
authorizes and directs the performance by the City of its obligations under such documents in the
forms in which they are executed and delivered:
* Exhibit A - A Sublease Agreement between the City of Aspen, as
Landlord, and the Isis Retail Group LLC, as Tenant;
* Exhibit B - A Sublease Agreement between the City of Aspen, as
Landlord, and Independent Films, Inc., as Tenant; and
* Exhibit C - An Occupancy and Use Deed restriction, Agreement, and
Covenant; and
"''''' /;d-dAU d 7 -
g
,2007.
1, 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 ~f'1t~
eX! ' 2007.
/
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JPW. saved: 1I23/2007-516-G:\john\word\agr\lsis\Resolution City.doc
THE CITY OF ASPEN
Memorandum
To: Aspen City Council .
From: Paul Menter, Director of Finance and Administrativ IS;rvi~
Scott Newman, CF A, Senior Financial Analyst - De (& Investment
Management
Date: January 24, 2007
Att: Ordinance No.l, (Series of2007)
Re: Isis Certificate Issue Ordinance, Second Reading, January 29, 2007
Summary: Attached please find a copy of the above captioned proposed ordinance for
Council action on January 29, 2007. This ordinance: -
1. Authorizes a Lease Purchase Agreement bor the Isis between the City of Aspen
and the Aspen Public Facilities Authorty.
2. Approves an Official Statement for marketing and sale ofthe Isis Certificates of
Participation.
3. Acknowledges a Mortgage and Indenture of Trust for the Isis, the issuance of
certificates of participation for its acquisition by the Public Facilities Authority,
and a Certificate Purchase Agreement for the sale of those certificates, and
4. Delegates authority to the City's Finance Director to determine certain
provisions of the Lease Purchase Agreement within established parameters
defined within the ordinance.
Please feel free to contact me if you have any questions or concems regarding this
information.
Background: The City entered into a Memorandum of Understanding (MOU) dated
as of November 29,2006 by and among the City, Independent Films, Inc., a
Colorado nonprofit corporation doing business as Aspen FilmFest ("AspenFilm"),
and Isis Property Group LLC, a Colorado limited liability company ("Isis Group")
in which it has been determined that it is in the best interests of the City and its
January 24, 2007
residents to retain a theater in the downtown area suitable for the exhibition of films
to the public.
The City of Aspen Public Facilities Authority (the "Corporation") will acquire the
Isis Theatre through the issuance of approximately $8.5 million in taxable
certificates of participation, and lease the property to the City pursuant to a Lease
Purchase Agreement between the Corporation and the City. The City will then
. sublease portions of the leased property to the Isis Group and AspenFilm.
The Lease will be subject to annual appropriations and will not constitute a
mandatory charge or requirement against the City in any ensuing year.
As noted above, the Corporation will finance the acquisition and improvement of the
Isis with the proceeds of its "City of Aspen Public Facilities Authority Taxable
Certificates of Participation (Isis Theatre Project), Series 2007A which will
represent undivided interests in certain payments pursuant to the Lease and will be
payable solely from the sources provided in the Lease and the Indenture. They will
not constitute multi-year fiscal obligations of the City.
Approval of the ordinance delegates the authority to determine certain terms of the
Lease and subleases to the City Finance Director, within parameters established in
the ordinance.
Recommendation: City staff plan to work with the City's underwriter, Stifel,
Nicholaus to market the certificates of participation Thursday, February 1st.
Approval of this ordinance is a necessary step in providing authority for City staff to
take this action.
2
,
ORDINANCE NO. --1- (SERIES OF 2007)
AN ORDINANCE OF THE CITY OF ASPEN, COLORADO, AUTHORIZING
AND APPROVING A LEASE PURCHASE AGREEMENT, AN OFFICIAL
STATEMENT AND OTHER DOCUMENTATION RELATING TO SUCH
LEASE PURCHASE AGREEMENT; ACKNOWLEDGING A MORTGAGE
AND INDENTURE OF TRUST, CERTAIN CERTIFICATES OF
PARTICIPATION ISSUED PURSUANT THERETO, A CERTIFICATE
PURCHASE AGREEMENT AND RELATED DOCUMENTATION;
DELEGATING THE AUTHORITY TO THE CITY'S FINANCE DIRECTOR
TO DETERMINE CERTAIN PROVISIONS OF THE LEASE PURCHASE
AGREEMENT AND OTHER DOCUMENTS; AND PROVIDING OTHER
DETAILS IN CONNECTION WITH SUCH LEASE PURCHASE
AGREEMENT AND RELATED DOCUMENTATION.
WHEREAS, the City of Aspen (the "City"), in the County of Pitkin and State of
Colorado (the "State"), is a legally and regularly created, established, organized and existing
municipal corporation under the provisions of Article XX of the Constitution of the State of
Colorado and the home rule charter of the City (the "Charter") (all capitalized terms used and not
otherwise defined in the recitals hereof shall have the respective meanings assigned in Section 1
ofthis Ordinance); and
WHEREAS, under the Charter, the City is possessed of all powers which are necessary,
requisite or proper for the government and administration of its local and municipal matters, all
powers which are granted to home rule municipalities by the Colorado Constitution, and all
rights and powers that now or hereafter may be granted to municipalities by the laws of the State
of Colorado; and
WHEREAS, pursuant to Section 1.4 of the Charter, the City is authorized to enter into
one .or more leases or lease-purchase agreements for land, buildings, equipment and other
property for governmental or proprietary purposes; and
WHEREAS, the City Council of the City (the "City Council") has, in the Memorandum
of Understanding (the "MOU") by and among the City, Independent Films, Inc., a Colorado
nonprofit corporation doing business as Aspen FilmFest ("AspenFilm"), and Isis Property Group
LLC, a Colorado limited liability company ("Isis Group"), approved by the City Council in its
Resolution No. 99, Series of 2006, expressed its determination that it is the best interests of the
City and its inhabitants to retain a theater in the downtown area suitable for the exhibition of
films to the public; and
WHEREAS, the City of Aspen Public Facilities Authority, a Colorado nonprofit
corporation (the "Corporation"), will acquire certain property within the boundaries of the City,
which property contains theaters commonly known as the Isis Theater; and
WHEREAS, the Corporation desires to make certain improvements to such property and
to lease such improved property (the "Leased Property") to the City pursuant to a Lease Purchase
Agreement between the Corporation, as lessor, and the City, as lessee (the "Lease"); and
4843-8602-8801.4
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,
WHEREAS, the City has determined in the MOU that the lease by the City of the Leased
Property serves a public purpose, and the City consequently desires to lease the Leased Property
from the Corporation pursuant to the Lease; and
WHEREAS, the Corporation will finance the acqulSltlOn of and, pursuant to a
Renovation Agreement (the "Renovation Agreement") between the Corporation and the City, the
improvement of the Leased Property with the proceeds of its "City of Aspen Public Facilities
Authority Taxable Certificates of Participation (Isis Theater Project), Series 2007 A" (the
"Certificates"), which Certificates will be delivered pursuant to a Mortgage and Indenture of
Trust dated as of the date of the Lease (the "Indenture") between the Corporation and American
National Bank, as trustee (the "Trustee"); and
WHEREAS, the Lease shall expire on December 31 of any City fiscal year (a "Fiscal
Year") if the City has, on such date, failed, for any reason, to appropriate sufficient amounts to
pay all Base Rentals (as defined in the Lease) scheduled to be paid and all Additional Rentals (as
defined in the Lease) estimated to be payable in the next ensuing Fiscal Year, and in certain other
circumstances set forth in the Lease, and shall not constitute a mandatory charge or requirement
against the City in any ensuing budget year unless the City decides to renew the Lease by
appropriating the necessary such amounts; and
WHEREAS, the City currently expects that the Corporation will enter into a commitment
(the "Commitment") for the delivery by a AAAI Aaa-rated insurer of municipal obligations (the
"Certificate Insurer") of an insurance policy (the "Certificate Insurance Policy") guaranteeing the
payment of the principal of and interest on the Certificates when due; and
WHEREAS, to further secure the payments to be made on the Certificates, the
Corporation may purchase from the Certificate Insurer a surety bond (the "Reserve Fund Surety
Bond") to fund the Reserve Fund established by the Indenture for the payment of the Certificates
pursuant to the terms and provisions of a guaranty agreement between the Corporation and the
Certificate Insurer (the "Financial Guaranty Agreement"); and
WHEREAS, the Certificates shall evidence assignments of proportionate undivided
interests in certain payments pursuant to the Lease and shall be payable solely from the sources
provided in the Lease and the Indenture; and
WHEREAS, no provision of the Certificates, the Indenture, the Lease or any other
document described herein shall be construed or interpreted (a) to directly or indirectly obligate
the City to make any payment in any Fiscal Year in excess of amounts appropriated for such
Fiscal Year; (b) as creating a debt or multiple fiscal year direct or indirect debt or other financial
obligation whatsoever of the City within the meaning of Article XI, Section 6 or Article X,
Section 20 of the Colorado Constitution or any other constitutional or statutory limitation or
provision; (c) as a delegation of governmental powers by the City; (d) as a loan or pledge of the
credit or faith of the City or as creating any responsibility by the City for any debt or liability of
any person, company or corporation within the meaning of Article XI, Section 1 of the Colorado
Constitution; or (e) as a donation or grant by the City to, or in aid of, any person, company or
corporation within the meaning of Article XI, Section 2 of the Colorado Constitution; and
4843-8602-8801.4
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f
WHEREAS, the City has been presented with forms of the Lease, the Indenture, the
Renovation Agreement and a Certificate Purchase Agreement (the "Certificate Purchase
Agreement") pursuant to which the Certificates are to be sold to Stifel, Nicolaus & Company,
Incorporated (the "Underwriter") and the Preliminary Official Statement relating to the offer and
sale ofthe Certificates (the "Preliminary Official Statement"); and
WHEREAS, pursuant to Section 6.8 of the Charter, the City's Director of Finance (the
"City Finance Director") shall perform such duties pertaining to the City's department of finance
as required by the City Council; and
WHEREAS, the City Council desires to delegate the authority to the City Finance
Director to determine certain terms of the Lease and other documents as set forth herein, all in
accordance with the provisions of this Ordinance; and
WHEREAS, in order to implement the transactions described above, the City Council
desires (a) to authorize and approve the execution and delivery by the City of, and the
performance by the City of its obligations under, the Lease and certain other documents
described herein; (b) to authorize, and approve the use in the offering and sale of the Certificates
of, the Preliminary Official Statement and a final official statement substantially in the form of
the Preliminary Official Statement (the "Official Statement"); (c) to authorize the execution of
the Official Statement; (d) to acknowledge the Indenture, the Certificates, the Certificate
Purchase Agreement, the Commitment and the Financial Guaranty Agreement; and (e) to
authorize, approve, ratify, make findings and take other actions with respect to the foregoing and
related matters.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF ASPEN, COLORADO:
Section 1. Definitions. All capitalized terms used and not otherwise defined in this
Ordinance shall have the respective meanings assigned in the Lease.
Section 2. Approval and Authorization of Documents. The City Council hereby
approves the following documents, copies of which have been made available to the City
Council, authorizes the Mayor, the Mayor Pro Tem and all other appropriate officers and
employees of the City to execute and deliver, and to affix the seal of the City to, such documents
in the forms made available to the City Council, with such changes therein, not inconsistent
herewith, as are approved by the persons executing the same (whose signature thereon shall
constitute conclusive evidence of such approval) and authorizes and directs the performance by
the City of its obligations under such documents in the forms in which they are executed and
delivered:
(a) the Lease; provided that:
(I) the Base Rentals payable by the City pursuant to the Lease shall
not exceed $700,000 per year; and
(2) the Scheduled Lease Term (as defined in the Lease) shall not
extend beyond September 1,2038;
4843-8602-8801.4
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,
(b) the Renovation Agreement; and
(c) the Continuing Disclosure Undertaking of the City (the "Continuing
Disclosure Undertaking") dated as of the date of delivery of the Certificates.
Section 3. Acknowledgement and Approval of Corporation Documents. The City
Council hereby acknowledges and approves the execution and delivery by the Corporation of,
and the performance by the Corporation of its obligations under, the following documents, in
substantially the forms made available to the City Council:
(a) the Indenture; provided that:
(I) the aggregate principal amount of the Certificates shall not exceed
$10,000,000;
(2) the aggregate principal of and interest on the Certificates maturing
in any year during the term thereof shall not exceed $700,000;
(3) the final maturity of Certificates shall be not later than September
1,2038; and
(4) the net effective interest rate shall not exceed 6.375%;
(b) the Certificates; provided that the Certificates shall not be inconsistent
with the Indenture; and
(c) the Certificate Purchase Agreement.
Section 4. Certificate Insurance Policy and Reserve Fund Surety Bond Documents.
The City Council hereby acknowledges and approves the execution and delivery by the
Corporation of, and the performance by the Corporation of its obligations under, the following
documents:
(a) the Commitment; provided that the Corporation may opt to issue the
Bonds without the Certificate Insurance Policy, and may accordingly opt not to enter into
the Commitment, if, in the judgment of the City Finance Director, it is not feasible to
obtain such a Commitment or the cost of doing so is uneconomic; and
(b) the Financial Guaranty Agreement; provided that the Corporation may opt
to issue the Bonds without the Reserve Fund Surety Bond, and may accordingly opt not
to enter into the Financial Guaranty Agreement, if, in the judgment of the City Finance
Director, it is not feasible to obtain such a Reserve Fund Surety Bond or the cost of doing
. .
so IS uneconomic.
Section 5. Approval of Official Statement and Miscellaneous Documents. The City
Council hereby: ratifies and approves the distribution and use of the Preliminary Official
Statement; authorizes and directs the City staff to prepare the Official Statement for use in
connection with the sale of the Certificates in substantially the form thereof presented at or prior
4843-8602-8801.4
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to the meeting at which this Ordinance is adopted or as otherwise made available to the City
Council, with such changes therein, if any, not inconsistent herewith, as are approved by the
Mayor, or in the Mayor's absence, the Mayor Pro Tem (whose execution thereof shall constitute
conclusive evidence of approval of the City); and authorizes and approves the execution of all
documents and certificates necessary or desirable to effectuate the execution and delivery of the
Lease, the issuance of the Certificates and the transactions contemplated hereby. The Mayor, or
in the Mayor's absence, the Mayor Pro Tem, is hereby authorized and directed to execute the
Official Statement and the Mayor, the Mayor Pro Tem, the City Clerk or, in the absence thereof,
the Deputy City Clerk, and all other officers of the City are hereby authorized and directed to
execute all of the documents and certificates necessary or desirable to effectuate the execution
and delivery of the Lease, the issuance of the Certificates and the transactions. contemplated
hereby (execution by the parties thereto shall constitute the City Council's approval of such
documents and certificates in the form so executed).
Section 6. Delegation of Authority to City Finance Director. The City Council
hereby delegates to the City Finance Director the authority to determine the terms. of the
documents set forth in each of the provisos in Sections 2 through 4 hereof, subject to the
parameters set forth in each of such provisos.
Section 7. Consent to Assignment and Sale of Proportionate Interests. The City
Council hereby acknowledges and consents to the assignment by the Corporation of all rights,
title and interest of the Corporation in, to and under the Lease to the Trustee, and the delegation
by the Corporation of all duties of the Corporation under the Lease to the Trustee. The City
Council hereby acknowledges and approves the assignment or sale of proportionate interests in
rights to receive certain payments under the Lease.
Section 8. Additional Authorizations. The officers, employees and agents of the City
are authorized and directed to take all action necessary or appropriate to carry out the provisions
of this Ordinance and the documents referred to herein and to carry out the transactions
described herein or in such documents, including, without limitation, the execution and delivery
of such certificates as may reasonably be required by the Underwriter and the Certificate Insurer,
relating, among other matters, to the tenure and identity of the officials of the City and the City
Council, the receipt of the purchase price for the Certificates, the absence of litigation, pending
or threatened, the sale and delivery of the Certificates and the investment of the proceeds of the
Certificates.
Section 9. Year to Year Obligations of the City. No provision of this Ordinance, the
Lease, the Indenture, the Certificates, or any other document described herein shall be construed
or interpreted (a) to directly or indirectly obligate the City to make any payment in any Fiscal
Year in excess of amounts appropriated for such Fiscal Year; (b) as creating a debt or multiple
fiscal year direct or indirect debt or other financial obligation whatsoever of the City within the
meaning of Article XI, Section 6 or Article X, Section 20 of the Colorado Constitution or any
other constitutional or statutory limitation or provision; (c) as a delegation of governmental
powers by the City; (d) as a loan or pledge of the credit or faith of the City or as creating any
responsibility by the City for any debt or liability of any person, company or corporation within
the meaning of Article XI, Section I of the Colorado Constitution; or (e) as a donation or grant
4843-8602-8801.4
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by the City to, or in aid of, any person, company or corporation within the meaning of Article XI,
Section 2 of the Colorado Constitution.
Section 10. Ratification of Prior Actions. All actions heretofore taken (not
inconsistent with the provisions of this Ordinance) by the City Council, the City Finance
Director, or the other officers and employees of the City that are directed toward the lease
purchase financing for the purposes herein set forth are hereby ratified, approved and confirmed.
Section 11. Headings. The headings to the various sections and paragraphs to this
Ordinance have been inserted solely for the convenience of the reader, are not a part of this
Ordinance, and shall not be used in any manner to interpret this Ordinance.
Section 12. Severability. It is hereby expressly declared that all provisions hereof and
their application are intended to be and are severable. In order to implement such intent, if any
provision hereof or the application thereof is determined by a court or administrative body to be
invalid or unenforceable, in whole or in part, such determination shall not affect, impair or
invalidate any other provision hereof or the application of the provision in question to any other
situation; and if any provision hereof or the application thereof is determined by a court or
administrative body to be valid or enforceable only if its application is limited, its application
shall be limited as required to most fully implement its purpose.
Section 13. Repealer. All orders, bylaws, ordinances and resolutions of the City, or
parts thereof, inconsistent or in conflict with this Ordinance, are hereby repealed to the extent
only of such inconsistency or conflict.
Section 14. Declaration and Description of Emergency. The City Council hereby
declares that, because there is currently an opportunity to issue and sell the Certificates in a
favorable interest rate market, and because of the impending scheduled termination of the option
to purchase the Leased Property, an emergency exists. The City Council herby further declares
that, due to such emergency, this Ordinance is necessary to the immediate preservation of the
public property, health, peace and safety of the residents of the City and is being adopted as an
emergency ordinance pursuant to Section 4.11 of the Charter.
[remainder of page intentionally left blank]
4843-8602-8801.4
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INTRODUCED at a regularly scheduled meeting of the City Council of the City of
Aspen on the 22nd day of January, 2007, AND PASSED ON FIRST READING by a vote of
FOR and AGAINST.
ATTEST:
CITY CLERK
MAYOR
FINALLY PASSED on second and final reading at a special meeting of the City Council
of the City of Aspen on the _ day of , 2007, by a vote of _ FOR and
_ AGAINST; and ordered published within ten days of such final passage.
ATTEST:
CITY CLERK
MAYOR
4843-8602-8801.4
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January 24, 2007
TO: Helen Klanderud, President
Aspen Public Facilities
Pursuant to Article III Section 3 of the Bylaws of the City of Aspen Public
Facilities Authority, we, the undersigned members of the Authority, request a
special meeting of the Public Facilities Authority, Monday, January 29, 2007, at
4:30 p.m. The agenda for that meeting will be:
Approval Resolution Issuing Certificates of Participation
~~~
, Kathryn ch
specreq
THE CITY OF ASPEN
Memorandum
From: Paul Menter City of Aspen Director of Finance and A . ces,
Public Facilities Authority Treasurer
Scott Newman CF A, Senior Financial Analyst - Debt vestment Mgmt
Date: January 24, 2007
To: Aspen Public Facilities Authority Board of Directors
Att: Resolution No. I, (Series of2007)
Re~Resolution authorizing issuance ofIsis Certificates of Participation and
~pproving acquisition documents, January 29,2007.
Summary: Attached please find a copy of the above captioned proposed resolution for
Authority action on January 29, 2007. This resolution provides approval for the
following documents related to the issuance of approximately $8.45 million in
taxable certificates of participation for acquisition, renovation, and operation of the
Isis:
~ Lease Purchase Agreement by and between the Corporation and the
City (the "Lease");
(b) Mortgage and Indenture of Trust by and between the Corporation and
American National Bank, as trustee (the "Indenture");
(c) Certificate Purchase Agreement by and among the Corporation, the
City and Stifel, Nicolaus & Company, Incorporated (the
"Underwriter") (the "Certificate Purchase Agreement");
(d) Renovation Agreement by and between the Corporation and the City
(the "Renovation Agreement");
(e) Taxable Certificates ofParticioation (Isis Theater Project), Series 2007
(the "Certificates") in the form attached as an Appendix to the
Indenture;
January 24, 2007
(f) Cornmitment to Issue a Municipal Bond Insurance Policv between the
Corporation and Financial Security Assurance Inc. (the "Certificate
Insurer");
(g) Reserve Fund Guarantv Agreement between the Corporation and the
Certificate Insurer;
(h) Occupancv and Use Deed Restriction, Agreement, and Covenant
between the Corporation and the City;
(i) Assignment of Declarant Rights and Irrevocable Proxv Coupled with
an Interest in Voting Rights, between the Corporation and the City;
G) Purchase Option Agreement between the Corporation and Isis Retail
Group LLC. a Colorado limited liability company; and
(k) Purchase Option Agreement between the Corporation and Independent
Films. Inc.. a Colorado nonprofit corporation doing business as Aspen
FilmFest.
These documents are available for review in the City Finance Directors office and a
packet including all of these documents will be available at the Public Facilities
Authority meeting on January 29, 2007.
Background: The City entered into a Memorandum of Understanding (MOD) dated
as of November 29,2006 by and among the City, Independent Films, Inc., a
Colorado nonprofit corporation doing business as Aspen FilmFest ("AspenFilm"),
and Isis Property Group LLC, a Colorado limited liability company ("Isis Group")
in which it has been determined that it is in the best interests of the City and its
residents to retain a theater in the downtown area suitable for the exhibition of films
to the public.
The City of Aspen Public Facilities Authority (the "Corporation") will acquire the
Isis Theatre through the issuance of approximately $8.5 million in taxable
certificates of participation, and lease the property to the City pursuant to a Lease
Purchase Agreement between the Corporation and the City. The City will then
sublease portions of the leased property to the Isis Group and AspenFilm.
The Lease will be subject to annual appropriations and will not constitute a
mandatory charge or requirement against the City in any ensuing year.
As noted above, the Corporation will fmance the acquisition and improvement of the
Isis with the proceeds of its "City of Aspen Public Facilities Authority Taxable
Certificates of Participation (Isis Theatre Project), Series 2007A which will
represent undivided interests in certain payments pursuant to the Lease and will be
payable solely from the sources provided in the Lease and the Indenture. They will
not constitute multi-year fiscal obligations of the City.
2
January 24, 2007
Approval of the ordinance delegates the authority to determine certain terms of the
Lease and subleases to the City Finance Director, within parameters established in
the ordinance.
Recommendation: City staff plan to work with the City's underwriter, Stifel,
Nicholaus to market the certificates of participation Thursday, February I st.
Approval of this resolution is a necessary step in providing authority for City staff to
take this action.
3
STATE OF COLORADO
)
) ss.
)
CITY OF ASPEN
I, [Kathryn Koch), hereby certify that:
I. I am the Secretary of the City of Aspen Public Facilities Authority (the
"Corporation").
2. Attached is a true and correct copy of a resolution (the "Resolution") adopted by
the Board of Directors (the "Board") of the Corporation at a meeting held on January 29, 2007.
3. The Resolution was duly moved, seconded and adopted by the affirmative vote of
a majority of the members of the Board at such meeting as follows:
Board Member
Yes
No
Absent
Abstaining
Jack Johnson
Helen Kalin Klanderud
Kathryn Koch
Paul Menter
Torre
Jasmine Tygre
J.E. DeVilbliss
V'
v
v
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4. The meeting at which the Resolution was adopted was noticed, and all
proceedings relating to the Resolution were conducted, in accordance with the articles of
incorporation and bylaws and all applicable rules, regulations, resolutions and procedures of the
Corporation and in accordance with all applicable laws.
WITNESS my hand as of this 29th day of January, 2007.
By
Secretary
4843-2286-0033.3/1
RESOLUTION
OF
THE BOARD OF DIRECTORS
OF
CITY OF ASPEN PUBLIC FACILITIES AUTHORITY
RESOLVED by the Board of Directors of the City of Aspen Public Facilities Authority (the
"Corporation") that:
1. Principal Documents. Each of the following documents and the consummation
of the transactions contemplated thereunder are hereby authorized and approved and the
President, the Treasurer, the Secretary, and all other appropriate officers of the Corporation are
hereby authorized to execute and deliver each of the following documents, in substantially the
forms provided to the Board of Directors in connection with this meeting, with such changes
therein, if any, not inconsistent herewith or with Ordinance No.1, Series of 2007, of the City of
Aspen, Colorado (the "City"), as are approved by the officers of the Corporation executing the
same (whose signature thereon shall constitute conclusive evidence of such approval):
(a) Lease Purchase Agreement by and between the Corporation and the City
(the "Lease");
(b) Mortgage and Indenture of Trust by and between the Corporation and
American National Bank, as trustee (the "Indenture");
(c) Certificate Purchase Agreement by and among the Corporation, the City
and Stifel, Nicolaus & Company, Incorporated (the "Underwriter") (the "Certificate
Purchase Agreement");
(d) Renovation Agreement by and between the Corporation and the City (the
"Renovation Agreement");
(e) Taxable Certificates of Participation (Isis Theater Project), Series 2007
(the "Certificates") in the form attached as an Appendix to the Indenture;
(f) Commitment to Issue a Municipal Bond Insurance Policy between the
Corporation and Financial Security Assurance Inc. (the "Certificate Insurer");
(g) Reserve Fund Guaranty Agreement between the Corporation and the
Certificate Insurer;
(h) Occupancy and Use Deed Restriction, Agreement, and Covenant between
the Corporation and the City;
(i) Assignment of Declarant Rights and Irrevocable Proxy Coupled with an
Interest in Voting Rights, between the Corporation and the City;
4843-2286-00333/2
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G) [Purchase Option Agreement] between the Corporation and Isis Retail
Group LLC, a Colorado limited liability company; and
(k) [Purchase Option Agreement] between the Corporation and Independent
Films, Inc., a Colorado nonprofit corporation doing business as Aspen FilmFest.
2. Official Statement. The distribution and use in connection with the offering of
the Certificates of the Preliminary Official Statement relating to the Certificates and the
certification by the President of the Corporation that the Preliminary Official Statement is
"deemed final" as of its date for purposes of Rule 15c2-l2 under the Securities Exchange Act of
1934 are hereby approved and ratified; and the Board of Directors of the Corporation authorizes
and directs the preparation, distribution and use of, and authorizes and directs the execution by
the President of the Corporation of, an Official Statement for use by the Underwriter in
connection with the sale of the Certificates in substantially the form of the Preliminary Official
Statement, with such changes therein, if any, not inconsistent herewith, as are approved by the
President of the Corporation (whose signature thereon shall constitute conclusive evidence of
such approval).
3. Other Actions, Documents and Certificates. The officers of the Corporation
are further authorized and directed (a) to execute and deliver all other documents and certificates
necessary or desirable to effectuate the issuance or administration of the Certificates, the
investment of proceeds of the Certificates and the transactions contemplated hereby and by the
other documents, certificates and other papers referred to herein; and (b) to take any or all
actions they determine to be necessary or desirable to complete the transactions described in or
contemplated by any of the documents, certificates or other papers referred to herein.
[Remainder of page intentionally left blank]
4843-2286-0033.3/3
3
PASSED, ADOPTED AND APPROVED this January 29,2007.
CITY OF ASPEN PUBLIC FACILITIES CORPORATION
By
[Helen Kalin Klanderud), President
By
[Kathryn Koch), Secretary
[Signature Page to Corporation Resolution]
4843-2286-00333/4
4
.
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TO:
Mayor and Members of Council
FROM:
John P. Worcester
RE:
January 29, 2007
Resolution No. ~, Series of 2007 - Approval of Isis Subleases and Deed
Restrictions
DATE:
Attached for your review and consideration is a resolution that, if approved, would approve three
separate documents and authorize the Mayor or City manager to execute on behalf of the City of
Aspen. These documents relate to the Isis Building purchase.
The three documents are appended to the proposed resolution and include:
(a) a sublease between the City and the Isis Retail Group, LLC;
(b) a sublease between the City and Independent Films, Inc. (FilmFest); and
(c) the proposed deed restrictions for the Isis Building.
Please note that the subleases are not in final form as the parties are still working out certain
details. Hopefully, by Monday's meeting the remaining issues will have been resolved.
cc; City Manager
JPW- saved: 1/25/2007_190~G:\john\word\agr\Isis\memo-City-reso.doc
~H~rr A
SUBLEASE
by and between
The City of Aspen ("City" or "Landlord"),
and
Isis Retail Group, LLC
a Colorado Limited Liability Company
("Tenant")
Dated:
[Date of Issuance]
Isis Building
Aspen, Colorado
/ /Z7-/trr .JfW Pt::-FI
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01. Definitions and Construction of Terms 6
ARTICLE II
GRANT AND TERM
Section 2.01. Premises 6
Section 2.02. Assignment of Declarant and Owners Rights 7
Section 2.03. COP Financing 8
Section 2.04. Term 9
Section 2.05. Rights to Purchase 10
ARTICLE III
CONSTRUCTION
Section 3.01. Landlord's Construction 12
Section 3.02. Tenant's Work 12
Section 3.03. Remodel of Lobby Area for Retail Use 12
ARTICLE IV
RENT
Section 4.01. Base Rent 13
Section 4.02. Reserve Account 13
ARTICLE V
USE AND OPERATION
Section 5.01. Use of Premises 14
Section 5.02. Signs 14
ARTICLE VI
COMMON AREAS
Section 6.01. Use of Common Areas 15
Section 6.02. Operation of Common Areas 15
Section 6.03. Common Area Expenses and Tenant's Pro-
Rata Share 16
Section 6.04. Tenant's Obligation for COP Administrative
Costs 16
Section 6.05. Changes to the Building or Premises 16
ARTICLE VII
REAL EST ATE TAXES
Section 7.01. Tenant's Tax Obligation 17
ARTICLE VIII
UTILITIES
Section 8.01. Utilities 17
ARTICLE IX
MAINTENANCE AND ALTERATIONS
Section 9.01. Maintenance and Alterations 18
Section 9.02. Nuisance and Cleanliness 18
Section 9.03. Alteration of Premises 19
ARTICLE X
INSURANCE
Section 10.01. Insurance During Term 19
Section 10.02. Landlord Not Liable for Damages -Covenant to
Hold Harmless 20
ARTICLE XI
FIRE AND OTHER CASUALTY
Section 11.01. Repair of Presmises and Building 21
ARTICLE XII
EMINENT DOMAIN
Section 12.01. Condemnation 22
Section 12.02. Damages 22
Section 12.03. Temporary Taking 22
ARTICLE XIII
ASSIGNMENT, SUBLETTING AND RIGHTS TO LEASE OR
ACQUIRE ASPENFILM PREMISES
Section 13.01. Assignment and Subletting by Tenant 23
Section 13.02. Right to Acquire AspenFilm Lease 24
2
Section 13.03. AspenFilm's Right to Acquire Tenant's Lease
Section 13.04. AspenFilm's Right to Negotiate Acquisition of
the Property
Section 13.05. AspenFilm's Right to Acquire Interests in
Tenant
26
27
28
ARTICLE XIV
ESTOPPEL CERTIFICATE, ATTORNMENT AND SUBORDINATION
Section 14.01. Estoppel Certificates 30
Section 14.02. Subordinantion, Non-Disturbance and
Attornment 30
ARTICLE XV
TENANT'S RIGHT TO MORTGAGE
Section 15.01. Tenant's Right to Encumber 31
ARTICLE XVI
QUIET ENJOYMENT
Section 16.01. Landlord's Covenants 31
Section 16.02. Landlord's Mortgages 31
ARTICLE XVII
DEFAULT
Section 17.01. Default by Tenant 32
Section 17.02. Abandonment 33
Section 17.03. Surrender of Premises 33
Section 17.04. Landlord's Default 34
Section 17.05. Interest on Late Payment 34
Section 17.06. Attorney's Fees 34
Section 17.07. Remedies Cumulative 34
Section 17.08. No Waiver of Default 34
ARTICLE XIX
MISCELLANEOUS
Section 19.01. AH Units 35
Section 19.02. Memorandum of Lease 35
Section 19.03. Notices 35
Section 19.04. Entire Agreement 36
Section 19.05. Binding Effect 36
3
Section 19.06.
Section 19.07.
Section 19.08.
Section 19.09.
Consents
Constrcution
Deed Restrictions
Payments Due from Landlord
EXHIBITS:
Ex. MOU-1 - Memorandum of Understanding
Ex. A - The Premises Plan
Ex. DR-1 - Occupancy and Use Deed Restriction, Agreement, and Covenant
Ex. B - Renovation Agreement
Ex C - Base Rent Schedule
Ex. D - Statement of members of Tenant LLC
4
36
36
37
37
SUBLEASE
THIS SUBLEASE (the "Lease") is entered into as of the 16th day of February,
2007, between, The City of Aspen, a Colorado Municipal Corporation acting through its
City Council, the address of which is 130 South Galena Street, Aspen, CO 81611, (the
"City" or "Landlord"), and Isis Retail Group, LLC., a Colorado Limited Liability
Company, the address of which is 9 Pyramid Road, Aspen, CO 81611 ("Tenant").
WHEREAS, City, Tenant and Independent Films, Inc., a Colorado nonprofit
corporation d/b/a Aspen Filmfest ("AspenFilm")have entered into a Memorandum of
Understanding (the "MOU"), a true copy of which is attached hereto at Exhibit MOU-1,
concerning the acquisition, redevelopment and leasing of the Isis Theater Building (the
"Building") located at 406 East Hopkins, Aspen Colorado. All capitalized terms in the
MOU shall be given the same meaning herein; and,
WHEREAS, The City of Aspen Public Facilities Authority, a non-profit
corporation ("Authority"), the address of which is 130 South Galena Street, Aspen,
CO 81611, is the owner of the Commercial Unit, ("Commercial Unit A") and Units C
and D (the "AH Units") in the Building, is the "Authority" referred to in the MOU, and
has entered into a Lease Purchase Agreement with the City for the rental of said units,
which Lease Purchase Agreement is recorded at reception no. , of the
records of the Clerk and Recorder of Pitkin County, Colorado, (the "Authority Lease");
and
WHEREAS, City is hereby subleasing to Tenant, its interest in the Authority
Lease as it pertains to the Premises, and is also executing this Lease for the purpose of
memorializing its obligations, duties and rights, other than as Landlord, as set forth in
the MOU with respect to the Tenant's rights and obligations set forth herein and in the
MOU; and
WHEREAS, it is intended that, Commercial Unit A, as defined in the
Condominium Declaration for Isis Theater Condominiums ("Declaration") recorded in
the Pitkin County Clerk and Recorder's records at reception #438433 on December 9,
1999, and as shown on the Condominium Plat recorded in the Pitkin County Clerk and
Recorder's records at Plat Book 52, Page 1, on December 9, 1999 (the "Plat"), be
reconfigured and recondominiumized (the "Recondominiumization") to create a
separate commercial condominium unit for the Premises leased hereunder, to be known
as "Commercial Unit 1," and to create Commercial Unit 2, to be leased by AspenFilm,
as a tenant thereof under a separate lease agreement with Landlord (the "AspenFilm
Lease"), all substantially in accordance with the plan shown on Exhibit A, attached
hereto and incorporated herein by this reference (the "Premises Plan"); and
5
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01
Definitions and Construction of Terms-
Defined terms used in this Lease which are also used in the Authority Lease shall
have the same meaning as in the Authority Lease, unless otherwise specified herein or
unless the context requires a meaning unique to this Lease. In the event of any
inconsistency between the meaning of a defined term in the Authority Lease and the
meaning of a defined term that makes sense in the context of this Lease, the meaning
that makes sense in the context of this Lease shall be given paramount effect; provided,
however, the parties hereto acknowledge that this Agreement is intended to comply in
all respects with the Authority Lease and it shall be interpreted to be consistent with the
intent of the Authority Lease.
ARTICLE II
GRANT AND TERM
Section 2.01
Premises
(a) In consideration of the sums to be paid and the obligations to be
performed by each of the parties pursuant to this Lease, Landlord hereby leases to
Tenant, and Tenant rents from Landlord, premises consisting of the following which are
contained in the Building: (i) a portion of the Premises shown on the Premises Plan and
described thereon as Commercial Unit 1; and (ii) two existing affordable housing
Condominium Units C & D ("AH Units") together with all improvements and equipment
now or hereafter erected or installed thereon, all of which are subject to the Declaration
(collectively, Commercial Unit 1 and Units C and D shall be referred to herein as the
"Premises"). AspenFilm shall lease pursuant to a separate Sublease Agreement
Commercial Unit 2. The portion of Commercial Unit A that is included in the Premises
shall be referred to herein as Commercial Unit 1, and the portion of Commercial Unit A
that is to be leased by AspenFilm shall be referred to herein as "Commercial Unit 2",
notwithstanding the pendency of completion of the Recondominiumization.
(b) Commercial Unit 1 shall be deemed to contain, as of the date hereof,
three thousand seven hundred (3,700) Square Feet of floor area ("Commercial Unit 1
Floor Area"). Until such time as the Recondominiumization is completed, Tenant's
share of common expense and utility charges (not otherwise separately metered or
assessed to Commercial Unit 1) (the "Tenant's Commercial Unit Pro-Rata Share"),
6
shall be seventeen (17%) percent of those assessed to Commercial Unit A
(3,700/21,664 (total floor area of Commercial Unit A). The Commercial Unit 1 Floor Area
calculation shall be subject to adjustment in the event any mezzanines are constructed
within the boundaries of Commercial Unit 1 so that the Tenant's Commercial Unit Pro-
Rata Share shall be the percentage of floor area within Commercial Unit 1 plus
Commercial Unit 2, that Commercial Unit 1, including new mezzanine floor area
represents. In the event the boundaries of Commercial Unit 1 are expanded beyond
those shown on the Premises Plan to take a portion of the remaining floor area of
Commercial Unit 2 (with AspenFilm's consent), then the floor area of the expanded
portion of the boundary of Commercial Unit 1 shall be added to the Commercial Unit 1
Floor Area and subtracted from the remaining floor area of Commercial Unit 2 and the
ratio of the resulting floor areas shall be recalculated and the Tenant's Commercial Unit
Pro-Rata Share shall be revised accordingly.
Section 2.02 Assignment of Declarant and Owner Rights
Not later than the Commencement Date (defined below), Landlord shall have obtained
from the Authority: (a) an assignment to Landlord: all of the Declarant's reserved rights
under the Declaration pursuant to a form of assignment reasonably acceptable to
Tenant and AspenFilm; and (b) an irrevocable proxy, coupled with the interest passed
by the Authority Lease, of the right to vote all of the votes in the Association allocated
to Commercial Unit A and the AH Units as set forth in the Declaration. Said
assignments shall remain in effect throughout the term of this Lease (subject, however,
to the expiration of Declarant Rights as provided in the Declaration). Landlord agrees
that during the term of this Lease, Landlord shall exercise the Declarant Rights and
voting rights as necessary and as reasonably requested by Tenant to fulfill the
Landlord's obligations under this Lease and as reasonably requested by AspenFilm to
fulfill Landlord's obligations under the AspenFilm Sublease (collectively, the "Subtenant
Leases") to assist Tenant and AspenFilm in fulfilling the Tenant's and AspenFilm's
obligations under the Subtenant Leases, to assist Tenant and AspenFilm in exercising
Tenant's and AspenFilm's rights under the Subtenant Leases and, generally, as
necessary to fulfill the intent of the Subtenant Leases. Landlord expressly agrees that it
shall fully exercise all of said rights as necessary to facilitate the Recondominiumization,
including the initiation and prosecution of litigation, if necessary, and any and all
changes to common elements in the Building reasonably requested by Tenant and
AspenFilm, including, without limitation, all changes to the exterior of the Building
approved by the City and/or its boards and commissions. Except as otherwise expressly
provided for above, in the event of a conflict between Tenant's direction to Landlord and
AspenFilm's direction to Landlord, Landlord shall exercise its voting rights and
Declarant Rights in a manner that it deems to be in the best interests of Tenant, the
owner of Commercial Unit 2, and Landlord. At the time of the Recondominiumization,
Landlord, acting through its assignment of Declarant Rights, shall allocate the votes in
the Association attributable to Commercial Unit A, equally between Commercial Unit 1
and Commercial Unit 2. With the exception of the expansion of Residential Unit B (the
Free Market Unit) to add a bedroom of no more than 500 sq. ft. or the re-development
7
of the Notch area as described in the MOU, City further agrees that it shall not exercise
said rights to approve construction of new condominium units on the roof or the
expansion of existing condominium units on the roof of the Building, without first
obtaining Tenant's written consent. Tenant's written consent shall not be unreasonably
withheld.
Section 2.03 COP Financing
(a) The City has, or shall before the Commencement Date, cause there to be issued
approximately $8,440,000.00 in Certificates of Participation ("COP") for the
purchase of the Premises. The COP shall be 30-year, self-amortizing obligations
and shall bear a coupon rate of not more than 6%, shall be callable in whole or in
part, at par value, at the City's option at any time after one hundred twenty (120)
months, and may contain such optional defeasance provisions as are customary
for municipal finance obligations.
(b) The City shall be responsible for coordinating any disclosures regarding the City,
the Authority, the Property and these transactions as the City shall deem
appropriate, and while Tenant shall have the right and opportunity to review and
comment on such disclosures and the COP documents generally, Tenant shall
not be liable or legally responsible in any way for such disclosures or any
deficiencies therein.
(c) The COP proceeds have, or shall be, utilized for the acquisition of the
Commercial Unit A and the AH Units; for the costs of issuing, rating and insuring
the COP; for the costs of the Recondominiumization and the physical renovation
of Commercial Unit 1 to enable it to be used for retail purposes; and, for
reconfiguring the lobby area of Commercial Unit A, as defined in the MOU (any
and all conversion and construction costs shall include all "hard" and "soft" costs
relating to architectural, engineering, planning, approvals, permitting, the
Recondominiumization, and actual construction); for l!'lasing commissions due
ISIS Property Group. LLC ("Isis Group"); and for such miscellaneous costs as
Tenant may incur in connection with these transactions.
(d) It is understood that:
1 Tenant shall be responsible for the servicing and repayment of the Isis
Group Base Rental Allocation as defined in the Authority Lease (the
"Tenant's Base Rent Allocation");
2 The tenant of the newly created Commercial Unit 2, AspenFilm shall be
responsible for the servicing and repayment the AspenFilm Base Rental
Allocation as defined in the Authority Lease (the "AspenFilm COP
Allocation");
3 The City shall, subject to the limitations of the Authority Lease pay to the
Authority under the terms of the Authority Lease all Base Rentals as
8
defined therein. In no event shall City be responsible for the payment of
any costs not identified herein or in the Authority Lease.
4 At the CCA Closing (as defined in the MOU), Landlord shall, out of the
COP proceeds and cash invested by Tenant and AspenFilm, make the following
payments and/or establish the following accounts for future expenditures, as more fully
described and conditioned according to the terms of the MOU:
Proiect Costs
Purchase
COP Issuance Costs
Housing Mitigation
Retail Construction
Leasing Commissions
Architectural Fees
Legal Fees
Planning Fees
Debt Service while under const.
Continaency
TOTAL
SOURCES
Isis Group Contribution
AspenFilm Contribution.
COP Proceeds
TOTAL
Section 2.04 Term
Amount
$7,497,000
391,0000
323,000
550,000
180,000
35,000
50,000
15,000
300,000
50.000
$9,391,000
$ 600,000
350,000
8.441.000
$9,391,000
The Lease Term shall be comprised of the Initial Term commencing on the date
the 2007A Certificates are issued and ending on December 31, 2007) and thirty (30)
successive one-year Renewal Terms, subject to subsection (a) of this Section.
(a) This Lease Term shall expire upon the earliest of any of the
following events:
(i) September 30, 2037
(ii) December 31 of any Fiscal Year during which an Event of
Nonappropriation has occurred under the Authority Lease
9
(iii) the purchase of all of the Leased Property by the Tenant
pursuant to Section 2.05 hereof; or
(iv) any termination of the Authority Lease following an Event of
Default thereunder; or
(v) termination of this Lease following an Event of Default in
accordance with Section 17.01 hereof.
Section 2.05
Rights to Purchase
(a) Upon Notice of Default by City: Provided the Recondominiumization
has been completed, in the event City is in default in its obligations under the Authority
Lease or the Authority is in default under the Indenture, including, without limitation, a
failure by the City to appropriate funds to pay the Base Rentals due or coming due in
the fiscal year next occurring, City shall immediately provide notice to Tenant, along
with a copy of any notice from the Authority or the COP indenture trustee stating that an
event of default by the City (Landlord) or the Authority, as applicable has occurred.
Upon the giving of such notice. Tenant shall have the right to purchase the Premises for
an amount equal to the sum of the then-outstanding principal amount of the Tenant's
Base Rent Allocation, all accrued and unpaid interest thereon and all costs of paying off
the portion of the COP allocated to Tenant's Base Rent Allocation, and regardless of
any preclusion against prepayment or redemption, provided Tenant gives notice of its
intent to exercise this purchase right not later than sixty (60) days after the giving of said
notice and close within ninety (90) days of the giving of said notice from the Authority or
the COP indenture trustee, and further provided that AspenFilm exercises its right to
purchase Commercial Unit 2 concurrently, provided, however, if AspenFilm does not
exercise its right to purchase Commercial Unit 2 concurrently, then Tenant shall have
only the right to purchase the Premises together with Commercial Unit 2 , for an amount
equal to the sum of the then-outstanding principal amount of the entire COP, all accrued
and unpaid interest on the COP and all costs of paying off the COP. The City agrees
that in connection with the Authority Lease, a purchase option agreement will be
executed between the Authority and Tenant ("Purchase Option Agreement") which
implements the purchase option set forth herein and is recorded in as an encumbrance
on the Building with a priority senior to any lien for the COP financing. AspenFilm's
rights to purchase its premises and Tenant's Premises, if Tenant does not exercise its
right to purchase the Premises upon a default by the City, shall also be included in the
AspenFilm Lease and in a purchase option agreement between the Authority and
AspenFilm The Purchase Option Agreement shall provide that the property being
acquired thereby, shall be free and clear of this Lease and the AspenFilm Lease and
the covenants and restrictions referred to in Section 5.01 (c) of this Lease, but subject to
Permitted Encumbrances permitted by the Authority Lease.
10
(b) By Defeasance: Prior to March 1, 2007, Tenant shall have the right to
purchase the Premises from Landlord by defeasing Tenant's Base Rent Allocation with
United States Treasury securities in amounts and maturities sufficient to service the
Tenant's Base Rent through March 1, 2017 and to retire the Tenant's Base Rent
Allocation as of March 1, 2017 , and further provided that AspenFilm exercises its right
to purchase Commercial Unit 2 concurrently, upon not less than 60 days notice to
Landlord of the intent of Tenant to purchase the Premises and the intent of AspenFilm
to purchase Commercial Unit 2 .
(c) After ten (10) years of the Term: At any time after March 1, 2017
issuance T enan~ shall have the right (provided that Tenant is not in default, after notice
and the expiration of any applicable cure period) to purchase the Premises from
Landlord for an amount equal to the then-outstanding principal balance of the Tenant's
Base Rent Allocation and any accrued but unpaid interest thereon upon no less than 60
days' notice to Landlord of Tenant's intent to purchase the Premises; and it is
understood that Tenant's rights as to the retirement of the Tenant's Base Rent
Allocation and as to obtaining title to the AH Units and Commercial Unit 1 shall be
analogous to its rights under a "contract for deed" purchase of real estate. If the above
rights are not exercised prior to the full payment of Tenant's Base Rent Allocation, upon
such full payment, Tenant shall have the right to purchase Commercial Unit 1 and the
AH Units for ten ($10.00) dollars.
(d) Cross Options: In the event Tenant or AspenFilm elect not to exercise
their respective rights to purchase under the terms of Section 2.05 (b) (or the
equivalent terms applicable to AspenFilm), the exercising party shall have the right to
purchase the non-exercising party's premises by giving not less than 60 days' notice to
Landlord that said exercising-party wishes to acquire the non-exercising party's
premises at the same time that the exercising-party gives notice of its election to
exercise its purchase rights. The exercising party shall take the non-exercising party's
premises subject to the terms of the non-exercising party's lease, except that none of
the purchase options contained in Sections 2.05 (a), (b) and (c) of the non-exercising
party's lease shall be given effect.
(e) Identical Terms: Terms identical to those set forth in this Section
2.05, modified as appropriate for correct references to the parties and the premises
involved, shall be included in the AspenFilm Lease.
(f) Upon the transfer by the Authority or Landlord of fee simple title, to
Tenant or its successor, to the AH Units, such transfer shall be subject to a conveyance
by the City or the Authority to the Aspen/Pitkin County Housing Authority, of a y" of 1 %
undivided ownership interest in each of the AH Units, however, such ownership shall
not include any right to rents or proceeds of sale, nor other economic interests, nor any
obligation for the payment of any costs of ownership, nor any decision making authority
with respect to the use, operation, control, etc, of the AH Units. After the date upon
which title to the AH Units passes to Tenant, should Tenant wish to transfer title to the
11
AH Units to a third party, Landlord agrees to execute such documents and take any
actions as may be necessary to perfect the transfer of title desired by Tenant, without
any further consideration owing to Landlord, City or Authority.
ARTICLE III
CONSTRUCTION
Section 3.01
Landlord's Construction
(a) Landlord is not obligated to perform any construction work within the
premises. Tenant agrees to accept the Premises in "As-Is" condition and will perform all
work required or necessary within the Premises.
(b) City acknowledges that time is of the essence as to the
Recondominiumization, the conversion of the Premises (the West Main Theater) to
retail space and the reconfiguration of the Lobby, all as referred to in the MOU.
Accordingly, the City agrees that all plans and submissions of Tenant shall be given first
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, all rents due under this Lease shall be abated
until the required approvals and building permits are issued by the City. Tenant shall be
reasonably responsive to City building permit plan review comments and shall submit
requested corrections in a timely manner. During said period of abatement, Tenant shall
be liable to pay to the City as rent only for those amounts collected from any sub-lessee
in the Premises at that time, less a proportionate share of the common area
maintenance, real estate taxes, and other operating expenses of the building and no
more, but nothing contained herein shall relieve Tenant of its obligation to pay to
AspenFilm any and all rents and other sums withheld or abated by the theater operator
in Commercial Unit 2 as provided for in the Mou.
Section 3.02 Tenant's Work
Tenant accepts the Premises in its present "as is" condition without any warranty or any
obligation of Landlord to make any improvements in or to the Building. The interior of
the Premises shall be the responsibility of Tenant and under the complete control and
supervision of Tenant ("Tenant Work").
Section 3.03 Remodel of Lobby Area for Retail Use
12
Tenant shall, pursuant to the Renovation Agreement, appended hereto as Exhibit B,
shall cause the Improvements to be constructed, acquired and installed in and on the
Premises and Commercial Unit 2in accordance with the Renovation Agreement.
ARTICLE IV
RENT
Section 4.01
Base Rent
The monthly base rent ("Monthly Base Rent") payable by Tenant shall be equal
to one-sixth of the semi-annual debt service (principal and interest) due on the Tenant's
Base Rent Allocation of the COP, as may be adjusted for various credits under the
Authority Lease, which is 68.6% of the monthly base rent payable by the City under the
Authority Lease. Tenant's annual base rent shall be as set forth in Exhibit C appended
hereto ("Annual Base Rent"), payable in monthly installments on the 15th day of each
month, with the first payment due and payable at the CCA closing and on the 15th day
of the month thereafter.
Section 4.02
Reserve Account
(a) In addition to the Base Rent required to be paid as set forth at Section 4.01,
Tenant shall pay to Landlord the sum of $250.00 per month as and for a capital reserve
fund as described below. The AspenFilm Sublease Agreement shall contain a similar
requirement in the amount of $150.00 per month.
(b) Landlord shall establish a Capital Reserve Fund and shall be maintained by the
Trustee as a separate and distinct fund from any COP repayment accounts. Said
Capital Reserve Fund shall be maintained until such time as the Premises and
Commercial Unit 2 are conveyed to both Tenant and AspenFilm whereupon the balance
of the fund shall be transferred back to Tenant and AspenFilm in the same proportion
that it was funded. If either AspenFilm or Tenant acquires its respective premises and
the other party does not acquire its respective premises, then the proportionate share of
the balance of the Capital Reserve Fund shall be transferred back to the party who
acquires its respective premises. The fund shall be applied as necessary to pay the
costs of capital repairs or improvements over the life of the building. The funds may be
used as required and as determined by Landlord upon the request and/or advice of
AspenFilm and Tenant for such purposes as roof, exterior walls, interior bearing walls,
the building foundation, the plumbing, water sewer, electrical, heating or ventilation
systems, including replacement of fixtures and equipment. Landlord shall have no
responsibility for any capital repairs and improvements notwithstanding the fact that the
Trustee shall maintain this Capital Reserve Fund. In the event of insufficient capital
reserves, Landlord may, in its sole and exclusive discretion, use other funds within its
13
control to undertake such necessary repairs or improvements. Landlord may require
reimbursement from Tenant in amounts that Landlord, in its sole discretion, deems fair
under the circumstances. Should a disagreement arise between the parties concerning
the necessity for any repair or capital improvement, or the allocation of the cost of such
repair or improvement, Landlord shall have ultimate decision-making authority with
regard to the same.
ARTICLE V
USE AND OPERATION
Section 5.01
Use of Premises
(a) Subject to the provisions of Section 5.02, Tenant shall, during the entire
Term, use the Premises, if at all, for retail purposes, or shall sublease the Premises to a
subtenant that shall use the Premises for retail purposes in accordance with this Lease
and any requirements of applicable law, including, without limitation, any requirements
of Section 10.02 of the Authority Lease. Tenant shall not be required to operate the
Premises for any purpose whatsoever.
(b) The Premises shall not be used for restaurant uses unless the appropriate
mitigation costs are paid to the City pursuant to the City Land Use Code in effect at the
time of conversion to such use, and provided that the City Council, in its sole discretion
approves such a change in use.
(c) Tenant shall use commercially reasonable efforts to sublease the
Premises to one or more tenants that are deemed "mid-level" retail uses or any retail
uses which are local businesses (as opposed to national or chain type stores). Mid-
Level retailers shall generally be defined to be those retail merchants that meet the
retail industry's middle three classifications of merchandise categories as described
below as Moderate, Bridge and Better. The businesses named below are included by
way of example, but not limitation, and are not intended to be the only ones permitted in
each category but are listed as examples of the type of businesses that are
representative of each category. Moderate is defined as tenants such as Gap,
Hollister, Banana Republic, Victoria's Secret, Replay, Ron Herman, Fred Seigel, Club
Monaco, American Eagle, J. Crew, bebe Sport, Lucky Brand Jeans, Abercrombie &
Fitch, Levi's, Ann Taylor Loft. Bridge is defined as tenants such as Ann Taylor, Anne
Klein, Sigrid Olsen, Puma, Juicy Couture, Guess, Armani AX, BCBG, Bebe, Coldwater
Creek, Urban Outfitters, Anthropologie, and J. Jill. Better is defined as tenants such as
Brooks Brothers, Lisa Klein, Stuart Weitzman, David Yurman, RLX, RL Ralph Lauren,
Rugby, Lacoste, Apple Computer, Sony Style, Scoop, Coach, Sony Style, Apple,
Talbot's, Ted Baker, Diesel, Williams Sonoma, Pottery Barn, Tourneau, Giorgio Armani
White Label, Emporio Armani, Tommy Bahama, Burberry, Cole Hahn, Movado, Hugo
Boss, .John Varvatos, Eileen Fisher, Calvin Klein, Intermix.
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Section 5.02 Signs
Tenant and its sub-tenants will have the right to construct and attach signs to the
exterior of the Building, identifying the businesses located therein and thereafter to
modify such signs as Tenant and its sub-tenants shall determine. Such signs shall
comply with appropriate municipal requirements.
ARTICLE VI
COMMON AREAS
Section 6.01
Use of Common Areas
Landlord hereby grants to Tenant and its subtenants, agents, employees, customers,
licensees and other invitees the nonexclusive easement, in common with Landlord and
all other tenants and owners of the Building and their agents, employees, customers
and licensees to use all the Common Areas of the Building as provided in the
Declaration of Condominium during the term thereof and thereafter in the same manner
as provided in the Declaration. "Common Areas" are more fully described in the
Declaration and shall be the governing language and definition. Landlord shall not grant
any other person other than owners or other tenants in the Building the right to utilize
the Common Areas and shall use reasonable efforts to prevent such other persons from
utilizing the Common Areas.
Section 6.02 Operation of Common Areas
(a) Landlord shall or shall cause the Isis Theater Condominium Association
(the "Association") to engage Tenant, Isis Group, or any entity controlled by the
members of Tenant (at Tenant's discretion), to act as property manager for the Building
under a separate management agreement for an initial period of one year and at a
market rate management fee. Said management fee shall be payable by Tenant's retail
subtenant and by a pass-through payment payable by AspenFilm's commercial theater
operator subtenant. The management agreement shall be automatically extended for
successive one year terms for so long as (x) Courtney Lord shall be a member of
Tenant and Tenant shall own Commercial Unit 1 and (y) the COP financing shall be
outstanding on Commercial Unit 2, unless said management agreed is terminated for
cause. For purposes on this section, "cause" shall be defined as (i) charging more than
"market rate" for goods and services; (ii) failure to manage the Property in according to
customary business practices with respect to the management of similar properties; or
(iii) fraud in accounting for fees and costs. (b) In the event there is a disagreement
between Tenant and AspenFilm concerning whether or not cause, as defined herein,
sufficient for termination exists, upon the request of either Tenant or AspenFilm, the City
shall make said determination; provided, however, before such termination may occur,
written notice shall be given to Tenant setting forth the reasons for said claim and
Tenant shall have a period of thirty (30) days from receipt of said notice ("Cure Period")
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to undertake efforts to cure the alleged default. Not later than the expiration of the Cure
Period, Tenant shall submit such information or documents to City and AspenFilm as
are reasonably necessary to demonstrate that the alleged default has been cured.
Upon expiration of the Cure Period, City shall make a determination as to whether or
not the cure of the alleged default has been made. If the cure has not been made to
City's reasonable satisfaction, City may terminate the management agreement on the
last day of the month in which the City's determination was made, by notice given to
said manager, not later than ten (10) days prior to the termination date.
Section 6.03 Common Area Expenses and Tenant's Pro-
Rata Share
(a) Tenant shall contribute to the cost of operating the Common Areas
("Common Area Expenses") pursuant to the provisions regarding same contained in
the Declaration and all operating costs, assessments for maintenance costs for the
Building, real estate taxes and casualty and liability insurance premiums for the AH
Units and Commercial Unit 1. Tenant's obligation for said costs shall be in the amount
of the assessments levied against Commercial Unit A multiplied by Tenant's
Commercial Unit Pro-Rata Share and the full amount assessed or incurred by the AH
Units. After the Recondominiumization has been completed, Tenant's obligation for
said costs with respect to Commercial Unit A, shall be the full amount of the
assessments levied against Commercial Unit 1.
(b) Under no circumstance shall the Landlord be responsible for any such
operating costs, real estate taxes or casualty or liability insurance premiums or for any
other costs of owning or operating the AH Units or Commercial Unit 1 while this Lease
is in force. It is agreed that the Lease is a triple net lease and Landlord is not liable for
any expenses for operating the Building or Premises. To the extent Landlord is required
to pay any amounts as Additional Rentals under the Authority Lease with respect to the
Premises, Tenant shall reimburse such amounts within 30 days, subject to the
provisions for contesting any such amounts in the Authority Lease.
Section 6.04 Tenant's Obligation for COP Administrative Costs
Tenant shall pay to Landlord all COP administrative costs incurred with respect
to the Premises. If such costs are not separately assessed to the Premises, then the
administrative costs shall be equitably apportioned among Commercial Units 1 & 2 and
the AH Units. Such payment shall be made within thirty (30) days of Tenant's receipt of
an invoice therefore from Landlord, together with a detailed statement of the charges
and any allocation formula.
Section 6.05 Changes to the Building or Premises
No alterations or changes shall be made to the Building or Premises by or with the
consent of Landlord, without Tenant's approval and shall only be made in accordance
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with the procedures contained in the Declaration. Any construction of the proposed
Notch as described in the MOU is exempt from this provision.
ARTICLE VII
REAL ESTATE TAXES
Section 7.01
Tenant's Tax Obligation
(a) Without limiting Tenant's obligations under Section 6.03 hereof,Tenant
covenants and agrees to pay prior to delinquency an amount equal to all real estate
taxes and assessments ("Impositions") which may be levied or assessed by any lawful
authority against the Premises, for each calendar year or part thereof of the Term from
and after the Commencement Date. After the Recondominiumization is completed,
Landlord shall arrange for all tax bills and assessment notices to be provided to Tenant
directly by the taxing authorities and thereafter, Tenant shall pay all Impositions directly
to the appropriate taxing authorities. Provided that Landlord has given Tenant not less
than sixty (60) days notice in advance of the due date of any Impositions, Tenant shall
be responsible for any late payment charges or interest relating to its failure to pay any
Impositions when due. Tenant's obligation for said Impositions shall be in the amount of
the Impositions levied against Commercial Unit A multiplied by Tenant's Commercial
Unit Pro-Rata Share and the full amount levied against the AH Units. After the
Recondominiumization has been completed, Tenant's obligation for said Impositions
with respect to Commercial Unit A, shall be the full amount of the assessments levied
against Commercial Unit 1.
(b) City agrees that any fee simple transfer of Commercial Unit 1 or either of
the AH Units by the City or the Authority to Tenant or its successor shall be exempt from
RETT, WHRETT and any other City-imposed real estate transfer tax in effect at the time
of such transfer
ARTICLE VIII
UTILITIES
Section 8.01
Utilities
Without limiting Tenant's obligations under Section 6.03 hereof,Tenant shall pay when
due, all utility charges separately metered or separately billed to the Premises. Utilities
that are not separately metered or charged, will be paid through Common Area
Expenses. Landlord hereby grants Tenant, its agents and invitees, a nonexclusive
easement, in common with Landlord and all other occupants of the Building to whom
Landlord has granted or may hereafter grant similar rights, to install, use and maintain
all utility systems and facilities serving the Premises, including without limitation all utility
conduits, piping, conductors and the like, on, over, across and under the Building, along
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routes designated by Landlord for the benefit of all tenants and owners in the Building,
subject to the terms of the Declaration.
ARTICLE IX
MAINTENANCE AND ALTERATIONS
Section 9.01
Maintenance and Alterations
(a) Those portions of the Building and Premises which are general common
elements as defined in the Declaration shall be maintained and repaired by the
Association and Landlord shall exercise all its powers as an owner of the Premises, to
cause the Association undertake maintenance and repairs of the general common
elements as necessary to maintain the Building as a first class residential and
commercial property, except that if any such repair is required by reason of the Tenant's
negligence or the negligence of any of its agents or employees, the Landlord or the
Association may make such repair and add the cost thereof to the first installment of
rent which shall thereafter become due. Except as provided in Articles XI and XII,
Tenant shall at all times throughout the Term keep the Premises and any portion thereof
which is not a common element, and all partitions, door surfaces, fixtures, equipment
and appurtenances thereof (including lighting, heating and plumbing fixtures and air
conditioning systems) in good order, repair and condition.. Without limiting the
generality thereof, Tenant shall keep the glass of all windows and doors clean and
presentable; promptly replace all broken glass in the Premises; keep the heating
system, air conditioning system, lighting system and all plumbing systems in the
Premises clean and in a good state of repair, including pipes, drains, toilets, fixtures and
basins; and keep all utilities within the Premises in a good state of repair. Tenant
acknowledges and agrees that other than the obligation to exercise its powers as an
owner to cause the Association to maintain and repair the general common elements of
the Building, Landlord has no maintenance, repair, replacement or other duty of any
kind or nature with respect to the Building.
(b) Tenant shall maintain the Premises in a clean, sanitary and safe condition in
accordance with all directions, rules and regulations of health officers, fire marshals,
building inspectors, and other governmental officials, and comply with all requirements
of law affecting the Premises.
Section 9.02
Nuisance and Cleanliness
Tenant covenants that it will exercise the highest duty of care to maintain the Premises
in a clean condition and to provide sufficient trash and garbage service. Tenant shall not
permit any noxious or offensive odors to exist in or around the Premises. Tenant shall
not perform any act or carry on any practices that may injure the Building, of which the
Premises form a part, or be nuisance or menace to other tenants or unit owners in said
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Building. A breach of the obligations set forth in this section by Tenant shall constitute a
material breach of this Lease.
Section 9.03 Alteration of Premises
Tenant shall have the right to undertake construction within the Premises and upon the
exterior walls of the Premises, as necessary to accommodate commercial and retail
uses, without first obtaining Landlord's consent, but such work shall be subject to
compliance with all applicable building codes; obtaining requisite approvals from
applicable City boards and commissions and the Association to the extent required by
the Declarations; and, the Renovation Agreement. Tenant shall have use of funds
allocated to the retail construction as provided by the COP financing for such work and
shall, at its sole cost and expense, pay for any costs in excess thereof. Tenant shall
perform any such alterations in a manner which minimizes, to the extent reasonable, the
disruption to the operations of the Building and its tenants and owners. All alterations
shall be made in accordance with all applicable laws, ordinances and regulations, and
Tenant shall obtain all governmental permits and consents prior to undertaking any
such alterations, and perform such alterations and/or improvements in accordance with
the terms of the Declaration.
ARTICLE X
INSURANCE
Section 10.01 Insurance During Term
(a) During the Term, Tenant or its sub-tenant(s) shall insure the Premises
against all risks normally insured against on an "all risk" form of policy for its full
replacement cost; shall maintain commercial general liability insurance with respect to
the Building and the business operated by Tenant or its sub-tenant(s) therein, including
contractual liability coverage, with combined limits of not less than Two Million Dollars
($2,000,000) for personal injury or death and property damage. In addition, Tenant or
its sub-tenant(s) shall either maintain fire and extended coverage, vandalism, malicious
mischief and special extended coverage insurance in an amount sufficient to cover the
cost of replacement of all furnishings, fixtures and equipment in the Premises, or
self-insure against such risks. Landlord shall exercise its powers as an owner to cause
the Association to carry and maintain during the Term, the insurance required by the
Declaration.
(b) The insurance policies provided pursuant to subsection (a) of this Section
shall meet the following conditions: (i) any insurance policy may have a deductible
clause in an amount deemed reasonable by the City; (ii) each insurance policy shall be
provided by an insurer rated "A" by Best or in the two highest rating categories of S&P
and Moody's, unless waived by the Certificate Insurer; (iii) each insurance policy shall
be so written or endorsed as to make losses, if any, payable to the City, the Authority,
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the Trustee American national Bank, Denver, Colorado, or any successor thereto), and
the Tenant, as their respective interests may appear; (iv) each insurance policy shall
contain a provision to the effect that the insurance company shall not cancel the policy
or modify it materially and adversely to the interest of the Landlord, the Authority, the
Trustee or the Tenant, if applicable, without first giving written notice thereof to the such
parties at least 10 days in advance of such cancellation or modification; (v) each
insurance policy, or each certificate evidencing such policy, shall be deposited with the
Landlord and Trustee; (vi) full payment of insurance proceeds under any insurance
policy up to the dollar limit required by this Section in connection with damage to the
Leased Premises shall not, under any circumstance, be contingent on the degree of
damage sustained at other property owned or leased by the Landlord or the Tenant; (vii)
each insurance policy shall explicitly waive any co-insurance penalty; and (viii) coverage
under each insurance policy shall apply exclusively to the Leased Premises (except as
provided in subsection (d) of this Section) and must be available to repair or rebuild the
Leased Property under all circumstances after the occurrence of an insured peril.
(c) Landlord may provide any of the insurance required by subsection (a) of
this Section under blanket insurance policies which insure not only the risks required to
be insured hereunder but also other similar risks.
(d) Landlord shall cause an insurance consultant, which may be the person
providing the insurance, to annually review the coverage of the policies of insurance
maintained pursuant to this Section and to make recommendations thereon, and Tenant
shall comply with such recommendations.
Section 10.02 Landlord not Liable for Damages - Covenant to Hold Harmless
(a) Landlord shall not be liable to tenant or to any other person whatsoever for
any damage occasioned by falling plaster, electricity, gas, water, steam, sprinkler or other
pipe and sewage system or bursting, running or leaking of any tank, washstand, closet or
waste to other pipes in or about the Premises, or the Building or which they are a part,
nor for any damage occasioned by water being upon or coming from the roof, or vent, or
otherwise for any damage arising from any acts or neglect of co-tenants or other
occupants or unit owners of the Building or of adjacent property, or the public, nor shall
Landlord be liable in damages or otherwise for any failure to furnish, or interruption of
service of any water, gas, electricity, heated water, steam and/or chilled water, cause by
fire, accident, riot, strike, labor disputes, acts of God, or the making of any repairs or
improvements or other causes beyond the control of Landlord.
(b) From and after the Commencement Date, Tenant shall indemnify Landlord
and hold Landlord harmless from and against any and all claims, actions, damages,
liability, cost and expense, including reasonable attorney's fees, in connection with all
losses, including personal injury and/or damage to property, arising from or out of any
act or omission of Tenant or any licensee, sub-tenant, assignee or concessionaire of
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Tenant or any officer, agent or employee of Tenant or any such person in, on or about
the Premises.
(c) From and after the date of this Lease, to the extent allowed by law,
Landlord shall indemnify Tenant, its officers, directors, stockholders, beneficiaries,
partners, representatives, agents and employees and hold them harmless from and
against any and all claims, actions, damages, liability, cost and expense, including
reasonable attorney's fees, in connection with all losses, including personal injury and/or
damage to property arising from or out of any negligent act or omission of Landlord or
any licensee or assignee of Landlord or any officer, agent or employee of Landlord or
any such person in on or about the Building in which the Premises are located and the
Premises.
ARTICLE XI
FIRE AND OTHER CASUALTY
Section 11.01 Repair of Premises and Building
(a) If the general common elements portion of the Premises shall be
damaged by fire or other casualty of the kind insured against in standard policies of fire
insurance with extended coverage which coverage is maintained by the Association, the
Association shall cause such damage to be repaired, and the rent shall not be abated.
If the Premises shall be rendered wholly untenantable, and if the damage shall be so
great that it cannot be fit for occupancy, then Tenant shall have the option to terminate
this Lease from the date of occurrence of such damage, and the Tenant shall thereupon
surrender to the Landlord the Premises and all interest hereunder; provided that, as a
condition of such termination, any insurance proceeds paid to Tenant as a result of such
damage shall be delivered by Tenant to Landlord, who shall apply such proceeds in
accordance with the Authority Lease. In case of fire or other casualty caused by the
fault, neglect or willful act of Tenant, its guests, invitees or employees, Tenant shall
promptly make all necessary repairs to restore the premises to their condition prior to
such occurrence at Tenant's sole cost and expense and the rental provided for in this
Lease shall not abate.
(b) Subject to the provisions of Section 11.01(c), in the event of damage or
destruction of all or any part of the Premises other than its general common elements,
by fire or other casualty Tenant shall repair and/or rebuild the same with reasonable
diligence. If insurance proceeds are payable to Landlord or Landlord's mortgagee or
first lien holder, Landlord or its mortgagee shall promptly make the proceeds available
to Tenant for such repair and restoration. In the event the insurance proceeds exceed
the cost of repair and rebuilding, such excess shall be retained by (or paid to) Tenant
and in the event the insurance proceeds are less than the cost of repair and rebuilding,
such short-fall shall be paid by Tenant.
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(c) In the event of any damage or destruction by fire or other casualty of any
other part of the Building (other than the Premises), Landlord, shall with reasonable
diligence exercise all its powers as an owner to cause the Association to undertake the
repair and/or rebuilding and restoration of same in a manner and to at least a condition
equal to that existing before the damage or destruction.
(d) Each party agrees to commence any required restoration within
ninety (90) days after the date of the damage or destruction (subject to settlement with
its insurance carrier, which it shall diligently pursue), and diligently pursue the work to
completion.
ARTICLE XII
EMINENT DOMAIN
Section 12.01 Condemnation
In the event that the Premises or any part thereof sufficient to render it unsuitable
for Tenant's use and occupancy, as determined by Tenant in its reasonable discretion,
shall be taken or damaged by reason of any exercise of the power of eminent domain,
whether by a condemnation proceeding or otherwise, or in the event the Premises or
part thereof sufficient to render it unsuitable for Tenant's use and occupancy, as
determined by Tenant in its reasonable discretion, shall be transferred in avoidance of
an exercise of the power of eminent domain, this Lease shall terminate as of the date
title is vested in the condemning authority or the date of physical occupancy by the
condemning authority or its agents, whichever first occurs, and both parties shall
thereupon be released from any liability thereafter accruing hereunder except as
provided herein; but all rentals and other charges then accrued shall immediately be
due and payable by Tenant. Landlord agrees immediately after receiving notice of any
proposed taking to give to Tenant notice in writing thereof. If the taking is of a part of the
Premises which does not render the remainder unsuitable, as determined by Tenant in
its reasonable discretion, then from the time of taking of physical possession by the
condemnor or proposed condemnor, the then rent payable hereunder shall abate in the
ratio that the area of the Premises taken bears to the area of the Premises before such
taking.
Section 12.02 Damages
If the Premises or Building are so taken, the award made as compensation for such
taking shall first be used to pay Landlord's Leased Property Purchase Option Price
under the Authority Lease the. If any of the award made as compensation remains,
that amount shall be awarded to Tenant, and Landlord shall promptly pay that amount
over to Tenant.
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Section 12.03 Temporary Taking
In the event of a temporary taking of the Premises, the entire award made as
compensation for said temporary taking shall be paid over to Tenant.
ARTICLE XIII
ASSIGNMENT, SUBLETTING AND RIGHTS TO LEASE OR ACQUIRE
ASPEN FILM PREMISES: ASPENFILM'S RIGHT TO LEASE OR ACQUIRE
PREMISES OR MEMBERSHIP INTERESTS IN TENANT
Section 13.01 Assignment and Subletting by Tenant
(a) Tenant will at all times have the right to sublet space within the Premises
with Landlord's consent, which shall not be unreasonably withheld or delayed, and with
the consent of Financial Security Assurance Inc., in its capacity as COP insurer (the
"COP Insurer") which shall not be unreasonably withheld or delayed. Tenant shall
provide to Landlord a copy of all subleases and amendments thereto. If Landlord or the
COP Insurer does not approve or deny, in writing, Tenant's request for approval of a
sublease within ten (10) days of Tenant's request therefore, said approval shall be
deemed to have been given.
(b) Tenant will at all times have the right to assign this Lease to another party
with Landlord's consent which shall not be unreasonably withheld or denied, and with
the consent of the COP Insurer which shall not be unreasonably withheld or delayed.
Tenant shall provide to Landlord a copy of all assignment agreements and amendments
thereto. If Landlord or the COP Insurer does not approve or deny, in writing, Tenant's
request for approval of an assignment within ten (10) days of Tenant's request
therefore, said approval shall be deemed to have been given.
(i) For the purpose of this provision, any transfer of a majority or
controlling interest in Tenant (whether in one or more related or unrelated
transactions), whether by transfer of stock, consolidation, merger, transfer of a
partnership interest or transfer of any or all of Tenant's assets or otherwise, or by
operation of law, shall be deemed an assignment of this lease. Any assignment
or sublet in contravention of this provision shall be void and shall be a default
hereunder. Notwithstanding any permitted assignment, Tenant shall at all times
remain directly, primarily and fully responsible and liable for the payment of the
rent herein specified and for compliance with all of its other obligations under the
terms, provisions and covenants of this lease.
(c) The following transfers are exempt from this provision: (a) as a result of
death; (b) as a result of bankruptcy' (c) a transfer in violation of the operating agreement
of Tenant which results in the transferee having no voting interest in the Tenant; (d)
transfers by gift or without consideration; (e) transfers to family trusts or family limited
liability companies where the members in the transferee are family members of the
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members in the transferor; (e) transfers for estate planning purposes: (f) transfers to
entities in which the members of the transferor have the same ratio of ownership
interest in the transferee as they had in the transferor.
Section 13.02 Right to Acquire AspenFilm Lease
(a) First Riqht to Neqotiate Assiqnment of AspenFilm Lease. Landlord agrees to include
the following provisions in its lease with AspenFilm for Commercial Unit 2 (the
AspenFilm Premises"):
"If at any time during the Term of this lease, AspenFilm determines that it wishes to
assign its interest in this lease for Commercial Unit 2 to an entity which is not a non-
profit entity, then AspenFilm shall, before listing the lease for such assignment or
offering it for assignment or accepting an offer from a third party for such assignment,
first offer to the tenant under the lease with the City for Commercial Unit 1 or if
Commercial Unit 1 has been condominiumized and sold, then said offer shall be made
to the owner of Commercial Unit 1 (collectively, the "Commercial Unit 1 Tenant or
Owner"), the opportunity to negotiate the terms for and obtain an assignment thereof.
AspenFilm shall provide written notice to the Commercial Unit 1 Tenant or Owner of its
intent to assign this lease and shall propose a price and the terms for such an
assignment (the "Initial Offer"). The parties shall have a period of Thirty (30) days to
negotiate the terms of the assignment and in the event they are unable to agree upon
said terms, then AspenFilm shall be free to assign it to a third party, provided that the
price for said assignment shall be not less than ninety (90) percent of the price offered
in the Initial Offer and the material terms of said assignment shall be no less favorable
to AspenFilm than those which were contained in the Initial Offer. The City shall have
the right to acquire an assignment of this lease if the Commercial Unit 1 Tenant or
Owner does not exercise its rights hereunder to acquire this lease. All notices required
hereby to be given to the Commercial Unit 1 Tenant or Owner shall be given to the City
at the same time as they are given to the Commercial Unit 1 Tenant or Owner. If City
desires to negotiate for the assignment of this lease, City shall engage in the
negotiations with AspenFilm during the same thirty day period as is provided to the
Commercial Unit 1 Tenant or Owner and all provisions hereof shall apply equally to the
Commercial Unit 1 Tenant or Owner and the City, except that the Commercial Unit 1
Tenant or Owner shall have the first right to acquire this lease and the City shall have
the right to acquire this lease only if AspenFilm and Commercial Unit 1 Tenant or Owner
are unable to successfully negotiate the terms of an assignment of this lease.
Any assignment which is in violation of these provisions shall be voidable in an action
brought by the Commercial Unit 1 Tenant or Owner or by the City to enforce the terms
of this provision.
(i) If, at any time subsequent to an Initial Offer and the failure of AspenFilm
and the Commercial Unit 1 Tenant or Owner and the failure of the City and
AspenFilm to agree upon the terms of an assignment, AspenFilm desires to
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assign this lease for a price which is less than ninety (90) percent of the price
contained in the Initial Offer and/or which contains material terms less favorable
to AspenFilm, then AspenFilm shall provide another offer to the Commercial Unit
1 Tenant or Owner and the City (the "Subsequent Offer") and the same
provisions hereof which pertain to an Initial Offer shall apply to all Subsequent
Offers. This sequence of offers and negotiations shall continue for as many times
as necessary to afford the Commercial Unit 1 Tenant or Owner and the City the
rights to negotiate for and obtain an assignment of this lease as are provided for
herein. "
(b) First Riqht to Neqotiate Acquisition of AspenFilm Premises. Landlord agrees to
include the following provisions in its lease with AspenFilm and in any deed conveying
the fee simple interest in all or a portion of the AspenFilm Premises to any for-profit
entity, and any sale of the AspenFilm Premises by AspenFilm shall be subject to the
following provisions:
"No sale of the fee simple interest in the Property (the AspenFilm Premises) to any for-
profit entity shall occur in violation of the following provisions and any sale of the
Property shall be subject to the following provisions: If at any time, the owner of the
Property (the "Aspen Film Premises Owner") determines that it wishes to sell its interest
in all or a portion of the Property to a for-profit entity, the AspenFilm Premises Owner
shall, before listing the Property for sale or offering it for sale or accepting an offer for its
sale from a third party, whether or not said offer is solicited by the AspenFilm Premises
Owner, first offer to the tenant under the lease with the City for Commercial Unit 1 or if
Commercial Unit 1 has been condominiumized and sold, then said offer shall be made
to the owner of Commercial Unit 1 (collectively, the "Commercial Unit 1 Tenant or
Owner"), the opportunity to negotiate the terms for and acquire the Property. The
AspenFilm Premises Owner shall provide written notice to the Commercial Unit 1
Tenant or Owner of its intent to sell the Property and shall propose a price and the
terms for such sale (the "Initial Offer"). The parties shall have a period of Thirty (30)
days from the receipt of said notice by the Commercial Unit 1 Tenant or Owner to
negotiate the terms of the sale and in the event they are unable to agree upon said
terms, then the AspenFilm Premises Owner shall be free to sell the Property to a third
party, provided that the price for said sale shall be for a price which is no less than
ninety (90) percent of the price offered in the Initial Offer and the material terms of said
sale shall be no less favorable to the AspenFilm Premises Owner than those which
were contained in the Initial Offer. Any sale which is in violation of these provisions
shall be voidable in an action brought by the Commercial Unit 1 Tenant or Owner to
enforce the terms of this provision. The City shall have the right to acquire the
AspenFilm premises if the Commercial Unit 1 Tenant or Owner does not exercise its
rights hereunder to acquire the AspenFilm Premises. All notices required hereby to be
given to the Commercial Unit 1 Tenant or Owner shall be given to the City at the same
time as they are given to the Commercial Unit 1 Tenant or Owner. If City desires to
negotiate for the purchase of the AspenFilm Premises, City shall engage in the
negotiations with AspenFilm during the same thirty day period as is provided to the
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Commercial Unit 1 Tenant or Owner and all provisions hereof shall apply equally to the
Commercial Unit 1 Tenant or Owner and the City, except that the Commercial Unit 1
Tenant or Owner shall have the first right to acquire the AspenFilm Premises and the
City shall have the right to acquire the AspenFilm Premises only if AspenFilm and
Commercial Unit 1 Tenant or Owner are unable to successfully negotiate the terms of
an acquisition of the AspenFilm Premises.
(i) If, at any time subsequent to an I nitial Offer and the failure of the
AspenFilm Premises Owner and the Commercial Unit 1 Tenant or Owner to
agree upon the terms of said sale, the AspenFilm Premises Owner desires to sell
the Property for a price which is less than ninety (90) percent of the price
contained in the Initial Offer and/or which contains material terms less favorable
to the AspenFilm Premises Owner, then the AspenFilm Premises Owner shall
provide another offer to the Commercial Unit 1 Tenant or Owner (the
"Subsequent Offer:') and the same provisions hereof which pertain to an Initial
Offer shall apply to all Subsequent Offers. This sequence of offers and
negotiations shall continue for as many times as necessary to afford the
Commercial Unit 1 Tenant or Owner the rights to negotiate the terms for and
acquire the Property as are provided for herein. "
(c) In any Lease between Landlord and AspenFilm, AspenFilm shall be
granted the same rights as are set forth in subsections 13.02(a) and (b) above with
respect to any assignment or sale of the Premises.
Section 13.03 AspenFilm's Right to Acquire Tenant's Lease
13.03.1 If at any time during the Term of this lease, Tenant determines that it
wishes to assign its interest in this lease for Commercial Unit 1 and the AH Units, then
Tenant shall, before listing this Lease for such assignment or offering it for assignment
or accepting an offer from a third party for such assignment, first offer to AspenFilm or
its successor (collectively, "Commercial Unit 2 Owner") the opportunity to negotiate
the terms for and obtain an assignment thereof. Tenant shall provide written notice to
Commercial Unit 2 Owner of its intent to assign this Lease and shall propose a price
and the terms for such an assignment (the "Initial Offer"). The parties shall have a
period of Thirty (30) days to negotiate the terms of the assignment and in the event they
are unable to agree upon said terms, then Tenant shall be free to assign it to a third
party, provided that the price for said assignment shall be not less than ninety (90%)
percent of the price offered in the Initial Offer and the material terms of said assignment
shall be no less favorable to Tenant than those which were contained in the Initial Offer.
The City shall have the right to acquire an assignment of this lease if the Commercial
Unit 2 Owner does not exercise its rights hereunder to acquire this lease. All notices
required hereby to be given to the Commercial Unit 2 Owner shall be given to the City at
the same time as they are given to the Commercial Unit 2 Owner. If City desires to
negotiate for the assignment of this lease, City shall engage in the negotiations with
Tenant during the same thirty day period as is provided to the Commercial Unit 2 Ownere
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and all provisions hereof shall apply equally to the Commercial Unit 2 Owner and the
City, except that the Commercial Unit 2 Owner shall have the first right to acquire this
Lease and the City shall have the right to acquire this lease only if Tenant and
Commercial Unit 2 Owner are unable to successfully negotiate the terms of an
assignment of this Lease.
13.03.2 Any assignment which is in violation of these provisions shall be voidable
in an action brought by the Commercial Unit 2 Owner or by the City to enforce the terms
of this provision.
13.03.3 If, at any time subsequent to an Initial Offer and the failure of Tenant and
the Commercial Unit 2 Owner and the failure of the City and Tenant to agree upon the
terms of an assignment, Tenant desires to assign this Lease for a price which is less
than ninety (90%) percent of the price contained in the Initial Offer and/or which
contains material terms less favorable to Tenant, then Tenant shall provide another
offer to the Commercial Unit 2 Owner and the City (the "Subsequent Offer") and the
same provisions hereof which pertain to an Initial Offer shall apply to all Subsequent
Offers. This sequence of offers and negotiations shall continue for as many times as
necessary to afford the Commercial Unit 2 Owner and the City the rights to negotiate for
and obtain an assignment of this lease as are provided for herein.
13.04 AspenFilm's Right to NeQotiate Acquisition of the Property. No sale of the
fee simple interest in the Property (Commercial Unit 1 and the AH Units) shall occur in
violation of the following provisions and any sale of the Property shall be subject to the
following provisions:
13.04.1 If at any time, the owner of the Property (the "Premises Owner")
determines that it wishes to sell its interest in all or a portion of the Property to a for-
profit entity, the Premises Owner shall, before listing the Property for sale or offering it
for sale or accepting an offer for its sale from a third party, whether or not said offer is
solicited by the Premises Owner, first offer to the Commercial Unit 1 Owner the
opportunity to negotiate the terms for and acquire the Property. The Premises Owner
shall provide written notice to the Commercial Unit 2 Owner of its intent to sell the
Property and shall propose a price and the terms for such sale (the "Initial Offer"). The
parties shall have a period of Thirty (30) days from the receipt of said notice by the
Commercial Unit 2 Owner to negotiate the terms of the sale and in the event they are
unable to agree upon said terms, then the Premises Owner shall be free to sell the
Property to a third party, provided that the price for said sale shall be for a price which is
no less than ninety (90%) percent of the price offered in the Initial Offer and the material
terms of said sale shall be no less favorable to the Premises Owner than those which
were contained in the Initial Offer. Any sale which is in violation of these provisions
shall be voidable in an action brought by the Commercial Unit 2 Owner to enforce the
terms of this provision. The City shall have the right to acquire the Property if the
Commercial Unit 2 Owner does not exercise its rights hereunder to acquire the
Property. All notices required hereby to be given to the Commercial Unit 2 Owner shall
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be given to the City at the same time as they are given to the Commercial Unit 2 Owner.
If City desires to negotiate for the purchase of the Property, City shall engage in the
negotiations with Tenant during the same thirty day period as is provided to the
Commercial Unit 2 Owner and all provisions hereof shall apply equally to the
Commercial Unit 2 Owner and the City, except that the Commercial Unit 2 Owner shall
have the first right to acquire the Property and the City shall have the right to acquire the
Property if the Premises Owner and Commercial Unit 2 Owner are unable to
successfully negotiate the terms of an acquisition of the Property.
13.04.2 If, at any time subsequent to an Initial Offer and the failure of the Premises
Owner and the Commercial Unit 2 Owner to agree upon the terms of said sale, the
Premises Owner desires to sell the Property for a price which is less than ninety (90%)
percent of the price contained in the Initial Offer and/or which contains material terms
less favorable to the Premises Owner, then the Premises Owner shall provide another
offer to the Commercial Unit 2 Owner (the "Subsequent Offer") and the same provisions
hereof which pertain to an Initial Offer shall apply to all Subsequent Offers. This
sequence of offers and negotiations shall continue for as many times as necessary to
afford the Commercial Unit 2 Owner the rights to negotiate the terms for and acquire the
Property as are provided for herein.
13.04.3 In no event shall the AH units be sold separately from Commercial Unit 1,
and in no event shall Commercial Unit 1 be sold separately from the AH units.
Section 13.05 AspenFilm's Right to Acquire Interests In Tenant.
13.05.1 If at any time during or after the Term of this lease, any majority or
controlling member of Tenant or the Premises Owner (as the context may require), or
any member of any entity which is a member of Tenant (in either case, the "Selling
Member"; and for the purpose of this Section 13.05, "member" shall also mean partner
or shareholder or trustee or beneficiary, if the relevant entity is a partnership or
corporation or trust, as the context may require; and "Tenant" shall mean the tenant
under this Lease and any interest in any constituent entity other than family trusts),
determines that it wishes to assign its interest (an "Interest") in Tenant or Premises
Owner, then such member (the "Selling Member") shall, before offering it for assignment
or accepting an offer from a third party for such assignment, first offer to the
Commercial Unit 2 Owner the opportunity to negotiate the terms for and obtain an
assignment thereof. The Selling Member shall provide written notice to Commercial
Unit 2 Owner of its intent to assign its Interest and shall propose a price and the terms
for such an assignment (the "Initial Offer", which shall contain a copy of the entity's
partnership agreement, operating agreement, shareholders' agreement, tenancy-in-
common agreement or other relevant governing document, together with its current and
three-years' prior balance sheets, income statements, cash flow statements, tax return
and the Selling Member's K-1. The parties shall have a period of Thirty (30) days to
negotiate the terms of the assignment and in the event they are unable to agree upon
said terms, then the Selling Member shall be free to assign the Interest to a third party,
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provided that the price for said assignment shall be not less than ninety (90%) percent
of the price offered in the Initial Offer and the material terms of said assignment shall be
no less favorable to the Selling Member than those which were contained in the Initial
Offer. The City shall have the right to acquire an assignment of the Interest if the
Commercial Unit 2 Owner does not exercise its rights hereunder to acquire the Interest.
All notices required hereby to be given to the Commercial Unit 2 Owner shall be given
to the City at the same time as they are given to the Commercial Unit 2 Owner. If City
desires to negotiate for the assignment of the Interest lease, City shall engage in the
negotiations with the Selling Member during the same thirty day period as is provided to
the Commercial Unit 2 Owner and all provisions hereof shall apply equally to the
Commercial Unit 2 Owner and the City, except that the Commercial Unit 2 Owner shall
have the first right to acquire the Interest and the City shall have the right to acquire the
Interest only if Tenant and Commercial Unit 2 Owner are unable to successfully
negotiate the terms of an assignment of the Interest. The following transfers are
exempt from this provision (but in each event, Landlord and FilmFest must be given
fifteen (15)days prior written notice of any such transfer and the agreement therefore):
(a) by devise or descent; (b) by order of a bankruptcy court in connection with the
adjudication of bankruptcy of a Selling Member (c) a transfer in violation of the operating
agreement of Tenant which results in the transferee having no voting interest in the
Tenant; (d) transfers by gift or without consideration; (e) transfers to family trusts or
family limited liability companies where all of the members in the transferee are family
members of the members in the transferor; (e) transfers to entities in which the
members of the transferor have the same ratio of ownership interest in the transferee as
they had in the transferor; and (f) transfers as a result of dilution of the interest of a
Member as provided for in the Operating Agreement or relevant shareholder or other
agreement among the Members of the relevant entity.
13.05.2 Any assignment of an Interest which is in violation of these provisions
shall be voidable in an action brought by the Commercial Unit 2 Owner or by the City to
enforce the terms of this provision.
13.05.3 If, at any time subsequent to an Initial Offer and the failure of the Selling
Member and the Commercial Unit 2 Owner and the failure of the City and the Selling
Member to agree upon the terms of an assignment of an Interest, the Selling Member
desires to assign such Interest for a price which is less than ninety (90%) percent of the
price contained in the Initial Offer and/or which contains material terms less favorable to
the Selling Member, then the Selling Member shall provide another offer to the
Commercial Unit 2 Owner and the City (the "Subsequent Offer") and the same
provisions hereof which pertain to an Initial Offer shall apply to all Subsequent Offers.
This sequence of offers and negotiations shall continue for as many times as necessary
to afford the Commercial Unit 2 Owner and the City the rights to negotiate for and obtain
an assignment of the Interest as are provided for herein.
13.05.4 Tenant shall, within thirty (30) days of request therefore, but not more
frequently than once per calendar year during the Term, deliver to the City and to the
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Commercial Unit 2 Owner a statement, certified by the manager of Tenant, setting forth
the names, telephone numbers and addresses of each member of Tenant (including its
constituent entities) and their respective ownership interests in Tenant and its
constituent entities as of January 1 of such year. Tenant's failure to deliver such
statement to the City and Commercial Unit 2 Owner shall be a default hereunder.
Attached hereto as Exhibit D is such statement, certified as true by Courtney Lord, as
of the date hereof.
13.05.5 For the purpose of this Section 13.05, "controlling or majority" shall mean
having the voting power to appoint or remove the manager of the Tenant, or to the
power to amend the operating agreement of the Tenant, , including without limitation by
virtue of proxies or voting trusts or similar devices
ARTICLE XIV
ESTOPPEL CERTIFICATE, ATTORNMENT AND SUBORDINATION
Section 14.01 Estoppel Certificates
From time to time, but not more frequently than twice during any Lease Year, Tenant
shall, within thirty (30) days after written request from Landlord, execute and deliver a
commercially reasonable estoppel certificate. Landlord shall also execute and deliver
to Tenant similar estoppel certificates within thirty (30) days after written request
therefor, but not more frequently than twice during any Lease Year.
Section 14.02 'Subordination,
Attornment
Non-Disturbance
and
(a) Subject to events of termination of this Lease, such as, without limitation,
non-appropriation, within thirty (30) days after the execution of this Lease, Landlord
shall use its best efforts to deliver to Tenant a mutually satisfactory Non-Disturbance
Agreement from any mortgagee or trustee of the Premises.
(b) From time to time during the Term, Tenant shall, within thirty (30) days
after written request from Landlord, enter into a mutually satisfactory subordination,
non-disturbance and attornment agreement to subordinate this Lease to the lien of any
mortgage or other security interest now or hereafter placed on Landlord's interest in the
Premises and the Building. Such Agreement shall contain the terms and provisions
described in Section 14.02(c) and shall be subject to events of termination of this Lease,
such as, without limitation, non-appropriation).
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(c) Each such agreement shall expressly provide that (i) this Lease shall
remain in full force and effect during the Term, and that Tenant's rights hereunder shall
not be disturbed, notwithstanding any default by Landlord in payment of the
indebtedness and other amounts secured by such mortgage, notwithstanding any
default by Landlord in performance of Landlord's other obligations pursuant to such
mortgage, and notwithstanding any foreclosure proceedings with respect thereto,
provided that Tenant makes any payments that Landlord fails to make after receipt of
notice of such non-payment; (ii) that all fire insurance proceeds and condemnation
awards shall be applied in accordance with the terms of this Lease, and (iii) that Tenant
shall be given notice of any default by Landlord hereunder, and Tenant shall have the
right to cure such defaults on Landlord's behalf and to assume Landlord's obligations
under this Lease ; and (iv) subject to events of termination of this Lease, such as,
without limitation, non-appropriation. Each such agreement will include Tenant's
agreement to attorn to any purchaser of the Premises on any foreclosure of such
mortgage.
(d) Landlord shall enter into with any sub-tenant of Tenant, upon Tenant's
request, a reasonable non-disturbance and attornment agreement providing that in the
event that Tenant defaults under the Lease (after notice and Tenant's failure to cure)
and Tenant forfeits, to the City, Tenant's rights under the Lease, then Landlord shall
recognize such sub-tenant as a direct obligor to the Landlord and the Landlord shall not
disturb such sub-tenant's rights under its sub-lease for so long as such sub-tenant
timely performs all of its obligations thereunder, but always subject to events of
termination of this lease, such as, without limitation, non-appropriation.
ARTICLE XV
TENANT'S RIGHT TO MORTGAGE
Section 15.01 Tenant's Right to Encumber
Tenant shall at all times have the right to grant a security interest in or otherwise
encumber its interest in this Lease; provided, however that Landlord grants its consent
in writing, which consent shall not be unreasonably withheld, and provided further that
the COP Insurer grants its consent in writing, which shall not be unreasonably withheld
or delayed. Tenant shall provide to Landlord all documents relating to a proposed
encumbrance or security interest in this Lease upon requesting Landlord's consent.
ARTICLE XVI
QUIET ENJOYMENT
Section 16.01 Landlord's Covenant
Landlord covenants and agrees that during the Term, Tenant shall at all times
throughout the Term have the peaceable and quiet enjoyment and possession of the
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Premises without hindrance or interruption, subject to the terms of this Lease and of the
Authority Lease, the Declaration and other matters of record. Landlord shall perform all
of its obligations under the Authority Lease and shall protect Tenant's rights under this
Lease from disturbance by reason of any default by Landlord under the Authority Lease.
Section 16.02 Landlord's Mortgages
To the fullest extent allowed by law and subject to the Authority Lease (including
provisions relating to the Landlord's non-appropriation rights), Landlord covenants and
agrees to make all payments when and as due and to perform and comply with all
covenants, conditions, obligations and agreements when and as required by the terms
of all agreements or obligations which could or may have an affect on this Lease and to
which Landlord is a party or by which it is bound, and on request of Tenant to furnish
proof of such payment and performance to Tenant within thirty (30) days after request
therefor.
ARTICLE XVII
DEFAULT, ABANDONMENT, SURRENDER OF PREMISES
Section 17.01 Default by Tenant
If Tenant shall fail to perform or observe any of Tenant's covenants and if such failure
shall continue after notice, in the case of any failure to pay when due any Rent or other
monetary amounts due hereunder, for more than ten (10) days after Tenant's receipt of
written notice of such failure, or in any other case for more than thirty (30) days after
Tenant's receipt of written notice of such failure or such longer time as may be
reasonably required to cure because of the nature of the default (provided Tenant must
have undertaken procedures to cure the default within such thirty (30) day period and
thereafter diligently pursue such effort to completion); then, and in any of said events
("Event of Default") Landlord lawfully may, immediately or at any time thereafter,
pursuant to summary dispossession or other legal proceedings, enter into and upon the
Premises or any part thereof, repossess the same as of its former estate, and expel
Tenant, and those claiming an interest by, through or under Tenant, and remove any
personalty left by Tenant (or anyone claiming by, through or under Tenant) without
being deemed guilty of any manner of trespass, and without prejudice to any other
remedies which Landlord may have at law, in equity or under this Lease, including,
without limitation, any remedies which might otherwise be used for arrearages of rent or
other breach hereunder (but excluding any right to accelerate rent), or upon written
notice to Tenant, terminate this Lease. If Landlord elects to terminate this Lease due to
an Event of Default as aforesaid, then Tenant shall remain liable for all rental and other
obligations accruing up to the date of termination, but Tenant shall have no further
liability after the date of termination under this Lease. If Landlord elects to repossess
the Premises due to an Event of Default as aforesaid, then Tenant shall (a) remain
liable for all rental and other obligations accruing up to the date of such repossession,
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and (b) be liable to Landlord for all reasonable costs actually incurred in connection with
the repossession and re-Ietting of the Premises (including, without limitation, reasonable
attorneys' and brokerage fees, but not including any costs of renovating or retrofitting
the Premises), and (iii) remain liable for the payment of all Rent obligations payable
hereunder for the balance of the unexpired Term of this Lease in effect as of the date of
repossession by Landlord. In the event the Premises are re-Iet by Landlord, Tenant
shall be entitled to a credit against its rental obligations hereunder in the amount of
rents received by Landlord from any such re-Ietting of the Premises less any reasonable
costs incurred by Landlord (not previously reimbursed by Tenant) in connection with the
repossession and re-Ietting of the Premises (including, without limitation, reasonable
attorneys' fees and brokerage commissions, but not including any cost of renovating or
retrofitting the Premises). In the event of termination of Tenant's right of possession of
the Premises by Landlord as aforesaid, Landlord shall use reasonable efforts to re-Iet
the Premises at a fair market rental or as near thereto as is possible under the
circumstances then existing so as to minimize the damages suffered by Landlord and
payable by Tenant hereunder.
Section 17.02
Abandonment
(a) Tenant shall not vacate or abandon the Premises at any time during the
Term of this Sublease. Abandonment shall be deemed to have occurred if Tenant is
absent from the Premises for more than ninety (90) days without having made payment
of Rent as set forth in Article IV, above. If Tenant should violate this prohibition or be
dispossessed of the Premises involuntarily, by operation of law or otherwise, any
personal property belonging to Tenant left on the Premises shall be deemed to be
abandoned, at the Landlord's option, or Landlord may store such property in Tenant's
name and at Tenant's expense without notice to Tenant.
(b) Upon abandonment of the Premises, Landlord, at its election, may reenter
and relet Premises as set forth at Section 17.01, above. The rights and remedies of
Landlord under this Article are in addition to and not exclusive of any other right or
remedy of Landlord herein given or which may be permitted by law.
Section 17.03
Surrender of Premises
Except for trade fixtures, all alterations, additions, improvements, partitions,
flooring, carpeting or fixtures, including, but not limited to light fixtures, electrical fixtures,
and plumbing fixtures, which may be made or installed by either of the parties hereto or
any subtenant of Tenant upon the Premises and which in any manner attached to the
floors, walls, windows, or ceilings are to be the property at the termination of this Lease
due to Default by Tenant, unless Landlord shall elect otherwise. Landlord shall make
such election by giving notice in writing to Tenant prior to the expiration or other
termination of this Lease, or any renewal or extension thereof. In the event Landlord
shall so elect, such alterations, installations, additions or improvements made by Tenant
or any subtenant of Tenant upon the Premises as the Landlord shall so elect shall be
33
removed by Tenant, or any subtenant of Tenant, and Tenant, or any subtenant of
Tenant, shall restore the Leased Premises to its original condition at the
commencement hereof, normal wear and tear excepted, at its own costs and expense
prior to the expiration or termination of this Lease due to a Tenant Default; or if Tenant
fails to do so at Tenant's expense.
Section 17.04
Tenant's Remedies for Nonappropriation or Default
(a) Non-appropriation or Event of Default under Authority Lease or
Indenture.. If Landlord fails to appropriate funds to pay the COP amounts due or
coming due in the fiscal year next occurring during the Initial Term and successive
renewal terms and any failure to pay said funds if appropriated, to the payments due on
the COP; or, an Event of Default occurs under the Authority Lease or Indenture ,
Tenant's remedy shall be limited to its right to exercise its purchase option, as provided
for in this Lease.
(b) Other Default. In the event Landlord defaults in any of its obligations under
this Lease, other than as referred to in subclause (a) above, Tenant shall not have a
right to damages, however Tenant shall have a right to seek specific performance of the
act or obligation to be performed by Landlord, or may seek other remedies (not
including damages) which may be available at law or equity, including, without
limitation, injunctive relief. .
Section 17.05 Interest on Late Payments
All amounts required to be paid by either party to the other pursuant to this Lease shall
bear interest from the due date until the date of payment at the prime rate of Wells
Fargo Bank, NA, as published by said bank from time to time, or if said bank is no
longer publishing said rate, then the rate shown in the Wall Street Journal as the prime
rate.
Section 17.06 Attorneys' Fees
In the event of any default by either party in making any payment or performing or
complying with any covenant, condition, obligation or agreement when and as required
by the terms of this Lease, continuing beyond any period provided in this Lease for the
curing of the default, the party not in default shall be entitled to recover reasonable
attorneys' fees incurred by reason of the default and in enforcing the terms of this
Lease, including any fees incurred in bankruptcy proceedings and/or arbitrations.
Section 17.07 Remedies Cumulative
The rights and remedies of Landlord and Tenant hereunder shall be cumulative, and no
one of them shall be construed as exclusive of any other or of any rights and remedies
34
otherwise available at law or in equity. The exercise of any rights or remedies by
Landlord or Tenant shall not impair its standing to exercise any other rights or remedies.
Section 17.08 No Waiver of Default
No acquiescence by either party in any default by the other shall be construed as a
waiver of the default, and no waiver of any default shall be construed as a waiver of any
other or subsequent default.
ARTICLE XVIII
Intentionally Omitted
ARTICLE XIX
MISCELLANEOUS
Section 19.01 AH Units
During the Term of this Lease, AspenFilm shall have the first right to select a tenant
who will lease an AH Unit as it becomes available from time to time, subject to the
Aspen/Pitkin County Housing Authority ("APCHA") standards, for its employees and for
Theater employees. The City will have the second right to select a tenant who will lease
an AH Unit, subject to APCHA standards, for its employees. Tenant shall have the third
right to select a tenant who will lease an AH Unit subject to APCHA standards, for its
employees or the employees of its sub-tenants or designees. AspenFilm and City shall
both be given notice by Tenant at the time Tenant learns of an upcoming vacancy of
any AH Unit and both shall have the same 30 days from the giving of said notice to
exercise said rights by providing written notice to Tenant within said 30 day period.
Tenant shall provide said notice upon learning of an upcoming vacancy, but not earlier
than ninety days from the expiration date of the existing lease on the AH Unit that will
become vacant. The rights granted above shall be subject to Tenant's (as the landlord
under the leases for the AH Units) ability to deliver the AH Unit in the event that, after
availing itself of judicial remedies (which Tenant shall pursue in the event that an AH
Unit occupant holds over and refuses to vacate such AH Unit), Tenant is unable to eject
such occupant from an AH Unit. The City shall be responsible for amending the current
deed restrictions for the AH Unit to provide for this provision. At all times during the
Term of this Lease, Tenant shall be entitled to all rents and other proceeds from the AH
Units.
Section 19.02 Memorandum of Lease
The parties are concurrently herewith executing a Memorandum of this Lease, for public
record. As soon as practical after the Commencement Date, the parties shall execute
an amendment to the Memorandum of Lease, setting forth the Commencement Date,
the expiration date of the Initial Term, and the dates of the Renewal Terms, for public
record.
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Section 19.03 Notices
Every notice, demand, request, or other instrument required to be given pursuant to this
Lease shall be in writing and sent by United States certified mail, return receipt
requested, postage prepaid, or by a recognized overnight delivery service, and shall be
deemed effective two days after mailing or one day after deposit with the overnight
delivery service, if properly addressed as follows:
If to Landlord:
City of Aspen,
Attention: City Manager
130 S. Galena Street, 2nd Floor
Aspen, CO 81611
(b) if to Tenant:
Isis Retail Group, LLC
Attention: Courtney Lord
9 Pyramid Road
Aspen, CO 81611
with a copy to:
Klein, Cote, & Edwards, LLC
Attention: Herbert S. Klein, Esq.
201 North Mill Street, Suite 203
Aspen, CO 81611
Either party may designate an alternate or additional address by written notice given
pursuant to this section.
Section 19.04 Entire Agreement
This Lease and its exhibits, including the MOU, sets forth all the covenants,
promises, agreements, conditions and understandings between Landlord and Tenant
concerning the subject matter of this Lease. No alteration, amendment or addition to
this Lease shall be binding on Landlord or Tenant unless it is in writing and signed by
each party.
Section 19.05 Binding Effect
The provisions of this Lease shall be binding on the parties and their successors
and assigns, shall be enforceable by Landlord and its successors and assigns and by
Tenant and its permitted successors and assigns.
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Section 19.06 Consents
Wherever Landlord's consent or approval shall be required pursuant to the terms
of this Lease, such consent or approval shall not be unreasonably withheld, conditioned
or delayed.
Section 19.07 Construction
(a) This Lease shall be construed according to the laws of the State of
Colorado. If any provision of this Lease or the application thereof to any person or
circumstance shall be invalid or unenforceable, the remainder of this Lease shall not be
affected thereby and each provision shall be valid and enforceable to the fullest extent
permitted by law.
(b) The captions and index in this Lease are inserted only as a matter of
convenience, and do not define, limit, or describe the scope or intent of the articles and
sections.
Section 19.08
Deed Restrictions
The parties hereto acknowledge that this Agreement is subject to certain deed
restrictions as set forth in that certain Occupancy and Use Deed Restriction, Agreement
and Covenant appended hereto as Exhibit DR-1 and incorporated herein by this
reference.
Section 19.09
Payments due from Landlord
Any and all payments due from Landlord, including without limitation, those set forth at
Sections 10.02(c), 17.05, and 17.02, shall not be an obligation of Landlord beyond the
fiscal year for which funds are appropriated for the payment therefore or to make
payments from any funds from the City of Aspen other than funds appropriated for the
payment of current expenditures.
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IN WITNESS WHEREOF, Landlord and Tenant have signed this Lease.
LANDLORD:
THE CITY OF ASPEN,
a municipal corporation acting through
its City Council pursuant to its Charter
and the laws of State of Colorado
By:
Steve Barwick, City Manager
TENANT:
ISIS RETAIL GROUP, LLC,
a Colorado Limited Liability Company
By:
Courtney Lord
Its: Manager
JPW- saved: 1/27/2007 _15611_G:~ohn\word\agr\lsis\Retail-Lease-1-27 -06.DOC
38
SUBLEASE
by and between
The City of Aspen ("City" or "Landlord"),
and
Independent Films, Inc.
a Colorado Nonprofit Corporation d/b/a Aspen Filmfest
("Tenant")
Dated:
[Date of Issuance]
Isis Building
Aspen, Colorado
1/77!,p 1- ./rw
'j}.e.~
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01. Definitions and Construction of Terms 6
ARTICLE II
GRANT AND TERM
Section 2.01. Premises 6
Section 2.02. Assignment of Declarant and Owners Rights 7
Section 2.03. COP Financing 8
Section 2.04. Term 9
Section 2.05. Rights to Purchase 10
ARTICLE III
CONSTRUCTION
Section 3.01. Landlord's Construction 12
Section 3.02. Tenant's Work 12
Section 3.03. Remodel of Lobby Area for Retail Use 12
ARTICLE IV
RENT
Section 4.01. Base Rent 13
Section 4.02. Reserve Account 13
ARTICLE V
USE AND OPERATION
Section 5.01. Use of Premises 14
Section 5.02. Signs 14
ARTICLE VI
COMMON AREAS
Section 6.01. Use of Common Areas 15
Section 6.02. Operation of Common Areas 15
Section 6.03. Common Area Expenses and Tenant's Pro-
Rata Share 16
Section 6.04. Tenant's Obligation for COP Administrative
Costs 16
Section 6.05. Changes to the Building or Premises 16
ARTICLE VII
REAL ESTATE TAXES
Section 7.01. Tenant's Tax Obligation 17
ARTICLE VIII
UTILITIES
Section 8.01. Utilities 17
ARTICLE IX
MAINTENANCE AND ALTERATIONS
Section 9.01. Maintenance and Alterations 18
Section 9.02. Nuisance and Cleanliness 18
Section 9.03. Alteration of Premises 19
ARTICLE X
INSURANCE
Section 10.01. Insurance During Term 19
Section 10.02. Landlord Not Liable for Damages -Covenant to
Hold Harmless 20
ARTICLE XI
FIRE AND OTHER CASUALTY
Section 11.01. Repair of Presmises and Building 21
ARTICLE XII
EMINENT DOMAIN
Section 12.01. Condemnation 22
Section 12.02. Damages 22
Section 12.03. Temporary Taking 22
ARTICLE XIII
ASSIGNMENT, SUBLETTING AND RIGHTS TO LEASE OR
ACQUIRE ASPEN FILM PREMISES
Section 13.01. Assignment and Subletting by Tenant 23
Section 13.02. Right to Acquire AspenFilm Lease 24
2
Section 13.03. AspenFilm's Right to Acquire Tenant's Lease
Section 13.04. AspenFilm's Right to Negotiate Acquisition of
the Property
Section 13.05. AspenFilm's Right to Acquire Interests in
Tenant
26
27
28
ARTICLE XIV
ESTOPPEL CERTIFICATE, ATTORNMENT AND SUBORDINATION
Section 14.01. Estoppel Certificates 30
Section 14.02. Subordinantion, Non-Disturbance and
Attornment 30
ARTICLE XV
TENANT'S RIGHT TO MORTGAGE
Section 15.01. Tenant's Right to Encumber 31
ARTICLE XVI
QUIET ENJOYMENT
Section 16.01. Landlord's Covenants 31
Section 16.02. Landlord's Mortgages 31
ARTICLE XVII
DEFAULT
Section 17.01. Default by Tenant 32
Section 17.02. Abandonment 33
Section 17.03. Surrender of Premises 33
Section 17.04. Landlord's Default 34
Section 17.05. Interest on Late Payment 34
Section 17.06. Attorney's Fees 34
Section 17.07. Remedies Cumulative 34
Section 17.08. No Waiver of Default 34
ARTICLE XIX
MISCELLANEOUS
. Section 19.01. AH Units 35
Section 19.02. Memorandum of Lease 35
Section 19.03. Notices 35
Section 19.04. Entire Agreement 36
Section 19.05. Binding Effect 36
3
Section 19.06.
Section 19.07.
Section 19.08.
Section 19.09.
Consents
Constrcution
Deed Restrictions
Payments Due from Landlord
EXHIBITS:
Ex. MOU-1 - Memorandum of Understanding
Ex. A - The Premises Plan
Ex. DR-1 _ Occupancy and Use Deed Restriction, Agreement, and Covenant
Ex. B - Renovation Agreement
Ex C - Base Rent Schedule
Ex. D - Statement of members of Tenant LLC
4
36
36
37
37
SUBLEASE
THIS SUBLEASE (the "Lease") is entered into as of the 16th day of February,
2007, between, The City of Aspen, a Colorado Municipal Corporation acting through its
City Council, the address of which is 130 South Galena Street, Aspen, CO 81611, (the
"City" or "Landlord"), and Independent Films, Inc., a Colorado nonprofit Corporation,
the address of which is 110 E. Hallam St., Aspen, CO 81611 ("Tenant").
WHEREAS, City, Tenant and Isis Retail Group, LLC, a Colorado limited liability
company ("Isis Group") have entered into a Memorandum of Understanding (the
"MOU"), a true copy of which is attached hereto at Exhibit MOU-1, concerning the
acquisition, redevelopment and leasing of the Isis Theater Building (the "Building")
located at 406 East Hopkins, Aspen Colorado. All capitalized terms in the MOU shall be
given the same meaning herein; and,
WHEREAS, The City of Aspen Public Facilities Authority, a non-profit
corporation ("Authority"), the address of which is 130 South Galena Street, Aspen,
CO 81611, is the owner of the Commercial Unit, ("Commercial Unit A") and Units C
and D (the "AH Units") in the Building, is the "Authority" referred to in the MOU, and
has entered into a Lease Purchase Agreement with the City for the rental of said units,
which Lease Purchase Agreement is recorded at reception no. , of the
records of the Clerk and Recorder of Pitkin County, Colorado, (the "Authority Lease");
and
WHEREAS, City is hereby subleasing to Tenant, its interest in the Authority
Lease as it pertains to the Premises, and is also executing this Lease for the purpose of
memorializing its obligations, duties and rights, other than as Landlord, as set forth in
the MOU with respect to the Tenant's rights and obligations set forth herein and in the
MOU; and
WHEREAS, it is intended that, Commercial Unit A, as defined in the
Condominium Declaration for Isis Theater Condominiums ("Declaration") recorded in
the Pitkin County Clerk and Recorder's records at reception #438433 on December 9,
1999, and as shown on the Condominium Plat recorded in the Pitkin County Clerk and
Recorder's records at Plat Book 52, Page 1, on December 9, 1999 (the "Plat"), be
reconfigured and recondominiumized (the "Recondominiumization") to create a
separate commercial condominium unit for the Premises leased hereunder, to be known
as "Commercial Unit 2," and to create Commercial Unit 1, to be leased by Isis Group,
as a tenant thereof under a separate lease agreement with Landlord (the "Isis Group
Lease"), all substantially in accordance with the plan shown on Exhibit A, attached
hereto and incorporated herein by this reference (the '''Premises Plan"); and
5
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01
Definitions and Construction of Terms-
Defined terms used in this Lease which are also used in the Authority Lease shall
have the same meaning as in the Authority Lease, unless otherwise specified herein or
unless the context requires a meaning unique to this Lease. In the event of any
inconsistency between the meaning of a defined term in the Authority Lease and the
meaning of a defined term that makes sense in the context of this Lease, the meaning
that makes sense in the context of this Lease shall be given paramount effect; provided,
however, the parties hereto acknowledge that this Agreement is intended to comply in
all respects with the Authority Lease and it shall be interpreted to be consistent with the
intent of the Authority Lease.
ARTICLE II
GRANT AND TERM
Section 2.01
Premises
(a) In consideration of the sums to be paid and the obligations to be
performed by each of the parties pursuant to this Lease, Landlord hereby leases to
Tenant, and Tenant rents from Landlord, premises consisting of the following which are
contained in the Building: (i) a portion of the Premises shown on the Premises Plan and
described thereon as Commercial Unit 2 together with all improvements and equipment
now or hereafter erected or installed thereon, all of which are subject to the Declaration
(collectively, Commercial Unit 2 shall be referred to herein as the "Premises"). Isis
Group shall lease pursuant to a separate Sublease Agreement Commercial Unit 1 and
Units C and D (the "AH" Units). The portion of Commercial Unit A that is included in
the Premises shall be referred to herein as Commercial Unit 2, and the portion of
Commercial Unit A that is to be leased by Isis Group shall be referred to herein as
"Commercial Unit 1" and the AH Units, notwithstanding the pendency of completion of
the Recondominiumization.
(b) Commercial Unit 2 shall be deemed to contain, as of the date hereof,
( ) Square Feet of floor area ("Commercial Unit 2 Floor
Area"). Until such time as the Recondominiumization is completed, Tenant's share of
common expense and utility charges (not otherwise separately metered or assessed to
Commercial Unit 2) (the "Tenant's Commercial Unit Pro-Rata Share"), shall be
6
seventeen (17%) percent of those assessed to Commercial Unit A (3,700/21,664 (total
floor area of Commercial Unit A). The Commercial Unit 2 Floor Area calculation shall be
subject to adjustment in the event any mezzanines are constructed within the
boundaries of Commercial Unit 1 so that the Tenant's Commercial Unit Pro-Rata Share
shall be the percentage of floor area within Commercial Unit 1 plus Commercial Unit 2,
that Commercial Unit 2, including new mezzanine floor area represents. In the event the
boundaries of Commercial Unit 1 are expanded beyond those shown on the Premises
Plan to take a portion of the remaining floor area of Commercial Unit 2 (with
AspenFilm's consent), then the floor area of the expanded portion of the boundary of
Commercial Unit 1 shall be added to the Commercial Unit 1 Floor Area and subtracted
from the remaining floor area of Commercial Unit 2 and the ratio of the resulting floor
areas shall be recalculated and the Tenant's Commercial Unit Pro-Rata Share shall be
revised accordingly.
Section 2.02 Assignment of Declarant and Owner Rights
Not later than the Commencement Date (defined below), Landlord shall have obtained
from the Authority: (a) an assignment to Landlord: all of the Declarant's reserved rights
under the Declaration pursuant to a form of assignment reasonably acceptable to
Tenant and Isis Group; and (b) an irrevocable proxy, coupled with the interest passed
by the Authority Lease, of the right to vote all of the votes in the Association allocated
to Commercial Unit A and the AH Units as set forth in the Declaration. Said
assignments shall remain in effect throughout the term of this Lease (subject, however,
to the expiration of Declarant Rights as provided in the Declaration). Landlord agrees
that during the term of this Lease, Landlord shall exercise the Declarant Rights and
voting rights as necessary and as reasonably requested by Tenant to fulfill the
Landlord's obligations under this Lease and as reasonably requested by Isis Group to
fulfill Landlord's obligations under the Isis Group Sublease (collectively, the "Subtenant
Leases") to assist Tenant and Isis Group in fulfilling the Tenant's and Isis Group's
obligations under the Subtenant Leases, to assist Tenant and Isis Group in exercising
Tenant's and Isis Group's rights under the Subtenant Leases and, generally, as
necessary to fulfill the intent of the Subtenant Leases. Landlord expressly agrees that it
shall fully exercise all of said rights as necessary to facilitate the Recondominiumization,
including the initiation and prosecution of litigation, if necessary, and any and all
changes to common elements in the Building reasonably requested by Tenant and Isis
Group, including, without limitation, all changes to the exterior of the Building approved
by the City and/or its boards and commissions. Except as otherwise expressly provided
for above, in the event of a conflict between Tenant's direction to Landlord and Isis
Group's direction to Landlord, Landlord shall exercise its voting rights and Declarant
Rights in a manner that it deems to be in the best interests of Tenant, the owner of
Commercial Unit 1, and Landlord. At the time of the Recondominiumization, Landlord,
acting through its assignment of Declarant Rights, shall allocate the votes in the
Association attributable to Commercial Unit A, equally between Commercial Unit 1 and
Commercial Unit 2. With the exception of the expansion of Residential Unit B (the Free
Market Unit) to add a bedroom of no more than 500 sq. ft. or the re-development of the
7
Notch area as described in the MOU, City further agrees that it shall not exercise said
rights to approve construction of new condominium units on the roof or the expansion of
existing condominium units on the roof of the Building, without first obtaining Tenant's
written consent. Tenant's written consent shall not be unreasonably withheld.
Section 2.03 COP Financing
(a) The City has, or shall before the Commencement Date, cause there to be issued
approximately $8,440,000.00 in Certificates of Participation ("COP") for the
purchase of the Premises. The COP shall be 30-year, self-amortizing obligations
and shall bear a coupon rate of not more than 6%, shall be callable in whole or in
part, at par value, at the City's option at any time after one hundred twenty (120)
months, and may contain such optional defeasance provisions as are customary
for municipal finance obligations.
(b) The City shall be responsible for coordinating any disclosures regarding the City,
the Authority, the Property and these transactions as the City shall deem
appropriate, and while Tenant shall have the right and opportunity to review and
comment on such disclosures and the COP documents generally, Tenant shall
not be liable or legally responsible in any way for such disclosures or any
deficiencies therein.
(c) The COP proceeds have, or shall be, utilized for the acquisition of the
Commercial Unit A and the AH Units; for the costs of issuing, rating and insuring
the COP; for the costs of the Recondominiumization and the physical renovation
of Commercial Unit 1 to enable it to be used for retail purposes; and, for
reconfiguring the lobby area of Commercial Unit A, as defined in the MOU (any
and all conversion and construction costs shall include all "hard" and "soft" costs
relating to architectural, engineering, planning, approvals, permitting, the
Recondominiumization, and actual construction); for leasing commissions due
ISIS Property Group. LLC; and for such miscellaneous costs as Tenant may
incur in connection with these transactions.
(d) It is understood that:
1 Tenant shall be responsible for the servicing and repayment of the
ASpenFilm Base Rental Allocation as defined in the Authority Lease (the
"Tenant's Base Rent Allocation");
2 The tenant of the newly created Commercial Unit 1, Isis Group shall be
responsible for the servicing and repayment the Isis Group Base Rental
Allocation as defined in the Authority Lease (the "Isis Group COP
Allocation");
3 The City shall, subject to the limitations of the Authority Lease pay to the
Authority under the terms of the Authority Lease all Base Rentals as
8
defined therein. In no event shall City be responsible for the payment of
any costs not identified herein or in the Authority LeaSe.
4 At the CCA Closing (as defined in the MOU), Landlord shall, out of the
COP proceeds and cash invested by Tenant and Isis Group, make the following
payments and/or establish the following accounts for future expenditures, as more fully
described and conditioned according to the terms of the MOU:
Proiect Costs
Purchase
COP Issuance Costs
Housing Mitigation
Retail Construction
Leasing Commissions
Architectural Fees
legal Fees
Planning Fees
Debt Service while under const.
Continaencv
TOTAL
SOURCES
Isis Group Contribution
AspenFilm Contribution
COP Proceeds
TOTAL
Section 2.04 Term
Amount
$7,497,000
391,0000
323,000
550,000
180,000
35,000
50,000
15,000
300,000
50,000
$9,391,000
$ 600,000
350,000
8.441,000
$9,391,000
The Lease Term shall be comprised of the Initial Term commencing on the date
the 2007A Certificates are issued and ending on December 31,2007) and thirty (30)
successive one-year Renewal Terms, subject to subsection (a) of this Section.
(a) This Lease Term shall expire upon the earliest of any of the
following events:
(i) September 30, 2037
(ii) December 31 of any Fiscal Year during which an Event of
Nonappropriation has occurred under the Authority Lease
9
(iii) the purchase of all of the Leased Property by the Tenant
pursuant to Section 2.05 hereof; or
(iv) any termination of the Authority Lease following an Event of
Default thereunder; or
(v) termination of this Lease following an Event of Default in
accordance with Section 17.01 hereof.
Section 2.05
Rights to Purchase
(a) Upon Notice of Default by City: Provided the Recondominiumization
has been completed, in the event City is in default in its obligations under the Authority
Lease or the Authority is in default under the Indenture, including, without limitation, a
failure by the City to appropriate funds to pay the Base Rentals due or coming due in
the fiscal year next occurring, City shall immediately provide notice to Tenant, along
with a copy of any notice from the Authority or the COP indenture trustee stating that an
event of default by the City (Landlord) or the Authority, as applicable has occurred.
Upon the giving of such notice, Tenant shall have the right to purchase the Premises for
an amount equal to the sum of the then-outstanding principal amount of the Tenant's
Base Rent Allocation, all accrued and unpaid interest thereon and all costs of paying off
the portion of the COP allocated to Tenant's Base Rent Allocation, and regardless of
any preclusion against prepayment or redemption, provided Tenant gives notice of its
intent to exercise this purchase right not later than sixty (60) days after the giving of said
notice and close within ninety (90) days of the giving of said notice from the Authority or
the COP indenture trustee, and further provided that Isis Group exercises its right to
purchase Commercial Unit 1 concurrently, provided, however, if Isis Group does not
exercise its right to purchase Commercial Unit 1 concurrently, then Tenant shall have
only the right to purchase the Premises together with Commercial Unit 1 , for an amount
equal to the sum of the then-outstanding principal amount of the entire COP, all accrued
and unpaid interest on the COP and all costs of paying off the COP. The City agrees
that in connection with the Authority Lease, a purchase option agreement will be
executed between the Authority and Tenant ("Purchase Option Agreement") which
implements the purchase option set forth herein and is recorded in as an encumbrance
on the Building with a priority senior to any lien for the COP financing. Isis Group's
rights to purchase its premises and Tenant's Premises, if Tenant does not exercise its
right to purchase the Premises upon a default by the City, shall also be included in the
Isis Group Lease and in a purchase option agreement between the Authority and Isis
Group The Purchase Option Agreement shall provide that the property being acquired
thereby, shall be free and clear of this Lease and the Isis Group Lease and the
covenants and restrictions referred to in Section 5.01 (c) of this Lease, but subject to
Permitted Encumbrances permitted by the Authority Lease.
10
(b) By Defeasance: Prior to March 1, 2007, Tenant shall have the right to
purchase the Premises from Landlord by defeasing Tenant's Base Rent Allocation with
United States Treasury securities in amounts and maturities sufficient to service the
Tenant's Base Rent through March 1, 2017 and to retire the Tenant's Base Rent
Allocation as of March 1, 2017 , and further provided that Isis Group exercises its right
to purchase Commercial Unit 1 concurrently, upon not less than 60 days notice to
Landlord of the intent of Tenant to purchase the Premises and the intent of Isis Group to
purchase Commercial Unit 1 .
(c) After ten (10) years of the Term: At any time after March 1, 2017
issuance Tenant shall have the right (provided that Tenant is not in default, after notice
and the expiration of any applicable cure period) to purchase the Premises from
Landlord for an amount equal to the then-outstanding prinCipal balance of the Tenant's
Base Rent Allocation and any accrued but unpaid interest thereon upon no less than 60
days' notice to Landlord of Tenant's intent to purchase the Premises; and it is
understood that Tenant's rights as to the retirement of the Tenant's Base Rent
Allocation and as to obtaining title to Commercial Unit 2 shall be analogous to its rights
under a "contract for deed" purchase of real estate. If the above rights are not
exercised prior to the full payment of Tenant's Base Rent Allocation, upon such full
payment, Tenant shall have the right to purchase Commercial Unit 2 for ten ($10.00)
dollars.
(d) Cross Options: In the event Tenant or Isis Group elect not to exercise
their respective rights to purchase under the terms of Section 2.05 (b) (or the
equivalent terms applicable to Isis Group), the exercising party shall have the right to
purchase the non-exercising party's premises by giving not less than 60 days' notice to
Landlord that said exercising-party wishes to acquire the non-exercising party's
premises at the same time that the exercising-party gives notice of its election to
exercise its purchase rights. The exercising party shall take the non-exercising party's
premises subject to the terms of the non-exercising party's lease, except that none of
the purchase options contained in Sections 2.05 (a), (b) and (c) of the non-exercising
party's lease shall be given effect.
(e) Identical Terms: Terms identical to those set forth in this Section
2.05, modified as appropriate for correct references to the parties and the premises
involved, shall be included in the Isis Group Lease.
(f) Upon the transfer by the Authority or Landlord 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 Aspen/Pitkin County Housing Authority, of a Y. of 1 %
undivided ownership interest in each of the AH Units, however, such ownership shall
not include any right to rents or proceeds of sale, nor other economic interests, nor any
obligation for the payment of any costs of ownership, nor any decision making authority
with respect to the use, operation, control, etc, of the AH Units. After the date upon
which title to the AH Units passes to Isis Group, should Isis Group wish to transfer title
11
to the AH Units to a third party, Landlord agrees to execute such documents and take
any actions as may be necessary to perfect the transfer of title desired by Isis Group,
without any further consideration owing to Landlord, City or Authority.
ARTICLE III
CONSTRUCTION
Section 3.01
Landlord's Construction
(a) Landlord is not obligated to perform any construction work within the
premises. Tenant agrees to accept the Premises in "As-Is" condition and will perform all
work required or necessary within the Premises.
(b) City acknowledges that time is of the essence as to the
Recondominiumization, the conversion of the Premises (the West Main Theater) to
retail space and the reconfiguration of the Lobby, all as referred to in the MOU.
Accordingly, the City agreed in the Isis Group Lease that all plans and submissions of
Isis Group 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, all
rents due under the Isis Group Lease shall be abated until the required approvals and
building permits are issued by the City. Isis Group 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, Isis Group shall be liable to pay to the
City as rent only for those amounts collected from any sub-lessee in the Isis Group
Lease premises at that time, less a proportionate share of the common area
maintenance, real estate taxes, and other operating expenses of the building and no
more, but nothing contained therein shall relieve Isis Group of its obligation to pay to
AspenFilm any and all rents and other sums withheld or abated by the theater operator
in Commercial Unit 2 as provided for in the Mou.
Section 3.02 Tenant's Work
Tenant accepts the Premises in its present "as is" condition without any warranty or any
obligation of Landlord to make any improvements in or to the Building. The interior of
the Premises shall be the responsibility of Tenant and under the complete control and
supervision of Tenant ("Tenant Work").
Section 3.03 Remodel of Lobby Area for Retail Use
12
In accordance with the Isis Group Lease, Isis Group shall, pursuant to the Renovation
Agreement, appended to the Isis Group Lease as Exhibit B, shall cause the
Improvements to be constructed, acquired and installed in and on the Premises and
Commercial Unit 2 in accordance with the Renovation Agreement.
ARTICLE IV
RENT
Section 4.01
Base Rent
The monthly base rent ("Monthly Base Rent") payable by Tenant shall be equal
to one-sixth of the semi-annual debt service (principal and interest) due on the Tenant's
Base Rent Allocation of the COP, as may be adjusted for various credits under the
Authority Lease, which is 31.4% of the monthly base rent payable by the City under the
Authority Lease. Tenant's annual base rent shall be as set forth in Exhibit C appended
hereto ("Annual Base Rent"), payable in monthly installments on the 15th day of each
month, with the first payment due and payable at the CCA closing and on the 15th day
of the month thereafter.
Section 4.02
Reserve Account
(a) In addition to the Base Rent required to be paid as set forth at Section 4.01,
Tenant shall pay to Landlord the sum of $150.00 per month as and for a capital reserve
fund as described below. The Isis Group Sublease Agreement shall contain a similar
requirement in the amount of $250.00 per month.
(b) Landlord shall establish a Capital Reserve Fund and shall be maintained by the
Trustee as a separate and distinct fund from any COP repayment accounts. Said
Capital Reserve Fund shall be maintained until such time as the Premises and
Commercial Unit 1 are conveyed to both Tenant and Isis Group whereupon the balance
of the fund shall be transferred back to Tenant and Isis Group in the same proportion
that it was funded. If either Isis Group or Tenant acquires its respective premises and
the other party does not acquire its respective premises, then the proportionate share of
the balance of the Capital Reserve Fund shall be transferred back to the party who
acquires its respective premises. The fund shall be applied as necessary to pay the
costs of capital repairs or improvements over the life of the building. The funds may be
used as required and as determined by Landlord upon the request and/or advice of Isis
Group and Tenant for such purposes as roof, exterior walls, interior bearing walls, the
building foundation, the plumbing, water sewer, electrical, heating or ventilation
systems, including replacement of fixtures and equipment. Landlord shall have no
responsibility for any capital repairs and improvements notwithstanding the fact that the
Trustee shall maintain this Capital Reserve Fund. In the event of insufficient capital
13
. reserves, Landlord- may, in its sole and exclusive discretion, use other funds within its
control to undertake such necessary repairs or improvements. Landlord may require
reimbursement from Tenant in amounts that Landlord, in its sole discretion, deems fair
under the circumstances. Should a disagreement arise between the parties concerning
the necessity for any repair or capital improvement, or the allocation of the cost of such
repair or improvement, Landlord shall have ultimate decision-making authority with
regard to the same.
ARTICLE V
USE AND OPERATION
Section 5.01
Use of Premises
Subject to the provisions of Section 5.02, Tenant shall, during the entire Term,
use the Premises, if at all, for operating movie theaters, subject, however, to occasional
use for live performances, community events, meeting rooms, speeches, auxiliary uses
for Tenant presentations and other artistic, educational, nonprofit or community
purposes; and provided, however, that other uses may be approved by the City Council
of the City of Aspen if it determines in its sole discretion that technological, sociological
or economic changes rendering theater use obsolete or impracticable.
ARTICLE VI
COMMON AREAS
Section 6.01
Use of Common Areas
Landlord hereby grants to Tenant and its subtenants, agents, employees, customers,
licensees and other invitees the nonexclusive easement, in common with Landlord and
all other tenants and owners of the Building and their agents, employees, customers
and licensees to use all the Common Areas of the Building as provided in the
Declaration of Condominium during the term thereof and thereafter in the same manner
as provided in the Declaration. "Common Areas" are more fully described in the
Declaration and shall be the governing language and definition. Landlord shall not grant
any other person other than owners or other tenants in the Building the right to utilize
the Common Areas and shall use reasonable efforts to prevent such other persons from
utilizing the Common Areas.
Section 6.02 Operation of Common Areas
(a) Landlord shall or shall cause the Isis Theater Condominium Association
(the "Association") to engage Tenant, Isis Group, or any entity controlled by the
members of Tenant (at Tenant's discretion), to act as property manager for the Building
14
under a separate management agreement for an initial period of one year and at a
market rate management fee. Said management fee shall be payable by Isis Group's
retail subtenant and by a pass-through payment payable by Tenant's commercial
theater operator subtenant. The management agreement shall be automatically
extended for successive one year terms for so long as (x) Courtney Lord shall be a
member of Isis Group and Isis Group shall own Commercial Unit 1 and (y) the COP
financing shall be outstanding on Commercial Unit 2, unless said management agreed
is terminated for cause. For purposes on this section, "cause" shall be defined as (i)
charging more than "market rate" for goods and services; (ii) failure to manage the
Property in according to customary business practices with respect to the management
of similar properties; or (iii) fraud in accounting for fees and costs. (b) In the event
there is a disagreement between Tenant and Isis Group concerning whether or not
cause, as defined herein, sufficient for termination exists, upon the request of either
Tenant or Isis Group, the 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 ("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 Tenant as are reasonably necessary to demonstrate that the
alleged default has been cured. Upon expiration of the Cure Period, City shall make a
determination as to whether or not the cure of the alleged default has been made. If the
cure has not been made to City's reasonable satisfaction, City may terminate the
management agreement on the last day of the month in which the City's determination
was made, by notice given to said manager, not later than ten (10) days prior to the
termination date.
Section 6.03 Common Area Expenses and Tenant's Pro-
Rata Share
(a) Tenant shall contribute to the cost of operating the Common Areas
("Common Area Expenses") pursuant to the provisions regarding same contained in
the Declaration and all operating costs, assessments for maintenance costs for the
Building, real estate taxes and casualty and liability insurance premiums for Commercial
Unit 2. Tenant's obligation for said costs shall be in the amount of the assessments
levied against Commercial Unit A multiplied by Tenant's Commercial Unit Pro-Rata
Share. After the Recondominiumization has been completed, Tenant's obligation for
said costs with respect to Commercial Unit A, shall be the full amount of the
assessments levied against Commercial Unit 2.
(b) Under no circumstance shall the Landlord be responsible for any such
operating costs, real estate taxes or casualty or liability insurance premiums or for any
other costs of owning or operating Commercial Unit 2 while this Lease is in force. It is
agreed that the Lease is a triple net lease and Landlord is not liable for any expenses
for operating the Building or Premises. To the extent Landlord is required to pay any
amounts as Additional Rentals under the Authority Lease with respect to the Premises,
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Tenant shall reimburse such amounts within 30 days, subject to the provisions for
contesting any such amounts in the Authority Lease.
Section 6.04 Tenant's Obligation for COP Administrative Costs
Tenant shall pay to Landlord all COP administrative costs incurred with respect
to the Premises. If such costs are not separately assessed to the Premises, then the
administrative costs shall be equitably apportioned among Commercial Units 1 & 2 and
the AH Units. Such payment shall be made within thirty (30) days of Tenant's receipt of
an invoice therefore from Landlord, together with a detailed statement of the charges
and any allocation formula.
Section 6.05 Changes to the Building or Premises
No alterations or changes shall be made to the Building or Premises by or with the
consent of Landlord, without Tenant's approval and shall only be made in accordance
with the procedures contained in the Declaration. Any construction of the proposed
Notch as described in the MOU is exempt from this provision.
ARTICLE VII
REAL ESTATE TAXES
Section 7.01
Tenant's Tax Obligation
(a) Without limiting Tenant's obligations under Section 6.03 hereof, Tenant
covenants and agrees to pay prior to delinquency an amount equal to all real estate
taxes and assessments ("Impositions") which may be levied or assessed by any lawful
authority against the Premises, for each calendar year or part thereof of the Term from
and after the Commencement Date. After the Recondominiumization is completed,
Landlord shall arrange for all tax bills and assessment notices to be provided to Tenant
directly by the taxing authorities and thereafter, Tenant shall pay all Impositions directly
to the appropriate taxing authorities. Provided that Landlord has given Tenant not less
than sixty (60) days notice in advance of the due date of any Impositions, Tenant shall
be responsible for any late payment charges or interest relating to its failure to pay any
Impositions when due. Tenant's obligation for said Impositions shall be in the amount of
the Impositions levied against Commercial Unit A multiplied by Tenant's Commercial
Unit Pro-Rata Share. After the Recondominiumization has been completed, Tenant's
obligation for said Impositions with respect to Commercial Unit A, shall be the full
amount of the assessments levied against Commercial Unit 2.
(b) City agrees that any fee simple transfer of Commercial Unit 2 by the City
or the Authority to Tenant or its successor shall be exempt from RETT, WHRETT and
any other City-imposed real estate transfer tax in effect at the time of such transfer
ARTICLE VIII
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UTILITIES
Section 8.01
Utilities
Without limiting Tenant's obligations under Section 6.03 hereof, Tenant shall pay when
due, all utility charges separately metered or separately billed to the Premises. Utilities
that are not separately metered or charged, will be paid through Common Area
Expenses. Landlord hereby grants Tenant, its agents and invitees, a nonexclusive
easement, in common with Landlord and all other occupants of the Building to whom
Landlord has granted or may hereafter grant similar rights, to install, use and maintain
all utility systems and facilities serving the Premises, including without limitation all utility
conduits, piping, conductors and the like, on, over, across and under the Building, along
routes designated by Landlord for the benefit of all tenants and owners in the Building,
subject to the terms of the Declaration.
ARTICLE IX
MAINTENANCE AND ALTERATIONS
Section 9.01
Maintenance and Alterations
(a) Those portions of the Building and Premises which are general common
elements as defined in the Declaration shall be maintained and repaired by the
Association and Landlord shall exercise all its powers as an owner of the Premises, to
cause the Association undertake maintenance and repairs of the general common
elements as necessary to maintain the Building as a first class residential and
commercial property, except that if any such repair is required by reason of the Tenant's
negligence or the negligence of any of its agents or employees, the Landlord or the
Association may make such repair and add the cost thereof to the first installment of
rent which shall thereafter become due. Except as provided in Articles XI and XII,
Tenant shall at all times throughout the Term keep the Premises and any portion thereof
which is not a common element, and all partitions, door surfaces, fixtures, equipment
and appurtenances thereof (including lighting, heating and plumbing fixtures and air
conditioning systems) in good order, repair and condition.. Without limiting the
generality thereof, Tenant shall keep the glass of all windows and doors clean and
presentable; promptly replace all broken glass in the Premises; keep the heating
system, air conditioning system, lighting system and all plumbing systems in the
Premises clean and in a good state of repair, including pipes, drains, toilets, fixtures and
basins; and keep all utilities within the Premises in a good state of repair. Tenant
acknowledges and agrees that other than the obligation to exercise its powers as an
owner to cause the Association to maintain and repair the general common elements of
the Building, Landlord has no maintenance, repair, replacement or other duty of any
kind or nature with respect to the Building.
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(b) Tenant shall maintain the Premises in a clean, sanitary and safe condition in
accordance with all directions, rules and regulations of health officers, fire marshals,
building inspectors, and other governmental officials, and comply with all requirements
of law affecting the Premises.
Section 9.02
Nuisance and Cleanliness
Tenant covenants that it will exercise the highest duty of care to maintain the Premises
in a clean condition and to provide sufficient trash and garbage service. Tenant shall not
permit any noxious or offensive odors to exist in or around the Premises. Tenant shall
not perform any act or carry on any practices that may injure the Building, of which the
Premises form a part, or be nuisance or menace to other tenants or unit owners in said
Building. A breach of the obligations set forth in this section by Tenant shall constitute a
material breach of this Lease.
Section 9.03 Alteration of Premises
Tenant shall have the right to undertake construction within the Premises and upon the
exterior walls of the Premises, as necessary to accommodate its permitted uses,
without first obtaining Landlord's consent, but such work shall be subject to compliance
with all applicable building codes; obtaining requisite approvals from applicable City
boards and commissions and the Association to the extent required by the Declarations.
Tenant shall perform any such alterations in a manner which minimizes, to the extent
reasonable, the disruption to the operations of the Building and its tenants and owners.
All alterations shall be made in accordance with all applicable laws, ordinances and
regulations, and Tenant shall obtain all governmental permits and consents prior to
undertaking any such alterations, and perform such alterations and/or improvements in
accordance with the terms of the Declaration.
ARTICLE X
INSURANCE
Section 10.01 Insurance During Term
(a) During the Term, Tenant or its sub-tenant(s) shall insure the Premises
against all risks normally insured against on an "all risk" form of policy for its full
replacement cost; shall maintain commercial general liability insurance with respect to
the Building and the business operated by Tenant or its sub-tenant(s) therein, including
contractual liability coverage, with combined limits of not less than Two Million Dollars
($2,000,000) for personal injury or death and property damage. In addition, Tenant or
its sub-tenant(s) shall either maintain fire and extended coverage, vandalism, malicious
mischief and special extended coverage insurance in an amount sufficient to cover the
cost of replacement of all furnishings, fixtures and equipment in the Premises, or
self-insure against such risks. Landlord shall exercise its powers as an owner to cause
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the Association to carry and maintain during the Term, the insurance required by the
Declaration.
(b) The insurance policies provided pursuant to subsection (a) of this Section
shall meet the following conditions: (i) any insurance policy may have a deductible
clause in an amount deemed reasonable by the City; (ii) each insurance policy shall be
provided by an insurer rated "A" by Best or in the two highest rating categories of S&P
and Moody's, unless waived by the Certificate Insurer; (iii) each insurance policy shall
be so written or endorsed as to make losses, if any, payable to the City, the Authority,
the Trustee American national Bank, Denver, Colorado, or any successor thereto), and
the Tenant, as their respective interests may appear; (iv) each insurance policy shall
contain a provision to the effect that the insurance company shall not cancel the policy
or modify it materially and adversely to the interest of the Landlord, the Authority, the
Trustee or the Tenant, if applicable, without first giving written notice thereof to the such
parties at least 10 days in advance of such cancellation or modification; (v) each
insurance policy, or each certificate evidencing such policy, shall be deposited with the
Landlord and Trustee; (vi) full payment of insurance proceeds under any insurance
policy up to the dollar limit required by this Section in connection with damage to the
Leased Premises shall not, under any circumstance, be contingent on the degree of
damage sustained at other property owned or leased by the Landlord or the Tenant; (vii)
each insurance policy shall explicitly waive any co-insurance penalty; and (viii) coverage
under each insurance policy shall apply exclusively to the Leased Premises (except as
provided in subsection (d) of this Section) and must be available to repair or rebuild the
Leased Property under all circumstances after the occurrence of an insured peril.
(c) Landlord may provide any of the insurance required by subsection (a) of
this Section under blanket insurance policies which insure not only the risks required to
be insured hereunder but also other similar risks.
(d) Landlord shall cause an insurance consultant, which may be the person
providing the insurance, to annually review the coverage of the policies of insurance
maintained pursuant to this Section and to make recommendations thereon, and Tenant
shall comply with such recommendations.
Section 10.02 Landlord not Liable for Damages - Covenant to Hold Harmless
(a) Landlord shall not be liable to tenant or to any other person whatsoever for
any damage occasioned by falling plaster, electricity, gas, water, steam, sprinkler or other
pipe and sewage system or bursting, running or leaking of any tank, washstand, closet or
waste to other pipes in or about the Premises, or the Building or which they are a part,
nor for any damage occasioned by water being upon or coming from the roof, or vent, or
otherwise for any damage arising from any acts or neglect of co-tenants or other
occupants or unit owners of the Building or of adjacent property, or the public, nor shall
Landlord be liable in damages or otherwise for any failure to furnish, or interruption of
service of any water, gas, electricity, heated water, steam and/or chilled water, cause by
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fire, accident, riot, strike, labor disputes, acts of God, or the making of any repairs or
improvements or other causes beyond the control of Landlord.
(b) From and after the Commencement Date, Tenant shall indemnify Landlord
and hold Landlord harmless from and against any and all claims, actions, damages,
liability, cost and expense, including reasonable attorney's fees, in connection with all
losses, including personal injury and/or damage to property, arising from or out of any
act or omission of Tenant or any licensee, sub-tenant, assignee or concessionaire of
Tenant or any officer, agent or employee of Tenant or any such person in, on or about
the Premises.
(c) From and after the date of this Lease, to the extent allowed by law,
Landlord shall indemnify Tenant, its officers, directors, stockholders, beneficiaries,.
partners, representatives, agents and employees and hold them harmless from and
against any and all claims, actions, damages, liability, cost and expense, including
reasonable attorney's fees, in connection with all losses, including personal injury and/or
damage to property arising from or out of any negligent act or omission of Landlord or
any licensee or assignee of Landlord or any officer, agent or employee of Landlord or
any such person in on or about the Building in which the Premises are located and the
Premises.
ARTICLE XI
FIRE AND OTHER CASUAL TV
Section 11.01 Repair of Premises and Building
(a) If the general common elements portion of the Premises shall be
damaged by fire or other casualty of the kind insured against in standard policies of fire
insurance with extended coverage which coverage is maintained by the Association, the
Association shall cause such damage to be repaired, and the rent shall not be abated.
If the Premises shall be rendered wholly untenantable, and if the damage shall be so
great that it cannot be fit for occupancy, then Tenant shall have the option to terminate
this Lease from the date of occurrence of such damage, and the Tenant shall thereupon
surrender to the Landlord the Premises and all interest hereunder; provided that, as a
condition of such termination, any insurance proceeds paid to Tenant as a result of such
damage shall be delivered by Tenant to Landlord, who shall apply such proceeds in
accordance with the Authority Lease. In case of fire or other casualty caused by the
fault, neglect or willful act of Tenant, its guests, invitees or employees, Tenant shall
promptly make all necessary repairs to restore the premises to their condition prior to
such occurrence at Tenant's sole cost and expense and the rental provided for in this
Lease shall not abate.
(b) Subject to the provisions of Section 11.01(c), in the event of damage or
destruction of all or any part of the Premises other than its general common elements,
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by fire or other casualty Tenant shall repair and/or rebuild the same with reasonable
diligence. If insurance proceeds are payable to Landlord or Landlord's mortgagee or
first lien holder, Landlord or its mortgagee shall promptly make the proceeds available
to Tenant for such repair and restoration. In the event the insurance proceeds exceed
the cost of repair and rebuilding, such excess shall be retained by (or paid to) Tenant
and in the event the insurance proceeds are less than the cost of repair and rebuilding,
such short-fall shall be paid by Tenant.
(c) In the event of any damage or destruction by fire or other casualty of any
other part of the Building (other than the Premises), Landlord, shall with reasonable
diligence exercise all its powers as an owner to cause the Association to undertake the
repair and/or rebuilding and restoration of same in a manner and to at least a condition
equal to that existing before the damage or destruction.
(d) Each party agrees to commence any required restoration within
ninety (90) days after the date of the damage or destruction (subject to settlement with
its insurance carrier, which it shall diligently pursue), and diligently pursue the work to
completion.
ARTICLE XII
EMINENT DOMAIN
Section 12.01 Condemnation
In the event that the Premises or any part thereof sufficient to render it unsuitable
for Tenant's use and occupancy, as determined by Tenant in its reasonable discretion,
shall be taken or damaged by reason of any exercise of the power of eminent domain,
whether by a condemnation proceeding or otherwise, or in the event the Premises or
part thereof sufficient to render it unsuitable for Tenant's use and occupancy, as
determined by Tenant in its reasonable discretion, shall be transferred in avoidance of
an exercise of the power of eminent domain, this Lease shall terminate as of the date
title is vested in the condemning authority or the date of physical occupancy by the
condemning authority or its agents, whichever first occurs, and both parties shall
thereupon be released from any liability thereafter accruing hereunder except as
provided herein; but all rentals and other charges then accrued shall immediately be
due and payable by Tenant. Landlord agrees immediately after receiving notice of any
proposed taking to give to Tenant notice in writing thereof. If the taking is of a part of the
Premises which does not render the remainder unsuitable, as determined by Tenant in
its reasonable discretion, then from the time of taking of physical possession by the
condemnor or proposed condemnor, the then rent payable hereunder shall abate in the
ratio that the area of the Premises taken bears to the area of the Premises before such
taking.
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Section 12.02 Damages
If the Premises or Building are so taken, the award made as compensation for such
taking shall first be used to pay Landlord's Leased Property Purchase Option Price
under the Authority Lease the. If any of the award made as compensation remains,
that amount shall be awarded to Tenant, and Landlord shall promptly pay that amount
over to Tenant.
Section 12.03 Temporary Taking
In the event of a temporary taking of the Premises, the entire award made as
compensation for said temporary taking shall be paid over to Tenant.
ARTICLE XIII
ASSIGNMENT, SUBLETTING AND RIGHTS TO LEASE OR ACQUIRE
ASPENFILM PREMISES: ASPEN FILM'S RIGHT TO LEASE OR ACQUIRE
PREMISES OR MEMBERSHIP INTERESTS IN TENANT
.
Section 13.01 Assignment and Subletting by Tenant
(a) Tenant will at all times have the right to sublet space within the Premises
with Landlord's consent, which shall not be unreasonably withheld or delayed, and with
the consent of Financial Security Assurance Inc., in its capacity as COP insurer (the
"COP Insurer") which shall not be unreasonably withheld or delayed. Tenant shall
provide to Landlord a copy of all subleases and amendments thereto. If Landlord or the
COP Insurer does not approve or deny, in writing, Tenant's request for approval of a
sublease within ten (10) days of Tenant's request therefore, said approval shall be
deemed to have been given.
(b) Tenant will at all times have the right to assign this Lease to another party
with Landlord's consent which shall not be unreasonably withheld or denied, and with
the consent of the COP Insurer which shall not be unreasonably withheld or delayed.
Tenant shall provide to Landlord a copy of all assignment agreements and amendments
thereto. If Landlord or the COP Insurer does not approve or deny, in writing, Tenant's
request for approval of an assignment within ten (10) days of Tenant's request
therefore, said approval shall be deemed to have been given.
(i) For the purpose of this provision, any transfer of a majority or
controlling interest in Tenant (whether in one or more related or unrelated
transactions), whether by transfer of stock, consolidation, merger, transfer of a
partnership interest or transfer of any or all of Tenant's assets or otherwise, or by
operation of law, shall be deemed an assignment of this lease. Any assignment
or sublet in contravention of this provision shall be void and shall be a default
hereunder. Notwithstanding any permitted assignment, Tenant shall at all times
remain directly, primarily and fully responsible and liable for the payment of the
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rent herein specified and for compliance with all of its other obligations under the
terms, provisions and covenants of this lease.
(c) The following transfers are exempt from this provision: (a) as a result of
death; (b) as a result of bankruptcy' (c) a transfer in violation of the operating agreement
of Tenant which results in the transferee having no voting interest in the Tenant; (d)
transfers by gift or without consideration; (e) transfers to family trusts or family limited
liability companies where the members in the transferee are family members of the
members in the transferor; (e) transfers for estate planning purposes: (f) transfers to
entities in which the members of the transferor have the same ratio of ownership
interest in the transferee as they had in the transferor.
Section 13.02 Right to Acquire AspenFilm Lease
(a) First Rioht to Neootiate Assionment of Isis Group Lease. Landlord agrees to include
the following provisions in its lease with Isis Group for Commercial Unit 1 (the Isis
Group Premises"):
"If at any time during the Term of this lease, Tenant determines that it wishes to
assign its interest in this lease for Commercial Unit 1 and the AH Units, then
Tenant shall, before listing this Lease for such assignment or offering it for
assignment or accepting an offer from a third party for such assignment, first
offer to AspenFilm or its successor (collectively, "Commercial Unit 2 Owner")
the opportunity to negotiate the terms for and obtain an assignment thereof.
Tenant shall provide written notice to Commercial Unit 2 Owner of its intent to
assign this Lease and shall propose a price and the terms for such an
assignment (the "Initial Offer"). The parties shall have a period of Thirty (30)
days to negotiate the terms of the assignment and in the event they are unable to
agree upon said terms, then Tenant shall be free to assign it to a third party,
provided that the price for said assignment shall be not less than ninety (90%)
percent of the price offered in the Initial Offer and the material terms of said
assignment shall be no less favorable to Tenant than those which were
contained in the Initial Offer. The City shall have the right to acquire an
assignment of this lease if the Commercial Unit 2 Owner does not exercise its
rights hereunder to acquire this lease. All notices required hereby to be given to
the Commercial Unit 2 Owner shall be given to the City at the same time as they
are given to the Commercial Unit 2 Owner. If City desires to negotiate for the
assignment of this lease, City shall engage in the negotiations with Tenant during
the same thirty day period as is provided to the Commercial Unit 2 Owner and all
provisions hereof shall apply equally to the Commercial Unit 2 Owner and the
City, except that the Commercial Unit 2 Owner shall have the first right to acquire
this Lease and the City shall have the right to acquire this lease only if Tenant
and Commercial Unit 2 Owner are unable to successfully negotiate the terms of
an assignment of this Lease."
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"Any assignment which is in violation of these provisions shall be voidable in an
action brought by the Commercial Unit 2 Owner or by the City to enforce the
terms of this provision. "
"If, at any time subsequent to an Initial Offer and the failure of Tenant and the
Commercial Unit 2 Owner and the failure of the City and Tenant to agree upon
the terms of an assignment, Tenant desires to assign this Lease for a price which
is less than ninety (90%) percent of the price contained in the Initial Offer and/or
which contains material terms less favorable to Tenant, then Tenant shall provide
another offer to the Commercial Unit 2 Owner and the City (the "Subsequent
Offer") and the same provisions hereof which pertain to an Initial Offer shall apply
to all Subsequent Offers. This sequence of offers and negotiations shall continue
for as many times as necessary to afford the Commercial Unit 2 Owner and the
City the rights to negotiate for and obtain an assignment of this lease as are
provided for herein."
(b) First RiQht to NeQotiate Acquisition of Isis Group Premises. Landlord agrees to
include the following provisions in its lease with Isis Group and in any deed conveying
the fee simple interest in all or a portion of the Isis Group Premises to any for-profit
entity, and any sale of the Isis Group Premises by Isis Group shall be subject to the
following provisions:
"If at any time during or after the Term of this lease, any majority or controlling
member of Tenant or the Premises Owner (as the context may require), or any
member of any entity which is a member of Tenant (in either case, the "Selling
Member"; and for the purpose of this Section, "member" shall also mean partner
or shareholder or trustee or beneficiary, if the relevant entity is a partnership or
corporation or trust, as the context may require; and "Tenant" shall mean the
tenant under this Lease and any interest in any constituent entity other than
family trusts), determines that it wishes to assign its interest (an "Interest") in
Tenant or Premises Owner, then such member (the "Selling Member") shall,
before offering it for assignment or accepting an offer from a third party for such
assignment, first offer to the Commercial Unit 2 Owner the opportunity to
negotiate the terms for and obtain an assignment thereof. The Selling Member
shall provide written notice to Commercial Unit 2 Owner of its intent to assign its
Interest and shall propose a price and the terms for such an assignment (the
"Initial Offer", which shall contain a copy of the entity's partnership agreement,
operating agreement, shareholders' agreement, tenancy-in-common agreement
or other relevant governing document, together with its current and three-years'
prior balance sheets, income statements, cash flow statements, tax return and
the Selling Member's K-1. The parties shall have a period of Thirty (30) days to
negotiate the terms of the assignment and in the event they are unable to agree
upon said terms, then the Selling Member shall be free to assign the Interest to a
third party, provided that the price for said assignment shall be not less than
ninety (90%) percent of the price offered in the Initial Offer and the material terms
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of said assignment shall be no less favorable to the Selling Member than those
which were contained in the Initial Offer. The City shall have the right to acquire
an assignment of the Interest if the Commercial Unit 2 Owner does not exercise
its rights hereunder to acquire the Interest. All notices required hereby to be
given to the Commercial Unit 2 Owner shall be given to the City at the same time
as they are given to the Commercial Unit 2 Owner. If City desires to negotiate for
the assignment of the Interest lease, City shall engage in the negotiations with
the Selling Member during the same thirty day period as is provided to the
Commercial Unit 2 Owner and all provisions hereof shall apply equally to the
Commercial Unit 2 Owner and the City, except that the Commercial Unit 2 Owner
shall have the first right to acquire the Interest and the City shall have the right to
acquire the Interest only if Tenant and Commercial Unit 2 Owner are unable to
successfully negotiate the terms of an assignment of the Interest. The following
transfers are exempt from this provision (but in each event, Landlord and
FilmFest must be given fifteen (15)days prior written notice of any such transfer
and the agreement therefore): (a) by devise or descent; (b) by order of a
bankruptcy court in connection with the adjudication of bankruptcy of a Selling
Member (c) a transfer in violation of the operating agreement of Tenant which
results in the transferee having no voting interest in the Tenant; (d) transfers by
gift or without consideration; (e) transfers to family trusts or family limited liability
companies where all of the members in the transferee are family members of the
members in the transferor; (e) transfers to entities in which the members of the
transferor have the same ratio of ownership interest in the transferee as they had
in the transferor; and (f) transfers as a result of dilution of the interest of a
Member as provided for in the Operating Agreement or relevant shareholder or
other agreement among the Members of the relevant entity. "
"Any assignment of an Interest which is in violation of these provisions shall be
voidable in an action brought by the Commercial Unit 2 Owner or by the City to
enforce the terms of this provision."
"If, at any time subsequent to an Initial Offer and the failure of the Selling
Member and the Commercial Unit 2 Owner and the failure of the City and the
Selling Member to agree upon the terms of an assignment of an Interest, the
Selling Member desires to assign such Interest for a price which is less than
ninety (90%) percent of the price contained in the Initial Offer and/or which
contains material terms less favorable to the Selling Member, then the Selling
Member shall provide another offer to the Commercial Unit 2 Owner and the City
(the "Subsequent Offer") and the same provisions hereof which pertain to an
Initial Offer shall apply to all Subsequent Offers. This sequence of offers and
negotiations shall continue for as many times as necessary to afford the
Commercial Unit 2 Owner and the City the rights to negotiate for and obtain an
assignment of the Interest as are provided for herein."
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"Tenant shall, within thirty (30) days of request therefore, but not more frequently
than once per calendar year during the Term, deliver to the City and to the
Commercial Unit 2 Owner a statement, certified by the manager of Tenant,
setting forth the names, telephone numbers and addresses of each member of
Tenant (including its constituent entities) and their respective ownership interests
in Tenant and its constituent entities as of January 1 of such year. Tenant's
failure to deliver such statement to the City and Commercial Unit 2 Owner shall
be a default hereunder. Attached hereto as Exhibit D is such statement,
certified as true by Courtney Lord, as of the date hereof."
"For the purpose of this Section, "controlling or majority" shall mean having the
voting power to appoint or remove the manager of the Tenant, or to the power to
amend the operating agreement of the Tenant, , including without limitation by
virtue of proxies or voting trusts or similar devices
Section 13.03 Isis Group's Right to Acquire Tenant's Lease
13.03.01 If at any time during the Term of this lease, AspenFilm determines that it
wishes to assign its interest in this lease for Commercial Unit 2 to an entity which is not
a non-profit entity, then AspenFilm shall, before listing the lease for such assignment or
offering it for assignment or accepting an offer from a third party for such assignment,
first offer to the tenant under the lease with the City for Commercial Unit 1 or if
Commercial Unit 1 has been condominiumized and sold, then said offer shall be made
to the owner of Commercial Unit 1 (collectively, the "Commercial Unit 1 Tenant or
Owner"), the opportunity to negotiate the terms for and obtain an assignment thereof.
AspenFilm shall provide written notice to the Commercial Unit 1 Tenant or Owner of its
intent to assign this lease and shall propose a price and the terms for such an
assignment (the "Initial Offer"). The parties shall have a period of Thirty (30) days to
negotiate the terms of the assignment and in the event they are unable to agree upon
said terms, then AspenFilm shall be free to assign it to a third party, provided that the
price for said assignment shall be not less than ninety (90) percent of the price offered
in the Initial Offer and the material terms of said assignment shall be no less favorable
to AspenFilm than those which were contained in the Initial Offer. The City shall have
the right to acquire an assignment of this lease if the Commercial Unit 1 Tenant or
Owner does not exercise its rights hereunder to acquire this lease. All notices required
hereby to be given to the Commercial Unit 1 Tenant or Owner shall be given to the City
at the same time as they are given to the Commercial Unit 1 Tenant or Owner. If City
desires to negotiate for the assignment of this lease, City shall engage in the
negotiations with AspenFilm during the same thirty day period as is provided to the
Commercial Unit 1 Tenant or Owner and all provisions hereof shall apply equally to the
Commercial Unit 1 Tenant or Owner and the City, except that the Commercial Unit 1
Tenant or Owner shall have the first, right to acquire this lease and the City shall have
the right to acquire this lease only if AspenFilm and Commercial Unit 1 Tenant or Owner
are unable to successfully negotiate the terms of an assignment of this lease.
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13.03.02 Any assignment which is in violation of these provisions shall be voidable in
an action brought by the Commercial Unit 1 Tenant or Owner or by the City to enforce
the terms of this provision.
(i) If, at any time subsequent to an Initial Offer and the failure of AspenFilm
and the Commercial Unit 1 Tenant or Owner and the failure of the City and
AspenFilm to agree upon the terms of an assignment, AspenFilm desires to
assign this lease for a price which is less than ninety (90) percent of the price
contained in the Initial Offer and/or which contains material terms less favorable
to AspenFilm, then AspenFilm shall provide another offer to the Commercial Unit
1 Tenant or Owner and the City (the "Subsequent Offer") and the same
provisions hereof which pertain to an Initial Offer shall apply to all Subsequent
Offers. This sequence of offers and negotiations shall continue for as many times
as necessary to afford the Commercial Unit 1 Tenant or Owner and the City the
rights to negotiate for and obtain an assignment of this lease as are provided for
herein. "
13.04 Isis Group's Riaht to Neaotiate Acauisition of the Property. No sale of the fee
simple interest in the Property (Commercial Unit 2) shall occur in violation of the
following provisions and any sale of the Property shall be subject to the following
provisions:
13.04.01 No sale of the fee simple interest in the Property (the AspenFilm Premises)
to any for-profit entity shall occur in violation of the following provisions and any sale of
the Property shall be subject to the following provisions: If at any time, the owner of the
Property (the "Aspen Film Premises Owner") determines that it wishes to sell its interest
in all or a portion of the Property to a for-profit entity, the AspenFilm Premises Owner
shall, before listing the Property for sale or offering it for sale or accepting an offer for its
sale from a third party, whether or not said offer is solicited by the AspenFilm Premises
Owner, first offer to the tenant under the lease with the City for Commercial Unit 1 or if
Commercial Unit 1 has been condominiumized and sold, then said offer shall be made
to the owner of Commercial Unit 1 (collectively, the "Commercial Unit 1 Tenant or
Owner"), the opportunity to negotiate the terms for and acquire the Property. The
AspenFilm Premises Owner shall provide written notice to the Commercial Unit 1
Tenant or Owner of its intent to sell the Property and shall propose a price and the
terms for such sale (the "Initial Offer"). The parties shall have a period of Thirty (30)
days from the receipt of said notice by the Commercial Unit 1 Tenant or Owner to
negotiate the terms of the sale and in the event they are unable to agree upon said
terms, then the AspenFilm Premises Owner shall be free to sell the Property to a third
party, provided that the price for said sale shall be for a price which is no less than
ninety (90) percent of the price offered in the Initial Offer and the material terms of said
sale shall be no less favorable to the AspenFilm Premises Owner than those which
were contained in the Initial Offer. Any sale which is in violation of these provisions
shall be voidable in an action brought by the Commercial Unit 1 Tenant or Owner to
enforce the terms of this provision. The City shall have the right to acquire the
27
AspenFilm premises if the Commercial Unit 1 Tenant or Owner does not exercise its
rights hereunder to acquire the AspenFilm Premises. All notices required hereby to be
given to the Commercial Unit 1 Tenant or Owner shall be given to the City at the same
time as they are given to the Commercial Unit 1 Tenant or Owner. If City desires to
negotiate for the purchase of the AspenFilm Premises, City shall engage in the
negotiations with AspenFilm during the same thirty day period as is provided to the
Commercial Unit 1 Tenant or Owner and all provisions hereof shall apply equally to the
Commercial Unit 1 Tenant or Owner and the City, except that the Commercial Unit 1
Tenant or Owner shall have the first right to acquire the AspenFilm Premises and the
City shall have the right to acquire the AspenFilm Premises only if AspenFilm and
Commercial Unit 1 Tenant or Owner are unable to successfully negotiate the terms of
an acquisition of the AspenFilm Premises.
(i) If, at any time subsequent to an Initial Offer and the failure of the
AspenFilm Premises Owner and the Commercial Unit 1 Tenant or Owner to
agree upon the terms of said sale, the AspenFilm Premises Owner desires to sell
the Property for a price which is less than ninety (90) percent of the price
contained in the Initial Offer and/or which contains material terms less favorable
to the AspenFilm Premises Owner, then the AspenFilm Premises Owner shall
provide another offer to the Commercial Unit 1 Tenant or Owner (the
"Subsequent Offer") and the same provisions hereof which pertain to an Initial
Offer shall apply to all Subsequent Offers. This sequence of offers and
negotiations shall continue for as many times as necessary to afford the
Commercial Unit 1 Tenant or Owner the rights to negotiate the terms for and
acquire the Property as are provided for herein. ..
ARTICLE XIV
ESTOPPEL CERTIFICATE, ATTORNMENT AND SUBORDINATION
Section 14.01 Estoppel Certificates
From time to time, but not more frequently than twice during any Lease Year, Tenant
shall, within thirty (30) days after written request from Landlord, execute and deliver a
commercially reasonable estoppel certificate. Landlord shall also execute and deliver
to Tenant similar estoppel certificates within thirty (30) days after written request
therefor, but not more frequently than twice during any Lease Year.
Section 14.02 Subordination,
Attornment
Non-Disturbance
and
(a) Subject to events of termination of this Lease, such as, without limitation,
non-appropriation, within thirty (30) days after the execution of this Lease, Landlord
28
shall use its best efforts to deliver to Tenant a mutually satisfactory Non-Disturbance
Agreement from any mortgagee or trustee of the Premises.
(b) From time to time during the Term, Tenant shall, within thirty (30) days
after written request from Landlord, enter into a mutually satisfactory subordination,
non-disturbance and attornment agreement to subordinate this Lease to the lien of any
mortgage or other security interest now or hereafter placed on Landlord's interest in the
Premises and the Building. Such Agreement shall contain the terms and provisions
described in Section 14.02(c) and shall be subject to events of termination of this Lease,
such as, without limitation, non-appropriation).
(c) Each such agreement shall expressly provide that (i) this Lease shall
remain in full. force and effect during the Term, and that Tenant's rights hereunder shall
not be disturbed, notwithstanding any default by Landlord in payment of the
indebtedness and other amounts secured by such mortgage, notwithstanding any
default by Landlord in performance of Landlord's other obligations pursuant to such
mortgage, and notwithstanding any foreclosure proceedings with respect thereto,
provided that Tenant makes any payments that Landlord fails to make after receipt of
notice of such non-payment; (ii) that all fire insurance proceeds and condemnation
awards shall be applied in accordance with the terms of this Lease, and (iii) that Tenant
shall be given notice of any default by Landlord hereunder, and Tenant shall have the
right to cure such defaults on Landlord's behalf and to assume Landlord's obligations
under this Lease ; and (iv) subject to events of termination of this Lease, such as,
without limitation, non-appropriation. Each such agreement will include Tenant's
agreement to attorn to any purchaser of the Premises on any foreclosure of such
mortgage.
(d) Landlord shall enter into with any sub-tenant of Tenant, upon Tenant's
request, a reasonable non-disturbance and attornment agreement providing that in the
event that Tenant defaults under the Lease (after notice and Tenant's failure to cure)
and Tenant forfeits, to the City, Tenant's rights under the Lease, then Landlord shall
recognize such sub-tenant as a direct obligor to the Landlord arid the Landlord shall not
disturb such sub-tenant's rights under its sub-lease for so long as such sub-tenant
timely performs all of its obligations thereunder, but always subject to events of
termination of this lease, such as, without limitation, non-appropriation.
ARTICLE XV
TENANT'S RIGHT TO MORTGAGE
Section 15.01 Tenant's Right to Encumber
Tenant shall at all times have the right to grant a security interest in or otherwise
encumber its interest in this Lease; provided, however that Landlord grants its consent
in writing, which consent shall not be unreasonably withheld, and provided further that
29
the COP Insurer grants its consent in writing, which shall not be unreasonably withheld
or delayed. Tenant shall provide to Landlord all documents relating to a proposed
encumbrance or security interest in this Lease upon requesting Landlord's consent.
ARTICLE XVI
QUIET ENJOYMENT
Section 16.01 Landlord's Covenant
Landlord covenants and agrees that during the Term, Tenant shall at all times
throughout the Term have the peaceable and quiet enjoyment and possession of the
Premises without hindrance or interruption, subject to the terms of this Lease and of the
Authority Lease, the Declaration and other matters of record. Landlord shall perform all
of its obligations under the Authority Lease and shall protect Tenant's rights under this
Lease from disturbance by reason of any default by Landlord under the Authority Lease.
Section 16.02 Landlord's Mortgages
To the fullest extent allowed by law and subject to the Authority Lease (including
provisions relating to the Landlord's non-appropriation rights), Landlord covenants and
agrees to make all payments when and as due and to perform and comply with all
covenants, conditions, obligations and agreements when and as required by the terms
of all agreements or obligations which could or may have an affect on this Lease and to
which Landlord is a party or by which it is bound, and on request of Tenant to furnish
proof of such payment and performance to Tenant within thirty (30) days after request
therefor.
ARTICLE XVII
DEFAULT, ABANDONMENT, SURRENDER OF PREMISES
Section 17.01 Default by Tenant
If Tenant shall fail to perform or observe any of Tenant's covenants and if such failure
shall continue after notice, in the case of any failure to pay when due any Rent or other
monetary amounts due hereunder, for more than ten (10) days after Tenant's receipt of
written notice of such failure, or in any other case for more than thirty (30) days after
Tenant's receipt of written notice of such failure or such longer time as may be
reasonably required to cure because of the nature of the default (provided Tenant must
have undertaken procedures to cure the default within such thirty (30) day period and
thereafter diligently pursue such effort to completion); then, and in any of said events
("Event of Default") Landlord lawfully may, immediately or at any time thereafter,
pursuant to summary dispossession or other legal proceedings, enter into and upon the
Premises or any part thereof, repossess the same as of its former estate, and expel
Tenant, and those claiming an interest by, through or under Tenant, and remove any
30
personalty left by Tenant (or anyone claiming by, through or under Tenant) without
being deemed guilty of any manner of trespass, and without prejudice to any other
'remedies which Landlord may have at law, in equity or under this Lease, including,
without limitation, any remedies which might otherwise be used forarrearages of rent or
other breach hereunder (but excluding any right to accelerate rent), or upon written
notice to Tenant, terminate this Lease. If Landlord elects to terminate this Lease due to
an Event of Default as aforesaid, then Tenant shall remain liable for all rental and other
obligations accruing up to the date of termination, but Tenant shall have no further
liability after the date of termination under this Lease. If Landlord elects to repossess
the Premises due to an Event of Default as aforesaid, then Tenant shall (a) remain
liable for all rental and other obligations accruing up to the date of such repossession,
and (b) be liable to Landlord for all reasonable costs actually incurred in connection with
the repossession and re-Ietting of the Premises (including, without limitation, reasonable
attorneys' and brokerage fees, but not including any costs of renovating or retrofitting
the Premises), and (iii) remain liable for the payment of all Rent obligations payable
hereunder for the balance of the unexpired Term of this Lease in effect as of the date of
repossession by Landlord. In the event the Premises are re-Iet by Landlord, Tenant
shall be entitled to a credit against its rental obligations hereunder in the amount of
rents received by Landlord from any such re-Ietting of the Premises less any reasonable
costs incurred by Landlord (not previously reimbursed by Tenant) in connection with the
repossession and re-Ietting of the Premises (including, without limitation, reasonable
attorneys' fees and brokerage commissions, but not including any cost of renovating or
retrofitting the Premises). In the event of termination of Tenant's right of possession of
the Premises by Landlord as aforesaid, Landlord shall use reasonable efforts to re-Iet
the Premises at a fair market rental or as near thereto as is possible under the
circumstances then existing so as to minimize the damages suffered by Landlord and
payable by Tenant hereunder.
Section 17.02
Abandonment
(a) Tenant shall not vacate or abandon the Premises at any time during the
Term of this Sublease. Abandonment shall be deemed to have occurred if Tenant is
absent from the Premises for more than ninety (90) days without having made payment
of Rent as set forth in Article IV, above. If Tenant should violate this prohibition or be
dispossessed of the Premises involuntarily, by operation of law or otherwise, any
personal property belonging to Tenant left on the Premises shall be deemed to be
abandoned, at the Landlord's option, or Landlord may store such property in Tenant's
name and at Tenant's expense without notice to Tenant.
(b) Upon abandonment of the Premises, Landlord, at its election, may reenter
and relet Premises as set forth at Section 17.01, above. The rights and remedies of
Landlord under this Article are in addition to and not exclusive of any other right or
remedy of Landlord herein given or which may be permitted by law.
Section 17.03
Surrender of Premises
31
Except for trade fixtures, all alterations, additions, improvements, partitions,
flooring, carpeting or fixtures, including, but not limited to light fixtures, electrical fixtures,
and plumbing fixtures, which may be made or installed by either of the parties hereto or
any subtenant of Tenant upon the Premises and which in any manner attached to the
floors, walls, windows, or ceilings are to be the property at the termination of this Lease
due to Default by Tenant, unless Landlord shall elect otherwise. Landlord shall make
such election by giving notice. in writing to Tenant prior to the expiration or other
termination of this Lease, or any renewal or extension thereof. In the event Landlord
shall so elect, such alterations, installations, additions or improvements made by Tenant
or any subtenant of Tenant upon the Premises as the Landlord shall so elect shall be
removed by Tenant, or any subtenant of Tenant, and Tenant, or any subtenant of
Tenant, shall restore the Leased Premises to its original condition at the
commencement hereof, normal wear and tear excepted, at its own costs and expense
prior to the expiration or termination of this Lease due to a Tenant Default; or if Tenant
fails to do so at Tenant's expense.
Section 17.04
Tenant's Remedies for Nonappropriation or Default
(a) Non-appropriation or Event of Default under Authority Lease or Indenture.
If Landlord fails to appropriate funds to pay the COP amounts due or coming due in the
fiscal year next occurring during the Initial Term and successive renewal terms and any
failure to pay said funds if appropriated, to the payments due on the COP; or, an Event
of Default occurs under the Authority Lease or Indenture, Tenant's remedy shall be
limited to its right to exercise its purchase option, as provided for in this Lease.
(b) Other Default. In the event Landlord defaults in any of its obligations under
this Lease, other than as referred to in subclause (a) above, Tenant shall not have a
right to damages, however Tenant shall have a right to seek specific performance of the
act or obligation to be performed by Landlord, or may seek other remedies (not
including damages) which may be available at law or equity, includirig, without
limitation, injunctive relief.
Section 17.05 Interest on Late Payments
All amounts required to be paid by either party to the other pursuant to this Lease shall
bear interest from the due date until the date of payment at the prime rate of Wells
Fargo Bank, NA, as published by said bank from time to time, or if said bank is no
longer publishing said rate, then the rate shown in the Wall Street Journal as the prime
rate.
Section 17.06 Attorneys' Fees
In the event of any default by either party in making any payment or performing or
complying with any covenant, condition, obligation or agreement when and as required
by the terms of this Lease, continuing beyond any period provided in this Lease for the
32
curing of the default, the party not in default shall be entitled to recover reasonable
attorneys' fees incurred by reason of the default and in enforcing the terms of this
Lease, including any fees incurred in bankruptcy proceedings and/or arbitrations.
Section 17.07 Remedies Cumulative
The rights and remedies of Landlord and Tenant hereunder shall be cumulative, and no
one of them shall be construed as exclusive of any other or of any rights and remedies
otherwise available at law or in equity. The exercise of any rights or remedies by
Landlord or Tenant shall not impair its standing to exercise any other rights or remedies.
Section 17.08 No Waiver of Default
No acquiescence by either party in any default by the other shall be construed as a
waiver of the default, and no waiver of any default shall be construed as a waiver of any
other or subsequent default.
33
ARTICLE XVIII
Intentionally Omitted
ARTICLE XIX
MISCELLANEOUS
Section 19.01 AH Units
In accordance with the Isis Group Lease, during the Term of this Lease, Tenant shall
have the first right to select a tenant who will lease an AH Unit as it becomes available
from time to time, subject to the Aspen/Pitkin County Housing Authority (UAPCHA")
standards, for its employees and for Theater employees. The City will have the second
right to select a tenant who will lease an AH Unit, subject to APCHA standards, for its
employees. Isis Group shall have the third right to select a tenant who will lease an AH
Unit subject to APCHA standards, for its employees or the employees of its sub-tenants
or de'signees. Tenant 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 that, after availing itself of judicial remedies (which Isis
Group shall pursue in the event that an AH Unit occupant holds over and refuses to
vacate such AH Unit), Isis Group is unable to eject such occupant from an AH Unit. The
City shall be responsible for amending the current deed restrictions for the AH Unit to
provide for this provision. At all times during the Term of this Lease, Isis Group shall be
entitled to all rents and other proceeds from the AH Units.
Section 19.02 Memorandum of Lease
The parties are concurrently herewith executing a Memorandum of this Lease, for public
record. As soon as practical after the Commencement Date, the parties shall execute
an amendment to the Memorandum of Lease, setting forth the Commencement Date,
the expiration date of the Initial Term, and the dates of the Renewal Terms, for public
record.
Section 19.03 Notices
Every notice, demand, request, or other instrument required to be given pursuant to this
Lease shall be in writing and sent by United States certified mail, return receipt
requested, postage prepaid, or by a recognized overnight delivery service, and shall be
deemed effective two days after mailing or one day after deposit with the overnight
delivery service, if properly addressed as follows:
If to Landlord:
34
City of Aspen,
Attention: City Manager
130 S. Galena Street, 2nd Floor
Aspen, CO 81611
(b) if to Tenant:
Aspen Filmfest
Attention: Executive Director
110 E. Hallam St.
Aspen, CO 81611
with a copy to:
Neil Karbank, Esq.
Manson & Karbank
604 W. Main St.
Aspen, CO 81611
Either party may designate an alternate or additional address by written notice given
pursuant to this section.
Section 19.04 Entire Agreement
This Lease and its exhibits, including the MOU, sets forth all the covenants,
promises, agreements, conditions and understandings between Landlord and Tenant
concerning the subject matter of this Lease. No alteration, amendment or addition to
this Lease shall be binding on Landlord or Tenant unless it is in writing and signed by
each party.
Section 19.05 Binding Effect
The provisions of this Lease shall be binding on the parties and their successors
and assigns, shall be enforceable by Landlord and its successors and assigns and by
Tenant and its permitted successors and assigns.
Section 19.06 Consents
Wherever Landlord's consent or approval shall be required pursuant to the terms
of this Lease, such consent or approval shall not be unreasonably withheld, conditioned
or delayed.
Section 19.07 Construction
(a)
Colorado.
This Lease shall be construed according to the laws of the State of
If any provision of this Lease or the application thereof to any person or
35
circumstance shall be invalid or unenforceable, the remainder of this Lease shall not be
affected thereby and each provision shall be valid and enforceable to the fullest extent
permitted by law.
(b) The captions and index in this Lease are inserted only as a matter of
convenience, and do not define, limit, or describe the scope or intent of the articles and
sections.
Section 19.08
Deed Restrictions
The parties hereto acknowledge that this Agreement is subject to certain deed
restrictions as set forth in that certain Occupancy and Use Deed Restriction, Agreement
and Covenant appended hereto as Exhibit DR-1 and incorporated herein by this
reference.
Section 19.09
Payments due from Landlord
Any and all payments due from Landlord, including without limitation, those set forth at
Sections 10.02(c), 17.05, and 17.02, shall not be an obligation of Landlord beyond the
fiscal year for which funds are appropriated for the payment therefore or to make
payments from any funds from the City of Aspen other than funds appropriated for the
payment of current expenditures.
36
IN WITNESS WHEREOF, Landlord and Tenant have signed this Lease.
LANDLORD:
THE CITY OF ASPEN,
a municipal corporation acting through
its City Council pursuant to its Charter
and the laws of State of Colorado
By:
Steve Barwick, City Manager
TENANT:
Independent Films, Inc.
a Colorado non-profit Corporation
By:
Its:
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37
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OCCUPANCY EED RESTRICTION,
AGREEMENT, AND COVENANT
THIS OCCUPANCY AND USE DEED RESTRICTION, AGREEMENT, AND
COVENANT (the "Agreement") is made and imposed this ~ day of
2007, by the CITY OF ASPEN PUBLIC FACILITIES AUTHORITY, a Colorado nonprofit
Corporation ("Owner"), for the benefit of and enforceable by the CITY OF ASPEN,
COLORADO, (the "City") a home rule city and political subdivision duly organized and
existing under the constitution and laws of the State of Colorado.
WITNESSETH:
WHEREAS, the City has been duly organized and is validly existing as a home rule city
under the Colorado Constitution and the home rule charter of the City; and
WHEREAS, the Owner is a Colorado nonprofit corporation that is duly organized,
validly existing and in good standing under the laws of the State of Colorado, and is duly
qualified to do business in the State of Colorado; and
WHEREAS, the Owner has, on the date hereof purchased the following condominium
units:
Commercial Unit A, Isis Theater Condominiums according to the Condominium
Map thereof, recorded on December 9, 1999, in Plat Book 52, Page I at Reception
No. 438434 in the records of the office of the Clerk and Recorder of the County of
Pitkin, Colorado, and as defined and described in the Condominium Declaration
for Isis Theater Condominiums recorded on December 9, 1999, at Reception No.
438433 in said records; and
Residential Units C & D, Isis Theater Condominiums according to the
Condominium Map thereof, recorded on December 9, 1999, in Plat Book 52, Page
1 at Reception No. 438434 in the records of the office of the Clerk and Recorder
of the County of Pitkin, Colorado, and as defined and described 'in the
Condominium Declaration for Isis Theater Condominiums recorded on December
9, 1999, at Reception No. 438433 in said records (the "AH Units"); (collectively,
Commercial Unit A and Residential Units C and D shall be referred to herein as
the "Acquired Property")
as assignee of the Isis Property Group, LLC ("Isis Group") pursuant to the Purchase Agreement
dated as of September 12, 2006, between Isis Group and CC Aspen, LLC; and
WHEREAS, the Owner is authorized, under its articles of incorporation and bylaws,
action of its board of directors and applicable law, to: (a) acquire and own the Acquired Property;
1
(b) lease to the City the Acquired Property; and (c) execute, deliver and perform its obligations
under this Agreement; and
WHEREAS, the City is authorized, pursuant to Section 1.4 of its Charter, to accept and
perform its obligations under this Agreement; and
WHEREAS, the execution, acceptance, and performance under this Agreement has been
duly authorized by the City in accordance with that certain Memorandum of Understanding
approved by the City of Aspen City Council by Resolution No. 99, Series of2006, on record with
the City of Aspen City Clerk's Office; and
WHEREAS, the Owner, pursuant to and in accordance with, the above referenced
Memorandum of Understanding, agrees to restrict the future occupancy and use of the Acquired
Property in accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, for value received as described above, the receipt and sufficiency
of which is hereby acknowledged, Owner hereby represents, covenants and agrees as follows:
1. This agreement shall constitute covenants running with the real property described
hereinabove as a burden thereon for the benefit of, and shall be specifically
enforceable by the City Council of the City. Upon the conveyance ofthe Acquired
Property from the Authority to the City, and upon any re-conveyance of the
Acquired Property from the City to any other grantee, assignee, purchaser, or
other successor in interest, unless otherwise provided for in any lease or other
agreement between the City and any of its subleases for all or a portion of the
Acquired Property, the restrictions and covenants shall continue to run with the
real property, but the beneficiary and the right to enforce this Agreement shall
remain with the City Council of the City. The right of enforcement shall be
exercised, if at all, by the City Council of the City, by any appropriate legal action
including but not limited to injunction, reversion, or eviction of non-complying
owners and/or occupants. The City Council of the City shall have the right to
amend or modify the covenants at any time in its sole and absolute discretion.
2. The name of the building which includes and incorporates the Acquired Property
shall be named the "Isis Building."
3. Notwithstanding any provision to the contrary contained in the Condominium
Declarations for Isis Theater Condominiums (recorded at Reception No. 43'8433,
et seq. in the Pitkin County Clerk and Recorders Office), no further development
shall be authorized or permitted on the Isis Building's roof (including the highest
floor of the Isis Building on which are located the AH Units and Unit B the
decking and mechanical elements, including any replacements thereof.)
Reconstruction or replacement of existing improvements and structures on the
roof are not restricted by this provision, provided they are made .in the same
locations and with the same dimensions as the improvements and structures
2
existing as of the date of recording of this deed restriction. The addition of a
bedroom that does not exceed 500 square feet to Residential Unit B (the free
market residential unit on the third floor) shall not be restricted by this provision.
4. Upon any re-condominiumization or the subleasing of portions of Commercial
Unit A within the Acquired Property to create a retail space (Commercial Unit 1),
a theater area comprising the easterly ground floor theater and the lower level
theaters (Commercial Unit 2), or the construction of an addition of approximately
576 sq. ft. in the current exterior open space in the southeastern corner of the Isis
Building (Commercial Unit 3, also referred to as the "Notch" area), the following
restrictions shall apply to the respective units or sublease areas of the Acquired
Property:
a. The tenant under any sublease from the City to, or owner of,
Commercial Unit 1 shall use commercially reasonable efforts to
sublease Commercial Unit I to one or more tenants that are
deemed "mid-level" retail uses or any retail uses which are local
businesses (as opposed to national or chain type stores). Mid-
Level retailers shall generally be defined to be those retail
merchants that meet the retail industry's middle three
classifications of merchandise categories as described below as
Moderate, Bridge and Better. The businesses named below are
included by way of example, but not limitation, and are not
intended to be the only ones permitted in each category but are
listed as examples of the type of businesses that are representative
of each category. Moderate is defined as tenants such as Gap,
Hollister, Banana Republic, Victoria's Secret, Replay, Ron
Herman, Fred Seigel, Club Monaco, American Eagle, J. Crew,
bebe Sport, Lucky Brand Jeans, Abercrombie & Fitch, Levi's, Ann
Taylor Loft. Bridge is defined as tenants such as Ann Taylor,
Anne Klein, Sigrid Olsen, Puma, Juicy Couture, Guess, Armani
AX, BCBG, Bebe, Coldwater Creek, Urban Outfitters,
Anthropologie, and J. Jill. Better is defined as tenants such as
Brooks Brothers, Lisa Klein, Stuart Weitzman, David Yurman,
RLX, RL Ralph Lauren, Rugby, Lacoste, Apple Computer, Sony
Style, Scoop, Coach, Sony Style, Apple, Talbot's, Ted Baker,
Diesel, Williams Sonoma, Pottery Barn, Tourneau, Giorgio
Armani White Label, Emporio Armani, Tommy Bahama,
Burberry, Cole Halm, Movado, Hugo Boss, John Varvatos, Eileen
Fisher, Calvin Klein, Intermix. The foregoing restriction shall be
vacated and of no further force and effect upon the acquisition
conveyance of Commercial Unit 1 by the tenant under the Sublease
recorded at Reception No. , if said property is
acquired under the provisions of section 2.05(a) of said sublease.
3
b. No restaurant uses shall be permitted in Commercial Unit 1, 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 of the City, in its sole
discretion, approves such change in use.
c. The uses for Commercial Unit 2 shall be limited to only 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.
d. The uses for Commercial Unit 3 shall be limited to the uses set
forth above for Commercial Unit 2, and, in addition, shall include a
cafe bar or similar use.
e. Other uses may be approved by the City Council of the City for
Commercial Units 2 & 3 if it determines in its sole discretion that
technological, sociological or economic changes rendering theater
use obsolete or impracticable.
5. Notwithstanding any language to the contrary contained in that certain Occupancy
Deed Restriction and Agreement for an Employee Dwelling Unit Approved
Pursuant to Ordinance No. 95-59, recorded in the Pitkin County Clerk and
Recorder's Office as Reception No. 419855, et seq., relating to the AH Units, the
owner or tenant of Commercial Unit 2 shall have the first right to select the
tenants who will lease either of the AH Units as they become available from time
to time, subject to the Aspen/Pitkin County Housing Authority Guidelines. The
City shall have the second right to select tenant to said units for its employees,
subject to the Aspen/Pitkin County Housing Authority Guidelines. The owner or
tenant of Commercial Unit 1 shall have the third right to select tenants to said
units for its employees, subject to the Aspen/Pitkin County Housing Authority
Guidelines. The owner or tenant of Commercial Unit 2 and City shall both be
given notice by the owner or tenant of Commercial Unit 1 at the time the owner or
tenant of Commercial Unit 1 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 the owner or tenant of Commercial Unit 1
within said 30 day period. The owner or tenant of Commercial Unit 1 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 either of the AH
Units that will become vacant. The rights granted above shall be subject to the
owner or tenant of Commercial Unit l's (as the landlord under the leases for the
AH Units) ability to deliver the AH Unites) in the event of difficulties which may
be encountered with the existing tenant.
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6. Upon the conveyance of either of the AH Units to any third party, such transfer
shall be subject to a conveyance by the City to the Aspen/Pitkin County Housing
Authority, of a Y:z of 1 % undivided ownership interest in each of the units,
however, such ownership shall not include any right to rents or proceeds of sale,
nor other economic interests, nor any obligation for the payment of any costs of
ownership, nor any decision making authority with respect to the use, operation,
control, etc, of the AH Units. In order to facilitate any conveyance of the AH
Units, City agrees to execute such documents and take any actions as may be
necessary to perfect the transfer of title desired by the transferor or transferee of
the AH Units, without any further consideration owing to City or Owner.
7. The owner or tenant of Commercial Units 2 & 3 shall not sell or grant any 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 of the City. In granting or
denying its consent to such naming rights, the City Council of the City shall take
into consideration the reasonable needs of the then current owner or tenant , but
shall have absolute discretion in its decision.
BREACH
8. In the event that City has reasonable cause to believe the current owner or tenant
of any unit subject to the Agreement is violating the provisions of this Agreement,
City by its authorized representative, may inspect any unit of the Acquired
Property between the hours of 8:00 a.m. and 5:00 p.m., Monday through Friday,
after providing the owner or tenant with no less than 24 hours' prior written or
oral notice.
9. City, in the event a violation is discovered, shall send a notice of violation to the
owner or tenant of the unit detailing the nature of the violation and allowing the
owner or tenant thirty (30) days to cure. Said notice shall state that the owner or
tenant may request a hearing before the City Council of the City within fifteen
(15) days to determine the merits of the allegations.
REMEDIES
10. There is hereby reserved to the parties hereto any and all remedies provided by
law for breach of this Agreement or any of its terms. In the event the parties
resort to litigation with respect to any or all provisions of this Agreement, the
prevailing party shall be entitled to recover damages and costs, including
reasonable attorney's fees.
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11. In the event the Acquired Property, or any unit within the Acquired Property, is
sold and/or conveyed without compliance herewith, such sale and/or conveyance
shall be wholly null and void and shall convey no title whatsoever upon the
purported buyer. Each and every conveyance of the Acquired Property, or any
unit within the Acquired Property, for all purposes, shall be deemed to include
and incorporate by this reference, the covenants herein contained, even without
reference herein to this Agreement.
12. In the event that the owner or tenant of a unit fails to cure any breach, City may
resort to any and all available legal action, including, but not limited to, specific
performance of this Agreement or a mandatory injunction requiring sale of the
unit by owner; or in the event of a lease, to relinquish all leasehold interests to the
City.
GENERAL PROVISIONS
13. Notices. Any notice, consent or approval which is required to be given hereunder
shall be given by mailing the same, certified mail, return receipt requested,
properly addressed and with postage fully prepaid, to any address of the party as
long as prior written notice of the change of address has been given to the other
parties to this Agreement and shall be deemed given on the third business day
after mailing as required above. Said notices, consents and approvals shall be sent
to the parties hereto at the following addresses unless otherwise notified in
writing:
To Owner:
At the mailing address ofthe unit.
To Aspen:
City Manager
130 South Galena Street
Aspen, Colorado 81611
14. Severabilitv. Whenever possible, each provision of this Agreement and any other
related document shall be interpreted in such manner as to be valid under
applicable law; but, if any provision of any of the foregoing shall be invalid or
prohibited under said applicable law, such provisions shall be ineffective to the
extent of such invalidity or prohibition without invalidating the remain.ing
provisions of such document.
15. Choice of Law. This Agreement and each and every related document is to be
governed and construed in accordance with the laws of the State of Colorado.
16. Successors. Except as otherwise provided herein, the provisions and covenants
contained herein shall inure to and be binding upon the heirs, successors and
assigns ofthe parties.
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17. Waiver. No claim of waiver, consent or acquiescence with respect to any
provision of this Agreement shall be valid against any party hereto except on the
basis of a written instrument executed by the parties to this Agreement. However,
the party for whose benefit a condition is inserted herein shall have the unilateral
right to waive such condition.
18. Further Actions. The parties to this Agreement agree to execute such further
documents and take such further actions as may be reasonably required to carry
out the provisions and intent of this Agreement or any agreement or document
relating hereto or entered into in connection herewith.
19. Modifications. The parties to this Agreement agree that any modifications of this
Agreement shall be effective only when made by writings signed by both parties
and recorded with the Clerk and Recorder of Pitkin County, Colorado.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have executed this instrument on the day
and year above first written.
CITY OF ASPEN PUBLIC FACILITIES
AUTHORITY
By:
President
STATE OF COLORADO )
) ss.
COUNTY OF PITKIN )
The foregoing instrument was acknowledged before me this _ day of
,2007, by Helen Kalin Klanderud, as President of the City of Aspen
Public Facilities Authority.
WITNESS MY HAND AND OFFICIAL SEAL.
Notary Public
My commission expires:
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ACCEPTANCE BY THE CITY OF ASPEN
The foregoing Agreement and its terms are herby adopted and declared by the City of
Aspen.
CITY OF ASPEN, COLORADO
By:
Helen Kalin Klanderud, Mayor
ATTEST:
Kathryn S. Koch, City Clerk
ST ATE OF COLORADO )
) ss.
County of Pitkin )
The foregoing instrument was acknowledged before me this _ day of
, 2007, by Helen Kalin Klanderud as Mayor of the City of Aspen,
Colorado.
WITNESS MY HAND AND OFFICIAL SEAL.
Notary Public
My commission expires:
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