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HomeMy WebLinkAboutC02-051 Development Agreement with Berry Creek Limited6 -�1 -1 x DEVELOPMENT AGREEMENT (Leasehold Improvements) BERRY CREEK 5TH THIS DEVELOPMENT AGREEMENT ( "Agreement ") is made and entered into this 12. day of K.o_�, 2002, by and between Eagle County, Colorado, a body corporate and politic organized and existing pursuant to the laws of the State of Colorado ( "C -i &) and Berry Creek Limited Liability Co. [tc, be forme,] a Colorado limited liability company, 218220 Burbank Boulevard, Suite 120, Woodland Hills, CA 91367 ( "Developer "). The aforesaid parties to this Agreement are collectively referred to herein from time to time as "Parties." RECITALS WHEREAS, County, after completion of the development review and Planned Unit Development approval, will be the owner of a parcel of real property located in Eagle County, Colorado, which parcel is legally described on Exhibit "A" attached hereto and incorporated herein by this reference ( "Pro e '); and WHEREAS, pursuant to an Intergovernmental Agreement entered into on October 25, 1999, the County and the Town of Vail ( "Town ") desire to develop the Property into a single and multi- family housing development with purchase prices that are intended to be affordable to certain income levels of residents within the local community, plus support facilities, parking, certain amenities and a day care center ( "Project "); and WHEREAS, County and Town in April, 2000 issued a Request for Proposals ( "RFP ") to potentially interested developers to develop the Project generally in accordance with the goals, objectives and specifications as outlined in the RFP; and WHEREAS, Developer was one of several developers who submitted a response to the RFP, and Developer was subsequently chosen by the County with the concurrence of the Town to negotiate in good faith for an arrangement under which Developer would be allowed to develop the Project subject to a long term land lease of the Property from or through May, 2002 until completion; and WHEREAS, the Developer entered into a Pre - Development agreement on August 1, 2000; and WHEREAS, Developer desires to enter into one or more definitive agreements with the County to allow Developer to lease the Property and to develop and sell the Project thereon for the term of the land lease; and Page 4- f WHEREAS, County is willing to enter into one or more definitive agreements to allow Developer to lease the Property and develop the Project thereon, subject to the terms and provisions of this Agreement; now therefore FOR TEN DOLLARS ($10.00) AND OTHER GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged by the Parties, and in consideration of the mutual covenants and promises herein contained, the Panes agree as follows: AGREEMENT 1. DEFINITIONS: a. Agreement: This Development Agreement, as may be amended from time to time. b. Closing: Shall mean the closing of the sale of a Unit to a Qualified Buyer pursuant to the terms of a Purchase Agreement. C. Closing Costs: Shall mean any and all reasonable and customary costs and expenses incurred by Developer in the sale of any Unit, including, without limitation, title insurance premiums, real estate transfer taxes, escrow fees, documentary fees, and pro- rations of taxes. d. Equity Share: Shall mean either the County's, the Town's or the Developer's share of the profits from the sale of the Units as more particularly described in Section 7 below. e. Gross Sale Price: Shall mean the total consideration paid by a Qualified Buyer for the purchase of a Unit pursuant to a Purchase Agreement. f. Land Lease: That certain Land Lease and Option Agreement between the Developer, as lessee, with the County, as lessor, whereunder Developer shall be allowed to develop the Project, a copy of which is attached hereto as Exhibit `B" as may be amended from time to time. g. Lender: Shall mean the holder of any loan evidencing the Project Financing. If there is more than one Loan, Lender shall refer collectively to all such holders. h. Material or Materially: Once the final Project Program, the contract with the Project Architect and the contract with the Project Contractor have been approved by the County as herein provided, Developer shall only be Page -2- CI C required to seek County's approval to any modifications thereof, if: (i) The total Project Costs to complete the Project are increased by more than two percent (2 %) or any line item in the Project Budget necessary to complete the Project is increased by more than ten percent 10% and the increase is not covered by any contingency or cost savings in any other line item; (ii) The proposed closing date set forth in the Project Schedule for the Project Financing is delayed more than a cumulative period of six (6) months, the proposed closing date for the sale of any Unit as provided in any contract for the sale of a Unit to a Qualified Buyer is delayed more than four (4) weeks, or the proposed final completion date for the construction of the entire Project as set forth in the Project Schedule is delayed by more than a cumulative period of twelve (12) months. (iii) Any change in the quality or mix of the exterior building materials or exterior design of the Units or the buildings in which the Units are located that would significantly affect their fair market value or, in the opinion of the Project Architect, would significantly change the aesthetics of the approved design. i. Net Sales Price: Shall mean the amount determined in accordance with Section 7 (c) hereof. j. Person: Shall mean any natural person, corporation, limited liability company, partnership or any other legally existing entity. k. Project: The Project shall mean and refer to the deed - restricted single and multi - family residential for -sale development located upon the Property and subject to the Land Lease, consisting of an approved number and mix of residential dwelling Units. Said Project shall also include related support infrastructure, utilities, associated facilities and amenities, parking and site for a day care center as more particularly described in the Project Plans and otherwise reasonably inferred therefrom. 1. Project Architect: Shall mean and refer to that architect(s) to be selected by Developer and approved by the County in the method described herein. m. Project Budget: The budget to be approved by the County as described herein, which shall include but are not limited to, a detailed, line -item "Sources and Uses of Cash" schedule setting forth good faith estimates of projected line -item receipts and disbursements for the development period, Page -3- cl) C, projected on a monthly basis, from execution of the Land Lease through sale of the Project, as may be amended from time to time. n. Project Contractor: The Project Contractor shall mean and refer to that general contractor(s) to be selected by Developer and approved by the County in the method described herein. o. Project, Costs: Shall mean and refer to all costs expended or incurred in order to develop, construct, finance and sell the Project, including, but not limited to, all site, infrastructure, utility, approval, design, development and construction costs sales and closing costs whether the costs are hard, soft, direct and indirect, and as set forth in the Project Budget for the approval, financing, development, construction, equipping and sale of the Project. P. Project Financing: Debt financing, whether construction or development financing or both, pursuant to the Project Proforma that, when combined with Developer's costs advanced toward the Project, is sufficient to construct and equip the Project consistent with the Project Program. q. Project Plans: The final, complete and detailed plans and specifications for the Project to be prepared by Developer, together with their consultants, clearly identifying the limits of the site, and approved by County, as may be amended from time to time. r. Project Proms: The overall plan for the Project reflecting the stage of development at the time of the applicable submission to County by Developer, inclusive of the Project Budget, Project Plans and Project Schedule, together with a schedule of the Project team and responsibility allocations, and a narrative description of the planned program for development, ownership and operation. The Project Program, to be submitted to and approved pursuant to this Agreement by County and the construction lender, as may be amended from time to time, shall be the final Project Program for purposes hereof. S. Project Schedule: The planning, development, approval, financing, construction and sale schedule for the Project to be approved by the County as described herein, as may be amended from time to time pursuant to this Agreement. t. Property: The real property to be subject to the Land Lease, as described on "Exhibit "A" attached hereto. U. Qualified Buffer: Shall mean any (i) natural person has been qualified by the Developer and approved by the Town or County as meeting the Page -4- c requirements of the Deed Restrictions, (ii) any employer who has been qualified by the Developer and approved by the Town or County who intends on renting the Unit to a natural person who meets the requirements of the Deed Restrictions, or (iii) any other Person qualified by the Town or County under their affordable housing guidelines. V. Real Estate Commission: Shall mean the real estate commission payable upon the sale of each Unit in the amount of four percent (4 %) of the Gross Sales Price of each Unit. The commission shall be payable to the Developer as an in -house commission and, if a selling broker has been a procuring cause of the sale, the commission shall be split with the selling broker. W. Release Payment: Shall mean the entire amount charged by any Lender for a release of any Unit from any deed of trust, lien or security interest securing any Project Financing, including any prorata amount of principal, any accrued interest, any lot acceleration or lot premiums, recording fees, or administrative fees. X. Reserves: Shall mean amounts that Developer reasonably deems necessary to be held in a reserve account, with a financial institution whose deposits are federally insured, necessary for paying future Project Costs that are not, or will unlikely be, advancable under the Loan, including, without limitation, reserves for warranty expenses. Y- Unfunded Project Costs: Shall mean any Project Cost that, for any reason, the Lender does not advance under any Loan, which amounts could include, but are not limited to, cost overruns, interest, developer's fees, loan commitment fees and loan expenses. Z. Upgrades: Shall mean any option, upgrade or other improvements to be made to or installed in any Unit by Developer which are not advertised, marketed or included as "standard" items included in the retail Gross Sale Prices for Units. Any and all location or other lot premiums which may be charged by Developer for individual Units shall not be considered Upgrades for the purposes of this Agreement. aa. Unit: That portion of the Property subdivided and platted for separate ownership as a residential lot, condominium unit, or townhome unit. 2. DEVELOPER'S DUTIES: Developer shall timely implement the Project Program and shall develop the Project in accordance with the terms of this Agreement. In doing so, Developer shall perform the specific duties set forth in this Agreement, together with such other duties as are reasonably inferable from those that are specifically Page -5- t enumerated and within industry standards. In carrying out its duties under this Agreement, Developer shall use diligent skill and care, and shall apply its reasonable business judgment. Developer's duties to County and Town in developing the Project shall include the following activities: a. Development Program. On or before April 1, 2002, Developer shall prepare and submit to County for County's approval a current Project Program. The Project Program shall specifically address the demand parameters for the number, mix, sl and sales levels of Units in the Project. It shall not be reasonable for County to disapprove of the Project Program if Developer has met the goals of the Pre - Development Agreement and are reasonably consistent with Developer's previous submittals in response to the RFP. Upon County's review and approval of the initial Project Program, such Project Program shall be incorporated herein and attached hereto as exhibits. The Project Program shall be further updated as needed or reasonably requested by County. Developer shall be principally responsible for implementing the Project Program and, in doing so, shall use its diligent efforts in implementing the Project Program and in managing the Project's progress to accomplish the time, cost, design and quality goals set forth in the Project Program. b. Lease. Developer and County shall enter into and agree to perform the Land Lease in the form attached hereto as Exhibit `B." The terms of the Land Lease shall be generally consistent with industry standards for such long -term land leases for similar properties to the Project but, notwithstanding any other provisions to the contrary, containing at least the following provisions: (i) County shall be allowed to post notices of non - liability of land lessor as provided by state mechanics lien statutes. The terms of the Lease provide that the Developer may freely encumber its leasehold interest in the Lease to secure the Project Financing. It is contemplated that the terms of the Project Financing will require a mortgage of the fee interest, County agrees to such financing and shall have the right to review the terms of such request and to not unreasonably withhold, delay or condition the approval of the terms of the mortgage and the execution of such mortgage. Both the Land Lease and the mortgage shall contain provisions requiring notice to the County and allowing the County the right to cure defects. (ii) Rental payments under the Land Lease shall consist of. base rent of Ten Dollars ($10.00) for the entire term, upon execution of the Land Lease. (iii) The Land Lease shall contain an option to Developer permitting Developer to purchase any Unit held for sale that may be Page -6- exercised upon (i) the completion of the improvements described in the project Program and (ii) the qualification of the buyer of the Unit for compliance with the Deed Restrictions. The purchase price shall be $10.00 per Unit. The Developer may exercise the option upon three - business days prior written notice. The closing shall occur on a date specified in the notice, but no less than three nor more than ten business days from the date of the notice. At closing, the County shall tender to the Developer a special warranty deed conveying the unit free and clear of all liens and encumbrances, other than the Project Financing, and a partial release of the Unit from the Land Lease, releasing the Unit from the Land Lease. c. Deed Restrictions. The Deed Restriction shall be proposed by Developer to the County and Town for approval and shall restrict the title on all Units to be sold. When completed, the Deed Restrictions shall be recorded against each Unit at the time of sale to a Qualified Buyer and shall be binding upon the title to same. The terms of the Deed Restriction shall be consistent with the Project Program and the Project Budget, and shall include restrictions, or a methodology for determining such restrictions, on the annual appreciation and qualified occupants of the agreed restricted dwelling units, and restrictions, or a methodology for determining such restrictions. The administrators and beneficiaries of the Deed Restriction shall be County and Town. d. Project Contracts. In accordance with the Project Schedule, submit to County in both hard and electronic format for timely review and approval (exclusive of the fee structure thereof), proposed contracts with the Project Architect and the Project Contractor for consistency with the Project Program. Following approval of said contracts; submit for County review and approval any and all Material amendments, modifications or change orders regarding such contracts. County shall review and approve or comment on any of the same within five (5) business days. Notwithstanding the foregoing, even if a change order is not Material, Developer use reasonable efforts to apprize the County of the same, and shall use commercially reasonable efforts to address any concerns of County. e. Contract Quotes. Retain, using the following selection process for (i) any contract relating to the initial construction of the Project in excess of $125,000.00, or (ii) for any contract relating to the ongoing operations of the project in excess of $50,000.00 per annum, or (iii) any contract (excluding those contracts described in Section 5 hereof) entered into by Developer with an affiliate entity (collectively "Major Contracts "), such other sub - contractors and other service (excluding professional service contract such as architects, attorneys, accountants, appraisers, surveyors and civil engineers), material and/or labor Page -7- providers deemed necessary , and advisable by Developer, consistent with the Project Budget, to implement the Project, including without limitation, the planning, development, construction, management, holding, operation, and leasing of the Project consistent with the Project Program: (i) Developer shall, if possible, secure a minimum of three (3) responsible quotes for each Major Contract; (ii) Provide an analysis of the competing quotes using sound business principles consistent with industry practice; and (iii) Select the preferred bidder, taking into account the best interests of the Project Program. Such recommended. bidder shall be selected by Developer following consultation with the County manager or staff as may be requested by County from time to time during the selection process. Developer shall provide copies of such Major Contracts. Obtain reasonable and appropriate cost guarantees and protection, in a form acceptable to County, against non - performance of the Major Contracts, at least to the extent required by the Project Financing. f. Governmental Approvals. Secure all necessary governmental approvals and permits for zoning, subdivision as appropriate, design, construction, ownership and sale of the Project from County and otherwise as required in the premises and in accordance with the Project Program and comply with all such public approval requirements. In this regard, Developer shall negotiate with required Federal, State, and County entities, with private and public utility providers and others as required for the aforementioned Project approvals and permits, together with the provision of police, fire, utility and other necessary services to the Project, consistent with the Project Program. In this regard, Developer welcomes public meetings and public input, and agrees to attend and participate in such meetings as are reasonably requested by County or otherwise required by the local public approval process. g. Project Financing. Pursue and secure Project Financing consistent with the Project Program, as reasonably determined by Developer in accordance with Section 2a. above. I Construction. Arrange, direct, and manage the performance of all development and construction work, including the furnishing of all labor, materials, and equipment necessary to accomplish: i) finished site development, including. grading, installation of utility trunk lines, access ways, curbs, gutters, sidewalks and other on -site and off -site improvements as may be required for any Project approvals and consistent with the Project Program, ii) the construction, Page -8- C equipping and furnishing of the remaining Project improvements consistent with the Project Program, and (iii) engaging the services of an onsite construction supervisor . i. Draws. Prepare and administer expense, design and construction draws ( "Project Expense Draws ") as provided hereinafter. j. Sales; Qualifying Buyers; Closings. Developer shall develop and implement a marketing, advertising and sales program for the Units in accordance with the Project Program. Developer shall use its good faith, commercially reasonable efforts to promote and sell the Units to Qualified Buyers. Upon identifying a potential buyer, Developer shall assist the Person in completing an application to apply for qualification as a Qualified Buyer and shall assist the Person in gathering financial, employment and other information to complete the application. Developer shall review and initially make the determination as to whether any Person meets the requirements of qualifying as a Qualified Buyer and, if so, shall submit the application to the County or Town for approval. Any Person who is disqualified by Developer shall have the right to appeal the Developer's decision to the County or Town for review. If there are more Qualified Buyers than Units available to meet demand, Developer shall select the buyer by use of a lottery system approved by the County and Town. Developer shall proceed to offer Units for sale to each Qualified Buyer. Developer shall coordinate the closings of the sales of the Units. k. Condominiums. For those Units that are to be constructed as condominiums under the Project Plans, file for record in the real estate records for Eagle County, Colorado such Condominium documentation, including Condominium Declaration, Condominium Map and other documents (collectively, "Constituent Documents ") all of which shall be approved by the County, which approval shall not be unreasonably withheld, delayed or conditioned, and as required by the Colorado Common Interest Ownership Act ( "Act ") to create a Leasehold Regime under the Act, which Constituent Documents shall be prepared and paid for by Developer for the purpose of preserving the right to allow for the possible sale of individual dwelling units as condominium units to Qualified Buyers in the future. Upon the sale of the first unit in any such Leasehold Regime, the County agrees to release the Common Elements of the common interest community from the Land Lease. 1. Project Program. Implement the final Project Program, as amended and updated with any Material changes reviewed for approval by County, and do such other things and take such other actions as may be necessary or advisable in Developer's commercially reasonable opinion, consistent with the Project Program. Page -9- M. Material Changes. Submit to the County for approval any Material change in the Project Budget, Project Schedule, Project Plans, or a change in the person or entity who is to act as the Project Contractor or Project Architect. Concurrent with any proposed changes in the Project Budget, Developer shall submit a new target sales price for the Units. n. DU -care Site. With respect to the day -care center site, Developer shall have no obligation to construct . any Improvements, other than the Improvements necessary to complete the Units; provided that Developer agrees to (i) stub -out water and sanitary sewer lines five feet within the boundary of the site, and (iii) to grade the site consistent with the overall Project Plans. All costs incurred in connection with the day -care site shall be included in the Project Costs and shall be recoverable as provided herein. Developer shall provide to the County two or more development plans for the day -care site. At least one plan shall provide for the costs of development and construction to be spread across the sales price of all Units, with a projected per Unit price increase. 3. COUNTY'S RESPONSIBILITIES: County shall be responsible for the following, consistent with the approved Project Program: a. Approvals. To diligently review and, to the extent consistent with this Agreement, approve of the final Project Program, including the Project Budget, Project Plans and Project Schedule, and as they may be Materially updated thereafter from time to time. If a Material modification of the final Project Program or any component of it is not approved by County, then the Project Program then in place shall control until the dispute is resolved in the manner provided herein. b. Lease. To timely perform all of its duties and obligations under the Land Lease. C. Title. To provide leasehold title to the Property subject to the terms of the Land Lease and this Agreement, and subject to compliance with the Project Program. d. Project Architect/Contractor. To timely review and approve the contracts with the Project Architect, the Project Contractor, and all Material amendments or change orders thereto. e. Waivers. Secure a waiver, exemption or reimbursement for Developer from County planning and review fees and building permit fees, impact fees, and other governmental charges, unless such costs are included in the Project Page -10- C c. Budget. f Cooperation. The County agrees to diligently cooperate with the Developer in any way reasonably requested by the Developer regarding the Project Program and its approval and implementation, including, but not limited to, obtaining, awarding, executing and issuing all planning and zoning approvals, subdivision plats, common interest community formation documents, building permits, financing for the Project, writing letters of support for, or explanations regarding, the Project, or otherwise as the Developer may regaZst from time to time. The County shall not withhold any building permits, certificates of occupancy or other governmental approvals that apply to all development projects as a method of enforcing this Agreement. County shall also work in good faith with Developer to modify the terms and conditions of this Agreement, the Land Lease and the Deed Restrictions if the Lenders or proposed lender of the Project Financing requires a modification that is not Material; provided, however, that such modification does not change the basic requirements of this Agreement, the Deed Restriction or the Land Lease unless approved in writing by County in its sole but reasonable discretion. g. Qualified Buyers. The County and the Town shall refer Persons interested in buying Units to the Developer. The County and/or the Town shall promptly approve or disapprove applications submitted by Developer to the County and/or Town on behalf of Qualified Buyers. h. Reimbursement. In the event that Project Financing cannot be arranged or in the event that the Project Plans are not approved, the Developer may elect anytime within 6 months following the date of this Agreement to terminate the Agreement. Upon such termination, County shall reimburse the Developer, upon 30 days notice, for all Project Costs incurred. i. Purchase of Units. The County agrees, subject to the limitations contained in this section, that they will from time to time purchase from the Developer the improvements that constitute any Unit(s) as follows: (i) In the event that any Unit(s) are constructed and Developer, after fulfilling its obligations to market and promote the sale of such Unit(s), cannot sell the Units within 90 days following completion, the County agrees to meet with the Developer upon 3 days prior notice and to discuss possible approaches that would make the Unit(s) more marketable. (ii) If the Unit(s) remain unsold for another 150 days, then Developer may elect to give the County a notice ( "Put Notice ") of its intent to exercise its rights under this section to sell the improvements to the County which Page -11- notice shall identify the Units(s) subject to the notice. (iii) The purchase price of the improvements shall be the greater of the listing price of such Unit as provided in the approved Project Program less 16% (12% profit + 4% real estate commission) or the per Unit release fee charged by the Lender of the Project Financing. (iv) The County shall have no obligation to purchase the improvements if the aggregate of all the prior sales under all Put Notices is $1,000,000. (v) The closing of the sale of the improvements identified in any Put Notice shall occur at a time, date and place specified by the County, but in no event more than 30 days following the Put Notice. At the closing the County shall pay the purchase price and the Developer shall deliver a special warranty deed for the improvements, subject to any declarations, easements and restrictions, and a release from the Project Financing. 4. LIMITATIONS: The following limitations shall apply to the authority of the Parties under this Agreement: a. Wherever in this Agreement either party has the right to review and approve a submission by the other party, the party with such approval rights shall not unreasonably withhold, condition or delay its approval to the extent consistent with the approved Project Program. Such party shall have five (5) business days to review and approve the submission or resubmission of an item previously disapproved, with the aid of experts retained by such party if so desired. If the approving party disapproves of the particular submission, then it shall deliver to the other party a reasonably detailed written explanation of the reasons for such disapproval. If the approving party fails to approve or disapprove of the particular submission within such five (5) business day period, the particular submission shall be deemed approved without further action by either party. If no resolution can be reached voluntarily between the Parties within ten (10) days following notice of disapproval, then the disagreement shall be subject to the provisions of Section 15 of this Agreement regarding Mediation & Arbitration. b. The Project Program, specifically inclusive of each of the Project Plans, Project Budget and Project Schedule, shall be agreed to by County in accordance with this Agreement, and the terms of the Land Lease and the Deed Restriction shall be mutually agreed in writing, prior to Developer incurring firm commitments for construction of the Project. Page -12- C) C. The Project Financing shall be agreed to by County in accordance with this Agreement prior to executing the final loans documents. d. Contracts with the Project Architect and the Project Contractor shall be approved in writing by County prior to incurring any commitments regarding lead - time orders for materials and prior to commencement of construction on the Property. e. Developer shall not mortgage, pledge, create a security interest in, encumber, or otherwise subject the Property to any lien or encumbrance of any nature or kind; provided, however, that County shall provide for the same as set forth in paragraph 2b.(i.) above. f. Developer shall not mortgage, pledge, create a security interest in, encumber, or otherwise subject the Project to any lien or encumbrance of any nature -- or kind whatsoever except for any debtor liability incurred in connection with the Project. g. Developer shall not sell, master -lease or otherwise dispose of the Project, or contract or otherwise commit to do any of the foregoing during the term of the Land Lease without the prior written consent of County. h. Under no circumstances shall any financial commitment be made by Developer with regard to the Project that encumbers the Property without prior written approval of County, except to the extent consistent with this Agreement. i. This Agreement shall not be assigned except as otherwise authorized pursuant to Section 17 hereof. 5. DEVELOPER COMPENSATION: Developer has disclosed to County, and County has agreed to, the payment to Developer or its affiliates of certain fees and charges in connection with its services to the Project. In no event shall such fees and charges be the responsibility of, or paid by County. Those fees and charges are as follows: a. As compensation for its services as Developer, Developer will be entitled to a Development Fee ( "Development Fee "). The Development Fee will be calculated as 3 percent of the Gross Sales Price of for -sale property/units, or, in the case of property held for rent, 5 percent of the total Project Costs, excluding land. The Development Fee will be identified as an approved development cost in the development budget. The Development Fee may be paid from construction loan proceeds if so permitted by the construction lender, or as an unfunded development cost to be paid from the sale proceeds. Page -13- b. In addition to the Development Fee, Developer may be reimbursed or any reasonable, appropriate actual and direct out -of- pocket expenses incurred in connection with the Project, including, but not limited to travel, printing, messenger services, on -site supervision etc. No general overhead or administrative expenses of the Developer may be charged to the Project. Funds advanced by the Developer for out -of- pocket expenses of the Project in the ordinary course of business shall be reimbursed and repaid promptly, as funds are available from the proceeds of project Finances and/or sales. C. The Developer may charge an in -house sales commission of 4 percent of the Gross Sales Price of each Unit closed to cover sales expenses. This fee will be reduced by any amount paid to outside vendors. d. In addition, Developer shall be entitled to the compensation under the Equity Sharing provisions below. e. No other fees are expected to be charged to the Project by Developer or its affiliates, and none shall be so charged without the prior written approval of County. 6. PROJECT COSTS DRAWS: Careful monitoring of expenditures and procurement by County is acceptable to Developer. Accordingly, Developer shall provide to County copies of all funding draws submitted for Project Financing during construction of the Project for County's review for consistency with the Project Budget. To the extent that any such draws shall be Materially inconsistent with the final Project Budget, Developer shall provide an explanation of such inconsistency and a resolution of how the inconsistency shall be reconciled. In the event such inconsistency is not explained or resolved in a manner reasonably acceptable to County, then the disagreement shall be subject to the provisions of Section 15 of this Agreement regarding Mediation & Arbitration. 7. EQUITY SHARE a. Developer's Acquisition and Resale of Units. Pursuant to the terms of the Lease, the Developer may, from time to time, exercise its option to acquire fee title to the real property underlying any Unit(s) and/or Common Area. Developer may only acquire Units that are subject to a Purchase Agreement with a Qualified Buyer. Developer shall exercise commercially reasonable efforts to close the sale of the Unit to the Qualified Buyer within ninety (90) days of the exercise of the option. All Units shall be priced such that the profit on the Units shall be equal to a twelve percent (12 %) profit margin. Page -14- C_,__11 0 b. Default By Qualified Bu per. If, for any reason whatsoever, the Qualified Buyer of any Unit acquired by Developer defaults and does not close on the purchase of the Unit pursuant to the Purchase Agreement, Developer shall immediately notify the County. The County or Town shall exercise their reasonable efforts to help identify and approve a new Qualified Buyer for the Unit within 90 days of such notice. Immediately upon doing so, the County or Town shall notify Developer of the name, phone number and address of the buyer. Developer shall endeavor to contract with the new Qualified Buyer for the sale of the Unit pursuant to a Purchase Agreement. Developer shall not resell or rent any Unit acquired by exercising the option under the Lease except in a sale to a Qualified Buyer pursuant to a Purchase Agreement or, as otherwise provided in Section 3i. C. Calculation of Equity Share. Following the Closing on each Unit, Developer shall calculate the Equity Share as follows: Gross Sale Price -less Closing Costs -less any Release Payment -less the Real Estate Commission -less the cost of any Upgrades -less any Unfunded Project Costs -less Reserves = Net Sale Proceeds The Equity Share to be paid to the County (or, if the County so directs, to the Town) shall be 50% of the Net Sales Proceeds. The other 50% of the Net Sales Proceeds shall be retained by Developer. d. Accounting. Commencing upon the 10th day of the fourth month anniversary of the sale of the first Unit, and continuing on the 10th day of each month following each calendar quarter thereafter, Developer shall provide to the County copies of each closing statement for the sale of each Unit, together with a calculation of the Net Sales proceeds and the County's and the Town's Equity Share. Developer shall keep accurate and complete books and records for the proceeds from the sale of each Unit, including the Gross Sales Price and all of the Page -15- permitted deductions therefrom. County shall have the right to inspect, upon reasonable notice, all of the books and records of Developer pertaining to the sales of the Units, the Gross Sales Price from each Unit and .the calculation of the Equity Share. e. Payment of Equity Share. Commencing on the. tenth (10th) day of the fourth (4th) month anniversary of the sale of the first Unit and continuing on the 10th day of the month following each calendar quarter. thereafter, Developer shall pay the County and the Town the Equity Share applicable to the sale of all Units closed during the prior quarter and, to the extent that Developer determines the Reserve is overfunded or unnecessary, one half of the Reserve surplus. The Equity Share shall be paid directly to the County, or to the extent the County directs, to the Town. In the alternative, Developer shall assist the County and or Town in forming a down payment assistance program wherein the Equity Share can be used to assist Qualified Buyers in the purchase of Units. It is expressly acknowledged, covenanted and agreed that the County's and the Town's right to receive the Equity Share shall remain in full force and effect notwithstanding the sale of any Unit. 8. ONGOING INFORMATION UPDATES & REPORTS: Developer agrees to provide ongoing information updates and reports during the pre - construction, construction and sale of the Project Program, containing at least the following: a. During pre - construction, construction and sale, bi- monthly reports and updates to County compared to the Project Schedule, with a full explanation of any Material variances; b. Such other and further reports as reasonably requested by County to provide complete and factual information regarding the status of the pre - construction, construction, sale and financing of the Project, a comparison to the Project Program and an explanation of any variances and the methodology to bring any non - complying matters into compliance. Each of the foregoing reports and information shall be kept confidential and shall not be available for normal public purposes, subject to the laws, rules and regulations pertaining to the Freedom of Information Act or other similar laws then appertaining. If County, reasonably believes that the information is such that it is appropriate for an executive session, then the parties invited to that executive session for such limited purpose shall be entitled to receive and review such information. In the event County sets up a web -site regarding the Project, such reports shall, in addition to other formats as requested by County, be posted to the web -site by Developer; provided, however, that such web -site is reasonably secure, as determined by Developer. Page -16- C11 9. BOOKS AND RECORDS: Developer shall maintain, or cause to be maintained; complete accounts and books and records, in accordance with generally accepted accounting principles (which shall not be changed without mutual consent); showing all costs, expenditures, sales, receipts, assets, and liabilities, and profits and losses, and all other records necessary, convenient or incidental to recording the Project business and affairs and. sufficient to determine Developer's fee. County's designated. representative, shall have the right upon reasonable notice to inspect and review the Project and the Books and Records required hereunder at no charge to County. 10. DEFAULT & REMEDIES: The following shall apply in the event of a breach or failure to comply with the obligations, undertaking, covenants, payments, commitments or any other requirements agreed to be performed or undertaken herein. (a) Non - Material Event of Default By Developer. As used herein, the term "Non- Material Event of Default" shall mean any failure to comply with, observe or perform any of the obligations, undertakings, covenants, payments, commitments or any other requirements agreed to be performed or undertaken herein by the Developer that remain uncured within thirty (30) days from and after receipt of said notice or if the cure is such that it would reasonably take longer than thirty (30) days to cure, then a failure of Developer to diligently commence said cure within thirty (30) days and to prosecute said cure to completion with diligence thereafter, but in no event more than ninety (90) days. A Non - Material Event of Default shall also include a Material Event of Default and a Major Material Event of Default as defined below. Upon the occurrence of a Non - Material Event of Default, the County shall be entitled to exercise any or all of the following remedies, each which shall be cumulative in nature: (i) pursue an action for specific performance; or (ii) pursue an action for actual damages incurred. (b) Material Event of Default. As used herein, the term "Material Event of Default" shall mean the occurrence of any one of the following that remain uncured within thirty (30) days from and after receipt by Developer of notice from the County specifying the nature and scope of such Event of Default, including the fact that the failure is material in nature, or if the cure is such that it would reasonably take longer than thirty (30) days to cure, than a failure of Developer to diligently commence said cure within said thirty (30) days and to prosecute said cure to completion with diligence thereafter, but in no event more than sixty (60) days: (i) Developer agrees to a Material modification to Project Plans, of the Project Plans, Project Budget, Project Schedule, Project Contract, Project Page -17- Architect, or the Project Plans without first having obtained the County's approval; (ii) based upon a default of the Project Contractor or the Project Architect, Developer elects to terminate the Project Contractor or the Project Architect and fails to select and submit for approval to the County a new Project Contractor or Project Architect within ninety (90) days of the date of termination; (iii) a lien in excess of $100,000 is filed against the Project or the Property for which a bond has not been provided sufficient to release the lien from the Project per Colorado State Statues within one - hundred - twenty days (120) days of the filing of the lien; or (iv) the lender providing the Project Financing declares an Event of Default under the Project Financing which remains uncured within the time periods provided in the documents evidencing the Project Financing. Upon the appearance of a Material Event of Default, County shall be entitled to exercise any or all of the following remedies, all of which shall be cumulative in nature: (i) pursue an action for specific performance; (ii) pursue an action for actual damages; or (iii) elect to directly cure the default itself by the payment or performance necessary to cure said failure, and thereupon charge Developer for the cost of such cure, including any attorneys fees and costs incurred in pursuing such notice of cure. Such payment by Developer to County for costs incurred by County shall be due and payable within ten (10) days from and after the date of billing of the same by County to Developer. Failure to timely pay shall be an Event of Default of this Agreement and all payments not received in a timely manner shall bear interest at the rate of 10% per annum until paid. (c) Major Material Event of Default. As used herein, a "Major Material Event of Default" shall mean the occurrence of any on or more of the following that remain uncured ten (10) days after written notice by Developer by County specifying the nature and scope of such Event of Default, including the fact that the default is a Major Material Event of Default: (i) the holder of the loan evidencing the Project Financing accelerates the loan based upon the default by Developer, which remains uncured within the time periods provided in the Project Financing; Page -18- (ii) Developer has abandoned the Project for a period of two (2) months; (iii) the holder of any mechanics lien filed against the Project or Property has obtained an order authorizing the sale of the lien from any court having jurisdiction; (iv) the filing by or against Developer of a petition for protection under the United States Bankruptcy Code; or (v) a dissolution or liquidation of Developer. Upon the occurrence of a Major Material Event of Default the County shall be entitled to pursue any or all of the following remedies, all of which remedies shall be cumulative in nature: (i) pursue an action for specific performance; (ii) pursue an action for actual damages; (iii) elect to directly cure the default itself by the payment of performance necessary to cure said failure, and thereupon charge Developer for the cost of such cure, including any attorneys fees and costs incurred in pursuing such notice of cure. Such payment by Developer to County for costs incurred by County shall be due and payable within ten (10) days from and after the date of billing of the same by County to Developer. Failure to timely pay shall be an Event of Default of this Agreement and all payments not received in a timely manner shall bear interest at the rate of 10% per annum until paid; or (iv) terminate this Agreement. d. County Default. In the event County shall fail to perform any of the obligations, undertakings, covenants, payments, commitments or any other requirements agreed to be performed or undertaken herein, or otherwise imposed on County herein, then such failure shall be an event of default hereunder and shall entitle Developer to its remedies specifically set forth in this Agreement in addition to any other remedies allowed at law or equity, including (i) claims for damages, Development Fees, reimbursable costs, and lost profits, (ii) claims for specific performance or (iii) the right to elect to terminate this Agreement which remedies shall be cumulative; provided, however, that Developer recognizes that remedies for any tort liability are limited by the Governmental Immunity laws and other similar laws and regulations governing limitations of actions against Page -19- governmental entities in Colorado. In no event shall any of the provisions contained in this Agreement be deemed or constitute a waiver or limitation of any and all immunities provided to County or Town under Colorado law. 11. NOTICES: All notices, demands and requests shall be in writing, and shall be effectively made if sent by United States Certified Mail, return receipt requested, postage prepaid, by nationally recognized overnight courier guarantee next day delivery, by telecopy or by personal delivery, properly addressed as follows: If addressed to Developer: With a copy to: If addressed to County: With a copy to: Berry Creek Limited Liabiliy Co. 21820 Burbank Blvd. Suite 120 Woodland Hills, CA 91367 Alan M. Keeffe, Esq. 1120 S. Lincoln Ave. Suite 203 P.O. Box 773630 Steamboat Springs, CO 80477 Board of County Commissioners P.O. Box 850 Eagle, CO 81631 Eagle County Attorney R. Thomas Moorhead, Esq. P.O. Box 850 Eagle, CO 81631 Unless this Agreement specifically provides otherwise, all notices shall be deemed received: three (3) business days following deposit in the United States Mail with respect to certified letters, one (1) business day following deposit if delivered by an overnight courier guaranteeing next day delivery and on the same day if sent by personal delivery or telecopy (with proof of transmission). Attorneys for each party are authorized to give notices for the party the attorney represents. Any party may change its address for the service of notice by giving written notice of such change to the other party, in any matter specified above. Page -20- r 12. NO PARTNERSHIP: County, Town and Developer do not intend by this Agreement to create a partnership or joint venture relationship among themselves and this Agreement shall under no circumstances be interpreted to create such a relationship. 13. APPLICABLE LAW: This Agreement and all matters relating hereto shall be construed in accordance with the laws of the State of Colorado. 14. FURTHER ASSURANCES: The scope and implementation of the Project is .subject to change and modification depending upon circumstances that may be beyond the control of the parties. The obligations and duties of the parties shall be subject to a covenant of good faith and fair dealing. The parties agree to cooperate with each other to accomplish the goals and objectives described herein and to execute, deliver and perform such further agreements, documents and other items as may be reasonably requested by either party to accomplish those goals and objectives. In every instance when any approval, consent or action is required hereunder by either party, such approval, consent or action shall not be unreasonably withheld, delayed, or conditioned. 15. MEDIATION & ARBITRATION: If a dispute arises out of or relates to this Agreement, (including, without limitation, any dispute regarding the existence of an Event of Default and any approvals of any modifications to the Project Plans, Project Budget, Project Schedule, Project Program, Project Contractor or Project Architect) or the breach thereof, and if the dispute cannot be settled through negotiation, the Parties agree first to try in good faith to settle the dispute by non - binding mediation administered by a mediator mutually selected by the Parties prior to resorting to binding arbitration. In the event the Parties cannot agree upon a mediator, the mediation shall be administered through the American Arbitration Association. If any such controversy or claim cannot be resolved by the aforesaid mediation, it shall be settled by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. If a dispute arises prior to completion of the Project, to the extent practicable the work shall continue unabated while the dispute is being resolved. 16. ATTORNEYS' FEES: In the event either party commences arbitration or other legal action to enforce its rights under this Agreement, the prevailing party shall recover all reasonable costs and expenses incurred in such action, including reasonable attorneys' fees. 17. ASSIGNMENT: Neither Party shall, without express prior written consent of the other Party, encumber, assign, or otherwise transfer its interests in this Agreement, or any right or interest herein; provided, however, that Developer shall be allowed to assign this Agreement to secure any Project Financing and to another entity for the purpose of pursuing the Project Program so long as it is an entity in which: Developer Page -21- C) retains the management control; Developer has a direct ownership interest; and the entity is capitalized and organized to pursue the Project Program in the place and stead of Developer. 18. BINDING EFFECT: The terms and conditions of this Agreement shall be binding and inure to the benefit of the Parties hereto and their respective successors and (except as herein otherwise provided) assigns. 19. FORCE MAJEURE: TIME OF THE ESSENCE: Whenever a period of time or specified date is herein prescribed for action to be taken by any party, there shall be excluded from the computation of any such period of time or an extension of such specified date, any delays due to strikes, riots, acts of God (excluding weather delays reasonably and historically known to occur, as defined by a ten (10) year average of the U.S. Meteorological Survey data, or similarly and mutually acceptable data, in the geographical area of the Property), shortages of labor or materials outside of the parameters typically found in the geographical area of the Property, war, terrorism or governmental laws, regulations, restrictions or moratoriums (except to the extent waived or otherwise not applied to the Project or the Property) and unforseeable delays by the Project lender; provided, however, that both parties shall use their best and diligent efforts to mitigate the effects of such occurrences with respect to the required action; provided, that reasonable costs relating to such mitigation efforts shall be includable as an addition to the Project Costs. Subject to the foregoing, time is of the essence with respect to each and every provision of this Agreement. 20. ENTIRE AGREEMENT: This Agreement, the Exhibits attached hereto, and the Project Program, Project Plans, Project Budget, Project Schedule, Land Lease and Deed Restrictions, as they may be updated from time to time as provided herein, set forth all of the promises, agreements, conditions, understandings, warranties and representations among the Parties hereto with respect to the Project and there are no other promises, agreements, conditions, understandings, warranties, or representations, oral or written, express or implied, between them except as set forth herein. No subsequent Material modification of any of the terms of this Agreement shall be valid, binding upon the Parties, or enforceable unless made in writing and signed by the Parties. 21. COUNTERPARTS: This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 22. FACSIMILE SIGNATURES: Facsimile signatures shall be accepted and enforceable as though original in nature. 23. AUTHORITY: Each Party hereby represents, warrants and covenants to the other that it has the full right, power and authority to enter into this Agreement and Page -22- CII C�Ij make the agreements contained herein on its part to be performed; that the execution, delivery and performance of this Agreement has been duly authorized by such Party; that this Agreement constitutes the valid and binding obligation of such Party, enforceable in accordance with its terms; and, that the making of this Agreement and the performance thereof will not violate any present laws or ordinances or the terms or provisions of any agreement to which such Party is a party or under which such Party is otherwise bound. Executed to be effective as of the date first written above. BERRY CREEK LlIVIITED EAGLE COUNTY, STATE OF LIABILITY CO. COLORADO BY AND THROUGH By: S W Realty P ers, LLQ, Manager By: L� �1� Its: Manager (—\N C' VA) jks\agreements \development agreement final 3/12/02 M Page -23- r Exhibit "A" Legal Description of Property Page -24- YJzi/ 11/ LYJCIL CJ7: Z3 f 17 t CJQ f 173LL MLNVtLUW LAW r IMM 513 f-AUE 01 i LAND LEASE AND OPTION AGREEMENT This LAND LEASE AND OPTION AGREEMENT ( "Lease ") is made and executed effective as of the day of . 2002, by and between EAGLE COUNTY, COLORADO, a body corporate and politic organized and existing pursuant to the laws of the State of Colorado ( "Coun ') and BERRY CREEK. _ LIMITED LIABILITY CO., a Colorado limited liability company ( "Lessee')_ RECITALS A. The County is the owner othat certain real property described in .Exhibit A attached hereto ("Prove " ). B. The County and the Lessee have entered into that certain Development Agreement ( "Development Agreement ") of even date herewith, pursuant to which the Lessee is to develop the Property into a single and multi - family housing development project with purchase prices that are intended to be affordable to certain income levels of residents within the local community ( "Project "). C. The County desires to enter into this Lease for the purpose of leasing the ground to the Lessee so that 'the Lessee c'an'construct ii nprovements on the property and sell the residential units as they are constructed. NOW THEREFORE, in consideration of the foregoing recitals and mutual promises and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties do hereby agree as ollows: 1. Definitions. In addition to the terms defined above, the following terms will have the meanings specified below unless the context requires otherwise: P" (a) "CCION' shall mean the Colorado Common Interest Ownership Act_ (b) "Deed Restrictions" shall mean those certain restrictions described in the Development Agreement which shall re'strict.th "occupancy and/or resale price of certain Units_ (c) "Lender" shall mean any lender�vho is holding a mortgage, deed of trust, collateral assignment or security interest iii the Lease for the purpose of providing Project Financing. -� (d) "Improvements" shall mean any and all water, sewer and other utility lines, sidewalks streets, buildings, structures and other improvements hereafter made to the Property or affixed to the Property by the Lessee. V" 03%11/2002 09:57 19708719322 BENDELOW LAW FIRM SB PAGE 03 "Option" shall mean that certain option to purchase any Unit or Comtr.=on, Area as more particularly provided for in Section 8 hereof. (f) "Project Financing" shall mean any development, construction, bridge or permanent financing or Ioan for the purpose'of developing the Property and/or constructing Improvements on the Property. (g) "Qualified Buyer" shall have the same meaning as set forth in the Development Agreement. (h) "Unit" shall mean any portion'of the Property or the Improvements thereon that are subdivided or platted for separate. ownership as a residential lot, condominium unit or townhome unit. 2. Lease Tenn. The County hereby demises and Ieases to the Lessee the Property in accordance with the provisions of this Lease. (a) Term. The lease term shall c6rnmence as of the date hereof and __.shall continue, unless sooner terminated as ° more fully provided herein, on.. , 2012 ( "Lease Term "). (b) Rent. The rent for the entire Tease Terns shall be $10.00. County hereby acknowledges receipt of the rent for the entire Lease Term. 3. Improvements and Development Plan. The Lessee shall develop and improve Property and construct Improvements thereon subject to the following: (a) Development Agreement- The Lessee shall have the right to develop and improve the Property and to install Improvements thereon in accordance with and subject to the terms, conditions and provisions of the Development ,Agreement. All alterations, additions or Improvements to the Property shall be done at the sole cost and expense of the Lessee. (b) Ownership. As between the. Lessee and the County, all of the Improvements installed on the Property shall remain the sole property of the Lessee provided that, upon termination or expiration of the Lease Term, Lessee's remaining title to any Improvements shall automatically vest in the County, subject to the liens, if any, for Project Financing. (c) Subdivision. County acknowledges that Lessee intends to subdivide the Property and the Improvements to be constructed by the Lessee on the Property. Lessee may do so by forming leasehold condominium regimes as described in CCIOA. In addition, the Lessee may propose to subdivide the fee interest owned by the County into separate, single family lots. County agrees to cooperate 'and assist the Lessee in connection with such requests, provided that the request complies with all terms, conditions and provisions of the Development Agreement. County agrees it will execute 0AAuerbaeh SouthwestSerry CreekU.AND LEASE2- 7,02.doc 2 Wt printed 3/11102 8:55 AM VJf 1lT LVVL VJ. 1 �. . vv. 1....+r -L ✓� ✓-- -- --- -- and subordinate this Lease to all subdivision plats, declarations of covenants, conditions and restrictions, subdivision improvement agreements and such other agreements as are customary in the industry for developing and subdividing such real property located in the County. (d) Postine. Prior to the commencement of any work on the Property, Lessee shall notify the County of its intention to commence work. The County may, but shall not be obliga�ed to, avail itself of the provision of C.R.S. § 38 -22 -105. The County reserves the right tee enter the Property to post and keep posted notices described in such statute. County shall have no obligation to post the Property and shall not be subject to any liability or defense for failing to do so. (e) ;Maintenance of hprovements. Once any Improvements have been constructed on the Property, Lessee shall maintain or cause a homeowners association to maintain, the Improvements in reasonably good condition, except for usual and ordinary wear and tear. All such maintenance and/or repair shall be done at .the Lessee's sole cost and expense. County shall have no obligation to repair, maintain, alter or modify the Property or any Improvements. (f) Demolition. No structure once constructed shall be demolished, nor shall the exterior of any structure be altered in .any way that materially affects the exterior appearance of such structure, except in accoxdabce with the terms, provisions and conditions of the Development .A.greement. (g) Mechanics Liens. Lessee shall keep the Property free and clear of any and all mechanic liens ariaing out of or in connection with work or labor done, servicesi performed or materials supplied or furnished in connection with any of the work performed by the Lessee or any alterations, improvement or repair of the Property done at the Lessee's request. The Lessee shall promptly and fully pay and discharge any and all liens that may be recorded against the fee interest of the Property, provided, however that __,if, the Lessee desires to dispute the validity of the lien or the amount of any such lien, it na provide the County with notice of its intention to do so Within 30 days after Lessee first discovered that a lien has been recorded in the real property records of Eagle County. In that case, the Lessee shall diligently and continuously contest the validity and/or amount of the lien. If a court should enter an order authorizing a sale of the Property pursuant to the lien, the Lessee shall imriiediately post a good and sufficient surety bond with the court sufficient'to obtain an order discharging the lieri fiom the Property. Lessee shall indemnify the County against any lass, expense or damage resulting from any mechanics liens recorded against the Property as a result of any work performed by or at the request of the Lessee. 4- I_ns_urance /Casualty, During the Lease Term., Lessee shall maintain the insurance in accordance with the following: (a) Liability Insurance. Lessee shall .at all times carry and maintain commercial general liability insurance on an on- occurrence basis, with a minimum riMuerbach Southwest\Berry Creek\LAND LEAS E2- 7 -02.doc 3 Last printed 3i 11/02 5:55 AM 17.'3/ 11 J Lenz r -J; O f 1 7 f rlts f 173GL 13MNDt7LUW LAW r 1KM bb F AUE 05 combined single limit of $1,000,000 with excess liability coverage limits of not less than $5,000,000, and automobile liability insurance for all owned, hired and non -owned automobiles owned or operated by the Lessee providing the minimum combined single -. o limit of $1,000,000. . (b) Worker's Compensation Insurance. During any period in which construction work is being performed, Lessee or its general contractor shall carry or cause to be maintained workker's compensation insurance as required by the state of Colorado in an amount that may be required by applicable statutes. (c) Property Insurance. Lessee shall;carty and maintain, or cause to be maintained, all -risk property insurance for the full replacement value of all Improvements to the fullest extent such insurance is available; provided that during any period in which any construction is being performed, the property insurance may be provided by the general contractor's builder's risk insurance. (d) General Insurance Provisioris. Pzfor to combaencement of any work on the Property, Lessee shall pwyide to the County written evidence of such insurance. Any insurer writing any of the Lessee's insurance shall'have an ,A..M_ Best rating of not less than an A -VIZ[. All policies shall contain endorsements that the insurer shall give the County at least 30 days advance written notice of any change, cancellation, termination or lapse of insurance. All of the Lessee's insurance policies, endorsements and ­certificates will be on forms and with deductibles and self - insured retention, if any, ea$onably acceptable to the County. Notwithstanding* anything contained in this Lease to the �bntrary, the County and ,Lessee waive any and all rights of recovery, claim, action or causes of action against the other and their respective managers, principals, partners, officers, directors, agents and employees for any loss or` dainage that may occur to either the County or the Lessee or any party claiming by, through or under either one of them, as the case may be, with respect to the Property, or any Improvements, or any contents thereof, including any and all rights of recovery, claims, actions or causes of action arising out of or based upon negligence 'of either of the parties to this Lease, which loss or damage is (or would have been insured had the insurance required under this Lease been carried) covered by insurance: (e) Casualty Damage_ If all or any part of the Improvements are damaged by fire or other casualty, Lessee shall im 6diately notify County in writing. Lessee shall, to the extent insurance proceeds are made available, restore, rebuild or repair any Improvements darna ed by such casualty. Lessee shall have the sole right to adjust and settle any claims for insurance. Lessee shall not be liable for any loss or damage to any of the Improvements that are not covered by insurance. 5. Representations and Warranties. (a) County Warranties. County hereby warrants and represents to the Lessee as follows: G :\Auerbach Southwest\Berry Creek'd-AND LEASE2- 7- 02.doe 4 Last printed 3111102 5:55 AM IOd{ 11 / L19riz ri:1 Lit 1 7 t ruo (1 7JG4 i iINPI �L nun uu .P" (i) The County is the owner of the fee simple estate of the Property free and clear of all liens, encumbrances, covenants, conditions, restrictions, reservations and agreements, except those specifically described in Exhibit B attached hereto. (ii) The County is authorized by the laws of the State of Colorado to enter into the transaction contemplated by this Lease and to carry out its obligations hereunder and has duly author�.ed the execution and delivery of this Lease and other documents related to this transaction. This lease, and the County's execution and performance of this Lease, have been approved by a final resolution of the Board of County Commissioners. (iii) Neither the execution, delivery or performance of the terms and conditions of this Lease, nor the consummation of the transactions contemplated hereby, conflicts with or results in the breach of any terms, conditions or provisions of ' .:any restriction or agreement or instrument to which the County is now a party, to which `'t ,County is bound, or which the Property is bound. (iv) There is no litigation or proceeding pending, or to the knowledge of the County, threatened against the County or against the Property affecting the right of the County to execute this Lease or the ability of the County to fully comply with its obligations contained herein. (v) This Lease constitutes a legal, valid and binding obligation of the County in force and is enforceable in accordance with its terms. (b) Lessee Representations. The Lessee warrants and represents to the County the following: (i) Tht—, Lessee is a Colvzado limited liability company duly authorized and validly existing under the laws of the State of Colorado. (ii) The Lessee is authorized by its Articles of Organization, its Operating Agreement and the laws of the State of Colorado to enter into the transactions —contemplated by this agreement and to carry out its obligations hereunder and has duly "rized the execution and delivery of this Lease. (iii) Neither the execution, delivery or performance of the terms and conditions of this Lease, nor the consummation of the transactions contemplated hereby, constitutes or results in a breach of any term, condition or provision of any restriction or agreement or instrument to which the Lessee is now a party or to which the Lessee is bound. (iv) This Lease constitutes the Iegal, valid, binding obligation of the Lessee in force and is enforceable in accordance with its terms. CiMuerbach Southwest\BeM Creek\LAND LEASE2.7- 02.doc 5 Last printed 3/11/02 8:55 AM ' " b:di 111 Z19b'L by: b ( l y (10b (I y:i'LL BENDELUW LAW FIRM SB PAGE 07 6. Condemnation. In the event that all - or any part of the Property is condemned for any public, quasi - public or private use by any eminent domain proceedings, then the Lessee shall have the right, but not the obligation, to terminate this Lease as to the balance of the Property. Lessee shall have the right to enter an appearance and contest the validity and amount of any such eminent domain proceeding. All compensation awarded for the fee title and any Improvements or for the use of the Property shall be allocated as follows: (a) the value of fee .interest in :the Property, in its unimproved coAtion at the commencement of this Lease, as subject to this Lease to the County arid; (b) the value of the leasehold estate and the Improvements, to the � Lessee. 7. Covenant of Ouiet En'o anent. Subject to the terms of this Lease, the Lessee shall, and may peacefully, hold and enjoy the Property without hindrance fxo m the County or any person claiming by, through, or under the County. 8. Purchase Option: County hereby' grants to the Lessee the option to purchase all or any portion of the Property subject to'the terms and provisions of this section: (a) Conditions—to Exercise. The option may be exercised by the Lessee at any time in any number of times during the term of this Lease subject to the Lessee's fulfillment of the following conditions preceding: (i) Lessee shall provide to the County written notice of its - . :Aesire to exercise the option describing that portion of the Property to which it desires to xlftise the option, together with a legal description of the same. (ii) The Lessee may only exercise the option with respect to (i) a Unit or Units in their entirety and not less than any Unit and (ii) any parcel that is platted as a common area in any common interest community ( "Common Area "). (iii) There shall not exist at the time of exercise, or at the time of closing, any Event of Default. (iv) The Unit(s) for which the option is being exercised shall be subject to a bonafide contract for the sale of the Unit(s) to a Qualified Buyer(s), with closing(s) scheduled within 90 days of the date of the exercise of the option and any Common Area for which the option is being exercised shall be conveyed to a homeowners association formed°for the purpose of maintaining the Common Area for the beriefiit of the Qualified Buyers. (b) County's Obligations Upon Receipt Of A Notice Of Exercise. The County shall use reasonable efforts to review each notice of exercise and to respond to Q.\Auerbach Southwest\Berry Crcck\LAND LEASE24 -02A 6 Last printed 3/11/02 8:55 AM Oc 03/11/2002 by: b( lylbti(1tJIzz =. btN1JtLUW LAW r1Km bb I'AUt 08 C, f I the notice within 5 business days. A closing for the purchase and sale of each Unit erect to a notice of exercise shall be scheduled at a date mutually agreed upon by the Lessee and the County manager, but in no event more than 10 business days after the notice of exercise. (c) Deliveries at Closinf;. At the closi" of the sale of each, Unit, the County shall execute and deliver to the Lessee (i) a general warranter deed warranting title to the Unit /Common Area, excluding any Improvements installed by Lessee, free and clear of all liens, encumbrances, easements, restrictions and agreements arising by, through or under the County, except those consented to or created at the request of the Lessee (ii) a partial release of the Unit/Cornmon Area from the provisions of this Lease, and (iii) any other documents customarily executed by a Seller. The Lessee shall deliver to the County the Lessee's purchase price of each Unit/Parcel of Common Area, which shall be equal to ten dollars for every Unit/Parcel of Common Area so purchased. The Lessee shall pay costs of all —title insurance ;premiums, recording fees, and other customary costs and charges of the closing. In the event that any real property taxes are assessed against any Unit, the Lessee shall take the property subject to such taxes or proration thereof and the County shall bear no responsibility for the payment of any such tax. The County shall obtain an exemption for any transfer tax or shall otherwise pay any ,transfer tax attributable to recording of the deed. The closing shall be held and delivery of ',all items shall be made at each closing according to the. terms of this agreement at such loca ion as the parties may mutually agree. (d) Condition of property. County makes no representation or warranty of any kid or character, whether express or implied, oral or written, with respect to (i) the value, nature, quality or condition of any Unit/Common ,Area, (ii) the suitability of any Unit/Common Area for any use contemplated thereby, (iii) the compliance of any Unit/Common Area with any laws, rules, regulations or ordinances of any applicable government body, or (iv) the Unit's / Common Area's habitability, merchantability, marketability, profitability or fitness for a particular purpose. The Units /Common Areas shall be sold in their AS IS condition existing on the date of closing. 9. Assignment and Suublettiug. No portion of this Lease or Lessee's right of possession shall be assigned or sublet by the Lessee without the prior written consent of the County, provided, however, that nothing in this section shall limit or restrict the Lessee's ability to (i) encumber or assigri its interest in this Lease as provided in Section 10 and any such encumbrance or any subsequent transfer of the Lessee's interest in this Lease as a result of an exercise of the remedies available to a Lender shall not require the - consent of the County, or (ii) assign this Lease to any entity that is a permissible assignee o ibe Development Agreement if assigned in conjunction with an assignment of the Development Agreement. Lessee, and its permitted successors, shall only be liable under the Lease for the period of its ownership of the leasehold estate. G:\Auerbaeh Soutbwest \Berry Creek\LAND C.8ASB2- 7- 02•doc 7 Last printed 3111/02 8:55 AM 03/11/2002 09:57 19708719911 BFNI)FLUW LAW I-1KM 5S PAGE 09 �. 10. Protect finaneine, The Lessee shall be entitled to obtain Project Fi aanciaog :and to assign its interest in this Lease, without the prior consent of the County, subject to the following terms and provisions: (a) Grant of Lien. IZxtmediately upon granting' arty deed of trust, collateral assignment or other security interest iz� this ,ease, Lessee shall provide to the County a copy of any deed of trust, assignment, or other security documents evidencing such lien or security interest. (b) Copy of Notices of Default. The County shall deliver to each Lewder any demand or notice, including, withoutlimitation any notice of an Event of Default, required to be sent by the County to the Lessee under this Lease. The County - :,shall transmit a copy of such demand or notice to each Lender at the last address of such Udlier, shown in the records of the County. All such notices shall be given in accordance with the provisions and in the time provided in the mariner specified in Section 13(a) hereof: (c) Lender's Option to Cure Defaults. After any Event of Default under this Lease, the Lender shall have the right, at its option (but not the obligation), to cure or remedy or to commence to cure or remedy any such default or Event of Default within 90 days following the cure period permitted for the Lessee as provided elsewhere in this Lease. In doing so, the Lender, or a receiver appointed by Lender, may enter the Property and perform, any duty, obligation or action required to be taken under this Lease or as may be necessary to preserve and protect the Improvements and the collateral given to secure the Project Financing. The County agrees, that so long as the Lender is exercising diligent and continuous efforts to for and obtain possession of the Property or to cure any default capable of being cured; that the County will not exercise its remedy to terminate this Lease (although it may exercise other remedies). Nothing contained in this provision shall be deemed to permit or authorize a Lender to undertake and continue the construction of the Project beyond the extent necessary to conserve or protect the Project or the Improvements in any -manner inconsistent with the - :Development Agreement, unless the Lenderr has first obtained the consent of the County. (d) . Lender Not Obligated to Construct. Notwithstanding any other provision of this Lease, a Lender (including a Lender or other person or entity who obtains title to any part of the Property or Improvements as a result of foreclosure proceedings, or deed in lieu thereof, and including any other party who thereafter obtains title to the Property or such part or through such Lender for such person or entity) shall not be obligated to construct or complete the Improvements, the Project or any part of them, or to guarantee such construction or completion. A Lender and such persons specified above and their respective successors in interests may, at their option, construct the Improvements and finish the Project. Lenders and their successors shall not be obligated to pay, perform or observe any of the obligations of Lessee under the Development Agreement. G:\A,uerbach Southwest \Berry Creek \LAND LRASE2- 7- 02.doc 8 Lmt printed 3111/02 8:55 AM 03/11/2002 09: bF 19 tub (19J22 btNLJtLUW LHW rIKM Sts rr�Ut lb } (e) Lender's Option to Extend Term. If a Lender should foreclose on Lessee's interest in the lease, the Lender shall have an option to extend the teen of this Lease for an additional ten (10) years. Lender may elect to do so by tendering written notice of its election to do so, in the manner provided herein, within 190 days of the date that Lender receives a public trustees deed, or an assignment of the Lease in lieu of :foreclosure. Upon the exercise of such option, County agrees to execute an amendment to this'Lease, in recordable forni, acknowledging the extended term of the Lease. (1) No Modification. County agrees and covenants to each Lender that, once it has received notice of any deed of trust or encumbrance to secure Project Financing, that no amendment, modification, termination or cancellation, or surrender of the Property shall be valid or enforceable without the prior written consent of Lender. (g) Non-Merger. This Lease shall.not merge into the fee estate, in the event that the fee and leasehold estates become combined in one person, during the team of any Project Financing. (h) County's Option to Cure Mortgae Default. The County may, at its option, and without any obligation, cure any defaults under any mortgage securing Project Financing. Each Lender—agrees to provide to the County written notice of any default under any such mortgage and to permit the County to cure any such default within 30 days after notice of default is given to the County. (i) County s Option to Pay lVZgAggge Debt. If, after an Event of --.,Default by the Lessee under this Lease, a Lender elects to exercise its remedies to io�ose upon the Property under the loan documents evidencing the Project Financing, the Lender shall give County notice of such intention The County shall have, for a period of ninety (90) days following such notice, the option of paying the Lender all amounts evidenced or secured by its loan documents and taking an assignment of the promissory notes(s) and mortgage(s) securing Project Financing, without recourse or warranty, upon payment to the Lender of all principal and interest (at the non - default rate), reasonable foreclosure expenses actually incurred, and the costs incurred by the Lender in preserving and protecting the Improvements. The County may exercise such option by tendering written notice of its intent to exercise the option to the Lender within such ninety (90) days. The closing of the assignment shall occur at a date (not more than twenty (20) days after the County's notice of exercise), time. and place (in Eagle County) as specified by the County in such notice. If the Cou,,raty does not exercise the above I option, then the Lender shall take title to the Property for that portion of the Property encumbered by its mortgage free and clear of the Development Agreement and the Lessee's obligation to sell Units only to Qualified Buyers subject to Deed Restrictions. In such event, the term "Qualified Buyer" shall mean any purchaser qualified by Lender or its successors and the Units may be sold without Deed Restrictions. _. 11. Events of Default/Remedites. Lessee shall be considered to be in default "s Lease by the occurrence of any one of the foll owing events ( "Event of Default" ): GAMerbaeh SouthwwABerry Creek\LANb LEASE24- 02.doc 9 Last printed 3/11102 8,55 AM rj.3 / lit zutuL rJ:3:ar IDIUar17JGL 13GIYLGLUW LAW t'INM 513 PAGE 11 • d (a) Lessee's failure to pay when due all or any portion of the rent or any other monetary sum due hereunder if not paid within ten days after written notice to Lessee. (b) Lessee's failure to (other than any monetary default) comply with any term, provision or covenant of this Lease, if the failure is not cured within 60 days after written notice to Lessee and each Lender, if any, however, if Lessee's failure cannot reasonably be cured within 60 days, Lessee shall be allowed additional time as is reasonably necessary to cure the failure so long as Lessee commences the cure and Lessee diligently and continuously pursues a course of action that will cure the failure and bring the Lessee back into compliance. (c) The occurrence of a major Material Event of Default under the Development Agreement. (d) If Lessee becomes insolvent, or files or has filed against it a __.petition for protection under the United States Bankruptcy Code, is dissolved, or is bg_y dated. Upon the occurrence of any Event of Default,. County shall have the right, without notice or demand, to pursue any remedy at law, or in equity, including a might of specific performance and/or damages; provided, however, the County shall not have the right to terminate this Lease based upon any Event of Default identified in subparagraph (c) above if, at the time of Event of Default; Lessee has granted a deed of trust, mortgage, lien, collateral assignment or security interest in this Lease to secure Project Financing. in no event shall Lessee be liable for consequential or punitive damages. 12. County's Default and Lessee's Remedies. County shall be considered in default of this Lease upon, County's failure to comply with any teams, provisions or covenants of this Lease if such failure is not cured with 30 days after written notice of the County, however, if County's failure to comply cannot reasonably be cured within such 30 days, County shall be allowed additional time as is reasonably necessary to cure such defaults so long as County commences the cure within such 30 days and is diligently and continuously pursuing a course of action that will cure such failure and bring the County back into compliance with this Lease. Upon any default, Lessee shall have all the rights and remedies at law and equity, including a right of specific Terformance and/or damages and/or the right to terminate this Lease, all of which mr Mies shall be cumulative. In addition, Lessee may elect to terminate this Lease if the County terminates the Development Agreement, provided that Lessee may not elect to terminate this Lease without the prior consent of any Lender. 13. Hazardous Substances. (a) As used herein, the term "Hazardous Substance" means any substance to -xic, ignitable, reactive, corrosive that is regulated by any local government, State of Colorado, or United States government, including any and all materials or G.\Auerbaeh Southwest\Berry Creek \LAND L1rASE2- 7- O2.doe 10 Last printed 3/11/02 5:55 AM UJ/ 11/ ZUUZ n .J: of t D r uo r L oacc - "�•• -r,,• substances that are defined as `hazardous waste' or `hazardous substance' pursuant to state, federal or local governmental laws. (b) Lessee shall not cause or permit any Hazardous Substance to be used, stored, generated or disposed of on or in the Property by the Lessee or Lessee's contractors, employees, or invitees in violation of any ordinances, rules and regulations or other legal requirements governing Hazardous Substances ( "Laws') without first obtaining Landlord's written consent, except for any Haz=y., -dous Substances that are ordinarily and commonly used in the construction and development industry in the -° construction and improvement of real property. If Hazardous Substances are used, stored bf�-,%enerated or disposed of by Lessee or Lessee's agents, employees, contractors or invitees on or in the Property, except as permitted above, Lessee shall indemnify, defend and hold County harmless from any and all claims, damages, fines, judgments, penalties, costs, liabilities or losses ( including, without limitation) any and all sums paid for good faith settlement of claim, attorneys fees, consultant and expert fees (arising during or after the Lease term and arising as a result of such contamination by Lessee. This indemnification includes, without limitation, any and all costs incurred because of any investigation of the site, any cleanup, removal or restoration mandated by a federal, state or local agency or political. subdivision. Without limitations of the foregoing; if Lessee causes or permits the presence of any Hazardous Substances at the Property and such action results in contamination, Lessee shall promptly, at its sole expense, take any and all necessary actions to return the Property to the Bond Lion existing prior to the presence of any such hazardous substance on the Property. Lessee shall first obtain County's approval for any such remedial action,, which shaltnot be unreasonably withheld, delayed or conditioned. (c) County hereby warrants that, to the best of its knowledge, there does not exist any hazardous substance in, at or under the Property. County shall not _cause or permit any hazardous substance to be used, stored or generated or disposed of on the Property by the County, its agents, employees, contractors, or invitees, without the prior written. notification of Lessee. County, at its sole cost and expense, shall be responsible for the removal, abatement and/or remediation of any Hazardous Substances now or hereafter located in, on or under the Property which were not introduced by Lessee or Lessee's employees, contractors, invitees or their respective agents or employees. if Hazardous Substances are stored, generated or disposed of on or at the Property or if the Property becomes contaminated as a result of any actions of County, its agents, employees, contractors or invitees, Landlord shall indemnify, defend and hold Lessee harmless from any and all claims, damages, fihes, judgments, penalties, costs and liabilities or losses (including without limitation, any and all sums paid for good faith settlement of claims, attorneys' fees, consultant and expert fees) arising during or after the Lease Term as a result of such contamination. 14. Bankruutcy. Berry Creek Limited Liability Co., was formed specifically for the Project and hereby covenants to the County and each Lender that it shall not engage in any business other than the development and sale of the Project. As such, berry Creek Limited Liability Co.. is a special purpose entity and that it unconditionally and 0:\A.uerbaeh Scuthwest\Berry Creek \LAND JXASr2- 7- 02.doc 1 "nted 3/11/02 8:55 AM iii/ 11l Lt7 t7'e I0�J: f l� f rio f 173LL Dr-riijGLl%W LHw r .Lmm DD r'HQr- 1.3 C I C) irrevocably waives the right provided under the U.S. Bankruptcy Code to reject this Lease. k the event that this provision is unenforceable, and Berry Creek Limited ;Liability Co. or a trustee rejects this Lease, the County agrees to enter into a new lease '-WI& the Lender on terms and provisions identical to those contained herein. 15. Miscellaneous. (a) Notices. All notices, communications, eonsenth, demands and other writings in this Lease provided to be given, made or sent, or which may be given, made or sent, by either party to the other, shall be deemed to have been fully given or made when made in writing (i) if given by hand. delovery, upon delivery, (ii) if sent by Federal Express or some nationally recognized overnight carrier, upon delivery, or (iii) if given by certified mail, then three business day after being deposited in the U.S. Mail, certified mail, return receipt requested, postage prepaid, to the address specified below, or to such other address as either party may provide by written notice to the other: COUNTY: Board of County Commissioners P.O. Box 850 500 Broadway '--- =� Eagle, CO 81631 ATTN: With a copy to: Eagle County Attorney P.O. Box 850 500 Broadway Eagle, CO 81631 LESSEE: Berry Creek Limited Liability Co. c/o ASW Realty 21820 Burbank Boulevard, Suite 120 Woodland Hills, CA 91367 Attention: Mark Ross With a copy to: Alan. M. Keefe, Esq. Bendelow Law Firm, P.C. 1120 S. Lincoln Ave., Suite 203 PO Box 773630 Steamboat Springs, CO 80477 G :\Auerbach-Southwest\Be" Creek\T.AND r.EA.SE2- ?- 02.doo 12 Las tprffiwd 3111/02 8 :55 AM 63/11/2002---= -q9: 57 1yj tub (1tidzz nruvLr.L-uw L-HW F.LUNM Ia I " — C < (b) Construction. The language used in this Lease and all parts hereof shall be construed as a whole according to the ordinary and fair meaning of the words contained herein and shall be liberally construed to accomplish the objectives of the parties hereto. This Lease shall not be construed strictly for nor against any party. All parties have participated in. the preparation of this Lease. Whenever required by context, the singular shall include the plural, the plural the sivaMar, and one gender shall include all genders. This Lease shall be governed by and construed in accordance with- the laws of the State of Colorado. (c) Required Consents. In all cases where the consent or approval of the other party is required in this Lease, such consent or approval shall not be unreasonably withheld, delayed or conditioned. --.� (d) Relationship of the Parties. Nothing contained in this Lease shall be deemed or construed as creating a relationship with the principal and agent or of a partnership or joint venture between the parties hereto, it being understood and agreed that neither the method of computing rent nor any other provisions contained herein nor any of the acts of the parties hereto shall be deemed to create any relationship between the parties other than that of landlord and tenant. (e) Brokers. County and Lessee each represent to one another that each has not dealt with any broker or any other person who could make a claim for a commission or fee on account of any alleged broker services or employment as a broker. Each party agrees to indemnify and hold the other I armless from any such claim. (fl Estoppel Certificates. Corty shall, from time to time, upon not less than five (5) business days prior written regltest by Lessee, execute, acknowledge and deliver to Lessee or to any Lender a, staten4ent acknowledging that this Lease is unmodified and is in full force and effect (or if t�ere have been modifications, that the same is in full force and effect as modified, stating the modification), and the date to which the rental and other charges have been paid in advance, if any, that no Event of Default has occurred (or if it has specifying the nature of the default) and containing any statements of fact reasonably requested by �essee and/or Lender and a certificate that such statements are true, accurate and completg. It shall be reasonable for a Lender to request that insurance and condemnation proceeds Ibe applied to repay Project Financing, notwithstanding anything contained in this lease to the contrary. It is intended that any such statement delivered pursuant to this section may be relied upon by any prospective assignee or Lender. If requested by the prospective assignee or Lender, the certificate shall include a non - disturbance agreement. (g) Subordination. County hereby agrees that this Lease shall be subject to and subordinate to any mortgage or deed of trust now or hereafter placed upon this Lease or Lessee's interest in this Lease for the purpose of securing the Project Financing and shall agree with any Lender that ` the sender's rights to possession of Property under this Lease shall not be disturbed as a result of any Event of Default by G:\,A,uerbach 5outhwest\Berry Creek \LAND LEA.SE2- 7- 02.doe 13 Last printed 3/11/02 8:55. AM 03/11/2002 09:bt 19tudI1tilIZZ mu ijr-L-uw uHw rimin ,n r-HVar- to i Lessee so long 'as the bender shall continue to Observe and perform, to the best of its ability, all of the obligations contained in this Lease. Furthermore, county aggress to join in and execute any deed of trust or mortgage given to secure the project Financing, and the County's fee interest shall be encumbered by essee's mortgage. .a (h) Arbitration. If a dispute arises out of or (elates to this Lease `( inquding, without limitation, any disputes regarding any consents or approvals required to be given by any party, herein or disputes over the existence of an Event of Default) or the breach thereof, and if the dispute cannot be settled through negotiations, the parties agree first to try it good faith to settle the dispute by non- binding mediation administered by the mediator mutually selected by the parties prior to resorting to binding arbitration. In the event that the parties cannot agree upon a mediator, the mediation shall be administered by the American Arbitration Aspogiation. If any such dispute cannot be resolved by the aforesaid mentioned mediation, the dispute shall be settled by binding arbitration administered by the American Arbitration Association under its commercial arbitration rules and judgment on the award rendered by the arbiter(s) may be entered in any court having jurisdiction thereof (i) Force Maieure: Time Of 11he ET, ssence: Whenever a period of time or specified date is herein prescribed for action] to be taken by either Party, there shall be excluded from the computation of any such period of time or an extension of such specified date, any delays due to strikes, riots, ac of terrorism, acts of God (excluding weather delays reasonably and historically known Ito occur, as defted by a ten (10) year average of the U.S. Meteorological Survey data,l or similarly and mutually acceptable data, in the geographical area of the Property), shortages of labor or materials outside of ,he. parameters typically found in the gepgrap�ical area of the Property, war, or goAnmental laws, regulations, restrictions �r mo- toriums (except to the extent waived or otherwise not applied to the Project or 4e Pro erty) and unforeseeable delays caused by the Project lender; provided, however, thl both parties shall use their best and diligent efforts to mitigate the effects of such occurrences with respect to the required action; provided, that reasonable coasts relating to suFh mitigation efforts shall be includable as an addition to the Projects Costs. Subject to ;the foregoing, time is of the essence with respect to each and every provision of this Agreement. (j) Attorneys Fees. in t#e eve�it of any legal action concerning the interpretation or enforcement of this Lease, the party that substantially prevails in such litigation or arbitration shall recover all of its costs and expenses, including, without .limitation, reasonable attorneys fees, from the party that-does not substantially prevail. (lc) Successors. This Lease is intended to be a perpetual burden and benefit on the parties hereto and to title to the Property. The. rights and obligations of the parties shall rust with the land, shall be binding upon and inure to the benefit of each and every successor in interest to the Property and any portion thereof. By acceptance of any interest in the Property, the parties and their successors agree to be bound by this Lease. o GAMerbach Southwest\Beuy CreeMLAND LEASP,2- 7- 02 -doc 14 Last printed 3111102 5:55 ,A 61 w yy r «uL Lj e i D r ria t 1 »ZL BENDELOW LAW FIRM SB PAGE 16 IN WZTMSS WHEREOF, the parties have executed this Lease to be effective as of the day and year first written above:" AT EST: Clerk to the Board of County Commissioners "County" COUNTY OF EAGLE, STATE OF COLORADO By, and Through Its B(?ARD OF COUNTY COM USSIONERS LE Michael Gallagher, Chairman "Lessee" Berry Creek Limited Liability Co. a Colorado limited ;liability company By: Manager STATE OF COLORADO ) COUNTY OF E )ss. AGLE ) The foregoing ;instrument was acknowledged before me this day of 20 , by Michael Gallagher, Chairman of and on behalf of Eagle County Board of County Commissioners_ Witness my hand and official seal. My commission expires: Notary Public G:\A.uerbarh Southwest\Berry Creek\LAND LEASE2- 7- 02.dor 15 P114 Lw primed 3/11/02 8:55 AM 03/11/2002 U!J: b ( 1 y (bti (1 yJ22 tstNIJtLUW LHW r INM Sts rfAat 1 f STATE DF ) )$S. COUNTY OF ) The foregoing instrument was acknowledged before me this day of 20 • by as Manager of and on behalf of Berry Creep Limited Liability Co., a Colorado limited liabibly company. Witness my hand and official seal. My commission expires: Notary Pu'Zc GAAuerbaeh Southwesfi3erry CreelAr AND LEASE2.742.doc 16 L.astprinrmd 3/11/02 6:55 AM 03/11/2002 09:57 1970811y822 6" -.o bLNVtLUW LAW r INN bn r B3GUIT A Legal Description Of Property G:\Auerbach Southwest\13erry Creek\T qNA LEASE2�7�02.doc 17 Last printed 3/11/02 8:55 AM J rmQm l o uj/ 11 / 11701 U'J: 5 t btNDLLUW LAW t' INN bb EXIBTT B Permitted Exceptions 0 -.a °a G:1Auerbach Southwest\Berry CreeklAND LEASE2- 7- 02.doc 18 Last printed, 3/11/02 8;55 .AM t't3Ut 1 y