Loading...
HomeMy WebLinkAboutDIA - Draft 06/12/07CONFIDENTIAL KKR DRAFT # 161121200 7 cW DEVELOPMENT IMPROVEMENT AGREEMENT by and between the TOWN OF VAIL, COLORADO, a Colorado home rule town, and [OPEN/HILLWOOD], a ( 1 organized under the laws of the State of [ ] C Dated as of [ 1, 2007 E DRAFT -13 6151-9 TABLE OF CONTENTS ARTICLE I DEFINITIONS 2 Section 1.01 Internal References 2 Section 1.02 Specific Terms 2 Section 1.03 Other Definitions 11 Section 1.04 Rules of Construction 11 Section 1.05 Exhibits 12 ARTICLE II PROJECT DESCRIPTION 12 Section 2.01 Selection and Engagement 12 Section 2.02 Project Description 12 Section 2.03 Schedule of Conveyance of Title and Interests in Project 14 Section 2.04 Development Terms 15 Section 2.05 Vested Property Rights 15 ARTICLE III PLANNING AND ENTITLEMENT PERIOD 15 Section 3.01 Term . 15 Section 3.02 Investigation, Design and Site Investigation . 15 Section 3.03 License to Enter and Access . 16 Section 3.04 Title Commitment . 17 Section 3.05 Survey . 17 Section 3.06 Lionshead Redevelopment Master Plan Amendment . 17 Section 3.07 Zoning Process and Entitlement Activities . 17 Section 3.08 Town Obligations During Planning and Entitlement Period . 18 Section 3.09 Developer Obligations During Planning and Entitlement Period.......... . 19 Section 3.10 Indemnification . 19 Section 3.11 Extension of Planning and Entitlement Period . 20 ARTICLE IV CONVEYANCE OF SITE AND CLOSING 20 Section 4.01 Closing 20 Section 4.02 Purchase Price 20 Section 4.03 Closing Conditions 21 Section 4.04 Parties Option to Extend Closing or to Terminate 23 Section 4.05 Certificates at Closing 23 Section 4.06 Title Company Notification 23 Section 4.07 Title 23 ARTICLE V CONSTRUCTION 24 Section 5.01 Generally 24 Section 5.02 Construction of the New Parking Structure 24 Section 5.03 Construction of Remaining Project Components 26 Section 5.04 Development Terms 27 Section 5.05 No Expense to Town 28 J DRAFT -36151-9 i ARTICLE VI CONFERENCE CENTER 28 CW Section 6.01 General Section 6.02 28 Ownership Section 6.03 28 Conference Center Board Section 6.04 28 Conference Center Services 28 ARTICLE VII FINANCING 28 Section 7.01 General 28 Section 7.02 Metropolitan District(s) Section 7.03 28 Supplemental Financing Section 7.04 29 Holder Not Obligated to Construct 29 Section 7.05 Copy of Notice of Default to Holder Section 7.06 30 Holder's Option to Cure Defaults Section 7.07 30 Rights of Lenders and Interested Partie Section 7.08 s 30 Miscellaneous 30 ARTICLE VIII LETTER OF CREDIT 31 Section 8.01 New Parking Structure Letter of Credit 31 Section 8.02 Garage LOC Characteristics Section 8.03 31 Drawing on the Garage LOC Section 8.04 32 Termination of Garage LOC 32 ARTICLE IX TOWN OBLIGATIONS AND COVENANTS 32 Section 9.01 Town Obligations After Closing 32 Section 9.02 Covenant to Maintain Improvements 33 ARTICLE X DEVELOPER OBLIGATIONS AND COVENANTS 34 Section 10.01 Developer Obligations After Closing 34 Section 10.02 Covenant to Maintain Private Improvements 35 Section 10.03 Plans, Reports, Studies and Investigations 35 Section 10.04 Commencement and Completion of Construction 36 Section 10.05 Developer's Affiliates 36 ARTICLE XI REPRESENTATIONS, AND WARRANTIES 36 Section 11.01 Developer Representations 36 Section 11.02 Town Representations 37 ARTICLE XII GENERAL COVENANTS, INDEMNITY AND RESPONSIBILITY........... 39 Section 12.01 Cooperation Section 12.02 39 Anti-Discrimination in Employment Section 12.03 40 Construction of the Project 40 Section 12.04 Vacation and Dedication of Rights of Way 40 Section 12.05 Town's Responsibility Section 12.06 40 Notification of Claim Section 12.07 40 Developer's Indemnification Section 12.08 40 Town's Indemnification Section 12.09 41 No Waiver of Governmental Immu it n y.................................................. 41 DRAFT -36151-9 ii ARTICLE XIII INSURANCE REQUIREMENTS 41 Section 13.01 Insurance Required Form Effective Date to Closing Date 41 Section 13.02 Insurance Required Form Closing Date to Date of Project Final Completion 42 Section 13.03 General Insurance Requirements 44 ARTICLE XIV EVENTS OF DEFAULT, REMEDIES AND TERMINATION 46 Section 14.01 Events of Default After Closing Date 46 Section 14.02 Default Notice 46 Section 14.03 Town's Option to Reenter and Repossess Portions of the Project.......... 47 Section 14.04 Developer's Remedies 48 Section 14.05 Termination by the Town Prior to Closing Date 48 Section 14.06 Termination by Developer Prior to Closing Date 49 Section 14.07 Option to Terminate 49 Section 14.08 Action to Terminate 49 Section 14.09 Effect of Termination 49 Section 14.10 Scheduled Termination 49 Section 14.11 Survival After Termination 49 ARTICLE XV RESTRICTIONS ON ASSIGNMENT AND TRANSFER 50 Section 15.01 Representations as to Development 50 Section 15.02 Limitation on Assignment 50 Section 15.03 [Effect Upon Obligations 51 / ARTICLE XVI MISCELLANEOUS 51 . Section 16.01 Amendment of Agreement 51 Section 16.02 No Implied Waiver 51 Section 16.03 Notices 51 Section 16.04 Waiver 52 Section 16.05 Attorneys' Fees 53 Section 16.06 Conflicts of Interest 53 Section 16.07 Titles of Sections 53 Section 16.08 Town Not a Partner; Developer Not Town's Agent 53 Section 16.09 Applicable Law; Venue 53 Section 16.10 Binding Effect 53 Section 16.11 Further Assurances 53 Section 16.12 Severability 53 Section 16.13 Good Faith; Consent or Approval 54 Section 16.14 Counterparts 54 Section 16.15 Non-Liability of Town Officials and Employees 54 Section 16.16 Incorporation of Exhibits 54 Section 16.17 Jointly Drafted; Rules of Construction 54 Section 16.18 Brokers 54 Section 16.19 Non-Discrimination 54 Section 16.20 Confidentiality of Materials 55 Section 16.21 Effectiveness: Complete Understanding DRAFT -36151-9 iii Section 16.22 Time of the Essence Section 16.23 Covenants Running With the Land....... Section 16.24 Recording EXHIBIT A [Site Description] EXHIBIT B [Site Map] EXHIBIT C [New Parking Structure] EXHIBIT D [East Lodging] EXHIBIT E [West Lodging] EXHIBIT F [Retail Street] EXHIBIT G [Transportation Center] EXHIBIT H [Conference Center] EXHIBIT I [Information Center] EXHIBIT J [Replacement Facilities] EXHIBIT K [Retail Development] EXHIBIT L [Alternate Winter Parking Plan] EXHIBIT M [Site Plan] O • 55 56 56 DRAFT -36151-9 iv DEVELOPMENT IMPROVEMENT AGREEMENT I THIS DEVELOPMENT IMPROVEMENT AGREEMENT (this "Agreement") is dated as of 2007 (the "Effective Date"), and is entered into by and between the TOWN OF VAIL, COLORADO, a Colorado home rule town, with offices at 75 South Frontage Road, Vail, Colorado 81657 (the "Town") and [OPEN/HILLWOOD], a [ organized under the laws of the State of [ ("Developer"), located at upon the terms and conditions set forth below. The Town and Developer may be referred to hereinafter collectively as the "Parties" and each individually as a "Party." Recitals Capitalized terms used in these Recitals have the meanings set forth in Section [1.01] of this Agreement. This Agreement is made with respect to the following facts: A. The Town is the owner of certain real property commonly referred to as the Lionshead Parking Structure (the "Existing Garage"), located in the Town of Vail, Colorado, as described on Exhibit [_I hereto (the "Site"). The Site is owned by the Town and consists of approximately 6.6 acres, on which the Town currently operates the Existing Garage, which is a 1,150 space public parking structure. The Site also includes an unimproved charter bus parking lot located at 395 South Frontage Road in Vail, Colorado. The Site is legally described on [Exhibit A] hereto, which is made a part hereof, and is as depicted on the "Site Man," attached as [Exhibit B] hereto, which is made a part hereof. The Site is located in the Lionshead Plan Area. B. On May 10, 2006, the Town issued its "Request for Proposals: To redevelop existing parking structure in Vail, Colorado as a mixed use development providing over 1,150 public parking spaces" (the "RFP") for the potential redevelopment of the Existing Garage. Developer was one of two entities to respond to the RFP. As the result of this process, on March 13, 2007, the Town Council authorized the staff to begin a 120 day period of exclusive negotiations with Developer for the redevelopment of the Site. C. The Town, in preparing the RFP, identified certain goals for the Site, including, but not limited to the following: i) the existing parking structure needs both capital and operational improvements and the Town needs an additional 400-500 additional public parking spaces to minimize overflow parking on South Frontage Road to 15 days per winter season; ii) redevelopment of the Site should include retail on the south side, as called for in the Lionshead Redevelopment Master Plan, and pedestrian, transit, and vehicular circulation needs to be improved between the Site and the Lionshead retail area; iii) the Lionshead information center needs to be improved; iv) the Town has a strong preference for "hot beds"; v) the development of meeting/event/conference facilities accessory to hotel and lodging uses; vi) to provide loading and delivery for uses created on the Site, which can also be used by adjacent Lionshead retail uses; vii) siting a Lionshead transit facility on the Site to accommodate 5 buses for regional bus traffic; and viii) making South Frontage Road improvements consistent with the Lionshead Redevelopment Master Plan and acceptable to the Colorado Department of Transportation. D. As proposed by the Developer, thq Project will address the several components above and identified by the Town in the RFP. The RFP Response proposed: i) replacement of DRAFT -136151-9 1 the current parking facility with a new underground parking facility having approximately 1,500 public parking spaces for skiers, including approximately 140 short-term skier drop-off/retail stalls, with a total of 1,800 parking spaces overall; ii) a retail oriented pedestrian street; iii) a fully integrated transportation center with 5 ECO Bus/ Town Shuttle Bus bays and local day skier drop-offs; iv) a conference center; v) a new roundabout and frontage road improvements; vi) a new Town information center; vii) on-site replacement of the VRD Recreation Center and Colorado Mental Health Offices; viii) two new hotels, with approximately [250] guest rooms, [100] residential units, and [30] fractional fee units allocated between the two hotels; and ix) two levels of approximately 60,000 square feet of retail space. E. The Parties intend that the new parking structure and related public improvements will be owned, operated and maintained by the Town or a metropolitan district (with the exception of approximately 300 privately owned parking spaces related to the hotels, condominium units and fractional fee units), but would be constructed by the Developer at the Developer's expense. The Parties intend that the hotels and retail space will be owned by Developer, and will be constructed by the Developer at the Developer's expense. F. In consideration for Developer's services to be performed under this Agreement, Town is willing to convey its interest in the Site to Developer, which will include the Private Improvements. In consideration for Town's conveyance of the Private Improvements to Developer, Developer is willing to perform the services under this Agreement and to convey back to the Town, and/or a Metropolitan District, any interest it has in the areas of the Site where the new parking structure will be located, and the other public improvements, all in accordance with this Agreement. G. The Parties now desire to enter into this Agreement to set forth the rights, obligations and method of participation of the Parties with respect to the development of the Project on the Site. Agreement NOW, THEREFORE, in consideration of the covenants and agreements of the Parties as hereinafter set forth, and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by each Party hereto, the Parties agree as follows: ARTICLE I DEFINITIONS Section 1.01 Internal References. Unless otherwise stated, references in this Agreement to Sections, subsections, or Exhibits are to this Agreement. Section 1.02 Specific Terms. As used herein, the following terms shall have the following meanings: "Affiliate" or "affiliate" means, with respect to Developer, (i) any other Person, which, directly or indirectly, controls or is controlled by, or is under common control with, Developer ("control," including with correlative meanings, the terms "controlled by" and "under common 4, control with," shall have the meaning given to the term "Control" in this Section 1.02) and (ii) as DRAFT -136151-9 2 applicable, any investment funds or vehicles, however organized, owned or managed by Developer or any of its Affiliates. "Agreement" means this Development Improvement Agreement including the exhibits attached hereto, as such Agreement may be amended or supplemented from time to time in writing by the Parties. "Alternative Parking Plan" means parking alternatives to accommodate peak, winter season ski-traffic parking demand, as set forth on Exhibit [I hereto. "Approved Uses" means those land use entitlements, improvements and uses thereof which are approved under the Lionshead Redevelopment Master Plan, as amended in accordance with the terms and conditions of this Agreement and the Municipal Code, including but not limited to, the entitlement to construct and develop the Project. "Business Day" means any day that is not a Saturday, Sunday or federal or State holiday. "CDOT" means the Colorado Department of Transportation. "Closing Conditions" shall have the meaning given to it in Section [4.03] of this Agreement. "Closing Date" means the date on which the Closing occurs, which Closing Date may be extended in connection with an extension of the Planning and Entitlement Period made in accordance with the terms of Section [4.10] of this Agreement or in accordance with Section [5.04] of this Agreement. As of the Effective Date the Parties intend for the Closing Date, prior to any extensions, to occur on [ Notwithstanding anything in this Agreement to the Contrary, in no event may Closing occur later than [ "Closing" means the occurrence of the Parties having met each of the Closing Conditions set forth in Section hereof, and having provided documentation and evidence thereof, which Closing shall occur on the Closing Date. "Colorado Open Records Act" means Title 24, Article 72, Sections 101 through 309 of the Colorado Revised Statutes, as the same may be amended from time to time. "Commencement of Construction" means, with respect to any phase of the Project or portion thereof, Developer's commencement of physical construction, including demolition, significant site grading or preparation of the Improvements to be constructed by Developer in such phase or portion thereof with the intention to continue the work until such Improvements are completed. "Conference Center" means a center for visual and performing arts with over 30,000nsf of community-focused visual arts, performing arts and meeting spaces, as [depicted and described] on Exhibit hereto. The Conference Center is a Public Improvement. "Conference Center Board" shall have the meaning given to it in Section of this Agreement. DRAFT -136151-9 2 "Construction Contractors" means any contractors or subcontractors with whom Developer enters into a Construction Contract to perform work on the Site or Project. "Construction Contracts" means any agreements entered into between Developer and any Construction Contractor that set forth terms governing construction on the Site or Project. "Construction Phase" means, if the Closing Conditions have been met and Closing has occurred, a period of time beginning on the Business Day following the Closing Date and ending on the Date of Project Final Completion, during which development and construction of the Project will occur. "Control" means, for any Person other than the Town, (a) the legal or beneficial ownership of more than thirty-five percent (35%) of the voting stock, limited liability company membership interests, partnership interests, capital or profits of the Person in question; or (b) the possession, directly or indirectly, of the right or ability, whether or not exercised, to direct or cause the direction of the management and policies of the Person in question, whether through the ownership of voting stock, limited liability company membership interests, partnership interests, capital or profits or by contract or otherwise. A Person shall be deemed to control another person if such Persons are under common control. Two (2) or more Persons shall be under common control if thirty-five percent (35%) or more of the capital, voting or profit interests in each Person are held by a single Person or a single group of two (2) or more Persons.] "Control District" shall have the meaning given to it in Section of this Agreement. "Conveyance Price" means, the good and valuable consideration provided to Town by Developer in accordance with this Agreement, including but not limited to Developer's commitment to develop the Project, taking into account Developer's agreement to undertake the obligations set forth in this Agreement. "County" means the county of Eagle, Colorado. "Date of Project Final Completion" means the date on which both the Date of New Parking Structure Final Completion and the Date of Remaining Project Components Final Completion have occurred. "Date of New Parking Structure Final Completion" means with respect to the New Parking Structure, the completion by Developer or its Construction Contractors of all or substantially all of the New Parking Structure Improvements, including Phase I, Phase II, Phase III and Phase IV, to be constructed or performed in accordance with this Agreement, and when applicable, the receipt of a certificate of occupancy from the Town. The Parties intend for the Date of New Parking Structure Final Completion to be [September 1, 2011 as such date may be extended in accordance with the terms hereof. [In no event shall the Date of New Parking Structure Final Completion be more than 365 days after the date on which the New Parking Structure TCO is received.] "Date of Remaining Project Components Final Completion" means with respect to the (aw Remaining Project Components, the completion of construction by Developer or its Construction Contractors of all or substantially all of the Improvements to the Remaining Project Components, DRAFT -136151-9 4 to be constructed or performed in accordance with this Agreement, and when applicable, the receipt of a certificate of occupancy for all of the Remaining Project Components from the Town. In no event shall the Date of Remaining Project Components Final Completion be more than 365 days after the date on which the last Remaining Project Components TCO is received. "Day" or "day", when used without modification, means any day of the week, whether or not a Business Day. "Default Notice" shall have the meaning given to it in Section [of this Agreement. "Developer" means [OPEN/HILLWOOD], a [ organized under the laws of the State of [ located at [ "Developer's Certificate" means the certificate delivered to the Town by the Developer at Closing, which states that all of the representations and warranties of the Developer made in this Agreement are true and correct as of the Closing Date as if made on the Closing Date, and that the Developer has satisfied each of the Closing Conditions set forth in Sections [4.03(u) through 4.03(y)] of this Agreement. "Developer's Proprietary Information" means the following information of Developer, and its Affiliates and marked as such: (i) know-how and trade secrets; (ii) information reasonably identified by Developer or its Affiliates from time to time as confidential; (iii) personnel information; (iv) information that should be treated as confidential under the circumstances surrounding its disclosure including sales and marketing information and account information; and (v) information which could cause'competitive harm to Developer or any of its Affiliates relating to other projects of Developer or its Affiliates, and other proprietary information relative to the operating methods, procedures and policies distinctive to other projects of Developer or its Affiliates, including without limitation, the contents of the Developer's operating manuals, and all commercial or financial information (including without limitation, all expenses, calculations and apportionments) relating thereto. "DRB" means the Design Review Board of the Town, as set forth in the Municipal Code. "East Lodging" means one of the first class hotels, which will share a portion of the Lodging's guest units, residential units and/or fractional fee units, as [depicted and described] on Exhibit [ ] hereto. The East Lodging is a Private Improvement. "Effective Date" means the date set forth in the opening paragraph of this Agreement. "Engineer" shall have the meaning given to it in Section [3.05] of this Agreement. "Environmental Laws" means all federal, state and local environmental, health and safety statutes, as may from time to time be in effect, including but not limited to the Resource Conservation and Recovery Act (as amended by the Hazardous and Solid Waste Amendments of 1984), 42 U.S.C. § 6901, et seq.; the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (as amended by the Superfund Amendments and Reauthorization Act of 1986), 42 U.S.C. § 9601, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. § 1801, et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601, et seq.; the Clean Air Act, 42 DRAFT -136151-9 5 U.S.C. § 7401, et seq.; the Safe Drinking Water Act, 42 U.S.C. § 300h, et seq.; the Clean Water Act, 33 U.S.C. § 1251, et seq.; all applicable state counterparts to such federal legislation and any regulations, guidelines, directives or other interpretations of any such enactment, all as amended from time to time, or any other applicable State or Federal environmental protection law or regulation. "Event of Default" shall have the meaning given to it in Article ] of this Agreement. "Existing Garage" means the current 1,150 space parking structure, owned and operated by the Town, located at 395 South Frontage Road, Vail, Colorado, in the Lionshead Plan Area. "Force Majeure" means any of the following occurrences if beyond the reasonable control of the Person in question (but specifically excluding causes related to the delayed Party's financial condition or unavailability of funds): (a) strike, lock-out or other labor troubles; (b) governmental restrictions or limitations, including, without limitation, the requirements, restrictions or limitations of environmental laws; (c) failure or shortage of electrical power, materials, gas, water, fuel oil, or other utility or service; (d) riot, war, terrorist act, insurrection or other national or local emergency; (e) accident, flood, fire or other casualty; (f) extraordinarily adverse weather conditions; (g) any temporary disruption of the United States or global financial markets or banking systems, due to natural disaster, terrorist act or otherwise, which prevents a Party from accessing such markets or causes a temporary inability to access funds; (h) other act of God, or (i) any other extraordinary cause or event beyond the reasonable control of the Person in question. "Garage LOC" means an irrevocable letter of credit with an initial term of [at least one year] issued pursuant to this Agreement in favor of the Town by a bank, trust company or other financial institution, which will have a short-term rating in the highest short-term rating categories (without regard to any numerical or other qualifiers thereto) of both Moody's and S&P; or a long-term rating in one of the two the highest long-term rating categories (without regard to any numerical or other qualifiers thereto) of either Moody's and S&P and a long-term rating in one of the three highest long-term rating categories (without regard to any numerical or other qualifiers thereto) of both Moody's and S&P, or by such other entity as will shall be approved in writing by the Parties. "Holder" means the owner of the Mortgage. "Improvements" means all Public Improvements and the Private Improvements [IS THERE ANOTHER CATEGORY]. "Information Center" means a new Town information center to be located next to the short term parking, as [depicted and described] on Exhibit [-j hereto. The Information Center is a Public Improvement. "Lionshead Redevelopment Master Plan" means the Lionshead Redevelopment Master Plan, which is the Town's official planning document for guiding the redevelopment of the Lionshead area, and which is part of the Vail Comprehensive Plan, adopted by the Town Council in 1999. DRAFT -136151-9 6 "Lionshead Plan Area" means the area identified as the "Plan Area" in the Lionshead Public Facilities Investment Plan, as amended. "Lionshead Public Facilities Investment Plan" means the Lionshead Public Facilities Master Plan, as approved by the Town Council on March 16, 2004, as amended by the Amended Lionshead Public Facilities Investment Plan, approved by the Town Council on June 7, 2005. "Lodging" means, collectively, the East Lodging and the West Lodging, which will have a combined total of approximately [250] guest units, approximately [100] residential units and approximately [30] fractional fee units, as [depicted and described] on Exhibit hereto. "[Master Plan]" means one or more official development plan(s) (individually or collectively) for the Site and the Project to be approved by the Town, in accordance with the Municipal Code and the terms and conditions of this Agreement, and which shall have been approved by the Town on or before the Effective Date and recorded in the County's real property records in accordance with the Municipal Code. [The [Master Plan] will establish the development parcels, land use entitlements for the uses, density and intensity of development, building footprints and elevations, design standards, and other development terms and conditions for the Project. The [Master Plan] will also include a conceptual development plan for the Site and Project that is consistent with this Agreement, including design guidelines, proposed re- zoning plans, planning and development documents, a phasing plan for construction, allowable ranges of Project density, a development phasing strategy, and other general development parameters. The Parties acknowledge that the [Master Plan] shall include design standards that meet or exceed site planning and design criteria of the Town and that have been mutually agreed to by the Parties during the Town's planning, permitting and zoning process. The [Master Plan] may also propose a structure for community governance which shall include one or more master community associations and other subordinate community associations or other common ownership style associations, appropriate covenants and the means by which such issues can be managed, enforced, funded and amended. The [Master Plan] includes the Site Plan and a description of the Alternative Parking Plan.] "Metropolitan Districts" shall have the meaning given to it in Section of this Agreement. "Moody's" means Moody's Investors Service, Inc., its successors and assigns, and, if Moody's Investors Service, Inc. will for any reason no longer perform the functions of a security rating agency, "Moody's" will be deemed to refer to any other nationally recognized securities rating agency designated by the Town. "Mortgage" means any mortgage or deed of trust conveying an interest in the Project for the purpose of securing a debt or other obligation. "Mortgage Company" means [ "Municipal Code" means, collectively, the Vail, Colorado Town Code and the Town's home rule Charter, as each may be amended from time to time. DRAFT -136151-9 7 `gyp k 3°a t, "New Parking Structure" means the new underground parking structure that will replace the Existing Garage with 1,877 new parking stalls, of which 1,513 will be public spaces for on- site public skier parking, including 142 short-term skier drop-offiretail stalls, [but excluding approximately 300 spaces relating to the Lodging to be privately owned and operated], as such New Parking Structure is [depicted and described] on Exhibit hereto. The New Parking Structure is a Public Improvement. "New Parking Structure TCO" means a certificate or certificates, as applicable, issued by the Town that permit legal and beneficial occupancy, operation and use of the New Parking Structure without interruption for its intended purposes, which certificate or certificates may be issued with or without qualification so long as any qualification will not prohibit, restrict or impair such occupancy, operation or use. "Party" and "Parties" shall have the meaning given to such terms in the opening paragraph of this Agreement. "Permitted Exceptions" means the permitted exceptions to title that are listed on Exhibit which shall be attached hereto and made a part hereof on or before the Closing Date. "Person" or "person" means a natural person, a trustee, a corporation, a partnership, a limited liability company and any other form of legal entity. "Phase I" means the period of time intended by the Parties to last from [April 1, 2008] to [December 1, 2008], as such date may be extended in accordance with the terms hereof, during which the first phase of construction of the New Parking Structure shall occur, which includes reconfiguration of the Existing Garage. "Phase II" means the period of time intended by the Parties to last from [April 1, 2009] to [December 1, 2009], as such date may be extended in accordance with the terms hereof, during which the second phase of construction of the New Parking Structure shall occur. "Phase 111" means the period of time intended by the Parties to last from [April 1, 2010] to [December 1, 20101, as such date may be extended in accordance with the terms hereof, during which the third phase of construction of the New Parking Structure shall occur, at which point the Parties intend to have obtained the New Parking Structure TCO. "Phase IV" means the period of time intended by the Parties to last from [April 1, 2011] to [September 1, 2011], as such date may be extended in accordance with the terms hereof, which the Parties intend to be the Date of New Parking Structure Final Completion, and during which phase the fourth and final finishing phase of construction of the New Parking Structure shall occur. "Planning and Entitlement Period" means the period of time that begins on the Effective Date and ends on the Closing Date, during which Developer will engage in Site Investigation and certain pre-construction, planning, design, entitlement, drafting and financing activities, as such period of time may be extended in accordance with the terms of this Agreement. "Plans" shall have the meaning given to it in Section I of this Agreement. DRAFT -136151-9 8 Ni4 "Private Improvements" means the Lodging and the Retail Development. "Project" means the Public Improvements and the Private Improvements to be constructed on the Site. "Public Improvements" means the New Parking Structure, the Retail Street, the Transportation Center, the Conference Center, the Road Improvements, the Information Center, Replacement Facilities [and appropriate connections including infrastructure, superstructure, shared elevators, access, security [ and other integrated components.] "Remaining Project Components" means all of the Private Improvements and the Public Improvements, except the New Parking Structure. "Remaining Project Components TCO" means a certificate or certificates, as applicable, issued by the Town that permit legal and beneficial occupancy, operation and use of each of the Remaining Project Components without interruption for each of its intended purposes, which certificate or certificates may be issued with or without qualification so long as any qualification will not prohibit, restrict or impair such occupancy, operation or use. "Replacement Facilities" mean the on-site replacement of the VRD Recreation Center and Colorado Mental Health Offices, as [depicted and described] on Exhibit hereto. The Replacement Facilities are a Public Improvement. "Retail Development" means the two levels of retail space, totaling approximately 60,000 square feet of retail space, as [depicted and described] on Exhibit hereto. The Retail Development is a Private Improvement. "Retail Street" means a retail oriented pedestrian street envisioned as a public oriented extension of the Lionshead core area streetscape improvements, as [depicted and described] on Exhibit hereto. The Retail Street is a Public Improvement. "Reverter Notice" shall have the meaning given to it in Section of this Agreement. "RFP" means the "Request for Proposals: To redevelop existing parking structure in Vail, Colorado as a mixed use development providing over 1150 public parking spaces" issued by the Town on May 10, 2006, for the potential mixed-use redevelopment of the Existing Garage. "RFP Response" means the proposal and presentation submitted by [OPEN/HILLWOOD] to the Town Council on [ I entitled "The Open Hospitality Partners and Hillwood Capital [Open/Hillwood] Partnership Vail Resorts, Inc. Presentation." "Road Improvements" means a new roundabout and improvements to South Frontage Road, as [depicted and described] on Exhibit hereto. The Road Improvements are a Public Improvement. "S&P" means [Standard and Poor's Ratings Group, a Division of McGraw Hill, Inc.], its successors and assigns, and, if [Standard and Poor's Ratings Group, a Division of McGraw Hill, Inc.] will for any reason no longer perform the functions of a security rating agency, "S&P" will DRAFT -136151-9 9 be deemed to refer to any other nationally recognized securities rating agency designated by the Town. "Service Plans" shall have the meaning given to it in Section of this Agreement. "Site" shall have the meaning given to it in the Recitals of this Agreement. "Site Investigation" means the investigation, pre-construction, planning, design, entitlement, drafting and financing activities work within the Site that is necessary before Developer begins Commencement of Construction, which includes but is not limited to performing surveys, testing and inspections, [ I. "Site Map" means the depiction of the Site set forth on Exhibit hereto. "Site Plan" means the conceptual site plan attached hereto as Exhibit [_J, which is intended to illustrate the general pattern of development contemplated for the Project. ["Site Work" means the preparation and pre-construction work within the Site that is necessary to enable the construction and operation of the Project, which includes but is not limited to all rough and finish grading (including compaction), surveys, testing and inspections, temporary facilities and staging, wet and dry utilities (water, sanitary sewer, storm sewer, electrical distribution, lighting, telephone, natural gas, cable TV), paving, curbs, striping and signage, public amenities, wetland and drainage work, graphics and monumentation and environmental work.][WILL THERE BE PHYSICAL PREPERATION OF SITE BEFORE CLOSING?] , "State" means the State of Colorado. ["Subsequent Phases" means subsequent phases of the Project after Phase I of the New Parking Structure, which may be one or more phases or subphases for the New Parking Structure and the Remaining Project Components, [as described in Exhibits [_I and "Survey" means the survey for the Site to be provided by Town to Developer on or before the Closing Date, as further described in Section [4.08] below. "Title Commitment" means a current ALTA owner's title insurance commitment for the Site issued by the Title Company. "Title Company" means "Town" shall have the meaning given to it in the opening paragraph of this Agreement. "Town Certificate" means the certificate delivered to Developer by the Town at Closing, which states that all of the representations and warranties of the Town made in this Agreement are true and correct as of the Closing Date as if made on the Closing Date, and that the Town has satisfied each of the Closing Conditions set forth in Sections [4.03(a) through 4.03(t)] of this Agreement. DRAFT -136151-9 10 "Town Council" means the [Vail Town Council, as duly elected, appointed or serving in accordance with the Town Charter and ordinances]. "Transportation Center" means a fully integrated transportation center with five ECO Bus/Town Shuttle Bus bays and local day skier drop-offs. The Transportation Center is a Public Improvement. "West Lodging" means one of the first class hotels, which will share a portion of the Lodging's guest units, residential units and/or fractional fee units, as [depicted and described] on Exhibit hereto. The West Lodging is a Private Improvement. "Year" or "year", when used without modification, means any consecutive 365 day period of time. Section 1.03 Other Definitions. Any other term to which meaning is expressly given in another section of this Agreement shall have such meaning. Section 1.04 Rules of Construction. (a) Except as specifically provided herein, any approval, consent, permission, submittal or authorization contemplated under this Agreement by the Town and/or Developer shall be given in advance and in writing, and any consent, approval, permission or authorization shall apply only in the instance given. (b) Except as specifically provided herein, any and all approvals, consents, permissions or authorizations contemplated in this Agreement shall not be unreasonably withheld, delayed or conditioned. In any section of this Agreement that requires Town approval for a particular activity, action, plan or other item, unless otherwise provided, if the Town has not notified Developer within twenty (20) Business Days of Town's receipt of Developer's request for approval of such activity, action, plan or other item of its approval or disapproval of such activity, action, plan or other item, then such activity, action, plan or other item is deemed approved. Delivery of a notice to Developer executed by the Director purporting to provide approval or disapproval of any particular activity, action, plan or other item provided for hereunder may be relied upon by Developer as conclusive evidence of such approval or disapproval by the Town. (c) The Recitals are made part of this Agreement. (d) A term defined in this Agreement that includes one or more items, when used, shall mean all or one or more of those items. (e) A term defined in this Agreement that means or refers to an agreement, writing or statute shall mean and refer to that agreement, writing or statute as amended, modified, substituted for or replaced from time to time, but only if and to the extent that such amendment, modification, substitution, or replacement is permitted under, and made in accordance with this Agreement. DRAFT -136151-9 11 4W (f) Whenever in this Agreement there is a day or time period established for performance and such day or the expiration of such time period is not a Business Day, then such time for performance shall be automatically extended to the following Business Day. (g) The headings of the sections, subsections, paragraphs and subparagraphs hereof are provided herein for and only for convenience of reference, and shall not be considered in construing their contents. (h) As used herein, all references made (i) in the neuter, masculine or feminine gender shall be deemed to have been made in all such genders, (ii) in the singular or plural number shall be deemed to have been made, respectively, in the plural or singular number as well, and (iii) to any sections, subsections, paragraphs or subparagraphs shall be deemed, unless otherwise expressly indicated, to have been made to such sections, subsections, paragraphs or subparagraphs of this Agreement. (i) The words "including" and "includes," and words of similar import, shall be deemed to be followed by the phrase "without limitation." Section 1.05 Exhibits. EXHIBIT A EXHIBIT B EXHIBIT C EXHIBIT D EXHIBIT E EXHIBIT F EXHIBIT G EXHIBIT H EXHIBIT I EXHIBIT J EXHIBIT K EXHIBIT L EXHIBIT M [Site Description] [Site Map] [New Parking Structure] [East Lodging] [West Lodging] [Retail Street] [Transportation Center] [Conference Center] [Information Center] [Replacement Facilities] [Retail Development] [Alternate Winter Parking Plan] [Site Plan] ARTICLE II PROJECT DESCRIPTION Section 2.01 Selection and Engagement. On March 13, 2007, after the conclusion of a year-long RFP process, the Town Council authorized an exclusive 120-day negotiation period with Developer for the redevelopment of the Site. This Agreement is the result of such negotiations, and sets forth the basic terms and conditions of the Project, and the rights and obligations of the Parties. The Town hereby formally selects and designates Developer as the developer of the Project on the Site, and engages Developer to develop, plan, construct and implement the Project, or cause the same to occur, including the construction of specified Public Improvements and Private Improvements. Section 2.02 Project Description. The Project will consist of new underground parking facility, a retail oriented pedestrian street, a fully integrated transportation center, a conference DRAFT -136151-9 12 center, a new roundabout and frontage road improvements, a new Town information center, replacement of the VRD Recreation Center and Colorado Mental Health Offices, two new lodging centers and two levels of retail space, all as shown more particularly on the Site Plan. The Project will be developed in accordance with the [Master Plan], and will include the Public Improvements and the Private Improvements, as described below. Subject to the satisfaction of the Closing Conditions, Town and Developer will convey certain interests in the Site, and certain interests in surface, subsurface and above ground areas of the Site, as described in Section 2.03 below. After the Closing, Developer will employ commercially reasonable efforts to develop the Project by causing the Improvements to be constructed in accordance with the Site Plan, and in accordance with applicable laws and regulations (including, without limitation, the Municipal Code and the Environmental Laws). Additional details of the Project are set forth in the [Master Plan], which is attached hereto as Exhibit (a) Public Improvements. The Public Improvements will be developed, planned and constructed by Developer, or the Developer will cause the same to occur. All Public Improvements will be designed and built subject to the requirements of the Town, and the Town shall have the right to approve the design and final construction drawings for all Public Improvements. The Public Improvements may be legally owned and described as separate parcels, or as a single parcel, in the Town or Metropolitan District's discretion, as appropriate. The "Public Improvements" will include the following components: (i) replacement of the Existing Garage with a new underground parking structure, including 1,877 new parking stalls, of which 1,513 will be public spaces for on-site public skier parking, including 142 short-term skier drop-off/retail stalls, [but excluding approximately 300 spaces relating to the Lodging to be privately owned and operated], as such New Parking Structure is [depicted and described] on Exhibit hereto (the "New Parking Structure"); (ii) a retail oriented pedestrian street envisioned as a public oriented extension of the Lionshead core area streetscape improvements, as [depicted and described] on Exhibit hereto (the "Retail Street"); (iii) a fully integrated transportation center with five ECO Bus/Town Shuttle Bus bays and local day skier drop-offs, as [depicted and described] on Exhibit hereto (the "Transportation Center"); (iv) a center for visual and performing arts with over 30,000nsf of community-focused visual arts, performing arts and meeting spaces, as [depicted and described] on Exhibit hereto (the "Conference Center"); (v) a new roundabout and improvements to South Frontage Road, as [depicted and described] on Exhibit I hereto (the "Road Improvements"); (vi) a new Town information center to be located next to the short term parking, as [depicted and described] on Exhibit [I hereto (the "Information Center"); and DRAFT -136151-9 13 (vii) on-site replacement of the VRD Recreation Center and Colorado Mental Health Offices, as [depicted and described] on Exhibit hereto (the "Replacement Facilities"). (b) Private Improvements. The Private Improvements will be developed, planned and constructed by Developer, or Developer will cause the same to occur. The Private Improvements will be sited above the New Parking Structure and abutting or adjacent to other Public Improvements. The Private Improvements may be legally 'owned and described as separate parcels, or as a single parcel, in Developer's discretion. The "Private Improvements" will include the following components: (i) Two first class hotels, which will have a combined total of approximately [250] guest units, approximately [100] residential units and approximately [30] fractional fee units, (the "Lodging," which is comprised of the "East Lodging" and the "West Lodging"); and (ii) two levels, totaling approximately 60,000 square feet, of retail space, as [depicted and described] on Exhibit hereto (the "Retail Development"). (c) The Parties acknowledge that the Public Improvements and Private Improvements may share [appropriate connections including infrastructure, superstructure, shared elevators, access, security [ and other integrated components, as will be agreed upon in a separate agreement to be executed by the Parties at Closing.] Section 2.03 Schedule of Conveyance of Title and Interests in Project. (a) From the Effective Date to the Closing Date, Town will continue to own the Site in fee. (b) At Closing, Town will convey its fee interest in the Site, which shall have been subdivided into separate and distinct development parcels in order to facilitate future conveyance and ownership (each to be identified as a separate tax parcel), to Developer. At Closing, Developer will convey back to the Town Developer's fee interest in the separate and distinct subsurface development parcel of the Site where the New Parking Structure will be constructed [(excepting the approximately 300 privately owned parking spaces related to the Lodging to be privately owned and operated)] at no additional cost or condition to the Town; provided, however, Developer will retain fee title to all other interests in the other separate and distinct development parcels on the Site, including the areas of the Site where the Public Improvements and the Private Improvements will be constructed. The conveyances of the Site and the fee interest in the separate and distinct subsurface development parcel of the Site where the New Parking Structure will be constructed will occur simultaneously at Closing. (c) From the Closing Date forward, the New Parking Structure will be owned in fee by the Town. (d) From the Closing Date to the Date of Project Final Completion, the Private Improvements and the Public Improvements, excluding the New Parking Structure, will be owned in fee by the Developer. Developer will retain title to the Private Improvements. t4v DRAFT -136151-9 14 (e) Immediately following the Date of Project Final Completion, Developer will convey any remaining interest it has in the areas of the Site where the Public Improvements have been constructed to the Town or the Metropolitan Districts, as appropriate, and the Town or the Metropolitan Districts, as appropriate, will take title in fee to such Public Improvements in accordance with the Town's normal and customary practices. The Town or the Metropolitan Districts will retain title to such remaining Public Improvements. Section 2.04 Development Terms. [The [Master Plan] will govern and control with respect to the Approved Uses for the Project and the Site. In connection with its approval of this Agreement, the Town will act promptly on the [Master Plan] for Phase I of the New Parking Structure. As market conditions dictate, Developer intends in good faith to submit in the future one or more applications for approval [Master Plan amendments] for subsequent phases of the Project. When Developer submits one or more subsequent applications for approval of [Master Plan amendments] subsequent phases of the Project, the Town will promptly process and take final action on the application(s) in accordance with the Municipal Code and terms and conditions of this Agreement.] Section 2.05 Vested Property Rights. The Town acknowledges that the [Master Plan] constitutes a Site Specific Development Plan under Title 12, Section 19 of the Town Code and that upon adoption of the [Master Plan], Developer shall have the vested right to develop the Site in accordance with the [Master Plan] for a period of [three] years. [DO WE NEED TO DISCUSS LONGER TIME?] ARTICLE III PLANNING AND ENTITLEMENT PERIOD Section 3.01 Term. (a) The Planning and Entitlement Period (as hereinafter defined) shall begin on the Effective Date and shall terminate on the date of the Closing (the "Closing Date"), unless Developer has terminated this Agreement prior to such date in its sole discretion pursuant to Section below, or the Planning and Entitlement Period has been extended in accordance with Section [_J below. (b) Upon Closing the Planning and Entitlement Period shall be deemed to have ended, and the Construction Phase shall begin on the Business Day following the Closing Date. Closing shall occur on but in no event shall the Closing occur on any date later than [ I Section 3.02 Investigation, Design and Site Investigation. (a) The Parties acknowledge that prior to the Construction Phase, Developer requires a period of time to engage in Site Investigation and certain pre-construction, planning, design, entitlement, drafting and financing activities (the "Planning and Entitlement Period"). During the Planning and Entitlement Period Developer shall take such steps as it determines necessary to investigate and study all aspects of the Site, to design the Project and to engage in certain Site Investigation. DRAFT -136151-9 15 (b) During the Planning and Entitlement Period, Developer or its agents, consultants and contractors may, but shall not be obligated to, undertake Site Investigation or other activities on, in, on or under the Site, which Site Investigation or activities may include, but are not limited to: (i) Surveying and examining the condition of the Site, including, without limitation, the environmental condition of soils and groundwater, the existence of archeological or historical resources on the Site, existing environmental arrangements and laws affecting the Site, geo-technical surveys, topographical surveys, wetland delineations, tree surveys, ALTA or other land surveys, Phase I and Phase II environmental studies, water supply studies, historical and archeological resources studies or wildlife studies; the Project; (ii) Completing the schematic design phase and design development phase of (iii) (iv) (v) (vi) (vii) Site and the Project; Completing the Project entitlement process; Developing the Service Plans for the Metropolitan Districts; Examining the financing structure for the Project; Securing the Garage LOC in accordance with Section Obtaining final Town [/DRB] approvals relating to the development of the (viii) Examining the condition of title to the Site, including obtaining a title commitment to the Site in accordance with Section below; and (ix) Identifying the proposed location and timing for the construction phases of the Project, which information may be contained in the [Master Plan]; (x) Assisting the Town in its obligation to obtain all necessary approvals from CDOT for the design and construction of the Road Improvements; (xi) Examining all other aspects of the Site that relate to Developer's overall ability to develop the Project. (c) Developer shall perform any such Site Investigation in a good and workmanlike manner, [free of mechanics liens and claims], in accordance with all applicable laws, rules, regulations and ordinances of any governmental authority with jurisdiction over the Site. Developer shall coordinate the performance of any such Site Investigation with the Town to minimize impacts on the public access and use of the existing garage. Section 3.03 License to Enter and Access. The Town hereby grants Developer, its agents, consultants and Construction Contractors, at no cost to Developer, a license to enter upon, and to occupy any portion of the real property comprising the Site and the right to enter onto the Site for purposes of conducting the activities described in Section above in order DRAFT -136151-9 16 to accomplish the timely Commencement of Construction. Developer shall provide Town with [ 1 Business Days notice prior to entering the Site. Upon receipt of such notice, Town shall provide notice to any lessees occupying the Site regarding Developer's entry and activities. [SKATEPARK, E.G.?] Section 3.04 Title Commitment. (a) In connection with Developer's investigations on the Site during the Planning and Entitlement Period, Town shall provide the Title Commitment for title insurance on the Site issued by a title insurance company designated by Town for information purposes only, together with all of the documents listed on Schedule B-2 of such commitment. Town shall work with Developer and the title company to review such title exceptions in order to determine their validity, and to determine which title exceptions will need to be removed and the required actions and timing for such removal. Prior to Closing, the Developer shall prepare a list of exceptions to title which Developer determines are acceptable (the "Permitted Exceptions"), which list shall be attached as Exhibit [I to this Agreement on or before the Closing Date. Section 3.05 Survey. (a) Prior to the Closing Date, Town shall provide to Developer, [at Developer's expense], an ALTA survey (the "Survey") of the Site setting forth an accurate legal description of the Site and showing the location of the precise boundaries thereof, together with all structures, utilities and any other improvements on the Site and all easements, encroachments, rights-of-way and other matters affecting or appurtenant to the Site, whether recorded, visible or otherwise known to exist. The Survey shall be prepared by a licensed engineer (the "Engineer") acceptable to Developer and shall be certified to Developer and Title Company. The Engineer shall note on the Survey the acreage of the Site. If the legal description of the Site as shown on the Survey differs from the legal description set forth in Exhibit [ ] attached hereto, then such legal description shown on the Survey shall constitute the legal description of the Site for all purposes under this Agreement and such legal description shall be deemed substituted for the legal description attached hereto as Exhibit [1. The Parties acknowledge that once the [Master Plan] is completed, the legal description may need to be revised in a manner satisfactory to all Parties. Section 3.06 Lionshead Redevelopment Master Plan Amendment. The Town has previously approved the Lionshead Redevelopment Master Plan, and the Site is located within the Lionshead Plan Area identified in the Lionshead Redevelopment Master Plan. The Town and Developer acknowledge that the development of the Project in conformity with this Agreement requires certain amendments to the Lionshead Redevelopment Master Plan. Based upon and in conformity with the [Master Plan], the Town shall prepare an amendment to the Lionshead Redevelopment Master Plan that will accommodate the Project and the [Master Plan] prior to the Closing Date. Such amendment, and any subsequent amendments thereto, shall be subject to the Developer's review prior to adoption. Section 3.07 Zoning Process and Entitlement Activities. Developer shall work with the Town to obtain the necessary entitlements for development of the Project prior to Closing and the Town shall cooperate with Developer in this effort. The Town and Developer agree that the DRAFT -136151-9 17 successful development of the Project requires a planning and zoning process that effectively engages the community and is efficient, cost effective, flexible and responsive to the needs of the market place. The Town and Developer shall work cooperatively, with the County if and when necessary, to secure appropriate zoning and land use approvals for the development of the Project. The Town and Developer agree to coordinate their efforts with regard to planning and zoning issues concerning the Project. Section 3.08 Town Obligations During Planning and Entitlement Period. During the Planning and Entitlement Period, the Town shall have the following responsibilities and obligations, each of which shall be performed in a timely manner, but in any event prior to Closing, and using commercially reasonable efforts: (a) The Town shall execute such licenses, permits, easements, rights of way and other agreements as Developer determines to be necessary or convenient to provide access by Developer, its agents and employees to the Site for purposes of developing the Site, providing utility service to the Site or to otherwise facilitate or accommodate development of the Site. (b) Town shall provide Developer copies of or access to all documents, studies, reports, survey materials and other materials in the custody of the Town, or actual or constructive control of the Town that might relate to the condition of the Site or the development of the Project. (c) Town shall provide Developer with copies of all documents evidencing conveyance of the Site to the Town, all lease agreements and other agreements that impact the Site, any information regarding any security interests in the Site, and information regarding existing and previous litigation or claims related to the Site and issues that might lead to litigation or claims. (d) The Town shall have approved and executed documents necessary to subdivide the Site into separate parcels as contemplated in Section and shall have approved and executed documents necessary to effectuate the conveyance of its fee interest in the Site (and all of its subdivided parcels) at Closing. (e) Town shall take such actions and execute such documents as may be necessary to remove any encumbrances on the Site, if any, that are not included in the Permitted Exceptions. Town shall take no actions and enter into no contracts, leases or other agreements that would affect title to or use of the Site without Developer's prior written consent. (0 Town shall continue to manage and operate the Site and Existing Garage in accordance with its normal and customary management policies and practices. (g) Town shall assist Developer in its effort towards issuing a contract for final engineering design of the Road Improvements such that the Road Improvements can be completed and open for use by [ (h) Town shall have obtained all necessary approvals from CDOT for the design and construction of the Road Improvements, including any required environmental approvals and access permits. DRAFT -136151-9 18 (i) Town shall comply with its insurance obligations set forth in Section [I below. 0) Town shall cooperate with Developer in its efforts to investigate the Site. (k) Town shall fully disclose to Developer any other information available that might affect development of the Project. (1) Town shall respond to any other reasonable requests by Developer related to assisting with Developer's investigations. Information the Town considers non-public and confidential shall only be provided by the Town to Developer under proper protection of confidentiality. Section 3.09 Developer Obligations During Planning and Entitlement Period. During the Planning and Entitlement Period, Developer shall have, and shall use commercially reasonable efforts to fulfill, the following obligations (provided that the requirement to use commercially reasonable efforts shall in no way affect Developer's ability to terminate this Agreement during the Planning and Entitlement Period in accordance with Section below): (a) Developer shall provide copies to the Town of any studies or reports Developer obtains or creates in the course of its investigations that are not Developer's Proprietary Information. (b) Developer shall process all entitlements and other approvals necessary for development of the Project within the relevant jurisdiction. (c) Developer shall manage all costs associated with the development of the Project. (d) Developer shall work towards issuing a contract for final engineering design of the Road Improvements such that the Road Improvements can be completed and open for use by [ 1• (e) Developer shall assist Town, in its effort to obtain all necessary- approvals from CDOT for the design and construction of the Road Improvements, including any required environmental approvals and access permits. (f) Developer shall comply with its insurance obligations set forth in Section below. (g) Developer shall conduct any investigation work on the Site in a good and workmanlike manner, in accordance with all applicable laws [and free of mechanics liens and claims]. Section 3.10 Indemnification. Developer agrees to indemnify and hold harmless the Town, its officers and agents from any loss, liability, claim, demand, action, suit, judgment, damage, cost or expense (including without limitation reasonable attorneys' fees) arising from the Developer's Planning and Entitlement Period activities, including but not limited to any personal or bodily injury or death to any person, property damage, and mechanic's and materialmen's liens arising in connection with Developer's investigations; provided, however, DRAFT -136151-9 19 Developer shall not be responsible for any claims, loss, injury, costs or expenses incurred by the Town arising out of the interruption or impairment of use or access to the Site during any such activities. Notwithstanding anything in this Section [_J to the contrary, each Party shall comply with their respective insurance obligations set forth in Article herein. Section 3.11 Extension of Planning and Entitlement Period. The Planning and Entitlement Period may be extended in the following circumstances: (a) If (i) Developer requires additional time to conduct its investigations, design or Site Investigation, (ii) Developer reasonably foresees that it will not be able to meet its obligations set forth in Section above prior to the Closing Date, (iii) it is reasonably foreseeable that Town will not be able to meet its obligations set forth in Section above prior to the Closing Date Developer, or (iv) CDOT has not provided the necessary approvals for the design and construction of the Road Improvements prior to the Closing Date, then Developer may provide notice to Town at least [5] Business Days prior to the scheduled Closing Date that Developer wishes to exercise its rights under this section and extend the Planning and Entitlement Period for a period of [90 days]. If, prior to the end of such [90] day extension period, any of the circumstances above are still unresolved, Developer may exercise its rights under this section and extend the Planning and Entitlement Period for an additional period of [90 days]. ARTICLE IV CONVEYANCE OF SITE AND CLOSING Section 4.01 Closing. (a) Subject to satisfaction of the Closing Conditions set forth in Section below, the Town and Developer agree that Closing shall occur on the Closing Date, at a location and time mutually agreeable to the Parties, on the terms and conditions set forth in this Agreement. If the Closing Conditions are satisfied and Closing occurs in accordance with Section below, the Town and the Developer agree that Town will have conveyed its fee interest in the Site, which shall have been subdivided into separate parcels, to Developer, and that Developer will have conveyed back to the Town Developer's fee interest in the separate and distinct subsurface development parcel of the Site where the New Parking Structure will be constructed, all in accordance with the terms of this Section by special warranty deed. The conveyances of the Site and the fee interest in the separate and distinct subsurface development parcel of the Site where the New Parking Structure will be constructed will occur simultaneously at Closing. (b) Fourteen days prior to the Closing Date, the Parties shall generally have completed all Closing Conditions or indicate reasonable expectation of completing them by the Closing Date. Section 4.02 Purchase Price. (a) The "Conveyance Price" for the Site to be paid by Developer to the Town at Closing, shall be the good and valuable consideration provided to Town by Developer in accordance with this Agreement, including but not limited to Developer's commitment to develop the Project, taking into account Developer's agreement to undertake the obligations set DRAFT-136151-9 20 forth in this Agreement. The Parties agree that the Conveyance Price represents the fair market value of the Site. (b) [Each Party agrees to pay its own costs and fees associated with the Closing, subject to the adjustments to be made at the Closing to allocate closing costs and fees, which adjustments shall be set forth in written instructions from the Parties to the Title Company.] Section 4.03 Closing Conditions. The following conditions shall be conditions precedent to Closing, and Closing shall occur only upon satisfaction or the written waiver by the benefited party of the following Closing Conditions. The determination of satisfaction of the Closing Conditions in paragraphs [(a)] through [(t)] below shall be made by Developer, in its sole discretion. The determination of satisfaction of the Closing Conditions in paragraphs [(u)] through [(y)] below shall be made by Town, in its sole discretion. (a) The Town's representations and warranties set forth in Section [12.02] hereof are true and correct as of the Closing Date. (b) The Town shall have satisfied, to Developer's satisfaction, each of its obligations set forth in Section [ 10.01 ] hereof. (c) The Title Company shall deliver the Title Commitment. (d) Developer has determined that there are no agreements, leases, encumbrances, entitlement or other issues affecting the Site that would unacceptably impede development of the Site. (e) The Developer has completed and obtained all necessary approvals from CDOT for the design and construction of the Road Improvements, including any required environmental approvals and access permits, and the Town has approved a contract for final engineering design of the Road Improvements such that the Road Improvements can be completed and open for use by [ 1. (f) The Town has conveyed to Developer at Closing through delivery of a special warranty deed executed and acknowledged as required by law, full unencumbered fee title (subject only to the Permitted Exceptions) to Town's fee interest in the Site, the subsurface, surface and airspace above the Site, which shall have been subdivided into separate parcels. (g) The Town Council shall have authorized the formation of the Metropolitan District(s) prior to the election at which such formation appears on the ballot. (h) The Service Plan for the Metropolitan District(s) shall have been approved by the Town. (i) The Developer has concluded its Planning and Entitlement Period activates hereunder and has not terminated this Agreement. 0) The Town has caused the Lionshead Redevelopment Master Plan to be amended to accommodate the Project and the [Master Plan]. DRAFT -136151-9 21 (k) The Town has approved re-zoning of the Site in a manner consistent with, and to accommodate, the Project. (1) Developer shall have determined that no changes in zoning or other land use and building provisions directly or indirectly affecting the Site (including, without limitation, any local or statewide moratorium or other restriction on construction or issuance of water or sewer taps) have occurred or are pending that would materially diminish Developer's ability to timely develop the Site in accordance with the [Master Plan]. (m) The Town has approved the [Master Plan] or approved the [Master Plan] with conditions acceptable to Developer, and land use and regulatory entitlements have been obtained consistent with the [Master Plan]. (n) The Town shall have provided assurance to the Developer that water, sewer, and other utilities provided by or through the Town will be available for construction and opening of each of the Public Improvements and Private Improvements. (o) The Developer has determined with reasonable certainty that an adequate water supply will be legally and physically available for the full buildout of the Project in a manner consistent with Project phasing, at a commercially reasonable cost, and which may include renewable and nonrenewable sources of supply; and the Developer has determined with reasonable certainty that adequate wastewater treatment facilities will be legally and physically available for the full buildout of the Project in a manner consistent with Project phasing and at a commercially reasonable cost. (p) Developer shall have determined through its Planning and Entitlement Period activities and investigations that no condition of any portion of the Site is unsatisfactory to Developer. (q) The Developer has identified no circumstances during the Planning and Entitlement Period relating to the timing, potential yield or infrastructure costs for the Project that are so materially different from its understanding in preparing the UP Response that they would result in significantly lesser returns to the Developer than were anticipated in the UP Response. (r) Certificates evidencing the Town insurance coverages required under Article [XIV] of this Agreement have been reviewed by Developer. (s) Developer shall have determined that it will obtain financing in amounts sufficient to: perform the Site Investigation; develop or and cause the construction of the Public Improvements and Private Improvements; and otherwise perform its obligations under this Agreement. (t) Developer's representations and warranties set forth in Section [12.01] hereof are true and correct as of the Closing Date. (u) Developer shall have satisfied, to Town's satisfaction, each of its obligations set forth in Section [11.01] hereof. DRAFT -136151-9 22 (v) Developer has covenanted to use the Site in accordance with the Approved Uses and in a manner consistent with this Agreement, the [Master Plan] and any entitlements obtained for the Site. (w) Developer has conveyed back to Town at Closing through delivery of a special warranty deed executed and acknowledged as required by law, full unencumbered fee title to Developer's fee interest in the separate and distinct subsurface development parcel of the Site where the New Parking Structure will be constructed. (x) Developer shall have obtained the Garage LOC (as hereinafter described). (y) Certificates evidencing the Developer's insurance coverages required under Article [XIV] of this Agreement have been reviewed by Town. Section 4.04 Parties Option to Extend Closing or to Terminate. If the Closing Conditions are not satisfied on or before the Closing Date, then any Party having satisfied its Closing Conditions may, at its option, either terminate this Agreement in accordance with Sections [15.05 or 15.06], as applicable, or extend the Closing Date for thirty (30) days by providing written notice thereof to the other Party. Section 4.05 Certificates at Closing. (a) The Town shall deliver to Developer at the Closing a certificate stating that all of the representations and warranties of the Town made in this Agreement are true and correct as of the Closing Date as if made on the Closing Date, and that the Town has satisfied each of the Closing Conditions set forth in Sections [5.03(a) through 5.03(t)] above (the "Town Certificate"). If the Town fails to deliver the Town Certificate or if the Town Certificate contains any exceptions or other limitations to any representation or warranty of the Town made in this Agreement, Developer shall be entitled to terminate this Agreement pursuant to Section [ 15.06] hereof. (b) The Developer shall deliver to Town at the Closing a certificate stating that all of the representations and warranties of the Developer made in this Agreement are true and correct as of the Closing Date as if made on the Closing Date, and that the Developer has satisfied each of the Closing Conditions set forth in Sections [5.03(a) through 5.03(t)] above (the "Developer Certificate"). If the Developer fails to deliver the Developer Certificate or if the Developer Certificate contains any exceptions or other limitations to any representation or warranty of the Developer made in this Agreement, the Town shall be entitled to terminate this Agreement pursuant to Section [15.05] hereof. Section 4.06 Title Company Notification. Upon Closing, the Parties shall jointly notify the Title Company of such occurrence and the Title Company shall proceed to record the special warranty deed or any replacement deeds submitted into escrow and take such other actions as may be required. Section 4.07 Title. Prior to Closing, Town shall have provided to Developer the Title Commitment, together with copies of all documents referred to therein and will deliver a current certificate of taxes and assessments due for the Site issued by the treasurer or assessor of the DRAFT -136151-9 23 County. The Title Commitment shall be in an amount equal to the Purchase Price and will commit the Title Company to issue its standard Owners Title Policy subject only to the Permitted Exceptions, and together with the endorsements also listed on Exhibit Upon the Closing Date, the Title Company shall issue the Owners Title Policy (the [Town] will pay the premium therefor) to Developer. [The Parties acknowledge that, if the Site is to be deeded to separate entities it may be necessary for the Title Company to issue separate title insurance commitments and separate policies for each entity.] ARTICLE V CONSTRUCTION Section 5.01 Generally. (a) The "Construction Phase" shall begin, if the Closing Conditions have been satisfied, on the Business Day following the Closing Date. The Construction Phase shall end on the Date of Project Final Completion. Construction of the Project, and the contemplated uses and occupancies thereof, will comply with all applicable federal, state and Town laws, rules and regulations, including, but not limited to, building, zoning, and other applicable land use codes, subject to modifications approved by the Town pursuant to the planning, subdivision, zoning, environmental and other developmental ordinances and regulations. (b) It is the intent of the Parties that Developer shall cause to be performed the construction of the Project. Developer shall enter into Construction Contracts with each of the Construction Contractors. [The Construction Contract for each Public Improvement shall name the Town or Metropolitan District, as appropriate, as a third party beneficiary thereunder. (c) Notwithstanding anything in this Agreement to the contrary, Developer, after Closing and at its sole options and discretion, may postpone Commencement of Construction (i) for a period not to exceed five years beyond the intended target date set forth below in Section [5.02(a)] relating to Commencement of Construction for Phase I, and (ii) for a period not to exceed five years beyond each of the intended target dates set forth below in Section [5.03(a)] relating to Commencement of Construction for any of the Remaining Project Components. (d) If Developer elects to postpone Commencement of Construction for Phase I in accordance with Section [5.01(b)(i)] above, such postponement shall automatically extend all other target dates set forth in Section [5.02(a)] below, and if Developer elects to postpone Commencement of Construction for any of the Remaining Project Components in accordance with Section [5.01(b)(ii)] above, such postponement shall automatically extend all other target dates set forth in Section [5.03(a)] below. Section 5.02 Construction of the New Parking Structure. (a) The New Parking Structure will be constructed in four (4) phases, so as to minimize impact on peak, winter season ski-traffic. (i) The Parties intend for the first phase of construction of the New Parking Structure, which includes reconfiguration of the Existing Garage, to begin on [April 1, 2008] and 4 to be open to the public for use on [December 1, 2008] ("Phase I"). DRAFT -136151-9 24 (ii) The Parties intend for the second phase of construction of the New Parking Structure to begin on [April 1, 2009] and to be open to the public for use on [December 1, 2009] ("Phase II"). (iii) The Parties intend for the third phase of construction of the New Parking Structure to begin on [April 1, 2010] and to be open to the public for use by [December 1, 2010], at which point the Parties intend to have obtained the New Parking Structure TCO ("Phase 11I"). (iv) The Parties intend for the fourth and final finishing phase of construction of the New Parking Structure to begin on [April 1, 2011] and to have reached the Date of New Parking Structure Final Completion by [September 1, 2011] ("Phase 1V"). (v) Notwithstanding anything herein to the contrary, the New Parking Structure TCO shall be obtained by Developer on or before [September 1, 2012]. (b) During [December 1, 2008] through [April 1, 2009] of Phase 1, there will be at least 1,090 parking spaces on the Site open and available to the public. Beginning on [December 15, 2009], and continuing through the Date of New Parking Structure Final Completion, there will be at least 1,100 parking spaces on the Site open and available to the public. The Developer intends to cease major construction activities on the Existing Garage and New Parking Structure between December 1 and April 1 of each of 2009, 2010 and 2011, in order to minimize impact on peak, winter season ski-traffic. (c) Developer shall use all commercially reasonable efforts to ensure that the New Parking Structure is open to the public for use by the end of each of Phase I, Phase II, Phase III and Phase IV. If the New Parking Structure is not open to the public for use by the end of each of Phase I, Phase II, Phase III or Phase IV, Developer shall work with Town to implement the Alternative Parking Plan, which is attached hereto as Exhibit (d) Should Developer or Construction Contractor fail to meet any of the target New Parking Structure construction dates, Developer shall use all commercially reasonable efforts to cause construction to continue on the New Parking Structure, and shall report to the Town monthly on such progress until Developer or Construction Contractor begins again to meet the target New Parking Structure construction dates. (e) Developer shall diligently pursue steps, or cause its Construction Contractor to diligently pursue steps, to meet the target construction dates set forth in Section above and shall use all commercially reasonable efforts to ensure that the New Parking Structure will reach the Date of New Parking Structure Final Completion by [September 1, 2011]. If, despite these efforts, Developer or Construction Contractor encounters problems beyond their commercially reasonable control such that Developer reasonably believes that the New Parking Structure will not reach the Date of New Parking Structure Final Completion by [September 1, 2011], Developer shall provide notice to Town of same at least [30] days prior to [September 1, 2011]. Such notice shall set forth Developer's revised intended Date of New Parking Structure Final Completion, which in any circumstance shall not be later than September 1, 2012. The Developer will not be obligated to make any payment for said extension, and Developer will not be considered in default hereunder for exercising its rights to such extension. Developer shall DRAFT -136151-9 25 continue to use all commercially reasonable efforts to ensure that the New Parking Structure will be complete by the revised Date of New Parking Structure Final Completion. (f) If construction activities on the New Parking Structure cease for more than [45] consecutive Days (except for delays caused by or resulting from Force Majeure or the scheduled cessation of construction activities which will occur between December 1 and April 1 of each of 2009, 2010 and 2011), or if New Parking Structure fails to reach Date of New Parking Structure Final Completion by September 1, 2012, Town shall notify Developer that Town plans to exercise its rights under the Garage LOC. If construction activities on the New Parking Structure have not resumed with [thirty] days of receipt of such notice, Town shall be entitled to draw on the Garage LOC in accordance with Section hereof. Section 5.03 Construction of Remaining Project Components. (a) The Remaining Project Components may be constructed simultaneously with the construction of the New Parking Structure and/or following the Date of New Parking Structure Final Completion. The Parties hereby acknowledge that the construction deadlines for the Remaining Project Components may be extended or accelerated, depending on the pace of construction of the New Parking Structure, CDOT approvals, and other foreseeable and unforeseeable circumstances. (i) Construction on the Remaining Project Components is scheduled to occur from and after the Closing Date through the Date of Remaining Project Components Final Completion. (ii) Construction of the Road Improvements is scheduled to begin in [June 2008] and to be competed and open to the public for use by [September 30, 2008]. (iii) Construction of the East Lodging is scheduled to begin in [April 2010] and be open to the public for use by [December 1, 2011]. (iv) Construction of the West Lodging is scheduled to begin in [April 2011] and be open to the public for use by [December 1, 2012]. (v) Construction of the Retail Street, Transportation Center, Conference Center, Information Center, Replacement Facilities and Retail Development is scheduled to begin in [March 20111 and to be completed and open to the public for use by [December 1, 2012]. (vi) The Parties expect to obtain the last Remaining Project Components TCO on or about [December 2012], at which point the Project will be substantially complete. (b) The Parties hereby acknowledge that construction of the New Parking Structure and the Remaining Project Components will be an integrated process and that many of the Remaining Project Components will share infrastructure, superstructure, utilities, [ with the New Parking Structure. The Parties acknowledge that the target construction dates set forth in Section [ I above are dependant, in part, on the pace of construction of the New Parking Structure, and that such target construction dates of the DRAFT -136151-9 26 Remaining Project Components are expected to be extended or accelerated, as circumstance permit or require. (c) Should Developer or Construction Contractor fail to meet any of the target construction dates of the Remaining Project Components, Developer shall use all commercially reasonable efforts to cause construction of the Remaining Project Components to continue, and shall report to the Town monthly on such progress until Developer or Construction Contractor begins again to meet the target construction dates of the Remaining Project Components. (d) The Developer shall have the right to extend the target construction dates for each Public Improvement set forth in Section above for a period of [one year each] if Developer or Construction Contractor encounters problems beyond their commercially reasonable control in meeting the target construction dates set forth in Section above, are diligently pursuing steps to meet the target construction dates set forth in Section above, and have provided written notice to town of such extension at least [thirty days (30)] prior to the applicable target date that is intended to be extended. The Developer will not be obligated to make any payment for said extension, and Developer will not be considered in default hereunder for exercising its rights to such extension. If Developer obtains such an extension pursuant to this Section all dates in this Section shall be deemed to be extended by [one additional year]. (e) The Developer shall have the right to extend the target construction dates for each Private Improvement set forth in Section above for a period of [up to three years] if Developer or Construction Contractor encounters problems beyond their commercially reasonable control in meeting the target construction dates set forth in Section I above, are diligently pursuing steps to meet the target construction dates set forth in Section above, and have provided written notice to town of such extension at least [thirty days (30)] prior to the applicable target date that is intended to be extended. The Developer will not be obligated to make any payment for said extension, and Developer will not be considered in default hereunder for exercising its rights to such extension. (f) Notwithstanding anything in the Agreement to the contrary, if construction activities on the Remaining Project Components cease for more than [45] consecutive days, or if the Remaining Project Components fail to reach Date of Final Completion by [November 1, 2015], Town shall notify Developer that Town plans to exercise its rights pursuant to Section hereunder. If construction activities on the Remaining Project Components have not resumed with thirty days of receipt of such notice, Developer shall be in default hereunder and Town shall be entitled to exercise its rights pursuant to Section hereunder. Section 5.04 Development Terms. The [Master Plan] will govern and control with respect to the Approved Uses for the Project. In connection with its approval of this Agreement, the Developer will promptly act on [Master Plan]. Following the Closing, Developer shall continue to design and develop the Project in accordance with the [Master Plan], subject to compliance with all applicable ordinances, requirements, rules, regulations, and policies of the Town, including, without limitation, applicable zoning ordinances, requirements, rules, regulations, and policies. DRAFT -136151-9 27 Section 5.05 No Expense to Town. In no event shall the Town be responsible for any cost or expense related to demolition or to the construction, infrastructure improvement, installation or financing of the Project, unless such demolition or infrastructure improvement is necessitated by a specific independent request or requirement of the Town, and then only to the extent such infrastructure directly benefits the Town. ARTICLE VI CONFERENCE CENTER Section 6.01 General. The Parties intend for the Conference Center to be a center for visual and performing arts with over 30,000nsf of community-focused visual arts, performing arts and meeting spaces. It is the intent of the Parties that Developer's cost of construction of the Conference Center shall not exceed $14 million. The Town hereby agrees to address any cost increase beyond such amount which results from a Town decision to alter the Conference Center Z design, space or facilities. ~~V~ ALA . Section 6.02 Ownership. Immediately following the Date of Project Final Completion, Developer will convey any remaining interest it has in the Conference Center to the Metropolitan District, and such Metropolitan District will take title in fee to the Conference Center. Section 6.03 Conference Center Board. The Parties intend for the Conference Center to be managed and operated by a non-profit conference center entity, governed by a board of directors (the "Conference Center Board"). It is the intent of the Parties that the Conference Center Board members shall be appointed by the Town Council, and shall initially be comprised of five persons, two of whom shall be affiliated with Developer. The initial term of the Conference Center Board members shall be a term of [three] years each. Section 6.04 Conference Center Services. The Parties intend that the certain Conference Center services will be provided on a contract basis by the operator of either the West Lodging or East Lodging, to be determined by the Developer and the Metropolitan District at a later date. Such operator shall provide catering, housekeeping, janitorial and other operation and maintenance services as the Parties may agree to at a later date. ARTICLE VII FINANCING Section 7.01 General. It is the intent of the Parties that the Developer bear the costs of financing the Project, pursuant to this Article The Town agrees to work cooperatively with Developer in its efforts to obtain entitlements and financing, and the Town further agrees not to cause unnecessary delay in Developer's entitlement or financing efforts. Section 7.02 Metropolitan District(s). (a) Developer and Town acknowledge that one or more metropolitan districts (the "Metropolitan Districts") will need to be established for the purpose of financing, constructing and maintaining the Public Improvements for the Site. Town shall not be liable for any costs relating to the establishment or maintenance of any Metropolitan Districts. Developer shall work with the Town to establish the Metropolitan Districts in accordance with the requirements of DRAFT-136151-9 28 Title 32, Article I of the Colorado Revised Statutes and the requirements of the Town. Developer may work with any consultants it deems necessary in establishing and maintaining the Metropolitan Districts. As required by law, the Metropolitan Districts shall undertake activities in conformity with one or more service plans (the "Service Plans"), to be approved by the Town Council prior to Closing. The Service Plans shall contain, among other matters, limitations on the amount and maturities of general obligation bonds and other obligations to be issued by the Metropolitan Districts, as well as the amount of ad valorem property taxation to be levied and collected by the Metropolitan Districts. It is the intent of the Parties that there shall be a mill levy cap of 50 mills for capital cost or expenditures and no mill levy cap for operation and maintenance costs. (b) The Town agrees not to sell any of the Site that is included within the boundaries of the Metropolitan Districts to an individual (natural person) and not to permit any personal property owned by an individual (natural person) to be placed, located or remain on any such • vprtion. 4 the Site to the extent that such actions would permit any individual to become an ~,eligibl6 elector of the Metropolitan Districts. (c) Governance of each Metropolitan District will be conducted by representatives elected by the eligible electors of each such Metropolitan District. The Town and Developer intend that the initial board of directors of each Metropolitan District shall be nominated by Developer, provided however, that each such director nominated by Developer shall provide his or her resignation letter to the Town simultaneously with his or her appointment to the board of directors, which resignation letter shall provide that it is effective only upon the termination of this Agreement. The Town shall hold such resignation letters in trust and submit them to each Metropolitan District, as appropriate, if and only if this Agreement is terminated. (d) The Town and Developer acknowledge that it is their mutual expectation that, during the term of this Agreement, the Metropolitan District which is designated as the control district (the "Control District") will enter into an agreement with Developer to provide for management by Developer of construction activities of such district. (e) The Town shall cooperate with Developer and the Metropolitan Districts in the formation of the Metropolitan Districts and in the inclusion of property into the appropriate Metropolitan Districts. Section 7.03 Supplemental Financing. It is the intent of the Parties that supplemental financing be obtained to help finance the cost and operation of the Improvements, including facility fees, a lodgers' public improvement fee, home owner association dues or other fees. Section 7.04 Holder Not Obligated to Construct. Notwithstanding the provisions of this Agreement, a Holder (including a Holder or other person or entity who obtains title to all or a part of the Project as a result of foreclosure proceedings, or deed in lieu thereof, and including any other party who thereafter obtains title to all or any part of the Project from or through the Holder or other person or entity) will not be obligated by this Agreement to construct or complete the Improvements, or any of them, or to guarantee the construction or completion of the Improvements. A Holder and any other persons specified above and their successors in DRAFT -136151-9 29 interest may, at their option, construct the Improvements required under this Agreement in accordance with Section Section 7.05 Copy of Notice of Default to Holder. If the Town delivers to Developer a demand or notice of any claimed Event of Default by Developer under this Agreement, the Town will at the same time transmit a copy of the demand or notice to each Holder at the last address of the Holder shown in the Town's records. All notices under this Section [_Jwill be given in accordance with the provision of Section Section 7.06 Holder's Option to Cure Defaults. Any Holder will have the right, at its option, to cure or remedy or to commence to cure or remedy, any claimed default (to the extent that it relates to the part of the Project covered by its Mortgage) within thirty (30) days after the period for cure set forth in Section after receipt of the notice required by Section (or so long as cure has been commenced within such period, for so long as the Holder is diligently and continuously prosecuting such cure), and to add the cost thereof to the indebtedness secured by the Mortgage, provided, however that the Holder undertakes the cure or remedy in accordance with the terms and provisions of this Section Nothing contained in this Agreement will be deemed to require, permit or authorize a Holder to undertake or continue the construction of the Improvements, except to the extent the Holder reasonably deems the same necessary to conserve or protect the Improvements or construction already made, without first having expressly assumed Developer's obligations with respect to the portion of the Project and Improvements which Holder elects to construct by written agreement reasonably satisfactory to the Town. In that event, the Holder must agree to complete the portion of the Improvements which the Holder has elected to construct, in the manner provided in this Agreement, and submit evidence reasonably satisfactory to the Town that it has the qualifications and financial responsibility necessary to perform such obligations. Section 7.07 Rights of Lenders and Interested Parties. [Financing for acquisition, development and/or construction of the Project may be provided, in whole or in part, from time to time, by one or more third parties, including, without limitation, lenders, major tenants, and purchasers or developers of portions of the Site. The Town will recognize the rights of such interested parties and will otherwise permit such interested parties to assume all of the rights and obligations of Developer under this Agreement. The Town will have the right to approve such interested parties, and such approval shall not unreasonably be withheld. The Town will, at any time upon reasonable request by Developer, provide to any interested party an estoppel certificate or other document evidencing that this Agreement is in full force and effect. Upon request from an interested party, the Town will enter into a separate assumption or similar agreement with such interested party, consistent with the provisions of this Section [ Section 7.08 Miscellaneous. [The Town will not be required or expected to provide any financial assistance to the Developer or its tenants other than as set forth in this Agreement. Further, the Parties acknowledge that public monies are to be spent on Public Improvements consistent with the requirements of Federal and State law for the expenditure of proceeds from a tax-exempt bond issue, and that the matrix attached as Exhibit [ 1 hereto and made a part hereof, is intended to provide guidance on what improvements are considered by the Town to be permissible expenditures by identifying certain types of improvements, and whether they are eligible to be paid for with bond proceeds or mill levy funds, or whether they must be paid for by DRAFT -136151-9 30 the Developer. The responsibility for the maintenance, repair and replacement of the Public Improvements and Private Improvements shall be as indicated on Exhibit [ 1, and Developer shall have no responsibility for the maintenance, repair or replacement of the New Parking Structure.] ARTICLE VIII LETTER OF CREDIT Section 8.01 New Parking Structure Letter of Credit. (a) The New Parking Structure is planned to be constructed in four phases, primarily between April and November of each year, so as to cause minimal interference with peak, winter ski-season parking. To ensure that the New Parking Structure will be constructed in a timely manner, the Parties have agreed to obtain a Garage LOC as assurance hat if Developer defaults pursuant to Section [6.02(f)], the Town will be able to quickly and efficiently continue construction, or cause construction to be continued, on the New Parking Structure. (b) The Construction Contract for the New Parking Structure between the Developer and the Construction Contractor shall name the Town as a third party beneficiary thereunder. Section 8.02 Garage LOC Characteristics. (a) The Garage LOC shall be in favor of the Town. The Developer shall be the [obligated party] under the Garage LOC. (b) Developer shall pay the costs and fees associated with maintaining the stated amount of the Garage LOC, as the same may be increased or decreased from time to time, unless Town has drawn on the Garage LOC. If the Town draws on the Garage LOC as provided herein, Town shall be responsible for paying the costs and fees associate with maintaining the Garage LOC. (c) The terms of the Garage LOC will reflect an authorized amount, a stated amount and a time period relating to the projected cost and period of construction for each of Phase I, Phase II, Phase III and Phase IV of the New Parking Structure, and upon completion of construction of each of Phase I, Phase II and Phase III of the New Parking Structure, the terms and amount of the Garage LOC shall be revised to reflect the authorized amount, stated amount and a time period relating to the projected cost and period of construction for the next phase of the New Parking Structure construction. (d) For each of Phase I, Phase II, Phase III and Phase IV of the New Parking Structure, the stated amount of the Garage LOC will reflect the cost of the New Parking Structure Construction Contract for such phase. As construction for each phase proceeds, and payments are made on the New Parking Structure Construction Contract, the stated amount of the Garage LOC will automatically be reduced by the amount of such payment, such that the stated amount of the Garage LOC will never exceed the remaining cost of the New Parking Structure Construction Contract for each phase. DRAFT-136151-9 31 Governmental Immunity Act, C.R.S. 24-10-101, et. seq., or any successor statute. This policy should have a Broad Form Endorsement and include the following coverages: Blanket Contractual Liability, Broad Form Site Damage, Completed Operations and Personal Injury. Such limits can be satisfied through excess liability policies. In the event that the Colorado Governmental Immunity Act or any successor sovereign immunity statute is repealed, then the Town shall maintain commercial general liability insurance written on a so-called "Occurrence Basis," with a combined single limit in an amount not less than ).1 (iii) [Comprehensive Automobile Liability which insures against claims for .bodily injury and property damage arising from the use by the Town of "any auto" with a combined single limit of One Million and 00/100 Dollars ($1,000,000.00) per accident]; (iv) [Workers' compensation insurance covering all persons employed by Developer with the required statutory coverages and limits, complying with State law]; (v) [ 1 (b) Developer shall maintain or cause to be maintained, at no cost to the Town, the following insurance, from the Effective Date to the Closing Date: [DISCUSS [OPEN/HILLWOOD'S TYPICAL INSURANCE REQUIREMENTS FOR PROJECTS] (i) [Commercial general liability insurance which insurance shall be written on a so-called "Occurrence Basis, with X, C & U exclusions deleted (including completed operations, operations of subcontractors, blanket contractual liability insurance, owned, non owned and hired motor vehicle liability, personal injury liability) with combined single limits against bodily injury and property damage of not less than $[1,000,000]and with excess umbrella coverage raising the total coverage to not less than $[5,000,000]. [This policy should have a Broad Form Endorsement and include the following coverages: Blanket Contractual Liability, Broad Form Site Damage, Completed Operations and Personal Injury.] Such limits can be satisfied through excess liability policies;] (ii) [Comprehensive Automobile Liability which insures against claims for bodily injury and property damage arising from the use by the Developer of "any auto" with a combined single limit of One Million and 00/100 Dollars ($1,000,000.00) per accident]; (iii) [Workers' compensation insurance covering all persons employed by Developer with the required statutory coverages and limits, complying with State law]; (iv) [ 1 Section 13.02 Insurance Required Form Closing Date to Date of Project Final Completion. (a) The Town shall obtain and maintain or cause to be maintained, at no cost to Developer, the following insurance relating to the New Parking Structure, from the Closing Date to the Date of New Parking Structure Final Completion: DRAFT -136151-9 42 (i) Property insurance on the New Parking Structure, [DISCUSS TOWN'S CURRENT INSURANCE REQUIREMENTS ON SITE-ARE THEY SUFFICIENT?]; (ii) [Commercial general liability insurance which insurance shall be written on a so-called "Occurrence Basis," [with X, C & U exclusions deleted (including completed operations, operations of subcontractors, blanket contractual liability insurance, owned, non- owned and hired motor vehicle liability, personal injury liability)] with a combined single limit in an amount not less than the statutory limit of liability for the Town as set forth in the Colorado Governmental Immunity Act, C.R.S. 24-10-101, et. seq., or any successor statute. This policy should have a Broad Form Endorsement and include the following coverages: Blanket Contractual Liability, Broad Form Site Damage, Completed Operations and Personal Injury. Such limits can be satisfied through excess liability policies. In the event that the Colorado Governmental Immunity Act or any successor sovereign immunity statute is repealed, then the Town shall maintain commercial general liability insurance written on a so-called "Occurrence Basis," with a combined single limit in an amount not less than (iii) [Comprehensive Automobile Liability which insures against claims for bodily injury and property damage arising from the use by the Town of "any auto" with a combined single limit of One Million and 00/100 Dollars ($1,000,000.00) per accident]; (iv) [Workers' compensation insurance covering all persons employed by Developer with the required statutory coverages and limits, complying with State law]; (v) (b) Developer shall maintain or cause to be maintained, at no cost to the Town, the following insurance relating to each of the Private Improvements and Public Improvement (except the New Parking Structure), from the Closing Date to the Date of Project Final Completion: [DISCUSS [OPEN/HILLWOOD'S TYPICAL INSURANCE REQUIREMENTS FOR PROJECTS] (i) With respect to the Project, excluding the New Parking Structure: 1) [all Improvements under construction, from the Commencement of Construction until the Date of Project Final Completion, "Builder's Special Form 100% Completed Value Non-Reporting" or "Course of Construction" insurance;] 2) [With respect to all new Improvements constructed pursuant to this Agreement, special form risk property insurance;] 3) [Such coverage will include the Improvements themselves, all materials and supplies included in the Improvements, and with respect to builder's risk coverage, all materials and supplies to be used in completion of the Improvements, whether any or all of the foregoing are located at the site, in transit, or while temporarily stored off-site. The coverage will be for "Special Perils" and, subject to reasonable commercial availability, will include coverage for losses caused by fire; collapse; flood insurance if applicable; glass breakage; and freezing;] DRAFT -136151-9 43 (ii) [Commercial general liability insurance which insurance shall be written C on a so-called "Occurrence Basis, with X, C & U exclusions deleted (including completed operations, operations of subcontractors, blanket contractual liability insurance, owned, non- owned and hired motor vehicle liability, personal injury liability) with combined single limits against bodily injury and property damage of not less than 1,000,000]and with excess umbrella coverage raising the total coverage to not less than $[5,000,000]. [This policy should have a Broad Form Endorsement and include the following coverages: Blanket Contractual Liability, Broad Form Site Damage, Completed Operations and Personal Injury.] Such limits can be satisfied through excess liability policies;] (iii) [Comprehensive Automobile Liability which insures against claims for bodily injury and property damage arising from the use by the Developer of "any auto" with a combined single limit of One Million and 00/100 Dollars ($1,000,000.00) per accident]; (iv) [Workers' compensation insurance covering all persons employed by Developer with the required statutory coverages and limits, complying with State law]; (v) Section 13.03 General Insurance Requirements. (a) Each Party will provide certified copies of all policies of insurance required under this Article, to the other Party upon request. For the property insurance required to be carried by Developer under Section [14.02(b)(i)], Developer will cause its insurer(s) to provide the Town and its commissioners, directors, officers, employees and agents with waivers of subrogation. Developer will not obtain any property insurance that prohibits the insured from waiving subrogation. For the property insurance required to be carried by Town under Section [14.02(a)(i)] relating to the New Parking Structure, Town will cause its insurer(s) to provide the Developer and its directors, directors, officers, employees and agents with waivers of subrogation. Town will not obtain any property insurance that prohibits the insured from waiving subrogation. (b) The insurance coverages specified herein constitute the minimum requirements, and said requirements will in no way lessen or limit the liability of Developer or Town under the terms of this Agreement. Developer will procure and maintain, at its own expense and cost, any additional kinds and amounts of insurance on the Project (excepting the New Parking Structure) that, in its judgment, may be necessary for its proper protection in the completion of the Project. (c) [If any insurance required to be maintained by the any Party pursuant to this [Article XIV] (including the limits or any other terms under policies for such insurance) ceases to be available at all, or ceases to be available on commercially reasonable terms (as defined below), in the commercial insurance market, then the such Party shall provide written notice to the other Party of the first Party's opinion to that effect. Such opinion shall include (and shall be based upon, among other things) a certificate from an independent insurance advisor of recognized national standing pertaining to the then current state of the commercial insurance market. The second Party shall not unreasonably withhold its consent to modify such insurance requirement based upon the first Party's opinion and such related documentation. The first Party DRAFT -136151-9 44 shall, in any event, obtain and maintain such lesser coverage as is then available on commercially reasonable terms until the relevant insurance required pursuant to this [Article XIV] again becomes available on commercially reasonable terms, whereupon the first Party shall obtain and maintain such insurance. For the purpose of this Section, insurance will be considered to be not "available on commercially reasonable terms" if (i) it is either not obtainable or obtainable only at excessive costs, or (ii) it is generally not being carried by or applicable to development projects or operations similar to and in the same geographic area as the Project.] (d) Each Party shall contractually require that contractors/ subcontractors employed by such Party are properly insured with limits satisfactory to the Town, based on the type of work performed, before they are permitted to commence work on the Project. (e) [Each Party shall provide certificates of such insurance to the other Party, which certificates shall show the other Party as additional insured parties.] (0 Each insurance policy required under this [Article XIVI] shall be issued by an insurer of recognized responsibility licensed to issue the policy in the State, having a general policy holder's rating of not less than A- and a financial rating of VII or better as rated in the most current "Best's Key Rating Guide" or BBB or better from Standard and Poor's, or Baa3 or better from Moody's Investors Services. (g) At least five (5) days before any required insurance policy expires, each Party shall deliver to the other Party a certificate of insurance showing the effectiveness of the ; insurance required by this Agreement together with a new certificate of insurance showing the effectiveness of a replacement policy. (h) If a Party is paid any proceeds under any policy of insurance naming the other Party as an insured, on account of any loss, damage or liability, then the Party that is paid the proceeds hereby releases (or shall be required to release) the other Party, to the extent of the amount of such proceeds, or the amount of such proceeds which would have been paid if the required insurance was in effect, from any and all liability for such loss, damage or liability, notwithstanding that such loss, damage or liability may arise out of the negligent or tortious act or omission of the other Party. (i) A waiver of right of recovery clause stating that the insurance policy shall not be negated by such waiver shall be included in the insurance policies of each Party. Each Party waives its and its insurers' rights of subrogation against the other Party. 0) [Every insurance policy maintained by Developer pursuant to this Agreement shall (i) provide that thirty (30) days advance written notice shall be given to Town of cancellation, modification, termination or lapse of coverage except that only ten (10) days advance written notice shall be required in the event of cancellation, modification, termination or lapse of coverage as a result of non payment of premium, and that such insurance, as to the interest of the Town, shall not be invalidated by any act or neglect of the Town or its respective agents, employees, officers and representatives, Developer or any other named insured, additional insured or loss payee, nor by any foreclosure or any other proceedings relating to the DRAFT -136151-9 45 Site nor by any change in the title to or ownership of the Site, nor by use or occupation of the Site for purposes more hazardous than are permitted by such policy; and (ii) in the event any insuring company is not domiciled within the United States of America, include a United States Service of Suit clause (providing any actions against the insurer by the named insured or the Town shall be conducted within the jurisdiction of the United States of America).] (k) [Every insurance policy maintained by the Town pursuant to this Agreement shall (i) provide that thirty (30) days advance written notice shall be given to Developer of cancellation, modification, termination or lapse of coverage except that only ten (10) days advance written notice shall be required in the event of non payment of premium, and that such insurance, as to the interest of Developer, shall not be invalidated by any act or neglect of Developer, its Affiliates or agents, the Town or any other named insured, additional insured or loss payee, nor by any foreclosure or any other proceedings relating to the Site nor by any change in the title to or ownership of the Site, nor by use or occupation of the Site for purposes more hazardous than are permitted by such policy; and (ii) in the event any insuring company is not domiciled within the United States of America, include a United States Service of Suit clause (providing any actions against the insurer by the named insured or Developer, its Affiliates or agents shall be conducted within the jurisdiction of the United States of America).] (1) The insurance required in this [Article XIV] may be provided under a combination of primary liability and excess liability policies and may be insured under a blanket insurance policy obtained by the Developer or its Affiliate or by Town, as the case may be. ARTICLE XIV EVENTS OF DEFAULT, REMEDIES AND TERMINATION Section 14.01 Events of Default After Closing. Each of the following, which occur after the Closing Date and conveyance of the Site to Developer, and which remain uncured after the expiration of all applicable cure periods, shall constitute an event of default ("Event of Default") under this Agreement: (a) Prior to the Date of Project Final Completion, Developer shall file a petition in bankruptcy or other petition for creditors' relief shall have been filed against Developer and shall not be dismissed within sixty (60) days, or any material written representation by Developer as to its financial condition shall have been false; and (b) Developer or the Town shall be in default of any of its material, respective duties or obligations hereunder, including but not limited to complying with Sections [6.02], [6.03], and [2.03(e)], as pertains to the Developer, and Sections [10.01(g)] and as pertains to the Town.[DICUSS] Section 14.02 Default Notice. (a) If a default occurs under this Agreement, the non-defaulting Party shall deliver notice ("Default Notice") to the Party in default, specifying the nature of the alleged Event of Default, and in accordance with Section [_J below. The non-defaulting Party shall have no right to exercise any remedy for such default without delivering the Default Notice as provided herein. DRAFT -136151-9 46 (b) The non-defaulting Party shall not have the right to exercise a remedy hereunder after delivery of a Default Notice if the default is commenced to be cured by the defaulting Party within thirty (30) days and thereafter is diligently pursued to completion of cure within a reasonable time; except for Town's termination right due to the Developer's failure to convey back to the Town title to the Public Improvements (other than the New Parking Structure), for which the Developer shall have only ten (10) days to cure from delivery of the Default Notice. Section 14.03 Town's Option to Reenter and Repossess Portions of the Project. (a) Following an Event of Default by Developer that occurs after the Closing Date and prior to the Date of Project Final Completion, the Town shall have the right at its option to take title, reenter and repossess any portions of the Public Improvements and Private Improvements that, at the time of default, have not been issued a Remaining Project Components TCO. (b) The Town agrees that the foregoing described right to take title, reenter and repossess certain portions of the Project shall apply only to portions of the Project that meet all of the following criteria: (i) have not been sold or ground-leased to third parties by Developer at the time the Town delivers notice or exercise of the right to Developer; and (ii) are not developed with buildings that have received a Remaining Project Components TCO or are under construction prior to the expiration of all applicable cure periods. (c) To exercise its right to take title, reenter and repossess any portion of the Project under this Section the Town shall give written notice to Developer of its election to retake identified portions of the Project ("Reverter Notice"), and in accordance with Section below. (d) The Town's right to take title, reenter and repossess any portion of the Project under this Section shall be the Town's sole and exclusive remedy for an Event of Default, other than termination of this Agreement pursuant to Section below. The Town's exercise of its rights under this Section shall operate as a full and final release of Developer, its successors and assigns under this Agreement, and the Town shall have no other rights or remedies under this Agreement, other than termination of this Agreement pursuant to Section below. If the Town does not elect to exercise its right to take title and reentry under this Section then the Town shall have no other remedies for an Event of Default, other than termination of this Agreement pursuant to Section below, and the Town hereby waives all other rights and remedies, including but not limited to monetary damages. (e) Upon the revesting in the Town of title to any portion of the Project as provided in this Section the Town shall, pursuant to its responsibilities under Colorado law, use its best efforts to resell the same as soon and in such manner as the Town shall find feasible and consistent with the objectives of such law and to a qualified and responsible party or parties (as reasonably determined by the Town) who will assume the obligations of developing, making or completing the Public Improvements or Private Improvements in Developer's stead as shall be reasonably satisfactory to the Town and in accordance with the uses specified therefore in the Lionshead Redevelopment Master Plan. Upon such resale, the proceeds thereof shall be applied as follows: DRAFT -136151-9 47 (i) First, to reimburse the Town, on its own behalf, for all costs and expenses incurred by the Town to third party consultants, including attorneys, in connection with the recapture, management and resale of the Project, less any income or gain derived by the Town therefrom or the improvements thereon in connection with such management, recapture or sale; all taxes, assessments and water or sewer charges with respect thereto which Developer has not paid; any payments made to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of Developer, its successors, assigns or transferees; and any expenditures made or obligations incurred with respect to the development, making or completion of the Public Improvements, Private Improvements or any part thereof on the Site; (ii) Second, to reimburse Developer or its successors, assigns or transferees (if applicable), up to the amount equal to the costs incurred by Developer for the development of the Site, including any financing cost and outstanding debt service payments, and for the Improvements existing thereon at the time of reentry and repossession, less any gains or income withdrawn or made by Developer therefrom for the Improvements thereon; and (iii) Third, any balance remaining after such reimbursements shall be retained by the Town as its property. (f) Any development and operation of any portion of the Project by the Town or any successor thereto following a reverter shall be in accordance with the [Master Plan]. (g) Also notwithstanding any other provision of this Agreement, the Town's right of reverter under this Section and any proceedings hereunder shall terminate and be of no further force or effect upon the Date of Project Final Completion, and the Town shall have no further right of reverter. (h) The rights established in this Section are to be interpreted in light of the fact that the Site is being conveyed to Developer for development, and not for speculation in undeveloped land. Section 14.04 Developer's Remedies. (a) Following an Event of Default by Town that occurs after the Closing Date and prior to the Date of Project Final Completion, Developer shall be entitled to any remedies available at law, equity or as specifically contemplated under this Agreement. Section 14.05 Termination by the Town Prior to Closing Date. (a) If in Town's reasonable estimation Developer has failed to comply with the Closing Conditions set forth in Sections through Town may terminate this Agreement. (b) The right of termination set forth in this Section shall be the Town's sole and exclusive remedy for a Developer's failure to meet such Closing Conditions upon Closing. In no event shall the Town be entitled to damages, including but not limited to monetary damages, of any kind or specific performance. DRAFT -136151-9 48 Section 14.06 Termination by Developer Prior to Closing Date. (a) Developer may terminate this Agreement prior to Closing for any reason in its sole and absolute discretion and without penalty. In connection therewith Developer shall deliver hard copies (or electronic copies if Developer so elects), of the last version of all planning, design and development documents (other than Developer's Proprietary Information) concerning the Site and the Project to the Town, all without charge to the Town, and neither Party shall have any further obligation under this Agreement. (b) If in Developer's reasonable estimation at Closing Town has failed to comply with the Closing Conditions set forth in Sections [J through Developer may terminate this Agreement pursuant to this Section. (c) The right of termination set forth in this Section shall be the Developer's sole and exclusive remedy for Town's failure to meet such Closing Conditions upon Closing. In no event shall the Developer be entitled to damages, including but not limited to monetary damages, of any kind or specific performance. (d) If for any other reason this Agreement has not terminated in accordance with this Section, and Closing has not occurred by this Agreement shall automatically terminate prior to such date as if Developer had exercised its right to terminate under this Section. (e) In the event that this Agreement terminates prior to Closing while any Site Investigation is underway, Developer shall repair any damage to the Site caused by Developer or its agents requested by the Town. Section 14.07 Option to Terminate. Without limitation upon any other termination right set forth herein, Developer and Town will have the right to terminate this Agreement if an Event of Default by other Party occurs and is continuing, and any applicable cure period for the Event of Default has expired. Section 14.08 Action to Terminate. Notice of termination of this Agreement must be accomplished by written notification delivered to the other parties hereto in accordance with Section [I below. Termination will be effective on the date specified in such notice. Section 14.09 Effect of Termination. If this Agreement is terminated pursuant to Sections ] or Sections [_J, then this Agreement will be null and void and of no further effect, and no action, claim or demand may be based on any term or provision of this Agreement; provided, however, that certain obligations set forth in Section herein will survive termination.. Section 14.10 Scheduled Termination. If not otherwise terminated earlier as provided herein, this Agreement will terminate upon the Date of Project Final Completion. Section 14.11 Survival After Termination. As set forth herein, the only provisions of this Agreement that survive termination are those that expressly include survival of termination language, as set forth in this Section or otherwise in this Agreement. DRAFT -136151-9 49 (a) The Town's obligation to maintain the New Parking Structure set forth in Section shall survive any termination of this Agreement. (b) If any closing of any financing has occurred, the Metropolitan District and Developer's obligations under any financing documents with respect to such financing will survive any termination of this Agreement. (c) [OTHER OBLIGATIONS THAT SURVIVE?] ARTICLE XV RESTRICTIONS ON ASSIGNMENT AND TRANSFER Section 15.01 Representations as to Development. Developer's undertakings under this Agreement are for the purpose of development of the Site and not for land holding or speculation. Developer and Town acknowledge that: (a) The development of the Site is important to the general welfare of the Town and Developer, and is consistent with the Lionshead Redevelopment Master Plan; (b) The Developer intends to make available substantial financing and other aids to make the development possible; and (c) It is because of the qualifications and identity of Developer that the Town is entering into this Agreement with Developer, and is willing to accept and rely on the obligations of Developer for the faithful performance of all of its undertakings and covenants under this Agreement. Section 15.02 Limitation on Assignment. Except as otherwise provided in this Section prior to the Date of Project Final Completion, Developer will not assign its rights or delegate its duties and obligations under this Agreement without the prior written consent of the Town, not to be unreasonably withheld, delayed or conditioned. Any purported assignment without consent of the Town will be null and void. As a condition to the Town granting consent, an assignee will expressly assume in writing the obligations of Developer hereunder. For purposes of this Section any sale, transfer, assignment, pledge or hypothecation of an interest in Developer (other than to an Affiliate of Developer) that results in a change in management control of Developer will constitute an assignment of this Agreement. Notwithstanding the foregoing: (a) Following the Date of Project Final Completion, Developer may freely convey the Private Improvements, assign its rights, and delegate its duties and obligations under this Agreement without the Town's consent. (b) Developer may at any time without the Town's consent, convey any interest it has in the Site and Project, or Developer's interest in any portion of the Site or Project, or assign its rights, and delegate its duties and obligations under this Agreement to an Affiliate, or to or from an accommodator or intermediary for purposes of carrying out an Internal Revenue Code Section 1031 exchange provided that, at the conclusion of the exchange transactions, the Site, project or DRAFT -136151-9 50 portion of either thereof shall be owned by an Affiliate or another transferee otherwise permitted hereunder. (c) [No consent will be required under this Section for any pledge or assignment of this Agreement as collateral security for Developer's financing.] (d) [No consent will be required under this Section [ ] for any sale or lease of a free- standing retail site (as generally depicted in the [Master Plan]) for the construction thereon of Improvements to be used by the purchaser or lessee of such free-standing retail site, or its affiliate or borrower (such as the sale, lease, or transfer of a retail building site for the construction and operation thereon of an Approved Use).] Section 15.03 [Effect Upon Obligations. In the event of any assignment that is approved or deemed approved under Sections and [I above, or in the event of an assignment to a permitted assignee under Section [__J above, Developer shall be released from any further liability or obligation under this Agreement upon execution by the assignee of a document (in a form reasonably acceptable to the Town) by which the assignee agrees to assume those of Developer's obligations under this Agreement that are being assigned to the assignee from and after the date of the assignment. ] ARTICLE XVI MISCELLANEOUS Section 16.01 Amendment of Agreement. Except as otherwise set forth in this Agreement, this Agreement may not be amended or terminated except by mutual consent in writing of Developer and the Town, following the public notice and public hearing procedures required for approval of the [Master Plan], or this Agreement, as applicable. Section 16.02 No Implied Waiver. No provision of this Agreement will be construed as an implied waiver by Developer of its right to any payment, reimbursement, tax or fee waiver, or reimbursement to which it is otherwise entitled by law or as an implied waiver or acquiescence in the impairment of any of its substantive or procedural rights under the Local Government Land Use Control Enabling Act of 1974, sections 29-20-104.5 and 29-20-201 through 204, C.R.S., as amended, or as an implied agreement by Developer to be responsible for more than its proportionate share of any regional public infrastructure improvements or to be responsible for the costs of improvements that are not roughly proportional to the direct impacts of the development of the Project. Section 16.03 Notices. Any notice (a) shall be in writing; (b) shall be sent by (i) certified or registered mail in the United States mails, postage prepaid, return receipt requested, or (ii) by Federal Express or another national courier service, or (iii) (if such Party's receipt thereof is acknowledged by a signed delivery receipt) upon having been given by hand or other actual delivery to such Party; in each case to the address of such Party set forth herein below or to such other address in the United States of America as such party may designate from time to time to each other Party. Any Notice sent by the method described in (i) above shall be effective two (2) Business Days after mailing. Any Notice sent by the method described in (ii) above shall be effective on the next Business Day after having been sent; and any Notice sent by the method DRAFT -136151-9 51 described in (iii) above shall be effective upon delivery. Failure to provide notice under this Agreement shall not be considered an Event of Default hereunder. If to Developer, to: [DEVELOPER] Attn: With a copy to: Attn: And a copy to: Attn: If to the Town, to: Town of Vail, Colorado 75 South Frontage Road Vail, Colorado 81657 Attn: With a copy to: Attn: Section 16.04 Waiver. No Party shall have waived the exercise of any right that it holds hereunder unless such waiver is made expressly and in writing (and, without limiting the generality of the foregoing, no delay or omission by any party hereto in exercising any such right shall be deemed a waiver of its future exercise). No failure by any Party hereto to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement, or to exercise any right or remedy consequent upon a breach of this Agreement, will constitute a waiver of any such breach or of such or any other covenant, agreement, term or condition. Any Party by giving notice to the other Parties may, but will not be required to, waive any of its rights or any conditions to any of its obligations hereunder. No waiver will affect or alter the remainder of this Agreement, but each and every covenant, agreement, term and condition of this DRAFT -136151-9 52 Agreement will continue in full force and effect with respect to any other then existing or subsequent breach. Section 16.05 Attorneys' Fees. In any proceeding brought to enforce the provisions of this Agreement, the court will award the prevailing party (whether by judgment or out of court settlement) therein reasonable attorneys' fees, actual court costs and other expenses incurred. Section 16.06 Conflicts of Interest. The Town will not allow, and except as disclosed in writing to the Town, Developer will not knowingly permit, any of the following persons to have any interest, direct or indirect, in this Agreement: A member of the governing body of the Town; an employee of the Town who exercises responsibility concerning the Project; or an individual or firm retained by the Town who has performed consulting or other professional services in connection with the Project. The Town will not allow and Developer will not knowingly permit any of the above persons or entities to participate in any decision relating to this Agreement that affects his or her personal interest or the interest of any corporation, partnership or association in which he or she is directly or indirectly interested. Section 16.07 Titles of Sections. Any titles of the several parts and Sections of this Agreement are inserted for convenience and reference only and will be disregarded in construing or interpreting any of its provisions. Section 16.08 Town Not a Partner Developer Not Town's Agent. Notwithstanding any language in this Agreement or any other agreement, representation or warranty to the contrary, the Town will not be deemed or construed to be a partner or joint venturer of Developer, Developer will not be the agent of the Town, and the Town will not be responsible for any debt or liability of Developer. Section 16.09 Applicable Law; Venue. The laws of the State will govern the interpretation and enforcement of this Agreement. Venue for any action arising under this Agreement or any amendment or renewal hereof shall be in the District Court of Eagle County, Colorado; provided, that if any such action or proceeding arises under the Constitution, laws or treaties of the United States of America, or if there is a diversity of citizenship between the parties thereto, so that it is to be brought in a United States District Court, it shall be brought in the United States District Court for the District of Colorado or any successor federal court having original jurisdiction. Section 16.10 Binding Effect. This Agreement will be binding on and inure to the benefit of the parties hereto, and their successors and assigns, subject to the limitations on assignment of this Agreement by.Developer set forth in Section Section 16.11 Further Assurances. The parties hereto agree to execute such documents, and take such actions, as will be reasonably requested by the other party hereto to confirm or clarify the intent of the provisions hereof and to effectuate the agreements herein contained and the intent hereof. Section 16.12 Severabilitv. If any provision, covenant, agreement or portion of this Agreement, or its application to any person, entity or property, is held invalid, such invalidity will not affect the application or validity of any other provisions, covenants or portions of this DRAFT -136151-9 53 Agreement and, to that end, any provisions, covenants, agreements and portions of this Agreement and declared to be severable. Section 16.13 Good Faith; Consent or Approval. In performance of this Agreement or in considering any requested extension of time, the Parties agree that each will act in good faith and will not act unreasonably, arbitrarily, capriciously or unreasonably withhold or delay any approval required by this Agreement except those related to the Developer's obligations in Section [_J. Except as otherwise provided in this Agreement, whenever consent or approval of any Party is required, such consent or approval will not be unreasonably withheld, conditioned or delayed. Developer agrees and acknowledges that in each instance in this Agreement or elsewhere where the Town is required or has the right to review or give its approval or consent, no such review, approval or consent will imply or be deemed to constitute an opinion by the Town, nor impose upon the Town, any responsibility for the design or construction of building elements, including, but not limited to, the structural integrity or life/safety requirements or adequacy of budgets or financing or compliance with any applicable federal or state law, or local ordinance or regulation, including the Environmental Laws. All reviews, approval and consents by the Town under the terms of this Agreement are for the sole and exclusive benefit of Developer or its assignee and no other person or party will have the right to rely thereon. Section 16.14 Counterparts. This Agreement may be executed in several counterparts, each of which will be an original and all of which will constitute but one and the same instrument. Section 16.15 Non-Liability of Town Officials and Employees. No council member, commissioner, board member, official, employee, agent of consultant of the Town will be personally liable to Developer in an Event of a Default by the Town or for any amount that may become due to Developer under the terms of this Agreement. Section 16.16 Incorporation of Exhibits. All exhibits attached to this Agreement are incorporated into and made a part of this Agreement. Section 16.17 Jointly Drafted; Rules of Construction. The Parties hereto agree that this Agreement was jointly drafted, and, therefore, waive the application of any law, regulation, holding, or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document. Section 16.18 Brokers. Town shall not be responsible for the cost of any real estate broker's commissions under the transactions contemplated under this Agreement. [Developer shall have no responsibility for payment of any real estate broker's commissions to any real estate broker acting as an agent on behalf of the Town related to the Site.] Developer shall indemnify and hold the Town harmless from any claim, liability, loss or damage arising from any claim or assertion for a brokerage commission or fee from any individual or entity claiming by, through or under Developer. Section 16.19 Non-Discrimination. The Developer hereby covenants and agrees that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, ancestry, age, or ~Iw DRAFT -136151-9 54 handicap, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Site, nor shall the Developer or any person claiming under or through the Developer, establish or permit any such practice or practices of discrimination or segregation in the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees of the Site.[WHAT ARE TOWN'S PROVISIONS?] Section 16.20 Confidentiality of Materials. (a) Generally. Certain materials and information to be provided to the Town and by the Developer under this Agreement are confidential and proprietary in nature. For any document or information that Developer provides to Town and marks as "Confidential - Developer's Proprietary Information," the Town will use all reasonable efforts to ensure that such documents and information are kept confidential and proprietary to the maximum extent protected pursuant to law, including, without limitation, the Colorado Open Records Act and the Colorado Open Meetings Law. If Developer delivers Developer's Proprietary Information to the Town, Town shall hold such information separate from other Developer information received by Town, and shall file such information in a file marked "Confidential-[OPEN/HILLWOOOD] Proprietary Information-Not to be Released Without Consent." Town shall use commercially reasonable efforts to ensure that copies of Developer's Proprietary Information are not kept by individual Town officials or employees from Town's designated file for holding such information. The obligations set forth in this Section shall survive any termination of this Agreement. (b) Open Records Information. If Town or Developer receives a written request under the provisions of State law relating to access to public records appearing at 24-72-101 et seq. CRS, for information pertaining to the Project, the Town or Developer, as the case may be will promptly inform the other Party thereof. The Parties will meet and confer to determine the timing and appropriate response to the request. Section 16.21 Effectiveness: Complete Understanding. This Agreement shall become effective on and only on its execution and delivery by each Party. This Agreement represents the complete understanding between the parties hereto as to the subject matter hereof, and supersedes all prior negotiations, representations, guaranties, warranties, promises, statements or agreements, either written or oral, between the Parties as to the same. No inducements, representations, understandings or agreements have been made or relied upon in the making of this Agreement, except those specifically set forth in this Agreement. Neither Party has any right to rely on any other prior or contemporaneous representation made by anyone concerning this Agreement that is not set forth herein. Notwithstanding the forgoing, nothing herein shall restrict the rights of the Parties to enter into supplementary agreements to confirm, elaborate, verify or modify the scope of the Project, provided that they follow applicable Town requirements. Section 16.22 Time of the Essence. (a) Time shall be of the essence in the performance of this Agreement. (b) Notwithstanding the provisions of subsection (a) of this Section 16.11, delays caused by or resulting from Force Majeure shall not be counted in determining the time when the DRAFT -136151-9 55 (bW performance of such act shall be completed, whether such time is designated by a date or fixed time, a fixed period of time or "a reasonable time," unless it is expressly stated that such date, time or period may not be extended due to Force Majeure; and further provided (i) the delayed Party notifies the other Party of such delays and the cause thereof within a reasonable period of time following a Force Majeure but in any event not more than sixty (60) Business Days; and (ii) the delayed Party uses commercially reasonable efforts and all due diligence to effect the required performance. Section 16.23 Covenants Running With the Land. The covenants and obligations of the Town hereunder touch and concern the Site and are intended to be covenants running with the land. Unless the Site or portion thereof is released from the obligations of this Agreement as set forth in Section below, the provisions hereof shall be for the benefit of and be binding on the Town and its respective successors as owners or holders of interests in the Site and shall be fully enforceable by Developer against the then current owner or owners of the Site. Section 16.24 Recording. A memorandum of this Agreement shall be recorded in the real property records of Eagle County, Colorado. [END OF DEVELOPMENT IMPROVEMENT AGREEMENT 11 DRAFT -136151-9 56 IN WITNESS WHEREOF, each Party has executed this Development Improvement Agreement or caused it to be executed, under seal, on its behalf by its duly authorized representatives as of the [ ] day of [ 2007. TOWN OF VAIL, COLORADO: By:_ Name: Title: [OPEN HOSPITALITY]: By:_ Name: [SIGNATURE PAGE TO DEVELOPMENT IMPROVEMENT AGREEMENT] K DRAFT -136151-9 57 INITIAL LIST OF OPEN ITEMS FOR DEVELOPMENT AGREEMENT TOWN OF VAIL - OPEN/HILLWOOD REDEVELOPMENT OF THE LIONSHEAD PARKING GARAGE Relationship of 300+ privately-owned parking spaces in the new garage to the public spaces, and related issues of maintenance, security, access Laue I of pP,~Q.o4~-toJ . e ~j i W It ~K~. U Assuring appropriate standards for ongoing levels of maintenance, landscaping, renovation for the various Improvements Dtu`sious cc- Relationship between the Public Improvements and the Private V'sm-Sr- OUM *6:44_,~36. Improvements in terms of maintenance, security, access, standards TA.,ez Gt S i-~2.Jjvwz Form of the LOC, and whether Town's exercise of the LOC is an event of Tehi default by Developer 4, Length of time to build hotels Appropriate structure of the real estate conveyances 4b Conditions for closing 4. What is the best mechanism for the Developer to recover its investment if the Town repossesses the Site and turns it over to a second developer 4- Need for CDOT involvement in the road improvements i► The process for finalizing plans for the conference center, and other public improvements 4- Town decision on any additional size, scope for the conference center Coordinating a comprehensive Project schedule Determining the backup plan for ski-season parking if the garage construction is late