Rocky Mountain Chocolate Factory, Inc 8-K, filed Oct 6, 2026
Rocky Mountain Chocolate Factory, Inc. (RMCF)
About this 8-K
Rocky Mountain Chocolate Factory, Inc filed this 8-K on October 6, 2026, reporting on events of September 29, 2026.
Items reported
- Item 1.01: Entered into a material agreement
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
Sale-Leaseback of the Durango Property
On September 29, 2026, the Board of Directors (the “Board”) of Rocky Mountain Chocolate Factory, Inc. (the “Company”) approved a sale-leaseback of the Company’s property at 265 Turner Drive, Durango, Colorado (the “Durango Property”) with American Heritage Legacies, LLC (“AHL”). AHL is a local company controlled by the family of Allen Harper, the Company’s Interim Chief Executive Officer.
On September 30, 2026, the Company and AHL entered into a Contract to Buy and Sell Real Estate (Commercial) (the “Purchase Agreement”). Under the Purchase Agreement, the Company agreed to sell the Durango Property to AHL for $6.6 million. An independent appraisal of the Durango Property supported the purchase price. The Company expects to use the net proceeds to repay an aggregate of $6.6 million of outstanding promissory notes to RMC Credit Facility LLC, a Colorado limited liability company affiliated with Steven L. Craig who is currently a member of our Board, and RMCF2 Credit, LLC, a special purpose investment entity affiliated with Jeffrey R. Geygan, our former Interim Chief Executive Officer and current member of our Board (the “Notes”). The Notes accrue interest at 12% per annum. The Purchase Agreement also contains customary terms and conditions and is expected to close on or about October 15, 2026.
On October 1, 2026, the Company, as tenant, and AHL, as landlord, entered into a Commercial Lease for the Durango Property (the “Lease”). The Lease will commence on closing of the sale and has an initial term of ten years, with an option to renew for an additional ten-year term. Annual base rent is $624,000 for the first year and will increase by 2% annually thereafter. The Company will continue to pay all costs of owning, operating and maintaining the Durango Property, and the Durango Property will continue to serve as the Company’s corporate headquarters and its production and warehouse facility.
If the Company undergoes a Change of Control (as defined in the Lease), the Lease shall terminate in accordance with the terms of the Lease. In the event of a Change of Control, at AHL’s option, the Company must buy back the Durango Property for the greater of $6.93 million or its appraised value. The Lease also includes other customary terms for an agreement of this kind.
The agreements described in this Current Report on Form 8-K and the transactions contemplated thereby were reviewed and approved by the disinterested members of the Board and the Audit Committee of the Board in accordance with the Company’s Related Party Transaction Policy.
The foregoing description of the terms of the Purchase Agreement and the Lease does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Purchase Agreement and the Lease, copies of which are included as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K, and are incorporated herein by reference.
Item 7.01 Regulation FD.
On October 6, 2026, the Company issued a press release (the “Release”) announcing the sale-leaseback of the Durango Property. A copy of the Release is attached hereto as Exhibit 99.1.
The information contained in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be deemed incorporated by reference into any other filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language included in such filing, except as expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |
| 10.1 | Contract to Buy and Sell Real Estate (Commercial), effective September 30, 2026, between Rocky Mountain Chocolate Factory, Inc. and American Heritage Legacies, LLC. | |
| 10.2 | Commercial Lease, dated October 1, 2026, between American Heritage Legacies, LLC and Rocky Mountain Chocolate Factory, Inc. | |
| 99.1 | Press Release, dated October 6, 2026. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
Date: October 6, 2026 |
ROCKY MOUNTAIN CHOCOLATE FACTORY, INC. | |
| By: | /s/ Carrie Cass | |
|
Carrie Cass | ||
| Chief Financial Officer | ||
2
Exhibit 10.1
| The printed portions of this form, except differentiated additions, have been approved by the Colorado Real Estate Commission. (CBS3-6-24) (Mandatory 8-24) |
THIS FORM HAS IMPORTANT LEGAL CONSEQUENCES AND THE PARTIES SHOULD CONSULT LEGAL AND TAX OR OTHER COUNSEL BEFORE SIGNING.
CONTRACT TO BUY AND SELL REAL ESTATE
(COMMERCIAL)
(☒ Property with No Residences)
(☐ Property with Residences-Residential Addendum Attached)
Date: September 8, 2026
| AGREEMENT |
1. AGREEMENT. Buyer agrees to buy and Seller agrees to sell the Property described below on the terms and conditions set forth in this contract (Contract).
2. PARTIES AND PROPERTY.
2.1. Buyer. American Heritage Legacies, LLC (Buyer) will take title to the Property described below as ☐ Joint Tenants ☐ Tenants In Common ☒ Other in severalty.
2.2. No Assignability. This Contract IS NOT assignable by Buyer unless otherwise specified in Additional Provisions.
2.3. Seller. ROCKY MOUNTAIN CHOCOLATE FACTORY, INC. (Seller) is the current owner of the Property described below.
2.4. Property. The Property is the following legally described real estate in the County of La Plata, Colorado (insert legal description):
Tract A of the BODO BUSINESS RANCHES, UNIT III, CRAIL LOT CONSOLIDATION, PROJECT NO. 93-206, according to the plat thereof filed for record December 14, 1993 as Reception No. 659418.
| known as: | 265 Turner Drive | Durango | CO | 81303, |
| Street Address | City | State | Zip |
together with the interests, easements, rights, benefits, improvements and attached fixtures appurtenant thereto and all interest of Seller in vacated streets and alleys adjacent thereto, except as herein excluded (Property).
2.5. Inclusions. The Purchase Price includes the following items (Inclusions):
2.5.1. Inclusions – Attached. If attached to the Property on the date of this Contract, the following items are included unless excluded under Exclusions: lighting, heating, plumbing, ventilating and air conditioning units, TV antennas, inside telephone, network and coaxial (cable) wiring and connecting blocks/jacks, plants, mirrors, floor coverings, intercom systems, built-in kitchen appliances, sprinkler systems and controls, built-in vacuum systems (including accessories) and garage door openers (including _______ remote controls). If checked, the following are owned by the Seller and included: ☐ Solar Panels ☐ Water Softeners ☒ Security Systems ☐ Satellite Systems (including satellite dishes). Leased items should be listed under § 2.5.8. (Leased Items). If any additional items are attached to the Property after the date of this Contract, such additional items are also included in the Purchase Price.
2.5.2. Inclusions – Not Attached. If on the Property, whether attached or not, on the date of this Contract, the following items are included unless excluded under Exclusions: storm windows, storm doors, window and porch shades, awnings, blinds, screens, window coverings and treatments, curtain rods, drapery rods, fireplace inserts, fireplace screens, fireplace grates, heating stoves, storage sheds, carbon monoxide alarms, smoke/fire detectors and all keys.
2.5.3. Other Inclusions. The following items, whether fixtures or personal property, are also included in the Purchase Price: None.
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2.5.4. Encumbered Inclusions. Any Inclusions owned by Seller (e.g., owned solar panels) must be conveyed at Closing by Seller free and clear of all taxes (except personal property and general real estate taxes for the year of Closing), liens and encumbrances, except: None.
Buyer ☐ Will ☐ Will Not assume the debt and obligations on the Encumbered Inclusions subject to Buyer’s review under §10.6. (Encumbered Inclusion Documents) and Buyer’s receipt of written approval by such lender before Closing. If Buyer does not receive such approval this Contract terminates.
2.5.5. Personal Property Conveyance. Conveyance of all personal property will be by bill of sale or other applicable legal instrument.
2.5.6. Parking and Storage Facilities. The use or ownership of the following parking facilities: ______________________; and the use or ownership of the following storage facilities: ______________________. Note to Buyer: If exact rights to the parking and storage facilities is a concern to Buyer, Buyer should investigate.
2.5.7. Trade Fixtures. With respect to trade fixtures, Seller and Buyer agree as follows: Trade fixtures located at or attached to the Property shall remain the property of the Seller, subject to the terms and conditions of the Commercial Lease from Buyer to Seller described in paragraph 30.
2.5.8. Leased Items. The following personal property is currently leased to Seller which will be transferred to Buyer at Closing (Leased Items): None.
Buyer ☐ Will ☐ Will Not assume Seller’s debt and obligations under such leases for the Leased Items subject to Buyer’s review under §10.6. (Leased Items Documents) and Buyer’s receipt of written approval by such lender before Closing. If Buyer does not receive such approval this Contract terminates.
☐ 2.5.9. Solar Power Plan. If the box is checked, Seller has entered into a solar power purchase agreement, regardless of the name or title, to authorize a third-party to operate and maintain a photovoltaic system on the Property and provide electricity (Solar Power Plan) that will remain in effect after Closing. Buyer ☐ Will ☐ Will Not assume Seller’s obligations under such Solar Power Plan subject to Buyer’s review under §10.6. (Solar Power Plan) and Buyer’s receipt of written approval by the third-party before Closing. If Buyer does not receive such approval this Contract terminates.
2.6. Exclusions. The following items are excluded (Exclusions): All furniture, unattached equipment, and inventory of Seller.
2.7. Water Rights/Well Rights- intentionally deleted.
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3. DATES, DEADLINES AND APPLICABILITY.
3.1. Dates and Deadlines.
Item No. |
Reference | Event | Date or Deadline |
| 1 | § 3 | Time of Day Deadline | 5:00 P.M. |
| 2 | § 4 | Alternative Earnest Money Deadline | |
| Title | |||
| 3 | § 8 | Record Title Deadline (and Tax Certificate) | 7 days after MEC |
| 4 | § 8 | Record Title Objection Deadline | 14 days after MEC |
| 5 | § 8 | Off-Record Title Deadline | 7 days after MEC |
| 6 | § 8 | Off-Record Title Objection Deadline | 14 days after MEC |
| 7 | § 8 | Title Resolution Deadline | 17 days after MEC |
| 8 | § 8 | Third Party Right to Purchase/Approve Deadline | N/A |
| Owners’ Association | |||
| 9 | § 7 | Association Documents Deadline | N/A |
| 10 | § 7 | Association Documents Termination Deadline | N/A |
| Seller’s Disclosures | |||
| 11 | § 10 | Seller’s Property Disclosure Deadline | 7 days after MEC |
| 12 | § 10 | Lead-Based Paint Disclosure Deadline (if Residential Addendum attached) | N/A |
| Loan and Credit | |||
| 13 | § 5 | New Loan Application Deadline | At Buyer’s discretion |
| 14 | § 5 | New Loan Terms Deadline | 14 days after MEC |
| 15 | § 5 | New Loan Availability Deadline | 14 days after MEC |
| 16 | § 5 | Buyer’s Credit Information Deadline | N/A |
| 17 | § 5 | Disapproval of Buyer’s Credit Information Deadline | N/A |
| 18 | § 5 | Existing Loan Deadline | N/A |
| 19 | § 5 | Existing Loan Termination Deadline | N/A |
| 20 | § 5 | Loan Transfer Approval Deadline | N/A |
| 21 | § 4 | Seller or Private Financing Deadline | N/A |
| Appraisal | |||
| 22 | § 6 | Appraisal Deadline | Completed |
| 23 | § 6 | Appraisal Objection Deadline | 14 days after MEC |
| 24 | § 6 | Appraisal Resolution Deadline | N/A |
| Survey | |||
| 25 | § 9 | New ILC or New Survey Deadline | 14 days after MEC |
| 26 | § 9 | New ILC or New Survey Objection Deadline | 17 days after MEC |
| 27 | § 9 | New ILC or New Survey Resolution Deadline | 21 days after MEC |
| Inspection and Due Diligence | |||
| 28 | § 2 | Water Rights Examination Deadline | N/A |
| 29 | § 8 | Mineral Rights Examination Deadline | N/A |
| 30 | § 10 | Inspection Termination Deadline | 14 days after MEC |
| 31 | § 10 | Inspection Objection Deadline | 14 days after MEC |
| 32 | § 10 | Inspection Resolution Deadline | 17 days after MEC |
| 33 | § 10 | Property Insurance Termination Deadline | 14 days after MEC |
| 34 | § 10 | Due Diligence Documents Delivery Deadline | 7 days after MEC |
| 35 | § 10 | Due Diligence Documents Objection Deadline | 14 days after MEC |
| 36 | § 10 | Due Diligence Documents Resolution Deadline | 17 days after MEC |
| 37 | § 10 | Environmental Inspection Termination Deadline | 17 days after MEC |
| 38 | § 10 | ADA Evaluation Termination Deadline | 17 days after MEC |
| 39 | § 10 | Conditional Sale Deadline | N/A |
| 40 | § 10 | Lead-Based Paint Termination Deadline (if Residential Addendum attached) | N/A |
| 41 | § 11 | Estoppel Statements Deadline | N/A |
| 42 | § 11 | Estoppel Statements Termination Deadline | N/A |
| Closing and Possession | |||
| 43 | § 12 | Closing Date | 21 days after MEC |
| 44 | § 17 | Possession Date | At Closing |
| 45 | § 17 | Possession Time | At Closing |
| 46 | § 27 | Acceptance Deadline Date | October 1, 2026 |
| 47 | § 27 | Acceptance Deadline Time | 5:00 P.M. |
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3.2. Applicability of Terms. If any deadline blank in § 3.1. (Dates and Deadlines) is left blank or completed with “N/A”, or the word “Deleted,” such deadline is not applicable and the corresponding provision containing the deadline is deleted. Any box checked in this Contract means the corresponding provision applies. If no box is checked in a provision that contains a selection of “None”, such provision means that “None” applies.
The abbreviation “MEC” (mutual execution of this Contract) means the date upon which both parties have signed this Contract. The abbreviation “N/A” as used in this Contract means not applicable.
3.3. Day; Computation of Period of Days; Deadlines.
3.3.1. Day. As used in this Contract, the term “day” means the entire day ending at 11:59 p.m., United States Mountain Time (Standard or Daylight Savings, as applicable). Except however, if a Time of Day Deadline is specified in § 3.1. (Dates and Deadlines), all Objection Deadlines, Resolution Deadlines, Examination Deadlines and Termination Deadlines will end on the specified deadline date at the time of day specified in the Time of Day Deadline, United States Mountain Time. If Time of Day Deadline is left blank or “N/A” the deadlines will expire at 11:59 p.m., United States Mountain Time.
3.3.2. Computation of Period of Days. In computing a period of days (e.g., three days after MEC), when the ending date is not specified, the first day is excluded and the last day is included.
3.3.3. Deadlines. If any deadline falls on a Saturday, Sunday or federal or Colorado state holiday (Holiday), such deadline ☒ Will ☐ Will Not be extended to the next day that is not a Saturday, Sunday or Holiday. Should neither box be checked, the deadline will not be extended.
4. PURCHASE PRICE AND TERMS.
4.1. Price and Terms. The Purchase Price set forth below is payable in U.S. Dollars by Buyer as follows:
Item No. |
Reference | Item | Amount | Amount | ||
| 1 | § 4.1. | Purchase Price | $ | 6,600,000.00 | ||
| 2 | § 4.3. | Earnest Money | $ | |||
| 3 | § 4.5. | New Loan | $ | 6,600,000.00 | ||
| 4 | § 4.6. | Assumption Balance | $ | |||
| 5 | § 4.7. | Private Financing | $ | |||
| 6 | § 4.7. | Seller Financing | $ | |||
| 7 | ||||||
| 8 | ||||||
| 9 | § 4.4. | Cash at Closing | $ | |||
| 10 | TOTAL | $ | 6,600,000.00 | $ | 6,600,000.00 | |
4.2. Seller Concession- intentionally deleted.
4.3. Earnest Money. The Earnest Money set forth in this Section, in the form of a N/A, will be payable to and held by N/A (Earnest Money Holder), in its trust account, on behalf of both Seller and Buyer. The Earnest Money deposit must be tendered, by Buyer, with this Contract unless the parties mutually agree to an Alternative Earnest Money Deadline for its payment. The parties authorize delivery of the Earnest Money deposit to the company conducting the Closing (Closing Company), if any, at or before Closing. In the event Earnest Money Holder has agreed to have interest on Earnest Money deposits transferred to a fund established for the purpose of providing affordable housing to Colorado residents, Seller and Buyer acknowledge and agree that any interest accruing on the Earnest Money deposited with the Earnest Money Holder in this transaction will be transferred to such fund.
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4.3.1. Alternative Earnest Money Deadline. The deadline for delivering the Earnest Money, if other than at the time of tender of this Contract, is as set forth as the Alternative Earnest Money Deadline.
4.3.2. Disposition of Earnest Money. If Buyer has a Right to Terminate and timely terminates, Buyer is entitled to the return of Earnest Money as provided in this Contract. If this Contract is terminated as set forth in § 24 and, except as provided in § 23 (Earnest Money Dispute), if the Earnest Money has not already been returned following receipt of a Notice to Terminate, Seller agrees to execute and return to Buyer or Broker working with Buyer, written mutual instructions (e.g., Earnest Money Release form), within three days of Seller’s receipt of such form. If Seller is entitled to the Earnest Money, and, except as provided in § 23 (Earnest Money Dispute), if the Earnest Money has not already been paid to Seller, following receipt of an Earnest Money Release form, Buyer agrees to execute and return to Seller or Broker working with Seller, written mutual instructions (e.g., Earnest Money Release form), within three days of Buyer’s receipt.
4.3.2.1. Seller Failure to Timely Return Earnest Money. If Seller fails to timely execute and return the Earnest Money Release Form, or other written mutual instructions, Seller is in default and liable to Buyer as set forth in “If Seller is in Default”, § 20.2. and § 21, unless Seller is entitled to the Earnest Money due to a Buyer default.
4.3.2.2. Buyer Failure to Timely Release Earnest Money. If Buyer fails to timely execute and return the Earnest Money Release Form, or other written mutual instructions, Buyer is in default and liable to Seller as set forth in “If Buyer is in Default, § 20.1. and § 21, unless Buyer is entitled to the Earnest Money due to a Seller Default.
4.4. Form of Funds; Time of Payment; Available Funds.
4.4.1. Good Funds. All amounts payable by the parties at Closing, including any loan proceeds, Cash at Closing and closing costs, must be in funds that comply with all applicable Colorado laws, including electronic transfer funds, certified check, savings and loan teller’s check and cashier’s check (Good Funds).
4.4.2. Time of Payment. All funds, including the Purchase Price to be paid by Buyer, must be paid before or at Closing or as otherwise agreed in writing between the parties to allow disbursement by Closing Company at Closing OR SUCH NONPAYING PARTY WILL BE IN DEFAULT.
4.4.3. Available Funds. Buyer represents that Buyer, as of the date of this Contract, ☐ Does ☒ Does Not have funds that are immediately verifiable and available in an amount not less than the amount stated as Cash at Closing in § 4.1.
4.5. New Loan.
4.5.1. Buyer to Pay Loan Costs. Buyer, except as otherwise permitted in § 4.2. (Seller Concession), if applicable, must timely pay Buyer’s loan costs, loan discount points, prepaid items and loan origination fees as required by lender.
4.5.2. Buyer May Select Financing. Buyer may pay in cash or select financing appropriate and acceptable to Buyer, including a different loan than initially sought, except as restricted in § 4.5.3. (Loan Limitations) or § 30 (Additional Provisions).
4.5.3. Loan Limitations. Buyer may purchase the Property using any of the following types of loans: ☐ Conventional ☒ Other Any loan acceptable to Buyer.
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4.6. Assumption- intentionally deleted.
4.7. Seller or Private Financing- intentionally deleted.
| TRANSACTION PROVISIONS |
5. FINANCING CONDITIONS AND OBLIGATIONS.
5.1. New Loan, Assumption Application. If Buyer is to pay all or part of the Purchase Price by obtaining one or more new loans (New Loan), or if an existing loan is not to be released at Closing, Buyer, if required by such lender, must make an application verifiable by such lender, on or before New Loan Application Deadline and exercise reasonable efforts to obtain such loan or approval.
5.2. New Loan Terms; New Loan Availability.
5.2.1. New Loan Terms. If Buyer is to pay all or part of the Purchase Price with a New Loan, this Contract is conditional upon Buyer determining, in Buyer’s sole subjective discretion, whether the proposed New Loan’s payments, interest rate, conditions and costs or any other loan terms (New Loan Terms) are satisfactory to Buyer. This condition is for the sole benefit of Buyer. Buyer has the Right to Terminate under § 24.1., on or before New Loan Terms Deadline, if the New Loan Terms are not satisfactory to Buyer, in Buyer’s sole subjective discretion.
5.2.2. New Loan Availability. If Buyer is to pay all or part of the Purchase Price with a New Loan, this Contract is conditional upon Buyer’s satisfaction with the availability of the New Loan based on the lender’s review and underwriting of Buyer’s New Loan Application (New Loan Availability). Buyer has the Right to Terminate under § 24.1., on or before the New Loan Availability Deadline if the New Loan Availability is not satisfactory to Buyer. Buyer does not have a Right to Terminate based on the New Loan Availability if the termination is based on the New Loan Terms, Appraised Value (defined below), the Lender Property Requirements (defined below), Insurability (§ 10.5. below) or the Conditional Upon Sale of Property (§ 10.7. below). IF SELLER IS NOT IN DEFAULT AND DOES NOT TIMELY RECEIVE BUYER’S WRITTEN NOTICE TO TERMINATE, BUYER’S EARNEST MONEY WILL BE NONREFUNDABLE, except as otherwise provided in this Contract (e.g., Appraisal, Title, Survey).
5.3. Credit Information- intentionally deleted.
5.4. Existing Loan Review- intentionally deleted.
6. APPRAISAL PROVISIONS.
6.1. Appraisal Definition. An “Appraisal” is an opinion of value prepared by a licensed or certified appraiser, engaged on behalf of Buyer or Buyer’s lender, to determine the Property’s market value (Appraised Value). The Appraisal may also set forth certain lender requirements, replacements, removals or repairs necessary on or to the Property as a condition for the Property to be valued at the Appraised Value.
6.2. Appraised Value. The applicable appraisal provision set forth below applies to the respective loan type set forth in § 4.5.3., or if a cash transaction (i.e., no financing), § 6.2.1. applies.
6.2.1. Conventional/Other. Buyer has the right to obtain an Appraisal. If the Appraised Value is less than the Purchase Price, or if the Appraisal is not received by Buyer on or before Appraisal Deadline Buyer may, on or before Appraisal Objection Deadline:
6.2.1.1. Notice to Terminate. Notify Seller in writing, pursuant to § 24.1., that this Contract is terminated; or
6.2.1.2. Appraisal Objection. Deliver to Seller a written objection accompanied by either a copy of the Appraisal or written notice from lender that confirms the Appraised Value is less than the Purchase Price (Lender Verification).
6.2.1.3. Appraisal Resolution. If an Appraisal Objection is received by Seller, on or before Appraisal Objection Deadline and if Buyer and Seller have not agreed in writing to a settlement thereof on or before Appraisal Resolution Deadline, this Contract will terminate on the Appraisal Resolution Deadline, unless Seller receives Buyer’s written withdrawal of the Appraisal Objection before such termination, (i.e., on or before expiration of Appraisal Resolution Deadline).
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6.3. Lender Property Requirements. If the lender imposes any written requirements, replacements, removals or repairs, including any specified in the Appraisal (Lender Property Requirements) to be made to the Property (e.g., roof repair, repainting), beyond those matters already agreed to by Seller in this Contract, this Contract terminates on the earlier of three days following Seller’s receipt of the Lender Property Requirements, or Closing, unless prior to termination: (1) the parties enter into a written agreement to satisfy the Lender Property Requirements; (2) the Lender Property Requirements have been completed; or (3) the satisfaction of the Lender Property Requirements is waived in writing by Buyer.
6.4. Cost of Appraisal. Cost of the Appraisal to be obtained after the date of this Contract must be timely paid by ☒ Buyer ☐ Seller. The cost of the Appraisal may include any and all fees paid to the appraiser, appraisal management company, lender’s agent or all three.
7. OWNERS’ ASSOCIATIONS. This Section is applicable if the Property is located within one or more Common Interest Communities and subject to one or more declarations (Association).
7.1. Common Interest Community Disclosure. THE PROPERTY IS LOCATED WITHIN A COMMON INTEREST COMMUNITY AND IS SUBJECT TO THE DECLARATION FOR THE COMMUNITY. THE OWNER OF THE PROPERTY WILL BE REQUIRED TO BE A MEMBER OF THE OWNERS’ ASSOCIATION FOR THE COMMUNITY AND WILL BE SUBJECT TO THE BYLAWS AND RULES AND REGULATIONS OF THE ASSOCIATION. THE DECLARATION, BYLAWS AND RULES AND REGULATIONS WILL IMPOSE FINANCIAL OBLIGATIONS UPON THE OWNER OF THE PROPERTY, INCLUDING AN OBLIGATION TO PAY ASSESSMENTS OF THE ASSOCIATION. IF THE OWNER DOES NOT PAY THESE ASSESSMENTS, THE ASSOCIATION COULD PLACE A LIEN ON THE PROPERTY AND POSSIBLY SELL IT TO PAY THE DEBT. THE DECLARATION, BYLAWS AND RULES AND REGULATIONS OF THE COMMUNITY MAY PROHIBIT THE OWNER FROM MAKING CHANGES TO THE PROPERTY WITHOUT AN ARCHITECTURAL REVIEW BY THE ASSOCIATION (OR A COMMITTEE OF THE ASSOCIATION) AND THE APPROVAL OF THE ASSOCIATION. PURCHASERS OF PROPERTY WITHIN THE COMMON INTEREST COMMUNITY SHOULD INVESTIGATE THE FINANCIAL OBLIGATIONS OF MEMBERS OF THE ASSOCIATION. PURCHASERS SHOULD CAREFULLY READ THE DECLARATION FOR THE COMMUNITY AND THE BYLAWS AND RULES AND REGULATIONS OF THE ASSOCIATION.
7.2. Association Documents to Buyer. Seller is obligated to provide to Buyer the Association Documents (defined below), at Seller’s expense, on or before Association Documents Deadline. Seller authorizes the Association to provide the Association Documents to Buyer, at Seller’s expense. Seller’s obligation to provide the Association Documents is fulfilled upon Buyer’s receipt of the Association Documents, regardless of who provides such documents.
7.3. Association Documents. Association documents (Association Documents) consist of the following:
7.3.1. All Association declarations, articles of incorporation, bylaws, articles of organization, operating agreements, rules and regulations, party wall agreements and the Association’s responsible governance policies adopted under § 38-33.3-209.5, C.R.S.;
7.3.2. Minutes of: (1) the annual owners’ or members’ meeting and (2) any executive boards’ or managers’ meetings; such minutes include those provided under the most current annual disclosure required under § 38-33.3-209.4, C.R.S. (Annual Disclosure) and minutes of meetings, if any, subsequent to the minutes disclosed in the Annual Disclosure. If none of the preceding minutes exist, then the most recent minutes, if any (§§ 7.3.1. and 7.3.2., collectively, Governing Documents); and
7.3.3. List of all Association insurance policies as provided in the Association’s last Annual Disclosure, including, but not limited to, property, general liability, association director and officer professional liability and fidelity policies. The list must include the company names, policy limits, policy deductibles, additional named insureds and expiration dates of the policies listed (Association Insurance Documents);
7.3.4. A list by unit type of the Association’s assessments, including both regular and special assessments as disclosed in the Association’s last Annual Disclosure;
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7.3.5. The Association’s most recent financial documents which consist of: (1) the Association’s operating budget for the current fiscal year, (2) the Association’s most recent annual financial statements, including any amounts held in reserve for the fiscal year immediately preceding the Association’s last Annual Disclosure, (3) the results of the Association’s most recent available financial audit or review, (4) list of the fees and charges (regardless of name or title of such fees or charges) that the Association’s community association manager or Association will charge in connection with the Closing including, but not limited to, any fee incident to the issuance of the Association’s statement of assessments (Status Letter), any rush or update fee charged for the Status Letter, any record change fee or ownership record transfer fees (Record Change Fee), fees to access documents, (5) list of all assessments required to be paid in advance, reserves or working capital due at Closing and (6) reserve study, if any (§§ 7.3.4. and 7.3.5., collectively, Financial Documents);
7.3.6. Any written notice from the Association to Seller of a “construction defect action” under § 38-33.3-303.5, C.R.S. within the past six months and the result of whether the Association approved or disapproved such action (Construction Defect Documents). Nothing in this Section limits the Seller’s obligation to disclose adverse material facts as required under § 10.2. (Disclosure of Adverse Material Facts; Subsequent Disclosure; Present Condition) including any problems or defects in the common elements or limited common elements of the Association property.
7.4. Conditional on Buyer’s Review. Buyer has the right to review the Association Documents. Buyer has the Right to Terminate under § 24.1., on or before Association Documents Termination Deadline, based on any unsatisfactory provision in any of the Association Documents, in Buyer’s sole subjective discretion. Should Buyer receive the Association Documents after Association Documents Deadline, Buyer, at Buyer’s option, has the Right to Terminate under § 24.1. by Buyer’s Notice to Terminate received by Seller on or before ten days after Buyer’s receipt of the Association Documents. If Buyer does not receive the Association Documents, or if Buyer’s Notice to Terminate would otherwise be required to be received by Seller after Closing Date, Buyer’s Notice to Terminate must be received by Seller on or before Closing. If Seller does not receive Buyer’s Notice to Terminate within such time, Buyer accepts the provisions of the Association Documents as satisfactory and Buyer waives any Right to Terminate under this provision, notwithstanding the provisions of § 8.6. (Third Party Right to Purchase/Approve).
8. TITLE INSURANCE, RECORD TITLE AND OFF-RECORD TITLE.
8.1. Evidence of Record Title.
☒ 8.1.1. Seller Selects Title Insurance Company. If this box is checked, Seller will select the title insurance company to furnish the owner’s title insurance policy at Seller’s expense. On or before Record Title Deadline, Seller must furnish to Buyer, a current commitment for an owner’s title insurance policy (Title Commitment), in an amount equal to the Purchase Price, or if this box is checked, ☐ an Abstract of Title certified to a current date. Seller will cause the title insurance policy to be issued and delivered to Buyer as soon as practicable at or after Closing.
☐ 8.1.2. Buyer Selects Title Insurance Company. If this box is checked, Buyer will select the title insurance company to furnish the owner’s title insurance policy at Buyer’s expense. On or before Record Title Deadline, Buyer must furnish to Seller, a current commitment for owner’s title insurance policy (Title Commitment), in an amount equal to the Purchase Price.
If neither box in § 8.1.1. or § 8.1.2. is checked, § 8.1.1. applies.
8.1.3. Owner’s Extended Coverage (OEC). The Title Commitment ☒ Will ☐ Will Not contain Owner’s Extended Coverage (OEC). If the Title Commitment is to contain OEC, it will commit to delete or insure over the standard exceptions which relate to: (1) parties in possession, (2) unrecorded easements, (3) survey matters, (4) unrecorded mechanics’ liens, (5) gap period (period between the effective date and time of commitment to the date and time the deed is recorded) and (6) unpaid taxes, assessments and unredeemed tax sales prior to the year of Closing. Any additional premium expense to obtain OEC will be paid by ☐ Buyer ☒ Seller ☐ One-Half by Buyer and One-Half by Seller ☐ Other__________________________.
Regardless of whether the Contract requires OEC, the Title Insurance Commitment may not provide OEC or delete or insure over any or all of the standard exceptions for OEC. The Title Insurance Company may require a New Survey or New ILC, defined below, among other requirements for OEC. If the Title Insurance Commitment is not satisfactory to Buyer, Buyer has a right to object under § 8.7. (Right to Object to Title, Resolution).
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8.1.4. Title Documents. Title Documents consist of the following: (1) copies of any plats, declarations, covenants, conditions and restrictions burdening the Property and (2) copies of any other documents (or, if illegible, summaries of such documents) listed in the schedule of exceptions (Exceptions) in the Title Commitment furnished to Buyer (collectively, Title Documents).
8.1.5. Copies of Title Documents. Buyer must receive, on or before Record Title Deadline, copies of all Title Documents. This requirement pertains only to documents as shown of record in the office of the clerk and recorder in the county where the Property is located. The cost of furnishing copies of the documents required in this Section will be at the expense of the party or parties obligated to pay for the owner’s title insurance policy.
8.1.6. Existing Abstracts of Title. Seller must deliver to Buyer copies of any abstracts of title covering all or any portion of the Property (Abstract of Title) in Seller’s possession on or before Record Title Deadline.
8.2. Record Title. Buyer has the right to review and object to the Abstract of Title or Title Commitment and any of the Title Documents as set forth in § 8.7. (Right to Object to Title, Resolution) on or before Record Title Objection Deadline. Buyer’s objection may be based on any unsatisfactory form or content of Title Commitment or Abstract of Title, notwithstanding § 13, or any other unsatisfactory title condition, in Buyer’s sole subjective discretion. If the Abstract of Title, Title Commitment or Title Documents are not received by Buyer on or before the Record Title Deadline, or if there is an endorsement to the Title Commitment that adds a new Exception to title, a copy of the new Exception to title and the modified Title Commitment will be delivered to Buyer. Buyer has until the earlier of Closing or ten days after receipt of such documents by Buyer to review and object to: (1) any required Title Document not timely received by Buyer, (2) any change to the Abstract of Title, Title Commitment or Title Documents, or (3) any endorsement to the Title Commitment. If Seller receives Buyer’s Notice to Terminate or Notice of Title Objection, pursuant to this § 8.2. (Record Title), any title objection by Buyer is governed by the provisions set forth in § 8.7. (Right to Object to Title, Resolution). If Seller has fulfilled all Seller’s obligations, if any, to deliver to Buyer all documents required by § 8.1. (Evidence of Record Title) and Seller does not receive Buyer’s Notice to Terminate or Notice of Title Objection by the applicable deadline specified above, Buyer accepts the condition of title as disclosed by the Abstract of Title, Title Commitment and Title Documents as satisfactory.
8.3. Off-Record Title. Seller must deliver to Buyer, on or before Off-Record Title Deadline, true copies of all existing surveys in Seller’s possession pertaining to the Property and must disclose to Buyer all easements, liens (including, without limitation, governmental improvements approved, but not yet installed) or other title matters not shown by public records, of which Seller has actual knowledge (Off-Record Matters). This Section excludes any New ILC or New Survey governed under § 9 (New ILC, New Survey). Buyer has the right to inspect the Property to investigate if any third party has any right in the Property not shown by public records (e.g., unrecorded easement, boundary line discrepancy or water rights). Buyer’s Notice to Terminate or Notice of Title Objection of any unsatisfactory condition (whether disclosed by Seller or revealed by such inspection, notwithstanding § 8.2. (Record Title) and § 13 (Transfer of Title)), in Buyer’s sole subjective discretion, must be received by Seller on or before Off-Record Title Objection Deadline. If an Off-Record Matter is received by Buyer after the Off-Record Title Deadline, Buyer has until the earlier of Closing or ten days after receipt by Buyer to review and object to such Off-Record Matter. If Seller receives Buyer’s Notice to Terminate or Notice of Title Objection pursuant to this § 8.3. (Off-Record Title), any title objection by Buyer is governed by the provisions set forth in § 8.7. (Right to Object to Title, Resolution). If Seller does not receive Buyer’s Notice to Terminate or Notice of Title Objection by the applicable deadline specified above, Buyer accepts title subject to such Off-Record Matters and rights, if any, of third parties not shown by public records of which Buyer has actual knowledge.
8.4. Special Taxing and Metropolitan Districts. Intentionally Deleted.
8.5. Tax Certificate. A tax certificate paid for by ☒ Seller ☐ Buyer, for the Property (Tax Certificate) must be delivered to Buyer on or before Record Title Deadline. If the content of the Tax Certificate is unsatisfactory to Buyer, in Buyer’s sole subjective discretion, Buyer may terminate, on or before Record Title Objection Deadline. Should Buyer receive the Tax Certificate after Record Title Deadline, Buyer, at Buyer’s option, has the Right to Terminate under § 24.1. by Buyer’s Notice to Terminate received by Seller on or before ten days after Buyer’s receipt of the Tax Certificate. If Buyer does not receive the Tax Certificate, or if Buyer’s Notice to Terminate would otherwise be required to be received by Seller after Closing Date, Buyer’s Notice to Terminate must be received by Seller on or before Closing. If Seller does not receive Buyer’s Notice to Terminate within such time, Buyer accepts the content of the Tax Certificate as satisfactory and Buyer waives any Right to Terminate under this provision. If Buyer’s loan specified in §4.5.3. (Loan Limitations) prohibits Buyer from paying for the Tax Certificate, the Tax Certificate will be paid for by Seller.
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8.6. Third Party Right to Purchase/Approve- intentionally deleted.
8.7. Right to Object to Title, Resolution. Buyer has a right to object or terminate, in Buyer’s sole subjective discretion, based on any title matters including those matters set forth in § 8.2. (Record Title), § 8.3. (Off-Record Title), § 8.5. (Tax Certificate) and § 13 (Transfer of Title). If Buyer exercises Buyer’s rights to object or terminate based on any such title matter, on or before the applicable deadline, Buyer has the following options:
8.7.1. Title Objection, Resolution. If Seller receives Buyer’s written notice objecting to any title matter (Notice of Title Objection) on or before the applicable deadline and if Buyer and Seller have not agreed to a written settlement thereof on or before Title Resolution Deadline, this Contract will terminate on the expiration of Title Resolution Deadline, unless Seller receives Buyer’s written withdrawal of Buyer’s Notice of Title Objection (i.e., Buyer’s written notice to waive objection to such items and waives the Right to Terminate for that reason), on or before expiration of Title Resolution Deadline. If either the Record Title Deadline or the Off-Record Title Deadline, or both, are extended pursuant to § 8.2. (Record Title) or § 8.3. (Off-Record Title) the Title Resolution Deadline also will be automatically extended to the earlier of Closing or fifteen days after Buyer’s receipt of the applicable documents; or
8.7.2. Title Objection, Right to Terminate. Buyer may exercise the Right to Terminate under § 24.1., on or before the applicable deadline, based on any title matter unsatisfactory to Buyer, in Buyer’s sole subjective discretion.
8.8. Title Advisory. The Title Documents affect the title, ownership and use of the Property and should be reviewed carefully. Additionally, other matters not reflected in the Title Documents may affect the title, ownership and use of the Property, including, without limitation, boundary lines and encroachments, set-back requirements, area, zoning, building code violations, unrecorded easements and claims of easements, leases and other unrecorded agreements, water on or under the Property and various laws and governmental regulations concerning land use, development and environmental matters.
8.8.1. Oil, Gas, Water and Mineral Disclosure. The surface estate of the Property may be owned separately from the underlying mineral estate and transfer of the surface estate may not necessarily include transfer of the mineral estate or water rights. Third parties may own or lease interests in oil, gas, other minerals, geothermal energy or water on or under the surface of the Property, which interests may give them rights to enter and use the surface of the Property to access the mineral estate, oil, gas or water.
8.8.2. Surface Use Agreement. The use of the surface estate of the Property to access the oil, gas or minerals may be governed by a surface use agreement, a memorandum or other notice of which may be recorded with the county clerk and recorder.
8.8.3. Oil and Gas Activity. Oil and gas activity that may occur on or adjacent to the Property may include, but is not limited to, surveying, drilling, well completion operations, storage, oil and gas, or production facilities, producing wells, reworking of current wells and gas gathering and processing facilities.
8.8.4. Additional Information. Buyer is encouraged to seek additional information regarding oil and gas activity on or adjacent to the Property, including drilling permit applications. This information may be available from the Colorado Oil and Gas Conservation Commission.
8.8.5. Title Insurance Exclusions. Matters set forth in this Section and others, may be excepted, excluded from, or not covered by the owner’s title insurance policy.
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8.9. Mineral Rights Review- intentionally deleted.
9. NEW ILC, NEW SURVEY.
9.1. New ILC or New Survey. If the box is checked, (1) ☐ New Improvement Location Certificate (New ILC); or, (2) ☒ New Survey in the form of survey sufficient for Owner’s Extended Coverage; is required and the following will apply:
9.1.1. Ordering of New ILC or New Survey. ☐ Seller ☒ Buyer will order the New ILC or New Survey. The New ILC or New Survey may also be a previous ILC or survey that is in the above-required form, certified and updated as of a date after the date of this Contract.
9.1.2. Payment for New ILC or New Survey. The cost of the New ILC or New Survey will be paid, on or before Closing, by: ☐ Seller ☒ Buyer or:
9.1.3. Delivery of New ILC or New Survey. Buyer, Seller, the issuer of the Title Commitment (or the provider of the opinion of title if an Abstract of Title) and Buyer’s attorney will receive a New ILC or New Survey on or before New ILC or New Survey Deadline.
9.1.4. Certification of New ILC or New Survey. The New ILC or New Survey will be certified by the surveyor to all those who are to receive the New ILC or New Survey.
9.2. Buyer’s Right to Waive or Change New ILC or New Survey Selection. Buyer may select a New ILC or New Survey different than initially specified in this Contract if there is no additional cost to Seller or change to the New ILC or New Survey Objection Deadline. Buyer may, in Buyer’s sole subjective discretion, waive a New ILC or New Survey if done prior to Seller incurring any cost for the same.
9.3. New ILC or New Survey Objection. Buyer has the right to review and object based on the New ILC or New Survey. If the New ILC or New Survey is not timely received by Buyer or is unsatisfactory to Buyer, in Buyer’s sole subjective discretion, Buyer may, on or before New ILC or New Survey Objection Deadline, notwithstanding § 8.3. or § 13:
9.3.1. Notice to Terminate. Notify Seller in writing, pursuant to § 24.1, that this Contract is terminated; or
9.3.2. New ILC or New Survey Objection. Deliver to Seller a written description of any matter that was to be shown or is shown in the New ILC or New Survey that is unsatisfactory and that Buyer requires Seller to correct.
9.3.3. New ILC or New Survey Resolution. If a New ILC or New Survey Objection is received by Seller, on or before New ILC or New Survey Objection Deadline and if Buyer and Seller have not agreed in writing to a settlement thereof on or before New ILC or New Survey Resolution Deadline, this Contract will terminate on expiration of the New ILC or New Survey Resolution Deadline, unless Seller receives Buyer’s written withdrawal of the New ILC or New Survey Objection before such termination (i.e., on or before expiration of New ILC or New Survey Resolution Deadline).
| DISCLOSURE, INSPECTION AND DUE DILIGENCE |
10. PROPERTY DISCLOSURE, INSPECTION, INDEMNITY, INSURABILITY, DUE DILIGENCE AND SOURCE OF WATER.
10.1. Seller’s Property Disclosure. On or before Seller’s Property Disclosure Deadline, Seller agrees to deliver to Buyer the most current version of the applicable Colorado Real Estate Commission’s Seller’s Property Disclosure form completed by Seller to Seller’s actual knowledge and current as of the date of this Contract.
10.2. Disclosure of Adverse Material Facts; Subsequent Disclosure; Present Condition. Seller must disclose to Buyer any adverse material facts actually known by Seller as of the date of this Contract. Seller agrees that disclosure of adverse material facts will be in writing. In the event Seller discovers an adverse material fact after the date of this Contract, Seller must timely disclose such adverse fact to Buyer. Buyer has the Right to Terminate based on the Seller’s new disclosure on the earlier of Closing or five days after Buyer’s receipt of the new disclosure. Except as otherwise provided in this Contract, Buyer acknowledges that Seller is conveying the Property and Inclusions to Buyer in an “As Is” condition, “Where Is” and “With All Faults.”
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10.3. Inspection. Unless otherwise provided in this Contract, Buyer, acting in good faith, has the right to have inspections (by one or more third parties, personally or both) of the Property, Leased Items, and Inclusions (Inspection), at Buyer’s expense. If (1) the physical condition of the Property, including, but not limited to, the roof, walls, structural integrity of the Property, the electrical, plumbing, HVAC and other mechanical systems of the Property, (2) the physical condition of the Inclusions and Leased Items, (3) service to the Property (including utilities and communication services), systems and components of the Property (e.g., heating and plumbing), (4) any proposed or existing transportation project, road, street or highway, or (5) any other activity, odor or noise (whether on or off the Property) and its effect or expected effect on the Property or its occupants is unsatisfactory, in Buyer’s sole subjective discretion, Buyer may:
10.3.1. Inspection Termination. On or before the Inspection Termination Deadline, notify Seller in writing, pursuant to § 24.1., that this Contract is terminated due to any unsatisfactory condition, provided the Buyer did not previously deliver an Inspection Objection. Buyer’s Right to Terminate under this provision expires upon delivery of an Inspection Objection to Seller pursuant to § 10.3.2.; or
10.3.2. Inspection Objection. On or before the Inspection Objection Deadline, deliver to Seller a written description of any unsatisfactory condition that Buyer requires Seller to correct.
10.3.3. Inspection Resolution. If an Inspection Objection is received by Seller, on or before Inspection Objection Deadline and if Buyer and Seller have not agreed in writing to a settlement thereof on or before Inspection Resolution Deadline, this Contract will terminate on Inspection Resolution Deadline unless Seller receives Buyer’s written withdrawal of the Inspection Objection before such termination (i.e., on or before expiration of Inspection Resolution Deadline). Nothing in this provision prohibits the Buyer and the Seller from mutually terminating this Contract before the Inspection Resolution Deadline passes by executing an Earnest Money Release.
10.4. Damage, Liens and Indemnity. Buyer, except as otherwise provided in this Contract or other written agreement between the parties, is responsible for payment for all inspections, tests, surveys, engineering reports, or other reports performed at Buyer’s request (Work) and must pay for any damage that occurs to the Property and Inclusions as a result of such Work. Buyer must not permit claims or liens of any kind against the Property for Work performed on the Property. Buyer agrees to indemnify, protect and hold Seller harmless from and against any liability, damage, cost or expense incurred by Seller and caused by any such Work, claim, or lien. This indemnity includes Seller’s right to recover all costs and expenses incurred by Seller to defend against any such liability, damage, cost or expense, or to enforce this Section, including Seller’s reasonable attorney fees, legal fees and expenses. The provisions of this Section survive the termination of this Contract. This § 10.4. does not apply to items performed pursuant to an Inspection Resolution.
10.5. Insurability. Buyer has the Right to Terminate under § 24.1., on or before Property Insurance Termination Deadline, based on any unsatisfactory provision of the availability, terms and conditions and premium for property insurance (Property Insurance) on the Property, in Buyer’s sole subjective discretion.
10.6. Due Diligence.
10.6.1. Due Diligence Documents. Seller agrees to deliver copies of the following documents and information pertaining to the Property and Leased Items (Due Diligence Documents) to Buyer on or before Due Diligence Documents Delivery Deadline:
10.6.1.1. Occupancy Agreements. All current leases, including any amendments or other occupancy agreements, pertaining to the Property. Those leases or other occupancy agreements pertaining to the Property that survive Closing are as follows (Leases): None.
10.6.1.2. Leased Items Documents. If any lease of personal property (§ 2.5.8., Leased Items) will be transferred to Buyer at Closing, Seller agrees to deliver copies of the leases and information pertaining to the personal property to Buyer on or before Due Diligence Documents Delivery Deadline.
10.6.1.3. Encumbered Inclusions Documents. If any Inclusions owned by Seller are encumbered pursuant to § 2.5.4. (Encumbered Inclusions) above, Seller agrees to deliver copies of the evidence of debt, security and any other documents creating the encumbrance to Buyer on or before Due Diligence Documents Delivery Deadline.
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10.6.1.4. Solar Power Plan. Copy of any Solar Power Plan not included in Leased Items (regardless of its name or title).
10.6.1.5. Septic Use Permit. If required by the local health department or other applicable government entity, on or before the local health department’s applicable deadline, Seller must pay for and furnish to Buyer a Septic Use Permit.
10.6.1.6. Other Documents. If the respective box is checked, Seller agrees to additionally deliver copies of the following:
☒ 10.6.1.6.1. All contracts relating to the operation, maintenance and management of the Property;
☒ 10.6.1.6.2. Property tax bills for the last 2 years;
☐ 10.6.1.6.3. As-built construction plans to the Property and the tenant improvements, including architectural, electrical, mechanical and structural systems; engineering reports; and permanent Certificates of Occupancy, to the extent now available;
☐ 10.6.1.6.4. A list of all Inclusions to be conveyed to Buyer;
☐ 10.6.1.6.5. Operating statements for the past _____________ years;
☐ 10.6.1.6.6. A rent roll accurate and correct to the date of this Contract;
☐ 10.6.1.6.7. A schedule of any tenant improvement work Seller is obligated to complete but has not yet completed and capital improvement work either scheduled or in process on the date of this Contract;
☒ 10.6.1.6.8. All insurance policies pertaining to the Property and copies of any claims which have been made for the past 2 years;
☐ 10.6.1.6.9. Soils reports, surveys and engineering reports or data pertaining to the Property (if not delivered earlier under § 8.3.);
☐ 10.6.1.6.10. Any and all existing documentation and reports regarding Phase I and II environmental reports, letters, test results, advisories and similar documents respective to the existence or nonexistence of asbestos, PCB transformers, or other toxic, hazardous or contaminated substances and/or underground storage tanks and/or radon gas. If no reports are in Seller’s possession or known to Seller, Seller warrants that no such reports are in Seller’s possession or known to Seller;
☐ 10.6.1.6.11. Any Americans with Disabilities Act reports, studies or surveys concerning the compliance of the Property with said Act;
☐ 10.6.1.6.12. All permits, licenses and other building or use authorizations issued by any governmental authority with jurisdiction over the Property and written notice of any violation of any such permits, licenses or use authorizations, if any; and
☐ 10.6.1.6.13. Other:
| (1) | Any existing surveys of the Property |
| (2) | Any notice, demand or communication from any governmental or quasi-governmental entity, commission, or authority alleging any violation of any law, statute, code, ordinance, or regulation, or requesting information as part of an investigation into any such alleged violation. |
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10.6.2. Due Diligence Documents Review and Objection. Buyer has the right to review and object based on the Due Diligence Documents. If the Due Diligence Documents are not supplied to Buyer or are unsatisfactory, in Buyer’s sole subjective discretion, Buyer may, on or before Due Diligence Documents Objection Deadline:
10.6.2.1. Notice to Terminate. Notify Seller in writing, pursuant to § 24.1., that this Contract is terminated; or
10.6.2.2. Due Diligence Documents Objection. Deliver to Seller a written description of any unsatisfactory Due Diligence Documents that Buyer requires Seller to correct.
10.6.2.3. Due Diligence Documents Resolution. If a Due Diligence Documents Objection is received by Seller, on or before Due Diligence Documents Objection Deadline and if Buyer and Seller have not agreed in writing to a settlement thereof on or before Due Diligence Documents Resolution Deadline, this Contract will terminate on Due Diligence Documents Resolution Deadline unless Seller receives Buyer’s written withdrawal of the Due Diligence Documents Objection before such termination (i.e., on or before expiration of Due Diligence Documents Resolution Deadline).
10.6.2.4. Automatic Due Diligence Extension. If a Due Diligence Document is not delivered on or before the Due Diligence Documents Deadline, Buyer has until the earlier of Closing or ten days after receipt by Buyer to review and object to such Due Diligence Document. If Buyer’s right to review and object to such Due Diligence Document is extended due to such Due Diligence Document not being delivered on or before the Due Diligence Documents Deadline, the Due Diligence Document Resolution Deadline will also be extended to the earlier of Closing or fifteen days after Buyer’s receipt of such Due Diligence Document.
10.6.3. Zoning. Buyer has the Right to Terminate under § 24.1., on or before Due Diligence Documents Objection Deadline, based on any unsatisfactory zoning and any use restrictions imposed by any governmental agency with jurisdiction over the Property, in Buyer’s sole subjective discretion.
10.6.4. Due Diligence – Environmental. Buyer has the right to obtain environmental inspections of the Property including a Phase I Environmental Site Assessment. ☐ Seller ☐ Buyer will order or provide a current Phase I Environmental Site Assessment (compliant with the most current version of the applicable ASTM E1527 standard practices for Environmental Site Assessments) and/or , at the expense of ☐ Seller ☐ Buyer (Environmental Inspection).
If the Phase I Environmental Site Assessment recommends a Phase II Environmental Site Assessment, the Environmental Inspection Termination Deadline will be extended by _____________________ days (Extended Environmental Inspection Termination Deadline) and if such Extended Environmental Inspection Termination Deadline extends beyond the Closing Date, the Closing Date will be extended a like period of time. In such event, ☐ Seller ☐ Buyer must pay the cost for such Phase II Environmental Site Assessment.
Notwithstanding Buyer’s right to obtain additional environmental inspections of the Property in this § 10.6.4., Buyer has the Right to Terminate under § 24.1., on or before Environmental Inspection Termination Deadline, or if applicable, the Extended Environmental Inspection Termination Deadline, based on any unsatisfactory results of Environmental Inspection, in Buyer’s sole subjective discretion.
10.6.5. Due Diligence – ADA. Buyer, at Buyer’s expense, may also conduct an evaluation whether the Property complies with the Americans with Disabilities Act (ADA Evaluation). All such inspections and evaluations must be conducted at such times as are mutually agreeable to minimize the interruption of Seller’s and any Seller’s tenants’ business uses of the Property, if any.
Buyer has the Right to Terminate under § 24.1., on or before ADA Evaluation Termination Deadline, based on any unsatisfactory ADA Evaluation, in Buyer’s sole subjective discretion.
10.7. Conditional Upon Sale of Property- intentionally deleted.
10.8. Source of Potable Water (Residential Land and Residential Improvements Only). [Intentionally Deleted - See Residential Addendum if applicable]
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10.9. Existing Leases; Modification of Existing Leases; New Leases. Seller states that none of the Leases to be assigned to the Buyer at the time of Closing contain any rent concessions, rent reductions or rent abatements except as disclosed in the Lease or other writing received by Buyer. Seller will not amend, alter, modify, extend or cancel any of the Leases nor will Seller enter into any new leases affecting the Property without the prior written consent of Buyer, which consent will not be unreasonably withheld or delayed.
10.10. Lead-Based Paint. [Intentionally Deleted - See Residential Addendum if applicable]
10.11. Carbon Monoxide Alarms. [Intentionally Deleted - See Residential Addendum if applicable]
10.12. Methamphetamine Disclosure. [Intentionally Deleted - See Residential Addendum if applicable]
11. TENANT ESTOPPEL STATEMENTS- intentionally deleted.
| CLOSING PROVISIONS |
12. CLOSING DOCUMENTS, INSTRUCTIONS AND CLOSING.
12.1. Closing Documents and Closing Information. Seller and Buyer will cooperate with the Closing Company to enable the Closing Company to prepare and deliver documents required for Closing to Buyer and Seller and their designees. If Buyer is obtaining a loan to purchase the Property, Buyer acknowledges Buyer’s lender is required to provide the Closing Company, in a timely manner, all required loan documents and financial information concerning Buyer’s loan. Buyer and Seller will furnish any additional information and documents required by Closing Company that will be necessary to complete this transaction. Buyer and Seller will sign and complete all customary or reasonably required documents at or before Closing.
12.2. Closing Instructions. Colorado Real Estate Commission’s Closing Instructions ☐ Are ☒ Are Not executed with this Contract.
12.3. Closing. Delivery of deed from Seller to Buyer will be at closing (Closing). Closing will be on the date specified as the Closing Date or by mutual agreement at an earlier date. At Closing, Seller must provide Buyer with the ability to access the Property (e.g. keys, access code, garage door opener). The hour and place of Closing will be as designated by Title Company conducting closing.
12.4. Disclosure of Settlement Costs. Buyer and Seller acknowledge that costs, quality and extent of service vary between different settlement service providers (e.g., attorneys, lenders, inspectors and title companies).
12.5. Assignment of Leases. Seller must assign to Buyer all Leases at Closing that will continue after Closing and Buyer must assume Seller’s obligations under such Leases. Further, Seller must transfer to Buyer all Leased Items and assign to Buyer such leases for the Leased Items accepted by Buyer pursuant to § 2.5.8. (Leased Items).
13. TRANSFER OF TITLE. Subject to Buyer’s compliance with the terms and provisions of this Contract, including the tender of any payment due at Closing, Seller must execute and deliver the following good and sufficient deed to Buyer, at Closing: ☐ special warranty deed ☒ general warranty deed ☐ bargain and sale deed ☐ quit claim deed ☐ personal representative’s deed ☐ ____________________________ deed. Seller, provided another deed is not selected, must execute and deliver a good and sufficient special warranty deed to Buyer, at Closing.
Unless otherwise specified in § 30 (Additional Provisions), if title will be conveyed using a special warranty deed or a general warranty deed, title will be conveyed “subject to statutory exceptions” as defined in §38-30-113(5)(a), C.R.S.
14. PAYMENT OF LIENS AND ENCUMBRANCES. Unless agreed to by Buyer in writing, any amounts owed on any liens or encumbrances securing a monetary sum against the Property and Inclusions, including any governmental liens for special improvements installed as of the date of Buyer’s signature hereon, whether assessed or not, and previous years’ taxes, will be paid at or before Closing by Seller from the proceeds of this transaction or from any other source.
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15. CLOSING COSTS, FEES, ASSOCIATION STATUS LETTER AND DISBURSEMENTS, TAXES AND WITHHOLDING.
15.1. Closing Costs. Buyer and Seller must pay, in Good Funds, their respective closing costs and all other items required to be paid at Closing, except as otherwise provided herein.
15.2. Closing Services Fee. The fee for real estate closing services must be paid at Closing by ☐ Buyer ☒ Seller ☐ One-Half by Buyer and One-Half by Seller ☐ Other.
15.3. Association Fees and Required Disbursements. At least fourteen days prior to Closing Date, Seller agrees to promptly request that the Closing Company or the Association deliver to Buyer a current Status Letter, if applicable. Any fees associated with or specified in the Status Letter will be paid as follows:
15.3.1. Status Letter Fee. Any fee incident to the issuance of Association’s Status Letter must be paid by Seller.
15.3.2. Record Change Fee. Any Record Change Fee must be paid by ☐ Buyer ☐ Seller ☐ One-Half by Buyer and One-Half by Seller ☒ N/A.
15.3.3. Reserves or Working Capital. Unless agreed to otherwise, all reserves or working capital due (or other similar cost not addressed in § 16.2. (Association Assessments)) at Closing must be paid by ☐ Buyer ☐ Seller ☐ One-Half by Buyer and One-Half by Seller ☒ N/A.
15.3.4. Other Fees. Any other fee listed in the Status Letter as required to be paid at Closing will be paid by ☐ Buyer ☐ Seller ☐ One-Half by Buyer and One-Half by Seller ☒ N/A.
15.4. Local Transfer Tax. Any Local Transfer Tax must be paid at Closing by ☐ Buyer ☐ Seller ☐ One-Half by Buyer and One-Half by Seller ☒ N/A.
15.5. Sales and Use Tax. Any sales and use tax that may accrue because of this transaction must be paid when due by ☐ Buyer ☒ Seller ☐ One-Half by Buyer and One-Half by Seller ☐ N/A.
15.6. Private Transfer Fee. Any private transfer fees and other fees due to a transfer of the Property, payable at Closing, such as community association fees, developer fees and foundation fees, must be paid at Closing by ☐ Buyer ☐ Seller ☐ One-Half by Buyer and One-Half by Seller ☒ N/A.
15.7. Water Transfer Fees. Water Transfer Fees can change. The fees, as of the date of this Contract, do not exceed $____________ for:
| ☐ Water District/Municipality | ☐ Water Stock | ||
| ☐ Augmentation Membership | ☐ Small Domestic Water Company | ☐ __________________________ | |
and must be paid at Closing by ☐ Buyer ☐ Seller ☐ One-Half by Buyer and One-Half by Seller ☒ N/A.
15.8. Utility Transfer Fees. Utility transfer fees can change. Any fees to transfer utilities from Seller to Buyer must be paid by ☐ Buyer ☒ Seller ☐ One-Half by Buyer and One-Half by Seller ☐ N/A.
15.9. FIRPTA and Colorado Withholding.
15.9.1. FIRPTA. The Internal Revenue Service (IRS) may require a substantial portion of the Seller’s proceeds be withheld after Closing when Seller is a foreign person. If required withholding does not occur, the Buyer could be held liable for the amount of the Seller’s tax, interest and penalties. If the box in this Section is checked, Seller represents that Seller ☐ IS a foreign person for purposes of U.S. income taxation. If the box in this Section is not checked, Seller represents that Seller is not a foreign person for purposes of U.S. income taxation. Seller agrees to cooperate with Buyer and Closing Company to provide any reasonably requested documents to verify Seller’s foreign person status. If withholding is required, Seller authorizes Closing Company to withhold such amount from Seller’s proceeds. Seller should inquire with Seller’s tax advisor to determine if withholding applies or if an exemption exists.
15.9.2. Colorado Withholding. The Colorado Department of Revenue may require a portion of the Seller’s proceeds be withheld after Closing when Seller will not be a Colorado resident after Closing, if not otherwise exempt. Seller agrees to cooperate with Buyer and Closing Company to provide any reasonably requested documents to verify Seller’s status. If withholding is required, Seller authorizes Closing Company to withhold such amount from Seller’s proceeds. Seller should inquire with Seller’s tax advisor to determine if withholding applies or if an exemption exists.
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16. PRORATIONS AND ASSOCIATION ASSESSMENTS.
16.1. Prorations. The following will be prorated to the Closing Date, except as otherwise provided:
16.1.1. Taxes- intentionally deleted.
16.1.2. Rents- intentionally deleted.
16.1.3. Other Prorations. None.
16.1.4. Final Settlement. Unless otherwise specified in Additional Provisions, these prorations are final.
16.2. Association Assessments- intentionally deleted.
17. POSSESSION. Possession of the Property and Inclusions will be delivered to Buyer on Possession Date at Possession Time, subject to the Leases as set forth in § 10.6.1.1.
If Seller, after Closing occurs, fails to deliver possession as specified, Seller will be subject to eviction and will be additionally liable to Buyer, notwithstanding § 20.2. (If Seller is in Default), for payment of $1,000.00 per day (or any part of a day notwithstanding § 3.3., Day) from Possession Date and Possession Time until possession is delivered. Additionally, Buyer may pursue a claim against Seller for any of Buyer’s actual additional damages incurred by Buyer in excess of such amount.
| GENERAL PROVISIONS |
18. CAUSES OF LOSS, INSURANCE; DAMAGE TO INCLUSIONS AND SERVICES; CONDEMNATION; AND WALK-THROUGH. Except as otherwise provided in this Contract, the Property and Inclusions will be delivered in the condition existing as of the date of this Contract, ordinary wear and tear excepted.
18.1. Causes of Loss, Insurance. In the event the Property or Inclusions are damaged by fire, other perils or causes of loss prior to Closing (Property Damage) in an amount of not more than ten percent of the total Purchase Price and if the repair of the damage will be paid by insurance (other than the deductible to be paid by Seller), then Seller, upon receipt of the insurance proceeds, will use Seller’s reasonable efforts to repair the Property before Closing Date. Buyer has the Right to Terminate under § 24.1., on or before Closing Date, if the Property is not repaired before Closing Date, or if the damage exceeds such sum. Should Buyer elect to carry out this Contract despite such Property Damage, Buyer is entitled to a credit at Closing for all insurance proceeds that were received by Seller (but not the Association, if any) resulting from damage to the Property and Inclusions, plus the amount of any deductible provided for in the insurance policy. This credit may not exceed the Purchase Price. In the event Seller has not received the insurance proceeds prior to Closing, the parties may agree to extend the Closing Date to have the Property repaired prior to Closing or, at the option of Buyer, (1) Seller must assign to Buyer the right to the proceeds at Closing, if acceptable to Seller’s insurance company and Buyer’s lender; or (2) the parties may enter into a written agreement prepared by the parties or their attorney requiring the Seller to escrow at Closing from Seller’s sale proceeds the amount Seller has received and will receive due to such damage, not exceeding the total Purchase Price, plus the amount of any deductible that applies to the insurance claim.
18.2. Damage, Inclusions and Services. Should any Inclusion or service (including utilities and communication services), system, component or fixture of the Property (collectively Service) (e.g., heating or plumbing), fail or be damaged between the date of this Contract and Closing or possession, whichever is earlier, then Seller is liable for the repair or replacement of such Inclusion or Service with a unit of similar size, age and quality, or an equivalent credit, but only to the extent that the maintenance or replacement of such Inclusion or Service is not the responsibility of the Association, if any, less any insurance proceeds received by Buyer covering such repair or replacement. If the failed or damaged Inclusion or Service is not repaired or replaced on or before Closing or possession, whichever is earlier, Buyer has the Right to Terminate under § 24.1., on or before Closing Date, or, at the option of Buyer, Buyer is entitled to a credit at Closing for the repair or replacement of such Inclusion or Service. Such credit must not exceed the Purchase Price. If Buyer receives such a credit, Seller’s right for any claim against the Association, if any, will survive Closing.
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18.3. Condemnation. In the event Seller receives actual notice prior to Closing that a pending condemnation action may result in a taking of all or part of the Property or Inclusions, Seller must promptly notify Buyer, in writing, of such condemnation action. Buyer has the Right to Terminate under § 24.1., on or before Closing Date, based on such condemnation action, in Buyer’s sole subjective discretion. Should Buyer elect to consummate this Contract despite such diminution of value to the Property and Inclusions, Buyer is entitled to a credit at Closing for all condemnation proceeds awarded to Seller for the diminution in the value of the Property or Inclusions, but such credit will not include relocation benefits or expenses or exceed the Purchase Price.
18.4. Walk-Through and Verification of Condition. Buyer, upon reasonable notice, has the right to walk through the Property prior to Closing to verify that the physical condition of the Property and Inclusions complies with this Contract.
19. RECOMMENDATION OF LEGAL AND TAX COUNSEL. By signing this Contract, Buyer and Seller acknowledge that their respective broker has advised that this Contract has important legal consequences and has recommended: (1) legal examination of title; (2) consultation with legal and tax or other counsel before signing this Contract as this Contract may have important legal and tax implications; (3) to consult with their own attorney if Water Rights, Mineral Rights or Leased Items are included or excluded in the sale; and (4) to consult with legal counsel if there are other matters in this transaction for which legal counsel should be engaged and consulted. Such consultations must be done timely as this Contract has strict time limits, including deadlines, that must be complied with.
20. TIME OF ESSENCE, DEFAULT AND REMEDIES. Time is of the essence for all dates and deadlines in this Contract. This means that all dates and deadlines are strict and absolute. If any payment due, including Earnest Money, is not paid, honored or tendered when due, or if any obligation is not performed timely as provided in this Contract or waived, the non-defaulting party has the following remedies:
20.1. If Buyer is in Default:
☐ 20.1.1. Specific Performance. Seller may elect to cancel this Contract and all Earnest Money (whether or not paid by Buyer) will be paid to Seller and retained by Seller. It is agreed that the Earnest Money is not a penalty, and the parties agree the amount is fair and reasonable. Seller may recover such additional damages as may be proper. Alternatively, Seller may elect to treat this Contract as being in full force and effect and Seller has the right to specific performance or damages, or both.
20.1.2. Liquidated Damages, Applicable. This § 20.1.2. applies unless the box in § 20.1.1. is checked. Seller may cancel this Contract. All Earnest Money (whether or not paid by Buyer) will be paid to Seller and retained by Seller. It is agreed that the Earnest Money amount specified in § 4.1. is LIQUIDATED DAMAGES and not a penalty, which amount the parties agree is fair and reasonable and (except as provided in §§ 10.4. and 21), such amount is SELLER’S ONLY REMEDY for Buyer’s failure to perform the obligations of this Contract. Seller expressly waives the remedies of specific performance and additional damages.
20.2. If Seller is in Default:
20.2.1. Specific Performance, Damages or Both. Buyer may elect to treat this Contract as canceled, in which case all Earnest Money received hereunder will be returned to Buyer and Buyer may recover such damages as may be proper. Alternatively, in addition to the per diem in § 17 (Possession) for failure of Seller to timely deliver possession of the Property after Closing occurs, Buyer may elect to treat this Contract as being in full force and effect and Buyer has the right to specific performance or damages, or both.
20.2.2. Seller’s Failure to Perform. In the event Seller fails to perform Seller’s obligations under this Contract, to include, but not limited to, failure to timely disclose Association violations known by Seller, failure to perform any replacements or repairs required under this Contract or failure to timely disclose any known adverse material facts, Seller remains liable for any such failures to perform under this Contract after Closing. Buyer’s rights to pursue the Seller for Seller’s failure to perform under this Contract are reserved and survive Closing.
21. LEGAL FEES, COST AND EXPENSES. Anything to the contrary herein notwithstanding, in the event of any arbitration or litigation relating to this Contract, prior to or after Closing Date, the arbitrator or court must award to the prevailing party all reasonable costs and expenses, including attorney fees, legal fees and expenses.
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22. MEDIATION. If a dispute arises relating to this Contract (whether prior to or after Closing) and is not resolved, the parties must first proceed, in good faith, to mediation. Mediation is a process in which the parties meet with an impartial person who helps to resolve the dispute informally and confidentially. Mediators cannot impose binding decisions. Before any mediated settlement is binding, the parties to the dispute must agree to the settlement, in writing. The parties will jointly appoint an acceptable mediator and will share equally in the cost of such mediation. The obligation to mediate, unless otherwise agreed, will terminate if the entire dispute is not resolved within thirty days of the date written notice requesting mediation is delivered by one party to the other at that party’s last known address (physical or electronic as provided in § 26). Nothing in this Section prohibits either party from filing a lawsuit and recording a lis pendens affecting the Property, before or after the date of written notice requesting mediation. This Section will not alter any date in this Contract, unless otherwise agreed.
23. EARNEST MONEY DISPUTE. Except as otherwise provided herein, Earnest Money Holder must release the Earnest Money following receipt of written mutual instructions, signed by both Buyer and Seller. In the event of any controversy regarding the Earnest Money, Earnest Money Holder is not required to release the Earnest Money. Earnest Money Holder, in its sole subjective discretion, has several options: (1) wait for any proceeding between Buyer and Seller; (2) interplead all parties and deposit Earnest Money into a court of competent jurisdiction (Earnest Money Holder is entitled to recover court costs and reasonable attorney and legal fees incurred with such action); or (3) provide notice to Buyer and Seller that unless Earnest Money Holder receives a copy of the Summons and Complaint or Claim (between Buyer and Seller) containing the case number of the lawsuit (Lawsuit) within one hundred twenty days of Earnest Money Holder’s notice to the parties, Earnest Money Holder is authorized to return the Earnest Money to Buyer. In the event Earnest Money Holder does receive a copy of the Lawsuit and has not interpled the monies at the time of any Order, Earnest Money Holder must disburse the Earnest Money pursuant to the Order of the Court. The parties reaffirm the obligation of § 22 (Mediation). This Section will survive cancellation or termination of this Contract.
24. TERMINATION.
24.1. Right to Terminate. If a party has a right to terminate, as provided in this Contract (Right to Terminate), the termination is effective upon the other party’s receipt of a written notice to terminate (Notice to Terminate), provided such written notice was received on or before the applicable deadline specified in this Contract. If the Notice to Terminate is not received on or before the specified deadline, the party with the Right to Terminate accepts the specified matter, document or condition as satisfactory and waives the Right to Terminate under such provision. Any Notice to Terminate delivered after the applicable deadline specified in the Contract is ineffective and does not terminate this Contract.
24.2. Effect of Termination. In the event this Contract is terminated, all Earnest Money received hereunder must be timely returned to Buyer and the parties are then relieved of all obligations hereunder, subject to §§ 10.4. and 21.
25. ENTIRE AGREEMENT, MODIFICATION, SURVIVAL; SUCCESSORS. This Contract, its exhibits and specified addenda, constitute the entire agreement between the parties relating to the subject hereof and any prior agreements pertaining thereto, whether oral or written, have been merged and integrated into this Contract. No subsequent modification of any of the terms of this Contract is valid, binding upon the parties, or enforceable unless made in writing and signed by the parties. Any right or obligation in this Contract that, by its terms, exists or is intended to be performed after termination or Closing survives the same. Any successor to a party receives the predecessor’s benefits and obligations of this Contract.
26. NOTICE, DELIVERY AND CHOICE OF LAW.
26.1. Physical Delivery and Notice. Any document or notice to Buyer or Seller must be in writing, except as provided in § 26.2. and is effective when physically received by such party, any individual named in this Contract to receive documents or notices for such party, Broker, or Brokerage Firm of Broker working with such party (except any notice or delivery after Closing must be received by the party, not Broker or Brokerage Firm).
26.2. Electronic Notice. As an alternative to physical delivery, any notice may be delivered in electronic form to Buyer or Seller, any individual named in this Contract to receive documents or notices for such party, Broker or Brokerage Firm of Broker working with such party (except any notice or delivery after Closing, cancellation or Termination must be received by the party, not Broker or Brokerage Firm) at the electronic address of the recipient by facsimile, email or _________________________________.
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26.3. Electronic Delivery. Electronic Delivery of documents and notice may be delivered by: (1) email at the email address of the recipient, (2) a link or access to a website or server provided the recipient receives the information necessary to access the documents, or (3) facsimile at the facsimile number (Fax No.) of the recipient.
26.4. Choice of Law. This Contract and all disputes arising hereunder are governed by and construed in accordance with the laws of the State of Colorado that would be applicable to Colorado residents who sign a contract in Colorado for real property located in Colorado.
27. NOTICE OF ACCEPTANCE, COUNTERPARTS. This proposal will expire unless accepted in writing, by Buyer and Seller, as evidenced by their signatures below and the offering party receives notice of such acceptance pursuant to § 26 on or before Acceptance Deadline Date and Acceptance Deadline Time. If accepted, this document will become a contract between Seller and Buyer. A copy of this Contract may be executed by each party, separately and when each party has executed a copy thereof, such copies taken together are deemed to be a full and complete contract between the parties.
28. GOOD FAITH. Buyer and Seller acknowledge that each party has an obligation to act in good faith including, but not limited to, exercising the rights and obligations set forth in the provisions of Financing Conditions and Obligations; Title Insurance, Record Title and Off-Record Title; New ILC, New Survey; and Property Disclosure, Inspection, Indemnity, Insurability and Due Diligence.
29. BUYER’S BROKERAGE FIRM COMPENSATION- intentionally deleted.
| ADDITIONAL PROVISIONS AND ATTACHMENTS |
30. ADDITIONAL PROVISIONS. (The following additional provisions have not been approved by the Colorado Real Estate Commission.)
| (1) | In the event that Buyer has the right to terminate under any Section of this Contract in Buyer’s sole subjective discretion, Buyer shall not be required to provide any further explanation or documentation if its reason for termination in order for such termination to be effective under Section 24. |
| (2) | Buyer is represented by Josh W. Mack of The Law Office of Josh W. Mack, PLLC and any notices to Buyer must be copied to mack@joshmack-law.com in order to be effective. |
| (3) | Each party warrants to the other party that no real estate broker is entitled to claim a commission related to this transaction. Each party agrees to indemnify the other for any commission or fee claimed by any real estate broker through or based upon the action of that party. |
| (4) | At closing, Buyer and Seller shall execute a Commercial Lease for the Property from Buyer as Landlord to Seller as Tenant on the terms set forth in the attached Commercial Lease, the term of which shall commence at closing. |
| (5) | The Buyer, American Heritage Legacies, LLC is owned by family members of Interim Chief Executive Officer and Principal Executive Officer Al Harper. This Contract and the Commercial Lease described above may only be executed if Seller’s Board of Directors approves Contract and the Commercial Lease at a duly noticed meeting where a quorum is present after an opportunity to review the Contract and the Commercial Lease and any other relevant information about the financial implications of this transaction with the assistance of such legal and financial counsel as the Board deems necessary, finds that Al Harper’s actions in facilitating the Contract and the Commercial Lease were taken in good faith, with care, and in a manner that is in the best interests of the Seller corporation, and authorizes the Board Chair to execute the Contract and the Commercial Lease. Minutes evidencing such approval shall be provided by Seller to Buyer within 14 days of execution of this Contract. If the Board votes not to approve this Contract or the Commercial Lease, this Contract shall terminate. |
31. OTHER DOCUMENTS.
31.1. Documents Part of Contract. The following documents are a part of this Contract:
Commercial Lease for the Property from Buyer as Landlord to Seller as Tenant.
.2. Documents Not Part of Contract. The following documents have been provided but are not a part of this Contract:
None.
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| SIGNATURES |
| Buyer’s Name: | American Heritage Legacies, LLC | Buyer’s Name: | ||||||
| /s/ John Harper | 9/30/2026 | |||||||
| By: John Harper, Managing Member | Date | Buyer’s Signature | Date | |||||
| Address: | 479 Main Avenue | Address: | ||||||
| Durango, CO 81301 | ||||||||
| Phone No.: | Phone No.: | |||||||
| Fax No.: | Fax No.: | |||||||
| Email Address: | Email Address: | |||||||
[NOTE: If this offer is being countered or rejected, do not sign this document.]
|
| ||||||||
| Seller’s Name: | ROCKY MOUNTAIN CHOCOLATE FACTORY, INC. | Seller’s Name: | ||||||
| /s/ Mel Keating | 9/30/2026 | |||||||
| Mel Keating, Director and Board Chair | Date | Seller’s Signature | Date | |||||
| Address: | 265 Turner Drive | Address: | ||||||
| Durango, CO 81303 | ||||||||
| Phone No.: | Phone No.: | |||||||
| Fax No.: | Fax No.: | |||||||
| Email Address: | Email Address: | |||||||
| END OF CONTRACT TO BUY AND SELL REAL ESTATE |
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Exhibit 10.2
COMMERCIAL LEASE
BETWEEN
AMERICAN HERITAGE LEGACIES, LLC
AND
ROCKY MOUNTAIN CHOCOLATE FACTORY, INC.
THIS COMMERCIAL LEASE (the “Lease”) is made as of the date of the last party to sign below, by and between AMERICAN HERITAGE LEGACIES, LLC. (“Landlord”) and ROCKY MOUNTAIN CHOCOLATE FACTORY, INC. (“Tenant”) (each, a “party”, and together, the “parties”).
RECITALS
A. Landlord is the owner of that certain real property legally described as follows (the “Premises”):
Tract A of the BODO BUSINESS RANCHES, UNIT III, CRAIL LOT CONSOLIDATION, PROJECT NO. 93-206, according to the plat thereof filed for record December 14, 1993 as Reception No. 659418.
Also known by street address as: 265 Turner Street, Durango, CO 81303.
C. Landlord desires to lease the Premises to Tenant.
D. Tenant desires to lease the Premises from Landlord upon the terms and conditions set forth in this Lease.
NOW, THEREFORE, in consideration of the terms, covenants, and conditions set forth below, Landlord and Tenant agree as follows:
1. Demise of Premises. In consideration of the rents, covenants and agreements contained herein, Landlord hereby leases to Tenant and Tenant hereby rents from Landlord the Premises, subject to the terms and conditions as set forth in this Lease.
2. Condition of Premises. The Premises shall be delivered to Tenant by Landlord in “as-is” condition. Tenant’s occupancy of the Premises shall constitute acceptance of the condition of the Premises. Tenant shall be responsible for all improvements to the Premises desired by Tenant (the “Tenant Improvements”), and which shall be performed by Tenant at its own cost and expense. Landlord does not warrant the suitability of the Premises for the Tenant Improvements, and Tenant assumes responsibility for determining the feasibility of the Tenant Improvements. Tenant shall be responsible for obtaining all necessary permits required by the City of Durango for such Tenant Improvements and shall provide copies thereof to Landlord before commencing the Tenant Improvements. Tenant agrees to submit to Landlord for Landlord’s prior approval, plans and specifications describing the Tenant Improvements, which approval shall be in Landlord’s sole and absolute discretion. Tenant covenants and agrees to install the Tenant Improvements only as set forth in plans and specifications that have been approved by Landlord in writing upon submission thereof by Tenant. All improvements to the interior structure of the Premises, including the walls, floors, electrical system, and plumbing shall become the sole property of the Landlord, and Tenant shall not be entitled to any setoff or credit for such improvements. Landlord reserves the right to enter the Premises for the purpose of posting such notices of non-responsibility prior to installation of the Tenant Improvements as may be permitted by law, or desired by Landlord.
1
3. Term.
(a) Lease Term. The term of this Lease shall commence at the closing of the Contract to Buy and Sell Real Estate (Commercial) between Tenant and Landlord (the “Commencement Date”). The Lease Term shall terminate ten (10) years from the first day of the month following the Commencement Date. Each twelve-month period after the first day of the month following the Commencement Date shall be considered a “Lease Year.”
(b) Renewal Term. If Tenant is not in default of any of its obligations under this Lease, Tenant shall have the option to renew the Lease for one additional ten (10) year renewal term by providing written notice to Landlord at least six (6) months in advance of the termination of the Primary Term.
(c) Termination upon Change in Control. Upon the occurrence of a Change of Control of Tenant, this Lease shall terminate upon the earlier of: (1) closing on the sale of the Premises from Landlord to Tenant as described in paragraph 29; or (2) 90 days from the Change in Control.
4. Rent. Tenant covenants and agrees to pay to Landlord, as rental for the Premises, the following:
(a) Base Rent. Base Rent (“Base Rent”) at the rate of Six Hundred Twenty Four Thousand Dollars ($624,000) for the First Lease Year, payable in equal monthly payments of Fifty Two Thousand Dollars ($52,000) for each rental month of this Lease, due on the first day of each calendar month without any set-off or deduction. Payment of the Base Rent shall commence on the Commencement Date. If the Commencement Date is not the first day of a calendar month, rent shall be prorated for the month of the Commencement Date. Each successive Lease Year, the Base Rent shall increase by two percent (2%) over the Base Rent for the previous Lease Year.
(b) Additional Rent. Tenant shall pay to Landlord Additional Rent sufficient to reimburse Landlord for all expenses, costs and disbursements of every kind and nature associated with ownership of the Premises which may arise or become due during the Lease Term including appropriate reserves in the timeframes specified for reimbursement in this Lease. Tenant shall pay prior to delinquency all other costs associated with the operation and maintenance of the Premises. It is the express intent of Tenant and Landlord that the return to Landlord under this lease shall be absolutely “Net”.
5. Late Fees. If a payment of Base Rent is not received by Landlord on or before the fifth day of the month, Tenant will pay Landlord a late fee (“Late Fee”) of ten percent (10%) of the monthly Base Rent. Landlord and Tenant hereby agree that the Late Fee amount represents a fair and reasonable estimate of the costs Landlord will incur by reason of late payment of Base Rent by Tenant. Acceptance of such Late Fee shall not constitute a waiver by Landlord of Tenant’s default with respect to the overdue amount and shall not prevent Landlord from exercising any of the other rights and remedies available to Landlord for any other breach of Tenant under this Lease.
2
6. Use of the Premises.
(a) Business Use. The Premises shall be used and occupied for Tenant’s corporate headquarters and production and warehouse facility and for no other purpose. Tenant shall, at its sole expense, comply with all laws applicable to its use of the Premises and shall obtain all permits or licenses required for the transaction of business at the Premises. Tenant will not use, permit or suffer the use of the Premises for any other business than that hereinabove stated, and will not use or permit any use of the Premises.
(b) Compliance with Governmental Regulations. Tenant shall, at its own cost and expense, promptly and properly observe and comply with all present and future orders, regulations, directions, rules, laws, ordinances, and requirements of all governmental authorities (including, without limitation, state, municipal, county and federal governments and their departments, bureaus, boards and officials) and arising from Tenant’s use or occupancy of the Premises or privileges appurtenant to or in connection with the enjoyment of the Premises.
(c) Nondiscrimination. Tenant, with respect to its use of the Premises, and the parties in connection with the performance of their respective obligations under this Lease Agreement, agree that they will not discriminate against anyone with respect to race, color, creed, sex, age, national origin, religion, handicap, disability, veteran status, any other legally protected category of persons.
(d) Limitations on Use. Tenant shall not overload or abuse the floors, walls, or ceiling of the Premises, or make any use of the Premises which would render insurance void or increase Landlord’s risk for insurance purposes. No act shall be done in or about the Premises that is unlawful or that will increase the existing rate of insurance on any or all of the Land or Building. To Landlord’s knowledge, Landlord acknowledges that Tenant’s permitted use will not increase the existing rate of insurance. Tenant shall not commit or allow to be committed or exist: (a) any waste upon the Premises, (b) any public or private nuisance, or (c) any act or condition which interferes with the business of Landlord or with the rights or privileges of any contractors, subcontractors, licensees, agents, concessionaires, subtenants, servants, employees, customers, guests, invitees or visitors or any other persons lawfully in and upon the Land or Building, or causes any impairment or reduction of the good will or reputation of the Building. Tenant shall not, without the prior consent of Landlord, use any apparatus, machinery, device or equipment in or about the Premises which will cause any unreasonable substantial noise or vibration or any increase in the normal consumption level of electric power.
7. Quiet Enjoyment; Subordination; Estoppel Certificates.
(a) Quiet Enjoyment. Landlord hereby covenants and agrees that so long as Tenant complies with all the terms, covenants and provisions of this Lease, Tenant shall have the peaceful and quiet use of the Premises without let or hindrance on the part of Landlord and Landlord shall warrant and defend Tenant in such peaceful and quiet use and possession against the claims of all persons claiming by, through or under Landlord.
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(b) Subordination. Tenant’s rights under this Lease are however, and shall always be subordinate to the operation and effect of any mortgage, deed of trust or similar security instrument (a “Security Instrument”) now or hereafter placed upon the land or buildings of which the Premises are a part, or any part thereof, by Landlord, or any renewal, modification, consolidation, replacement or extension of any such Security Instrument, unless such secured party elects to have Tenant’s interest hereunder superior to the lien of such Security Instrument; this clause shall be self-operative and no further instrument of subordination shall be required. In confirmation of such subordination, Tenant shall execute promptly any certificate that Landlord may request. Tenant hereby constitutes and appoints Landlord as Tenant’s attorney-in-fact to execute any such certificate or certificates for and on behalf of Tenant.
(c) Estoppel Certificate. Tenant agrees, at any time, and from time to time, upon not less than ten (10) days’ prior written request by Landlord, to execute, acknowledge and deliver to Landlord a statement in writing certifying the commencement and termination dates of the term of this Lease, that this Lease is unmodified and in full force and effect (or if there have been modifications, that this Lease is in full force and effect as modified and stating the modifications), and the dates to which rent and other charges have been paid, and any default or claimed default on the part of Landlord under this Lease, it being intended that any such statement delivered pursuant to this provision may be relied upon by any prospective purchaser of Landlord’s interest or holder of a Security Instrument or assignee of any Security Interest upon Landlord’s estate in the Premises.
8. Assignment and Subletting.
(a) Consent Required. Tenant covenants and agrees not to assign this Lease in whole or in part, nor to sublease all or any part of the Premises nor permit other persons to occupy the Premises or any part thereof, nor to grant any license or concession for all or any part of the Premises, without the written consent of Landlord in each instance first had and obtained, which consent shall be in Landlord’s sole and absolute discretion, which may include the conditions set forth in subsection (b) below. Any consent by Landlord to an assignment or subletting of this Lease shall not constitute a waiver of the necessity of such consent as to any subsequent assignment or subletting. An assignment for the benefit of the Tenant’s creditors or otherwise by operation of law shall not be effective to transfer or assign Tenant’s interest under this Lease unless Landlord shall have first consented thereto in writing. Upon any permitted assignment, Tenant shall remain fully liable on this Lease and shall not be released from performing any of the terms, covenants and conditions of this Lease.
(b) Conditions of Transfer. Landlord may withhold its consent to any proposed assignment, sublease, license or concession (each, a “Transfer”) under subsection (a) above for any reason, including without limitation the following conditions:
(i) the proposed transferee’s financial condition is not reasonably satisfactory to Landlord or does not evidence the ability to pay Tenant’s obligations under this Lease when due;
(ii) the transferee’s use of the Premises conflicts with the permitted use described in Section 6(a); or
(iii) the use, nature, business, activities or reputation in the business community of the transferee (or its principals, employees or invitees) are not acceptable to Landlord.
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(c) Termination. If Tenant subleases or assigns the Lease in whole or in part without Landlord’s prior written consent, then Landlord shall have the option to terminate this Lease at any time after actual notice of such change by giving Tenant at least sixty (60) days’ prior written notice, and on the date fixed in such notice for termination of this Lease, this Lease shall expire and come to an end with the same effect as if said date were originally set forth in this Lease for expiration of the term. The mere receipt by Landlord of rent from a party other than Tenant shall not be deemed actual notice of an assignment or sublease.
9. Maintenance and Repairs.
(a) Tenant’s Obligations: Exterior of the Premises. Tenant covenants and agrees to keep and maintain the exterior of the Premises, including the roof of the Premises, exterior walls, exterior doors and windows, parking lot, curbs, grounds, and landscaping in good condition and repair. In the event of any damage to the exterior of the Premises, Tenant shall cause such damages to be repaired. Landlord shall not be liable for repair or maintenance of the Premises, or any part thereof.
(b) Tenant’s Obligations: Interior of the Premises. Tenant covenants and agrees to keep the entire interior of the Premises, together with all electrical, plumbing, coolers, freezers, heating, air-conditioning, foundation, and other mechanical installations and equipment used by, or in connection with, the Premises, in good order and repair at its own expense and to promptly replace at its own expense, any interior finishes, interior plate glass doors, windows and mirrors which may be broken or damaged; and to surrender the Premises at the expiration of the term in as good condition as when received. Tenant will not overload the electrical wiring or plumbing and will not install any additional electrical wiring or plumbing unless it has first obtained Landlord’s written consent thereto, and, if such consent is given, Tenant will install the same at its own cost and expense. Tenant will repair promptly at its own expense any damage to the Premises caused by bringing into the Premises any property for Tenant’s use, or by the installation or removal of such property, regardless of fault or by whom such damage shall be caused unless caused by Landlord, its agents, employees or contractors.
(c) In the event Tenant shall not proceed promptly and diligently to make any repairs or perform any obligation imposed upon it in this Section 9 within forty-eight (48) hours after receiving written notice from Landlord to make such repairs or perform such obligation, then and in such event, Landlord may at its option, enter the Premises and do and perform the things specified in said notice, without liability on the part of Landlord for any loss or damage resulting from any such action by Landlord and Tenant agrees to pay within five (5) days of Landlord’s demand any cost or expense incurred by Landlord in taking such action.
10. Utilities. Landlord shall not be responsible for providing any services to the Premises. Tenant shall be responsible for providing its own gas, water, electric, telephone, or other utility services which it requires on the Premises together with the costs of maintaining the grounds at its sole cost and expense. Tenant shall directly pay for such services, including the establishment and connection thereof, at the rates charged for such services by said authority or utility, and the failure of Tenant to obtain or to continue to receive such services for any reason whatsoever shall not relieve Tenant of any of its obligations under this Lease.
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11. Tenant’s Operations.
(a) Alterations. Tenant covenants and agrees not to make any alterations, additions, or improvements to the exterior of the Premises and not to make any structural alterations to the Premises, or any part thereof, without Landlord’s prior written consent in each instance first had and obtained; and Tenant agrees that any alterations, additions or improvements made by it shall immediately become the property of Landlord and shall remain upon the premises in the absence of any agreement to the contrary; provided, however, that Landlord shall have the right to require the restoration of the Premises to their original condition, in which event Tenant agrees to comply with such requirement prior to the expiration or other termination of this Lease. Tenant further agrees that it will not cut or drill into or secure any fixtures, apparatus or equipment of any kind in or to any part of the Premises without first obtaining Landlord’s written consent.
(b) Exterior of Premises. Tenant covenants and agrees not to place, or suffer to be placed, or maintain, any sign, billboard, marquee, awning, decoration, placard, lettering, advertising matter or other thing of any kind, whether permanent or temporary, on the exterior of the Premises or on the glass or any window or door of the Premises, without first obtaining Landlord’s written approval thereof, and without first obtaining all necessary approvals and permits from the City of Durango. Tenant further agrees to maintain any sign, billboard, marquee, awning, decoration, placard, lettering or advertising matter or other thing of any kind as may be approved by Landlord in good condition and repair at all times.
(c) Compliance with Fire Laws. Tenant covenants and agrees to execute and comply with all laws, rules, orders, directions and requirements of all governmental departments, bodies, bureaus, agencies and officers, and with all rules, directions, requirements and recommendations of the local board of fire underwriters and the fire insurance rating organizations having jurisdiction over the area in which the Premises are situated, in any manner pertaining to the Premises or the use and occupancy thereof. In the event Tenant shall fail or neglect to comply with any of the aforesaid laws, rules, orders, directions, requirements, or recommendations upon twenty-four (24) hours prior written notice, or without advance notice in the event of an emergency, Landlord or its agents may enter the Premises and take all such action and do all such work in or to the Premises as may be necessary in order to cause compliance with such laws, rules, orders, directions, requirements or recommendations, and Tenant covenants and agrees to reimburse Landlord promptly upon demand for the expense incurred by Landlord in taking such action and performing such work. Tenant further covenants and agrees not to do or suffer to be done, or keep or suffer to be kept anything in, upon or about the Premises which will contravene Landlord’s policies insuring against loss or damage by fire or other hazards, including, but not limited to, public liability or which will prevent Landlord from procuring such policies in companies reasonably acceptable to Landlord; and if anything done, omitted to be done or suffered to be done by Tenant, or kept, or suffered by Tenant to be kept, in, upon or about the Premises shall cause the rate of fire or other insurance on the Premises, or other property of Landlord, in companies reasonably acceptable to Landlord, to be increased beyond the minimum rate from time to time applicable to the Premises, or any adjoining stores or to other property of Landlord for the use or uses made thereof, Tenant will pay the amount of such increase promptly upon Landlord’s demand.
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(d) Mechanic’s Liens. Tenant shall at all times keep the Premises free from any liens arising out of any work performed or allegedly performed, materials furnished or allegedly furnished, or obligations incurred or allegedly incurred, by Tenant or its contractors. Landlord reserves the right to enter the Premises for the purpose of posting such notices of non-responsibility as may be permitted by law, or desired by Landlord. Prior to commencing any Alterations, repairs or any other work in the Premises or incurring any obligations in connection therewith, Tenant shall provide Landlord with at least ten (10) business days’ notice with respect thereto so that Landlord may post notices of non-responsibility.
Tenant covenants and agrees that if any mechanics’ or materialmen’s lien or other lien shall be filed against the Premises, or any other part of the Building, by reason of or arising out of any labor or material furnished or alleged to have been furnished, to or for the Premises or any occupant thereof, or for or by reason of any change, alteration or addition made by Tenant thereto, Tenant shall in any of such events, cause the same to be canceled and discharged of record by bond or otherwise as allowed by law, at Tenant’s expense, within ten (10) days after the filing thereof; and Tenant shall also defend on Landlord’s behalf, at Tenant’s sole cost and expense, any action, suit or proceeding which may be brought thereon or for the enforcement of any such lien, and Tenant will pay any damages and satisfy and discharge any judgment entered thereon and save Landlord harmless from any claim or damage resulting therefrom. If at any time, Tenant does not comply with the covenants made in this subparagraph, Landlord may, at its option, after giving Tenant three (3) days’ prior written notice of its intention to do so, cause such lien to be canceled and discharged of record by bond or otherwise as allowed by law, and Tenant shall pay all costs thereof, including reasonable attorney’s fees, as additional rent, payable with the next ensuing installment of Base Rent.
12. Indemnification; Insurance.
(a) Indemnification. Tenant covenants and agrees to indemnify Landlord and save it harmless from and against any and all claims, actions, damages, liability and expenses in connection with loss of life, personal injury, or damage to property arising from or out of Tenant’s occupancy or use of the Premises or any part thereof, or any other part of Landlord’s property, or occasioned wholly or in part by any act or omission of Tenant, its agents, contractors or employees.
(b) Insurance. Tenant shall, at its sole cost and expense, maintain and keep in full force with responsible companies licensed to do business in Colorado and acceptable to Landlord, insurance policies naming Landlord, Tenant and any mortgagee of Landlord as insureds, as their respective interests may appear, and providing not less than the following protection:
(i) Property insurance in an amount sufficient to cover not less than 100% of the full replacement cost of the Premises and all improvements located thereon, including the entire interior of the Premises, all electrical, plumbing, heating, air-conditioning and other mechanical installations and equipment against destruction from any cause, including without limitation, fire or water damage; as well as any other coverages on the Premises and improvements as Landlord or its Lender deems necessary or desirable;
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(ii) General commercial liability insurance with minimum limits of coverage of $1,000,000.00 per person and $2,000,000.00 per occurrence, or with such greater limits as Landlord may specify;
(iii) Personal property insurance against Special Causes of Loss (including theft) covering all of Tenant’s stock in trade, fixtures, personal property and all installations and improvements made by Tenant (including Tenant’s installations and improvements which become the property of Landlord) in, on or about the Premises in an amount of not less than the then full insurable value (actual replacement cost without deduction for physical deprecation), with such value to be determined by Tenant;
(iv) Business Interruption Insurance sufficient to compensate Tenant for closure of business for a period of up to 120 days.
(c) General Insurance Requirements.
(i) Landlord (and its lender, if applicable) shall be listed as loss payee or additional insured or on all of Tenant’s insurance policies (except for its Business Interruption policy). Landlord shall be entitled to collect the proceeds of all property insurance and may apply such proceeds to repair or replacement of the improvements on the Premises in its sole discretion.
(ii) Tenant’s policies shall provide that, in the case of fire or other casualty affecting the Premises, any loss shall be adjusted jointly with Landlord and Tenant and that to the extent Landlord’s insurance policies and Tenant’s insurance policies provide coverage for the same risks, Tenant’s insurance shall be primary.
(iii) The insurance policies or duly executed certificates thereof, together with satisfactory evidence that the premium has been paid, shall be deposited with the Landlord on or before delivery of possession and thereafter evidence of continuing insurance and premium payments shall be delivered to Landlord not less than ten (10) days prior to the expiration of each policy required to be in force hereunder and at any other time requested by Landlord.
(iv) All insurance carried by Tenant shall be in form satisfactory to Landlord and shall provide that the policy shall not be subject to cancellation, termination or modification except after at least ten (10) days’ prior written notice to the Landlord and to any Mortgagee to whom a loss thereunder may be payable.
(v) If Tenant fails to maintain the required insurance, Landlord may, but shall not be obligated to, obtain such insurance and Tenant shall pay Landlord the premium on demand.
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(ii) Each party hereby releases the other party with respect to any claim (including a claim for negligence) which it might otherwise have against the other party for loss, damage or destruction with respect to its property occurring during the term of this Lease to the extent to which such claim is insured under a policy or policies containing a waiver of subrogation or permission to release liability or naming the above party as an additional insured as provided above.
13. Trade Fixtures. All trade fixtures installed by Tenant in the Premises, other than improvements to the Premises made by Tenant, shall remain the property of the Tenant and shall be removable from time to time and also at the expiration of the term of this Lease or other termination thereof, provided that Tenant shall not at such time be in default under any covenant or agreement contained in this Lease; otherwise such property shall not be removable and Landlord shall have a lien on said fixtures to secure itself against loss and damage resulting from said default or defaults by Tenants.
14. Inspection of Premises. Tenant covenants and agrees to permit Landlord, its agents, employees and contractors to enter the Premises and all parts thereof at all reasonable times to inspect the Premises and to enforce and carry out any provision or provisions of this Lease.
15. Holding Over. The parties hereto covenant and agree that this Lease and the tenancy hereby created shall cease and terminate at the end of the Lease Term (or Renewal Term as applicable) without the necessity of any notice from either Landlord or Tenant to terminate the same. In the event Tenant remains in possession of the Premises after termination of this Lease and in the absence of renewal in accordance with to the terms of Section 3 or any written agreement with Landlord permitting Tenant to do so, Tenant shall be deemed a month-to-month tenant of the Premises at a rental equal to one hundred and twenty-five percent (125%) of the Base Monthly Rent for the expiring term of the Lease.
16. Showing of Premises. Tenant covenants and agrees that for the period of six (6) months prior to the end of the Lease Term (or Renewal Term as applicable), Landlord shall have the right to display on the exterior of the Premises or within the windows visible from the exterior of the Premises the customary sign “For Rent” and that during such period, Landlord may show the Premises and all parts thereof to prospective tenants during normal operating hours on any day except any legal holiday on which Tenant shall not be open for business.
17. Damage or Destruction. If the Premises shall be damaged by fire, the elements, unavoidable accidents or other casualty, whether or not the Premises are rendered untenantable in whole or in part, Landlord shall promptly at its own expense cause such damage to be repaired, and the rent shall not be abated. If the Premises cannot in Landlord’s opinion, be repaired within one hundred and twenty (120) days of such occurrence, Landlord shall give Tenant written notice of such determination, in which event this Lease and the tenancy hereby created shall terminate as of the date of said occurrence, the rental to be adjusted as of such date.
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18. Eminent Domain. If the whole or any part of the Premises shall be taken under the power of eminent domain, then this Lease shall terminate as to the part so taken on the day when Tenant is required to yield possession thereof, and Landlord shall make such repairs and alterations as may be necessary in order to restore the part not taken to useful condition; pending the restoration by Landlord of the portion of the Premises not so taken, the rental shall be reduced proportionately to the portion of the Premises not taken. If the amount of the Premises not taken is such as to substantially impair the usefulness of said Premises for the purposes for which the same are hereby leased, then either party shall have the option to terminate this Lease as of the date when Tenant is required to yield possession. The compensation awarded for such taking, both as to Landlord’s reversionary interest and Tenant’s interest under this Lease, shall belong to and be the property of Landlord; provided, however, that Landlord shall not be entitled to any portion of the award made to Tenant for loss of Tenant’s business or for the cost of removal of its stock and Tenant’s fixtures, if so separately stated and valued.
19. Events of Default. The occurrence or existence of any one or more of the following events or circumstances shall constitute an “Event of Default” under this Lease:
(a) Failure in Payment. The failure by Tenant to pay when due any installment of Base Rent, Additional Rent (including Additional Rent payable to third parties), or Late Fee due under the terms of this Lease.
(b) Failure in Performance. The failure by Tenant to perform or observe all of the covenants on Tenant’s part to be performed or observed under this Lease, if Tenant fails to remedy that failure within ten (10) days after Landlord gives written notice of the breach to Tenant; provided, however, that in the event the breach arises from Tenant’s violation of any applicable law, ordinance or similar governmental restriction, and if the agency enforcing the restriction allows a shorter period for the cure of the breach, then Tenant shall be obligated to effect the cure of the breach within that shorter period.
(c) Attachment. The taking of this Lease or the Premises or any part thereof upon execution or by other process of law directed against Tenant, or upon or subject to any attachment at the instance of any creditor of or claimant against Tenant, if such attachment shall not be discharged or disposed of within fifteen (15) days after the levy of same.
(d) Vacating or Abandonment. The vacating or abandonment of the Premises (which shall be defined to include, but not be limited to, any absence by Tenant from the Premises for ten (10) or more consecutive days without prior written consent from Landlord), or Tenant’s locking the Premises so as to prevent the entry by Landlord, or its representatives as permitted by the terms of this Lease.
(e) Assignment without Consent. The assignment or subletting of the Premises or any portion of the Premises without the consent of Landlord.
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(f) Insolvency Filing. An action by Tenant or any guarantor of Tenant’s obligations under this Lease to (i) admit in writing its inability to pay its debts generally as they become due; (ii) make an assignment of all or a substantial part of its property for the benefit of creditors; (iii) apply for or consent to or acquiesce in the appointment of a receiver, trustee or liquidator of Tenant or such guarantor or of all or a substantial part of Tenant’s or such guarantor’s property or of the Premises or of Tenant’s interest in this Lease; or (iv) file a voluntary petition in bankruptcy or a petition or an answer seeking reorganization under any bankruptcy or insolvency law or an arrangement with creditors, or take advantage of any insolvency law or file an answer admitting the material allegations of a petition filed against Tenant or such guarantor in any bankruptcy, reorganization or insolvency proceedings.
(g) Insolvency Adjudication. The entry of a court order, judgment or decree without the application, approval or consent of Tenant or any guarantor of Tenant’s obligations under this Lease, as the case may be, approving a petition seeking reorganization of Tenant or such guarantor under any bankruptcy or insolvency law or appointing a receiver, trustee or liquidator of Tenant or such guarantor, or of all or a substantial part of Tenant’s or such guarantor’s property, or of the Premises, or of Tenant’s interest in this Lease, or adjudicating Tenant or such guarantor a bankrupt or insolvent, if such order, judgment or decree shall not be vacated, set aside or stayed within thirty (30) days from the date of entry.
(h) Other Default. Default by Tenant or any guarantor on any other obligation to Landlord.
20. Landlord’s Remedies. Upon the occurrence of an Event of Default, Landlord shall have the right, at its election, then or at any time thereafter and while any such Event of Default shall continue, either:
(a) To give Tenant written notice of Landlord’s intention to terminate this Lease on the date such notice is given or on any later date specified therein, whereupon, on the date specified in such notice, Tenant’s right to possession of the Premises shall cease and this Lease shall thereupon be terminated; or
(b) To re-enter and take possession of the Premises or any part thereof and repossess the same as Landlord’s former estate and expel Tenant and those claiming through or under Tenant, and remove the effects of both or either, using such force for such purposes as may be reasonably necessary, without being liable for prosecution thereof, without being deemed guilty of any manner of trespass and without prejudice to any remedies for arrears of rent or preceding breach of covenants or conditions. Should Landlord elect to re-enter the Premises as provided in this Section 20(b) or should Landlord take possession pursuant to legal proceedings or pursuant to any notice provided for by law, Landlord may, from time to time, without terminating this Lease, re-let the Premises or any part thereof in Landlord’s or Tenant’s name, but for the account of Tenant, for such term or terms (which may be greater or less than the period which would otherwise have constituted the balance of the term) and on such conditions and upon such other terms (which may include concessions of free rent and alteration and repair of the Premises) as Landlord, in its discretion, may determine, and Landlord may collect and receive the rents therefor. Landlord shall in no way be responsible or liable for any failure to re-let the Premises or any part thereof or for any failure to collect any rent due upon such re-letting. No such re-entry or taking possession of the Premises by Landlord shall be construed as an election on Landlord’s part to terminate this Lease unless a written notice of such intention be given to Tenant. No notice from Landlord hereunder or under a forcible entry and detainer statute or similar law shall constitute an election by Landlord to terminate this Lease unless such notice specifically so states. Landlord reserves the right following any such re-entry and/or re-letting, to exercise its right to terminate this Lease by giving Tenant such written notice, in which event, this Lease will terminate as specified in said notice.
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(c) In the event that Landlord does not elect to terminate this Lease as permitted in Section 20(a) hereof, but on the contrary, elects to take possession as provided in Section 20(b), Tenant shall pay to Landlord the rent and other sums as herein provided, which would be payable hereunder if such repossession had not occurred, less the net proceeds, if any, of any reletting of the Premises after deducting all Landlord’s expenses in connection with such reletting, including but without limitation, all repossession costs, brokerage commissions, legal expenses, attorneys’ fees, expenses of employees, alteration and repair costs and expenses of preparation for such reletting. If, in connection with any reletting, the new lease term extends beyond the existing term, or the premises covered thereby include other premises not part of the Premises, a fair apportionment of the rent received from such reletting and the expenses incurred in connection therewith as provided aforesaid will be made in determining the net proceeds from such reletting. Tenant shall pay such rent and other sums to Landlord monthly on the days on which the rent would have been payable hereunder if possession had not been retaken.
(d) In the event this Lease is terminated, Tenant shall remain liable to Landlord for damages in an amount equal to the total of the following:
(i) the cost, including reasonable attorneys’ fees, of demanding and recovering the Premises;
(ii) all unpaid Base Rent, Additional Rent, Late Fee and any other rent earned at the time of termination of this Lease, plus interest thereon at eighteen percent (18%) per annum;
(iii) all other money and damages owed by Tenant to Landlord.
(iv) Base Rent, Additional Rent, Late Fee, and other rent and sums which would have been owing by Tenant hereunder for the balance of the term had this Lease not been terminated, less the net proceeds, if any, received by Landlord from any reletting of the Premises by Landlord subsequent to such termination, after deducting all Landlord’s expenses in connection with finding a new tenant and such recovery of possession and reletting, including tenant improvements, remodeling and refinishing space for a new tenant, reasonable and customary tenant inducements and abatements, brokerage fees or agents’ commissions in connection therewith, redecorating costs, reasonable attorneys’ fees, and other costs and expenses incident to recovering and reletting the Premises; and Landlord shall be entitled to collect and receive such damages from Tenant on the days on which the Base Rent, Additional Rent, Late Fee, and other rent and sums would have been payable if this Lease had not been terminated.
(e) Suit or suits for the recovery of the amounts and damages set forth above may be brought by Landlord, from time to time, at Landlord’s election and nothing herein shall be deemed to require Landlord to await the date whereon this Lease or the term hereof would have expired had there been no such default by Tenant or no such termination, as the case may be.
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(f) After an Event of Default by Tenant, Landlord may sue for or otherwise collect all rents, issues and profits payable under all subleases on the Premises, including those past due and unpaid.
(g) After an Event of Default by Tenant, Landlord may without terminating this Lease, enter upon the Premises, with force if necessary, without being liable for prosecution of any claim for damages, without being deemed guilty of any manner of trespass and without prejudice to any other remedies, and do whatever Tenant is obligated to do under the terms of this Lease. Tenant agrees to reimburse Landlord on demand for any expenses which Landlord may incur in effecting compliance with the Tenant’s obligations under this Lease; further, Tenant agrees that Landlord shall not be liable for any damages resulting to Tenant from effecting compliance with Tenant’s obligations under this subparagraph caused by the negligence of Landlord or otherwise.
(h) Injunction and Specific Performance. In the event of a breach or threatened breach by Tenant of any of the terms, covenants, or conditions of this Lease, Landlord shall also have the right of injunction and specific performance. Tenant agrees to pay the premium for any bond required in connection with any injunction.
(i) Compliance with Applicable Law. Notwithstanding any of the foregoing, in exercising its remedies under this Lease, Landlord shall comply with all applicable Colorado law, including but not limited to, the forcible entry and detainer statutes.
(j) Attorneys’ Fees. In the event of any legal proceeding arising under this Lease, the prevailing party shall be entitled to an award of its reasonable attorneys’ fees (including legal assistants’ fees) and costs. For the purposes of this Lease, the term “prevailing party” shall include a party who withdraws or moves for dismissal of a claim in consideration of payment allegedly due, performance allegedly owed or other consideration in substantial satisfaction of the claim withdrawn or dismissed.
(k) Landlord’s Lien. Landlord shall have at all times a security interest and a lien for all rent and other sums of money becoming due hereunder from Lessee, subordinate only to a purchase money security interest, upon all goods, wares, equipment, fixtures, furniture, other personal property and licenses situated in or pertaining to the Premises belonging to Tenant, and such property shall not be removed therefrom without the consent of Landlord until all arrearages in rent and other sums of money then due to Landlord hereunder shall first have been paid. Upon the occurrence of any event of default by Tenant, Landlord may foreclose in the manner provided by law for the foreclosure of a security interest and may dispose of any property subject to the lien through public or private sale. Tenant agrees that Landlord may record such financing statements as Landlord may deem necessary to perfect the security interest in the lien granted to Landlord pursuant to this Section.
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21. Remedies Cumulative and Waiver.
(a) Each right and remedy provided for in this Lease shall be cumulative and shall be in addition to every other right or remedy provided for in this Lease now or hereafter existing at law or in equity or by statute or otherwise, including, but not limited to, suits for injunctive or declaratory relief and specific performance. No mention in this Lease of any specific right or remedy shall preclude Landlord from exercising any other right or from having any other remedy or from maintaining any action to which it may otherwise be entitled either at law or in equity; and the failure of Landlord to insist in any one or more instances upon a strict performance of any covenant of Tenant under this Lease or to exercise any option or right herein contained shall not be construed as a waiver or relinquishment for the future of such covenant, right or option, but the same shall remain in full force and effect unless the contrary is expressly waived in writing by Landlord.
(b) The waiver by Landlord of any breach of any term, covenant or condition herein contained shall not be deemed to be a waiver of such term, covenant or condition on any subsequent breach of the same or any other term, covenant or condition herein contained. The subsequent acceptance of the rent hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease, other than the failure of Tenant to pay the particular rental so accepted, regardless of Landlord’s knowledge of such preceding breach at the time of acceptance of such rent. No covenant, term or condition of this Lease shall be deemed to have been waived by Landlord, unless such waiver be in writing and signed by Landlord.
22. Injury from Leakage, etc. Landlord shall not be liable for any injury or damage to persons or property resulting from falling plaster, steam, gas, electricity, water, rain or snow which may leak or issue from any part of the Premises or from pipes, appliances or plumbing, or from sewers or the street or subsurface, or from any other place, by dampness or other cause of whatever nature.
23. Recording. This Lease shall not be recorded in the public records of La Plata County, Colorado.
24. Property and Sales Taxes.
(a) Real Property Taxes. Tenant will pay before delinquency (and provide Landlord with reasonable evidence thereof) all Real Property Taxes that may be levied or imposed during the Term against all of part of the Premises. “Real Property Taxes” means all general real estate taxes, ad valorem taxes, general and special assessments, surcharges and other similar governmental charges levied against or applicable to the Premises for each calendar year.
(b) Personal Property Taxes. Tenant shall pay all personal property taxes assessed on the personal property located on or used in connection with the Premises (whether owned by Landlord or Tenant). All such taxes shall be paid as and when they become due and prior to delinquency.
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(c) Sales Taxes. Tenant shall pay all sales taxes assessed against the business operating on or in connection with the Premises. All such taxes shall be paid as and when they become due and prior to delinquency. Tenant shall not allow any lien to attached to personal property or fixtures located at the premises due to failure to timely pay such taxes and shall immediately discharge any such lien.
(d) Payroll Taxes. Tenant shall pay all federal and state taxes due and owing by reason of wages or other benefits paid to agents, employees, or servants. Tenant shall not allow any lien to attached to personal property or fixtures located at the premises due to failure to timely pay such taxes and shall immediately discharge any such lien.
(e) Proof of Payment. Tenant shall promptly provide to Landlord reasonable proof of payment of personal property taxes and real property taxes on or before the due date for such tax payment. Reasonable proof may include certification of payment by a certified public accountant.
(f) Default. If Tenant fails to make the payments in strict compliance with the provisions of this Section, Landlord may, but shall not be required to, make the payment on Tenant’s behalf and to be reimbursed therefore with interest at the rate of 18% per annum.
25. Successors and Assigns. Except as herein provided, this Lease and the covenants and conditions herein contained shall inure to the benefit of and be binding upon Landlord, its successors and assigns, and shall be binding upon Tenant, its successors and assigns, and shall inure to the benefit of Tenant and only such assignees of Tenant to whom an assignment by Tenant has been consented to in writing by Landlord. In the event more than one person, firm or corporation is named herein as Tenant, the liability of all parties named herein as Tenant shall be joint and several.
In the event Landlord’s interest under this Lease is transferred or assigned and written notice thereof is given to Tenant, the Landlord herein named (or any subsequent assignee or transferee of Landlord’s interest under this Lease who gives such notice to Tenant) shall automatically be relieved and released from and after the date of such transfer or conveyance from all liability hereunder except with respect to liability to refund or return to Tenant any security deposit by Tenant with Landlord hereunder. Further, the liability of Landlord, its successors and assigns, under this Lease shall at all times be limited solely to Landlord’s interest in the Premises and in the event the owner of Landlord’s interest in this Lease is at any time a partnership, joint venture or unincorporated association, Tenant agrees that the members or partners of such partnership, joint venture or unincorporated association shall not be personally or individually liable or responsible for the performance of any of Landlord’s obligations hereunder.
26. Entire Agreement. This Lease contains the entire agreement between the parties hereto, and shall upon the Commencement Date replace and supersede any existing lease for the Premises; provided however, that Tenant shall remain liable to Landlord for any amounts due under any existing lease prior to the Commencement Date. Any agreement hereafter or heretofore made shall not operate to change, modify, terminate or discharge this Lease in whole or in part unless such agreement is in writing and signed by each of the parties hereto. Landlord has made no representations or promises with respect to the Premises except as are herein expressly set forth.
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27. Surrender and Notice. Upon the expiration or earlier termination of this Lease, Tenant shall promptly quit and surrender to Landlord the Premises broom clean, in good order and condition, ordinary wear and tear and loss by fire or other casualty or condemnation excepted, and Tenant shall remove all of its movable furniture and other effects and such alterations, additions and improvements as Landlord shall require Tenant to remove. In the event Tenant fails to so vacate the Premises on a timely basis as required, Tenant shall be responsible to Landlord for all costs and damages, including but not limited to any amounts required to be paid to third parties who were to have occupied the Premises, incurred by Landlord as a result of such failure, plus interest thereon at the rate of twelve percent (18%) per annum on all amounts not paid by Tenant within five (5) days of demand, until paid in full.
28. Environmental Provisions.
(a) As used in this section, “Environmental Legal Requirements” shall mean any applicable law relating to public health, safety or the environment, including, without limitation, relating to releases, discharges or omissions to air, water, land or groundwater, to the withdrawal or use of groundwater, to the use and handling of polychlorinated biphenyls (“PCB’s”) or asbestos, or asbestos containing products, to the disposal, treatment, storage or management of solid or other hazardous or harmful wastes or to exposure to toxic, hazardous or other harmful materials (collectively “Hazardous Substances”) to the handling, transportation, discharge or release of gaseous or liquid substance and any regulation or final order or directive issues pursuant to such statute or ordinance, in each case applicable to the premises, the building or its operation, construction or modification, including without limitation the following: the Clean Air Act, the Federal Water Pollution Control Act (“FWPCA”), the Safe Drinking Water Act, the Toxic Substances Control Act, the Comprehensive Environmental Response Compensation and Liability Act, as amended by the Solid and Hazardous Waste Amendments of 1984 (“RCRA”), the Occupational Safety and Health Act, the Emergency Planning and Community Right-to-Know Act of 1986, the Solid Waste Disposal Act, and any state statutes addressing similar matters, and any state statute providing for financial responsibility for clean-up or other actions with respect to the release or threatened release of any of the above-referenced substances.
(b) Tenant represents and warrants that no Hazardous Substances have been used, stored, or placed on the Premises, and that it has not received any notice of violation any Environmental Legal Requirements or notice or order to take any remedial action under any Environmental Legal Requirements with respect to the Property before or during its period of ownership of the Premises.
(c) Tenant and its successors and assigns shall use and operate the Premises at all times during the term hereof, under and in compliance with the laws of the State of Colorado and in compliance with all applicable Environmental Legal Requirements.
(d) Tenant hereby indemnifies and saves Landlord harmless from all liabilities, claims, expenses, and causes of action arising from the use, storage or placement of any Hazardous Substances upon the Premises, if brought or placed thereon by Tenant, its agents, employees, contractors or invitees, or previously existing on the Premises. Tenant acknowledges the reasonableness of this indemnity based on its prior ownership of the Premises. Tenant shall (i) within fifteen (15) days after written notice thereof, take or cause to be taken, at its sole expense, such actions as may be necessary to comply with all Environmental Legal Requirements and (ii) within fifteen (15) days after written demand therefor, reimburse Landlord for any amounts expended by Landlord to comply with any Environmental Requirements with respect to the premises or with respect to any other portions of Landlord’s Building or property as the result of the placement or storage of Hazardous Substances by Tenant, its agents, employees, contractors or invitees, or in connection with any judicial or administrative investigation or proceeding relating thereto, including, without limitation, reasonable attorneys’ fees, fines or other penalty payments. The indemnification provided herein shall survive the termination of the Lease.
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(e) For purposes of this provision, Tenant shall be conclusively deemed to have violated the Environmental Legal Requirements if (i) any notice or order is directed to either Landlord or Tenant by any governmental agency, body, or court alleging that such violation has occurred; or (ii) if Landlord obtains and delivers to Tenant a report prepared by an engineer or other party engaged in the business of testing or determining the existence of Hazardous Substances, which report states that there are Hazardous Substances used, stored or placed upon the Premises. In the event Tenant is deemed to have violated any of the Environmental Legal Requirements as set forth in the preceding sentence, Landlord shall have the right and option, after fifteen (15) days prior written notice to Tenant, to terminate this Lease by written notice thereof to Tenant, in which event Landlord shall retain all rights and remedies, and Landlord shall be entitled to all remedies set forth in Section 20 of this Lease notwithstanding such termination.
(f) Tenant hereby grants Landlord, and Landlord’s agents and employees (including but not limited to, any engineers or other parties engaged in the testing of Hazardous Substances) the right to enter upon the Premises for the purpose of determining whether Tenant, its agents, employees, contractors or invitees, has violated any of the provisions of this Section. Landlord does not assume any duty to undertake any testing for or remediation of Hazardous Substances.
29. Purchase of Property upon Change in Control.
(a) Upon the occurrence of a Change of Control of Tenant, Tenant or the surviving corporation in a merger of Tenant shall purchase the Premises at the landlords option for the price of $6,930,000.00, or the appraised value of the Premises (Tenant shall pay the cost of an appraisal), whichever is greater. Landlord and Tenant shall execute a Contract to Buy and Sell (Commercial) on Form CBS3-6-24 providing for a closing date on or before 90 days after the Change in Control, with Tenant/Buyer to pay all fees for title insurance, closing costs, any inspections or other due diligence desired by Tenant/Buyer, and no prorations other than Base Rent under this Lease. Landlord and Tenant shall cooperate to execute all closing instructions, resolutions, consents, statements, and affidavits reasonably requested by the other party or the title company to complete closing on or before the closing date.
(b) For purposes of this Lease, a “Change of Control” means: (i) a dissolution, liquidation or sale of all or substantially all of the assets of Tenant; (ii) a merger or consolidation in which the Tenant is not the surviving corporation; (iii) a reverse merger in which Tenant is the surviving corporation but the shares of Tenant’s common stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise; or (iv) the acquisition by any person, entity or group within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored or maintained by Tenant or any Affiliate of Tenant) of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule) of securities of Tenant representing at least fifty percent (50%) of the combined voting power entitled to vote in the election of directors.
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30. Notices.
(a) All notices from Tenant to Landlord required or permitted by any provision in this Lease, shall be hand delivered or sent by overnight delivery or same-day messenger or certified mail, return receipt requested to Landlord at:
AMERICAN HERITAGE LEGACIES, LLC
479 Main Avenue
Durango, CO 81301
(b) All notices from Landlord to Tenant required or permitted by any provision in this Lease shall be hand delivered or sent by overnight delivery or same-day messenger or certified return receipt requested to Tenant at the Premises, or in the alternative to the address as follows:
ROCKY MOUNTAIN CHOCOLATE FACTORY, INC.
265 Turner Drive
Durango, CO 81303
Either party may, at any time, or from time to time, designate in writing a substitute address for that above set forth, and thereafter all notices to such party shall be sent in accordance with the above.
31. Captions. The captions in this Lease are for convenience only and are not a part of this Lease.
32. Waiver of Jury Trial.
TENANT WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, COUNTERCLAIM, OR PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS LEASE. THIS WAIVER APPLIES TO ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS AND PROCEEDINGS, INCLUDING PARTIES WHO ARE NOT PARTIES TO THIS LEASE. THIS WAIVER IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE BY TENANT AND TENANT ACKNOWLEDGES THAT NEITHER LANDLORD, NOR ANY PERSON ACTING ON BEHALF OF LANDLORD, HAS MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. TENANT FURTHER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS LEASE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN FREE WILL, IN THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
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THE LANDLORD AGREES THAT, IF THE LESSEE FINDS A BUYER FOR THE LEASED PROPERTY WITHIN 120 DAYS FROM THE EXECUTION OF THIS LEASE, THE LANDLORD WILL SELL THE PROPERTY FOR $6,930,000 PLUS ALL CLOSING COSTS, REASONABLE ATTORNEYS FEES AND PREPAYMENT PENALTIES, IF ANY.
IN WITNESS WHEREOF, the parties hereto have executed this Lease on the day and year first above written.
| Landlord: | Tenant: | |
| AMERICAN HERITAGE LEGACIES, LLC | ROCKY MOUNTAIN CHOCOLATE FACTORY, INC. | |
| /s/ John Harper | /s/ Mel Keating | |
| By: John Harper, Managing Member | By: Mel Keating, Director and Board Chair | |
| DATE: 10/1/2026 | DATE: 10/1/2026 |
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Exhibit 99.1
Rocky Mountain Chocolate Factory Announces $6.6 Million Sale-Leaseback of Durango Property
DURANGO, Colo., October 6, 2026 (GLOBE NEWSWIRE) -- Rocky Mountain Chocolate Factory, Inc. (Nasdaq: RMCF) (the “Company” or “RMCF”), America’s Chocolatier® since 1981, today announced it has signed a $6.6 million sale-leaseback agreement with American Heritage Legacies, LLC, involving its Durango, Colorado property. American Heritage Legacies, LLC, is a local company controlled by the family of Allen Harper, the Company’s Interim Chief Executive Officer. As such, the sale-leaseback transaction constitutes a “related party transaction” for the Company.
The Company expects to use the net proceeds from the transaction to repay its existing $6.6 million promissory note, which accrues interest at a rate of 12% per annum. The lease has an initial term of 10 years, with an option to renew for an additional 10 years. Annual rent will be $624,000 during the first year, representing 9.45% of the $6.6 million purchase price, and will increase by 2% annually. The lease will allow the Company to continue using the Durango facility as its corporate headquarters and production and warehouse facility.
“We are focused on making thoughtful financial decisions that strengthen Rocky Mountain Chocolate Factory and create a more sustainable foundation for the business,” said Mel Keating, Chairman of the Board of Directors of Rocky Mountain Chocolate Factory. “This transaction allows us to significantly reduce our existing debt while securing our continued operations at the Durango facility under a long-term lease.”
The transaction was reviewed and approved by the Company’s Audit Committee and the disinterested members of the Board of Directors, with Mr. Harper recusing himself from the review process. The purchase price was supported by an independent appraisal of the property.
About Rocky Mountain Chocolate Factory, Inc.
Rocky Mountain Chocolate Factory, Inc. is a leading franchisor, manufacturer and retailer of premium chocolates and other confectionery products. As America’s Chocolatier® since 1981, the Company produces an extensive assortment of premium chocolates, gourmet caramel apples and other handcrafted confections. Headquartered in Durango, Colorado, Rocky Mountain Chocolate Factory is ranked among Entrepreneur’s Franchise 500® for 2026. Together with its franchisees and licensees, the Company operates approximately 250 Rocky Mountain Chocolate Factory locations across the United States and internationally. The Company’s common stock is listed on the Nasdaq Global Market under the symbol “RMCF.”
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company’s anticipated use of proceeds and repayment of the promissory note, expected benefits of the transaction, anticipated interest expense savings, financial position, operating performance, strategic priorities and future growth. These forward-looking statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. These risks and uncertainties include, among others, the Company’s financial condition and operating results, and other risks described in the Company’s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. The Company undertakes no obligation to update any forward-looking statements except as required by applicable law.
Investor Contact
Sean Mansouri, CFA
Elevate IR
(720) 330-2829
RMCF@elevate-ir.com
Media Contact
Raymond Barrett
Director of Marketing
(305) 801-5641
rbarrett@rmcf.net