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EXHIBIT 10.15
FORM OF
L E A S E
PRESIDIO GOLF LIMITED PARTNERSHIP
LANDLORD
AND
_________________________________________________
TENANT
DATED AS OF ______________________ , 1998
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TABLE OF CONTENTS
ARTICLE PAGE
1 LEASED PROPERTY.......................................................4
2 TERM..................................................................4
2.1 Initial Term................................................4
2.2 Extended Terms..............................................4
3 RENT..................................................................5
3.1 Rent........................................................5
3.2 Base Rent...................................................5
3.3 Additional Rent.............................................5
3.3.1 Quarterly Calculation and Payment of
Additional Rent......................................5
3.3.2 Annual Reconciliation................................6
3.3.3 Record-keeping.......................................6
3.3.4 Audits...............................................6
3.4 Additional Charges..........................................7
3.5 Late Payment of Rent........................................7
3.6 Net Lease...................................................8
4 IMPOSITIONS...........................................................8
4.1 Payment of Impositions......................................8
4.2 Information and Reporting...................................9
4.3 Assessment Challenges.......................................9
4.4 Prorations..................................................9
4.5 Refunds.....................................................9
4.6 Utility Charges.............................................9
4.7 Assessment Districts........................................9
5 TENANT WAIVERS.......................................................10
5.1 No Termination, Abatement, Etc.............................10
5.2 Condition of the Leased Property...........................11
6 OWNERSHIP OF PROPERTY................................................11
6.1 Leased Property............................................11
6.2 Landlord's Personal Property...............................12
6.3 Tenant's Personal Property.................................12
6.4 Purchase of Tenant's Personal Property.....................12
6.5 Removal of Personal Property...............................13
6.6 Landlord's Waivers.........................................13
6.7 Collateral Agreements......................................13
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7 USE OF LEASED PROPERTY...............................................14
7.1 Use........................................................14
7.2 Specific Prohibited Uses...................................15
7.3 Landlord to Grant Easements, Etc...........................15
8 HAZARDOUS MATERIALS..................................................16
8.1 Tenant Representations.....................................16
8.1.1 Reports.............................................16
8.2 Remediation................................................16
8.3 Tenant's Indemnification of Landlord and Others............17
8.4 Survival of Indemnification Obligations....................17
9 MAINTENANCE AND REPAIR...............................................17
9.1 Tenant's Sole Obligation - General.........................17
9.2 Clubhouse Facility Maintenance.............................18
9.3 Golf Course Maintenance....................................18
9.4 Waiver of Statutory Obligations............................18
9.5 Mechanic's Liens...........................................18
9.6 Surrender of Leased Property...............................19
9.7 Transfer of Operating Permits..............................19
10 TENANT'S IMPROVEMENTS................................................19
10.1 Tenant's Right to Construct................................19
10.2 Scope of Right.............................................20
10.3 Cooperation of Landlord....................................20
10.4 Commencement of Construction...............................21
10.5 Rights in Tenant Improvements..............................21
11 LIENS, ENCROACHMENTS AND OTHER TITLE MATTERS.........................21
11.1 Liens......................................................21
11.2 Encroachments and Other Title Matters......................22
12 PERMITTED CONTESTS...................................................23
13 INSURANCE............................................................24
13.1 General Insurance Requirements.............................24
13.1.1 All Risk...........................................24
13.1.2 Liability..........................................25
13.1.3 Flood..............................................25
13.1.4 Worker's Compensation..............................25
13.1.5 Rent Loss..........................................25
13.1.6 Other Insurance....................................25
13.2 Replacement Cost...........................................25
13.3 Waiver of Subrogation......................................25
13.4 Form Satisfactory, Etc.....................................26
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13.5 Change in Limits...........................................26
13.6 Blanket Policy.............................................26
14 APPLICATION OF INSURANCE PROCEEDS....................................27
14.1 Insurance Proceeds.........................................27
14.1.1 Disbursement of Proceeds...........................27
14.1.2 Excess Proceeds....................................28
14.2 Reconstruction Covered by Insurance........................28
14.2.1 Destruction Rendering Facility
Unsuitable for its Primary Use.....................28
14.2.2 Destruction Not Rendering Facility
Unsuitable for its Primary Use.....................29
14.2.3 Costs of Repair....................................29
14.3 Reconstruction Not Covered by Insurance....................29
14.4 No Abatement of Rent.......................................29
14.5 Waiver.....................................................29
14.6 Damage Near End of Term....................................29
15 CONDEMNATION.........................................................30
15.1 Total Taking...............................................30
15.2 Partial Taking.............................................30
15.3 Restoration................................................30
15.4 Award Distribution.........................................30
15.5 Temporary Taking...........................................30
16 EVENTS OF DEFAULT....................................................31
16.1 Events of Default..........................................31
16.2 Payment of Costs...........................................33
16.3 Exceptions.................................................33
16.4 Certain Remedies...........................................33
16.5 Damages....................................................34
16.6 Additional Remedies........................................35
16.7 Appointment of Receiver....................................35
16.8 Waiver.....................................................35
16.9 Application of Funds.......................................35
17 LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT............................35
18 OPERATIONS/CAPITAL EXPENDITURES......................................36
18.1 Annual Plan................................................36
18.2 Funding of Capital Expenditure Reserve Account.............36
19 LEGAL REQUIREMENTS...................................................37
20 HOLDING OVER.........................................................38
21 UPREIT UNITS/REIT SHARES/LETTER OF CREDIT/SECURITY DEPOSIT...........38
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21.1 Security Deposit...........................................38
21.2 Officer's Certificate/Audit................................38
21.3 Terms of Letter of Credit..................................39
21.4 Draws Against Letter of Credit/Alternative
Security; Application of Proceeds .......................39
21.5 Renewal of Letter of Credit................................40
21.6 Other Security.............................................40
22 IMPOUNDS.............................................................40
23 INDEMNIFICATION; RISK OF LOSS........................................41
23.1 Tenant's Indemnification...................................41
23.2 Landlord's Indemnification of Tenant.......................42
23.3 Mechanics of Indemnification...............................42
23.4 Survival of Indemnification Obligations....................42
23.5 Risk of Loss...............................................42
24 SUBLETTING AND ASSIGNMENT............................................43
24.1 Prohibition Against Subletting and Assignment..............43
24.2 Changes in Control.........................................43
24.2.1 Financial Covenants................................44
24.2.2 Operating Standards................................44
24.2.3 Commitment to the Golf Industry....................44
24.3 Subleases..................................................44
24.3.1 Permitted Subleases................................44
24.3.2 Terms of Sublease..................................45
24.3.3 Copies.............................................45
24.3.4 Assignment of Rights in Subleases..................45
24.3.5 Licenses, Etc......................................46
24.4 Assignment.................................................46
24.5 REIT Limitations...........................................46
25 OFFICER'S CERTIFICATES AND OTHER STATEMENTS..........................46
25.1 Officer's Certificates.....................................46
25.2 Financial Reporting........................................48
25.2.1 Monthly Financial Information.....................48
25.2.2 Quarter Financial Information.....................48
25.2.3 Annual Financial Statements.......................48
25.2.4 Other Information.................................49
25.2.5 Standard Reporting Format.........................49
25.3 Environmental Statements...................................49
26 LANDLORD MORTGAGES...................................................50
26.1 Landlord May Grant Liens...................................50
26.2 Tenant's Non-Disturbance Rights............................50
26.3 Breach by Landlord.........................................50
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26.4 Facility Mortgage Protection...............................50
26.5 Attornment.................................................51
26.6 Facility Mortgagee or Successor Owner as Landlord..........51
26.7 Prepayments and Modifications of the Lease.................52
27 MISCELLANEOUS........................................................52
27.1 Landlord's Right to Inspect................................52
27.2 No Waiver..................................................52
27.3 Remedies Cumulative........................................53
27.4 Acceptance of Surrender....................................53
27.5 No Merger of Title.........................................53
27.6 Conveyance by Landlord.....................................53
27.7 Quiet Enjoyment............................................53
27.8 Notices....................................................53
27.9 Survival of Claims.........................................54
27.10 Invalidity of Terms or Provisions..........................54
27.11 Prohibition Against Usury..................................54
27.12 Amendments to Lease........................................54
27.13 Successors and Assigns.....................................54
27.14 Titles.....................................................54
27.15 Governing Law..............................................54
27.16 Memorandum of Lease........................................54
27.17 Attorneys' Fees............................................54
27.18 Non-Recourse as to Landlord................................54
27.19 No Relationship............................................55
27.20 Signs; Reletting...........................................55
27.21 Golf Course Name...........................................55
28 TENANT MORTGAGES.....................................................55
29 INTENTIONALLY OMITTED................................................55
30 TENANT'S STRUCTURE...................................................56
31 RIGHT OF FIRST OFFER.......................................57
31.1 Exercise of First Offer Right..............................57
31.2 Further Documentation......................................57
31.3 Purchase Price.............................................58
31.4 Mechanics of Purchase......................................58
31.5 REIT Qualification Limitation..............................59
31.6 Effectiveness of First Offer Right.........................59
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EXHIBITS:
EXHIBIT A - Defined Terms: Interpretation
EXHIBIT B - Legal Description of the Land
EXHIBIT C - Other Leased Property
EXHIBIT D - Operating Standards
EXHIBIT E - Standard Reporting Format
EXHIBIT F - Base Rent Schedule
EXHIBIT G - Baseline Revenue Schedule
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LEASE
THIS LEASE ("Lease"), dated ______________________, 1998, is entered
into by and between PRESIDIO GOLF LIMITED PARTNERSHIP, a Delaware limited
partnership ("Landlord"), and ___________________________________, a Delaware
limited liability company ("Tenant"). This Lease consists of the Basic Lease
Provisions, the Detailed Lease Provisions, the Joinder and Exhibits A through G,
all of which are incorporated herein by this reference. Capitalized terms used
herein have the meanings assigned to such terms in Exhibit A.
BASIC LEASE PROVISIONS
1. ADDITIONAL RENT: Means the amount, if any, by which (a) the
sum of:
(i) the Applicable Percentage of the amount by which Golf
Course Revenue for any Fiscal Year exceeds the Baseline Golf Course
Revenue; and
(ii) the Applicable Percentage of the amount by which Other
Revenue for any Fiscal Year exceeds the Baseline Other Revenue
exceeds (b) the Base Rent Escalation for such Fiscal Year.
(See Section 3.3 of the Detailed Lease Provisions.)
2. ADDRESS FOR PAYMENTS:
Landlord:
Presidio Golf Limited Partnership
_Arnold ▇▇▇▇▇▇ Golf Management
▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Presidio Main Post, ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(See Section 3.1 of the Detailed Lease Provisions.)
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3. ADDRESSES FOR NOTICES:
Tenant:
_Arnold ▇▇▇▇▇▇ Golf Management LLC
▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Presidio Main Post, ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:__________________________________
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Landlord:
Presidio Golf Limited Partnership
_Arnold ▇▇▇▇▇▇ Golf Management
▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Presidio Main Post, ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
FAX: (▇▇▇)▇▇▇-▇▇▇▇
(See Section 27.8 of the Detailed Lease Provisions.)
4. ANNUAL BASE RENT: Means, with respect to the Fiscal Year
commencing on the Commencement Date and ending on December 31st of such calendar
year (the "First Fiscal Year"), the Initial Base Rent. On January 1 of the
Fiscal Year following the First Fiscal Year, and on January 1 of each successive
Fiscal Year during the Term, the Annual Base Rent shall be equal to the lower of
(a) the Annual Base Rent applicable to the immediately preceding Fiscal Year
multiplied by 103% or (b) the sum of (i) the Annual Base Rent applicable to the
immediately preceding Fiscal Year plus (ii) the product of the Annual Base Rent
applicable to the immediately preceding Fiscal Year multiplied by 200% of the
annual percentage increase in the Consumer Price Index from January 1 of the
immediately preceding Fiscal Year.
5. APPLICABLE PERCENTAGE: Means 30% with respect to Golf
Course Revenue and 5% with respect to Other Revenue.
6. BASE RENT ESCALATION: Means, for any Fiscal Year, the
amount by which the Annual Base Rent for such Fiscal Year exceeds the Initial
Base Rent.
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7. BASELINE GOLF COURSE REVENUE: Means, for any Fiscal Year
during the Term, $____________.
8. BASELINE OTHER REVENUE: Means, for any Fiscal Year during the
Term, $____________.
9. COMMENCEMENT DATE: Means ____________________, 1998.
10. EXTENDED TERMS: Five (5) five-year terms (each, an "Extended
Term" and collectively, the "Extended Terms").
11. FACILITY: Means the Leased Property consisting of an 18-hole
golf course, clubhouse and related facilities located on the Land.
12. FISCAL YEAR: Means the 12-month period from January 1 through
December 31 of each year of the Term, or the applicable portions of the first
and last Fiscal Years.
13. INITIAL BASE RENT: Means $________________.
14. INITIAL TERM: 15 years commencing on the Commencement Date.
LIST OF EXHIBITS:
Exhibit A Defined Terms; Interpretation
Exhibit B Legal Description of the Land
Exhibit C Other Leased Property
Exhibit D Operating Standards
Exhibit E Standard Reporting Format
Exhibit F Base Rent Schedule
Exhibit G Baseline Revenue Schedule
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DETAILED LEASE PROVISIONS
ARTICLE 1
LEASED PROPERTY
Upon and subject to the terms and conditions set forth in this Lease,
Landlord leases to Tenant and Tenant rents from Landlord all of Landlord's
rights and interest in and to the following real property, improvements and
related rights (collectively the "Leased Property"):
(a the land described in Exhibit B attached hereto
(collectively, the "Land");
(b all buildings, structures, Fixtures and other
impovements of every kind including, but not limited to, alleyways and
connecting tunnels, sidewalks, utility pipes, conduits and lines
(on-site and off-site), parking areas, roadways, cart paths, bridges,
lakes, irrigation systems, and course markers presently situated upon
the Land, but not including any Tenant Improvements (collectively, the
"Leased Improvements");
(c all easements, rights and appurtenances (including,
without limitation, all water rights) relating to the Land and the
Leased Improvements (collectively, the "Related Rights"); and
(d all personal property owned by Landlord and located on
the Land or in the Leased Improvements ("Landlord's Personal
Property").
ARTICLE 2
TERM
2.1 INITIAL TERM. The initial Term of this Lease shall commence on
the Commence ment Date.
2.2 EXTENDED TERMS. Landlord grants Tenant the right to extend the
Term of this Lease for the Extended Terms provided for in the Basic Lease
Provisions commencing upon the expiration of the Initial Term or the applicable
Extended Term. Tenant may exercise such right solely by giving written notice to
Landlord of such extension at least 270 days prior to the termination of the
then-current Term (time being of the essence). The exercise of such right shall
be valid only if at the time of the giving of such notice and at the time of the
commencement of the applicable Extended Term no Event of Default shall have
occurred and be continuing. During the Extended Term, all of the terms and
conditions of this Lease shall continue in full force and effect, as the same
may be amended, supplemented or modified.
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ARTICLE 3
RENT
3.1 RENT. Tenant will pay to Landlord in lawful money of the
United States of America the Base Rent and Additional Rent during the Term.
Payment of Base Rent and Additional Rent shall be paid at Landlord's address set
forth in the Basic Lease Provisions or at such other place or to such other
Person as Landlord from time to time may designate in writing. If any payment
owing hereunder shall otherwise be due on a day that is not a Business Day, such
payment shall be due on the next succeeding Business Day. Tenant's covenant to
pay Base Rent, Additional Rent and any other sums due under this Lease shall be
independent of all other covenants contained in this Lease.
3.2 BASE RENT. Tenant shall pay Base Rent to Landlord in advance
on the first day of each calendar month (which Base Rent shall, for accounting
purposes, consist of Annual Base Rent accruing during the respective Fiscal Year
in equal monthly installments, but which Base Rent shall be payable for each
month in the respective proportions described in Exhibit F); provided, however,
that the first monthly installment shall be payable on the Commencement Date and
the first and last month's payments shall be prorated as to any partial month.
3.3 ADDITIONAL RENT. In addition to the Base Rent, Tenant shall
pay to Landlord Additional Rent in quarterly installments as provided in Section
3.3.1.
3.3.1 QUARTERLY CALCULATION AND PAYMENT OF ADDITIONAL RENT.
Tenant shall calculate and pay Additional Rent for each Fiscal Quarter.
The amount of the Additional Rent for the Second, Third and Fourth
Fiscal Quarters shall account for any interim reconciliations made with
respect to prior Fiscal Quarters in such Fiscal Year as certified by
Tenant to Landlord as provided by this Section 3.3.1, but subject to a
final reconciliation as provided by Section 3.3.2. Within thirty (30)
days after the end of each Fiscal Quarter, Tenant shall deliver to
Landlord an Officer's Certificate setting forth the calculation of
Additional Rent for such Fiscal Quarter. If the Additional Rent for the
period beginning on the first day
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of the current Fiscal Year and ending on the last day of the Fiscal
Quarter just ended exceeds the sum of quarterly payments on account
thereof previously made by Tenant, Tenant shall pay such deficiency to
Landlord along with the Officer's Certificate. If the Additional Rent
for the period beginning on the first day of the current Fiscal Year
and ending on the last day of the Fiscal Quarter just ended is less
than the sum of quarterly payments on account thereof previously made
by Tenant, Tenant shall be entitled to deduct from its next Additional
Rent payment(s) an amount equal to such difference. In calculating
Additional Rent for any Fiscal Quarter, the Golf Course Revenue or
Other Revenue, as the case may be, for the period beginning on the
first day of the current Fiscal Year and ending on the last day of such
Fiscal Quarter shall be compared to the Baseline Golf Course Revenue or
Baseline Other Revenue for the same period as scheduled on Exhibit G
attached hereto (which Exhibit G baseline period calculation shall be
prorated based upon the actual number of days in any partial Fiscal
Quarter occurring at the beginning or end of the Term).
3.3.2 ANNUAL RECONCILIATION. Within 60 days after the end
of each Fiscal Year, or after the expiration or termination of this
Lease, Tenant shall deliver to Landlord an Officer's Certificate
setting forth (i) the Golf Course Revenue and the Other Revenue for the
Fiscal Year just ended, and (ii) a comparison of the amount of
Additional Rent actually paid during such Fiscal Year versus the amount
of Additional Rent actually owing on the basis of the annual
calculation of the Golf Course Revenue and the Other Revenue. If the
Additional Rent for such Fiscal Year exceeds the sum of the quarterly
payments previously paid by Tenant on account thereof, Tenant shall pay
such deficiency to Landlord along with such Officer's Certificate. If
the Additional Rent for such Fiscal Year is less than the amount
previously paid by Tenant on account thereof, Landlord shall, at
Landlord's option, either (i) remit to Tenant its check in an amount
equal to such difference, or (ii) grant Tenant a credit against the
payment of Additional Rent next coming due; provided, however, that if
the amount of Additional Rent due for the next Fiscal Quarter is
insufficient to exhaust such credit, Landlord shall remit to Tenant its
check in the amount of any remaining excess. The amount of the
reconciliation payment, whether in favor of Landlord or Tenant, shall
bear interest at a rate equal to the rate payable on 90- day U.S.
Treasury Bills as of January 1 of the year following the close of such
Fiscal Year until the amount of such difference shall be paid or
otherwise discharged.
3.3.3 RECORD-KEEPING. Tenant shall utilize an accounting
system for the Leased Property in accordance with its usual and
customary practices and in accordance with accrual basis accounting
principles applied on a basis consistent with the Other Leased Property
which will accurately record all Golf Course Revenue and Other Revenue.
Tenant shall retain reasonably adequate records for each Fiscal Year
conforming to such accounting system until at least five years after
the expiration of such Fiscal Year (and in any event until the
reconciliation described in Section 3.3.2 above for such Fiscal Year
has been made).
3.3.4 AUDITS. Landlord, at its own expense except as
provided hereinbelow, shall have the right from time to time directly
or through its accountants to audit the information set forth in the
Officer's Certificate referred to in Section 3.3.2 and in connection
with such audits to examine Tenant's books and records with respect
thereto (including supporting data, sales tax returns and Tenant's work
papers); provided, however, that any audit of the information contained
in an Officer's Certificate referred to in Section 3.3.2 must be
conducted, and the results thereof delivered to Tenant, on or before
one (1) year
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after delivery to Landlord of such Officer's Certificate. At the end of
such one (1) year period, the information contained in the Officer's
Certificate shall be final and binding upon Landlord and Tenant, except
with respect to any amount therein which Landlord has challenged in
writing delivered to Tenant on or before expiration of such one (1)
year period and except that in the event that any audit by Landlord
discloses that Tenant has understated any revenue item by more than
Fifty Thousand and no/100 Dollars ($50,000.00) and such understatement
results in Golf Course Revenue and Other Revenue, collectively, being
understated by more than five percent (5%) of the actual amount
thereof, then Landlord shall have the right to audit all prior years'
information which has not theretofore been audited by Landlord. If any
such audit discloses a deficiency in the payment of Additional Rent,
Tenant shall forthwith pay to Landlord the amount of the deficiency, as
finally agreed or determined, together with interest at the Overdue
Rate from the date when said payment should have been made to the date
of payment thereof; provided, however, that as to any audit that is
commenced more than 12 months after the date Golf Course Revenue or
Other Revenue for any Fiscal Year is reported by Tenant to Landlord
(i.e., to the extent permitted above), the deficiency, if any, with
respect to such Golf Course Revenue or Other Revenue shall bear
interest as permitted herein only from the date such determination of
deficiency is made unless such deficiency is the result of gross
negligence or willful misconduct on the part of Tenant. If any such
audit discloses that the Golf Course Revenue or Other Revenue for any
Fiscal Year exceeds the Golf Course Revenue or Other Revenue reported
by Tenant by more than five percent (5%), Tenant shall pay the
reasonable cost of such audit and examination. Tenant shall maintain,
throughout the term of this Lease, all books and records relating to
Golf Course Revenue and Other Revenue received during such term.
3.4 ADDITIONAL CHARGES. In addition to the Base Rent and
Additional Rent (1) Tenant shall also pay and discharge when due and payable all
other amounts, liabilities, obligations and Impositions which Tenant assumes or
agrees to pay under this Lease, and (2) in the event of any failure on the part
of Tenant to pay any of those items referred to in clause (1) above, Tenant
shall also pay and discharge every fine, penalty, interest and cost which may be
added for non-payment or late payment of such items (the items referred to in
clauses (1) and (2) above being referred to herein collectively as the
"Additional Charges"). Except as otherwise provided in this Lease or as
otherwise required by any third party entitled to receipt of Additional Charges,
all Additional Charges shall be due and payable thirty (30) days after either
Landlord or the applicable third party who may be billing Tenant therefor shall
deliver an invoice to Tenant therefor. To the extent that Tenant pays any
Additional Charges to Landlord pursuant to any requirements of this Lease, which
charges are due and payable to a third party, Landlord shall pay such charges to
such third party and, in any event, Tenant shall be relieved of its obligation
to pay such Additional Charges to the entity to which they would otherwise be
due. Alternatively, with respect to Additional Charges payable to a third party,
Tenant may pay such charges directly to such third party and thereby be relieved
of any obligation to pay such charges to Landlord.
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3.5 LATE PAYMENT OF RENT. Tenant hereby acknowledges that late
payment by Tenant to Landlord of Base Rent, Additional Rent or Additional
Charges will cause Landlord to incur costs not contemplated under the terms of
this Lease, the exact amount of which is presently anticipated to be extremely
difficult to ascertain. Such costs may include processing and accounting charges
and late charges which may be imposed on Landlord by the terms of any mortgage
or deed of trust covering the Leased Property and other expenses of a similar or
dissimilar nature. Accordingly, if any installment or payment of Base Rent,
Additional Rent or Additional Charges (but only as to those Additional Charges
which are payable directly to Landlord) shall not be paid or made within five
(5) Business Days after its due date, Tenant will pay Landlord on demand, as
Additional Charges, a late charge equal to three percent (3%) of such
installment or payment; provided, however, that if such payment or installment
is not paid or made within ten (10) Business Days after its due date, the late
charge shall be five percent (5%) of such installment or payment. The parties
agree that this late charge represents a fair and reasonable estimate of the
costs that Landlord will incur by reason of late payment by Tenant. In addition
to said late charge, if any installment or payment of Base Rent, Additional Rent
or Additional Charges (but only as to those Additional Charges which are payable
directly to Landlord) shall not be paid on, or made by, its due date, the amount
unpaid shall bear interest, from the date such installment or payment was due
until the date of payment thereof, computed at the Overdue Rate on the amount of
such delinquent installment or payment , and Tenant will pay such interest to
Landlord on demand, as Additional Charges. The payment of such late charge or
such interest, or both (as the case may be), shall not constitute a waiver, nor
excuse or cure, of any default under this Lease, nor prevent Landlord from
exercising any other rights and remedies available to Landlord.
3.6 NET LEASE. The Base Rent, Additional Rent and Additional
Charges shall be paid absolutely net to Landlord and without notice or demand
and without set-off, counterclaim, recoupment, abatement, suspension, determent,
deduction or defense, so that this Lease shall yield to Landlord the full amount
of the installments of Base Rent, Additional Rent and, subject to Section 3.4
above, Additional Charges throughout the Term.
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ARTICLE 4
IMPOSITIONS
4.1 PAYMENT OF IMPOSITIONS. Subject to the terms of Article 22
hereof, Tenant will pay, or cause to be paid, all Impositions before any fine,
penalty, interest or cost may be added for non-payment, such payments to be made
directly to the taxing authorities where feasible. All payments of Impositions
shall be subject to Tenant's right of contest pursuant to the provisions of
Article 12. Without limitation of the foregoing, no later than fifteen (15) days
prior to the due date of any Impositions, Tenant shall furnish to Landlord
copies of the ▇▇▇▇(s) or invoices(s) for such Impositions and copies of Tenant's
check or other evidence of payment, and as soon as reasonably available after
the payment of said Impositions, Tenant shall promptly furnish to Landlord
copies of official receipts, if available, or other satisfactory third party
evidence of such payments, such as canceled checks.
4.2 INFORMATION AND REPORTING. Landlord shall give prompt notice
to Tenant of all Impositions payable by Tenant hereunder of which Landlord at
any time has knowledge, but Landlord's failure to give any such notice shall in
no way diminish Tenant's obligations hereunder to pay such Impositions. Landlord
and Tenant shall, upon request of the other, provide such data as is maintained
by the party to whom the request is made with respect to the Leased Property as
may be necessary to prepare any required returns and reports. In the event any
applicable governmental authorities classify any property covered by this Lease
as personal property, Tenant shall file all personal property tax returns in
such jurisdictions where it must legally so file. Each party, to the extent it
possesses the same, will provide the other party, upon request, with cost and
depreciation records necessary for filing returns for any property so classified
as personal property.
4.3 ASSESSMENT CHALLENGES. In addition to Tenant's rights under
Article 12, Tenant may, upon notice to Landlord and otherwise in compliance
with Article 12, at Tenant's option and at Tenant's sole cost and expense,
protest, appeal, or institute such other proceedings as Tenant may deem
appropriate to effect a reduction of real estate or personal property
assessments and Landlord, at Tenant's expense as aforesaid, shall reasonably
cooperate with Tenant in such protest, appeal, or other action.
4.4 PRORATIONS. Impositions imposed in respect of the tax-fiscal
period during which the Term terminates shall be adjusted and prorated between
Landlord and Tenant, whether or not such Imposition is imposed before or after
such termination, and Tenant's obligation to pay its prorated share thereof
shall survive such termination. If any Imposition may, at the option of the
taxpayer, lawfully be paid in installments (whether or not interest shall accrue
on the unpaid balance of such Imposition), Tenant may elect to pay in
installments, in which event Tenant shall pay all installments (and any accrued
interest on the unpaid balance of the Imposition) that are due
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during the Term hereof before any fine, penalty, premium, further interest or
cost may be added thereto.
4.5 REFUNDS. If any refund shall be due from any taxing authority
in respect of any Imposition paid by Tenant, the same shall be paid over to or
retained by Tenant if no Event of Default shall have occurred hereunder and be
continuing. Any such funds retained by Landlord due to an Event of Default shall
be applied as provided in Article 16.
4.6 UTILITY CHARGES. Tenant shall pay or cause to be paid prior to
delinquency charges for all utilities and services, including, without
limitation, electricity, telephone, trash disposal, gas, oil, water, sewer,
communication and all other utilities used in the Leased Property during the
Term.
4.7 ASSESSMENT DISTRICTS. Landlord shall not voluntarily consent
to or agree in writing to (i) any special assessment or (ii) the inclusion of
any material portion of the Leased Property into a special assessment district
or other taxing jurisdiction unless Tenant shall have consented thereto, which
consent shall not be unreasonably withheld.
ARTICLE 5
TENANT WAIVERS
5.1 NO TERMINATION, ABATEMENT, ETC.. Except as otherwise
specifically provided in this Lease, and except for those causes resulting
solely from the gross negligence or willful misconduct of Landlord, (i) Tenant,
to the extent permitted by law, shall remain bound by this Lease in accordance
with its terms and shall neither take any action without the consent of Landlord
to modify, surrender or terminate the same, nor be entitled to any abatement,
deduction, deferment or reduction of Rent, or set-off against the Rent by reason
of, and (ii) the respective obligations of Landlord and Tenant shall not be
otherwise affected by reason of:
(a) any damage to, or destruction of, any Leased Property
or any portion thereof from whatever cause or any taking of the Leased
Property or any portion thereof;
(b) the lawful or unlawful prohibition of, or restriction
upon, Tenant's use of the Leased Property, or any portion thereof, the
interference with such use by any Person, or by reason of eviction by
paramount title;
(c) any claim which Tenant has or might have against
Landlord or by reason of any default or breach of any warranty by
Landlord under this Lease or any other agreement between Landlord and
Tenant, or to which Landlord and Tenant are parties;
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(d) any bankruptcy, insolvency, reorganization,
composition, readjustment, liquidation, dissolution, winding up or
other proceedings affecting Landlord or any assignee or transferee of
Landlord; or
(e) for any other cause whether similar or dissimilar to
any of the foregoing other than a discharge of Tenant from any such
obligation as a matter of law.
Tenant hereby specifically waives all rights, arising from any occurrence
whatsoever, which may now or hereafter be conferred upon it by law (i) to
modify, surrender or terminate this Lease or quit or surrender the Leased
Property or any portion thereof, or (ii) to entitle Tenant to any abatement,
reduction, suspension or deferment of the Rent or other sums payable by Tenant
hereunder, except as otherwise specifically provided in this Lease. The
obligations of Landlord and Tenant hereunder shall be separate and independent
covenants and agreements and the Rent and all other sums payable by Tenant
hereunder shall continue to be payable in all events unless the obligations to
pay the same shall be terminated pursuant to the express provisions of this
Lease or by termination of this Lease other than by reason of any Event of
Default.
5.2 CONDITION OF THE LEASED PROPERTY. Tenant acknowledges receipt
and delivery of possession of the Leased Property and that Tenant has examined
and otherwise has knowledge of the condition of the Leased Property prior to the
execution and delivery of this Lease and has found the same to be in good order
and repair and satisfactory for its purposes hereunder. Regardless of any
inspection made by Tenant of the Leased Property and whether or not any patent
or latent defect or condition was revealed or discovered thereby, Tenant is
leasing the Leased Property "as is" in its present condition. Tenant waives and
releases any claim or action against Landlord in respect of the condition of the
Leased Property including any defects or adverse conditions, latent or patent,
matured or unmatured, known or unknown by Tenant or Landlord as of the date
hereof. TENANT ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING AS LANDLORD HEREUNDER
OR IN ANY OTHER CAPACITY) HAS NOT MADE AND WILL NOT MAKE, NOR SHALL LANDLORD BE
DEEMED TO HAVE MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH
RESPECT TO THE LEASED PROPERTY, INCLUDING ANY WARRANTY OR REPRESENTATION AS TO
(i) ITS FITNESS, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE, (ii) THE
QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, (iii) THE EXISTENCE OF ANY
DEFECT, LATENT OR PATENT, (iv) LANDLORD'S TITLE THERETO, (v) VALUE, (vi)
COMPLIANCE WITH SPECIFICATIONS, (vii) LOCATION, (viii) USE, (ix) CONDITION, (x)
MERCHANTABILITY, (xi) QUALITY, (xii) DESCRIPTION, (xiii) DURABILITY, (xiv)
OPERATION, (xv) THE EXISTENCE OF ANY HAZARDOUS MATERIAL OR (xvi) COMPLIANCE OF
THE LEASED PROPERTY WITH ANY LAW (INCLUDING ENVIRONMENTAL LAWS) OR LEGAL
REQUIREMENTS. TENANT ACKNOWLEDGES THAT THE LEASED PROPERTY IS OF ITS SELECTION
AND TO ITS SPECIFICATIONS AND THAT THE LEASED PROPERTY HAS BEEN INSPECTED BY
TENANT AND IS SATISFACTORY TO IT. IN THE EVENT OF ANY DEFECT OR
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DEFICIENCY IN THE LEASED PROPERTY OF ANY NATURE, WHETHER LATENT OR PATENT, AS
BETWEEN LANDLORD AND TENANT, LANDLORD SHALL NOT HAVE ANY RESPONSIBILITY OR
LIABILITY WITH RESPECT THERETO OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES
(INCLUDING STRICT LIABILITY IN TORT). THE PROVISIONS OF THIS SECTION 5.2 HAVE
BEEN NEGOTIATED, AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY
WARRANTIES BY LANDLORD, EXPRESS OR IMPLIED, WITH RESPECT TO THE LEASED PROPERTY,
ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW OR
HEREAFTER IN EFFECT OR ARISING OTHERWISE.
ARTICLE 6
OWNERSHIP OF PROPERTY
6.1 LEASED PROPERTY. Tenant acknowledges that the Leased Property
is the property of Landlord, that Landlord is the paramount owner of the Leased
Property and that Tenant has only the right to the possession and use of the
Leased Property during the Term of and upon the terms and conditions of this
Lease.
6.2 LANDLORD'S PERSONAL PROPERTY. Tenant shall maintain Landlord's
Personal Property in the same manner as Tenant maintains Tenant's Personal
Property. Upon the loss, destruction, or obsolescence of any of the Landlord's
Personal Property, Tenant shall replace such property with Tenant's Personal
Property, which Personal Property shall be owned by Tenant; provided, however,
that in the case of loss or destruction to any of Landlord's Personal Property,
if insurance proceeds are available, Tenant shall use such proceeds to replace
such Personal Property, and the replacement Personal Property shall be owned by
Landlord and shall constitute Landlord's Personal Property hereunder.
6.3 TENANT'S PERSONAL PROPERTY. Tenant may (and shall as provided
below), at its expense, install, affix or assemble or place on any parcel of the
Land or in any of the Leased Improvements, any items of Tenant's Personal
Property. Tenant shall provide and maintain during the entire Term all such
Tenant's Personal Property as shall be necessary in order to operate the
Facility in compliance with all applicable Legal Requirements and Insurance
Requirements and otherwise in accordance with customary practice in the industry
for the Primary Intended Use and in accordance with its past practices.
6.4 PURCHASE OF TENANT'S PERSONAL PROPERTY. Upon the expiration or
sooner termination of this Lease, Landlord shall have the right (but not the
obligation) to purchase from Tenant all or any portion of the tangible Tenant's
Personal Property (which shall not include software):
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(i) if owned by Tenant and not subject to any secured
financing, at the fair market value thereof;
(ii) if owned by Tenant, but subject to a secured
financing, at the greater of the fair market value thereof or the
amount of the debt owing under such financing; and
(iii) if leased by Tenant and the applicable lease provides
for termination of the lease as to such Tenant's Personal Property upon
the payment of a given sum, at the greater of the fair market value
thereof or the amount of the payment so provided; provided, however,
that at Tenant's option and if the lessor of Tenant's Personal Property
will permit Landlord to assume the obligations under the applicable
lease with respect to such Tenant's Personal Property (separate from
the obligations under a master lease if in effect), Tenant shall, upon
the request of Landlord, assign the applicable lease (or portion
thereof) to Landlord;
provided, further, however, that if Landlord's purchase right arises because of
a termination of this Lease as a result of an Event of Default, the fair market
value under clauses (i) through (iii) above shall be deemed to be the
depreciated net book value of Tenant's Personal Property. Landlord may elect to
purchase Tenant's Personal Property by giving notice to Tenant not later than,
as the case may be, 60 days prior to the expiration of this Lease or 60 days
after the termination of this Lease upon any Event of Default. Tenant shall
transfer title to such Property by a ▇▇▇▇ of sale without warranty (except as to
ownership) upon concurrent payment in cash by Landlord; provided, however, if
Landlord has any unpaid damages in an ascertainable amount resulting from any
Event of Default, Landlord may make payment by delivery of an offset against
such damages.
6.5 REMOVAL OF PERSONAL PROPERTY. All items of Tenant's Personal
Property not removed by Tenant within 14 days following the expiration or
earlier termination of this Lease shall be considered abandoned by Tenant and
may, at Landlord's discretion and without any obligation, be appropriated, sold,
destroyed or otherwise disposed of by Landlord without first giving notice
thereof to Tenant and without any payment to Tenant and without any obligation
to account therefor. Tenant shall, at its expense, restore the Leased Property
to the condition required by Section 9.1, including repair of all damage to the
Leased Property caused by the removal of Tenant's Personal Property, whether
affected by Tenant or Landlord. Landlord shall not be responsible for any loss
or damage to Tenant's Personal Property, or any other property of Tenant, by
virtue of Landlord's removal thereof at any time subsequent to the 14-day period
provided for herein.
6.6 LANDLORD'S WAIVERS. Any lessor of Tenant's Personal Property
or other party with a security interest therein may, upon notice to Landlord and
during reasonable hours, enter the Facility and take possession of any of
Tenant's Personal Property without liability for trespass
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or conversion. Landlord shall, upon the request of Tenant, execute and deliver
to Tenant "landlord's waivers" as may be reasonable and customary in connection
with the financing or leasing of personal property. Such "landlord's waiver"
shall limit to 30 days the amount of time the lessor or lender of Tenant's
Personal Property has to enter upon the Leased Property after notice from
Landlord that the Term has expired or otherwise terminated. If Tenant requests a
"landlord's waiver," Tenant shall attempt to secure from any financing source or
lessor the right on the part of Landlord to cure the defaults of Tenant and to
use any such Tenant's Personal Property upon providing such cure.
6.7 COLLATERAL AGREEMENTS. During the Term, Tenant shall have the
right and obligation to enter into agreements and service contracts on behalf of
the Facility which are necessary or reasonably required in connection with the
operation of the Leased Property for its Primary Intended Use including, without
limitation, membership agreements. Tenant (or its affiliate) has also entered
into various agreements and service contacts in connection with its operation of
the Facility prior to the Commencement Date. All such agreements and service
contracts, whether entered into prior to or during the Term and whether entered
into by Tenant or by ▇▇▇▇▇▇ Management (as defined in Article 30 below), are
hereinafter collectively referred to as the "Collateral Agreements." For good
and valuable consideration, the receipt of which is hereby acknowledged, and
subject to the terms and conditions hereinafter set forth, Tenant and ▇▇▇▇▇▇
Management hereby assign to Landlord all of Tenant's and ▇▇▇▇▇▇ Management's
right, title and interest in the Collateral Agreements; provided, however, that
Tenant and ▇▇▇▇▇▇ Management shall continue to have all rights under said
Collateral Agreements at all times during the Term hereof when an Event of
Default is not then existing hereunder (subject, however, to the terms set forth
below relative to restrictions with respect to membership agreements). Upon the
occurrence and during the continuance of an Event of Default (and in addition to
any other rights and remedies available to Landlord), and upon the expiration or
earlier termination of this Lease, Landlord shall have the right, but not the
obligation, by itself or by a designee, to take the place of Tenant or ▇▇▇▇▇▇
Management, as the case may be, under any or all of the Collateral Agreements,
to proceed to perform any and all obligations of the owner or operator contained
in any such Collateral Agreements and exercise any and all rights of the owner
or operator therein contained as fully as the Tenant or ▇▇▇▇▇▇ Management itself
could, and to take possession of all documents reasonably required by Landlord
to exercise its rights and perform its obligations under the Collateral
Agreements. Tenant and ▇▇▇▇▇▇ Management each hereby appoints Landlord its
attorney-in-fact to take such action and execute such documents as are necessary
or deemed appropriate by Landlord to effectuate the transfer of Tenant's or
▇▇▇▇▇▇ Management's, as the case may be, right, title and interest in those
Collateral Agreements which Landlord designates for such transfer. This power of
attorney granted hereby shall be irrevocable and coupled with an interest.
Tenant and ▇▇▇▇▇▇ Management each acknowledges that the foregoing assignment of
Collateral Agreements described above is an integral part of Landlord's
consideration for entering into this Lease and that neither Tenant nor ▇▇▇▇▇▇
Management shall be entitled to any additional consideration relative to such
assignment. Tenant and ▇▇▇▇▇▇ Management hereby each
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represents that, with the exception of consents of equipment lessors, it has the
full right and authority to assign the Collateral Agreements as described in
this Section 6.7, and no consent to such assignment is required from any other
party which has not been obtained prior to the date hereof.
With respect to membership agreements included as part of the foregoing
Collateral Agreements, Tenant shall have the right to determine all matters
relating to the sale and classification of memberships, including the right to
set initiation fees, dues and other charges, and the number of memberships sold;
provided that Tenant agrees not to exercise such right in a manner which would
be detrimental to Landlord in any material respect upon the expiration of the
Lease.
ARTICLE 7
USE OF LEASED PROPERTY
7.1 USE. After the Commencement Date and during the Term, Tenant
shall use or cause to be used the Leased Property and the improvements thereon
for its Primary Intended Use and for such other uses as may be necessary or
incidental to such use. Tenant shall not use the Leased Property or any portion
thereof for any other use without the prior written consent of Landlord, which
consent may be withheld in Landlord's sole discretion. No use shall be made or
permitted to be made of the Leased Property, and no acts shall be done, which
will cause the cancellation of any insurance policy covering the Leased Property
or any part thereof, nor shall Tenant sell or otherwise provide to patrons, or
permit to be kept, used or sold in or about the Leased Property any article
which may be prohibited by law or by the standard form of fire insurance
policies, or any other insurance policies required to be carried hereunder, or
fire underwriters regulations. Tenant shall, at its sole cost, comply with all
of the requirements pertaining to the Leased Property or other improvements of
any insurance board, association, organization or company necessary for the
maintenance of insurance, as herein provided, covering the Leased Property and
Tenant's Personal Property.
7.2 SPECIFIC PROHIBITED USES. Tenant shall not use or occupy or
permit the Leased Property to be used or occupied, nor do or permit anything to
be done in or on the Leased Property, in a manner which would (i) violate or
fail to comply with any law, rule or regulation or Legal Requirement, (ii) cause
structural injury to any of the Leased Improvements, or (iii) constitute a
public or private nuisance or waste. Tenant shall not allow any Hazardous
Material to be located in, on or under the Leased Property, to migrate from the
Leased Property to any adjacent property, or to be incorporated in the Facility
or any improvements thereon, except in compliance with applicable law (including
any Environmental Law). Tenant shall not allow the Leased Property to be used as
a landfill or a waste disposal site, or a manufacturing, distribution or
disposal facility for any Hazardous Materials. Tenant shall neither suffer nor
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permit the Leased Property or any portion thereof, including Tenant's Personal
Property, to be used in such a manner as (i) might reasonably tend to impair
Landlord's title thereto or to any portion thereof, or (ii) may reasonably make
possible a claim or claims of adverse usage or adverse possession by the public,
as such, or of implied dedication of the Leased Property or any portion thereof,
or (iii) is in violation of any applicable Environmental Law. Tenant shall own
and use Tenant's Personal Property in material compliance with all Legal
Requirements.
7.3 LANDLORD TO GRANT EASEMENTS, ETC.. Landlord shall, from time
to time so long as no Event of Default has occurred and is continuing, at the
request of Tenant and at Tenant's cost and expense (but subject to the approval
of Landlord, which approval shall not be unreasonably withheld or delayed and
which approval shall not be deemed unreasonably withheld or delayed if Landlord
must obtain a Facility Mortgagee's consent and if such Facility Mortgagee elects
not to consent): (i) grant easements and other rights in the nature of
easements; (ii) release existing easements or other rights in the nature of
easements which are for the benefit of the Leased Property; (iii) dedicate or
transfer unimproved portions of the Leased Property for road, highway or other
public purposes; (iv) execute petitions to have the Leased Property annexed to
any municipal corporation or utility district; (v) execute amendments to any
covenants and restrictions affecting the Leased Property; and (vi) execute and
deliver to any Person any instrument appropriate to confirm or effect such
grants, releases, dedications and transfers (to the extent of its interest in
the Leased Property), but only upon delivery to Landlord of an Officer's
Certificate (which Certificate, if contested by Landlord, shall not be binding
on Landlord) stating that such grant, release, dedication, transfer, petition or
amendment is not detrimental to the proper conduct of the business of Tenant on
the Leased Property and does not reduce its value or usefulness for the Primary
Intended Use and describing in reasonable detail the nature of such proposed
grant, release, dedication, transfer, petition or amendment. Landlord shall not
grant, release, dedicate or execute any of the foregoing items in this Section
7.3 without obtaining Tenant's approval, which approval shall not be
unreasonably withheld or delayed.
ARTICLE 8
HAZARDOUS MATERIALS
8.1 TENANT REPRESENTATIONS. Tenant hereby represents and warrants
to Landlord as follows:
8.1.1 REPORTS. All material reports of environmental
surveys, audits, investigations and assessments relating to the Leased
Property in the possession or control of Tenant or its Affiliates
(herein, the "Existing Environmental Reports") have been disclosed to
Landlord.
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8.2 REMEDIATION. If any Hazardous Material in a quantity
sufficient to require remediation or reporting under any Environmental Law is
released, or disposed of, in, on or under the Leased Property at any time during
the Term hereof or was released, or disposed of, in, on or under the Leased
Property at any time prior to the Commencement Date (i.e., irrespective of
whether the same occurred during Tenant's or Tenant's affiliate's ownership or
possession of the Leased Property), or if Tenant, Landlord, or the Leased
Property becomes subject to any order of any federal, state or local agency to
investigate, remove, remediate, repair, close, detoxify, decontaminate or
otherwise clean up the Leased Property as a result of any release or disposal
in, on or under the Leased Property occurring at any time during the Term hereof
or prior to the Commencement Date (i.e., irrespective of whether the same
occurred during Tenant's or Tenant's affiliate's ownership or possession of the
Leased Property), Tenant shall, at its sole expense, carry out and complete any
required investigation, removal, remediation, repair, closure, detoxification,
decontamination or other cleanup of the Leased Property in material compliance
with all applicable Environmental Laws; provided, however, that Tenant shall
have no responsibility for any investigation, removal, remediation, repair,
closure, detoxification, decontamination or other cleanup of the Leased Property
necessitated by actions of Landlord. Subject to Tenant's rights to contest
pursuant to Article 12 hereof, if Tenant fails to implement and diligently
pursue any such repair, closure, detoxification, decontamination or other
cleanup of the Leased Property in a timely manner and in material compliance
with all applicable Environmental Laws, Landlord shall have the right, but not
the obligation, to carry out such action and to recover all of the reasonable
costs and expenses from Tenant as Additional Charges.
8.3 TENANT'S INDEMNIFICATION OF LANDLORD AND OTHERS. Except for
matters arising out of the actions of Landlord, Tenant shall pay, protect,
indemnify, save, hold harmless and defend Landlord and any Facility Mortgagee
from and against all liabilities, obligations, claims, damages (including
consequential and punitive damages), penalties, causes of action, demands,
judgments, costs and expenses (including reasonable attorneys' fees and
expenses), to the extent permitted by law, imposed upon or incurred by or
asserted against Landlord, any Facility Mortgagee or the Leased Property by
reason of any Hazardous Material released or disposed of at, in or by the Leased
Property either during the Term or prior to the Commencement Date in violation
of any Environmental Law, howsoever arising, without regard to fault on the part
of Tenant, including (a) liability for response costs and for costs of removal
and remedial action incurred by the United States Government, any state or local
governmental unit to any other Person, or damages from injury to or destruction
or loss of natural resources, including the reasonable costs of assessing such
injury, destruction or loss, incurred pursuant to any Environmental Law, (b)
liability for costs and expenses of abatement, investigation, removal,
remediation, correction or clean-up, fines, damages, response costs or penalties
which arise from the provisions of any Environmental Law, (c) liability for
personal injury or property damage arising under any statutory or common-law
tort theory, including damages assessed for the maintenance of a public or
private nuisance or for carrying on of a dangerous activity, or (d) by reason of
a breach of a representation or warranty in Section 8.1.
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8.4 SURVIVAL OF INDEMNIFICATION OBLIGATIONS. Tenant's remediation
and indemnification obligations and liabilities under this Article 8 arising
during the Term hereof shall survive any termination of this Lease for a period
of one (1) year (i.e., meaning that Landlord must give notice to Tenant of such
claim prior to the expiration of said 1-year period).
ARTICLE 9
MAINTENANCE AND REPAIR
9.1 TENANT'S SOLE OBLIGATION - GENERAL. Tenant, at its expense,
will keep the Leased Property and Tenant's Personal Property in good order,
repair and appearance (whether or not the need for such repairs occurs as a
result of Tenant's use, any prior use, the elements or the age of the Leased
Property, or any portion thereof) and maintain the Leased Property in accordance
with any applicable Legal Requirements, and, except as otherwise provided in
Article 14, with reasonable promptness, make all necessary and appropriate
repairs thereto of every kind and nature, whether interior or exterior,
structural or non-structural, ordinary or extraordinary, foreseen or unforeseen
or arising by reason of a condition existing prior to the commencement of the
Term of this Lease (concealed or otherwise). Tenant shall operate and maintain
the Leased Property in accordance with the Operating Standards set forth in
Exhibit D; provided, however, that Tenant may make such modifications to such
Operating Standards as Tenant may reasonably determine to be appropriate for the
prudent management of the Leased Property so long as the maintenance and
operation of the Leased Property shall be in a first class condition, which
modifications, to the extent they are material to the operating results of the
Leased Property, shall be subject to the approval of Landlord (not to be
unreasonably withheld or delayed); provided further, however, that Tenant shall
make such changes to the Operating Standards as may be appropriate to comply
with Legal Requirements. Tenant will not take or omit to take any action the
taking or omission of which could reasonably be expected to impair the value or
the usefulness of the Leased Property or any part thereof for its Primary
Intended Use. Nothing in this Article 9 shall obligate Tenant to make any
capital improvement or replacements to the Leased Property if the Leased
Property can be repaired to the standard required by this Section 9.1.
9.2 CLUBHOUSE FACILITY MAINTENANCE. Tenant, at its expense, will
repair, paint and keep in a clean and sanitary condition the interior and
exterior of all clubhouse facilities at the Leased Improvements, including all
landscaping and parking areas located adjacent thereto, all in a first-class
condition and in accordance with such other reasonable standards as may be
established by Landlord from time to time. Without limitation of the foregoing,
Tenant, at its expense, will replace or refurbish all floor covering, tile,
carpeting, wall coverings, light fixtures, curtains, blinds, shades, furniture,
room furnishings, wall paper, wall hangings, signs, fixtures and other decor
items when they become worn-out, soiled or in disrepair. All security systems,
ventilation, heating, air-conditioning, electrical, plumbing, refrigeration and
mechanical
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equipment shall be kept in good working order by Tenant at all times
during the Term hereof, and shall meet all reasonable quality standards
established from time to time by Landlord.
9.3 GOLF COURSE MAINTENANCE. Tenant, at its expense, will replace,
repair and maintain the golf course portion of the Leased Property in a
first-class condition and otherwise in accordance with reasonable standards
established from time to time by Landlord. Without limitation of the foregoing,
Tenant will, at its expense, replace or refurbish all tee box signs, pins,
flags, markers, benches and related golf course equipment as the same becomes
worn-out, soiled or in disrepair. All grounds-keeping and landscaping for the
golf course will be maintained in a first-class condition by Tenant and
otherwise in accordance with reasonable standards established by Landlord from
time to time during the Term hereof.
9.4 WAIVER OF STATUTORY OBLIGATIONS. Landlord shall not under any
circumstances be required to build or rebuild any improvements on the Leased
Property, or to make any repairs, replacements, alterations, restorations or
renewals of any nature or description to the Leased Property, whether ordinary
or extraordinary, structural or non-structural, foreseen or unforeseen, or to
make any expenditure whatsoever with respect thereto, in connection with this
Lease, or to maintain the Leased Property in any way. Tenant hereby waives, to
the extent permitted by law, the right to make repairs at the expense of
Landlord pursuant to any law in effect at the time of the execution of this
Lease or hereafter enacted.
9.5 MECHANIC'S LIENS. Nothing contained in this Lease and no
action or inaction by Landlord shall be construed as (i) constituting the
consent or request of Landlord, expressed or implied, to any contractor,
subcontractor, laborer, materialman or vendor to or for the performance of any
labor or services or the furnishing of any materials or other property for the
construction, alteration, addition, repair or demolition of or to the Leased
Property or any part thereof; or (ii) giving Tenant any right, power or
permission to contract for or permit the performance of any labor or services or
the furnishing of any materials or other property, in either case, in such
fashion as would permit the making of any claim against Landlord in respect
thereof or to make any agreement that may create, or in any way be the basis
for, any right, title, interest, lien, claim or other encumbrance upon the
estate of Landlord in the Leased Property, or any portion thereof (it being
acknowledged and agreed that Tenant has no authority or power to cause any lien
or encumbrance of any kind whatsoever to attach or be placed upon Landlord's
interest in the Leased Property, and any and all liens and encumbrances created
or permitted by Tenant shall attach to Tenant's leasehold interest only).
9.6 SURRENDER OF LEASED PROPERTY. Unless this Lease shall have
been terminated pursuant to the provisions of Article 14, Tenant shall, upon the
expiration or prior termination of the Term, vacate and surrender the Leased
Property to Landlord in the condition in which the Leased Property was
originally received from Landlord, except as repaired, rebuilt, restored,
altered or added to as permitted or required by the provisions of this Lease and
except for ordinary
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wear and tear (subject to the obligation of Tenant to maintain the Leased
Property in good order and repair during the entire Term of this Lease).
9.7 TRANSFER OF OPERATING PERMITS. Upon the expiration or earlier
termination of the Term, Tenant and ▇▇▇▇▇▇ Management shall each assign to
Landlord all of each such respective party's right, title and interest in and to
any and all licenses, permits and other authorizations or approvals which then
exist relative to the operation of the Leased Property, and Tenant and ▇▇▇▇▇▇
Management shall cooperate with Landlord to effectuate such transfers,
including, without limitation, executing and delivering any petitions,
applications or other documentation required by applicable governmental
authorities in connection with such transfers.
ARTICLE 10
TENANT'S IMPROVEMENTS
10.1 TENANT'S RIGHT TO CONSTRUCT. During the Term of this Lease,
Tenant may not make any material alterations, additions, changes and/or other
capital improvements to the Leased Property (individually, a "Tenant
Improvement," and collectively, "Tenant Improvements") without the prior written
consent of Landlord, which consent shall not be unreasonably withheld or delayed
and which consent shall not be deemed unreasonably withheld or delayed if
Landlord must obtain any Facility Mortgagee's consent and if such Facility
Mortgagee elects not to consent. As used in this Section 10.1, "material" shall
mean a Tenant Improvement the cost of which is estimated to exceed Fifty
Thousand Dollars ($50,000.00) in any one instance. Except as otherwise agreed to
by Landlord in writing, any such Tenant Improvement shall be made at Tenant's
sole expense and shall become the property of Landlord upon termination of this
Lease. Unless made on an emergency basis to prevent injury to Person or
property, Tenant will submit plans for any Tenant Improvement with a cost of
more than $50,000 to Landlord for Landlord's prior approval, such approval not
to be unreasonably withheld or delayed.
10.2 SCOPE OF RIGHT. To the extent Landlord has consented to any
Tenant Improve ment, and subject to Section 10.1 above, Tenant shall have the
right, at Tenant's cost and expense, to:
(a) seek any governmental approvals, including building
permits, licenses, conditional use permits and any certificate of need
that Tenant requires to construct any Tenant Improvement;
(b) demolish, remove or otherwise dispose of any of the
Tenant Improvements;
(c) erect upon the Leased Property such Tenant
Improvement as Tenant deems desirable;
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(d) make additions, alterations, changes and improvements
in any Tenant Im provement so erected;
(e) raze and demolish any Tenant Improvement together
with the right to salvage therefrom; and
(f) engage in any other lawful activities that Tenant
determines are necessary or desirable for the development of the Leased
Property in accordance with its Primary Intended Use;
it being understood and agreed, however, that Tenant shall not, in any event,
make any Tenant Improvement which would, in Landlord's reasonable judgment,
impair the value or Primary Intended Use of the Leased Property.
10.3 COOPERATION OF LANDLORD. To the extent Landlord has consented
to any Tenant Improvement, Landlord shall cooperate with Tenant and take such
actions, including the execution and delivery to Tenant of any applications or
other documents, reasonably requested by Tenant in order to obtain any
governmental approvals sought by Tenant to construct such Tenant Improvement
within ten (10) Business Days following the later of (a) the date Landlord
receives Tenant's request, or (b) the date of delivery of any such application
or document to Landlord, so long as the taking of such action, including the
execution of said applications or documents, shall be without cost to Landlord
(or if there are costs to Landlord, such reasonable out-of-pocket costs shall be
reimbursed by Tenant), and will not cause Landlord to be in violation of any
law, ordinance or regulation.
10.4 COMMENCEMENT OF CONSTRUCTION. Tenant agrees that:
(a) Tenant shall diligently seek all governmental
approvals relating to the construction of any Tenant Improvement;
(b) Once Tenant begins the construction of any Tenant
Improvement, Tenant shall diligently prosecute any such construction to
completion in accordance with applicable insurance requirements and the
laws, rules and regulations of all governmental bodies or agencies
having jurisdiction over the Leased Property;
(c) Landlord shall have the right at any time and from
time to time to post and maintain upon the Leased Property such notices
as may be necessary to protect Landlord's interest from mechanics'
liens, materialmen's liens or liens of a similar nature;
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(d) Tenant shall not suffer or permit any mechanics'
liens or any other claims or demands arising from the work or
construction of any Tenant Improvement to be enforced against the
Leased Property or any part thereof, and Tenant agrees to hold Landlord
and said Leased Property free and harmless from all liability from any
such liens, claims or demands, together with all costs and expenses in
connection therewith; and
(e) All work shall be performed in a good and workmanlike
manner.
10.5 RIGHTS IN TENANT IMPROVEMENTS. Notwithstanding anything to the
contrary in this Lease, all Tenant Improvements constructed pursuant to Section
10.1, and any and all subsequent additions thereto and alterations and
replacements thereof, shall be the sole and absolute property of Tenant during
the Term of this Lease. Upon the expiration or early termination of this Lease,
all such Tenant Improvements shall become the property of Landlord. Without
limiting the generality of the foregoing, Tenant shall be entitled to all
federal and state income tax benefits associated with any Tenant Improvement
during the Term of this Lease.
ARTICLE 11
LIENS, ENCROACHMENTS AND OTHER TITLE MATTERS
11.1 LIENS. Subject to the provisions of Article 12 relating to
permitted contests, Tenant will not directly or indirectly create or allow to
remain, and will promptly discharge at its expense any lien, encumbrance,
attachment, title retention agreement or claim upon the Leased Property or any
attachment, levy, claim or encumbrance in respect of the rent, not including,
however:
(a) the matters, if any, that existed as of the
Commencement Date and that were disclosed on the Landlord's title
policy issued as of such date;
(b) restrictions, liens and other encumbrances which are
consented to in writing by Landlord, or any easements granted pursuant
to the provisions of Section 7.3 of this Lease;
(c) liens for franchise, income or other taxes of
Landlord which Tenant is not required to pay hereunder;
(d) subleases permitted by Article 24;
(e) liens for Impositions or for sums resulting from
noncompliance with Legal Requirements so long as (1) the same are not
yet payable or are payable without the addition of any fine or penalty
or (2) such liens are in the process of being contested as permitted by
Article 12;
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(f) liens of mechanics, laborers, materialmen, suppliers
or vendors for sums either disputed (provided that such liens are in
the process of being contested as permitted by Article 12) or not yet
due; and
(g) any liens which are the responsibility of Landlord
pursuant to the provisions of Article 26.
11.2 ENCROACHMENTS AND OTHER TITLE MATTERS. Except for any matters
disclosed on Landlord's title policy covering the Land issued as of the
Commencement Date and any matters granted or created by Landlord after the
Commencement Date, if any of the Leased Improvements shall, at any time,
encroach upon any property, street or right-of-way adjacent to the Leased
Property, or shall violate the agreements or conditions contained in any lawful
restrictive covenant or other agreement affecting the Leased Property, or any
part thereof, or shall impair the rights of others under any easement or
right-of-way to which the Leased Property is subject, or the use of the Leased
Property is impaired, limited or interfered with by reason of the exercise of
the right of surface entry or any other rights under a lease or reservation of
any oil, gas, water or other minerals, then promptly upon the request of
Landlord or at the behest of any Person affected by any such encroachment,
violation or impairment, Tenant, at its sole cost and expense (subject to its
right to contest the existence of any such encroachment, violation or
impairment), shall protect, indemnify, save harmless and defend Landlord and
each Facility Mortgagee from and against all losses, liabilities, obligations,
claims, damages, penalties, causes of action, costs and expenses (including
reasonable attorneys' fees and expenses) based on or arising by reason of any
such encroachment, violation or impairment and in such case, in the event of an
adverse final determination, either (i) obtain valid and effective waivers or
settlements of all claims, liabilities and damages resulting from each such
encroachment, violation or impairment, whether the same shall affect Landlord or
Tenant; or (ii) make such changes in the Leased Improvements, and take such
other actions, as Tenant in the good faith exercise of its judgment deems
reasonably practicable, to remove such encroachment, and to end such violation
or impairment, including, if necessary, the alteration of any of the Leased
Improvements, and in any event take all such actions as may be necessary in
order to be able to continue the operation of the Leased Improvements for the
Primary Intended Use substantially in the manner and to the extent the Leased
Improvements were operated prior to the assertion of such violation or
encroachment. Tenant's obligations under this Section 11.2 shall be in addition
to and shall in no way discharge or diminish any obligation of any insurer under
any policy of title or other insurance and Tenant shall be entitled to a credit
for any sums recovered by Landlord under any such policy of title or other
insurance.
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ARTICLE 12
PERMITTED CONTESTS
Tenant, on its own or on Landlord's behalf (or in Landlord's name) but
at Tenant's expense, may contest, by appropriate legal proceedings conducted in
good faith and with due diligence, the amount or validity or application, in
whole or in part, of any Imposition or any Legal Requirement or any lien,
attachment, levy, encumbrance, charge or claim not otherwise permitted by
Section 11.1, provided that:
(a) in the case of an unpaid Imposition, lien,
attachment, levy, encumbrance, charge or claim, the commencement and
continuation of such proceedings shall suspend the collection thereof
from Landlord and from the Leased Property, and neither the Leased
Property nor any Rent therefrom nor any part thereof or interest
therein would be in any danger of being sold, forfeited, attached or
lost pending the outcome of such proceedings;
(b) in the case of a Legal Requirement, neither Landlord
nor any Facility Mortgagee would be subject to criminal or civil
liability for failure to comply therewith pending the outcome of such
proceedings. Nothing in this Article 12(b), however, shall permit
Tenant to delay compliance with any requirement of any Environmental
Law to the extent such non-compliance poses an immediate threat of
injury to any Person or to the public health or safety or of material
damage to any real or personal property;
(c) in the case of a Legal Requirement and/or an
Imposition, lien, encumbrance or charge, Tenant shall give such
reasonable security, if any, as may be demanded by Landlord to insure
ultimate payment of the same and to prevent any sale or forfeiture of
the affected Leased Property or the Rent by reason of such non-payment
or noncompliance, provided, however, the provisions of this Article 12
shall not be construed to permit Tenant to contest the payment of Rent
(except as to contests concerning the method of computation or the
basis of levy of any Imposition or the basis for the assertion of any
other claim) or any other sums payable by Tenant to Landlord hereunder,
and provided further that any such security remaining after the final
resolution of such matter shall be returned to Tenant;
(d) no such contest shall interfere in any material
respect with the use or occupancy of the Leased Property;
(e) in the case of an Insurance Requirement, the
coverage required by Article 13 shall be maintained; and
(f) if such contest be finally resolved against Landlord
or Tenant, Tenant shall, as Additional Charges due hereunder, promptly
pay the amount required to be paid,
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together with all interest and penalties accrued thereon, or comply
with the applicable Legal Requirement or Insurance Requirement, and
Landlord, at Tenant's expense, shall execute and deliver to Tenant such
authorization and other documents as may reasonably be required in any
such contest, and, if reasonably requested by Tenant or if Landlord so
desires, Landlord shall join as a party therein. Tenant shall indemnify
and save Landlord and each Facility Mortgagee harmless against any
liability, cost or expense of any kind that may be imposed upon
Landlord or any Facility Mortgagee in connection with any such contest
and any loss resulting therefrom.
ARTICLE 13
INSURANCE
13.1 GENERAL INSURANCE REQUIREMENTS. Subject to the terms of
Article 22 hereof, during the Term of this Lease, Tenant shall at all times keep
the Leased Property, and all property located in or on the Leased Property,
including all Tenant's Personal Property and any Tenant Improvements, insured
with the kinds and amounts of insurance described below and any other or
additional insurance required by any Facility Mortgagee. This insurance shall be
written by companies authorized to do insurance business in the State in which
the Leased Property is located. The policies must name Landlord as an additional
insured. Losses shall be payable to Landlord and/or Tenant as provided in
Article 14. In addition, the policies shall name as an additional insured the
holder of any mortgage, deed of trust or other security agreement securing any
indebtedness or any other Landlord's Encumbrance placed on the Leased Property
in accordance with the provisions of Article 26 ("Facility Mortgage") by way of
a standard New York Mortgage clause or other applicable form of mortgagee's loss
payable endorsement. Any loss adjustment shall require the written consent of
Landlord, Tenant, and each Facility Mortgagee. Evidence of insurance shall be
deposited with Landlord and, if requested, with any Facility Mortgagee(s). The
policies on the Leased Property, including the Leased Improvements, Fixtures,
Tenant's Personal Property and any Tenant Improvements, shall insure against the
following risks:
13.1.1 ALL RISK. Loss or damage by all risks perils
including, but not limited to, fire, vandalism, malicious mischief and
extended coverages, including sprinkler leakage, in an amount not less
than 100% of the then Full Replacement Cost thereof.
13.1.2 LIABILITY. Claims for personal injury or property
damage under a policy of comprehensive general public liability
insurance with amounts not less than $10,000,000 per occurrence and in
the aggregate.
13.1.3 FLOOD. Flood (when the Leased Property is located in
whole or in material part in a designated flood plain area) and such
other hazards and in such amounts as may
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be customary for comparable properties in the area; provided, however,
that Tenant shall not be required to participate in the National Flood
Insurance Program.
13.1.4 WORKER'S COMPENSATION. Adequate worker's compensation
insurance coverage for all Persons employed by Tenant on the Leased
Property in accordance with the requirements of applicable federal,
state and local laws.
13.1.5 RENT LOSS. Rent loss Insurance payable to Landlord
covering payment of the then applicable Annual Base Rent for a twelve
(12) month period.
13.1.6 OTHER INSURANCE. Such other kinds and amounts of
insurance on or in connection with any of the Leased Property,
including all Tenant's Personal Property and any Tenant Improvements,
as Landlord or any Facility Mortgagee may reasonably require, which at
the time is usual and commonly obtained in connection with properties
similar in type of building size and use to the Leased Property and
located in the geographic area where the Leased Property is located.
13.2 REPLACEMENT COST. In the event either party believes that the
Full Replacement Cost of the insured property has increased or decreased at any
time during the Term, it shall have the right to have such Full Replacement Cost
redetermined by the fire insurance company which is then carrying the largest
amount of fire insurance carried on the Leased Property (the "Impartial
Appraiser"). The party desiring to have the Full Replacement Cost so
redetermined shall forthwith, on receipt of such determination by such Impartial
Appraiser, give written notice thereof to the other party hereto. The
determination of such Impartial Appraiser shall be final and binding on the
parties hereto, and Tenant shall forthwith increase, or may decrease, the amount
of the insurance carried pursuant to this Section 13.2, as the case may be, to
the amount so determined by the Impartial Appraiser. Each party shall pay
one-half of the fee, if any, of the Impartial Appraiser.
13.3 WAIVER OF SUBROGATION. All insurance policies carried by
either party covering the Leased Property including contents, fire and casualty
insurance, shall expressly waive any right of subrogation on the part of the
insurer against the other party (including any Facility Mortgagee). The parties
hereto agree that their policies will include such waiver clause or endorsement
so long as the same are obtainable without extra cost, and in the event of such
an extra charge the other party, at its election, may pay the same, but shall
not be obligated to do so.
13.4 FORM SATISFACTORY, ETC. All of the policies of insurance
referred to in Section 13.1 shall be written in a form reasonably satisfactory
to Landlord and by insurance companies rated not less than AVIII by A.M. Best's
Insurance Guide. Tenant shall pay all premiums for the policies of insurance
referred to in Section 13.1 and shall deliver certificates thereof and copies of
said policies to Landlord prior to their effective date (and with respect to any
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renewal policy, at least 10 days prior to the expiration of the existing
policy). In the event Tenant fails to satisfy its obligations under this Section
13.4, Landlord shall be entitled, but shall have no obligation, to effect such
insurance and pay the premiums therefor, which premiums (together with interest
thereon accruing at the Overdue Rate until repaid) shall be repayable to
Landlord upon written demand as Additional Charges. Each policy of insurance
required by Section 13.1 shall, by endorsement on the policy or policies, or by
independent instrument furnished to Landlord, provide that the insurer
thereunder will give to Landlord not less than 30 days' written notice before
the policy or policies in question shall be altered, allowed to expire or
canceled. Each such policy shall also provide that any loss otherwise payable
thereunder shall be payable notwithstanding (i) any act or omission of Landlord
or Tenant which might, absent such provision, result in a forfeiture of all or a
part of such insurance payment, (ii) the occupation or use of the Leased
Property for purposes more hazardous than those permitted by the provisions of
such policy, (iii) any foreclosure or other action or proceeding taken by any
Facility Mortgage pursuant to any provision of a mortgage, note, assignment or
other document evidencing or securing a loan upon the happening of an event of
default therein or (iv) any change in title to or ownership of the Leased
Property.
13.5 CHANGE IN LIMITS. In the event that Landlord shall at any time
reasonably determine on the basis of prudent industry practice that the
liability insurance carried by Tenant pursuant to Section 13.1.2 is either
excessive or insufficient, the parties shall endeavor to agree on the proper and
reasonable limits for such insurance to be carried; and such insurance shall
thereafter be carried with the limits thus agreed on until further changed
pursuant to the provisions of this Section 13.5; provided, however, that the
deductibles for such insurance or the amount of such insurance which is
self-retained by Tenant shall be as reasonably determined by Tenant so long as
Tenant can reasonably demonstrate its ability to satisfy such deductible or
amount of such self-retained insurance.
13.6 BLANKET POLICY. Notwithstanding anything to the contrary
contained in this Article 13, Tenant's obligations to carry the insurance
provided for herein may be brought within the coverage of a so-called blanket
policy or policies of insurance carried and maintained by Tenant; provided,
however, that the coverage afforded Landlord and each Facility Mortgagee will
not be reduced or diminished or otherwise be different from that which would
exist under a separate policy meeting all other requirements of this Lease by
reason of the use of such blanket policy of insurance, and provided further that
the requirements of this Article 13 are otherwise satisfied. The amount of the
total insurance allocated to the Leased Property, which amount shall be not less
than the amounts required pursuant to Section 13.1, shall be specified either
(i) in each such "blanket" policy or (ii) in a written statement, which Tenant
shall deliver to Landlord and Facility Mortgagee, from the insurer thereunder. A
certificate and copy of each such "blanket" policy shall promptly be delivered
to Landlord and Facility Mortgagee.
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ARTICLE 14
APPLICATION OF INSURANCE PROCEEDS
14.1 INSURANCE PROCEEDS. All proceeds of insurance payable by
reason of any loss or damage to the Leased Property, or any portion thereof, and
insured under any policy of insurance required by Article 13 shall (i) if
greater than or equal to $250,000, be paid to and held by Landlord and (ii) if
less than such amount, be paid to Tenant and held by Tenant. All such proceeds
shall be held in trust and shall be made available for reconstruction or repair,
as the case may be, of any damage to or destruction of the Leased Property, or
any portion thereof.
14.1.1 DISBURSEMENT OF PROCEEDS. Any proceeds held by
Landlord or Tenant shall be paid out by Landlord or Tenant from time to
time for the reasonable costs of such reconstruction or repair;
provided, however, that Landlord shall disburse proceeds subject to the
following requirements:
(i) prior to commencement of restoration, (A)
the architects, contracts, contractors, plans and
specifications for the restoration shall have been approved by
Landlord, which approval shall not be unreasonably withheld or
delayed, (B) if legally permitted (and, if waivers can be
obtained at such time without payment of additional funds to
the contractors at such time), appropriate waivers of
mechanics' and materialmen's liens shall have been filed and
(C) Tenant shall have obtained and delivered to Landlord all
required governmental and private approvals necessary to
complete the reconstruction or repair (including building
permits, licenses and other necessary approvals);
(ii) at the time of any disbursement, subject to
Article 12, no mechanics' or materialmen's liens shall have
been filed against any of the Leased Property and remain
undischarged, unless a satisfactory bond shall have been
posted in accordance with the laws of the State;
(iii) disbursements shall be made from time to
time in an amount not exceeding the cost of the work completed
since the last disbursement, upon receipt of (A) satisfactory
evidence of the stage of completion, the estimated total cost
of completion and performance of the work to date in a good
and workmanlike manner in accordance with the contracts, plans
and specifications, (B) waivers of liens, (C) a satisfactory
bringdown of title insurance and (D) other evidence of cost
and payment so that Landlord and Facility Mortgagee can verify
that the amounts disbursed from time to time are represented
by work that is completed, in place and free and clear of
mechanics' and materialmen's lien claims;
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(iv) each request for disbursement shall be
accompanied by a certificate of Tenant, signed by a duly
authorized representative of Tenant, describing the work for
which payment is requested, stating the cost incurred in
connection therewith, stating that Tenant has not previously
received payment for such work and, upon completion of the
work, also stating that the work has been fully completed and
complies with the applicable requirements of this Lease;
(v) to the extent actually held by Landlord and
not by a Facility Mortgagee, (1) the proceeds shall be held in
a separate account and shall not be commingled with Landlord's
other funds, and (2) interest shall accrue on funds so held at
the money market rate of interest and such interest shall
constitute part of the proceeds; and
(vi) such other reasonable conditions as Landlord
or Facility Mortgagee may reasonably impose, including,
without limitation, payment by Tenant of reasonable costs of
administration imposed by or on behalf of Facility Mortgagee
should the proceeds be held by Facility Mortgagee and
including a deposit of funds by Tenant if reasonably
determined by Landlord or Facility Mortgagee that the
insurance proceeds are insufficient to complete the
restoration.
14.1.2 EXCESS PROCEEDS. Any excess proceeds of insurance
remaining after the completion of the restoration or reconstruction of
the Leased Property (or in the event neither Landlord nor Tenant is
required or elects to repair and restore) shall be paid to Landlord and
Tenant in like proportions to the value of Landlord's interests in the
Leased Property and Tenant's interest in Tenant's Personal Property and
the Tenant Improvements, or any portion thereof upon completion of any
such repair and restoration except as otherwise specifically provided
below in this Article 14. All salvage resulting from any risk covered
by insurance shall belong to Landlord.
14.2 RECONSTRUCTION COVERED BY INSURANCE.
14.2.1 DESTRUCTION RENDERING FACILITY UNSUITABLE FOR ITS
PRIMARY USE. If during the Term the Leased Property is totally or
partially destroyed from a risk covered by the insurance described in
Article 13 and the Facility thereby is rendered Unsuitable For Its
Primary Intended Use, Tenant shall diligently restore the Facility to
substantially the same condition as existed immediately before the
damage or destruction. Such damage or destruction shall not terminate
this Lease.
14.2.2 DESTRUCTION NOT RENDERING FACILITY UNSUITABLE FOR ITS
PRIMARY USE. If during the Term, the Leased Property is totally or
partially destroyed from a risk covered by the insurance described in
Article 13, but the Facility is not thereby rendered
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Unsuitable For Its Primary Intended Use, Tenant shall diligently
restore the Facility to substantially the same condition as existed
immediately before the damage or destruction; provided, however, Tenant
shall not be required to restore Tenant's Personal Property and/or any
Tenant Improvements if failure to do so does not adversely affect the
amount of Additional Rent payable hereunder. Such damage or destruction
shall not terminate this Lease.
14.2.3 COSTS OF REPAIR. If the cost of the repair or
restoration exceeds the amount of proceeds received by Landlord or
Tenant from the insurance required under Article 13, Tenant shall pay
for such excess cost of repair or restoration.
14.3 RECONSTRUCTION NOT COVERED BY INSURANCE. If during the Term,
the Facility is totally or materially destroyed from a risk not covered by the
insurance described in Article 13, whether or not such damage or destruction
renders the Facility Unsuitable For Its Primary Intended Use, Tenant shall
diligently restore the Facility to substantially the same condition as existed
immediately before the damage or destruction.
14.4 NO ABATEMENT OF RENT. This Lease shall remain in full force
and effect and Tenant's obligation to make rental payments and to pay all other
charges required by this Lease shall remain unabated during the period required
for repair and restoration; provided, however, that if there is no Event of
Default, Tenant shall be entitled to retain any proceeds of rental value or
business interruption insurance coverage maintained by Tenant (which amounts
shall be deemed Golf Course Revenue for purposes hereof).
14.5 WAIVER. Tenant hereby waives any statutory or other rights of
termination which may arise by reason of any damage or destruction of the
Facility which Landlord or Tenant is obligated to restore or may restore under
any of the provisions of this Lease.
14.6 DAMAGE NEAR END OF TERM. Notwithstanding any other provision
to the contrary in this Article 14, if damage to or destruction of the Leased
Property occurs during the last 24 months of the Term of this Lease, and if such
damage or destruction cannot reasonably be expected to be fully repaired or
restored prior to the date that is 12 months prior to the end of the
then-applicable Term, then either Landlord or Tenant shall have the right to
terminate this Lease on not less than 30 days' prior notice to the other party
by giving notice thereof to the other party within 60 days after the date of
such damage or destruction. Upon any such termination, Landlord shall be
entitled to retain all insurance proceeds, grossed up by Tenant to account for
the deductible or any self-insured retention; provided, however, that Tenant
shall be entitled to retain or receive all insurance proceeds relating to
Tenant's Personal Property. If Landlord shall give Tenant a notice under this
Section 14.6 that it seeks to terminate this Lease at a time when Tenant has a
remaining Extended Term, then such termination notice shall be of no effect if
Tenant shall
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exercise its rights to extend the Term not later than the earlier of the time
required by Section 2.2 or within 30 days after Landlord's notice of termination
given under this Section 14.6.
ARTICLE 15
CONDEMNATION
15.1 TOTAL TAKING. If at any time during the Term the Leased
Property is totally and permanently taken by Condemnation, this Lease shall
terminate on the Date of Taking and Tenant shall promptly pay all outstanding
Rent and other charges through the date of termination.
15.2 PARTIAL TAKING. If a portion of the Leased Property is taken
by Condemnation, this Lease shall remain in effect if the Facility is not
thereby rendered Unsuitable For Its Primary Intended Use, but if the Facility is
thereby rendered Unsuitable For Its Primary Intended Use, this Lease shall
terminate on the Date of Taking.
15.3 RESTORATION. If there is a partial taking of the Leased
Property and this Lease remains in full force and effect pursuant to Section
15.2, Landlord at its cost shall accomplish all necessary restoration up to but
not exceeding the amount of the Award payable to Landlord, as provided herein;
provided, however, that at Landlord's option, Landlord may require Tenant to
perform such restoration, in which event Landlord shall make Landlord's Award
available for such purpose, subject to disbursement requirements substantially
similar to those set forth in Section 14.1.1 (it being understood that Tenant
shall be responsible for completion of such restoration, at its cost,
irrespective of whether the condemnation proceeds are sufficient to pay all of
the costs of such restoration work). If Tenant receives an Award under Section
15.4, Tenant shall repair or restore any Tenant Improvements up to but not
exceeding the amount of the Award payable to Tenant therefor.
15.4 AWARD DISTRIBUTION. The entire Award shall belong to and be
paid to Landlord, except that, subject to the rights of the Facility Mortgagee,
Tenant shall be entitled to receive from the Award, if and to the extent such
Award specifically includes such items, or to otherwise pursue a separate Award
(but only to the extent such separate Award does not reduce the amount of the
Award to which Landlord would otherwise be entitled hereunder) for, a sum
attributable to the value, if any, of: (i) any Tenant's Personal Property and
(ii) the leasehold interest of Tenant under this Lease; provided, however, that
if the amount received by Landlord and the Facility Mortgagee is less than the
Condemnation Threshold, then the amount of the Award otherwise payable to Tenant
for the value of its leasehold interest under this Lease (and not any other
funds of Tenant) shall instead be paid over to Landlord up to the amount of the
shortfall.
15.5 TEMPORARY TAKING. The taking of the Leased Property, or any
part thereof, by military or other public authority shall constitute a taking by
Condemnation only when the use and
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occupancy by the taking authority has continued for longer than six months.
During any such six month period or less, which shall be deemed a temporary
taking, all the provisions of this Lease shall remain in full force and effect
with no abatement of Rent payable by Tenant hereunder. In the event of any such
temporary taking, the entire amount of any such Award made for such temporary
taking allocable to the Term of this Lease, whether paid by way of damage, rent
or otherwise, shall be paid to Tenant.
ARTICLE 16
EVENTS OF DEFAULT
16.1 EVENTS OF DEFAULT. If any one or more of the following events
(individually, an "Event of Default") shall occur:
(a) if Tenant shall fail to make payment of the Rent
payable by Tenant under this Lease when the same becomes due and
payable and such failure is not cured by Tenant within a period of 10
days after receipt by Tenant of notice thereof from Landlord; provided,
however, that such notice shall be in lieu of and not in addition to
any notice required under applicable law;
(b) if Tenant shall fail to obtain, maintain or replace
the security deposit as required by Article 21 or the capital
expenditure reserve deposits required by Section 18.2;
(c) if, other than as a result of Unavoidable Delays,
Tenant shall fail to observe or perform any material term, covenant or
condition of this Lease and such failure is not cured by Tenant within
a period of 30 days after receipt by Tenant of notice thereof from
Landlord, unless such failure cannot with due diligence be cured within
a period of 30 days, in which case such failure shall not be deemed to
continue if Tenant proceeds promptly and with due diligence to cure the
failure and diligently completes the curing thereof, and in any event
cures such failure within an additional ninety (90) day period
following the foregoing 30-day cure period; provided, however, that
such notice shall be in lieu of and not in addition to any notice
required under applicable law; provided further, however, that the cure
period shall not extend beyond 30 days as otherwise provided by this
Section 16.1(c) if the facts or circumstances giving rise to the
default are creating a further harm to Landlord or the Leased Property
and Landlord makes a good faith determination that Tenant is not
undertaking remedial steps that Landlord would cause to be taken if
this Lease were then to terminate.
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(d) if Tenant shall:
(i) admit in writing its inability to pay its
debts generally as they become due;
(ii) file a petition in bankruptcy or a petition
to take advantage of any insolvency act;
(iii) make an assignment for the benefit of its
creditors;
(iv) consent to the appointment of a receiver of
itself or of the whole or any substantial part of its
property;
(v) file a petition or answer seeking
reorganization or arrangement under the Federal bankruptcy
laws or any other applicable law or statute of the United
States of America or any state thereof; or
(vi) be unable to pay its debts as they mature.
(e) if Tenant shall, on a petition in bankruptcy filed
against it, be adjudicated as bankrupt or a court of competent
jurisdiction shall enter an order or decree appointing, without the
consent of Tenant, a receiver of Tenant or of the whole or
substantially all of its property, or approving a petition filed
against it seeking reorganization or arrangement of Tenant under the
federal bankruptcy laws or any other applicable law or statute of the
United States of America or any state thereof, and such judgment, order
or decree shall not be vacated or set aside or stayed within 60 days
from the date of the entry thereof;
(f) if Tenant shall be liquidated or dissolved, or shall
begin proceedings toward such liquidation or dissolution;
(g) if the estate or interest of Tenant in the Leased
Property or any part thereof shall be levied upon or attached in any
proceeding and the same shall not be vacated or discharged within the
later of 90 days after commencement thereof or 30 days after receipt by
Tenant of notice thereof from Landlord (unless Tenant shall be
contesting such lien or attachment in accordance with Article 12);
provided, however, that such notice shall be in lieu of and not in
addition to any notice required under applicable law;
(h) if, except as a result of damage, destruction or a
partial or complete Condemnation or other Unavoidable Delays, Tenant
voluntarily ceases operations on the Leased Property for a period in
excess of 45 consecutive days;
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(i) any representation or warranty made by Tenant herein
or in any certificate, demand or request made pursuant hereto proves to
have been incorrect when made in any material respect and any adverse
effect on Landlord of any such misrepresentation or breach of warranty
has not been corrected to Landlord's satisfaction within 20 days after
Tenant becomes aware of, or is notified by Landlord of the fact of,
such misrepresentation or breach of warranty;
(j) if an Event of Default under any of the Other
Property Leases occurs, provided, however, that if such Event of
Default (other than for the failure to pay money or post the requisite
security) arose from occurrences beyond the reasonable control of
Tenant, such Event of Default shall not constitute an Event of Default
under this Section 16.1(j);
(k) with respect to two (2) or more of the Other Property
Leases, either an Event of Default has occurred and is continuing or
such leases have been terminated by reason of an Event of Default;
(l) a default by Tenant in any payment of principal or
interest on any obligations for borrowed money having a principal
balance of $5,000,000 or more in the aggregate (excluding obligations
which are limited in recourse to specific property of Tenant provided
that such property is not a substantial portion of the assets of
Tenant), or in the performance of any other provision contained in any
instrument under which any such obligation is created or secured
(including the breach of any covenant thereunder), if an effect of such
default is that the holder(s) of such obligation cause such obligation
to become due prior to its stated maturity; or
(m) a final, non-appealable judgment or judgments for the
payment of money in excess of $3,000,000 in the aggregate not fully
covered (excluding deductibles) by insurance shall be rendered against
Tenant and the same shall remain undischarged, unvacated, unbonded, or
unstayed for a period of 60 consecutive days;
THEN, Landlord may terminate this Lease by giving Tenant not less than 10 days'
notice (or no notice for clauses (d), (f) and (g)) of such termination and upon
the expiration of the time fixed in such notice, the Term shall terminate and
all rights of Tenant under this Lease shall cease. Without limitation of the
foregoing, Landlord shall have all other rights at law and in equity available
to Landlord as a result of any Event of Default under this Lease.
16.2 PAYMENT OF COSTS. Tenant shall, to the extent permitted by
law, pay as Additional Charges all costs and expenses incurred by or on behalf
of Landlord, including reasonable attorneys' fees and expenses, as a result of
any Event of Default hereunder.
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16.3 EXCEPTIONS. No Event of Default (other than a failure to make
payment of money or post a required letter of credit) shall be deemed to exist
under clause 16.1(c) or clause 16.1(j) during any time the curing thereof is
prevented by an Unavoidable Delay; provided that, upon the cessation of such
Unavoidable Delay, Tenant shall remedy such default without further delay.
16.4 CERTAIN REMEDIES. If an Event of Default shall have occurred
(and the event giving rise to such Event of Default has not been cured within
the curative period relating thereto as set forth in Section 16.1) and be
continuing, whether or not this Lease has been terminated pursuant to Section
16.1, Tenant shall, to the extent permitted by law, if required by Landlord so
to do, immediately surrender to Landlord the Leased Property pursuant to the
provisions of Section 16.1 and quit the same and Landlord may enter upon and
repossess the Leased Property by reasonable force, summary proceedings,
ejectment or otherwise, and may remove Tenant and all other Persons and any and
all Tenant's Personal Property from the Leased Property subject to any
requirement of law.
16.5 DAMAGES. None of (a) the termination of this Lease pursuant to
Section 16.1, (b) the repossession of the Leased Property, (c) the failure of
Landlord, notwithstanding reasonable good faith efforts, to relet the Leased
Property, (d) the reletting of all or any portion thereof, nor (e) the failure
of Landlord to collect or receive any rentals due upon any such reletting, shall
relieve Tenant of its liability and obligations hereunder, all of which shall
survive any such termination, repossession or reletting. In the event of any
such termination, Tenant shall forthwith pay to Landlord all Rent due and
payable with respect to the Leased Property to, and including, the date of such
termination. Thereafter, Tenant shall forthwith pay to Landlord, at Landlord's
option, as and for liquidated and agreed current damages for Tenant's default,
either:
(a) the sum of:
(i) the worth at the time of award of the
amount by which the unpaid Rent which would have been earned
after termination until the time of award exceeds the amount
of such rental loss that Tenant proves could have been
reasonably avoided,
(ii) the worth at the time of award of the
amount by which the unpaid Rent for the balance of the Term
after the time of award exceeds the amount of such rental
loss that Tenant proves could be reasonably avoided, and
(iii) any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's
failure to perform its obligations under this Lease or which
in the ordinary course of things would be likely to result
therefrom.
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In making the above determinations, the worth at the time of the award
shall be determined by the court having jurisdiction thereof using, as
a discount factor for determining present value, a rate equal to the
Prime Rate at the time of the Event of Default, and the Additional Rent
shall be deemed to be the same as for the then-current Fiscal Year or,
if not determinable, the immediately preceding Fiscal Year, for the
remainder of the Term, or such other amount as either party shall prove
reasonably could have been earned during the remainder of the Term or
any portion thereof; or
(b) without termination of Tenant's right to possession
of the Leased Property, each installment of said Rent and other sums
payable by Tenant to Landlord under the Lease as the same becomes due
and payable, which Rent and other sums shall bear interest at the
maximum annual rate permitted by the law of the State from the date
when due until paid, and Landlord may enforce, by action or otherwise,
any other term or covenant of this Lease.
16.6 ADDITIONAL REMEDIES. In addition to and without limitation of
the foregoing, Landlord shall have all other remedies that may be available
under applicable law.
16.7 APPOINTMENT OF RECEIVER. Upon the occurrence of an Event of
Default, and upon filing of a suit or other commencement of judicial proceedings
to enforce the rights of Landlord hereunder, Landlord shall be entitled, as a
matter of right, to the appointment of a receiver or receivers acceptable to
Landlord (i) of the Leased Property and the Facility and (ii) of the revenues,
earnings, income, products and profits thereof, pending such proceedings, with
such powers as the court making such appointment shall confer.
16.8 WAIVER. If this Lease is terminated pursuant to Section 16.1,
Tenant waives, to the extent permitted by applicable law (a) any right of
redemption, re-entry or repossession and (b) any right to a trial by jury in the
event of summary proceedings to enforce the remedies set forth in this Article
16.
16.9 APPLICATION OF FUNDS. Any payments received by Landlord under
any of the provisions of this Lease during the existence or continuance of any
Event of Default shall be applied to Tenant's obligations in such order as
Landlord may determine or as may be prescribed by the laws of the State.
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ARTICLE 17
LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT
If Tenant shall fail to make any payment or to perform any act required
to be made or performed under this Lease, and to cure the same within the
relevant time periods in Section 16.1, Landlord, after notice to and demand upon
Tenant, and without waiving or releasing any obligation or default, may (but
shall be under no obligation to) at any time thereafter make such payment or
perform such act for the account and at the expense of Tenant. Landlord may, to
the extent permitted by law, enter upon the Leased Property for such purpose and
take all such action thereon as, in Landlord's good faith judgment, may be
necessary or appropriate therefor. No such entry shall be deemed an eviction of
Tenant. All sums so paid by Landlord and all costs and expenses (including
reasonable attorneys' fees and expenses, to the extent permitted by law) so
incurred, together with a late charge thereon at the Overdue Rate from the date
on which such sums or expenses are paid or incurred by Landlord, shall be paid
by Tenant to Landlord on demand. The obligations of Tenant and rights of
Landlord contained in this Article 17 shall survive the expiration or earlier
termination of this Lease.
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ARTICLE 18
OPERATIONS/CAPITAL EXPENDITURES
18.1 ANNUAL PLAN. On or before the Commencement Date (i.e., with
respect to the calendar year in which the Commencement Date occurs), and
thereafter on or before November 30th of each year during the Term hereof,
Tenant shall deliver to Landlord a report with respect to the next succeeding
calendar year (herein, an "Annual Plan"), setting forth the plans and prospects
for Tenant's business operations at the Leased Property, which shall include (i)
a forecast or budget of revenues (including, without limitation, Golf Course
Revenues and Other Revenues) and expenses for such period, (ii) a projection on
a month-by-month basis of cash in-flow and working capital, (iii) proposed plans
for marketing, sales, promotion, membership development and advertising, (iv) a
proposed schedule of all fees and charges to be imposed at the Leased Property,
including, but not limited to, membership fees, greens fees and cart rental
charges, charges for the use of practice range facilities, food and beverages
charges, and fees and charges for other services, amenities and products that
Tenant intends to offer at the Leased Property, (v) a forecast or budget of
Capital Expenditures for such period, together with a plan for the improvement
of the golf course and related facilities and a plan for the improvement of the
clubhouse and other buildings at the Leased Property, and (vi) description of
any other material action concerning the management, operation or marketing of
the Leased Property contemplated for the period at issue. Landlord shall have
the right to request reasonable modifications to the components of the Annual
Plan described in subclause (v) above with respect to additions or improvements
made or to be made to the Leased Property, by notice thereof to Tenant, and
Tenant shall thereafter so modify such items as reasonably requested by
Landlord, and shall submit the revised components of the Annual Plan to Landlord
within thirty (30) days following Landlord's request for such modifications.
Tenant shall utilize good faith efforts to implement the Annual Plan for the
respective period or periods covered thereby and shall promptly notify Landlord
of any action taken by Tenant which materially deviates from the matters set
forth in the current Annual Plan. Without limitation of the foregoing, it is
agreed by Tenant that the Annual Plan shall provide for an annual budget for
Capital Expenditures of not less than three percent (3%) of the Golf Course
Revenues and Other Revenues budgeted for such annual period.
18.2 FUNDING OF CAPITAL EXPENDITURE RESERVE ACCOUNT. Within twenty
(20) days after the end of each Fiscal Quarter during the Term hereof, Tenant
shall deposit into an account at an institution designated by Landlord (herein,
the "Capital Expenditure Reserve Account"), the aggregate "Capital Expenditure
Reserve Amounts" (as defined below) required for the immediately preceding
Fiscal Quarter. Such amounts shall be invested as directed by Tenant, subject to
Landlord's reasonable approval. As further security for the payment and
performance of all obligations of Tenant hereunder, Tenant hereby grants to
Landlord and, if so requested by Landlord, to any Facility Mortgagee designated
by Landlord, a security interest in and to the
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Capital Expenditure Reserve Account and all sums on deposit therein. All such
sums, together with any interest thereon, shall belong to Tenant and will be
held in the Capital Expenditure Reserve Account and released and applied in
accordance with the terms of this Lease. Tenant may make withdrawals from the
Capital Expenditure Reserve Account with respect to Capital Expenditures that
are reflected in the Annual Plan and which pertain to Tenant Improvements
approved by Landlord pursuant to Article 10 hereof, to the extent such
withdrawals are made to reimburse Tenant for sums paid or incurred with respect
to such Tenant Improvements. Notwithstanding the foregoing, upon the occurrence
of an Event of Default hereunder, Tenant shall have no further rights with
respect to any amounts on deposit in the Capital Expenditure Reserve Account,
and such amounts shall be deemed to be held by Landlord as further security for
Tenant's obligations hereunder, to be disbursed or applied in accordance with
the same terms and conditions as set forth in Article 21 hereof with respect to
the balance of the security then on deposit with Landlord. For purposes hereof,
the term "Capital Expenditure Reserve Amount" shall mean, for any Fiscal
Quarter, an amount equal to the excess (if any) of (A) three percent (3%) of the
Golf Course Revenues and Other Revenues accruing from the beginning of the
"Capital Expenditure Period" (as defined below) in which such Fiscal Quarter
occurs through and including the end of such Fiscal Quarter (herein, the
"Calculation Period") over (B) the Capital Expenditures expended during such
Calculation Period with respect to the Leased Property, which Capital
Expenditures were made pursuant to an Annual Plan and otherwise pursuant to the
terms of Article 10 hereof. For purposes hereof, the term ""Capital Expenditure
Period" shall mean (a) the period from and the Commencement Date and through the
fourth (4th) full Fiscal Quarter thereafter and (b) each successive period of
four (4) full Fiscal Quarters thereafter occurring during the Term thereof. Any
amounts remaining in the Capital Expenditure Reserve Account at the expiration
or prior termination of the Term shall become the sole property of Landlord,
without further action by either party.
ARTICLE 19
LEGAL REQUIREMENTS
Subject to Article 12 regarding permitted contests, Tenant, at its
expense, shall promptly (a) comply with all Legal Requirements and Insurance
Requirements in respect of the use, operation, maintenance, repair and
restoration of the Leased Property, whether or not compliance therewith shall
require structural changes in any of the Leased Improvements or interfere with
the use and enjoyment of the Leased Property; and (b) procure, maintain and
comply with all licenses, permits, approvals and authorizations required for any
use of the Leased Property then being made, and for the proper erection,
installation, operation and maintenance of the Leased Property or any part
thereof.
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ARTICLE 20
HOLDING OVER
If Tenant shall for any reason remain in possession of the Leased
Property after the expiration of the Term or earlier termination of the Term
hereof, such possession shall be as a tenancy at sufferance during which time
Tenant shall pay as rental each month or partial month, 125% of the aggregate of
(i) one-twelfth of the aggregate Annual Base Rent and Additional Rent payable
with respect to the last Fiscal Year of the preceding Term; (ii) all Additional
Charges accruing during the month; and (iii) all other sums, if any, payable by
Tenant pursuant to the provisions of this Lease with respect to the Leased
Property. In addition to and without limiting any other rights or remedies which
Landlord may have on account of such holding over, Tenant shall indemnify
Landlord from and against all damages suffered by Landlord on account of such
holding over, including any damages and claims by tenants entitled to future
possession. During such period of tenancy at sufferance, Tenant shall be
obligated to perform and observe all of the terms, covenants and conditions of
this Lease, but shall have no rights hereunder other than the right, to the
extent given by law to such tenancies at sufferance, to continue its occupancy
and use of the Leased Property. Nothing contained herein shall constitute the
consent, express or implied, of Landlord to the holding over of Tenant after the
expiration or earlier termination of this Lease.
ARTICLE 21
UPREIT UNITS/REIT SHARES/LETTER OF CREDIT/SECURITY DEPOSIT
21.1 SECURITY DEPOSIT. On or before the Commencement Date, Tenant
shall post a Letter of Credit with Landlord (or shall pledge or otherwise
deliver limited partnership units in Landlord, shares of common stock in
Landlord's general partner, or other security acceptable to Landlord and
described in Section 21.6 below), to be held as a security deposit in accordance
with the term, of this Article 21. The security deposit shall, at all times, be
in an amount equal to the then Required Security Deposit Amount (as defined in
Exhibit A hereto).
21.2 OFFICER'S CERTIFICATE/AUDIT. Tenant shall provide an Officer's
Certificate to Landlord not later than forty-five (45) days after the end of
each Fiscal Quarter, as to the Required Security Deposit Amount then in effect,
which Certificate shall include a calculation and reasonable detail of such
item. Without limitation of the foregoing, Landlord shall have the right, at any
time and from time to time, to audit, whether directly or through its
accountants, the information set forth in any Officer's Certificate to be
delivered under this Article 21, and in connection with such audit, to examine
Tenant's books and records with respect thereto (including supporting data,
sales tax returns and Tenant's workpapers). Any determination made by Landlord
pursuant to said audit shall be binding upon Tenant. If any such audit discloses
that the EBITDA (as defined in Exhibit A hereto) was overstated by such amount
so as to result in a
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purported reduction in the Required Security Deposit Amount for which Tenant was
not otherwise entitled based upon the audited EBITDA calculations, then, in such
case, Tenant shall be responsible for all costs incurred by Landlord in
connection with such audit and examination. If the determination of the then
Required Security Deposit Amount indicates that Landlord is then holding either
less than or greater than the then required security deposit hereunder, the
parties shall promptly cooperate with one another in either increasing or
decreasing the security deposit so that Landlord, within thirty (30) days after
delivery of said Officer's Certificate (or, if Landlord disputes such
determination, then within 30 days following any audit conducted by Landlord as
provide above in this Section 21.2), is then holding the appropriate security
deposit hereunder.
21.3 TERMS OF LETTER OF CREDIT. In the event that the security
under this Article 21 is in the form of a Letter of Credit, such Letter of
Credit shall:
(i) be an irrevocable standby letter of credit from a
bank with a long-term debt rating from Standard & Poor's Corporation or
▇▇▇▇▇'▇ Investors Service Inc. of "A" or better naming Landlord (and/or
any Facility Mortgagee if requested by Landlord) as beneficiary to
secure Tenant's obligations hereunder and Tenant's or an Affiliate of
Tenant's obligations under the Other Property Leases;
(ii) have a stated amount equal to the Required Security
Deposit Amount plus, if the Letter of Credit is intended to satisfy
Tenant's obligations under the Other Property Leases with Landlord, the
amounts required under such other leases;
(iii) have a term of not less than one year;
(iv) provide that it will be honored upon a signed
statement by Landlord that Landlord is entitled to draw upon the letter
of credit under this Lease, and shall require no signature or statement
from any party other than Landlord; and
(v) permit multiple draws by providing that following the
honor of any drafts in an amount less than the aggregate stated amount
of the Letter of Credit, the issuing bank shall return the original
letter of credit to Landlord and that Landlord's rights as to the
remaining stated amount of the Letter of Credit will not be
extinguished.
21.4 DRAWS AGAINST LETTER OF CREDIT/ALTERNATIVE SECURITY;
APPLICATION OF PROCEEDS. Landlord may draw against the Letter of Credit (or,
in the case of alternative security under Section 21.6 below, Landlord may
apply or otherwise proceed against such security) upon any monetary default
under this Lease or any other Event of Default under the terms of Section 16.1.
Landlord may apply any amounts drawn or received under the Letter of Credit (or
alternative security) to the satisfaction of any obligations owed to Landlord
under this Lease or the Other
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Property Leases. Any proceeds from the Letter of Credit (or alternative
security) drawn or received but not so applied shall be held by Landlord as a
security deposit.
21.5 RENEWAL OF LETTER OF CREDIT. If the Letter of Credit shall
expire at a time when the Letter of Credit is still required under Section 21.1
or Section 21.2, Tenant shall renew the Letter of Credit at least 30 days prior
to its expiration. If Tenant shall fail to renew the Letter of Credit prior to
such time, Landlord may draw against the same and hold the proceeds thereof as a
security deposit until such time as Tenant shall renew the Letter of Credit.
Landlord shall hold such security deposit in a separate account in trust for
Tenant and shall account to Tenant for any interest earned thereon.
21.6 OTHER SECURITY. In the event Landlord, at its discretion (and
without obligation to do so), permits the security under this Article 21 to be
in a form other than a Letter of Credit, then the alternative security shall be
in the same amount as the "Required Security Deposit Amount" and shall otherwise
be in such form and substance as may be acceptable to Landlord, in its
discretion. In such event, Tenant agrees to enter into a supplement to this
Lease, at Landlord's request, in order to set forth the terms and conditions
governing the alternative security. Without limitation of the foregoing,
Landlord hereby agrees that limited partnership units in Landlord or shares of
common stock in Landlord's general partner shall be deemed to be an acceptable
form of alternative security hereunder. The value of each such limited
partnership unit or share of common stock, for purposes of this Article 21,
shall be (A) with respect to any partnership unit or share delivered or pledged
to Landlord as security as of the Commencement Date of the Term, the "Price to
Public (Per Share)", as shown on the cover page of the final prospectus
distributed in connection with the initial public offering of shares of common
stock of Landlord's general partner, and (B) with respect to any partnership
unit or share delivered or pledged to Landlord as security at any time following
the Commencement Date of the Term, the average of the New York Stock Exchange
closing prices per share of common stock of Landlord's general partner for the
twenty (20) consecutive "Trading Days" (as hereinafter defined) immediately
preceding the date of delivery or pledge of said partnership unit or share as
security hereunder. For purposes of the foregoing, "Trading Day" shall mean a
day on which the New York Stock Exchange is open for the transaction of
business.
ARTICLE 22
IMPOUNDS
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Without limitation on any obligations of Tenant set forth herein,
Landlord shall have the right, at any time following and during the continuance
of an Event of Default hereunder, to require Tenant to pay to Landlord an
additional monthly sum (each an "Impound Payment") sufficient to pay the Impound
Charges (as hereinafter defined) as they become due. As used herein, "Impound
Charges" shall mean real estate taxes on the Leased Property or payments in lieu
thereof, and premiums on any insurance required by this Lease. Landlord shall
determine the amount of the Impound Charges and of each Impound Payment. The
Impound Payments shall be held in a separate account and shall not be commingled
with other funds of Landlord and interest thereon shall be held for the account
of Tenant. Upon Tenant's tendering to Landlord of invoices therefor no later
than thirty (30) days prior to the respective due dates thereof, Landlord shall
apply the Impound Payments to the payment of the Impound Charges in such order
or priority as Landlord shall reasonably determine or as otherwise required by
law. If at any time the Impound Payments theretofore paid to Landlord shall be
insufficient for the payment of the Impound Charges, Tenant, within 10 days
after Landlord's written demand therefor, shall pay the amount of the deficiency
to Landlord.
ARTICLE 23
INDEMNIFICATION; RISK OF LOSS
23.1 TENANT'S INDEMNIFICATION. Notwithstanding the existence of any
insurance provided for in Article 13, and without regard to the policy limits of
any such insurance, Tenant will protect, indemnify, save harmless and defend
Landlord and each Facility Mortgagee from and against all liabilities,
obligations, claims, damages, penalties, causes of action, costs and expenses
(including reasonable attorneys' fees and expenses), to the extent permitted by
law, imposed upon or incurred by or asserted against such parties by reason of:
(a) any accident, injury to or death of Persons or loss
of or damage to property occurring on or about the Leased Property or
adjoining sidewalks, including, but not limited to, any accident,
injury to or death of Person or loss of or damage to property resulting
from golf balls, golf clubs, golf shoes, lawn mowers or other gardening
devices, golf carts, tractors or other motorized vehicles present on or
adjacent to the Leased Property;
(b) any use, misuse, non-use, condition, maintenance or
repair by Tenant of the Leased Property;
(c) any Impositions (which are the obligations of Tenant
to pay pursuant to the applicable provisions of this Lease);
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(d) any failure on the part of Tenant to perform or
comply with any of the terms of this Lease;
(e) the non-performance of any of the terms and
provisions of any and all existing and future subleases of the Leased
Property to be performed by the sublandlord (i.e., Tenant) thereunder;
(f) any "dram shop" liability associated with the sale
and/or consumption of alcohol at the Leased Property; and
(g) any liability Landlord or any Facility Mortgagee may
incur or suffer as a result of any permitted contest by Tenant pursuant
to Article 12.
23.2 LANDLORD'S INDEMNIFICATION OF TENANT. Landlord shall protect,
indemnify, save harmless and defend Tenant from and against all liabilities,
obligations, claims, damages, penalties, causes of action, costs and expenses
(including reasonable attorneys' fees) imposed upon or incurred by or asserted
against Tenant as a result of Landlord's active negligence or willful
misconduct.
23.3 MECHANICS OF INDEMNIFICATION. As soon as reasonably
practicable after receipt by the indemnified party of notice of any liability or
claim incurred by or asserted against the indemnified party that is subject to
indemnification under this Article 23, the indemnified party shall give notice
thereof to the indemnifying party. The indemnified party may at its option
demand indemnity under this Article 23 as soon as a claim has been threatened by
a third party regardless of whether an actual loss has been suffered, so long as
the indemnified party shall in good faith determine that such claim is not
otherwise frivolous and that the indemnified party may be liable for, or
otherwise incur, a loss as a result thereof and shall give notice of such
determination to the indemnifying party. The indemnified party shall permit the
indemnifying party, at its option and expense, to assume the defense of any such
claim by counsel selected by the indemnifying party and reasonably satisfactory
to the indemnified party, and to settle or otherwise dispose of the same;
provided, however, that the indemnified party may at all times participate in
such defense at its expense; and provided further, however, that the
indemnifying party shall not, in defense of any such claim, except with the
prior written consent of the indemnified party, consent to the entry of any
judgment or to enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff in question
to the indemnified party and its affiliates a release of all liabilities in
respect of such claims, or that does not result only in the payment of money
damages by the indemnifying party. If the indemnifying party shall fail to
undertake such defense within 30 days after such notice, or within such shorter
time as may be reasonable under the circumstances, then the indemnified party
shall have the right to undertake the defense, compromise or settlement of such
liability or claim on behalf of and for the account of the indemnifying party.
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23.4 SURVIVAL OF INDEMNIFICATION OBLIGATIONS. Tenant's or
Landlord's liability for a breach of the provision of this Article 23 arising
during the Term hereof shall survive any termination of this Lease for a period
of one (1) year (i.e., meaning that Landlord or Tenant, as the case may be, must
give notice to the other of such claim prior to the expiration of said 1-year
period).
23.5 RISK OF LOSS. During the Term of this Lease, the risk of loss
or of decrease in the enjoyment and beneficial use of the Leased Property as a
consequence of the damage or destruction thereof by fire, the elements,
casualties, thefts, riots, wars or otherwise, or in consequence of foreclosures,
attachments, levies or executions (other than by Landlord and those claiming
from, through or under Landlord) is assumed by Tenant. In the absence of gross
negligence, willful misconduct or breach of this Lease by Landlord pursuant to
Section 26.3, Landlord shall in no event be answerable or accountable therefor
nor shall any of the events mentioned in this Section 23.5 entitle Tenant to any
abatement of Rent.
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ARTICLE 24
SUBLETTING AND ASSIGNMENT
24.1 PROHIBITION AGAINST SUBLETTING AND ASSIGNMENT. Subject to
Section 24.3, Tenant shall not, without the prior written consent of Landlord
(which consent Landlord may grant or withhold in its sole and absolute
discretion, except as hereinafter expressly provided), assign, mortgage,
pledge, hypothecate, encumber or otherwise transfer (except to an Affiliate of
Tenant) this Lease or any interest herein, all or any part of the Leased
Property or suffer or permit this Lease or the leasehold estate created hereby
or any other rights arising under this Lease to be assigned, transferred,
mortgaged, pledged, hypothecated or encumbered, in whole or in part, whether
voluntarily, involuntarily or by operation of law; provided, however, that
Landlord's consent to a proposed assignment of this Lease shall not be withheld
if, as of the date of such assignment (a) the proposed assignee shall also be
the assignee of all Other Property Leases, in accordance with the terms and
conditions for assignment set forth therein, (b) the proposed assignee
(together with any proposed guarantor(s) of the proposed assignee's
obligations under the Lease) has a net worth, as evidenced by audited financial
statements, of at least Thirty Million Dollars ($30,000,000.00) and (c) the
proposed assignee, together with its Affiliates, manages or operates at least
thirty (30) golf courses (hereinafter collectively called the "Minimum
Assignee Qualifications"). Landlord shall have a period of thirty (30) days
after delivery to it of a request for assignment together with the financial
and other information on the proposed assignee (and any proposed guarantors)
necessary for Landlord to evaluate whether the proposed assignee satisfies the
Minimum Assignee Qualifications and Landlord's failure to respond within thirty
(30) days of Landlord's receipt of a request for assignment and all required
information (as evidenced by a receipt signed and dated by Landlord) shall be
deemed Landlord's approval of said assignee and said assignment. Any notice
withholding consent must specify in detail the reasonable grounds for Landlord
so withholding its consent. For purposes of this Section 24.1, an assignment of
this Lease shall be deemed to include any Change of Control of Tenant, as if
such Change of Control were an assignment of this Lease.
24.2 CHANGES IN CONTROL. A Change of Control requiring the
consent of Landlord shall mean:
(a) the issuance and/or sale by Tenant or the sale by any
stockholder of Tenant of a Controlling interest in Tenant to a Person
other than an Affiliate of Tenant, other than in either case a
distribution to the public pursuant to an effective registration
statement under the Securities Act of 1933, as amended (a "Registered
Offering");
(b) the sale, conveyance or other transfer of all or
substantially all of the assets of Tenant (whether by operation of law
or otherwise);
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(c) any other transaction, or series of transactions,
which results in (i) ▇▇▇▇▇▇ Management no longer being the sole
managing member of Tenant or (ii) ▇▇▇▇▇▇ Management no longer owning,
directly or indirectly, beneficially at least fifty-one percent (51%)
of the voting and economic membership or ownership interests in Tenant,
or (iii) Affiliates of Tenant no longer having Control of Tenant (in
each such case, other than through a Registered Offering); or
(d) any transaction pursuant to which Tenant is merged
with or consolidated into another entity (other than an entity owned
and Controlled by an Affiliate of Tenant), and Tenant is not the
surviving entity;
provided, however, that Landlord shall not withhold its consent to a
proposed assignment of this Lease resulting from any proposed Change
of Control of Tenant, so long as (i) for a Change of Control under
Sections 24.2(b) or (d) above, the Person formed by or surviving such
transaction as the assignee of Tenant's interest hereunder satisfies
the "Minimum Assignee Qualifications" described in Section 24.1 above,
and (ii) for a Change of Control under Sections 24.2(a) or (c) above,
the Person obtaining control of Subtenant as a result of such
transaction, together with such Person's Affiliates, satisfies the
"Minimum Assignee Qualifications" described in Section 24.1 above.
24.3 SUBLEASES.
24.3.1 PERMITTED SUBLEASES. Tenant shall not assign this
Lease or sublet all or any part of the Leased Property without first
having obtained Landlord's prior written consent, at Landlord's sole
discretion. Notwithstanding the foregoing, Landlord agrees that it
shall not unreasonably withhold its consent to any requested sublease
of portions of the Leased Property to concessionaires or licensees to:
(a) operate golf professionals' shops;
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(b) operate golf driving ranges;
(c) provide golf lessons;
(d) operate restaurants;
(e) operate bars; and
(f) operate any other portions (but not the
entirety) of the Leased Property customarily associated with
or incidental to the operation of the Golf Course.
24.3.2 TERMS OF SUBLEASE. Each sublease of any of the Leased
Property shall be subject and subordinate to the provisions of this
Lease. No sublease made as permitted by Section 24.3.1 shall affect or
reduce any of the obligations of Tenant hereunder, and all such
obligations shall continue in full force and effect as if no sublease
had been made. No sublease shall impose any additional obligations on
Landlord under this Lease.
24.3.3 COPIES. Tenant shall, within 10 days after the
execution and delivery of any sublease permitted by Section 24.3.1,
deliver a duplicate original thereof to Landlord.
24.3.4 ASSIGNMENT OF RIGHTS IN SUBLEASES. As security for
performance of its obligations under this Lease, Tenant hereby grants,
conveys and assigns to Landlord all right, title and interest of Tenant
in and to all subleases now in existence or hereinafter entered into
for any or all of the Leased Property, and all extensions,
modifications and renewals thereof and all rents, issues and profits
therefrom. Landlord hereby grants to Tenant a license to collect and
enjoy all rents and other sums of money payable under any sublease of
any of the Leased Property; provided, however, that Landlord shall have
the absolute right at any time after the occurrence and during the
continuance of an Event of Default upon notice to Tenant and any
subtenants to revoke said license and to collect such rents and sums of
money and to retain the same. Tenant shall not (i) after the occurrence
and continuance of an Event of Default, consent to, cause or allow any
material modification or alteration of any of the terms, conditions or
covenants of any of the subleases or the termination thereof, without
the prior written approval of Landlord nor (ii) accept any rents (other
than customary security deposits) more than 90 days in advance of the
accrual thereof nor permit anything to be done, the doing of which, nor
omit or refrain from doing anything, the omission of which, will or
could be a breach of or default in the terms of any of the subleases.
24.3.5 LICENSES, ETC. For purposes of Sections 24.1, 24.3
and 24.5, subleases shall be deemed to include any licenses, concession
arrangements, management contracts
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or other arrangements relating to the possession or use of all or any
part of the Leased Property.
24.4 ASSIGNMENT. Upon any assignment permitted under this Lease
(either as a matter of right or with Landlord's consent), the assignee shall
expressly assume, for the benefit of Landlord, all obligations and liabilities
of Tenant hereunder arising from and after the effective date of such
assignment, whereupon the assignor shall, from and after the effective date of
such assignment, be relieved of all liability for any obligations arising from
and after said effective date. No consent to any assignment in a particular
instance shall be deemed to be a waiver of the prohibition set forth in Article
24. Any assignment or other transfer of all or any portion of Tenant's interest
in the Lease in contravention of Article 24 shall be voidable at Landlord's
option. All terms and conditions of this Lease shall continue to apply from and
after the effective date of such assignment (including, without limitation, the
terms of Sections 16.1(j) and 16.1(k) hereof).
24.5 REIT LIMITATIONS. Anything contained in this Lease to the
contrary notwith standing, Tenant shall not (i) sublet or assign the Leased
Property or this Lease on any basis such that the rental or other amounts to be
paid by the subtenant or assignee thereunder would be based, in whole or in
part, on the income or profits derived by the business activities of the
subtenant or assignee; (ii) sublet or assign the Leased Property or this Lease
to any Person in which Landlord owns, directly or indirectly (by applying
constructive ownership rules set forth in Section 856(d)(5) of the Code), a 10%
or greater interest; or (iii) sublet or assign the Leased Property or this Lease
in any other manner or otherwise derive any income which could cause any portion
of the amounts received by Landlord pursuant to this Lease or any sublease to
fail to qualify as "rents from real property" within the meaning of Section
856(d) of the Code, or which could cause any other income received by Landlord
to fail to qualify as income described in Section 856(c)(2) of the Code. The
requirements of this Section 24.5 shall likewise apply to any further subleasing
by any subtenant.
ARTICLE 25
OFFICER'S CERTIFICATES AND OTHER STATEMENTS
25.1 OFFICER'S CERTIFICATES. At any time, and from time to time
upon Tenant's receipt of not less than 10 days' prior written request by
Landlord, Tenant will furnish to Landlord an Officer's Certificate certifying
that:
(a) this Lease is unmodified and in full force and
effect (or that this Lease is in full force and effect as modified and
setting forth the modifications);
(b) the dates to which the Rent has been paid;
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(c) whether or not, to the best knowledge of Tenant,
Landlord is in default in the performance of any covenant, agreement or
condition contained in this Lease and, if so, specifying each such
default of which Tenant may have knowledge;
(d) that, except as otherwise specified, there are no
proceedings pending or, to the knowledge of the signatory, threatened,
against Tenant before or by any court or administrative agency which,
if adversely decided, would materially and adversely affect the
financial condition and operations of Tenant; and
(e) responding to such other questions or statements of
fact as Landlord or any Facility Mortgagee shall reasonably request.
Tenant's failure to deliver such statement within such time shall constitute an
acknowledgment by Tenant that this Lease is unmodified and in full force and
effect (except as may be represented to the contrary by Landlord), Landlord is
not in default in the performance of any covenant, agreement or condition
contained in this Lease and the other matters set forth in such request, if any,
are true and correct. Any such certificate furnished pursuant to this Section
25.1 may be relied upon by Landlord.
At any time, and from time to time upon Landlord's receipt of not less
than 30 days' prior written request by Tenant, Landlord will furnish to Tenant a
certificate, signed by a duly authorized representative of Landlord, certifying
that:
(a) This Lease is unmodified and in full force and
effect (or that this Lease is in full force and effect as modified and
setting forth the modification);
(b) the dates to which the Rent has been paid; and
(c) whether or not, to the best knowledge of Landlord,
Tenant is in default in the performance of any covenant, agreement or
condition contained in this Lease and, if so, specifying each such
default of which Landlord may have knowledge.
Landlord's failure to deliver such statement within such time shall constitute
an acknowledgement by Landlord that this Lease is unmodified and in full force
and effect (except as may be represented to the contrary by Tenant) and that
Tenant is not in default in the performance of any covenant, agreement or
condition contained in this Lease. Any such certificate furnished pursuant to
this Section 25.1 may be relied upon by Tenant.
25.2 FINANCIAL REPORTING. Tenant shall deliver to Landlord the
following items at the time or times hereinafter set forth:
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25.2.1 MONTHLY FINANCIAL INFORMATION. As soon as
practicable, and in any event on or before the thirtieth (30th) day
following the end of each calendar month during the Term, Tenant shall
furnish to Landlord unaudited balance sheets relative to Tenant and
relative to the Leased Property as of the end of such calendar month,
and income (including information on Capital Expenditures) and cash
flow statements for Tenant and the Leased Property for such calendar
month and on a year-to-date and trailing twelve (12) month basis,
certified as being true and correct in all material respects by Tenant.
25.2.2 QUARTER FINANCIAL INFORMATION. As soon as
practicable, and in any event within thirty (30) days after the end of
each Fiscal Quarter during the Term, Tenant shall furnish to Landlord
unaudited balance sheets of Tenant and of the Leased Property as of the
close of such Fiscal Quarter, together with income statements and
statements of cash flow for Tenant and for the Leased Property for such
Fiscal Quarter and on a year-to-date and trailing twelve (12) month
basis, in all cases setting forth in comparative form the figures for
the preceding corresponding periods, together with a statement of all
Capital Expenditures made during such Fiscal Quarter and a
reconciliation thereof with amounts deposited (or required to be
deposited) into the Capital Expenditure Reserve Account for such Fiscal
Quarter, all in detail and presentation reasonably acceptable to
Landlord. The foregoing quarterly financial information shall be
accompanied by a certificate of a duly authorized representative of
Tenant, dated within five (5) days of the delivery of such statement,
stating that (i) the authorized representative knows of no Event of
Default or event which, upon notice or the passage of time or both,
would become an Event of Default, or if any such event has occurred and
is continuing, specifying the nature and period of existence thereof
and what action Tenant has taken or proposes to take with respect
thereto, and (ii) except as otherwise specified in such certificate, to
the best of such representative's knowledge, Tenant and Landlord have
each fulfilled, in all material respects, all of their respective
obligations under this Lease which are required to be fulfilled on or
prior to the date of such certificate.
25.2.3 ANNUAL FINANCIAL STATEMENTS. As soon as practicable,
and in any event within ninety (90) days after the close of each Fiscal
Year during the Term, Tenant shall furnish to Landlord a copy of its
audited consolidated balance sheet and related audited consolidated
statement of income and audited statement of cash flow, in each case
with respect to Tenant and with respect to the Leased Property,
prepared in accordance with generally accepted accounting principles
consistently applied. The foregoing financial statements shall be
certified by a nationally recognized certified public accountants, or
such other accountants as may be reasonably acceptable to Landlord. All
such financial statements shall set forth, in comparative form, the
figures for the preceding Fiscal Year. The foregoing annual financial
statements shall be accompanied by an opinion of the foregoing
accountants to the effect that (a) there are no qualifications as to
the scope of the
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audit and (b) the audit was performed in accordance with generally
accepted accounting principles, consistently applied. The annual
financial statements required hereunder shall be accompanied by a
certificate of a duly authorized representative of Tenant, dated within
five (5) days of the delivery of such statement, stating that (i) the
representative knows of no Event of Default, or event which, upon
notice or the passage of time or both, would become an Event of
Default, or, if any such event has occurred and is continuing,
specifying the nature and period of existence therein and what action
Tenant has taken or proposes to take with respect thereto, and (ii)
except as otherwise specified in such certificate, to the best of such
representative's knowledge, Tenant and Landlord have each fulfilled, in
all material respects, all of their respective obligations under this
Lease which are required to be fulfilled on or prior to the date of
such certificate. The foregoing financial statements shall include a
statement of all Capital Expenditures made during such Fiscal Year and
a reconciliation thereof with amounts deposited (or required to be
deposited) into the Capital Expenditure Reserve Account for such Fiscal
Year.
25.2.4 OTHER INFORMATION. Tenant shall promptly furnish
Landlord such other information concerning the business being conducted
at the Leased Property and/or the financial condition of Tenant, as
Landlord may reasonably request from time to time during the Term.
25.2.5 STANDARD REPORTING FORMAT. Without limitation of the
reporting requirements described above in this Article 25, it is
understood and agreed that the monthly, quarterly and annual financial
delivery requirements shall include such information with respect to
the operations of the Leased Property as set forth on, and in
accordance with the reporting format provided in, Exhibit E attached
hereto.
25.3 ENVIRONMENTAL STATEMENTS. Immediately upon Tenant's learning,
or having reasonable cause to believe, that any Hazardous Material in a quantity
sufficient to require remediation or reporting under applicable law is located
in, on or under the Leased Property or any adjacent property, Tenant shall
notify Landlord in writing of the same, which notice shall include, to the
extent actually known to Tenant, (a) a statement, in reasonable detail, of any
enforcement, cleanup, removal, or other governmental or regulatory action
instituted, completed or threatened; (b) a statement, in reasonable detail, of
any claim made or threatened by any Person against Tenant or the Leased Property
relating to damage, contribution, cost recovery, compensation, loss, or injury
resulting from or claim to result from any Hazardous Material; and (c) any
reports made to any federal, state or local environmental agency arising out of
or in connection with any Hazardous Material in or removed from the Leased
Property, including any complaints, notices, warnings or asserted violations in
connection therewith.
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ARTICLE 26
LANDLORD MORTGAGES
26.1 LANDLORD MAY GRANT LIENS. Subject to Section 26.2, without the
consent of Tenant, Landlord may, from time to time, directly or indirectly,
create or otherwise cause to exist any lien, encumbrance or title retention
agreement ("Landlord's Encumbrance") upon the Leased Property, or any portion
thereof or interest therein, whether to secure any borrowing or other means of
financing or refinancing. Subject to Tenant's non-disturbance rights described
in Section 26.2 and to the other terms of this Article 26, this Lease is and at
all times shall be subject and subordinate to any ground or underlying leases
and the lien, terms, conditions and provisions of, and to each and every advance
heretofore or hereafter made under, any Facility Mortgages or other mortgages,
trust deeds or like encumbrances, which may now or hereafter affect the Leased
Property and to all renewals, modifications, consolidations, replacements and
extensions of any such lease, Facility Mortgage, other mortgage, trust deed or
like encumbrance. This clause shall be self-operative and no further instrument
of subordination shall be required by any ground or underlying lessor or by any
mortgagee or beneficiary, affecting any lease or the Leased Property. In
confirmation of such subordination, Tenant shall execute promptly any
certificate that Landlord may request for such purposes.
26.2 TENANT'S NON-DISTURBANCE RIGHTS. So long as Tenant shall pay
all Rent as the same becomes due and shall fully comply with all of the terms of
this Lease and fully perform its obligations hereunder, none of Tenant's rights
under this Lease shall be disturbed by the holder of any Facility Mortgage
(whether created before or after the Commencement Date) and any other Landlord's
Encumbrance which is created or otherwise comes into existence after the
Commencement Date.
26.3 BREACH BY LANDLORD. It shall be a breach of this Lease if
Landlord shall fail to observe or perform any material term, covenant or
condition of this Lease on its part to be performed and such failure shall
continue for a period of 30 days after notice thereof from Tenant, unless such
failure cannot with due diligence be cured within a period of 30 days, in which
case such failure shall not be deemed to continue if Landlord, within said
30-day period, proceeds promptly and with due diligence to cure the failure and
diligently completes the curing thereof. The time within which Landlord shall be
obligated to cure any such failure shall also be subject to extension of time
due to the occurrence of any Unavoidable Delay.
26.4 FACILITY MORTGAGE PROTECTION. Tenant agrees that the holder
of any Facility Mortgage or other Landlord Encumbrance shall have no duty,
liability or obligation to perform any of the obligations of Landlord under this
Lease (except for such obligations first occurring after such holder takes title
to the Leased Property), but that in the event of Landlord's default with
respect to any such obligation, Tenant will give any such holder whose name and
address
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have been furnished to Tenant in writing for such purpose notice of Landlord's
default and allow such holder thirty (30) days following receipt of such notice
for the cure of said default before invoking any remedies Tenant may have by
reason thereof. Such 30-day cure period shall be extended (including without
limitation such extensions as are necessary for such holder to take possession
of and/or foreclose upon the Leased Property) if the failure cannot be cured by
said holder within the foregoing 30-day period, so long as said holder proceeds
with due diligence to cure the failure. Nothing herein contained shall be
construed however, to obligate Facility Mortgagee to cure any default by
Landlord occurring prior to any date on which Facility Mortgagee shall succeed
to the rights of Landlord, it being expressly agreed that under no
circumstances shall Facility Mortgagee be obligated to remedy any such default.
26.5 ATTORNMENT. In the event that the interest of Landlord is
transferred by reason of or assigned in lieu of foreclosure, the exercise of a
power of sale or by any other proceedings or method for the enforcement of a
Facility Mortgage, then this Lease shall nevertheless continue in full force and
effect and, upon the request of Facility Mortgagee or Successor Owner (as
hereinafter defined), Tenant shall attorn to Facility Mortgagee or Successor
Owner and shall recognize such person as its landlord. Although the foregoing
provision shall be self-operative, in order to confirm such attornment, upon the
request of Facility Mortgagee or Successor Owner, Tenant shall execute and
deliver to Facility Mortgagee or Successor Owner (i) an agreement of attornment
in form and content reasonably satisfactory to Facility Mortgagee or Successor
Owner, confirming the foregoing attornment and agreeing to perform all the
terms, covenants and conditions of the Lease on Tenant's part to be performed
for the benefit of Facility Mortgagee or Successor Owner with the same force and
effect as if Facility Mortgagee or Successor Owner was the landlord originally
named in this Lease or (ii) a new lease with Facility Mortgagee or Successor
Owner, as landlord, for the remaining term of the Lease and otherwise on the
same terms and conditions and with the same options, if any, then remaining. For
purposes hereof, "Successor Owner" shall mean any Person who obtains the
interest of Landlord in the Leased Property pursuant to a foreclosure or
deed-in-lieu of foreclosure or power of sale (collectively, a "Facility Mortgage
Foreclosure") of a Facility Mortgage.
26.6 FACILITY MORTGAGEE OR SUCCESSOR OWNER AS LANDLORD. If Facility
Mortgagee or Successor Owner shall succeed to the interest of Landlord, neither
Facility Mortgagee nor Successor Owner nor any successor thereto (herein, in
each case, a "Successor Landlord") shall have any personal liability as
successor to Landlord, and Tenant shall look only to the estate and property of
said Successor Landlord in the Leased Property or the proceeds thereof for the
satisfaction of Tenant's remedies for the collection of a judgment (or other
judicial process) requiring the payment of money in the event of any default by
such Successor Landlord as landlord under the Lease. In addition, Facility
Mortgagee, as holder of the Facility Mortgage, and each Successor Landlord, as
landlord under the Lease when it succeeds to that position, shall in no event
(i) be liable to Tenant for any act or omission of the "Landlord" existing
immediately prior to the Facility Mortgage Foreclosure (the "Foreclosure
Landlord") or any landlord prior to such Foreclosure Landlord, (ii) be subject
to any offset or defense which Tenant might have against the Foreclosure
Landlord or any landlord prior to
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such Foreclosure Landlord, (iii) be liable to Tenant for any liability
or obligation of the Foreclosure Landlord or any landlord prior to such
Foreclosure Landlord, occurring prior to the date that the Successor Landlord
acquires title to the Leased Property, or (iv) be liable to Tenant for any
security or other deposits given to secure the performance of Tenant's
obligation under the Lease, except to that extent that Facility Mortgagee or
Successor Owner shall have acknowledged actual receipt of such security or other
deposits in writing. No other property or assets of a Successor Landlord shall
be subject to levy, execution or other enforcement procedure for the
satisfaction of Tenant's remedies under or with respect to this Lease, the
relationship of the landlord and the tenant thereunder or Tenant's use or
occupancy of the Leased Property.
26.7 PREPAYMENTS AND MODIFICATIONS OF THE LEASE. No prepayment of
Rent due under this Lease of more than one month in advance shall be binding
upon Successor Owner or Facility Mortgagee, as holder of the Facility Mortgage
or as landlord under this Lease if Facility Mortgagee succeeds to that position,
unless consented to by Facility Mortgagee, and from and after the date hereof,
no amendment, modification, surrender or cancellation of the Lease shall be
binding upon Successor Owner or Facility Mortgagee, as holder of the Facility
Mortgage or as landlord under this Lease if Facility Mortgagee succeeds to that
position, unless such amendment, modification, surrender or cancellation is done
in compliance with the terms of the Facility Mortgage.
ARTICLE 27
MISCELLANEOUS
27.1 LANDLORD'S RIGHT TO INSPECT. Tenant shall permit Landlord and
its authorized representatives to inspect the Leased Property upon reasonable
written or oral notice during usual business hours subject to any security,
health, safety or confidentiality requirements of Tenant or any governmental
agency or insurance requirement relating to the Leased Property, or imposed by
law or applicable regulations. Landlord shall indemnify, defend and hold Tenant
harmless from and against all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against Tenant by reason of Landlord's inspection pursuant to this Section 27.1.
27.2 NO WAIVER. No failure by Landlord to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy
consequent upon a breach thereof, and no acceptance of full or partial payment
of Rent during the continuance of any such breach, shall constitute a waiver of
any such breach or of any such term. To the extent permitted by law, no
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waiver of any breach shall affect or alter this Lease, which shall continue in
full force and effect with respect to any other then existing or subsequent
breach.
27.3 REMEDIES CUMULATIVE. To the extent permitted by law, each
legal, equitable or contractual right, power and remedy of Landlord now or
hereafter provided either in this Lease or by statute or otherwise shall be
cumulative and concurrent and shall be in addition to every other right, power
and remedy. The exercise or beginning of the exercise by Landlord of any one or
more of such rights, powers and remedies shall not preclude the simultaneous or
subsequent exercise by Landlord of any or all of such other rights, powers and
remedies.
27.4 ACCEPTANCE OF SURRENDER. No surrender to Landlord of this
Lease or of the Leased Property or any part thereof, or of any interest therein,
shall be valid or effective unless agreed to and accepted in writing by Landlord
and no act by Landlord or any representative or agent of Landlord, other than
such a written acceptance by Landlord, shall constitute an acceptance of any
such surrender.
27.5 NO MERGER OF TITLE. There shall be no merger of this Lease or
of the leasehold estate created hereby by reason of the fact that the same
Person may acquire, own or hold, directly or indirectly, (a) this Lease or the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate and (b) the fee estate in the Leased Property.
27.6 CONVEYANCE BY LANDLORD. If Landlord shall convey the Leased
Property in accordance with the terms hereof other than as security for a debt,
Landlord shall, upon the written assumption by the transferee of the Leased
Property of all liabilities and obligations of Landlord under this Lease arising
after the transfer, be released from all future liabilities and obligations
under this Lease arising or accruing from and after the date of such conveyance
or other transfer as to the Leased Property. All such future liabilities and
obligations shall thereupon be binding upon the new owner.
27.7 QUIET ENJOYMENT. So long as Tenant shall pay all Rent as the
same becomes due and shall fully comply with all of the terms of this Lease and
fully perform its obligations hereunder, Tenant shall peaceably and quietly
have, hold and enjoy the Leased Property for the Term hereof, free of any claim
or other action by Landlord or anyone claiming by, through or under Landlord,
but subject to all liens and encumbrances of record as of the date hereof or
otherwise permitted hereunder, and subject to any Landlord's Encumbrances.
27.8 NOTICES. All notices, demands, requests, consents, approvals
and other communi cations hereunder shall be in writing and personally
delivered, or mailed (by registered or certified mail, return receipt requested
and postage prepaid), or sent by nationally recognized overnight courier, in
each case addressed to the respective parties, as provided in the Basic Lease
Provisions. Notices shall be deemed to have been given (i) upon delivery, if
personally delivered, or (ii) upon the
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third (3rd) Business Day after mailing by registered or certified mail, or
(iii) upon the first (1st) Business Day after delivery to an overnight courier.
27.9 SURVIVAL OF CLAIMS. Anything contained in this Lease to the
contrary notwithstanding, all claims against, and liabilities of, Tenant or
Landlord arising prior to any date of termination of this Lease shall survive
such termination.
27.10 INVALIDITY OF TERMS OR PROVISIONS. If any term or provision of
this Lease or any application thereof shall be invalid or unenforceable, the
remainder of this Lease and any other application of such term or provision
shall not be affected thereby.
27.11 PROHIBITION AGAINST USURY. If any late charges provided for in
any provision of this Lease are based upon a rate in excess of the maximum rate
permitted by applicable law, the parties agree that such charges shall be fixed
at the maximum permissible rate.
27.12 AMENDMENTS TO LEASE. Neither this Lease nor any provision
hereof may be changed, waived, discharged or terminated except by an instrument
in writing signed by Landlord or Tenant.
27.13 SUCCESSORS AND ASSIGNS. All the terms and provisions of this
Lease shall be binding upon and inure to the benefit of the parties hereto. All
permitted assignees or sublessees shall be subject to the terms and provisions
of this Lease.
27.14 TITLES. The headings in this Lease are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
27.15 GOVERNING LAW. This Lease shall be governed by and construed
in accordance with the laws of the State of Commonwealth of Virginia.
27.16 MEMORANDUM OF LEASE. This Lease shall not be recorded by
either Landlord or Tenant. Notwithstanding the foregoing, Landlord and Tenant
shall, promptly upon the request of either, enter into a short form memorandum
of this Lease, in form and substance satisfactory to Landlord and suitable for
recording under the State, in which reference to this Lease, and all options
contained herein, shall be made. Tenant shall pay all costs and expenses of
recording such Memorandum of Lease.
27.17 ATTORNEYS' FEES. In the event of any dispute between the
parties hereto involving the covenants or conditions contained in this Lease or
arising out of the subject matter of this Lease, the prevailing party shall be
entitled to recover against the other party reasonable attorneys' fees and court
costs.
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27.18 NON-RECOURSE AS TO LANDLORD. Anything contained herein to the
contrary notwithstanding, any claim based on or in respect of any liability of
Landlord under this Lease shall be enforced only against Landlord's interest in
the Leased Property and not against any other assets, properties or funds of (a)
Landlord, (b) any director, officer, general partner, limited partner, employee
or agent of Landlord, or any general partner of Landlord, any of their
respective general partners or stockholders (or any legal representative, heir,
estate, successor or assign of any thereof), (c) any predecessor or successor
partnership or corporation (or other entity) of Landlord, or any of their
respective general partners, either directly or through either Landlord or their
respective general partners of any predecessor or successor partnership or
corporation or their stockholders, officers, directors, employees or agents (or
other entity), or (d) any other Person affiliated with any of the foregoing, or
any director, officer, employee or agent of any thereof.
27.19 NO RELATIONSHIP. Landlord shall in no event be construed for
any purpose to be a partner, joint venturer or associate of Tenant or of any
subtenant, operator, concessionaire or licensee of Tenant with respect to the
Leased Property or any of the Other Leased Property or otherwise in the conduct
of their respective businesses.
27.20 SIGNS; RELETTING. If Tenant fails to timely exercise its
option to extend or further extend the Term under Section 2.2 or if an Event of
Default occurs and is continuing, then Landlord shall have the right during the
remainder of the Term then in effect (i) to advertise the availability of the
Leased Property for sale or reletting and to erect upon the Leased Property
signs indicating such availability and (ii) to show the Leased Property to
prospective purchasers or tenants or their agents at such reasonable times as
Landlord may elect.
27.21 GOLF COURSE NAME. The Leased Property shall be known by such
trade name and/or trademark or logo as may from time to time be determined by
Landlord.
ARTICLE 28
TENANT MORTGAGES
Tenant shall not, directly or indirectly, mortgage, pledge,
hypothecate, create a security interest in or lien on, or otherwise encumber its
interest in the Lease without the prior written consent of Landlord and each
Facility Mortgagee, which consent may be withheld in the sole and absolute
discretion of each such party.
ARTICLE 29
INTENTIONALLY OMITTED
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ARTICLE 30
TENANT'S STRUCTURE
The parties hereto acknowledge and agree that ▇▇▇▇▇▇ ▇▇▇▇▇▇ Golf
Management LLC, a Delaware limited liability company ("▇▇▇▇▇▇ Management"), is
currently, and so long as the original name of Tenant remains the "Tenant"
hereunder shall continue to be, the managing member of the original named Tenant
hereunder.
ARTICLE 31
RIGHT OF FIRST OFFER
If Landlord desires to sell the Leased Property to a third party
purchaser at any time during the Term (other than in connection with a
foreclosure or deed in lieu of foreclosure of, or power of sale under, any
Facility Mortgage), then, prior to selling, or entering into a binding agreement
to sell the Leased Property to such third party purchaser, Landlord shall
deliver written notice to Tenant (herein, "Landlord's Notice") setting forth (i)
the proposed closing date (which date shall be no less than sixty (60) days and
no more than one hundred eighty (180) days following the date of said Landlord's
Notice), and (ii) the proposed purchase price at which Landlord desires to sell
the Leased Property, and Tenant shall thereupon have a right of first offer
(herein, the "First Offer Right") to purchase the Leased Property in accordance
with the following terms and conditions.
31.1 EXERCISE OF FIRST OFFER RIGHT. Upon Tenant's receipt of any
such Landlord's Notice, Tenant shall have a period of twenty-one (21) days
following receipt of such Landlord's Notice (herein, "Tenant's Election Period")
to exercise Tenant's First Offer Right hereunder. If Tenant so exercises its
First Offer Right, then the Leased Property shall be sold to Tenant upon the
terms hereinafter set forth. In the event Tenant fails to notify Landlord, in
writing, within Tenant's Election Period, that Tenant has exercised its First
Offer Right hereunder, then Tenant's rights under this Article 31, shall
terminate and be null and void, and Landlord shall have no further obligation
under this Article 31; provided, however, that in the event Landlord thereafter
fails to close on any sale of the Leased Property within a period of one hundred
eighty (180) days following the expiration of Tenant's Election Period (as such
period may be extended, if Landlord is then under contract to sell the Leased
Property to a third party purchaser, which extension shall continue until the
termination of such contract or the closing of the sale thereunder, whichever
first occurs), then Tenant shall thereafter again have a First Offer Right with
respect to the Leased Property as provided in this Article 31. Additionally, if
the purchase price at which Landlord subsequently elects to sell the Leased
Property to a third party is less than ninety percent (90%) of the purchase
price set forth in Landlord's Notice, then Tenant's First Offer Right shall be
reinstated, and, prior to Landlord selling or entering into a binding agreement
to sell, the Leased
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Property at such lower price, Landlord shall deliver a new Landlord's Notice
to Tenant reflecting the new offered purchase price, all in accordance with the
terms of this Article 31.
31.2 FURTHER DOCUMENTATION. If Tenant has validly exercised its
First Offer Right, then within fifteen (15) Business Days after the request by
either party and determination of the purchase price as described below,
Landlord and Tenant shall enter into a written agreement confirming the terms,
conditions and provisions applicable to the sale of the Leased Property,
including the proposed closing date and purchase price with respect to such
transaction and the other terms set forth in Landlord's Notice or otherwise
provided for in this Article 31. Each party further agrees to execute such
documents and to take such actions as may be reasonably requested by the other
party in order to effectuate the sale transaction contemplated by any such
Landlord's Notice.
31.3 PURCHASE PRICE. The purchase price of the Leased Property
under this Article 31 shall be the price set forth in Landlord's Notice, subject
to modification as described in the last sentence of Section 31.1.
31.4 MECHANICS OF PURCHASE. If Tenant's First Offer Right hereunder
is exercised, the following closing procedure shall apply:
(a) The closing date ("Closing Date") for the sale of the
Leased Property to Tenant shall be on the date set forth in Landlord's
Notice. Payment of the purchase price and the delivery of the deed (the
"Closing") shall be made at the office of Landlord or its attorneys or
at such other place as the parties may agree. At the request of either
party, the Closing shall be effected through a deed and money escrow,
the cost of which escrow shall be borne equally by Landlord and Tenant.
The purchase price shall be payable to Landlord on the Closing Date in
immediately available funds or by certified or cashier's check upon
delivery of the applicable assignment document(s) to Tenant and
performance of Landlord's other obligations as set forth herein.
(b) The sale of the Leased Property shall be made by
recordable deed to Tenant (or its designee) and other documentation
necessary to transfer the Leased Property to Tenant, provided that
Tenant shall accept the Leased Property subject only to (A) the lien of
current general real estate taxes and special assessments not then due
and payable; (B) any acts or doings caused or suffered by Tenant; (C)
private, public and utility easements and roads and highways, if any;
(D) covenants, conditions and restrictions of record; (E) existing
leases and tenancies; and (F) such other liens and encumbrances which
were in effect on the date that Landlord obtained the Leased Property
or which are otherwise permitted to be imposed on the Leased Property
pursuant to the terms hereof (collectively, the "Permitted Title
Exceptions").
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(c) Landlord shall deliver or cause to be delivered to
Tenant, not later than twenty (20) days prior to the Closing, as
evidence of Landlord's interest in the Leased Property, a commitment
for a standard owner's title insurance policy in the aggregate amount
of the purchase price as provided hereunder. Such title commitment
shall name Tenant or its designee as the proposed insured and show
Landlord as holding a fee interest in the Leased Property, subject only
to (a) the Permitted Title Exceptions, and (b) other title exceptions
pertaining to mortgage liens of a definite or ascertainable amount
which may be removed at Closing by the payment of money, and which
Landlord shall so remove or cause to be removed concurrently with the
Closing.
(d) The payment of all prorations, transfer taxes, title
insurance charges, escrow fees, recording fees and other expenses, fees
and charges shall be made by the party from whom such payment is due in
accordance with statutory requirements or in accordance with the custom
at the time of the Closing for sales of properties similar to the
Leased Property located in the geographical area where the Leased
Property is located; provided, however, that there shall be no
proration of Impositions inasmuch as Tenant is fully responsible
therefor under this Lease.
(e) Landlord's interest in the Leased Property shall be
transferred to Tenant under this Article 31 in its as-is condition, it
being acknowledged that Landlord has made and shall make no
representations whatsoever as to the condition of said Leased Property
or any other matters pertaining thereto.
31.5 REIT QUALIFICATION LIMITATION. Notwithstanding any other
provision of this Lease, Landlord shall not be required to sell or transfer the
Leased Property, or any portion thereof, which is a real estate asset as defined
in Section 856(c)(6)(B), or functionally equivalent successor provision, of the
Code, to Tenant if Landlord's counsel advises Landlord that such sale or
transfer may not be a sale of property described in Section 857(b)(6)(C), or
functionally equivalent successor provision, of the Code. If Landlord determines
not to sell such property pursuant to the above sentence, Tenant's First Offer
Right under this Article 31 shall continue in full force and effect.
31.6 EFFECTIVENESS OF FIRST OFFER RIGHT. The First Offer Right
described in this Article 31 is for the personal benefit of the original named
Tenant hereunder, and such right is non-assignable and may not be exercised by
any other party. Without limitation of the foregoing, in the event Tenant
assigns this Lease or subleases all or greater than fifty percent (50%) of the
area of the Leased Property, then Tenant's First Offer Right under this Article
31 shall thereupon terminate and be deemed null and void. Tenant shall have no
right to exercise its First Offer Right under this Article 31, and any such
exercise shall (at Landlord's election) be null and void, if, at the time of
such exercise or as of the Closing Date, Tenant shall be in default of any of
its obligations hereunder.
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[Signature Page to Follow]
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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the date and year first above written.
LANDLORD:
PRESIDIO GOLF LIMITED PARTNERSHIP, a
Delaware limited partnership
By:_______________________________________________
Name:_____________________________________________
Its:______________________________________________
TENANT:
__________________________________________________
a ________________________________________________
By:_______________________________________________
Name:_____________________________________________
Its:______________________________________________
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JOINDER
The undersigned, being the managing member of Tenant, hereby joins in
the execution of the foregoing Lease, for the purposes of (A) agreeing to the
terms of the Lease with respect to (i) any and all provisions in the Lease
relating to Tenant's Personal Property (some or all of which may be owned by the
undersigned), and (ii) any and all provisions in the Lease relating to the
Collateral Agreements (some or all of which may be entered into by the
undersigned), and (B) agreeing to be liable under the Lease, on a joint and
several basis with Tenant, for all remediation and indemnification obligations
under Section 8.2 and Section 8.3 of the Lease, to the extent relating to any
Hazardous Material located at the Leased Property and expressly identified in
any of the Existing Environmental Reports.
IN WITNESS WHEREOF, this Joinder is executed as of the ____ day of
________, 199__.
▇▇▇▇▇▇ ▇▇▇▇▇▇ GOLF
MANAGEMENT LLC, a Delaware limited
liability company
By: ______________________________________
Name:_________________________________
Its:__________________________________
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EXHIBIT A
DEFINED TERMS; INTERPRETATION
DEFINED TERMS. For all purposes of this Lease, except as otherwise
expressly provided or unless the context otherwise requires, the terms defined
below have the meanings assigned to them below.
ADDITIONAL CHARGES: As defined in Section 3.4.
ADDITIONAL RENT: As defined in Basic Lease Provisions.
AFFILIATE: As applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person.
ANNUAL BASE RENT: As defined in the Basic Lease Provisions.
APPLICABLE PERCENTAGE: As defined in the Basic Lease Provisions.
AWARD: Means all compensation, sums or anything of value awarded,
paid or received on a total or partial Condemnation.
BASELINE GOLF COURSE REVENUE: As defined in the Basic Lease
Provisions.
BASELINE OTHER REVENUE: As defined in the Basic Lease Provisions.
BASE RENT: Means the proportion of the Annual Base Rent payable with
respect to each respective calendar month as described in Exhibit F attached
hereto.
BASE RENT ESCALATION: As defined in the Basic Lease Provisions.
BASIC LEASE PROVISIONS: The provisions so labelled starting on page
(1) of this Lease.
BUSINESS DAY: Each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which national banks in the City of Fairfax, Virginia, are
authorized, or obligated, by law or executive order, to close.
CALCULATION PERIOD: As defined in Section 18.2.
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇: Means all expenditures for capital investment
items at the Leased Property, to the extent such expenditures are to be
"capitalized" under general accepted accounting principles.
CAPITAL EXPENDITURES RESERVE ACCOUNT: As defined in Section 18.2.
CAPITAL EXPENDITURES RESERVE AMOUNT: As defined in Section 18.2.
CHANGE OF CONTROL: As defined in Section 24.2.
CLOSING: As defined in Section 31.4.
CLOSING DATE: As defined in Section 31.4.
CODE: The Internal Revenue Code of 1986, as amended.
COMMENCEMENT DATE: As defined in the Basic Lease Provisions.
CONDEMNATION: Means (a) the exercise of any governmental power, whether
by legal proceedings or otherwise, by a Condemnor, and (b) a voluntary sale or
transfer by Landlord to any Condemnor, either under threat of condemnation or
while legal proceedings for condemnation are pending.
CONDEMNATION THRESHOLD: Means, as of any given date, an amount
determined by dividing (i) the aggregate Base Rent and Additional Rent under
this Lease for the most recent 12 full calendar months by (ii) the average
dividend yield for such 12 month period on the common stock then issued and
outstanding of Landlord's general partner.
CONDEMNOR: Means any public or quasi-public authority, or private
corporation or individual, having the power of condemnation.
CONSUMER PRICE INDEX: Means the Consumer Price Index for Urban Wage
Earners and Clerical Workers for the Fairfax, Virginia area, as reported by the
United States Bureau of Labor Statistics or any successor agency.
CONTROL: Means (including, with correlative meanings, the terms
"controlling" and "controlled by"), as applied to any Person, the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through the ownership of voting
securities, by contract or otherwise.
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DATE OF TAKING: Means the date the Condemnor has the right to
possession of the property being condemned.
EBITDA: The net income from the Leased Property for the period at
issue, as determined in accordance with generally accepted accounting principles
consistently applied, excluding gains (or losses) from debt restructuring and
sales of property and other ordinary items, and without any reductions for (i)
depreciation or amortization, (ii) interest expense, (iii) federal or state
income taxes, or (iv) non-property specific entity-level overhead and
administrative expenses. Notwithstanding the foregoing, it is understood that,
in computing net income, (i) Golf Course Revenue and (ii) Other Revenue shall be
included as part of total revenue.
ENVIRONMENTAL LAW: Means all applicable statutes, regulations, rules,
ordinances, codes, licenses, permits, orders, demands, approvals, authorizations
and similar items of all governmental agencies, departments, commissions,
boards, bureaus or instrumentalities of the United States, states and political
subdivisions thereof and all applicable judicial, administrative and regulatory
decrees, judgments and orders relating to the protection of human health or the
environment as in effect on the Commencement Date or as thereafter amended,
including but not limited to those pertaining to reporting, licensing,
permitting, investigation, removal and remediation of emissions, discharges,
releases or threatened releases of "Hazardous Materials," substances,
pollutants, contaminants or hazardous or toxic substances, materials or wastes
whether solid, liquid or gaseous in nature, into the air, surface water, ground
water or land, or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of substances, pollutants,
contaminants or hazardous or toxic substances, materials, or wastes, whether
solid, liquid or gaseous in nature, including: (x) the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. ▇▇.▇▇. 9601 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. ▇▇.▇▇. 6901 et
seq.), the Clean Air Act (42 U.S.C. ▇▇.▇▇. 7401 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. ss. 1251 et seq.), the Safe Drinking Water Act
(42 U.S.C. ▇▇.▇▇. 300f et seq.), the Toxic Substances Control Act (15 U.S.C.
▇▇.▇▇. 2601 et seq.), the Endangered Species Act (16 U.S.C. ▇▇.▇▇. 1531 et
seq.), the Emergency Planning and Community Right-to-Know Act of 1986 (42 U.S.C.
▇▇.▇▇. 11001 et seq.), and (y) analogous state and local provisions.
EVENT OF DEFAULT: As defined in Section 16.1.
EXISTING ENVIRONMENTAL REPORTS: As defined in Section 8.1.1.
EXTENDED TERMS: As defined in the Basic Lease Provisions.
FACILITY: As defined in the Basic Lease Provisions.
FACILITY MORTGAGE: As defined in Section 13.1.
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FACILITY MORTGAGE FORECLOSURE: Ad defined in Section 26.5.
FACILITY MORTGAGEE: Means the holder or beneficiary of a Facility
Mortgage, if any, and only to the extent Landlord gives Tenant notice of the
identity and address of such holder or beneficiary.
FIRST OFFER RIGHT: As defined in Article 31.
FISCAL QUARTER: The three-month periods (or applicable portions
thereof) in any Fiscal Year from January 1 through March 31, April 1 through
June 30, July 1 through September 30 and October 1 through December 31.
FISCAL YEAR: As defined in the Basic Lease Provisions.
FIXTURES: Means all permanently affixed equipment, machinery, fixtures,
and other items of real and/or personal property, including all components
thereof, now and hereafter located in, on or used in connection with and
permanently affixed to or incorporated into the Leased Improvements, including
all furnaces, boilers, heaters, electrical equipment, heating, plumbing,
lighting, ventilating, refrigeration, air and water pollution control, waste
disposal, air-cooling and air-conditioning systems and apparatus, sprinkler
systems and fire and theft protection equipment, all of which, to the greatest
extent permitted by law, are hereby deemed by the parties hereto to constitute
real estate, together with all replacements, modifications, alterations and
additions thereto, but specifically excluding all items included within the
category of Tenant's Personal Property and any Tenant Improvements.
FORECLOSURE LANDLORD: As defined in Section 26.6.
FULL REPLACEMENT COST: Means the actual replacement cost thereof from
time to time including increased cost of construction endorsement, less
exclusions provided in the normal fire insurance policy.
▇-▇
▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇: Means all revenues received (whether by Tenant or
any subtenants, concessionaires, licensees, assignees or other party) from or by
reason of the operation of the Facility, or any other use of the Leased
Property, including revenues from the initial sale of memberships (to the extent
that membership was sold after the Commencement Date), initiation fees (to the
extent that membership was sold after the Commencement Date) membership or other
dues, greens fees, fees to reserve a tee time, golf-related guest fees or golf
cart rentals, and surcharges, fees or other charges paid to Tenant relating to
golf tournaments or other group outings or group activities at the Leased
Property (unless the terms under which Tenant is paid by such sponsor do not
comply with Section 24.5, in which event the gross revenues received by such
sponsor for the tournament shall be included in Golf Course Revenue); provided,
however, that Golf Course Revenue shall not include:
(a) Other Revenue;
(b) Cash refunds or credits allowed on returns by
customers;
(c) The amount of any city, county, state or federal
sales or excise tax on sales, which is both added to the selling price
and paid to the taxing authority by Tenant.
(d) The actual uncollectible amount of any check or bank
draft received by Tenant as payment for goods or services and returned
to Tenant from a customer's bank as being uncollectible, but only after
Tenant has made reasonable efforts to collect on the check;
(e) The actual uncollectible amount of any charge or
credit account incurred by Tenant for the sale of merchandise or
services; provided, however, that the credit was extended to the
customer by Tenant, and that reasonable efforts to collect said account
have been made;
(f) The actual uncollectible amount of any sale of
merchandise or services for which Tenant accepted a credit card;
provided, however, that Tenant has made reasonable efforts to collect
the debt after being notified by the issuing bank of the invalidity or
uncollectability of the charge;
(g) Interest or other charges paid by customers for
extension of credit;
(h) Revenue or proceeds from sales or trade-in of
machinery, vehicles, trade fixtures or personal property used in
connection with Tenant's operation of the Leased Property;
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(i) The value of any merchandise, supplies or equipment
exchanged or transferred from or to other locations or businesses of
Tenant where such exchange or transfer is not made for the purpose of
avoiding a sale which would otherwise be made from or at the Leased
Property;
(j) Revenue, if any, from receipts in the form of
refunds from or the value of merchandise, supplies or equipment
returned to shippers, suppliers or manufacturers;
(k) Revenue, if any, from the amount of any cash or
quantity discounts received from sellers, suppliers or manufacturers;
(l) The amount of any gratuities paid or given by
customers to or for employees of Tenant;
(m) Receipts from the sales of uniforms or clothing
required to be worn by employees;
(n) Revenues from charging employees for meals served or
provided to employees of Tenant;
(o) Receipts from the sale of waste or scrap materials
resulting from Tenant's operations; and
(p) Revenue received from any subtenant, concessionaire
or licensee, inasmuch as the gross revenue received by such subtenant,
concessionaire or licensee is otherwise included in the definition of
Golf Course Revenue or Other Revenue.
HAZARDOUS MATERIAL: Means any chemical substance:
(i) the presence of which requires investigation or
remediation under any federal, state or local statute, regulation,
ordinance, order, action or policy, administrative request or civil
complaint under any of the foregoing or under common law;
(ii) which is defined as a "hazardous waste" or "hazardous
substance" under any federal, state or local statute, regulation or
ordinance or amendments thereto as in effect as of the Commencement
Date, or as thereafter amended, including the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C.
▇▇.▇▇. 6901 et seq.);
(iii) which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous
and as of the Commencement Date, or
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as thereafter amended, is regulated by any governmental authority,
agency, department, commission, board, agency or instrumentality of
the United States, or any state or any political subdivision thereof
having or asserting jurisdiction over the Leased Property;
(iv) the presence of which on any of the Leased Property
causes a nuisance upon such Leased Property or to adjacent properties
or poses a hazard to the health or safety of persons on or about any of
the Leased Property;
(v) which, except as contained in building materials,
contains gasoline, diesel fuel or other petroleum hydrocarbons,
polychlorinated biphenyls (PCBs) or friable asbestos or friable
asbestos-containing materials or urea formaldehyde foam insulation; or
(vi) radon gas.
IMPARTIAL APPRAISER: As defined in Section 13.2.
IMPOSITIONS: Means collectively:
(a) all taxes (including all real and personal property,
ad valorem, sales and use, single business, gross receipts, transaction
privilege, rent or similar taxes);
(b) assessments and levies (including all assessments for
public improvements or benefits, whether or not commenced or completed
prior to the date hereof and whether or not to be completed within the
Term);
(c) excises;
(d) fees (including license, permit, inspection,
authorization and similar fees); and
(e) all other governmental charges;
in each case whether general or special, ordinary or extraordinary, or foreseen
or unforeseen, of every character in respect of the Leased Property and/or the
Rent (including all interest and penalties thereon due to any failure in payment
by Tenant), which at any time during or in respect of the term hereof may be
assessed or imposed on or in respect of or be a lien upon (i) Landlord or
Landlord's interest in the Leased Property; (ii) the Leased Property or any part
thereof or any rent therefrom or any estate, right, title or interest therein;
or (iii) any operation, use or possession of, or sales from or activity
conducted on or in connection with the Leased Property or the leasing or use of
the Leased Property or any part thereof; provided, however, that Impositions
shall not include:
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(aa) any tax based on net income (whether denominated as
an income, franchise, capital stock or other tax) imposed on Landlord
or any other Person other than Tenant;
(bb) any transfer, or net revenue tax of Landlord or any
other Person other than Tenant;
(cc) any tax imposed with respect to the sale, exchange
or other disposition by Landlord of any Leased Property or the proceeds
thereof; or
(dd) any tax imposed with respect to any principal or
interest on any indebtedness on the Leased Property.
IMPOUND CHARGES: As defined in Article 22.
IMPOUND PAYMENT: As defined in Article 22.
INITIAL BASE RENT: As defined in the Basic Lease Provisions.
INITIAL TERM: As defined in the Basic Lease Provisions.
INSURANCE REQUIREMENTS: All terms of any insurance policy required by
this Lease and all requirements of the issuer of any such policy.
LAND: As defined in Article 1.
LANDLORD: As defined in the preamble.
LANDLORD'S ENCUMBRANCE: As defined in Section 26.1.
LANDLORD'S NOTICE: As defined in Article 31.
LANDLORD'S PERSONAL PROPERTY: As defined in Article 1.
LANDLORD'S NOTICE. As defined in Section 28.1.
LEASE: As defined in the preamble.
LEASED IMPROVEMENTS: As defined in Article 1.
LEASED PROPERTY: As defined in Article 1.
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LEGAL REQUIREMENTS: All federal, state, county, municipal and other
governmental statutes, laws (including the Americans with Disabilities Act and
any Environmental Laws), rules, orders, regulations, ordinances, judgments,
decrees and injunctions affecting either the Leased Property or the
construction, use or alteration thereof, whether now or hereafter enacted and in
force, including any which may (i) require repairs, modifications or alterations
in or to the Leased Property; (ii) in any way adversely affect the use and
enjoyment thereof, and all permits, licenses and authorizations and regulations
relating thereto, and all covenants, agreements, restrictions and encumbrances
contained in any instruments, either of record or known to Tenant (other than
encumbrances created by Landlord without the consent of Tenant and which are not
otherwise permitted under the Lease), at any time in force affecting the Leased
Property; or (iii) require the cleanup or other treatment of any Hazardous
Material.
LETTER OF CREDIT: Means a letter of credit satisfying the
requirements of Section 21.3.
OFFICER'S CERTIFICATE: A certificate of Tenant signed by a duly
authorized representative of Tenant.
OTHER LEASED PROPERTY: Means the properties leased or subleased to
Tenant or an Affiliate of Tenant by Landlord or an Affiliate of Landlord, and
listed on Exhibit C attached hereto.
OTHER PROPERTY LEASES: Means the other leases or subleases entered into
between Landlord or an Affiliate of Landlord and Tenant or an Affiliate of
Tenant relating to Tenant's use of the Other Leased Property.
OTHER REVENUE: Means all revenue received (whether by Tenant or any
subtenants, concessionaires, licensees or other party) from or by reason of the
Leased Property relating to (i) the operation of snack bars, restaurants, bars
and banquet operations, (ii) merchandise sold on the Leased Property, (iii)
parking, (iv) fitness centers, (v) tennis facilities, (vi) day care, (vii)
nongolf-related guest fees (provided that if any fees or charges assessed by
Tenant relate to packages including golf and nongolf-related activities, the
entire package price shall be included as "Golf Course Revenue"), (viii) locker
rentals, (ix) bag storage, (x) video games, (xi) vending machines and (xii) fees
or other charges paid to Tenant by providers of golf lessons (unless the terms
under which Tenant is paid by such provider do not comply with Section 24.5, in
which event the gross revenue received by such provider shall be included in
Other Revenue); provided, however, that the items described in clauses (b)
through (p) of the definition of Golf Course Revenue shall be excluded from the
definition of Other Revenue.
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OVERDUE RATE: On any date, a rate equal to 3% above the Prime Rate, but
in no event greater than the maximum rate then permitted under applicable law.
▇▇▇▇▇▇ MANAGEMENT: As defined in Article 30.
PERSON: Means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, joint stock
companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts, Indian tribes or other organizations,
whether or not legal entities, and governments and agencies and political
subdivisions thereof.
PRIMARY INTENDED USE: Means the operation of a golf course (including
clubhouse facilities), consisting of the Facility, and other activities
customarily associated with or incidental to the operation of a golf course,
including sale or rental of golf-related merchandise at a golf professional's
shop, sale of memberships, furnishing of lessons by a golf professional,
operation of a driving range, and sales of food and beverages, including liquor
sales.
PRIME RATE: On any date, a rate equal to the annual rate on such date
announced by ▇▇▇▇▇ Fargo Bank, National Association to be its prime rate or base
rate for 90-day unsecured loans to its corporate borrowers of the highest credit
standing (or, if ▇▇▇▇▇ Fargo Bank, National Association no longer announces such
prime rate or base rate, then the prime or base rate announced by such other
financial institution as selected by Landlord) but in no event greater than the
maximum rate then permitted under applicable law.
QUARTERLY BASE RENT : Means, with respect to any Fiscal Quarter,
one-fourth of the Annual Base Rent for the Fiscal Year in which such Fiscal
Quarter falls.
REGISTERED OFFERING: As defined in Section 24.2.
RELATED RIGHTS: As defined in Article 1.
RENT: Collectively, the Base Rent, Additional Rent and Additional
Charges.
RENT COVERAGE RATIO: Means, for any period, the ratio of (a) EBITDA for
the Leased Property for such period, to (b) the Initial Base Rent obligations
payable hereunder for such period.
REQUIRED SECURITY DEPOSIT AMOUNT: Means, (A) the amount of $453,000.00,
for the period commencing on the Commencement Date and continuing through the
end of the fourth (4th) full Fiscal Quarter occurring during the Term, and (B)
thereafter, the following applicable amounts, determined as of the last day of
each subsequent Fiscal Quarter during the Term: (a)
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the amount of $453,000.00, in the event that the Rent Coverage Ratio for the
twelve (12) month period ending as of such date of determination is less than
1.2:1; (b) the amount of $302,000.00, in the event that the Rent Coverage Ratio
for the twelve (12) month period ending as of such date of determination is
equal to or greater than 1.2:1, but less than 1.3:1; (c) the amount of
$151,000.00, in the event that the Rent Coverage Ratio for the twelve (12) month
period ending as of such date of determination is equal to or greater than
1.3:1, but less than 1.4:1; and (d) zero amount, in the event that the Rent
Coverage Ratio for the twelve (12) month period ending as of such date of
determination is equal to or greater than 1.4:1.
STATE: The State or Commonwealth in which the Leased Property is
located.
TENANT'S ELECTION PERIOD: As defined in Section 28.1.
SUCCESSOR LANDLORD: As defined in Section 26.6.
SUCCESSOR OWNER: As defined in Section 26.5.
TENANT: As defined in the preamble.
TENANT IMPROVEMENT: As defined in Section 10.1.
TENANT'S ELECTION PERIOD: As defined in Section 28.1.
TENANT'S PERSONAL PROPERTY: All machinery, equipment, furniture,
furnishings, movable walls or partitions, phone system, computers or trade
fixtures or other personal property, and consumable inventory and supplies,
owned by Tenant or ▇▇▇▇▇▇ Management and used or useful in Tenant's business on
the Leased Property, including all items of furniture, furnishings, equipment,
supplies and inventory, kitchen fixtures, bar equipment, flatware, lawn mowers
and other gardening tools, tractors and other motorized vehicles and golf carts.
TERM: Collectively, the Initial Term and any Extended Terms, as the
context may require, unless earlier terminated pursuant to the provisions
hereof.
UNAVOIDABLE DELAYS: Delays due to strikes, lockouts, inability to
procure materials, power failure, acts of God, governmental restrictions, enemy
action, civil commotion, fire, unavoidable casualty or other causes beyond the
control of the party responsible for performing an obligation hereunder,
provided that lack of funds shall not be deemed a cause beyond the control of
either party hereto unless such lack of funds is caused by the failure of the
other party hereto to perform any obligations of such party, under this Lease.
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UNSUITABLE FOR ITS PRIMARY INTENDED USE. A state or condition of the
Facility such that in the good faith judgment of Tenant, reasonably exercised,
the Facility cannot be operated on a commercially practicable basis for its
Primary Intended Use.
INTERPRETATION. The foregoing defined terms include the plural as well
as the singular. "Including" and variants thereof shall be deemed to mean
"including without limitation." All accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with generally accepted
accounting principles as at the time applicable. All references in this Lease to
designated "Articles," "Sections" and other subdivisions are to the designated
Articles, Sections and other subdivisions of this Lease. The words "herein,"
"hereof" and "hereunder" and other words of similar import refer to this Lease
as a whole and not to any particular Article, Section or other subdivision.
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EXHIBIT B
LEGAL DESCRIPTION OF THE LAND
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EXHIBIT C
OTHER LEASED PROPERTY
The following golf course properties: Fox Valley Club, Lancaster, New York;
Oronoque Country Club, Stratford, Connecticut; Memphis National Golf Club,
Collierville, Tennessee; ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇; Brierwood
Country Club, Hamburg, New York; ▇▇▇ ▇▇▇▇▇ Golf Club, North Tonawanda, New York;
Emerald Valley Golf Club, Creswell, Oregon; Penderbrook Golf Club, Fairfax,
Virginia; and Minebrook Golf Club, Hackettstown, New Jersey.
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EXHIBIT D
OPERATING STANDARDS
1. Greens, Practice Putting Greens & Nurseries.
A. Mowing - At least five days per week at a height
between 3/16" - 5/16"during the growing season; as needed during the
off season.
B. Change cup locations on all greens and practice
putting greens daily during the active season and at least three times
weekly in the off-season. Cup location on all greens will be moved at
least twenty feet from the previous placement.
C. Repair ball marks, divots, or any other damaged turf
areas on all greens and practice greens daily.
D. Aerify all greens, practice putting greens and
nurseries at least three times per year during the growing season.
Aerify problem areas as often as necessary to produce superior turf
quality.
E. Topdress all greens, practice putting greens and
nurseries;
(1) After any aerification performed with 1/2"
or larger tines;
(2) As needed to maintain a smooth putting
surface.
(3) Topdressing will be sand or a mix similar to that
used to construct the greens.
F. Light vertical mowing of all greens, practice putting
greens and nurseries shall be performed as appropriate to smooth and
true the putting surfaces. Heavy dethatching shall be performed only
prior to any winter overseeding.
Note: Where bermudagrass greens are maintained, they
shall be overseeded annually, approximately 2 to 3 weeks
before the first annual frost, using perennial rye or a blend
of perennial rye, Poa trivialis and/or fine fescues - at a
rate between 20 and 30 lbs. per 1,000 square feet.
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The putting surface shall be prepared for overseeding
by aerifying not later than 30 days prior to overseeding and
verticutting weekly starting three to four weeks prior.
Overseeding shall be topdressed 1/8" with material
similar to green construction materials or an approved
sand/organic mixture. A complete fertilizer shall be applied
immediately prior to seeding. Greens shall be irrigated
sufficient to remain moist but not soaked until all seed has
germinated.
During germination period, cup shall be changed
frequently. First mowing shall be at 5/16" reducing to normal
cutting heights gradually.
A preventive program of fungicide applications shall
be maintained starting two days after overseeding.
G. Spiking of all greens and practice greens shall be
performed as needed between aerifications to maintain water
infiltration.
H. Fertilization - All greens, practice greens, and
nurseries shall be fertilized with nitrogen, phosphorous, potash, and
other elements as needed to maintain color, growth, health and
turgidity of the turf, without allowing excessive or succulent growth.
The goal of the greens fertilization program is to
provide the best possible putting surface, not to produce the
maximum amount of growth.
I. Fungicides - All greens, practice greens and
nurseries shall receive appropriate fungicide applications to prevent
and/or control fungal disease activity.
▇. ▇▇▇▇ Control - All greens, practice greens and
nurseries shall be maintained free of undesirable grasses and weeds.
Pre-emergent herbicides shall be used as necessary to prevent intrusion
into the greens of weeds difficult to eradicate such as goosegrass,
crabgrass, etc.
K. Insecticides - All greens, practice greens and
nurseries shall be treated as necessary to prevent or halt insect
damage.
2. TEES - ALL AREAS USED FOR TEE SURFACE.
A. Mowing - All tees shall be mowed at a height between
3/8" - 5/8" three times per week during growing season and as necessary
during off-season.
▇-▇
▇▇
▇. ▇▇▇▇▇▇▇▇▇▇▇ - All worn areas on tees shall be
topdressed at least weekly to fill divots and level tee surface.
Topdressing material shall contain seed of annual or perennial
ryegrasses, or other species as appropriate.
C. Overseeding - All tees shall be overseeded at a rate
of not less than 10 lbs./ 1,000 square feet, approximately two to three
weeks before the first expected annual frost. Seed used shall be a
suitable species or blend.
D. Set up - Tee markers and all tee equipment shall be
moved daily for proper play and control of turf wear.
E. Weed Control - Tees shall be kept weed free to an
extent of at least 90% of the area by the proper and timely application
of pre- and/or post-emergent herbicides.
F. Vertical Mowing - All tees shall be verticut as
necessary to control mat or thatch build-up.
G. Aerification - All tees shall be aerified at least
every two months from March through October and as necessary during the
remainder of the year.
H. Fertilization - All tees shall be fertilized with
nitrogen, phosphorous, potash, and other elements as needed to maintain
color, growth, health and turgidity of the turf, without showing
excessive or succulent growth.
3. FAIRWAYS - ALL AREAS OF PLAY EXCEPT GREENS, TEES, ROUGHS AND
NATURAL GROWTH AREAS.
A. Mowing - All fairways shall be mowed at least three
times per week at a height between 1/2" - 7/8" during the growing
season and as needed for the balance of the year.
B. Aerification - All fairways shall be aerified a
minimum of three times per year during the growing season. Aerification
holes shall not exceed a spacing of eight inches on center or be of a
diameter of less than 1/2".
C. Fertilization - All fairways shall be fertilized with
nitrogen, phosphorous, potash, or other elements as needed to maintain
color, growth, health and turgidity of the turf, without allowing
excessive or succulent growth.
D. Vertical mowing - All fairways shall be verticut as
necessary to control mat or thatch build-up.
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89
E. Weed control - Fairways shall be kept weed free to an
extent of at least 90% of the area by the proper and timely application
of pre- and/or post-emergent herbicides.
4. ROUGHS. All turfed areas of play except greens, tees,
fairways and natural growth areas.
A. Mowing - All roughs shall be mowed weekly during the
growing season and as necessary during the balance of the year, at
heights between 3/4" and 1-1/2". Rough height shall not exceed 2"
without the direct approval of the regional superintendent, and rough
mowing shall not be suspended for any tournament without such approval.
B. Aerification -
(1) Fairway-to-tree-line play areas shall be
aerified at least two times per year.
(2) Within wooded play areas - as necessary to
establish and/or maintain turf.
C. Fertilization - Roughs shall be fertilized as
necessary to maintain turf.
▇. ▇▇▇▇ Control - Shall be performed as necessary to
prevent seed formation and to allow proper play.
5. NATURAL GROWTH AREAS. All areas in which native or introduced
vegetation is allowed to survive without routine mowing, cultivating, irrigation
or other routine maintenance procedures. May be out of play areas, steep slopes,
barriers, windbreaks, nature trails, etc. Such areas are to be maintained free
of excessive trash, noxious weeds and vertebrate pests, and in such manner as to
comply fully with fire department regulations or other such regulations as may
apply. Such natural growth areas may be improved and may from time to time be
subjected to irrigation, cultivation, pruning, or other such practices as may be
necessary or desirable to establish or maintain them.
6. PLANTERS - ALL AREAS PLANTED WITH ORNAMENTAL PLANTS, NOT
INTENDED FOR GOLF PLAY AND HAVING A DEFINABLE BORDER.
A. Clean-up - All planters shall be maintained free of
trash and debris.
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B. Weed Control - All planters shall be maintained free
of weeds by mechanical and/or chemical means.
C. Trimming - The plant material (trees, shrubbery and
ground covers) in planters shall be trimmed for protection from wind,
insect damage, and for appearance.
7. TREES - ALL TREES WITHIN THE PROPERTY LINES OF THE GOLF
COURSE.
A. Stakes - Trees shall be staked as necessary until of
sufficient size to stand unassisted. Stakes shall be removed as soon as
possible.
B. Pruning - All trees shall be properly pruned for
protection from wind and pests as well as for appearance and safety.
C. Irrigation - All trees shall be irrigated to provide
adequate moisture for normal growth.
D. Mowing - Large area mowers shall not be used within
one foot of the trunk of any tree.
E. Removal and Replacement - When appropriate, all dead
trees, for whatever cause, shall be removed. Any necessary replacement
shall be with a tree of appropriate type and size.
8. IRRIGATION - ALL EQUIPMENT REQUIRED TO IRRIGATE ALL AREAS OF
THE PROPERTY.
A. Repair or replace all heads, valves, controllers,
wiring, and pipe as needed to maintain the proper operation of the
entire golf course irrigation system (including greens, tees, fairways,
planters, flower beds, etc.) on an on-going basis
B. The golf course shall be irrigated as necessary to
support the proper growth of golf turf and associated landscaping.
9. FENCES - ALL FENCES AND WALLS, BLOCK, CHAIN LINK, OR BARBED
WIRE, ETC. ON OR WITHIN BOUNDARIES OF THE PROPERTY.
A. Repair all broken or damaged fencing as necessary.
B. Repair or replace as necessary all fences, gates and
locking devices needed for the protection of the golf course or
equipment.
▇-▇
▇▇
▇▇. CLUBHOUSE AND STRUCTURES - ALL STRUCTURES WITHIN THE
BOUNDARIES OF THE GOLF COURSE.
A. Course Restrooms - All course restrooms shall be
maintained daily to provide clean and sanitary facilities for the users
and employees of the course. Soap, towels, toilet paper, etc. shall be
provided in adequate quantity at all times. Portable facilities shall
be maintained similarly.
B. All buildings and structures shall be maintained in
good repair at all times. Surrounding areas shall be maintained free of
weeds, brush, disorganized junk or broken- down equipment, trash piles,
etc. Interior areas shall be clean and neatly organized, safe and
sanitary for customers and employees. Painting, rodent and insect
control, and landscaping shall be performed as necessary.
"Housekeeping" duties shall be assigned to all maintenance crew members
and shall be performed daily.
C. Cart Paths - Maintain all cart paths in a safe and
clean condition and repair promptly as needed.
D. The golf course superintendent is responsible for all
facilities and structures maintenance not within the clubhouse area
proper.
11. EDGING. All sidewalks, patios and concrete cart paths must be
kept edged. Edging around valve boxes, meter boxes, backflow preventers, etc.
shall be done as needed to insure that there is no obstruction of play or
maintenance from growth around these items.
12. SAND TRAPS. All sand traps shall be edged as necessary to
maintain an appropriate lip, raked daily and filled with fresh sand as needed to
maintain a minimum 1 1/2" depth on slopes and 4" in the bottom. Replacement sand
will be of a dust-free type, suitable for trap use.
13. LANDSCAPED AREAS. The various planting areas throughout the
course shall be cultivated, weeded, and pruned on a regular basis, with at least
two replanting programs for annuals scheduled each year, depending on the length
of the season.
14. TRASH AND REFUSE. Shall be collected daily and removed from
the property in a safe, sanitary and lawful manner as necessary to minimize or
eliminate problems from refuse odors, insects, etc. Approved trash receptacles
shall be conveniently stationed on tees and other appropriate areas and emptied
daily.
15. VERTEBRATE PEST CONTROL. Shall be routinely performed
throughout the property on an on-going basis, in such a manner that vertebrate
pest populations are steadily reduced and eventually eliminated.
▇-▇
▇▇
▇▇. ▇▇▇▇▇▇▇. All lakes, ponds and streams shall be maintained in a
safe and sanitary manner and in good appearance.
17. SOIL AND WATER. Analysis will be performed yearly by an
approved professional laboratory.
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EXHIBIT E
STANDARD REPORTING FORMAT
[Attached]
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇ RENT SCHEDULE
MONTH PROPORTION
January 1%
February 1%
March 9%
April 15%
May 16%
June 13%
July 12%
August 10%
September 9%
October 7%
November 3%
December 4%
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EXHIBIT G
BASELINE REVENUE SCHEDULE
Baseline Golf Baseline
PERIOD Course Revenue Other Revenue
January 1 through
March 31
April 1 through
June 30
July 1 through
September 30
October 1 through
December 31
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