EXHIBIT 10.4
Confidential Treatment Requested; Portion Omitted Filed Separately with the
Securities and Exchange Commission
TALL PINES
EXCLUSIVE LICENSE AND ROYALTY AGREEMENT
This Tall Pines Exclusive License and Royalty Agreement (this "Agreement")
is entered into by Tall Pines Development Corporation, a Wisconsin Corporation
("Tall Pines") and The Great Lakes Companies, Inc., a Wisconsin corporation
("Great Lakes"). Tall Pines and Great Lakes are referred to collectively as the
"Parties" and each individually as a "Party".
BACKGROUND
Great Lakes and Tall Pines entered into a Development Agreement (Master)
dated October 5,1998 (the "Master Agreement"), as amended by Amendment to Master
Agreement, dated November 8,1999, which provided for the development by Great
Lakes of hotel facilities with indoor and outdoor water amenities similar to or
based on those of the Black Wolf Lodge Development located in Wisconsin Dells,
Wisconsin (now known as the "Great Wolf Lodge"). The Parties also entered into
certain Geographic Development Agreements under the Master Agreement relating to
specific Developments identified in EXHIBIT A (collectively, the "Geographic
Development Agreements"). Pursuant to the Master Agreement and the Geographic
Development Agreements, Tall Pines agreed, among other things, to disclose
certain Confidential Information (hereinafter defined) to Great Lakes for use by
Great Lakes and certain other parties in connection with the development,
ownership and operation of Developments and in consideration for the disclosure
of such Confidential Information, Great Lakes agreed to pay Tall Pines a fee
calculated as a percentage of Revenues (hereinafter defined) earned by the
Development(s).
The Parties now wish to terminate the Master Agreement and the Geographic
Development Agreements and to replace those agreements with this Agreement.
The Parties agree as follows:
1. DEFINITIONS.
The following terms have the meanings indicated below:
1.1 "ADJUSTED FOR INFLATION": Defined in Section 5.5.
1.2 "AFFILIATE": With respect to any Person, any Person controlling,
controlled by or under common control with, whether by virtue of
ownership or otherwise, such Person. Affiliates of each Party
include: (i) any direct or indirect partner, member or shareholder
of such Party, and (ii) any Person that would constitute an
Affiliate of any Person described in the immediately foregoing
sentence. For purpose of this definition, the term "control"
(including, with correlative meanings, the terms "controlling",
"controlled by" or "under common control with") means the
possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether
through ownership of voting securities, by contract or otherwise.
1.3 "AVAILABLE ROOM": A sleeping room available on a daily basis to
hotel guests for overnight rental.
1.4 "BASE DEVELOPMENT FEES": Defined in Section 5.2.
1.5 "CASH-ON-CASH RETURN ON EQUITY": For a given period, an amount equal
to the product of one hundred (100) and a fraction, the numerator of
which is the total cash earned by all owners of any equity interest
in the relevant entity and the denominator of which is the total
cash and non-cash capital contributions made to such entity to the
date of calculation, stated as a percentage.
1.6 "CONFIDENTIAL INFORMATION": All information that is or has been
disclosed by Tall Pines, either orally or in writing, to Great Lakes
in the performance of Tall Pines' duties and obligations under the
Master Agreement or any Geographic Development Agreement, which
relates io the Wisconsin Dells Lodge, including its operating
systems, financial information, historical costs, historical
revenues, historical expenses, or marketing programs.
1.7 "DEFAULT RATE": A rate of interest equal to four (4) percentage
points above the prime rate (as announced as of the first day on
which the Default Rate is applicable by Citibank N.A., or its
successor).
1.8 "DESIGNEE": With respect to any Person, an Affiliate or permitted
assignee of such Person, including any Person authorized by Great
Lakes to develop, own, and/or operate a Development, whether
pursuant to a license, franchise agreement, operating agreement, or
other contract, agreement or arrangement.
1.9 "DESIGNS": The plans, specifications, blueprints, drawings,
appearance, layout, and developmental design of the Wisconsin Dells
Lodge, inclusive of plans and specifications for associated Water
Amenities.
1.10 "DEVELOPMENT FEES": The Base Development Fees and Incentive
Development Fees payable by Great Lakes to Tall Pines pursuant to
Sections 5.2 and 5.3 of this Agreement, respectively.
1.11 "DEVELOPMENT LOCATION": The site at which a Development is or is
proposed to be located.
1.12 "DEVELOPMENT": a Property that is developed by Great Lakes or its
Designee.
1.13 "DEVELOPMENT FEE PAYMENT PERIOD": A period commencing on the opening
of a Development for business and, notwithstanding the Term of this
Agreement, ending ten years thereafter, or such earlier date on
which this Agreement is terminated because of a material, uncured
breach by Tall Pines.
1.14 "EFFECTIVE DATE": July 26, 2004.
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1.15 "FISCAL YEAR": For each Development, the fiscal year used by Great
Lakes or its Designee for such Development, as the same may be
amended from time to time.
1.16 "GROSS OPERATING PROFIT": For each Development, a sum equal to
Revenues minus all expenses from operations (excluding depreciation,
amortization, management fees, central reservation fees, real, and
personal property taxes, leasehold rent paid, property insurance,
replacement reserves, Development Fees and debt service) for a
Fiscal Year. However, expenses that are directly related to revenues
that are excluded from the definition of "Revenues" below (e.g.,
expenses directly related to food and beverage sales) will also be
excluded from the calculation of Gross Operating Profit.
1.17 "INFLATION INDEX": The United States City Average Price Index for
All Urban Consumers for all Items (Base Year 1982-1984), as
published by the United States Department of Labor, Bureau of Labor
Statistics from time to time.
1.18 "INTERNATIONAL DEVELOPMENT": Any Development located outside of the
United States (including its territories and possessions) or Canada.
1.19 "ON-SITE CONSULTING": Consulting services provided by all or any of
the Tall Pines Principals, at or in close proximity to any
Development Location.
1.20 "PERSON": A natural person or an entity.
1.21 "PROPERTY": A property that includes long-term or short term
dwelling units and that incorporates Water Amenities, regardless of
the legal or financial structure employed, including hotels,
resorts, condominiums, apartments, community associations, time
shares, partnerships, vacation clubs, or other fractional ownership
or similar arrangements.
1.22 "REVENUES": (i) The total United States dollar equivalent amount
earned by Great Lakes or its Designee from guest room revenues,
revenue from forfeitures of room deposits, games, water park
rentals and usage fees, and retail sales at a Development or the
Developments, as the context requires, but not including revenues
from food or beverage sales, telephones, meeting room rentals, or
non-game vending revenues. In computing Revenues, no costs incurred
in operating Developments or (except as set forth in this section
1.22) in selling, advertising, promoting, or distributing any goods
or services will be deducted from Revenues, nor will any deductions
be made for uncollectible accounts, (ii) In the case of a
Development which includes or consists of a condominium or
fractional-interest condominium, Revenues will include the gross
room revenue generated by all condominium units and
fractional-interest units for which rental management agreements are
entered into by Great Lakes or its Designee within 180 days of the
original sales of such units, (iii) In the case of a Development
which includes or consists of timeshare units, condominium units or
fractional-interest condominium units for which rental management
agreements are not entered into by Great Lakes or its Designee
within 180 days of the original sales of such units
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(collectively, the "Unmanaged Units"), Revenues will include the
sales price for the Unmanaged Units sold by Great Lakes or its
Designee (net of selling costs up to a maximum of thirty-five
percent of the gross sales price), and gross room revenue generated
by all timeshare units subject to timeshare rental management
agreements with Great Lakes or its Designee. (iv) In the event Great
Lakes, its Designee or a Great Lakes Affiliate, as the case may be,
sells, transfers or assigns its right to manage a property, the
consideration or value received shall be considered Revenue for
purposes of this Agreement.
1.23 "SANDUSKY DEVELOPMENT": The Great Wolf Lodge Development owned by an
Affiliate of Great Lakes and located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇.
1.24 "SHEBOYGAN DEVELOPMENT": The Blue Harbor Resort(TM) Development
owned by an Affiliate of Great Lakes and located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇.
1.25 "TALL PINES PRINCIPALS": ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, and ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇.
1.26 "TERM": The period commencing on the Effective Date and ending on
October 31, 2018.
1.27 "TERRITORY": Worldwide.
1.28 "TRAVERSE CITY DEVELOPMENT": The Great Wolf Lodge Development owned
by an Affiliate of Great Lakes and located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇.
1.29 "VISIBLE COMMENCEMENT OF CONSTRUCTION": For a Development or a
Property, the point in time at which, at a minimum, initial
clearing, grading or other like processes shall have occurred on the
site of the Development in accordance with plans and specifications
submitted to and approved by the appropriate governmental
authorities.
1.30 "WATER AMENITIES": Large, water-based attractions commonly located
in commercial water amusement parks, indoor or outdoor, including
water slides, "lazy river" inner tube rides, and wave pools, but
specifically excluding indoor and outdoor pools and related
amenities (e.g. diving boards, water basketball equipment, water
volleyball equipment, and personal flotation devices) commonly
developed and operated by major hotel or motel chains, or the
franchisees of same.
1.31 "WILLIAMSBURG DEVELOPMENT": The Great Wolf Lodge Development owned
by an Affiliate of Great Lakes and located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
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1.32 "WISCONSIN DELLS LODGE": The hotel development with Water Amenities
owned by an Affiliate of Great Lakes and located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇.
2. GRANT OF LICENSE; RIGHTS OF THE PARTIES; DEVELOPMENTS.
2.1 Tall Pines grants to Great Lakes an irrevocable, exclusive (except
as otherwise set forth in Section 2.4 of this Agreement), perpetual,
world-wide license to use the Confidential Information.
2.2 The Parties agree that as between them, Great Lakes (a) except as
otherwise may be set forth expressly herein, has the exclusive right
to construct, establish, develop, open, own, operate and maintain
Properties, anywhere in the world and (b) has exclusive rights to
use the Confidential Information and Designs. Great Lakes may cause
all or any of its rights under this Agreement to be assigned to, or
its obligations under this Agreement to be performed by, its
Designee or Designees, but the rights and obligations of Designees
are subject to the terms of this Agreement.
2.3 The Parties acknowledge and agree that in consideration for the
payments and obligations described in the Master Agreement and this
Agreement and for other good and valuable consideration. Great Lakes
has acquired all intellectual property rights in or pertaining to
the Designs, including copyright.
2.4 Neither Tall Pines nor its principals, agents, affiliates, or
assigns, shall use or make available to any third party the Designs
or, during the Term, any Confidential Information, for any purpose,
except that, during the Term, Tall Pines or the Tall Pines
Principals may use Confidential Information (but not the Designs) as
follows: (i) other than in connection with the development of a
Property; (ii) in connection with a Property developed in accordance
with Section 2.6 of this Agreement; (iii) in connection with the
operation of a "Moose Jaw" brewpub and restaurant in Lake ▇▇▇▇▇▇,
Wisconsin, and a "Timber Falls" miniature golf and outdoor thrill
ride attraction in Wisconsin Dells, Wisconsin; and (iv) in
connection with the design and manufacture of furniture. Nothing in
this Agreement shall be construed to prohibit or limit the rights of
the Tall Pines Principals to continue as investors in the Copacabana
resort in Lake ▇▇▇▇▇▇, Wisconsin. The limitations on the use of
Confidential Information applicable to Tall Pines and its
principals, agents, affiliates and assigns that are set forth in
this Section 2.4 shall not apply to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ from and
after the day that is five (5) years after the Effective Date
2.5 "RIGHTS AGAINST THIRD PARTIES": Great Lakes shall have full right
and authority to take all appropriate measures at Great Lakes'
expense to enforce, throughout the world, all ownership rights
associated with the Confidential Information, on its own behalf and
on behalf of Tall Pines. Upon written request from and at the sole
cost and expense of Great Lakes, Tall Pines shall join in and
reasonably
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cooperate with respect to any such measures from time-to-time. Tall
Pines shall have no right to approve the selection of Great Lakes'
legal counsel or other advisors or consultants used in connection
with such measures, nor of the measures employed or not employed,
nor the manner in which employed. However, Tall Pines may, upon
written request, receive copies of written communications and
documents related to such measures. In the event Tall Pines becomes
a party to any enforcement or declaratory judgment action related to
measures undertaken by Great Lakes pursuant to this Section 2.5,
Tall Pines may choose its own legal counsel and Great Lakes shall
indemnify it for the reasonable fees and costs, including reasonable
legal fees and expert witnesses it incurs in such action; provided,
however, that in no event shall Great Lakes be required to indemnify
Tall Pines for any fees or costs incurred in connection with the
defense of a legal action arising out of the wrongful action of Tall
Pines or any of the Tall Pines Principals.
2.6 "LIMITED RIGHT OF TALL PINES TO DEVELOP PROPERTIES": If Tall Pines
or the Tall Pines Principals wish to develop a Property, such
Property must be at least 200 miles (unless otherwise waived by
Great Lakes) from the nearest Development, and the right of Tall
Pines or the Tall Pines Principals to develop the proposed Property
will be subject to the right of first refusal of Great Lakes
provided for in this Section. If Tall Pines wishes to develop a
Property in accordance with this Section, it must first give
written notice to Great Lakes (a "TP Property Notice"), setting
forth the location of the proposed Property, the anticipated date on
which the Property will open for business, and other pertinent
information (including a description of the proposed Property).
Great Lakes will have a right of first refusal to develop a
Development at the location specified in the TP Property Notice, or
at any other location within 200 miles of such location, which right
must be exercised by Great Lakes by delivering written notice of
such exercise (an "Exercise Notice") to Tall Pines within ninety
(90) days following receipt of the TP Property Notice. If Great
Lakes has not delivered an Exercise Notice within such ninety (90)
day period, then Tall Pines (or the Tall Pines Principals) may
commence development qf the proposed Property at the location
specified in the TP Property Notice; provided, however, that the
Designs shall not be used in connection with the development of such
Property, nor shall Tall Pines, the Tall Pines Principals, nor such
Property in any way infringe upon the intellectual or other property
rights of Great Lakes including, the registered and unregistered
trademark rights and copyrights associated with Great Lakes' Great
Wolf Lodge(R) and Blue Harbor Resort (TM) resort brands. If Great
Lakes does not commence Visible Commencement of Construction and
continue progress in developing the proposed Property at the
specified location within two (2) years following delivery of the TP
Property Notice, then Tall Pines (or the Tall Pines Principals) may
commence development of the proposed Property at the location
specified in the TP Property Notice within four (4) years following
delivery of the TP Property Notice. If Tall Pines (or the Tall Pines
Principals) does not commence Visible Commencement of Construction
of the proposed Property at the specified location within two (2)
years following delivery of the TP Delivery Notice, or within four
(4) years following such delivery in the event that Great Lakes
fails to
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commence Visible Commencement of Construction in the timeframe
specified hereinabove, then the right of Tall Pines (or the Tall
Pines Principals) to develop a Property at the proposed location
will once again be subject to the right of first refusal of Great
Lakes under this Section. The limitations on Tall Pines and its
principals, agents, affiliates and assigns that are set forth this
Section 2.6 shall not apply to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ from and after the
day that is five (5) years after the Effective Date.
3. RESPONSIBILITIES OF GREAT LAKES.
3.1 Great Lakes or its Designee will be solely responsible for the
designation, location, construction, establishment, development,
opening, operation and maintenance of each Development, except as
specifically noted below.
3.2 Great Lakes will be solely responsible to do the following in
connection with each of its Developments (whether directly or
through contractual arrangements with others if and to the extent
Great Lakes deems necessary or prudent):
(a) Establish and execute a program to designate, locate, develop,
open and operate the Development;
(b) Identify and evaluate potential Development Locations for the
Development, including performing all market studies and analyses
in connection therewith;
(c) Secure all contracts, government approvals, permits and other
rights necessary to acquire rights to the Development Location for
the establishment and operation of the Development;
(d) Ensure compliance with all local, state and federal
governmental rules, ordinances, statutes, regulations and other
requirements for the establishment and operation of the Development,
including zoning, title, survey, utility, geotechnical,
environmental and other requirements;
(e) Manage, maintain and operate the Development and coordinate
its construction and design, including selecting and supervising
contractors and managing the ordering and installation of
furnishings, fixtures and equipment;
(f) Develop projections for occupancy, rate, development cost,
debt and operating expenses to develop financial projections and
proformas for the Development;
(g) Negotiate and secure all financing for the Development;
(h) Provide in-house and on-site construction management services
for the Development;
(i) Develop and execute a marketing plan for the Development;
(j) Hire and train staff for the Development; and
(k) Provide ongoing property management and asset management for
the Development.
4. TALL PINES ASSISTANCE.
4.1 RESPONSIBILITIES OF TALL PINES. To enable Great Lakes to enjoy the
benefits of this Agreement and establish and open and operate the
Developments, Tall Pines will, at the written request of Great
Lakes, use its best efforts to do all of the following:
(a) Assist Great Lakes in the physical planning and programming of
each Development including layout, design, configuration,
furnishing, and all other relevant factors;
(b) Assist Great Lakes in developing operating, marketing and
merchandising plans for each Development; and
(c) Assist Great Lakes in developing operating proformas for each
Development.
4.2 ON-SITE CONSULTING. Tall Pines agrees, upon the written request of
Great Lakes, to provide On-Site Consulting for subsequent
Developments developed by Great Lakes, at a rate of one hundred
dollars ($ 100.00) per hour, per person performing such On-Site
Consulting, plus the payment or reimbursement of Tall Pines
Principals' reasonable out-of-pocket expenses incurred in connection
therewith for lodging, meals and travel (excluding first class air
fare), payable within thirty (30) days after an invoice for such
fees is issued by Tall Pines.
4.3 CONTROL OF TALL PINES. Tall Pines represents and warrants that, as
of me Effective Date, the Tall Pines Principals have absolute,
unfettered discretion to manage the affairs of Tall Pines and that
no other Person holds any approval or veto rights over any decision
of Tall Pines.
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4.4 LIMITATIONS. Great Lakes will have exclusive rights and
responsibilities with respect to the designation, approval,
construction, development, opening, operation, financing or
marketing of the Developments other than as specifically set forth
in this Section 4. Neither Tall Pines nor any Tall Pines Principal
will be required to make any cash or cash equivalent investment or
execute any personal guarantee, security agreement or similar
collateral or performance agreement, in connection with any
Development.
5. STATEMENTS AND PAYMENTS.
5.1 CONSULTING FEES. Great Lakes will pay to Tall Pines and/or the Tall
Pines Principals, as requested by Great Lakes, consulting fees for
consulting services requested by Great Lakes in writing, at the rate
provided in Section 4.2.
5.2 BASE DEVELOPMENT FEES. In consideration of, among other things, the
matters enumerated in 2.1,2.2 and 2.3, Great Lakes agrees that for
each Development developed by Great Lakes or its Designee, Great
Lakes will pay to Tall Pines the following Base Development Fees:
(a) The Base Development Fees for each of the Developments will be
an amount equal to one percent (1 %) of annual Revenues of each
Development, except as provided in Sections 5.2(b), (c) and (d).
Unless otherwise agreed in writing, the Base Development Fees for
each Development shall be paid for the duration of the applicable
Development Fee Payment Period notwithstanding the expiration or
termination of this Agreement, except in the case of termination by
Great Lakes under Section 7.2 as a result of a material, uncured
breach by Tall Pines.
(b) In the case of any International Development in which Great
Lakes and its Affiliates collectively own 25% or less of the common
equity interests, the Base Development Fees for such International
Development will be an amount equal to one-half of one percent
(0.5%) of annual Revenues of that Development. Such Base Development
Fees shall be paid for the term of the applicable Development Fee
Payment Period, notwithstanding the expiration or termination of
this Agreement, except in the case of termination by Great Lakes
under Section 7.2 as a result of a material, uncured breach by Tall
Pines.
(c) The Base Development Fees for the Sandusky Development, the
Traverse City Development, and the Williamsburg Development are
specified in EXHIBIT C and payable during the term of the
Development Fee Payment Period for each such Development
notwithstanding the expiration or termination of this Agreement,
except in the case of termination by Great lakes under Section 7.2
as a result of a material, uncured breach by Tall Pines.
(d) No Base Development Fees or other Development Fees will be
payable with respect to the Wisconsin Dells Lodge or the Sheboygan
Development.
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(e) The Base Development Fees for each Development open for
business prior to the Effective Date will be payable through the
date specified for that Development on EXHIBIT B, except in the case
of termination by Great Lakes under Section 7.2 as a result of a
material, uncured breach by Tall Pines
(f) In the case of any Development owned and operated by Great
Lakes or one of its Affiliates or a Designee and open for business
after the Effective Date, the Base Development Fees shall be payable
during the Development Fee Payment Period applicable to such
Development Development Fees shall be payable to Tall Pines
notwithstanding any assignment, transfer, sale, merger or any
corporate restructuring and shall be due and payable by Great Lakes
to Tall Pines and shall, unless otherwise agreed in writing be due
and payable notwithstanding any assumption of responsibility by a
third party.
(g) If Great Lakes enters into an agreement with a Designee that
gives the Designee the right to terminate payments to Great Lakes or
one of its Affiliates prior to the tenth anniversary of the
commencement of such payments, and the Designee exercises its right
to terminate such payments, then Great Lakes may request in writing
that Tall Pines consent to the termination of the obligations to
make payments of Development Fees for such Development. Tall Pines
hereby expressly consents to the termination of Great Lakes and its
Designee's obligations to make payments of Development Fees for the
Niagara Falls Development upon the expiration or earlier termination
of a certain License Agreement dated January 30, 2004, between Great
Lakes, as licensor, and ▇▇▇ ▇▇▇▇▇▇▇▇ Entertainment Ltd., as
licensee, provided that one-third of any termination fee or similar
payment or payments received by Great Lakes in connection with such
termination shall be paid to Tall Pines.
(h) The Base Development Fees for each, Development will be
payable monthly, in arrears, within thirty (30) days after the end
of each month.
5.3 INCENTIVE DEVELOPMENT FEES. Incentive Development Fees will be
payable with respect to the Sandusky Development, in accordance with
EXHIBIT C.
5.4 CURRENCY. All sums referred to in this Agreement will be payable in
U.S. dollars. If payments are due on Revenues earned in any foreign
country, Great Lakes will be responsible for converting the amounts
into U.S. dollars, and Great Lakes will be responsible for all
costs, if any, associated with such conversion.
5.5 INFLATION ADJUSTMENTS. Whenever any provision of this Agreement
requires that an amount be Adjusted for Inflation, such adjustment
will be based on the Inflation Index. The amount of the adjustment
will be determined by multiplying the amount to be adjusted by a
fraction, the denominator of which is the Inflation Index for the
month in which the Effective Date occurs and the numerator of which
is the Inflation Index for the month immediately prior to the month
for which the adjustment for inflation is to be made. If the
Inflation Index is discontinued, then there will be substituted
therefore a comparable index for use
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in calculating changes in the cost of living or purchasing power of
consumers published by any other governmental agency, major bank,
financial institution, or university or by another recognized
financial publication, with such adjustments as are reasonably
necessary to produce substantially the same results as would have
been obtained under the unavailable index.
5.6 INTEREST. If any payment required to be made under this Agreement is
not paid when due, Great Lakes will pay to Tall Pines interest on
the delinquent payment at the Default Rate until such payment is
made, in addition to any other remedy available to Tall Pines.
5.7 STATEMENTS. On or before the thirtieth (30th) day after the end of
each calendar quarter during the Term, regardless of
whether any Revenues have been earned during the reporting period,
Great Lakes will submit to Tall Pines a full and accurate statement
showing the amount, by category, of Revenues for each of the
Developments open for business during such quarter, including a
break-out by Development, and such other information relevant to
Development Fees as Tall Pines may reasonably require. All such
quarterly statements will be certified as complete and accurate, to
the best knowledge of Great Lakes' Chief Financial Officer.
5.8 REPORTS. Annually, within one hundred twenty (120) days of the end
of each Fiscal Year during the Term and within one hundred twenty
(120) days after the end of the Fiscal Year immediately following
the expiration or termination of this Agreement, Great Lakes will
deliver to Tall Pines an annual statement covering the operation of
the Developments for the period then ended, prepared in accordance
with U. S. Generally Accepted Accounting Principles, consistently
applied, and certified as accurate, to the best knowledge of Great
Lakes' Chief Financial Officer.
5.9 RECORDS. Great Lakes will keep accurate books of account and records
in a form reasonably acceptable to Tall Pines covering transactions
relating to each of its Developments. Tall Pines will have the right
to examine or audit any or all such books of account and records and
to make copies and extracts therefrom, all at Tall Pines' sole cost
and expense. Great Lakes will provide Tall Pines with reasonable
access to such books and records during normal business hours. Great
Lakes will cause such books and records to be maintained for a
period of at least two (2) years or such longer period as may be
required by law, except that if a dispute arises between Great Lakes
and Tall Pines prior to the expiration of any such two (2) year
period relating to the content of such books and records or any
payments for the time period reflected in such books and records,
then Great Lakes will maintain such books and records until the
dispute is resolved.
5.10 DISCREPANCIES. If any audit conducted by or on behalf of Tall Pines
concerning a Development owned and operated by Great Lakes discloses
an underpayment to Tall Pines of any amount due and payable to Tall
Pines under this Agreement, Tall Pines will give notice of the
amount of such underpayment to Great Lakes,
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and Great Lakes will either (a) promptly pay the amount of the
underpayment, together with interest thereon at the Default Rate
computed from the date the payment was originally due and, if the
amount of such underpayment is five percent (5%) or more, together
with the reasonable costs of the audit which disclosed the
underpayment; or (b) promptly dispute the amount of or existence of
any underpayment and/or the reasonableness of the costs of such
audit, and promptly (i) pay to Tall Pines any undisputed amount of
the underpayment, together with interest thereon at the Default Rate
computed from the date the payment was originally due, and (ii) pay
into escrow any disputed portion of the amount Tall Pines alleges
was underpaid, together with interest thereon at the Default Rate
computed from the date the payment was originally due, until such
dispute is resolved.
5.11 OPENING DATE. Great Lakes will notify Tall Pines of the opening of a
Development for business, within ten (10) days after the opening.
6. GOVERNMENT APPROVALS.
Great Lakes or its Designee will make or obtain, at its expense, all
necessary or appropriate government filings, approvals, applications,
and/or registrations with respect to construction and operation of the
Developments and will promptly furnish Tall Pines with copies of such
documentation upon written request. Each Development will be constructed,
established, opened, operated maintained and marketed in compliance with
all applicable laws and regulations.
7. TERMINATION; REMEDIES.
7.1 TALL PINES' RIGHTS TO TERMINATE. Tall Pines will have the right to
immediately terminate this Agreement and/or to pursue all remedies
available at law or in equity if:
(a) Great Lakes breaches its payment obligation under this
Agreement, and such breach is not cured within sixty (60) days after
receipt of written notice of the breach from Tall Pines; or
(b) Great Lakes breaches one of its material obligations under
this Agreement (other than its payment obligation), and such breach
is not cured within ninety (90) days after receipt by Great Lakes of
written notice of the breach from Tall Pines (or, if the breach
reasonably requires more than ninety (90) days to cure, if Great
Lakes does not commence action to cure the breach within ninety (90)
days after receipt of the written notice of the breach or does not
thereafter promptly and continuously work to remedy and cure the
breach).
7.2 GREAT LAKES' RIGHTS TO TERMINATE. Great Lakes will have the right to
immediately terminate this Agreement and/or to pursue all remedies
available at law or in equity if Tall Pines breaches one of its
material obligations under this Agreement, and such breach is not
cured within ninety (90) days after receipt by
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Tall Pines of written notice of the breach from Great Lakes (or, if
the breach reasonably requires more than ninety (90) days to cure,
if Tall Pines does not commence action to cure the breach within
ninety (90) days after receipt of the written notice of the breach
or does not thereafter promptly and continuously works to remedy and
cure the breach).
7.3 SALE OF DEVELOPMENT. If Great Lakes (or one of its Affiliates
including Designees) sells, transfers, assigns or otherwise disposes
of a controlling interest in a Development (whether by sale of stock
or other equity interests in an Affiliate, sale of assets, or
merger) (the "Sale"), the acquirer of such controlling interest in
the Development (the "Acquirer") must expressly assume in writing
the obligations of Great Lakes to pay Development Fees with respect
to that Development through the Development Fee Payment Period which
is or would otherwise be payable for that Development in accordance
with the terms of this Agreement and provided further, Great Lakes
shall not be released from monetary liability under this Agreement
and shall continue to be obligated to Tall Pines as if the Sale
never took place unless Tall Pines releases, in writing, Great Lakes
from that obligation. It is the intent of the Parties that any
successor, purchaser or assignee to Great Lakes' interests hereunder
be obligated to continue the payments of Development Fees to Tall
Pines. Tall Pines shall receive the Development Fees and Consulting
Fees notwithstanding a Sale, merger, transfer, assignment or any
other transaction which would effectively transfer Great Lakes'
rights in whole or in part to a third party or separate entity.
7.4 "CLOSURE": In the event Great Lakes closes a Development, the
Development shall no longer be considered a "Development" for
purposes of this Agreement, and Great Lakes may, subject to the
provisions of this Agreement, make such other use or disposition of
the land and all improvements thereon as Great Lakes shall see fit;
provided, however, that in the event that the Development is closed
in accordance with the provisions of this section and the land
formerly constituting a part of the Development is used for any
other profit seeking purpose by Great Lakes (but not by any lender
taking title by foreclosure or deed in lieu of foreclosure or by any
successor to such lender) within the period commencing on the date
of closure and ending at the end of the Development Fee Payment
Period, Great Lakes shall promptly pay to Tall Pines a termination
fee in an amount equal to the present value of a cash flow stream
commencing on the date of closure of such Development and ending at
the end of the Development Fee Payment Period comprised of monthly
payments equal in amount to the mean of the monthly Development fees
for such Development paid during the final twelve(12) months of
operation of the Development, discounted at an annual rate equal to
two percentage points above the prime rate (as announced by
Citibank, N.A. or its successor, on the date of closure of the
Property).
7.5 POST-EXPIRATION. Upon the expiration or earlier termination of this
Agreement, Great Lakes will have complete discretion concerning the
acquisition, development, design, operation, disposition and
cessation of operation of each of its current Developments and any
future Developments, anywhere in the world,
13
without any restriction or payment obligations to Tall Pines;
provided, however, that Great Lakes obligations (or the obligations
of any third parties) to Tall Pines per this Agreement to pay
Development Fees during the remaining Development Fee Period(s)
applicable to such Development(s) open for business, prior to the
expiration or termination of this Agreement shall continue.
8. INDEMNIFICATION AND INSURANCE.
8.1 INDEMNIFICATION BY GREAT LAKES. Great Lakes shall defend, indemnify
and hold harmless Tall Pines and its officers, directors, agents,
employees, successors, assigns and Tall Pines Principals from and
against any and all claim, demands, causes of action, damages,
costs, and expenses (including reasonable attorneys' fees) to the
extent caused by the acts or omissions of, or failure to perform
under this Agreement, by Great Lakes, its contractors or consultants
or anyone directly or indirectly employed or controlled by any of
them.
8.2 INDEMNIFICATION BY TALL PINES. Tall Pines shall defend, indemnify
and hold harmless Great Lakes and its officers, directors, agents,
employees, successors - and assigns from and against any and all
claims, demands, causes of action, damages, costs, and expenses
(including reasonable attorneys' fees) to the extent caused by the
failure of Tall Pines to perform under this Agreement.
8.3 INSURANCE. Great Lakes shall maintain during the Term, at its sole
expense, one or more policies of insurance with insurers with a
Best's Key Rating of A or better, covering comprehensive general
liability, property damage, product liability, personal injury
liability, host liquor liability and such other insurance as shall
be required by applicable laws or regulations with minimum limits of
coverage deemed appropriate by Great Lakes in the exercise of its
reasonable business judgment. Great Lakes shall provide Tall Pines
with Certificates of Insurance evidencing the same covering each of
Great Lakes' Developments within thirty (30) days of the opening of
such Development.
9. NOTICES.
Whenever it is provided in this Agreement that any payment, notice,
demand, request, consent, approval, declaration or other communication
("Notice") must or may be given or served or whenever any such
communication is desired to be given with respect to this Agreement, each
such Notice must be in writing and either must be delivered in person with
receipt acknowledged or by a recognized next-day mail service with
significant delivery operations in the localities of all required senders
and recipients (and a copy must also be transmitted by facsimile),
addressed as follows:
If to Great Lakes: The Great Lakes Companies, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Attention: General Counsel
Fax:(▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to: King & Spalding, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax:(▇▇▇)▇▇▇-▇▇▇▇
If to Tall Pines: Tall Pines Development Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax:(▇▇▇)▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
The obligation to give any Notice required under this Agreement may be waived in
writing by the Party entitled to receive such Notice. The date the facsimile
copy of such Notice is sent will not constitute the effective date of such
Notice, but rather Notice under this Agreement will be deemed to have been duly
given or served on the date on which personally delivered or delivered by such
recognized next-day mail service, with receipt acknowledged, whichever date is
earlier.
10. MISCELLANEOUS.
10.1 NO JOINT VENTURE. Nothing contained in this Agreement will be
construed as creating a relationship of principal and agent,
partnership, or joint venture. Great Lakes will have no power or
right to obligate or bind Tall Pines in any manner whatsoever, and
Tall Pines will have no power or right to obligate or bind Great
Lakes in any manner whatsoever. The Parties agree not to contend to
the contrary or to attempt to enforce any contrary intentions in any
court. In addition, no Party will represent to third parties that it
is an agent, partner or joint venturer of the other.
10.2 ASSIGNMENT. This Agreement may not be assigned, transferred,
licensed, mortgaged, or otherwise encumbered by either Party in any
manner, by operation of law or otherwise, without the prior written
approval of the other Party; provided, however, as follows: (i) this
Agreement may be collaterally assigned to a lender by Great Lakes
without consent provided notice and reasonable information on the
terms that are provided to Tall Pines after written request; or (ii)
this Agreement may be assigned to any Affiliate of Great Lakes
without the consent of Tall Pines (but Great Lakes will provide
notice and reasonable
15
information on the terms to Tall Pines of any such assignment after
written request); or (iii) this Agreement maybe assigned by Great
Lakes in connection with any sale or transfer of all or
substantially all of its assets, whether by merger or sale of assets
or otherwise (including a sale), in which case Great Lakes shall
give Tall Pines timely notice of its intent to assign this Agreement
and reasonable evidence the assignee has assumed the
responsibilities and is capable of complying with the said
responsibilities of this Agreement; or (iv) this Agreement may be
assigned by either Tall Pines or its principals (as their interests
appear) to a family member of the principals including by sale or to
a trust for the benefit of a family member and may be assigned as
collateral by the Tall Pines Principals and family members. Any
attempt by a Party otherwise to assign or transfer any part or all
of this Agreement without the other Party's prior written approval
will be void ab initio and will constitute a material breach of this
Agreement.
10.3 MERGER AND INTEGRATION. This Agreement constitutes the entire
agreement of the Parties with respect to the subject matter hereof
and supersedes all prior written or oral agreements,
representations, or understandings, including the Master Agreement
and the Geographic Development Agreements entered into under the
Master Agreement. The Master Agreement and the Geographic
Development Agreements are hereby terminated, and each of such
agreements shall have no further force or effect.
10.4 AMENDMENT. This Agreement may not be modified except in writing
signed by the Parties.
10.5 CHOICE OF LAW. This Agreement will be governed by and interpreted in
accordance with the laws of the State of Wisconsin. If any dispute
arises out of or in connection with this Agreement, the Parties
consent to jurisdiction and venue in the United States District
Court for the Western District of Wisconsin or Dane County Circuit
Courts. The Parties each consent to jurisdiction of such court. The
prevailing Party in any litigation between the Parties will be
entitled to recover reasonable litigations costs and attorneys' fees
from the nonprevailing Party.
10.6 HEADINGS. Headings and other captions contained in this Agreement
are for reference purposes only and do not interpret, define or
limit the scope, extent or intent of this Agreement or any provision
of this Agreement.
10.7 [Reserved..]
10.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of
which will constitute one and the same instrument.
10.9 SURVIVAL. (a) The provisions of the following Sections will
expressly survive the expiration of the Term of this Agreement: 2.1,
2.2, 2.3, 2.4, 2.5, 2.6, 5.8 (for a period of one year only), 5.9,
5.10, 8.1, 8.2, 10.5, 10.12, 10.14, 10.16, 10.17, 10.18, and 10.19.
16
(b) The provisions of the following Sections will
expressly survive the termination of this Agreement by Tall Pines
because of a material, uncured default by Great Lakes: 2.1, 2.2,
2.3, 2.5, 5.1, 5.2, 5.3, 5.6, 5.7 (for a period expiring one year
after the last payment is due to Tall Pines hereunder (the "SURVIVAL
DATE")), 5.8 (for a period expiring on the Survival Date), 5.9,
5.10, 7.3, 8.1, 8.2, 10.5, 10.12, 10.14, 10.16, 10.17, 10.18 and
10.19.
(c) The provisions of the following Sections will
expressly survive the termination of this Agreement by Great Lakes
because of a material, uncured default by Tall Pines: 2.1, 2.2, 2.3,
2.4, 2.5, 2.6, 5.9, 5.10, 8.1, 8.2, 10.5, 10.12, 10.14, 10.16,
10.17, 10.18 and 10.19.
10.10 FORCE MAJEURE. No party will be deemed to be in default of any of
its obligations under this Agreement to the extent that the
performance thereof is delayed or rendered impossible by acts of
God, war, civil commotion, governmental action, fire, storm, flood,
explosion, strikes, walkouts, other industrial disturbances,
inability to obtain raw materials from usual sources or any other
cause, whether of the same or different nature, which is beyond its
reasonable control.
10.11 INTERPRETATION. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to
be effective and valid under applicable law, but if any provision or
portion of any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or portion of
any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such
invalid illegal or unenforceable provision or portion of any
provision had never been contained in this Agreement. The "term
including" means, "including, without limitation" whenever used in
this Agreement. All Section references are to sections in this
Agreement, unless otherwise specified.
10.12 BINDING EFFECT. This Agreement will bind the Parties and their
respective parents, subsidiaries, affiliates, heirs, successors and
assigns.
10.13 NO WAIVER. The failure of either Party to exercise any right, power
or remedy provided under this Agreement or otherwise available at
law or in equity, or to insist upon compliance by the other Party
with its obligations under this Agreement, and any custom or
practice of the Parties at variance with the terms of this
Agreement, will not constitute a waiver by such party of its rights
to exercise any such or other right, power or remedy or to demand
such compliance. Any of the terms or conditions of this Agreement
may be waived in writing at any time by the Party that is entitled
to the benefits thereof.
10.14 BENEFIT. This Agreement is not intended to be for the benefit of,
and will not be enforceable by, any person who or which is not a
party to this Agreement.
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10.15 FURTHER ASSURANCES. Each Party will attend meetings, execute further
documents and agreements and do all other things reasonably required
to carry out the terms and conditions of this Agreement in
accordance with its true intent.
10.16 REPRESENTATIONS. Each Party represents and warrants to the other
Party that (a) it is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation indicated in the description of the parties appearing
at the beginning of this Agreement; (b) this Agreement has been duly
authorized by all necessary corporate action, and has been duly
executed, attested and delivered by authorized signatories of that
party; and (c) it has all necessary corporate power and capacity to
enter into this Agreement and to perform its obligations under this
Agreement.
10.17 FEES AND EXPENSES. In the event of disputes between the parties
and/or their respective assigns, including a Purchaser, Affiliate or
Designee, the prevailing party shall be entitled to reasonable
attorneys' fees, costs and expenses including expert fees incurred
in enforcing the terms and provisions of this Agreement and the
non-prevailing party shall pay said fees, costs and expenses within
five (5) business days of there being a final decision or
non-appealable judgment of such disputes.
10.18 CONFIDENTIALITY.
(a) Tall Pines will not use or disclose any of the confidential
information of Great Lakes disclosed in connection with this
Agreement (including results of operations of any of the
Developments and plans with respect to future Developments) without
the prior express written consent of Great Lakes; provided, however,
that Tall Pines may disclose the confidential information of Great
Lakes, as may be reasonably necessary, to the legal and financial
advisors to Tall Pines or any of the Tall Pines Principals, and to
lenders and prospective lenders to Tall Pines or any of the Tall
Pines Principals, if such parties are informed of and agree to be
bound by the obligations of confidentiality set forth in this
Section.
(b) The obligations of confidentiality hereunder shall survive the
termination or expiration of this Agreement.
10.19 NO KNOWLEDGE OF DEFAULT. Each party represents to the other that it
has no knowledge of (a) any default by either party under the Master
Agreement nor any of the Geographic Development Agreements; (b) any
fact or circumstance that would have been reasonably likely to
result in a default under the Master Agreement or any of the
Geographic Development Agreements (in the absence of this
Agreement); or (c) any fact or circumstance that would constitute a
default under this Agreement or that is reasonably likely to result
in a default under this Agreement.
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IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement as of the 25th day of July, 2004.
TALL PINES DEVELOPMENT
CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Name:
Title:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇ ▇▇▇▇▇▇▇
------------------------------
▇▇▇ ▇▇▇▇▇▇▇
THE GREAT LAKES COMPANIES, INC.
BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: CHAIRMAN
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EXHIBIT A
GEOGRAPHIC DEVELOPMENT AGREEMENTS
1. GEOGRAPHIC DEVELOPMENT AGREEMENT (SANDUSKY DEVELOPMENT) DATED OCTOBER 5,
1998.
2. GEOGRAPHIC DEVELOPMENT AGREEMENT (TRAVERSE CITY DEVELOPMENT) DATED MARCH
1, 2002.
3. GEOGRAPHIC DEVELOPMENT AGREEMENT (KANSAS CITY DEVELOPMENT) DATED MAY 23,
2002.
20
EXHIBIT B
DATE ON WHICH DEVELOPMENT FEES ARE NO
DEVELOPMENT LONGER PAYABLE
----------------------------------------------------------------------
WISCONSIN DELLS, WI N/A (NO DEVELOPMENT FEES PAYABLE)
----------------------------------------------------------------------
SANDUSKY, OHIO MARCH 1, ▇▇▇▇
----------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ APRIL 1, ▇▇▇▇
----------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ JUNE 1, 2013
----------------------------------------------------------------------
SHEBOYGAN, WISCONSIN N/A (NO DEVELOPMENT FEES PAYABLE)
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
21
EXHIBIT C
BASE DEVELOPMENT FEES AND INCENTIVE FEES
1. Base Development Fees - Sandusky, Traverse City and Williamsburg.
The Base Development Fees for the Sandusky Development and the Traverse
City Development will be two percent (2%), and the Base Development Fees
for the Williamsburg Development will be one and three quarters percent
(1.75%).
2. Incentive Development Fees - Sandusky.
Incentive Development Fees will be payable with respect to the Sandusky
Development, consisting of the Tier-One Incentive Development Fee and the
Tier-Two Incentive Development Fee.
The Tier-One Incentive Development Fee will be an amount equal to
one-percent (1%) of, Revenues earned from the Sandusky Development, over
and above the Base Development Fees for the Sandusky Development, due and
payable for a Fiscal Year when:
(a) Revenues per Available Room for the Sandusky Development exceed
*** dollars ($***) per day for such Fiscal Year, Adjusted for
Inflation,
(b) Gross Operating Profit for the Sandusky Development exceeds ***
percent (***%) for such fiscal Year; and
(c) The Sandusky Development earns a minimum Cash-on-Cash Return on
Equity of *** percent (***%) for such Fiscal Year. If only item (c)
above is achieved for a Fiscal Year with respect to the Sandusky
Development, Tall Pines will be entitled to payment of one-half
(1/2) of the Tier-One Incentive Development Fee for such Fiscal
Year.
The Tier-Two Incentive Development Fee will be an amount equal to
one percent (1%) of Revenues earned from the Sandusky Development
over and above the Base Development Fees and Tier-One Incentive
Development Fees for the Sandusky Development, due and payable for a
Fiscal Year when:
(d) Revenues per Available Room for the Sandusky Development
exceeds *** dollars ($***) per day for such Fiscal Year, Adjusted
for Inflation;
(e) Gross Operating Profit for the Sandusky Development exceeds ***
percent (***%) for such Fiscal Year; and
(f) The Sandusky Development earns a minimum Cash-on-Cash Return on
Equity of *** percent (***%) for such Fiscal Year.
*** - Confidential treatment requested - omitted and filed separately with the
Commission.
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The Incentive Development Fees will be payable annually, in arrears,
within forty-five (45) days following the end of each Fiscal Year
for the Sandusky Development. The Incentive Development Fees will be
payable through the date specified on EXHIBIT B for the Sandusky
Development.
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