RIVERSIDE MASTER
LEASE
THIS LEASE ("Lease") is entered into by and between CAX RIVERSIDE,
L.L.C., a Delaware limited liability company ("Lessor"), and RIVERSIDE GOLF
COURSE COMMUNITY, L.L.C., a Delaware limited liability company ("Lessee"), and
is effective on the date last executed by Lessor and Lessee (the "Effective
Date").
WITNESSETH:
Article 1 Definitions.
1.1 Capital Expenditures. Those arms-length expenditures customarily
characterized as capital expenditures in accordance with generally accepted
accounting principles consistently applied including but not limited to the
costs of developing additional residential phases, nine additional golf holes,
community centers, golf pro-shop, marina, water and sewer treatment plant,
expansion, roads and related infrastructure together with construction interest
thereon.
1.2 Expenses. The aggregate amount of monies actually paid by the
Lessee in connection with the operation of the Premises pursuant to arms-length
transactions during each respective Lease Quarter and Lease Year, as the case
may be, except as hereinafter provided to the contrary, for (i) Labor Costs (as
defined hereinbelow), (ii) general maintenance, repairs and replacements, (iii)
premiums actually paid by the Lessee for insurance customarily carried for
property comparable to the Premises, (iv) charges (including applicable taxes)
for or in connection with real estate taxes, assessments, water charges and
sewer rents, (v) customary and reasonable accounting and auditing expenses and
customary and reasonable attorneys' fees, (vi) management fees paid to a
managing agent reasonably approved by Lessor, (vii) fees paid to unaffiliated
third parties for consulting, engineering or other professional services
provided that such fees are customary and commercially reasonable in amount,
(viii) other expenses which are not discretionary and are required by law, (ix)
sales tax paid hereon, if any, and (x) reserves for Capital Expenditures (as
defined below), and (xi) other commercially reasonable expenses in connection
with, and related solely to, the operation and maintenance of the Premises which
are usual and customary for comparable properties located in the vicinity of the
Premises. All of the foregoing items shall be substantiated by evidence
satisfactory to Lessor in its reasonable discretion. Without limiting the
generality of those items which shall not be included in, or which shall be
excluded from, Expenses, the following shall be specifically excluded from
Expenses:
(a) general overhead expenses of the Lessee, whether in connection
with the operation of the Premises or otherwise;
(b) depreciation, amortization and other non-cash items;
(c) prepaid expenses which are not customarily prepaid in the
ordinary course of business; and
Capital Expenditures other than Capital Expenditures which relate to
minor capital improvements, which shall be deemed to be an Expense but only (x)
if Lessor shall have approved same in writing, which approval shall not be
unreasonably withheld and (y) in an amount not to exceed for the applicable
period, the amortization for such improvements determined on a straight line
basis over the useful life of the improvement in accordance with generally
accepted accounting principles, consistently applied) and other than those
Capital Expenditures contemplated through reserves.
1.3 Gross Revenue. The aggregate of all revenue from all sources in
respect of the operation of each Phase of the Premises (as defined hereinbelow)
(including, without limitation, pursuant to or in connection with any leases of
mobile home spaces, golf course and marina excluding any income from the
operation of the water and sewer treatment plant) received by the Lessee for
each respective Lease Quarter and Lease Year, as the case may be, other than
condemnation awards and insurance proceeds (except for the proceeds of rental
loss insurance, which shall be deemed to be Gross Revenue) to the extent
actually used by Lessee to restore the affected portion of the Premises, and
security deposits, except to the extent such sums are applied to the payment of
any rent, additional rent or other sums due under any of the leases; provided,
however, that not withstanding anything to the contrary contained in this Lease,
Gross Revenue shall not include any item of revenue unless such item would be
treated as "rents from real property" within the meaning of Section 856(d) of
the Code, determined as if such item had been received or accrued by CAX.
1.4 Labor Costs. All customary and reasonable expenses actually paid by
Lessee pursuant to arms-length transactions during any Lease Quarter which are
directly related to the employment of personnel whose responsibilities relate
solely to the Premises, including amounts paid for wages, salaries and other
compensation for services, payroll, social security, unemployment and other
similar taxes, workers compensation, insurance, disability benefits, pensions,
hospitalization, retirement plans and group insurance, uniforms and working
clothes and the cleaning thereof, and expenses imposed pursuant to any
collective bargaining agreement.
1.5 Lease Quarter. The period beginning on November 20, 1998 and ending
March 31, 1999, and each subsequent three (3) month period thereafter until the
expiration of the Term (as defined hereinbelow).
1.6 Lease Year. The period beginning on January 1, 1999 and ending on
December 31, 1999, and each subsequent twelve (12) calendar month period
thereafter
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until the expiration of the Term (as defined hereinbelow).
1.7 Net Cash Flow. For each respective Lease Quarter and Lease Year, as
the case may be, the amount, if any, by which Gross Revenue exceeds Expenses for
such Lease Quarter or Lease Year.
1.8 Phases. There are currently planned five phases of development for
a total of 1,186 units broken down as follows:
Phase No. Proposed Units
Phase I (completed) 244
Phase II 100
Phase III 100
Phase IV 100
Phase V 100
Phase VI 100
Unallocated 442
Total 1,186
============================ ==========================
Phase I is full developed having 244 fully developed spaces with approximately
220 spaces occupied by residents paying rent.
1.9 CAX. Commercial Assets, Inc., a Maryland corporation which is the
sole member of Lessor.
1.10 Code. The Internal Revenue Code of 1986, as amended.
Article 2 Grant and Term.
2.1 Premises. In consideration of the rents, covenants and agreements
herein set forth, Lessor hereby leases to Lessee and Lessee hereby rents from
Lessor those certain premises, fixtures and improvements located on each Phase
thereon, located in Hillsborough County, Florida, including the mobile home
park, golf course and marina, the street address of which is ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and which is more particularly described on Exhibit "A"
attached hereto (collectively, the "Premises"). Lessee hereby accepts the
Premises "as is," without any representation or warranty of any kind, either
express or implied, on behalf of Lessor. Accordingly, Lessee acknowledges and
agrees that is has inspected the Premises, including, but not limited to:
structural elements, sewage, utility systems, and other facilities; the soils
and geology of the
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premises; the zoning and other legal status of the Premises; the habitability,
merchantability and fitness of the Premises; the adequacy of the Premises for
any particular purpose; and the Premises' compliance with applicable codes,
laws, regulations, statutes, ordinances, covenants, conditions, and restrictions
of any kind.
2.2 Quiet Enjoyment. Upon payment by Lessee of the Rent (as defined
hereinbelow) herein provided, and upon the observance and performance of all
terms and provisions hereunder on Lessee's part to be observed and performed,
Lessee shall have the right to quiet enjoyment of the Premises subject to the
terms, conditions and covenants of this Lease.
2.3 Term. The original term of this Lease shall commence November 20,
1998, and shall be for a period of fifty (50) years, expiring on December 1,
2049. The phrase "Term" as used in this Lease shall mean collectively, the
Initial Term and any Renewal Term (as hereinafter defined) for which an option
has been exercised by Lessee. Each Phase of the Premises will have its own
commencement date but shall expire on December 1, 2049. The Renewal Terms and
expiration dates shall be coterminous for all phases.
2.4 Renewal Terms. If Lessee shall have kept and performed each and
every covenant, agreement and provision herein, then Lessee may, at Lessee's
option, renew this Lease for four (4) additional "Renewal Terms" (herein so
called) of five (5) years each. Each Renewal Term shall commence on the date
immediately following the last day of the Initial Term or the preceding Renewal
Term, as the case may be. Such option is to be exercised by Lessee by written
notice thereof given to Lessor not later than six (6) months nor earlier than
fifteen (15) months prior to the expiration of the Initial Term or the preceding
Renewal Term, as the case may be. If Lessee fails or omits to give Lessor the
written notice herein required within the prescribed time, it shall be deemed
without further notice and without further agreement, that Lessee elected not to
exercise the option to extend the term of this Lease.
Article 3 Rent.
3.1 Lessee agrees to pay to Lessor as "Base Rent" (herein so called)
for Phase I of the development on the Premises, the sums indicated on Exhibit
"B" attached hereto and made a part hereof, which amounts are calculated using
Lessor's land acquisition costs of $________ (the "Acquisition Amount") plus the
cost of developing the nine additional golf holes, golf pro-shop and marina
times the rent factor percentage shown on Exhibit B (the "Base Rent Factor").
Base Rent shall be payable monthly in equal monthly installments, plus all
applicable sales tax. Rent shall commence on the first day of the Initial Term
and shall be due and payable in advance on the first day of each calendar month
thereafter without demand, set-off, or deduction whatsoever, at the office of
the Lessor designated for notices. Lessee also shall pay all taxes, assessments
and/or
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governmental charges of any kind and nature whatsoever now or subsequently
levied or assessed upon the privilege of renting the Premises or upon the amount
of rent collected therefor.
3.2 Percentage Rent
(a) In addition to the payment of Base Rent, Phase Base Rent
and Additional Rent (as defined in Sections 3.3 and 3.4 below), Lessee shall
also pay to Lessor, within thirty (30) days after the end of each Lease Quarter,
percentage rent ("Percentage Rent") equal to 50% of Net Cash Flow. The balance
of Net Cash Flow shall be retained by Lessee. Notwithstanding anything in this
paragraph 3 to the contrary, the Net Cash Flow paid as Percentage Rent within
thirty (30) days after the end of each Lease Quarter shall be based upon amounts
calculated on an accrual basis. Such calculations shall be prepared in
accordance with generally accepted accounting principles. In accordance with the
provisions of 3.2(c) hereinbelow, Lessee shall at the end of each Lease Year
re-calculate the proper amount of the Percentage Rent that should have been paid
during such Lease Year and shall make such adjustments as are necessary in
accordance with the provisions of paragraph 3.2(c). Notwithstanding anything
expressed or implied to the contrary in this Lease, amounts payable to Lessor as
Percentage Rent shall be determined using only that revenue of Lessee which
would qualify as "rents from real property" within the meaning of Section 856(d)
of the Code, determined as if received or accrued directly by CAX. In the event
that there is a final non-appealable decision by a court of competent
jurisdiction or by the Internal Revenue Service, or if Lessor determines, that
any item of revenue of Lessee was improperly or erroneously included in Gross
Revenue in determining Net Cash Flow and the amount of Rent payable to Lessor,
then, without prejudice to any other remedies that Lessor may have hereunder,
Lessor shall, as promptly as practicable, refund to Lessee the resultant amount
of Rent received in error. Lessor and Lessee shall, to the extent permitted by
law, treat any such refund for all tax and other purposes as a retroactive
adjustment to Rent for the period in which the item originally arose.
(b) Each payment of Percentage Rent shall be accompanied by a
revenue and expense statement (prepared in accordance with generally accepted
accounting principles consistently applied in such detail and with such back-up
information as shall be reasonably required by Lessor) certified by Lessee as
true, correct and complete, setting forth, among other things, Gross Revenue and
Expenses for such Lease Quarter and the calculation and application of Net Cash
Flow and Percentage Rent (if any) for such Lease Quarter.
(c) If the installments of Percentage Rent paid during and
with respect to such Lease Year exceed the amount of Percentage Rent as
recomputed on an annual basis, the amount of such excess shall be credited
against the installments of Percentage Rent next coming due or shall be refunded
to Lessee in the event no further installments
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of Percentage Rent are payable hereunder. If the Percentage Rent paid to Lessor
during such Lease Year is less than the amount of Percentage Rent as recomputed
on an annual basis which should had been paid to Lessor, the amount of such
deficiency shall be due and payable upon delivery of such annual financial
statement. If such difference between Percentage Rent actually due and
Percentage Rent paid is equal to or greater than five percent (5%) of the amount
of Percentage Rent actually due or regardless of the amount of the deficiency,
if the deficiency is a result of fraud or willful misconduct on the part of
Lessee, Lessee shall also pay to the Lessor upon delivery of such annual
financial statements an additional amount equal to six percent (6%) of such
underpayment as and for liquidated damages to compensate Lessor for the loss of
use of such sums during the applicable Lease Year.
3.3 Phase Base Rent and Unit Rent.
Lessee agrees to pay to Lessor as "Base Rent" for Phases II, III, IV, V
and VI of the Premises (the Phase Base Rent) , an amount calculated by using
Lessor's allocated land acquisition costs of $3,000.00 per Unit for each Phase
plus all per Unit allocated Capital Expenditures and Marketing Costs, as
hereinafter defined, times the rent factor of 10% per annum (the "Phase Base
Rent Factor"). Lessor and Lessee agree to amend this Lease to state the actual
total Capital Expenditures and Marketing Costs for each Phase upon each Phase
obtaining a certificate of occupancy for the first Unit within that Phase (the
"Occupancy Date") including all closing costs, expenses, professional fees and
other allocations. Which amount will be divided by the number of Units in that
Phase to establish a per unit cost (the "Unit Cost") at the time a Unit is
occupied by a resident and that resident is paying rent the Lessee agrees to pay
Lessor additional base rent per occupied Unit equal to five percent (5%) of (the
"Unit Rent"). Phase Base Rent shall be payable monthly in equal monthly
installments, plus all applicable sales tax, if any, commencing on the first day
of the seventh (7th) month following the Occupancy Date (the "Rent Commencement
Date"). Prior to the Rent Commencement Date, funds advanced by Lessor to Lessee
with respect to Capital Expenditures, Marketing Costs, and the Unit Costs shall
bear interest at the rate of ten percent (10%) per annum which interest shall be
capitalized as of the Rent Commencement Date. Rent shall commence on the Rent
Commencement Date for that Phase and shall be due and payable in advance on the
first day of each calendar month thereafter without demand, set-off, or
deduction whatsoever, at the office of the Lessor designated for notices. If
available cash flow is inadequate to satisfy any Phase Base Rent or Unit Rent,
Lessee shall have the right to accrue the balance due Lessor until the cash flow
is adequate to service Phase Base Rent or Unit Rent for each Phase. Any unpaid
Phase Base Rent or Unit Rent shall be paid to Lessor prior to any payment of
percentage rent on any Phase of the Development. Lessor shall advance at the
request of Lessee the Capital Expenditures to the Lessee for each Phase in
accordance with a Phase Development Budget previously approved in writing by
Lessor. Lessor shall also advance, at the request of Lessee, the Lessee's share
of Marketing Costs allocated to each Phase pursuant to a Phase Marketing Budget
previously approved
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in writing by Lessor (the "Marketing Costs").
3.4 Additional Rent.
Lessee shall pay as "Additional Rent" (herein so called) all other sums
and charges required to be paid by Lessee pursuant to the terms of this Lease.
The terms Base Rent, Phase Base Rent, Unit Rent, Percentage Rent and Additional
Rent are sometimes referred to herein collectively as "Rent." Lessee also shall
pay all taxes, assessments and/or governmental charges of any kind and nature
whatsoever now or subsequently levied or assessed upon the privilege of renting
the Premises or upon the amount of Rent collected therefor.
3.5 Past Due Rent.
If the Lessee shall fail to pay when due and payable any Base Rent, or
any other amounts or charges provided for in this Lease, and which failure is
not cured within fifteen (15) days after written notice of such failure from
Lessor, there shall become due and payable, in addition, an amount equal to ten
percent (10%) of the amount past due to cover the Lessor's additional costs in
handling delinquent charges. Further, if Lessee shall fail to pay within fifteen
(15) days after the same is due and payable any Base Rent, Additional Rent or
any other amounts or charges provided for in this Lease, and which failure is
not cured within fifteen (15) days after written notice of such failure from
Lessor, such past due amount shall bear interest at the lesser of the maximum
rate permitted by law or eighteen percent (18%) per annum (herein the "Default
Rate") from the date due until paid.
Article 4 Real Estate Taxes.
Lessee agrees to pay prior to delinquency all taxes, public and/or
private assessments and governmental charges of any kind and nature whatsoever
now or subsequently levied or assessed against the Premises. Lessee may contest
any such taxes provided Lessee tenders full payment of same to Lessor prior to
initiating such contest.
Article 5 Utilities.
To the extent not paid for by mobile home residents and sub-lessee of
the marina and golf course, Lessee covenants and agrees to pay all charges for
water, sewer, gas, electric, telephone, and other utilities and services used or
consumed in or upon the Premises as and when the charges for the same shall
become due and payable, and shall not allow the same to become delinquent or a
lien upon the Premises.
Article 6 Conduct of Business by Lessee.
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6.1 Use of Premises. The Premises shall be used by Lessee solely for
the purpose of operating thereon a mobile home community and related amenities,
and for subleasing a golf course and marina and related businesses. Lessee shall
not suffer or permit all or any part of the Premises to be used for any other
business or purpose or by any other person without the prior written consent of
Lessor, which consent shall not be unreasonably withheld.
6.2 Governmental Regulation. Lessee, at its expense, shall comply with
all federal, state and local laws, ordinances, orders, rules, regulations
(including, without limitation, the Americans with Disabilities Act), all
agreements and covenants of public record pertaining to all or any portion of
the Premises now or hereafter in force, and all recommendations of the Fire
Underwriters Rating Bureau, with respect to the Premises. Without limiting the
foregoing, Lessee shall be required to effect any structural repair,
improvement, alteration or other change to the Premises and improvements thereon
by reason of any such laws, ordinances, rules, regulations, covenants or
agreements.
6.3 Waste or Nuisance. Lessee shall not commit or suffer to be
committed any waste upon all or any portion of the Premises or any nuisance or
other act or thing which may disturb the quiet enjoyment of any surrounding
property owners.
Article 7 Covenants of Lessee.
Lessee covenants and agrees that, at all times during the Term of this
Lease:
7.1 Use of Premises. Lessee will use commercially reasonable efforts to
sublease substantially all of its interest in the Premises.
7.2 Source of Income. Substantially all of the gross income derived by
Lessee pursuant to such subleases will constitute income that would qualify as
"rents from real property" within the meaning of Section 856(d) of the Code,
determined as if such income had been received or accrued by CAX. Substantially
all of the gross income derived by Lessee from all sources will constitute
either "rents from real property" as described in the preceding sentence, or
other income of a character which is described in Section 856(c)(3) of the Code.
7.3 Tax Classification. Lessee will not be treated as a corporation for
federal income tax purposes; provided, however, that it may be wholly owned and
treated as an entity that is disregarded for federal income tax purposes
pursuant to the rules of Section 301.7701-3(b)(1)(ii) of the Treasury
Regulations, with its assets and income treated as those of its owner.
7.4 Assets. Lessee will not hold securities of any one issuer, within
the meaning of Section 856(c)(4)(B) of the Code, in an amount that exceeds 5
percent of the value of
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Lessee's gross assets. Lessee will not hold any direct or indirect equity
interest in any entity that is treated as a corporation for federal income tax
purposes.
7.5 Ownership of REIT Stock. Lessee, together with those persons who
directly and indirectly own any interest in Lessee, shall not own, individually
or in the aggregate, directly, indirectly or by attribution (as determined for
purposes of Section 856(d) of the Code),10 percent or more in value of the stock
of CAX.
7.6 Cooperation. Lessee will cooperate with Lessor in ascertaining
compliance with each of the covenants set forth in this Article 7. Such
cooperation shall include, without limitation, to the extent requested by
Lessor, providing financial statements, copies of subleases and other
information, completing questionnaires and certificates, and causing
knowledgeable officers, employees or agents to be available to answer questions
for Lessor and its agents. The covenant to cooperate as set forth in this
paragraph 7.6 shall continue beyond the term of this Lease to the extent
reasonably requested by Lessor.
Article 8 Maintenance of Premises.
8.1 Maintenance by Lessee. Lessee shall at all times keep the Premises
and all improvements located thereon (including, without limitation, all slabs,
footers, walls, roofs and other structural elements, all glass, windows, floors,
partitions, doors, fixtures, equipment and appurtenances thereof, lighting,
heating, plumbing fixtures and air conditioning equipment, but excluding all
items including mobile home units owned by residential tenants), in good order
and repair, and in a clean and sanitary condition, and shall make all necessary
repairs, ordinary and extraordinary, foreseen and unforeseen, including all
necessary replacements, alterations, additions and betterments, using material
and equipment of like kind and quality to the original improvements.
If Lessee fails to maintain and repair Premises and improvements
thereon as required hereunder to the satisfaction of Lessor, then within thirty
(30) days after written request, Lessor shall then have the right to enter the
Premises to make such repairs at Lessee's expense, without liability to Lessee
for any loss or damage that may accrue to Lessee's merchandise, fixtures, or
other property or to Lessee's business by reason thereof, and upon completion
thereof, Lessee shall pay as Additional Rent Lessor's cost of making such
repairs, plus ten percent (10%) of the cost thereof for overhead, within thirty
(30) days of presentation of the ▇▇▇▇ therefor, which shall be conclusive
evidence of the amount of such cost. Any sums not so paid shall bear interest at
the Default Rate from the date due until paid.
8.2 Delivery at Expiration.
Upon the expiration of the tenancy hereby created, Lessee shall
surrender the Premises in the same condition as existing upon delivery of
possession thereof under this
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Lease, reasonable wear and tear excepted, and shall surrender all keys for the
Premises to Lessor at its place then fixed for the payment of Rent. Lessee shall
remove all of its trade fixtures and any alterations or improvements which have
not become the property of the Lessor pursuant to Section 9.1 hereof, before
surrendering the Premises as aforesaid and shall repair any damage to the
Premises or improvements thereon caused thereby. Lessee's obligation to observe
or perform this covenant shall survive the expiration or termination of this
Lease.
Article 9 Fixtures, Improvements.
9.1 Ownership of Improvements. All alterations, replacements and
improvements permanently affixed to the Premises by Lessee shall become the
property of Lessor upon termination of this Lease or any extension or renewal
and shall remain on the Premises in absence of a written agreement of Lessor to
the contrary. Upon expiration of this Lease, or any renewal term thereof, any
property belonging to Lessee which Lessee has failed to remove from the Premises
shall forthwith become the property of Lessor and Lessee shall be liable for the
cost of removal thereof. Notwithstanding the foregoing, however, mobile home
units may be removed at any time by the owners thereof.
9.2 Lessee Shall Discharge All Liens. Except as provided in Section
21.11 below, Lessee shall not have any authority to create any liens for labor,
services, materials or other items required by any improvements upon the
Premises, and the interest of Lessor shall not be subject to liens for
improvements made by or on behalf of Lessee. Lessee shall promptly pay all
contractors and materialmen working on the Premises on its account, so as to
minimize the possibility of a lien attaching to any of the Premises. Should any
such lien be made or filed, Lessee shall notify Lessor immediately and bond
against or discharge the same within thirty (30) days after such lien is made or
filed.
Article 10 Insurance and Indemnity.
10.1 Liability Insurance. Lessee shall procure and maintain throughout
the Term, at its sole expense, (a) Workers' Compensation and Comprehensive
General Liability Insurance (with contractual liability endorsement) insuring
Lessor and Lessee against all claims arising out of Lessee's use or occupancy of
the Premises or the condition of the Premises, in an amount not less than
$1,000,000 with respect to injuries to, or death of, any one person, and an
amount not less than $2,000,000 with respect to any one occurrence or disaster,
and an amount not less than $500,000.00 with respect to property, and (b)
business interruption insurance, insuring loss of profits in the event of an
insured peril damaging the Premises.
10.2 Casualty Insurance. Lessee shall keep in force at its own expense
throughout the term of this Lease all risk property insurance covering fire and
extended coverage, vandalism and malicious mischief, sprinkler leakage, and
other perils of direct
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physical loss or damage insuring the common area improvements located on the
Premises for the full replacement value thereof. Lessee will have such casualty
insurance policy endorsed to show Lessor as a loss payee.
10.3 General. Lessee's liability and casualty insurance policies will
provide for at least thirty (30) days notice to Lessor before reduction of
policy limits, cancellation, or any other policy changes adverse to the Lessor's
interest. Lessee will furnish Lessor with a copy of policy or policies of such
insurance and/or certificates thereof prior to the commencement of the Initial
Term and thereafter within fifteen (15) days after Lessor's request. If Lessee
shall not comply with the provisions of this Article 10, Lessor may, at its
option, cause insurance as aforesaid to be issued, and in such event, Lessee
agrees to pay the premium for such insurance plus ten percent (10%) of the cost
thereof for overhead, within five (5) days of Lessor's demand. Any sums not so
paid shall bear interest at the Default Rate from the date due until paid.
Lessee agrees to periodically increase the limits of the insurance required
hereunder to commercially reasonable limits.
10.4 Indemnity by Lessee. Lessor shall not be liable to Lessee or
Lessee's employees, agents, visitors or any other person for injury to person or
damage to or loss of property on or about the Premises, or arising out of the
use of the Premises by Lessee, or the conduct of its business thereon, or
arising out of any breach or default by Lessee in the performance of its
obligations hereunder, or resulting from any other cause except Lessor's sole
negligence. Lessee shall indemnify, save harmless and defend Lessor from and
against any and all suits, claims, actions, damages, liability and expense,
including attorneys' fees, in connection with loss of life, personal injury
and/or damage to property arising with respect to the Premises or any part
thereof, or occasioned wholly or in part by any act or omission of Lessee, its
officers, agents, servants, contractors, employees or invitees.
10.5 Employer's Liability Insurance. Lessee shall, throughout the term
of this lease or any renewal thereof, maintain such workmen's compensation or
employer's liability insurance as may be required by law and shall indemnify and
hold harmless the Lessor against any loss, claim or demand of employees, agents,
contractors and subcontractors of the Lessee.
10.6 Waiver of Subrogation. Lessor and Lessee hereby release each other
from any and all liability or responsibility to the other or anyone claiming
through or under them by way of subrogation or otherwise from any loss or damage
to property caused by fire or any other perils insured in policies of insurance
covering such property, even if such loss or damage shall have been caused by
default or negligence of the other party or anyone for whom such party may be
responsible.
Article 11 Assignment and Subletting.
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Except for subleases for the operation and maintenance of the Golf
Course, Marina and related facilities to Riverside Golf Course and Marina,
L.L.C., a Delaware limited liability company and the water and sewer treatment
facilities to Riverside Utilities, L.L.C., a Delaware limited liability company
and residential lot leases or tenancies, and other than as permitted in
Paragraph 21.11 herein, Lessee shall not (a) assign, or in any other manner
transfer this Lease or any estate or interest therein; (b) sublet the Premises
or any part thereof; (c) permit the transfer of ownership interests in Lessee so
as to result in a change in the control of Lessee; or (d) permit any other
person to become Lessee by merger, consolidation, or otherwise (all of the above
being a "Transfer"), without the prior written consent of Lessor, such consent
to be withheld in the sole and absolute discretion of Lessor. Consent by Lessor
to one or more Transfers shall not operate as a waiver of Lessor's rights as to
any subsequent Transfer.
Lessee shall give Lessor at least sixty (60) days advance written
notice of any proposed Transfer, accompanied by a copy of the proposed Transfer
documents, including such additional information, including financial
information, as Lessor reasonably requests regarding such transferee.
Article 12 Events of Default/Remedies.
12.1 Default. Lessee shall be deemed in default of its obligations
under this Lease upon the occurrence of any of the following:
(a) Lessee's failure to pay Rent when due, which default is
not cured within fifteen (15) days after written notice thereof by Lessor to
Lessee;
(b) Lessee's failure to perform any other covenant, promise,
or obligation of this Lease, other than the payment of Rent, for a period of
more than thirty (30) days after written notice thereof by Lessor to Lessee,
except that this thirty (30) day period shall be extended for a reasonable
period of time if the alleged default is not reasonably capable of cure within
said thirty (30) day period and Lessee proceeds to diligently cure the default;
(c) Lessee shall be late twice during any twelve (12) month
period in the payment of Rent or other sums or charges due Lessor under this
Lease, or shall repeatedly default in the keeping, observing or performing of
any other covenants or agreements herein contained to be kept, observed or
performed by Lessee (provided notice of such non-payment or other defaults shall
have been given to Lessee, but irrespective of whether or not Lessee shall have
timely cured any such payment or other default of which notice was given);
(d) The appointment of a receiver or trustee for Lessee;
(e) Lessee voluntarily petitions for relief under, or
otherwise seeks the
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benefit of, any bankruptcy, reorganization, or insolvency law;
(f) The sale of Lessee's interest under this Lease by
execution or other legal process;
(g) Lessee's abandonment of the Premises during the term of
this Lease;
(h) Lessee's making an assignment of this Lease for the
benefit of creditors;
(i) Any sale, transfer, assignment, subleasing, concession,
license, or other disposition prohibited under Article 11 hereof; or
(j) Lessee shall do or permit to be done anything that creates
a lien upon the Premises and shall fail to obtain the release of any such lien
or to transfer the lien to bond as required herein.
12.2 Remedies. In the event of any default hereunder, Lessor shall be
entitled to declare this Lease to be terminated and re-enter upon and take
possession of the Premises with prior written notice to Lessee, whereupon the
term hereby granted and all right, title and interest of Lessee in the Premises
shall terminate. Such termination shall be without prejudice to Lessor's right
to collect from Lessee any Rent that may have accrued prior to such termination,
or to recover damages suffered as a consequence of the breach of a covenant
contained in Article 7, or the falseness of a representation contained in
paragraph 21.10 hereof.
12.3 Legal Expenses. In case suit be brought for recovery of possession
of the Premises, for the recovery of Rent or any other amount due under the
provisions of this Lease, or because of the breach of any other covenant herein
contained on the part of the Lessee to be kept or performed, Lessee shall pay to
Lessor all expenses incurred therefor, including attorneys' fees.
Article 13 Access by Lessor.
Lessor or Lessor's agents shall have the right, after reasonable prior
notice to Lessee, to enter the Premises to show them to prospective purchasers.
Article 14 Lessee's Property.
14.1 Taxes on Lessee's Leasehold. Lessee shall be responsible for and
shall pay before delinquency, all municipal, county, state and federal taxes
assessed during the term of this Lease against personal property and trade
fixtures of any kind, owned by or placed in, upon or about the Premises by
Lessee.
13
14.2 Loss and Damage. Lessor shall not be liable for any damage to
property of Lessee or of others located on the Premises, nor for the loss of or
damage to any property of Lessee or of others by theft or otherwise. Lessor
shall not be liable to Lessee for and Lessee shall hold Lessor harmless from and
indemnify Lessor against any claims arising from injury to or death of persons
or damage to property resulting from fire, explosion, gas, electricity, water,
flood, air pollution, rain or leaks from any part of the Premises or from the
pipes, appliances or plumbing works or by dampness or by any other cause of
whatever nature. Lessor shall not be liable to Lessee for any such damage caused
by other Lessees or person in the Premises, occupants of any of the Premises or
of adjacent property, or the public or caused by operations in construction of
any private, public or quasi-public work.
14.3 Notice by Lessee. Lessee shall give immediate notice to Lessor in
case of fire or other casualty or accidents in the Premises or in the building,
or of defects therein or in any fixtures or equipment.
Article 15 Holding Over, Successors.
15.1 Holding Over. This Lease and the tenancy hereby created shall
cease and terminate at the end of the Initial Term, or any Renewal Term, as the
case may be, without the necessity of any notice from either Lessor or Lessee to
terminate the same, and Lessee hereby waives notice to vacate the Premises and
agrees that Lessor shall be entitled to the benefit of all provisions of law
respecting the summary recovery of possession of premises from a Lessee holding
over to the same extent as if statutory notice had been given.
Any holding over after the expiration of the term hereof, with the
consent of the Lessor, shall be construed to be a tenancy from month to month
for the Rent provided herein (prorated on a monthly basis) and shall otherwise
be on the terms and conditions herein specified, so far as applicable.
15.2 Successors. All rights and liabilities herein given to or imposed
upon, the parties hereto shall insure to the benefit of and be binding upon
their respective heirs, executors, administrators, successors and assigns, and
if there shall be more than one Lessee, they shall all be bound jointly and
severally by the terms, covenants and agreements herein. No rights, however,
shall inure to the benefit of any assignee of Lessee unless the assignment to
such assignee has been approved by Lessor in writing as provided elsewhere in
this Lease.
Article 16 Condemnation.
If the whole of the Premises or such a portion thereof as will make the
Premises unusable for the purpose leased, as reasonably determined by Lessor, be
condemned or taken in any manner for public use, then in either event the Term
shall cease and come
14
to an end as of the date of the vesting of title in such public authority and
all Rent payable by Lessee to Lessor hereunder shall be paid by Lessee up to the
date of the taking. All compensation and damages awarded in connection with any
such taking of the Premises shall be allocated as follows: (i) to Lessor for its
fee interest in the Premises (including its interest as Lessor under this Lease,
and its reversionary interest in the improvements located on the Premises); and
then, (ii) to Lessee for its leasehold estate and its fee interest in the
improvements (subject to Lessor's reversionary interest therein) immediately
prior to such taking. If a portion of the Premises is condemned or taken and
this Lease is not terminated as aforesaid, this Lease shall not be terminated
and shall continue without any abatement of Rent, and Lessee shall, after such
partial taking, at its sole cost and expense, repair and restore any damage
caused by any such partial taking to the common area improvements so that after
the completion of such restoration the common area improvements shall be, as
nearly as possible, in a condition as good as the condition thereof or
immediately prior to such partial taking. In the event of any such partial
taking the net award therefor shall be deposited with Lessor. Lessor shall then
make available to Lessee all of said award to affect the restoration, unless
Lessee is in default hereunder. Upon completion of such restoration, any portion
of the award then remaining will belong to Lessor to the extent of the value of
Lessor's interest in the award and thereafter to Lessee (as described in (ii)
above), any such award retained by Lessor (or retained pursuant to the paragraph
immediately below) shall result in an equitable reduction in Base Rent. If the
cost of the restoration required to be made by Lessee under this Lease shall
exceed the amount of the award therefore, the deficiency shall be paid by
Lessee. In no event shall Lessor be liable to Lessee for any business
interruption, diminution in use or for any value of any unexpired term of this
Lease.
If all or any portion of the Premises shall be taken by any competent
authority for temporary use or occupancy, this Lease shall continue in full
force and effect without reduction or abatement of Rent, notwithstanding any
other provision of this Lease, statute or rule of law to the contrary, and
Lessee shall, in such event, be entitled to any award specifically made for the
repair and restoration of any damage to the Premises, or any improvements
thereon, as a result of such temporary use or occupancy and to the entire award
for such taking to the extent that the same shall be applicable to the period of
such temporary use or occupancy included in the Term and Lessor shall be
entitled to the remainder of the award. Lessee, however, shall, upon the
termination of the temporary taking (or earlier, at Lessee's sole discretion),
at its sole cost and expense, repair and restore any damage to the common area
improvements located on the Premises caused by such temporary use or occupancy,
whether or not the award received by Lessee is sufficient for such purpose.
Article 17 Destruction of Premises.
If the Premises shall be totally or partially damaged by fire or other
casualty, Lessee shall immediately undertake to repair the common area
improvements located on the
15
Premises to substantially the same condition as existed prior to such casualty,
Lessee shall be entitled to all insurance proceeds payable as a result of such
casualty, and Rent shall not be abated. However, if the Premises are
substantially or totally destroyed by fire or other casualty, Lessor shall have
the option of terminating this Lease upon thirty (30) days prior written notice
to Lessee, whereupon Lessor shall be entitled to all insurance proceeds payable
as a result of such casualty. Lessor shall not liable for any inconvenience or
interruption of business of Lessee occasioned by fire or other casualty.
Article 18 Hazardous Substances.
Lessee shall not cause or permit any Hazardous Substance to be used,
stored, generated, or disposed of on, in or about the Premises except in
compliance with all applicable laws and regulations. If any Hazardous Substance
is used, stored, generated, or disposed of on, in, or about the Premises, or if
the Premises become contaminated in any manner, Lessee shall indemnify, defend
and hold harmless Lessor from any and all claims, demands, actions, damages,
fines, judgments, penalties, costs (including attorneys', consultants', and
experts' fees), liabilities, losses and expenses arising during or after the
term of this Lease, arising as a result of such contamination. This
indemnification includes, without limitation, any and all costs incurred due to
any investigation of the site or any cleanup, removal, or restoration mandated
by a federal, state, or local agency or political subdivision. Without limiting
the foregoing, if Hazardous Substances are present on, in, or about the
Premises, Lessee, at its sole expense, shall promptly take any and all necessary
actions to return the Premises to the same condition that existed prior to the
presence of any such Hazardous Substance on, in or about the Premises. Lessee
shall first obtain Lessor's approval for any such remedial action.
As used herein, the term "Hazardous Substance" means any substance
which is toxic, ignitable, reactive, or corrosive and which is regulated by any
local government, the State in which the Premises are located, or the United
States government. "Hazardous Substance" includes any and all materials or
substances which are defined as "hazardous waste", "extremely hazardous waste"
or a "hazardous substance" pursuant to state, federal or local governmental law.
"Hazardous Substance" includes, but is not limited to, solvents, asbestos,
polychlorobiphenyls, waste oil and petroleum.
Article 19 Subordination.
This Lease is and shall be subject and subordinate to any mortgage
which may now or hereafter affect the Premises, provided that neither Lessee nor
any residential tenant shall be disturbed in possession of the Premises. Lessee,
upon demand at any time or times by Lessor, shall execute, acknowledge and
deliver to Lessor, without expense to Lessor, any and all instruments and
certificates that may be necessary or proper to subordinate this Lease and the
rights of the Lessee hereunder to the lien of any such mortgage or mortgages as
aforesaid, provided such instrument contains non-disturbance
16
language in favor of Lessee and the mobile home unit tenants. Furthermore, at
any time and from time to time, Lessee, upon the request of Lessor, will
execute, acknowledge and deliver an instrument, stating, if the same be true,
that this Lease is in full force and effect, that there are no offsets, defenses
or counterclaims with respect to the payment of Rent reserved hereunder and
certifying such other information as may be requested by Lessor or Lessor's
lender. Such instrument will be executed by Lessee and delivered to Lessor
within fifteen (15) days of receipt of request therefor.
Article 20 Sale.
In the event of a sale of the Premises during the term of this Lease,
Lessor and Lessee agree that the sales proceeds less reasonable closing costs
(the "Net Sales Proceeds") shall be paid first to Lessor in an amount equal to
the Acquisition Amount and Capital Expenditures funded by Lessor, as the case
may be, plus a fifteen percent (15%) internal rate of return on such Acquisition
Amount and Capital Expenditures (with such 15% internal rate of return
calculated by taking into account Rent paid to Lessor (prepaid and otherwise)
and all casualty insurance and condemnation proceeds received by Lessor); with
the remaining Net Sale Proceeds distributed based on the percentage of net cash
flow being paid Lessor and Lessee as of the date of the sale.
Article 21 Miscellaneous.
21.1 Waiver. The waiver by Lessor of any breach of any term, covenant
or condition herein contained shall not be deemed to be a waiver of such term,
covenant or condition or any subsequent breach of the same or any other term,
covenant or condition herein contained. The subsequent acceptance of Rent
hereunder by Lessor shall not be deemed to be a waiver of any previous breach by
Lessee of any term, covenant, or condition of this Lease, other than the failure
of the Lessee to pay the particular rental so accepted, whether or not Lessor
had knowledge of such previous breach at the time of acceptance of such Rent. No
covenant, term or condition of this Lease shall be deemed to have been waived by
Lessor, unless Lessor waives the same in writing.
21.2 Accord and Satisfaction. No payment by Lessee or receipt by Lessor
of an amount less than the Rent herein stipulated shall be deemed to be other
than on account of the earliest stipulated Rent, nor shall any endorsement or
statement on any check or in any letter accompanying any check or payment as
Rent be deemed an accord and satisfaction, and Lessor may accept such check or
payment without prejudice to Lessor's right to recover the balance of such Rent
or pursue any other remedy provided in this Lease.
21.3 Entire Agreement. This Lease and the Exhibits attached hereto and
forming a part hereof set forth all the covenants, promises, agreements,
conditions and understandings between Lessor and Lessee concerning the Premises
and there are no
17
covenants, promises, agreements, conditions or understandings, either oral or
written, between them other than are herein set forth. Except as herein
otherwise provided, no subsequent alteration, amendment, change or addition to
this Lease shall be binding upon Lessor or Lessee unless reduced to writing and
signed by them.
21.4 Notices. Any notice, demand, request or other instrument which may
be or is required to be given under this Lease shall be delivered in person or
sent by United States certified mail postage prepaid, return receipt requested,
and shall be addressed, (a) if to Lessee, at the Premises or at such other
address as the Lessee shall designate by written notice and, (b) if to Lessor,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other
address as Lessor may designate by written notice.
21.5 Captions and Section Numbers. The captions, section numbers and
article numbers and an index appearing in this Lease are inserted only as a
matter of convenience and in no way define, limit, construe or describe the
scope of intent of such sections or articles of this Lease nor in any way affect
this Lease.
21.6 Use of Pronoun. The use of the neuter singular pronoun to refer to
Lessor or Lessee shall be deemed a proper reference even though Lessor or Lessee
may be an individual, a partnership, a corporation, or a group of two or more
individuals or corporations. The necessary grammatical changes required to make
the provisions of this Lease apply in the plural sense where there is more than
one Lessor or Lessee and to either corporations, associations, partnerships or
individuals, males or females, shall in all instances be assumed as though in
each case fully expressed.
21.7 Partial Invalidity. If any term, covenant or condition of this
Lease, the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Lease or the
application of such term, covenant or condition to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each term, covenant or condition of this Lease shall be
valid and be enforced to the fullest extent permitted by law.
21.8 Florida Laws to Govern. This Lease shall be construed according to
the laws of the State of Florida.
21.9 Net Lease. It is intended by the parties that this Lease be a "net
lease", imposing upon Lessee the obligation to pay all charges of every kind and
nature in connection with the use and occupancy of the Premises, whether or not
recited herein and whether foreseeable or unforeseeable, including, but not
limited to, utilities, fees, costs, real estate taxes, sales and use taxes, and
all maintenance and repair costs associated with the Premises and the
improvements located thereon.
21.10 Representations and Warranties. Lessee represents and warrants to
Lessor
18
that (i) Lessee is a duly authorized and valid existing Delaware limited
liability company; (ii) Lessee is adequately capitalized and expects, throughout
the term of the Lease, to be able to satisfy its obligations on a continuing
basis as they become due and to derive a commercially reasonable profit in
respect of its position in the Lease; (iii) Lessee has the full right and
authority to enter into this Lease; (iv) each of the persons executing this
Lease on behalf of Lessee is authorized to do so; and (v) this Lease constitutes
a valid and legally binding obligation of Lessee, enforceable in accordance with
the terms.
Lessor represents and warrants to Lessee that (i) Lessor is a duly
authorized and validly existing Delaware limited liability company, (ii) Lessor
has the full right and authority to enter into this Lease, (iii) each of the
persons executing this Lease on behalf of Lessor is authorized to do so, and
(iv) this Lease constitutes a valid and legally binding obligation of Lessor,
enforceable in accordance with the terms.
21.11 Right to Encumber Leasehold Estate. Lessee shall have the
unrestricted right, from time to time, to encumber, hypothecate or mortgage
Lessee's leasehold estate to a leasehold mortgagee (the "Leasehold Mortgagee")
without the prior consent of Lessor (the "Leasehold Mortgage"). In no event
shall Lessor be obligated to encumber its fee interest in the Premises under any
such Leasehold Mortgage. Such Leasehold Mortgage shall simultaneously encumber
Lessee's title to and interest in the improvements located on the Premises.
Lessor consents to the inclusion of a provision in the Leasehold Mortgage for
the assignment of rents from leases to mobile home tenants to the Leasehold
Mortgagee, effective upon any default under the Leasehold Mortgage. Lessor and
Lessee hereby agree to cooperate in including in this Lease by suitable
amendment from time to time any provision which may reasonably be requested by
any proposed Leasehold Mortgagee for the purpose of implementing the Leasehold
Mortgagee protection provisions contained in this Lease and allowing such
Leasehold Mortgagee reasonable means to protect or preserve the lien of the
Leasehold Mortgage on the occurrence of a default hereunder. Lessor and Lessee
each agree to execute and deliver (and to acknowledge, if necessary, for
recording purposes) any agreement necessary to effectuate any such amendment;
provided, however, that any such amendment shall not in any way affect the Term
or Rent under this Lease, nor otherwise in any material respect adversely affect
any rights of Lessor under this Lease Notwithstanding anything to the contrary
contained herein, Lessee's rights as set forth in this paragraph 21.11 are
subject in each case to Lessee's obligations contained in Articles 7 and 11
hereof.
21.12 Radon. Radon is a naturally occurring radioactive gas that, when
it has accumulated in a building in sufficient quantities, may present health
risks to persons who are exposed to it over time. Levels of radon that exceed
federal and state guidelines have been found in buildings in Florida. Additional
information regarding radon and radon testing may be obtained from the
Hillsborough county public health unit. Lessor makes no representations,
warranties or covenants express or implied regarding Radon.
19
21.13 Facsimile/Counterpart. This Lease may be executed in several
counterparts, each of which shall be fully effective as an original and all of
which together shall constitute one and the same instrument. An executed
facsimile copy of this Lease shall be binding for all purposes.
IN WITNESS WHEREOF, Lessor and Lessee have signed and sealed this Lease
as of the day and year first above written.
Witnesses:
LESSOR:
CAX RIVERSIDE L.L.C., a Delaware
limited liability company
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ By: Commercial Assets, Inc., a
Maryland corporation, sole
member
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
Its President
Dated as of November 20, 1998
LESSEE:
Riverside Golf Course Community
L.L.C., a Delaware limited
liability company
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ By: Community Acquisition and
Development Corporation, a
Delaware corporation
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its President
Dated as of November 20, 1998