SECOND AMENDMENT TO GROUND LEASE
Exhibit 10.23
SECOND AMENDMENT TO GROUND LEASE
THIS SECOND AMENDMENT TO GROUND LEASE (this “Amendment”) is made and entered into this
31st day of January, 2008 (the “Effective Date”), by and between CROTCHED MOUNTAIN
PROPERTIES, L.L.C., a New Hampshire limited liability company (“Landlord”), and S N H
DEVELOPMENT, INC., a Missouri corporation (“Tenant”).
RECITALS
A. Landlord and Tenant entered into that certain Ground Lease dated May 27,
2003, for the lease of the property therein described (the “Premises”), as
evidenced by that certain Notice of Lease recorded in the Hillsborough County
Registry of Deeds at Book 6958, Page 208 and amended by that certain First Amendment
to Ground Lease dated as of April 3, 20Q4, as evidenced by that certain Amended
Notice of Lease recorded in the Hillsborough County Registry of Deeds at Book 7220,
Page 498 (as amended, the “Ground Lease”).
B. At the request of Tenant, EPT Crotched Mountain, Inc., a Missouri corporation
(“EPT”), has agreed to purchase from Xxxxxx X. Xxxxxxxx, Xx. and Xxxxx X.
Xxxxxxx, all the membership interests in and to Landlord (collectively,
“Seller”), pursuant to a Membership Purchase Agreement of even date herewith
(the “Purchase Agreement”), and Seller has agreed to sell to EPT all of their
right, title and interest in and to Landlord.
C. As a material inducement to EPT to enter into the Purchase and Agreement and
consummate the transactions contemplated thereunder, the parties have agreed to enter
into this Amendment and Peak Resorts, Inc., a Missouri corporation, has agreed to
executed and deliver to Landlord a Guaranty dated of even date herewith, guaranteeing
all of Tenant’s obligations under the Ground Lease.
NOW, THEREFORE, in consideration of the above recitals, the terms, covenants and agreements
contained herein, and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the parties hereto, the parties hereby agree as follows:
1. Incorporation of Recitals. The foregoing recitals are hereby incorporated by reference.
2. Capitalized Terms. All capitalized terms referred to but not otherwise defined
herein shall have the meaning assigned to them in the Ground Lease.
3.
Annual Rent. Effective from and after February 1, 2008, and throughout the Lease
Term, Tenant shall pay Landlord Annual Rent, in an amount, per annum, equal to $37,380.38 through
and including January 1, 2009. During each subsequent Lease Year (including any Option Period, if
exercised) the Annual Rent shall increase by an amount equal to the lesser of (a) 1.5% multiplied
by the Annual Rent for the previous Lease Year or (b) the percentage increase in the CPI between
the CPI in effect during the first month of the Lease Year
immediately preceding the then applicable Lease Year and the first month of the then applicable Lease Year.
(a) The term “Lease Year” as used in herein shall mean a period of 12 full
calendar months. The first Lease Year shall begin on February 1, 2008. Each succeeding Lease
Year shall commence on the anniversary of the first Lease Year.
(b) “CPI” shall mean the Consumer Price Index for all Urban Consumers, U.S.
City Average, published by the Bureau of Labor Statistics of the United States Department of
Labor (base year 1982-84=100), or any successor index thereto.
4. Monthly Payment of Rent. From and after February 1, 2008, Tenant shall pay
Landlord, during the term of the Lease, the Annual Rent in equal monthly installments on or before
the first day of each calendar month, in advance during such Lease Year. If the Annual Fixed Rent
is payable for a fraction of a month, the amount payable shall be a pro rata share of a full
month’s rent. The Annual Fixed Rent shall be prorated for any partial Lease Year. All payments of
Annual Rent, Additional Rent, and any other charges due to Landlord shall sent to the following
address:
Crotched Mountain Properties, L.L.C.
c/o Entertainment Properties Trust
00 Xxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Asset Management
c/o Entertainment Properties Trust
00 Xxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Asset Management
All other terms and conditions regarding Annual Rent remain unchanged.
5. Purchase Agreement Indemnity. Tenant shall indemnify and hold harmless Landlord, at
all times from and after the Effective Date, against and in respect of any damages, including
without limitation professional costs of defense and attorneys’ fees, arising from or relating to
(a) any breach of any of the representations or warranties made by Seller in the Purchase
Agreement; (b) any breach of the covenants and agreements made by Seller under the Purchase
Agreement; and (c) any damage to Landlord resulting from the litigation described on Schedule
1 attached hereto.
6. Indemnity. Tenant hereby agrees to indemnify and defend, at its sole cost and
expense, and hold EPT, its successors and assigns, harmless from and against and to reimburse EPT
and Landlord with respect to any and all claims, demands, actions, causes of action, losses,
damages, liabilities, costs and expenses (including, without limitation, reasonable attorney’s fees
and court costs) actually incurred of any and every kind or character, known or unknown, fixed or
contingent, asserted against or incurred by EPT and Landlord at any time and from time to time by
reason of or arising out of (a) the breach of any representation or warranty of Tenant set forth in
Section 6 of this Amendment; (b) the failure of Tenant, in whole or in part, to perform any
obligation required to be performed by Tenant pursuant to the Ground Lease or Promissory Note (as
defined below); or (c) the ownership, construction, occupancy, operation, use and maintenance by
Tenant or its agents of the Premises prior to the Effective Date. This indemnity applies, without
limitation, to the violation on or before the Effective Date of any
governmental laws or regulations in effect on or before the Effective Date and any and all matters arising out of any
act, omission, event or circumstance existing or occurring on or prior to the Effective Date
(including, without limitation, the presence on the Premises or release from the Premises of
Hazardous Materials disposed of or otherwise released prior to the Effective Date), regardless of
whether the act, omission, event or circumstance constituted a violation of any applicable
governmental laws or regulations at the time of its existence or occurrence. The provisions of this
Section shall survive the closing of the purchase and sale transaction of the Purchase Agreement
and shall continue thereafter in full force and effect for the benefit of EPT and Landlord, its
successors and assigns. Notwithstanding any provision of this Amendment to the contrary, Landlord
may exercise any right or remedy Landlord may have at law or in equity should Tenant fail to meet,
comply with or perform its indemnity obligations required by this Section.
7. Representations and Warranties. To induce EPT to enter into the Purchase Agreement,
Tenant represents and warrants to Landlord and EPT as follows:
(a) No written notice has been received from any insurance company that has issued a policy
with respect to any portion of the Premises and the improvements located thereon (collectively, the
“Property”) or from any board of fire underwriters (or other body exercising similar
functions), claiming any defects or deficiencies or requiring the performance of any repairs,
replacements, alterations or other work and as of the Effective Date no such written notice will
have been received which shall not have been cured. No written notice has been received by Tenant
from any issuing insurance company that any of such policies will not be renewed, or will be
renewed only at a higher premium rate than is presently payable therefor.
(b) All improvements (including all utilities) have been, or as of the Effective Date will be,
substantially completed and installed in accordance with the plans and specifications approved by
the governmental authorities having jurisdiction to the extent applicable. Permanent certificates
of occupancy, all licenses, permits, authorizations and approvals required by all governmental
authorities having jurisdiction, and the requisite certificates of the local board of fire
underwriters (or other body exercising similar functions) have been, or as of the Effective Date
will be, issued for the Improvements and for all operations conducted thereon, and, as of the
Effective Date, where required, all of the same will be in full force and effect. The improvements,
as designed and constructed, substantially comply or will substantially comply with all statutes,
restrictions, regulations and ordinances applicable thereto, including but not limited to the
Americans with Disabilities Act and Section 504 of the Rehabilitation Act of 1973, as applicable.
(c) The existing water, sewer, gas and electricity lines, storm sewer and other utility
systems are adequate to serve the current and contemplated utility needs of the Property. All
utilities required for the operation of the improvements enter the Premises through adjoining
public streets or through adjoining private land in accordance with valid public or private
easements. All approvals, licenses and permits required for said utilities have been obtained and
are in full force and effect. All of said utilities are installed and operating, or will be, and
all installation and connection charges have been or will be paid in full as of the Effective Date.
(d) There are no structural defects in any of the buildings or other improvements constituting
the Property. The improvements, all heating, electrical, plumbing and drainage at, or servicing,
the Property and all facilities and equipment relating thereto are and, as of the Effective Date,
will be in good condition and working order and adequate in quantity and quality for the normal
operation of the Property. No part of the Property has been destroyed or damaged by fire or other
casualty. There are no unsatisfied written requests for repairs, restorations or alterations with
regard to the Property from any person, entity or authority, including but not limited to any
lender, insurance provider or governmental authority.
(e) No work has been performed or is in progress at the Property, and no materials will have
been delivered to the Property that might provide the basis for a mechanic’s, materialmen’s or
other lien against the Property or any portion thereof, and all amounts due for such work and
material shall have been paid and all discharged to Purchaser’s satisfaction as of the Effective
Date.
8. Default. Tenant shall be in default under the Ground Lease upon the occurrence of
any Event of Default under that certain Promissory Note dated as of March 10, 2006, wherein Tenant
promises to pay EPT the sum of Eight Million Dollars ($8,000,000.00) together with interest as
provided therein.
9. Notices. The Landlord’s notice address in Section 29 is hereby deleted and replaced
with the following address to which any notices, demands or other communications to Landlord shall
be sent:
| Landlord: | Crotched Mountain Properties, L.L.C. c/o Entertainment Properties Trust 00 Xxxx Xxxxxxxx Xxxx, Xxxxx 000 Xxxxxx Xxxx, Xxxxxxxx 00000 Attn: Asset Management |
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| With copy to: | Crotched Mountain Properties, L.L.C. c/o Entertainment Properties Trust 00 Xxxx Xxxxxxxx Xxxx, Xxxxx 000 Xxxxxx Xxxx, Xxxxxxxx 00000 Attn: General Counsel |
10. Affirmation of Ground Lease. Landlord and Tenant agree that except as specifically
modified herein, all the terms and provisions of the Ground Lease are in full force and effect. If
and to the extent that there is a conflict between the terms of this Amendment and the terms of the
Ground Lease, the terms of this Amendment shall control. All references herein or in the Ground
Lease to the “Ground Lease” shall mean and refer to the Ground Lease as amended by this Amendment.
11. Counterparts. This Amendment may be executed at different times and in any number
of counterparts, each of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an executed counterpart of
a signature page to this Amendment by telecopier shall be as effective as delivery of a manually
executed counterpart of this Amendment. In proving this Amendment, it
shall not be necessary to produce or account for more than one such counterpart signed by the party against whom enforcement
is sought.
12. Binding Effect. This Amendment shall be binding upon and inure to the benefit
of the parties and their respective successors and assigns.
913 Third Party Beneficiary. Landlord and Tenant acknowledge that EPT is an
intended third party beneficiary to the Ground Lease and this Amendment.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed the day
and year first above written.
| “Landlord” CROTCHED MOUNTAIN PROPERTIES, L.L.C., a New Hampshire limited liability company |
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| By: | EPT CROTCHED MOUNTAIN, INC., a Missouri Corporation |
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| By: | /s/ Xxxxxxx X. Xxxxxx | |||
| Xxxxxxx X. Xxxxxx, Vice President | ||||
| “Tenant” S N H DEVELOPMENT, INC., a Missouri corporation |
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| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Xxxxxxx X. Xxxxxxx, Vice President | ||||
SCHEDULE 1
LITIGATION PROCEEDINGS
By a Warranty Deed dated September 2, 2004, Landlord conveyed certain real estate located in the
Town of Francestown to Xxxx X. Xxxxxxxxxx and Xxxxxx X. Xxxxxxxxxx (the “Blanchettes”),
which deed is recorded in the Hillsborough County Registry of Deeds, Book 7313, Page 0564 (the
“Deed”).
The Deed did not reserve access over the property conveyed to certain septic fields and other
improvements located on portions of the real estate covered by the Deed, which are used by
Mountainside at Crotched Mountain, an abutting condominium association (the “Association”).
During 2007 the Association sought access to the septic fields and other improvements for necessary
repairs and a dispute arose with the Blanchettes regarding access over the property conveyed by the
Deed. The Association and the Blanchettes are involved in litigation styled Mountainside at
Crotched Mountain v. Xxxxx and Xxxxxx Xxxxxxxxxx, Hillsborough County North Superior Court (Docket
No. ), which is still pending.
At the present time, the title insurance company which issued a title insurance policy in relation
to the property sold to the Blanchettes is defending and will be primarily liable for the costs of
any resolution of the dispute between the Association and the Blanchettes. It is expected, however,
that the title insurance company will seek indemnification against and/or from Landlord, in due
course.
