Exhibit 10.99
EXHIBIT D
SKI LEASE
This Ski Lease is entered into as of September __, 1997 between ASC Utah,
a Maine corporation ("ASC") and Iron Mountain Associates, LLC. ("IMA") a
Utah limited liability company, WPA, LTD. ("WPA"), a Utah limited
partnership, Iron Mountain Holding Group, LC ("IMHG") a Utah limited
liability company and Iron Mountain Alliance, Inc. ("IMAI") a Utah
corporation (WPA, IMHG and IMAI being collectively referred to as "Members"),
all collectively referred to as the Parties, and is intended to implement the
provisions of the certain Development Agreement executed by the Parties on
this same date (the "Development Agreement").
1. DEFINITIONS, REFERENCES AND EXHIBITS. Capitalized terms used but not
defined herein shall have the meaning ascribed to those terms in the
Development Agreement among the parties dated as of the date hereof.
References to Sections and Exhibits or Schedules shall be the same as those
in the Development Agreement.
2. LEASE ESTABLISHED. This Lease Agreement is a lease to ASC by IMA and
its Members (the "Lease") on those portions of the IMA Fee Property
hereinafter described for the purposes of operating a commercial alpine ski
resort (the "IMA Ski Lease Property"). The Parties shall execute and deliver,
concurrently herewith, a short form "Notice of Lease" in recordable form,
which conforms with the provisions set forth herein. At the expiration or
termination of this Lease, ASC shall, promptly upon IMA's request, sign such
documents and take such actions as are necessary to remove the recorded
Notice of Lease as a matter of record against the Leased Premises.
3. TRUST LANDS SKI LEASE. IMA hereby agrees that Trust Lands and ASC
shall have the right to establish a separate ski lease agreement between
those two parties with respect to the IMA Lease Property and the BLM Lands,
or other property which may be leased to IMA by Trust Lands in the future.
Rather than including those leased properties in this Lease on a sublease
basis, the Parties agree that ASC should establish a separate lease with
Trust Lands for ski development on those properties, and IMA hereby consents
to that arrangement.
4. LEASED PREMISES. IMA and its Members hereby lease and let to ASC, and
ASC hereby takes and hires from IMA and its Members, upon and subject to the
terms, conditions, covenants and provisions set forth herein, all of those
tracts, pieces and parcels of land, situated in White Pine Canyon, Summit
County, Utah (the "IMA Ski Lease Property"), more particularly identified
using a procedure set forth in Section 7.01, together with any and all
improvements, appurtenances, rights, privileges and easements benefiting,
belonging or pertaining thereto (all of the foregoing hereinafter sometimes
referred to as the "Leased Premises"). Each party's respective rights to use
the Leased Premises shall be limited in the manner described in Section 5
hereof.
5. USE. Except as expressly set forth herein, all rights to the use
of the Leased Premises are reserved by IMA, its successors and assigns,
including without limitation extending or granting such rights to purchasers
of lots in the IMA Project. The use of the Leased Premises by ASC shall be
limited to the construction and operation of an alpine ski resort consisting
essentially of the following uses:
(a) Construction of ski lifts and related improvements of such size,
type and with such attributes and amenities as are consistent with the
Preliminary Development Plan, as amended or revised in a manner specified
in Section 7.01.
(b) Construction and maintenance of ski trails of a size, location
and nature consistent with the provisions of the Preliminary Development
Plan, as amended or revised in the manner set forth in Section 7.01 of the
Development Agreement.
(c) Construction and installation of snowmaking pipes, lines,
nozzles and related infrastructure improvements required for the operation
of such systems, which improvements shall include state-of-the-art
technology reducing noise levels to the greatest extent possible.
(d) Construction and operation of only the day skiing lodges
described in Schedule B, warming huts and other buildings associated with
the improvements described herein, provided that IMA and ASC must agree
upon the location, type and design of any such buildings prior to their
construction using the methodology set forth in Sections 1.01 and 7.01.
With respect to day skiing lodges, ASC and IMA agree that the Preliminary
Development Plan shall limit utilization of the Leased Premises for
construction and operation of day skiing lodges to the greatest extent
reasonably possible consistent with providing a premier, world-class, ski-
resort experience. Day skiing lodges may contain any of the uses that are
customary for such facilities at the finest ski resorts in the United
States.
(e) Any commercial real estate development other than the day skiing
lodges specifically referred to in Schedule C, for which lease terms are
set forth in Section 7(e) below, will be permitted only pursuant to a
separate lease agreement specifically addressing those activities.
6. EXCLUDED USES. Notwithstanding the foregoing, without IMA's consent,
the Leased Premises shall not be used for any of the following enumerated
uses:
(a) Ski lift operation for commercial purposes during any period
when the resort is not open for alpine skiing. Lifts may be operated during
this period for maintenance and improvement activities.
(b) Mountain biking and other summer commercial recreation activities
shall be limited exclusively to areas identified for such use on the
Preliminary Development Plan, as amended or revised pursuant to Section
7.01.
2
(c) Disruptive conduct which constitutes a nuisance and which is
sponsored by, or under the authority and control of, ASC.
7. TERM. The term of the Lease shall commence as of the date hereinabove
first written ("Commencement Date") and shall continue until September 13,
2094 (the "Term").
8. CONSIDERATION. As consideration for this Lease, ASC agrees to provide
to IMA (1) full and complete performance of all of the terms and conditions
of the Development Agreement; and (2) full and complete performance of all
the terms and conditions of the Lease, the monetary portions of which
collectively shall be referred to as rent ("Rent"), including specifically
the following:
(a) TAXES. ASC shall, during the term of the Lease, as additional
Rent, pay and discharge punctually, as and when the same shall become due
and payable, all taxes, special and general assessments, water rents,
rates and charges, sewer rents and other governmental impositions and
charges of every kind and nature whatsoever, extraordinary as well as
ordinary, (hereinafter referred to as "Taxes"), and each and every
installment thereof which shall or may during the Term of the Lease be
charged, levied, laid, assessed imposed, become due and payable, or a lien
upon, or for, or with respect to, the Leased Premises or any part
thereof, or any buildings, appurtenances, equipment, or other personal
property owned or operated by ASC thereon or therein or any part thereof,
together with all interest and penalties thereon, under or by virtue of
all present or future laws, ordinances, requirements, orders,
directives, rules or regulations of the federal, state, county and
municipal governments and of all other governmental authorities
whatsoever (all of which shall also be included in the term "Taxes" as
heretofore defined).
(i) ASC or its designee shall have the right to contest or
review all such Taxes by legal proceedings, or in such other manner
as it may deem suitable (which, if instituted, ASC or its designees
shall conduct promptly at its own cost and expense, and, if
necessary, in the name of IMA with the cooperation of IMA and IMA
shall execute all documents reasonable necessary to accomplish the
foregoing). Notwithstanding the foregoing, ASC shall promptly pay
all such Taxes if at any time the Leased Premises or any part
thereof shall then be immediately subject to forfeiture, or if IMA
shall be subject to any criminal liability arising out of the
nonpayment. Such legal proceedings shall include appropriate
certiorari proceedings, and appeals from orders therein and appeals
from any judgments, decrees, or orders. In the event of any
reduction, cancellation or discharge, ASC shall pay the amount
finally levied or assessed against the Leased Premises or
adjudicated to be due and payable on any such contested Taxes.
(ii) IMA covenants and agrees that if there shall be any refunds
or rebates on account of the Taxes paid by ASC under the provisions
of the Lease, such
3
refund or rebate shall belong to ASC, except those taxes
pro-rated as provided in Section 8(d)(ii) below. Any refunds
received by IMA shall be deemed trust funds and as such are to be
received by IMA in trust and paid to ASC forthwith. IMA will,
upon the written request of ASC, sign any receipts which may be
necessary to secure the payment of any such refund or rebate, and
will pay over to ASC such refund or rebate as received by IMA.
(iii) The Parties covenant and agree that either of them
may, at any time, and from time to time, but without cost to IMA,
make application individually (if legally required) or to join in
the application of the other (if legally required) for separate
tax assessments for such portions of the Leased Premises as
either shall at any time, and from time to time, designate. The
Parties hereby agree, upon reasonable request of the other, to
execute such instruments and to give such assistance in
connection with such applications as shall be required.
(iv) Nothing herein, or in the Lease otherwise contained,
shall require or be construed to require ASC to pay any sales,
rent, inheritance, estate, succession, transfer, gift, franchise,
income or profit taxes, by whatever name the same may be called,
that are or may be imposed upon IMA, its successor or assigns.
(v) Without limiting the foregoing, IMA shall exercise
commercially reasonable efforts and cooperate fully with ASC in
having the Leased Premises categorized in the most favorable
fashion for property tax purposes consistent with the uses
contemplated and their respective projects.
(b) UTILITY EXPENSES. All sewer rents and charges for water,
steam, gas, heat, hot water, electricity, light and power, and other
services or services furnished to the Leased Premises or the occupants
thereof during the Term of the Lease (hereinafter referred to as
"Utility Expenses").
(c) ROLLBACK TAXES/TAX EXEMPTIONS. The term Taxes used in this
Section 7 shall include any "rollback taxes" resulting from the Leased
Premises or any portion of the IMA Property losing any agricultural
status under the provisions of the Utah Farmland Assessment Act, or
other favorable tax status (such as a conservation easement) due to
ASC's actual or intended use of, or activities conducted upon the Leased
Premises, provided that any taxes resulting from a termination of any
beneficial tax status which occurs through the actions of IMA shall not
be included in Taxes, and shall be the responsibility of IMA. The
Parties acknowledge that commencement of ski resort activity on the IMA
Ski Lease Property may not be consistent with the historical sheep
grazing operation and may trigger a mandatory cessation of such grazing
which in turn may result in an obligation to pay rollback taxes. To the
extent that the same may be permitted by law, ASC or its designees shall
have the right to apply for the conversion of any assessment for local
improvements assessed during the term of the Lease in order to cause the
same to be payable in annual installments, and upon such conversion, ASC
shall pay and discharge punctually said installments as they shall
become due and
4
payable during the Term of the Lease. IMA or its successors and assigns
shall agree to permit the application for the foregoing conversion to be
filed in its name, if necessary, and shall execute any and all documents
requested by ASC to accomplish the foregoing result.
(d) PAYMENTS. ASC shall be deemed to have complied with the
covenants of this Section if:
(i) Payment of all Taxes shall have been made either within
any period allowed by law or by the governmental authority
imposing the same during which payment is permitted without
penalty or interest or before the same shall become a lien upon
the Leased Premises, and ASC shall produce and exhibit to IMA
satisfactory evidence of such payment, if IMA shall demand the
same in writing.
(ii) Payment of all Taxes shall have been made and the
assessments which have been converted into installments as set
forth in the preceding paragraph (a), which shall become payable
during each of the calendar or fiscal tax years, as the case may
be, in which the Term of the Lease commences or terminates, shall
have been apportioned pro rata between IMA and ASC in accordance
with the respective portions of each such year during which such
Term shall be in effect.
(iii) Payment of all Additional Consideration in (e) below
shall have been made.
(e) ADDITIONAL CONSIDERATION. As additional consideration of this
Lease and its inclusion of day lodges as a permitted use, and if any
additional use subsequently approved by IMA, ASC shall pay to IMA, an
amount equal to three percent (3%) of gross sales revenues generated
through all sales whether wholesale or retail, less sales tax and
returned items, related to any commercial activity of any type
whatsoever at the day lodges or on the IMA Property other than
commercial activity which is permitted under Section 5 above, whether
such activity is conducted by ASC or any of its sub-lessees,
sub-tenants, licensees, concessionaires and the like (the "Additional
Consideration"). The Additional Consideration shall be paid to IMA
within thirty (30) days following the close of each quarter of ASC's
fiscal year and shall be accompanied by an accounting using Generally
Accepted Accounting Principles of all sales generated from the permitted
commercial uses on the IMA Property. ASC shall provide IMA with monthly
reports of all such sales and commercial activity. IMA shall have the
right to verify the ASC calculations of the Additional Consideration
through annual audit of the ASC books of account.
(f) LINE OF CREDIT. As consideration for that certain "Ski Lift
and Trail Lease Agreement" executed by the Parties on July 24, 1997, ASC
agreed to provide and herewith agrees to provide as additional Rent a
revolving line of credit (the "Line") with the following terms and
conditions:
5
(i) Principal Amount: $1,000,000.
(ii) Maturity: The Line shall mature upon delivery by ASC of the
100 Units as required in Article II, provided, however, that the Line
shall not mature until all the terms and conditions precedent to the
delivery of the 100 Units set forth in Article II and Article VII shall
have been satisfied by ASC.
(iii) Interest: IMA shall have the right to draw $100,000 per year
from the Line without interest. Draws in excess of $100,000 per year
shall bear interest at the most-favorable blended rate available to ASC
and to its affiliates, ASC Holdings, Inc. and American Skiing Company,
based on a direct pass through of the cost of funds. After 36 months
from the date of this Lease and prior to maturity, ASC shall waive and/or
shall assume full responsibility for the payment of all interest on the
entire outstanding balance on the Line. Interest owed by IMA, but not by
ASC, may be paid from advances on the Line.
(iv) Availability: Funds may be drawn down from time to time by
IMA as needed to fund IMA Project related expenses identified in a draw
down schedule which shall be provided to ASC by IMA on a periodic basis.
The draw down schedule shall not be binding on IMA, but shall be a good
faith estimate of the need for funding.
(v) Repayment: At maturity, the outstanding principal balance on
the Line plus any interest owed by IMA shall become due and payable,
provided, however, that an amount equal to Fifty-thousand Dollars
($50,000) per year, times the number of years pro-rated until ASC
delivers the 100 Units, shall be forgiven. Payments on the Line shall be
applied first to accrued and unpaid interest, then to principal
outstanding.
(vi) Security: As security for the amounts outstanding under the
Line, IMA hereby pledges and grants a security interest in its rights to
the 100 Units identified above under the Development Agreement.
9. ALTERATIONS TO SKI IMPROVEMENTS. ASC may, at its option and at its
own cost and expense, at any time and from time to time, make such
alterations, changes, replacements, improvements and additions in and to the
Ski Improvements located on the Leased Premises, subject to the conditions
specified in Section 5, including the removal or demolition of any Ski
Improvement(s) that now or hereafter may be situated or erected on the Leased
Premises.
ASC agrees that it will maintain the Leased Premises in a good condition
and upon removal or demolition of any of the Ski Improvements, and in any
event upon the termination of this Lease, ASC shall restore the Leased
Premises to a condition as near as reasonably possible to the pre-improved
condition.
6
10. TITLE TO SKI IMPROVEMENTS. Until the expiration or termination of
the Lease (subject, however, to the rights of the holder of any leasehold
Mortgagee(s) to obtain a new lease as set forth in Section 22 hereof), title
to any Ski Improvements situated or erected on the Leased Premises and the
personal property located or installed thereon and any alterations, changes
or additions thereto shall remain solely in ASC; and ASC alone shall be
entitled to deduct all depreciation on ASC's income tax returns for any such
Ski Improvements, additions, changes or alterations and any personal property
associated therewith.
11. REMOVAL OF SKI IMPROVEMENTS. On the last day or upon termination of
the term of the Lease, ASC shall quit and surrender to IMA the Leasehold
Premises, and any Ski Improvements then located thereon, provided, however,
that notwithstanding anything in the Lease to the contrary, ASC shall have
the right, and the obligation if requested by IMA, at the end of the term, to
remove any buildings or other Ski Improvements then located thereon, provided
that such removal shall be accomplished within one hundred twenty (120) days
following the end of the term or the termination. ASC agrees that it will
maintain the Leased Premises in a good condition and upon removal or
demolition of any of the Ski Improvements, and in any event upon the
termination of this Lease, ASC shall restore the Leased Premises to a
condition as near as reasonably possible to the pre-improved condition.
12. TIMING OF SKI IMPROVEMENTS. ASC agrees that it shall apply for, and
exercise its best efforts to gain, all necessary permits and approvals from
all applicable governmental authorities for development of the Ski
Improvements on a basis consistent in all material aspects with the
Preliminary Development Plan. ASC will exercise its best and most diligent
efforts to construct the Ski Improvements as expeditiously as reasonably
possible consistent with receipt of governmental approvals. With the
exception of lift replacement, ASC will give priority to construction of
those lifts and trail systems that service phases of the IMA Project as
developed such that to the extent possible, lifts will be constructed prior
to or contemporaneously with the phase serviced thereby.
13. REQUIREMENTS OF PUBLIC AUTHORITIES. During the term of the Lease,
ASC shall, at its own cost and expense, promptly observe and comply with all
present and future laws, ordinances, requirements, orders, directives, rules
and regulations of the federal, state, county and municipal governments and
of all other governmental authorities affecting the Leased Premises, the Ski
Improvements or appurtenances thereto or any part thereof whether the same
are in force at the commencement of the term of the Lease or may in the
future be passed, enacted or directed.
(a) ASC shall have the right to contest by appropriate legal
proceedings diligently conducted in good faith, in the name of ASC, or
IMA (if legally required), or both (if legally required), without cost or
expense to IMA, the validity or application of any law, ordinance, rule,
regulation or requirement of the nature referred to in paragraph (a) of
this Section and, if by the terms of any such law, ordinance, order, rule,
regulation or requirement, compliance therewith may legally be delayed
pending the prosecution of any such proceeding, ASC may delay such
compliance therewith until the final determination of such proceeding.
7
(b) IMA agrees to execute and deliver any appropriate papers or
other instruments which may be necessary or proper to permit ASC so to
contest the validity or application of any such law, ordinance, order,
rule, regulation or requirement and to fully cooperate with ASC in such
contest.
14. COVENANT AGAINST LIENS. If, because of any act or omission of
ASC, any mechanic's or materialman's lien or other encumbrance shall be filed
against IMA or any of its Members or against any portion of the Leased
Premises, ASC shall (1) inform IMA immediately upon the filing of any such
lien or encumbrance, (2) at its own cost and expense, cause the same to be
discharged of record or bonded within one hundred twenty (120) days of the
filing thereof, and (3) indemnify and save harmless IMA against and from all
costs, liabilities, suits, penalties, claims and demands resulting therefrom.
15. ACCESS TO PREMISES. IMA and its Members and lot owners in the IMA
Project shall have the right to enter upon the Leased Premises at all
reasonable times to use, enjoy and examine the same provided such entry shall
not interfere with the commercial alpine resort business then being
conducted on the Leased Premises. IMA lot owners shall have the right to
utilize Ski Improvements only on the same basis as the general public,
provided, however, ASC shall, as additional Rent, provide to IMA a total of
twelve (12) season lift passes for each year of the Lease which shall be used
exclusively by those IMA affiliates identified in writing by IMA prior to the
beginning of each ski season. Further, when requested by IMA for marketing
purposes, ASC shall permit representatives of IMA and prospective purchasers
of lots within the IMA Project and their agents to utilize the lift
facilities for marketing purposes in order to show the properties within the
IMA Project, at no cost to IMA, subject to ASC's approval of the terms of
said use.
16. ASSIGNMENT AND SUBLETTING. ASC may assign or sublease (in whole
or in part or parts), the Lease only upon obtaining IMA's prior written
consent therefor, which consent shall not be unreasonably withheld or
delayed. ASC agrees to furnish to IMA written notice via certified U.S. Mail,
return receipt requested, of its intent to assign or sublease any interest in
the Lease, together with the name and address of the proposed assignee or
sublessees, and such further information as IMA may reasonably request
regarding the proposed assignee or sublessee and shall enter into good faith
discussions with ASC regarding its decision. Failure to respond within 30
days of receipt of written notice by IMA shall be deemed an approval. Upon
any assignment made in accordance with the terms hereof, but not with respect
to subleasing, ASC shall be relieved of all further obligations under the
portion(s) of the Lease so assigned and shall have no further liabilities
hereunder.
The Members may, without approval from any other party, assign their
rights and obligations under this Ski Lease to IMA at any time after receipt
of all required development approvals for the IMA Project.
17. INDEMNITY. ASC shall indemnify and save harmless IMA from and
against any and all liability, damage, penalties or judgments arising from
injury to person or property sustained by anyone in and about the Leased
Premises resulting from any act or omission or
8
omissions of ASC, or ASC's officers, agents, servants, employees or
contractors. ASC shall, at its own cost and expense, defend any and all suits
or actions which may be brought against IMA or in which IMA may be named with
others upon any such above-mentioned matter, claim or claims, except as may
result from the IMA's affirmative acts or negligence or the affirmative acts
or negligence of its officers, agents, servants, employees or contractors.
The foregoing indemnity shall include indemnification for any environmental
damage or contamination resulting from ASC's use of, or activities on the
Leased Premises. Excepting such acts, IMA shall not be responsible or liable
for any damage or injury to any property, fixtures, buildings or other
improvements, or to any person or persons, at any time on the Leased
Premises, including any damage or injury to ASC or to any of ASC's officers,
agents, servants, employees, contractors, customers or sublessees.
9
18. INSURANCE.
(a) ASC shall provide at its expense, and keep in force during
the term of the Lease, general liability insurance in a good and solvent
insurance company or companies licensed to do business in the State of
Utah, selected by ASC, and reasonably satisfactory to IMA, or through a
self insurance program approved by all necessary governmental authorities,
in the amount of at least Fifty Million Dollars ($50,000,000) with
respect to injury to or death of any one person, more than one person
in any one accident or other occurrence, and damages to property. Such
policy, policies or programs shall include IMA, and any Members which
IMA from time-to-time may designate, as an additional insured. ASC
agrees to deliver certificates of such insurance to IMA at the beginning
of the term of the Lease and thereafter not less than ten (10) days prior
to the expiration of any such policy. Such insurance shall not be canceled
without ten (10) days' written notice to IMA.
(b) During the term of the Lease, ASC shall keep all buildings and
improvements presently at the Leased Premises or hereafter erected by ASC
on the Leased Premises at any time insured for the benefit of IMA and ASC
and the holder of any leasehold mortgage permitted pursuant to Section 22
hereof, as their respective interests may appear, against loss or damage
by fire, and those casualties covered by the customary extended coverage
endorsements, in a minimum amount equal to the greater of replacement
value or the amount necessary to avoid the effect of coinsurance
provisions of the applicable policies. All proceeds payable at any time
and from time to time by any insurance company under such policies shall
be payable to such leasehold mortgagee, if any, or, if none, to ASC. Any
proceeds paid to ASC shall be retained by ASC and IMA shall not be
entitled to, and shall have no interest in, such proceeds or any part
thereof, except as IMA may be entitled due to loss or damage by fire
sustained by IMA as a result of a fire occasioned by ASC or activities
related to the commercial operations of the resort. IMA shall, at ASC's
cost and expense, cooperate fully with ASC in order to obtain consents
and other instruments and take all other actions necessary or desirable
in order to effectuate the same and to cause such proceeds to be paid
as herein before provided and IMA shall not carry any insurance concurrent
in coverage and contributing in the event of loss with any insurance
required to be furnished by ASC hereunder if the effect of such separate
insurance would be to reduce the protection or the payment to be made
under ASC's insurance.
(c) Any insurance required to be provided by ASC pursuant to the
Lease may be provided by a blanket insurance program covering the Leased
Premises and other locations of ASC provided such blanket insurance
complies with all of the other requirements of the Lease with respect to
the insurance involved.
(d) All insurance policies carried by either party covering the
Leased Premises, including but not limited to contents, fire and
casualty insurance, shall expressly waive any right on the part of the
insurer against the other party. The parties
10
hereto agree that their policies will include such waiver clause or
endorsement so long as the same shall be obtainable without extra cost,
or if extra cost shall be charged therefor, so long as the other party
pays such extra cost. If extra cost shall be chargeable therefor, each
party shall advise the other thereof and of the amount of the extra cost,
and the other party, as its election, may pay the same, but shall not be
obligated to do so.
(e) ASC shall obtain and maintain combined rental income and/or
business interruption and extra expense insurance against loss of ASC's
income from the Leased Premises for a period of 12 months due to the
perils covered by the insurance described above, in an amount sufficient
to cover the Rent payable under the terms of this Lease. If the Ski
Improvements are destroyed or damaged resulting in any reduction of
income received by ASC from the Leased Premises, the proceeds of such
rental income and/or business interruption insurance shall be assigned,
subject to the rights of any leasehold Mortgagee, to IMA, as its interest
may appear, to be applied in payment of such Rent until such time as the
Ski Improvements so damaged or destroyed have been fully restored and
placed in full operation.
(f) All policies of insurance provided for herein shall be written
as primary policies with responsible and solvent insurance companies
authorized to do business in Utah with a policyholder's rating of "A"
(Excellent) or better and a financial rating of "A" or better in the
most recent Bests' Key Rating Guide.
19. CASUALTY LOSS.
(a) In the event that, at any time during the term of the Lease,
any one or more of the Ski Improvements shall be destroyed or damaged in
whole or in part by fire or other cause within the extended coverage of
the Lease, then, ASC, at its own cost and expense, shall, subject to the
provisions of paragraph (b) of this Section cause the same to be repaired,
replaced or rebuilt within a period of time which, under all prevailing
circumstances, shall be reasonable.
(b) In the event that at any time during the term of the
Lease any one or more of the Ski Improvements shall have been
damaged or destroyed by fire or any other cause whatsoever, and
such damage or destruction shall amount to fifteen percent (15%) or
more of the sound insurable value of Ski Improvements, or if such damage
or destruction shall occur during the last ten (10) years of the term,
ASC shall have the right, but not the obligation, to elect not to repair,
replace or rebuild such building or improvements. If ASC shall elect not
to restore any damaged property, it shall, prior to, or immediately
commence and diligently prosecute to completion, the demolition and
removal of any damaged Ski Improvements which are upon the Leased
Premises, and shall remove all rubble and revegetate the site(s).
(c) ASC shall not be entitled to any suspension or abatement of
Rent by reason of any destruction or damage to the Leased Premises.
11
20. EMINENT DOMAIN. If the whole or any part of the Leased Premises
shall be taken for any public or quasi-public use under any statute or by
right of eminent domain or by private purchase in lieu thereof, then the
Lease shall continue and the taking shall be administered in the manner
specified below.
In the event of a condemnation or taking by any governmental authority,
IMA shall be entitled to the full value of all condemnation parcels,
including any bonus value, excepting only the value of any Ski Improvements
taken. The Parties shall independently have the right to apply for and
prosecute any claim for such taking as it relates to each of their respective
interests in the Leased Premises. Each party shall bear its own costs and
expenses associated with any such effort and shall be entitled to all (100%)
of any award resulting from such efforts.
21. UTILITY LOCATION. ASC shall have the right to negotiate agreements
with utility companies and/or public authorities which provide necessary
utilities. Creating easements, subleases or other necessary property
interests in favor of such companies and/or authorities as are required in
order to service the occupants of the buildings and the improvements on the
IMA Property or ASC Property shall be valid only after approval by IMA, which
approval shall not be unreasonably withheld or delayed. IMA and its Members
covenant and agree to execute any and all documents, agreements and
instruments, to dedicate to any applicable governmental body, without
compensation therefor, utility easements which are usual and ordinary for
commercial alpine ski resort developments and which are otherwise reasonably
acceptable to IMA, and to take all other actions in order to effectuate the
same, all at ASC's cost and expense. All ASC's utility lines shall be located
underground and the location of the same shall have been approved by IMA as
provided in Section 7.01. The terms of each utility agreement, easement,
dedication or other property interest shall provide that all rights conveyed
are to be extinguished on the last day of the term or upon termination of the
Lease.
22. LEASEHOLD MORTGAGES. ASC, and every successor and assign of ASC,
is hereby given the right by IMA in addition to any other rights herein
granted, subject to IMA's prior written consent which shall not be
unreasonably withheld, to mortgage its interests in the Lease, or any part
or parts thereof, under one or more leasehold Mortgage(s), and to assign the
Lease, or any part or parts thereof, and any subleases, or parts thereof, as
collateral security for such Mortgage(s), upon the condition that all rights
acquired under such Mortgage(s) shall be subject to each and every one of the
covenants, conditions and restrictions set forth in the Lease, and to all
rights and interests of IMA herein, none of which covenants, conditions
or restrictions is or shall be waived by IMA by reason of the right given so to
mortgage such interest in the Lease, except as expressly provided herein. If
ASC and/or ASC's successors and assigns shall mortgage this leasehold or
any part or parts thereof, and if the holder(s) of such Mortgage(s) shall send
to IMA written notice of such Mortgage(s) specifying the name and address of
the Mortgagee(s) and the pertinent recording data with respect to such
Mortgage(s), IMA agrees that so long as any such leasehold Mortgage(s) shall
remain unsatisfied of record or until written notice of satisfaction is given
by the holder(s) to IMA, the following provisions shall apply:
(a) There shall be no cancellation, surrender or modification of
the Lease by joint action of IMA and ASC without the prior consent in
writing of the leasehold
12
Mortgagee(s); provided that termination upon default shall be governed by
the following provisions of this Section 22.
(b) IMA shall, upon serving ASC with any notice of default,
simultaneously serve a copy of such notice upon the holder(s) of such
leasehold Mortgagee(s), provided IMA shall be kept informed in writing by
ASC of current addresses of all Mortgagees and no such notice of default
to ASC shall be effective as to any person or entity unless and until a
copy of such notice is served upon each such person or entity;
however, the failure of ASC to provide IMA with the name of any
Mortgagee(s) shall constitute a waiver of IMA's requirement to provide
notice. The leasehold Mortgagee(s) shall thereupon have the same period as
ASC, after service of such notice upon it, to remedy or cause to be
remedied the defaults complained of, and IMA shall accept such performance
by or at the instigation of such leasehold Mortgagee(s) as if the same had
been done by ASC.
(c) Anything herein contained notwithstanding, while such leasehold
Mortgage(s) remains unsatisfied of record, or until written notice of
satisfaction is given by the holder(s) to IMA, if any default shall occur
which, pursuant to any provision of the Lease, entitles IMA to terminate
the Lease, and if before the expiration of ten (10) days from the date of
service of notice of termination upon such leasehold Mortgagee(s) such
leasehold Mortgagee(s) shall have notified IMA of its desire to nullify
such notice and shall have paid to IMA all Rent and additional Rent and
other payments herein provided for, and then in default, and shall have
complied or shall commence the work of complying with all of the other
requirements of the Lease, if any are then in default, and shall
prosecute the same to completion with reasonable diligence, then in such
event IMA shall not be entitled to terminate the Lease and any notice of
termination theretofore given shall be void and of no effect.
(d) If IMA shall elect to terminate the Lease by reason of any
default of ASC, the leasehold Mortgagee(s) shall not only have the
right to nullify any notice of termination by curing such default, as
aforesaid, but shall also have the right to postpone and extend the
specified date for the termination of the Lease as fixed by IMA in its
notice of termination, for a period of not more than six (6) months,
provided that such leasehold Mortgagee(s) shall cure or cause to be cured
any then existing monetary defaults and meanwhile pay the Rent,
additional Rent and comply with and perform all of the other terms,
conditions and provisions of the Lease on ASC's part to be complied with
and performed, other than past non-monetary defaults, and provided
further, that the leasehold Mortgagee(s) shall forthwith take steps to
acquire or sell ASC's interest in the Lease by foreclosure of the
Mortgage(s) or otherwise and shall prosecute the same to completion with
all due diligence. If at the end of said six (6) month period the
leasehold Mortgagee(s) shall be actively engaged in steps to acquire or
sell ASC's interest herein, the time of said Mortgagee to comply with
the provisions of this Section shall be extended for such period as shall
be reasonably necessary to complete such steps with reasonable diligence
and continuity, provided the quality of the commercial alpine ski resort
operator shall not have been reduced or impaired.
13
(e) IMA agrees that in the event of termination of the Lease by
reason of any default by ASC other than for nonpayment of Rent or
additional Rent and other payments herein provided for, that IMA will
enter into a new lease of the Leased Premises with the leasehold
Mortgagee(s) or its nominee(s), provided reasonable assurances of the
capability of the new operator are provided, for the remainder of the
Term, effective as of the date of such termination, at the Rent and
additional Rent and upon the terms, provisions, covenants and agreements
as herein contained and subject only to the same conditions of title as
the Lease is subject to on the date of the execution hereof, and to the
rights, if any, of the parties then in possession of any part of the
Leased Premises, provided:
(i) Said Mortgagee(s) or its nominee(s) shall make written
request upon IMA for such new lease within fifteen (15) days after
the date of such termination and such written request shall be
accompanied by payment to IMA of all sums then due to IMA under
the Lease.
(ii) Said Mortgagee(s) or its nominee(s) shall pay to IMA at
the time of the execution and delivery of said new lease, any and
all sums which would at the time of the execution and delivery
thereof, be due pursuant to the Lease but for such termination, and
in addition thereto, any expenses, including reasonable attorney's
fees, to which IMA shall have been subjected by reason of such
default.
(iii) Said Mortgagee(s) or its nominee(s) shall perform and
observe all covenants herein contained on ASC's part to be performed
and shall further remedy any other conditions which ASC under the
terminated lease was obligated to perform under the terms of the
Lease.
(iv) IMA shall not warrant possession of the Leased Premises to
ASC under the new Lease.
(v) Such new lease shall be expressly made subject to the
rights, if any, of ASC under the terminated Lease.
(vi) The Mortgagee, or its nominee, under such new lease shall
have the same right, title and interest in and to the Ski Improvements
on the Leased Premises as ASC had under the terminated Lease.
(vii) Nothing herein contained shall require the leasehold
Mortgagee(s) or its nominee(s) to cure any default of ASC, except as
a condition of exercising its rights hereunder.
(viii) IMA agrees promptly after submission to execute,
acknowledge and deliver any agreements modifying the Lease requested
by any leasehold Mortgagee(s), provided that such modification does
not decrease ASC's obligations or decrease IMA's rights pursuant to
the Lease.
14
(ix) The proceeds from any insurance policies or arising from
a condemnation are to be held by any leasehold Mortgagee(s)
and distributed pursuant to the provisions of the Lease, but
the leasehold Mortgagee(s) may reserve its right to apply to
the mortgage debt all, or any part, of ASC's share of such
proceeds pursuant to such mortgage(s).
(x) The leasehold Mortgagee(s) shall be given notice of
any arbitration proceedings by the parties hereto and shall
have the right to intervene therein and be made a party to
such proceedings, and the parties hereto do hereby consent to
such intervention. In the event that the leasehold
Mortgagee(s) shall not elect to intervene or become a party
to such proceedings, the leasehold Mortgagee(s) shall receive
notice of, and a copy of any award or decision made in said
arbitration proceedings.
IMA, upon request, shall execute, acknowledge and deliver to each
leasehold Mortgagee(s), an agreement prepared at the sole cost and expense of
ASC in form satisfactory to such leasehold Mortgagee(s) between IMA, ASC and
the leasehold Mortgagee(s), agreeing to (a) all of the provisions of this
Section 22 and (b) such other provisions as are customary and acceptable to
all parties in mortgaging long-term leaseholds in connection with large
commercial development projects.
23. QUIET ENJOYMENT. ASC, upon paying the Rent and additional Rent and all
other sums and charges to be paid by it as herein provided, and observing and
keeping all covenants, warranties, agreements and conditions of the Lease on
its part to be kept, shall quietly have and enjoy the Leased Premises during
the times permitted by and during the Term of the Lease, without hindrance or
molestation. The quiet enjoyment is subject to the rights of usage reserved
by IMA in paragraph 5 above.
24. BANKRUPTCY, INSOLVENCY. If, during the Term of the Lease, (a) ASC
shall be adjudicated a bankrupt or adjudged to be insolvent; (b) a receiver
or trustee shall be appointed for ASC's property and affairs; (c) ASC shall
make an assignment for the benefit of creditors or shall file a petition in
bankruptcy or insolvency or for reorganization or shall make application for
the appointment of a receiver; or (d) any execution or attachment shall be
issued against ASC or any of ASC's property, whereby the Leased Premises or
any Ski Improvements thereon shall be taken or occupied or attempted to be
taken or occupied by someone other than ASC, except as may herein be
permitted, and such adjudication, appointment, assignment, petition,
execution or attachment shall not be set aside, vacated, discharged or bonded
within one hundred eighty (180) days after the issuance of the same, then a
default hereunder shall be deemed to have occurred so that the provisions of
Section 13.01 of the Development Agreement shall become effective and IMA
shall have the right and remedies provided for therein. Notwithstanding
anything to the contrary hereinabove contained, upon the occurrence of a
default pursuant to this Section 24, if the Rent or additional Rent due and
payable hereunder shall continue to be paid and the other covenants,
conditions and agreements of the Lease on ASC's part to be kept and performed
shall continue to be kept and performed, the quality of the commercial alpine
ski resort operation shall not have been reduced and no other event of
default shall have occurred, then no event of default
15
shall have been deemed to have occurred and the provisions of Section 13.01
shall not become effective.
25. DEFAULT AND REMEDIES. Any default under the Development Agreement
shall constitute a default hereunder for which the Parties shall have all of
the rights and remedies specified in Section 13.05 of the Development
Agreement.
26. IMA RIGHTS UPON TERMINATION. Upon any termination of the term of the
Lease pursuant this Article, or at any time thereafter, IMA may, in addition
to and without prejudice to any other rights and remedies IMA shall have at
law or in equity, reenter the Leased Premises, and recover possession thereof
and dispossess any or all occupants of the Leased Premises in the manner
prescribed by the statute relating to summary proceedings, or similar
statutes; but ASC in such case shall remain liable to IMA as hereinafter
provided, and to recover any costs associated therewith.
In case of any such default, reentry, expiration and/or dispossession by
summary proceedings: (i) the Rent shall become due thereupon and be paid up
to the time of such reentry, expiration and/or dispossession; (ii) IMA may
relet the Leased Premises or any part or parts thereof, either in the name of
IMA or otherwise, for a term or terms which may, at IMA's option, be less
than or exceed the period which would otherwise have constituted the balance
of the term of the Lease and may grant concessions of free rent; and (iii)
ASC or the legal representatives of ASC shall also pay IMA as liquidated
damages for failure of ASC to observe and perform ASC's covenants herein
contained any deficiency between the Rent hereby required and/or covenanted
to be paid and the net amount, if any, of the rents collected on account of
the sub-lease or sub-leases of the Leased Premises or net revenues otherwise
generated at or in connection with the Leased Premises for each month of the
period which would otherwise have constituted the balance of the Term of the
Lease. In computing such liquidated damages, there shall be added to the said
deficiency such reasonable expenses as IMA may incur in connection with
reletting. Any such liquidated damages shall be paid in monthly installments
by ASC on the day specified in the Lease and any suit brought to collect the
amount of the deficiency for any month shall not prejudice in any way the
rights of IMA to collect the deficiency for any subsequent month by a similar
proceeding. IMA, at IMA's option, may make such alteration, repairs, and/or
replacements in the Leased Premises as IMA, in IMA's sole judgment, considers
advisable and necessary for the purpose of reletting the Leased Premises; and
the making of such alterations, repairs, replacements and/or decorations
shall not operate or be construed to release ASC from liability hereunder as
aforesaid. IMA agrees to use commercially reasonable efforts to mitigate all
damages and to relet the Leased Premises in the event of any default
specified herein.
27. MISCELLANEOUS. Each of the terms and provisions of Article XIV of the
Development Agreement are incorporated herein by reference as though more
specifically set forth herein.
16
IN WITNESS WHEREOF, the parties have executed and delivered this Ski Lease as
of the day and year first above written.
ASC UTAH
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Administrative Officer
IRON MOUNTAIN ASSOCIATES, LLC.
By: WPA, LTD.
Its Manager
By: White Pine Associates, Inc.
Its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice-President/Secretary
WPA, LTD.
By: White Pine Associates, Inc.
Its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice-President/Secretary
IRON MOUNTAIN HOLDING GROUP, LC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman, Managing Committee
IRON MOUNTAIN ALLIANCE, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
17
