[Course Name]
[City]
[County]
[State]
L E A S E
GOLF TRUST OF AMERICA, L.P.
LANDLORD
AND
__________________________________,
TENANT
DATED AS OF __________, 1997
TABLE OF CONTENTS
PAGE
ARTICLE 1
LEASED PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2
DEFINITIONS, RULES OF CONSTRUCTION . . . . . . . . . . . . . . . . . . . . 2
2.1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 RULES OF CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 3
TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.1 INITIAL TERM. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.2 EXTENSION OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . 13
3.3 RIGHT OF FIRST OFFER TO LEASE . . . . . . . . . . . . . . . . . . 13
ARTICLE 4
RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.1 RENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.2 INCREASE IN INITIAL BASE RENT . . . . . . . . . . . . . . . . . . 14
4.3 PERCENTAGE RENT . . . . . . . . . . . . . . . . . . . . . . . . . 15
ANNUAL RECONCILIATION OF PERCENTAGE RENT. . . . . . . . . . . . . 15
4.6 RECORD-KEEPING. . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.7 ADDITIONAL CHARGES. . . . . . . . . . . . . . . . . . . . . . . . 16
4.8 LATE PAYMENT OF RENT. . . . . . . . . . . . . . . . . . . . . . . 16
4.9 NET LEASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.10 ALLOCATION OF REVENUES . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 5
SECURITY DEPOSIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.1 PLEDGE OF OWNER'S SHARES. . . . . . . . . . . . . . . . . . . . . 17
5.2 OBLIGATION TO . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.3 CROSS-COLLATERAL. . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 6
IMPOSITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.1 PAYMENT OF IMPOSITIONS. . . . . . . . . . . . . . . . . . . . . . 18
6.2 INFORMATION AND REPORTING . . . . . . . . . . . . . . . . . . . . 18
6.3 PRORATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.4 REFUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.5 UTILITY CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.6 ASSESSMENT DISTRICTS. . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 7
TENANT WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.1 NO TERMINATION, ABATEMENT, ETC. . . . . . . . . . . . . . . . . . 19
7.2 CONDITION OF THE PROPERTY . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 8
OWNERSHIP OF TANGIBLE PERSONAL PROPERTY. . . . . . . . . . . . . . . . . . 21
(i)
8.1 PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.2 TENANT'S PERSONAL PROPERTY. . . . . . . . . . . . . . . . . . . . 21
8.3 TENANT'S OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . . 22
8.4 LANDLORD'S WAIVERS. . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 9
USE OF PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.1 USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.2 SPECIFIC PROHIBITED USES. . . . . . . . . . . . . . . . . . . . . 23
9.3 MEMBERSHIP SALES. . . . . . . . . . . . . . . . . . . . . . . . . 23
9.4 LANDLORD TO GRANT EASEMENTS, ETC. . . . . . . . . . . . . . . . . 23
9.6 VALUATION OF REMAINDER INTEREST IN LEASE. . . . . . . . . . . . . 24
ARTICLE 10
HAZARDOUS MATERIALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.1 OPERATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.2 REMEDIATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.3 VIOLATIONS; ORDERS. . . . . . . . . . . . . . . . . . . . . . . . 25
10.4 PERMITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.5 REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.6 REMEDIATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.7 TENANT'S INDEMNIFICATION OF LANDLORD. . . . . . . . . . . . . . . 25
10.8 SURVIVAL OF INDEMNIFICATION OBLIGATIONS . . . . . . . . . . . . . 26
10.9 ENVIRONMENTAL VIOLATIONS AT EXPIRATION OR TERMINATION OF LEASE. . 26
ARTICLE 11
MAINTENANCE AND REPAIR . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.1 TENANT'S OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . . 27
11.2 WAIVER OF STATUTORY OBLIGATIONS . . . . . . . . . . . . . . . . . 27
11.3 MECHANIC'S LIENS. . . . . . . . . . . . . . . . . . . . . . . . . 28
11.4 SURRENDER OF PROPERTY . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 12
TENANT IMPROVEMENTS; SUBMITTAL OF BUDGETS; FINANCIAL STATEMENTS. . . . . . 28
12.1 TENANT'S RIGHT TO CONSTRUCT . . . . . . . . . . . . . . . . . . . 28
12.2 SCOPE OF RIGHT. . . . . . . . . . . . . . . . . . . . . . . . . . 29
12.3 COOPERATION OF LANDLORD . . . . . . . . . . . . . . . . . . . . . 29
12.4 CAPITAL REPLACEMENT FUND. . . . . . . . . . . . . . . . . . . . . 30
12.5 RIGHTS IN TENANT IMPROVEMENTS . . . . . . . . . . . . . . . . . . 30
12.6 LANDLORD'S RIGHT TO AUDIT CALCULATION OF GROSS GOLF REVENUE. . 31
12.7 ANNUAL BUDGET . . . . . . . . . . . . . . . . . . . . . . . . . . 31
12.8 FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 13
LIENS, ENCROACHMENTS AND OTHER TITLE MATTERS . . . . . . . . . . . . . . . 33
13.1 LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
13.2 ENCROACHMENTS AND OTHER TITLE MATTERS . . . . . . . . . . . . . . 34
ARTICLE 14
PERMITTED CONTESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
14.1 AUTHORIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . 35
14.2 INDEMNIFICATION OF LANDLORD . . . . . . . . . . . . . . . . . . . 36
(ii)
ARTICLE 15
INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
15.1 GENERAL INSURANCE REQUIREMENTS. . . . . . . . . . . . . . . . . . 36
15.2 OTHER INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . 38
15.3 REPLACEMENT COST. . . . . . . . . . . . . . . . . . . . . . . . . 38
15.4 WAIVER OF SUBROGATION . . . . . . . . . . . . . . . . . . . . . . 38
15.5 FORM SATISFACTORY, ETC. . . . . . . . . . . . . . . . . . . . . . 38
15.6 CHANGE IN LIMITS. . . . . . . . . . . . . . . . . . . . . . . . . 39
15.7 BLANKET POLICY. . . . . . . . . . . . . . . . . . . . . . . . . . 39
15.8 INSURANCE PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . 39
15.9 DISBURSEMENT OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . 40
15.10 EXCESS PROCEEDS, DEFICIENCY OF PROCEEDS . . . . . . . . . . . . . 41
15.11 RECONSTRUCTION COVERED BY INSURANCE . . . . . . . . . . . . . . . 41
15.12 RECONSTRUCTION NOT COVERED BY INSURANCE . . . . . . . . . . . . . 42
15.13 NO ABATEMENT OF RENT. . . . . . . . . . . . . . . . . . . . . . . 42
15.14 WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
15.15 DAMAGE NEAR END OF TERM . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE 16
CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
16.1 TOTAL TAKING. . . . . . . . . . . . . . . . . . . . . . . . . . . 43
16.2 PARTIAL TAKING. . . . . . . . . . . . . . . . . . . . . . . . . . 43
16.3 RESTORATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
16.4 AWARD-DISTRIBUTION. . . . . . . . . . . . . . . . . . . . . . . . 43
16.5 TEMPORARY TAKING. . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE 17
EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
17.1 EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . 44
17.2 PAYMENT OF COSTS. . . . . . . . . . . . . . . . . . . . . . . . . 46
17.3 CERTAIN REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . 46
17.4 DAMAGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
17.5 ADDITIONAL REMEDIES . . . . . . . . . . . . . . . . . . . . . . . 47
17.6 APPOINTMENT OF RECEIVER . . . . . . . . . . . . . . . . . . . . . 47
17.7 WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
17.9 IMPOUNDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE 18
LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT. . . . . . . . . . . . . . . . . 48
ARTICLE 19
LEGAL REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE 20
HOLDING OVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE 21
RISK OF LOSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE 22
INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
22.1 TENANT'S INDEMNIFICATION OF LANDLORD. . . . . . . . . . . . . . . 49
22.2 LANDLORD'S INDEMNIFICATION OF TENANT. . . . . . . . . . . . . . . 50
(iii)
22.3 MECHANICS OF INDEMNIFICATION. . . . . . . . . . . . . . . . . . . 50
22.4 SURVIVAL OF INDEMNIFICATION OBLIGATIONS; AVAILABLE INSURANCE
PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 23
SUBLETTING AND ASSIGNMENT. . . . . . . . . . . . . . . . . . . . . . . . . 51
23.1 PROHIBITION AGAINST ASSIGNMENT. . . . . . . . . . . . . . . . . . 51
23.2 SUBLEASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
23.3 TRANSFERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
23.4 REIT LIMITATIONS. . . . . . . . . . . . . . . . . . . . . . . . . 54
23.5 RIGHT OF FIRST . . . . . . . . . . . . . . . . . . . . . . . . . 54
23.7 MANAGEMENT AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE 24
OFFICER'S CERTIFICATES AND OTHER STATEMENTS. . . . . . . . . . . . . . . . 56
24.1 OFFICER'S CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . 56
24.2 ENVIRONMENTAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . 57
ARTICLE 25
LANDLORD MORTGAGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
25.1 LANDLORD MAY GRANT LIENS. . . . . . . . . . . . . . . . . . . . . 57
25.2 TENANT'S NON-DISTURBANCE RIGHTS . . . . . . . . . . . . . . . . . 58
25.3 FACILITY MORTGAGE PROTECTION. . . . . . . . . . . . . . . . . . . 58
ARTICLE 26
SALE OF FEE INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
26.1 RIGHT OF FIRST OFFER TO PURCHASE. . . . . . . . . . . . . . . . . 58
26.2 CONVEYANCE BY LANDLORD. . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE 27
ARBITRATION . . . . . . . . . . . . . 59
27.1 ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
27.2 ARBITRATION PROCEDURES. . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE 28
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
28.1 LANDLORD'S RIGHT TO INSPECT. . . . . . . . . . . . . . . . . . . 60
28.2 BREACH BY LANDLORD . . . . . . . . . . . . . . . . . . . . . . . 60
28.3 COMPETITION BETWEEN LANDLORD AND TENANT. . . . . . . . . . . . . 60
28.4 NO WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
28.5 REMEDIES CUMULATIVE. . . . . . . . . . . . . . . . . . . . . . . 61
28.6 ACCEPTANCE OF SURRENDER. . . . . . . . . . . . . . . . . . . . . 61
28.7 NO MERGER OF TITLE . . . . . . . . . . . . . . . . . . . . . . . 61
28.8 QUIET ENJOYMENT. . . . . . . . . . . . . . . . . . . . . . . . . 61
28.9 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
28.11 INVALIDITY OF TERMS OR PROVISIONS. . . . . . . . . . . . . . . . 62
28.12 PROHIBITION AGAINST USURY. . . . . . . . . . . . . . . . . . . . 62
28.13 AMENDMENTS TO LEASE. . . . . . . . . . . . . . . . . . . . . . . 62
28.14 SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . . . . . . 62
28.15 TITLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
28.16 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . 62
28.17 MEMORANDUM OF LEASE. . . . . . . . . . . . . . . . . . . . . . . 62
(iv)
28.18 ATTORNEYS' FEES. . . . . . . . . . . . . . . . . . . . . . . . . 63
28.19 NON-RECOURSE AS TO LANDLORD. . . . . . . . . . . . . . . . . . . 63
28.20 NO RELATIONSHIP. . . . . . . . . . . . . . . . . . . . . . . . . 63
28.21 RELETTING. . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Exhibits
Exhibit A - Legal Description of the Land
Exhibit B - Schedule of Improvements
Exhibit C - Other Leased Property
Exhibit D - Pledge Agreement
Exhibit E - Adjustments to Gross Golf Revenue for Private Clubs
Exhibit F - Calculation of Gross Golf Revenue for the Base Year by
Quarter
(v)
[Course Name]
[City]
[County]
[State]
LEASE
THIS LEASE (this "Lease"), dated as of _______________, 1997, is
entered into by and between GOLF TRUST OF AMERICA, L.P., a Delaware limited
partnership ("Landlord"), and ________________, a ________________ ("Tenant").
THE PARTIES ENTER THIS LEASE on the basis of the following facts,
understandings and intentions:
A. Pursuant to that certain Contribution and Leaseback Agreement (the
"Agreement") dated as of _____________, 1996 by and between Landlord and
_________________, a _________________ ("Transferor"), Transferor transferred to
Landlord all of its right, title and interest in and to the Property (as
hereafter defined); and
X. Xxxxxx, an Affiliate of Transferor, desires to lease the Property
from Landlord, and Landlord desires to lease the Property to Tenant, on the
terms set forth herein.
NOW THEREFORE, in consideration of the foregoing and the covenants and
agreements to be performed by Xxxxxx and Landlord hereunder, and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
ARTICLE 1
LEASED PROPERTY
Upon and subject to the terms and conditions set forth in this Lease,
Landlord leases to Tenant and Tenant leases from Landlord all of Landlord's
rights and interest (to the extent acquired from Transferor) in and to the
following real property, improvements, personal property and related rights
(collectively the "Property"):
(a) the Land;
(b) the Improvements;
(c) all rights, privileges, easements and appurtenances to the Land
and the Improvements, if any, including, without limitation, all of
Landlord's right, title and interest, if
1
any, in and to all mineral and water rights and all easements, rights-of-
way and other appurtenances used or connected with the beneficial use or
enjoyment of the Land and the Improvements;
(d) the Tangible Personal Property; and
(e) the Intangible Personal Property.
ARTICLE 2
DEFINITIONS, RULES OF CONSTRUCTION
2.1 DEFINITIONS. The following terms shall have the indicated
meanings:
"AAA" has the meaning provided in Section 27.1.
"ACTUAL PECUNIARY LOSS" has the meaning provided in Section 23.6.
"ADDITIONAL CHARGES" has the meaning provided in
Section 4.7.
"ADJUSTED NET OPERATING INCOME" shall have the meaning set forth in
EXHIBIT K of the Agreement.
"ADVISORY ASSOCIATION" means that certain association of lessees
operating golf courses under a lease with Landlord or any Affiliate of Landlord.
"AFFILIATE" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person.
"AGREEMENT" has the meaning provided in Recital A.
"ANNUAL BASE RENT" means the Initial Base Rent, as it may be adjusted
annually as provided in Section 4.2.
"ANNUAL BUDGET" has the meaning provided in Section 12.7.
"AUTHORIZATIONS" means all licenses, permits and approvals required by
any governmental or quasi-governmental agency, body or officer for the
ownership, operation and use of the Property or any part thereof.
"AWARD" means all compensation, sums or anything of value awarded,
paid or received on a total or partial Condemnation.
"BANKRUPTCY CODE" has the meaning provided in Section 23.6.
2
"BASE RENT" means one-twelfth of the Annual Base Rent.
"BASE RENT ESCALATOR" has the meaning provided in Section 4.2.
"BASE YEAR" means the calendar year 1996; provided, however, that
the Base Year shall refer to the calendar year immediately preceding the
Conversion Date if the Base Rent is increased as provided in Section 4.5. A
quarter-by-quarter calculation of Gross Golf Revenue in the Base Year is
attached hereto as EXHIBIT F.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which national banks in the City of New York, New
York, are authorized, or obligated, by law or executive order, to close.
"CAPITAL BUDGET" has the meaning provided in Section 12.7.
"CAPITAL EXPENDITURES" has the meaning provided in Section 12.4.
"CAPITAL REPLACEMENT FUND" means the amount of the Capital Replacement
Reserve, together with interest thereon as provided in Section 12.4, less
amounts withdrawn from the Capital Replacement Fund as provided in Section 12.4
"CAPITAL REPLACEMENT RESERVE" means an amount equal to ___% of each
Fiscal Quarter's Gross Golf Revenue, to be accrued quarterly by Landlord as part
of the Capital Replacement Fund, as provided in Section 12.4 hereof, based on
the Officer's Certificate.
"CHANGE OF CONTROL" means:
(a) the issuance and/or sale by Tenant or the sale by any stockholder
of Tenant of a Controlling interest in Tenant to a Person other than to a
Person that is an Affiliate of Tenant as of the date hereof;
(b) the sale, conveyance or other transfer of all or substantially
all of the assets of Tenant (whether by operation of law or otherwise);
(c) any other transaction, or series of transactions, which results
in the shareholders or partners who control Tenant as of the date hereof no
longer having Control of Tenant; or
(d) any transaction pursuant to which Tenant is merged with or
consolidated into another entity (other than an
3
entity owned and Controlled by an Affiliate of Tenant as of the date
hereof), and Tenant is not the surviving entity.
Notwithstanding the foregoing, a Change of Control shall not be
deemed to have occurred for purposes of this Lease if the shareholders or
partners who Control Tenant as of the date hereof remain in Control of Tenant
through an agreement or equity interest.
"CODE" means the Internal Revenue Code of 1986, as the same may be
amended or supplemented, and the rules and regulations promulgated thereunder.
"COMMENCEMENT DATE" means ___________________, 1997.
"COMPANY" means Golf Trust of America, Inc. and any subsidiaries
thereof, including, without limitation, GTA LP and GTA GP, and, for purposes of
Sections 10.7, 22.1, 22.3 and 22.4, each of their officers, employees,
directors, agents and representatives.
"CONDEMNATION" means (a) the exercise of any governmental power,
whether by legal proceedings or otherwise, by a Xxxxxxxxx, and (b) a voluntary
sale or transfer by Landlord to any Condemnor, either under threat of
condemnation or while legal proceedings for condemnation are pending.
"CONDEMNOR" means any public or quasi-public authority, or private
corporation or individual, having the power of condemnation.
"CONTINGENT PURCHASE PRICE" shall have the meaning set forth in
EXHIBIT K of the Agreement.
"CONTROL" means (including, with correlative meanings, the terms
"controlling" and "controlled by"), as applied to any Person, the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through the ownership of voting
securities, by contract or otherwise.
"CONVERSION DATE" means the earlier of (i) the date Transferor elects
to receive additional Owner's Shares in the Partnership as a Contingent Purchase
Price for the contribution of the Property, (ii) the date on which Transferor
elects in writing to waive its right to receive additional Owner's Shares, or
(iii) April 30, 2002.
"CPI" means the United States Consumer Price Index, All Urban
Consumers, U.S. City Average, All Items (1982-84 = 100).
"DATE OF TAKING" means the date the Condemnor has the right to
possession of the property being condemned.
4
"ENVIRONMENTAL LAWS" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et
seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et
seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the
Hazardous Materials Transportation Act, as amended, 49 U.S.C. Section 1801, et
seq.; the Superfund Amendments and Reauthorization Act of 1986, Pub. L. 99-499
and 99-563; the Occupational Safety and Health Act of 1970, as amended, 29
U.S.C. Section 651, et seq.; the Clean Air Act, as amended, 42 U.S.C. Section
7401, et seq.; the Safe Drinking Water Act, as amended, 42 U.S.C. Section 201,
et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section
1251, et seq.; and all federal, state and local environmental health and safety
statutes, ordinance, codes, rules, regulations, orders and decrees regulating,
relating to or imposing liability or standards concerning or in connection with
Hazardous Materials.
"EVENT OF DEFAULT" has the meaning provided in Section 17.1.
"EXPIRATION DATE" means December 31, 2006, as such date may be
extended by the Extended Terms.
"EXTENDED TERM" has the meaning provided in Section 3.2.
"FACILITY MORTGAGE" means a mortgage, deed of trust or other security
agreement securing any indebtedness or any other Landlord's Encumbrance placed
on the Property in accordance with the provisions of Article 25.
"FACILITY MORTGAGEE" means the holder or beneficiary of a Facility
Mortgage, if any; provided Landlord has given Tenant notice of the identity and
address of the Person.
"FISCAL QUARTER" means the three-month periods (or applicable portions
thereof) in any Fiscal Year from January 1 through March 31, April 1 through
June 30, July 1 through September 30 and October 1 through December 31.
"FISCAL YEAR" means the twelve (12) month period from January 1 to
December 31 of each year; provided that for purposes of the Lease Term and the
Pledge Agreement, the first Fiscal Year shall be deemed to include the period
from the Commencement Date to December 31, 1997.
"FIXTURES" means all permanently affixed equipment, machinery,
fixtures, and other items of real and/or personal property, including all
components thereof, now or hereafter located in, on or used in connection with
and permanently affixed to or incorporated into the Property, including all
furnaces, boilers, heaters, electrical equipment, heating, plumbing, lighting,
ventilating, refrigerating, air and water pollution control, waste disposal,
air-cooling and air-conditioning systems
5
and apparatus, sprinkler systems and fire and theft protection equipment, all
of which, to the greatest extent permitted by law, are hereby deemed by the
parties hereto to constitute real estate, together with all replacements,
modifications, alterations and additions thereto, but specifically excluding
all items included within the category of Tenant's Personal Property and any
Tenant Improvements.
"FULL REPLACEMENT COST" means the actual replacement cost from time to
time of the improvement being insured, including the increased cost of a
construction endorsement, less exclusions provided in the fire insurance policy.
"GAAP" means generally accepted accounting principles, consistently
applied.
"GROSS GOLF REVENUE" means all revenues accrued (whether by Tenant or
any subtenants, assignees, concessionaires or licensees) from or by reason of
the operation of the golf operations at the Property calculated in accordance
with GAAP (but excluding reasonable reserves for refunds, allowances and bad
debts applicable to such operations), including, without limitation, (i)
revenues from membership initiation fees (to the extent described in EXHIBIT E
attached hereto), (ii) periodic membership dues, (iii) greens fees, (iv) fees to
reserve a tee time, (v) guest fees, (vi) golf cart rentals, (vii) parking lot
fees, (viii) locker rentals, (ix) fees for golf club storage, (x) fees for the
use of swim, tennis or other facilities, (xi) charges for range balls, range
fees or other fees for golf practice facilities, (xii) fees or other charges
paid for golf or tennis lessons (except where retained by or paid to a USTA or
PGA professional in accordance with historical practice at the Property), (xiii)
fees or other charges for fitness centers, (xiv) forfeited deposits with respect
to any membership application, (xv) transfer fees imposed on any member in
connection with the transfer of any membership interest, (xvi) fees or other
charges paid to Tenant by sponsors of golf tournaments at the Property (unless
the terms under which Tenant is paid by such sponsor do not comply with Section
23.4, in which event the gross revenues received from such sponsor for the
tournament shall be excluded from Gross Golf Revenue and further provided that
Tenant shall use commercially reasonable efforts to structure such payment to
comply with Section 23.4), (xvii) advertising or placement fees paid by vendors
in exchange for exclusive use or name rights at the Property, and (xviii) fees
received in connection with any golf package sponsored by any hotel group,
condominium group, golf association, travel agency, tourist or travel
association or similar payments; PROVIDED, HOWEVER, that Gross Golf Revenue
shall not include:
(a) Other Revenue;
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(b) The amount of any city, county, state or federal sales,
admissions, usage, or excise tax on the item included in Gross Golf
Revenue, which is both added to or incorporated in the selling price and
paid to the taxing authority by Tenant; and
(c) Revenues or proceeds from sales or trade-ins of machinery,
vehicles, trade fixtures or personal property owned by Tenant used in
connection with Tenant's operation of the Property.
"GTA GP" means GTA GP, Inc. and any successor thereto.
"GTA LP" means GTA LP, Inc. and any successor thereto.
"HAZARDOUS MATERIAL" means any substance, material, waste, gas or
particulate matter which is regulated by any local, state or federal
governmental authority, including but not limited to any material or substance
which is (i) defined as a "hazardous waste", "hazardous material", or
"restricted hazardous waste" or words of similar import under any provision of
any Environmental Law; (ii) petroleum or petroleum products; (iii) asbestos;
(iv) polychlorinated biphenyl; (v) radioactive material; (vi) radon gas; (vii)
designated as a "hazardous substance" pursuant to Section 311 of the Clean Water
Act, 33 U.S.C. Section 1251, et seq. (42 U.S.C. Section 1317); (viii) defined as
a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901, et seq. (42 U.S.C. Section 6903); or (ix)
defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601,
et seq. (42 U.S.C. Section 9601).
"IMPARTIAL APPRAISER" means the casualty insurance company which is
then carrying the largest amount of casualty insurance carried on the Property.
"IMPOSITIONS" means collectively:
(a) all taxes (including all real and personal property, ad
valorem, sales and use, single business, gross receipts, transaction
privilege, rent or similar taxes);
(b) assessments and levies (including all assessments for public
improvements or benefits, whether or not commenced or completed prior to
the date hereof and whether or not to be completed within the Term);
(c) excises;
(d) fees (including license, permit, inspection, authorization
and similar fees); and
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(e) all other governmental charges;
in each case whether general or special, ordinary or extraordinary, or foreseen
or unforeseen, of every character in respect of the Property and/or the Rent or
Additional Charges (including all interest and penalties thereon due to any
failure in payment by Xxxxxx), which at any time during or in respect of the
Term hereof may be assessed or imposed on or in respect of or be a lien upon (i)
Landlord or Landlord's interest in the Property; (ii) the Property or any part
thereof or any therefrom or any estate, right, title or interest therein; or
(iii) any operation, use or possession of, or sales from or activity conducted
on or in connection with the Property or the leasing or use of the Property or
any part thereof; PROVIDED, HOWEVER, that Impositions shall not include:
(aa) any taxes based on net income (whether denominated as an income,
franchise, capital stock or other tax) imposed on Landlord or any other
Person other than Tenant;
(bb) any transfer or net revenue tax of Landlord or any other Person
other than Tenant; or
(cc) any tax imposed with respect to any principal or interest on any
indebtedness on the Property.
"IMPOUND CHARGES" has the meaning provided in Section 17.9.
"IMPOUND PAYMENT" has the meaning provided in Section 17.9.
"IMPROVEMENTS" means the golf course, driving range, putting greens,
clubhouse facilities, snack bar, restaurant, pro shop, buildings, structures,
parking lots, improvements, Fixtures and other items of real estate located on
the Land as more particularly described in EXHIBIT B attached hereto.
"INITIAL BASE RENT" means $_________ per year.
"INITIAL TERM" means the period of time from the Commencement Date
through December 31, 2006.
"INSURANCE REQUIREMENTS" mean all terms of any insurance policy
required by this Lease and all requirements of the issuer of any such policy.
"INTANGIBLE PERSONAL PROPERTY" means all intangible personal property
owned by Landlord and used solely in connection with the ownership, operation,
leasing or maintenance of the Real Property or the Tangible Personal Property,
and any and all trademarks and copyrights, guarantees, Authorizations, general
intangibles, business records, plans and specifications, surveys,
8
all licenses, permits and approvals solely with respect to the construction,
ownership, operation or maintenance of the Property.
"LAND" means the land described in EXHIBIT A attached hereto.
"LANDLORD" means Golf Trust of America, L.P., and any successor or
assignee permitted in accordance with the terms of the Lease.
"LANDLORD'S ENCUMBRANCE" means any lien, encumbrance or title
retention agreement upon the Property, or any portion thereof or interest
therein, whether to secure borrowing or other means of financing or refinancing.
"LEASE" means this Lease, as the same may be amended from time to
time.
"LEASE TERM" means the period from the Commencement Date through and
including the Expiration Date (or the termination date, if earlier terminated
pursuant to the provisions hereof).
"LEGAL REQUIREMENTS" means all federal, state, county, municipal and
other governmental statutes, laws (including the Americans with Disabilities Act
and any Environmental Laws), rules, orders, regulations, ordinances, judgments,
decrees and injunctions affecting either the Property or the construction, use
or alteration thereof, whether now or hereafter enacted and in force, including
any which may (i) require repairs, modifications, or alterations in or to the
Property; (ii) in any way adversely affect the use and enjoyment thereof, and
all permits, licenses and authorizations and regulations relating thereto, and
all covenants, agreements, restrictions and encumbrances contained in any
instruments, either of record or known to Tenant (other than encumbrances
created by Landlord without the consent of Tenant), at any time in force
affecting the Property; or (iii) require the cleanup or other treatment of any
Hazardous Material.
"NET OPERATING INCOME" shall have the meaning set forth in EXHIBIT K
of the Agreement.
"NON-COMPLYING PARTY" has the meaning provided in Section 27.2.
"OFFICER'S CERTIFICATE" means a certificate of Tenant signed by an
officer authorized to so sign by the board of directors or by-laws, or if Tenant
is a partnership, by an officer authorized to so sign by the general partners.
"OPERATING BUDGET" has the meaning provided in Section 12.7.
9
"OTHER LEASED PROPERTIES" means the property or properties leased or
hereafter leased to Tenant or an Affiliate of Tenant by Landlord or an Affiliate
of Landlord, other than pursuant to this Lease, which as of the date hereof are
the properties listed on EXHIBIT C attached hereto.
"OTHER REVENUE" means all revenue received (whether by Tenant or any
subtenants, assignees, concessionaires or licensees) from or by reason of the
Property relating to (i) the operation of snack bars, restaurants, bars,
catering functions, and banquet operations, (ii) sale of merchandise and
inventory on the Property, and (iii) photography services.
"OVERDUE RATE" means, on any date, a rate equal to the Prime Rate plus
an additional five percent (5%) per annum, but in no event greater than the
maximum rate then permitted under applicable law.
"OWNER'S SHARES" means limited partnership interests in the
Partnership.
"PARTNERSHIP" means Golf Trust of America, L.P., a Delaware limited
partnership.
"PERCENTAGE RENT" means, for any Fiscal Year during the Lease Term,
thirty-three and one-third percent (331/3%) of the positive difference, if any,
between the current year's Gross Golf Revenue and the Gross Golf Revenue for the
Base Year, pro rated for any partial periods.
"PERMITTED ASSIGNEE" means a Person or an Affiliate of a Person
meeting one or more of the following standards:
(a) an existing lessee under a lease with Landlord or any
Affiliate of Landlord who is not then in default under its lease;
(b) any entity affiliated with an entity acquiring from an
Affiliate of Tenant its resort and related operations located at or
adjacent to the Property, and provided Landlord has approved such assignee
in its reasonable discretion, based on, among other things, the proposed
assignee's reputation and experience in owning, operating and managing golf
courses similar in type to the Property and the proposed assignee's net
worth and financial resources; and
(c) a list of pre-approved assignees prepared by Landlord from
time to time in consultation with the Advisory Association.
"PERSON" means and includes natural persons, corporations, limited
partnerships, limited liability companies,
10
general partnerships, joint stock companies, joint ventures, associations,
companies, trusts, banks, trusts companies, land trusts, business trusts,
Indian tribes or other organizations, whether or not legal entities, and
governments and agencies and political subdivisions thereof.
"PLEDGE AGREEMENT" means that certain pledge agreement dated as of the
date of this Lease, by and between Transferor and Landlord, in the form attached
hereto as EXHIBIT D.
"PLEDGED OWNER'S SHARES" means the Owner's Shares pledged pursuant to
the Pledge Agreement.
"PRIMARY INTENDED USE" means the operation of a golf course and other
activities incidental to the operation of a golf course.
"PRIME RATE" means on any date, a rate equal to the annual rate on
such date announced by Citibank, N.A., or its successor entity, to be its prime
rate or, if the prime rate is discontinued, the base rate for 90-day unsecured
loans to its corporate borrowers of the highest credit standing.
"PROPERTY" means the Real Property, the Tangible Personal Property and
the Intangible Personal Property
"REAL PROPERTY" means the Land and the Improvements, and all easements
and appurtenances attached thereto.
"RENT" means, collectively, the Base Rent and Percentage Rent.
"STATE" means the State or Commonwealth in which the Property is
located.
"TANGIBLE PERSONAL PROPERTY" means all items of tangible personal
property and fixtures (if any) owned by Landlord and located on or used solely
in connection with the Real Property, including, but not limited to, machinery,
equipment, furniture, furnishings, movable walls or partitions, phone systems,
restaurant equipment, computers or trade fixtures, golf course operation and
maintenance equipment, including mowers, tractors, aerators, sprinklers,
sprinkler and irrigation facilities and equipment, valves or rotors, driving
range equipment, athletic training equipment, office equipment or machines,
antiques or other decorations, furniture, computers or other control systems,
and equipment or machinery of every kind or nature, including all warranties and
guaranties associated therewith, with the exception of golf carts.
"TENANT" means __________________ and any successor thereto, or
assignee thereof, as permitted by the terms of this Lease.
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"TENANT IMPROVEMENTS" has the meaning provided in Section 12.1.
"TENANT'S PERSONAL PROPERTY" has the meaning provided in Section 8.2.
"TENANT'S RIGHT OF FIRST OFFER TO LEASE" has the meaning provided in
Section 3.3.
"TENANT'S RIGHT OF FIRST OFFER TO PURCHASE" has the meaning provided
in Section 26.1.
"TERM" means, collectively, the Initial Term and any Extended Terms,
as the context may require, unless earlier terminated pursuant to the provisions
hereof.
"TRANSFEROR" has the meaning provided in Recital A.
"TRUSTEE" has the meaning provided in Section 23.6.
"UNAVOIDABLE DELAYS" means delays due to strikes, lockouts, power
failure, acts of God, governmental restrictions, enemy action, civil commotion,
fire, unavoidable casualty or other causes beyond the control of the party
responsible for performing an obligation hereunder, PROVIDED THAT lack of funds
shall not be deemed a cause beyond the control of either party hereto unless
such lack of funds is caused by the failure of the other party hereto to perform
any obligations of such party under this Lease.
"UNSUITABLE FOR ITS PRIMARY INTENDED USE" means a state of condition
of the Property such that in the good faith judgment of Landlord, reasonably
exercised, the Property cannot be operated on a commercially practicable basis
for its Primary Intended Use.
2.2 RULES OF CONSTRUCTION. The following rules shall apply to the
construction and interpretation of this Lease:
(a) Singular words shall connote the plural number as well as the
singular and vice versa, and the masculine shall include the feminine and
the neuter.
(b) All references herein to particular articles, sections,
subsections, clauses or exhibits are references to articles, sections,
subsections, clauses or exhibits of this Lease.
(c) The table of contents and headings contained herein are solely
for convenience of reference and shall not constitute a part of this Lease
nor shall they affect its meaning, construction or effect.
12
(d) "Including" and variants thereof shall be deemed to mean
"including without limitation."
(e) All accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles then in effect.
(f) Each party hereto and its counsel have reviewed and revised (or
requested revisions of) this Lease and have participated in the preparation
of this Lease, and therefore any usual rules of construction requiring that
ambiguities are to be resolved against a particular party shall not be
applicable in the construction and interpretation of this Lease or any
exhibits hereto.
ARTICLE 3
TERM
3.1 INITIAL TERM. The Initial Term shall commence on the
Commencement Date and shall terminate on December 31, 2006.
3.2 EXTENSION OPTIONS. Landlord grants Tenant the right to extend
the Initial Term of this Lease six (6) consecutive times for a period of five
(5) years each (each such extension, an "Extended Term"). Tenant may exercise
its option for an Extended Term solely by giving written notice at least one
hundred eighty (180) days prior to the termination of the then-current term.
Tenant shall be entitled to exercise these options only if at the time of the
giving of such notice, Tenant is then the lessee of the Property pursuant to
this Lease, and at the time of the commencement of the applicable Term or
Extended Term no Event of Default shall then exist. During the Extended Term,
all of the terms and conditions of this Lease shall continue in full force and
effect, as the same may be amended, supplemented or modified.
3.3 RIGHT OF FIRST OFFER TO LEASE. Upon the expiration of the Lease
Term and provided that Tenant has exercised each Extended Term and no Event of
Default then exists beyond any applicable notice and cure period, Tenant shall
have a right of first offer ("Tenant's Right of First Offer to Lease") to lease
the Property upon the same terms and conditions as Landlord, at its election,
intends to offer to lease the Property to a third party. Tenant shall be
entitled to exercise Xxxxxx's Right of First Offer to Lease only if at the time
of the giving of such notice and at the time of the commencement of the
applicable term no Event of Default shall then exist and only if Landlord elects
to lease the Property at the expiration of the Lease Term. Not more than nine
(9) months and not less than three (3) months prior to the expiration of the
Lease Term, Landlord shall, if applicable, give Tenant written notice of its
intent to lease the Property and shall indicate the terms and conditions upon
which Landlord intends to lease the Property.
13
Tenant shall thereafter have a period of thirty (30) days to elect by
unequivocal written notice to Landlord to lease the Property on the same terms
and conditions as Landlord intends to offer to a third party; provided prior to
Tenant's acceptance Landlord shall retain the right to elect not to lease the
Property by giving Tenant written notice thereof. If Tenant elects not to
lease the Property, then Landlord shall be free to lease the Property to a
third party. However, if the Base Rent for such proposed lease is reduced by
five percent (5%) or more as compared to the Base Rent included in the lease
that Tenant rejected, then Landlord shall again offer Tenant the right to
acquire the Property upon the same terms and conditions, provided that Tenant
shall have only fifteen (15) days to accept such offer.
ARTICLE 4
RENT
4.1 RENT. Tenant will pay to Landlord, in lawful money of the United
States of America, Rent during the Initial Term or any Extended Term. Payments
of Base Rent shall be paid monthly, on the first day of each month in arrears,
at Xxxxxxxx's address set forth in Section 28.9 or at such other place or to
such other Person as Landlord from time to time may designate in writing. The
first monthly installment shall be prorated as to any partial month. If any
payment owing hereunder shall otherwise be due on a day that is not a Business
Day, such payment shall be due on the next succeeding Business Day. No payment
in addition to the payment of Rent shall be required in order to require
Landlord to accrue the Capital Replacement Fund as provided in Section 12.4.
Tenant shall receive a credit against Rent (or be paid directly, at Landlord's
option) for any operating expense credits or operating revenues credited to
Landlord pursuant to the Agreement which are applicable to any period in the
Lease Term (E.G., credit for real property taxes, membership dues, sublease
rents, etc.) and conversely Tenant shall reimburse Landlord for any operating
expenses paid for by Landlord pursuant to the Agreement which are the
responsibility of Tenant hereunder.
4.2 INCREASE IN INITIAL BASE RENT. Beginning on January 1, 1998 and
on each January 1 thereafter through and including January 1, 2002, the Annual
Base Rent will increase by the lesser of (i) three percent (3%) of the Annual
Base Rent payable for the immediately preceding year, or (ii) two hundred
percent (200%) of the change in CPI from the immediately preceding fiscal year
(the "Base Rent Escalator"); provided the January 1, 1998 increase shall be pro
rated for the number of days in the Lease Term in 1997 divided by 365 and
multiplied by the applicable Base Rent Escalator. In addition, if the Annual
Base Rent is increased as provided in Section 4.5, then the Base Rent Escalator
shall continue to apply to each of the five (5) years following such increase,
with the increase effective on the
14
anniversary of the increase in Base Rent as provided in Section 4.5 in lieu of
increases on January of each year.
4.3 PERCENTAGE RENT. In addition to Base Rent, Tenant shall pay
Percentage Rent as provided herein. Beginning in the first year of the Initial
Term and continuing for the Initial Term and any Extended Term, Tenant shall
calculate the Gross Golf Revenue for each Fiscal Quarter (or shorter period, if
applicable) within twenty (20) days of the end of such Fiscal Quarter (or
shorter period, if applicable) and submit such calculation in writing to
Landlord by way of an Officer's Certificate. If the Gross Golf Revenue for
that Fiscal Quarter (or shorter period, if applicable) is greater than the
Gross Golf Revenue for the same Fiscal Quarter (or shorter period, if
applicable) in the Base Year (and, following the Fiscal Quarter ending March
31, on a year-to-date basis), then Tenant shall pay to Landlord the Percentage
Rent upon submittal of the Officer's Certificate. The Percentage Rent payable
in any period in any Fiscal Year shall be adjusted to reflect the Percentage
Rent paid on a year-to-date cumulative basis for the Fiscal Year (pro rated for
any partial periods) and the limits set forth in the next two sentences on a
pro rated basis. The increase in Rent resulting from the payment of Percentage
Rent (together with any increase in Base Rent pursuant to Section 4.2) payable,
if any, during each of the first five (5) full calendar years of the Initial
Term shall be limited to five percent (5%) of the Rent payable for the prior
calendar year, or in the case of 1997, of the Initial Base Rent prorated.
Tenant shall receive a credit against the payment of Percentage Rent in an
amount equal to the increase in the Base Rent over the Initial Base Rent.
4.4 ANNUAL RECONCILIATION OF PERCENTAGE RENT. Within sixty (60) days
after the end of each Fiscal Year, or after the expiration or termination of
this Lease, Tenant shall deliver to Landlord an Officer's Certificate setting
forth (i) the Gross Golf Revenue for the Fiscal Year just ended, and (ii) a
comparison of the amount of the Percentage Rent actually paid during such Fiscal
Year versus the amount of Percentage Rent actually owing on the basis of the
annual calculation of the Gross Golf Revenue. If the Percentage Rent for such
Fiscal Year exceeds the sum of the quarterly payments of Percentage Rent
previously paid by Tenant, Tenant shall pay such deficiency to Landlord along
with such Officer's Certificate. If the Percentage Rent for such Fiscal Year is
less than the amount of Percentage Rent previously paid by Tenant, Landlord
shall, at Landlord's option, either (i) remit to Tenant its check in an amount
equal to such difference, or (ii) grant Tenant a credit against the payment of
Rent next coming due. Landlord shall have the right to audit all of Tenant's
business operations at the Property so as to determine the calculation of
Percentage Rent as provided in Section 12.6.
15
4.5 INCREASE IN BASE RENT FOLLOWING CONVERSION DATE. For the Fiscal
Year in which the Conversion Date occurs, the Annual Base Rent shall be
increased, effective as of the date the additional Owner's Shares are issued to
the Transferor, to an amount equal to the Adjusted Net Operating Income.
4.6 RECORD-KEEPING. Tenant shall utilize an accounting system for
the Property in accordance with its usual and customary practices and in
accordance with GAAP which will accurately record all Gross Golf Revenue.
Tenant shall retain all accounting records for each Fiscal Year conforming to
such accounting system until at least five (5) years after the expiration of
such Fiscal Year.
4.7 ADDITIONAL CHARGES. In addition to the Base Rent and Percentage
Rent, (a) Tenant shall also pay and discharge when due and payable all other
amounts, liabilities, obligations and Impositions which Tenant assumes or agrees
to pay under this Lease, and (b) in the event of any failure on the part of
Tenant to pay any of those items referred to in clause (a) above, Tenant shall
also pay and discharge every fine, penalty, interest and cost which may be added
for non-payment or late payment of such items (the items referred to in clauses
(a) and (b) above being referred to herein collectively as the "Additional
Charges"). Except as otherwise provided in this Lease, all Additional Charges
shall become due and payable at the earlier of (i) thirty (30) days after either
Landlord or the applicable third party delivery of an invoice to Tenant, or (ii)
the date of delinquency with respect to Impositions.
4.8 LATE PAYMENT OF RENT. Tenant hereby acknowledges that late
payment by Tenant to Landlord of Base Rent, Percentage Rent or Additional
Charges will cause Landlord to incur costs not contemplated under the terms of
this Lease, the exact amount of which is presently anticipated to be extremely
difficult to ascertain. Such costs may include processing and accounting
charges and late charges which may be imposed on Landlord by the terms of any
mortgage or deed of trust covering the Property and other expenses of a similar
or dissimilar nature. Accordingly, if any installment of Base Rent, Percentage
Rent or Additional Charges (but only as to those Additional Charges which are
payable directly to Landlord) shall not be paid within ten (10) days after the
date such payment is due, Tenant will pay Landlord on demand, as Additional
Charges, a late charge equal to the lesser of five percent (5%) of such
installment or $1,000. The parties agree that this late charge represents a
fair and reasonable estimate of the costs that Landlord will incur by reason of
late payment by Xxxxxx and is not a penalty. In addition, if any installment of
Base Rent, Percentage Rent or Additional Charges (but only as to those
Additional Charges which are payable directly to Landlord) shall not be paid
within five (5) days after the due date with respect to Base Rent or Percentage
Rent or delivery of an invoice to Tenant with respect
16
to the Additional Charge, the amount unpaid shall bear interest, from such
due date to the date of payment thereof, computed at the Overdue Rate on the
amount of such installment, and Tenant will pay such interest to Landlord as
Additional Charges. The acceptance of any late charge or interest shall not
constitute a waiver of, nor excuse or cure, any default under this Lease, nor
prevent Landlord from exercising any other rights and remedies available to
Landlord.
4.9 NET LEASE. This Lease shall be a triple net lease and Rent
shall be payable to Landlord without notice or demand and without set-off,
counterclaim, recoupment, abatement, suspension, determent, deduction or
defense, except as expressly provided herein, so that this Lease shall yield to
Landlord the full amount of the installments of Base Rent, Percentage Rent and
Additional Charges throughout the Term.
4.10 ALLOCATION OF REVENUES. In the event that individuals or groups
purchase for a single price items which are both included and excluded from
Gross Golf Revenue (e.g., green fees and dinner), then Tenant agrees that
revenues shall be allocated to Gross Golf Revenue in a reasonable manner
consistent with the historical allocation of such revenues.
ARTICLE 5
SECURITY DEPOSIT
5.1 PLEDGE OF OWNER'S SHARES. On or prior to the Commencement Date,
Tenant shall cause the Pledge Agreement to be executed for the benefit of
Landlord.
5.2 OBLIGATION TO WITHHOLD DISTRIBUTIONS. Notwithstanding the above
provisions, if the Net Operating Income for the Property falls below the
coverage ratio set forth in Section 2(a) of EXHIBIT D-1 to the Pledge Agreement,
at any time following the release of any Pledged Owner's Shares (or security
deposit held by Landlord in lieu thereof), then Tenant shall thereafter retain,
and not make cash distributions (except as may be necessary to pay any
applicable taxes) to its shareholders, partners or members, as applicable, until
such time as Tenant has accumulated six (6) months of Base Rent at the then
current level. Cash distributions may be made at such time as Tenant shall have
again satisfied such coverage ratios for two (2) consecutive Fiscal Years.
Tenant shall provide Landlord with such documentation, including Officer's
Certificates and financial statements, within forty-five (45) days after the end
of each Fiscal Quarter as are necessary to establish Tenant's compliance with
the foregoing requirements.
5.3 CROSS-COLLATERAL. The Pledged Owner's Shares shall also secure
Tenant's or Tenant's Affiliates obligations under each of the leases for the
Other Leased Properties.
17
5.4 LANDLORD'S LIEN. To the fullest extent permitted by applicable
law, Landlord is granted a lien and security interest on all of Tenant's
personal property now or hereafter located on the Property, and such lien and
security interest shall remain attached to Tenant's personal property until
payment in full of all Rent and satisfaction of all of Tenant's obligations
hereunder; provided, however, Landlord shall subordinate its lien and security
interest only to that of any third party lender or seller which finances
Tenant's personal property, the terms and conditions of such subordination to be
satisfactory to Landlord in its reasonable discretion. Tenant shall, upon the
request of Landlord, execute such financing statements or other documents or
instruments reasonably requested by Landlord to perfect the lien and security
interests herein granted.
ARTICLE 6
IMPOSITIONS
6.1 PAYMENT OF IMPOSITIONS. Subject to Section 6.3 and Section 17.9,
Tenant will pay, or cause to be paid, all Impositions before any fine, penalty,
interest or cost may be added for non-payment, such payments to be made directly
to the taxing authorities where feasible. All payments of Impositions shall be
subject to Xxxxxx's right of contest pursuant to the provisions of Section 6.3
or Article 14. Upon request, Tenant shall promptly furnish to Landlord copies
of official receipts, if available, or other satisfactory proof evidencing such
payments, such as cancelled checks.
6.2 INFORMATION AND REPORTING. Landlord shall give prompt notice to
Tenant of all Impositions payable by Tenant hereunder of which Xxxxxxxx at any
time has actual knowledge, but Xxxxxxxx's failure to give any such notice shall
in no way diminish Xxxxxx's obligations hereunder to pay such Impositions.
Landlord and Tenant shall, upon reasonable request of the other, provide such
data as is maintained by the party to whom the request is made with respect to
the Property as may be necessary to prepare any required returns and reports.
In the event any applicable governmental authorities classify any property
covered by this Lease as personal property, Tenant shall file all personal
property tax returns in such jurisdictions where it must legally so file. Each
party, to the extent it possesses the same, will provide the other party, upon
reasonable request, with cost and depreciation records necessary for filing
returns for any property so classified as personal property.
6.3 PRORATIONS. Impositions imposed in respect of the tax-fiscal
period during which the Lease commences or terminates shall be adjusted and
prorated between Landlord and Tenant, whether or not such Imposition is imposed
before or after such commencement or termination, and Tenant's obligation to pay
its prorated share thereof shall survive such termination. If any
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Imposition may, at the option of the taxpayer, lawfully be paid in
installments (whether or not interest shall accrue on the unpaid balance of
such Imposition), Tenant may elect to pay in installments, in which event
Tenant shall pay all installments (and any accrued interest on the unpaid
balance of the Imposition) that are due during the Term hereof before any
fine, penalty, premium, further interest or cost may be added thereto.
6.4 REFUNDS. If any refund shall be due from any taxing authority in
respect of any Imposition paid by Xxxxxx, the same shall be paid over to or
retained by Tenant if no Event of Default shall have occurred hereunder and be
continuing. Any such funds retained by Landlord due to an Event of Default
shall be applied as provided in Article 17.
6.5 UTILITY CHARGES. Tenant shall pay or cause to be paid prior to
delinquency charges for all utilities and services, including, without
limitation, electricity, telephone, trash disposal, gas, oil, water, sewer,
communication and all other utilities used in the Property during the Term.
6.6 ASSESSMENT DISTRICTS. Landlord shall not voluntarily consent to
or agree in writing to (i) any special assessment or (ii) the inclusion of any
material portion of the Leased Property into a special assessment district or
other taxing jurisdiction unless Tenant shall have consented thereto, which
consent shall not be unreasonably withheld or unless Landlord agrees to pay the
cost thereof.
ARTICLE 7
TENANT WAIVERS
7.1 NO TERMINATION, ABATEMENT, ETC. Subject to Article 21 and except
as otherwise specifically provided in this Lease, and except for those causes
resulting from the willful misconduct or gross negligence of Landlord or any
person whose claim arose under Xxxxxxxx, (i) Tenant, to the extent permitted by
law, shall remain bound by this Lease in accordance with its terms and shall
neither take any action without the consent of Landlord to modify, surrender or
terminate the same, nor be entitled to any abatement, deduction, deferment or
reduction of Rent, or set-off against the Rent by reason of, and (ii) the
respective obligations of Landlord and Tenant shall not be otherwise affected by
reason of:
(a) any damage to, or destruction of, any Property or any portion
thereof from whatever cause or any taking of the Property or any portion
thereof;
(b) the lawful or unlawful prohibition of, or restriction upon,
Xxxxxx's use of the Property, or any portion thereof, the interference with
such use by any Person, or by reason of eviction by paramount title;
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(c) any claim which Tenant has or might have against Landlord or by
reason of any default or breach of any warranty by Landlord under this
Lease or any other agreement between Landlord and Tenant, or to which
Landlord and Tenant are parties;
(d) any bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution, winding up or other proceedings
affecting Landlord or any assignee or transferee of Landlord; or
(e) for any other cause whether similar or dissimilar to any of the
foregoing other than a discharge of Tenant from any such obligations as a
matter of law.
Tenant hereby specifically waives all rights, arising from any
occurrence whatsoever, which may now or hereafter be conferred upon it by law
(i) to modify, surrender or terminate this Lease or quit or surrender the
Property or any portion thereof, or (ii) to entitle Tenant to any abatement,
reduction, suspension or deferment of the Rent or other sums payable by Tenant
hereunder, except as otherwise specifically provided in this Lease. The
obligations of Landlord and Tenant hereunder shall be separate and independent
covenants and agreements and the Rent and all other sums payable by Tenant
hereunder shall continue to be payable in all events unless the obligations to
pay the same shall be terminated pursuant to the express provisions of this
Lease or by termination of this Lease other than by reason of an Event of
Default.
7.2 CONDITION OF THE PROPERTY. Xxxxxx acknowledges receipt and
delivery of possession of the Property and that Xxxxxx has examined and
otherwise has knowledge of the condition of the Property prior to the execution
and delivery of this Lease and has found the same to be in good order and repair
and satisfactory for its purposes hereunder. Regardless, however of any
inspection made by Tenant of the Property and whether or not any patent or
latent defect or condition was revealed or discovered thereby, Tenant is leasing
the Property "as is" in its present condition. Tenant waives and releases any
claim or cause of action against Landlord with respect to the condition of the
Property including any defects or adverse conditions latent or patent, matured
or unmatured, known or unknown by Tenant or Landlord as of the date hereof.
TENANT ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING AS LANDLORD HEREUNDER OR IN
ANY OTHER CAPACITY) HAS NOT MADE AND WILL NOT MAKE, NOR SHALL LANDLORD BE DEEMED
TO HAVE MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT
TO THE PROPERTY, INCLUDING ANY WARRANTY OR REPRESENTATION AS TO (i) ITS FITNESS,
DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE, (ii) THE QUALITY OF THE
MATERIAL OR WORKMANSHIP THEREIN, (iii) THE EXISTENCE OF ANY DEFECT, LATENT OR
PATENT, (iv) LANDLORD'S TITLE THERETO, (v) VALUE, (vi) COMPLIANCE WITH
SPECIFICATIONS, (vii) LOCATION, (viii) USE, (ix) CONDITION,
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(x) MERCHANTABILITY, (xi) QUALITY, (xii) DESCRIPTION, (xiii) DURABILITY,
(xiv) OPERATION, (xv) THE EXISTENCE OF ANY HAZARDOUS MATERIAL OR (xvi)
COMPLIANCE OF THE PROPERTY WITH ANY LAW (INCLUDING ENVIRONMENTAL LAWS) OR
LEGAL REQUIREMENTS. TENANT ACKNOWLEDGES THAT THE PROPERTY IS OF ITS
SELECTION AND TO ITS SPECIFICATIONS AND THAT THE PROPERTY HAS BEEN INSPECTED
BY TENANT AND IS SATISFACTORY TO IT. IN THE EVENT OF ANY DEFECT OR
DEFICIENCY IN THE PROPERTY OF ANY NATURE, WHETHER LATENT OR PATENT, AS
BETWEEN LANDLORD AND TENANT, LANDLORD SHALL NOT HAVE ANY RESPONSIBILITY OR
LIABILITY WITH RESPECT THERETO OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES
(INCLUDING STRICT LIABILITY IN TORT). THE PROVISIONS OF THIS SECTION 7.2
HAVE BEEN NEGOTIATED AND REVIEWED BY TENANT'S LEGAL COUNSEL, AND ARE INTENDED
TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES BY LANDLORD,
EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY, ARISING PURSUANT TO THE
UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW OR HEREAFTER IN EFFECT OR
ARISING OTHERWISE.
Tenant represents to Landlord that Xxxxxx has examined the title to
the Property prior to the execution and delivery of this Lease and has found the
same to be satisfactory for the purposes contemplated hereby. Tenant
acknowledges that (A) Tenant or an Affiliate of Tenant has previously operated
the Property and has knowledge of its condition which is superior to that of
Landlord, (B) fee simple title, except where the Property is held under a ground
lease, (both legal and equitable) is in Landlord and that Tenant has only the
leasehold right of possession and use of the Property as provided herein, (C) to
Tenant's knowledge the Improvements conform to all material Legal Requirements
and all material Insurance Requirements, (D) all easements necessary or
appropriate for the use or operation of the Property have been obtained, (E) all
contractors and subcontractors retained by Tenant who have performed work on or
supplied materials to the Property have been fully paid, and all materials to
the Property have been fully paid for, (F) the Improvements constructed by
Tenant or any Affiliate of Tenant have been completed in all material respects
in a workmanlike manner of first class quality, and (G) all equipment necessary
or appropriate for the use or operation of the Property has been installed and
is presently operative in all material respects.
ARTICLE 8
OWNERSHIP OF TANGIBLE PERSONAL PROPERTY
8.1 PROPERTY. Tenant acknowledges that (i) the Property has been
transferred to Landlord and leased to Tenant, (ii) the Property is the property
of Landlord and (iii) that Tenant has only the right to the use of such Property
during the Term of and upon the terms and conditions of this Lease.
8.2 TENANT'S PERSONAL PROPERTY. Tenant shall maintain all of the
Property, whether initially included in the Lease or thereafter acquired by
Landlord or Tenant, in good condition and
21
repair, normal wear and tear excepted. Upon the loss, destruction or
obsolescence of any Tangible Personal Property, Tenant shall replace such
property with replacements of the same type and quality as initially in
place, which such property will be owned by Tenant except to the extent
acquired with funds from the Capital Replacement Fund ("Tenant's Personal
Property"). Upon the expiration or sooner termination of this Lease, the
Tenant's Personal Property shall transfer to Landlord without requirement of
any bill of sale or assignment; provided Landlord, at its election, may
require Tenant to execute such documentation as Landlord may require to
evidence such transfer. Tenant shall not remove any Tangible Personal
Property from the Property upon termination of the Lease. If any of such
Tangible Personal Property is stored away from the Property, Tenant will
provide Landlord with proper access to the storage facility.
8.3 TENANT'S OBLIGATIONS. Tenant shall provide and maintain, or
cause to be provided and maintained, during the entire term of the Lease, all
Tangible Personal Property, as well as merchandise for sale to the public, and
food and beverage, as shall be necessary in order to operate the Property in
compliance with (a) all applicable Legal Requirements, (b) customary practices
in the golf industry, (c) past practices of the Transferor, and (d) such other
reasonable requirements imposed by Landlord from time to time.
8.4 LANDLORD'S WAIVERS. Any lessor of Tenant's Personal Property
may, upon notice to Landlord and during reasonable hours, enter the Property and
take possession of any of Tenant's Personal Property without liability for
trespass or conversion upon a default by Tenant, provided that such lessor
provide Landlord with the opportunity to cure the defaults of Tenant on terms
and conditions satisfactory to such lessor and Landlord.
ARTICLE 9
USE OF PROPERTY
9.1 USE. After the Commencement Date and during the Term, Tenant
shall use or cause to be used the Property and the improvements thereon for its
Primary Intended Use. Tenant shall not use the Property or any portion thereof
for any other use without the prior written consent of Landlord, in Landlord's
absolute discretion. No use shall be made or permitted to be made of the
Property, and no acts shall be done, which will cause the cancellation of any
insurance policy covering the Property or any part thereof, nor shall Tenant
sell or otherwise provide to patrons, or permit to be kept, used or sold in or
about the Property any article which may be prohibited by law or by the standard
form of fire insurance policies, or any other insurance policies required to be
carried hereunder, or fire underwriters regulations. Tenant shall, at its sole
cost, comply with all of the requirements pertaining to the Property or other
improvements
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of any insurance board, association, organization or company necessary for
the maintenance of insurance, as herein provided, covering the Property and
Tenant's Personal Property.
9.2 SPECIFIC PROHIBITED USES. Tenant shall not use or occupy or
permit the Property to be used or occupied, nor do or permit anything to be done
in or on the Property, in a manner which would (i) violate or fail to comply
with any law, rule or regulation or Legal Requirement, (ii) subject to Article
12, cause structural injury to any of the Improvements or (iii) constitute a
public or private nuisance or waste. Tenant shall not allow any Hazardous
Material to be located in, on or under the Property, or any adjacent property,
or incorporated in the Property or any improvements thereon except in compliance
with applicable law (including any Environmental Laws). Tenant shall not allow
the Property to be used as a landfill or a waste disposal site, or a
manufacturing, distribution or disposal facility for any Hazardous Materials.
Tenant shall neither suffer nor permit the Property or any portion thereof,
including Tenant's Personal Property, to be used in such a manner as (i) might
reasonably tend to impair Landlord's title thereto or to any portion thereof, or
(ii) may reasonably make possible a claim or claims of adverse usage or adverse
possession by the public, as such, or of implied dedication of the Property or
any portion thereof, or (iii) is in material violation of any applicable
Environmental Law.
9.3 MEMBERSHIP SALES. Tenant shall not sell and/or classify or
reclassify memberships, or set initiation fees, dues and other charges or
materially increase or decrease the number of memberships available at the
Property, except as follows:
(a) in accordance with Transferor's past practice, as reasonably
approved by Landlord, or
(b) membership plans and fees proposed by Xxxxxx and approved by
Xxxxxxxx, in Landlord's reasonable discretion.
9.4 LANDLORD TO GRANT EASEMENTS, ETC. Landlord shall, from time to
time so long as no Event of Default has occurred and is continuing, at the
request of Tenant and at Tenant's cost and expense (but subject to the approval
of Landlord, which approval shall not be unreasonably withheld or delayed): (i)
grant easements and other rights in the nature of easements; (ii) release
existing easements or other rights in the nature of easements which are for the
benefit of the Property; (iii) dedicate or transfer unimproved portions of the
Property for road, highway or other public purposes; (iv) execute petitions to
have the Property annexed to any municipal corporation or utility district; (v)
execute amendments to any covenants and restrictions affecting the Property; and
(vi) execute and deliver to any person any instrument appropriate to confirm or
effect such grants, releases, dedications and transfers (to the extent
23
of its interest in the Property), but only upon delivery to Landlord of an
Officer's Certificate (which Officer's Certificate, if contested by Landlord,
shall not be binding on Landlord) stating that such grant, release,
dedication, transfer, petition or amendment is not detrimental to the proper
conduct of the business of Tenant on the Property and does not reduce its
value or usefulness for the Primary Intended Use. Landlord shall not grant,
release, dedicate or execute any of the foregoing items in this Section 9.4
without obtaining Tenant's approval, which approval shall not be unreasonably
withheld or delayed.
9.5 TENANT'S ADDITIONAL COVENANTS. Tenant shall (a) join the
Advisory Association and cooperate in the activities of such association; (b) at
its election, engage in reasonable cross-marketing endeavors with the members of
the Advisory Association; and (c) at its election, provide signage on the
Property which references that the Property is owned by Landlord, which signage
may include an appropriate logo selected by Landlord. In addition, it is the
intent of the parties that Tenant be a single-purpose entity with no business
operations except for those related solely to the operation of the Property for
its Primary Intended Use and other property of Landlord which may be leased to
Tenant. Tenant shall, therefore, not engage in or undertake any activities
other than those respecting the operation of the Property for its Primary
Intended Use, including leasing, managing, and operating golf courses in
accordance with this Lease.
9.6 VALUATION OF REMAINDER INTEREST IN LEASE. Tenant hereby
represents that, at the end of the Term, including all Extended Terms, it
expects that the Land and each of the Improvements will have a fair market value
(determined without regard to any increase or decrease for inflation or
deflation during the Term) equal to at least twenty percent (20%) of the fair
market value of the Land and each of the Improvements at the Commencement Date.
Tenant further represents that, at the end of the Term, including all Extended
Terms, it expects that the Land and each of the Improvements will have a
remaining useful life equal to at least twenty percent (20%) of its expected
useful life at the Commencement Date.
ARTICLE 10
HAZARDOUS MATERIALS
Tenant hereby represents, warrants, and covenants to Landlord as
follows:
10.1 OPERATIONS. Except as set forth in the Agreement, the Property
is presently operated in compliance in all material respects with all
Environmental Laws.
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10.2 REMEDIATION. Except as set forth in the Agreement, and to the
best knowledge of Tenant, there are no Environmental Laws requiring any material
remediation, cleanup, repairs or construction (other than normal maintenance)
with respect to the Property.
10.3 VIOLATIONS; ORDERS. Except as set forth in the Agreement, and to
the best knowledge of Tenant, (a) no notices of any violation or alleged
violation of any Environmental Laws relating to the Property or its uses have
been received by either Tenant, or, to the best knowledge of Tenant, by any
prior owner, operator or occupant of the Property, and (b) there are no writs,
injunctions, decrees, orders or judgments outstanding, or any actions, suits,
claims, proceedings or investigations pending or threatened, relating to the
ownership, use, maintenance or operation of the Property.
10.4 PERMITS. Except as set forth in the Agreement, all material
permits and licenses required under any Environmental Laws in respect of the
operations of the Property have been obtained or are in the process of being
obtained, and Tenant shall be in compliance, in all material respects, with the
terms and conditions of such permits and licenses.
10.5 REPORTS. All material reports of environmental surveys, audits,
investigations and assessments relating to the Property in the possession or
control of Tenant, Transferor or their Affiliates are set forth or described in
the Agreement.
10.6 REMEDIATION. If Tenant becomes aware of the presence of any
Hazardous Material in a quantity sufficient to require remediation or reporting
under any Environmental Law in, on or under the Property or if Tenant, Landlord,
or the Property becomes subject to any order of any federal, state or local
agency to investigate, remove, remediate, repair, close, detoxify, decontaminate
or otherwise clean up the Property, Tenant shall, at its sole expense, but
subject to the last sentence of Section 10.7, carry out and complete any
required investigation, removal, remediation, repair, closure, detoxification,
decontamination or other cleanup of the Property. If Tenant fails to implement
and diligently pursue any such repair, closure, detoxification, decontamination
or other cleanup of the Property in a timely manner, Landlord shall have the
right, but not the obligation, to carry out such action and to recover its costs
and expenses therefor from Tenant as Additional Charges.
10.7 TENANT'S INDEMNIFICATION OF LANDLORD. Tenant shall pay, protect,
indemnify, save, hold harmless and defend Landlord, the Company, Affiliates of
the Company and Landlord (including, without limitation, their respective
officers, directors and controlling persons), and any Facility Mortgagee from
and against all liabilities, obligations, claims, damages
25
(including punitive or consequential damages), penalties, causes of action,
demands, judgments, costs and expenses (including reasonable attorneys' fees
and expenses), to the extent permitted by law, imposed upon or incurred by or
asserted against Landlord or the Property by reason of any Environmental Law
(irrespective of whether there has occurred any violation of any
Environmental Law) in respect of the Property howsoever arising, without
regard to fault on the part of Tenant, including (a) liability for response
costs and for costs of removal and remedial action incurred by the United
States Government, any state or local governmental unit to any other Person,
or damages from injury to or destruction or loss of natural resources,
including the reasonable costs of assessing such injury, destruction or loss,
incurred pursuant to any Environmental Law, (b) liability for costs and
expenses of abatement, investigation, removal, remediation, correction or
clean-up, fines, damages, response costs or penalties which arise from the
provisions of any Environmental Law, (c) liability for personal injury or
property damage arising under any statutory or common-law tort theory,
including damages assessed for the maintenance of a public or private
nuisance or for carrying on of a dangerous activity, or (d) by reason of a
breach of a representation or warranty in Sections 10.1 through 10.5 of this
Lease. Notwithstanding the foregoing or any other provision of this Lease
(including, without limitation, Section 7.2, Section 10.9 and Article 23),
Tenant shall not be liable, or otherwise be required to indemnify Landlord or
the Company or any Affiliates of the Company for (i) any matters or events
that arise after the Commencement Date that are not caused by any act or
omission on the part of Tenant, or (ii) any matters or events that arise
after the Commencement Date that are directly caused by a breach by Landlord
of the terms of this Lease.
10.8 SURVIVAL OF INDEMNIFICATION OBLIGATIONS. Tenant's obligations
and/or liability under this Article 10 arising during the Term hereof shall
survive any termination of this Lease.
10.9 ENVIRONMENTAL VIOLATIONS AT EXPIRATION OR TERMINATION OF LEASE.
Notwithstanding any other provision of this Lease (except the last sentence of
Section 10.7), if, at a time when the Term would otherwise terminate or expire,
a violation of any Environmental Law has been asserted by Landlord and has not
been resolved in a manner reasonably satisfactory to Landlord, or has been
acknowledged by Tenant to exist or has been found to exist at the Property or
has been asserted by any governmental authority and Tenant's failure to have
completed all action required to correct, xxxxx or remediate such a violation of
any Environmental Law materially impairs the leasability of the Property upon
the expiration of the Term, then, at the option of Landlord, the Term shall be
automatically extended with respect to the Property beyond the date of
termination or expiration and this Lease shall remain in full force and effect
under the same terms and conditions beyond such date with respect
26
to the Property until the earlier to occur of (i) the completion of all
remedial action in accordance with applicable Environmental Laws or (ii) 12
months beyond such expiration or termination date; PROVIDED, that Tenant may,
upon any such extension of the Term, terminate the Term by paying to Landlord
such amount as is necessary in the reasonable judgment of Landlord to complete
or perform such remedial action.
ARTICLE 11
MAINTENANCE AND REPAIR
11.1 TENANT'S OBLIGATIONS. Tenant, at its expense, will operate and
maintain the Property in good order, repair and appearance (whether or not the
need for such repairs occurs as a result of Tenant's use, any prior use, the
elements or the age of the Property or any portion thereof) and in accordance
with any applicable Legal Requirements, and, except as otherwise provided in
Article 15, with reasonable promptness, make all necessary and appropriate
repairs thereto of every kind and nature, whether interior or exterior,
structural or non-structural, ordinary or extraordinary, foreseen or unforeseen
or arising by reason of a condition existing prior to the Commencement Date
(concealed or otherwise). Tenant shall operate and maintain the Property in
accordance with the operation and maintenance practices of the Property at the
Commencement Date and otherwise in a manner comparable to other comparable golf
course facilities in the vicinity of the Property. Landlord may consult with
the Advisory Association from time to time with respect to Tenant's compliance
with its maintenance and operation obligations under this Section 11.1, and
Landlord and representatives of Advisory Association shall have the right from
time to time to enter the Property for the purpose of inspecting the Property.
If Landlord, in consultation with the Advisory Association, determines that
Tenant has failed to comply with its maintenance and operation obligations under
this Section 11.1, Landlord shall provide written notice to Tenant setting forth
a list of remedial work and/or steps to be performed by Xxxxxx. Tenant shall
promptly and diligently perform such remedial work and/or steps as recommended
by Landlord, provided if Tenant objects to one or more of the remedial
obligations proposed by Xxxxxxxx, then the matter shall be submitted to the
dispute resolution procedure set forth in Section 12.7. Tenant will not take or
omit to take any action the taking or omission of which could reasonably be
expected to impair the value or the usefulness of the Property or any part
thereof for its Primary Intended Use.
11.2 WAIVER OF STATUTORY OBLIGATIONS. Landlord shall not under any
circumstances be required to build or rebuild any improvements on the Property,
or to make any repairs, replacements, alterations, restorations or renewals of
any nature or description to the Property, whether ordinary or extraordinary,
structural or non-structural, foreseen or unforeseen, or to make any expenditure
whatsoever with respect
27
thereto, in connection with this Lease, or to maintain the Property in any way.
Tenant hereby waives, to the extent permitted by law, the right to make
repairs at the expense of Landlord pursuant to any law in effect at the time of
the execution of this Lease or hereafter enacted.
11.3 MECHANIC'S LIENS. Nothing contained in this Lease and no action
or inaction by Landlord shall be construed as (i) constituting the consent or
request of Landlord expressed or implied, to any contractor, subcontractor,
laborer, materialman or vendor to or for the performance of any labor or
services or the furnishing of any materials or other property for the
construction, alteration, addition, repair or demolition of or to the Property
or any part thereof; or (ii) giving Tenant any right, power or permission to
contract for or permit the performance of any labor or services or the
furnishing of any materials or other property, in either case, in such fashion
as would permit the making of any claim against Landlord in respect thereof or
to make any agreement that may create, or in any way be the basis for, any
right, title, interest, lien, claim or other encumbrance upon the estate of
Landlord in the Property, or any portion thereof.
11.4 SURRENDER OF PROPERTY. Unless the Lease shall have been
terminated pursuant to the provisions of Article 15, Tenant shall, upon the
expiration or prior termination of the Term, vacate and surrender the Property
to Landlord in the condition in which the Property was originally received from
Landlord, except as repaired, rebuilt, restored, altered or added to as
permitted or required by the provisions of this Lease and except for ordinary
wear and tear (subject to the obligation of Tenant to maintain the Property in
good order and repair during the entire Term of the Lease).
ARTICLE 12
TENANT IMPROVEMENTS; SUBMITTAL OF BUDGETS; FINANCIAL STATEMENTS
12.1 TENANT'S RIGHT TO CONSTRUCT. Subject to the prior written
approval of Landlord in its reasonable discretion, during the Lease Term Tenant
may make alterations, additions, changes and/or improvements to the Property
(individually, a "Tenant Improvement," and collectively, "Tenant
Improvements"). Any such Tenant Improvement shall be made at Tenant's sole
expense and shall become the property of Landlord upon termination of this
Lease. Unless made on an emergency basis to prevent injury to Person or
property, Tenant will submit plans and specifications for any Tenant
Improvements, in the form necessary for any required building permits, to
Landlord for Landlord's prior written approval, such approval not to be
unreasonably withheld or delayed.
Upon approval by Landlord:
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(a) Tenant shall diligently seek all governmental approvals and any
other necessary private approvals (E.G., ground lessor, mortgagee, etc.)
relating to the construction of any Tenant Improvement; and
(b) once Tenant begins the construction of any Tenant Improvement,
Tenant shall diligently prosecute any such Tenant Improvement to completion
in accordance with applicable insurance requirements and the laws, rules
and regulations of all governmental bodies or agencies having jurisdiction
over the Property; and
(c) Tenant shall not suffer or permit any mechanics' liens or any
other claims or demands arising from the work of construction of any Tenant
Improvement to be enforced against the Property or any part thereof, and
Xxxxxx agrees to hold Landlord and the Property free and harmless from all
liability from any such liens, claims or demands, together with all costs
and expenses in connection therewith; and
(d) all work shall be performed in a good and workmanlike manner.
12.2 SCOPE OF RIGHT. Subject to Section 12.1, at Tenant's cost and
expense, Tenant shall have the right to:
(a) seek any governmental approvals, including building permits,
licenses, conditional use permits and any certificates of need that Tenant
requires to construct any Tenant Improvement;
(b) erect upon the Property such Tenant Improvements as Tenant deems
desirable; and
(c) engage in any other lawful activities that Tenant determines are
necessary or desirable for the development of the Property in accordance
with its Primary Intended Use.
12.3 COOPERATION OF LANDLORD. Landlord shall cooperate with Tenant
and take such actions, including the execution and delivery to Tenant of any
applications or other documents, reasonably requested by Xxxxxx in order to
obtain any governmental approvals sought by Tenant to construct any Tenant
Improvement approved by Landlord in accordance with Section 12.1 of this Lease
within ten (10) Business Days following the later of (a) the date Landlord
receives Tenant's request, or (b) the date of delivery of any such application
or document to Landlord, so long as the taking of such action, including the
execution of said applications or documents, shall be without cost to Landlord
(or if there is a cost to Landlord, such cost shall be reimbursed by Xxxxxx),
and will not cause Landlord to be in violation of any law, ordinance or
regulation.
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Landlord shall have the right at any time and from time to time to
post and maintain upon the Property such notices as may be necessary to protect
Landlord's interest from mechanics' liens, materialmen's liens or liens of a
similar nature.
12.4 CAPITAL REPLACEMENT FUND. Solely from the payment of Xxxx
received hereunder, Landlord shall be obligated to accrue the Capital
Replacement Reserve. The Capital Replacement Reserve shall accrue quarterly
based on the Officer's Certificate and shall be placed in the Capital
Replacement Fund. Amounts in the Capital Replacement Fund from time to time
shall be deemed to accrue interest at a money market rate as reasonably
determined by Landlord and such interest shall be credited to the Capital
Replacement Fund. Upon the written request by Tenant to Landlord stating the
specific use to be made and subject to the reasonable approval of Landlord, the
Capital Replacement Fund shall be made available to Tenant for Capital
Expenditures; PROVIDED, HOWEVER, no portion of amounts credited to the Capital
Replacement Fund shall be used to purchase property to the extent that doing so
would cause Landlord to recognize income other than "rents from real property"
as defined in Section 856(d) of the Code. Tenant shall have no rights with
respect to any amounts in the Capital Replacement Fund except as provided
herein. Subject to Landlord's approval of the Capital Expenditures, Landlord
shall make available to Tenant amounts from the Capital Replacement Fund under
the following conditions:
(a) No Event of Default exists and is continuing;
(b) Xxxxxx presents paid qualifying receipts for reimbursement, or
qualifying invoices for direct payment to the vendor;
(c) Such expenditures are included in the Capital Budget submitted to
and approved by Landlord in accordance with Section 12.7; and
(d) If from time to time Tenant shall expend monies beyond the
balance in the Capital Replacement Fund, then Tenant shall be afforded the
opportunity to present such paid invoices for reimbursement at later dates
when the Tenant's reserve balance shall be replenished to a level that can
support such expenditure.
12.5 RIGHTS IN TENANT IMPROVEMENTS. All Tenant Improvements shall be
the property of Landlord. However, Tenant shall be entitled to all federal and
state income tax benefits associated with any Tenant Improvement during the
Lease Term exclusive of any Capital Expenditures paid for from amounts credited
to the Capital Replacement Fund, as to which Landlord shall be entitled all
income tax benefits.
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12.6 LANDLORD'S RIGHT TO AUDIT CALCULATION OF GROSS GOLF REVENUE.
Landlord, at its own expense except as provided hereinbelow, shall have the
right from time to time directly or though its accountants to audit the
information set forth in the Officer's Certificate referred to in Section 4.4
and in connection with such audits to examine Xxxxxx's book and records with
respect thereto (including supporting data, sales tax returns and Xxxxxx's work
papers). If any such audit discloses a deficiency in the payment of Percentage
Rent, Tenant shall forthwith pay to Landlord the amount of the deficiency as
finally agreed or determined, together with interest at the Overdue Rate from
the date when said payment should have been made to the date of payment thereof;
PROVIDED, HOWEVER, that as to any audit that is commenced more than twelve (12)
months after the date Gross Golf Revenue for any Fiscal Year is reported by
Tenant to Landlord in the Officer's Certificate, the deficiency, if any, with
respect to such Gross Golf Revenue shall bear interest as permitted herein only
from the date such determination of deficiency is made unless such deficiency is
the result of gross negligence or willful misconduct on the part of Tenant. If
any such audit discloses that the Gross Golf Revenue actually received by Tenant
for any Fiscal Year exceeds the Gross Golf Revenue reported by Tenant in the
Officer's Certificate by more than two percent (2%), then Tenant shall pay all
reasonable costs of such audit and examination; provided Tenant shall have the
right to submit the audit determination to arbitration in accordance with the
procedures set forth in Article 28. Landlord shall also have the right to
review and audit from time to time Xxxxxx's business operations including all
books, records and financial statements of Tenant. Tenant shall promptly
provide to Landlord copies of all such books, records, financial statements or
any other documentation of Xxxxxx's business operations reasonably requested by
Landlord.
12.7 ANNUAL BUDGET. Not later than forty-five (45) days prior to the
commencement of each Fiscal Year, Tenant shall prepare and submit to Landlord an
operating budget (the "Operating Budget") and a capital budget (the "Capital
Budget") prepared in accordance with the requirements of this Section 12.7. The
Operating Budget and the Capital Budget (together, the "Annual Budget") shall be
prepared in a form approved by Landlord for use throughout the Lease Term and
show by quarter and for the year as a whole the following:
(a) Tenant's reasonable estimate of Gross Golf Revenue (including
membership dues, daily use fees and other sources of Gross Golf Revenue) and
other revenue for the forthcoming Fiscal Year itemized on schedules on a
quarterly basis as approved by Landlord and Tenant, together with assumptions,
in narrative form, forming the basis of such schedules.
(b) An estimate of any amounts Landlord will be requested to provide
for Capital Expenditures during the next
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four Fiscal Years, subject to the limitations set forth in Section 12.4.
(c) A cash flow projection.
(d) A narrative description of any anticipated significant events,
including, if requested by Landlord, a narrative description of any category of
operating expenses that decrease or increase by five percent (5%) or more from
the prior year's expenses.
(e) Tenant's reasonable estimate for each Fiscal Quarter of the
Percentage Rent to be paid for such quarter.
Landlord shall have thirty (30) days after the date on which it
receives the Annual Budget to review, approve or disapprove the Annual Budget.
If the parties are not able to reach agreement on the Annual Budget for any
Fiscal Year during Landlord's thirty (30) day review period, the parties shall
attempt in good faith during the subsequent thirty (30) day period to resolve
any disputes, which attempts shall include, if requested by either party, at
least one (1) meeting of executive-level officers of Landlord and Tenant and one
(1) meeting with the directors of the Advisory Association. In the event the
parties are still not able to reach agreement on the Annual Budget for any
particular Fiscal Year after complying with the foregoing requirements of this
Section 12.7, the parties shall adopt such portions of the Operating Budget and
the Capital Budget as they may have agreed upon, and any matters not agreed upon
shall be referred to a dispute resolution committee composed of three (3)
members of the Advisory Association unaffiliated with Tenant and two (2) members
of the board of directors of the Company. Such committee shall be responsible
for resolving any such disagreement and the parties agree that the determination
of such dispute resolution committee shall be binding on the parties. Pending
the results of such resolution or the earlier agreement of the parties, (i) if
the Operating Budget has not been agreed upon, the Property will be operated in
a manner consistent with the prior year's Operating Budget until a new Operating
Budget is adopted, and (ii) if the Capital Budget has not been agreed upon, no
Capital Expenditures shall be made unless the same are set forth in a previously
approved Capital Budget or are specifically required by Landlord or are
otherwise required to comply with Legal Requirements or Insurance Requirements.
Tenant shall operate the Property in a manner reasonably consistent with the
Annual Budget.
12.8 FINANCIAL STATEMENTS.
(a) Tenant shall utilize, or cause to be utilized, an accounting
system for the Property in accordance with its usual and customary practice, and
in accordance with GAAP, that will accurately record all data necessary to
compute Percentage Rent,
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and Xxxxxx shall retain for at least five (5) years after the expiration of
each Fiscal Year, reasonably adequate records conforming to such accounting
system showing all data necessary to compute Percentage Rent. The books of
account and all other records relating to or reflecting the operation of the
Property shall be kept either at the Property or at Tenant's offices in
__________________, ____________. Such books and records shall be available to
Landlord and its representatives for examination, audit, inspection and
transcription.
(b) Tenant shall furnish to Landlord within thirty (30) days of the
end of each Fiscal Quarter (i) unaudited financial statements for the Fiscal
Quarter and year to date, together with the same information for the comparable
prior Fiscal Quarter and year to date, including the following: results of
operations, a balance sheet, statements of cash flows and statement of changes
in owner's equity. If Landlord requests, Tenant shall provide reviewed
financial statements for such Fiscal Quarter; provided, however, such review
(except as provided for in clause (ii)) shall be at Landlord's expense. Each
quarterly report shall also include a narrative explaining any deviation in any
major revenue or expense category or operating expenses (by category) of more
than ten percent (10%) from the amounts set forth on the Annual Budget, together
with, if appropriate a revised Annual Budget, which budget shall be subject to
Landlord's review and approval as provided in Section 12.7. Each quarterly
report shall also forecast any projected Percentage Rent payable for the
following Fiscal Quarter.
(c) For each Fiscal Year, Tenant shall deliver to Landlord within
sixty (60) days of the end of such Fiscal Year financial statements prepared in
accordance with GAAP and audited by an independent accounting firm approved by
Landlord, in its reasonable discretion. Notwithstanding the foregoing, Landlord
shall only require audited financial statements of Gross Golf Revenue if
Tenant's financial statements are not required to be separately stated by the
Securities and Exchange Commission.
(d) If requested by Landlord, Tenant will make available to Landlord
and the Company and their respective lenders, underwriters, counsel, accountants
and advisors such additional information and financial statements with respect
to Tenant and the Property as Landlord may reasonably request without any
additional cost to Tenant, and Xxxxxx agrees to reasonably cooperate with
Landlord and the Company in effecting public or private debt or equity
financings by the Landlord or the Company, without any additional cost to
Tenant, modifications to this Lease or the requirement of additional collateral
from Tenant.
ARTICLE 13
LIENS, ENCROACHMENTS AND OTHER TITLE MATTERS
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13.1 LIENS. Subject to the provisions of Article 14 relating to
permitted contests, Tenant will not directly or indirectly create or allow to
remain, and will promptly discharge at its expense any lien, encumbrance,
attachment, title retention agreement or claim upon the Property or any
attachment, levy, claim or encumbrance emanating from Tenant's actions or
negligence, not including, however:
(a) this Lease;
(b) the matters, if any, that existed as of the Commencement Date, as
set forth on the title policy received by Xxxxxxxx;
(c) restrictions, liens and other encumbrances which are consented to
in writing by Landlord, or any easements granted pursuant to the provisions
of Section 9.4 of this Lease;
(d) liens for those taxes of Landlord which Xxxxxx is not required to
pay hereunder;
(e) subleases or licenses permitted by Article 23;
(f) liens for Impositions or for sums resulting from noncompliance
with Legal Requirements so long as (1) the same are not yet payable or are
payable without the addition of any fine or penalty or (2) such liens are
in the process of being contested as permitted by Article 14;
(g) liens of mechanics, laborers, materialmen, suppliers or vendors
for sums either disputed (PROVIDED THAT such liens are in the process of
being contested as permitted by Article 14) or not yet due; and
(h) any liens which are the responsibility of Landlord pursuant to
the provisions of Article 25.
13.2 ENCROACHMENTS AND OTHER TITLE MATTERS. Subject to Article 21 and
excepting any matters granted or created by Landlord after the Commencement
Date, if any of the Improvements shall, at any time, encroach upon any property,
street or right-of-way adjacent to the Property, or shall violate the agreements
or conditions contained in any lawful restrictive covenant or other agreement
affecting the Property, or any part thereof, or shall impair the rights of
others under any easement or right-of-way to which the Property is subject, or
the use of the Property is impaired, limited or interfered with by reason of the
exercise of the right of surface entry or any other rights under a lease or
reservation of any oil, gas, water or other minerals, then promptly upon request
of Landlord or at the behest of any person affected by any such encroachment,
violation or impairment, Tenant, at its sole cost and expense (subject to its
right to
34
contest the existence of any such encroachment, violation or impairment), shall
protect, indemnify, save harmless and defend Landlord, the Company and
Affiliates of the Company from and against all losses, liabilities,
obligations, claims, damages, penalties, causes of action, costs and expenses
(including reasonable attorneys' fees and expenses) based on or arising by
reason of any such encroachment, violation or impairment and in such case, in
the event of an adverse final determination, either (i) obtain valid and
effective waivers or settlements of all claims, liabilities and damages
resulting from each such encroachment, violation or impairment, whether the
same shall affect Landlord or Tenant; or (ii) make such changes in the
Improvements, and take such other actions, as Tenant in the good faith exercise
of its judgment deems reasonably practicable, to remove such encroachment, and
to end such violation or impairment, including, if necessary, the alteration of
any of the Improvements, and in any event take all such actions as may be
necessary in order to be able to continue the operation of the Improvements for
the Primary Intended Use substantially in the manner and to the extent the
Improvements were operated prior to the assertion of such violation or
encroachment. Tenant's obligation under this Section 13.2 shall be in addition
to and shall in no way discharge or diminish any obligation of any insurer
under any policy of title or other insurance and Tenant shall be entitled to a
credit for any sums recovered by Landlord under any such policy of title or
other insurance.
ARTICLE 14
PERMITTED CONTESTS
14.1 AUTHORIZATION. Tenant, on its own or on Landlord's behalf (or in
Landlord's name) but at Tenant's expense, may contest, by appropriate legal
proceedings conducted in good faith and with due diligence, the amount, validity
or application, in whole or in part, of any Imposition or any Legal Requirement
or Insurance Requirement, or any lien, attachment, levy, encumbrance, charge or
claim not otherwise permitted by Section 13.1; provided, however, that nothing
in this Section 14.1 shall limit the right of Landlord to contest the amount,
validity or application, in whole or in part, of any Imposition, Legal
Requirement, Insurance Requirement, or any lien, attachment, levy, encumbrance,
charge or claim with respect to the Property (and Tenant shall reasonably
cooperate with Landlord with respect to such contest), and, FURTHER PROVIDED
THAT:
(a) in the case of an unpaid Imposition, lien, attachment, levy,
encumbrance, charge or claim, the commencement and continuation of such
proceedings shall suspend the collection thereof from Landlord and from the
Property, and neither the Property nor any Rent therefrom nor any part
thereof or interest therein would be in any danger of being sold,
forfeited, attached or lost pending the outcome of such proceedings;
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(b) in the case of a Legal Requirement, Landlord would not be subject
to criminal or material civil liability for failure to comply therewith
pending the outcome of such proceedings. Nothing in this Section 14.1(b),
however, shall permit Tenant to delay compliance with any requirement of an
Environmental Law to the extent such non-compliance poses an immediate
threat of injury to any Person or to the public health or safety or of
material damage to any real or personal property;
(c) in the case of a Legal Requirement and/or an Imposition, lien,
encumbrance or charge, Tenant shall give such reasonable security, if any,
as may be demanded by Landlord to insure ultimate payment of the same and
to prevent any sale or forfeiture of the affected Property or the Rent by
reason of such non-payment or noncompliance, PROVIDED, HOWEVER, the
provisions of this Article 14 shall not be construed to permit Tenant to
contest the payment of Rent (except as to contests concerning the method of
computation or the basis of levy of any Imposition or the basis for the
assertion of any other claim) or any other sums payable by Xxxxxx to
Landlord hereunder;
(d) no such contest shall interfere in any material respect with the
use or occupancy of the Property;
(e) in the case of an Insurance Requirement, the coverage required by
Article 15 shall be maintained; and
(f) if such contest be finally resolved against Landlord or Tenant,
Tenant shall, as Additional Charges due hereunder, promptly pay the amount
required to be paid, together with all interest and penalties accrued
thereon, or comply with the applicable Legal Requirement or Insurance
Requirement.
14.2 INDEMNIFICATION OF LANDLORD. Landlord, at Tenant's expense,
shall execute and deliver to Tenant such authorizations and other documents as
may reasonably be required in any such contest, and, if reasonably requested by
Tenant or if Landlord so desires, Landlord shall join as a party therein.
Tenant shall indemnify and save Landlord harmless against any liability, cost or
expense of any kind that may be imposed upon Landlord in connection with any
such contest and any loss resulting therefrom.
ARTICLE 15
INSURANCE
15.1 GENERAL INSURANCE REQUIREMENTS. During the Lease Term, Tenant
shall at all times keep the Property, and all
36
property located in or on the Property, including all Tenant's Personal
Property and any Tenant Improvements, insured with the kinds and amounts of
insurance described below. This insurance shall be written by companies
authorized to do insurance business in the State, and shall otherwise meet the
requirements set forth in Section 15.5 of this Lease. The policies must name
Landlord as an additional insured or loss payee, as applicable. Losses shall
be payable to Landlord and/or Tenant as provided in this Article 15. In
addition, the policies shall name as a loss payee any Facility Mortgagee by way
of a standard form of mortgagee's loss payable endorsement. Any loss
adjustment shall require the written consent of Landlord, Tenant, and each
Facility Mortgagee, if any. Evidence of insurance shall be deposited with
Landlord and, if requested, with any Facility Mortgagee(s). The policies on
the Property, including the Improvements, Fixtures, Tangible and Intangible
Personal Property and any Tenant Improvements, shall insure against the
following risks:
(a) ALL RISK. Loss or damage by all risks or perils including, but
not limited to, fire, vandalism, malicious mischief and extended coverages,
including sprinkler leakage, in an amount not less than 100% of the then
Full Replacement Cost thereof covering all structures built on the Property
and all Tangible Personal Property; and further provided the Tangible
Personal Property may be insured at its fair market value.
(b) LIABILITY. Claims for personal injury or property damage under a
policy of comprehensive general public liability insurance with amounts not
less than five million dollars ($5,000,000) per occurrence and in the
aggregate.
(c) FLOOD. Flood insurance (when the Property is located in whole or
in material part a designated flood plain area) in an amount similar to the
amount insured by comparable golf course properties in the area.
Notwithstanding the foregoing, Tenant shall not be required to participate
in the National Flood Insurance Program or otherwise obtain flood insurance
to the extent not available at commercially reasonable rates; provided
Tenant shall give Landlord written notice thereof prior to cancelling or
not obtaining any flood insurance. Tenant may opt to insure the structures
only, and not the Land, subject to the approval of Landlord, in Landlord's
reasonable discretion.
(d) WORKER'S COMPENSATION. Adequate worker's compensation insurance
coverage for all Persons employed by Tenant on the Property in accordance
with the requirements of applicable federal, state and local laws. Tenant
shall have the option to self-insure up to five thousand dollars ($5,000)
of the amount of insurance required in the event State law permits such
self-insurance, subject to the
37
approval of Landlord, in Xxxxxxxx's sole and absolute discretion.
15.2 OTHER INSURANCE. Such other insurance on or in connection with
any of the Property as Landlord or any Facility Mortgagee may reasonably
require, which at the time is usual and commonly obtained in connection with
properties similar in type of building size and use to the Property and located
in the geographic area where the Property is located.
15.3 REPLACEMENT COST. In the event either party believes that the
Full Replacement Cost of the insured property has increased or decreased at any
time during the Lease Term, it shall have the right to have such Full
Replacement Cost redetermined by the Impartial Appraiser. The party desiring to
have the Full Replacement Cost so redetermined shall forthwith, on receipt of
such determination by such Impartial Appraiser, give written notice thereof to
the other party hereto. The determination of such Impartial Appraiser shall be
final and binding on the parties hereto, and Tenant shall forthwith increase, or
may decrease, the amount of the insurance carried pursuant to this Section 15.3,
as the case may be, to the amount so determined by the Impartial Appraiser.
Each party shall pay one-half of the fee, if any, of the Impartial Appraiser.
15.4 WAIVER OF SUBROGATION. All insurance policies carried by either
party covering the Property including contents, fire and casualty insurance,
shall expressly waive any right of subrogation on the part of the insurer
against the other party (including any Facility Mortgagee). The parties hereto
agree that their policies will include such waiver clause or endorsement so long
as the same are obtainable without extra cost, and in the event of such an extra
charge the other party, at its election, may pay the same, but shall not be
obligated to do so.
15.5 FORM SATISFACTORY, ETC. All of the policies of insurance
referred to in this Article 15 shall be written in a form reasonably
satisfactory to Landlord and by insurance companies rated not less than XV by
A.M. Best's Insurance Guide. Tenant shall pay all premiums for the policies of
insurance referred to in Sections 15.1 and 15.2 and shall deliver certificates
thereof to Landlord prior to their effective date (and with respect to any
renewal policy, at least ten (10) days prior to the expiration of the existing
policy). In the event Tenant fails to satisfy its obligations under this
Article 15, Landlord shall be entitled, but shall have no obligation, to effect
such insurance and pay the premiums therefore, which premiums shall be repayable
to Landlord upon written demand as Additional Charges. Each insurer issuing
policies pursuant to this Article 15 shall agree, by endorsement on the policy
or policies issued by it, or by independent instrument furnished to Landlord,
that it will give to Landlord thirty (30) days' written
38
notice before the policy or policies in question shall be altered, allowed to
expire or cancelled. Each such policy shall also provide that any loss
otherwise payable thereunder shall be payable notwithstanding (i) any act or
omission of Landlord or Tenant which might, absent such provision, result in
a forfeiture of all or a part of such insurance payment, (ii) the occupation
or use of the Property for purposes more hazardous than those permitted by
the provisions of such policy, (iii) any foreclosure or other action or
proceeding taken by any Facility Mortgagee pursuant to any provision of a
mortgage, note, assignment or other document evidencing or securing a loan
upon the happening of an event of default therein or (iv) any change in title
to or ownership of the Property.
15.6 CHANGE IN LIMITS. In the event that Landlord shall at any time
reasonably determine on the basis of prudent industry practice that the
liability insurance carried by Tenant pursuant to Sections 15.1 and 15.2 is
either excessive or insufficient, the parties shall endeavor to agree on the
proper and reasonable limits for such insurance to be carried; and such
insurance shall thereafter be carried with the limits thus agreed on until
further changed pursuant to the provisions of this Article 15; PROVIDED,
HOWEVER, that the deductibles for such insurance or the amount of such insurance
which is self-retained by Tenant shall be as reasonably determined by Tenant so
long as Tenant can reasonably demonstrate its ability to satisfy such deductible
or amount of such self-retained insurance.
15.7 BLANKET POLICY. Notwithstanding anything to the contrary
contained in this Article 15, Tenant's obligations to carry the insurance
provided for herein may be brought within the coverage of a so-called blanket
policy or policies of insurance carried and maintained by Tenant; PROVIDED,
HOWEVER, that the coverage afforded Landlord will not be reduced or diminished
or otherwise be different from that which would exist under a separate policy
meeting all other requirements of this Lease by reason of the use of such
blanket policy of insurance, and provided further that the requirements of this
Article 15 are otherwise satisfied. The amount of this total insurance
allocated to each of the Leased Properties, which amount shall be not less than
the amounts required pursuant to Sections 15.1 and 15.2, shall be specified
either (i) in each such "blanket" or umbrella policy or (ii) in a written
statement, which Tenant shall deliver to Landlord and Facility Mortgagee, from
the insurer thereunder. A certificate of each such "blanket" or umbrella policy
shall promptly be delivered to Landlord and Facility Mortgagee.
15.8 INSURANCE PROCEEDS. All proceeds of insurance payable by reason
of any loss or damage to the Property, or any portion thereof, and insured under
any policy of insurance required by this Article 15 shall (i) if greater than
$100,000, be paid to Landlord and held by Landlord and (ii) if less than
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such amount, be paid to Tenant and held by Tenant. All such proceeds shall
be held in trust and shall be made available for reconstruction or repair, as
the case may be, of any damage to or destruction of the Property, or any
portion thereof.
15.9 DISBURSEMENT OF PROCEEDS. Any proceeds held by Landlord or
Tenant shall be paid out by Landlord or Tenant from time to time for the
reasonable costs of such reconstruction or repair; PROVIDED, HOWEVER, that
Landlord shall disburse proceeds subject to the following requirements:
(a) prior to commencement of restoration, (i) the architects,
contracts, contractors, plans and specifications for the restoration shall
have been approved by Landlord, which approval shall not be unreasonably
withheld or delayed and (ii) appropriate waivers of mechanics' and
materialmen's liens shall have been filed;
(b) Tenant shall have obtained and delivered to Landlord copies of
all necessary governmental and private approvals necessary to complete the
reconstruction or repair, including building permits, licenses, conditional
use permits and certificates of need;
(c) at the time of any disbursement, subject to Article 14, no
mechanics' or materialmen's liens shall have been filed against any of the
Property and remain undischarged, unless a satisfactory bond shall have
been posted in accordance with the laws of the State;
(d) disbursements shall be made from time to time in an amount not
exceeding the cost of the work completed since the last disbursement, upon
receipt of (i) satisfactory evidence of the stage of completion, the
estimated total cost of completion and performance of the work to date in a
good and workmanlike manner in accordance with the contracts, plans and
specifications, (ii) waivers of liens, (iii) a satisfactory bring down of
title insurance and (iv) other evidence of cost and payment so that
Landlord and Facility Mortgagee can verify that the amounts disbursed from
time to time are represented by work that is completed, in place and free
and clear of mechanics' and materialmen's lien claims;
(e) each request for disbursement shall be accompanied by a
certificate of Tenant, signed by a senior member or officer of Tenant,
describing the work for which payment is requested, stating the cost
incurred in connection therewith, stating that Xxxxxx has not previously
received payment for such work and, upon completion of the work, also
stating that the work has been fully completed and complies with the
applicable requirements of this Lease;
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(f) to the extent actually held by Landlord and not a Facility
Mortgagee, (1) the proceeds shall be held in a separate account and shall
not be commingled with Landlord's other funds, and (2) interest shall
accrue on funds so held at the money market rate of interest and such
interest shall constitute part of the proceeds; and
(g) such other reasonable conditions as Landlord or Facility
Mortgagee may reasonably impose, including, without limitation, payment by
Tenant of reasonable costs of administration imposed by or on behalf of
Facility Mortgagee should the proceeds be held by Facility Mortgagee.
15.10 EXCESS PROCEEDS, DEFICIENCY OF PROCEEDS. Any excess
proceeds of insurance remaining after the completion of the restoration or
reconstruction of the Property (or in the event neither Landlord nor Tenant is
required to or elects to repair and restore) shall be paid to Landlord and
deposited in the Capital Replacement Fund except for any portion specifically
applicable to Tenant's merchandise and inventory. All salvage resulting from
any risk covered by insurance shall belong to Landlord.
If the costs of restoration or reconstruction exceeds the amount of
proceeds received by Landlord or Tenant from insurance, Tenant shall pay for
such excess cost of restoration or reconstruction, except that Tenant may
petition Landlord for withdrawal from the Capital Replacement Fund to cover some
or all of such excess, subject to the approval of Landlord in Landlord's sole
and absolute discretion.
15.11 RECONSTRUCTION COVERED BY INSURANCE.
(a) DESTRUCTION RENDERING PROPERTY UNSUITABLE FOR ITS PRIMARY
USE. If during the term the Property is totally or partially destroyed
from a risk covered by the insurance described in Article 15 and the
Property thereby is rendered Unsuitable For Its Primary Intended Use as
reasonably determined by Landlord, Tenant shall, at its election, either
(i) diligently restore the Property to substantially the same condition as
existed immediately before the damage or destruction, or (ii) terminate the
Lease as provided in Section 21.2 and assign all of its rights to any
insurance proceeds required under this Lease to Landlord.
(b) DESTRUCTION NOT RENDERING PROPERTY UNSUITABLE FOR ITS
PRIMARY USE. If during the term, the Property is totally or partially
destroyed from a risk covered by the insurance described in Article 15, but
the Real Property is not thereby rendered Unsuitable For Its Primary
Intended Use, Tenant shall diligently restore the Property to substantially
the same condition as existed immediately before the damage or destruction;
PROVIDED, HOWEVER, Tenant
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shall not be required to restore certain Tangible Personal Property and/or
any Tenant Improvements if failure to do so does not adversely affect the
amount of Rent payable hereunder or the Primary Intended Use in
substantially the same manner immediately prior to such damage or
destruction. Such damage or destruction shall not terminate this
Lease; PROVIDED FURTHER, HOWEVER, if Tenant cannot within eighteen (18)
months obtain all necessary governmental approvals, including building
permits, licenses, conditional use permits and any certificates of need,
after diligent efforts to do so in order to be able to perform all required
repair and restoration work and to operate the Property for its Primary
Intended Use in substantially the same manner immediately prior to such
damage or destruction, Tenant may terminate the Lease.
15.12 RECONSTRUCTION NOT COVERED BY INSURANCE. If during the
Term, the Property is totally or materially destroyed from a risk not covered by
the insurance described in Article 15, whether or not such damage or destruction
renders the Property Unsuitable For Its Primary Intended Use, Tenant shall
restore the Property to substantially the same condition as existed immediately
before the damage or destruction. Tenant shall have the right to use proceeds
from the Capital Replacement Fund to perform such work, subject to the
conditions set forth in Section 12.4 hereof.
15.13 NO ABATEMENT OF RENT. This Lease shall remain in full force
and effect and Tenant's obligation to make rental payments and to pay all other
charges required by this Lease shall remain unabated during the period required
for repair and restoration.
15.14 WAIVER. Tenant hereby waives any statutory rights of
termination which may arise by reason of any damage or destruction of the
Property which Landlord or Tenant is obligated to restore or may restore under
any of the provisions of this Lease.
15.15 DAMAGE NEAR END OF TERM. Notwithstanding any other
provision to the contrary in this Article 15, if damage to or destruction of the
Property occurs during the last twenty-four (24) months of the Lease Term, and
if such damage or destruction cannot reasonably be expected by Landlord to be
fully repaired or restored prior to the date that is twelve (12) months prior to
the end of the then-applicable Term, then either Landlord or Tenant shall have
the right to terminate the Lease on thirty (30) days' prior notice to the other
by giving notice thereof within sixty (60) days after the date of such damage or
destruction. Upon any such termination, Landlord shall be entitled to retain
all insurance proceeds, grossed up by Tenant to account for the deductible or
any self-insured retention. If Landlord shall give Tenant a notice under this
Section 15.15 that it seeks to
42
terminate this Lease at a time when Tenant has a remaining Extended Term,
then such termination notice shall be of no effect if Tenant shall exercise
its rights to extend the Term not later than the earlier of the time required
by Section 3.2 or thirty (30) days after Xxxxxxxx's notice given under this
Section 15.15.
ARTICLE 16
CONDEMNATION
16.1 TOTAL TAKING. If at any time during the Term the Property is
totally and permanently taken by Condemnation, this Lease shall terminate on the
Date of Taking and Tenant shall promptly pay all outstanding rent and other
charges through the date of termination.
16.2 PARTIAL TAKING. If a portion of the Property is taken by
Condemnation, this Lease shall remain in effect if the Property is not thereby
rendered Unsuitable For Its Primary Intended Use, but if the Property is thereby
rendered Unsuitable For Its Primary Intended Use, this Lease shall terminate on
the Date of Taking.
16.3 RESTORATION. If there is a partial taking of the Property and
this Lease remains in full force and effect pursuant to Section 16.2, Landlord
at its cost shall accomplish all necessary restoration up to but not exceeding
the amount of the Award payable to Landlord, as provided herein. If Tenant
receives an Award under Section 16.4, Tenant shall repair or restore any Tenant
Improvements up to but not exceeding the amount of the Award payable to Tenant
therefor.
16.4 AWARD-DISTRIBUTION. The entire Award shall belong to and be paid
to Landlord, except that, subject to the rights of the Facility Mortgagee,
Tenant shall be entitled to receive from the Award, if and to the extent such
Award specifically includes such items, a sum attributable to the value, if any,
of: (i) the loss of Tenant's business during the remaining term, (ii) any Tenant
Improvements and (iii) the leasehold interest of Tenant under this Lease.
16.5 TEMPORARY TAKING. The taking of the Property, or any part
thereof, by military or other public authority shall constitute a taking by
Condemnation only when the use and occupancy by the taking authority has
continued for longer than six (6) months. During any such six (6) month period,
which shall be a temporary taking, all the provisions of this Lease shall remain
in full force and effect with no abatement of rent payable by Tenant hereunder.
In the event of any such temporary taking, the entire amount of any such Award
made for such temporary taking allocable to the Lease Term, whether paid by way
of damages, rent or otherwise, shall be paid to Tenant.
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ARTICLE 17
EVENTS OF DEFAULT
17.1 EVENTS OF DEFAULT. If any one or more of the following events
(individually, an "Event of Default") shall occur:
(a) if Tenant shall fail to make payment of the Rent payable by
Tenant under this Lease when the same becomes due and payable and such
failure is not cured by Tenant within a period of ten (10) days after
receipt by Tenant of notice thereof from Landlord; PROVIDED, HOWEVER,
Tenant is only entitled to three (3) such notices per twelve (12) month
period and that such notice shall be in lieu of and not in addition to any
notice required under applicable law;
(b) if Tenant shall fail to observe or perform any material term,
covenant or condition of this Lease and such failure is not cured by Tenant
within a period of thirty (30) days after receipt by Tenant of notice
thereof from Landlord, unless such failure cannot with due diligence be
cured within a period of thirty (30) days, in which case such failure shall
not be deemed to continue if Tenant proceeds promptly and with due
diligence to cure the failure and diligently completes the curing thereof
within one hundred twenty (120) days of receipt of notice from Landlord of
the default; PROVIDED, HOWEVER, that such notice shall be in lieu of and
not in addition to any notice required under applicable law; PROVIDED
FURTHER, HOWEVER, that the cure period shall not extend beyond thirty
(30) days as otherwise provided by this Section 17.1(b) if the facts or
circumstances giving rise to the default are creating a further harm to
Landlord or the Property and Landlord makes a good faith determination that
Tenant is not undertaking remedial steps that Landlord would cause to be
taken if this Lease were then to terminate;
(c) if Tenant shall:
(i) admit in writing its inability to pay its debts as they
become due,
(ii) file a petition in bankruptcy or a petition to take
advantage of any insolvency act,
(iii) make an assignment for the benefit of its creditors,
(iv) be unable to pay its debts as they mature,
(v) consent to the appointment of a receiver of itself or of the
whole or any substantial part of its property, or
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(vi) file a petition or answer seeking reorganization or
arrangement under the Federal bankruptcy laws or any other applicable
law or statute of the United States of America or any state thereof;
(d) if Tenant shall, on a petition in bankruptcy filed against it, be
adjudicated as bankrupt or a court of competent jurisdiction shall enter an
order or decree appointing, without the consent of Tenant, a receiver of
Tenant or of the whole or substantially all of its property, or approving a
petition filed against it seeking reorganization or arrangement of Tenant
under the federal bankruptcy laws or any other applicable law or statute of
the United States of America or any state thereof, and such judgment, order
or decree shall not be vacated or set aside or stayed within sixty
(60) days from the date of the entry thereof;
(e) if Tenant shall be liquidated or dissolved, or shall begin
proceedings toward such liquidation or dissolution;
(f) if the estate or interest of Tenant in the Property or any part
thereof shall be levied upon or attached in any proceeding and the same
shall not be vacated or discharged within the later of ninety (90) days
after commencement thereof or thirty (30) days after receipt by Tenant of
notice thereof from Landlord (unless Tenant shall be contesting such lien
or attachment in accordance with Article 14); PROVIDED, HOWEVER, that such
notice shall be in lieu of and not in addition to any notice required under
applicable law;
(g) if, except as a result of damage, destruction or a partial or
complete Condemnation or other Unavoidable Delays, Tenant voluntarily
ceases operations on the Property;
(h) any representation or warranty made by Tenant herein or in any
certificate, demand or request made pursuant hereto proves to be incorrect,
now or hereafter, in any material respect; or
(i) an "Event of Default" (as defined in such lease) by Tenant or any
Affiliate of Tenant in any other lease by and between such party and
Landlord or any Affiliate of Landlord, or an "Event of Default" under the
Pledge Agreement;
THEN, Tenant shall be declared to have breached this Lease. Landlord
may terminate this Lease by giving Tenant not less than ten (10) days' notice
(or no notice for clauses (c), (d), (e), (f) and (g)) of such termination and
upon the
45
expiration of the time fixed in such notice, the Term shall terminate and all
rights of Tenant under this Lease shall cease. Landlord shall have all
rights at law and in equity available to Landlord as a result of Xxxxxx's
breach of this Lease.
17.2 PAYMENT OF COSTS. Tenant shall, to the extent permitted by law,
pay as Additional Charges all costs and expenses incurred by or on behalf of
Landlord, including reasonable attorneys' fees and expenses, as a result of any
Event of Default hereunder.
17.3 CERTAIN REMEDIES. If an Event of Default shall have occurred and
be continuing, whether or not this Lease has been terminated pursuant to Section
17.1, Tenant shall, to the extent permitted by law, if required by Landlord to
do so, immediately surrender to Landlord the Property pursuant to the provisions
of Section 17.1 and quit the same and Landlord may enter upon and repossess the
Property by reasonable force, summary proceedings, ejectment or otherwise, and
may remove Tenant and all other Persons and any and all Tenant's Personal
Property from the Property subject to any requirement of law.
17.4 DAMAGES. None of the following events shall relieve Tenant of
its liability and obligations hereunder, all of which shall survive any such
termination, repossession or reletting: (a) the termination of this Lease
pursuant to Section 17.1, (b) the repossession of the Property, (c) the failure
of Landlord, notwithstanding reasonable good faith efforts, to relet the
Property, (d) the reletting of all or any portion thereof, nor (e) the failure
of Landlord to collect or receive any rentals due upon any such reletting. In
the event of any such termination, Tenant shall forthwith pay to Landlord all
Rent due and payable with respect to the Property to, and including, the date of
such termination. Thereafter, Tenant shall forthwith pay to Landlord, at
Landlord's option, as and for liquidated and agreed current damages for Tenant's
default, and not as a penalty, either:
(a) the sum of:
(i) the worth at the time of award of the unpaid Rent which had
been earned at the time of termination,
(ii) the worth at the time of award of the amount by which the
unpaid Rent which would have been earned after termination until the
time of award exceeds the amount of such unpaid Rent that Tenant
proves could have been reasonably avoided,
(iii) the worth at the time of award of the amount by which the
unpaid Rent for the balance of the Term after the time of award
exceeds the amount of such unpaid Rent that Tenant proves could be
reasonably avoided, and
46
(iv) any other amount necessary to compensate Landlord for all the
detriment proximately caused by Xxxxxx's failure to perform its
obligations under this Lease or which in the ordinary course of things
would be likely to result therefrom.
In making the above determinations, the "worth at the time of the
award" in subsections (i) and (iii) shall be determined by the court having
jurisdiction thereof including interest at the Overdue Rate and the "worth at
the time of the award" in subsection (iii) shall be determined by the court
having jurisdiction thereof using a discount rate equal to the discount rate of
the Federal Reserve Bank of San Francisco at the time of the award plus one
percent (1%) and the Percentage Rent shall be deemed to be the same as for the
then-current Fiscal Year or, if not determinable, the immediately preceding
Fiscal Year, for the remainder of the Term, or such other amount as either party
shall prove reasonably could have been earned during the remainder of the Term
or any portion thereof; or
(b) without termination of Tenant's right to possession of the
Property, each installment of said Rent and other sums payable by Tenant to
Landlord under the Lease as the same becomes due and payable, which Rent and
other sums shall bear interest at the Overdue Rate from the date when due until
paid, and Landlord may enforce, by action or otherwise, any other term or
covenant of this Lease.
17.5 ADDITIONAL REMEDIES. Landlord has all other remedies that may be
available under applicable law.
17.6 APPOINTMENT OF RECEIVER. Upon the occurrence of an Event of
Default, and upon filing of a suit or other commencement of judicial proceedings
to enforce the rights of Landlord hereunder, Landlord shall be entitled, as a
matter or right, to the appointment of a receiver or receivers acceptable to
Landlord of the Property and of the revenues, earnings, income, products and
profits thereof, pending such proceedings, with such powers as the court making
such appointment shall confer.
17.7 WAIVER. If this Lease is terminated pursuant to Section 17.1,
Tenant waives, to the extent permitted by applicable law (a) any right of
redemption, re-entry or repossession and (b) any right to a trial by jury.
17.8 APPLICATION OF FUNDS. Any payments received by Landlord under
any of the provisions of this Lease during the existence or continuance of any
Event of Default (and such payment is made to Landlord rather than Tenant due to
the existence of an Event of Default) shall be applied to Tenant's obligations
in the order which Landlord may determine or as may be prescribed by the laws of
the State.
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17.9 IMPOUNDS. Landlord shall have the right during the continuance
of an Event of Default to require Tenant to pay to Landlord an additional
monthly sum (each an "Impound Payment") sufficient to pay the Impound Charges
(as hereinafter defined) as they become due. As used herein, "Impound Charges"
shall mean real estate taxes on the Property or payments in lieu thereof and
premiums on any insurance required by this Lease. Landlord shall determine the
amount of the Impound Charges and of each Impound Payment. The Impound Payments
shall be held in a separate account and shall not be commingled with other funds
of Landlord and interest thereon shall be held for the account of Tenant.
Landlord shall apply the Impound Payments to the payment of the Impound Charges
in such order or priority as Landlord shall determine or as required by law. If
at any time the Impound Payments theretofore paid to Landlord shall be
insufficient for the payment of the Impound Charges, Tenant, within ten
(10) days after Landlord's demand therefor, shall pay the amount of the
deficiency to Landlord.
ARTICLE 18
LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT
If Tenant shall fail to make any payment or to perform any act
required to be made or performed under this Lease, and to cure the same within
the relevant time periods provided in Article 17, Landlord, after notice to and
demand upon Tenant, and without waiving or releasing any obligation or default,
may (but shall be under no obligation to) at any time thereafter make such
payment or perform such act for the account and at the expense of Tenant.
Landlord may, to the extent permitted by law, enter upon the Property for such
purpose and take all such action thereon as, in Landlord's opinion, may be
necessary or appropriate therefor. No such entry shall be deemed an eviction of
Tenant. All sums so paid by Xxxxxxxx and all costs and expenses (including
reasonable attorneys' fees and expenses, to the extent permitted by law) so
incurred, together with a late charge thereon at the Overdue Rate from the date
on which such sums or expenses are paid or incurred by Landlord, shall be paid
by Tenant to Landlord on demand. The obligations of Tenant and rights of
Landlord contained in this Article 18 shall survive the expiration or earlier
termination of this Lease.
ARTICLE 19
LEGAL REQUIREMENTS
Subject to Article 14 regarding permitted contests, Tenant, at its
expense, shall promptly (a) comply with all Legal Requirements and Insurance
Requirements in respect of the use, operation, maintenance, repair and
restoration of the Property, whether or not compliance therewith shall require
structural changes in any of the Improvements or interfere with the use and
enjoyment of the Property; and (b) procure, maintain and comply with all
licenses and other authorizations required for any use
48
of the Property then being made, and for the proper erection, installation,
operation and maintenance of the Property or any party thereof.
ARTICLE 20
HOLDING OVER
If Tenant shall for any reason remain in possession of the Property
after the expiration of the Term or earlier termination of the Term hereof, such
possession shall be deemed to be a tenant at sufferance during which time Tenant
shall pay as rental each month, 125% of the aggregate of (i) the aggregate Base
Rent and monthly portion of the Percentage Rent payable with respect to that
month in the last Fiscal Year; (ii) all Additional Charges accruing during the
month; and (iii) all other sums, if any, payable by Tenant pursuant to the
provisions of this Lease with respect to the Property. During such period of
month-to-month tenancy, Tenant shall be obligated to perform and observe all of
the terms, covenants and conditions of this Lease, but shall have no rights
hereunder other than the right, to the extent given by law to month-to-month
tenancies, to continue its occupancy and use of the Property. Nothing contained
herein shall constitute the consent, express or implied, of Landlord to the
holding over of Tenant after the expiration or earlier termination of this
Lease.
ARTICLE 21
RISK OF LOSS
During the Lease Term, the risk of loss or of decrease in the
enjoyment and beneficial use of the Property as a consequence of the damage or
destruction thereof by fire, flood, the elements, casualties, thefts, riots,
wars or otherwise, or in consequence of foreclosures, attachments, levies or
executions (other than by Landlord and those claiming from, through or under
Landlord) is assumed by Tenant. In the absence of gross negligence, willful
misconduct or breach of this Lease by Landlord pursuant to Section 28.2,
Landlord shall in no event be answerable or accountable therefor nor shall any
of the events mentioned in this Article 21 entitle Tenant to any abatement of
Rent.
ARTICLE 22
INDEMNIFICATION
22.1 TENANT'S INDEMNIFICATION OF LANDLORD. Except as otherwise
provided in Section 10.7 and notwithstanding the existence of any insurance
provided for in Article 15, and without regard to the policy limits of any such
insurance, Tenant will protect, indemnify, save harmless and defend Landlord,
the Company and Affiliates of the Company from and against all liabilities,
obligations, claims, actual or consequential
49
damages, penalties, causes of action, costs and expenses (including
reasonable attorneys' fees and expenses), to the extent permitted by law,
imposed upon or incurred by or asserted against Landlord, the Company or
Affiliates of the Company by reason of:
(a) any accident, injury to or death of persons or loss of or damage
to property occurring on or about the Property or adjoining property,
including, but not limited to, any accident, injury to or death of Person
or loss of or damage to property resulting from golf balls, golf clubs,
golf shoes, lawn mowers or other equipment, pesticides, fertilizers or
other substances, golf carts, tractors or other motorized vehicles present
on or adjacent to the Property;
(b) any use, misuse, non-use, condition, maintenance or repair of the
Property;
(c) any Impositions (which are the obligations of Tenant to pay
pursuant to the applicable provisions of this Lease);
(d) any failure on the part of Tenant to perform or comply with any
of the terms of this Lease;
(e) any so-called "dram shop" liability associated with the sale
and/or consumption of alcohol at the Property;
(f) the non-performance of any of the terms and provisions of any and
all existing and future subleases of the Property to be performed by the
landlord (Tenant) thereunder;
(g) the negligence or alleged negligence of Landlord with respect to
the Property; or
(h) any liability Landlord may incur or suffer as a result of any
permitted contest by Tenant pursuant to Article 14.
22.2 LANDLORD'S INDEMNIFICATION OF TENANT. Landlord shall protect,
indemnify, save harmless and defend Tenant from and against all liabilities,
obligations, claims, actual or consequential damages, penalties, causes of
action, costs and expenses (including reasonable attorneys' fees) imposed upon
or incurred by or asserted against Tenant as a result of Landlord's active,
gross negligence or willful misconduct.
22.3 MECHANICS OF INDEMNIFICATION. As soon as reasonably practicable
after receipt by the indemnified party of notice of any liability or claim
incurred by or asserted against the indemnified party that is subject to
indemnification under
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this Article 22, the indemnified party shall give notice thereof to the
indemnifying party. The indemnified party may at its option demand indemnity
under this Article 22 as soon as a claim has been threatened by a third
party, regardless of whether an actual loss has been suffered, so long as the
indemnified party shall in good faith determine that such claim is not
frivolous and that the indemnified party may be liable for, or otherwise
incur, a loss as a result thereof and shall give notice of such determination
to the indemnifying party. The indemnified party shall permit the
indemnifying party, at its option and expense, to assume the defense of any
such claim by counsel selected by the indemnifying party and reasonably
satisfactory to the indemnified party, and to settle or otherwise dispose of
the same; PROVIDED, HOWEVER, that the indemnified party may at all times
participate in such defense at its expense, and PROVIDED FURTHER, HOWEVER,
that the indemnifying party shall not, in defense of any such claim, except
with the prior written consent of the indemnified party, consent to the entry
of any judgment or to enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff in
question to the indemnified party and its affiliates a release of all
liabilities in respect of such claims, or that does not result only in the
payment of money damages by the indemnifying party. If the indemnifying
party shall fail to undertake such defense within thirty (30) days after such
notice, or within such shorter time as may be reasonable under the
circumstances, then the indemnified party shall have the right to undertake
the defense, compromise or settlement of such liability or claim on behalf of
and for the account of the indemnifying party.
22.4 SURVIVAL OF INDEMNIFICATION OBLIGATIONS; AVAILABLE INSURANCE
PROCEEDS. Tenant's or Landlord's liability for a breach of the provisions of
this Article 22 arising during the term hereof shall survive any termination of
this Lease. Notwithstanding anything herein to the contrary, each party agrees
to look first to the available proceeds from any insurance it carries in
connection with the Property prior to seeking indemnification or otherwise
seeking to recover any amounts to compensate a party for its damages and then to
seek indemnification only to the extent of any loss not covered by their
available insurance proceeds.
ARTICLE 23
SUBLETTING AND ASSIGNMENT
23.1 PROHIBITION AGAINST ASSIGNMENT. Tenant shall not, without the
prior written consent of Landlord, which consent Landlord may withhold in its
sole discretion, assign, mortgage, pledge, hypothecate, encumber or otherwise
transfer (except to an Affiliate of Tenant or a Permitted Assignee) the Lease or
any interest therein, all or any part of the Property, whether voluntarily,
involuntarily or by operation of law. For purposes
51
of this Article 23, a Change in Control of the Tenant shall constitute an
assignment of this Lease.
23.2 SUBLEASES.
(a) PERMITTED SUBLEASES. Tenant shall not, without the prior
written consent of Landlord, which consent Landlord may withhold in its
sole discretion, further sublease or license portions of the Property to
third parties, including concessionaires or licensees. Without limiting
the foregoing, Xxxxxx's proposed sublease or any of the following transfers
shall require Landlord's prior written consent, which consent Landlord may
withhold in its sole discretion:
(i) sublease or license to operate golf courses;
(ii) sublease or license to operate golf professionals' shops;
(iii) sublease or license to operate golf driving
ranges;
(iv) sublease or license to provide golf lessons by other than
a resident professional;
(v) sublease or license to operate restaurants;
(vi) sublease or license to operate bars;
(vii) sublease or license to operate spa or health
clubs; and
(viii) sublease or license to operate any other portions
(but not the entirety) of the Property customarily associated with or
incidental to the operation of the golf course.
(b) TERMS OF SUBLEASE. Each sublease with respect to the
Property shall be subject and subordinate to the provisions of this Lease.
No sublease made as permitted by this Section 23.2 shall affect or reduce
any of the obligations of Tenant hereunder, and all such obligations shall
continue in full force and effect as if no sublease had been made. No
sublease shall impose any additional obligations on Landlord under this
Lease.
(c) COPIES. Tenant shall, not less than sixty (60) days prior
to any proposed assignment or sublease, deliver to Landlord written notice
of its intent to assign or sublease, which notice shall identify the
intended assignee or sublessee by name and address, shall specify the
effective date of the intended assignment or sublease, and
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shall be accompanied by an exact copy of the proposed assignment or
sublease. Tenant shall provide Landlord with such additional information or
documents reasonably requested by Landlord with respect to the proposed
transaction and the proposed assignee or subtenant, and an opportunity to
meet and interview the proposed assignee or subtenant, if requested.
(d) ASSIGNMENT OF RIGHTS IN SUBLEASES. As security for
performance of its obligations under this Lease, Tenant hereby grants,
conveys and assigns to Landlord all right, title and interest of Tenant in
and to all subleases now in existence or hereinafter entered into for any
or all of the Property, and all extensions, modifications and renewals
thereof and all rents, issues and profits therefrom. Landlord hereby
grants to Tenant a license to collect and enjoy all rents and other sums of
money payable under any sublease of any of the Property; provided, however,
that Landlord shall have the absolute right at any time after the
occurrence and continuance of an Event of Default upon notice to Tenant and
any subtenants to revoke said license and to collect such rents and sums of
money and to retain the same. Tenant shall not (i) consent to, cause or
allow any material modification or alteration of any of the terms,
conditions or covenants of any of the subleases or the termination thereof,
without the prior written approval of Landlord nor (ii) accept any rents
(other than customary security deposits) more than ninety (90) days in
advance of the accrual thereof nor permit anything to be done, the doing of
which, nor omit or refrain from doing anything, the omission of which, will
or could be a breach of or default in the terms of any of the subleases.
(e) LICENSES, ETC. For purposes of this Section 23.2, subleases
shall be deemed to include any licenses, concession arrangements,
management contracts (except to an Affiliate of the Lessee) or other
arrangements relating to the possession or use of all or any part of the
Property.
23.3 TRANSFERS. No assignment or sublease shall in any way impair the
continuing primary liability of Tenant hereunder, as a principal and not as a
surety or guarantor, and no consent to any assignment or sublease in a
particular instance shall be deemed to be a waiver of the prohibition set forth
in Section 23.1. Any assignment shall be solely of Xxxxxx's entire interest in
this Lease. Any assignment or other transfer of all or any portion of Xxxxxx's
interest in the Lease in contravention of the terms of this Lease shall be
voidable at Landlord's option. Anything in this Lease to the contrary
notwithstanding, Tenant shall not sublet all or any portion of the Property or
enter into any other agreement which has the effect of reducing the Percentage
Rent payable to Landlord hereunder.
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23.4 REIT LIMITATIONS. Anything contained in this Lease to the
contrary notwithstanding, Tenant shall not (i) sublet or assign or enter into
other arrangements such that the amounts to be paid by the sublessee or assignee
thereunder would be based, in whole or in part, on the income or profits derived
by the business activities of the sublessee or assignee; (ii) sublet or assign
the Property or this Lease to any person that Landlord owns, directly or
indirectly (by applying constructive ownership rules set forth in Section
856(d)(5) of the Code), a 10% or greater interest; or (iii) sublet or assign the
Property or this Lease in any other manner or otherwise derive any income which
could cause any portion of the amounts received by Landlord pursuant to this
Lease or any sublease to fail to qualify as "rents from real property" within
the meaning of Section 856(d) of the Code, or which could cause any other income
received by Landlord to fail to qualify as income described in Section 856(c)(2)
of the Code. The requirements of this Section 23.4 shall likewise apply to any
further subleasing by any subtenant.
23.5 RIGHT OF FIRST OFFER OF LANDLORD TO ACQUIRE LEASEHOLD. In
addition to Landlord's rights in Section 23.1, Landlord or its designee shall
have, for a period of sixty (60) days following receipt of the written notice of
Xxxxxx's intent to assign its interest in the Lease to a third party
unaffiliated with Tenant (and in which management of the Tenant shall have no
continuing management or ownership interest), the right to elect to purchase the
leasehold interest on the terms and conditions at which Tenant proposes to sell
or assign its interest. If Landlord or its designee elects not to purchase such
interest of Tenant, then Tenant shall be free to sell its interest to a third
party, subject to Landlord's prior written consent as provided in Section 23.1.
However, if (i) the price at which Tenant intends to sell its interest is
reduced by five percent (5%) or more, or (ii) the assignment to the third party
is not completed within one hundred eighty (180) days of Landlord's receipt of
written notice of Xxxxxx's intention to assign its interest in the Lease, then
Tenant shall again offer Landlord the right to acquire its interest; provided,
however, that in the case of a change in price, Landlord shall have only fifteen
(15) days to accept such revised offer.
23.6 BANKRUPTCY LIMITATIONS.
(a) Tenant acknowledges that this Lease is a lease of nonresidential
real property and therefore agrees that Tenant, as the debtor in possession, or
the trustee for Tenant (collectively, the "Trustee") in any proceeding under
Title 11 of the United States Bankruptcy Code relating to Bankruptcy, as amended
(the "Bankruptcy Code"), shall not seek or request any extension of time to
assume or reject this Lease or to perform
54
any obligations of this Lease which arise from or after the order of relief.
(b) If the Trustee proposes to assume or to assign this Lease or
sublet the Property (or any portion thereof) to any Person which shall have made
a bona fide offer to accept an assignment of this Lease or a subletting on terms
acceptable to the Trustee, the Trustee shall give Landlord, and lessors and
mortgagees of Landlord of which Tenant has notice, written notice setting forth
the name and address of such person and the terms and conditions of such offer,
no later than twenty (20) days after receipt of such offer, but in any event no
later than ten (10) days prior to the date on which the Trustee makes
application to the bankruptcy court for authority and approval to enter into
such assumption and assignment or subletting. Landlord shall have the prior
right and option, to be exercised by written notice to the Trustee given at any
time prior to the effective date of such proposed assignment or subletting, to
receive and assignment of this Lease or subletting of the Property to Landlord
or Landlord's designee upon the same terms and conditions and for the same
consideration, if any, as the bona fide offer made by such person, less any
brokerage commissions which may be payable out of the consideration to be paid
by such person for the assignment or subletting of this Lease.
(c) The Trustee shall have the right to assume Xxxxxx's rights and
obligations under this Lease only if the Trustee: (a) promptly cures any Event
of Default then existing or provides adequate assurance that the Trustee will
promptly compensate Landlord for any actual pecuniary loss incurred by Landlord
as a result of Tenant's default under this Lease; and (c) provides adequate
assurance of future performance under this Lease. Adequate assurance of future
performance by the proposed assignee shall include, as a minimum, that: (i) any
proposed assignee of this Lease shall provide to Landlord an audited financial
statement, dated no later than six (6) months prior to the effective date of
such proposed assignment or sublease, with no material change therein as of the
effective date, which financial statement shall show the proposed assignee to
have a net worth equal to at least or, in the alternative,
the proposed assignee shall provide a guarantor of such proposed assignee's
obligations under this Lease, which guarantor shall provide an audited financial
statement meeting the requirements of (i) above and shall execute and deliver to
Landlord a guaranty agreement in form and substance acceptable to Landlord; and
(ii) any proposed assignee shall grant to Landlord a security interest in favor
of Landlord in all furniture, fixtures, and other personal property to be used
by such proposed assignee in the Property. All payments required of Tenant
under this Lease, whether or not expressly denominated as such in this Lease,
shall constitute rent for the purposes of Title 11 of the Bankruptcy Code.
55
(d) The parties agree that for the purposes of the Bankruptcy code
relating to (a) the obligation of the Trustee to provide adequate assurance that
the Trustee will "promptly" cure defaults and compensate Landlord for actual
pecuniary loss, the word "promptly" shall mean that cure of defaults and
compensation will occur no later than sixty (60) days following the filing of
any motion or application to assume this Lease; and (b) the obligation of the
Trustee to compensate or to provide adequate assurance that the Trustee will
promptly compensate Landlord for "actual pecuniary loss", (the term "actual
pecuniary loss" shall mean, in addition to any other provisions contained herein
relating to Landlord's damages upon default obligations of Tenant to pay money
under this Lease and all attorneys' fees and related costs of Landlord incurred
in connection with any default of Tenant in connection with Xxxxxx's bankruptcy
proceedings).
(e) Any person or entity to which this Lease is assigned pursuant to
the provisions of the Bankruptcy Code shall be deemed, without further act or
deed, to have assumed all of the obligations arising under this Lease and each
of the conditions and provisions hereof on and after the date of such
assignment. Any such assignee shall, upon the request of Landlord, forthwith
execute and deliver to Landlord an instrument, in form and substance acceptable
to Landlord, confirming such assumption.
23.7 MANAGEMENT AGREEMENT. Tenant shall not enter into any
management agreement that provides for the management and operation of the
entire Property by an unaffiliated third party without the prior written consent
of Landlord.
ARTICLE 24
OFFICER'S CERTIFICATES AND OTHER STATEMENTS
24.1 OFFICER'S CERTIFICATES. At any time, and from time to time upon
Xxxxxx's receipt of not less than ten (10) days' prior written request by
Landlord, Tenant will furnish to Landlord an Officer's Certificate certifying
that:
(a) this Lease is unmodified and in full force and effect (or that
this Lease is in full force and effect as modified and setting forth the
modifications);
(b) the dates to which the Rent has been paid;
(c) whether or not to the best knowledge of Tenant, Landlord is in
default in the performance of any covenant, agreement or condition
contained in this Lease and, if so, specifying each such default of which
Tenant may have knowledge;
(d) that, except as otherwise specified, there are no proceedings
pending or, to the knowledge of the
56
signatory, threatened, against Tenant before or by any court or
administrative agency which, if adversely decided, would materially and
adversely affect the financial condition and operations of Tenant; and
(e) responding to such other questions or statements of fact as
Landlord shall reasonably request.
Xxxxxx's failure to deliver such Officer's Certificate within such
time shall constitute an acknowledgement by Tenant that this Lease is unmodified
and in full force and effect except as may be represented to the contrary by
Landlord, Landlord is not in default in the performance of any covenant,
agreement or condition contained in this Lease and the other matters set forth
in such request, if any, are true and correct. Any such Officer's Certificate
furnished pursuant to this Section 24.1 may be relied upon by Landlord and any
prospective lender or purchaser.
24.2 ENVIRONMENTAL STATEMENTS. Immediately upon Tenant's learning, or
having reasonable cause to believe, that any Hazardous Material in a quantity
sufficient to require remediation or reporting under applicable law is located
in, on or under the Property or any adjacent property, Tenant shall notify
Landlord in writing of (a) the existence of any such Hazardous Material; (b) any
enforcement, cleanup, removal, or other governmental or regulatory action
instituted, completed or threatened; (c) any claim made or threatened by any
Person against Tenant or the Property relating to damage, contribution, cost
recovery, compensation, loss, or injury resulting from or claimed to result from
any Hazardous Material; and (d) any reports made to any federal, state or local
environmental agency arising out of or in connection with any Hazardous Material
in or removed from the Property, including any complaints, notices, warnings or
asserted violations in connection therewith.
ARTICLE 25
LANDLORD MORTGAGES
25.1 LANDLORD MAY GRANT LIENS. Subject to Section 25.2, without the
consent of Tenant, Landlord may, from time to time, directly or indirectly,
create or otherwise cause to exist any Landlord's Encumbrance upon the Property,
or any portion thereof or interest therein, whether to secure any borrowing or
other means of financing or refinancing. This Lease is and at all times shall
be subject and subordinate to any ground or underlying leases, mortgages, trust
deeds or like encumbrances, which may now or hereafter affect the Property and
to all renewals, modifications, consolidations, replacements and extensions of
any such lease, mortgage, trust deed or like encumbrance. This clause shall be
self-operative and no further instrument of subordination shall be required by
any ground or underlying lessor or by any mortgagee or beneficiary, affecting
57
any lease or the Property. In confirmation of such subordination, Tenant shall
execute promptly any certificate that Landlord may request for such purposes.
25.2 TENANT'S NON-DISTURBANCE RIGHTS. So long as Tenant shall pay all
Rent as the same becomes due and shall fully comply with all of the terms of
this Lease and fully perform its obligations hereunder, none of Tenant's rights
under this Lease shall be disturbed by the holder of any Landlord's Encumbrance
which is created or otherwise comes into existence after the Commencement Date.
25.3 FACILITY MORTGAGE PROTECTION. Tenant agrees that the holder of
any Landlord Encumbrance shall have no duty, liability or obligation to perform
any of the obligations of Landlord under this Lease, but that in the event of
Landlord's default with respect to any such obligation, Tenant will give any
such holder whose name and address have been furnished Tenant in writing for
such purpose notice of Landlord's default and allow such holder thirty (30) days
following receipt of such notice for the cure of said default before invoking
any remedies Tenant may have by reason thereof.
ARTICLE 26
SALE OF FEE INTEREST
26.1 RIGHT OF FIRST OFFER TO PURCHASE. If Landlord intends to sell
the Property during the Lease Term, and provided no Event of Default then
exists, Tenant shall have a right of first offer to purchase the Property
("Tenant's Right of First Offer to Purchase") on the terms and conditions at
which Xxxxxxxx proposes to sell the Property to a third party. Landlord shall
give Tenant written notice of its intent to sell and shall indicate the terms
and conditions (including the sale price) upon which Landlord intends to sell
the Property to a third party. Tenant shall thereafter have sixty (60) days to
elect in writing to purchase the Property and execute a Purchase and Sale
Agreement with respect thereto and shall have an additional fifty (50) days to
close on the acquisition of the Property on the terms and conditions set forth
in the notice provided by Landlord to Tenant; provided that prior to the
execution of a binding purchase and sale agreement, Landlord shall retain the
right to elect not to sell the Property. If Tenant does not elect to purchase
the Property, then Landlord shall be free to sell the Property to a third party.
However, if the price at which Landlord intends to sell the Property to a third
party is less than 95% of the price set forth in the notice provided by Landlord
to Tenant, then Landlord shall again offer Tenant the right to acquire the
Property upon the same terms and conditions, provided that Tenant shall have
only thirty (30) days thereafter to complete the acquisition at such price,
terms and conditions.
58
26.2 CONVEYANCE BY LANDLORD. If Landlord shall convey the Property in
accordance with the terms hereof other than as security for a debt, Landlord
shall, upon the written assumption by the transferee of the Property of all
liabilities and obligations of the Lease be released from all future liabilities
and obligations under this Lease arising or accruing from and after the date of
such conveyance or other transfer as to the Property. All such future
liabilities and obligations shall thereupon be binding upon the new owner.
ARTICLE 27
ARBITRATION
27.1 ARBITRATION. In each case specified in this Lease in which it
shall become necessary to resort to arbitration, such arbitration shall be
determined as provided in this Section 27.1. The party desiring such
arbitration shall give notice to that effect to the other party, and an
arbitrator shall be selected by mutual agreement of the parties, or if they
cannot agree within thirty (30) days of such notice, by appointment made by the
American Arbitration Association ("AAA") from among the members of its panels
who are qualified and who have experience in resolving matters of a nature
similar to the matter to be resolved by arbitration.
27.2 ARBITRATION PROCEDURES. In any arbitration commenced pursuant to
Section 27.1 a single arbitrator shall be designated and shall resolve the
dispute. The arbitrator's decision shall be binding on all parties and shall
not be subject to further review or appeal except as otherwise allowed by
applicable law. Upon the failure of either party (the "non-complying party") to
comply with his decision, the arbitrator shall be empowered, at the request of
the other party, to order such compliance by the non-complying party and to
supervise or arrange for the supervision of the non-complying party. To the
maximum extent practicable, the arbitrator and the parties, and the AAA if
applicable, shall take any action necessary to insure that the arbitration shall
be concluded within ninety (90) days of the filing of such dispute. The fees
and expenses of the arbitrator shall be shared equally by Landlord and Xxxxxx
except as otherwise specified above in this Section 27.2. Unless otherwise
agreed in writing by the parties or required by the arbitrator or AAA, if
applicable, arbitration proceedings hereunder shall be conducted in the State.
Notwithstanding formal rules of evidence, each party may submit such evidence as
each party deems appropriate to support its position and the arbitrator shall
have access to and right to examine all books and records of Landlord and Xxxxxx
regarding the Property during the arbitration.
59
ARTICLE 28
MISCELLANEOUS
28.1 LANDLORD'S RIGHT TO INSPECT. Tenant shall permit
Landlord and its authorized representatives to inspect the Property during
usual business hours subject to any security, health, safety or
confidentiality requirements of Tenant or any governmental agency or
insurance requirement relating to the Property, or imposed by law or
applicable regulations. Landlord shall indemnify Tenant for all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against Tenant by reason of Landlord's
inspection pursuant to this Section 28.1.
28.2 BREACH BY LANDLORD. It shall be a breach of this Lease if
Landlord shall fail to observe or perform any material term, covenant or
condition of this Lease on its part to be performed and such failure shall
continue for a period of thirty (30) days after notice thereof from Tenant,
unless such failure cannot with due diligence be cured within a period of
thirty (30) days, in which case such failure shall not be deemed to continue
if Landlord, within said thirty (30)-day period, proceeds promptly and with
due diligence to cure the failure and diligently completes the curing
thereof. The time within which Landlord shall be obligated to cure any such
failure shall also be subject to extension of time due to the occurrence of
any Unavoidable Delay. In no event shall any breach by Landlord permit
Tenant to terminate this Lease or permit Tenant to offset any Rent due and
owing hereunder or otherwise excuse Tenant from any of its obligations
hereunder.
28.3 COMPETITION BETWEEN LANDLORD AND TENANT. Landlord and Xxxxxx
agree that neither party shall be restricted as to other relationships and
competition. Affiliates of Tenant shall be allowed to own, lease and/or
manage other golf courses that are not affiliated with Landlord, provided
that such other ownership, leasing or management arrangements are disclosed
to Landlord in writing. Landlord may acquire or own golf courses that may be
geographically proximate to one or more golf courses that Tenant or
Affiliates of Tenant may own, manage or lease.
28.4 NO WAIVER. No failure by Landlord or Tenant to insist upon the
strict performance of any term hereof or to exercise any right, power or
remedy consequent upon a breach thereof, and no acceptance of full or partial
payment of Rent during the continuance of any such breach, shall constitute a
waiver of any such breach or of any such term. To the extent permitted by
law, no waiver of any breach shall affect or alter
60
this Lease, which shall continue in full force and effect with respect to any
other then existing or subsequent breach.
28.5 REMEDIES CUMULATIVE. To the extent permitted by law, each
legal, equitable or contractual rights, power and remedy of Landlord or
Tenant now or hereafter provided either in this Lease or by statute or
otherwise shall be cumulative and concurrent and shall be in addition to
every other right, power and remedy. The exercise or beginning of the
exercise by Landlord or Tenant of any one or more of such rights, powers and
remedies shall not preclude the simultaneous or subsequent exercise by
Landlord or Tenant of any or all of such other rights, powers and remedies.
28.6 ACCEPTANCE OF SURRENDER. No surrender to Landlord of this
Lease or of the Property or any part thereof, or of any interest therein,
shall be valid or effective unless agreed to and accepted in writing by
Landlord and no act by Landlord or any representative or agent of Landlord,
other than such a written acceptance by Xxxxxxxx, shall constitute an
acceptance of any such surrender.
28.7 NO MERGER OF TITLE. There shall be no merger of this Lease or
of the leasehold estate created hereby by reason of the fact that the same
Person may acquire, own or hold, directly or indirectly, (a) this Lease or
the leasehold estate created hereby or any interest in this Lease or such
leasehold estate and (b) the fee estate in the Property.
28.8 QUIET ENJOYMENT. So long as Tenant shall pay all Rent as the
same becomes due and shall fully comply with all of the terms of this Lease
and fully perform its obligations hereunder, Tenant shall peaceably and
quietly have, hold and enjoy the Property for the Term hereof, free of any
claim or other action by Landlord or anyone claiming by, through or under
Landlord, but subject to all liens and encumbrances of record as of the date
hereof or any Landlord's Encumbrances.
28.9 NOTICES. All notices, demands, requests, consents, approvals
and other communications hereunder shall be in writing and delivered or
mailed (by registered or certified mail, return receipt requested and postage
prepaid), addressed to the respective parties, as set forth below:
If to Landlord: Golf Trust of America, L.P.
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
With a copy to: ___________________________
___________________________
___________________________
61
If to Tenant: ___________________________
___________________________
___________________________
___________________________
With a copy to: ___________________________
___________________________
___________________________
28.10 SURVIVAL OF CLAIMS. Anything contained in this Lease to
the contrary notwithstanding, all claims against, and liabilities of, Tenant
or Landlord arising prior to any date of termination of this Lease shall
survive such termination.
28.11 INVALIDITY OF TERMS OR PROVISIONS. If any term or
provision of this Lease or any application thereof shall be invalid or
unenforceable, the remainder of this Lease and any other application of such
term or provision shall not be affected thereby.
28.12 PROHIBITION AGAINST USURY. If any late charges provided
for in any provision of this Lease are based upon a rate in excess of the
maximum rate permitted by applicable law, the parties agree that such charges
shall be fixed at the maximum permissible rate.
28.13 AMENDMENTS TO LEASE. Neither this Lease nor any provision
hereof may be changed, waived, discharged or terminated except by an
instrument in writing and in recordable form signed by Landlord and Xxxxxx.
28.14 SUCCESSORS AND ASSIGNS. All the terms and provisions of
this Lease shall be binding upon and inure to the benefit of the parties
hereto. All permitted assignees or sublessees shall be subject to the terms
and provisions of this Lease.
28.15 TITLES. The headings in this Lease are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
28.16 GOVERNING LAW. This Lease shall be governed by and
construed in accordance with the laws of the State (but not including its
conflict of laws rules).
28.17 MEMORANDUM OF LEASE. Landlord and Tenant shall, promptly
upon the request of either, enter into a short form memorandum of this Lease,
in form and substance satisfactory to Landlord and suitable for recording
under the State, in which reference to this Lease, and all options contained
herein, shall be made. Tenant shall pay all costs and expenses of recording
such Memorandum of Lease.
62
28.18 ATTORNEYS' FEES. In the event of any dispute between the
parties hereto involving the covenants or conditions contained in this Lease
or arising out of the subject matter of this Lease, the prevailing party
shall be entitled to recover against the other party reasonable attorneys'
fees and court costs.
28.19 NON-RECOURSE AS TO LANDLORD. Anything contained herein to
the contrary notwithstanding, any claim based on or in respect of any
liability of Landlord under this Lease shall be enforced only against the
Property and not against any other assets, properties or funds of (a)
Landlord, (b) any director, officer, general partner, limited partner,
employee or agent of Landlord, or any general partner of Landlord, any of
their respective general partners or stockholders (or any legal
representative, heir, estate, successor or assign of any thereof), (c) any
predecessor or successor partnership or corporation (or other entity) of
Landlord, or any of their respective general partners, either directly or
through either Landlord or their respective general partners or any
predecessor or successor partnership or corporation or their stockholders,
officers, directors, employees or agents (or other entity), or (d) any other
Person affiliated with any of the foregoing, or any director, officer,
employee or agent of any thereof.
28.20 NO RELATIONSHIP. Landlord shall in no event be construed
for any purpose to be a partner, joint venturer or associate of Tenant or of
any subtenant, operator, concessionaire or licensee of Tenant with respect to
the Property or any of the Other Leased Properties or otherwise in the
conduct of their respective businesses.
28.21 RELETTING. If Tenant does not exercise its option to
extend or further extend the Term under Section 3.2 or if an Event of Default
occurs, then Landlord shall have the right during the remainder of the Term
then in effect to advertise the availability of the Property for sale or
reletting and to show the Property to prospective purchasers or tenants or
their agents at such reasonable times as Landlord may elect.
63
LANDLORD: GOLF TRUST OF AMERICA, L.P.,
a Delaware limited partnership
By: GTA GP, Inc., a Maryland corporation
Its: General Partner
By: ________________________
Its: _______________________
TENANT: _____________________________,
a ____________________________
By: _________________________
Its: ________________________
64
EXHIBIT A
LEGAL DESCRIPTION OF THE LAND
A-1
EXHIBIT B
SCHEDULE OF IMPROVEMENTS
[To come]
B-1
ENTIRE EXHIBIT DELETED
B-1
EXHIBIT C
OTHER LEASED PROPERTIES
[To come]
C-1
EXHIBIT D
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") is entered into as of this
_____ day of ________________, 19__, by and between (i) GOLF TRUST OF
AMERICA, L.P., a Delaware limited partnership ("Secured Party"), and (ii) ____
________________ ("Pledgor").
RECITALS:
This Agreement is entered into based on the following understandings:
X. Xxxxxxxx to that certain Contribution and Leaseback Agreement
(the "Contribution Agreement") dated as of _______________, 1996, by and
between Secured Party and Pledgor, Pledgor transferred to Secured Party all
of its right, title and interest in and to certain real and personal property
as described in the Contribution Agreement (collectively, the "Property").
B. Pursuant to that certain lease dated as of _______________ ,
1997, (the "Lease") Secured Party leased its interest in the Property to ____
___________, an affiliate of Pledgor ("Tenant").
C. As a condition to (i) Secured Party entering into the Lease
with Tenant; and (ii) Secured Party entering into the Contribution Agreement
with Pledgor, Secured Party has required that Pledgor pledge the Pledged
Owner's Shares (as hereinafter defined) as security for the Obligations (as
hereinafter defined).
1. DEFINITIONS
(a) Capitalized terms not otherwise defined herein shall have
the meaning given to them in the Lease.
(b) The following terms shall have the indicated meanings:
"AGREEMENT" has the meaning set forth in the introductory
Paragraph of this Agreement.
"CONTRIBUTION AGREEMENT" has the meaning set forth in Recital A
of this Agreement.
"EVENT OF DEFAULT" has the meaning set forth in Section 14(a)
of this Agreement.
D-1
"INDEMNITY EVENT" has the meaning set forth in Section 2(a) of
this Agreement.
"LEASE" has the meaning set forth in Recital B of this
Agreement.
"OBLIGATIONS" has the meaning set forth in Section 2(a) of this
Agreement.
"PLEDGED OWNER'S SHARES" has the meaning set forth in Section
2(a) of this Agreement.
"PLEDGOR" has the meaning set forth in the introductory
Paragraph of this Agreement.
"PLEDGOR'S GUARANTY" has the meaning set forth in Section 3(a)
of this Agreement.
"PROPERTY" has the meaning set forth in Recital A of this
Agreement.
"SECURED PARTY" has the meaning set forth in the introductory
Paragraph of this Agreement.
"SECURITY FUND" has the meaning set forth in Section 2(a) of
this Agreement.
"TENANT" has the meaning set forth in Recital B of this
Agreement.
NOW, THEREFORE, for and in consideration of the mutual covenants
contained herein and for other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Secured Party and Pledgor
hereby agree as follows:
2. GRANT OF SECURITY INTEREST.
(a) As security for the payment and performance of all
obligations and liabilities (including, without limitation, indemnities, fees
and interest thereon) of Pledgor, Tenant or any of Pledgor's direct or
indirect subsidiaries arising under: (i) Pledgor's obligation to indemnify
Secured Party for breaches of the representations and warranties made by
Pledgor pursuant to Article 3 of the Contribution Agreement (which
obligations shall expire one (1) year from the date of the Contribution
Agreement); (ii) the Lease; (iii) the Pledgor's Guaranty pursuant to Section
3 of this Agreement and all other provisions of this Agreement; or (iv) in
connection with any agreement, instrument or extension contemplated by the
foregoing documents (collectively, the "Obligations"), Pledgor hereby
pledges, hypothecates and grants to Secured Party a first and prior security
interest in ______________ Owner's Shares (the "Pledged Owner's Shares", which
shall
D-2
include any increase or decrease in the Pledged Owners's Shares, in accordance
with the formula set forth on EXHIBIT D-1 attached hereto), together with, after
an occurrence and during the continuance of an Event of Default hereunder or if
any representation or warranty in Article 3 of the Contribution Agreement is
breached by Pledgor or proves to be false, as applicable (an "Indemnity Event"),
any and all proceeds thereof, including without limitation, any and all
dividends, income, interest and distributions earned from or attributable to the
investment or deposit of the Pledged Owner's Shares (the Pledged Owner's Shares,
together with all of the foregoing being collectively referred to herein as the
"Security Fund"). Pledgor shall have the right to pledge, as substitute
collateral, cash or other security that is acceptable to Secured Party in its
sole and absolute discretion. Prior to (x) any Event of Default under the Lease
(and after the cure or satisfaction thereof by Tenant or Pledgor, at its sole
election), (y) an Indemnity Event, or (z) an Event of Default (defined below)
all dividends, income, interest and/or distributions earned from or attributable
to the investment or deposit of the Security Fund shall be payable to Pledgor;
following an Event of Default under the Lease such amounts shall be added to and
become a part of the Security Fund and shall only be disbursed in accordance
with the terms of this Agreement. By its execution of this Agreement, Xxxxxxx
acknowledges that it has delivered the Pledged Owner's Shares to Secured Party
as required by this Agreement. The word "Obligations" is used herein in its
most comprehensive sense and includes without limitation any and all debts,
obligations and liabilities of Pledgor, Tenant or any of Pledgor's direct or
indirect subsidiaries, arising as a result of a breach of any of the
representations and warranties made by Pledgor pursuant to Article 3 of the
Contribution Agreement, the Lease or this Agreement, now or hereafter made,
incurred or created, whether voluntary or involuntary and however arising,
whether due or not due, absolute or contingent, liquidated or unliquidated,
determined or undetermined, and whether Pledgor, Tenant or any of Pledgor's
direct or indirect subsidiaries may be liable individually or jointly, or
whether recovery upon such Obligations may be or hereafter become unenforceable.
(b) If the Pledgor shall become entitled to receive or shall
receive, in connection with any of the Security Fund, any:
(i) Stock certificate, including, without limitation, any
certificate representing a stock dividend or in connection with any increase or
reduction of capital, reclassification, merger, consolidation, sale of assets,
combination of shares, stock split, spin-off or split-off;
(ii) Option, warrant, or right, whether as an addition to or
in substitution or in exchange for any of the Security Fund, or otherwise;
D-3
(iii) Dividend or distribution payable in property,
including securities issued by a person other than the issuer of any of the
Pledged Owner's Shares; or
(iv) Dividends or distributions of any sort,
then Pledgor shall accept the same as the agent of Secured Party, in trust for
Secured Party, and shall deliver them forthwith to Secured Party, in the exact
form received, with, as applicable, the Pledgor's endorsement when necessary, or
appropriate stock powers duly executed in blank by Xxxxxxx, to be held by
Secured Party, subject to the terms hereof, as part of the Security Fund.
(c) Pledgor shall execute and deliver to Secured Party such
financing and continuation statements covering the Security Fund and take such
other actions as Secured Party may from time to time require to perfect and
continue the perfection of Secured Party's security interest in the Security
Fund.
3. GUARANTY OF OBLIGATIONS.
(a) Pledgor irrevocably and unconditionally guarantees the full
and prompt payment when due of the Obligations and the due performance and
compliance with any of the terms of the Lease ("Pledgor's Guaranty").
(b) Pledgor hereby waives notice of acceptance of this Agreement
and notice of any liability to which it may apply, and waives presentment,
demand of payment, protest, notice of dishonor or nonpayment of any such
liability, suit or taking of other action by Secured Party against Pledgor or
Tenant.
(c) Pledgor's Guaranty shall not be released, modified, impaired
or otherwise affected by the following (whether or not Pledgor shall have had
notice or knowledge of the same): (i) any extension or indulgence by Secured
Party in respect to the performance of or compliance with the Obligations; (ii)
any failure, omission or inability of Secured Party to enforce any right, power
or remedy in respect to the Lease, the Contribution Agreement or this Agreement;
(iii) any amendment of the Lease or the Contribution Agreement; (iv) any receipt
of security including, without limitation, the Security Fund, or any sale,
exchange, release or subordination of security held by Secured Party with
respect to the Obligations; (v) any release from any liability of any person
liable under the terms of the Lease, the Contribution Agreement or this
Agreement or any other guarantor; (vi) any limitation or impairment of Secured
Party's remedies against Tenant or any other party liable under the terms of the
Lease, the Contribution Agreement or this Agreement; (vii) any action or
inaction of Secured Party with respect to the Lease, the Contribution Agreement
or this Agreement; (viii) any change in the name or identity of Tenant or any
other person or entity referred to in this Agreement; (ix) the invalidity or
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unenforceability of the Lease or the Contribution Agreement; or (x) the death or
incapacity of Tenant or any other person or entity referred to in this
Agreement.
(d) If all or any portion of the Obligations of Pledgor as
described in Section 3(a) of this Agreement are paid or performed, the
responsibilities of Pledgor pursuant to Pledgor's Guaranty shall continue and
remain in full force and effect in the event that all or any part of such
payment(s) or performance(s) is avoided or recovered directly or indirectly from
Secured Party as a preference, fraudulent transfer or otherwise, irrespective of
payment in full of all sums due pursuant to such obligations.
(e) The liability of Pledgor pursuant to Pledgor's Guaranty is
not conditioned or contingent upon the genuineness, validity, regularity or
enforceability of the Lease or the Contribution Agreement or the pursuit by
Secured Party of any remedies which it now has or may hereafter have with
respect thereto, at law, in equity or otherwise, and Pledgor hereby waives any
and all benefits and defenses that it may have to the contrary and agrees that
by doing so Pledgor shall be liable even if Xxxxxx had no liability at the time
of the execution of the Lease or thereafter ceases to be liable. Xxxxxxx
further agrees that by doing so Xxxxxxx's liability may be larger in amount and
more burdensome than that of Tenant, notwithstanding any benefits or defenses
that Pledgor may have to the contrary. Pledgor agrees that its liability
hereunder shall continue and shall not be limited or affected in any way by an
impairment or any diminution in loss of value in any security or collateral for
the Lease (including, but not limited to the Security Fund, the leased premises
or any personal property or fixtures thereon), whether caused by hazardous
substance or otherwise, or Secured Party's failure to perfect a security
interest in the Security Fund.
(f) Pledgor hereby waives: (i) all notices to Pledgor, to
Tenant, or to any other person, including, but not limited to, the creation,
renewal, extension, assignment, modification or accrual of any of the
Obligations and enforcement of any right or remedy with respect thereto, and
notice of any other matters relating thereto; (ii) demand of payment,
presentation and protest; (iii) any right to require Secured Party to apply to
any default the Security Fund or other security it may hold under the Lease; (v)
notice of any sale of personal property security of Tenant held by Secured
Party; (vi) any and all statutes of limitations affecting Pledgor's and/or
Tenant's liability under this Agreement or the Lease, as applicable, and/or the
enforcement of this Agreement or the Lease, as applicable; and (vii) all
principles or provisions of law which conflict with the terms of this Agreement.
Xxxxxxx further agrees that Landlord may enforce Xxxxxxx's Guaranty upon the
occurrence of a default under the Lease, notwithstanding any dispute between
Secured Party and Tenant or Pledgor with respect
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to the existence of said default or the payment or performance of the
Obligations or any counterclaim, set-off or other claim which Tenant or
Pledgor may allege against Secured Party with respect thereto. Xxxxxxx also
agrees that upon the abandonment of the Property by Xxxxxx, even if accepted
by Secured Party, or the eviction of Tenant, Pledgor shall remain liable for
future payments of rent, subject to Secured Party's reasonable efforts to
mitigate damages.
(g) Pledgor hereby waives any and all benefits and defenses it
may have with respect to the right to require Landlord to: (i) proceed against
Tenant or any other guarantor of the Obligations; (ii) proceed against or
exhaust any security or collateral Secured Party may hold, including without
limitation, the Security Fund; or (iii) pursue any other right or remedy for
Pledgor's benefit; and Pledgor agrees that Secured Party may proceed against
Pledgor for the Obligations without taking any action against Tenant or any
other guarantor and without proceeding against or exhausting any security or
collateral Secured Party holds, including, without limitation, the Security
Fund. Xxxxxxx agrees that Secured Party may unqualifiedly exercise in its sole
discretion any or all rights and remedies available to it against Tenant or any
other guarantor without impairing Secured Party's rights and remedies in
enforcing Xxxxxxx's Guaranty, under which Xxxxxxx's liabilities shall remain
independent and unconditional. Xxxxxxx agrees that Secured Party's exercise of
certain of such rights or remedies may affect or eliminate Xxxxxxx's right of
subrogation or recovery against Tenant and that, as a result thereof, Pledgor
may incur a partially or totally nonreimbursable liability under Xxxxxxx's
Guaranty.
(h) Pledgor hereby agrees that Pledgor shall have no right of
subrogation or reimbursement against Tenant or any right of contribution against
any other guarantor unless and until all rentals and all other sums due under
the Lease have been paid in full and all of the Obligations have been satisfied
and waives any benefits or defenses that Pledgor may have to the contrary.
Pledgor further agrees that, to the extent of the waiver of Xxxxxxx's rights of
subrogation, reimbursement and contribution as set forth herein is found by a
court of competent jurisdiction to be void or voidable for any reason, any
rights of subrogation or reimbursement Pledgor may have against Tenant shall be
junior and subordinate to any rights Secured Party may have against Tenant, and
any rights of contribution Pledgor may have against any other guarantor shall be
junior and subordinate to any rights Secured Party may have against such other
guarantor. Xxxxxxx also agrees that Xxxxxxx's Guaranty is in addition to the
guaranty of any other guarantor and any and all of Pledgor's other guarantees of
Tenant's obligations or liabilities to Secured Party and that this Guaranty
shall in no way limit or lessen any other liability, however arising, that
Pledgor may have for the payment of any other indebtedness of Tenant to Secured
Party.
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(i) To the extent any dispute exists at any time (whether or not
this Agreement or the Lease shall have previously terminated) between or among
Tenant and/or any other guarantor as to any rights to subrogation,
reimbursement, contribution or otherwise, Xxxxxxx agrees to indemnify, defend
and hold Secured Party harmless from and against any loss, damage, claim,
demand, cost or any other liability (including, without limitation, reasonable
attorneys' fees and costs) Secured Party may suffer as a result of such dispute.
(j) The obligations of Pledgor under Xxxxxxx's Guaranty shall
not be altered, limited or affected by any case, voluntary or involuntary,
involving the bankruptcy, insolvency, receivership, reorganization,
liquidation or arrangement of Tenant or by any defense which Tenant may have
by reason of the order, decree or decision of any court or administrative
body resulting from any such case. Secured Party shall have the sole right
to accept or reject any plan on behalf of Xxxxxxx proposed in such case and
to take any other action which Pledgor would be entitled to take, including,
without limitation, the decision to file or not file a claim. Pledgor
acknowledges and agrees that any payment which accrues with respect to
Tenant's obligations under the Lease (including, without limitation, the
payment of rent) after the commencement of any such proceeding (or, if any
such payment ceases to accrue by operation of law by reason of the
commencement of said proceeding, such payment as would have accrued if said
proceedings had not been commenced) shall be included in the Obligations
because it is the intention of the parties that said Obligations be
determined without regard to any rule or law or order which may relieve
Tenant of any of its obligations under the Lease. Pledgor hereby permits any
trustee in bankruptcy, receiver, debtor-in-possession, assignee for the
benefit of creditors or similar person to pay Secured Party, or allow the
claim of Secured Party in respect of, any such payment accruing after the
date on which such proceeding is commenced. Pledgor assigns to Secured Party
Xxxxxxx's right to receive any payments from any trustee in bankruptcy,
receiver, debtor-in-possession, assignee for the benefit of creditors or
similar person by way of dividend, adequate protection payment or otherwise.
4. CONTINUING AGREEMENT; REVOCATION; OBLIGATION UNDER OTHER
AGREEMENTS. This is a continuing agreement and all rights, powers and remedies
hereunder shall apply to all past, present and future obligations of Tenant or
Pledgor to Secured Party under the Lease or the Contribution Agreement. This
Agreement shall not terminate except in accordance with its terms or Secured
Party's written release of Pledgor from its Obligations under this Agreement.
5. OBLIGATIONS INDEPENDENT; SEPARATE ACTIONS; WAIVER OF STATUTE OF
LIMITATIONS; REINSTATEMENT OF LIABILITY. The Obligations hereunder are
independent of the obligations of Tenant and Pledgor (including, without
limitation, those
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obligations made pursuant to the Contribution Agreement), and a separate
action or actions may be brought and prosecuted against Pledgor hereunder
whether action is brought against Xxxxxx, Pledgor (under the Contribution
Agreement), or any other person, or whether Tenant or any other person is
joined in any such action or actions. Pledgor acknowledges that there are no
conditions precedent to the effectiveness of this Agreement, and that this
Agreement is in full force and effect and is binding on Pledgor as of the
date written below, regardless of whether Secured Party obtains additional
collateral or any guaranties from others or takes any other action
contemplated by Xxxxxxx. Pledgor waives the benefit of any statute of
limitations affecting Pledgor's liability hereunder or the enforcement
thereof, and Xxxxxxx agrees that any payment of any Obligations or other act
which shall toll any statute of limitations applicable thereto shall
similarly operate to toll such statute of limitations applicable to Pledgor's
liability under this Agreement. The liability of Pledgor under this
Agreement shall be reinstated and revived and the rights of Secured Party
shall continue if and to the extent for any reason any amount at any time
paid on account of the Obligations is rescinded or must be otherwise restored
by Secured Party, whether as a result of any proceedings in bankruptcy,
insolvency, reorganization or otherwise, all as though such amount had not
been paid. The determination as to whether any amount so paid must be
rescinded or restored shall be made by Secured Party in its sole discretion;
provided, however, that if Secured Party chooses to contest any such matter
at the request of Xxxxxxx, Xxxxxxx agrees to indemnify and hold Secured Party
harmless from and against all costs and expenses, including reasonable
attorneys' fees, expended or incurred by Secured Party in connection
therewith, including without limitation, in any litigation with respect
thereto.
6. REPRESENTATIONS AND WARRANTIES.
(a) Pledgor represents and warrants to Secured Party that:
(i) Pledgor is the owner, directly or indirectly, and has possession or control
of the Pledged Owner's Shares; (ii) Pledgor has the right to pledge the Pledged
Owner's Shares; (iii) the Pledged Owner's Shares are genuine, free from liens,
adverse claims, setoffs, default, prepayment, defenses and conditions precedent
of any kind or character, except as previously disclosed to Secured Party in
writing by Xxxxxxx; (iv) specifically with respect to Pledged Owner's Shares
consisting of investment securities, instruments, chattel paper, documents,
contracts, insurance policies or any like property, all persons appearing to be
obligated thereon have authority and capacity to contract and are bound as they
appear to be, and the same comply with applicable laws concerning form, content
and manner of preparation and execution; (v) all statements contained herein
and, where applicable, in the Pledged Owner's Shares are true and complete; and
(vi) no financing statement covering any
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of the Pledged Owner's Shares and naming any secured party other than Secured
Party, is on file in any public office.
(b) Pledgor further represents and warrants to Secured Party
that with respect to the Pledged Owner's Shares securing Tenant's obligations
under the Lease pursuant to this Agreement: (i) such Pledged Owner's Shares are
so pledged at Tenant's request; (ii) Secured Party has made no representation to
Pledgor as to the creditworthiness of Tenant; and (iii) Pledgor has established
adequate means of obtaining from Tenant on a continuing basis financial and
other information pertaining to Tenant's financial condition. Pledgor agrees to
keep adequately informed by such means of any facts, events or circumstances
which might in any way affect Xxxxxxx's risks hereunder, and Xxxxxxx further
agrees that Secured Party shall have no obligation to disclose to Pledgor any
information or material about Tenant which is acquired by Secured Party in any
manner. Pledgor further warrants and represents that it has reviewed and
approved copies of the Lease and is fully informed of the remedies that Secured
Party may pursue under the Lease or at law or in equity, with or without notice
to Pledgor, in the event of a default under the Lease.
(c) Pledgor understands that but for Xxxxxxx's pledge of the
Pledged Owner's Shares and the other agreements contained herein, Secured Party
would not enter into the Lease with Tenant or the Contribution Agreement and
that the Security Fund pledged pursuant to this Agreement will serve as
collateral for the Lease and the Contribution Agreement on the terms and
conditions of this Agreement.
7. COVENANTS OF PLEDGOR.
(a) XXXXXXX AGREES IN GENERAL: (i) to indemnify Secured Party
against all losses, claims, demands, liabilities and expenses of every kind
caused by property subject hereto; (ii) to pay all costs and expenses, including
reasonable attorneys' fees, incurred by Secured Party any time after the
occurrence of an Event of Default under the Lease or as such costs and expenses
relate to a breach by Pledgor of any representation or warranty contained in
Article 3 of the Contribution Agreement, in the realization, enforcement and
exercise of its rights, powers and remedies hereunder; (iii) to permit Secured
Party to exercise its powers; (iv) to execute and deliver such documents as
Secured Party deems necessary to create, perfect and continue the security
interests contemplated hereby; and (v) not to change its chief place of business
or the place where Pledgor keeps any records concerning the Pledged Owner's
Shares without first giving Secured Party written notice of the address to which
Pledgor is moving same.
(b) XXXXXXX AGREES WITH REGARD TO THE SECURITY FUND: (i) not to
permit any lien on the Security Fund except in favor of Secured Party; (ii) not
to withdraw any funds from any
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deposit account pledged to Secured Party hereunder without Secured Party's
prior written consent; (iii) not to sell, hypothecate or otherwise dispose of
any of the Pledged Owner's Shares or any interest therein, without the prior
written consent of Secured Party; (iv) to keep, in accordance with generally
accepted accounting principles, complete and accurate records regarding all
Pledged Owner's Shares and to permit Secured Party to inspect the same at any
reasonable time; (v) if requested by Secured Party following an Event of
Default under the Lease or an Indemnity Event, to receive and use reasonable
diligence to collect proceeds from the Pledged Owner's Shares, in trust and
as part of the Security Fund to be held in accordance with Section 2(a)
above; (vi) not to commingle Pledged Owner's Shares with other property;
(vii) to provide any service and do any other acts or things necessary to
keep the Pledged Owner's Shares free and clear of all defenses, rights of
offset and counterclaims; and (viii) if the Pledged Owner's Shares consists
of securities and so long as no Event of Default or Indemnity Event exists,
to vote said securities and to give consents, waivers and ratifications with
respect thereto, provided that no vote shall be cast or consent, waiver or
ratification given or action taken which would impair Secured Party's
interest in the Security Fund or be inconsistent with or violate any
provisions of this Agreement.
8. POWERS OF SECURED PARTY. Pledgor appoints Secured Party its true
attorney in fact to perform any of the following powers, which are coupled with
an interest and are irrevocable until this Agreement has been terminated
pursuant to its terms and may be exercised from time to time by Secured Party's
officers and employees: (a) to perform any obligation of Pledgor hereunder in
Pledgor's name or otherwise; (b) to notify any person obligated on any security,
instrument or other document subject to this Agreement of Secured Party's rights
hereunder; (c) to collect by legal proceedings or otherwise all dividends,
interest, principal or other sums now or hereafter payable upon or on account of
the Security Fund; (d) to enter into any extension, reorganization, deposit,
merger or consolidation agreement, or any other agreement relating to or
affecting the Security Fund and in connection therewith to deposit or surrender
control of the Security Fund to accept other property in exchange for the
Security Fund, and to do and perform such acts and things as Secured Party may
deem proper, with any money or property received in exchange for the Security
Fund at Secured Party's option, to be applied to the Obligations or held by
Secured Party under this Agreement; (e) to make any compromise or settlement
Secured Party deems desirable or proper in respect of the Security Fund; (f) to
insure, process and preserve the Security Fund; (g) to exercise all rights,
powers and remedies which Pledgor would have, but for this Agreement, under all
the Pledged Owner's Shares subject to this Agreement; (h) to do all acts and
things and execute all documents in the name of Pledgor or otherwise that are
deemed by Secured Party as necessary, proper or convenient in connection with
the preservation,
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perfection or enforcement of its rights hereunder; and (i) to execute and
file in Xxxxxxx's name any financing statements and amendments thereto
required to perfect Secured Party's security interest hereunder; provided,
however, that until the occurrence and only during the continuation of an
Event of Default or an Indemnity Event shall Secured Party have the right to
exercise the power of attorney for the purposes described in paragraphs (a),
(c), (d), (e), (f), (g), or (h). If an Event of Default or Indemnity Event
has occurred and is continuing, any or all of the Security Fund consisting of
securities may be registered, without notice, in the name of Secured Party or
its nominee, and thereafter Secured Party or its nominee may exercise,
without notice, all voting and partnership rights at any meeting of the
partners of the issuer thereof, any and all rights of conversion, exchange or
subscription, or any other rights, privileges or options pertaining to any
Pledged Owner's Shares all as if it were the absolute owner thereof. The
foregoing shall include, without limitation, the right of Secured Party or
its nominee to exchange, at its discretion, any and all Pledged Owner's
Shares upon the merger, consolidation, reorganization, recapitalization or
other readjustment of the issuer thereof, or upon the exercise by the issuer
thereof or Secured Party of any right, privilege or option pertaining to any
Pledged Owner's Shares and in connection therewith, the right to deposit and
deliver any and all of the Pledged Owner's Shares with any committee,
depository, transfer agent, registrar or other designated agent upon such
terms and conditions as Secured Party may determine. All of the foregoing
rights, privileges or options may be exercised without liability except to
account for property actually received by Secured Party. Secured Party shall
have no duty to exercise any of the foregoing, or any other rights,
privileges or options with respect to the Pledged Owner's Shares and shall
not be responsible for any failure to do so or delay in so doing.
9. CASH COLLATERAL ACCOUNT. Any money received by Secured Party in
respect of the Security Fund will be retained in an interest bearing cash
collateral account and the same shall, for all purposes, be deemed part of the
Security Fund hereunder.
10. SECURED PARTY'S CARE AND DELIVERY OF PLEDGED OWNER'S SHARES.
Secured Party's obligation with respect to the Security Fund in its possession
shall be strictly limited to the duty to exercise reasonable care in the custody
and preservation of the Security Fund, and such duty shall not include any
obligation to ascertain or to initiate any action with respect to or to inform
Pledgor of maturity dates, conversion, call or exchange rights, or offers to
purchase the Pledged Owner's Shares or any similar matters, notwithstanding
Secured Party's knowledge of the same. Secured Party shall have no duty to take
any steps necessary to preserve the rights of Pledgor against prior parties, or
to initiate any action to protect against the possibility of a decline in the
market value of the Pledged Owner's Shares. Secured Party shall not be
obligated to take any
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actions with respect to the Pledged Owner's Shares requested by Pledgor
unless such request is made in writing and Secured Party determines, in its
sole discretion, that the requested action would not unreasonably jeopardize
the value of the Pledged Owner's Shares as security for the Obligations.
Secured Party may at any time deliver the Security Fund, or any part thereof,
to Pledgor, and the receipt thereof by Pledgor shall be a complete and full
acquittance for the Security Fund so delivered, and Secured Party shall
thereafter be discharged from any liability or responsibility therefor.
11. PLEDGOR'S WAIVERS.
(a) Pledgor waives any right to require Secured Party to:
(i) proceed against any person, including Tenant or Pledgor under the
Contribution Agreement; (ii) proceed against or exhaust any security held from
Tenant; (iii) give notice of the terms, time and place of any public or private
sale of personal property security held from Tenant or any other person or
otherwise comply with any other provisions of Section 9-504 Uniform Commercial
Code; (iv) pursue any other remedy in Secured Party's power; or (v) make any
presentments or demands for performance, or give any notices of nonperformance,
protests, notices of protest or notices of dishonor in connection with any
obligations or evidences of indebtedness held by Secured Party as security or
which constitute in whole or in part the Obligations secured hereunder, or in
connection with the creation of new or additional Obligations.
(b) Pledgor waives any defense arising by reason of: (i) any
disability or other defense of Tenant, Pledgor or any other person; (ii) the
cessation or limitation from any cause whatsoever, other than payment in full,
of the Obligations of Tenant, Pledgor or any other person; (iii) any lack of
authority of any officer, director, partner, agent or any other person acting or
purporting to act on behalf of Tenant or Pledgor which is a corporation,
partnership or other type of entity, or any defect in the formation of Tenant or
Pledgor; (iv) any act or omission by Secured Party which directly or indirectly
results in or aids the discharge of Tenant or Pledgor or any Obligations by
operation of law or otherwise; or (v) any modification of the Obligations, in
any form whatsoever, including any modification made after revocation hereof to
any Obligations incurred prior to such revocation, and including, without
limitation, the renewal, extension, acceleration or other change in time for
payment of the Obligations, or other change in the terms of the Obligations, or
any part thereof. Until all Obligations shall have been paid in full, Pledgor
shall have no right of subrogation, and Pledgor waives any defense Pledgor may
have based upon an election of remedies by Secured Party which destroys
Xxxxxxx's subrogation rights or Xxxxxxx's rights to proceed against Tenant for
reimbursement, including without limitation, any loss of rights Pledgor may
suffer by reason of any rights, powers or remedies of Tenant in connection with
any anti-deficiency laws or any other
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laws limiting, qualifying or discharging Xxxxxx's Obligations. Until all
Obligations of Tenant to Secured Party shall have been paid in full, Pledgor
further waives any right to enforce any remedy which Secured Party now has or
may hereafter have against Tenant or any other person, and waives any benefit
of, or any right to participate in, any security whatsoever now or hereafter
held by Secured Party.
12. AUTHORIZATIONS TO SECURED PARTY. Pledgor authorizes Secured
Party either before or after revocation hereof, without notice or demand and
without affecting Pledgor's liability hereunder, from time to time to: (a)
alter, compromise, renew, extend, accelerate or otherwise change the time for
payment of, or otherwise change the terms of the Obligations or any part
thereof; (b) take and hold security, other than the Pledged Owner's Shares, for
the payment of the Obligations or any part thereof and exchange, enforce, waive
and release the Pledged Owner's Shares, or any part thereof, or any such other
security; (c) apply the Pledged Owner's Shares or any other security and direct
the order or manner of sale thereof, including without limitation, a
non-judicial sale permitted by the terms of this Agreement, as Secured Party in
its discretion may determine; (d) release or substitute any one or more of the
endorsers or guarantors of the Obligations, or any part thereof, or any other
parties thereto; and (e) apply payments received by Secured Party from Tenant or
Pledgor to any Obligations of Tenant or Pledgor to Secured Party, in such order
as Secured Party shall determine in its sole discretion, whether or not any such
Obligations is covered by this Agreement, and Pledgor hereby waives any
provision of law regarding application of payments which specifies otherwise.
13. PAYMENT OF TAXES, CHARGES, LIENS AND ASSESSMENTS. Xxxxxxx agrees
to pay, prior to delinquency, all taxes, charges, liens and assessments against
the Security Fund, and upon the failure of Pledgor to do so, Secured Party at
its option may pay any of them and shall be the sole judge of the legality or
validity thereof and the amount necessary to discharge the same. Any such
payments made by Secured Party shall be obligations of Pledgor to Secured Party,
due and payable immediately upon demand, together with interest at a rate
determined in accordance with the provisions of Section 17 of this Agreement,
and shall be secured by the Security Fund, subject to all terms and conditions
of this Agreement.
14. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "Event of Default" under this Agreement: (a) any default in the
payment or performance of any obligation, or any defined event of default, after
any applicable cure or grace period under the Lease which has not been cured by
Pledgor within ten (10) days of the date such cure period of Tenant expired; or
(b) any representation or warranty made by Pledgor herein shall prove to be
incorrect in any material respect when made; or (c) an Indemnity Event; or
(d) Pledgor
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shall fail to observe or perform any obligation or agreement contained herein
after Secured Party has provided written notice describing such failure and
Pledgor has failed within thirty (30) days of receipt of such notice to cure
such failure, provided if such cure cannot be completed within such thirty (30)
day period, then such cure period shall be extended for so long as Pledgor is
diligently prosecuting such cure to completion up to a maximum of ninety (90)
days.
15. REMEDIES. Upon the occurrence of any Event of Default, Secured
Party shall have and may exercise without demand any and all rights, powers,
privileges and remedies granted to a secured party upon default under the
Uniform Commercial Code or otherwise provided to Secured Party by law. All
rights, powers, privileges and remedies of Secured Party shall be cumulative.
Secured Party may exercise its right of setoff with respect to the Obligations
in the same manner as if the Obligations were unsecured. No delay, failure or
discontinuance of Secured Party in exercising any right, power, privilege or
remedy hereunder shall affect or operate as a waiver of such right, power,
privilege or remedy; nor shall any single or partial exercise of any such right,
power, privilege or remedy preclude, waive or otherwise affect any other or
further exercise thereof or the exercise of any other right, power, privilege or
remedy. Any waiver, permit, consent or approval of any kind by Secured Party of
any default hereunder, or any such waiver of any provisions or conditions
hereof, must be in writing and shall be effective only to the extent set forth
in writing. While an Event of Default exists: (a) Secured Party may, at any
time and at Secured Party's sole option, liquidate any time deposits pledged to
Secured Party hereunder, whether or not said time deposits have matured and
notwithstanding the fact that such liquidation may give rise to penalties for
early withdrawal of funds; (b) Secured Party may appropriate the Security Fund
and apply all proceeds toward repayment of the Obligations in such order as
Secured Party may from time to time elect or, at Secured Party's sole option,
place any proceeds in a cash collateral account; and (c) at Secured Party's
request, Pledgor will assemble and deliver all Pledged Owner's Shares not
already in the possession of Secured Party, and books and records pertaining
thereto, to Secured Party at a reasonably convenient place designated by Secured
Party. It is agreed that public or private sales, for cash or on credit, to a
wholesaler or retailer or investor, or user of property of the types subject to
this Agreement, or public auction, are all commercially reasonable since
differences in the sales prices generally realized in the different kinds of
sales are ordinarily offset by the differences in the costs and credit risks of
such sales. For any part of the Security Fund consisting of securities, Secured
Party shall be under no obligation to delay a sale of any portion thereof for
the period of time necessary to permit the issuer thereof to register such
securities for public sale under any applicable state or federal law, even if
the issuer thereof would agree to do so.
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16. DISPOSITION OF PLEDGED OWNER'S SHARES. Secured Party shall not
transfer all or any part of the Pledged Owner's Shares or Security Fund except
in connection with the exercise of remedies as provided in Section 15 above.
Any proceeds of any disposition of any of the Pledged Owner's Shares or any part
thereof, shall be applied by Secured Party to the payment of expenses incurred
by Secured Party in connection with the foregoing, including reasonable
attorneys' fees, and the balance of such proceeds shall be applied by Secured
Party toward the payment of the Obligations in such order of application as
Secured Party may from time to time elect.
17. COSTS, EXPENSES AND ATTORNEYS' FEES. Pledgor shall pay to
Secured Party immediately upon demand the full amount of all payments, advances,
charges, costs and expenses, including reasonable attorneys' fees incurred by
Secured Party after the occurrence and during the continuance of any Event of
Default in exercising any right, power, privilege or remedy conferred by this
Agreement or in the enforcement thereof, including any of the foregoing incurred
in connection with any bankruptcy proceeding relating to Pledgor or the
valuation of the Pledged Owner's Shares including without limitation, the
seeking of relief from or modification of the automatic stay or the negotiation
and drafting of a cash collateral order. All of the foregoing shall be paid to
Secured Party by Pledgor with interest at a rate per annum equal to the lesser
of ten percent (10%) or the maximum rate permitted by law.
18. GOVERNING LAW; SUCCESSORS, ASSIGNS. This Agreement shall be
governed by and construed in accordance with the laws of the state in which the
Property is located, and shall be binding upon and inure to the benefit of the
heirs, executors, administrators, legal representatives, successors and assigns
of the parties.
19. SEVERABILITY OF PROVISIONS. If any provision of this Agreement
shall be held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without
D-15
invalidating the remainder of such provision or any remaining provisions of
this Agreement.
20. NON-RECOURSE. The obligations of Pledgor hereunder with respect
to the Lease and the obligations of Tenant thereunder are specifically
non-recourse to Pledgor except to the extent of the Pledged Owner's Shares. In
no event shall Pledgor or any assets of Pledgor or any general partner or
affiliate of Pledgor be liable for a default by Tenant under the Lease except
to the extent of the Pledged Owner's Shares then pledged to Secured Party.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first written above.
PLEDGOR
________________________________
Name:
________________________________
Name:
SECURED PARTY
GOLF TRUST OF AMERICA, L.P.,
a Delaware limited partnership
By: ____________________________
Name:: ____________________
Its: ______________________
D-16
EXHIBIT D-1
SCHEDULE OF ADJUSTMENTS IN THE NUMBER OF PLEDGED OWNER'S SHARES
The Pledged Owner's Shares shall be adjusted as follows:
1. INCREASE OF PLEDGED OWNER'S SHARES. If Pledgor elects to receive
additional Owner's Shares as described in the Contribution Agreement, then the
Pledged Owner's Shares shall be increased such that the value of the Pledged
Owner's Shares held by Secured Party in the Security Fund shall equal the sum of
(i) the value of the initial Pledged Owner's Shares (valued as the date of the
Pledge Agreement), and (ii) fifteen percent (15%) of the Contingent Purchase
Price (such shares valued as of the date of the pledge). This adjustment to the
number of Pledged Owner's Shares shall occur simultaneously with the
circumstances triggering such an adjustment as described above, without the
necessity for any further action on the part of Pledgor or Secured Party.
Pledgor shall deliver to Secured Party certificates evidencing such additional
Pledged Owner's Shares immediately upon the occurrence of such triggering
circumstances.
2. RELEASE OF PLEDGED OWNER'S SHARES. The Pledged Owner's Shares
shall be released and subtracted from the Security Fund in accordance with the
following schedule:
(a). One-third (1/3) of the Pledged Owner's Shares (or an
equivalent dollar amount if held in cash or other securities) at such time as
the Net Operating Income with respect to the Property shall have been, for each
of the two (2) prior Fiscal Years, at least one hundred twenty percent (120%) of
the Rent payable by Tenant for each such Fiscal Year.
(b). An aggregate of two-thirds (2/3) of the Pledged Owner's
Shares (or an equivalent dollar amount if held in cash or other securities) at
such time as the Net Operating Income with respect to the Property shall have
been, for each of the two (2) prior Fiscal Years, at least one hundred and
thirty percent (130%) of the Rent payable by Tenant for each such Fiscal Year
(based on the Rent adjusted in accordance with the terms of the Lease, if
applicable).
(c). All of the Pledged Owner's Shares (or an equivalent
dollar amount if held in cash or other securities) provided that the Net
Operating Income with respect to the Property shall have been, for each of the
two (2) prior Fiscal Years, one hundred and forty percent (140%) of the Rent
payable by Tenant for each such Fiscal Year (based on the Rent adjusted in
accordance with the terms of the Lease, if applicable).
This adjustment to the number of Pledged Owner's Shares shall occur
simultaneously with the circumstances triggering such an adjustment as described
above, without the necessity for any further action on the part of Pledgor or
Secured Party.
D-1-1
EXHIBIT E
ADJUSTMENTS TO CALCULATION OF GROSS GOLF REVENUE
FOR PRIVATE CLUBS
E-1
EXHIBIT F
CALCULATION
F-1
