GROUND LEASE AGREEMENT
BY AND BETWEEN
CAROLINA CAPITAL VENTURES, LTD.,
AS LANDLORD
AND
RALEIGH FAMILY GOLF CENTERS, INC.,
AS TENANT
----------------------------------
MARCH _____, 1997
TABLE OF CONTENTS
Page
ARTICLE I................................................................1
Section 1.01. Leased Premises...............................1
Section 1.02. Initial Term..................................1
Section 1.03. Use...........................................1
Section 1.04. Renewal Term..................................1
ARTICLE II...............................................................2
Section 2.01. ..............................................2
Base Rent.......................................................2
Section 2.02. Payment of Rent...............................3
Section 2.03 Base Rent During the Option Period............3
ARTICLE III..............................................................4
Section 3.01. Impositions...................................4
Section 3.02. Payment of Impositions........................5
Section 3.03. Payment to be Made Direct.....................5
Section 3.04. Payment of Bills..............................5
ARTICLE IV...............................................................6
Section 4.01. Casualty Insurance............................6
Section 4.02. Liability Insurance...........................6
Section 4.03. Evidence of Insurance.........................6
Section 4.04. Right of Landlord to Obtain Insurance.........6
Section 4.05. Indemnification...............................6
ARTICLE V................................................................7
Section 5.01. Damage to Improvements........................7
ARTICLE VI...............................................................7
Section 6.01. Alterations...................................7
Section 6.02. Right to Demolish.............................7
Section 6.03. Rights to Continue............................7
Section 6.04. Liens; End of Term............................7
ARTICLE VII..............................................................8
Section 7.01. Sublease and Assignment.......................8
Section 7.02. Liens.........................................8
Section 7.03. Estoppel Certificates.........................8
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ARTICLE VIII.............................................................9
Section 8.01. Right of Refusal..............................9
ARTICLE IX...............................................................9
Section 9.01. General Defaults by Tenant....................9
Section 9.02. Specific Defaults by Tenant..................11
ARTICLE X...............................................................12
Section 10.01. Notice Parties...............................12
Section 10.02. Right of Certain Notice Parties to
Obtain New Lease..........................12
ARTICLE XI..............................................................13
Section 11.01. Condemnation.................................13
ARTICLE XII.............................................................13
Section 12.01. Peaceful Enjoyment...........................13
Section 12.02. Title to Leased Premises.....................13
ARTICLE XIII............................................................14
Section 13.01. Landlord's Mortgagee.........................14
ARTICLE XIV.............................................................14
Section 14.01. Surrender....................................14
ARTICLE XV..............................................................15
Section 15.01. Notices......................................15
ARTICLE XVI.............................................................15
Section 16.01. Entire Agreement.............................15
ARTICLE XVII............................................................16
Section 17.01. Landlord Default.............................16
ARTICLE XVIII...........................................................16
Section 18.01. Actions Requiring Consent of
Tenant's Mortgagee........................16
ARTICLE XIX.............................................................16
Section 19.01. Governing Law................................16
ARTICLE XX..............................................................16
Section 20.01. Compliance with Laws.........................16
Section 20.02. Hazardous Materials..........................17
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ARTICLE XXI.............................................................17
Section 21.01. Attorney's Fees..............................17
ARTICLE XXII............................................................17
Section 22.01. Recording of Lease...........................17
ARTICLE XXIII...........................................................18
Section 23.01. Brokers......................................18
ARTICLE XXIV............................................................18
Section 24.01. Mediation....................................18
ARTICLE XXV.............................................................18
Section 25.01. Guaranty.....................................18
Attachments:
EXHIBIT A: Leased Premises
EXHIBIT B: Permitted Title Exceptions
EXHIBIT C: Guaranty Agreement
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GROUND LEASE AGREEMENT
THIS GROUND LEASE AGREEMENT (this "Lease") is made and
entered into as of the ____ day of March, 1997 (the "Effective Date"), by and
between CAROLINA CAPITAL VENTURES, LTD., a North Carolina corporation
(hereinafter called "Landlord"), and RALEIGH FAMILY GOLF CENTERS, INC., a
Delaware corporation (hereinafter called "Tenant"), as follows:
ARTICLE I
SECTION 1.01. LEASED PREMISES. Subject to the terms,
provisions and conditions hereinafter set forth, and in consideration of the
covenants of payment and performance stipulated herein, Landlord has leased,
demised and let and by these presents does hereby lease, demise and let unto
Tenant, for the uses described in Section 1.04, all those certain premises
situated on Capital Boulevard in Wake County, North Carolina, more
particularly described on Exhibit A attached hereto and for all purposes made
a part hereof (the "Leased Premises").
TO HAVE AND TO HOLD the Leased Premises, together with any
rights, easements, privileges, both subterranean and vertical, and the
appurtenances and improvements thereunto attaching or in anywise belonging,
unto Tenant, and the successors in interest and permitted assigns of Tenant,
for and during the term hereinafter set forth.
SECTION 1.02. INITIAL TERM. Unless sooner terminated under
provisions hereof, the initial term of this Lease (the "Initial Term") shall
be and continue in full force and effect commencing on the Effective Date and
continuing thereafter for, during and until 11:59 p.m. on the date that is
twenty-five (25) years after the Effective Date. The term of this Lease may be
renewed as set forth in Section 1.04.
SECTION 1.03. USE. Tenant may use the Leased Premises for
any lawful purpose.
SECTION 1.04. RENEWAL TERM. So long as Tenant is not in
default under the terms of this Lease, Tenant shall have the option to renew
this Lease for one (1) period of five (5) years (the "Option Period") to
commence at the expiration of the Initial Term. Tenant shall be deemed to have
exercised its option to renew for the Option Period automatically, without act
or notification being required on the part of Tenant, unless Tenant delivers
written notice that it will not exercise such option to Landlord at least one
hundred eighty (180) days prior to the expiration of the Initial Term. Subject
to Section 2.03, the renewal of this Lease shall be upon the same terms and
conditions as described in this Lease.
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ARTICLE II
SECTION 2.01. BASE RENT. As consideration for the use and
occupancy of, and as rental for, the Leased Premises, Tenant promises and
agrees to pay Landlord, while this Lease remains in force and effect during
the Initial Term hereof and any extension thereto (collectively, the "Term"),
and in the manner hereinafter provided, and subject to the terms, provisions,
and conditions hereinafter set forth, annual lease rentals (the "Base Rent")
in the sums specified below, which sums shall be paid in equal monthly
installments, in advance, on the first day of each calendar month during the
Term; provided, however, that if the Effective Date is other than the first
day of a calendar month or if this Lease expires or terminates on other than
the last day of a calendar month, then the installments of Base Rent for such
month or months shall be prorated and the installment or installments so
prorated shall be paid in advance. Said installments for such prorated month
or months shall be calculated by multiplying the equal monthly installment by
a fraction, the numerator of which shall be the number of days of the term
occurring during said commencement or expiration month, as the case may be,
and the denominator of which shall be the number of days in said month. "Lease
Year" means a period of one (1) year, with the first (1st) Lease Year
commencing on the Effective Date and expiring on the day immediately preceding
the first (1st) anniversary of the Effective Date and with each subsequent
Lease Year commencing upon the expiration of the prior Lease Year.
Subject to Section 2.03 hereof, the Base Rent to be paid by
Tenant shall be as follows:
(a) for each of Lease Years one (1) through five
(5), One Hundred Thousand Dollars ($100,000);
and
(b) beginning on the first day of Lease Year six
(6) and on each fifth anniversary thereafter
(the last day of Lease Year six (6) and each
fifth anniversary thereafter being referred to
herein as a "Change Date"), the rentals shall
increase by multiplying the Base Rent that is
in effect on the day immediately preceding the
applicable Change Date by a fraction, the
numerator of which is the CPI as of the date of
the increase and the denominator of which is
(i) for Lease Year six (6), the CPI as of the
Effective Date, and (ii) for each subsequent
Change Date, the CPI as of the immediately
preceding Change Date. "CPI" means the Consumer
Price Index - All Items, for
Raleigh/Durham/Chapel Hill MSA, published most
recently prior to the applicable date, or if
such is no longer published, such other index
which measures changes in the cost of living
that may be selected by Tenant and approved by
Landlord, which approval shall not be
unreasonably withheld.
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SECTION 2.02. PAYMENT OF RENT. The rentals described in
Section 2.01 and Section 2.03 shall be in addition to all other payments to be
made by Tenant as herein provided and shall be paid to Landlord without notice
or demand and without abatement, deduction or set-off, except as may otherwise
be expressly provided in this Lease. If any of the rentals described in
Section 2.01 or in Section 2.03 are not paid within five (5) days after the
same are due, such past due payments shall bear interest from and after such
five (5) day period until paid at the rate of ten percent (10%) per annum.
SECTION 2.03 BASE RENT DURING THE OPTION PERIOD.
(a) If Tenant exercises or is deemed to have exercised
Tenant's right under Section 1.04 hereof to extend the term hereof for the
Option Period, then the Base Rent payable by Tenant to Landlord hereunder
during the Option Period shall be an amount equal to the product obtained by
multiplying (x) the Fair Market Value (hereinafter defined) determined in
accordance with the provisions of this Section 2.03, by (y) ten percent (10%).
(b) If Tenant exercises or is deemed to have exercised
Tenant's rights under Section 1.04 hereof to extend the term hereof for the
Option Period, then Landlord and Tenant shall attempt through negotiation to
determine the fair market value of the Leased Premises as of the first day of
the Option Period, assuming that (i) the Leased Premises are used for the
purposes then established by Tenant, (ii) the Leased Premises are free and
clear of all leases and tenancies (including this Lease), (iii) the Leased
Premises are available for sale in the then market for comparable properties
in the vicinity of the Leased Premises, and (iv) Landlord has had a reasonable
time to locate a purchaser and that neither Landlord nor the purchaser is
under any compulsion to buy or sell, and otherwise taking into account all
relevant factors (such fair market value of the Leased Premises being referred
to herein as the "Fair Market Value."
(c) If Landlord and Tenant are unable to agree upon the Fair
Market Value on or before one hundred twenty (120) days before the first day
of the Option Period, Landlord and Tenant shall each hire one (1) independent
real estate appraiser, and such appraisers will engage a third independent
real estate appraiser (individually, an "Appraiser", and collectively, the
"Appraisers"). Each of the Appraisers shall be MAI certified and each shall be
experienced in appraising commercial property in Wake County, North Carolina.
Each of the Appraisers shall, within thirty (30) days after the date of
designation of the Appraisers, determine an appraisal as to the Fair Market
Value, and the parties hereto agree that the Fair Market Value shall be the
average of such three (3) appraisals. Landlord and Tenant shall each pay the
costs of the Appraiser selected by such party and shall share equally the cost
of the third Appraiser. The Appraisers shall not have the power to add to,
modify or change any of the provisions of this Lease.
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(d) After a determination has been made of the Fair Market
Value, the parties shall execute and deliver to each other an instrument
setting forth the Base Rent for the Option Period as hereinabove determined.
(e) If the final determination of the Fair Market Value is
not made on or before the first day of the Option Period in accordance with
the provisions of this Section 2.03, then, pending such final determination,
the Fair Market Value shall be deemed to be an amount equal to the Base
Amount. If, based upon the final determination hereunder of the Fair Market
Value, the payments made by Tenant on account of the Base Rent for the period
prior to the final determination of the Fair Market Value were less than the
Base Rent payable for such period, then Tenant, not later than the tenth
(10th) day after Landlord's demand therefor, shall pay to Landlord the amount
of such deficiency. If, based upon the final determination hereunder of the
Fair Market Value, the payments made by Tenant on account of the Base Rent for
the period prior to the final determination of the Fair Market Value were more
than the Base Rent payable for such period, then Landlord, not later than the
tenth (10th) day after Tenant's demand therefor, shall pay to Tenant the
amount of such surplus.
ARTICLE III
SECTION 3.01. IMPOSITIONS. The term "Impositions" shall mean
all taxes, assessments, and other charges by public authority, general and
special, ordinary and extraordinary, foreseen and unforeseen, of any kind and
nature whatsoever, which shall or may during the Term be assessed, levied,
charged, confirmed or imposed by public authority upon or accrue or become due
or payable out of or on account of or become a lien on the Leased Premises,
but shall not include any income taxes, capital levy, estate, succession,
inheritance or transfer taxes or similar tax of Landlord, or any corporate
franchise taxes imposed upon any owner of the fee of the Leased Premises, or
any income, profits or revenue tax, assessment or charge imposed upon the rent
or other benefit received by Landlord under this Lease, by any municipality,
county or state, the United States of America or any governmental body.
SECTION 3.02. PAYMENT OF IMPOSITIONS. As additional rental
during the Term, Tenant will pay or cause to be paid, as and when the same
shall become due, all Impositions, except that:
(i) All Impositions for the fiscal year or
tax year in which the Initial Term of
this Lease commences, as well as during
the year in which the Term of this
Lease expires or earlier terminates,
shall be apportioned so that the Tenant
shall pay its proportionate share of
the Impositions which are payable in
the year in which the Initial Term
commences and in the year in
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which the Term expires or earlier
terminates, and Landlord shall likewise
pay its proportionate share.
(ii) Where any Imposition is permitted by
law to be paid in installments, Tenant
may pay such Imposition in installments
as and when such installments become
due; provided, however, that the amount
of all installments of any such
Impositions which are to become due and
payable after the expiration or earlier
termination of the Term shall not be
apportioned (except as provided in
subsection (i) hereof).
(iii) The provisions of this Section 3.02
shall never be construed as imposing
any liability upon Tenant for the
payment of any taxes, assessments or
other charges imposed by city, county,
state or federal laws or ordinances or
any other laws or ordinances, upon the
income of Landlord, or upon the
transfer or passing of any interest
owned by Landlord in the Leased
Premises, generally known as income,
inheritance, estate, succession or
transfer taxes, nor shall Tenant be
obligated to pay any withholding,
profit or revenue tax or charge levied
upon the rents payable to Landlord
under the terms of this Lease, or any
corporate franchise tax or corporate
license fee which may be levied upon or
against any successor corporate
Landlord. The payment of all such
taxes, assessments and other charges
referred to in this Section 3.02(iii)
shall be the sole liability of
Landlord.
Landlord represents and warrants to Tenant that the Leased
Premises constitute a separate and distinct tax lot for real estate tax
purposes.
SECTION 3.03. PAYMENT TO BE MADE DIRECT. Tenant shall pay
all such Impositions to be paid by it directly to the taxing authority.
SECTION 3.04. PAYMENT OF BILLS. Tenant shall fully and
promptly pay all gas, heat, light, power, telephone, water, sewer and drainage
charges and other charges by public utilities of every kind for services
furnished to the improvements located on the Leased Premises for Tenant's use
during the term of this Lease.
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ARTICLE IV
SECTION 4.01. CASUALTY INSURANCE. During the Term, Tenant
will, at its sole cost and expense, keep and maintain an "all risk" casualty
insurance policy on the building and other improvements located on the Leased
Premises or any replacements or substitutions therefor in amounts sufficient
to provide coverage for the full replacement cost value of the same. Such full
replacement cost value shall be determined from time to time (but not more
frequently than once in any forty-eight calendar months) at the request of
Landlord, by one of the insurers or, at the option of Tenant, by an appraiser,
engineer, architect or contractor approved in writing by Landlord (which
approval shall not be unreasonably withheld) and paid by Tenant.
Such insurance shall be secured and maintained in a company
or companies selected by Tenant and shall be carried in the name of both
Landlord and Tenant, as their respective interests may appear, but shall
expressly provide that any loss thereunder may be adjusted with Tenant alone,
and shall be payable as set forth in Article V.
SECTION 4.02. LIABILITY INSURANCE. During the Term, Tenant
agrees to cause to be secured and maintained in force, at Tenant's sole cost
and expense, with companies selected by Tenant, commercial general liability
insurance with limits (which may be effected through primary and/or excess
coverage) of not less than $1,000,000.00 with respect to bodily injury or
death to any number of persons in any one accident nor less than $3,000,000.00
with respect to property damage in any one accident. Landlord shall be named
as an additional insured under such policy and the liability insurance
required under this Section 4.02 shall be primary.
SECTION 4.03. EVIDENCE OF INSURANCE. Tenant shall deliver to
Landlord duly executed certificates of insurance reflecting Tenant's
maintenance of the insurance required under Sections 4.01 and 4.02 of this
Lease. The insurance required under such sections shall be cancelable only
upon at least sixty (60) days prior written notice to Landlord.
SECTION 4.04. RIGHT OF LANDLORD TO OBTAIN INSURANCE. In the
event of the failure of Tenant to maintain insurance required by this Article
IV, Landlord may give notice of such failure to Tenant, and if such failure
continues for ten (10) days after such notice, Landlord may at its election
(but shall not be obligated to) procure such insurance as may be necessary to
comply with the above requirements, and Tenant agrees to repay the cost of
same to Landlord on demand, with interest thereon at ten percent (10%) per
annum until paid.
SECTION 4.05. INDEMNIFICATION. Except as otherwise expressly
provided in this Lease to the contrary, Landlord shall not be liable to
Tenant, or to Tenant's agents, servants or employees or third parties for any
damage to person or property caused by the negligence or intentional torts of
Tenant, or its agents, servants or employees, and Tenant agrees to indemnify
and hold Landlord harmless from all liability and claims for any such damage.
Except as otherwise expressly provided in this Lease to the contrary, Tenant
shall not be liable to Landlord,
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or to Landlord's agents, servants or employees for any damage to person or
property caused by the negligence or intentional torts of Landlord, or its
agents, servants or employees, and Landlord agrees to indemnify and hold
Tenant harmless from all liability and claims for any such damage and from all
liability and claims arising either prior to or subsequent to execution of
this Lease which are not specifically assumed by Tenant or disclosed by
Landlord in this Lease.
ARTICLE V
SECTION 5.01. DAMAGE TO IMPROVEMENTS. Should any
improvements during the Term of this Lease be wholly or partially destroyed or
damaged by fire, or any other casualty whatsoever, Tenant, in its sole
discretion, shall do one of the following, all at its cost and expense: (a)
repair, replace, restore or reconstruct the same, subject to Tenant's rights
under Section 6.02; (b) demolish the ruins and construct new improvements; or
(c) demolish and remove the ruins and grade the Leased Premises to the level
of the adjoining sidewalk.
It is agreed that all casualty insurance proceeds shall be
paid to Tenant. In the event of any such casualty, the rental and other
payments herein provided for shall not be abated and the happening of any such
casualty shall not cause the termination of this Lease.
ARTICLE VI
SECTION 6.01. ALTERATIONS. So long as Tenant is not in
default under the terms of this Lease, Tenant shall have the right, from time
to time, to make, at its sole cost and expense, additions, alterations and
changes in or to the improvements that are located upon the Leased Premises.
SECTION 6.02. RIGHT TO DEMOLISH. So long as Tenant is not in
default under the terms of this Lease, Tenant shall have the right to demolish
any improvements now or hereafter situated on the Leased Premises and to
remove the same from the Leased Premises without the prior written consent of
Landlord.
SECTION 6.03. RIGHTS TO CONTINUE. The demolition and removal
of any then existing improvements and the construction of new improvements by
Tenant upon the Leased Premises at any time or times pursuant to the terms
hereof shall not exhaust the rights of Tenant to do the same at any future
time or times during the Term, and Tenant may exercise the rights granted to
it in Section 6.01 at any time or times and from time to time during the Term.
SECTION 6.04. LIENS; END OF TERM. Tenant shall have no
right, authority or power to bind Landlord, or any interest of Landlord in the
Leased Premises, for any claim for labor or material or for any other charge
or expense incurred in the erection and construction of any improvements, or
any change, alteration or addition thereto, nor to render such Leased Premises
liable to any lien or right of lien for any labor or material, and Tenant
shall in no
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way be considered as the agent of Landlord in the construction, erection or
operation of any improvements.
Upon the termination of this Lease, whether by expiration of
the Term or by reason of default on the part of Tenant, or for any other
reason whatsoever, all improvements located on the Leased Premises shall merge
with the freehold estate and become the property of Landlord as a part of the
realty, free and clear of any burdens placed upon Tenant's leasehold estate.
ARTICLE VII
SECTION 7.01. SUBLEASE AND ASSIGNMENT. At any time during
the Term, Tenant shall have and is hereby granted the right freely to sublet
all or any portion of the Leased Premises.
Tenant shall have the right to assign Tenant's interest in
the leasehold estate created hereby without obtaining Landlord's approval or
consent. Any assignee shall expressly assume all liabilities and obligations
of Tenant under this Lease which will accrue after the effective date of such
assignment. Tenant also shall furnish to Landlord a copy of such instrument of
assignment and assumption as herein provided. No such assignment or subletting
by Tenant shall relieve Tenant of any covenants or obligations under this
Lease and Tenant shall remain fully liable hereunder.
SECTION 7.02. LIENS. Tenant may mortgage, pledge or
otherwise hypothecate Tenant's interest in the leasehold estate created
hereby, except that any mechanic's or materialmen's lien shall be released of
record or bonded to Landlord's reasonable satisfaction upon demand by
Landlord; provided, however, Tenant shall be permitted to contest the validity
of any such lien as long as the interests of Landlord are not jeopardized
thereby. No mortgage, pledge, lien or encumbrance shall in any way affect or
encumber Landlord's fee title and estate in and to the Leased Premises and
shall be expressly subject and subordinate to the rights and estate of
Landlord hereunder.
SECTION 7.03. ESTOPPEL CERTIFICATES. Landlord and Tenant
shall, from time to time, without additional consideration, execute and
deliver (x) an estoppel certificate consisting of statements, if true (and if
not true, setting forth the true state of facts as Landlord or Tenant views
them), that (i) this Lease is in full force and effect, with rental paid
through the date of such estoppel; (ii) this Lease has not been modified or
amended; (iii) Landlord and Tenant are not then in default; (iv) Tenant and
Landlord have fully performed all of Tenant's and Landlord's obligations
thereunder; and (v) such other statements as reasonably may be required by
Tenant or by Tenant's mortgagee, or by Landlord or by Landlord's mortgagee,
and (y) and such further certificates and instruments of a similar nature
setting forth factual matters and/or evidencing the agreement of Landlord or
Tenant to the mortgage or other
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hypothecation by the Tenant or Landlord of the interest created hereby as may
be reasonably requested by Tenant or any mortgagee of Tenant or Landlord or
any mortgagee of Landlord.
ARTICLE VIII
SECTION 8.01. RIGHT OF REFUSAL. Landlord hereby grants to
Tenant a right of first refusal (the "Right of Refusal") during the Term to
purchase the fee simple title to the Leased Premises, including all rights,
title, and interest of Landlord under this Lease, upon the terms, provisions,
and conditions of this Section 8.01. Landlord shall not convey, assign or
otherwise transfer the fee simple title to the Leased Premies or any portion
thereof to any third party without first complying with the provisions of this
Section 8.01. If during the Term Landlord receives a bona fide written offer
from an independent third party to purchase all or a portion of the Leased
Premises from Landlord (any such offer being referred to herein as an
"Offer"), then Landlord shall offer to Tenant in writing (the "Refusal
Notice") the right to purchase the Leased Premises or the applicable portion
thereof on the terms set forth in the Offer. The Refusal Notice shall include
a copy of the Offer. Tenant shall exercise its Right of Refusal, if at all, by
written notice to Landlord within fifteen (15) days after the date the Refusal
Notice is received by Tenant (the "Refusal Election Period"). If Tenant does
not exercise its Right of Refusal prior to the expiration of the Refusal
Election Period, Tenant shall be deemed to have not exercised the Right of
Refusal and Landlord may thereafter sell all or the applicable portion of the
Leased Premises on the terms set forth in the Offer to the party that
submitted the Offer without regard to Tenant's rights under this Section 8.01;
provided, however, that if Landlord does not consummate any such sale within
ninety (90) days after the end of the Refusal Election Period, then Landlord
may not consummate any such sale without again making an offer to Tenant as
contemplated by this Section 8.01. Nothing contained in this Section 8.01
limits or impairs Tenant's other rights hereunder as tenant of the Leased
Premises for the Term. Notwithstanding the provisions of this Section 8.01,
the exercise by Xxxxxxx X. Xxxxxxx ("Xxxxxxx") of Xxxxxxx'x option to purchase
certain land from Landlord pursuant to that certain Option Agreement by and
between Landlord and Tenant dated as of March 12, 1997, and/or any subsequent,
similar transaction which results in the replacement of the southern portion
of the Leased Premises with equal acreage along the eastern boundary of the
Leased Premises, shall not constitute an Offer for purposes of effecting
Tenant's Right of Refusal.
ARTICLE IX
SECTION 9.01. GENERAL DEFAULTS BY TENANT. Subject to Section
10.02, if Tenant should:
(A) default in the payment of any installment of rent,
imposition, utility charge or other liquidated sum of money herein
stipulated to be paid by Tenant, and if such default shall continue
for a period of fifteen (15) days after such payment is due, or
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(B) fail to perform any covenant imposed upon Tenant
hereunder which does not involve the payment of a liquidated sum of
money, and if any such default specified in this clause (B) shall
continue for a period of thirty (30) days after notice of said
default has been given to Tenant by Landlord,
then Landlord may, at Landlord's election:
(1) with or without terminating this Lease, immediately or
at any time thereafter re-enter the Leased Premises and correct or
repair any condition which shall constitute a failure on Tenant's
part to keep, observe, perform, satisfy or abide by any term,
condition, covenant, agreement or obligation of this Lease and Tenant
shall fully reimburse and compensate Landlord on demand for the costs
incurred by Landlord in doing so;
(2) declare this Lease canceled and terminated, in which
event this Lease shall terminate as if that were the day originally
fixed herein for expiration of the term of this Lease, and Landlord,
the agents or representatives of Landlord, shall have the right,
without further demand or notice, to re-enter and take possession of
the Leased Premises, with or without process of law, and remove all
persons and their property from the Leased Premises without being
deemed guilty of any manner of trespass, and be entitled to recover
forthwith as damages a sum of money equal to the total of (A) the
cost of recovering the Leased Premises (including, without
limitation, attorneys' fees and costs of suit), (B) any unpaid rents
owed at the time of termination, plus interest thereon from due date
at the rate of ten percent (10%) per annum, (C) the present value of
the balance of the rent for the remainder of the term of this Lease
less the present value of the fair market rental value of the Leased
Premises for said period (in each case using a discount rate of eight
percent (8%) per annum), and (D) any other sum of money and damages
owed by Tenant to Landlord; provided, however, that Landlord may not
so cancel or terminate this Lease if any such default specified in
clause (B) cannot reasonably be corrected within such thirty (30) day
period for so long as Tenant proceeds in good faith and with due
diligence to remedy and correct such default and such default is in
fact cured on or before one hundred eighty (180) days after such
notice of said default has been given to Tenant; or
(3) Landlord may terminate Tenant's right of possession (but
not this Lease) and may repossess the Leased Premises by forcible
entry or detainer suit or otherwise without demand or notice of any
kind to Tenant and without terminating this Lease, and remove all
persons or property therefrom, using such force as may be necessary
(Tenant hereby waiving any claim by reason of such reentry,
repossession or removal or by issuance of any distress warrant or
writ of sequestration), in which event Landlord may (but shall be
under no obligation to do so unless required by law), relet the
Leased Premises or any part thereof for the account of Tenant for
such rent and upon such terms as shall be satisfactory to Landlord.
For the purpose of such reletting
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Landlord is authorized to make any repairs, changes, alterations or
additions in or to the Leased Premises, or provide leasing
inducements or brokerage commissions that may be necessary or
convenient, and (A) if Landlord shall fail or refuse to relet the
Leased Premises, or (B) if the Leased Premises is relet and a
sufficient sum shall not be realized from such reletting (after
paying the unpaid amounts due hereunder earned but unpaid at the time
of reletting plus interest thereon at a rate of ten percent (10%) per
annum, the cost of recovering possession [including, without
limitation, attorneys' fees and costs of suit], all of the costs and
expenses of such repairs, changes, alterations and additions and all
other expenses of such reletting [including, without limitation,
leasing inducements and brokerage commission] and of the collection
of the rent accruing therefrom) to satisfy the rent provided for in
this Lease to be paid, then Tenant shall pay to Landlord as damages a
sum equal to the amount of the rental reserved in this Lease for such
period or periods or, if the Leased Premises have been relet, Tenant
shall satisfy and pay any such deficiency upon demand therefor from
time to time as the same accrues or becomes due. Tenant agrees that
Landlord may file suit to recover any sums falling due under the
terms of this Section 9.01 from time to time on one or more occasions
without Landlord being obligated to wait until expiration of the term
of this Lease, and no delivery or recovery of any portion due
Landlord hereunder shall be any defense in any action to recover any
amount not theretofore reduced to judgment in favor of Landlord, nor
shall such reletting be construed as an election on the part of
Landlord to terminate this Lease unless a written notice of such
intention be given to Tenant by Landlord. Notwithstanding any such
reletting without termination, Landlord may at any time thereafter
elect to terminate this Lease for such previous breach.
No waiver of any breach of any covenant or provision of this Lease shall be
construed to be a waiver of any other or subsequent breach of the same or of
any other covenant or provision, and the acceptance of rental after default
shall not be a waiver of the right to demand payment of any subsequent
installment of rent on the day it becomes due. In the event that Landlord
elects to declare this Lease canceled and terminated as herein provided, all
Improvements shall be and become the absolute and unconditional property of
Landlord, free and clear of any mortgage, lien or other encumbrance created by
Tenant and permitted by Landlord.
SECTION 9.02. SPECIFIC DEFAULTS BY TENANT. If Tenant should
(i) file a voluntary or involuntary petition in bankruptcy which is not
dismissed or discharged within ninety (90) days of filing, (ii) make an
assignment for the benefit of creditors, or (iii) have a receiver appointed
for all or substantially all of its assets and not cause such receivership to
cease within one hundred eighty (180) days after such appointment, then
Landlord may exercise the remedies specified in Section 9.01, including the
right to terminate this Lease, but without Tenant having the additional one
hundred eighty (180) day grace period described in Section 9.01.
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ARTICLE X
SECTION 10.01. NOTICE PARTIES. As used herein, "Notice
Party" means any person or entity (I) which is a mortgagee who holds a
mortgage which burdens all or any part of Tenant's leasehold interest under
this Lease, and (II) whose name and address for notice purposes has been
furnished by Tenant to Landlord. Landlord shall give each Notice Party a
duplicate copy of any and all notices of default or other notices in writing
which Landlord may give or serve upon Tenant pursuant to the terms of this
Lease, and any such notice shall not be effective until said duplicate copy is
given to such Notice Party. A different address may be designated by such
Notice Party by written notice delivered to Landlord from time to time. Any
such Notice Party may, at its option, at any time before the rights of Tenant
shall have been forfeited to the Landlord as provided for in this Lease, cure
in full any default by Tenant under this Lease, any such cure in full shall be
as effective to prevent a forfeiture of the rights of Tenant hereunder as the
same would have been if done and performed by Tenant instead of by any such
Notice Party. In no event shall Landlord be required to accept from a Notice
Party partial cure of any default by Tenant under this Lease and no Notice
Party shall have any rights on account of such partial cure, even if accepted
by Landlord.
No such mortgagee or trustee of the rights and interests of
Tenant hereunder shall be or become liable to Landlord as an assignee of this
Lease until such time as said mortgagee or trustee shall by foreclosure or
other appropriate proceedings in the nature thereof, or as the result of any
other action or remedy provided for by such mortgagee or deed of trust, or by
proper conveyance from Tenant, either acquire the rights and interests of
Tenant under the terms of this Lease or actually take possession of the Leased
Premises, whichever occurs earlier, and such liability of said mortgagee or
trustee shall terminate upon such mortgagee's or trustee's assigning such
rights and interests to another party or relinquishing such possession, as the
case may be.
SECTION 10.02. RIGHT OF CERTAIN NOTICE PARTIES TO OBTAIN NEW
LEASE. Upon termination of this Lease pursuant to Section 9.02, the Notice
Party, if any, who holds a first lien on Tenant's leasehold estate under this
Lease shall have the option, upon written notice to Landlord given not later
than ninety (90) days after receipt of written notice from Landlord of such
termination, to elect to receive, in its own name or in the name of its
nominee, from Landlord a new lease of the Leased Premises for the unexpired
balance of the Term, on the same terms and conditions as in this Lease set
forth, and Landlord agrees to execute such lease provided:
(i) the Notice Party shall forthwith cure any
default of Tenant; and
(ii) the Notice Party or its nominee shall
thereafter observe and perform all covenants
and conditions in said lease contained on the
part of Tenant to be observed and performed.
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Any such new lease, by virtue of the recording of this Lease or a memorandum
thereof, shall have priority equal to this Lease.
ARTICLE XI
SECTION 11.01. CONDEMNATION. As used herein, "Condemnation"
or "Condemned" means a taking by the government of the United States of
America, the State of North Carolina, the County of Wake, or any government or
power whatsoever, or by any corporation under the right of eminent domain, or
a condemnation by any court, city, state, county or governmental authority or
office, department or bureau of the city, county, state or the United States
of America.
(a) If only Landlord's interest in the Leased Premises (but
not the leasehold estate of Tenant under this Lease nor in
any improvements located on the Leased Premises) is
Condemned in whole or in part, then this Lease shall not be
affected thereby and all proceeds of such Condemnation shall
be paid to Landlord.
(b) If only Tenant's leasehold estate under this Lease
and/or in the improvements shall be Condemned in whole or in
part, then this Lease shall not be affected thereby and all
proceeds of such Condemnation shall be paid to Tenant,
except that if such condemnation affects a material portion
of the Leased Premises, then Tenant shall have the right to
terminate this Lease by giving notice thereof to Landlord on
or prior to the thirtieth (30th) day after such
Condemnation, in which case Landlord shall have the right to
receive the entire award for such condemnation.
ARTICLE XII
SECTION 12.01. PEACEFUL ENJOYMENT. Subject to all of the
terms and provisions of this Lease, Landlord covenants and warrants that
Tenant, on paying the rental and other payments herein provided and performing
and observing all of its covenants and agreements herein contained and
provided, shall and may peaceably and quietly have, hold, occupy, use and
enjoy, and shall have the full, exclusive and unrestricted use and enjoyment
of, the Leased Premises during the Term.
SECTION 12.02. TITLE TO LEASED PREMISES. Landlord covenants
to Tenant that Landlord owns good and marketable title to the Leased Premises,
subject only to the matters listed on Exhibit B attached hereto and made a
part hereof, to the extent the same are valid and in force and effect as to
the Leased Premises, and Landlord agrees to warrant and forever defend the
title to the Leased Premises against the claims of any and all persons
whomsoever lawfully (or otherwise) claiming the same or any part thereof.
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ARTICLE XIII
SECTION 13.01. LANDLORD'S MORTGAGEE. Any and all mortgages
on the fee title or reversionary interest of Landlord in the Leased Premises
shall be subject and subordinate to this Lease; provided, however, that
nothing contained herein shall restrict or otherwise impair the right of
Landlord to transfer, convey, sell, mortgage or otherwise deal with the fee to
the Leased Premises or affect the right of Landlord to assign this Lease and
the rental and other sums payable hereunder as further collateral security for
any such fee mortgage or otherwise, and Tenant agrees to honor any such
assignment from and after receipt of an executed copy thereof; and Tenant
further agrees that while any such mortgage or other encumbrance is in force,
and if Tenant shall have been given written notice thereof and the name and
address of the mortgagee and/or trustee, Tenant shall give said mortgagee or
trustee a duplicate copy of any and all notices of default or other notices in
writing which Tenant may give or serve upon Landlord pursuant to the terms of
this Lease, and any such notice shall not be effective until said duplicate
copy is given to such mortgagee or trustee. A different address may be
designated by such mortgagee or trustee by written notice delivered to Tenant
from time to time. Any such mortgagee and/or trustee may, at its option, at
any time before any rights of the Tenant shall have accrued as a result of any
default of Landlord hereunder, make any payment or do any other act or thing
required of the Landlord by the terms of this Lease; and all payments so made
and all things so done or performed by any such mortgagee and/or trustee shall
be as effective to prevent accrual of any rights of Tenant hereunder as the
same would have been if done and performed by the Landlord instead of by any
such mortgagee or trustee. No such mortgagee or trustee of the rights and
interests of the Landlord hereunder shall be or become liable to Tenant as an
assignee of this Lease until such time as said mortgagee or trustee shall by
foreclosure or other appropriate proceedings in the nature thereof, or as the
result of any other action or remedy provided for by such mortgagee or deed of
trust, or by proper conveyance from Landlord, acquire the rights and interests
of the Landlord under the terms of this Lease, and such liability of said
mortgagee or trustee shall terminate upon such mortgagee's or trustee's
assigning such rights and interests to another party.
ARTICLE XIV
SECTION 14.01. SURRENDER. Tenant covenants and agrees to and
with Landlord that upon termination of this Lease (subject, however, to
Section 10.02), whether by lapse of time or because of any of the conditions
or provisions contained herein, Tenant will peaceably and quietly yield up and
surrender possession to Landlord of the Leased Premises and all buildings and
permanent improvements and other properties herein provided to be the property
of Landlord on termination hereof without disturbance or molestation thereof.
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ARTICLE XV
SECTION 15.01. NOTICES. All notices, demands, requests,
consents or other communications ("Notices") which either party may desire or
be required to give to the other hereunder shall be in writing and shall be
delivered by hand, overnight express carrier, or sent by registered or
certified mail, return receipt requested, postage prepaid, in either event,
addressed to the parties at their respective addresses as follows:
If to Landlord, to: Carolina Capital Ventures, Ltd.
0000 Xxxxxxxxxxx Xxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
If to Tenant, to: Family Golf Centers, Inc.
000 Xxxxxxxxxxx Xxxx, Xxxxx 000X
Xxxxxxxx, XX 00000
Attention: General Counsel
Notices given in the manner aforesaid shall be deemed to have been given three
(3) business days after the day so mailed, the day after delivery to any
overnight express carrier and on the day so delivered by hand. Either party
shall have the right to change its address(es) for the receipt of Notices to
the other party in either manner aforesaid. Any Notice required or permitted
to be given by either party may be given by that party's attorney.
ARTICLE XVI
SECTION 16.01. ENTIRE AGREEMENT. This agreement embodies the
entire contract between the parties hereto relative to the subject matter
hereof. No variations, modifications or changes herein or hereof shall be
binding upon any party hereto unless such are in writing and executed by both
Landlord and Tenant. No waiver or waivers of any breach or default or any
breaches or defaults by either party of any term, condition or liability of or
performance by the other party of any duty or obligation hereunder, including
without limitation, the acceptance by Landlord or payment by Tenant of any
rentals at any time or in any manner other than as herein provided shall be
deemed a waiver thereof, nor shall any such waiver or waivers be deemed or
construed to be a waiver or waivers of subsequent breaches or defaults of any
kind, character or description under any circumstances. If any term or
provision of this Lease, or the application thereof to any person or
circumstance, shall to any extent be invalid or unenforceable, the remainder
of this Lease, or the application of such provision to persons or
circumstances other than those as to which it is invalid or unenforceable,
shall not be affected thereby, and each provision of this Lease shall be valid
and shall be enforceable to the extent permitted by law.
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ARTICLE XVII
SECTION 17.01. LANDLORD DEFAULT. In the event Landlord
defaults in undertaking the performance of any of Landlord's covenants or
obligations herein contained for a period of thirty (30) days next following
the date on which Landlord receives written notice given by Tenant to Landlord
as provided herein asserting such default of Landlord, Tenant shall have the
right (but shall not be obligated), at Tenant's sole election, to perform
Landlord's covenants or obligations which Tenant asserts to be in default, at
the expense of Landlord, and to make claim against Landlord for an amount
equal to the cost incurred by Tenant in so doing, together with interest
thereon at the rate of ten percent (10%) per annum from the date incurred by
Tenant until repaid by Landlord.
ARTICLE XVIII
SECTION 18.01. ACTIONS REQUIRING CONSENT OF TENANT'S
MORTGAGEE. So long as there shall be a leasehold mortgage on the leasehold
estate of Tenant hereunder, this Lease shall not, without the prior written
consent of the leasehold mortgagee (as defined below), terminate by merger in
the event Tenant shall acquire the fee estate to any portion of the Leased
Premises. As used herein, the term "leasehold mortgagee" shall mean and
include the trustee, beneficiary and mortgagee named in any deed of trust or
mortgage which is a lien on the leasehold estate of Tenant hereunder.
ARTICLE XIX
SECTION 19.01. GOVERNING LAW. This Lease shall be governed
by the laws of the State of North Carolina, and the covenants contained herein
shall be deemed performable in Wake County, North Carolina. The proper venue
for any suit brought in connection with this Lease shall be the appropriate
local, state or federal court in Wake County, North Carolina.
ARTICLE XX
SECTION 20.01. COMPLIANCE WITH LAWS. As used in this Lease,
"Legal Requirements" shall mean any applicable law, statute, ordinance, order,
rule, regulation, decree or requirement of a Governmental Authority, and
"Governmental Authority" shall mean the United States, the state, county, city
and political subdivisions in which the Leased Premises are located or which
exercise jurisdiction over the Leased Premises, and any agency, department,
commission, board, bureau or instrumentality of any of them which exercise
jurisdiction over the Leased Premises. Throughout the Term, at Tenant's own
cost and expense, Tenant shall conform to and substantially comply with all
Legal Requirements affecting the Leased Premises.
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SECTION 20.02. HAZARDOUS MATERIALS. Landlord represents
that, to the best of Landlord's knowledge, as of the Effective Date, no
substances, materials or wastes subject to regulation by Legal Requirements
from time to time in effect concerning hazardous, toxic or radioactive
materials ("Hazardous Materials") are located on the Leased Premises in
violation of Legal Requirements. Landlord shall indemnify, protect, defend
(with counsel reasonably approved by Tenant) and hold Tenant, and the
officers, directors, shareholders, employees and agents of Tenant, harmless
from any and all obligations, claims, administrative proceedings, judgments,
damages, fines, costs and liabilities, including reasonable attorneys' fees
incurred, that arise directly or indirectly from or in connection with the
presence, suspected presence, Release (as defined below), or suspected Release
of Hazardous Materials prior to or in existence as of the Effective Date
arising out of, in connection with or by reason of the action or inaction of
Landlord, or Landlord's officers, directors, partners, agents, employees,
contractors, subtenants, invitees or visitors, including such costs as are
attributable to periods of time prior to the Effective Date. As used in this
Lease, "Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing
into the environment (including the abandonment or discarding of barrels,
containers and other closed receptacles).
Tenant shall indemnify, protect, defend (with counsel
reasonably approved by Landlord) and hold Landlord, and the officers,
directors, shareholders, employees and agents of Landlord, harmless from any
and all obligations, claims, administrative proceedings, judgments, damages,
fines, costs and liabilities, including reasonable attorneys' fees incurred,
that arise directly or indirectly from or in connection with the presence,
suspected presence, Release, or suspected Release of Hazardous Materials after
the Effective Date arising out of, in connection with or by reason of the
action or inaction of Tenant, or Tenant's officers, directors, partners,
agents, employees, contractors, subtenants, invitees or visitors.
ARTICLE XXI
SECTION 21.01. ATTORNEY'S FEES. If either party hereto
commences legal proceedings against the other party hereto with respect to
this Lease, and if such commencing party prevails in such proceedings, then
the non-prevailing party shall pay the prevailing party's reasonable legal
fees and costs of suit.
ARTICLE XXII
SECTION 22.01. RECORDING OF LEASE. Tenant may not record
this Lease in the real property records of Wake County, North Carolina. At the
request of either party hereto, both parties hereto shall execute and
acknowledge a memorandum of this Lease to be recorded in the real property
records of Wake County, North Carolina, in a form and of a content reasonably
acceptable to Landlord and Tenant, and at the expense of the requesting party,
containing such terms as may be necessary to place third parties on notice of
Tenant's rights under this Lease.
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ARTICLE XXIII
SECTION 23.01. BROKERS. Landlord shall be responsible for any
fee owed to Xx. Xxxxx Xxxxxxx and/or Blue Sky Commercial (collectively,
"Landlord's Brokers"). Other than Landlord's Brokers, each party hereto
warrants and represents that it has not dealt with a broker or intermediary
entitled to any compensation in connection with this Lease or Tenant's use of
the Leased Premises. Each party hereby agrees to hold the other party, its
officers, directors, shareholders, affiliates, employees, agents and
representatives harmless from any and all claims, liabilities, costs and
expenses (including reasonable attorneys' fees) arising from any claim for any
commissions or other fees by any other broker or agent acting or purporting to
have acted on behalf of such party.
ARTICLE XXIV
SECTION 24.01. MEDIATION. The parties agree to submit any
unresolved disputes under this Lease to non-binding mediation to be conducted
in accordance with the rules governing mediated settlement conferences in
Superior Court as promulgated, from time to time, by the North Carolina
Supreme Court. Such mediation shall take place in Raleigh, North Carolina.
ARTICLE XXV
SECTION 25.01. GUARANTY. Family Golf Centers, Inc., has
executed a Guaranty Agreement of even date herewith in the form attached
hereto as Exhibit C to guaranty to Landlord certain of Tenant's obligations
hereunder as more particularly described therein.
IN WITNESS WHEREOF, this Lease is made and entered into in
multiple original counterparts as of the date and year first above written.
CAROLINA CAPITAL VENTURES, LTD.
By: __________________________
Name:_________________________
Title:________________________
RALEIGH FAMILY GOLF CENTERS, INC.
By:___________________________
Name:_________________________
Title:________________________
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