EXHIBIT 1.1
BASIC LEASE INFORMATION
AMENDED AND RESTATED LEASE AGREEMENT DATED AS OF APRIL 14, 2006, AMENDING AND
RESTATING THE LEASE AGREEMENT DATED AS OF NOVEMBER 10, 2004
Landlord: MHC TT Leasing Company, Inc., a Delaware corporation, together with
any successor or assign.
Tenant: Thousand Trails Operations Holding Company, L.P., a Delaware limited
partnership, together with any successor or assign permitted by this
Lease.
Commencement Date: November 10, 2004.
Effective Date of Restatement: April 14, 2006
Lease Expiration Date: January 15, 2020, which is the date which is fifteen
(15) days after the last day of the 181st full calendar month following the
Commencement Date, unless extended pursuant to paragraph 4(b) of the Lease.
Primary Term and any Extension Term Fixed Rent: The initial annual "FIXED
RENT" during the Primary Term and any applicable Extension Term of the Lease
shall be defined as and equal to and shall be payable monthly in advance (unless
specifically set forth to be paid at a different time below) as follows:
(a) Rent accruing prior to the Effective Date of Restatement shall be paid
in accordance with the Original Lease.
(b) From the Effective Date of Restatement through December 31, 2006 (which
period is herein referred to as the "FIRST RESTATED LEASE PERIOD"): at the
annual rate of $17,520,000.00, 1/12 of which shall be payable in advance on the
first day of each calendar month, commencing (i) if the Effective Date of
Restatement does not occur on the first day of a calendar month, then on the
first day of the calendar month following the month in which the Effective Date
of Restatement occurs, and (ii) if the Effective Date of Restatement occurs on
the first day of a calendar month, then on the Effective Date of Restatement.
Additionally, if the Effective Date of Restatement does not occur on the first
day of a calendar month, then on the Effective Date of Restatement, Tenant shall
make a payment of an amount equal to the pro rata amount of the monthly rental
attributable to the Rent payable hereunder.
(c) Subject to further adjustments as set forth in paragraph 5(e),
beginning with January 1, 2007 and every January 1 thereafter (each, an
"ADJUSTMENT MONTH") during the Primary Term and any Extension Term, the annual
Fixed Rent payable during
the next twelve (12) full calendar month period commencing with the Adjustment
Month shall be the Fixed Rent payable during the twelve (12) full calendar
months immediately preceding the Adjustment Month increased (but not decreased)
by the percentage increase in the Consumer Price Index from the fourteenth
(14th) calendar month preceding such Adjustment Month through the second
calendar month preceding such Adjustment Month, 1/12th of which shall be payable
in advance on the first day of each calendar month in such Lease Year,
commencing with the Adjustment Month in such Lease Year. Any period of the Lease
less than a full year after the last full Lease Year shall accrue Rent equal to
the pro rata amount of Rent accrued for each equal period of time in the last
Lease Year.
PERCENTAGE RENT: Subject to further adjustments as set forth in paragraph
5(e), the annual "PERCENTAGE RENT," commencing in the second Lease Year and in
every Lease Year thereafter, during the Primary Term and any applicable
Extension Term of this Lease shall be defined as and equal to and shall be
payable, without set off, prior demand or deduction (except as noted in
paragraph (b) below) as follows:
(a) Beginning with the Lease Year that starts January 1, 2007 and in every
Lease Year thereafter, an amount equal to the Percentage Rent Rate times Excess
Dues, payable as set forth in paragraph (b) below. "EXCESS DUES" shall mean, for
any Lease Year, all Membership Dues in excess of $45,000,000 received in such
Lease Year. The "PERCENTAGE RENT RATE" shall mean fifty percent (50%). Any
period of the Lease less than a full year after the last full Lease Year shall
accrue Rent equal to the pro rata amount of Rent accrued for each equal period
of time in the last Lease Year.
(b) Percentage Rent Statements; Payment. If the Budget projects Excess Dues
in any Lease Year commencing in the second Lease Year, Tenant shall pay to
Landlord on each January 1, April 1, July 1 and October 1 of such Lease Year an
amount equal to 3/16 of the Percentage Rent projected to be due for such Lease
Year, for a total of seventy-five percent (75%) of such projected Percentage
Rent. Within thirty (30) days after the end of each such calendar quarter (i.e.,
March 31, June 30, September 30 and December 31), Tenant shall furnish Landlord
with an uncertified statement of the total amount of Membership Dues received
for such calendar quarter and within sixty (60) days after the end of the second
Lease Year and of each Lease Year thereafter, Tenant shall furnish to Landlord a
certified statement prepared by Tenant's internal audit team and signed by an
officer of Tenant acceptable to Landlord, showing the total amount of Membership
Dues received for such calendar quarter. On the earlier to occur of the March 1
immediately following such Lease Year and the date on which Tenant furnishes the
certified statement for such Lease Year, Tenant shall pay the remaining amount
of Percentage Rent due for that Lease Year or receive a credit for any
overpayment, as the case may be (equal to twenty-five percent (25%) of the
projected Percentage Rent, plus or minus any adjustments reflecting the amount
by which Membership Dues received for the full Lease Year were more or less than
the amount of Membership Dues budgeted to be received for the full Lease Year).
All statements regarding the total amount of Membership Dues received for such
period deliverable by Tenant to Landlord under this Lease shall be delivered to
the place where Rent is then payable, or at such other place as Landlord may
from time to time direct by written notice to Tenant; provided that Tenant shall
only be obligated to send all such statements with respect to any Lease Year to
one place. Landlord shall keep confidential any information obtained from
any audit and examination of Tenant's records or from any such statements,
except to the extent necessary to disclose the same to a proposed purchaser or
mortgagee of the Premises or except in any litigation or arbitration proceedings
between the parties or as otherwise required by law. Computation of Percentage
Rent as specified herein shall be made separately with regard to each Lease
Year, it being understood and agreed that the total amount of Membership Dues
received for such period for any Lease Year, and the Percentage Rent due
thereon, shall have no bearing on, or connection with, the total amount of
Membership Dues received for such period for any other Lease Year.
(c) Records; Audits. Tenant shall keep accurate records of all Membership
Dues, in accordance with Tenant's usual accounting practices, at one of its
regular business offices, and Landlord shall have the right, upon forty-five
(45) days' notice in writing to Tenant, to audit such records for any Lease
Year. Such audit shall be performed during Tenant's usual business hours and
without unreasonable interference with the conduct of business at the place
where the audit is made. If Landlord shall have such an audit performed for any
Lease Year and the Membership Dues shown by Tenant's statement for such Lease
Year should be found to be understated and as a result, Tenant owes additional
Percentage Rent, then Landlord shall notify Tenant of such deficiency and Tenant
shall pay to Landlord the deficiency in Percentage Rent no later than ten (10)
days after Tenant's receipt of said notice of deficiency from Landlord. If
Landlord shall have such an audit performed for any Lease Year and the
Membership Dues shown by Tenant's statement for such Lease Year should be found
to be understated by more than three percent (3%), and as a result Tenant owes
additional Percentage Rent, then Tenant shall pay to Landlord the cost of such
audit in addition to the deficiency in Percentage Rent as stated above. Any
statements or payments made by Tenant and not the subject of any Landlord's
notice hereunder within the aforesaid period shall be deemed final and
conclusive, and Tenant shall have no further obligations to keep such records or
make them available to Landlord.
(d) Except as provided in paragraph 5(e) of this Lease, the parties to this
Lease hereby acknowledge that the Percentage Rent, including the Percentage Rent
Rate, the determinable amounts of Excess Dues, and the determination and
definition of Membership Dues will not be changed or renegotiated during the
Term of this Lease, unless Landlord or MHC Trust, a Maryland real estate
investment trust, receives an opinion from nationally recognized counsel in a
form and substance satisfactory to Landlord or MHC Trust, or a ruling from the
Internal Revenue Service to the effect that such change or renegotiation will
not cause the amounts received under this Lease to be excluded from the
definition of "rents from real property" under Section 856 of the Code.
Landlord address for payment by wire transfer to:
Bank of America NT & SA
Chicago, IL
ABA# 000000000
MHC Operating L.P.
Account # 7366901095
Notify: Xxxxx Xxxxxxx @ 000-000-0000 upon receipt.
Tenant Address: Two Xxxxx Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
AMENDED AND RESTATED
LEASE AGREEMENT
BETWEEN
MHC TT LEASING COMPANY, INC.,
AS LANDLORD
AND
THOUSAND TRAILS OPERATIONS HOLDING COMPANY, L.P.,
AS TENANT
EFFECTIVE DATE OF RESTATEMENT: APRIL 14, 2006
THIS AMENDED AND RESTATED LEASE AGREEMENT is made and entered into as of
the Effective Date of Restatement set forth in the attached Basic Lease
Information (this lease agreement, as amended and restated, together with all
amendments and supplements hereto, this "LEASE"), by and between MHC TT Leasing
Company, Inc., a Delaware corporation, having an address at c/o Equity LifeStyle
Properties, Inc., Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, XX 00000
(together with any successor or assign, hereinafter called "LANDLORD") and
Thousand Trails Operations Holding Company, L.P., a Delaware limited
partnership, having an address at Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx,
XX 00000 (together with any successor or assign permitted by this Lease,
hereinafter collectively called "TENANT").
WHEREAS, Landlord and Tenant entered into a Lease, dated as of November 10,
2004, pursuant to which Tenant leased the Premises set forth on Exhibit A-1(a)
attached hereto from Landlord (the "ORIGINAL LEASE") all upon the terms and
subject to the conditions set forth therein; and
WHEREAS, Tenant has requested a waiver of the prohibition against Tenant's
change of control in order to allow all of Tenant's Equity Interest to be
acquired, directly or indirectly, by PATT Holding Company, LLC (the
"ACQUISITION"); and
WHEREAS, Tenant and Landlord desire to permit the Acquisition and to amend
the Original Lease to, among other things: (i) provide for Tenant to lease the
additional Premises listed on Exhibit A-1(b) attached hereto and the Personal
Property listed on Exhibit A-1(c) attached hereto, (ii) to increase the Rent
payable hereunder and (iii) to make certain other amendments to the Original
Lease all as set forth herein;
NOW, THEREFORE, for good and valuable consideration and Landlord's consent
to the aforesaid change in control, the receipt thereof is hereby acknowledged,
the Lease is hereby amended and restated in its entirety as set forth above and
as follows:
1. DEFINITIONS
Capitalized terms used herein shall have the following meanings for all
purposes of this Lease and shall be equally applicable to both the singular and
plural forms of the terms herein defined.
"ACCEPTED RECEIVABLES" shall mean Membership Contract Receivables which
Landlord has determined, in its reasonable discretion, to be collectable, based
upon a reasonable reserve for uncollectible amounts.
"ACCOUNT COLLATERAL" is defined in paragraph 31(k) of this Lease.
"ACCOUNTS" means the Collection Account, the Concentration Account and the
Reserve Accounts.
"ACQUISITION" is defined in the second WHEREAS clause of the Preamble
hereto.
"ADDITIONAL RENT" means all amounts, liabilities and obligations other than
Fixed Rent which Tenant assumes or agrees to pay under this Lease to Landlord or
others, including the Percentage Rent.
"ADJUSTMENT MONTH" is defined and shall have the meaning specified in the
Basic Lease Information.
"AFFILIATES" means Persons (other than individuals) Controlled by,
Controlling or under Common Control with Tenant.
"AFTER-TAX BASIS" means, with respect to any payment required to be made to
any Person, the amount of such payment after giving effect to any additional
amount or amounts which, after deduction of all Federal, state and local taxes
required to be paid by such Person (determined utilizing an effective marginal
tax rate of forty percent (40%)), shall be equal to such payment.
"ALTERNATIVE CREDIT RATING AGENCY" means if either or both of S&P and
Xxxxx'x no longer exist or no longer assign Credit Ratings, such other
nationally recognized statistical credit rating agency designated by Landlord,
acting in its sole discretion.
"ANCILLARY INCOME" means any point of sale income generated by Tenant or
any direct or indirect Subsidiary of Tenant in connection with the rendering of
services, the rental of trailers, equipment, boats or other items, the sale of
food, supplies or products or the providing of other amenities incidental or
complementary to the operation of the campgrounds, together with any other Gross
Revenue. All income received or revenue generated by any of Tenant's
Subsidiaries in connection with the conduct of business shall be deemed, for
purposes of this Agreement, to be Ancillary Income. Ancillary Income shall not
include Membership Dues or Membership Contract Receivables payments.
"APPROVED CAPITAL IMPROVEMENTS" is defined in paragraph 34(a) of this
Lease.
"APPROVED THIRD PARTY FINANCING" means the incurrence of unsecured
indebtedness by Tenant from an entity unaffiliated with Tenant up to a principal
amount equal to fifty percent (50%) of the amount which such third party lender
would be willing to lend based on the increase in Cash Flow above the Base Year
Cash Flow, which indebtedness must be on terms and conditions and pursuant to
documentation which is reasonably acceptable to Landlord.
"BANK" means Union Bank of California, N.A., a national banking
association, in its capacity as the bank or the securities intermediary (as
defined in the UCC) with respect to any Account and any successor to Union Bank
of California, N.A.
"BASE YEAR CASH FLOW" means $1,707,000 which has been calculated pursuant
to Schedule 2 hereto.
"BASIC LEASE INFORMATION" means the page(s) preceding this Lease which are
hereby incorporated by reference.
"BUDGET" is defined in paragraph 30 of this Lease.
"BUFFER ZONE" means a 100 foot perimeter of land around all Campsite Land.
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"BUSINESS DAYS" or "BUSINESS DAY" means any day excluding Saturday, Sunday
and any day which is a legal holiday under the laws of the State of Illinois or
is a day on which banking institutions located in such state are closed.
"CAMPSITE LAND" means only that portion of the Premises which is necessary
for the Tenant to operate in accordance with the Permitted Use, including any
easement necessary to connect such portion to a public road. Campsite Land shall
include all improved amenities generally used in the operation of a campground,
such as swimming pools, club houses and camp stores.
"CANADIAN ACCOUNTS" means all deposit accounts of Tenant located and
maintained at the Bank of Montreal as more specifically identified on Exhibit I
attached hereto, together with any replacements, substitutions or new accounts
located thereat and which are disclosed to Landlord in writing.
"CAPITAL EXPENDITURE RESERVE" is defined in paragraph 34(a) of this Lease.
"CAPITAL EXPENDITURE RESERVE ACCOUNT" is defined in paragraph 31(b)(ii)(C)
of this Lease.
"CAPITAL EXPENDITURE RESERVE STATEMENT" is defined in paragraph 34(a) of
this Lease.
"CAPITAL IMPROVEMENTS" is defined in paragraph 34(a) of this Lease.
"CASH FLOW" means, as of any date of determination, EBITDA for the twelve
months ended on the last day of the month preceding such date of determination
less the sum of (i) payments of Fixed Rent payable hereunder for such twelve
months, and (ii) a capital expenditure reserve of $3,000,000 (such $3,000,000
amount to be increased by three percent (3%) per year from and after 2006 or pro
rata portion thereof). The foregoing definition was used in preparing the sample
set forth in Schedule 2 attached hereto and was based upon Tenant's February
2006 financial statements.
"CASH MANAGEMENT BANK" means Union Bank of California, N.A. or another
financial institution selected by Tenant and approved by Landlord (such approval
not to be unreasonably withheld or delayed).
"CASUALTY" means any damage or destruction caused to any Site by any
reason, including fire.
"CASUALTY REPAIR" is defined in paragraph 10 of this Lease.
"CASUALTY THRESHOLD" is defined in paragraph 10 of this Lease.
"CLAIMS" or "CLAIMS" shall mean Liens (including lien removal and bonding
costs), liabilities, obligations, damages, losses, demands, penalties,
assessments, payments, fees of any Mortgagee, fines, claims, actions, suits,
judgments, settlements, costs, expenses and disbursements (including legal fees
incurred and expenses and costs of investigation and environmental remedial
action) of any kind and nature whatsoever.
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"COLLECTION ACCOUNT" is defined in paragraph 31(b)(i) of this Lease.
"COMMENCEMENT DATE" is defined and shall have the meaning specified in the
Basic Lease Information.
"CONCENTRATION ACCOUNT" is defined in paragraph 31(b)(ii) of this Lease.
"CONSUMER PRICE INDEX" means the Consumer Price Index-U.S. City Average for
All Urban Consumers (all items) (1982-84=100) prepared by the Bureau of Labor
Statistics of the United States Department of Labor. In the event that such
Consumer Price Index shall no longer be published with a base year of
1982-84=100, Landlord shall compute, by reference to data available from such
Bureau of Labor Statistics, the actual percentage increase in consumer prices
during the period or periods in question. If said Consumer Price Index shall
cease to be published, Landlord shall use the most comparable index published by
the United States Government. Where the Consumer Price Index is required for a
given month, and if the Consumer Price Index is not published for such month,
then the Consumer Price Index published for the month closest and prior to the
designated month shall be used.
"CONTINGENT OBLIGATION" means, as applied to any Person, any direct or
indirect liability of that Person: (i) with respect to any indebtedness, lease,
dividend or other obligation of another Person if the purpose or intent of the
Person incurring such liability, or the effect thereof, is to provide assurance
to the obligee of such liability that such liability will be paid or discharged,
or that any agreements relating thereto will be complied with, or that the
holders of such liability will be protected (in whole or in part) against loss
with respect thereto; (ii) with respect to any letter of credit issued for the
account of that Person or as to which that Person is otherwise liable for
reimbursement of drawings; (iii) under any foreign exchange contract, currency
swap agreement, interest rate swap agreement or other similar agreement or
arrangement designed to alter the risks of that Person arising from fluctuations
in currency values or interest rates; (iv) to make take-or-pay or similar
payments if required regardless of nonperformance by any other party or parties
to an agreement; or (v) pursuant to any agreement to purchase, repurchase or
otherwise acquire any obligation or any property constituting security therefor,
to provide funds for the payment or discharge of such obligation or to maintain
the solvency, financial condition or any balance sheet item or level of income
of another. The amount of any Contingent Obligation shall be equal to the amount
of the obligation so guaranteed or otherwise supported or, if not a fixed and
determined amount, the maximum amount so guaranteed.
"CONTROL" (including with correlative meanings the terms "Controlling,"
"Controlled by" and "under Common Control with") means the possession directly
or indirectly of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"CORPORATE CONTROL EVENT" means any of the following: (i) a merger or
consolidation of Tenant, PATT or PA with another entity which results in a
change in Control of Tenant, (ii) the sale of all or substantially all the
assets of Tenant, PATT or PA to another Person, or (iii) any Person acquiring,
directly or indirectly, any shares of any class of equity securities of Tenant,
PATT or PA or other interest of Tenant, PATT or PA.
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"CREDIT RATING" means the senior unsecured debt rating issued by S&P and
Xxxxx'x or if either or both no longer exist or no longer issue ratings then,
for either or both as so applicable, an Alternative Credit Rating Agency. All
references to specific levels of a Credit Rating mean such rating with a
"stable" or "positive" outlook, but not a "negative" outlook or "on watch"
associated with such rating.
"DISABILITY" is defined in paragraph 38(j) of this Lease.
"DISTRIBUTION INDEBTEDNESS" is defined in paragraph 38(d) of this Lease.
"EBITDA" means (i) the consolidated net income (or loss) for the applicable
period of Tenant and its Subsidiaries on a consolidated basis determined in
accordance with GAAP, but excluding therefrom: (a) the income (or loss) of any
Person (other than Subsidiaries of Tenant) in which Tenant or any of its
Subsidiaries has an ownership interest unless received by Tenant or such
Subsidiary in a cash distribution; and (b) the income (or loss) of any Person
accrued prior to the date it became a Subsidiary of Tenant or is merged into or
consolidated with Tenant, plus (ii) the sum of (a) any provision for (or less
any benefit from) income taxes included in the determination of net income, (b)
interest expense and Rent to the extent deducted in the determination of net
income, (c) non-cash amortization and depreciation deducted in determining net
income, (d) losses (or less gains) from asset dispositions or sales or other
non-cash items included in the determination of net income (excluding sales,
expenses or losses related to current assets), (e) any net increase (or less net
decreases) in deferred revenue from the sale of Membership Contracts, (f) any
non-cash extraordinary losses (or less gains), as defined under GAAP, net of
related tax effects and (g) any net increase (or less any net decrease) in
Member Obligations (as illustrated in the Tenant's February 2006 financials),
minus (iii) any net increase (or plus any net decrease) in deferred
marketing/selling expenses of Tenant and/or its Subsidiaries. Management fees
and any other line items not discussed above are not appropriate adjustments in
the calculation of EBITDA. The intent of this EBITDA formula is to calculate
recurring cash flow potential of the entity before the impact of capital
decisions such as debt and equity. The foregoing definition was used in
preparing the sample set forth in Schedule 2 attached hereto and was based upon
Tenant's February 2006 financial statements. To the extent that purchase
accounting adjustments impact the financial statements, they will be
disregarded.
"ELIGIBLE ACCOUNT" means a segregated account maintained at a financial
institution reasonably acceptable to Landlord. An Eligible Account shall not be
evidenced by a certificate of deposit, passbook or other instrument.
"ENVIRONMENTAL LAWS" is defined in paragraph 26(b) of this Lease.
"ENVIRONMENTAL REPORTS" is defined in paragraph 26(c) of this Lease.
"EQUIPMENT" means the equipment generally described on Exhibit B attached
hereto.
"EVENT OF DEFAULT" is defined in paragraph 15 of this Lease.
"EXCESS CASH FLOW" means, for any twelve month period, the amount by which
Cash Flow for such twelve month period exceeds Base Year Cash Flow. The
foregoing definitition was used in preparing the sample set forth in Schedule 2
attached hereto and was based upon Tenant's February 2006 financial statements.
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"EXCESS DUES" is defined and shall have the meaning specified in the Basic
Lease Information.
"EXCESS LAND" means all land now or hereafter owned by Landlord or its
Affiliates in or near the Premises which is not Campsite Land or a Buffer Zone.
When Landlord has physically developed (i.e., Landlord has begun actual
construction), in its sole discretion, any parcel of Excess Land on which
Property Taxes are billed on Excess Land and Campsite Land and the Buffer Zones
in a single tax xxxx, Landlord shall apply for separate tax bills and upon
approval thereof from appropriate tax authorities, Property Taxes on the Excess
Land shall no longer be paid by Tenant, and any parcel of Excess Land will cease
to be considered part of the Underlying Premises once Landlord has applied for,
and received, a separate tax xxxx on such land.
"EXCESS LAND OWNER" is defined in paragraph 33(a) of this Lease.
"EXCLUDED TAXES" means (i) any income or franchise taxes based upon,
measured by, or calculated with respect to net income or profits (but not
including any franchise tax or sales tax based upon gross receipts with respect
to the Rent or amounts required to ensure that a payment is made on an After-Tax
Basis), inheritance, estate, succession, transfer or any similar taxes and (ii)
any property taxes attributable to the Excess Land, after Landlord has applied
for, and received separate tax bills from the appropriate tax authority.
"EXISTING XXXXXXX ACCOUNTS" is defined in paragraph 31(b)(ii) of this
Lease.
"EXTENSION TERMS" is defined in paragraph 4(b) of this Lease.
"EXTENSION TERM COMMENCEMENT DATE" is defined in paragraph 4(b) of this
Lease.
"FEE SITES" means those Sites listed on Exhibit L attached hereto, each of
which is owned by affiliates of Landlord in fee simple and leased to Landlord
pursuant to the Master Lease.
"FIRST LEASE YEAR" is defined in the definition of "Lease Year."
"FIRST RESTATED LEASE PERIOD" is defined and shall have the meaning
specified in the Basic Lease Information.
"FIXED RENT" is defined and shall have the meaning specified in the Basic
Lease Information.
"FRISCO ACCOUNTS" means those certain deposit accounts maintained at Xxxxx
Fargo Bank, N.A. located in Frisco, Texas, as more particularly described on
Exhibit I attached hereto.
"FRISCO LEASE" means that certain Office Lease Agreement dated entered into
in 2002 between Sealy Parkwood, L.P., a Georgia limited partnership and Thousand
Trails, Inc.
"GAAP" means generally accepted accounting principles recognized as such in
the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and the Financial Accounting
Standards Board.
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"GAUTIER ACCOUNTS" means those certain deposit accounts maintained at
Merchants & Marine Bank in Gautier, Mississippi, as more particularly described
on Exhibit I attached hereto.
"GOVERNMENTAL AUTHORIZATION" means any approval, consent, license, permit,
waiver or other authorization issued, granted, given or otherwise made available
by or under the authority of any governmental body or pursuant to any Legal
Requirement.
"GROSS REVENUES" means, for the applicable period, without duplication, all
income (including all Ancillary Income), revenues, issues, profits, deposits,
proceeds of insurance (including business interruption insurance), Membership
Dues, Membership Contract Receivables payments, Membership Contract termination
or similar payments and all other payments received by or for the benefit of
Tenant and any direct or indirect Subsidiary of Tenant (including by Resort
Parks International, Inc., a Georgia corporation ("RPI"), and by Thousand Trails
Management Services, Inc., a Nevada corporation ("TTMS")), in cash or current
funds, together with any other consideration from any source whatsoever in
connection with such Person's ownership, operation and management of its assets
and business, including all concession and rental income or income otherwise
realized in connection with the provision of any other service or conduct of any
other business by such Person. For avoidance of doubt, Gross Revenues shall
include all income received in connection with the businesses of providing third
party management services for campgrounds or like facilities and/or the
cross-selling, time share management, brokerage or marketing services for
campground facilities or like businesses by RPI or TTMS, as applicable.
"GUARANTORS" means, collectively, all Persons holding partnership interests
in Tenant, together with any successor or assign permitted by this Lease, and
each such person individually is herein called a "GUARANTOR."
"GUARANTOR PLEDGES" means that certain Pledge Agreement by all Guarantors
in favor of Landlord, dated as of November 10, 2004, pursuant to which
Guarantors pledged one hundred percent (100%) of the ownership interests in
Tenant to Landlord.
"GUARANTY" means that certain Secured Limited Guaranty dated as of November
10, 2004 herewith from all Guarantors to Landlord, pursuant to which, among
other things, Guarantors unconditionally guarantee the payment and performance
of Tenant's obligations under this Lease, jointly and severally, all upon the
terms and subject to the conditions set forth therein, as such Guaranty is
amended, modified or restated from time to time. The Guaranty is secured by the
Guarantor Pledges and Landlord's sole recourse under such Guaranty shall be to
foreclose upon the Guarantor Pledges as further set forth therein.
"HAZARDOUS MATERIALS" is defined in paragraph 26(b) of this Lease.
"IMMEDIATE REPAIRS" means those repairs listed on Exhibit O attached
hereto, each of which must be completed no later than the date listed
immediately opposite such repair on Exhibit O.
"IMPOSITION" means the various taxes and other charges referred to in
paragraph 6 of this Lease and the present and future governmental laws and
regulations more specifically described in paragraph 6(b) of this Lease.
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"IMPROVEMENTS" means all of the buildings, structures, improvements,
Equipment, Personal Property, heating, ventilation, air conditioning, plumbing,
electrical, mechanical, utility and life safety systems, and all building
fixtures therein (including parking areas and driveways) now or hereafter
located on the Campsite Land or the Buffer Zone and generally described on
Exhibits A-2(a) and A-2(b) attached hereto, other than and specifically
excluding Tenant's Trade Fixtures.
The words "INCLUDE," "INCLUDES," "INCLUDING" and any other derivation of
"include" means "including but not limited to" unless specifically set forth to
the contrary.
"INCREMENTAL VALUE" means (a) $2,500,000 plus (b) the product of (x) fifty
percent (50%) of the Excess Cash Flow for the trailing twelve month period times
(y) five. This Incremental Value calculation assumes no change from the numbers
shown on Schedule 2 attached hereto in 1) outstanding Indebtedness and 2)
Membership Contract Receivables. To the extent there is an increase in
Membership Contract Receivables, such receivables will be evaluated to determine
whether they are Accepted Receivables and to their impact on Incremental Value.
To the extent additional Indebtedness has been approved by Landlord as provided
herein, the parties will discuss the impact of the Indebtedness on the
Incremental Value. In addition, the parties will evaluate the impact of
upgrading existing Members to view products which generate revenue included in
EBITDA to ensure they are consistent with historical operations. The intent of
the parties in that Incremental Value represents 50% of the value created of the
organization by increasing the ability of the enterprise to generate additional
recurring Cash Flow after taking into account the impact of any Indebtedness for
such value creation. The foregoing definition was used in preparing the sample
set forth in Schedule 2 attached hereto and was based upon Tenant's February
2006 financial statements.
"INDEMNIFIED PARTY" is defined in paragraph 26(c) of this Lease.
"INDEBTEDNESS" means, as applied to any Person, without duplication, (a)
any indebtedness of such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of any property or asset of
such Person to another Person subject to an understanding or agreement,
contingent or otherwise, to repurchase such property from such Person), (b) any
obligation under any lease (a "synthetic lease") treated as an operating lease
under GAAP and as a loan or financing for United States income tax purposes or
creditors rights purposes, (c) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money
and any obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments, (d) any obligations of such Person for the deferred
purchase price of property or services, (e) any obligations of such Person
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (f) any obligations of
such Person as lessee under leases that have been or should be, in accordance
with GAAP, recorded as capital leases or that portion of obligations with
respect to capital leases that is properly classified as a liability on a
balance sheet in conformity with GAAP, (g) any obligations of such Person as a
result of any final judgment rendered against such Person or any settlement
agreement entered into by such Person with respect to any litigation unless such
obligations are stayed upon appeal (for so long as such appeal shall be
maintained) or are fully discharged or bonded within thirty (30) days after the
entry of such judgment or execution of
8
such settlement agreement, (h) any obligations, contingent or otherwise, of such
Person in respect of acceptances, letters of credit or similar extensions of
credit, (i) any Contingent Obligations, (j) any Indebtedness of others referred
to in clauses (a) through (i) above or clause (k) below guaranteed directly or
indirectly in any manner by such Person, or in effect guaranteed directly or
indirectly by such Person through an agreement (1) to pay or purchase such
Indebtedness or to advance or supply funds for the payment or purchase of such
Indebtedness, (2) to purchase, sell or lease (as lessee or lessor) property, or
to purchase or sell services, primarily for the purpose of enabling the debtor
to make payment of such Indebtedness or to assure the holder of such
Indebtedness against loss, (3) to supply funds to or in any other manner invest
in the debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such services are rendered)
or (4) otherwise to assure a creditor against loss, and (k) any Indebtedness
referred to in clauses (a) through (j) above secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including accounts and contract rights) owned
by such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness.
"INSURANCE RESERVE ACCOUNT" is defined in paragraph 31(b)(ii)(B) of this
Lease.
"IT ASSETS" is defined on Exhibit A-1(c).
"LAND" means the title and interest of Landlord in and to the FIFTY-NINE
(59) locations of real estate described on Exhibits A-1(a) and A-1(b) attached
hereto, and any land lying in the bed of any existing dedicated street, road or
alley adjoining thereto, all strips and gores adjoining thereto, and all rights,
ways, easements, privileges and appurtenances thereunto belonging, including all
of Landlord's right, title and interest in and to all other property rights,
tangible or otherwise, arising out of or connected with Landlord's ownership
thereof, but excluding the Improvements thereon.
"LANDLORD" is defined in the first paragraph of this Lease.
"LANDLORD PARTIES" is defined in paragraph 6(a) of this Lease.
"LEASE" is defined in the first paragraph of this Lease.
"LEASE EXPIRATION DATE" is defined and shall have the meaning specified in
the Basic Lease Information.
"LEASEHOLD MORTGAGE" means a leasehold mortgage, leasehold deed to secure
debt, leasehold deed of trust or other security instrument of like nature on
Tenant's interest under this Lease given by Tenant to a Leasehold Mortgagee.
"LEASEHOLD MORTGAGEE" means any holder of a Leasehold Mortgage with respect
to Tenant's interest under this Lease, which Leasehold Mortgagee must also hold
a lien on and security interest in all directly and indirectly owned assets of
Tenant, including all Membership Contracts (subject to Landlord's interest in
such assets).
9
"LEASE YEAR" means each Calendar Year commencing with 2006, which shall be
the "First Lease Year" and each twelve full calendar month period thereafter
commencing with an Adjustment Month.
"LEGAL REQUIREMENTS" is defined in paragraph 12(a) of this Lease.
"LICENSES" is defined in paragraph 12(a) of this Lease.
"LIEN" means any lien, mortgage, pledge, charge, security interest or
encumbrance of any kind, or any other type of preferential arrangement that has
the practical effect of creating a security interest, including any arising
under any conditional sale agreement, capital lease or other title retention
agreement.
"LOAN ACCOUNT" is defined in paragraph 31(b)(ii) of this Lease.
"LOCAL ACCOUNTS" means (i) those deposit accounts maintained at banks in
close proximity to a campground and into which Ancillary Income derived from
such campground is deposited, as identified and more particularly described in
Exhibit I attached hereto, together with any additions thereto, replacements or
substitutions thereof, which are disclosed to Landlord in writing, (ii) the
Frisco Accounts, (iii) the Gautier Accounts, and (iv) the RPI Accounts. Such
term shall not include the Canadian Accounts.
"LOCKBOXES" is defined in paragraph 31(c)(ii) of this Lease.
"MASTER LEASE" means those certain lease agreements listed on Exhibit Q
attached hereto, dated November 10, 2004, pursuant to which Landlord leases or
subleases all the Sites from affiliates of Landlord.
"MASTER LEASE ADDITIONAL OBLIGATIONS" is defined in paragraph 6(h) of this
Lease.
"MEMBER" or "MEMBERS" means an owner or holder of a Membership as defined
in and pursuant to a Membership Contract.
"MEMBERSHIP" means any "Membership" as such term is defined in any
Membership Contract.
"MEMBERSHIP CONTRACT(S)" means any contract (including a retail installment
contract), agreement or other arrangement of Tenant's Subsidiaries (whether
entered into before, on or after the date of this Lease), as such may be
amended, supplemented or modified from time to time in accordance with the
provisions of this Lease, pursuant to which Tenant's Subsidiaries sell
Memberships to individuals or other consumers, thereby entitling such individual
or other consumer to access and use, or providing for an ownership interest in,
one or more of the campgrounds and associated facilities and amenities included
in the Premises.
"MEMBERSHIP CONTRACT RECEIVABLES" means all of Tenant's accounts and the
proceeds thereof (as defined under the UCC) eligible for recording as an asset
in the financial statements in which a Member is the account debtor or obligor
and which represent the unpaid portion of the purchase price of Memberships, as
provided in the applicable Membership Contracts, excluding, however, any
Membership Dues or proceeds thereof.
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"MEMBERSHIP DUES" means any annual or periodic dues or use fees due and
payable by a Member in accordance with the terms of a Membership Contract, other
than retail installment or lump sum payments made in connection with Membership
Contract Receivables.
"MEMBER USES" means any existing use of Members, including (1) the use of
trails for hiking, horseback riding, cross-country skiing, ATVs and snowmobiles
and (2) the use of waters for fishing, swimming, boating, boat launching and
related activities and (3) the use of open areas for picnicking and games.
"MERGER TRANSACTION" means the transaction evidenced by that certain
Agreement and Plan of Merger, as amended, pursuant to which Thousand Trails
Acquisition, Inc., merged into KTTI Holding Company, Inc.
"MHC LOAN" means the $12,250,000 loan from MHC Operating Limited
Partnership to Tenant.
"MHC TRUST" means MHC Trust, a Maryland real estate investment trust.
"MHC TT MASTER LEASE" is defined in paragraph 6(h) of this Lease.
"MOODY'S" means Xxxxx'x Investors Services, Inc. and its successors.
"MORTGAGE" means a mortgage, deed to secure debt, deed of trust or other
security instrument of like nature or any ground or underlying lease or other
document of like nature on all or any portion of the Premises or the Underlying
Premises given by Landlord or an affiliate of Landlord to a Mortgagee.
"MORTGAGEE" means any holder of a Mortgage with respect to the Premises,
Underlying Premises, or any part thereof and which has been identified as a
Mortgagee pursuant to a written notice from Landlord to Tenant, which notice
shall contain an executed copy of the Mortgage.
"NET CASUALTY PROCEEDS" means the compensation and/or insurance payments
net of the reasonable expenses of collecting such amounts incurred by Landlord,
any Mortgagee (but only in its capacity as Proceeds Trustee) or Tenant, and
received by any Mortgagee, Landlord or Tenant in respect of any portion of the
Premises by reason of and on account of a fire or other Casualty.
"NON-FEE OCCUPANCY AGREEMENTS" means those leases or other occupancy
agreements for Non-Fee Sites described opposite each such Non-Fee Site listed on
Exhibit M attached hereto.
"NON-FEE RENT" means all sums which are due and payable by Landlord, as
subtenant pursuant to the Non-Fee Occupancy Agreements.
"NON-FEE SITES" means those Sites shown on Exhibit M attached hereto, which
Sites are leased by affiliates of Landlord pursuant to the Non-Fee Occupancy
Agreements and leased to Landlord pursuant to the Master Lease.
"OAKZANITA SITE" is defined in paragraph 9(a) of this Lease.
11
"OPTION AGREEMENT" means that certain Option Agreement dated the date
hereof, 2006 among KTTI Holding Company, LLC, KTTI GP, LLC, Tenant and Trust.
"ORIGINAL LEASE" is defined in the first WHEREAS clause of this Lease.
"OTHER TAXES" is defined in paragraph 6(b) of this Lease.
"OVERDUE RATE" means the greater of: (i) twelve percent (12%) per annum or
(ii) the sum of five percent (5%) plus the prime interest rate as reported from
time to time in The Wall Street Journal, but in any event, if lower, the maximum
annual interest rate allowed by law for business loans (not primarily for
personal, family or household purposes); provided, however, if The Wall Street
Journal is no longer in existence or ceases to publish such information,
Landlord shall use the prime interest rate as reported in a comparable publicly
available publication selected by Landlord in its sole discretion.
"PA" is defined in paragraph 38(d) of this Lease.
"PATT" means PATT Holding Company, LLC.
"PER DIEM LATE CHARGE" means an amount equal to 0.1042% of the aggregate
annual Fixed Rent and projected Percentage Rent (as determined in paragraph (b)
of the definition of Percentage Rent) for the then current Lease Year. By way of
example, the Per Diem Late Charge which would be payable on Fixed Rent during
the First Restated Lease Period would be $18,255 per day.
"PERCENTAGE RENT" is defined and shall have the meaning specified in the
Basic Lease Information.
"PERMITTED DISTRIBUTION" is defined in paragraph 38(d) of this Lease.
"PERMITTED ENCUMBRANCES" means for each Site:
(a) Any of the following, which are not yet due and payable at the time in
question: (i) liens for water, sewer and other utility services and (ii) taxes,
assessments and other governmental charges (whether federal, state, local or
foreign) and Property Taxes;
(b) The easements, rights-of-way, encroachments, encumbrances, restrictive
covenants and other matters affecting the title to the Premises or any part
thereof (i) set forth on Exhibit C attached hereto and (ii) which Landlord may,
from time to time, place against the Premises pursuant to paragraphs 2(c) and 33
of this Lease;
(c) Any Subordination, Non-Disturbance and Attornment Agreement(s),
recorded or otherwise, which are provided to Tenant pursuant to paragraph 17 of
this Lease or as otherwise entered into by and among Landlord, Tenant and any
Mortgagee;
(d) Liens for taxes (whether federal, state, local or foreign) attributable
to any taxable period whether before, on or after the Commencement Date which
are being contested in good faith in accordance with the terms of this Lease by
Tenant and for which Tenant has established adequate reserves;
12
(e) This Lease and the rights, privileges and entitlements of Tenant
hereunder;
(f) The Master Lease; and
(g) Any Leasehold Mortgage granted in accordance with paragraph 19 of this
Lease.
"PERMITTED INVESTMENTS" means any one or more of the following obligations
or securities: (a) having a predetermined fixed dollar amount of principal due
at maturity that cannot vary or change; (b) bearing interest that may either be
fixed or variable but which is tied to a single interest rate index plus a
single fixed rate spread (if any) and moves proportionately with that index; and
(c) having the required ratings, if any, provided for in this definition:
(i) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of America or any
agency or instrumentality of the United States of America, the obligations of
which are backed by the full faith and credit of the United States of America,
that mature in thirty (30) calendar days or less after the date of issuance and
that do not have a "r" highlighter affixed to its rating;
(ii) time deposits, unsecured certificates of deposit, or bankers'
acceptances that mature in thirty (30) calendar days or less after the date of
issuance and are issued or held by any depository institution or trust company
incorporated or organized under the laws of the United States of America or any
State thereof and subject to supervision and examination by federal or state
banking authorities, so long as the commercial paper or other short-term debt
obligations of such depository institution or trust company are rated at xxxxx
"X0" and "P1" by S&P and Moody's, respectively, or such other rating as would
not result in the downgrading, withdrawal or qualification of the then-current
Credit Rating to pass-through certificates, as evidenced in writing, and that do
not have a "r" highlighter affixed to its rating;
(iii) repurchase agreements or obligations with respect to any
security described in clause (i) above where such security has a remaining
maturity of thirty (30) calendar days or less and where such agreement or
repurchase obligation has been entered into with a depository institution or
trust company (acting as principal) described in clause (ii) above;
(iv) money market funds that (i) are rated AAA by S&P and Aaa by
Moody's and (ii) have portfolio assets of at least $3,000,000,000;
(v) debt obligations bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States of America or
any state thereof which mature in thirty (30) calendar days or less from the
date of issuance, which debt obligations have ratings from Moody's and S&P in
the highest category possible, or such other rating as would not result in the
downgrading, withdrawal or qualification of the then-current Credit Rating to
any pass-through certificate and that do not have a "r" highlighter affixed to
its rating; provided, however, that securities issued by any particular
corporation will not be Permitted Investments to the extent that investment
therein will cause the then-outstanding principal amount of securities issued by
such corporation and held in the accounts established hereunder to exceed ten
percent (10%) of the sum of the aggregate principal balance and the aggregate
principal amount of all Permitted Investments in such accounts; and
13
(vi) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations) payable on demand or on a
specified date maturing in thirty (30) days or less after the date of issuance
thereof and which is rated in the highest category possible by Moody's and S&P
and that does not have a "r" highlighter affixed to such rating.
"PERMITTED USE" is defined in paragraph 3 of this Lease.
"PERSON" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust, trustee(s) of a
trust, unincorporated organization, or government or governmental authority,
agency or political subdivision thereof.
"PERSONAL PROPERTY" means the personal property described on Exhibit A-1(c)
attached hereto.
"PPSA" is defined in paragraph 41(n)(xv) of this Lease.
"PREMISES" is defined in paragraphs 2(a) and 2(b) of this Lease.
"PREMISES CONDITION STANDARD" is defined in paragraph 9(a) of this Lease.
"PRIMARY TERM" is defined in paragraph 4(a) of this Lease.
"PROCEEDS TRUSTEE" means a federally insured bank or trust company
designated by Landlord, subject to the prior approval of Tenant, such approval
not to be unreasonably withheld, delayed or conditioned; provided, however, if a
Mortgage encumbers the Premises or Underlying Premises, the Mortgagee thereunder
may, at its option, be appointed Proceeds Trustee for so long as such Mortgage
remains outstanding and such Mortgagee does not control Landlord and is not
controlled by or under common control with Landlord.
"PROMOTIONS AND DISCOUNTS RESERVE" is defined in paragraph 39 of this
Lease.
"PROMOTIONS AND DISCOUNTS RESERVE ACCOUNT" is defined in paragraph
31(b)(ii)(C) of this Lease.
"PROPERTY TAXES" is defined in paragraph 6(a) of this Lease.
"PROTEST NOTICE" is defined in paragraph 5(e)(i) of this Lease.
"RENEGOTIATED RENT" is defined in paragraph 5(e) of this Lease.
"RENT" is defined in paragraph 5(a)(iii) of this Lease.
"RENT ACCOUNT" is defined in paragraph 31(b)(ii) of this Lease.
"RESERVE ACCOUNTS" is defined in paragraph 31(b)(ii) of this Lease.
"RESTORATION FUND" is defined in paragraph 10 of this Lease.
"RESTRICTED HOLDERS" is defined in paragraph 38(h) of this Lease.
14
"RESTRICTED JUNIOR PAYMENT" means: (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock or other
equity security of, or ownership interest in, Tenant or any of its Subsidiaries
now or hereafter outstanding, except a dividend payable solely in shares of that
class of stock to the holders of that class; (ii) any redemption, conversion,
exchange, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of stock
or other equity security of, or ownership interest in, Tenant or any of its
Subsidiaries now or hereafter outstanding; and (iii) any payment made to retire,
or to obtain the surrender of, any outstanding warrants, options or other rights
to acquire shares of any class of stock or other equity security of, or
ownership interest in, Tenant or any of its Subsidiaries now or hereafter
outstanding.
"RPI" is defined in the definition of Gross Revenues in this Lease.
"RPI ACCOUNTS" means those certain deposit accounts nos. 0042024190,
0042850552 and 153492600157, captioned the "RPI Accounts Payable Account" the
"RPI Credit Card Receipts Account" and the "RPI Receipts Account," respectively,
each maintained at the Bank and all as more particularly described on Exhibit I
attached hereto.
"S&P" means Standard & Poor's Rating Service and its successors or assigns.
"SEASONAL RENTAL RESERVE ACCOUNT" is defined in paragraph 31(b)(ii)(D) of
this Lease.
"SECURITIES" means, collectively, all outstanding equity interests in
Tenant and all options, warrants or other rights of any kind to acquire such
equity interests.
"SITE" is defined in paragraph 2(b) of this Lease.
"SITE ASSESSMENTS" is defined in paragraph 26(d) of this Lease.
"SITE REVIEWERS" is defined in paragraph 26(d) of this Lease.
"SUBLEASED SITES" means those Sites leased to Landlord pursuant to the
Master Lease.
"SUBLEASING SUBSIDIARIES" means those Subsidiaries listed on Exhibit H
attached hereto, which Subsidiaries sublease the Sites or portions thereof from
Tenant pursuant to the Tenant Subleases.
"SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT" is defined in
paragraph 17(a) of this Lease.
"SUBSIDIARIES" means those corporations, partnerships, limited liability
companies, associations or other business entities which are wholly owned and
controlled by Tenant. A true, accurate and complete list of the Subsidiaries on
the date hereof is set forth on Exhibit E attached hereto. Exhibit E may be
amended from time to time in accordance with the terms hereof. Each of the
Subsidiaries is herein individually called a "SUBSIDIARY."
"SUBSIDIARY GUARANTY" means that certain Secured Guaranty dated as of
November 10, 2004 from each Subsidiary marked with an asterisk on Exhibit E
attached hereto, including the Subleasing Subsidiaries, together with any
additional Subsidiaries permitted in paragraph 38(a)
15
of this Lease, to Landlord, pursuant to which, among other things, each such
Subsidiary unconditionally guarantees the payment and performance of Tenant's
obligations under this Lease, all upon the terms and subject to the conditions
set forth therein, as such Subsidiary Guaranty is amended, modified or restated
from time to time. The Subsidiary Guaranty is secured by a lien on the assets of
each Subsidiary, including each Subsidiary's right, title and interest in and
under the Membership Contracts.
"SUBSIDIARY PLEDGE" means all of those certain Pledge Agreements by all
Subsidiaries marked with an asterisk on Exhibit E attached hereto, including the
Subleasing Subsidiaries, together with any additional Subsidiaries permitted in
paragraph 38(a) of this Lease, in favor of Landlord, dated as of November 10,
2004, pursuant to which each such Subsidiary has pledged one hundred percent
(100%) of its assets to Landlord, including each such Subsidiary's right, title
and interest in and under the Membership Contracts.
"SURPLUS CASH" means all cash of Tenant in excess of $3,000,000, after all
Reserve Accounts have been fully funded as provided in paragraph 31(d)(i) of
this Lease. Solely for purposes of paragraph 38(d) of this Lease, Surplus Cash
shall be calculated on the assumption that Landlord has made no discretionary
increases in the Accounts and such discretionary increases shall be included in
the calculation of Surplus Cash.
"TAX RESERVE" is defined in paragraph 6(f) of this Lease.
"TAX RESERVE ACCOUNT" is defined in paragraph 31(b)(ii)(A) of this Lease.
"TENANT" is defined in the first paragraph of this Lease.
"TENANT'S BUSINESS" is defined in paragraph 38(a) of this Lease.
"TENANT'S EQUITY INTEREST" means all of the equity interests in Tenant.
"TENANT'S MAINTENANCE, REPAIR AND REPLACEMENT ITEMS" is defined in
paragraph 9(a) of this Lease.
"TENANT'S MANNER OF OPERATION" is defined in paragraph 39 of this Lease.
"TENANT PLEDGE" means that certain Pledge Agreement by Tenant in favor of
Landlord, dated of even date herewith, pursuant to which Tenant pledged to
Landlord one hundred percent (100%) of the ownership interests in each
Subsidiary marked with an asterisk on Exhibit E attached hereto, including the
Subleasing Subsidiaries, together with any additional Subsidiaries permitted in
paragraph 38(a) of this Lease.
"TENANT SUBLEASES" means those sublease agreements as of November 10, 2004
herewith between the Subleasing Subsidiaries and Tenant; the form of such
sublease agreements is attached hereto as Exhibit H.
"TENANT'S TRADE FIXTURES" means all personal property of Tenant in or on
the Premises, affixed or not, which is not necessary for the operation of the
Improvements, including tire racks and handling equipment, pallets, fork lift
trucks, lift racks, tools, office computers, and other
16
equipment or machines owned or leased from/by Tenant, and specifically excludes
the Equipment.
"TERM" is defined in paragraph 4(b) of this Lease.
"TRANSFER EVENT" means the direct or indirect acquisition of all or
substantially all of the equity interests in PA and PATT in an acquisition
pursuant to which, upon consummation thereof, none of Xxx XxXxxxx, any member of
his immediate family or any Affiliate of Xxx XxXxxxx or any such family member
holds any equity interest, directly or indirectly, in the acquiror.
"TREASURY RATE" means the yield to maturity of a debt obligation of the
United States Treasury having a maturity date closest to but not earlier than
the then-existing remaining Term of this Lease (excluding any then-unexercised
options for any Extension Terms) and, if more than one have been issued with
such maturity date, then using the debt obligation first issued on or closest to
the date of any termination by Landlord under this Lease.
"TRIGGERING EVENT" is defined in paragraph 38(j) of this Lease.
"TRUST" means MHC T1000 Trust, a Maryland real estate investment trust.
"TTMS" is defined in the definition of Gross Revenues in this Lease.
"UCC" means the Uniform Commercial Code as in effect in the State of
Illinois.
"UNDERLYING PREMISES" means, collectively, the interest in the Land, the
Equipment, the Personal Property and the Improvements, together with any
easements, rights and appurtenances in connection therewith or belonging to said
Land and Improvements which is leased by an affiliate of Landlord to Landlord
under the Master Lease. When Landlord has physically developed (i.e., Landlord
has begun actual construction), in its sole discretion, any parcel of Excess
Land on which Property Taxes are billed on Excess Land and Campsite Land and the
Buffer Zones in a single tax xxxx, Landlord shall apply for separate tax bills
and upon approval thereof from appropriate tax authorities, Property Taxes on
the Excess Land shall no longer be paid by Tenant, and Excess Land shall cease
to be part of the Underlying Premises under this Lease at the time that Landlord
shall have received authorization for separate property tax bills from the
appropriate tax authority.
"VARIANCE PROGRAM" is defined in paragraph 39 of this Lease.
"VARIANCE PROGRAM DEPOSIT" is defined in paragraph 39 of this Lease.
"WORKING CAPITAL INDEBTEDNESS" means the MHC Loan incurred by Tenant owing
to Working Capital Lender pursuant to and in accordance with the Working Capital
Loan Documents or pursuant to any extensions, amendments, replacements or
refinancings of the Indebtedness evidenced by the Working Capital Loan Documents
and any replacement or substitution for the MHC Loan, provided, however, that
such replacement or substitution shall not exceed the original principal amount
of the MHC Loan.
17
"WORKING CAPITAL LENDER" means MHC Operating Limited Partnership, as maker
of the MHC Loan, or any successor lender under the Working Capital Loan
Documents.
"WORKING CAPITAL LOAN DOCUMENTS" means that certain loan agreement between
Tenant and the Working Capital Lender, and any notes issued in connection
therewith by Tenant or any of its Subsidiaries payable to the Working Capital
Lender relating to a working capital loan facility of Tenant, and all other
instruments, documents and agreements executed and delivered by any Affiliate
to, for or in favor of the Working Capital Lender in connection with the
transactions contemplated under any of the foregoing documents and includes all
documents that evidence or secure extensions, amendments, replacements and
refinancings of the Working Capital Indebtedness.
2. DEMISE OF PREMISES AND OTHER RIGHTS
(a) Landlord hereby demises and leases to Tenant and Tenant hereby leases
and rents from Landlord the Premises, IN ITS "AS IS" CONDITION, SUBJECT TO THE
EXISTING STATE OF TITLE (WITHOUT EXPRESS OR IMPLIED WARRANTY OF LANDLORD WITH
RESPECT TO THE CONDITION, QUALITY, REPAIR OR FITNESS OF THE PREMISES FOR A
PARTICULAR USE OR TITLE THERETO, ALL SUCH WARRANTIES BEING HEREBY DISCLAIMED BY
LANDLORD AND WAIVED AND RENOUNCED BY TENANT). The "PREMISES" consists of,
collectively, Landlord's interest in the Campsite Land and Buffer Zones, the
Equipment, the Personal Property and the Improvements, together with any
easements, rights and appurtenances in connection therewith or belonging to said
Campsite Land and Buffer Zones and Improvements. The foregoing disclaimer in
this paragraph 2(a) has been negotiated by Landlord and Tenant, each being
represented by independent counsel, and is intended as a complete negation of
any representation or warranty by Landlord, express or implied, with respect to
the condition, quality, repair, or fitness of the Premises for a particular use,
or title thereto.
(b) The Premises includes the Land, Equipment, Improvements and the
Personal Property located at each separate location; each individually is herein
called a "SITE," and together are herein called the "SITES."
(c) Landlord may, in its sole discretion, (1) encumber any of the Premises
or any Excess Land with such cross easements, reciprocal easements, agreements,
covenants, restrictions and other encumbrances, and (2) at Landlord's expense,
connect to any sewer, water, waste water, electric, gas, telephone, or any other
system or service then existing on or servicing the Premises, in each case as
Landlord may deem necessary, desirable or advisable to facilitate future
development of the Excess Land adjacent to such Premises, and nothing contained
herein shall limit or restrict such right, provided that (i) if any such
easement, agreement, covenant, restriction or other encumbrance impairs the
value of the Premises, Landlord shall (a) first attempt to mitigate such
impairment and, if such cannot be mitigated, then (b) pay to Tenant an amount
equal to such impairment for the remaining Term of the Lease, as Landlord and
Tenant may agree, and (ii) with respect to any such connection to any sewer,
water or waste water system then existing on or servicing the Premises that if
sufficient capacity does not exist for such connection, Landlord shall increase
such capacity and provided that Landlord shall, on demand, pay Tenant for
Landlord's pro rata share of ongoing expenses related to such utility
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hook-up. Tenant acknowledges and agrees that this Lease shall be subject and
subordinate to all such instruments and no further instrument of subordination
shall be required for its operation.
(d) Tenant may, from time to time, request that Landlord grant or obtain
easements over the Excess Land for water, electricity, gas and telephone lines
to serve and benefit the Premises adjacent to the Excess Land, at such locations
and containing such provisions as Landlord may approve in its sole discretion.
All costs and expenses for any such utility easements shall be paid by Tenant.
(e) Tenant may, from time to time, request that Landlord grant or obtain
for Tenant and its employees, invitees and guests of the Premises a temporary
license, which shall be revocable by Landlord at any time upon ten (10) days'
notice, to establish, maintain and use any Member Uses on the Excess Land
adjacent thereto, at such locations and subject to such rules and agreements
(including insurance requirements) as Landlord may approve in its sole
discretion. All costs and expenses for such temporary licenses shall be paid for
by Tenant as Additional Rent. Effective as of the Commencement Date, Landlord
hereby grants to Tenant and its employees, invitees and guests a temporary
license, which shall be revocable by Landlord at any time upon ten (10) days'
notice, to use and maintain in the locations on the Excess Land used and
maintained as of the Commencement Date, all existing Member Uses in effect as of
the Commencement Date. Tenant agrees to extend the insurance coverage otherwise
required by this Lease to include all uses by Tenant and its employees, invitees
and guests of the Excess Land.
3. USE
Tenant shall, subject to applicable zoning restrictions and any recorded
covenants or restrictions in the public records on the Commencement Date, use
and occupy the Premises, including each Site, only (i) predominantly as a
membership campground, together with minimal daily stay campground uses, (ii)
for cabin rentals, (iii) pursuant to Tenant's extended vacation, stay and
storage programs, (iv) in connection with lease arrangements entered into with
farmers prior to the date hereof and (v) for other lawful purposes which are
both associated with and related thereto (including the following ancillary
uses: ATM machines, cafeteria/food service and laundry facilities)
(collectively, the "PERMITTED USE"). Tenant shall not use, suffer or permit the
Premises, or any portion thereof, to be used by Tenant, any third party or the
public, as such, without restriction or in such manner as would be reasonably
likely to materially adversely affect Landlord's title to or interest in the
Premises, or in such manner as would be reasonably likely to make possible a
material claim or claims of adverse possession by the public, as such, or third
parties, or of implied dedication of the Premises, or any portion thereof.
4. TERM
(a) The primary term of this Lease (the "PRIMARY TERM") shall be for a
period of approximately fifteen (15) years, beginning on the Commencement Date
and ending on the Lease Expiration Date.
(b) Tenant shall have the right, at its option, to extend the Primary Term
of this Lease for two (2) consecutive extension terms (the "EXTENSION TERMS"),
each being five (5) years in length. Each Extension Term shall commence on the
day after the expiration of the preceding
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term (each, the "EXTENSION TERM COMMENCEMENT DATE") and shall expire on the
fifth (5th) anniversary of the Lease Expiration Date in the case of the first
(1st) Extension Term, and on the tenth (10th) anniversary of the Lease
Expiration Date in the case of the second (2nd) Extension Term. The options to
extend the Term of this Lease as described above shall not be deemed exercised
by Tenant unless at least twenty-four (24) months prior to the Lease Expiration
Date for the Primary Term or at least twenty-four (24) months prior to the
expiration of the Extension Term for the first (1st) Extension Term, Tenant
shall have delivered written notice to Landlord of Tenant's irrevocable election
to so extend this Lease at the end of the Primary Term or the first (1st)
Extension Term, as applicable. Tenant's failure to deliver one (1) such timely
notice to Landlord shall terminate all future Extension Terms, if any, following
the Extension Term to which such notice specifically relates. Subject to the
provisions of paragraph 5 of this Lease, the terms and conditions of this Lease
shall apply to each Extension Term with the same force and effect as if such
Extension Term had originally been included in the Primary Term of the Lease.
The right of Tenant to exercise its rights with respect to the Extension Terms
shall be conditioned upon this Lease being in full force and effect and no Event
of Default then existing as of the Lease Expiration Date (for the first (1st)
Extension Term), or expiration of the first (1st) Extension Term (for the second
(2nd) Extension Term). The Primary Term, together with any Extension Term with
respect to which Tenant properly exercises its option, and for which the
conditions related thereto are satisfied, shall constitute the "TERM" of this
Lease.
(c) Notwithstanding the foregoing, the Term of this Lease with respect to
the Non-Fee Sites shall terminate upon the expiration of the applicable Non-Fee
Occupancy Agreements and Tenant shall not be entitled to any abatement or
reduction of Rent, nor shall the obligations of Tenant under this Lease be
affected, by reason of such expiration of the applicable Non-Fee Occupancy
Agreements. Landlord shall not without Tenant's consent amend the Non-Fee
Occupancy Agreements such that Tenant would be materially adversely affected.
5. RENTAL; GUARANTY
(a) Tenant shall pay to Landlord the following amounts as Rent for the
Premises:
(i) During the Term of this Lease, Tenant shall pay to Landlord, (a)
as fixed annual rent, the amount of annual fixed rent specified in the Basic
Lease Information (as defined therein, "FIXED RENT") and (b) as a portion of
Additional Rent, the amount of the Percentage Rent specified in the Basic Lease
Information.
(ii) During the Term of this Lease, Tenant shall pay, as a portion of
Additional Rent, all sums, including Non-Fee Rent, due and payable by the tenant
under the Non-Fee Occupancy Agreements. Simultaneously with its payment of
Non-Fee Rent, Tenant shall give to Landlord evidence, satisfactory to Landlord,
of having done so.
(iii) Throughout the Term of this Lease, Tenant shall pay, as
Additional Rent, all other amounts of money and charges required to be paid by
Tenant under this Lease, whether or not such amounts of money or charges are
designated Additional Rent. As used in this Lease, "RENT" shall mean and include
all Fixed Rent and Additional Rent, including Percentage Rent, payable by Tenant
in accordance with this Lease.
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(b) It is the intention of Landlord and Tenant that the Fixed Rent and
Percentage Rent payable by Tenant to Landlord during the entire Term of this
Lease shall be absolutely net of all costs and expenses incurred in connection
with the management, operation, maintenance, repair and replacement of the
Premises and Underlying Premises in accordance with this Lease. Landlord shall
have no obligations or liabilities whatsoever with respect to the management,
operation, maintenance, repair or replacement of the Premises and Underlying
Premises during the Term of this Lease, and Tenant shall manage, operate,
maintain, repair and replace the Premises and Underlying Premises in accordance
with this Lease and shall pay all costs and expenses incurred in connection
therewith before such costs or expenses become delinquent. Without limiting the
generality of the foregoing, throughout the entire Term of this Lease, Tenant
shall pay, as Additional Rent, all premiums for all property and liability
insurance covering the Premises and Underlying Premises required under this
Lease, all Property Taxes and all Other Taxes that accrue during or are
allocable to the Term of this Lease, and all Property Taxes and Other Taxes
allocable to any period of time prior to the Term of this Lease. As part of the
annual Budget submitted to Landlord pursuant to paragraph 30 hereof, Tenant
shall provide Landlord a schedule of all such premiums, Property Taxes and Other
Taxes payable in the relevant fiscal year and simultaneously with the payment of
such premiums, Property Taxes and Other Taxes, Tenant shall give to Landlord
evidence, satisfactory to Landlord, of having done so.
(c) Tenant shall pay all Fixed Rent to Landlord, in advance, on or before
the first Business Day of each and every calendar month during the Term of this
Lease (other than the payment due on the Commencement Date which is due as set
forth in the Basic Lease Information) without notice, demand, deduction or
offset, in lawful money of the United States of America, to the wire transfer
address of Landlord specified in the Basic Lease Information, or to such other
accounts and/or Person or Persons or at such other place or places as Landlord
may from time to time designate in writing (or otherwise so there are collected
funds available to Landlord on the due date). Percentage Rent shall be paid as
set forth in the Basic Lease Information. If the Fixed Rent or Percentage Rent
is paid more than five (5) Business Days after its due date, the Per Diem Late
Charge shall be due and payable for each day thereafter until the Fixed Rent or
Percentage Rent is paid in full. Tenant shall pay all Additional Rent, including
Percentage Rent, when due. Tenant shall pay all Fixed Rent and Percentage Rent
to Landlord without notice.
(d) Tenant acknowledges and agrees that it was a condition precedent to
Landlord entering into this Lease that Landlord receive the Guaranty from
Guarantors and the Subsidiary Guaranty from the Subsidiaries marked with an
asterisk on Exhibit E attached hereto, which Guaranty and Subsidiary Guaranty
are being entered into contemporaneously with the execution of this Lease.
Tenant hereby represents and warrants to Landlord as of the date hereof and
covenants to Landlord that throughout the Term of this Lease, Guarantors shall
be bound by the terms of the Guaranty to Landlord and the Subsidiaries marked
with an asterisk on Exhibit E attached hereto shall be bound by the terms of the
Subsidiary Guaranty to Landlord.
(e) On the day after the fifth anniversary of the last day of the First
Restated Lease Period, and, thereafter, on every fifth anniversary thereof, the
Fixed Rent and, Percentage Rent payable hereunder (the "RENEGOTIATED RENT")
shall be adjusted and Tenant shall make payments of Rent as so adjusted
beginning with each such anniversary. Landlord and Tenant shall renegotiate the
Fixed Rent and Percentage Rent payable hereunder, and in accordance with this
paragraph 5(e).
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(i) On November 1, 2011 and each five (5) year anniversary of such
date thereafter, Landlord shall prepare and deliver to Tenant written notice of
its determination of the Renegotiated Rent. Within fifteen (15) days following
such delivery, Tenant may deliver written notice (the "PROTEST NOTICE") to
Landlord of any disagreement that Tenant may have as to such Renegotiated Rent.
Such Protest Notice shall set forth in reasonable detail the basis of such
disagreement. The failure of Tenant to deliver such Protest Notice within the
prescribed time period will constitute Tenant's acceptance of the Renegotiated
Rent determination delivered by Landlord and all Fixed Rent and Percentage Rent
hereunder shall be equal to the Renegotiated Rent as determined by Landlord.
(ii) If Tenant timely delivers a Protest Notice and Tenant and
Landlord are unable to resolve any disagreement as to the Renegotiated Rent
within fifteen (15) days following Landlord's receipt of the Protest Notice,
Landlord shall have the option of allowing Tenant to occupy the Premises on the
terms of the then existing Lease or of terminating this Lease. If Landlord
chooses to allow Tenant to occupy the Premises on the terms of the then existing
Lease, it shall deliver to Tenant written notice of its intention within thirty
(30) days of so choosing. If Landlord chooses not to continue this Lease in
accordance with the previous sentence, this Lease shall automatically terminate
on January 15 of the succeeding year and Tenant shall thereupon vacate the
Premises pursuant to paragraph 22 hereof. Notwithstanding anything herein to the
contrary, if Xxx X. XxXxxxx has received a Permitted Distribution, all increases
in Rent pursuant to this paragraph 5(e) (but not any other Rent increases under
this Lease) shall be deferred until cash is available after the payment of
Distribution Indebtedness.
6. TAXES
(a) Tenant shall pay, as Additional Rent, all Property Taxes prior to the
assessment of any interest or penalty for late payment and shall indemnify and
hold harmless Landlord, its affiliates, officers, directors, stockholders,
employees, representatives, members, partners and agents, and the successors and
assigns of each of the foregoing (collectively, the "LANDLORD PARTIES"), on an
After-Tax Basis from and against any such Property Taxes (including any
penalties and interest with respect thereto) (subject to Tenant's rights under
this paragraph 6(a) to make payment thereof in installments or under paragraph
6(e) of this Lease to protest Property Taxes); provided, however, if and to the
extent Landlord or Mortgagee is holding Tenant's estimated payments thereof
pursuant to paragraph 6(f) of this Lease and provided no Event of Default then
exists, Landlord, pursuant to paragraph 31(e)(iii), or Mortgagee shall instead
make such payments timely on Tenant's behalf; provided, further, if any such
Property Taxes may legally be paid in installments, Tenant may, at its option,
pay such Property Taxes in such installments together with any interest due
thereon provided that Tenant shall have paid all such installments, or provided
to Landlord or Mortgagee such amounts as are necessary for the payment of all
such installments, prior to the expiration or earlier termination of this Lease.
"PROPERTY TAXES" shall mean all taxes, assessments, excises, levies, fees and
charges (and any tax, assessment, excise, levy, municipal service fee, fee or
charge levied wholly or partly in lieu thereof or as a substitute therefor or as
an addition thereto) of every kind and description, general or special, ordinary
or extraordinary, foreseen or unforeseen, secured or unsecured, whether or not
now customary or within the contemplation of Landlord and Tenant, that are
levied, assessed, charged, confirmed or imposed by any public or government
authority on or against, or otherwise with respect to, the Premises and
Underlying Premises, or any part thereof or any personal property used in
connection with the Premises and Underlying Premises, including
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Landlord's franchise taxes based upon gross receipts with respect to the receipt
of Rent (but not including Excluded Taxes). Property Taxes shall not include any
Other Taxes or Excluded Taxes arising out of or levied in connection with this
Lease, in each case, of Landlord, unless and only to the extent levied or
assessed against Landlord in whole or in part in lieu of, as a substitute for,
or as an addition to any Property Taxes. When Landlord has physically developed
(i.e., Landlord has begun actual construction), in its sole discretion, any
parcel of Excess Land on which Property Taxes are billed on Excess Land and
Campsite Land and the Buffer Zones in a single tax xxxx, Landlord shall apply
for separate tax bills and upon approval thereof from appropriate tax
authorities, Property Taxes on the Excess Land shall no longer be paid by
Tenant.
(b) Tenant shall pay, as Additional Rent, all Other Taxes prior to the
assessment of any interest or penalty for late payment and shall indemnify and
hold harmless Landlord and the Landlord Parties on an After-Tax Basis from and
against any such Other Taxes (including any penalties and interest with respect
thereto) (subject to Tenant's rights under this paragraph 6(b) and paragraph
6(e) of this Lease to make payment in installments or to protest Other Taxes);
provided, however, if Landlord or Mortgagee is holding Tenant's estimated
payments thereof pursuant to paragraph 6(f) of this Lease and provided no Event
of Default then exists, Landlord, pursuant to paragraph 31(e)(iii), or Mortgagee
shall instead make such payments timely on Tenant's behalf; provided, further,
if any such Other Taxes may legally be paid in installments, Tenant may, at its
option, pay such Other Taxes in such installments together with any interest due
thereon provided that Tenant shall have paid all such installments, or provided
to Landlord or Mortgagee such amounts as are necessary for the payment of all
such installments, prior to the expiration or earlier termination of this Lease.
"OTHER TAXES" shall mean all taxes, assessments, excises, levies, fees and
charges, including all payments related to the cost or occupation of providing
facilities or services, whether or not now customary or within the contemplation
of Landlord and Tenant, that are levied, assessed, charged, confirmed or imposed
by any public or government authority upon, or measured by, or reasonably
attributable to (i) the Premises and Underlying Premises, (ii) the cost or value
of Tenant's equipment, furniture, fixtures and other personal property located
in the Premises or the cost or value of any leasehold improvements made in or to
the Premises by or for Tenant, regardless of whether title to such improvements
is vested in Tenant or Landlord, (iii) any amount payable under this Lease,
including any gross receipts tax or excise tax levied by any public or
government authority with respect to the receipt of any such amount, (iv) the
possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises, or (v) this transaction or any document
to which Tenant is a party creating or transferring an interest or an estate in
the Premises or Underlying Premises. "Other Taxes" shall not include any
Property Taxes or any Excluded Taxes arising out of or levied in connection with
this Lease, in each case, of Landlord, unless and only to the extent levied or
assessed against Landlord in whole or in part in lieu of, as a substitute for,
or as an addition to any Other Taxes.
(c) Except for any Excluded Taxes imposed on or with respect to the Rent,
if at any time during the Term any method of taxation shall be such that there
shall be levied, assessed or imposed on Landlord, or on the Rent, or on the
Premises, Underlying Premises, or any portion thereof, a capital levy, gross
receipts tax on the Rent, occupational license tax or franchise tax, based upon
gross receipts with respect to the Rent, but not including any income or
franchise taxes based upon, measured by or calculated with respect to net income
or profits, Tenant, to the extent permitted by law, covenants to pay and
discharge the same, it being the intention of the
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parties hereto that the Fixed Rent and Percentage Rent to be paid hereunder
shall be paid to Landlord absolutely net without deduction or charge of any
nature whatsoever, foreseeable or unforeseeable, ordinary or extraordinary, or
of any nature, kind or description, except for Excluded Taxes and as otherwise
expressly provided in this Lease. Notwithstanding the foregoing, to the extent
Landlord incurs any tax liability pursuant to the Trails Reorganization (as
defined in the Merger Transaction) or for a Pre-Closing Taxable Period (as
defined in the Merger Transaction), payment of such tax liabilities, if any,
shall not be governed by this Lease but shall be governed by the Merger
Transaction.
(d) Tenant covenants to furnish Landlord, within fifteen (15) calendar days
after written request by Landlord, official receipts of the appropriate taxing
authority, if any, or other appropriate proof reasonably satisfactory to
Landlord, evidencing the payment of all Impositions.
(e) Tenant shall have the right to contest the amount or validity, in whole
or in part, of any Property Tax or Other Tax or to seek a reduction in the
valuation of the Premises and/or Underlying Premises, as assessed for real
estate property tax purposes, by appropriate proceedings diligently conducted in
good faith (but only after the deposit or payment (whether under protest or
otherwise) of any amounts required by applicable law to stay or prevent
collection activities). Landlord shall not be required to join in any proceeding
referred to in this paragraph 6(e) except to the extent required by law, in
which event Landlord shall, upon written request by Tenant, join in such
proceedings or permit the same to be brought in its name, all at Tenant's
expense. Landlord agrees to provide, at Tenant's expense, whatever assistance
Tenant may reasonably require in connection with any such contest. Tenant
covenants that Landlord shall not suffer or sustain any costs or expenses
(including counsel fees) or any liability in connection with any such
proceeding. No such consent shall subject Landlord to any civil liability or the
risk of any criminal liability or forfeiture.
(f) Tenant acknowledges that Landlord will establish and maintain a reserve
account for the payment of Property Taxes and Other Taxes relating to the
Premises and Underlying Premises which shall become due and payable during each
Lease Year, as reasonably estimated by Landlord on the basis of assessments and
bills and estimates thereof ("TAX RESERVE") in accordance with paragraph 31 of
this Lease. Tenant is expected to pay Property Taxes and Other Taxes from its
own funds and the Tax Reserve shall be maintained as additional security
hereunder, provided, however, that Tenant may request funds pursuant to
paragraph 31(e)(iii). Landlord and Mortgagee shall make no charge for holding
and applying such amounts.
(g) Landlord will, within thirty (30) calendar days after receipt,
reimburse Tenant for any refund of Property Taxes or Other Taxes received by
Landlord or Mortgagee as a result of any tax contest relating to the Term.
(h) In addition to the forgoing (and without duplication), if (x) Landlord
or any affiliate of Landlord incurs any tax, assessment, excise, lien, fee,
charge or liability, including franchise, lease and income taxes, arising from
the Master Lease from MHC TT, Inc., a Delaware corporation, as landlord, to
Landlord, as tenant (the "MHC TT MASTER LEASE") (including the items described
in clause (i) of the definition of Excluded Taxes, but excluding property taxes
attributable to the Excess Land, collectively, the "MASTER LEASE ADDITIONAL
OBLIGATIONS") and (y) Landlord and its Affiliates would not have incurred the
Master Lease Additional Obligations had Landlord owned the fee interest in the
Fee Sites owned by MHC XX,
00
Inc. and the MHC TT Master Lease not existed, then Tenant shall pay the Master
Lease Additional Obligations on an After-Tax Basis, as Additional Rent, prior to
the assessment of any interest or penalty for late payment and shall indemnify
and hold harmless Landlord and the Landlord Parties on an After-Tax Basis from
and against any claims for payment thereof.
7. NET LEASE; NON-TERMINABILITY
(a) This is an absolutely net lease and the Fixed Rent, Additional Rent,
including Percentage Rent and all other sums payable hereunder by Tenant shall
be paid without notice (except as expressly provided herein), demand, set-off,
counterclaim, abatement, suspension, deduction or defense. It is the intention
of the parties hereto that the Fixed Rent and Percentage Rent shall be an
absolutely net return to Landlord throughout the Term of this Lease. In order
that such Rent shall be absolutely net to Landlord, Tenant shall pay when due,
and save and hold harmless Landlord and the Landlord Parties on an After-Tax
Basis from and against, any and all costs, charges and expenses attributable to
the Premises or Underlying Premises, including all fines, fees, penalties,
charges (including governmental charges), assessments, sewer rents, Impositions,
insurance premiums as may be required from time to time by Landlord or Mortgagee
pursuant to this Lease, utility expenses, carrying charges, costs, expenses and
obligations of every kind and nature whatsoever, general and special, ordinary
and extraordinary, foreseen and unforeseen, the payment for which Landlord or
Tenant is, or shall become, liable by reason of any rights or interest of
Landlord or Tenant in, to or under the Premises or Underlying Premises or this
Lease or in any manner relating to the ownership, leasing, operation,
management, maintenance, repair, rebuilding, use or occupation of the Premises
or Underlying Premises, or of any portion thereof; provided, however, that
nothing herein contained shall be construed as imposing upon Tenant any
obligation to pay any Excluded Taxes of Landlord arising out of, or levied in
connection with, this Lease or Landlord's right or interest in the Premises or
the Rent. All fees and expenses incurred in connection with the negotiation and
execution of this Lease, including all legal, accounting, financial advisory,
title insurance, environmental inspection, consulting and all other fees and
expenses of third parties incurred by a Person in connection with the
negotiation of the terms and conditions of this Lease shall be the obligation of
the respective Person incurring such fees and expenses; provided, however that
Tenant, on the one hand, and Landlord, on the other hand, shall share equally
the costs related to preparation of surveys of the Sites listed on Exhibit F
attached hereto.
(b) This Lease shall not terminate, nor shall Tenant have any right to
terminate this Lease, except as expressly provided in paragraph 14 of this
Lease, nor shall Tenant be entitled to any abatement or reduction of Rent
hereunder except as required by paragraph 14 of this Lease, nor shall the
obligations of Tenant under this Lease be affected, by reason of (i) any damage
to or destruction of all or any part of the Premises from whatever cause; (ii)
subject to paragraph 14 of this Lease, the taking of the Premises, Underlying
Premises, or any portion thereof by condemnation, requisition or eminent domain
proceedings; (iii) the prohibition, limitation or restriction of Tenant's use of
all or any part of the Premises, or any interference with such use; (iv) any
eviction by paramount title or otherwise; (v) Tenant's acquisition or ownership
of all or any part of the Premises or Underlying Premises otherwise than as
expressly provided herein; (vi) any default on the part of Landlord under this
Lease, or under any other agreement to which Landlord and Tenant may be parties;
(vii) Landlord becoming dispossessed of any portion of the Premises subleased by
Landlord pursuant to the Non-Fee Occupancy Agreements; or (viii) any other cause
whether similar or dissimilar to the foregoing, any present or future law to the
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contrary notwithstanding. It is the intention of the parties hereto that the
obligations of Tenant hereunder shall be separate and independent covenants and
agreements, that the Fixed Rent, Percentage Rent, the Additional Rent and all
other sums payable by Tenant hereunder shall continue to be payable in all
events and that the obligations of Tenant hereunder shall continue unaffected
unless the requirement to pay or perform the same shall have been terminated
pursuant to any express provision of this Lease. Tenant agrees that Tenant shall
not be relieved of the obligations to pay the Fixed Rent or any Additional Rent
in case of damage to or destruction of or condemnation (except as expressly
provided in paragraph 14 of this Lease) of the Premises or the Underlying
Premises.
(c) Tenant agrees that it shall remain obligated under this Lease in
accordance with its terms, and that it shall not take any action to terminate,
rescind or void this Lease, notwithstanding (i) any bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution or
winding-up or other proceeding affecting Landlord or its successor in interest,
or (ii) any action with respect to this Lease which may be taken by any trustee
or receiver of Landlord or its successor in interest or by any court in any such
proceeding.
(d) Tenant waives all rights which may now or hereafter be conferred by law
(i) to quit, terminate or surrender this Lease or the Premises or any part
thereof, or (ii) to any abatement, suspension, deferment or reduction of the
Fixed Rent, Additional Rent or any other sums payable under this Lease, except
as otherwise expressly provided herein.
8. SERVICES
Tenant shall, at Tenant's sole cost and expense, be responsible for
supplying the Premises with electricity, heating, ventilating and air
conditioning, water, natural gas, lighting, replacement for all lights, restroom
supplies, telephone service, window washing, security service, janitor, pest
control and disposal services (including, if applicable, hazardous and
biological waste disposal), and such other services as Tenant determines to
furnish to the Premises. Landlord shall not be in default hereunder or be liable
for any damage or loss directly or indirectly resulting from, nor shall the
Fixed Rent, or Additional Rent, including Percentage Rent be abated or a
constructive or other eviction be deemed to have occurred by reason of, the
installation, use or interruption of use of any equipment in connection with the
furnishing of any of the foregoing services, any failure to furnish or delay in
furnishing any such services, whether such failure or delay is caused by
accident or any condition beyond the control of Landlord or Tenant or by the
making of repairs or improvements to the Premises, or any limitation,
curtailment, rationing or restriction on use of water, electricity, gas or any
form of energy serving the Premises, whether such results from mandatory
governmental restriction or voluntary compliance with governmental guidelines.
Tenant shall pay the full cost of all of the foregoing services and all other
utilities and services supplied to the Premises as Additional Rent.
9. REPAIRS AND MAINTENANCE; REPLACEMENT
(a) Tenant shall, at its own sole cost and expense, keep the Premises,
including each Site therein, in substantially the same order and condition as
existed on the Commencement Date (provided that the order and condition existing
on the Commencement Date shall be deemed to include that all Immediate Repairs
required to be performed pursuant to this Lease and all repairs to the Site
commonly known as Oakzanita Springs in San Diego County, California (the
26
"OAKZANITA SITE," which Tenant shall use its best efforts to complete promptly),
have been completed) (the "PREMISES CONDITION STANDARD"), at all times on and
after the Commencement Date to and including the date of the termination of the
Term, by lapse of time or otherwise. Tenant shall timely and properly maintain,
repair and replace all of the Premises and all of its component parts (the
"TENANT'S MAINTENANCE, REPAIR AND REPLACEMENT ITEMS"), including parking
surfaces and stripes, driveways, roads, private streets, picnic tables,
campground sites and/or pads, pedestals, campground and recreational vehicle
infrastructure, all landscaping, mechanical systems, electrical and lighting
systems, plumbing and sewage systems, wastewater systems, water plants and
related facilities, septic system facilities, fixtures and appurtenances,
interior and exterior walls, roofs, foundations, floor slabs, columns and
structural elements so as to maintain each Site in accordance with the Premises
Condition Standard and to preserve and protect the useful life, utility and
value of such components, and in all events so as to preserve the effectiveness
of any warranty relating thereto. Tenant shall deliver to Landlord a written
statement showing all removals and replacements of such systems or components
with a cost exceeding $100,000.00 during the preceding calendar year. Landlord
may cause independent private inspectors to make inspections of any building and
building systems on the Premises or segments thereof to determine Tenant's
compliance under this paragraph 9. Tenant shall pay all reasonable costs of each
inspection at each Site by or on behalf of Landlord in each calendar year; and,
if such inspection by Landlord reveals that the Premises, or any material
portion thereof, including any equipment thereon, is not substantially in the
condition required by this Lease, then Tenant shall pay for such additional
inspections performed by Landlord through the inspection approving the condition
of such Premises as being substantially in conformity with this Lease.
(b) Landlord may, but is not required to, enter the Premises at any time
during normal business hours and make such repairs, alterations, improvements,
additions, replacements or maintenance as Landlord deems necessary to cure any
Event of Default of Tenant hereunder which remains uncured after the expiration
of any notice and cure period provided under this Lease, as applicable, in a
diligent fashion, and Tenant shall pay Landlord as Additional Rent forthwith
(and in any event within thirty (30) days) after being billed for same by
Landlord the cost thereof plus an administrative fee of five percent (5%) of
such cost, which xxxx shall be accompanied by reasonable supporting
documentation. Such amounts shall bear interest at the Overdue Rate from the
date of expenditure by Landlord to the date of repayment by Tenant.
(c) It is intended by Tenant and Landlord that Landlord shall have no
obligation, in any manner whatsoever, to repair or maintain the Premises (or any
fixture or equipment therein), whether structural or nonstructural, all of which
obligations are intended, as between Landlord and Tenant, to be those of Tenant.
Tenant expressly waives the benefit of any statute now or in the future in
effect which would otherwise afford Tenant the right to make repairs at
Landlord's expense or to terminate this Lease because of Landlord's failure to
keep the Premises in good order, condition and repair.
(d) Tenant shall use commercially reasonable efforts to maintain on each
Site, and deliver to Landlord upon expiration or termination of this Lease, then
current operating manuals and original warranties (to the extent applicable) for
the Equipment and Personal Property then located on such Site, specifically
excluding, in all cases, Tenant's Trade Fixtures at the Premises which may be
and which are subsequently removed by Tenant upon expiration or earlier
termination of this Lease.
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10. DESTRUCTION OF OR DAMAGE TO PREMISES
If any Site is damaged by fire or other Casualty during the Term of this
Lease, Tenant shall (a) repair such damage and restore such Site to
substantially the same or better condition as existed before the occurrence of
such fire or other Casualty, using materials of the same or better grade than
that of the materials being replaced (herein, a "CASUALTY REPAIR"), and this
Lease shall remain in full force and effect. Such repair and replacement by
Tenant shall be done in accordance with paragraph 23 of this Lease and the
standards of paragraph 9 of this Lease and Tenant shall, at its expense, obtain
all permits required for such work. An architect or engineer selected by
Landlord shall review (except with respect to the existing damage at the
Oakzanita Site), at Tenant's expense, all plans and specifications for any
Casualty Repair with a cost equal to or greater than $50,000 and all draw
requests related thereto. In no event shall Fixed Rent or Additional Rent xxxxx,
nor shall this Lease terminate by reason of such damage or destruction. Provided
that no Event of Default by Tenant shall then exist under this Lease (and no
event has occurred which, with the passage of time, the giving of notice, or
both, would constitute an Event of Default), and provided Tenant has: (i)
delivered to Landlord plans and specifications and a budget for such Casualty
Repair (all of which Landlord shall have approved), and (ii) deposited with
Landlord or the Proceeds Trustee cash in the sum equal to the excess, if any, of
the total cost set forth in such approved budget over the amount of insurance
proceeds received on account of such Casualty, then to the extent such proceeds
are made available to Landlord from Mortgagee, Landlord shall make available to
Tenant all insurance proceeds actually received by Landlord on account of such
Casualty, for application to the costs of such approved repair and restoration,
as set forth below.
For all Casualty Repairs, the following shall apply:
As used herein the "CASUALTY THRESHOLD" means $50,000; provided, however
that the Casualty Threshold shall not apply to the existing damage at the
Oakzanita Site. If the Net Casualty Proceeds are less than the Casualty
Threshold at the time of the applicable fire or other Casualty, such Net
Casualty Proceeds shall be paid to Tenant to apply to the cost of restoration.
If the Net Casualty Proceeds are equal to or greater than the Casualty Threshold
at the time of the applicable fire or other casualty, such Net Casualty Proceeds
shall be paid to the Proceeds Trustee (herein called the "RESTORATION FUND") for
release to Tenant as restoration progresses, subject to and in accordance with
paragraph 23(c) of this Lease. If Landlord encumbers the Premises or the
Underlying Premises with a Mortgage, the Mortgagee thereunder may, at its
option, be appointed Proceeds Trustee for so long as such Mortgage remains
outstanding and such Mortgagee does not Control Landlord and is not Controlled
by or under Common Control with Landlord. Insurance proceeds shall be deposited
in an interest bearing account and interest shall be distributed to Tenant upon
completion of said installation, repair, replacement or rebuilding, provided no
default has occurred and is continuing hereunder. All checks drawn on said
account shall be signed by the Proceeds Trustee. Insurance proceeds shall be
disbursed to Tenant by the Proceeds Trustee under the following procedure:
(i) No more frequently than once per calendar month, Tenant may
request that Landlord disburse to Tenant such insurance proceeds as are
requested by Tenant to pay for all costs incurred by Tenant for repair and
restoration work on the damaged Site that was performed during the immediately
preceding calendar month. Tenant's request shall certify that all work for which
reimbursement is requested was performed in substantial compliance with the
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plans and specifications approved by Landlord pursuant to paragraph 23 of this
Lease and all applicable laws, and shall include reasonably satisfactory
evidence of the costs incurred by Tenant and unconditional partial (as to the
amount received compared to percentage of completion) or final lien releases, as
applicable, in form and substance required by applicable law executed by all
mechanics, materialmen, laborers, suppliers and contractors who performed any
portion of the repair and restoration work or supplied materials; and
(ii) Within ten (10) Business Days after receiving Tenant's request,
Landlord shall approve or disapprove Tenant's request, which approval shall not
be unreasonably withheld, delayed or conditioned, by written notice to Tenant.
If Landlord approves all or any portion of a request and Landlord has received
(and not previously disbursed) insurance proceeds for such costs, then
Landlord's approval shall include a check in the amount approved by Landlord. If
Landlord disapproves all or any portion of a request, then Landlord's notice
shall state the reasons for that disapproval. Landlord's failure to deliver a
notice approving or disapproving a request shall be conclusively deemed
Landlord's disapproval of the request.
11. INSURANCE, HOLD HARMLESS AND INDEMNIFICATION
(a) To the fullest extent permitted by law, Landlord and the Landlord
Parties shall not be liable to Tenant or any Affiliate for any damage to or loss
or theft of any property or for any bodily or personal injury, illness or death
of any Person in, on or about the Premises arising at any time and from any
cause whatsoever, unless and to the extent due to the gross negligence or
willful misconduct of the Landlord Parties. Except as provided in this paragraph
11(a), Tenant waives all claims against Landlord and the Landlord Parties
arising from any liability described in this paragraph 11(a).
(b) Tenant hereby agrees to indemnify and defend Landlord and the Landlord
Parties against and hold each such Person harmless on an After-Tax Basis from
all claims, demands, liabilities, damages, losses, costs and expenses, including
attorneys' fees and disbursements, arising from or related to any use or
occupancy of the Premises, or any condition of the Premises, or any default in
the performance of Tenant's obligations hereunder, or any damage to any property
(including property of employees and invitees of Tenant) or any bodily or
personal injury, illness or death of any person (including employees and
invitees of Tenant) occurring in, on or about the Premises or any part thereof
or any part of the buildings or the land constituting a part of the Premises
arising on or after the date hereof from any cause whatsoever, or occurring
outside the Premises when such damage, bodily or personal injury, illness or
death is caused by any act or omission of Tenant or its agents, officers,
employees, contractors, invitees or licensees or any default in the performance
of Tenant's obligations under the Frisco Lease. This paragraph 11(b) shall
survive the termination of this Lease with respect to any damage, bodily or
personal injury, illness or death or any default in the performance of Tenant's
obligations under the Frisco Lease occurring prior to such termination.
(c) Tenant shall at all times provide, maintain and keep in force or cause
to be provided, maintained and kept in force, at no expense to Landlord, the
following policies of insurance with respect to the Premises, Underlying
Premises and Tenant, as applicable (collectively, the "POLICIES"):
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(i) Property insurance on an "all risk" and "special perils" basis
(special form cause of loss) for one hundred percent (100%) of the replacement
value of each Site, as applicable, with customary deductibles as approved by
Landlord. The policy shall contain the following endorsements: (a) Replacement
Cost (without any deduction made for depreciation); (b) Agreed Amount (waiving
co-insurance penalties); (c) a standard landlord clause acceptable to Landlord;
and (d) a standard mortgagee clause acceptable to Mortgagee, if any. Each such
policy shall also include the following coverage if applicable: (i)
comprehensive boiler and machinery coverage in amounts as determined by
Landlord; (ii) earthquake and earth movement for the full replacement cost of
the subject Site, or the amount as would (in light of the risks insured and the
cost of premiums for such insurance) in Landlord's judgment be maintained by a
prudent operator of property similar in use and locale; and (iii) flood
insurance if the Improvements located on a Site are located in a special flood
hazard area as designated by the Director of the Federal Emergency Management
Agency, in sufficient amounts as reasonably determined by Landlord, provided
that such coverage in such amounts is generally available at commercially
reasonable costs.
(ii) Insurance against rent loss, extra expense or business
interruption, in amounts satisfactory to Landlord. The perils covered by this
policy shall be the same as those accepted on each Site including flood,
earthquake and earth movement.
(iii) Commercial general liability insurance covering bodily injury
and property damage occurring on, in or about each Site and, to the extent
applicable, any adjoining streets, sidewalks, and passageways arising out of or
connected with the possession, use, leasing, operation, or condition of any
Site. Policy limits shall be not less than $1,000,000 per occurrence, $2,000,000
per location in the aggregate with respect to a Site and $1,000,000 per
occurrence, $2,000,000 per location in the aggregate with respect to Tenant.
Such coverage shall include but not be limited to premises, operations,
products/completed operations, personal injury and liquor liability (if
applicable).
(iv) Umbrella excess liability insurance for not less than $25,000,000
per occurrence with respect to Tenant, subject to an aggregate cap of not less
than $25,000,000.
(v) Worker's Compensation and other statutory coverage as required by
the state where each Site is located to protect Tenant, Landlord and any
Mortgagee against claims for injuries sustained in the course of employment at
such Site.
(vi) When and to the extent required by Landlord, fidelity insurance
and insurance against loss or damage by any other risk commonly insured against
by Persons (or which would be insured against by a reasonably prudent Person)
occupying or using like properties in the locality or localities in which a Site
is situated.
(d) All insurance policies required pursuant to this Lease shall be
endorsed to provide that: (i) Landlord is named as an additional insured with
respect to the all risk property coverage; as a loss payee with respect to all
rent/business interruption/extra expense coverage; as additional insured on all
liability coverage, with the understanding that any obligation imposed upon the
insureds (including the liability to pay premiums) shall be the sole obligation
of Tenant and not of any other insured; (ii) Mortgagee, its successors and/or
assigns, is named as mortgagee with respect to the all risk property coverage;
as a loss payee with respect to all
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rent/business interruption/extra expense coverage; and as additional named
insured on all liability coverage, with the understanding that any obligation
imposed upon the insureds (including the liability to pay premiums) shall be the
sole obligation of Tenant and not of any other insured; (iii) the interests of
Landlord or any Mortgagee shall not be invalidated by any action or inaction of
Tenant or any other Person, and such policies shall insure Landlord and any
Mortgagee regardless of any breach or violation by Tenant or any other Person of
any warranties, declarations or conditions in such policies; (iv) the insurer
under each such policy shall waive all rights of subrogation against Landlord or
any Mortgagee, any right to set-off and counterclaim and any other right to
deduction, whether by attachment or otherwise; (v) such insurance shall be
primary and without right of contribution of any other insurance carried by or
on behalf of Landlord or any Mortgagee with respect to its interest in the
Premises or Underlying Premises; (vi) if such insurance is canceled for any
reason whatsoever, including nonpayment of premium or, if any substantial
modification, change or reduction is made in the coverage which affects the
interests of Landlord or any Mortgagee, such cancellation, modification, change
or reduction in coverage shall not be effective as to Landlord or Mortgagee
until thirty (30) days after receipt by Landlord and Mortgagee of written notice
sent by registered mail from such insurer; (vii) any such insurance shall be
endorsed to provide inasmuch as the policy is written to cover more than one
insured, all terms, conditions, insuring agreements and endorsements with the
exception of limits of liability, shall operate in the same manner as if there
were a separate policy covering each insured; and (viii) if required by Landlord
or Mortgagee and available on commercially reasonable terms, such insurance
shall contain "cut-through" endorsements providing Landlord and Mortgagee with
direct access to any re-insurers.
(e) Tenant shall deliver to Landlord and Mortgagee a copy of each insurance
policy with further evidence of such insurance acceptable to Landlord and
Mortgagee, together with a copy of the declaration page for each such policy. If
requested by Landlord or Mortgagee, binders for renewal policies shall be
provided no later than fifteen (15) days prior to the expiration of each policy
and, when available and requested by Landlord or Mortgagee, copies of such
policies. Tenant shall deliver a renewed policy or policies, or duplicate
original or originals thereof, marked "premium paid," or accompanied by such
other evidence of payment satisfactory to Landlord and Mortgagee with standard
non-contributory mortgagee clause in favor of and acceptable to Landlord and
Mortgagee. Upon request of Landlord or Mortgagee, Tenant shall cause its
insurance underwriter or broker to certify to Landlord or Mortgagee in writing
that all the requirements of this Lease applicable to Tenant governing insurance
have been satisfied. Tenant shall comply promptly with and conform, in all
material respects, to (i) all provisions of each such insurance policy and (ii)
all requirements of the insurers applicable to Tenant as respects use,
occupancy, possession, operation, maintenance, alteration or repair of a Site.
Tenant shall not use or permit the use of any Site in any manner that would
permit any insurer to cancel any insurance policy or void coverage required to
be maintained by this Lease. No insurance policy may provide for assessments to
be made against Landlord or Mortgagee. If a policy permits assessments against
others, such policy must waive any right to a Lien upon a Site and no such
assessments may result in a Lien against such Site. The insurance coverage
required under this paragraph 11 may be effected under a blanket policy or
policies covering the Underlying Premises and other properties and assets not
constituting a part of the Underlying Premises; provided that any such blanket
policy shall specify the portion of the total coverage of such policy that is
allocated to the Underlying Premises, and any sublimits in such blanket policy
applicable to the Underlying Premises, which amounts shall not be less than the
amounts required pursuant to this paragraph 11 and which shall in any case
comply in all other respects
31
with all of the requirements of this paragraph 11. Tenant shall comply in all
material respects with all insurance requirements and shall not bring or keep or
permit to be brought or kept any article upon any Site or cause or permit any
condition to exist thereon (subject to and to the extent within Tenant's
control, exercising commercially reasonable measures consistent with prudent
business practice to ensure compliance herewith by members of the public,
including Members, having access to the Premises) which would be prohibited by
any insurance requirement, or would invalidate insurance coverage required
hereunder to be maintained by Tenant on or with respect to any part of any Site
pursuant to this paragraph 11. Notwithstanding anything to the contrary
contained herein, it is expressly understood and agreed that any insurance which
Tenant shall cause any tenant to provide that shall otherwise be in compliance
with all of the terms and conditions of this paragraph 11 shall satisfy Tenant's
obligations with respect thereto hereunder. Tenant shall not take out separate
insurance contributing in the event of loss with that required to be maintained
pursuant to this paragraph 11 unless such insurance complies with this paragraph
11. All insurance policies shall be in form, with endorsements, risk coverages,
deductibles and amounts and maintained with companies approved by Landlord and
Mortgagee, such approval not to be unreasonably withheld or delayed. Without
limiting Landlord's and Mortgagee's ability to approve the aforementioned, an
insurance company shall be reasonably satisfactory if such insurance company (a)
has a rating of at least A with financial size of Class X or better as specified
in Best's Key Rating Guide, (b) is licensed or authorized to do business, as
required under applicable law, in the State where the applicable Sites are
located and (c) a claims-paying ability rating by S&P of not less than "AA" and
an equivalent rating by another Rating Agency. Tenant shall not settle or accept
any payment of any claims under any insurance policy insuring against casualty,
rent loss and business interruption without twenty (20) days' advance written
notice to Landlord and Mortgagee, if any. Landlord and Mortgagee shall not, by
the fact of approving, disapproving, accepting, preventing, obtaining or failing
to obtain any insurance, incur any liability for or with respect to the amount
of insurance carried, the form or legal sufficiency of insurance contracts,
solvency of insurance companies, or payment or defense of lawsuits, and Tenant
hereby expressly assumes full responsibility therefor and all liability, if any,
with respect thereto. If Tenant fails to provide to Landlord or Mortgagee the
policies of insurance required by this paragraph 11, Landlord or Mortgagee may
(but shall have no obligation to), upon written notice to Tenant, procure such
insurance or single-interest insurance for such risks covering Landlord's and
Mortgagee's interest and Tenant shall pay all premiums thereon promptly upon
demand by Landlord and Mortgagee, and until such payment is made by Tenant, the
amount of all such premiums shall bear interest at the Overdue Rate and shall
constitute Additional Rent. Any such insurance purchased by Landlord or
Mortgagee may, but need not, protect Tenant's interests. The coverage purchased
by Landlord or Mortgagee may not pay any claim made by Tenant or any claim that
is made against Tenant in connection with the Premises or Underlying Premises.
Tenant may later cancel any insurance purchased by Landlord or Mortgagee, but
only after providing Landlord and Mortgagee with evidence that Tenant has
obtained insurance as required by this Lease. If Tenant fails to obtain any such
insurance and Landlord or Mortgagee purchase such insurance for the Premises
and/or Underlying Premises, Tenant will be responsible for the costs of that
insurance, including interest and other charges imposed by Landlord or Mortgagee
in connection with the placement of the insurance, until the effective date of
the cancellation or expiration of the insurance. The costs of the insurance may
be added as Additional Rent. The costs of the insurance may be more than the
cost of insurance Tenant is able to obtain on its own.
32
(f) Landlord acknowledges that, notwithstanding anything to the contrary
contained herein, Tenant's existing insurance and insurance carriers as of the
Commencement Date meet the requirements set forth in this paragraph 11; provided
each Subleasing Subsidiary is and shall remain a named insured on all insurance
policies. In no event shall Landlord or any Mortgagee require any additional
insurance pursuant to this paragraph 11 that is not commercially reasonable with
respect to similarly situated properties.
12. COMPLIANCE WITH LAWS, COVENANTS AND NON-FEE OCCUPANCY AGREEMENTS
(a) Tenant shall, and shall cause its Subsidiaries to, throughout the Term
promptly comply or cause compliance with or remove or cure any violation of any
and all present and future laws, including the Americans with Disabilities Act
of 1990, as the same may be amended from time to time ("ADA"), ordinances
(zoning or otherwise), orders, rules, regulations and requirements of all
federal, state, municipal and other governmental bodies having jurisdiction over
the Premises and the Membership Contracts and the appropriate departments,
commissions, boards and officers thereof, and the orders, rules and regulations
of each Board of Fire Underwriters where the Premises are situated, or any other
body now or hereafter constituted exercising lawful or valid authority over the
Premises and the Membership Contracts (collectively, "LEGAL REQUIREMENTS"), any
portion thereof, or the sidewalks, curbs, roadways, alleys or entrances adjacent
or appurtenant to the Premises, or exercising lawful authority with respect to
(1) the use or manner of use of the Premises, or such adjacent or appurtenant
facilities, and (2) the sale of and continuing obligations under the Membership
Contracts, and whether the compliance, curing or removal of any such violation
and the costs and expenses necessitated thereby shall have been foreseen or
unforeseen, ordinary or extraordinary, and whether or not the same shall be
presently within the contemplation of Landlord, Tenant or any Tenant Subsidiary
or shall involve any change in governmental policy, or require structural or
extraordinary repairs, alterations or additions by Tenant or any Tenant
Subsidiary and irrespective of the amount of the costs thereof. Tenant, at its
sole cost and expense, shall comply and shall cause its Subsidiaries to comply
with all agreements, contracts, easements, restrictions, reservations or
covenants, including the Membership Contracts, if any, running with the land or
hereafter created by Tenant or any Tenant Subsidiary or consented to by Tenant
or any Tenant Subsidiary or requested by Tenant or any Tenant Subsidiary. Tenant
shall also comply and shall cause its Subsidiaries to comply with, observe and
perform all provisions and requirements of all policies of insurance at any time
in force with respect to the Premises and required to be obtained and maintained
by Tenant or any Tenant Subsidiary under the terms of paragraph 11 of this
Lease. Tenant shall and shall cause its Subsidiaries to comply with all licenses
and permits issued by governmental authorities in connection with the Premises
(including licenses and permits relating to all waste water, storm water, water
processing and other similar facilities, franchise agreements, Membership
Contracts and any conditional use permits (collectively, "LICENSES")); provided,
however, Landlord agrees, upon request of Tenant, to sign promptly and without a
charge therefor (except as provided in the final sentence of this subparagraph)
any applications or filings (1) for such licenses and permits as may be required
by Legal Requirements for the conduct, operation or restoration of the Premises
and the business to be conducted therein in accordance with the terms hereof,
and (2) for the maintenance of the existing zoning for each Site to continue to
permit Tenant's use thereof, in both cases where the signature of Landlord is
required by Legal Requirements in force at the time. All reasonable costs
incurred by Landlord in connection with obtaining any such licenses and permits
and zoning matters shall be borne by
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Tenant. With respect to the Site commonly known as Pio Pico, Tenant shall use
commercially reasonable efforts to cause the use permit benefiting the north
side of the Site to be renewed or reissued.
(b) If Tenant shall at any time fail to pay any Imposition in accordance
with the provisions of paragraphs 6 or 26 of this Lease, or to take out, pay
for, maintain and deliver any of the insurance policies or certificates of
insurance provided for in paragraph 11 of this Lease, or shall fail to make any
other payment or perform any other act on its part to be made or performed
hereunder, then Landlord, after five (5) Business Days' prior written notice to
Tenant (or without notice in situations where Landlord determines that delay is
likely to cause harm to Landlord's interest in the Premises), and without
waiving or releasing Tenant from any obligation of Tenant contained in this
Lease, may (but shall be under no obligation to do so):
(i) pay any Imposition payable by Tenant pursuant to this Lease; or
(ii) make any other payment or perform any other act on Tenant's part
to be paid or performed hereunder which Tenant shall not have paid or performed
within the time required therefor, except that any time permitted to Tenant to
perform any act required by this paragraph shall be extended for such reasonable
period not to exceed three hundred sixty-five (365) days as may be necessary to
effectuate such performance, provided throughout such time Tenant is
continuously, diligently and in good faith prosecuting such performance.
(c) Tenant acknowledges that (1) Landlord's interest in the Non-Fee Sites
is that of the subtenant under the Non-Fee Occupancy Agreements, true, correct
and complete copies of which have been delivered to Tenant, (2) Landlord's
interest in all of the Sites is that of the tenant under the Master Lease, a
true, correct and complete copy of which has been delivered to Tenant and (3)
pursuant to this Lease, Tenant is effectively subleasing Landlord's interest as
the subtenant under the Non-Fee Occupancy Agreements and the tenant under the
Master Lease. Tenant hereby covenants and agrees to perform and comply in all
material respects with all of the obligations of the tenant under the Non-Fee
Occupancy Agreements during the Term of this Lease.
(d) Landlord hereby grants to Tenant an exclusive license and authority
solely to enforce Landlord's rights as the tenant or subtenant of the Premises,
as applicable, under the terms and conditions of the Non-Fee Occupancy
Agreements and the Licenses. Tenant shall comply with Landlord's obligations as
tenant, subtenant or licensee of the Premises, as applicable, under the Non-Fee
Occupancy Agreements and the Licenses; provided, however, Landlord agrees, upon
request of Tenant, to sign promptly and without a charge therefor (except as
provided in the final sentence of this subparagraph) any documents, applications
or filings for the Non-Fee Occupancy Agreements and/or Licenses as may be
required from time to time for the conduct, operation or restoration of the
Premises and the business to be conducted therein in accordance with the terms
hereof. All reasonable costs incurred by Landlord in connection with obtaining
any such documents, licenses and permits shall be borne by Tenant.
(e) Landlord may enter upon the Premises for any such cure purpose set
forth in this paragraph 12 and take all such action in or on the Premises as may
be necessary therefor pursuant to this paragraph 12. All sums, reasonable under
the circumstances, actually paid by Landlord and all costs and expenses,
including attorney's fees, incurred by Landlord in
34
connection with the performance of any such act, together with interest thereon
at the Overdue Rate and an amount equal to five percent (5%) of all such costs
and expenses, shall be paid by Tenant to Landlord on demand and submission of
reasonable evidence of such expenditures. Landlord shall not be limited in the
proof of any damages which Landlord may claim against Tenant arising out of or
by reason of Tenant's failure to provide and keep in force insurance as
aforesaid, to the amount of the insurance premium or premiums not paid or
incurred by Tenant, and which would have been payable upon such insurance, but
Landlord shall also be entitled to recover, as damages for any such breach, the
uninsured amount of any loss, damages, costs and expenses of suit, including
attorney's fees, suffered or incurred by reason of damage to or destruction of
the Premises or Underlying Premises, or any portion thereof or other damage or
loss which Tenant is required to insure against hereunder, occurring during any
period when Tenant shall have failed or neglected to provide insurance as
aforesaid.
(f) Tenant shall have the right under this Lease to abandon any Site or
Sites subject to this Lease, provided such abandonment does not violate any
Membership Contracts or applicable Legal Requirements, and so long as during
such period of abandonment, (i) Tenant continues to pay Rent and maintain the
Premises at such Sites in accordance with this Lease, (ii) Tenant maintains a
security system and performs regular inspections of such Sites and (iii) Tenant
provides Landlord with the right to inspect such Sites on an annual basis and
Tenant pays for the costs of such inspections.
(g) Tenant hereby covenants and agrees to perform and comply in all
material respects with all of the obligations of the tenant under any equipment
lease or other agreement affecting the Personal Property during the Term of this
Lease. Landlord hereby grants to Tenant an exclusive license and authority
solely to enforce Landlord's rights as the obligor or obligee, as applicable,
under the terms and conditions of any equipment lease or other agreement
affecting the Personal Property. Tenant shall comply with Landlord's obligations
as obligor or obligee, as applicable, under any such agreement affecting the
Personal Property; provided, however, Landlord agrees, upon request of Tenant,
to sign promptly and without a charge therefor (except as provided in the final
sentence of this paragraph 12(g)) any documents, applications or filings
required for the conduct, operation or restoration of the Personal Property and
the business to be conducted therein in accordance with the terms hereof. All
reasonable costs incurred by Landlord in connection with obtaining any such
documents, licenses and permits shall be borne by Tenant.
13. PARTIAL TAKING
If less than substantially all of any Site shall be taken for public or
quasi-public purposes, Tenant shall promptly, at its sole cost and expense,
restore, repair, replace or rebuild the improvements so taken in conformity with
the requirements of paragraph 9 of this Lease as nearly as practicable to the
condition, size, quality of workmanship and market value thereof immediately
prior to such taking, without regard to the adequacy of any condemnation award
for such purpose. There shall be no abatement of Rent during any such period of
restoration. In performing its obligations, Tenant shall be entitled to all
condemnation proceeds made available to Landlord for restoration or repair of
the Premises under the same terms and conditions for disbursement set forth for
casualty proceeds in paragraph 10 of this Lease, including such proceeds being
made available by Mortgagee. Tenant shall, at its sole cost and expense,
negotiate and, if necessary, litigate, the amount of the award, and Landlord
shall have the right to
35
participate in such process, and if Tenant fails to diligently prosecute such
efforts, Landlord may (at its option) take control of the process. Any
condemnation proceeds in excess of the amounts as are made available to Tenant
for restoration or repair of the Premises shall be the sole and exclusive
property of Landlord. Tenant shall have the right to participate in condemnation
proceedings with Landlord, and shall be entitled to receive any award made by
the condemning authority in respect of business loss or, if available, business
relocation and any other claim permitted by law which does not, in any such
case, diminish Landlord's recovery.
14. SUBSTANTIAL TAKING
If an entire Site or a substantial part of a Site, or access thereto, shall
be taken or condemned by any competent authority for any public or quasi-public
use or purpose, or, as a result of such taking, the use of such Site shall be
materially adversely affected, the Term of this Lease (with respect to such
affected Site only) shall end upon and not before the date when the possession
of the part so taken shall be required for such use and, except as otherwise
provided herein, without apportionment of the award to or for the benefit of
Tenant. If this Lease is terminated with respect to any Site pursuant to this
Paragraph 11, Fixed Rent at the then-current rate shall be apportioned as of the
date of the termination in the notice. Landlord shall be entitled to receive the
entire award or payment in connection therewith, except that Tenant shall have
the right to file any claim available to Tenant under applicable Law for any
taking of leasehold improvements paid for by Tenant and any Tenant's personal
property and fixtures belonging to Tenant and removable by Tenant upon
expiration of the Term and for moving expenses, provided that such separate
award shall not reduce the award or judgment recoverable by Landlord.
If the temporary use or occupancy of all or any part of any Site shall be
taken by condemnation during the Term, this Lease shall be and remain unaffected
by such condemnation, and Tenant shall continue to pay in full the Rent payable
hereunder. In the event of any such temporary taking for use or occupancy of all
or any part of such Site, Tenant shall be entitled to appear, claim, prove and
receive the portion of the award for such taking that represents compensation
for use or occupancy of such Site during the period of such temporary taking and
Landlord shall be entitled to appear, claim, prove and receive the portion of
the award that represents the costs of restoration of such Site and the use or
occupancy of such Site after the end of the period of such temporary taking.
15. DEFAULT; EVENTS OF DEFAULT
The occurrence of any one or more of the following events ("EVENT OF
DEFAULT") shall constitute a breach of this Lease by Tenant:
(a) Tenant fails to pay any Fixed Rent as and when such Fixed Rent becomes
due, and such failure continues for five (5) Business Days after Landlord gives
written notice thereof to Tenant; or
(b) Tenant fails to pay any Additional Rent as and when such Additional
Rent becomes due and payable and such failure continues for more than five (5)
Business Days after Landlord gives written notice thereof to Tenant; or
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(c) The entering of a non-appealable final judgment that Tenant has
breached its indemnification obligations under the Merger Transaction; provided
however, that prior to the appeal by Tenant of any judgment holding that Tenant
has breached an indemnification obligation under the Merger Transaction, Tenant
shall be required to post bond in the amount of such judgment or, at the
election of Tenant, provide a letter of credit in favor of Landlord for such
amount; or
(d) Tenant fails to perform its obligations under or breaches any agreement
or covenant contained in any part of paragraph 25, paragraph 31 and
subparagraphs 38(a) through (k) of this Lease; and, even if not specifically so
provided therein, a breach by any Subsidiary of the aforementioned shall
constitute an Event of Default; or
(e) Tenant or any of Tenant's Subsidiaries fails to perform or breaches any
agreement or covenant of this Lease not separately covered in this paragraph 15
to be performed or observed by Tenant or any of Tenant's Subsidiaries as and
when performance or observance is due and such failure or breach continues for
more than thirty (30) calendar days after Landlord gives written notice thereof
to Tenant; provided, however, that if, by the nature of such agreement or
covenant, such failure or breach cannot reasonably be cured within such period
of thirty (30) calendar days, an Event of Default shall not exist as long as
Tenant or such Tenant Subsidiary commences with due diligence and dispatch the
curing of such failure or breach within such period of thirty (30) calendar days
and, having so commenced, thereafter prosecutes with diligence and dispatch and
completes the curing of such failure or breach within a reasonable time not to
exceed one hundred eighty (180) calendar days, except with respect to regulatory
compliance matters, when such cure must be completed within three hundred
sixty-five (365) calendar days; or
(f) Tenant, any Guarantor or any of Tenant's Subsidiaries (i) files, or
consents by answer or otherwise to the filing against Tenant, any Guarantor or
any of Tenant's Subsidiaries of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy or for liquidation or to take
advantage of any bankruptcy, insolvency or other debtors' relief law of any
jurisdiction, (ii) makes an assignment for the benefit of Tenant's, any
Guarantor's or any of Tenant's Subsidiaries' creditors, (iii) consents to the
appointment of a custodian, receiver, trustee or other officer with similar
powers of Tenant, any Guarantor, any of Tenant's Subsidiaries or of any
substantial part of Tenant's, any Guarantor's or any of Tenant's Subsidiaries'
property, or (iv) takes any action for the purpose of any of the foregoing; or
(g) A court or government authority enters an order, and such order is not
stayed or vacated within sixty (60) calendar days, (i) appointing a custodian,
receiver, trustee or other officer with similar powers with respect to Tenant,
any Guarantor, any Tenant Subsidiary or with respect to any substantial part of
Tenant's or any Tenant Subsidiary's property, or (ii) constituting an order for
relief or approving a petition for relief or reorganization or arrangement or
any other petition in bankruptcy, insolvency or other debtors' relief law of any
jurisdiction, or (iii) ordering the dissolution, winding-up or liquidation of
Tenant, Guarantor or any Tenant Subsidiary; or
(h) Tenant fails to pay any insurance premiums when due or otherwise fails
to continuously maintain all insurance required to be maintained by Tenant in
accordance with the terms and conditions of this Lease; or
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(i) Any Guarantor or Tenant or anyone claiming on behalf of either party
asserts any claim that the Guaranty is not then in full force and effect; or
(j) An "Event of Default" occurs and is continuing under the Guaranty, the
Option Agreement, the Subsidiary Guaranty, the Guarantor Pledge, the Subsidiary
Pledge or the Tenant Pledge; or
(k) Any time after the fifth anniversary of the Effective Date of
Restatement, the death or Disability of Xxx X. XxXxxxx or Xxx X. XxXxxxx ceases
to be an active chief executive of Tenant for any other reason, unless a
substitute executive with management experience and expertise satisfactory to
Landlord is appointed to replace Xx. XxXxxxx as active chief executive of Tenant
within ninety (90) days after such death, Disability or cessation; or
(l) Tenant, any Guarantor or any of Tenant's Subsidiaries shall be in
default under the terms of any of its Indebtedness.
Landlord may treat the occurrence of any one or more of the foregoing
Events of Default as a breach of this Lease. For so long as such Event of
Default continues, Landlord, at its option and with or without notice or demand
of any kind to Tenant or any other Person, shall have only the remedies provided
in paragraph 16 of this Lease.
16. REMEDIES
(a) Upon the occurrence of an Event of Default, Landlord shall, in addition
to, and not in derogation of, any remedies for any preceding breach, with or
without notice or demand (except as otherwise expressly provided herein) and
without limiting Landlord in the exercise of any right or remedy which Landlord
may have by reason of such Event of Default under this Lease, have the right to
cause all of the assets directly or indirectly owned by Tenant and the equity
interests in Tenant to be transferred and assigned to Landlord through
appropriate judicial remedies, including pursuant to the following available
remedies:
(i) Landlord shall have the right to terminate Tenant's right to
possession of the Premises and repossess the Premises by any lawful means
without terminating this Lease.
(ii) Landlord shall have the right at any time to give a written
termination notice to Tenant and, on the date specified in such notice, Tenant's
right to possession of the Premises shall terminate and this Lease shall
terminate. Upon such termination, Landlord shall have the right to recover from
Tenant:
(A) The worth at the time of determination of all unpaid Rent
which had been earned at the time of termination;
(B) The worth at the time of determination of the amount of all
unpaid Rent for the balance of the then-Term of this Lease after the
time of termination excluding the potential Lease term under any
unexercised options for any Extension Terms, reduced only to the
extent of net rental proceeds actually received from any subsequent
replacement tenant(s) for any Site; provided, however, except to the
extent the state statutes or common law applicable to any Site
requires Landlord to mitigate its damages arising from an Event of
Default by
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Tenant under this Lease, from and after any such Event of Default,
Landlord shall have no duty to mitigate its damages by re-letting, or
attempting to re-let, any Site to any replacement tenant(s); and
(C) All other amounts necessary to compensate Landlord for all of
the detriment proximately caused by Tenant's failure to perform all of
Tenant's obligations under this Lease or which in the ordinary course
of events would be likely to result therefrom. The "worth at the time
of determination" of the amounts referred to in clause (A) above shall
be computed by allowing interest at the Per Diem Late Charge. The
"worth at the time of determination" of the amount referred to in
clause (B) above shall be computed by discounting such amount to
present value by using the discount rate equal to the then Treasury
Rate. For the purpose of determining unpaid Rent under clauses (A) and
(B) above, the Rent reserved in this Lease shall be deemed to be the
total Rent payable by Tenant under paragraph 5 of this Lease.
(iii) Even if Landlord terminates Tenant's right to possession under
this Lease, this Lease shall continue in effect and Landlord shall have the
right to enforce all its rights and remedies under this Lease, including the
right to recover all Rent as it becomes due under this Lease. Landlord shall be
entitled to an administrative fee of five percent (5%) of all amounts expended
under this paragraph 16(a).
(iv) All amounts owed by Tenant to Landlord following an Event of
Default can be used by Landlord in pursuing its claims against Guarantors under
the Guaranty and enforcement of all obligations, rights and remedies under (1)
the Guaranty, (2) the Guarantor Pledges, (3) the Subsidiary Guaranties, (4) the
Subsidiary Pledges, and (5) the Tenant Pledge, including realizing on all
collateral set forth in any such documents in accordance with the terms of such
documents.
(v) If Landlord commences any remedy under this paragraph 16(a),
Landlord shall continually prosecute such remedy to the fullest extent permitted
under this Lease, the Guaranty, the Guarantor Pledges, the Subsidiary
Guaranties, the Subsidiary Pledges, the Tenant Pledge and all applicable laws,
such that Landlord or Landlord's affiliate shall become the sole owner of the
assets of Tenant.
(b) In addition, upon the occurrence of an Event of Default, (1) Landlord
shall be entitled to receive and Tenant shall pay the Per Diem Late Charge for
each day such Event of Default remains outstanding, payable promptly, and in any
event within three (3) Business Days following Landlord's written demand to
Tenant for payment thereof, and (2) Landlord shall have all other rights set
forth in paragraph 31(g) of this Lease.
(c) All agreements and covenants to be performed or observed by Tenant
under this Lease shall be at Tenant's sole cost and expense and without any
abatement of Fixed Rent or Additional Rent. If Tenant fails to pay any sum of
money to be paid by Tenant or to perform any other act to be performed by Tenant
under this Lease as and when due or required to be performed, Landlord shall
have the right, but shall not be obligated, and without waiving or releasing
Tenant from any obligations of Tenant, to, upon five (5) Business Days' prior
notice to Tenant, make any such payment or perform any such other act on behalf
of Tenant in accordance
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with this Lease. All sums so paid by Landlord and all necessary incidental costs
shall be deemed Additional Rent hereunder and shall be payable by Tenant to
Landlord on demand, together with interest on all such sums from the date of
expenditure by Landlord to the date of repayment by Tenant at the Overdue Rate.
Landlord shall have, in addition to all other rights and remedies of Landlord,
the same rights and remedies in the event of the nonpayment of such sums (plus
interest at the Overdue Rate) by Tenant as in the case of default by Tenant in
the payment of Rent.
(d) Landlord shall be entitled to collect from Tenant Landlord's reasonable
costs and expenses, including attorneys' fees and expenses, in connection with
the enforcement of its remedies and/or the defense of any matter, including
during an appeal and whether suit is actually filed or not.
(e) Upon the occurrence of and during the continuance of an Event of
Default, Landlord shall have the right to commence an action in any court of
competent jurisdiction located in the State of Illinois for the purpose of
adjudicating the Event of Default and any or all of Landlord's rights and
remedies under this Lease related to each. Tenant hereby consents to the
exercise of personal jurisdiction over Tenant in any such court in Illinois and
consents to Illinois as the choice of venue. Upon adjudication of Landlord's
rights under this Lease, Landlord, at its option, shall have the right to file
additional actions in any and all States or Canadian Provinces in which the
Sites are located for the purpose of enforcing Landlord's rights under this
Lease, including obtaining orders of possession for the Site or Sites located in
such States or Canadian Provinces.
17. SUBORDINATION
(a) Subordination, Non-Disturbance. Tenant agrees at any time hereafter,
and from time to time within ten (10) Business Days of written request of
Landlord, to execute and deliver to Landlord a subordination, non-disturbance
and attornment agreement substantially in the form attached hereto as Exhibit D
(such instrument, release, document or agreement is herein called the
"SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT"), subjecting and
subordinating this Lease to the lien of any Mortgage which at any time may be
placed upon the Premises or Underlying Premises, or any portion thereof, by
Landlord, and to any replacements, renewals, amendments, consolidations,
modifications, extensions or refinancings thereof. It is agreed, nevertheless,
that so long as there exists no Event of Default under paragraphs 15(f) or 15(g)
of this Lease, such Subordination, Non-Disturbance and Attornment Agreement
shall not interfere with, hinder or reduce the right of Tenant to continue to
occupy the Premises, and all portions thereof, and to conduct its business
thereon in accordance with the covenants, conditions, provisions, terms and
agreements of this Lease. The costs of preparing and recording any such document
shall be borne by Landlord, but Tenant shall be responsible for its own counsel
fees.
(b) Mortgagee Protection Clause. In the event of any act or omission of
Landlord constituting a default by Landlord hereunder, Tenant shall not exercise
any remedy until Tenant has given Landlord and any Mortgagee of the Premises or
Underlying Premises written notice of such act or omission, and until a
reasonable period of time (not less than ten (10) Business Days) to allow
Landlord or Mortgagee to remedy such act or omission shall have elapsed
following receipt of such notice. However, if such act or omission cannot, with
due diligence and in good
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faith, be remedied within such period or cannot be cured simply by the payment
of money, Landlord and Mortgagee shall be allowed such further period of time as
may be reasonably necessary provided that either such party commences remedying
the same with due diligence and in good faith and thereafter diligently
prosecutes such cure, provided such cure period shall not extend beyond two
hundred seventy (270) calendar days after the receipt of notice of such default.
Nothing herein contained shall be construed or interpreted as requiring any
Mortgagee receiving such notice to remedy such act or omission.
(c) Attornment. If any Mortgagee shall succeed to the rights of Landlord
under this Lease or to ownership of the Premises or Underlying Premises, whether
through possession or foreclosure or the delivery of a deed to the Premises or
Underlying Premises in lieu of foreclosure, then such Mortgagee shall
automatically be deemed to have recognized this Lease and to assume the
obligations of Landlord hereunder accruing on and after the date such Mortgagee
acquires title to the Premises or Underlying Premises, and Tenant shall attorn
to and recognize such Mortgagee as Tenant's landlord under this Lease and shall
promptly execute and deliver any instrument consistent with the Subordination,
Non-Disturbance and Attornment Agreement that such Mortgagee may reasonably
request to evidence such attornment (whether before or after the making of the
Mortgage). In the event of any other transfer of Landlord's interest hereunder,
such transferee shall automatically be deemed to have recognized this Lease and
to assume the obligations of Landlord hereunder accruing on and after the date
of such transfer, and Tenant shall attorn to and recognize such transferee as
Tenant's landlord under this Lease and shall promptly execute and deliver any
instrument consistent with the Subordination, Non-Disturbance and Attornment
Agreement that such transferee and Landlord may reasonably request to evidence
such attornment.
(d) Acknowledgement. Upon ten (10) calendar days' advance written notice,
Tenant agrees to execute, acknowledge and deliver a document acknowledging the
assignment by Landlord of this Lease to a Mortgagee, in a commercially
reasonable form then approved by institutional lenders, with such changes
therein as may be reasonably requested by the Mortgagee.
18. LANDLORD'S RIGHT OF ENTRY; INDEMNIFICATION
(a) Landlord, Mortgagee, and their respective designees shall have the
right to enter the Premises, and any part thereof, at any time during normal
business hours and to inspect the same, post notices of non-responsibility,
monitor construction, perform appraisals, perform environmental site assessments
and engineering studies, and, during the last twenty-four (24) months of the
Term or at any time after an Event of Default, exhibit the Premises or any Site
to prospective purchasers and mortgagees, and examine Tenant's books and records
pertaining to the Premises, insurance policies, certificates of occupancy and
other documents, records and permits in Tenant's possession with respect to the
Premises, all of which shall be customary and adequate and reasonably
satisfactory to Landlord.
(b) Landlord hereby indemnifies and agrees to defend and hold harmless
Tenant and its partners or members, partners or members of such partners and
members, and their respective heirs, executors, administrators, personal or
legal representatives, successors and assigns from and against any and all
claims, expenses, costs, damages, losses and liabilities (including reasonable
attorneys' fees), on an After-Tax Basis, with respect to physical damage or
personal
41
injury to the extent resulting from Landlord's or its agents' or
representatives' action on the Premises, which may at any time be asserted
against or suffered by Tenant as a result of, on account of, or arising from
Landlord or its agents or representatives entering the Premises pursuant to the
terms of this Lease.
19. LEASEHOLD MORTGAGES.
Tenant shall not, without Landlord's consent, which Landlord may grant or
withhold in its sole and absolute discretion, mortgage Tenant's interest under
this Lease by any means whatsoever.
20. ESTOPPEL CERTIFICATE; FINANCIAL DATA
(a) At any time and from time to time, Tenant shall, within ten (10)
Business Days after written request by Landlord, execute, acknowledge and
deliver to Landlord a certificate certifying: (a) that this Lease is unmodified
and in full force and effect (or, if there have been modifications, that this
Lease is in full force and effect as modified, and stating the date and nature
of each modification); (b) the Commencement Date and the Lease Expiration Date
determined in accordance with paragraph 4 of this Lease and the Basic Lease
Information, and the date, if any, to which all Rent and other sums payable
hereunder have been paid; (c) the amount of Fixed Rent currently payable
monthly; (d) that no notice has been received by Tenant of any default by Tenant
hereunder which has not been cured, except as to defaults specified in such
certificate; (e) that to Tenant's actual knowledge, Landlord is not in default
under this Lease, except as to defaults specified in such certificate; and (f)
such other matters as may be reasonably requested by Landlord or any actual or
prospective purchaser or mortgage lender. Any such certificate may be relied
upon by Landlord and any actual or prospective purchaser or mortgage lender of
the Premises, Underlying Premises, or any part thereof.
(b) Tenant shall deliver to Landlord and to any actual or prospective
purchaser or mortgage lender designated by Landlord the following information
(A) within ninety (90) days after the end of each fiscal year of Tenant: an
audited consolidated and consolidating balance sheet of Tenant and Tenant's
Subsidiaries and a complete list of all Members and Membership Dues paid as at
the end of such fiscal year, an audited consolidated and consolidating statement
of profits and losses of Tenant and Tenant's Subsidiaries for such fiscal year,
and an audited statement of cash flows of Tenant and Tenant's Subsidiaries for
such fiscal year, setting forth in each case, in comparative form, the
corresponding figures for the preceding fiscal year in reasonable detail and
scope and certified by independent certified public accountants of recognized
national standing selected by Tenant, together with a detailed explanation of
any variance from the Budget for such period; (B) within forty-five (45) days
after the end of each of the first three (3) fiscal quarters of Tenant a balance
sheet of Tenant and Tenant's Subsidiaries as at the end of such fiscal quarter,
statements of profits and losses of Tenant and Tenant's Subsidiaries and a
complete list of all Members and Membership Dues paid for such fiscal quarter
and a statement of cash flows of Tenant and Tenant's Subsidiaries for such
fiscal quarter, setting forth in each case, in comparative form, the
corresponding figures for the similar quarter of the preceding fiscal year (or
in the case of an interim balance sheet, to the end of the prior fiscal year),
in reasonable detail and scope, and certified to be complete and accurate by a
senior financial officer of Tenant having knowledge thereof together with a
detailed explanation of any variance from the Budget for such period; (C) within
thirty (30) days after the end of each
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month, consolidated balance sheets of Tenant and its Subsidiaries and a complete
list of all Members and Membership Dues paid, as of the end of such month and
the related consolidated statements of income and cash flow for such month and
for the period from the beginning of the then current fiscal year of Tenant to
the end of such month, the foregoing financial statements in each case being
prepared in accordance with GAAP together with a detailed explanation of any
variance from the Budget for such period; and (D) forty-five (45) days before
the end of each quarter, a "flash" report showing results in such quarter to
date and estimated results for the balance of such quarter, including a cash
flow statement and income statement for such quarter together with a detailed
explanation of any variance from the Budget for such quarter. The financial
reports shall be in the form of Exhibit Z attached hereto. Tenant's obligation
to disclose information to an actual or prospective purchaser or a mortgage
lender pursuant to this paragraph 20(b) is subject to Tenant's receipt of a
confidentiality agreement in form and substance reasonably acceptable to Tenant.
Tenant shall deliver to Landlord (i) together with the annual financial
statements described above, an annual Site operating expense statement for each
Site in detail reasonably satisfactory to Landlord and certified to be complete
and accurate by a senior officer of Tenant or Guarantor, and (ii) together with
each quarterly financial statement described above, a Compliance Certificate
duly executed by Tenant, in form and substance reasonably acceptable to
Landlord, demonstrating compliance with the financial performance covenants
contained in paragraph 38 of this Lease and setting forth the basis for such
calculations with reasonable detail and specificity. Upon the occurrence of any
Casualty or injury to any person on any Site, Tenant shall immediately notify
Landlord of such event.
(c) Upon ten (10) Business Days' prior written notice, Tenant shall permit
Landlord and its professional representatives to visit Tenant's offices, and
discuss Tenant's affairs and finances with Tenant's senior management, and shall
make available such information as Landlord may reasonably request bearing on
Tenant, the Premises or this Lease as Tenant may maintain in the ordinary course
of business. Landlord shall agree to maintain the confidentiality of (i) all
nonpublic information provided to Landlord under this paragraph 20 and (ii) any
other information designated by Tenant or Guarantor as "nonpublic."
21. MECHANICS' LIENS
(a) Except for liens created through the act of Landlord, Tenant shall not
suffer or permit any mechanic's lien or other lien to be filed or recorded
against the Premises or Underlying Premises, equipment or materials supplied or
claimed to have been supplied to the Premises or Underlying Premises at the
request of Tenant, or anyone holding the Premises, Underlying Premises, or any
portion thereof, through or under Tenant. If any such mechanic's lien or other
lien shall at any time be filed or recorded against the Premises or Underlying
Premises, or any portion thereof, Tenant shall cause the same to be discharged
of record or bonded over within thirty (30) calendar days after the date of
filing or recording of the same.
(b) All materialmen, contractors, artisans, engineers, mechanics, laborers
and any other Person now or hereafter furnishing any labor, services, materials,
supplies, skill, machinery, fixtures or equipment to Tenant with respect to the
Premises, or any portion thereof, are hereby charged with notice that they must
look exclusively to Tenant to obtain payment for the same. Notice is hereby
given that Landlord shall not be liable for any labor, services, materials,
supplies, skill, machinery, fixtures or equipment furnished or to be furnished
to Tenant upon credit, and that no mechanic's lien or other lien for any such
labor, services, materials,
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supplies, skill, machinery, fixtures or equipment shall attach to or affect the
estate or interest of Landlord's affiliates in and to the Underlying Premises or
the estate or interest of Landlord in and to the Premises, or any portions
thereof.
22. END OF TERM
(a) Unless Landlord exercises its rights provided in paragraph 22(f), upon
the expiration or earlier termination of the Term of this Lease, Tenant shall
surrender the Premises to Landlord in the Premises Condition Standard, except as
repaired, rebuilt or altered as required or permitted by this Lease (or, in the
case of termination pursuant to paragraph 14 of this Lease, as condemned).
Except as otherwise provided herein, Tenant shall at such time remove all of its
personal property (including Tenant's Trade Fixtures) therefrom and all
alterations and improvements placed thereon by Tenant and not consented to by
Landlord. Tenant shall repair any damage to the Premises caused by such removal,
and any and all such property not so removed when required shall, at Landlord's
option, become the exclusive property of Landlord or be disposed of by Landlord,
at Tenant's cost and expense, without further notice to or demand upon Tenant.
(b) Unless Landlord exercises its rights provided in paragraph 22(f), if
the Premises are not surrendered as above set forth, Tenant shall indemnify,
defend and hold Landlord and the Landlord Parties harmless on an After-Tax Basis
from and against loss or liability resulting from the delay by Tenant in so
surrendering the Premises, including any claim made by any succeeding occupant
founded on such delay. Tenant's obligation to observe or perform this covenant
shall survive the expiration or other termination of this Lease for six (6)
years. The provisions of this paragraph 22(b) shall not be deemed to limit or
constitute a waiver of any other rights or remedies of Landlord provided herein.
(c) Unless Landlord exercises its rights provided in paragraph 22(f), all
property of Tenant not removed on or before the last day of the Term of this
Lease shall be deemed abandoned. Tenant hereby agrees that Landlord may remove
all property of Tenant, including Tenant's Trade Fixtures, from the Premises
upon termination of this Lease and may cause its transportation and storage, all
at the sole cost and risk of Tenant. Landlord shall not be liable for damage,
theft, misappropriation or loss thereof and Landlord shall not be liable in any
manner in respect thereto, and Landlord shall be entitled to dispose of such
property, as Landlord deems fit, without the requirement of an accounting.
Tenant shall pay all reasonable costs and expenses of such removal,
transportation and storage. Tenant shall reimburse Landlord upon demand for any
expenses reasonably and actually incurred by Landlord with respect to removal,
transportation or storage of any such abandoned property and with respect to
restoring the Premises in accordance with the terms and conditions of this
Lease.
(d) Except for surrender upon the expiration or earlier termination of the
Term hereof as expressly provided herein, no surrender to Landlord of this Lease
or of the Premises shall be valid or effective unless agreed to and accepted in
writing by Landlord.
(e) Unless Landlord exercises its rights provided in paragraph 22(f), upon
the expiration of the Term or Tenant's right to possession of the Premises or
any Site in accordance with the terms of this Lease, Tenant agrees to cooperate
with Landlord to transfer any and all Licenses to Landlord, at Landlord's
request.
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(f) At the end of the Term, Tenant shall cooperate with Landlord in
transferring only those Membership Contracts that are Camping Resort Contracts
(as defined in paragraph 40(f)(ii) of this Lease) to an unrelated third party
(who is not, for the avoidance of doubt, affiliated with Landlord) identified by
Landlord as a new Tenant for no additional consideration.
23. ALTERATIONS
(a) Tenant may, without Landlord's consent, make, in any fiscal year,
alterations, additions or improvements to any Site (including rental units,
improvements, alterations and additions in the ordinary course of business)
costing less than $20,000.00 (provided, however, alterations performed to repair
the existing damage at the Oakzanita Site are not subject to paragraph 23(a),
(b) or (c)) only if (i) such alterations, additions or improvements will be in
compliance with all applicable laws, codes, rules, regulations and ordinances,
(ii) such alterations, additions or improvements will not reduce the fair market
value or utility of such Site for its Permitted Use, considered as unencumbered
by this Lease, and (iii) such alterations, additions or improvements will not
materially and adversely affect in any way the structural, exterior or roof
elements of such Site or mechanical, electrical, plumbing, waste water systems
and facilities, water plants and facilities and septic facilities, utility or
life safety systems of such Site. In all other cases, Landlord's prior written
consent shall be required, which consent shall not be unreasonably withheld,
conditioned or delayed. At Landlord's option, any improvement requiring
Landlord's consent but made without Landlord's consent shall be removed and the
area repaired at Tenant's expense at the termination of the Term.
(b) In no event shall Tenant be permitted to install underground storage
tanks or fuel systems on the Premises, or any portion thereof, except that
Tenant may replace existing underground storage tanks with above-ground storage
tanks which comply with all applicable Legal Requirements.
(c) All alterations, additions or improvements requiring Landlord's consent
shall be made at Tenant's sole cost and expense as follows:
(i) Tenant shall submit to Landlord, for Landlord's written approval,
complete plans and specifications for all work to be done by or for Tenant. Such
plans and specifications shall be prepared by a licensed architect(s) and
engineer(s) approved in writing by Landlord, shall comply with all applicable
codes, ordinances, rules and regulations, shall not adversely affect the
structural elements of any Site, shall be in a form sufficient to secure the
approval of all government authorities with jurisdiction over such Site, and
shall be otherwise satisfactory to Landlord in Landlord's reasonable discretion.
(ii) Landlord shall notify Tenant in writing within thirty (30)
calendar days whether Landlord approves, approves on the condition that Tenant
reverse the alteration at Tenant's expense at the termination or expiration of
this Lease, or disapproves such plans and specifications. Tenant may submit to
Landlord revised plans and specifications for Landlord's prior written approval,
which approval shall not be withheld or delayed if (a) the work to be done would
not, in Landlord's reasonable judgment, adversely affect the value, character,
rentability or usefulness of any Site or any part thereof, or (b) the work to be
done shall be required by any Legal Requirement. Tenant shall pay all costs,
including the fees and expenses of the licensed architect(s) and engineer(s), in
preparing such plans and specifications.
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(iii) All changes (other than field changes for which no change order
is proposed and which will be reflected in the final "as built" plans) in the
plans and specifications approved by Landlord shall be subject to Landlord's
prior written approval. If Tenant wishes to make any such change in the approved
plans and specifications, Tenant shall have such architect(s) and engineer(s)
prepare plans and specifications for such change and submit them to Landlord for
Landlord's written approval. Landlord shall notify Tenant in writing whether
Landlord approves, approves on the condition that Tenant reverse the alteration
at Tenant's expense at the termination or expiration of this Lease, or
disapproves such change. Tenant may submit to Landlord revised plans and
specifications for any such change for Landlord's written approval. After
Landlord's written approval of such change, such change shall become part of the
plans and specifications approved by Landlord.
(iv) Tenant shall obtain and comply with all building permits and
other government permits and approvals required in connection with the work.
Tenant shall, through Tenant's licensed contractor, perform the work
substantially in accordance with the plans and specifications approved in
writing by Landlord. Tenant shall pay, as Additional Rent, the entire cost of
all work (including the cost of all utilities, permits, fees, taxes, and
property and liability insurance premiums in connection therewith) required to
make the alterations, additions or improvements. Under no circumstances shall
Landlord be liable to Tenant for any damage, loss, cost or expenses incurred by
Tenant on account of any plans and specifications, contractors or
subcontractors, design of any work, construction of any work, or delay in
completion of any work.
(v) Tenant shall give at least ten (10) calendar days' prior written
notice to Landlord of the date on which construction of any work to be done by
outside contractors which requires Landlord's consent will commence. Landlord
shall have the right to post and keep posted on any Site any notices that may be
provided by law or which Landlord may deem to be proper for the protection of
Landlord and such Site, or any portion thereof, from Liens, and to take any
other action Landlord deems necessary to remove or discharge Liens, at the
expense of Tenant.
(vi) All alterations, additions, improvements and fixtures, whether
temporary or permanent in character, made in or to any Site by Tenant, shall
become part of such Site and Landlord's property, except those which are readily
removable without causing material damage to such Site (which shall be and
remain the property of Tenant). Upon termination or expiration of this Lease,
Tenant shall, at Tenant's expense, remove all movable furniture, equipment,
trade fixtures, office machines and other personal property (including Tenant's
Trade Fixtures) from each Site (but not the Improvements, Personal Property or
Equipment) and repair all damage caused by such removal. Termination of this
Lease shall not affect the obligations of Tenant pursuant to this paragraph
23(c) to be performed after such termination.
(vii) Promptly following the completion of any alteration, addition or
improvement to the Premises which costs more than $1,000,000.00 to complete,
Tenant shall furnish Landlord with a copy in electronic form acceptable to
Landlord of the complete plans and specifications for such work (including, if
available, so-called "as-built" plans and specifications).
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(d) In connection with the renovations and alterations to the existing
damage at the Oakzanita Site, Tenant shall deliver to Landlord complete plans
and specifications (and any change orders) for all work to be done by or for
Tenant. Such plans and specifications shall be prepared by licensed architect(s)
and engineer(s), shall comply with all applicable codes, ordinances, rules and
regulations, shall not adversely affect the structural elements of the Oakzanita
Site, and shall be in a form sufficient to secure the approval of all government
authorities with jurisdiction over the Oakzanita Site. Tenant shall obtain and
comply with all building permits and other government permits and approvals
required in connection with the work. All alterations, additions, improvements
and fixtures, whether temporary or permanent in character, made in or to the
Oakzanita Site by Tenant, shall become part of the Oakzanita Site and Landlord's
property. Promptly following the completion of any alteration, addition or
improvement to the Oakzanita Site, Tenant shall furnish Landlord with a copy in
electronic form of the complete plans and specifications for such work
(including, if available, so-called "as-built" plans and specifications).
24. MEMORANDUM OF LEASE
The parties agree to promptly execute a Memorandum of Lease with respect to
each Site in recordable form and Landlord shall record each such Memorandum of
Lease. Landlord and Tenant shall execute such customary amendments and
terminations related thereto as may be required or reasonably requested by
Landlord or Tenant within five (5) Business Days of receipt thereof.
25. SUBLETTING/ASSIGNMENT
(a) Except as otherwise permitted in paragraphs 25(f), 25(g), 38(d) and
38(j) of this Lease, Tenant shall not, directly or indirectly, without the prior
written consent of Landlord and Mortgagee (which consent may be withheld or
conditioned in Landlord's and/or Mortgagee's sole and absolute discretion),
assign this Lease or any interest herein, or any interest in Tenant, or permit
the use or occupancy of the Premises by any Person other than Tenant or the
Members or other persons entitled to occupancy of the Premises pursuant to
arrangements entered into in the ordinary course of Tenant's business (e.g., day
rentals and extended vacation programs). Except as otherwise expressly permitted
in paragraph 25 of this Lease, this Lease shall not, nor shall any interest
herein, be assignable as to the interest of Tenant involuntarily or by operation
of law without the prior written consent of Landlord and Mortgagee. Under no
circumstances shall Tenant be permitted to sublease the Premises or any part
thereof, except as expressly permitted in paragraph 25(g) of this Lease.
For purposes of this paragraph 25(a) and except as provided in paragraph
38(d) and 38(j) hereof, the occurrence of a Corporate Control Event, or the
public announcement thereof, shall be deemed to be an assignment of this Lease
which is prohibited by the preceding paragraph unless Tenant obtains Landlord's
and Mortgagee's prior written consent as set forth above (which consent may be
denied by Landlord in Landlord's sole discretion).
Any of the foregoing prohibited acts (including, any purported assignment,
sublease or Corporate Control Event) without the prior written consent of
Landlord and Mortgagee, as required in accordance with the terms hereof, shall
be void ab initio and shall, at the option of Landlord or Mortgagee, constitute
an immediate Event of Default under paragraph 15(d).
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(b) The acceptance of Rent by Landlord from any other Person shall not be
deemed to be a waiver by Landlord of any provision of this Lease. Consent to one
Corporate Control Event shall not be deemed consent to any subsequent Corporate
Control Event.
(c) (i) Tenant shall have no right to mortgage, xxxxx x xxxx upon, encumber
or otherwise finance its interest under this Lease or record a lien upon its
interest in the Premises under this Lease; (ii) Tenant shall not permit, cause
or suffer to be recorded in the real estate records of any county in which the
Premises are located any mortgage, deed to secure debt, deed of trust,
assignment, UCC financing statement or any other document granting, perfecting
or recording a lien upon Tenant's interest in this Lease or interest in the
Premises under this Lease; (iii) Tenant shall not give any notice, or permit or
cause any other party to give any notice, to Landlord of any existing lien on or
security interest in Tenant's interest in this Lease or interest in the Premises
under this Lease; and (iv) Tenant shall not request that Landlord execute (nor
shall Landlord have any obligation to execute) any non-disturbance, attornment
or any other agreement in favor of any party transacting any business or
transaction with or related to Tenant, other than non-disturbance agreements
with Members, as required by law.
(d) Tenant shall pay all of Landlord's and Mortgagee's reasonable
attorneys' fees and costs incurred in connection with any Corporate Control
Event and in connection with any request made by Tenant pursuant to this
paragraph 25.
(e) Tenant agrees to give notice to Mortgagee of any request for consent to
any Corporate Control Event simultaneously with delivery of notice thereof to
Landlord.
(f) Execution of Membership Contracts by any Subleasing Subsidiary shall
not be deemed to constitute an assignment or sublease, as contemplated by this
paragraph 25.
(g) Landlord hereby consents to the Tenant Subleases. Tenant shall cause
each Subleasing Subsidiary to perform all of the covenants to be performed by
Tenant under this Lease (in the case of a partial sublease, only insofar as such
covenants relate to the portion of the Premises subject to such partial
sublease) as and when performance is due after the effective date of the
sublease and Landlord will have the right, but shall not be obligated, to
enforce such covenants directly against such subtenant and failure of any such
subtenant to perform such covenants shall be deemed a failure of Tenant to
perform such covenants. Tenant shall cause each Subleasing Subsidiary to (1)
comply with the SPE Requirements contained in the Subsidiary Guaranty and (2)
hold the Membership Contracts relating to Tenant's Business assigned to such
Subleasing Subsidiary pursuant to the Merger Transaction or otherwise entered
into by such Subleasing Subsidiary. Tenant shall in any case remain primarily
liable (and not liable merely as a guarantor or surety) for the performance by
any subtenant, including the Subleasing Subsidiaries, of all such covenants, as
if no sublease had been made. No sublease, including the Tenant Subleases, shall
release Tenant from Tenant's obligations and liabilities under this Lease (which
shall continue as the obligations of a principal and not of a guarantor or
surety) or alter the primary liability of Tenant to pay all Rent and to perform
all obligations to be paid and performed by Tenant. Consent to the Tenant
Subleases shall not be deemed consent to any subsequent sublease. If any
subtenant of Tenant, including the Subleasing Subsidiaries, defaults in the
performance of any obligation to be performed by Tenant under this Lease,
Landlord may proceed directly against Tenant without the necessity of pursuing
or exhausting remedies against such subtenant. Tenant shall not amend, terminate
or otherwise modify the
48
Tenant Subleases without Landlord's prior written consent, which may be withheld
in its sole discretion. Tenant and Landlord hereby agree to execute any
additional documents reasonably required to effectuate the terms, provisions and
conditions contained in this paragraph 25(g).
26. HAZARDOUS MATERIAL
(a) Tenant (i) shall comply, and cause the Premises to comply, with all
Environmental Laws applicable to the Premises (including the making of all
submissions to governmental authorities required by Environmental Laws and the
carrying out of any remediation program specified by any such authority), (ii)
shall prohibit the use of the Premises for the generation, manufacture,
refinement, production or processing of any Hazardous Materials or for the
storage, handling, transfer or transportation of any Hazardous Materials (other
than in connection with the operation, business and maintenance of the Premises
and in commercially reasonable quantities in compliance with Environmental
Laws), (iii) shall not permit to remain, install or permit the installation on
the Premises of any surface impoundments, underground storage tanks,
pcb-containing transformers or asbestos-containing materials, except in
compliance with Environmental Laws and (iv) shall cause any alterations of the
Premises to be done in a way so as to not expose in an unsafe manner the persons
working on or visiting the Premises to Hazardous Materials and in connection
with any such alterations Tenant shall remove any Hazardous Materials present
upon the Premises which are not in compliance with Environmental Laws or which
present a danger to persons working on or visiting the Premises.
(b) "ENVIRONMENTAL LAWS" means the Resource Conservation and Recovery Act
of 1976, as amended, 42 U.S.C. Sections 6901, et seq. "RCRA," the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. Sections
9601, et seq. "CERCLA," as amended, the Toxic Substance Control Act, as amended,
15 U.S.C. Sections 2601, et seq., the Federal Insecticide, Fungicide and
Rodenticide Act, as amended, 7 U.S.C. Sections 136, et seq., and all applicable
federal, state and local environmental laws, ordinances, rules and regulations,
as any of the foregoing may have been or may be from time to time amended,
supplemented or supplanted, and any other federal, state or local laws,
ordinances, rules and regulations now or hereafter existing relating to
regulation or control of Hazardous Materials. The term "HAZARDOUS MATERIALS" as
used in this Lease shall mean substances defined as "hazardous substances,"
"hazardous materials." "hazardous wastes" or "toxic substances" in any
applicable federal, state or local statute, rule, regulation or determination,
including CERCLA; the Hazardous Materials Transportation Act, 49 U.S.C. Sections
1801, et seq.; RCRA; and, asbestos, pcb's, radioactive substances, methane,
volatile hydrocarbons, petroleum or petroleum-derived substances or wastes,
radon, industrial solvents or any other material as may be specified in
applicable laws or regulations.
(c) Tenant agrees to protect, defend, indemnify and hold harmless Landlord,
its affiliates, members, partners, directors, officers, employees and agents,
and any successors to Landlord's interest in the chain of title to the Premises,
their direct or indirect shareholders, members, partners, directors, officers,
employees and agents (collectively, the "INDEMNIFIED PARTY"), on an After-Tax
Basis, from and against any and all liability, including all foreseeable and all
unforeseeable damages including attorney's and consultant's fees, fines,
penalties and civil or criminal damages, directly or indirectly arising out of
the use, generation, storage, treatment, release, threatened release, discharge,
spill, presence or disposal of Hazardous
49
Materials from, on, at, to or under the Premises or the Underlying Premises
during the Term of this Lease, and including for all matters disclosed in the
environmental reports listed on Exhibit J, copies of which have been delivered
to Tenant (collectively, the "ENVIRONMENTAL REPORTS"), and the cost of any
required or necessary repair, response action, remediation, investigation,
cleanup or detoxification and the preparation of any closure or other required
plans in connection therewith, whether such action is required or necessary
prior to or following transfer of title to the Underlying Premises. This
agreement to indemnify and hold harmless shall (i) exclude matters to the extent
caused by an Indemnified Party and (ii) be in addition to any other obligations
or liabilities Tenant may have to Landlord at common law and under all statutes
and ordinances or otherwise, and shall survive following the date of expiration
or earlier termination of this Lease for six (6) years, except where the event
giving rise to the liability for which indemnity is sought arises out of
Tenant's acts, in which case the agreement to indemnify and hold harmless shall
survive the expiration or termination of this Lease without limit of time.
Tenant expressly agrees that the representations, warranties and covenants made
and the indemnities stated in this Lease are not personal to Landlord, and the
benefits under this Lease may be assigned to subsequent parties in interest to
the chain of title to the Premises, which subsequent parties in interest may
proceed directly against Tenant to recover pursuant to this Lease. Tenant, at
its expense, may institute appropriate legal proceedings with respect to
environmental matters of the type specified in this paragraph 26(c) or any lien
for such environmental matters, not involving Landlord or its Mortgagee as a
defendant (unless Landlord or its Mortgagee is the alleged cause of the damage),
conducted in good faith and with due diligence, provided that such proceedings
shall not in any way impair the interests of Landlord or Mortgagee under this
Lease or contravene the provisions of any Mortgage. Counsel to Tenant in such
proceedings shall be reasonably approved by Landlord if Landlord is a defendant
in the same proceeding. Landlord shall have the right to appoint co-counsel,
which co-counsel will cooperate with Tenant's counsel in such proceedings. The
fees and expenses of such co-counsel shall be paid by Landlord, unless such
co-counsel is appointed because the interests of Landlord and Tenant in such
proceedings, in such counsel's opinion, are or have become adverse, or Tenant or
Tenant's counsel is not conducting such proceedings in good faith or with due
diligence.
(d) Tenant, upon three (3) Business Days' prior notice, shall permit such
Persons as Landlord or any assignee of Landlord may designate and (unless an
Event of Default has occurred and is continuing) approved by Tenant, which
approval shall not be unreasonably withheld or delayed ("SITE REVIEWERS"), to
visit the Premises from time to time and perform environmental site
investigations and assessments ("SITE ASSESSMENTS") on the Premises for the
purpose of determining whether there exists on the Premises any environmental
condition which may result in any liability, cost or expense to Landlord or any
other owner or occupier of the Premises. Such Site Assessments may include both
above and below the ground testing for environmental damage or the presence of
Hazardous Material on the Premises and such other tests on the Premises as may
be necessary to conduct the Site Assessments in the reasonable opinion of the
Site Reviewers. Tenant shall supply to the Site Reviewers such historical and
operational information regarding the Premises as may be reasonably requested by
the Site Reviewers to facilitate the Site Assessments (other than information
previously supplied in writing to Landlord by Tenant) and shall make available
for meetings with the Site Reviewers appropriate personnel having knowledge of
such matters. The cost of performing and reporting all Site Assessments shall be
paid by Landlord unless the Site Reviewers discover a material environmental
condition causing the Premises not to be in compliance with applicable
50
Environmental Laws, in which event such cost shall be paid by Tenant within ten
(10) calendar days after demand by Landlord with interest to accrue at the
Overdue Rate. Landlord, promptly after written request by Tenant and payment by
Tenant to the extent required as aforesaid, shall deliver to Tenant copies of
reports, summaries or other compilations of the results of such Site
Assessments. Tenant's sole remedy for Landlord's breach of the preceding
sentence shall be a mandatory injunction, and not a termination of this Lease or
a withholding or reduction of Rent.
(e) Tenant shall notify Landlord in writing, promptly upon Tenant's
learning thereof, of any:
(i) notice or claim to the effect that Tenant is or may be liable to
any Person as a result of the release or threatened release of any Hazardous
Materials into the environment from the Premises;
(ii) notice that Tenant is subject to investigation by any
governmental authority evaluating whether any remedial action is needed to
respond to the release or threatened release of any Hazardous Materials into the
environment from the Premises;
(iii) notice that the Premises are subject to an environmental lien;
and
(iv) notice of violation to Tenant or awareness by Tenant of a
condition which might reasonably result in a notice of violation of any
applicable Environmental Law that could, in either case, have a material adverse
effect upon the Premises or any portion thereof.
27. FINANCING
(a) Landlord may assign this Lease to any Person, including any Mortgagee.
Tenant shall execute, acknowledge and deliver any documents reasonably requested
by Landlord, any such transferee or Mortgagee relating to any such assignment of
this Lease by Landlord or the Mortgage financing.
(b) If Landlord proposes to finance or refinance any Mortgage, Tenant shall
cooperate in the process, and, during the last twenty-four (24) months of the
term of any Mortgage, Tenant shall, upon Landlord's written request, exhibit the
Premises to prospective mortgagees, and permit such prospective mortgagees to
examine all materials and records which shall be customary for a mortgagee's
inspection, subject at all times to Landlord's indemnity set forth in paragraph
18 of this Lease and the confidentiality requirements set forth in this Lease.
Tenant agrees to execute, acknowledge and deliver documents reasonably requested
by any prospective Mortgagee (such as a consent to the financing (without
encumbering any assets directly or indirectly owned by Tenant), a consent to
assignment of lease, and a subordination, non-disturbance and attornment
agreement meeting the standards set forth in paragraph 17 of this Lease)
customary for tenants to sign in connection with mortgage loans to their
landlords, so long as such documents are in form then customary among
institutional lenders (provided the same do not adversely affect Tenant's rights
or obligations in a way not previously affected by loan documents previously
executed by Tenant in connection with an earlier Mortgage).
(c) Tenant shall permit Landlord and any Mortgagee or prospective Mortgagee
and any representatives or agents of Landlord, any Mortgagee or prospective
Mortgagee, at their expense, to meet with senior management personnel of Tenant
and/or Guarantor at Tenant's
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and/or Guarantor's offices and to discuss Tenant's and/or Guarantor's business
and finances. On request of Landlord, Tenant agrees to use commercially
reasonable efforts to provide any Mortgagee or prospective Mortgagee the
information to which Landlord is entitled hereunder. If any such information is
non-public, each party requesting such information shall sign a confidentiality
agreement (in a form reasonably satisfactory to Tenant) prior to such Mortgagee
or prospective Mortgagee receiving such information.
(d) In the event Mortgagee elects to record a Mortgage in connection with
any Mortgage financing, said Mortgage shall contain the language set forth in
Exhibit N attached hereto, or such other language as may be required from time
to time under applicable laws in effect in any state (1) in which a Site is
located or (2) in which Memberships are offered for sale.
28. MISCELLANEOUS PROVISIONS
(a) This Lease and all of the covenants and provisions hereof shall inure
to the benefit of, and be binding upon, the parties hereto and the heirs,
personal representatives, successors and permitted assigns of the parties.
(b) The titles and headings appearing in this Lease are for reference only
and shall not be considered a part of this Lease or in any way to modify, amend
or affect the provisions thereof.
(c) This Lease, the documents and agreements referenced herein and any
intercreditor or tri-party agreement among Landlord, Tenant and Working Capital
Lender (as such agreement may be amended or replaced from time to time) contain
the complete agreement of the parties with reference to the leasing of the
Premises, and may not be amended except by an instrument in writing signed by
Landlord and Tenant.
(d) Any provision or provisions of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provision hereof, and the remaining provisions hereof shall nevertheless remain
in full force and effect.
(e) This Lease may be executed in one or more counterparts, and may be
signed by each party on a separate counterpart, each of which, taken together,
shall be an original, and all of which shall constitute one and same instrument.
(f) The term "Landlord" as used in this Lease shall mean only the tenant or
subtenant under the Master Lease at the time in question, and in the event of
any transfer of such title or interest, the Landlord named in this Lease (and in
case of any subsequent transfers, then the grantor) shall be relieved from and
after the date of such transfer of all liability as respects Landlord's
obligations thereafter to be performed hereunder, provided that any funds in the
hands of Landlord or the then grantor at the time of such transfer, in which
Tenant has an interest, shall be delivered to the grantee. The obligations
contained in this Lease to be performed by Landlord shall, subject as aforesaid,
be binding on Landlord's successors and assigns only during their respective
periods of ownership.
(g) For all issues which are Site-specific, this Lease shall be governed by
and construed and enforced in accordance with and subject to the laws of the
state where the
52
applicable Site is located, and for all issues which are not Site-specific, the
internal laws, without regard to conflicts of laws principles of the State of
Illinois shall govern.
(h) Any claim based on or in respect of any liability of Landlord under
this Lease shall be enforced only against the Premises and Landlord's insurance
covering the Premises and not against any other assets, properties or funds of
(1) Landlord or any Landlord Parties, or (2) any predecessor or successor
partnership, corporation or limited liability company (or other entity) of
Landlord or any of its members, stockholders or partners, either directly or
through Landlord or its predecessor or successor partnership, corporation or
limited liability company (or other Person) of Landlord or its members,
stockholders or partners, or (3) any other Person.
(i) Without the written approval of Landlord and Tenant, no Person other
than Landlord (including any Landlord Parties), Mortgagee, Tenant, Leasehold
Mortgagee, and their respective permitted successors and assigns shall have any
rights under this Lease.
(j) There shall be no merger of the leasehold estate created hereby by
reason of the fact that the same Person may own, directly or indirectly, (1) the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate and (2) the fee estate in the Premises. Notwithstanding any such combined
ownership, this Lease shall continue in full force and effect until terminated
by an instrument executed by both Landlord and Tenant.
(k) Whenever in this Lease either party is required to take an action
within a particular time period, delays caused by acts of God, war, major
casualty, strike, labor shortage or other cause beyond the reasonable control of
such party shall not be counted in determining the time in which such
performance must be completed (except in the case of the obligation to pay
money) so long as such party, promptly after becoming aware of the commencement
of such delay, shall give the other party notice thereof and estimating the
duration thereof.
(l) If at any time a dispute shall arise as to any amount to be paid by one
party to the other hereunder, the obligor may make payment "under protest," and
such payment shall not be deemed a voluntary payment, and the right of the
obligor to contest its liability for such payment shall survive such payment
without prejudice to the obligor's position.
(m) Landlord and Tenant each represent that they have dealt with no broker,
finder or other Person who could legally charge a commission in connection with
this Lease and the documents and agreements referenced herein.
(n) Intentionally Omitted.
(o) The parties hereto specifically acknowledge and agree that,
notwithstanding any other provision contained in this Lease, it is the intent of
the parties that their relationship hereunder is and shall at all times be that
of landlord and tenant, and not that of partners, joint venturers, lender and
borrower, or any other relationship other than that of a landlord and tenant.
The parties specifically acknowledge and agree that this Lease shall be treated
as a "true lease," and that Landlord's affiliates shall be considered the owner
of the Underlying Premises for U.S. federal, state and local income and
franchise tax purposes, and any Canadian tax purposes, and each party agrees not
to take any position on any U.S. federal, state, local or Canadian income or
franchise tax return inconsistent with such treatment.
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(p) The parties hereto specifically acknowledge and agree that time is of
the essence with regard to all obligations under this Lease.
(q) TO THE EXTENT PERMITTED BY APPLICABLE LAW, LANDLORD AND TENANT HEREBY
WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING, AND WITH RESPECT TO ANY CLAIM
ASSERTED IN ANY SUCH ACTION OR PROCEEDING, BROUGHT BY EITHER OF THE PARTIES
AGAINST THE OTHER ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S USE
OR OCCUPANCY OF THE PREMISES, ANY CLAIM OF INJURY OR DAMAGE, OR ANY EMERGENCY OR
OTHER STATUTORY REMEDY WITH RESPECT THERETO.
29. INTENTIONALLY OMITTED
30. BUDGET
Tenant's 2006 budget has been delivered to Landlord. Tenant shall deliver
an amended budget for fiscal year 2006 not later than thirty (30) days from the
Effective Date of Restatement. Not later than September 15 of every Lease Year,
Tenant shall deliver a detailed operating budget, and a capital plan, both of
which shall be acceptable to Landlord in its sole discretion, for the following
fiscal year for Tenant's Business to Landlord substantially in the same form as
the amended budget for fiscal year 2006. Not later than October 1, and not later
than seven (7) days after the end of each fiscal quarter, of each Lease Year,
Landlord and Tenant shall meet to discuss all aspects of the budget. At the end
of each fiscal quarter, Tenant shall prepare a "forecast" providing an updated
income statement and cash flow statement for the balance of such Lease Year.
Such budget from time to time in effect is herein called the "BUDGET." If EBITDA
is below Budget by more than three percent (3%) on a quarterly basis, Landlord
has the right to increase its Reserve Accounts including additional restrictions
on Tenant's operating account. The preceding shall not affect the calculation or
permitted distribution of Surplus Cash for purposes of paragraph 38(d) of this
Lease except to the extent such cash was spent prior to the calculation.
31. ACCOUNTS AND CASH MANAGEMENT
(a) Establishment of Lockbox and Cash Management System. Tenant shall
maintain in effect at all times during the Term a system of accounts and
procedures reasonably satisfactory to Landlord for the collection and deposit of
payments in respect to Tenant's Gross Revenues, and the transfer of amounts so
deposited or collected to the Collection Account and/or the Concentration
Account. Without limiting the generality of the foregoing, but subject to the
provisions of paragraph 31(c) of this Lease, Tenant shall maintain one or more
lockboxes pursuant to arrangements reasonably satisfactory to Landlord and shall
deliver notices to all Members and all other debtors of Tenant, directing such
Persons to make all payments with respect to Membership Dues, Membership
Contract Receivables or other amounts directly to such lockboxes or directly to
the Collection Account, if such payment is made by wire transfer or other
electronic means.
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(b) Establishment of Accounts.
(i) Collection Account. Tenant hereby confirms that Tenant has
established, and agrees that Tenant shall maintain, at Bank, a segregated
collection account with the account number 0042084673 (the "COLLECTION
ACCOUNT"). The Collection Account shall be and hereby is pledged to Landlord as
additional security for the payment, performance and observance of Tenant's
obligations under this Lease and Landlord shall have sole and exclusive dominion
and control over the Collection Account, to be administered in accordance with
this Lease. Funds on deposit in the Collection Account shall be automatically
transferred each day to the Concentration Account described below.
(ii) Other Accounts. Tenant hereby confirms that Tenant has
established, and agrees that Tenant shall maintain at Cash Management Bank, the
following segregated securities accounts or deposit accounts, as the case may be
(each, a "RESERVE ACCOUNT," and collectively, the "RESERVE ACCOUNTS"):
(A) Account No. 0000000000; captioned "Tax Reserve" for the
retention of collateral for the payment of Property Taxes and Other Taxes for
the Underlying Premises and the Premises as provided in paragraph 6 of this
Lease (the "TAX RESERVE ACCOUNT");
(B) Account No. 4770003003, captioned "Insurance" for the
retention of collateral for the payment of Policies as provided in paragraph 11
of this Lease (the "INSURANCE RESERVE ACCOUNT");
(C) Account No. 4770001604, captioned "Capital Expenditures" for
the retention of collateral in respect of Capital Improvements as provided in
paragraph 34 of this Lease (the "CAPITAL EXPENDITURE RESERVE ACCOUNT");
(D) Account No. 4770003011, captioned "Seasonal Rent" for the
retention of collateral in order to serve as a rental reserve during off-season
periods, (the "SEASONAL RENTAL RESERVE ACCOUNT");
(E) Account No. 4770001612, captioned "Promotions and Discounts
Reserve" for the retention of collateral in respect of any promotions and
discounts as provided in paragraph 39 of this Lease ("PROMOTIONS AND DISCOUNTS
RESERVE ACCOUNT").
In addition to the foregoing, Landlord and Tenant have established, and
Tenant and Landlord shall maintain at Cash Management Bank, the "CONCENTRATION
ACCOUNT," namely Account No. 0000000000 captioned "Concentration," the "RENT
ACCOUNT," namely Account No. 4770003054 captioned "Rent" and the "LOAN ACCOUNT,"
namely Account No. 4770003062 captioned "Loan."
The Tax Reserve Account, Insurance Reserve Account, Capital Expenditure
Reserve Account, Seasonal Rental Reserve Account, Promotions and Discounts
Reserve Account, the Rent Account, Loan Account and Concentration Account each
shall be pledged to Landlord as additional security for the payment, performance
and observance of Tenant's obligations under this Lease, and Landlord shall have
sole and exclusive dominion and control over said Accounts to be administered in
accordance with this Lease. Except as provided in paragraph 31(e)(iii) the
55
funds in the Accounts (other than the Concentration Account) shall not be drawn
down and shall at all times remain fully funded as a reserve. The amounts in
such Accounts (other than the Concentration Account) shall increase or decrease
as the purposes for which they are funded shall increase or decrease at
Landlord's reasonable determination. At the end of the Term, all amounts in all
Accounts, including the Concentration Account, shall be distributed to a
successor Tenant to whom the Membership Contracts are transferred pursuant to
paragraph 22(f) of this Lease.
The Frisco Accounts and the Gautier Accounts have been, and shall continue
to be, pledged to Landlord as additional security for the payment, performance
and observance of Tenant's obligations under this Lease, and Landlord has, and
until the end of the Term, shall have, control (as defined in Sections 9-104 or
8-106 of the UCC) over said Accounts for purposes of perfecting Landlord's
security interests therein.
Tenant shall continue to maintain the tri-party deposit account control and
intercreditor agreement (the "Replacement Xxxxxxx Control Agreement"), among
Xxxxxxx Bank Corporation, Landlord, and Tenant and/or one or more of its
Subsidiaries, as applicable, (the "EXISTING XXXXXXX ACCOUNTS")
(iii) Type and Control of Accounts. Tenant represents, warrants,
covenants and agrees that (i) each of the Accounts is and shall be maintained
either as a "deposit account" (as defined in Section 9-102(a)(29) of the UCC) or
as a "securities account" (as defined in Section 8-501(a) of the UCC); (ii)
Tenant is entitled to exercise the rights that comprise any financial asset
credited to any such Accounts constituting a securities account; (iii) Tenant
shall have no right to give entitlement orders with respect to the Collection
Account, the Concentration Account or any Reserve Account and, except as
expressly provided in this Agreement, no Account Collateral shall be released to
Tenant from any Accounts or Local Accounts; and (iv) all securities or other
property underlying any financial assets credited to the Accounts shall be
registered in the name of Bank or indorsed to Bank or in blank and in no case
will any financial asset credited to the Accounts be registered in the name of
Tenant, payable to the order of Tenant or specially indorsed to Tenant.
(iv) Eligible Accounts. Each of the Accounts and each of the Local
Accounts shall be an Eligible Account.
(v) Account Control Agreements. Tenant agrees that: (i) the Accounts
and the Local Accounts shall be maintained in accordance with the terms hereof;
(ii) Landlord and Tenant (for itself or on behalf of Tenant's Subsidiaries)
shall enter into such cash management agreements and tri-party account control
agreements with applicable banks and/or depositories as necessary to effectuate
the terms and conditions of this paragraph 31; and (iii) prior to the Lease
Expiration Date (provided no Event of Default shall have occurred), no tri-party
account control agreement entered into in connection with any Account (or, to
the extent applicable, any Local Account) shall be amended, supplemented or
modified without the prior written consent of Landlord, which consent Landlord
may grant or withhold in its sole and absolute discretion.
(vi) No Other Accounts. Tenant represents and warrants that Exhibit I
attached hereto lists all deposit, securities or other similar accounts owned or
maintained by Tenant and its Subsidiaries and that other than (a) the Accounts
maintained by Tenant with
56
respect to the collection of Membership Contract Receivables or Membership Dues,
(b) the Local Accounts with respect to Ancillary Income and (c) the Canadian
Accounts, there are no accounts into which any Gross Revenue (including payments
of Membership Contract Receivables or Membership Dues or any material Ancillary
Income) is or shall be deposited, collected or held. Tenant agrees that, until
the Lease Expiration Date, neither Tenant nor any other Person shall open any
accounts for the collection or holding of Membership Dues or Membership Contract
Receivable proceeds, other than the Accounts (and the Local Accounts and the
Canadian Accounts, to the extent expressly permitted hereunder). Tenant
represents and covenants to Landlord that Tenant shall not direct any Membership
Dues or payments with respect to Membership Contract Receivables to be made by
any Member in any manner other than as set forth in paragraph 31(c)(ii) of this
Lease and that Tenant shall use commercially reasonable efforts to prevent,
discourage and minimize payment of Membership Dues at campgrounds and, except
for de minimis amounts consistent with past practices, Tenant shall not deposit
any Membership Dues into the Local Accounts (other than the Gautier Accounts
with respect to collection of delinquent payments).
(vii) Miscellaneous Account Provisions. The Accounts shall be subject
to such applicable laws, and such applicable regulations of the Board of
Governors of the Federal Reserve System and of any other banking or governmental
authority, as may now or hereafter be in effect. Interest accruing on the
Accounts, if any, shall be periodically added to the principal amount of the
applicable Account and shall be held, disbursed and applied in accordance with
the provisions of this Agreement. All statements relating to the Accounts shall
be issued simultaneously by Bank to Landlord and Tenant. Tenant shall be the
beneficial owner of the Accounts and the Local Accounts for federal and state
income tax purposes and shall report all income on the Accounts and the Local
Accounts. Returned items in the Collection Account will be charged against
Tenant in the succeeding month or, if later, when actually returned.
(c) Deposits into Accounts.
(i) Initial Deposits. On the Effective Date of Restatement, Tenant
agrees, represents and warrants that it has deposited or caused to be deposited
the following amounts into the following Accounts: (i) $3,300,000 into the Tax
Reserve Account, representing Tax and Other Tax payments payable during the
period from January 1, 2006 through and including December 31, 2006; (ii)
$2,000,000 into the Insurance Reserve Account representing total premiums to be
paid on the Policies between January 1, 2006 and December 31, 2006, (iii)
$5,000,000 into the Capital Expenditure Account; (iv) $1,500,000 into the
Seasonal Rental Reserve Account; (v) $0 into the Promotions and Discounts
Reserve Account; (vi) $183,750 into the Loan Account representing the interest
due on the MHC Loan between the date hereof and July 31, 2006 into the Loan
Account; (vii) $1,460,000 into the Rent Account. On the Effective Date of
Restatement, Landlord shall permit $3,000,000 to be deposited into Tenant's
operating account, which account may only be used to pay expenses approved by
Landlord on the then current Budget. On the Effective Date of Restatement, in
the sole discretion of Landlord, all amounts held in any Accounts, other than
the Reserve Accounts, the Loan Account and Rent Account and except for the
$3,000,000 permitted to be deposited in Tenant's operating account in the
immediately preceding sentence, shall be transferred to the Concentration
Account.
57
(ii) Payments Under Membership Contracts. Tenant represents and
warrants that it has now or heretofore instructed, with respect to all
Membership Contracts in effect on the date hereof, and hereby agrees that with
respect to all future Membership Contracts it shall, irrevocably instruct and
direct all Members to send or otherwise remit all Membership Dues and proceeds
from Membership Contract Receivables (i) directly into the Collection Account by
ACH or wire transfer, (ii) by check sent to the Lockboxes, (iii) in person by
check or by credit card (including telephonic charge authorizations) at Tenant's
offices located either at Gautier, Mississippi, Frisco, Texas or Chicago,
Illinois, or (iv) in the case of Members with respect to campgrounds located in
or near Canada, for deposit into designated Canadian Accounts. Tenant shall not
permit payments pursuant to Membership Contracts to be paid to any other Person
or direct or cause any Members to pay in any manner other than as specifically
provided herein. Nothing herein is intended or shall be construed to prohibit
Tenant or Tenant's Subsidiaries from accepting payment of Membership Dues or
Membership Contract Receivables, as and when tendered by a Member at a
campground, consistent with past practice. For purposes of this paragraph,
"LOCKBOXES" shall mean those certain lockbox accounts maintained by Tenant and
Tenant's Subsidiaries at the Bank, captioned "Thousand Trails Operations Holding
Company, L.P. Lockbox" and "National American Corporation Lockbox" and bearing
the designations [P.O. XXX 00000 XXX X.X. XXX 00000], respectively, or such
other replacement lockbox accounts as consented to by Landlord in writing.
(iii) Continuing Deposits. Without limiting or qualifying the
provisions of paragraph 31(c)(ii) of this Lease, Tenant agrees that all
Membership Dues, proceeds from Membership Contract Receivables and any other
Gross Revenue (excluding interest and other earnings on deposits and other
income on accounts other than the Accounts) shall be deposited into the
Collection Account within five (5) Business Days after receipt thereof by
Tenant. Until so deposited, any such Gross Revenues (including all Membership
Dues, Membership Contract Receivables payments or proceeds from any property
disposition) that are held by Tenant shall be deemed to be Account Collateral
and shall be held in trust by Tenant for the benefit of Landlord, as secured
party, and shall not be commingled with any other funds or property of Tenant.
Subject to the provisions of paragraph 30, without limiting or qualifying any
other provision of this Agreement, Tenant hereby agrees to transfer to the
Collection Account, not less frequently than once per week, funds from time to
time on deposit in any Canadian Account.
(d) Transfers From the Concentration Account; Funding of Reserve Accounts.
(i) Authorization (Reserve Accounts). Subject to paragraph 31(d)(ii)
below, Tenant hereby irrevocably authorizes and directs Landlord, from time to
time and at any time during the period beginning on January 1st through and
including December 31st of each year, commencing on the Effective Date of
Restatement, to transfer (to the extent of available funds on deposit), and
Landlord shall, commencing on such date, transfer, from the Concentration
Account on the 15th and on the 30th day of each month (and if such dates are not
Business Days, on the next following Business Day), funds in the following
amounts and in the following order of priority, as such amounts may be adjusted
by Landlord from time to time in its reasonable discretion:
(A) an amount necessary so that the funds in the Tax Reserve
Account equal the aggregate Property Taxes and Other Taxes for the
Underlying Premises and the Premises (as estimated by Landlord in its
sole and absolute discretion
58
from time to time), which shall become due and payable from January 1
of the then current calendar year through December 31 of such year;
and
(B) an amount necessary so that the funds in the Insurance
Reserve Account equal the total premiums to be paid on the Policies
during the period commencing on January 1 of the then current calendar
year through December 31 of such year; and
(C) an amount necessary so that the funds in the Loan Account
equal the interest due on the MHC Loan in the three calendar month
period immediately following current calendar month; and
(D) an amount necessary so that the funds in the Rent Account
equal the Fixed Rent due on this Lease in the calendar month
immediately following current calendar month; and
(E) an amount necessary so that the funds in the Capital
Expenditures Reserve Account equal the total Capital Expenditures to
be made during the period commencing on January 1 of the then current
calendar year through December 31 of such year, as set forth in the
applicable Budget; and
(F) funds into the Seasonal Rental Reserve Account in an amount
equal to $1,500,000; and
(G) funds into the Promotions and Discounts Reserve Account in an
amount specified in paragraph 39 of this Lease; and
(H) the balance, if any, of all funds shall remain in the
Concentration Account in such deposit or securities account designated
by Tenant, which accounts need not be Permitted Investments.
(ii) Concentration Account. All funds deposited into the Concentration
Account shall remain in such Account as security for the performance of Tenant's
obligations under the Lease, except that so long as no Event of Default has
occurred hereunder, on the last day of each month, Landlord, after confirming
that all payments and adjustments required to be made have been made under the
Lease and the Working Capital Loan Documents, shall make payments therefrom into
Tenant's operating account to enable Tenant to pay for expenses in accordance
with, and in amounts provided by, the current budget approved by Landlord in
accordance with paragraph 30.
(iii) Rent and Indebtedness and Interest Payments. Tenant hereby
irrevocably authorizes Landlord to pay (1) Fixed Rent due hereunder, using any
funds on deposit in the Rent Account and (2) any amounts due on the MHC Loan
using any funds on deposit in the Loan Account, and Landlord shall pay such
amounts due and payable in Landlord's sole and absolute discretion.
59
(e) Payments and Disbursements from Accounts.
(i) No Event of Default. Except as set forth in paragraphs 31(d)(ii)
and 31(e)(iii) hereof, no payment shall be made from the applicable Accounts and
the Accounts shall remain fully funded for the duration of the Term, as the Term
may be extended.
(ii) Event of Default Exists. If an Event of Default exists, Tenant
hereby irrevocably authorizes Landlord to make any and all withdrawals from, and
transfers between, any Accounts as Landlord shall determine in Landlord's sole
and absolute discretion.
(iii) If Tenant does not have funds available, either in the
Concentration Account or otherwise, to pay Property Taxes, Other Taxes, income
taxes, premiums on the Policies, Capital Expenditures, Seasonal Rent or
Promotions and Discounts, it may request Landlord to make distributions from the
Accounts for such purposes. Any such request shall be accompanied by evidence,
satisfactory to Landlord, that such funds are required, and that there are no
funds available to Tenant either in the Concentration Account or elsewhere.
Thereupon, Landlord shall, provided no Event of Default is then existing, direct
that such payments be made, provided, however, that any Account from which such
payment is made shall be promptly replenished from any revenues received by the
Tenant prior to any revenue being allocated to any other use.
(f) Accounts. Tenant shall not, without the prior written consent of
Landlord, change the account location of any Account and, as a condition
precedent to any such change, the bank to which Tenant proposes to relocate any
such Account shall have executed an appropriate account control agreement, in
accordance with the provisions set forth above. Tenant shall not, without giving
prior written notice to Landlord, change the account location of any Local
Account. Tenant hereby authorizes Landlord to direct the Bank and Cash
Management Bank to take all actions authorized hereunder without notice of any
kind to Tenant. With respect to the Account Collateral, Landlord shall not be
liable for any acts, omissions, errors in judgment or mistakes of fact or law,
except for those arising as a result of Landlord's investment of such Account
Collateral in other than Permitted Investments or from Landlord's gross
negligence or willful misconduct.
(g) Certain Matters Regarding Landlord following an Event of Default.
Tenant agrees that the Bank and Cash Management Bank, as applicable, shall pay
over to Landlord all amounts deposited in the Accounts and the Local Accounts on
demand, without notice to Tenant, if, in making such demand, Landlord shall give
notice, in writing, signed by Landlord or an authorized agent thereof, that an
Event of Default exists. Landlord may exercise in respect of the Account
Collateral all rights and remedies available to Landlord hereunder, or otherwise
available at law or in equity. If an Event of Default exists, Landlord may
exercise in respect of the Account Collateral, in addition to any other rights
and remedies provided for herein or otherwise available to it, all of the rights
and remedies of a secured party upon default under the UCC then in effect in the
applicable jurisdiction. Without limiting the generality of the foregoing,
Tenant agrees that, upon the occurrence and during the continuance of an Event
of Default, it will have no further right to request or otherwise require
Landlord to disburse funds from any Account in accordance with the terms of this
Lease, it being agreed that Landlord may, at its option, (i) direct the Bank or
Cash Management Bank, as applicable, to continue to hold the funds in the
Accounts, (ii) continue, from time to time, to apply all or any portion of the
funds
60
held in the Accounts to any payment(s) which such funds could have been applied
to prior to such Event of Default (or to pay expenses directly), to the extent
and in such order and manner as Landlord in its sole discretion may determine,
and/or (iii) direct the Bank or Cash Management Bank, as applicable, to disburse
all or any portion of the funds held in the Reserve Accounts or other Account
Collateral then or thereafter held by the Bank or Cash Management Bank to
Landlord, in which event Landlord may apply the funds held in the Accounts, the
Local Accounts (to the extent not yet transferred to the Accounts) or other
Account Collateral to Tenant's obligations under this Lease, in any order and in
such manner as Landlord may determine in its sole discretion. If an Event of
Default exists, Landlord may, at any time or from time to time: (1) collect,
appropriate, redeem, realize upon or otherwise enforce its rights with respect
to the Account Collateral, or any part thereof, without notice to Tenant and
without the need to institute any legal action, make demand to or upon Tenant or
any other Person, exhaust any other remedies or otherwise proceed to enforce its
rights; (2) execute (in the name, place and stead of Tenant) any endorsements,
assignments or other instruments of conveyance which may be required for the
withdrawal and negotiation of the Account Collateral; and/or (3) exercise all
other rights and remedies available to Landlord hereunder. Notwithstanding
anything to the contrary contained herein: (x) the exercise by Landlord of any
of its rights hereunder shall not release Tenant from its obligations under this
Lease, nor shall it constitute an election of remedies by Landlord or a waiver
by Landlord of any of its rights and remedies under this Lease; (y) except as
expressly set forth in this Lease, Landlord shall not have any obligation or
liability by reason of this Lease, nor shall Landlord be obligated to perform
any of the obligations or duties of Tenant hereunder or to take any action, in
each case, to collect or enforce any claim for payment assigned hereunder; and
(z) Landlord shall not have to resort to using the Account Collateral before
making demand upon or bringing an action against Tenant under any guaranty given
in connection with this Lease. No failure on the part of Landlord to exercise,
and no delay in exercising, any right under this Lease shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right under this
Lease. The remedies provided in this Lease are cumulative and not exclusive of
any remedies provided at law or in equity.
(h) Representations and Warranties Regarding Account Collateral. In
addition to any other representations or warranties contained in this Lease,
Tenant represents and warrants as follows: (a) Tenant is the legal and
beneficial owner of the Account Collateral, free and clear of any Liens, except
for the Liens in favor of Landlord created by this Lease and Liens on the
Membership Contract Receivables arising under the Working Capital Loan
Documents; (b) upon execution by Tenant of this Lease, the pledge and assignment
of the Account Collateral pursuant to this Lease will create a valid, first
priority security interest in the Account Collateral (subject to the Liens on
the Membership Contract Receivables arising under the Working Capital Loan
Documents), securing the payment and performance of Tenant's obligations under
this Lease, specifically excluding receivables held by the Canadian debtor, for
which no representation is made; and (c) Tenant is not a party to any credit
agreement or other borrowing facility including, but not limited to, a line of
credit or overdraft line, with the Bank (other than with respect to the Working
Capital Indebtedness).
(i) Covenants Regarding Account Collateral and Finances of Tenant. Tenant
shall not, without the prior written consent of Landlord which may be granted or
withheld in Landlord's sole and absolute discretion, (a) sell, assign (by
operation of law or otherwise), pledge or grant any option with respect to, any
of the Gross Revenues or any interest in the
61
Account Collateral or (b) create or permit to exist any assignment, lien,
security interest, option or other charge or encumbrance upon or with respect to
any of the Gross Revenues or any Account Collateral, except for the Liens in
favor of Landlord under this Lease and Liens on Membership Contract Receivables
under the Working Capital Loan Documents or (c) except as otherwise permitted by
paragraph 38(d), make or receive or allow another party than Landlord or its
designee to make or receive any distribution from the Accounts or (d) except as
otherwise permitted by paragraphs 38(d), 38(f) and 38(j), receive, or allow any
party other than Landlord or its designee to receive, any revenues derived from
the Premises. Tenant shall give Landlord not less than fifteen (15) days' prior
written notice of any change in the address of the chief executive office or
principal office of Tenant. Tenant agrees that all records of Tenant with
respect to the Account Collateral shall be kept at the principal office of
Tenant and shall not be removed therefrom without the prior written consent of
Landlord, which consent shall not be unreasonably withheld. Tenant shall not
make or consent to any amendment or other modification or waiver with respect to
any Account Collateral, or enter into any agreement, or permit to exist any
restriction, with respect to any Account Collateral. Tenant shall, at its
expense, defend Landlord's right, title and security interest in and to the
Account Collateral against the claims of any Person. Tenant shall not take any
action which would impair the enforceability of this Lease or the security
interests created hereby. Tenant shall not enter into any credit agreement or
other borrowing facility including a line of credit or overdraft line, without
Landlord's consent which Landlord may grant or withhold in its sole and absolute
discretion. Nothing contained in this paragraph shall impair or otherwise limit
Tenant's obligations to timely make the payments required by this Lease, it
being understood that such payments shall be so timely made in accordance with
this Lease, regardless of the amounts on deposit in any Account. With respect to
the powers conferred on Landlord hereunder, Landlord shall not have any duty as
to the Accounts or the other Account Collateral, or any responsibility for (i)
ascertaining or taking action with respect to any matters relative to the
Accounts or the other Account Collateral, whether or not Landlord has or is
deemed to have knowledge of such matters (except with respect to Landlord's
obligations relating to the payment of Property Taxes and Other Taxes as
expressly provided herein) or (ii) taking any necessary steps to preserve rights
against prior parties or any other rights pertaining to the Accounts or the
other Account Collateral.
(j) Cash Management Fees. All reasonable third party fees, costs and
expenses associated with the Account Collateral shall be paid by Tenant when
due.
(k) Security Interest. Tenant hereby pledges, transfers and assigns to
Landlord, and grants to Landlord, as additional security for Tenant's
obligations under this Lease, a continuing perfected first priority security
interest in and to, and a first lien upon: (i) the Accounts and Local Accounts
owned by it from time to time, now existing or hereafter arising, and all
amounts which may from time to time be on deposit in each of such Accounts and
Local Accounts (such first lien is subject to the Lien on Membership Contract
Receivables arising under the Working Capital Loan Documents); (ii) all of
Tenant's right, title and interest in and to all cash, property or rights
transferred to or deposited in each Account and each Local Account from time to
time; (iii) all certificates and instruments, if any, from time to time
representing or evidencing the Accounts or Local Accounts or any amount on
deposit in any thereof, or any value received as a consequence of possession
thereof, including all interest, dividends, cash, instruments and other property
from time to time received or otherwise distributed in respect of, or in
exchange for, any or all of such Accounts or Local Accounts; (iv) all monies,
chattel paper, checks, notes, bills of
62
exchange, negotiable instruments, documents of title, money orders, commercial
paper, and other security instruments, documents, deposits and credits from time
to time in the possession of Landlord representing or evidencing such Accounts
or Local Accounts; (v) all other property, held in, credited to or constituting
part of any of the Accounts or Local Accounts; (vi) all earnings and investments
held in any Account or Local Account in accordance with this Lease; and (vii) to
the extent not described above, any and all proceeds of the foregoing
(collectively, the "ACCOUNT COLLATERAL"). This Lease and the pledge, assignment
and grant of security interest made hereby secures payment of all of Tenant's
obligations under this Lease in accordance with the provisions set forth herein.
This Lease shall be deemed a security agreement within the meaning of the UCC.
(l) Bank Accounts. Tenant shall not establish any new bank accounts without
prior written notice to Landlord and, except with respect to Local Accounts
(other than the Frisco Accounts and the Gautier Accounts), unless Landlord, such
Tenant and the bank at which the account is to be opened enter into a tri-party
agreement regarding such bank account pursuant to which such bank, among other
things, acknowledges the security interest of Landlord in such bank account,
agrees to comply with instructions originated by Landlord directing disposition
of the funds in the bank account without further consent from Tenant, and agrees
to subordinate and limit any security interest the bank may have in the bank
account on terms satisfactory to Landlord.
(m) As part of Tenant's cooperation with Landlord's financing set forth in
paragraph 27 of this Lease and the granting of any Mortgage to any Mortgagee,
Tenant agrees that the Accounts and each management system in place under this
Lease may be assigned to and controlled by Mortgagee so long as Tenant's rights
under this paragraph 31 are not diminished or obligations increased and Tenant
shall cooperate with such efforts and execute such documents as are required
thereby.
32. NOTICES
Notices, statements, demands or other communications required or permitted
to be given, rendered or made by either party to the other pursuant to this
Lease or pursuant to any applicable law or requirement of public authority,
shall be in writing (whether or not so stated elsewhere in this Lease) and shall
be deemed to have been properly given, rendered or made when received by
personal delivery or overnight delivery or overnight courier delivery (or, if
such delivery is refused, upon the date that delivery would have occurred but
for such refusal) or facsimile transmission (with electronic confirmation
therefor) with a confirmation copy of the entire original transmittal sent by
overnight delivery or by overnight courier delivery addressed to the other
parties as follows:
To Landlord: MHC TT Leasing Company, Inc.
c/o Equity LifeStyle Properties, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
63
With a copy to: Equity LifeStyle Properties, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxxx Xxxxxx Xxxxxxxx LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To Tenant: Thousand Trails Operations Holding Company, L.P.
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxx Xxxxxx & Xxxxxxxxx LLP
0 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party listed in this paragraph 32 may, by notices as aforesaid, designate a
different address for notices, statements, demands or other communications
intended for it.
33. EXCESS LAND
(a) Landlord and Tenant acknowledge and agree that Landlord, or an
affiliate of Landlord (the "EXCESS LAND OWNER") is the owner of the Excess Land,
and, except for the revocable license provided in paragraph 2(e), Tenant
disclaims any right, title or interest in the Excess Land. Landlord has advised
Tenant that Excess Land Owner may, in its sole and absolute discretion, develop
any or all of such Excess Land in any manner and for any reason whatsoever.
(b) Tenant agrees and acknowledges that it has a good faith obligation to
cooperate with Landlord (or Landlord's affiliate) in Landlord's (or Landlord's
affiliate's) development of the Excess Land, including the execution of releases
or quit claims affecting such Excess Land and participation and cooperation in
any zoning or other land use petitions. Tenant agrees that failure to so
cooperate with Landlord shall constitute a material breach of this Lease. Tenant
hereby agrees and acknowledges that Landlord or Landlord's affiliate may
transfer or sell the
64
Excess Land or any portion thereof at any time to another affiliate of Landlord
or to any third party without Tenant's consent.
(c) Determination of whether any portion of the Premises consists of Excess
Land shall be made by Landlord in its sole and absolute discretion.
34. CAPITAL EXPENDITURE RESERVE / IMMEDIATE REPAIRS
(a) Capital Expenditure Reserve. Deposits into the Capital Expenditure
Reserve Account, other than the deposits for Immediate Repairs, shall be made
for the purpose of establishing and maintaining a reserve (the "CAPITAL
EXPENDITURE RESERVE") for the completion of such capital improvement items and
for equipment for use at the Sites ("CAPITAL IMPROVEMENTS") to the extent set
forth in the Budget or as are otherwise approved in advance by Landlord
("APPROVED CAPITAL IMPROVEMENTS"). If the funds contained in the Capital
Expenditure Reserve are made available to Tenant pursuant to paragraph
31(e)(iii), such funds shall be utilized by Tenant solely for Approved Capital
Improvements.
If funds in the Capital Expenditure Reserve are made available to Tenant
pursuant to paragraph 31(e)(iii), such funds shall be subject to satisfaction of
each of the following terms and conditions: (a) all Capital Expenditure Reserve
funds released by Landlord to Tenant shall be used to pay for or to reimburse
Tenant for the reasonable expenses actually incurred and paid by Tenant for
Approved Capital Improvements; (b) Tenant shall have delivered to Landlord a
Request for Release satisfactory to Landlord together with a summary of all
Capital Improvements to be made with such requested funds; (c) disbursements
from the Capital Expenditure Reserve shall not be made more frequently than once
per month; (d) each request for a disbursement shall be in an amount of not less
than $10,000.00; and (e) upon request of Landlord, Tenant shall also provide
Landlord with additional evidence satisfactory to Landlord that Tenant is the
owner or lessee of any Capital Improvements or equipment for which reimbursement
is sought, free of any Liens (other than the first priority security interest in
favor of Landlord). Landlord shall make each disbursement of the Capital
Expenditure Reserve funds within three (3) Business Days after satisfaction of
all the conditions to that disbursement. Notwithstanding the foregoing, at
Landlord's election, if any disbursement of Capital Expenditure Reserve Funds is
made to Tenant to pay a capital expenditure then due and owing (as opposed to a
reimbursement for amounts paid by Tenant), then Tenant shall provide evidence to
Landlord within three (3) Business Days of such disbursement that such capital
expenditure was in fact paid as and when due. If an Event of Default exists,
Landlord may apply the Capital Expenditure Reserve funds, together with any
interest accrued thereon, to Tenant's obligations under this Lease in such order
and priority as Landlord may determine. Tenant shall furnish to Landlord on or
prior to the thirtieth (30th) day following the end of each calendar quarter a
statement ("CAPITAL EXPENDITURE RESERVE STATEMENT") setting forth (a) all
deposits into and from the Capital Expenditure Reserve and all disbursements
from the Concentration Account to pay for Capital Improvements, and (b) a
schedule of Capital Improvements and related expenses to which disbursements
from the Capital Expenditure Reserve were applied during the applicable calendar
quarter, including, to the extent not previously provided to, and approved by,
Landlord, invoices, receipts, lien waivers and other documentation as Landlord
shall request. If Landlord has agreed to make disbursements from the Capital
Expenditure Reserve Account pursuant to paragraph 31(e)(iii), Landlord shall not
make any such disbursements until (i) Landlord has approved the expenditures
proposed by Tenant, (ii) all conditions to such disbursement have
65
been satisfied and (iii) if requested by Landlord, Tenant has provided Landlord
with all invoices, receipts, lien waivers and other documentation reasonably
requested by Landlord.
(b) Immediate Repairs. Tenant shall complete those improvements and repairs
highlighted with an asterisk on Exhibit O attached hereto no later than December
31, 2006. Tenant shall use commercially reasonable efforts to complete the
balance of the improvements and repairs on Exhibit O attached hereto within
timeframes during which a prudent owner / operator of membership campgrounds
would make such improvements and repairs. Tenant shall perform each Immediate
Repair in accordance with the terms and provisions of paragraph 23 of this Lease
and upon completion of such Immediate Repair, Tenant shall provide Landlord with
final lien waivers for all trades and materials and evidence satisfactory to
Landlord that such Immediate Repair has been fully completed. Landlord shall
have no obligation to pay any costs for such Immediate Repairs and Tenant shall
pay all costs of such Immediate Repairs in full. If Tenant fails to complete any
Immediate Repair within the time frame specified in this paragraph 34(b), then
upon ten (10) Business Days' prior written notice to Tenant, Landlord may
complete such Immediate Repair and Tenant shall pay Landlord as Additional Rent
forthwith (and in any event within thirty (30) days) after being billed for same
by Landlord the cost thereof plus an administrative fee of five percent (5%) of
such cost, which xxxx shall be accompanied by reasonable supporting
documentation. Such amounts shall bear interest at the Overdue Rate from the
date of expenditure by Landlord to the date of repayment by Tenant. Tenant shall
remain responsible for any increased costs to repair such Immediate Repair in
excess of the amount set forth on Exhibit O and such increased amount shall bear
interest at the Overdue Rate.
35. INTENTIONALLY OMITTED.
36. INTENTIONALLY OMITTED.
37. INTENTIONALLY OMITTED
38. AFFIRMATIVE, NEGATIVE AND FINANCIAL COVENANTS OF TENANT
(a) During the Term of this Lease, all of the business and operations of
Tenant and its Subsidiaries as conducted prior to the date hereof by such
entities and their predecessors ("TENANT'S BUSINESS") shall continue to be
operated by Tenant and its Subsidiaries after the date hereof, and Tenant and
Tenant's Subsidiaries, as applicable, shall not engage in any business other
than Tenant's Business. Tenant's Business is the operation and management of (i)
membership campgrounds, (ii) reciprocal use and affiliation programs for use of
campgrounds, (iii) management of campgrounds for third parties, including the
United States Forest Service and (iv) other business related and ancillary to
the businesses described in clauses (i), (ii) and (iii), above. Without limiting
the generality of the foregoing, Tenant shall not operate any portion of
Tenant's Business other than directly itself or through its Subsidiaries. In
furtherance thereof, except as otherwise expressly provided herein, Tenant shall
not and shall not permit its Subsidiaries to authorize, issue or enter into any
agreement providing for the issuance (contingent or otherwise) of (x) any notes
or debt securities containing equity features, including any notes or debt
securities convertible into or exchangeable for equity securities, issued in
connection with the issuance of equity securities or containing profit
participation features, (y) any equity securities (or any securities convertible
into or exchangeable for any equity securities), or (z) any capital appreciation
or profit participation rights. Subject to the provisions
66
of paragraph 25 of this Lease, at no time shall Tenant (1) cease to, directly or
indirectly, own and control one hundred percent (100%) of each class of the
outstanding equity interests of each Subsidiary or (2) own any asset, directly
or indirectly, other than its ownership interests in the Subsidiaries. Tenant
may not acquire or form any corporations, partnerships, limited liability
companies, associations or other business entities unless such entities are
wholly owned and controlled by Tenant and Landlord shall have received (x) a
Subsidiary Pledge, by which such entity pledges one hundred percent (100%) of
its assets to Landlord, (y) a joinder to the Subsidiary Guaranty, in the form
attached thereto and (z) a replacement Tenant Pledge, by which Tenant shall
pledge to Landlord one hundred percent (100%) of the ownership interest in each
Subsidiary, including the entity or entities contemplated by this paragraph
38(a).
(b) Tenant shall not directly or indirectly create, incur, assume or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness except for (i) the obligations of Tenant under this Lease, (ii) the
Working Capital Indebtedness, and (iii) any other Indebtedness approved by
Landlord, which approval shall be granted or withheld in Landlord's sole and
absolute discretion.
(c) Tenant shall not permit any of its Subsidiaries directly or indirectly,
to create, incur or otherwise become or remain, directly or indirectly, liable
with respect to any Indebtedness except for (i) ordinary and customary trade
payables which are incurred in the ordinary course of its business provided that
not more than $1,000,000 of which, in the aggregate at any time outstanding, are
more than ninety (90) days overdue, (ii) the obligations of the Subleasing
Subsidiaries under the Tenant Subleases, and (iii) any other Indebtedness
incurred as a co-borrower with or guarantor of Tenant (provided such other
Indebtedness is permitted by paragraph 38(b), above).
(d) Tenant shall not nor shall it permit any of its Subsidiaries directly
or indirectly to convey, sell, lease, sublease, transfer or otherwise dispose
of, or grant to any Person an option (other than the Option Agreement) to
acquire, in one transaction or a series of related transactions, any of its
property, business or assets, or the capital stock of or other equity interests
in any of its Subsidiaries, whether now owned or hereafter acquired, except as
set forth in this paragraph 38(d) or as otherwise permitted by Landlord in its
sole and absolute discretion. During the period commencing April 1, 2009 and
ending March 31, 2011, Privileged Access, L.P. ("PA") may request in writing
approval from Landlord to receive a one time distribution equal to the
Incremental Value (the "PERMITTED DISTRIBUTION"). In the event of the death or
Disability of Xxx X. XxXxxxx prior to April 1, 2009, PA may exercise its rights
hereunder during such period commencing April 1, 2009 and ending March 31, 2011.
Conditions precedent to a Permitted Distribution are (i) a simultaneous Transfer
Event, (ii) Incremental Value must exist on the date of Permitted Distribution,
(iii) no distribution shall have been made pursuant to paragraph 38(j) below,
and (iv) no Event of Default is existing at the time of the Permitted
Distribution. Any such request from PA shall include (i) a written description
of the proposed Transfer Event (including identification and background of the
proposed acquiror and the terms of the transaction) and (ii) a copy of the
proposed definitive documents for the transaction. Landlord will not
unreasonably withhold its approval (which must be in writing) of such a Transfer
Event. On the date any Permitted Distribution is to take place pursuant to this
paragraph 38(d), Tenant shall deliver to Landlord evidence satisfactory to
Landlord that Incremental Value exists on the date of Permitted Distribution and
Landlord will approve third party financing. Such Approved Third Party Financing
shall not be negatively impacted by
67
Landlord's rights with respect to Percentage Rent or pursuant to paragraph 5(e).
In connection with the consummation of an approved Permitted Distribution, only
the following transactions are permitted to occur on the date of the Permitted
Distribution: (i) Tenant may make a distribution of Surplus Cash to its equity
holders; (ii) if Surplus Cash is less than Incremental Value, Tenant may obtain
an unsecured Approved Third Party Financing and distribute the net proceeds of
such Approved Third Party Financing to its equity holders; and (iii) Tenant may
issue an unsecured promissory note (in form and substance reasonably acceptable
to Landlord) to PA in a principal amount equal to (a) such Incremental Value
minus (b) Surplus Cash minus (c) Approved Third-Party Financing (such promissory
note shall bear an interest rate equal to the then current prime rate plus one
percent (1%) and shall be payable only from Excess Cash Flow); provided,
however, that the aggregate amount of cash distributed by Tenant in the
transactions set forth in (i), (ii) and (iii) of this sentence shall under no
circumstances exceed the Incremental Value and all of the terms and conditions
and form of documentation of all such transactions are subject to the approval
of Landlord in its reasonable discretion. Any Indebtedness incurred pursuant to
this paragraph 38(d) is "DISTRIBUTION INDEBTEDNESS." PA is a third party
beneficiary to this paragraph 38(d). Tenant hereby represents and warrants that
the sole direct or indirect owner of PA is Xxx X. XxXxxxx and shall remain such
for the term of this Lease, except as provided in this Lease.
(e) Tenant shall not nor shall it permit any of its Subsidiaries to acquire
any assets except as specifically permitted in this Lease and as may otherwise
by permitted by Landlord in its sole and absolute discretion.
(f) Tenant shall not nor shall Tenant permit any of its Subsidiaries
directly or indirectly to declare, order, pay, make or set apart any sum for any
Restricted Junior Payment, except (i) as otherwise explicitly provided herein
and (ii) except for distributions in cash from Tenant's operating account to
Tenant's equity holders in an aggregate amount each calendar year equal to
(x)(1) the amount of taxable income of Tenant allocated to its equity holders
for such calendar year multiplied by (2) the combined maximum federal and state
income tax rate to be applied to such taxable income (calculated by using the
highest maximum combined marginal federal and state income tax rates for an
individual resident of the relevant state of residence of Tenant's principal
indirect individual equity holder and taking into account the deductibility of
state income tax for federal income tax purposes) and (y) an additional
aggregate amount of $125,000 in any twelve month period.
(g) Guarantor shall at all times continue to, directly or indirectly, own
and control one hundred percent (100%) of the outstanding equity interests of
Tenant. Additionally, Guarantor shall cause Tenant to not own any assets,
directly or indirectly, other than the assets in existence on the date of this
Lease or otherwise acquired in accordance with this Lease and Tenant's Business.
(h) None of Tenant, any direct or indirect holder of any Tenant Equity
Interest or any Affiliate of Tenant (together, the "RESTRICTED HOLDERS") shall
own, individually or collectively with any other Restricted Holders, ten percent
(10%) or more of any class or series of equity interest of Equity LifeStyle
Properties, Inc., MHC Trust or the Trust.
(i) Tenant agrees to cause the equity holders of PA and PATT to take all
action necessary including, but not limited to, the voting of their equity
interests, the execution of written consents, the calling of special meetings,
the removal of directors, the filling of vacancies
68
on the Board of Directors (or other governing body), the waiving of notice and
the attending of meetings, so as to cause a Landlord designee to be a member of
such Boards of Directors (or other governing bodies) at all times.
(j) For a period of sixty (60) days after the earlier of (i) the death or
Disability of Xxx X. XxXxxxx or (ii) the withdrawal of Xxx X. XxXxxxx as active
chief executive of Tenant at any time after April 14, 2007 (either (i) or (ii)
shall be the "Triggering Event") and, in either case, so long as no Event of
Default is existing under this Lease at the time of the Triggering Event, Tenant
may request in writing approval from Landlord for the sale of RPI. Solely for
the purposes of determining whether an Event of Default is existing under this
Lease at the time of the Triggering Event pursuant to this subparagraph 38(j),
no Event of Default occurring solely under any of paragraphs 15(c), 15(d),
15(h), 15(i), 15(j), or 15(l) of this Lease shall be deemed to exist until five
(5) days after Landlord's written notice of such Event of Defaults. Any such
request from Tenant shall include a written description of the proposed sale.
Landlord will not unreasonably withhold its approval (which must be in writing)
of such sale. In connection with the consummation of a sale of RPI pursuant to
this paragraph 38(j), (i) Landlord shall release RPI from all guaranties and
other agreements related to this Lease, (ii) Landlord shall release all liens,
security interests, and other encumbrances Landlord holds on any stock or equity
interest in RPI and on any of RPI's assets, (iii) upon the enforcement of any
Guaranty, or Subsidiary Guaranty, Landlord shall not enforce directly or
indirectly any claim under such Guaranty against stock or equity interest in RPI
or on any of RPI's assets, and (iv) Landlord will permit up to $2,500,000 of the
proceeds to be distributed indirectly to Xxx X. XxXxxxx or the estate of Xxx X.
XxXxxxx in his capacity as indirect equity owner of Tenant. However, in no event
will Landlord be required to provide any capital or otherwise accommodate a
distribution except as provided herein. Landlord makes no representation or
warranty with respect to the current or future value of RPI and to the extent
that either RPI is not saleable or the proceeds upon sale are less than
$2,500,000, then the permitted distribution to Xxx X. XxXxxxx will be reduced
accordingly. "DISABILITY" means the failure of Xxx X. XxXxxxx to perform his
material duties with respect to Tenant by reason of injury, illness, disease or
other permanent condition, from which he is unlikely to recover, for a period of
ninety (90) consecutive days. Notwithstanding the foregoing, no sale of RPI
shall be permitted to occur if a Permitted Distribution (as set forth in
paragraph 38(d) above) has been made.
(k) In addition to amounts payable pursuant to paragraph 38(f) of this
Lease, Tenant shall not allow Xxx XxXxxxx to be paid, in the aggregate, either
by itself or any Affiliate of Tenant, any salary, bonus or other payments in
excess of the amounts permitted under an employment agreement.
(l) Upon the death of or Disability of Xxx X. XxXxxxx, or if Xxx X. XxXxxxx
ceases to be an active chief executive of Tenant for any other reason, Tenant
shall appoint a substitute executive within ninety (90) days, whom Landlord
shall have the right to approve.
39. PROMOTIONS AND DISCOUNTS RESERVE ACCOUNT
Tenant recognizes Landlord's interest in continued annual dues payable
under Membership Contracts in order for proceeds to be available for the
maintenance and delivery of services at the Premises for the benefit of the
holders of all Membership Contracts. As a result, Tenant agrees to endeavor to
continue to operate and to cause Tenant's Subsidiaries to continue
69
to operate Tenant's Business in a manner which remains consistent with the
relationship between usage benefits and annual membership dues currently in
existence as of the date of this Lease (such manner of operation being referred
to herein as "TENANT'S MANNER OF OPERATION"). If Tenant or any of Tenant's
Subsidiaries pursue any marketing effort that would cause Tenant to materially
and adversely deviate from Tenant's Manner of Operation, taking into account
Tenant's business as a whole (such deviation shall be referred to herein as a
"VARIANCE PROGRAM"), then Tenant shall, within five (5) Business Days after
instituting such marketing effort, notify Landlord of such Variance Program.
Promptly thereafter, Landlord and Tenant shall use good faith efforts to
determine whether or not and to what extent Tenant shall be obligated to make a
deposit into the Promotions and Discount Reserve in connection with such
Variance Program ("VARIANCE PROGRAM DEPOSIT") and upon such agreement, Tenant
shall make such Variance Program Deposit into the Promotions and Discount
Reserve Account. Within ninety (90) days following the expiration of each fiscal
year of Tenant, Tenant shall furnish to Landlord a certificate of Tenant's Chief
Financial Officer stating that in such officer's good faith judgment, Tenant has
not commenced and has not permitted any of Tenant's Subsidiaries to commence any
Variance Programs during the preceding fiscal year of Tenant other than those
which Tenant has disclosed to Landlord. Variance Program Deposits made into the
Promotions and Discounts Reserve Account shall be made for the purposes of
establishing and maintaining a reserve (the "PROMOTIONS AND DISCOUNTS RESERVE")
for the payment of any deficiencies in Tenant's payment of Rent under this
Lease. If Tenant or Tenant's Subsidiaries revise its marketing efforts in a
manner that reinstitutes Tenant's Manner of Operation (or otherwise positively
affects the relationship between usage benefits and annual membership dues),
then Tenant shall be entitled to withdraw funds from the Promotions and Discount
Reserve, in amounts and at times approved by Landlord, such approval not to be
unreasonably withheld, delayed or conditioned.
40. LANDLORD SUBORDINATION AND NON-DISTURBANCE
(a) Notwithstanding anything in this Lease to the contrary, Landlord hereby
covenants and agrees that:
(i) Its rights in each Resort (as hereinafter defined) shall be
subordinate to the rights of Purchasers (as hereinafter defined) from and after
the date of this instrument;
(ii) In the event of the termination of this Lease or of Tenant's
possession of the Premises, Landlord shall take each Resort subject to the use
rights of Purchasers;
(iii) In the event of termination of this Lease or of Tenant's
possession of the Premises, Landlord shall fully honor all rights of Purchasers
to occupy and use any Resort as provided in the Purchasers' Camping Resort
Contracts (as hereinafter defined);
(iv) In the event of termination of this Lease or of Tenant's
possession of the Premises, Landlord shall fully honor all rights of Purchasers
to cancel their Camping Resort Contracts and receive appropriate refunds; and
(v) In the event of the termination of this Lease or of Tenant's
possession of the Premises, Landlord shall not discontinue use of any Resort or
cause or permit any Resort to be used in a manner which would prevent or
materially prevent or interfere with Purchasers from
70
using or occupying the Resort in the manner contemplated by the Purchasers'
Camping Resort Contracts. However, except as required by applicable law,
Landlord shall have no obligation or liability to assume the responsibilities or
obligations of Tenant or any of its Affiliates under the Camping Resort
Contracts.
(b) In the event of the termination of this Lease or of Tenant's possession
of the Premises and Landlord does not continue to operate the Resort upon
conditions no less favorable to Purchasers than existed prior to the change of
title or possession, Landlord and its successors and assigns shall either:
(i) Offer the title to or possession of the Resort to an association
of Purchasers to operate the Resort; or
(ii) Obtain a commitment from another entity (which obtains title or
possession to the Resort) to undertake the responsibility of operating the
Resort.
(c) The covenants contained herein may be enforced by each Purchaser of a
Camping Resort Contract, provided that the Purchaser is not in default under the
terms of the Purchaser's Camping Resort Contract.
(d) The covenants contained herein shall be effective as between each
Purchaser and Landlord despite any rejection or cancellation of the Purchaser's
Camping Resort Contract during any bankruptcy proceedings of Tenant or any of
its present or future Affiliates.
(e) The covenants and agreements contained herein shall inure to the
benefit of and be binding upon the successors and assigns of Tenant and
Landlord.
(f) When used in this Section, each of the following terms shall be defined
as set forth below:
(i) "PURCHASER" shall mean a person who enters into a Camping Resort
Contract, whether before or after the date hereof, and thereby obtains title to,
an estate or interest in, or license or the right to use the Resort.
(ii) "CAMPING RESORT CONTRACT" shall mean an agreement between (1)
Tenant or any of its present or future Affiliates or any predecessor in interest
to Tenant or such Affiliates and (2) a Purchaser evidencing the Purchaser's
title to, estate or interest in, or right or license to use the Resort.
(iii) "RESORT" means any campground located on or forming a part of
the Premises.
The covenant of non-disturbance contained herein is made for the benefit of
Tenant and Landlord and each Purchaser and shall be binding upon and inure to
the benefit of Tenant and Landlord and their respective successors and permitted
assigns and shall be binding upon and inure to the benefit of each Purchaser and
his or her respective successors and permitted assigns. On Tenant's request,
Landlord shall cause to be delivered under the Master Leases a nondisturbance
agreement to Subleasing Subsidiaries, or their successors or assigns.
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41. STATE SPECIFIC PROVISIONS
(a) The following provisions shall apply with respect to any Site(s)
located in the State of Arizona:
(i) The following language is added to the definition of "Land" in
paragraph 1 of this Lease, following the phrase "all other property rights":
"water rights"
(ii) The word "for," is hereby inserted in the Lease as follows:
(A) In paragraphs 6(a) and 6(b) of this Lease after the phrase
"on an After-Tax Basis" and before the phrase "from and against any
such Taxes."
(B) In paragraph 6(h) of this Lease, after the phrase "on an
After-Tax Basis" and before the phrase "from and against any claims
for payment thereof."
(C) In paragraph 7(a) of this Lease, after the phrase "on an
After-Tax Basis" and before the phrase "from and against, any and all
costs, charges and expenses attributable to the Premises or Underlying
Premises."
(D) In paragraph 18(b) of this Lease, after the phrase
"successors and assigns" and before the phrase "from and against any
and all claims."
(E) In paragraph 22(b) of this Lease, after the phrase "on an
After-Tax Basis" and before the phrase "from and against loss or
liability."
(F) In paragraph 26(c) of this Lease, after the phrase "on an
After-Tax Basis" and before the phrase "from and against any and all
liability."
(iii) The following language is added to paragraph 16(a)(ii)(B) of
this Lease, following the phrase "from and after any such Event of Default":
"and to the extent such statute or common law can be waived,"
(iv) With regard to any Site located in the State of Arizona, Tenant
expressly waives the benefit of any statute now or in the future in effect which
would otherwise afford Tenant the right to terminate this Lease due to casualty
or damage to the Site including, without limitation, Arizona Revised Statutes
Section 33-343.
(b) The following provisions shall apply with respect to any Site(s)
located in the State of California:
(i) The following language is added at the end of paragraph 6(a) of
this Lease:
"In addition, "Property Taxes" shall include any taxes as a
result in any change in ownership with respect to the Premises
pursuant to
72
Proposition 13 as adopted by the voters of the State of
California in the June 1978 election, and the costs of any
transit impact development fees, housing and child care
contributions or other similar or dissimilar impositions required
of Landlord with respect to the Premises or otherwise imposed by
the local governmental or quasi-governmental instrumentalities.
In no event shall Tenant be responsible for any taxes relating to
Landlord's sale of the Premises."
(ii) Except to the extent specifically provided in this Lease, Tenant
hereby waives, to the maximum extent permitted by applicable laws, any rights
that it may now or in the future have to quit or surrender or vacate the
Premises, to terminate this Lease, or to any abatement, diminution, offset,
reduction or suspension of Rent on account of Landlord's failure to timely or in
a satisfactory manner deliver possession of the Premises to Tenant or on account
of any other event or circumstance, including any rights it might otherwise have
under the provisions of sections 1932, 1933, 1941 and/or 1942 of the California
Civil Code, it being the express intention of the parties, and therefore it
being agreed by the parties, that the terms of this paragraph shall control
under any circumstances in which said statutes might otherwise apply, and govern
and replace any rights covered by said statutes.
(iii) The following language is added at the end of the first
grammatical paragraph of paragraph 10 of this Lease:
"The provisions of Sections 1932(2) and 1933(4) of the California
Civil Code are hereby waived by Tenant, it being the intention of
the parties that the express terms of this Lease shall control
under any circumstances in which those provisions might otherwise
be applicable."
(iv) The following language is added to the first sentence of
paragraph 12 of this Lease, following the defined term "ADA":
"and California Civil Code Section 3110.5,"
The following language is added to paragraph 12 of this Lease,
following the phrase "with respect to the use or manner of use" and before the
phrase "of the Premises, or such adjacent or appurtenant facilities":
"maintenance, operation, repair, alteration or construction"
(v) The following language is added at the end of paragraphs 13 and 14
of this Lease:
"The provisions of Sections 1265.110, 1265.120, 1265.130 and
1265.140 of the California Code of Civil Procedure are hereby
waived by Tenant, it being the intention of the parties that the
express terms of this Lease shall control under any circumstances
in which those provisions might otherwise be applicable."
73
(vi) The following language is added at the end of paragraph 16(a) of
this Lease:
"(vi) With respect to any Site(s) located in the State of
California, terminate Tenant's right to possession of the
Premises by any lawful means, in which case this Lease shall
terminate and Tenant immediately shall surrender possession of
the Premises to Landlord. In such event Landlord shall be
entitled to recover from Tenant all damages incurred by Landlord
by reason of Tenant's default including (i) the cost of
recovering possession of the Premises; (ii) the worth at the time
of the award of any unpaid Rent which had been earned at the time
of termination; (iii) the worth at the time of the award of the
amount by which the unpaid Rent which would have been earned
after the termination until the time of the award exceeds the
amount of such rental loss that Tenant proves could reasonably
have been avoided; (iv) reasonable expenses of placing the
Premises in good order, condition and repair; (v) reasonable
expenses of relating, including necessary renovation and
alteration of the Premises; (vi) reasonable and actual attorneys'
fees; (vii) the worth at the time of award of the amount by which
the unpaid Rent required to be paid by Tenant pursuant to this
Lease for the balance of the Term after the time of such award
exceeds the amount of such rental loss for the same period that
Tenant proves reasonably could be avoided; (viii) that portion of
any leasing commission paid by Landlord and applicable to the
unexpired Term of this Lease; and (ix) any other amount necessary
to compensate Landlord for all the detriment proximately caused
by Tenant's failure to perform its obligations under this Lease
or which in the ordinary course of things would be likely to
result therefrom, including damages for diminution in the value
of the Premises. As used in subparagraphs (ii) and (iii), above,
the "worth at the time of award" is computed by allowing interest
at the Overdue Rate. As used in subparagraph (vii), above, the
"worth at the time of award" is computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%). Unpaid
installments of Rent or other sums shall bear interest from the
date due at the Overdue Rate;
(vii) With respect to any Site(s) located in the State of
California, maintain Tenant's right to possession, in which case
this Lease shall continue in full force and effect whether or not
Tenant shall have abandoned the Premises. In such event Landlord
shall be entitled to enforce all of Landlord's rights and
remedies under this Lease, including the right to recover the
Rent as may become due hereunder, for which purposes Landlord may
exercise the remedy described in California Civil Code section
1951.4 (lessee may continue lease in effect after lessee's breach
and
74
abandonment and recover rent as it becomes due, if lessee has the
right to sublet or assign, subject only to reasonable
limitations);
(viii) With respect to any Site(s) located in the State of
California, seek specific performance by Tenant, in the case of
breach by Tenant of one or more of its covenants herein, below;
(ix) With respect to any Site(s) located in the State of
California, exercise the remedy described in California Civil
Code section 1954 (and for such purposes, Tenant hereby waives
any rights or benefits that may be available to it under said
California Civil Code section 1954); and/or
(x) With respect to any Site(s) located in the State of
California, pursue every and any other remedy or right now or
hereafter available to Landlord under the laws or judicial
decisions of the State of California."
(vii) The following is added to paragraph 23(c)(i) of this Lease,
following the phrase "rules and regulations" and before the phrase "shall not
adversely affect the structural elements":
", including, to the extent applicable, California Civil Code
Section 3110.5, and shall otherwise comply with paragraph 12
hereof"
(viii) The following is added to the definition of "Environmental
Laws" in paragraph 26(b) of this Lease:
"to the extent applicable, (i) the Xxxxxx-Cologne Water Quality
Control Act (California Water Code Section 13000, et seq.), (ii)
the California Hazardous Waste Control Law (Division 20, Chapter
6.5 of the California Health and Safety Code), (iii) The
Xxxxxxxxx-Xxxxxxx-Xxxxxx Hazardous Substance Account Act
(California Health and Safety Code Section 25300 et seq.), (iv)
Division 20, Chapter 6.95 (Hazardous Materials Release Response
Plans and Inventory) of the California Health and Safety Code,
(v) the Safe Drinking Water and Toxic Enforcement Act of 1986
(California Health and Safety Code Section 25249.5 et seq.), (vi)
the Resource Conservation and Recovery Act (42 U.S.C. Section
6901 et seq.), (vii) the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601 et seq.),
and (viii) the Hazardous Materials Transportation Act (49 U.S.C.
Section 1801 et seq.)"
75
(c) The following provisions shall apply with respect to the Site(s)
located in the State of Florida:
(i) The following language is added at the end of paragraph 6(c) of
this Lease:
"Without limiting the foregoing, Tenant shall pay to Landlord any
sales, excise and other tax (excluding however, Landlord's income
taxes) levied, imposed or assessed by the State of Florida or any
political subdivision thereof or other taxing authority upon any
rent payable hereunder, including Fixed Rent or Additional Rent."
(ii) The following language is hereby added at the end of paragraph
16(a) of this Lease:
"(vi) Landlord shall have all remedies available under Florida
law including the following:
(a) Landlord shall have the right to recover the Premises and
repossess the Premises by any lawful means without
terminating this Lease.
(b) Landlord shall have the right at any time to give a written
termination notice to Tenant and, on the date specified in
such notice, Tenant's right to possession shall terminate
and this Lease shall terminate. Upon such termination,
Landlord shall have the right to recover from Tenant all
unpaid Rent and other charges due under this Lease which had
been earned at the time of termination.
(c) In addition and without limiting the foregoing, Landlord
shall have the right to accelerate and declare immediately
due and payable all rents and other charges to be paid by
Tenant hereunder. Acts of maintenance or preservation or
efforts to relent the Premises or the appointment of a
receiver upon initiative of Landlord to protect Landlord's
interest under this Lease shall not constitute a termination
of this Lease unless written notice of such termination is
given by Landlord to Tenant."
(iii) The following language is substituted for the first sentence of
paragraph 21(b) of this Lease:
"Landlord's interest in the Premises shall not be subject to
liens for improvements made by Tenant, and Tenant shall have no
power or authority to create any lien or permit any lien to
attach to the Premises or to the present estate, reversion or
other estate of Landlord in the Premises herein demised or on the
Improvements or the Property or other improvements thereon as a
result of
76
improvements made by Tenant or for any other cause or reason. All
materialmen, contractors, artisans, mechanics and laborers and
other persons contracting with Tenant with respect to the
Premises or any part hereof, or any such party who may avail
himself of any lien against realty (whether same shall proceed in
law or in equity), are hereby charged with notice that such liens
are expressly prohibited and that they must look solely to Tenant
to secure payment for any work done or material furnished for
improvements by Tenant or for any other purpose during the Term
of this Lease. Tenant shall indemnify Landlord again any loss or
expenses incurred as a result of the assertion of any such lien."
(iv) The following provision is added at the end of paragraph 28 of
this Lease:
"(r) Wherever this Lease requires Tenant to pay any of landlord's
legal or attorney fees, such fees shall include any and all
reasonable legal fees and expenses of Landlord, including any and
all such fees and expenses incurred in connection with
litigation, mediation, arbitration, other alternative dispute
processes, administrative proceedings and bankruptcy proceedings,
and any and all appeals from any of the foregoing."
"(s) As required by Section 404.056, Florida Statutes, Landlord
notes the following disclosure:
RADON GAS: Radon is a naturally occurring radioactive gas that,
when it has accumulated in a building in sufficient quantities
may present health risks to persons who are exposed to it over
time. Levels of radon that exceed federal and state guidelines
have been found in buildings in Florida. Additional information
regarding radon and radon testing may be obtained from your
county health department."
"(t) ENERGY: Tenant may have the energy efficiency rating of any
building determined. A copy of the State brochure is attached as
Exhibit X."
(v) The following language is substituted for the first sentence of
paragraph 21(b) of the Lease:
"Landlord's interest in the Premises shall not be subject to
liens for improvements made by Tenant, and Tenant shall have no
power or authority to create any lien or permit any lien to
attach to the Premises or to the present estate, reversion or
other estate of Landlord in the Premises herein demised or on the
Improvements or the Property or other improvements thereon as a
result of improvements made by Tenant or for any other cause or
reason. All materialmen, contractors, artisans, mechanics and
laborers and
77
other persons contracting with Tenant with respect to the
Premises or any part hereof, or any such party who may avail
himself of any lien against realty (whether same shall proceed in
law or in equity), are hereby charged with notice that such liens
are expressly prohibited and that they must look solely to Tenant
to secure payment for any work done or material furnished for
improvements by Tenant or for any other purpose during the Term
of this Lease. Tenant shall indemnify Landlord again any loss or
expenses incurred as a result of the assertion of any such lien."
(d) The following provisions shall apply with respect to the Site(s)
located in the State of Indiana:
(i) Where any provision of this Lease is inconsistent with any
provision of Indiana statutory or case law that may not be waived ("Applicable
Law"), the provisions of Applicable Law shall take precedence over the
provisions of this Lease, but shall not invalidate or render unenforceable any
other provisions of this Lease that can be construed in a manner consistent with
Applicable Law. Should Applicable Law confer any rights or impose any duties
inconsistent with or in addition to any of the provisions of this Lease, the
affected provisions of this Lease shall be considered amended to conform to such
Applicable Law, but all other provisions hereof shall remain in full force and
effect without modification.
(ii) To the extent that Applicable Law limits (i) the availability of
the exercise of any of the remedies set forth in this Lease, and the right of
Landlord to exercise self-help in connection with the enforcement of the terms
of this Lease, or (ii) the enforcement of waivers and indemnities made by
Tenant, such remedies, waivers, or indemnities shall be exercisable or
enforceable, any provisions in this Lease to the contrary notwithstanding, if,
and to the extent, permitted by Applicable Law in force at the time of the
exercise of such remedies or the enforcement of such waivers or indemnities
without regard to the enforceability of such remedies, waivers or indemnities at
the time of the execution and delivery of this Lease.
(iii) The following language is added at the end of paragraph 16(a) of
this Lease:
"(vi) With respect to any Site located in the State of Indiana,
Tenant covenants and agrees with Landlord that if Landlord, upon
an Event of Default by Tenant, elects to file a suit to enforce
this Lease and protect Landlord's rights thereunder, Landlord may
in such suit apply to any court having jurisdiction, for the
appointment of a receiver of the Premises and Tenant hereby
consents to such appointment, and thereupon it is expressly
covenanted and agreed that the court shall, without notice
forthwith, appoint a receiver with the usual powers and duties of
receivers in like cases pursuant to Ind. Code 32-30-5, and such
appointment shall be made by such court as a matter of strict
right to Landlord and without reference to the adequacy or
inadequacy of the value of the Premises that is subject this
Lease, or to the solvency or insolvency of Tenant, and without
reference to the commission of waste."
78
(iv) Tenant waives, to the fullest extent permitted by Applicable Law,
any notice to quit as a condition precedent to Landlord's remedies under
paragraph 16 of this Lease, for and on behalf of itself and all persons claiming
through or under Tenant, and Tenant, further waives any and all right of
redemption or re-entry or repossession in case Tenant shall be dispossessed by a
judgment or by warrant of any court or judge, or in case of re-entry or
repossession by Landlord or in case of any expiration or termination of this
Lease.
(v) Environmental Laws, as defined in this Lease, includes, to the
extent applicable, all of the Environmental Management Laws, as defined in Ind.
Code 13-11-2-71.
(vi) Tenant hereby waives, to the fullest extent permitted by
Applicable Law, relief from valuation and appraisement laws and Tenant covenants
and agrees that any judgment obtained by Landlord against Tenant may be executed
in the State without relief from such valuation and appraisement laws.
(vii) To the fullest extent permitted by Applicable Law, Tenant hereby
waives and surrenders, for itself and all those claiming under it, including
creditors of all kinds, (i) any right and privilege which it or any of them may
have under any present or future Applicable Law to redeem any of the Premises or
to have a continuance of this Lease after termination of this Lease or of
Tenant's right of occupancy or possession pursuant to any court order or any
provision hereof, and (ii) the benefits of any present or future Applicable Law
which exempts property from liability for debt or for distress for rents.
(viii) Landlord and Tenant agree to execute and record a memorandum of
lease satisfying the requirements of Ind. Code 36-2-11-20, in the office of the
County Recorder in which the Premises is located.
(e) The following provisions shall apply with respect to the Site(s)
located in the State of Michigan:
(i) the words "single business tax" are hereby inserted between the
phrases "gross receipts tax" and "excise tax" in paragraph 6(b)(iii).
(ii) The following language is added to the definition of
Environmental Laws in paragraph 26(b), immediately following the phrase "the
Federal Insecticide, Fungicide and Rodenticide Act, as amended, 7 U.S.C.
Sections 136, et seq.":
"the State of Michigan Natural Resources and Environmental
Protection Act, MCL 324.101 et seq., and any rules and
regulations promulgated thereunder,"
(iii) The following language is added to the definition of Hazardous
Materials in paragraph 26(b), immediately following the phrase "the Resource,
Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6901, et seq.":
"the State of Michigan Natural Resources and Environmental
Protection Act, MCL 324.101 et seq., and any rules and
regulations promulgated thereunder,"
79
(f) The following provisions shall apply with respect to the Site(s)
located in the State of Nevada:
(i) The following language is added to paragraph 15 of this Lease:
"All time periods set forth in this paragraph 15 shall run
concurrently with any and all applicable statutory time periods."
(ii) The following language is added to paragraph 21 of this Lease:
"Tenant shall not commence any permitted work of improvement
within the Site that is reasonably expected to cost more than
$50,000 without having first given Landlord prior written notice
at least three (3) days prior to the commencement of work to
enable Landlord to record a Notice of Nonresponsibility pursuant
to Section 108.234 of the Nevada Revised Statutes ("NRS"). Such
notification of the commencement of work shall not be deemed
given until actually received by Landlord."
(iii) The following is added to the definition of "Environmental Laws"
in paragraph 26 of this Lease:
"The applicable provisions of NRS Chapters 444, 445A, 445B, 445C.
459, 477, 590 and 618; and the Uniform Fire Code (1988 Edition),
each as hereafter amended from time to time, and the present and
future rules, regulations and guidance documents promulgated
under any of the foregoing."
(g) The following provisions shall apply with respect to the Site(s)
located in the State of New Jersey:
(i) The following shall supplement and, to the extent of any
inconsistency, specifically amends paragraph 26 of this Lease:
"(a) For purposes of this Lease, Environmental Laws shall
include, but not be limited to, the New Jersey Industrial Site
Remediation Act (N.J.S.A. 13:1K-6 et seq.) ("ISRA"). Tenant shall
not generate, store, manufacture, refine, transport, treat,
dispose of, or otherwise permit to be present on or about the
Premises any "hazardous chemical," "hazardous substance" or
similar material or substance as defined in any Environmental
Laws or in any rules or regulations promulgated thereunder, or in
any other applicable federal, state or local law, rule or
regulation dealing with environmental protection (other than in
connection with the operation, business and maintenance of the
Premises and in commercially reasonable quantities in compliance
with Environmental Laws). Tenant represents to Landlord that it
does not and shall not conduct any activity in the Premises
located in New Jersey which shall cause it to be considered an
"industrial
80
establishment" under ISRA, or otherwise subject the Premises to
the requirements of compliance with ISRA and Tenant does not and
shall not conduct any operations that shall subject the Premises
located in New Jersey to ISRA.
(b) If at any time during the Term or any Extension Term,
the Premises shall be determined to be an industrial
establishment under ISRA, Tenant shall comply with the provisions
of ISRA, or other similar applicable laws, prior to its
termination of any activities in the Premises or the expiration
of the Term of this Lease, or the occurrence of a "triggering
event" under ISRA, whichever is earlier.
(c) If in connection with a sale, transfer, or mortgage of
the Premises permitted in accordance with the terms of this
Lease, by Landlord or other transaction by Landlord where
Landlord is required to comply with ISRA, Tenant will cooperate
with Landlord and provide any information reasonably requested by
Landlord for Landlord to comply with ISRA or to obtain a Letter
of Non-Applicability, at Landlord's sole cost and expense. Tenant
shall execute such documents as Landlord reasonably deems
necessary and make such applications as Landlord reasonably
requires to assure compliance with ISRA; and without limiting the
generality of the foregoing will provide Landlord within ten (10)
business days of Landlord's request for the same, an affidavit in
support of a request for a non-applicability letter by Landlord
in the form required under ISRA. Notwithstanding the foregoing,
that if, at the time that Landlord is required to comply with
ISRA, an Event of Default hereunder has occurred and is
continuing after applicable notice and cure periods, all
reasonable costs and expenses incurred by Landlord to comply with
ISRA shall be the obligation of and recoverable against and from
Tenant.
(d) Tenant shall bear all reasonable costs and expenses
incurred by Landlord associated with any required ISRA compliance
resulting from Tenant's occupancy or use of the Premises,
including state agency fees, engineering fees, cleanup costs,
filing fees, and surety ship expenses. The foregoing undertaking
shall survive the termination or sooner expiration of this Lease
and surrender of the Premises and shall also survive sale, or
lease or assignment of the Premises by Landlord. Tenant shall as
soon as practicable provide Landlord with copies of all written
correspondence, reports, notices, orders, findings, declarations
and other materials pertinent to Tenant's compliance with the
NJDEP requirements under ISRA as they are issued or received by
Tenant."
81
(ii) If at any time prior to commencement of the Term or at anytime
during the Term or any Extension Term, the municipality in which a Site is
located requires any permit, approval, license or certificate for the occupancy,
operation or use of the Premises and/or Tenant's business at the Premises,
Tenant, at Tenant's sole cost and expense, shall obtain such permit, approval,
license or certificate before any fine, penalty or right of the municipality to
legally preclude the use and occupancy of the applicable Premises attaches and
is effective, even if the applicable law, statute, ordinance, rule or regulation
provides that the obligation to obtain such permit, approval, license or
certificate is that of the property owner or landlord, including Landlord. In no
event shall the failure of Tenant to obtain or the failure of the municipality
to issue any required permit, approval, license or certificate nor the
imposition of any fine or penalty or the legal closure of the Premise for use
and occupancy by the municipality relieve Tenant from its obligation to pay Rent
or otherwise perform its obligations under this Lease. Tenant shall indemnify,
defend, save and hold harmless Landlord of, from and against any and all
liability, cost (including any and all attorneys' fees, costs and expenses),
damages, expenses, suits or other legal actions or proceedings suffered,
incurred by or imposed upon Landlord as a result of the failure of Tenant to
obtain such permits, approvals, licenses or certificates or the failure of the
municipality to issue any required permit, approval, license or certificate.
(iii) Paragraph 21(a) of this Lease is deleted and replaced with the
following:
"(a) Except for liens created through the act of Landlord,
Tenant shall not suffer or permit any construction lien, notice
of construction lien, or other lien to be filed or recorded
against the Premises, equipment or material supplied or claimed
to have been supplied to the Premises at the request of Tenant,
or anyone holding the Premises, or any portion thereof, through
or under Tenant. If any such construction lien, notice of
construction lien or other lien shall at any time be filed or
recorded against the Premises, or any portion thereof, Tenant
shall cause the same to be discharged of record or bonded over
within thirty (30) calendar days after the date of filing or
recording of the same."
(h) The following provisions shall apply with respect to any Site(s)
located in the State of Ohio:
(i) With respect to any agreement by Tenant in this Lease to pay
Landlord's attorneys' fees and disbursements incurred in connection with the
enforcement therewith, Tenant agrees that this Lease is a "contract of
indebtedness" and that the attorneys' fees and disbursements referenced are
those which are a reasonable amount, all as contemplated by Ohio Revised Code
Section 1301.21, as the same may hereafter be amended. Tenant further agrees
that the indebtedness incurred in connection with this Lease is not incurred for
purposes that are primarily personal, family or household and confirms that the
total amount owed under this Lease exceeds One Hundred Thousand and No/100
Dollars ($100,000.00).
(ii) Prior to commencement of any work or labor at the Premises or the
furnishing of any materials to the Premises, which could result in a lien
against the Premises under Chapter 1311 of the Ohio Revised Code, Tenant shall
cause a timely notice of commencement to be filed in accordance with the
provisions of Section 1311.04 of the Ohio
82
Revised Code and shall therein describe Tenant's interest in the Premises as
limited to Tenant's leasehold estate under this Lease.
(iii) Tenant hereby expressly waives, and Landlord expressly
disclaims, Landlord's duty to mitigate Tenant's damages by re-letting, or
attempting to re-let, any Site in Ohio to any replacement tenant(s) from and
after any Event of Default.
(i) Notwithstanding anything contained in this Lease to the contrary, the
following provisions shall apply with respect to any Site(s) located in the
State of Oregon:
(i) The following language is hereby added to the definition of
Environmental Laws in paragraph 25(b) of this Lease:
"Oregon State Hazardous Waste and Hazardous Materials I-II as
codified at ORS Chapters 465-466."
(j) The following provisions shall apply with respect to any Site(s)
located in the State of Pennsylvania:
(i) The following language is hereby added at the end of paragraph
16(a) of this Lease:
"(vi) At its option, upon notice to Tenant, to take
possession of the Premises and its contents, either directly or
by means of a receiver, without terminating this Lease, and to
operate the Premises directly or by means of a designee in such a
manner as Landlord may deem appropriate under the circumstances,
including as a membership campground, for cabin rentals, pursuant
to Tenant's extended vacation, stay and storage programs, in
connection with lease arrangements entered into with farmers
prior to the date hereof, and for any other lawful purpose which
are both associated with and related thereto;
(vii) To accelerate Rent through the balance of the Term,
provided that Landlord shall refund to Tenant, and Tenant shall
not be liable for, Rent collected by Landlord from any
replacement tenant or tenants at the Premises, after deducting
the expenses incurred in relenting, including real estate
commissions, attorney's fees and the costs of relating; and
(viii) At its option, following the expiration of five (5)
Business Days after Landlord gives written notice thereof to
Tenant, to make such payments, do such work and take such actions
as may be necessary to cure such default, including entry upon
the Premises, and the prosecution or defense of any legal action
which may have been commenced or threatened against Landlord,
Tenant, or the Premises in violation of this Lease; and all sums
so expended by Landlord shall be paid by Tenant upon demand."
83
(ii) The following shall supplement and, to the extent of any
inconsistency, specifically amend paragraph 26 of this Lease:
For purposes of this Lease, Hazardous Materials shall include,
but not be limited to, "hazardous substances" or "contaminants"
as defined pursuant to the Pennsylvania Hazardous Sites Cleanup
Act, Pa. Stat. Xxx. Tit. 35 Sections 6020.101 to 1305 (Xxxxxx
Supp. 1989), or any other substances which may be the subject of
liability pursuant to Sections 316 or 401 of the Pennsylvania
Clean Streams Law, Pa. Stat. Xxx. Tit. 35, Sections 691.1 to
.1001 (Xxxxxx 1977 and Supp. 1989), and asbestos, urea
formaldehyde, polychlorinated biphenyls and petroleum products.
(iii) The following provision is added as new paragraph 21(c) of this
Lease:
Tenant acknowledges that any construction work at the
Premises is not being undertaken at the request of or for the
benefit of Landlord and any mechanic's liens that may be filed
against the Premises shall not affect Landlord's fee interest in
the Premises.
(k) The following provisions shall apply with respect to any Site(s)
located in the State of Texas.
(i) Waiver of Certain Rights. Tenant hereby waives any and all liens
(whether statutory, contractual or constitutional) it may have or acquire as a
result of a breach by Landlord under this Lease. Tenant also waives and releases
any statutory lien and offset rights it may have against Landlord, including the
rights conferred upon Tenant pursuant to Section 91.004 of the Texas Property
Code, or other applicable law.
(ii) NOTICES. TO THE FULLEST EXTENT PERMITTED BY LAW, TENANT WAIVES
ALL NOTICES AND DEMANDS (INCLUDING NOTICE OF BREACH OR DEFAULT, NOTICE OF
NON-PAYMENT OR NON-PERFORMANCE, DEMAND FOR PAYMENT OR PERFORMANCE, DEMAND FOR
POSSESSION, NOTICE OF ANY CHANGE IN LOCKS OR ACCESS CONTROL DEVICES, REENTRY, OR
REPOSSESSION, AND NOTICE TO VACATE), EXCEPT FOR THOSE NOTICES AND DEMANDS
EXPRESSLY REQUIRED IN THIS LEASE.
(iii) DTPA. AFTER CONSULTING WITH AN ATTORNEY OF TENANT'S OWN
SELECTION, TENANT VOLUNTARILY WAIVES ITS RIGHTS AGAINST LANDLORD PARTIES UNDER
THE DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT, SECTION 17.41 ET SEQ.,
TEXAS BUSINESS & COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND
PROTECTIONS. TENANT REPRESENTS AND WARRANTS THAT ITS ATTORNEY WAS NOT, DIRECTLY
OR INDIRECTLY, IDENTIFIED, SUGGESTED, OR SELECTED BY ANY LANDLORD PARTY.
84
(l) The following provisions shall apply with respect to any Site(s)
located in the State of Virginia:
(i) The following provision is added at the end of paragraph 2(a) of
this Lease:
"With respect to the sixty-two lots located at the Site commonly
known as Virginia Landing subject to the association known as the
Oceanside Conservation Co., Inc., Landlord grants to Tenant a
temporary license to exercise all of Landlord's rights with
respect to the association known as the Oceanside Conservation
Co., Inc., including, but not limited to, voting rights in such
association. All costs and expenses, if any, associated with
Landlord's grant of said temporary license shall be paid by
Tenant."
(m) The following provisions shall apply with respect to any Site(s)
located in the State of Washington:
(i) The following language is added as new paragraph 11(g) of this
Lease:
"Solely for the purpose of effectuating Tenant's indemnification
obligations under this Lease, and not for the benefit of any
third parties (including employees of Tenant), Tenant
specifically and expressly waives any immunity that may be
granted it under the Washington State Industrial Insurance Act,
Title 51 RCW. Furthermore, the indemnification obligations under
this Lease shall not be limited in any way by any limitation on
the amount or type of damages, compensation or benefits payable
to or for any third party under Worker Compensation Acts,
Disability Benefit Acts or other employee benefit acts. The
parties acknowledge that the foregoing provisions of this
paragraph have been specifically and mutually negotiated between
the parties."
(ii) The following language is added at the end of paragraph 16(a)(i)
of this Lease:
"Should Landlord have reentered the Premises under the provisions
of this paragraph 16, Landlord shall not be deemed to have
terminated this Lease, or the liability of Tenant to pay the Rent
thereafter accruing, or to have terminated Tenant's liability for
damages under any of the provisions of this Lease, by any such
reentry or by any action, in unlawful detainer or otherwise, to
obtain possession of the Premises, unless Landlord shall have
notified Tenant in writing that Landlord had elected to terminate
this Lease. Tenant further covenants that the service by Landlord
of any notice pursuant to the unlawful detainer statutes of the
State of Washington and the surrender of possession pursuant to
such notice shall not (unless Landlord elects to the contrary at
the time
85
of or at any time subsequent to the serving of such notices and
such election is evidenced by a written notice to Tenant) be
deemed to be a termination of this Lease."
(iii) The following language is added after the end of paragraph 21(b)
of this Lease:
"Tenant shall have no right or authority to cause or allow the
Premises or Landlord's estate or interest therein or in and to
this Lease to be subjected to any such lien."
(iv) The following language is added to the definition of
"Environmental Laws" in paragraph 26(b) of this Lease:
"... the State of Washington Model Toxics Control Act, codified
at Chapter 70.105D, RCW; ..."
(n) The following provisions shall apply with respect to the Site located
in the Province of British Columbia, Canada:
(i) the word ", provincial" is added after the word "state" in the
third line of the definition of "After-Tax Basis" in paragraph 1 of this Lease;
(ii) the phrase "or the province of British Columbia" is added after
the phrase "State of Illinois" in the second line of the definition of "Business
Days" in paragraph 1 of this Lease and the phrase "or province" is added after
the word "state" in the third line of such definition;
(iii) the following paragraphs are added to the definition of
"Permitted Encumbrances" in paragraph 1 of this Lease:
"(g) statutory liens incurred in the ordinary course of business
in connection with workers compensation, employment insurance and
similar Legal Requirements;
(h) any discrepancies or encroachments that an up-to-date survey
of the Site might reveal; and
(i) the subsisting conditions, provisos, restrictions, exceptions
and reservations, including royalties, contained in the original
grant or contained in any other grant or disposition from the
crown.";
(iv) the word "provincial," is added after the word "state," in the
third line of paragraph (a) of the definition of "Permitted Encumbrances" in
paragraph 1 of this Lease;
(v) the phrase "or charges" is added after the word "taxes" in the
first line of paragraph (d) of the definition of "Permitted Encumbrances" in
paragraph 1 of this Lease and the word "provincial," is added after the word
"state," in the first line of such paragraph;
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(vi) the word "and" at the end of paragraph (e) of the definition of
"Permitted Encumbrances" is deleted;
(vii) the "." at the end of paragraph (f) of the definition of
"Permitted Encumbrances" is replaced with ";";
(viii) the phrase ", goods and services tax" is added after the phrase
"gross receipts tax" in the twenty-second line of paragraph 6(b) of this Lease;
(ix) the phrase "or other applicable governmental authority" is added
after the phrase "Director of the Federal Emergency Management Agency" in the
thirteenth line of sub-paragraph 11(c)(i) of this Lease;
(x) the phrase "or province" is added after the word "state" in the
second line of subparagraph 11(c)(v) of this Lease;
(xi) the word "provincial," is added after the word "state," in the
fifth line of paragraph 12(a) of this Lease;
(xii) the phrase "or provincial" is added after the word "state" in
the sixth line of subparagraph 16(a)(ii)(B) of this Lease;
(xiii) the following paragraph is added as new paragraph 21(c) of this
Lease:
"Tenant acknowledges that Landlord has or will file a notice
pursuant to the Builders' Lien Act (British Columbia) against
title to the Site located in British Columbia in order to give
effect to the provisions of paragraph 21(b) of this Lease.";
(xiv) the phrase "or province" is added after the word "county" in the
fourth line of paragraph 25(c) of this Lease;
(xv) the phrase "financing statement under the Personal Property
Security Act (British Columbia) ("PPSA")" is added after the phrase "UCC
financing statement" in the fifth line of paragraph 25(c) of this Lease;
(xvi) the definitions of "Environmental Laws" and "Hazardous
Materials" in paragraph 26(b) are deleted and replaced by the following:
"Environmental Laws" means all applicable federal, provincial and
local environmental laws, ordinances, rules, regulations, orders,
bylaws, standards, guidelines, permits, and other lawful
requirements, as any of the foregoing may have been or may be
from time to time amended, supplemented or supplanted and any
other federal, provincial or local laws, ordinances, rules,
regulations, orders, bylaws, standards, guidelines, permits and
other lawful requirements now or hereafter existing relating to
regulation or control of Hazardous Materials or materials. The
term "Hazardous Materials" as used in this Lease shall mean
hazardous substances,
87
hazardous materials, hazardous wastes, toxic substances,
radioactive materials, asbestos, urea formaldehyde, pollutants,
contaminants, deleterious substances, dangerous substances or
goods, hazardous, corrosive, or toxic substances, special waste
or wastes, PCBs, methane, volatile hydrocarbons, petroleum or
petroleum derived substances or wastes, radon, industrial
solvents or any other material or substances the storage,
manufacture, disposal, treatment, generation, use, transport,
remediation or release into the environment of which is now or
hereafter regulated, controlled or prohibited under Environmental
Laws.";
(xvii) the phrase "or province" is added after the word "state" in the
fourth line of paragraph 27(d) of this Lease;
(xviii) the phrase "or province" is added after the word "state" in
the second line of paragraph 28(g) of this Lease;
(xix) the phrase "or PPSA" is added after the phrase "the UCC" in the
tenth line of paragraph 31(g) of this Lease; and
(xx) the phrase "or PPSA" is added after the phrase "the UCC" in the
last line of paragraph 31(k) of this Lease.
42. ADDITIONAL REPRESENTATION AND WARRANTY
Tenant represents and warrants as follows: Schedule 1 sets forth, as of the
date hereof: (i) the authorized number of securities of each class of securities
of PA and the parent of PA and (ii) the number of securities of each class of
securities of PA and the parent of PA issued to and outstanding as of the date
of this Agreement. All such securities are held of record by the securityholders
as set forth on Schedule 1 and no other Person is the record or beneficial owner
of any securities of PA or the parent of PA as of the date hereof. As of the
date hereof, there are no dividends declared or dividends or other payments
accrued, but not paid, in respect of any of the securities of PA or the parent
of PA. There are no options, warrants, calls, rights, commitments or agreements
of any character, written or oral, to which PA or the parent of PA is a party or
by which PA or the parent of PA is bound obligating PA or the parent of PA to
issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered,
sold, repurchased or redeemed, any securities of PA or the parent of PA or
obligating PA or the parent of PA to grant, extend, accelerate the vesting of,
change the price of, otherwise amend or enter into any such option, warrant,
call, right, commitment or agreement. There are no outstanding or authorized
stock appreciation, phantom stock, profit participation, or other similar
equity-related rights with respect to PA or the parent of PA. There are no
voting trusts, proxies or other agreements or understandings to which any PA or
the parent of PA is a party with respect to the voting stock of PA or the parent
of PA.
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43. RESTATEMENT
This Lease is a restated and amended version of the Original Lease, between
the parties hereto and all changes to such Lease are effective as of the
Effective Date of Restatement. Any disputes related to this Lease, arising, in
whole or in part, after the Effective Date of Restatement shall be governed by
this Lease, as so restated and amended.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have hereunto set their hands under seal on
the day and year first above written.
LANDLORD:
WITNESS: MHC TT LEASING COMPANY, INC.,
a Delaware corporation
By: /s/ Xxxxxxxxxx Xxxxx
------------------------------------- ------------------------------------
Name: Name: Xxxxxxxxxx Xxxxx
------------------------------- ----------------------------------
Title: Vice President
---------------------------------
-------------------------------------
Name:
-------------------------------
TENANT:
THOUSAND TRAILS OPERATIONS HOLDING
COMPANY, L.P.,
a Delaware limited partnership
WITNESS:
------------------------------------- By: KTTI GP, LLC
Name: Its: General Partner
-------------------------------
By: /s/ Xxx XxXxxxx
------------------------------------- ------------------------------------
Name: Name: Xxx XxXxxxx
------------------------------- Its: Authorized Signatory
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Solely with respect to paragraphs 38(f) and 38(g) of this Lease, Guarantors
hereby acknowledge, agree with and consent to the terms and provisions contained
in paragraphs 38(f) and 38(g) of this Lease
KTTI GP, LLC,
WITNESS: a Delaware limited liability company
------------------------------------- By:
Name: ------------------------------------
------------------------------- Name: Xxx XxXxxxx
Title: Authorized Signatory
-------------------------------------
Name:
-------------------------------
KTTI HOLDING COMPANY, LLC,
WITNESS: a Delaware limited liability company
------------------------------------- By:
Name: ------------------------------------
-------------------------------- Name: Xxx XxXxxxx
Title: Authorized Signatory
-------------------------------------
Name:
-------------------------------
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