Exhibit 10.1
LEASE AGREEMENT
THIS LEASE AGREEMENT made and entered into as of January 1, 2001, by
and between Old Baldy Corporation, a Wyoming corporation, having its principal
place of business at Saratoga, Wyoming, ("Lessor"), and Old Baldy Club, a
Wyoming corporation, having its principal office in Saratoga, Wyoming
("Lessee");
W I T N E S S E T H:
ARTICLE I.
Definitions
For the purposes of this agreement:
Section 1.1. "Buildings" shall mean all buildings, supports,
foundations, structures, landscaping, pools, sidewalks, curbs, driveways,
vaults, bridges, tunnels and fixtures now or hereafter located upon the Property
from time to time, together with all apparatus and equipment necessary for the
complete and comfortable use, occupancy, enjoyment and operation of any such
building or buildings at any time on the Property (including, without limiting
the generality of the foregoing, all fittings, appliances, machinery, garage
equipment, heating, lighting, cooling, air conditioning and ventilating
equipment, wiring, controls, communications equipment, plumbing, switchboards,
antennae, elevators, escalators, floor coverings, furnishings, refrigerating,
hot water heating and all other appliances and equipment) excepting only in each
case articles of such personal property and trade fixtures as may be owned by
subtenants or others which can be removed without defacing or materially
injuring the Buildings.
Section 1.2. "Events of Default" or any of the same shall mean
Events of Default as defined and described in Section 21.1.
Section 1.3. "Impositions" shall mean "Impositions" as defined in
Section 4.1.
Section 1.4. "Leased Premises" shall mean the Property as defined in
Section 1.7 including the Buildings as defined in Section 1.1, collectively. Any
reference to "Leased Premises or any part thereof" shall include, without
limitation, all or any part of the Property, all or any part of the Buildings
and all or any part of the Property and Buildings together.
Section 1.5. "Leasehold Estate" shall mean Lessee's interest in the
Leased premises created by this Lease.
Section 1.6. "Person" shall mean and include an individual,
corporation, partnership, joint venture, trust, unincorporated association and
any governmental entity.
Section 1.7. "Property" shall mean the parcel of real property
referred to in Section 2.1 and described on Exhibit "A" attached hereto
including any Buildings and other improvements now existing or hereafter
constructed thereon.
ARTICLE II.
Demise and Term
Section 2.1. Lessor, for and in consideration of the rents hereafter
reserved by Lessor and of the covenants and agreements hereinafter contained to
be well and truly kept and performed by Lessee, hereby leases, lets and demises
to Lessee, and Lessee does hereby take, hire and lease from Lessor, all that
certain parcel of real property described in Exhibit "A" attached hereto and
made a part hereof, SUBJECT, however, to all agreements, present and future
building restrictions and regulations, zoning laws, easements, mortgages,
encumbrances, and all other liens, charges, other matters or rights appurtenant
to or affecting the above described real property.
Section 2.2. TO HAVE AND TO HOLD the Property, for a term commencing
on the date hereof and terminating the 31st day of December, 2030, (hereinafter
sometimes called the "Lease Term" or the "term of this Lease") unless sooner
terminated or extended as herein provided.
Section 2.3. Upon the expiration or termination of this Lease,
except upon the repurchase of the land as hereinafter provided, all Buildings
shall be vacated and surrendered by Lessee to Lessor, and Lessee agrees to
execute and deliver to Lessor such deeds, assignments or other instruments of
conveyance as Lessor may deem necessary to evidence such transfer of title to
lessor. For the purpose of carrying out the provision of this Section, Lessee
hereby irrevocably constitutes and appoints Lessor its true and lawful attorney
in fact with full power of substitution, to execute, acknowledge and deliver any
instruments referred to in this Section in the name and on behalf of Lessee upon
expiration or termination of this Lease. The power vested in such attorney in
fact is, and shall be deemed to be, coupled with an interest and cannot be
revoked.
Section 2.4. This Lease is made upon the foregoing and the following
covenants and conditions, each of which Lessee agrees to perform irrespective of
whether the particular provision is in form of a covenant, an agreement, a
condition or a direction; and Lessee agrees to provide Lessor with such
documents of further assurance as may be required to carry out the intention of
the parties as herein expressed.
ARTICLE III.
Rent and Reporting
Section 3.1. Beginning with the second month Lessee convenants and
agrees to pay to Lessor during the term of this Lease an annual rental of one
hundred & no/100 Dollars ($100.00). Such rental (sometimes hereinafter called
the "rent") shall be paid on or before December 31 of each year, commencing
December 31, 2000.
Section 3.2. The rent payable by Lessee to Lessor hereunder shall be
payable to Lessor under Article XXVII hereof, or such other place as Lessor
shall have given Lessee written notice at least thirty (30) days in advance.
Section 3.3. It is the purpose and intent of Lessor and Lessee that
the rent shall be net to the Lessor, so that this Lease shall yield, net, to
Lessor, the rent specified in Section 3.1
2
hereof in each year during the term of this Lease and that all costs, taxes,
assessments, and charges of every kind and nature relating to the Leased
Premises which may arise out of or become due during the term of this Lease
shall be paid by Lessee, and that Lessor shall be indemnified and saved harmless
by Lessee from and against the same. It is further understood and agreed that
the payment by Lessee of rent shall not be deemed to constitute Lessor as a
partner or an associate in business with, or responsible in any way for the
business of, Lessee. The parties hereto further agree that they are not partners
or joint ventures and that, except in respect to the proceeds of insurance and
condemnation awards as provided herein, they do not stand in any fiduciary
relationship one to the other.
Section 3.4. Lessee will pay and (except as may be otherwise
expressly provided in this Lease) without notice, abatement, deduction or
setoff, all sums, impositions (as defined in Article IV hereof), costs,
expenses, and other payments which Lessee in any of the provisions of this Lease
assumes or agrees to pay, and in the event of any non-payment thereof, Lessor
shall have (in addition to all other rights and remedies) all the rights and
remedies provided for herein or by law in the case of non-payment of rent.
Section 3.5. In addition to the rental provided in Section 3.1 above
and the other provisions of this Lease, and as additional rental hereunder, the
Lessor, including its designees, shall have the non-exclusive right to permit up
to 240 of Lessor's designees use the Leased Premises during the period from June
1 through September 30 of each calendar year during the term of this Lease. This
right of use shall include the right to occupy and use the buildings, the dining
and bar facilities, the golf course and pro shop, the swimming pool, tennis
courts, fishing areas and such other facilities on the same terms as are made
available to members of Lessee. In the event that the aggregate amount which
would have been charged to the Lessor and its designees had the Lessor and its
designees been members of the Lessee for use of the Leased Premises by Lessor
and its designees exceed $325,000 during any calendar year, such excess shall be
paid by Lessor to Lessee on or before December 31 of the calendar year in which
such excess charges occurred.
In connection with its rights to use the Leased Premises as provided
in this Section 3.5, the Lessor and its designees shall observe and be bound by
the policies and procedures from time to time established by the Lessee for its
members including, without limitation, dress codes, standards of conduct and
reservation policies.
ARTICLE IV.
Payment of Impositions
Section 4.1. Through the term of this Lease, Lessee shall pay
(except as hereinafter in Section 4.3 hereof provided), as and when the same
become due, before any fine, penalty, interest or cost may be added thereto, or
become due or be imposed by operation of law for the non-payment thereof, all
taxes, assessments, water and sewer charges, charges for public utilities,
excises, levies, license and permit fees and other governmental charges, of any
kind and nature whatsoever which at any time prior to or during the term of this
Lease may become a lien on (i) the Leased Premises or any part thereof or any
appurtenances thereto or personal property therein; (ii) the rent, income or
other payments received by Lessee or anyone claiming by, through or under
Lessee; (iii) any use or occupation of the Leased Premises thereon or personal
3
property therein; (iv) such franchises as may be appurtenant to the use of the
Leased Premises or personal property therein; and (v) this transaction, or any
document to which Lessee is a party, creating or transferring an interest or
estate in the Leased Premises or any part thereof, or personal property therein
(all such taxes, assessments, water and sewer rents, transit taxes, rates and
charges, charges for public utilities, excises, levies, license fees and other
governmental charges being hereinafter referred to as "Impositions", and any of
the same being hereinafter referred to as an "Imposition"); provided, however,
that:
(a) If, by law, any Imposition may at the option of the
taxpayer be paid in installments (whether or not interest shall accrue on the
unpaid balance of such Imposition) Lessee may exercise the option to pay the
same (and any accrued interest on the unpaid balance of such Imposition) in
installments and, in such event, shall pay such installments as the same 'become
due during the term of this Lease and before and fine, penalty, further interest
or cost may be added thereto; provided, however, that the amount of all
installments of any such Imposition, which are to become due and payable after
the expiration of the term of this Lease, shall be paid on or before the date
which shall be one (1) year immediately prior to the date of such expiration or
on such later date if such Imposition is levied thereafter; and
(b) Any Imposition, other than Impositions which have been
converted into installment payments by Lessee pursuant to subparagraph 4.1(a),
relating to a fiscal period of the taxing authority, a part of which period is
included within the term of this Lease and a part of which is included in a
period of time after the expiration of this Lease, shall (whether or not such
Imposition shall become payable during the term of this Lease) be adjusted
between Lessor and Lessee as of that portion of such Imposition which that part
of such fiscal period included in the period of time before the expiration of
this Lease bears to such fiscal period, and Lessor shall pay the remainder
thereof; provided, however, that if Lessee shall be in default in the
performance of any of Lessee's covenants, agreements and undertakings in this
Lease provided, then to the extent of the amount of any such default Lessee
shall not be entitled to receive an apportionment.
Section 4.2. Lessee shall pay all such Impositions directly to the
appropriate taxing authority, and shall furnish to Lessor, not later than ten
(10) days prior to the date when any Imposition would become delinquent,
official receipts of the appropriate taxing authority, or other evidence
satisfactory to Lessor, evidencing the payment thereof.
Section 4.3. Lessee at its own cost and expense shall have the right
to contest the amount or validity, in whole or in part, of any Imposition by
appropriate proceedings diligently conducted in good faith but only after
payment of such Imposition unless such payment would operate as a bar to such
contest or interfere materially with the prosecution thereof, in which event,
notwithstanding the provisions of Section 4.1 Lessee may postpone or defer
payment of such Imposition if:
(a) Neither the Leased Premises nor any part thereof, nor
personal property therein would by reason of such postponement or deferment be
in danger of being forfeited or lost; and
4
(b) Lessee shall have deposited with a bank or trust company
acceptable to Lessor the amount so contested and unpaid, together with all
interest and penalties in connection therewith and all charges that may or might
be assessed against or become a charge on the Leased Premises or any part
thereof in such proceedings.
Upon the termination of any such proceedings, Lessee shall pay the
amount of such Imposition or part thereof as finally determined in such
proceedings the payment of which may have been deferred during the prosecution
of such proceedings, together with any costs, fees, interest, penalties or other
liabilities in connection therewith. If, at any time during the continuance of
such proceedings, Lessor shall deem the amount deposited as aforesaid
insufficient, Lessee shall, upon demand, make an additional deposit of such sum
as Lessor reasonably may request, and upon failure of Lessee so to do, the
amount theretofore deposited may be applied by Lessor to the payment, removal
and discharge of such Imposition, and the interest and penalties in connection
therewith and any costs, fees or other liability accruing in any such
proceedings, and the balance, if any, shall be returned to Lessee.
Lessor shall have the right to seek a reduction in the valuation of
the Leased Premises, or any part thereof, assessed for tax purposes and to
prosecute any action or proceeding theretofore commenced by Lessee, if such
assessed valuation or valuations shall relate or pertain, in whole or in part,
to any period subsequent to the term of this Lease. To the extent to which any
tax refund payable as a result of any proceeding to review such assessed
valuation which Lessor or Lessee may institute, or payable by reason of
compromise or settlement of any such proceeding, may be based upon a payment
made by anyone other than Lessor and shall not relate or pertain to a period
subject to apportionment between Lessor and Lessee, Lessee shall be authorized
to collect the same, provided, however, that Lessee shall reimburse Lessor
forthwith for all reasonable attorneys' fees, expenses and fees incurred by
Lessor in connection therewith, in the proportion that Lessee's share of the
refund bears to the total refund.
Section 4.4. Lessor shall not be required to join in any proceedings
referred to in Section 4.3 hereof unless the provisions of any applicable law,
rule or regulation shall require that such proceedings be brought by or in the
name of Lessor or any owner of the Leased Premises or any part thereof, in which
event Lessor shall join in such proceedings or permit the same to be brought in
its name. Lessor shall not be subjected to any liability for the payment of any
costs or expenses in connection with any such proceedings; and Lessee will
indemnify and save harmless Lessor from any such costs and expenses. Except as
otherwise provided in this Lease, Lessee shall be entitled to any refund of any
Imposition and penalties or interest thereon received which have been paid by
Lessee.
Section 4.5. The certificate, advice or bill of the appropriate
official designated by law to make or issue the same or to receive payment of
any Imposition or to give notice of nonpayment of such Imposition shall be prima
facie evidence that such Imposition is due and unpaid.
Section 4.6. Lessor appoints Lessee the attorney in fact of Lessor
for the purpose of making all payments to be made by Lessee pursuant to any of
the provisions of this Lease to persons or entities other than Lessor.
5
ARTICLE V.
Insurance
Section 5.1. At all times during the term of this Lease, Lessee
shall, at Lessee's sole cost and expense, but for the mutual benefit of, and
naming as insureds, Lessor and Lessee as their interests may appear and with
mortgage clauses for the benefit of and naming any mortgagee affecting the fee
interest of Lessor or the Leasehold Estate of Lessee (a "Mortgage"), which
mortgage clause shall not be inconsistent with the terms of this Lease, keep and
maintain the following policies of insurance:
(a) Fire and extended coverage insurance on the Buildings,
including protection against loss or damage by other risks now embraced by the
so-called broad extended coverage endorsement, in amounts at all times
sufficient to prevent Lessor or Lessee from becoming a co-insurer under the
terms of the applicable policies, but in any event in an amount not less than
the then full insurable value of the Buildings. The term "full insurable value"
shall mean actual replacement value (exclusive of cost of excavation,
foundations, and footings) without deduction for physical depreciation. Such
"full insurable value" shall be determined from time to time at the request of
Lessor but not more often than once every year. No omission on the part of the
Lessor to request any such determination shall relieve Lessee of any of its
obligations under this Article;
(b) Comprehensive general public liability and property damage
insurance protecting and indemnifying the Lessee and Lessor against any and all
claims for damages to person or property or for loss of life or of property
occurring upon, in, or about the Leased Premises and the adjoining streets and
passageways, such insurance to afford immediate protection, to the limit of not
less than $100,000.00 in respect of bodily injury or death to any one person,
and to the limit of not less than $300,000.00 in respect of any one accident or
occurrence and to the limit of not less than $100,000.00 for property damage
with not more than $100.00 deductible;
(c) Boiler and pressure vessel and miscellaneous equipment
insurance, including pressure pumps, air conditioning systems, electric motors,
air tanks, compressors and pumps, in such amounts as Lessor may reasonably
require;
(d) War risk insurance upon the Buildings when and to the
extent such insurance is obtainable from the United States Government or any
agency or instrumentality thereof, in an amount equal to the lesser of (i) the
maximum amount of insurance obtainable and (ii) the full insurable value
thereof;
(e) Business interruption or rent or use and occupancy or
rental value insurance in an amount at least sufficient to meet the total
payments for one year of the rent provided for in Article III, the Impositions
provided for in Article IV and the debt charges on the Mortgage, which insurance
shall be payable to Lessor, Lessee and the holder of the Mortgage, as their
interests may appear, but which policies shall be delivered to and held by
Lessor or the holder of such Mortgage and, in the event that the Buildings or
any substantial portion thereof, shall be destroyed or seriously damaged, Lessee
shall assign to Lessor the interest of Lessee in such policies and all proceeds
thereunder, shall be held in trust and applied
6
to the payment of any debt charges then due and payable under any Mortgage, and
to the performance by Lessee of all the covenants, agreements, terms and
provisions of this Lease until the repair, restoration or reconstruction of the
Buildings shall be completed as provided for in Article IX hereof; and
(f) Such other insurance on the Buildings in such amounts as
may from time to time be reasonably required by Lessor, against other insurable
hazards, which at the time are commonly insured against in the case of premises
similarly situated, to the extent obtainable.
Section 5.2. All insurance provided for in subsections (a), (b),
(c), (e) and (f) of Section 5.1 hereof, if readily obtainable, shall be effected
under standard form policies issued by insurers of recognized responsibility,
authorized to do business in the State wherein the Leased Premises are located
and which are well rated by national rating organizations and have been approved
in writing by Lessor, which approval shall not be unreasonably withheld.
Any policies of insurance of the character described in subsections
(a), (c), (d) and (f) of Section 5.1 hereof shall expressly provide that any
losses thereunder shall be adjusted with the Lessor, Lessee and the holder of
any Mortgage. All such insurance shall be carried in the name of Lessor and
Lessee; and loss thereunder shall be payable to the holder of any Mortgage,
Lessor and Lessee, as their respective interests may appear.
Section 5.3. Upon request by Lessor and thereafter not less than
thirty (30) days prior to the expiration dates of the expiring policies
theretofore furnished pursuant to this Article, originals or duplicate originals
of the policies, accompanied by evidence satisfactory to Lessor of the payment
of premiums, shall be delivered by Lessee to Lessor.
Section 5.4. Lessee shall not take out separate insurance concurrent
in form or contributing in the event of loss with that required in this Article
to be furnished by, or which may reasonably be required to be furnished by
Lessee unless Lessor is included therein as an insured, with loss payable as in
this Lease provided. Lessee shall immediately notify Lessor of the taking out of
any such separate insurance and shall deliver the policy or policies as provided
in Section 5.3 hereof.
Section 5.5. Each policy delivered hereunder shall, to the extent
obtainable, contain an agreement by the insurer that such policy shall not be
cancelled without at least thirty (30) days prior written notice to Lessor and
to the Mortgagee named in such policy.
Section 5.6. No destruction of or damage to the Leased premises or
any part thereof by fire or any other casualty shall terminate or permit Lessee
to surrender this Lease or shall relieve Lessee from Lessee's liability to pay
the full rent and other charges payable under this Lease. Lessee expressly
waives any rights now or hereafter conferred upon it by statute or otherwise to
quit or surrender this Lease or the Leased Premises or any part thereof, or to
any suspension, diminution, abatement or reduction of rent on account of any
such destruction or damage.
Section 5.7. Any other provision of this Lease to the contrary
notwithstanding, Lessor and Lessee do hereby mutually waive any and every claim
which shall or may arise in
7
favor of one party and against the other party hereto during the term of this
Lease, and any and all loss or damage to any or all of its property situated
within or upon, or later to be caused to become situated within or upon, or
constituting a part of, or later to be caused to constitute a part of, the
Leased Premises, which claim, loss and damage are covered by valid and
collectible fire and extended coverage insurance policies. Lessor and Lessee do
hereby mutually waive any and all claims which shall or may arise, in favor of
one party and against the other party to this Lease during the term hereof or
any extension thereof, for any and all loss of, or damage resulting from, the
normal use and occupancy of the said Leased Premises. Inasmuch as the above
mutual waivers shall and do preclude the assignment of any claim aforesaid, by
way of subrogation (or otherwise) to any insurance Company (or any other
person), Lessee hereby agrees immediately to give to each insurance company
issuing to it policies of fire and extended coverage insurance, written
notification of the terms of the said mutual waivers, and to have such policies
of insurance coverage properly endorsed, if such endorsement be necessary, to
prevent any invalidation of the said policies of insurance coverage by reason of
the existence of such waivers.
ARTICLE VI.
Compliance with Laws, Ordinances, Etc.
Section 6.1. At all times during the term of this Lease, Lessee, at
its sole cost and expense, shall promptly comply with all applicable laws,
ordinances, orders, rules, directions, regulations and requirements of all
federal, state and municipal governments, courts, departments, commissions,
boards and officers, any national or local Board of Fire Underwriters, or any
other body exercising functions similar to those of any of the foregoing, which
may be applicable to the Leased Premises or any part thereof and to the
sidewalks, curbs adjoining the Leased Premises or to the use or manner of use of
the Leased Premises or any part thereof, or to the owners, tenants or occupants
thereof, whether or not such law, ordinance, order, rule, direction, regulation
or requirement shall necessitate structural changes or improvements, or the
removal of any encroachments or projections, ornamental, structural or
otherwise, onto or over the streets adjacent to the Leased Premises, or onto or
over other property contiguous or adjacent thereto. Lessee shall likewise comply
with the requirements of all policies of insurance at any time in force with
respect to the Leased Premises or any part thereof.
Section 6.2. Lessee shall have the right to contest by appropriate
proceedings diligently conducted in good faith, in the name of Lessee or lessor
or both, without cost or expense to Lessor, the validity or application of any
law, ordinance, order, rule, regulation or requirement of the nature referred to
in this Article, under the terms, conditions and provisions of Article IV hereof
governing the contesting of Impositions and providing for the indemnification of
Lessor, provided, however, that any such contest does not subject Lessee or
Lessor to any criminal liability.
ARTICLE VII.
Use and Occupancy
Section 7.1. Lessee shall use and occupy the Leased Premises for any
use to which the Lessor may consent in writing, or for any of the higher or
better uses to which the Leased Premises may be put consistent with the
provisions of this Lease and without impairing
8
the rentable value of the Leased Premises or the rental payable to Lessor
hereunder, and for no other purpose.
Section 7.2. Lessee shall not use or occupy or permit the Leased
Premises to be used or occupied, nor do or permit anything to be done in or on
the Leased Premises, in whole or in part, in a manner which would in any way
violate any certificate of occupancy affecting the Leased Premises, or make void
or voidable any insurance then in force with respect thereto, or which may make
it impossible to obtain fire or other insurance thereon required to be furnished
by Lessee hereunder, or as will cause or be apt to cause structural injury to
the Leased Premises or any part thereof, or as will constitute a public or
private nuisance; nor shall Lessee use or occupy or permit the Leased Premises
to be used or occupied, in whole or in part, in a manner which may violate any
laws, regulations, ordinances or requirements of any governmental authority
having jurisdiction as to the Leased Premises; provided, however, that Lessee
may, in good faith, if it shall so desire, contest the validity of any such
laws, regulations, ordinances or requirements and, pending the determination of
such contest, may postpone compliance as provided in Section 6.2 hereinabove.
ARTICLE VIII.
Construction of Additional Buildings
Section 8.1. The construction of any additional Buildings shall be
subject to the provisions of Article IX and any other reasonable conditions
which, in the opinion of Lessor, are necessary to protect Lessor's interest in
connection with such construction.
ARTICLE IX.
Maintenance, Alterations, Repairs, Etc.
Section 9.1. Lessee has leased the Leased Premises after a full and
complete examination thereof, as well as the title thereto and its present uses
and non-uses, and Lessee accepts the same without any representation or
warranty, express or implied in fact or by law, by Lessor and without recourse
to Lessor, as to the title thereto, the nature, condition or usability thereof
or the use or uses to which the Property or Buildings of any part thereof may be
put. Except as provided in Section 9.10, Lessor shall not be required to furnish
any services or facilities or to make any repairs or alterations in or to the
Leased premises, throughout the term of this Lease, Lessee hereby assuming the
full and sole responsibility for the condition, operation, repair, replacement,
maintenance and management of the entire Leased Premises. Nothing contained in
this Lease shall impose on Lessor the obligation to make any repairs or expend
any monies for the maintenance of the Leased Premises or the renewal,
replacement or repair of any Buildings.
Section 9.2. Lessee shall throughout the term of this Lease, at
Lessee's sole expense, take good care of the Leased Premises, promptly make all
repairs thereto, interior and exterior; structural and non-structural, ordinary
and extraordinary, and shall maintain and keep the Leased Premises and the
sidewalks and curbs adjacent thereto in good order, repair and condition. Lessee
shall also keep such sidewalks as well as all common areas within the Leased
Premises free and clear from rubbish, ice, snow and other debris and unlawful
obstructions and shall not encumber or obstruct the same or allow the same to be
encumbered or obstructed in any
9
manner. Lessee shall indemnify and hold Lessor harmless of and from any and ail
claims, demand, or demands upon or arising out of any accident, injury or damage
to any person or property which shall or may happen in or upon the Leased
Premises or any part thereof, or upon the sidewalks about the Leased Premises,
however caused, and shall keep the Leased Premises free and clear of any and all
mechanics' and materialmen's liens or other similar liens or charges incidental
to work done or material supplied in or about the premises, subject to the
provisions of Section 10.3.
Section 9.3. Lessee will not do, permit or suffer any waste,
damages, disfigurement or injury to or upon the Leased Premises or any part
thereof. Lessee shall have the right at any time and from time to time to sell
or dispose of any machinery, equipment or fixtures subject to this Lease which
may have become obsolete or unfit for use or which is no longer useful,
necessary or profitable in the conduct of Lessee's business, provided, that
Lessee shall then or theretofore substitute for the same other machinery,
equipment or fixtures not necessarily of the same character, but of a value and
quality at least equal to that of the property so disposed of.
Section 9.4. The necessity for and adequacy of services and repairs
to the Leased Premises pursuant to Section 9.3 hereof shall be measured by the
standard which is appropriate for improvements of similar construction and
class.
Section 9.5. Lessee shall have the right to make, at its sole cost
and expense, additions, alterations, replacements, substitutions, and changes
(hereinafter sometimes referred to as "alterations") in or to the Leased
Premises, provided the Lessee shall not then be in default in the performance of
any of Lessee's covenants or agreements in this Lease, subject, however, in all
cases to the following:
(a) No structural alterations shall be commenced except after
twenty (20) days' prior written notice to Lessor;
(b) No alterations of any kind shall be made without the prior
written consent of the Lessor which would (i) change the general character or
structure of the Buildings, or (ii) reduce or impair (other than a temporary
reduction or impairment) the value, rental, rental value, rentability or
usefulness of the Leased Premises or any part thereof; Lessor agrees that it
will not unreasonably withhold its consent under this clause (b) where such
change cannot be reasonably expected to reduce or impair (other than a temporary
reduction or impairment) the value, rental, rental value, rentability or
usefulness of the Leased premises or any part thereof;
(c) No alterations shall be undertaken until Lessee shall have
procured and paid for, so far as the same may be required from time to time, all
permits and authorizations of all municipal departments and governmental
subdivisions having jurisdiction;
(d) Any alterations (except tenant improvements compatible
with the present character and structure of the Leased Premises) involving in
the aggregate an estimated cost of more than $100,000.00 shall be conducted
under the supervision of an architect or engineer selected by Lessee and
approved in writing by Lessor (which approval shall not be
10
unreasonably withheld); and no such alterations shall be made, except in
accordance with detailed plans and specifications and cost estimates prepared
and approved in writing by such architect or engineer and approved in writing by
Lessor (which approval shall not be unreasonably withheld);
(e) Once commenced, any alterations shall be made promptly
(unavoidable delays excepted) and in a good and workmanlike manner and in
compliance with all applicable permits and authorizations and building and
zoning laws;
(f) Workmen's compensation insurance covering all persons
employed in connection with the work and with respect to whom death or bodily
injury claims could be asserted against Lessor, Lessee or the Leased Premises,
in any event not less than the minimum amount and coverage required under the
laws of the state wherein the Leased Premises are situated, and general
liability insurance for the mutual benefit of Lessor and the Lessee shall be
maintained by Lessee at Lessee's sole cost and expense at all times when any
substantial alterations are in progress.
(g) If the estimated cost of any such structural alteration
shall be in excess of $100,000.00, Lessee, at Lessee's sole cost and expense,
shall furnish to Lessor a surety company performance bond, issued by a reputable
company, in an amount at least equal to the estimated cost of such alteration,
or other assurances reasonably satisfactory to the Lessor, guaranteeing the
completion thereof within a reasonable time, subject to unavoidable delays, free
and clear 'of all encumbrances, chattel mortgages, conditional bills of sale,
and other charges, and in accordance with the plans and specifications approved
by Lessor.
(h) If a construction loan is required by Lessee for the cost
of such alterations, prior to the commencement of the construction of such
alterations Lessee shall obtain a commitment for temporary financing from a
Construction Lender approved by Lessor in form and substance satisfactory to
Lessor, which commitment shall provide, among other things, for lending of an
amount (hereinafter called "Construction Loan"), which, with the equity money
provided by Lessee, will be adequate for the payment of all costs of
construction of the alterations, the preparation of the plans and specifications
therefor and all other costs (which shall include without limitation all
interest, taxes and carrying charges of every kind and nature during
construction) of the work. Lessee shall cause such commitment to provide that
the default of Lessee under this Lease shall not release the committing party
from its obligation to advance the funds committed, provided Lessor or others
shall elect to complete the construction of the alterations and shall so notify
the committing party. Lessee shall not be deemed in default under this Lease
until notice of default shall be served on Lessee and the committing party. A
machine copy of any proposed commitment shall be submitted to Lessor for
approval. Lessor shall notify Lessee of any objection to the commitment within a
reasonable time.
Section 9.6. Whether under the provisions of this Lease or
otherwise, neither Lessee, nor any Space Tenant, nor any agent, employee,
representative, contractor, or subcontractor of either Lessee or any Space
Tenant, shall have any power or authority to do any act or thing or to make any
contract or agreement which will bind Lessor; and Lessor shall have no
responsibility to Lessee or to any Space Tenant, contractor, subcontractor,
supplier, materialman, workman or other person, firm or corporation who shall
engage in or participate in
11
any Construction of any improvements or Buildings or alterations thereto unless
Lessor shall expressly undertake such obligation by an agreement in writing.
Section 9.7. If any excavation or other building operation
contemplated to be made or shall be made upon the Property or the Buildings or
any adjoining premises, street or alley, Lessee shall, and does hereby assume,
at Lessee's expense, all obligations imposed by law on both the owner and the
occupant of the Leased Premises with respect to shoring and lateral support and
agrees, to the extent that either the owner or occupant of the Leased Premises
may be obligated so to do, to shore the foundations and walls of the adjoining
premises as the case may be, and to do any other act or thing, to the extent
necessary for the safety or preservation of the adjoining premises and to
prevent any claims or liens against Lessor or the Leased Premises or any part
thereof by reason of failure to furnish such lateral support or shoring. Should
Lessee fail to do such shoring, then Lessor, after ten (10) days prior written
notice to Lessee, may do such shoring but shall not be required so to do, and in
such event Lessee shall permit Lessor or Lessor's agents or the owners or
lessees of such adjoining premises and their respective representatives to enter
the Leased Premises for such purpose and Lessor shall not be liable for any
inconveniences, annoyance, disturbance, loss of business or other damage arising
therefrom and Lessee's obligations herein shall not thereby be affected. In the
event Lessor does perform such shoring, Lessor shall be entitled to and shall
recover all of Lessor's expenses and costs expended therefore from Lessee.
Section 9.8. The cost of the construction of alterations shall be
paid promptly so that the Leased Premises shall at all times be free of liens
for labor and materials supplied to Lessee (except as contested under Article VI
or Article X). If a Construction Loan is required for the construction of
alterations, the Construction Loan documents shall provide for a controlled
disbursement of the Construction Loan acceptable to both Lessor and Lessee for
the purpose of securing the proper payment of all costs of construction. Before
the first disbursement is made from the Construction Loan Lessee shall deposit
with the Construction Lender funds equal to the amount, if any, by which the
cost estimates prepared by the architect exceed the funds committed by the
Construction Lender. If no Construction Loan shall be required by Lessee, the
estimated cost of the construction shall be deposited in a joint account of
Lessor and Lessee to be established at a bank mutually acceptable to Lessor and
Lessee, and from time to time upon certification of the architect shall be paid
out for costs of construction by checks drawn by Lessor and Lessee on said joint
account.
Section 9.9. In the event Lessee shall fail to make any payment
required to be made in this Article or shall default in the performance of any
other covenant or agreement which Lessee is required to perform under this Lease
during the period when-construction provided for in this Lease shall be in
progress or shall be required by the terms of this Lease to commence, Lessor may
treat such default as a breach of this Lease and, in addition to the rights and
remedies provided in Article XXI hereof, Lessor shall have the right to carry
out or complete construction without terminating this Lease, in which event the
Construction Lender, if its commitment obligates it to do so if it otherwise
agrees to do so, on request, shall make disbursements of any funds available for
the purpose pursuant to the commitment or otherwise in its hands (which in each
case shall also refer to any sums received by the Construction Lender under a
surety bond described in this Article) without the necessity of any request by
Lessee, and
12
any sum expended by Lessor under the provisions of this Article. IX shall be and
become additional rent under this Lease and be due and payable by Lessee
immediately upon demand.
Section 9.10. At its sole cost and expense, Lessor agrees to make
the following capital improvements to the Property on or before December 31,
2005:
Golf Course Irrigation System $2,000,000
Roads-Asphalt Overlay $ 250,000
Golf Course Pesticide Building $ 60,000
Golf Course Fertilizer & Employee Building $ 80,000
Club House Roof $ 185,000
----------
Total $2,575,000
Lessee shall not be entitled to a refund or credit against rent if the actual
cost of constructing these capital improvements is less than the estimated
amounts set forth above. Landlord shall select any and all contractors and
subcontractors necessary to make the above capital improvements in its sole
discretion.
ARTICLE X.
Discharge of Liens
Section 10.1. Lessee will not create or permit to be created or to
remain, and will discharge, any lien, encumbrance or charge (levied on account
of any Imposition or any mechanic's, laborer's or materialman's line or any
conditional sale, title retention agreement or security agreement or chattel
mortgage, or otherwise) against the Leased Premises or any part thereof;
provided that any Imposition may, after the same becomes a lien on the Leased
Premises or any part thereof, be paid or contested in accordance with Article VI
hereof, and any mechanic's, laborer's or materialman's lien may be discharged in
accordance with Section 10.3 hereof.
Section 10.2. If any mechanic's, laborer's or materialman's lien
shall at any time be filed against the Leased Premises or any part thereof,
Lessee, within sixty (60) days after notice of the filing thereof, will cause
the same to be discharged of record by payment, deposit, bond, order of a court
of competent jurisdiction or otherwise. If Lessee shall fail to cause such lien
to be discharged within the period aforesaid, then, in addition to any other
right or remedy, Lessor may, but shall not be obligated to, discharge the same
either by paying the amount claimed to be due or by procuring the discharge of
such lien by deposit or by bonding proceedings. Any amount so paid by Lessor and
all costs and expenses incurred by Lessor in connection therewith, together with
interest thereon at the rate of ten percent (10%) per annum from the respective
dates of Lessor's making of the payment or incurring of the cost and expense
shall constitute additional rent payable by Lessee under this Lease and shall:
be paid by Lessee to Lessor on demand.
13
Section 10.3. Notwithstanding the foregoing, Lessee shall not be
required to pay or discharge any such mechanic's lien so long as Lessee shall in
good faith proceed to contest the same by appropriate proceedings; provided,
however, that Lessee shall give written notice to Lessor of Lessee's intention
to contest the validity of such lien. If such lien shall be reduced to judgment
or such process as may be issued for the enforcement thereof is not promptly
stayed, or if so stayed and such stay thereafter expires, then in that event
Lessee shall pay and discharge said judgment forthwith and failing this Lessor
(in addition to the remedies provided in Article XXI) shall have the remedies
provided in Section 10.2 hereof.
Section 10.4. Nothing in this Lease contained shall be deemed or
construed in any way as constituting the consent or request of Lessor to any
contractor, subcontractor, laborer or materialman for the performance of any
labor or the furnishing of any materials for any specific improvement,
alteration to or repair of the Leased Premises or any part thereof, nor as
giving Lessee any right, power or authority to contract for or permit the
rendering of any services or the furnishing of any materials that would give
rise to the filing of any lien against the Leased premises or any part thereof.
ARTICLE XI.
Damage or Destruction
Section 11.1. If, at any time during the term of this Lease, the
Buildings or any part thereof shall be damaged or destroyed by fire or other
casualty (including any casualty for which insurance coverage was not obtained
or obtainable) of any kind or nature, ordinary or extraordinary, foreseen or
unforeseen, Lessee, at Lessee's sole cost and expense, and whether or not the
insurance proceeds, if any, shall be sufficient for the purpose, shall proceed
with reasonable diligence (subject to a reasonable time allowance for the
purpose of adjusting such loss but in no event later than two (2) months from
the occurrence of such damage) to repair, alter, restore, replace or rebuild the
same as nearly as possible to its value, condition, and character immediately
prior to such damage or destruction subject to such changes or alterations as
Lessee may elect to make in conformity with and subject to the provisions of
Sections 9.5, 9.8 and 9.9 hereof.
Section 11.2. Except as otherwise provided in this Article, the
conditions under which any repairs, alterations, restoration, replacement or
rebuilding work are to be performed and the method of proceeding with and
performing the same shall be governed by all of the provisions of Section 9.5
hereof except subsection (a) of said section.
Section 11.3. Subject to the requirements of the Mortgagee all
insurance money paid to Lessor on account of such damage or destruction under
the policies of insurance provided for in Article V hereof, less the cost, if
any, incurred in connection with the adjustment of the loss and the collection
thereof (herein sometimes referred to as the "insurance proceeds"), shall be
applied to the payment of the cost of the repair to the extent such insurance
proceeds shall be sufficient for the purpose, and shall be paid out to or for
the account of Lessee from time to time as such alteration progresses. All sums
so paid to Lessee and any other insurance proceeds received or collected by or
for the account of Lessee (other than by way of reimbursement to Lessee for sums
theretofore paid by Lessee) shall be held by Lessee in trust for the purpose of
paying the cost of such repair.
14
Upon receipt by Lessor of evidence reasonably satisfactory to it
that the repair has been completed and paid for in full and that there are no
liens on the Leased Premises or any part thereof as a result thereof, Lessor
shall pay to Lessee any remaining balance of such insurance proceeds. If the
insurance proceeds received by Lessor shall be insufficient to pay the entire
cost of the repair, Lessee shall supply the amount of any such deficiency and
shall first apply the same to the payment of the cost of the repair before
calling upon Lessor for the disbursement of the insurance proceeds held by
Lessor.
Under no circumstances shall Lessor be obligated to make any
payment, disbursement or contribution towards the cost of the repair except to
the extent of the insurance proceeds actually received by Lessor. If Lessee
shall fail to comply with any of the provisions of Section 11.1 or 11.2 hereof,
Lessor shall notify Lessee of such default and thereafter Lessor, in addition to
any other remedies Lessor may have, may refuse to make any payment hereunder and
may apply the insurance proceeds in any order Lessor may elect towards the
payment of the cost of the repair or the payment of any rent in default.
Section 11.4. In no event shall Lessee be entitled to any abatement,
allowance, reduction or suspension of rent because the Leased Premises or any
part thereof shall be untenantable owing to the partial or total destruction
thereof, and anything herein to the contrary, no such damage or destruction
shall affect in any way the obligation of Lessee to pay the rent and other
charges herein reserved or required to be paid, nor release-Lessee of or from
any obligation imposed under Lessee under this Lease except as herein provided.
Section 11.5. In the event the Mortgage shall be in force at the
time of any damage to or destruction by fire or otherwise of the Leased Premises
or any part thereof, then the terms of such Mortgage shall control with respect
to repair, restoration and replacement of the Leased premises and to the
application of insurance proceeds.
Section 11.6. Lessor shall in no event be responsible for the
collection or noncollection of any insurance proceeds hereunder but only for
such insurance money as shall come into Lessor's hands.
ARTICLE XII.
Condemnation
Section 12.1. If, at any time during the term of this Lease, title
to the whole or substantially all of the Leased premises shall be taken by
statute or in condemnation proceedings or by any right of eminent domain, this
Lease shall terminate and expire on the date of such taking and the rent and
other charges payable hereunder shall be apportioned and paid to the date of
such taking. For purposes of this Article XII, "substantially all of the Leased
Premises" shall be deemed to have been taken if the remaining portion cannot be
practically and economically used or converted for use by the Lessee for the
purposes permitted by this Lease, and "date of taking" shall mean the date that
possession of the Leased Premises or any part thereof is denied Lessee and
Lessor so that the intents and purposes of this Lease are incapable of being
fulfilled.
In the event of any such taking and the termination of this Lease,
Lessor and Lessee shall together make one claim for an award for their combined
interests in the subject
15
property, and the net award received (after deduction of reasonable fees and
expenses, including without limitation reasonable fees for attorneys and
experts) shall be paid as follows and in the following order:
(a) The holder of any Mortgage shall first receive the amount
required to be applied in reduction of the mortgage indebtedness;
(b) The balance of said award or awards, if any, shall then be
paid to Lessor.
Section 12.2. In the event of any such taking of less than the whole
or substantially all of the Leased Premises, the term of this Lease shall not be
reduced or affected in any ways and Lessee shall, at Lessee's own cost and
expense, proceed with reasonable diligence to perform all necessary repairs and
replacements to the improvements on the Leased Premises affected by such
condemnation to the extent necessary to restore the Leased Premises to its
foremer condition satisfactory to fulfill the purposes of this Lease, provided,
however, that Lessee shall not be obligated to expend an amount in excess of the
proceeds of the net award available to Lessee for such purposes under the
provisions of Subsection 12.2(d) below.
All compensation available or paid to Lessor and Lessee upon such
partial taking shall be distributed as follows:
(a) The holder of any Mortgage shall first be entitled to
receive the amount required to be applied in reduction of the indebtedness
secured by such Mortgage;
(b) Lessee shall then be entitled to receive an amount equal
to the cost of the necessary repairs and replacement of the improvements on the
Leased Premises affected by such condemnation;
(c) The balance of such award or awards, if any, shall then be
paid to Lessor.
(d) If Lessee shall have been deriving revenue and rents from
the portions of the Leased Premises so taken, the rent payable for the balance
of the term of this Lease shall be reduced, effective as of the date of such
partial taking, to an amount which bears the same relation to the rent specified
in section 3.1 as the gross revenue and rents attributable to the Leased
Premises remaining after such taking bears to the gross revenue and rents
attributable to the Leased Premises prior to such taking.
Section 12.3. If any matter covered by this Article between Lessor
and Lessee shall be in dispute, and if Lessor and Lessee cannot agree thereon
within thirty (30) days after the final award or awards shall have been fixed
and determined or such dispute shall arise, such dispute or matter shall be
determined by arbitration and appraisal as the case may be in the manner
provided herein.
ARTICLE XIII.
Financial Information
16
Section 13.1. Lessee covenants and agrees that it will keep and
maintain books and records of account in which full, true and correct copies
shall be made of all dealings and transactions relative to Lessee and the Leased
Premises in accordance with generally accepted accounting practice consistently
applied and to preserve the same for at least three (3) years after the fiscal
year to which they relate, which books and records of account shall, at
reasonable times, be open to the inspection of Lessor and its accountants and
other duly authorized representatives.
ARTICLE XIV.
Lessor's Title and Lien
Section 14.1. Lessor shall have title to the Leased Premises
paramount to all others. Lessor's lien for rent and other charges (subject to
the rights of any mortgagee under Article XIX hereof) shall be paramount to all
other liens on the Leased Premises.
Section 14.2. Lessee shall have no right or power to and shall not
in any way encumber the title of Lessor in and to the Leased Premises. The fee
simple estate of Lessor in the Leased Premises shall not be in any way subject
to any claim by way of lien or otherwise, whether claimed by operation of law or
by virtue of any express or implied lease or contract or other instrument made
by Lessee; and any claim to a lien or otherwise upon the Leased Premises arising
from any act or omission of Lessee shall accrue only against the Leasehold
Estate of Lessee in the Property and Lessee's interest in the Buildings and
shall in all respects be subject to the paramount rights of Lessor in the Leased
Premises and its remainder or residual interest in the Buildings.
ARTICLE XV.
Merger of Title
Section 15.1. There shall be no merger of Lessee's interest in this
Lease nor of the leasehold estate created by this Lease with the fee estate in
the Leased Premises or any part thereof by reason of the fact that the same
person may acquire or own or hold, directly or indirectly:
(a) Lessee's interest in this Lease or the leasehold estate
created by this Lease or any interest therein; and
(b) The fee estate in the Leased Premises or any part thereof
or any interest therein or Lessor's remainder or residual interest in the
Buildings or any interest therein;
and no such merger shall occur unless and until all persons having an interest
in the ownership interests described in (a) and (b) above shall join in a
written instrument effecting such merger and shall duly record the same.
ARTICLE XVI.
Quiet Enjoyment--Transfer of Lessor's Interest
Section 16.1. Lessor covenants that if and so long as Lessee keeps
and performs each and every covenant, agreement, term, provision and condition
herein contained on the part
17
and on behalf of Lessee to be kept and performed, Lessee shall quietly have and
enjoy the Leased Premises during the term without hindrance or molestation by
anyone claiming by, through or under Lessor, subject to the covenants,
agreements, terms, provisions, and conditions of this Lease.
Section 16.2. It is expressly understood and agreed that the terms
"Lessor" and "Lessee" as used in this Lease means only the present owner of the
Property and the present owner of the leasehold interest, respectively, and in
the event of the sale, assignment or transfer by either such owner or its
interest in the Leased Premises, such owner shall thereupon be released and
discharged from all covenants and obligations of Lessor and Lessee thereafter
accruing; but such covenants and obligations shall be binding upon each new
owner of any interest in the Leased Premises.
ARTICLE XVII.
Entry on Lease Premises by Lessor, Etc.
Section 17.1. Lessee shall permit Lessor and its authorized
representatives and designees to enter the Leased Premises or any part thereof,
at any reasonable times for the purpose of (a) inspecting the same, and (b)
making any repairs thereto and performing any work therein that may be necessary
by reason of Lessee's failure to make any such repairs or perform any such work
or to commence the same for thirty (30) days after notice from Lessor (or
without notice in case of emergency), and (c) showing the same to prospective
purchasers, mortgagees and tenants. Nothing herein contained shall be construed
as imposing any duty upon Lessor to do any such work; and the performance
thereof by Lessor shall not constitute a waiver of Lessee's default in failing
to perform the same.
Section 17.2. During the last year of the Lease Term or any
extension thereof, Lessor shall be entitled to display on the Leased Premises or
any part thereof, in such manner as not to unreasonably interfere with the
business of Lessee and Space Tenants, the usual "For Sale" or "For Rent" signs;
and Lessee agrees that such signs shall remain unmolested.
ARTICLE XVIII.
Surrender
Section 18.1. Subject to the terms of Article XXV hereof on the last
day of the Lease Term or any extension thereof or upon any earlier termination
of this Lease, or upon any re-entry by Lessor upon the Leased Premises, Lessee
shall quit and surrender the Leased Premises, together with all appurtenances
and additions thereto as a unit operational without dependence upon adjoining
property and all fixtures and articles of personal property attached to or used
in connection with the operation thereof and which are the property of Lessee,
into the possession and use of Lessor without delay and, in good order,
condition and repair, reasonable and ordinary wear and tear excepted, free and
clear of all lettings and occupancies other than Space Leases permitted by this
Lease and any other existing leases consented to by Lessor, and free and clear
of all liens and encumbrances other than those, if any, permitted by this Lease
or created or consented to by Lessor.
18
Section 18.2. Upon such termination, title to the Buildings together
with all appurtenances and additions thereto shall automatically vest in Lessor
without the execution of any further instrument. Lessee shall, however, on
demand, execute, acknowledge and deliver to Lessor any further assurances of
title to the Buildings and appurtenances and additions thereto as Lessor may
request; and Lessee hereby irrevocably constitutes and appoints Lessor as
Lessee's attorney in fact, coupled with an interest, to execute, acknowledge and
deliver any such instrument in the name and on behalf of Lessee in the event
Lessee shall for any reason fail to execute, acknowledge and deliver the same
promptly after demand is made therefor by Lessor.
Section 18.3. Where furnished by or at the expense of any Tenant of
Lessee, furniture, fixtures, equipment, trade fixtures and business equipment
(not constituting part of the Leased Premises) may be removed by Lessee or by
such Tenant at or prior to the termination of such lease; provided, however,
that Lessee shall with due diligence, and without expense to Lessor, cause the
Buildings to be promptly restored to same condition as prior to such removal and
cause any injury due to such removal to be promptly repaired.
Section 18.4. Any personal property of Lessee or any such Tenant
which shall remain on the Leased Premises after the termination of this Lease or
any other lease or sublease may, at the option of Lessor, be deemed to have been
abandoned by Lessee or any such Tenant and either may be retained by Lessor at
its property or be disposed of without accountability in such manner as Lessor
may see fit.
Section 18.5. Lessor shall not be responsible for any loss or damage
occurring to any property owned by Lessee or any such Tenant.
Section 18.6. The provisions of this Article XVIII shall survive any
termination of this Lease.
ARTICLE XIX.
Mortgages
Section 19.1. Lessee shall not, during the term of this Lease,
mortgage, assign, hypothecate, pledge or in any way encumber the Leased Premises
or any part thereof without the written consent of Lessor.
ARTICLE XX.
Assignment, Subletting, Etc.
Section 20.1. Lessee shall not (a) assign, pledge, encumber or in
any manner transfer this Lease, or any part thereof, or (b) sublease the Leased
Premises, or any part thereof, or (c) sell, transfer, pledge, lease, license or
encumber the Buildings or the interest of Lessee in any lease of the Buildings
or the rentals thereunder, without the prior written consent of Lessor in each
instance; and any attempt to do any of such acts without such consent shall be
null and void and of no effect and shall at the option of Lessor, terminate this
Lease.
Section 20.2. If the Lease be assigned, whether or not in violation
of the provisions of this Lease, Lessor may and is hereby empowered to collect
rent from the assignee. In such event, Lessor may apply the net amount received
by it to the rent and other payments
19
herein reserved or provided for, and no such collection shall be deemed a waiver
of the covenant herein against assignment or subletting, or any acceptance of
the assignee or subtenant as a tenant under this Lease, or a release of Lessee
from the further performance of the covenants herein contained on the part of
Lessee.
Section 20.3. The making of any assignment or subletting from and
after the date hereof, in whole or in part, whether or not with the consent of
Lessor, shall not operate to relieve Lessee herein named from its obligations
under this Lease and, notwithstanding any such assignment or subletting, Lessee
herein named shall remain liable for the payment of all rent and other charges
and for the due performance of all the covenants, agreements, terms and
provisions of this Lease to the full end of the term of this Lease, and whether
or not there shall have been any prior termination of this Lease by summary
proceedings or otherwise.
Section 20.4. Each and every assignee, whether or not approved by
Lessor and whether as assignee or as successor in interest. of any assignee or
Lessee herein named, shall immediately be and become and remain liable for the
payment of the rent and other charges payable under this Lease, and for the due
performance of all the covenants, agreements, terms and provisions of this Lease
on Lessee's part to be performed to the full end of the term of this Lease, and
each and every provision of this Lease applicable to Lessee shall also apply to
and bind every such assignee and purchaser with the same force and effect as
though such assignee or purchaser were Lessee named in this Lease. No transfer
to such assignee shall be binding upon Lessor unless such assignee shall deliver
to Lessor a recordable instrument which contains a covenant or assumption by
such assignee to such effect; but the failure or refusal of such assignee to
deliver such instrument shall not release or discharge such assignee from its
obligations and liability as above set forth.
Section 20.5. Any consent by Lessor herein contained or hereafter
given to any act of assignment, shall be held to apply only to the specific
transaction hereby or thereby approved. Such consent shall not be construed as a
waiver of the duty of Lessee, or its successors or assigns, to obtain from
Lessor a consent to any other or subsequent assignment, or as a modification or
limitation of the right of Lessor with respect to the foregoing covenant by
Lessee.
Section 20.6. If Lessee shall be a corporation or a partnership and
if the controlling interest in Lessee is transferred, sold or otherwise disposed
of (except as a result of death) without the prior written approval of Lessor,
Lessor shall have the right at any time thereafter to terminate this Lease by
giving written notice of such termination to Lessee specifying a day not less
than twenty (20) days and not more than forty (40) days thereafter and, upon the
giving of such notice, this Lease and the term and estate hereby granted shall
expire and terminate upon the day so specified in the notice as fully and
completely and with the same force and effect as if the day so specified were
the date hereinbefore fixed for the expiration of the term of this Lease.
ARTICLE XXI.
Events of Default; Termination
20
Section 21.1. The following events are hereby defined as "Events of
Default" under the terms of this Lease:
(a) If Lessee shall fail to pay any installment of rent or any
other sums or charges payable by Lessee to Lessor under this Lease when and as
the same become due and payable, and such failure shall continue for a period of
ten (10) days after the due date; or
(b) If Lessee shall fail to perform or comply with any other
term, covenant or agreement hereof, and such failure shall continue for a period
of thirty (30) days after written notice thereof from Lessor to Lessee, or, in
the case of a default or a contingency which cannot with due diligence be cured
within such period, Lessee fails to proceed with all due diligence within such
period to cure the same. and thereafter the prosecute the curing of such default
with all due diligence; or
(c) If Lessee shall fail to perform or comply with any of the
terms of the Mortgage beyond any grace period provided with respect thereto and
such default shall not have been cured or waived; or
(d) If Lessee shall make a general assignment for the benefit
of creditors, or shall admit in writing its inability to pay its debts as they
become due, or shall file a petition for bankruptcy, or shall be adjudicated a
bankrupt or insolvent, or shall file a petition seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, or shall file an
answer admitting or not contesting the material allegations of a petition
against it in any such proceeding, or shall seek or consent to or acquiesce in
the appointment of any trustee, receiver or liquidator of Lessee or any material
part of its properties; or
(e) If within thirty (30) days after the commencement of any
proceeding against Lessee seeking any reorganization; arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future statute, law or regulation, such proceeding shall not have been
dismissed, or if, within thirty (30) days after the appointment without the
consent or acquiescence of Lessee, of any trustee, receiver or liquidator of
Lessee or of any material part of its properties, such appointment shall not
have been vacated; or
(f) If any member of the Board of Directors of Lessee shall
not contemporaneously be a member of the Board of Directors of Lessor,
THEN and in any such event, lessor at any time thereafter (but prior to the
curing of all such Events of Default) may give notice to Lessee specifying such
Event of Default or Events of Default and stating that this Lease and the Lease
Term shall expire and terminate on the date specified in such notice, which
shall be at least ten (10) days after the giving of such notice, and on such
date, unless all such Events of Default shall have been cured and there shall
not exist any other Event of Default, all of the right, title and interest of
Lessee under this Lease shall terminate and Lessee shall remain liable as
hereinafter provided.
Section 21.2. If an Event of Default shall have occurred and be
continuing, Lessor, whether or not the Lease Term shall have been terminated
pursuant to Section 21.1, may,
21
upon ten (10) days' written notice, except in cases of emergency when no notice
need be given, enter upon and repossess the Leased Premises or any part thereof
and possess the improvements thereon, or any part thereof (said repossession and
possession being hereinafter referred to as "repossession"), by force, summary
proceedings, ejectment or otherwise, without being deemed quilty of any manner
of trespass, and may remove Lessee and all other persons and property therefrom.
Section 21.3. From time to time after the repossession of the Leased
Premises or any part thereof, pursuant to Section 21.2, whether or not the Lease
Term has been terminated, Lessor may, but shall be under no obligation to,
relent the Leased Premises or any part thereof, for the account of Lessee in the
name of Lessor or otherwise, for such term or terms (which may be greater or
less than the period which would otherwise have constituted the balance of the
Lease Term) and on such terms (which may include concessions or free rent) and
for such uses as Lessor, in its uncontrolled discretion, may determine, and may
collect and receive the rent therefor; and Lessee shall indemnify and hold
Lessor harmless for any deficiency in rentals received by Lessor upon such
reletting, all without prejudice to any other remedies available to Lessor.
Lessor agrees to use its best efforts to mitigate all damages and to relet the
Leased Premises in the event of any default specified herein.
Section 21.4. No termination of this Lease and no repossession of
the Leased Premises or any part thereof pursuant to this Article shall relieve
Lessee of Lessee's obligations and liabilities under this Lease, all of which
shall survive any such termination or repossession. In the event of any such
termination or repossession, whether or not the Leased Premises or any part
thereof shall have been relet, Lessee shall pay to Lessor the rent-and other
sums and charges to be paid by Lessee up to the time of such termination or
repossession; and thereafter Lessee, until the end of what would have been the
full term of this Lease, shall pay to Lessor, as and for liquidated and agreed
current damages for Lessee's default, the equivalent of the amount of the rent
and such other sums and charges which would be payable under this Lease by
Lessee if this Lease were still in effect, less the net proceeds, if any, of any
reletting effected pursuant to the provisions of Section 21.3, after deducting
all of Lessor's expenses in connection with such reletting, including, without
limitation, all repossession costs, brokerage and management commissions,
operating expenses, legal expenses, seasonable attorneys' fees, alteration
costs, and expenses of preparation for such reletting. Lessee shall pay such
current damages to Lessor monthly on the days on which the rent would have been
payable under this Lease if this Lease were still in effect, and Lessor shall be
entitled to recover the same from Lessee on each such day. At any time after
such termination or repossession, whether or not Lessor shall have collected any
current damages as aforesaid, Lessor shall be entitled to recover from Lessee,
and Lessee shall pay to Lessor on demand, as and for liquidated and agreed final
damages for Lessee's default, an amount equal to the then present worth of the
excess of the rent reserved under this Lease from the day of such termination or
repossession for what would be the then unexpired term if the same had remained
in effect, over the then fair rental value of the Leased Premises for the same
period.
Section 21.5. No failure by Lessor to insist upon the strict
performance of any term hereof or to exercise any right or remedy consequent
upon a breach thereof, and no acceptance of full or partial rent during the
continuance of any such breach, shall constitute a waiver of any such breach or
of any such term.
22
Section 21.6. In the event of any breach or threatened breach by
Lessee of any of the terms contained in this Lease, Lessor shall be entitled to
enjoin such breach or threatened breach and shall have the right to invoke any
right and remedy allowed at law or in equity or by statute or otherwise, except
that this lease shall be terminated only in the manner set forth herein.
Section 21.7. Lessee, for Lessee and on behalf of any and all
persons claiming through or under Lessee, including creditors of all kinds, does
hereby waive and surrender all right and privilege which they or any of them
might have under or by reason of any present or future law, to redeem the Leased
Premises or to have a continuance of this Lease forth the term hereby demised
after being dispossessed or ejected therefrom by process of law or under the
terms of this Lease or after the termination of this Lease as herein provided.
Section 21.8. Notwithstanding any other provision in this Lease,
while there exists, or if this Lease shall terminate as a result of, an Event of
Default, any funds then held by Lessor or a depository in which Lessee has an
interest, and any funds which otherwise would be payable to Lessee from any
source, may be applied, at the option of Lessor, to cure such default or to
damages payable by Lessee (whether provided for herein or by law) as a result of
such termination or Event of Default, and the balance remaining, if any, shall
be paid to Lessee if this Lease shall not terminate as a result of such Event of
Default when and if Lessee would be entitled to receive the same but for such
Event of Default, but not otherwise.
Section 21.9. The various rights, powers and remedies herein
contained and reserved to Lessor shall not be considered as exclusive of any
other right, power or remedy; but the same shall be construed as cumulative and
shall be in, addition to every other right, power or remedy now or hereafter
existing at law, in equity or by statute; and every right, power or remedy
reserved by this Lease to Lessor may be exercised from time to time and as often
as occasion therefore may arise and any such right, power or remedy shall not be
considered as exclusive of any other herein contained but shall be construed as
cumulative and in addition to any other right, power or remedy reserved to
Lessor hereunder. No delay or omission of Lessor to exercise any right, power or
remedy arising from any omission, neglect or default of Lessee shall impair any
such right, power or remedy or shall be construed as a waiver of any such
default or an acquiescence therein.
ARTICLE XXII.
Estoppel Certificates
Section 22.1. Each party agrees from time to time, upon not less
than ten (10) days' prior notice from the other, to execute, acknowledge and
deliver, without charge, to the other party, or to any person designated by the
other party, a statement in writing certifying that this Lease is unmodified and
in full force and effect (or if there have been modifications, identifying the
same by the date thereof and specifying the nature thereof), that to the
knowledge of such party no uncured Event of Default exists hereunder (of if any
such uncured Event of Default does exist, specifying the same) the dates to
which the rent and other sums and charges payable hereunder have been paid, and,
with respect to Lessee that Lessee to its knowledge has no claims against Lessor
hereunder (or if Lessee has any such claims, specifying the same).
23
ARTICLE XXIII.
Lessor's Right to Perform Lessee's Covenants
Section 23.1. If Lessee shall at any time fail to make any payment
or perform any act, covenant, provision or condition on its part to be made or
performed hereunder, then Lessor, after ten (10) days' notice to Lessee, except
when other notice is expressly provided for in this Lease (or without notice in
case of an emergency), and without waiving or releasing Lessee from any
obligation of Lessee contained in this Lease, may (but shall be under no
obligation to) make such payment or perform such act, and may enter upon the
Leased Premises or any part thereof for any such purpose; and take all such
action thereon as may be necessary therefor, including, without limitation, the
performance of repairs under Article IX.
Section 23.2. All sums so paid by Lessor and all costs and expenses
of every kind and nature whatsoever incurred by Lessor in connection with the
performance of any such act, together with interest thereon at the annual-'rate
of ten (10$) percent from the respective dates of Lessor's making of each such
payment or incur ring of each such cost and expense, including reasonable
attorney's fees, together with any consequential damages Lessor may suffer by
reason of the failure of Lessee to make such payment or perform such act shall
be paid by Lessee to Lessor on demand as additional rent hereunder.
ARTICLE XXIV.
Lessor's Right to Sell or Assign Rents
Section 24.1. Lessor shall have the right from time to time, to
convey its interest in the Leased Premises, subject to this Lease; and to assign
its interest in this Lease, or to assign from time to time the whole or any
portion of the rent or other sums and charges at any time paid or payable
hereunder by Lessee to Lessor, to a transferee designated by Lessor in a written
notice to Lessee, and in any such case Lessee shall pay the rent and such other
sums and charges so assigned, subject to the terms of this Lease, to such
transferee at the address mentioned in any such notice.
ARTICLE XXV.
Rights of First Refusal
Section 25.1. Lessor agrees that in the event Lessor desires to sell
its interest in the Leased Premises or any part thereof, and shall have received
a bona fide, written offer from a third party to purchase the same, Lessor shall
first offer its interest in the Leased premises for sale to Lessee by serving
written notice and a copy of such offer on Lessee. Such offer shall be at the
price and upon the other terms and conditions embodied in Lessor's offer from
the third party and as provided in this Article. After receipt of such notice
the other party shall have the longer of (i) fifteen (15) days, if the value of
such offer is readily ascertainable, or (ii) the time required for an accurate
determination of the value of such offer (if such offer shall not be a cash or
equivalent transaction) plus fifteen (15) days, in which to elect to purchase
the offered interest upon the price, terms and conditions set forth in such
notice.
Section 25.2. If Lessee elects to purchase, the Lessor shall sell
the interest as offered to Lessee and Lessee shall purchase the same. Lessee's
notice of election shall be
24
accompanied by a payment in the amount, if any, specified as a down payment in
the third party's offer to purchase as communicated to Lessee. The closing of
such purchase shall occur at the time and place set forth in the offer, and
Lessor and Lessee shall deliver such documents and take such action in
connection with the closing as is required by the offer.
Section 25.3. If Lessee shall fail to give notice of election to
purchase the offered interest accompanied by payment pursuant to this Article,
or after giving notice of election to purchase the offered interest shall fail
to perform its obligations pursuant thereto, the Lessor may sell and convey the
offered interest to the third party offeror upon terms and conditions as
contained in the third party offer, without prejudice to its right to damages
against a party who has given notice of election to purchase but has failed to
perform its obligations pursuant thereto. Any purchaser or third party may rely
upon an affidavit of a proper authorized officer of Lessor as to the acceptance
or rejection of such offer by Lessee.
Section 25.4. The right of first refusal provided herein shall have
continuing application and shall survive transfers and assignments of interest
during the full term of this Lease.
Section 25.5. The rights granted hereunder shall not apply to any
conveyance to a subsidiary or affiliated corporation of the Lessor; or to a
conveyance in connection with any merger, consolidation or sale of all or
substantially all of the assets of Lessor; or to any mortgage of either party's
interest; or to any sale by a foreclosing mortgage at a public auction or under
judicial proceedings.
Section 25.6. Notwithstanding the provisions of Section 26.1, the
rights of first refusal granted herein may not be exercised by Lessee if an
Event of Default shall then exist.
Section 25.7. Notwithstanding anything to the contrary contained
herein, Lessor may convey the Leased Premises subject to the option and right of
first refusal herein granted if such right of first refusal has not been
exercised in connection with such sale.
ARTICLE XXVI.
Notices
Section 26.1. All notices, demands, requests or other communications
which may be or are required to be given, served or sent by either party to the
other shall be in writing and shall be deemed to be sufficient for all purposes
and to have been properly given or sent:
(a) If intended for Lessee, by mailing by registered or
certified mail with the postage prepaid, addressed to Lessee at P.O. Box 707,
Saratoga, Wyoming 82331.
(b) If intended for Lessor, by mailing by registered or
certified mail with the postage prepaid, addressed to Lessor at P.O. Box 707,
Saratoga, Wyoming 82331.
(c) If intended for the holder of any mortgage, either by
delivery thereof personally (if such holder is an individual) or by delivery
thereof personally to an officer (if such holder is a corporation) or by mailing
by registered or certified mail with the postage
25
prepaid; addressed to such holder at the address furnished to Lessor by Lessee.
Copies of all such notices shall be simultaneously sent to Lessor or Lessee, as
the case may be.
Each party and any mortgagee may designate by notice in writing a new address to
which any notice, demand, request or communication may hereafter be so given,
served or sent. Each notice, demand, request or communication which shall be
mailed by registered mail to Lessor, Lessee or the holder of any mortgage in the
manner aforesaid shall be deemed sufficiently given, served or sent for all
purposes hereunder at the time such notice, demand, request or communication
shall be mailed by United States registered mail in any post office or branch
post office regularly maintained by the United States government.
Section 26.2. If a request is received in writing by Lessor or
Lessee for a consent or approval required under this Lease or for information to
which the party making such request shall be entitled, the party receiving such
request shall act with reasonable promptness thereon and shall not unreasonably
delay notifying the party making such request as to the granting or withholding
of such consent or approval or furnishing to such party the information
requested.
ARTICLE XXVII.
Arbitration and Appraisal
Section 27.1. In each case specified in this Lease, if any, in which
it shall become necessary to resort to arbitration, such arbitration shall be
determined as provided in this Article, and all arbitrators shall be
disinterested persons with experience in a calling connected with the subject
matter of the dispute. The party desiring such arbitration shall give written
notice to that effect to the other party, specifying in such notice the name and
address of such person designated to act as arbitrator on its behalf. Within ten
(10) days after the service of such notice, the other party shall give written
notice to the first party specifying the name and address of the person
designated to act as arbitrator on its behalf. If the second party fails to
notify the first party of the appointment of its arbitrator, as aforesaid,
within or by the time above specified, then the appointment of the second
arbitrator shall be made in the same manner as hereinafter provided for the
appointment of a third arbitrator in a case where the two arbitrators appointed
hereunder and the parties are unable to agree upon such appointment. The
arbitrators so chosen shall meet within three (3) days after the second
arbitrator is appointed. If the two arbitrators shall not agree upon the
decision to be made in such dispute, they shall, themselves, appoint a third
arbitrator who shall be a competent and impartial person; and in the event of
their failure to make such decision to appoint such arbitrator within three (3)
days after their meeting, the third arbitrator shall be selected by the parties
themselves if they can agree thereon within a further period of three (3) days.
If the parties do not so agree, then either party, on behalf of both, may apply
to any court of general jurisdiction in the county in which the Leased Premises
are located for the appointment of such third arbitrator, and the other party
shall not raise any question as to the court's full power and jurisdiction to
entertain the application and make the appointment and the person so appointed
shall be the third arbitrator. The decision of the arbitrators so chosen shall
be given within a period of fifteen (15) days after the appointment of such
third arbitrator. The decision in which any two of the arbitrators so appointed
and acting hereunder concur shall in all cases be binding and conclusive upon
the parties. Each party shall pay the fees and expenses of the one of the two
original arbitrators appointed by such party, or in whose stead as above
provided such arbitrator was appointed, and the fees and expenses of the third
arbitrator, if
26
any, shall be borne equally by both parties. Except as otherwise provided in
this Lease, any such arbitration shall be conducted in accordance with the rules
then obtaining of the American Arbitration Association; and judgment upon any
arbitration decision rendered may be entered by any court having jurisdiction
thereof.
Section 27.2. If a majority of the arbitrators believe that expert
advice would materially assist the resolution of the matter in dispute, they may
retain one or more qualified persons, including without limitation, legal
counsel, architects or engineers, to provide such expert advice. The expenses
incident to the proceedings shall be borne equally between Lessor and Lessee.
The fees of respective counsel engaged by the parties, and the fees of expert
witnesses and other witnesses called by the parties, shall be paid by the
respective party engaging such counsel or calling or engaging such witnesses.
ARTICLE XXVIII.
Holding Over
Section 28.1. At the termination of this Lease by lapse of time or
otherwise, Lessee shall yield up immediate possession of the Leased Premises,
and all appurtenances and additions thereto, to Lessor and, failing to do so,
hereby agrees, at the option of Lessor, to pay forthwith to Lessor for the whole
time such possession is withheld reasonable rental value of the Leased Premises
per day thereafter.
The provisions of this clause shall not be held to be a waiver by Lessor of any
right of entry or re-entry as set forth in this Lease, nor shall the receipt of
such sum, or any part thereof, or any other act in apparent affirmance of the
tenancy, operate as a waiver of the right to terminate this Lease and the term
hereby granted for the period still unexpired for any breach by Lessee under
this Lease.
ARTICLE XXIX.
Brokerage Fees and Commissions
Section 29.1. Lessor and Lessee agree that neither party has
incurred any brokerage fees or commissions as a result of this Lease
transaction, and each party agrees to pay all brokerage fees and commissions, if
any, incurred by it as a result of this Lease transaction and agrees to
indemnify and save the other party harmless from and against any and all claims
for such fees and commissions.
ARTICLE XXX.
Covenants Binding; Modification of Covenants
Section 30.1. The covenants, agreements, terms, provisions and
conditions of this Lease shall be binding upon and inure to the benefit of the
successors and assigns of Lessor and, except as otherwise provided herein, the
successors and assigns of Lessee.
Section 30.2. None of the covenants, terms or conditions of this
Lease to be kept and performed by either party to this Lease shall in any
manner be waived, modified, changed or abandoned except by a written
instrument duly signed, acknowledged and delivered by the other party to this
Lease.
27
ARTICLE XXXI.
Construction of Terms and Waiver of Jury Trial
Section 31.1. If any term or provision of this Lease or the
application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Lease, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Lease shall be valid and be enforced to the fullest
extent permitted by law.
Section 31.2. This Lease shall be interpreted, construed and
enforced in accordance with the laws of the State of Wyoming.
Section 31.3. The parties hereto waive a trial by jury of any, and
all issues arising in any action or proceeding between them or their successors
or assigns under or connected with this Lease or any of its provisions or any
negotiations in connection therewith or the Lessee's use or occupation of the
Leased Premises.
[Signature pages on the next page]
28
IN WITNESS WHEREOF, the parties hereto have set their hands and
seals the day and year first above written.
Lessor: OLD BALDY CORPORATION
/s/ L. Patton Kline
--------------------------------
L. Patton Kline, President
Attest:
/s/ Nancy Petry
- --------------------------
Nancy Petry, Secretary
[Seal]
Lessee: OLD BALDY CLUB
/s/ L. Patton Kline
--------------------------------
By L. Patton Kline, President
Attest:
/s/ Nancy Petry
- --------------------------
Nancy Petry, Secretary
[Seal]
STATE OF WYOMING )
) ss.
COUNTY OF CARBON )
The foregoing instrument was acknowledged before me this ____ day of
________, 2001, by L. Patton Kline, President of Old Baldy Corporation, a
Wyoming corporation, on behalf of the corporation.
/s/ Judy E. Welton
_____________________________
Notary Public
My commission expires:
February 2, 2002
STATE OF WYOMING )
) ss.
COUNTY OF CARBON )
The foregoing instrument was acknowledged before me this ____ day of
__________, 2001, by L. Patton Kline, President of Old Baldy Club, a Wyoming
corporation, on behalf of the corporation.
/s/ Judy E. Welton
_____________________________
Notary Public
My commission expires:
February 2, 2002