LEASE
THIS LEASE ("Lease
") is made and entered into as of this
1st day of December, 2005 (the " Effective Date ") by and
between BIG BOULDER CORPORATION, (herein referred to as "
Landlord ") and JFBB SKI AREAS, INC., a Missouri
corporation, (herein referred to as " Tenant "),
W I T N E S S E T H:
WHEREAS, Landlord desires to enter into a
Lease with Tenant for the Leased Premises; and
WHEREAS, Blue Ridge Real Estate Company
simultaneously hereto desires to enter into a Lease with Tenant for
additional property known as the “Jack Frost Lease”;
and
WHEREAS, the Parties hereto entered into
a Lease dated August 31, 2005 which Lease Agreement is incorporated
herein as though fully set forth at length.
NOW THEREFORE, in consideration of the rents, covenants and
conditions herein set forth, Landlord and Tenant do hereby
covenant, promise and agree as follows:
1.
Leased Premises
. Landlord hereby demises unto
Tenant and Tenant rents from Landlord a certain parcel of land
containing approximately 109 acres, more or less, (the " Leased
Premises " or “ Property ”) which premises
are located in Kidder Township, Carbon County, State of
Pennsylvania, together with all improvements, buildings,
structures, fixtures, parking lots, now or hereafter situated,
placed, constructed or installed on the Leased Premises, including
without limitation, any additions to, substitutions for, changes in
or replacements of, the whole or any part thereof, and including
without limitation, any improvements constructed by Tenant
(collectively, the " Improvements "). The Leased
Premises are shown on Exhibit A which is attached
hereto. The Leased Premises and the Improvements are
collectively referred to herein as the "Property" or "Leased
Premises".
2.
Term And Options To
Extend .
(a)
Initial Term . The term of this Lease shall be for
twenty-eight (28) years commencing on December 1, 2005 (“
Commencement Date ”) and ending twenty-eight (28)
years following the Commencement Date (the " Initial Term
").
(b)
Definition of "Lease Term
". The phrase " Lease Term
," as used in this Lease, shall mean the Initial Term of this
Lease.
3.
Annual Rent - Additional
Rent .
(a)
Annual Minimum Rent
. Annual minimum rent for the
Property (“ Minimum Rent ”) shall be Two Hundred
Thousand and 00/100 ($200,000.00) Dollars per annum, payable in
consecutive monthly installments of Fifty Thousand and 00/100
($50,000.00)
Dollars beginning on the first day of
January, 2006, and continuing on the first day of February March
and April without deduction or set-off, at the office of the
Landlord. In subsequent years, the entire Minimum Rent shall
be paid in four (4) consecutive monthly payments beginning on the
first day of January of each year. The amount due each month
will be twenty-five (25%) percent of the total annual Minimum Rent
due, adjusted as described in paragraph 3(d).
(b)
Additional Rent
. All amounts which Tenant is
required to pay pursuant to this Lease (other than Annual Rent),
together with any fine, penalty, interest and costs (including but
not limited to reasonable attorneys fees and costs) which may be
added for nonpayment or late payment thereof, shall constitute
additional rent (referred to herein as " Additional Rent ").
If Tenant fails to pay any Additional Rent due under this
Lease, then Landlord shall have the right to pay the same and shall
have all of the rights, powers and remedies with respect thereto as
are provided herein or by law in the case of nonpayment of Annual
Rent.
(c)
Late Charge. If any payment of Rent (including, without
limitation, all Minimum Rent and all Additional Rent) or any part
thereof to be made by Tenant to Landlord pursuant to the terms of
this Lease is not received by Landlord by the tenth (10
th ) day of any month, a late charge of Five Cents
($0.05) for each dollar so overdue shall be paid by Tenant for the
purpose of defraying the expense incident to handling such
delinquent payment. Nothing herein or in the imposition or
acceptance of a late charge by Landlord shall be construed as a
waiver of any rights of Landlord arising out of any default of
Tenant.
(d)
Rent Increase. The minimum rent shall be increased on January
1st of each year, beginning January 1, 2007. The minimum rent
shall be increased by the annual percentage increase in the United
States Bureau of Labor Statistics, Consumer Price Index for Urban
Wage Earners and Clerical Workers, All Items, Philadelphia,
Pennsylvania—New Jersey (2002-2004 = 100) as of October 31 of
each year times the prior years annual minimum rent. Each
year’s rent increase shall not exceed four (4%) percent of
the prior year’s minimum annual rent.
(e)
Net Lease . All Annual Rent and Additional Rent under
this Lease is absolutely net to Landlord. All taxes,
insurance, maintenance, repairs, including structural repairs and
replacement of HVAC systems assessments and other charges assessed,
levied or applied on, against or with respect to the Property, any
part thereof, or with respect to the use and/or operation of the
Property shall be borne and paid by Tenant.
4.
Real Estate Taxes
.
(a)
Payment . Commencing on the Effective Date, Tenant
shall pay all ad valorem real estate taxes and assessments
attributable to the Property (" Taxes ") on or before the
date that such Taxes are due. Tenant’s tax share shall
be the sum of (i) that percentage of real estate taxes which is
equal to the ratio of the land area leased by Tenant to the total
land of the Landlord for which the premises are a part of, and (i)
the real estate taxes imposed as a result of the improvements on
the premises. As of the date hereof, the parties hereto agree
that the percentage for purposes of (i) hereinabove is one hundred
percent (100%). Tenant shall pay Landlord the amount of real
estate taxes within twenty-five (25) days after Tenant receives
a
statement from Landlord indicating the
amount of real estate taxes to be paid by Tenant, unless Tenant
shall object to such calculation by Landlord, then Landlord and
Tenant shall mutually agree upon the amount of real estate taxes to
be paid by Tenant and Tenant shall pay Landlord such amount within
ten (10) days after such agreement. Tenant's liability for
Taxes shall be prorated for the years in which this Lease commences
and terminates based on the number of days Tenant occupies the
Leased Premises during such years.
(b)
Challenge . Should either Landlord or Tenant initiate
proceedings to contest the validity or amount of any Taxes levied
against the Property, the other party will cooperate in such
proceedings and should such proceedings be successful, Tenant shall
be entitled to any tax refund or future abatement, after deducting
there from payment of all reasonable out-of-pocket expenses
incurred by Landlord in any such proceeding, with any abatement or
refund of real estate taxes to be shared by the Landlord and Tenant
in proportion to the adjustment attributable to the Property, to
the benefit of the Tenant, and to other property included in the
same tax bill or assessment lot, retained by the Landlord, to the
benefit of the Landlord.
5.
Condition of Title and the
Property . TENANT
ACKNOWLEDGES THAT LANDLORD HAS NOT MADE ANY REPRESENTATION OR
WARRANTY AS TO THE CONDITION, HABITABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR USE OR OTHERWISE WITH RESPECT TO THE
PROPERTY, THE TITLE OR ZONING OF THE PROPERTY, THE STREET OR
STREETS, SIDEWALKS, CURBS AND ACCESS WAYS ADJOINING THE PROPERTY,
THE COMMON AREAS, THE SURFACE AND SUBSURFACE CONDITIONS THEREOF,
AND THE PRESENT USES AND NON-USES THEREOF. Tenant represents
that it has examined the Property, the title thereto, the zoning
thereof, the street or streets, sidewalks, curbs and access ways
adjoining them, the Common Areas, the surface and sub-surface
conditions thereof, the physical condition thereof and the present
uses and non-uses thereof, and Tenant accepts them in the condition
or state in which they now are, or any of them now is, without
representation, covenant, or warranty, express or implied, in fact
or in law, by Landlord and without recourse to Landlord, as to the
title thereto, encumbrances thereon, appurtenances, the nature,
condition, or usability thereof or the use or uses to which the
same or any part thereof may be put. Tenant hereby releases
Landlord from and waives any and all claims Tenant now has or may
at any time in the future have with respect to the condition of
title and the Property as of the date of this Lease.
6.
Insurance
.
(a)
Liability Insurance
. Tenant shall maintain, from the
Effective Date of this Lease and during the entire term of this
Lease and any extension thereof, a commercial general liability
policy of public liability and property damage insurance insuring
the Property against any and all claims for personal injury,
including property damage in, on or about the Leased Premises with
a combined single limit per occurrence of not less than Ten Million
($10,000,000.00) Dollars, provided, however, if the premium
for the liability insurance hereunder shall exceed six percent (6%)
of the average total gross revenues of the last three ski seasons
of Tenant, then Tenant shall maintain an amount of liability
insurance which Five Hundred Thousand ($500,000.00) Dollars of
premium would purchase or 6% of the gross
revenues whichever is greater. Such
policy shall name Landlord and Landlord's mortgagee, if any, (and
any Leasehold Mortgagee at its request) as additional insured, and
shall contain a clause that the insurer will not cancel or change
the insurance without first giving Landlord, Landlord's Mortgagee,
or any Leasehold Mortgagee, thirty (30) days prior written notice.
The deductible on the aforesaid policy shall be no less than
Twenty-Five Thousand ($25,000.00) Dollars. The insurance
company of Tenant shall be rated A or better on the A. M. Best
rating and shall be a company doing business in Pennsylvania.
The primary limit for the policy shall be One Million Dollars
at all times. The excess limit shall be Nine Million Dollars.
All policies shall be on an occurrence basis not on a claims
made basis. All policies shall name Landlord or Landlord's
Mortgagee as an additional insureds. All policies shall name
any Planned Community, Homeowner's Association, Condominium Project
or Condominium Association whose property is effected by this Lease
or any easements, rights of way, roads, or utilities rights in
favor of Tenant as additional insured. All changes in
coverage, limits and/or carriers are to be approved by Landlord at
least sixty (60) days prior to any change.
(b)
All-Risk Insurance
. Tenant shall maintain, from the
Effective Date of this Lease and during the entire term of this
Lease and any extension thereof, a policy of “causes of loss
– special form” all-risk property damage insurance upon
the Improvements in an amount equal to the full replacement value
of the Improvements above the foundation walls. The policy of
insurance pursuant to this Section 6(b) shall insure and be payable
to Tenant and shall provide for release of insurance proceeds to
Tenant for restoration of loss. Such policy may also name
Landlord, Landlord's mortgagee, or any Leasehold Mortgagee, upon
its request, as an additional insured as its interest may appear,
by standard mortgagee clause if obtainable. If any Leasehold
Mortgagee is named as an additional insured, such policy or
policies shall provide that the policy will not be canceled except
after thirty (30) days written notice to the Leasehold Mortgagee.
(c)
All risk and/or property insurance
provided by Tenant shall be considered "Fire Legal" Liability.
Tenant shall specifically provide Three Million Dollars in
limit coverage for the Ski Lodge and Rental Shop. All
policies shall be on an occurrence basis not on a claims made
basis. All policies shall name Landlord and Landlord's
Mortgagee as additional insureds. The insurance company of
Tenant shall be rated A or better on the A.M. Best rating and shall
be a company doing business in Pennsylvania. A deductible of
no less then Twenty-Five Thousand ($25,000.00) Dollars shall
be required on the policy.
(d)
Every policy set forth above in section
a, b and c above shall provide Terrorist coverage.
(e)
General .
(1)
The insurance coverages required
hereunder shall be carried with an insurance company or companies
licensed to do business in the State of Pennsylvania. Such
insurance may be carried under a blanket policy or policies
covering other liabilities and locations of the Tenant. On or
before December 15 of each year, Tenant shall furnish Landlord
evidence to indicate that the foregoing insurance is in full force
and effect and that the premiums therefor have been paid and all
renewal policies shall be delivered to Landlord within ten (10)
days after receipt of same by Tenant.
(f)
Tenant shall maintain Liquor Liability
Insurance in an amount of no less than One Million Dollars
($1,000,000.00), which insurance shall name Landlord as an
additional insured.
7.
Representations, Warranties and
Covenants of Tenant .
Tenant represents, warrants and covenants to Landlord
that:
(a)
Tenant is a Missouri corporation duly
organized and in good standing in the state of its incorporation,
which has duly qualified as a foreign corporation in the State of
Pennsylvania. Tenant is a wholly-owned subsidiary of Peak
Resorts, Inc., a Missouri corporation. Tenant has the legal
power, right and authority to enter into this Lease and the
instruments to be executed by Tenant pursuant to this Lease, and to
consummate the transactions contemplated hereby.
(b)
BBJF LQ, Inc. is a Pennsylvania
corporation duly organized and in good standing in the state of its
incorporation. BBJF LQ, Inc. is a wholly-owned
subsidiary of Tenant. Tenant has the legal power, right and
authority to enter into this Lease and the instruments to be
executed by Tenant pursuant to this Lease, and to consummate the
transactions contemplated hereby.
(c)
All requisite action has been taken by
Tenant in connection with Tenant's execution of this Lease and the
instruments to be executed by Tenant pursuant to this Lease, and
the consummation of the transactions contemplated
hereby.
(d)
The individuals executing this Lease and
the instruments to be executed by Tenant pursuant to this Lease on
behalf of Tenant have the legal power, right and actual authority
to bind Tenant to the terms and conditions of this Lease and such
instruments.
8.
Landlord's Representations and
Warranties .
Landlord represents, warrants and covenants to Tenant
that:
(a)
Landlord has the legal power, right and
authority to enter into this Lease and the instruments to be
executed by Landlord pursuant to this Lease, and to consummate the
transactions contemplated hereby.
(b)
All requisite corporate action has been
taken by Landlord in connection with Landlord's execution of this
Lease and the instruments to be executed by Landlord pursuant to
this Lease and the consummation of the transactions contemplated
hereby.
(c)
The individuals executing this Lease and
the instruments to be executed by Landlord pursuant to this Lease
on behalf of Landlord, have the legal power, right and actual
authority to bind Landlord to the terms and conditions of this
Lease and such instruments.
(d)
Neither the execution of this Lease nor
the consummation of the transactions contemplated hereby shall
result in a breach of or constitute a default under any
agreement, document, instrument, or other
obligation to which Landlord is a party or by which Landlord may be
bound, or under any law, statute, ordinance, rule, governmental
regulation or any writ, injunction, order or decree of any court or
governmental body, applicable to Landlord or to the Property or
result in the acceleration of any encumbrance pertaining to the
Property.
(e)
Except as provided on Exhibit
B , there is no claim, action, litigation, arbitration,
material dispute or other proceeding pending against Landlord which
relates to the Property, the Leased Premises or the transactions
contemplated hereby except as disclosed in writing to Tenant and,
to Landlord's actual knowledge, there is currently no governmental
investigation, threatened litigation or arbitration proceedings to
which Landlord is, or would be, a party which relates or would
relate to the Property or the Leased Premises.
(f)
No attachments, execution proceedings,
assignments for the benefit of creditors, insolvency, bankruptcy,
reorganization or other proceedings are pending or threatened
against Landlord nor are any of such proceedings contemplated by
Landlord.
(g)
There are no pending or, to Landlord's
actual knowledge, contemplated condemnation or annexation
proceedings affecting the Property or the Leased Premises or any
part thereof.
(h)
Landlord has not received any notice of
any violations, and to Landlord's actual knowledge, without
inquiry, the Property and the Leased Premises is not in violation
of any federal, state or local law, ordinance or regulation
relating to Hazardous Materials ("Hazardous Materials" ),
industrial hygiene or the environmental conditions on, under or
about the Property or the Leased Premises including, but not
limited to, soil and ground water condition except as provided on
Exhibit "N" . Hazardous Materials shall mean
any flammable explosives, radioactive materials, hazardous wastes
or substances, toxic wastes or substances and other related
materials including without limitation any substances defined as or
included in the definition of "hazardous substances", "hazardous
wastes", "hazardous materials" or "toxic substances" under any
applicable federal, state or local laws or regulations.
(i)
Landlord has not received any notice of
any violation, and to Landlord's actual knowledge, without inquiry,
the Property and the Leased Premises are not in violation of any
law, ordinance, regulation, order or requirement applicable to the
Property or the Leased Premises including without limitation,
requirements imposed under any recorded covenants, conditions,
restrictions, easements or other rights affecting the Property or
the Leased Premises.
(j)
Landlord shall not, after the execution
hereof, either voluntarily or by operation of law, allow any lien
or encumbrance to be placed of record against all or any portion of
the Property or the Leased Premises or otherwise burden or cloud
title to the Property or the Leased Premises if such lien or
encumbrance would interfere with Tenant’s operation as a ski
resort.
(k)
There being no leases of the Property
existing, Landlord shall not, after the execution hereof and while
Tenant is not in default under this Lease, enter into any new
leases for the Property or any portion thereof, or otherwise grant
or convey any interest or occupancy
right to any party other than Tenant,
without first receiving Tenant's prior written consent, which
consent may be granted or withheld in Tenant's sole and absolute
discretion, except for leases, interest or occupancies associated
or related to Landlord's developments.
(l)
Prior to the Commencement Date, Landlord
shall not make any further additions or modifications to the
Property other than normal maintenance and repair and except for
additions or modifications in conjunction with Landlord's
developments.
(m)
Landlord is a duly constituted and
validly existing corporation under the laws of the State of
Pennsylvania, duly qualified to do business in the state in which
the property is located, and has the full power to carry out the
transactions contemplated by this Lease.
(n)
It is not necessary, under applicable
law, that the Lease and/or a "short form" of lease be recorded for
the Lease to be effective.
(o)
This Lease does not violate or conflict
in any way with the terms of any other lease applicable to the
Property or the terms of any reciprocal operating agreement, cross
easement agreement, restrictive covenants, or any other
document.
9.
Repairs and
Maintenance .
(a)
Throughout the Term, Tenant, at its sole
cost and expense, shall make or cause to be made all necessary or
appropriate repairs, or replacements and renewals as may be
required to maintain the Property in a good condition
(collectively, "Repairs" and the making of any Repairs being
hereafter referred to as "Repair" ). All Repairs shall
be performed in a good, substantial and workmanlike manner.
Repair shall include but not be limited to all structures and
in ground infrastructure on, in or under the Property including
structural repairs and replacements to (i.e., roof, HVAC) wells,
water lines, sewage lines, utility lines. If Landlord for its
own exclusive use takes over the operation of any wells on the
Property, then Landlord shall be solely responsible for the cost of
repairs or replacement of such wells.
(b)
Landlord shall not be required to furnish
any services or facilities or to make any Repairs in, under, on or
about the Property or any part thereof, Tenant hereby assumes the
full and sole responsibility for all Repairs to, and for the
condition, operation, maintenance and management of, the Property
as of the Effective Date and through and during the
Term.
(c)
Tenant’s contractors shall, prior
to the commencement of their work and not later than ten (10) days
after the execution of their respective contracts but before any
work is done on the Property, file stipulations against lien, which
waivers shall be effective to preclude the filing of any
mechanic’s liens on account of the work to be performed by
any of Tenant’s contractors, subcontractors or materialmen.
Upon payment to each contractor, subcontractor, or
materialman, a waiver of liens shall be signed by each, providing
proof of payment for services or materials furnished to the
Property.
10.
Development of the
Property .
(a)
Scope of Development
. Tenant will initially improve the
Property by constructing improvements necessary for the operation
of a ski resort on the Property, the scope of which shall be
determined by Tenant after approval of Landlord. Tenant shall
deliver to Landlord a scope or plan of improvement for review by
Landlord. Landlord shall review and approve or disapprove of
the Tenant's proposal within 45 days of submission of same by
Tenant to Landlord. Tenant shall perform all Improvements in
compliance with all applicable laws. To the extent that
Tenant commences any improvements, Tenant shall complete it with
reasonable diligence and within a reasonable period. Tenant
shall pay for all Improvements when and as required by the parties
that perform such improvements. Tenant shall timely obtain
and promptly deliver to Landlord all approvals and permits
necessary or appropriate for any improvements. All
Improvements that Tenant constructs on the Property shall become
part of the Property.
(b)
Plans and Specifications
. To the extent that Tenant obtains plans and
specifications or surveys (including working plans and
specifications and “as-built” plans and specifications
and surveys) for any improvements, Tenant shall promptly give
Landlord a copy, subject to the terms of any agreement between
Tenant and the applicable architect, engineer, or surveyor.
Tenant shall exercise reasonable efforts to cause its
agreements with such professionals to permit these deliveries,
which are for Landlord’s information only except to the
extent, if any, this Lease otherwise expressly states.
(c)
Applications and Filings.
Upon Tenant’s request,
Landlord shall, without cost to Landlord, promptly join in and
execute any application or filing as Tenant may from time to time
request, provided that: (1) such application or filing is in
customary form and imposes no material obligations (other than
obligations that are ministerial in nature or merely require
compliance with law) upon Landlord; and (2) no uncured Event of
Default exists.
(d)
Other Cooperation with
Approvals .
Promptly upon Tenant’s request and without charge
to Tenant, Landlord shall furnish all information in its possession
that Tenant shall reasonably request and that is required in
connection with the filing and prosecution of any applications and
filings.
(e)
Landlord Nonappearance
. Landlord shall not appear
in opposition to any action or application brought, sought, or
defended by Tenant before any Government agency arising out of any
application or filing consistent with this Lease.
(f)
Tenant Nonappearance.
Tenant shall not appear in
opposition to any action or application brought, sought or defended
by Landlord before any Governmental agency arising out of any
application or filing consistent with this Lease, or the
development by the Landlord of other properties of Landlord, nor
will Tenant interfere with Landlord’s development plans in
any way.
11.
Utilities
.
(a)
Landlord covenants and agrees that, as of
the Effective Date, propane, electric, telephone, water and sewer
are available to the Leased Premises, in terms of
infrastructure availability, subject to
the Tenant being responsible for any connection, installation or
activation costs associated with obtaining such utilities services
from the vendors involved; provided, further, Tenant shall pay as
additional rent all water and sewer charges assessed against it by
Landlord, or their assigns. These assessments will include
Tenant’s share of reserve costs for future Improvements,
repair and maintenance of the water and sewer facilities.
These costs will be assessed pursuant to the proposed Water
Agreement between Big Boulder Corporation, Midlake Homes Homeowner
Associations, Blue Heron Homeowners Association and Laurelwoods
Homeowners Association and others, which agreement may be modified.
Tenant acknowledges receipt and approval of said proposed
Agreement.
(b)
Landlord operates, through its
subsidiaries, a sewage treatment plant. Landlord shall retain
the right to discharge, at no cost to Landlord, the effluent of the
sewage treatment plant on the Property by discharging the effluent
onto the Property at any time, including the ski season, by
connecting said effluent to the snow-making facilities of Tenant
and discharging the effluent through the snow-making facilities of
Tenant. Tenant will cooperate with Landlord or any of its
subsidiaries to comply with D.E.P. regulations for the discharge of
the effluent onto the Leased Premises.
12.
Governmental
Regulations . Tenant
shall observe and comply with all requirements, rules, orders and
regulations of the federal, state and municipal governments or
other duly constituted public authority affecting the Property,
whether now existing or existing in the future. Tenant shall
have the right, however, to contest in good faith, without cost to
Landlord, the validity or application of any such rule, order or
regulation required to be complied with by Tenant in accordance
with the foregoing, and may postpone compliance therewith so long
as such contest does not subject Landlord to criminal prosecution
for non-compliance therewith and further provided Tenant promptly
pays all fines, penalties and other costs imposed on Landlord as a
result of such non-compliance by Tenant Provided, nothing
contained herein shall interfere with or inhibit progress of any of
Landlord's development plans. Landlord will cooperate with
Tenant in connection with any such contest at no cost to
Landlord.
13.
Exculpation
. Anything to the contrary in this
Lease notwithstanding, the covenants contained in this Lease to be
performed by Landlord shall not be binding personally, but instead,
said covenants are made for the purpose of binding only the fee
simple estate which Landlord owns in the Leased
Premises.
14.
Damage and
Destruction .
(a)
Obligation to Rebuild
. In the event that, at any time
during the Lease Term, the Improvements located on the Property
shall be damaged or destroyed (partially or totally) by any
casualty Tenant shall, at its expense, promptly and with due
diligence, repair, rebuild and restore the same, as nearly as
practicable, to the condition existing just prior to such damage or
destruction, provided the repaired, rebuilt or replaced premises
will have a value not less than its value of the damaged or
destroyed structures just prior to said loss.
(b)
No Release of Tenant’s
Obligations . No
destruction of, or damage to the Property or Improvements, or any
parts thereof, by fire or any other cause shall permit Tenant
to
surrender or terminate this Lease or
shall relieve Tenant from its obligations to pay full Annual Rent
and Additional Rent under this Lease or from any of its other
obligations under this Lease, and Tenant waives any rights now or
hereafter conferred on it by statute or otherwise to quit or
surrender this Lease or the Property or any suspension, diminution,
abatement or reduction of rent on account of any such damage or
destruction.
15.
Eminent Domain
.
(a)
Improvements/Ingress and
Egress . In the event
that the points of ingress and egress to the public or private
roadways serving the Property, shall be materially impaired by a
public or quasi-public authority for a period of ten (10)
consecutive days during the ski season, so as to render, in
Tenant's reasonable discretion, the Leased Premises unsuitable for
its intended purpose, Tenant shall have the option to terminate
this Lease as of the date Tenant shall be deprived or denied
thereof. In the event that more than ten percent (10%) of the
Improvements or the parking areas on the Property shall be
expropriated by public or quasi-public authority, Tenant shall have
the option to terminate this Lease as of the date Tenant shall be
dispossessed from the part so expropriated by giving written notice
to Landlord of such election so to terminate within ninety (90)
days from the date of such dispossession.
(b)
Restoration . In the event of an expropriation of any
portion of the Improvements or the parking areas on the Leased
Premises, and if this Lease shall not be terminated as provided
above, this Lease shall continue as to that portion of the Leased
Premises which shall not have been expropriated or taken, and
Tenant shall, subject to available condemnation proceeds, promptly
and with due diligence, restore the affected portion of the
Improvements, as nearly as practicable, to a complete unit of like
quality and character as existed just prior to such expropriation.
(c)
Termination . In the event this Lease shall be terminated
pursuant to this Section 15, any Annual Rent, Additional Rent and
any other charges paid in advance with respect to a period after
the effective date of termination shall be refunded to Tenant.
Nothing herein contained shall be construed as preventing
Tenant from being entitled to any separate award made to Tenant for
the taking of any personal property, inventory or trade fixtures of
Tenant, or from claiming its award directly against the
condemnor.
(d)
Condemnation Award - Lease
Not Terminated . In the
event of a condemnation of any portion of the Improvements and if
this Lease is not terminated, Tenant shall be entitled to that
portion of the award paid by the condemning authority (after
payment of expenses incurred in connection with collecting the
same) attributable to that portion of the condemned Improvements
made by or on behalf of Tenant plus the costs of restoring the
remaining portion of the Improvements.
(e)
Condemnation Award - Lease
Terminated . In the
event of a condemnation and this Lease is terminated as herein
provided, the award paid by the condemning authority (after payment
of expenses incurred in connection with collecting the same) shall
be allocated as follows:
(1)
First, to the extent the award is
allocable to the Improvements made by or on behalf of Tenant and/or
the leasehold estate under this Lease, an amount shall be paid to
the Leasehold Mortgagee, such amount not to exceed the balance due
on any note secured by the Leasehold Mortgage or the amount of the
value of Tenant’s leasehold estate in the Property as of the
date of the condemnation; and
(2)
Second, to Tenant in an amount equal to
the value of Tenant’s leasehold estate, if any, as determined
in the proceeding involved with the condemnor, in the Property as
of the date of the condemnation less the amount received by Tenant
under Section 15(e)(1) above; and
(3)
Third, the Landlord shall receive the
balance of the award.
16.
Use, Assignment and
Subletting .
(a)
Use . The Property and the Leased Premises shall be
used as a ski resort and any use related directly thereto.
The Property and the Leased Premises may not be used for
other purposes, including conventions, concerts, entertainment
performances of any nature, markets of any sort, or similar
activities without compliance with any applicable governmental
permits and/or approvals; and without the prior, written consent of
the Landlord, which may be withheld in Landlord's sole discretion,
provided, however, Tenant shall be able to annually hold the Blues
Festival, Irish Festival and the Arts and Crafts
Festival.
(1)
Assignment . During the Lease Term, this Lease may be
assigned or subleased only if the conditions set forth in Section
16(a)(1)(a)-(d) have been satisfied in Landlord’s reasonable
determination or waived by Landlord. Landlord shall make such
determination within thirty (30) days of Landlord’s receipt
of information reasonably necessary to make such
determination.
a.
Tenant is not in default under the Lease,
or any default will be cured by the Tenant of the proposed assignee
or subtenant as a condition of the approval;
b.
The proposed assignee or subtenant (or
its principals) has demonstrated expertise in owning and operating
property similar in character and size and operation to the
Property, as measured against the operations of the Property by the
Tenant for the three lease years preceding the proposed
assignment;
c.
The proposed assignee or subtenant (or
its principals) shall have the ability to meet all the financial
conditions of the Lease; and
d.
Proof that any Leasehold Mortgage
referred to in Section 22 shall be fully paid, satisfied
and/or assumed by the Tenant and/or proposed assignee or subtenant
(or its principals) in a manner which will assure that the
Tenant’s fee simple interest will be encumbered only in a
manner consistent with the provisions of this Lease applicable to
the Tenant immediately before the proposed assignment.
In the event that conditions (a)-(d)
above have been either satisfied in Landlord’s reasonable
determination or waived by Landlord, then immediately upon the
assignee’s assumption of all of Tenant’s obligations
under this Lease, Tenant shall be released from all liability under
this Lease accruing on or after the date of such assignment.
The foregoing release shall be effective upon the date of the
assignment, but Landlord agrees to provide written evidence thereof
reasonably requested by Tenant. No sublease by Tenant shall
affect any obligations of Tenant or rights of Landlord under this
Lease, all of which shall continue in full force and effect
notwithstanding any Sublease. If Tenant agrees to assign this
lease and enters into an Agreement of Assignment of this Lease,
then Landlord shall be provided a copy of said Agreement and shall
have fifteen (15) days from the receipt of the Agreement to
exercise the right to be the assignee under said Agreement upon the
same terms and conditions as set forth in such Agreement. If
the Landlord notifies the Tenant of its intention to exercise this
first right of refusal, its notice, together with the underlying
proposed Agreement of Assignment, shall constitute an Agreement of
Assignment. If Landlord does not exercise this right within
said fifteen (15) days, then Landlord shall have waived said right
of refusal, except as to future assignment by the
Assignee.
(b)
Assignment and Subleasing
. Without the prior consent of Landlord,
Tenant shall have the right from time to time during the Lease
Term, to mortgage this Lease and the leasehold estate hereby
created. The execution and delivery of a mortgage shall not
be deemed to constitute an assignment or transfer of this Lease nor
shall the holder of any mortgage, as such, be deemed an assignee or
transferee of the Lease so as to require such holder to assume the
performance of any of the covenants or agreements on the part of
Tenant to be performed hereunder, except to the extent provided in
Section 22. Promptly after execution and delivery of a
mortgage, Tenant shall send to Landlord a copy of all relevant
documentation delivered in connection therewith. In the event
of a sublease or mortgage by Tenant pursuant to this paragraph,
Tenant shall remain liable and responsible under this Lease.
Tenant shall notify Landlord of the identity of any
mortgagee, but Tenant's failure to so notify the Landlord shall not
be deemed a default under this Lease, provided, however, that any
benefits of Section 22 to the Leasehold Mortgagee shall not be
deemed effective until the Tenant shall notify the Landlord of the
identity of any mortgagee. Any mortgage of Tenant’s
interest under this Lease without notification to Landlord shall
not be effective as to Landlord and Landlord shall not be bound
thereby until receipt of such notification.
17.
Tenant’s Compliance with
Covenants and Restrictions . Tenant covenants that, during the term of
this Lease and any extension thereof, it shall comply with the
covenants and restrictions of record affecting the Property.
Landlord covenants that Landlord will not enter into any
agreement imposing covenants and restrictions of record affecting
the Property unless Landlord obtains Tenant's prior written
approval except those already described to Tenant in Landlord's
existing and proposed development plans shown to Tenant or those
necessary for Landlord's development projects.
18.
Ingress and Egress
. Landlord is the owner of Big
Boulder Drive which provides access to the Property.
Tenant shall pay its proportionate share of the expenses for
snow removal, road maintenance and road repair of all access roads
to the Property including Big Boulder Drive. The
proportionate share of said expenses shall be as determined by
Landlord.
Tenant shall also pay its proportionate
share of a reserve for future road maintenance, repair and road
improvements. A proposed Agreement for allocation of costs
has been provided to Tenant. Tenant acknowledges receipt and
approval of said Agreement. Tenant shall be responsible for
the repair, replacement and maintenance of all parking areas on the
Property, or off the Property utilized by Tenant.
19.
Liquidated Damages
.
(a) Tenant shall have the right to
terminate this lease at any time after April 1, 2009. Tenant
shall exercise this right by delivering written notice to Landlord
via United States Post Office first class mail and certified mail,
return receipt requested. The date postmarked on the envelope
addressed to Landlord shall constitute the “termination
date”.
In
the event that Tenant exercises this right to terminate prior to
May 1 of any year, then Tenant shall pay to Landlord all accrued
rent through the termination date and liquidated damages equal to
Two Hundred Thousand and 00/100 Dollars ($200,000.00).
In the event that Tenant exercises this
right to terminate between May 1 and August 1 of any year, then
Tenant shall pay to Landlord all accrued rent through the
termination date and liquidated damages equal to Three Hundred
Thousand and 00/100 Dollars ($300,000.00).
In the event that Tenant exercises this
right to terminate after August 1 of any year, then Tenant shall
pay to Landlord all accrued rent through the termination date and
liquidated damages equal to Four Hundred Thousand and 00/100
Dollars ($400,000.00). All payments due by Tenant will be
within (60) days of the termination date.
Landlord and Tenant have agreed to the
liquidated damages herein set forth in order to avoid extended
litigation following a termination by Tenant, recognizing that
Landlord’s actual damages in such event are not susceptible
to precise calculation and acknowledgement that the liquidated
damages herein set forth constitute fair and equitable compensation
to Landlord in such event.
(b)
Landlord shall have the right to
terminate this lease at any time. Landlord
shall exercise this right by delivering
written notice to Tenant via United States Post Office first class
mail and certified mail, return receipt requested. The date
postmarked on the envelope addressed to Tenant shall constitute the
“termination date”.
In the event Landlord exercises this
right to terminate prior to December 1, 2010, then Landlord shall
pay to Tenant liquidated damages in the amount of Seven Hundred
Fifty Thousand and 00/100 Dollars ($750,000.00).
In the event Landlord exercises this
right to terminate after December 1, 2010, then Landlord shall pay
to Tenant liquidated damages in the amount of Five Hundred Thousand
and 00/100 Dollars ($500,000.00).
In addition to the above, Landlord shall
pay to Tenant the depreciated value as of the termination date of
all Improvements made by Tenant which were approved by Landlord.
The depreciation value shall be the value of the Improvement
less the depreciation as agreed upon by Landlord and Tenant prior
to the Improvement being erected or placed in service.
Depreciation of the assets shall be by means of straight-line
depreciation of the value of the assets over a period of time
agreed to by Landlord and Tenant prior to the erection of the asset
or the asset being placed in service.
All payments due by Landlord under this
paragraph will be paid to Tenant within sixty (60) days of the
receipt by Landlord of the statement of depreciated value of
Improvements received by Landlord from Tenant.
Landlord and Tenant have agreed to the
liquidated damages herein set forth in order to avoid extended
litigation following a termination by Tenant or Landlord,
recognizing that Landlord’s or Tenant's actual damages in
such event are not susceptible to precise calculation and
acknowledgement that the liquidated damages herein set forth
constitute fair and equitable compensation to Landlord or Tenant in
such event.
A termination of this lease shall also
act as a termination of the Jack Frost Lease. If the Jack
Frost Lease is voluntarily terminated by Blue Ridge Real Estate
Company pursuant to Section 19 of said Jack Frost Lease, Tenant
shall have the option of continuing this lease and not having this
lease terminated by Blue Ridge Real Estate Company’s
termination.
The provisions of subparagraph 19(b)
shall not apply to termination of the Lease as a result of Tenant's
breach of the Lease.
20.
Bankruptcy
. If a petition of bankruptcy or
reorganization shall be filed by or against Tenant, Tenant shall
become bankrupt, Tenant shall make a general assignment for the
benefit of creditors, Tenant shall admit in writing its inability
to pay its debts as they become due, or in any proceeding based
upon the insolvency of Tenant, a receiver or trustee of all of the
property of Tenant shall be appointed and shall not be discharged
within ninety (90) days after such appointment, then Landlord may
terminate this Lease by giving written notice to Tenant of its
intention to do so; provided, however, neither bankruptcy,
insolvency, reorganization, an assignment for the benefit of
creditors nor the appointment of a receiver or trustee shall affect
this Lease or permit its termination so long as the covenants on
the part of Tenant to be performed shall be timely performed by
Tenant, or someone claiming under it.
21.
Covenant of Title
.
(a)
Quiet Enjoyment
. Landlord covenants, represents
and warrants that it has full right and power to execute and
perform this Lease and to grant the estate demised herein and that
Tenant, on payment of the Annual and Additional Rent and
performance of the covenants and agreements hereof, shall peaceably
and quietly have, hold and enjoy the Leased Premises and all
rights, easements, appurtenances and privileges belonging or in any
way appertaining thereto during the Lease Term without molestation
or hindrance of any person whomsoever, and if, at any time during
the term hereby demised the title of Landlord shall fail or it be
discovered
that its title shall not enable Landlord
to grant the term hereby demised, and if Landlord fails to commence
the cure of such defect promptly following notice from Tenant and
thereafter diligently prosecutes the same to completion, then
Tenant shall have the option, at Landlord’s expense, to
correct such defect or if such defect is not reasonably subject to
cure, to annul this Lease.
(b)
Evidence of Title
. Landlord further covenants,
represents and warrants that it is seized of an indefeasible estate
in fee simple or has a good and marketable title to the Property
(including, without limitation, the Leased Premises), free and
clear of any liens, encumbrances, restrictions and violations (or
claims or notices thereof), except public utility or private
utility easements and covenants and restrictions of record not
impairing Tenant's use of the Leased Premises, real estate taxes
and special assessments not yet due and payable, and the lien of
the mortgage or mortgages specifically identified on the attached
Exhibit C . Landlord shall, without expense to
Tenant and within thirty (30) days after the Effective Date,
furnish to Tenant agreements wherein each holder of any mortgage
lien against the Leased Premises shall consent to this Lease and
warrant that Tenant's possession and right of use under this Lease
in and to the Leased Premises shall not be disturbed by such holder
unless and until Tenant shall breach any of the provisions hereof
and this Lease or Tenant's right to possession hereunder shall have
been terminated in accordance with the provisions of this
Lease.
22.
Leasehold Mortgage
.
(a)
Tenant shall have the unrestricted right
at any time and from time to time without Landlord's consent to
mortgage the Property and the Leased Premises, including the
Improvements, and its leasehold interest under this Lease (but not
Landlord's fee interest), subject however to the limitations
hereinafter set forth (including Landlord's prior security interest
described in Paragraph 26 (b) below). Any such mortgage shall
be subject and subordinate to the rights of Landlord hereunder.
A mortgage of the Property and/or Tenant's leasehold interest
under this Lease is herein referred to as a "Leasehold
Mortgage," and the party holding the Leasehold Mortgage
(including any affiliate of such party) the "Leasehold
Mortgagee."
(b)
No Leasehold Mortgagee shall be entitled
to enjoy the rights or benefits mentioned herein, nor shall the
provisions of this Lease pertaining to Leasehold Mortgages be
binding upon Landlord, unless Landlord shall have been given
written notice of the name and address of the Leasehold Mortgagee
together with a true and correct copy of the Leasehold Mortgage,
the note secured thereby, the security agreement related to any
personal property located on or associated with the Property,
financing statements related to any personal property located on or
associated with the Property, all as related to any obligations to
the Leasehold Mortgage, plus such portions of any loan agreement
and/or other written agreements between the Leasehold Mortgagee and
Tenant which pertain to the direct use, maintenance, and/or
operations of the Property; and, during the Term of the Lease, any
modifications or amendments to any of the above referenced specific
documents.
(c)
So long as such Leasehold Mortgage shall
remain in effect, the following provisions shall apply:
(1)
Landlord shall serve a copy of any
notice, including a notice of default, required to be served on
Tenant under this Lease upon such Leasehold Mortgagee at the
address provided in the notice referred to in subsection (b)
hereof, and no notice by Landlord to Tenant hereunder shall be
deemed to have been duly given unless and until a copy thereof has
been served on the Leasehold Mortgagee.
(2)
Upon the occurrence of an event of
default, Landlord shall take no action to terminate this Lease
without first giving to the Leasehold Mortgagee written notice
thereof and, in the event of a monetary default, a period of
fifteen (15) days after written notice to cure such default, or in
the case of a non-monetary default, a period of ninety (90) days
within which either (i) to obtain possession of the Leased
Premises (including possession by a receiver) or (ii) to
institute, prosecute and complete foreclosure proceedings or
otherwise acquire Tenant's interest under this Lease, or
(iii) to cure such default. Such Leasehold Mortgagee,
within ninety (90) days after obtaining possession or acquiring
Tenant's interest under this Lease, (the "Leasehold Mortgage Cure
Period"), shall be required to cure all non-monetary defaults
reasonably susceptible of being cured by such Leasehold
