EXHIBIT 10.1
LEASE
between
Kampgrounds of America,
Inc.,
a Montana Corporation
(“Landlord”)
and
Tower Park Marina Investors,
L.P.
a California Limited Partnership
(“Tenant”)
Marina Facility
Tower Park Marina
Lodi, California
LEASE
1. Basic Terms .
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(a)
Landlord’s Name and Address
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Kampgrounds of America, Inc.,
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a Montana
Corporation
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P.O. Box
30558
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Billings, MT
59114
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Attn: Scott
Cory
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Telecopy No:
(406) 254-7467
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(b)
Tenant’s Name and Address :
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Tower Park
Marina Investors, L.P., a California limited partnership
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c/o Westrec
Marina Management, Inc.
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16633 Ventura
Boulevard
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Sixth
Floor
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Encino,
California 91436
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Attn: William
Anderson
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Telecopy No:
(818) 907-1104
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(c) Premises :
The areas indicated on Exhibit A attached hereto, located at
Tower Park Marine Resort (the “Property.”) The Premises
include all fixtures and improvements in the area(s) described. The
“Property” shall include all of the real property
purchased by Landlord from Tenant on
, 2007.
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(d) Term :
Commencing upon the date the Property is acquired by Landlord and
ending in ten years, unless extended or terminated earlier in
accordance with this Lease.
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(e)
Basic Rent : $25,000/month
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(f) Percentage
Rent : If Tenant constructs and operates the future
improvements as described in Section 35 below, then Tenant
shall pay as Percentage Rent an amount equal to five percent
(5%) of the gross receipts generated by the new
improvements.
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(g) Master
Landlord’s Concession Fees : See
Section 3.2
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(h) Percentage
Rent : Waived
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(i) Security
Deposit : Waived
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(j) Business
to be conducted on Premises : A full service marina operation,
including, fuel sales, wet and dry boat storage, transient docking,
boat trailer storage, boat repair and maintenance, boat launch, and
any other related marina services.
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(k) Common Area
Maintenance Charge : Waived
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(l) Utilities
are to be paid by Tenant or Landlord as indicated :
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Water
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Tenant
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Electricity
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Tenant
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Alarm System
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Tenant
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Gas
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N/A
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Sewer
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Tenant
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Telephone
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Tenant
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Garbage
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Tenant *
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* Tenant
will be solely responsible for the removal of any Hazardous
Material Tenant generates.
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(m) Date of Lease :
, 2007
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(n) Master
Landlord : California State Lands Commission
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2. Premises .
2.1 Real Property . Landlord
hereby leases to Tenant, and Tenant hereby leases from Landlord the
Premises. Tenant acknowledges that Tenant has examined the Premises
prior to executing this Lease and agrees that the Premises are in
acceptable working order and repair and are suitable for
Tenant’s intended purpose. Tenant accepts the Premises AS IS
and understands that Landlord makes no express or implied
warranties of habitability, suitability, quality, condition,
merchantability or fitness for any particular purpose or use
concerning the Premises, and Tenant hereby waives all such
warranties.
2.2 The Master Lease . Tenant
acknowledges that Landlord’s right to occupancy and control
of portions of the Property has been granted pursuant to a lease
(the “Master Lease”) from Master Landlord. The portion
of the Premises indicated on Exhibit A is located on the
portion of the Property leased from Master Landlord. All of
Tenant’s rights hereunder are subject and subordinate to the
provisions of the Master Lease. Tenant has received a complete copy
of and reviewed the Master Lease. Landlord will promptly forward
any future amendments to the Master Lease to Tenant. In the event
that the Master Lease shall be terminated for any reason
whatsoever, this Lease shall likewise terminate without further
liability to either party. During the term of this Lease, Tenant
does hereby expressly assume and agree, for the benefit of Landlord
and Master Landlord, to perform and comply with and be bound by
each and every obligation of and restriction on Landlord under the
Master Lease, except for the payment of rent, as such obligations
relate to the Premises. The obligations that Tenant has assumed
under this Section are hereinafter referred to as
“Tenant’s Assumed Obligations.” Tenant shall
indemnify and hold Landlord free and harmless from and defend
Landlord and all officers, directors, partners, shareholders,
agents, employees, representatives and affiliates of Landlord and
of any affiliated company or person against all liability,
judgments, costs, damages, claims or demands, including reasonable
attorneys’ fees, arising out of Tenant’s failure to
comply with or perform Tenant’s Assumed
Obligations.
3. Rent .
3.1 Basic Rent . All Basic
Rent shall be payable in advance, on the first day of each calendar
month during the term of this Lease. If the first month of the
Lease is a partial calendar month, Basic Rent shall be due on the
first day of the term of this Lease for that partial month. Basic
Rent shall be increased three and one half percent (3.5 %) per
Lease year, adjusted every five (5) years . For example, at
the beginning of the sixth year of the Lease, Basic Rent will be
increase from $25,000 per month to $29,692.16 per month.
3.2 Concession Fees . Tenant
shall pay to Landlord, 15 business days prior to the due date, all
amounts (“Concession Fees”) payable to Master Landlord
under the Master Lease on account of Tenant’s operations at
the Premises or otherwise pursuant to this Lease. Tenant
acknowledges that it has received, read and understands the
provisions of the Master Lease. Tenant also agrees to provide to
Landlord, promptly 15 business days before due, at Tenant’s
expense, all reports and operating statements required by the
Master Lease to be provided on account of its operations within the
Marina or determined by Landlord or Master Landlord to be required
to confirm the amount of Concession Fees. Tenant shall pay any
penalties imposed by the Master Landlord arising as a result of
Tenant’s breach of its obligations to furnish reports as
required by this Section.
3.3 Percentage Rent .
Percentage Rent shall be payable monthly, within fifteen
(15) days after the end of each calendar month Landlord shall
have the right, at any time during regular business hours, upon
reasonable notice to Tenant, to inspect the books of Tenant for
purposes of verifying the accuracy of Tenant’s payment of
Percentage Rent.
3.4 Payment of Rent . Rent
payments shall be delivered to Landlord at Landlord’s
address. Checks shall be made payable to KOA, Inc.
“Rent” hereunder shall include Basic Rent, Percentage
Rent, if applicable, Concession Fees and, as “Additional
Rent,” such other sums and expenses payable by Tenant on the
terms and conditions specified in this Lease. Rent payable for any
fractional portion of a month or year at the beginning or end of
the term of this Lease shall be a like fraction of the Rent due for
an entire month or year. If any Rent payment is not received within
five days after it is due, Tenant shall pay a late charge of 5% of
such payment, or interest from the date the Rent was due at the
maximum lawful rate, whichever is greater.
4. Security Deposit . Tenant
has deposited with Landlord the Security Deposit as security for
the full performance and observance of Tenant’s obligations
under this Lease. If Tenant is in default under this Lease,
Landlord may use the whole or any part of the Security Deposit to
satisfy any sum due to Landlord or to defray any expense or damage
reasonably incurred by reason of the default. In the event that all
or part of the Security Deposit is so used, Tenant shall on demand
pay to Landlord a like sum to replenish the Security
Deposit. Landlord is not a trustee of the
Security Deposit and may commingle it or use it in ordinary
business. No interest shall accrue on it. At the termination of
this Lease or any extension or renewal thereof, if Tenant is not
then in default, Landlord shall return the remaining balance of the
Security Deposit to Tenant or, at Landlord’s election, to the
last assignee of Tenant’s interest. If Landlord shall
transfer its interest in the Marina during the term of this Lease,
Landlord may pay the Security Deposit to the transferee and
Landlord will then be released from all liability to Tenant for the
return of the Security Deposit.
5. Use .
(a) Tenant shall operate on the
Premises the business described in Section 1(j) and shall use
the Premises for no other purposes without the specific consent of
Landlord, which consent may be withheld in Landlord’s
reasonable discretion. Tenant shall continuously and at all times
actively and diligently operate its business on the Premises in a
first class and reputable manner. Tenant shall employ its best
business judgment, efforts and abilities to operate its business on
the Premises in an efficient and businesslike manner so as to
enhance the reputation and attractiveness of the Premises and the
Property.
(b) No use shall be made or
permitted to be made of the Premises, nor any act done, which may
increase the existing rates of insurance upon the buildings within
which the Premises are located, or which may cause the cancellation
of any insurance policy covering said buildings or any portion
thereof. If any act on the part of Tenant or use of the Premises by
Tenant shall cause, directly or indirectly, an increase of
Landlord’s insurance expense, said additional expense shall
be paid by Tenant to Landlord upon demand. Such payment by Tenant
shall not limit Landlord in the exercise of any rights or remedies.
Tenant, at its sole expense, shall comply with any and all
requirements pertaining to the use of the Premises, or of any
insurance organization or company, which compliance may be
necessary for maintenance of reasonable fire, extended coverage,
public liability and other insurance upon the buildings and the
appurtenances thereto.
(c) Tenant shall not commit, or
suffer to be committed, any waste or nuisance upon the
Premises.
(d) Tenant shall keep the Premises
open for business within reasonable commercial business hours a
minimum of 6 days each week during the season (March through
October) or such other hours as Landlord and Tenant may mutually
agree. During the off season (November through February) Tenant may
reduce its hours comparable with other marine related businesses at
the Marina.
(e) Tenant shall not vacate or
abandon the Premises at any time during the term of this Lease. If
Tenant shall abandon, vacate or surrender the Premises, or be
dispossessed there from by process of law or otherwise, any
personal property belonging to Tenant and left in or upon the
Premises shall be deemed abandoned at the option of
Landlord.
(f) Tenant shall not post or erect
any signs at the Premises or elsewhere at the Property without
Landlord’s prior written consent. During the Lease, Landlord
approves Tenant’s use of a minimum of three signs at the
Property : 1) The current Highway 12 billboard sign at Tower Park
Way, 2) a sign on the roof of Shed #3, and 3) a sign at the end of
the building facing the entrance (Shed #1). If Tenant wishes to
add a new sign at any time, it shall submit drawings
and specifications to Landlord in advance, which Landlord shall
review and either approve or reject within thirty (30) days.
Tenant shall pay all costs associated with installing and
maintaining its signs, except that Landlord shall pay one half of
all costs associated with the existing billboard facing Highway 12;
provided that, if either Tenant or Landlord desires to change the
billboard message and the other party does not, then the party
initiating the change shall bear the cost of making the change. The
parties shall endeavor in good faith to mutually agree to any
proposed change in the billboard message prior to effecting any
such change. All signage shall be maintained in first class
condition. Damage due to extraordinary or unusual wear and
tear, accidents and/or vandalism shall be promptly
repaired.
(g) Tenant assumes full
responsibility for the safety and security of Tenant,
Tenant’s employees and customers, any other people at the
Property because of Tenant (e.g., visitors, sales people, etc.),
and all of such persons’ personal property (e.g., cars,
boats, equipment) while such persons and property are at the
Property.
6. Compliance with Laws/Hazardous
Materials .
6.1 Compliance with Laws .
Tenant shall, at Tenant’s cost and expense, cause the
Premises to be used in accordance with all: (a) laws,
ordinances, codes, licenses, permits, orders, rules, regulations
and requirements of every duly constituted governmental or
quasi-governmental authority or agency (“Laws”)
applicable to Tenant or the Premises, including without limitation,
all applicable Laws pertaining to air, water and upland
runoff/storm water quality, fuel storage tanks, Hazardous Materials
(as defined below), air emissions and other environmental matters
(“Environmental Laws”), all zoning and other land use
matters and the Americans with Disabilities Act; (b) similar
applicable orders, rules and regulations of any regulatory,
licensing, accrediting, insurance underwriting or rating
organization or other body exercising similar functions;
(c) policies of insurance at any time in force with respect to
the Premises;
and (d) the Property rules. If Tenant
receives any notice that Tenant or the Premises is in default under
or is not in compliance with any of the foregoing, or notice of any
proceeding initiated under or with respect to any of the foregoing,
Tenant will promptly furnish a copy of such notice to
Landlord.
6.2 Hazardous Materials Upon
Premises Prohibited; Indemnity Tenant shall not have or allow
any Hazardous Materials upon, about or beneath the Premises or the
Property, except (i) small quantities of Hazardous Materials
commonly used in normal office operations or for Premises cleaning
and maintenance and used for those purposes by Tenant,
(ii) boat fuel, oils and other fluids contained in the boat
in-use fuel tank, engine or other mechanical system (iii) fuel
associated with the fuel dock operations and (iv) other
Hazardous Materials associated with full service marina operations.
Without limiting the provisions of Section 21.6, Tenant shall
indemnify, defend and hold Landlord and all officers, directors,
partners, shareholders, agents, employees, representatives and
affiliates of Landlord and of any affiliated company or person
harmless from and against any and all Environmental Damages (as
defined below). Tenant’s obligation under this Section shall
survive the expiration of this Lease.
6.3 Definitions .
(a) “Environmental
Damages” means all claims, judgments, damages, losses,
penalties, fines, liabilities (including strict liability),
encumbrances, liens, costs and expenses of investigation and
defense of any claim, whether or not such claim is ultimately
defeated, and of any good faith settlement of a claim, of whatever
kind or nature, contingent or otherwise, matured or unmatured,
foreseeable or unforeseeable, including without limitation
reasonable attorneys’ fees and disbursements and
consultants’ fees, any of which are incurred at any time as a
result of (i) any Hazardous Material that comes to be present
at or is disposed of or released at or from the Premises during the
term of this Lease, (ii) any Hazardous Material that comes to
be present or is disposed of or released at or from the Property
due to Tenant’s action or inaction, or (iii) the breach
of any provision of Section 6 of this Lease involving
Hazardous Material or Environmental Laws, including without
limitation lost profits, consequential damages (foreseeable or
unforeseeable), diminution of property value, claims brought by or
on behalf of employees of Tenant (with respect to which Tenant
waives any immunity to which it may be entitled under any
industrial or workers’ compensation laws, fees incurred for
the services of attorneys, consultants, contractors, experts,
laboratories and all other costs incurred in connection with the
investigation or remediation of such Hazardous Materials or breach
of Section 6 as required by law and as necessary to make full
economic use of or restore the full economic value of the Premises
or any other affected property or otherwise expended in connection
with such conditions.
(b) “Hazardous Material”
means any substance (i) which is or becomes defined as
“hazardous” under any federal, state or local Law,
(ii) which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise
hazardous and which is or becomes regulated as such by any federal,
state or local governmental authority, (iii) the presence of
which requires investigation or remediation under any federal,
state or local law, (iv) which causes or threatens to cause a
nuisance upon or waste to the Premises, the Property or adjacent
properties or threatens to pose a hazard to the health or safety of
persons on or about the Property, or (v) without limitation
contains gasoline, oil, diesel fuel or other petroleum products,
asbestos or polychlorinated biphenyls (PCB’s).
6.4 Obligation to Remediate .
Notwithstanding the obligation of Tenant to indemnify Landlord
pursuant to this Lease, at Landlord’s option Tenant shall, at
its sole cost and expense, promptly take all actions required by
any federal, state or local governmental agency or political
subdivision or reasonably necessary to mitigate Environmental
Damages. Such actions shall include, but not be limited to, the
investigation of the environmental condition of the Premises, the
preparation of any feasibility studies, reports or remedial plans,
and the performance of any cleanup, remediation, containment,
operation, maintenance, monitoring or restoration work, whether on
or off of the Premises. Tenant shall take all actions necessary to
make full economic use of and restore the full economic value of
the Premises and any other affected area, notwithstanding any
lesser standard of remediation allowable under applicable law or
governmental policies. All such work shall be performed by one or
more contractors, selected by Tenant and approved in advance and in
writing by Landlord. Tenant shall proceed continuously and
diligently with such actions, provided that in all cases such
actions shall be in accordance with all applicable requirements of
governmental entities. Any such actions shall be performed in a
good, safe and workmanlike manner and shall minimize any impact on
the business conducted at the Premises and any other affected area.
Tenant shall pay all costs in connection with such investigatory
and remedial activities, including but not limited to all power and
utility costs, and any and all taxes or fees that may be applicable
to such activities. Tenant shall promptly provide to Landlord
copies of testing results and reports that are generated in
connection with the above activities. Promptly upon completion of
such investigation and remediation, Tenant shall permanently seal
or cap all monitoring wells and test holes to industrial standards
in compliance with applicable federal, state and local laws and
regulations or such more stringent specifications as may be
necessary to make full economic use of and restore the full
economic value of the Premises and any other affected area, remove
all associated equipment, and restore the Premises and any other
affected area to the maximum extent possible, which shall include,
without limitation, the repair of any surface damage, including
paving, caused by such investigation or remediation hereunder.
Within 10 days of demand therefore, Tenant shall provide Landlord
with a bond, letter of credit or similar financial assurance
acceptable to Landlord evidencing that the necessary funds are
available to perform the obligations established by this
paragraph.
7. Personnel . All personnel
employed by Tenant shall be clean, neat, courteous and responsive
to the needs of boat owners and other customers at all times.
Tenant’s employees shall park their personal vehicles only on
the Premises or in areas designated by Landlord. Failure of
Tenant’s personnel to comply with the foregoing shall
constitute a default hereunder.
8. Alterations . Tenant shall
not make nor suffer to be made any alterations, additions or
improvements to or of the Premises or any part thereof without the
written consent of Landlord, and Master Landlord, if required by
the Master Lease
9. Liens . The interest of
Landlord in the Premises shall not be subject to liens for
improvements made by Tenant. Tenant will not permit to remain and
will promptly discharge, at its cost and expense, all liens,
encumbrances and charges upon the Premises or any part thereof.
Landlord shall have and is hereby given authority to enter upon the
Premises at any time to post any notices which, in its opinion,
shall be necessary to hold Landlord harmless from any claim or
liability arising out of any work done on the Premises. Landlord
may require Tenant to execute and cause to be recorded a memorandum
of this Lease or such other documents as Landlord may determine to
be necessary to effect such purposes. If Tenant shall fail to
discharge such liens as aforesaid, then, in addition to any other
right or remedy of Landlord, Landlord 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
depositing in court or by giving security or in such other manner
as is or may be prescribed by law. Any amounts paid by Landlord for
any of the aforesaid purposes and all reasonable expenses of
Landlord, including counsel fees, with interest thereon at rate of
the lesser of